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03 Dec 2013

More than oil

Abdulfattah Sharaf

by Abdulfattah Sharaf

Chief Executive Officer, HSBC United Arab Emirates

More than oil

Destination Dubai: official forecasts suggest that the UAE will host 25 million visitors during the World Expo

The World Expo offers companies and governments a chance to share innovations and discuss issues such as the economy, sustainable development and quality of life.

For the first time, the shortlisted cities to host the event – Turkey, Brazil, Russia and the UAE – were all in the emerging markets. In November 2013 Dubai was announced as the host for the World Expo 2020. It will follow Nagoya (2005); Shanghai (2010); and Milan (2015). Planning for 2020 is already underway, since representatives from more than 180 countries will be expected to attend to demonstrate the best they have to offer in industry, science and culture.

Perhaps most importantly, the award represents a vote of confidence in the region, and the World Expo will showcase a different side of the Middle East

The World Expo, which takes place every five years, continues a tradition started in 1851 at the Great Exhibition in Crystal Palace, London. Preparations should boost investment in the UAE in the years leading up to the event. According to HSBC Global Research, Dubai is looking to spend up to USD7.1 billion on infrastructure, including the extension of the Metro. It also suggests that total spending could be as much as USD18.3 billion, including other public and private investment such as the construction of new hotels.

During the event, the influx of visitors should boost local businesses. Official forecasts suggest that the UAE will host 25 million visitors. We think that companies building new shops and leisure facilities are likely to increase imports of raw materials and machinery, increasing trade flows.

The long-term impact is harder to quantify. Perhaps most importantly, the award represents a vote of confidence in the region, and the World Expo will showcase a different side of the Middle East. The UAE has long had ambitions to diversify its economy and create new jobs in manufacturing and services alongside the successful oil and gas sector.

Dubai has encouraged the development of shopping centres, hotels and exhibition facilities. It is seeking to make the most of its geographical position between Africa, Asia and Europe to establish itself as a hub for trade and travel. It has ambitions to develop further as a financial centre. By raising Dubai’s international profile, World Expo 2020 has the potential to support activity in all of these areas and, as its slogan says, showcase the Gulf as a place for “connecting minds, creating the future”.

The UAE’s capital Abu Dhabi, which is located 80 miles West, will also benefit. The exhibition centre is actually as close to the city of Abu Dhabi as it is to Dubai. Abu Dhabi is also seeking to diversify its economy. The development of its container port to increase its involvement in international trade is underway and it is seeking to open up its financial markets. Abu Dhabi is also planning a local outpost of the Louvre, the French museum, for 2015. This will bring some of the world’s greatest art to new audiences.

As the UAE celebrates 42 years of unity, the award gives the country an added reason to celebrate. Dubai will be hoping that visitors to World Expo 2020 will find a place ambitious about its future – rich not only in oil, but also in entrepreneurship, ideas and culture.

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