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2016: The Gulf year in review

2016: The Gulf year in review

We look back at some of the Gulf region’s most important events from the past 12 months

There’s little doubt that 2016 has been one to remember – for both good reasons and bad.
From oil prices to President Trump, and from the UAE’s Ministry of Happiness to Saudi Arabia’s Vision 2030, it has been a year of drama, change and evolution.

Here are some of the most important incidents, events and occurrences from the past 12 months, starting with a global story that nobody could have predicted.

January started with all eyes on Dubai as the iconic The Address Downtown Dubai hotel went up in flames on new year’s eve due to an electrical short circuit between the 14th and 15th floors of the 63-storey tower. The hotel is due to reopen in 2017.

Read: Electrical short circuit caused Address hotel fire – Dubai police

The month also saw low oil prices persist following a severe drop at the end of 2015, impacting Gulf countries such as Oman which has searched – and continues to search – for solutions to their financial predicament which resulted in a $11.7bn deficit in 2015, and $9.1bn in the first half of 2016.

Chairman of the Kanoo Group, Mishal Kanoo, suggested there was more to fluctuating oil prices than met the eye:
“By 2007-2008, prices hit a high of around $147 per barrel. That’s a five times multiple. In four to five years are you saying that the world economy grew five times? So how did it move?

“You have to follow the money and what it tells me is that there are certain classes in the world tending to make a lot of money.

“There are people playing with other people’s lives by making money for themselves. They haven’t worked a day in their lives – they are buying and selling something and moving the prices up and down because it suits them.”

In Saudi Arabia, the execution of prominent Shia cleric, Sheikh Nimr al-Nimr increased tensions with Iran, which said the Kingdom would pay a “high price” for the execution, before protesters set fire to the Saudi embassy in Tehran.

Read: Saudi cuts diplomatic ties with Iran after embassy attack in Tehran

There was better news for Iran with the lifting of some of the international sanctions imposed on the country for more than a decade, after UN inspectors said that the country had dismantled significant elements of its nuclear programme.

February saw an increase in the region’s involvement in the fight against ISIL, with the UAE and Saudi Arabia saying it was ready to send ground troops into Syria

The UAE also announced plans to build a new world’s tallest tower – The Tower – that will be 100 metres taller than the Burj Khalifa when it is completed at Dubai Creek Harbour in 2020.

The Tower at Dubai Creek Harbour

Read: Dubai Creek tower to be 100m taller than Burj Khalifa

The month also saw the UAE register interest in conceptual high-speed transportation system, Hyperloop. Interest that has since developed into commitment, with plans to establish the world’s first Hyperloop system in the UAE by 2021, potentially taking people between Dubai and Abu Dhabi in just 12 minutes.

Gulf-wide, ministers signalled agreement on a 5 per cent VAT that would be rolled out across the region by 2019. Economists believe the tax on consumption could bring in around $6.5bn to the UAE’s coffers alone.

Tragedy struck on March 19 when flydubai flight 981 crashed during an aborted landing at Rostov-on-Don Airport in Russia, resulting in the death of all 55 passengers and seven crew. Months later the airline continues to work with relatives of the victims, with CEO Ghaith Al Ghait saying in September: “Our focus remains on supporting the families of all those involved in the tragic accident.”

Read: Flydubai crash: Initial report confirms pilots were landing in manual mode

Meanwhile, Saudi Arabia came to blows with the United States following comments by outgoing President Barack Obama that a number of American allies in the Gulf were “free riders”, eager to drag the US into regional conflicts. Prince Turki Al Faisal published a strong open letter to Obama criticising his insinuations while passionately defending the Kingdom’s efforts on various fronts in the Middle East.

Against the backdrop of the Panama Papers scandal, finance became a key topic in April. On the positive side, the Abduallah Al Ghurair Foundation for Education was launched in Dubai – one of the largest privately funded philanthropic education initiatives in the world with an investment of $1.1bn. More controversially, Saudi Arabia was revealed to be the third biggest military spender in the world – fuelled by its continuing intervention in Yemen and moves to beef up its own security. The Kingdom’s cabinet also agreed to an ambitious reform plan – Vision 2030, led by deputy Crown Prince Mohammed bin Salman, which aims to diversify the Saudi economy and wean it off what he described as its “addiction to oil”.

One part of Saudi’s Vision 2030 was revealed in May – plans for an IPO of state-owned oil giant Saudi Aramco. Five per cent of its shares are believed to be worth in the region of $2 trillion.

Read: Aramco IPO to reveal true extent of Saudi oil reserves

But while hopes of a new dawn for Saudi Arabia’s economy were high, the kingdom was also plagued by existing difficulties. Troubled construction giant Saudi Binladin Group was said to have terminated 50,000 jobs and accused of failing to pay workers’ wages, causing sever tension that led to workers setting fire to a handful of the company’s buses in protest.

In brighter news for the region, oil prices rose above $50 per barrel for the first time in 2016, while Dubai continued to prove itself as a global innovator by launching the world’s first 3D printed office.

It was also a month of special note for Gulf Business, which celebrated its 20th anniversary, having first been published in 1996.

The world reacted with shock to the results of the ‘Brexit’ referendum in June, in which 52 per cent of British votes elected to withdraw from the European Union. While the long-term impact on region may be negligible, the markets felt the force of the surprise result, forcing Gulf companies and residents to examine what the vote might mean for them.

Read: What does Brexit mean for people in the Gulf?

The month also saw the Emirates Nuclear Energy Company award contracts totalling $3bn to more than 1,400 local companies for the construction of the UAE’s first nuclear energy plant.

July saw the launch – and incredible success – of Pokemon Go. With vast numbers of downloads by about 8.5 per cent of the world’s population, the augmented reality gaming craze swept the GCC, with numerous warnings being issued about the health and safety implications of over-playing the game, especially near roads and other dangerous areas.

Having started its journey in Abu Dhabi in March 2015, solar-powered plane Solar Impulse 2 finally completed its round the world trip, landing back in Abu Dhabi on July 25.

Solar Impulse landing

Read: Solar Impulse 2 completes historic round-the-world trip

Other airborne news included the long-awaited conclusion of the open skies row between Gulf and US airlines, after the US government ended talks between all parties without any formal action put in place.

Emirates Chairman and Chief Executive His Highness Sheikh Ahmed bin Saeed Al Maktoum speaking after the airline’s victory in the Open Skies row:
“The American carriers continue to report record-breaking profits and they have a massive advantage from operating in a protected market with anti-trust immunity.

“With the billions being made, it only makes sense that they would invest in their own products and services or begin competing on an international scale. Yet they continue to churn out misleading information and continue their protectionist rhetoric, instead of actually competing for what matters most, the consumer.”

Celebrations for the aviation industry were short-lived, however, when an Emirates plane crash-landed at Dubai International Airport at the beginning of August. All 282 passengers and 18 crew on flight EK521 from Thiruvananthapuram in India survived the crash, but one fire fighter – UAE national Jassim Essa Al Baloushi – lost his life tackling the fire.

Read: Investigation into Emirates crash in Dubai to take up to three years

In Brazil, the region’s athletes made leaps and bounds for the Gulf’s sporting community, winning a total of six medals at the summer Olympic Games in Rio de Janeiro. Bahraini women Ruth Jebet and Eunice Kirwa won gold in the 3,000 metres steeplechase and silver in the marathon respectively, while Mutaz Essa Barshim picked up silver for Qatar in the men’s high jump competition. UAE judoka Sergiu Toma won a bronze medal in the 81kg category, while Kuwaiti duo Fehaid Al Deehani and Abdullah Al Rashidi took part as independent participants, winning gold in the men’s double trap shooting event and bronze in the men’s skeet shooting event respectively.

In other news, Dubai opened the first of its new wave of theme parks. IMG Worlds of Adventure opened its doors on August 31, launching the world’s largest indoor themed entertainment destination.

Read: World’s largest indoor theme park, IMG Worlds of Adventure, opens in Dubai

Theme park chief Lennard Otto of IMG World’s of Adventure was excited by the potential number of visitors to the new attraction:
“We are looking at bringing in roughly 4.5 million people in our first year of operation. We expect 50 per cent to be tourists and 50 per cent to be residents, so it will be a nice mix. The infrastructure is pretty good in terms of our location with an eight-lane highway on both sides and ample capacity to increase traffic levels.”

There was further good news in September when the UAE cabinet approved the final draft of the federal bankruptcy law. The keenly sought after legislation aims to help the country improve the ease of doing business, as well as protecting businesses and business owners who previously faced jail time if a cheque they issued bounced.

Less good was the news that the planned GCC rail network had been pushed back by three years to 2021, while regional airlines joined many others across the world in banning the new Samsung Galaxy Note 7 from flights, due to concerns over the device’s fire-prone batteries.

Read: Samsung stops sale of Galaxy Note 7, asks users to ‘turn off’ devices

But while some technology was getting a bad rap, others were being feted as the next step in innovation during October. The $270m Future Accelerators programme was officially launched in Dubai, pairing government departments with forward thinking innovators to find solutions to challenges of the 21st century. A total of 30 companies from around the world were selected from 2,274 applicants, who will now work with government officials inside eight accelerators.

Saudi Arabia also made headlines with a huge $17.5bn bond issue – the largest-ever emerging market bond sale, which attracted investor orders totalling almost four times that amount.

Read: Saudi sets record with mammoth $17.5bn bond issue

Perhaps the biggest news of the year came only last month, when Donald Trump was voted as President-elect of the United States on November 8.

The surprise victory sent shockwaves across the world – particularly the Gulf region, owing partly to Trump’s alarming rhetoric about Muslims and his threats to cut off American purchases of Saudi Arabia’s oil.

And while GCC leaders have expressed their congratulations and willingness to work with Trump, the next four years will undoubtedly bring with them new challenges for regional governments.

Republican Presidential Nominee Donald Trump Holds Election Night Event In New York City

Read: Trump and the GCC: What can we expect?

It’s safe to say that 2017 – along with the remainder of 2016 – is primed to be another year of intrigue, innovation and excitement. Not only will Gulf-wide diversification plans be in the spotlight, so will countries’ construction and development plans, technological advances, and – in some cases – economic survival.

THE 10 MOST READ NEWS STORIES ON GULFBUSINESS.COM

1. UAE’s Radio 1 and Radio 2 close, entire workforce laid off
2. Eid al Fitr holidays announced
3. Saudi Arabia’s first Snow City open tomorrow
4. GCC residents to require e-visa for UAE from Friday
5. Saudi King Salman issues new directives on unpaid salaries for foreign workers
6. Saudi government workers can now be fired
7. Breaking: Fire at Dubai Marina tower
8. Emirati lining up takeover bid for Liverpool FC
9. Apple launches iPhone 7 / 7 plus – UAE launch prices revealed
10. Liverpool FC in Middle East takeover bid says report

TOP 10 BANKS IN THE GCC
1. Qatar National Bank, Qatar ($147.97m in assets)
2. National Commercial Bank, Saudi Arabia ($119.82m)
3. National Bank of Abu Dhabi, UAE ($110.69m)
4. Emirates NBD, UAE ($110.69m)
5. Al Rajhi Banking Corporation, Saudi Arabia ($84.17m)
6. National Bank of Kuwait, Kuwait ($77.75m)
7. Samba Financial Group, Saudi Arabia ($62.73m)
8. Abu Dhabi Commercial Bank, UAE ($62.15m)
9. First Gulf Bank, UAE ($61.94m)
10. Riyad Bank, Saudi Arabia ($59.55m)

TOP 10 MOST POWERFUL ARABS
1. Prince Alwaleed bin Talal bin Abdulaziz Alsaud (Chairman, Kingdom Holding)
2. Sheikh Ahmed bin Saeed Al Maktoum (Chairman, Emirates / Emirates NBD)
3. Carlos Slim Helu (Chairman and CEO, Telmex / America Movil / Grupo Carso)
4. Joseph Safra (Chairman, Safra Group)
5. Khalid Al Falh (Chairman, Aramco)
6. Sheikha Lubna (UAE Minister of State for Tolerance)
7. Yousef Al Benyan (CEO, SABIC)
8. Abdul Aziz Abdulla Al Ghurair (CEO, Mashreq)
9. Mohamed Ali Rasher Alabbar (CEO, Emaar)
10. Khaldoon Khalifa Al Mubarak (CEO and MD, Mubadala)

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