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A positive outlook for Middle East trade and investment in 2023

Over the next year the Middle East will continue to be a beneficiary of inward investment from companies looking for stability in energy costs and availability

Knight Frank's survey found that Neom was the No 1 target for wealthy property investors Neom
Knight Frank's survey found that Neom was the No 1 target for wealthy property investors

High energy prices and uncertainty of supply remain a constant topic of conversation around the world.

And with the outlook into 2023 looking uncertain and ‘more of the same’ at best, the Middle East will continue to be a beneficiary of inward investment from companies looking for stability in energy costs and availability. 

Of course, the region shouldn’t depend on its current favourable position as a uniformly positive driver, as the energy crisis besetting much of the rest of the world will have a significant impact on the global economy, which will in turn have repercussions across the Middle East in 2023.

Regardless of this, the juggernaut theme of ESG (Environmental, Social and Governance) will continue to roll at the core of both national and corporate practices, as countries throughout the region strive for decarbonisation.

With Cop28 taking centre stage in November 2023 in the UAE, there will be even more attention on regional sustainability themes. We already know that smart cities are high on governmental agendas, and those that can reduce their carbon footprint through innovative technologies and solutions will be leading the way. 

This movement will provide many opportunities for those companies who are in a position to support the changes through their products and services.

We already see sustainability as a key business driver here, and the commitment to carbon neutrality will continue to accelerate through the year ahead, and we expect to see international companies taking advantage of this.

Another key trend that has emerged in 2022 in the UAE is the move to privatise public companies through partial flotations on both the ADX in Abu Dhabi and DFM in Dubai.

IPO activity looks set to endure in the year ahead and will continue to be a major source of revenue for local governments, a major source of liquidity for the local bourses, and a major magnet for overseas investors looking to own a slice of previously inaccessible ‘crown jewel’ assets.  

These developments are indicative of very significant and widespread government reforms throughout the Middle East that continue to fundamentally change the way the region works – quite literally, when you consider it was only 12 months ago that the UAE moved to the Saturday-Sunday weekend.

Of greater import have been the changes to residency visa options, and continued social changes that provide more options for international investors to consider.

Now, while it would be foolish to try to predict what else is to come in 2023 and beyond, we can be fairly certain that there will be more changes to come in terms of social, economic and commercial frameworks to appeal to foreign workers, companies and investors.

The Middle East will continue to compete within itself for investment dollars, trade flows and corporate attention, and while we wait to see what the next eye-catching initiative will be, the region will start 2023 with every possible tailwind that should continue to blow for some time yet.

Joe Hepworth is CEO of trade support company British Centres for Business

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