MENA Region and Saudi Arabia's Property and Infrastructure Industry offers Australian Businesses Growing Opportunities By Mohamed Hage The COVID-19 outbreak led to a drastic decline in oil prices, which put significant pressure on oil-exporting countries in the MENA region. However, this has encouraged several MENA countries to explore alternate and more sustainable industries to mitigate the long-term economic risks of their single-export dependencies. While these countries face logistical limitations that have hampered the development of non-oil sectors in the past, a renewed focus to improve these inefficiencies could lead to increased FDI inflows and rapid growth in modern industries. According to a 2021 OECD report several MENA countries are increasing efforts to foster public-private partnerships (PPPs), which will make the Property and Infrastructure industry more accessible for Australian companies in the region. This presents opportunities for Australian businesses to tap into the increasingly lucrative property sector, which is becoming more promising with the increased efforts to develop highly advanced, efficient, and sustainable cities that can meet the demands of their growing populations and attract FDIs. The Kingdom of Saudi Arabia is a particularly attractive market for Australian businesses in the property and infrastructure industry, as it has been making strides towards creating a more diverse and sustainable economy under Vision 2030. With one of the fastest growing economies in 2023 there are plenty of opportunities for international conglomerates to penetrate the Saudi Arabian market and compete in the industry. The construction and transport industry in the Kingdom is expected to see an estimated $1 trillion worth of projects in the pipeline. This includes significant spending in power and building projects, housing and early infrastructure development. Australian businesses can leverage their expertise in construction management to train Saudi laborers or manage Saudi projects in the Kingdom, particularly given the current shortage of skilled labour in the construction sector. Although there may be barriers to penetrating the Saudi Arabian market, such as the lack of an established Australian presence and a relatively new diplomatic relationship, there are promising development prospects for the Australia-Saudi relationship, including the discussion of an FTA. Moreover, the growing property and infrastructure industry in Saudi Arabia presents a strategic diversification opportunity from Australia's current agricultural exports to the region, especially given recent tariffs on certain Australian agriculture exports. In summary, there are numerous opportunities for Australian businesses in the property and infrastructure industry in the MENA region, particularly in Saudi Arabia. By leveraging their expertise and collaborating with local partners through PPPs, Australian businesses can tap into the growing property sector and contribute to the region's sustainable economic development. |
