An abundance of ice and electricity in Dubai 65 years after banking milestone

“When I arrived, there was still some suspicion, scepticism even, among ordinary people, including many of the merchants. But it was still a big thing, that a big-name bank had shown such confidence in Dubai and its future.”

Thus wrote George Chapman, an employee of the Imperial Bank of Persia, in the early 1950s, on the occasion of his bank agreeing a deal with Sheikh Rashid bin Saeed Al Maktoum to open the first bank in Dubai. “Sheikh Rashid viewed the arrival of a modern bank as a key component in his desire to build a modern economy and sheikhdom,” Mr Chapman went on.

It had been a job of persuasion, on the bank’s side rather than Sheikh Rashid’s. An earlier emissary from the bank, sent on a mission of market research, had described Dubai as having “neither electricity nor ice”, with a bad climate and poor drinking water. The banking climate was no better. “I was astonished at the amount of hard cash kept in boxes. I do not anticipate a rush to place large sums in current accounts,” he concluded.

These quotations are from a forthcoming history of banking in the region, and I was led to them because this year HSBC is marking 65 years in the UAE. Mr Chapman’s Imperial Bank soon after became the British Bank of the Middle East (BBME), and was later acquired by HSBC.

The decision was to prove a success for both Dubai and the bank. BBME supplied much of the finance for the project to dredge Dubai Creek, which was the start of its growth to become the regional trading hub.

Gradually, Dubai replaced Bahrain as the Gulf’s banking centre. And you must assume HSBC has found the whole exercise profitable over its 65 years here. Its retail banking HQ in Bur Dubai, by the bustle of souqs and abras, still has some of the feel of the old Dubai to it, but with plenty of electricity and ice these days.

It’s a fascinating story of how banking, business and urban development can come together for mutual benefit, but all that nuance is lost on those crabby old lefties at Britain’s The Guardian newspaper.

The paper’s media section got hold of a new global advertising campaign HSBC has launched, and misleadingly labelled it as a campaign to mark the bank’s 65 years in the UAE.

The Guardian obviously has no time for either HSBC or the UAE. The bank it labels as a “tax evasion service” on account of various, ahem, allegations made against it in recent months. The bank admitted its shortfallings and assured us that it would not happen again.

End of story as far as I’m concerned. I’ve never really been able to regard minimising your tax bill as a serious crime anyway.

The Guardian doesn’t see it in quite the same light. It’s a deeply held belief at the newspaper that everybody must pay up, even if the taxman has got the sums wrong, even if you don’t agree with what the tax is spent on by a government which doesn’t share your spending priorities. And even if you don’t use the services the tax provides.

When I left The Observer, the august Sunday newspaper owned by Guardian Media Group, some nine years ago to head to Dubai, I threw quite a lavish party to say farewell. At the end of an evening’s fun at my expense, one newspaper executive came up to me and said sarcastically: “Off to Dubai eh Frank? Don’t worry, we’ll pay your tax for you while you’re away.”

Some people, inexplicably, just love tax.

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