5th Arabian Business Forum: Notes and Impressions
I was fortunate enough to be invited, and able, to attend the 5th Arabian Business Forum. A well put together event at the Armani Hotel, the forum featured debate and discussion from representatives of Dubai government and business.
The general sentiment of the discussion was quite subdued with real concerns about the European economy versus the strength of ASIA and the impact this will have on the UAE (and Gulf) in the short-term. Many of the speakers were very cautious in their hopes for 2012 implying that they didn’t think it was going to be a good year for the UAE.
Below is a high-level recap of some of the sessions I attended:
1. Opening Keynote & Q&A with H.E. Eng. Hamad Buamim – DG of Dubai Chamber of Commerce & industry:
- His key premise was that Dubai is growing, again. It is set to meet its growth target of 2011 with growth of 4 to 5 percent.
- Dubai is well known for its openness – this is what was crucial to its meteoric rise and success but equally, he suggested, to its downfall when the crisis hit
- However this openness is something Dubai needs to continue to develop. A big focus for Dubai, and the UAE, in 2012 is going to be making it even easier to do business here – with specific focus on softening laws/regulations (an area that received much focus during the Q&A).
- The UAE is extremely concerned by the issues in the Eurozone and will not be immune to any further issues in that economy – the UAE economy is intrinsically linked with Europe and the US.
- However in Q&A he made the point that the UAE’s advantage is its geographical location (and the trade routes it has – and continues to establish – sea/air/financial). The UAE is in the heart of the new world order and now helps link the emerging markets (India/China with Latin America)– it provides transport and trade routes that now mean these countries have an alternative and do not have to route through Europe/North America.
- Arab Spring had pros and cons for UAE he felt – trade has suffered to the likes of Libya, Egypt, Syria and Yemen (but he stated he’s confident trade levels with these countries will return to 2009 levels within 6 months) but at the same time these reductions have been offset with the rapid growth of markets like Iraq which he says is a real high growth market for UAE trade (in fact during the last year trade from the UAE is up 20% overall from last year). On the pro side tourism and business investment/relocation were the two key areas. Dubai, is seen as an island of safety attracting sun seekers and shoppers but also businesses that perhaps prior to the spring were setting up in cheaper (to do business) regional neighbours; these businesses are returning to Dubai.
- In Dubai he still sees no end to the property issue “we will have many vacant buildings and stalled developments for some time to come” (referencing this as a global and not a local issue). However he did say that he isn’t too concerned, property did get to far ahead of itself (and became too much of a focus for Dubai he implied) the global crisis has allowed Dubai to get back to its basics of trade and commerce (areas that are growing and insome cases booming).
- Africa is an enormous focus for Dubai (and he implied UAE) – especially with commodities and increasingly tourism; through 2012 they areactively looking to develop bilateral relationships with more internationalbusinesses in Africa (or looking to do business with Africa).
- Tourism is booming. The Arab Spring has – to a degree – helped this; but so has falling prices brought on from currency pegging and general global economic conditions. People come here to shop and for the weather. Dubai expects 9 million tourists by the end of this year and will hit 80% occupancy – this is ahead of targets.
- An interesting market they are looking at is retirement (not easy to do in the UAE, but they see a growing demand from expats retiring). He thinks this is – potentially – a growth market for the region (as rich expats retire and spend their savings in the country) and as such he says legislative discussions are happening to look at VISA situations to make retirement here easier.
2. Commodities Discussions with Ahmed Bin Sulayem chairman of Dubai Multi Commodities Centre Authority & members from Emirates NBD & Macquarie Bank:
- Dubai is now in the top 4 diamond centres in the world. This industry has grown phenomenally in last 10 years from a 20million a year market in 2002 to 25billion market in 2012 (they’ve seen a 150 percent growth in last yearalone).
- Interesting fact: 10 percent of the world’s tea now comes through (and is traded from) Dubai
- Dubai has seen great success with its DMCC zone. Has been a growtharea as financial markets have plummeted (commodities being a solid alternative to the financial markets for trading )
- The UAE now has the worlds largest Sugar Refinery and Aluminium smelter
- Panel believed China market will continue to grow for next 5 years – as such this will have a positive impact on global commodities (a positive for Dubai as it continues to grow its commodity markets)
- Oil. Price is still high (panel view) but don’t see it falling in the short-term. Price is still high despite global recession as the demand still exists (despite supply also increasing) this is because of Asia.
- Good quote: “The oil prices during this recession have shown that the world has changed. The US no longer set prices Asia does.”