DUBAI, United Arab Emirates (CNN) -- Dubai has grown rapidly from a small trading hub into a thriving city, and one of the key players in this transformation is a company called Tatweer -- which in Arabic means "to develop." Executive Chairman, Saeed al Muntafiq has been there from the start and played a huge part in the expansion and diversification of the tiny Emirate.
Inflation is not the biggest threat to growth in Dubai, says Saeed al Muntafiq
Al Muntafiq talks to MME's John Defterios about the changes he has witnessed, and what he sees for the Emirate's future. Defterios kicks off by asking Al Muntafiq if he thinks Dubai's rapid growth has created an economic bubble and whether inflation is the biggest threat to growth.
(SM): I wouldn't say it's the biggest threat. I would say there are many challenges that we face and have faced in the past, and will continue to face. And one of which is inflation, and we have programs to sustain it, and insure that it contributes to development. The other is the attraction of talent. Ensuring that we understand how the world works, and how we can integrate Dubai in this system is another challenge.
(JD): Are you interested in moderating growth here because of the potential bubble?
(SM): I've personally heard of these reports from many, many organizations over the last five to seven years. In order to understand them, I think one needs to break down the statement and this asset real estate bubble that is referred to.
We need to look at the industry. And the industry for us is broken down into three to four different folds, ranging from residential, all the way to hotels, and hospitality assets.
Now, if these were standing on their own, I think there would be merit to the hypothesis. But they are not, because in Dubai they are all clustered around strategies. So, personally speaking, I don't believe there is a fear of that bubble, because it's managed around certain variables, certain clusters, and we keep our eyes on it.
(JD): What do you accept as a reasonable inflation rate with growth running at 10 or 11 percent for the last six years? What is acceptable from the Tatweer perspective?
(SM): Anything between four and five percent is acceptable.
(JD): And you're running at nine right now. So do you need to bring it down?
(SM): Well, it depends which figures you look at, and which industries you examine. And our industries, as I said, are predominately driven by the clusters that we are mandated to develop and grow, and those range from hospitality, all the way to entertainment and leisure. I think, as far as inflation is concerned, we need to go skin deep, because there is a whole basket of products that contribute to that item. It is not just real estate - the price of milk is one item in a basket that contributes to the information number.
(JD): There are strains throughout the region right now related to food security. Does that concern you?
(SM): These are challenges and fears we have faced, and have overcome over the last 50 years. We've been doing this for the last 20 to 22 years. I'm not saying we have answers for everything. That would not be prudent. I'm saying we are a proactive government. We are a government that recognizes its faults as in when they happen. But we are not egotistic and unable to say 'okay, let's find a solution.'
(JD): You are one of the key players here, and you have a number for projects that you've noted under management right now. I understand you threw away a lot of the feasibility studies that were handed to you. You didn't think they were grand enough. Is that true? That you just said look - this is just way to conservative for my tastes right now?
(SM): That wasn't me. That was my boss I'm afraid.
(JD): You're referring to Sheikh Mohammed?
(SM): Yes. His Highness. At least with two of the clusters that we drive, which are healthcare and entertainment, specifically in Dubailand. Rest assured all have feasibility studies. My job as a manager is to ensure that all of those yield an acceptable return to the stakeholder. E-mail to a friend
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