Global economy will stick to 6% growth this year, says IMF in new outlook
Banking|: Dubai: The International Monetary Fund (IMF) retained its global growth forecast at 6 per cent for 2021 in its latest Global Economic Outlook update. The Washington-based organisation said prospects have diverged further across countries since its April’s forecasts. Vaccine access is emerging as the principal fault-line along which global recovery splits into two blocs: those that can look forward to further normalization of activity later this year (almost all advanced economies) and those that will still face resurgent infections and rising COVID-19 death tolls. Universal recovery not assured The institution has warned that recovery is not assured even in countries where infections are currently very low so long as the virus circulates elsewhere. “While more widespread vaccine access could improve the outlook, risks on balance are tilted to the downside,” said Gita Gopinath, Economic Counsellor and Director of the Research Department at IMF. “The emergence of highly infectious virus variants could derail the recovery and wipe out $4.5 trillion cumulatively from global GDP by 2025.” While the latest 2021 global forecast is unchanged from the April 2021 estimates, there have been some offsetting revisions. Prospects for emerging market and developing economies have been marked down for 2021, especially for Emerging Asia. By contrast, the forecast for advanced economies is revised upwards. These reflect pandemic developments and changes in policy support. The 0.5 percentage point upgrade for 2022 derives largely from the forecast upgrade for advanced economies, particularly the US, reflecting the anticipated legislation of additional fiscal support in the second-half of 2021 and improved health metrics more broadly across the group. Regional prospects The Middle East and North Africa region growth is forecast at 4.1 per cent for 2021 and 3.7 per cent for 2022, respectively. Saudi Arabia, the largest economy in the region, is projected to grow 2.4 per cent in 2021 and 4.8 per cent in 2022. The April REO had forecast the UAE and Saudi Arabia to grow 3.1 per cent and 2.9 per cent in 2021, respectively. Revised projections for the UAE’s growth outlook was not available in the IMF report. Higher oil prices and early vaccine rollouts support the outlook for many GCC economies. The recent increase in oil prices will boost confidence, supporting non-oil GDP, which is projected to expand by 3.3 per cent in 2021. With improved oil prices, fiscal conditions of GCC countries are projected to improve this year and the next. The overall fiscal deficits of MENA region are projected to shrink from 9.7 per cent in 2020 to 5.7 per cent in 2021. In Saudi Arabia, the fiscal deficits are projected to decline from 11.3 per cent of GDP last year to 3.5 per cent this year. Inflation outlook The IMF said recent price pressures for the most part reflect unusual pandemic-related developments and transitory supply-demand mismatches. Inflation is expected to return to its pre-pandemic range in most countries in 2022 once these disturbances work their way through prices - and yet uncertainty remains high. Commodity prices are expected to increase at a significantly faster pace than assumed in the April 2021 WEO. Amid the strengthening global recovery, oil prices could rise close to 60 per cent above their low base in 2020. Non-oil commodity prices are set to rise close to 30 per cent above 2020 levels, reflecting particularly strong increases in the price of metals and food. Elevated inflation is also expected in some emerging market and developing economies, related in part to high food prices. Central banks should generally look through transitory inflation pressures and avoid tightening until there is more clarity on underlying price dynamics, the IMF said. Clear communication from central banks on the outlook for monetary policy will be key to shaping inflation expectations and safeguarding against premature tightening of financial conditions. “Central banks should avoid prematurely tightening policies when faced with transitory inflation pressures, but should be prepared to move quickly if inflation expectations show signs of de-anchoring,” said Gopinath. Policy easing must continue The IMF said fiscal policy should continue to prioritise health spending, including on vaccine production and distribution infrastructure, personnel, and public health campaigns to boost take-up. Fiscal policy space to accomplish this varies across countries. On monetary policy, the IMF called on central banks to generally look through transitory inflation pressures and avoid tightening until there is more clarity on underlying price dynamics. There is a risk that transitory pressures could become persistent and central banks may have to take pre-emptive action. Financial sector policies, the IMF said, have to execute a difficult balancing act to avoid a sudden increase in bankruptcies by unwinding support too soon. But these should refrain from extending the life of low productivity “zombie” firms if support is maintained for too long. The extraordinary measures from 2020 (including credit guarantees, debt moratoriums, relaxed classification and provisioning guidelines on delinquent loans) should increasingly become more targeted.
Dubai’s Emirates ranks among world’s Top 5 airlines for 2021
Aviation|: Dubai: Emirates airline has been named among the world’s Top 5 airlines in terms of air safety, according to AirlineRatings. The website has announced its 20 top airlines in the world for 2021, with Qatar Airways, Air New Zealand, Singapore Airlines, Qantas and Emirate making the Top 5. The others were Cathay Pacific, Virgin Atlantic, United Airlines, EVA Air, British Airways, Lufthansa, ANA, Finnair, Japan AirLines, KLM, Hawaiian Airlines, Alaska Airlines, Virgin Australia, Delta Air Lines, and Etihad Airways. Emirates, which climbed to fifth spot, recently introduced a premium economy class, which is being hailed as one of the best in the industry, noted AirlineRatings. Qatar Airways was ranked number 1 because of its cabin innovation, passenger service, and its dedication and commitment to continue to operate throughout the pandemic. Emirates, which was the first airline to offer free COVID-19 medical cover, expanded its multi-risk travel insurance coverage last year. The travel insurance package - in tandem with AIG - was the first of its kind in the airline industry, and is “designed to provide all Emirates passengers a truly unique offer for stress-free and hassle-free travel,” according to the airline.
UAE's RAKBank has its best quarter since COVID-19 struck, with net profit of Dh192m for Q2-21
Banking|: Dubai: In line with other leading UAE banks, RAKBank delivered a strong run in the second quarter, with net profit at Dh192.1 million and a 25.4 per cent increase on last year. For the first six months, the Ras Al Khaimah headquartered bank had total income at Dh1.6 billion. “This is a crucial turning point for us as we see growth in our loan book and customer deposit, and that is a very positive sign,” said Peter England, CEO. “Additionally, our provisions for this quarter are the lowest they have been for many years as we see the re-balancing of our portfolio, which we have undertaken over the years, bear very positive results. “It also demonstrates the significant rebound in the UAE economy and a strong return of consumer confidence that we have witnessed during the first half of this year.” As of June 30, total assets were Dh54.3 billion, up by 2.9 per cent year-to-date and an increase of 2 per cent compared to the first quarter of 2021. The numbers show the bank putting some distance between the disruptions of 2020, when the outbreak of the pandemic injected multiple uncertainties for the sector and the wider economy. “We have seen total income commence growth again after a number of quarters of decline since the beginning of the pandemic,” the CEO added. A decline Total income for the first-half of 2021 dropped by 14.2 per cent to Dh1.632 billion. “This is mainly due to a decrease in net interest income and net income from Islamic products by Dh287.9 million, that was partially offset by an increase of Dh16.7 million in non-interest income,” the bank said in a statement. “Non-interest income increased 3.1 per cent to Dh557.9 million because of the year-on-year increase of Dh20.0 million in net fees and commission income and Dh28million in investment income.” But the forex and derivative income declined Dh23.1 million as well as a Dh10 million drop in gross insurance underwriting profit.
Those black-and-white QR codes are becoming part of consumer experience – but at a cost
Middle East construction trade show Big 5 makes in-person return to Dubai
Business|: Dubai: The region’s most prominent construction industry event, the Big 5, is all set to return to the Dubai World Trade Centre (DWTC) from the September 12 to 15. It will be the only live in-person event to connect the global construction industry this year and will play a crucial role in driving economic recovery in the post-COVID-19 era. The event has so far confirmed more than 1,000 exhibitors from 45 countries and with 20 national pavilions. There will also be online networking and meeting facilitations as add-ons, which will help organisations kick-start their businesses irrespective of their location. In a recent report released by MEED Projects, there were a $163 billion worth of contracts awarded in 2020 in the Middle East and Africa despite COVID-19. And $1.9 billion worth of projects are currently in execution stages in the region. “With $5.06 trillion worth of projects planned across all sectors in the Middle East and Africa construction market, it is more important than ever to offer a safe environment for the regional and international community to come together where they can boost business activities and discuss vital lessons learnt all in one place,” said Josine Heijmans, Vice-President at dmg events, the event organizer. The Big 5 will welcome exhibitors across nine specialised events this year. High-level events this year include the Global Construction Leaders’ Summit, the Future of Facades Summit, and the FutureTech Construction Summit, all designed to shed light on crucial developments in the construction sector. The popular free and CPD-certified talks series will continue at the event, with 70 sessions set to cover vital industry topics.
Dubai Free Zones all set to speed up startup accelerator initiatives
Markets|: Dubai: The Dubai Free Zones Council (DFZ Council) aims to put its collective weight behind fast-tracking startup development. The ‘business accelerator initiative’ will coordinate meetings with relevant entities, companies and investors, to evaluate challenges and propose solutions that can support a diversified economy. The ‘promising startups platform initiative’ aims to attract newly formed business to Dubai, especially those developing sustainable economy concepts. Sheikh Ahmed bin Saeed Al Maktoum, Chairman of Dubai Free Zones Council, lauded the role of Dubai’s free zones in creating a new trade corridor with global markets and attracting foreign direct investments during uncertain times. DFZ registered Dh135 billion in foreign trade in Q1-2021, which is around 38 per cent of Dubai’s total foreign trade. Positive list The UAE Cabinet recently allowed 100 per cent ownership for foreign owned businesses across sector, and that too will accelerate the turnaround for the economy. “The decision coincides with Dubai’s preparations to host Expo 2020, as it will have a strong positive impact on attracting foreign direct investment,” said Sheikh Ahmed. “Our economy presents a real example in boosting the global business community’s confidence to invest due to its flexible and secure environment, the advanced and world-class infrastructure, and high quality of life that allows global talents and investors to consider it home.” Unified records During the meeting, DFZ council members also reviewed the development of a unified record to integrate open data in offering government services. They also reviewed an initiative to link free zone employees with the unified registry of Dubai government employees, which was recently created to be the sole official source of such information.
Food security is built around trade these days and not actual production
Analysis|: Food security is not about food production only. As a concept and as a national security matter, it has become more globalised and will continue to be so. A few multinational companies that control most food trade played, and continue to play, an imperative role in processing and moving food commodities from one region to another. That, and other factors such as food aid and trade deals inclusive of agriculture, have turned food commodities that they focused on into strategic staples in regions and countries where they were not originally. To illustrate, Mexico had the production and price of maize under control before the North American Free Trade Agreement (NAFTA) was signed, resulting in a flood of cheaper to produce maize from elsewhere. Farmers lost their livelihoods, and the price of maize became trade-controlled and influenced. The same happened in the Middle East and North African (MENA) region, when wheat was either cheaply imported or provided as food aid that was sometimes part of a larger aid package to countries. Consequently, the region lost its production comparative advantage, wherever and whenever it had one, and the region’s diet became increasingly ‘wheatified’. The price of wheat then became a prominent factor in the region’s troubles and a trigger to many of its protests, like in 2011, with diminishing domestic production to flatten price fluctuations. Another example here is from the UAE. My grandmother used to be the family holder of a subsidy card to purchase rice when she was a child in the 20th century. Rice is not a food commodity that can be naturally and cheaply produced in the UAE. Rice was, and still is, imported from nearby regions that possess comparative advantage to produce it. The whole process seemed manageable at the time. However, growth in the UAE’s population, in a tremendously globalised food security environment, heightened the need to import various food commodities for a diverse population. Truly beyond borders Given that there are limitations on what can be domestically produced at reasonable costs, such a diverse population can never be fed from the country’s own food production. What resulted from these and other examples throughout history is a globalised food security that is driven more and more by food trade, not food production. Saying so does not dismiss food production altogether. Rather, it explains how food security has become borderless that production comparative advantage could easily shift from regions well entrenched in the production of a food commodity to others that did not necessarily possess such an advantage. The earlier NAFTA example is a case in point here. Whether production comparative advantage is gained through expensive subsidies and protectionist tariffs is a separate and debatable matter, which is yet to be settled in multilateral organisations like the World Trade Organisation (WTO). Expanding need for land Notably, the globalisation of food security has been in the work for centuries. Historically, countries achieved self-sufficiency by producing what the land could naturally produce without the intervention of governments of the day through subsidies and protectionist tariffs. As populations grew beyond what the land can produce to feed them, civilisations grew beyond their initially intended borders to acquire new lands and bring them under their own tillage. Akin to today’s case with multinational companies controlling a majority of food trade, the trade of food and spices centuries ago was controlled by trading companies with colonial affiliations of that time. To summarise, the notion of food security is no longer determined by food production. The growing role of international food trade in today’s globalised food security will be even more essential in the future. More so as populations continue to grow beyond what the land can naturally and inexpensively produce. The last thought that I want to leave you with: Will food production keep up with food trade? Abdulnasser Alshaali The writer is a UAE based economist.
First look: New five star retreat launches in Jumeirah 1
Dubai: Crowne Plaza Dubai Jumeirah has just launched in Jumeirah 1 and is targeted to modern business travellers. The 252 room and suites hotel offer guests views of the Burj Khalifa, Jumeirah beach and the city. Located in the heart of Jumeirah 1, Crowne Plaza Dubai Jumeirah enables its guests to be within reach of Dubai’s key leisure and business areas. It also offers a relaxing day at Jumeirah Beach or visit nearby lifestyle or shopping landmarks. The renovated rooms and suites include 32 family connecting rooms and come with a number of technology-driven features. From USB outlets throughout the hotel, to high-speed wifi and Chromecast TVs. Rooms also include plush bedding, pillow menus, aromatherapy spray, sustainably sourced amenities and a bedtime ritual guide. Crowne Plaza Dubai Jumeirah offers a more social take on traditional business hotels, complete with four dining concepts including The Plaza, located at the ground floor, which offers a coffee lounge and diverse areas for coworking or small catch-up meetings. Guests can also visit one of the signature restaurants, Cuisines, an all day dining spot for a business lunch or Ginger, serving Pan-Asian cuisine, and The Docks, a classic British pub. Amenities also include a rooftop pool as well as a gym open 24 hours a day, seven days a week, in addition to the hotel’s five treatment rooms, whirlpool, Moroccan bath, and sauna.
Dubai pay-per-minute car rental Udrive raises $5m
Retail|auto|: Dubai: Udrive, the app-based pay-per-minute car rental service, raised $5 million in its latest funding round. The car rental service plans doubling its fleet size over the next three months and targeting 500 per cent revenue growth in the next 12 months. “As people return to work, we’re once again seeing an increased need for mobility,” said Udrive’s Founder, Hasib Khan. “Whether for health and safety reasons, or the cost benefits, these individuals fully recognise the value of Udrive’s service. The ability to avoid large capital costs associated with owning a vehicle while still having the convenience, and the ability to enjoy the driving experience is especially attractive to expats, which make up a large portion of the population in the UAE and broader GCC region.” Founded in 2016, Udrive was first to fractionalise mobility by introducing the rent-by-the-minute concept to the region — giving consumers the benefit of paying for what they use. The company scaled quickly by focusing on the large segment of the market. Over the last four years, the company has seen over a quarter of a million UAE citizens, residents and visitors complete over 1.4 million trips, delivering estimated savings of approximately 25 per cent, compared to traditional mobility alternatives. The company intends to utilise the funding to further enhance the data analytics capabilities of its platform. This includes providing customers a greater degree of transparency into their trips and consequently a better understanding of pricing models and potentially lower fees. Udrive is also expanding across the Middle East, North Africa, and Turkey (MENAT) over the next six months as it looks to capitalise on the demand for fractionalised mobility in these markets.
Dubai property: It is 14% less costly for a buyer from India now than in 2015, says Knight Frank
Property|: Dubai: It is still not expensive for an investor in India or the UK to buy property in Dubai, compared to what they would have been spending on the same in 2015. That’s because Dubai home prices have slipped off from their 2015 high – and also because these overseas investors are getting the benefit of currency fluctuations. Buyers from the UK would find a home in Dubai 19 per cent cheaper today than in 2015, as would Indian (by about 14 per cent) and those from a euro-denominated countries (by a staggering 32.3 per cent), “which is why buyer groups from these locations so active in the market,” according to a new update from the London consultancy Knight Frank. 128 deals The number of Dh20 million and over homes were sold in Dubai between January and June 2021 - the highest level since 2015, when 137 deals in this price bracket were recorded. Last year, a total of 75 Dh20 million plus homes were transacted. “It’s still early days, but as the global economy revs back up to full steam, some of these currency discounts are already showing signs of stabilising, or even reversing,” said Faisal Durrani, Partner – Head of Middle East Research, Knight Frank. Currency volatility had been acute in 2020, with the dollar gaining and shedding value. The dirham traced a similar trajectory given the peg to the dollar. Any sign of price or currency change “will no doubt up the ante for those who have been waiting on the sidelines for the right time to invest,” said Durrani. Read More Dubai property sets sales worth Dh14.7b in June - best since 2013 So, what shape will this Dubai property boom take? Coming together nicely The current sales trend in the Dubai property market shows deal flow at its best since the summer of 2014, when the market was buoyed by news of the city winning the eights to host the Expo. Now, with the Expo just another two months and a few days away, the market cycle is again on the up. “We are seeing a slow, but steady upward creep in transacted values,” said Durrani. “The confidence that has been injected into the economy by the government’s phenomenal response to the pandemic has percolated across the economy – buyers feel more confident about life and are committing to home purchases in increasing numbers. “Not just that, it’s larger homes – villas – that are seeing the sharpest rebound, with prices now about 17 per cent below the last market peak six years ago.” Some big winners Average home prices in Dubai remain 26.3% down from their previous high in mid-2015. But certain nationalities are seeing significant price appreciation, when factoring currency wobbles against the UAE dirham in these six years. “Egyptian pound purchasers have seen their investments appreciate by an impressive 51.4%, while Pakistani rupee buyers are currently enjoying gains of over 12%," said Faisal Durrani of Knight Frank. "If we rewind further back in time to the heady days of 2007, Egyptian and Pakistani buyers would have seen their investments increase in value by a staggering 200% plus. European buyers meanwhile would be looking at gains of 20.5% since 2007, while for British buyers, it would be nearer 68%. "The flipside to the story is of course some of those who held off, or were unable to step onto the property ladder, relative prices are much more attractive today than they were in 2015.”
Saudi Arabia freezes sale of its mega water plant
Business|: Riyadh: Saudi Arabia has halted the sale of one of the world's biggest water plants, which had attracted interest from investors including France's Engie SA, in a setback for the kingdom's privatization plans. The Ras Al Khair desalination and power facility on Saudi Arabia's east coast had cost more than $7 billion to build. The government, which had been hoping to accelerate asset sales this year, blamed disruptions caused by the pandemic. Saudi Arabia was looking to raise about $2 billion by selling a 60 per cent stake. Potential bidders considered the plant's age and use of outdated technology unappealing. Its poor environmental credentials were another deterrent, people in the know said. "One of the main reasons for the cancellation of Ras Al Khair was the economic conditions resulting from the pandemic and its effect on transactions of this size," a spokesman for the country's National Centre for Privatization said. Bids from investors showed the deal would make "a limited contribution" to the government, he said, adding that officials will continue with other public-private partnerships. The kingdom aims to raise about $38 billion over the next four years through privatizations, Finance Minister Mohammed Al Jadaan said in May. The Ras Al Khair sale has been in the works since at least 2017, when BNP Paribas was appointed as financial adviser. The country shortlisted bidders earlier this year. As well as Engie, they included JERA Co. and Marubeni Corp. of Japan, India's NTPC Ltd. and Riyadh-based Acwa Power. The winner was supposed to acquire 60 per cent of the facility, while also managing and operating it. Saudi Arabia is the world's biggest consumer of desalinated water. The plant serves the capital of Riyadh and eastern parts of the kingdom.
Omega pop-up store does the work for Rivoli Group
Retail|: Dubai: The Rivoli Group, in partnership with luxury watchmaker Omega has set up a pop-up boutique in Mirdif City Center and Mall of the Emirates for a July promotional blitz. “We have had a long-standing partnership with Omega as their representative in this market and as one of the largest premium watch retailers in the GCC region,” said Ramesh Prabhakar, Vice-Chairman and Managing Partner of Rivoli Group. “Pop-up stores allow customers to get intimate with a brand and we wanted to bring that vibe to our audience. A unique retail activation is just one amongst many of our upcoming customer-centric engagements that we hope to continuously bring to our discerning shoppers”. Ramesh Prabhakar, Vice-Chairman and Managing Partner of Rivoli Group Image Credit: Supplied Omega showcased a myriad of stunning timepieces at the boutique where shoppers were able to walk through the timeless collections on display while they sipped their qahwa and cappuccino. “Our goal was to create something that motivates shoppers to engage at a very personalized level with the brand and one that creates an exclusive and authentic experience outside of the typical boutique environment,” said Abraham Koshy, Chief Operating Officer of the Rivoli Group, Watch Division. “We also wanted to cater specifically to the ladies this time and thus chose to collaborate with Omega’s beautiful ladies timepieces in a distinctive ambience.” Rivoli Group intends to replicate this unique retail concept in other emirates and regions where the brand is represented.
Jebel Ali based Proserv Controls to deliver 22 wellhead control panels for Iraq project
Energy|: Dubai: Proserv Controls has signed a contract to deliver 22 wellhead control panels (WHCP) to the Basra Oil Company (BOC) for use at its Majnoon Oil Field in southern Iraq. WHCPs, also known as shutdown panels, are fail-safe shutdown systems on oil production platforms. The control panels are being manufactured at Proserv’s dedicated site in Jebel Ali. The value of the contract has not been disclosed. The deal was arranged through Houston-based KBR, which is the EPCM (engineering, procurement and construction management) lead on the Iraqi state-owned oil company's plans to significantly ramp up production capabilities at the field. “Across the entire company, we have enjoyed a very encouraging first-half to 2021, with some major wins both subsea and topside," said Davis Larssen, CEO, Proserv Controls. "This valuable contract from BOC in Iraq demonstrates the full scope of our abilities across the Middle East and North Africa region." The 22 WHCPs each has the capability of controlling up to four wells and they have been earmarked for use on 70 new wells in the development phase. At present, Majnoon has a capacity of just over 200,000 barrels per day (bpd) of production, but BOC’s strategy is to more than double this in the next two years. Proserv will deliver the WHCPs in three lots, with the first due towards the end of third quarter 2021, with the second scheduled for the fourth quarter and the final tranche set to arrive in March 2022.
Dubai logistics firm Tristar Group sees net profits shoot up 66% in first-half 2021
Markets|: Dubai: The Dubai-based logistics company Tristar Group recorded gains on both revenues and net profit for the first six months of 2021, citing resilience in an improving market. “We continue to have strong pipeline of growth opportunities across all our business segments, which we are confident of leveraging upon to deliver attractive returns to our shareholders,” said Eugene Mayne, Group CEO of Tristar. “We pride ourselves on our long-standing relationships with our blue-chip clients who have been key enablers to our continued success.” While its primary coverage area remains the UAE and Gulf territory, the company has made inroads into Africa and also in India. The wider geography too seemed to have added clout to the bottom-line, which grew 66.5 per cent from a year ago. (The EBITDA was up 26 per cent.) Tristar’s biggest visibility is in handling supply chain needs for clients in the energy business. The Group earlier this year had dropped plans for an IPO on the Dubai Financial Market. The EBITDA and net profit numbers are “higher than the management budget for the same period”.
More end-users buying homes in Dubai as mortgage-backed deals double in first-half 2021
Property|: Dubai: More end-users are getting into Dubai’s property market, with mortgage-backed transactions now making up 40 per cent of all residential purchases. This tally means a doubling of mortgage volumes in the first six months of this year compared with the second-half of 2020. The numbers also suggest that end-users are keen to enter the market now rather than take the risk of waiting in the hope that property values could drop. The higher number of mortgages also attest to the buyers’ interest in ready homes rather than offplan, according to the consultancy Mortgage Finder. The average home loan amount is also up, by 24 per cent from second-half 2020 to nw. The average mortgage size in the first six months is Dh2.2 million. There is an “almost 50:50 split in mortgage transactions for villa/townhouses and apartments,” the report finds. (In overall sales, apartment deals made up 725 per cent of the first-half total.) Mortgage rates are available from 1.99 per cent, compared with 2.49 per cent in the middle of 2020. “We have seen a significant uptick in demand this year, which is really positive news and indicates more people are reaching the goal of owning their own home in Dubai,” said Ian Vaughan, Senior Mortgage Consultant at Mortgage Finder. “The increase in activity in the market can definitely be attributed, in part, to the major reform in lending policy introduced by the Central bank of the UAE in early 2020, which allowed banks to lend 5 per cent more, reducing the down payment requirement for first-time buyers from 25 per cent to 20 per cent. This has made getting a mortgage more accessible for some.” Banks in the UAE are open for business. Many are currently offering great headline mortgage rates to entice borrowers, with some going further and being more flexible in their lending criteria depending on the borrower profile Ian Vaughan of Mortgage Finder
UAE's Golden Visa and Dubai's coder initiative is all about winning war for talent: Rizwan Sajan of Danube
Analysis|: Immigrants have enriched economies and societies of host countries – such as the US, the UK, Australia, Canada and New Zealand – with their skills for a long time. They were able to attract foreign talent by granting them citizenship through immigration process. It is said that the economy of the US grows faster when they relax immigration rules and induct more immigrants. Its growth slows down when the country tightens immigration rules – among other economic factors. So, there is almost a direct co-relation between the induction of foreign talent and economic growth. Economically speaking, skilled professionals and entrepreneurs help an economy expand through their skills, financial and other resources. If a company hires 100 new professionals, it adds about 400 new consumers. However, the employment of 100 professionals would have a multiplier effect on the company’s bottom-line – and help it expand. Similarly, when an entrepreneur starts a business in a foreign country, he generates wealth and distributes part of it - as salary to employees and dividends to shareholders – which then flows into the economy. An economy holding its own So, every time an immigrant enters a foreign country, he or she starts to contribute to the economy. This is how the UAE benefitted and expanded its economy to become the second biggest Arab economy after Saudi Arabia – with a mere 9.6 million people, about 88 per cent of them being foreigners – and pushing Egypt to the third place among 22 Arab countries. China and India are the leading suppliers of talent to the Western countries. Instead of attracting talent, they were losing them. The Gulf countries over the decades have benefitted from foreign workers, professionals, investors and entrepreneurs, most of whom have become part and parcel of the society. Despite their affinity to the region, for decades, they all remained foreigners, expatriates, or ‘aliens’ – as some newspaper reports would label them – until a few years ago. As the economies mature, the Gulf countries needed to re-think strategies to spearhead economic growth. Banking on oil or trading is no longer an option as the economies have started to shift from brick-and-mortar to digital. With oil prices declining, the Gulf countries needed a fresh strategy to lift the economy, even before the COVID-19 hit. Rizwan Sajan of Danube Group: "The UAE will always be known as a ‘Land of Opportunity’ and a ‘Land of Immigrants’..." Image Credit: Supplied Expand the talent hunt The introduction of the 10-year Golden Visa in 2019, in this context, has not only changed the situation, it has, in many ways, changed people’s mindset. It broke the taboo that long-term visa was impossible in this region. The immigration reforms announced earlier this year - including granting citizenship and extending the 10-year Golden Visas to talented students, professionals, coders, journalists, doctors, engineers - is going to be the biggest game-changer for the UAE. Similarly, running businesses in mainland without a local partner – either active or ‘sleeping’ – was deemed impossible. Today, all of that has changed and is going to not only change the UAE economy, but the country’s society – where we see Emiratis and expatriates socialize and undertake joint initiatives. It will strengthen the UAE’s position as ‘a melting pot of cultures’ in its true sense. The UAE has been a land of opportunity for nationals as well as foreigners. The country is opening its doors to the global software developer community, or coders, by offering them 10-year Golden Visa. The number of coders – who have been re-shaping the business landscapes by expanding the e-commerce and digital businesses – worldwide is projected to increase from 23 million in 2018 to 28.7 million in 2024, according to Statista, a global intelligence provider. A full-scale digital economy The Golden Visa and Citizenship reform programme will see thousands of talented coders, students, teachers, academicians, professionals relocate to the UAE. This will fuel the growth of the UAE’s innovation-driven knowledge economy that will change the country’s position in the global economy. The future will belong to those countries that invest in innovation and talents. The future will belong to the UAE, thanks to the recent series of initiatives announced by the Government – which will transform it from an oil-dependent economy to an innovation-driven knowledge and digital economy. The UAE will always be known as a ‘Land of Opportunity’ and a ‘Land of Immigrants’. However, right now, it is perhaps the leading country in Asia to formally include immigrants into its government strategy for the future. Now, we all can expect the next economic boom with a shared destiny… Rizwan Sajan The writer is Chairman of Danube Group.
UK court declares Vijay Mallya bankrupt allowing Indian banks to pursue his assets worldwide
Business|: London: Fugitive Indian businessman Vijay Mallya on Monday was declared bankrupt by a British court allowing Indian banks to pursue his assets worldwide. The Companies and Insolvency Court of UK passed the ruling, according to a statement of the UK High Court press office. The Companies Court (now part of the Insolvency and Companies List) is a specialist court within the Chancery Division of the High Court of Justice of England and Wales, which deals with certain matters relating to companies. Mallya has been denied any right to appeal against the bankruptcy decision. The decision was announced at an oral hearing today. Mallya, the owner of the now-defunct Kingfisher Airlines, owes more than Rs 9 billion to a consortium of banks in principal and interest. The petitioners were State Bank of India (SBI)-led consortium of 13 Indian banks, including Bank of Baroda, Corporation Bank, Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Asset Reconstruction Co Pvt Ltd. The ruling is being seen as a major victory for the consortium of Indian banks pursuing debts owed by the now-defunct Kingfisher Airlines. Mallya fled to the UK and has been fighting on multiple fronts to avoid extradition to India. He remains on bail after he was ordered to be extradited in December 2018 by Westminster Magistrate's Court in London - a ruling he has repeatedly tried and failed to overturn. The 65-year-old fugitive businessman has exhausted legal procedures available to him to fight the government's effort to extradite him to India. The UK government is dealing with a "confidential matter" pertaining to Mallya. There is speculation that Mallya has sought political asylum in the UK.
Jeff Bezos offers NASA $2 billion in exchange for moon mission contract
Aviation|: Fresh off his trip to space, billionaire businessman Jeff Bezos on Monday offered to cover up to $2 billion in NASA costs if the US space agency awards his company Blue Origin a contract to make a spacecraft designed to land astronauts back on the moon. NASA in April awarded rival billionaire entrepreneur Elon Musk's SpaceX a $2.9 billion contract to build a spacecraft to bring astronauts to the lunar surface as early as 2024, rejecting bids from Blue Origin and defense contractor Dynetics. Blue Origin had partnered with Lockheed Martin Corp, Northrop Grumman Corp and Draper in the bid. The space agency cited its own funding shortfalls, SpaceX's proven record of orbital missions and other factors in a contract decision that senior NASA official Kathy Lueders called "what's the best value to the government." In a letter to NASA Administrator Bill Nelson, Bezos said Blue Origin would waive payments in the government's current fiscal year and the next ones after that up to $2 billion, and pay for an orbital mission to vet its technology. In exchange, Blue Origin would accept a firm, fixed-priced contract, and cover any system development cost overruns, Bezos said. "NASA veered from its original dual-source acquisition strategy due to perceived near-term budgetary issues, and this offer removes that obstacle," Bezos wrote. "Without competition, NASA's short-term and long-term lunar ambitions will be delayed, will ultimately cost more, and won't serve the national interest," Bezos added. A NASA spokesperson said the agency was aware of Bezos' letter but declined to comment further, citing the protest Blue Origin filed with the US Government Accountability Office accusing the agency of giving SpaceX an unfair advantage by allowing it to revise its pricing. The GAO's decision is expected by early August, though industry sources said Blue Origin views the possibility of a reversal as unlikely. A SpaceX spokesperson did not respond to a request for comment. Before choosing SpaceX, NASA had asked for proposals for a spacecraft that would carry astronauts to the lunar surface under its Artemis program to return humans to the moon for the first time since 1972. Blue Origin's lunar lander is called "Blue Moon." Bezos and Musk are the world's richest and third-richest people respectively, according to Forbes. Bezos' offer came six days after he flew alongside three crewmates to the edge of space aboard Blue Origin's rocket-and-capsule New Shepard, a milestone for the company's bid to become a major player in an emerging space tourism market.
Dubai Expo buzz: Dubai South, Jumeirah Village Circle emerge as new hotspots for short-stay homes
Dubai: The first signs of an upcoming Expo-created boost for Dubai’s property market are already showing up – enquiries for short-term rental homes are streaming in well ahead of the October opening day. This time, locations closer to the Expo venue are generating these enquiries, including, of course, Dubai South and Jumeirah Village Circle. What’s interesting is that these are mid-market locations in demand, while typically the short-term lets in Dubai have been dominated by pricey homes at the Palm, Dubai Marina and Downtown Dubai. A Dubai South apartment – which is the epicentre of the six-month long Expo – is having daily rates of between Dh125-Dh250. (At the top end of the Dubai short-stay market, daily rates can easily cross Dh10,000.) Closer to October, these could see some sharp increases and which is exactly what landlords and short-term stay operators are hoping for. The enquiries are yet to “convert to bookings,” said Vinayak Mahtani, CEO of bnbme, which specialises in short-stay and holiday home leasing. “There is however a higher than usual movement happening and I believe these are Expo-related.” Read More Dubai landlords push short-term lease contracts ahead of new law on 3-year rent freeze Dubai’s luxury short-term rental hits a high Appetite for short-term rentals in Dubai to return post-pandemic! Get ahead of hotels In the coming weeks, it will be a straight contest between short-term stay homes and hotel operators in signing up the first visitors heading to Dubai for the Expo. (Just recently, the UAE’s aviation regulator said all travellers coming in for the Expo or associated events will be allowed to fly in.) If landlords can show their offers can be price competitive compared to a hotel stay, a sizeable portion of the bookings could come their way. Apart from Dubai South and JVC, the Discovery Gardens’ community is the other location recording clear – and “large” - spikes in booking requests and for longer periods of time. The average stay is four nights, but now, requests are also happening for a week and more. More to come? Dubai has just under 10,000 active listings in the short-term rental market, while three years ago the tally was around 6,000 listings. Last year could have been a bumper year for listings had COVID-19 not intervened and led to some change of plans among landlords. But as the city inches closer to the grand opening in October, there is a buzz of anticipation coursing through the property market. “Such a boost will touch all property types – what you see happening in luxury freehold sales and long-term rentals will filter through to short-term stays as well,” said a developer, which will have a few units ready for such bookings in the next few weeks. According to Mahtani, there are new units added every day and “we need to remember that the tourist visiting Dubai now accepts the vacation rental market as the primary source of accommodation. Just as they do at major other tourist destinations like London, Bali and Phuket.” Vinayak Mahtani of bnbme: "We are currently far from a over supply situation in the vacation rental industry..." Image Credit: Supplied Not a direct fight Mahtani reckons that short-stay focussed landlords and property companies need not get into a tug-of-war with hotels on rates and guests. “It’s a different mindset of customers and what customers want,” he added. “Staying in a hotel is very different to staying in an apartment - and both have their own sets of advantages and disadvantages. “But, yes, more customers are starting to shift from staying in hotels to apartments and this is why you see so many hotel brands trying to enter the vacation rental space. How can one compare a hotel room to a one-bedroom apartment where you have the luxury of space and your own kitchen. And where the apartment has been set up for you personally. It’s not an apple-to-apple comparison.”