With 2017 fast approaching the halfway point, we asked a panel of our business comment contributors what the most important business issues are that they expect to develop in their sector over the remainder of this calendar year. Their answers are below.
Omar Al Ubaydli
A key issue for this year and the following 10 years will be what strategy policymakers adopt to address the potential economic and social costs associated with increased labour-replacing technology, such as robotics and automation.
On the one hand, policymakers might take a libertarian stance, trusting in the ability of entrepreneurs to create new jobs for idle human labour, born out of a desire to deliver new products and services to insatiable consumers. After all, humans have experienced many labour-saving revolutions – most famously the British Industrial Revolution, which gave rise to the Luddites – and all have resulted in unprecedented prosperity.
On the other hand, policymakers may feel that this time is different and that even if new jobs are created, they will do nothing to suppress widening inequality, with the economic gains accruing exclusively to a narrow elite. In that case, proposals such as a universal basic income, or higher income and wealth taxes for the rich, may gain traction.
Either way, the ideal path will surely involve flexible policies that are evaluated on merit, without allowing the debate to be swayed by the alarmist and emotional pleas of polemicists.
Omar Al Ubaydli is programme director for international and geopolitical studies at the Bahrain Center for Strategic, International and Energy Studies, and an affiliated associate professor of economics at George Mason University.
Peter Nowak
It seems like it was only yesterday when artificially intelligent voice assistants were a curiosity that sometimes worked properly, but mostly didn’t. Now, with Amazon, Google, Apple, Microsoft and Samsung all duelling it out for AI supremacy, they’re the hottest tech trend going.
The assistants – Alexa, Google Assistant, Siri, Cortana and Bixby, respectively – have so far been based mainly on phones and speakers, but improved quality and accuracy mean they are proliferating. They’re starting to show up in refrigerators, vacuum cleaners and cars, indicating that the near future will be largely voice-controlled.
Or will it?
The big tech companies are walking a fine line with the public trust, since their assistants require users to accept microphones around them that are always on. Any violations or abuses of that trust could easily kill the trend dead.
This year, Amazon has already had to resist turning over Alexa user data to law enforcement, while Google nearly incurred major public backlash by incorporating audio ads into its Home speakers.
Can the companies mitigate such issues long enough for the mass market to accept voice assistants? It’s the most intriguing technology trend to watch the rest of this year.
Peter Nowak is a veteran technology writer.
Manar Al Hinai
We live in rapidly changing times for businesses worldwide. In a few years, businesses have had to adapt to entirely new marketing channels: digital, social and native advertisement, and had to decide on how to use the different social media channels and compete with new forms of companies that do not necessary reflect the traditional models, companies such as Airbnb and Uber. One of the side effects of such a rapid change is that chief executives and senior management of companies cannot be experts in everything; and although this idea is not new, it is now more evident, especially when businesses want to compete and adapt to new ways of doing things. That is why in my opinion one of the biggest challenges that businesses are facing today is recruiting the best consultants to help them deliver their targets and face the challenges that may arise. “Social media consultant” is a title that was unknown until a couple of years ago and now many retailers and businesses are working with them to help deliver their message and reach their target audience. Working with consultants who have strength in a particular area can help chief executives to tackle a problem more effectively.
Manar Al Hinai manages a branding and marketing consultancy in Abu Dhabi.
Robin Mills
Volatility of commodity markets was the top issue of concern to Middle East and North Africa business executives surveyed by EY in May. This is logical: despite diversification, oil revenues still drive the regional economy. The extension of the Opec production cuts deal, reached last Thursday, should dampen that volatility, al though it has not excited markets.
Saudi Arabia, the region’s largest economy, still has a non-oil sector driven almost entirely by government spending – which, of course, comes from petroleum revenues. Last year’s spending cuts and delayed payments to contractors caused a short recession. Even Dubai’s diversified economy still leans heavily on shoppers, tourists and real estate buyers from the Gulf and other oil-exporting states.
Oil prices may rise gradually and bumpily during this year as the Opec cuts drain excess stocks, but will struggle to rise above US$$60 per barrel. At least, around $50 per barrel, they are well above the $26 nadir reached in February last year, while in real terms, they are back to the levels of 2004. Businesses and consumers can expect further cuts to subsidies and government budgets, and increases in taxes. At the same time, the private sector has to take over as the motor of growth.
Robin Mills is CEO of Qamar Energy, and author of The Myth of the Oil Crisis.
Mario Volpi
For the real estate sector, I believe affordability is the most important business issue to watch out for.
Over recent years we have seen a shift to projects that are classed as affordable. These have proved very popular among investors and end users alike.
While this affordability is the key to a successful property market, it has taken a hit locally due to the continuing strengthening of the US dollar. Approximately half of all property investments are made by individuals who usually deal in currencies outside of the dollar or those that are pegged. This dollar strength has had a negative effect on the fluidity or movement of the market, making the property asset classes here less affordable. It is true to say that recent off-plan launches have performed well, but this is mainly down to attractive payment plans during construction and in some cases with post-handover payments.
The key to successful selling is getting the price right, this is why the secondary or ready market is struggling at the moment. Sellers tend to overvalue their properties and so the period from market to actual sale is getting longer with adjustments on the price along the way.
There are still some bumps in the road to watch out for such as the impending VAT burden. Notwithstanding this, Dubai’s future property market does look in good shape as we wait for the big tax event which is now on the horizon.
Mario Volpi is the chief sales officer for Kensington Exclusive Properties and has worked in the property industry for more than 30 years in London and Dubai.
Michael Karam
In September, Lebanon’s credibility will be at stake with how it handles the first round of licensing for the exploration and drilling rights for the estimated 1.9 billion barrels of oil and 122 trillion cubic feet of natural gas believed to be under Lebanese waters. Lebanon is already way behind its neighbours Israel and Cyprus due to political infighting and process fudging, which has put off many reputable companies.
The challenge is to ensure that the process is not only transparent but that it can be the first building block for an eventual economic policy that can pay off Lebanon’s eye-watering national debt and create jobs and prosperity. The fear is that the oil and gas file will be yet another excuse to put greed as well as religious, partisan and international interests before national ones or that it becomes yet another stick, this time in the shape of a maritime territorial dispute, with which Hizbollah can hit Israel. Watch out for the Iranian bid from Petropars. If it wins, it will further cement Iranian influence in Lebanon.
Michael Karam is a freelance writer who lives between Beirut and Brighton.
Ivan Fallon
There are more visible threats to the world economy, but the health of the South African economy should be on any danger list. It is the largest on the continent of Africa and holds the biggest reserves of platinum, chrome, manganese and titanium in the world. By rights, it should be growing in double digits but in fact is barely growing at all. Unemployment, officially 25 per cent, is more like 40 per cent, and corruption, starting from the top, is out of control. President Jacob Zuma’s popularity rating has dropped to 20 per cent, the lowest of any democratically elected leader, yet he has just survived another vote of no confidence in his own party.
The immediate threat is what Mr Zuma calls his “radical economic transformation” policy which, among other measures, will require mining companies to have 30 per cent black ownership. Most of them of them took in 25 per cent partners years ago, only to have them sell out at a profit. Now they must do it all again, basically giving away the shares for nothing. Foreign investment has dried up in the mining industry. which accounts for half the country’s exports.
Like his friend Robert Mugabe, Mr Zuma doesn’t care as long as he can stay in power until his term ends in 2019 and he can avoid the 600-odd criminal charges which still stand against him. In the meantime an awful lot of damage to what should have been the continent’s powerhouse will be done – with drastic consequences for the rest of Africa.
Ivan Fallon, a former business editor of The Sunday Times, resides in Cape Town.
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