Thursday, December 01, 2011
Here’s to the next 40 years of UAE success
It’s difficult to do justice to forty years of brilliance, as we mark the UAE’s 40th anniversary.
There is a lot to celebrate. Who in the world hasn’t heard of the UAE – in particular Dubai and Abu Dhabi? Companies like Emaar, Emirates Airline and Mubadala have become global giants. Incredible projects such as The Palm Jumeirah and the Burj Khalifa are as well known on the streets of New York and London as anywhere in the UAE.
Visionaries such as Sheikh Mohammed Bin Rashid Al Maktoum, the Ruler of Dubai, and Sheikh Khalifa bin Zayed Al Nahyan, are amongst the most highly regarded leaders anywhere in the world today, while the UAE’s first president Sheikh Zayed bin Sultan Al Nayhan has long cemented his place in history. Not bad for 40 years.
And so huge has the impact of UAE investments been abroad, we have dedicated a fair chunk of the magazine to just this, in our “crown jewels” section. Abu Dhabi’s takeover of Manchester City may have grabbed all the headlines, but it is the other less glamorous work of the Abu Dhabi Investment Authority that really stands out. Multiple stakes in multiple companies, giving the UAE a huge foothold on the global business stage. Even a company like DP World, that not enough is written about these days, has quietly grown into a magnificent empire with 49 ports around the world.
But what do the next forty years hold? Fast forward to 2051. The chances are that, such is the pace of technological development, our 80th anniversary issue won’t exist in a magazine format. The iPad, on which some of you may be reading this, will be a laughable ancient device that school kids read about in history books, and the Emirates A380 will be that very basic, strange-looking aeroplane our grandparents used to travel on (and it took them an incredible seven hours just to get to London).
But the journey from 2011 to 2051 won’t be easy. The global economy is at a crossroads, with few experts believing that the West isn’t heading into a double dip recession. How the UAE copes with another recession made in a different part of the world, and the fallout from the eurozone crisis, will very much determine its future. The country’s diversification into non-oil sectors has been a master stroke, and current indications are that 2012 will be another year of modest growth. Maybe not 3.7%, maybe not even 3%. But given the scale of mounting problems elsewhere, maintaining positive growth of anything over 2% will be a commendable performance – and enough of a platform to build upon for the rest of the decade.
However, there are two areas where the biggest challenges lie for the UAE. The first is the development of the Northern Emirates. Too much is talked about, and relied upon, Abu Dhabi and Dubai. But the signs are encouraging: a maritime free zone in Ras Al Khaimah (and 10,000 new hotel rooms by 2016) and a UAE domestic airline based out of Fujairah are a good start. But far more than the current $1.6bn investment into the development of the Northern Emirates is needed.
And the biggest challenge? That, I believe, is overcoming the unemployment timebomb. Currently just eight percent of Emiratis are employed in the private sector, while the UAE Labour Minister Saqr Ghobash said during a recent G20 meeting that the country’s public sector is now saturated. And that means the UAE must create (largely through the private sector) another 20,000 jobs each year for the next decade, merely to satisfy the youth employment market.
Which leads to two big hurdles: Emiratis must embrace the private sector is far greater numbers, while the private sector must take on the responsibility of job creation. Neither will be easy – which is why growth of at least two percent next year is vital. But when you consider what’s been achieved in the past forty years, maybe it will be a piece of cake.