When the analysts breezed into town

Everyone's having their say at the moment. International rating agency Standard and Poor's were the latest to hold forth on the regional outlook in a seminar this week.

They chose candidly to defer to the bald facts: the dominance of oil cannot be avoided in an assessment of the Gulf countries. The economic and financial numbers resulting from currently high oil prices are "extremely robust", and the external side "fantastic", declared sovereign analyst Farouk Soussa. For the medium term, the issue becomes whether improvements in the revenue stream are cyclical or structural.

So have things really changed in the past twenty or thirty years? We're told they have. For one thing, management of oil wealth has improved, whether it is through the offshore investment authorities (such as ADIA and KIA), or debt reduction, or asset diversification.

In addition, infrastructure needs which used to be pressing have now largely been fulfilled, for instance in port facilities.

Moreover, regional dynamics now mean that more money is staying in the region. On the flip side, unemployment has become an issue as never before, so much so as to have helped prompt private-sector development of the economy.

S&P's regional ratings still carry constraints associated with political risk. People make assumptions about that, but in fact it goes beyond the geo-political tensions of which most are aware, extending into the domestic sphere of reform, and whether it convinces in terms of continuity.

Transparency is already a theme on the economic front. The availability of accurate and comparable data is an inevitable issue for those whose raison d'etre is analysis. On this point Soussa gave an upbeat view, suggesting that a greater imperative for disclosure has arisen as the region becomes more integrated, and that scrutiny from outside organisations is increasing.

So why, among all the GCC states, is UAE the only one without an S&P rating? Given that it was a regional seminar organised in Dubai, it's an apt question. Moreover, local companies would want that benchmark.

S&P confirmed it was a matter for the national authorities, but if the invitation were made, the UAE would be 'well-placed' (a studiously ambiguous term) in the investment-grade category, "certainly among the higher [examples] in the region".

Rating agencies have a habit of confirming what others are already thinking. It's the nature of the business. They check the facts, apply a rubber-stamp, and report back.

Sometimes they simply have to state the obvious. Sounds like a bureaucracy. Yet their function, method and output make them a critical reference, perhaps under-appreciated. What would we do without them?