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Road to Recovery, Part II
Come on – it wasn’t all bad. The crash of 2009 put the Gulf economies on a more solid footing, reports Trends magazine. Part II.
November 23, 2009 12:15 by Scott MacMillan
“The growth was driven by the growth in oil prices, and not real changes in the structure of the economy or improvements in productivity. This quality of growth is not sustainable in the long run,” Saif notes.
“There must be a new effort to revisit these economic policies, going, of course, in the direction of increasing the level of economic productivity and developing the service sector, which can provide more jobs to the national population [local GCC citizens],” he says.
Critics of this view will surely point to the gains made during the boom years: The tallest building in the world, for instance, or in the case of Qatar, an economic model that the International Monetary Fund predicts will soon yield the world’s highest GDP per capita.
The UAE has also made huge leaps in transport and logistics infrastructure, making Dubai’s airport the world’s sixth-busiest in terms of international passenger traffic (it didn’t even rank in the top 30 in 2000), and the fourth-busiest in terms of cargo.
“The UAE is returning to its roots, as Dubai has always been a cosmopolitan trading hub,” writes Philippe Dauba-Pantanacce, senior economist for the Middle East and North Africa at Standard Chartered in Dubai, in a recent report on the UAE.
“It is now transforming itself into a logistics hub, too.” He adds that the UAE is right to be pursuing aggressive air and seaport development, given that apart from oil, its geographic location is its most important asset.
One third of the world’s population lives within four hours by plane.
Perhaps, however, it’s worth paying attention to those, like Carnegie’s Saif, who pour cold water on the idea that the boom years have set the Gulf on the right course.