KEY POINTS:
There is no shortage of confidence in Middle Eastern business, as last month's Arab Strategy Forum made clear.
Sessions entitled "Enough Pots for All this Liquidity" and "Going Shopping! Future M&A Trends" portrayed a region whose only problem is deciding where to invest its cash.
Leading the way
seems to be the country hosting the conference: Dubai.
Like the other Gulf states, the emirate has benefited from the doubling of the oil price in the past five years. Unlike its neighbours, however, it is a minimal producer of crude. It benefits from petrodollars only to the extent that it can capture them with the best investment opportunities. This has been the story of its rise over the past three decades.
"Decades ago, Dubai looked at itself and said that by 2010 it would not be producing oil any more; that it would have to diversify its economy," said Dubai-based Simon Williams, of HSBC. "And its decision was to become a service hub for the region."
The story is well known: Sheikh Rashid al-Maktoum, father of current ruler Sheikh Mohammed, began developing the state's infrastructure in the 60s by building Dubai International Airport. In the early 70s he established the country as the centre of Middle Eastern trade by opening Port Rashid and Jebel Ali, the world's largest man-made port. In 1985 Sheikh Mohammed put a reputed US$10 million into founding Emirates airline.
The Dubai economy now straddles infrastructure and construction, aviation, tourism, property, energy and financial services.
Behind the growth has been investment, but also aggressive marketing - such a £100 million ($281 million) sponsorship of Arsenal football stadium and a move on Liverpool FC revealed last week. And then there have been other high-profile deals such as the £800 million acquisition of Madame Tussaud's, construction of luxurious tourist destinations, promotion of its golf courses by Tiger Woods and relentless advertising of its beaches.
Much of Dubai's investment has been tied to the ruling family - the structure of its industry bears this out. There are independent operators, such as Majid al-Futtaim, an investment, property and retail group that has an alliance with French group Carrefour. And there are major listed companies, such as property developer Emaar, quoted on the Dubai financial market.
But groups such as Dubai Holding and Dubai World (DW), both of which are Maktoum vehicles, are dominant. Dubai Holding has around 100 subsidiaries, including hotels group Jumeirah, and DIC, the bidder for Liverpool, is also owner of Tussaud's and Travelodge and holder of 10 per cent of Daimler Chrysler shares.
DIC is also a lead investor in Dubai Aerospace Enterprise (DAE), which aims to develop a US$10 billion-a-year ($14.5 billion) aviation leasing, manufacture and maintenance business within five years, and Dubai Energy, charged with building "a diversified global energy investment portfolio".
DW owns Nakheel, the developer behind the country's palm resort and Dubai Ports World (DPW), which last year acquired P&O.
The striking thing about the global "shopping spree" spearheaded by these groups is how recent it has been, and how determined the Dubai-based companies have been to secure what they see as strategic assets.
Those companies were formed only recently - DIC in 2004, DPW and Dubai Energy in 2005, DAE last year - and the deals have come over a similarly short time.
And the companies have not wanted to lose - DPW, for example, became involved in a bidding war for P&O, and had to outbid Singapore's state-back Temasek, paying in the end what was seen by analysts as a massive premium for the business.
Dubai's aggressive expansion has attracted western businessmen, such as Maurice Flanagan and Tim Clark of Emirates, and Robert Johnson, a former senior Honeywell executive who now heads DAE.
Johnson, who joined the company in August, said: "I thought: this is a country that is going to grow. It's not just Dubai and the Middle East; it is right next to India and China."
He said he was impressed, if not staggered, by the ambition of DAE.
The plan is to build a global scale group, with leasing, manufacturing, airport development, engineering, consultancy and education divisions.
He is also in a hurry: "It was originally contemplated that this would take four to five years, but I think I can do it quicker."
Such plans may sound outlandish, but Dubai and the Middle East, like China and India, have experienced massive growth in the past five years.
Rates of between 15 and 20 per cent within the Gulf Co-operation Council - the organisation of states including Saudi Arabia, the UAE, Kuwait, Qatar, Bahrain and Oman - have been recorded in the past five years.
"There has been a huge amount of petrodollars coming into Dubai, financing a vast amount of construction in the country," Williams said. "But these investors are also looking for outlets overseas to diversify.
"Dubai has the knack of being very good at business and investment. The people who run DIC have a very good reputation, and they have been good at advertising that ... It attracts a lot of people."
Johnson is one of them. "Before I took the job I spent a week here," he said. "It struck me as safe, secure, clean, great infrastructure ... all the things you want. I realised that this was a kind of city of the future, so I came."
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