Developing Strategic Plans for the New Reality — In the Middle East and Beyond
Tumbling energy prices have shocked energy markets, and investment professionals are left wondering whether it is due to a change that is cyclical or structural. Meanwhile, oil producers must adjust budgets and expenditures, with knock on effects that could be significant for every aspect of a global economy so closely entwined with oil and petroleum products at every stage of manufacturing and distribution. From here on, the strategies employed by MENA countries that have historically subsidized energy consumption are likely to be of key interest to local businesses and global investors in equal measure.
The role of oil in the MENA region and the complexities of changing economic models are brought sharply into focus in Kuwait. The oil-rich gulf state recently calculated its upcoming budget on the basis of oil at $45 a barrel, down from $75 a barrel in the current fiscal year, cutting subsidies on diesel, kerosene and aviation fuel. At the same time, it announced plans to fund more than 500 key projects as part of a five-year development plan. As investors gather in Kuwait for the CFA Institute Middle East Investment Conference on 10 February, they will scrutinize the impact and opportunities of these shifting priorities in Kuwait and across the region.
Kuwait has been preparing to invest in the new reality by launching efforts to diversify its economy, including efforts to nurture small and medium enterprises (SMEs) within its borders. The Kuwait National Fund for SMEs Development was established in 2013, and last year His Excellency Anas Al-Saleh, Minister of Finance announced a new initiative that would allow young Kuwaitis working in the public sector to receive start-up financing from the fund to establish new businesses while retaining their government employment.
At the Middle East Investment Conference, a panel of experts will discuss the viability of SME investments as additions to a serious investor’s portfolio. Abdulaziz B. Al Loughani of the Kuwait National Fund for SMEs Development will be joined by Dany Farha, co-founder and CEO of BECO Capital, and Paul Kenny, founder and CEO of Safarna, to discuss how current conditions in the Middle East could lead to a venture capital boom for the region.
To successfully invest in new realities, it is also necessary to understand how global developments could affect investment strategies, and speakers at the Middle East Investment Conference will share their global perspectives with the audience. Philippa Malmgren, founder of DRPM Group and former deputy head of global strategy for UBS, will discuss how geopolitics in the Middle East are affected by the United States, Russia, China, and the new Cold War. Amlan Roy, managing director and head of global demographics and pensions research at Credit Suisse, will examine the demographic dividend awaiting the Middle East. And Nouriel Roubini, chairman and co-founder of Roubini Global Economics, will deliver a keynote address discussing opportunities and challenges for MENA in light of the global economic outlook.