A little known Gulf company led by a young executive achieved global status despite the odds, becoming one of the world's largest ports operators and an innovative developer of massive projects that helped shape modern Dubai.
A notice appeared on October 26, 1987 in a daybook sent to reporters in Manhattan: "Sultan bin Sulayem, chairman of Jebel Ali Free Zone at Dubai and trade delegation to offer American business leaders a new perspective on the Middle East," it said.
It was one of the first of many visits to the US and other western countries in the late 1980s and 1990s to tell the Dubai story.
The story was different then: Dubai was not known as a safe haven for business in the Middle East and Dubai Government officials constantly had to address the region's political instability. The Iran-Iraq war had just ended in the late 1980s, and the first Gulf War was to follow.
Little could they have known that 20 years later, what started as a small ports operation would eventually morph into a large conglomerate with property and financial assets spanning the globe.
The equation changed dramatically following the first Gulf War, when a global boom in trade and lending boosted the profits of port operators in Dubai and helped usher in the emirate's rapid rebirth into a thriving hub for business, finance and property development.
Convinced, perhaps, by the success of the ports and the elevated ambitions Dubai's leaders, international lenders and investors eagerly bet on Dubai's ascendancy.
In doing so, they played a central role in incubating a network of companies that in 2006 would be placed under the umbrella of Dubai World, the holding company which this week said it is seeking a standstill agreement from creditors as it struggles to restructure.
The kernel of what was to become Dubai World lay in its ports. Before 1991, Dubai had competing government-owned ports at Jebel Ali, west of the city centre, and the older Port Rashid near the Dubai Creek. That April, however, the Government announced that it would merge the two operators to form the Dubai Ports Authority (DPA), with Mr bin Sulayem as the chairman.
The Government invested heavily in ports throughout the 1990s and spent time and money expanding and promoting them to international firms needing a foothold in the Gulf. A raft of companies set up there, from Japanese car makers to granite tile traders, and Dubai's ports quickly became major stopover points for international shippers. Container volumes grew into the millions and Dubai by 1998 climbed up the global rankings to become one of the 10 busiest ports in the world.
Spurred on by growing competition from new ports in Aden, Yemen and Salalah in Oman, in 1999 the DPA made its first foray outside of the UAE with an agreement to manage ports in Beirut. Later that year, the DPA signed a similar agreement to run the Jeddah port. In 2000, it took over operations in Djibouti and in 2003 it moved into Visakhapatnam in India. Those foreign ports were run by a subsidiary called Dubai Ports International.
In 2001, the DPA was merged with Dubai Customs and the Jebel Ali Free Zone Authority to form the Ports, Customs and Free Zone Corporation. It was also looking to expand its international footprint, beginning a process that led to it becoming one of the world's largest port operators.
It acquired ports in Romania and then in China and Korea in 2004, followed by deals to operate ports in Argentina, Hong Kong, Russia, Australia, Belgium, France, Canada and the UK, among many other countries. Then DP World was founded in 2005 from the merger of all of Dubai's port operations.
Meanwhile, with the backing of the Dubai Government, Mr bin Sulayem began to expand into property, a business his family had been involved in for decades. In 2001, he had became the chairman of Dubai Palm Developers, a company that would later be folded into Nakheel, which would in turn become part of Dubai World.
The company was to develop Dubai's now iconic Palm islands - Palm Jumeirah, Palm Jebel Ali and Palm Deira - out of sand dredged from the Gulf to make way for bigger ships at the ports. Palm Jumeirah alone cost more than $12bn to build. Two years later, Nakheel launched the $14bn The World project, a collection of artificial islands in the shape of a world map off Dubai's coast.
Istithmar, the private equity and venture capital investment firm formed in 2003 would also become part of Dubai World. Istithmar, now known as Istithmar World, owns stakes in the luxury retailer Barneys New York and Cirque du Soleil, as well as Kerzner International, the hotels operator, and Standard Chartered Bank.
In March 2006 Dubai World was formed as a combination of three main government-owned firms: Nakheel, Istithmar and DP World. By then, DP World had acquired P&O, a major operator of ports in Asia and the US, as well as UK ferry services, and was bigger than ever.
Nakheel was making speedy progress on its Palm Islands and The World projects and had just issued a $3.52bn Islamic bond to help finance further construction. And the Dubai Multi Commodities Centre, a government-owned company that was responsible for the Jumeirah Lakes Towers development across from the Dubai Marina, was doing a brisk business. Leisurecorp, a global developer of leisure properties, was founded the same year.
It was the middle of the Dubai boom and Dubai World and its companies borrowed heavily to keep the expansion going, amassing roughly $24.27bn of debt, by an estimate from Deutsche Bank, and about $60bn in total consolidated liabilities.
The global economic crisis and the end of the property boom last year dragged prices down by up to 50 per cent in some places and left Dubai World's property companies short of revenues just as the needed cash to pay off their borrowings. Speculation earlier this year centered on Dubai World seeking to refinance its debts, but with the deadline for Nakheel's sukuk repayment approaching, sentiment shifted towards the idea that they would be paid off on time.
While DP World continues to make money despite a fall-off in global trade, the changing economic winds put Dubai World's property firms - Nakheel, the DMCC and Limitless, which was founded in 2005 - in a difficult financial position. That led in part to the announcement this week that Dubai World would seek a six-month reprieve on debt payments pending a restructuring.
@Email:afitch@thenational.ae
House-hunting
Top 10 locations for inquiries from US house hunters, according to Rightmove
- Edinburgh, Scotland
- Westminster, London
- Camden, London
- Glasgow, Scotland
- Islington, London
- Kensington and Chelsea, London
- Highlands, Scotland
- Argyll and Bute, Scotland
- Fife, Scotland
- Tower Hamlets, London
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The view from The National
Ahmed Raza
UAE cricket captain
Age: 31
Born: Sharjah
Role: Left-arm spinner
One-day internationals: 31 matches, 35 wickets, average 31.4, economy rate 3.95
T20 internationals: 41 matches, 29 wickets, average 30.3, economy rate 6.28
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.”
The Cairo Statement
1: Commit to countering all types of terrorism and extremism in all their manifestations
2: Denounce violence and the rhetoric of hatred
3: Adhere to the full compliance with the Riyadh accord of 2014 and the subsequent meeting and executive procedures approved in 2014 by the GCC
4: Comply with all recommendations of the Summit between the US and Muslim countries held in May 2017 in Saudi Arabia.
5: Refrain from interfering in the internal affairs of countries and of supporting rogue entities.
6: Carry out the responsibility of all the countries with the international community to counter all manifestations of extremism and terrorism that threaten international peace and security
Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
Rating: 3/5
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
TOURNAMENT INFO
Fixtures
Sunday January 5 - Oman v UAE
Monday January 6 - UAE v Namibia
Wednesday January 8 - Oman v Namibia
Thursday January 9 - Oman v UAE
Saturday January 11 - UAE v Namibia
Sunday January 12 – Oman v Namibia
UAE squad
Ahmed Raza (captain), Rohan Mustafa, Mohammed Usman, CP Rizwan, Waheed Ahmed, Zawar Farid, Darius D’Silva, Karthik Meiyappan, Jonathan Figy, Vriitya Aravind, Zahoor Khan, Junaid Siddique, Basil Hameed, Chirag Suri
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 247hp at 6,500rpm
Torque: 370Nm from 1,500-3,500rpm
Transmission: 10-speed auto
Fuel consumption: 7.8L/100km
Price: from Dh94,900
On sale: now
Our legal advisor
Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.
Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation.
Education: Sagesse University, Beirut, Lebanon, in 2005.
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
Correspondents
By Tim Murphy
(Grove Press)
At a glance - Zayed Sustainability Prize 2020
Launched: 2008
Categories: Health, energy, water, food, global high schools
Prize: Dh2.2 million (Dh360,000 for global high schools category)
Winners’ announcement: Monday, January 13
Impact in numbers
335 million people positively impacted by projects
430,000 jobs created
10 million people given access to clean and affordable drinking water
50 million homes powered by renewable energy
6.5 billion litres of water saved
26 million school children given solar lighting
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10 tips for entry-level job seekers
- Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
- Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
- Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
- For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
- Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
- Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
- Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
- Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
- Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
- Be professional and patient. Always be professional with whoever you are interacting with throughout your search process, this will be remembered. You need to be patient, dedicated and not give up on your search. Candidates need to make sure they are following up appropriately for roles they have applied.
Arda Atalay, head of Mena private sector at LinkedIn Talent Solutions, Rudy Bier, managing partner of Kinetic Business Solutions and Ben Kinerman Daltrey, co-founder of KinFitz
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
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JAPANESE GRAND PRIX INFO
Schedule (All times UAE)
First practice: Friday, 5-6.30am
Second practice: Friday, 9-10.30am
Third practice: Saturday, 7-8am
Qualifying: Saturday, 10-11am
Race: Sunday, 9am-midday
Race venue: Suzuka International Racing Course
Circuit Length: 5.807km
Number of Laps: 53
Watch live: beIN Sports HD
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BUNDESLIGA FIXTURES
Saturday, May 16 (kick-offs UAE time)
Borussia Dortmund v Schalke (4.30pm)
RB Leipzig v Freiburg (4.30pm)
Hoffenheim v Hertha Berlin (4.30pm)
Fortuna Dusseldorf v Paderborn (4.30pm)
Augsburg v Wolfsburg (4.30pm)
Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)
Sunday, May 17
Cologne v Mainz (4.30pm),
Union Berlin v Bayern Munich (7pm)
Monday, May 18
Werder Bremen v Bayer Leverkusen (9.30pm)
