WASHINGTON (AFP) -American companies are racing to open outposts in the United Arab Emirates and pay homage to the country’s ruling sheikhs who have turned their strategically-located federation into a business mecca.
The Emirates’ growing economic and political clout was underlined earlier this week as the UAE’s foreign minister, Sheikh Abdullah bin Zayed Al Nahyan, addressed a meeting at a Washington hotel packed with executives from some of America’s biggest corporations.
The sheikh, dressed in western business attire, was there to support the launch of the US-UAE Business Council, but his passage through the ornate room was impeded as US executives eagerly sought an introduction.
The council’s launch on Wednesday was also attended by the US ambassador to the UAE, Michele Sison, and other US government officials who lauded the Emirates pro-business stance.
“There’s no red tape,” Sison told AFP, saying the UAE was a “very efficient” country for US firms to open a Middle East base.
US Chamber of Commerce executives who helped establish the new business coalition promised to ensure UAE firms, which are snapping up prime New York real estate and other American assets, get a fair hearing in Congress’ halls of power.
American politicians caused a major headache for UAE investors last year after several leading lawmakers torpedoed a multibillion-dollar bid by Dubai Ports World to takeover six US ports on security grounds.
The UAE’s economy minister Lubna al-Qasimi expressed dismay over the backlash, but said the country should have mounted a better public relations offensive.
It appears doubtful such political hurdles would be raised again, partly because the UAE’s stock now carries a clear ‘buy’ recommendation, spurred by its meteoric economic growth.
This was in part demonstrated as US President George W. Bush hosted the foreign minister and Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan at a private White House meeting a day before the business council’s launch.
But aside from the UAE’s rich energy reserves, why are so many US companies investing in a country which is four-fifths desert?
As a real estate agent would say: location, location, location!
The UAE, which is about the same size as the US state of Maine, sits between the West and the East, occupying a strategic gateway for companies seeking to bridge the global economy.
“It’s the perfect hub,” explains Daeman Harris, a US Chamber of Commerce executive who was instrumental in setting up the new business coalition.
The Emirates borders Saudi Arabia and Oman and its coastline nestles key Gulf shipping lanes.
Harris said the UAE’s infrastructure, with its four-lane highways, modern airports and harbors, also appeals to savvy American investors.
The UAE is undoubtedly business-friendly, the website of its Washington embassy touts the lack of corporate tax.
The federation’s rapid growth has made it America’s largest export market in the Middle East and northern Africa, according to US government figures.
And US firms are scrambling for a foothold: oil services giant Halliburton announced in March that it was moving its headquarters to Dubai where its chief executive Dave Lesar will be partly based.
Other household names including Cisco, Citigroup, Boeing, Lockheed Martin, Microsoft and Oracle are also chasing revenues in the UAE, joining about 750 US firms already “thriving” in the country, according to ambassador Sison.
The UAE’s growing reputation as a tourist destination as well as affluent Emiratis also appear to be in the sights of American firms.
Universal Studios is creating a 2.18 billion-dollar theme park in Dubai, one of the UAE’s seven emirates, and Nickelodeon, the US children’s television network, is also planning to develop a theme park in the country.
There is one dark cloud hovering over the deepening trade ties, however.
The two countries have not forged a free-trade pact. A US official said in March that free trade talks between the countries were on hold and no date had been set for their resumption.