How to be a popular boss

‘Federal government employees, both nationals and expatriates, have hailed the directives of His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai to raise their salaries by 70 per cent.’

I bet they bloody did.

The crackpot pay hike is not dependent on productivity or experience – though Khaleej Times says ministry staff have “pledged to work harder to further boost the country’s progress and development”. Which is good of them. And, remember, there was a 25% raise last year. It is aimed at combating rising living costs, but is the same as thinking printing more money beats inflation.

Without getting into the merits of whether these federal workers deserved such a dramatic raise, it is extremely unlikely private sector business would issue a blanket wage policy without tying it into some kind of performance/appraisal scheme. It also undermines efforts to attract nationals into the private sector. What private sector boss can match the sweeping generosity of the government? If you’re a national, apply for work at the ministry and sit tight, this says.

Crowded fairways

As reported last week, superlative-fixated Dubai is to host the world's richest golf tournament. You can argue whether $20m represents value (selling expensive villas, golf tourism, and go-getting Dubai don't come cheap), though even some within the golf community thinks the money is crazy. The Dubai papers are full of the details this morning - with one glaring exception: what will happen to the 10-year-old Dubai Desert Classic?
There's nothing to say Dubai can't host two big tournaments, but with the new $20m scheduled for November 2009 and the Desert Classic due two months later - are they too close?

Beyond tax-free

The UAE has one of the world’s most attractive personal tax environments according to a new global survey of expatriate hot spots by Mercer. I don’t know how long it took Mercer to compile the report (it canvassed 32 countries) but the UAE section should have easy enough: note for next year, guys, there is no direct taxation here.
At first glance the report, Mercer’s Worldwide Individual Tax Comparator, makes bland enough reading. The UAE is top, what more do we need to know. It is cost-of-living and competitiveness reports that we’re most interested in. How or how much expat workers can get for their dirham overseas. Or what it costs to rent a two-bed apartment in downtown Moscow, Bangkok or Cape Town.
Where there is benefit is in highlighting potential concerns for the future. The report highlights the difference in tax breaks for single and married workers. It also looks at flat-rate taxes and social security contributions.
Many observers say a tax environment is in the UAE inevitable (road tolls, municipality fees and state-owned service providers are already revenue-generating), and a consumer tax is expected to roll out. For expats with children, education is a de facto tax. Residents know they’re being taxed; for those yet to arrive there remains a certain appeal in saying you’re moving to a tax-free country. Losing this tax-free status is a significant step. How the UAE plans to introduce taxes will say a lot about the type of people it wants to attract.

Eco, my arse

If we are to believe the papers, Brad Pitt and Angelina Jolie have bought an island at Nakheel's World development. They want to make an eco-friendly resort "to showcase a greener lifestyle and promote environmental issues". Good luck to them.
Could they not have bought a real island, with its own water supply and pre-installed vegetation? Maybe one that didn't need A/C six months of the year.
Or, as Kipp suggests, was it Dubai's tough line on paparazzi that attracted them?

Winning friends, influencing people: Part II

ITP's Arabian Business last week ran a story saying work on Emaar's Burj development had stopped, as workers were on strike demanding better pay. By the next day the story was pulled, and no mention was made of the city's biggest labor dispute until an Arabtec press release appeared clarifying it was now business as usual. Yesterday Arabian Business awarded Mohamed Alabbar its Lifetime Achievement award, hailing the Emaar chief's 'far-sighted approach, innovative thinking and flawless execution'.
There's no disputing Mr Alabbar's mover-and-shaker credentials, but ITP could be a little less crass with its timing.

Form is temporary, class is permanent

Dubai is reported to be lining up a bid to host the world's richest golf tournament. The $20m championship will be the season finale of the 2009 European Tour, and will comfortably better the purse of any of the four majors. An announcement is expected on Nov 19.
As ever, the figures are ridiculous but Dubai might have got its sums right. The city wants to sell itself as the ultimate golfing destination (and flog some of those course-side villas) and, good as the Desert Classic is, it's no better than above-average. The city isn't interested in being an also-ran; it wants the best. If paying $20m gets it to the top-table, so be it.
The downside is money will only get you so far. You spend big this year, there could be someone else spending bigger next (Shanghai?). The Dubai World Cup, the world's richest horse race, is not considered the world's best horse race.
For that to happen, and for Dubai's $20m golf, the city must deliver quality. And deliver it continuously. It wouldn't hurt to create some tradition. At the moment the only tradition appears to be 'spend lots of money'.

Clampdown on the mobile office

Bad news for the Saudi publishing industry: the country's traffic department says it will fine motorists caught reading the paper while driving. Phone users and drivers with children on their lap will also be slapped with a maximum fine of $134, says Arab News, quoted on Kipp. So it's also bad news for Mobily, and more work for nannies.

The Vanishing 40,000

Arabian Business yesterday reported workers on the Burj Dubai were striking for the sixth day running. The 3,000 Arabtec-contracted laborers were refusing to leave their camps and work on the world's tallest building had ground to halt. This morning, AB has pulled the story, and there is no mention in any of the other local media. Strange, seeing as this is the biggest news story to hit one of the biggest industries in what Mastercard this week claimed to be the Middle East's center of commerce.
Locally, the Kipp Report is still following the story, mostly from AP reports. It appears the strike action is far larger than even AB was prepared to admit: some 40,000 Arabtec workers are involved, and they're asking for an extra $55 a month, up from a current $109. To put that in context, the Burj's Armani residences, on sale last week, start at $2,500 per square foot.

Flights of fancy

“Time matters here and one minute lost can cause a million-dirham loss,” says a Dubai businessman, fluffing up an Emirates Today story on the launch of a new helicopter air taxi. The service is hailed as an innovative solution for go-getting business champions to beat Dubai’s traffic snarl-ups.
It is, of course, nonsense. It is a gimmick to suggest Dubai is an every-second-counts kind of town; that businessmen are whisked for meeting to meeting, concluding mega-bucks deals. The reality is that most meetings drag on for hours, are interrupted by endless mobile calls, and that you leave without a decision being made. In 10 years living in London, a city with far worse traffic and far bigger deals, I never once heard of a businessmen using a helicopter to make an intra-city trip.
In a city as small as Dubai it is extremely unlikely a helicopter would be quicker than a motorbike in getting people door to door. It will certainly be more expensive. Is every building to be equipped with a helipad and express elevators to company boardrooms?
And who misses out on ‘million-dirham deals’ because they were a minute late? If the deal is that important to you, set off earlier. If Dubai wanted to speed up business, it could start by cracking down on the late payment of bills.

Who remembers 37th place?

Mastercard is in town pushing its Worldwide Centers of Commerce Index and while there are few surprises in the top 10 (see if you can list – one point per city, bonus point for the right ranking), it seems puzzling to see Dubai only at number 37. Puzzling, that is, if you believe all the IPO announcements, takeover deals and real estate mega-project launches make Dubai the center of the world.

In reality 37^th, sandwiched between Bangkok and Kuala Lumpur, is no bad effort given how much Dubai has progressed over the past 10 years. But Mastercard’s assessment seems to be damning it with faint praise: The region’s air and cargo traffic hub, Dubai also claims a flexible business climate that makes it optimal for growing companies.
Given that the top 10 are rated for their stability, openness and ‘knowledge flow’ (or the number of patents/innovations produced), having a good airport and an open mind towards business does not seem all that great.

Innovation over driving

This isn't a car blog, but...there was a great story in the Wall Street Journal last week: a former SAP exec, flush with $200m of venture capital backing, plans to overhaul the automotive business model. Why can’t the car industry be more like the mobile phone industry, is the basic gist of his argument.
Shai Agassi has no experience of the auto market, but he does have a very clear goal: to change the way electric cars are sold. Car makers will sell the shell of a car (the handset), he will sell the battery and top-up power (the SIM card and call credit).
"In the early years of his company, he expects to distribute cars directly to companies or other large buyers," says the WSJ. "But he eventually expects consumers to get their cars from conventional dealers, while he operates an infrastructure that includes the batteries and the charging network. He likens his company to a wireless provider, such as AT&T, that provides a subscription service that makes phone calls possible, while auto makers would be like handset makers such as Nokia."
Brilliantly simple. I wish him luck, and waits to see how the oil and auto business fights to put him out of business.

Hummer: planet saver

Fantastically provocative headline from InfluxInsights this morning: which is better for the environment - a Hummer or a Prius? It picks up an essay from Nathan Shedroff, a graduate of the Presidio School of Management's Sustainable MBA program, that questions whether consumers know the true cost of manufacturing, transport and product life. If a Hummer is made closer to market in a more efficient factory, and lasts twice as long as a Prius, is it really so bad?
Shedroff doesn't have the answers, but he'd like consumers to start asking more questions. Think on it, next time you see a 'green' ad message.