What non-oil reliance? Dubai braces for fifth recession warning as oil prices clash
Nobody could really argue with any of this presentation, except to note that timing is everything for small business and expanding into a recession is suicidal
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The Dubai Financial Market General Index plunged 4.7 per cent on Sunday led by real estate bellwether stock Emaar Properities, and recent heath and education start-up IPO Amanat lost the most with a 12 per cent decline to below its issue price. At the same time the 450 delegates to the ‘SME Beyond Borders Summit’ in Dubai were warned to prepare for the coming recession by the winner of its lifetime achievement award.
‘I’ve been through five recessions in my 49 years in Dubai and we are preparing for another,’ he said. Delegates seemed amazed by the very suggestion of a recession in the emirate. But the 30 per cent fall in oil prices over the past five months is choking off the cash flow of the region with Friday’s slump to $66 for WTI crude underlining the grim outlook. The timing of this event was perhaps unfortunate.
The problem for budding businesses is that the prospects always appear brightest just before they dramatically dim. You want to enter business at the start of a boom, not at the top when everybody is euphoric and business about to go over the edge of a cliff.
Older hands have a point. You don’t rush to expand your business as a recession arrives. You should cut back and fire staff as quickly as possible to ensure your own survival. This is the law of the jungle and survival of the fittest, not a parlour game.
Still ‘SME Beyond Borders’ was never going to be this sort of event. Success stories and euphoria abounded. Google’s regional Mohamad Mourad explained how targeted advertising by SMEs on the web would allow them to spread ‘great story telling’. Nevermind that monopolistic Google advertising pays publishers peanuts and is slowly wiping out global media.
Secretary General of the Dubai Economic Council, Hani R. Al Hamli delivered his speech calling for globalization of local SMEs ‘beyond borders’ in Arabic, a little ironic as the language was spoken by relatively few of the multi-cultural delegates and the business language of Dubai is actually English, although helpfully a translation was placed on every table.
Expo 2020 opportunities
‘SME development is an essential topic on the agenda of Dubai’s economy and an important factor behind its success contributing 40 per cent to GDP,’ he said. ‘This comes in the light of the giant projects being launched by the Government of Dubai recently and the great victory to host the World Expo 2020.’
Mr. Al Hamli mentioned the ’so-called East-West corridor’ with the ‘emergence of clusters of developing economies from Africa to Southeast Asia, where there are rising economies that will steer the new international order’.
Nobody could really argue with any of this presentation, except to note that timing is everything for small business and expanding into a recession is suicidal. At the very least it makes good sense to try to start right at the bottom and rise up with the recovery rather than dive in over the edge. That’s how you survive five recessions to win a lifetime achievement award.
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