Brexit will have a knock-on effecton the rest of the EU and eventually its impact will be felt in the rest of the world, including the GCC (Gulf Cooperation Council) countries. As Brexit unfolds British trade policy could become more effective outside of the EU as London will likely push to win orders all over the world to compensate for the losses deriving from the lack of access to the EU Single Market.
Gulf traders worse off?
Exiting from a GCC-EU stalled Free Trade Agreement (FTA) may breathe new life into the UK's trading relationships with the Gulf.
A more favourable exchange rate as the pound's value falls will open doors to new Investment in the country, including from the GCC. However, those Gulf investors with already existing holdings in the UK, either in companies or properties, are, in the short term worse off than they were before Brexit. To better understand the implications and effects of Brexit on GCC countries, I spoke to Omani entrepreneur Qais al-Khonji, CEO of Genesis International.
Question time
BN - Has Brexit had any direct impact on GCC so far, and in particular on Oman’s economy?
QAK - Yes investors are undoubtedly facing the most direct impact, assets and properties’ values have already dropped significantly, it’s not a great time to sell.
However, other investors might also see this as an opportunity to buy in the UK, a lower sterling means greater opportunities for investment in the UK. I would definitely consider investing in the UK, but I think the pound’s value hasn't hit the bottom yet, I will keep a close eye on the market to see when is the best moment to invest.
Moreover, the country has become much cheaper for GCC visitors, the pound has lost value and it’s below 500 Omani baisas, with positive effects for the tourism industry.
BN - The UK government will have to renegotiate trade relations with the outside world. Should we expect to see tighter bilateral relations between your region and London?
QAK - Yes, some of the countries in the region such as the UAE have already accelerated talks over a possible free trade agreement with the UK, I believe once that’s been secured then all the other GCC countries will follow in the same direction.
BN - What benefits, if any, do you see for your country’s economy in dealing with a UK outside the EU? Which sectors are most likely to be positively or negatively affected?
QAK - It would definitely bring a number of positive developments, including increasing exports in goods and services, lower tariffs on exported goods, although this would occur gradually. On the other hand, a removal or relaxation of quotas on certain imported goods is also an important factor to be considered. The sectors that would see most changes are manufacturing and those concerning mass exports, ranging from cars, dealerships to food products.
