For those of us that have crossed the age threshold of 30 years, one is quite aware of the changes in life.  If you are not doing what you desire at that age, you ought to be.  If you are content with your life to date, one then might ask “is there more?”

That is where the Gulf Cooperation Council is at this juncture – 30 years on and counting.  Undoubtedly, the annual meeting was overshadowed by the year-end crisis management techniques in the UAE, specifically Abu Dhabi stepping in at the 11th hour to inject $10 billion into neighboring Dubai.  I don’t think it was a coincidence that the UAE President H.H. Sheikh Khalifa bin Zayed Al Nahyan wanted to get that mopped up before travelling to Kuwait for the GCC Summit.

The council of six countries was created during the tensions of the Iran-Iraq War to create a common economic and security policy; they are, as we find out from the European example, tightly linked.

The GCC is eager to create a single currency, a la the Euro, next year.  We know already that two of six countries, the UAE and Oman, will not join the party at the start.  It is not clear after this most recent summit whether that union will proceed as planned and also whether the long-coveted dollar link will survive.  There are more opinions about that than there are countries in the Gulf.

During a panel I chaired at the Arab Thought Foundation annual FIKR (meaning thought in Arabic) conference in Kuwait, we had a healthy debate about the key ingredients for unity.  Two of the European panel members pointed to security and transportation.

They recalled the Marshall Plan to rebuild Europe that also anchored Germany to the West. It was the beginning of a 40-year process that eventually led to the European Union, which now has 27 members.  During that reconstruction effort, roads and rails were built right across Europe – the essential arteries to trade and the movement of people and goods.

Our two Arab members of the panel were in complete solidarity with this premise and hoped that the Gulf War would have brought not only the Gulf countries closer together but the broader region as well.  That has happened to a certain extent, but old rivalries and national priorities have certainly carried much more weight than the collective good of the next generation which vitally needs to see the benefits of oil and gas wealth.

There was also agreement that the most pressing issue is youth unemployment, which, most outside the region do not know is more than a quarter of the population between 15-30 years old.  Unemployment will surge with the highest birth rate in the world right now.

Five years ago, the region signed onto a regional trade agreement to lower barriers amongst the 20-plus countries of the region.  In actual practice, businesses complain about the non-tariff barriers to commerce.  Waiting times at borders within the Middle East can range from five hours to 50 hours – that is no joke – and we are talking about that level of delays even within the six Gulf States.

It goes back to the original premise, why 30 is not only an important threshold for the GCC and the region in general, but those who may be frustrated because they want to fulfil their dreams.  A vision has been conveyed and step by step, the hurdles need to be crossed for a single market, a common currency and most importantly a common goal to create opportunity to those who most need it.

Early in this millennium, which seems like an eternity today, I was taken on a helicopter tour of Dubai for a story I was working on. Sheikh Zayed Road, the main artery of the emirate, still had empty gaps where giant skyscrapers are today.

To understand Dubai development's past and future, a helicopter view is required.

On that same tour today, The Palm and World projects, which light up the coastline at night, and the “old” Burj Al Arab hotel - celebrating its 10-year anniversary - are pieces of a puzzle that make up Brand Dubai.

From up above it is easier to see what has been built - most strikingly the Jebel Ali Port which was nothing more than a sandy stretch of land two decades ago on my first visit during the Gulf War. Today, the port is the largest container facility in the region, dwarfing its rivals by a factor of four. DP World has more than 50 other facilities dotted around the globe, a successful creation of Dubai World’s spending spree.

It is these traits in Dubai that regional businessmen and government leaders list under the banner of infrastructure which will allow the brand as they see it to survive its worst challenge in the short history of the emirate, something lost as the scenes in this financial drama unfold on a daily basis.

While in Kuwait City this week, I rushed over to the Sheraton Hotel for a meeting to obtain background for a panel I was chairing and to get a different view of the financial crisis.  On my way out, I saw the photos from the winter of 1991.  I remember back then walking on shards of glass and metal, the intense devastation of the hotel by Iraqi troops. This was a stark reminder of where the city and the region came from in the last two decades.

Dubai was just embarking on its expansion with an ambitious Sultan bin Sulayem - the embattled chairman of Dubai World - rolling out his blueprints for the port which was his initial “Field of Dreams.”  He was wondering why I had a skeptical look on my face of disbelief.  Maybe I lacked imagination and he was perhaps overly ambitious after that grand project was completed.

Dubai World represents the primary, but certainly not the only challenge for the emirate today.  Government officials and creditors are starting what appears to be a much longer path to restructuring than most were anticipating just 10 days ago.  It won’t be half a year; the cost of borrowing will increase as the score of rating downgrades continue to pour in and there won’t be one giant property company with assets of $50 billion (at old valuations) because the deal was called off to merge Emaar and the companies under the Dubai Holdings umbrella.

One private equity player pointed to this leveraged play being written in Dubai nearly two and half years ago as we launched our program.  The debt he flagged at the time will eventually catch up with all the players in what most like to call Dubai Inc.  In the region, that label is used as a common reference to all the holding companies created by the government.  From far beyond the financial centers whose lending institutions bankrolled this debt mountain they ask questions like “Is Dubai Inc. a publicly listed company?”  “What do you mean the government owns stakes in each of them?” and “Why were they allowed to borrow so much money?”

We can call that the view from 35,000 feet, skyhigh in a jetliner where we cannot recognize the offshore projects, the port or the iconic hotel.  In the region, most have at one point or another taken that helicopter tour and know why it is important to get today’s financial burden sorted out.  They rightly though have difficulty answering those questions.

It has almost become legend in London Underground parlance, “mind the gap”, meaning that commuters should move with caution as they enter the train to avoid an accident on the platform.

This phrase “mind the gap” applies as well with what we are dealing with in Dubai and the UAE overall. Comments, many complain, have tended to be either inconsistent on the one hand or contradictory on the other.

That again was the experience in the last 48 hours, when the central bank of the UAE said it would offer liquidity to the banking system to all domestic and foreign banks with operations in the Emirates. The move was designed to avoid a run on institutions by depositors and guarantee there are ample funds available if the need arises. It went over well and indeed there was no panic.

Twenty-four hours later, we were on the receiving end of a statement by a hitherto unknown official from the Dubai Department of Finance Abudulrahman al Saleh who said the investors and lenders may have to shoulder the responsibility of their actions.

To be precise, he noted that Dubai World “was set up on a commercial basis and not guaranteed by the government.” The statement was crystal clear, that buyers or in this case lenders should beware. Nothing wrong with that approach if it is telegraphed in advance, but in this case -– having spoken to a number of bankers and others involved in the process –- it was not. This, one London veteran of the Middle East said, “is not the way to rebuild confidence.”

When covering the region one learns to put various pieces of the puzzle together by working the phones, talking face-to-face over a coffee and then completing the picture. In this instance we are not there yet. Some would contend we are still a way off.

The chairman of the Supreme Fiscal Committee of Dubai and Chairman of Emirates Airlines, Sheikh Ahmed bin Saeed al Maktoum is the man calling the shots right now as he and his team comb through the assets of Dubai World and the other “Dubai Inc.” entities. The people I spoke to over the last 72 hours expect more clarity by Wednesday.

In the meantime, bankers who have lent an estimated $123 billion to the UAE overall, 70 percent of that from European banks, might feel they too need to mind the gap.

The old adage, “timing is everything” certainly rings true with the request by the Dubai Government for a standstill on payments by Dubai World for a period of a half year.

Investor confidence in Dubai, exemplified by developments like the palm islands, has been shaken.

As timing goes, it was curious at best, coming just before the Eid el Adha holidays in the region and the long Thanksgiving break in the United States. Adding to the intrigue is that Dubai successfully raised $5 billion in a bond offering taken up by two Abu Dhabi government controlled banks the same day

This left investors scratching their heads wondering what the motivation was. I spoke to a number of fund managers and bankers with investments in the Emirate and, like most politics in the region, there is more to it than meets the eye.

As one fund manager said,  Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai and Prime Minister of the UAE, is playing hardball. He is out to “teach a lessons to his boys.” His “boys” are the names which have become well-known power brokers in the build up of Dubai Inc. over the past two decades.

It has been a busy week for Dubai Inc.

Sheikh Mohammed cleared out his advisory board at the Investment Corporation of Dubai and pushed out the respected head of the Dubai International Financial Center who also served as Vice Governor of the UAE Central Bank.

The names on his advisory board included Sultan Bin Sulayem the Chairman of Dubai World and its property arm Nakheel. This I am certain was not an easy move by the Ruler.

Dubai’s rapid development was closely linked to the Palm and World property developments. I am sure we have all looked at their images offshore on Google earth at least once. Dubai World was also the force behind the high profile dust up in Washington with the P&O ports buyout.

Many I spoke to believe Dubai World is being singled out for good reason. Of the total $80 billion debt on the books, $59 billion of that comes under its leaky umbrella.

In fact, others within Sheikh Mohammed’s inner circle seemed to think it is only right for Dubai World to clean up their books like everyone else has been asked to do. That task is underway today with the help of accountancy firm Deloitte.

The other question being raised amongst global investors is the level of bench strength for Sheikh Mohammed or who he is turning to during this shake-up. Names at the forefront today include Mohammed Ibrahim Al Shaibani, Director-General of Dubai Ruler's court and Ahmed Humaid Al Tayer, Governor of the Dubai International Financial Centre.

They were in Sheikh Mohammed's delegation during this week’s visit to London and the response to their moves has been positive so far, according to bankers and investors I spoke with.

There is a sense of irony after what has gone on this week. British Prime Minister Gordon Brown congratulated the Dubai ruler for the actions taken to respond to the debt challenges during the bi-lateral meeting. It is something the PM knows a great deal about, with U.K. government debt soaring to 12 percent of GDP.

That nod of goodwill came before Dubai’s request for a standstill agreement, and left investors wondering what is next.  As one regional economist said this was a “disappointment in a way.” Dubai Inc. had cleared all the hurdles on the path to recovery but appears to have stumbled on this one.

The Dubai Air Show was not a glamorous affair.  When one points to regional orders from Algeria and Ethiopia to mark the highlights for 2009, there is a slight disappointment to be candid.  The total tally tells a similar story, some $5 billion of firm placements vis-à-vis $155 billion from just two years ago.

In comparison to the state of the industry in Europe or America today, the result however was impressive.  We interviewed the CEO of low cost carrier Jazeera of Kuwait and asked him why profits were down 53 percent over the same period last year.  The German executive Stefan Pichler replied in a matter fact fashion: at least we are still making money.

I believe it serves as a good microcosm for the region in general as it searches for the bottom of the crisis.  Businesses are not witnessing runaway growth, but they do see light at the end of the tunnel.  For example, the big brand carriers in the region, Emirates, Ethiad and Qatar are not cutting back their original commitments, only stretching them out if necessary.  It is worth noting that the carriers seem less concerned about posting profits right now, but building out their brands and their market share.

With oil trading around $80 the scope to build off the foundation recently put down is there.  Sheikh Ahmed bin Saeed Al-Maktoum chairman of Dubai’s Supreme Fiscal Committee and Emirates Airline told us that the second half of the $20 billion government bond package should come by the close of the year.  If so, and if there are buyers beyond the UAE central bank, it will be an important indicator.
 
I chaired a forum of business leaders in London this week and found that most believe a firm floor is being put on this economic recovery in Europe as well.  Germany, France and Italy are growing again, albeit all below one percent in the last quarter.  Spain and the U.K., both overly dependent on the property sector, are suffering under the weight of their budget deficits.  It is a similar script being written in the United States. 

But there was categorically a belief there won’t be any hidden surprises, with an important caveat that policymakers may be already planting the seeds of the next financial crisis – in sum too much money thrown at the banking system that will eventually fuel inflation.

Meanwhile, the energy surpluses continue to fuel investments on European soil.  The relatively new investment arm in Abu Dhabi is moving swiftly post-F1 to raise its profile, buying Brawn Grand Prix with partner Daimler.  It also plans to raise its stake in the German industrial group to 15 percent.

Qatar is choosing to continue its investment advances in London.  There is active talk the QIA wants to raise its stake in grocery chain J. Sainsbury and after the Americans leave the posh neighborhood of Mayfair, Qatar will take ownership of the current site of the U.S. Embassy.

These investments may not raise the GDP figures in either Germany or the U.K. but do help us in our search for the bottom.

Warren Buffett voted with his pocketbook this past week, investing $26 billion to purchase Burlington Northern Santa Fe. It is one of America’s oldest railroad networks and the backbone that helped build the country. 

The Oracle of Omaha - as Buffett is fondly referred to due to his Mid-Western roots in Nebraska - is also big on animal instinct.  The concept is simple: we all need to be aware to both survive and smell opportunity when it beckons.

In that spirit, Buffett is probably letting economists debate the merits of whether this is a V shaped recovery, a sharp downturn and straight line back to growth or a recovery that reflects a W, where the economy recovers, dips and bounces up and down for a few years. 

Maybe I am a child of the 1960s, but my fond recollection of those letters has more to do with the VW Beatle that headed to the beaches of California, not illustrations to guide economics.

In October, my three visits to the Middle East, which included Dubai, Qatar and Abu Dhabi during the Formula One festivities and the launch of our regional hub in the UAE capital, led me to put aside traditional economic research. 

Instead, I relied entirely on animal instincts and, going back to my Greek roots, I used the agora to get the latest reading of what was happening.  Bankers confidently said that the road show to raise $6.5 billion in Dubai would be well received.  The first portion of that offering was three times oversubscribed.

Businessmen noted that they felt the worst was over in the local property market and that foreign buyers had started to show interest again.  Colliers International released figures this week indicating that prices rose 7 percent in the third quarter, although they are down 47 percent on the year.  Again, the figure does point to a bottom being reached.

In Qatar, despite the bottom following out of the natural gas market (trading one-fourth the equivalent of crude prices right now), the economy is hardly suffering amid the “recession” as growth has reached 8.5 percent this year.  The greatest challenge is completing projects on time and allowing the market to catch up with all the construction.   

Finally, the Formula One race looks to be only a starting point for Abu Dhabi. I was surprised enough at the $40 billion officially spent to build up Yas Island and the infrastructure around it to host the circuit.  According to Economy Minister Sultan bin Saeed al Mansouri that is only the beginning.

He says that the Yas Marina complex will be a blueprint for future developments with an eventual commitment of $1 trillion dollars - for roads, power plants and rail links.  That is an eye-popping number that others within the government were, shall we say, shy to commit to, but it does give a sense of how the old economy will help build the new one and how the future won’t be measured by a V or a W in the region.

Abu Dhabi, U.A.E. - A central bank has to exude a sense of calm, stability and solidity. I have had the chance to enter a few of these landmark buildings around the globe, most notably the U.S. Federal Reserve, the former Bundesbank in Frankfurt and the Bank of England. 

Abu Dhabi's Formula One debut is seen as the emirate's coming out party.

The halls of the central bank of the United Arab Emirates provide the feeling of a different era. The Bank's communications director has been in his post for nearly four decades, the central banker himself, Sultan Nasser Al Suwaidi, for two decades.

The pace is measured inside the Bank, a complete contrast to the activity outside as the capital of the UAE hosts its first Formula 1 race this weekend - an event that is Abu Dhabi’s coming out party after neighboring Dubai commanded the spotlight for the past 20 years as the financial, trade and tourism hub of the region.

The emirate is buzzing with activity -– singer Beyonce led a weekend line up of concerts -– the corniche in the city center is filled with visitors around the new $2 billion landmark the Emirates Palace Hotel and workers at our hotel the Fairmont were scrambling to put the final touches on rooms to accommodate a surge of arrivals.

One gets the feeling that life here in Abu Dhabi will change dramatically after this weekend. The Emirate sits atop eight percent of the world's oil reserves and has the largest single sovereign wealth fund, with seven others created in the last few years as well. Money is not an issue for the 400,000 or so local Emiratis.

Abu Dhabi owns stakes in Daimler, EADS, GE, Rolls Royce and most recently Ferrari, which led them nicely into the F1 business by affiliation. With that backdrop of activity, one would expect a rethink perhaps of its partnerships and policies. That would be a miscalculation.

Back at the central bank, the Governor in our exclusive interview knocks back any suggestion of change: "We do not see any alternative so far to the U.S. dollar." I probe a bit more to get his views on the secret talks that reportedly took place around the IMF-World Bank meetings in Istanbul, to which he replied, "There was absolutely no discussion on the issue of re-pricing... absolutely not."

The look was consistent with the tone: Steady, serious and matter of fact. It is the same response that came from the Bank in the past 12 months. Al Suwaidi believes the worst is behind the UAE and is confident that the economy will end up in positive territory when the final tally is marked on 2009.

From the calm within the Central Bank, it is time to go back outside where the pace is markedly different and it is literally back to the races.

You would not know that we were in the midst of a sputtering economic recovery when examining the price of oil these days. At around $80 a barrel, which we witnessed this past week, the price of the precious commodity is about $60 above its 20-year average.

New oil finds are promising and seemed to surprise even the most seasoned hands in the business .

The math adds up for the Arabian Gulf producers who are part of what one seasoned energy consultant called the supply management club - OPEC. For all the back seat analysis in the cascade down from $147 to the mid-thirty level, this price recovery to a one-year high speaks wonders about how to manage your assets.

I had a chance to catch up with the core group of oil ministers, senior executives and those who consult the industry at the annual Oil and Money conference in London. Prices are double what they were a year ago, when we did not know whether some of the world’s money center banks would be able to keep their doors open. But, this steady march back to the current level makes a lot of sense.

The OPEC supply management club and a lack of oil are two key elements, but what else is driving this market? Especially when you consider that one half of the world – the East - has recovered while the other half – the West - is in danger, economically speaking, of being parked in neutral?

This requires a two-part answer: one deals with getting access to the giant fields, according to Jonathan Stern of the Oxford Institute for Energy Studies. The other with political uncertainty in countries such as Nigeria, Iran and Venezuela.

“What we are looking at here is really quite expensive oil that you need at least a $40-50 oil price to be confident you will make a decent return on,” commented Stern.

The market was quite excited about new finds in the Gulf of Mexico, off the coast of Brazil, and in Kazakhstan. They are promising and seemed to surprise even the most seasoned hands in the business. The problem is that the older fields in the Middle East and the North Sea, for example, are dropping fast and replacement costs are much higher today than four decades ago.

After the new promising discoveries of the past year, there is less discussion about “peak oil” – where oil production is in steady decline - but the $80 price may be pointing to a new era. “The low-hanging fruit has already been taken,” says Vahan Zanoyan, Chief Executive Officer of First Energy Bank in Bahrain, “After 40 years of this process, it is not surprising that all of what is left are the tough ones.”