Unlike its neighbors, which export a large proportion of the world’s oil, Dubai barely has any oil and gas supplies of its own. Yet, the city has the highest profile of any state, city or country in the region. It has the most advanced and best developed infrastructure and, as a holiday destination, would easily be the most recognizable and popular amongst its peers.
Dubai has been branded brash, soulless and even cultureless and is currently famous for its debt default, which is far from resolved. Yet it is still the gateway to the Middle East socially and economically, and is also developing as a gateway to Africa. In a region that is being swept by social change and upheaval, Dubai could emerge as the place where the political, economic and social issues of 21st century Arabia are developed and openly discussed, a home to the voice of reason. In a region where, from the outside looking in, many see only religious extremism, Dubai is shaping up as a trusted partner and intermediary; the Switzerland of Arabia.
I went to the Dubai cup last week. It is a horse race, held at the Mayden racecourse, a purpose built $3 billion race track and hotel complex in Dubai. The ruler of Dubai, Sheik Mohammad bin Rashid al Maktoum, is not just a big fan of the races, he is also one of the most astute and successful race horse breeders in the world. Having never been to a horse race before, I was not sure what to expect. Dubai is culturally tolerant to say the least, in practice if not in principle. I was track side, in the bubble lounge. Bubble, because all they serve is champagne. The bubble lounge was pretty much entry level in terms of tickets and price. Towering above us were the corporate and royal boxes, whose inhabitants were dying to be down where the action was: track side. I was not surrounded by Euro trash or drunk British expats. I met a stream of highly educated, highly motivated, culturally diverse men and women, across the full age spectrum. I even met a media magnate, who distributes news and information across more than 45 countries. All of them wanted to contribute to the region in a positive and peaceful way, and they chose Dubai as a springboard to achieve this. Almost all of them live or had lived in Dubai, and many were from neighboring countries.
Dubai is not without its faults. Nowhere is. It has a near-term debt problem to overcome, it lacks what western countries would call a civil society (without civil laws, there is no democracy as we know it) and its green credentials are limited to say the least. If I was a teacher writing a report card for a student, then to say there is room for improvement would be being generous. Yet Dubaians are more than happy. There was a time when a locust plague and camel milk kept the locals alive. They are tribal by nature, and their leadership, in His Highness Skeik Mohammad bin Rashid Al Maktoum, by all accounts is genuinely respected and supported by his people. Less than 20% of Dubai’s population is made up of Emiratis, the rest of us are guests. The rules in Dubai are straightforward, the locals engaging, supportive and respectful in the most part, and the lifestyle, especially for young families, is fantastic. There is a distinct lack of bureaucracy and because Dubai is a constitutional monarchy, decisions are made quickly.
Perhaps because Dubai does not have oil or gas for export, as its neighbors do, it is able to play the role of political and cultural moderator in the region, and fulfill the role as the region’s chief trading hub. Dubai has the foundations of a global exchange network, through Bourse Dubai, and is striving to create a global commodities trading hub via the Dubai Multi Commodities Centre. Dubai to date has been all about property speculation, but when the dust settles, which it inevitably will, Dubai’s 21st century infrastructure will provide the building blocks for a world-class business, trade, commodities and financial market environment, potentially servicing a population of 300 million people across the Middle East and North Africa.
Dubai has many near-term financial pressures. Its property market is still looking for the bottom, and the volume of its financial markets is tiny compared with developed markets. This could very easily change, as capital flows around the world, and particularly in this region, change. While you can get a drink at the races you cannot lay a bet! Perhaps that’s something for the Sharia gurus to work on.
Global Markets are anything but integrated. What if we had a paradigm shift in the way we think, the way we actually do business with each other, between nations. Balanced global trade can only occur if we have transparent, accessible, efficient markets, with standardized contracts and on a standardized platform of global exchange. We are on the cusp of achieving this, although most people cannot see it. Sam’s Exchange aims to give its readers a clearer view and a platform for discussion. Markets, trade and economics are in fact nothing more than the result of our thoughts and actions expressed in numbers, not the reverse.
Sam Barden is CEO of SBI Markets General Trading LLC, a Dubai-registered trading and advisory company. Barden, 39, has worked in the global financial markets for more than 17 years in Europe, Russia and the Middle East. He has advised and executed strategic transactions for both the government and private sector, in particular in energy and commodity markets, advising various energy producing nations on their strategic market developments and interaction. He holds a degree in economics and finance from Victoria University, Melbourne, Australia.