Waterloo, Canada - August 16, 2007 - Increasing prosperity in the Middle East from an abundance of petrodollars is opening up lucrative business opportunities for Canada and other exporters, concludes a working paper released this month by CIGI (Centre for International Governance Innovation). Recent analysis from CIGI shows that previous partnerships between Canada and the Middle East are scarce-among them, a free trade agreement with Israel-but closer cooperation could generate worthwhile returns.
The paper, entitled "Canada's Economic Interests in the Middle East," authored by CIGI fellow and University of Waterloo professor, Bessma Momani, and CIGI senior researcher Agata Antkiewicz, calls on the Canadian government to forge stronger economic ties in the Middle East. Efforts on behalf of the prime minister and senior government officials to increase both formal and informal collaboration would likely bring substantially higher levels of business activity particularly in the Gulf States, conclude the authors.
At present, the Gulf Cooperation Council (GCC)-which comprises the Persian Gulf states of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) - is Canada's fifteenth export destination, outranking Brazil and Russia. Despite this ranking, as Momani and Antkiewicz point out, current trade with the Middle East represents only one percent of Canadian imports and exports. A free trade agreement with an organization such as the GCC would be a welcomed signal for Canadian foreign investment and could at least double or triple the number of exports to the region, which currently include vehicles, aircraft products, cereals, wood, paper, and others.
Middle Eastern countries now account for some of the fastest growing economies in the world, with foreign exchange revenues for the region surpassing those of China. Leading trade partners with the region, including Australia, are enjoying high rates of return and a trade surplus with the Middle East as a result of fostering strong trade ties. Unspent petrodollars need to be recycled or spent, the authors explain, and with diplomacy on the part of government leaders and brokering by trade officials, Canada-like Australia- could prove a likely and safe destination for Gulf investment.
The paper is available online at www.cigionline.org/publications