Dubai - XINHUA
The eight Arab oil states are well on track to outperform growth in the Middle East and North Africa (Mena) due to a successful diversification policy and ample financial resources, albeit more structural reforms are needed, according to the Washington-based global banking association Institute of International Finance (IIF). IIF President and Chief Executive Tymothy D. Adams said here during the IIF's annual meeting of Mena bank chief executives that the world economy was no longer in retrospective after the global financial crisis but in prospective which was positively affecting the emerging markets and the Mena region. Despite tensions in Egypt and other non-oil Arab countries, the Arab oil exporters, in particular the Gulf states would benefit from ample capital inflow, advancing economic diversification and a boom in infrastructure spending and trade. The eight Arab oil exporters are the six countries of the Gulf Co-operation council (GCC), including Saudi Arabia, Kuwait, Bahrain, Qatar, United Arab Emirates and Oman, plus Iraq and Libya. George T. Abed, the senior counselor and director for the region said that the gross domestic product of the Mena, excluding Iran, were expected to grow by 3.4 percent in 2014. "The average, however, masks a sharp divergence as the eight oil-exporting countries are projected to grow at about four percent while the six non-oil countries will continue to struggle to achieve even modest growth of 2.3 percent with high unemployment, and persistent macroeconomic imbalances," said Abed. He said that most Mena countries, oil and non-oil alike, were still in need of more structural reforms such as a reduction of energy subsidies in favor of spending for education. "The fiscal positions of the oil exporters will remain in a large surplus of around six percent of gross domestic product (GDP) , while oil importers (such as Jordan, Egypt, Lebanon or Morocco) face deficits of 10 percent of GDP," said Abed. In addition, the financial position of the oil-exporting countries continues to gain strength as total foreign net assets rose to 2.5 trillion dollars in 2013, according to figures compiled by the IIF . "That is equivalent to 95 percent of their aggregate GDP," explained the IIF Mena expert, adding the oil-importing countries' reserves represent 28 percent of GDP, "or three and a half months of imports". Abed added that non-oil countries like Egypt and Tunisia were slowly working their ways through the political challenges of the post-Arab-turmoil era and could achieve political stability in a year or two. The IIF also plans to open a regional office in the Dubai International Financial Center, said Abed..