Sun Also Rises – Twice….

Somewhere Over the Atlantic in Row 32: When you fly across nine time zones you see a lot of odd sun rises. If I did the math right I saw two of them in less than the 15 hours since my initial departure a few days ago.

I spent this past weekend in Abu Dhabi at the Formula One Grand Prix, which it turns out was the season finale and was to determine the overall winner for 2014 (spoiler alert – Lewis Hamilton won the race and had the most points overall). Thanks to my good friends at Mubadala (the leading investment and development company established by the Government of Abu Dhabi to support the emirate’s long-term economic diversification), I spent two days immersed in a series of discussions around the investment climate here – oh, and I also saw a car race.

Abu Dhabi 2014 - 3

It is fascinating to see a region come of age so quickly, so profoundly. When I was last here almost six months ago I toured an extraordinary new hospital being developed by Mubadala in partnership with the Cleveland Clinic – on this visit I was able to once again walk through the facility which is to open in the first half of 2015. This hospital, which sits on 23 acres and has 4.5 million square feet, will service a wide range of complex and critical care cases – arguably the most sophisticated healthcare facility in the entire Middle East. The five Centers of Excellence (Heart and Vascular, Eye, Neurological, Digestive Disease, Respiratory) anchor the activities of the hospital. There will be over 2,000 “Caregivers” servicing the nearly 400 beds when the hospital opens. Given my jet lag I was easily able to get a photo of the sun rising over the hospital, which I thought was particularly propitious.

Abu Dhabi 2014 - 1

Healthcare is a big deal in the United Arab Emirates. The level of activity and investment in the region is significant and many US companies are finding a receptive marketplace there. The Cleveland Clinic has brought significant expertise to Abu Dhabi with its particular healthcare delivery models. The 72 critical care rooms have the most sophisticated equipment available but it is obviously much more than that – the attention to training and operating protocols, even the care to the most mundane of tasks, is quite apparent as evidenced by the signs throughout (see below). Interestingly, and maybe because of heightened awareness due to Ebola or an obsession with really clean hands, the cover story in this weekend’s Gulf News was “Modern Hand Dryers Spread More Germs” – true (cover) story!

Abu Dhabi 2014 - 2

Much of the local investment capital actually flows out of the region as petro-dollars are diversified into other assets and geographies. The amount of new private equity funds focused on the Middle East and North Africa raised year-to-date 2014 is around $2.0 billion (according to Thomson Reuters) versus $1.2 billion for all of 2013, which is an encouraging development but is notably well below the $8.4 billion raised in 2008. Interestingly the private equity investment pace in region is quite modest as year-to-date only 38 deals totaling $428 million have closed versus 71 deals valued at over $1.0 billion in 2013, making Mubadala’s commitment even more notable.

While stuck in a taxi with a defense industry expat I learned that Abu Dhabi has built one of the most impressive fighter jet fleets in the region. Evidently they have 76 of the most advanced F-16’s available – they used to have 80 but 4 recently crashed during training exercises, which at $90 million per plane, nearly rivals the total investment made in the region this year. Unfortunately there is not much of a return on those four investments.

2 Comments

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2 responses to “Sun Also Rises – Twice….

  1. hi michael.

    as you know i am deeply skeptical of the suitability of the UAE for western investors and business people.

    if nothing else, i dont understand why people who would never have felt comfortable investing in apartheid-era south africa, somehow just fall in love, or greed, with the UAE, despite that the UAE’s treatment of non-citizens, women and minorities makes apartheid-era SA look like Vermont.

    worse, the UAE is a feudal theocracy, where the divine — the divine, as in supernaturally ordained — rights of sovereigns and royalty is meaningless, just a colorful show for the tourist trade (eg like in Britain) but is in fact… a fact. a fast track time machine back to medieval mores.

    how any self respecting liberal, or female, or christian, or jew, or buddhist, or bahai, or progressive modern person can look at the UAE and see anything other than a thinly disguised attempt by a corrupt, oil-drenched cabal of feudal lords trying to buy off the world’s permission to continue to persecute whomever they please, well, i’m baffled. (and, yes, i know, the UAE is amongst the most liberal places in the arab or muslim world. but for me thats a midget in the land of dwarfs.)

    • always appreciate your comments. I see important signs of progress – met with a CEO of a local aircraft parts manufacturer where 95% of the workforce is Emirati women engineers – it is a start. engagement is a powerful policy and hopefully with that will be continued change for the better. as you may know I grew up in Asia and many of the success stories lauded over there had similar origins.

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