Dubai is a role model for Middle East, says Welch

Welch, who headed up General Electric until his retirement, said: 'Dubai is the perfect model of a diversified economy. Twenty years ago, the only thing that drove its economy was oil; now oil only makes up 20 per cent of its economy.

'Dubai has developed a flourishing tourism industry and real estate market, while its tax system encourages international companies to set up there. This diversified economy is a 'best practice' for the region.

'Moreover, Dubai has found a way to separate politics from business. I know many examples of Saudi companies that have turned down business deals in the USA on the basis of politics - and they have suffered.'

Welch was addressing the event via video-cast from his base in the United States.

He pointed to human resources as the most critical part of a company's operations. 'In my time at GE, I spent all of my time on people. Hiring people is the hardest thing to get right, and I never managed to get it right more than 75 per cent of the time.

'Differentiate between team members: take care of people when they're good and never kick people when they're down. Get the best players on the field and then your team will win.

'And finally, with your best staff: love them, kiss them and pay them beyond belief.'

Welch pointed to conglomerates as an example of flexible business. He said: 'Diverse corporations and multi-business groups are the greatest thing in business as far as I'm concerned - as long as you understand your core competencies.

'Multi-company groups are able to handle economic cycles better but they always need to have a common culture, shared ideas and a single purpose.'

Leaders in Dubai is organised by Leading Minds, part of the IIR international group. The event is sponsored by EMAAR, Saudi Basic Industries Corporation (SABIC), Citigroup, Shell, Nokia and Visa International. Al Hayat, Ameinfo.com, CNN and Gulf Business are the event's key media partners, HP is the technology supporter and the official hotel is The Fairmont, Dubai.