Two trips, one new program
Dubai, September 17-19
Dubai and Abu Dhabi are two of the seven emirates that make up the United Arab Emirates on the Arabian Peninsula and are polar opposites when it comes to the transformation of their economies.
Early evening arrival to Dubai International Airport (probably my 20th to the city). Like every visit it's an entirely new experience. A drive down Sheikh Zayed Road, the main artery into Dubai, unveils yet another fresh set of buildings, a new development, and 24-hour construction. This is a place in a hurry and has been for the past decade.
The spirit is evident, the prize for some is enormous. This is a window in time to expand, make new contacts and create more wealth. A visit to the Jumeirah Emirates Towers Hotel captures the scene. It is difficult to get a seat for an espresso. Local bankers or private equity chiefs meet expatriates who want to take part in the energy-driven boom. Oil at $80 dollars a barrel certainly supports their cause.
We are the subject of six press interviews, plus two lunches with two editors, over two full days on the ground in Dubai to unveil plans for our new program, CNN Marketplace Middle East. The interviews shared common themes: Why a program like this now? And why out of London? How are these investments from the Middle East being perceived abroad?
The answer, to sum it all up, is pretty simple and you can point to the numbers to explain. Twenty deals totalling $44bn dollars in the past year. Government investment funds from the region are sitting on, by some estimates, $2.5 trillion (yes, that is with a 'T') of assets and they are ready to put them to use. Middle East investors are moving fast, with a purpose and with a global footprint.
While Dubai seems like a city on steroids, Abu Dhabi, the capital of the UAE, exudes a sense of calm, which comes perhaps from knowing that you are sitting on top of about one tenth of the world's oil and natural gas reserves.
The Emirates Palace Hotel, part conference centre, part meeting point and where the government of Abu Dhabi holds its meetings, press conferences and architectural models for the future, is a $2bn-dollar structure. From the reception desk to your room, it's one kilometre. The hotel sits at the far end of the cornice and it's pretty obvious that this is the first of many, many structures to emerge over the next decade.
Abu Dhabi takes pride on being the quiet capital, but like many of the cities that make up this region, they are thinking 10, 15, 20 years out. I have been going to the Middle East on assignment for the past 20 years, but in the last three years there is a sense of urgency coming from a new generation of business and government leaders.
Take Khaldoon Khalifa Al Mubarak who wears two hats: one as chairman of the Executive Affairs Authority of Abu Dhabi and the other as CEO of Mubadala Development Company. He is 32, educated at Tufts University in Boston and is building a strategic investment fund on its way to $100 billion. Investments include the construction of the largest aluminium smelter in the world, a 370-kilometre gas pipeline from Qatar to Abu Dhabi and securing the F1 race for his city in the autumn of 2009.
On my flight from London to Abu Dhabi he was connecting after an overnight journey from Washington where he signed a $1.35 billion deal for 7.5 percent of the Carlyle Group, a leading private equity firm in the U.S. The firm has within its ranks George Bush Sr., James Baker III and former British prime minister John Major.
Money does capture influence and as the cliché goes, it does make the world go around. Our role at CNN Marketplace Middle East is to look at the region differently; question the merits of these investments; and analyze what they mean for the region and well beyond.
If one were to put the Middle East at the centre of the globe, we would all see the world a bit differently. Investments are going east to China and Southeast Asia, west to the U.S. and Europe and perhaps for the first time, in a sizable fashion, staying closer to home.
Leaders in the region, while trying to build their 'castles in the sand', know they need to create sustainable economies and jobs. And perhaps that is the irony: while generating record wealth from oil and gas, there is also pressure to move. Unemployment throughout the region remains above 10 percent; double that amongst its youth. Strategic investments, whether at home or abroad, need to have a lasting impact.
ABOUT THIS BLOGJohn Defterios’ blog accompanies the weekly business program, Marketplace Middle East (MME) that is dedicated to the latest financial news from the Middle East. As MME anchor, John Defterios talks to the people in the know, finding out their opinions on the big business moves in the region, he provides his views via this weekly blog. We hope you will join the discussion around the issues raised.
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