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

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Guests jostle for selfies with the beaming leader flanked by dozens of local officials. The royal works the piece with the ease of an Instagram celebrity who is used to rubbing shoulders with superstars like footballer Cristiano Ronaldo.

A few meters behind him, blending into the crowd at an event at Expo Dubai earlier this year, stood another man who may be less visible on the city’s social scene, but whose l impact wins praise from foreign investors while keeping government business executives on their toes.

As their 73-year-old father, the ruler of Dubai, hands them more responsibility, Sheikh Hamdan bin Mohammed Al Maktoum, 39, and his brother Sheikh Maktoum, 38, have each carved out a place for themselves. They face the task of preserving Dubai’s status as the Middle East’s preeminent commercial hub in the face of competition from regional rivals and international scrutiny in the wake of Russia’s war on Ukraine.

“Think of it as a business,” said Nasser Al-Shaikh, the former finance chief of Dubai, who helped the emirate through the 2009 debt crisis. “Hamdan is the chairman and Maktoum is the CEO. 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 and crown prince, is the marketing manager of a city built on glitz and its ability to attract capital and millions of tourists. Sheikh Maktoum is proving Dubai’s key financial market this year as he leads the shots across the emirate’s sprawling state-owned enterprises. He is part of a campaign to sell stakes to investors – most recently road toll operator Salik this month – and has occasionally summoned business leaders to discuss their figures.

Beyond financial markets, Dubai is under pressure to crack down on illegal money flows, while the energy crisis may have boosted oil revenues in the United Arab Emirates, but in the longer term it will accelerate global abandonment fossil fuels.

The brothers – who were born a year apart to the same mother – must also maintain the delicate balance of power within the UAE. It comes after Dubai leaders persuaded Abu Dhabi to refocus on business and the economy and less on foreign policy which has led to military commitments in conflicts ranging from Yemen to Libya and Turkey. Saudi Arabia, meanwhile, poses another challenge with its desire to emulate Dubai as a magnet for foreign talent and investment.

The two men rarely speak to the media. The Dubai media office said it was not possible to arrange interviews in the time available and declined further comment.

Sheikh Hamdan is nicknamed Fazza, Arabic for one who rushes to the aid of others. He was named crown prince in 2008, bypassing an older brother, Sheikh Rashid, who died in 2015 aged 33.

While his social media accounts are peppered with more formal images of government business, Sheikh Hamdan has also gone skydiving, mountaineering, horseback riding or standing atop the world’s tallest tower. He has 14.6 million Instagram followers – the equivalent of more than the population of the United Arab Emirates – and mixes with people in Dubai’s malls and restaurants, continuing the image of the approachable leader that his father has grown as he prepares for his future role.

Hamdan accompanies his father to most meetings with other leaders of the UAE sheikhs and chairs the 22-member Dubai Executive Council, including his brother. The Council’s website says Hamdan “is characterized by his youthful and dynamic personality” which has helped him connect with the people of Dubai. He is also chairman of the emirate’s sovereign wealth fund, the Investment Corporation of Dubai.

Maktoum, meanwhile, is described by the board as having “the traits of an ambitious young leader”. He was brought into the limelight when he was appointed finance minister of the United Arab Emirates in September 2021 following the death of his uncle. Spearheading the sale of shares of long-prized public companies has caught the attention of investors. For years, they had been pushing for the listing of state-owned companies to boost Dubai’s stock market.

“Sheikh Maktoum is currently playing his assigned role, which is defined and technical,” said Sheikha Najla Al Qassimi, senior researcher at Dubai’s Center for Public Policy Research, B’huth, who has also served as an Emirates ambassador. United Arabs. “Sheikh Hamdan’s role as crown prince is more political. It is well-liked by locals and tribes while being able to connect and appeal to Dubai’s large expat community.

This year’s public listings are the start of a wave that is expected to see a total of 10 public companies offering shares to investors. Sheikh Maktoum helped sell stakes in leading utility Dubai Electricity and Water Authority, as well as business park operator Tecom Group, raising more than $6 billion in total.

In September, investors snapped up all the proposed shares in road toll operator Salik, and Dubai increased the size of the sale. The transaction, coordinated by Goldman Sachs Group Inc. and Merrill Lynch among others, is designed to raise $1 billion.

“As the region’s financial hub, Dubai’s markets do not fully reflect this status,” said Mohamed Abu Basha, head of macroeconomic research at Egyptian investment bank EFG Hermes. “If you want to boost Dubai’s story further, you need to continue with this IPO campaign which I think is long overdue.”

Sheikh Maktoum also focused on corporate governance. As head of the government’s audit department, he keeps a belligerent eye on the finances of Dubai’s state-controlled entities, some of which were at the root of Dubai’s financial troubles more than a decade ago. The focus makes sense – he’s one of the main officials tasked with keeping an eye on the town’s finances.

Since taking over as head of the Financial Audit Authority, the king has ordered financial investigations into several state-owned companies when he suspected possible corruption, people familiar with the matter said, declining to speak publicly confidential discussions. He keeps official meetings short, serious and to the point, they said, in a region where long tea chats often precede getting down to business.

A Dubai-owned company executive said he was surprised when he received a call from Sheikh Maktoum’s office summoning him. When he arrived at the offices, he was ushered in only to have Sheikh Maktoum walk in moments later with a bottle of water in his hand. He immediately started going through some transactions, asking for details and reasons.

Unsettled by the meeting, the executive nervously began searching for his files before being put at ease by the sheikh, he said, refusing to be identified by name when speaking of a private meeting. When he left, Cheikh Maktoum transmitted his direct number.

Sheikh Maktoum, who also serves as deputy prime minister and deputy governor of Dubai, has been known to ask for updates on specific projects sometimes late at night or on weekends, a banker said.

“There have been positive changes in the UAE stock exchanges since Sheikh Maktoum took over,” said Tarek Fadlallah, head of Middle East business at Nomura Asset Management. “It certainly helps that he is the son of the ruler of Dubai and comes from a generation that is comfortable with rapid change.”

Sheikh Maktoum’s aim is to ensure that the collapse of Dubai in 2009, when it required a $20 billion bailout in Abu Dhabi, does not happen again. When Sheikh Maktoum was in his early twenties and Dubai was on the verge of bankruptcy, he turned to Al-Shaikh, the then chief financial officer, for a detailed review of the financial situation.

“He asked me to sit down with him and pass the numbers to him,” Al-Shaikh said. “He wanted to know exactly where the stress points were and what was causing them.”

Dubai now faces new obstacles. Earlier this year, the United Arab Emirates was added to the Paris-based financial action group’s so-called ‘grey list’, pointing to the Gulf nation’s shortcomings in the fight against illicit funds. Since then, the UAE has said it will step up extradition pacts.

Since Russia’s invasion of Ukraine, international scrutiny of Dubai’s tackling of illicit finance has increased. Politically, the UAE has maintained ties with Russia. UAE officials have privately said the country will abide by international sanctions.

Saudi Arabia’s opening up under the de facto millennium ruler, Crown Prince Mohammed bin Salman, is also starting to attract foreign talent that might normally have ended up in Dubai.

The UAE has responded by working to make the country more attractive to foreign businesses and encourage newcomers to put down deeper roots. It decriminalized the cohabitation of unmarried couples, allowed expats to marry, divorce and use their home country’s inheritance laws, and removed the requirement to have a license to consume. alcohol. It also abolished the need for local partners to start a business. He launched long-term visa programs and selectively opened the door to the granting of UAE citizenship, a rare move in the Gulf region.

How Dubai navigates the next chapter will depend on the dynamic between the two brothers as Sheikh Hamdan eventually succeeds his father as the face of the city, while Sheikh Maktoum cements his role as the numbers man.

When Sheikh Maktoum was first appointed, ‘there were pretty low expectations,’ said Jim Krane, author of the 2009 book City of Gold: Dubai and the dream of capitalism. “He was kind of an unknown. But he emerges so well through the strength of his personality and his willingness to get involved.

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