The country is striving to make sure it learns from past experiences, specifically after the 2008 crisis
The relief we are currently experiencing in Dubai is something we were longing for a while. The small emirate is currently experiencing a fast recovery across all sectors. We are all simply trying to do things better and learn from past experiences, specifically after the 2008 crisis. The subject matter in meeting rooms, print and virtual media, as well as government decisions is all related to providing a better Dubai to the world. Whether it was real estate, banking or foreign direct investment; they are all covered in our to-do list. We want to refrain from repeating the scenario which took place post the 2008 global financial crisis. Dubai now is trying operate in accordance with the reputation it worked hard on securing: excellent infrastructure, government services and proper regulations.
Some may say that a bubble is forming again, completely ignoring the figures and the changes which had been implemented. Government Related Entities do not have the freedom to borrow spontaneously anymore, such matters are subject to the oversight of the related government department. Furthermore, we are expecting a massive injection to our economy in November, after the concerned committee makes its decision to (undoubtedly) award Dubai to host the World Expo 2020.
In order to further emphasise Dubai’s objective to be a leader in providing world-class government services; the one and only His Highness Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai announced that he will personally host a farewell party to anyone (domestic government departments heads) who fails to proceed with Dubai’s development.
Sheikh Mohammed was referring to the Mobile Government (“mGovernment”) initiative which is due on May 2014. Basically, Dubai is now seeking to evolve its services from the Electronic Government (“eGovernment”) system which was launched in 2000 to the mGovernment where the public will be able to engage in any government service using their smartphones.
Ultimately, the objective is to provide a one-stop-shop for all government services. Currently, one can actually register/renew his or her business license using a smartphone application.
In addition, real-estate developers’ offices, such as Emaar, are being raided again by anxious investors during the launch of any project sales. All units are usually sold-out before the end of the first day of placing them on offer. Dubai currently is the home to 81,500 hotel rooms with a year-round average low in occupancy rates of 70 percent and as high as 95 percent during peak seasons, Dubai had the world’s highest average in year-round occupancy rate of 82 percent in 2011.
The Sheikh Mohammed bin Rashid City alone, which is part of Dubai’s 2030 vision, is expected to add an additional 100 hotels. Also, most of the projects which were put on hiatus as a result of the 2008 crisis have been revaluated and launched again.
On an alternative note, the same group which are describing Dubai’s recovery as a bubble tend to heavily criticise the federation of the UAE and the level of cooperation between its seven emirates. They refer to the cut-throat competition between individual emirates, specifically Dubai and the federation’s capital Abu Dhabi. For example, they describe Abu Dhabi’s new financial free-zone, Global Marketplace Abu Dhabi, as an unnecessary project and a message to Dubai with its established Dubai International Financial Centre (“DIFC”). This group completely ignored the macroeconomic effect of two international financial centres in one country.
In essence, the playing-field (where the actual competition is taking place) will ultimately be within the UAE’s economical umbrella. Major international financial institutions, the ones with an eager interest to expand in the region or operate an outstation to gain access to the eastern/western markets, will have to make a decision of where to set-up. Instead of thinking about country A or country B, the automatic question is going to be Dubai or Abu Dhabi, as these cities had established themselves as the industry’s main hubs. Lucky for the UAE, these cities just happened to be in it. Coincidence? Most likely not.
The only reason that the financial free zones example has been brought up in this piece is because you are reading Arabian Business. Otherwise, the list is quite long and it would have certainly hit the words ceiling. The UAE has been silently exercising this strategy across numerous sectors for decades with an objective to become a major global competitor.
In 2013, the index compiler Morgan Stanley Capital International (“MSCI”) upgraded the UAE to “Emerging Market” status from “Frontier Market”. The upgrade is expected to attract a new wave of investors, specifically funds with a focus on emerging markets. Accordingly, this may push the International Monetary Fund to increase its 2013 economic growth expectations in regards to the UAE for the second time in less than 12 months, currently at 3.6 percent.
Miles away from the spotlight is a new up and coming city in the UAE, the emirate of Fujairah. The city somehow escaped media scrutiny considering its strategic geographical location. The emirate is the UAE’s (along with Qatar, Kuwait and Bahrain) port operations safe-haven. In circumstances that the Arabian Gulf would not be able to accommodate any import/export activity due to any political reason, Fujairah is the closest seaport to the Indian Ocean for four members of the Gulf Cooperative Council. Port operations are vital for these oil-based economies due to the significant role it plays in the oil trading logistical process. The UAE is conscious about the latter and has been actively investing in infrastructure in and towards the emirate, including roads as well as public and cargo railways. International port operator DP World had already undertaken the responsibilities of Fujairah Port.
In a highly volatile and an increasingly political Middle East, the UAE is doing an excellent job maintaining stability and the highest growth rates in the world. For a reason only known to God, international news agencies miss the opportunity to report on the UAE’s good fortune, and for another godly reason, they are always the first respondents on the scene to overstate any negative headline. However and perhaps the following could not be explained by any natural or superior power, international news agencies somehow manage to pick up on negative publicity on the UAE during very interesting times; such as at the peak of the crisis when investors were moving their investments from the west to the east. As mentioned above, we are weeks away from November which is when the Bureau of International Expositions will commune to announce the host of the 2020 Expo, will we pick up on any cynical coverage about Dubai or the UAE in the next couple of months??
Mohammad Sultan Janahi is a social affairs commentator from Dubai, United Arab Emirates.
On Twitter: @jna7i