10 events that shaped the Gulf’s economies in 2022

Reuters/Ahmed Jadallah

• Region is having a more significant role to play in international relations
• Increasingly confident to develop independently of external powers

This last year has been book-ended by two of the largest events the Gulf has ever seen: Expo 2020 Dubai and the Fifa football World Cup in Qatar, helping the region throw off the shackles of the coronavirus pandemic.

Many events share a common theme, according to Andreas Krieg, associate professor at King’s College London.

“The most significant trend we’ve seen in the Gulf this year has been the increasing confidence of the Gulf countries vis-à-vis great and middle powers,” he said.

“The Biden visit, the Xi visit, the Expo and the World Cup have all been part of the same trend where we see the Gulf having a much more significant role to play in international relations.

“The Gulf has to play that middle ground role between East and West. What we see now is these Gulf countries are confident enough to develop their own foreign and security policy independently of external patrons and great powers.”

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1. Expo 2020 Dubai
   The world fair came to an end in March, with organisers claiming more than 24 million visits during the event’s six-month run. A third of those visitors were from overseas and around half were repeat visitors. The task now is to ensure the event leaves a positive legacy and for the site to become a viable community.
2. Ukraine war
   Russia’s invasion of Ukraine in February had a profound impact on economic and diplomatic considerations for the Gulf. The most obvious impact was the windfall from higher oil prices. However, it also led to political tensions with western countries that wanted the Gulf to help isolate Russia. Gulf leaders have sought a middle ground, but it has not been easy. A UN General Assembly vote on March 2 saw the GCC states vote to condemn Moscow, but they abstained in an April vote to suspend Russia from the UN Human Rights Council. Gulf countries have also stuck with the Opec+ agreement with Russia to limit oil production.
3. UAE reforms
   The oil windfall has not changed the long-term need for economic diversification. In the UAE, the liberalising measures announced over recent years, designed to attract capital and talent, continued in 2022. Reforms to employment rules announced in early 2022 mean UAE citizens will now be offered fixed-term, renewable contracts instead of the open-ended ones they previously enjoyed. In December, the authorities announced a federal law for non-Muslim foreigners giving women equal rights in divorce proceedings and other areas.
4. The passing of Sheikh Khalifa
   Mohammed Bin Zayed Al-Nahyan was named UAE president on May 14, taking over from President Khalifa, who died after a long illness. Mohammed Bin Zayed had been de facto president for several years, but now has a freer hand to pursue his own agenda.
5. Biden in Jeddah
   US President Joe Biden travelled to Jeddah on July 15 for talks with leaders from the GCC, Egypt, Iraq and Jordan. It was a relatively subdued affair, with none of the bombast of Donald Trump’s visit to Saudi Arabia early in his presidency, when $110 billion of defence deals were announced. In particular, there was no breakthrough on oil production, with Riyadh resisting Washington’s entreaties to raise output to help lower prices.
6. Crypto crisis
   With the value of Bitcoin down about 70 percent and the collapse of FTX, one of the world’s largest exchanges, the cryptocurrency sector was badly shaken. The Gulf is aiming to be a hub for crypto, and Changpeng Zhao, the CEO and co-founder of Binance, told delegates at an event in Abu Dhabi that the industry needed to adapt. “Confidence in the industry is shaken,” he said. “Going forward regulators are going to scrutinise this industry a lot more.” Time will tell how Gulf regulators will act in 2023.
7. Iraq’s government
   Iraq finally appointed a government on October 27, a year after an election which had made Shia leader Moqtada Al-Sadr the most influential politician in the country. Sadr failed to translate that into a workable parliamentary majority and it was rival parties in the Coalition Framework that appointed a prime minister, Mohammed Al-Sudani. Whether he will be able to provide economic growth, security and jobs and tackle corruption remains to be seen. 
8. Cop27 deal
   Countries adopted a hard-fought final agreement at the climate summit that sets up a fund to help poor countries being battered by climate disasters – but does not boost efforts to tackle the emissions causing them. The approval of the creation of a dedicated loss and damage fund still left many of the most controversial decisions – including who should pay into the fund – until next year, when the summit will be held in the UAE.
9. Xi visit
   President Xi Jinping’s visit to Riyadh in December saw a wave of deal-making, with 34 agreements between Saudi and Chinese companies and numerous government-to-government memoranda. China signed investment deals worth an estimated $50 billion with Gulf nations during the visit. This is on top of the fact that GCC-China trade has already doubled from $90.6 billion to $180 billion between 2010 and 2021, according to the Asia House think tank.
10. The World Cup
    Qatar’s moment on the world stage came to an exhilarating conclusion on December 18, with the final between Argentina and France. The presence of France’s President Emmanuel Macron highlighted once again the diplomatic significance of the event. The full commercial impact will take time to emerge, but the country now has world-class sporting and transport infrastructure that should bolster its tourism and hospitality sector for years.

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