Transitioning to the new normal Middle East Updates · 2020. 8. 18. · Less funding for research Highlights from PwC’s paper on trends in Education post COVID-19. PwC Middle East

PwC Middle East - Webcast Series 18 August 2020

Transitioning to the new normal

Middle East Updates

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PwC Middle East - Webcast Series - 18 August 2020

Helpful resources

PwC ME COVID-19 website - prior webcasts, insights and resourceswww.pwc.com/me/covid-19

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http://pwc.com/me/covid-19

Our focus for today

Welcome

Stephen AndersonStrategy and Markets LeaderPwC Middle East

Economic update

Richard BoxshallChief Economist PwC Middle East

Q&A2020 Capital Projects and Infrastructure survey

Maarten WolfsCapital Projects and Infrastructure Leader, PwC Middle East

Andrew SteadPartner - Capital Projects Services, PwC Middle East

What’s next for the Education sector in the Middle East

Sally JefferyGlobal Education LeaderPwC Middle East

Quick poll

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1 Economic update

Richard Boxshall


Dubai showed positive non-oil GDP growth momentum in Q1, in otherwise gloomy data

6Sources: Statistical agencies, MENA advisors


Non-oil private sector activity has stabilized, as regional economies move to the recovery phase

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Expansion

Contraction

● PMI indicates non-oil private sector activity

● KSA and UAE have stabilized around 50 indicating they are neither contracting or expanding

● Dubai (not shown here) registered a PMI of 51.7, suggesting the economy is benefiting from the easing of restrictions

Commentary

Sources: IHS Markit


Consumer demand in KSA has rebounded across many sectors

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Sources: SAMA

● Point of Sales (PoS) is a consumer spending indicator reported weekly and monthly

● PoS hit a low point in April and has remained weak until a rebound that began in May

● While positive, it will be exaggerated by consumers trying to get ahead of the VAT hike (July 1st)

Commentary


Risks to the recovery

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Second wave of COVID-19

Oil price dip

Global investor sentiment

Concerns around flying

2 What’s next for Educationin the Middle EastSally Jeffery


COVID-19 outbreak will fundamentally change education provision

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“The COVID-19 outbreak has been like a meteor striking a gently spinning ancient planet”

Over 1.5 bn students in 188 countries were suddenly studying online - assuming they had access..

Universities are seeing a 25-35% reduction in net fee income largely due to a drop in international students

School fee refund pressures from parents - on a cost base that is 60-70% teaching salaries

Head Office (Academic & Institutional Governance)

● Assessment & compliance challenges

● Long term challenges to traditional governance models

Operations & Supply Chain

● Reduced resilience in key functions, infrastructure and services, or locations becoming unavailable

Workforce

● International collaboration● Contract dependent layoffs ● Lab staff displaced ● Teacher & faculty digital

delivery skills

Customers (students)

● K-12: Schools to return following a hybrid model and strict protocols

● Higher Education: completely redefined, less international, less physical, fluid academic calendar

Technology Enabled Delivery Model

● Omni-channel technology enabled education

● More “on-demand” access to learning

● Students on different time zones

Sales Decline / Refunds

● Cash flow, covenant issues● International student flows● Endowment return, drop in

philanthropy ● Less funding for research

Highlights from PwC’s paper on trends in Education post COVID-19

PwC Middle East - Webcast Series - 18 August 2020 12

Dramatic shifts in international mobility - students and faculty

Improving the quality of on-line offerings and assessments

Private sector sustainability

Providing a safe campus and realistic academic calendar

Public sector funding

Communicating effectively on regulation changes and guidelines

Sector consolidation

Student engagement and employability

Research challenges - funding and collaboration

Programme offering gaps

Which issues are dominating reform to the Middle East education sector?

Increasing popularity of skills and micro credentials

Ensuring equitable access - bandwidth and hardware

3 2020 Capital Projects and Infrastructure surveyMaarten WolfsAndrew Stead

PwC Middle East - Webcast Series - 30 June 20201

pwc.com/me/cpi-survey-2020

2020 PwC Middle East Capital Projects and Infrastructure Survey


March

3rd

February April

Pre-COVID-19 During COVID-19

Respondents profile at a glance

40%Operate within the energies & utilities sector

18%Transport

19%Engaged in urban development

22%C-suite positions

33%Heads of Department / Senior Management roles

We conducted our survey before and during COVID-19

≥500EmployeesLarge organisations

<500EmployeesSmall organisations

Role and organisation size Sectors


Key challenges facing the industry

Internal challenges faced when working on major projects

Source: 2020 PwC Middle East Capital Projects and Infrastructure Survey

37%

Funding and finance

52%

Risk and change management

40%

Financial performance

38% of major projects ran over budget in the last 12 months


Key challenges facing the industry

External challenges faced when working on major projects



How COVID-19 impacted the results...


50% of overall respondents believed market volatility to be a major external challenge….

External challenges faced on major projects Market Volatility


Digital and tech are key drivers for change

66%believe AI and machine learning will be one of the top 5 technologies to disrupt the sector in the next 2 years


48% of smaller organisations see cost as a major barrier to adopting new technologies


The need for alternative financing grows

Public Private Partnership activity has rapidly increased across the region83%

believe in the importance of private sector funding to support infrastructure projects across the region


● Since January 2020, Oman’s Public Authority for Privatisation and Partnership (PAPP) has issued a number RFPs for harbours, hospitals, highways, schools and government offices

● Abu Dhabi Investment Office’s PPP Centre of Excellence was created last year and has since announced projects worth around 10bn Dirhams

● More recently, Qatar’s new PPP law aims to facilitate private investment in a pipeline of projects covering number of sectors

● Kuwait and Dubai are launching previously suspended projects such as the Az Zour North 2 and 3 IWPP (Kuwait) and the Dubai Cardiac Centre of Excellence


Future considerations


Q&A


Stephen Anderson Strategy and Markets Leader

Contact us

Richard BoxshallChief Economist

Maarten WolfsCapital Projects and Infrastructure Leader

Sally JefferyGlobal Education Leader

PwC Middle [email protected]




Andrew SteadPartner Capital Projects Services


pwc.com/me

Thank you

This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.Established in the Middle East for 40 years, PwC has 22 offices across 12 countries in the region with around 5,600 people. (www.pwc.com/me).PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

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Transitioning to the new normal Middle East Updates · 2020. 8. 18. · Less funding for research Highlights from PwC’s paper on trends in Education post COVID-19. PwC Middle East