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Friday, January 06, 2006

Gulf In Brief: Sheikhs & Malls

Dear All,
 
Some of you have asked about my December Gulf trip.  I have lots to say about that trip but have little time to do a full-fledge writeup.  Will take quite a while to do that… in the meantime, I have noted in point form some main observations.  Here they are:
 
Thanks for the budget carrier Air Arabia, I was able to hop around the Gulf States very quickly.  General impressions:
 
Kuwait: A rich country well past its time.  Dirty streets, messy old town with little investment and paintwork.  Obviously people have lived in fear of another invasion and Iraqi unrest and thus unwilling to invest.  Stabilising Iraq may spice things up - but can it match the progress already made by Dubai?  It's also a fairly Islamic place compared to the UAE - with more restrictions on liquor and entertainment.  Let's face it - you can't do a lot of offshore business in that sort of environment.
 
Bahrain: Former financial centre going downhill.  Lack of domestic political stability (Sunni king ruling over Shiite majority) and air of stagnancy.  The 1960s and 1970s old office buildings remind me of Gibraltar and certain fading parts of Birmingham.  A bit of olde Englishness in the place but not where people go for the future.  Like Kuwait, taxi's don't use meters and tourists get charged more.  That to me is a sign of lack of eonomic "software".  Don't think the Bahrain International Financial Centre will be a success.  More hardware.  The sleaze and alcohol will not save it.  Neither does the declaration that the Emir becomes the King a few years ago do any good.  BTW, I love the National Museum.  Good stuff about Dilmun civilisation.
 
Qatar: New boom town with lots of cash. Huge new buildings going up.  Taxi's use meters - sign of adoption of best practices.  However, it's a boring place and all the expats want to go to Dubai or Bahrain.  Old fashion Wahabism makes this a dull place.  There's probably going to be some deals done there given all the wealth and natural gas, but it's more like boring Frankfurt than the City of London.
 
Dubai: Wow Wow Wow.  Boom town.  Enlightened rulers and whole new development everywhere.  Amazing how cosmopolitan and bustling it is.  How a poverty stricken place is transformed.  Yes there is oil but it is also a major trading centre and new tourist hub.  The oil wealth is being put to good use.  But local population is likely to be less than 5% (official 20% though) - is this the appropriate model for small countries elsewhere?  All the Internet City, Media City, Sports City, Knowledge Village, Palms x3, Burj al Arab and the like - will these make money?  But at least it's spare change that may well bring some return - or even if they are wasted, they are spare cash better spent than simply building palaces like many other Arab rulers.  What Dubai will need to manage will be:
- how to stay ahead of its competitors like Abu Dhabi, Sharjah, Qatar and Bahrain
- how to manage federal relations within UAE - Abu Dhabi is probably jealous and the federal govt may curb Dubai's autonomy if relations are not managed properly.
Oh yes, taxis run on meters...
 
Sharjah: Looks like Dubai's little copycat brother, but results are impressive too.  Calls itself the Arab Capital of Culture.  But beware - make sure you don't overspend in building white elephants.
 
Ras al Khaimah - read it wants its own airlines too... late copycats don't usually win, especially if they don't have oil.
 
Oman: Stable, taxis use meters.  Clean streets and strong sense of national identity and history.  Not over reliant on foreigners (unlike UAE).  Potential problem is succession of the Sultan, who is single.  Tourism not the mass tacky type.  Some adventure tour groups.  I like the non-commercial atmosphere and deserts and mountains.
 
OK, that's all for the time being.  Next Monday, I'm heading to China for business.  A week in minus ten degree temperature.  Oh my.
 
 
Cheers,
 
Wee Cheng
 
 

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