When an economic crisis in Uruguay strained the finances of Pio Olascoaga Amaya’s family farm, he found salvation halfway across the world: the horse racing industry of Dubai.
Olascoaga took one of his horses from Uruguay to try his luck in an endurance race in Spain. After the horse finished third, he was able to sell it to a trainer working for Sheikh Mohammed bin Rashid Al Maktoum, Dubai’s ruler and an avid sponsor, owner and rider of horses.
That led to Olascoaga establishing business ties with Dubai and 10 years later, at the age of 31, he helps run a family business selling Uruguayan-reared horses with Arabian blood to the United Arab Emirates (UAE). He acts as an agent for other farms in Uruguay as well as his own farm, which has 600 horses.
Photo:Reuters
“If I sell a horse in Uruguay for let’s say US$20,000 on average, here you can sell at a minimum US$40,000,” he said.
The margin makes it worth paying the US$10,000 cost of transporting a horse by plane from Uruguay to Dubai, more than 17 hours away.
“Here in the UAE is the Formula One of horses. They need horses all the time and from all around the world,” Olascoaga said.
As the oil-rich Gulf economies boom, the hobbies of its wealthy local populations tend to become big business — and nowhere is that more true than for horses, a traditional passion of the region’s Bedouin tribes.
Dubai, with its large tourist sector and web of international transport links, has emerged as the focus of the horse business in the region. The business took a hit from 2009 to 2010, when Dubai was forced to restructure billions of US dollars of corporate debt, but has since bounced back with the local economy; the Dubai World Cup race, launched in 1996, attracted 65,000 spectators this year.
“This is something very important for Dubai, for tourism,” said Saeed H. al-Tayer, chairman of Meydan Group, which operates the opulent racecourse where the World Cup is held. He said the racecourse has a capacity of 85,000, but it could be expanded to 120,000 if needed.
The UAE is famous for endurance races across the desert by “drinkers of the wind,” as locals sometimes refer to Arabian horses. About 50 races of 80km to 240km are held in the cooler months between October and March.
About 2,000 active endurance horses and 87 racing stables are listed by the Emirates Equestrian Federation; which compares to about 800 such horses in France, where long-distance riding is also popular and which has a human population about eight times the size, data from the Federation Equestre Internationale shows.
Dubai is also a world power in flat racing; its annual World Cup in March is the world’s richest race with a US$10 million purse. The average flat race in the UAE during 2010 offered 100,073 euros (US$130,000) of prize money, the highest level in the world, according to the International Federation of Horseracing Authorities.
Even show jumping, historically more of a focus in Western countries, has been growing in the UAE. One recent -competition offered 260,000 dirhams (US$70,800) of prize money, while show jumping horses bought for as little as US$5,000 in Eastern Europe can fetch prices of US$80,000 in the UAE if they perform well.
Traditionally, Dubai’s wealthy have cherry-picked the world’s top horses at sales abroad. UAE Prime Minister Sheikh Mohammed was the biggest purchaser in an auction of two-year-old thoroughbreds last month at Europe’s largest auctioneer, Tattersalls of Britain.
He bought a colt sired by 2004 European Champion Shamardal for US$844,000, the third-highest price ever seen at the sale.
“We are used in the Emirates to picking the best horses in the world,” said Dubai First Deputy Prime Minister Sheikh Hamdan bin Rashid Al Maktoum, who owns about 1,000 horses around the globe, told the Dubai Racing television channel.
However, the industry is also supporting the development of home-grown businesses within the UAE. Several studs in the UAE breed pure Arabian horses, not only for races, but also for horse beauty contests, which are -popular across the Gulf Arab region.
“It is a very good business,” said Khalid Ghanem al-Omairi, general manager of the Ajman Stud, which belongs to the crown prince of Ajman, another of the UAE’s seven emirates.
“Every year we have about 35 mares for breeding, but out of these 30 to 35 you may get only three or four good ones,” said Omairi, whose stud has about 80 horses, some kept in the US and Germany.
Dubai’s Godolphin stable has made US$14.8 million in prize money so far this year. That brings the total to US$232 million since 1992.
In some ways, the economics of the horse business in the Gulf are difficult. In contrast to Europe, the desert terrain means the roughly 7,000 horses in the UAE have little chance to graze, pushing up owner’s costs. Hay is imported from as far away as Canada along with feed, tack and other products.
The UAE’s hot climate also means hooves grow faster, so a farrier has to change horseshoes every five weeks, one or two weeks earlier than in Europe, farrier Alexandre Chuette said. Grooms are paid as little as US$330 per month in the UAE because they can be hired easily from nearby low-wage countries such as India and Pakistan. However, monthly stable, feed and grooming costs typically range from US$650 to US$1,090 or more, compared to about US$450 to US$970 in Britain, people in the industry said.
Total annual costs of keeping a competition horse can top US$30,000, said Martina Boor, managing partner at Horseworld tack shop.
However, cost considerations are unlikely to sway the behavior of the affluent citizens of the UAE.
“I think that in the future, horse racing in Dubai and in the UAE will increase,” Dubai crown prince Sheikh Hamdan bin Mohammed Al Maktoum said after handing out trophies at a recent endurance race.
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
RESHAPING COMMERCE: Major industrialized economies accepted 15 percent duties on their products, while charges on items from Mexico, Canada and China are even bigger US President Donald Trump has unveiled a slew of new tariffs that boosted the average US rate on goods from across the world, forging ahead with his turbulent effort to reshape international commerce. The baseline rates for many trading partners remain unchanged at 10 percent from the duties Trump imposed in April, easing the worst fears of investors after the president had previously said they could double. Yet his move to raise tariffs on some Canadian goods to 35 percent threatens to inject fresh tensions into an already strained relationship, while nations such as Switzerland and New Zealand also saw increased