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Trade between Asia and MENA set to expand

Discussions between 150 senior decision-makers in the international investment markets that focused on expanding economic links and boosting financial ties between Asia and the MENA region opened the inaugural Asia-Middle East Investment Summit in Singapore recently.

Co-located with the 3rd Annual World Islamic Banking Conference:Asia Summit (WIBC Asia 2012), the event was inaugurated with a special welcome address by H H Sheikh Salman bin Khalifa Al Khalifa, honorary chairman of the Bahrain Petroleum Company.

He said that “the financial markets in the GCC saw increasingly broad, positive progress in terms of volume trading during the first quarter of 2012, further building on the recovery that began to take shape in the second half of last year. This forward momentum was particularly evident in bank lending and Sukuk markets. These encouraging trends are underpinned to a significant extent by the strong regional economic growth which has benefited from a re-focus in government spending, especially towards infrastructure projects.

Turkey is often the MENA gateway to Asia

“Throughout the past three decades, Bahrain and Singapore have embraced each other not as competitors but as colleagues, working together with a mutually-shared interest in the development and implementation of international best practices in the field of financial services”.

He added that “forums such as the Asia-Middle East Investment Summit represent the latest initiative in this recognition of the growing importance of blocs and regions outside of the Eurozone and the USA in providing the engine of growth in the global economy”.

Another address was given by Ben Simpfendorfer, managing director of Silk Road Associates. Simpfendorfer, one of the world’s leading experts on relations between Asia and the Middle East and author of the influential The New Silk Road: How a Rising Arab World is Turning Away from the West and Rediscovering China, shared critical insights on renewing the Silk Road and identifying the growth prospects for Asia-Middle East investment flows.

His belief is that “the global crisis has had little impact on the rise of a new Silk Road, even binding the region together more tightly. Trade between Asia and the Middle East is flourishing, its total value rising above $400bn last year. The Middle East now supplies three out of 10 barrels of oil consumed by China.

“Korean construction firms earn nearly a third of their total revenues from the Middle East. Even in cross-border investments, change is finally happening, as countries along the new Silk Road look for alternatives to established markets in Europe and the United States. But the key question that remains is where are the new growth sectors and opportunities”?

AMEIS 2012 also featured an exclusive industry leaders’ power debate session that assessed the significant growth potential of cross-border trade and investment flows between Asia and the Middle East as the two regions are set to enter a stronger phase of inter-connectedness.

The session discussed how investments could be more powerfully mobilised between Asia and the Middle East and how industry leaders could successfully tap into the significant growth potential of cross-border trade and investment flows between the two high-growth regions.

Addressing the media present at the event, David McLean, chief executive of the Asia-Middle East Investment Summit, said that “Asia and the Middle East are two regions of the world that not only have immense potential in themselves but also have the potential to shape each other’s futures for the better.

“With Asia and the Middle East being on an upward trajectory of economic growth, the increasing trade and financial flows between the two regions are in many ways obvious. With both the regions aiming for a more diversified and balanced growth, and given abundance of liquidity and capital in both the regions, there are significant opportunities for cross-border trade and investment flows as investors look for markets which can offer higher returns at acceptable risk levels”.

A similar view was expressed by Giel Jan Van Der Tol, group head of wholesale banking at Emirates NBD, who said that “with the economic centre of the world rapidly shifting towards the East, it’s more important than ever for there to be greater connectivity between the Middle East and the fast growing economies in Asia, beyond the traditional role of the Middle East as a provider of energy resources. With the trade and financial ties between the Middle East and Asia strengthening by the day, new avenues for significant cross-border investments are opening up which need to be effectively translated into meaningful transactions”. n

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