Global Britain must seize Middle Eastern opportunities post-Covid
As the Middle East ploughs ahead with its successful vaccination campaign, their economic recovery will follow. A post-Brexit Britain must embrace its commonalities with the Middle East to forge a strong relationship and learn from their digital prowess, argues Joshua Jahani.
Britain's neighbours at the top of the vaccination ranking will be surprising to some: Israel, Bahrain and the UAE. The post-Covid world order will be determined by who can put the pandemic behind them first, and recover fastest, and the UK and several of its Middle Eastern allies are leading the pack.
While America argues over the validity of wearing a mask and Europe debates vaccine safety, does Downing Street, and the City, understand that the post-Covid world could be Middle Eastern – and that a post-Brexit Britain stands to benefit?
The pandemic has certainly created opportunities for more agile and adaptable countries, such as those in the Middle East.
But those Middle East states have something else going for them that Britain doesn't: they are on good terms with China as well as the USA.
Two years ago, Saudi Crown Prince MBS declared that the Middle East could become the "New Europe." At the time, many brushed it off as nothing more than a slick headline. Post-pandemic, with the rise of the Middle East as a gateway between the USA and China, those doubters should think again.
Throughout the 20th century, Europe operated as a buffer between the two global superpowers of the USA and USSR. What was true for Europe then is true for the Middle East now: it is a geographic, political and economic neutral territory.
While the pandemic has devastated Europe, the Middle East has evolved through it. This is partly due to the region's investment strategy in infrastructure, technology, and growth. These have optimised the region for a post-Covid world.
For much of the last century, the region was defined by conflict. Many of those conflicts have cooled in recent years in Israel, Yemen and Syria.
The next century is therefore looking more like a return to what was normal for much of modern history when the Silk Road was the historical intersection of civilizations. The Middle East is becoming the social, economic, cultural, and political centre of the world.
The pandemic has paralysed societies and economies across the world. In the Middle East vaccination rates are high (particularly in Israel, the UAE and Bahrain) and across the region death rates have been remarkably low.
Life has gone on, and in many sectors, business has been almost uninterrupted. This success is not a coincidence; it is the result of long term forward thinking, planning and an agile leadership culture.
Saudi Arabia has been working to almost triple its non-oil revenues and has invested billions into futuristic projects like NEOM and "The Line". The UAE didn't let the pandemic stop it from completing a mission to Mars last month, while much of the UK and Europe was in lockdown.
While we busily discuss the "death of London", Dubai's ruler announced this week that he plans to increase the city's population by 76% by 2040, as well as make 60% of its area parkland and create an accessible public transport infrastructure. As influencers fled from the UK to Dubai during lockdown, it was often joked that "Dubai is the new London". Evidently, those in the region are not laughing.
But perhaps the Middle East's greatest strength is that an investor is equally at home there, whether they happen to be Chinese or American.
Dubai's Burj Khalifa, the tallest building in the world, is illuminated for the Chinese New Year, as well as the Western New Year. The region's Muslim leaders have made a point of not taking sides in the US-China war of words, even as Beijing's alleged mistreatment of Muslim minorities is used against it in the PR stakes.
In the City, the Middle East in general and the Gulf states in particular, are viewed as sources of investment cash. This is likely to be even truer post-Covid, since they have some of the lowest debt to GDP ratios in the world (both Saudi Arabia and the UAE) are around 20%, whereas the UK is over 100%. A lower debt to GDP ratio means the government will have spending power well into the future for public and private projects.
But to really benefit from a UK-Middle East relationship, London will need to look beyond the money.
Boris Johnson will have to think more broadly about the region than he did as Mayor, when it was merely a target of his (very successful) inward investment campaigns.
He will also have to move past the impulses that drove actions between the UK and Middle East in 2001 and realise that the new Middle East is a modern, digitised powerhouse. He must make sure this view filters down to policymakers, business leaders, investors, and the capital markets.
An agile, pragmatic, deal making post-Brexit Britain has more in common – at least economically – with its allies in the Middle East than its neighbours in Europe. Britain should embrace that.
