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Dubai falling short of global aspirations

30 October 2007

Paul Clarke

So is Dubai a major global financial centre (and a great place to develop your career)? Not according to a new survey.

The second report from the Global Financial Centres Index (GFCI) suggests Dubai falls outside the top 20 global financial centres and ranks behind the likes of Toronto, which is hardly known for its financial prowess.

The good news is that the desert city doesn’t have far to go before it’s in the biggish league. Dubai is ranked 22 out of 50 centres, a leap of three places on the first survey earlier this year.

Michael Mainelli, one of the authors of the report at Z/Yen Group, says it’s still early days for the emirate: “It’s been getting really good marks in terms of quality of regulation, and rates highly for banking potential, but the jury’s out for now.”

Will Dubai rival 13th-place Toronto next time the survey takes place? Maybe. The results were compiled before the landmark DP World flotation on the DIFX, which has since announced its intentions to become a top-three stock exchange. Sheikh Mohammed bin Rashid al-Maktoum has also been doing his bit for the emirate by amassing a number of infrastructure assets, as well as taking stakes in large Western companies.

In the mean time, if Dubai isn’t the place to be in the Emirates, neither is anywhere else. Bahrain and Qatar are new entrants to the GFCI and come in at 44 and 47, respectively. No other Gulf nations make it into the top 50.

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Comments (13)

  • dubai has a very long way to go. It needs to have proper laws, proper treatment of expats, rent control, and a democracy. There is simply no way a kingdom can ever be a financial centre.

    Anonymous 31 Oct 2007

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  • For the latest article:
    The sub-prime mortgage problem has created a mess for international banks;falling profits,misreable share performance, lay-offs and so on. To alleviate the pain, it's expected that the US Fed Reserve today will cut interest rates by a further 25 basis points to 4.5%. It is also expected that some GCC central banks will follow(as their currencies are pegged to the greenback). For Local banks as well as for mideast operations of international banks this move will create greate amount of liquidity taking into account that oil price is flirting with the $100. For the mideast, you don't have to have sophisticated derivatives or synthetic CDOs to invest that cash all you need is the proper channels to recive the liquidity and a computer network to pump that liquidity. The middle east has always been and will always remain about simple money management-- brokerage & private banking, asset management, and treasury.

    Anonymous 31 Oct 2007

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  • see - the middle east is about oil. which is a resource. the west is about brains and hard work. if you wish to emulate the west, emulate their society, their laws, their respect for human rights (admittedly in their own countries), their hard work and their brains. simply building lots of real estate and trying to build a shaky financial centre isn't going to build a foundation for a non oil based economy. it's all short term thinking to a problem that needs long term solutions.

    Anonymous 31 Oct 2007

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  • In relation to the comment made on the 31st October by the Anonymous person within Investment Banking. They should surely know that
    Dubai nor the UAE for that matter are Kingdoms. The only Kingdoms in the GCC region are Saudi Arabia and Bahrain.

    Dubai Anan 01 Nov 2007

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  • to Dubai Anan! Thanks for your clarification, but your comment is completely out of scope and irrelevant to the point here being discussed.

    Me 06 Nov 2007

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  • does the arab world have what it takes to makes deals happen? apparently not, look how the qatari fund backed out of JS Sainsbury despite having the money to purchase it outright, no debt needed

    qatar sucks 07 Nov 2007

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  • This is a cartoon wonderland and defies all science and economic theory. It would be apt to say all theories go down the creek. The place thrives in Name lending and the financials are as enigmatic as it can be.
    Consumer lending - This is still in 500 AD , no information sharing , no regulation, no credit bureau, poor management control. Apart from two or three banks in UAE none of them can even spell credit scoring or decision science.

    The problem is so unique in UAE 75% of the credit lossess are due to Skips , the UAE nationals or Arabs borrow to live ther life sytle and not create assets. The credit baloon is getting inflated by the day.

    Abnormal amounts and leverage is the way in UAE lending , competition is not healthy while it is Mad and sometimes eccentric.

    Gone 19 Nov 2007

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  • All quite true, but until there is freedom of work (ie get rid of the permit system) bosses hold u hostage.  therefore it remains backward as ambitious ppl won't come.  only the lazy, who know they won't be fired as long as they don't rock the boat...

    White Guy 19 Nov 2007

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  • Ever heard of the United Kingdom?

    mm 21 Nov 2007

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  • Hi sorry for interupting, but does any one know if it is safe to buy a property in Dubai. I am considering Metropolis Lofts, which is developed by the UK Capital Investment Group

    Mike 22 Nov 2007

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