Old friends, new vision: the Gulf and UK are shaping the future

The Gulf and the UK have long enjoyed a special friendship, bound by diplomatic, cultural and historical ties. In the coming years, this unique bond will help provide a springboard for a shared tomorrow. 

This won’t be just any future: it will be a bilateral, tech-charged reality fuelled by the demands of the fourth industrial revolution – where traditional machines give way to increasing interconnectivity and smart automation.

As the Gulf re-embarks on its ambitious economic diversification plans – with memories of global pandemic supply chain shocks still fresh – it will be counting on its newly liberalised trade and citizenship policies to reinvigorate both domestic ecosystems and international investment.

• The UK-Saudi strategic trade partnership just got closer

Arabian Gulf Business Insight (AGBI) is excited and privileged to document the next wave of development in what is the world’s most dynamic region.

I have a great love of the GCC, having worked in the region for over a decade. Its energy, zeal and modern ambition, underscored by a deep Arab heritage, make for an extraordinary place to live and do business.

Now, writing from my hometown of London – the HQ of AGBI – I am struck by the enormous potential for the UK and the wider world to work hand-in-hand with the Gulf to achieve progressive national and global objectives. 

AGBI intends to be a breath of fresh air blowing through the media landscape. Our mission is to become a high-quality digital hub where regional commerce meets global partners, and where global partners discover and leverage an efficient gateway to the Gulf region.

Riding the wave of change

From Saudi Arabia to the UAE, Oman, Bahrain, Qatar and Kuwait, each nation is laser-focused on the GCC’s universal challenges of digitisation, sustainability, net zero, employment, building knowledge economies, balancing public and private sectors and, ultimately, attracting foreign direct investment.

Weighing in its favour, the region is home to a young, growing and dynamic population of around 42 million. The populace is increasingly digital-savvy and hungry for innovation as regional governments plough investment into telecoms, smart cities, artificial intelligence and the wider connected economy.

The Gulf has never been short on the ambition, tenacity and chutzpah required to become the most connected region in the world. The GCC is also set on becoming net zero in the coming decades, boldly combating its status as the world’s top emissions generator.

London calling

As the Gulf economy looks to diversify and move up the value chain, its governments are increasingly looking to the UK, with its historic pedigree in research, innovation and technology. By merging the strengths and visions of both regions and galvanising mutual knowledge transfer and investment, the UK is set to fuel the rise of the Gulf as the world’s most digitised hub. In parallel, the UK can expect to benefit from mutually assisted research and development, growing partnerships and trade links.

The potential sectors for bilateral collaboration are as diverse as they are exciting.

Let’s begin with the numbers: for the year ending Q1 2020, total trade in goods and services between the UK and the GCC was £43.7 billion ($54.8 billion), an increase of 6.5 percent, or £2.7 billion, from the year ending Q1 2019. Between 2019 and 2035, the GCC’s imports from the UK are projected to grow by around 35 percent in real terms, according to the British government.

Refined oil features heavily in GCC exports to the UK, but this is changing – with a growing focus on machinery, power generators and aircraft. Conversely, the UK is strong on exporting travel, financial and transport services.

The UK’s withdrawal from the European Union is emboldening British companies to forge a closer and more direct relationship with Gulf governments and businesses. As Britain forges its new identity, it is reportedly keen to seal around 80 percent of its global trade deals by year-end. And at the top of that list is the GCC.

Parallel raw ambition

The UK Department for International Trade is splashing billions of pounds on strengthening business links between the two regions – citing parallel visions of innovation, sustainability and digitisation. 

There are many trade and investment synergies that lie at the juncture of British competitive advantages and the bold development strategies of the GCC countries – such as fintech, medtech, greentech, renewable energy, edtech, transportation, tourism, smart manufacturing and autonomous technologies. 

In September 2021, the UAE signed a £10 billion agreement with the UK government, significantly expanding the two countries’ Sovereign Investment Partnership. The cash is being targeted at key sectors of the UK’s economy over a five-year period – technology, infrastructure and energy transition, as well as building on the existing £1 billion programme of life sciences investment.

Breaking down barriers

Officials from the GCC and UK agreed to work rapidly towards a comprehensive free trade agreement in December last year as both parties seek to cement their post-Brexit trading relationship. The deal is expected to close by Q4 2022.

According to Ranil Jayawardena, the UK’s minister for international trade: “The nations forming the GCC are, together, one of our biggest trading and investment partners. From exports of Welsh lamb and Scotch beef, to biscuits from Belfast and financial services from the City of London, we are determined to strike a deal that will further cement our relationships, attract investment, promote trade opportunities and provide significant benefits for British business, creating jobs in communities across the country.”

As the Gulf pushes ahead with its visionary policies, the scope for UK collaboration only continues to grow. 

While the GCC’s zeal for the future is well documented, its voracious appetite for innovation has historically been predicated on following global technology trends, rather than inventing them.

Now is the time for Gulf states to step up as genuine arbiters of change and disruptive transformation on the international stage. AGBI is here to deliver deep insight on – and expedite – regional progress. I hope you’re as excited as I am to play a part in the evolution of Middle East business.

Alicia Buller is Editor of Arabian Gulf Business Insight (AGBI)