Unlike the first famous oil boom, which portrayed an unplanned spending spree that constituted their investing in banks, asset management and wealth management, the Mid-East has made a very strategic move into local development this time. They have imported the best engineers and builders, who willingly bowed to the sheiks wishes and started a glorious real estate development agenda in the region. The growth does not limit itself to Dubai, although Dubai was the first to have the world's largest building, the tallest structure and now the heaven reincarnated, Jumeriah, and its following projects. You name it, they got it. After all, the International Monetary Fund (IMF) expects oil and gas exports from the Middle East to bring in a whopping U.S. $940 billion to the region this year. Gulf governments are now spilling those proceeds - an estimated U.S. $225 billion - into infrastructure, finance and the social sector. The post oil era has begun.
Anyone today can buy into this phenomenal real estate boom. "This is going to be the future as you can see for yourself," says a top-ranking banking official. He further adds, referring to Dubai and Abu Dhabi while elusively avoiding any mention of Saudi Arabia, "They are developing right now. It is at this moment that everyone is investing because the returns are going to be sizeable and it is a wise investment anyway." Another banker just said beg, borrow or steal, but invest in the Middle East.
As for Saudi Arabia, around whose central economy the whole Middle East revolves, it is planning high valued ventures, too. Work has already begun with the projects underway to constructing four new cities in the Kingdom to cater to the growing population and some ambitious plans towards attracting foreign investments. The first of these multi-billion dollar cities is the 'King Abdullah Economic City' duly named after His Highness. All four cities are supposed to be completed by 2020.
At the moment, the Middle Easterners are spending their dollars wisely and appreciating the influx of foreigners for the first time. There are many questions that remain unasked and unanswered. The risk factor always tags along with every project ever started internationally. While the U.S. stands to gain significantly by pocketing major contracts in the region, there can be another scenario too which will empower the locals of the region to an unbelievable extent. As global interest rates rise with the revival of Japan and Europe, global competition for capital will heat up and the well-heeled investors of the Middle East will become pivotal players in future deals. Oil money's role, then, could become stratospherically important. Still, Middle East means money right now.
