Misreading the signs as UK raises terror alert level in UAE

Earlier this week, the British government has raised its terror warning to the highest level for its citizens living in the UAE. A statement posted on the Web site of the British Embassy in Abu Dhabi said the country has "a high threat of terrorism,” adding the kicker “we believe terrorists may be planning to carry out attacks in the UAE…attacks could be indiscriminate and could happen at any time."

Possible targets include spots popular with expats.

What kind of impact does this have expats living in the country? And how might it affect those planning to visit, or do business?

Who knows, but it surely can’t boost numbers or encourage expats to get out and about. In the absence of official measurements, it is tempting to read much into the most innocent of things: last night’s pub quiz at the Arabian Ranches Golf Club, usually packed with expats, had spare tables. What caused the stayways?

On the upside, the place filled up at 10.30pm for the Italy-France game.

Taxi driver road rage as Dubai's hyper-growth hammers earnings

Hurried driver training and draconian penalties sees moral plummet among drivers of Dubai's 3,000-strong taxi fleet.

Thoughts on a misguided attempt to celebrate Filipinos

‘Imagine a world without Filipinos’ is the heading of an unintentionally hilarious opinion piece in today’s Arab News. The writer claims the owner of Jeddah flower shop became handicapped after his Filipino workers insisted on leaving and returning home: “When they left, I felt as if I had lost my arms. I was so sad that I lost my appetite,” says the distraught owner, forgetting that losing the use of his arms would have made eating difficult anyway.

The piece goes on to extol the virtues of Filipino workers – though the credit seems to begin and end with the fact they speak good English and learn quickly. It manages to both patronize Filipinos and avoid criticizing the locals. If the Filipino Diaspora is to be celebrated is because Filipinos are prepared to travel to find work, accept pay and conditions that the locals wouldn’t accept, and, above all, work hard.

If the Arab News writer really wanted to shake things up, he might start a campaign to introduce a National Job Swap Day. Hopefully by then the Jeddah flower seller will have regained the use of his arms.

Why does a Dh25 phone card cost Dh28?

A Dh25 Etisalat pay-as-you phone card will cost you Dh28 at the shop at Jumeirah’s Bab al Shams hotel. The bloke behind the counter smirked and shook his head when I asked him why there was a 12 per cent mark up. The place is out in the middle of nowhere, but as Jumeirah’s website explains, it’s only 45 minutes from the airport. Surely it’s not transport costs. Does anyone have an explanation? Feel free to mail any other examples of rip-off prices in Dubai.

Great customer service should be a thrill, not a chore

There is alarming lag between the rate of development of new business in Dubai and the standard of customer service, says a new report. File this one under ‘Stating the Bleedin’ Obvious’.

The Joshua Group says standards have fallen over the past seven years, and the retail sector is the worst offender. It says consistency of service, anticipation of customer needs, staff behavior, and the timely delivery of orders was way below international standards, some missing targets by as much as 60 per cent.

Kipp couldn’t agree more. There is a misconception that having someone fill your car, clean your windows, deliver your lunch to your desk and bring you a beer represents great customer service. It doesn’t. These are menial service duties.

Among other things, great customer service means remembering your drink order, anticipating future needs, learning what else the customer might need, and acting on feedback. And it starts by empowering the worker, not treating them (and paying them) like lackeys.

Ministry to tackle laborer summer break by having more inspectors work through the midday heat.

The UAE’s Ministry of Labour says it is to get tougher with companies which force laborers to work through the midday heat. Site inspections will be increased to catch employers violating work-time restrictions, which come into force next month. Presumably this means there will be more inspectors having to work between 12.30pm and 3pm. Lucky them.

The Ministry says it upped the site visits from 3,699 in 2006 to 7,070 in 2007. But this year it has a cunning plan to save its inspectors making wasted sweaty trips to building sites. It says the public can report violations via the ministry’s website at www.emol.ae. Is it me, or is it too tempting to have the inspectors running around on wild goose chases?

As oil price leaps, Saudi forced onto PR front foot

Australia's prime minister called for a blowtorch to be applied to OPEC to up oil production, Portugal's economic and innovation minister wants an EU investigation into oil market speculation. Whatever the reason for oil at $140, Saudi Arabia, the world's biggest oil exporter, is under scrutiny: is it doing enough to ease the pain?

In an attempt to take the heat out of situation, the Saudi government has called for a meeting between oil producing and consuming nations about how to handle the price surge. It's not quite clear what this summit meeting will achieve, but, with the money rolling in, it doesn't do any harm to appear to be concerned.

A world pissed off with high oil prices might be just the thing to tempt Saudi into a higher public profile. Abu Dhabi, also sloshing with oil cash, can trumpet its carbon-free Masdar project. Dubai has its Blue Communities coastal living initiative. It may be time for Saudi to lead the world in some technology of the future, not an irritant of the present.

After failing at the Olympics, Qatar might start to look desperate

After failing to make the shortlist for the 2016 Olympics, Qatar is reported to readying a bid to host the 2018 World Cup. Sheik Hamad Bin Khalifa al-Thani, Emir of Qatar, is said to be serious about bringing a major sporting event to the country – and beating the UAE to it, but doesn’t want to be humiliated by the judging process.

He’ll be lucky. Despite being impressed by Doha’s technical credentials, the International Olympic Committee flatly rejected the proposed October dates. The World Cup is even less flexible: it must be staged at the end of the European football season – June to July. Unless every game is to be played indoors, a Doha World Cup is a non-starter.

There is merit in bidding – networking, learning new skills, preparing the ground for a future, more realistic bid – but only if success is not judged on winning alone. After yesterday’s win over China in qualifying for 2010, Qatar’s national team has more success of World Cup glory than the country has of hosting the main event.

For low cost carriers to keep growing, regional authorities need to start investing in new airports.

There is not much Adel Ali hasn’t learned from the success of low cost carriers in Europe. The Air Arabia chief knows his product wouldn’t mean much without airports – the more places he can fly to, the better his product.

Europe’s low cost carriers, often working in tandem with regional councils, have done much to create new routes. The new, small regional airports have created booms in second homes, opened new tourism markets and aided business. Regional councils have bid to win the rights to host a low cost carrier, knowing the positive economic impact they can bring.

Ali wants to see more secondary airports in rural areas outside of major cities. It will make his airline more relevant to more people, and lower operating costs also appeal. Time for the Gulf’s less celebrated towns to stand up.

GM’s green push does not spell the end of the Hummer brand.

General Motors is hinting that Hummer’s face doesn’t fit. The super-sized brand is to be reviewed, with a possible sale on the agenda. GM wants to concentrate resources on green and electric alternatives.
No problem with that: environmentally-friendly, non-oil cars are the future. GM, with tight finances and plenty on its plate, needs to throw resources where it hopes to find the best returns – now and in the mid-term.
But that shouldn’t doom the Hummer brand. To many, the brand may be shorthand for ‘reckless Earth killer’, but, in its favor, it has great product recognition, a strong band of loyalists and real off-road pedigree. Granted, running a Hummer on UAE petrol prices is not so much of a bind, but there will always be segment that can afford to pay top whack for fuel.
There can only ever be one ‘biggest car on the road’. Hummer might take some shifting.

Rain-makers threaten to piss on solar panel’s chips

It has all the ingredients of a farce. One government-sponsored body is seeding clouds, trying to create artificial rain; another is pumping $2bn into developing solar panel technology. Let us hope the two sides are talking to each other – or that a documentary team is recording the scenes as a cloudburst from the National Centre of Meteorology and Seismology soaks guests touring Masdar’s new solar plant.

Bahrain’s ridiculous overreaction

Bangladeshis in Bahrain awake this morning feeling a lot more welcome in the country. Two weeks ago 100,000 Bangladeshi workers were threatened with expulsion after the murder of a Bahraini by a Bangladeshi mechanic. The Ministry of Interior now says those Bangladeshi already in the country can stay – and carry on building the country’s infrastructure – but no new arrivals will be allowed in. It’s not exactly lining the streets with Bangladeshi flags, but it’s a start.

Bahrain’s ridiculous reaction is echoed in Kuwait. Kuwaiti MPs had called for expulsion of Bangladeshis blaming them for the increasing crime rate in the state. General Moeen U Ahmed, Chief of Staff of the Bangladesh Army, on a recent trip to the country, had to remind his hosts of Bangladesh’s response to the 1990 invasion by Iraq: it sent two infantry divisions and left a mine-clearing team to help with the rebuilding.

If Bahrainis can’t remember that far back, or think Kuwait is too far away, they need only glance at the country’s towers, roads and houses for evidence of Bangladesh’s usefulness.

The danger of accepting a September-to-March sporting calendar

Abu Dhabi is in talks with the Women’s Tennis Association to host a top-class tennis tournament. Like golf, it wants to add an Abu Dhabi date to an early season ‘desert swing’ involving Dubai and Doha.

After winning the rights to host football’s 2009 and 2010 World Club Cup, the plan is to create a “circle of events between September and March”, according to Mohammad al Mahmood, the general secretary of the Abu Dhabi Sports Council. It already has Formula 1, power boating, golf and the Red Bull air race. Add this to Dubai’s two golf events, tennis, Rugby 7s, marathon and international football friendlies and you have a steady stream of world class sport in the UAE.

Mahmood is sensible is playing to the country’s strengths (great winter weather), but that shouldn’t write off April to August, it risks ghettoizing the UAE as a seven-months-of-the-year kind of place. Qatar has announced plans for a new indoor sports arena, large enough to host football games. Boxing, swimming, snooker (no joke, the game is taking off in China), basketball and athletics can all be stage indoors.

All is not lost. Mahmood says Abu Dhabi is to bid for the 2011 Ice Hockey World Cup.

From hero to zero

Six months after ITP decided he was the Middle East’s ‘CEO of the Year’, Omar Ayesh, boss of Tameer Holdings has stepped down. It wasn’t the only one to look stupid, Ernst & Young had picked Tameer as a finalist in its Middle East ‘Entrepreneur of the Year’ awards.

The government of Umm Al Quwain says Tameer’s excuses for the failure of its flagship Al Salam City project are “lies that aim to impair the emirate's reputation”. Sources within the company say Tameer pressed on with Salam City sales despite having no plan to provide water and electricity to the development. The Umm Al Quwain government, with enough on its plate, had made it clear to Tameer that it would not be sorting the utilities.

Ayesh says he is stepping down to allow the company’s executive managers to take the reins; it is hard to believe Ayesh’s head of the price Tameer has to pay to extract itself from the do-do. His replacement, Abdallah Hageali, is a Tameer man, so it’s no new broom.

So it’s tough times for Tameer, but, if this is a case of executive responsibility, it’s good news for UAE business. Poor performance should be punished – hopefully one day Gulf company’s can admit as much. And who knows, Ayesh might remake himself as the Comeback Kid.

Premium airlines will fail if they sell on price

Eos couldn’t make all-business work from London to New York, Silverjet is struggling with New York – London – Dubai, but a new operator hopes to drive a profit from a premium class airline flying within the Middle East.

Elite Jets, in partnership with Jet Aviation, says it can compete with legacy carrier’s first class offers, running smaller jets off-schedule from points around the Gulf, Egypt and Lebanon. It says its hourly rate, with seven people on board, comes in under a first class fare.

They may be right, and the venture has our best wishes, but at this level of the market it’s best not to hark on about price. The target audience – VIPs, CEOs and corporate execs – is much sought after, but doesn’t often pay for travel out of its own pocket. Who cares it it’s cheap, is it good? Plus, the legacy carriers’ loyalty schemes and air miles can be a lock-in.

Much better to promote the uniqueness of the service - the speed, the connectivity, the convenience, the club-like feel of being a airline industry pioneer. All the things the legacy carriers can’t buy.

What would oil at $200 mean for Dubai?

The cost of a barrel of oil is currently topping $130. There is now no shortage of experts who says $200 is on the horizon, claiming new supplies can’t (and won’t) ever match runaway demand. If it’s not $200, then most experts will agree that the era of cheap oil is over. It is an easy line to trip out, but what will it mean?

The impact could be huge, but here are a couple of points. Your thoughts are welcome.

Firstly, the world may just get a little more local as transport costs head north. It will be more expensive to ship people, food and goods; greater expense is usually a deterrent.

If travel costs double, discretionary travel is sure to take a hit. Holidaymakers may chose to holiday closer to home, or off set long haul flights by going to places that offer a cheap cost of living. Those budget airline, weekend city breaks may become a rarity. Worryingly, Emirates has a lot of A380 superjumbos to fill.

The city will need to be more compact, with better public transport links. There will be a clash as demand for city center (or Zone A) office and residential space butts up against the need for less wealthy workers to live near to work. By car, the 80km commute will be expensive.

Ideally, internet connectivity will step into the breach, hooking up businesses around the world. If face to face time is at a premium, business will need to find ways of doing things online. This is not just a question of connection speeds, but of changing the way business uses technology.

Humans are usually pretty good at dealing with sudden changes. Their adaptability is a key. It will be the same for business.

Radio advertising: cheap doesn’t mean value for money

Radio advertising in the UAE offers the best value for money compared to other parts of the world, says the Arabian Radio Network. Well, they would, wouldn’t they? Emirates Business, owned by the Arab Media Group, says a radio spot on ARN, also owned by Arab Media Group, is as low as Dh275 to Dh500.

Unfortunately there is a difference between cheap and value for money. As radio in the UAE has no way of knowing how people are listening, Dh275 for one spot could be expensive. If there is only one listener it would be better value for money for the advertiser to drive round to his house, knock on his door and explain the product face to face.

There is no doubt radio is great media. It can create immediate, engaging content on a daily basis. It can involve the listener, and the spoken word encourages listener imagination in a way that billboards or magazine ads can’t match. But without solid listenership figures, running a radio station in the UAE is a hobby, not a business. Advertisers will pay what they can get away with. If radio stations really believed in the value of their listener, they’d price their ads higher than Dh275.

Good business shouldn’t tolerate missed deadlines

It is telling that the ‘revelation’ only one in five construction projects is likely to finish on time does not come as a shock. Shortages of materials and skilled workers (plus reams of red tape) are the official excuse, but the public has long since abandoned belief in deadlines being met.

As we’ve mentioned here before, as long as property prices continue to rise, investors are not too fazed by these delays. An investment that has doubled in value tends to soften the blow. But what damage does this do to Dubai’s reputation as a can-do business center?

There is a danger that missed deadlines breeds an acceptance of tardy work. Who cares if you’re going to deliver late, everyone’s still making money, right? This applies to pizza deliveries to magazine publishing dates to nail appointments to real estate handovers. In boom times, even bad business can make money.

Dubai’s reputation, in part, has been built on being the best place to do business for a thousand miles in any direction. Delivering on time is a big part of that boast. It would be great to think those that deliver on time are remembered when the boom times flatten out.

Low-cost needs innovation, not bullying

Qatar Airways is hinting it may launch a low-cost carrier. The airline says it may need to respond to threats to its revenues from existing low-cost rivals; it could be operation in three months. Emirates has committed to its own low-cost airline within the year.
Lower fares and more competition should be a good thing, but not if these low-cost excursions are only used to squash private competition. Air Arabia and Jazeera Airways, the specialists, have got off to solid starts and have big plans for the future. Emirates and Qatar Airways, with orders for a huge numbers of planes and ritzy new terminals being built, have enough clout to run a spoiler operation.
It is to be hoped that the big boys bring something new to the market. Low-cost is now a mature sector, it could benefit from category innovation. Emirates converting some of its A380s to carry 1,000 passengers might be a new trick; as might once a week long haul specials. Dubai to Sydney for Dh1,000, say.

Interfering RTA plans background checks for carpooling

The hyper-active RTA has another bee in its bonnet. Motorists must now register for a special license to carpool, with the RTA doing background checks on drivers and passengers. The aim, apparently, is to crack down on unlicensed taxis, but it smacks of the RTA exerting another level of control.

It is another case of the sledge hammer being used to crack a nut. Carpooling is already a harmless reality, one that should be encouraged rather than stigmatized. Does the RTA seriously expect thousands of commuters to go and register - and wait on another layer of bureaucracy?

A straw poll in this office suggests at least one in four have shared a lift with colleagues, around 10 per cent do so every day. Payment is often nothing more than a morning coffee.

Dubai’s traffic is already enough of a headache, RTA meddling is no pain relief.

H&M to open Saudi stores staffed by women, for women

H&M, the Swedish retailer, is to open the first women-only department store in Saudi Arabia as part of moves to bring more women into the country’s workforce. The Times, picking the story up from the World Economic Forum in Sharm el Sheikh, says the store, which will be H&M’s first in the country, will be staffed entirely by women in what is understood to be a landmark concession by the Saudi Government.

Hats off to H&M. The store will be run the Alshaya Group, the Kuwait-based franchise holder for the region. Mohammed Alshaya, the CEO, says running the store will be challenging, but “we have to do it as this is part of our social responsibility to women in Saudi Arabia.”

With Saudi struggling to find work for its youthful (and increasingly disgruntled) population, it is the right time for business to suggest solutions. This is not charity by H&M – women-only stores will surely drive sales – but it does have a social benefit. More employment creates more wealth, and raises worker expectation. Hopefully it will be a model other retailers can mimic.

Abu Dhabi prays the music won’t stop

Abu Dhabi’s Department of Planning and Economy uses Abu Dhabi Media Company’s National newspaper to warn that the capital’s housing market in is danger of a mighty crash.
Things must be serious.

After four days of frenzied buying at Cityscape – with as-yet-unbuilt one-bed apartments selling for Dh2m - it says speculators are in danger of driving up house prices so quickly they risk causing a sharp fall in the market. It is safe to assume the vast majority of Cityscape sales will be flipped well before the projects are ever completed, and that many secondary buyers will also look to sell.

Given that each seller will want to take a profit, and that buyers will have to stump up agency fees, it is not unreasonable to imagine a Dh2m apartment selling for Dh2.2m in a year’s time. That is $600,000 for a one-bed apartment. Not built. Surrounded by building sites. And still two years away from completion. You can buy freshly renovated two-bed apartment, with roof terrace, near Central Park, in New York for less.

Granted, it is not always sensible to compare house prices city by city, country by country. But it is glaringly obvious that some UAE prices are too high. The speculators (and this includes the developers) should enjoy their profits while they can. When the music stops, and someone has to move into a completed apartment – and either pay the mortgage or the rent – it will be a lot clearer whether Abu Dhabi residents can support Manhattan prices.

Tampering with Universities threatens to blunt talent

The UAE government is to build a database of upcoming graduates. It wants to get a handle on how many students are coming through the education system, and what subjects they’re specializing in. Quite rightly, it wants to avoid a jobs market awash with Engineers and Business graduates when employers want creative types and scientists.

What is worrying is how the government then wants to manipulate the system. If there are shortfalls in one subject, it ‘could order universities and colleges to ensure more students graduate in subjects that are more useful’, says The National. It may deny licenses to universities that don’t offer a broad enough range of subjects, penalizing talented specialists.

Market data is good, market interference is not good. If profit-making universities can see there is a demand for a certain qualification, there is greater incentive for them to create a relevant course. Equally, if international companies can see the UAE is producing a surplus of talented engineers, there is an incentive to relocate or set up a local operation.

Manipulating the figures threatens to lower the quality of stock. Instructing universities to produce more media graduates will not work: universities will either redirect resources away from where they’re needed most, or churn out graduates as cheaply as possible to hit their targets. The UAE should be more concerned about producing quality. The jobs market is open; if employers see there is a pool of great talent they will build industries around it.

Does Abu Dhabi really want to sell houses?

The car park was full within 30 minutes of opening, the queues of pre-registered visitors collecting tickets were 200 deep, and Aldar stopped handing out lottery numbers to buyers by 11am. If the second Cityscape Abu Dhabi is to be judged on public response alone, yesterday's opening morning was a solid gold hit.

IIR, the event organizer, expects 25,000 people through the doors over the three days, up from 15,000 last year. Most of those appeared to be forming a scrum at the Aldar stand.

For those that missed the boat in Dubai, Abu Dhabi is seen as a second chance to make a fortune from real estate. Certainly there is no shortage of world class projects - Abu Dhabi has the money to employ the best planners, architects, model builders, stand builders and brochure designers. It seemed the cream of the UAE's modeling industry had been hired take business cards and hand out flyers.

But does Abu Dhabi really want this, or is it just going through the motions? If it was that desperate to impress wouldn't they have finished off the exhibition center's potholed and chaotic car park? Wouldn't the police have been on hand to help direct traffic, instead of two hard-pressed Indians? Wouldn't there have been clear signs welcoming visitors and asking for patience as they worked through the opening day crush?

As one agent commented: "Why do they need to sell houses? They're sat on 100 years of oil, they don't need the money. They're just scared of looking like a dusty little village next to Dubai."

DP World thinks big, goes deep

There are deals to help the bottom line, and there are deals to enhance your status. Occasionally a deal will tick both boxes. DP World's $3bn London Gateway project is one.

Described as the UK's largest port project in 25 years, London Gateway will provide much needed deep-water access to large container vessels. The National says the port and logistics area could take 2,000 lorries off England's roads while creating 12,000 jobs. It is DP World's biggest single investment outside of the UAE.

The company says it is becoming harder to make big margins in mature markets, but that London Gateway is worth the trouble. It tells the world that DP World has the ambition to think big, and, crucially, can deliver big projects. Like Emirates' order for the A380 or Jumeirah opening in London and New York, it tells the industry that Dubai is serious.

The UK public has been less than impressed with the budget-busting Wembley, Dome and cross-London channel tunnel link. Delivering London Gateway on time and on budget will earn major plaudits, for DP World and Dubai. All Dubai business should wish it well.

Talk, like a devalued currency, is cheap.

Pity the poor Gulf finance minister. Pressed weekly, if not daily, on when his country's currency will depeg from, or revalue against, the dropping dollar, he ceaselessly answers that the peg is here to stay. His comments are recorded, but no one believes him.

Any armchair economist can see importing the monetary policy of the recession-threatened US into the booming Gulf is a recipe for inflation. But what can our hassled finance minister do? If he said otherwise - that his country was seriously considering dripping the peg - the markets would go crazy and speculators would bet against the current rate.

Whatever he says, the market hears only what it wants to hear.

Youssef Hussein Kamal, the Qatari finance minister is the latest to trot out the 'peg stays' line. He says it is needed if the Gulf states are to hit a 2010 deadline for currency union. "There is no revaluation ... it is as it is," he said this week.

He might like to think it is as it is, but it isn't. Speculation - like inflation - cannot be solved with statements. It needs action.

Economists eye up the ladies

When times are hard, women shoppers will forgo a big-ticket purchase - $500 slingbacks, say - and opt for small indulgence. Such is the theory put forward in the New York Times, quoting Estée Lauder chairman Leonard Lauder, who noticed a sharp rise in his company's lipstick sales in the months following September 11.

US pundits are now trying to track lipstick sales to see if there are any pointers on consumer confidence. Short skirts are also taken as evidence the economy is doing well; the longer the skirt, the worse the market.

Well it beats looking at investment flows, exchange rates and the price of imported rice.

Abu Dhabi sets sights on worldly reputation

Abu Dhabi wants to create a world class image for itself. A five-year plan unveiled by the Abu Dhabi Municipality includes a smoking ban, clean beaches and better “urban landscaping”. The Municipality also hopes to become more “customer orientated”, with the introduction of “one-stop shops” for municipal services.

Targets are good, as is the willingness to bring sense and structure to a city growing at such a pace. Great cities tend to have a check-list of major attributes – good public transport, low crime, leisure, culture, education, low density living, environment. Abu Dhabi, with the Masdar eco city, art galleries and a new tram system planned, is trying to tick as many boxes as possible.

But great cities also have a vibe, a feeling of tolerance, a sense of community. The Economist Intelligence Unit has once again judged Vancouver as the World’s Most Liveable City (Melbourne was second), and not one Middle East city made the top 10. The judging criteria are a reminder that it is people, not just infrastructure, which makes cities great.

Timeshare: nice idea, tough sell

Timeshare looks to be on its way to the Dubai real estate market. Buyers will be able to take fractional ownership of villas or apartments; in theory this opens up ownership to investors with smaller deposits, or holidaymakers looking to make regular visits to Dubai. Diversifying the real estate market is no bad thing, it brings new money into the market and keeps things spinning along. The market could be worth $1bn by 2010

If there is a hitch it is that, in many markets, timeshare has become a byword for ‘scam’. At the very least timeshare has struggled to prove the best financial investment. It can be a sound long-term, lifestyle investment, but rarely provides investors with stellar returns.

For Dubai real estate, that really would be something original.

The sky is not the limit

Ajman wants to build an airport. And why not? Every other emirate has one, some even have two.

If we are to believe the expansion plans, the UAE’s west coast airports will be handling 230 million passengers a year by 2015. This equates to a packed, 500-capacity A380 superjumbo arriving at one of the six airports every minute, of every hour, of every day.

The figures must be nonsense. London Heathrow, currently the world’s busiest international airport, sees 67m passengers a year. Gatwick, also serving London, sees 37m. The UAE could add Paris (60m) and Frankfurt (54m), and still fall short. This year the UAE six might process 40m passengers.

Or is it nonsense? Emirates has consistently hit its targets and has the biggest order of A380s of any airline. Sharjah is making a sensible pitch for low-cost traffic (a growth sector), Ajman and RAK have modest aims. Abu Dhabi has the money to bully its way into the equation.

As with many things in the go-ahead UAE the figures are outlandish, but just this side of believable. Man made island home to 500,000 people? Sure. Patch of desert home to six world class theme parks? No problem. A 150-storey tower? Make it 170 floors.

The danger is that projects can’t be taken seriously unless they aim for fantastical targets. And, for now, the press and public swallow it. It’s not that some mega-projects can’t work, but it isn’t a given that every one of them will. Greater scrutiny from the off might avoid a bumpy landing.

Cigarette City goes up in smoke

First a ban on smoking in public places, next a hike on the cost of a packet of cigarettes: the UAE is in danger of losing its reputation as a smoker’s paradise.

Just a year ago the idea that smokers would be restricted on where they sparked up, or that they would have to pay more than giveaway prices would have been unthinkable. Now that double whammy is on the cards. A new federal anti-smoking law is expected to be passed at the end of the month, with a public smoking ban in place across the emirates by June.

The National says the average price for a packet of 20 cigarettes is Dh6 (US$1.60). In the UK, it is the equivalent of about Dh42 and in the US, less than Dh20. No word on the UAE price hike; it will be interesting to see how tough the government wants to be. Taking a pack of smokes to Dh20 would only make them cheap, rather than ridiculously cheap. Dh50 would really send a message. But would this add to UAE inflation?

Smoking is accepted to be a ‘bad thing’, but, a hard habit to break, price rises can be seen as less of a deterrent and more of a straight tax on addicts. It will be interesting to hear what the government plans to do with this extra revenue.

'Good' Gulf money flies to the rescue

While regulators threaten to tighten the criteria for sovereign wealth funds investing in European assets, pissing off Gulf funds in the process, private business is doing what it does best: privately going about its business. Business-class airline Silverjet has found a Middle East investor to inject a live-saving $25 million into the loss-making carrier. When creditors come calling, needs must.

European politicians are concerned about Gulf funds’ motives. European businessmen don’t seem to mind, particularly if the money helps an innovative new business through a tricky stage of its development. In a tough airline market, Silverjet, the last-remaining business-only airline following the recent collapses of Eos and Maxjet, flies from London to just two destinations: New York and Dubai. The new money should help it open new routes into India, South Africa and the US, and better its chances of survival.

Time will tell whether Silverjet’s business model works, but it would surely be doomed to failure without the injection of this Gulf money. As European economies slow, and their new business ventures find it harder to secure credit, Gulf funds, willing to back innovation, might come to be seen more favorably.

Dubai arrives at its cultural crossroads

Dubai airport is now the world’s 6th busiest. According to government data, the total population of the emirate in 2007 was more than 1.5 million, and it is expected to grow at a rate of around 7 percent. Out of these, only around 17 percent are Emiratis.

As so many expats settle in the city, and number of business and tourist arrivals continues to rise, is Dubai now trying to assert its cultural status? Internet provider Du recently banned sites which were deemed as “inconsistent with the moral, cultural and social values of the UAE”; Mall of the Emirates now has posters advising shoppers not to “show excessive amounts of flesh” and “should refrain from public displays of affection, like kissing.” Burjuman and Reef Malls plan to follow suit.

Why this sudden tightening? The government must be convinced these new rules won’t put off migrants and tourists (no porn online, and no bikinis in the mall is not such a bad thing), but it does suggest Dubai wants to draw a line on what is acceptable, and what isn’t. It also coincides with louder calls for more jobs for locals. The current rate of unemployment for the UAE nationals is 13 percent.

As the UAE celebrates National Identity Year, the concern is where does this assertion end?

The real estate boom requires a huge number of new arrivals to fill apartments and villas. In 2007, around 2,200 structures were built in Dubai at a cost of $4,000 million, out of which around 1,500 were residential. Besides occupants, these buildings also require builders. It is to be assumed neither the occupants nor the builders will be Emirati. And with bigger and costlier projects being signed almost everyday, it doesn’t seem like real estate is going anywhere but up.

Dubai now seems to be sending out mixed signals. On the one hand, it promises to be the dazzling, global cosmopolitan haven, and on the other, a morally and culturally strong Muslim state. It requires a fine balance.

Is there an incentive not to pollute?

Buoyed by demand for building materials, a rock quarry ramps up production. As a result, it starts belching huge clouds of dust into the atmosphere. The local population breathes it in, and rates of asthma and other respiratory problems rise sharply.

Fifteen years on, and the UAE Government says it will now consider fines for companies that risked damaging the health of people living near the mines. Hamad al Matroushi, an environmental impact assessment specialist at the Federal Environmental Agency (FEA), says nearly 10,000 people in the Northern Emirates, whose health was affected by years of breathing in dust from mining activities, should be compensated by local governments.

Did no one think 15 years ago that polluting the atmosphere was a ‘bad thing’, and that it might be harmful to the health of residents?

Hats off to the authorities for finally starting to act, though, as ever, rules are one thing, implementation is another. The question is, will this herald a wider push on air quality in the cities? Will it focus attention on construction and traffic pollution in Dubai?

Or, to put it another way, is there an incentive for business not to pollute?

Can the FT and IHT make money?

The UAE has a large, growing and increasingly wealthy international community. People move to the UAE to do business. UAE business is increasingly active in international business. It is cheap to print newspapers and media buyers aren’t too bothered with audits.

These appear to be the reasons behind the forthcoming launch of UAE versions of the International Herald Tribune and the Financial Times. The two papers will follow The Times, UK, in printing local editions; other international newspaper brands are understood to be watching the market. Unlike The Times, the FT and IHT promise some local content.

Can they make money? There is no doubt both are quality products, and that they appeal to a targeted demographic. But can they get copies into the right hands on a regular basis? Dropping free copies in office blocks gets you close, but it cuts off one revenue stream (The Times charges Dh7 per copy) and ‘free’ can often make readers think ‘cheap’.

Advertisers might be won over. Again, both are quality brands, and media buyers are happy to accept a publisher’s word on how many copies are read. Both brands would provide a halo effect for a local publisher’s other titles, so might not be subjected to the same profit demand.

But the biggest beneficiary has to be the reader. If the FT is doing local business stories, in theory it should encourage Emirates Business to improve its content. Likewise, local content in the IHT should inspire The National and Gulf News. The Times sent a team of business journalists to Dubai last year and managed to scoop the local competition on a number of stories. The reader doesn’t care about the financials, just give them the story.

Saudi blogger free at last; what next?

A man is taken from his home in the dead of the night. He is held in solitary confinement and subjected to days and nights of interrogation. After 137 days, just as suddenly as he was brought in, he is released, with no word of explanation from his captors.

Add in acres of international media coverage and a vocal, well organized online campaign from local supporters, and you have the making of a great story - Midnight Express meets Erin Brockovich by way of In The Name of the Father. But that won’t happen.

For now, Fouad Al-Fahan, the Saudi blogger snatched by police in later December, and now released without charge on Saturday morning, will be relishing being home with his wife and two young children. You can bet there is a queue of media operators wanting to hear his story; Fouad’s supporters will be hoping he can tell the story himself when the time is right.

But there is a sense the story is not finished. Will Fouad be able to tell the whole truth? Have the authorities come to some kind of deal, where Fouad tones down his blog in exchange for his freedom? Is there a bolder Saudi blogger ready to take the freedom of expression campaign forward?

They might start with getting to the bottom of Fouad’s case.

Any idea how to tackle inflation?

The UAE Minister of the Economy says it would take a miracle to meet the Government’s official target of five per cent for inflation this year. Inflation hit a 19-year peak of 9.3 per cent in 2006 and probably accelerated to 10.9 per cent last year, says the National Bank of Abu Dhabi. Anyone who has bought food or rented a flat in the past year should be able to figure out things have got more expensive.

Like King Canute ordering back the tide, the government is coming to the realization that ordering shops not to raise prices – and giving government workers double-digit pay increases – does not make inflation go away. Saudi Arabia this week admitted inflation will run to double digits in 2008.

Through all of this, Gulf governments, with the exception of Kuwait, have ruled out dropping the dollar peg (matching US monetary policy) or revaluing their currencies. It might not be the cure, but it is hard to see how it would make things worse.

In the meantime, the search is on for a miracle.

Talented Emiratis do not need special treatment

New legislation is needed to ensure UAE nationals are better represented in the country’s workforce, says Emirates Business. It says expats currently staff 99 per cent of jobs in the private sector and 91 per cent of government jobs, and, despite the economy going gangbusters, somehow this is a Bad Thing.

Jassim Ahmed Al Ali of Dubai Municipality predicts that by 2009, UAE nationals will account for less than eight per cent of the workforce, and less than four per cent by 2020. The situation is not helped by 10 per cent of employed nationals resigning each year claiming “problems in the workplace”.

What problems? And does it matter if workers resign? Plenty of non-Emiratis change jobs after a year.

Kipp finds it hard to fathom what is stopping Emiratis joining the workforce. Low pay? Tough. Who doesn’t think they should be paid more? Lack of career progression? Get over it. Knuckle down, impress the boss and see what happens.

The drip, drip, drip of stories bemoaning the lack of Emiratis in the workplace is not helpful. The more business hears that Emiratis should be made special cases, the more it sounds as if they are unemployable. All that should matter is that new recruits are an asset to the company. If an Emirati job applicant ticks all the boxes, why wouldn’t an employer go with them?

Kipp is positive there are skilled, motivated Emiratis who would be an asset to any business. Giving them special treatment threatens to turn them into charity cases.

ADNOC’s self-service gimmick running on empty

ADNOC is now running self-service pumps at 15 petrol stations in Abu Dhabi. The petrol isn’t any cheaper, but users are given extra points on their ADNOC loyalty card to spend in store or, a nice touch, donate to the Red Crescent charity. The company says self-service reduces the cost of petrol, which presumably means they’ll be laying off pump attendants.

The idea has its merits – charitable giving, individual application, cutting waste – but there are real concerns over the application. Can anyone else picture the scene when a blacked-out Landcruiser pulls up at a self-service pump and leans on the horn until some pump attendant comes over? Or the queues that will form as novices struggle to figure out how to get the petrol cap off?

It smacks of gimmick, not a genuine attempt to get average drivers filling up their own tanks. If ADNOC was serious in wanting to reduce the cost of petrol it would go for a major price (and service) differential between the two options. Drop the price of self-service by, say, 5 per cent, and up the price of the ‘luxury’ service, complete with superior screen wash, by 10 per cent. An economy class/business class option for car drivers.

Few smiles at BA’s cheap tricks

On what products are you price sensitive? For the most part Kipp would have its head turned by a cheaper price on almost any product, with the exception of surgical procedures and wine. What about the cost of an airline ticket?

The journey takes the same amount of time; no matter which airline you choose, economy class food is much of a muchness, as is legroom and inflight entertainment. If the flights leave around the same time, surely this is a straight price fight?

Possibly not. British Airways has a three-day Sale on flights from the UAE to the UK and US. It promises return fares to London for 1,000 dirhams, around one third of the price of Emirates. After the chaotic opening of Terminal 5 at Heathrow, lost baggage and a series of strikes, the airline has to work hard to have travelers see it in a favorable light. Cheap flights can tempt travelers to stick with/return to BA, or win new custom.

Unfortunately, this offer is not the answer.

On closer examination, the desired flights, with taxes, come to more than 3,500 dirhams, still cheaper than Emirates, but no bargain. With no confidence the mistakes that led to the Terminal 5 chaos won’t be repeated, or that strike action will be avoided, the price will need to a whole lot lower to make BA a good bet.

It doesn’t help the brand’s damaged reputation when visitors go looking for a 1,000 dirham fare, only to find a 3,5000 dirham one. It is another let down. Why not be clear and say all prices are, say, 1,800 dirhams? As it is, this offer looks cheap, and not in a good way.

UAE finally blanket-bans dodgy sites

It’s hard to know what to make of Du’s announcement it is to block all non-suitable-for-the-UAE websites. The decision brings Du into line with TRA guidelines and stops a two-tier system of internet access - unfettered in the work freezones and new freehold residential areas, heavily censored for the rest – but it certainly stains Dubai’s live-and-let-live attitude to expat living.

For media companies based in Dubai Media City, previously home to open access, there will be concerns over press freedom. For residents owning homes in communities with barely a UAE national in sight, they will question why Du now needs to be concerned with what they browse online in the privacy of their own home.

Alcohol is freely available to buy once a license has been obtained, residents can use their Du mobile to call a bookmakers in the UK to place a bet, singles in Dubai’s bars and clubs are free to ask someone out on a date. Blocking websites is symbolic, it is an annoyance, but it may not be much use in upholding values.

Information seekers hope for National success

In almost every market in the world, the market for traditional newspapers is on a downward trend. Despite publishers’ best efforts - free CDs, discounts on hotel stays and lottery tickets - for most newspapers each year is tougher than the last. The internet and 24-hour TV news and sport has nibbled away at print’s relevance.
As with many things, in the UAE, the market is different. Since 2003, in English language alone, Dubai has launched a free Metro, an evening paper, a new national, a local print run of the UK’s Times, and a weekly city paper. Of course, the evening paper has since gone bust, the Metro is on its arse, and the new national has been relaunched as a business daily, but none of this has diminished publishers’ appetite for print. There would be more papers if publishers could get hold of a license.
And now The National, billed as a “quality broadsheet”, and the first fruits of Abu Dhabi Media. It will have nearly 200 journalists, a couple of years to break even and a launch budget to float a battleship.
The paper has been met with almost universal criticism from the Dubai media community. Irrelevant, toothless and a ‘twelve month pension gift for has-been and never-was hacks’ being pretty much the gist of the comments.
19th Floor is more optimistic. The National should be welcomed for what it is, not what it isn’t.
New competition can lift the entire market. Gulf News has already beefed up its local news (its ‘The Nation’ section) in response. But only an idiot would accept Gulf News as the acme of UAE newspaper ambition. Someone must be able to do better. More journalists asking questions, and more options for getting this information to an audience is a good thing. If The National does print the story, maybe the journalists own blogs or book deals will.

Reality bites for flights of fancy

Virgin Atlantic is considering axing its mile-high beauty treats. Sir Richard Branson's agenda-setting airline has convened a meeting of its 280 beauty therapists after research showed Upper Class passengers were becoming ambivalent about the perk, reports The Times. Most preferred sleep to a fully-clothed back rub. The news comes as Oasis, the Hong Kong budget airline, goes into liquidation after just 18 m months of service. The carrier had gone to market with an eye-popping fare of $128 one-way Hong Kong to London. It is now $128m in debt. The end of innovation in the airline industry? Not likely, but it does remind business that bottom lines, not just headlines, matter. Virgin is likely to expand the spa and beauty treatments at its popular Upper Class lounge; budget carriers will examine the Oasis fall out and figure out a new way to undercut the legacy carriers. Consumers still like to be pampered, and everyone likes a bargain.

Sports marketing yet to break sweat

It is an enviable life. You earn your living playing sport, and your fans pay for the retirement. On a recent trip to Dubai by a middling British sports team, fawning well wishers were falling over themselves to offer freebies. The star of the team was offered a free apartment in return for his face on some marketing material, the rest of the team were bought free drinks, free rounds of golf, free hotel accommodation – as long they had their pictures taken with a gurning company rep.
The freebies come so thick and fast, many stars begrudge putting their hand in their own pocket.
Such is ‘sports marketing’, the not so difficult art of aligning a staid brand with a successful, sporty one. First Group, a property developer, is the latest to sign a sportsman to front one its Dubai projects (Sam Torrance, a past-his-prime golfer, and a tower in Dubai Sports City, since you ask). Michael Schumacher and Michael Owen have similar deals.
Good luck to them. But you have to ask what do any of these stars know about the Dubai property market? What reassurance do they bring to buyers? What point of difference do these retired multimillionaires bring to the project?

Hush money, phantom buyers and feeding the Vegas mentality

The furious response to the cancellation of Damac's Palm Springs project has created a level of investor mistrust that threatens to rock the entire Dubai real estate market, tainting good and bad. One result is that former real estate sales staff are more willing to recount examples of bad practice. The methods listed below are described by one former sales manager as being "common knowledge in the market". Cart before the horse. In a booming market there isn't always time to wait for government approval for the necessary water and electricity supplies to reach a development. Some new projects would require the building of at least one new desalination plant and one new nuclear (or equivalent) power station to supply water and electricity needs to all residents. Don't let that stop you: sell the plots off-plan, the government will take its cut, and if the project goes well it can start thinking about building the power infrastructure. After all, no point commissioning a new nuclear power plant if no one is living there. Hush money. A nine-storey tower in International City, the first for the developer, included a one-bedroom apartment with three toilets, and a two-bedroom apartment with no living room. The solution? Offer the investors a cash lump sum to keep quiet and not talk to the press. Why would they settle for that? The investors are happy as long as the apartment is rented.

Phantom buyers 1. If sales of Phase 1 are sluggish, or you want to create a buzz around a new development (particularly if project is in an undeveloped area), tell potential buyers the entire plot has been sold to 'a Saudi investor'. Off course, there is no such investor. Tell them they can buy Phase 1 off the secondary market, and that Phases 2 and 3 are now ready for release. With Phase 1 apparently sold, buyers should have more confidence the project is viable. Phantom buyers 2. You've hyped the sell-out of Phase 1, and buyers are sniffing around Phases 2 and 3. You announce the release date at short notice, open the sales office early, with a number of 'buyers' (in reality, some of your own admin staff) bulking up the queue. Your buyers start clamoring to be allowed to put down deposits - the louder and more feverish the better - your sales staff need to look suitably harassed. The real buyers, caught up in the fever, spend less time looking at plots, floor plans and contracts. Sand isn't just sand. So construction is 'running behind schedule' (read: hasn't started yet), and your buyer is getting twitchy. If they're an investor, wanting to either rent of resell the property) have your sales people call them saying the land price has risen and, even though the building hasn't come out of the ground, the price has gone up 10 per cent. The investor is placated - his patch of sand is already appreciating - and the property fever continues. Feed the Vegas mentality. So your last project tanked. You sold every apartment without waiting for the proper approval and now, after waiting to the very last minute, you've refunded the deposits to every pissed-off buyer (though not before spending the interest on your new campaigns and showrooms). Your reputation should be in ruins, right? Wrong. This is Vegas. "Ninety per cent of new buyers wouldn't even ask about the company," says one former sales manager I spoke to. "When you're in Vegas and you lose $1,000, do you not go to the casino the next night? This is Dubai. You can make your fortune from real estate." Got your own anecdotes?