I attended a talk last week in downtown Washington, DC on MENA and China design and construction opportunities. With respect to the Middle East region, there was substantial talk about Saudi Arabia and Qatar and even some mention of work potentially picking up in the UAE again if I’m not to be mistaken. This was interesting, especially as I had thought construction would likely slow down in the region following the boom years of about 2004-2008. Indeed, $100+ a barrel oil may be here to stay, and contrary to some opinion, many parts of the region are still underdeveloped. Notably, there is demand. The Arab Spring has resulted in a lot of wealth being diverted to save havens in the Gulf and certain jurisdictions like Saudi Arabia have large populations with an insatiable demand. This, along with opportunities in less traditional markets in the region such as Afghanistan, Iraq, Libya (and potentially Syria in the future) may pose as a great buffer for an overall declining trend of construction in the United States in the past 10-12 years.
The above notwithstanding, it is logical to suspect that growth in the region to be much more focused than it was in the middle of the last decade. There is less of a sense of a gold rush, western companies are more informed, and as such, moves into the region by construction companies and related entities will likely be much more focused. Recent disputes in the region have also arguably brought about a more heightened consciousness with respect to ensuring that agreements with local parties are enforceable and to what extent. Also, tighter budgets on both ends should signal a greater need to ascertain clear obligations, given the costliness of not doing so.
Expanding into the region is no easy task. Although opportunities abound, it is clear to enter this market (and others) with accurate information and with adequate legal and business protections.