Dubai must strive to become a financial destination rather than a bridge or transaction place for companies, a banking expert has advised.
"Building bridges is not profitable. What is profitable, is to become a destination to the traffic of someone else's bridge. Dubai must aim to become a destination, as the value of a destination is much more than exchanges," said Gordian Gaeta, a private equi ty investor and advisor and editor of Frontiers in Credit Risk, while addressing the Dubai Quality Group seminar yesterday.
In the United States, investors have changed the way corporations are organised and the top-tier management functions. Even the institutional investors, through their initiatives, have made organisations change the way businesses operate.
"Investors have bought companies, broken them up, doubled the value of good parts and improved the bad parts," Gaeta said, question ing whether the region had the "right" kind of investors.
For Dubai to become a destination, Suresh Kumar, chief executive officer for Emirates Financial Services, said there must be a proper regulatory framework to instill confidence in investors.
In the West, it has been noticed that corporate failings are reported extensively. "If we see people being caught here and it being reported equally by the media, it will certainly boost investors' confidence." Finally, a company must not be judged by its earnings, but by its corporate character, Kumar said.
Citibank Country Business Manager Sanjoy Sen said it is political stability, coupled with the ability to make faster decisions than a democracy, which makes the region a lucrative investment destination.
"If you want to enter China, there is mirage of issue to be sorted.The entry barriers and political quagmire is a nightmare in India," said Sen.
Dubai is doing the right thing, he said, explaining it needs to utilise its strengths of quick decision making to draw people and companies to invest in their capital here.
American Academy of Financial Management VicePresident Brett King said Dubai has a competitive advantage and needs to focus on developing the private banking and wealth management businesses.
"Growing restrictions in the US have made it a less attractive destination. No longer do people from the region need to channel their investments to European private banks. Dubai is a point of reference of the GCC region when it come to banking and finance," King said.
By Parag Deulgaonkar
© Emirates Today 2007
