Dr. Nasser Saidi’s comments appeared in an article titled “Mena’s trade recovery: Hanging in the balance amid numerous downside risks” as part of the Global Trade Review, published online on 4th Jun 2021. Click the article title to read the full article.
The comments are posted below.
A closer look at the figures reveals a two-speed Mena. Whether this trade outlook comes to pass, however, depends on numerous factors, says Nasser Saidi, former minister of the economy of Lebanon and CEO of economic consultancy and advisory firm Nasser Saidi & Associates.
“There are several major areas that are problematic,” he tells GTR. “The first is oil. The region is still highly dependent on oil and it is not just the oil producers. What happens to the oil price and global demand for oil is critical. The second is the pandemic, and the way in which the dynamics of Covid infections and vaccination rollouts are now linked to the economy and trade. The third is country risk in Mena’s export markets. Another risk is in the recovery of services trade, and this matters not only for the countries of the Mediterranean but increasingly for the GCC, because they have been looking at tourism, trade services, logistics and transport as a way of diversifying their economies. Given all of these risks, it is highly probable that the region may not see the recovery in trade that it is hoping for.”
Vaccine ties [with China] will likely result in the strengthening of long-term trading relationships, says Saidi. “Covid is going to be with us for a couple of years at least if not longer. What this means is that through the licensing deals, China is establishing long-term relationships and therefore integrating these countries into its supply chain. This is not a one-off. The Chinese, thinking long-term, want to reward participants in the Belt and Road Initiative. It is the health Silk Road.”
The ever-closer ties with China contrast with weakening trade figures with Mena’s other Asian trading partner – India – as the South Asian nation struggles to contain the Covid-19 outbreak.
“India is undergoing a serious crisis as a result of the pandemic, and this situation is not likely to end any time soon,” says Saidi. “It is a major trade partner for Mena, and the third biggest importer of oil in the world. It is also a major tourist market for the GCC, and a source of labour.”