Page 57 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

Think Again: Addressing Misconceptions about the GCC 41

Figure 2.1 High oil and gas income is stimulating local economies

companies such as the powerful Abu Dhabi Investment Authority
(ADIA) and the Kuwait Investment Authority. Some capital is
used for foreign spending, both by private individuals and by the
government.
An increasing amount of capital, however, is being allocated
for local purposes. Local investment in sectors such as real estate,
infrastructure, and heavy manufacturing is occurring at an
unprecedented level. Local government spending is also high, as
population growth and other factors fuel increased demand for
social services. Local consumption—evident in the region’s sprawl-
ing shopping malls, large supermarkets, luxury retailers, and
booming tourism industry—has reached historic heights. These
factors play a direct role in stimulating the high growth and
dynamism of the GCC’s local economies.

MASSIVE REAL ESTATE AND
INFRASTRUCTURE PROJECTS

In every GCC market, large-scale real estate and infrastructure proj-
ects are under way. According to the International Monetary Fund
(IMF), over $600 billion in infrastructure investment will be needed
5
in the GCC through 2010. While many GCC projects under way are