by Saifur Rahman

12-12-07 A weakening US dollar and the subprime crisis in the US housing market poses a threat to the global petrochemical industry, among others, while a shift in global development paradigm is creating opportunities in Asia, Mukesh Ambani, chairman and managing director of India's Reliance Industries, told delegates at a petrochemical conference.
"The recent slowdown in the US economy due to the subprime crisis and a weakening US dollar is creating a challenge to the rest of the world financial markets, including the petrochemical industry," Ambani, who heads India's largest conglomerate, said. "After the Latin American and Asian financial crises, a lot of people predicted that the next crisis would come from China and Asia. However, no one predicted the crisis from the US."

He said a change in the global economic landscape is giving rise to opportunities as the balance is shifting towards Asia, especially India and China.
"We are at a defining moment in the history of the mankind as 5 bn people, who have been deprived benefits of global economic growth, will soon join the new consumer class," he said. "A shift in the global development paradigm will bring 1.6 bn people deprived of electricity to light and empower them.”

Globalisation of opportunities is driving globalisation of economy. Within Asia, China and India are driving this tectonic shift.
"Consumption-led growth is propelling Chinese and Indian economies to new heights, leading to rising demand that is reflected in the recent energy prices. Crude oil prices are continuing to rise relentlessly while price of feedstock and petrochemicals will continue to move upwards."

Petrochemical products in Saudi Arabia will nearly double to 17.6 mm tpy by 2012 from the current level of 9.4 mm tpy while in the UAE, it will rise to 2 mm tpy by 2012 from the current production level of 1.4 mm tpy. Per capita consumption in India is among the lowest in the world.
"An increase in end-user consumption will create a larger growth in GDP and India's growth rate would outshine that of China in the coming decade," he said.

He said the free business environment of Dubai is a great example of how to tap opportunities.
"It’s a great example of how human ingenuity could convert a geographical diversity into an economic opportunity," he said. "The petrochemical industry has much to learn from Dubai." An 80 % fall in the number of petroleum engineers in the US is an indication that the industry is losing talents, he said.
"Investment in research and development in the petrochemical industry has been minimal. As a result, we have been losing talent," he said. "Oil industry must take the initiatives to attract talent."