An Introduction to the UAE: Abu Dhabi

Tuesday marks the halfway point for Global Immersion UAE, where we made the hour long drive from Abu Dhabi to Dubai. As the work week here actually starts on Sunday’s, we were able to fit in several different company visits; it also helps that the city of Abu Dhabi within the emirate of the same name, is actually fairly small. At most, a drive across the city will take thirty minutes. Our itinerary included a variety of different companies – though as we learned, they are almost all linked by the presence of government financing. Our first stop was Mubadala, a holding company with several different industries in their $60 billion portfolio. For instance, the company started with just Dolphin Gas, a subsea pipeline, but has expanded to include renewables, real estate (The Galleria), and healthcare (The Cleveland Clinic partnership). Later in the afternoon we went to Al Maryah, the new home of Abu Dhabi Global Market, which sits above The Galleria and across from The Cleveland Clinic. There we were introduced to the tradition of Arabic hospitality, welcomed into an atrium complete with coffee, tea, fruit, pastries, local dates and photographers accompanying the executives. After nearly thirty minutes of mingling we were ushered into an auditorium for a presentation by the heads of strategy, risk and regulation, and most interestingly, the chairman Ahmed Ali Al Sayegh. As we would hear in later company visits, Abu Dhabi is trying to diversify away from oil and gas – while we continue to have some skepticism on this point, we did agree with their statement that “if you’re going to build a global, diverse services sector, a financial market is very important.” Thus, the (delayed) rush to get the Abu Dhabi Global Market up and running. ADGM sits within a financial free zone established in 2004 nationally, but only formalized in Abu Dhabi in 2013. Here they created their own English Common Law court system, operate outside of local sharia law, have zero (corporate and personal) taxes for 50 years, and have no restriction on foreign ownership (otherwise max 49%). The area, Al Maryah, is its own physical island (one of several in Abu Dhabi) and is twice the size of the Dubai International Finance Center. When asked if they see the DIFC as competition, they declined and said it is about collaboration, but the answer felt incomplete – likely due to the presence of the chairman. It will be interesting for us to follow the development and launch of the ADGM as they start registering companies, to see if there is a shift of companies from Dubai or other financial centers.
It’s hard not to want to rehash all of my notes here, as we had so many interesting presentations and Q&A sessions across the three days. One of the most interesting visits was with Khalid Al Ameri, a fellow MBA and columnist at The National. While still taking pride in his country, Khalid was refreshingly open and insightful in his presentation and answers to our questions. Then there was Alsa, a pipeline engineering company headed by our TA Rami Arbid’s father. Another was Takreer, the national refining company, IRENA, an international renewable energy research center, and Aldar, the main developers of Yas Island, Raha Beach, with 77 million square meters of Abu Dhabi land assets in total. Outside of Alsa, all of these companies are government subsidized and thus essentially government controlled in our American free-market opinions; while top level executives are generally western expats, the board of directors and chairman are all local Emiratis. On the bus we discussed that it seemed like this would make for an interesting dynamic – how much influence did the government have? Would these companies be self-sustaining without government backing? It was hard to get clear answers, both because we didn’t want to be rude in our questioning, and our hosts usually skirted the topic in general. After a quick stop at Ferrari World (fastest roller coaster in the world!) and Yas Island Water Park, it was off to Dubai!

Global Immersion UAE visits Alsa Engineering & Construction
Global Immersion UAE visits Alsa Engineering & Construction
The Guggenheim Museum in Abu Dhabi
The Guggenheim Museum in Abu Dhabi

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