A word to the wise - commerce will be Dubai's saving grace

Commerce will be the engine that drags Dubai back to full financial health.

I found myself on the Deira side of Dubai Creek the other evening, looking for a parking place near the Chamber of Commerce, and stopped for a while by the old dhow wharf to watch these beautiful ships being made ready for their trips to Basra, Bandar Abbas or Karachi.

For a while I was lost in the coming and goings on the wharf, with deckhands scurrying everywhere and bales, boxes and other cargo being loaded, when a question began to bother me: Whatever happened to "commerce"?

It's rather an old-fashioned word now, with connotations for me of merchants with bushy side whiskers in frock coats on an English dockside supervising the loading of goods on to their clippers ready for trade with the Americas or the Indies - though it could equally apply to the activity on the dhow wharf.

But we just don't seem to hear it used any more. Commerce has been replaced by the catch-all "business", which has any meaning you want to set beside it. I heard somebody recently talking about the "poppadam business", as if those delicious Indian snacks were about to become a constituent sector of the FTSE All-share Index alongside oil and engineering.

Or commerce has become a part of the world of the ghastly "entrepreneur". This word really ought to be banned. Some smart kids these days seek to become entrepreneurs in the same way others want to be film stars, rock musicians or fashion models - just for the fame of it. Little do they know the hard work and failure that awaits all but a tiny percentage of these would-be Zuckerbergs.

The decline of commerce has occurred in parallel with the growth in financial services. Some time in the 1980s banks virtually ceased to be providers of capital and investment for commerce, and became instead financial industries in their own right. "Merchant" banks became "investment" banks, underlining the shift from commerce to finance.

Whether or not that was the start of a process that led to the great financial crash of 2008 is still being debated, but I think it's irrefutable that finance has advanced over the past few decades at the expense of commerce.

That's why I found the dhow wharf such an exhilarating place. There, at least, and you could argue in Dubai at large, commerce is alive and well and doing its best to nudge ahead of finance once more.

Commerce, and its partner trade, have always been the emirate's forte. From the days when it dominated the trade route across the Strait of Hormuz, through the pearling era and down to the modern container industry, Dubai has been a commercial hub par excellence.

The financial crisis and the recession that followed it have sent Dubai back to basics, and commerce will be the engine that drags the emirate back to full financial health.

The statistics are already looking good. Last year, the first year of post-crisis recovery, non-oil trade was 19 per cent ahead at Dh905 billion (US$246.4bn), back to the peak levels in 2008 before the financial-inspired recession hit.

Intriguingly, the figures also show that trade with Iran bounced back strongly last year, with exports and re-exports rising 12 per cent to Dh27.2bn despite the stifling effect of sanctions on Iran imposed by the US. Dubai traders have obviously decided their traditional commercial ties with their neighbour across the Gulf are more important than short-term political fads.

Then, underlying the commercial theme, there were figures from DP World, demonstrating that Dubai's sphere of activity now extends far beyond the Gulf. Revenues were up 9 per cent to $3.2bn, and profits rose 22 per cent. Jebel Ali, meanwhile, still has some way to go to achieve the record figures of 2008, but it is heading firmly in the right direction.

Significantly, DP World said it had noticed no appreciable effect so far from the Japanese earthquake or the unrest in parts of the Mena region.

With regard to the commercial effect of the "Arab Spring", it looks all good news for Dubai so far. It's getting harder to find a hotel room in the city, and some property experts detect a reawakening of interest in residential and commercial property. Many in other parts of the Gulf, especially from Bahrain, are looking to ride out the uncertainty in the haven of Dubai.

If the crisis forces Dubai back to its commercial basics, it will have been worth the suffering; if the bankers wholeheartedly back the new merchants and traders, rather than the financial entrepreneurs, it will be doubly so.