As we celebrate our country's 40th anniversary, I am consumed with fond personal memories of the late Shaikh Zayed Bin Sultan Al Nahyan and Shaikh Rashid Bin Saeed Al Maktoum, who brought the United Arab Emirates into being. Cementing seven shaikhdoms was no easy task during an era when rulers were fearful of losing their autonomy. But those two great leaders — both of whom I was privileged to know — were adamant that in unity was strength.
In their wisdom, they forged a plan to transform clusters of fishing villages and small trading towns into modern metropolises; they put the UAE on a solid economic foundation and worked to ensure that all Emiratis could stand tall. Together they moulded a federation that wields geopolitical clout and protects us from those who covet our natural resources.
Shaikh Zayed and Shaikh Rashid were the highest role models, not only for their qualities of leadership but also for their remarkable human attributes. They were simple men who contained the seeds of genius; their hands were at the rudder to guide us through decades of growth. Their patriotism and dignity was exemplary.
I often replay the times I spent with these fine men in my mind but never more so than during the 2008 economic tsunami that ravished the planet. As elsewhere, the UAE is still feeling its effects and although we have treated our wounds, we haven't fully recovered. If it were not for the groundwork laid down by Shaikh Zayed and Shaikh Rashid we might not have been able to withstand the wave that swept so many away.
I think of them too each time I see our Arab brothers being killed just because they want a free and decent life. Our Arab world is falling apart yet Arab leaders hesitate to take action to stop their fellow presidents and heads of state behaving brutally. Shaikh Zayed and Shaikh Rashid would have been appalled were they alive today. They would have expected the GCC to take the lead in condemning those who have turned guns on their own people. We must also thank our nation's fathers and the rulers of the other Gulf states for forming the Gulf Cooperation Council (GCC) and for instituting the Peninsula Shield Force (the GCC's own rapid reaction force) formed to keep the enviers at bay. Now, more than ever, the GCC should take a firm lead.
During these bitter economic times, Emiratis look to their leaders to provide citizens with jobs and business opportunities. The swiftest way to reach these goals is for the government to stimulate economic activity with immediate focused investment in infrastructural projects such as roads, bridges, tunnels, power stations, airports etc. Now is not the time to allow the wheel of construction to slow. Belt-tightening may be one answer for countries with high fiscal debt but is not an approach the UAE should take.
When the downturn first hit, both the Chinese and the Australian governments devoted large sums to new infrastructure; a strategy that kept the spectre of recession at bay while boosting investor confidence.
The Australian government instantly allocated some $28 billion (Dh103 billion) for the construction of new homes and schools and free roofing insulation for 2.7 million homeowners. Local communities were given increased funding for new infrastructure — and small businesses benefited from a short-term tax reduction. The Chinese government responded to the crisis with a stimulus package. Disregarding the warnings of critics who thought it was a mistake to inject substantial investment into an already overheated economy, the Chinese opened up their fiscal coffers to the tune of $586 billion (Dh 2.15 trillion) to construct railways, metros, and airports and buildings in earthquake-stricken regions. China's economic recovery was speedier than most.
Infrastructure investment
Many economists advocate stimulus packages with infrastructure at their core. I am particularly impressed with the philosophy of the 2010 recipient of a Nobel Prize in economics Peter Diamond who said: "There's so much uncertainty now between the error of doing too little and doing too much. Doing too little seems to me to be a much greater risk."
"Governments will never have this kind of opportunity to build telecommunications, transportation and energy infrastructures" as inexpensively, he told The Economist, adding, "These are long-term investments that will pay dividends for generations to come". Moreover, the UAE should consider taking other confidence-building measures, besides substantial investment in infrastructure to attract and retain investment, such as:
- The immediate takeover of unfinished/aborted projects by a government agency and the provision of fair compensation to owners who are unable to complete.
- The formation of a statutory body to expeditiously resolve disputes between semi-government clients and contractors.
- The promulgation of unambiguous legal rules with regard to residence visas and mortgage-financing.
- The honouring of commitments made by semi-government or government entities in contracts as is the norm in advanced countries.
- The mandating of government companies to invest in the UAE to benefit nationals, rather than in countries abroad.
We will need to nurture an investor- friendly environment by initiating positive fiscal and financial measures to make the cost of capital cheap by:
- Simplifying capital market regulations to allow more companies access to economic funds.
- Creating guidelines for banks to lend to viable projects, as a catalyst for growth.
- Encouraging investment by developing a stimulus package for ‘New Investments in large construction projects'. Subsidies could include zero interest rate loans, cash incentives, tax-free/special rate status for an initial 15-20 year period and utility subsidies.
Shaikh Rashid famously answered his critics' doubts with: "If you build it, they will come". Both he and Shaikh Zayed had the courage to pursue growth against all odds. These giants among men cannot be replaced. They were not the sort of men who craved their image depicted in statues — although I would like to see their monuments erected to remind our youth how they impacted our lives.
We should hold them in our hearts not only on National Day but always.
Khalaf Al Habtoor is a businessman and chairman of Al Habtoor Group.
