‘Smart’ Dubai banks on blockchain

The Smart Dubai Office held a series of demo days to discuss the progress of 14 blockchain use cases being implemented by 12 government entities across the city. (Supplied)
Updated 17 August 2018
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‘Smart’ Dubai banks on blockchain

  • The Dubai Blockchain Strategy lays out how Dubai will use blockchain to improve government efficiency
  • Blockchain promises to mean no more forlorn trips between government buildings to get the necessary paperwork in order

DUBAI: Blockchain is a technology that is both feared and revered, its potential to rip up the old order — from currencies to law — making it both a threat and an opportunity to long-established industries and institutions.

For Dubai, blockchain offers the promise to become a truly global tech leader, as Dr. Aisha Bin Bishr, director general of the Smart Dubai initiative, explained to Arab News.

The Dubai Blockchain Strategy, launched in 2016, lays out how Dubai will use blockchain to improve government efficiency, create an entire new industry based on distributed ledger technology and help other cities make similar advances.

Gulf bureaucracy has historically been a source of anguish for citizens and expats alike, the frustrations of obtaining the documentation required to gain access to state-sanctioned services and a local driving license becoming a right-of-passage among the recently arrived.

Such stereotypes are increasingly obsolete, however, as governments turn to technology to streamline processes. Having introduced numerous smart services, Dubai now aims by 2020 to become the first city where all government-related processes run on blockchain. Should Dubai succeed, 100 million documents annually will be transacted digitally, cutting carbon dioxide emissions by 114 metric tons and saving 5.5 billion dirhams ($1.5 billion) in administrative costs each year.

 

Blockchain promises to mean no more forlorn trips between government buildings to get the necessary paperwork in order, freeing up 25.1 million hours annually that could be put to better use.

“We want to give people back their time, which is the most valuable thing in life,” said Bishr. “With the realization of the Dubai Blockchain Strategy we will move the role of government to providing happiness to people.”

As Dubai’s economy grew and diversified, the amount of paperwork required to regulate industry mushroomed.

“Simple processes were getting ever more complicated. It was becoming clear there needed to be a giant solution to streamline growth from government processes,” said Bishr. “Governments believed for centuries they were achieving their objectives by fulfilling these transactional roles, which were done through a heavy reliance on manual processes and unnecessary labor and paperwork.”

Government-run Smart Dubai is leading the emirate’s blockchain strategy. Last year, it identified over 20 government use cases for blockchain that have advanced to the proof-of-concept phase.

“Once these are successful, we will roll them out across the city. These cases include daily life experiences, such as leasing or renting property, registering a student in school, obtaining a medical license, and more,” said Bishr.

Smart Dubai believes blockchain can create thousands of private-sector business opportunities in myriad sectors including real estate, health care, transport, energy, retail and financial services. Globally, the blockchain technologies market will be worth $20 billion in 2024, up from $315 million in 2015, according to Transparency Market Research.

Dubai wants to create a homegrown blockchain industry, with this year’s second Smart Dubai Global Blockchain Challenge attracting more than 200 applications from around 85 cities that showcased their best blockchain solutions that can support Dubai in implementing its strategy.

The top 17 entrants were flown to Dubai to present their proposals at the Future Blockchain Summit. In all, this year’s applications covered 53 industries.

“The idea behind this challenge is to stimulate ideas and to support startups to implement their ideas, putting them on a platform where they meet other government entities who want to use blockchain,” said Bishr.

“Several startups who came here last year for the summit have now established their company here and are working with government entities to implement their blockchain solutions.”

Dubai is working with open-source blockchain platform Hyperledger, plus Consensys, which builds programs on the Ethereum blockchain for public and private sector organizations. Consensys, whose clients include GlaxoSmithKline, has opened its Middle East and North Africa headquarters in Dubai.

“We don’t want to be plugged into only one type of blockchain, so we don’t miss any important benefits of the others,” said Bishr. “We need to be an open city with an open standard that accepts any type of technology that will fulfil our needs.”

In May, IBM teamed up with three Dubai government institutions to launch the Dubai Blockchain Business Registry Project, which promises to simplify the process of setting up and operating a business, while Smart Dubai is in talks with IBM and Consensys about building a “plant farm” in the UAE that will host all Dubai’s blockchain applications, said Bishr.

Dubai Future Foundation, chaired by Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al-Maktoum, launched the Global Blockchain Council in 2016. Today this has around nearly 50 members including du, Microsoft, Cisco, SAP and IBM.

Decoder

What is blockchain?

Feverish speculation in cryptocurrencies such as bitcoin brought blockchain into the public eye last year, but what exactly is it and why is it engendering such global excitement? According to Hyperledger, blockchain is cryptography-enabled distributed database with no central authority and no point of trust. “With blockchains, people can establish who they are and then trade items like money, stocks and bonds, intellectual property, deeds, votes, loyalty points, and anything else that has value,” a Hyperledger report said.


German economy contracts on weak foreign trade, auto bottleneck

Updated 14 November 2018
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German economy contracts on weak foreign trade, auto bottleneck

  • The third-quarter dip in GDP was the first time the economy has contracted since the first quarter of 2015
  • Investors do not expect the German economy to recover rapidly from a weak patch in the third quarter

BERLIN: The German economy contracted for the first time since 2015 in the third quarter as global trade disputes swung the traditional export growth engine of Europe’s largest economy into reverse, raising concerns that a near-decade-long expansion is faltering.
Gross domestic product (GDP) in Europe’s biggest economy contracted by 0.2 percent quarter-on-quarter, the Federal Statistics Office said on Wednesday. That compared with a Reuters forecast for a contraction of 0.1 percent.
Compared with the same quarter of the previous year, the economy grew by 1.1 percent from July to September, calendar-adjusted data showed. Analysts polled by Reuters had expected 1.3 percent.
“The slight decline in GDP compared to the previous quarter was mainly due to foreign trade developments: provisional calculations show there were fewer exports but more imports in the third quarter than in the second,” the Office said.
The third-quarter dip in GDP was the first time the economy has contracted since the first quarter of 2015.
The government had flagged a weaker third quarter last month, citing bottlenecks in the car sector stemming from the introduction of new pollution standards known as WLTP as a factor.
“Germany doesn’t have an economic problem but rather an auto sector problem. Due to the sluggish certification of cars, car production had to be noticeably reduced, with collateral damage for other sectors too,” said Andreas Scheuerle at DekaBank.
However, the ZEW research institute said on Tuesday that investors do not expect the German economy to recover rapidly from a weak patch in the third quarter.
Concerns are growing in the German economy, which is in its ninth year of expansion, about the impact of global trade disputes and Britain’s departure from the European Union.
In addition to angst about the impact of US President Donald Trump’s abrasive trade policy, German firms are concerned about instability at home where Chancellor Angela Merkel’s awkward ‘grand coalition’ has come close to collapsing twice.
Carsten Brzeski, an economist at ING, said that even though he expected the auto sector to rebound in the fourth quarter, the GDP figures for the July-September period were a “wake-up call that political stability and strong growth are by no means a given.”
“The poor export performance, despite a weak euro exchange rate, suggests that trade tensions and weaknesses in emerging markets could continue to weigh on Germany’s growth performance,” he said in a research note.
Last month, Germany’s DIHK Chambers of Industry and Commerce cut its 2018 growth forecast to 1.8 percent from 2.2 percent and predicted a slowdown to 1.7 percent next year as the economy faces mounting risks at home and abroad.