Back to the Future
After a free fall in 2009, the UAE economy is bouncing back, with Dubai and Abu Dhabi – the real engines of growth – leading the way back to the future.
The UAE was speeding full power ahead – hurtling towards the future with a super vision and a super-ambitious program that few other countries around the world could match. Then the financial crisis of 2009 occurred, on the heels of the bigger international financial meltdown of 2008, the economy of the UAE was all but crippled and the uncontrolled growth ground to a painful halt.
Things came to a point when wanted sections in the UAE’s newspapers became leaner, passenger queues at immigration counters at airports became smaller, the teeming souks and malls became deserted, traffic on roads thinned down and hotel occupancy shrunk to a bare minimum. In fact, there were instances when expatriate workers from India and other South Asian countries just left their cars at airport parking lots and quietly took flights back home. As had always been feared, the bubble had burst.
Of late, traffic on Sh. Zayed Street is coming back to normal which means that the UAE has bounced back. Those who have been through it all, notice an air of confidence all around. There are smiles on faces and the feeling is rife that it is business as usual.
Overall, ever since the 1970s, the UAE had proven to be a promising
location for continued growth. The financial crisis of 2009, in fact, proved to be s shocker for an otherwise complacent economy which has survived because of its in-built resilience and is now emerging from the hole it had dug for itself.
It is also remarkable that instead of being bogged down, the business and investor class in the Emirates refuses to be licked and is reorganizing itself because it is really optimistic about achieving growth despite all the pressures. What this translates into is the sort of development which will have more chances of surviving similar frights in future. Now entrepreneurs will tread with care where funding is concerned. And, as in the case of Dubai, there will now be no racking up of billions of dollars of debt to fund superlative projects.
It is said that 30 years on from when it appeared on the global map, this federation of seven gulf emirates is today the longest surviving successful experiment in this kind of nation-building anywhere in the world. From the largely desert-bound Trucial States, the UAE has blossomed into a full-fledged country that offers its people all the amenities of life and has, at the same time, carved for itself an important role in the global community.
Dubai makes an impact on the
world’s psyche with its famous manmade islands and huge skyscrapers like the Burj al Khalifa while Abu Dhabi hosts Formula 1 racing and has built the Sheikh Zayed Grand Mosque which celebrates the rich cultural diversity of the Islamic world and combines the historical and modern values of architecture and art. The mosque is the eighth largest in the world.
The UAE is also known for its large ports and logistics facilities based in Dubai and Abu Dhabi, the financial centre and tourism industry of Dubai and the energy reserves of Abu Dhabi. The five emirates – Sharjah, Ajman, Umm alalQuwain, Quwain, Ras al Khaimah and Fujairah – complement what Abu Dhabi and Dubai offer. They are gradually adding to the cultural diversity and business dynamism of this increasingly important Arab country.
For example, according to a recent study, the number of millionaires in the UAE is predicted to grow by 13.5 percent by the end of 2013. The study forecasts that the country will boast a total of 54,600 millionaires by the end of 2013 and by 2017 the number will increase 34 percent to 69,000, with their wealth rising 48 percent to $269bn.
It would be interesting to mentiomention that the seven emirates togethtogether represent the third biggebiggest economy in the Middle East, after Saudi Arabia and Iran. Only Qatar has a higher GDGDP per capita in the region. The UAE oil reserves total ababout 98 billion barrels, almalmost as big as Kuwait's clclaimedimed reserves. Of the emirates, Abu Dhabi has most of the oil with 92 billion barrels while Dubai has just 4 billion barrels and Sharjah has 1.5 billion barrels. Most of the oil is found in Abu Dhabi’s Zakum field which is the third largest in the Middle East.
In comparison to the other countries of the Gulf Cooperation Council (GCC), the economy of the United Arab Emirates is one of the most dispersed and the least dependent on the energy sector, although the revenue generated by sales of oil and gas comprises a significant proportion of the budget. This dependence is particularly strong in Abu Dhabi, which earns 55% of its GDP from sales of carbohydrates. However, the emirate wants to reduce this proportion to 35% by 2030 through diversification of its economy.
The financial crisis of 2009 had a negative impact but growth resumed fast. The Port of Jebel Ali in Dubai is the seventh-largest in the world. By
From the largely desert-bound Trucial States, the UAE has blossomed into a full-fledged country that offers its people all the amenities of life and has, at the same time, carved for itself an important role in the global community.
2030 the volume of goods passing through this port is expected to increase by more than seven times, which will leave behind both the ports of Shanghai and Singapore. Jebel Ali now also has the Al Maktoum International Airport, which is planned to become one of the world’s major such facilities in the years to come. The location of the UAE between Europe and Asia has, in fact, created considerable potential for the development of logistics, ports and airports as a highly stable and profitable business in the long term.
It’s traditional versus modern when things are seen in the Abu Dhabi versus Dubai perspective. Abu Dhabi is a force to be reckoned with by any standards. It may be traditional but it is also modern. The average net worth of Abu Dhabi citizens is $17 million and the city has investments of $1 trillion around the world.
Comparatively, Dubai can be termed as an economic basket case – and more liberal. It became bloated on real estate and rapid growth, creating a bubble that almost destroyed it when the crunch came. The external debts of a range of Dubai companies were said to have hit some some $80 billion and this sent the world into a panic. It was Abu Dhabi’s cash that bailed Dubai out.
In terms of entertainment, the most positive way to look at it in the case of Abu Dhabi would be through its calendar of events. The city has become known in the region for major music concerts (including the Killers, Coldplay and Aerosmith) while sport events are also a major draw. It offers Formula One car racing, it hosts FIFA World Club Cup events and now even has a proper cricket stadium for ICCrecognized Tests, ODIs and T-20s.
But if entertainment is the question, Dubai edges out big brother, what with its bars, restaurants and nightclubs, plus a whole host of sporting events, from golf to tennis, horse racing and cricket plus international trade exhibitions and an internationallyrecognized air show. The city has also held many big name music acts like Elton John and Sting, not to mention Indian and Pakistani entertainers.
Abu Dhabi has made significant investments in the development of its Corniche area and has also made massive strides in building public beaches which has revolutionized beach going in the capital. Dubai has plenty to offer in terms of beaches but mainly for people who can afford private getaways. Hotels dominate ownership of much of the original coastline in Dubai, while the new beaches (on the palm, mostly) are the preserve of apartments and villas.
Traffic in Abu Dhabi city, however, is nothing short of a nightmare. There is daily chaos on account of various major developments, giving way to a system that just doesn’t seem to work. One tiny error or accident and the entire network grinds to a halt. Dubai is not great either and this is something the UAE government really must look into.
It’s not all hunky dory across the UAE because with all the good things, you also find the bad – the seamy side of unbridled growth - reckless driving on highways, dishonest landlords, inefficient real estate staff, crime on the streets and sexual harassment, rampant hypocrisy, idiotic police officers, bureaucratic nincompoops and laziness all around.
It is true though that globalization, urbanization and digitization are the key trends that are shaping the future of the UAE which is fast earning for itself an international appeal since has been promoted to the emerging market status. This recognizes the country’s strategy to diversify its economy and become a regional hub for global business and tourism.
The UAE offers a stable, efficient and pro-business environment, aviation connectivity to more than 200 cities and proximity to the world’s largest sovereign wealth funds. There is also significant investment in infrastructure which is important for attracting talent since the country’s strategic location gives it access to 50 per cent of the world’s population within five hours.
With its global aviation connectivity, friendly time zone, world-class infrastructure and services, combined with a diverse population and talent pool, the UAE has no rival in the Middle East as a location for today and tomorrow. It offers a unique opportunity that needs to be harnessed, developed and invested in – because all indicators are that the country is on the fast track back to the future.
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