How did the Ferris wheel become the must-have municipal toy? I was amused to read in the Times of India over the weekend that apparently Ahmedabad is the latest city to be infected with this mania: “It was during one of the Vibrant Gujarat summits that the company Saloria Chartered Architects of London, one of the top 100 architect firms of UK and right holders of equipment technology, had proposed a viewing wheel and recreation zone modeled on London Eye, or Millennium Wheel. The finer details of the agreement between the construction company and Ahmedabad Municipal Corporation (AMC) are taking shape with talks on revenue model, space sharing and ticketing. The site for the project will be the Sabarmati riverfront, claimed a senior AMC official.”
The timing is interesting as Dubai also unveiled plans last week to build the Dubai Eye. Unlike Ahmedabad’s still-unnamed ride which would just be a replica of the 135-meter London Eye, Dubai developers plan to construct the world’s largest ferris wheel at 210 meters. Natch.
The proposal as unveiled is to build – you guessed it – a luxury mixed-use shopping/entertainment/hotel complex on what was the only open beachfront in New Dubai. (Because, really, there’s no need for a public park in Dubai. We must remedy the dearth Dior and Jimmy Choo boutiques. More sheisha cafes and Cinnabon outlets for everyone!)
Excellent, I thought to myself. This is the remainder of the resurrection of Dubailand, the part that features a medley of theme parks across the size of New York City, now with a six-times-as-big replica of the Taj Mahal. But the story actually referred to an entirely new complex of theme parks, this one being beside Jebel Ali port.
The $2.7 billion development will “include an adventure park featuring Hollywood brands, a marine park, a children’s park and a night safari,” according to Reuters. “Meraas has formed partnerships with several major film studios in Mumbai to obtain content for the Bollywood Parks section, which will include a theatre showing Broadway-style musicals.”
Broadway musicals with Bollywood beats! This is something even Disney hasn’t thought of. The announcement of BollywoodLand comes a few days after Sheikh Mohammed, the ruler of Dubai, said Dubai would be building a new city within Dubai, named after himself. No price tag was put on Mohammed bin Rashid City but it is planned to be home to the ‘Mall of the World,’ which would usurp Dubai Mall as the world’s largest shopping mall, which is currently next to the world’s tallest tower Burj Khalifa, which itself features the world’s tallest dancing fountain. The development will also include a park 30 percent bigger than Hyde Park in London and more than 100 hotels.
Each of these stories, especially those run by local media, contain quotes from analysts espousing the same sort of wisdom: The worst of the economic downturn is behind Dubai. Laissez les bons temps roulez!
But some party-pooper journalists in the international business press have provided some caveats in the Dubai-is-back frenzy. Reuters points out that Dubai entities have nearly $50 billion of liabilities between 2014 and 2016 and “given the lack of major asset sales or haircuts, there has been little progress on the de-leveraging front.”
In its restructuring proposal in July 2010, Dubai World said it needed time for assets to recover in value in order for it to sell them and use the cash to pay off its debt. Under this plan, which was finalized in March 2011, between $1.3 and $2.3 billion would be raised between 2010 and 2012 by selling assets such as through P&O Ferries and Gazeley, a warehouse developer.
But the story says that a lingering weak global economy has meant that these sales have not gone ahead as planned, and if they did, the values weren’t what they were hoping for.
“The main issue is the depressed value of the international portfolio. Local assets are flourishing and doing great business but we haven’t seen any credible asset sales so far which can help reduce the debt burden,” Reuters quoted a senior Dubai banker as saying. “The most likely situation we see is Dubai going to the banks and again saying they have no money to repay the debt.”
So, money is still scarce to pay off debt but billions are available to construct new and ever-larger developments? Does Dubai need 100 more hotels? I’m no Alan Greenspan but, even with all the superlatives, it sounds like irrational exuberance to me.
For the last few months, I’ve been focused on editing a 10-story package for Forbes Asia exploring trade ties between Gulf and Asian companies written by the magazine’s contributors all over the Asian continent. We’ve covered a lot of ground, from Taiwan to Saudi, from Singapore to Oman. Please see below for a full listing of our coverage.
It’s debatable whether the historical metaphor is the Silk Route or Spice Route, but neither still matters literally, so we’ll say that Arabia-Asia is a commercial and financial link that is ever more important in the world economy.
In this special section, to correspond with the first Forbes Global CEO Conference in the Middle East (being held in Dubai), we take a look at parts of this expanding trade. We do so in the FORBES ASIA way, through profiles of several significant business personalities and the firms they founded.
The package was nimbly edited by Angela Shah, a writer and editor based in Dubai. Her work has also appeared in The New York Times,Time, and Newsweek/Daily Beast. For more about Angela, see www.angelashah.com.
Personalities play a big part in our coverage. Few people have as much boots-on-the-ground experience in both regions as does David Eldon, former chairman of HSBC Asia-Pacific. Since retiring from the bank in 2005, he has served as chairman of the Dubai International Financial Centre Authority. In our interview with him he discusses a variety of issues and affirms that “trade links are trending east and south, away from the West.”
Another dealmaker in the region is Pakistani Omar Lodhi, of Dubai’s Abraaj Capital. He opened the firm’s Singapore office two years ago and is leading Abraaj’s push into Asia, particularly the ASEAN countries, whose population and GDP offer plenty of opportunity: “These regional Asian economies are akin to Europe.”
Growth in the region isn’t just about finance–even the most ambitious high-rollers take a break for dumplings and spring rolls after a long day of puts and calls. Lin Chao Wen, founder of Gulf Royal Chinese Restaurant chain, started out as a failed serial entrepreneur in Taiwan in the 1970s before he eventually ended up in Saudi Arabia, bringing Chinese food to the masses. In the process he immersed himself in Arab culture, eventually converting to Islam and building himself a lavish home in Taiwan that resembles an Arabian palace.
Just as Lin could never have known as a young man in Taiwan that he would end up in Saudi Arabia, P.N.C. Menon, founder of Sobha Developers, could never have predicted while growing up in a small Kerala village in India that he would end up being a big player in Gulf-region real estate. Says the man who appeared on the FORBES Billionaires List in 2006: “It came from nothing. I went [to the Gulf] with $7. I must have been making a little bit of money here and there to make myself comfortable.”
Another Indian who has spent a significant part of his life in the Mideast is Shaukat Ali Mir, chief operating officer for international electromechanical projects at Mumbai’s Voltas, a Tata Group company. Voltas has been providing infrastructure (plumbing, firefighting, drainage and electrical systems) for the Mideast since 1976, and Mir came to the region in 1982. Voltas’ most prestigious, and perhaps most challenging, project was providing the electromechanical guts for Dubai’s Burj Khalifa building, the world’s tallest. Mir is globalization on two legs: “I grew up in India. I am living in the Middle East. My children live in Canada, and I plan to retire in Europe.”
No survey of Asia and the Mideast would be complete without drilling into oil production. China’s biggest oilfield pipe maker, Hilong Holding, is one of the few Chinese companies with manufacturing plants in the Middle East, its fastest-growing regional market. Hilong’s business in Saudi Arabia, its main target, is a classic example of synergy: You provide oil, I’ll provide the means to get it out of the ground–everybody makes money.
But enough about electrical systems, plumbing, turbines and dirty oil fields, what about technology and all those sleek toys that everybody wants? Vincent Lai and Andy Soh, who share a “curiosity in playing with cool stuff,” are the founders of Tocco Studios, a maker of touchscreens and software. In 2009, when Lai and Soh were students at Singapore Management University, a group of Omanis visiting the university’s business incubator wanted to learn more about the budding entrepreneurs’ screens. The Omanis were captivated, and soon Lai and Soh were doing business in the Gulf, as well as having a Singapore office.
With all the money being made these days, we would be remiss if we didn’t offer a profile of a company offering folks a way to show off their wealth. Jeweler Joy Alukkas, like our other Indians profiled, made his entry in the Mideast decades ago. He opened his first store in Abu Dhabi in 1987, offering his wares to expat Indians. Eventually he moved back to India, bringing back with him an intangible commodity: marketing and business practices accrued in the Gulf. His Joyalukkas stores had $1.33 billion in sales last year.
For slightly less upscale shopping, consumers can go to the Dragonmart mall, a mass-market oasis on the outskirts of Dubai.
Finally, we profile five companies that are learning how to navigate the cultural and business currents that join China and the Mideast. One of our snapshots is of China’s Shenguan Holdings, a maker of sausage casings that recently announced it would be offering halal meat to the Muslim world.
The Arabia-Asia economy is not on a glide path. It has famously been interrupted through the centuries but also in recent times, as global busts in commodities or real estate, or other home-market vagaries, got in the way of would-be Marco Polos. But the lure of the great crossroads and the increasing wealth they connect makes it likely that the tales here are just an inkling of many more to come.
@sultandarmaki is one of my favorites in Twitter-dom. His sharply worded tweets humorously poke fun at stereotypes about Emiratis — both at expats who might hold them and fellow Emiratis who might exhibit them — under the thread #ProudToBeEmirati. Yesterday, he started a hilarious thread called #EmiratizeXmas. Read from the bottom up.
A number of U.S. magazines have launched Middle Eastern editions based out of Dubai in the last year. The latest is publishing stalwart, Good Housekeeping, which had its debut this month. My friend Eileen Lee was doing the makeup for the premiere edition of “Look for a Lifestyle,” a monthly feature where Danielle Elmes, the magazine’s stylist, revamps hair, makeup and wardrobe. I happily volunteered to be the first guinea pig back in October. I tried Kera Straight on my hair for the first time — wow, it really does knock out the frizz — and got to rummage around GH’s trunk o’ goodies, including couture like the DVF dress I ultimately modeled. The weather had just started to cool off so we did the main photo shoot in the outdoor bar area in front of the Ibn Battuta Gate Hotel, much to the curiosity of guests and staff. (Ha! My minutes of fame!) It was definitely a pleasant afternoon.