Donald and Melania Trump with Egyptian President Abdel Fattah El Sisi, left, and Saudi Arabia's King Salman during the inauguration of the Global Centre for Combating Extremist Ideology in Riyadh in 2017. AFP
Donald and Melania Trump with Egyptian President Abdel Fattah El Sisi, left, and Saudi Arabia's King Salman during the inauguration of the Global Centre for Combating Extremist Ideology in Riyadh in 2Show more

How a second Trump term will be different for Gulf economies this time around



Donald Trump's remarkable return to the White House carries a wide range of uncertainty, not least of all on the Gulf Co-operation Council, whose economies stand to be impacted by a transactional and fickle politician.

When he does return to power, he will be doing so under a different Gulf region than when he left office four years ago. Today's GCC is diversifying its economy from oil and gas, thawing tensions with Iran and on the doorstep of the Gaza war.

“Trump is likely to be different in terms of priorities and how his administration engages, and the Gulf is different. And so there are kind of a range of ways in which the new administration could be good for them. But also there is some significant risk,” said Justin Alexander, director of Khalij Economics.

The biggest and most direct Trump-policy risk for the Gulf is the T-word: tariffs.

Economists warn that his plan to impose a 10 per cent tariff on all imports into the US will reignite inflation and stagnate growth. Some of his other domestic proposals, including deporting immigrant workers, are also expected to have an inflationary impact.

Such policies would force the Federal Reserve to keep interest rates elevated, which would spillover into the GCC, where a majority of the countries follow the central bank's policy decisions because of the currency peg.

“The big concern there for the Gulf states is that borrowing costs might be higher, maybe substantially higher, than they would otherwise be, because of the policies that Donald Trump has outlined,” Mr Alexander said.

His tariffs policies would also be a significant step forward in the recent trend in protectionist policies and global fragmentation.

“Gulf states are very open economies in terms of the importance of trade and they thrive in a world where there is stability and free trade and the development not just us, tariffs, but the impact they will have, more broadly on protectionism around the world … that's not good for Gulf states ,” Mr Alexander said.

Trade restrictions may have less of an impact on the Gulf, which have shifted most of its exports to Asia and Europe than the US in recent years. China is a particularly important export partner, absorbing 20 per cent of GCC oil and gas exports. India, Japan and South Korea are also major trade partners for oil and gas.

And even as a free-trade agreement between China and the Gulf reportedly stalled earlier this year, Beijing remains a critical economic partner for the region.

Clean energy dilemma

Another signature promise of Mr Trump is to increase oil and gas production, which also carries its own implications for the Gulf.

“Some of the Trump policies might reduce friction with the oil producers in the region and create new ones,” said Rachel Ziemba, a geoeconomic and country risk expert.

Such plans to boost production efforts would also come at an awkward time as many countries in the region start to diversify away from fossil fuels.

The UAE, Saudi Arabia and others are looking to generate economic growth by investing in technology, boosting female employment and other measures as a means to make their economies less reliant on oil and gas.

“There's a bit of a disconnect on responding to climate change and the like,” Ms Ziemba said.

Underscoring that disconnect is his promise to rescind “all unspent funds” of the 2022 Inflation Reduction Act, a landmark Biden-era law that provides subsidies for clean-energy projects.

President Joe Biden signed the bill in 2022 as part of his administrations plans to cut greenhouse gas emissions by nearly two-thirds by 2035.

Conflict adds further uncertainty

The greatest uncertainty, however, remains the conflict in the Middle East.

The trajectory of the war casts a shadow over the Middle East's outlook as a whole, and the World Bank lowered the region's economic growth to 2.2 per cent this year. The Gulf, meanwhile, is still on track for solid growth at 1.9 per cent after a 0.5 per cent increase last year.

Assuming the conflicts in the region remain unresolved by January, Mr Trump will assume office during a time of historic human and economic suffering in Gaza and Israel's military efforts in Lebanon against Hezbollah.

“The region has changed a lot, not just in the last year, but the security decisions of the Gulf countries have shifted a lot since the last Trump administration, and in some cases because of the realisation that the US security interests and regional security interests weren't always aligned," Ms Ziemba said.

Mr Trump has vowed to pledge a quick end to the conflicts in Gaza and Lebanon. What that means is unclear, however, as he labelled himself as Israel's “protector” during remarks at the Israeli-American Council summit in September.

One analysis conducted by Oxford Economics forecasts Mr Trump's policies to cut GCC growth by 0.2 per cent, but that the immediate economic concern lays in the region's conflicts.

“A Trump presidency would weigh on Middle East growth prospects. However, developments in the war between Israel and its enemies will be more consequential for the short-term outlook in the region than the next president's trade and energy policies,” wrote Maya Senussi, Oxford Economics' lead Mena economist.

WHAT IS GRAPHENE?

It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were experimenting with sticky tape and graphite, the material used as lead in pencils.

Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But when they repeated the process many times, the flakes got thinner.

By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment led to graphene being isolated for the very first time.

In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics. 

School counsellors on mental well-being

Schools counsellors in Abu Dhabi have put a number of provisions in place to help support pupils returning to the classroom next week.

Many children will resume in-person lessons for the first time in 10 months and parents previously raised concerns about the long-term effects of distance learning.

Schools leaders and counsellors said extra support will be offered to anyone that needs it. Additionally, heads of years will be on hand to offer advice or coping mechanisms to ease any concerns.

“Anxiety this time round has really spiralled, more so than from the first lockdown at the beginning of the pandemic,” said Priya Mitchell, counsellor at The British School Al Khubairat in Abu Dhabi.

“Some have got used to being at home don’t want to go back, while others are desperate to get back.

“We have seen an increase in depressive symptoms, especially with older pupils, and self-harm is starting younger.

“It is worrying and has taught us how important it is that we prioritise mental well-being.”

Ms Mitchell said she was liaising more with heads of year so they can support and offer advice to pupils if the demand is there.

The school will also carry out mental well-being checks so they can pick up on any behavioural patterns and put interventions in place to help pupils.

At Raha International School, the well-being team has provided parents with assessment surveys to see how they can support students at home to transition back to school.

“They have created a Well-being Resource Bank that parents have access to on information on various domains of mental health for students and families,” a team member said.

“Our pastoral team have been working with students to help ease the transition and reduce anxiety that [pupils] may experience after some have been nearly a year off campus.

"Special secondary tutorial classes have also focused on preparing students for their return; going over new guidelines, expectations and daily schedules.”

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Rating: 4/5

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Scoreline

Liverpool 4

Oxlade-Chamberlain 9', Firmino 59', Mane 61', Salah 68'

Manchester City 3

Sane 40', Bernardo Silva 84', Gundogan 90' 1

If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.

When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.

How to get there: Emirates currently flies from Dubai to Orlando five times a week.
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Unresolved crisis

Russia and Ukraine have been locked in a bitter conflict since 2014, when Ukraine’s Kremlin-friendly president was ousted, Moscow annexed Crimea and then backed a separatist insurgency in the east.

Fighting between the Russia-backed rebels and Ukrainian forces has killed more than 14,000 people. In 2015, France and Germany helped broker a peace deal, known as the Minsk agreements, that ended large-scale hostilities but failed to bring a political settlement of the conflict.

The Kremlin has repeatedly accused Kiev of sabotaging the deal, and Ukrainian officials in recent weeks said that implementing it in full would hurt Ukraine.

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Sustainable Development Goals

1. End poverty in all its forms everywhere

2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture

3. Ensure healthy lives and promote well-being for all at all ages

4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all

5. Achieve gender equality and empower all women and girls

6. Ensure availability and sustainable management of water and sanitation for all

7. Ensure access to affordable, reliable, sustainable and modern energy for all

8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

9. Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation

10. Reduce inequality  within and among countries

11. Make cities and human settlements inclusive, safe, resilient and sustainable

12. Ensure sustainable consumption and production patterns

13. Take urgent action to combat climate change and its effects

14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development

15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss

16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels

17. Strengthen the means of implementation and revitalise the global partnership for sustainable development

COMPANY PROFILE

Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed 

Tree of Hell

Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla

Director: Raed Zeno

Rating: 4/5

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While you're here
Company%20profile
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The specs: 2018 Mitsubishi Eclipse Cross

Price, base / as tested: Dh101,140 / Dh113,800


Engine: Turbocharged 1.5-litre four-cylinder


Power: 148hp @ 5,500rpm


Torque: 250Nm @ 2,000rpm


Transmission: Eight-speed CVT


Fuel consumption, combined: 7.0L / 100km

The specs
Engine: 77.4kW all-wheel-drive dual motor
Power: 320bhp
Torque: 605Nm
Transmission: Single-speed automatic
Price: From Dh219,000
On sale: Now
Company%20Profile
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Our legal columnist

Name: Yousef Al Bahar

Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994

Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers

MATCH INFO

Europa League semi-final, second leg
Atletico Madrid (1) v Arsenal (1)

Where: Wanda Metropolitano
When: Thursday, May 3
Live: On BeIN Sports HD

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Updated: November 08, 2024, 8:00 AM

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