Dubai projects stimulate Djibouti economic growth

[You are to blame]

A more open economy is always a good thing in my opinion.

Dubai projects stimulate Djibouti economic growth
By Shakir Husain, Staff Reporter

Djibouti: City Dubai's involvement in developing Djibouti's port infrastructure, customs regime and a free zone is whetting the East African nation's appetite for more foreign investment. Dubai is estimated to be working on projects worth $800 million in Djibouti, changing the country's economic landscape.

And the country now appears more ready to attract foreign investment in industries and vital infrastructure. Talking to a group of visiting UAE journalists, the country's president welcomed Dubai's role in major projects which include management of sea and air transport facilities, customs, development of an oil terminal and Djibouti's first five-star hotel.

"Since our partnership with Dubai our country has become open. We see people coming to invest in banking, insurance and free zone companies," President Ismail Omar Guelleh said.

With scarce arable land, investments made by DP World, Dubai Customs International, Jebel Ali Free Zone Authority and Nakheel are significant for Djibouti's service sector-led economy. "We are looking forward to enhancing our economy" by strengthening relations with Dubai," Guelleh said.

Location is the most strategic asset that this nation of about 700,000 people aims to use as the government tries to create jobs for its citizens and earn revenues for itself.

Sitting at the mouth of the Red Sea, Djibouti is a crucial point for landlocked Ethiopia's trade with the outside world.

When a war broke out between Ethiopia and Eritrea in May 1998, the Ethiopians were forced to use Djibouti ports.

"We neither had the technology nor the infrastructure to handle this huge traffic," said Abdourahman Mohammad Boreh, chairman of Djibouti Ports and Free Zone Authority, recalling his earlier contacts with Dubai that resulted in DP World's predecessor Dubai Ports International signing a port management contract in 2000. Djibouti now aims to establish itself as a transshipment hub in the region.

A bulk petroleum, LPG, chemicals and edible oil terminal, in which Enoc subsidiary Horizon has a major stake, was formally inaugurated last month.

As economic activity increases, creating support infrastructure has become crucial.

Prime Minister Dileita Mohammad Dileita told the UAE journalists the country needs to boost its electricity generation. He said Djibouti would welcome investments from Arab countries to overcome energy shortage.

According to Said Omar Moussa, president of Djibouti's International Chamber of Commerce and Industry, the relationship with Dubai has made "our dream of becoming a commercial centre more real. We are looking at our Arab partners to see if they have the expertise we require. We are no longer looking at Hong Kong and Singapore but at Dubai," he said.

Aboubaker Omar Hadi, commercial director of Djibouti port, sums up Dubai's contribution. "Dubai has done in five years what the French did not do (to help Djibouti) during 115 years of colonisation. And Dubai is doing it without showing any arrogance. That is the difference."

http://www.gulfnews.com/business/Investment/10029826.html

[belgiumguy]

good news, the rich oil countries are investing alot of money in promising contries.at 2020 africa will be a rich continent i hope

[Matthias Offodile]

I hope that a lot of dubai project will grace many cityscapece al over africa from Cape Town to Cairo!

[Omega]

Good news for Djibouti and the horn of Africa.
I hope this develops the entire region and develops trade and lasting peaceful solutions could be found to the refugees in the horn.

[Harkeb]

The new millenium is most probably the most exciting period for Africa's rise out of the ashes. Mbeki's "African Renaissance" seems to becoming true. Let's hope and pray that self centred autocrates and dictators don't destroy the dream in making.
I have great respect for those countries finally seeing Africa's potential and helping in its upliftment. Even China (a country's politics I detest) is getting my respect in this regard. Way to go to the African leaders who are doing their best to bring wealth & prosperity to their citizens.
It really makes me proud to be african!

[Ras Siyan]

The gouvernment of Ismael Omar Guelleh (current Djibouti President) understood that the fact that Djibouti has almost no natural reserves, no arable land (we import the food from ethiopia) and no good infrustructurewasn't an excuse for the country's economic situation. They made a new Investment Code, much more attractive, created a business friendly environment and made the Foreign Investments a priority. And it did work. Dubai's investment crossed the $1 billion figure since last year, they invested massively in ports (upgrading the old one and financing 33% of the Doraleh mega complex), upgrated the airport (which is managed by JAFZA Group), created free zones (Djibouti and Dorale free Zones), 5 star hotel (Kempinski Palace, developped by the famous Nakheel Group behind Dubai's Palm Islands) ect...
But thanks to Dubai's investments and Djibouti's administrative reforms (now the most opened economy in the region), develloped sectors are mainly:

-Banking (in 2 years 4 new banks opened:a malaysian, a swiss, a somalian and a yemeni bank)

-tourism (1 new 5 star and 1 new 3 stars hotels were built in 2006)

-manufacturing (110 new companies set up in the Djibouti Free Zone) ect... and the list goes on.


And there are mega-projects on the map, such as:

-4 Hotels and a casino to open up in Moucha Islands to be develloped by groups from China (estimated cost $2 billions)

-A new city within the capital city with: office blocks, residential areas, shopping malls, a private university, a private hospital and a marina to be develloped by the Wijaya Baru Group (Malaysian)

-A new city near Horn shaped Island connected to the sea to be built by a Qatari Group including: a 5 star hotel, a mall, 2 towers of 31 and 27 floors, and 210 luxury residential villas, parks, a mosque and aquarium ect...(estimated cost $1 billion)

- Bridge with Yemen and a new metropolis in the North of the country by a Saudi Firm (Middle East Development Group) (estimated cost (over 200 billions, but that includes the twin city in Yemen)

-A new International Airport for the capital to be built by investors from Abu Dhabi (estimated cost 4billions)

-A 20 floors tower to haust a 6 stars hotel, a mall and a covention center near the Presidential Palace by the same Malaysian Group.

Well, I'm exhausted, those are the main 'mega-project" that are planned.
It's very, very difficult to find infos on Djibouti on the net. I get these infos mainly from my cousin that works in the NIPA (National Investment Promotion Agency). I have seen some of these rendres but I can't publish it until they are officially declared to the public. So we'll wait for that moment.

[Ras Siyan]

Djibouti: Using Trade, Foreign Direct Investment, And Workforce Planning to Drive Growth in the Horn of Africa
Ambassador Lange Schermerhorn And Dr. J. W. Wright, Jr.
28 July 2007

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Washington, DC — Djibouti has long been considered a country with little to offer the global economy. But that was before Dubai Ports World (DPW) saw enough opportunity there to make a major investment in the Djibouti Port, and before the U.S. decided to position a Combined Joint Task Force for the Horn of Africa (CJTF-HOA) in Djibouti.

Djibouti has 'location, location, location' to sell. The DPW and CJTF-HOA investments simply began to prove it. Now other logistical support firms are investing heavily, the country is now a central food aid distribution center, and it boasts a new luxury hotel.

Djibouti has had tremendous investment promotion success over the last five years and is now one of the leading FDI areas in Africa. Its government has decided to use its Red Sea position and proximity to Ethiopia to the West and the Arab Gulf to the East, as the driving theme for major investment promotion. But it also recognized that location alone is not enough, so over the past five years it established a Djibouti Free Zone (DFZ), and a new, more modern, foreign investment regime that would support new direct investment into that Zone.

In addition, there have been significant moves to liberalize and facilitate trade with Ethiopia. There have been agreements to co-locate customs operations at the Djibouti Port. The two countries are also working towards adopting harmonized clearance and inspection documents and procedures. The DPW is building 'joint' facilities at the new port at Durlaleh so goods can transit freely into the Ethiopian market. Such innovations lower overall distribution costs, and the positive impacts will extend across the Horn of Africa.

Djibouti's investment promotion success since 2000 has been phenomenal.

The main catalysts have been the DFZ and leading investments in it by such groups as Dubai Ports World and, more recently, by Bahrain Maritime and Mercantile International (BMMI), and parallel investments such as the Kempenski Hotel. The second driver has been expansion of CJTF-HOA base and supporting investments by firms like Halliburton.

But the government and potential investors have other things to consider. In terms of gross investment and volume of containers transferred, all is well and good. If reforms of investment rules in the DFZ are considered a model that can be used for the rest of the country possibly in agreements with Ethiopia, the outcome is also good. If, however, growth is seen through the lens of development and measured by the degree of local employment generation, the results are not so impressive. Unemployment is excessively high and there has been no real move to address workforce development problems.

WORKFORCE DEVELOPMENT

Djibouti wants to emulate Dubai, and while the gap between the two is wide, the model for solving Djibouti's problems may be found in the Dubai model. That model was and is based on economic analysis of the types of investors they wanted to come to Dubai, mainly in the higher level services, and to focus on educating both public and private sectors on the roles of government and in regional service sector economies. Along these lines, Djibouti should: - Communicate to local businesses and foreign investors what sectors will be developed by the government and what sectors will be developed by the private sector, and focus new investment promotion activities accordingly.

- Invest heavily in developing a base of analysis and data production skills so that the private sector can identify economic opportunities and trading relationships for investment.

- Develop integrated strategic plans wherein ministries, municipal agencies, and the Chamber of Commerce can jointly promote regulatory efficiency and public-private partnerships.

In Dubai, the result has been a steady flow of investment from companies ranging from Cisco to Halliburton, and other major international companies that operate around key distribution hubs; notably, these are also global firms that have been early investors in Djibouti. Needless to say, Djibouti is still far from being on par with Dubai, and its workforce issues are very different. Still, by creating a comprehensive investment promotion strategy that focuses on services and workforce development, its growth can translate into greater local and regional jobs creation.

The biggest concern of potential foreign direct investors is probably the state of the workforce in Djibouti. According to a 2002 report on Djibouti's competitiveness by the United States Agency for International Development (USAID), one of the critical constraints "is a workforce that is largely illiterate, lacking in formal education and bereft of the knowledge and skills required by a modern economy." That assessment remains true today. Therefore, to expand investment and the local benefits of foreign investment, workforce education and training in Djibouti must be upgraded. Djibouti could readily undertake the following activities to enhance workforce development: Assess next generation skill sets with labor demand study: Efforts to upgrade skills must be based on projected investment priorities and labor demands. Djibouti should survey potential investors to gather data on the next-generation skills they will need, compare the results with available training opportunities, and identify gaps and priorities.

Strengthen adult and vocational education: The national vocational college system should establish pilot programs in areas such as automated stevedoring, data entry systems, construction electronics, and port operations. The programs should include train-the-trainer and faculty-to-factory activities that upgrade teacher training skills and broaden businesses' access to consulting services.

Establish a polytechnic college: Using the Dubai Chamber of Commerce and Industry model-that is, having local and foreign investors not only utilize but assist in funding the college, the Djibouti Chamber could institutionalize its training activities in a British-style polytechnic with certification and licensing programs in aviation management, maritime operations, and public administration.

Engage and train suppliers: Foreign investors often prefer to procure goods and services locally, but often fail to do so because of concerns over quality, timeliness of delivery, reliability of volume commitments, and adherence to contract stipulations. Djibouti (and its Chamber) should engage its local suppliers in a comprehensive program of supply chain training and technical preparation.

Develop Global Development Alliances (GDAs): USAID often uses GDAs to provide seed money for developing initiatives local and international investors will potentially fund in the future, such as setting up new training centers fo distribution hubs in developing countries.

Engaging youth through YES programs: Youth Entrepreneur Service programs have provided sector-specific training to secondary school and college students and places them in internships with businesses or local associations. Students learn technical skills on the job and are asked to fulfill a social support requirement, applying what they have learned in community service.

Djibouti has set the stage for exponential growth. By partnering with groups such as Dubai Ports World and BMMI, the country's leadership has proven itself savvy at investment promotion. By creating the Djibouti Free Zone and engineering a less burdensome regulatory environment, it shows openness to trade and foreign investment. And by taking a prominent role in leading its neighbors to peace-especially Somalia, but also Ethiopia- it has demonstrated a commitment to regional stability (also true of its work with CJTF-HOA). Simply put, no other country in the Horn of Africa has moved so decisively in the direction of economic and political reform.

As a result, major Arab investment has been made and many global investors are looking to do the same. Yet the impact of these positive moves could be greater still if Djibouti will work with local as well as potential foreign investors to set a comprehensive economic growth strategy that focuses not only on construction but also on service sector infrastructure as well as on workforce development. International actors alert to the benefits of regional stability are certainly eager to assist Djibouti-this rare beacon of economic promise in an otherwise troubled Horn of Africa.-

[abesha]

That's a lot of projects!

How is the popularity of the president? Does he have widespread support? Are Djiboutians happy with his leadership?
I'm very curious about Djibouti but it's a country that I hear very little about.

[Ras Siyan]

Djibouti Journal
Location Gives Tiny State Prime Access to Big Riches

Published: May 30, 2008
DJIBOUTI — For centuries, nomads have dropped down from the rocky hills around here to carve bricks of salt from an ancient lake and haul them away on the backs of camels.

But a new salt miner is giving it a try, and he may be a harbinger of what's happening here.

“As a salt person, my first impression was why was all this salt just sitting here,“ said Daniel R. Sutton, an American salt miner who is overseeing a new $70 million operation to industrialize the collection of Djibouti’s plentiful salt. “There’s 50 square miles of salt. It runs 20 to 30 feet deep. This could be huge.“

Djibouti is becoming the little country of big dreams. Hundreds of millions of dollars of overseas investment is pouring in, promising to turn this sleepy, sweltering mini-state, which right now does not even have a stoplight, into something of an African trade center.

There are gold miners from India, geothermal experts from Iceland, Turkish hotel managers, Saudi oil engineers, French bankers and American military contractors. Tycoons from Dubai are pumping in a billion dollars just on their own, largely for the country’s port, a gateway to the region. There is even a project on paper to build a multibillion-dollar, 18-mile bridge across the Red Sea, captained by Tarek bin Laden, the half brother of Osama bin Laden.

Djibouti does not have many people — about 500,000 — and few outsiders have heard of it. Its soil is mostly sand, it is unearthly hot — often more than 100 degrees — and just about everything, from bottled water to rice to gasoline, is imported.

But if there was ever an example of location, location, location, it is here. Djibouti sits at the mouth of the Red Sea, where Africa and Asia nearly touch. It overlooks some of the busiest shipping lanes in the world, especially for oil heading from the Persian Gulf to Europe and the United States. And because of its strategic position, both France and the United States have military bases here.

Shipping is already big business in this country — and it’s getting even bigger, with investors from Dubai hoping to expand the Port of Djibouti to 3 million containers a year from its current capacity of 300,000. Dubai World, a large holding company, has also bought a controlling share in a local airline and built an industrial park, new roads and a $200 million, five-star hotel, with gurgling fountains and possibly the greenest lawn in the Horn of Africa.

“Djibouti is perfectly positioned to become a services and logistics hub,“ explained Jerome Martins Oliveira, the chief executive officer of the port, which is operated by a subsidiary of Dubai World.

He said Djibouti could become the central link between the raw materials of Africa and the oil wealth of Arabia, with Dubai as its main partner.

Dubai is actually the country’s model for development, said Djibouti’s foreign minister, Mahmoud Ali Youssouf. “We’re a small country with a big port,” he said “And we’re even better located than Dubai.”

Clearly, little Djibouti has a long way to go. While Dubai, one of the seven United Arab Emirates and a very rich city-state, is building the world’s tallest building, the highest building here is six stories. Djibouti is ranked 149 out of 177 on the United Nations human development index, which measures life span, education and income.

But Djibouti’s smallness — it basically has one city, known as Djibouti town — is a virtue, business people say.

“If you need something, the government responds very fast,” said Nikhil Bhuta, the chief financial officer for the JB Group, an Indian mining company. Mr. Bhuta said he had set up mines across Africa but never had he experienced such generous terms of business, like the deal he struck with the Djiboutian government to split gold profits 80 percent for his company, 20 percent for the government.

“In Africa, you never even get 50 percent,” he said.

Other selling points are a stable currency that is pegged to the American dollar, excellent French food and the fact that Djibouti is an outpost of relative stability in the Horn of Africa, a region constantly plagued by war, famine and drought — sometimes all at the same time.

“If you want to participate in the development of this region, Djibouti is the only place to be,” said Ould Amar Yahya, the director of a commercial bank that opened a branch in Djibouti a year ago. “Ethiopia has too many regulations. Sudan has the embargo. Eritrea has serious problems, and Somalia is too violent.”

But there’s a very visible cloud on the horizon: Eritrea. Djibouti’s prickly neighbor recently moved more than 1,000 soldiers into a disputed border zone, and Djiboutian officials fear war may break out at any moment. The troops are heavily armed and literally inches apart.

“We’ve got a lot going on right now,” Mr. Youssouf said. “Maybe the Eritreans are jealous.”

Local customs can also be a bit of a minefield. The population here is predominantly Muslim, divided between Somalis and Afars, a nomadic group that plies the desert and sticks to its traditions.

Mr. Sutton said that shortly after he arrived to begin the salt mining operation, an Afar chief threatened to kill him.

“He was about 4-foot-tall with a 6-foot stick,” Mr. Sutton said.

The chief was apparently angry that Mr. Sutton had not paid his respects. The chief’s people live around the salt flats.

Mr. Sutton said that he had agreed to hire as many Afars as possible and that he and the chief are now friends.

[Ras Siyan]

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Dubai Ports WorldDubai Ports World’s recently inaugurated Doraleh container terminal at Djibouti
March 25, 2009 By: saylac Category: News

Henry Delannoy, Senior Vice-President of Sales and Marketing, CMA-CGM, said: “Djibouti is a key African city with one of the most efficient and state of the art terminals in the region.

Piblished 23 March 2009 webposted 25 March2009

Dubai Ports WorldDubai Ports World’s recently inaugurated Doraleh container terminal at Djibouti received CMA-CGM’s Ivanhoe, with a nominal capacity of 9660 TEU (twenty-foot equivalent container units).

With an overall length of 350 metres, width of 43 metres and gross tonnage of more than 111,000 tonnes, the Ivanhoe is one of four post-Panamax vessels completed late last year by Hyundai’s Ulsan shipyard for CMA-CGM.

The Ivanhoe, on her maiden voyage, berthed at Doraleh, her second port of call after DP WorldDP WorldDP World DPW

Southampton. Doraleh’s 18m draft makes it one of a very few ports in the region capable of handling a vessel of this size.

Anil Singh, Senior Vice-President and Managing Director of DP WorldDP WorldDP World DPW

Africa region, said: “Ivanhoe’s visit to Doraleh affirms the port’s status as a regional hub, and in a wider context as a vital trading link between Europe, Africa and Asia.

“The recently inaugurated deepwater port, now one of the largest and most modern terminals in Africa, is well equipped to handle large vessels such as Ivanhoe.”

Henry Delannoy, Senior Vice-President of Sales and Marketing, CMA-CGM, said: “Djibouti is a key African city with one of the most efficient and state of the art terminals in the region.

“CMA-CGM has followed an aggressive growth and development plan in the region that focuses on creating new services in dynamic trade lanes with a modern, high-performance fleet that helps maintain lower costs. We would like to thank DP WorldDP WorldDP World DPW

for their support in helping us facilitate our shipping and commercial activities in the region.”

Doraleh was opened last month with a total capacity of 1.2 million TEU annually.

Capacity at the terminal is set to grow over time in line with market demand to 3m TEU, a statement said.

By Staff Writer

[Ras Siyan]

http://img91.imageshack.us/img91/5360/doraledjibouti.jpg (http://img91.imageshack.us/my.php?image=doraledjibouti.jpg)

Festivity at the opening ceremony
http://img91.imageshack.us/img91/2568/doralehtazzzz.jpg (http://img91.imageshack.us/my.php?image=doralehtazzzz.jpg)

[Marwa1001]

That's a lot of projects!

How is the popularity of the president? Does he have widespread support? Are Djiboutians happy with his leadership?
I'm very curious about Djibouti but it's a country that I hear very little about.

Even though iam Somali am actually a Djiboutian so i think i might be able to help.:) The President is very popular but than i would be bias since he is related to me through my mother. :)

[Ras Siyan]

Hello Marwa1001, glad to meet a fellow Djiboutian on ssc.

For the "popularity of the president", I'm not so sure. He definatly is popular for his economic reforms, the country is undergoing an economic boom now. But some people critisize him because his administration hasn't done much to fight corruption, tribalism, the spending of the officials (they have lots of privileges) ect... Bit his wife, our first lady, is extreemily unpopular. But overall speaking, people are more concerned with their daily life, and so far jobs were created and things are better than under the previous adminisration (run by an old and tired Hassan Gouled, till his demission in 1999).

P.S: Are you related to Ismael Omar by blood or is it this somali traditional thing (being from the same tribe)?

[Marwa1001]

Ras Siyan

Nice to meet you too walaalo actually he is related to me because my grandmother is reer Guled Abdidoon. As for the Current President your right there is alot of corruption but than this is Africa.

[Ras Siyan]

March 11, 2008

Fortune Magazine - It’s always tough driving in the wilds of East Africa. But in the tiny country of Djibouti, our driver explains, it’s tougher than usual. "Djiboutian goats don’t scare," he says, holding down the horn and swerving. We’re driving 100 mph the wrong way down a winding road through terrain so apocalyptic that British soldiers, back when they ruled the world, nicknamed this parched earth the Furthest Shag of the Never-Never Land.

Sultan Ahmed bin Sulayem, a slight man of 53 with rugged features and a serious face, rides shotgun. He is the founder and chairman of Dubai World, a holding company that, he says, has $100 billion in assets, including one of the world’s largest port operators, a mammoth private equity house, retailer Barneys New York, and the developer of Dubai’s odd palm-tree-shaped islands. (You also may remember that one of its subsidiaries had control of six U.S. ports until Congress objected to handing the keys to a Middle Eastern company.)

Bin Sulayem is on his way to Lake Assal, a giant salt lake that could be the capital of Never-Never Land. Hidden in a crater some 500 feet below sea level, it looks almost prehistoric, with turquoise water lapping on vast expanses of blinding-white salt flats surrounded by black volcanic peaks. It’s here, more than an hour from electricity or running water, that bin Sulayem says he wants to build a five-star resort complete with a spa and golf course.

He admits there are complications. For one thing, how do you build a golf course on what looks like a polar ice cap? "No problem," he says, the salt crunching under his feet like fresh snow. "We will just paint the golf balls orange or black." Swimming might be a different matter. "The last time I was here I went right in," he says as he walks up and dips his hand into the warm, silky water, the planet’s saltiest. "But with this wind the water will get in our mouths, and it will burn."

Bin Sulayem sees Djibouti (pronounced ja-boo-tee) as a future Dubai - a sort of rags-to-riches story in the making. It sits on a strategic port at the mouth of the Red Sea, and has untouched beaches and that bizarre salt lake. Of course it also has little fresh water, a nearly 60% unemployment rate, and a chief export business of skins and hides. But in the past few years Dubai World has invested more than $800 million here, in projects such as a new port and free-trade zone, a luxury hotel, and paved roads. It even bought an airline to be the country’s national carrier.

It sounds crazy unless you consider what happened in bin Sulayem’s hometown. Just 30 years ago Dubai wasn’t much more than a struggling stretch of desert with a tiny bit of oil. Today, thanks to companies like Dubai World, it is a bustling mecca of Las Vegas-style tourism and New York-style capitalism with countless luxury hotels, dozens of skyscrapers, and 20% GDP growth in 2006. Bin Sulayem believes he can recreate that magic in Djibouti - and in many other unlikely places.

As we’re heading back to his Kempinski Djibouti Palace, his phone rings. It is his pilot. "We should look at the national parks we just purchased," he says. "Want to go to Rwanda?"

Dubai-ification

The Dubai story is remarkable: A small city-state running out of oil saves itself by building an international port, audacious "seven star" hotels, and indoor snow skiing. But recently, as the emirate’s extraordinary growth has begun to flatten, its ruler, Sheikh Mohammed bin Rashid Al Maktoum, decreed that three of his big companies - Dubai World, Dubai Holding, and Emaar Properties - expand their reach. "He said, ‘Get out of Dubai and then prove that you can be successful,’" bin Sulayem says.

Dubai has little choice: It needs to invest outside its borders to maintain stability and keep growing at home. For a Gulf country, that typically means throwing gobs of cash into so-called sovereign wealth funds, which mostly make passive investments in equities and government bonds. But Dubai has more than cash to invest abroad - it has expertise.

So while petroleum-rich Persian Gulf states like Saudi Arabia, Kuwait, and Abu Dhabi acquire chunks of companies like Citigroup (C, Fortune 500), Dubai is on an international building spree. And it’s not just hotels and tall buildings - the emirate’s companies are selling the developing world nothing less than promises of Dubai-style economic success. Its developers are building a $27 billion city in Saudi Arabia, $20 billion worth of luxury projects in Algeria, resorts in Morocco, housing in Vietnam, ports in Indonesia, free-trade zones in Senegal, and game parks in South Africa. "Dubai is seemingly so successful that it has become a brand to these countries," says Christopher Davidson, a professor at Durham University in England who just published his second book on the United Arab Emirates. "Governments want to have a little bit of what Dubai’s been able to do at home, and Dubai needs to find places to keep growing."

That explains why Dubai World’s chairman finds himself spending so much time in places like Djibouti. Though his company has substantial stakes in decidedly First World holdings such as MGM Mirage (MGM, Fortune 500) and Britain’s Standard Chartered Bank, bin Sulayem sees real prosperity in the Dubai-ification of the world. His formula: Run a country’s port, establish free-trade zones, and build luxury hotels and housing nearby. Sometimes countries simply give land to Dubai World to develop; in other instances the company acquires or leases property, usually at rock-bottom prices. The real money, bin Sulayem reckons, will come when these countries prosper and attract even more foreign investment. That’s when the developer of these mini-Dubais will see the value of its original investment truly multiply.

Rebuilding Rwanda

Wheels up for Kigali is at 7 A.M. It is Sunday, and bin Sulayem looks wiped. Dubai World has just purchased rights to develop resorts in two of Rwanda’s decrepit national parks, and he has yet to see one of them in the daylight. "Most companies will say, ‘Why bother?’" he says. Bin Sulayem speaks fast and gestures wildly when he’s excited - something that happens often. "They say, ‘Why bother with such small projects?’ But that’s where they are wrong: The best stuff always starts small."

More than a decade after a brutal civil war and genocide ravaged this country, Rwanda is stable, but its business sector is largely undeveloped. After hearing bin Sulayem speak at an East African economic forum in Djibouti two years ago, Rwandan President Paul Kagame became convinced that Dubai was the model he should try to replicate - essentially buying the premise that high-end tourism can jump-start an economy. After a year of lobbying by Rwandan officials, bin Sulayem visited last October. A week later Dubai World agreed to invest $230 million. A week after that, engineers, architects, and planners started arriving.

Akagera National Park, isolated on the country’s border with Tanzania, is quintessential African savanna, with tall grass and rolling plains. Speeding through the park in 4×4’s, we make a left at a sign that reads GIRAFFES. (We see a few.) The amateurish signage and overall neglect surprises bin Sulayem, who owns parks in South Africa. "My God, if you go to Disney’s Animal Kingdom, the African safari experience is better than that," he says later. "I want to bring the South Africans. They know what to do - what plants to put in, what animals to put where."

It will take some time before Dubai World - or Rwanda - sees much of a return on the investment. Hotels have to be built, parks need to be redesigned, and the airport must entice more airlines. But Vincent Karega, Rwanda’s minister of state in charge of industry and investment promotion, is optimistic, saying the country will have 100,000 tourists by 2010. (Last year it had 21,000.) After that, he says, the economy will boom. "I have no worries," Karega says. "These Dubai companies have done all this before."

The making of Dubai

When bin Sulayem was growing up, Dubai was not much more than a small trading and pearl-diving port around a creek. Many of its residents lived without electricity or running water in simple thatched huts. While bin Sulayem’s family had a modest house - his father was a government minister - he remembers there was little to do. One popular pastime was trying to swim across the creek without being whacked by the oars of the wooden ferryboats known as abras.

The pace didn’t quicken until oil started flowing in the 1960s. After the British pulled out in 1971, Dubai became one of the seven members of a federal United Arab Emirates. But since Abu Dhabi, 90 miles north, had about 90% of the UAE’s oil reserves, Dubai’s rulers had to think of other ways to grow their economy. The emirate, which doesn’t collect income tax, welcomed expatriate workers and invested heavily in what were then bold infrastructure improvements: a massive airport, a large dry dock, and, in 1976, the world’s largest man-made port, some 30 miles from the creek.

Around this time bin Sulayem graduated from Temple University in Philadelphia. His first job was as a customs officer at the new, empty port. "We were so bored," he says, "that if someone barged into our office by mistake, that was an exciting day." One such mistaken visitor suggested that tea would be a good industry to lure into the port. Since it is a commodity that traders buy from different markets, the thought was that if Dubai could create a free-trade zone - or an area where foreign companies could manufacture and trade without taxes or tariffs - then companies would blend the tea there.

Bin Sulayem was enticed by the idea. So during one summer vacation he bought an around-the-world plane ticket and flew to wherever free zones were popping up - Hong Kong, South Korea, Singapore, Taiwan, Honolulu, Dallas, New York. When he came back, he was so convinced that this was the key to Dubai’s success that he personally pushed a proposal to Sheikh Mohammed, now Dubai’s ruler, to build one near the port. (The government had studied the idea before but had never acted.) Sheikh Mohammed told the young man, "So if you really believe in it, you go run it.” Bin Sulayem adds: "I was 30."

The enormous new port, along with the free-trade zone surrounding it, grew fast, thanks to its geographically central location and world-class facilities. At first there were no tea blenders, but British Petroleum (BP), Bridgestone (BRDCY), and Sony (SNE) soon established distribution and manufacturing facilities. The port’s growth, coupled with the success of the airport and Emirates Airlines, helped create a demand for housing and hotels - particularly beachfront resorts.

In 1997, Sheikh Mohammed asked bin Sulayem to find a way to increase Dubai’s coastline. The young executive found an architect who sketched plans for a circular island with seven kilometers of beachfront. Sheikh Mohammed was unimpressed. "Seven?" he asked bin Sulayem. "Why not 70? It doesn’t have to be round."

The solution: Bin Sulayem dredged nearly 100 million cubic yards of sand from the Persian Gulf, along with seven million tons of rock, to form a man-made island in the shape of a palm tree; each frond has its own beach. Bin Sulayem and his family live in the resulting creation, the Palm Jumeriah, which more than doubled the coastline of Dubai and created waterfront condos and homes for 60,000 people, plus 35 hotels. It sold out so quickly - within a week - that Dubai World’s real estate arm, Nakheel, broke ground on two additional palms, each bigger than the previous one. And as if that weren’t enough, Sheikh Mohammed got it into his head a few years ago that he wanted even more. "He says to me, ‘Why don’t we build the world?’" bin Sulayem recalls. We were sitting in his Dubai office on the 47th floor of the Emirates Towers. From there a visitor can sometimes see the result: a maze of some 300 islands clustered in the shape of the seven continents. They called it the World.

Beyond borders

Now bin Sulayem wants to bring a bit of worldliness to places Western developers often find too risky. "Many of these African countries believe the only way to develop their economy is if the World Bank helps them," he says. "That’s wrong. If you open your market and you encourage foreign capital, you’ll give confidence to many of your people to invest back in the economy."

It is an optimistic, classically Dubaian point of view. This isn’t surprising, given that the emirate’s companies have thrived in their home market where land is largely free, regulations are few, and friends and favors are plentiful. Doing business outside this mirage is not as idyllic. Mohamed bin Ali Alabbar, chairman of developer and Dubai World rival Emaar Properties, says that in Morocco, for example, he has found it difficult to find and manage contractors that can build housing with the speed and quality Emaar is used to at home. "I wish I had more people," he says over tea at his new Palace Hotel, in the shadow of the Burj Dubai, which Alabbar claims will be the world’s tallest building. "I wish we had more firepower."

And yet Morocco, where Emaar first broke ground in 2006, offers early evidence that the Dubai experiment is working. Nicholas Maclean, managing director of CB Richard Ellis in the Middle East, says the Emaar projects are attracting other foreign investors, including European expats buying residential properties. "Their timing has been incredible," he says.

But analysts say Emaar and Dubai World may be spread too thin. As these companies operate farther afield, they may have trouble managing and executing their projects, not to mention being profitable. Indeed, last year publicly traded Emaar posted net income of $1.8 billion on revenue of $4.8 billion, but its expenses rose 51%, partly reflecting the higher cost of operating in new markets. (Dubai World, which is wholly owned by the government, does not release its numbers.)

None of this slows down bin Sulayem. On a warm December day in Djibouti he drives out to see the new port he’s building there, which he hopes will become Africa’s largest. As he drives away, he admits it will take some time for this investment to bear fruit. "I’m a believer that anything long term is good," he says. "Short term is not relevant."

By that rationale it makes sense that bin Sulayem’s favorite hobby is endurance horseracing. It’s an extreme sport that can involve riding 100 miles through the desert for ten hours straight. "You have to learn to pace the horse," he says. "If you walk, you never finish." In a 160-kilometer race through the UAE in January, bin Sulayem finished even after falling off his horse and injuring his ribs so badly he was unable to breathe fully. No matter. Two days later he announced he would build the Universe, a man-made archipelago off Dubai in the shape of the solar system, with the sun and the moon and a string of planets in between. The World is obviously not enough.

Fortune Magazine