Business

Dubai’s status as a business hub depends on two very different princes

Visitors jostled for selfies with dozens of local officials waiting beaming. The royal family works in the room with ease Instagram Celebrities are used to superstars like soccer player Cristiano Ronaldo.

A few meters behind him, mingling with the crowd at an event at the Dubai Expo earlier this year, is another man who may be less well known on the city’s social scene but whose impact is winning words. praise from foreign investors while keeping government executives running companies on their toes.

When their 73-year-old father, ruler of Dubai, gave them more responsibility, Sheikh Hamdan bin Mohammed Al Maktoum, 39, and brother Sheikh Maktoum, 38, each created a niche. They face the task of defending Dubai’s position as the Middle East’s leading business hub amid competition from regional rivals and international scrutiny in the wake of Russia’s Ukraine war.

“Think of it like a company,” says Nasser Al-Shaikh, the former chief financial officer of Dubai, who helped lead the emirate through the 2009 debt crisis. “Hamdan is the chairman and Maktoum is the chief executive officer. Hamdan is the face of Dubai and the crown prince, but decisions on all matters are made after consultation between the two brothers.”

Sheikh Hamdan, the charismatic crown prince and heiress, is chief marketing officer in a city built on glamor and its ability to attract capital and millions of tourists. Sheikh Maktoum is proving to be the key to Dubai as a financial market this year as he calls for spearheading the emirate’s vast state-owned enterprises. He’s been part of a push to sell shares to investors – most recently, road toll operator Salik this month – and has occasionally convened company executives to talk about their numbers.

Beyond financial markets, Dubai is under pressure to rein in illicit cash flows, while the energy crisis may have created an impetus for oil revenues in the United Arab Emirates. but in the long run will push the world away from fossil fuels.

The brothers – who were born a year apart from the same mother – also need to maintain a delicate balance of power within the UAE. That came after the Dubai leadership persuaded Abu Dhabi to refocus on business and the economy and focus less on foreign policy, leading to military skirmishes in conflicts spanning from Yemen to Libya and Turkey. Meanwhile, Saudi Arabia poses another challenge with its desire to compete with Dubai as a magnet for foreign investment and talent.

The two rarely speak in front of the media. The Dubai Media Office said it was unable to schedule interviews within the given timeframe and declined to comment further.

Sheikh Hamdan has a nickname Fazza, Arabic for one who rushes to the aid of another. He was appointed crown prince in 2008, bypassing an older brother Sheikh Rashid, who died in 2015 at the age of 33.

While his social media accounts Sheikh Hamdan also has a more formal image of government business, Sheikh Hamdan has also been featured as skydiving, climbing, horseback riding or standing atop the world’s tallest tower. He has 14.6 million followers on Instagram – which is more than the population of the UAE – and mingles with people in shopping malls and restaurants in Dubai, continuing his image of a leader. approachability his father cultivated as he prepared for his future role.

Hamdan accompanies his father to most meetings with other rulers in the kingdoms of the UAE and chairs 22 members of Dubai Executive Council, which includes his brother. The Council’s website says Hamdan is “characterized by a youthful and dynamic personality” that has helped him build relationships with the people of Dubai. He is also the chairman of the emirate’s sovereign wealth fund, Dubai Investment Corporation.

Maktoum, meanwhile, was described by the council as having “characteristics of an ambitious young leader”. He became the focus of attention when he was appointed finance minister for the UAE in September 2021 following the death of his uncle. The dizzying sales of shares by highly regarded state-owned companies have long brought him to the attention of investors. For years, they have called for the listing of state-owned companies to boost the Dubai stock market.

Sheikh Maktoum is currently playing the role posed to him, which is a defined and technical role,” said Sheikha Najla Al Qassimi, senior research fellow at Dubai Center for Public Policy Research, B’ huth, who was also a UAE ambassador, said. “Sheikh Hamdan’s role as crown prince is more political. He’s very popular with locals and tribes alike, and is able to connect with and engage Dubai’s large expat community.”

This year’s public listing was the start of a frenzy as a total of 10 state-owned companies offered shares to investors. Sheikh Maktoum helped propel through the sale of a stake in the main utility company, the Dubai Electricity Authority, which, along with business district operator Tecom Group, raised more than $6 billion in total.

In September, investors bought all the shares offered for sale in road toll operator Salik, and Dubai scaled up the sale. Transactions, coordinated by Goldman Sachs Group Inc. and Merrill Lynch among others, designed to raise $1 billion.

“As the financial hub of the region, Dubai’s market does not fully reflect that situation,” said Mohamed Abu Basha, head of macroeconomic research at Egyptian investment bank EFG Hermes. “If you want to push the Dubai story further, you need to keep pushing this IPO which I think is long overdue.”

Sheikh Maktoum has also focused on corporate governance. As head of the government’s audit department, he has always had a hawkish view of the finances of state-controlled entities in Dubai, some of which are at the root of financial troubles. main city of Dubai more than a decade ago. The focus makes sense – he’s one of the key officials tasked with monitoring the city’s finances.

Since taking the helm of the Financial Auditing Authority, the royal family has ordered financial investigations into several state-owned companies on suspicion of possible corruption, people familiar with the matter said. , declined to say in the file about the confidential discussions. He kept his formal meetings short, serious and to the point of being, they say, in an area where lengthy tea-time chats often preceded work.

An executive at a Dubai-owned business said he was surprised to receive a call from Sheikh Maktoum’s office about summoning him. When he arrived at the office, he was instructed to have Sheikh Maktoum walk a few moments later with a water bottle in hand. He immediately started going through some of the transactions, asking for details and reasons.

Unconcerned about the meeting, the executive began anxiously accessing his files before being relaxed by police, he said, declining to be named when talking about a private meeting. When he left, Sheikh Maktoum passed on his direct phone number.

A banker said Sheikh Maktoum, who also serves as Dubai’s deputy prime minister and deputy prime minister, is known to always ask for updates on specific projects late at night or on weekends.

“There has been a positive shift on the UAE stock exchanges since Sheikh Maktoum took over,” said Tarek Fadlallah, head of Middle East business at Nomura Asset Management. “That certainly helps as he’s the son of the ruler of Dubai and he’s from the generation comfortable with rapid change.”

Sheikh Maktoum’s aim was to ensure that Dubai’s 2009 crisis, when it requested a $20 billion bailout from Abu Dhabi, would not be repeated. When Sheikh Maktoum was in his 20s and Dubai was on the verge of default, he met with Al-Shaikh, the chief financial officer at the time, to get a detailed look at the financial situation.

Al-Shaikh said: “He asked me to sit with him and manipulate him through the numbers. “He wanted to know exactly where the stress points were and what caused them.”

Dubai now faces new obstacles. Earlier this year, the UAE was added to the so-called ‘gray list’ of the Paris-based Financial Action Task Force, revealing the Gulf state’s shortcomings in tackling illicit funds. France. Since then, the UAE has said it will increase extradition agreements.

Since Russia’s invasion of Ukraine, international scrutiny of how Dubai handles illicit finance has increased. Politically, the UAE maintains relations with Russia. UAE officials have privately said that the country will comply with international sanctions.

Saudi Arabia’s opening up under its de facto millennial leader, Crown Prince Mohammed bin Salman, is also starting to attract foreign talent that would normally have come to Dubai.

The UAE has responded with efforts to make the country more attractive to foreign companies and to encourage newcomers to delve deeper into their origins. It defines the status of unmarried couples living together, allows foreigners to marry, divorce and use the inheritance laws of the host country, and removes the requirement for a drinking license. It also removes the need for local partners to start a business. It initiated long-term visa schemes and selectively opened the door to UAE citizenship, a rare move in the Gulf region.

How Dubai navigates the next chapter will come down to the dynamism between the two brothers as Sheikh Hamdan eventually succeeds his father as the face of the city, while Sheikh Maktoum solidifies his role as a man. Mr. number.

When Sheikh Maktoum was first appointed, “there were a lot of low expectations,” said Jim Krane, author of the 2009 book. The Golden City: Dubai and the Dream of Capitalism. “He is of the indeterminate type. But he is emerging very prominently thanks to the strength of his personality and his willingness to participate. “

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