GCC

Failure of Russia-Arab League Summit: Cultural Divergences and Orientations on Brokering Peace Partnerships

Russia’s foreign policy framework places emphasis on adopting a plurality of approaches, including serious dialogues through conventional diplomacy, to all kinds of disputes and has taken concrete steps to coordinate the resolution of those in the Arab world. After lengthy preparations toward hosting the “Russia-Arab world” summit, primarily aimed at discussing regional security and energy relations and showcasing Moscow’s enduring influence in the Middle East, the Kremlin abruptly put off the scheduled gathering, citing contradictory positions and extremely low interest among Arab leaders, including those in North Africa.

The Russia-Arab Summit was supposed to open and be decisive for advancing the agreements on the Gaza Strip, agreements that have been energetically promoted by Egypt and Qatar, considered friends of Russia. It was also meant to address aspects of the Palestinian issue, to stop the bloodshed as soon as possible, and to offer possible pathways for the grave humanitarian issues faced by the people.

Notably, the overwhelming majority in the Arab world showed little interest in Russia being the organizer. Later, considering the apathy towards participation, “President Vladimir Putin reached an understanding with Iraqi Prime Minister Mohammed Al Sudani and the Secretary-General of the League of Arab States to postpone the summit,” Foreign Minister Sergey Lavrov told Arab media reporters on October 13, during his media briefing.

“The final documents are practically ready, so we will still have the opportunity to get together, back for the summit,” Lavrov reassured. The relations with Arab countries are steadily progressing. The League of Arab States has demonstrated its value and is consolidating its role as a key pillar of the emerging multipolar world, authoritatively and actively participating in global affairs—in economics, finance, and increasingly contributing to the resolution of regional and, more broadly, political issues.

There is a noticeable sustained growth in trade turnover with the League’s member states, which has now exceeded $34 billion. Whilst this figure is modest compared to the trade volumes the United States and the People’s Republic of China maintain with the Arab world, it is several times greater than the trade turnover recorded two decades ago. That lapses, however—the growth dynamics are still positive. Arab partners are also showing keen interest in agricultural cooperation, including supplies of Russian food products and fertilizer.

Furthermore, in the sphere of cultural cooperation, Russia has traditionally maintained strong educational ties with many Arab states, a practice dating back to the Soviet era. Tourism is growing bilaterally. The fundamental trend remains the development of constructive relations grounded in mutual respect, the accommodation of each other’s interests, and the consolidation of a stable balance between them.

According to various reports monitored by Modern Diplomacy, the Kremlin was forced to shelve the gathering after only a handful of leaders, including Syria’s president, Ahmed al-Sharaa, and the head of the Arab League, Ahmed Aboul Gheit, confirmed their attendance. For nearly a decade, the Middle East served as the stage for Putin’s long-sought return to global prominence. But analysts say the Arab majority expressed little interest in participating in deliberations, geopolitics, and conflict settlement with Moscow.

Nevertheless, an aide to the president of Russia, Yury Ushakov, in mid-October explicitly explained that “naturally, the Russian side outlined its principled position in favor of a comprehensive Middle East settlement on a generally recognized international legal basis that would ensure lasting peace for all the peoples in that region.”

In particular, Ushakov noted that Vladimir Putin provided a detailed assessment of the current situation, stressing Russia’s interest in achieving a peaceful resolution through political and diplomatic methods in the region and other similar conflicts around the world. In this context, Putin congratulated Donald Trump on his successful efforts to normalize the situation in the Gaza Strip. The US president’s peace work has been duly appreciated in the Middle East, in the United States itself, and in most countries around the world.

In several frank exchanges of views, experts noted the essential political developments in the Middle East and stressed the growing significance of the necessity for establishing peace. “But Russia’s diplomatic role in the Middle East has declined as a result of the Ukraine war,” said Hanna Notte, a Berlin-based expert on Russian foreign policy. “When it comes to all the big developments, the major players in the region don’t look towards Moscow anymore.”

But, the fact remains for geopolitical reasons, the primary objectives and challenges, that the situation has been very difficult and the future trends are uncertain in the region—the Middle East and North Africa. Foreign Minister Sergey Lavrov, meeting with his Moroccan counterpart Nasser Bourita, also acknowledged Moscow’s readiness to work together with other interested countries to help resolve the issues facing the Middle East and North Africa.

“This certainly envisages continued cooperation as part of Russia’s interaction with the Arab League,” according to Lavrov. With Israel and Palestine, Russia hoped the agreements on Gaza reached through the mediation of Egypt, Qatar, the United States, and Turkey will be strictly and fully adhered to in every context and in the logically established international legal framework. 

On September 29, the White House released US President Donald Trump’s comprehensive plan to resolve the situation in the Gaza Strip. The 20-point document includes, among other measures, the establishment of temporary external administration in the Palestinian enclave and the deployment of international stabilization forces there. On October 9, Trump announced that Israeli and Hamas representatives had agreed on the first step of the peace plan after negotiations. According to Trump, the agreement included the release of all hostages and the withdrawal of Israeli troops to an agreed-upon line in Gaza.

Despite years of cultivating ties with the Arab countries, Putin called off, on 10th October, the Russia-Arab world summit, a clear sign of Russia’s dwindling influence in the Middle East. Notwithstanding that, Russia has been jostling to sustain its traditional relations across Central Asia and the Caucasus, and also with the former Soviet republics—including Kazakhstan, Armenia, and Azerbaijan.

Substantive steps have been taken on Gaza, for instance, during the summit held in Sharm el-Sheikh, Egypt, on October 13, and hopefully, the agreements on Gaza, reached with the mediation of Egypt, Qatar, the United States, and Türkiye, will be strictly and fully implemented. Key priorities include ensuring the unhindered delivery of humanitarian aid to all those in need, creating the necessary conditions for the return of displaced persons, and addressing the comprehensive destruction of the enclave’s civilian infrastructure. 

The UN Security Council and General Assembly resolutions can additionally bring a long-awaited and lasting peace to all the peoples of the Middle East—an outcome in which we are deeply invested, achieving long-term stabilization in the Palestinian-Israeli conflict zone and the wider Middle East.

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Qatar holds Arab-Islamic summit in Doha to agree response to Israeli strike | Tamim bin Hamad Al Thani

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Arab and Islamic foreign ministers are gathering in Doha after Israel’s unprecedented missile strikes on Qatar that killed five Hamas members and a Qatari officer. The summit aims to formulate a collective regional response, with leaders warning Israel’s attack crossed ‘all red lines’, as Al Jazeera’s Resul Serdar explains.

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The GCC Welcomes Wellness Tourism

High-end wellness resorts, clinics, and spas are part of ambitious national development programs in Saudi Arabia and its neighbors.

According to the medical journal The Lancet, the Gulf Cooperation Council countries, along with the rest of the Middle East and North Africa, will lead the world in youth obesity by 2050. The GCC region would not seem an obvious candidate to lead a global drive in wellness tourism, then. Right?

Think again. The GCC wellness tourism market is set to grow at a compound annual growth rate (CAGR) of around 17%, reaching $1.4 trillion by 2027, according to projections by the Global Wellness Institute (GWI), a Miami-based nonprofit. The Middle East, including the GCC, accounts for only about 2% of today’s booming global market, which is expected to surpass $1 trillion this year, but it is the fastest growing region for wellness tourism spending, the GWI calculates.

GCC governments see wellness as a good fit because it brings together two fields they are betting on for fast growth: tourism, and biotechnology, pharmaceuticals, and medical innovation. On the tourism side, they are already building several large-scale projects, including Saudi Arabia’s AlUla, its Red Sea project; Diriyah, Qiddiya, and NEOM. Oman, Qatar, and the United Arab Emirates are all pursuing similarly ambitious initiatives.

Vivek Madan
Vivek Madan, partner, Strategy & Middle East, PwC

While not all related to wellness, over 600 hotel projects with 140,000-plus rooms were under development in the Middle East in early 2024, according to “The Future of Wellness: 2025 Trends,” a reported published recently by the Global Wellness Summit (GWS), a sister company of the GWI.

Ambitious national development programs launched in the last decade, such as Saudi Arabia’s Vision 2030, the UAE’s Vision 2031, and Qatar’s National Vision 2030, are driving the stunning numbers, experts say. Designed to reduce dependence on oil and gas and encourage economic diversification, these programs help channel investment into target sectors.

Priorities vary, but most include tourism, health care, sports, and cultural heritage.

“Tourism has become a central pillar in national diversification agendas, particularly in countries like Saudi Arabia, the UAE, and Qatar,” says Vivek Madan, partner, Strategy & Middle East, part of PwC’s global strategy consulting business. “These governments are investing heavily in infrastructure and destination branding to reduce reliance on hydrocarbons and unlock long-term, sustainable economic growth.”

Before its diversification drive kicked off, Saudia Arabia was already receiving considerable inflows of religious and business travelers.

“You have an ecosystem in place” that includes international operators and a talent pool, says Oussama El Kadiri, head of Hospitality, Tourism, and Leisure Advisory for the MENA region at Knight Frank, a London-based global real estate consultancy. “It’s low-hanging fruit to attract additional players to the game and open the country to the leisure part. It seemed like the immediate path towards diversification.”

The GWS report notes, “Saudi Arabia’s wellness market alone is valued at $19.8 billion, with wellness tourism growing at an annual rate of 66%.”

Wellness As Import Substitution

The wellness travel market is increasingly split into two distinct segments, albeit with some cross-pollination. “Softcare” tends to be less expensive, simpler and slower, according to GWS. Think nutrition programs, alternative therapies, meditation, fitness classes, health assessments, and stress management programs. “Hardcare” means high-end, high-tech medicine, such as biohacking and longevity clinics. Most GCC countries are investing in both.

In addition to attracting foreign visitors, state-of-the-art centers are also designed to cater to high-end locals who would previously have traveled abroad for high-quality treatment: the health and wellness industry as import substitution.

“People from the Middle East like to go to health and wellness clinics in Switzerland and Germany,” observes Corina Goetz, founder and CEO of Star-CaT, a London-based business consultancy specializing in the region. “Of course, it makes sense to partner up [with foreign investors] so you can keep the money in the country.”

Oussama El Kadiri
Oussama El Kadiri, head of Hospitality, Tourism, and Leisure Advisory for the MENA region at Knight Frank

The range of projects on the softcare side is varied, reflecting its ambitions.

SHA Emirates will open next year as an outpost of the Spanish wellness clinic, the GWS report notes. “Billing itself as the world’s first ‘healthy living island,’” the resort will include 100 residences and combine “clinical care with mindful living.”

Saudi Arabia’s Red Sea Project has captured the imagination of locals and foreigners alike, thanks in part to promotional social media posts by the Portuguese footballer Cristiano Ronaldo, made during a break from representing the local side, Al-Nassr FC. Tourism boosters “actually created a whole program around him,” says Goetz. “You can do the Ronaldo experience at the Red Sea, and you can do exactly what he did.”

The development, which Madan says, “integrates wellness into ultra-luxury resorts like Desert Rock and AMAALA,” spans 28,000 square kilometers, encompasses over 90 islands, and is targeting 150 million visitors a year by 2030 for a $5.3 billion contribution to Saudi GDP.

With a price tag topping $500 million, Therme Dubai promises to become the world’s tallest wellness center when it opens in 2028. In the spirit of Ski Dubai, the desert city’s famous indoor slopes, the center will feature the world’s largest indoor botanical garden, three 18-meter waterfalls, and a water park in addition to a myriad of spa facilities inspired by ancient traditions from around the world. Capacity will be 1.7 million visitors a year.

“It’s like a tropical wellness concept,” says El Kadiri. “You will be in this place where they will recreate tropical weather conditions,” bestowing the associated wellness benefits.

In contrast to ostentatious Dubai, Oman is developing coastal, mountain, and thermal spring attractions, “leveraging its natural assets to attract eco-conscious wellness tourists,” in the words of Alwaleed Alkeaid, founder of Fitlee for Corporate Wellness, a Riyadh-based corporate wellness service provider, and former CEO of the Saudi Boxing Federation. The Omanis want to focus on “quiet luxury” and “authenticity,” El Kadiri notes. Nearby heritage sites are to be combined with wellness offerings to emphasize cultural travel, he adds.

Qatar’s Zulal Wellness Resort by Chiva-Som, a Bangkok-based wellness resort operator, aims to become “the region’s first family-wellness offering,” Madan says. The project “signals a shift toward scale and sophistication in wellness infrastructure. It is one of the largest wellness destinations and the first and only full-immersion resort in the Middle East, founded on traditional Arabic and Islamic medicine (TAIM).”

Dubai and Abu Dhabi lead the region in hardcare. Last year, Dubai inaugurated a Longevity Hub by Clinique La Prairie in partnership with the renowned Swiss longevity clinic. In April, Abu Dhabi launched the HELM Abu Dhabi cluster, a hub for research and development in health, endurance, longevity, and medicine. It is projected to contribute $25.6 billion to the emirate’s GDP, create 30,000 new jobs, and bring in $11.5 billion in investment by 2045 by tapping into a global health care market projected to reach $25.3 trillion by then.

“While the wellness tourism push and the HELM cluster initiative are distinct efforts, they do share complementary goals,” says Sami Khawaja, partner at PwC’s Strategy& Middle East. “The HELM cluster has a broader focus that includes advanced biotech, pharmaceutical manufacturing, digital health, AI integration, and precision and preventive medicine: all supported by cutting-edge infrastructure.”

Upscale mega-projects command most of the attention, but there are early indications that the wellness economy may be spreading to average GCC citizens.

“These [big tourism] initiatives not only attract international visitors but also promote local wellness cultures, fostering a more health-conscious population,” the GWS report argues.

Locals and resident expatriates are packing newly opened fitness clubs. From around 100 two decades ago, Saudi Arabia now boasts 2,100 and counting.

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GCC Digital Upheaval – Fintechs vs Banks

Gulf fintechs are challenging banks’ and brokerages’ long-standing dominance, as the GCC forcefully pursues a digital future.

Across the Gulf Cooperation Council (GCC) states, a new generation of fintech start-ups are challenging the dominance of incumbent banks and brokerage firms. With the United Arab Emirates emerging as a hub, the region is experiencing a widespread digitalization of financial services, driven by mobile-first platforms, specific regulations, and growing consumer demand for transparency, specialization, efficiency, and speed.

“The GCC fintech ecosystem is undergoing a structural shift, shaped by macroeconomic diversification, digital policy agendas, and a wave of consumer-first innovation,” says Said Murad, a senior partner at UAE-based venture capital firm Global Ventures. “Trends attracting investor attention include the rise of open banking, increased adoption of embedded financial services, and mainstreaming of alternative lending and wealth solutions.”

Dubai International Financial Centre (DIFC) in the lead, the UAE now hosts more than 1304 AI, FinTech and innovation companies. Meanwhile, Abu Dhabi Global Market (ADGM) has become a testbed for open banking and digital asset regulation. Together, they are positioning the emirates as a major global fintech ecosystem.

From buy-now-pay-later (BNPL) services and payment platforms to Islamic digital banks and brokerage apps, Gulf fintechs are gaining traction with both users and investors. Start-ups like Tabby and Tamara have made their mark in consumer credit while wealthtech platforms like Sarwa have made investing more accessible to a broader demographic.

“Digital payments dominate the GCC fintech landscape, projected to hold a 90% market share and volumes of $7 trillion by 2032,” says Ivo Detelinov, general partner at Salica Oryx Fund. “Open banking is gaining traction, with Bahrain pioneering regulations and Saudi Arabia having implemented its Open Banking Policy in 2022. Islamic fintech is also on the rise, with assets in Islamic banking projected to reach $4 trillion by 2026, primarily driven by GCC nations.”

Challenging The Old Guard

Fintech development is increasingly pressuring incumbent Gulf banks and brokers to adapt. Many traditional institutions still rely on legacy infrastructure, manual processes, and rigid compliance frameworks, slowing their ability to innovate and respond to changing consumer expectations.

“Without bold investment in modernization, established players risk being outpaced by digital-native challengers offering faster, more agile, and lower-cost services,” warns Sara Grinstead, managing director at Alvarez & Marsal.

The brokerage sector has also been slow to adapt. While some firms have introduced digital onboarding or trimmed commissions, many still lack the user-friendly design, transparency, and product diversity that a younger, more globalized investor base expects.

A key advantage of fintechs is structural, argues Samy Mohamed, CEO of Tabadulat, a new ADGM-based, digital Shariah-compliant brokerage. 

“Incumbent brokers are often tied to legacy systems and limited by domestic markets, making them slow and expensive,” he says. “As a global, digitally native platform, we have a significant cost advantage that we pass directly to our customers.”

Independence is Tabadulat’s most powerful advantage, he adds. “We aren’t beholden to outdated models. This allows us to innovate new Shariah-compliant financial structures that were previously unattainable to retail investors.”

Challenger Banks Gain Ground

The UAE is becoming a hotspot not just for fintech growth but also in driving institutional innovation.

Emirates NBD, First Abu Dhabi Bank (FAB), and Abu Dhabi Islamic Bank (ADIB) have actively invested in next-generation platforms and API ecosystems. New ventures like Wio Bank, launched with backing from ADQ, Alpha Dhabi, e& (Etisalat) and FAB, signal a strategic shift toward purpose-built digital banking infrastructure while fintechs are filling specific market gaps.

Ruya, a fully digital Islamic community bank, typifies this emerging model. Ruya offers UAE Pass integration, which enables full digital onboarding in under five minutes, and mobile-first banking, with no hidden fees or minimum balance and access to digital assets.

Christoph Koster, CEO, ruya
Christoph Koster, CEO, ruya

CEO Christoph Koster, says: “We’re the world’s first Islamic bank to offer direct access to cryptocurrencies like Bitcoin and Ethereum in collaboration with our fintech partner Fuze [a cloud communications and collaboration software platform] and are working on introducing digital gold, stocks, and ETFs as well as other asset classes, all available within the ruya app.”

Koster sees fintechs like ruya as collaborators rather than adversaries of traditional banks. 

“Fintechs bring agility and niche focus; ruya brings regulatory credibility, customer trust, and ethical oversight. Together, we can innovate faster, with trust,” he says.

Faced with mounting competition, traditional institutions are adapting, albeit unevenly. Some have launched digital subsidiaries while others have taken equity stakes in fintechs or entered strategic partnerships.

Emirates NBD, for example, has partnered with BNPL provider Tabby’as the issuing bank for its card. Mashreq, another Dubai-based lender, has embraced a banking-as-a-service (BaaS) model, offering core infrastructure to emerging fintechs. FAB and ADIB continue to scale their in-house digital capabilities and innovation labs.

In Saudi Arabia, some lenders have launched their own BaaS models while others collaborate with fintech firms. In April 2025, Al Rajhi Bank announced a strategic partnership with Muhide, a Saudi fintech platform, to digitally authenticate and govern SMEs’ finance transactions.

“Banks in the GCC have primarily focused on digital transformation, making heavy investments in mobile channels, technology delivery hubs, and the transformation of branches,” notes Sheinal Jayantilal, partner and leader of McKinsey’s Retail Banking and Fintech Practice in EEMEA. “Some banks have even rationalized their branch networks to lower servicing costs, which has been a significant step in staying relevant and meeting customer demands.”

But the pace of change varies significantly. Compliance-heavy operations, siloed decision-making, and cultural resistance often hold back legacy players

“Fintech competition is now a tangible reality for banks in the GCC. What was once theoretical is now a boardroom concern,” says Mustafa Domanic, a partner in Oliver Wyman’s Dubai office. “Banks shouldn’t fear the migration of customers; it’s already happening. The winners will be those who participate in the transformation, not resist it.”

Regulatory Catalyst

Much of the momentum in fintech across the GCC is being fuelled by forward-thinking regulators. The UAE’s ADGM and DIFC have launched regulatory sandboxes, fast-track licensing schemes, and frameworks for digital assets and open banking.

The UAE stands out as a progressive regulatory environment in the GCC, says Mohamed Fairooz, Middle East lead at Standard Chartered’s SC Ventures. “We see the regulator here proactively embracing fintech, digital assets and innovation sandboxes.”

Saudi Arabia, too, is catching up. Under Vision 2030, the kingdom aims to host 525 fintechs by the end of the decade. The Saudi Central Bank and the Capital Market Authority have introduced sandboxes and digital finance strategies to attract innovation.

Other jurisdictions, like Bahrain, are introducing emerging technologies in a bid to attract tech firms and investors.

“Bahrain has emerged as a regulatory test-bed thanks to the Central Bank of Bahrain’s early embrace of sandboxes and open banking,” notes Grinstead. “It has attracted digital banking and compliance technology innovators, although market size presents scalability limits without cross-border expansion.”

Indeed, cross-border scalability remains a pain point. Fragmented regulation, duplicative licensing, and differing compliance requirements across jurisdictions hinder regional expansion.

Staying Competitive

As Gulf fintechs mature, some will acquire full banking licences while incumbent banks and brokers will increasingly seek to embed fintech capabilities to stay competitive.

McKinsey forecasts that MENA will be the fastest-growing region globally, with 35% annual growth in fintech net revenue until 2028, compared with a global average of 15%. A large proportion of this growth will be driven by the GCC’s banking sector. 

Sectors like embedded finance, AI-driven personal finance, and wealthtech are driving the next wave of growth. M&A will also accelerate as banks acquire fintechs to fast-track innovation, according to a report by Lucidity Insights.

For traditional banks and brokers, survival will require more than digitizing legacy systems; it will demand a rethinking of the entire value chain. Pricing models, onboarding, product offerings, and ethical frameworks will all need reinvention.

“To remain competitive,” Domanic argues, “banks must closely monitor developments in the fintech sector and understand how emerging business models may impact their core operations.” 

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Investment Banking Surge in the GCC: From Oil to Assets

Corporate and investment banking revenues in the Gulf are burgeoning as lenders underwrite the region’s economic transformation.

Lenders like what they are hearing from Gulf region businesses. Corporate and investment banking (CIB), which already accounted for more than half of total banking revenues in the Gulf Cooperation Council (GCC), is expanding at an annual rate of 14%, more than twice the regional average, according to a recent McKinsey study. Lenders expect CIB revenues to reach the $100 billion mark by 2030 as the region deepens its economic transformation.

“All GCC nations are actively working to diversify their economies away from hydrocarbon dependence, which will unlock significant growth opportunities in all sectors,” says Wissam Haddad, CEO of Riyadh-based SICO Capital, which is developing products and services geared toward emerging technologies.

From Saudi Arabia’s Vision 2030 blueprint to the United Arab Emirates’ digital and green ambitions, Gulf countries have embarked on multi-billion-dollar quests to reshape their economies. Countless initiatives across the board are boosting demand for complex financing solutions and banking services. “As governments prioritize large-scale infrastructure, energy transition, and technology-led growth, financial institutions are playing an increasingly strategic role,” says Abbas Husain, global head of Infrastructure and Development Finance at Standard Chartered. “In this environment, financing needs are becoming more sophisticated. There is growing interest in integrated capital solutions that combine bank lending with broader access to capital.” The Gulf ’s CIB client base is broad: from sovereign wealth funds and government-related entities to multinational firms entering the region, high-net-worth individuals, institutional investors, publicly listed companies, and small to midsized enterprises.


“In this environment, financing needs are becoming more sophisticated.”

Abbas Husain, Global Head of Infrastructure and Development Finance, Standard Chartered


“Many are deeply involved in executing national transformation agendas and are at the forefront of innovation, sustainability, and infrastructure development,” Husain notes. “What they increasingly have in common is the need for integrated, forward-looking financial solutions that support complex, multi-market strategies. This extends across debt financing, risk management, and strategic advisory, often with a strong cross-border dimension.”

Capital Markets

As the GCC economies evolve, so too are their capital markets, spanning debt issuance, equity offerings, and M&A, all of which are contributing to the sharp rise in CIB revenues. In the first quarter of 2025, M&A activity surged 66%, to reach $46 billion over 225 transactions, reports Ernst & Young, with the UAE accounting for more than half of all announced deals. The UAE and Saudi Arabian IPO markets have recorded steady growth of 10% to 15% year-on-year over the past decade.

Karim Shoeib, Al Ramz
Karim Shoeib, Group CEO, Investment Banking, Al Ramz

“The surge in IPO activity, particularly in the UAE, is creating significant momentum,” says Karim Shoeib, group CEO, Investment Banking, at Al Ramz, a Dubai-based public joint-stock company. “Government-led privatizations and family business listings are expanding the investable universe and generating new opportunities for both institutional and retail clients.” Although the UAE and Saudi Arabia dominate market activity, he advises that investors keep an eye on other countries including Oman and Bahrain, where Al Ramz was recently licensed.

With family-owned businesses making up much of the private sector—around 90% in the UAE and 60% in Saudi Arabia—family listings look to be an important catalyst for capital market activity. The region is on the brink of an unprecedented generational wealth transfer; by 2030, over $1 trillion in assets is forecast to change hands, opening rare opportunities for investors to become shareholders of some of the region’s crown jewels.

A high-profile example is Emirati retail giant Majid Al Futtaim. Following the founder’s death without a will in 2021, years of internal disputes may culminate in an IPO.

“The region is witnessing an increasing number of company listings, strategic projects, a growing preference for more advanced and hybrid debt products, and continued consolidation,” says Haddad, “particularly in fragmented sectors such as hospitality and insurance. Many GCC countries have solid long-term strategic visions that emphasize sectoral diversification and privatization, which we believe will continue to drive robust demand for CIB services.”

Attracting Global Banks

Global financial institutions are ramping up their presence in the GCC. BNY Mellon recently established its regional headquarters in Riyadh, following Goldman Sachs and Citigroup, which were licensed last year.

US private equity firm I Squared Capital has committed $1 billion to Saudi infrastructure projects while Azura, a Monaco-based wealth management firm overseeing $5 billion in assets, is relocating its operations to Abu Dhabi. UBS also is set to open an office in the UAE capital and JPMorgan plans to hire over 100 additional staff to strengthen its already sizable Middle East presence.

“This is healthy and a reflection of the strong fundamentals and future potential of local markets,” Shoeib notes. “We view this development as a natural part of a maturing financial ecosys- tem that continues to evolve in both scale and sophistication.”

Regional banks retain key advantages, including deep client relationships, intimate knowledge of local regulatory environ- ments, and cultural proximity in areas like Islamic finance, but global entrants bring expansive balance sheets and often more advanced digital infrastructure.

Although the presence of global banks intensifies competition, “it also raises industry standards, introduces global best practices, and attracts deeper pools of capital to the region,” notes Haddad. “In many ways, international interest complements our efforts,” he adds, “broadening market participation and expanding the ecosystem rather than threatening it.”

Still, success for local players will demand more than just local familiarity and competitive products.

“To truly succeed in this environment, it is no longer sufficient to be just a source of liquidity,” says Husain, citing his clients’ interest in sustainable finance, digital transformation, and long-term capital structuring. “What differentiates institutions is the ability to offer holistic solutions grounded in local understanding and global reach. Deep relationships, consistent presence, and a track record of delivery are critical. What clients value is a strategic partner that can support them across their full lifecycle, from advisory through to execution and long-term financing.”

Challenges Ahead

Despite strong momentum, the GCC’s CIB sector faces significant headwinds. Geopolitical tensions, oil price volatility, new corporate tax regimes, and rising interest rates weigh on the cost of capital, dampening investor appetite and affecting deal execution timelines.

“Broader geopolitical tensions and global economic shifts, such as inflationary pressures and interest rate cycles, continue to shape investor sentiment across the region,” says Shoeib. “With GCC currencies pegged to the US dollar, navigating these macroeconomic dynamics requires agility and a steady focus on long-term value creation.”

Another structural challenge concerns the availability of qualified human capital and the sector’s ability to keep pace with rapid technological innovation, including generative AI. “The future of corporate and investment banking in the GCC will be shaped by those who can align innovation with execution and combine global connectivity with a strong understanding of regional ambition,” says Husain.

“Financial institutions that can operate across jurisdictions, connect global capital to local opportunity, and provide clarity in a complex landscape are well positioned to lead.” Concurrently, the GCC’s rising capital needs are putting pressure on liquidity. In most countries, credit demand is now outpacing deposit growth, driving loan-to-deposit ratios to historic highs. In Saudi Arabia, the ratio exceeds 100%, with private-sector lending projected to grow by 12% to 14% annually, while deposits are expected to rise by only 8% to 10%. This dynamic creates both opportunities and risks for regional lenders.

“CIBs must overcome funding shortages with record-high loan-to-deposit ratios—nearing or surpassing 100% in half of all GCC countries—which create potential liquidity constraints,” the recent McKinsey study concludes. “In addition, lower interest rates, with more cuts expected this year, are putting pressure on returns, given that approximately 85% of GCC banks’ income is based on interest.”

To maintain growth and profitability, Gulf-based banks will need to adapt. “Success requires banks to consider adjustments that may help them capture opportunities, remain competitive, and maintain recent momentum,” McKinsey argues, suggesting that local players focus on improving cost efficiency, diversify their loan portfolios, deepen their footprint in capital markets and trading, and expand transaction banking and foreign exchange services.

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ASEAN’s multilayered response to the changing economic and geopolitical order

ASEAN nations have been closely observing the trajectory of US-China relations and have expressed their apprehensions vis-à-vis the uncertainty arising out of Trump tariffs. Leaders of Singapore and Malaysia have been particularly vocal in expressing their apprehensions.

While speaking at the opening of the 46th ASEAN Summit held at Kuala Lumpur, the Malaysian PM, Anwar Ibrahim, referred to the imposition of tariffs by US President Donald Trump. Said the Malaysian PM:

‘Indeed, a transition in the geopolitical order is underway, and the global trading system is under further strain with the recent imposition of US unilateral tariffs,’

How ASEAN countries have benefited from the China+1 strategy

Here it would be pertinent to point out that ASEAN nations have also benefitted from the China+1 strategy of Western companies. Through this strategy, Western companies have been keen to reduce their dependence upon China and have been shifting to several ASEAN countries. Companies have moved from China not just to Vietnam but to other ASEAN nations like Indonesia and Malaysia as well.

Impact of China-US thaw on ASEAN

While many would have thought that ASEAN countries would heave a sigh of relief after the China-US agreement signed in Geneva, via which the US reduced tariffs against China from 145 percent to 30 percent. There has been a mixed reaction to the same, given the possibility of companies redrawing their China+1 plans.

Malaysia’s interest in BRICS+

Another important impact of Trump’s policies has been ASEAN countries seeking entry into multilateral organizations. Indonesia entered BRICS as a member in January 2025.

Malaysia, which entered BRICS as a partner country in October 2024, has also applied for full membership. Two other ASEAN countries, Vietnam and Thailand, also entered BRICS.

Malaysian Foreign Minister Mohamad Hasan, while commenting on the ASEAN nation’s interest in joining BRICS:

‘Malaysia’s desire to join BRICS represents its effort to uphold policies and identity as an independent and neutral country, striking a balance with great powers and opening up new business and investment opportunities,’

Malaysia shares close economic ties with China as well as the US and the EU. Malaysia’s bilateral trade with China in 2024 exceeded $200 billion ($212.04 billion). The ASEAN nation’s trade with the US was estimated at $80.2 billion in 2024.

The Malaysian PM, Anwar Ibrahim, had earlier proposed an ‘Asian Monetary Fund’ as an alternative to the International Monetary Fund (IMF). In recent years, Malaysia has been pushing for “de-dollarization,” or trade in non-dollar currencies, with several countries.

Anwar Ibrahim’s Russia visit and discussion of BRICS+

Apart from several other bilateral issues, the role of Malaysia in BRICS+ was also discussed during the recent meeting between Malaysian PM Anwar Ibrahim and Russian President Vladimir Putin during the former’s Russia visit. The Malaysian PM thanked Putin for his role in facilitating Malaysia’s entry into BRICS+. The Russian president, on his part, welcomed the entry of Malaysia and other ASEAN nations as partner countries into BRICS+ during Russia’s chairmanship of BRICS+ in 2024.

During the meeting of Australian PM Anthony Albanese and Indonesian President Prabowo Subianto during the former’s Indonesia visit, one of the issues that was discussed was Indonesia’s entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and OECD. The CPTPP—earlier the Trans-Pacific Partnership (TPP)—was initially conceived by former US President Barack Obama. During US President Donald Trump’s earlier presidency, the US had pulled out of TPP. While the organization did face a setback after the US exit from the CPTPP — members like Japan and Australia, which are wary of China’s growing clout in the Indo-Pacific, have been playing a key role in giving a push to economic linkages. Two other ASEAN countries—Malaysia and Vietnam—are already members of the CPTPP.

The Indonesian president thanked Australia for its support for Indonesian into the CPTPP.

The Australian PM, while commenting on his support for Indonesia’s entry into CPTPP:

‘I assure you, Mr. President, of Australia’s support for your joining the OECD as well as your accession to the CPTPP.’

The Australian PM also reiterated Indonesia’s strategic importance in the context of the Indo-Pacific.

Indonesia’s important role on the global stage

Indonesia has robust ties with both China and the US and seeks to use multilateral platforms for further enhancing its clout, as several middle powers have done in recent years. Indonesia has sought to present itself as an important voice of the Global South and as an important link between the G7 and G20.

ASEAN-China-GCC

On the sidelines of the ASEAN Summit, the first ASEAN-China-GCC Summit was held for the first time. The Malaysian PM dubbed this as extraordinary. Anwar Ibrahim also said:

‘I am confident that ASEAN, the GCC, and China can draw upon our unique attributes and shape a future that is more connected, more resilient, and more prosperous.’

Conclusion

In conclusion, the interest of countries like Malaysia and Indonesia in entering multilateral organizations is driven by the changing geopolitical situation in ASEAN and beyond. These nations need to be deft and nimble and can not afford to have a zero-sum approach towards the same. The recent ASEAN Summit is a strong illustration of how ASEAN member states are seeking to diversify their relationships by seeking entry into important multilateral blocs. Apart from this, one point that is evident from the recent ASEAN summit was that ASEAN as a grouping is also seeking to strengthen ties with groups like the GCC.

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Gulf states, China take centre stage at summit of Southeast Asian nations | International Trade News

The Gulf Cooperation Council (GCC), China and the 10-member Association of Southeast Asian Nations (ASEAN) agreed to “chart a unified and collective path towards a peaceful, prosperous, and just future”, following their meeting in the Malaysian capital, Kuala Lumpur.

In a world roiled by United States President Donald Trump’s threats of crippling tariffs and rising economic uncertainties, alternative centres of global power were on full display, with the GCC and China attending the ASEAN summit for the group’s inaugural trilateral meeting on Tuesday.

In their joint statement released on Wednesday, the GCC – comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – China, and ASEAN members Indonesia, Singapore, Malaysia, Thailand, Vietnam, Philippines, Brunei, Cambodia, Laos and Myanmar said they were committed to enhancing economic cooperation.

Chief among that cooperation will be the promotion of free trade, the signatories said, adding they looked “forward to the early completion of the GCC-China Free Trade Agreement negotiations” and the upgrading of the ASEAN-China free trade area.

“We reaffirm our collective resolve to work hand in hand to unleash the full potential of our partnership, and ensure that our cooperation translates into tangible benefits for our peoples and societies,” they said.

Secretary General of the Gulf Cooperation Council (GCC) Jasem Albudaiwi, Myanmar's Permanent Secretary of the Ministry of Foreign Affairs Aung Kyaw Moe, Laos' Prime Minister Sonexay Siphandone, Singapore's Prime Minister Lawrence Wong, Saudi Arabian Foreign Minister Faisal bin Farhan Al Saud, Thailand's Prime Minister Paetongtarn Shinawatra, Qatar's Emir Tamim bin Hamad Al Thani, Vietnam's Prime Minister Pham Minh Chinh, Kuwait's Crown Prince Sheikh Sabah Khaled Al-Hamad Al-Sabah, Malaysia's Prime Minister Anwar Ibrahim, Philippines' President Ferdinand Marcos Jr, UAE Supreme Council Member and Ruler of Ras Al Khaimah, Sheikh Saud bin Saqr Al Qasimi, Brunei's Sultan Hassanal Bolkiah, Bahrain's Crown Prince Salman bin Hamad Al Khalifa join hands for a group photo as they attend the 2nd ASEAN-GCC Summit at the Kuala Lumpur Convention Centre in Kuala Lumpur, Malaysia, May 27, 2025. REUTERS/Hasnoor Hussain
ASEAN and GCC members join hands for a group photo as they attend the 2nd ASEAN-GCC Summit at the Kuala Lumpur Convention Centre in Kuala Lumpur, Malaysia, on May 27, 2025 [Hasnoor Hussain/Reuters]

Malaysia’s Prime Minister Anwar Ibrahim – whose country is currently chair of ASEAN and hosted the summits – told a news conference that the US remains an important market while also noting that ASEAN, the GCC, and China collectively represent a combined gross domestic product (GDP) of $24.87 trillion with a total population of about 2.15 billion.

“This collective scale offers vast opportunities to synergise our markets, deepen innovation, and promote cross-regional investment,” Anwar said.

The prime minister went on to dismiss suggestions that the ASEAN bloc of nations was leaning excessively towards China, stressing that the regional grouping remained committed to maintaining balanced engagement with all major powers, including the US.

James Chin, professor of Asian studies at the University of Tasmania in Australia, told Al Jazeera that the tripartite meeting was particularly important for China, which is being “given a platform where the US is not around”.

ASEAN and the GCC “already view China as a global power”, Chin said.

‘The Gulf is very rich, ASEAN is a tiger, China…’

China’s Premier Li Qiang, who attended the summit, said Beijing was ready to work with the GCC and ASEAN “on the basis of mutual respect and equality”.

China will work with “ASEAN and the GCC to strengthen the alignment of development strategies, increase macro policy coordination, and deepen collaboration on industrial specialisation,” he said.

Former Malaysian ambassador to the US Mohamed Nazri bin Abdul Aziz said China was “quickly filling up the vacuum” in global leadership felt in many countries in the aftermath of Trump’s tariff threats.

Malaysia's Prime Minister Anwar Ibrahim poses for photos with China's Premier Li Qiang ahead of the ASEAN - Gulf Cooperation Council (GCC) - China Summit, after the 46th Association of Southeast Asian Nations (ASEAN) Summit, in Kuala Lumpur, Malaysia May 27, 2025. MOHD RASFAN/Pool via REUTERS
Malaysia’s Prime Minister Anwar Ibrahim, right, poses for photos with China’s Premier Li Qiang before the ASEAN-Gulf Cooperation Council (GCC)-China Summit in Kuala Lumpur, Malaysia, on Tuesday [Mohd Rasfan/Pool via Reuters]

The economic future looks bright, Nazri said, for ASEAN, China and the Gulf countries, where economies are experiencing high growth rates while the US and European Union face stagnation.

“The Gulf is very rich, ASEAN is a tiger, China… I cannot even imagine where the future lies,” Nazri said.

Jaideep Singh, an analyst with the Institute of Strategic & International Studies in Malaysia, said ASEAN’s trade with GCC countries has been experiencing rapid growth.

Total trade between ASEAN and the Gulf countries stood at some $63bn as of 2024, making GCC the fifth-largest external trading partner of the regional bloc, while Malaysia’s trade with the GCC grew by 60 percent from 2019 to 2024.

In terms of foreign direct investment, FDI from GCC countries in ASEAN totalled some $5bn as of 2023, of which $1.5bn went to Malaysia alone, Singh said.

However, the US, China, Singapore and the EU still make up the lion’s share of FDI in Malaysian manufacturing and services.

US still ASEAN’s biggest export market

Even as China’s trade with ASEAN grows, economist say, the US still remains a huge market for regional countries.

In early 2024, the US took over China as ASEAN’s largest export market, with 15 percent of the bloc’s exports destined for its markets, up nearly 4 percent since 2018, said Carmelo Ferlito, CEO of the Center for Market Education (CME), a think tank based in Malaysia and Indonesia.

“The US is also the largest source of cumulative foreign direct investment in ASEAN, with total stock reaching nearly $480bn in 2023 – almost double the combined US investments in China, Japan, South Korea, and Taiwan,” Ferlito said.

Israel’s war on Gaza was also highlighted at the ASEAN-GCC-China meeting on Tuesday.

Delegates condemned attacks against civilians and called for a durable ceasefire and unhindered delivery of fuel, food, essential services, and medicine throughout the Palestinian territory.

Supporting a two-state solution to the conflict, the joint communique also called for the release of captives and arbitrarily-detained people, and an end to the “illegal presence of the State of Israel in the occupied Palestinian territory as soon as possible”.

The civil war in Myanmar was also a focus of the talks among ASEAN members at their summit on Tuesday, who called for an extension and expansion of a ceasefire among the warring sides, which was declared following the earthquake that struck the country in March. The ceasefire is due to run out by the end of May. However, human rights groups have documented repeated air attacks by the military regime on the country’s civilian population despite the purported temporary cessation of fighting.

Zachary Abuza, professor of Southeast Asia politics and security issues at the Washington-based National War College, said that while Prime Minister Anwar may be “more proactive” – in his role as ASEAN chair – in wanting to resolve the conflict, Myanmar’s military rulers were “not a good faith actor” in peace talks.

“The military has absolutely no interest in anything resembling a power-sharing agreement,” he said.

 

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