UAE’s growth path is set to succeed

Dubai, is the city to host the 2020 World Expo under the theme of “Connecting minds, creating the future” with three sub themes — Mobility, sustainability and opportunity— which represent the key drivers of global development. Dubai 2020 is the first city in the MENASA region to host this highly celebrated international exhibition. Dubai Expo 2020 will take place on the eve of the UAE’s 50th national anniversary, starting countrywide celebrations.

Massimo Falcioni, CEO, Euler Hermes GCC said: “Hosting the Expo 2020 in Dubai means another attribute to the city’s success and the wise vision of UAE’s rulers. Surprising as it is, in only a period of 42 years since the formation of the UAE, the country continuous attracting global inspiration and talent, creating an environment for outstanding opportunities.”

“Hosting the Expo 2020 in Dubai means another attribute to the city’s success and the wise vision of UAE’s rulers. ” 

“For over a decade, the UAE has made significant efforts to diversify their economy to reduce dependence on petroleum products. UAE’s share related to oil in total GDP decreased from 47 percent in 2000 to 33 percent in 2012. Hosting Expo 2020 will not be a great achievement for the UAE alone, but for other GCC countries and the entire Arab region. This is the first time such a prominent event is being held in the MENASA region. Hosting the Expo will have a positive impact to UAE’s real GDP growth in the first few years, accelerating closer to the event.” Falcioni says.

 

Hosting the World Expo 2020 is expected to reflect positively on the country’s overall economy, the most significant impact would be felt in infrastructure, tourism, transport, technology, financial and property sectors. Tourism and travel sectors would also see significant developments in the second half of the current decade, and transform the UAE into a global tourist destination. For the first time in the history of the Expo, visitors from abroad during the Expo 2020 will constitute 70-75 per cent. Dubai will attract further investments into all sectors such as public transport services, restaurants, retail trade, transport and telecommunications and the footfall of 25 million visitors to the exhibition, including 19 million from outside, through the six months of events and activities.

 

“The central theme underlying Expo 2020 “Mobility, sustainability and opportunity” symbolizes all what Dubai stands for. As individuals, professionals and corporate entities, our role is to strengthen the bond and help realize the dream and commitment of all those who dreaming big and leading in building the future.  Euler Hermes GCC we will be supporting Entrepreneurs, SME and large Multi National Corporations conducting business wisely and expand into new markets through our world leading trade credit insurance solutions.” Falcioni says.

 

The Expo 2020 will not only bring advancement in infrastructure development and further economic growth to the region, but the awareness for the Expo is also bringing about an enormous sense of pride to the UAE nation and the GCC in general. The UAE will gain international exposure and an opportunity to further its reach out to the world.

 

Sustainability is one of the three core themes of Expo 2020 and is set to play a key part in the infrastructure of the Dubai event site. Site planners are aiming for the Expo site to generate at least 50 per cent of the energy the site will use, including the latest photovoltaic technology whereby electrical currents will be produced using solar energy. In line with Dubai’s Expo transport policy the event will also be a zero emissions site.

Although the UAE is currently one of the world’s biggest carbon emitters, the emphasis that will be placed on sustainability over the next seven years in the lead up to the 2020 event will no doubt help to promote this fundamental issue with the UAE and help communicate the need for sustainable lifestyle on a global platform at the event in 2020. After the Expo event, the site itself is to be recycled and used as a research centre and university, based around the study of the aims related to Expo, including sustainability. This development in particular could help many generations benefit in the quest for sustainability.

Perhaps the biggest person set to gain from Expo 2020 is ‘you’, the resident of Dubai. With a focus on sustainable development, transport infrastructure and a boost to the local financial market, the long-term benefits of hosting Expo are perhaps to be felt, undoubtedly most by those living in the city.

Euler Hermes GCC: UAE’s growth path is set to succeed as shown to the world in the last 42 years due to the strong visionary leadership of its rulers.

 The globalisation of commercial trade is growing at a faster rate every year, representing the true driving force behind world economic growth. In fact, world trade should increase by 4.1% in real terms in 2013 (with a GDP up by 2.5%) and by 5.9% in 2014 (with an expected GDP of +3.2%). However, the international economic climate remains uncertain and risky. Euler Hermes, subsidiary of Allianz Group and world leader in credit insurance, predicts that corporate insolvency index will increase by 8% in 2013 compared to 2012, while in 2014 it will reach 2%. The datum is affected by the weak financial situation in southern European economies, which will see insolvency index rise by 33% in 2013. Within this context, short-term commercial credit management is becoming an increasingly important strategic lever in business management as credit insurance cover can provide protection against payment defaults. To shed light on the current financial scenario in the Arabian Peninsula, we interviewed the CEO of Euler Hermes, GCC Countries, Massimo Falcioni to give us an insight to the credit insurance market in the UAE. *The Gulf Cooperation Council (GCC) comprises of the six countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

 

Euler Hermes GCC: UAE’s growth path is set to succeed as shown to the world in the last 42 years due to the strong visionary leadership of its rulers.

 

What will be the main trends?

The UAE stands out as unique leader in world trade. The weakened Eurozone on one side, Arab Spring and international sanctions on Syria and Iran on the other side, have led to a redistribution of trade dynamics.  The UAE was the first country to benefit from these events, acquiring most of the trade due to their political stability and openness towards international trade with the neighboring continents Africa and Asia. At Euler Hermes we expect that economic growth will continue to show a positive trend during 2013, recording a growth of +4% after the rise of +4.4% in 2012. The growth of the GDP will be supported not only by the production and exportation of oil, but also by non-oil sectors such as the consumer electronics, chemicals, pharmaceutical, cosmetic, automotive, tourism, food and financial services sectors. The excellent leadership and vision of the UAE rulers is one of the major reasons for economic development and diversification from the traditional oil sector. On the other hand the strategic geographic location in proximity of two rapidly developing continents, the low labour and energy costs, very low taxation and increased investments in infrastructure projects such as airports, ports, industrial areas, make this area a natural hub for economic growth of any business of any size.

 

How does Euler Hermes operate in the GCC?

Euler Hermes, established its operations in UAE in 2006, with offices in Dubai, sponsored by Alliance Insurance PSC, whose president is H.H. Ahmed Bin Saeed Al Maktoum. Euler Hermes has offices in the Kingdom of Saudi Arabia in Riyadh and Jeddah since 2008, sponsored by Allianz Saudi Fransi Cooperation Insurance, which is a joint venture between Allianz Group and Saudi Fransi Bank. Euler Hermes is also present in Bahrain, Kuwait, Oman and Qatar.

                                                                                                                                                                

How does Euler Hermes GCC distinguish itself from other providers?

At Euler Hermes, which has over 100 years of experience, we constantly invest into research and knowledge. The information quality is the real difference our customers gain by using Euler Hermes Trade Credit Insurance solutions, which is well known to have one of the most extensive business knowledge networks in the world. Credit information is only as good as the quality of the underlying data and analysis. At Euler Hermes GCC we make huge investments in collecting proprietary information and generating knowledge of our clients’ customers. With a local risk database of over 50,000 GCC companies monitored and cross referrenced constantly, we receive over 4300 credit limit requests per month, each processed in less than 48 hours. Our unique intelligence systems and a team of over 30 GCC based risk experts and sector analysts distinguish us from other credit insurers and information companies.

 

How do companies benefit from having a credit insurance policy?

Euler Hermes facilitates trade and exports. Getting paid on time and access to required finance are two major problems, traders are facing. Practical and reliable tools linked to the actual economy are needed to tackle these situations. Trade credit insurance is one of these tools as it protects the company against payment defaults and provides companies with a powerful solution to assess new prospects. By assessing and constantly monitor the risk, credit insurance is able to direct the business of insured companies towards reliable markets and clients that allow the company to achieve stable, long-term growth. The credit insurance policies also enable insured companies to obtain credit lines and related cost effective facilities from banks, which improve the company’s creditworthiness. Euler Hermes AA- rating by (S&P) serves as guarantee to the credit institution providing adequate facilities for working capital requirements to our policyholders.

 

How do you forecast the credit insurance market in the GCC area?

The credit insurance market in GCC reached record levels in 2012 in terms of earned premiums (56 million $), recording a growth rate of 38% compared to the previous year. Euler Hermes is the market leader with a share of 49% and, on the basis of data from Q3, it expects the market to continue growing at the same rate in 2014. Saudi Arabia and the United Arab Emirates will drive the development of credit insurance together with Qatar, which will play a fundamental role because of its numerous economic development initiatives undertaken through exporting oil-based products all over the world.

 

About Euler Hermes

Euler Hermes is the worldwide leader in credit insurance and one of the leaders in the areas of bonding, guarantees and collections. With 6,000+ employees in over 50 countries, Euler Hermes offers a complete range of services for the management of B-to-B trade receivables and posted a consolidated turnover of €2.4 billion in 2012. Euler Hermes has developed a credit intelligence network that enables it to analyze the financial stability of over 40+ million businesses across the globe. The Group insured worldwide business transactions totaling €770 billion exposure end of December 2012. Euler Hermes, subsidiary of Allianz, is listed on Euronext Paris. The Group is rated AA- by Standard & Poor’s.

 

For more information visit www.eulerhermes.ae or follow us on Twitter @eulerhermes