For those who are new to the Middle East and the Arabian Gulf region, when first conducting business or research the term “GCC” will for sure come up. Founded in 1981, the Gulf Cooperation Council (or commonly known by its acronym the ‘GCC’) is a political and economic alliance. It was founded and its members today consists of six countries: The United Arab Emirates (UAE), Kingdom of Bahrain, Kingdom of Saudi Arabia, Sultanate of Oman, the State of Qatar and the State of Kuwait. According to the Secretariat General GCC’s website, “Deep religious and cultural ties link the six states, and strong kin relations prevail among their citizens.”
There has been a strong push for economic diversification spearheaded by various national strategies. They include key aims and objectives such as prepare their respective nations to be less reliant on oil, to be more diversified in sectors, attract investment, and to empower innovation and entrepreneurship. We take a look at each of the six GCC nations below:
KINGDOM OF SAUDI ARABIA
Fintech plays a huge part in this as it is a global emerging sector that has much potential in the region. Many of the national strategies, such as Saudi Vision 2030, have fintech as part of that. Within Saudi Vision 2030, on April 24, 2017, the Council of Economic and Development Affairs (CEDA) initially launched ten delivery programs to realize Vision 2030; one of those is the Financial Sector Development Program (FSDP). A tangible result has been, for example, the creation of Fintech Saudi, was launched by the Saudi Arabian Monetary Authority (SAMA) in April 2018 under the FSDP, acting as a catalyst for the development of the financial service technology / fintech industry. Also, for those that have been to Riyadh, Saudi’s largest city and capital, the development of the King Abdullah Financial District (KAFD) is very impressive.
KINGDOM OF BAHRAIN
Another example is Bahrain Economic Vision 2030, where, as mentioned, the Kingdom is looking to create a future economy less reliant on oil and one that fosters innovation and prepares its residents for a prosperous future. The financial services industry as a whole will play a part of that. An excerpt from the Vision 2030, “Bahrain will strengthen the non-oil GDP growth of recent years. This growth will come from diversified economic activity. Our financial sector will remain our economic engine but will be increasingly complemented by growth in other high-potential sectors.” An evident example of its implementation that promotes the nation’s financial services, and particularly fintech cluster, has been with Fintech Bay in Manama, the capital and largest city in Bahrain. When it was launched in 2018 it was the largest fintech hub in the Middle East and Africa and gives the Kingdom a unique fintech ecosystem.
STATE OF QATAR
In Qatar, which similar yet unique to the other GCC, relies mainly on its large natural gas reserves historically (while the others were mostly oil), also has an economic development diversification strategy called Qatar National Vision 2030. From its strategy, “A diversified economy that gradually reduces its dependence on hydrocarbon industries, enhances the role of the private sector and maintains its competitiveness through..,” the State of Qatar also is looking to diversify its economy. A consequent result so far, for instance, has been Qatar Fintech Hub (QFTH), which according to its website, “QFTH brings together talented entrepreneurs, investors and enablers to develop disruptive technologies so that great visions become reality.” QFTH’s programmes were developed by Qatar Development Bank in collaboration with EY to support the growth of local and international FinTechs.
STATE OF KUWAIT
The State of Kuwait has its Kuwait Vision 2035 or, as it says on its website, the “New Kuwait.” According to the Ministry of Foreign Affairs Website for the State of Kuwait, “Kuwait’s 2035 vision aims on transforming Kuwait into a financial and trade hub regionally and internationally, and becoming more attractive to investors. Where the private sector leads the economy, creating competition and promoting production efficiency.” Although its fintech sector might not be as large as its other fellow GCC partners, there is still innovation happening. For instance, Kuwait International Bank (KIB) at the start of 2018 started adopting innovative technologies to create a better banking experience – a key component of its transformation was a comprehensive digital strategy on both online and mobile platforms.
SULTANATE OF OMAN
The Sultanate of Oman, which earlier this year had his Majesty Sultan Haitham bin Tariq sworn in as the new ruler, also has its own economic development and diversification strategy called Oman Vision 2040. Similar to the others, the emphasis on diversification of the economy is clear, as for instance it says, “A Diversified and Sustainable Economy that Is Based on Technology, Knowledge and Innovation, Operates within Integrated Frameworks, Ensures Competitiveness, Embraces Industrial Revolutions and Achieves Fiscal Sustainability.” Although Oman might get overshadowed by the rest of its partner GCC countries with regards to small and medium enterprise (SME) innovations, with Vision 2040 the Sultanate is clearly looking to change that. For instance, according to its website, the Oman Technology Fund (OTF) “aims to put Oman firmly on the map of knowledge leaders in the Middle East. The OTF will effectively work on attracting these types of promising projects to launch their operations in Oman to enhance knowledge-based economy, and to develop the ICT sector in general.”
UNITED ARAB EMIRATES
Last, but not least, the United Arab Emirates, home to Dubai and Abu Dhabi, has its own economic diversification. The former grew on that philosophy, being a global powerhouse and hub it is today, and, it is often regarded as the financial services and fintech hub (amongst its other accolades likes a leader in transportation, tourism and multinational corporate headquarters (MNCs)) not just within the GCC but for the entire Middle East. Its economic strategies include UAE Vision 2021 and UAE Centennial. Both strategies emphasise digitalisation and transformation. The former focuses on transitioning the UAE into one that is based on knowledge and help promote innovation, investing in research and development (R&D) and embracing ground-breaking technologies. Very clear examples of its implementation has been the growth and importance Dubai International Financial Centre (DIFC) plays in the global market. Although much newer, Abu Dhabi Global Market (ADGM) is also becoming a regional powerhouse.
Through very similar economic development transformations, all six GCC also share a common aspiration that will take their economies to an innovative tomorrow. The on-going pandemic of Co-VID 19 shows the importance of a healthy economy and one that is adaptable to sudden disruptions; fintech and innovation in general can play a role in that not just in the GCC but globally.
The following is an original opinion-ed and guide written mainly by Richie Santosdiaz with support from editorial director Mark Walker. It aims to be an informative series on the Middle East & Africa for our global Fintech Times audience.