Dubai; Drop in oil prices and the impact on the global economy dominated the discussions at the Seatrade Middle East Maritime Conference that kicked off in Dubai on Tuesday. A number of shipping experts are taking part in the three day event.
Jamal Majid Bin Thaniah, vice chairman of DP World, said that oil prices will have a positive impact on countries which import oil, like India and China.
“India, for example, is one of the world’s most energy import dependent nations relying on overseas producers for its domestic oil needs. The drop in oil prices is, therefore, likely to have a positive stimulating effect on that economy as it will for China,” Bin Thaniah said, while delivering a keynote address, adding that fall in oil prices will also benefit the industry with a direct impact on bunker fuel prices. “This will ease some of the supply demand pressures that are currently affecting the shipping lines.”
Gulf states have accumulated vast fiscal reserves during the oil boom years that will enable them to maintain growth even if oil prices stay weak for some time, Bin Thaniah pointed out. “Huge investments in infrastructure are underway across the Middle East totalling a massive $286 billion targeting the transport construction, oil, gas, port, chemical and industrial sectors. Saudi Arabia leads the way with more than $105 billion currently being invested,” he said.
The UAE is the second in the Gulf Cooperation Council (GCC) region after Saudi Arabia, with over $28 billion currently invested, and counts third in the wider Middle East region with Iran placed second behind Saudi Arabia, according to Bin Thaniah.
“This investment will have a powerful impact on the economies of the region supporting and stimulating trade. Trade prospects are therefore looking very positive for this region and for the UAE in particular both in short term and long term. The UAE has a conscious strategy of diversifying beyond the oil sector and sustained public sector funding will help nurture our competitive growth,” according to Bin Thaniah.
He went on to say that Expo 2020 already has an immediate effect. “The Egyptian Investment Bank expects 2020 effect to be evident as early as this year for GDP to jump by 5.4 per cent instead of the previously forecast 4.5 per cent. The latest HSBC global report also mentioned a six fold return for economy for every US dollar spent by Dubai on expo project,” he said, adding that the Jebel Ali port is being expanded to handle some of the new generation large vessels.
The three-day exhibition and conference will run from October 28 to 30 as a part of Dubai Maritime Week at Dubai International Convention and Exhibition Centre. More than 7,000 participants from 67 countries are attending the event.
Suez Canal to be expanded:
Admiral Mohab Mameesh, chairman of Suez Canal Authority said that the canal is being expanded for the new generation of ships. “It will push the Egyptian economy forward. It will be ready by August next year,” he added.
Egypt is building a new Suez Canal alongside the existing 145-year-old historic waterway in a multibillion dollar project to expand trade along the fastest shipping route between Europe and Asia. It is also deepening and widening the present channel.
Experts said that the expansion of the Suez Canal project will benefit the shipping industry. “Suez Canal is extremely important. The biggest trade is between Asia and Europe,” said Jorn Hinge, president and CEO of United Arab Shipping Company.
Abdulkareem Al Masabi, vice president, operations of Abu Dhabi Ports Terminal, said ports are growing in the region.
“At Khalifa Port, we have grown by more than 20 per cent in the last two years. DP World is expanding heavily. There are big prospects for this region. It looks promising.”
Al Masabi said shipping industry is under enormous pressure. “Alliances are forming these days. They are building huge ships. These alliances are becoming stronger and stronger. These bigger vessels put bigger pressure on the economics of ports. If we want to be in competition, we have to build bigger ports, bigger cranes and more advanced technology.”
