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VISION 2030 Abu Dhabi

Sovereign Wealth Funds Green Energy Property Development The Private Sector

Government Oil & Gas Construction Emiratisation

Finance SMEs Tourism Education

C.E.O. FINANCIAL


Contents

C.E.O. FINANCIAL

Vision 2030

2

Financial Sector

63

Macroeconomic Statistics of the UAE Abu Dhabi Overview Abu Dhabi Government Structure Sovereign Wealth Funds The Dubai Distinction History, Culture and Society in Abu Dhabi

4 8 12 14 18 20

Vision 2030 quotes on Capital Markets Abu Dhabi Securities Market Vision 2030 quotes on Banking Banking in Abu Dhabi

65 66 68 70

Physical Infrastructure Vision 2030 quotes on infrastructure Plan 2030 Transport Abu Dhabi Aviation

73

Foreign Direct Investment

Attracting International Investors Vision 2030 quotes on FDI ZonesCorp – Attracting Industrial FDI

23 24 25 26

Abu Dhabi Business Guide Establishing a business in Abu Dhabi Procedures to obtain a trade license Types of commercial companies

29 30 31 32

The Abu Dhabi Joint Venture IT Infrastructure Audit & Advisory Streamlined Government Services ADNEC

36 38 40 42 44

Energy

47

Vision 2030 quotes on oil & gas Peak Oil Adding value to hydrocarbons The case for renewable energy The World Future Energy Summit Masdar Nuclear power

49 51 53 54 56 60 62

Editor:

Grant Leech

Director:

Christopher Boucher

Sub-editor:

Victoria Kelly

Contributor:

Grace Hughes

Head of Design:

Anton Lebed

Property Development: The opening of Marina Square, Reem Island Construction: Joint ventures in construction Opportunity Knocks

75 76 77 78

82 90 92

SMEs, Emiratisation, Education & the Private Sector

101

The Khalifa Fund Tawteen Third level education Media for the Arab world

104 110 114 118

Tourism

121

Vision 2030 tourism quotes Travellers welcome Sheraton Hotel Aloft Hotel Al Raha Beach Hotel

123 124 128 130 134

Copyright 2010. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, without the prior written premission of CEO Financial Ltd.

CEO Financial would like to thank the Abu Dhabi Tourism Authority (ADTA) for providing some of the photos used in this publication.

Whilst every effort has been made to ensure the accuracy of the information contained in this

Produced by:

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Vision 2030: “A continuation of the Grand Vision of Sheikh Zayed”

In 2006, His Highness Sheikh Mohammed bin Zayed Al Nahyan, Crown prince of Abu Dhabi and Chairman of the Executive Council, mandated the General Secretariat of the Executive Council, the Abu Dhabi Council for Economic Development and the Department of Economic Development to develop a long-term economic vision for the Emirate. The Abu Dhabi Economic Vision 2030, a 142 page masterplan, was the result. This volume is an analysis of that document. Having conducted more than 60 interviews with leading chief executives responsible for the implementation of the policy document on the ground in Abu Dhabi, CEO Financial has gained a unique insight into the ways in which the vision is being brought to life in actuality. Comprised of 9 “pillars”, 4 “key priorities” and 7 areas of economic “policy focus”, Abu Dhabi’s Economic Vision 2030 represents one of the most cohesive and comprehensive development plans of modern times. Spearheaded by the Department of Economic Development, Abu Dhabi is working in unison towards a blueprint which encompasses social, financial and infrastructural goals which will set the scene for an anticipated two-fold increase in population over the next two decades.


The Economic Vision 2030 was collated with reference to three distinct benchmark economies, each chosen for specific reasons. The three benchmark countries on which Abu Dhabi measures itself within Vision 2030 are; Ireland – prior to its current troubles brought on by the economic crisis, Ireland was very successful at developing an open and diversified knowledge-based economy. Its experience and success in attracting foreign direct investment was also noteworthy. Norway – rich in oil and gas like Abu Dhabi, however, diversified in renewables to the point where it does not rely on its hydrocarbons for domestic energy generation. Norway is also notable for its local economic development and its disciplined fiscal policies. New Zealand – New Zealand has had a good deal of success in developing a strong export-based economy, one of Abu Dhabi’s aspirations.

The following organisations were used as consultants: -International Development Ireland (IDI) -Innovation Norway (IN) -New Zealand Trade and Enterprise (NZTE) In order to organise Vision 2030 into palatable sections which can be easily accessed, we have organised this volume into sections containing different industrial sectors. Each section is introduced with the pillars, key priorities and areas of economic policy focus relevant to its industrial sector. All parts of Vision 2030 are identifiable by blue lines and blue introductory pages outlining the main points. Thereafter follows a series of articles and interviews with the leading chief executives of the Emirate. The Secretary-General of the Abu Dhabi Executive Council described Vision 2030 as a “significant milestone in Abu Dhabi’s ongoing commitment to greater transparency and accountability.”

According to Vision 2030, advice and opinion was “sought from economic development experts in each of these countries whose exemplary path of economic transformation Abu Dhabi wishes to emulate”.

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UAE Macroeconomic Statistics GDP (purchasing power parity):

4

$201.4 billion (2009 est.) country comparison to the world: 52 $208.7 billion (2008 est.) $194.2 billion (2007 est.)

GDP (official exchange rate):

$231.3 billion (2009 est.)

GDP - real growth rate:

-3.5% (2009 est.) country comparison to the world: 169 7.4% (2008 est.) 6% (2007 est.)

GDP - per capita (PPP):

$42,000 (2009 est.) country comparison to the world: 17 $45,200 (2008 est.) $43,700 (2007 est.)

GDP - composition by sector:

agriculture: 1.1% industry: 48.6% services: 50.2% (2009 est.)

Labour force:

3.168 million country comparison to the world: 99 note: expatriates account for about 89% of the work force (2009 est.)

Labour force - by occupation:

agriculture: 7% industry: 15% services: 78% (2000 est.)

Unemployment rate:

2.4% (2001) country comparison to the world: 18

Population below poverty line:

19.5% (2003)

Household income or consumption by percentage share:

lowest 10%: NA% highest 10%: NA%

Investment (gross fixed):

28.9% of GDP (2009 est.) country comparison to the world: 28

Budget:

28.9% of GDP (2009 est.) country comparison to the world: 28


Public debt:

47.2% of GDP (2009 est.) country comparison to the world: 52 40.7% of GDP (2008 est.)

Inflation rate (consumer prices):

1.5% (2009 est.) country comparison to the world: 53 15.8% (2008 est.)

Central bank discount rate:

NA% (31 December 2008)

Stock of money:

$NA (31 December 2008) $49.5 billion (31 December 2007)

Stock of quasi money:

$NA (31 December 2008) $104.6 billion (31 December 2007)

Stock of domestic credit:

$NA (31 December 2008) $155.4 billion (31 December 2007)

Market value of publicly traded shares:

$97.85 billion (31 December 2008) country comparison to the world: 33 $224.7 billion (31 December 2007) $138.5 billion (31 December 2006)

Agriculture - products:

Industries:

Industrial production growth rate:

Electricity - production:

dates, vegetables, watermelons, poultry, eggs, dairy products, fish

petroleum and petrochemicals, fishing, aluminium, cement, fertilisers, commercial ship repair, construction materials, some boat building, handicrafts, textiles l-6.7% (2009 est.) country comparison to the world: 118

71.54 billion kWh (2007 est.) country comparison to the world: 39

Electricity - consumption:

65.98 billion kWh (2007 est.) country comparison to the world: 39

Electricity - exports:

0 kWh (2008 est.)

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6

Electricity - imports:

0 kWh (2008 est.)

Oil - production:

3.046 million bbl/day (2008 est.) country comparison to the world: 8

Oil - consumption:

463,000 bbl/day (2008 est.) country comparison to the world: 33

Oil - exports:

2.7 million bbl/day (2007 est.) country comparison to the world: 3

Oil - imports:

192,900 bbl/day (2007 est.) country comparison to the world: 48

Oil - proved reserves:

97.8 billion bbl (1 January 2009 est.) country comparison to the world: 6

Natural gas - production:

50.24 billion cu m (2008 est.) country comparison to the world: 18

Natural gas - consumption:

59.42 billion cu m (2008 est.) country comparison to the world: 13

Natural gas - exports:

7.567 billion cu m (2008 est.) country comparison to the world: 24

Natural gas - imports

16.75 billion cu m (2008 est.) country comparison to the world: 15

Natural gas - proved reserves:

6.071 trillion cu m (1 January 2009 est.) country comparison to the world: 7

Current account balance:

$2.558 billion (2009 est.) country comparison to the world: 33 $22.31 billion (2008 est.)

Exports:

$174 billion (2009 est.) country comparison to the world: 21 $239.2 billion (2008 est.)


Exports - commodities:

crude oil 45%, natural gas, reexports, dried fish, dates

Exports - partners:

Japan 26.5%, South Korea 10.9%, India 10.7%, Iran 7.5%, Thailand 6.1% (2008)

Imports:

$141 billion (2009 est.) country comparison to the world: 23 $176.3 billion (2008 est.)

Imports - commodities:

machinery and transport equipment, chemicals, food

Imports - partners:

China 12.9%, India 12%, US 8.6%, Germany 6.4%, Japan 6%, Turkey 4.4%, Italy 4.2% (2008)

Reserves of foreign exchange and gold:

$33.7 billion (31 December 2009 est.) country comparison to the world: 31 $31.69 billion (31 December 2008 est.)

Debt - external:

$128.6 billion (31 December 2009 est.) country comparison to the world: 30 $134.7 billion (31 December 2008 est.)

Stock of direct foreign investment at home:

$67.69 billion (31 December 2009 est.) country comparison to the world: 45 $62.69 billion (31 December 2008 est.)

Stock of direct foreign investment abroad:

$30.95 billion (31 December 2009 est.) country comparison to the world: 33 $28.95 billion (31 December 2008 est.)

Exchange rates:

Emirati dirhams (AED) per US dollar - 3.673 (2009), 3.6725 (2008), 3.6725 (2007), 3.6725 (2006), 3.6725 (2005) note: officially pegged to the US dollar since February 2002

*based on information from the CIA

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Abu Dhabi Overview

Entering the Abu Dhabi market Abu Dhabi is a land of opportunity at a time when opportunity is scarce. There is much fertile soil for the international business person now in the Emirate. At a time of scarce capital globally, a viable proposal and the commitment to see a venture through from conception to fruition on the ground in Abu Dhabi can certainly produce results for those brave enough to enter the market for the long-term. Anecdotal evidence suggests that the very nature of Abu Dhabi makes the theory of remote control over business interests more difficult than it may be in other markets. In order to truly take advantage of the potential that the Emirate presents, one must commit to the very sand itself by resolving to take a long term view and actually establish a physical presence there. The first pre-requisite of success therefore, must be to go there, get a sense of the place, get a feel for the viability of one’s proposal, and most importantly, establish relationships with those on the ground and in the know. It can be difficult to acclimatise to a business environment which is under no pressure of time. Abu Dhabi does not operate under the constant feeling of urgency that drives the Western business model. It has always taken its time, and now its time has come.

Domestic Business Environment The ambitious principles of the government’s Economic Vision 2030 have engendered a spirit of

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unity and common purpose. Abu Dhabi’s leadership has laid down a road-map for a bright future. The initiatives that Vision 2030 has identified will be fuelled by the masses of oil receipts that benefit the Emirate. Indeed, the fact that the Government of Abu Dhabi is not burdened by the short-term concerns that democratic governance necessitates surely frees their hand in mapping out such broad development. It must be understood from the outset, that the lines that separate the public from private sector in Abu Dhabi are not drawn in the European mould. The nature of this oil-based economy dictates that it is the Government that holds the liquidity and therefore there are a great many branches of Government, both wholly-owned and semi-state, that cross into territories that would normally be the remit of the private sector. In turn, the limited private sector that does exist, exists to serve the requirements and the interests of the massive public infrastructure.

Leadership The residents of Abu Dhabi, both indigenous and foreign, appear to be fully in support of, appreciative of, and in spirit at least, in the service of, the Government. There is a cohesive Government and business community, moving in unison, in one direction under the auspices of the Al Nahyan Ruling Family. Sheikh Zayed, the late founder of the United Arab Emirates is a much loved figure. His image adorns

many offices and public spaces, along with those of the sons who continue the dynasty today; His Highness Sheikh Khlaifa bin Zayed Al Nahyan, the President of the UAE and Ruler of Abu Dhabi, and His Highness Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi. The Al Nahyan family are widely regarded as benevolent and visionary rulers. Inhabitants of Abu Dhabi are happy to speak of their many virtues. From the outsider’s perspective, it seems that this respect and deference has engendered a kind of cohesion and common purpose throughout the business community that has created momentum. The Government’s objective is to become one of the top five governments in the world. It has used Vision 2030 as the catalyst to put Abu Dhabi on a sustainable path “towards an ideal economy”, as the Department of Economic Development’s refrain suggests.

Oil & the need for diversification We live in a world obsessed with fluctuating oil prices, the concept of peak oil and ways in which to wean ourselves off the oil addiction. Abu Dhabi, one of the leading providers of hydrocarbons in the world, has come up with a feasible plan which, pending the accuracy and steadfastness of its implementation, should see the Emirate emerge as a leading light of the post-hydrocarbon age. This, more than anything, is what Vision 2030 is about. If one is to analyse the economy of Abu Dhabi having removed oil from the equation, a very different picture is painted. Due to the finite nature

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Fully aware of the need to diversify, the leadership of the Emirate has, in Vision 2030, identified ‘national champions’; sectors and areas for development which allow the Emirate to take advantage of its innate strengths.

Abu Dhabi Economic Vision 2030

of the hydrocarbon reserves, diversification is an imperative for Abu Dhabi.

When oil revenues are removed from the fiscal balance, Abu Dhabi’s comfortable budget surplus becomes a fairly large and possibly unsustainable deficit. (-27.7% of GDP from 2000 to 2005) Non-oil sector GDP per capita should be more than doubled. Hydrocarbon revenues and derived investments accounted for 83% of total fiscal revenues between

One such sector for example, is petrochemicals – an area where Abu Dhabi can add value to its resources domestically, capture a larger share of the hydrocarbon value chain and take advantage of an international market hungry for its products.

2001 and 2005. Reducing reliance on oil revenues would bring Abu Dhabi into line with international benchmarks and best practices. By the end of 2030, some 64% of real GDP in Abu

The goal of Vision 2030 is to reduce dependence on oil receipts to the point where the economy can stand on its own two feet without them.

Dhabi will come from non-oil sources. For economic diversification to become a reality, Abu Dhabi intends to achieve a zero non-oil trade balance by 2028.

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Abu Dhabi Government Structure Abu Dhabi Judicial Department Diwan of Ruler’s Representation in Western Region Diwan of Ruler’s Representation in Eastern Region Diwan of Crown Prince

Abu Dhabi Audit Authority

Abu Dhabi Sports Council

Civil Service Council

Department of Transport

Western Region Development Council

Abu Dhabi Education Council

Abu Dhabi Emiratisation Council

Abu Dhabi Council for Economic Development

Department of Civil Service

Department of Finance

Department of Planning & Economy

Al-Ain

Urban Planning Council

Department of Municipal Affairs

Abu Dhabi Culture and Heritage Authority

Abu Dhabi Western Region

Municipal Council

Municipal Council

Municipal Council

Municipality

Municipality

Municipality


Ruler of Abu Dhabi Emirate

Diwan of Ruler of Abu Dhabi

National Consultative Council Crown Prince & Chairman of the Executive Council Executive Affairs Authority Executive Council General Secretariat Abu Dhabi General Services Company

Abu Dhabi Tourism Authority

Environment Agency Abu Dhabi (EAD)

Health Authority Abu Dhabi

Abu Dhabi Agriculture & Food Safety Authority

Abu Dhabi Water & Electricity Authority

General Headquarters of Abu Dhabi Police


Sovereign Wealth Funds Abu Dhabi’s global investors

The administration of Sovereign Wealth Funds generally remain the privilege of nations rich in natural resources. The public perception of these vast investment vehicles has changed a great deal since the onset of the financial crisis. These funds were once viewed with suspicion as geopolitical tools enabling one country to exercise undue influence over another. Concerns that investments may be politically rather than commercially motivated were forgotten when excess western capital evaporated, and such funds began to be actively solicited by liquidity hungry markets. Abu Dhabi is home to the world’s largest sovereign wealth fund, the Abu Dhabi Investment Authority (ADIA). Tragically, the Managing Director of ADIA, and member of the ruling Al Nahyan Family, Sheikh Ahmed bin Zayed Al Nayhan perished in a glider accident in Morocco in March 2010. Sheikh Ahmed was regarded very highly both domestically and internationally. A full brother of Sheikh Mohammed bin Zayed, the Crown Prince, Sheikh Ahmed took over control of ADIA at the young age of 28, after three years learning the ropes from within. He shied away from the media spotlight, preferring to keep a low profile, in line with that of the organisation itself.

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His successor has been named as Sheikh Hamed bin Zayed Al Nahyan. “I do not expect any significant change to the fund with the appointment. The new person is well experienced and has been heading some important economic bodies in the region.” said Efraim Chalamish, a sovereign wealth fund expert and global fellow at New York University Law School. Both Sheikh Ahmed and Sheikh Hamed are from a family of 19 brothers, led by the eldest, Sheikh Khalifa bin Zayed, Ruler of Abu Dhabi and President of the United Arab Emirates. The Al Nahyans are one of the world’s most powerful families and have been referred to as the “Kennedys of the Gulf” by The Daily Telegraph. The exact worth of ADIA’s funds is something that the organisation keeps close to its chest. Estimates range from $450 billion to $850 billion. A low-profile investment and media policy is underlined by the fact that most stakes in highranking international enterprises are kept below 5%. ADIA also has a policy of passive investment. This makes them an attractive investor for management teams, as an interest in a company on ADIA’s part will not interfere with the day-to-day running of the business.


Abu Dhabi Investment Authority

Abu Dhabi Investment Council

The main fund of Abu Dhabi. Regarded as the largest Sovereign Wealth Fund in the world.

Established in 2007. Concerned with local, regional, and more recently, international investments.

• Chair Sheikh Khalifa bin Zayed Al-Nahyan, UAE’s president and Abu Dhabi’s ruler Assets Key deal

• Chair Sheikh Khalifa bin Zayed Al-Nahyan, UAE’s president and Abu Dhabi’s ruler Key deal Assets

>$450bn

$100bn*

$7.5bn

$800m*

Investment in Citigroup in November 2007

75% stake in New York’s Chrysler Building

Mubadala

International Petroleum Investment Company (IPIC)

Wholly government owned super-developer. A pivotal organisation throughout a myriad of sectors and projects.

Established in 1984. Responsible for the investment of certain funds arising from oil revenues.

• Chair Sheikh Mohammed bin Zayed Al-Nahyan, Crown Prince

• Chair Sheikh Mansour bin Zayed Al-Nahyan

Assets

Key deal

Assets

Key deal

$14.7bn

$4bn

$17bn

$3.3bn

JV with General Electric to set up finance business

Listing stake in oil refiner Cepsa to 47.1%

Aabar

Taqa

Established in 2005 and subsequently taken over by IPIC.

Originally established as the domestic power company, TAQA is now an international energy operator.

• Chair Khadem Al-Qubaisi, IPIC’s Managing Director

• Chair Hamad Al-Hurr Al-Suwaidi

Assets

Key deal

Assets

Key deal

$3.6bn

¤1.95bn

$24bn

$631m

Bought a 9.1% stake in Daimeler in March

Bought North Sea oilfields from Shell & Esso

Advanced Technology Investment Company

Abu Dhabi Investment Company

Involved in the United States with a semiconductor enterprise.

National fund focused on regional investments.

• Chair Waleed Al-Mokarrab Al-Muhairi, who is also chief operating oficer of Mubadala Assets Key deal

• Chair Khalifa Al-Kindi, the managing director of the Abu Dhabi Investment Council, which owns ADIC Assets Key deal

n/a

$7bn

Investment in The Foundry

$2.1bn

$600m

Joint venture with UBS for an infrastructure fund

*based on information from the Financial Times

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A $7.5 billion investment in Citigroup just before its share price collapsed, was a noteworthy misstep in an otherwise premium, but little-known portfolio. This deal gave ADIA 4.9% of the New York–based bank, making it the second largest shareholder, with Prince Alwaleed bin Talal Al Saud of Kingdom Holding of Saudi Arabia the third largest shareholder, with 4.3%. Traditionally secretive, the Authority has recently capitulated to pressure and made an effort to appear more transparent. The global ADIA portfolio includes investments in over 24 asset classes and sub-categories, which have seen it generate a 6.5% return on an annual basis over a 20 year period and an 8% return over 30 years. 46% of the ADIA portfolio in 2009 was allocated to equities globally. 10% was invested in Government bonds. Hedge funds account for a minimum of 5%, whereas private equity stands at a 2% minimum. Overall, 60-85% of the fund’s portfolio is invested in the West, whereas emerging markets constitute 15%. We remain in the dark regarding the fund’s balance sheet and details of its total assets under management.

Other Investment Arms ADIA is not the only Sovereign Wealth Fund in Abu Dhabi. Two other investment companies – IPIC (International Petroleum Investment Company) and Mubadala - are getting more attention daily. With holdings estimated to be in the trillions, “Abu Dhabi Inc.” outranks the world’s largest listed companies, which, in the current era of borderless corporatocracy, is certainly significant. Given that the Emirate of Abu Dhabi is governed by a family, the distinction between family and national investments is not always apparent. Chief Executive of IPIC, Sheikh Mansour, recently purchased Manchester City Football Club in a torrent of publicity, which brought Abu Dhabi more prominently into Western consciousness. Given the conservative nature of the Emirate, the question of whether such a high profile display was considered a positive move within governing circles is open to speculation.

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A distinction must be drawn between Abu Dhabi and its much vaunted sister Emirate, Dubai. Dubai, as the discerning reader will be well aware, is not an oil-rich Emirate. With the black gold only accounting for 5% of its GDP, it made a name for itself as a tourist destination and new-age city of gold. It relied on flocking tourists, inflated real estate prices, a shopping mallbased consumer culture and the abundance of credit that flowed through the veins of the international banking system prior the crash of 2008. Indeed, it has emerged, in wake of the Dubai World debt restructuring fiasco of late 2009, that all was not as it seemed, and that even a United Arab Emirate is not invincible from the vagaries of international commerce. Thankfully for Dubai, it is Abu Dhabi’s closest neighbour. The intricate relationship between the two cities at opposite ends of the Sheikh Zayed motorway precludes one from letting the other fall. Abu Dhabi’s $10 billion bailout of Dubai World, and Sheikh Mohammed bin Rashid Al Maktoum’s reciprocal gesture in naming the tallest tower in the world, the Burj Khalifa, after Sheikh Khalifa, Ruler of Abu Dhabi, demonstrates the strength of this key relationship.

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Abu Dhabi Vision 2030

The Dubai Distinction

Abu Dhabi’s economic development is interlinked with those of its Federal partners, and the performance of the Emirate as a business destination will influence the overall economic performance of the UAE, and vice versa.

Enshrined in Vision 2030 is the interdependence of the Federal partners. Certainly, some Abu Dhabi money must have an interest in the long term viability of Dubai, yet it must be noted that in terms of land mass and oil wealth, Abu Dhabi is by far, the dominant Emirate of the UAE, occupying 87% of the geographic confines of the country, as well as owning 95% of oil reserves and 92% of gas. Considering that according to Vision 2030, Abu Dhabi generated an estimated $90 billion in oil revenues in 2007 alone, not even taking into account the untold reserves administered by its Sovereign Wealth Funds, the $10 billion bail out of Dubai was something that the Abu Dhabi coffers could absorb.

The Ruler of Dubai writes about his relationship with the Ruler of Abu Dhabi His Highness Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister of the UAE and Ruler of Dubai recently took the innovative step of directly answering questions online from Dubai citizens. He was asked the following question regarding the President of the UAE and Ruler of Abu Dhabi, Sheikh Khalifa bin Zayed Al Nahyan.


The following is taken from the official website of the Prime Minister of the UAE, www.uaepm.ae in the Prime Minister’s First e-Session with the public. Q: Your Highness, my question is about the UAE President His Highness Sheikh Khalifa. We want to know more about your relationship with His Highness since you have many common experiences. We would like to know more about His Highness Sheikh Khalifa’s personality. Sheikh Mohammed bin Rashid Al Maktoum: We have known each other since we were young men, and we managed to better know each other when the union meetings started. Since the establishment of the Federation of the UAE in December 1971, we have been working, each in his position, for the interest and prosperity of the country and the people. After Sheikh Zayed became the ruler of Abu Dhabi in 1966, Sheikh Khalifa was his aide and gained lots of experience in managing the country’s affairs and politics; he also acquired comprehensive knowledge about the country and citizens. Sheikh Khalifa has inherited his father’s wisdom and foresight, generosity, patience and his support for the poor and down-trodden. He is a leader who is truly devoted to serve his country and his people. Sheikh Khalifa’s ultimate happiness is to see every man and woman of the UAE happy and enjoying a prosperous life.

Deputy Supreme Commander of the UAE Armed Forces and chairman of Mubadala, Sheikh Mohammed, the Crown Prince of Abu Dhabi and heir apparent is the person most visibly active in the Royal Family. As patron of the World Future Energy Summit and a number of other high-profile endorsements, he is active in the implementation of Abu Dhabi’s modernisation programme. The Sandhurst-educated military man is also a seminal figure with regard to international relations.

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History, Culture and Society in Abu Dhabi Victoria Kelly

History The city of Abu Dhabi as it stands today is a far cry from the harsh terrain that existed there before. The days of camel herding and residing in huts, are long gone and Abu Dhabi is now a thriving metropolis. The history of Abu Dhabi can be traced back as far as 7,000 years ago due to some archaeological finds. It was very common in this culture to pass down history through word of mouth so very little was written down, which makes it difficult to trace the exact history. The origins of Abu Dhabi stem back to the Bedouin Bani Yas tribe. This was a nomadic tribe whose main activity was camel herding. Fresh water was discovered on the island of Abu Dhabi in 1761 so the leader of the tribe moved his people to the region. There is much debate surrounding where Abu Dhabi got its name from. The most commonly held belief is that it was named after a man who hunted deer in the area, as Abu Dhabi translates into English as “father of deer”. Soon after the Bedouin tribe settled in the area, the ruling Al Nahyan family relocated there. Pearl trading became the main industry in the town and it prospered under the rule of Sheikh Zayed bin Khalifa, also known as “Zayed the Great”. He was the longest serving leader in the history of Abu Dhabi reigning from 1855 until 1909. He led Abu Dhabi to

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a position of prominence throughout South-Eastern Arabia. The signing of the “Exclusive Treaty” with Britain in 1892 is perhaps what his reign is most memorable for. This treaty gave London the right to represent the Emirate in its international relations, whilst at the same time, guaranteeing Abu Dhabi’s sovereignty and internal autonomy. The seven Emirates became known as the Trucial States. After the death of Zayed the Great, Abu Dhabi’s fortunes took a turn for the worse due to a global recession at the time. However, it would not be long until all that changed when oil was discovered in 1958. Offshore oil exports began in 1962 and onshore exports in 1963. This set Abu Dhabi firmly on the road to becoming one of the richest cities in the world.

Sheikh Zayed In 1966, Sheikh Zayed bin Sultan Al Nahyan became ruler. His leadership was instrumental in forming the United Arab Emirates. In 1971 Britain withdrew from the region and as a result, the small Emirates felt vulnerable and decided to join together to form the UAE. The UAE includes - Abu Dhabi, Dubai, Sharjah, Fujairah, Umm Al Quwain, Ajman and Ras Al Khaimah. Sheikh Zayed became the UAE’s first president and ruled for 33 years until his death in 2004. He has become known as the nation’s

“founding father”. His vision laid the foundations for what Abu Dhabi is today and will become tomorrow.

Culture and Society Visitors are welcome in Abu Dhabi. This is readily apparent upon arrival at the airport, with signs greeting passengers declaring “Travellers Welcome”. The population of Abu Dhabi has grown in recent years, from 15,000 in 1962 to almost 1.8 million today. One of Abu Dhabi’s key priorities is to promote tourism. Their aim is to have three million visitors by 2015. This means that the people of Abu Dhabi are quite tolerant of tourists. Bordering the Kingdom of Saudi Arabia to the South and West and the Sultanate of Oman to the East, it must be remembered that Abu Dhabi remains a traditional Arabian society so visitors should bear this in mind when in public. The city is a melting pot of different cultures. Emiratis wear traditional dress. For women, that means the black abaya (a long black robe) and sheyla (a head scarf). For men, it means the dishdisha thobe (a white full length shirt) and a keffiyeh head-scarf (white or checked). Tourists are permitted to dress normally but respectfully. Light-weight clothing is ideal due to the heat and a jacket may be needed on cool winter nights. Bikinis, swimsuits, and shorts should be confined to beach resorts. Women are usually advised not to wear short skirts and to keep

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shoulders covered. If visiting or staying in a large hotel, more formal wear is appropriate in the evening. A visit to the Sheikh Zayed Mosque is a must for any visitor, but respectful dress must be adhered to. All nationalities and creeds are welcome. The Mosque provides traditional dress for any female visitors. Men should also dress appropriately.

Islam Islam is the official religion of the UAE. There are five calls to prayer each day. They occur at dawn, mid-day, mid-afternoon, sunset and nightfall. The numerous Mosques around Abu Dhabi have loudspeakers on their minarets; this means you will never miss the distinctive call to prayer. The religion is based on five pillars; faith, prayer, charity, fasting and pilgrimage. Islam is very much part of everyday life and is central to everything. Most offices and shopping malls contain prayer rooms to facilitate those that cannot get to a Mosque to pray. It is also not uncommon to see people kneeling by the side of the road praying. It is considered rude to stare at people doing so. All hotel rooms contain a Qibla which points to the direction of Mecca which should be faced when a Muslim prays. Friday is the Islamic Holy Day and most shops and malls remain closed until mid afternoon. The working week tends to run from Sunday until Thursday. During Ramadan, the Islamic month of fasting, participating Muslims refrain from eating or drinking anything from dawn until dusk. Non-Muslims are expected to show respect for this custom by avoiding eating, drinking and smoking in public. Whilst alcohol is available in hotels throughout the rest of the year, during the Holy month of Ramadan it is not available anywhere. Pork is not consumed by Muslims and is not widely available in Abu Dhabi. Ramadan does not have a fixed date each year and occurs depending on the positioning of the moon. The end of Ramadan is celebrated by the Eid Al Fitr feast which is a three day celebration. This is the main religious event of the year.

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Foreign Direct Investment


Attracting International Investors

Despite its vast oil wealth, Abu Dhabi is trying to attract foreign direct investment. The majority of countries that seek to attract FDI do so in order to create employment and benefit from the tax revenues and rents accrued once the investing company’s operations are up and running within their borders. Not so with Abu Dhabi, as it does not need money from foreign investors per se. It does however, need know-how. The imperative of diversifying the Emirate’s economy away from reliance on oil revenues means that there are a number of strategic industries in which Abu Dhabi would like to be more heavily involved. “The Emirate seeks to reduce dependence on oil, and there is growing recognition of the need to promote foreign investment as one of the instruments of economic diversification.” - Statistics Centre Abu Dhabi. There is a deficit of expertise throughout a multitude of industries and Abu Dhabi is intent on addressing this by using its wealth to attract the brainpower it requires. As a result, foreign direct investment in certain sectors is welcomed with open arms. Sectors that routinely attract FDI in Abu Dhabi are real estate, water and electricity, financial intermediation and insurance, construction,

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manufacturing, mining and quarrying, transport and communication, hotels, wholesale and retail trade. According to the Statistics Centre of Abu Dhabi, “Classifying FDI by countries of origin, the UK topped the list of countries investing in the Emirate of Abu Dhabi, accounting for 23.7% (approximately AED 7,453.9 million – over $2 billion USD) of total FDI in the Emirate, followed by Austria, which invested AED 1,585.2 million or $435 million USD (5.04%) and Japan and Libya, which invested, AED 1451.3 million (over $395 million USD) and AED 1116 million (nearly $304 million USD) or 4.61% and 3.55% of total FDI for 2007, respectively.”


The Abu Dhabi Economic Vision 2030

Foreign Direct Investment •

FDI can be beneficial for the economy as a whole, as it brings with it know-how and expertise that can trigger further economic growth. Additional work will be done to improve the investment facilitation process, by developing one-stop shops.

Abu Dhabi is looking to attract more strategic FDI, to encourage export-orientated industries and improve the know-how and competitiveness of the Emirate.

The Government is committed to the ongoing evaluation of its legislation, legal systems and government processes to ensure the Emirate is an attractive investment destination.

Abu Dhabi aspires to rival rankings enjoyed by benchmark economies such as Ireland, Norway, New Zealand and Singapore on the global indices scale for economic freedom and ease of doing business.

A simple and transparent tax structure is one of the Emirate’s major advantages when it comes to attracting foreign investment.

Aspects of Abu Dhabi’s legal system will also be enhanced and strengthened to optimise business opportunities.

The UAE Government levies no corporate or income tax and, at 1.7% of GDP, tax payment rates are among the lowest in the world.

Outside of free zones, limits in Abu Dhabi are similar to those of its GCC partners. Foreign ownership of companies in the UAE is capped at 49%, with few exceptions. This policy has been relatively successful, creating a generation of local shareholders and business-owners.

The level of foreign ownership remains low within the Emirate, thus indicating an opportunity to boost FDI and speed-up the roll-out of leading edge technologies, business processes and management practices to the rest of the economy.

For now, however, free zones, which enjoy some exemptions and flexibility related to foreign ownership rights, are the primary tools to encourage FDI. Foreign nationals are now permitted to own real estate in the Emirate within specially designated zones - a measure to improve the attractiveness of the Emirate as an investment destination.

A more contemporary corporate governance framework will also be considered in order to boost investor confidence in Abu Dhabi. The Federal Commercial Companies Law provides some guidelines for corporate governance provisions and minority shareholder rights. Legal reforms in this area will help to bolster higher standards and investor confidence within the business community.

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ZonesCorp Attracting Industrial FDI Interview with HE Mohamed H. Al Qamzi, Chief Executive of the Higher Corporation For Specialized Economic Zones

Abu Dhabi Economic Vision 2030

Mohamed H. Al Qamzi is Chief Executive of the Higher Corporation For Specialized Economic Zones, better known as “ZonesCorp”. The organisation plays a major role in driving innovation and economic diversification. FDI can be beneficial for the economy as a whole, as it brings with it know-how and expertise that can trigger further economic growth. Additional work will be done to improve the investment facilitation process, by developing one-stop shops. Abu Dhabi is looking to attract more strategic FDI,

According to the chief executive, “Our ability to cluster specific industrial groups together throughout our developments, means that we save money for companies that establish within the zones. The infrastructure that serves each cluster is specifically tailored to that cluster’s needs. All logistics are well catered for.”

to encourage export-orientated industries and improve the know-how and competitiveness of the Emirate. The Government has led initiatives to enhance the international investor perception about the local business environment.

ZonesCorp is the government backed agency responsible for the establishment, management and operation of specialised economic zones in Abu Dhabi. According to its own literature, ZonesCorp’s remit is to “empower [Abu Dhabi] to develop its infrastructure and to enable the business environment to reshape the Emirate’s economic landscape through the implementation of targeted industrialisation and investment programmes.” It also serves as the licensing authority for all industrialised activity in Abu Dhabi and plays a pivotal role in strategy and policy setting in line with Vision 2030.

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Central to this is a strategy of industrial clusters which Mohamed H. Al Qamzi, Chief Executive of ZonesCorp describes as “a critical factor in the attractiveness of Abu Dhabi for any investor”.

The corporation’s zones, ICAD (Industrial City Abu Dhabi) numbers 1,2,3 & 4 ( and a 5th in the pipeline) are located around Mussafah on the city’s outskirts. They are complimented by the existence of Workers Residential Cities, providing accomodation for the manpower of the industrial zones. Al Ain Industrial City is also operated under the auspices of ZonesCorp and serves as part of Vision 2030’s ongoing commitment to Al Ain, (the Emirate’s second city) and the outlying regions. ZonesCorp was created in 2004 by a decree from His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of UAE and Ruler of Abu Dhabi. The organisation serves as one of the first ports of call for an industrial investor in the Emirate. Operating through Public-Private Partnership management structures, ZonesCorp can leverage “off an enhanced financial capability” and provide “services to facilitate investors”.


Al Qamzi concedes that the cost of rental is expensive but maintains that this is compensated for by the government-supported infrastructure which has been specifically designed to be conducive to good production. “We are proactive in our outreach to the industrial sector. We have created a value chain from top to bottom as a focal point for servicing the needs of the investor. We are the only entity that can grant industrial licenses and industrial land and therefore occupy a pivotal role for industrial FDI”.

What we say, we deliver on, because the success of investors is our success.” Al Qamzi says of Vision 2030 that; “There is only one vision. It is cascaded down to each entity and we each implement our part of it in conjunction with one another.” Abu Dhabi Economic Vision 2030

Companies can enjoy duty-free import of machinery and raw materials, free repatriation of profits, tax exemptions, competitively priced utilities as well as duty-free access to the GCC market. Already only 12 minutes from the Abu Dhabi International Airport, 50 minutes from Jebel Ali Port and Airport, the zones will soon be served with the forthcoming “Abu Dhabi Industrial Port” as well.

The level of foreign ownership remains low within the Emirate, thus indicating an opportunity to boost FDI and speed-up the roll-out of leading edge technologies, business processes and management practices to the rest of the economy. For now, however, free zones, which enjoy some exemptions and flexibility related to foreign ownership rights, are the primary tools to encourage FDI. eg. Khalifa Port and Industrial Zone (KPIZ) Foreign nationals are now permitted to own real estate in the Emirate within specially designated

“We work with GHC (General Holding Co.) and ADBIC (Abu Dhabi Basic Industries Company) with regard to the overall strategy, and implement it from there. We are open to all kinds of industrial enterprise, as long as it is self-financing and has a product that is competitive. Whatever is in my control, I will do to facilitate an investor, particularly in high end, capital intensive industries that require less in manpower. Each business has its own complexities, so we can meet each other, find a mechanism that works, agree a rental price and start from there.

zones, a measure to improve the attractiveness of the Emirate as an investment destination.

A point made and reiterated by ZonesCorp representatives at the Abu Dhabi Economic Forum, which took place in the Emirates Palace Hotel in February 2010, was that the impact of the financial crisis has actually served to benefit the industrial sector in Abu Dhabi by bringing down prices.

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Abu Dhabi Business Guide

by Baker Tilly MKM


Establishing a business in Abu Dhabi

The economy of Abu Dhabi is largely based upon the revenue generated from petroleum and natural gas. Some other sectors are also emerging in order to support the Emirate’s economy in keeping with the strategic plan for development of the Emirate.

Business Guide Under article 5 of the Commercial Companies Law, there are seven different types of companies, which may be established, namely: 1. 2. 3. 4. 5. 6. 7.

General Partnership Simple Limited Partnerships Partnerships Limited with Shares Public Joint Stock Companies Private Joint Stock Companies Limited Liability Companies Joint Participation (ventures)

A table showing the requirements for the various forms of enterprises is given separately on page 32. Other forms – Joint ventures, branches of foreign companies, representative offices, and other forms of business entities have different rules, capital requirements and procedures.

Joint Venture Companies A joint venture is a contractual agreement (which may be oral or written) whereby the losses of the entity are shared by two or more partners. The local equity participation in the joint venture must be at least 51 percent but the profit and loss distribution

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can be prescribed. Specific projects which involve working together for a fixed period are suitable for joint ventures. There are no registration formalities for a joint venture as it is not a distinct legal entity. The business name and licence of the partner conducting the business are used by the company. A memorandum of association can be prepared to indicate the rights and liabilities of the partners and method of profits and losses.

Branches and representative offices of foreign companies A branch of a foreign company can be formed as per the regulations of the Commercial Companies Law. The main requirement is to appoint a local service agent who should be a local national or the company should be 100% owned by local national. The representative office of the parent company may practice only promotional business for the products and services dealt with by the parent company and cannot market directly its products or conduct its business operations. A branch of a foreign company’s activities will be as per the license obtained from Ministry of Economy and inscribed in the Ministry’s Register of Foreign Companies and the concerned authority from the respective Emirate.


Procedures to Obtain a Trade License Department of Economic Development

Information Desk Reserve a trade name and obtain requirements

Specify Company Activity

YES

File the form of required Dept. / Ministry

Approved

NO

Need Special Approval

Information Desk Check Document & Obtain Trade License

YES

ADCCI Desk (To be registered as a member)

NO File the document & return to the concerned Dept.

Inspection/ Investigation Dept. (Site visit Date)

Obtain Trade License

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TYPES OF COMMERCIAL COMPANIES IN THE UAE - ABU DHABI Incorporation ForNumber Trade Name TYPE malities & National of Terms share % Partners of Selection

General Partnership

Simple Limited Partnership

Public Joint Stock

Limited Liability Company

Private Joint Stock

Partnership Limited with shares

Joint Participation (Venture)

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All partners should be UAE nationals. Agreement written in Arabic duly authenticated and registered. 51% minimum national share. All general partners should be UAE nationals. Agreement written in Arabic duly authenticated and registered. Letter of Incorporation & Articles of Association in accordance with the form issued by the Ministry of Economy duly authenticated and registered. 51% minimum national share. 51% minimum national share agreement written in arabic duly authenticaed and registered. Agreement written in Arabic, duly authenticated and registered. 51% minimum national share(s) Agreement written in Arabic, duly authenticated and registered. 51% minimum national share in capital. 51% minimum national share incorporated among partners without being declared towards others. Agreement written in Arabic may be authenticated but unregistered.

Formed of partner(s) name(s) (2) at least OR a trade name innovated for the purpose

Any trade name, providing that no (2) at least Silent Partner’s name is included.

Company Characteristics And Partners Responsibilities Based on confidence & familiarity among all partners who will have the capacity of merchants. Partners are jointly liable in all his assets for the company’s obligations.

National general partner liable in all his assets for the company’s obligations and silent partner liable only up to his share in the capital.

(10) at least

Derived from its purpose, but should not be that Partner is only liable up of a natural person to his share in the capital. and in accordance Stocks are negotiable. with the company law provisions.

(2-50) Partners

Derived from its purpose OR from the name of partner or an innovated name.

All partners are only liable for the company obligations up to and within the limit of their shares in the capital.

(3) at least

Derived from its purpose

Partners are only liable up to their shares in the capital.

General partner’s name(s) OR an (2) at least innovated trade name.

National general partner liable in all his assets and a shareholder liable only upto and within the limits of his share in the capital.

Undeclared towards others. General partner’s If it so happens, then it will (2) at least name OR an innobe diverted into a general vated trade name partnership towards others.


Capital

Licenced Activities Management

Unfixed

Any legitimate activity with consideration to purpose and specialisation.

As per agreement among partners or with others.

Unfixed

Any legitimate activity with consideration to purpose and specialisation.

By national general partner(s)

Any legitimate activity with consideration to purpose and specialisation.

By board of directors in accordance with the provisions of the Company Law

AED 10 million minimum, divided into shares with a value varying between AED 1-1000 AED 150,000 minimum Each share value should be AED 1000 at least.

AED 2 million minimum.

AED 500,000 minimum

Any legitimate activity, except those of insurance, banking & financial investment in favour of others Any legitimate activity with consideration to purpose and specialisation. Any legitimate activity with consideration to purpose and specialisation.

As per agreement among partners or by others.

By a board of directors

By one or more general partner

Professional Firms According to Local Order No.63, 100% foreign ownership is permitted in establishing a professional firm provided that a UAE national is appointed as a local service agent. The local agent has no direct involvement in the business and is paid a lump sum of profits or turnover. The number of staff members that may be employed in a professional firm is limited. Architects, engineers, management consultants, health care professionals, legal and accounting firms can obtain professional licenses and operate as professional firms. However, in case of audit firms, the national partner should possess a certificate of practice issued by the Ministry of Economy and his share in the firm should be not less than 25%.

Industrial Licences A special entity, ZonesCorp, has been established to revolutionise the industrial licensing process in Abu Dhabi. The investor can initiate the licensing process by filling out an application at any ZonesCorp counter or online.

Services Provided by ZonesCorp ZonesCorp is responsible for developing, operating, managing and administering zones of special economic nature in strategic locations throughout Abu Dhabi. Due to the close cooperation and coordination between it and the various government bodies, ZonesCorp is involved in; 1. Providing a one-stop-shop for customers, a foreign labour service centre and workers’ accomodation. 2. Processing construction permits and granting preliminary approvals. 3. Issuing the permanent industrial license.

Unfixed

Any legitimate activity with consideration to purpose and specialisation.

By the general declared partners known to others.

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Existing Industrial Zones

Al Ain Industrial City (I and II)

Abu Dhabi First Industrial Zone: ICAD I

Al Ain Industrial City is a multi-use development but with a priority focus on SMEs in the light-tomedium manufacturing, engineering and processing industries, including wood engineering, chemical and plastics, construction materials, food and textiles. It covers 5km2 with a further 5km2 planned for phase II.

ICAD I is focused on heavy-to-medium manufacturing, engineering and processing industries, including metal products, construction materials, fiberglass and plastics assembly. ICAD I extends over an area of 14km2 . Abu Dhabi Second Industrial Zone: ICAD II ICAD II is focused on light-to-medium manufacturing, engineering and processing industries, including wood processing, engineering, oil and gas, construction materials and chemicals. The zone covers 11km2 and has been constructed in distinct phases according to a detailed master plan. Abu Dhabi Third Industrial Zone: ICAD III ICAD III is focused on light–to-medium engineering and processing businesses with an international focus. Wood processing and engineering, chemicals and plastics, construction materials, high-tech industries, food and textiles are the key target sectors for this zone. It extends over an area of 12km2.

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Media Zone Authority The media free zone, TwoFour54 (the name represents the geographical coordinates of Abu Dhabi), was established as a centre of excellence for internationally renowned Arabic content creation. TwoFour54 has already attracted several of the largest and most influential content creation companies worldwide like CNN, BBC, the Financial Times and the Thomson Reuters Foundation. The business development team at TwoFour54 can be contacted on +971 800 2454 for assistance regarding the setting up of a business in the free zone.


The Abu Dhabi Joint Venture Interview with Syed Basar Shueb, GM of PAL Group

When one looks at the list of companies that compromise the PAL Group, the most striking thing is the sheer diversity of industrial sectors represented. This multi-disciplinary approach encompasses green building, utilities, logistics, travel, construction, fisheries, property development, engineering, district cooling centres and even robotics. Given the varying fields of endeavour in which the PAL Group can claim proficiency, it is reasonable to view the group as a case study in joint venture best practice. Founded in 1999 by General Manager, Syed Basar Shueb in conjunction with the Royal Group, PAL is an indigenous conglomerate that grew organically by identifying opportunities in the marketplace and making the right business partnerships with key companies. The group has grown to now employ 6,000 overall throughout the eleven member companies, seven of which are fully owned. Shueb sits on a further twenty boards due to the various interests that PAL has acquired along the way. In terms of management, each of the group’s companies, (Al Jaraf Travel, Al Jaraf Fisheries, Al Jaraf Logistics, Aleron, Ambrosia, PAL Systems, PAL Robotics, Hydra Trading, Infinity TV, PAL Technology and Royal Falcon) runs an autonomous operation, with the noted exception of HR and finance which are centralised at the group’s headquarters. This disparate variety of interests necessitates a further enquiry into how equilibrium is maintained when managing them collectively. CEO Financial spoke exclusively to the group’s General Manager in order to explore the issue.

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“When entering any joint venture, the most important thing is to be upfront and set out everything from the beginning”, explains Shueb, “When we explore a possible business partnership with a company that has expertise in a particular area that we want to enter, we are careful to lay out all of our expectations from the start so that there can be no confusion down the road. Transparency is crucial, as is mutual trust between the parties. Once the roadmap has been set out from the start and everybody concerned knows what their deliverables and time frames are, the path is set for working toward a common goal.” Shueb goes on to explain his management style with regard to the group. “When the JV is up and running, each company functions within its own framework. We, the group management, are not necessarily experts in each particular field, so we trust our joint venture partners with decision making for their particular businesses. Of course, I meet the managers as and when required and keep a close eye on the various interests. We have weekly, monthly and quarterly reviews in which all issues can be discussed. Being fully owned by Royal Group Holding benefits us also, as it means we have a strong partner behind us”. Having actively participated in the World Future Energy Summit, displaying its district cooling and green building credentials, it was notable that PAL also took the opportunity to display “Reem B”, the world’s strongest humanoid robot. Whilst still in the prototype phase, the ultimate goal is for the robot to assist humans with sophisticated tasks and become a truly useful servant. Such forward thinking exemplifies the fact that PAL as a group quite clearly has its eyes firmly fixed on the future.

Having set out a clear blueprint for its future development in Vision 2030, the government of Abu Dhabi as whole, is moving forward with very deliberate purpose towards the aim of developing an ideal economic model. As a key constituent of the Abu Dhabi business landscape, Shueb sees strategic opportunities to service the growth that has been set out in this mandate. “First and foremost, we want to work directly with the government in order to deliver upon the planned infrastructural projects that have been set out. Secondly, under Vision 2030”, explains the General Manager, “the population of Abu Dhabi is set to double within the next two decades in order to service the anticipated growth of and diversification within the economy. These people, as workers, will also become consumers. Therefore, there arises considerable opportunity in servicing their needs as consumers through a variety of routes. Some areas that spring to mind include hospitality, catering and education. We are interested in forming new joint venture partnerships with a view to entering these support industries.” “For any company experienced in these support industries, we are a natural partner of choice. We have the experience on the ground here which is a priceless commodity. We are well-connected with the people that matter and have a proven track record of successfully forging and maintaining joint venture partnerships”, declares Shueb. In terms of the Emirate itself, the message of the General Manager is clear; “In terms of a place to do business, Abu Dhabi presents endless opportunity, once you have the right approach. Abu Dhabi is a future city”.

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IT infrastructure provides cloud computing capability for market entrants Interview with Ibrahim Mohamed Lari, CEO, Injazat

Deep into Mohamed Bin Zayed City, next to the industrial area on the outskirts of Abu Dhabi City, lies a massive modern building – a preview of what is to come as Abu Dhabi develops ever further on the road to Vision 2030. A fact to take into account is also that this building houses the only Tier IV Datacentre in the entire Gulf region. It is the home of Injazat Data Systems – a joint venture between international technology company HP and domestic superdeveloper, Mubadala. Its mission is to position Abu Dhabi as a sophisticated centre for IT – a place where the technological infrastructure for massive future development is already in place ahead of time. A place where businesses can outsource IT services and make the best out of cloud computing, with complete confidence with regard to the security of their data. Ibrahim Lari, CEO of Injazat Data Systems explained to CEO Financial the initial rationale for the inception of the enterprise; “Back in 2002, it was decided that we need an entity that can deliver IT services on according to the international best practices. Our vision was to retain knowledge in our country, and to empower nationals, so that we are not reliant on foreign technology companies. EDS conducted a feasibility study and a value proposition was put forth. A joint venture was then formed, with 60% ownership by Mubadala and the remainder belonging to EDS now HP (after HP acquired EDS in 2008). We began operations in

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February 2005 with a small team of 15 employees. By the end of that year, we grew to 250 employees and today we are more than 600 employees”. This fast pace of development continued as Injazat began to accrue contracts to take on the outsourcing of Information Technology services for various Government entities including ADWEA (Abu Dhabi Water & Electricity Authority). “For example, in our initial 400 million Dirham outsourcing deal (€80 million) with ADWEA, we took on the entire IT department of the Authority – everything from the infrastructure, to the help desk, to the security, to the vendor and asset management and offered ADWEA SLA based services”, explains the chief executive. This initial success lead to further developments in 2006 culminating in a mega-deal with Abu Dhabi Municipality in November of that year. Continued growth has brought Injazat to the point where it is now, the third largest IT services company in the UAE and the first IT Outsourcing company in the UAE. After founding the IT Outsourcing market in 2005 Injazat did a new market leap by building and operating the first Tier IV Data Centre outside

North America and the most advanced in the region. “In this industry, you need to start from a strong base”, declares Lari, “and in this respect, we have a significant competitive advantage. Having the first Tier IV Data Centre in the region makes us a natural partner of choice for organisations and companies that have critical business models and are looking to locate in the region. We provide this competitive advantage to Abu Dhabi on an international scale.” Ibrahim Lari is confident regarding the capacity that Injazat can provide to market entrants; “The Tier IV Data Centre makes us unique in the region. We have no competitors when it comes to capacity and technology. We are now looking to diversify our client base into various sectors such as telecommunications, healthcare and financial services. There are plenty of businesses here that we can compliment with the utilisation of our state of the art infrastructure. We are also open to doing business with companies that are new to Abu Dhabi and require to operate data-intensive businesses. With a broad range of managed services we manage simple to complex IT environment from our Tier IV Data Centre. With 99.5% availability and resilience and the highest standards security the Tier IV Data Centre is an oasis for clients who are looking for the region’s most advanced infrastructure.”

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Audit & Advisory in Abu Dhabi Interview with M. Krishnamurthi, Group Chairman, Baker Tilly MKM

Although big business still predominantly flocks to the big four audit firms on a global basis, the financial crisis has left many companies looking at how they can cut costs, without compromising quality. As a result, companies are increasingly looking towards the audit and advisory firms that occupy the tier directly below the seemingly untouchable plateau that the big four occupy. Ranked number 8 in the world in terms of revenue, Baker Tilly International is a firm that provides audit and advisory services of a calibre comparable with that of the market leaders. With 572 offices worldwide, the brand name that began in the UK now spans the globe with its network of independent members. Its operations in Abu Dhabi are well-reputed and the firm is acknowledged as a thoroughbred in the industry and throughout the UAE, where it holds offices in each Emirate. CEO Financial spoke to Group Chairman, M. Krishnamurthi in order to discuss the Abu Dhabi market and the crucial role that audit and advisory firms such as Baker Tilly MKM fulfil.

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CEO: What are the most important things that one should take into account before entering the Abu Dhabi market? Krishnamurthi: It is essential that the company actually physically comes here in order to conduct their due diligence. They must ascertain for themselves if there is a need in the market for the goods or services that they customarily provide. Stick to your core business. Do what you are good at. They must focus on their core strengths and make sure that there is room in the market. As well as that, it is necessary to establish a registered legal entity here. Remote control will not work. ADNOC (Abu Dhabi National Oil Company) and its Group of Companies for instance, won’t do business with any company that does not have a local base. CEO: In your experience, what key ingredients do you consider to be prerequisites for success in Abu Dhabi? Krishnamurthi: Good contacts are absolutely crucial in establishing a solid ongoing concern here. Obviously, that is the case in most markets, but the culture of how business is done in Abu Dhabi means that the point becomes more pronounced here. It is also advisable to come with capital and a capacity to spend as it can take time to get established and generate cash-flow.


CEO: What changes have you seen as Abu Dhabi has developed? Krishnamurthi: Abu Dhabi has taken its time in expanding. The marked difference between it and Dubai in terms of long-term strategy has clearly come to the fore of late. Now Abu Dhabi is really coming into its own – it is coming to fruition. It is the place to do business right now. Abu Dhabi has the liquidity and it has the vision. The action is here. CEO: What kind of businesses are you looking to attract as clients? Krishnamurthi: We want small-to-medium sized enterprises. We know that there is immense opportunity in this market and SMEs will be an engine of growth for the diversification of the economy going forward. We are very well positioned to act as a partner for these companies in terms of evaluating the feasibility of their business model within this marketplace and advising which one of the legal entities will best suit their model. Of course, our auditing services are also an essential tool for companies, not only in order to fulfil their legal requirements, but to find out financially where they have been, so they can determine where they are going. Clients can benefit from our wealth of experience, not only in Abu Dhabi, but throughout our independent offices in all of the Emirates. We want to help our clients develop in the right

direction, because when they grow, we prosper. Our vision is to grow bigger by expanding our operation in other Gulf countries and also by partnering with expert firms specialised in other related activities, which will enable us cater to the requirements of large-sized enterprises. CEO: What advantages can Baker Tilly deliver over and above that of the big four? Krishnamurthi: Of course, the main answer is the most obvious - cost. Baker Tilly MKM is adopting the standards and methodology formulated by Baker Tilly International, which is comparable with any of the other big players. Our structure allows the client to have direct access to the senior partners for any advisory requirements. Our ethics are defined by the high degree of professionalism that is the hallmark of Baker Tilly International. Our clients can count on us to deliver a high degree of expertise and service that will always be customised to their needs. The rich and varied knowledge of our partners drawn from different disciplines, combined with capabilities for specialised and complex services, enable us to provide comprehensive end-to-end solutions. An example to illustrate the point is the fact that right now, I am conducting a large assignment in IT consulting outsourced to us by one of the Big 4.

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Streamlined Government Services Interview with HE Mohamed Al Meheiri, CEO of Musanada

“The Abu Dhabi Economic Vision 2030” publication consists of 284 pages – 142 in English, left to right, and 142 in Arabic, right to left. It is a very comprehensive document, and yet it must be appreciated that it is only the tip of a very large iceberg. The work that goes into its implementation at every level, in every sector is monitored and benchmarked at every step, culminating in a series of 5 year plans.

Vision 2030

A single point made in the Vision document under the heading streamlined government processes dictates that; Government efficiency and joined up Government are crucial to improving the overall business environment.

One organisation central to that theme is Musanada. This government entity is responsible for delivery of business information systems, and their coordination throughout the disparate arms of government. According to Musanada literature; “The Emirate is on the cusp of major change on a global scale. The tremendous growth of Abu Dhabi and diversification of business investment is being guided by the 2030 Vision – a strategic plan to secure the future success of the capital city beyond the

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oil wealth and improve the lives of its citizens and residents. Musanada’s role is to support the Emirate’s public sector institutions and help Abu Dhabi become one of the Top 5 Governments in the world.” CEO Financial spoke exclusively to HE Mohamed Al Meheiri, CEO of Musanada about the work of the organisation. “We are dedicated to serving the government with the provision of business support services such as service desks, helplines, CRM facilities and many other projects. Our mission is to streamline the channels of communication between various interlinked government departments that must coordinate on a variety of levels”, the CEO explains. In supporting its government customers, Chief Executive, Mohamed Al Meheiri is on the look out for international shared service providers to work with in a variety of areas. “Knowledge transfer is a key component in enabling various facets of government to communicate efficiently. Musanada means ‘to support’, and this is what we do in providing business services across the departments. We have an interest in engaging shared service providers with solutions that can be applied throughout the range of government services”, asserts Al Meheiri.


The focal point for international business Abu Dhabi National Exhibition Centre Interview with HE Ali Saeed Bin Harmal Al Daheri, Managing Director, Abu Dhabi National Exhibition Company

Home to the World Future Energy Summit, the Abu Dhabi National Exhibition Centre (ADNEC), strikes an impressive silhouette.

Vision 2030

His Excellency Ali Saeed Bin Harmal Al Daheri is now the managing director of a company with a “new board and a new strategy to reshape the exhibition industry and set new international standards”. ADNEC replaces its predecessor, General Exhibitions Company. The Government has led initiatives to enhance the international investor perception about the local

International recognition of the centre increased in 2010 with a reported total of a quarter of a billion people viewing broadcasts worldwide of the World Future Energy Summit held in ADNEC in January. Showcasing prestigious events is something ADNEC has become accustomed to since opening its doors in 2007. The centre now plays host to well over 100 events per year and this number is increasing.

business environment.

ADNEC is the largest exhibition centre in the Gulf region. Set on Abu Dhabi Island itself, just outside the City of Abu Dhabi, the centre is readily identifiable as it is adjoined by one of the world’s most modern and unusual buildings, Capital Gate - a feat of engineering which mimics the Leaning Tower of Pisa. Demand is increasing for the use of the facility. It hosts major international exhibitions but also has the capacity to support smaller events in in a variety of areas on site. The centre boasts both indoor and outdoor facilities, twelve halls and event services such as conference and banqueting facilities. ADNEC has even played host to boat and yacht exhibitions as it is in close proximity to the waterfront. It also caters for weddings in the luxurious Al Maa’red wedding hall.

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ADNEC is served by the brand new Aloft Hotel, which sits atop the end of the U-shaped structure.

According to Al Daheri, “ADNEC strives to deliver the highest standards and recruits the best talent for the successful execution of its shows and exhibitions.” Forthcoming events include SME 2010, the Small and Medium Sized Enterprises Show in December, and SEYAHA 2010, the Holidays and Travel show, November 11-13th, organised by Al Hader Exhibitions and Conferences. The centre itself acts as a catalyst for the ongoing development of the surrounding Capital Centre District.


Development is well under-way with lucrative deals already signed for the much coveted office and hotel space immediately surrounding the exhibition centre. The potential of this area has been recognised by both hoteliers and businesses alike purchasing towers and office spaces in close proximity to a venue that will attract millions of visitors in key areas and serve to act as a focal point for international business. According to HE Ali Saeed Bin Harmal Al Dhaheri “The concept of the development is that the Capital Centre District, located in the Embassy area of Abu Dhabi, will become a micro-city in its own right. The business opportunity potential of Capital Centre District was recognised immediately and investors acted fast in securing the deals.” Winning awards is an area in which ADNEC has become proficient. It has been in receipt of a grand total of ten of these highly esteemed, peer reviewed, international industry awards, including “World’s Best Venue 2009”. Part of Vision 2030 is that Abu Dhabi will have one of the five top governments in the world. ADNEC is a government owned company and plays an integral role in the governments’ endeavours to brand Abu Dhabi as such. When it comes to Vision 2030, a commonly held notion is that the vision itself is a natural extension of the grand vision of the late Sheikh Zayed, the founder of the United Arab Emirates. CEO Financial put this concept to the Managing Director, and found him to be in agreement.

“I would agree one hundred percent that Vision 2030 is a natural extension of the vision of Sheikh Zayed. This vision was in his mind and his actions. All of his efforts for so many years are finally coming to fruition. He mentored our current leaders on his strategy and we are very lucky to have a number of competent leaders in government who have been able to draft and document plans to outline what needs to be done over the next twenty years on the road to 2030” states Al Dhaheri. The initiatives that drive ADNEC fit precisely with Vision 2030, with the centre assisting in enabling this vision to become reality. ADNEC does this by becoming a focal point for international business within the region, and the world, enjoying the consequent exposure that is generated. The World Future Energy Summit for example, has been labelled as the “Davos of Green Energy” and has served to galvanise “Brand Abu Dhabi”. “We are an organisation that has been formed as part of Vision 2030. All of our initiatives fit with the vision. The government is now looking to brand Abu Dhabi on the world stage and position the Emirate as having one of the world’s best 5 governments. ADNEC is operating under that premise. It is the best exhibition venue in the Gulf and we are positioning the UAE to compete.” asserts the managing director. “We really believe in Abu Dhabi and we want the rest of the world to do so as well. Come and join us in the calm, cultured way that is Abu Dhabi”.

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Energy


Pillar: The optimisation of the Emirate’s resources

Key Priority: Economic development

Key priority: Environmental sustainability

Key Priority: Optimisation of Government operations

Blessed with one of the world’s largest oil reserves, Abu Dhabi is committed to maximising the potential of this God-given asset. In order to do so, the Emirate is adding value to the production side through the petrochemicals industry and seeking to maximise exports by reducing domestic oil consumption through the use of renewable energies and nuclear power.

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The Abu Dhabi Economic Vision 2030

Oil, Gas & The Need for Diversification •

Abu Dhabi has the world’s sixth largest proven oil reserves with 98 billion barrels worth.

It is the tenth largest producer of oil in the world, currently producing 2.5 million barrels per day.

Abu Dhabi is one of the world’s top 25 exporters of natural gas.

The Emirate’s participation in the oil and gas sector spans the entire range of activities, including exploration, production, transport, refining and marketing of oil and gas.

Abu Dhabi has exceptionally low production costs and vast economies of scale.

However, economic growth is currently coupled too closely with oil prices and therefore shows signs of high volatility.

The primary role oil plays in the economy means that GDP growth tends to be overly sensitive to fluctuations in the oil price.

There is a need to reduce exposure to oil price fluctuations.

As soon as Abu Dhabi furthers its economic diversification by stimulating non-oil sectors, and especially export-orientated businesses, the volatility in the economy’s growth will start to decrease.

Even non-oil sectors demonstrate sensitivity to the oil price, because they tend to be inward looking and are therefore reliant on domestic liquidity.

The key to sustainable development lies in stimulating non-oil sectors and diversifying the range and depth of economic activity.

Abu Dhabi’s aim is to stimulate non-oil sectors rather than to reduce activity in the oil sector. Productivity must be increased through a focused approach on Abu Dhabi’s competitive advantages.

Abu Dhabi’s immediate priorities of sustainable economic growth and non-oil sector diversification can be quickly achieved through the development of “National Champions”: large enterprises that underpin the economy and around which industrial and service clusters could develop.

The building of “National Champions” has been favoured by countries with a particular competitive advantage, such as leadership in a certain field, or an abundance of certain resources, such as a large workforce or availability of a natural resource. With its abundant energy capital, Abu Dhabi fits this profile.

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When oil revenues are removed from the fiscal balance, Abu Dhabi’s comfortable budget surplus becomes a fairly large and possibly unsustainable deficit, (-27.7% of GDP from 2000 to 2005).

Hydrocarbon revenues and derived investments accounted for 83% of total fiscal revenues between 2001 and 2005. Reducing reliance on oil revenues would bring Abu Dhabi into line with international benchmarks and best practices. By the end of 2030, some 64% of real GDP in Abu Dhabi will come from non-oil sources.

The oil sector will continue to grow to meet international demand and will form a major element of the Emirate’s economy. In parallel, Abu Dhabi will focus on developing other sectors which, combined, are planned to grow at an aggregate annual rate exceeding 7.5%. This growth should help the Emirate achieve a neutral non-oil trade balance.

Despite its mature character, there remain excellent opportunities for growth in Abu Dhabi’s oil and gas sector, including the areas of exploration, production, refining and transport.

Objective is to raise output of crude to 3.5m barrels per day over the next decade

An opportunity exists in the potential substitution of carbon-dioxide and nitrogen to replace significant volumes of natural gas that are currently being reinjected into the Emirate’s oil fields in order to maintain the necessary production pressure. Such solutions will create important synergies with other energyrelated undertakings, such as the Carbon Capture and Sequestration (CCS) project, which is part of the Masdar initiative, being led by the Abu Dhabi Future Energy Company.

Mubadala Development Company, the International Petroleum Investment Company and the Abu Dhabi National Energy Company (TAQA) are also pursuing exploration and production opportunities beyond the borders of the UAE, including in North Africa, Central Asia and the North Sea.

The Abu Dhabi Oil Refining Company (TAKREER) and IPIC are pursuing new projects in the refining sector, which will nearly triple the Emirate’s current refining capacity of 485,000 barrels per day.

Abu Dhabi is also making major investments in its oil and gas transportation infrastructure, supplementing its existing fleet of oil and LNG tankers via the construction of a 1.5 million barrel per day pipeline to the Emirate of Fujairah, which will allow for significant oil exports outside the Straits of Hormuz.

Diversifying energy sources is a key strategy to ensure future energy security and Abu Dhabi will lay the foundations for this diversification by exploring alternative energy sources to reduce dependence on natural gas (which fuels 100% of domestic electricity generation).

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Peak Oil The next global crisis

Globally, approximately 85 million barrels of oil are consumed each day. Annually, that works out at over 31 billion barrels. Speaking about the global oil situation, Luis E. Giusti, Director, Shell and former CEO of Venezuela State Oil Company, described it thus; “If you want to meet the demand, you will have to supply, from the current level of 85m barrels per day to 120m in year 2030. But in order to meet that profile, you would have to supply oil in the order of 200m barrels per day, because a lot of that new oil will have to compensate for the depletion of existing wells.” Oil has been powering the industrial world for more than 150 years and has been the catalyst for the modern world in which we live. The consumption of oil globally is thought by many to have reached its peak, meaning that production of known reserves has entered, or may soon enter, terminal decline.

Years Peak Oil reached in specific Countries Columbia

2004

Britain

2002

Venezuela

2000

Trinidad & Tobago

1977

Iran

1976

USA

1970

The Middle East is possessed of two thirds of the world’s oil, and is thought to be the only region where production has not yet peaked. In the early 1970s, over half of the globe essentially didn’t use any oil. The only serious consumers were Europe, North America and to a lesser extent, Japan. Today however, the picture has changed completely, with all of the countries of the world competing for the same finite natural resources to power their domestic economies.

China’s Insatiable Appetite for Oil Due to the rise of emerging markets, demand for energy is rising faster than predicted. China is exponentially expanding its need for energy. China’s need for energy is projected to increase by 150% by 2020. To sustain its growth, China requires increasing amounts of oil. Its oil consumption grows by 7.5% per year, seven times faster than the U.S. Once a society in which the bicycle represented the most common form of transport, most urban Chinese believe they will own a car in five years. With automobile numbers growing at 19% a year, projections show that China could surpass the total number of cars in the US by 2030. A report by the International Energy Agency predicted that by 2030, Chinese oil imports will equal imports by the U.S. today.

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China has been rapidly acquiring interests in countries rich in hydrocarbons like Kazakhstan, Russia, Venezuela, Sudan, West Africa, Iran, Saudi Arabia and Canada in the expectation of growing future dependence on oil imports. Despite these efforts to diversify its sources, China has become increasingly dependent on Middle East oil. Today, 58% of China’s oil imports come from the region. By 2015, the share of Middle East oil will stand at 70%. Americans are profligate users of energy and will continue to be as long as oil is cheap. The US uses 25% of all oil consumed, whereas it only represents 5% of the world’s population. Many observers recognise that dwindling reserves and increasing demand are two conflicting factors which are bound to intersect in the near future. The consequent increase in price will be the catalyst for a crisis similar to those of 1973 and 1979. In 1973, OPEC (the Organization of Petroleum Exporting Countries, of which the UAE is a founding member) decided to limit production in response to the US stance on the Arab-Israeli conflict. This lasted for six months and served to create chaos in western markets that could no longer access the cheap oil they needed. In 1979, the overthrow of the US installed puppet leader, the Shah of Iran, in the Islamic revolution, a coup d’etat lead by Ayatollah Khomeini resulted

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in another oil crisis which drove prices up and had devastating effects on western economies. These historical examples illustrate the geopolitical power held by a small Emirate like Abu Dhabi, as the leading federal state of one of the main countries in the OPEC group. Fortunately for a consumer country like the US, relations with OPEC have generally proved favourable over the course of time. In 1971, an OPEC meeting decided that oil was to be traded in US dollars, no matter where in the world, or between whom, the transaction took place. Due to the fact that everybody had then to buy dollars in order to buy oil, the US Federal Reserve was put in an enviable position. Central Banks around the world stockpiled dollars for their oil needs, enabling the US to be the number one debtor nation in the world today.


Adding value to Hydrocarbons Abu Dhabi National Chemicals Co. Interview with HE Mohamed Al Azdi, Chief Executive, Abu Dhabi National Chemicals Company

Abu Dhabi Economic Vision 2030

Although the production, marketing and export of petrochemicals are all well developed economic activities in Abu Dhabi, as demonstrated by the Emirate’s highly successful fertilizer, ethelyne and polyethelyne ventures, the Emirate has the

A new entrant into the petrochemical scene, ChemaWEyaat’s mission is to add substantially to the diversification of Abu Dhabi’s economy by adding value to its petroleum reserves and to compliment industry leaders such as FERTIL, Borouge and Abu Dhabi Polymers in the process.

opportunity to build upon this platform, expanding its industrial base into a major global industry for which it has excellent comparative advantages.

HE Mohamed Al Azdi, Chief Executive of Abu Dhabi National Chemicals Company, otherwise known as ChemaWEyaat is keen to point out that, “Everybody knows that oil and gas is the first and foremost sector in this country, but it is important to keep in mind that the chemical industry is the number two sector. The leadership is on a drive to achieve the best value from our finite reserves and so, adding value by chemical processing is a way to enter new markets and diversify our economy.” ChemaWEyaat was announced by Emiri Decree on 26th November 2008. Three state-owned enterprises are the shareholders of the company: - International Petroleum Investment Company 40% - Abu Dhabi Investment Council 40% - Abu Dhabi National Oil Company (ADNOC) 20%

The company is to operate in a clusters zone; the purpose of which is to organise the chemicals supply chain into sub-clusters to assure maximum efficiency in adding value to the readily accessible hydrocarbon reserves. The enterprise is currently developing the Tacaamol Project in the Khalifa Port Industrial Zone (KPIZ) in Taweelah and will begin developing a master plan for Madeenat ChemaWEyaat Ras Al Dhbaiah in the western region for this purpose. According to HE Mohamed Al Azdi, Chief Executive of ChemaWEyaat, “The company is to act as a catalyst for the development of the industry. Chemical cities are to become a platform for growth.” “We have the benefit of developing our complexes at a time when most such installations globally are growing older and are located in areas that do not have the same competitive advantages of location and feedstock availability that Abu Dhabi offers. We can therefore position ourselves to produce a best-in-class focal point for the chemical industry. In converting oil and oil resource into chemical products such as fertilizers and organic and non-organic chemicals, based on indigenous resources.”

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The case for renewable energy Today, the energy industry is facing major challenges due to a confluence of macroeconomic factors.

1.

Peak Oil

According to most estimates, we have now reached peak oil, or if we have not, we are sure to within the next decade. The implications of this are massive as it means that the rate of oil production has now entered terminal decline. The gargantuan increase in the output of affordable oil since the turn of the century was the driving force behind the creation of the prosperity that accompanied it which lead to population growth and the modern way of life. Every indication shows that demand for oil is set to increase considerably in coming years. This fact combined with dwindling oil reserves globally, mean that the race to gain exploration and production rights to remaining oil fields is fierce, as evidenced by the multitude of geopolitical conflicts occurring in places where oilfields or pipelines are located. 2.

Climate Change

The urgent necessity to address climate change has coincided with the issue of peak oil to create a problem that requires globally coordinated action in creating viable alternatives to fossil fuels.

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Cleantech Green Energy projects have therefore become major recipients of investments in recent years as the necessity to expedite their usage has become paramount. Solar, Wind, Hydro and Geothermal projects are now paving the way forward for humanity to avoid the harshest of the consequences that will result from the twin issues of peak oil and climate change. 3.

The Financial Crisis

Although in the short term, the financial crisis has resulted in a decrease in energy demands, ultimately, the demand is set to rise considerably due to an increase in living standards in developing countries, China in particular. The financial crisis has affected the energy industry because a large number of projects have run into financing difficulties due to the lack of liquidity in the global banking system. There are, therefore, a lot of companies that have viable business plans, but cannot proceed due to a lack of capital. This is particularly true of start-ups that would have relied on venture capital, especially in the US. As fossil fuels dwindle and their effect on the climate and their accessibility becomes prohibitive, viable Cleantech becomes increasingly necessary.


Fossil Fuels

Cleantech

Peak Oil

Climate Change Financial Crisis

“This could be the largest economic opportunity of the 21st century.”

- Venture Capital Firm Kleiner Perkins Caufield and Byers.

“We’re talking about nothing less than the reindustrialization of the whole planet”

- Billionaire Venture Capitalist John Doerr.

The US Administration’s New Green Policies “...[Obama] will invest $15 billion a year over the next decade in renewable energy, creating five million new, green jobs that pay well, can’t be outsourced, and can help end our dependence on Middle East oil.”

“You are here today because you recognise climate change as an opportunity as well as a threat. You understand that the shift to a low-carbon economy opens new revenue streams and creates new markets. You see the chance to usher in a new age of green economics and truly sustainable development. And you seek to address climate change in ways that are both affordable and promote prosperity.”

-- UN Secretary Ban-Ki Moon at the Investor Summit for Climate Risk.

-- The Wall Street Journal

The new green policies of the US Administration will have a considerable impact on the market. Companies in the US that are in receipt of the Government capital will spearhead innovation and those that are not in receipt will be left behind. This means that there will be a considerable tranche of companies seeking foreign capital in order to service the needs of the burgeoning cleantech industries.

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The World Future Energy Summit “The Davos of green energy”

From the 18th to the 21st of January 2010, ADNEC, the Abu Dhabi National Exhibition Centre became the international focal point for defining the future of the most critical issue facing mankind – the future of energy. It is somewhat ironic that such an event was taking place in a small desert Emirate that holds the sixth largest oil reserves globally and is the world’s tenth largest oil producer, but therein lays the foresight of a leadership cognizant of the finite nature of its hydrocarbon reserves. An opening ceremony hosted by HH Sheikh Mohammed bin Zayed Al Nahyan, the Crown Prince, kicked off what proved to be an immensely successful gathering which brought together project developers, financiers, government delegations and press from all corners of the globe. The vast exhibition floor space was occupied by a variety of national clusters, where companies from particular countries grouped together to convey their various national strategies over four days of meetings, presentations, talks and speeches. A multitude of topics were dealt with in seminars, press conferences, Q&A sessions and roundtable discussions. The issue of how to attain grid parity was a recurring theme, as were carbon capture and sequestration, air, water and waste issues, fuel cells, green building, aviation, transport, 2nd generation biofuels and the smart grid.

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One of the most prominent and well-attended exhibition spaces was of course, Masdar, the host and the development hub for new energy technologies to drive the commercialization and adoption of technologies in sustainable energy, carbon management and water conservation. The stateof-the-art stand was complimented by interactive displays which informed the user of the cutting edge technology being employed in the development of the world’s first carbon neutral city. Chinese Solar panel manufacturers were out in force trying to drum up business, particularly in lucrative markets such as Spain and Germany, the latter’s solar feed-in-tariff arrangements and tax structures providing a keen incentive.

Copenhagen The Cop 15 Summit failed to live up to the hopes and aspirations of many. Finalising diplomatic agreement on exact, legally binding carbon targets proved elusive. It is now up to national governments to take the reigns themselves and bring each nation into line with what they anticipate will be the levels agreed in Mexico at Cop 16. The World Furture Energy Summit, the first major international green energy gathering after the Copenhagen debacle got down to serious business on

the second day by addressing the fallout in a plenary session entitled, “What now after Copenhagen?” Nobel laureate and chairman of the United Nation’s Intergovernmental Panel on Climate Change, Indian scientist, Rajendra Kumar Pachauri joined Ditlev Angel, CEO of Vestas, the world’s largest manufacturer of wind turbines for a post-session press conference. When asked how much it would cost to achieve the aims of Cop 15, Pachauri replied, “It is a good and pertinent question. So far, the only estimate that we have is that it will cost just less than 3% of global GDP up to 2030. The reality is it will actually be much less if you take into account the core benefits such as improved health as a result of improved air quality, energy security and agricultural production.” When asked if the lack of a binding agreement in Cop 15 had adversely effected the green energy investment climate, Pachauri pointed out that “countries like South Korea and China are going ahead irrespective”, and it will be sooner rather than later that we will have a booming green energy investment environment.

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Pachauri was then questioned as to whether he thought that the forthcoming summit in Mexico City will produce an accord. He replied, “We were all very disappointed with the outcome of Cop 15. Things do not always go to script. We have to see the glass as half full and work with what we’ve got. We have a short period of time for the world to get its act together, and it will take a superhuman effort, particularly on the parts of the US and developing countries. It is a daunting, but doable prospect. We need leadership of the highest order from countries. I can see it happening, once there is no bickering. We need a major grass roots push from business, civil society and governments.” Norway is one of the benchmark countries for Abu Dhabi’s Vision 2030 because, despite the fact that it is rich in hydrocarbon reserves, it powers 95% of its domestic energy consumption with renewables, enabling it to export 100% of its gas. Minister of Foreign Affairs of Norway, Jonas Gahr Store asserted in a press conference at the World Future Energy Summit that: “I believe that energy prices will go up over time. What the price will be, I do not know. But the real issue facing us is carbon. We need to put a price on carbon. Then many other issues can be handled.” He then said that we needed to wait until individual national action plans were decided individually and delivered to the committee in February,

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“This will give us a starting point to see where we are and ascertain the best way to proceed.” Unfortunately, since then, the plans have not been forthcoming, and the idea has been scrapped and all will have to be thrashed out again in Mexico. The Foreign Minister further boosted Norway’s green credentials when asked whether the EU should raise carbon reduction targets. “In Norway, we are committed to 30%, but we are ready to go to 40%. On balance, Norway’s renewable energy performance is second to none.”

Green Banking In addition to Deutsche Bank Climate Change Advisors, one of the major banking sponsors of the event was Standard Chartered Bank. Based in Asia, the Middle East and Africa, the bank operates on the periphery of what most major international banks would consider their core market and has a specific Renewable Energy & Environmental Finance (REEF) section to facilitate the burgeoning green energy market in these regions. Peter Gutman, Global Head of REEF, Standard Chartered Bank, with headquarters in Singapore, outlined to CEO Financial why Standard Chartered had such a vested interest in the summit, “We operate in Asia, the Middle East and Africa. These markets are the most susceptible to climate change. It becomes apparent if you look at our market


exposure, that the effects of climate change have the potential to put some of our assets at risk over the long term. For this reason, we have a vested interest in the long term success of renewable energy and the environmental sector. We operate in all of the various facets of the sector, from wind, solar and geothermal to waste, water and clean air projects. We can provide project finance and sophisticated investment banking services, all tailor-made specifically for the sector. We are familiar with the cleantech space and can therefore work well with clients in helping them to achieve their objectives. We are operating from a strong base. We appreciate and recognise the interplay of policy and finance. That is a crucial area when it comes to renewable energy.”

ADNOC Across from the Masdar stand was that of ADNOC, the Abu Dhabi National Oil Company and its Group of Companies. ADNOC is the engine of wealth for the entire economy of Abu Dhabi and as such, can probably be cited as the single most important commercial organisation in the Emirate. CEO Financial spoke to ADNOC Spokesperson Mr. Mohamed Al Shamma, ADMA-OPCO (Abu Dhabi Marine Operating Co.) Public Relations Manager about the event and how important it is to the Emirate. “The eyes of the world are on Abu Dhabi. This is a very important summit. After the failed attempt to achieve global consensus on carbon emissions in

Copenhagen last year, there is a lot of frustration. The World Future Energy Summit gives us an opportunity to find solutions by working together to counteract that disappointment. We are all here to work in collaboration to come up with recommendations as to how we can move forward in unison.” muses Shamma. “Obviously, we are fundamentally an oil company, but despite that, ADNOC is making considerable inroads into sustainability. In late 2009, all of the general managers of the 15 ADNOC companies signed an agreement to maximise sustainability at all possible points in their respective companies’ processes. This runs the gamut of everything from minimising the consumption of energy in the production processes to maintenance of systems with a view to increasing their longevity, all the way to issues such as the minimisation of flares, an area in which we have achieved considerable success.” “As nationals, we know that we are very fortunate to be from Abu Dhabi. The vision of the late Sheikh Zayed is planted in our hearts and minds, and that vision is being vigorously implemented by Sheikh Khalifa bin Zayed Al Nahyan and Sheikh Mohammed bin Zayed Al Nahyan. This summit shows that Abu Dhabi is serious about leading the world in the next generation of energy production and it is a testament to the mature leadership of the Emirate.” The Summit was closed by keynote speakers, Olafur Ragnar Grimsson, the President of Iceland and H.S.H. Prince Albert II, Sovereign Prince of Monaco.

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Masdar The city of the future

Despite having the second highest carbon footprint per capita in the world (after Qatar), Abu Dhabi, in its bid to become the global beacon for all things green, has created the Abu Dhabi Future Energy Company, otherwise known as Masdar. This ambitious project aims to create the world’s first truly carbon-neutral city and coincides with Abu Dhabi’s stated goal of generating 7% of its electricity from renewable energy sources by 2020. Masdar is a multibillion dollar, multi-faceted alternative energy project that was established in 2006. The project encompasses all areas of the entire future energy value chain. Masdar is the catalyst for the annual World Future Energy Summit, and the incubator for a myriad of innovative business ideas, concentrated on a multitude of different areas, culminating in an anticipated breakthrough which will dictate how cities will be designed henceforth. Occupying the central exhibition space at this year’s World Future Energy Summit, Masdar’s vision is emphatically conveyed via special interactive video displays. They outline the various aspects of the project, from the Smart Grid through which the electricity generated by the recently connected 10 MW solar power plant will run, to the unmanned transport pods which will ferry passengers around the city in the absence of cars.

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Following the connection of the solar power plant (a first in the Middle East), at a cost of $50.3m, Dr. Sultan Al Jaber, CEO of Masdar remarked that, “the connection of this plant marks an important milestone in the development of Masdar City and in our Emirate’s history. We believe this is just the first delivery of the rich potential of solar energy, and we will continue to deliver clean sources of energy to Abu Dhabi and beyond.” IRENA Another breakthrough for the Emirate in establishing its credentials as the go-to place for green energy know-how globally was the decision to establish the new headquarters of the International Renewable Energy Agency (IRENA) in Masdar City itself, on the outskirts of Abu Dhabi City. IRENA is the first intergovernmental agency concerned with the promotion of environmentally friendly initiatives. It is clear that Masdar is open to the receipt of innovative ideas, but its experience since its inception has brought it to the point where it does not suffer fools gladly. In order to expedite their screening process, they have developed a guide as to how to submit proposals for consideration. The general tenor of the document suggests that one must have all due diligence and feasibility studies conducted and verified before engaging. The actual city of Masdar will not be in operation until 2013, but the MIT linked educational

institution, the “Masdar Institute of Science and Technology” has started operations on-site and is using water from Abu Dhabi’s grid. They are keeping track of the carbon emissions from this water use and are studying ways to offset them. “Our goal is to be carbon-neutral by the time the city is built,” Jay Witherspoon, operations director and technology leader of CH2M Hill, consultant to Masdar said. He added that, “the main uses of water are for district cooling, potable water and irrigation to make the city green”. Masdar plans to drill 5,000-meter-deep wells in search for water hot enough to propel power generators for the zero-carbon city. The city is expected to need 12,000 cubic meters of water a day when it is completed, according to Ameena Al Kulaib, manager of Masdar’s water department. Masdar and the World Future Energy Summit however, do not constitute the entire “green picture”. Abu Dhabi Inc. has further advanced its green agenda in typically well coordinated moves throughout a variety of sectors. One such example is Aabar Investments foray into the area of electric cars after its purchase of 4% of Tesla Motors, a leading producer of electric cars. Aabar, partly owned by the International Petroleum Investment Company (IPIC), one of the government Sovereign Wealth Funds, bought the stake from Stuttgart-based Daimler AG, of which Aabar is a major shareholder.

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Abu Dhabi goes Nuke Emirate’s new nuclear programme hailed as a best practice model

A South Korean-led consortium recently won the US$20 billion contract to build four nuclear power plants in the UAE. “Our relationship with South Korea, which has seen sustained growth in recent years, has ushered in a new era of strategic partnership which will serve the interests of the two countries,” Sheikh Khalifa, Ruler of Abu Dhabi, was cited as saying by the state news agency WAM. The global economic slowdown has acted as an impetus for financially robust governments, such as Abu Dhabi, to ramp up power production while it is cost efficient to do so. The United States was very happy with how the UAE went about its nuclear programme, garnering international agreement with full disclosure at all points along the way, not to mention, dangling the carrot of the tender to build the infrastructure itself. “We should not only support the UAE deal, but it could be used as a model,” Jon Wolfsthal, a former US government monitor at North Korean and Russian nuclear facilities and an advisor to Joe Biden, the vice-president of the US, told Bloomberg prior to the award of the contract. “The decision to give the contract to South Korea indicates that it has been mainly driven by commercial considerations,” said Eckart Woertz, an economist at the Gulf Research Centre in Dubai.

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“Given the strategic importance of the whole project and the earlier framework agreements with France and the US, this has come as a surprise to many” he continued. When news first surfaced that Abu Dhabi wanted to go down the nuclear route, some sceptics found it hard to believe. But in a white paper released in April 2008, the UAE Foreign Ministry laid out the reasons for choosing such a path. The annual peak demand for electricity in the UAE is likely to rise to more than 40,000 MW by 2020, a cumulative annual growth rate of about 9% from 2007. Current capacity can only match about 50% of that amount, creating a large supply gap. The use of crude oil to meet the demand “would entail significant financial and environmental penalties for the UAE,” according to the Foreign Ministry. Emirates Nuclear Energy Corporation (ENEC) said the South Korean group was chosen for its competitive price, its ability to deliver on time and the company’s well-developed plans for Emiratising the nuclear workforce. ENEC also liked the fact that the Korea Electric Power Corporation (KEPCO) was clearly in charge of the rest of the consortium. Nuclear power will make up approximately 25 per cent of Abu Dhabi’s electricity supply by 2020, according to Mohamed al Hammadi, the ENEC chief executive. Renewables such as solar power are expected to contribute seven per cent of the Emirate’s electricity needs by the same year.


Financial Sector


Pillar:

An optimal, transparent regulatory environment

Policy Focus: Build an open, efficient, effective and globally integrated business environment

Policy Focus: Adopt disciplined fiscal policies that are responsive to economic cycles

Policy Focus: Establish a resilient monetary and financial market environment with manageable levels of inflation

Policy Focus: Enable financial markets to become the key financiers of economic sectors and projects At a time when world markets are in a state of flux, Abu Dhabi remains one of the few markets with high liquidity, an upward growth trajectory, a credible, long term development plan and a strong, if not invunerable, banking sector. New corporate governance legislation is being introduced to regulate capital markets to international standards.

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The Abu Dhabi Economic Vision 2030

Capital Markets •

Abu Dhabi will work to improve the depth and stability of the money and capital markets and make them less prone to external shocks.

Abu Dhabi is still an emerging centre for IPO offerings and opportunities, and has much room for expansion.

When it comes to the equity market, Abu Dhabi already attracts a large proportion of the private equity investment in the MENA region, but there is further room for development in IPO processes and performance, as well as in stock market regulation and sophistication.

Time-to-listing periods, which currently stand at an average of three to four months will be reduced.

At present there is a limited number of pension funds and hedge funds in the market, and Abu Dhabi will look at their development locally as well as encouraging the presence of foreign funds.

The strict currency pegging to the US dollar has left the Government with few monetary policy tools to manoeuvre with. In particular, the ability to use interest rates as an effective monetary tool is restricted.

There is enormous potential to develop and expand the debt securities market, which includes bonds and sukuks, and is currently in its infancy.

New fiscal revenue sources will be identified and stable sources such as government bonds will be used to finance the budget. The aim is to decouple the Government finances from oil revenues and to maximise the Government’s future spending power.

Loans and deposits are growing fast, but most savings are generated by the public sector and are used to finance private sector credit.

After years of fiscal prudence, Abu Dhabi is in a strong financial position; adopting a more proactive fiscal policy will enable the Emirate to more effectively respond to and influence economic cycles.

The time has come to upgrade fiscal policy in order to leverage the Emirate’s strong financial position and make better use of fiscal tools to stimulate and stabilise the economy as the prevailing economic conditions require.

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The Abu Dhabi Securities Exchange - ADX

Abu Dhabi Economic Vision 2030

Interview with Tom Healy, Former Chief Executive, ADX

The Abu Dhabi Securities Exchange (ADX) has witnessed remarkable developments in recent years, hosting a steadily increasing number of listed companies. However, as a primary platform for financial activity in the Emirate, it is still in an embryonic stage of development. For example, the ADX remains highly concentrated, with a small number of companies generating the majority of the value traded and market capitalisation.

Former Chief Executive of the Irish Stock Exchange, Tom Healy has come to the end of his two and a half year tenure at the helm of the ADX. Although Abu Dhabi’s reserves cushioned it from the worst effects of the economic crisis, there were a number of sectors of the economy which could not be protected, due to their interconnectedness with the modern global system. One necessary component of that, is of course, the capital markets. Over 40% of the value of the ADX was wiped clean off the board altogether in 2008. One of the things that Tom Healy, as CE of the ADX throughout the period is pleased about, is that the exchange maintained its integrity by staying open throughout. “There was pressure from some quarters to close the exchange in order to mitigate the effects of the freefall we were seeing. In fairness to the powers that be however, we were never asked to close the exchange and we therefore maintained our international credibility.” says Healy, “The Government never poured any cash into the exchange – it ran on purely free market principles throughout the duration of the correction.”

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“The thing with regulation”, muses Healy, “is that you could spend 90% of your time, getting the last 10% of the legislation right. For a market at this level of development, the incoming regulatory legislation is sufficient.” The CE is bullish about the potential of the 67 listed companies that comprise the exchange and cites the fact that the domestic companies listed, focus in the main on the domestic market, as a reason for optimism.

Abu Dhabi Vision 2030

Abu Dhabi is currently in the process of introducing new corporate governance legislation in order to regulate the relatively new capital market in a fashion more in line with international best practice. Despite the fact that some quarters insist that the regulatory environment is not stringent enough, Healy is of the view that the incoming corporate governance legislation is adequate for a market of Abu Dhabi’s current state of maturity.

At the same time as the currently undersized debt market evolves, it will be bolstered by new support structures such as rating agencies and secondary markets for liquidity. Such initiatives will bring a new degree of depth to the market that will encourage future growth and bring increased efficiency.

Over the long term, one of the central themes of the financial side of Vision 2030, is for Abu Dhabi to become an issuer of bonds. “This is a major differentiation that has to be pointed out to the international community. Right now, Abu Dhabi acts primarily as an international investor through ADIA and the various sovereign wealth funds. It will continue to act as an investor in utilising oil receipts, however, it will also soon introduce a new dynamic by becoming an issuer of bonds.” asserts Healy.

“It’s quite an unusual situation when you have large companies that are focused mainly on quite a small domestic market. It is a testament to the liquidity that is in the market as a result of the petro-reserves. When these enterprises turn their attention outward, as many are starting to do, the results could be very promising. Our job is to get this message to the people who advise investors and potential investors.”

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The Abu Dhabi Economic Vision 2030

Banking

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The Emirate is already one of the more convenient locations in the world to access loans. It is made more attractive through competitive lending rates, a conservative and secure monetary policy, a system bearing no significant risks and a healthy fiscal position free of public debt concerns.

Innovation in banking practices will also play a large part in increasing the role of GCC-based banks in areas such as mergers and acquisition (M&A) financing, which is presently dominated by large non-GCC banks and financial institutions.

Abu Dhabi’s top 3 banks account for 50.7% of overall UAE bank assets, but must continue to develop in order to remain competitive in the face of mergers and consolidation among regional players.

Banks need to look beyond Abu Dhabi and the UAE and begin to move into regional and global markets.

New savings instruments will be introduced and a local mechanism organised that will help to absorb excess liquidity in the economy and put it to more productive use in generating growth engines.

Expensive rents and land prices have been the main driving factor in supply-demand dynamics creating inflationary pressures. While supply-demand dynamics are the main drivers of inflation in Abu Dhabi, monetary and imported inflation must also be addressed.

Abu Dhabi needs to encourage greater rates of saving and to develop new methods with which to lock wealth into the economy and employ it in long-term productive methods. Drawing excessive money away from consumptive patterns in the economy will help to dampen inflation.

The creation of more long-term savings products will feed directly into the financial markets and provide them with more long-term stability and allow policy makers to focus on further economic development.

Banks will be encouraged to invest their capital through foreign channels to negate the effects of excess liquidity in the local system and further reduce domestic inflationary pressures.

There is a continued regional trend towards Islamic finance. Further capitalisation and development of the Islamic banking sector in Abu Dhabi will provide another source of funding to future developments.

Sectors such as construction and trade consume a large share of overall allocated credit and contribute relatively little to economic output.


Banking in Abu Dhabi A bird’s eye view

Expanding its financial sector is a stated priority for Abu Dhabi in the vision document. The UAE’s financial sector already rivals that of Bahrain, the Gulf’s first banking hub, with the Qatar Financial Centre following closely on both their heels. The UAE will not participate in the forthcoming GCC single currency. It remains to be seen what the effects, if any, of this will be. There was ongoing speculation that the national currency of the UAE, the Dirham may have been depegged from the US dollar, but this did not come to pass. Currency speculators exacerbated the ill effects of the financial crisis when they moved funds into the ADX anticipating the depegging, and then withdrew them when it did not happen. The UAE has 24 national banks with 638 branches between them. In addition to that, there are 28 foreign banks operating in the jurisdiction. Foreign banks are subject to a legal maximum of eight branches a piece, with the result that there are 82 foreign bank branches throughout the country. The financial sector of the UAE is regulated at federal level by the UAE Central Bank, the authority on monetary, credit and banking policy.

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Economic growth born of high oil prices and low interest rates enabled the banking sector to expand with a Compound Annual Growth Rate (CAGR) of 32.2% during the five years leading up to 2008. Total assets of $403bn in 2008 meant that the UAE had the largest banking sector in the Gulf Cooperation Council (GCC). Subsequent challenges ensued following the international financial crisis of 2008, the effect of which was tempered by a $13.6bn liquidity facility for the banks provided by decisive and timely action from the Ministry of Finance. Following government guarantees of bank deposits and a further injection of liquidity to the tune of $4.4bn in 2009, the Emirate’s well-positioned banking sector weathered the storm better than most. The National Bank of Abu Dhabi is the largest bank in the Emirate and the second largest in the wider UAE. It is 70% owned by the government investment arm, the Abu Dhabi Investment Council.

In accordance with Vision 2030, the National Bank of Abu Dhabi is expanding into international markets. It has extensive activities abroad in markets such as Oman, Kuwait, Egypt, Sudan, London, Washington, Geneva, Paris, Hong Kong, Jordan and Libya. The second largest bank in the Emirate, Abu Dhabi Commercial Bank is following suit. ADCB, which is also part-owned by Abu Dhabi Investment Council to the tune of 65%, is pursuing expansionist strategies in Egypt and Malaysia. There are a growing number of Islamic banks due to public demand. The Abu Dhabi Islamic Bank was established in 1997 and has grown from strength to strength under the leadership of CEO Tirad Mahmood. It is also joined in the Sharia compliant banking sector by Al Hilal Bank, a 100% government owned Islamic bank, the 8th in the UAE, which has also recently expanded into Kazakhstan.

According to Michael Tomalin, Chief Executive, “The National Bank of Abu Dhabi is strong and stable. We closed 2009 with flat earnings at a time when others were less fortunate. We have made a large amount of provision and are in steady position going forward.”

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The eye of the storm Interview with Michael Tomalin, Chief Executive, National Bank of Abu Dhabi. The CEO of Abu Dhabi’s largest bank recounts his experience at the epicentre of the financial crisis of September 2008. “Well, I was actually in Washington DC at the time for the IMF meeting. There was a very frenetic atmosphere and there was a genuine fear as to what might happen. I wasn’t talking directly to (Hank) Paulson, but I was talking directly to very senior people who were talking to him when we were within hours of total meltdown. I was surprised to see Lehman Bros. go under. When everybody saw the fallout from that, it became apparent that we were in the middle of a very serious storm and there was almost a sense of being aboard the Titanic. Personally, I never thought that there would be total meltdown. Ultimately, people realised that we were

all in it together and it turned out to be a very nasty jolt rather than a systemic collapse.” “Banking depends on confidence. All banks are structurally short – their continued viability rests on the presumption that there won’t be a run on their liabilities. Ultimately, having seen what happened as a result of the demise of Lehman Bros., people came to their senses when they realised that the banking system is integral to every aspect of the economy and cannot be allowed to fail outright. We were really talking about the very destruction of the money system itself at one point.”

Islamic Insurance - a growth market Interview with Ousamma Kaisi, General Manager Abu Dhabi National Takaful Company Belonging to the same group as Abu Dhabi Islamic Bank, the Abu Dhabi National Takaful Company is one of the main providers of insurance in the domestic market. Takaful is a system of insurance that adheres to the principles of Sharia Law, providing an insurance alternative that is consistent with the laws of Islamic doctrine. While General Manager of Abu Dhabi National Takaful Company, Ousamma Kaisi, sees the takaful market as still in its infancy, he sees vast areas of opportunity for growth, “There has been an influx of takaful companies here in the market. Many have come from Dubai. Our strategy however, is to build up our market share and reserves over the long term. An insurance company is built like a house – brick by brick. At the moment our

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business is approximately 60% corporate and 40% individual.” An interesting component of the takaful business is the Sharia Committee, a group of scholars who meet once a quarter in order to scrutinise the company’s investments and make sure that all are in line with the principles of Islamic Law. Any investment which is held to be in conflict with the Sharia is removed from the portfolio in due course. This conservative investment policy sets the scene for the slow and steady growth for which Kaissi is aiming. “We adhere to a very conservative investment policy when investing the funds of our customers in the financial markets. We are not aggressive”, asserts the general manager.


Physical Infrastructure


Pillar:

Premium infrastructure assets

Key Priority:

Infrastructural development

Policy Focus:

Develop a sufficient and resilient infrastructure capable of supporting anticipated economic growth

The Urban Planning Council’s “Plan 2030” represents the physical manifestation of “Economic Vision 2030” in terms of the infrastructure on the ground. The Department of Transport is updating the road and public transport infrastructure with a view to making Abu Dhabi one of the most easily navigable urban areas in the Gulf. Property development in the new central business district of Reem Island, and the necessary construction projects that go with it are being coordinated to make Abu Dhabi one of the world’s most futuristic cities.

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The Abu Dhabi Economic Vision 2030

Physical Infrastructure •

Abu Dhabi’s economic growth is forecasted to create an anticipated two-fold growth in population.

Current infrastructure capacity will not be sufficient to cope with the levels of population growth envisaged over the next two decades.

The Emirate is focused on building one of the most modern, efficient and effective infrastructure networks in the world, while taking the necessary steps to protect its environment.

Abu Dhabi will develop world-class infrastructure that is not only capable of supporting and sustaining the anticipated levels of economic growth, but acts as a catalyst for that growth, encouraging investors to take advantage of the Emirate’s excellent access to utilities, transport networks and ICT.

The 4 key objectives for infrastructural development are:

-Enhanced energy security to meet future demand

-Efficient and safe transport infrastructure

-Efficient ICT infrastructure and increased adoption

-Environmental sustainability

Cities, ports, airports and industrial areas are conveniently accessible by direct roads, making transportation times and costs within the Emirate far lower than average.

Work is underway to improve and promote public transport across the Emirate.

Looking ahead, Abu Dhabi will build a world-class public transport system to ensure that residents have choices when it comes to getting around the main cities (eg. Al Ain, Abu Dhabi) and between the main tourism, business and residential centres in Abu Dhabi.

Plans are being discussed for a city metro-system in Abu Dhabi as well as an Emirate-wide rail network and transport links to islands that are being developed as tourist resorts.

With greater economic growth and diversification into export-oriented industries and manufacturing, cargo volumes both into and out of Abu Dhabi’s major port, Mina Zayed, are expected to increase dramatically.

The decision to move the port from its current location on the edge of Abu Dhabi city to the new Khalifa Port and Industrial Zone at Al-Taweelah ensures excellent infrastructure and enough port capacity to manage the anticipated growth in imports and exports. Businesses in Abu Dhabi can also easily access the seaport and airport in nearby Jebel Ali.

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Plan 2030

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The Urban Planning Council is the body charged with the massive task of coordinating the physical restructuring of Abu Dhabi on the ground, in accordance with the necessities of Vision 2030.

“Plan Abu Dhabi 2030” is the document that maps out the strategic development of the city and its surroundings. It was a collaborative effort between many government entities.

This Urban Structure Framework Plan, “Plan Abu Dhabi 2030”, presents a coherent picture for the future of the City of Abu Dhabi as an environmentally, socially and economically sustainable community and as an increasingly important national capital. It provides for a way to grow and take advantage of the economic opportunities at hand without sacrificing the best of the city and while adding new elements to make it a great world metropolis.

The plan provides a vision for use by all entities with an interest in the future development of Abu Dhabi.

It sets an environmental context, confirms an urban structure of land use, transportation, open space, built form and national capital arrangements. It outlines key “building blocks” through which the urban structure will come together logically and organically over time.

The Urban Structure Framework Plan is targeted to the year 2030 and an expected population of over 3 million people.

The Plan will be the guide to [judge] new developments to insure [that they are] consistent with the needs and wants of the people of Abu Dhabi and will come together as a coherent, viable urban whole.

It will also set the direction for regulatory guidelines and zoning.

Under the auspices of the Executive Affairs Authority, the primary formation of the ‘Plan Abu Dhabi 2030’ Urban Structure Framework Plan occurred through the assimilation of all the preparatory findings and generation of ideas for growth at two major working sessions, called charettes, held in Abu Dhabi in February and March 2007.

As the name suggests, it is a clear, viable vision for the future of Abu Dhabi. It is a broadly drawn complex of ideas, directions and patterns. It is not a detailed scheme, articulated property by property. It can be used to evaluate development and growth propositions in a general way, but not to provide detailed guidelines for individual sites. It will be best used in concert with specific site analysis and plan making, where its general plan directions and intentions can be translated into specific terms.


Transport Abu Dhabi’s transport infrastructure falls under the remit of the Department of Transport, headed by Chairman, HE Abdulla Rashed Al Otaiba. The T-shaped island can generally be described as having a good transport infrastructure. A New York style grid road system operates, making the island more navigable than its regional counterparts, Dubai and Doha. An adequate bus service will soon be complimented by automated and air conditioned bus shelters. A new generation of silver metred taxis has been introduced, which makes getting around relatively easy. Taxi prices are among the lowest in the world. The port of Mina Zayed serves the city. A new port, Khalifa Port and Industrial Zone at Al-Taweelah is planned and will soon be introduced to serve the needs of an ever-expanding metropolis. In general, the city can be said to be expanding southeastwards, with developments such as Yas Island, Al Raha Beach and Masdar City in progress.

Customs & Logisitics The Abu Dhabi logistics infrastructure is adequate and being improved upon consistently. Operating a business from the Emirate ensures duty-free trade within the GCC area. Modernisation of the import/export processes by the customs have been well received by the business community. Agility Logistics’ Project logistics manager, Mohammed Jaber describes Agility’s relationship with Abu Dhabi Customs, “As one of only three companies with an actual desk inside Abu Dhabi customs, we operate from a privileged position. We are a golden card holder, meaning that our entire operation has been vetted and certified by Abu Dhabi Customs and we are a trusted partner.” says Jaber. The Abu Dhabi operation of Agility Logistics, the wellrecognised international brand is slightly different from its international counterparts, as it is more than 60% owned by Government super-developer Mubadala.The Agility name is established in over 120 countries with 550 offices.

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Abu Dhabi leads the way internationally in private aviation

Interview with HE Nadir Al Hammadi, Managing Director, Abu Dhabi Aviation

Abu Dhabi Aviation is part of Abu Dhabi Aviation Group, which incorporates Royal Jet, the Middle East’s leading private jet operator and Maximus Air Cargo, the largest all-cargo airline in the UAE. Abu Dhabi Aviation Group is listed on the ADX and is a $1.4bn company. Vision 2030

The Emirate intends to build on its existing aircraft maintenance business to become a world class player in the maintenance, services, repair, overhaul and parts manufacturing segments.

Although the necessity to provide efficient aviation support to offshore destinations was the catalyst for the creation of Abu Dhabi Aviation, the company has taken the initiative to develop a myriad of other aviation opportunities in support of its customer base. Managing Director, HE Nadir Al Hammadi, is proud of how the organisation has developed into a company that not only provides daily flights for long-established oil and gas clients to their remote places of business, but also provides logistical support for the police and the defence forces. Even more noteworthy is the company’s ability to grow by exporting its many areas of expertise to the wider international aviation services markets. A key concept to associate with Abu Dhabi Aviation is depth: of quality and safety expertise, of management expertise, of staff expertise, of financial resources, and of long and varied operational experience. Some 130

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pilots and 130 licensed engineers have contributed to amassing over one million flying hours. Numerous operational and engineering certifications compliment an enviable safety record. In fact, safety has always been an integral imperative throughout the company’s history. The company’s operational and engineering processes have evolved over the past three decades to a capability level whereby it can leverage its resources and competencies to participate as a serious contender in the international aviation oil services sector and other markets. Abu Dhabi Aviation is flexible in its approach to international partnerships, sometimes leasing its aircraft and crews to other countries’ local operators to meet market opportunities. No stranger to international partnerships, the company has established working relationships with organisations in countries such as Brazil, Spain, Iraq, Oman, Yemen, Afghanistan, Pakistan, India, Australia and Papua New Guinea. Whether organisations are dry leasing aircraft or seeking to leverage the expertise of the company’s technical services, Abu Dhabi Aviation’s reputation and depth of resources engenders the confidence of its international business partners, as well as its local customers.


As Nadir Al Hammadi explained, Abu Dhabi Aviation operates in the international sphere under a specific remit; “We are very specialised in our approach. It is not our intention to simply enter a market and compete against domestic providers of similar services. Our expertise in the maintenance, servicing, leasing and operating of helicopters and fixed wing aircraft for mission-specific goals on the part of private partners means that we can provide a tailored service to select strategic partners where there is a mutual interest in working together. Our approach is therefore, to establish strategic alliances internationally with a limited number of organisations, whose interests coincide with our own, and who are in a position to benefit from the kind of bespoke logistical support that we can provide.” The fact that the Red Crescent is a recipient of the company’s support demonstrates that corporate social responsibility is also a priority for Abu Dhabi Aviation. Additionally, a Government-subsidized programme that provides regular flights for those living on Abu Dhabi’s outlying islands underscores the social function of the company.

“When it comes to good management”, mused Al Hammadi, “there are three elements that must be considered when taking any decision; the customers, the employees and of course, the shareholders. Good management is to play a fair role in balancing the interests of all three. A fine balance in this respect can be maintained by being transparent.” Nadir Al Hammadi is, like most of the Emirate’s managing directors, very positive about the Government’s Abu Dhabi Vision 2030 and the clarity of outlook that it has brought to the business environment. “When the Government asserts that it is to do something, it is done. They mean what they say. Vision 2030 is a long-term strategy that has been established from the top. We now have the desirable situation of having everyone from the bottom up, working to fulfil their part of the Vision. There is no conflict; there is only a clear road to the future. Having laid this foundation for the future, much opportunity has been created. Abu Dhabi is a stable business environment in which businesses can grow and develop. We are proud to carry the Abu Dhabi name.”

On the subject of management, the thoughtful managing director reflected on the balancing act so familiar to those in his position;

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w w w. a d a v i a t i o n . c o m

Abu Dhabi Aviation (ADA) provides aviation offshore oil support services to the Emirate of Abu Dhabi’s oil production companies, VVIP passenger transportation services, Search & Rescue for the United Arab Emirates (UAE), crop spraying in the region, aerial construction, seismic support and fire fighting in Europe. ADA is the largest commercial helicopter operator in the Middle East and currently operates a fleet of 82 helicopters. Key elements in all the company’s decision and operation processes are its quality and safety management, philosophy and systems. ADA has held the prestigious Helicopter Association International’s Platinum Award for Safety since 2006 and has achieved over one million helicopter flight hours with an enviable safety record, especially given the extremely high number of daily offshore takeoffs and landings. The company has continued to expand its business through acquiring 50% equity of a VVIP jet company, Royal Jet (www.royaljet.ae), which is the largest commercial operator of Boeing Business Jets (BBJ) and acquisition of 95% equity of Maximus Air Cargo (www.maximusaircargo. ae), a medium-size company based in Abu Dhabi that specialises in global cargo operations.

Abu Dhabi Aviation Address: P.O. Box 2723, Abu Dhabi, United Arab Emirates Tel: +971 2 575 8000 Fax: +971 2 575 7775 E-mail: adava@abudhabiaviation.com


The opening of Marina Square, Reem Island Interview with Mr. Joe Ong, MD, Tamouh

Hailing from Malaysia, Joe Ong, Managing Director of Tamouh, one of the Emirate’s largest property developers, is in buoyant mood. The date for the opening of the first section of Abu Dhabi’s newest destination, the future central business district, Reem Island, draws closer. It is a Tamouh development named Marina Square that is due to start handing over to investors by the third quarter of 2010. This initial development will set the tone for what is to follow and give a distinct impression of what quality community life in Abu Dhabi will be like deep into the 21st century. Consisting of residential, office, retail space and hotels, Marina Square will occupy 66 acres and be home to 8,500 people. A Mosque, open and communal landscaped spaces, swimming pools, playground, day care centres, medical clinics,

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supermarket, a shopping arcade, a marina and Cineplex will all serve to provide an all-encompassing living experience for the initial installment of Reem Island. Smart home enabled functionality will ensure that the very latest in technological advances are to service the 3,440 residential units in the 13 quality residential towers which occupy a built-up space of more than 1.3 million square metres. “This is a lifestyle development”, says Ong, “It is the creation of an entirely new market. We have built Marina Square in a way that is consistent with how people will live as a community in the future. We’ve factored in technological requirements, along with car parking, amenities and cluster-based distinctions between areas in line with all Estidama guidelines. Marina Square of Reem Island will really put Abu Dhabi at the forefront of lifestyle design. The delivery of the Marina Square will be led by a dedicated team to ensure the seamless handover of a project that has generated significant anticipation and enthusiasm amidst our stakeholders and ultimate


home owners. Furthermore, this accomplishment firmly reiterates our commitment to deliver on our promise”. As one of the major developers in Abu Dhabi, Tamouh is necessarily, a large piece of the jigsaw that is to assemble Plan 2030. When asked what he expects Abu Dhabi to look like when Plan 2030 is fully implemented, Joe Ong is decisive with his reply. “Well, the planning was initiated by the Urban Planning Council (UPC) with a group of expert town and city planners. Today the population is about 1.3 million, and that is expected to double within the next twenty years, so there is clearly going to be a lot of development required in order to facilitate that.” The Urban Planning Council plays a seminal role in the physical manifestation of the 2030 plan and the synergy between it and the developers is crucial with regard to the execution of the plan. As Managing

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Director of Tamouh, Ong is necessarily closer to the action than most in this regard. We ask him how the relationship works on a day-to-day basis, “The map laid out by UPC is a clear guideline. It is the developers like us that finalise the actual details on the ground. UPC has been very interesting to work with. They have a clear vision to Plan 2030. The guideline is there and it is clear, so there can be no misunderstanding about major issues. We adhere to it with the best of our ability and we are met with flexibility when required. It is a healthy working relationship.”

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This experience has lead Ong to be positive about Government relations. “Abu Dhabi does listen. That is one of the benefits of working here. The Government listens to you. Here, they take your input and expertise on board and they hire the best professionals – so things are progressing in a positive manner. In this business, that kind of understanding is crucial. Once a building is built, it is built – you cannot just tear it straight down and start over again. So, in order to get it right from the beginning, it is very important to have such an open dialogue”.


Property development in full “Bloom” Bloom Properties

Bloom Properties is the joint real estate development arm of National Holding and Emirates International Investment Company and is one of the main property development companies in Abu Dhabi, along with government developer Aldar, Tamouh, Sorouh and Manazel Real Estate.

a branch of the well-known independent school from the UK - Brighton College, over to the project, with a view to it becoming a central pillar of the community there. Brighton College is the school with the best A-Level scores of any co-ed school in England in 2008 and 2009.

The Bloom brand was launched in 2008 offering a young, fresh and innovative approach to property development. The company has been in operation since 1999 with an established portfolio of completed projects.

Recognising its community-friendly components, Bloom Gardens was lauded in the ‘Best Residential Development - Abu Dhabi’ and ‘Best Residential Development – Arabian Region’ categories in the prestigious CNBC Arabia Property Awards 2009 that honours exemplary real estate projects across the Arab world.

Bloom is committed to providing an integrated approach to building communities through value added offerings in education, sports, leisure, health and retail by working with best-in-class partners in all projects. Bloom’s primary focus is on identifying and developing strategically located large scale communities in new markets with excellent growth potential with plans to further develop world-class brands and projects in the MENA region and emerging markets.

Bloom Sports has recently partnered with Treble Group International launching a new joint venture called Treble Sports. The new company, with its headquarters in Abu Dhabi, is a full-service marketing and management company specialising in Sports, Entertainment and Culture for the Middle East region.

The first development launched for sale by Bloom is its exclusive residential development, Bloom Gardens, which is located on the Eastern Corniche in Abu Dhabi. As developer of Bloom Gardens, a large “lifestyle” housing project currently being built along the Eastern Corniche of Abu Dhabi Island, Bloom has distinguished itself in community-design by bringing

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High-end projects abundant Interview with HE Brigadier Ahmed bin Mohamed Al Suwaidi, President, Al-Suwaidi Establishment Group

Founded by retired brigadier of the Abu Dhabi Police Force, HE Brigadier Ahmed bin Mohamed Al Suwaidi, Al-Suwaidi Establishment Group is no stranger to high profile projects.

of their projects is the Marina Dome in the Marina Mall, Abu Dhabi, the largest of its kind in the Middle East. The beautiful sky dome in the Oasis Mall, Dubai is another.

Having established a joint venture with a Dutch company to form EDSE, the enterprise now specialises in high end steel structures such as domes and membranes.

The company is also responsible for the construction of the dome for the VIP lounge at the National Cricket Stadium. This one is particularly unique as the glass was hung within the frame.

A landmark project recently executed was the chairman’s staircase inside the newly opened Burj Khalifa, Dubai – the world’s tallest free standing building. Notably, the staircase has no central column, instead it is suspended by steel rods for support.

Brigadier Al Suwaidi is enthusiastic about his work and accomplishments; “Our features are always very unusual. We have accomplished some unique engineering feats”, he says.

Making Abu Dhabi stand out, in terms of striking steel structures, is what Al-Suwaidi Establishment Group does best. It has worked on projects such as the shading for the gravity defying Capital Gate building adjoining the ADNEC Exhibition Centre. Indeed it may seem strange to those of us from colder climates that a building has a need for such a shaded structure, but in the high temperatures of the Arabian sun it is a necessity for this glass and steel building. The company is to the forefront of utilizing the latest engineering and architectural techniques in building its structures. Steel domes are the primary area of expertise for the enterprise. Among the most widely recognised

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As well as steel structures, the company specialises in membranes – the tent-like canopies that readers will be familiar with from modern shopping malls throughout Abu Dhabi and Dubai. Many of their membranes have no column inside for additional support. It is held up instead by a ‘spider design’, as Brigadier Al-Suwaidi explains, “the weight is distributed on the outskirts on each of the ‘spider’s legs’ rather then central support which was traditionally the norm”. International projects take the company as far as Baku, Azerbaijan. It seems however, that Brigadier Ahmed’s immediate concerns are closer to home where he aspires to construct a big wheel similar to that of the London Eye.


Government & the Construction sector Interview with Tony Saliba, Managing Director, Nael & Bin Harmal Hydroexport

Established in 1991, Nael & Bin Harmal Hydroexport is an Abu Dhabi based contracting company which specialises in infrastructure, utilities and buildings. Under the management of Lebanese founder Tony Saliba, Nael & Bin Harmal Hydroexport works exclusively on projects for the government. One of the company’s most notable recent projects was on Abu Dhabi’s flagship tourist destination, Yas Island – the Yas Marina Formula One Circuit development, which was unveiled at the inaugural Abu Dhabi Grand Prix. Nael & Bin Harmal was also responsible for building the road on which spectators drive within the Yas Island complex and the infrastructure which supports it. In executing this project, Nael & Bin Harmal Hydroexport brought to bear the experience that they have acquired over the past two decades, having worked on many different types of projects, including roads, bridges, infrastructural, environmental, electro-mechanical and civil building projects. Major water projects on irrigation and potable systems, that have covered the UAE, feature in the company’s portfolio also, as well as many major malls, housing and high rise development projects. A central aspect of the way in which the company operates is that they work closely with their client to provide value-for-money engineering solutions.

The Nael & Bin Harmal ethos is that customers are “provided with quality products and professional services that fully satisfy their needs at a good price and are completed on time”. The fact that the client list of the company is populated exclusively by Government bodies means that it is clear that the company has become a partner of choice, not only for the various departments, but for Aldar, the national property developer as well. Continued success, coupled by such close working relations with the Government has put Managing Director, Tony Saliba positively disposed towards the Emirate of Abu Dhabi. “There is no better place to do business. If you are honest and work hard, you will make money. Business is protected here. The Government provides an environment which is very conducive to good business. Even if a project is delayed for 10 years the government will still pay you upon completion. If you work hard, they will help you”. Mr. Saliba says that “Abu Dhabi has become like my first country. Everyone likes it here. The people are peaceful. Part of the objective of Vision 2030 is to make Abu Dhabi the best place to work. That vision is being realised and I hope Abu Dhabi continues to grow in the same spirit in the future”.

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CONTRACTING COMPANIES - CLASSIFICATION CLASSIFICATION CONDITION CATEGORY

SPECIAL

FINANCIAL (VALUES AND ASSETS)

at least AED 20m

TECHNICAL CONDITIONS (PERMANENT TECHNICAL STAFF) Full time engineering and specialised technical staff consisting at least of : • Senior Engineer with15 years experience. • Engineer with 12 years experience. • Two Engineers with 10 years experience. Full time accounting staff.

FIRST

at least AED 10m

Specialised engineering and specialised technical staff consisting at least of: • One Engineer with 12 years experience. • Two Engineers with 5 years experience. Full time accounting staff.

SECOND

at least AED 5m

Full time engineering and specialised technical staff consisting at least of : • Engineer with 10 years experience. • Two Engineers with 5 years experience. Full time accounting staff.

THIRD

at least AED 3m

Full time engineering and specialised technical staff at least: One Engineer with 7 years experience.

FOURTH

at least AED 1m

Full time engineering and specialised technical staff at least: One Engineer with 5 years experience.

FIFTH

at least AED 500,000

Full time engineering and specialised technical staff at least: One Engineer with 3 years experience.

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EXPERIENCE CONDITIONS

( CONTRACTS EXECUTED DURING THE LAST 6 YEARS BEFORE APPLYING FOR CLASSIFICATION)

At least three contracts well executed, value of each not less that AED 80m

At least two contracts well executed, value of each not less that AED 40m

ESTIMATED VALUE OF THE CONTRACTS THAT THE COMPANY CAN PARTICIPATE IN

More than AED 50m

More than AED 20m Up to AED 90m

At least two contracts well executed, value of each not less that AED 20m

More than AED 10m Up to AED 50m

At least two contracts well executed, value of each not less that AED 10m

More than AED 5m Up to AED 50m

At least two contracts well executed, value of each not less that AED 3m

More than AED 2m Up to AED 15m

None

AED 5m or less

*table by Baker Tilly MKM

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Joint ventures in construction Interview with Naveen Sasidharan, Managing Director, Jancos Group

The onset of the financial crisis has seen a glut of construction companies from Dubai flock en masse to Abu Dhabi, creating a dramatic drop in prices and the creation of a buyer’s market. The result is that many of the smaller operations that had heretofore enjoyed a steady income, are struggling under the pressures of increased competition. The nature of the Abu Dhabi contracting companies certification system is such that there are certain requisite levels a company must reach in order to be eligible for the various levels of job that are put to tender. Companies are categorised by levels, for which they are pre-qualified depending on their experience (see table on page 88). Many small and mid-size contracting companies are therefore actively looking for international construction companies, with experience in major projects and large developments with which to form joint venture partnerships. They do this with a view to gaining additional certification, enabling them to target high value projects. One such company which has recently secured such a joint venture is Jamal Al Nuaimi General Contracting Company. Owned by Jamal Al Nuaimi, the prominent Emirati businessman, the JANCOS Group of Companies is a multifaceted group operating in a variety of spheres,

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which encompasses Jamal Al Nuaimi General Contracting Company.

Orignially from India, Mr. Sasidharan was educated at the University of Hull in the United Kingdom.

Mr. Naveen Sasidharan is the Managing Director of the mid-tier contracting company, which has just secured a joint venture with an international partner, in order to position itself as a contractor of choice for the multitude of projects that are coming online, in keeping with the Urban Planning Council’s “Plan 2030” - the physical manifestation of Vision 2030.

Regarding the Emirate of Abu Dhabi, he says, “it is a great place to do business, your rights are protected”.

Established in 2003, the business has gone from strength to strength. The company currently has 500 staff working mainly on villas, commercial buildings, industrial projects and providing an all round service for the completion of buildings. The enterprise possesses accomodation for up to 1,200, so they are well-positioned in manpower terms, to take on bigger projects.

Speaking generally about United Arab Emirates, Sasidharan determines, “It is a very easy country. The people are friendly and it’s very safe. When I’m away, I look forward to getting home. I now regard Abu Dhabi as my home”. Mr. Sasidharan outlines how reputation is key to success in a place as small as the Emirate of Abu Dhabi, “If you are good - they talk about you. But, if you are bad - they talk about you. Business works on relationships here. Trustworthiness is crucial.”

“Jamal Al Nuaimi General Contracting Company prides itself on quality”, asserts Mr. Sasidharan, “We are ISO 9001:2000 certified and have also implemented a quality management system to continually satisfy and deliver the best service possible for our clients”.

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Opportunity Knocks Interview with Dr. Jang Bahadur Singh Mann, CEO, Mann Industries

When youthful exuberance coincides with a sharp intellect, a head for business and ambition, the world/ oyster maxim comes into play.

“My father was planning on winding the business down, so I became involved and offered to take it over. It has been a challenge I have relished.”

A medical doctor by profession, Dr. Jang Bahadur Singh Mann employs strategic foresight in running Mann Industries LLC, a glass and steel provider with big plans for the future.

Established since the 1980s the company has demonstrated its durability and staying power. Regarding the reasons behind this success, Dr. Mann says,

Some of Abu Dhabi’s most esteemed companies are counted among Mann Industries LLC’s clients, in the provision of processed glass, architectural glass, aluminium facades, stainless steel, structural steel, and wrought iron.

“Retaining good talented people is very important in business. It is advisable to listen to everyone, from the lowest level worker right up. Everyone can make a difference.”

Describing Abu Dhabi as his “home from home”, Dr. Mann has grown with the business that his father created following their move from India. Having completed his medical education and a period of practice, Dr. Mann took the reigns of Mann Group from his father and has set the company on a steady course of expansion. Speaking about this transition, he states,

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Being not only a provider, but also a manufacturer of a multitude of its products, Mann Industries is able to pass on its competitive advantage to its clients, and this is an area which Dr. Mann identifies as a crucial selling point for his company’s services.


A new premises in Ras Al Khaimah will provide the company with flexible access to the whole of the United Arab Emirates market. This is the platform upon which Dr. Mann is set to expand the company’s remit.

Unafraid to go in different directions in order to maximise output, this new generation of business leader is set to change the face of how business is done, and bring a range of new commercial models to fruition in the coming decades.

Although glass and steel will remain the core industries of the organisation, Dr. Mann’s insightful approach to backwards integration means that there are also other sectors which the company shall enter in the near future.

“The continued success of business is all about dreams, about how ambitious you are”, muses Dr. Mann. This is a sentiment, one can tell, that is indeed close to his heart, as the ambition that he conveys is palpable. Dr. Mann is, of course, cognizant that the United Arab Emirates presents a uniquely advantageous crucible in which to accomplish his goals;

Innovative thinking along these lines is what distinguishes Dr. Mann from the average chief executive of a construction materials company. He sees the opportunity within his business framework and is not afraid to enter the sphere and reinforce Mann Group’s profitability from within, even if it may be in a new area.

“Abu Dhabi is one of the most stable economies in the world. As many as 73 towers are currently being built here. We know people in this market, we have experience in this market, and most importantly – we have the right people in our team to deliver on all of our projects.”

Dr. Mann embodies the new breed of entrepreneur that balances burning ambition with a sophisticated understanding of business processes and new thinking.

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Electrical contracting outlook positive Interview with Vinod Thomas, Managing Director, Delta Electric (FZE) Group

Operating in the UAE since 1988, the Delta Electric FZE Group provides quality products and services for the manufacture and trading of electrical distribution equipment. Delta Electric operates in many areas, offering a maintenance free solution for busways in addition to providing aircraft warning lights and LV Switchgear. Managing Director, Mr. Vinod Thomas, from Kerala, India, took over the company in 1994 and reversed its flagging fortunes, bringing it to a point today where it services 60% of the Abu Dhabi market share, making Delta Electric the leader in its specific niche and one of the leading technology trading companies in the UAE. Providing elements of the electrical infrastructure for buildings, primarily busways and switchgear, Delta Electric has established a reputation as a reliable partner in terms of both quality and price. Vinod Thomas cites this as a fundamental cornerstone of his business model; “It is simple - if you offer reasonable quality at a reasonable price you will do well�, says the managing director.

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The blossoming construction sector in Abu Dhabi provides fertile soil for a company such as Delta Electric Trading. It can provide the necessary components of electrical infrastructure for any building project.

“In order to sustain in the market you need to grow - this is the intention of human beings”, asserts Thomas. “We are operating from a strong position in the domestic market, but we also have ambitions further afield”.

“We provide a solution that delivers real value”, insists Mr. Thomas, “our range of products and services makes us an ideal partner to the construction industry when working on these projects”.

The fact that such ambitions coincide with a foray into the area of energy generation, with a proposed 250 MW project in India, serve to underline the aspirations of this developing company.

Mr. Thomas’ message to prospective clients is clear; “If you use our busways, you can expect to save 15% it is a rock solid solution”. Indeed, the company is currently expanding into Bahrain and is looking for partners, not only there, but throughout the GCC. In order to provide these GCC markets with the high quality busway systems that have been so successful in the UAE, Delta Electric, under the auspices of Vinod Thomas, is instigating a two-pronged approach. Firstly, they are getting the systems certified and approved by the various utilities in the target markets, and, secondly, they are engaging local distribution partners with a view to bringing the systems to market, and are open to establishing new relationships along those lines. The question of continued growth is never far from the managing director’s mind,

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Contracting for oil & gas Interview with Maher Muqattash, Managing Partner, Aims General Contracting Company

Although only recently established in Abu Dhabi, Aims General Contracting Company, under the leadership of Managing Partner, Maher Muqattash looks set to be a rising star of the Abu Dhabi scene. From its headquarters in Ras Al Khaimah, the company has branched out into UAE’s leading Emirate in order to work not only on civil works, but also, interestingly enough, on oil and gas related projects as well. This is where the experience of Maher Muqattash comes into play. As Projects Director and Head of Civil & Architectural Department of the well-reputed Control Contracting & Trading Co. (CCTC), Maher brings a wealth of experience to the table. Having managed projects that involved complete responsibility for the development of the living quarters and switchgear facilities on multiple oil rigs, Maher knows what it takes to develop a successful concern in the sector. Maher has worked with household names such as ELF, McDermott, Anadarko, Shell and, the world’s largest company, ExxonMobil. Given this knowledge of the market, he is positioning Aims to be in contention for the 20 Billion Dirhams worth of oil and gas projects recently announced. CEO: What is the plan for Aims General Contracting in terms of tackling the Abu Dhabi marketplace?

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Maher: We have a two-tier strategy. The first is centred around our civil works. These civil works are our initial foray into the Abu Dhabi market – and something we will maintain on an on-going basis. Another area of interest for us is the oil and gas sector, where my previous experience lies. CEO: In terms of civil works, what projects are you working on? Maher: We have already completed the rafts and the basements on four major towers under construction in Reem Island. Under “Plan 2030”, Reem Island is set to become the new central business district of Abu Dhabi. A tender has been put out for the construction of the towers themselves, and we are confident that we should win work from at least one of them. CEO: What kind of capacity do you have to bring to bear when executing projects?

We have a partnership for instance with Cammach, the Scottish company, which compliments our experience on the deliverable side. Bringing projects in on time and at cost is a priority for us. CEO: Since Abu Dhabi is such an energy based economy, we are keen to find out about your experience in the oil and gas industry and your plans for bringing Aims into this sector. Maher: Having been Project Director for CCTC, offshore oil and gas installations are my speciality. We want to work with serious partners on offshore projects. This is a sector in which previous experience is necessary and that is what we have. We are still working closely with CCTC, and as such, we have the capacity, capability, and most importantly, the experience, to deliver real value to offshore oil and gas projects, not only in the Gulf, but also internationally.

Maher: With 400 employees here, it is clear that we are a substantial company that is set to take advantage of the favourable market conditions in order to generate long term relationships with satisfied clients by delivering a consistently excellent service in line with their objectives. We have partnerships with various companies in order to deliver excellent service to the market here.

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SMEs, Emiratisation, Education & the Private Sector


Pillar:

A large empowered private sector

Pillar:

A sustainable knowledge-based economy

Pillar:

Premium education

Key Priority: Human resources development

Key Priority: Drive significant improvement in the efficiency of the labour market

Policy Focus: Develop a highly skilled, highly productive workforce

With the vast majority of nationals employed by the public sector, Abu Dhabi has a hugely underdeveloped SME sector. The private sector is mostly populated by foreign companies with reservations about employing nationals. The Emirate is therefore undertaking massive SME incubation programmes, educational initiatives and Emiratisation policies in order to redress this balance.

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The Abu Dhabi Economic Vision 2030

SMEs, Emiratisation, Education & The Private Sector

Nationals comprise 11% of the workforce. Expatriates make up the remaining 89%. This is one of the highest proportions of foreign labour in the world.

Abu Dhabi’s current labour policies are designed to increase participation by nationals in the workforce, attract skilled labour and stem the inflow of unskilled workers.

Government has traditionally been the employer among nationals. However, in its drive towards a more efficient public sector, the Government cannot continue in this role for the growing number of jobseekers.

The goal is for nationals to become prevalent in the sectors of energy, finance, trade and manufacturing.

It is therefore essential that nationals are equipped with the right skills, qualifications and work ethic to make them competitive in the private sector job market.

Quotas have been set for the employment of nationals in certain economic sectors, requiring companies within those sectors to reach certain levels of “Emiratisation” in their workforce. The banking sector is required to achieve 4%; the insurance sector 5%; and companies engaged in trade 2%.

However, despite these efforts some sectors of private enterprise remain reluctant to hire nationals, based on cost and skills set concerns.

The Emirate’s policies are meant to attract increasing numbers of skilled workers, and encourage nationals to join the private sector.

There is a wide productivity gap between SMEs and large enterprises.

Contribution to GDP is highly concentrated in large enterprises, suggesting that there is room for improvement in the productivity of small and medium-sized enterprises.

Labour productivity appears to be surprisingly low in the SME sector, suggesting that smaller companies are not as competitive in Abu Dhabi as elsewhere.

In order to encourage the development of SMEs, the Abu Dhabi Government established the AED1bn Khlaifa Fund, which provides financial and professional assistance to local entrepreneurs.

Banks should utilise the present high liquidity levels to finance SME development, rather than fund consumption patterns.

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SME Focus Unleashing the entreprenurial spirit Interview with HE Dr. Ahmad Al Mutawa, CEO, The Khalifa Fund

One thing that is apparent when one examines the macroeconomic landscape of Abu Dhabi is that the businesses can be broadly classed into two groups, massive or micro. In order the bridge this gap and enable the development of the small and medium sized grouping, measures have been taken such as the establishment of the Khalifa Fund. This is a necessary component of achieving the diversification stipulated in Vision 2030 through the creation of a properly functioning private sector.

Abu Dhabi Economic Vision 2030

Development Initiatives In order to encourage the development of SMEs, the Abu Dhabi Government established the AED1bn Khalifa Fund, which provides financial and professional assistance to local entrepreneurs. UAE nationals may apply for low-interest loans or venture capital of up to AED3m for new businesses, and up to AED5m for established businesses that wish to expand. In addition, the Khalifa Fund provides a range of other assistance to entrepreneurs, including training programmes, business consultancy, physical facilities, shared services such as accounting, HR and administrative support. The private sector also supports SMEs through various training programmes, development initiatives and products and services designed for entrepreneurs, including special banking products and business assistance.

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The Abu Dhabi Businesswomen Council’s (Mubdiaa) programme also supports home-based businesses for women, providing loans, guarantees or equity investments as well as training, marketing and technical assistance. Dr. Ahmad Al Mutawa, Chief Executive of the Khalifa Fund states that, “There are only two stipulations that are required to be met by an aspiring entrepreneur wishing to avail of the assistance of the Khlaifa Fund. Firstly, they must be a UAE national, and secondly, the enterprise that they are creating must be Abu Dhabi based.” “At the present time, the vast majority of Emiratis work in the public sector. Our role as an organisation is central to the creation of a functioning private sector lead by UAE nationals. The Khalifa fund has been created to inspire the entrepreneurial spirit of Abu Dhabi.”

“We need to create a culture of entrepreneurship over the long term and the logical place to start therefore, is the school system. We are communicating at school level and running competitions whereby each class develops its own company and competes against one another”, explains the CEO. The methodolgy that the Khalifa Fund takes is extremely supportive in engaging aspiring business leaders. “We first evaluate the entrepreneur, and his or her proposal, and then go about developing a plan as to how we can work together and support him or her in achieving their vision”, declares Dr. Al Mutawa, “We want people to understand that the Khlaifa Fund will assist with the development of SMEs in any way that we can. That is our role.”

“We are here as a support structure for any national who wants to develop a viable business. We are ready to assist in a multitude of areas, from financial assistance and letters of guarantee, to mentoring and guidance services in order to foster projects through their initial phases.” The large chasm that must be bridged to bring a workforce which has traditionally existed in the public sector over to private enterprise, is a cultural shift that the Khalifa Fund is cleverly addressing at school level.

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SME Focus SME hospitality Gava Hotel is a typical SME operating in the hospitality sector

“We have guests coming from all over the world, from China, the EU, the US, Australia, Africa and the GCC. The vast majority of our guests are very happy with the hotel, the staff and their stay overall. Our mission is to meet the customers’ needs, and we are very happy to do that on a regular basis.” As a local hotel with an Arabic flavour, retaining guests is a high priority. “We attract a lot of repeat business and that is a factor in our continuing viability as an SME operating in the hospitality sector here in Abu Dhabi”. There is a traditional Arabic style restaurant which is a must-see experience for those still unfamiliar with traditional Arabic settings. The Gava Hotel stands at a crossroads between Abu Dhabi’s past and future. Defence Road, which once delineated the line between the city and the army camp, is now blossoming with projects that are shaping the landscape for the years to come.

The owner of the hotel is experienced in the construction industry and, in order to create another revenue stream, is employing that expertise in the development of a new coffee shop adjacent to the hotel.

Gava retains a 78% occupancy rate despite the changing macroeconomic conditions.

The company routinely builds villas and deciding to add the Gava Hotel to their portfolio was an exercise in business diversification.

The rooms are all fully equipped with high speed internet, essential for the business traveller, as well as very large 52” flat screen LCD TVs. The guest’s travelling experience is further enhanced by complimentary tea and coffee facilities, fridge, free breakfast and free local calls. The general manager of Gava Hotel, Mr. Mohammed Babker explains that repeat business is a constant for their establishment;

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The Gava Hotel is currently launching a new online e-commerce campaign in order to attract additional bookings. Gava Hotel, Defence Road, Abu Dhabi, UAE Tel: +971 2 642 5667 Fax: +971 2 641 6744 Email: gava@eim.ae


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SME Focus SMEs in the building supplies sector One of the central tenets of Vision 2030 is the development of the burgeoning private sector. In an economy so dominated by the public sector, as Abu Dhabi, it seems that businesses in general fall into two categories – massive industrial concerns, or very small micro-businesses. This is a concern for the Government and something which they are seeking to address. Initiatives such as the Khalifa Fund are aimed directly at addressing this problem by supporting the entrepreneurial spirit of the Emirate and encouraging the continual development of the private sector. The Khalifa Fund however, supports only UAE nationals in their endeavours to carve a niche for themselves in the business environment of Abu Dhabi. In a place in which 89% of the workforce is foreign, there consequently remains a gap between large and small. The large Indian diaspora in the GCC is an engine of dynamism and growth and there are a great many companies which have attained success with Indian managers at the helm, both part-owning and managing the enterprises. In our focus on SMEs, CEO Financial has identified high potential start-ups that are in a position to capitalise on Abu Dhabi’s economic expansion. Saiyed Ali Trading is one such company. Founded in 2007 by S.M. Ali Abdullah, a former schoolteacher from India, the company is located in the industrial area of Mussafah, on the outskirts of Abu Dhabi City. Specialising in water pumps for large developments, the company has carved a niche for itself in the market.

Saiyed Ali Trading Some of Abu Dhabi’s most reputable companies are among the clients of this SME, which has also contributed its products to projects such as Hydra Village, Abu Dhabi and the Dubai Global Village. This shows that there is certainly room for the smaller player to establish a niche for himself once he can present a high quality product at a reasonable price. The fact that Abu Dhabi is currently in the process of building its infrastructure in accordance with Plan 2030, means that there is plenty of opportunity in the building materials sector that Saiyed Ali Trading occupies. Mr. Abdullah is clear about where he wants to take his enterprise – expansion is the name of the game. “Abu Dhabi is a very big market. The Government has very wisely plotted out a clear path of development for the next twenty years and a lot of building development is central to that. There is a lot of construction and it is therefore a good place to do business”. Abdullah is ambitious in terms of his future expansion plans, looking to become a sole distributor for building supplies brand names in Abu Dhabi over the long term. The potential that exists within the sector in Abu Dhabi is such that a concerted and sustained effort should generate results over the long term. This bodes well for SMEs in the building materials industry in the Emirate, particularly at a time when such companies are suffering elsewhere in the world. Saiyed Ali Trading, PO Box 112539, Abu Dhabi Tel: +971 2 5522 924 Tel: (m) +971 50 5918 550 Fax: +971 2 5522 782

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Emiratisiation Focus Tawteen Interview with Khuloud Al Nuwais, Director of Projects, Emirates Foundation

The Emirates Foundation Tawteen Programme was an initiative first established in 2007 by HH Sheikh Mohammed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi. The programme aims to empower and provide guidance to young Emiratis in their quest for employment and on their future career paths in the private sector. The programme is part of the Emirates Foundation which also has other projects aimed at youth development and engagement in social betterment throughout the United Arab Emirates. Programmes include Takatof, a youth volunteer initiative which encourages young people to volunteer and help out at large events like Formula 1 or visiting the sick in hospital. This social volunteering organisation was set up from contributions provided by the private sector that the government has decided to match dollar-fordollar. This has been a tremendous asset in the establishment of the Foundation’s partnerships, designed to benefit the community through vital projects that add real value. “The private sector faces some challenges in employing UAE Nationals. Addressing this issue was the main idea behind the establishment of Tawteen”, states Ms Khuloud Al Nuwais, Director of Projects at the Emirates Foundation. The four key pillars of society; the private sector, government, civil society and academia, all play a fundamental role in the Tawteen Programme. A symposium was held in 2007 to identify key areas that Tawteen need to work on in order to “fill the gaps” in private sector employment.

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Among those identified were: career guidance, women in the workplace, leadership, and work experience. “Bridge to Success” was an initiative that arose from these findings. A summer programme was developed with a view to fostering skills valued in the workplace. Weekend camps are also a feature of the work Tawteen carries out. Camps are for females and males and cover everything from leadership and entrepreneurial skills to career guidance. Sponsored by Aldar Properties, these camps are aimed at assisting the youth of all seven of the UAE’s Emirates; Sharjah, Ras Al Khaimah, Ajman, Fujairah, Dubai, Umm Al Quwain and Abu Dhabi. The Emirates Foundation also collaborates with Universities and Higher Colleges of Technology in order to highlight to young people the benefits of higher education. Pursuing Masters and PhD programmes is something that very few Emiratis have undertaken to date. Initiatives include government grants for PhD programmes. Whilst Tawteen endeavours to work with the cultural norms of the UAE, it also strives to work with parents and young people alike to change some views and perceptions about certain job types. For instance, working in a hotel is not seen as an acceptable career choice for a young female. The Tawteen Programme works in collaboration with parents to change these perceptions.

The imminent completion of Saadiyat Island for example, will result in many hospitality industry job openings, so Tawteen wishes to showcase that there are many good career opportunities for young female Emiratis in this sector. Many international private sector companies sponsor the work that Tawteen does, including; Shell, Dolphin Energy, Abu Dhabi Commercial Bank, Rolls-Royce, BP, Mubadala, DLA Piper, ADCO, Aldar, GEMS Education, the British Council, Al Yashat and the Abu Dhabi Petroleum Institute. When CEO Financial asked Ms Al Nuwais why such big companies choose to sponsor Tawteen, she replied, “I think it is to fulfil their sense of corporate social responsibility. Despite being international companies they are all based here in the UAE. Sponsoring us enables them to understand more about employing young Emiratis. It also gives them access to a pool of young talented people as many of our work placement programmes have resulted in offers of employment”. Ms Al Nuwais, a mother of three children, occupies one of the most senior positions at the Emirates Foundation. She studied advertising and marketing at Portland State University in the United States of America and returned home to Abu Dhabi to begin

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Emiratisation Focus her career in ADNOC, in the oil and gas sector. As a female Director of Projects, she has been instrumental in leading the Tawteen programme. “Dedication and passion are what is needed to prove yourself as a female in the workplace” she proudly asserts. The essence of Tawteen is best described by Ms Al Nuwais when she says, “Tawteen strives to offer a channel for the youth of the UAE to undertake skills development that empowers them for a future in in private sector employment for the benefit of the entire economy”.

Abu Dhabi Economic Vision 2030

Vision 2030 on women The Emirate outperforms the UAE average and other countries in the region in terms of female economic participation, with 14.5% of the overall workforce and 18.5% of the National workforce being female. Abu Dhabi’s benchmark economies have very strong records when it comes to getting their women into the workforce and the Government would like to achieve comparable figures. Ireland and Singapore boast a workforce which has more than 40% female participation, while almost half of Norway’s workforce is composed of women.

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Education Section Third level education in Abu Dhabi Interview with Mr. Bob Lipsett, MBA Manager, UAE University Interview with Dr. Michael M. Ohadi, Provost and Acting President, The Petroleum Institute Victoria Kelly

The United Arab Emirates University The United Arab Emirates University is one of three federal universities in the UAE. The main campus is located in Al Ain, but the MBA programme is housed in the city of Abu Dhabi. With thirty-five thousand graduates spread across eight faculties this university is well established, having been in operation for the past thirty-one years. CEO Financial spoke to Bob Lipsett, a Canadian expatriate in charge of the MBA programme, which has been in existence since 2001. “A good education system is imperative to the needs of any country in order to sustain the economy. The youth of society today are tomorrow’s leaders and there has to be due provision made to ensure that universities turn out individuals fully equipped with the skills needed to undertake high profile demanding job roles and also be the job creators”, Lipsett asserts. A key theme in Vision 2030 is to have a knowledge based society. This can only be achieved through the work of schools, universities and higher colleges of technology. In order to have a true knowledge based society there must be sufficient numbers of graduates undertaking masters and PhD level programmes, something which the UAE has lacked in the past.

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This is all changing, as Bob Lipsett informs us, “The MBA programme has been a major success. Our programme is built on reputation and accreditation. We are only one of two universities in the UAE and one of five in the entire GCC that has worldwide accreditation. Our MBA is recognised around the world”. Worldwide accreditation is judged by how much research a university conducts and also the calibre of professors teaching. At UAE University there are about sixty-five instructors from a total of thirtyeight different countries, so the teaching mix is truly diverse. The MBA programme has two patron institutions which act as business partners - the Abu Dhabi Chamber of Commerce and ADNOC. With regard to the student body on the MBA programme approximately ninety percent are from the UAE and ten percent are expats from many different countries. The ratio of male to female is equal. The average age of an MBA student is late twenties to early thirties and many of these people are undertaking the MBA at the behest of the company for whom they are working. Many companies sponsor their employees to ensure they have the most highly educated and skilled people working for them. The entire MBA programme takes about twenty months to complete and there is also an opportunity to study at Georgetown University in the United States, as this is the institution’s partner university.


“The MBA programme is not easy” warns Lipsett, “we devise the content to be very challenging in order to equip our students with the skills needed to excel in the business world. Our course load, group work and case studies are all extremely tough. We aim to make the programme difficult, and it is because of this that only the highest calibre students are accepted into our MBA”. Lipsett reveals how new plans are on the horizon for an Executive MBA programme due to begin in 2011. This programme is aimed at people who have approximately ten years work experience in their chosen fields and wish to come back to education to learn new skills for today’s challenging work environment. “Many of the prospective students will be high achievers, possible CEOs or managing directors well established in their careers, and who wish to be to the forefront of the latest learning and knowledge” he explains. Essentially the UAE University MBA programme aims to provide “the business background that can be applied to any industry”. “In order to achieve some of the lofty goals of Vision 2030, nationals need to assume higher levels of responsibility. The UAE cannot rely on expats for this any longer. We need to generate as many qualified MBA students as possible”, asserts Lipsett.

The Petroleum Institute The Petroleum Institute is an educational institution of University stature dedicated entirely to turning out tomorrow’s top engineers and scientists for the oil and gas sector. The institute is an academic property that is owned, run and operated by ADNOC, the Abu Dhabi National Oil Company. His Highness Sheikh Khalifa himself wrote the decree which established the Petroleum Institute in 2001. The work that the institute does is crucial in creating competancies and driving innovation in the hydrocarbons industry. Dr. Michael Ohadi, Acting President and Provost tells CEO Financial, “for us it is very exciting to know that we are fuelling the workforce”. The Petroleum Institute is working on achieving worldwide accreditation in all of its programmes, which is something that very few universities can claim credit for since many only have world accreditation in one or two programmes. It can also lay claim to the fact that they have the most journals published per faculty in engineering in the entire UAE. The institute offers seven engineering programmes including chemical and mechanical engineering. Dr. Ohadi says, “It is important for students to be stretched. They need to be challenged. We monitor student performance closely to ensure that in order to achieve high grades one has to work very hard to obtain them”.

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Education Section The CEO of the Institutes’ owner, ADNOC, HE Yousef Omair bin Yousef, is also chairman of the board at the Petroleum Institute. This man’s own son attends the Institute. “This speaks volumes for the high calibre education one receives at this college”, Dr. Ohadi explains, “Our chairman could have sent his son to any University in the world but chose us, because he really believes in the quality of education here”. Seventy seven percent of the Institute’s students are UAE nationals, the other twenty-three percent are from different countries around the world who gain access to the college through high profile

scholarships. A maximum total of thirty percent of foreign nationals will be accepted to the Petroleum Institute as it is important that: “UAE nationals receive places as we want to have as many qualified, educated nationals as possible, in keeping with Vision 2030’s theme of having a knowledge based society” explains the provost. Whilst the institute has a relatively small number of students attending, this is deliberate according to Dr. Ohadi, “We are primarily concerned with the quality of our graduates here and not the quantity”. Engineering has in the past typically been a male dominated profession but the Institute is working on changing this through their WISE (Women In Science and Engineering) programme. The results of this can already be seen with about thirty percent of the student body being female. Dr. Ohadi tells us that; “The girls seem to outdo the boys performance-wise. Perhaps this is because they have more appreciation for the opportunity given to them”. Whether or not this is true, one thing is certain according to Dr. Ohadi, “An engineering degree will never be a waste of time. It gives an excellent grounding in any discipline. If a student decides not to enter the engineering profession many other opportunities are available to them as they already have a good solid base in engineering to start from”. Dr. Ohadi has first hand experience of this since his own son studied engineering but has since gone on to medical school. What is imperative according to Ohadi is that there should be an interest developed in maths and science amongst young people. He says “this should begin in high school. Many students are put off studying maths, science and engineering during high school. This has to change. For instance we had an open day recently and tried to pique their interest by explaining the part engineering has to play in everyday life”.

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Media for the Arab world Interview with Tony Orsten, CEO, TwoFour54

TwoFour54 is a special government authority tasked with the development of a world-class Arabic media and entertainment content creation industry for the Arab world and the administration of a free zone for those purposes. With the exception of the Al Jazeera news channel, Arab media and entertainment have not made the transition into mainstream world media thus far. This is something that TwoFour54 is setting out to change. Working in partnership with a number of international training partners, including the BBC and Thomson Reuters, TwoFour54 have established a media training academy to up-skill and re-skill media professionals and those interested in pursuing a career in the media industry. Until this point, the region has lacked quality training in this area. “There were no courses available for young graduates wishing to join television stations. The opportunities simply did not exist” says TwoFour54’s Chief Executive Officer, Tony Orsten, “Our training academy offers courses for budding engineers and technologists, producers, researchers and programme makers.” “There are lots of talented creative people here with no skills, so it is our job to bring them up to the level required” says the Chief Executive.

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Orsten has had a long and established career in the television and entertainment world. He was the CEO of MTV Networks International’s portfolio of entertainment channels including Paramount Comedy UK and Paramount Comedy Espana. TwoFour54 is the Media Zone Authority in Abu Dhabi. This means that it is the legal entity that issues trade licences in the media sphere. The organisation also administers a free trade zone for the sector. In order to create the ecosystem which will enable the content creation community to flourish, TwoFour54 is built around three key pillars: TwoFour54 tadreeb (training academy), TwoFour54 ibtikar (media business incubator) and TwoFour54 intaj (state-of-the-art production facilities) with business enabler TwoFour54 tawasol providing support services to organisations and individuals moving into TwoFour54.The campus is essentially a media hub containing all the necessary facilities for the world of media. TwoFour54 aims to service the entire Arab world. This is no small feat considering that: “there are three hundred and forty million Arabs from many different countries from Lebanon and Syria to the United Arab Emirates, all united by one common language - Arabic” says Orsten, “Our objective is to make Arabic content television for the

Arab region and beyond. Our wish is to make Abu Dhabi a centre for creative vision for the entire Arab region. We want people to think of Abu Dhabi as a place to go to in order to fund creative projects”. Looking ahead to the future, TwoFour54 is really on its way to realising its goals. Five hundred jobs have already been created as a result of the company’s endeavours and it is hoped that in a few years, thousands of jobs will be in existence here. Plans are also well under-way for an exciting new development near the port of Zayed in Abu Dhabi. The vision for this media centre is very different to what has gone before. “Previously, places like the BBC have operated a very closed shop. A member of the public could only enter if a previous appointment had been made. This new entity will be different. It will be a place to which the public can go. It will be kind of like a shopping mall for the media, but with no shops. Nothing like this has gone before, it will almost resemble a theme park for the media”. Orsten is looking forward to the opportunities that lie ahead here in Abu Dhabi, he says that “the future of media is based around amazing stories created beautifully. The Arab world has a great perspective on the human aspect of life. Many stories are waiting to be uncovered and told here, in the great Arabic storytelling tradition”.

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Publication coming soon

GLOBAL RISK

Geopolitics, Economics & Jurisprudence The Trends behind the Headlines C.E.O. FINANCIAL


Tourism


Pillar: A continuation of strong and diverse international relationships

Pillar: Maintaining Abu Dhabi’s values, culture and heritage

Pillar: A significant and ongoing contribution to the Federation of the UAE The Abu Dhabi Tourism Authority is setting new standards in bringing its vision to fruition. The delicate balancing act between maintaining Abu Dhabi’s traditional cultural heritage and the creation of a tourism destination distinguished from any other in the region, is well under way. From the F1 racing circuit par excellence, on Yas Island, to the unprecedented introduction of the Louvre and Guggenheim museums, to the cultural centre on Saadiyat Island - Abu Dhabi is taking strides that are being recognised globally.

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The Abu Dhabi Economic Vision 2030

Tourism •

A vibrant business, culture, leisure and sports segment is being developed in the Emirate which will be supported by a fast growing hotels sector to cater to the growing number of high-end tourists and visitors, as well as the national and resident population.

The Emirate has a strong appeal to tourists and visitors for its large number of natural islands, beautiful beaches, cultural and heritage assets, appealing weather for most of the year and diverse landscape.

There is a national drive to increase tourist numbers to around 2.7m in the next five years.

Abu Dhabi-based airline Etihad, the national carrier of the UAE expects its passenger traffic to grow at an average 4.7% a year for the next 25 years.

Expanding the tourism offer includes new resorts, malls, world-class museums and galleries and other leisure facilities, already under plan and construction.

Abu Dhabi is already investing strongly in expanding and upgrading its tourism and cultural offering with significant projects such as the Saadiyat Island Cultural District, with its cluster of world-renowned museums, cultural and educational institutions.

To enhance the promotion and marketing of the destination and its brand, the Abu Dhabi Tourism Authority has opened several offices in Europe, including the United Kingdom, Germany and France, with plans to roll out several other offices within the coming few years.

Many of the companies that operate in this sector fall within the SME category, which supports Abu Dhabi’s stated goal of diversifying its enterprise base.

Tourism will boost foreign currency earnings and improve the international profile of the Emirate.

Abu Dhabi’s product offerings, high standards of service and the development of world-class facilities will help it to become an important tourism destination.

The Emirate is investing large amounts of funds and energy into this sector to ensure that Abu Dhabi becomes one of the world’s most attractive places for high-end tourists, while offering new facilities and leisure activities to the Emirate’s permanent residents.

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Travellers welcome Grace Hughes

Abu Dhabi is now looking to expand its appeal as a global cultural centre and a high-end tourist destination. In spite of the advent of the global recession, the Emirate has embarked on a spirited initiative to dispel stereotypical images of the city and to launch itself as an open and hospitable leisure tourist destination and a centre for high-brow culture and heritage. The Emirate is already recognised as a major economic powerhouse, but it has now entered an era of economic liberalisation and modernisation that will allow it to evolve into a centre of excellence in tourism, culture and sustainability. The Abu Dhabi Tourism Authority launched a five year plan in 2008 that aims to attract 2.3 million visitors in 2012, a significant increase from the 1.5 million that entered the Emirate in 2008.

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Saadiyat Island The ambitious vision of Abu Dhabi includes the creation of a $27 billion cultural district project on Saadiyat Island which will house branches of the most prestigious and esteemed cultural institutions in the world, the Louvre and the Guggenheim museums, in order to create an up-scale cultural district to enrich Abu Dhabi. Saadiyat Island is a large low-lying island just off the coast of Abu Dhabi. Its name means ‘Island of Happiness’ and it is set to live up to its name with the landmark project currently underway, to be completed in 2018.

The Guggenheim The Abu Dhabi Guggenheim Museum is designed by Canadian architect, Frank Gehry and will be


dedicated to modern and contemporary art. It will be larger than the original Guggenheim, at 300,000 square metres, and at an estimated cost of $400 million. The museum’s dramatic design plan calls for an installation four stories high with multiple galleries stacked on top of one another. The aim for this museum is to create an artistic space that will allow for cultural exchange and discourse between different traditions and cultures. The museum will form its own major collection of contemporary art and will also exhibit masterworks from the Guggenheim Foundation’s global collections.

The Louvre The construction of the Louvre Abu Dhabi, which is to be completed in 2012, has developed as part of a thirty year agreement between the city of Abu Dhabi and the French government. The museum’s architect

Jean Nouvel, has designed a unique web-patterned dome above the body of the museum, which will allow the sunshine to filter through. The museum will showcase artwork from all corners of the globe, with particular emphasis on bridging the gap between Eastern and Western Art. The world-class museum will be approximately 24,000 square metres and is expected to cost between €83 million and €108 million. Saadiyat Island will also include the Sheikh Zayed National Museum, to be designed under the direction of the renowned architect Lord Norman Foster; a performing arts centre designed by Zaha Hadid and a maritime museum with concept design by Tadao Ando. The island will also be an exclusive, luxury holiday destination with a sophisticated waterfront district - Saadiyat Marina. In addition to that, it will have kilometres of natural beaches with five-star hotels and resorts, Saadiyat Reserve with flourishing wetlands and mangroves and even the world’s first tidal golf course.

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Yas Island Sports Enthusiasts have many reasons to flock to Abu Dhabi. The Emirate is working hard to attract many high-calibre sporting events. Between the coast and city of Abu Dhabi and Dubai, the beautiful Yas Island is being moulded into another spectacular tourist asset. Beautiful beaches, world-class golf courses, the excitement of the Yas Marina circuit, home of the Abu Dhabi Formula 1 Grand Prix, not to mention Ferrari World, the world’s largest indoor theme park, set to open later this year, are all set to make Yas Island a remarkable tourist destination. The inaugural Abu Dhabi Formula 1 Grand Prix was held in the Yes Marina Circuit last year. The track was described by Bernie Ecclestone, president of Formula One as “one of the most exciting tracks I have ever seen”. The growing popularity of eco-tourism is being catered for in Yas Island with the integration of sustainable development practices, which will include an animal sanctuary and a promise to plant a mangrove seedling for every visitor to the island. The sports tourism sector is also being targeted with the hosting of other world-class sporting events such as the Abu Dhabi Desert Challenge and recently, the Ultimate Fighting Challenge placed Abu Dhabi centre stage as an exclusive tourist destination. Abu Dhabi is engaging in a major reinvention as a high-culture, high-energy, high-class city – and it wants the whole world to join in.

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Sheraton Interview with Thomas Van Opsal, General Manager

Adorning the Corniche at the north east corner of Abu Dhabi Island, is a well recognised international brand name – The Sheraton. One of two Sheraton Hotels on the island, the Corniche hotel is a land mark with which everybody who knows Abu Dhabi will be familiar. One of five Starwood-managed premises in the Emirate, the Sheraton is owned by Abu Dhabi National Hotels, a major player which also holds interests in the travel, transport and catering sectors. The half-Dutch, half-German General Manager of the hotel, and head of Starwood in Abu Dhabi, Thomas Van Opsal, is proud of the hotel’s premium position in the marketplace, “Sheraton is among the best resort hotels in Abu Dhabi”, asserts the General Manager, “we have twelve dining outlets, a huge health club, a lagoon, a private beach and the whole range of business facilities and services”.

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The approach that Van Opsal encourages in his staff is to place value on personal attention to the guests, “This business is not about buildings, it’s about a feeling of service. Starwood is setting itself apart in this regard. We have fantastic staff training, but overall, I think it is the nature of the staff that we hire that sets us apart”.

“Although Abu Dhabi has had less international PR than Dubai, the pace of development has now really picked up. Things like the Formula 1 and the introduction of the first branches of the Guggenheim and the Louvre on Sadiyaat Island will only serve to increase international recognition of Abu Dhabi, not only as a business destination, but as a tourism destination par excellence. This can only be good for the hotel industry.”

Van Opsal continues with recounting a story in which he received a phone call from a guest who had stayed in the hotel twenty years previously, marvelling about the fact that a member of staff had remembered his name, and had greeted him as if he had only been there recently. Despite a recent drop in room rates, suffered across the sector due to a multitude of hotel rooms coming online in the past year, the general manager is very positive about the outlook for the industry in Abu Dhabi.

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A New Brand of Hotel for a New Decade Interview with Stephan Vanden Auweele, Complex General Manager Aloft Hotel, Abu Dhabi National Exhibition Centre

For those visiting Abu Dhabi in order to attend the World Future Energy Summit, or indeed, any event hosted in the Abu Dhabi National Exhibition Centre, there could be no more convenient location in which to stay, than the brand new Aloft hotel. Situated directly in the main complex of the impressive ADNEC structure, Starwood’s newest addition to its impressive roster of hotel brands, is seeking to redefine the hotel experience and bring it into line with the needs and expectations of the business traveller in the new decade. Stephan Vanden Auweele, a Belgian national and general manager of the complex (encompassing Aloft and its soon-to-be-added sister hotel “Element”) is very passionate about Aloft’s brand philosophy and its potential for development and expansion in today’s international markets. “Aloft brings to the table an entirely new concept of what it means to be a cutting edge hotel. Our hotels

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have a unique feel to them – they are modern and trendy. I sometimes think that some people may not feel entirely ‘at home’ in the salubrious environs of some five star hotels, but Aloft is a place where the guest can instantly feel comfortable and relaxed, whilst still enjoying all of the amenities of a top hotel. The décor and ambience will definitely be appreciated by guests within the age range of 25 – 45.” The modern approach that Aloft takes with regard to its décor, continues throughout every aspect of the hotel, from the amenities to the very spirit of the place. In the lobby, guests can play pool or relax on bean bags and ultra-comfortable rocking chairs, all while still feeling that they are in a top quality hotel. There is a less formal atmosphere than a traditional five star hotel, but rather than detract from the hotel experience, the combination of youth and friendly professionalism serves to make it feel somehow more comfortable.


Style at a steal Vanden Auweele is enthusiastic about this new alternative which Aloft is bringing to the market; “We cannot be defined by the traditional star system, because we believe that the criteria by which the star system is measured are not entirely in sync with the needs of the average business traveller in the 21st century. At Aloft, you can play music from your iPhone through state-of-the-art speakers from the multimedia hub in your room. At Aloft, you can be sure that the second you turn on your laptop, it will be wi-fi connected with none of the usual problems. We are running a hotel that serves the needs of our guests. Needs that we have taken time to identify.� Is the general manager concerned that this new approach may alienate some more traditional guests? “If some guests decide that Aloft is not for them, then that is unfortunate, but it means that we are doing

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our job correctly. We do not try to be all things to all people, but we certainly cater to our niche and provide them with everything they need and more. You will not get slippers and flowers on your bed, but what you will get is the very latest in technology, the very best in modern design and a friendly, accommodating and fully trained staff that will do their very best to ensure you have a pleasant stay.” The streamlined approach that Aloft takes in running its operation, means that it is in a position to pass savings onto the customer to the tune of 20 – 30% on the room rate of an average five-star hotel. “The extensive due diligence that was undertaken while conceiving the Aloft brand means that we know exactly what our target clients need and we service those needs completely. We are not to be confused with a budget hotel – our rooms are spacious and sophisticated. They are a perfect synergy of luxury and functionality. Our fitness centre is equipped with the finest brands and best models. It is something our guests really appreciate.”

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Rene Camilleri Complex Director of Sales & Marketing E-mail:rene.camilleri@starwoodhotels.com Tel: +971 2 654 5070

“Every one of our 408 rooms is equipped with a large flat screen TV. When I am staying in a hotel, I want what is most important to me,” explains the general manager, “I want a large TV, I want easy internet connection, I want to feel comfortable in the atmosphere – these are the things that Aloft provides with our hotels. We are funky and trendy and we cater for a growing niche in the market.” The accessibility to ADNEC, the Gulf’s foremost exhibition centre is a genuine strategic advantage that the hotel possesses. It can expect to be fully booked every time an event is held, but the hotel is running on high levels of occupancy even when there are no events. The indoor space of ADNEC is complimented by an outdoor space on the 5th Floor that Aloft used to hold its inaugural concert in February 2010 – The Celtic Tenors. These enviable facilities add a new dimension to the property. On the 12th Floor, which also happens to be the roof, is “relax@12”, a sophisticated bar where one can enjoy

amazing 360 degree panoramic views to get you in the mood for an exciting evening. In addition to that, the signature brand “w xyz” bar provides not only refreshments, but cuisine of a very high standard. This author must admit to developing a special fondness for the high quality steak sandwiches that this fine establishment produces. The brand is expanding rapidly with 41 hotels opened internationally since 2008 and another 60 or so in the pipeline. If you couple this with the 97 Element Hotels (the first brand of entirely “green” hotels with a “Zen” theme) currently planned, it is clear that Starwood Hotels & Resorts Worldwide Inc. is intent on putting its “next generation” hotel chains on the map in a very big way. It is clear that Aloft caters for a demographic that feels younger and more versatile than the generation that preceded it. A hotel brand that reflects how they feel about themselves has not yet come to fruition in the international arena. This new range of hotels may just be the brand that embodies their values and holds them “Aloft”.

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Al Raha Beach Hotel Interview with Kamal Zayati, General Manager

Twenty minutes from downtown Abu Dhabi lies a hotel property which distinguishes itself from those in the city centre. Spacious, elegant and with an air of sophistication, the Al Raha Beach Hotel offers something different to the Abu Dhabi visitor, be it business or pleasure. 110 rooms and 24 exclusive villas (for short and long term stays) comprise the complex which sits adjacent to 900 metres of clear beach front. Beautifully landscaped gardens adorn the environs, contributing to a luxurious experience with a distinctly Arabian hospitality. While the ambience that one encounters upon first entry to the illustrious front lobby is certainly one of luxury, the hotel also offers business guests the full range of services to suit their needs. The hotel customarily holds business functions in its considerable ballroom (capacity 800), and facilitates corporate meetings with its 8 fully equipped meeting rooms. Owned by government body ICT and managed by National Corporation for Tourism & Hotels (NCT&H) under the Danat Hotels and Resorts Brand, Al Raha Beach Hotel also bears the distinguished logo of “Preferred Hotels and Resorts�, indicating that it has reached and maintains

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the exquisite levels of service, facilities and upkeep that membership of this distinguished group necessitates. Many prospective guests will also be pleased to note that the hotel is located along a sandy beach and only 15 minutes from the Abu Dhabi Golf Club, providing the perfect balance of pleasure and business. Al Raha Beach also provides excellent spa and health club facilities including two gyms, indoor squash courts, a private marina, a beauty salon, indoor and outdoor pools and a volleyball court. In terms of food and beverage, Al Raha Beach provides a range of options with five excellent restaurants catering to a variety of international tastes. General Manager, Mr. Kamal Zayati is enthusiastic when discussing the advantages of Al Raha Beach Hotel’s location, “We are located in such a strategic place that I do not think there is a better place in Abu Dhabi. We are only 10 minutes from the airport, 15 minutes from the Abu Dhabi National Exhibition Centre, 20 minutes from downtown and 45 minutes from Dubai. In fact, we are so close to Jebel Ali Free Zone (JAFZA) and the Southside of Dubai, “New Dubai”, that, given the traffic issues, it can be more practical for some visitors, with business in “New Dubai” to stay here, rather than traditional hotels on the far side of Dubai.”

Given this very strategic positioning, Al Raha Beach is set to capitalise on the future developments of Abu Dhabi. “The city is moving out this way”, declares the general manager, “all of the new developments are taking place towards this direction. We are very close to Yas Island (only 15 minutes away), where the new Formula 1 track was recently unveiled. Masdar City is currently in the process of being built and that is very close by as well. The road access here is second to none, so in terms of accessibility, Al Raha Beach is certainly very well positioned.” With facilities and ambience to rival the most celebrated hotels in the world, Al Raha Beach combines comfort with accessibility. The personalised service is also another factor which contributes to the good name that the hotel enjoys on the market. The staff were some of the most friendly and courteous that this author has come across. They are a credit to their general manager. As Kamal Zayati rightly says, “Our facilities, relaxing atmosphere, personalised service and convenient location all serve to make a stay at Al Raha Beach Hotel memorable for each and every guest, be they here in Abu Dhabi on business or pleasure. I do not think there is a better place in Abu Dhabi”.

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Publication coming soon

Abu Dhabi’s International Relationships

An in-depth look at Abu Dhabi’s bilateral relations with key countries



Vision 2030 Abu Dhabi