According to HSBC, one of the world’s largest banking and financial services organizations, Middle East cities such as Abu Dhabi, Dubai, Cairo and Riyadh are expected to set the benchmark as potential global hubs in the post pandemic era.
The HSBC City Reports released recently states that remote working, distance learning, telemedicine, eCommerce and online media content are among the key areas for these cities to prioritize in the post-pandemic period.
As driving greener economies, resolving disparities, diversifying supply chains, prioritizing health and harnessing technology become key priorities following the COVID-19 pandemic, Middle East cities are set to lead the way, the report points out.
The report, focusing on Abu Dhabi, Dubai, Cairo, Riyadh and Istanbul, highlighted the need for governments and business leaders to strive forward towards diversified, more digitized, safer and greener cities in the aftermath of the pandemic.
“Their next chapter of growth will depend on how effectively they can work together as a network and on the individual ability of their economies to drive climate and sustainability-oriented innovation, reinvented trade flows, and the pursuit of human health and happiness.”
The pandemic is the worst crisis that struck the global economy since the Great Depression of the 1930s. International trade has been disrupted, air travel hindered while businesses have been forced to lay off employees to cut costs due to the global health crisis.
Lessons from the pandemic
According to the HSBC reports, the pandemic is expected to have many long-term socio-economic effects that could reshape the way businesses and individuals consume, create value and interact.
The report revealed that pandemic-triggered lockdowns have demonstrated the need to strengthen trading relationships and develop more stable supply chains.
“The current debate suggests global cities could see near or re-localization of production facilities for priority industries and increasing use of digital supply networks and AI to ensure maximum supply chain resilience,” the report said.
In midterm, domestic development of essential goods, such as supply chains for vaccines, medications, pharmaceuticals and protective equipment, and food and beverages, is being prioritized by global cities. Local production can concentrate on sectors on which the cities already have a base of specialist skills and facilities that they can develop on.
In May, as part of its push to nurture the UAE’s manufacturing base and tackle the COVID-19, Mubadala Investment Company, Abu Dhabi’s strategic investment arm, joined hands with industrial company Honeywell to manufacture N95 face masks in the country. It manufactures approximately 90,000 masks a day and have a production capacity of more than 30 million masks a year.
In global cities, the pandemic has also increased the rapid acceleration of digital transformation through services such as telemedicine, distant learning and remote work.
“As we adjust to the new normal, the longevity of these trends could have huge implications for real estate, mobility and spatial flows between city centers and city fringes,” the report said.
The COVID-19 also highlighted the importance of happiness and well-being, with an increasing demand for combined health, climate and biodiversity policies.
This implies demand for more public health-related spending, including better basic insurance coverage, enhanced medical facilities and increased hospital capacity flexibility, to be increased if necessary, the report said.
“We are likely also to observe the rapid development of remote healthcare, including the increasing use of telemedicine and adoption of digital and remote healthcare technologies” such as tracking devices, monitoring apps, and wearable consumer healthcare devices, HSBC said.
Increased focus on environment
The pandemic has also broadened public support for an environmentally-responsible future. “There is more pressure than ever before for governments to produce decarbonizing low-emission tech pathways, by investing in green energy, power efficiency and optimized storage. There is optimism that cities around the world could adapt and adjust to some of these ‘better’ behaviors for the long-term,” HSBC said.
A new way of thinking
According to the report, the health crisis is also pushing cities to reconsider the management of new shared public spaces and counter the social, economic and ethnic inequalities that have been magnified.
This “new normal” would create a new range of business and investment opportunities across various sectors and geographies as sectors re-open, introducing new innovations and business models, HSBC said.
The Middle East cities highlighted in the report are set to lead as future global hubs, the report said.
“Their next cycle has the potential to see them become global centers for reinvented flows of trade, more resilient supply chains and revised business models led by digital transformations, which dovetails with HSBC’s priorities in supporting our clients and communities to build back better across the region,” Daniel Howlett, regional head of Commercial Banking for HSBC in the Middle East, North Africa and Turkey, said.
The HSBC City Reports are part of a larger campaign for Future Cities initiated by the bank throughout the region, which also involves illustrating the report through street arts that captures the elements of the next development cycle of each city while paying tribute to its heritage.