EY-DKM Report: The Arab World – Long Term Economic Prospects & Opportunities for Ireland

A new report from the Arab Irish Chamber of Commerce (AICC) has highlighted the extensive economic opportunities for Ireland presented by the Arab states, with the value of Irish exports to the region expected to more than double to reach almost €12 billion by 2033.

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Enda Corneille AICC Chairman, John Lawlor Director Ernest & Young and Ahmad Younis AICC Secretary General and CEO

According to the EY-DKM report, The Arab World – Long Term Economic Prospects & Opportunities for Ireland, which was commissioned by the AICC, current Irish merchandise exports to the region are valued at €1.91 billion while services account for €3.273 billionof the total €5.18 billion export value.

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L-R Ahmad Younis AICC Secretary-General and CEO, Enda Corneille AICC Chairman, H.E. Mr Sultan Al Ali Ambassador of the United Arab Emirates, Minister Pat Breen T.D., H.E. Mr Mr. Ahmad Abdelrazek Ambassador of Palestine, H.E. Dr. Lahcen Mahraoui and H.E. Mr. Nail Al-Jubeir Ambassador of Saudi Arabia

For more than 30 years, the AICC has been facilitating the shipment of exports from Ireland to the Arab World.  Ahmad Younis said, “The Arab World is a major, growing export market for Ireland offering high import demand, good proximity, rapid population growth and large-scale investment and infrastructure plans.  Direct links between Ireland and the region have improved dramatically, easing market access and creating stronger links between the two markets.   Irish businesses with a high-quality product or service that are willing to put in the time to explore and nurture new opportunities are on a pathway to success in the Arab world.  We are a small nation, but we have a very positive image in the region and in the main, Arabs like to do business with their Irish counterparts.”

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Minister Pat Breen T.D. Minister for Minister of State for Trade, Employment, Business, EU Digital Single Market and Data Protection

Four categories of Irish goods account for over 70% of Irish merchandise exports to the region namely soft drink concentrates, baby formula, pharmaceuticals and computers.   Dairy, which accounts for 8.2% of Irish goods exported to the region, is valued at more than €140 million.  This represents an increase of ~37% since the first AICC economic report, compiled by DKM in 2013, which reflects the growing opportunities in the dairy sector.

Since the 2013 report, Irish medical and pharma exports to the region have grown by almost 73% and are now valued at €334 million.  This is driven by a rapidly growing population and investment in healthcare in the region and may also be reflective of high incidences of lifestyle-related diseases.

The region of 21 states between the Middle East and North Africa (MENA) has a growing population of more than 420 million people, representing 5.5% of the world’s population and accounting for 3.1% of the world’s economy.   The population of the region is growing rapidly and is forecast to exceed 500 million, 6% of global population, by 2028.

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Mr. Enda Corneille AICC Chairman

The AICC report by EY-DKM focuses in particular on 13 AICC member countries that are considered to represent the greatest potential for Irish business: Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan and the United Arab Emirates (UAE). These countries represent approximately 4.4% of the world’s population and 2.8% of the world economy.

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Mr. Ahmad Younis AICC Secretary-General and CEO

The region is highly reliant on imports.  With a population of 33.6 million, Saudi Arabia is the largest importer of Irish goods among the AICC member countries.  0.88% of Saudi Arabia’s merchandise imports are from Ireland and are valued at €553 million.  As the largest economy for Irish exports in the Arab region Saudi Arabia will continue to attract Irish attention both in the short and longer term.  High income levels, public investment and a strong focus on making the economy more open to the private sector all bode well.  Food imports are important; Ornua (formerly Bord Bainne) recognises Saudi Arabia as the fifth largest dairy importer in the world and operates a cheese factory in Riyadh.

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AICC Chairman Mr. Enda Corneille and AICC CEO and Secretary-General Mr. Ahmad Younis with Minister Pat Breen TD

The UAE, which is home to an estimated 10,000 Irish expats and with a population of 9.6 million, imported €361 million3 worth of Irish goods (0.2% of its global merchandise imports) last year. It is one of the most dynamic and diversified economy in the Arab region with significant growth potential for Irish businesses.  Bord Bia has been actively promoting Irish food products in the UAE in recent years and the food sector, together with construction, tourism and aviation present some of the strongest opportunities for Irish companies looking to grow their business there.

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John Lawlor Ernest & Young Director addressing the audience

Ireland holds a 0.83% share of global merchandise trade, but currently holds just 0.27% share of the Arab region’s merchandise imports, pointing to the significant opportunities for growth.  To achieve this, in simple terms, requires more Irish businesses doing more trade with the Arab world, and the report points to a number of specific opportunities in the Arab including:

With 98 million inhabitants and a more diversified economy than some other AICC countries, Ireland’s merchandise exports to Egypt amounted to €167 million in 2018. In 2016, the Egyptian market reopened to live Irish cattle and in 2017, the beef market re-opened and five Irish meat plants were approved for export to Egypt. 

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Enda Corneille AICC Chairman, H.E. Mr Sultan Al Ali Ambassador of the United Arab Emirates, Minister Pat Breen T.D, H.E. Dr. Lahcen Mahraoui and H.E. Mr. Nail Al-Jubeir Ambassador of Saudi Arabia

Opportunities for growth 

  • Food sector: Rapidly growing populations along with constrained and relatively underdeveloped agriculture creates an ongoing opportunity in the food sector and, in particular, dairy and meat.  A number of markets in the region have recently reopened to Irish meat, which is pertinent given the possible disruptions or increase in competition as a result of Brexit
  • Pharma and medical: driven by demographic factors, the incidence of lifestyle-related conditions and the move towards improving the healthcare sector
  • Healthcare: There is a significant shortages of local healthcare professionals creating opportunities to directly provide healthcare or provide healthcare training
  • Agricultural advice and training are expected to be growth areas as countries look to improve their food security and production capacity
  • Construction: With ambitious plans across the region for large volumes of investment across economic and social infrastructure, the report highlights a wide range of opportunities in construction and development services (urban planners, QS, architects, engineers and construction companies)
  • Education: Policies aimed at improving education together with a shortage of local teachers generates opportunities to directly provide education or teacher training services, particularly in the Gulf States  
  • Renewables: Policies aimed at increasing the share of renewables in the local energy markets point to opportunities for Irish businesses with knowledge, experience and capabilities in the development and operation of renewables infrastructure
  • Infrastructure: There is a move to privatise significant elements of state-owned enterprises in many of the Gulf Countries, which could lead to opportunities for Irish infrastructure firms in areas such as transport, logistics, energy and water.  As a direct consequence, there may also be opportunities to provide financial services to these privatisation processes
  • Aviation: Aviation-related services will provide significant opportunities for Irish businesses operating in this sector, particularly in the UAE
  • Tourism: Many of the AICC ‘s member countries view tourism as a means of diversifying their economies and generating employment, which opens doors for those who can offer technical and marketing advice in addition to operating facilities

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Richard Brown Dublin Chamber of Commerce, Declan Fearon Tipperary Crystal and Mohammad Tahboub Bayanat

Click the following link to download the report 

AICC EY-DKM Update report 09 10 19 .pdf

 

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