ABU DHABI & DUBAI
didas, Coca-Cola and Omega may have enjoyed higher brand profiles at the Beijing Olympics but no corporate sponsor would have savoured the event more than Abu Dhabi-based Hydra Properties – part of the Royal Group, a sprawling conglomerate owned, inevitably, by the emirate’s ruling family. The reason, apart from national pride, is that Abu Dhabi’s brasher neighbour Dubai, a mere 90-minute drive away on a desert highway, has declared an interest in hosting the 2020 Games at its almost completed Dubai Sports City.
A
While Western financial institutions tumble like gymnasts, the rival emirates are falling over themselves to convert their stupendous – but fleeting – oil wealth into other assets via their rulers’ turbo-charged private-equity investment vehicles, known as sovereign wealth funds. They are also competing with each other for bragging rights. During the last decade, Dubai’s Sheikh Mohammed bin Rashid al-Maktoum has spent an estimated €45bn in a global shopping spree. Foreign pick-ups in the last 12 months alone include two British docks, swathes of Manhattan real estate, including hotels and upscale department store Barneys, chunks of Las Vegas, a stake in London’s Standard Chartered Bank, and beaches across Africa. At home, Dubai has continued to reinvent itself as Disneysand, with eye-popping hotel and leisure ventures (including ocean liner QE2, which will become a hotel and a tourist attraction), city-sized shopping malls and artificial islands, plus an international stock exchange and Emirates airline in an attempt to woo tourists and investors from Europe and Asia. Not to be outdone, last year the Abu Dhabi Investment Authority (ADIA) – which is believed to have over €600bn to invest – took a 4.9% share in Citigroup, the world’s biggest bank and a 7.5% in Washington invest-
ment bank Carlyle Group as well as making substantial real estate investments in several American cities. The Abu Dhabi Investment Co bought the Chrysler building in New York. In August, the Mubadala Development Company bought 10% of General Electric and is believed to be in talks to buy the UK’s Gatwick and Stansted airports. In July, the Abu Dhabi National Energy Company, known as TAQA, agreed to buy a series of North Sea assets from Shell UK and Esso Exploration. Abu Dhabi – which sits on 9% of the world’s proven hydrocarbon reserves – is unashamedly trying to market itself as a tourist destination too, pumping money into the solemnly named Office of the Brand of Abu Dhabi, created to promote the emirate abroad. A key plank in the rebranding strategy is to exploit what is widely perceived as Dubai’s absence of high culture. While Dubai trumpets its indoor ski slopes and Atlantisthemed mega resort – with 24 bottlenose dolphins flown in from the Solomon Islands – Sheikh Khalifa bin Zayed Al Nahyan is spending billions on big name museums to transform his emirate into a cultural oasis. On Saadiyat Island, Frank Gehry, the architect behind the Guggenheim Bilbao, is building a €450m, 150,000m2 Guggenheim Museum, while French architect Jean
CULTURE THE QATARI WAY Opening this month is a subtler challenger for the Gulf’s cultural crown, the Museum of Islamic Art (MIA pictured) in Doha, Qatar. Designed by Chinese-American architect I.M. Pei, the museum stands guard over the harbour like an Arab citadel. Not importing western art to the Gulf like Abu Dhabi, Qatar is instead flaunting an Islamic collection to tourists and Gulf nationals alike. The museum’s director Oliver Watson emphasises the quality of the collection, the result of an extraordinary spending spree by Sheikh Saud Al-Thani, cousin of the Emir of Qatar, who built the collection without regard of cost.
NOVEMBER 2008 I CNBC EUROPEAN BUSINESS 39
38_ME.indd Sec3:49
20/10/08 14:47:41