A. SREENIVASA REDDY (ABU DHABI)
Diversifying infrastructure and revenue streams will be key for Gulf Cooperation Council (GCC) economies to navigate current and future geopolitical challenges, Jihad Azour, Director for the Middle East and Central Asia at the IMF, said during a seminar on Middle East economic prospects.
Azour said policymakers across the region are grappling with a highly uncertain environment, particularly around the stability of key trade routes and the duration of the crisis.
“Most of them were concerned about the risk of an extended conflict or fragile ceasefire… and the uncertainty… whether they need to manage a crisis of three weeks, three months, or even more,” he said.
Despite these challenges, Azour struck a constructive tone, pointing to the GCC’s ability to draw on past crisis-management experience. He said elements of the policy response deployed during the COVID-19 pandemic are already being used to ease bottlenecks and support economic activity.
He outlined a three-pronged approach for the region: “restore, repair and reconnect.” This includes restoring infrastructure, repairing damage and “reconnecting… to the main partners, which are Asia,” he said.
Azour added that the region must also “rethink the future,” noting that the GCC had, until recently, been on track for stronger growth and had reinforced its status as both a safe haven for investment and a pioneer of new economic models.
“This agenda has to come back… it will come back differently… with another dimension, which is called resilience,” he said.
The IMF official highlighted that the crisis has exposed structural gaps, particularly in infrastructure and connectivity, prompting governments to consider diversifying supply routes and reducing reliance on single channels.
“This war has revealed certain number of spots that need to be fixed,” he said.
At the same time, he emphasised the importance of maintaining open and secure trade routes to support investor confidence and economic stability.
"We need to have trade routes that are open, unequivocally free… for investors to get more stability and more confidence,” Azour said.
He noted that GCC economies, supported by stronger policy credibility and diversified revenue bases, have been relatively well positioned to absorb shocks.
“Those who have already credibility in their policies, diversified their revenues, like in the GCC, they have been able to address the liquidity shock… and restore… business,” he said.
Azour also pointed to the broader need for economic diversification, stressing that countries with more diversified economies and revenue streams are better able to withstand shocks and sustain growth over time.
The IMF seminar, moderated by CNN anchor Becky Anderson, followed the release of the IMF’s October World Economic Outlook.