A little known Gulf company led by a young executive achieved global status despite the odds, becoming one of the world's largest ports operators and an innovative developer of massive projects that helped shape modern Dubai.
A notice appeared on October 26, 1987 in a daybook sent to reporters in Manhattan: "Sultan bin Sulayem, chairman of Jebel Ali Free Zone at Dubai and trade delegation to offer American business leaders a new perspective on the Middle East," it said.
It was one of the first of many visits to the US and other western countries in the late 1980s and 1990s to tell the Dubai story.
The story was different then: Dubai was not known as a safe haven for business in the Middle East and Dubai Government officials constantly had to address the region's political instability. The Iran-Iraq war had just ended in the late 1980s, and the first Gulf War was to follow.
Little could they have known that 20 years later, what started as a small ports operation would eventually morph into a large conglomerate with property and financial assets spanning the globe.
The equation changed dramatically following the first Gulf War, when a global boom in trade and lending boosted the profits of port operators in Dubai and helped usher in the emirate's rapid rebirth into a thriving hub for business, finance and property development.
Convinced, perhaps, by the success of the ports and the elevated ambitions Dubai's leaders, international lenders and investors eagerly bet on Dubai's ascendancy.
In doing so, they played a central role in incubating a network of companies that in 2006 would be placed under the umbrella of Dubai World, the holding company which this week said it is seeking a standstill agreement from creditors as it struggles to restructure.
The kernel of what was to become Dubai World lay in its ports. Before 1991, Dubai had competing government-owned ports at Jebel Ali, west of the city centre, and the older Port Rashid near the Dubai Creek. That April, however, the Government announced that it would merge the two operators to form the Dubai Ports Authority (DPA), with Mr bin Sulayem as the chairman.
The Government invested heavily in ports throughout the 1990s and spent time and money expanding and promoting them to international firms needing a foothold in the Gulf. A raft of companies set up there, from Japanese car makers to granite tile traders, and Dubai's ports quickly became major stopover points for international shippers. Container volumes grew into the millions and Dubai by 1998 climbed up the global rankings to become one of the 10 busiest ports in the world.
Spurred on by growing competition from new ports in Aden, Yemen and Salalah in Oman, in 1999 the DPA made its first foray outside of the UAE with an agreement to manage ports in Beirut. Later that year, the DPA signed a similar agreement to run the Jeddah port. In 2000, it took over operations in Djibouti and in 2003 it moved into Visakhapatnam in India. Those foreign ports were run by a subsidiary called Dubai Ports International.
In 2001, the DPA was merged with Dubai Customs and the Jebel Ali Free Zone Authority to form the Ports, Customs and Free Zone Corporation. It was also looking to expand its international footprint, beginning a process that led to it becoming one of the world's largest port operators.
It acquired ports in Romania and then in China and Korea in 2004, followed by deals to operate ports in Argentina, Hong Kong, Russia, Australia, Belgium, France, Canada and the UK, among many other countries. Then DP World was founded in 2005 from the merger of all of Dubai's port operations.
Meanwhile, with the backing of the Dubai Government, Mr bin Sulayem began to expand into property, a business his family had been involved in for decades. In 2001, he had became the chairman of Dubai Palm Developers, a company that would later be folded into Nakheel, which would in turn become part of Dubai World.
The company was to develop Dubai's now iconic Palm islands - Palm Jumeirah, Palm Jebel Ali and Palm Deira - out of sand dredged from the Gulf to make way for bigger ships at the ports. Palm Jumeirah alone cost more than $12bn to build. Two years later, Nakheel launched the $14bn The World project, a collection of artificial islands in the shape of a world map off Dubai's coast.
Istithmar, the private equity and venture capital investment firm formed in 2003 would also become part of Dubai World. Istithmar, now known as Istithmar World, owns stakes in the luxury retailer Barneys New York and Cirque du Soleil, as well as Kerzner International, the hotels operator, and Standard Chartered Bank.
In March 2006 Dubai World was formed as a combination of three main government-owned firms: Nakheel, Istithmar and DP World. By then, DP World had acquired P&O, a major operator of ports in Asia and the US, as well as UK ferry services, and was bigger than ever.
Nakheel was making speedy progress on its Palm Islands and The World projects and had just issued a $3.52bn Islamic bond to help finance further construction. And the Dubai Multi Commodities Centre, a government-owned company that was responsible for the Jumeirah Lakes Towers development across from the Dubai Marina, was doing a brisk business. Leisurecorp, a global developer of leisure properties, was founded the same year.
It was the middle of the Dubai boom and Dubai World and its companies borrowed heavily to keep the expansion going, amassing roughly $24.27bn of debt, by an estimate from Deutsche Bank, and about $60bn in total consolidated liabilities.
The global economic crisis and the end of the property boom last year dragged prices down by up to 50 per cent in some places and left Dubai World's property companies short of revenues just as the needed cash to pay off their borrowings. Speculation earlier this year centered on Dubai World seeking to refinance its debts, but with the deadline for Nakheel's sukuk repayment approaching, sentiment shifted towards the idea that they would be paid off on time.
While DP World continues to make money despite a fall-off in global trade, the changing economic winds put Dubai World's property firms - Nakheel, the DMCC and Limitless, which was founded in 2005 - in a difficult financial position. That led in part to the announcement this week that Dubai World would seek a six-month reprieve on debt payments pending a restructuring.
@Email:afitch@thenational.ae
UAE currency: the story behind the money in your pockets
Klopp at the Kop
Matches 68; Wins 35; Draws 19; Losses 14; Goals For 133; Goals Against 82
- Eighth place in Premier League in 2015/16
- Runners-up in Europa League in 2016
- Runners-up in League Cup in 2016
- Fourth place in Premier League in 2016/17
How green is the expo nursery?
Some 400,000 shrubs and 13,000 trees in the on-site nursery
An additional 450,000 shrubs and 4,000 trees to be delivered in the months leading up to the expo
Ghaf, date palm, acacia arabica, acacia tortilis, vitex or sage, techoma and the salvadora are just some heat tolerant native plants in the nursery
Approximately 340 species of shrubs and trees selected for diverse landscape
The nursery team works exclusively with organic fertilisers and pesticides
All shrubs and trees supplied by Dubai Municipality
Most sourced from farms, nurseries across the country
Plants and trees are re-potted when they arrive at nursery to give them room to grow
Some mature trees are in open areas or planted within the expo site
Green waste is recycled as compost
Treated sewage effluent supplied by Dubai Municipality is used to meet the majority of the nursery’s irrigation needs
Construction workforce peaked at 40,000 workers
About 65,000 people have signed up to volunteer
Main themes of expo is ‘Connecting Minds, Creating the Future’ and three subthemes of opportunity, mobility and sustainability.
Expo 2020 Dubai to open in October 2020 and run for six months
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
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.”
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
About Takalam
Date started: early 2020
Founders: Khawla Hammad and Inas Abu Shashieh
Based: Abu Dhabi
Sector: HealthTech and wellness
Number of staff: 4
Funding to date: Bootstrapped
MATCH INFO
Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid
When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid
The specs: 2019 Mercedes-Benz C200 Coupe
Price, base: Dh201,153
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Nine-speed automatic
Power: 204hp @ 5,800rpm
Torque: 300Nm @ 1,600rpm
Fuel economy, combined: 6.7L / 100km
Results
5pm: Maiden (PA) Dh80,000 (Turf) 1,200m. Winner: Majd Al Megirat, Sam Hitchcott (jockey), Ahmed Al Shehhi (trainer)
5.30pm: Handicap (PA) Dh80,000 (T) 1,600m. Winner: Dassan Da, Patrick Cosgrave, Helal Al Alawi
6pm: Abu Dhabi Fillies Classic Prestige (PA) Dh110,000 (T) 1,400m. Winner: Heba Al Wathba, Richard Mullen, Jean de Roualle
6.30pm: Abu Dhabi Colts Classic Prestige (PA) Dh110,000 (T) 1,400m. Winner: Hameem, Adrie de Vries, Abdallah Al Hammadi
7pm: Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 2,200m. Winner: Jawal Al Reef, Richard Mullen, Ahmed Al Mehairbi
Handicap (TB) Dh100,000 (T) 2,200m. Winner: Harbour Spirit, Adrie de Vries, Jaber Ramadhan.
Killing of Qassem Suleimani
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950