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The Real 'New Middle East'

Washington Post - By Afshin Molavi

Last month, as images of war and carnage in Lebanon filled Arab airwaves, more than 10 million Saudis joined together for a common goal. A massive political protest? No. A petition calling for an end to the fighting? Not that either. A boycott of American goods? No. So, what did 10 million Saudis -- more than half the adult population -- do? They bought stock.

For 10 days Saudis rushed feverishly for a piece of the kingdom's most ambitious development project ever: a $27 billion city that will create a seaport, an industrial district, a financial center, an education and health-care zone, resorts, and a residential area. The kingdom is no stranger to massive infrastructure projects, but there's an interesting twist here: The government won't be financing this one; that task will be up to wealthy Saudi investors, public share offerings and a high-flying Dubai-based property company.

The company, Emaar Properties, the most widely traded stock in the United Arab Emirates, also happens to be the richest real estate development firm in the world, with a market capitalization near $25 billion. It's also one of the most ambitious. On Aug. 1, as war raged, the company bought a major British real estate firm. The next day it announced an expansion into Algeria. It's building nearly 100 shopping malls in India, and retail and residential properties from Casablanca to Karachi to Kuala Lumpur. Oh, and it's also constructing what will be the tallest tower in the world, known as the Burj Dubai.

It goes on. As the headlines screamed crisis, the business pages told another story. The transport company Aramex, the first Arab firm to go public on the Nasdaq Stock Market, announced a 73 percent rise in second-quarter earnings. Bahrain-based Gulf Finance House, a leading Islamic finance bank with global investments, announced an 87 percent increase in second-quarter profit. The billionaire Saudi businessman Prince Alwaleed bin Talal, who owns nearly 10 percent of Citigroup, publicly criticized management, sending tremors through the company. And the Middle East construction boom -- mostly centered in the oil-rich Arab states of the Persian Gulf -- surpassed the $1 trillion mark.

When Secretary of State Condoleezza Rice said that the Lebanon war was a sign of the "birth pangs of a new Middle East," she was both dramatically wrong and partially right. A "new Middle East" is indeed being born, but it has little to do with Lebanon or President Bush's democracy agenda. The "new Middle East" is forming in the boardrooms of new and innovative businesses, in assertive private sectors demanding reform, in booming equity markets, cash-rich banks, state-owned investment houses and individual investors with global outlooks, and in a new generation of entrepreneurs and businessmen (and women) creating real companies with real underlying values.

The folks at the Carlyle Group see this. Last week, as "Middle East crisis" graphics flickered on our TV screens, they announced a $1.3 billion fund for investment in the region. In the past, Carlyle principally saw the Middle East as a source of funds for investments elsewhere. This time it sees the Middle East as an investment target.

Carlyle is not alone. The big investment banks -- Morgan Stanley, Goldman Sachs and Lehman Brothers -- are increasing their presence in the region, and Western private equity and hedge fund money is circling.

Of course record oil prices have helped. The Institute of International Finance reports that gross domestic product in the Gulf Cooperation Council countries -- Saudi Arabia, Oman, Qatar, Kuwait, the United Arab Emirates and Bahrain -- has grown 75 percent over the past three years, making the GCC zone the 16th-largest economy in the world. Those nations will earn half a trillion dollars this year, mostly from oil and gas exports.

GCC businesses, banks and state entities are aggressively investing across Asia. Dubai's government announced some $2 billion of investments in Pakistan. GCC investments targeted at China and India are proliferating. Malaysia and Indonesia are trendy investment spots, and investors also are pouring money into projects in Jordan and Egypt and North Africa. This brings up a new twist in the "new Middle East." The old civilizational centers -- Persia (today's Iran), Mesopotamia (today's Iraq), the Maghreb, Syria and Egypt -- are falling behind the more nimble and business-minded places such as Dubai, Qatar, Abu Dhabi, Bahrain and Oman.

That's why Egypt's economic reforms matter so much. A GCC boom coupled with cross-border investments certainly helps the region grow. But a thriving Egyptian economy would be a huge boost in the Middle East. The International Monetary Fund predicts a healthy 5.2 percent growth rate in 2006 for Egypt. The government's economic "dream team" is winning plaudits from the local private sector. A wave of Egyptian business tigers is forming. A new mortgage finance law bodes well for the future: By making homes more affordable, it could serve as the catalyst for reviving Egypt's long-suffering middle class.

And strong middle classes are the linchpin of sustainable democracies.

All of this raises a fundamental question: Are we witnessing simply a new way for elites to make more money or a lasting shift toward the kind of economic growth that will lift all boats? That's the real question U.S. policymakers ought to be grappling with, and it's the real "birth pangs" we need to be watching closely.

The writer is a fellow at the New America Foundation.



ETA Star awards Dh30m worth contracts to Dutch Foundation

Courtesy: Khaleej Times

20 August 2006

DUBAI ETA Star has awarded contracts worth Dh30 million for enabling foundation works for two of its projects The Centrium in the International Media Production Zone (IMPZ) and Al Manara located at Business Bay.

The enabling works contracts for the two projects were awarded to Dutch Foundation, which was also awarded similar contracts for ETA Star's Goldcrest Executive and Goldcrest Views-2 projects at Jumeirah Lake Towers. The enabling works on Al Manara is scheduled for completion by the first week of October this year, while work on The Centrium is expected to be complete by November.

Abid A. Junaid, Executive Director, ETA Star, said, "We are focused on ensuring that all our projects maintain remarkably high standards, and we lay particular emphasis on the foundation work that precedes actual construction. Dutch Foundation has been involved in other important projects of ETA Star and the quality of their work has certainly been up to the mark, which prompted us to award the contracts for The Centrium and Al Manara to them."

The Centrium, located on the Emirates Road at the heart of IMPZ, comprises planned one, two and three bedroom apartments, and combines elegant interiors with lush green landscapes. The four distinctive tower blocks are inter-connected by link bridges, which offer views to the landscape deck, the adjacent parks and the city beyond.

The Al Manara on the other hand, was one of the first commercial projects by a private property developer in the prestigious Business Bay. Designed exclusively to reflect style and functionality, Al Manara comprises 31 top-class office and commercial complexes, and has been designed by the renowned Singapore-based firm 'Architects 61'.

" We will soon be awarding the main construction contracts for these projects and we are confident that the projects will be completed on schedule," concluded Junaid.



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