Friday, March 16, 2018

Gulf Notes: February 8-14

February 17 2009

Moody’s Investors Service prophesied that this year would render the Gulf economies’ greatest challenges ever as low oil prices compound ramifications of the global economic slowdown. DIFC Managing Director said he had never “faced more difficult challenges” than what he faces now. He is 29. Weighed down partially by its American home builder division, Emaar reported quarterly losses of 55%. UAE building projects still in motion are almost equal in value to the US stimulus package. Construction costs in Dubai have fallen by 71% from their peak in August 2008, inciting the UAE Contractors Association to state, “It is now a developer’s market.” HSBC released “the list”: 59 projects, eight cancelled, 51 on hold, in the UAE, and the latest study calculates $582 billion of projects are stalled in the UAE. Recent developments impel an equity investor to ponder why “the Government has yet to announce any bailout plans for the real estate sector.” While building sector professionals look beyond Dubai for work, one Abu Dhabi developer warns, “But it is all coming to a stop here too.”

Dubai cancelled 54,684 visas in January 2009, almost double that in January 2008. Indian carriers flying to the UAE received bulk bookings from construction firms to fly out 20,000 workers. If not sending them “home,” companies in Dubai are sending redundant Indian workforce to Doha. Bahraini government announced its plan to relocate labor camps away from residential areas: “Families do not feel safe with their presence in neighborhoods.” 82 recently naturalized Kuwaiti citizens are to be stripped of their citizenship, after certain parliament members voiced opposition. Responding to Dubai’s Al Futtaim Group laying off more than 20 Emiratis, Dubai police warned against termination of UAE nationals’ contracts; such actions could result in a police boycott.

Pakistani media reported “billions of rupees of Pakistani investors cum developers” are “stuck” in Dubai property ventures, inhibiting the local economy’s recovery. Ajman was a particularly popular investment destination. Ajman’s government took control of the emirate’s largest development project, in a bid to restore confidence and stem buyers from walking away. The developer of Ajman’s proposed tallest tower is sought by Dubai police for more that $5 million in fraud. Two senior managers at Nakheel’s Dubai Waterfront project are detained by police. After his arrest for property fraud, Kabir Mulchandani of Dynasty Zarooni, voiced his perspective on the matter: “I am the victim here. After Lehman Brothers went bust the world changed.…” Works by Andy Warhol anchored Sotheby’s first contemporary art auction in Doha. A research project found 85 previously unknown insect species in the UAE.

DP World Chairman Sultan bin Sulayem launched the new container terminal in Djibouti, which includes a hotel, a free zone and customs operations. Afterwards, he opened the newest wing of Nakheel’s Kempinksi Djibouti Palace Hotel. Almost two years after unveiling its town plan in Bangalore, Dubai-based Limitless acknowledged an impasse: the local government has failed to acquire land for the project. Qatari Diar’s luxury London development, One Hyde Park, has a list of exclusive buyers that is at least 25% Middle Eastern, leading one paper to suggest Arabs are helping to “thaw the UK property freeze.” Emaar launched its third project in Egypt: Mivida, to include 5,000 apartments.

Responding to whether Masdar’s carbon capture program is feasible, one energy financier stated, “We like people who get on and do it because … we don’t know if that’s going to solve 20% of the problem, or solve none of the problem.”

One week before Muntadhir Al-Zaid was set to go on trial for throwing his shoe, Iraqi Prime Minister al-Maliki stated, “The time for [other countries’] putting pressure on Iraq is over. The Iraqi government knows what its responsibilities are.” Sudanese delegation met with Darfur rebels in Doha for the first peace talks since 2007. Qatar’s public prosecutor officially denied fathering French Justice Minister Rachida Dati’s daughter.

Construction of Saudi Arabia’s $26.7 billion King Abdullah Economic City (KAEC) will generate 10% of the kingdom’s GDP. Population density in Saudi cities increased more than 120% from 2002 to 2008. Jeddah’s population density increases 20-28% annually; Makkah’s 20-25%; and Riyadh’s 18-20%. If fully occupied as planned, the Kingdom’s economic cities would house a population three times Dubai’s current population, with a total area four times greater than Hong Kong, and a GDP comparable to Singapore’s.

Saudi Arabia announced a plan for Jeddah Eye, a Ferris wheel not unlike London’s Millennium Wheel. Saudi and Chinese students laid the foundation stone of the Saudi-Chinese Friendship Park. A Saudi studying in the United States, married a Saudi woman online, fearing he would lose his visa if he attended the ceremony in Madinah. Saudi Arabia’s Commission for the Promotion of Virtue and Prevention of Vice intensified its vigilance over flower, chocolate and gift shops to deter Valentine’s Day celebrations, while the price of the red rose soared 1000%. Having deported 627 people in 2007 for testing HIV-positive, the UAE Government continues its AIDS policy. Qatar announced “Church City,” a 99-acre site leased to Christian denominations, making way for Qatar’s first church since the 7th-Century.

The Bahrain-Qatar Causeway is delayed, presumably because of the global financial crisis. Women were to have been allowed to drive the causeway without a legal male guardian.

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Abu Dhabi tower, December, 2009. Photo: Sander van Horssen
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