Home Opinion In a post Brexit world, GCC opportunity knocks

In a post Brexit world, GCC opportunity knocks

The Saudi deputy crown prince Mohammed bin Salman describes himself as a fan of Winston Churchill and likes to quote Britain’s great wartime prime minister’s statement that “opportunities come out of crises.” The existentialist crisis that Britain has plunged itself into with the surprise victory of the Brexit campaign and the subsequent political fallout that has seen both the government and the main opposition engaged in vicious infighting is surely a crisis of Churchillian proportions.

So as the political dogfights continue and the UK drifts towards an uncertain future now is as good a time as any to reflect on the opportunities that may arise for both the UK and its long-time friendsand trading partners in the GCC states, chief among them Saudi Arabia.

Peter Meyer is the chairman and CEO of the Middle East Association (MEA), an organisation formed nearly 60 years ago as a private arm of the foreign office with an original mission to increase trade and commerce in the Arabian peninsula. Now fully independent of government, the association has long since broadened its geographical coverage of the MENA region, stretching from Iran in the east to Mauritania in the west.

He says that while it may be too early to assess the long term implications of Britain’s withdrawal from the EU, he anticipates that trade with Europe will slump and therefore “(the UK) will be working very hard to compensate for that with other countries with whom we already have good relations and clearly the GCC is part of that group where we have first class relationships.” Meyer thinks that “on balance a positive result could come out of Brexit in our (increased) trade with the GCC.”

Coinciding, as Brexit does, with Mohammed bin Salman’s ambitious plan to revolutionize the Saudi economy, Vision 2030, the MEA chief sees opportunities for British businesses as the kingdom strives to fulfil tight targets set by the deputy crown prince to provide jobs and housing for a rapidly expanding youth population while weaning the economy off its dependency on oil. Vision 2030 is also pushing for privatization of key sectors such as education and health while encouraging many more women into the work force.

Meyer believes that the necessity for economic transformation in the kingdom will breed new opportunities for British businesses, particularly in the area of skills training. He points out that young Saudis may not have the right sort of skill sets that Vision 2030 expects of them: “There is quite a good education system there for women as well as men but they are being trained in a fairly theoretical sort of way and therefore are not really ready for the workforce when they leave educational training. So I think they will come to (the UK) and ask for the skilled training and that could be a very big area of cooperation.”

Some have floated the idea of a free trade pact with the GCC and it is worth noting that the EU has been discussing the issue since 1988 with no resolution in sight. But with Brexit, free trade with the GCC starts to sound less unlikely as the UK looks for deals all over the world to compensate for the loss of access to the EU internal market.

There are however significant obstacles to a free trade deal, not least of which is the difficulty of the GCC to agree amongst themselves on a whole range of matters from a common currency through to handling relations with regional rival Iran, to say nothing of a comprehensive agreement with Britain.

A more likely scenario is bilateral deals like the avoidance of double taxation pact that the UK signed with Dubai in April of this year.

Either way, a UK that aggressively pursues new trade opportunities with its old friends in the Gulf, either through a comprehensive free trade deal or bilateral pacts is something that Peter Meyer believes will be good news for the MEA’s 350 members, most of them small and medium sized enterprises. The association is holding a seminar in London 20 September called Opportunity Arabia and Meyer is looking forward to a big Saudi presence. As he puts it “with our very long experience of dealing with Saudi we hope to draw a lot more potential export work as a result of the conference.”

And who knows, perhaps by then, the rest of us will have some idea of just where in a post-Brexit world UK trade is headed. For the MEA, the GCC looks as strong a bet as any.