Even a humid August evening could not stop the teams of workers at Dubai Creek.
They hauled Japanese television sets, Chinese electric fans and boxes of Nescafé instant coffee on board dozens of hulking wooden dhows lined up on the quayside.
From there, the blue-painted vessels were getting ready chug out from the Creek to places as diverse as Yemen, Iran and Somaliland. Dhow captains compete for space with freighters, container ships and oil tankers on journeys that can take days.
It used to take some dhows 40 days to get their cargo loaded. Today it takes three to five days
Mahmood Amin,
Marine Agency for Wooden Dhows
The Creek has been one of the centres of this dhow trade for centuries.
But while the future once looked uncertain for these creaking wooden ships, Dubai has begun to revitalise the trade.
The Ports, Customs and Free Zone Corporation (PCFC) in 2020 established the Marine Agency for Wooden Dhows to rejuvenate and regulate use of the vessels.
The agency sought to streamline entry procedures, connect dhows to traders more easily and give them better facilities.
Two years on, the number of commercial wooden dhows that entered Dubai increased to more than 2,500 in the first three months of the year ― up from 2,200 in the same period in 2021, PCFC reported in May.
Mahmood Amin, chief executive of the agency, told The National on Wednesday how it works.
“It used to take some dhows 40 days to get their cargo loaded,” Mr Amin said.
“Today it takes three to five days. This speeds up the frequency of dhow journeys and they can make multiple trips in a month rather than one,” he said.
Now, they can just crane cargo on and off the dhows easily, as opposed to loading a full container, which requires sign-off on a host of checks and regulations.
“The [crews also] used to [have] problems,” Mr Amin said.
“They didn’t know where to go and how to do things. The agency was established to solve these problems.”
Dhows, a generic name for traditional Arab sailing vessels, were traditionally two-masted boats with a distinctive lateen sail.
They use diesel engines now but can still be distinguished by the large cabin that squats at the stern, flat deck, bow that curves upwards and freewheeling crews that sleep, cook and pray on board.
They are also getting bigger. Mr Amin said vessels between 1,500 and 3,500 tonnes are now common, as well as the regular 600 to 800-tonne boats of old.
Much of the trade in Dubai is re-export, with the wholesale markets on the Creek at Deira drawing dhows and traders from across the Middle East and North Africa.
The agency also established a digital marketplace and smartphone application to connect them.
Owners can see what goods they need, while traders can pinpoint the dhows that have space as well as their routes.
Mr Amin said it was like the “Careem or Uber” of the dhow world.
According to Mr Amin these dhows can be more cost effective, need less red tape to operate and can be easier to load and unload because of the mix of cargo onboard.
“From here to Somaliland it has half the cost of going by a modern container ship."
The agency also ensures safety on board and makes sure all dhows have fire extinguishers, insurance certificates, lifejackets and proper generators.
“There was a lot of talk that one day these dhows would be stopped,” Mr Amin said.
“But luckily [trade] has increased a lot. It is unbelievable.”
Dubai has now become a regional hub for these wooden vessels at three wharfages: Dubai Creek, Deira and Al Hamriya. Dubai Creek, however, is where it all started.
And back on the quayside, it was close to sunset but there was no respite for crews. They mopped their brows, wrung out their soaked shirts and then went back to work loading the boats.
“All this is being loaded now,” said a security guard watching over the stacks of goods getting ready to be hauled on to the boats.
“Busy, always busy.”
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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