Strong momentum in UAE’s recovery, says Institute of International Finance
UAE and Gulf neighbors will lead region in economic recovery, says George Abed.
May 20, 2010 10:21 by Rasha Reslan
“Reports of my death are greatly exaggerated,” said Mark Twain, a famous quote that could also be applied to Dubai.
Everybody was quick to write the epitaph of this glitzy emirate. One year later, Dubai seems to be getting back on its feet.
Hotels are reporting high occupancy rates, and financial experts are revising their figures. Cranes are going up on the skylines once again.
“The sentiment is not depressing anymore. Yes, we all know not everything is all right, but what we also know is that there is light at the end of the tunnel, and we can see it approaching,” said John Wilkinson, who works as a corporate manager at a Dubai firm.
He says his family of one wife and two children is very much with him in the UAE.
“We have had pay cuts and some layoffs, as well. The perception that everybody would just leave Dubai for good has not been borne out by facts of the ground. Some longtime expatriates have dropped off their family members in their home countries, and they themselves have come back to see how things work out,” he added.
Things seem to be working out well. “Companies have started reporting profits. Only the other day, Emirates Airlines reported a huge profit. The newspapers are full of corporate advertisements, and these reports about Dubai Metro in our newspapers have added to the emerging feel-good factor,” said Wilkinson, a British national who has been in Dubai since 1987.
“To be honest, some British friends of mine who went back to Britain have come back with what to me are horror stories. I say with full guarantee things are fine in Dubai, and those who have spoken ill about this place will eventually eat crow.”
Wilkinson is not alone. Afaqullah Khan, an Afghan national who works at the Madinat Jumeirah five-star holiday resort, says this is the best place to work in and make money.
“I have no complaints. In fact, this financial turmoil was a blessing in disguise. Prices had gone up phenomenally. It was becoming difficult to save money a year or so ago. Now wherever you go they have fantastic discounts. From a consumer’s point of view this was great,” he said
Khan claimed the occupancy at the posh resorts, which are located very close to the seven-star Burj Dubai Hotel, stands at 92 percent today.
“Remember this is the off season. When winter sets in, things will look up further,” he added.
To the visitor, Dubai looks straight out of Europe. Its leaders had a vision, and they were able to translate their vision into reality.
“Some of their plans have not proved to be prudent as a result of some of their key investors defaulting on their debt, resulting in all these problems,” says Mariyana Lubotovich, a journalist from the Czech Republic who is in town to cover an energy conference.
“I keep visiting this place often. There are a number of reasons why Dubai will always remain a favorite of people in Europe. First and foremost is the easy visa procedure. That is a luxury not afforded by any other Middle Eastern country. Of course, the other famous attraction is the weather.”
She says she adores the place so much that she proposed to her future husband in the city, adding financial recovery in the city is imminent.
Her latter claim was supported by a report in English-language daily Gulf News on Tuesday.
The newspaper quotes George Abed, a senior official at the Institute of International Finance, as saying that the UAE’s economic recovery has started gaining momentum and that its real gross domestic product (GDP) is expected to grow 2 percent this year and 2.7 percent in 2011.
“The UAE and its Gulf neighbors will lead the Middle East in economic recovery, and the growth in the Gulf region will be the second best in emerging markets after Asia,” says Abed.
In the report, Abed agrees that the ability of Dubai to continue to attract foreign capital will suffer a temporary setback but says it could recover soon if the restructuring of its government-related entities is satisfactory to all stakeholders.
Dubai’s GDP represents 33 percent of the Emirate’s GDP and 55 percent of the UAE’s non-hydrocarbon GDP.