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Overview of Market Opportunities in the Gulf Cooperation Council
- 1. Overview of the Gulf Cooperation Council (GCC) Updated December 2010 The Canadian Trade Commissioner Service presents a Global Commerce Strategy Priority Market The six-member Gulf Cooperation Council (GCC)— Saudi Arabia, United Arab Emirates (UAE), Kuwait, Qatar, Bahrain and Oman—represents one of the wealthiest country groupings in the world.1 Blessed with extensive oil and gas reserves, development and investment in the sector is substantial. The GCC countries are seeking to diversify their economic base and reinvest a substantial amount of their surplus capital in massive infrastructure projects, including hospitals, medical centres and educational institutions. Despite the current global economic slowdown and lower oil revenues, GCC governments are determined to draw down their accumulated reserves to maintain the level of these investments in order to sustain their Dubai, United Arab Emirates economies. Rising levels of disposable income, government subsidization of basic necessities, and investment capital: by 2020, GCC countries are more flexible consumer and business lending practices expected to have over US$3.5 trillion in foreign direct are creating a new generation of affluent consumers investment holdings. Furthermore, the region is being influenced considerably by Western lifestyles and positioned as a leading trading hub serving the Middle tastes. The GCC is also a major source of foreign East, Africa and Southeast Asia. Canadian businesses are well suited to engage in the substantial economic Fast Facts activity under way in the GCC, particularly in the infrastructure, oil and gas, agriculture and health care Population (est): 37.8 million sectors. Canadian companies that establish commercial GDP (est): $1.1 trillion credibility in the region will also be in a preferential Main Canadian Exports (millions): Machinery ($636), Cereals position to attract the region’s substantial investment ($512.6), Aerospace products ($284), Oil seeds ($149.1), Motor resources. vehicles ($140.3) Main Canadian Imports (millions): Mineral fuels and oils ($1.7 billion), Precious stones and metals ($62.7), Fertilizers ($12.3), Commercial Relations, 2009 Mineral ores ($6.4), Machinery ($6.0) Canada’s two-way merchandise trade with GCC countries exceeded $4.8 billion. Canadian merchandise exports to the region reached almost $3.0 billion, while imports reached 1 Unless otherwise stated, all data is for 2009 and expressed in $1.8 billion. Canadian dollars. All data based on latest available national statistics drawn from a variety of sources, including Statistics Canada, Export Development Canada, Bank of Canada, IMF WEO, UNCTAD.
- 2. Overview of the Gulf Cooperation Council (GCC) ν During the past five years, exports to the GCC hospitals, pharmaceuticals, and institutional countries from Canada have more than doubled devices and supplies. while imports from the region which had more than ν Agriculture, Food and Beverages: The GCC has doubled during the five years leading up to 2008, limited local agricultural production, a growing declined by 28.4% in 2009 demand for imported foodstuffs, and a strong re- export market. Canadian agri-food products are Market Opportunities looked upon as high-quality, with a distinctive The Government of Canada has identified the GCC as North American image, and represent a substantial a GCS priority market—based on extensive consultation with government, academic and Canadian business and industry representatives—and has developed a comprehensive Market Plan that identifies the following sectors as offering clear market opportunities well suited to Canadian capabilities and interests in the region: ν Service Industries and Capital Projects: Rapid population growth, substantial revenues from oil and gas, large allocations by government to public projects, and major real estate developments are contributing to an infrastructure and construction expansion, as well as increasing demand for education and training. Canadian business has played a key role in infrastructure developments worldwide, and a number of leading firms have percentage (30 percent) of Canada’s overall already established a credible presence in the merchandise exports to the region. GCC region. Canadian expertise in education is also well respected. Government Leadership and Support ν Oil and Gas Equipment and Services: Canadian The Government of Canada will continue to monitor, firms have world-renowned expertise in the oil and assess and influence GCC bilateral trade and gas sector and are well placed to supply the investment to advance Canadian interests. Officials industry’s needs as they upgrade their facilities and will be reviewing trade policy and access issues, processing in the GCC. including the feasibility of additional Foreign Investment Promotion and Protection Agreement ν Health Industries: GCC countries are building (FIPA) negotiations, a potential Free Trade Agreement and upgrading many health care facilities, the (FTA) and an evaluation of current bilateral air treaties. development and management of which match Canada’s Trade Commissioner Service will continue to well with Canadian capabilities. The GCC provide information and encourage export-ready countries also import virtually all of their medical Canadian firms to pursue opportunities in the GCC equipment and supplies and are highly dependent and will continue to communicate business intelligence on foreign-trained physicians. GCC demand for on GCC partnership and investment opportunities, as Canadian expertise in the sector is in part due to well as promote Canadian investment opportunities to the significant influence of GCC decision makers GCC investors. who have returned from studies in Canada. Sub- sectors include health care facilities management, 2 .
- 3. Overview of the Gulf Cooperation Council (GCC) The Canadian Trade Commissioner Service Kuwait Market Access Villa 24, Section 4-24, Al-Mutawakkal Street, Da’aiyah Kuwait City, State of Kuwait Canada has a number of bilateral trade and investment Tel.: (011-965) 256 3025 policy instruments in place that are helping to facilitate Fax: (011-965) 256-4167 and support Canadian commercial engagement in the Email: kwait-td@dfait-maeci.gc.ca region: Web: kuwait.gc.ca Saudi Arabia 1991 Canada-Saudi Arabia Air Transport Agreement Diplomatic Quarter 1999 Canada-UAE Air Transport Agreement Riyadh, Saudi Arabia Tel.: (011-966-1) 488-2288 2007 Canada-Kuwait Air Transport Agreement. Fax: (011-966-1) 488-0137 Canada entered into discussions about a FIPA Email: ryadh-td@dfait-maeci.gc.ca Web: www.saudiarabia.gc.ca with Kuwait and is exploring possible FIPAs with other GCC countries. United Arab Emirates 2008 Conclusion of FIPA negotiations with Kuwait Abu Dhabi Trade Towers (Abu Dhabi Mall) West Tower 2009 FIPA concluded with Bahrain; 9th & 10th Floors, Abu Dhabi, UAE Further progress towards signing of FIPA with Tel.: (011-971-2) 694-0332 Fax: (011-971-2) 694-0398 Kuwait; Email: abdbi-td@international.gc.ca Signed MOU on Trade Cooperation with Web: www.uae.gc.ca Kuwait. Dubai Bank St. Bldg, 7th Floor Khalid bin Waleed St. Dubai, UAE P.O. Box 52472 Tel: (011-971-4) 314-5555 Fax: (011-971-4) 314-5556 Email: dubai-td@international.gc.ca For further information about the Gulf Cooperation Council (GCC), visit the Foreign Affairs and International Trade Canada website at www.international.gc.ca or contact the Trade Commissioner Service at 1-888-306-9991. The Government of Canada’s Market Plan for the Gulf Cooperation Council (GCC) is available on the Virtual Trade Commissioner website at www.tradecommissioner.gc.ca. Read the Market Sector Reports, prepared by the Canadian Trade Commissioner Service, related to the GCC. 3 .