Mazaya Monthly Real Estate Report - October 2013
Al Mazaya Holding Company’s report
called on the governments in the region
to give priority to the long-term projects of
a strategic nature, which yield cash flows
and long-term returns and impacts on
the economies of countries in the region.
It will be crucual for the GCC States to
develop appropriate investment tools to
attract regional and global investments,
since the national banks will not be able to
inject the funds required individually, and
the infrastructural projects will be a good
chance for Islamic financial services in the
field of financing infrastructural projects
that can meet the growing demand.
Therefore,allparties,includinggovernme
ns andtheprivate banking sector, should
give main priority to the infrastructural
investment and provide the necessary
funding inall circumstances. The significant
reduction on the degree of risk in the credit
and loan markets during the current period
will contribute to the provision of more
capitals that suit medium- and long-term
investment. Additionally, both the high
liquidity ratios in the banking sector and
the low cost of funding in the markets will
help find projects yielding stable returns,
with infrastructural projects being one of
the possible options.
The report confirms that advanced
infrastructure plays important roles in the
expansion of capacity, raising production
efficiency and improving the quality of
output in all economic sectors. All these
roles will be channeled together in the
interest of raising economic efficiency
and increasing the competitiveness of
the period after the crisis or economic
downturn, and this spending will have
short-term positive effects due to its
positive impact on growth rates.
Standard budgets, adopted by the Gulf
States during the period of the crisis,
reflect the truth of this; they have focused
on the implementation of large-scale
projects. In addition, the continuous trends
of spending continuing will have positive
medium- and long- term effects. The
positive effects will multiply at the moment
of the completion of those projects and the
economies entering the recovery phase.
The report points to the continued
direct relation between the economic
development of the GCC States and
further developing the infrastructure that
supports this development.
The transportation sector is also acquiring
an increasing share of importance, interest
and capital spending. We cannot talk about
competitive capabilities of economies
of the region without the presence of
advanced transport and transportation
sector linking the GCC States with the
world at the level of roads, railways, ports
and airports, which facilitate the transfer of
products to theworldmarkets. This network
will have positive effects on reducing the
costs of import of raw materials, goods
and services, directly contributing to
higher rates of economic growth, raising
living standards, achieving balanced
development and linking production sites
to each other. At this level of sophistication
and continuation in capital spending
on strategic infrastructural projects, the
economies of GCC States will be able
to achieve sustainable development and
raise economic growth rates to a level
that guarantees making continued gains
in income levels, due to the ability of the
advanced economies to permanently
link the sites of production, export and
consumption.
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