Gulf ministers highlight economic potential of regional integration at IMF and World Bank annual meetings

Ministers highlight 'growing revolution of mutual benefits that come from data, co-ordination and trade'

The finance ministers of Bahrain, Saudi Arabia, Kuwait and Qatar attend a GCC discussion on the sidelines of the IMF and World Bank annual meetings in Washington. Kyle Fitzgerald / The National

A group of finance ministers from Gulf Co-operation Council countries on Thursday celebrated the region's economic integration as the oil-exporting countries continue in their diversification efforts.

Delivering an address at the GCC Round Table on the sidelines of the International Monetary Fund and World Bank annual meetings, Qatar's Finance Minister Ali Al Kuwari highlighted areas of regional integration including infrastructure, electric connectivity and the establishment of the regional rail network. The event marked the first time GCC members have hosted an event during the yearly gatherings.

Saudi Finance Minister Mohammed Al Jadaan, Bahrain's Finance Minister Sheikh Salman bin Khalifa Al Khalifa and Kuwait's Finance Minister Nora Al Fassam also attended, and spoke on several sectors of collaboration.

“Over the past years, there has been much scepticism about potential, about the potential for economic integration, given the similarities of our economies and decide for self reliance,” Mr Al Kuwari said.

“However, this year, there has been growing revolution of the mutual benefits that come from data, co-ordination and trade."

He said co-operation between GCC states on sustainable development was on “a clear display” last year when Dubai hosted the Cop28 summit, and through the Middle East Green Initiative. Led by Saudi Arabia, the initiative aims to ease the effects of climate change and promote regional collaboration to achieve environmental targets.

Mr Al Kuwari said continuing green efforts were important areas for cross-border investment, noting Abu Dhabi clean-energy company Masdar building Saudi Arabia's first major windfarm.

The event comes as the region continues with efforts to diversify their economies away from oil and gas and towards technology and other sectors. The UAE, Bahrain, Saudi Arabia and Qatar have all established “visions” for the next 10 years, while Oman has launched a Vision 2040 project.

“'Sometimes somebody [is] saying, 'OK, you're doing the same thing. And this is competition, and this is' – but the reality is, we complement each other. We're not in competition. We are complementing each other. And we see, I mean many, many results, and very good results,” said Mr Al Kuwari.

“We know this is the main heart of diversification, and this is going to complement, you know, tourism among the GCC countries.” He also praised the region's grid system

Ms Al Fassam said the GCC's grid structure's and connectivity was a “prime example” of regional co-operation: "This is exactly aligning with Kuwait's national energy policy and vision for sustainable development."

Sheikh Salman noted that Bahrain is working on many projects that will have implications beyond the GCC, including a joint solar energy project with Saudi Arabia and a causeway between Bahrain and Qatar.

Mr Al Jadaan said there is “significant demand” for what the GCC has to offer, pointing to the growing number of data centres in the region.

“Because we cannot really connect to Latin America or grid, for example, or the USA or Canada, or even some parts of Europe, we are trying to see how is this going to be done in a way that actually we can still export our energy,” he said during the discussion.

The UAE's data centre industry is one of the fastest growing in the Middle East, with active projects totalling $1.2 billion and a future project pipeline of $433 million, according to Turner & Townsend, a UK-based professional services company.

Saudi Arabia is also a leading player in the market, with 22 active co-location facilities and another 40 under construction. Programmes under New Kuwait 2035 and Digital Oman 2030 are also contributing to the region's data centre development.

“The United Arab Emirates, Saudi Arabia, Bahrain and … different states within the GCC are now actually considering attracting investors to build their data centres using the ample energy in the GCC, not necessarily the conventional energy only,” Mr Al Jadaan said.

“So you could actually take this in multiple ways, in terms of complementarity, in terms of utilising your competitive advantage in the region; not only if you serve the region, but also beyond.”

He said the GCC has invested $3 trillion on infrastructure in the past 10 years.

“So the amount of spend, the amount of power that exists in the GCC that is ready … to be harvested by investors and the economy at large is quite large,” he said.

Mr Al Jadaan also said the GCC is “starting from a good base” with respect to integration, pointing to the movement of people in the region.

Sheikh Salman also spoke of the region's advantages, including a young population that is digitally literate and a globally connected populace. He said the GCC, which adopts a “client-focused mindset”, also has the advantage of speed in updating regulations.

“When we adopt a client focused mindset and look at that investor, whether domestic, region or foreign as a client, then it changes the way that we approach things,” he said.