Our columnists offer their views on the outlook in 2017

Robin Mills, Omar Al Ubaydli, Patrick Werr and Ivan Fallon look ahead to what loom as the top economic and business stories of 2017.

When all is said and done, what will have mattered in the year just begun? Four of The National’s business columnists believe the important issues of 2017 will include: US coal and Opec production levels; Saudi Vision 2030’s effect on the economy; Egypt’s struggle with reforms; and the fallout of Donald Trump and the Brexiteers gaining control of their countries’ economies.

Robin Mills

On January 20, the 45th president of the US will be sworn in. By January 21, if we believe campaign slogans, coal will be America’s fuel of the future, the US will have withdrawn from the Paris climate agreement, and sanctions on Russia’s energy industry will have been lifted. But Mr Trump’s administration can also shake the energy world by launching a trade war with China or rattling sabres at Iran.

Opec will hold its next scheduled meeting on May 25. By then it will be clear if production cuts are being adhered to, and whether US shale production is rebounding in response. But the organisation still has a long road to tread on its chosen path. Barring economic recession, oil prices will probably continue their gentle rise while liquefied natural gas remains in the doldrums.

And throughout the year, new energy technologies will continue their advance – further solar records will be set, probably in the GCC, and electric vehicles and batteries will improve. Even as politicians and business executives pursue today’s energy issues, the terrain is shifting beneath them.

Robin Mills is CEO of Qamar Energy, and author of The Myth of the Oil Crisis.

Omar Al Ubaydli

A key issue for the GCC countries in 2017 will be the implementation of the Saudi Vision 2030. All six economies are in need of significant restructuring. However, reform is painful because those who have invested substantially in the status quo will seek to impede the restructuring process. The challenge for Saudi policymakers is to demonstrate to a wide array of stakeholders that the daring overhauls proposed in the Vision will deliver results. If Saudi Arabia succeeds, it will be easy to convince stakeholders in other GCC countries to buy in.

One of the most promising areas is deregulating the private sector so that Saudi youth can unleash their entrepreneurial potential.

With the end of guaranteed public sector jobs, the key goal for the government is creating a business environment where the abundance of Saudi talent feels that it has the opportunity to add value, unencumbered by fees, forms and red tape.

Omar Al Ubaydli is a Bahraini-US economist.

Patrick Werr

The next 12 months show all the signs of being Egypt’s lost year, with the austerity measures of late 2016 promising to send the economy reeling but with no prospective bonanza likely until 2018.

Chief among the measures were a new value-added tax in September and an increase in fuel prices and the flotation of the currency in early November. One dollar now buys 19.50 Egyptian pounds, up from the now-abandoned official rate of 8.88.

Egyptians can expect yet more pain in the coming months, with the government poised for another round of fuel price hikes and tax increased before the IMF meets to consider further loan disbursals before mid-year.

The weaker currency promises to increase exports and lure investors and tourists, but this will take time. Export industries will rely first on idle factory lines to meet any increase in orders before investing in new capacity. Tourism has no direction to go but up after a terrorist attack on a Russian airplane over Sinai late last year sent the industry into free fall. The 2016-17 winter season, however, is now a washout.

The bonanza from newly discovered gigantic natural gas fields in the waters of the Mediterranean is not scheduled to bear fruit until the end of 2017.

Patrick Werr has worked as a financial writer in Egypt for 26 years.

Ivan Fallon

This time next year, we will have a fair idea what president Trump’s economic policies mean for the world – and indeed, we might even have a better understanding about what they actually are. And we will have a clearer view on how Brexit will play out.

They might not be as bad as all that.

So far, the Brexit effect has not happened. Every month since June we have braced ourselves for the expected bad news and every month the economy has held up. 2016 has come and gone and there is no recession in sight.

There is still a remarkable momentum in the economy and businesses and banks are becoming much more robust and self-confident about the prospect of Brexit. I think we will also get through 2017 without a recession.

As for Mr Trump, the more dire the prognostications of his potential mismanagement and of his wild gyrations, the more certain we can be that they will be wrong. The US markets, which have ended in record territory, certainly seem to think so.

We can rely on the checks and balances built into the US system to bring a degree of order and moderation and for sane voices to prevail. One man is not going to destroy the American economy.

Last January, when the world markets were falling apart, few would have reckoned we would end 2016 in the state we are in. Brexit and Mr Trump’s election, both wholly unexpected and unforecast, have basically been shrugged off. I don’t think that’s going to change over the next 12 months.

Ivan Fallon is a former business editor of The Sunday Times and the author of Black Horse Ride: The Inside Story of Lloyds and the Financial Crisis.

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