While Western economies are in poor shape, there is cause for optimism amongst the oil-rich nations of the Gulf Cooperation Council according to Dr Nahed Taher, founder and CEO of the Gulf One Investment Bank.
Dr Taher was speaking at Lancaster University Management School recently, where she completed a PhD in Economics in 2001. Today she is ranked 24th in the Financial Times Women At The Top report and was one of only four Arab women to be ranked In the Forbes Top Hundred Women.
She was in Lancaster to receive an Honorary Professorial fellowship from the University. While on campus she spoke to the full-time MBA class about macroeconomics in the GCC.
She painted a picture of a region that has largely escaped the financial consequences of the current recession and, despite the potential hazards of the Arab Spring, has remained financially buoyant thanks to large oil revenues.
But all is not necessarily bright for the GCC nations – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – who face plenty of challenges alongside a picture of healthy economic growth. Unemployment, particularly among the young, remains high, and the risk of inflation, while lessened by the global downturn, is still very real.
The fruits of the region’s vast oil reserves do not diffuse much beyond a privileged and powerful oligarchy. Transport and infrastructure are still underdeveloped relative to the West and to the ‘tiger economies’ of Japan and South Korea. These problems could not only have dire political consequences, but economic ones as well.
Unlike in the Western world, Dr. Taher said, these problems would not be fixed through public sector spending, but should instead be addressed by private investment, as many of the sectors requiring investment, such as transportation and education, were low-risk, high-reward sectors to invest in, and thus should form an attractive target for private sector investment.
The investments required are already being run in part by Dr. Taher’s company, which runs a series of infrastructure and service-based projects, along the lines of the schemes that Gulf One already runs.
For example, the Moya Holding Company, which invests in clean water and desalination techniques, or the SCC Mena carbon adjustment research scheme. Plans such as these, says Dr. Taher, can prepare the GCC for the challenges of climate change and declining oil reserves, and head off the challenges of underinvestment in infrastructure and education.
She also said that during her time at Lancaster she realised that there were, “A lot of deficiencies” in her region and that she wanted to be, “Part of the solution”. She also gained a lot of confidence that she could, “Do a lot in the world” after graduation
Dr Taher also described her first meeting with the Saudi Minister of Finance in the conservative capital Riyadh. He was “shaking” at the prospect of meeting with a female, but Dr Taher told him that she was there simply as a professional.
One Lancaster student at the lecture described Dr Taher as, “Completely inspirational”.
Click here for highlights of Dr Nahed Taher's lecture at Lancaster.