Passport to purchase, Part I
Even as the financial crisis takes its toll, it looks like the Gulf states maybe looking to reclaim their place at the center of world trade, Part I.
January 25, 2009 10:25 by Ian Munroe
Believe it or not, Dubai’s economy is still kicking. While Dubai’s frenetic real estate and banking industries are wrestling with turmoil, there are, in fact, sectors of the local economy that seem to be holding up respectably well. Particularly those relating to crossborder trade, such as transportation and logistics.
Take Jebel Ali port in Dubai, the UAE ‘s largest. In early 2008, it projected that container traffic would balloon by an impressive 40 percent in the year, from 9.9 million to 14 million TEUs (twenty-foot equivalent units).
Even though international trade has started to coagulate, such impressive cargo – traffic rates are still being reported across the emirates.
“November was just about a record month for us, in terms of volumes,” says Keith Nuttall, commercial manager at Gulftainer, a company that runs two UAE container ports. “Of course there’s going to be some slowdown here – I think it would be foolish for anybody to say it’s not going to be affected,” he says, adding that business will likely decrease in the first half of this year.
“But,” he continues, “the fundamental economy in this part of the world is a trading economy. Dubai, Sharjah, the UAE generally is a trading entrepot [or gateway] for the whole region. This has been the case for some years and it’s not going to change, I don’t think. It’s not just going to fall on its face.”
Indeed, international commerce has been an economic mainstay in this part of the world for ages. When the Romans became mass consumers of Asian spices, gems and pearls, those goods came to Rome via the Gulf. When Muslim rulers branched out as far as modern-day Spain and Pakistan in the 7th century, merchants from this region brought them luxuries from India and China. And when Europe grew into a market for silk and spices from the Far East, Gulf traders set sail to fill that demand too.
These days, trade has become a crucial way of pushing the Gulf region’s economy into areas other than petroleum extraction. The big challenge ahead is how best to deal with a stricken global e c o n o m y. At worst, 2009 will be a stark test of whether the GCC’s re-emergent trading sector is fundamentally sound.
At best, a slow year could coax GCC states into finding new ways of becoming even more attractive places to shuttle cargo through.
First seen in Trends magazine.