Page 16 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

2 Dubai & Co.

Qatar, Bahrain, Kuwait, and Oman—have become exciting and
promising places to do business.

BEYOND THE PUMP
Gulf economies are best known, of course, for their roles in global
oil and gas markets. Saudi Arabia does, after all, control 25 percent
of the world’s known oil reserves. GCC economies affect our every-
day life, however, at a lot more places than the gas pump.
If you shopped at Tiffany’s in the mid-1980s or purchased a
Gucci handbag in recent years, you bought from a business con-
trolled by Gulf investors. Had a Caribou coffee lately? This second-
largest US coffee chain is owned by a Bahrain-funded entity that is
fully compliant with the investment guidelines of Islamic law. Stay
at some of New York’s finest hotels—including the W Hotel in
Union Square and the Jumeirah Essex House overlooking Central
Park—and you’re at a property owned by Dubai investors. Stayed
at a Fairmont Hotels & Resorts recently? The company is now
largely owned by a consortium that includes the billionaire Saudi
investor Prince Alwaleed Bin Talal—the Gulf’s version of Warren
Buffett. Alwaleed’s large stakes in Citigroup, Apple, and other key
multinational firms give him influence over companies with hun-
dreds of millions of customers worldwide. And the low interest
rates that make your mortgage and car loan affordable are due in
part to over $110 billion in US Treasury bonds owned directly by oil
exporters, including wealthy Gulf nations, plus many billions more
owned indirectly via London. 2
The list of prominent businesses with large GCC investors is
extensive. Madame Tussaud’s, the British wax museum that is a
must-see for London-bound tourists, was once owned by Dubai
International Capital. Another Dubai entity, Istithmar, has pursued
about a 2 percent equity stake in Standard Chartered, the UK-based
global banking institution. Abu Dhabi, the capital emirate of the
UAE, is not to be outdone: its Mubadala Development Company
has a 5 percent stake in the Italian luxury automaker Ferrari.
Elsewhere in the Gulf, the Kuwait Investment Authority is, at 7.1
percent, by far the largest shareholder in Daimler AG (until recently,
DaimlerChrysler)—the manufacturer of your Mercedes-Benz or
Town & Country minivan.