‘Closer Gulf-Asia ties to support markets, economic rebalancing’

Doha Bank hosted a conference on developing economic and trade relationships between Asian economic powerhouses such as China and India and countries in the GCC region on Wednesday in Kuwait.Titled “Synergetic Opportunities Between Emerging Asia and the GCC”, the conference, which brought together regional and international experts from such diverse fields as banking, finance, investment, and trade consulting, also discussed emerging trends in the banking sector.Doha Bank Group CEO Dr R Seetharaman emphasised how closer financial integration between the GCC (Gulf Co-operation Council) and Asia can benefit both markets and foster economic rebalancing. “Over the last two decades, the GCC states have experienced rapid economic growth, driven by oil and gas revenues and booming financial services and tourism sectors. This period also saw the region emerging as a major investment destination for infrastructure projects. “To drive the next stage of growth, the GCC should look to integrate more closely with the Asian financial system to boost resilience and enhance its economic cooperation with countries such as China and India, which have been fuelling the global growth engine,” Seetharaman said.He said China, Hong Kong, Singapore, and India had attracted significant foreign direct investment in 2014, adding that India has consistently been among the top 10 trading partners of Kuwait. Kuwaiti investments in India are in excess of $2.5bn. India’s growth is expected to be 8% to 8.5% in FY 2016 and the consumer price inflation was at 5.1% in January 2015, Seetharaman said.“The current account deficit for FY 2015 is expected to be below 1.3% of GDP and the fiscal deficit target of 4.1% of GDP for FY 2015 will be achieved. The surge in growth in Indian economy will lead to increased trade and investments between India and GCC,” he added.Carli Renzi, director, industry insights, financial institutions at ANZ, gave a presentation on the Basel III banking reforms and their impact on the banking sector in Asia and the Middle East. “Basel III increases the levels of capital and liquidity that banks are required to hold to meet the minimum standards. The implementation of Basel III across countries within the Middle East is divergent, although predominantly the rules relating to capital are more stringent than the minimum standards proposed by the Basel Committee on Banking Supervision,” said Renzi. Providing an insight into the growing role of China’s renminbi (RMB), JPMorgan Chase executive director for Middle East and North Africa Amr el-Haddad provided statistical data to illustrate the evolution of the RMB as a global currency. Explaining why overseas corporations are increasingly moving to RMB invoicing, el-Haddad noted that companies looking to invest into Mainland China or those buying from Chinese suppliers, as well as companies with substantial two-way intercompany flows with China, stood to benefit greatly from a move to RMB.Future Trends Group chairman Dr Farzam Kamalabadi spoke on the factors driving China’s status as the world’s fastest growing major economy.“In the last 30 years, China has transformed itself from a command economy inhospitable to overseas investors to an emerging free enterprise market with proper macro-management mechanisms that attract the largest share of global foreign direct investment. The country is now opening up more and more sectors for foreign investors, which were earlier open only for domestic investors,” he said.