Thoughts from Dubai

When I posted a couple of pictures from the deserts of Dubai last week, I promised an explanation. Travel and other work commitments have delayed that explanation for which apologies.

I was at the 6th International CEO Forum, an annual event for the top dogs in the exhibitions industry. It was being held outside Europe for the first time and attracted around 85 participants.

Dubai is clearly an attraction. The market grew 25% last year according to Sandy Angus of Andry Montgomery and by a factor of 5 in the past decade. The huge new Exhibition City is now under construction to give room for expected future growth. The country continues to predict 11% annual GDP growth and a representative of the government told delegates that they were now spending half of their budget on improving transport links which have become strained by the city's success.

Economist Roger Martin-Fagg from Henley Management College is a popular speaker at these events, being able to translate better than most the complex gyrations of the global economy into concepts easily grasped by business people. His projections:

• The US will be in full-fledged recession in Q4 2008 and Q1 2009.
• The traditional link between economic growth and oil prices will be re-established and, as a result the price of oil will begin to drop. Even if it goes down to $60, that won't affect too much growth prospects for the Middle East which can survive very happily at that price level.
• The key economies will begin to grow in mid-2009.
• UK property prices will fall 7% in 2008.
• The downturn in Japan will be sharper than either the US or the UK.
• India is a better long term prospect than China because he does not see domestic consumption in the latter kicking in hard enough. I don't agree with him on that.
• By the end of 2008, the Euro/US$ exchange rate will be $1.60.

It will be good to come back to those in a year or two to see how he did. I reckon he's right on most of them.