TIOS
ASEAN 2011
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P.13 P.14 P.16 P.19
P.22 P.24
: CHAPER 1
≥ Incoterms® 2010
South East Asia multilateral relationships ≥ APEC
P.26 P.28 P.29 P.32 P.35
≥ The EU ≥ The EU-Singapore FTA ≥ HSBC ≥ INTERVIEW Mr Harvey-Samuel ≥ INTERVIEW Mr Boyles
P.37 ≥ Constelor Holdings P.39 ≥ INTERVIEW AFIG P.40 ≥ INTERVIEW Portek P.42 P.44 ≥ Key data P.45 ≥ Intra-ASEAN trade P.46 ≥ For agro-based products P.47 P.49
South East Asia subregions developments
- ≥ INTERVIEW Dr Peter Richter ≥ Updates on BIMP-EAGA P.50 ≥ 20 things to know about bimp eaga P.54 P.55
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≥ exports from BIMPEAGA ≥ socio economic datas ≥ Greater Mekong Subregion: Trade and Investment
CHAPTER 2
P.60
Host country Singapore
P.61 P.63 P.65
≥ From “Singapore Inc” to “Singapore Unlimited” ≥ The Economic Development Board ≥ INTERVIEW Professor Mahbubani ≥ Ernst & Young
P.109 P.110 P.117
Coup de coeur country LAO PDR
P.118 P.119
≥ INTERVIEW Dr Sisouphanthong ≥ LAO OV Consulting
P.120
P.67 ≥ Food Empire Ltd P.69
P.121 P.122
P.70 :
P.124
≥ Health R&D Development ≥ INTERVIEW Mr Vaissié P.71 ≥ Energy Research and Development P.72 ≥ Water R&D Development ≥ Environment & Water: Map P.73 P.74 ≥ Singapore's objectives P.75 ≥ EDB: the spine of Singapore's P.76 P.78
economic development ≥ The cultural imperatives of EDB ≥ Singapore: Was it really a Miracle?
P.80 ≥ The 50 things to know before heading P.81
to singapore
P.84 ≥ Singapore as a springboard into P.86 P.87 P.89 P.90 P.91 P.95 P.96 P.98 P.99 P.101 P.102 P.104 P.106
ASEAN ≥ TGI met with Vopak ≥ INTERVIEW Rolls Royce ≥ INTERVIEW United Engineers ≥ INTERVIEW ST Engineering ≥ Singapore Engineering Services ≥ INTERVIEW Rotary Engineering ≥ Electronics ≥ Logistics Singapore ≥ INTERVIEW JTC ≥ INTERVIEW DHL ≥ Chemicals ≥ INTERVIEW Shell
'
P.126
Close up country Thailand ≥ The Board of Investment of Thailand ≥ The Thaï Chamber of Commerce ≥ INTERVIEW Dr Rappa
TIOS speaks up on Myanmar ≥ INTERVIEW Mr Pun ≥ INTERVIEW Mr Taylor
P.129 UPDATES The new government
of Philippines
P.130
Country highlights: Indonesia
P.131
Country highlights: Malaysia
P.132
Country highlights: Brunei
P.133
Country highlights: Cambodia
P.134
Country highlights: Viet Nam
P.135
Country highlights: Myanmar
P.137
CHAPTER 3
P.138 P.140
P.142 P.144
≥ Nuvali: An Oasis of opportunity ≥ Women’s Entrepreneurship ≥ A call for collective actionon climate change A 13 PAGE
P.59
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Caroline Couronne, Editor-in-chief. carolinecouronne@ipfa-group.com
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I invite you to discover South East Asia, a region with a tremendous amount of opportunities for business related activities. TIOS South East Asia 2010 is the second edition of our flagship project, which has the objective of highlighting trade and investment opportunities in the region. The project is updated on a yearly basis to keep our readers informed on the developments in the region. In the 2009 edition, we choose the Philippines as our Host Country because of the preparation for the elections and the high demand for information about the business environment of the country. This year, we choose Singapore as our Host Country, because Singapore is undergoing economic changes that will place the country in a leadership position for South East Asia, and the rest of the world. The Singaporean government constantly looks at the dynamics of the global economy and seeks innovative solutions to be at the forefront of industry and trade. Therefore you will find a large part of the book dedicated to Singapore. According to TIOS Group International methodology, we work on a rotating basis and select also each year a Coup de Coeur Country (Lao PDR) and a Close Up Country (Thailand). We choose Lao PDR because the country is moving fast towards a market-oriented economy, with a strong desire of the government to be part of the global economy, and we will like to support their efforts in reaching the global business community. Our decision to select Thailand as our Close-Up country was based on the necessity after the recent political events to provide balanced, objective, and first-hand information about the reality of the political and economic risk in the country.
Source OCDE 2010
≥ Share of the
global economy in purchasing power parity terms 57% Non-member economies
40% Non-member economies
43% OECD member countries
60% OECD member countries
2030
2010 ≥ Potential gains from
South-South trade liberalization Primary Sector
Manufacturing Sector
SOUTH/SOUTH TARIFFS REDUCED
0
10 B$
20 B$
30 B$
40 B$
50 B$
60 B$
19 PAGE
Source OCDE 2010
NORTH/SOUTH TARIFFS REDUCED
CHAPTER — 1
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SOUTH EAST ASIA IN THE GLOBAL ECONOMY
CHAPTER — 1 / PART — 1
South East Asia multilateral relationships
≥ SOUTH EAST ASIA MULTILATERAL RELATIONSHIPS
INTERVIEW
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APEC
Ambassador Noor, APEC Executive Director, TIOS Group International: APEC is an advocate of
the promotion of trade as a means to economic growth. How is trade related to economic growth in a practical manner? Ambassador Noor: When I was a child, I would visit a shop in a kampong [small Malaysian village] where the keeper struggled to make a living. He only sold basic things: a few packets of sweets and flour and sugar. But when I went to the main town, I could see big shops and very busy supermarkets. So one day I decided to ask the shop keeper: why not expand
your business? He was dismissive, explaining that people in the kampong were not rich and that there was simply no market. Just like the shop keeper, economies are impeded by the limitations of small markets. They need to transcend borders in order to reach consumers who have disposable income. That is exactly how trade leads to economic growth. TGI: How much of a role does China play within APEC? AN: China is an active member of APEC. We have a seconded Programme Director, who is based at the Secretariat and China contributes both to policy issues and implementation activities. China is hosting one of the only two Ministerial Meetings to be held outside the APEC host economy of Japan this year. The Human Resource Development Ministerial Meeting is held in Beijing in September. TGI: How does ASEAN articulate within the APEC? How do ASEAN member countries evolve within APEC and are the two institutions complementary? AN: The two institutions are complementary. Most members of ASEAN are also members of APEC, and ASEAN has official observer status at APEC meetings. There are open lines of communication between us both at the Secretariat level but also at the working
≥ SOUTH EAST ASIA MULTILATERAL RELATIONSHIPS
and 55 percent of world GDP. As a means to explore the best ways toward a regional free trade area, APEC is studying, among other things, how the FTAs that already exist could be building blocks. TGI: How is APEC playing an active role in Inclusive Growth for countries such as Viet Nam, Chile, Peru or the poorer member economies? AN: Capacity-building is a long-standing priority to APEC. The Human Resources Development Working Group specifically aims to improve the quality of basic education, enhance skills in key sectors and encourage life-long learning. The Small and Medium Enterprises Working Group builds capacity of SMEs to engage in international trade. Other groups target infrastructure. The Telecommunications Working Group is currently aiming to achieve universal access to broadband by 2015. This is a target they set after achieving their previous goal of tripling the rate of regional internet access in 2008. APEC’s work on regional economic integration also leads to more inclusive growth. Just like the shop-keeper who can offer a greater range of goods as he expands his customer base, regional integration will increase the scope of opportunities throughout the entire region, especially for developing economies. Developing a New Growth Strategy for APEC is central to our work this year. Based on our experiences of the economic crisis, we know that growth needs to be more inclusive, sustainable, balanced and knowledge-based. This is not a one-year strategy; rather, it is the foundation for APEC’s new long-term plan for achieving prosperity. TGI: What are your personal objectives for the three-year term you have just begun as Executive Director of APEC? TGI: As a result of my education and beliefs, I am naturally interested in increasing the prosperity of developing countries. As a former representative for Malaysia at the WTO in Geneva, I am acutely aware of the correlation between trade and economic development. Just like Japan, the host economy for APEC this year and the economy responsible for guiding our agenda, I support the effort to develop new ideas and strategies and believe that it is equally important for action to implement them.
1 CHAPTER
level, each learns from the experiences of the other. For example, ASEAN and APEC have been sharing information on how to deal with health pandemics and this is beneficial for the region as a whole. TGI: What is APEC’s role in the global economy? What are APEC’s priorities? How does APEC relate to the WTO’s objectives? AN: The common value of APEC members is their commitment to free trade and investment. Even as they addressed an economic crisis that was being compared to the Depression of the 1930s, APEC economies pledged not to engage in protectionism. Last year, APEC Leaders renewed their commitment to refrain from protectionism and, in collaboration with the World Trade Organisation, monitored the implementation of trade-related policy measures to promote economic recovery. APEC envisions a region characterised by free and liberalised trade. The success of the WTO’s Doha Round of negotiations is considered by members to be the best possible outcome. At the same time, APEC continues to explore the possibility of a Free Trade Area of the Asia-Pacific. Meanwhile, APEC is working on practical measures such as greater liberalisation of trade and investment and improvements to the supply chain, to advance regional economic integration. A new priority for APEC over the next few years is to develop and implement a new strategy for strengthening economic growth. APEC wants growth to be sustainable, inclusive, balanced and knowledge-based so that the benefits of globalisation are more widely shared, and to ensure the region will experience continued prosperity in the future. The third priority is enhancing human security, such as counter-terrorism and food security. With the three pillars above supported by economic and technical cooperation, APEC is discussing a long-term new vision for development and prosperity in the region. TGI: How do you perceive the increasing number of FTAs being conducted, signed or under negotiation between ASEAN and other economies? Could you tell us more about the Free Trade Area for Asia Pacific? AN: The FTAAP refers to a free trade area among APEC’s 21 member economies. It’s a lofty ideal, extending across the Pacific Ocean and effectively including about 41 percent of the world’s population
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SOUTH EAST ASIA IN THE GLOBAL ECONOMY
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INTERVIEW
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The EU
Karel de Gucht, EU Trade Commissioner. TGI: Why is it important to support trade to alleviate poverty? How is the EU a model for regional integration for other regions in the world? What can the EU learn from ASEAN, and vice versa? KG: Opening up to trade and investment is a tried and tested route to increased prosperity. The success of many of South East Asia's economies testifies to this. Whether it be China, South Korea or Germany, globalisation works. And policy makers around the world and across the ideological spectrum seem to realise this. Over the last twenty years in the EU, we have created a single market, a common currency and the freedom for all our citizens to travel, live and work freely across 27 countries. We understand
the challenges of regional integration. ASEAN has set ambitious goals with its Economic Community blueprint and I very much support this process. The EU and ASEAN have common interests on a range of issues such as maintaining an open trading system, tackling environmental challenges and deepening regional integration. While you cannot always apply lessons from one region to another, there is a lot to be said for comparing notes and sharing experiences. ASEAN looks set to play an increasingly important role globally. It is in both our interests to work together. TGI: How is the Singapore-EU FTA a step forward towards wider FTA negotiation in ASEAN? What are your priorities in the negotiations of the Singapore-EU FTA? KG: I feel that an FTA with Singapore is a springboard to enter the wider ASEAN region. This is not only because of Singapore's role as a regional transport and financial hub but because of the wider interest it generates. Ever since the EU and Singapore announced their plans to negotiate an FTA last December, there is a lot of discussion in many ASEAN capitals to emulate this new dynamic in trade relations. For example, the Vietnamese Prime Minister has already confirmed to me his readiness to engage in an FTA with the EU, and Vietnam is one of the fastest growing ASEAN economies. There is a possibility that we will see a number of ASEAN FTAs being launched over the next 18 months or
≥ SOUTH EAST ASIA MULTILATERAL RELATIONSHIPS
term? What do you consider are your biggest challenges in your efforts towards fostering free trade? KG: With the experience of the financial crisis fresh in our minds, I want to see trade policy at the forefront of the recovery plan. It's crucial for people in Europe and elsewhere to see the benefits of free trade in everyday life. It's through trade policy that markets stay open and that goods and services keep flowing. The best way to prevent economic globalisation from going backwards is to push it forwards. As EU Trade Commissioner, multilateral trade liberalisation and rule-making remains my top priority. I will continue to push for a successful completion of the Doha Development round. The DDA will bring substantial economic gains, development gains and systemic benefits that cannot be allowed to slip out of reach. I am not saying it will be easy but I remain determined to reach an ambitious and balanced Doha deal in the near future, and I believe our WTO partners share that objective. I also have a major bilateral agenda ahead for an ambitious set of trade negotiations with a particular focus on countries with a strong growth potential. As well as the ASEAN region, we are in the process of negotiating a number of other FTAs, such as with India and Canada. In addition, the Commission has just decided to re-launch the negotiations with Mercosur. These bilateral FTAs are by no not means there to undermine the multilateral DDA negotiations, but rather to underpin them. The success of the EU's FTA with Korea shows that ambitious deals can be done. It's one of the most ambitious agreements of its kind - with import duties eliminated on nearly all products, many significant non-tariff barriers will be eliminated and there is far-reaching liberalisation of trade in services. We have also recently concluded deals with Peru and Colombia and I hope to conclude negotiations with Central America soon. These deals are symbolic of Europe's capacity to liberalise trade even in a downturn. Whilst other trade partners struggle to maintain trade openness, Europe is not only keeping its markets open but we are capable and ready to go further.
1 CHAPTER
so. Ultimately, these bilateral FTAs should be seen as building blocks towards our long-term goal to reaching a bi-regional EU-ASEAN FTA.With regards to my priorities for immediate negotiations, Singapore already has a developed service industry so discussing services will in all likelihood be an important element in our negotiations. Government procurement and non-tariff barriers will be others. Moreover, I hope that the result of our negotiations with Singapore can serve as a reference for other trade talks. TGI: How important is the ASEAN market to the EU business community? KG: The ASEAN markets are important for EU businesses. Trade between the EU and ASEAN has reached impressive proportions: some € 175 billion worth of goods and services are traded between the two regions each year. This makes the ASEAN group our third largest trading partner after the US and China. I also see a lot of potential. For one thing, the economies in ASEAN are growing dynamically. At the same time, many of our exporters face substantial barriers when trying to do business with the region. Negotiating FTAs with ASEAN countries will allow us to tackle many of these barriers, and to tap into the potential of these markets. The FTAs should therefore create a good platform for prosperity. TGI: What are your thoughts on the ASEAN Economic Community? KG: I admire the determination by which ASEAN governments drive forward the project of an Economic Community by 2015. In the EU we have experienced how difficult it can be to create a region with free movement of goods, services, investment, skilled labour, and capital. We are confident that ASEAN and its peoples will reap the benefits just as Europe has done. And we are also ready to support further regional integration within ASEAN. Trade between ASEAN members might be comparatively small for the moment, but there is great potential linked to the efforts by ASEAN to establish their Economic Community. This will not only impact ASEAN nations, but also give rise to additional market opportunities for EU operators. The ultimate EU-ASEAN FTA would contribute to achieving this goal. TGI: What is your personal mission as Trade Commissioner of the European Commission? What you would like to achieve during your
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SOUTH EAST ASIA IN THE GLOBAL ECONOMY
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The EU-Singapore FTA
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The historical context Under Pascal Lamy, the European Commissioner for Trade (1999-2004) the focus of the European Commission was on multilateral trade agreements, particularly the Doha Development round which started at the end of 2001. It was not until under the leadership of Peter Mandelson as the European Commissioner for Trade (2004-2008) that the focus of the European Commission shifted towards bilateral trade agreements, as it became clear that the Doha Development round was not likely to get anywhere any time soon. However, it was also crucial that any FTAs that the EU would negotiate did not jeopardise the progress of the Doha Development Round. This required a new generation of FTAs which ≥ should be more advanced involving substantial trade liberalisation elements as well as addressing human rights, health & safety and environmental issues; ≥ address real economic problems and key issues such as trade and investment regulations and restrictions; ≥ do not take away the incentives for multilateral rounds. Korea, India and ASEAN were identified as priority markets where it made economic sense for the EU to negotiate as the EU was the largest investor in all of these countries. The first example of the new generation FTAs was the EU-South Korea FTA, which was the most liberalising FTA ever to be negotiated between the EU and a non-European country. It was twice more comprehensive than the FTA being negotiated between the US and South Korea at the time which had to be put to bed after it was blocked by the US Parliament for political reasons. The negotiations started in 2006 and the FTA has a comprehensive coverage of services, requiring Korea to adapt the same health & safety and environmental standards as the EU as well as liberalising its telecommunications and financial services sectors. As a result, Korea will adapt the European GSM system in telecommunications and IBAN in financial services, giving the EU a huge advantage over the US and Japan which have their own systems not compatible with that of the EU.
The FTA also stipulated that FDI flows would not be controlled in either direction, which in effect meant that the Korean government which controlled FDI flows into the country could no longer do so. It is also the first FTA where the EU agreed to liberalise its own agriculture sector, which has never been negotiated before. The EU- ASEAN FTA negotiations The negotiations started simultaneously with the negotiations with Korea but were immediately met with obstacles. The EU wanted to only negotiate with the older member of ASEAN leaving out Cambodia, Lao PDR and Myanmar (the EU delegates could not even be in the same room as Myanmar delegates because of the ongoing ban). The initial reaction from ASEAN (particularly Malaysia) was harsh saying the EU should not be telling them which members they wanted to negotiate with, as ASEAN member could also ask to negotiate with only the EU-15. But in the end, they agreed. The EU wants from an ASEAN-FTA to address non-tariff barriers, cancel all restrictions on investments, and include services The EU encountered three different reactions from ASEAN regarding the FTA: 1. Singapore for example, had no objections to doing the FTA with the EU, but they did not want to open up in the same way to other ASEAN countries which they would have to do with the ASEAN-EU FTA 2. Countries like Viet Nam were simply not prosperous enough to accommodate some of the requirements of the FTA like lifting the restrictions of capital because of the state of their economy 3. Another group led by Malaysia did not want to negotiate something more ambitious with the EU than what had been negotiated for ASEAN. Their attitude was: "why is the FTA negotiated between ASEAN and Australia/New Zealand or China not good enough for the EU?!" On the EU- Singapore FTA From an economic point of view an FTA with Malaysia or Thailand would bring much more benefits to the EU, but in the context of the region starting with Singapore makes sense. Singapore is very keen to have the services in the FTA with the EU which would require them adapting to EU standards. The US-Singapore FTA is not as ambitious as the kind of FTA the EU is interested in negotiating with Singapore.
SOUTH EAST ASIA IN THE GLOBAL ECONOMY
TIOS Group International: Considering the existing market situation in the European Union, what are your thoughts on the future position of Asia in the world economy?
Peter Boyles & Guy Harvey-Samuel:
Without the emerging markets of Asia, global growth would have been 50% lower than it has been since the beginning of this millennium. And the region’s GDP now represents a quarter of global GDP, bigger than the USA or the European Union. Its economic importance is now beyond question, and will endure. This economic dynamism comes in part from a closing of the gap, but also from the lessons that were learned in the Asian crisis of 1997. These countries have been aware ever since then that their independence depends on their ability to generate trade surpluses. As a result they have introduced the economic policies that will allow them to do so. The economic crisis in the euro zone will not change the underlying picture and Asia will retain its new economic position. Indeed there could be positive outcomes.
The instability of the euro zone could encourage Asian countries to step up the pace of development of their local capital markets, in order to offer new outlets for strong local savings as well as satisfying the ever-growing demand from international investors for emerging market assets. China has already taken a step in this direction, by issuing 6 billion yuan of government bonds in Hong Kong, thus making these securities available to foreign investors. Moreover, the crisis is encouraging Asian governments to focus economic policy on domestic demand, which will have very positive effects for global growth.It is true that the increase in risk aversion in the euro zone, which has already affected Asian bond and equity markets, could affect company investment. Meanwhile, the very weak growth we are expecting in the euro zone could limit Asian exports to Europe, which represent 26% of total exports from emerging Asian economies. But in the final analysis, Asia is likely to remain the uncontested leader in economic growth around the world over the next few years. TGI: What are the strategic imperatives for the EU to strengthen its economic involvement in Asia? PB & GHS: The European Union is a favoured partner of emerging
Asia. Asian imports from the European Union grew by 17% per year between 2002 and 2007! And certain European countries, like Germany obviously, are already very present in Asia. But to go further and strengthen our economic cooperation, notably with the ASEAN nations, we will need to develop reciprocal support systems for companies seeking to move into new markets. To this end HSBC has created “Club Pays” in partnership with Ubifrance to help French companies establish themselves and make their products known. Naturally we started with India and China but this initiative could well be extended to other countries. Equally clearly, it is important that Europe learns to speak with a single voice to explain its commercial choices and positions to, for instance, the WTO, or to strengthen relationships with ASEAN nations. Confidence is based on transparency and clarity about the positions of all parties. TGI: What are your thoughts on the Greek Tragedy and the contagion to the rest of the EU? In the long term, what can the EuroZone do to avoid being vulnerable to financial markets’ attacks? PB & GHS: There are two lessons to be learnt from the European crisis. The first is that one should not
1 ≥ Mr Guy Harvey-Samuel will be Head of International Asia Pacific based from Hong-Kong in October 2010
1 CHAPTER
TIOS Group International talks to Peter Boyles CEO HSBC Continental Europe and Guy Harvey - Samuel CEO HSBC Singapore. [1]
≥ SOUTH EAST ASIA MULTILATERAL RELATIONSHIPS
HSBC
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INTERVIEW
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SOUTH EAST ASIA IN THE GLOBAL ECONOMY
believe that the issue of economic growth strategies can be resolved by increasing public spending. The second is that one cannot step outside the rules implicit in belonging to a currency union. The introduction of stimulus packages was indispensable and helped limit the scale of the recession. However, in most euro zone countries, they gave way to a period of very strong public spending. In nearly half of the euro zone’s countries public spending grew by more than 5% per year between 1998 and 2007. It is true that borrowing was very cheap, given that these same countries enjoyed negative real interest rates thanks to their membership of the euro zone, something that also fuelled growth in private sector indebtedness. This allowed these countries to report very strong growth rates, which probably would have been much lower but for this easy financing. So by 2007, at the end of this remarkable period of ‘the Great Moderation’, the current account deficit was more than 10% of GDP in Cyprus, Spain and Greece and was very close to 10% in Portugal. By comparison, the current account surplus was nearly 8% in Germany, 8.5% in the Netherlands and 9.7% in Luxembourg. However, in the final analysis, the euro zone’s current account is probably one of the best balanced in the world, as it is close to 0. The problem therefore comes more from imbalances within the zone rather than any problems of the zone itself. To avoid this it was important that members of the euro respected the Stability and Growth Pact that was introduced to ensure that there were no
significant disparities within the zone and hence avoid crises such as the one we are seeing today. The rules were in place, but they were not respected. It will therefore be necessary that member states agree to stick by the rules and continue European integration. They will then become less vulnerable to speculation. Over the longer term, it seems to us that the Lisbon Programme represents a good road map for making Europe a region of growth. Improvements in the employment rate and an increase in R&D investment are both targets that still need to be pursued. Whilst Europe continues to set itself apart by its high hourly productivity, thanks to the quality of its workforce and its innovation, it will need to go further to ensure that it stays at the head of the global pack. TGI: Although HSBC has a long history in Asia, the bank seems to believe in opportunities that can be found in Europe: what are those opportunities you are seeing in Europe? PB: At HSBC, the Continental European region consists of 25 countries, 11 of which are emerging economies. Eastern Europe in particular is an area where we see opportunities with its growing economy, evolving connectivity to other parts of the world through its increasingly migrant and travelling population, and increased trade flows. HSBC is well positioned to support this growth in trade given that much of it is with regions such as Asia and the Middle East, two areas in which we have a strong presence. History has shown that HSBC is committed to supporting developing econo-
mies, and is again well placed to do so as Eastern Europe benefits from increased economic and financial market developments. We have shown that we are also able to take advantage of external growth opportunities within Continental Europe when acquisitions fitting our strategy present themselves. The recent acquisition of RBS’s retail banking business in Kazakhstan reflected HSBC’s positive view of the country’s long term prospects, not least because of its trade flows with China. We have been in Kazakhstan for 12 years and this deal significantly increased our platform for growth by doubling our network and growing our customer base fivefold. Finally, we wish to ensure that HSBC achieves a position as one of the foremost financial institutions in these dynamic Continental European markets, and is in keeping with the HSBC Group's stated strategy to focus on emerging markets given the growth opportunities that exist. TGI: How do you foresee the future of the Euro Zone? PB: The crisis revealed the fragility of the euro zone and of its economic governance, but it also demonstrated the ability of member states to mobilise themselves and produce a concrete response to the problems created by the Greek crisis. Having offered €80bn in support to Greece, the European Union put a €450bn package on the table to protect against any refinancing risk, particularly in the euro zone’s peripheral countries. In addition, a system of loans funded by bond issues to which all European Union countries are signatories has already
SOUTH EAST ASIA IN THE GLOBAL ECONOMY
≥ SOUTH EAST ASIA MULTILATERAL RELATIONSHIPS
intervene on the currency markets, boosting their reserves of foreign currencies and government bonds, particularly from the US, as they do so. This extra demand for Treasury stock tends to hold bond yields at a very low level, in turn boosting capital flows to emerging markets still further. Emerging market currencies are therefore subject to upward pressure and their capital markets are rising strongly, particularly as governments deploy expansionist monetary policies in order to limit the pressure on currencies. This rise in capital markets will help support domestic demand, particularly in the ASEAN nations. The European Union therefore has high hopes that it will be able to grow its trade with the countries of south-east Asia and thus strengthen the commercial links between our two regions.
1 CHAPTER
pment of economic partnerships between Europe and the ASEAN nations is therefore essential for growth on both sides. However, it is of particular importance for the European Union at a time when growth prospects for the next few years are weak. The clean-up in European Union budgets over the next few years and the recovery from recession will hit economic activity. The strength of the ASEAN nations could help Europe come out of recession faster. And there is potential there. Although the European Union is the main export market for ASEAN nations, exports from the European Unions to the ASEAN nations are stuck at a low level. In addition, the countries of south-east Asia are likely to see rapid growth over the next few years. There are structural factors that have allowed emerging economies to be less affected by the recession and have helped them enjoy a significant recovery. First, the low level of per capita income suggests that the gap will continue to narrow. Secondly, trade links between emerging economies have grown rapidly in recent years, and the banking systems of these countries came through the crisis comparatively unscathed. Thirdly, the thawing of political relations and the speed at which information is transmitted make these markets more open to international investors. Lastly, emerging economies benefit from a substantial cyclical factor directly related to the maintenance of very low interest rates in the USA, which result in substantial capital flows into these countries. Their governments, in seeking to limit the rise in their currencies,
33 PAGE
been approved and has worked. The euro zone has shown its ability to face up to its responsibilities and will continue to count in the economic world. An awareness of the importance of innovation and R&D will allow the continent to maintain its lead in a number of fields. And European consumers are nearly as important as their peers across the Atlantic. Private consumption accounts for 60% of European Union GDP, or more than €7,000bn! But the big challenge for the euro zone to my mind is its ageing population. The share of those aged over 65 in the euro zone will rise from 18% at present to 25% in 2030. And given the social security systems in this continent, such a demographic shift means that we will have to rethink not only their financing but also the entire economic growth model. One of the good things to come out of the current turbulence is that it will force the euro zone to prepare for this difficult passage in its economic growth. This is the silver lining. TGI: How important is a trade relationship with South East Asia for the strength of the European economy? PB&GHS: ASEAN and the European Union have a lot in common, and in particular their desire to strengthen their economic, political and cultural integration so as to be better able to open up to others. Moreover, the European Commission was the first international body to establish relationships with ASEAN in 1972. The European Union is the largest trade partner for the USA and Japan and the largest export market for ASEAN nations after the USA. The develo-
≤
SOUTH EAST ASIA IN THE GLOBAL ECONOMY
sources Manager for HSBC Worldwide, what are the key success criteria for achieving the management of Continental Europe? PB: In reality, it is my entire experience with HSBC, more than 35 years, that has shaped my management style, rather than the twenty months I spent as General Manager for Group Human Resources. I have acquired experience working in many different regions such as the Middle East, Asia, the South Pacific, Continental Europe and the UK and in all of the bank’s business lines which means I have a very good understanding of HSBC’s rich diversity. When I was asked to head up Continental Europe, I felt that the region was a microcosm of HSBC. Continental Europe at HSBC is made up of 25 countries, 14 developed and 11 emerging countries, from Ireland to Russia, Kazakhstan and Israel, and is home to 18 different official languages. In addition, all our business customer groups are active in the region. We decided to move the regional headquarters from London to Paris. The idea was quite simple; we wanted to move out of the shadow cast by both the Group’s HQ and the very large UK bank because it was difficult to get people excited about some of the countries within the region, which are small in comparison to the UK. We also wanted the regional HQ to sit in France, which is our biggest regional business, to leverage the competence we have there. For the regional management to be successful we must leverage the centres of excellence across the region and the central team needs to be composed of the right mix of people. In addition to the local talent in France, I have brought in some highly qualified
"Our head office’s role is to facilitate, drive, inspire and control. We can’t do everything at the regional centre and what I am trying to encourage the various countries is that they help each other rather than always turning to the HQ for assistance."
1 CHAPTER
TGI: Based on your experience as Human Re-
and motivated HSBC staff both from London and across the continent, in addition to a few selective external hires.. TGI: Managing a corporate entity comprising 18 languages and 25 countries brings numerous challenges: how do you describe your management style and your leadership for building a homogeneous team? PB: I would sum up my management style as “do as you would be done by”. I don’t believe in micromanaging people. We have regular monthly meetings to make sure people are on track using a balanced scorecard and heatmap approach. I believe in being approachable and having short lines of communication as hierarchies tend to filter out what is going on within an organisation. People must feel free to voice an opinion or share bad news as part of a good risk management culture. I’ve been around long enough to know that I’m not good at everything and that I need people in my team who have a broad range of skills. I’m extremely proud of the team of people who work for me at the regional HQ. This team is fairly representative of the region with 13 different languages spoken which means that most people can call the regional HQ and speak to someone in their mother tongue. By bringing local people from most countries represented in the region, we open informal communication channels. It is also helps me to understand what may be going on in far away
≥ SOUTH EAST ASIA MULTILATERAL RELATIONSHIPS
Mr Boyles
37 PAGE
GETTING PERSONAL WITH
≤
≥ SOUTH EAST ASIA MULTILATERAL RELATIONSHIPS
≥
CHAPTER
1
PAGE
38
SOUTH EAST ASIA IN THE GLOBAL ECONOMY
countries that are part of my region. For me, it was important to build direct communication channels with each country, while keeping a small but efficient team: thus we halved the number of employees working at the regional HQ. Our head office’s role is to facilitate, drive, inspire and control. We can’t do everything at the regional centre and what I am trying to encourage the various countries is that they help each other rather than always turning to the HQ for assistance. TGI: the responsibility of such a region in terms of disparity and geographical size allows you to promote staff internally and to build a network of opportunities for all your employees. How do you picture your responsibility in terms of bringing the best opportunities to your international staff across all Continental Europe?" PB: It is my wish to make Continental Europe the “best region to work in”. For this, I plan to stay in this position for at least 3 years, and I actively discourage decisions being taken without the involvement of the country CEOs concerned. I have some key objectives during my term of leadership of Continental Europe: I wish to create value, keep enhancing the brand, grow our business in all customer segments, drive services standards up in the region, establish a high level of confidence in and commitment to the region internally and significantly increase mobility from country to country. Let me conclude with a note on two programmes that are close to my heart. Firstly, our European Management Trainee Programme allows staff to move up the management ladder and to benefit from international assignments. Secondly, we have set up a “diversity and inclusion” committee as we believe that diversity and inclusion are key imperatives to business success. It is important that each employee feels part of what we are doing and through our Global People Survey we are able to measure levels of employee engagement and make improvements to working life based on the feedback. If people are happy and can prosper then I feel that engagement takes care of itself. My job in a nutshell, as CEO of Continental Europe, is to unleash constructive energy to build a sustainable business.
" My job in a nutshell, as CEO of Continental Europe, is to unleash constructive energy to build a sustainable business."
SOUTH EAST ASIA IN THE GLOBAL ECONOMY
≤
are the most attractive for foreign investors in the world, whereas Africa has attracted only a relatively small share of global inward FDI and has a limited outward FDI. However, these last years, African countries began to look for FDI actively, and put this objective first and foremost in their development policy. With its strong inward FDI experience, developing Asia may provide Africa with policy insights on how to attract and benefit from FDI. Moreover, a number of Asian eco-
1 ≥Mr Chong Lit Cheong, CEO of International Enterprise, Singapore
1 CHAPTER
In terms of GDP, most of the African economies are small, we can consider that the biggest economy is South Africa. But when we compare it with several economies of developing countries in East Asia and of the Southeast, in particular China, Republic of Korea and Indonesia, their economies are substantially bigger than that of South Africa. The disparity in the growth of income and the levels between both regions is reflected in their FDI performance. The East and the South-East Asia seem as zones that
39 PAGE
"The global crisis has brought to the forefront the strong growth potential and resilience of Africa. The continent looks set to enjoy steady long-term growth in view of its abundant natural resources, large population of 1 billion people across 53 cities, improved political and macroeconomic conditions, and commitment by the governments to develop a sustainable infrastructure to support this growth. Singapore’s own history of development has allowed the country to be in a relevant position to share its experiences globally. Singapore enterprises have a successful track record of projects spanning areas such as urban planning, transport & logistics, public housing, environmental protection, water preservation and regeneration, to healthcare and education. I believe there is significant scope for many win-win partnerships between Singapore and African businesses. For African companies looking to expand into a similarly fast-growing Asia, Singapore, with its strategic geographical location, stable economy and business-friendly environment, will serve them well as a springboard into the region. The Africa Singapore Business Forum which was launched in July 2010, is intended to be a platform where such interactions and partnerships can be catalysed." [1]
≥ SOUTH EAST ASIA MULTILATERAL RELATIONSHIPS
≥
SOUTH EAST ASIA IN THE GLOBAL ECONOMY
nomies could be sources of increased FDI for African economies. Singapore, India and Malaysia are the top Asian sources of FDI in Africa. Since the mid-1980s, outward FDI from East and South-East Asian developing economies has increased. Sustained and rapid economic growth has led to growing land and labour shortages and rising operating costs, and, together with appreciating currencies, has pushed firms in East Asia to relocate their labour-intensive industries and processes abroad to remain domestically and internationally competitive. The TNCs are mainly conglomerates in Hong Kong (China), the Republic of Korea, Singapore and Taiwan Province of China. Korean chaebols have done well abroad in heavy industry, construction and some consumer goods, while firms from Hong Kong (China) and Singapore
have expanded abroad in real estate development, hotel development, air and sea transportation, and banking and finance. In addition, China and other ASEAN economies, particularly Malaysia, are emerging as significant FDI sources, both within the region and beyond.[1] Among ASEAN countries,only Singapore and Malaysia have significant investments in Africa. Singapore’s FDI in Africa is highly concentrated and is preponderantly in Mauritius. In contrast, Malaysia’s FDI is highly dispersed geographically throughout Africa, including in many LDCs such as Chad, Guinea, Malawi, Mozambique and the United Republic of Tanzania. This makes Malaysia an interesting case study of Asian FDI in Africa.[2]
in Africa from South East Asia
Company
Industry or product
Country of investments
Genting
Mauritius, South Africa
MISC MRCB Opus International
Conglomerate (including hotels and leisure, plantations, powergeneration) Oil palm refining property and trading Shipping Broadcasting Asset management
Petronas
Oil and gas
Putera Capital
Financial services
Ranhill Power Sime Darby
Power generation Palm oil refining
Telekom Malaysia
Telecommunications
Chad, Guinea,Mozambique, Niger, Somalia, Sudan,South Africa Ghana, Mozambique, United Rep. of Tanzania Tanzania Egypt, United Rep.of Tanzania, Tunisia Guinea, Malawi
IOI Corp ≥ SOUTH EAST ASIA MULTILATERAL RELATIONSHIPS
TABLE 1
Mauritius Nigeria Ghana South Africa
CHAPTER
1
PAGE
40
1 ≥ ASIAN FOREIGN DIRECT INVESTMENT IN AFRICA, Towards a New Era of Cooperation among Developing Countries, UNITED NATIONS New York and Geneva, 2007 p32 2 ≥ ASIAN FOREIGN DIRECT INVESTMENT IN AFRICA, Towards a New Era of Cooperation among Developing Countries, UNITED NATIONS New York and Geneva, 2007 p33
Source: asian foreign direct investment in africa, Towards a New Era of Cooperation among Developing Countries, united nations New York and Geneva, 2007 from: unctad, based on Zainal, 2006 and company websites.
≥ Malaysian Investors
Gibraltar Global Investor’s Guide 2012
In association with
milestone GRP
Year in Review | Diplomacy & Politics | Economy | Finance | Energy | Industry | ICT | Transport & Logistics | Real Estate & Construction | Health & Education | Tourism & Retail
Dubai2012
thebusiness year
In this issue
ECONOMY REVIEW
BACK TO BASICS
25—A renewed focus on trade, finance, and tourism is paying dividends FINANCE INTERVIEW
MORE THAN THE MONEY
60—Abdulla Mohammed Al Awar on the growing role of the DIFC INDUSTRY REVIEW ISBN 978-1-908180-09-4 9
7 8 1 9 0 8
GOOD TO GROW
93—Heavy investments in industrial activity are giving Dubai a new edge
Dubai 2012
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TRANSPORT & LOGISTICS INTERVIEW
NO TIME TO REST
130—HH Sheikh Ahmed Bin Saeed Al Maktoum on the success of Emirates Airlines
800 CHAMBER
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HELPING YOUR BUSINESS IS OUR BUSINESS
Dubai2012
In partnership with:
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46
His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice-President & Prime Minister & Ruler of Dubai - INSIDE
Mohammed Al Zarooni, Director General of the Dubai Airport Freezone (DAFZ) Authority - INTERVIEW
48
Arif Obaid Al Dehail, CEO of the Ports, Customs, & Free Zone Corporation (Trakhees) - INTERVIEW
49
Khalid Bin Kalban, Managing Director & CEO of Dubai Investments - INTERVIEW
50
Malcolm Wall Morris, CEO of Dubai Multi Commodities Centre (DMCC) - INTERVIEW
YEAR IN REVIEW
Dubai FDI
8
PERSPECTIVE
10
The Dream Continues
DIPLOMACY & POLITICS
13
13
A Vision True - REVIEW
51
Living Better - FORUM: Why Dubai?
16
HE Reem Al Hashimi, Minister of State & Managing Director of the Dubai World Expo 2020 Bid Committee- INTERVIEW
52
Mouayed Makhlouf, MENA Regional Director of the International Finance Corporation, World Bank Group - INTERVIEW
17
Don’t Stop Me Now - FOCUS: The UAE’s 40th Anniversary
53
Mustafa Abdel-Wadood, CEO of Abraaj Capital Limited - INTERVIEW
18
Lord Green of Hurstpierpoint, Minister of UK Trade & Investment - INTERVIEW
54
Samer Sarraf, Senior Vice-President & Country Head UAE of Amwal Al Khaleej -
19
HE Lee Myung-bak, President of the Republic of Korea - GUEST SPEAKER
21
Francisco J. Sánchez, US Under Secretary of Commerce for International Trade -
23
INTERVIEW
FINANCE
Matías Mori, Executive Vice-President of Chile’s Foreign Investment Committee -
55
The Twin Zones - REVIEW: Banking
56
Y. Sudhir Kumar Shetty, COO of Global Operations at UAE Exchange - INTERVIEW
58
HE Abdulrahman Saleh Al Saleh, Director General of the Department of Finance -
INTERVIEW 13
24
55
INTERVIEW
John Shimmin MHK, Minister for the Department of Economic Development of the Isle of Man Government - INTERVIEW
INTERVIEW
ECONOMY
30
55
25
25
Back to Basics - REVIEW
30
The Way Forward - FOCUS: Strategic Plan
32
HE Sheikha Lubna Bint Khalid Al Qasimi, Minister of Foreign Trade of the UAE -
60
Abdulla Mohammed Al Awar, CEO of the Dubai International Financial Centre (DIFC) Authority - INTERVIEW
62
Saeb Eigner, Chairman of the Dubai Financial Services Authority (DFSA) - INTERVIEW
INTERVIEW
63
Rick Pudner, Group CEO of Emirates NBD
HE Sami Al Qamzi, Director General of the Dubai Department of Economic Development - INTERVIEW
64
Raghu Malhotra, Division President, Middle East & North Africa of MasterCard
36
Fahad Al Gergawi, CEO of the Foreign Investment Office of Dubai FDI - INTERVIEW
65
By Your Side - FORUM: Private Banking
37
Let’s All Come Together - ROUNDTABLE:
66
Rob Broedelet, Country Executive UAE at ABN AMRO - INTERVIEW
67
A Little Encouragement - ROUNDTABLE:
38
Hamad Buamim, Director General of the Dubai Chamber of Commerce & Industry INTERVIEW
68
Something Different - Q&A: Local Banks
40
Go Get ‘Em - Q&A: Business Development
69
Just Add Liquidity - REVIEW: Capital Markets
42
Free for All - FOCUS: Free Trade Zones
70
44
Salma Ali Saif Saeed Bin Hareb, CEO of the Jebel Ali Free Zone (Jafza) - INTERVIEW
Gary Anderson, CEO of Dubai Gold & Commodities Exchange (DGCX) - INTERVIEW
71
Find the Pool - Q&A: Local Exchanges
34
- INTERVIEW
- INTERVIEW
Foreign Chambers
International Banks
Dubai2012
Making the Most of It - FORUM: Capital Markets Development
ICT
73
Premium Market - REVIEW: Insurance
113
An Apt Success - REVIEW
74
Michel Khalaf, President of Europe, Middle East & Africa for MetLife - INTERVIEW
116
HE Mohamed Nasser Al Ghanim, Director General of the Telecommunications Regulatory Authority (TRA) - INTERVIEW
76
Keep It Safe - FORUM: Insurance
118
Eesa M. Bastaki, CEO of the ICT Fund - INTERVIEW
78
Ahmad Al Kazim, Managing Director of ASCANA - INTERVIEW
119
Osman Sultan, CEO of Emirates Integrated Telecommunications Company PJSCdu - INTERVIEW
121
Join the Cloud - ROUNDTABLE: IT Infrastructure Development
122
Across the Board - Q&A: Global IT Solutions
123
Stirring Interests - FORUM: IT & Media
72
ENERGY 79
Flip the Switch - REVIEW
80
Adnan H. Ghabris, CEO & Managing Director of NPS Energy - INTERVIEW
79
82
Saeed Abdullah Khoory, CEO of the Emirates National Oil Company (ENOC) -
84
Ahmad M. Bin Shafar, CEO of Empower -
85
Khamis Juma Buamim, Chairman of Drydocks World & Maritime World -
86
Going Green - FOCUS: Dubai Green Economy
87
INTERVIEW
INTERVIEW
101
Partnership
Adnan Sharafi, Chairman of the Emirates Green Building Council (EGBC) - INTERVIEW Ivano Iannelli, CEO of the Dubai Carbon Centre of Excellence - INTERVIEW
89
Nasser H. Saidi, Chairman of the Clean Energy Business Council - INTERVIEW
90
Lord Marland of Odstock, Chairman of UK Trade & Investment’s Business Ambassadors’ Group & Minister of the Department of Energy & Climate Change of the UK - INTERVIEW
92
79
INTERVIEW
88
91
113
It’s Easy Being Green - FORUM: Green Technology
Nabil A. Habayeb, President & CEO of the Middle East & North Africa for General Electric - INTERVIEW
TRANSPORT & LOGISTICS 125
In the Right Mode - REVIEW
130
HH Sheikh Ahmed Bin Saeed Al Maktoum, Chairman & Chief Executive of Emirates Airline & Group - INTERVIEW
132
Mohammed A. Ahli, Director General of the Dubai Civil Aviation Authority -
134
Paul Griffiths, CEO of Dubai Airports - INTERVIEW
135
Upstairs, Downstairs - Q&A: Airlines
136
Habib Fekih, President of Airbus Middle East - INTERVIEW
137
Beyond the Sea - FOCUS: Port Expansion
138
Sultan Ahmed Bin Sulayem, Chairman of DP World - INTERVIEW
139
Never a Naysayer - Q&A: Logistical Solutions
140
Movers & Storers - ROUNDTABLE: Logistics
INTERVIEW
INDUSTRY
93
93
Good to Grow - REVIEW
94
Anne Ruth Herkes, State Secretary, German Federal Ministry of Industry & Technology - GUEST SPEAKER
98
Abdulla J.M. Kalban, President & CEO of Dubai Aluminium (DUBAL) - INTERVIEW
100
Coming Together - ROUNDTABLE: Local Industry
101
In the Same Neighborhood - FOCUS: Dubai Industrial City
102
Abdulla Bel Houl, Managing Director of Dubai Industrial City - INTERVIEW
103
The Perfect Fit - FORUM: Auto Retailers
104
Top of the Line - FOCUS: Automobile Industry
106
K. Rajaram, CEO of Al Nabooda Automobiles - INTERVIEW
107
Check It Out - FOCUS: FMCGs
109
Tarek El Sakka, General Manager of Dubai Refreshments - INTERVIEW
110
Jamal Al Ghurair, Managing Director of Al Khaleej Sugar - INTERVIEW
111
Yves Manghardt, Chairman & CEO of Nestlé Middle East - INTERVIEW
thebusinessyear
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113
125
ISBN 978-1-908180-09-4
Managing Director Ayşe Hazır Valentin
Regional Editor Leland Rice Country Manager Betül Çakaloğlu Country Editor Johanna Cronin Assistant Country Managers Andreea Cruceanu Simona Romeo
179
Setting the Record Straight - REVIEW
184
Khalid A. Bin Sulayem, Director General of the Department of Tourism, & Commerce Marketing - INTERVIEW
186
Salah Al Qassim, Advisor to the Dubai Culture & Arts Authority - INTERVIEW
141
Editorial Director Jason J. Nash Regional Director Peggy Rosiak
179
TOURISM & RETAIL
Publisher Rupert Smith
REAL ESTATE & CONSTRUCTION
141
141
Quality Does Count - REVIEW: Real Estate
189
146
Marwan Ahmed Bin Ghalita, CEO of the Real Estate Regulatory Agency - INTERVIEW
Gerald Lawless, Executive Chairman of Jumeirah Group - INTERVIEW
190
In the Fast Lane - Q&A: Business & Leisure
148
Nicholas Maclean, Managing Director of CBRE Middle East - INTERVIEW
192
Sami Nasser, Vice-President of Operations at Sofitel Middle East, Egypt, & Indian Ocean - INTERVIEW
193
Come Stay with Me - Q&A: Luxury Hotels
194
Equine to a Tee - Q&A: Golf & Racing
196
Shopping Paradise - FOCUS: Retail
198
Laila Suhail, CEO of Dubai Events & Promotion Establishment (DEPE) - INTERVIEW
Hotels
149
Live & Belong - Q&A: Local Majors
150
Mohamed Alabbar, Chairman of Emaar Properties - INTERVIEW
151
Take My Advice - Q&A: Consultants
Analysts Matthew Carroll Peter Speetjens
152
Build Me Up - ROUNDTABLE: Real Estate
Transcribers Lars Larsson Attila Pelit Jared Wall
153
Strong Recovery - FORUM: Management
154
The Top Out - REVIEW: Construction
199
156
Danny Lubert, Joint Chairman of The First Group - INTERVIEW
Colm McLoughlin, Executive Vice-Chairman of Dubai Duty Free - INTERVIEW
200
Anurag Agrawal, Managing Director of Canon Middle East - INTERVIEW
Creative Director Genee Presta
157
Design Front - FORUM: Construction
201
Cover Illustration Pınar du Pre
158
On the Rise - ROUNDTABLE: Materials
Anan Fakhreddin, CEO & Member of the Board of Damas - INTERVIEW
202
That Little Something - Q&A: Luxury Retail
Sub-Editors Peter Howson Emily Mallis Tyler Mattiace Eric A. Edwards
Advertising Manager Caroline Miller
Operations Manager Serpil Yaltalıer Operations Assistant Semiha Elkıran Circulation & Marketing Director Amy Burtin Printing: Apa Uniprint Production: The Business Year 78 York Street London W1H 1DP T +44 (0)207 692 8335 F +44 (0)207 692 8336 info@thebusinessyear.com www.thebusinessyear.com The Business Year is a tradename of Wildcat Publishing Inc. Copyright The Business Year International Inc. 2012. All rights reserved. No part of this publication may reproduced, stored in a retrievable system or transmitted in any form or by any means, electronic, mechanical, photocopied, recorded or otherwise without prior permission of The Business Year International Inc. The Business Year International Inc. has made every effort to ensure that the content of this publication is accurate at the time of printing. The Business Year International Inc. makes no warranty, representation or undertaking, whether expressed or implied, nor does it assume any legal liability, direct or indirect, or responsibility for the accuracy, completeness or usefulness of any information contained in this publication.
Outlook
Engineering
HEALTH & EDUCATION
159
159
Filling the Gaps - REVIEW: Health
160
David Hadley, CEO of EHL Management Services - INTERVIEW
162
HE Qadhi Saeed Al Murooshid, Director General of the Dubai Health Authority INTERVIEW
164
Thomas J. Murray, CEO of American Hospital Dubai - INTERVIEW
166
Dr. Ayesha Abdullah, Managing Director of Dubai Sciences Cluster - INTERVIEW
167
Heal Me - FORUM: Private Health Care
168
Leading the Region - Q&A: Medical Technology
169
Abboud Bejjani, Regional Director, Middle East, Africa, & Pakistan at Abbott Laboratories S.A. - INTERVIEW
170
Rashad Hassan Al Moosa, Joint Managing Director & Partner of Gulf Drug - INTERVIEW
171
Engineering Innovation - ROUNDTABLE:
172
Top of the Class - REVIEW: Education
175
Dr. Abdulla Al Karam, Chairman of the Board of Directors & Director General the Knowledge & Human Development Authority - INTERVIEW
172
179
DuBiotech
EXECUTIVE GUIDE
203
203
The Set Up - REVIEW: Legal
208
Mahmud P.K. Merali, Managing Partner of Merali’s (formerly Baker Tilly Merali’s) INTERVIEW
Dino Varkey, Group Executive Director & Board Member of GEMS Education -
209
Number Crunch - REVIEW: Accountancy
177
The Key to Knowledge - Q&A: Local Educators
212
Be In the Know - ROUNDTABLE: The Ins & Outs
178
On Campus - Q&A: Business Schools
213
When in Dubai...
176
INTERVIEW
of Setting Up Shop
Dubai2012
8 DUBAI
1
thebusinessyear
DUBAI 9
INSIDE PERSPECTIVE
HH Sheikh Mohammed Bin Rashid Al Maktoum Dubai & the Emerging World His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice-President & Prime Minister & Ruler of Dubai.
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Dubai and the UAE sit at the intersection of one of the most transformative moments in geo-economic history. The future always surprises us. We cannot predict it, but we do have a responsibility to look ahead and trace its outlines, as well as the opportunities and challenges it will present. In 2050, our young nation, the United Arab Emirates, will be almost exactly twice as old as it is today. Forty years of foresight and strenuous hard work by our people and our country have led to our achievements and laid the foundations for our global position today and a prosperous future. Dubai and the UAE sit at the intersection of one of the most transformative moments in geo-economic history in more than a century: the gradual but inevitable shift of the economic center of gravity from the West to emerging markets and the rise of new trade markets. Between now and 2050, emerging markets will be the main engine of global
economic growth. In this new world, trade flows will be infinitely more connected than ever before, and goods, services, and people more mobile than at any time in the past. Here in Dubai and the UAE, we see these trends as positive. While we recognize the profound importance of safeguarding our identity and traditions—keeping sight of who we are and where we come from— we embrace the possibilities the future presents for our people, our city, and our country. Standing at the center of trade between the Middle East and Asia linking Latin America, Africa, and beyond, Dubai is shaping and catalyzing this new world of trade and investment flows. Trade is important, of course, but we also recognize the importance and resilience of a knowledge-based economy as a key driver of sustainable growth and opportunities. We continue to invest not just in hard infrastructure but also in soft infrastructure; our education, our healthcare, and a culture that promotes the research and development of new ideas. Based on our vision of the new world,
we are equally committed to building a sustainable environment that supports the growth of our economy. Our Green Economy Initiative announced earlier this year reaffirms our commitment to diversify energy sources and preserve the environment whilst strengthening our competitive position. Through this initiative, we aim to become a world-leading center for the export and re-export of green products and technologies. While there are many routes to success, here in Dubai, we are seizing the economic, cultural, and scientific opportunities represented by the future, forging new connections, and positioning Dubai for growth across this decade and the ones that follow.
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His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President & Prime Minister & Ruler of Dubai Dubai contributes to global cooperation by hosting a variety of international events, such as the World Economic Forum
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YEAR IN REVIEW
The Dream Continues IRAN
QATAR
UMM AL QUWAIN AJMAN SHARJAH
DUBAI
ARABIAN GULF
Abu Dhabi
UNITED ARAB EMIRATES
SAUDI ARABIA
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DUBAI 11
STRAIT OF HORMUZ
LENGTH OF LAND BORDERS (UAE)
867 km
IRAN
AREA
4,114 km2 TOTAL POPULATION
OMAN
2 million
RAS AL KHAIMAH
LIFE EXPECTANCY (MALE / FEMALE - UAE)
77 / 79
GDP (NOMINAL 2011)
$84.7 billion
UNEMPLOYMENT RATE (JUNE 2012) FUJAIRAH
4.60%
INFLATION RATE (JUNE 2012)
1.83%
CURRENT ACCOUNT SURPLUS (UAE)
$112.7 billion
GULF OF OMAN
LOCAL GOVERNMENT STRUCTURE (UAE)
Seven Federal Emirates AL AIN
LEGISLATIVE POWER (UAE)
40-member Federal National Council (8 from Dubai) RULER
HH Sheikh Mohammed Bin Rashid Al Maktoum POLITICAL STRUCTURE
Constitutional Monarchy
OMAN
Dubai’s high standard of living and dynamic society makes it a secure Middle Eastern destination. Largely located along the western coast of the UAE, Dubai is now home to more than 2 million people. The expatriate population of the city that is drawn from all corners of the world helps to drive the local economy and contribute much to the lifeblood of this thriving metropolis. The success of Dubai’s economic development is attributable not to its hydrocarbon reserves, but to its growing status as a trading hub for the Gulf and beyond. Dubai’s total revenues from oil and gas account for less than 2% of the Emirate’s GDP, and form just 2% of the UAE’s total gas revenues. In order to provide for the long-term future of Dubai, the diversification of the local economy was long ago recognized as being vital to its success. The construction boom that resulted from Dubai’s ambition to become a tourism and trading destination to rival any major city in the world has been in part complemented by its swiftly developing financial sector. In 2011 the GDP of Dubai grew by 3.4%, reaching $84.7 million, indicating that the Emirate is showing signs of recovery following the challenging 2008-2010 period. Regional political uncertainty has served to bolster the recovery in 2012, with rising oil prices boosting the UAE’s economy, while the security of Dubai’s infrastructure is attracting trade, hospitality, and financial investment into the city. Dubai has historically been an important regional emporium, and the city’s Jebel Ali Port is one of the world’s largest trading hubs. The Dubai International Financial Centre (DIFC) is an offshore free zone designed to make Dubai a world-class financial hub and has helped strengthen investment in the finance sector. The DIFC operates under a unique legal and regulatory framework, and businesses operating in the “city within a city” can be wholly owned by foreign entities and benefit from zero income and profits tax. Other free zones attracting foreign investors to Dubai include Dubai Internet City, home to giants such as Microsoft and IBM, and Dubai Media City, where CNN, BBC, and Reuters all have offices. Dubai Healthcare City, in collaboration with DuBiotech, was established to be a center for world-class medical practice and research excellence and is attracting investments from a number of different private clinical practices. Tourism has long been and looks set to remain one of the key strengths of Dubai’s economy. A 2011 report from CBRE indicated that Dubai is now on par with London as the most popular shopping destination in the world. Dubai Duty Free is the largest retailer in the Dubai2012
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The Dubai government continues to direct considerable energy into the diversification of the local economy. Exchange Rate AED vs. USD 3.6728 3.6726 3.6724 3.6722 3.6720 3.6718 3.6716
2Q 2012
1Q 2012
4Q 2011
3Q 2011
2Q 2011
3.6714
Source: OANDA
GDP (constant prices) in USD billions 86 85 84 83 82 81 80 79 78 77 76 2007
2008
2009
2010
2011
Source: Dubai Statistics Centre
Age Pyramid (2012) in millions, according to age group MALE
FEMALE 100+ 95-99 90-94 85-89 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4
6
4.8
3.6
2.4
Source: US Census Bureau
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1.2
0
0
1.2
2.4
3.6
4.8
6
world, and there are over 70 shopping malls in the city. It is estimated that by 2015 Dubai will attract 15 million tourists yearly. The hotel industry has reported strong occupancy rates in 2011 and 1H2012, and it was far less affected by the global financial crisis than the real estate market. Following the opening of the new Green Line metro extension in 2011, UAE Vice-President and Prime Minister and Ruler of Dubai HH Sheikh Mohammed Bin Rashid Al Maktoum symbolically took to the lines in an effort to encourage residents and tourists alike to make use of the city’s advanced transportation infrastructure. The drive to encourage the use of public transport in the city is also part of the wider UAE government’s increase in diplomatic engagement concerning climate change issues. In 2009 the UAE won the bid to host the headquarters of the International Renewable Energy Agency, and it continues to promote research and investment in the UAE for renewable energy sources. The Dubai government continues to direct considerable energy into the diversification of the local economy, and while the real estate sector is fighting hard to show signs of recovery, the wider economy is expected to show healthy growth of 4.5% in 2012. There are sizeable investments being directed into infrastructure, including road, rail, airport, and civil aviation development. Investments in these areas are set to make up a total of 43% of the government budget. The Dubai World Central’s Al Maktoum International Airport also began passenger operations in 2011 and is expected to have a capacity of 5 million passengers a year by 2017. Dubai has benefited from increased trade with markets across South and West Asia, and this trend looks set to continue over the medium term. A drop in investor confidence in the greater Middle East has also served to strengthen Dubai’s economy over 2011, and as long as the market remains stable, businessfriendly, and convenient to access, it will continue to draw in investors looking to serve the surrounding regions from a reliable base of operations. All these indicators are supportive of Dubai’s bid to host the 2020 World Expo, which will attract even more attention to the achievements of the past half century.
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DIPLOMACY & POLITICS INSIDE 13 A Vision True - REVIEW | 16 HE Reem Al Hashimi, Minister of State & Managing Director of the Dubai World Expo 2020 Bid Committee - INTERVIEW | 17 Don’t Stop Me Now - FOCUS: The UAE’s 40th Anniversary | 18 Lord Green of Hurstpierpoint, Minister of UK Trade & Investment - INTERVIEW | 19 HE Lee Myung-bak, President of the Republic of Korea - GUEST SPEAKER | 21 Francisco J. Sánchez, US Under Secretary of Commerce for International Trade - INTERVIEW | 23 Matías Mori, Executive Vice-President of Chile’s Foreign Investment Committee - INTERVIEW | 24 John Shimmin MHK, Minister for the Department of Economic Development of the Isle of Man Government - INTERVIEW
REVIEW
A Vision True Dubai’s leadership platform has offered the stability needed for the Emirate to take a principal political and economic role in the region.
A vibrant world city and regional hub, Dubai is poised to play a critical role in the 21st century. The Emirate is the largest by population and fastest growing in the UAE. Over the last century, Dubai evolved from a small fishing village known for the pearl trade to a thriving energy producer. Today, Dubai has invested its wealth from oil and gas in economic development and transformed itself into a center in the Gulf region for shipping, ICT, media, and services. With its focus on infrastructure development, including the construction of the world’s tallest building and largest airport terminal in the world, the Emirate has also established itself as a regional leader in commerce, transportation, and tourism, providing extraordinary standards of quality and a world-class experience to increasing numbers of tourists and business elites. Boasting some of the world’s most luxurious hotels and serving as a regional headquarters for major technology, financial, and media multinationals, Dubai has successfully leveraged its location and unique cosmopolitan mix of nationalities. Known as the “City of Gold,” due to its robust gold market, Dubai offers leisure and business travelers unparalleled amenities such as the opportunity to stay in one of the world’s few seven-star hotels or fly in style on one of Emirates’ new Airbus 380s. Image: Mohammed Nairooz
The flag of the UAE was adopted on December 2, 1971. The colors of red, black, green, and white symbolize the unity of the Arab nations.
UAE GOVERNMENT STRUCTURE Governed as a federation of constitutional monarchies since its independence from the UK in 1971, the UAE includes Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah, and Umm al-Quwain. The government of the UAE Dubai2012
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Council. Decisions are made by a majority vote, except for certain substantive issues requiring a minimum of five votes, including the vote of Dubai and Abu Dhabi. In 2011, the UAE held parliamentary elections to fill 20 positions on the Federal National Council, the primary legislative and advisory body for the federal government. With the goal of promoting increased political participation, the government of the UAE expanded the electoral college to more than 129,000 eligible voters, up from approximately 6,500 in 2006. A total of 469 candidates contested the election, including 85 female candidates. Four elected representatives and an additional four representatives appointed by the ruler represent Dubai in the 40-member body.
DUBAI MUNICIPAL GOVERNMENT
1 Image: Official US Navy Imagery
In 2007, Dubai launched the Dubai Cares platform, a philanthropic organization with the aim of contributing to the UN Millennium Development Goals.
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is guided by a federal constitution that establishes the privileges and duties of the executive, legislative, and judicial branches of the national government as well as reserving substantial powers and autonomy for the governments of the individual emirates. The balance of power between the emirates at the national level corresponds to the size and influence of each emirate, with Abu Dhabi and Dubai assuming the largest share of leadership responsibility. As the capital city of the UAE, the ruler of Abu Dhabi has served as the President since the country’s formation, with the ruler of Dubai serving as the Prime Minister and Vice-President. The constitution of the UAE also establishes the rights, freedoms, and duties of Emirati citizens and gives the federal government responsibility for foreign policy, international economic policy, and national security. HH Sheikh Mohammed Bin Rashid Al Maktoum is the Ruler of Dubai as well as Prime Minister and Vice-President of the UAE, positions that he has held since 2006 following the death of his older brother, Sheikh Maktoum Bin Rashid Al Maktoum. Sheikh Mohammed is also a member of the UAE’s Supreme Council of the Union, the highest executive body in the UAE, consisting of the rulers of each of the seven emirates. The UAE’s Supreme Council is responsible for formulating and implementing national policies regarding budget and fiscal policy, national security policy, and international agreements and treaties. Dubai, along with Abu Dhabi, maintains a veto on the
Since 1833, Dubai has been under the leadership of the Al Maktoum family. The local government of Dubai, or the Dubai Municipality (DM), was established in 1954 by Sheikh Rashid Bin Saeed Al Maktoum. Today, the Dubai Municipality is chaired by Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai, and brother of Sheikh Mohammed Bin Rashid Al Maktoum. The DM oversees local government entities such as the Roads Department, Planning and Survey Department, Environment and Public Health Department, and Financial Affairs Department. Sheikh Hamdan also serves as the Finance Minister of the UAE, and has led UAE delegations to the IMF and OPEC. Two of Sheikh Mohammed’s sons, Sheikh Hamdan Bin Mohammed Al Maktoum, who is the Crown Prince of Dubai, and Sheikh Maktoum Bin Mohammed Bin Rashid Al Maktoum, assist their father and uncle with the administration of DM as deputy rulers of Dubai. The Crown Prince also serves as the Chairman of the Dubai Executive Council and head of the Mohammed Bin Rashid Establishment for Young Business Leaders. Sheikh Maktoum, Sheikh Hamdan Bin Mohammed’s brother, serves on the boards of several media and technology companies in Dubai as well as working closely and traveling with the President and Prime Minister of the UAE on foreign trips. Another key royal family member and leader in municipal public affairs is Sheikh Ahmed Bin Saeed Al Maktoum, Sheikh Mohammed’s youngest brother and chairman of Dubai World. Sheikh Ahmed has been a business leader in Dubai for more than 25 years as well as serving as Second Vice-Chairman of the Dubai Executive Council and Chairman of the Dubai Supreme Fiscal Committee.
INTERNATIONAL AID Dubai not only uses its economic wealth for business and trade, but also for international aid. In 2007, Dubai launched the Dubai Cares platform, a philanthropic organization with the aim of contributing to the UN Millennium De-
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velopment Goals aimed at reducing poverty in developing countries through improving education levels and gender equality. The primary focus of Dubai Cares is to improve classroom conditions and the quality of education in poor and developing countries. Although the program originally aimed to raise AED200 million, contributions far exceeded this target, totaling more than AED1.7 billion, or some $463 million. Dubai Cares has partnered with other international NGOs and aid organizations such as the Melinda and Bill Gates Foundation, Care International, Medecins Sans Frontieres, Oxfam, Partnership for Child Development, Plan International, Room to Read, Save the Children, UNICEF, UNRWA, WaterAid, and the World Food Program. The organization shares the view of the UN Millennium Development Goals that education is the best way to lift societies out of poverty and is working to achieve universal primary education and significant improvements in equal gender access to education by providing aid to more than 7 million students in 28 countries. Describing his country’s humanitarian efforts on his website, Sheikh Mohammed says, “our aid has humanitarian objectives only; it is never governed by politics or limited by the geography, race, color or religion of the beneficiary. We provide humanitarian capital and are a major relief station for the poor; we do not hesitate to help and support the brother, the ill-fated friend, or the needy wherever they are. This is our message to the world, and this is the United Arab Emirates.” Dubai is also playing an increasingly important role in the world of global sports and horse racing. Thanks to the support of Sheikh Mohammed and his love for sports, Dubai now hosts numerous international competitive events, including the Dubai Tennis Championships, the Dubai Desert Classic golf tournament, the Dubai Rugby Sevens, and the Dubai World Cup. The Dubai World Cup, established in 1996, has a $10 million purse for the winner, making it the world’s most valuable horse-racing prize. An accomplished athlete and horseman himself, the Ruler of Dubai strongly supports the development of Dubai as an international sports destination and hopes to increase the sports offering in the coming years.
FOREIGN RELATIONS In the realm of international affairs, the UAE maintains cordial relations with neighboring countries and projects its stability and focus on economic development internationally. Despite the difficulties faced in the Gulf region over the past few decades, including the Iran-Iraq war, the occupation of Kuwait, and the US invasion of Iraq, Dubai and the UAE have managed to steer clear of conflicts and maintain stability during difficult periods of regional turmoil. In an interview with TBY, Reem Al Hashimi, Minister of State, emphasized that the UAE has “a
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Image: World Economic Forum
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positive and extremely open relationship with all countries around the world.” While the UAE maintains good relations with the US and the West, Foreign Minister Sheikh Abdullah Bin Zayed Al Nahyan has made the case for expanding relations with rising economic powers. He said in a recent speech that the UAE “look[s] forward to bolstering our relations with fast growing countries, such as India, Russia, China, Brazil, and South Africa.” Looking forward, Dubai hopes to bolster its profile yet further with its bid to host the World Expo 2020. Supporters of Dubai’s candidacy argue that the Emirate is a crossroads of culture and ideas, and that its geography and rapidly developing infrastructure make it a central location to bring together countries from the north, south, east, and west. When looking at the Emirate’s ambitious growth over the past five decades, it is easy to understand how it has developed into a central part of the global economy.
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HH Sheikh Mohammed Bin Rashid Al Maktoum receives US Secretary of the Navy Ray Mabus in April 2012 HH Sheikh Mohammed Bin Rashid Al Maktoum and HH Sheikh Ahmed Bin Saeed Al Maktoum, Chairman & Chief Executive of Emirates Airline & Group A group of officers from the Elite Dubai Police Special Task Force parade at the “March For Peace” event organized in 2012 in Zabeel, Dubai
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INTERVIEW
HE Reem Al Hashimi TBY What are the main strengths of Dubai as a possible location for the World Expo 2020? REEM AL HASHIMI Dubai’s commitment to
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Show & Tell TBY talks to Reem Al Hashimi, Minister of State and Managing Director of the Dubai World Expo 2020 Bid Committee, on the Emirates preparations to bring the exposition to the UAE.
host the World Expo is really about placing Dubai as a location where culture, ideas, and people from all around the world can come together to share and contribute their thoughts and add meaning and value to the environment and world around them. We believe that Dubai has many factors that make it a particularly good candidate, with the first being its geographic positioning. We have a very good position between East and West and have very strong relations with countries in the south. Historically, both in the last 40 years as the UAE and long before, we have always been a kind of hub. This is a place where people from all over have passed through. Secondly, we feel we have some incredible infrastructure, from our airport to roads to ports to the metro; we have everything necessary to facilitate the flow of millions of people who will have to come through. The third important quality that Dubai has is the fact that it is already a mini expo with more than 200 nationalities living here and showcasing their nationalities, art, and culture. To have 200 different nationalities that live and work here is something very special and shows that we are very open to the world. I think our fourth strength is that this is such a strong place for business. Some of the most important companies from around the world are here; 60% or 70% of the Fortune 500 companies have headquarters in Dubai. What is the idea behind the “connecting minds, creating the future” theme?
BIOGRAPHY
Reem Al Hashimi was sworn in as Minister of State in the Cabinet of the UAE in February 2008. She is also the Managing Director of Dubai’s World Expo 2020 executive body. She has experience in international affairs, beginning her career as a Commercial Attaché and, subsequently, as Deputy Chief of Mission at the UAE Embassy in Washington, DC. She completed her undergraduate studies at Tufts University, where she earned BA degrees in International Relations and French. She also holds a Master’s Degree from Harvard University.
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Reem Al Hashimi, Minister of State and Managing Director of the Dubai World Expo 2020 Bid Committee
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The UAE is a responsible global citizen. We look at the world around us and realize there are challenges out there; we then try to address them. This notion of global citizenship is very important for Dubai and for the UAE in general. We believe that “connecting minds, creating the future” is the right theme as we feel that through doing that we can address global challenges. What we have done is looked at the global challenges in the world today and what they may be in 2020. Some will be energy security, employment generation for the youth, integration, the empowerment of women, climate change, and the efficacy of aid programs. What we see today may be exacerbated by 2020 and we want our theme to address these global challenges and help to provide solutions for them.
To have 200 different nationalities that live and work here shows that we are very open to the world.
What motivated the choice of the large plot by the new Al Maktoum Airport as the proposed location for the event?
Expo 2020 is really a national project that involves the support of all of the Emirates and, obviously the Prime Minister. We felt that having a site that is located half an hour from Abu Dhabi’s airport and 40 minutes from Dubai’s airport will allow us to capitalize on the strengths of both cities. It is also connected to the Al Maktoum International Airport through a seamless corridor and to Dubai’s ports. We see this connection with the new ports and airports as one large web of connectivity. The 400-hectare site will be best leveraged because it is connected to such important logistics and transportation nodes. How important is Dubai’s role in terms of the development of the new Silk Route?
Our role as a hub has dated back to the early 19th and 20th century. We have evidence of people who have come through Dubai to East Africa and Europe to Asia and East Asia. This is something that is very integral to us as a fact of history. With Dubai, we have that historical merit, and the city is built upon it. Dubai is also very keen to become more modern and efficient, embracing new technology and new ways of doing things. We see ourselves as very much a part of the new Silk Route. There are more than 200,000 Chinese people who live in the UAE. We have over 4,000 Chinese companies based out of the Emirates. Every single day, you will see travellers here making that East to West journey and now, more and more, we see the South to North connections as well. In my daily interaction with colleagues in Africa and sub-Saharan Africa, I see that movement continuously. It is all happening in Dubai, primarily.
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FOCUS: The UAE’s 40th Anniversary
Don’t Stop Me Now
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An inimitable social and economic story reached its 40th year in December 2011, as the UAE celebrated its anniversary with lavish festivity. The groundwork is now being laid for the next 40 years. Since its beginnings, the UAE’s growth arc has been underlined by the successful exploitation of oil wealth and a steadfast commitment to its economic foundations based on trade. On December 2, 2011, Dubai joined the 40th anniversary celebrations of the creation of the UAE in grand style with fireworks, parades, and music. The successor to the Trucial States Council that had been set up under the British protectorate system to coordinate investments from growing oil wealth, the UAE was formed after negotiations prompted by the British announcement of the end of its protectorate system. Dubai, which had already become a significant port under the British, thus joined Abu Dhabi, which had already begun pumping oil in the early 1960s, to convince the other sheikhdoms to join. While six agreed to unification on December 2, 1971, the seventh, Ras al-Khaimah, joined in 1972. The following boom, propelled by significant investment in its historic trade vocation, is credited to the late Sheikh Zayed Bin Sultan Al Nahyan, President of the UAE and ruler of Abu Dhabi, and Sheikh Rashid Bin Saeed Al Maktoum, Vice-President of the UAE and Ruler of Dubai. Between 1973 and 1980, increasing oil revenues were
pumped into large-scale cluster developments in Dubai, including the World Trade Center, an extension of Port Rashid, and the Dubai Dry Docks. The Jebel Ali Port and Industrial Area, however, stands as the most significant economic development in Dubai’s history, evolving into the Jebel Ali Free Zone (Jafza) in 1985. With a combined investment of $2.3 billion, Dubai thus filled a gap in transshipment infrastructure that followed an explosion in imports into the GCC region caused by increasing oil revenues. Today then, under HH Sheikh Mohammed Bin Rashid Al Maktoum, Dubai, with significantly less carbon resources than Abu Dhabi, continues as a transshipment hub as well as an expatriate haven. Emiratis form a minority of Dubai’s population, and the overall UAE, as a legacy of the drive to attract foreign skills to best exploit the nation’s resources. In a progressive move, however, and in celebration of the UAE’s 40th anniversary, Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE, granted the children of Emirati women married to foreigners the right to apply for citizenship. In another gesture, he also ordered pay raises of up to 45% for all federal government employees.
The celebration itself embodied the history of the Emirates, under the “Spirit of the Union” slogan, and was a weeks’ long culmination of national pride and festivity. With much to celebrate, Dubai now looks to carry its economy forward on the same growth arc, opening Dubai Maritime City, the latest addition to its maritime trade infrastructure portfolio between Port Rashid and Dubai Dry Docks. Equally, Jafza retains its significance today, with construction also underway to develop the South Zone. The zone already hosts 6,700 global companies, and contributes 20% to Dubai’s GDP. Jafza is also now home to Al Maktoum International Airport, which began cargo operations in 2010, to be followed later by passenger operations. Complementing Dubai International Airport, the hub is planned to become the largest airport in the world by freight handled, processing up to 12 million tons per year. The celebrations, then, were a keen reminder of the origins of the city, and the Emirates at large, and poignant at a time when Dubai seeks to boost its traditional role as trade hub.
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The UAE was established in 1971
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INTERVIEW
Lord Green of Hurstpierpoint TBY You last visited in Autumn 2011. Why did the recent trade mission choose the UAE specifically? LORD GREEN In the current economic cli-
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The Eighth Emirate TBY talks to Lord Green of Hurstpierpoint, Minister of UK Trade & Investment, on upcoming events designed to bring companies in the UK and the UAE closer together.
BIOGRAPHY
Lord Green began his career with the Ministry of Overseas Development. In 1977, he joined management consultants McKinsey & Co Inc, with whom he undertook assignments in Europe, North America, and the Middle East. He joined HSBC in 1982 with responsibility for corporate planning activities and in 1985 was put in charge of the development of the bank’s global treasury operations. In 1992, he became Group Treasurer of HSBC Holdings and in 1998 he became Executive Director of the same bank. His is currently Minister of UK Trade and Investment.
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Lord Green of Hurstpierpoint, Minister of UK Trade & Investment
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mate, trade and investment have taken center stage as sources of sustainable growth, with governments and consumers no longer able to turn to debt to finance their spending. The UAE is a very important market for the UK. It is the 16th largest export market for the UK globally, and the number one market in the region. It is an exciting and growing market that UK companies are very keen to do business with. While our relationship is very strong, there is still more to do in order to build up business in the UAE and to encourage companies from the UAE to enter the UK market.
There are some 4,000 British companies based in the UAE and 100,000 British nationals living there.
During your trip in 2011, many references were made to London as the “Eighth Emirate.” What is special about the investment relationship between the UAE and the UK?
UAE companies have invested significantly in the UK, from the London Gateway, which will be London’s largest deep-sea port and logistics park, funded by DP World, to the London Array offshore wind farm. I welcome this investment, which brings great benefits to both sides. The UAE is also a popular destination for people from the UK. There are some 4,000 British companies based in the UAE and 100,000 British nationals living there. Many of them have been involved in the UAE’s development over the past decade, helping to make it the exciting, diverse regional hub it has become. Dubai has emerged as a regional hub for investment and business activities throughout the Middle East. What has made Dubai successful in this way?
It is clear that in recent years the center of gravity in the global economy has shifted from west to east, and from north to south. Dubai has successfully positioned itself as a hub for the growing economies of the Middle East and Africa. The vision of Sheikh Mohammed Bin Rashid Al Maktoum has diversified the country’s economy away from traditional oil and gas businesses into a finance, investment, and tourism hub. In which industries and sectors do you see the most potential for greater commercial integration between Dubai and the UK?
There are many sectors where the UK and
the UAE already work closely together. Ties with the Lord Mayor of the City of London are very close. In terms of infrastructure, British companies are very active in the UAE and vice versa. There are also great opportunities for closer commercial integration across all sectors, such as education, ICT, health care, energy, life sciences, and the creative industries. In autumn 2011, UK Trade & Investment will be inviting British companies to attend the “Big 5 2012” construction fair and trade show. What is your outlook for UK businesses operating in Dubai and for the region as a whole in the coming year?
I am very positive about UK businesses in the UAE, not least because an increasing number of them are going out to test the waters. UK Trade & Investment in the UAE helped around 2,400 British companies in 2011, and this number has grown despite the global downturn—a sure sign that the market continues to offer exciting opportunities and that UK SMEs are willing to take on the challenge. We are well on the way to achieving our aim of increasing bilateral trade to £12 billion by 2015—a good indication of the strong economic bonds that continue to exist between our two countries and the significant investment opportunities that lie ahead.
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GUEST SPEAKER
HE Lee Myung-bak
Image: IAEA Imagebank
Hold the Dream Lee Myung-bak, President of the Republic of Korea, on a common vision for Dubai and Korea, growing trade relations, and the importance of working together to tackle climate change.
BIOGRAPHY
Lee Myung-bak was elected President of the Republic of Korea in 2007. Prior to entering politics he had a 27-year career with Hyundai Group. He joined the company in 1965 and just five years later, at the age of 29, he became a company director. By age 35 he was Korea’s youngest CEO ever. Upon retiring as chairman of the company in 1992 he successfully ran for two consecutive terms in the Korean National Assembly before becoming Mayor of Seoul from 2002 to 2007. He is a graduate of Korea University. 1
Lee Myung-bak, President of the Republic of Korea
Our two countries share a common spirit, and we have built an important and successful economic partnership. His Highness Sheikh Zayed Bin Sultan Al Nahyan was a pioneer and a true visionary. His indomitable will and steadfast leadership prepared the UAE for the future and accomplished what many simply considered impossible. We find such vision and commitment still alive today in Dubai. Under the extraordinary leadership of His Highness Sheikh Mohammed Bin Rashid al Maktoum, Dubai has become the model for the 21st century. Man-made islands, waterways, and ultra-modern architecture harmoniously coexist with their natural surroundings. Dubai has successfully blended together modernity, the environment, and aesthetics. Dubai has already taken steps to undergo another great transformation by making itself the model of what it means to be a green city in the 21st century. Dubai is a living testament of what human imagination, creativity, commitment, and able leadership can achieve. Korea also believes in realizing dreams. Korea was a country ravaged by decades of colonial rule followed by a devastating war that left the entire country in utter ruin. However, Koreans were able to transform
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the country from one of the poorest in the world into a robust and dynamic country. Many thought that Korea was hopeless, but the Korean people believed in their dreams. We have also become a country that is now providing assistance to others. We successfully hosted the G20 Seoul Summit, contributing to common prosperity and shared growth. For a country that was once sustained solely by outside help, it is a phenomenal achievement that we are proud of. And the reason we achieved such growth was because we believed in our dreams and worked to make them happen. Our two countries share a common spirit, and we have built an important and successful economic partnership. Trade between the UAE and Korea reached $22.1 billion in 2011. Today, Korea is the world’s seventh largest exporting country, and the UAE is its largest export market in the Middle East. UAE exports to Korea rose 21.2% to $14.75 billion in 2011, and Korean exports to the UAE grew 32.4% to $7.26 billion. It is believed that UAE-Korea trade will grow by 21% in 2012 to a record $26.6 billion. South Korean firms are now important participants in many key projects in the UAE, from nuclear power to infrastructure. UAE firms are increasing their role in Korea, entering partnerships to ensure Korea’s energy security and running one of the country’s largest ports. As a young man, I devoted my life to making my country prosperous. That Dubai2012
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For a country with one of the world’s largest oil reserves, I know it took courage and vision for it to make this decision to prepare for the post-oil era.
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South Korean President Lee Myung-bak waves to the crowd
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was my dream. Later, when I became Mayor of Seoul, I worked hard to realize another dream of mine, which was to make Seoul a green metropolis; a city to be truly proud of and comfortable to live in. A long time ago, there used to be a stream that flowed through the heart of Seoul, but it was covered up and left to fester. I got rid of the concrete expressways and the covering that had been in place for decades. I restored the stream to let it breathe again. Today, the silver fish, which are known to live only in the cleanest waters, have returned. When I became President in 2008, my dreams for Korea continued to grow. As we celebrated our 60th anniversary of the founding of the nation, I put forth a new vision. Our “Low-Carbon Green Growth” vision is our answer to the future. We believe that protecting the environment and attaining sustainable growth can go together. Our Framework Act on Low-Carbon Green Growth is the first of its kind in the world. We are investing over 2% of our GDP into green technology, and are pleased to be able to share our knowledge and expertise with the UAE. South Korean nuclear energy professors have taken up posts at Khalifa University, and Emirati engineering students have visited Seoul to learn about the nuclear industry. A South Korean Green Economy agency is also working in Masdar City. Climate change is undoubtedly the defining chal-
lenge of our time. However, we consider this challenge as an historic opportunity. Our Green Growth initiative is revolutionizing the way we think, and the UAE is also thinking creatively to seize this historic opportunity. When we look at the nuclear power plant in Abu Dhabi, the renewable energy project in Masdar, and Dubai’s construction of an eco-friendly, high-tech city of the future, I applaud the UAE’s vision and foresight. For a country with one of the world’s largest oil reserves, I know it took courage and vision for it to make this decision to prepare for the post-oil era. And this is why Korea is proud to be the UAE’s partner in this endeavor, a journey to create a better, cleaner future for all. Climate change cannot be addressed by a few countries. It is a global challenge that requires a global solution. It must involve our developing partners as well as the advanced countries. This is why Korea launched the Global Green Growth Institute (GGGI) in June 2010, for which the UAE will be its strategic partner. The regional office for the GGGI in the UAE will act as a hub for the Middle East and North Africa. This institute will be focused on finding workable solutions and bringing genuine change. Our responsibility is to work together to make this world a better place, for ourselves and for our children. Let us show the world the power of dreams.
DIPLOMACY & POLITICS 23
INTERVIEW
Matías Mori See For Yourself TBY talks to Matías Mori, Executive Vice-President of Chile’s Foreign Investment Committee, on a recent trade drive with the UAE, the opening of a UAE embassy in Santiago, and the benefits of investing in Chile. TBY What are the positive outcomes from your visit to Dubai? MATÍAS MORI I came to Dubai with Pro-
Chile, the Chilean promotion bureau, to participate in the Gulfood 2012 fair. We are aiming to enhance the volumes of trade between Chile and the region. When you promote a country, there are three sectors to consider: international trade, investments, and tourism. International trade and tourism have a similar sales pitch in terms of attracting customers, but investments are a different ball game. While in tourism, you may hope for surprises in a newly discovered country, in investments you don’t want any surprises. International trade is a precursor to investments. We have seen the volume of trade increasing between the UAE and Chile. We want to reach a tipping point at which the international trade between the two countries reaches the investment level. What does the opening of the UAE’s embassy in Santiago in 2011 say about the trade relationship between the two countries?
International relations are based upon signaling, and this was a great signal for us. It demonstrates the commitment of the UAE to the region. We are hoping to launch direct flights from Santiago to Dubai. There is a direct flight to Brazil, and they will open a new route to Argentina. However, the volume of trade has a high correlation with the number of direct flights. What does Dubai have to offer in terms of Chile’s opening up to the Middle East?
Dubai is a hub. Its people have local regional knowledge, share the same religion, and practice the same customs. It’s easier for us to go through Dubai than to make trade relations with the neighboring coun-
tries on our own. Dubai has 1,400 hotels. The hospitality sector is huge, and there is a lot of room for the international trade of Chilean products such as wine, fruit, and dried foods. What other exports is Chile promoting in Dubai?
In terms of international trade, there are certain sectors we are tying to push, such as pharmaceuticals. The are many pharmaceuticals companies that want to set up here. Other manufactured products, such as produced olive oil, are also in demand. In terms of investments, we have a portfolio of public and private projects in sectors such as agribusiness, infrastructure, energy, and mining. We are especially focused on agribusiness, given the fact that this region has issues with food security, and Chile has very healthy food production. Chileans consume just 20% of what we produce. We also have the third-largest supply of lithium, following Kazakhstan and Bolivia. What opportunities and challenges do you anticipate in Dubai?
I think that food is critical, and we have many opportunities in that sector. If it wishes to become a technology hub, it will start to require lithium, iron, and copper. There is a problem with branding; when other countries think about Latin America, they tend to focus on Brazil, the same way China has been the focal point in Asia. There are many countries on the side that are not as well-known and considered. We are trying to brand our position and sell our attributes. Latin America is a region of the world, and people usually view it with a lot of prejudice and believe the stereotypes, which are simply untrue in Chile. How do you help businesses interested in investing in Chile?
There is a huge difference between the governments in the Gulf region and governments back home. In Chile, the government comes behind the private sector, as the private sector leads and knows best. However, in the Middle East it’s more government-to-government. The trade commissioner supports people who may be willing to invest, and while we are here in Dubai, we try to set them up with a plane to Chile. You can trade or make a touristic decision based on a brochure, but it’s very unlikely that someone will invest without
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seeing the country itself. Our goal is to convince them to visit Chile. How supportive has the UAE government been during this initiative?
The government has openly supported us. The fact that it opened an embassy is a good sign. Since the UAE is flying to Brazil, it’s a signal that there is more interest in the region. The UAE is becoming more aware of Latin America and its potential, especially during these times when Europe is not doing so well. The US also has an election this year, and the UAE is viewing that as another opportunity to try and diversify its portfolio in terms of investments.
BIOGRAPHY
Matías Mori was appointed as Executive Vice-President of the Foreign Investment Committee by Chilean President Sebastián Piñera on July 12, 2010. He was awarded his undergraduate degree in law at the Universidad Católica de Chile and holds a Master of Law degree from the Law School of the University of Chicago and a Master of Public Administration degree from Harvard University’s John F. Kennedy School of Government. His professional experience is primarily in corporate law where he has worked on bond placements and the negotiation of syndicated loans on behalf of Chilean state enterprises and overseas companies. In addition, he has advised state companies and private investors on projects in the hydrocarbons sector. 1
Matías Mori, Executive Vice-President of Chile’s Foreign Investment Committee
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INTERVIEW
John Shimmin MHK
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Island & the Sun TBY talks to John Shimmin, Minister for the Department of Economic Development of the Isle of Man Government, on the development of the relationship between Dubai and the Isle of Man and the potential opportunities for investors. TBY The Isle of Man and Dubai share a number of economic strengths. What scope is there for an enhanced trade relationship? JOHN SHIMMIN Indeed, we share mutual
strengths in independent areas of expertise, which are not necessarily mutually exclusive. Our desire is to explore opportunities with the Emirates and further develop the already positive relationship at a government level. Equally, the Isle already has a number of excellent businesses and brands operating in the Middle East region, fully complementing the local offering. Examples include our life insurance companies, such as Zurich, which bases its international operations on the Isle, employs several hundred people in the UAE, and sells investment and savings products globally. The government on the Isle of Man is committed to providing support to such organizations. What role does the UAE and wider Middle East play in the ongoing trade development vision?
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Without a doubt, the Middle East has emerged as a key region in a global economic context, particularly over the past two decades. Furthermore, the ongoing growth pattern remains evident. This factor and Dubai’s geographic location will continue to ensure the prominence of the region. The Isle of Man has recognized the opportunities, and for some time our government-to-government relationship has been strong. We have identified a number of possibilities to explore and the authorities are excited by the mutually beneficial prospects. While there have been past visits by former ministers and chief ministers to the region, with the advent of our new department committed to a sustained regional strategy for developing relationships, the Middle East has the potential to become our second most important market after the UK. In which sectors do you see particular development potential opportunities?
Both the Middle East and the Isle of Man have demonstrated excellence in many areas. Undoubtedly, the financial services sector will feature in our joint appraisal of areas in which we can work together. In particular, our vibrantly successful international wealth management offering has potential; many globally branded businesses use the Isle of Man as a center from which to operate. We anticipate great opportunities as we explore this further. The Isle of Man also has clear strengths in asset structuring, retirement solutions, and succession planning. Diversity is a feature of the relevant economies, and we will welcome discussions at both a government and business level in the coming months. For now, a number of great ideas are emerging, which we are very eager to explore in the region. We know that sharia-compliant products may be important in the region, and there is no reason why our businesses cannot offer these. I know one or two companies that already do. We also now have foundations that are more readily accepted structures for holding assets in civil law countries, recognizing that our traditional trusts were not as popular. What are the benefits for the registration of aircraft from the UAE and the wider Middle East?
We are proud of our renowned aircraft register, a highly successful component of our overall proposition. The register has a number of features. It is the world’s only
aircraft registry dedicated exclusively to executive jets, and our legislation and requirements are tailored uniquely to the executive jet sectors. In addition, we recognize and accept design standards and licenses issued by multiple jurisdictions, with an unrivalled service standard. Our charging scheme is highly competitive and includes a secure mortgage register. The private and public sectors work together closely to offer an integrated one-stop shop for our clients. Lastly, we offer a neutral national registration prefix (M), which is highly desirable to many owners. How strong is the government-to-government relationship?
The respective governments have fostered a relationship for many years, and I am aware that former chief ministers are cited with great fondness by many existing government officials in the Emirates. Following meetings at the end of 2011 between counterparts from the Isle of Man and Dubai, we signed a Memorandum of Understanding (MoU) between the Department of Economic Development in Dubai and the Isle in January 2012. This is designed to underline our desire to work together for mutual benefit and will be the subject of a number of meetings during my visit to the region. We will pursue further agreements in the Middle East—the recently signed Double Taxation Agreement with Qatar is just one example.
BIOGRAPHY
John Shimmin was educated at the Worcester College of Higher Education, where he studied Physical Education. Having enjoyed a successful career in teaching both in the UK and the Isle of Man, he decided to enter politics in 1996 and was elected to the Island’s Parliament (Tynwald) as a member of the House of Keys (MHK) for Douglas West. In 1999, he became Chairman of the Isle of Man Post Office and then went on to undertake a variety of ministerial roles in the Departments of Transport, Home Affairs and Local Government, and the Environment. In 2010, he became Minister of the Environment, Food, and Agriculture before being appointed by the Chief Minister to his present position as Minister for the Department of Economic Development in October 2011. 1
John Shimmin, Minister for the Department of Economic Development of the Isle of Man Government
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ECONOMY INSIDE 25 Back to Basics - REVIEW | 30 The Way Forward - FOCUS: Strategic Plan | 32 HE Sheikha Lubna Bint Khalid Al Qasimi, Minister of Foreign Trade of the UAE - INTERVIEW | 34 HE Sami Al Qamzi, Director General of the Dubai Department of Economic Development - INTERVIEW | 36 Fahad Al Gergawi, CEO of the Foreign Investment Office of Dubai FDI - INTERVIEW | 37 Let’s All Come Together - ROUNDTABLE: Foreign Chambers | 38 Hamad Buamim, Director General of the Dubai Chamber of Commerce & Industry - INTERVIEW | 40 Go Get ‘Em - Q&A: Business Development | 42 Free for All - FOCUS: Free Trade Zones | 44 Salma Ali Saif Saeed Bin Hareb, CEO of Jafza - INTERVIEW | 46 Mohammed Al Zarooni, Director General of DAFZ - INTERVIEW | 48 Arif Obaid Al Dehail, CEO of Trakhees - INTERVIEW | 49 Khalid Bin Kalban, Managing Director & CEO of Dubai Investments - INTERVIEW | 50 Malcolm Wall Morris, CEO of the DMCC INTERVIEW | 51 Living Better - FORUM: Why Dubai? | 52 Mouayed Makhlouf, MENA Regional Director of the IFC, World Bank Group - INTERVIEW | 53 Mustafa Abdel-Wadood, CEO of Abraaj Capital Limited - INTERVIEW | 54 Samer Sarraf, Senior Vice-President & Country Head UAE of Amwal Al Khaleej - INTERVIEW
REVIEW
Back to Basics As growth rates return to show a steady rise, Dubai’s efforts to refocus the economy toward its traditional strengths in trade, finance, and tourism have ushered in a remarkable recovery that is paving the way for sustainable, longterm growth.
Built by HH Sheikh Rashid Bin Saeed Al Maktoum in 1978, the Dubai World Trade Centre was the tallest building in Dubai when completed. It plays host to companies such as Federal Express, General Motors, Johnson & Johnson, MasterCard International, Schlumberger, and Sony.
Although Dubai was hit hard by the global financial crisis in 2009, its economy has recovered remarkably over the past three years. Efforts to diversify the economy and promote a business-friendly environment have led to a resurgence in foreign investment that has put the Emirate on the path to sustainable, longterm growth. In 2011, GDP reached $84.7 billion, growing by 3.4%, up from the 2.8% GDP growth the Emirate registered in 2010. This trend of accelerating growth is expected to continue through the medium term, with GDP growth in 2012 predicted to reach 4.5%. This is likely to put Dubai in the leading position in the recovery of the UAE economy by 2013, with the Emirate’s predicted 2012 growth rate more than a percentage point higher than the 3.2% expected for the UAE overall. One of the factors that distinguishes Dubai from many other regional economies is its comparatively low reliance on petroleum revenues. Although Dubai’s economy was built off the back of the oil and gas sector in the 1960s and 1970s, it now accounts for less than 2% of its GDP, and Dubai contributes less than 2% to the UAE’s total petroleum revenue, compared to more than 96% from Abu Dhabi, which generates nearly half of its GDP from oil and gas. This stands in contrast to the strength of Dubai’s non-oil sector, which accounts for more than 76% of non-oil GDP in the UAE. Indeed, Dubai’s role as a regional hub for business, finance, retail, and tourism is one of the main reasons it Dubai2012
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GDP by Sector 2011
WHOLESALE & RETAIL 29.0% RESTAURANTS & HOTELS 3.8% TRANSPORT, STORAGE, & COMMUNICATIONS 13.1% REAL ESTATE & BUSINESS SERVICES 12.1% FINANCE 11.3% OTHER 9.4% MANUFACTURING 13.3% CONSTRUCTION 8.0%
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Growth Rates by Sector as a percentage
Major Exports in AED billions
PEARLS, PRECIOUS STONES, & METALS 64.6 BASE METALS 8.2 PREPARED FOOD, BEVERAGES, & TOBACCO 5.4 PLASTICS & RUBBER 4.3 MINERAL PRODUCTS 3.8 OTHER 11.8
Source: Dubai Statistics Centre
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Finance
Transport, Storage, & Communications
Wholesale & Retail
Restaurants & Hotels
16 14 12 10 8 6 4 2 0 -2 -4
Manufacturing
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is expected to spearhead economic growth in the UAE in the coming years. While the petroleum sector, fueled by rising international oil prices, has led the initial recovery in the UAE, Abu Dhabi is now approaching maximum oil production capacity, and analysts are looking to Dubai, as the region’s non-oil economic leader, for the next wave of growth that will take the country’s economy through the next decade. Prior to the global financial crisis, Dubai’s economic growth was fueled largely by its real estate and construction sectors, which accounted for nearly 30% of GDP in 2007. At that time, Dubai’s property sector was the fastest growing in the world, with construction and real estate reaching 23% and 30% growth, respectively, in 2007. Now, as Dubai looks set to spearhead regional recovery with the strength of its non-oil economy, the government is making remarkable strides in promoting economic diversification and sustainable, long-term investment. Dubai has renewed its focus on being a regional hub for business and trade and working to promote growth. As Hamad Buamim, Director General of the Dubai Chamber of Commerce and Industry (DCCI), told TBY in an interview, “the main lesson learned was about stability... and [the need to] focus on achieving sustainable growth over a longer period... the city is geared toward helping companies prosper with business-friendly laws, modern infrastructure, and a diverse and predominantly young workforce.” The success of Dubai’s efforts has been demonstrated by the extraordinary growth that the DCCI has experienced in the past few years. In 2011, the Chamber added over 10,000 new members, boosting by nearly 10% the current membership, a trend that already looks set to
continue with an additional 2,000 members having joined the organization in 1Q2012. The main drivers of growth in Dubai’s economy are now the Emirate’s traditional industries of shipping and logistics, tourism and retail, manufacturing, and financial services, all of which have rebounded to their pre-crisis levels and are now leading the way toward sustainable, long-term growth. As Sami Al Qamzi, Director General of Dubai Department of Economic Development (DED), explained to TBY, “the progressive build-up of dynamism and confidence visible across our key sectors demonstrates that 2012 will energize growth in Dubai.” In addition, many developers have now resumed construction projects that were halted in 2008 and 2009, which means that, despite the hit they have taken, the construction and real estate sectors still accounted for more than 20% of overall GDP in 2011. Tourism, hospitality, and retail are some of Dubai’s largest industries, and the Emirate is often referred to as the shopping capital of the Middle East, drawing in huge numbers of shopping tourists from across the region and from as far afield as Eastern Europe, Africa, and South Asia. Taken all together, hospitality, along with wholesale and retail trade, accounted for nearly 34% of Dubai’s GDP in 2011. The two sectors showed strong growth in 2011, with wholesale, retail, and repairing services growing by 5.8% and the restaurant and hotel industry growing by 14.7%. The sectors look set for future growth with 9 million tourists expected to visit the
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Dubai is a candidate to host Expo 2020, under the slogan “Connecting minds, creating the future.”