Thursday, August 25, 2005

Abu Dhabi's ruler permits citizens to buy land as economy opens :: Bloomberg

Bloomberg's take:

Abu Dhabi citizens, among the world's wealthiest people, can buy homes without royal approval for the first time in 34 years.

Sheikh Khalifa bin Zayed al-Nayhan, president of the United Arab Emirates and ruler of the capital city of Abu Dhabi, on Aug. 13 ended a law that allowed only royal family members and their associates to own land. The change may extend a real-estate boom in the city, where 250,000 residents had per-capita oil revenue of $115,000 last year.

The land decree is the biggest step toward opening Abu Dhabi's economy since the November death of Sheikh Zayed bin Sultan al-Nahyan, who ruled the emirate for 40 years. The U.A.E., created in 1971, is benefiting from record oil prices and billions of dollars of property investment.

Gaining the right to buy land is ``good for the economy and opens more opportunities for locals,'' Rashid Darwish al-Ketbi, whose family has lived in Abu Dhabi for three generations, said in an interview on Aug. 16. ``It's taken 25 years of debate to come to this decision. If we didn't do it now we would never do it.''
. . .
Abu Dhabi's ruling family rescinded the right to buy and sell land in the early 1970s, when local Bedouins migrating to the city from the desert were sold worthless plots at unfair prices, said al-Ketbi, who owns a 30-story apartment block in neighboring Dubai, which already allowed private ownership of land. Al-Ketbi is also a director of Union National Bank in Abu Dhabi.
The entire article is worth reading for a perspective on wealth of the Abu Dhabi emirate. Illustration:
Citizens of Abu Dhabi are the wealthiest Arabs based on oil revenue per native resident last year. By comparison, residents got $37,000 each from oil in Qatar and $6,000 in Saudi Arabia. The Dubai-based Middle East Strategy Advisors estimates Abu Dhabi and Qatar's native population to be 250,000, while that of Saudi Arabia is 17.5 million.
Abu Dhabi produces about 90 percent of the UAE's oil; about half of the native population of the UAE resides in Abu Dhabi.

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Blogger EclectEcon said...

This is a very important decision for the economy. Freeing up ownership of land may cause an interesting short-term volatility, but allowing it to be transferred to potential owners who can maintain an interest in its use and wealth will surely be of long-term benefit to the economy.

6:43 PM  
Anonymous Lizbeth said...

Thanks for the post, pretty worthwhile info.

10:17 PM  

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