Yes, Dubai has debt…but who doesn’t?
Nobody in the world succeeds or becomes a pioneer unless he makes mistakes. it's a price that we sometimes have to pay, says Habtoor.
November 29, 2012 8:58 by Reuters
When Dubai’s ruler unveiled plans last week to build a complex housing 100 hotels and the world’s biggest shopping mall, the scale of his ambitions recalled the emirate’s boom half a decade ago. So did his choice of executives to lead the project.
Mohammed Alabbar, builder of the world’s tallest tower, signed documents related to the project in his role as chairman of Emaar Properties, Dubai’s top real estate firm.
Sitting next to him was Mohammed al-Gergawi, chairman of Dubai Holding, a conglomerate owned by the ruler. Gergawi played a central role in setting up districts housing Dubai’s financial, media and information technologyindustries.
The businesses of both men suffered when Dubai’s corporate debt crisis erupted in 2009, and they adopted lower profiles over the next three years as the government relied on a different set of managers to handle the financial disaster.
But last week’s announcement of the multi-billion dollar mall project, which is to include a park larger than London’s Hyde Park and an entertainment centre developed with Hollywood’s Universal Studios, suggests Alabbar, Gergawi and other high-flying managers who built Dubai are again shaping the agenda.
“Emaar and Dubai Holding are leading the charge. That signals a rehabilitation of two of the Dubai ruler’s three former lieutenants who were discredited in the crash,” said Jim Krane, author of the book “City of Gold: Dubai and the Dream of Capitalism”.
“The return to the fold of these two men, who were iced out during the long recession, could portend a shift away from the conservative minds called in in 2009 to stabilise the city.”
Alabbar and Gergawi belong to a group of executives, roughly a dozen men, chosen by Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum about a decade ago to develop the emirate.
Most were born in the United Arab Emirates; many were educated at top universities in the United States orEurope. Some are members of old merchant families which have traded around the Gulf for decades, but others are first-generation entrants to the world of big business.
Placed in charge of Dubai’s strategic state-linked companies in areas including real estate, ports and banking, they favoured projects which burnished Dubai’s reputation as an international business and travel hub: the world’s tallest skyscraper, an archipelago of man-made islands in the shape of a palm, an indoor ski slope at a shopping mall.
“I’m frustrated with bureaucracy, I’m frustrated with negative minds and negative thinking because I’m a go-getter; I’m going places all my life,” Abbar, in his mid-50s, told Arabian Business magazine in a rare interview last year.
He compared Emaar to a phoenix and said the company was on the brink of a resurgence from the crisis.
Gergawi, 49, got his big break when he launched an office district on the outskirts of Dubai, persuading a foreign bank to lend him $55 million, according to a person close to him. That project brought him closer to Sheikh Mohammed.
Until the global credit crisis burst Dubai’s property bubble in 2008, Alabbar, Gergawi and their fellow executives succeeded handsomely; the territory with a population of about 2 million built one of the world’s busiest airports, the biggest seaport in the Middle East, and the Gulf’s main financial centre.
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