Erme Estuary under a winter sun

30 January 2013
#samsungography panorama #low-res

Mars lands in Dubai

30 January 2013

US pop artist Bruno Mars will make his Middle Eastern debut in Dubai.

The ‘Just the Way You Are’ hitmaker is set to perform at Dubai Media City on Friday April 12.

One of the biggest names in pop right now, Hawaiian-born Mars was named the world’s best-selling digital artist of 2011. Since bursting onto the charts a year earlier, the 27-year-old star has clocked three US Billboard number ones, shifting a total of 40 million singles.

As well as scoring smashes with ‘Grenade’ and ‘Locked Out of Heaven’, Mars has proved a hit with the critics, winning Best International Male Solo Artist at the UK’s BRIT Awards last year.

Tickets, starting at Dhs295, are available from www.brunomars.ae

Why Balotelli will be missed

29 January 2013

A list of alleged acts perpetrated by the Italian in his short but colourful career: Balotelli leaves Manchester City for Milan and English football loses one of its few entertaining characters:

He once went on TV wearing an AC Milan shirt with his name on the back while playing for Inter

After the FA cup final, he said “ I have been shit this season, am I allowed say shit on TV? All of which was broadcast live.

Won £25,000 in a casino one night, then proceeded to give £1,000 to a tramp outside

He brought his Ipad to the bench for Italy’s international against the Faroe Islands because he wanted to play games on it.

Chanted “Rooney, Rooney” at the prostitute who claimed to have slept with Wayne Rooney

Sent to John Lewis by his mother to buy essentials for the house, like an ironing board, Mario came back with a giant trampoline, a Vespa and Scalectrix.

After he won the European Golden Boy trophy, Balotelli said he had never heard of Jack Wilshere, he then said would find out who he was so he could remind Wilshere he came second.

He once escorted an errant Manchester schoolboy back to his school, then promptly confronted the child’s alleged bullies.

Was involved in a fracas with 4 bouncers after breaking the “no touching” rule at a strip club.

Was stopped by police going around his hometown of Hulme with £ 25,000 cash in the passenger seat. When asked why he replied " because I'm rich"

Drove his car into a women's prison because he wanted to "look around"

Was seen in a Manchester shopping centre "hi-fiving" city fans the day after City had beaten United 6-1

Hands £50 notes to strangers when out shopping in Manchester.

Went in to Manchester Uni library and tried to pay off all outstanding book fines for everyone.

He once threw tomatoes at a Serie A manager.

He threw darts at youth team players at the club's Carrington training ground.

He parked his Bentley outside a Manchester school and wandered in to ask if he could use the toilet

Air hub wars - Dubai v Istanbul

29 January 2013

The biggest threat to Dubai's dominance of international air travel may not be Abu Dhabi or Qatar. It certainly is not Singapore. But it may soon be Istanbul. In addition to the very rapid growth of Turkish Airlines the country has launched a tender to build the world's largest airport in Istanbul at an estimated cost of over 7 billion euros ($11.3b), an official from the country's airports authority said.

The project foresees the construction of a six-runway airport eventually capable of handling 150 million passengers per year, Transport Minister Binali Yildirim said.

That would far outpace Hartsfield-Jackson airport in the US city of Atlanta, which is currently the world's busiest with over 90 million passengers likely to have been served in 2012.

Plans are to have operating by 2016 facilities capable of handling some 100 million passengers per year at an expected cost of over 7 billion euros.

Meanwhile Dubai will still be operating out of the creaking DXB until sometime in the mid 2020s as a result of slowing down the development of the new Al Maktoum airport.

Turkish media reported that a number of local and foreign companies including Turkish TAV Airports, partnered with French airport operator Aeroports de Paris, and Dutch airport operator Schiphol Group were interested in bidding to build and operate the airport for 25 years.

The project is part of plans to make Istanbul a global hub initiated by the Islamic-rooted government of Prime Minister Recep Tayyip Erdogan.

There is also much talk of an alliance between Turkish and Lufthansa; a combination of Star Alliance partners that could create the world's largest airline group.

CAPA notes that combining the Lufthansa Group with Turkish Airlines would create the world's second largest airline group after Delta Air Lines based on capacity, with about 3.8 million weekly seats compared to 3.9 million for Delta. Given the rapid rate of growth at Turkish, which has seen its monthly passenger and seat figures increase by about 40% over the last two years, it would not be surprising to see a combined Lufthansa-Turkish emerge ahead of Delta as the world's largest airline group in terms of seat capacity.

Turkish Airlines is also on a buying spree with talk of plans to order more than 100 narrow-body planes by the end of March. The airline is also finalising five new Airbus A330-300 orders this week on top of the 35 wide-body aircraft ordered from rivals Airbus and Boeing last year.

The airline ordered 20 Boeing 777-300 and 15 Airbus A330-300 last year. 

It launched 33 new destinations in 2012, and the carrier hopes to open as many as 40 new routes in 2013, around a quarter of them to Africa, and will be flying to every country in Europe by the end of the year.

By the end of 2013 Turkish will have 219 aircraft in its fleet growing to over 350 planes by 2023.

The airline CEO, Temel Kotil, explained to Europolitics that Istanbul is Europe’s natural hub for passengers heading to Asia and Africa. He says the airline now has a 66% share in the transfer passenger market between Europe, the Far East, the Middle East and Africa.

And it is Istanbul's closeness to Europe that is its advantage - it can fly smaller planes on more frequent schedules to its Istanbul hub and then transfer them onto Africa and Asia-Pacific.

I do think Turkish has some image issues including around safety. It has tried to use celebrity endorsements to improve this image. But a tie up with Lufthansa would also help address inage concerns.

It is clear that Turkish has very serious ambitions.

Emirates announces Haneda

28 January 2013

Main fleet crew will be happy with this announcement as Emirates is to add daily non-stop flights to Tokyo’s Haneda airport from June 3, its third Japanese destination.

Currently Tokyo's Narita airport is served by a daily A380 flight.

The carrier will serve Tokyo's convenient Haneda airport with a three-class B777-200LR aircraft, featuring eight first class suites, 42 angled lie-flat business class seats and 216 seats in economy.

Flight EK312 will depart Dubai at 0935, arriving into Haneda at 0001 the following day, with the return leg EK313 leaving Tokyo at 0130 and landing back into Dubai at 0705. Japan Airlines will codeshare on the new Dubai-Haneda route.

Emirates launched flights to Osaka in 2002, followed by Tokyo’s main international airport Narita in 2010. Emirates also served Nagoya but dropped that route in 2009.

Haneda serves as Tokyo’s principal domestic airport, but restrictions on international services were lifted in 2010 (see online news March 29, 2010). Several carriers launched new routes to Tokyo’s close-in airport, although progress was slowed by the devastating earthquake and tsunami which hit Japan in March 2011.

UK v Europe - a five year battle is just beginning

23 January 2013

So David Cameron wants to renegotiate Britain's role in the European Union.

But the British have little idea about what is really going on in continental Europe and the country may easily misjudge its options. An acrimonious exit from the EU is now very possible.

All of Europe would suffer under such a scenario. But for Britain, a small and highly indebted island struggling to avoid its third recession in five years, ejecting itself from its dominant market could be a devastating blow.

Britons who clamor for independence from their major market may have to think hard about whether they really want to risk ending up in a diminished Little England with increasing public debt, rising inflationary pressures and little clout on the global scene.

Here are the key points of Cameron's speech this morning.

• Cameron said that if the Conservatives win the next election they will hold an in/out referendum on Britain's membership of the EU before the end of 2017. He has been dropping strong hints about including a referendum in the 2015 manifesto for some months, but today we got the official confirmation, as well as detail about the timing and a clarification that it would be an in/out referendum on membership, not just a referendum on whether or not to approve the new terms of membership.

• He set out his broad aims but avoided going into details about what he would demand as part of the planned "new settlement" with the EU. However he did suggest that the working time directive should be abandoned. There were few details about what changes would be requested or acceptable.

• He called for a full EU treaty renegotiation. But he said that if this did not happen, he would seek to achieve the reforms he wanted through other means.

• He sidestepped questions about whether he would be willing to recommend a "No" vote in the referendum if he failed to achieved what he wanted in the renegotiation.

• He implied that, if the Tories had to form another coalition after the election, he would make a referendum an essential condition of a coalition agreement. There would be a referendum if he were prime minister, he said.

• He said that he hoped that a referendum would settle the issue of Britain's relationship with the Europe for at least a generation. There was a parallel with the need to have a referendum in Scotland to settle the independence question, he said.

• He insisted that Europe as a whole, and not just Britain, would benefit from the EU being reformed.

• He said that the EU should abandon the commitment to an "ever-closer union" included in its founding treaty.

• He dismissed the idea that Britain would do better being outside the EU like Norway or Switzerland.

• He said that "much more" needed to be done to make the European court of human rights more acceptable to Britain.

Britain enjoys a position of influence in the European Union; and the major powers of the USA and China look to the EU as their trading partner; not to the individual nations. If Britain does exit the EU it should not expect any favours from the major EU partners and its position as a competitor rather than a partner will have long term consequences to Britain and in particular to London in its role as Europe's leading financial services center.

Another shocking lese majeste sentence in Thailand

23 January 2012

A Thai court has jailed a magazine editor for 10 years for publishing articles that were deemed to have insulted the monarchy.

Somyot Pruksakasemsuk, who is also a prominent political activist, was sentenced in connection with two articles in the magazine.

Rights groups and the European Union have condemned the verdict. The European Union said it "seriously undermines the right to freedom of expression and press freedom".

"At the same time, it affects Thailand's image as a free and democratic society," AFP quoted the EU's delegation in Bangkok as saying.

Somyot and the magazine he edited were closely aligned with Thailand's "red-shirt" movement, which led anti-government protests in 2010 that shut down parts of Bangkok.

He had been detained without bail since April 2011 and his supporters have complained that he has been mistreated in custody. He appeared at court in shackles. This may be standard court practice in Thailand but it appears primitive.

The two articles for which Somyot was charged were written by Jit Pollachan, the pseudonym of Jakrapob Penkair, the exiled former spokesman of Thaksin. Jakrapob, now living in Cambodia, has never been charged with any crime for what he wrote.

Somyot was arrested a year later, five days after launching a petition calling for a review of Article 112, which says those who defame the monarchy face jail.

The court handed him five-year terms for each magazine article, with an additional year added from a suspended defamation case from three years ago. "The accused is a journalist who had a duty to check the facts in these articles before publishing them. He knew the content defamed the monarchy but allowed their publication anyway," a judge said in passing sentence.

His lawyer said he would appeal.

Brad Adams, Asia director at Human Rights Watch, said the ruling "appears to be more about Somyot's strong support for amending the lese majeste law than about any harm incurred by the monarchy".

Amnesty International described the ruling as "regressive". "Authorities in Thailand have in recent years increasingly used legislation, including the lèse majesté law, to silence peaceful dissent and imprison prisoners of conscience," said the group's deputy Asia-Pacific director Isabelle Arradon.

"The lese majeste law should immediately be suspended and revised so that it complies with Thailand's international human rights obligations."

Earlier this month activist and comedian Yossawaris Chuklom, a "red-shirt" supporter, was jailed for two years under the laws for a speech he made at a rally in Bangkok during the 2010 "red-shirt" political protests in Bangkok.

Current Prime Minister Yingluck Shinawatra, Thaksin's sister, promised to amend the law during her 2011 election campaign but has done nothing since coming to office, causing divisions among her supporters.

More details here: Thailand: Editor Convicted for Insulting Monarchy and here.

Bye Bye the QE2

17 January 2012

The QE2 is leaving Dubai - but where will it go: The Queen Elizabeth 2 (QE2) was acquired by Istithmar of Dubai for US$100m in 2007. It is to be relaunched as a 500-room floating hotel in an unnamed Far East city, new owners Drydocks World (DDW) said today.

DDW, which has taken over management of the 45-year old vessel from Dubai World's investment arm Istithmar, said it will undertake classification checks prior to the ship’s renovation as a five-star hotel.

The project will be managed by Singapore-based Oceanic Group, with the ship relocated from Dubai’s Port Rashid to an Asian city with "a rich maritime heritage" and "prominent waterfront". Maybe Macau?

The renovation plans will include a shopping mall, a QE2 Café offering meals similar to those served during cruises, three Michelin-starred restaurants, convention and meeting facilities and an onboard maritime museum displaying QE2 and Dubai memorabilia.

An operator will soon be appointed to manage the hospitality elements. In July 2012 Bloomberg reported Istithmar was in talks with three hoteliers, including Dubai’s Jumeirah Group, operators of the iconic Burj al Arab hotel.

“We are greatly privileged to be part of this move to create history with this project, which is perhaps one of the most defining moments in maritime travel,” said Khamis Juma Buamim, chairman of DDW.

"We promise to give the world a truly spectacular attraction,” added Daniel Chui, managing director of Oceanic Group.

It was revealed earlier this month Dubai had canceled plans to host over 160 events aboard the ocean liner as the emirate debated how best to utilise the asset.

After many failed attempts, the QE2’s relaunch began in late 2011 when the ship hosted a New Year’s Eve party with over a 1,000 guests, fireworks and music.

“Dubai was going to relaunch the QE2 and we did a marketing campaign that went out to the world… I reached out to everyone I knew,” said James Magee, co-founder of Dubai-based Global Event Management who organised the 2011 party and was asked to launch the ship as a global venue for events.

“It was a huge success. We had everything from weddings to billionaires in India and Russia, through to gala dinners and product launches and after parties,” Magee added, before reporting that the plans began to change towards the end of 2012.

Magee said the ship became involved in what he described as “the most ludicrous battle” between various Dubai entities over how best to take advantage of the ship and finance the US$1m monthly repair and maintenance bills needed to make it operational.

“The business plan we had more than paid for the maintenance and upkeep of the ship and it was probably going to contribute probably somewhere in the region of about US$20m a year plus,” Magee said.

It had been rumoured the ship was to be sold to a Chinese scrap yard, but this was rejected by a Dubai World source.

The new Far East plan also puts an end to hopes the ship was to be returned to the UK as part of a Thames-based hospitality attraction.

A spokesperson for the UK investors claimed they were still in talks to secure a deal with Dubai World and up until this week were hopeful of dealing a deal to return the ship to its original home.

Suit against Dubai Group dropped

11 January 2013 The Financial Times

(18.5 cents on the dollar - a lesson for the future...)

Four lenders including the Royal Bank of Scotland have dropped a lawsuit against Dubai Group after agreeing to restructure debts owed by the Dubai ruler’s troubled investment firm.

The deal, which is contingent on Dubai Group agreeing a broader deal with other creditors over $6bn owed to banks, would mark the end of an embarrassing saga for the emirate as its recovery gathers pace.

The parent of Dubai Group, Dubai Holding, has agreed to pay back the dissenting creditors at 18.5 cents a dollar and to take over their debt once the investment firm’s 35 other banks agree to a longer-term restructuring deal, bankers say. Dubai Group, owned by Sheikh Mohammed bin Rashid Al Maktoum, declined to comment.

Other unsecured lenders that are part of the same $1.5bn syndicate will also have the option to sign up for an early exit, or join the longer-term restructuring deal with repayment options after five or 12 years.

RBS, Commerzbank, Standard Bank and Commercial International Bank of Egypt will find some solace in the deal, despite having taken a sizeable haircut on the $330m owed to them by Dubai Group. The four lenders launched legal action in London last September after Dubai Holding refused to underwrite a deal that would have allowed some banks to exit early.

If the deal falls through, the four creditors could reopen legal proceedings.

Other creditors, including leading domestic bank Emirates NBD, have been pushing for a longer-term restructuring in the hope that asset sales over time will lead to a fuller recovery of the bad debt.

The four banks, which have already made provisions on their exposure, want to exit as soon as possible, fearing that Dubai Group will not be able to sell assets fast enough to cover capital expenditure and interest payments.

Since its landmark $25bn restructuring of Dubai World debts in 2011, the state has said it would not countenance financial support for restructurings of government-related entities that are not strategically important. Dubai Group, with a mix of global financial and real estate assets worth about $2bn, falls into this category.

The government stepped in to support the refinancing of Dubai International Financial Centre last year as the banking hub is strategically vital economically.

Bankers say Dubai Holding, which has a large land bank and some successful portfolio companies, such as the Jumeirah hotel chain and business park Tecom, may have raised enough cash through quiet asset sales to fund this new restructuring proposal.

The threat of litigation appears to be proving successful in forcing more flexibility from Dubai-related entities in negotiating restructuring deals, observers say. Abu Dhabi Commercial Bank last year sued Zabeel Investments, a vehicle owned by the ruler’s son, Hamdan bin Mohammed Al Maktoum. The Dubai government, which in 2011 set up a tribunal to deal with disputes related to Zabeel, is believed to have helped the firm settle.

Emirates airline’s plans for taking over the globe

(Anyone with a more than passing interest in Emirates will know that there is nothing new here - even the suggestion of 30 additional A380s is already a year old - and EK would never hold 120 A380s as early models of the airliner would be phased out by the time the last airframes have been delivered)

8 January 2013 by David Fickling, Bloomberg

Emirates, the airline with the most international traffic, said it wants to extend its alliance with Qantas Airways Ltd. across the Pacific Ocean, allowing passengers to fly around the world on Airbus SAS A380s.

The carriers have scope to link Qantas’s A380 flights into Los Angeles with routes the Gulf carrier seeks to operate from its Dubai hub, Emirates President Tim Clark said in a phone interview. The partnership won provisional approval from Australia’s antitrust regulator last month.

“If the timing is right and the two aircraft meet, with Qantas and Emirates you could go around the world with A380s,” he said yesterday. “I’m sure we could do trans-Pacific business on Qantas metal as part of this overall deal.”

Emirates would push for the alliance’s extension into trans-Pacific routes only if Qantas’s Chief Executive Officer Alan Joyce and his management back the idea, Clark said. Shares of the Sydney-based airline have risen more than 40 percent since the partnership was announced in September, as Joyce restructures operations to end overseas losses.

“I would think Qantas would have mixed emotions about that,” Peter Harbison, executive chairman of consultants CAPA Centre for Aviation, said by telephone from Sydney. “It’s a market where they are still dominant.” Routes across the Pacific are some of its most profitable, he said. “You just have to go online and check the pricing to see it.”

‘Qantas Territory’

Qantas rose 0.8 percent to A$1.59 at 12:29 p.m. in Sydney trading, while the S&P/ASX 200 index was little changed. Luke Enright, a spokesman for the airline, had no immediate comment on the proposal.

Clark said a tie-up across the Pacific Ocean was left out of the discussions for the current Emirates-Qantas alliance because “the trans-Pacific is Qantas territory.” Still, the regulator’s initial approval doesn’t prevent the carriers from exploring the option, he said.

The companies could also link their routes into Dallas, the hub for AMR Corp.’s American Airlines, Clark said. Emirates has pursued a code-share agreement with American, which hasn’t made progress as the U.S. company examines a merger proposal from U.S. Airways Group Inc. and goes through Chapter 11 bankruptcy proceedings, he said.

Qantas could also fly the Boeing Co. 787 into Dubai once it starts receiving the composite-bodied planes, he said.

Deal ‘Energizing’

With budget carrier Jetstar, Qantas has just under half of about 33,000 seats available each week on flights between Australia and the continental U.S., Canada and Hawaii, according to data from CAPA.

Its main domestic rival, Virgin Australia Holdings Ltd., has about 10,000 seats on its own aircraft and those operated by its partners, Delta Air Lines Inc. and Hawaiian Airlines Inc., the data show.

Qantas is “by far the biggest airline in the trans-Pacific market”, and the only one to operate from Australia beyond the U.S. west coast, Joyce said in an Aug. 8 speech in Sydney.

The deal between Qantas and Emirates was “energizing” regional airlines to strike new alliances, Clark said, citing a recent code-share agreement between Air New Zealand Ltd. and Cathay Pacific Airways Ltd., and Singapore Airlines Ltd.’s decision to take a 10 percent stake in Virgin Australia.

China Eastern Accord

“A lot of things started to happen, and suddenly prices are keener, product meshing is getting better and all sorts of arrangements are taking place that you wouldn’t have even thought about,” he said.

China Eastern Airlines Corp., which operates code-share arrangements on Qantas flights into mainland China through its hub in Shanghai, is also now pushing to deepen that alliance, the Australian Financial Review reported today, citing its Oceania head Kathy Zhang.

Liu Shaoyong, the Chinese carrier’s chairman, will visit Sydney this month to advance talks on the tie-up, the newspaper quoted Zhang as saying. The two airlines are setting up a Hong Kong low-cost carrier under the Jetstar brand.

Emirates is studying ways to increase the range of the aircraft to allow it to run services to Los Angeles, as well as Houston and San Francisco, Clark said, and may need as many as 30 more of the double-decker jumbos.

Under the planned accord with Qantas due to start in April, the airlines intend to coordinate pricing, sales and scheduling, as well as aligning frequent-flier programs so passengers can earn points on both carriers’ flights. Emirates will gain access to Qantas’s Australia and New Zealand network under the deal.

Qantas, which lost A$450 million ($472 million) on international operations in the year ended June, will shift its European hub to Dubai from Singapore. The carrier is also abandoning a 17-year partnership with British Airways alongside the agreement.

Thirty more A380s?

Emirates said it’s studying “ways and means” to accommodate an order for 30 more Airbus SAS A380 superjumbos.

Curfews at destination airports and a lack of space at the carrier’s Dubai base are the main constraints on lifting an existing order for 90 of the world’s biggest passenger planes to 120, President Tim Clark said today in an interview.

Emirates, the biggest A380 customer, has exploited the Gulf’s position at the heart of inter-continental flight paths to build a hub served by waves of departures, stripping traffic away from older network carriers in Europe and Asia. Clark said he’s mulling superjumbo flights to locations including Houston, Los Angeles and San Francisco as in-service enhancements to a model introduced in 2007 bring the cities within range.

“We know what we want to do, we know where we could put more than 90 A380s today,” the executive said by telephone from Dubai. “It’s a question of can we actually fit them in? The economics of Houston are very powerful. That would be an extremely attractive proposition.”

Water Tanks

Airbus has boosted the superjumbo’s performance by adding refinements such as a more aerodynamic wing profile. Emirates A380s flying today are already three or four tons lighter than when the carrier took its first planes, and other improvements from the Toulouse, France-based manufacturer are likely once fixes for wing cracks have been fully introduced, Clark said.

Emirates has meanwhile driven efficiencies via measures of its own such as curtailing water usage, Clark said. Only about 60 percent of the water carried on its A380s — which feature onboard showers — is actually used, and shrinking the tank could save four tons in weight.

Emirates added 15 destinations last year, including Rio de Janeiro, Buenos Aires, Barcelona and Seattle. The carrier also introduced a fifth daily A380 flight to London on Dec. 10, and has already this year announced extra superjumbo flights to New York John F. Kennedy and Paris Charles de Gaulle airports.

Adding long-haul routes can quickly “gobble up” new planes, Clark said, with a single daily frequency to Houston alone requiring 2.5 aircraft, making additional orders desirable.

Crowded Terminals

While the scope for new destinations is increasing, limited airport opening hours elsewhere and pressure on terminal capacity in Dubai are constraining growth, Clark said.

The opening on Jan. 2 of the first four of 20 A380-only gates at Dubai International Airport has been factored in to existing fleet plans, and landing slots and airspace over the United Arab Emirates may become scarce as Abu Dhabi-based Etihad Airways PJSC and budget carrier FlyDubai add flights, he said.

“The airspace management around us, that’s proving to be quite complex,” Clark said. “We’ve got many carriers in the U.A.E. growing at quite a pace.”

In the U.S., Emirates has commercial relationships with JetBlue Airways Corp. at Kennedy and Alaska Airlines in Seattle which allow for connecting flights, and Clark said he aims to “push into other points” with the former. Integrated schedules would allow for easier transfers, though the airlines need to be “careful” about antitrust and pricing issues, he said.

AMR Aim

Emirates is still seeking a deeper relationship with AMR Corp.’s American Airlines, Clark said, though the U.S. company’s management is focused on discussions about a merger with U.S. Airways Group as it plans to emerge from bankruptcy protection.

“It’s very much in the American Airlines bailiwick at the moment,” he said. “You know, you can take a horse to water, but that’s as far as we’ve gone.”

The two airlines already direct passengers to one another without a code-share arrangement, though he said it would be “very good” to have closer commercial ties, Clark said.

The executive said that Emirates isn’t interested in bidding for a carrier in India following the relaxation of ownership rules there, even as Etihad considers investing in Jet Airways (India) Ltd. or Kingfisher Airlines Ltd.

“It’s a difficult operating environment,” Clark said. “It’s very difficult to get the job done. If the Indians themselves can’t make a go of it, who can? It’s not just operational control, financial control, its human resource, people control.”

India would be more attractive were outside bidders to be “fire-walled” against certain eventualities, as Emirates was when investing in SriLankan Airlines in 1998, Clark said, adding that such a plan would most likely be politically unacceptable.

Emirates also continues to favour tactical partnerships of the kind sealed in September with Qantas Airways Ltd., the biggest Australian airline, over membership of one of the industry’s three global alliances, Clark said. That’s after Qatar Airways Ltd., the second-biggest Gulf carrier, said in October it would join the British Airways-led Oneworld group.

“We’re fairly simplistic in our execution of our business model,” he said. “I’ve lived and breathed this airline since we started. The notion that we should allow others to chart our destiny is anathema to the thinking certainly of me and others.”

Edifice complex

6 January 2012 The Economist

Dubai doesn’t do discreet. The emirate welcomed in the new year with a huge fireworks display that engulfed the Burj Khalifa, the world’s tallest building, in time to a live performance by the Prague Philharmonic Orchestra. In a video that runs in the Burj Khalifa’s visitors’ centre, an executive at Emaar, the developer behind the skyscraper, explains why it had to go that high: “You have to do something impossible, otherwise you’ll be like any other company, or person. We have to grow higher and higher—grow like Dubai.”

The emirate’s latest wheeze is to create a city within the city, a development bigger than anything that has gone before. Mohammed bin Rashid (MBR) City will feature more than 100 hotels, the Middle East’s largest entertainment centre, a park bigger than London’s Hyde Park and the world’s biggest shopping mall, appropriately named “Mall of the World”.

Plans for the supersized project, named after Dubai’s ruler, were unveiled in November and are meant to signal that Dubai is back in business only three years after a near-death experience. In late 2009 Dubai World, a big government-controlled investment firm, announced it could no longer repay its debts, threatening to bring down the entire economy. The emirate was bailed out by Abu Dhabi, an oil-rich fellow-member of the United Arab Emirates (UAE), and the UAE’s central bank.

Dubai has come a long way since then. The IMF estimates that GDP was up by 4.1% in the first half of 2012 compared with the same period of 2011. Trade, transport and tourism are buoyant. Imports of food and vehicles rose by 20% in the first half of 2012; in the year to August the number of passengers at Dubai International Airport was up by nearly 14%; and occupancy rates of Dubai’s hotels reach 80%, among the world’s highest. The property market is showing signs of renewed exuberance. In September Emaar put a 63-storey tower with 542 flats on the market and sold them all on the first day.

But Dubai is more than a story of skyscrapers built on sand with borrowed cash. Because the emirate’s oil reserves were limited, its rulers decided decades ago to diversify. Emirates Airline is the best-known result of this strategy: it started in 1985 and now ranks among the world’s leading carriers. The Jebel Ali Free Zone is one of the world’s biggest transit ports and the Dubai International Financial Centre the Middle East’s financial hub.

This role as a regional hub—and a policy of being open to almost any kind of business—explains why Dubai has been, at least economically, the main beneficiary of the Arab spring. Instability in the rest of the region has diverted capital, commerce and people to the emirate. When neighbouring Saudi Arabia upped its social spending to pre-empt protests, for instance, much of the cash ended up in Dubai’s shopping malls. More important, the emirate has clearly established itself as the region’s safe haven. “Dubai has created an environment where companies and expatriates want to be based,” says Monica Malik of EFG Hermes, an investment bank.

Yet the renaissance masks continuing problems. During the property frenzy, developers piled up debt as if there were no tomorrow. This was particularly true of those controlled by the three government-related holding companies known collectively as Dubai Inc: Dubai World, Investment Corporation of Dubai and Dubai Holding. Even now it is not clear how much debt was amassed. The IMF estimates that the government and related entities still owe $130 billion, about as much as Dubai’s GDP.

To deal with the debt pile Dubai has pursued what Ahmad Alanani of Exotix, an investment bank that specialises in distressed debt, dubs its “four Bs strategy”. The government bailed out bondholders, who were paid back fully and on time; as a result, the emirate has preserved its access to the capital markets and credit-default spreads have come down steadily. And Dubai burned the banks, which had financed much of the emirate’s property boom. More than two-thirds of $34 billion in troubled bank loans to Dubai Inc has now been restructured on tough terms: on average, maturities were stretched out by five years and interest rates cut to 2%.

The decision to target the banks reflects the fact that they were less likely to walk away than bondholders. International banks are wary of risking their relationships not just in Dubai, but in the entire region. Only four foreign banks have taken legal action. Any ruling could probably be enforced only against assets abroad: a Dubai court has to confirm the decision and is likely to declare any assets in the emirate off-limits. Local banks have even less freedom of manoeuvre. The government has big stakes in most lenders (56% in the case of Emirates NDB, Dubai’s largest).

It would be one thing if asset values recovered enough to allow the developers to repay their debts. But markets expect another round of restructuring on the renegotiated loans. Dubai World’s debt, for instance, trades for about 50 cents on the dollar. Crunch time will come in 2014 and 2015 when Dubai Inc has to repay bank loans of $8.4 billion and $7.9 billion respectively, according to IMF estimates. “Foreign banks won’t accept the same sort of treatment in a second round,” says Mr Alanani.

The recovery in property is confined to small segments of the market, says Craig Plumb of Jones Lang LaSalle, a consultancy. A project like MBR City concentrates on areas where demand is strong: luxury housing, shopping and entertainment. Other assets are still performing sluggishly. Even as the economy rebounds the proportion of non-performing loans at Dubai’s largest banks has kept rising. Moody’s, a ratings agency, downgraded three of them in December and put another on notice for a downgrade. That suggests money for new developments will be hard to come by. Some doubt that MBR City will find it easy to finance itself.

Behind the question of whether Dubai could relapse lurks a bigger one: whether it needs to change its growth model. Before the crash, it grew mainly by sucking in capital, resources, ideas and people. As a result less than 10% of Dubai’s working-age population are nationals, or “Emiratis”.

Such an input-driven model is not sustainable, argues Farouk Soussa of Citigroup. Leaving aside the environmental issues, even Dubai can build only so many MBR Cities. Either the emirate’s rulers accept that it can grow over the long term only as fast as its core sectors of trade, transport and tourism—meaning in line with global growth—or Dubai needs to build a new engine of expansion.

The government seems to recognise this, and is pushing its credentials as an entrepreneurial hub. In December, for instance, it hosted a “Global Entrepreneurship Summit”. MBR City will include a “world-class technology campus”. But Dubai has been slow to create a helpful legal infrastructure for start-ups. It still has no bankruptcy law, meaning entrepreneurs that fail risk going to jail. Even a single bounced check can land you behind bars for three years. With few rights, expats have no incentive to create something new. Dubai needs to do more institution-building, to go with the actual building.

In the USA much ado about cable news

5 January 2013

Last week Qatar owned Al Jazeera's made a $500 million purchase of San Francisco-based Current TV. 

Current TV was created by Al Gore in 2005. It is a tiny, liberal cable news service that was fumbling for a future. Gore engineered the sale to the Qatar-based network - and will personally collect up to $100 million.

Al Jazeera executives say they want to crack the American market and think Current's slim connections will give it a head start. There are plans to add news bureaus on top of the present five and devote 60 percent of broadcast time to U.S.-produced news, with the balance coming from other Al Jazeera sources.

There has been the predictable uproar about an Arab owned TV network broadcasting in the USA. But Al Jazeera has already been broadcasting for years and was the go-to channel in Washington, the White House and State Department during the Arab Spring uprisings last year. But the company never grew beyond about 5m American homes.

Current TV, which announced it was putting itself on the market in October, has been a target of great interest, especially thanks to internet video players, because – even failing to gain much audience share – it has produced more than $100m in revenues and significant profit margins. In other words, if you have cable distribution, cable success, no matter how lame your content might be (and Current's content was usually very lame), is virtually guaranteed.

This is a bit of a back door entry into a bigger US market for Al Jazeera piggy-backing off an already established cable network; but will cable channels keep the now Qatar owned network?
Time Warner Cable, which had carried Current, theoretically, into 12m homes, immediately announced it would "as quickly as possible" drop Al Jazeera.

This will be an ongoing media contretemps. But in the end, it is hard for anybody to work up much passion for defending a network – or even, for that matter, defending free speech – that fundamentally speaks to no one.

Al Jazeera's other problem is that it is earnest and dull producing what one commentator described as "sanctimonious and boring news shows"

Yet the purchase shows that the eyeballs of Americans remain remarkably valuable. Al Jazeera is simply paying a high market price to gain access to what it views as a very valuable market. It has paid $500 million to have access to 40 million eyeballs—or $12.50 per subscriber.

And for all the media (hello Fox) stoked controversy Al Jazeera is not the first foreign owned media company to be broadcasting in the USA. Cable already includes Russia Today, an English-language television network that is essentially owned by the Russian government. China Daily, backed by a government-controlled company, publishes inserts that run in newspapers like the Washington Post. Then there is CCTV4 Chinese government owned English language programming.

Plus if you don't like it watch something else. Al Jazeera is paying nearly half a billion dollars to U.S. investors for the right to be ignored, scrolled past, and clicked through by American viewers. That’s not a bad deal for Current’s owners, or for the American economy at large.

Foreign direct investment is welcome in the USA - think of Fiat buying Chrysler, Indian outsourcer Inofsys opening software development centers in the U.S., Russian oligarchs buying trophy assets like insanely expensive condominiums and NBA franchises.

Budweiser is owned by Anheuser-Busch InBev N.V., a Belgian and Brazilian company with headquarters in Leuven, Belgium. Its U.S. operations include managing 12 breweries plus hops farms, malt plants, barley elevators and a rice mill.

Alka-Seltzer is owned by Bayer AG, a German pharmaceutical company. It operates multiple sites all over the U.S. for administration, marketing, research and development and manufacturing.

7-Eleven, originator of the Slurpee and the Big Gulp, operates over 7,000 stores throughout the country, but nearly twice that amount is found in Japan, home of Seven & I Holdings Co., owner of the entire chain.

The Chrysler Building is one of the landmarks of the Manhattan skyline. Located on 42nd Street and Lexington Avenue, it’s New York City’s third-tallest building and a towering tribute to both the Chrysler Corporation and the city that it calls home. The Art Deco building has had two foreign owners in the last 11 years. TNW, a German investment group, bought a 75 percent stake in the building for $300 million in 2001. Seven years later, the Abu Dhabi Investment Council bought it, and now owns 90 percent of the building.

Why are foreign companies so willing and eager to pay so much to get into the USA? For all America’s problems, no other country boasts the same combination of size and wealth. No other country has as many well off consumers as the U.S. does. Having a presence in the US market is incredibly valuable. To be big in the world you really do need to also be big in the United States.

Add to that the USA is a remarkably secure place to invest. Property rights are protected, our system is relatively uncorrupt, and the government isn’t likely to snatch your business and pack you off to jail if you cause trouble. The USA does not have coups, and the US dollar is a stable currency by global standards.

So good luck to Al Jazeera; just don't expect a quick return on your investment.

The first world war: the real lessons of this savage imperial bloodbath

David Cameron wants to turn the first world war into a focus of national pride. That should be resisted every step of the way

2 January 2013 Seumas Milne for The Guardian originally published 16 October 2012

In the midst of deepening austerity, David Cameron is desperate to play the national card. Any one will do. He's worked the Queen's jubilee and the Olympics for all they're worth. Now the prime minister wants a "truly national commemoration" of the first world war in the runup to 2014 that will "capture our national spirit … like the diamond jubilee".

So £50m has been found to fund a four-year programme of events, visits to the trenches from every school and an ambitious redevelopment of the Imperial War Museum. Ministers have promised there will be no "jingoism", but Cameron says he wants to remember those who "gave their lives for our freedom" and ensure that "the lessons learned live with us for ever".

In case there were any doubt about what those lessons might be, the Times has declared that despite the war's unhappy reputation, Britain's cause was "essentially just", a necessary response to aggression by a "xenophobic and anti-democratic" expansionist power (Germany) and that those who fought and died did so to uphold the "principle of the defence of small nations".

It surely must be right to commemorate what was by any reckoning a human catastrophe: 16 million died, including almost a million Britons. It touched every family in the country (and many other countries besides), my own included. Both my grandmothers lost brothers in the four-year bloodletting: one in Passchendaele, the other in Gaza.

Seventy years after the event, one of them would still cry at the memory of the postman bringing the death notice in a brown War Office envelope to her home in Edinburgh. My grandfather was a field surgeon on the western front, who would break down as he showed us pictures he had taken of lost friends amid the devastation of Ypres and Loos, and remembered covering up for soldiers who had shot themselves in the legs, to save them from the firing squad.

But it does no service to the memory of the victims to prettify the horrific reality. The war was a vast depraved undertaking of unprecedented savagery, in which the ruling classes of Europe dispatched their people to a senseless slaughter in the struggle for imperial supremacy. As Lenin summed it up to the Romanian poet Valeriu Marcu in early 1917: "One slaveowner, Germany, is fighting another slaveowner, England, for a fairer distribution of the slaves".

This wasn't a war of self-defence, let alone liberation from tyranny. As the late Eric Hobsbawm sets out in his Age of Empire, it was the cataclysmic product of an escalating struggle for colonial possessions, markets, resources and industrial power between the dominant European empires, Britain and France, and the rising imperial power of Germany seeking its "place in the sun". In that clash of empires, Europe devoured its children – and many of its captive peoples with them.

Set against that all-destroying machine of 20th century industrial warfare, the preposterous pretext of the rights of small nations and the violated neutrality of "plucky little Belgium" cannot seriously be regarded as the real driver of the war (as it was not by British and other politicians of the time).

All the main warring states were responsible for the brutal suppression of nations, large and small, throughout the racist despotisms that were their colonial empires. In the years leading up to the first world war an estimated 10 million Congolese died as a result of forced labour and mass murder under plucky Belgian rule; German colonialists carried out systematic genocide against the Herero and Nama peoples in today's Namibia; and tens of millions died in enforced or avoidable famines in British-ruled India, while Britain's colonial forces ran concentration camps in South Africa and meted out continual violent repression across the empire.

The idea that the war was some kind of crusade for democracy when most of Britain's population – including many men – were still denied the vote, and democracy and dissent were savagely crushed among most of those Britain ruled, is laughable. And when the US president, Woodrow Wilson, championed the right to self-determination to win the peace, that would of course apply only to Europeans – not the colonial peoples their governments lorded it over.

As the bloodbath exhausted itself, it unleashed mutinies, workers' revolts and revolutions, and the breakup of defeated empires, giving a powerful impetus to anti-colonial movements in the process. But the outcome also laid the ground for the rise of nazism and the even bloodier second world war, and led to a new imperial carve-up of the Middle East, whose consequences we are still living with today, including the Palestinian tragedy.

Unlike in 1940, Britain wasn't threatened with invasion or occupation in 1914, and Europe's people were menaced by the machinations of their masters, rather than an atavistic tyranny. Those who died didn't give their lives "for freedom"; they were the victims of an empire that was a stain on humanity, the cynicism of politicians and the despicable folly of the generals. As Harry Patch, last British survivor of the trenches who died three years ago, put it, the first world war was "nothing better than legalised mass murder".

Since the 1990s, direct conflict between great powers that reached its cataclysmic nadir in the world wars has been replaced by a modern version of the colonial wars that preceded and punctuated them: in Iraq, Afghanistan and elsewhere. Unable to win public support for such campaigns, the government has tried to appropriate the sympathy for the troops who fight them as a substitute: demanding, for example, that poppies be worn as a "display of national pride" (or as Lieutenant General Sir John Kiszely, the now ex-British Legion president, described Remembrance Day, a "tremendous networking opportunity" for arms dealers).

If Cameron and his ministers try the same trick with the commemoration of the 1914-18 carnage, it will be a repulsive travesty. Among the war's real lessons are that empire, in all its forms, always leads to bloodshed; that state violence is by far its most destructive form; that corporate carve-ups fuel conflict; and that militarism and national chauvinism are the road to perdition. Celebrate instead the internationalists, socialists and poets who called it right, and remember the suffering of the soldiers – rather than the cowards who sent them to die. Attempts to hijack the commemorations must be contested every step of the way.

Seumas Milne's book, The Revenge of History: The Battle for the 21st Century, was published in October 2012