“There was nothing here six years ago. Everything is completely new,” says Nasser Saidi, chief economist for the Dubai International Financial Centre (DIFC), referring to the sweep of freshly minted skyscrapers that surround his office’s headquarters. “We’ll finish the rest of the building by 2013. It’s pretty impressive what you can do if you put your mind to it.”
Saidi, who met with Drew International Seminar students earlier this week at the DIFC, certainly didn’t sound like a man whose emirate had taken a significant financial blow just over six months earlier, with development projects stalled and a spending binge prompting a bailout from its neighbor, oil-rich Abu Dhabi.
He’s probably right to be upbeat. Economic indicators all point to the surging importance of the MENASA region (Middle East, North Africa and South Asia) and the shrinking role of what he called “advanced economies, Europe and the United States—where the recession hit the hardest.”
“The bulk of the world’s output is now produced in Asia and the Middle East,” says Saidi. “This is a big shift in the world, and it’s not just in terms of output, but also investment and international trade.”
A former minister of economy and industry in his native Lebanon, Saidi met with students for nearly two hours and answered a wide range of questions from students and faculty, from whether the UAE’s tradition of family ownership of companies was sustainable to the emirate’s treatment of expatriate workers to the future of its free zones, areas where foreign companies are released from a host of government requirements, including the need for an Emirati partner.
Kyler Robinson C’10 asked Saidi how recent debt issues with Dubai World, the government’s investment arm, have changed the economic climate. Until Dubai World couldn’t repay its debt last fall, Saidi says, the unwritten assumption was that everything tied to the government was stable. Now he anticipates a more cautious and smarter approach to investing, especially in terms of “maturity matching.”
“You don’t finance a long-term project with short-term money,” says Saidi, who tweets regularly on world economic issues. As an example, he offered up Dubai World’s Palm Island development project, financed with three-year money. “That’s a 15-year project,” he says. “They couldn’t roll [the debt] over because the whole world was in crisis.”—Renée Olson, Editor, Drew Magazine