Covid-19 changed markets, lifestyles and organisations around the world. From the disruption of previously reliable supply chains to a drastic increase in the demand for online services, countries have been compelled to acclimatise to a 'new normal'.
The world is now attempting to move past the pandemic. Several countries have rolled out vaccines. And as we try to move beyond the fallout of 2020, we must use the lessons from the last year to tap into the expertise that can revitalise the region's economies. We must also consider emerging trends in industries and evolving consumer habits.
The GCC nations have a strategic geographical advantage. Over the next 10 years, these nations must strengthen their role in the global business landscape as a gateway between the East and West. The region is home to port cities including Dubai, Jeddah, Salalah and Sharjah that rank 9th, 31st, 32nd, and 39th respectively among the busiest container ports in the world, according to the World Shipping Council.
A lot of work was done to develop the GCC's infrastructure over the last decade. As a result, significant progress was made and there are robust new projects in the pipeline. The Gulf Railway project is one such that comes to mind. Upon completion in 2025, it will connect all six countries of the GCC. The first phase is expected to begin in 2023. Once it launches, this network will facilitate crucial intra-trade opportunities among the countries and crucially, it will enable people to lessen their reliance on air travel.
The pandemic has shown the growing global appetite for online retail services. Given the strong telecoms and digital infrastructure in the GCC, we need to explore the scope of further growing e-commerce, while continuing to support global online retailers.
We need to continue to make headway so that the region can deliver value to global allies. This must be a priority as we repair our economies. Aligning logistics and transportation with the best global practices and monitoring industry trends will reinforce the standing of the region in the international business arena.
Organisations within the logistics sector, for example, can take to artificial intelligence to optimise their systems. This would reflect their commitment to embracing change. These systems can provide automated warehousing, inventory management and more efficient methods of shipping.
And given the surge in online retail, blockchain – that disseminates digital data in a secure manner – can offer value and meet demands of consumers for the rapid delivery of packages. More companies are opting for blockchain over other costly but less efficient and less secure means of communication.
Refrigerated products is the other sector in which demand spiked last year. The accessibility of food, beverages and pharmaceuticals will keep growing post the pandemic. Customers have become used to doorstep delivery or kerbside pick-ups of their packages. Hence, there is a real market opportunity here to develop facilities to store and safely transport refrigerated goods.
There is also scope to build efficient omnichannel service networks. Given the dramatic changes in consumer habits, the GCC can build online solutions that offer alternatives to traditional retail: buy online, collect in-store.
Across the globe, there is a growing focus on green logistics. This refers to supply chain management measures and policies to reduce the damage to the environment caused by freight distribution. The GCC countries have made impressive progress in meeting sustainability goals and continue to improve their energy footprint, including in last-mile logistics. In many sectors, the last few decades have been crucial for growth of GCC economies. And owing to wise leadership strategies, as well as the continued efforts of the private sector and their citizens, the region has developed well beyond expectations.
Despite that progress, the fallout from the pandemic cannot be underestimated. However, even detractors acknowledge how well the GCC region has managed and mitigated the worst effects of the crisis.
Now that vaccines are being administered and we are moving towards a post-pandemic era, we must focus on recovery, make use of our strengths and channel resources to safeguard the region’s economies against likely future crises.
Mohammed Mahfoudh Alardhi is the Executive Chairman of Investcorp and Chairman of Sohar International