Get a little sand in your shoes

IT would not have been surprising to see a fleet of Arab dhows sailing up to the Old Swan Brewery recently. Taking place inside was the biggest seminar ever staged in Perth on doing business amid the shifting sands of the Middle East.

The event was timed as a flag raiser for the inaugural Emirates Airlines flights between Perth and Dubai, starting on August 2, and the opening of a Western Australian trade and investment office in the Gulf city in October this year.

WA presently sells mainly alumina, wheat, gold, live sheep and meat to the United Arab Emirates.

In the other direction, we buy crude oil and certain foodstuffs including, curiously enough, chocolate.

Premier Geoff Gallop told over 200 people at the conference the target was to double the current $480 million exports to the UAE. Major opportunities include high-value goods, fresh and chilled food, fruit and vegetables, education, health services and tourism.

The new links to Dubai certainly open up some exciting prospects. The four non-stop flights a week can each carry 13 tonnes of cargo directly to the massive Emirates Air Cargo Village handling facilities. Flights will leave Perth at 10.30pm and arrive at 5.40am. The flying time is only 10 hours and 50 minutes, opening up an alternative stopover on the way to Europe for Perth business and holiday travelers.

The UAE is just one of 14 countries in a region that collectively takes $7.6 billion of Australian exports, with cars and automotive products a notable success.

Dubai’s twin ports of Jebel Ali and Port Rashid handle 40 per cent of all the Gulf container traffic, amounting to five million boxes a year.

Dubai is becoming an entrepot trading post on a par with Hong Kong and is a major gateway to the Middle East markets. It boasts a good business climate as well as a pleasant lifestyle for expatriates.

Its ambassador, the long-serving UAE man in Canberra, Khalifa Al-Falasi, briefed the Perth audience on the boom in Dubai re-exports now worth more than $US11 billion a year. He said more than 75,000 visitors from the country were headed for Australia this year.

The number of UAE students at our universities, presently only 250, is expected to jump sharply, with WA getting its share. The UAE has invested over $2.5 billion in Australia in agriculture, bloodstock and real estate. And a dozen WA companies already have offices in Dubai. It sounds like a good spot to be.

Groggy greenback slumped on the ropes

WHAT would the financial markets do without a crisis? The latest knee knocker is the US dollar slump. The surprise is not so much that it happened, but that it happened so quickly. Only a month ago, I was invited to a briefing at the US consulate given over video link by Professor Robert Sutter of Georgetown University in Washington. I asked the professor if the administration was worried about the weakness in the dollar. He looked puzzled, and said there had not been much commentary on the topic in the US media. Well, there is plenty now.

The heavyweight champion of currencies for the past decade is on the ropes. The dollar is down 9 per cent against the euro this year to a 26-month low. It has slid almost as much against the yen. The weakness has been a prime factor in lifting the Australian dollar 12 per cent this year.

The flood of foreign money into the US,

which pushed the greenback up by over 30 per cent in the 1990s, has slowed to a trickle, as global investors begin to retreat from American assets. Foreigners own about $US3.6 trillion in US Government bonds and $US1.6 trillion in shares. There is speculation that wealthy Arabs are moving some of their petrodollar balances into the euro and gold.

Share prices are still sliding on Wall Street. More big corporations have been caught cooking the books – Enron was apparently only the head chef. Profits growth is puny.

The fall in the US dollar so far could be beneficial to the economy, because it makes US manufactured goods and other exports cheaper. Many traders are betting Alan Greenspan will not lift US interest rates off their 40-year lows before 2003. However, a further precipitate plunge in the dollar might feed into inflation and demolish those hopes.

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