US Arabs look for MENA growth
Emerging markets in the MENA region, such as Lebanon, Jordan and Libya, are providing opportunities for US companies to make up for dwindling business at home, says the National US-Arab Chamber of Commerce. The group has just completed a trade mission to Tunisia, Algeria and Libya and will be embarking on a similar trip to the Levant on October 9, said Amin Salam, the chamber's manager of business development.
The US push into the region is in part an attempt to offset losses in business stemming from domestic government cuts, he said. "The government now is cutting spending for many big US companies, due to the economy, especially when we talk about defence and technology," Mr Salam said. "The government has always been one of the big US clients, so now we're getting a lot of demand from US companies to sell overseas."
And with the US President Barack Obama's aim to double US exports in the next five years, American companies are seeking out new trade partners. The group is looking to "fresh fields" such as Lebanon and Jordan, aiming to tap their budding technology industries and educated populations, Mr Salam said. "They have a lot of entrepreneurs dealing with software and production, everything to do with telecommunications, and the demand is very high."
These countries are thirsty for American goods and services in technology, health and consumer electronics, he said. US companies are exploring opportunities in Syria as well, mostly in the longer term. US sanctions on Syria limit the possibilities now, but companies want to explore the Levant country and lay the groundwork for when sanctions are lifted. "When this happens, there are high expectations," said Mr Salam.
Last year, exports of US goods and services to the MENA region totalled US$63 billion (Dh231.4bn), down 9 per cent from 2008. However, they are expected to surge by as much as 20 per cent this year to a record$75bn. The UAE is the top buyer of US goods and services in the MENA region, with an estimated $22bn in imports this year, followed by Saudi Arabia, Egypt, Iraq and Qatar. But demand from the Levant and north African countries is growing rapidly.
The chamber has predicted exports of US goods and services to Jordan and Lebanon will increase 17 per cent and 22 per cent, to $1.9bn and $2.93bn, respectively. In Lebanon, a burst in economic activity - it maintained a 5.1 per cent GDP growth last year - stems from the extended period of peace over the past couple of years. Growth in Jordan is being fuelled by an increase in the number of tourists, the chamber said.
US exports to Tunisia and Algeria are projected to rise by 20 per cent and 19 per cent, respectively, this year, to about $600m and $1.32bn. Tunisia this year plans to privatise companies in agriculture, services, transport and industry, opening up the door to foreign investors. Algeria is on a spending spree to develop infrastructure, such as the country's first shopping mall, and investing in telecoms infrastructure and broadband networks, some of it funded by foreign direct investment.
Demand from Libya is expected to increase by 51 per cent this year, to $1bn. The north African nation is forecasting about $150bn in infrastructure development, particularly in construction and education, the chamber said. email@example.com
Published: September 26, 2010 04:00 AM