Financial Observation: The potential of the digital economy in the Gulf countries seeking change in crisis is expected

　　Financial Observation: The potential of the digital economy in the Gulf countries seeking change in crisis is expected

　　Xinhua News Agency, Cairo, December 7 -

　　Xinhua News Agency reporter Yan Jing

　　In order to get rid of dependence on a single energy source, the Gulf countries have successively launched "Vision 2030" and "Vision 2035" in recent years to seek economic diversification.

Since the beginning of this year, the new crown epidemic and low oil prices have continued to impact finances, the economic transformation of the Gulf countries is imminent, and the digital economy has ushered in new development opportunities.

　　Take Saudi Arabia as an example. In 2016, the Saudi government announced the "Vision 2030" reform plan, which aims to promote domestic economic transformation and diversified development.

In addition, facing the problem of high unemployment, Saudi Arabia has taken measures to create more jobs and strengthen professional skills training.

　　This year, the epidemic and the sharp drop in oil prices have led to further deterioration of the Gulf countries’ finances, a sharp drop in disposable income, a rising fiscal deficit and public debt as a proportion of GDP, and a sharp decline in sovereign wealth funds and foreign exchange reserves.

According to estimates by the International Finance Association, by the end of this year, the assets of sovereign wealth funds of the Gulf countries may be reduced by US$296 billion.

The epidemic has severely hit the tourism, hotel, aviation, and logistics industries, and has dragged down the implementation and transformation of the "vision" to a certain extent.

　　Facing multiple difficulties, the Gulf countries have further increased revenue and cut expenditure.

Several oil and gas projects in Kuwait have been delayed or shelved.

Some major projects in Saudi Arabia have been suspended, and the saved funds will be redistributed to medical care and corporate assistance; since June this year, the payment of living cost allowances for government civilians and military personnel has been suspended; and the value-added tax rate has been increased to 15% since July.

　　In this context, the economic and trade cooperation between the Gulf countries and China has been comprehensively promoted in the field of digital economy and new technologies, and the potential for digital transformation is huge.

On October 22, the Saudi Data and Artificial Intelligence Bureau signed a cooperation agreement with Alibaba, Huawei and other companies and institutions, covering smart city construction and Arabic artificial intelligence technology development.

　　Ma Xiaolin, an expert on international issues at Zhejiang International Studies University, said that the Gulf countries have broad room for innovation.

Chinese companies are gradually gaining international recognition in the fields of artificial intelligence and big data, and there is huge potential for cooperation between the two sides in the future.

　　During the epidemic, the total amount of online purchases by the Saudis and the proportion of online consumers both increased significantly.

China's e-commerce development technology and experience are creating new value for the Gulf countries, and the market influence continues to increase.

　　Bao Chengzhang, an associate researcher at the Middle East Institute of Shanghai International Studies University, said that China will play a unique and important role in the Gulf countries' mobile payment, business vitality, development potential and digital ecosystem. (Reporters involved: Zhou Yue, Liu Xi, Tu Yifan, Wang Wei, Nie Yunpeng, Su Xiaopo)