The Middle East

Competition looks set to continue heating up in the Islamic finance sector, with the latest entrant to the market, Saudi giant Al Rajhi Bank, opening for business in late March. As new players work expand their reach, sharia-compliant financial services will become increasingly accessible for Jordanian customers, while meeting the Basel III capital adequacy and risk-management requirements will remain a top priority for the banks.

Investor confidence in Kuwait’s energy industry should get a welcome fillip from reports that the state-owned oil company is set to increase domestic oil refining capacity by more than 50% over the next five years.

In an effort to meet rising domestic demand and keep the cost of imports to a minimum, Oman is looking to boost its production of natural gas. However, the levels of investment necessary to exploit the Sultanate’s difficult-to-tap reserves, means that margins may be squeezed until gas prices rise – something analysts are already predicting.

With the government and international agencies alike predicting GDP to expand by almost 20% this year, and a budget surplus in the double-digit billions, Qatar’s economy is set to outstrip nearly all others around the world in 2011. Just about the only cloud on the horizon is the return of demand-driven inflation, though even this concern seems likely to dissipate in the face of sustained growth.

The conservative approaches to money management employed by for four Sharjah-based lenders have paid off judging by their year-end financial statements for 2010, which have recently been released.

Trade and diplomacy took centre stage in 2010. In economic terms, it was a year in which Turkey was courted aggressively by both its Western partners and neighbours in the region. The country finished out 2010 with a number of trade agreements either inked or in the works, while the government made much headway in advocating Turkish business interests in its dealings with foreign partners. Meanwhile, Turkey’s main business centre, Istanbul, received a significant publicity boost thanks to its status as the European Capital of Culture for 2010.