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minute break through.

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That's all the sport for now.

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Dubai made its name as a global hub

or trade and travel and for tourism.

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It used the proceeds of oil to

transform its economy. But as that

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trade shifts from West to East, what

does that mean for the economies of

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that region? IV Gulf country is

ready for life after oil? -- Are

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the. We will find out in this week's

Talking Business.

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Located between Asia and Europe, the

United Arab Emirates has been a

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natural hub for international trade.

From the old wooden dowells that

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still ply the waters of the Gulf to

the vast containerships of cargo

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from around the world. This port in

Dubai and also the 17 million

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containers a year. That is expected

to ship 22 million next year. These

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containers used to travel from east

to west. Full of goods made in Asia

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are like cars, computers, and

clothes. But a shift in global

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demand means a change in direction.

Asia and China in particular are

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booming markets for exporters. And

for the golf, that means oil. China

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is now the world's largest importer

of Middle Eastern oil. But the

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booming economy means goods and

services as well. And most of those

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passed the reports like this. So,

let's talk about some of those

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issues raised. With me is the

president of the US- UAE business

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council responsible for business

links between the two countries.

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This is the Chief Executive and head

of trade and finance. One of the

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biggest transporters of shipping

containers. And the president and

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Chief Executive of GE Gulf,

responsible for strategy here in the

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Gulf. Welcome. And for joining us.

Perhaps I could start with you. You

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have a great insight into where

trade is coming from and where it is

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going to. What does the data tell

you about how it is changing?

Global

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trade has been consistently growing

steadily since World War Two. The

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past few decades have seen a real

exponential growth. The last 60

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years has led to this, and low

transportation cost. Everything you

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touch from when you wake up in the

morning, a cup of coffee, going to

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bed, it has come from somewhere else

in the world. That has given rise to

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value chains. Everything consumed in

one country, parts of it or all of

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it is usually made elsewhere.

We

think of trade in terms of

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containers and goods being shipped

around the world. Many people know

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GE as the company that makes

commercial jet engines. And also

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shipping people around the world.

Where is the demand for jet engines

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telling us about where people want

to be in the world?

If you look at

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the way the economy has evolved, 40

years ago when GE first started off

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in this region, I could describe

this region as more of a recipient

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of technology. That has transformed

into a assembly and further into

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manufacturing and then research and

development and now innovation and

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inventing things that can be

exported.

If you look at the

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statistics as far as UAE and US

trade is concerned, it is

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staggering. A more than $20 billion

surplus from the US to the UAE. You

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have been doing this a while and

things must have changed.

We had a

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$25 billion surplus year in and year

on for the last 5-6 years. The UAE

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is the largest export market in the

region for the US, larger than

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India, Turkey. This is the hub as we

were talking about, with goods

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brought in and additional services

added to that before they go onto

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something else.

I want to talk

quickly about your council itself,

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the UAE US Business Council. It was

built from controversy. It bought up

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the ports of P&O that angered

people.

We started to get more

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information and statistics. I refer

to the relationship is having three

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legs added to the stool. Trade is

the most important and vibrant.

I am

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interested in this idea of the new

Silk Road from China. Certainly,

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from the leadership in China, they

want these new trade routes to be

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what does that mean for your

business?

As a shipping company, 150

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of our trade routes come through

this region. It is part of the

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diverse investment we have away from

oil. Talking about pharmaceutical,

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and getting away from conventional

oil.

Added into the mix what we have

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heard from the White House of late

about protectionism and wars going

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on, America being first. What is

that mean with trade booming in this

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region? De facto away with talk of

protectionism?

First of all, the

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trade is pretty much one-way. Not

much goes on to the UAE at this

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point We don't get much energy from

the UAE, mosque is the other way to

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China and Japan in places like that.

-- most. There is some steel and

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aluminium. We are going to give the

wall down for things going outward

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from the US to many of these

countries going forward. I worry

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about, you know, storm clouds on the

horizon, if you will in the future.

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And I think the talk in Washington,

I think the talk of protectionism

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fans the talk of protectionism

around the world in general. And

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that is the trend line I worry

about.

Do you worry about that when

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you suddenly see talk of

protectionism about those walls

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going up? Does that worry you?

The

writing on the wall is pretty clear.

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Wherever in the world we have seen

bilateral trade agreements, free

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trade practices, policies, the

growth has been much higher than the

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global economy growth rate. The

Pacific alliance, the EU, 7.5,

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Mexican trade outperforming the

largest economy, and Brazil.

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Protectionism is the reality of the

world. Fight protectionist measures

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are being rolled out by the

developing world a week. But today's

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world is about opening doors, not

closing.

We talk about the Gulf

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Cooperation Council, but in some

respects, it doesn't actually

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deliver too much in terms of

agreement. Each country is doing

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something different. Different

industries. Are they competing?

No,

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they are compliment in each other.

Even though the progress is not as

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much as we want, there is progress.

We have been at the forefront. But I

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think that has encouraged other

countries. It is a big focus area

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for Saudi Arabia and a focus area

for Kuwait etc. There is a sense of

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collaboration and each country

encouraging each other to move

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towards a certain sector.

I would

say with regard to the GCC, the

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cooperation in the past two years

has increased so they are even more

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close. The VAT added by the end of

the year is a good example of that.

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For the first time there will be a G

GCC wide new standards are being put

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in place. It is part of closer

cooperation between the GCC

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organisation.

And in today's

globalised world, it is not entirely

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up to governments and corporation

between countries to build this

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movement to the next level. It is

also for corporations and

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individuals and businesses to play a

role and make this all work

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together.

When we look at the

region, we talk about cooperation

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twin countries here. One issue right

now is the blockade as far as

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traders concerned, and politics.

What does that mean for the region?

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There's no getting around that this

is a very serious problem and it is

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a political problem which now has

economic dimensions as well. Most

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companies have found a way to be

quiet about what they're doing and

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continue the business, continue the

movement of goods and services, they

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may have changed some of the ways

and directions they're bringing the

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goods and services in but they are

doing the business that needs to be

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done to move the diversification

forward.

From a purely practical

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point of view, what does it mean for

how you operate?

Maersk is a global

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company that operates in 130

countries and it's important for us,

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like any other big corporation, but

we are totally compliant with any

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regulations or laws, and likewise in

this case, we stop moving cargo to

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and fro from Qatar, we are moving it

from elsewhere. Companies have found

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it hard to ensure business goes on

but not to the same scale, it has a

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huge economic impact as well outside

of the political.

Thanks row much

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for now.

That's how changes in global trade

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are reshaping the business landscape

in this region -- thanks row much

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for now. But what about the other

concern here, the price of oil? --

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thanks very much for now. Prices

have fallen considerably over the

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last two years and that causes

concern for the governments of this

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region that rely on it to meet their

spending commitments. So other

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governance here too reliant on oil?

I've been finding out that the

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governments here.

Many countries across the Gulf have

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been diversifying their economies

but progress has been mixed -- so

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are the governments here too

reliant. There is a gateway being

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created through aviation to Africa

and Europe. Creation of tourism,

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financial services and banking has

helped create new sources of income.

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But there are still challenges,

cutting red tape and improving

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education and skills are key. That

could determine how well economies

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here cope with life after oil.

Let's talk about some of those

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issues with my guests here today.

Maybe I can start with you,

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diversification in the region

clearly a big focus, we have heard

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announcements from various countries

in the Gulf, what does

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diversification mean for countries

here?

There's two things we could

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talk about here, emoji

diversification and economy

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diversification. For energy

diversification -- energy. Looking

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at the UAE, a country that's been

99% dependent on gas as a source of

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fuel, it has now progressed a lot in

terms of diversifying their

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portfolio, particularly around

bringing solar energy into the mix

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and coal as well with the 2.4

gigawatts Hassey and project. That

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is one aspect. The other aspect in

terms of economy diversification, a

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lot of what we had spoken about

before, which is looking at

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innovation, building

entrepreneurship, ecosystem,

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allowing for innovation not only

with trade but all sorts of services

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and the smart by initiative and

bringing digital into the day-to-day

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lives of the citizens in UAE.

Each

country in the region concentrating

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on different things, in Dubai, you

look at the tourism and financial

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services and banking, it is not easy

to compare like-for-like because all

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these countries are doing different

things but who's made the most

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progress in the Gulf?

I wouldn't

want to say that one are doing more

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progress than the other but I like

to see them as all complementing

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each other. I think there's a lot of

similarities in these countries and

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there's a lot they learn from each

other. As you mentioned, yes,

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Dubai... There's advancement in

terms of bringing digitisation,

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positioning Dubai as a smart city.

But then also in Abu Dhabi, and the

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industrialisation of the whole oil

and gas markets and the servicing of

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the oil and gas fields and being

more efficient there, driving

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efficiency there as well, and then

renewable energy, which we see also

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across the border, so you see the

demand, for example, among Saudi, a

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great place for wind technology as

well, whereas you may not have so

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many wind opportunities here in the

UAE and you see solar panels being

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flourished more here. They all come

ferment each other in a very

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cohesive white.

Danny, we heard in

that piece about how important it is

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to address some of the challenges,

those challenges being skills and

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education and cutting red tape. When

you're dealing with American

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businesses here, is it as easy as

the authorities would have us

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believe to set up and operate in the

Gulf?

It's got a lot easier. The UAE

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in particular is constantly trying

to be on the cutting edge of

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business reform because it wants to

be the place where foreign companies

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set up first to establish their

beachhead if you will in the region

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and then broaden out to other

countries as their business grows.

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The UAE makes great efforts to cut

down on the red tape but there's

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still more things that can be done.

They're working on a company

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ownership law and other measures

that will come in the years ahead,

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but the UAE and Saudi Arabia and

other countries have made great

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progress in this area and will

continue to do so.

Is that progress

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fast enough? We talk about life

after oil, we seen the big fall in

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the price of oil and revenues

falling and governments in the

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region have to balance their books,

is that change coming quickly

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enough?

It is but we have to think

about how quickly a society can take

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change and we have to make it

palatable for the people. Just 40

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years ago, I've only really been

travelling in this region for 30

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years, and 40 years ago the

difference... The economy was 90%

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dependent on oil revenue. They've

turned that on its head. Today the

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economy is 30% dependent on oil

revenue in the UAE and the

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diversification strategy has

resulted in the economy being 70% of

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all these other verticals, that's a

huge change to occur in such a short

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period. And it will continue. And

the leadership here, who has a great

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vision, will continue to work with

the people to bring them along in

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that regard but it's got to be at

the pace they can be comfortable

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with and that can be achievable. And

sustainable.

It strikes me

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diversification will be about trade

policy, about the role of a country

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in the world and how it sees either

competitors or trading partners,

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what do you see of that with your

business?

I think clearly like Danny

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said, the leadership has made it

very clear and the change has been

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massive, especially over the last

three decades. There's definitely

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manufacturing but trading has huge

potential. UAE is the third-largest

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trading hub to Singapore and Hong

Kong. Maersk themselves do about 25%

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of exports and imports into the UAE.

A good start has been made. The

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change has had different stages of

progress depending on how the change

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was brought in. I think leadership

has made there in ten very clear,

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that it has to be a diversifying

economy.

Danny, when we talk about

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the diversification of these

economies, there's always an

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underlying issue about jobs. We know

this region has a huge young

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population and finding enough jobs

for that population is going to be a

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key issue.

How do you make sure the economy

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diversifies while creating those

jobs, where will those jobs come

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from?

In the UAE what's been a great

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advancement is putting a Minister of

youth in place, it's a lady and she

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is in her early 20s. That's given a

voice to the youth of the UAE. And

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it's really incorporated into the

vision of the UAE and where we want

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to take this country next and how do

we incorporate the youth and make

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them also accountable to that

strategy? I think once you have that

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engagement and that dialogue, the

more empowerment you give to the

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youth, the more likely that you

would take them into consideration

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as you draw your employment

strategy.

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It starts with education. It starts

with education. The UAE and the

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region as a whole is really focused

on providing opportunities for their

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youth in all of these sectors and

areas going forward.

Where education

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is important, skill development is

equally as important. It is fair to

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say you're worried about how these

new technologies might be a threat

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to jobs, but if you're able to

create skills for the new age

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technologies then you create new,

different kind of jobs. Again, the

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intent in the leadership here is

very clear.

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Aviation has been a huge growth area

for countries of the Gulf, be that

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Emirates, Etihad or Qatar Airways.

We've also seen problems with the

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open skies agreement. And there's

that perception that the rest of the

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world is willing to brace the region

as long as it doesn't go too far.

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And the open skies dispute about

whether Gulf carriers could operate

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in the United States and what

landing slots it would get was a

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real issue, has that gone away?

It

hasn't gone away. The three major US

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airlines continue to lobby in

Washington for relief my continue to

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lobby in Washington for the Trump

administration to put some sort of

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restrictions on the Gulf carriers.

But I have to tell you, the real

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development came when the Gulf

carriers decided that the Indian

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market was one that they could

access and transport thousands,

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millions of Indian visitors to the

United States and Europe with one or

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two flights as opposed to having to

take three or four flights, to

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change to get all the way back to

California. That's where this really

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started. Again, Dubai and Abu Dhabi

and Doha being a hub between East

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and West.

Just this week Saudi

Arabia announced a $500 billion fund

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for a multicountry free trade area,

all sorts of industries, creating

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thousands of jobs. Does the Gulf see

that as an opportunity or does it

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see that as a huge threat? Because

someone else is doing something may

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be that they're not.

The GCC

countries want Saudi to be

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successful, they do not want Saudi

to fail. There's been a great study

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of the successes here and how they

can be educated elsewhere in the

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region. This is a huge commitment by

the new Crown Prince and its

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commitment with Egypt and Jordan

again, as you said, to make it an

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international city and it is new and

it's a big development and I think

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there's a big chance it will

succeed.

When you hear those

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announcements, or an announcement of

such scale and scope and ambition,

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what does it mean for your business?

I think it's an exciting thing, very

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exciting. For us it gives us clarity

on where these countries want to go.

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It's very important for us to

understand the needs of our

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customers. At the end of the day

these governments and organisations

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are customers.

How important is

private sector investment versus the

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support from the government? We've

seen the Saudi Arabia announcement

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will involve a lot of sovereign

wealth money but also private

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investors, large and small, how does

that makes? Do you need the boost

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from the government to get these

things going and then it falls to

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the private sector?

I think it's a

partnership and it always makes

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sense to have that healthy

partnership between government and

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the private sector. That's what

we've seen in the UAE and I think it

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would work very well in Saudi as

well.

UAE leaders say all the time

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they want skin in the game by the

international companies that come

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here, they don't want people just

coming here selling their wares,

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they want international companies to

come here, invest and be part of the

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ecosystem.

Thank you, all,

fascinating discussion. Danny, Vipul

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and Dalia, thank you for your time.

Thank you to you for watching.

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That's all we've got time for on

this edition of Talking Business,

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but we'll see you again very soon.

Bye-bye.

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