Dubai: More Bubble or More Boom? Time Will Quickly Tell
By Martin Hutchinson Contributing Editor
www.moneymorning.com
23 July 2008
"Dubai has plenty of qualities that catch an investor’s eye.
The emirate has the world’s only (self-proclaimed)
7-star hotel. Dubai also is home to the biggest financial market in the
Middle East, which is itself publicly quoted and trades at 25 times forecast
2008 earnings. It has been enjoying one of the greatest construction booms
the world has ever seen.
And Dubai is planning a huge tourist expansion, aiming to
boost that sector to more than the 18% of the economy it already accounts
for. So, why aren’t Dubai investments a screaming buy, where we should all
be investing our money? After all, plenty of brokers think it’s just that.
From a short-term perspective, Dubai investments haven’t done too badly. The
Dubai Financial Market General Index is down about 13% this year, far less
than the much-hyped emerging markets of India and China, or even the United
States. But there’s a possible catch.
Whereas 2006 and 2007 were good years for investors in India and superb ones
for investors in China, they were lousy for investors in Dubai. The DFM
General Index hit its all time high in November 2005, declined pretty
steadily over the next two years, and is currently sitting about 40% below
that high. Even at that depressed level, the DFM General Index is still
trading at about 17 times projected earnings for this year and 3.3 times
book value, so it’s not cheap.
That immediately raises questions. While Dubai has little in the way of its
own oil reserves, its economy rests fundamentally on its position as
entrepôt for the immense oil-exporting region of the Middle East, and for
the United Arab Emirates (UAE), the oil-rich federation of which Dubai is a
member. Oil prices were around $60 per barrel in November 2005 when the DFM
General Index was at its peak; oil is now trading in the neighborhood of
$130 per barrel, even after last week’s big sell-off – so why is Dubai’s
stock market down 40%?
It’s entirely possible that Dubai isn’t as solid as some of its proponents
believe.
Two years ago – before the real estate crash – it might have seemed
impressive that Dubai, with 0.02% of the world’s population, was employing
more than 10% of the world’s tower construction cranes; today we know
better. Dubai’s rate of inflation is around 20%, and it’s on the upswing,
while home mortgage interest rates sit below 7%. That means that the cost of
making a home mortgage – in real terms – is negative 13%. The UAE government
is considering allowing its currency, the dirham, to float upward against
the dollar, but hasn’t done so yet.
Dubai received more than 7 million tourists last year, with 1 million of
those coming in from Great Britain (who presumably prefer the climate) – but
the British government currently rates Dubai’s terrorism threat at its
highest level. It’s not hard to imagine what a terrorist attack could do to
Dubai’s impressive tourist rates.
Dubai is also planning to spend $82 billion on aerospace projects to include
the world’s largest airport – but with a population of only 1.5 million, it
will need a lot of foreign traffic to fill up such a behemoth.
The potential for that to come to pass is there, given the growing levels of
investment that China and others are making in the Middle East, and because
the Dubai project isn’t solely focused on tourism: The airport and aerospace
hub is viewed as an economic-development project. But success is far from
guaranteed, and an economic downturn could make the objectives tough – if
not impossible – to achieve. Indeed, should the ongoing global financial
crisis eviscerate worldwide growth, Dubai’s development strategy could be
exposed as a bubble, not a boom.
To be sure, other small nations have engineered economic miracles. Consider,
for example, the economic success of Singapore, which has a smaller land
area but three times the population.
Like Dubai, Singapore has no core advantage, such as a wealth of natural
resources. Nor does it have a bevy of natural tourist hot spots. And much
like Dubai, Singapore’s only advantage is one of geographic position.
However, Singapore has an income per capita at purchasing power parity of
$49,700 (eighth highest in the world) compared to the UAE’s $37,300.
Singapore’s growth has been built on two factors: The extremely high
education level of its population (relative to income at first, in the
1960s, but in absolute terms now).
And an obsessive focus on moving up the value chain in everything it does.
Dubai has neither advantage; it supplements its small local population with
a huge underclass of immigrants (more than 80% of the population in the UAE
as a whole), rather than upgrading the capabilities of its own people, and
it relies on building artificial tourism in an area where (because of the
unpleasant climate and relative lack of natural or historic attractions)
it’s possible that no natural flow of tourists would have otherwise
occurred.
An economy built on construction, tourism, and a boundless flow of cash,
without any special knowledge base, is one that could end up being derailed
in the long run. And that long run could be more painful if it turns out
that Dubai has been feeding a major construction bubble through deeply
negative interest rates.
The other potential black cloud looming over the Dubai economy is that of
oil prices, should $130 - $140 per barrel oil turn out to be a short-term
speculative price spike.
With the Bush Administration pushing for offshore drilling and the world
automobile industry devastated by consumer tastes that quickly shifted to
small cars and trucks, increased supplies and decreased consumption could
push oil prices down to a more reasonable level.
Assuming OPEC doesn’t intercede and act to keep prices high, the right
confluence of factors could potentially push oil prices back down under the
Century Mark. And in a perfect world, with the right confluence of factors,
oil could end up below $100 per barrel, or even as low as the $60-$80 range.
And while that price level would still be well above the $10-$15 per barrel
prevalent before 2002, it is far below oil’s current levels.
The Middle East in general has predicated their future plans on the oil
bonanza continuing in full flow for the indefinite future. Even though
$60-80 oil would provide ample revenue for their citizens to enjoy an
excellent living standard, their economies are not properly set up to adjust
to such a lower revenue flow. If oil prices were to fall, the inevitable
effect would be tighter money as interest rates return to normal levels,
exacerbated by an acute cash shortage.
Dubai is looking to diversify itself away from the petro-gusher, which is
one reason it is trying to position itself as a global boom intermediary,
benefiting from tourism and establishing itself as a new residential
destination for the world’s uber-rich. It also aims to utilize its airport
and aerospace ventures to fuel its real estate and global commerce
aspirations.
But a key question remains: Is it still tied in so tightly to the Middle
East “black gold” bonanza that it will suffer in kind should energy prices
hit a deflationary downdraft?
The next few years will be telling. If its global growth aspirations get a
needed lift, the tiny Gulf nation could become more than just a
well-recognized name on a map; it could end up as a key stopping-off point
for business executives traveling from one side of the world to the other,
might one day even evolve into a commercial spaceport, and will stand as an
example of a country that was able to engineer an economic makeover of
massive proportions.
But should oil prices crater, Dubai’s aerospace venture fail to attain
take-off speed, and its vision as a tourism and residential mecca of the
future turn out to be ill-conceived as I fear, the opposite extreme is
possible: With a construction bubble more inflated than the 2006 Florida
condo market and a monetary policy looser than the one being operated by
U.S. Federal Reserve Chairman Ben S. Bernanke, Dubai could shortly resemble
a jungle of half-completed skyscrapers, with 10% occupancy rates and
bankrupt landlords. Its landing would be painful, and, potentially, not long
delayed. It’s not an investment for the risk averse."
Emirates unveils its mega-model (the airplane I mean!)
23 July 2008
Emirates Airline today unveiled a new landmark for London, a
giant model of an Airbus A380 at the gateway to Heathrow Airport. This is
located at the entrance to Heathrow Airport terminals 1-3, and replaces the
old Concorde model.
Plenty of people are sad that Concorde has gone; but this is
the age of globalisation and money: so why not a UAE owned airline
advertising at a Spanish-owned airport in a city in which 42% of the
population is non "British-White" and 31% foreign born. And, after all,
there is also an Emirates Stadium in London.
The pr crew were also wearing the new uniform in public for
the first time.
The 45 tonne world record contender was unveiled this morning at the
"Emirates Roundabout" by the airline's President Tim Clark.
The completion of the giant A380 replica is the culmination of an ambitious
18-month project to place the Dubai-based carrier at the gateway to the
world's busiest international airport, and at one of the most prestigious
advertising sites in the UK.
The Emirates A380 will be seen at Heathrow for real from December 1st.
The newly named Emirates Roundabout at Heathrow is one of the most high
profile advertising sites in the UK. Over 55,000 vehicles a day and
approximately 25 million passengers a year, pass this site. Terminal 4 and 5
passengers use a separate entrance to the airport.
The one third-scale model was flown in ten component parts to Heathrow on
July 5. Since then, specialist teams have been working around the clock to
launch Emirates' "first" A380.
The replica was built by US-based Penwal at its manufacturing base in
California over a six month period, using plans provided by the A380’s
manufacturer, Airbus in Toulouse.
It was then transported by giant truck to Ontario Airport in Los Angeles
where it was flown to Heathrow aboard a massive Antonov cargo plane,
organised by the Emirates SkyCargo team. A special mechanical ramp was flown
into London from Germany to offload the plane as it was too heavy for the
Antonov’s winch crane. The wing section of the plane required a police
escort as it was driven from Heathrow to the roundabout site.
The world’s leading aviation museum, The Smithsonian Air and Space Museum in
Washington DC, has stated it is the largest known aircraft model in
existence. A world record submission is currently with Guinness World
Records.
Model quick facts include:
Weighs more than 45 tonnes
Wingspan of 26 metres and a length of 24 metres
Same size as a real Boeing 737
Exact 1:3 scale of the real A380, the world’s largest airliner
More than twice the size of the roundabout's previous Concorde model
Made of glass-reinforced plastic over a steel frame
Foundations required 600 tonnes of concrete
Airbus has a web site dedicated to the delivery of the first
Emirates A380:
http://www.a380delivery.com/emirates/
Pad: bulldog on a leash or another nail in democracy's
coffin
Published on July 21, 2008 Chang Noi in the Nation
newspaper.
Since it was formed in February 2006, and especially since it was revived in
May of this year, the People's Alliance for Democracy (PAD), has become a
distinctive force on the political landscape.
Formally, the PAD is simply an alliance of five orators. But as a political
phenomenon, the PAD is also what they are saying, how they are saying it,
what visual messages they convey, and who is supporting them.
The movement's main stated aim is to overthrow the current government.
Normally any movement that professed this aim would be labelled dangerous,
even revolutionary, and be strongly handled by the authorities. Strangely
that is not happening. Probably that is because we know its true aim is to
obstruct Thaksin's overt return to politics.
The movement's longer-term aim is to undermine the central principles of
electoral democracy, namely the sovereignty of the people, and the selection
of a parliament by the system of one-man, one-vote. The PAD leaders claim
that the electorate cannot be trusted with the franchise because the mass of
rural people are uneducated and corrupt. They want the elected portion of
the lower house reduced to a minority (perhaps 30 per cent), and the
remainder filled partly by "retired officials and important people" and
partly by ordinary people and workers, selected by appointment. Since the
logic of the PAD's proposal is to disenfranchise the rural poor, this new
system is likely to favour the rich, the urban, and the higher educated.
In addition, the PAD wants the military to have a permanent role of
political oversight. The military would be removed from political control
(by making the defence ministry independent of the Cabinet), and granted the
right to intervene in politics to check corruption and to protect the
monarchy and national sovereignty.
The PAD seems against the freedom of expression, and in favour of the use of
abuse and intimidation to limit the freedom of expression. This conclusion
is based on the way PAD orators treat academics, actors or other public
figures who disagree with its views. This tactic seems to have been quite
successful. Some critics have apologised. The press has been generally
rather uncritical of PAD's views and activities.
The PAD makes use of military and martial symbolism. Some of the leaders
like to wear brown shirts and black shirts that resemble military and
paramilitary uniforms. The headbands worn by leaders and followers recall
the outfits of traditional warriors, samurai, and jungle fighters. The
oversized neckscarf comes from the scouts, village scouts, and jungle
fighters. It is not Chamlong's rural-ascetic look but this barracks-chic
that distinguishes the movement. Among the supporters, yellow flags,
headbands, T-shirts, and caps combine to give the impression of commonality
and conformity which is the role of uniforms.
PAD promotes a visceral nationalism reminiscent of the early Phibun era. The
nation is a body that is being physically ripped by its enemies (internal
and external), causing pain to the citizens, who must rise up in the
nation's defence.
The PAD's agitational practice suggests a high degree of organisation,
strong financing, access to technology, and skill with sophisticated
techniques. The equipment for staging and broadcasting the PAD's message
requires high capital cost and running expenses. The crowds are well
organised and provisioned. The programming shows strategic planning to
sustain support and interest with relatively little novelty. The PAD seems
skilled in the techniques and rituals of litigation. In short, this is not a
few people gathered at a street corner with a soap box.
Analysing the PAD's audience on the streets and in front of television
screens is difficult. There are only stray interviews, plus pictures.
Perhaps the single word that emerges from this impressionistic data is
"respectable". The crowds are generally smartly dressed. The age profile is
quite high, though there are also many families in attendance (and the TV
audience may be significantly younger). Head-counting from press photos
shows a slight preponderance of women over men. From the few on-site
interviews available, the crowds include retirees, public servants, small
business people, and senior executives from modern firms. There seem to be
relatively few manual workers.
The PAD is clearly well connected to other institutions. One of its leaders
is a Democrat MP. Other Democrats have spoken from its stages. So too have
academics from some of Bangkok's major universities. A serving general has
taken the PAD stage in his full uniform. Other military figures, including
General Saprang Kalayanamitra, have been seen backstage and are open in
their support.
The PAD seems to be protected, perhaps by friends in important places, but
also by virtue of its widespread urban support. No other Bangkok protest has
suffered so little harassment. When the prime minister angrily threatened to
clear PAD off the streets, the security forces refused to cooperate and the
prime minister had to back down. When PAD set up a permanent blockade of
roads, the police stood aside and public-opinion surveys were surprisingly
lenient over the disruption to traffic. When the protest moved to Government
House, the police resistance looked like a token showing designed to fail.
This apparent immunity gives weight to PAD's message.
The PAD is flirting with the old agent provocateur's technique of placing
its own crudely armed gangs in places where they will be attacked by
enemies. This creates violent incidents, apparently initiated by their
opponents, though in truth a result of the inherent violence of the PAD
itself.
In short, PAD is an anti-democratic movement, supported by high investment
and shadowy protection, that exploits the fears of the privileged and a
deliberately anti-rational nationalism, and flirts with militarism and
violence.
Is PAD a bulldog, let out on a leash for a specific purpose, that will be
chained up when the threat from thieves has passed? Or is it another step in
the destruction of democracy begun by Thaksin, continued by the coup-makers,
and now plunging ahead on the momentum?
Fly Dubai starts to outline its plans
22 July 2008
As FlyDubai starts to plan it's 2009 launch it is clear that
the owner's expectations are for an airline operated independently of
Emirates and with a clear brand of its own. The airline gave some early
briefings at Farnborough this week; it is proposing to link regional cities
like Tehran and Cairo to Dubai as well as countries bordering the region
(like the “stans”). It will be focused less on Emirates transit business and
more on point to point traffic enabling tourists and the relatives of
Dubai-based workers to visit the city.
This will also allow it to operate outside of the Emirates
hub and spoke flying hours when peak slots are already busy.
FlyDubai will also challenge the regional carriers on local routes such as
Dubai-Kuwait or Dubai-Doha in a move that should increase competition,
improve service and lower fares.
FlyDubai is proposing a model that is rather different to the classic budget
airlines of the USA and Europe but is also different to the local
full-service carriers.
FlyDubai passengers will be able to select their service level from an
online menu when they book their ticket, allowing them to determine whether
they want a snack, meal or no food.
They will be to decide what sort of drinks and entertainment they have
onboard and even how they will check-in at the airport.
By encouraging passengers to order in advance FlyDubai will have more
flexibility to offer, for example, quality meals, unlike other budget
airlines. This is obviously good for passengers but also for the airline as
it will make a large proportion of its profits from these ancillary
services.
Still this new carrier has a lot to do, other than generating smart ideas.
It only ordered its first aircraft last week, it still does not know where
its first destination will be, and it has not hired cabin crew or pilots.
There are some areas where it can take a shortcut, and save money, by
partnering with Emirates. It will probably outsource training, catering and
fuel purchasing, which will provide economies of scale and may also help
eliminate some of the errors that are inevitable when a new airline is
launched.
It will likely also be able to source some crew from
Emirates; in particular crew with Dubai families who want to return home at
the end of every day and who want a regular flying pattern.
What will be interesting is how much lower Fly Dubai's costs
per seat mile can me than Emirates. Emirates is in many ways the first low
cost full service carrier; with lower operating costs than all the major
international carriers.
One-two-well and truly gone
21 July 2008
A day after low cost carrier one-two- go announced a
voluntary suspension of operations for two months the Thai authorities went
a step further and grounded both the low cost carrier and its parent airline
Orient Thai.
Orient Thai
Airline and its low-cost subsidiary One-Two-Go were ordered on Monday to
cease operations for 30 days, starting from July 22, because of the poor
safety standards.
The Civil Aviation
Department has ordered One-Two-Go airlines to halt operations for 30 days
due to substandard operations and revoked or suspended the flying licences
of nine of its pilots.
Chaisak Angsuwan, director-general of the department, said suspension of the
airline's Air Operator Certificate was effective from today.
The department had found shortcomings in the airline's aviation operations,
flight schedules and maintenance, along with a lack of quality assurance.
The low-cost airline had violated aviation safety regulations and lacked
proper airline management.
The flying licences of seven of the airline's foreign pilots were revoked,
six Indonesians and a Venezuelan, and the licences of two Thai pilots
suspended.
The department found the pilots on the airline's MD80 series aircraft had
submitted documents misstating their level of expertise.
The airline and its pilots were liable to criminal penalties and the
department would file charges against them in two weeks, said Mr Chaisak.
The announcement follows the department's investigation into the crash of
flight OG269, an MD-82, at Phuket International Airport on Sept 16 last
year, killing 89 people and injuring 41.
The airline was required to correct the flaws in its operations during the
suspension period, or the department could either extend the suspension or
terminate the airline's certificate.
One-Two-Go was ordered to correct its flight schedules, aircraft maintenance
and quality assurance system.
Mr Chaisak said One-Two-Go's parent airline, Orient Thai, was also warned it
must change its flight schedules to allow its pilots enough rest time, as
required by aviation safety regulations.
Transport Minister Santi Promphat said other airlines would face similar
punishment if they were found to have committed the same offences. Airlines
should be more careful in examining the qualifications of their staff,
especially their pilots, said Mr Santi.
Udom Tantiprasongchai, the president of One-Two-Go Airlines, said the nine
pilots were sacked on July 8. He had not previously known about the pilots'
incorrect documents. He believed the airline could make all the changes
required within the 30 days.
The paper-free, cost-saving A380
20 July 2008
The Emirates cost saving drive continues - at least in the
back of the airplane. The latest initiative us to make its Airbus A380
superjumbos paperless planes.
The airline will remove all seat-pocket paper - in-flight magazines,
entertainment guides and shopping catalogues - when the giant aircraft go
into service in 12 days.
Tim Clark, Emirates’ president, has said that banning paper will lighten the
aircraft by a tonne based upon 2kg per seat and 500 seats. This makes
up for the tonne of water that will need to be carried for the two first
class showers that will be installed (his and hers??) and available by prior
booking with the flight purser. Clark, that not so well known
environmentalist also said that Emirates was doing it because of the
environment.
The printed matter will be replaced by content shown on the aircraft’s
seat-back television screens.
Recently the airline has been removing the footrests from all
economy class seating; also presumably to save weight.
Clark said Emirates had also begun a project with Airbus to reduce the
weight of the A380 by five tonnes by 2012. This would allow the airline to
use the plane on extra-long routes, such as nonstop from Dubai to Los
Angeles and San Francisco on the US west coast.
Coming to DXB on 28 July
19 July 2008
One Two Gone?
19 July 2008
One-Two-Go Airlines, one of Thailand's three main budget
carriers, will cease operations (in theory) temporarily, starting on
Tuesday, to allow time for a financial restructuring.
One-Two-Go flys older MD80s; one of which crashed at Phuket
earlier this year. There have been regular concerns about maintenance and
the qualifications on the airline's crew.
Relatives of the victims in the Phuket crash have started a
web-site, www.investigateudom.com, to campaign for an investigation into
Udom's business conduct.
It was alleged that Udom had misled pilots into flying unsafe planes and
paid bonuses for those who worked beyond the legal maximum of flying hours.
The airline is facing mounting cost pressures led by rising oil prices,
fierce competition from rival airlines, falling domestic passenger demand
and the poor business outlook.
A One-Two-Go statement issued yesterday said that during the suspension,
from July 22 to Sept 15, the airline will consider a new financial system
that will do away with forward ticket sales which have hurt its financial
status.
Forward sales of air tickets have become a critical problem for most
airlines as the tariff is priced when oil prices are lower but by the time
travel actually takes place they have tended to rise.
There may also be a need for it to put in place a new service model to
differentiate One-Two-Go from other low-cost carriers, it said.
It was not clear yesterday how the airline would deal with its 700
employees, passengers who have bought tickets, and its fleet of eight MD 80
series jets.
Parent carrier, Orient Thai, will continue flights to Hong Kong and Incheon.
The degenerates of Dubai
By David Jones - The Mail - 19 July 2008
"Despite the presence of undercover 'love police'
now patrolling its scalding white sands, and the promise of new signs
warning foreigners of dire consequences should their passions get the better
of them, little has changed on the Dubai beach where two drunken Britons
staged their now notorious 'sex romp'.
Last Wednesday, at one end of the vast, crescent-shaped expanse, a
contingent of preening expat women in designer bikinis fried themselves for
as long as they could withstand the 50 degree heat before plunging into the
blue waters to cool their bronzed bodies.
Further along the shoreline, meanwhile, their hapless Emirati counterparts
were forced to wade into the waves wearing their amorphous black abayas,
which weighed them down so heavily when drenched that they could barely
paddle out again.
Set against a backdrop of dizzying new skyscrapers and a forest of giant
cranes (50 per cent of the world's entire stock of the largest cranes is
concentrated here), this tableau neatly epitomises the seismic clash of
cultures and morals which has lately beset this desert-built Disneyland of a
state.
This collision between traditional Islamic values and those of the decadent
West may have been brought sharply into focus by the tawdry sex-on-the-beach
saga - which is expected to reach its denouement next week with the
prosecution of expat publishing executive Michelle Palmer and her fleeting
partner, businessman Vince Acors.
To understand fully its complexities, and potential gravity, however, one
must leave Dubai, with its glitzy shopping malls and nightclubs, and drive
north for 50 minutes along the new Emirates Highway.
Here, sandwiched between the dramatic Hajja Mountains and the Arabian Gulf,
one enters the most beautiful but little-known emirate of Ras al-Kaimah.
Though it is still the same country, here there are no boozy Brits or flashy
hotels. And to its 295,000 souls - naturally hospitable but fiercely
religious and traditional in their ways - neighbouring Dubai is the new
Babylon.
It is no coincidence that the 9/11 hijacker Marwan al-Shehhi, who piloted
the plane that crashed into the South Tower of the World Trade Centre, hails
from these parts.
Indeed, some locals regard his family's white stone villa, which stands near
the mosque in a dusty hamlet where goats roam the streets, as a shrine.
By now, the enormity of the drunken beach romp - which is merely symptomatic
of the routinely appalling behaviour of the new breed of British expats in
Dubai - should be plainly apparent.
But if not, then it is spelt out by Dr Christopher Davidson, a Durham
University lecturer who has spent much time in the United Arab Emirates and
has just published an acclaimed book examining the possible consequences of
Dubai's emergence as the world's fastest-growing commercial and tourism
centre.
He is convinced that Dubai, with its unique position as a cosmopolitan and
capitalist society at the heart of the Middle East, is high on the list of
targets for Islamic fundamentalists - an assertion which gained credence
recently when the Foreign Office elevated the emirate to the highest state
of terror alert.
And Dr Davidson fears that the revulsion of seeing members of the
120,000-strong British community trampling over the sensitivities of their
Islamic hosts could stoke the fire of hatred, turning some disaffected young
Emirati into the next al-Shehhi.
'It's not making a quantum leap to connect the rising threat of a terrorist
attack with badly-behaved Britons,' he told me. 'The Dubai government has
gone for mass tourism and huge foreign investment, and they've been very
successful so far, but the cost could be enormous.
'There is still no outlet for the frustrations of disaffected locals, many
of whom are appalled by loose Western standards, in particular among women.
'I have sat in coffee shops with UAE nationals and they've looked me in the
eye and told me: "I want my country to be an Islamic emirate." There is a
lot of resentment. It is not stretching credibility to imagine that, for
some, the only way to vent that frustration could be by committing an act of
violence.'
For Dubai, of course, such an act would be disastrous. It would, as Dr
Davidson points out, instantly burst the bubble of confidence on which the
ruling Maktoum family have built their incredible dreamland in the dunes.
International investment would dry up; the million British tourists who
flock here to shop and sun themselves each year would melt away; the
Premiership footballers and pop stars who have bought exclusive villas on
the new Palm Islands development, such as Michael Owen and Rod Stewart,
would doubtless move to safer shores.
Moreover, since Dubai is the Middle East's cosmopolitan melting pot, and its
experiment with Islamic capitalism could become the blueprint for
surrounding Arab states, its failure would have dire consequences for the
entire region.
On the surface, the sordid encounter between Palmer and Acors may be the
stuff of saucy seaside postcards, but to the many Dubaian nationals I have
spoken to this week it is no laughing matter.
As I was reminded repeatedly, they are already a minority group in their own
country, where more than 85 per cent of the estimated 1.8 million residents
are from overseas.
And this latest incident is but another reminder of the manner in which,
they claim, their mores are being eroded by the vast foreign influx.
After spending a week here, it is easy to understand why they feel so
strongly, for it is not only on Dubai's beaches that one finds the locals on
the wrong side of an invisible line in the sand.
Take, for example, trendy bars such as Sho Cho, on the exclusive marina
development, where Michelle Palmer and Vince Acors downed cocktails before
their starlit fumble.
Here, as in many fashionable restaurants, only Western clothing is
permitted, and any man wearing an Arab costume is summarily turned away.
This discrimination extends to the workplace. Young Emiratis may be first in
line for civil service positions, but the plethora of perk-laden, tax-free
jobs in the new foreign businesses in places such as Media City and Internet
City routinely go to candidates from London, Birmingham or Manchester.
Generations ago, when an altogether different kind of Briton ventured to the
Middle East to help unite the Arabs and build their country, such privileged
positions were hard-earned.
As one expat, Lucy Roberts, explained scathingly, however, the sad truth is
that many of the new British émigrés have only decamped here after failing
to forge careers back home.
'Frankly, there are a lot of idiots here who are working in jobs they
shouldn't be doing,' said Lucy, 32, who quit her job as a London estate
agent and runs a graphic design company.
'I think the term is "punching above their weight". They brag a lot and
don't deliver. One girl I know works in PR and thinks she's Anna Wintour
(editor of America Vogue), when she's really nothing to write home about.
'People who would never get on at a big company in London can come here and
be the boss in two years.'
These annoyingly brash Britons, who zip about in Porsche Boxters and
Mitsubishi Pajeros with sunglasses perched on their streaked hairlines, and
whose idea of fun is to get legless at Dubai's famously debauched
champagne-and-lobster Friday brunch sessions, are bagging all the best
apartments and villas, too.
With property prices going up at a mesmerising rate (no sign of the credit
crunch here), it means that Emiratis are being priced out of the most
exclusive areas and shunted into what one local government clerk described
as 'up-market ghettoes' on the fringes of the city.
Worse, as Dubai is a hereditary monarchy without any parliament, the
ordinary people have no voice, so no one can question who is really
benefiting from this modern form of colonisation.
However, the UAE government is sufficiently concerned at the creeping loss
of Arab customs and traditions to have staged a two- day 'national identity
conference' recently. And there, one or two senior government figures were
brave enough to express dissent.
Given the fascination for American TV shows and movies, and the need to
master English to secure a good job, a former education minister foresaw the
time when no one could speak proper Arabic.
The refreshingly outspoken UAE police chief General Dhahi Khalfan Tamim went
further, saying in a speech that the nation was flooded with so many
foreigners that it was 'at a crossroads' and in danger of getting out of
control.
'I'm afraid we're building towers but losing the Emirates,' he said, to
frowns from the bearded royals on the podium. For once, someone was telling
them what their subjects really think.
One Oxbridge-educated Dubaian woman in her late 20s, who asked not be named
for fear of damaging her career prospects, told me plaintively how she
returned from her studies in England to find a country in which she no
longer feels at home.
Backdrop to beach loving: The Burj Al Arab hotel, where some 79 people have
been arrested for 'behaving indecently' in recent days
'Taxis don't stop for us, people won't rent us apartments, and we're
routinely ridiculed and insulted,' she said. 'And how do you think it feels
to hear about a British woman having casual sex on the beach when we still
can't even discuss sex with close friends? It's the big unspoken elephant in
the room.
'Our parents are in a collective state of denial. The pace of change in
Dubai is so bewildering that they simply don't know how to react. I think my
father's generation all need therapy.
'While the expats flaunt themselves in short skirts and low-cut tops and get
drunk, we are still at the stage where female students need a pass-card to
leave the university campus.
'I don't want to see this woman [Michelle Palmer] severely punished, but she
needs to understand that she has done irreparable harm to our chances of
improving women's rights here. Incidents like this just make our parents
even more paranoid about what might happen to us if British behaviour
becomes the norm, and so they are more controlling.'
Like others, she would like prospective incomers to be rigorously vetted to
root out the vacuous new breed of British yobs and spivs who are being lured
to Dubai in the expectation of acquiring an easy playboy lifestyle.
For despite its reputation for severe border and customs controls (a British
woman was recently jailed for possessing a codeine-based painkiller, and a
BBC DJ for possessing a minute trace of cannabis), the fact is that almost
anyone can come to stay here.
The effect of this open-door policy, which the government deems vital to
keep the economic wheels turning, is to make Dubai seem wilder and more
debauched than even the Spanish costas after the British invasion of the
Seventies.
Nowhere is more sickeningly emblematic of the country's seedy new underbelly
than the bar at the downtown York International Hotel - a squalid cauldron
that should shame any civilised society, let alone one so devoutly Islamic.
As the overhead TVs show bloody, noholds barred fighting contests, and music
throbs deafeningly, a veritable United Nations of prostitutes - Chinese,
Ethiopian, Russian, Nigerian - barter their services.
So why do Dubai's rulers turn a blind eye to a vice industry now as endemic
as that of Amsterdam or Las Vegas? The answer came from an anonymous expat
executive.
'To them it's one more service industry, pure and simple,' he said. 'If they
are to entice businessmen and tourists here, they know they must cater for
their every need. The only real taboos are gambling and drugs.'
For the government, he added, problems arise only when these 'needs' become
so visible that they begin to offend and corrupt the locals - which is what
is happening with increasing frequency.
They will then make a brief but very public show of propriety by ordering a
crackdown on ' immorality', as has happened in recent days following the
beach sex episode.
These events are dutifully reported by the state-controlled media. Last
week, police announced that no fewer than 79 people had been behaving '
inappropriately' on the beach; all westerners, naturally.
Bizarrely, they also claim to have arrested 41 foreign men for '
crossdressing' - proof that Dubai is fast becoming as exotic a sexual
playground as Bangkok.
To rub salt in the wounds, most of the cavorting is played out on Fridays -
a holy day in the Islamic world but a day of frenetic partying for the
expats, which begins with the notorious Friday brunch and often continues
until the sirens are wailing the first call to prayer at 5am the next day
Many native Dubaians are demanding that the gorging, riotous (and
occasionally orgiastic) brunch ritual be banned.
They also believe westerners should be required to observe the rules of
Ramadan, when locals are forbidden to eat and drink in public.
Bearing in mind the views of many British people who are concerned about the
lack of integration of some ethnic groups in this country, the feelings of
the Dubaians hardly seem unreasonable. At least, in Britain, many immigrants
have the desire to learn about our traditions and values, and master the
language.
But try asking an expat in Dubai whether they have ever toured the
magnificent Jumeirah Mosque (open to non-Muslims on certain days of the
week) or been for dinner with an Arab work colleague and his family.
When I posed that question to British residents here this week, most gave me
a look which suggested that they thought the sun had gone to my head.
One young Briton who works for the Dubaian royal family put it bluntly:
'There is no integration here at all. It may sound insulting, but nobody is
the slightest bit interested in making friends with the Arabs. It's just not
done.'
What the British are interested in is having a good time - and almost
everyone you meet has an anecdote about their shameful excesses.
One Indian taxi driver told me he often picks up British men and women so
drunk and abusive that he simply decants them at the police station, where
they are detained until they sober up and then escorted home. (So much for
'police heavy-handedness'.)
At Barasti, a fashionable bar on the new marina, a Filipino waiter spoke of
another regular spectacle: that of drunkards falling into the swimming pool
besides the decking. 'They are usually British,' he said. 'Sorry, but it's
true.'
Overlooking this bar, incidentally, is the skyscraper from which Ryan Guest,
a 26-year-old oil engineer, plunged to his death this week - reportedly
after an alcohol-fuelled row with his girlfriend.
It is not only the cocktail-swilling younger crowd who are disgracing
themselves. In the massive new Mall of the Emirates, a supermarket checkout
girl grumbled about the habitual rudeness of the so-called 'Jumeirah Janes'
- the expat British trophy wives who take their name from the affluent
district where they usually live.
Among the dozens of nationalities who shop there, she said, these women of
leisure, whose days revolve around nail parlours, beauty salons and luncheon
engagements, were invariably the most obnoxious customers.
'Why are your people so badmannered?'
Why indeed? Such complaints may seem trifling. Remembering Dr Davidson's
doom-laden prognosis, however, they are far more serious.
'Because Dubai has become this successful international brand, and
Premiership footballers go there, it has become so much more accessible, and
people tend to forget exactly where they are when they go there on holiday,
or to find work,' he says.
'But they would do well to remember that, to get there, they have had to fly
over Iraq and Saudi Arabia. That alone ought to be a very sobering thought.'
So it ought. And this week, when the chastened Michelle Palmer and Vince
Acors face an Arab court, they will no doubt be reminded, in the starkest
terms, exactly where their act of drunken folly was committed.
In ordinary circumstances, one might argue that their abject public
humiliation is punishment enough. But given that the stakes are so high,
perhaps it is time for an exemplary sentence to shock the hedonistic British
expats back to their senses.
If not, how long before another disaffected Emirati's home becomes a
terrorist's shrine?
The UAE and Congo air pact
17 July 2008
How strange is this air alliance. United Arab Emirates-based
RAK Airways plans to launch a new national airline in Democratic Republic of
Congo within three months, a company representative said on Thursday.
RAK Airways, promoted by the government of tiny Ras Al Khaimah (RAK), will
invest around $160 million and hold a 60 percent stake in the joint venture
with the Congolese state. The airline, with the original name, Air Congo,
will fly on domestic routes and to Ras Al Khaimah and to several
African destinations using a fleet of nine aircraft.
The airline is also looking into establishing long-haul flights to two
destinations in China via its hub in the UAE.
The venture is the latest foray by the tiny emirate into the vast
mineral-rich former Belgian colony. RAK Minerals and Metals Congo, operated
by Ras Al Khaimah's investment authority, is already involved in copper and
cobalt exploration in Katanga province, Congo's mineral heartland.
Congo has been fighting a civil war for decades. People rely upon poor
roads, unsafe boats and planes to travel. Congo has one of the worst air
safety records in the world.
In April, at least 21 people were killed when a passenger jet slammed into a
busy market after failing to take off from the eastern city of Goma. The
accident was the country's fifth fatal plane crash in less than a year.
All Congolese airlines are currently on a European Union blacklist of
companies banned from flying to European destinations. Air Congo will need
to be cleared by the EU before serving destinations outside Africa; this
could take 6 to 12 months.
RAK Airways, launched two and a half years ago, is the UAE's third-largest
carrier, with international routes to Colombo, Dhaka, Kolkata, Beirut, and
Sofia.
Man the barricades - this will get ugly
16 July 2008
Let's call it what it is - a recession of mega proportions. A
recession that may rewrite in a very short time the economics and power map
of the world. The USA is reeling; the US$ is reeling; and all that appears
to be saving it is that the rest of the world holds so much US$ that they
cant afford a major revaluation.
Now down 23% from its October high, the Dow Jones industrial
average has reached a two-year low. The US Labor Department says wholesale
prices are rising at their fastest pace since Ronald Reagan's first year in
the White House. Embattled automaker and American icon General Motors
suspended its dividend to stockholders. The last time that happened? 1922.
This is no ordinary economic crisis, and it won't be over anytime soon. It
may have started in the USA. But the impact is global. There are few
beneficiaries other than those who want to see the USA humbled. But
will the US financial crisis create a contagion effect that could yet weigh
more heavily on the global economy. The impact is already apparent in Europe
and on world markets. In Paris and London, stock markets fell yesterday to
their lowest levels since 2005, partly as investors doubted plans unveiled
by U.S. regulators this weekend to prop up the ailing government-sponsored
mortgage giants Fannie Mae and Freddie Mac.
It will get worse before it gets better. A year ago, the
financial virus seemed confined to subprime mortgages, defaults on loans
given to those with less-than-perfect credit. Now, the US and increasingly
the global banking system appears insecure. Huge credit card defaults are
starting. While industrialised economies are slowing to a near standstill
the fats-growing countries such as China and India are making the prices of
commodities from oil to food soar at alarming rates.
The western nations have lived off property booms. Rising house prices
boosted consumption, as consumers tapped home-equity loans for cash to pay
for everything from new cars to college for the kids. It was left to market
forces to act as the regulator. And the market did react but too late and
with dramatic effect.
Global concern is mounting for several reasons. First,
foreign financial institutions are heavily exposed to U.S. lending giants,
and an alarming 50 percent of U.S. mortgage-backed securities are held by
foreign investors. American woes have fostered a global credit crunch,
claiming overseas victims such as Britain's Northern Rock, where a lack of
liquidity led to its nationalization by the British government in February.
Secondly U.S. consumers, who gobble up more foreign goods than the citizens
of any other land, are eliminated expenses significantly in the face of
falling housing values, rising unemployment and a possible recession.
So governments step in and in the US there were $91 billion
of tax rebates that consumers began receiving in May. Banks are bailed out
of crisis in the US and the UK. But maybe that merely postpones the
recession.
How bad will it get - who knows. Some are forecasting the
worst financial crisis since the Great Depression. What it does mean is that
fortress America is being breached like never before. American is for sale
to foreign investors who now have the cash that U.S. institutions lack. This
week, it was Anheuser-Busch, maker of Budweiser beer, being sold to a
Belgian company. Earlier this month, the Chrysler building in New York went
to an investment fund based in Abu Dhabi.
As for banks; the housing crisis has left financial institutions with deeply
wounded balance sheets, as the mortgage securities they hold have turned out
to be worth far less than once believed. Major global banks now need to
raise a lot of money. There will be more bank failures; not just in the USA
but in Europe as well.
Meanwhile expect to see some good old fashioned pump priming to try to
salvage western economies; public works projects to the fore and this means
further government involvement in western financial systems is inevitable.
Living in Dubai makes so much of this crisis feel unreal.
Managed economies. Soaring immigration. Housing prices continuing to
escalate and the Middle East nations using the petro-dollar surpluses to buy
significant dollar based assets at bargain prices.
Is this the recession that moves the balance of economic
power from the west towards the east? The trouble with being the world's
largest economy is that you have the furthest to fall when the going gets
tough. The USA may never be the same again and there are many people in the
Middle and Far East that will be smiling at that thought.
The "just business" defence
16 July 2008
This article is by By Peter Navarro and was published by Asia Times -
with only a few weeks until the start of the Olympics expect a few more
articles on China.
"China last week once again demonstrated its willingness to
opportunistically trade diplomatic favors for access to African riches.
Joining with Russia, the People's Republic vetoed a UN Security Council
resolution that would have imposed tough sanctions on Zimbabwe's President
Robert Mugabe and other members of his illegitimate regime for rigging the
country's presidential election.
China has in the past "sold" its UN veto power to protect Sudan from
sanctions over the killing of people in Darfur in exchange for access to
Sudanese oil. China is now Sudan's biggest customer. Beijing has also
provided Iran with diplomatic cover at the UN for the Middle East country's
nuclear development program in exchange for access to its huge natural gas
reserves.
In Zimbabwe, it's not petroleum that China covets. Rather, the African
nation is the world's second-largest exporter of platinum, a key input for
China's auto industry. China is also the world's largest steel producer, and
Zimbabwe controls more than half of the world's known chromium reserves,
used in making stainless steel.
On the agricultural front, China has long coveted Zimbabwe's rich tobacco
fields. As the world's largest cigarette producer, China produces roughly 2
trillion sticks a year (which annually kill about a million Chinese). Over
the past decade, by providing Mugabe with diplomatic cover at the UN and by
lending his regime huge sums, China has been able to gain control of much of
Zimbabwe's valuable tobacco output.
Zimbabwe used to sell its tobacco at international auction for top dollar
and hard foreign exchange. Today, Zimbabwe’s crop is funneled directly to
China's 300 million smokers as payment in kind for the loans Beijing
provides. Even as Zimbabwe's agricultural sector collapses under Mugabe's
rule, Chinese companies control land the Zimbabwean government once
confiscated from white farmers.
China's Zimbabwe gambit is symptomatic of a broader brand of Chinese
imperialism that would have Vladimir Lenin and Mao Zedong turning in their
graves. It is a strategy driven by China's reliance on a heavy-manufacturing
economic model, leading to the country now consuming half of the world's
cement, one third of its steel, one fourth of its copper, one fifth of its
aluminum, and having the fastest-growing share of the world's oil.
China's strategy for securing these scarce natural resources is a zero-sum
game played against the West. Rather than relying on world markets as do
Europe and the US, China seeks to gain physical control of these resources.
It does this by first ingratiating itself with foreign governments, then
encircling the country's natural resource riches with virtually every
strategy described by Lenin in the "imperialist playbook".
As its core strategy, China dangles lavish, low-interest loans as bait and
uses its huge army of engineers and laborers to help the country build up
its infrastructure, from roads and dams to hotels and stadiums, from
parliament buildings and palaces to satellite capabilities and
telecommunications networks. In countries from Angola to Zimbabwe to
Myanmar, China also sells the ruling elites the weapons they need to hold on
to power - and rig the occasional election, as Mugabe just did.
Today, more than a thousand Chinese firms, private and state-owned, have
been deployed to more than 50 African countries, many bringing in their own
workers to add to the estimated 3 million Chinese working overseas. Backed
by heavily subsidized, low-interest loans from the government, both
state-owned and private Chinese construction firms have been able to put
down deep economic roots in African soil, while helping China to solve its
own politically volatile unemployment problems.
The investments made in highway systems and communications quite literally
and digitally pave the way for precisely the kind of imperialistic
"high-low" trade that Lenin once railed against. On the high end, China
directs its financial capital and human resources to the development of the
extraction and harvesting activities and transport of the natural resources
back home for the production of higher value-added goods.
In the process, China systematically strips nations of their raw materials
and natural resources. Adding injury to injury, China recovers the costs of
these resources and materials by dumping cheap finished goods into these
same countries, often driving out local labor and driving up the local
unemployment rate.
That China implements this imperialistic strategy by leveraging its position
as a permanent member of the UN Security Council with veto power is arguably
one of the most reprehensible aspects of an amoral foreign policy. That
foreign policy is founded on a principle that China's own President Hu
Jintao has preached like the lowliest of rug merchants across Africa and
Latin America: "Just business, no political conditions.""
Peter Navarro is a business professor at the University of
California-Irvine, a CNBC contributor, and author of The Coming China Wars
(FT Press). www.peternavarro.com
FlyDubai
goes Boeing
14 July 2008
In something of a surprise FlyDubai has opted for Being 737NG
airliners. Many of the successful low costs carriers operate the passenger
popular Airbsu A320 fleet.
New low-cost airline FlyDubai has ordered 54 Boeing
single-aisle 737 passenger jets in deals worth a total of 4.0 billion
dollars (2.52 billion euros). The purchase was announced at the Farnborough
Airshow on Monday.
FlyDubai said on the first day of the key industry
event that it had made a firm order for 50 of Boeing's so-called
next-generation 737-800 fuel-efficient passenger jets for 3.74 billion
dollars at list price.
FlyDubai had also agreed to lease four Boeing 737-800s from Babcock and
Brown Aircraft Management.
The mid-range 737-800 can transport up to 189 passengers and FlyDubai will
take delivery of its planes between 2009 and 2015.
Meanwhile Etihad Airways, the national carrier of the United Arab Emirates,
said it had agreed to firm orders to purchase 45 Boeing passenger
jets.Etihad, which launched in 2003, said it was buying 35 mid-sized
Dreamliner 787 jets -- Boeing's new fuel-efficient aircraft -- and 10
mid-sized Boeing 777s.
The airline made
the announcement at a press conference on the opening day of the Farnborough
International Airshow being held outside London and added that it would take
delivery of the 777s in 2011 and the Dreamliners in 2015.
Watch this space
for more Etihad announcements which are likely to include 10 AirbusA380s and
at least 25 A350s for delivery after 2012.
"Dubai - The Vulnerability of Success"
13 July 2008
A newly published book by Christopher Davidson - Columbia University
Press: 376 pp., $32.50. This is the first review that I have seen and was
published by the LA Times. It is unclear whether the book will get a Dubai
distribution. The issues raised are worthy of thoughtful debate and as Dubai
takes an ever larger role on the world stage it is inevitable that the
city's virtues and concerns will come under ever greater scrutiny. Still it
is better to be talked about than ignored! Read on !
"Back in February, Related Cos., the developer working with architect Frank
Gehry on a $3-billion mixed-use complex on Grand Avenue in downtown Los
Angeles, announced it was bringing in a new investment partner: Istithmar, a
sovereign wealth fund controlled by the ruling family of Dubai. The deal,
which gave Istithmar a 45% stake in the project, was reminiscent of the
1980s, when Japanese companies took advantage of a sagging American economy
to acquire skyscrapers and other high-profile buildings in Manhattan and Los
Angeles. And as was the case 20 years ago, people began asking curious,
anxious questions about the flush foreigners: Where did they get so much
cash, and what's leading them to use it to buy up -- or at least buy into --
our skylines?
For many Angelenos, the answer probably seemed obvious: The Istithmar fund
gets its money from oil, and Dubai's sheiks are keen to stash it abroad as a
way to diversify their portfolios before the petroleum reserves back home
run dry. As Christopher Davidson's "Dubai: The Vulnerability of Success"
makes clear, though, that explanation is mostly wrong. Dubai, one of seven
semiautonomous Persian Gulf sheikdoms that make up the United Arab Emirates,
has turned itself into a rising and nimble economic power that actually
depends on everything but oil to fill its coffers and fund its wide-ranging
domestic and international ambitions.
Unlike its supremely wealthy neighbor Abu Dhabi, which is practically
drowning in petroleum, Dubai never had much of the stuff to begin with. Its
production peaked in 1991, at around 420,000 barrels a day -- less than half
a percent of what Saudi Arabia now produces -- and today no more than 5% of
Dubai's GDP comes from oil-related revenue. The rest is provided by a
remarkably forward-looking economic engine that draws steady profits from
trade, luxury tourism, high technology and high-profile real estate
investments like the one on Bunker Hill.
While we moan about gas prices and try rather fitfully to imagine a
post-petroleum urban future, Dubai has largely already arrived there. Even
as construction workers hammer away at the 2,300-foot-high Burj Dubai tower,
which will rank when finished later this year as the tallest building in the
world, Dubai is showing its ambition below ground as well. The emirate is
building a sophisticated subway system that will be mostly complete by 2010
and rival any in the developing world -- and many (ahem) in the West.
As Davidson traces Dubai's rise from sleepy Gulf port to player on the world
scene, he devotes equal time to highlighting "several key problems that lie
beneath the emirate's glittering facade." Now a fellow at the Institute for
Middle Eastern and Islamic Studies at England's Durham University, Davidson
earlier worked as an assistant professor of political science at the Sheikh
Zayed University in Abu Dhabi and Dubai, and his familiarity with the quirks
and customs of Dubai helps lift the text, while quite dry, above typical
think-tank fare.
The book defines Dubai as a new breed of political and urban animal, equal
parts Las Vegas and Singapore. Nominally Islamic but increasingly Western on
its public face, Dubai combines laissez-faire economic policies with an
unapologetically closed political system. As a place to run an international
business, Dubai has few peers, as was demonstrated last year when defense
contractor Halliburton, to Washington's chagrin, relocated its corporate
headquarters there from Houston. As a political entity, Davidson writes,
"Dubai is still an autocracy, where real evidence of an opening for true
democracy proves hard to find, and where far less political reform has
occurred than in neighboring Gulf states, including even Saudi Arabia."
As singular a place as Dubai has become, with its just-add-water skyline and
its indoor ski resorts, with its archipelagoes of man-made islands topped by
multimillion-dollar villas, its blueprint for success may also be a sign of
things to come. If the titanic, expensive struggle between capitalism and
communism dominated the geopolitics of the second half of the 20th century,
the early years of the 21st are shaping up as a test for a handful of hugely
ambitious regimes trying to mix free-market growth with autocratic rule.
Like China, if on a far smaller scale, Dubai is involved in a high-stakes
game of chance, betting that as long as it can keep its economy revving at a
high enough level, it will be able to keep real political restructuring at
bay.
Unlike China, however, Dubai's government can take some patriotic solace in
the fact that the repressed masses are guest workers rather than its own
citizens. Dubai is both a land of opportunity and a harsh proving ground for
its lower-class immigrant workforce, particularly the South Asian
construction workers brought over to build a mushrooming collection of
skyscrapers in punishing desert heat. In Dubai, economic growth is a means
of maintaining a patronage system for the emirate's 80,000 or so actual
citizens, who make up just 5% of the total population of roughly 2 million.
China's boom, meanwhile, is largely being carried on the backs of its own
people, many of them internal migrants desperate for work. Dubai's so-called
nationals make up what Davidson calls "a business-focused national
population that to some extent views the government as a board of directors
rather than as a forum for political participation." Dubai's first elections
were held in 2006, for a handful of regional positions, and were "widely
regarded as farcical."
That patronage system may pose risks to Dubai's future stability. Because
they grow up coddled by "an extreme nanny state in which every aspect of
their financial lives has been taken care of," Davidson argues, Dubai's
citizens are hardly models of diligent ambition. "A weekday visit to any of
Dubai's major shopping malls [reveals] legions of able-bodied young men
drinking coffee and playing video games."
The emirate's much-vaunted commitment to free trade has a dark side: It has
become a busy hub for gunrunning, money laundering and human trafficking. In
global political terms, Dubai leads a risky double life. It operates under
the Western military umbrella but continues to be attentive to Islamic
fundamentalism and is frequently accused of paying protection to extremists
to prevent terror attacks on its own soil. The UAE was one of only three
states to recognize the Taliban government during its reign in Afghanistan,
and in the wake of the U.S. invasion of Iraq, a number of Saddam Hussein's
top lieutenants took refuge there.
Washington has long had serious worries about the ruling sheiks'
relationship with Al Qaeda. Two of the Sept. 11 attackers were UAE natives,
and much of the funding for the attacks themselves was wired from or
laundered in the emirates. In 1999, American forces were ready to fire
cruise missiles on a hunting camp in a remote corner of Afghanistan where
they believed Osama bin Laden was hiding. Before they could pull the
trigger, intelligence officials noticed that a C130 transport plane with UAE
markings was sitting on an airstrip at the camp. According to the Sept. 11
commission report, the strike was called off because "policymakers were
concerned about the danger that [it] would kill an Emirate prince or other
senior officials who might be with bin Laden or close by."
At the same time, curiously and dangerously enough, Dubai's close
relationship to Washington makes the emirate itself a possible terror target
from the same extremists it is accused by the West of harboring. Rather
ominously, Davidson cites a fiery threat from a group calling itself the Al
Qaeda Organization in the Emirates and Oman. The statement demands that all
U.S. military installations in the UAE be dismantled. Failing that, it
concludes, the UAE's ruling families will find "the mujahideen in their
faces.""
Feed the G8 and forget the rest
11 July 2008
In the ultimate display of just how out of touch the G8
leaders are; this group of ex-colonisers, having talked for two days about
global hunger, food waste and African famine, then gorged themselves silly in Hokkaido.
Their eight course dinner
prepared by 25 chefs followed on from a decent sized lunch washed down with Chateau Grillet 2005, which had clearly fully failed to quell appetites possibly
enlarged by agonising over the starving citizens of the world.
The G8 gathering had been described by some as a "world food shortages
summit" as leaders sought to combat spiralling prices of basic foodstuffs in
the developed world and starvation in the developing world.
But perhaps not since Marie Antoinette was supposed to have leaned from a
Versailles palace window and suggested that her breadless peasants eat cake
can leaders have demonstrated such insensitivity to daily hardship than at
the luxury Windsor Hotel on the northern Japanese island of Hokkaido.
Gordon Brown, who had earlier called on Britons to waste less food, had been
spending the day talking about the famine in Africa, among other subjects.
He then joined the other politicians, and five of their spouses, at the
social dinner, which began with four bite-sized amuse bouche, featuring corn
stuffed with caviar, smoked salmon and sea urchin, hot onion tart and winter
lily bulb.
Guests at the summit, which is costing £238m, were then able to pick items
from a tray modelled on a folding fan and decorated with bamboo grasses,
including diced fatty flesh of tuna fish, avocado and jellied soy sauce and
Japanese herb "shisho".
Hairy crab Kegani bisque-style soup was another treat in a meal prepared by
the Michelin starred chef Katsuhiro Nakamura, the grand chef at Hotel
Metropolitan Edmont in Tokyo, alongside salt-grilled bighand thornyhead, a
small, red Pacific fish, with a vinegary water pepper sauce.
Further dishes including milk-fed lamb, roasted lamb
with cèpes and black truffle with something called emulsion sauce.
Finally, there was a "fantasy" dessert, a special cheese selection
accompanied by lavender honey and caramelised nuts, while coffee came with
candied fruits and vegetables.
The leaders, also troubled by global water shortages, could choose from five
different wines and liqueurs, including two brought from France.
Earlier, lunch had included asparagus and truffle soup, crab and supreme of
chicken served with nuts and beetroot foam, followed by a special cheese
selection, peach compote milk ice cream and coffee served with petits fours.
How out of touch can people be.....and how arrogant their message?
Public interest or privacy invasion?
11 July 2008
The British courts may create significant precedent next week
when judgment is passed in the case brought by Max Mosley against the News
of the World. Though even an adverse judgment against the newspaper wont
upset them too much as the story has already sold millions of copies of the
newspaper, driven massive volume to the web site and even got me writing
about it !
Max Mosley is the son of Nazi war apologist Sir Oswald Mosley
who founded the British Union of Fascists. He is also the president of the
Fédération Internationale de l'Automobile, the governing body of Formula One
racing. He also has spent 45 years practising BDSM.
This case that could define the future freedom of the British
press but it contains some of the key ingredients of a Whitehall farce: a
seemingly respectable middle-aged man caught with his pants down, drinking
tea and chattering away to scantily clad women in badly accented German that
sounds more like an episode of the sitcom 'Allo Allo.
Mosley has brought a legal action for breach of privacy against the News of
the World after the paper secretly filmed his encounter with five
prostitutes. For the newspaper it was a dream story combining sex, crime,
celebrity, motor sports and the Second World War under the headline "Formula
1 Boss Has Sick Nazi Orgy With 5 Hookers."
The paper described the encounter as a "Nazi-style orgy."
Mosley says that these allegations are so malicious that he is entitled to
exemplary damages. For the News of the World, the case is not simply the
latest in its long tradition of vice-related exposés, it is a revelation of
the depraved and violent behaviour of an elected official with global
influence.
Mosley has brought his action under article eight of the European Convention
on Human Rights, which guarantees his right to privacy. It is the same piece
of legislation that has been used by other celebrities, including Princess
Caroline of Monaco and Naomi Campbell, against perceived media intrusion.
News organisations such as News International, which owns News of the World,
have often sought to defend themselves by citing article 10 of the
convention, which protects freedom of expression. Yet, so far, the media
have met with little success.
Precedent indicates that the courts seem to favour privacy over the public's
need to know. That seems for the most part appropriate. As long as there is
a dividing line that recognises the public's right to be aware of serious
investigations. Serious being anything that does not involve the News of the
World !! The judge is likely to find for Mosley. Especially since Madam E;
the lead witness for the News of The World, who was paid by the newspaper to
film the meeting, failed to show in court yesterday and will not now give
evidence.
The News of the World will argue that the Mosley story
amounts to far more than gossip. It will seek to persuade the judge that the
Formula 1 chief's behaviour was brutal and his sexual activities depraved.
It will argue that Mosley's German speech (and English spoken with a bizarre
German accent), and the wearing of uniforms that it maintains were German,
all justify its claim that this was a role-play exercise inspired by German
military history, 1939-45, his father's legacy haunting the son.
The uniforms appear to have been jackets purchased in MandS,
Marks and Spencer, that bastion of Britsh conservtism!; soon to be renames
SandM!
I feel a bit sorry for the old boy - 45 years on and he still
has kept this secret from his family around him. Maybe what you don't know
cant hurt you; but the F1 business is too big, has too much money and is too
high profile. And Mosley made himself as easy target.
In the dock
Jul 10th 2008
From The Economist print edition
Legal cases mount against the former prime minister and his allies
Enemies of Thaksin Shinawatra, Thailand’s deposed prime minister, hope that
a sudden blitz of court cases will achieve what protracted street
demonstrations and even a military coup failed to do: finish off him and his
allies for ever. On July 8th the Supreme Court in Bangkok began hearing the
first of several criminal cases against Mr Thaksin and people close to him.
In a separate case the court banned one of his lieutenants from politics for
five years, which could trigger the disbanding of the pro-Thaksin People’s
Power Party (PPP), the winner of December’s election.
The Constitutional Court was also busy: it struck down an agreement the
government had reached with Cambodia in a territorial dispute over a Hindu
temple—a ruling that prompted the foreign minister’s resignation and could
eventually lead to criminal charges against the whole cabinet.
When the army toppled Mr Thaksin in September 2006, following months of
protests against him, it cited “rampant corruption” in his government as one
of its main justifications. But it has been a long struggle to muster
convincing evidence. Until a few weeks ago it looked possible that no
charges might ever reach court. Now, however, things are moving fast.
In Mr Thaksin’s first trial he is accused of having, when prime minister,
influenced a state agency to sell his wife some land in Bangkok for well
below its market value. In June three of his legal advisers on the case were
jailed after giving court officials a bag holding 2m baht ($60,000). They
said it had got mixed up with another, containing chocolates—but the court
decided it was blatant attempted bribery.
Mr Thaksin’s original party, Thai Rak Thai, was dissolved last year by a
tribunal created by the coupmakers but his allies regrouped in the PPP and
won the largest number of seats in December’s polls. It now rules in
coalition with five small parties, with Samak Sundaravej, Mr Thaksin’s
self-described “proxy”, as prime minister. Now the PPP risks disbandment.
The Supreme Court this week barred Yongyuth Tiyapairat, a PPP
parliamentarian, from office for vote-buying. Since Mr Yongyuth is a party
boss, the Election Commission can now ask the courts to judge the PPP itself
guilty and disband it.
Various other cases are due in court soon, including one in which the
Thaksin government allegedly made illegal loans to Myanmar so it could buy
services from a telecoms firm then owned by Mr Thaksin’s family. Similar
accusations are being made in the case of the disputed Preah Vihear temple
on Thailand’s border with Cambodia. Mr Samak’s government signed an
agreement supporting Cambodia’s bid to have the temple recognised as a
“world heritage” site (which a United Nations committee accepted this week).
The opposition accuses the government of selling out Thailand’s sovereignty
to help Mr Thaksin’s business interests in Cambodia. This week’s ruling that
the agreement was unconstitutional, because parliament was not consulted,
may now be used to press charges against Mr Samak’s cabinet.
Sadly all this judicial activity does not seem to amount to a thorough
cleansing of Thailand’s endemic political corruption and impunity.
Thaksinites see the cases as part of a plot by their foes—Bangkok’s
conservative, royalist elite—to destroy them. Thailand’s poorer, rural
majority may indeed feel angry that they keep voting for Mr Thaksin and his
allies, because they like his policies, such as cheap health care and
microcredit schemes, only to have their will frustrated by the capital’s
elite.
The Thaksinites hope that even if ousted from office again they can regroup
once more and win another popular mandate. They are said to have created yet
another party in case the PPP is banned. Their foes hope that, as guilty
verdicts mount against Mr Thaksin and company, and as high inflation erodes
living standards, popular support for Thaksinism will wane. Meanwhile the
country faces more uncertainty, with the government fighting for survival
instead of tackling Thailand’s mounting economic problems.
Thaksin's friends go one by one
10 July 2008 (Time magazine)
They're falling like dominoes. In just 48 hours, three top
allies of Thailand's Prime Minister Samak Sundaravej have been forced out of
politics by a series of legal blows. On Thursday, Foreign Minister Noppadon
Pattama resigned after a constitutional court red-carded him for not
consulting parliament on a border dispute with Cambodia. On Wednesday, the
same court forced the resignation of Health Minister Chaiya Sasomsap for not
declaring his wife's assets before taking office, as is required by Thai
law. And on Tuesday, former speaker of parliament Yongyut Tiyapairat was
banned from politics for five years when the Supreme Court upheld a lower
court's verdict of electoral fraud.
Just five months into his tenure as Prime Minister, Samak — a veteran
right-wing firebrand who is equally as famous in Thailand for his TV cooking
show — is now fighting for his political life. Not only has he lost three
linchpins in his People's Power Party (PPP), but one of the court decisions
could also spell the end of the entire party. Thailand's constitution
mandates that a political party can be dissolved if one of its executives is
found guilty of a crime. House speaker Yongyut was the PPP's deputy leader,
and therefore the party — itself a proxy for another political bloc that had
been forcibly dissolved earlier — could be extinct within a matter of weeks.
This latest spasm of political instability has spooked investors, sending
Thailand's stock market down nearly 20% since late May. The index had
already been a lackluster performer, with the country still recovering from
the aftermath of the September 2006 military coup that unseated elected
Prime Minister Thaksin Shinawatra. A billionaire tycoon who is generally
loved by the poor and reviled by the rich, Thaksin was charged with
corruption and his party was disbanded. On Wednesday, the first of many
cases against Thaksin got underway in Bangkok, just as other courts were
busy issuing rulings that dealt body blows to the PPP.
Samak's PPP won elections last December by essentially campaigning as a
proxy for Thaksin's banned party, promising plentiful health care and
village loans. The message resonated with the rural poor, who ignored the
coup leaders and brought Thaksin's supporters back to power. Indeed, even if
the PPP is dissolved because of its deputy leader's alleged malfeasance,
another round of elections would likely bring some other newly formed proxy
party for Thaksin to power. In essence, it would be back to square one.
That potential scenario infuriates many members of Thailand's elite, who
believe that Thaksin, far from being a populist democrat, is actually a
corrupt politician who distorted democratic institutions to cement his
power. Since late May, thousands of protesters have camped out in central
Bangkok calling for Samak to resign because they believe he is little more
than a Thaksin puppet. Samak begs to differ, telling TIME recently that he
doesn't consult with his predecessor on political issues. "I can do [it] on
my own," he says.
But if the political decisions over the past five months are truly Samak's
own, he's shown less than a delicate hand. Case in point is the court
decision that brought down Foreign Minister Noppadon. Earlier this year,
Thailand supported Cambodia's bid to gain UNESCO World Heritage status for a
temple located in a disputed border zone between the two nations. Although
the temple itself sits on land that an international court deemed to be
Cambodia's back in 1962, Thailand claims the main access area to the temple
as its own. So when Noppadon provided official Thai backing for Cambodia's
sole application for World Heritage status�as opposed to a joint bid by both
countries�nationalists in Thailand were up in arms. The constitutional court
then ruled that Noppadon's decision to support Cambodia's bid without
consulting parliament first was unconstitutional because under Thailand's
charter, any agreement with another nation should pass through the
legislature.
In his resignation speech on Thursday, Noppadon insisted he had done nothing
wrong. "I have not sold the country out," he said. "I love Thailand and
would not cause any damage to the nation." But Noppadon is in a vulnerable
position; before serving as Foreign Minister, he was Thaksin's lawyer and
spokesman. One of the reasons the coup leaders gave for deposing Thaksin was
that he supposedly had not shown enough respect for Thailand's beloved king.
For Samak's enemies, in turn, taking an allegedly cavalier attitude toward
Thailand's territorial integrity was not so different from an alignment with
a man they believe had denigrated their monarch.
In order to salvage his rule, Samak will likely have to announce a major
cabinet reshuffle. The 73-year-old P.M. has promised to face the nation on
Sunday during his weekly TV address. In the meantime, Thailand's usually
outspoken leader is keeping uncharacteristically quiet. Nobody wants to be
the next domino.
Top 10 cities - 2008
From Travel and Leisure Magazine: 10 July 2008
