UAE Wrap Up

After 10 company talks, 4 major sightseeing activities, and numerous unforgettable deep talks with fellow classmates on this fascinating country that hosted us for 10 days, we got an unique look into a very complex country. This is what I have gathered so far: I thought UAE is a dichotomy of century old religion and practicalities of capitalism. In short, UAE felt like a religious Vegas and the oxymoronic title that’s associated.

The country tries very hard to hang on to its identity drawn from its relative recent desert heritage but look around, past the myriad of skyscrapers and one will see a transformed country. One will see Islamic law rooted into how business is done (ie. Out right debt is not allowed so there needs to be some creative financial engineering to take on leverage) yet one also sees multinational corporations from the likes of Google and bulge bracket banks choosing Dubai as their gulf region home base. It’s astounding to see what the country is now; it seems to have risen from the sand, literally.

One part I loved about this trip was the access we got to companies and key individuals who are close to the pulse of the country. Through them and our very own talks amongst the class, we got to develop a more in-depth, inner working viewpoint. I also thoroughly enjoyed our talk about whether there is a bubble or in fact, UAE has done it right and is a real oasis in the desert. What will be interesting to see for the future is how the next generation of rulers in the UAE will continue the current trajectory and how the introductory of a tax system will affect what citizens expect from their government. All in all, this trip was extremely insightful and we got a wonderful chance to not just learn about the UAE but really get to experience the ins and outs of an ever thrilling country.

_DSC7512

Signing out,

Corey Lian ’16

Dubai: Flying Beyond Oil

What a thrill it is to be in Dubai. As if an indoor ski resort (in the middle of the desert) doesn’t scream extravagance, how about the two palm island sequences? We might as well throw in the artificially made islands that look like the world. The conclusion I’ve gathered from visiting Dubai was that whatever extravagance you want, you can find it at Dubai. After all, Dubai is only second to London in terms of the most number of international brands represented. I’ve lived in Los Angeles and New York, but never have I seen so many luxury sports cars in a 3 day span. It’s easy to think Dubai is just a bubble that is living off the oil reserves of Abu Dhabi, however in our visit, we saw that Dubai has so much more than just oil (read: it actually doesn’t have that much oil left anyways.)

One such success can be seen through its diversification into the airline industry. What Emirates Airlines has been able to do since it started as a tiny 3 rented aircraft airline in 1985 is simply astounding. Story is Sheik Maktoum called Sir Flanagan, an aviation expert, to start an airline within 1 year and somehow, this little airline came took flight with just 3 leased aircrafts from Pakistan airlines going to 3 destination. Today, Emirates covers 150 routes and supports 50 million passengers a year! The only thing I wish they would do differently is to have more award partners so I can use my points more often!

_DSC7292

Standing over a quarter of a mile high at the Burj Khalifa observation deck, it’s amazing to see what this 44 year old country has been able to achieve. It’s hard to believe that this shinning city used to be a small town with just two high-rises and now, Dubai is an international icon for no longer just oil, but for finance, real estate, aviation, logistics, and tourism. I wonder what’s in store for tomorrow.

_DSC6999.jpg

-Corey Lian ’16

From Gazelle to Abu Dhabi

Abu Dhabi got its name meaning “Father of the Gazelle” based on legends that some wandering gazelles led a tribe to fresh water. Our group of 32 journeyed into a complex city that was rapidly modernizing yet also hanging on tight to its traditional cultural allures. The city houses the beautiful Ethiad Towers (popularized by Fast 7’s extremely realistic scene where UAE’s very own Lykan HyperSport jumped between the towers), the Sheikh Zayed Grand Mosque showing the country’s deep Islamic root, and numerous thought leaders with their own approaches to entrench Abu Dhabi from its oil reliance.

For our first company visit, we interacted with the Strategic Office of the Abu Dhabi Crown Prince, a think tank providing independent advisory to the Crown Prince. Abu Dhabi is currently the world’s 6th largest oil producer yet Abu Dhabi but is also trying to develop it’s other strong industries such as petrochemicals and aluminum smelting. As this was the first presentation of the trip, we got a perfectly timed overview of the entire UAE including lesser known emirates such as Sharjah (which we visited in later days) and Fujariah (a strategically important location due to its location east of the strait between UAE and Iran). It was incredibly interesting to see the office’s acknowledgement of challenges the country has other than diversification, such as its lower participation rate and low efficiency rate.

As we moved on to Alsa Engineering, which focuses on pipeline construction, we saw its growth that is directly fueled by the oil prices as well as challenges such as sustaining true competitive advantages especially with increasing competition. The company spoke about competitive advantages such as all matters of the company (team, facilities, and project experience) being in-house yet  the differentiation in the pipeline industry is largely sensitive to pricing so whether or not this competitive advantage will have a large effect will be seen in the coming days. At Abu Dhabi Investment Authority (ADIA), we got an extremely unique look into a sovereign wealth fund that invests its excess oil profits into low term wealth creation. In the last 40 years, ADIA has earned 8% annual return, helping ensure the longevity of the fund. What was extremely insightful is to see their investment decision process which was deigned to be very team oriented and investments never based on one person’s opinion. For a country that is already relatively reliant on one export, this strategy was well designed to limit the risk to any one particular bad exposure.

At Strategy&, we got an overview of the entire Middle East and North Africa (MENA) region, realizing the diverse economic dynamics of the region. One striking figure was the oil price breakeven point – UAE needs oil prices per barrel to be around $76 to break even while Kuwait, for example 64, and Oman and Bahrain having significantly higher break even prices at $109 and $132.  Our final visit in Abu Dhabi was the Mubadala Development Company where we got an inside look into how the organization acts as a catalyst for Abu Dhabi’s vision of being more economically diversified; the company makes long term domestic investments in Aerospace, Tech, Energy, Healthcare, Real Estate, and Capital.

To balance our trip, here are some pictures of the ever so good looking CBS group in front of famous Abu Dhabi landmarks:

Group Ethiad-1
CBS in front of Ethiad Towers
Group Emirates Palace-1
CBS at Emirates Palace
Group Grand Mosque-1
CBS at Grand Mosque

UAE Kickoff: Past, Present, and Future

When you think about the United Arab Emirates (UAE), what pops to mind? Is it the glamour of Dubai? Burj Al Khalifa – the world’s tallest building? A top oil producing country? All of these usually come to mind but after taking a 6 week course on UAE and as I am about to embark on a 1 week journey with 30 classmates to Dubai and Abu Dhabi, I am excited to expand my vocabulary on what exactly is the UAE – especially regarding the people, the governmental intricacies, the secret to their rapid rise, what the future has in store. Let’s begin.

The United Arab Emirates is comprised of 7 emirates, Abu Dhabi and Dubai are the two largest in terms of population (~70%) and economic output. These two also hold the presidency (Abu Dhabi) and the vice-presidency (Dubai). The country is amazingly new – only 44 years old since their inception in December 1971. As for the population, this is actually a really interesting point as knowing the exact population is incredibly tricky; the official number is anywhere between 5.7 – 9.6M due to the ex-pats who move in and out of the country.

Now we got the hard facts covered, here’s a quick story of the UAE: Not too long ago, the emirates was but an empty, though beautiful, desert inhabited by nomadic tribes with sprinkles of population around fertile oases. Then the economy grew due to pearl diving and at one point in history, really dominated the global pearl market, enough to sprout growth in settlements such as Abu Dhabi. However, the pearl industry collapsed with the invention of synthetic pearls and the emirates again felt dormant in international recognition.

Today, Dubai shines the extravagance of UAE whereas Abu Dhabi gleams the culture and art of the UAE. The discovery of oil really fueled (pun most definitely intended) the growth of UAE to what we know today – the newest architecture styles, artificial islands shaped as the world’s continents, and even an indoor ski resort…in the middle of the desert! However, the news right now evolving around oil prices also show the dangers of depending too much on oil.

However, is this perhaps a blessing in disguise? Though the government has tried hard to diversify its industry to logistics, tourism, finance, etc. there is still a certain social stigma of working in anything other than oil. Now perhaps this current oil issue can really help move the population to learn from the lessons of depending too much on one resource (think pearls) and move the country on a path for sustainability. What an exciting time to be traveling to the UAE! Now to overcome this 12 hour flight…

Social Media Kickoff (1 of 1)

-Corey Lian ’16