With economic reform, strategic planning and grandiose visions dominating the agenda, 2016 was a year shaped by management consultants.
In 2017, after enduring more than two years of low oil prices, management consultants blue sky thinking and promises of a better tomorrow have given way to the harsh reality of the present by auditors reviewing companies accounts.
The problem is cash. Since late 2014 liquidity in the market has been tight, and getting paid has been even more than a challenge than it normally is in a region that even in good times is notorious for its poor payment terms.
The issue is getting worse. According to research from French export credit agency Coface, payment delays in Saudi Arabia averaged 185 days in 2016, while average payment delays in the UAE now reach 123 days.
For project clients, the lack of cash means that they are unlikely to proceed with new projects and may even struggle to meet their commitments on existing schemes. For contractors, the lack of cash not only exposes any operational efficiencies and problem jobs, it has the ability to cripple companies that have completed work on time and in good faith and are then left waiting for payment.
The pain of non-payment has been most acute in Saudi Arabia with large contractors such as Saudi Binladin Group and Saudi Oger suffering the most in 2016. The resultant cash flow crisis in the kingdom has crippled the construction industry, and the most obvious and violent way that the problem has manifested itself is with labour protests. The problem became so serious that last year the government publicly committed to clearing billions of dollars of contractor payments to prevent any further unrest.
The financial tensions still exist, and the pain felt in Saudi Arabia is now simmering over into the rest of the region. This year there have already been protests in the UAE and Kuwait and it is likely that there will be more.
Until more cash is pumped into the region these problems will persist and auditors will continue to deliver bad news.