Market insights: Monitoring the business impacts of COVID-19 on the Middle East

The main markets of the Middle East, commonly called the Gulf Cooperation Council (GCC), including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates (UAE), have reacted quickly to the pandemic with the interruption of all flights, airport closures, lockdowns and strict curfews. 

These countries have also imposed quarantines for travellers (citizens and expatriates), conducted one of the largest campaigns of testing (UAE ranks third in the world per million inhabitants tested and intends to test all its residents) and launched tests of innovative new medical treatments and screenings of the disease. 

Death rates have been low compared to other parts of the world, like Europe and North America, and GCC countries are now starting to ease restrictions, but with very clear and strong rules regarding social distancing and protection.

The Middle East, especially the GCC, is facing a double sector crisis: 

1. Like many other countries, its impacted sectors include tourism and hospitality, retail, transportation, industrial activity and construction. Many projects are now on hold and companies have been forced to lay off workers who need to leave their countries of residence as soon as COVID-19 travel restrictions are lifted. 
2. Hit even harder by the pandemic is the oil and gas sector, which faces new hurdles due to plummeting barrel prices and an overcapacity of production concomitant to a collapsing global demand. This specific crisis could become a game-changer in the region, but it’s still too soon to understand what will happen in the future.

In the Middle East, personal relationships are extremely important to conducting business and winning contracts. With restrictions in place—no physical meetings and no flights available to visit the markets—Canadian companies must put most of their business development on hold and as mentioned above, many important projects in the region are frozen until further notice. But there are also some new opportunities: the local governments have clearly disclosed their intention to handle other potential waves of the pandemic by focusing on the health sector. New hospital construction projects have already been announced with plans to purchase the related material equipment. As well, food security is on their radar since almost all food is imported from different parts of the planet.

Our network shows resilience and patience, understanding that a new normal will land and they’ll need to adapt. We still get requests and questions about business opportunities for this region, which shows Canadian companies are thinking ahead and beyond the present crisis.

We’re staying in touch with our customers, of course, but also with their buyers—existing or potential. For example, we informed the main players in the market that EDC has deployed the EDC Business Credit Availability Program (BCAP) Guarantee to help Canadian companies and their suppliers. In this way, we can reassure the local buyers they can still operate and sign new contracts with our customers without worrying about the strength of their supply chain partners from Canada. We also continue to work closely with the local Canadian diplomatic missions’ trade services to gather useful information for our clients such as future projects and contracts, in preparation for getting back to business as usual.