Investor confidence in the region remains strong despite the fall-out from the Iran war, with efforts to diversify economies helping to shield them from the crisis, a senior World Economic Forum official has said.
Kelsey Goodman, head of Middle East and North Africa at the World Economic Forum (WEF), told The National that the region’s economic fundamentals remained solid despite geopolitical uncertainty.
Her comments come as the International Monetary Fund sharply downgraded its 2026 growth forecasts for Gulf economies amid the effects of the war and the closure of the Strait of Hormuz.
“There’s still widespread investor confidence in the region,” Ms Goodman said. “The fundamentals are solid even if the surrounding area is uncertain, but it calls for the need for dialogue and co-operation and hopefully a return to peace and resiliency in the region.”
Speaking at the Annual Meeting of Global Future Leaders in Dubai, which concluded on Thursday, Ms Goodman said efforts to diversify Gulf economies had helped them withstand recent shocks and would be crucial to their recovery.
“Diversification really is key, and the companies and the economies that have been able to have already built in diversity into their plan are the ones that have been most resilient," she said.
"Resiliency is something that you have to prepare for. It's not something that you can build only in times of crisis.”
Foresight simulations were carried out at the meeting on Thursday, in which participants rehearsed responses to unfolding geopolitical and technological crises.
“This meeting has really emphasised that dialogue and co-operation are not luxuries for easy times. They're essential precisely when the world is at its most complicated,” said Ms Goodman.
Even with this in mind, she said the mood at the meeting was positive.
“I think it speaks to the resiliency of Dubai, and we hope that the participants are leaving with a message of hope and renewed belief in the power of moving from foresight into action,” she said.
Economic diversification into AI
In recent years, the UAE has prioritised artificial intelligence investments, with trillions of dollars earmarked for the technology, including building data centres.
A newly published WEF report showed the potential of artificial intelligence in unlocking upwards of $1 trillion by 2030 in the region.
Ms Goodman believes the investments countries are making in the AI sphere could return, but that regional uncertainty creates more barriers to reaching these goals.
“For the economies to realise this value, it's going to take a lot of co-operation across all sectors of society,” she said. “That's going to include long-term planning from governments, but also having the regulation, the energy infrastructure, and the business applications for these new technologies.”
Impacted labour markets
While blocked trade routes have affected shipping and petrol prices have risen, Ms Goodman said the war's impact on the travel and tourism sector could also affect labour markets, especially given the high numbers of migrant workers in the country. The UAE workforce is made up of approximately 8.7 million migrant workers.
“The Gulf really relies on a very mobile labour market with a lot of connections outside the region,” she said. “These are areas where there could potentially be shortages.”
