Consulate General News 2009
U.S.-UAE Business Ties Strong and Successful
The American Business Council of Dubai and the Northern Emirates welcomed Ambassador Olson to a member's luncheon on March 18, 2009 at the Murooj Rotana Hotel in Dubai. In remarks to approximately 100 representatives of the American business community in Dubai, the Ambassador highlighted the importance, strength and success of the U.S.-UAE relationship over the course of his several assignments here, discussed the effects of the global economic crisis and steps the U.S. government is taking to address it, and expressed his confidence that the UAE was well-positioned to be a regional leader for economic recovery.
Remarks by Ambassador Richard G. Olson, Jr.
To the American Business Council of Dubai and the Northern Emirates
March 18, 2009
Al Murooj Rotana Hotel
Dubai, UAE
Ladies and Gentlemen, it is good to be back in Dubai and to see many old friends from my previous time here as U.S. Consul General. It has been five and a half years since I left, and the changes since that time have been phenomenal.
The most important changes are not physical, they are in the UAE’ s place in the world. Let me describe some of the changes that I have observed, starting first at the Federal level.
Over the past five years, the UAE has truly arrived on the global map, and is now punching above its weight class, politically and economically. It has growing influence throughout the Middle East and is increasingly taking a leadership role among Middle Eastern countries. Just as a few examples, the UAE was the first GCC country to cancel Saddam-era Iraqi debt and the first to re-open its Embassy in Baghdad; it was the first Arab country to recognize the independence of Kosovo; it has been a generous donor to Afghanistan, Pakistan, Lebanon, Palestinian Authority; and is making contributions to peace through its peacekeeping forces in Afghanistan.
Our cooperation in the political core of the relationship remains strong, reflecting the fact that the UAE has been a force for moderation and stability throughout the region. We are increasingly engaged in other areas as well.
We now have very extensive cooperation in education. Most of the heavy lifting has been done by American educational institutions such as Michigan State University, Boston University Dental Health Center, the Harvard University's John F. Kennedy School of Government and the Dubai School of Government, the Rochester Institute of Technology and Dubai Silicone Oasis, as well as New York University and the Massachusetts Institute of Technology in Abu Dhabi. In addition, at the governmental level, we have had our Secretary of Education visit not once, but twice, in the past year and are supporting UAE’s program of educational reform.
In the field of culture, the world has definitely discovered the UAE, as you can see by this week’s Art Dubai, which includes a substantial American presence, next week’s Sharjah Biennale, and by the Guggenheim project in Abu Dhabi, a truly stunning showpiece, architecturally and culturally, at the prime location in the Saadiyat Island project.
Turning to the commercial relationship, much like its political, educational and cultural counterparts, the U.S.-UAE commercial relationship has grown from a core in the defense and oil sectors to encompass cooperation across a wide range of areas, and it has flourished as it has diversified.
A few numbers make the case. In 2000 U.S. exports to the UAE were $2.2 billion; in 2008 they reached $15.7 billion, making the UAE the number one U.S. export market in the entire Middle East North Africa region. That means that the UAE has surpassed the traditionally dominant markets of Israel and Saudi Arabia.
Major sectors included defense, commercial aircraft and engines, machinery, autos and food and agricultural products.
If anything, these export numbers actually understate the extent of the business relationships. They don’t fully account for a wide range of services, for example American health care management companies and educational institutions in the UAE, or the legal, architectural, engineering, consulting and other services that firms bring to this dynamic market.
Much of this success was driven by a high rate of GDP growth in 2008 (nearly 14%), and obviously 2009 will be a challenging year as the UAE is not immune to the global economic crisis. You all know better than I do the mpact that the credit crunch has had on the Dubai real estate, property development, construction sector and associate services. It has impacted many of your own business opportunities. Friends and colleagues have been let go and left the country.
While there may still be some difficult times ahead, we will get through this crisis. I can tell you that this is the highest priority, among many urgent issues, for the Obama Administration, as recent actions have demonstrated:
• President Obama’s 2009 trade agenda seeks to benefit Americans and the world by pursuing policies that reflect our respect for entrepreneurship and market competition, the environment, opportunity for all, and the rights of workers.
• The American Recovery and Reinvestment Act, worth $789 billion, will create or save 3.5 million jobs over two years, jumpstart growth, and transform the American economy to better compete in the 21st Century. It focuses on job creation in industries such as clean energy and health care, and 90% of the jobs generated will be in private sector. Its goals include doubling America's renewable energy generating capacity over three years, investing $150 billion in national infrastructure, and protecting health coverage for millions.
• In late January, Treasury Secretary Timothy Geithner announced a Financial Stability Plan to restore credit flows, reform and strengthen banks, attract private capital in order to promote renewed lending, and assist homeowners and small businesses seeking credit. The plan includes stringent standards for transparency and accountability.
• The Homeowner Affordability and Stability Plan, which is designed to provide relief to homeowners and communities affected by tightening credit and foreclosures. It will allow 7-9 million homeowners to refinance and restructure mortgages and includes more funding for Fannie Mae and Freddie Mac.
• Establishment of the Economic Recovery Advisory Board under former Federal Reserve Chairman Paul Volcker to provide independent advice and counsel to the President as he and the Administration formulate and implement plans for economic recovery.
I believe that the beginning of this recovery is a matter of "when", not "if", and when it does begin, I think we can make several predictions. It is likely to be lead by U.S. growth; the GCC countries will be among the world's best-positioned countries to recover quickly; the UAE will be at the forefront of the GCC; and the leadership of the UAE has both the wisdom and the vision to lead the region.
In Dubai, this crisis is also an opportunity. Real estate had become overheated, and now there is a necessary rationalization of projects, with the strong surviving and, when capital returns, the best projects going forward.
It is popular these days to report and write critical gloom and doom stories about Dubai and the impact of the global crisis on Dubai. We’ve all seen frightening and somewhat exaggerated stories about thousands of abandoned cars and that Dubai is a ghost town. While times are significantly more challenging than during the big boom of the last several years, I can say that having previously served in Dubai and the UAE, it would be a mistake to write off Dubai. Dubai has continued to evolve and remake itself since its establishment.
His Highness Sheikh Mohammed bin Rashid has not only proven himself to be a visionary, but also someone who can adapt and get things done; there is no doubt that progress toward his vision of Dubai will continue.
Dubai is will also continue to be a success and a leader for change and economic development in the region and the world. Dubai is, and is likely to remain, the regional business hub for the GCC, and indeed for the large part of the world within a five-hour flight from Dubai International Airport. Your companies have based you here because this is not only a profitable market to be in, but a good place to live, base your business, and raise your families.
Despite the downturn, the Dubai International Financial Center has established itself has an important and still growing regional financial and services Hub.
Dubai is without question one of the world’s leading trade show venues.
With the Jebel Ali port and the Jebel Ali Free Zone, Emirates Airlines, the soon to open subway system, and improving roads Dubai features an enviable infrastructure that will position it well for the future.
In short, as the global economy recovers and recharges regional liquidity, Dubai is poised as the region’s most globalized city to be in the forefront of that recovery.
Ladies and Gentlemen, thank you for your hospitality today.