Gulf is moving from oil economy to knowledge-based economy: Expert

IMA president rules out global recession

Jeffrey C Thomson

KUWAIT: The Gulf region is on the threshold of a transition from an oil-based economy to a broader knowledge-based economy and Kuwait is also part of that great transformation with its ambitious New Kuwait 2035 vision, said Jeffrey C Thomson, President and CEO of Institute of Management Accountants (IMA) yesterday.

“I believe that the countries in the entire region are trying to lessen their reliance on oil and move towards a knowledge-based economy. Countries including Kuwait, Saudi Arabia and Qatar have embarked on that vision, which is just a decade away. Knowledge will be the key driver of that change incorporating artificial intelligence (AI), fintech, blockchain, etc,” he told Kuwait Times in an exclusive interview.

In Kuwait, the IMA Kuwait Chapter will be part of that evolution by helping organizations develop competencies for accounting and financial planning, risk management and internal control systems and supporting merger and acquisition activities, Thomson said.

In view of the current volatile economic and financial situation, individual investors and organizations must pay attention to the fundamentals of the economy. “Markets may move up and down based on social media tweets or geopolitical tensions. You must also be ready to accept some volatility in the market, otherwise you shouldn’t be in the game,” he said.
“But if you want to be a good investor, you really need to watch and monitor the economic scorecard based on the fundamentals in the Middle East such as real GDP, GDP per capita, funding, tax rates and consumer confidence. Also, an investor must spend time to think what is ahead in terms of economic environment, consumer confidence and purchasing power, otherwise you will lose sight of where the market is heading,” Thomson pointed out.

“Today, there is a lot of excitement and buzz about evolving technologies such as AI, fintech, blockchain, etc in different parts of the world. But at the end of the day, it is the talent of your finance and accounting team that matters. It is all about advancing competence and talent in management accounting and finance and corporate strategy,” he explained.

“It is hard to predict if there is a global recession around the corner,” Thomson said in response to a specific question. “There are a lot of reactions about a looming recession in the market today due to geopolitical tensions in the Middle East or trade issues. But the US economic fundamentals are pretty strong, with solid corporate earnings, consumer confidence, real GDP growth, etc. So, in the short-term, we don’t see the signs that would suggest a global recession, at least from the CMA perspective,” Thomson stated. According to him, it is all about maintaining a healthy financial profile with strong balance sheets, good cash reserves, smart investments, smart risk management and internal controls.

IMA – with chapters all across the world – celebrated 100 years of service a couple of months ago in Santiago. Thomson arrived in Kuwait to attend IMA Kuwait Chapter’s annual conference yesterday.

By Sajeev K Peter