Historic Adjusts Are Underway on the New Silk Road Creating Investment Opportunities
You probably have heard of NAFTA (North America Free Trade Association), OPEC (Organization of Petroleum Conveying Countires), the EU (European Union) and the BRIC (Brazil Paris The indian subcontinent China) countries… but have you heard about MENA?
Ok, you ask… determining baby gender and why what’s care?
When conventional wisdom is not working any more, we start to use alternative investment strategies and you should consider a very important region that collectively Silk Road economic belt countries has a bigger economy than South america, Paris, and The indian subcontinent… 3 out of the 4 BRIC countries. And, in terms of growth, this region is growing faster than any of these countries.
Population wise, this region is bigger than the usa and is approximately equal in population to the EU. In addition, this region has an exploding population (which is good from an engine of growth perspective… reference a key theme in recent presentation from Stuart Varney of Fox News at WizeFEST 2009, a conference this author recently attended).
This region is in the center of a part of the world along the old A silk duvet Road… where we think of a network of traders with caravans loaded with a silk duvet, seasonings, flowers, jewelry, and gold… and trading routes with the romance of the Indian Underwater. From Perth, Australia to Mombassa, Kenya along the coast of East Africa with articles up and down the Persian Beach and the Red Sea.
There is a political thaw underway in a country in this region that has been the mercantile crossroads between East and To the west since its days as a link on the old A silk duvet Road.
Examples of this thaw are that the US is sending an ambassador to this country from four-year absence and the US is easing export bans to this country.
The region is called MENA or the middle East and North Africa. Among its largest economies are Saudi Arabic (where this author had a home base for two years) and the U . s . Arab-speaking Emirates (which includes the go-go city of Dubai). As a result, MENA holds 60% of the world’s proven oil supplies and nearly half of its gas.
Much has changed in this region over the years and its reach has expanded such that The new A silk duvet Road weaves through Damascus, Riyadh, Dubai, Mumbai, Chennai, Kuala Lumpur, Singapore, and Hong Kong. Along the New A silk duvet Road, key alternative growth strategies add shortage of water and food, structure needs, energy (in terms of drilling, putting, and distribution) and engineering services… and finally, it gives growth not dependent on US trade (which is expected to be quite anemic).
In 2000, China’s exports to the Arab-speaking world arrived at just $6B. Last year, China’s exports to the Arab-speaking world ($48B) nearly matched America’s exports to the Arab-speaking world ($50B). Earlier this year, China finally passed the usa to become the Arab-speaking world’s largest trading partner… mentioning how a rising Arab-speaking world is turning away from the To the west and Rediscovering China.
Syria is the country mentioned previously that has a political thaw underway and is the mercantile crossroads of the East and To the west on the old A silk duvet Road.
The largest investor in Syria is the Chinese company, Haier, that makes automatic washers and microwave ovens in the country. Another Chinese company recently completed a $180M hydroelectric plant. On the drawing board, there are big real estate projects, including resorts on the Syrian Mediterranean coast. They are seventy two, 000 hotel beds coming online over the next four years and this will almost double the amount of beds that you can buy. Tourism is up significantly in this country and currently accounts for 13% of the economy.
The region advantages of expanded trade with China and all of those other Asian countries that are in search of the region’s oil.
The most interesting thing about this growth is that it is happening in a part of the world where water is scarce and it is roughest to grow food. In Kuwait, one of the countries in the region, annual water consumption is 23 times the rainfall. Counties in the region scan 60% of their food and are phasing out scalp production in order to conserve water.
Ironically, many of the countries in the MENA block are investing in farmland overseas with major purchases of farmland in Indonesia, the Sudan, and Pakistan.
One of the key takeaways is that alternative investment opportunities in a growth region like MENA include food and water necessary to feed and meet the thirst of all these people as well as the energy, structure, and engineering services to drill, pump, and distribute oil and gas.
Your author lived and worked in the region early in his career and was always impressed with the upside potential in the region once political barriers could be overcome.
In addition, an up to date edition of the Economist had a cover story on the Arab-speaking world titled “Waking from its sleep” with a 14-page special report containing a collection of articles. Key points in these articles indicate that there have been two decades of political stagnation but there is a throwing up under the surface for change.
In the Arab-speaking world, its people are commencing to speak out, to strike, and to take to the streets in search of their demands. As more women are educated and as more business people want a say in the state-run economies, the old pattern of the Arab-speaking governments that are dodgy, opaque, and authoritarian, are changing.
The democratic and capitalistic movements underway include education, ceiling, and independent institutions such as judiciary and free press.
Once the last failed dictatorship is voted out, the quiet revolution will be complete and the tremendous upside potential from trade will grow the region even faster under the more liberalized economic governments.
I trust this article has introduced you to an emerging economic region… a crossroads where East meets To the west on the New A silk duvet Road… and the various alternative wealth creating opportunities associated with water, food, structure, energy, and engineering services related to oil and gas.