Is the Gulf on the cusp of a new era? Prospects may be brighter than they seem.
Commenting on geo-politics can be a risky game, especially in a region as complex as this. So we are prepared for disagreement and debate around how we see the current situation and potential outcomes.
Recent developments in Iran and the Northern Gulf will have added fuel to the pessimists' fire about prospects for stability and an improvement in international sentiment about the region. It's easy to understand those that are convinced the hostile and violent removal of a senior Iranian General will only inflame tensions further and potentially unite a fractious Iran against outsiders. We however take a more optimistic view about the medium-term implications of these events and the opportunities that may derive from them.
It seems to us that this targeted attack has created space for a new level of dialogue between Iran, its proxies and its adversaries. Regional relations have been steadily improving, especially with Israel, except in those countries under the influence of the IRGC and Soleimani in particular. The power and influence he wielded within Iran probably made anything but hostility impossible. Now he is no longer in the frame, we are of the opinion that there is possibility of a reset in relations and a revised nuclear deal that brings Iran back into the fold and could potentially lift sanctions.
If this were to be the case, the economic outlook for the Gulf and wider region could be significant. Already Saudi is at the start of a bull run in real estate development, tourism, hospitality and entertainment following the recent reforms and the launch of the Vision 2030 plan. The impact of this is already apparent in the UAE, where many companies have re-orientated their focus to KSA and the Dubai-Riyadh flights are packed everyday. Many international businesses are now seriously looking at establishing a presence in the country, illustrating a major shift in sentiment from even a few years ago.
Add a resurgent Iran to this, generating demand for everything from Oil & Gas technology and services to consumer products, whilst attracting FDI and a surge in tourism and the region could look very different in a few years, with huge commercial opportunities for those willing to commit.