SMEs in India are more domestic in nature.
SMEs in India are more domestic in nature.

Small businesses can take shelter



With the threat of a second global downturn looming large, both small businesses and investors have a lot to lose.

Financial Fallout: Read The National's coverage of the global economic chaos

World view bleak but picture looks brighter in the Middle East Declines in markets are raising the likelihood of another global slowdown. If the world does lurch back into recession, economists say the MIddle East is in a better position to weather the economic storm. read article

Local tourism and retail at some risk Consumer spending is expected to remain buoyant across the Middle East should there be another economic slowdown across the world. Read article

UAE banks proactive on mortgages UAE lenders are starting to aggressively target homebuyers for the first time since US mortgage defaults sparked the 2008 global meltdown. read article

Asia may put GCC on slippery slope An economic slowdown threatens fuel demand, but Opec is likely to act if oil prices far too fall. read article

Threat to US and EU but Gulf set fair Financially, the region is in a better position to weather storms. read article

Small and medium-sized enterprises (SMEs) tend to be more sheltered than large companies, but they also have fewer resources to deal with downturns, says Dipak Jain, the dean of the Insead international business school headquartered in France.

"Big businesses have very big reputational risks, given their size. Small businesses in that sense are different; they react differently."

Those in large markets such as India are likely to fare better than those in smaller, more established economies.

"SMEs in India are more domestic in nature as there is a vast domestic market in India," says Vishnu Deuskar, the managing director of Salvus Strategic Advisors, which has branches in both India and the Emirates.

In the UAE importers of materials priced in currencies not pegged to the dollar could suffer as the greenback weakens. But they are unlikely to be squeezed by higher interest payments on loans.

"I don't think credit will become more expensive [if there is a second downturn]. There is already quite a gap between the cost of interbank funds and lending rates," says Mr Deuskar.

However, interest rates could rise if a major UAE company defaulted on its debt.

"This would have the trigger effect of raising interest rates the same way as if that were to happen in the US," says Rupert Connor, of Acuma Wealth Management in the UAE.

People should start stockpiling at least a year's worth of savings in case they lose their jobs, says Vince Truong, a financial planner in Dubai.

Small-time investors should revisit their portfolios to make sure they are diverse as possible.

Those with stock-heavy portfolios should consider investing in different assets, such as emerging market bonds not pegged to the dollar.

"Say the US dollar continues to depreciate … the ones not pegged to the dollar will strengthen as the dollar weakens," says Mr Truong.

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Election pledges on migration

CDU: "Now is the time to control the German borders and enforce strict border rejections" 

SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom" 

Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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 there

The flights

Flydubai operates up to seven flights a week to Helsinki. Return fares to Helsinki from Dubai start from Dh1,545 in Economy and Dh7,560 in Business Class.

The stay

Golden Crown Igloos in Levi offer stays from Dh1,215 per person per night for a superior igloo; www.leviniglut.net 

Panorama Hotel in Levi is conveniently located at the top of Levi fell, a short walk from the gondola. Stays start from Dh292 per night based on two people sharing; www. golevi.fi/en/accommodation/hotel-levi-panorama

Arctic Treehouse Hotel in Rovaniemi offers stays from Dh1,379 per night based on two people sharing; www.arctictreehousehotel.com