Life after oil
Gulf countries are struggling with how to gird their economies for the day when their fossil fuels run out.
January 27, 2010 10:41 by Emily Meredith
The lack of transparency in the U.A.E. was evident in November’s announcement that Dubai World would ask to delay debt repayment, particularly because information was so scant. “That crisis has damaged sentiment, at least with regard to Dubai. In the wider region, we had the Gosaibis, the Saad story. There’s a need for more transparency and better regulation in the region but in the world as well,” Woertz said.
Dubai also has a long history of economic diversification. After the collapse of the pearl diving industry, the emirate continued to capitalize on its location to establish itself as a trade center. In the last decade, the government has pushed aggressively to diversify its economy.
“The reason Dubai developed so quickly was the government was at the forefront of economic development,” the head of consultancy Nabil Al Yousuf and Associates and former head of Dubai School of Government, Nabil Al Yousuf, said.
“It took the first set of risks and that encouraged the other sectors. Then we had the Dubai International Financial Center and the Internet City and the Media City. All of them were basically a piece of desert where the government decided this is where we’re going to grow the sector and we are going to take the first risks involved in economic development.”
As its hydrocarbon-rich neighbors enter their own periods of aggressive diversification, Al Yousuf said, they need to be sure the private sector has enough freedom to operate.
“What I guess concerns us is the closed measures of the economy and the measures of protectionism and having basically the government only running the economy through three or four state-owned enterprises – one for oil, one for airlines – and not allowing the private sector to flourish.
- Trends magazine