When it comes to predicting doom and gloom, I pride myself on doing it better than most. Property crash over? Keep dreaming. The economy out of recession? No chance. Double dip coming in Europe? Absolutely guaranteed. Regional stock markets plunging another 10% this year? Consider it done.
So it was with considerable cynicism that I attended last Monday’s 4th Arabian Business Forum, to listen to 14 of the Middle East’s finest business brains telling us what the true state of the economy is. An impressive lineup, I’ll be the first to admit, led by the UAE Minister of Economy Sultan Bin Saeed Al Mansoori.
Not surprisingly, most of our speakers had a lot to disagree about, but the overriding theme of their presentations was this: the worst is over, growth is back and the outlook will (eventually) be rosy. A subtle but significant shift from the forum six months ago, where deep uncertainty reigned supreme.
Are they right? Even for the greatest pessimist, the figures rolled out by the Minister of Economy make a compelling argument. Growth in the UAE this year will be between 3-3.5 percent, a number backed by the IMF. Last year, the UAE’s exports reached $255bn, more than India and Brazil. The country’s policy of diversification, with greater emphasis on chemicals, pharmaceuticals and even auto parts is well underway, while the target of 15 million tourists by 2020 does not look unrealistic.
Add to that Qatar growing at 20 percent this year and the Saudis experiencing a mini housing boom, there are clearly reasons to be cheerful.
But – and this applies more to the UAE than anywhere else – I fear it all comes back to one word, property. During the same event, the CEO of Colliers International John Davis pointed out that there are 100,000 residential units due to come online in the next three years. And three million square metres of office space – the equivalent of 75 towers. Who is going to fill them?
Nobody really believes the current levels of growth can sustain this supply, which in turn suggests that while property prices may have bottomed out, it could be some time – maybe even years – before they start to pick up.
In effect, it all comes down to this: how much do you believe the economy is reliant on the property sector? If you take that out of the equation, then there is a decent argument to be made that not only is recovery now underway, but it is a strong and sustainable one. If you believe the property market is at the centre of the economy (as I do), then I fear we are in danger of talking ourselves into a period of growth that is still some way off.
FIFA has become an international laughing stock
FIFA is a mess these days, a complete joke. Given it is run by Sepp Blatter, a man who first found fame as President of the World Society of Friends of Suspenders, we shouldn’t be all that surprised.
Unfortunately nobody in Qatar is laughing, as it faces the prospect of having to rebid for the 2022 World Cup following allegations of bribery.
Next week, Blatter will stand again for the FIFA presidency, and looks set to defeat his only opponent, the Qatari Mohamed Bin Hammam.
As I write this, news is breaking that Hammam himself has been summoned by FIFA to answer bribe allegations relating to his bid for the top job. You really couldn’t make it up.
What I find completely absurd is that the allegations of corruption, both for the 2022 bid and the FIFA presidency, are being investigated by FIFA itself. Apparently the organisation has an “ethics committe.”
This is like asking Colonel Gaddafi to investigate claims of human rights abuses in Libya.
(Anil Bhoyrul is the editorial director of Arabian Business. The opinions expressed are his own.)
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