Gulf’s US$520bn trade surplus largest in world

Discussion in 'West Asia & Africa' started by ejazr, Mar 25, 2012.

  1. ejazr

    ejazr Stars and Ambassadors Stars and Ambassadors

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    Gulf’s US$520bn trade surplus largest in world - Banking & Finance - ArabianBusiness.com


    The Gulf’s US$520bn trade surplus last year was the biggest in the world and almost twice that of nearest competitor China, according to new research.

    The region’s extensive hydrocarbon resources meant its exports generated a healthy trade surplus, with Saudi Arabia accounting for nearly half of the US$520bn cash mountain.

    The kingdom contributed a surplus of US$245bn, while the UAE added US$94bn and Qatar US$79bn, according to analysis from lender QNB Group.

    The current surplus is twice the size of the country with the next largest surplus, China, and is also about two-thirds the size of the US's trade deficit.

    However, QNB Group forecasts that the surplus is likely to fall to around US$493bn in 2012-13, as imports grow around 3.5 percent.

    The study found that the bulk of trade from the Gulf was with two countries: Japan and South Korea.

    Japan has been the main trade partner for decades, purchasing 16 percent of Gulf exports and supplying six percent of imports in 2010, according to IMF data. South Korea was next in the rankings and responsible for ten percent of exports and four percent of imports.

    Half the GCC trade surplus in 2010 was a result of trade with these two countries, the QNB Study said.

    GCC trade with India has also risen tremendously, up from two percent of total trade in 2011 to 11 percent in 2010.

    “India was both the fastest growing import source and export destination for the GCC in 2006-10, with annual growth of 27 percent and 55 percent respectively,” the study found.

    Similarly, Chinese trade has risen from four percent of total trade in 2001 to ten percent in 2010.

    Looking to the future, the study forecast that the most “likely changes in trade flows compared to 2010 is that Japan’s share of exports from the GCC will rise even further, as it imports more hydrocarbons as a result of the closure of nuclear power stations.”
     
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  3. Galaxy

    Galaxy Elite Member Elite Member

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    And they will use this money to spread terrorism by Wahhabi everywhere.
     
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  4. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

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    Hmm. I am surprised GCC trades more with India than China. I thought it was the other way around.
     
  5. sky

    sky Regular Member

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    Lets see how long there accumulated reserves last once the oil wells start to run dry,or the world find's a cleaner cheaper source of energy.

    Hell with russia ,canada,usa all looking for oil in the arctic as well as Brazil's large deposit's not to mention north America reserves coming on stream oil wont alway's stay high.

    After the suez crisis oil stayed low for a long time, i can see the power of the gulf states dwindling as soon as America decides it's time to open the tap.Even there close allies in saudi will feel the pain as America re discovers winning way's. There deficit will fall and china's rise will hit a concrete wall..
     
  6. asianobserve

    asianobserve Elite Member Elite Member

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    A lot of money, for now, but it's anyone's guess how fast it will be consumed if their oil wells dry up... imagine throwing in nuclear weapons into the equation (if ever that region is allowed to proliferate it), what would happen is there oil/gas and revenues dry up and they are armed with nukes...?
     
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  7. ejazr

    ejazr Stars and Ambassadors Stars and Ambassadors

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    Well pre-2000 you could say that GCC economies were afflicted with the "Dutch diesease" and showed signs of classic cases of countries with a resource curse. But in the last 10 years they have changed that around quote a bit.

    As of 2010, almost all GCC countries get the majority of their GDP from non-oil sector (except Qatar). Here is a diagram showing percentages of various sectors in the GCC countries.

    [​IMG]

    Source: GCC - Increasingly Diversified Economies - April 2010

    Each country has its advantage and wether these countries use their advantage rather than sqander it is what defines a sucesfull nation from a failed state. The fact that GCC economies were resilient during the GFC when oil prices tanked and were able to maintain real growth rates of 4-5% shows that they are doing atleast something right.


    Most of this revenue surplus is either being invested locally in contruction, education e.t.c. or being put away as Soverign Wealth Funds and invested in mainly Europe and the US. EU and US companies make use of this massive influx of cheap capital to innovate and sucesfully expand their bussiness. For example, Saudi Arabia has invested $40Billion dollar arms deal with the US which will definitely help the US arms industry in becoming not only profitable but also innovate in the long term.


    Indian officials and bussiness reps obviously look at this as an oppurtunity; just like the EU and the US. We have improved trade relations with the GCC with annual non-oil trade at around $70-80 Billion and total trade of about $140 Billion as of 2011-2012, However, we still haven't taken advantage of the Soverign Wealth Funds that EU and US (and increasingly Chiniese) economies enjoy the monopoly on.

    Moreover, this gives oppurtunites to Indian IT, construction and manufacturing companies to grab major contracts in the GCC when the tender massive infrastructure projects. Previoulsy, it use to be only US and EU companies that were making money here. Now that GCC officials are willing to look at India and China, why should we be left behind?
     
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  8. asianobserve

    asianobserve Elite Member Elite Member

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  9. KS

    KS Bye bye DFI Veteran Member

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    TCS owns software projects in most of the big gulf banks...and believe me we "milk" the sheiks...:)
     
  10. ejazr

    ejazr Stars and Ambassadors Stars and Ambassadors

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    The biggest export market for the GCC countries now are Japan China S. Korea and India. Half of the surplus as the article states comes from only Japan and South Korea. So unless US starts becoming a net exporter of energy - which is still 40-50 years down the track - it won't drastically alter the revenue profile of GCC countries. Unless ofcourse Asian countries sudenly find oil in their backyard.
     
  11. The Messiah

    The Messiah Bow Before Me! Elite Member

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    My relative is in a "very high position" in the gulf in tata consultancy service.
     
  12. KS

    KS Bye bye DFI Veteran Member

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    Say Hi to him from an ex-employee of TCS.
     
  13. The Messiah

    The Messiah Bow Before Me! Elite Member

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    and why are you an ex-employee ?
     
  14. sehwag1830

    sehwag1830 Tihar Jail Banned

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    TCS revenue from GCC is only about 1.5 billion $. It is about a week of India's import of Oil . Stop propagating lies.
     
  15. The Messiah

    The Messiah Bow Before Me! Elite Member

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    You have not understood the context. It is not about what is revenue but how much they are overcharging.
     
  16. sehwag1830

    sehwag1830 Tihar Jail Banned

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    Overcharging and yet revenue is 1.5 billion $ for a country of 1.2 billion population. India needs atleast revenue of 30 billion $ from GCC to rule out trade deficit. IBM has more revenue than entire Indian IT industry.
    Sorry but its a pity.
     
  17. The Messiah

    The Messiah Bow Before Me! Elite Member

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    We are talking about tata and not whole of India. Majority of contracts are taken by west since the arabs are there lackeys.
     
  18. sehwag1830

    sehwag1830 Tihar Jail Banned

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    There is the problem. Our IT sector revenue from GCC is only 6-8 billion $. We need to move up the value chain.
     
  19. ejazr

    ejazr Stars and Ambassadors Stars and Ambassadors

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    It is only one area. Indian railway companies have got some big contracts particularly Saudi Arabia India eyes railway business in Saudi Arabia - Arab News

    Other areas including education, particularly higher education as well as manufactured goods from machine tools to textiles.

    Not to mention that India expat population domination the migrant population profile sending back about $30Billion in remitances to India annually.
    India largest recipient of global and GCC remittances - Economic Times
     
  20. sehwag1830

    sehwag1830 Tihar Jail Banned

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    remittance doesn't contribute much to India's industrialization. We need good industrial base rather than working as slaves in middle-east.
     
  21. ejazr

    ejazr Stars and Ambassadors Stars and Ambassadors

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    Remitances results in consumption in India which indirectly contributes to the services and industry in India. And $30 billion is almost 10% of our total exports of about $300 Billion. It is not a small amount. You are also getting 6-7 million people employed as well reducing your unemployment problem in India.

    There are definitely labour rights issues particularly for blue collar workers but that has been increaingly replaced by Bangladeshi and Nepali workers. This is also where the Indian MEA should enforce contracts regulations and crack down on dogy agents on our side as well which are also responsible for Indiasn being sent on false contracts.
    Recently a lot of work has been done by the MEA on this regard and multiple agreements have signed on Manpower recruiting and labour rights.


    Some Indian expats do extremely well and particularly in countries like UAE and Oman, they are a major force in business and finance.

    Here are some profiles on some of the billionaires expats living in UAE
    Top 10 Richest Indians in the GCC
     

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