Is Abu Dhabi on the right track or missing a little action?
While a cautious move is commendable, businessman Habtoor urges Abu Dhabi not to lose its economic momentum. Precious de Leon thinks maybe all the capital needs is a little push.
November 27, 2011 3:41 by Precious de Leon
“To review things is good — but it shouldn’t take so long.” These are the words of Khalaf Al Habtoor, chairman of Habtoor Group, in a Gulf News article where he urges Abu Dhabi to push ahead with its infrastructure development so as not to lose economic momentum.
Habtoor Group has been pretty much in the consumer psyche of any UAE resident because it’s pretty much into everything from retail to hotels, construction and real estate and even car sales and leasing. The company is one of the UAE’s pioneering conglomerates (having launched in 1970) as well as one of its biggest.
The chairman is alluding to the considerable slowdown the capital has taken with some of its property developments and other projects under its 2030 Vision strategy. One of the most recent moves is the postponement of construction for the museums on Saadiyat Island.
It’s undeniably a good thing to be considerate and cautious about large scale moves. And in fact, as Al Habtoor said, the review has been “long overdue”, and mostly done after news of job cuts in government-connected companies like Abu Dhabi’s Masdar and Shuaa Capital in Dubai—and of course there are also the unreported cases in the private sector across the country that are going through a second or third round of redundancies.
It’s good to be measured in decision-making. So is Abu Dhabi taking too long a time? Al Habtoor says “this is the wrong time to delay,” adding that “Normal practice when there is pressure is that the government needs to spend money for recovery – this is the right time to continue and go ahead with the infrastructure.
The chairman himself expects a 15 percent growth for his company across the board, indicating that business is picking up.
Given the atmosphere of uncertainty in the Middle East and with the Arab Spring just next door, Abu Dhabi could be given a bit more leeway for being slower with its decision-making. It has more at stake, being the capital and supporting and sustaining other emirates as well as supporting companies even those outside of the capital. By the same token, however, its wider reach is only possible because of its incredible amount of cash reserves. Sovereign Wealth Funds Abu Dhabi Investment Authority (ADIA) and the International Petroleum Investment Company (IPIC), for example, collectively have $675 billion in assets, according to SWF Institute.
While appreciate that Abu Dhabi wants to review things, with this much money in their back pocket, what’s keeping the capital from going full steam ahead with some of the projects?
TAKING THE BULL BY THE HORNS
Creating ambitious projects on paper is great. But the second bit of rolling up our sleeves and getting down to business is trickier than what most might expect. And perhaps this is where companies in Abu Dhabi need the extra push?
“Strategic plans have been drafted by many of the countries and cities in the region, all looking forward to the next decade and beyond. What is key now is for organisations to be prepared and equipped to begin the implementation of these visionary programmes,” said management consultant and author Stephen Bungay.
So are the delays just veiled forms of paralysis on the part of the involved companies in their slowed quest for implementation? From the country’s recent business history, a conscious slowing down has never been because of any fear of risk. It has always been because of safeguarding against challenges that are already at their doorstep, instead of perceived threats.
But what about you Kippers, is a slow down just what the capital needs or…(CONTINUED TO NEXT PAGE)
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