Abu Dhabi Report with Sunday Times 17_Oct_2010

Abu Dhabi OCTOBER 17, 2010

Investing for a sustainable future

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The royal fast track

Abu Dhabi’s rulers are rushing to build a new economy, says John Flanders

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AFP

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here are rollercoasters and then there is Ferrari World’s Formula Rossa.

From a standstill, you accelerate to 62mph in just two seconds, pulling 1.7G. The cars reach a top speed of 149mph before flicking through the chicanes and crossing the finish line. The ride, which opens next week, is the centrepiece of Abu Dhabi’s latest attraction on Yas Island, home of the Formula One Grand Prix, which will conclude this year’s season next month. It is also the perfect metaphor for the emirate, one of the seven that form the United Arab Emirates.

Abu Dhabi is a city state in a hurry.

From a standing start, it wants to establish itself as the undisputed sporting, leisure, cultural, scientific, media and business hub of the Gulf in a generation. If it succeeds it could become the unofficial capital of the Middle East. While its neighbour, debt-hobbled Dubai, continues to chase financial services, property investors and footballers’ wives, Abu Dhabi intends to build a more balanced and secure economic base that will endure once its oil reserves finally run out.

The pace of change is remarkable.

Six years ago, after the death of conservative-minded leader Sheikh Zayed bin Sultan al-Nahyan and the succession of two of his 19 sons, Sheikh Khalifa, his eldest, as president, and the much younger Sheikh Mohammed as crown prince, Abu Dhabi started to use its oil wealth — it has 10% of the world’s known reserves — to impose itself on the map of the world.

One of the first projects to get off the ground was Abu Dhabi’s international carrier, Etihad Airways, a rival to Dubai’s Emirates. Next came the landmarks, such as the $3 billion (£1.9 billion) Emirates Palace hotel, with its $1,000-a-night rooms and $10,000 suites, and the magnificent Sheikh Zayed Mosque, one of the largest in the world. Next, laws were changed to allow foreigners to buy property, prompting the first residential developments. Sport followed, with the purchase of Manchester City Football Club, the debut of the Grand Prix last year, and now Ferrari World.

So far, so razzle-dazzle. But there’s more. Saadiyat Island is being transformed from dusty desert scrub into a $27 billion, 670-acre cultural district with museums, galleries and concert halls designed by some of the world’s best-known architects, including Zaha Hadid, Jean Nouvel, Tadao Ando and — at the special request of the crown prince — Frank Gehry, who will try to outdo what he did for the Guggenheim in Bilbao. For good measure, Abu Dhabi has paid $1.3 billion for an outpost of the Louvre, the first outside France. Another star architect, Norman Foster, is behind Masdar, a low-carbon city.

Abu Dhabi is investing in nuclear

Frank Gehry’s design for the Guggenheim, a pet project of Sheikh Mohammed

power, with no hint of the US opposition evident in Iran. The emirate is diversifying its industrial base by expanding into high-tech industry, thanks to tie-ups with the American giant GE and computer chip makers Advanced Micro Devices of the US and Chartered of Singapore.

The desert kingdom is becoming an aerospace hub, attracting Germany’s Daimler and investing in Richard Branson’s Virgin Galactic commercial space-flight programme. It is also pushing ahead with aluminium production, solar energy and high-tech healthcare. To boost trade, a vast new port is being built. Overall, the city state is spending $1 trillion on infrastructure alone.

New deals signed with Fox and Warner Bros are creating the Gulf’s film and media hub. The Abu Dhabi Investment Authority (ADIA), the world’s biggest sovereign wealth fund with holdings worth up to $1 trillion, has invested cannily in blue-chip assets such as Barclays and the private-equity group Carlyle.

Abu Dhabi has done so much, so fast, in spite of the credit crunch and the fall in oil prices, thanks to its vast capital reserves and what supporters call

streamlined decision making and is dismissed by detractors as autocracy.

Put simply, the city state is the world’s largest, richest family business.

The heads of the ruling family are chairman, chief executive and chief operating officer of Abu Dhabi Inc, so to speak. They give orders to a board of loyal subordinates, who implement

London forum Nasser Ahmed al-Suwaidi, chairman of Abu Dhabi’s department of economic development, will lead the emirate’s delegation at the Abu Dhabi Investment Forum in London this week. The event, on Wednesday, at the Excel convention centre in Docklands, aims to highlight trade and investment opportunities and offers the chance to meet top-level policymakers and business people. Participation is by invitation only. Register interest at ADIFLondon.com

policy without the need for approval from any elected body. There are no political parties. The press is owned by the ruling elite and uncritical of it.

Sheikh Khalifa, 62, is the chairman of Abu Dhabi Inc, and his half-brother, Sheikh Mohammed, is the chief executive. Sheikh Mohammed is the driving force behind Vision 2030, the emirate’s development blueprint. The Sandhurst-educated 50-year-old, who carries the rank of general, is also the chairman of the executive council, essentially Abu Dhabi’s cabinet. Sheikh Khalifa, who Forbes magazine estimates has personal wealth of $23 billion, is less hands-on than Sheikh Mohammed, but it would be wrong to underestimate his role. He is chairman of ADIA and president of Abu Dhabi’s supreme petroleum council, which sets the emirate’s policies for hydrocarbons, the key source of revenue.

Sheikh Mansour, 40, is the chief operating officer. He is a full brother to the crown prince and is among six sons of Sheikh Zayed who share the same mother, Fatima, a favourite wife of the late ruler. Sheikh Mansour has been chairman of International Petroleum Investment Co since 1994 and is the federal minister of presidential affairs.

He sprang to global prominence by spearheading the acquisition of Manchester City and investing $3.5 billion in Barclays bank.

Below the ruling family elite are a small number of handpicked lieutenants. Key among them is Khaldoon Khalifa al-Mubarak, the urbane, 35-year-old, US-educated head of Mubadala, a state-backed investment house. He is behind the Ferrari World development (Mubadala has bought a 5% stake in Ferrari), Masdar and much of the industrial diversification. As head of the elite Executive Affairs Authority, he is a key adviser to Sheikh Mohammed, and the unofficial spokesman for the sheikhs.

British academic Christopher Davidson, author of a recent history of Abu Dhabi, describes the system by which the emirate’s oil wealth is distributed among the ruling family, the government and its people as “tribal capitalism”. If the wealth were shared equally between the 420,000 citizens of Abu Dhabi, all would be millionaires, but, in fact, for ordinary Emiratis the benefits mostly come in the form of new schools and jobs. For overseas investors, the benefits come in the form of investment opportunities.

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A vision for an oasis in the Gulf A 20-year plan seeks to make the emirate a haven of sustainability, says Claire Malcolm

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rom a population of only 7,000 in 1950, the city of Abu Dhabi has expanded to 1.1m, one of the fastest growth rates on the planet, and the boom shows no sign of slowing. The emirate’s urban planning council (UPC), which is overseeing the ambitious Plan Abu Dhabi 2030, predicts a city population of 1.2m in 2013 and 3m by 2030, an average annual growth of 5.2%.

The government has put in place a comprehensive development strategy, Vision 2030, to deliver well-designed and well-managed urban environments across the emirate for the new communities.

The first element is Plan Capital 2030, which will transform the metropolitan area that includes the seat of government. Tailored strategies for the eastern region of Al Ain, famed for its oases, and the oil-rich Al Gharbia region in the west are due to be released shortly.

Falah al-Ahbabi, general manager of the UPC, says: “The key objective for the Vision 2030 initiative is to develop Abu Dhabi as the modern, sustainable Arab capital of the world.”

Sustainability is at the heart of the plan and projects must follow the principles set out in the development code called Estidama, the Arabic word for sustainability.

The UPC studied low-carbon initiatives, transport policies, water-saving and energy-saving strategies and street and community design in cities round the world, including Munich, Stockholm, Paris, London and Seattle, while bearing in mind the emirate’s hot, arid climate.

“We acknowledge the need for a comprehensive industrial set-up in Abu Dhabi, hence the key focus is on the creation of a world-class infrastructure that not only enhances the urban lifestyle but also paves the way for the introduction of newer and diversified industries,” says Ahbabi. “Incentives will be offered to businesses to set up in the more remote areas of the emirate and develop economic clusters in certain

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5 Mark Greenberg

Ambitions of an emirate Nurai Island Ferrari World

Dubai Abu Dhabi

Guggenheim

Saadiyat Island

Louvre

Al Gharbia

Suwwah Island Being developed as a centre for financial services; already attracting international banks to rival Dubai

Emirates Palace Hotel

Al Ain

Richard Branson’s VSS Enterprise over the Mojave desert. Abu Dhabi has a 32% stake in the programme

Performing Arts Centre National Museum Port Zayed

UNITED ARAB EMIRATES

An attempt to bring visitors year round to Yas Island, home of the Abu Dhabi Grand Prix

50 miles

Maritime Museum Yas Island Sun and Sky Towers Reem Island

Corniche

Abu Dhabi City

Eastern mangroves

Abu Dhabi international airport Al Raha Beach

City landmark since 2005, surrounded by palms, with pools and a white sand beach on the Gulf

locations of Al Ain and Al Gharbia.”

Plan Capital 2030 is the blueprint for development on Abu Dhabi island and its neighbouring communities. The flagship Capital District, a 49 sq km, mixed-use city on the mainland, close to the international airport, will be the new home of federal government and will have a 370,000-strong population across 15 precincts.

A network of parks, plazas and paths will connect the burgeoning communities, and new metro and tram systems will reduce reliance on motor vehicles.

Traditional ways of life will be showcased through initiatives such as

1 mile

Capital City District

Everything you need, online A one-stop web portal is making life easier for Abu Dhabi’s residents and for business investors.

Abu Dhabi Systems & Information Centre (abudhabi.ae) brings together government departments, authorities and administrations and offers help with all aspects of living, working and doing business in the emirate.

Online services include access to passports, residency documents, land certificates, permits and

environment-related licences. Visitors can look up rules on health licensing and labour regulations and apply for documentation.

Rashed al-Mansouri, directorgeneral of ADSIC, says that it also shows comprehensive information for new and existing businesses on employment law, international trade, licences and permits and doing business with the Abu Dhabi government.

Abu Dhabi will help to put travellers into space, writes Richard Branson

Yas Marina F1 circuit

TwoFour54 Media Zone

ADSIC’s Rashed al-Mansouri

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Masdar

Sheikh Zayed Mosque One of the largest in the world. Dedicated to the emirate's first leader and father of the present rulers

the Heritage Trail, which will re-establish the Bedouin route from the coast to the desert.

The first phase of regeneration of the Corniche, the 8km coastal boulevard renowned for its gardens and fountains, has already been completed, providing public beach facilities, cycle paths and a boardwalk. New guidelines will preserve the mangroves of the eastern shore and surrounding coastline.

Al Ain, known as the garden city, has one of the most diverse natural environments within the emirate as well as a rich cultural heritage. Plan Al Ain 2030 sets out special treatment of the region’s oases, continued support

The sky’s no limit for our adventurous investors

for traditional Bedouin living in the “fareej” neighbourhood style and encouragement for cultural and ecological tourism.

Al Gharbia is rich in gas and oil reserves and accounts for 83% of the emirate’s landmass but has a population of only 115,000. Plan Al Gharbia 2030 will develop existing communities across the seven main towns with improvements to infrastructure and accessibility. It will promote expansion of oil and other heavy industrial activity but, with the principles of Estidama in mind, will also encourage sustainable tourism development.

stood on the side of a cold and windy runway in California’s Mojave desert last December to watch an extraordinary event: the unveiling of the world’s first commercial manned spaceship, VSS Enterprise. It was one of those rare moments when I knew that we were witnessing something special, a ground-breaking project that will act as a catalyst to a new industry: commercial space travel.

Standing alongside me and my family that evening were a group of people who shared my initial vision for Virgin Galactic and played a part in transforming the dream into reality.

There were several hundred of our first customers from round the world, eager to see the vehicle that will take them to space. These pioneers, many of whom have already paid the full $200,000 (£125,000) for their tickets, epitomise the commitment that has marked out this most unusual project.

There were the US politicians and officials who have helped us, including Governor Arnold Schwarzenegger of California and Governor Bill Richardson of New Mexico, which has funded Spaceport America, Virgin

Galactic’s operating base. There were two other important guests, without whom we could not realise our dream: senior officials from Aabar Investments, our Abu Dhabi funding partner.

Aabar has taken a 32% stake in Virgin Galactic for about $280m, with further funds available. It was a milestone in the project and underlined to me the farsightedness, ambition and sophistication that characterise the Abu Dhabi investment community.

We had intended to secure fresh funding once the project was sufficiently advanced to establish investment credibility. However, our launch coincided with the worst global recession in 70 years and the virtual meltdown of the financial markets.

Despite this, Credit Suisse, our Middle East adviser, assured us we would find a strong match in Aabar.

I met Sheikh Mansour bin Zayed al-Nahyan in Abu Dhabi and later Mohamed Badawy al-Husseiny, Aabar’s chief executive. Both understood quickly that here was an opportunity to invest at an early stage

‘THIS EPITOMISES THE AMBITION AND SOPHISTICATION OF THE ABU DHABI INVESTMENT COMMUNITY’

in a business that will generate a strong return and, given the right initial support, has almost limitless potential.

Virgin Galactic has always been characterised for me as a business that is simple but not easy: simple in that its aims and focus are uncluttered and concise; not easy in that we are attempting ground-breaking spaceship construction and engineering, creating a new industry and marketing to a new audience.

Making this work requires complex teamwork. We have to meld the genius of Burt Rutan and his team at Scaled Composites who make the spacecraft, the marketing skills and project management of Virgin, and the vision, support and understanding of our backers, Abu Dhabi and Aabar.

The next months will be about ensuring the highest levels of safety as we take the spaceship through its exhaustive test-flight programme and gain regulatory approval. We’re getting close to achieving my dream of operating a commercial space business and opening up space to thousands of aspiring astronauts.

Four hundred have already signed up, an extraordinary achievement at this stage of development. With the help of Aabar, the spaceship will transport the astronauts out of the atmosphere at nearly four times the speed of sound into space, where they will soak up the astounding views of the blue planet beneath them while floating in zero gravity.

Sir Richard Branson is founder of the Virgin Group

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Demand for power poses a challenge Nuclear, renewables, oil and gas — the emirate’s energy scene is firing on all cylinders, writes Robin Lyndhurst

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bu Dhabi pumps about 2.7m barrels of oil a day and, for political, economic and technical reasons, that figure is unlikely to change.“There’s effectively been a policy of ‘let’s leave it in the ground’ — a bit like having money in the bank — and certainly the economic case for raising production isn’t there, given Opec is currently saddled with 5m barrels per day of idle capacity,” says one energy industry source.

Another reason for this “fairly flat” production, according to local oil commentators, is that the oilfields have a high sulphur gas content that is difficult to process. To produce oil and dispose of the gas is expensive because the latter is environmentally hazardous. It also complicates drilling procedures, because releasing the gas

diminishes the pressure of the field itself, lengthening recovery times.

Abu Dhabi Gas Development Company, a subsidiary of Abu Dhabi National Oil Company, is working on the Shah Gas Development Project, which will substantially increase the emirate’s domestic gas supply. When it reaches full production capacity in 2014, the site is expected to process one billion cubic feet of gas a day.

Power demand is rising particularly rapidly in the Gulf and, although there are plans to develop nuclear capacity, that is only a partial solution to lowering the pressure on gas supplies.

Another hot issue looming on the horizon concerns the concessions with multinational oil companies, which are up for renewal in 2014. “A few years ago, you would have thought there would be an automatic renewal with the existing companies but the

Abu Dhabi’s oil production is likely to remain steady in the near future

industry has changed and Abu Dhabi may consider alternative approaches, perhaps from China or indigenous companies,” one source says.

All this could have a profound effect on revenues and on the sovereign wealth funds that have invested so heavily in development. Since the death of the UAE’s ruler and founding father, Sheikh Zayed bin Sultan al-Nahyan in 2004, Abu Dhabi’s development has accelerated, with billions of dirhams spent on projects across a range of sectors.

The financial crisis has seen asset prices tumble and, although Abu Dhabi’s exposure hasn’t been as great as that of some neighbours, the impact on its sovereign funds has been substantial.

“There’s never been a figure released — but whatever it was before the crisis, it’s a lot less today. They’ve taken a huge hit,” says one economic commentator who estimates values may have dropped as much as 30%.

“The emirate is blessed that oil’s now at $82 a barrel and if you’re pumping out more than 2m barrels a day, then it hardly constitutes a crisis.

“But the true cost probably runs into the hundreds of billions once you clock it all up — Masdar, the Formula One track, the metro system, infrastructure works and all the future cultural developments.”

Oil and gas demand is here to stay, believes Badr Jafar, executive director of the Crescent Petroleum Group, who adds that alternative energy sources can’t be developed at the scale and pace needed to sideline oil and gas in the medium term. “The Gulf region plays a critical role in driving global supply of oil and gas and will continue to do so, especially as new discoveries elsewhere face major extraction difficulties, which don’t apply to the giant fields here in the Middle East,” he says.

The International Energy Authority estimates that to increase the share of renewable power in global primary energy demand from 0.6% in 2007 to 5% by 2030 could require more than $2,400 billion of capital investment.

Jorge Ferrari/EPA

Dream to turn desert green has yet to bloom Economic climate change has hindered low-carbon city Masdar but the idea has not gone to seed, says Rachel Brown

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hen Masdar was launched in a hail of publicity in April 2006, the world looked on in awe as Abu Dhabi, the planet’s seventh-largest oil producer, announced plans to develop in the desert a zero-carbon city that would serve as a 21st-century icon for sustainability.

Four years and one global recession later, Masdar has left a conceptual mark but there’s little evidence of the urban development on the ground.

“Everyone liked the oxymoron of ‘greening’ the desert but if you went down to the site today, all you’d see is a hundred Portakabins stacked up and a lot of people walking around,” said one leading Gulf-based oil commentator.

Updates last week appear to confirm that some aspects of the project have proved tougher, and more expensive, than first envisaged. “That’s not surprising, as nobody has attempted building a zero-carbon city before,” said Robin Mills, author of The Myth of the Oil Crisis. “I am sure the government will put money in to ensure its success — although there are a number of ways of deciding ‘success’. It may be a ‘50%’ carbon-free city in the end.”

The completion date for Phase 1 has been put back to 2015. While Masdar City grapples with technical and economic challenges, the brand, even in an era of austerity, continues to have a strong appeal in the renewables sector. Masdar’s most telling

contribution so far — in time, it may prove its crowning achievement — has been to plant the sustainability seed the world over and serve as a catalyst for combating climate change.

Malaysia signed a co-operation deal with Masdar in January with a view to building its own low-carbon city. The second annual European Future Energy Forum — in association with Masdar — takes place at Excel London from Tuesday to Thursday this week. Supported by the government, the forum aims to unite the renewable-energy and clean-technology industries to explore opportunities, showcase the latest technological solutions and promote discussion between business leaders, industry experts, academics and policymakers.

These commercial opportunities are particularly important for Masdar, given it is a wholly owned subsidiary of Mubadala Development Company, which recently declared an AED4.5 billion (£770m) loss for the first six months of 2010, compared with an AED2.7 billion profit in the same period last year. It blamed the fall on “the decline in local and global markets”, although barely had the local market digested the figures when the stateowned firm was told it would get a AED13 billion injection from the government this year, which should assuage any investor concerns over Masdar’s financial footing.

Mubadala’s oil and gas division, whose primary focus is on upstream oil

and gas, not just in the Gulf but as far as the Caspian Sea, was among the firm’s bright performers, with operating income growing 44% to AED3.6 billion.

In June, Masdar signed a deal with Total of France and Abengoa of Spain to build the world’s largest concentrated solar power plant. The $600m (£380m) facility will offset the equivalent of 175,000 tonnes of carbon dioxide a year, says Masdar. Forging strong educational links is one way Masdar aims to raise the renewables bar — and it has seen concrete developments.

Classes for the second academic year of the Masdar Institute of Science and Technology, which has been developed in collaboration with Massachusetts Institute of Technology, started last

The emirate plans to transform a desert into a ‘green’ city

month and nearly 100 graduate students from 26 nations have been enrolled from 1,900 applicants.

Building upon the five master of science (MSc) programmes offered in the inaugural year, the second year provides two new MSc degrees — microsystems engineering and electrical power engineering, and an interdisciplinary doctoral degree (Phd) programme. The institute bills itself as the world’s first to solely focus on clean technology and alternative energies.

“It’s a positive step,” adds Mills.

“Abu Dhabi and the UAE are 30 years ahead of everyone else in the Gulf when it comes to environmental practices — Abu Dhabi even has a subministry dedicated to climate change.”

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World Business Times

Etihad aims to turn Abu Dhabi into a global air hub, says Karen Robinson

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ames Hogan, chief executive of Etihad, Abu Dhabi’s airline, has no doubts that he is in the right place at the right time.

“We are at the crossroads of the world,” he claims.

“Opportunities in business and in tourism travel mean that we can build Abu Dhabi into a key transport hub.”

Etihad, the airline founded only seven years ago by a royal decree, is not without local competition, with neighbouring Dubai’s Emirates and Qatar’s national airline also aiming to fulfil the same role. But with the growing importance of the region, Hogan, an Australian who joined the airline in 2006 and whose former roles include a stint as chief operating officer of British Midland, thinks there is room for them all.

“Our opportunities are what the Asian carriers had in the 1970s,” he says, “when the flying range of aircraft shortened the Europe to Australia trip from four stops to two. Now we can go from Abu Dhabi to all points in the world non stop.”

He is not just aiming to tilt the travelling world on its axis, away from the Asian stopover hubs. He also thinks his airline can redraw the traditional aviation map by taking passengers away from Europe’s mega-hubs of Heathrow, Charles de Gaulle, Schiphol and Frankfurt, with routes from the “secondary cities” such as Dublin, Brussels, Milan and Geneva — all “very strong markets” — to Abu Dhabi and onwards to India, Southeast Asia and Australia.

From Abu Dhabi, Etihad can feed passengers direct into a range of cities, including Toronto, New York and Chicago, and later this year will be adding its 65th destination, Seoul, to the schedules, with the goal of 100 cities by 2015.

But it is not all about transfers — almost 50% of Etihad’s passengers have Abu Dhabi as their final destination, looking for business and tourism opportunities. And the proximity of developing markets puts the emirate in an enviable position.

“We’re fortunate with the geography. In three hours from here you can be anywhere in the GCC [the Gulf Co-operation Council, a political and economic union for the six Arab states in the Gulf] and the Middle East,”

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Javier Garcia/backpageimages.com

New York

Hub city

15 hours

London 8 hours

How flights from Abu Dhabi connect with key markets and business partners

Moscow 5½ hours

Making strides

Istanbul 5 hours Cairo 4 hours 3 hours

Beijing 7½ hours

3½ Delhi hours

Mumbai

3 hours

Sydney 14 hours

Johannesburg 8½ hours

Flying start for fledgling airline says Hogan. A more exciting prospect, though, is that less than three hours in the other direction gets you to Mumbai. To reach “300m middle-class Indians” in the sub-continent, Hogan will be relying on a huge increase in the number of airports.

“There are 40 airports in India now, and there will be 70 within 10 years.

And in 10 years’ time I’ll be looking at the secondary cities of China —we’re eight or nine hours from Shanghai and Beijing. There is a market there for the Gulf carriers.”

Building his airline to the point where its schedules service 65 cities in just a few years was helped by financial backing from the government, but the plan, says Hogan, is to make a profit by next year: “My mandate is to make money.” In 2009, passenger numbers rose from 6m to 6.3m and revenue passenger kilometres grew 15.2%. Revenue exceeded $2.3 billion (£1.45 billion).

Etihad, which at present is flying 54 planes, announced the biggest order in commercial-aviation history at the

2008 Farnborough International Air Show, for up to 205 aircraft — 100 firm orders, and 105 options.

One factor Hogan welcomes in his quest for profitability is that “I’m not bound by legacy rules”, including obstreperous unions that dog the long-established carriers of Europe and the United States. He has staff from more than 120 nationalities among the 8,000 working in the business, though there is a move to train more locals as pilots — using the state-of-the-art simulators at Etihad’s headquarters.

new Port Khalifa in Abu Dhabi. Then there’s a passenger network to consider. It takes an hour and a half to drive between Abu Dhabi and Dubai.

With 125mph passenger trains, a link between the two powerhouses of the UAE would seem a no-brainer, although there will still be a lot of negotiations with individual emirates.

For Bowker, the GCC’s backing means that an Arabian railway is much more than a vision. “Imagine that the port of Sohar [in Oman] connected to Abu Dhabi and Dammam in Saudi Arabia. You will have created a land bridge by rail,” he said.

Dubai Jebel Ali Ras Al Khaimah Port Khalifa Port Saqr

Railway that is really going places Richard Bowker tells a story about the London Underground where he was working as a finance manager in 1993 when he was asked to review a report on the financing of Crossrail, writes Andrew Lynch.

Today the Crossrail project remains uncompleted. In Abu Dhabi, where Bowker, 44, is now chief executive of Union Railway, he is pressing ahead with plans to build a railway that will link up the seven emirates of the UAE and form part of a grander scheme for lines linking all six countries of the Gulf Co-operation Council (GCC).

“Twenty years to not actually build

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something would be incomprehensible here,” said Bowker, who is now in his second year in Abu Dhabi.

“The opportunity to get it right from the beginning is terrific. There is nothing like this in the world.” The plan is to start small — if that’s what you call building a 160-mile track to deliver 20,000 tonnes of extracted sulphur a day for the Abu Dhabi National Oil Company from an oil and gas field at Shah and later Habshan — in the west to the port of Ruwais. It is scheduled to open in 2013. After that, a link is planned between the two ports of Jebel Ali in Dubai and the

Rail routes

Musaffah Ruwais Ghweifat To Saudi Arabia

Abu Dhabi

Liwa

Sharjah

Fujairah Al Ain To Shah Oman

Man City’s James Milner

A football club, stakes in global banking giants, a multi-billiondollar investment in Daimler, space tourism — and a televised fighting show. This collection of baubles sounds like the portfolio of an eccentric plutocrat. In reality, it represents some of the most important overseas investments of Abu Dhabi Inc. Analysts of the emirate’s financial strategy often struggle to detect a guiding principle. That was the case when Abu Dhabi bought Manchester City for £150m in 2008: the reaction from many was: “They got the wrong one — they thought it was United.”

City were seen as also-rans compared with their neighbours, a recognised global brand. That may not turn out to be entirely fair.

Fortunes on the field largely determine the public perception of a club’s value. If City win trophies, Abu Dhabi’s estimated investment of more than £400m so far may seem a shrewd piece of business.

Sheikh Mansour bin Zayed al-Nahyan, a member of the ruling family, insists there is a strategy despite the apparent randomness of some purchases. An adviser explained: “All the investments are designed with two goals in mind: to raise the global profile of the emirate and of the UAE; and, in the long term, to make money.”

In 2008 it bought nearly £5 billion of shares in Barclays, the British financial giant trying to avoid a government bailout. The remaining stake has just been sold, bringing a total profit of about £2.3 billion.

Last year Sheikh Mansour’s Aabar Investments spent $2.7 billion on 9% of the luxury car giant Daimler-Benz, a brand that will benefit from global economic recovery. The shrewdness of other investments is debatable, at least in terms of cash. Last year Aabar bought 30% of Virgin Galactic, the space company founded by Sir Richard Branson, which has yet to launch a commercial flight. But the investment would certainly raise the emirate’s global profile should rockets take off from the Abu Dhabi desert, as is planned.

On the other hand, the purchase (though not by Sheikh Mansour) of a stake in Ultimate Fighting Championship by an Abu Dhabi company raised some eyebrows.

It did not seem to fit the global, upmarket brand strategy or sit comfortably alongside the Louvre and Guggenheim investments.*

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The race to become kings of finance Abu Dhabi’s bid to displace Dubai as the Gulf’s financial services hub faces some daunting hurdles, writes John Martin

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he top banker — working for one of those blue-blooded global investment houses — took a deep breath. “Abu Dhabi has all the potential to be the Hong Kong of the Gulf but it has to sort out two things: the relationship with Dubai and the real-estate market,” he said. “Get those right and the field is theirs. And no, you cannot quote me.”

His desire for anonymity demonstrated the sensitivity of those two issues for the Abu Dhabi financial establishment and for the “masters of the universe” with whom they work.

The importance of Dubai and real estate was shown by a scene at the recent Cityscape exhibition in Dubai, the annual showcase for the property sector in Abu Dhabi’s rival emirate.

Even in the dark days of 2008 and 2009, Cityscape celebrated the bricks-and mortar business that, rather than oil, had been the foundation of the Dubai “miracle” until it all went wrong.

This year, representatives of Dubai’s ruling Maktoum family paid their usual visit. They lingered long over one stand in particular, a scaled-down version of Abu Dhabi’s new financial centre, being built on Sowwah Island in the United Arab Emirates capital.

The project — with one 40,000 sq ft tower ready and three more scheduled — represents a dramatic raising of the stakes by Abu Dhabi in the race to become the premier financial services centre of the Gulf. For many years, Dubai had a seemingly unassailable lead, its historical role as a commercial hub making it the obvious choice.

Dubai has a custom-built location, too, the Dubai International Financial Centre (DIFC), a self-contained and self-ruling home in the heart of the city, which has already lured some of the biggest names in global finance, such as Goldman Sachs, Rothschild, Lazard and Merrill Lynch.

Some of those bankers will now be wondering if they backed the wrong horse. Abu Dhabi, less than two hours’ drive down Sheikh Zayed Road, is emerging as a strong candidate for regional supremacy in finance.

The managing director of the Middle East and North Africa region for one of the biggest financial institutions in the world said: “Dubai and the DIFC has been a good base these past eight years

but I find myself spending so much time on the road travelling to Abu Dhabi or staying in hotels there that we are seriously thinking of a more permanent presence. It’s almost inescapable, we just have to be there.”

The attractions are summed up in one word: capital. The capital city of the UAE has one huge financial plus — it has cash in the bank, whereas Dubai’s government and related businesses have $100 billion (£63 billion) of debt. Liquid capital is king in the post-crisis environment and Abu Dhabi has it in spades, at least at the top level.

Abu Dhabi Investment Authority is the richest sovereign wealth fund in the world. Estimates vary but it is unlikely to be worth less than $350 billion, thanks to the emirate’s huge energy wealth over the years.

AD, as it calls itself, imitating Washington’s “DC” tag, is also home to the UAE federal government, the oil ministries, the central bank (which bailed out Dubai with $20 billion at the height of the crisis) and a banking sector that has come through the credit crunch, if not unscathed, then at least

Islamic finance Al Hilal bank, founded in 2008 and 100% government-owned through the Abu Dhabi Investment Council, has joined the small band of banks offering Islamic finance to retail and business customers.

“Whatever you need in banking has its product and service in Islamic banks,” says chief executive Mohamed Berro. Loans are not offered with an interest rate but with a comparable “profit” figure.

The equivalent of a mortgage is a “lease to own” — a good deal, says Berro, as the bank owns your house as you pay off the lease, funding repairs and maintenance.

Sharia is not against being profitable, says Berro, but it does oppose getting rich by unethical means. Its principles should protect customers from irresponsible banker behaviour.

in better shape than those of many regional rivals. That’s the beauty of capital. You will also find there the Abu Dhabi Securities Exchange (ADX), which many analysts think will emerge top in the consolidation of the UAE’s three stock markets.

It all adds up to a powerful package.

Sowwah Island began as a “business district” but is now most often referred to as the “financial centre”. It will house the new ADX headquarters, on the principle that, like New York, London and Tokyo, any self-respecting financial centre must have a thriving stock market at its heart.

When Sowwah is completed, there will be enough capacity to offer the international financiers, as well as the local banking and financial industry, prime office space at good rates. That is an important consideration. Despite a downturn in prices and rental rates on Abu Dhabi property, there is still a shortage of real estate with specifications to meet the exacting demands of big financial institutions.

There might even be space for the Dubai banks. They used to stick to their own emirate but, with zero or very low levels of growth forecast for Dubai this year and next, some bankers might also be tempted to take the drive south to Abu Dhabi.

If so, they will find formidable competition in the capital. The market leader is National Bank of Abu Dhabi (NBAD). Known as the “sovereign bank” because of its close associations with the ruling Nahyan family, NBAD has had a good crisis, thanks in part to its role as a conduit for government spending via the Abu Dhabi Strategic Plan 2030.

“NBAD came through with little property exposure because it avoided the mortgage business,” said Raj Madha, an industry analyst for Rasmala Investment Bank. “It is also aiming to be a ‘pure’ bank for the Middle East and North Africa, the only one in the UAE, with a presence in Egypt, Oman and all the GCC countries [the Gulf Co-operation Council, the six Arab Gulf states’ political and economic union] apart from Saudi Arabia.”

NBAD’s big local rival is Abu Dhabi Commercial Bank (ADCB), which had a tougher time during the global crisis and the local repercussions in Dubai. It was exposed to the financial problems of Dubai World, as well as the region’s biggest scandal: the ongoing feud between Saudi Arabia’s Gosaibi business family and the entrepreneur Maan al-Sanea. The result was billions of dirhams written off by ADCB, but it was not alone: many other UAE and regional banks were also badly hit.

Other banks in the capital add to the

17.10.10 13 Mhic Chambers

Andrew Parsons/Eyevine

Eraiqat: ‘We’ve been hurt when we’ve lent outside the UAE’

Local bank that bought out RBS

Abu Dhabi is likely to emerge as the UAE’s top stock market

competitive arena. First Gulf Bank, controlled by the Nahyan family, is regarded as a high-quality operation with an efficient cost structure and high growth rate, despite its exposure to the decline in the Dubai property market. In the fast-growing Islamic banking sector, there are Abu Dhabi Islamic Bank and Al Hilal, both run along more orthodox policy lines of the sharia financial system. But this has not prevented relatively high exposure to the falling real-estate market.

Not everybody thinks Abu Dhabi will have things all its own way in the contest to be the regional financial capital. One banking executive sums it up thus: “Abu Dhabi is still falling short in three important areas. There is no independent framework of regulation

there, unlike the DIFC in Dubai; as well as this legal infrastructure, it also needs physical infrastructure to be a financial centre, and while this is admittedly being built, Dubai’s is virtually all in place; and, just as important, a thriving financial market place needs to attract human capital.

At the moment Abu Dhabi is not doing enough to promote quality of life there.

Dubai is still a better place to live.”

The drawbacks of financial life in Abu Dhabi were recently highlighted by the case of Aabar Investments, a government-owned investment vehicle that held, among other assets, a multi-billion-dollar stake in the luxury car maker Daimler and the emirate’s investment in Sir Richard Branson’s Virgin Galactic space travel business.

Aabar’s shares were listed on the ADX but, out of the blue earlier this year, plans were announced to de-list the company, in conditions that left some investors aggrieved. “It was a salutary lesson for us,” says one financier with an international group.

“We’re finding it hard to persuade investors to put their cash where everything can change so quickly according to the whim of the rulers.”

And this is not a two-horse race.

Other Gulf states have their ambitions.

Qatar, for example, has arguably emerged from the financial crisis in a better position than either Abu Dhabi or Dubai. The big regional economic powerhouse is still Saudi Arabia, which for many foreign financiers remains the region’s ultimate market.

Global banking groups are playing a pretty shrewd game, shopping around to see which rival is going to offer the best terms for further investment. “We have to have a presence in Abu Dhabi, of course, but it will take something extra to encourage us to put all our eggs in that basket, for example by making it our regional headquarters,” said one executive (again unnamed).

All the big western banking groups have a presence in the city, with HSBC, Standard Chartered and Barclays leading the way among British groups.

But UAE law limits how many branches foreign banks can open. The formula: one branch for each of the seven emirates and one extra, for a total of eight permitted in the UAE. “Emirates NBD has got 120 branches in the UAE,”

says the banker sullenly. “Maybe if the authorities offered us another branch in the city we might consider it as our main regional location.”

That conservatism, however, has also been the strength of Abu Dhabi. It is a conservative, solid market, where Islamic values are maintained and traditional legal frameworks endure.

The view is decidedly long-term.

The fall-out from the financial crisis, in terms of the relationship with Dubai, the crucial real-estate market and the whole apparatus of financial regulation, has given Abu Dhabi the chance to leapfrog into top position in the Gulf financial ratings.

Everything now depends on how urgently it wants to seize that opportunity.

He won’t brag about it publicly, but Ala’a Eraiqat, chief executive of ADCB (Abu Dhabi Commercial Bank), was the last to blink in some pretty nail-biting brinksmanship during the acquisition of RBS’s retail banking operation in Abu Dhabi.

The deal has recently been sealed and now his bank has 250,000 new customers, courtesy of RBS. This gives Eraiqat — 41, London-born, Abu Dhabi-raised, US-educated and with a career that includes stints at Citi and Standard Chartered — a bank with 550,000 retail clients and 50 branches within the emirate.

ADCB runs retail and commercial operations and although he has a global team of investment experts, his is, he stresses, “a local bank with a large government shareholding — we will compete on our own turf”.

He explains that while he wants his bank to grow, “in terms of geography, we’ve been hurt when we’ve lent outside the UAE and ended up with a negative result”.

They lost AED 2 billion (£344m) on a project in Saudi Arabia, for example. So now, “for the comfort of our investors and shareholders we

are focusing on the UAE, where we have a good understanding and a track record”.

ADCB has “not stopped lending to retail and SME customers, but we’ve grown our deposits more than our loans”. There’s about $40 billion (£25 billion) on the balance sheet, but he “can’t talk about profitability”.

So on the one hand there are the retail customers, recently offered an air miles card in alliance with Etihad, the Abu Dhabi airline. He is proud of the fact that the sleek premium black card for the biggest spenders has no bank logo visible on the front.

“Lose your ego and make more money” is the marketing mantra behind this move.

And in wholesale investment, ADCB is “moving away from old-fashioned lending and trying to do advisory work” for government projects, especially in Abu Dhabi.

Looking out from his 21st-floor office window, the view includes the construction of “the biggest tunnel in the Middle East. Bridges, tunnels, whatever comes with them — this is real spend.”

Karen Robinson

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thesundaytimes.co.uk/abudhabi

Information overload

AFP/Relaxnews

E

arlier this month, the UAE halted plans to ban certain BlackBerry services, after reaching an agreement with the device’s manufacturer, Research In Motion (RIM). Last month, a four-year-old ban on Flickr, the photo-sharing website, was lifted by the authorities. How RIM or Yahoo!, which owns Flickr, had the bans rescinded was unclear.

In the Flickr case, it is believed that a content-filtering system similar to one used in Singapore was introduced.

However, both disputes illustrate the country’s precarious relationship with digital media which, at a time of economic uncertainty and technological growth, has taken on added significance. Few countries manage to be simultaneously progressive and regressive — but it’s a peculiar juggling act at which the UAE seems to excel.

Four of the 12 countries highlighted

in a recent Reporters without Borders paper, Enemies of the Internet, were Arab countries (Egypt, Saudi Arabia, Syria and Tunisia) and while the UAE wasn’t listed, it was identified as somewhere “under surveillance”.

The proposed ban on BlackBerry Messenger, email and web-browser services because of security concerns was announced by the Telecoms Regulatory Authority in the summer, making headlines globally. Half a million local users and travellers with foreign BlackBerrys would have been affected.

Days before the ban was due to come into effect, the UAE telecoms regulator issued a statement saying a deal had been reached with RIM that brought the device into compliance with local laws: “All BlackBerry services in the UAE will continue to operate as normal.” Whether the Canadian maker of the device had offered any concessions was unclear.

Homes from home Housing is still in short supply, says Claire Malcolm

The UAE is juggling online freedom with security fears, says Robin Lyndhurst

Yousef Tuqan of Flip Media says Abu Dhabi has many digital challenges, such as its dispute with BlackBerry

Although figures vary, mobile phone usage in the UAE is high and two-thirds of handsets are estimated to be internet enabled. Internet penetration runs at just under 76% of the 8m population.

However, in the same week that the Flickr dispute was resolved, the digital chairs moved again, as UAE buyers of iphone 4 handsets were surprised to

17x6 Left

find they didn’t carry Apple’s free video phone application, FaceTime.

Yousef Tuqan, director of Flip Media, which has offices in Abu Dhabi and nine globally, says: “The industry is still in its exploratory phase. I’ve lived in the UAE 14 years and I’m still doing the same education job I was doing in 2001 and explaining the importance of

digital. One of the problems regionally is that digital is still seen as a part of IT, and not marketing or intrinsic to the business.”

He adds that while digital challenges persist, the country is evolving at an incredible speed. He remains optimistic. “The rulers are pushing the country in the right direction,” he says.

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Island haven

B

y the end of 2013 about 55,000 new homes are expected to reach Abu Dhabi’s property market.

Residential demand will be fuelled by a government that has committed $15 billion to infrastructure projects through 2012, including a city-wide metro system and a federal rail project to link the entire United Arab Emirates. A new port facility, new airport developments and nuclear energy schemes will attract more foreign manpower.

“Abu Dhabi is creating an ideal environment for international investors,” says Mohammed al-Mubarak, chief commercial officer for local developer Aldar Properties.

A report last summer by UAE-based Tasweek Real Estate revealed that construction and real estate currently account for just 9% of Abu Dhabi’s GDP, compared with 27% in Dubai. Under the emirate’s Capital 2030 plan, Abu Dhabi is already fast-tracking the development of new communities, a futuristic Central Business District on Sowwah Island and extensive coastal projects, to extend the capital beyond its island centre. Aldar’s Al Bandar development has just handed over the keys to its first units and Sorouh’s Sun and Sky Towers on Al Reem Island are gearing up for a year-end opening.

The 55,000 figure is quoted in Cluttons’ October market update but accommodating demand is still an issue, according to Charlie Acworth, an independent consultant and former senior executive with Aldar Properties and DTZ. “The supply-demand imbalance has not changed, there is still a shortage of residential stock, it’s just not as dire as Q1 2008,” he says.

Harry Goodson Wickes, an associate at Cluttons, says: “Infrastructure projects are driving demand for real estate and could employ up to 14,000 people in the next few years. They will have to come and live in Abu Dhabi.”

Rents have dropped, though, and are continuing their slide, albeit at a slower rate. A Q3 report from UAEheadquartered property consultancy Asteco confirms declines of up to 30% in some districts, although prime buildings saw an average drop of only 7%. There is a flight to quality by

Nadia Zaal, head of the property developer Zaya, describes the emirate as a ‘magnet for the ambitious’

tenants tired of badly maintained properties without adequate amenities.

“If you are looking to buy in a new development that is about to come online there are good returns to be had,” says Goodson Wickes. Acworth puts a different slant on it. “Rents won’t come down as fast as in Dubai because the supply-demand imbalance is not there.” The million-dirham questions are: what do you get for your money and how easy is the buying process in a country where real estate legislation is in its relative infancy?

It’s already working for Aldar customers, according to Mubarak.

“International buyers account for a

considerable percentage of sales within Aldar projects, especially as they also enjoy full ownership rights for renewable 99-year terms for villas and land in designated freehold zones.”

The figures are appealing, if Asteco’s Q3 report is correct. It said sales prices of apartments and villas dropped by an average of 3% and 4% respectively on the previous quarter. Acworth believes the market has not found its true base price. “Some developers are still holding out for unrealistic prices on projects that are late in delivery and people really don’t know where prices will stabilise,” he says.

Today’s investor is increasingly

prudent and will often refuse to buy off-plan. “Now that projects like Al Bandar are live, you can see what you’re getting and this will make a huge difference to investor confidence,” says Goodson Wickes.

Developers are also trying to reel in potential investors with incentives — a first for the market.

On Al Reem Island, for example, Sorouh is offering a two-year guaranteed 9% return on units in Sun and Sky Towers. There are other factors, Acworth explains. “Abu Dhabi is still a good place to invest long term, but it needs to sort out various legal aspects such as the registration of land

For those with the capital and the desire for cachet, an island hideaway is being built by Zaya, a United Arab Emirates developer.

Nurai, northeast of Abu Dhabi city, has 21 beachfront estates and 28 villas, costing AED25m-50m (£4.3m-£8.6m), as well as a hotel.

At the launch, guests were flown in by helicopter and entertained by Lionel Richie.

“It was a strategic decision to have our first project in Abu Dhabi.

It is well connected and plugged into the global market. It has become a magnet for the ambitious, attracting people and professionals of the highest quality from every sphere. People in the know, know Abu Dhabi,” claims Nadia Zaal, Zaya’s co-founder and chief executive.

The project, due for completion late next year, has attracted clients seeking a main home as well as holiday home and investment buyers, Zaal says.

Each estate has a private beach.

They and the villas have spa and infinity pools, rooftop gardens, staff quarters and other luxury features.

“We specialise in the high-end segment of real estate ... where demand across the world continues to outstrip supply.”

Potential buyers who are not residents of the UAE or the Gulf states can buy homes only in designated areas, of which Nurai is one. The big three governmentapproved areas for expats are Al Raha Beach, Al Reef and Al Reem Island. Buyers have already started to move in at Al Raha Beach and Al Reef.

titles. And there also needs to be clarity regarding rights as an expatriate or non-resident owner.”

Service charges could damage returns. “We don’t know what service charges are going to be yet — they’re not fixed, they are based on square footage. It hasn’t been tested yet in Abu Dhabi,” says Acworth.

The latest Mercer Cost of Living Survey ranks Abu Dhabi in 50th place globally on its list of most expensive cities, alongside Frankfurt. “It’s definitely a world-class city and projects like the Louvre, Guggenheim and Ferrari World drive interest,” says Goodson Wickes.

Mhic Chambers

Happy buyer ‘plays the long game’ Andrew Phillips moved to Abu Dhabi in 2006 to work for the government.

The next year he bought an AED1.8m (£309,000) apartment, off plan, in Sky Tower, part of the Shams project on Al Reem Island, developed by Sorouh. He is due to take possession at the end of the year.

“I like Abu Dhabi and the way it does things, and this is an iconic project,” says Phillips, who found easy access to finance. It hasn’t been plain

sailing, though. “The project was delayed for various reasons and when delays occur it’s very hard to change things. It’s been a nightmare at times,” he says. “I found that unless you, the customer, ask the questions, you don’t know what’s going on.”

Because the project is one year late, Phillips has had to restructure the financing. “It seems to be new to the banks to do this, but the penny dropped eventually.” He plans to rent

out the apartment. “I’m pretty happy playing it long. It’s like buying in Manhattan early on.” And he is excited by what is taking shape. “The Paris-Sorbonne University is opening next door, there’s a Waitrose coming, more retail, swimming pools, a canal walk — it will be one hell of a set-up.

I could have sold it and made some money but I didn’t. Abu Dhabi is basically getting it right and I’m glad that I stuck with it.”

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Healthcare drive aimed at all the people A radical change in lifestyle means the focus must be on prevention for Abu Dhabi residents. By Karen Robinson

W

ithin living memory, says Zaid Siksek, the people of Abu Dhabi had a lifestyle that involved perpetual water shortages, a lot of walking and a diet heavy on dried fish.

“Now there’s a burger outlet in every gas station,” says Siksek (and many of them vigorously market their salt-laden, high-fat products to children). “There are implications: obesity, cardiovascular problems and diabetes are very high in the UAE [United Arab Emirates]. It’s not just the burgers — nobody walks anymore. It’s less than a generation of lifestyle change and we have people suffering chronic diseases — and it’s a young population that has this high incidence of disease, which is very worrying.”

This is one of the healthcare problems at the top of Siksek’s agenda as chief executive of Abu Dhabi’s

health authority. Its role, he says, is to be strategic, to regulate and to verify standards, working with the emirate’s Health Services Company, whose job is to “deliver against these expectations”.

Siksek, 35, returned to Abu Dhabi and the health authority after gaining a degree in biomedical engineering and a master’s in healthcare administration at America’s Johns Hopkins University.

He has found there are many unique characteristics to the population he has to provide for, and the circumstances in which he has to do it.

While he says government financial backing is available “within limits” for everything he wants to do, “you have to have a strategic plan, you can’t spend 25 million dirhams on a public-health initiative and show no results”.

The authority looked at health systems all over the world before devising the plan that would give accessible healthcare to the population, by which he means the “entire

Western medical staff are still very much in demand, even though Abu Dhabi is stepping up its efforts to train

population”. To that end,the introduction of compulsory health insurance in 2007 was for all nationals and non-nationals in the emirate.

“Our system is, if you like, a combination between the UK and US models. In the UK everybody is covered

by the National Health Service. In the US, that doesn’t exist. Here, if you’re a UAE national the government buys your insurance, and subsidises anyone, national or non-national, on a low wage. That leaves [from a population of about 1.6m] a middle layer of only

around 400,000 — their employers pay for them. And among the 1m subsidised workers, many of whom are immigrant labourers, a lot don’t use it because they’re young and healthy.”

That’s one peculiarity of the population. Another is that, as Siksek

doctors as part of its healthcare drive

says, “on the whole, people don’t age in Abu Dhabi”, meaning they come to work and return to their home countries once retirement beckons (or well before that, given the global nature of the jobs market these days).

“Our population is very young, so strategies have to be different to, say, Germany, where the population pyramid is almost inverted,” Siksek says. But the new wealth of the locals and their subsequent adoption of a richer, less healthy diet and a car-centred lifestyle means that public-health education is high on the agenda. This includes food labelling, healthy school meals and a say in urban planning to provide paths, cycle tracks and parks, “encouraging people to do more — obesity in children, you can’t afford it. There will be serious costs in 30 years.”

Another key element of the thinking was that “the patient should be the centre point of any reform”.

So Siksek wanted to give physicians an incentive. “For example, with diabetes, there used to be a fee for the service. You did the treatment and presented the bill. Today, the disease-management programme requires the physician to maintain or fix your health status — they are paid for the quality of results. That’s the patient-focused, customer-service element, and it stops the overutilisation problems they have in the US. We’re defining reimbursement levels for improved outcomes.” But the system is all fairly new and “it takes time to assess this”, Siksek adds.

There are no definitive statistics either, at this stage, on the Weqaya insurance company programme, which screened UAE nationals who were given their insurance cards for symptoms and risk levels in cardiovascular problems, type 2 diabetes, obesity and cholesterol.

“In 2008 that gave us the baseline for the entire population of UAE nationals.

We had the phone numbers and addresses for everyone [of the 180,000 out of an eligible 220,000 who were tested] with a risk factor between the ages of 18 and 65.”

To ensure follow-up tests were done, the health cards were made renewable after one year — and people with risk factors went onto a database. It was found that 20% did not know they had

Imperial College London’s lavishly equipped diabetes centre is a vital part of the emirate’s health network

diabetes. The Weqaya exercise is, Siksek says, “something that has never been done in the world before”.

The joined-up administration of Abu Dhabi, where all agencies sponsored by government can be called on to work together towards one aim — like the city planners and the schools or the e-government project that collates personal data — suggests a more friction-free ride towards the health

‘ON THE WHOLE, PEOPLE DON’T AGE IN ABU DHABI – THEY WORK HERE AND THEN THEY RETIRE TO THEIR HOME COUNTRIES’ Zaid Siksek, chief executive of Health Authority Abu Dhabi

outcomes Siksek wants than he would experience in many other countries.

But he still needs to call on overseas expertise to provide the services. “In the area of public health, there are combined teams of locals and people from abroad — British, American, Swiss — and UAE nationals are training under them. We don’t have enough physicians in our population and depend very heavily on a foreign

workforce to deliver healthcare. In the past, they were individuals who would come and go, so we realised that we should give the job to institutions to manage facilities for the health service.”

So for three years London’s Imperial College has been running the diabetes centre, while earlier this month the Tawam Molecular Imaging Centre was officially opened. This is a facility for the detection and monitoring of cancer and heart disease with advanced diagnostic imaging systems.

Designed by Siemens Healthcare and built by the medical arm of the government-owned conglomerate Mubadala, the centre will be run in partnership with Johns Hopkins University.

“Suchinstitutionscanattract internationalphysicianswhowantto bepartoftheorganisation,”saysSiksek.

However, the international outlook does not extend to turning Abu Dhabi and its health facilities into a destination for medical tourism, as has happened in some emerging countries.

“In the near future I don’t see that being an option,” he says. “Before we open up to others , our responsibility is to deliver to our own residents.”

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Insurance is ripe for growth There are 59 insurance companies in the UAE, about half of them branches of multinationals.

“That’s a lot, given that at 7% the UAE insurance market penetration is very low,” says Walid Sidani, chief executive of the Abu Dhabi National Insurance Company (ADNIC), which was established by the government just one year after the inception of the UAE in 1971.

But, Sidani emphasises, “it’s a market with a lot of growth.”

ADNIC has 430 staff and annual turnover of about $450m (£283m).

The insurance industry was given a significant boost by the Abu Dhabi government’s ruling in 2007 that employers had to provide medical insurance for their non-local staff, and there are moves to spread this regulation across the UAE by 2011. Citizens of the emirate are covered automatically, but about 85% of those who live and work there are from overseas.

“This gives more stability to our earnings,” says Sidani, 43, a Lebanese American who has been with the company for a year.

“Another economic slowdown would not have a whole segment of society stopping its [compulsory] medical insurance.”

But while consumer products, including life and car insurance, are growth areas, Sidani says the local industry has not reached the stage where it is trying to hook customers with irritatingly catchy advertising – meerkats, opera singers and the rest.

“Insurance is not the most action-packed environment, and you don’t want it to be,” he counsels soberly.

Action-packed or not, ADNIC is making plans to launch a jointventure Islamic insurance brand next year. Takaful, a system based on sharia values, “is a growing sector in the Middle East and generally, and offers an alternative solution for risk-protection needs without sacrificing Islamic principles. And it’s not just for Muslims,” says Sidani.

He likens it in some respects to mutuality in western banking, and says that it would not insure certain ventures such as gambling businesses, pubs or cigarette manufacturers.

ADNIC has also established a joint venture with London-based Talbot Underwriting, called Underwriting Risk Services Middle East, which has a licence to operate from the Dubai International Financial Centre.

“This links into the Lloyd’s of London underwriting market and brings greater capacity to the region,” Sidani explains.

The numbers on some of the projects ADNIC is involved with are mindboggling: the equivalent of $30billion is expected to be invested in the energy industry next year and these ventures, in solar, wind and nuclear as well as the traditional oil-and-gas sector, must have insurance.

It is a market eager to welcome newcomers. To take advantage of what Abu Dhabi has to offer, “we need products and reinsurance partners”, says Sidani.

Karen Robinson

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Foreign colleges fuel innovation in local education

T

he emirate’s drive to become a hub for business studies took a concrete step forward this month with the launch of the Global Executive MBA at the Abu Dhabi campus of Insead, the international business school.

“Managers must learn to cope with global competitors, customers and influence, and because Abu Dhabi attracts talent from all over the world and many top firms, it is a place that can attract the best students,” said Professor Philip Anderson, Insead’s professor of entrepreneurship and academic co-director.

“The Middle East has always been where different people and ideas meet to form new combinations, making Abu Dhabi a place where executive MBAs can develop into broader, more cosmopolitan people.”

Anderson recognises there are limitations as Abu Dhabi is still less known internationally than many of its rivals. “It will take time before Abu Dhabi develops into a global educational hub such as Boston or Singapore ,” he says. “However, it is already widely admired for the scale of its ambitions. Few countries would attempt projects such as Masdar City, the Advanced Technology Investment Company or the Emirates Nuclear Energy Corporation.”

Insead is one of the first international higher-education providers to commit to Abu Dhabi. Its Global Executive MBA is designed for experienced managers who can continue to work while studying. The launch came a month after New York University Abu Dhabi began offering courses at its new campus.

In its drive to raise the country’s academic profile, the Abu Dhabi Education Council (ADEC) has identified four main issues: lifting the quality of higher education to internationally recognised levels; aligning higher education with the emirate’s social, cultural and economic needs; investing in research for an innovation-based economy; and providing all qualified students with affordable access to higher education.

Encouraging Emiratis to embrace the new educational opportunities is a significant challenge since up to 25% of local students drop out of public schools after their second year.

Mugheer Khamis al-Khaili, the director-general of ADEC, recently launched the New School Model, covering everything from facilities to parental involvement. It promises increased emphasis on technology and bilingual teaching methods, with effective assessment tools. Inspection teams were recently sent out by ADEC to check standards at private schools.

“We recognise that we have a long way to go in a short time if we want Abu Dhabi to take its place as a leader on the world stage and if we want our citizens and residents to have the necessary skills to compete,” said Khaili. “As educational development progresses, we will learn to embrace new ideas and develop new skills.”

Another imported institution, Brighton College Abu Dhabi, due to open in September 2011, will be looking to repeat its success in teaching children aged 3 to 18. It delivered the best A-level results of any co-ed school in England last year.

Robin Lyndhurst

Global power: Insead is teaching executives from around the world

Portrait of a

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new cultural capital

How the Louvre Abu Dhabi will look when finished in 2013

The world’s most famous galleries have signed up to Abu Dhabi’s $27 billion artistic vision, reports Claire Malcolm

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ffshoots of two of the world’s most compelling and important museums and galleries, the Louvre and the Guggenheim, housed in impressive modern buildings, are at the centre of Abu Dhabi’s plans for a monumental cultural district.

The $27 billion Saadiyat Island project is more ambitious than any other in the world, bringing together the artistic legacy of millenniums under a series of striking 21st-century roofs.

The project is not without controversy. Critics accuse the emirate of buying in culture rather than exploring its own artistic legacy. But as part of the government’s economic plan, tourism is earmarked for growth and Saadiyat Island is already under pressure to deliver, even though its first museum opening is two years away.

Commenting before next month’s second annual Abu Dhabi Art Fair, Sheikh Sultan bin Tahnoon al-Nahyan, chairman of the Tourism Development and Investment Company (TDIC) and Abu Dhabi Authority for Culture and Heritage, said: “The cultural map is evolving, and today Abu Dhabi and the UAE are at the crossroads of these cultural and artistic intersections.”

But is there enough interest to put Abu Dhabi on the global art map? The roster of proposed museums certainly whets the appetite, not least for its A-list architects. Frank Gehry

will bring his signature angular style to the 450,000 sq ft Guggenheim Abu Dhabi, while France’s Jean Nouvel is behind the mushroom-like dome for the emirate’s branch of the Louvre.

Norman Foster pipped his peers to the post for the Zayed National Museum, with the design due to be unveiled shortly; and fellow Brit Zaha Hadid is responsible for the Performing Arts Centre. Japan’s Tadao Ando designed the Maritime Museum.

Gehry, who originally turned down the Abu Dhabi project, has caused a minor furore with his disparaging comments on the value of sustainable design ranking systems, such as the US-based Leadership in Energy and Environmental Design programme, which he called bogus. He later clarified his views in an interview with Business Week, saying that what he disliked was the “fetishisation” of sustainable design and the whole greenwashing movement with its dubious PR motives.

As Abu Dhabi has loudly proclaimed its investment in and commitment to the green agenda, with the launch of its Estidama (sustainability) guidelines, Gehry’s Guggenheim is expected to offer more than a token green gesture.

How this will affect construction costs remains unclear, however, as TDIC isn’t revealing figures for the individual projects. Media reports vary wildly from $1 billion to $4 billion. Rita Aoun-Abdo, director of TDIC’s cultural

Guggenheim will also allow for space to show locally based artists.”

One of the most frequently asked questions is that of censorship. TDIC broached the subject last May, with a Picasso retrospective of 183 works, including nudes. The exhibition was well received, Aoun-Abdo says. “There are no restrictions in the museums’ agreements on the nature of the work that can be shown. It will be the responsibility of the museums’ curators and experts to address any cultural sensitivity that may arise in relation to any of the works. We should remember that these museums are based on the principle of a dialogue of culture rather than a culture shock,” she says.

Zayed National Museum

Opening: 2013. Architect: Norman Foster. The home of the UAE’s heritage exploring the story of the late ruler Sheikh Zayed to the present day.

Louvre Abu Dhabi

Andy Warhol’s ‘Flowers’ is part of the

exhibition of work owned by Larry Gagosian on show in Abu Dhabi. The Maritime Museum, right, designed by Tadao Ando, is due to open in 2018

Opening: 2013. Architect: Jean Nouvel.

Paintings, drawings, sculptures, manuscripts and archaeological finds, all under a transparent dome.

Guggenheim Abu Dhabi

department, is equally reserved when commenting on the finer points of Abu Dhabi’s financial partnership with the Louvre and Guggenheim brands. There was outrage in France when Abu Dhabi signed the Louvre deal, with protesters envisaging a bubble-wrapped Mona Lisa being carted off to the desert.

But, as Aoun-Abdo explains, it is all about long-term cultural exchange rather than a Pink Panther-esque heist.

France benefited to the tune of $1.3bn, most of which secured rights to the

name and services for 30 years, with $247m allocated for some 300 artworks lent by esteemed French museums (Mona Lisa not included).

Julia Ibbini, the founder of Abu Dhabi-based art collective Fanaan, laughs off suggestions that the emirate is paying to import culture. “I think people can be too cynical about these things, as there are clearly easier and more commercially driven approaches that could highlight a destination other than using art and culture.”

She cites the exhibition of works from US collector Larry Gagosian at the Manarat Al Saadiyat gallery, which runs until January 24. “I felt incredibly privileged to be able to go and see some of his collection, Ibbini said. “Having grown up here, I’ve seen how far Abu Dhabi has come from a little desert town to what it is today, and in the last couple of years residents and visitors had the opportunity to experience artists as varied as Picasso, Cy Twombly, Richard Serra and Andy Warhol. Abu Dhabi is

offering vast new opportunities for art from the region to be shown on an international stage. The three museums of the Cultural District will be part of a holistic programme of arts that have been in effervescence for the last years in Abu Dhabi.”

TDIC forecasts that the 270-hectare cultural district will attract 1.5m visitors a year upon completion in 2018.

Up-and-coming artists from across the Middle East will also have the opportunity to show their works, says

Aoun-Abdo. “These museums will be transnational and universal.”

Julia Ibbini is encouraged. “What is increasingly clear is that momentum towards the development of an arts scene has been building over the past few years and, while opportunities for locally based artists are still limited, I believe it is just a matter of time before more projects and events become a regular feature in the capital. I am very hopeful that the planned cultural district surrounding the Louvre and

Opening: 2014. Architect: Frank Gehry.

Emphasis on Arabian, Islamic and other Middle Eastern art. It will also feature a centre for art and technology.

Performing Arts Centre

Opening: 2018. Architect: Zaha Hadid.

Will host performances of classical and modern music, opera and theatre.

Maritime Museum

Opening: 2018. Architect: Tadao Ando.

Aims to celebrate the rich maritime heritage of the Arabian Gulf.

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Designed to lure the upmarket traveller

Cars, stars and plenty of bazaars

Karen Robinson visits two resorts and finds they offer very different versions of luxury

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Will Ferrari World give tourism a fuel injection, asks Claire Malcolm

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s it a magnet for boys who love their toys or will it appeal to a broader audience? That is the question Ferrari World Abu Dhabi will soon have to answer. The inaugural 2009 Etihad Airways Abu Dhabi Grand Prix propelled the emirate and Yas Island onto the world entertainment stage but no city can stage two Formula One races a year.

Ferrari World, which opens next week, is intended to give the island year-round appeal.

It is billed as the globe’s biggest indoor theme park, the first branded leisure destination for the Italian car maker. As part of the $40 billion Yas Island offering, Ferrari World is being launched by government-backed developer Aldar Properties and managed by Farah Leisure Parks Management, its joint venture offshoot with US-based ProFun Management.

Aldar is tight-lipped on the financials and projected visitor numbers, though the advent of the United Arab Emirates’ first amusement park not based around water is revving up interest in Abu Dhabi.

The global theme park industry has been through a tough time. According to a mid-2009 report by California-based market research firm IBISWorld, revenues across North America’s 600 theme parks dropped by 3.6% and Euro Disney reported a 7% decrease in 2009 revenues and a shift in its geographical customer base. It’s not all a house of horrors, though: IBISWorld forecast a cautious 1.7% revenue increase for

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North American parks this year as travel patterns resume, buoyed by special offers.

In a region where indoor entertainment is a summer refuge, what lies beneath Ferrari World’s 200,000 sq metre, logo-emblazoned roof has the potential to contribute to a more rounded tourism offering for the emirate. “The opening of Ferrari World Abu Dhabi will revolutionise the way visitors and people in the region spend their leisure time,” says Mohammed al-Mubarak, chairman of Farah Leisure Parks Management.

Claus Frimand, general manager of Ferrari World and chief executive of Farah, is an industry veteran whose six-year tenure at Disneyland Paris spanned development and hands-on operation. “We are confident that Ferrari World Abu Dhabi will not only meet a significant entertainment and leisure need for fans and families in the region but will also add to Abu Dhabi’s substantial attributes as a world-class tourist destination,” he says.

“The Ferrari prancing horse is one of the world’s most iconic and recognisable symbols. The power of the

Ferrari brand can’t be underestimated as a major incentive for people visiting this park — it transcends cultural, geographical and language barriers.”

Frimand refuses to be drawn on visitor forecasts, saying: “We prefer not to speculate on visitor numbers before the park is open, but we expect that it will be especially popular with families seeking an alternative leisure option in the summer.”

The pricing structure for Ferrari World is competitive, with day passes ranging from AED165 (£28.30) to AED225 (£38.50) as well as a VIP ticket option (no Ferrari included). “The park also houses two unique retail outlets, the first of which is the world’s largest Ferrari Store — at just over 1,500 square metres,” says Frimand.

“We will also have a ‘Red Glove’ service, where a professional shopping consultant selects the right souvenirs to fit tastes and budget. In addition, there are a variety of convenient collection and delivery options; purchases can be picked up at the exit point, delivered to the Yas Hotel or shipped anywhere in the world.”

As the new entertainment kid on

Ferrari World’s 200,000 sq metre roof, under which you can ride the world’s

the block, Ferrari World is a boon for the emirate’s rapidly developing tourist industry, but whether it can succeed as a stand-alone attraction or will simply slot into the Abu Dhabi experience remains to be seen. Whether you’re a petrol head, adrenaline junkie or brand devotee, there is a definite air of Disney-style magic around the impending launch, which Frimand is feeling, too. “Each and every attraction tells a piece of the legendary Ferrari story, the passion, history and technical innovation — which has

never been done before,” he says. Yas Island is pegged for two other theme parks projects, the Yas Island Water Park and a Warner Bros amusement park. The 16.4-hectare water park will have more than 40 rides and attractions including four one-of-akind rides. Aldar has already been given conceptual planning approval by UPC and UK-based Atkins has been appointed as lead designer for the project. The water park is scheduled for delivery in 2012.

Aldar has also announced its

fastest rollercoaster, above left

commitment to ensuring that this facility is one of the world’s most environmentally friendly and sustainable water parks and is looking at drastic reductions in energy and water consumption .

Groundbreaking for the stalled Warner Bros theme park and hotel was initially scheduled for last year but, according to Aldar, the project is currently still at the planning stage, with no firm development schedule.

Abu Dhabi Grand Prix

With 50,000 spectators and race participants expected at this year’s Abu Dhabi Grand Prix, to be held from November 12-14, the Yas Marina circuit is gearing up for race day.

Entertainment includes Kanye West, Linkin Park and Prince.

Ticket sales for the Grand Prix weekend have already roared past the 90% mark and many hotels are fully booked.

The circuit is also trying to attract visitors outside of Grand Prix time with a host of on-track driver and passenger experiences, as well as more sedate venue tours and the opening of a karting track next month.

n the world of hotels, the luxury brands are turning to Abu Dhabi.

The Rocco Forte Collection is expanding into the Middle East with the imminent opening of its establishment in the emirate. The 281-room city hotel has a curved glass exterior and its Sky Bar promises sweeping views over the city and coastline.

For the kind of well-heeled tourist Abu Dhabi hopes to attract, Forte will have to compete with a clutch of other five-star hotel brands in the city, including two Sheratons, a beachside Intercontinental and a Shangri La. But the grande dame of the hotel scene is indisputably the Emirates Palace.

F Scott Fitzgerald once wrote of a fashionable establishment on the French Riviera: “On the pleasant shore . . . stands a large, proud, rose-colored hotel. Deferential palms cool its flushed façade, and before it stretches a . . . dazzling beach.” But, impressed though he was by riches and splendour, quite what words the American novelist would have found to describe this massive dusty pink palace one can only speculate. It has been a city landmark since its opening in 2005 for its sheer bulk as much as for its prominent position in 100 hectares of manicured grounds edged by its 1.3km beach (deferential palms somewhatç dwarfed by the massive façade).

With its 114 domes, 102 lifts, marble from 13 countries, 394 suites and rooms (the smallest is 55 square metres) and a ballroom that can take 2,400 people, a stay in the Emirates Palace can feel like being trapped in a giant honeycomb — muted golden shades play a big part in the decor. In one quest to find my room I wandered past several grand pianos, a bank, an arcade of upmarket shops, a vending machine that dispenses pieces of gold, a traditional Japanese tea house and a museum-size collection of antiquities in glass cases.

A kindly member of staff took pity and sneaked me through a service area to send me in the right direction.

There can be a tendency for such huge hotels, however expensively done up and expensive to stay in — and Emirates Palace is not cheap — to lose any pretensions to elegance with the jumbo proportions (I’m thinking Vegas, and, ahem, a certain establishment down the road in Dubai). But Emirates Palace, owned by the Abu Dhabi government and run by Kempinski, manages to stay classy despite its size. This could be because the staff are well trained and attentive — which is not a given in this part of the world — or because of the way one

The spectacular Desert Islands Resort and Spa is a comfortably relaxed destination on Sir Bani Yas Island

Deferential palms stand proud in the grounds of the Emirates Palace

of the latest additions to its roster of restaurants attracts a hip and happening crowd of fashionably dressed young business people and entrepreneurs, which generates a buzz rarely found in a hotel dining room.

The first Hakkasan franchise outside London serves its brand of delicious modern Chinese food (though, respecting local customs, without any pork dishes) in a characteristically gloomily lit restaurant, while the mixologists behind the 15-metre long bar serve up zinging cocktails.

There is a “quiet pool” at one end of the hotel’s kilometre-long façade, with a wet’n’wild extravaganza with flumes and curly slides at the other. Between them, guests can lounge on a white sand beach raked with almost Zen precision before dipping a toe into the disconcertingly warm water.

A quick boat ride across the Gulf,

after a two-hour drive from the city, brings you to Sir Bani Yas Island. Once an 87 sq km desert with a tiny palm oasis, it was transformed when the late Sheikh Zayed Bin Sultan al-Nahyan turned it into a nature reserve. Water is piped in from the mainland to irrigate the 250,000 trees that now provide a habitat for a diverse selection of animals in the 4,100-hectare Arabian Wildlife Park.

A daybreak trip round the reserve in the company of one of the friendly and well-informed guides — many of whom are from South Africa — yields plenty to see (guaranteed, unlike African safaris, because the animals cluster patiently round the troughs at feeding time).

Little creamy sand gazelles trot along their territorial paths and the darker mountain gazelles graze on trees on their hind legs. There are big shaggy

barbary sheep with backward curving horns, from central Africa. Also from Africa is a herd of eland, the world’s biggest antelope (the males can weigh up to 1,000kg) and from India the black buck, with its candy twist horns. There are cheetahs, too, and hyenas to scavenge what the cheetahs leave, but the triumph of the reserve is the breeding herd of more than 300 Arabian oryx, the characteristic desert antelope that was nearing extinction.

Meanwhile, in another part of the island near the royal palaces (two: one for men and one for women) is the giraffe enclosure. The sheikh took a fancy to the creatures and the herd he established now numbers about 40.

The Desert Islands Resort and Spa, a comfortably relaxed hotel, is the island’s sole guest accommodation for now (more is being built). Big rooms, a pool, a beach with plenty of shaded loungers, thoughtfully prepared food in a la carte or buffet form, an Anantara spa and a children’s club all add up to a deeply peaceful time.

The short, animal-filled wildlife drive is just one of the factors that makes Sir Bani Yas a good choice for families. Other exciting but safe activities include mountain biking, kayaking among the mangroves on the east side of the island (imported, like the trees) and snorkelling. n ITC Classics (01244 355 527; itcclassics. co.uk) has five nights at Emirates Palace, from £1,350 per person including breakfast, economy flights with Etihad from London Heathrow and private transfers.

Luxury Holidays Direct (020 8774 7299 or luxuryholidaysdirect.com) has seven nights at Anantara Desert Islands Resort from £885 per person with breakfast, private transfers and return Etihad flights from London.

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How to be part of the in-crowd

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Newcomers need to focus on building personal relationships and not keep a close eye on time, says James Brennan

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he crucial thing to remember when doing business in the Gulf is the importance of personal relationships, says Julian Snell of the British Business Group, a networking organisation that helps newcomers establish themselves in Abu Dhabi. This is, after all, a place where most of the significant firms are family owned.

With five years’ experience as a human resources director in Abu Dhabi, Snell has dispensed plenty of advice to fellow expatriates about business etiquette. He says the fact that long-term personal relationships are considered more important than the speed at which deals are done often comes as a surprise to newcomers.

“We advise people that they have to show a commitment here. Just jumping in and out of aircraft, spending a few days here, going back to the UK and thinking it’s all okay simply doesn’t work. It’s little things, like making sure you have a business card that has a local PO box and telephone number to show the commitment that you are serious about operating here,” says Snell.

Understanding the basics of working and living in an Islamic country is essential. The working week is conducted from Sunday to Thursday and there are prayers five times a day.

Boozy business lunches are obviously frowned upon and modest dress is expected. Snell adds: “From an Islamic point of view, the role of women in life and in business is slightly different from ours, but there will be very few restrictions on British women who are coming out here and doing business.”

If you’re looking to start a business

in Abu Dhabi, your first port of call should be the British embassy. For a small fee, its Overseas Market Introduction Service offers access to contacts, information and business intelligence across the board, from government ministries to potential joint-venture partners.

Foreign businesses are legally required to have an Emirati sponsor, and finding the right match can be tricky, says the embassy’s director of trade and investment, Frances Moffett-Kouadio. “You have to look at it like a marriage: some are happy and long lasting while some are a bit bumpy along the way. We don’t recommend particular sponsors, because each company is different, but we can certainly suggest people that could be suitable.”

With a tax-free salary and a high standard of living, a job in Abu Dhabi is an attractive prospect for many.

Moffett-Kouadio says there are good opportunities in the booming education sector. “Education and training is an area where UK firms are doing well, from inspection services to building sustainable schools.”

Finding an employer with a good reputation is important and Phil Anderton, former chief executive of Heart of Midlothian FC and the Scottish Rugby Union, found an excellent one in Sheikh Mansour bin Zayed al-Nahyan — a member of the Abu Dhabi ruling family and owner of the Premier League football club Manchester City.

Anderton is now chief executive of the sheikh’s football team in Abu Dhabi, Al Jazira, with a remit to boost revenue and to increase attendances at the 40,000-capacity Mohammed bin Zayed stadium.

Expats are advised to adjust to the local pace of life

He arrived in Abu Dhabi nine months ago and has just experienced his first long, hot summer and holy month of Ramadan. “Mobile phones are always on, so business takes place despite the physical barriers that come up,” says Anderton.

“A lot of people meet in the majlis of residences, which is like a formal lounge. You arrive in the evening and meet people all through the night, especially during Ramadan. That’s when a lot of business and information is passed and conducted.”

The learning curve can be steep, even for high-flyers such as Anderton.

“I’ve made a whole host of mistakes, but nothing that I’m aware of so far that has been too bad. You learn by

doing, and making the odd mistake here and there.”

There’s one other thing the beginner needs to remember: “British people are too punctual,” claims Mohamed Kanoo of the Kanoo Group, a conglomerate with interests including shipping, travel and oil. In the UK, being late for a business appointment could be considered a crime, but in the UAE it’s almost expected of you.

“There’s a saying in Arabic that if somebody is always on time, he keeps British time, but he doesn’t keep local time,” says Kanoo. “Things take their own sweet time here and people under pressure to achieve sales or to get things moving have to take a very large grain of salt with that.”

Vital resources British Embassy www.ukinuae.fco.gov.uk British Business Group www.britishbusiness.org Chamber of Commerce & Industry: www.abudhabichamber.ae Do They Know It’s Friday?

Cross-Cultural Considerations for Business and Life in the Gulf, by Jeremy Williams (Motivate Publishing) Time Out Abu Dhabi — Setting Up Guide (ITP Publishing)

Mhic Chambers

Jones the Grocer sets up shop in the Gulf Yunib Siddiqui opened Jones the Grocer in Abu Dhabi just over a year ago. The London School of Economics graduate had spent time in the UAE prior to launching his delicatessen and cafe there, but still had plenty to learn about its business culture.

“Coming on holiday and doing business are two different things,” says Siddiqui, 41, left. “I wouldn’t say I knew a great deal, by any stretch of the imagination.”

One of the first things he had to adjust to was the pace of business.

“The things you’d expect to do in a day in London can take two days or even a week here. And it’s not always clear whom you need to approach.

That provides an element of uncertainty which makes doing business challenging.”

Finding a suitable Emirati sponsor was also far from straightforward.

“It’s a bit like a beauty pageant. You kind of line them up and hope for the best. I had a sponsor, a big name, and things didn’t work too well. My advice is to find somebody you know really

well, or a corporate sponsor such as a law firm or corporation.”

With the right sponsor finally on board, Jones the Grocer has been a success, with new stores set to open in Abu Dhabi and Dubai.

But Siddiqui will never forget the most valuable advice he got about doing business in Abu Dhabi. “Be very patient,” he says. “You come here and apply working practices that you’re very used to, but you quickly realise that doing these things doesn’t always work in your favour.”

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