The tide of tourists from the West flooding into Dubai's flashy malls has ebbed since the global economic downturn started to bite.
Large companies such as Al Ghurair Retail, which has several of the biggest shopping names in its stable, have been hard hit. The cash that foreign visitors splashed out in its stores helped propel the firm's rapid expansion.
"For our retail businesses in the big, touristy malls, 50 per cent of our trade comes from tourists, and that's dwindled to 10 per cent since the recession started," says Keith Flanagan, the general manager of Al Ghurair Retail, which manages brands such as Springfield clothing stores.
The drop in tourists was partly responsible for a sharp decline in retail sales in the Emirates by as much as 40 per cent last year.
"Dubai has been taking a whacking across Europe recently in the press," he says. "Maybe the Government has to push Dubai more as an international destination once again."
Launching advertising campaigns to promote tourism in Dubai should be at the top of the Government's in-tray this year as it looks to spur growth in the private sector after a sluggish past 12 months, Mr Flanagan says.
On the whole, last year would be best forgotten for the private sector. Projects were cancelled, sales slowed, credit dried up and job losses mounted as investor and consumer confidence crumbled.
The global financial crisis was a significant setback to strategic plans to raise the value of the private sector, which is viewed as the key to weaning the economy off a reliance on oil and gas.
The Government pins its hopes on a more expansive private sector as it looks to whittle down the contribution to the economy of the hydrocarbon sector to approximately 20 per cent in the next 10 to 15 years.
Reaching this target will first involve taking further steps to reinvigorate the flagging private sector.
With many businesses struggling for cash, ensuring banks reduce interest rates should be a priority, says Colin Smith, the general manager of Abu Dhabi Vegetable Oil.
"All of the banks charge rates well above the official interbank rate as they try to recover from the past," he says. "Most businesses use working capital and that's funded from banks, and so we have to absorb that extra cost."
The price of borrowing rose steadily during the financial crisis as banks passed on the extra costs of funding they incurred to customers. In an effort to stimulate lending, the Central Bank last year rejigged the system that set the Emirates interbank offered rate (Eibor). Despite the three-month Eibor rate dropping to 1.9 per cent from 4.8 per cent in October 2008, customers and businesses have continued to complain that interest rates charged by banks are too high.
Ensuring any annual rental increases in economic free zones are kept to a minimum is another measure that would help relieve the strain on cash-strapped firms, says Mr Smith.
He is unhappy the rent on his factory in Mina Zayed in Abu Dhabi climbed by 10 per cent this year, above the annual rental cap of 5 per cent. He says he managed to negotiate the increase down from an even higher proposed rental hike.
Relaxing rules on foreign ownership of companies should also be a top priority for the Government if it wants to encourage more private companies to establish themselves in the country, says Gisele Stolz, the business development manager at the French Business Group in Abu Dhabi.
One of the biggest stumbling blocks for any foreign firms considering a move to the UAE is the limit to a maximum of 49 per cent ownership of any enterprise they establish.
Ms Stolz, whose group has 225 members in Abu Dhabi including the French oil major Total, believes some French companies who want to be based in the capital find the prospect of taking on an Emirati partner troubling.
The Government is implementing a new companies law, which would allow foreigners 100 per cent ownership of their firms. Exceptions to the current regulations are at the free zones, where foreign companies enjoy complete ownership.
Easing import duty on re-exported goods between free zones and the rest of the UAE would help French businesses in the UAE, says Ms Stolz.
The Mohammed Bin Rashid Establishment for SME Development, which supports Dubai's burgeoning small business sector and budding entrepreneurs, highlights reforming credit information regulations as an important step it would like the Government to take towards improving credit transparency.
"Greater transparency in credit information will enable greater access to finance and liquidity, especially for SMEs," says a spokesman for the organisation.
The foundation also supports measures to reform bankruptcy laws in the country. Officials are in the process of updating insolvency regulations, which remain largely undeveloped.
Last year saw the Government take steps to help revive the private sector. Dubai received a total of US$20 billion (Dh73.46bn) in support funding from Abu Dhabi, its banks and the Central Bank to help ease a cash crunch in the emirate. The Government also abolished the Dh150,000 minimum capital requirement to launch an SME, while a draft SME law is expected to be put before Cabinet for approval in June.
But if this year is to see the private sector rebound further from a challenging period, more initiatives may be needed to stimulate increased growth.
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Gearbox: 10-speed automatic
Power: 405hp at 5,500rpm
Torque: 562Nm at 3,000rpm
Fuel economy, combined: 11.2L/100km
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The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
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The biog
Alwyn Stephen says much of his success is a result of taking an educated chance on business decisions.
His advice to anyone starting out in business is to have no fear as life is about taking on challenges.
“If you have the ambition and dream of something, follow that dream, be positive, determined and set goals.
"Nothing and no-one can stop you from succeeding with the right work application, and a little bit of luck along the way.”
Mr Stephen sells his luxury fragrances at selected perfumeries around the UAE, including the House of Niche Boutique in Al Seef.
He relaxes by spending time with his family at home, and enjoying his wife’s India cooking.
Company name: Farmin
Date started: March 2019
Founder: Dr Ali Al Hammadi
Based: Abu Dhabi
Sector: AgriTech
Initial investment: None to date
Partners/Incubators: UAE Space Agency/Krypto Labs
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
Match info
Uefa Champions League Group H
Juventus v Valencia, Tuesday, midnight (UAE)
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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69 - Justin Rose (ENG), Thomas Detry (BEL), Francesco Molinari (ITA), Danny Willett (ENG), Li Haotong (CHN), Matthias Schwab (AUT)
Results
1. Mathieu van der Poel (NED) Alpecin-Fenix - 3:45:47
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3. Michael Morkov (DEN) Deceuninck-QuickStep
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5. Elia Viviani (ITA) Cofidis
6. Tadej Pogacar (SLO UAE Team Emirates
7. Anthony Roux (FRA) Groupama-FDJ
8. Chris Harper (AUS) Jumbo-Visma - 0:00:03
9. Joao Almeida (POR) Deceuninck-QuickStep
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PSL FINAL
Multan Sultans v Peshawar Zalmi
8pm, Thursday
Zayed Cricket Stadium, Abu Dhabi
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Uefa Champions League Group B
Barcelona v Tottenham Hotspur, midnight
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
India squads
Test squad against Afghanistan: Rahane (c), Dhawan, Vijay, Rahul, Pujara, Karun, Saha, Ashwin, Jadeja, Kuldeep, Umesh, Shami, Pandya, Ishant, Thakur.
T20 squad against Ireland and England: Kohli (c), Dhawan, Rohit, Rahul, Raina, Pandey, Dhoni, Karthik, Chahal, Kuldeep, Sundar, Bhuvneshwar, Bumrah, Pandya, Kaul, Umesh.
ODI squad against England: Kohli (c), Dhawan, Rohit, Rahul, Shreyas, Rayudu, Dhoni, Karthik, Chahal, Kuldeep, Sundar, Bhuvneshwar, Bumrah, Pandya, Kaul, Umesh
The Abu Dhabi Awards explained:
What are the awards? They honour anyone who has made a contribution to life in Abu Dhabi.
Are they open to only Emiratis? The awards are open to anyone, regardless of age or nationality, living anywhere in the world.
When do nominations close? The process concludes on December 31.
How do I nominate someone? Through the website.
When is the ceremony? The awards event will take place early next year.
Yemen's Bahais and the charges they often face
The Baha'i faith was made known in Yemen in the 19th century, first introduced by an Iranian man named Ali Muhammad Al Shirazi, considered the Herald of the Baha'i faith in 1844.
The Baha'i faith has had a growing number of followers in recent years despite persecution in Yemen and Iran.
Today, some 2,000 Baha'is reside in Yemen, according to Insaf.
"The 24 defendants represented by the House of Justice, which has intelligence outfits from the uS and the UK working to carry out an espionage scheme in Yemen under the guise of religion.. aimed to impant and found the Bahai sect on Yemeni soil by bringing foreign Bahais from abroad and homing them in Yemen," the charge sheet said.
Baha'Ullah, the founder of the Bahai faith, was exiled by the Ottoman Empire in 1868 from Iran to what is now Israel. Now, the Bahai faith's highest governing body, known as the Universal House of Justice, is based in the Israeli city of Haifa, which the Bahais turn towards during prayer.
The Houthis cite this as collective "evidence" of Bahai "links" to Israel - which the Houthis consider their enemy.
