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Rhodri Morgan, First Minister

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Visit And Trade Mission To Dubai And Abu Dhabi 13-15 May 2006
The highlight of my visit to Dubai and Abu Dhabi was the audience with His Highness Sheik Mohammed, the Ruler of Dubai and the Federal Vice President and Prime Minister of the United Arab Emirates.  His position is unusual but helps to illustrate the Federal structure of the UAE, in which each of the seven sheikdoms has delegated powers by devolving them upwards to the Federal Government including the armed forces etc but maintains a fiercely independent path in resource exploitation and economic development.

Dubai, having little or no oil and gas, started down the path some 20 years ago aiming to become the key hub initially for transport via a container port and airport and now for leisure and tourism in the Gulf region.  Abu Dhabi being better off for oil reserves, though with less than Kuwait, has the luxury of options for developing hydrocarbon resources and more latterly, diversifying into tourism and financial services.

Meanwhile, Dubai has been developing rapidly, best known to the outside world through the artificial islands in the Gulf known as Palm 1, Palm 2 and “The World”, these gigantic developments of villas, hotels and restaurants to take advantage of the year-round hot weather.  These are on the back of the development of giant container port, airport and of Emirates Airline.
To some extent the UAE is a victim of its own success with problems arising from the shear critical mass of development going on in the region.  Dubai, for instance, may only have 1.5 million people but has 25% of the world’s tower cranes installed at the present moment in constructing a huge forest of multi-story apartment blocks, office blocks, hotels, retail malls and holiday attractions of the Disney Land type.  

Hyder Consultancy Services, subsidiary of the former engineering consultancy arm of Welsh Water, appears to be doing exceptionally well in the Gulf region having doubled its staff which was already very large, since I last visited in the year 2000.

These huge tourist developments are sustained by the success of Emirates Airlines in ferrying the vast numbers of tourists to the area.  Emirates Airlines, has become a very important customer of Airbus, and indeed is virtually the launch customer for the A380 just behind Singapore Airlines.   Emirates now flies 92 times a week to the UK, which is its number one target market in Europe.  His Highness Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of Emirates explained to me during our meeting that he hopes Emirates will become the world’s largest airline over the next twenty years or so.  UK business is very important to the UAE and increasingly it is British tourists who appear to be fuelling the tourist boom in Dubai as they are more willing than other tourists to go to Dubai even in the hotter summer months from May to September, when the heat is pretty fierce, but that appears not to put off British tourists, and the development of mass tourism from the UK to Dubai.  Virgin Airlines are also now competing in the market, and a second larger (140sqkm) airport is being built to cope with amount of growth being experienced.

Although Abu Dhabi is behind Dubai in these kind of developments, it will become increasingly important indeed for business development.  It had started its own airline a few years ago, Etihad.  Etihad is already an important customer again for Airbus and of course both Emirates and Etihad, when making choices between Airbus and Boeing or between GE and Rolls Royce for aero engines, they are exercising judgements with important implications for generators of wealth back in the UK.  

Typically, an Airbus or Boeing flight travelling from the UK to Dubai will be 70% tourist and 30% business travellers.   Flying to Abu Dhabi it is probably 70/30 the other way round.

Dubai’s diversification and creation of new sources of diversified income have also involved them in high profile acquisitions in Europe and America.  Recently Dubai Ports World, the Company owned by the Royal Family/State, bought P&O.  Whereas this went through quite smoothly in the UK, it caused a storm in the USA congress and media.  Dubai Holdings has great significance for Wales because Dubai Holdings as an umbrella state holding agency has recently acquired Doncasters from private equity.  Doncasters is a key supplier to Rolls Royce and has an important forging complex at Blaenavon.  I raised all these issues with Sheik Mohammed and the other key people in Dubai.

The opportunities for the growth of exports to the area are very large indeed, since the pace of development does mean that the UAE finds itself short of supplies of steel, cement, electrical cabling, building and construction equipment and raw materials of almost every description of almost every kind.  Some of this may be related to the way in which they assess price and quality and not everybody will find it easy to do a large amount of profitable business in the early days of arriving there.  However, they will find that there is a great deal of assistance from the sheer number of UK constructional professional service companies already well established.  

The constructional professionals currently being sought are those who can problem-solve for them, given the very rapid rate of development, project management, cost consultants, structural engineers and purchasers of materials etc.

There are also major opportunities in offering educational services in the regions since there is a thirst for degrees in diplomas in the English language and again not all the doors in the US higher education market are as open as they were five years ago and there is ferocious competition from Australia, New Zealand, Canada etc.

Many Dubai and Abu Dhabi families will tend to think of London, Oxford and Cambridge as the most preferred higher education locations of choice but Wales has a good reputation too.

Likewise for tourism, UAE tourists’ preferred method of seeing the UK is to rent a large flat in London for three generations for 4-6 weeks in the summer and to venture on expeditions for shopping, horseracing, golf or sightseeing.

Presentation of solar powered refrigerator to UAE Red Crescent Society

I presented a Dulas Solar Powered Refrigerator to His Excellency Mohammed Al Suwaidi, Chairman of the Board for UAE RCS.  The product was well received and taken extremely seriously by senior members of the RCS, who took the opportunity to present their work on humanitarian Aid.  Their budget for products and services associated with relief is very large  and focuses on the some domestic rural areas within the UAE and the poorest countries in the region such as Palestine, Dharfur, Yemen, Iraq and other areas.

The RCS was clearly delighted by the donation and impressed by the international overseas aid experience of Dulas, the Welsh company that manufactures the system.

The trade delegation

The accompanying delegation was comprised of companies from the Renewable Energy, Biotechnology and Aerospace sectors

I was able to lead meetings with key contacts in the UAE to promote the interests of the accompanying group.

Dubiotech City

This is another new initiative launched by HH Sheikh Mohammed in 2005 to attract global biotech companies to Dubai.

The meeting was attended by the Executive Director, HE Dr Abdulqader Al Khayat and the biotech contingent from f the accompanying delegation.  This was an opportunity for the delegation to find out more about the initiative and for our companies to present themselves and explore areas of potential collaboration.

Dubiotech offers potential for both inward and outward investment opportunities and is supported by the Government of Dubai and Dubai Holdings.  The Government is providing land within a free zone environment and is setting up a venture capital fund specifically to invest in new biotech companies and initiatives.  Professor Marc Clement of Swansea University and Dr Steven Fish of IGER were both in attendance as were Wales Gene Park and Excelsyn.

Education will play a big part in the development of Dubiotech and Swansea University could be well placed to develop a strategic link.

Renewable Energy Conference in Abu Dhabi

I met the Minister for Environment, HE Mohammed Saeed Al Kindi who gave an overview of the UAE’s environmental plans.  I also gave a keynote speech on our own Environmental policies which set the scene for presentation from five of the accompanying delegation.

The conference was a platform to promote companies and organisations from Wales to an audience of private and public sector delegates.