Historic Changes 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 EUROPEAN (European Union) and the BRIC (Brazil Paris The indian subcontinent China) countries… but have you heard about MENA?
Ok, you ask… the facts and why must i 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 EUROPEAN. 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 Monk 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 Man made fibre Road… where we think of a network of traders with caravans loaded with man made fibre, seasonings, flowers, jewelry, and gold… and trading avenues with the romance of the Indian Sea. From Perth, Australia to Mombassa, Kenya along the shoreline of East Photography equipment with articles along 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 Western side since its days as a link on the old Man made fibre Road.
Examples of this thaw are that the US is sending an ambassador to this country following a four-year absence and the US is eliminating move bans to this country.
The spot is called MENA or the middle East and North Photography equipment. Among its largest economies are Saudi Arabic (where this author had a home base for just 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 in a way that The new Man made fibre Road weaves through Damascus, Riyadh, Dubai, Mumbai, Chennai, Kuala Lumpur, Singapore, and Hong Kong. Along the New Man made fibre Road, key alternative growth strategies add the 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 located 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 Western side and Rediscovering China.
Syria is the country mentioned previously that has a political thaw underway and is the mercantile crossroads of the East and Western side on the old Man made fibre Road.
The largest investor in Syria is the Chinese company, Haier, that makes automatic washers and microwave ranges 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 and beyond shoreline. They are twenty four, 000 hotel beds coming online over the next four years and this will almost double the amount of beds available today. Vacation is up significantly in this country and currently is the reason 13% of the economy.
The spot 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 tight and it is hardest 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 harvest 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 fulfill the being thirsty of all these people as well as the energy, structure, and engineering services to routine, 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, a current edition of the Economist had a cover story on the Arab-speaking world called “Waking from its sleep” with a 14-page special report containing an accumulation articles. Key points in these articles indicate that there’s been 2 decades of political stagnation but there is a nausea under the surface for change.
In the Arab-speaking world, its people are beginning speak out, to strike, and to take to the streets in search of their demands. As more women are educated and as more internet marketers want a say in the state-run economies, the old pattern of the Arab-speaking governments that are tainted, 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 wave will be complete and the tremendous upside potential from trade will grow the spot 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 Western side on the New Man made fibre Road… and the various alternative wealth creating opportunities associated with water, food, structure, energy, and engineering services related to oil and gas.