If the UAE was not running a large fiscal deficit this year then the collapse in oil prices would have already plunged the nation into a deep recession.
You don’t need to be a mathematical genius to see that oil used to represent about a third of national income, and with its price down by 60 per cent, that’s a black hole. However, by drawing down on savings accumulated in one of the world’s largest sovereign wealth funds in the good years, it has been possible to not only avoid a recession but to keep GDP growth running at around 3 per cent.
The question for 2016 is can this continue? That depends on two things: the political will of the leadership which is not in any doubt; and the global economic environment for 2016, about which many observers have considerable concern.
Looking back to the last global economic crisis and how it affected the UAE, there are some disturbing parallels. The credit bubble of 2008 is somewhat evident again. The National has reported recently on mounting debt problems among individuals and SMEs. Traffic is bad. Too many Ferraris on easy credit perhaps.
That said, the prompt action taken by the government in late 2013 to prick what could have become another real estate bubble like we saw in 2008 has been effective. The local housing market has cooled down without coming to a complete stop, as it did in 2009.
There should be no repeat of the 60 per cent house price falls of that year, as what has not gone up does not need to come down.
So a combination of pre-emptive action to control the real estate market, and a willingness to dig into national savings to keep the show on the road, is keeping the recessionary wolf from the door.
However, the UAE built its recovery from the last global economic crisis on three pillars: trade, tourism and transport. Think the free zones of Dubai, the expansion of hospitality across the emirates, and the huge investments in Etihad, Emirates airline and the airports.
The UAE is the most open economy in the region. But such openness has a downside as it leaves the nation vulnerable to downswings in the global economy. In 2009, by my own calculations from official data published at the time, Dubai’s trade crashed by 40 per cent in the first half of the year under the pressure of the double whammy of a real estate slump and global financial crisis.
Could we see anything like that happen again in 2016? There are some significant warnings. What else are we to make of collapsing trade figures in Asia? The last Chinese data showed imports down 22 per cent and exports by 7 per cent.
The chief executive of Maersk, one of the world’s leading shipping lines, said recently that the downturn is very much worse than any-thing being talked about by most economists. The hard landing of the Chinese economy predicted to be equivalent to “Dubai in 2009 x 1,000” by the hedge fund billionaire Jim Chanos may already be in progress.
That, after all, is the major reason for the collapse in global commodity prices, including to some extent oil. For 2016 to be at least a reasonable year for the global economy the weak US economic recovery has to be enough to compensate for China.
But can China lean on the United States for support? Could the yuan devalue sharply against the US dollar without crashing Wall Street? And anyway, how strong is a US recovery where unemployment is supposedly low but wages are not rising? Could it not be that US unemployment data is about as unreliable as the Chinese GDP series?
Both the European Central Bank and Bank of Japan have substantial electronic money printing programmes scheduled for 2016, and also want to weaken their currencies against the US dollar to support economic recovery. It is going to be a tall order in this columnists’ view. The financial system may collapse again.
For the UAE, a global economic downturn will mean fewer foreign buyers of property, less foreign direct investment, fewer tourists and a price war in the skies between the airlines. So long as the government keeps its nerve and maintains its own spending – and the reserves are there to do it, although they are not bottomless – 2016 should be a slowdown and not a recession.
One British wit once wrote: “A slowdown is when your neighbour loses his or her job, a recession is when you lose yours”, and 2016 could be that sort of year.
Peter Cooper has been a senior business journalist in the Gulf for the past 20 years.
Follow us on Twitter @TheNationalPF
Superliminal%20
%3Cp%3EDeveloper%3A%20Pillow%20Castle%20Games%0D%3Cbr%3EPublisher%3A%20Pillow%20Castle%20Games%0D%3Cbr%3EConsole%3A%20PlayStation%204%26amp%3B5%2C%20Xbox%20Series%20One%20%26amp%3B%20X%2FS%2C%20Nintendo%20Switch%2C%20PC%20and%20Mac%0D%3Cbr%3ERating%3A%204%2F5%3C%2Fp%3E%0A
The Florida Project
Director: Sean Baker
Starring: Bria Vinaite, Brooklynn Prince, Willem Dafoe
Four stars
UAE currency: the story behind the money in your pockets
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What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
'Panga'
Directed by Ashwiny Iyer Tiwari
Starring Kangana Ranaut, Richa Chadha, Jassie Gill, Yagya Bhasin, Neena Gupta
Rating: 3.5/5
Marathon results
Men:
1. Titus Ekiru(KEN) 2:06:13
2. Alphonce Simbu(TAN) 2:07:50
3. Reuben Kipyego(KEN) 2:08:25
4. Abel Kirui(KEN) 2:08:46
5. Felix Kemutai(KEN) 2:10:48
Women:
1. Judith Korir(KEN) 2:22:30
2. Eunice Chumba(BHR) 2:26:01
3. Immaculate Chemutai(UGA) 2:28:30
4. Abebech Bekele(ETH) 2:29:43
5. Aleksandra Morozova(RUS) 2:33:01
Godzilla%20x%20Kong%3A%20The%20New%20Empire
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UAE currency: the story behind the money in your pockets
Racecard
5pm: Al Maha Stables – Maiden (PA) Dh80,000 (Turf) 1,600m
5.30pm: Wathba Stallions Cup – Maiden (PA) Dh70,000 (T) 1,600m
6pm: Emirates Fillies Classic – Prestige (PA) Dh100,000 (T) 1,600m
6.30pm: Emirates Colts Classic – Prestige (PA) Dh100,000 (T) 1,600m
7pm: The President’s Cup – Group 1 (PA) Dh2,500,000 (T) 2,200m
7.30pm: The President’s Cup – Listed (TB) Dh380,000 (T) 1,400m
The Buckingham Murders
Starring: Kareena Kapoor Khan, Ash Tandon, Prabhleen Sandhu
Director: Hansal Mehta
Rating: 4 / 5
ACL Elite (West) - fixtures
Monday, Sept 30
Al Sadd v Esteghlal (8pm)
Persepolis v Pakhtakor (8pm)
Al Wasl v Al Ahli (8pm)
Al Nassr v Al Rayyan (10pm)
Tuesday, Oct 1
Al Hilal v Al Shorta (10pm)
Al Gharafa v Al Ain (10pm)
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
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.
Killing of Qassem Suleimani
More on Quran memorisation:
The finalists
Player of the Century, 2001-2020: Cristiano Ronaldo (Juventus), Lionel Messi (Barcelona), Mohamed Salah (Liverpool), Ronaldinho
Coach of the Century, 2001-2020: Pep Guardiola (Manchester City), Jose Mourinho (Tottenham Hotspur), Zinedine Zidane (Real Madrid), Sir Alex Ferguson
Club of the Century, 2001-2020: Al Ahly (Egypt), Bayern Munich (Germany), Barcelona (Spain), Real Madrid (Spain)
Player of the Year: Cristiano Ronaldo, Lionel Messi, Robert Lewandowski (Bayern Munich)
Club of the Year: Bayern Munich, Liverpool, Real Madrid
Coach of the Year: Gian Piero Gasperini (Atalanta), Hans-Dieter Flick (Bayern Munich), Jurgen Klopp (Liverpool)
Agent of the Century, 2001-2020: Giovanni Branchini, Jorge Mendes, Mino Raiola
CHATGPT%20ENTERPRISE%20FEATURES
%3Cp%3E%E2%80%A2%20Enterprise-grade%20security%20and%20privacy%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Unlimited%20higher-speed%20GPT-4%20access%20with%20no%20caps%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Longer%20context%20windows%20for%20processing%20longer%20inputs%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Advanced%20data%20analysis%20capabilities%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Customisation%20options%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Shareable%20chat%20templates%20that%20companies%20can%20use%20to%20collaborate%20and%20build%20common%20workflows%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Analytics%20dashboard%20for%20usage%20insights%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Free%20credits%20to%20use%20OpenAI%20APIs%20to%20extend%20OpenAI%20into%20a%20fully-custom%20solution%20for%20enterprises%3C%2Fp%3E%0A
