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SHARING THE VISION
I visited Dubai briefly over five
years ago, but when I returned last month, I saw something extraordinary.
It wasn’t just the quantity of construction, or the fact that
the city’s skyline now resembles Hong Kong’s, it was
the quality of the building, and what it suggested about Dubai’s
particular vision and methodology for creating a unique economy.
Despite an inhospitable climate and almost total lack of resources
(human and otherwise since Dubai has no oil or gas), the city’s
creators capitalized on an age-old trading tradition and geographical
location, to turn a tract of coastal desert into a global service
center.
It’s impressive: 50- and 60-storey buildings, even taller
glass towers, all state-of-the-art, high-tech constructions maintained
to the highest of standards. You see the latest cars, excellent
restaurants, women moving freely in a comfortable, relaxed atmosphere.
A range of hotels, including many catering exclusively to families,
with amazing recreational facilities, have helped Dubai –
a small, largely new city – attract half as many visitors
as Egypt per year.
Aside from the transient population, one can’t help asking
who will occupy all these towers and residential communities, some
of which are being built on man-made islands off the Dubai coast.
The answer is foreigners. With locals comprising the minority of
Dubai’s projected population, it will become a global village
in the truest sense of the word. But the locals benefit from a strong,
modern economy, with salaries rising significantly, and the surplus
wealth moving outwards.
The towers are already filling with firms involved in media, capital
markets, banking and finance, and the legal, consulting, accounting
and other professions that support them. The service sector is the
lifeline of the global economy, and Dubai has built itself a powerful
stake. The quality of its construction, including airports, ports
and infrastructure, reflects a commitment to the future, and the
international business community is responding.
Firms such as Showtime (whose London office houses all the Viacom
groups including MTV Europe) have moved their regional activities
to Media City, Dubai, where most international news agencies and
networks have headquarters. Every big investment bank has a Dubai
office, as do the “magic circle” London legal firms,
and those of Wall St. too. Their presence is testimony to Dubai’s
success in creating an attractive environment in which to live and
work. Owning a home or apartment there grants automatic residency;
indeed, property, cars and goods are easy to buy and the schools
are excellent. People are coming not just for business, but to live
long term with their families. Quality of life apparently attracts
foreign investment as much, or more, than tax holidays and other
incentives.
Had it not been for the International Financial Law Review’s
Middle East Awards ceremony that I attended as a recipient, I would
not have had the opportunity to see the city I’d heard so
much about. Despite billion-dollar developments there and in other
Arab states, it was an Egyptian-UK legal team that won the “equity
capital markets of the year” award because of our work on
the Telecom Egypt (TE) IPO, the biggest in the history of Egypt’s
stock market and a landmark offering in its own right. Additionally,
Helmy, Hamza and Partners won “the national law firm of the
year,” not just because of the TE IPO, but also because of
the LNG and other significant Egyptian projects. These transactions
are strong indicators of Egypt’s potential in an up-and-coming
regional market.
Given the global environment, Dubai investors feel comfortable in
Egypt. They know they’ve maximized development at home –
even overdeveloped. They also see what’s happened here recently:
fiscal, monetary, trade policy and constitutional reform, alongside
a more dynamic cabinet and political stability. No wonder the Emirates-based
Itisalat paid LE 17 billion for the third mobile license in Egypt.
Abraj, a Dubai-based firm with Deutsches Bank as shareholders, has
just subscribed to a capital increase in EFG-Hermes of a half-billion
US dollars, representing 25 percent of EFG’s capital. Another
holding company (majority owned by the Emirates) is currently being
established with approximately a billion US dollars in proposed
investments in the transport sector.
Likewise, Emaar Properties, Dubai Holding, Sama Dubai and other
major development and real estate companies, will invest billions
of dollars over the next few years, having won competitive bids
for prime Egyptian real estate. Egypt holds significant allure for
Emirates investors who see our opportunities. Indeed, Egypt could
be the magnet for petrodollars region-wide.
Dubai’s economic growth in a very short time is remarkable
– and inspiring. I am not suggesting that we follow Dubai’s
economic model, but their methodology is admirable proof of the
power of visualization, decision-making, implementation, commitment
and prompt action. Starting with very little, Dubai built a strong
service-based economy drawing strength from its image as a place
where projects are conceived, efficiently realized and well managed.
If an economy can be built on the basis of so few resources, Egypt,
a rich country by comparison, is capable of a great deal more.
TAHER HELMY
President, AmCham Egypt
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