Paving the streets with gold and building fortresses in the sand | MEINA at Davos
The Transatlantic Post | Love Letter N°32
Welcome to The Transatlantic Post an editorial on innovation and international growth. With occasional British satire. By Kajal
Reading January news will turn us all into geopolitical junkies. Its dominance continues to overlook brighter stories on economic progress, growth and green innovation especially in MEINA (Middle East, India, Africa).
We will stick to the latter to spare you further reading on the worlds woes. Let’s start with Davos. No doubt many of you will have had an avalanche of debriefs, predictions and enviable Swiss mountain backdrops.
Even for the most economically ravenous amongst us, there is only so many times you can hear that unique insight on AI being as transformative as previous industrial revolutions. Of course AI dominated the discourse but there were some more interesting and optimistic geo-musical-chairs at play.
From Swiss mountains to new Silk roads……
For the historians amongst you, you will know that the Silk Road was a vast trade network between Europe, Asia and North Africa via land and sea routes. Its name originated from Chinese silk, a commodity in high demand that merchants transported and traded across these networks.
The new silk roads are being redrawn and reconstructed at pace. As I noted in the previous edition of the Post, the increasing trade, in particular between the Gulf and Asia, is significant.
By 2026, Gulf trade with Emerging Asia is expected to exceed that with advanced economies, and by 2030 will be worth US$757bn, almost doubling the value in 2021. Reading the lines and in between at Davos, the influence of the associated economic shifts were clear.
We did a quick analysis of the DAVOS partner list ~1/3 were headquartered or had significant presence in India or the Middle East. There were over 200 livestream sessions of which the MEINA focused panels tended to have a set of optimistic titles compared to its European counterparts with overtures of economic defence strategies.
Looking at the IMF January 2024 economic outlook you can see why. If you are not already thinking about strategic growth in these markets, this picture might spur you into action.
A recent FT article “The world is better seen from Dubai than from Davos” put the Eastward economic shifts more bluntly. Take a look at our top 5 panel picks with their nutshell descriptions and you can make up your own minds on how far the economic centers are moving East.
- Gulf Economies: All in — After a slowdown, 2024 is expected to be a year of higher economic growth in the Gulf. How can these governments continue to transform their economies by making them more competitive, digital and green, without crowding out the private sector?
- TradeTech’s Trillion-Dollar Promise — Technology is revolutionizing global commerce and investment. Digitalizing the trade ecosystem holds the potential to increase trade by nearly $9 trillion by 2026 within the G7 alone.
- Can India Seize its moment? — India stands to benefit from ongoing efforts by Western economies to diversify supply chains and strengthen partnerships among democracies. How can India overcome structural challenges and emerge as one of the world’s pre-eminent economies while sustaining its current growth?
- Bold Steps for a Sustainable MENA — Major economies in the Middle East and North Africa are investing heavily in energy diversification. Given the region’s aspirations to meet climate goals and its potential in becoming a clean energy export hub, how can it realize its sustainability agenda?
- The global Cooperation Barometer — From climate action to trade and global security, the contours of global cooperation are dynamic. This session explores the World Economic Forum and McKinsey & Company’s new Global Cooperation Barometer measuring the state of global cooperation.
Paving the streets with Gold….
For those of you who prefer a more cultural real-time lens of the emerging world economies versus panels of economists, you might already be watching Dubai Hustle. Or the more recent BBC 2 documentary — Streets of Gold: Mumbai. I watched the latter 3 part series out of pure curiosity on how the BBC portrays the new India.
If you can persevere past the crass displays of wealth and general braggery especially from the founder of Shaadi.com (India’s most successful matrimonial website ) — it is mostly a story of ambition, resilience and entrepreneurship that powers India.
I should know on two counts. Firstly because I grew up in a family of Indian immigrant entrepreneurs and saw those inherent traits first-hand. Secondly, Shaadi infiltrated the global Indian parents diaspora like nothing else — I was “highly encouraged” to stick my profile on Shaadi. I impolitely declined.
Sudhir Sethi, founder and chairman of India-based Chiratae Ventures discussed India’s entrepreneurial ecosystem and some of their research on the evolution of start-ups and investment in India were unsurprising but staggering nonetheless.
India is poised to absorb $450 billion worth of capital over the next 5 years with an increasing share, 15% to 40%, of that being home grown Indian capital within the next decade.
As with the trend in the Gulf, Indian funds share of international investment into and acquisitions of European companies may also increase. That roadshow to London and Silicon Valley will likely include a good stint to Bengaluru in the not too distant future.
Building Fortresses in the Sand….
A recent Sifted article cited the trends towards European founders increasingly turning to the GCC countries for capital. According to their report, from 2018 to 2023 five times more was invested into European start-ups by Gulf funds growing from $627million to $3bn.
The most active investors include Mubadala Capital, Aramco Ventures and Qatar Investment Authority. And many have invested in household names like Klarna, Spotify and Checkout.
Don’t be fooled into thinking that this is an easy path to capital. I worked with a number of companies last year looking to raise money in the Middle East. The level of proactive commitment and relationship building that prefaced a successful investment from leading GCC funds was often significantly underestimated.
What are the implications of the broadening and diversification of capital? For one, originating capital from the GCC and India also provides insight and commercial opportunities to those markets. To my point above, all the more valuable because they can be challenging to navigate for the uninitiated and for those without networks.
For all the noisy narratives of failing globalisation, protectionism and nationalism, the increasing cross-border investments is a bright spot. It brings with it diffusion of knowledge and increased innovation which are critical for solving global challenges especially in climate change and healthcare. The topics of focus in upcoming Posts.
Until then, thanks to all those I heard from after the last Post. I welcome hearing from you for feedback and input into future editions — do get in touch.
“We should strive to keep our economies more interconnected. Multilateral cooperation remains the best approach to address global challenges” IMF
Sincerely, yours, Kajal
t: @kajalnyclon | w: transatlanticpost.com
References and Further reading
- World Economic Forum Programme Livestreams 2024, WEF
- Middle East Pivot to Asia, Asia House — HSBC
- World Economic Outlook Update 2024 IMF
- Gulf money is flooding into European start-ups — these are the most active investors Sifted
About the Transatlantic Post
An editorial on innovation and international growth. With occasional British satire. Written and edited by Kajal Sanghrajka, founder and director of Growth Hub Global For previous editions go to the Transatlantic Post website. Subscribe here
