Richer than you, ranked below the Philippines

THE UAE is one of the richest countries in the world.

Home to almost 10% of the earth's oil — with a national population of little more than one million, the butter is spread very thick.

The CIA ranks the Emirates 19th in terms of GDP per capita, which at $40,000 beats Canada, Sweden and Britain.

But that didn't impress the guys at index company MSCI Barra, who this week said the UAE is not fit to call itself an emerging market, let alone a developed one.

To be fair, they were only referring to the country's stock markets.

MSCI conducted its regular review of countries whose stocks can be included in its MSCI Emerging Markets index.

The UAE, it said, must remain a so-called Frontier Market a little while longer. Why did the UAE fail to make the leap?

MSCI blamed "the lack of formal segregation between custody and trading accounts", and pointed to limits on foreign ownership of stocks.

In defence of the UAE, its formal stock markets are less than a decade old.

MSCI acknowledged that the regulator has made good strides in bringing them up to international standards. They're just not quite there yet.

This matters because the MSCI Emerging Markets Index is followed slavishly by global fund managers, many of whom are barred from investing outside it.

"This would be very significant news if and when it eventually happens," says Ali Khan, managing director at Arqaam Capital in Dubai, a broker that helps global institutions invest in the region.

"I wouldn't be surprised to see a doubling of liquidity from international participants in UAE markets."

Some hedge funds do play local markets, but by their nature they flit in and out.

The kind of foreign investment the UAE wants is the boring buy-and-hold capital from pension funds.

For now, it can only aspire to join countries such as Morocco and the Philippines, where GDP per head is 10% of the Emirates.

Gulf carriers lift Paris Air Show

Etihad Airways, owned by the Abu Dhabi government, lifted some of the gloom at the Paris Air Show this week with a $7 billion order for engines.

That's modest compared to the $43 billion of aircraft orders it placed at Farnborough last summer.

Still, during the downturn, the aviation industry will take all the help it can get from wealthy Gulf carriers.

No financial crisis for Burj Dubai

The credit crunch has failed to dent the Gulf's appetite for record-breaking skyscrapers.

Emaar Properties is putting the finishing touches to Burj Dubai, which will top 800 meters when it opens in September.

The same company said this week it's talking with developers in Saudi Arabia about building a tower that will reach a kilometre.