For more than three decades, Vijay Malhotra has played a pivotal role in developing the UAE’s culture of corporate governance. In a wide-ranging interview, the KPMG Lower Gulf chairman explains why he is more excited than ever about the country’s economic outlook.
Vijay Malhotra has been in the Middle East for 35 years, although it is fair to say he had a rocky start to life in the region.
After leaving his native India to study in the UK, the young accountant secured a position with KPMG’s Iran affiliate in 1976. Not long after, though, he found himself the victim of history with the dawning of the country’s Islamic revolution, leading him to head back to London.
Determined to have another crack at the Middle East, Malhotra soon found himself back in the region, taking up a position again at KPMG in the at-the-time little-known trading hub of Dubai.
Since arriving on the UAE’s shores all those years ago, Malhotra has played nothing less than a pivotal role in developing the Gulf state’s fledgling culture of corporate governance. While at KPMG, known as one of the ‘big four’ global auditing networks, the firm’s client list has become a who’s who of the UAE’s top corporations and institutions. These include sovereign wealth funds Abu Dhabi Investment Authority and Mubadala Development, National Bank of Abu Dhabi, Etihad Airways and telecommunications giant du.
Malhotra, who in his position as chairman of KPMG Lower Gulf is in charge of one of the Dutch organisation’s most vital international markets, says he is more optimistic than ever, predicting a bright future for real estate, capital markets and financial services in the country he has come to call home.
“The market is extremely bullish and buoyant, particularly in Dubai, and there’s a great expectation on winning [the] Expo 2020, which I think would be a game changer,” Malhotra says. ”I think everyone’s attention in Dubai, and in Abu Dhabi for that matter, is focused on Expo 2020, and it will be [a] huge opportunity to showcase the region, the UAE and particularly Dubai.”
According to some analyses, property prices in Dubai have leapt by up to 20 percent in the year to date, while economic growth in the emirate has rebounded 4.9 percent in the first half of 2013, buoyed by a strong expansion in trade and tourism.
Estimates by Bank of America Merrill Lynch put the economic impact of a successful Expo bid at 0.5 percentage points per year and 2 percentage points in 2020, as well as the creation of 277,000 jobs, and Malhotra agrees that the benefits cannot be underestimated.
“We’re talking about a spend of probably $10bn, because a lot of the infrastructure is already in place, so it’s not as if the UAE is starting from scratch, and that’s a huge opportunity for the economy,” he forecasts. “Of course, the 25 million extra visitors that will come during that six-month period will also be a great opportunity.”
Understandably following Dubai’s 2008-2009 debt crisis, whose aftermath led to a slump in property prices of up to 60 percent, some industry analysts have been sceptical over the market’s recovery, with suggestions of another bubble forming. Malhotra is less concerned though and says he has faith in the fundamentals of the emirate’s economic renaissance.
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