Over the past few months, the world’s attention has been focused on the tensions in the Middle East and North Africa. No doubt, these events can often be distressing, sometimes have a high personal cost, and in many cases can have an influence on the international landscape. However, in this post, I’d like to turn your attention to one of the few areas in the region that, so far, has not seen major crises—Abu Dhabi.
Abu Dhabi is the capital of the United Arab Emirates (UAE), the federation of seven emirates including Dubai. The UAE’s combined economy is large compared to its relatively small size—it has a population of around five million, of which 1.6 million live in Abu Dhabi. Per capita gross domestic product (GDP) in the UAE is more than US$40,000, and that number is significantly higher for Abu Dhabi, mostly because of the incredible earnings from oil and gas. Each day, Abu Dhabi produces more than 2 million barrels of oil, and its oil reserves are now estimated at nearly 98 billion barrels, the sixth largest in the world.1
I recently visited Muscat, the capital of Oman. Oman has a very strategic position in the Middle East, controlling the tip of the Musandam peninsula even though the peninsula is separated from the rest of Omanby land belonging to the United Arab Emirates (UAE). That tip points right into the Straits of Hormuz, which is the choke point for oil leaving Saudi Arabia, Qatar, Iran, Kuwait, Iraq and the UAE from the Persian Gulf to the Arabian Sea, leading to theIndian Ocean. On a clear day, you can see Iran from the tip of the peninsula. Oman’s military, therefore, has a big responsibility to protect that waterway.
Like its neighbors, Saudi Arabia and the UAE, Oman has a reasonable amount of oil, though of course, not as much as Saudi Arabia. With advanced recovery techniques, Omanhas been able to increase production to about 800,000 barrels per day, compared to Saudi Arabia’s current production of about 9 million barrels per day. So the Sultan of Oman has wisely been promoting other industries such as manufacturing and tourism in this country of three million people (of which one million are expats from places like India, the Philippines, Bangladesh and Pakistan). For example, Sohar, a city north of Muscat, is being developed as a manufacturing zone and a port. We traveled there to see how it was growing and to view a plant that was utilizing gas from the country’s natural resources.
Asia presents a wealth of investment opportunities. Economic giants like China and India, with their increasing demand for commodities and natural resources, play a pivotal role for growth in the region, including emerging markets in Southeast Asia.
I think the outlook for Southeast Asia remains very positive. Countries like Thailand and Indonesia have seen very rapid growth in the last decade, and frontier markets like Vietnam and Laos, with their strong growth potential, are also very interesting to us.
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