Unprecedented Supply Chain Opportunities in the Gulf, But First, the Blockade Must End

The Middle East, whose historic role as the cross-roads of East-West trade, has been upended by instability and lack of development. To exacerbate this, we are now about to hit the one-year milestone in the blockade in the Arabian Gulf between Saudi Arabia and Qatar. The six members of the Gulf Cooperation Council (GCC) are split are split in this blockade and it is negatively impacting their supply chain operations.

Here are three key factors in the current supply chain landscape in the Middle East:

· Politics exacerbate the inefficiencies of under-developed supply chains. There are five blockades in the Middle East that result in a tangle of passenger and cargo routing, increasing costs of travel and trade in a region where these things were already expensive.

Middle Eastern countries are looking to other outside sources of capital. Some are making overtures with Israel, the only developed economy in the region. Saudi Arabia has granted Air India overflight rights for flights to and from Israel, and the first publicly known delegation to visit Israel from Bahrain happened in January. These changes present unprecedented opportunities for supply chain in the Middle East.

The Middle East has also started looking east, and for more than just oil money. Over the past decade, the Chinese have provided expertise and loans to develop infrastructure, financial services for the poor, and clean energy production. China has a poor track record as a guardian of free trade, and is rather open about throwing its weight around for its own benefit.

All of this presents unprecedented opportunities for supply chain globally and specifically in the Middle East. However, in order proceed, we need the main blockade between Qatar and Saudi Arabia to end. Once the blockade is over, the united GCC can return to its pivotal role in global supply chains.

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