By Mishal Kanoo
From the opening up of Iran and volatile oil prices to a potential shift right in European politics and the US presidential race, 2016 is quite uncertain.
The hardest thing any CEO must do is look into their crystal ball and predict what might come to pass in the near future. On this basis, we do our future plans hoping that we will get most of it right in the immediate future and some of it right in the long-term.
The problem with this is that we have to rely on old data, which has no effect on the future as it is over, and we must also rely on the accuracy of the information that we have at hand to guess what might be in store. This, too, is problematic as what we usually have at hand is but the tip of the information iceberg. Yet, based on this limited information leaders must move companies forward.
That said, here are what I believe will be significant issues that we will face both locally and - to a certain degree - internationally.
Oil - that black magic temptress. Let me be the first to make a bold prediction. The only way is up. Why you ask? Simple. The world economies are growing, not contracting. The populations are growing, not contracting. More importantly, somebody has bought a lot of oil futures and they intend to reap serious rewards. It is a fool who stands in front of a tsunami and does not expect to get wet.
I also believe France will lead the way to the right. Even though the French will be having their presidential elections in 2017, it is clear that all the madness that happened this year in Paris will push the extremists to the limelight and, for that, I am sure Marine Le Pen must be going to the mosques and praying for yet another day of madness to ensure that she is the winner. Front National: 1 Sanity in France: 0. If this comes to pass, watch the rest of Europe move in that direction. The effect of France’s move to the right will be felt in places like Holland and Belgium but soon other countries will start the move in that direction as well. Hmm! A holiday in Malaysia looks good next year.
Fiscal spending in the region will also seriously slow down. With the price of oil being where it is these days, the chances are that regional governments will curtail their spending habits. Unfortunately, the after effect of this is that the money supply in the region will shrink and with that so will lending. Slow lending, slow growth; it’s as simple as that. We are a region that relies on government spending. I hope to God I am wrong on this.
Given the political upheaval that is currently taking place between the east and west of the Gulf, from a business prospective, Iran is the only bright spot for 2016. If the deal with the US goes through, Iran will have a financial incentive to stop exporting war to the region, fix its infrastructure and boost regional growth in a big way. Currently, the UAE, and specifically Dubai, is poised to be the gateway for money coming to and from Iran for the projects that will start to happen there. No company will want to invest big time in Iran until they are sure that the sanctions are well and truly dead. This will depend on the US election and who wins it. So, hopefully, we won’t have a nutcase in the White House this time next year. Basically, I hope the one who looks the most presidential wins. Otherwise, if you are going to remove the two most reasonable voices in the presidential race - Bernie Sanders and Rand Paul - they are all scary to anyone living outside of Congress and the White House.
Syria will also continue being a sad development, although there might be some regional relief with Yemen as Ali Abdullah Saleh, the former president now attempting to overthrow the government, realises that he cannot win and must settle.
Mishal Kanoo, Chairman (UAE and Oman) of Kanoo Group.
* In the original verison of this article Mishal Kanoo was mistakenly listed as the deputy chairman of Kanoo Group.