Dubai: Global uncertainty seems set to continue for the time being. That’s the takeaway from a panel discussion at Thomson Reuters’ 150th Middle East anniversary conference at Dubai International Finance Centre on Tuesday.
Tim Fox, Chief Economist at Emirates NBD, and Dima Jardaneh, Head of Economic Research (Mena) at Standard Chartered, said it was too early to say what effects the Trump administration and Brexit might have on the economic landscape.
Brexit could indicate a rise in populism and protectionism — and, depending on the results of the French presidential in the next few weeks and the Italian election next year — could ultimately lead to the break-up of Europe.
But it might also lead to a greater trading role for the UK, particularly with Gulf Cooperation Council (GCC) economies, which Fox said demonstrated a preference for bilateral trade agreements between individual countries rather than between economic blocs.
And it was too early to say whether US President Donald Trump’s bombing of Syria was a one-off or represented a policy change towards the Middle East, Jardaneh said.
Panel moderator Andy Critchlow, Associate Editor of Reuters Breaking Views, suggested President Trump’s relationships in the Middle East could see closer ties developing between the US and the GCC, after a period of coolness under former President Obama.
“I think in the GCC there’s probably a little bit more comfort with a president who has a business background,” Fox said. “This is a region in which business and politics intertwine.”
While both economists agreed the growing role of Asia in the global economy would lead to increasing trade with China and India, neither saw GCC states dropping their currencies’ dollar pegs in the near future, though Jardaneh noted the business cycles in the US and the Middle East had started to move apart, and mirroring US monetary policy to maintain the peg levels did not make much economic sense.
