Y 2016 has been one to remember.
From Crude Oil prices to the election of Donald Trump as US President, and from the UAE’s Ministry of Happiness to Saudi Arabia’s Vision 2030, it has been a year of drama, change and evolution.
Here are some of the most important incidents, events and occurrences from the past 12 months, starting with a global story that nobody could have predicted.
January started with all eyes on Dubai as the iconic The Address Downtown Dubai hotel went up in flames on new year’s eve due to an electrical short circuit between the 14th and 15th floors of the 63-story tower. The hotel is due to reopen in Y 2017.
The month also saw low Crude Oil prices persist following a severe drop at the end of Y 2015, impacting Gulf countries such as Oman which is searching for solutions to their financial predicament which resulted in a $11.7-B deficit in Y 2015, and $9.1-B in 1-H of Y 2016.
Chairman of the Kanoo Group, Mishal Kanoo, suggested there was more to fluctuating oil prices than met the eye:
“By 2007-2008, prices hit a high of around $147 per barrel. That’s a five times multiple. In four to five years are you saying that the world economy grew five times? So how did it move?
“You have to follow the money and what it tells me is that there are certain classes in the world tending to make a lot of money.
“There are people playing with other people’s lives by making money for themselves. They haven’t worked a day in their lives – they are buying and selling something and moving the prices up and down because it suits them.”
In Saudi Arabia, the execution of prominent Shia cleric, Sheikh Nimr al-Nimr increased tensions with Iran, which said the Kingdom would pay a “high price” for the execution, before protesters set fire to the Saudi embassy in Tehran.
There was better news for Iran with the lifting of some of the international sanctions imposed on the country for more than a decade, after UN inspectors said that the country had dismantled significant elements of its nuclear program.
February saw an increase in the region’s involvement in the fight against ISIL, with the UAE and Saudi Arabia saying it was ready to send ground troops into Syria
The UAE also announced plans to build a new world’s tallest tower – The Tower – that will be 100 metres taller than the Burj Khalifa when it is completed at Dubai Creek Harbour in Y 2020.
The month also saw the UAE register interest in conceptual high-speed transportation system, Hyperloop. Interest that has since developed into commitment, with plans to establish the world’s first Hyperloop system in the UAE by Y 2021, potentially taking people between Dubai and Abu Dhabi in just 12 mins.
Gulf-wide, ministers signalled agreement on a 5 per cent VAT that would be rolled out across the region by 2019. Economists believe the tax on consumption could bring in around $6.5bn to the UAE’s coffers alone.
Tragedy struck on March 19 when flydubai flight 981 crashed during an aborted landing at Rostov-on-Don Airport in Russia, resulting in the death of all 55 passengers and seven crew. Months later the airline continues to work with relatives of the victims, with CEO Ghaith Al Ghait saying in September: “Our focus remains on supporting the families of all those involved in the tragic accident.”
Meanwhile, Saudi Arabia came to blows with the United States following comments by outgoing President Barack Hussein Obama that a number of American allies in the Gulf were “free riders”, eager to drag the US into regional conflicts. Prince Turki Al Faisal published a strong open letter to Obama criticizing his insinuations while passionately defending the Kingdom’s efforts on various fronts in the Middle East.
Against the backdrop of the Panama Papers scandal, finance became a Key topic in April.
On the positive side, the Abduallah Al Ghurair Foundation for Education was launched in Dubai – one of the largest privately funded philanthropic education initiatives in the world with an investment of $1.1-B. More controversially, Saudi Arabia was revealed to be the 3rd biggest military spender in the world – fuelled by its continuing intervention in Yemen and moves to bolster security. The Kingdom’s cabinet also agreed to an ambitious reform plan: Vision 2030, led by deputy Crown Prince Mohammed bin Salman, which aims to diversify the Saudi economy and wean it off what he described as its “addiction to Crude Oil”.
One part of Saudi’s Vision 2030 was revealed in May: plans for an IPO of state-owned Oil giant Saudi Aramco, 5% of its shares may be worth in the region of $2-T.
But while hopes of a new dawn for Saudi Arabia’s economy were high, the kingdom was also plagued by existing difficulties. Troubled construction giant Saudi Binladin Group was said to have terminated 50,000 jobs and accused of failing to pay workers’ wages, causing sever tension that led to workers setting fire to a handful of the company’s buses in protest.
In brighter news for the region
Crude Oil prices rose above $50 per barrel for the 1st time in Y 2016, while Dubai continued to prove itself as a global innovator by launching the world’s first 3D printed office.
The world reacted with shock to the results of the ‘Brexit’ referendum in June, in which 52% of British votes elected to withdraw from the EU. While the long-term impact on region may be negligible, the markets felt the force of the surprise result, forcing Gulf companies and residents to examine what the vote might mean for them.
The month also saw the Emirates Nuclear Energy Company award contracts totaling $3-B to more than 1,400 local companies for the construction of the UAE’s first nuclear energy plant.
July saw the launch of Pokemon Go.
With vast numbers of downloads by about 8.5% of the world’s population, the augmented reality gaming craze swept the GCC, with numerous warnings being issued about the health and safety implications of over-playing the game, especially near roads and other dangerous areas.
Having started its journey in Abu Dhabi in March 2015, solar-powered plane Solar Impulse 2 finally completed its round the world trip, landing back in Abu Dhabi on 25 July.
Other airborne news included the long-awaited conclusion of the open skies row between Gulf and US airlines, after the US government ended talks between all parties without any formal action put in place.
Emirates Chairman and Chief Executive His Highness Sheikh Ahmed bin Saeed Al Maktoum speaking after the airline’s victory in the Open Skies row: “The American carriers continue to report record-breaking profits and they have a massive advantage from operating in a protected market with anti-trust immunity.
“With the billions being made, it only makes sense that they would invest in their own products and services or begin competing on an international scale. Yet they continue to churn out misleading information and continue their protectionist rhetoric, instead of actually competing for what matters most, the consumer.”
Celebrations for the aviation industry were short-lived, however, when an Emirates plane crash-landed at Dubai International Airport at the beginning of August. All 282 passengers and 18 crew on flight EK521 from Thiruvananthapuram in India survived the crash, but one fire fighter – UAE national Jassim Essa Al Baloushi – lost his life tackling the fire.
In Brazil, the region’s athletes made leaps and bounds for the Gulf’s sporting community, winning a total of six medals at the summer Olympic Games in Rio de Janeiro. Bahraini women Ruth Jebet and Eunice Kirwa won gold in the 3,000 metres steeplechase and silver in the marathon respectively, while Mutaz Essa Barshim picked up silver for Qatar in the men’s high jump competition. UAE judoka Sergiu Toma won a bronze medal in the 81kg category, while Kuwaiti duo Fehaid Al Deehani and Abdullah Al Rashidi took part as independent participants, winning gold in the men’s double trap shooting event and bronze in the men’s skeet shooting event respectively.
In other news, Dubai opened the first of its new wave of theme parks. IMG Worlds of Adventure opened its doors on 31 August, launching the world’s largest indoor themed entertainment destination.
Theme park chief Lennard Otto of IMG World’s of Adventure was excited by the potential number of visitors to the new attraction: “We are looking at bringing in roughly 4.5-M people in our 1st year of operation. We expect 50 per cent to be tourists and 50% to be residents, so it will be a nice mix. The infrastructure is pretty good in terms of our location with an 8-lane highway on both sides and ample capacity to increase traffic levels.”
There was further good news in September when the UAE cabinet approved the final draft of the federal bankruptcy law. The keenly sought after legislation aims to help the country improve the ease of doing business, as well as protecting businesses and business owners who previously faced jail time if a cheque they issued bounced.
Less good was the news that the planned GCC rail network had been pushed back by 3 years to Y 2021, while regional airlines joined many others across the world in banning the new Samsung Galaxy Note 7 from flights, due to concerns over the device’s fire-prone batteries.
But while some technology was getting a bad rap, others were being feted as the next step in innovation during October. The $270-M Future Accelerators program was officially launched in Dubai, pairing government departments with forward thinking innovators to find solutions to challenges of the 21st Century. A total of 30 companies from around the world were selected from 2,274 applicants, who will now work with government officials inside eight accelerators.
Saudi Arabia also made headlines with a huge $17.5-B bond issue, the largest-ever emerging market bond sale, which attracted investor orders totaling almost four times that amount.
Perhaps the biggest news of the year came last month, when Donald Trump was voted as President-elect of the United States on November 8th.
The surprise victory sent shock-waves across the world.
GCC leaders have expressed their congratulations and willingness to work with Donald Trump, the next 4 years will bring with them new challenges for regional governments.
It’s safe to say that Y 2017 is primed to be another year of intrigue, innovation and excitement in the GCC.
Not only will Gulf-wide diversification plans be in the spotlight, so will countries’ construction and development plans, technological advances, and economic survival.
TOP 10 BANKS IN THE GCC
1. Qatar National Bank, Qatar ($147.97m in assets)
2. National Commercial Bank, Saudi Arabia ($119.82m)
3. National Bank of Abu Dhabi, UAE ($110.69m)
4. Emirates NBD, UAE ($110.69m)
5. Al Rajhi Banking Corporation, Saudi Arabia ($84.17m)
6. National Bank of Kuwait, Kuwait ($77.75m)
7. Samba Financial Group, Saudi Arabia ($62.73m)
8. Abu Dhabi Commercial Bank, UAE ($62.15m)
9. First Gulf Bank, UAE ($61.94m)
10. Riyad Bank, Saudi Arabia ($59.55m)
TOP 10 MOST POWERFUL ARABS
1. Prince Alwaleed bin Talal bin Abdulaziz Alsaud (Chairman, Kingdom Holding)
2. Sheikh Ahmed bin Saeed Al Maktoum (Chairman, Emirates / Emirates NBD)
3. Carlos Slim Helu (Chairman and CEO, Telmex / America Movil / Grupo Carso)
4. Joseph Safra (Chairman, Safra Group)
5. Khalid Al Falh (Chairman, Aramco)
6. Sheikha Lubna (UAE Minister of State for Tolerance)
7. Yousef Al Benyan (CEO, SABIC)
8. Abdul Aziz Abdulla Al Ghurair (CEO, Mashreq)
9. Mohamed Ali Rasher Alabbar (CEO, Emaar)
10. Khaldoon Khalifa Al Mubarak (CEO and MD, Mubadala)
Best Wishes for a Happy and Prosperous New Year.