* Executives who managed Dubai's boom knocked back by bust
* Dubai ruler turned to small group to lead recovery
* Economy now strong, property prices rebounding
* Chiefs of Emaar, Dubai Holding head huge new project
* But next boom likely to be managed more cautiously
By Mirna Sleiman
DUBAI, Nov 28 When Dubai's ruler unveiled plans
last week to build a complex housing 100 hotels and the world's
biggest shopping mall, the scale of his ambitions recalled the
emirate's boom half a decade ago. So did his choice of
executives to lead the project.
Mohammed Alabbar, builder of the world's tallest tower,
signed documents related to the project in his role as chairman
of Emaar Properties, Dubai's top real estate firm.
Sitting next to him was Mohammed al-Gergawi, chairman of
Dubai Holding, a conglomerate owned by the ruler.
Gergawi played a central role in setting up districts housing
Dubai's financial, media and information technology industries.
The businesses of both men suffered when Dubai's corporate
debt crisis erupted in 2009, and they adopted lower profiles
over the next three years as the government relied on a
different set of managers to handle the financial disaster.
But last week's announcement of the multi-billion dollar
mall project, which is to include a park larger than London's
Hyde Park and an entertainment centre developed with Hollywood's
Universal Studios, suggests Alabbar, Gergawi and other
high-flying managers who built Dubai are again shaping the
"Emaar and Dubai Holding are leading the charge. That
signals a rehabilitation of two of the Dubai ruler's three
former lieutenants who were discredited in the crash," said Jim
Krane, author of the book "City of Gold: Dubai and the Dream of
"The return to the fold of these two men, who were iced out
during the long recession, could portend a shift away from the
conservative minds called in in 2009 to stabilise the city."
Alabbar and Gergawi belong to a group of executives, roughly
a dozen men, chosen by Dubai ruler Sheikh Mohammed bin Rashid
al-Maktoum about a decade ago to develop the emirate.
Most were born in the United Arab Emirates; many were
educated at top universities in the United States or Europe.
Some are members of old merchant families which have traded
around the Gulf for decades, but others are first-generation
entrants to the world of big business.
Placed in charge of Dubai's strategic state-linked companies
in areas including real estate, ports and banking, they favoured
projects which burnished Dubai's reputation as an international
business and travel hub: the world's tallest skyscraper, an
archipelago of man-made islands in the shape of a palm, an
indoor ski slope at a shopping mall.
"I'm frustrated with bureaucracy, I'm frustrated with
negative minds and negative thinking because I'm a go-getter;
I'm going places all my life," Abbar, in his mid-50s, told
Arabian Business magazine in a rare interview last year.
He compared Emaar to a phoenix and said the company was on
the brink of a resurgence from the crisis.
Gergawi, 49, got his big break when he launched an office
district on the outskirts of Dubai, persuading a foreign bank to
lend him $55 million, according to a person close to him. That
project brought him closer to Sheikh Mohammed.
Until the global credit crisis burst Dubai's property bubble
in 2008, Alabbar, Gergawi and their fellow executives succeeded
handsomely; the territory with a population of about 2 million
built one of the world's busiest airports, the biggest seaport
in the Middle East, and the Gulf's main financial centre.
But Dubai's fall from grace was almost as spectacular as its
rise. Real estate prices tumbled over 60 percent in the three
years from 2008, obliging Dubai Holding, Dubai World and other
state-linked firms to restructure billions of dollars of debt.
Dubai also got a last-minute $10 billion bailout from
neighbouring Abu Dhabi to avoid a bond default by palm islands
developer Nakheel, and the emirate still faces a wall of debt
repayments with an estimated $50 billion in liabilities due
between 2014 and 2016.
The crash clipped the wings of many top executives; Sultan
Ahmed bin Sulayem, the third business lieutenant identified by
Krane, was removed from the helm of Dubai World in 2010 and now
chairs port operator DP World.
Sheikh Mohammed turned to two people in particular to repair
the damage. One was his uncle, Sheikh Ahmed bin Saeed
al-Maktoum, head of the committee overseeing Dubai's financial
support fund and chairman of Emirates airline and the Emirates
The other was Mohammed al-Shaibani, who is chief executive
at Investment Corp of Dubai, which owns some of the emirate's
top corporate assets, and director-general of the Ruler's Court,
which supervises and coordinates government departments.
Shaibani helped to orchestrate debt refinancing negotiations
with international creditors and also commanded a war on
corruption in state-linked entities, which resulted in a wave of
management reshuffles and mergers at state-linked firms.
Now Dubai seems to have repaired most of the damage. While
state-linked firms still have plenty of debt, most have
succeeded in pushing maturities into the future; property prices
have begun recovering and the economy is again growing strongly.
That is an environment in which executives such as Alabbar
and Gergawi can pursue their ambitions, as Sheikh Mohammed made
clear in a speech announcing the mall project.
"The current facilities available in Dubai need to be scaled
up in line with the future ambitions for the city," he said.
There are signs, however, that Dubai's next boom may be
managed a little more cautiously than the last.
"The ambition is back but this time I'm confident it's going
to be more pragmatic and better managed," said a person familiar
with Dubai's inner circles, who declined to be identified due to
the sensitivity of the issue. "Everyone's learned the lessons."
Projects announced by Sheikh Mohammed this month will rely
on the retail and entertainment spending of tourists from around
the Gulf, India and elsewhere, rather than Dubai's fickle real
estate market, which was the focus of the last boom.
Khalaf Ahmad al-Habtoor, founder and chairman of the Al
Habtoor Group and one of the band of top Dubai executives, said
the emirate had learned from its experience and was now able to
handle its debt better than many Western countries.
"Nobody in the world succeeds or becomes a pioneer unless he
makes mistakes. It's a price that we sometimes have to pay,"
Habtoor told Reuters. "Yes, Dubai has debt...but who doesn't?"