Middle East

2021 RankingCountry
16United Arab Emirates
25Qatar
26Kuwait
30Saudi Arabia
35Oman
44Turkey
50Iran

Economic diversification, large sovereign wealth funds and long-term visions make the Middle East one of the most exciting regions for infrastructure development.

As the priority given to transitioning away from fossil fuels increases in many parts of the world, the economic imperative for the oil-and-gas-dependent economies in the region to diversify increases. And young, tech-savvy populations mean that digitalisation and creation of job opportunities are high priorities for governments in the region.

Saudi Arabia is the one to watch

Saudi Arabia is a main focal point of infrastructure investment in the region. For one thing, the country is by far the largest of the six Gulf Cooperation Council (GCC) members. The Kingdom’s 35 million inhabitants comprise 60 per cent of the GCC’s population and its economy contributes half the group’s output.

For another, Saudi Arabia’s giga-projects provide a substantial pipeline of work. The developer of the 28,000 square kilometre Red Sea Project tourist resort awarded USD 4bn dollars of construction contracts last year alone, while Neom, the smart-city project, is backed by USD 500bn of public funds. Although projects such as Neom are the obvious flag-bearers for digitalisation, Saudi Arabia is also continuing to strengthen its digital infrastructure by deploying 5G networks and investing in 6,500 new towers.

Digital leap-froggers

More broadly, though, the emergence of numerous ambitious greenfield projects and a ready supply of land for development in the region, will allow for digital infrastructure to be embedded in society by design and by default, rather than retrofitted into ageing pre-digital infrastructure. Countries are making the move to build on international best practice and leverage opportunities to transform, such as with the UAE’s Smart Dubai 2021 project. Investment in logistics and transport is also expected across the region (see our case study) as well as in renewable energy and agri-tech. Digital technologies will be at the heart of all these developments.

The oil and gas sector will remain a substantial part of the Gulf economy for many years yet and will continue to offer investment opportunities. However, the transition towards renewables is also happening within the region. Saudi Arabia, which has some of the lowest cost solar schemes in the world, aims to generate half its electricity from gas and renewables by 2030.

Ease of doing business limits region’s rankings

While investment opportunities in the region abound, the business environment can be challenging. The tendering process can be protracted in Kuwait, while a diplomatic three-and-a-half-year fallout between Qatar and its neighbours that resulted in sanctions and border closures only came to an end at the start of 2021. Protectionism is a factor to consider in Saudi Arabia, with entities wishing to work with the government required to be based in the country. And, as part of the Kingdom’s ‘Saudi-isation’ policy, project bids must specify what element of employment generated will be for local people. Issues around the ease with which investment in the region can be conducted are not new and are accepted by many as part of the business environment. However, without them the region would score more highly in our rankings.

Publication
Click here to view the interactive country highlights for Middle East
Download
PDF 274 kB

Authors

David Moore
David Moore
Managing Partner
UAE
Abu Dhabi
Amir Kordvani
Amir Kordvani
Partner
Dubai

"Those funds holding a diversified portfolio of infrastructure assets have been able to smooth out the decline and get through the crisis..”