The Olympic Games, football’s World Cup and World Expos ... they were once the exclusive purview of developed economies.
That has changed dramatically over the past decade and often seen as a coming of age for emerging markets. Russia and Brazil have played host to the Olympics and World Cup, spending billions even though their respective economies slowed down dramatically due to the recent commodity bust.
When it comes to the World Expos, there is a fabled history. Philadelphia in 1876 brought forward the US typewriter; Paris in 1900 the diesel engine; and New York back in 1964 featured the colour television.
There are great expectations surrounding Dubai’s hosting of the World Expo in 2020. The goals are sizeable: $25 billion of new revenues, coming from 25 million visitors with a spree of new hotels being added to accommodate the added volume. It will be a first for the Middle East, but many believe with Dubai’s position straddling Asia and Africa, the pride of playing host will take on a new meaning.
“For Dubai to host an expo, it means Africa now has an expo; Asia has an expo, the Middle East has an expo because Dubai has become the Miami of Africa, Hong Kong of Asia and the Singapore of the Middle East,” said Afshin Molavi of Johns Hopkins University.
I was in Astana, Kazakhstan, for what can be best described as the “expo in between”, formally defined as a specialised expo by the organisers. It was a challenge for the country having to complete construction during a financial crisis that started in 2015 with the local currency the tenge plunging by two-thirds.
Despite many critics who said that visiting the city on the Kazakh steppe as perhaps a bridge too far, Astana officials said they attracted 3.7 million visitors, well above the original target of 2 million attendees. To the surprise of even those on the ground, most came from Kazakhstan and other countries along the ancient Silk Road. There was both a sense of fascination hosting a global event in Central Asia and an eagerness to see first-hand what an estimated $3 billion of spending could do to a city.
Not by chance, Expo 2017 fell on the same year that Astana celebrated its 20th anniversary as the capital of Kazakhstan. Nursultan Nazarbayev, the only President the country has had since the collapse of the Soviet Union, moved the capital for strategic reasons from the far south on China’s border closer to its neighbour to the north Russia. Most of Kazakhstan’s bounty of natural resources — oil, gas, iron ore and uranium — are in the centre of this vast country the size of Western Europe in land mass, but with only 18 million residents.
Nazarbayev, known for his firm grip on the country with little tolerance for dissent, placed high hopes on Expo 2017. He wants it to be transformative for the commodity-rich country and hence the focus on future energy as a central theme.
Astana’s Mayor, Asset Issekeshev, wants the capital to realise what he calls “instant job diversification” now that Astana is on the global map, with visitors coming from 150 countries. Astana in many ways looks like any city on the Arabian Peninsula — shiny new mirrored buildings, wide, new roads, five-star hotels and a grand mosque to fill the skyline built when oil was trading above $100 a barrel.
The city is taking a page out of the Dubai playbook as it launched the Astana International Financial Center moving into half of the 500,000 square meters of space at the expo site.
“I think that Dubai is really a kind of benchmark for all the stages of development,” said Kairat Kelimbetov, Governor of the AIFC. “We will actually use their model in terms of their government structure”.
That includes the introduction of the English Common Law, an independent financial court with British judges, and an international arbitration centre.
I was forthright with the governor, asking if another financial centre is needed with Hong Kong, Shanghai, Mumbai and Dubai all within the wider vicinity. Kelimbetov believes there is a role for Astana, since there is a void within Central Asia itself, especially with China’s “One Belt, One Road” strategy to link more than 60 countries through one far-reaching development policy coming out of Beijing.
“I believe that we are like a buckle for this belt,” he said on the grounds of the AIFC. “It is a huge opportunity for us to develop the infrastructure.”
Kazakhstan is growing again — more than 4 per cent in the first half of the year — but sustaining that pace will be dependent on delivering the diversification the long-serving president is looking for.
The writer is CNNMoney’s Emerging Markets Editor.
