Four reasons for optimism about the Gulf business outlook

First, oil prices are heading for their best year in two decades. This will fill the coffers of the GCC Oil States. Already we are starting to see larger infrastructure spending projects, particularly in the oil and gas sector.

Secondly, it may be premature to judge but the crackdown followed by amnesty for terrorists in Saudi Arabia appears to have worked. Violent incidents are dramatically down, while half the wanted list has now been apprehended.

Next year will likely see the admission of the Kingdom to the World Trade Organization, the last GCC country to enter. This followed an agreement with the European Union last year to open up telecommunications and financial services.

The bidding process now underway for the second Saudi mobile phone license is one direct result. The new Capital Markets Authority is another, and the CMA is set to create the new Saudi Arabian Stock Exchange with greater transparency and openness to foreign investment.

Thirdly, the interim government in Iraq is beginning to get to grips with the insurgency security crisis. The hard line policies of Prime Minister Iyad Allawi should begin to re-establish security in Iraq.

Then the billions of dollars in funds committed to the reconstruction of Iraq can be spent. This will result in major economic boom for the Gulf nations trading with Iraq.

Finally, a particular phenomenon of this oil boom in the GCC is that much of the money is being re-invested locally. Whether we look of the Bahrain Financial Harbour project, or the Dubai International Financial Centre, we see billions of dollars being invested in local real estate.

Likewise at the individual investment level many Gulf nationals and residents are investing in their own future. This is witnessed in the booming local stock markets and the rapid rise of the new freehold real estate sector in Dubai as well as in the property sectors in Saudi Arabia and Kuwait.

It is surely a mark of a genuine economic expansion, rather than a transitory boom, that residents and citizens are prepared to invest their own money locally. This is probably the best reason to be optimistic about the business outlook for the Gulf region.