21 Mideast cities to generate annual GDP of $2.4t: Lloyd's

Abu Dhabi - Abu Dhabi and Dubai are among the Middle East's 16 largest centres of economic growth where $367 billion of GDP is at risk from a series of threats over the next decade.

In the Middle East, 21 cities will generate an average annual GDP of $2.4 trillion in the coming decade, according to new research for Lloyd's, the specialist insurance market.
The report also pointed out that 15 per cent of this economic growth is at risk from the combination of 18 manmade and natural threats. The list of cities covered by the index are Abu Dhabi, Ahvaz, Amman, Baghdad, Beirut, Damascus, Doha, Dubai, Esfahan, Jeddah, Occupied Jerusalem, Karaj, Kermanshah, Kuwait City, Mashhad, Riyadh, Sana'a, Shiraz, Tabriz, Tehran, and Qom.
Abu Dhabi and Dubai are among the Middle East's 16 largest centres of economic growth where $367 billion of GDP is at risk from a series of threats over the next decade. "In the financial trading hubs of Dubai and Abu Dhabi, market crash is the greatest exposure accounting for almost half of the GDP at risk," says a new study, the Lloyd's City Risk Index, which has analysed economic output and GDP at risk in 301 major cities from 18 manmade and natural threats over a ten-year period.
"The study shows that a market crash is the greatest economic vulnerability and this is also true in the Middle East, where $143 billion could be at stake," said Mark Cooper, Lloyd's Middle East general representative. Based on original research by the Cambridge Centre for Risk Studies at the University of Cambridge Judge Business School, the Index finds that a total of $4.6 trillion of projected GDP is at risk from manmade and natural disasters in these cities around the world.
Lloyd's has produced this Index to help increase the understanding of, and shape the world's response to, the shifting risk landscape.
The Index, which will be updated every two years, is aimed at stimulating further discussions between insurers, governments and businesses on the need to improve resilience, mitigate risk and protect infrastructure.
Across the region, the largest GDP exposures are to market crash $143.3 billion, earthquake $85.17 billion, human pandemic $41.40 billion, sovereign default $30.16 billion, and terrorism $25.68 billion.
Tehran has the most GDP at risk with $64 billion exposed, more than half of this $34.5 billion is from earthquake as the city lies on several major fault lines.
Riyadh has the most GDP at risk from human pandemic in the region at $5.16 billion reflecting the flow of almost two million pilgrims who make Haj each year. Globally, the Index identifies three important emerging trends in the global risk landscape: Emerging economies will shoulder two-thirds of risk related financial losses as a result of their accelerating economic growth, with their cities often highly exposed to single natural catastrophes.
New or emerging risks, such as cyber-attack, are also increasingly significant. Together, they account for more than a third of the total GDP at risk with just four - cyber-attack, human pandemic, plant epidemic and solar storm - representing more than a fifth of the total GDP at risk. Inga Beale, CEO of Lloyd's said asked the governments and businesses, together with insurers, must work together to ensure that this exposure - and the potential for losses - is reduced.
They need to think about how they can improve the resilience of infrastructure and institutions. Insurance is part of the solution.
- haseeb@khaleejtimes.com