Sunday, September 27, 2015

Tales from the Sands of Dubai

Days after the formation of the United Arab Emirates in 1971, Port Rashid in Dubai became operational. Named after the ruling Monarch of Dubai Sheikh Rashid bin Saeed Al Maktoum, the port was one of the largest in the Middle East attracting sailors and traders from India, China and Iran. 2 years down the line, Sheikh Rashid wanted to build another port at Jebel Ali, 35 kilo meters away from the town of Dubai!
It was shocking for everyone who came to know of it because there was no water in Jebel Ali. It was a dry barren land. Sheikh Mohammed, the current ruler of Dubai was the crown prince then. A merchant delegation met him and requested him to convince his father against constructing another port at Jebel Ali when the present one was still finding its feet. The British advised against it. With sound advice, Sheikh Mohammed decided to talk to his father. He knew the only place where he could meet him was at the construction site early in the morning. 

He drove after fajr, to Jebel Ali where he found his father standing against the desert winds supervising the construction. It was a humongous project, one that involved dredging of the sand to make way for the sea. He conveyed the concerns of the merchants to his father, to which he received no response. After a brief pause the Sheikh said, “If you cannot bring the port to the sea, let’s bring the sea to the port”. On the ride back, Sheikh Rashid told his son- "If you do not do this now, you cannot afford to do this later when you'd need it! No engineering or consulting firm would have dared to do a feasibility study of the port at Jebel Ali when it was planned to be built in the late 70s, writes Sheikh Mohammed the present ruler of Dubai in his memoir “My Vision- Challenges in the Race of Excellence”, a book I haven’t been able to put down since my return from Dubai 2 days ago. Today, Jebel Ali port is the largest man-made port in the world, an architectural wonder handling more than half of Dubai’s exports. It has 35 berths and can accommodate the largest ships known to mankind. 

A large ship docked at the Jebel Ali Port
It is this audacity that is evident in everything that Dubai has accomplished in the last 4 decades. It has raced past the human growth story setting the trend in everything that it has done. 

For everybody who visits Dubai, it gives a sense of optimism, a hope that everything that can be dreamed, can be achieved. The way a barren land has been transformed by the rulers of Dubai as one of the best cities in the world to live in, inspires the doer in you. It has created the largest number of jobs, cumulatively in the last 3 decades. Even when the world economy experienced slumbers and downgrades Dubai never stopped dreaming. 

In a meeting with an executive of the Dubai International Financial Centre, he explained that even though the foundation of the centre was laid in 2002, the real growth happened between 2007-2012, right when the world economy experienced a horrific recession. He said if Dubai hadn't pulled up it's socks and assured investors to put in their money, Singapore would have done it, Hong Kong, London or any other Financial Centre would have done it. The mantra is to never miss an opportunity! 

In the very nature of Dubai, it is ingrained, it never misses an opportunity to rise. 

Shiekh Rashid realised that for Dubai to grow with negligible oil revenues, unlike the neighbouring emirate of Abu Dhabi, he has to get foreign investments into the country. The UAE was a very traditional economy which was administered mostly through the Sharia law. Modern Dubai’s seeds were sown with creation of Free Trade Zones which mirrored western economies in their functioning.  What Sheikh Rashid started, his son Sheikh Mohammed, the current ruler of Dubai continued with a feverish pace. Dubai is known for its free zones where foreign nationals can set up their businesses with lightning speeds and have the flexibility to repatriate all earnings to their home countries with 0% taxation involved. Dubai gains by getting the confidence of wealthy businessmen and from the rents  businesses pay. The government understands that not all wealth will be sent back. People have to spend locally for their needs thus adding to the country’s GDP. Dubai International Financial Centre (DIFC), Dubai Multi Commodities Centre (DMCC), Dubai Media City, Dubai Internet City, Dubai Healthcare City are all free zones set up by the Government of Dubai. I being a part of the IIFT delegation was fortunate enough to visit most of the free zones and understand their working during. It is an extraordinary example of how governments can rise from their own shackles and create prosperity for their people. How governments can utilise their geostrategic location and build wealth. 2/3rd of the world's population lives in a 6 hour distance away from Dubai. The Government of Dubai has built on that advantage and has facilitated Dubai to become a hub for multinationals like FEDEx, Citibank, JW Mariott, Maersk to name a few. Our team was extremely lucky to visit the Middle East hub of FEDEx in the Dubai International Airport, Terminal 2.  

Team IIFT at the FEDEx hub in Dubai International Airport
On my first visit to UAE, I was fortunate enough to represent IIFT, in hosting its 3rd International Trade Conclave. It was inaugurated by the Ambassador of India to UAE H.E. Mr. T.P Seetharam on 19th September 2015. It is difficult to come across a brutally honest, tongue in cheek Diplomat who can speak his mind undeterred. He asked- "Why has the India- UAE trade come down from USD 75b to USD 60b in 1 year?" and later went on to reply- "Don't ask me, ask the Finance Minister. Ask him to sign a piece of paper stating the duty on Gold will be removed." Perhaps, the government could listen to the advice and ease the duty on gold by making gold an asset which can be utilized for creating more wealth and not just for its ornamental value.

Hosted the 3rd International Trade Conclave of IIFT
In 1962, the present Dubai International Airport was commissioned by Sheikh Rashid against the advice of the western governments, that it would be a loss maker. Today it is the busiest airport in the world in terms of International passenger traffic, has the biggest terminal in the world (T-3) and contributes 35% to Dubai’s GDP. There is something that the Sheikhs of Dubai are very adept in, that makes their emirate a land of dreams. They just don’t dream, like everything that they have created in Dubai, they dream big and dream against the odds.

That is the spirit, the businesses in Dubai thrive on. It lies in the core of every message, every tale emanating from the sands of Dubai.