Dubai’s business hub status depends on two very different princes

Guests scrambled to take photos with the beaming ruler next to dozens of local officials. The royal works from the room like an Instagram celebrity accustomed to mingling with superstars like footballer Cristiano Ronaldo.

A few metres behind him, blending into the crowd at an event at the Dubai Expo earlier this year, stood another man, who may be less visible in the city’s social scene, but his clout is winning over foreign investors accolades while keeping executives on their toes at government-run companies.

Sheikh Hamdan bin Mohammed Al Maktoum, 39, and brother Sheikh Maktoum, 38, each carved out a niche as their 73-year-old father, the ruler of Dubai, gave them more responsibilities. market. Amid competition from regional rivals and international scrutiny in the wake of Russia’s war on Ukraine, they face the task of maintaining Dubai’s status as the Middle East’s preeminent business hub.

“Think of it as a company,” he said Nasser Sheikh, the former treasurer of Dubai, who helped lead the emirate through the 2009 debt crisis. “Hamdan is the chairman and Maktoum is the chief executive. Hamdan is the voice of Dubai and the crown prince, but decisions on all issues are made after consultation between the two brothers.”

Sheikh Hamdan, the charismatic crown prince and heir, is the chief marketing officer of a city built on glitz and has the power to attract capital and millions of tourists. Sheikh Maktoum proved Dubai as the linchpin of the financial markets this year as he called the shots among the emirate’s sprawling state-owned enterprises. He’s part of a push to sell stakes to investors – most recently this month’s road toll operator Salik – and occasionally brings together company chiefs to discuss their figures.

In addition to financial markets, Dubai is under pressure to crack down on illicit financial flows, and the energy crisis may have boosted the United Arab Emirates’ oil revenues, but in the long run will accelerate the global shift away from fossil fuels.

The brothers – whose mothers were born a year apart – also need to maintain a delicate balance of power within the UAE. Previously, Dubai’s leadership persuaded Abu Dhabi to refocus on commerce and the economy rather than foreign policy, leading to military involvement in conflicts from Yemen to Libya and Turkey. Meanwhile, Saudi Arabia’s desire to emulate Dubai as a magnet for foreign talent and investment presents another challenge.

The two men rarely spoke to the media. The Dubai Media Office said it was not possible to schedule interviews within the given time frame and declined to comment further.

Sheikh Hamdan is nicknamed Faza, Arabic for someone eager to help others. He was named crown prince in 2008, matching his older brother Sheikh Rashid, 33, in 2015.

While his social media accounts are flooded with more formal photos of government business, Sheikh Hamdan has also appeared with pictures of skydiving, climbing, horseback riding or standing atop the world’s tallest tower. He has 14.6 million followers on Instagram — the equivalent of the population of the UAE — and mingles with people in Dubai’s malls and restaurants, continuing the approachable leader image his father cultivated as he prepared for his future role.

Hamdan accompanied his father to most meetings with the other rulers of the emirate and chaired the Dubai Executive Council, which consists of 22 members, including his brother. The council’s website says Hamdan is “characterized by his youthful and energetic personality”, which has helped him connect with the people of Dubai. He is also chairman of Dubai Investments, the emirate’s sovereign wealth fund.

The committee, meanwhile, described Maktoum as having “the attributes of an ambitious young leader”. He was in the spotlight when he was named UAE Finance Minister in September 2021 following the death of his uncle. Spearheading the sale of a long-respected state-owned enterprise brought him to the attention of investors. For years, they have called for state-owned companies to go public to boost Dubai’s stock market.

“Sheikh Maktoum is currently playing the role that was set for him, which is defined and technical,” said Sheikha Najla Al Qassimi, a senior fellow at the Dubai Centre for Public Policy Research and also the UAE ambassador. “Sheikh Hamdan’s role as Crown Prince is more political. He is well-loved by locals and tribes, while also being able to connect with and attract Dubai’s huge expat community.”

This year’s public listings are the start of a wave of 10 state-owned companies that will sell shares to investors. Together with business park operator Tecom Group, Sheikh Maktoum helped drive a stake sale in major utility Dubai Electricity and Water Authority, which raised more than $6 billion in total.

Dubai expanded the sale in September after investors snapped up all shares in road toll operator Salik. The deal was coordinated by Goldman Sachs. and Merrill Lynch, among others, aiming to raise $1 billion.

“As a financial hub in the region, Dubai’s market doesn’t fully reflect that status,” said Mohamed Abu Basha, head of macroeconomic research at Egyptian investment bank EFG Hermes. “If you want to push the Dubai story further, you need to keep pushing I think. A long overdue IPO.”

Sheikh Maktoum also focused on corporate governance. As head of the government’s audit department, he maintains a hawkish eye on the finances of Dubai’s state-controlled entities, some of which were the source of Dubai’s financial problems more than a decade ago. The point makes sense — he’s one of the key officials charged with keeping a close eye on the city’s finances.

Since taking the helm of the Financial Audit Office, the royals have ordered financial investigations of several state-owned companies amid suspicions of possible corruption, people familiar with the matter said, but declined to speak publicly about the confidential discussions. His official meetings were brief, serious and to the point, they said, and in the area it was common to have tea and small talk before getting down to business.

An executive at a Dubai-based business said he was surprised when he received a call from Sheikh Maktoum’s office calling him. When he arrived at the office, Sheikh Maktoum walked in with a bottle of water in his hand. He immediately started examining some transactions, asking for details and why.

Disturbed by the meeting, the executive nervously began reaching for his documents before being relaxed by the chief, he said, declining to be named when referring to the private meeting. As he left, Sheikh Maktoum passed on his direct number.

Sheikh Maktoum, who is also known as Dubai’s deputy prime minister and deputy ruler, sometimes asks for updates on specific projects late at night or on weekends, a banker said.

“Since Sheikh Maktoum took over, there has been a positive change in the UAE stock exchange,” said Tarek Fadlallah, head of Middle East operations at Nomura Asset Management. “He’s the son of the ruler of Dubai, and he’s coming to adapt to a rapidly changing generation, which definitely helps.”

Sheikh Maktoum aims to ensure that Dubai does not repeat the crisis of 2009, when it needed a $20 billion bailout from Abu Dhabi. When Sheikh Maktoum was in his early 20s and Dubai was on the verge of default, he sought details of his finances from Al-Shaikh, then treasurer.

“He asked me to sit with him and let him check the numbers,” Al-Shaikh said. “He wanted to know where exactly the pressure points were and what caused them.”

Dubai now faces new obstacles. Earlier this year, the UAE was added to the so-called “grey list” of the Paris-based regulator, the Financial Action Task Force, in a sign of shortcomings in the Gulf state’s handling of illicit funds. Since then, the UAE has said it will strengthen extradition agreements.

International scrutiny over how Dubai handles illicit finance has increased since Russia invaded Ukraine. Politically, the UAE maintains ties with Russia. Emirati officials have said privately that the country will comply with international sanctions.

Saudi Arabia, which opened up under Crown Prince Mohammed bin Salman, the millennial de facto leader, has also begun to attract foreign talent who might normally end up in Dubai.

The UAE has responded by working to make the country more attractive to foreign companies and encourage entrants to take root. It legalized cohabitation for unmarried couples, allowed expatriates to marry, divorce and use their country’s inheritance laws, and removed the requirement for a drinking license. It also removes the need for a local partner to do business. It launched a long-term visa program and selectively opened the door to granting Emirati citizenship, a rare move in the Gulf.

How Dubai navigates the next chapter will come down to the dynamics between the two brothers, as Sheikh Hamdan eventually succeeds his father as the face of the city, while Sheikh Maktoum cements his role as a digital human.

When Sheikh Maktoum was first appointed, “expectations were low,” said Jim Krane, author of the 2009 book The City of Gold: Dubai and the Capitalist Dream“He’s an unknown number of kids. But he’s so compelling because of the strength of his personality and his willingness to be involved.”

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