Presentation on theme: "Presentation to the NZMEBC by Rod Harris, New Zealand Ambassador to Saudi Arabia/Qatar/Kuwait/Oman and Bahrain."— Presentation transcript:
Presentation to the NZMEBC by Rod Harris, New Zealand Ambassador to Saudi Arabia/Qatar/Kuwait/Oman and Bahrain
* Plan to cover New Zealand’s relationships with the GCC states – including opportunities – and what we are doing to capitalise on these * The NZInc Footprint and how we can work for you * Some thoughts about doing business in the Gulf * Questions
Selected NZ top 20 trading partners Total bilateral trade 2011 NZ$ millions Australia18,217 China13,326 USA9,023 Japan6,362 GCC (as a collective 6)5,069 Korea3,129 Singapore2,976 Saudi Arabia1,610 Taiwan1,590 Indonesia1,585 France1,371 UAE1,335 India1,318 Qatar1,067
* Strategic partner for New Zealand – key energy supplier; location into broader MENA region; transport links (Emirates, Etihad and potentially Qatar); large NZ expat presence. * Government focus on deepening relations in range of areas – visits by Governor-General, 3 Ministers (McCully, Heatley and Joyce) and NZTE CEO to region in the last 12 months – plus inward Ministerial visit (Education) from Oman * The GCC (collective) was NZ’s 5 th largest trading partner in 2011 * Bilateral goods trade to Dec 11: NZ$5 billion+ with 20% growth in NZ exports and 44% growth in imports. * 3 of NZ’s top 20 trading partners (KSA, UAE and Qatar) and solid growth with Kuwait and Oman.
* Visa-free access for 90 days for all GCC nationals * Student numbers strong – approx. 8,000 at any one time – significant $$$ value to NZ * Services firms securing contracts * New areas such as food security, science and investment * This year, two education agreements signed with Oman, one almost finalised with Qatar and potential for Air- Services Agreement with Qatar. * Building relations with influential decision makers
* Current nominal GDP of USD 580 billion - projected to hit US$830 billion by Forecast GDP growth of 4-6% for next 7-10 years * US$800 billion of construction sector spending in the period to 2020 (public and private) is planned, including US$125 billion on energy and water plants, NZ$80 billion on affordable housing, US$95 billion on rail, airport and communications facilities. * Significant spending planned in education, healthcare and tourism * Foreign exchange reserves projected at US$824 billion by * Youth bulge. Need to provide education, employment, housing and healthcare – median age 25. * Saudi agricultural imports will increase by 105% to US$35.2 billion by % year on year household spending increases on food are projected.
* Qatar’s current nominal GDP is US$201 billion. Qatar’s GDP per capita (including guest workers) is over US$80,000, one of the highest in the world. * GDP growth projected at around 6.4% at until least * Within the next seven years, Qatar is committed to completing at least US$80 billion worth of infrastructure projects. This includes US$35 billion on railways, US$14 billion on the new Doha international airport, US$20 billion on roads and US$5 billion on a new deep-water port. * Ongoing expansion of Qatar Airways network – interest in NZ routes. * Heavy investments in RST and Food Security – opportunities for NZ * Areas of particular relevance to New Zealand may include the construction sector, ICT, aviation technology, port management services and infrastructure, health, education – and 2022 World Cup.
* Omani GDP in 2012 is projected at US$72.4 billion. The manufacturing, agriculture and tourism sectors are increasingly important as non-oil drivers of growth. * Economic activity is accelerating. Driven by new oil extraction technologies and increasing government spending, overall real GDP growth was around 5% in 2011 with 6.4% growth in the non- hydrocarbon sector. * Oman’s population is 3.37 million with GDP per capita currently US$26,000 at PPP. * 5-year development plan focuses on tourism, industry/manufacturing, agriculture and fisheries sectors – real potential for collaboration with NZ in these sectors. * Education cooperation - two agreements with NZ signed in 2012 * New Zealand firms have played leading roles in the design and building of key projects in Muscat – and New Zealand has a strong reputation in Oman.
* Kuwait’s very healthy financials (for 2012: a projected US$25 billion budget surplus and current account balance of US$72 billion; and a SWF of US$296 billion) and extensive infrastructure investment plans (US$108 billion) lead some to dub it the “sleeping giant” * GDP growth projected at 5% p.a. over next five years * Ongoing political (parliamentary) challenges have slowed developments. * Kuwait is establishing major downstream multi-billion dollar oil investments in China, Vietnam and India and owns significant portfolios of European property investments. * A highly educated, internationalised and relatively young Kuwaiti population (42% under 25) has high social and economic expectations and sophisticated consumer tastes. However, Kuwait’s obesity rate is one of the highest in the world. * NZ has a small but active resident population who are active in business and the professions (e.g. management, engineers, architects) and willing to provide advice and contacts to incoming NZ businesses.
* Bahrain GDP in 2011 was US$25.8 billion. Real GDP growth will average 3.5% in GDP per capita was US$ in * Key industries are hydrocarbons, petrochemicals products, aluminium and services – esp Islamic finance and insurance. * Of all GCC states, Bahrain was most affected by political unrest inspired by the ‘Arab Spring’ in Bahrain is still coping with the aftermath of these events. * Bahrain remains a viable trade and economic partner for New Zealand, given its small size and relative ease of doing business. Bahrain provides an important services hub for and access to, Saudi Arabia’s rich Eastern Province. * NZ “brand” understood and respected due to efforts on the establishment of the Bahrain Polytechnic and long-term NZ engagement with the country.
* Embassy been operational for over one year – not our traditional model and with a narrower focus * The key transport and logistics hub for NZ goods/services to MENA and beyond * Emirates is NZ’s largest airline by arrivals outside the Australasian carriers * Entry point to the GCC for most New Zealand companies / exporters * Growth market - 16 th largest export market. * Strong tourism sector supports NZ F&B trade.
* Large current account and budget surpluses in the intermediate term and projected GDP growth of around 6% * Total GCC GDP may double to US$3 trillion by 2020 * Ongoing public sector investments in infrastructure, skills and capacity building and headline projects – ie Saudi building/upgrading 28 airports, Kuwait and Qatar huge investment programmes * The value of assets under management in SWFs in the GCC is about US$ 1.5 trillion. GCC States are estimated to hold 45% of the value of global SWFs. * Use of SWF assets to invest in local infrastructure and the purchase of strategic foreign assets * GCC population is projected to reach 58 million by 2020, a growth rate of round 1.7%.
* New Zealand considering strategic dialogue with the GCC to give overarching political/economic and cultural dimension * Education remains a real focus – with RST opportunities increasing * Food security – range of possibilities –from investment in supply chain, through to supporting science R&D * Tourism – untapped potential – and high-tourist spending patterns of GCC visitors * Health care and health IT * Construction – niche opportunities/partnerships * NZ-GCC FTA remains on the table
* Strong NZInc presence * More joined up approach taking shape * NZ Embassies in Riyadh and Abu Dhabi. * NZTE in Dubai – with new Regional Director appointment to follow – along with INZ Regional Office * ENZ and Defence in Riyadh
* Relationships matter – and take time * Market evaluation is important * Finding the right partner – we can sometimes help * Payment times can be long – need to be well capitalised if looking at establishment * Legal advice is crucial – use local specialists
* Hosting events * Introductions * Advice * Linkages with MEBC and business networks in the Gulf – ie MIENZ and SANZBN * Relationships with the media * Support from resident NZers wanting to help firms secure contracts
* Thank you * Key staff can be contacted at: * (RIY) * (Abu Dhabi) * (RIY) * (RIY) * (NZTE) * (Education Counsellor)