On October 9, 2025, the Bologna Institute for Policy Research hosted a seminar titled "New Economic Challenges Facing the Middle East in the Trump Era", featuring Dr. Raed Safadi, Partner and Chief Economist at Whiteshield. In a wide-ranging and thought-provoking address, Safadi argued that the Middle East stands at a critical crossroads. Once defined by resource exports, the region must now evolve from a passive supplier into an active orchestrator of flows of goods, capital, energy, and increasingly, data, in a world that is shifting from efficiency to resilience, control, and rules.

He identified four megatrends reshaping this transformation: trade fragmentation, divergent financial cycles, the energy transition, and the AI revolution. Trade policy has become a tool of statecraft rather than a quest for efficiency, as tariffs and export controls redraw supply chains into competing blocs. In this context, connectivity and regulatory interoperability have become the new currencies of trade power. At the same time, asynchronous monetary cycles in which the United States eases, China injects liquidity, and Europe remains tight are testing the agility of dollar-linked economies in the Gulf and demanding new fiscal and analytical intelligence.

Safadi emphasized that the energy transition is redefining comparative advantage, turning oil wealth into renewable and technological capital, while AI is emerging as both an engine of productivity and a compass for policy foresight. Together, these forces compress the margin for policy error and require a shift from reactive stabilization to anticipatory governance.

The path forward, he argued, lies in transforming connectivity into rule power. The Middle East can leverage its geographic position to act as a regulatory bridge, aligning with multiple blocs while promoting interoperability in trade, finance, energy, data, and human capital. By building digital freeports, deploying AI-enabled fiscal and customs systems, and investing in adaptive skills, the region can convert volatility into strategy.

Safadi concluded that in a fragmented world, the Middle East's most valuable export will be trust, which forms the foundation of its future influence and the key to transforming fragmentation into a new architecture of interdependence.

During the discussion, participants asked how cohesive the Gulf Cooperation Council (GCC) states are in responding to these structural megatrends and how prepared they are to align with them. In response, Safadi pointed to steps already taken to deepen cooperation and policy coordination, including bilateral initiatives such as economic partnership agreements and emerging UAE–Saudi collaboration on AI and technology policy. He noted that these efforts are advancing progressively, segment by segment, rather than through a single comprehensive regional framework.

In a follow-up interview after the event, Safadi reflected on the broader global context, noting that recent shifts in international trade and technology policy have influenced the pace of economic transition across the Middle East and North Africa. He observed that the effects differ across the region: oil-exporting economies, with greater fiscal space and investment capacity, are accelerating diversification and deploying resources toward green and digital transformation, while oil-importing economies face tighter financial constraints and rely more heavily on external financing and market access. Because many of the technologies driving this transition are concentrated in advanced economies, evolving policy environments have occasionally limited access and slowed adaptation. Even so, Safadi emphasized that the region as a whole has the potential to turn disruption into opportunity by deepening diversification, investing strategically in human capital, and shaping the governance of the flows that will define the global economy of the future.

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hosted by Professor Michael G. Plummer


Raed Safadi is a leading expert on development economics and has extensive experience advising governments on economic policy and management. He joined Whiteshield after seven years (2015-2022) as Chief Economist at Dubai's Department of Economy & Tourism where his responsibilities during the last 2 years included developing policy options and initiatives in support of post-Covid19 pandemic recovery plans, and promoting the diversification and sustainable growth of Dubai and its transformation into a knowledge-based economy.

Raed started his career at the World Bank in Washington, and then moved to the OECD in Paris where he was, successively, senior economist, principal economist, Head of Division, and Deputy Director of the Trade & Agriculture Department (2008-2015). Raed's thirty years of experience span the Middle East, North Africa, China, and the G20, where he led senior-level policy dialogues and advisory to governments, UN agencies, the WTO, and regional development banks.