Global economic uncertainty make it imperative that GCC countries should develop competitive, diversified economies, concludes a new paper from the Carnegie Middle East Center.
In the report explains that the top priority for the Gulf Council Cooperation (GCC) countries should be improving economic governance.
Recommendations for GCC countries:
• Improve minimum wage standards and working conditions to attract more domestic employment and reduce dependence on immigrant labour
• Regionally concentrate on growth in non-oil sectors to avoid duplication in areas like finance and tourism.
• Encourage foreign direct investment through better economic and corporate regulation, including greater transparency in public spending and easier access to credit.
Estimated at an annual average of US7 billion over the period 2002– 2006, the revenues more than doubled their average as compared with the preceding five years. Despite the great oil windfall, the GCC countries faced the same challenges as they had in previous periods. Efforts at diversifying their economies and reducing high oil dependency resulted in limited change despite the multi-track approach that these countries were pursuing. GCC countries pursued the same policies they had pursued in the previous period, without adapting to changed dynamics. They increased public spending in order to distribute the new oil windfalls, but this proved unsustainable in the long run given the oil price volatility.
The recent global financial crisis and the fall in oil prices demonstrate that the GCC countries cannot count on steadily high oil prices. Therefore developing merit-based competitive economies will remain the key challenge facing them.
Average GDP per capita across the six countries grew about 32% in the 2002–2007 period. According to International Monetary Fund (IMF) estimates, average per capita income measured in purchasing power parity (PPP) increased from US,000 in 2002 to above US,000 in 2007.
Several common features characterise the GCC economies: high dependency on oil, a dominant public sector with a significant fiscal surplus, a young and rapidly growing national labour force, and high dependency on expatriate labour. The GCC countries face the urgency to address common challenges: diversifying their economies; addressing low productivity and labour market setbacks; developing the non-oil private sector.
Special Industrial Parks and Their Role in Diversifying Economy
– Bio IT Knowledge Center
Objective
• To diversify local economy
• To increase high end employment opportunities for the national
• To develop Knowledge based economy for the future
• To develop education to locals in association with different universities and biotech companies present in the park.
Components
• Biotech
• IT/ITES
• Pharmaceutical
• Pharmaceutical Logistic and Warehousing
Area: – 200,000 square meter
THE GLOBAL DEBATE ON Industrial Park
Traditionally Industrial Park are created as open markets within an economy that is dominated by distortion trade, macro and exchange regulation and other regulatory governmental controls.
A long-held view of development economics is that investment, in particular foreign investment, in enclaves such as INDUSTRIAL PARK, pushes forward the process of industrial development by creating horizontal and vertical spillovers. Horizontal spillovers are technology leakages and management know-how from multinational firms to local industry competitors. Vertical spillovers are also known as forward and backward linkages. Horizontal spillovers emerge from incentives for a corporation to develop the supply chain through technology transfers to suppliers of the MNC as well as those to whom these MNCs are suppliers. Such transfers include management knowhow, staff training, and improved production efficiency. However, global evidence reveals that horizontal spillovers are insignificant as MNCs are not willing to set up business where technology leakages benefits competitors. On the other hand there is evidence from developing countries like Indonesia and China that shows the significant positive spillovers of vertical linkages. In particular the MNCs try developing local supply chains that in turn help develop local industries in other areas.
Worldwide, the first known instance of an INDUSTRIAL PARK seems to have been an industrial park setup in Puerto Rico in 1947 to attract investment from the US mainland. In the 1960s, Ireland and Taiwan followed suit, but in the 1980s China made the Industrial Park gain global currency with its largest being the metropolis of Shenzhen. From 1965 onwards,
Thirty years ago, 80 special economic zones (Industrial Park) in 30 countries generated barely US billion in exports and employed about 1 million people. Today, 3,000 Industrial Park operate in 120countries and account for US 0+ billion in exports and 50 million direct jobs. After the success of the first INDUSTRIAL PARK when it appeared in Taiwan’s Kaohsiung harbor 40 years ago.
What does Industrial Park Produce?
Industrial Park is the markers of government’s strategy to create a “diversified” economy.
Objectives of Industrial Park
The objective behind an INDUSTRIAL PARK is to enhance foreign investment, increase exports, create jobs and promote regional development. To put in the government’s own words, the main objectives of the Industrial Park are:
(a) Generation of additional economic activity;
(b) Promotion of exports of goods and services;
(c) Promotion of investment from domestic and foreign sources;
(d) Creation of employment opportunities;
(e) Development of infrastructure facilities.
Bio-IT Knowledge Center -Project Description
The 21st century has been acknowledged as the era of knowledge industries such as Information Technology (IT) and Life Sciences. Application of advance IT and biotechnology functions and techniques have become an imperative part of the complex drug discovery cycle. Their convergence is leading to the emergence of novel technologies and niche industry segments such as Bio-IT, with a potential to revolutionize the global business scenario.
Bio-IT represents the marriage of life sciences and Information Technology (IT) and has evolved as a result of convergence of several disciplines of science namely biology, biochemistry, molecular biology, bio statistics and computer science.
“Bio-IT Knowledge Center” would be a geographic cluster of industry (IT & Life Sciences), research institutions and sci-tech academia and would address the IT related needs of the rapidly emerging life sciences industry and is expected to attract investments (both domestic and foreign) in the related areas.
The Center would be set up on over 200,000 sq m of land and would be design in such a manner so as to accommodate companies of all sizes and stages of development. The center would provide developed plots for large and Integrated Bio-IT companies to set up their campuses and ready-to-use modular offices, wet and dry lab space for intermediate, small and start up companies. The two critical components of the knowledge center would be an “Incubation Center” and a “Technology Development Center”.
The Incubation Center (IC) would provide critical enabling infrastructure to start-up Bio-IT companies and would assist them in the initial years (incubation period 2-3 years) to acquire a critical mass and become self sustainable. Once profitable the company will move out and venture on its own.
Technology Development Center (TDC) would facilitate the Small and medium size IT players, inventors and entrepreneurs in the State, to start, expend or make their business more competitive in the marketplace. TDC would provides direct assistance or locates outside resources to help with business development, operations, sales and marketing, workforce development, technology advancement and integration, and entrepreneurial initiatives. TDC would foster links with key research and academic institutions in the State and would facilitate in the commercialization of pioneering inventions and technologies developed in these institutes. TDC would also provide operating assistance and management consultancy regarding the technology valuation and transfer, Intellectual Property protection, patent and a range of financial, marketing, human resource and other support functions. Following would be the focus area and prospective tenants of the envisaged Knowledge Center.
Focus Area Prospective Tenants
Bioinformatics –Drug discovery Companies
Chemoinformatics– Pure play Bio-IT companies
Pharmacogenomics — Biotechnology companies
Clinical informatics– IT companies with focus on human health
Molecular modeling– Service providers to life science companies
Bio engineering
Bio simulation
Proposed Facilities
The Knowledge Center would provide following facilities to its tenants:
Dry & Wet Labs –Technology Transfer Cell
Computational Biology Labs– IT Center
Digital Imaging Center– Central Instrumentation Center
Virtual Reality Center–Business Center
Bio-IT Software and Database Library– Administrative Center
Intellectual Property Cell – D G SET
Manufacturing Companies
Pharmaceutical Ware-housing and Logistic Facilities
Major Issues and Challenges Arising from Topography, environment and weather conditions
• Water
• Agriculture
• Environment
• Health
WATER CHALLENGES FOR THE REGION
Limited water supplies of variable quality
Increasing gap between demand and availability
Lack of a comprehensive strategy for water resources
Fragmented institutional framework
Limited enforcement of legislation to protect water resources
The Desalination and Advanced Water Reuse becomes and extremly important tool in the Integrated Water Management. The establishing optimized models and example of effective implementation of desalinated projects trough IWPP will provide in short term the critically needed desalinated water.
To meet the challenge, large-scale dual-purpose power/desalination plants are built to reduce the cost of production of electricity and water. Thermal energy extracted or exhausted from power plants is used effectively in the desalination process. In the author’s estimate, over 30,000 MW of power is combined with desalination plants in the largest use of the cogeneration concept.
There are unique conditions in the many arid countries and particularly in the Gulf where peak demand for electricity rises significantly during summer mainly because of the use of air-conditioning, and then drops dramatically to 30-40% of summer capacity. This creates situation that over 50% of power generation are idled. In contrast, the demand for desalinated water is almost constant. Water can be stored while electricity storage is not practical.
Cost-effective integration of three proven technologies, desalination, power and aquifer storage recovery (ASR) can secure a reliable, sustainable and high-quality fresh water supply for the Gulf States. The seasonal surplus of unused idle power could be used by electrically driven desalination technologies RO and Hybrid Systems including NF/RO/ MSF process in combination with ASR creating a system of Desalination/ Aquifer Storage and Recovery (D/ASR). The ability to store and recover large volumes of water can contribute to the average downsizing of power and water facilities with substantial operational cost savings. D/ASR provides strategic reserves of potable water, to prevent damage or depletion to existing oasis or aquifers, for controlling salt-water intrusion, or improvement in water quality. D/ASR is of strategic importance to the Middle East
Desalination remains the main source of water in the Gulf and the idea is catching on elsewhere. Gulf demand continues to drive desalination spending
GCC states are to double installed capacity over the next decade, while North Africa is emerging as one of the fastest growing markets for the technology.
Governments are increasingly turning to the private sector to bring contracting and technical expertise, technological and commercial innovation, and private finance to projects. The build-operate-transfer (BOT) model is gaining acceptance for Greenfield and Brownfield projects across the region.
The installation of new desalination capacity will require worldwide expenditure of at least ,000 million over the next decade, according to a recent report by London-based Global Water Intelligence (GWI). Unsurprisingly, the vast majority of spending will be accounted for by the Middle East. The combination of rapidly growing populations, depleted ground water resources and the retirement of old desalination plants built during the oil boom era of the 1970s and 1980s will require regional capacity increases of more than 150 per cent by 2015, raising concerns about the ability of some governments to finance the shortfall.
Ideas;
It requires that all of us continue the search for better technical and economical solutions to make desalination and water reuse available to all the people of the global village. We need to lead research and development to new solutions for membrane, distillation, hybrids and new alternatives. We need to better integrate energy, power, and water. We have to look for new ideas on energy recovery, storage of water, and more effective materials and chemicals. We have to learn how to extend the life of existing plants and upgrade existing desalination facilities.
Many Water Forums and Conferences and Workshops will take place in the Gulf Region to come implement many novel and optimized solutions.
Costs;
The day came when the cost for seawater desalinated dropped to below 50 ¢/m³ but our goal is to make desalinated water available for global community at affordable cost.
The challenge demands that all of us recognize the compelling need to adopt new pioneering ideas utilizing advanced technologies to further reduce the cost of desalination plants and to better match the power and water needs.
Agricultural Biotechnology
Biotechnology is the application of scientific techniques to modify plants, animals, and microorganisms. Agricultural biotechnology applies genetic engineering methods to agricultural products. These procedures directly change the DNA of the plant, usually by inserting genetic material from another organism.
Agricultural biotechnology is playing an increasingly important role in. Biotechnology is being used to protect from a virus. Seed growers, a major supporter of biotechnology, have become a significant source of income.
Agricultural biotechnology is a revolutionary tool that is transforming the agricultural sector. It has the potential to spur economic growth, increase productivity in the agricultural sector, reduce hunger and malnutrition, and lessens the environmental impact of agricultural production.
Public perception and understanding of agricultural biotechnology;
• Legal considerations related to the use of agricultural biotechnology;
• Public and private sector relationships in agricultural biotechnology; and
• Effective collaboration with other APEC fora
The HLPDAB works closely with the APEC Agricultural Technical Cooperation Working Group’s (ATCWG) Sub-group on Research, Development and Extension of Agricultural Biotechnology (RDEAB). RDEAB is focused on developing transparent, science-based approaches to agricultural biotechnology. It’s work includes capacity building activities and research on the effects of gene flow and genetically modified crops; and it encourages dialogue between the private and public sectors to promote research and the development of biotechnology.
The first high level policy dialogues on agricultural biotechnology took place in 2002.
Environmental Biosensors
The development of new biosensors, systems that use living organisms to detect environmental contaminants, has the potential to change the way in which environmental quality is monitored. Currently, environmental samples must be collected and taken to a laboratory where contaminant concentrations are determined. This is an inefficient, labor-intensive process that can result in contamination going unnoticed for a critical period of time. Plants and microorganisms are being developed that exhibit a quick, detectable response to low levels of contamination. These biosensors can be maintained on-site where they can monitor conditions constantly. For example, biosensors could be used in the soil or water outside of factories to ensure that discharge from the factory was acceptable at all times or at nuclear reactor sites to make certain that radioactive materials were not being released into the environment.
Biosensors may one day be used to detect forgotten landmines in war-torn countries by genetically modifying plants to be responsive to the explosive TNT, which is present in the soil near landmines. The United Nations estimates that worldwide there are approximately 110 million unexploded landmines, which kill or maim approximately 26,000 people per year. The theory is that by sowing, maintaining, and monitoring these TNT-detecting plants using planes or helicopters, it will be possible to identify the location of landmines. It is hoped that this method would replace the current procedure used in developing countries to locate landmines, which uses individuals with sticks to search suspected areas.
Biotechnology and the Environment
Even under the best of conditions, food production for hundreds of millions of people can take a toll on the environment. Erosion can claim precious topsoil, farm chemicals sometimes reach streams, rivers and groundwater supplies, and livestock can deplete grazing lands. Wetlands and other sensitive habitats sometimes get ploughed under for use as farmland. And, in the world’s tropical forests where an estimated 90 per cent of the world’s species exist, farmers clear trees in order to provide food and a living for their families.
By improving many aspects of modem agriculture, biotechnology can help alleviate many of these pressures on the land, both by preserving natural resources and reducing environmental stresses.
Increasing a Crop’s Ability to Fight Pests and Diseases
Biotechnology can be used to confer in-built resistance to pest and diseases. To protect against insect damage and minimize the amount of insecticides on crops, biotechnology has modified plants such as tomato, potato, corn and cotton, to protect themselves against insects, rather than relying solely on surface application of pesticides.
Resistance to plant diseases is also possible. Plant viruses of varying kinds often claim up to 80 per cent of many crops. In the same way vaccines immunise humans against various diseases, biotechnology allows modern breeders to insert small fragments of plant viruses into crops, which develop natural protection or immunity against those viral diseases. The immunity is passed on to future generations of plants.
This has enormous implications for world food production.
• Using biotechnology, growers will only need to plant one or perhaps two acres – instead of five acres or more – to ensure one acre’s worth of harvest. This obviously means far fewer agricultural inputs such as fuel, labour, water and fertiliser.
• Insecticide sprays required to kill the aphids and other pests that transmit most viruses would be reduced or eliminated. This benefits the environment while increasing yield and food quality.
• Viral protection for plants will help growers of watermelons, cucumbers, potatoes, tomatoes, lettuce, alfalfa and squash, as it has already increased yields for papaya farmers.
Reducing Overall Chemical Stress on the Environment
Many of today’s fungicides, herbicides, insecticides and other pesticides are better, safer and more environmentally sensitive than older versions. Even so, they sometimes enter the air, soil and groundwater when they blow or wash off plants. Biotechnology can achieve many of the goals for which pesticides were designed, often more efficiently.
Farmers recognize more than anyone that healthy growing environments define their future. Thus, they seek better ways to control weeds with the least toxic herbicides available that do not damage food crops. They also strive to reduce their use of insecticides and fungicides, limiting their own exposure to the chemicals. And growers have strong economic incentives to reduce agricultural inputs thereby reducing their costs.
Saving Valuable Topsoil
Erosion of topsoil by wind and water can be cut by more than 70 per cent – in some cases up to 98 per cent – when farmers use no-till techniques, meaning they do not plough under weeds and crop residues after harvesting or before planting. Biotechnology can help reduce the need for tilling.
The Nitrogen Burden
Even though the Earth’s atmosphere contains about 78 per cent nitrogen, most crops have no mechanism to use this natural nitrogen. Therefore, farmers depend on added fertilisers to provide the nitrogen necessary to boost crop yields. But crops only use about 50 per cent of the more than 60 million pounds of nitrogen fertilisers added to them each year. The excess nitrogen can cause environmental problems in soil and water.
Growers have long recognised and used the innate abilities of legumes like soybeans to “fix” nitrogen, which means to use the natural nitrogen in the soil and air. These natural nitrogen fixers replenish the nitrogen supply in the soil from which they were harvested. The desire among breeders to develop other crops that can “fix” their own nitrogen, has put such plants high on researchers lists.
Should breeders succeed in creating the “self-fixers,” they would:
• allow farmers to decrease their use of synthetic fertilisers while maintaining bountiful yields;
• result in less nitrogen from fertilisers remaining in the soil to degrade and leach or run off into the water;
• greatly enhance productivity in many regions of the developing world whose farmers cannot afford nitrogen fertilisers.
Plant Biodiversity
Of the more than 80,000 species of edible plants known to exist, humans cultivate only about 300 of them. Of those, only about 12 have emerged as major staples. Through genetic modification, crop breeders can:
• Increase the use of plant species by using biotechnology to discover which genes of value reside in which plants and then transferring those genes into crops now in use around the globe.
• Expand the genetic variation in staple crops by breeding into them desirable traits from previously unavailable sources. This will not affect the relatively narrow genetic lineage of many crops in the near term. Longer term, it will significantly expand the gene pool used in modern agriculture and thus reduce the relatively low, but real, risk of crop failures.
• Expand many wild relatives of modern crop plants that might be threatened with extinction.
• Finally, enable scientists to learn what important genes are actually contained in the millions of plant specimens housed in gene banks around the world.
Health
Biotechnology in healthcare
The tools and techniques of biotechnology have opened up new doors when it comes to researching and learning more about the human body and what goes wrong with it when problems arise. Due to being able to understand the molecular base of health and disease this has lead scientists to improved methods of treating and preventing those diseases.
Biotechnology has made a huge difference in human health care and has now enabled scientists to develop products which can give quicker and more accurate tests, therapies that have a lot less side effects and vaccines which are safer than ever before.
Diagnosing and biotechnology
Medical conditions and diseases are now being detected more accurately and quickly due to the advancement of biotechnology based tools, an example of the benefits biotechnology has brought us, and one which most people will be able to relate to, is the home pregnancy testing kit.
The new generation of home testing kits is able to provide results which are more accurate and are able to be used much earlier than the ones a few years ago.
Illnesses such as strep throat and other infectious diseases are now diagnosed within minutes enabling treatment to begin at a much earlier time where previous tests could take a few days.
In just a few decades, the science of biotechnology has grown into a health care powerhouse.
Today, the industry is delivering hundreds of therapeutics and vaccines for deadly ailments, including diabetes, cancer and cardiovascular disease that affect millions and treatments for rare disorders that afflict only a few thousand people worldwide.
The future looks even brighter with promising compounds in advanced clinical testing and countless early-stage technologies—such as stem cells and RNA interference— creating still more possibilities. It’s no surprise that health is biotech’s largest application area, and the Biotechnology Industry Organization (BIO) represents the world’s largest group of biotechnology companies, academic centers, associations and other organizations working every day to bring groundbreaking advances to the public. These advances extend to enlisting biotech drugs and biotech diagnostics to design tailored treatments for individuals—making health care more predictive, preventive and precise.
BIO’s Health Section is where these biomedical innovators find the advocacy and business support they need to continue bringing the world the lifesaving and life-enhancing therapies that only biotechnology can provide. We work
Written by Zia Ahmed
Investment Banker, Islamic Banker
