How investment in Expo 2020 will pay off for UAE economy, burnish Dubai brand

The so-called expo effect has been a constant feature of economic commentary about Dubai and the UAE, in what has been labeled the discipline of Exponomics. (Supplied)
The so-called expo effect has been a constant feature of economic commentary about Dubai and the UAE, in what has been labeled the discipline of Exponomics. (Supplied)
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Updated 01 October 2021

How investment in Expo 2020 will pay off for UAE economy, burnish Dubai brand

The so-called expo effect has been a constant feature of economic commentary about Dubai and the UAE, in what has been labeled the discipline of Exponomics. (Supplied)
  • In return for the billions of dirhams spent on the event, UAE policymakers expect a long-term economic “legacy”
  • After the pandemic-driven slowdown in global travel, trade and tourism, staging the expo at all is an achievement

DUBAI: The UAE will take global center stage for the next six months — the duration of Expo 2020 Dubai, the extravaganza of business, technology, connectivity, and sheer showbiz that will finally get underway at a lavish opening ceremony on Thursday.

There is no doubt the expo will raise the profile of Dubai and the UAE while it is on, but in order to justify the billions of dollars that have been spent on it by the government and private sector, the policymakers expect there will be a long-term economic “legacy.”

The organizers have long recognized this and have been seeking to highlight the expected permanent shift in economic conditions ever since the UAE won the right to stage the event in 2013.

The so-called expo effect has been a constant feature of economic commentary about Dubai and the UAE, in what has been labeled the discipline of Exponomics.

The message from the organizers is that expo means, “investing in a resilient, long-term future for the UAE economy. Expo’s capital expenditure will spur wider economic impact in key sectors including construction (such as facilities and infrastructure development, and international participant pavilions), transport, storage, and communications, as well as travel, tourism, hospitality, and business services.”

Extra investment by Dubai authorities in transport, utilities, and other infrastructure will enhance economic growth in the long term, while small businesses and sustainable enterprises will also get a boost from the event.

 

 

n particular, the exhibitions and conferences industry — already a major money-spinner for Dubai — will move to the next level with the creation of the Dubai Exhibition Center and District 2020 for holding big international forums.

Expo will accelerate the UAE’s efforts to diversify its economy, support the growth of a knowledge economy and smart connectivity, as well as provide a stimulus for cultural and creative life, officials said.

Putting some hard economic and financial figures on those strategic economic policy goals has been made more difficult by the COVID-19 pandemic. In 2019, global consulting firm EY produced an assessment of the economic impact of the expo.




For Dubai, which thrives on global connectivity and travel, there was a big incentive to open up the economy as soon as possible after the COVID-19 pandemic. (Supplied)

“Expo 2020 Dubai and its legacy are expected to contribute 122.6 billion Emirati dirhams ($33.4 billion) of gross value added to the UAE’s economy from 2013 to 2031,” EY said, specifying a 1.5 percent boost to annual gross domestic product during the six months of the event, and tens of thousands of new long-term jobs created.

Critically, EY expected the event to attract 25 million visits from 190 countries, of whom 70 percent would come from outside the UAE.

Matthew Benson, EY partner, said: “Expo 2020 is an exciting long-term investment for the UAE, and is expected to have a significant impact on the economy and how jobs are created directly and indirectly.”

It is not known whether EY has updated its forecasts to take account of the most severe economic recession in decades in 2020, but independent economists are taking a rather more cautious view of the long-term economic legacy.

“The 25 million expo visits may be a tad too optimistic during an ongoing pandemic,” Nasser Saidi, a regional economics expert and Lebanon’s former economy and industry minister, told Arab News.

But he recognizes the achievement of staging the event at all after such an unprecedented slowdown in travel, trade, and tourism during 2020.

“Little did anyone envisage the scenario within which the expo would eventually take place,” he said. “Expo 2020 will be the first global mega-event to be held permitting physical entry of visitors, after the Tokyo Olympics went ahead without spectators.




People walk towards the Sustainability Pavilion, a week ahead of its public opening, at the Dubai Expo 2020 in Dubai on January 16, 2021. (AFP/File Photo)

“A successfully run event will boost Dubai’s and the UAE’s image as a global frontrunner in safely hosting large-scale events during the pandemic era. The expo will act as a stepping-stone for potential investors to buy into Brand Dubai and move businesses and families into the country.”

For Dubai, which thrives on global connectivity and travel, there was a big incentive to open up the economy as soon as possible, with the first tentative steps toward reopening taking place last summer and accelerating as the UAE’s COVID-19 vaccination campaign gathered pace.

The UAE has now given the vaccine to a greater percentage of its population than any other country in the world and has been rewarded by new optimism in the strength of its economic recovery.

The International Monetary Fund said recently that the UAE economy would grow by 3.1 percent this year, a dramatic turnaround from the 6 percent plunge in 2020. The expo will be a big contributor to that.

James Swanston, Middle East economist at London-based consultancy Capital Economics, pointed out that Expo 2020 would be a “welcome boost” to Dubai’s economy, especially in the vital tourism-related sectors.

He said: “Around a third of GDP is made up of sectors like hospitality and wholesale and retail trade, and the latest figures show that GDP contracted 10.7 percent year-on-year in the first half of 2020. More timely data points to a slow recovery. Tourist arrivals were just a quarter of their pre-pandemic level in the first half of 2021.

“Dubai has pinned its hopes on the expo to boost its attractiveness as a destination for tourists and expatriate workers. On top of targeting 25 million visits to the expo itself, the authorities have set lofty ambitions of 23 to 25 million tourist arrivals to Dubai by 2025, which would make it the most visited city in the world – for context, 16.7 million tourists visited Dubai in 2019.” 

Swanston noted that officials also hoped that one in 20 visitors to the expo would decide to reside in Dubai permanently, which would imply a near-term population increase of roughly 10 percent for the UAE as a whole.

Such considerations are especially relevant for UAE real estate, which is in the early stages of recovery from a sluggish property market that began in 2014 and still remains below that level.

Whether these targets will be met at Expo 2020 still remains to be seen. Staging such a huge event is a costly and demanding exercise, although no detailed up-to-date figures on the actual cost are available from the organizers.




Staging such a huge event is a costly and demanding exercise, although no detailed up-to-date figures on the actual cost are available from the organizers. (Supplied)

“Hosting such mega-events is usually found to be a strain on country or city budgets,” Saidi said.

“The economic case for hosting such events is based on the increase in economic activity, the rise in tourists and spending, building the intangible Dubai brand, as well as other qualitative and social impacts, like strengthening trade and business with global counterparts.

“Plus the feel-good factor, which is more important during a pandemic when trying to return to normal.”

That sentiment seems to be the consensus among “Exponomics” experts: The UAE is to be congratulated for staging the first mega-event of the post-pandemic era, with actual people, and will only enhance its reputation over the coming six months.

“The direct financial impact on the Dubai economy may be subdued by the pandemic,” Tarek Fadlallah, chief executive officer of Nomura Asset Management in the Middle East, told Arab News. “But it will leave a lasting impression on its reputation and economic development.”

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Twitter: @FrankKaneDubai


Daesh roadside bomb in Iraq leaves 5 Peshmerga dead, 4 wounded

Daesh roadside bomb in Iraq leaves 5 Peshmerga dead, 4 wounded
Updated 41 min 10 sec ago

Daesh roadside bomb in Iraq leaves 5 Peshmerga dead, 4 wounded

Daesh roadside bomb in Iraq leaves 5 Peshmerga dead, 4 wounded
  • The Peshmerga fighters were killed in the Garmian district in Iraq’s Kurdish-run north late Saturday

BAGHDAD: A roadside bomb attack by Daesh group fighters in northern Iraq killed five Kurdish forces and wounded four others, Kurdish state news agency Rudaw reported Sunday.
The Peshmerga fighters were killed in the Garmian district in Iraq’s Kurdish-run north late Saturday. Daesh militants then attacked a peshmerga post, wounding four, according to the report.
Attacks targeting Iraqi security forces, including Kurdish peshmerga fighters, are common and have been on the rise since Daesh was defeated on the battlefield in 2017. Militants remain active through sleeper cells in many areas, especially across a band of territory in the north under dispute between federal Iraq and the semi-autonomous Kurdistan Regional Government.
Militants from Daesh still conduct operations, often targeting security forces, power stations and other infrastructure.
Kurdistan Region President Nechirvan Barzani offered condolences to the families of the dead Sunday.
“The increase in the (Daesh) attacks sends a dangerous and serious message and brings forth a serious threat in the region. Therefore, further cooperation between the Peshmerga forces and the Iraqi security forces with support from the global coalition is an urgent need,” he said in a statement.
The US-led coalition to defeat Daesh announced the end of its combat mission and said troops will withdraw from Iraq by the end of December. Advisers will remain to continue to train Iraqi forces.


Israel worries Iran will get sanctions relief without capping nuclear projects

Israel worries Iran will get sanctions relief without capping nuclear projects
Updated 28 November 2021

Israel worries Iran will get sanctions relief without capping nuclear projects

Israel worries Iran will get sanctions relief without capping nuclear projects
  • Negotiators will convene in Vienna on Monday in a last-ditch effort to salvage a nuclear deal which the United States under then-President Donald Trump quit in 2018

JERUSALEM: Israel worries Iran will secure a windfall in sanctions relief in renewed nuclear negotiations with world powers but will not sufficiently roll back projects with bomb-making potential, Israeli Prime Minister Naftali Bennett said on Sunday.
Negotiators will convene in Vienna on Monday in a last-ditch effort to salvage a nuclear deal which the United States under then-President Donald Trump quit in 2018, reimposing sanctions on Iran. That led to breaches of the deal by Tehran, and dismayed the other powers involved.
Israel, which is not a party to the talks, opposed the original 2015 pact as too limited in scope and duration. Israeli leaders have long threatened military action against Iran if they deem diplomacy a dead end for denying it nuclear weaponry.
The Islamic Republic says its nuclear ambitions are peaceful.
“Israel is very worried about the readiness to remove the sanctions and to allow a flow of billions (of dollars) to Iran in exchange for unsatisfactory restrictions in the nuclear realm,” Bennett told his cabinet in televised remarks.
“This is the message that we are relaying in every manner, whether to the Americans or to the other countries negotiating with Iran.”
Few expect a breakthrough in the talks as Iran’s uranium enrichment activities have escalated in an apparent bid to gain leverage against the West.
Six rounds of indirect talks were held between April and June. The new round begins after a hiatus caused by the election of a new Iranian president, Ebrahim Raisi, a hard-line cleric.


Six Sudanese soldiers killed in Ethiopian attack

Six Sudanese soldiers killed in Ethiopian attack
Updated 28 November 2021

Six Sudanese soldiers killed in Ethiopian attack

Six Sudanese soldiers killed in Ethiopian attack

KHARTOUM: Six Sudanese soldiers were killed on Saturday in an attack by Ethiopian forces on a Sudanese army post near the border between the countries, Sudanese military sources told Reuters.
Sudan’s army said in an earlier statement on Facebook that “groups of the Ethiopian army and militias attacked its forces in Al-Fashaga Al-sughra, which resulted in deaths ... our forces valiantly repelled the attack and inflicted heavy losses in lives and equipment on the attackers.”
The army statement did not provide any details about the death toll.
Ethiopian government spokesperson Legesse Tulu did not immediately respond to a Reuters message seeking comment on the incident.


UAE orders release of 870 prisoners ahead of National Day

UAE orders release of 870 prisoners ahead of National Day
Updated 28 November 2021

UAE orders release of 870 prisoners ahead of National Day

UAE orders release of 870 prisoners ahead of National Day
  • This comes ahead of the country’s 50th National Day on Dec. 2

DUBAI: The President of the United Arab Emirates Sheikh Khalifa bin Zayed Al Nahyan ordered the release of 870 prisoners on Sunday ahead of the country’s 50th National Day on Dec. 2, according to state news agency WAM.
The prisoners, sentenced for various crimes, will also have their debts and fines paid off, the statement added.


US options when Iran nuclear deal talks resume

IAEA representative carries out in inspection at nuclear power plant of Natanz, Iran. (AFP file photo)
IAEA representative carries out in inspection at nuclear power plant of Natanz, Iran. (AFP file photo)
Updated 28 November 2021

US options when Iran nuclear deal talks resume

IAEA representative carries out in inspection at nuclear power plant of Natanz, Iran. (AFP file photo)
  • The goal is to buy some time, as Tehran is much closer to possessing a nuclear bomb than before

WASHINGTON: The United States under President Joe Biden is to resume on Monday indirect negotiations with Iran in Vienna — but is far less optimistic than in the spring about the possibility of saving the Iranian nuclear deal.
And its options to prevent Tehran from developing a nuclear bomb are limited if talks fail.

As president, Donald Trump withdrew from the international deal in 2018 and reimposed US sanctions lifted under the accord’s terms.
In response, the Islamic Republic has flouted many of the restrictions set on its nuclear program.
Biden has said he wants to return to the deal — negotiated in 2015 by then-president Barack Obama, under whom Biden served as vice president — so long as Iran also resumes the original terms.
The indirect negotiations in Vienna resume Monday after a five-month suspension imposed by Iran.
“There is room to quickly reach and implement an understanding,” a spokesperson for the US State Department said Wednesday.
But the American envoy on Iran, Rob Malley, has said that Tehran’s attitude “doesn’t augur well for the talks.”
Washington has accused the Middle Eastern nation of dragging its feet and increasing its “radical” demands — while still making progress that would bring it significantly closer to developing a bomb.

If, when talks resume, it quickly becomes apparent to the United States that Iran only wants to buy time to step up its nuclear advances, then Washington will not “sit idly by,” Malley warned.
“We’re going to have to see other efforts — diplomatic and otherwise — to try to address Iran’s nuclear ambitions,” he said.
One of the diplomatic options mentioned was a possible interim agreement.
“The Biden administration could look at a short-term deal, a limited agreement that freezes some of the most proliferation-sensitive activities in Iran in exchange for some modest sanctions relief,” Kelsey Davenport, the head of nonproliferation policy at the Arms Control Association, told AFP recently.
The goal is to buy some time, as Tehran is much closer to possessing a nuclear bomb than before.
But such a move risks provoking an outcry in Washington, among Republicans but also among several members of Biden’s Democratic Party, who would see it as too generous a concession to Iran.

“If Iran comes back to the negotiating table with a long list of demands outside of the JCPOA, the US could reciprocate” and present its own list about Iran’s role in regional conflicts and its ballistic missiles, said Davenport, using the official acronym for the nuclear deal.
But doing so would open up long and complex negotiations with an uncertain outcome.
And there is nothing to prevent Iran from continuing to develop its nuclear program during that time.

For Suzanne DiMaggio, a researcher at the Carnegie Endowment for International Peace think tank, the “options beyond restoring the deal are not great.”
“If there was a better plan out there, we would have heard it by now,” she said Friday during an exchange with reporters.
One possibility would be to increase economic sanctions, even as the Democratic administration continues to blast the Trump era “maximum pressure” approach as a failure.
Punitive measures could also target China, which continues to buy Iranian oil despite a US embargo. But Beijing is unlikely to change its stance.
US hawks opposed to the 2015 deal — and there are many, particularly among conservatives — argue that Washington should increase economic, diplomatic and even military pressure without waiting for the outcome of the Vienna negotiations.

Accused of weakness by proponents of a harder stance, the Biden administration began to toughen its approach in October, warning that “other options” than diplomacy were on the table to prevent Iran from becoming a nuclear power.
The White House did not specify what those options were, but it has clearly hinted at the possibility of military action.
However, in a noted op-ed, former US diplomat Dennis Ross said that the “routinized” reference to “other options” had become insufficient, as “Tehran no longer takes Washington seriously.”
“The Biden administration needs to put the prospect of military escalation back on the table if it hopes to make progress on the nuclear issue,” he wrote in the essay, published October 27.
Israel, for its part, has clearly embraced this option as a possibility.
But for DiMaggio, military force “will not ultimately solve the problem.
“In fact, precedent is for the Iranians to meet pressure with pressure,” she warned.
“More aggressive steps beyond sanctions, including further sabotage of Iran’s nuclear program, run the risk of resulting in a miscalculation, mistake or an escalation that cannot be managed, potentially sparking violent conflict.”