Why is the UAE feeling so optimistic?
Posted on 10 November 2009 with no comments from readers
UAE consumers have been revealed as the most optimistic in the region, and well above the global average in the latest Nielsen Consumer Confidence Index. India, Indonesia and Norway are the most optimistic nations, Latvia and Japan the most pessimistic.
Nielsen says that worries over job security in the UAE have dropped since its survey in April, although three-quarters of respondents still believe the nation is in a downturn.
Visionary leadership
A bold speech by Dubai Ruler and Prime Minister of the UAE, His Highness Sheikh Mohammed bin Rashid Al Maktoum yesterday encapsulated the national vision that supports confidence among business leaders.
Sheikh Mohammed agreed that the global financial crisis and real estate crash had led to a reassessment of the way forward. But it had also shown the strength of the UAE federation with Abu Dhabi and Dubai working in concert to lessen the impact of the crisis.
What lies ahead is a campaign to take full advantage of the extensive urban infrastructure completed during the boom. The debts can be refinanced and expansion will now be at a slower pace.
UAE residents can see that this means jobs will still be available, even if they do not pay quite so well as in the boom years, and that housing costs will be much lower for an extended period. Meanwhile, there will be a great many new facilities to enjoy and make daily life easier like the Dubai Metro.
Over the next 12-18 months a whole slew of new hotels will be launched, and next summer the new Al Maktoum International Airport will open, set to be the world’s largest. Then there will be the tallest building in the world, the Burj Dubai, to open on January 4th. These launches will help support employment and local business confidence.
Paying debts
At the same time the refinancing of debts and clearing of unpaid invoices will continue as the UAE unwinds the impact of the global financial crisis and real estate crash. Villa prices are already up in Dubai.
You have to wonder too what the global stimulus spending by governments is going to do to the oil price over this period. Oil has already rebounded to a very healthy $80 a barrel and could be heading higher if global economies continue their tentative recovery.
If a side-effect of global financial rescue packages is much higher oil prices then the UAE will benefit strongly, and this could be another explanation for why the UAE is feeling so optimistic at the moment.
But do not get too carried away with consumer confidence as a predictor of the future. UAE consumer confidence was at a record high last year just before the crash.
no Comments posted by readers:
it would be interesting to see the breakdown between dubai and abu dhabi