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Growth Of Middle East Non-Oil Economy Will Continue To Progress In 2023, Says PwC Chairman | |
| Sumita Pawar |
The growth of the Middle East’s non-oil economy will continue to progress into 2023 as the GCC economies continue to diversify, said Riyadh Al Najjar, PwC Middle East Chairman of the Board and KSA Country Senior Partner.
The growth is supported by national visions, industrial strategies, sustainable destinations, and various tourism initiatives across the region that will boost growth beyond Vision 2030, he added.
Other economic transformations in 2023 could include the expected easing of liquidity conditions, an increase in efforts to green the economy, and a step-up in efforts to nationalize the private sector workforce.
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Using the results of PwC's recent 26th annual global CEO survey, Riyadh said that Middle East CEOs are focusing on advancing their digital transformation. 84% of respondents in the region said they will invest in automation processes and systems, and 66% said they plan to use cloud technology, artificial intelligence, and other advanced technologies in operations.
Riyadh said that business leaders in the region are working to change their companies to make them more stable in the face of global economic and geopolitical instability and worries about their long-term viability.
Report mentioned, and he added that a key pillar of this strategy centers around technology: investing in technology to bring new efficiencies to their businesses and open new opportunities — with a new-found sustainability mindset.
"Regional leaders are also more mindful of the importance of strengthening supply chains and improving their cost efficiency to ensure future resilience."
As the world shifts towards a greener future, the Middle East is ready to lead in shaping the sustainability agenda, according to Riyadh.
Organizations are currently facing an increased set of demands from stakeholders to show tangible progress towards net zero and environmental change.
"Through our surveys, we found that governments and corporate leaders across the region and the Middle East realise that new opportunities have presented sustainable initiatives that outweigh limitations on economic development," he said, adding that Middle East CEOs have either taken steps to mitigate climate risk or are in the process of doing so, both by innovating new products and processes with a lower carbon footprint and cutting emissions.
With the growing focus on ESG, it is crucial that business leaders ensure they have appropriate in-house expertise for ESG reporting across all operations, as well as setting an internal carbon price to facilitate the transition to net-zero emissions, identifying how their business can make use of natural capital, and measuring their environmental footprint.
Commenting on ESG, he also noted that environmental, social, and governance (ESG) imperatives can accelerate the massive and fast transformation of the Middle East region.
"Through the strategic role the region plays in the energy transition, pioneering hydrogen and circular economies, developing sustainable destinations, localizing supply chains, generating employment, expanding social inclusion, and practicing good governance, ESG can both drive the transformation and create opportunities to develop world-leading competitive advantage," he said.
The report further mentions three steps identified by PwC that can support companies in transitioning and developing a robust ESG strategy, which include,
Overall, he stated, CEOs in the Middle East are actively preparing for a more dynamic period ahead, marked by transformation, to strengthen their long-term resilience.
"In Saudi Arabia, we are witnessing that growth in the non-oil economy and planned government spending on giga projects, supported by the diversification agenda, are all expected to provide strong momentum to the Saudi economy."
The plan for Riyadh to host the World Expo in 2030 should fit with the kingdom's Vision 2030.
"The Expo will transform all industry sectors within the Kingdom while building along the theme of enhancing the lives of the community. The venture will bring forward new job opportunities, digital transformation, increased awareness, and tourism throughout the Kingdom, as well as building on the growing economy and infrastructure," Riyadh concluded.