19/04/2015 00:34 AST
There were some 232 joint industrial projects exclusively funded by capital from the Gulf region in 2013, according to data available with the Gulf Organisation for Industrial Consulting (GOIC) IMI Plus.
The cumulated value of these investments was estimated at about $23 billion and they offered jobs to about 59,200 workers. On the other hand, there were 3,015 joint Gulf-Arab-foreign projects with cumulated investments worth about $150.8 billion which employed around 360,000 workers.
Joint Gulf ventures constituted about 7.1 per cent of the total joint industrial projects, and the cumulative funds from the Gulf region invested in joint projects was estimated at 13.2 per cent of the total invested funds in industrial projects.
The data revealed that the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA) had the largest share of joint Gulf industrial projects with 42.7 per cent and 25 per cent, respectively, followed by Oman with 12.5 per cent and Qatar with 11.2 per cent in addition to Bahrain with 7.3 per cent and Kuwait with 1.3 per cent.
Joint Gulf projects
As for investments in joint Gulf projects, KSA had the highest share of 37.6 per cent, followed by Qatar with 19.5 per cent, Bahrain with 18.8 per cent and Oman with 13.9 per cent, in addition to the UAE with 8.9 per cent and Kuwait with 1.3 per cent. Saudi Arabia also had the highest share of employments at 37.1 per cent followed by the UAE with 35.2 per cent and other GCC countries.
Most of the operating factories were in the fields of chemicals and plastics. There were 65 factories operating in these areas which amounted to 28 per cent of the total joint Gulf factories, followed by construction material industries with 43 factories at 18.5 per cent. These were followed by food and beverage industries at 14.2 per cent, manufactured metal products at 11.6 per cent, basic metals industries at 6 per cent and other industries at 21.7 per cent.
The total cumulated investments in joint Gulf companies were worth $23 billion in 2013, or around 13.2 per cent of the total invested funds in joint industrial projects. The chemicals, rubber and plastic sector had the biggest share of investments worth $11.2 billion or 48.7 per cent, most of them in Saudi Arabia and Qatar, followed by the basic metals industry with investments worth about $7.2 billion or 31.2 per cent, mostly in Bahrain, Oman and Saudi Arabia, and then construction materials industries at 7.7 per cent, food and beverage industries at 4 per cent and other industries.
In this regard, Abdulaziz bin Hamad Al Aqeel, GOIC secretary general stated, "GCC governments were particularly interested in encouraging joint Gulf projects. The GCC unified economic agreement's 12th article had highlighted the importance of undertaking necessary measures to finance and establish joint private and public ventures, similar to what was mentioned in the GCC unified industrial development strategy."
Al Aqeel added that there were numerous economic benefits being accorded to these joint industrial projects that included providing necessary capital to start industrial projects, notably megaprojects, as one state or one investor is incapable of launching such a venture on its or his own.
The large regional markets also help to accommodate increasing production capacities, achieving economies of scale and interlocking domestic and regional production sectors.
Thus, a joint economic integration base is created and the dependence of GCC economies on each other increases.
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