One good thing about this year: it is not last year


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A prominent local economist last week accused me of being - brace yourself - upbeat. Optimism, regular readers will recall, was a dish served seldom during the 21-months this column appeared on Thursdays. Blame it on the worst global recession since the Great Depression. And given the precarious outlook that still dogs the world's largest economies, it seems likely that optimism will remain a rare treat even now that we are meeting here at the start of the week.

The economist was referring not to a column, but rather to an article I wrote last week on forecasts that the UAE's economy would grow just 2.5 per cent this year. In a developing economy such as this one, growth of 2.5 per cent is nothing to write home about. Compared with last year, when the economy came screeching to a halt and threw thousands of passengers right out of their jobs and their cars and on to flights home, 2.5 per cent looks pretty good.

So, upbeat? That hurts. I can take light-hearted, wry or even sarcastic. But optimism in this economic environment has served largely as a smokescreen for denial and inertia. Sell upbeat some place else - we're all stocked up here. There are, as I noted last week, some big problems in the kind of growth the UAE will generate this year. Most of it will come from Abu Dhabi's Government spending a rising tide of petrodollars.

That means growth is going to be centred in Abu Dhabi, instead of being balanced across the country. And it means little growth in the private sector that governments here have been trying so hard to promote as a way of weaning the economy from its dependence on oil. Private companies, especially small and medium-size enterprises, are only going to find it harder to get credit in the wake of Dubai World's decision to restructure the debts at its companies.

In light of the shock announcement on November 25 that Dubai World would ask its creditors for a standstill, analysts say Dubai is virtually shut out of credit markets. Local banks will also be more reluctant to lend. They need to set aside more cash against the possibility of big write-offs on loans to government-controlled companies. With little credit available for the Government or its biggest companies, Dubai will not be seeing much growth, economists predict.

"They need debt and without debt that stimulus goes away," said Simon Williams, an economist at HSBC. Monica Malik at EFG-Hermes is predicting that the UAE's non-oil economy will grow only 2.2 per cent this year, slower than the overall economy. To some people's minds, though, the slower growth is not all bad. Restructuring Dubai's debts will be painful and costly, but it also stands to result in a slimmed-down property industry more in tune with the post-crisis environment.

Some executives are even venturing to be, dare I say, a wee bit optimistic about a restructured Dubai. People can afford to live and do business in Dubai again. And with the property sector tamed, Dubai's growth will now have to rely on its talents as a logistics and finance hub, they say. "Good riddance to the real estate market," said Yasar Jarrar, a partner at PricewaterhouseCoopers, "It took people's eyes off what Dubai is good at: the airport, the ports."

There is still a lot of heavy lifting that needs to be done. We're long overdue now for some kind of bad-debt agency that could buy dud loans from banks so they can start lending more freely. Word was that one would have been set up by last November. Still nothing. An important hurdle was removed last week when a Dubai court allowed Barclays to foreclose on a home loan. Without the ability to take over borrowers' collateral - their homes - if they default, bad loans are worth next to nothing.

More also needs to be done to improve the climate for investors and the companies that want to raise money from them. "We need to see improvements in governance and transparency," said Marios Maratheftis, an economist at Standard Chartered. "We need to see improvements in the capital markets so that the country can handle investment flows and allocate them into efficient enterprises." Dubai and Abu Dhabi have been selling government bonds to try to create benchmarks against which companies can sell bonds of their own.

But in the wake of Dubai World's move to restructure, the cost of borrowing in international markets is likely to remain inflated for some time. One solution is to start selling dirham-denominated bonds to tap local savings. The UAE also needs to encourage bigger and more professionally run pools of private capital by promoting the creation of pension funds and insurers. Whether the UAE needs to have the kind of big stock market to which it has aspired, however, is unclear.

Steps to merge Dubai's two exchanges will end up creating, at best, a better run, middling exchange with listing standards too high for all but the biggest firms to reach. Firms of that magnitude will be tempted, as DP World has been, to list in larger markets such as London anyway. "They need to create a small-cap market for small start-ups," said Ali Khan, the managing director at Arqaam Capital. Such an exchange would allow small companies from around the Middle East with little track record to raise the cash they need to build service-oriented businesses that tap a resource that unlike oil isn't being depleted - the region's people.

@Email:warnold@thenational.ae

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Labour dispute

The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.


- Abdullah Ishnaneh, Partner, BSA Law 

The specs: 2019 GMC Yukon Denali

Price, base: Dh306,500
Engine: 6.2-litre V8
Transmission: 10-speed automatic
Power: 420hp @ 5,600rpm
Torque: 621Nm @ 4,100rpm​​​​​​​
​​​​​​​Fuel economy, combined: 12.9L / 100km

MOUNTAINHEAD REVIEW

Starring: Ramy Youssef, Steve Carell, Jason Schwartzman

Director: Jesse Armstrong

Rating: 3.5/5

Our legal consultants

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

UAE currency: the story behind the money in your pockets
While you're here
World Cup final

Who: France v Croatia
When: Sunday, July 15, 7pm (UAE)
TV: Game will be shown live on BeIN Sports for viewers in the Mena region

The five new places of worship

Church of South Indian Parish

St Andrew's Church Mussaffah branch

St Andrew's Church Al Ain branch

St John's Baptist Church, Ruwais

Church of the Virgin Mary and St Paul the Apostle, Ruwais

 

Stage 5 results

1 Tadej Pogacar (SLO) UAE Team Emirates 3:48:53

2 Alexey Lutsenko (KAZ) Astana Pro Team -

Adam Yates (GBR) Mitchelton-Scott - 

4 David Gaudu (FRA) Groupama-FDJ  0:00:04

5 Ilnur Zakarin (RUS) CCC Team 0:00:07

General Classification:

1 Adam Yates (GBR) Mitchelton-Scott 20:35:04

2 Tadej Pogacar (SlO) UAE Team Emirates 0:01:01

3 Alexey Lutsenko (KAZ) Astana Pro Team 0:01:33

4 David Gaudu (FRA) Groupama-FDJ 0:01:48

5 Rafał Majka (POL) Bora-Hansgrohe 0:02:11

The bio

Job: Coder, website designer and chief executive, Trinet solutions

School: Year 8 pupil at Elite English School in Abu Hail, Deira

Role Models: Mark Zuckerberg and Elon Musk

Dream City: San Francisco

Hometown: Dubai

City of birth: Thiruvilla, Kerala

Company Profile

Company name: Fine Diner

Started: March, 2020

Co-founders: Sami Elayan, Saed Elayan and Zaid Azzouka

Based: Dubai

Industry: Technology and food delivery

Initial investment: Dh75,000

Investor: Dtec Startupbootcamp

Future plan: Looking to raise $400,000

Total sales: Over 1,000 deliveries in three months

The Details

Kabir Singh

Produced by: Cinestaan Studios, T-Series

Directed by: Sandeep Reddy Vanga

Starring: Shahid Kapoor, Kiara Advani, Suresh Oberoi, Soham Majumdar, Arjun Pahwa

Rating: 2.5/5 

Results

5.30pm: Maiden Dh165,000 (Turf) 1,600m; Winner: Al Battar, Mickael Barzalona (jockey), Salem bin Ghadayer (trainer).

6.05pm: Maiden Dh165,000 (Dirt) 1,200m; Winner: Good Fighter, Richard Mullen, Satish Seemar.

6.40pm: Handicap Dh185,000 (T) 1,200m; Winner: Way Of Wisdom, Tadhg O’Shea, Satish Seemar.

7.15pm: Handicap Dh170,000 (D) 2,200m; Winner: Immortalised, Tadhg O’Shea, Satish Seemar.

7.50pm: Handicap Dh185,000 (T) 2,000m; Winner: Franz Kafka, James Doyle, Simon Crisford.

8.25pm: Handicap Dh185,000 (D) 1,200m; Winner: Mayadeen, Connor Beasley, Doug Watson.

9pm: Handicap Dh185,000 (T) 1,600m; Winner: Chiefdom, Mickael Barzalona, Salem bin Ghadayer

START-UPS%20IN%20BATCH%204%20OF%20SANABIL%20500'S%20ACCELERATOR%20PROGRAMME
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UAE currency: the story behind the money in your pockets
Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
Getting%20there%20
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Sole survivors
  • Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
  • George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
  • Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
  • Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
In numbers: PKK’s money network in Europe

Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010

Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille

Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm

Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year

Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”

Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners

TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013 

Inside%20Out%202
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The biog

Alwyn Stephen says much of his success is a result of taking an educated chance on business decisions.

His advice to anyone starting out in business is to have no fear as life is about taking on challenges.

“If you have the ambition and dream of something, follow that dream, be positive, determined and set goals.

"Nothing and no-one can stop you from succeeding with the right work application, and a little bit of luck along the way.”

Mr Stephen sells his luxury fragrances at selected perfumeries around the UAE, including the House of Niche Boutique in Al Seef.

He relaxes by spending time with his family at home, and enjoying his wife’s India cooking. 

UK's plans to cut net migration

Under the UK government’s proposals, migrants will have to spend 10 years in the UK before being able to apply for citizenship.

Skilled worker visas will require a university degree, and there will be tighter restrictions on recruitment for jobs with skills shortages.

But what are described as "high-contributing" individuals such as doctors and nurses could be fast-tracked through the system.

Language requirements will be increased for all immigration routes to ensure a higher level of English.

Rules will also be laid out for adult dependants, meaning they will have to demonstrate a basic understanding of the language.

The plans also call for stricter tests for colleges and universities offering places to foreign students and a reduction in the time graduates can remain in the UK after their studies from two years to 18 months.

Blackpink World Tour [Born Pink] In Cinemas

Starring: Rose, Jisoo, Jennie, Lisa

Directors: Min Geun, Oh Yoon-Dong

Rating: 3/5

Ashes 2019 schedule

August 1-5: First Test, Edgbaston

August 14-18: Second Test, Lord's

August 22-26: Third Test, Headingley

September 4-8: Fourth Test, Old Trafford

September 12-16: Fifth Test, Oval

While you're here