It’s been my good fortune over the past 4 years to represent the Association of Corporate Treasurers (ACT) at the GTR MENA conference, held in the familiar surroundings of Dubai. It’s an excellent opportunity to take the temperature of trade, not just in the Gulf region, but from a wider global position.
The ACT stake in the event is to offer trade finance professionals a dedicated treasury workshop which this year focused on Islamic finance, cash and liquidity challenges and how treasurers manage technology in treasury and across their organisations. Shout-outs then to treasurers from OneFoods, GE, Webcor, National Oilwell Varco and Majid Al Futtaim for sharing their experience and expertise with the audience.
Regionally the principles of treasury promoted by the ACT are being adopted in a growing number of organisations, both non-financial and public sector. Indeed a number of the regions largest banks are seeing the value in developing the treasury skills of their customer-facing staff.
On the trade front, some nervousness is clear. The possible impact of a US/China trade war could have serious implications, although the Chinese OBOR strategy is still seen as positive for the region, especially Dubai as a logistics and trans-shipment hub. The oil price (and LNG market) remain critical for exporters and some national budgets and likewise for MENA energy importers (e.g. Egypt).
Moving the region away from oil extraction towards a diverse economy (education, health, tourism) and especially digital advances is a key focus to drive productivity and sustainable growth. Dubai metro, like London’s DLR is driver-less: driver-less delivery vehicles are next….
There is an increasing role for export credit agencies (ECAs) from OECD exporters in funding major infrastructure projects (e.g. in Iraq) as well as energy needs, both conventional and ‘green’ (solar especially).
Trade tech is also rising to aid efficiencies, combat fraud and financial crime and it’s clear that tech and bank collaboration has replaced the talk of ‘disruption’. Central banks and governments are also fostering change up to and including nascent bank-sponsored ‘private’ blockchains, essential in warehousing and logistics fraud and public sector administration. This is aided by tech developments in the slightly sleepy word of trade credit insurance. No stone left unturned!
Lastly a session on the trade finance asset market caught my eye. The challenge – and prize – is to widen the investor base for trade finance assets (short and longer term) as bank regulation bites on lending liquidity. An added area for treasurers to hone their investor relations skills?