country reports

TIOS

2011

ASEAN

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Our multidisciplinary servicesWherever you are, we assemble the right people and knowledge to support your needs:

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Worldwide, we are organized into four Areas: 9kaY%HY[aÕ[$�9e]ja[Yk$�=E=A9� =mjgh]$�Middle East, India and Africa) and Japan. L`]�9kaY%HY[aÕ[�9j]Y�[gehjak]k�eYjc]lk�af�Asean, Greater China, Korea and Oceania. Together, we bring 27,000 people across 20 countries and territories to serve our

Helping our clients achieve potential

clients in this region in a seamless and consistent manner.

Our truly borderless approach to the eYjc]lk�af�9kaY%HY[aÕ[�e]Yfk�o]�eajjgj� the structures of many businesses operating in the region. We are also able to draw from our understanding of the local market and deep subject matter knowledge as well as our global capabilities and experiences. Làk�Z]f]Õlk�[da]flk�oal`�`]Y\imYjl]jk�af�9kaY%HY[aÕ[�gj�afl]jfYlagfYd�[gehYfa]k�looking to expand in this fast-growing region, where we help you to understand the market growth drivers, improve business operations and navigate the compliance and regulatory landscape.

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Our principal industry sectors

Assurance Tax

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Contact us in Southeast Asia

Oalàf�9kaY%HY[aÕ[$�o]�gh]jYl]�naY�Yf�integrated Asean Sub-Area unit comprising ))$(((�h]ghd]�Y[jgkk�,+�g^Õ[]k&�Làk�enables us to meet the unique needs and challenges of our clients more effectively and seamlessly.

Gmj�9kaY%HY[aÕ[�presence

For more information on how we can make a difference to your business, contact:

Steven PhanManaging Partner Singapore and [email protected] +65 6309 8818

EYc�C]Yl�E]f_Asean Assurance [email protected] +65 6309 6738 Adrian BallAsean Tax [email protected] +65 6309 8787

Mildred Tan Asean Advisory [email protected] +65 6309 8200

Harsha BasnayakeAsean Transaction Advisory Services [email protected] +65 6309 6741

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CHAPER 1

! Incoterms® 2010

South East Asia multilateral relationships

! APEC

!"# #$%&'#() $)*&)! 5e EU! 5e EU-Singapore FTA! HSBC! INTERVIEW Mr Harvey-Samuel! INTERVIEW Mr Boyles

(+%*,(! Constelor Holdings! INTERVIEW AFIG! INTERVIEW Portek

!"# (-#() ,&..$)*!/! Key data! Intra-ASEAN trade! For agro-based products

South East Asia subregions developments

0*.'-#(1(! INTERVIEW Dr Peter Richter! Updates on BIMP-EAGA! 20 things to know about bimp eaga

0*.' #(1( -!(!*-!*,-! exports from BIMPEAGA! socio economic datas! Greater Mekong Subregion:Trade and Investment

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CHAPTER 2

!"#$% &'!$ '!(' %()%*()%$!

Host country Singapore

!"#$%&'() "# *+) $,'-%, ).'#'/0! From “Singapore Inc” to “Singapore Unlimited”! +e Economic Development Board! INTERVIEW Professor Mahbubani! Ernst & Young

!"#$%&'() *+) '1*2%(3 "#4)!*'(! Food Empire Ltd

!"#$%&'(): *+) ()!)%(.+ %#3 3)4),'&/)#* +1-

! Health R&D Development ! INTERVIEW Mr Vaissié! Energy Research and Development! Water R&D Development! Environment & Water: Map

!"#$%&'() 51#3%/)#*%,!! Singapore's objectives! EDB: the spine of Singapore's economic development! +e cultural imperatives of EDB! Singapore: Was it really a Miracle?

!"#$%&'() %#3 $,'-%, )#*()&',"!! +e 50 things to know before heading to singapore

!"#$%&'() !).*'("%, %#%,0!"!! Singapore as a springboard into ASEAN! TGI met with Vopak! INTERVIEW Rolls Royce! INTERVIEW United Engineers! INTERVIEW ST Engineering! Singapore Engineering Services! INTERVIEW Rotary Engineering! Electronics! Logistics Singapore! INTERVIEW JTC! INTERVIEW DHL! Chemicals! INTERVIEW Shell

!(,)'-".&'! ).'/(,) $'0*&"#. !-",!".! Coup de coeur country LAO PDR

! INTERVIEW Dr Sisouphanthong! LAO OV Consulting

Close up country !ailand ! +e Board of Investment of +ailand! +e +aï Chamber of Commerce! INTERVIEW Dr Rappa

TIOS speaks up on Myanmar

! INTERVIEW Mr Pun! INTERVIEW Mr Taylor

UPDATES !e new government of PhilippinesCountry highlights: Indonesia

Country highlights: Malaysia

Country highlights: Brunei

Country highlights: Cambodia

Country highlights: Viet Nam

Country highlights: Myanmar

CHAPTER 3

1".-".'$& 2"1#!

! Nuvali: An Oasis of opportunity ! Women’s Entrepreneurship! A call for collective actionon climate change

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I invite you to discover South East Asia, a region with a tremendous amount of opportunities for business related activities. TIOS South East Asia 2010 is the second edition of our flagship project, which has the objective of highlighting trade and investment opportunities in the region. !e project is updated on a yearly basis to keep our readers informed on the developments in the region. In the 2009 edition, we choose the Philippines as our Host Country because of the preparation for the elections and the high demand for information about the business environment of the country. !is year, we choose Singapore as our Host Country, because Singapore is undergoing economic changes that will place the country in a leadership position for South East Asia, and the rest of the world. !e Singaporean government constantly looks at the dynamics of the global economy and seeks innovative solutions to be at the forefront of industry and trade. !erefore you will find a large part of the book dedicated to Singapore. According to TIOS Group International methodology, we work on a rotating basis and select also each year a Coup de Coeur Country (Lao PDR) and a Close Up Country (!ailand). We choose Lao PDR because the country is moving fast towards a market-oriented economy, with a strong desire of the government to be part of the global economy, and we will like to support their e"orts in reaching the global business community. Our decision to select !ailand as our Close-Up country was based on the necessity after the recent political events to provide balanced, objective, and first-hand information about the reality of the political and economic risk in the country.

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Caroline Couronne, [email protected]

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CHAPTER — 1 / PART — 1

South East Asia multilateral relationships

Ambassador Noor, APEC Executive Director,

TIOS Group International: APEC is an advocate of the promotion of trade as a means to econo-mic growth. How is trade related to economic growth in a practical manner?Ambassador Noor: When I was a child, I would visit a shop in a kampong [small Malaysian village] where the keeper struggled to make a living. He only sold basic things: a few packets of sweets and flour and sugar. But when I went to the main town, I could see big shops and very busy supermarkets. So one day I decided to ask the shop keeper: why not expand

your business? He was dismissive, explaining that people in the kampong were not rich and that there was simply no market. Just like the shop keeper, economies are impeded by the limitations of small markets. !ey need to transcend borders in order to reach consumers who have disposable income. !at is exactly how trade leads to economic growth. TGI: How much of a role does China play within APEC? AN: China is an active member of APEC. We have a seconded Programme Director, who is based at the Secretariat and China contributes both to policy issues and implementation activities. China is hos-ting one of the only two Ministerial Meetings to be held outside the APEC host economy of Japan this year. !e Human Resource Development Ministerial Meeting is held in Beijing in September. TGI: How does ASEAN articulate within the APEC? How do ASEAN member countries evolve within APEC and are the two institu-tions complementary? AN: !e two institutions are complementary. Most members of ASEAN are also members of APEC, and ASEAN has o"cial observer status at APEC meetings. !ere are open lines of communication between us both at the Secretariat level but also at the working

APECINTERVIEW

SOUTH EAST ASIA IN THE GLOBAL ECONOMY !

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level, each learns from the experiences of the other. For example, ASEAN and APEC have been sharing information on how to deal with health pandemics and this is beneficial for the region as a whole. TGI: What is APEC’s role in the global economy? What are APEC’s priorities? How does APEC relate to the WTO’s objectives?AN: !e common value of APEC members is their commitment to free trade and investment. Even as they addressed an economic crisis that was being compared to the Depression of the 1930s, APEC economies pledged not to engage in protectionism. Last year, APEC Leaders renewed their commitment to refrain from protectionism and, in collaboration with the World Trade Organisation, monitored the implementation of trade-related policy measures to promote economic recovery. APEC envisions a region characterised by free and liberalised trade. !e success of the WTO’s Doha Round of nego-tiations is considered by members to be the best possible outcome. At the same time, APEC continues to explore the possibility of a Free Trade Area of the Asia-Pacific.

Meanwhile, APEC is working on practical measu-res such as greater liberalisation of trade and invest-ment and improvements to the supply chain, to ad-vance regional economic integration. A new priority for APEC over the next few years is to develop and implement a new strategy for strengthening econo-mic growth. APEC wants growth to be sustainable, inclusive, balanced and knowledge-based so that the benefits of globalisation are more widely shared, and to ensure the region will experience continued prosperity in the future. !e third priority is enhan-cing human security, such as counter-terrorism and food security. With the three pillars above supported by economic and technical cooperation, APEC is discussing a long-term new vision for development and prosperity in the region.TGI: How do you perceive the increasing number of FTAs being conducted, signed or under nego-tiation between ASEAN and other economies? Could you tell us more about the Free Trade Area for Asia Pacific?AN: !e FTAAP refers to a free trade area among APEC’s 21 member economies. It’s a lofty ideal, extending across the Pacific Ocean and e"ectively including about 41 percent of the world’s population

and 55 percent of world GDP. As a means to explore the best ways toward a regional free trade area, APEC is studying, among other things, how the FTAs that already exist could be building blocks.TGI: How is APEC playing an active role in In-clusive Growth for countries such as Viet Nam, Chile, Peru or the poorer member economies?AN: Capacity-building is a long-standing priority to APEC. !e Human Resources Development Working Group specifically aims to improve the quality of basic education, enhance skills in key sectors and encourage life-long learning. !e Small and Medium Enterprises Working Group builds capacity of SMEs to engage in international trade. Other groups target infrastructure. !e Telecommunications Working Group is currently aiming to achieve universal ac-cess to broadband by 2015. !is is a target they set after achieving their previous goal of tripling the rate of regional internet access in 2008. APEC’s work on regional economic integration also leads to more inclusive growth. Just like the shop-keeper who can o"er a greater range of goods as he ex-pands his customer base, regional integration will increase the scope of opportunities throughout the entire region, especially for developing economies. Developing a New Growth Strategy for APEC is central to our work this year. Based on our expe-riences of the economic crisis, we know that growth needs to be more inclusive, sustainable, balanced and knowledge-based. !is is not a one-year strategy; rather, it is the foundation for APEC’s new long-term plan for achieving prosperity.TGI: What are your personal objectives for the three-year term you have just begun as Execu-tive Director of APEC?TGI: As a result of my education and beliefs, I am naturally interested in increasing the prosperity of developing countries. As a former representative for Malaysia at the WTO in Geneva, I am acutely aware of the correlation between trade and economic development. Just like Japan, the host economy for APEC this year and the economy responsible for guiding our agenda, I support the e"ort to develop new ideas and strategies and believe that it is equally important for action to implement them.

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!"# #$%&'#() $)*&)

Karel de Gucht, EU Trade Commissioner.

TGI: Why is it important to support trade to alleviate poverty? How is the EU a model for regional integration for other regions in the world? What can the EU learn from ASEAN, and vice versa?KG: Opening up to trade and investment is a tried and tested route to increased prosperity. !e success of many of South East Asia's economies testifies to this. Whether it be China, South Korea or Germany, globalisation works. And policy makers around the world and across the ideological spectrum seem to realise this. Over the last twenty years in the EU, we have created a single market, a common currency and the freedom for all our citizens to travel, live and work freely across 27 countries. We understand

the challenges of regional integration. ASEAN has set ambitious goals with its Economic Community blueprint and I very much support this process. !e EU and ASEAN have common interests on a range of issues such as maintaining an open trading system, tackling environmental challenges and deepening regional integration. While you cannot always apply lessons from one region to another, there is a lot to be said for comparing notes and sharing expe-riences. ASEAN looks set to play an increasingly important role globally. It is in both our interests to work together. TGI: How is the Singapore-EU FTA a step forward towards wider FTA negotiation in ASEAN? What are your priorities in the negotiations of the Singapore-EU FTA?KG: I feel that an FTA with Singapore is a spring-board to enter the wider ASEAN region. !is is not only because of Singapore's role as a regional transport and financial hub but because of the wider interest it generates. Ever since the EU and Singa-pore announced their plans to negotiate an FTA last December, there is a lot of discussion in many ASEAN capitals to emulate this new dynamic in trade relations. For example, the Vietnamese Prime Minister has already confirmed to me his readiness to engage in an FTA with the EU, and Vietnam is one of the fastest growing ASEAN economies. !ere is a possibility that we will see a number of ASEAN FTAs being launched over the next 18 months or

The EUINTERVIEW


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so. Ultimately, these bilateral FTAs should be seen as building blocks towards our long-term goal to reaching a bi-regional EU-ASEAN FTA.With re-gards to my priorities for immediate negotiations, Singapore already has a developed service industry so discussing services will in all likelihood be an important element in our negotiations. Government procurement and non-tari! barriers will be others. Moreover, I hope that the result of our negotiations with Singapore can serve as a reference for other trade talks.TGI: How important is the ASEAN market to the EU business community?KG: "e ASEAN markets are important for EU bu-sinesses. Trade between the EU and ASEAN has reached impressive proportions: some # 175 billion worth of goods and services are traded between the two regions each year. "is makes the ASEAN group our third largest trading partner after the US and China. I also see a lot of potential. For one thing, the economies in ASEAN are growing dynamically. At the same time, many of our exporters face substantial barriers when trying to do business with the region. Negotiating FTAs with ASEAN countries will allow us to tackle many of these barriers, and to tap into the potential of these markets. "e FTAs should therefore create a good platform for prosperity. TGI: What are your thoughts on the ASEAN Economic Community?KG: I admire the determination by which ASEAN go-vernments drive forward the project of an Economic Community by 2015. In the EU we have experienced how di$cult it can be to create a region with free movement of goods, services, investment, skilled labour, and capital. We are confident that ASEAN and its peoples will reap the benefits just as Europe has done. And we are also ready to support further regional integration within ASEAN. Trade between ASEAN members might be comparatively small for the moment, but there is great potential linked to the e!orts by ASEAN to establish their Economic Com-munity. "is will not only impact ASEAN nations, but also give rise to additional market opportunities for EU operators. "e ultimate EU-ASEAN FTA would contribute to achieving this goal.TGI: What is your personal mission as Trade Commissioner of the European Commission? What you would like to achieve during your

term? What do you consider are your biggest challenges in your efforts towards fostering free trade? KG: With the experience of the financial crisis fresh in our minds, I want to see trade policy at the fo-refront of the recovery plan. It's crucial for people in Europe and elsewhere to see the benefits of free trade in everyday life. It's through trade policy that markets stay open and that goods and services keep flowing. "e best way to prevent economic globalisation from going backwards is to push it forwards. As EU Trade Commissioner, multilateral trade liberalisation and rule-making remains my top priority. I will continue to push for a successful completion of the Doha Development round. "e DDA will bring substantial economic gains, deve-lopment gains and systemic benefits that cannot be allowed to slip out of reach. I am not saying it will be easy but I remain determined to reach an ambitious and balanced Doha deal in the near future, and I believe our WTO partners share that objective. I also have a major bilateral agenda ahead for an ambitious set of trade negotiations with a particular focus on countries with a strong growth potential. As well as the ASEAN region, we are in the process of nego-tiating a number of other FTAs, such as with India and Canada. In addition, the Commission has just decided to re-launch the negotiations with Mercosur. "ese bilateral FTAs are by no not means there to undermine the multilateral DDA negotiations, but rather to underpin them. "e success of the EU's FTA with Korea shows that ambitious deals can be done. It's one of the most ambitious agreements of its kind - with import duties eliminated on nearly all products, many significant non-tari! barriers will be eliminated and there is far-reaching liberalisation of trade in services. We have also recently concluded deals with Peru and Colombia and I hope to conclude negotiations with Central America soon. "ese deals are symbolic of Europe's capacity to liberalise trade even in a downturn. Whilst other trade partners struggle to maintain trade openness, Europe is not only keeping its markets open but we are capable and ready to go further.

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!e historical context Under Pascal Lamy, the European Commissioner for Trade (1999-2004) the focus of the European Commission was on multilateral trade agreements, particularly the Doha Development round which started at the end of 2001. It was not until under the leadership of Peter Mandelson as the European Commissioner for Trade (2004-2008) that the focus of the European Commission shifted towards bilateral trade agreements, as it became clear that the Doha Development round was not likely to get anywhere any time soon. However, it was also crucial that any FTAs that the EU would negotiate did not jeopardise the progress of the Doha Development Round. !is required a new generation of FTAs which

! should be more advanced involving substantial trade liberalisation elements as well as addressing human rights, health & safety and environmental issues;! address real economic problems and key issues such as trade and investment regulations and restrictions;! do not take away the incentives for multi-lateral rounds.

Korea, India and ASEAN were identified as priority markets where it made economic sense for the EU to negotiate as the EU was the largest investor in all of these countries. !e first example of the new generation FTAs was the EU-South Korea FTA, which was the most liberalising FTA ever to be negotiated between the EU and a non-European country. It was twice more comprehensive than the FTA being negotiated between the US and South Korea at the time which had to be put to bed after it was blocked by the US Parliament for political reasons. !e negotiations started in 2006 and the FTA has a comprehensive coverage of services, re-quiring Korea to adapt the same health & safety and environmental standards as the EU as well as liberalising its telecommunications and financial services sectors. As a result, Korea will adapt the European GSM system in telecommunications and IBAN in financial services, giving the EU a huge advantage over the US and Japan which have their own systems not compatible with that of the EU.

!e FTA also stipulated that FDI flows would not be controlled in either direction, which in e"ect meant that the Korean government which controlled FDI flows into the country could no longer do so. It is also the first FTA where the EU agreed to liberalise its own agriculture sector, which has never been negotiated before.

!e EU- ASEAN FTA negotiations!e negotiations started simultaneously with the negotiations with Korea but were immediately met with obstacles. !e EU wanted to only negotiate with the older member of ASEAN leaving out Cambodia, Lao PDR and Myanmar (the EU delegates could not even be in the same room as Myanmar delegates because of the ongoing ban).

!e initial reaction from ASEAN (particularly Malaysia) was harsh saying the EU should not be telling them which members they wanted to ne-gotiate with, as ASEAN member could also ask to negotiate with only the EU-15. But in the end, they agreed. !e EU wants from an ASEAN-FTA to ad-dress non-tari" barriers, cancel all restrictions on investments, and include services

!e EU encountered three di"erent reactions from ASEAN regarding the FTA:1. Singapore for example, had no objections to doing the FTA with the EU, but they did not want to open up in the same way to other ASEAN countries which they would have to do with the ASEAN-EU FTA2. Countries like Viet Nam were simply not pros-perous enough to accommodate some of the requi-rements of the FTA like lifting the restrictions of capital because of the state of their economy3. Another group led by Malaysia did not want to negotiate something more ambitious with the EU than what had been negotiated for ASEAN. !eir attitude was: "why is the FTA negotiated between ASEAN and Australia/New Zealand or China not good enough for the EU?!"

On the EU- Singapore FTAFrom an economic point of view an FTA with Ma-laysia or !ailand would bring much more benefits to the EU, but in the context of the region starting with Singapore makes sense.

Singapore is very keen to have the services in the FTA with the EU which would require them adapting to EU standards. !e US-Singapore FTA is not as ambitious as the kind of FTA the EU is interested in negotiating with Singapore.

!e EU-SingaporeFTA


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HSBCINTERVIEW

TIOS Group International talks to Peter Boyles CEO HSBC Conti-nental Europe and Guy Harvey - Samuel CEO HSBC Singapore. [1]

TIOS Group International: Conside-ring the existing market situa-tion in the European Union, what are your thoughts on the future position of Asia in the world economy?Peter Boyles & Guy Harvey-Samuel: Without the emerging markets of Asia, global growth would have been 50% lower than it has been since the beginning of this millen-nium. And the region’s GDP now represents a quarter of global GDP, bigger than the USA or the Eu-ropean Union. Its economic im-portance is now beyond question, and will endure. !is economic dynamism comes in part from a closing of the gap, but also from the lessons that were learned in the Asian crisis of 1997. These countries have been aware ever since then that their indepen-dence depends on their ability to generate trade surpluses. As a result they have introduced the economic policies that will allow them to do so.

!e economic crisis in the euro zone will not change the under-lying picture and Asia will retain its new economic position. Indeed there could be positive outcomes.

!e instability of the euro zone could encourage Asian countries to step up the pace of development of their local capital markets, in order to o"er new outlets for strong local savings as well as sa-tisfying the ever-growing demand from international investors for emerging market assets. China has already taken a step in this direction, by issuing 6 billion yuan of government bonds in Hong Kong, thus making these securi-ties available to foreign investors. Moreover, the crisis is encouraging Asian governments to focus eco-nomic policy on domestic demand, which wil l have very positive effects for global growth.It is true that the increase in risk aversion in the euro zone, which has already a"ected Asian bond and equity markets, could affect company investment. Meanwhile, the very weak growth we are expecting in the euro zone could limit Asian exports to Europe, which repre-sent 26% of total exports from emerging Asian economies. But in the final analysis, Asia is likely to remain the uncontested leader in economic growth around the world over the next few years.TGI: What are the strategic imperatives for the EU to strengthen its economic in-volvement in Asia? PB & GHS: !e European Union is a favoured partner of emerging

Asia. Asian imports from the Eu-ropean Union grew by 17% per year between 2002 and 2007! And certain European countries, like Germany obviously, are already very present in Asia. But to go further and strengthen our eco-nomic cooperation, notably with the ASEAN nations, we will need to develop reciprocal support sys-tems for companies seeking to move into new markets. To this end HSBC has created “Club Pays” in partnership with Ubifrance to help French companies esta-blish themselves and make their products known. Naturally we started with India and China but this initiative could well be extended to other countries.

Equally clearly, it is important that Europe learns to speak with a single voice to explain its com-mercial choices and positions to, for instance, the WTO, or to strengthen relationships with ASEAN nations. Confidence is based on transparency and clarity about the positions of all parties.TGI: What are your thoughts on the Greek Tragedy and the contagion to the rest of the EU? In the long term, what can the EuroZone do to avoid being vulnerable to financial mar-kets’ attacks? PB & GHS: !ere are two lessons to be learnt from the European crisis. !e first is that one should not

1 " Mr Guy Harvey-Samuel will be Head of International Asia Pacific based from Hong-Kong in October 2010

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believe that the issue of economic growth strategies can be resolved by increasing public spending. The second is that one cannot step outside the rules implicit in belonging to a currency union. !e introduction of stimulus packages was indispensable and helped limit the scale of the recession. Howe-ver, in most euro zone countries, they gave way to a period of very strong public spending. In nearly half of the euro zone’s countries public spending grew by more than 5% per year between 1998 and 2007. It is true that borrowing was very cheap, given that these same countries enjoyed negative real interest rates thanks to their membership of the euro zone, something that also fuelled growth in private sector indebtedness. !is allowed these countries to report very strong growth rates, which probably would have been much lower but for this easy fi-nancing. So by 2007, at the end of this remarkable period of ‘the Great Moderation’, the current account deficit was more than 10% of GDP in Cyprus, Spain and Greece and was very close to 10% in Portugal. By compari-son, the current account surplus was nearly 8% in Germany, 8.5% in the Netherlands and 9.7% in Luxembourg. However, in the final analysis, the euro zone’s current account is probably one of the best balanced in the world, as it is close to 0. !e problem therefore comes more from imbalances within the zone rather than any problems of the zone itself. To avoid this it was important that members of the euro respected the Stability and Growth Pact that was introdu-ced to ensure that there were no

significant disparities within the zone and hence avoid crises such as the one we are seeing today. !e rules were in place, but they were not respected. It will therefore be necessary that member states agree to stick by the rules and continue European integration. !ey will then become less vul-nerable to speculation. Over the longer term, it seems to us that the Lisbon Programme represents a good road map for making Europe a region of growth. Improvements in the employment rate and an increase in R&D investment are both targets that still need to be pursued. Whilst Europe continues to set itself apart by its high hourly productivity, thanks to the quality of its workforce and its innova-tion, it will need to go further to ensure that it stays at the head of the global pack.TGI: Although HSBC has a long history in Asia, the bank seems to believe in opportunities that can be found in Europe: what are those opportunities you are seeing in Europe?PB: At HSBC, the Continental European region consists of 25 countries, 11 of which are emer-ging economies. Eastern Europe in particular is an area where we see opportunities with its growing economy, evolving connectivity to other parts of the world through its increasingly migrant and tra-velling population, and increased trade flows. HSBC is well positio-ned to support this growth in trade given that much of it is with re-gions such as Asia and the Middle East, two areas in which we have a strong presence. History has shown that HSBC is committed to supporting developing econo-

mies, and is again well placed to do so as Eastern Europe benefits from increased economic and financial market developments. We have shown that we are also able to take advantage of exter-nal growth opportunities within Continental Europe when acqui-sitions fitting our strategy present themselves. !e recent acquisition of RBS’s retail banking business in Kazakhstan reflected HSBC’s positive view of the country’s long term prospects, not least because of its trade flows with China. We have been in Kazakhstan for 12 years and this deal significantly increased our platform for growth by doubling our network and growing our customer base five-fold. Finally, we wish to ensure that HSBC achieves a position as one of the foremost financial institutions in these dynamic Continental European markets, and is in keeping with the HSBC Group's stated strategy to focus on emerging markets given the growth opportunities that exist.TGI: How do you foresee the future of the Euro Zone?PB: The crisis revealed the fra-gility of the euro zone and of its economic governance, but it also demonstrated the ability of member states to mobilise them-selves and produce a concrete res-ponse to the problems created by the Greek crisis. Having o"ered #80bn in support to Greece, the European Union put a #450bn package on the table to protect against any refinancing risk, parti-cularly in the euro zone’s peripheral countries. In addition, a system of loans funded by bond issues to which all European Union coun-tries are signatories has already


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been approved and has worked. !e euro zone has shown its ability to face up to its responsibilities and will continue to count in the economic world. An awareness of the importance of innovation and R&D will allow the continent to maintain its lead in a number of fields. And European consumers are nearly as important as their peers across the Atlantic. Private consumption accounts for 60% of European Union GDP, or more than "7,000bn! But the big challenge for the euro zone to my mind is its ageing population. !e share of those aged over 65 in the euro zone will rise from 18% at present to 25% in 2030. And given the social security systems in this continent, such a demographic shift means that we will have to rethink not only their financing but also the entire economic growth model. One of the good things to come out of the current turbulence is that it will force the euro zone to prepare for this di#cult passage in its economic growth. !is is the silver lining.TGI: How important is a trade relationship with South East Asia for the strength of the European economy?PB &GHS: ASEAN and the European Union have a lot in common, and in particular their desire to strengthen their economic, political and cultu-ral integration so as to be better able to open up to others. Moreo-ver, the European Commission was the first international body to establish relationships with ASEAN in 1972. !e European Union is the largest trade partner for the USA and Japan and the largest export market for ASEAN nations after the USA. !e develo-

pment of economic partnerships between Europe and the ASEAN nations is therefore essential for growth on both sides. However, it is of particular importance for the European Union at a time when growth prospects for the next few years are weak. !e clean-up in European Union budgets over the next few years and the recovery from recession will hit econo-mic activity. !e strength of the ASEAN nations could help Europe come out of recession faster. And there is potential there. Although the European Union is the main export market for ASEAN nations, exports from the European Unions to the ASEAN nations are stuck at a low level. In addition, the countries of south-east Asia are likely to see rapid growth over the next few years. !ere are structu-ral factors that have allowed emer-ging economies to be less a$ected by the recession and have helped them enjoy a significant recovery. First, the low level of per capita income suggests that the gap will continue to narrow. Secondly, trade links between emerging economies have grown rapidly in recent years, and the banking systems of these countries came through the crisis comparatively unscathed. !irdly, the thawing of political relations and the speed at which information is transmit-ted make these markets more open to international investors. Lastly, emerging economies benefit from a substantial cyclical factor directly related to the maintenance of very low interest rates in the USA, which result in substantial capital flows into these countries. !eir governments, in seeking to limit the rise in their currencies,

intervene on the currency markets, boosting their reserves of foreign currencies and government bonds, particularly from the US, as they do so. !is extra demand for Treasury stock tends to hold bond yields at a very low level, in turn boosting capital flows to emerging markets still further. Emerging market currencies are therefore subject to upward pressure and their ca-pital markets are rising strongly, particularly as governments de-ploy expansionist monetary poli-cies in order to limit the pressure on currencies. !is rise in capital markets will help support domestic demand, particularly in the ASEAN nations. !e European Union the-refore has high hopes that it will be able to grow its trade with the countries of south-east Asia and thus strengthen the commercial links between our two regions.


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TGI: Based on your experience as Human Re-sources Manager for HSBC Worldwide, what are the key success criteria for achieving the management of Continental Europe?PB: In reality, it is my entire experience with HSBC, more than 35 years, that has shaped my manage-ment style, rather than the twenty months I spent as General Manager for Group Human Resources. I have acquired experience working in many di!erent regions such as the Middle East, Asia, the South Pacific, Continental Europe and the UK and in all of the bank’s business lines which means I have a very good understanding of HSBC’s rich diversity. When I was asked to head up Continental Europe, I felt that the region was a microcosm of HSBC. Continental Europe at HSBC is made up of 25 countries, 14 de-veloped and 11 emerging countries, from Ireland to Russia, Kazakhstan and Israel, and is home to 18 di!erent o"cial languages. In addition, all our business customer groups are active in the region.

We decided to move the regional headquarters from London to Paris. #e idea was quite simple; we wanted to move out of the shadow cast by both the Group’s HQ and the very large UK bank because it was di"cult to get people excited about some of the countries within the region, which are small in comparison to the UK. We also wanted the regional HQ to sit in France, which is our biggest regional business, to leverage the competence we have there. For the regional management to be successful we must leverage the centres of excellence across the region and the central team needs to be composed of the right mix of people. In addition to the local talent in France, I have brought in some highly qualified

and motivated HSBC sta! both from London and across the continent, in addition to a few selective external hires.. TGI: Managing a corporate entity comprising 18 languages and 25 countries brings numerous challenges: how do you describe your mana-gement style and your leadership for building a homogeneous team?PB: I would sum up my management style as “do as you would be done by”. I don’t believe in microma-naging people. We have regular monthly meetings to make sure people are on track using a balanced scorecard and heatmap approach. I believe in being approachable and having short lines of communica-tion as hierarchies tend to filter out what is going on within an organisation. People must feel free to voice an opinion or share bad news as part of a good risk management culture. I’ve been around long enough to know that I’m not good at everything and that I need people in my team who have a broad range of skills. I’m extremely proud of the team of people who work for me at the regional HQ. #is team is fairly representative of the region with 13 di!erent languages spoken which means that most people can call the regional HQ and speak to someone in their mother tongue. By bringing local people from most countries represented in the region, we open informal communication channels. It is also helps me to understand what may be going on in far away

Mr BoylesGETTINGPERSONALWITH

"Our head o!ce’s role is to facilitate, drive, inspire and control. We can’t do everything at the regional centre and what I am trying to encourage the various countries is that they help each other rather than always turning to the HQ for assistance."

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countries that are part of my region. For me, it was important to build direct communication channels with each country, while keeping a small but e!-cient team: thus we halved the number of employees working at the regional HQ. Our head o!ce’s role is to facilitate, drive, inspire and control. We can’t do everything at the regional centre and what I am trying to encourage the various countries is that they help each other rather than always turning to the HQ for assistance. TGI: the responsibility of such a region in terms of disparity and geographical size allows you to promote sta! internally and to build a network of opportunities for all your employees. How do you picture your responsibility in terms of bringing the best opportunities to your inter-national sta! across all Continental Europe?"PB: It is my wish to make Continental Europe the “best region to work in”. For this, I plan to stay in this position for at least 3 years, and I actively discourage decisions being taken without the involvement of the country CEOs concerned. I have some key objectives during my term of leadership of Continental Europe: I wish to create value, keep enhancing the brand, grow our business in all customer segments, drive services standards up in the region, establish a high level of confidence in and commitment to the region internally and significantly increase mobility from country to country. Let me conclude with a note on two programmes that are close to my heart. Firstly, our European Management Trainee Programme al-lows sta" to move up the management ladder and to benefit from international assignments. Secondly, we have set up a “diversity and inclusion” committee as we believe that diversity and inclusion are key imperatives to business success. It is important that each employee feels part of what we are doing and through our Global People Survey we are able to measure levels of employee engagement and make improvements to working life based on the feedback. If people are happy and can prosper then I feel that engagement takes care of itself. My job in a nutshell, as CEO of Continental Europe, is to unleash constructive energy to build a sustainable business.

" My job in a nutshell, as CEO of Continental Europe, is to unleash constructive energy to build a sustainable business."


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In terms of GDP, most of the African economies are small, we can consider that the biggest economy is South Africa. But when we compare it with several economies of developing countries in East Asia and of the Southeast, in particular China, Republic of Korea and Indonesia, their economies are substan-tially bigger than that of South Africa. !e disparity in the growth of income and the levels between both regions is reflected in their FDI performance. !e East and the South-East Asia seem as zones that

!"#$%!

are the most attractive for foreign investors in the world, whereas Africa has attracted only a relatively small share of global inward FDI and has a limited outward FDI.

However, these last years, African countries began to look for FDI actively, and put this objective first and foremost in their development policy. With its strong inward FDI experience, developing Asia may provide Africa with policy insights on how to attract and benefit from FDI. Moreover, a number of Asian eco-

"!e global crisis has brought to the forefront the strong growth potential and resilience of Africa. !e continent looks set to enjoy steady long-term growth in view of its abundant natural resources, large population of 1 billion people across 53 cities, improved political and macroeconomic conditions, and commitment by the governments to develop a sustainable infrastructure to support this growth. Singapore’s own history of development has allowed the country to be in a relevant position to share its experiences globally. Singapore enterprises have a successful track record of projects spanning areas such as urban planning, transport & logistics, public housing, environmental protection, water preservation and regeneration, to healthcare and education. I believe there is significant scope for many win-win partnerships between Singapore and African businesses. For African companies looking to expand into a similarly fast-growing Asia, Singapore, with its strategic geographical location, stable economy and business-friendly environment, will serve them well as a springboard into the region. !e Africa Singapore Business Forum which was launched in July 2010, is intended to be a platform where such interactions and partnerships can be catalysed." [1]

1 "Mr Chong Lit Cheong, CEO of International Enterprise, Singapore

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Company

Genting

IOI Corp

MISCMRCBOpus International

Petronas

Putera Capital

Ranhill PowerSime Darby

Telekom Malaysia

Industry or product

Conglomerate (including hotels and leisure, plantations, powergeneration)Oil palm refining property and tradingShipping Broadcasting Asset management

Oil and gas

Financial services

Power generation Palm oil refining

Telecommunications

Country of investments

Mauritius, South Africa

Mauritius

NigeriaGhanaSouth Africa

Chad, Guinea,Mozambique, Niger, Somalia, Sudan,South AfricaGhana, Mozambique,United Rep. of TanzaniaTanzaniaEgypt, United Rep.of Tanzania, TunisiaGuinea, Malawi

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! Malaysian Investors in Africa from South East Asia TABLE 1

nomies could be sources of increased FDI for African economies. Singapore, India and Malaysia are the top Asian sources of FDI in Africa. Since the mid-1980s, outward FDI from East and South-East Asian developing economies has increased. Sustained and rapid eco-nomic growth has led to growing land and labour shortages and rising operating costs, and, together with appreciating currencies, has pushed firms in East Asia to relocate their labour-intensive industries and processes abroad to remain domestically and internationally competitive. !e TNCs are mainly conglomerates in Hong Kong (China), the Republic of Korea, Singapore and Taiwan Province of China. Korean chaebols have done well abroad in heavy industry, construction and some consumer goods, while firms from Hong Kong (China) and Singapore

have expanded abroad in real estate development, hotel development, air and sea transportation, and banking and finance. In addition, China and other ASEAN economies, particularly Malaysia, are emer-ging as significant FDI sources, both within the region and beyond.[1]

Among ASEAN countries,only Singapore and Malaysia have significant investments in Africa. Sin-gapore’s FDI in Africa is highly concentrated and is preponderantly in Mauritius. In contrast, Malaysia’s FDI is highly dispersed geographically throughout Africa, including in many LDCs such as Chad, Gui-nea, Malawi, Mozambique and the United Republic of Tanzania. !is makes Malaysia an interesting case study of Asian FDI in Africa.[2]

1 ! ASIAN FOREIGN DIRECT INVESTMENT IN AFRICA, Towards a New Era of Cooperation among Developing Countries, UNITED NATIONS New York and Geneva, 2007 p32 2 ! ASIAN FOREIGN DIRECT INVESTMENT IN AFRICA, Towards a New Era of Cooperation among Developing Countries, UNITED NATIONS New York and Geneva, 2007 p33

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Global Investor’s Guide 2012

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Year in Review | Diplomacy & Politics | Economy | Finance | Energy | Industry | ICT | Transport & Logistics | Real Estate & Construction | Health & Education | Tourism & Retail

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Dubai 2012

In this issue ECONOMY REVIEW BACK TO BASICS25—A renewed focus on trade, finance, and tourism is paying dividends

FINANCE INTERVIEW MORE THAN THE MONEY60—Abdulla Mohammed Al Awar on the growing role of the DIFC

INDUSTRY REVIEW GOOD TO GROW93—Heavy investments in industrial activity are giving Dubai a new edge

TRANSPORT & LOGISTICS INTERVIEW NO TIME TO REST130—HH Sheikh Ahmed Bin Saeed Al Maktoum on the success of Emirates Airlines

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Dubai2012

FINANCE 5555 The Twin Zones - REVIEW: Banking

56 Y. Sudhir Kumar Shetty, COO of Global Operations at UAE Exchange - INTERVIEW

58HE Abdulrahman Saleh Al Saleh, Director General of the Department of Finance - INTERVIEW

60Abdulla Mohammed Al Awar, CEO of the Dubai International Financial Centre (DIFC) Authority - INTERVIEW

62Saeb Eigner, Chairman of the Dubai Financial Services Authority (DFSA) - INTERVIEW

63 Rick Pudner, Group CEO of Emirates NBD - INTERVIEW

64Raghu Malhotra, Division President, Middle East & North Africa of MasterCard - INTERVIEW

65 By Your Side - FORUM: Private Banking

66 Rob Broedelet, Country Executive UAE at ABN AMRO - INTERVIEW

67 A Little Encouragement - ROUNDTABLE: International Banks

68 Something Different - Q&A: Local Banks

69 Just Add Liquidity - REVIEW: Capital Markets

70 Gary Anderson, CEO of Dubai Gold & Commodities Exchange (DGCX) - INTERVIEW

71 Find the Pool - Q&A: Local Exchanges

DIPLOMACY & POLITICS 1313 A Vision True - REVIEW

16HE Reem Al Hashimi, Minister of State & Managing Director of the Dubai World Expo 2020 Bid Committee- INTERVIEW

17 Don’t Stop Me Now - FOCUS: The UAE’s 40th Anniversary

18 Lord Green of Hurstpierpoint, Minister of UK Trade & Investment - INTERVIEW

19 HE Lee Myung-bak, President of the Republic of Korea - GUEST SPEAKER

21Francisco J. Sánchez, US Under Secretary of Commerce for International Trade - INTERVIEW

23Matías Mori, Executive Vice-President of Chile’s Foreign Investment Committee - INTERVIEW

24John Shimmin MHK, Minister for the Department of Economic Development of the Isle of Man Government - INTERVIEW

ECONOMY 2525 Back to Basics - REVIEW

30 The Way Forward - FOCUS: Strategic Plan

32HE Sheikha Lubna Bint Khalid Al Qasimi, Minister of Foreign Trade of the UAE - INTERVIEW

34HE Sami Al Qamzi, Director General of the Dubai Department of Economic Development - INTERVIEW

36 Fahad Al Gergawi, CEO of the Foreign Investment Office of Dubai FDI - INTERVIEW

37 Let’s All Come Together - ROUNDTABLE: Foreign Chambers

38Hamad Buamim, Director General of the Dubai Chamber of Commerce & Industry - INTERVIEW

40 Go Get ‘Em - Q&A: Business Development

42 Free for All - FOCUS: Free Trade Zones

44 Salma Ali Saif Saeed Bin Hareb, CEO of the Jebel Ali Free Zone (Jafza) - INTERVIEW

YEAR IN REVIEW 8

8His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice-President & Prime Minister & Ruler of Dubai - INSIDE PERSPECTIVE

10 The Dream Continues

In partnership with:Dubai FDI

13

30

55

46Mohammed Al Zarooni, Director General of the Dubai Airport Freezone (DAFZ) Authority - INTERVIEW

48Arif Obaid Al Dehail, CEO of the Ports, Customs, & Free Zone Corporation (Trakhees) - INTERVIEW

49 Khalid Bin Kalban, Managing Director & CEO of Dubai Investments - INTERVIEW

50 Malcolm Wall Morris, CEO of Dubai Multi Commodities Centre (DMCC) - INTERVIEW

51 Living Better - FORUM: Why Dubai?

52Mouayed Makhlouf, MENA Regional Director of the International Finance Corporation, World Bank Group - INTERVIEW

53 Mustafa Abdel-Wadood, CEO of Abraaj Capital Limited - INTERVIEW

54Samer Sarraf, Senior Vice-President & Country Head UAE of Amwal Al Khaleej - INTERVIEW

thebusinessyear

TRANSPORT & LOGISTICS 125125 In the Right Mode - REVIEW

130 HH Sheikh Ahmed Bin Saeed Al Maktoum, Chairman & Chief Executive of Emirates Airline & Group - INTERVIEW

132 Mohammed A. Ahli, Director General of the Dubai Civil Aviation Authority - INTERVIEW

134 Paul Griffiths, CEO of Dubai Airports - INTERVIEW

135 Upstairs, Downstairs - Q&A: Airlines

136 Habib Fekih, President of Airbus Middle East - INTERVIEW

137 Beyond the Sea - FOCUS: Port Expansion

138 Sultan Ahmed Bin Sulayem, Chairman of DP World - INTERVIEW

139 Never a Naysayer - Q&A: Logistical Solutions

140 Movers & Storers - ROUNDTABLE: Logistics

ENERGY 7979 Flip the Switch - REVIEW

80 Adnan H. Ghabris, CEO & Managing Director of NPS Energy - INTERVIEW

82Saeed Abdullah Khoory, CEO of the Emirates National Oil Company (ENOC) - INTERVIEW

84 Ahmad M. Bin Shafar, CEO of Empower - INTERVIEW

85Khamis Juma Buamim, Chairman of Drydocks World & Maritime World - INTERVIEW

86 Going Green - FOCUS: Dubai Green Economy Partnership

87 Adnan Sharafi, Chairman of the Emirates Green Building Council (EGBC) - INTERVIEW

88 Ivano Iannelli, CEO of the Dubai Carbon Centre of Excellence - INTERVIEW

89 Nasser H. Saidi, Chairman of the Clean Energy Business Council - INTERVIEW

90

Lord Marland of Odstock, Chairman of UK Trade & Investment’s Business Ambassadors’ Group & Minister of the Department of Energy & Climate Change of the UK - INTERVIEW

91 It’s Easy Being Green - FORUM: Green Technology

92Nabil A. Habayeb, President & CEO of the Middle East & North Africa for General Electric - INTERVIEW

INDUSTRY 9393 Good to Grow - REVIEW

94 Anne Ruth Herkes, State Secretary, German Federal Ministry of Industry & Technology - GUEST SPEAKER

98 Abdulla J.M. Kalban, President & CEO of Dubai Aluminium (DUBAL) - INTERVIEW

100 Coming Together - ROUNDTABLE: Local Industry

101 In the Same Neighborhood - FOCUS: Dubai Industrial City

102 Abdulla Bel Houl, Managing Director of Dubai Industrial City - INTERVIEW

103 The Perfect Fit - FORUM: Auto Retailers

104 Top of the Line - FOCUS: Automobile Industry

106 K. Rajaram, CEO of Al Nabooda Automobiles - INTERVIEW

107 Check It Out - FOCUS: FMCGs

109 Tarek El Sakka, General Manager of Dubai Refreshments - INTERVIEW

110 Jamal Al Ghurair, Managing Director of Al Khaleej Sugar - INTERVIEW

111 Yves Manghardt, Chairman & CEO of Nestlé Middle East - INTERVIEW

ICT 113113 An Apt Success - REVIEW

116 HE Mohamed Nasser Al Ghanim, Director General of the Telecommunications Regulatory Authority (TRA) - INTERVIEW

118 Eesa M. Bastaki, CEO of the ICT Fund - INTERVIEW

119 Osman Sultan, CEO of Emirates Integrated Telecommunications Company PJSC-du - INTERVIEW

121 Join the Cloud - ROUNDTABLE: IT Infrastructure Development

122 Across the Board - Q&A: Global IT Solutions

123 Stirring Interests - FORUM: IT & Media

79 101

113

125

72 Making the Most of It - FORUM: Capital Markets Development

73 Premium Market - REVIEW: Insurance

74 Michel Khalaf, President of Europe, Middle East & Africa for MetLife - INTERVIEW

76 Keep It Safe - FORUM: Insurance

78 Ahmad Al Kazim, Managing Director of ASCANA - INTERVIEW

Dubai2012

172

REAL ESTATE & CONSTRUCTION 141

141 Quality Does Count - REVIEW: Real Estate

146 Marwan Ahmed Bin Ghalita, CEO of the Real Estate Regulatory Agency - INTERVIEW

148 Nicholas Maclean, Managing Director of CBRE Middle East - INTERVIEW

149 Live & Belong - Q&A: Local Majors

150 Mohamed Alabbar, Chairman of Emaar Properties - INTERVIEW

151 Take My Advice - Q&A: Consultants

152 Build Me Up - ROUNDTABLE: Real Estate Outlook

153 Strong Recovery - FORUM: Management

154 The Top Out - REVIEW: Construction

156 Danny Lubert, Joint Chairman of The First Group - INTERVIEW

157 Design Front - FORUM: Construction Engineering

158 On the Rise - ROUNDTABLE: Materials

HEALTH & EDUCATION 159159 Filling the Gaps - REVIEW: Health

160 David Hadley, CEO of EHL Management Services - INTERVIEW

162HE Qadhi Saeed Al Murooshid, Director General of the Dubai Health Authority - INTERVIEW

164 Thomas J. Murray, CEO of American Hospital Dubai - INTERVIEW

166 Dr. Ayesha Abdullah, Managing Director of Dubai Sciences Cluster - INTERVIEW

167 Heal Me - FORUM: Private Health Care

168 Leading the Region - Q&A: Medical Technology

169Abboud Bejjani, Regional Director, Middle East, Africa, & Pakistan at Abbott Laboratories S.A. - INTERVIEW

170 Rashad Hassan Al Moosa, Joint Managing Director & Partner of Gulf Drug - INTERVIEW

171 Engineering Innovation - ROUNDTABLE: DuBiotech

172 Top of the Class - REVIEW: Education

175

Dr. Abdulla Al Karam, Chairman of the Board of Directors & Director General the Knowledge & Human Development Authority - INTERVIEW

176Dino Varkey, Group Executive Director & Board Member of GEMS Education - INTERVIEW

177 The Key to Knowledge - Q&A: Local Educators

178 On Campus - Q&A: Business Schools

TOURISM & RETAIL 179179 Setting the Record Straight - REVIEW

184Khalid A. Bin Sulayem, Director General of the Department of Tourism, & Commerce Marketing - INTERVIEW

186 Salah Al Qassim, Advisor to the Dubai Culture & Arts Authority - INTERVIEW

189 Gerald Lawless, Executive Chairman of Jumeirah Group - INTERVIEW

190 In the Fast Lane - Q&A: Business & Leisure Hotels

192Sami Nasser, Vice-President of Operations at Sofitel Middle East, Egypt, & Indian Ocean - INTERVIEW

193 Come Stay with Me - Q&A: Luxury Hotels

194 Equine to a Tee - Q&A: Golf & Racing

196 Shopping Paradise - FOCUS: Retail

198 Laila Suhail, CEO of Dubai Events & Pro-motion Establishment (DEPE) - INTERVIEW

199 Colm McLoughlin, Executive Vice-Chair-man of Dubai Duty Free - INTERVIEW

200 Anurag Agrawal, Managing Director of Canon Middle East - INTERVIEW

201 Anan Fakhreddin, CEO & Member of the Board of Damas - INTERVIEW

202 That Little Something - Q&A: Luxury Retail

EXECUTIVE GUIDE 203203 The Set Up - REVIEW: Legal

208Mahmud P.K. Merali, Managing Partner of Merali’s (formerly Baker Tilly Merali’s) - INTERVIEW

209 Number Crunch - REVIEW: Accountancy

212 Be In the Know - ROUNDTABLE: The Ins & Outs of Setting Up Shop

213 When in Dubai...

179

141

ISBN 978-1-908180-09-4

PublisherRupert Smith

Managing DirectorAy!e Hazır Valentin

Editorial DirectorJason J. Nash

Regional DirectorPeggy Rosiak

Regional EditorLeland Rice

Country ManagerBetül Çakalo"lu

Country EditorJohanna Cronin

Assistant Country ManagersAndreea CruceanuSimona Romeo

Sub-EditorsPeter HowsonEmily MallisTyler MattiaceEric A. Edwards

AnalystsMatthew CarrollPeter Speetjens

TranscribersLars Larsson Attila PelitJared Wall

Advertising ManagerCaroline Miller

Creative DirectorGenee Presta

Cover IllustrationPınar du Pre

Operations ManagerSerpil Yaltalıer

Operations AssistantSemiha Elkıran

Circulation & Marketing DirectorAmy Burtin

Printing: Apa Uniprint

Production: The Business Year78 York StreetLondon W1H 1DPT +44 (0)207 692 8335F +44 (0)207 692 [email protected]

The Business Year is a tradename of Wildcat Publishing Inc.Copyright The Business Year International Inc. 2012. All rights reserved. No part of this publication may reproduced, stored in a retrievable system or transmitted in any form or by any means, electronic, mechanical, photocopied, recorded or otherwise without prior permission of The Business Year International Inc. The Business Year International Inc. has made every effort to ensure that the content of this publication is accurate at the time of printing. The Business Year International Inc. makes no warranty, representation or undertaking, whether expressed or implied, nor does it assume any legal liability, direct or indirect, or responsibility for the accuracy, completeness or usefulness of any information contained in this publication.

1

8 DUBAI

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HH Sheikh Mohammed Bin Rashid Al MaktoumINSIDE PERSPECTIVE

Dubai & the Emerging WorldHis Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice-President & Prime Minister & Ruler of Dubai.

1 His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President & Prime Minister & Ruler of Dubai2 Dubai contributes to global cooperation by hosting a variety of international events, such as the World Economic Forum

The future always surprises us. We cannot predict it, but we do have a responsibility to look ahead and trace its outlines, as well as the opportunities and challenges it will present. In 2050, our young nation, the United Arab Emirates, will be almost exactly twice as old as it is today. Forty years of foresight and strenuous hard work by our people and our country have led to our achievements and laid the foundations for our global po-sition today and a prosperous future. Dubai and the UAE sit at the intersec-tion of one of the most transformative mo-ments in geo-economic history in more than a century: the gradual but inevitable shift of the economic center of gravity from the West to emerging markets and the rise of new trade markets. Between now and 2050, emerging markets will be the main engine of global

economic growth. In this new world, trade flows will be infinitely more connected than ever before, and goods, services, and people more mobile than at any time in the past. Here in Dubai and the UAE, we see these trends as positive. While we recognize the profound importance of safeguarding our identity and traditions—keeping sight of who we are and where we come from—we embrace the possibilities the future presents for our people, our city, and our country. Standing at the center of trade between the Middle East and Asia linking Latin America, Africa, and beyond, Dubai is shaping and catalyzing this new world of trade and investment flows. Trade is important, of course, but we also recognize the importance and re-silience of a knowledge-based economy as a key driver of sustainable growth and opportunities. We continue to invest not just in hard infrastructure but also in soft infrastruc-ture; our education, our healthcare, and a culture that promotes the research and development of new ideas. Based on our vision of the new world,

Dubai and the UAE sit at the intersection of one of the most transformative moments in geo-economic history.

we are equally committed to building a sustainable environment that supports the growth of our economy. Our Green Economy Initiative an-nounced earlier this year reaffirms our commitment to diversify energy sources and preserve the environment whilst strengthening our competitive position. Through this initiative, we aim to be-come a world-leading center for the ex-port and re-export of green products and technologies. While there are many routes to suc-cess, here in Dubai, we are seizing the economic, cultural, and scientific oppor-tunities represented by the future, forging new connections, and positioning Dubai for growth across this decade and the ones that follow. O

2

DUBAI 9

Dubai2012

The Dream ContinuesYEAR IN REVIEW

ARABIAN GULF

QATAR

IRAN

SAUDI ARABIA

UNITED ARAB EMIRATES

Abu Dhabi

SHARJAH

AJMAN

UMM AL QUWAIN

DUBAI

10 DUBAI

thebusinessyear

Dubai’s high standard of living and dynamic society makes it a secure Middle Eastern des-tination. Largely located along the western coast of the UAE, Dubai is now home to more than 2 million people. The expatriate popula-tion of the city that is drawn from all corners of the world helps to drive the local economy and contribute much to the lifeblood of this thriving metropolis. The success of Dubai’s economic develop-ment is attributable not to its hydrocarbon re-serves, but to its growing status as a trading hub for the Gulf and beyond. Dubai’s total revenues from oil and gas account for less than 2% of the Emirate’s GDP, and form just 2% of the UAE’s total gas revenues. In order to provide for the long-term future of Dubai, the diversification of the local economy was long ago recognized as being vital to its success. The construction boom that resulted from Dubai’s ambition to become a tourism and trading destination to ri-val any major city in the world has been in part complemented by its swiftly developing finan-cial sector. In 2011 the GDP of Dubai grew by 3.4%, reaching $84.7 million, indicating that the Emirate is showing signs of recovery following the challenging 2008-2010 period. Regional political uncertainty has served to bolster the recovery in 2012, with rising oil prices boost-ing the UAE’s economy, while the security of Dubai’s infrastructure is attracting trade, hos-pitality, and financial investment into the city. Dubai has historically been an important re-gional emporium, and the city’s Jebel Ali Port is one of the world’s largest trading hubs. The Dubai International Financial Centre (DIFC) is an offshore free zone designed to make Dubai a world-class financial hub and has helped strengthen investment in the finance sector. The DIFC operates under a unique legal and reg-ulatory framework, and businesses operating in the “city within a city” can be wholly owned by foreign entities and benefit from zero income and profits tax. Other free zones attracting foreign investors to Dubai include Dubai Inter-net City, home to giants such as Microsoft and IBM, and Dubai Media City, where CNN, BBC, and Reuters all have offices. Dubai Healthcare City, in collaboration with DuBiotech, was es-tablished to be a center for world-class medical practice and research excellence and is attract-ing investments from a number of different pri-vate clinical practices. Tourism has long been and looks set to re-main one of the key strengths of Dubai’s econ-omy. A 2011 report from CBRE indicated that Dubai is now on par with London as the most popular shopping destination in the world. Dubai Duty Free is the largest retailer in the ii

STRAIT OF HORMUZ

GULF OF OMAN

IRAN

OMAN

OMAN

FUJAIRAH

RAS AL KHAIMAH

AL AIN

DUBAI 11

Dubai2012

LENGTH OF LAND BORDERS (UAE)867 km

AREA4,114 km2

LOCAL GOVERNMENT STRUCTURE (UAE)Seven Federal Emirates

TOTAL POPULATION2 million

LIFE EXPECTANCY (MALE / FEMALE - UAE)77 / 79

GDP (NOMINAL 2011)$84.7 billion

UNEMPLOYMENT RATE (JUNE 2012)4.60%

INFLATION RATE (JUNE 2012)1.83%

CURRENT ACCOUNT SURPLUS (UAE)$112.7 billion

LEGISLATIVE POWER (UAE)40-member Federal National Council(8 from Dubai)

RULERHH Sheikh Mohammed Bin Rashid Al Maktoum

POLITICAL STRUCTUREConstitutional Monarchy

Exchange RateAED vs. USD

Source: OANDA

Source: Dubai Statistics Centre

2Q 2

011

3Q 2

011

4Q 2

011

1Q 2

012

2Q 2

012

3.6728

3.6726

3.6724

3.6722

3.6720

3.6718

3.6716

3.6714

2007 2008 2009 2010 2011

86

85

84

83

82

81

80

79

78

77

76

GDP (constant prices)in USD billions

Source: US Census Bureau

Age Pyramid (2012)in millions, according to age group

FEMALEMALE100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-145-90-4

00 1.2 2.4 3.6 4.8 66 4.8 3.6 2.4 1.2

The Dubai government continues to direct considerable energy into the diversification of the local economy.

world, and there are over 70 shopping malls in the city. It is estimated that by 2015 Dubai will attract 15 million tourists yearly. The hotel industry has reported strong occupancy rates in 2011 and 1H2012, and it was far less affected by the global financial crisis than the real estate market. Following the opening of the new Green Line metro extension in 2011, UAE Vice-President and Prime Minister and Ruler of Dubai HH Sheikh Mohammed Bin Rashid Al Maktoum symbolically took to the lines in an effort to encourage residents and tourists alike to make use of the city’s advanced transportation in-frastructure. The drive to encourage the use of public transport in the city is also part of the wider UAE government’s increase in diplomatic engagement concern-ing climate change issues. In 2009 the UAE won the bid to host the headquarters of the International Renewable Energy Agency, and it continues to promote re-search and investment in the UAE for renewable energy sources. The Dubai government continues to direct considerable energy into the diver-sification of the local economy, and while the real estate sector is fighting hard to show signs of recovery, the wider economy is expected to show healthy growth of 4.5% in 2012. There are sizeable investments being directed into infrastructure, including road, rail, airport, and civil aviation development. Investments in these areas are set to make up a total of 43% of the government budget. The Dubai World Central’s Al Maktoum International Airport also began passenger opera-tions in 2011 and is expected to have a capacity of 5 million passengers a year by 2017. Dubai has benefited from increased trade with markets across South and West Asia, and this trend looks set to continue over the medium term. A drop in investor confidence in the greater Middle East has also served to strengthen Dubai’s economy over 2011, and as long as the market remains stable, business-friendly, and convenient to access, it will continue to draw in investors looking to serve the surrounding regions from a reliable base of operations. All these indica-tors are supportive of Dubai’s bid to host the 2020 World Expo, which will attract even more attention to the achievements of the past half century. O

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DIPLOMACY & POLITICS

REVIEW

INSIDE 13 A Vision True - REVIEW | 16 HE Reem Al Hashimi, Minister of State & Managing Director of the Dubai World Expo 2020 Bid Committee - INTERVIEW | 17 Don’t Stop Me Now - FOCUS: The UAE’s 40th Anniversary | 18 Lord Green of Hurstpierpoint, Minister of UK Trade & Investment - INTERVIEW | 19 HE Lee Myung-bak, President of the Republic of Korea - GUEST SPEAKER | 21 Francisco J. Sánchez, US Under Secretary of Commerce for International Trade - INTERVIEW | 23 Matías Mori, Executive Vice-President of Chile’s Foreign Investment Committee - INTERVIEW | 24 John Shimmin MHK, Minister for the Department of Economic Development of the Isle of Man Government - INTERVIEW

The flag of the UAE was adopted on December 2, 1971. The colors of red, black, green, and white symbolize the unity of the Arab nations.

X Dubai’s leadership platform has offered the stability needed for the Emirate to take a principal political and economic role in the region.

A Vision True

A vibrant world city and regional hub, Dubai is poised to play a critical role in the 21st century. The Emirate is the largest by population and fastest growing in the UAE. Over the last cen-tury, Dubai evolved from a small fishing village known for the pearl trade to a thriving energy producer. Today, Dubai has invested its wealth from oil and gas in economic development and transformed itself into a center in the Gulf re-gion for shipping, ICT, media, and services. With its focus on infrastructure development, including the construction of the world’s tall-est building and largest airport terminal in the world, the Emirate has also established itself as a regional leader in commerce, transportation, and tourism, providing extraordinary stan-dards of quality and a world-class experience to increasing numbers of tourists and business elites. Boasting some of the world’s most luxu-rious hotels and serving as a regional headquar-ters for major technology, financial, and media multinationals, Dubai has successfully lever-aged its location and unique cosmopolitan mix of nationalities. Known as the “City of Gold,” due to its robust gold market, Dubai offers lei-sure and business travelers unparalleled ameni-ties such as the opportunity to stay in one of the world’s few seven-star hotels or fly in style on one of Emirates’ new Airbus 380s.

UAE GOVERNMENT STRUCTUREGoverned as a federation of constitutional mon-archies since its independence from the UK in 1971, the UAE includes Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah, and Umm al-Quwain. The government of the UAE ii

Image: Mohammed Nairooz

Dubai2012

13

is guided by a federal constitution that estab-lishes the privileges and duties of the executive, legislative, and judicial branches of the national government as well as reserving substantial powers and autonomy for the governments of the individual emirates. The balance of power between the emirates at the national level cor-responds to the size and influence of each emir-ate, with Abu Dhabi and Dubai assuming the largest share of leadership responsibility. As the capital city of the UAE, the ruler of Abu Dhabi has served as the President since the country’s formation, with the ruler of Dubai serving as the Prime Minister and Vice-President. The constitution of the UAE also establishes the rights, freedoms, and duties of Emirati citizens and gives the federal government responsibil-ity for foreign policy, international economic policy, and national security. HH Sheikh Mohammed Bin Rashid Al Maktoum is the Ruler of Dubai as well as Prime Minister and Vice-President of the UAE, posi-tions that he has held since 2006 following the death of his older brother, Sheikh Maktoum Bin Rashid Al Maktoum. Sheikh Mohammed is also a member of the UAE’s Supreme Coun-cil of the Union, the highest executive body in the UAE, consisting of the rulers of each of the seven emirates. The UAE’s Supreme Council is responsible for formulating and implement-ing national policies regarding budget and fiscal policy, national security policy, and in-ternational agreements and treaties. Dubai, along with Abu Dhabi, maintains a veto on the

Council. Decisions are made by a majority vote, except for certain substantive issues requiring a minimum of five votes, including the vote of Dubai and Abu Dhabi. In 2011, the UAE held parliamentary elec-tions to fill 20 positions on the Federal National Council, the primary legislative and advisory body for the federal government. With the goal of promoting increased political participa-tion, the government of the UAE expanded the electoral college to more than 129,000 eligible voters, up from approximately 6,500 in 2006. A total of 469 candidates contested the election, including 85 female candidates. Four elected representatives and an additional four rep-resentatives appointed by the ruler represent Dubai in the 40-member body.

DUBAI MUNICIPAL GOVERNMENTSince 1833, Dubai has been under the leader-ship of the Al Maktoum family. The local gov-ernment of Dubai, or the Dubai Municipality (DM), was established in 1954 by Sheikh Rashid Bin Saeed Al Maktoum. Today, the Dubai Mu-nicipality is chaired by Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai, and brother of Sheikh Mohammed Bin Rashid Al Maktoum. The DM oversees local government entities such as the Roads Department, Planning and Survey Department, Environment and Public Health Department, and Financial Affairs De-partment. Sheikh Hamdan also serves as the Finance Minister of the UAE, and has led UAE delegations to the IMF and OPEC. Two of Sheikh Mohammed’s sons, Sheikh Hamdan Bin Mo-hammed Al Maktoum, who is the Crown Prince of Dubai, and Sheikh Maktoum Bin Mohammed Bin Rashid Al Maktoum, assist their father and uncle with the administration of DM as deputy rulers of Dubai. The Crown Prince also serves as the Chairman of the Dubai Executive Council and head of the Mohammed Bin Rashid Estab-lishment for Young Business Leaders. Sheikh Maktoum, Sheikh Hamdan Bin Mohammed’s brother, serves on the boards of several media and technology companies in Dubai as well as working closely and traveling with the Presi-dent and Prime Minister of the UAE on foreign trips. Another key royal family member and leader in municipal public affairs is Sheikh Ahmed Bin Saeed Al Maktoum, Sheikh Mohammed’s youngest brother and chairman of Dubai World. Sheikh Ahmed has been a business leader in Dubai for more than 25 years as well as serv-ing as Second Vice-Chairman of the Dubai Executive Council and Chairman of the Dubai Supreme Fiscal Committee.

INTERNATIONAL AIDDubai not only uses its economic wealth for business and trade, but also for international aid. In 2007, Dubai launched the Dubai Cares platform, a philanthropic organization with the aim of contributing to the UN Millennium De-

In 2007, Dubai launched the Dubai Cares platform, a philanthropic organization with the aim of contributing to the UN Millennium Development Goals.

Image: Official US Navy Imagery

1

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14 DIPLOMACY & POLITICS

velopment Goals aimed at reducing poverty in developing countries through improving edu-cation levels and gender equality. The primary focus of Dubai Cares is to improve classroom conditions and the quality of education in poor and developing countries. Although the pro-gram originally aimed to raise AED200 million, contributions far exceeded this target, totaling more than AED1.7 billion, or some $463 million. Dubai Cares has partnered with other inter-national NGOs and aid organizations such as the Melinda and Bill Gates Foundation, Care International, Medecins Sans Frontieres, Ox-fam, Partnership for Child Development, Plan International, Room to Read, Save the Children, UNICEF, UNRWA, WaterAid, and the World Food Program. The organization shares the view of the UN Millennium Development Goals that education is the best way to lift societies out of poverty and is working to achieve universal primary ed-ucation and significant improvements in equal gender access to education by providing aid to more than 7 million students in 28 countries. Describing his country’s humanitarian efforts on his website, Sheikh Mohammed says, “our aid has humanitarian objectives only; it is never governed by politics or limited by the geogra-phy, race, color or religion of the beneficiary. We provide humanitarian capital and are a ma-jor relief station for the poor; we do not hesitate to help and support the brother, the ill-fated friend, or the needy wherever they are. This is our message to the world, and this is the United Arab Emirates.” Dubai is also playing an increasingly im-portant role in the world of global sports and horse racing. Thanks to the support of Sheikh Mohammed and his love for sports, Dubai now hosts numerous international competitive events, including the Dubai Tennis Champion-ships, the Dubai Desert Classic golf tournament, the Dubai Rugby Sevens, and the Dubai World Cup. The Dubai World Cup, established in 1996, has a $10 million purse for the winner, making it the world’s most valuable horse-racing prize. An accomplished athlete and horseman him-self, the Ruler of Dubai strongly supports the development of Dubai as an international sports destination and hopes to increase the sports of-fering in the coming years.

FOREIGN RELATIONSIn the realm of international affairs, the UAE maintains cordial relations with neighboring countries and projects its stability and focus on economic development internationally. Despite the difficulties faced in the Gulf region over the past few decades, including the Iran-Iraq war, the occupation of Kuwait, and the US invasion of Iraq, Dubai and the UAE have managed to steer clear of conflicts and maintain stability during difficult periods of regional turmoil. In an interview with TBY, Reem Al Hashimi, Min-ister of State, emphasized that the UAE has “a

positive and extremely open relationship with all countries around the world.” While the UAE maintains good relations with the US and the West, Foreign Minister Sheikh Abdullah Bin Zayed Al Nahyan has made the case for expanding relations with rising eco-nomic powers. He said in a recent speech that the UAE “look[s] forward to bolstering our rela-tions with fast growing countries, such as India, Russia, China, Brazil, and South Africa.” Look-ing forward, Dubai hopes to bolster its profile yet further with its bid to host the World Expo 2020. Supporters of Dubai’s candidacy argue that the Emirate is a crossroads of culture and ideas, and that its geography and rapidly devel-oping infrastructure make it a central location to bring together countries from the north, south, east, and west. When looking at the Emirate’s ambitious growth over the past five decades, it is easy to understand how it has developed into a central part of the global economy. O

1 HH Sheikh Mohammed Bin Rashid Al Maktoum receives US Secretary of the Navy Ray Mabus in April 20122 HH Sheikh Mohammed Bin Rashid Al Maktoum and HH Sheikh Ahmed Bin Saeed Al Maktoum, Chairman & Chief Executive of Emirates Airline & Group3 A group of officers from the Elite Dubai Police Special Task Force parade at the “March For Peace” event organized in 2012 in Zabeel, Dubai

3

2Image: World Economic Forum

Dubai2012

DIPLOMACY & POLITICS 15

INTERVIEWHE Reem Al Hashimi

1 Reem Al Hashimi, Minister of State and Managing Director of the Dubai World Expo 2020 Bid Committee

BIOGRAPHYReem Al Hashimi was sworn in as Minister of State in the Cabinet of the UAE in February 2008. She is also the Managing Director of Dubai’s World Expo 2020 executive body. She has experience in international affairs, beginning her career as a Commercial Attaché and, subsequently, as Deputy Chief of Mission at the UAE Embassy in Washington, DC. She completed her undergraduate studies at Tufts University, where she earned BA degrees in International Relations and French. She also holds a Master’s Degree from Harvard University.

To have 200 different nationalities that live and work here shows that we are very open to the world.

Show & TellTBY talks to Reem Al Hashimi, Minister of State and Managing Director of the Dubai World Expo 2020 Bid Committee, on the Emirates preparations to bring the exposition to the UAE.

1

TBY What are the main strengths of Dubai as a possible location for the World Expo 2020?REEM AL HASHIMI Dubai’s commitment to host the World Expo is really about placing Dubai as a location where culture, ideas, and people from all around the world can come together to share and contribute their thoughts and add meaning and value to the environment and world around them. We believe that Dubai has many factors that make it a particularly good candidate, with the first being its geographic positioning. We have a very good position between East and West and have very strong rela-tions with countries in the south. Histori-cally, both in the last 40 years as the UAE and long before, we have always been a kind of hub. This is a place where people from all over have passed through. Sec-ondly, we feel we have some incredible infrastructure, from our airport to roads to ports to the metro; we have everything necessary to facilitate the flow of millions of people who will have to come through. The third important quality that Dubai has is the fact that it is already a mini expo with more than 200 nationalities living here and showcasing their nationalities, art, and culture. To have 200 different nationalities that live and work here is something very special and shows that we are very open to the world. I think our fourth strength is that this is such a strong place for business. Some of the most important companies from around the world are here; 60% or 70% of the Fortune 500 companies have headquarters in Dubai.

What is the idea behind the “connecting minds, creating the future” theme?The UAE is a responsible global citizen. We look at the world around us and real-ize there are challenges out there; we then try to address them. This notion of global citizenship is very important for Dubai and for the UAE in general. We believe that “connecting minds, creating the future” is the right theme as we feel that through do-ing that we can address global challenges. What we have done is looked at the global challenges in the world today and what they may be in 2020. Some will be energy security, employment generation for the youth, integration, the empowerment of women, climate change, and the efficacy of aid programs. What we see today may be exacerbated by 2020 and we want our theme to address these global challenges and help to provide solutions for them.

What motivated the choice of the large plot by the new Al Maktoum Airport as the proposed location for the event? Expo 2020 is really a national project that involves the support of all of the Emirates and, obviously the Prime Minister. We felt that having a site that is located half an hour from Abu Dhabi’s airport and 40 minutes from Dubai’s airport will allow us to capitalize on the strengths of both cit-ies. It is also connected to the Al Maktoum International Airport through a seam-less corridor and to Dubai’s ports. We see this connection with the new ports and airports as one large web of connectivity. The 400-hectare site will be best leveraged because it is connected to such important logistics and transportation nodes.

How important is Dubai’s role in terms of the development of the new Silk Route?Our role as a hub has dated back to the early 19th and 20th century. We have evi-dence of people who have come through Dubai to East Africa and Europe to Asia and East Asia. This is something that is very in-tegral to us as a fact of history. With Dubai, we have that historical merit, and the city is built upon it. Dubai is also very keen to become more modern and efficient, em-bracing new technology and new ways of doing things. We see ourselves as very much a part of the new Silk Route. There are more than 200,000 Chinese people who live in the UAE. We have over 4,000 Chinese companies based out of the Emir-ates. Every single day, you will see travel-lers here making that East to West journey and now, more and more, we see the South to North connections as well. In my daily interaction with colleagues in Africa and sub-Saharan Africa, I see that movement continuously. It is all happening in Dubai, primarily. O

thebusinessyear


FOCUS: The UAE’s 40th AnniversaryDon’t Stop Me Now

An inimitable social and economic story reached its 40th year in December 2011, as the UAE celebrated its anniversary with lavish festivity. The groundwork is now being laid for the next 40 years.Since its beginnings, the UAE’s growth arc has been underlined by the successful exploitation of oil wealth and a steadfast commitment to its economic foundations based on trade. On December 2, 2011, Dubai joined the 40th anniversary celebra-tions of the creation of the UAE in grand style with fireworks, parades, and music. The successor to the Trucial States Council that had been set up under the British protectorate system to coordinate investments from growing oil wealth, the UAE was formed after negotiations prompted by the British announcement of the end of its protectorate system. Dubai, which had already become a significant port under the British, thus joined Abu Dhabi, which had already begun pumping oil in the early 1960s, to convince the other sheikhdoms to join. While six agreed to unification on December 2, 1971, the sev-enth, Ras al-Khaimah, joined in 1972. The following boom, propelled by sig-nificant investment in its historic trade vo-cation, is credited to the late Sheikh Zayed Bin Sultan Al Nahyan, President of the UAE and ruler of Abu Dhabi, and Sheikh Rashid Bin Saeed Al Maktoum, Vice-President of the UAE and Ruler of Dubai. Between 1973 and 1980, increasing oil revenues were

pumped into large-scale cluster develop-ments in Dubai, including the World Trade Center, an extension of Port Rashid, and the Dubai Dry Docks. The Jebel Ali Port and Industrial Area, however, stands as the most significant economic development in Dubai’s history, evolving into the Jebel Ali Free Zone (Jafza) in 1985. With a combined investment of $2.3 billion, Dubai thus filled a gap in transshipment infrastructure that followed an explosion in imports into the GCC region caused by increasing oil revenues. Today then, under HH Sheikh Mo-hammed Bin Rashid Al Maktoum, Dubai, with significantly less carbon resources than Abu Dhabi, continues as a transship-ment hub as well as an expatriate haven. Emiratis form a minority of Dubai’s popu-lation, and the overall UAE, as a legacy of the drive to attract foreign skills to best exploit the nation’s resources. In a pro-gressive move, however, and in celebra-tion of the UAE’s 40th anniversary, Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE, granted the children of Emirati women married to foreigners the right to apply for citizenship. In another gesture, he also ordered pay raises of up to 45% for all federal government employees.

The celebration itself embodied the his-tory of the Emirates, under the “Spirit of the Union” slogan, and was a weeks’ long culmination of national pride and festiv-ity. With much to celebrate, Dubai now looks to carry its economy forward on the same growth arc, opening Dubai Maritime City, the latest addition to its maritime trade infrastructure portfolio between Port Rashid and Dubai Dry Docks. Equally, Jafza retains its significance today, with construction also underway to develop the South Zone. The zone already hosts 6,700 global companies, and contributes 20% to Dubai’s GDP. Jafza is also now home to Al Maktoum International Airport, which began cargo operations in 2010, to be fol-lowed later by passenger operations. Com-plementing Dubai International Airport, the hub is planned to become the largest airport in the world by freight handled, processing up to 12 million tons per year. The celebrations, then, were a keen re-minder of the origins of the city, and the Emirates at large, and poignant at a time when Dubai seeks to boost its traditional role as trade hub. O

1 The UAE was established in 1971

1

Dubai2012


INTERVIEW

1

Lord Green of Hurstpierpoint

1 Lord Green of Hurstpierpoint, Minister of UK Trade & Investment

BIOGRAPHYLord Green began his career with the Ministry of Overseas Development. In 1977, he joined management consultants McKinsey & Co Inc, with whom he undertook assignments in Europe, North America, and the Middle East. He joined HSBC in 1982 with responsibility for corporate planning activities and in 1985 was put in charge of the development of the bank’s global treasury operations. In 1992, he became Group Treasurer of HSBC Holdings and in 1998 he became Executive Director of the same bank. His is currently Minister of UK Trade and Investment.

The Eighth EmirateTBY talks to Lord Green of Hurstpierpoint, Minister of UK Trade & Investment, on upcoming events designed to bring companies in the UK and the UAE closer together.

There are some 4,000 British companies based in the UAE and 100,000 British nationals living there.

TBY You last visited in Autumn 2011. Why did the recent trade mission choose the UAE specifically? LORD GREEN In the current economic cli-mate, trade and investment have taken center stage as sources of sustainable growth, with governments and consum-ers no longer able to turn to debt to finance their spending. The UAE is a very impor-tant market for the UK. It is the 16th larg-est export market for the UK globally, and the number one market in the region. It is an exciting and growing market that UK companies are very keen to do business with. While our relationship is very strong, there is still more to do in order to build up business in the UAE and to encourage companies from the UAE to enter the UK market.

During your trip in 2011, many references were made to London as the “Eighth Emirate.” What is special about the investment relationship between the UAE and the UK?UAE companies have invested significantly in the UK, from the London Gateway, which will be London’s largest deep-sea port and logistics park, funded by DP World, to the London Array offshore wind farm. I welcome this investment, which brings great benefits to both sides. The UAE is also a popular destination for people from the UK. There are some 4,000 British companies based in the UAE and 100,000 British nationals living there. Many of them have been involved in the UAE’s de-velopment over the past decade, helping to make it the exciting, diverse regional hub it has become.

Dubai has emerged as a regional hub for in-vestment and business activities throughout the Middle East. What has made Dubai suc-cessful in this way?It is clear that in recent years the center of gravity in the global economy has shifted from west to east, and from north to south. Dubai has successfully positioned itself as a hub for the growing economies of the Mid-dle East and Africa. The vision of Sheikh Mohammed Bin Rashid Al Maktoum has diversified the country’s economy away from traditional oil and gas businesses into a finance, investment, and tourism hub.

In which industries and sectors do you see the most potential for greater commercial integra-tion between Dubai and the UK?There are many sectors where the UK and

the UAE already work closely together. Ties with the Lord Mayor of the City of London are very close. In terms of infrastructure, British companies are very active in the UAE and vice versa. There are also great opportunities for closer commercial inte-gration across all sectors, such as educa-tion, ICT, health care, energy, life sciences, and the creative industries. In autumn 2011, UK Trade & Investment will be invit-ing British companies to attend the “Big 5 2012” construction fair and trade show.

What is your outlook for UK businesses oper-ating in Dubai and for the region as a whole in the coming year?I am very positive about UK businesses in the UAE, not least because an increasing number of them are going out to test the waters. UK Trade & Investment in the UAE helped around 2,400 British companies in 2011, and this number has grown despite the global downturn—a sure sign that the market continues to offer exciting oppor-tunities and that UK SMEs are willing to take on the challenge. We are well on the way to achieving our aim of increasing bi-lateral trade to £12 billion by 2015—a good indication of the strong economic bonds that continue to exist between our two countries and the significant investment opportunities that lie ahead. O

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HE Lee Myung-bakGUEST SPEAKER

Hold the DreamLee Myung-bak, President of the Republic of Korea, on a common vision for Dubai and Korea, growing trade relations, and the importance of working together to tackle climate change.

BIOGRAPHYLee Myung-bak was elected President of the Republic of Korea in 2007. Prior to entering politics he had a 27-year career with Hyundai Group. He joined the company in 1965 and just five years later, at the age of 29, he became a company director. By age 35 he was Korea’s youngest CEO ever. Upon retiring as chairman of the company in 1992 he successfully ran for two consecutive terms in the Korean National Assembly before becoming Mayor of Seoul from 2002 to 2007. He is a graduate of Korea University.

His Highness Sheikh Zayed Bin Sultan Al Nahyan was a pioneer and a true vision-ary. His indomitable will and steadfast leadership prepared the UAE for the fu-ture and accomplished what many simply considered impossible. We find such vi-sion and commitment still alive today in Dubai. Under the extraordinary leadership of His Highness Sheikh Mohammed Bin Rashid al Maktoum, Dubai has become the model for the 21st century. Man-made islands, waterways, and ultra-modern architecture harmoniously coexist with their natural surroundings. Dubai has suc-cessfully blended together modernity, the environment, and aesthetics. Dubai has al-ready taken steps to undergo another great transformation by making itself the model of what it means to be a green city in the 21st century. Dubai is a living testament of what human imagination, creativity, com-mitment, and able leadership can achieve. Korea also believes in realizing dreams. Korea was a country ravaged by decades of colonial rule followed by a devastating war that left the entire country in utter ruin. However, Koreans were able to transform

the country from one of the poorest in the world into a robust and dynamic country. Many thought that Korea was hopeless, but the Korean people believed in their dreams. We have also become a country that is now providing assistance to others. We successfully hosted the G20 Seoul Sum-mit, contributing to common prosperity and shared growth. For a country that was once sustained solely by outside help, it is a phenomenal achievement that we are proud of. And the reason we achieved such growth was because we believed in our dreams and worked to make them happen. Our two countries share a common spirit, and we have built an important and successful economic partnership. Trade between the UAE and Korea reached $22.1 billion in 2011. Today, Korea is the world’s seventh largest exporting country, and the UAE is its largest export market in the Middle East. UAE exports to Korea rose 21.2% to $14.75 billion in 2011, and Korean exports to the UAE grew 32.4% to $7.26 billion. It is believed that UAE-Korea trade will grow by 21% in 2012 to a record $26.6 billion. South Korean firms are now im-portant participants in many key projects in the UAE, from nuclear power to infra-structure. UAE firms are increasing their role in Korea, entering partnerships to en-sure Korea’s energy security and running one of the country’s largest ports. As a young man, I devoted my life to making my country prosperous. That ii�

Our two countries share a common spirit, and we have built an important and successful economic partnership.

1

1 Lee Myung-bak, President of the Republic of Korea

Image: IAEA Imagebank

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was my dream. Later, when I became Mayor of Seoul, I worked hard to real-ize another dream of mine, which was to make Seoul a green metropolis; a city to be truly proud of and comfortable to live in. A long time ago, there used to be a stream that flowed through the heart of Seoul, but it was covered up and left to fester. I got rid of the concrete expressways and the cov-ering that had been in place for decades. I restored the stream to let it breathe again. Today, the silver fish, which are known to live only in the cleanest waters, have re-turned. When I became President in 2008, my dreams for Korea continued to grow. As we celebrated our 60th anniversary of the founding of the nation, I put forth a new vision. Our “Low-Carbon Green Growth” vision is our answer to the future. We believe that protecting the environ-ment and attaining sustainable growth can go together. Our Framework Act on Low-Carbon Green Growth is the first of its kind in the world. We are investing over 2% of our GDP into green technology, and are pleased to be able to share our knowl-edge and expertise with the UAE. South Korean nuclear energy professors have taken up posts at Khalifa University, and Emirati engineering students have visited Seoul to learn about the nuclear industry. A South Korean Green Economy agency is also working in Masdar City. Climate change is undoubtedly the defining chal-

lenge of our time. However, we consider this challenge as an historic opportunity. Our Green Growth initiative is revolution-izing the way we think, and the UAE is also thinking creatively to seize this historic opportunity. When we look at the nuclear power plant in Abu Dhabi, the renewable energy project in Masdar, and Dubai’s construc-tion of an eco-friendly, high-tech city of the future, I applaud the UAE’s vision and foresight. For a country with one of the world’s largest oil reserves, I know it took courage and vision for it to make this deci-sion to prepare for the post-oil era. And this is why Korea is proud to be the UAE’s partner in this endeavor, a journey to create a better, cleaner future for all. Climate change cannot be addressed by a few countries. It is a global challenge that requires a global solution. It must involve our developing partners as well as the advanced countries. This is why Korea launched the Global Green Growth Insti-tute (GGGI) in June 2010, for which the UAE will be its strategic partner. The regional office for the GGGI in the UAE will act as a hub for the Middle East and North Africa. This institute will be focused on finding workable solutions and bringing genuine change. Our responsibility is to work to-gether to make this world a better place, for ourselves and for our children. Let us show the world the power of dreams. O

2

2 South Korean President Lee Myung-bak waves to the crowd

For a country with one of the world’s largest oil reserves, I know it took courage and vision for it to make this decision to prepare for the post-oil era.

thebusinessyear


INTERVIEWMatías Mori

See For YourselfTBY talks to Matías Mori, Executive Vice-President of Chile’s Foreign Investment Committee, on a recent trade drive with the UAE, the opening of a UAE embassy in Santiago, and the benefits of investing in Chile.

BIOGRAPHYMatías Mori was appointed as Executive Vice-President of the Foreign Investment Committee by Chilean President Sebastián Piñera on July 12, 2010. He was awarded his undergraduate degree in law at the Universidad Católica de Chile and holds a Master of Law degree from the Law School of the University of Chicago and a Master of Public Administration degree from Harvard University’s John F. Kennedy School of Government. His professional experience is primarily in corporate law where he has worked on bond placements and the negotiation of syndicated loans on behalf of Chilean state enterprises and overseas companies. In addition, he has advised state companies and private investors on projects in the hydrocarbons sector.

1 Matías Mori, Executive Vice-President of Chile’s Foreign Investment Committee

1

TBY What are the positive outcomes from your visit to Dubai?MATÍAS MORI I came to Dubai with Pro-Chile, the Chilean promotion bureau, to participate in the Gulfood 2012 fair. We are aiming to enhance the volumes of trade between Chile and the region. When you promote a country, there are three sectors to consider: international trade, invest-ments, and tourism. International trade and tourism have a similar sales pitch in terms of attracting customers, but invest-ments are a different ball game. While in tourism, you may hope for surprises in a newly discovered country, in investments you don’t want any surprises. Interna-tional trade is a precursor to investments. We have seen the volume of trade increas-ing between the UAE and Chile. We want to reach a tipping point at which the inter-national trade between the two countries reaches the investment level.

What does the opening of the UAE’s embassy in Santiago in 2011 say about the trade rela-tionship between the two countries?International relations are based upon sig-naling, and this was a great signal for us. It demonstrates the commitment of the UAE to the region. We are hoping to launch di-rect flights from Santiago to Dubai. There is a direct flight to Brazil, and they will open a new route to Argentina. However, the volume of trade has a high correlation with the number of direct flights.

What does Dubai have to offer in terms of Chile’s opening up to the Middle East?Dubai is a hub. Its people have local re-gional knowledge, share the same religion, and practice the same customs. It’s easier for us to go through Dubai than to make trade relations with the neighboring coun-

tries on our own. Dubai has 1,400 hotels. The hospitality sector is huge, and there is a lot of room for the international trade of Chilean products such as wine, fruit, and dried foods.

What other exports is Chile promoting in Dubai?In terms of international trade, there are certain sectors we are tying to push, such as pharmaceuticals. The are many phar-maceuticals companies that want to set up here. Other manufactured products, such as produced olive oil, are also in demand. In terms of investments, we have a port-folio of public and private projects in sec-tors such as agribusiness, infrastructure, energy, and mining. We are especially fo-cused on agribusiness, given the fact that this region has issues with food security, and Chile has very healthy food produc-tion. Chileans consume just 20% of what we produce. We also have the third-largest supply of lithium, following Kazakhstan and Bolivia.

What opportunities and challenges do you an-ticipate in Dubai?I think that food is critical, and we have many opportunities in that sector. If it wishes to become a technology hub, it will start to require lithium, iron, and copper. There is a problem with branding; when other countries think about Latin America, they tend to focus on Brazil, the same way China has been the focal point in Asia. There are many countries on the side that are not as well-known and considered. We are trying to brand our position and sell our attributes. Latin America is a region of the world, and people usually view it with a lot of prejudice and believe the stereotypes, which are simply untrue in Chile.

How do you help businesses interested in in-vesting in Chile?There is a huge difference between the governments in the Gulf region and gov-ernments back home. In Chile, the gov-ernment comes behind the private sec-tor, as the private sector leads and knows best. However, in the Middle East it’s more government-to-government. The trade commissioner supports people who may be willing to invest, and while we are here in Dubai, we try to set them up with a plane to Chile. You can trade or make a touristic decision based on a brochure, but it’s very unlikely that someone will invest without

seeing the country itself. Our goal is to convince them to visit Chile.

How supportive has the UAE government been during this initiative?The government has openly supported us. The fact that it opened an embassy is a good sign. Since the UAE is flying to Brazil, it’s a signal that there is more interest in the re-gion. The UAE is becoming more aware of Latin America and its potential, especially during these times when Europe is not do-ing so well. The US also has an election this year, and the UAE is viewing that as another opportunity to try and diversify its portfolio in terms of investments. O

Dubai2012


INTERVIEW

BIOGRAPHYJohn Shimmin was educated at the Worcester College of Higher Education, where he studied Physical Education. Having enjoyed a successful career in teaching both in the UK and the Isle of Man, he decided to enter politics in 1996 and was elected to the Island’s Parliament (Tynwald) as a member of the House of Keys (MHK) for Douglas West. In 1999, he became Chairman of the Isle of Man Post Office and then went on to undertake a variety of ministerial roles in the Departments of Transport, Home Affairs and Local Government, and the Environment. In 2010, he became Minister of the Environment, Food, and Agriculture before being appointed by the Chief Minister to his present position as Minister for the Department of Economic Development in October 2011.

1 John Shimmin, Minister for the Department of Economic Development of the Isle of Man Government

Island & the SunTBY talks to John Shimmin, Minister for the Department of Economic Development of the Isle of Man Government, on the development of the relationship between Dubai and the Isle of Man and the potential opportunities for investors.

John Shimmin MHK

TBY The Isle of Man and Dubai share a number of economic strengths. What scope is there for an enhanced trade relationship?JOHN SHIMMIN Indeed, we share mutual strengths in independent areas of exper-tise, which are not necessarily mutually exclusive. Our desire is to explore oppor-tunities with the Emirates and further develop the already positive relationship at a government level. Equally, the Isle al-ready has a number of excellent businesses and brands operating in the Middle East region, fully complementing the local of-fering. Examples include our life insurance companies, such as Zurich, which bases its international operations on the Isle, em-ploys several hundred people in the UAE, and sells investment and savings products globally. The government on the Isle of Man is committed to providing support to such organizations.

What role does the UAE and wider Middle East play in the ongoing trade development vision?

Without a doubt, the Middle East has emerged as a key region in a global eco-nomic context, particularly over the past two decades. Furthermore, the ongoing growth pattern remains evident. This fac-tor and Dubai’s geographic location will continue to ensure the prominence of the region. The Isle of Man has recognized the opportunities, and for some time our gov-ernment-to-government relationship has been strong. We have identified a number of possibilities to explore and the authori-ties are excited by the mutually beneficial prospects. While there have been past visits by former ministers and chief min-isters to the region, with the advent of our new department committed to a sustained regional strategy for developing relation-ships, the Middle East has the potential to become our second most important mar-ket after the UK.

In which sectors do you see particular devel-opment potential opportunities?Both the Middle East and the Isle of Man have demonstrated excellence in many areas. Undoubtedly, the financial services sector will feature in our joint appraisal of areas in which we can work together. In particular, our vibrantly successful international wealth management offer-ing has potential; many globally branded businesses use the Isle of Man as a center from which to operate. We anticipate great opportunities as we explore this further. The Isle of Man also has clear strengths in asset structuring, retirement solutions, and succession planning. Diversity is a feature of the relevant economies, and we will welcome discussions at both a gov-ernment and business level in the coming months. For now, a number of great ideas are emerging, which we are very eager to explore in the region. We know that shar-ia-compliant products may be important in the region, and there is no reason why our businesses cannot offer these. I know one or two companies that already do. We also now have foundations that are more readily accepted structures for holding as-sets in civil law countries, recognizing that our traditional trusts were not as popular.

What are the benefits for the registration of air-craft from the UAE and the wider Middle East?We are proud of our renowned aircraft register, a highly successful component of our overall proposition. The register has a number of features. It is the world’s only

aircraft registry dedicated exclusively to executive jets, and our legislation and re-quirements are tailored uniquely to the executive jet sectors. In addition, we rec-ognize and accept design standards and licenses issued by multiple jurisdictions, with an unrivalled service standard. Our charging scheme is highly competitive and includes a secure mortgage register. The private and public sectors work together closely to offer an integrated one-stop shop for our clients. Lastly, we offer a neu-tral national registration prefix (M), which is highly desirable to many owners.

How strong is the government-to-government relationship? The respective governments have fos-tered a relationship for many years, and I am aware that former chief ministers are cited with great fondness by many exist-ing government officials in the Emirates. Following meetings at the end of 2011 be-tween counterparts from the Isle of Man and Dubai, we signed a Memorandum of Understanding (MoU) between the De-partment of Economic Development in Dubai and the Isle in January 2012. This is designed to underline our desire to work together for mutual benefit and will be the subject of a number of meetings during my visit to the region. We will pursue further agreements in the Middle East—the re-cently signed Double Taxation Agreement with Qatar is just one example. O

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ECONOMY

REVIEW

INSIDE 25 Back to Basics - REVIEW | 30 The Way Forward - FOCUS: Strategic Plan | 32 HE Sheikha Lubna Bint Khalid Al Qasimi, Minister of Foreign Trade of the UAE - INTERVIEW | 34 HE Sami Al Qamzi, Director General of the Dubai Department of Economic Development - INTERVIEW | 36 Fahad Al Gergawi, CEO of the Foreign Investment Office of Dubai FDI - INTERVIEW | 37 Let’s All Come Together - ROUNDTABLE: Foreign Chambers | 38 Hamad Buamim, Director General of the Dubai Chamber of Commerce & Industry - INTERVIEW | 40 Go Get ‘Em - Q&A: Business Development | 42 Free for All - FOCUS: Free Trade Zones | 44 Salma Ali Saif Saeed Bin Hareb, CEO of Jafza - INTERVIEW | 46 Mohammed Al Zarooni, Director General of DAFZ - INTERVIEW | 48 Arif Obaid Al Dehail, CEO of Trakhees - INTERVIEW | 49 Khalid Bin Kalban, Managing Director & CEO of Dubai Investments - INTERVIEW | 50 Malcolm Wall Morris, CEO of the DMCC - INTERVIEW | 51 Living Better - FORUM: Why Dubai? | 52 Mouayed Makhlouf, MENA Regional Director of the IFC, World Bank Group - INTERVIEW | 53 Mustafa Abdel-Wadood, CEO of Abraaj Capital Limited - INTERVIEW | 54 Samer Sarraf, Senior Vice-President & Country Head UAE of Amwal Al Khaleej - INTERVIEW

Built by HH Sheikh Rashid Bin Saeed Al Maktoum in 1978, the Dubai World Trade Centre was the tallest building in Dubai when completed. It plays host to companies such as Federal Express, General Motors, Johnson & Johnson, MasterCard International, Schlumberger, and Sony.

X As growth rates return to show a steady rise, Dubai’s efforts to refocus the economy toward its traditional strengths in trade, finance, and tourism have ushered in a remarkable recovery that is paving the way for sustainable, long-term growth.

Back to Basics

Although Dubai was hit hard by the global financial crisis in 2009, its economy has re-covered remarkably over the past three years. Efforts to diversify the economy and promote a business-friendly environment have led to a resurgence in foreign investment that has put the Emirate on the path to sustainable, long-term growth. In 2011, GDP reached $84.7 bil-lion, growing by 3.4%, up from the 2.8% GDP growth the Emirate registered in 2010. This trend of accelerating growth is expected to continue through the medium term, with GDP growth in 2012 predicted to reach 4.5%. This is likely to put Dubai in the leading position in the recovery of the UAE economy by 2013, with the Emirate’s predicted 2012 growth rate more than a percentage point higher than the 3.2% expected for the UAE overall. One of the factors that distinguishes Dubai from many other regional economies is its com-paratively low reliance on petroleum revenues. Although Dubai’s economy was built off the back of the oil and gas sector in the 1960s and 1970s, it now accounts for less than 2% of its GDP, and Dubai contributes less than 2% to the UAE’s total petroleum revenue, compared to more than 96% from Abu Dhabi, which gener-ates nearly half of its GDP from oil and gas. This stands in contrast to the strength of Dubai’s non-oil sector, which accounts for more than 76% of non-oil GDP in the UAE. Indeed, Dubai’s role as a regional hub for business, finance, re-tail, and tourism is one of the main reasons it ii��

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25

is expected to spearhead economic growth in the UAE in the coming years. While the petro-leum sector, fueled by rising international oil prices, has led the initial recovery in the UAE, Abu Dhabi is now approaching maximum oil production capacity, and analysts are looking to Dubai, as the region’s non-oil economic leader, for the next wave of growth that will take the country’s economy through the next decade. Prior to the global financial crisis, Dubai’s economic growth was fueled largely by its real estate and construction sectors, which account-ed for nearly 30% of GDP in 2007. At that time, Dubai’s property sector was the fastest growing in the world, with construction and real estate reaching 23% and 30% growth, respectively, in 2007. Now, as Dubai looks set to spearhead re-gional recovery with the strength of its non-oil economy, the government is making remark-able strides in promoting economic diversifi-cation and sustainable, long-term investment. Dubai has renewed its focus on being a regional hub for business and trade and working to promote growth. As Hamad Buamim, Director General of the Dubai Chamber of Commerce and Industry (DCCI), told TBY in an interview, “the main lesson learned was about stability... and [the need to] focus on achieving sustain-able growth over a longer period... the city is geared toward helping companies prosper with business-friendly laws, modern infrastructure, and a diverse and predominantly young work-force.” The success of Dubai’s efforts has been demonstrated by the extraordinary growth that the DCCI has experienced in the past few years. In 2011, the Chamber added over 10,000 new members, boosting by nearly 10% the current membership, a trend that already looks set to

continue with an additional 2,000 members having joined the organization in 1Q2012. The main drivers of growth in Dubai’s economy are now the Emirate’s traditional in-dustries of shipping and logistics, tourism and retail, manufacturing, and financial services, all of which have rebounded to their pre-crisis levels and are now leading the way toward sustainable, long-term growth. As Sami Al Qamzi, Director General of Dubai Department of Economic Development (DED), explained to TBY, “the progressive build-up of dynamism and confidence visible across our key sectors demonstrates that 2012 will energize growth in Dubai.” In addition, many developers have now resumed construction projects that were halted in 2008 and 2009, which means that, despite the hit they have taken, the construction and real estate sectors still accounted for more than 20% of overall GDP in 2011. Tourism, hospitality, and retail are some of Dubai’s largest industries, and the Emirate is often referred to as the shopping capital of the Middle East, drawing in huge numbers of shop-ping tourists from across the region and from as far afield as Eastern Europe, Africa, and South Asia. Taken all together, hospitality, along with wholesale and retail trade, accounted for nearly 34% of Dubai’s GDP in 2011. The two sectors showed strong growth in 2011, with wholesale, retail, and repairing services growing by 5.8% and the restaurant and hotel industry growing by 14.7%. The sectors look set for future growth with 9 million tourists expected to visit the ii�

1 Dubai is a candidate to host Expo 2020, under the slogan “Connecting minds, creating the future.”Source: Dubai Statistics Centre

GDP by Sector 2011

Major Exports in AED billions

WHOLESALE & RETAIL 29.0%RESTAURANTS & HOTELS 3.8%TRANSPORT, STORAGE, & COMMUNICATIONS 13.1%REAL ESTATE & BUSINESS SERVICES 12.1%FINANCE 11.3%OTHER 9.4%MANUFACTURING 13.3%CONSTRUCTION 8.0%

PEARLS, PRECIOUS STONES, & METALS 64.6BASE METALS 8.2PREPARED FOOD, BEVERAGES, & TOBACCO 5.4PLASTICS & RUBBER 4.3MINERAL PRODUCTS 3.8OTHER 11.8

Growth Rates by Sector as a percentage20102011

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