I was born in the United Kingdom during the Thatcher era, a period of aggressive privatisation of government services. It was an unequal time as many got left standing in the rain when vast numbers of people were laid off work, while others made quick fortunes.
Twenty years later when I was at university, I became close friends with a young woman who appeared to have a bottomless bank account. As an intrigued business studies student, I found her father’s story quite fascinating, a rags-to-riches story from humble beginnings in just seven months. You see, during the Thatcher era he saw the opportunities created by this mass privatisation and organised a group of investors to take over the regional railway lines during the sell-off by the government. Within seven months he sold this for more than £800 million (Dh4.22 billion) and created a fortune for himself and an entrepreneur’s tale that will be told for many years.
Privatisation of government services has occurred in most countries across the world and has created many business opportunities for investors and entrepreneurs. Although there are clearly many cases of privatisation disasters, on the whole the consensus is that it increases competition by reducing monopoly of powers. This results in reduced cost and improved speed of services, a win for end consumers and the economy on the whole.
In February, Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, said that the emirate's government will be looking into privatising some public services, and while at this stage the specifics of this plan are yet to be revealed, the effect of this on SMEs should be analysed and assessed as time unfolds.
During the economic hypergrowth era of Dubai of 2001-07, the government of Dubai developed many businesslike semi-government entities which were used to ignite growth predominantly in the property sector. This clearly worked as intended, as was visible by the rise of the city during this period. But we have moved on quickly, and in today’s world the focus is on developing a community and improving the lives of the people who live here. This is now evidently a large part of the agenda given the new appointments of a Minister of State for Happiness and a Minister of State for Youth Affairs that were announced at the same time as the announcement for privatisation. This clearly shows a shift of emphasis and raises the question in my mind if the government will be looking to privatise the master property developers.
As a small-business owner, my primary question is how this will affect SMEs. Privatisation will open opportunities for service providers in the UAE to capitalise on. While the process of privatisation here is not yet known, one thing we can assume is that the race to win the rights to take over these government services and operations will be very competitive, and this means not everyone can have a piece of the pie. There will also be secondary opportunities that arise for businesses to support those companies that win these contracts.
However, the biggest advantage that I see to all SMEs in the long run is the implied improvement in efficiency of the overall business environment. We would all benefit from reduced time and cost for business licensing, visa processing and planning approvals, but we will have to wait to see if these services are privatised.
It is certainly premature to predict what may arise from these government actions, but one thing that is for sure is that there will be opportunities for those who think and act quickly.
As the actor Denzel Washington once said: “I say luck is when an opportunity comes along and you’re prepared for it.”
Paris Norriss is an entrepreneur and partner in Coba Education, which provides educators to schools and institutes.
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