Nowadays, foreign media backed by regional powers are trying to portray the economic and trade conditions in some GCC countries — particularly those of the UAE, Saudi Arabia and Bahrain — as being catastrophic and on the verge of a total collapse. They point to the decline in real estate values and the closure of some stores, especially in malls, to distort facts and mislead the public.
It is true there are some shops shutting down, but still it is a global phenomenon resulting from constant churn that has affected the entire retail universe due to surge in online shopping. This is in addition to the slowing global volumes that has risen from the trade war between the US and China and the wider decline in global growth.
Let us take, for example, the retail situation in the UK. More than 2.780 stores closed in the first-half of this year alone, an average of 16 stores per day. In all, a net 1,234 stores shuttered on its high-streets and the highest since 2010, according to Local Data Company.
The UK situation is similar to that of most countries. Obviously, this dramatic change was caused by rapid growth in e-commerce, where sales hit $25.3 trillion last year, according to the United Nations Conference on Trade and Development (UNCTAD). This growth, which also includes transactions conducted online between companies, can be ascribed to the increase in online shoppers from 600 million in 2010 to 1.2 billion in 2016.
In addition, new patterns of e-commerce are emerging, such as the platform economy, a cooperative economy, etc. These fundamental changes besides the steady growth in e-shopping should continue, resulting in serious implications for trade and physical retail.
As in Britain, some shops in the Gulf too closed even as new stores opened. This can be noticed in malls although there are difference between the numbers of stores being opened or shut down. This is normal because of the changes we referred to, which have affected all sectors.
Thus, it is absurd on the part of the media to distort a global phenomenon in economic changes. The truth will eventually come out. No doubt there are some regional countries leading the smear campaign against the three Gulf countries, and they too suffer the same changes and, perhaps, are more at risk of a general slow down and high inflation rates.
What neutral observers say
Such campaigns cannot obscure the actual facts and neutral reports issued by organisations, including the United Nations. In its recent reports on Middle East economies, the International Monetary Fund lauded the reforms in Saudi Arabia and referred to the strong UAE economy, which is achieving good growth rates.
This is despite the volatile conditions in the global economy and instability in this region, which will reflect in the ability of Gulf states to deal with the many hurdles before them.
Recognising these, those in power must deal properly with these changes, and issue legislation commensurate with these changes. This is what is happening in vital sectors such as trade, real estate and industry.
In Dubai, a committee was formed to rebalance the real estate sector, while Saudi Arabia has exempted the industrial sector from some fees to increase competitiveness and encourage investments. This indicates these Gulf states are moving forward on a clear strategy to achieve their development vision, while ignoring the distortion campaigns that have cost the false mongers huge dearly.
Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.