Powered by record-high oil prices and a flood of regional liquidity, Dubai’s economy continues on a fast track of impressive growth, with no slowdown in sight. The emirate’s ambitions continue to grow, and with over $100bn worth of projects in the works, Dubai is keeping an eye on its long-term economic sustainability. Emerging Dubai 2006 explores the political and economic developments shaping the emirate today through expert analyses, as well as interviews and viewpoints from leading movers and shakers, including Deputy Ruler Sheikh Hamdan bin Rashid Al Maktoum, DED Director General Mohamed Ali Alabbar, Nakheel Chairman Sultan bin Sulayem and US real estate tycoon Donald Trump.
TABLE OF CONTENTS
With the smooth transition of leadership to Sheikh Mohammed in early 2006, Dubai looks set to continue on a path of stable and continuous economic growth. Recent hints from the UAE’s leadership may even signal a trend towards increasing democratisation, with partial elections for Federal National Council possibly in the works. This chapter surveys recent political developments in the emirate, including the recent transition of power at both the local and federal level, the difficulty of maintaining an apolitical stance in an increasing polarised region and growing security concerns over Iran and Iraq. In-depth features from our specialists examine the life of the late ruler Sheikh Maktoum bin Rashid Al Maktoum and the government’s programme of Emiratisation. Interviews with Sheikh Hamdan bin Rashid Al Maktoum, Dubai’s Deputy Ruler and UAE Minister of Finance and Industry, and Mohamed Ali Alabbar, Director General of the Department of Economic Development and Chairman of Emaar Properties, provide a first-hand perspective. Viewpoints from Anwar Gargash, Minister of Federal National Council Affairs; James Zogby, President of the Arab American Institute; Anthony Harris, former UK Ambassador to the UAE; and Abdulkhaleq Abdulla, Professor of Political Science at Emirates University provide further perspective.
Dubai’s economy has rocketed ahead in recent years, racking up impressive growth and making the emirate a leading Arab success story and model for emulation. This chapter provides an overview of Dubai’s economy, with a focus on the free zone boom, the government’s struggle against piracy and counterfeiting, the challenge of rising local costs and the emirate’s ambitious plan to corner the regional tea trade. Also in the chapter, our specialists examine the emirate’s bid to lure knowledge workers, the dominant role of family-owned firms in the economy, and efforts to improve local environmental consciousness. The chapter also includes viewpoints from Steve Brice, Regional Head of Research at Standard Chartered, and Emilie Rutledge, Economist at the Gulf Research Centre, as well as interviews with Mohammed Khalfan bin Khirbash, UAE State Minister for Finance and Industry, and Sultan Bin Sulayem, Executive Chairman of the Ports, Customs & Free Zones and Executive Chairman of Nakheel.
With oil prices soaring and a strong diversification strategy now in place, Dubai’s banking sector looks set to maintain its strong growth. This chapter surveys the sector, examining who’s involved, what they do and how they profit from the emirate’s dynamic economy. In-depth analysis discusses the development of the DIFC and the rise of Islamic banking, as well as examines the emirate’s top-10 banks by assets. The chapter also features insider viewpoints from Douglas Dowie, CEO of the National Bank of Dubai, and Stephen Green, Group CEO of HSBC Holdings & Chairman of HSBC Bank Middle East, as well as interviews with Omar bin Sulaiman, Director General of the Dubai International Financial Centre, and David Knott, Chief Executive of the Dubai Financial Services Authority.
Fuelled by rising regional liquidity and the wider economic boom, the Dubai Financial Market has notched up record numbers over the past several years. Despite a significant market correction at end-2005 and into early 2006, the market looks set to recover as all the key factors underpinning growth are still in place. This chapter takes a closer look at the market, including 2005’s developments, recent IPOs, the opening of the DIFX and the share price manipulation scare of August 2005. Viewpoints from Hany Genena, Senior Economist at EFG-Hermes; Richard J. Amos, General Manager of the Investment Banking Division at NBAD; and Walid Shihabi of SHUAA Capital provide insiders’ perspectives on the market, while an interview with Essa Abdulfattah Kazim, Director General of Dubai Financial Market, is also included. OBG’s partner SHUAA Capital rounds out the chapter with shares analysis of six leading stocks on the Dubai stock exchange: Arab International Logistics, Arab Technical Construction, Dubai Investment Company, Emaar Properties, National Bank of Dubai and Tabreed.
Buoyed by the expansion of the wider economy, and particularly the boom in real estate and construction, Dubai’s insurance sector is enjoying a period of heady growth. This chapter examines the breakdown of the sector, highlighting the performance of both the life and non-life segments, the rise of Islamic takaful insurance and the problems of excessive reliance on reinsurance and the lack of sufficient industry regulation.
Having built the foundations of its present success on excellent infrastructure, Dubai is in no mood to let up, and plans are in the works to radically expand the emirate’s ports, airport facilities and road network. The transport chapter provides a closer look at each of these segments, laying out and assessing the emirate’s ambitious plans. In-depth features examine DP World’s ill-fated foray into the US market, the growing problem of traffic gridlock, and the outlook for the emirate’s ports. An interview with Sheikh Ahmed Al Maktoum, President of the Department of Civil Aviation, is also included.
With modest oil reserves in comparison to many of its Gulf neighbours, Dubai had to focus on diversifying its economy early on, and has subsequently made great strides towards freeing itself from oil dependency. The energy chapter takes a closer look at the history of oil production in Dubai, plans to make the most of the remaining reserves, the potential for cross-border gas pipelines and efforts to establish the emirate as a regional hub for multinational energy concerns. In an in-depth analysis piece, we take a closer look at the state of Dubai’s power and water utilities, including water conservation plans, the need for more electrical capacity and the move to link up with the UAE’s National Power Grid in 2006. An interview with Saeed Mohammed al-Tayer, CEO and Managing Director of DEWA, is also included.
With tourist arrivals at an all-time high and ever-more ambitious development plans in the works, Dubai’s tourism sector looks set to keep booming for the foreseeable future. This chapter takes a closer look at the emirate’s expansion plans for the sector, including expanding the national carrier (Emirates), constructing a second local airport (Dubai World Central), building the world’s largest theme park, and hosting more international sporting events and conventions. An in-depth analysis piece takes a closer look at the drawing power of Dubai shopping, particularly the malls, shopping festivals and Dubai Duty Free. The chapter also features interviews with Khalid Ahmed bin Sulayem, Department of Tourism and Commerce Marketing, and Maurice Flanagan, Vice-Chairman and Group President of Emirates.
CONSTRUCTION & REAL ESTATE
Dubai’s real estate market is in the midst of an epic boom, though with the sector now comprising 16% of GDP, some market watchers are starting to worry about the risk of a property bubble. This chapter surveys the state of the market, including projects in the pipeline, the tricky question of demand, the high-end segment, changes in property law, and the supply squeeze in the mid-priced segment. The construction overview examines the players involved in the market, the secret to Dubai’s quick completion times and the sector’s prospects, while an analysis piece provides an architectural perspective on the building boom. A special gallery section illustrates and details some of the emirate’s most ambitious upcoming projects. In addition, interviews with US real estate mogul Donald Trump and Hussein Lootah, Acting Director General of Dubai Municipality, are also included.
IT & TELECOMS
In recent years Dubai has emerged as the regional leader in IT sector. With the success of Dubai Internet City and ambitious plans for attracting knowledge workers, developing Dubiotech and expanding the e-government programme, the emirate plans to make the sector key to its long-term growth and development. In addition to IT, this chapter also examines the local telecoms market, focusing on Etisalat’s bold moves abroad, the entry of DU in second-half 2006 and the need for further liberalisation in the sector. In a viewpoint, Jonas Lindblad, Director of Dhow Capital, takes a closer look at Etisalat’s competitiveness.
Despite impressive incentives and an ideal business environment, Dubai has long had a rather lacklustre industrial sector. Despite the lack of raw materials, the government has plans to build on its major success story: Dubai Aluminium (Dubal). This chapter surveys the sector with a focus on niche manufacturing, free zones (particularly the Jebel Ali Free Zone Authority) and the growth of local cable and fertiliser producers. Additionally, a shorter piece highlights the booming shipyard and ship-repair segment, set to expand further with the development of Dubai Maritime City. An in-depth feature examines Dubal, focusing on its heady growth, commitment to environmental and quality standards, and ambitious plans for future expansion.
MEDIA & ADVERTISING
With Dubai Media City up and running, foreign media outlets now have a tax-free, hands-off base for regional news coverage. The local media isn’t faring quite so well, however, and self-censorship and taboo subjects remain an issue. The media overview covers recent developments in the sector, including the rise of Media City, the growing market for expatriate-oriented publications and the blossoming radio and TV segments. Additionally, a shorter feature examines the state of the emirate’s print segment. The advertising overview examines the sector’s major players and prospects for growth, both at home and abroad. In a viewpoint, Hani Soubra, BBC Regional Sales Manager for the Middle East, provides an insider perspective on the transformation of the media in Dubai.
Retail is big business in the emirate these days. This chapter provides an overview of recent developments in the burgeoning retail sector, including the growth of malls, increasing market segmentation, improvements in market research and the battle of the brands. In-depth features also cover the staying power of Dubai’s traditional souks, the local gold and jewellery trade, the rise of the mega-mall, and the influence of market liberalisation on the retail sector.
This chapter takes a look back at the early history of the emirate, including its rise to prominence as a regional trade hub, Sheikh Rashid’s big bets on dredging the creek and building Port Rashid, and the establishment of the Jebel Ali Free Zone in 1980.
THE BUSINESS GUIDE: ACCOUNTANCY
Members of the PricewaterhouseCoopers team provide a comprehensive overview of taxation in Dubai, examining everything from corporate income tax and stamp duty to free zones and the UAE’s tax treaty network. In a viewpoint, Michael J. Stevenson, Middle East Senior Partner at PricewaterhouseCoopers, provides his take on Dubai’s unique formula for success.
THE BUSINESS GUIDE: LEGAL
The legal team at Al Tamimi & Company examine the legal environment in Dubai in a series of special in-depth features on corporate law, free zones, labour law and foreign investment, covering everything the foreign investor needs to know about setting up shop in the emirate. In a viewpoint, Essam al-Tamimi, Managing Partner at Al Tamimi & Company, provides an insider’s perspective on the Dubai International Financial Exchange (DIFX).
In-depth features take a closer look at Dubai’s history and heritage, as well as the charming five-star desert retreats of Bab al-Shams and the al-Maha Desert Resort. Also included are listings of the emirate’s best hotels and resorts, as well as the finest dining establishments in town. The chapter concludes with a profile on the Dubai World Cup, one of the world’s most prestigious horse races.
All the numbers you’ll need to know, including chambers of commerce, embassies and consulates, airlines, car hire, hospitals and taxis, plus web sites and tips on enjoying your stay in Dubai.
Order print report
Buy individual chapters online as a PDF download