Monday, Oct 23, 2017
Government | Middle East | United Arab Emirates

Model relations

Partnership between Expo Milan 2015 & Expo 2020 Dubai exemplifies the ‘Dubai model’


2 years ago

Giovanni Favilli, Consul General of Italy in UAE
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Giovanni Favilli

Consul General of Italy in UAE

Safety, vision, and best practices are the key drivers of Dubai’s success. Giovanni Favilli, Consul General of Italy to the UAE, shares with The Worldfolio what makes Dubai unique and his view on the special affinity between Italy and the UAE. 

In consideration of the latest unfortunate attacks that have hit a GCC country like Kuwait, how do you think the deteriorating regional security situation can impact Dubai?

The situation can be seen from two different angles: a positive one and a negative one.

The positive one is that Dubai has always been a haven of security and safety in the region, a safe land where people would travel and relocate when something bad had happened in their countries.

Notable examples are the civil war in Lebanon in the ‘70s, the Iranian revolution in 1979, or the difficult situation of Palestinian refugees.

In addition, in 2012 the New York Times reported on the remarkable number of Afghans buying properties in Dubai before the foreign troops would leave Afghanistan.

We have seen Dubai grow again with the Arab Spring and the rising insecurity in the Middle East.

Then, the first remark is that historically Dubai has benefited when there was trouble around.

At the same time, nobody can be happy alone. You cannot feel safe when there is trouble all around, and recent terrible events in Kuwait and Tunisia show that no place is safe.

There is no place where you can be totally exempt from the attacks of terrorism, especially those places that showcase openness, tolerance and a peaceful coexistence between Westerners and Arabs like Dubai.

The point that we have to remember is that the first enemies of fundamentalists are the moderate secular governments, not Western governments or Western people. 

Dubai showcases many different incentives for global investors. For example, it has more than 20 free zones. What is your point of view on the free zone model?

Free zones are very successful. In free zones, investors can skip the rule, ubiquitous in GCC countries, whereby to set up a company the main partner must be a local person holding at least 51% of the shares.

You have the great benefit of tax-free imports and repatriation of profits.

Then you have great facilities and very little red tape. In the UAE, in particular, investors can have the best of different worlds: the advantage of a fantastic hub served by flights from everywhere, state-of-the-art infrastructure and logistics combined with abundant workforce from the Indian subcontinent and Asia that is relatively skilled and at very low price.

All this makes the free zones in the UAE quite attractive for investors. 

In consideration of the UAE family-led business model and the American public-owned approach, what do you think are the benefits and the challenges of doing business in the UAE?

We Italians are quite familiar with the idea of the family-run business model.

We know the advantages and the disadvantages quite well; the advantages being that you have the possibility of crafting a strong brand, and the dedication for the job and the expertise are really transferred through the different generations.

Of course, you also see the shortcomings of this model, which is that sometimes it is difficult to make the business progress over generations.

At times, the father is fantastic but then the son is not really up to the job.

At the same time, Italians understand this kind of dynamic and are able to offer the flexibility needed to work with Arab partners.

What do you think will be the impact of Expo 2020 on Dubai and the UAE? Have you been witnessing many changes in Dubai in preparation for this global event yet?

Expo will be a major landmark in this transformation from an oil-based to a diversified economy.

Actually, the UAE has been very successful in diversifying out of oil. Dubai’s GDP, as we know, is only 3% to 4% based on oil and has already been very successful in focusing on trade, tourism, financial services, real estate and other kinds of businesses that do not rely on oil to grow.

We expect to see great investments and growth, especially driven by the development of infrastructure.

The main project will be the expansion of the metro line and the finalization of the Al Maktoum International Airport, which will be the biggest airport in the world on reaching its full capacity.

Furthermore, Expo 2020 will create serious opportunities for real estate development, for the hospitality industry, and for all the businesses connected.

The final goal of the Expo is to put Dubai on the map for good as one of the smartest global cities and the most desirable destinations in the world.

When we see this kind of huge investment in order to build up the necessary infrastructure you were mentioning, do you think that there are going to be positive spillovers for Italian companies here as a consequence of the whole collaboration that is being set up between Milan and Dubai?

Very much so. Dubai has developed a model that I like to call the ‘Dubai model’: the leadership wants to be the best and the number one in everything they do.

They look for the best practices around the world, they find and recruit the people that worked on those projects, and then they upscale and improve them.

The ‘Dubai model’ requires a lot of modesty, to learn from others, and a lot of ambition, and to settle only for best. I believe that Expo Milan 2015, which is ongoing as we speak, is a very successful event.

I am confident that the collaboration will turn into knowledge transfer. Also for Expo 2020, Dubai will learn from Milan’s experience and bring it to the next level.

To do it, I am sure it will benefit Italian companies that worked well with Expo Milan. 

To make sure knowledge transfer happens, an agreement was signed by the two expos during the visit of the former Italian prime minister, Enrico Letta, to the UAE.

The agreement was the first of its kind and it is under implementation now.

The logical consequence would be that the best talents who worked during Expo 2015 will be active during Expo 2020. 

Expo 2020 is forecast to generate 25% of Dubai's current GDP for the next five years to come, and 20 million tourists are expected to attend this global event. If we look at the strategic partnership with Etihad, what do you think is the impact of this kind of partnership on the bilateral relations not only from an economic standpoint and but also from a political point of view?

As you said, the economic impact is very significant but we take this for granted.

The political impact is also very critical because it brings the two countries closer, with Alitalia being the national carrier of Italy and Etihad being the national carrier of the UAE.

Italy, because of its shape and geographical position, is a natural bridge for the Arab world and the Middle East towards Europe.

So the strength of our relations is already there. In addition, we acknowledge the model of the UAE as a very positive example, as an oasis of tolerance and good government in the Middle East that continuously strives for innovation and excellence.

The alliance between Etihad and Alitalia exemplifies the strong and growing political bond between the two countries. 

Dubai has become a center of gravity for gold and diamond, with 40% of the whole physical gold being traded through Dubai. This is also the place where police drive Ferraris and Lamborghinis. What is the contribution of ‘Made in Italy’ to shaping the strong brand of the UAE abroad?

The idea of Dubai and the UAE is an idea of luxury and beauty. Italy is the country where we make beautiful and well-done products, so Italy is a natural supplier and the UAE is a natural consumer of these kinds of products.

The economic situation in Europe is not the easiest at this point in time. In addition, one of the main groups of tourists, which is the Russians, has been affected by the fall in the price of oil and value of the ruble.

There are always some shocks that would affect the economic welfare of the region.

But at the same time, there are also many points of strength, and there will always be a market for products that are beautiful, well done and at a reasonable price.

The market for personal luxury goods has been growing steadily in recent years and, with tourism being one of the major drivers of this market, Italian products in Dubai are well placed to play their role.

What has been so far the thing that has impressed you or surprised you the most about this country?

What has surprised me the most is the ability of making people from different walks of life and different parts of the world work together in a peaceful way.

I believe this is the most important thing. The UAE really defies preconceived ideas on the Middle East or the Arab world and emerges as a model of economic success and harmonious coexistence that I deeply appreciate. 



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