As global trade increases and financing volumes grow, trends point towards a greater role for emerging regions
Global trade finance is expected to reach $38bn by 2015 and the Middle East and North Africa (Mena) and Gulf countries are expected to capitalise on international trade dynamics with their trade funding needs to grow in proportion, a top official of PricewaterhouseCoopers (PwC) Germany has said.
As global trade increases and financing volumes grow, trends point towards a greater role for emerging regions. The volume of global trade finance is estimated to reach $38bn by 2015, from $18bn in 2008, and having reached $28.9bn in 2011, Philipp Lemmerz, Head of the Public Policy Team at PwC Germany, told a Doha Bank’s meeting.
“We have seen that Mena and GCC (Gulf Co-operation Council) countries are capitalising on global trade dynamics and trade finance needs are growing in proportion. Some of the current challenges being faced by commercial banks in the region include meeting the finance needs of small and medium enterprises and trade finance customers,” he said at the bank’s “Qatar and International Trade” knowledge-sharing session with international guest speakers.
Highlighting that the GCC is a low risk area due to political and fiscal stability, low costs, the strong vision of the ruling families and government, which support economic growth in the region, Mahan Bolourchi, director (risk management, information and claims) at Euler Hermes GCC and Middle East, said, “if you look at the GCC alone, all the major growth sectors are positive.”
The top 10 GCC banks were among the fastest growing globally, recording 16% growth in June 2013 to register total assets of $743bn, according to him.
Petrochemicals capacity in the region is forecast to reach 191.2mn tonnes by 2020 — another major export sector, he said, adding consumer spending will reach $106bn in the next five years, with food remaining the largest segment.
Both Bolourchi and Doha Bank Group CEO R Seetharaman confirmed that Euler Hermes will be supporting Doha Bank’s clients with ready solutions for receivables protection, custom made solutions for companies with larger turnover and preferential pricing for all clients under Doha Bank.
“Qatar is a beacon of sustainable development in the region and the fundamentals of country’s steady growth have been prudent fiscal management, effective risk management and ambitious development goals. These factors are also essential to ensuring protracted sustainability in trade relationships with countries around the world,” Seetharaman said.
According to preliminary figures of the value of exports, re-exports and imports for September 2013, official data suggests that Qatar’s hydrocarbon-based exports were responsible for the international trade balance of goods showing a surplus of QR32.9bn, representing an increase of QR0.3bn (0.9%) compared to September 2012.
Countries such as Japan with 28%, South Korea with 18% and India with 9% were the top export destinations for Qatar; while South Korea with 13% of total imports, followed by the US and China with a share of 10% each, were the largest import trade partners to Qatar at the end of the same period, he said.
Stressing that Qatar is building infrastructure capacity and corporate trade and service platforms to achieve Qatar Vision 2030, he said therefore several European, Middle Eastern and Asian nations and their leading corporate brands are also looking to participate in Qatar’s development.
Conversely, Qatari brands too are seeking to branch out and diversify their asset bases. These entities will all need to work with specialised partners and financial advisers such as Doha Bank to achieve peak success, he said.
Doha Bank operates a representative office network that extends across the UK, Germany, Turkey, Singapore, China, Hong Kong, South Korea, Japan and Australia, with full branches in the UAE and Kuwait.
“This represents tremendous bilateral trade opportunities in key sectors. Qatar’s focus on infrastructure development, education, sport and major service sectors has positioned the country as an important global destination for experts in these fields,” Seetharaman said.
