Arab nations face rating dip due to regional instabilities
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KUWAIT CITY, April 7: The Arab Investment & Export Credit Guarantee Corporation “Dhaman” revealed a decrease in sovereign ratings and political, economic, financial, and operational risk ratings of most Arab countries in 2023, according to 30 indicators issued by 15 major credit rating and risk assessment agencies around the world. The Director-General of “Dhaman” Mr. Abdullah Ahmad Al-Sabeeh, explained in the editorial of the first quarterly bulletin “Dhaman Al-Istethmar” for 2024, that this disparity was the reflection of regional events in 2023, including the escalation of political happenings, the aggression on the Gaza Strip and continued armed conflicts in Sudan, Yemen and several Arab countries, in conjunction with growth slowdown due to the decline in oil production and revenues and the surging crises of the high-cost of living and debt crisis.
Al-Sabeeh emphasized that “Dhaman”, based on its awareness of the paramount significance of the indices of sovereign and risk ratings in showing how much multinational companies, and finance, investment, and trade institutions are interested in Arab countries, continues to monitor around 30 indicators of sovereign ratings and political, economic, financial and operational risk assessment issued by 15 specialized international agencies, and compare them with the previous year. Key conclusions come as follows:
■ Sovereign ratings stabilized in 4 Arab countries, and improved in Qatar, UAE, Saudi Arabia, and Oman, compared to a decline in the rating of Morocco,
Al-Sabeeh noted that despite the reservations of the corporation and some regional governments and institutions about a number of these ratings issued by international agencies of sovereign and country risk assessment, this does not disparage the fact that they are significant and should be monitored. The aim is to improve the position of Arab countries and stand as a significant step towards developing the investment climate and business environment in the region. In this context, he emphasized the corporation’s readiness to play its role in compiling specialized and comprehensive reports on Arab countries’ situation, while underlining the significance of communication with research teams entrusted with issuing the indices of sovereign ratings, and political, economic, financial, and operational risk ratings to improve the ratings of the region’s countries and contribute to include the Arab countries that have been excluded from these ratings.
Based in Kuwait, the Arab Investment & Export Credit Guarantee Corporation (Dhaman) was established in 1974. It comprises as members all the Arab countries and four joint Arab financial institutions. It provides specialized insurance services against credit and political risks to facilitate the inflow of foreign direct investments into Arab countries and promote Arab exports and imports.
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