At the end of 2001, few would have predicted that the Middle East was set to embark on what was possibly the largest building boom in recent history.
The 11 September terrorist attacks in New York and Washington plunged the world into a period of extreme uncertainty and for the Middle East it looked like the coming decade would be one of isolation as tourists and businessmen gave the region a wide berth.
Ten years on, those dark days of doubt are difficult to remember. Since then, the region has built projects that few would have dreamt were possible. Dubai led the way with the world’s tallest building – the 828-metre Burj Khalifa, and its man-made islands. Others followed, across the GCC, North Africa and the Levant as governments and private sector developers embarked on projects of unprecedented scale.
Sadly for contractors most of those schemes are now either completed, or were forced to be put on hold as the credit crunch derailed the region’s property markets.
After two years of searching for opportunities in the region’s emerging markets such as Libya, the Arab uprisings that have swept the region this year at first, like the terrorist attacks of 2001, appear to have snubbed out any hope of a recovery.
On closer analysis, the uprisings look to have provided a catalyst for development. As Egypt and Tunisia have shown, governments can be overthrown if they neglect their people. For the GCC states buoyed by strong oil prices, the solution is simple: spend. With the region’s largest oil reserves, King Abdullah bin Abdulaziz al-Saud can afford to disburse the most. In February, he said the government will spend an extra $100bn on projects.
For contractors, this will be an unexpected windfall as governments quickly move ahead on infrastructure plans. Construction firms can start to expect a recovery in 2012 as the impact of this increased expenditure begins to be felt.