I am a little surprised, but pleased, to see that one of my predictions for 2017 came to pass within hours of my making it.
I wrote in this column on Monday that “President Trump’s business relationship with the Middle East will make big headlines,” and so it has already proved. US newspapers and TV have been full of reports of the increasingly close friendship between the president-elect and Hussain Sajwani, founder of one of the UAE’s most successful developers, Damac Properties.
The two men cemented their bromance at a New Year’s party at Trump’s Florida resort Mar-a-Lago, where the president-elect paid lavish tribute to the Emirati and his family.
This follows earlier contacts between the two billionaires before Trump won the presidency in November — Sajwani attended the opening of the controversial Trump hotel in Washington — and this is the latest phase of a business partnership that goes back at least 10 years.
Caution pays off
What do they see in each other? Well, from Sajwani’s side, being close to the man soon to be the most powerful in the world can be no bad thing. He has played his hand extremely shrewdly over the past year or so, since Trump’s campaign comments about banning Muslims from the US earned (deserved) opprobrium in the Islamic world.
While others said nasty things about Trump, even cast doubt on his intelligence, Sajwani held his counsel. When some Trump promotional hoarding on the ventures they share in Dubai were removed, Sajwani — maybe prompted by the contract lawyers — had them replaced within a few hours. Now he is reaping the benefit of that cautious stance.
Trump obviously sees the advantages of a business partnership with one of the most successful entrepreneurs in the Middle East. Sajwani has been called “The Donald of Dubai” by some American media, and there seems little doubt there is a genuine affinity between them, and their families.
Politically, the friendship with Sajwani may take some of the sting out of the anti-Muslim allegations repeatedly made against the president-elect, who can now say truthfully: “But some of my best friends are Muslim.”
Political stumbling blocks
But even the closest friendships can run into trouble, especially when politics is involved. Political issues relating to the new US administration present the most immediate challenge.
The storm in the US over Trump’s alleged conflicts of interest between his business career and his tenancy of the White House shows no sign of going away. He has promised to clarify his intentions in this respect, but so far there have been no definite proposals. (An announcement is promised for next week, but these promises have come and gone in the past.)
Some lawyers believe only complete divestment of his business interests will satisfy the terms of the US Constitution, and there have been signs that Trump is taking these warnings seriously. He has pulled out of business projects in Azerbaijan and Brazil, and is said to have quietly closed a handful of companies possibly tied to Saudi Arabia, which had looked like the first stages in a Trump franchise in the Kingdom, since being elected.
There has been some suggestion in DC that Trump’s UAE businesses might also feel the divestment pressure. How can a US president impartially deal with an increasingly assertive regional power like the UAE when he has a personal commercial interest in the region?, they ask.
The Trump interests in Dubai amount to two golf-themed residential developments under Damac’s Akoya brand. Though few details of the financial arrangements have been forthcoming (my calls to Damac went unanswered), they appear to be franchise deals under which Damac pays for the Trump name.
US ties
According to one recent US report, the president-elect had taken between $1 million to $5 million in payments from Sajwani’s company in this way. That is not a big sum for Trump, and he can afford to do without that revenue stream, but the financial considerations are probably secondary anyway. More important is that he would not want to be seen to be ditching his friend, Sajwani.
If Trump is forced out of the UAE by constitutional legal pressure, there could be a big upside for the Damac man. Since it pulled out of Egypt, Damac’s business has been largely confined to the GCC. Its only non-Gulf operations are now in London.
Sajwani has made no secret of the fact that he would like to do more business in the US. New York City, Florida and California are natural homes for the kind of upmarket, glitzy developments on which the Damac reputation rests. And who better to open doors in the US real estate market than the Trump clan?
The Trump-Sajwani friendship has the potential to produce big synergies, but at the moment all the upside seems to be with the Emirati. Sajwani should of course bear in mind that the course of true friendship rarely runs smooth.
• Frank Kane is an award-winning business journalist based in Dubai. He can be reached on Twitter @frankkanedubai
