Ireland and the UAE: a tale of two crises



As an Irish citizen living in Dubai, I have often been struck by the similarities between the Republic of Ireland and the UAE: comparable populations (between 4 million and 5 million), living alongside a dominant neighbour (Britain and Saudi Arabia), and both living off their wits as commercial entrepreneurs in a competitive global business environment. The histories of Ireland and the UAE also demonstrate the importance of migrant labour, but in rather different ways. For many years after independence 90 years ago, Ireland's biggest export was its people. Hundreds of thousands of Irish left the country to seek their fortunes abroad, as my parents did in the 1940s when they went to England, and helped sustain their families by sending some of their hard-earned money back - what we call "remittances".

The Emirates, on the other hand, has been a magnet for migrant labour since its inception in 1971. The armies of workers that helped build Dubai and Abu Dhabi into world-class cities are the direct equivalent of the Irish navvies who rebuilt Britain after the Second World War. The UAE workers, too, have helped sustain their families at home by sending cash back to Kerala, Karachi and Guangzhou. The pattern changed in Ireland in the early 1990s, when rising standards of living at home reversed the labour outflow and instead made Ireland a net importer of people. There is much historical debate over the reasons for this change. British sceptics point to the generosity of the EU, which subsidised the Irish economy through grants; with the Irish responding that European handouts were only part of the story. Innate entrepreneurial endeavour and an enlightened tax regime (another similarity with the UAE) played just as important a part, they would argue in Dublin.

Whatever the reason, the past 20 years were boom-time for Ireland. The "Celtic tiger" showed the highest rates of growth in Europe and made many of its citizens wealthy. This coincided with the oil-fuelled expansion of the UAE, which had a similar effect on the lives of nationals and expatriates. The good times rolled, in Galway as they did in Garhood. Until last year. The first signs of weakness in the Irish economy came last autumn, when the full extent of the nation's reliance on property and construction became apparent. Expansion had been fuelled by a 10-year property bubble that made Dublin one of the most expensive cities in the world. The Irish banking system, in turn, was reliant on these property assets and when the bubble burst the government had to step in with the by-now familiar techniques of credit-crunch management - bailouts, nationalisation and voluntary bankruptcy.

Last week, the Irish government announced the most savage budget in its recent history. What remains of the banking sector has been reined in, exploding national debt has been tackled by ruthless public-sector cutbacks, and the lenient tax regime, the central plank of Ireland's long run of economic success, reversed, with jumps in personal and corporate rates. The entrepreneurial Irish middle classes are groaning under the weight of the enormous debts they and their children have inherited, and perhaps it will not be long before they send their sons and daughters abroad again to earn a living for them. The Celtic tiger has become the sick man of Europe, even if the illness may turn out to be less than fatal.

Compare the Irish reaction to the global economic crisis with the initiatives of the UAE. Sure, property prices in Dubai and Abu Dhabi have fallen significantly, and certainly the banking system has felt the strain. There have also been injections of liquidity into the system, most notably the US$10 billion (Dh36.73bn) government-backed bond issue for Dubai. And there are forecasts that the population will shrink as migrants head home.

The great difference, of course, is the bank of capital that the UAE has built up during the past decade of historically high oil prices. This has provided a cushion of financial security. The Irish exchequer has a black hole of billions of euros at its centre, while the UAE has a substantial cash pile. Some economic forecasters are looking at a five-year recession for Ireland; even the gloomiest of analysts believes the UAE will bounce back much faster than that.

There is a final similarity, which will stand both countries in good stead in the challenging times to come. Both the UAE and Ireland remain enthusiastic participants in the great globalisation movement, which can only help the world economy recover from its troubles. Ireland is committed to playing its role in Europe and the broader international economy, just as the UAE is an active participant in the Gulf Co-operation Council and a leader of the Middle-Eastern business community. They must surely both emerge as stronger countries.

fkane@thenational.ae

Another way to earn air miles

In addition to the Emirates and Etihad programmes, there is the Air Miles Middle East card, which offers members the ability to choose any airline, has no black-out dates and no restrictions on seat availability. Air Miles is linked up to HSBC credit cards and can also be earned through retail partners such as Spinneys, Sharaf DG and The Toy Store.

An Emirates Dubai-London round-trip ticket costs 180,000 miles on the Air Miles website. But customers earn these ‘miles’ at a much faster rate than airline miles. Adidas offers two air miles per Dh1 spent. Air Miles has partnerships with websites as well, so booking.com and agoda.com offer three miles per Dh1 spent.

“If you use your HSBC credit card when shopping at our partners, you are able to earn Air Miles twice which will mean you can get that flight reward faster and for less spend,” says Paul Lacey, the managing director for Europe, Middle East and India for Aimia, which owns and operates Air Miles Middle East.

AVOID SCAMMERS: TIPS FROM EMIRATES NBD

1. Never respond to e-mails, calls or messages asking for account, card or internet banking details

2. Never store a card PIN (personal identification number) in your mobile or in your wallet

3. Ensure online shopping websites are secure and verified before providing card details

4. Change passwords periodically as a precautionary measure

5. Never share authentication data such as passwords, card PINs and OTPs  (one-time passwords) with third parties

6. Track bank notifications regarding transaction discrepancies

7. Report lost or stolen debit and credit cards immediately

The specs

Engine: Two permanent-magnet synchronous AC motors

Transmission: two-speed

Power: 671hp

Torque: 849Nm

Range: 456km

Price: from Dh437,900 

On sale: now

What is a robo-adviser?

Robo-advisers use an online sign-up process to gauge an investor’s risk tolerance by feeding information such as their age, income, saving goals and investment history into an algorithm, which then assigns them an investment portfolio, ranging from more conservative to higher risk ones.

These portfolios are made up of exchange traded funds (ETFs) with exposure to indices such as US and global equities, fixed-income products like bonds, though exposure to real estate, commodity ETFs or gold is also possible.

Investing in ETFs allows robo-advisers to offer fees far lower than traditional investments, such as actively managed mutual funds bought through a bank or broker. Investors can buy ETFs directly via a brokerage, but with robo-advisers they benefit from investment portfolios matched to their risk tolerance as well as being user friendly.

Many robo-advisers charge what are called wrap fees, meaning there are no additional fees such as subscription or withdrawal fees, success fees or fees for rebalancing.

Mia Man’s tips for fermentation

- Start with a simple recipe such as yogurt or sauerkraut

- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.

- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.

- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.

 

THE BIG THREE

NOVAK DJOKOVIC
19 grand slam singles titles
Wimbledon: 5 (2011, 14, 15, 18, 19)
French Open: 2 (2016, 21)
US Open: 3 (2011, 15, 18)
Australian Open: 9 (2008, 11, 12, 13, 15, 16, 19, 20, 21)
Prize money: $150m

ROGER FEDERER
20 grand slam singles titles
Wimbledon: 8 (2003, 04, 05, 06, 07, 09, 12, 17)
French Open: 1 (2009)
US Open: 5 (2004, 05, 06, 07, 08)
Australian Open: 6 (2004, 06, 07, 10, 17, 18)
Prize money: $130m

RAFAEL NADAL
20 grand slam singles titles
Wimbledon: 2 (2008, 10)
French Open: 13 (2005, 06, 07, 08, 10, 11, 12, 13, 14, 17, 18, 19, 20)
US Open: 4 (2010, 13, 17, 19)
Australian Open: 1 (2009)
Prize money: $125m