19thfloordubai

Misreading the signs as UK raises terror alert level in UAE

2008-06-18T10:58:00.000+04:00

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

2008-06-16T12:18:00.001+04:00

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

2008-06-16T10:56:00.001+04:00

‘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?

2008-06-15T11:24:00.002+04:00

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

2008-06-12T12:07:00.001+04:00

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.

2008-06-11T10:46:00.001+04:00

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

2008-06-10T11:32:00.000+04:00

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

2008-06-08T11:00:00.002+04:00

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.

2008-06-05T12:46:00.000+04:00

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.

2008-06-04T11:11:00.000+04:00

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

2008-06-03T10:27:00.002+04:00

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

2008-06-02T13:00:00.000+04:00

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

2008-06-01T11:08:00.000+04:00

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

2008-05-29T11:48:00.001+04:00

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

2008-05-28T10:34:00.002+04:00

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?

2008-05-27T11:50:00.000+04:00

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

2008-05-26T11:13:00.003+04:00

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

2008-05-25T11:25:00.000+04:00

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

2008-05-21T11:10:00.000+04:00

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

2008-05-20T12:01:00.002+04:00

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

2008-05-19T11:28:00.002+04:00

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

2008-05-18T11:04:00.000+04:00

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

2008-05-15T10:52:00.000+04:00

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?

2008-05-14T09:29:00.001+04:00

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

2008-05-14T09:28:00.003+04:00

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.

2008-05-14T09:28:00.001+04:00

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

2008-05-14T09:27:00.001+04:00

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

2008-05-07T12:19:00.000+04:00

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

2008-05-06T11:02:00.001+04:00

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

2008-05-05T12:23:00.002+04:00

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

2008-05-04T12:13:00.000+04:00

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

2008-05-01T10:34:00.001+04:00

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

2008-04-30T12:17:00.002+04:00

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?

2008-04-29T11:10:00.004+04:00

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?

2008-04-28T10:58:00.000+04:00

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?

2008-04-27T11:26:00.000+04:00

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?

2008-04-24T14:18:00.001+04:00

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

2008-04-23T13:51:00.000+04:00

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

2008-04-16T12:06:00.000+04:00

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

2008-04-15T13:05:00.000+04:00

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

2008-04-14T11:59:00.000+04:00

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

2008-04-13T09:56:00.002+04:00

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

2008-04-10T10:48:00.001+04:00

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

2008-04-08T10:11:00.000+04:00

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

2008-04-07T11:02:00.000+04:00

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?

Super idea, difficult reality

2008-04-06T13:38:00.000+04:00

Dubai government’s track record of creating and backing new standards in established markets (think airlines, hotels and golf courses) demands new projects have the right to be noticed. Aswaaq, the supermarket-meets-community-center concept, is particularly interesting. It promises to beat Union Co-Op (seen as Dubai’s cheapest) on price, yet carry a first rate range of world class products. Its stores will feature wide aisles and non-basic shopfits – when traditional supermarkets are working hard to maximize every square foot of selling space.
Its goals are admirable – local employment, social responsibility, house and encourage new small businesses – but at a time when food prices are going through the roof, and the existing supermarket retailers upgrading to international standards, it will have to work hard to counter claims it will be a government-subsidized side show. It wants to open stores in new communities; it is hoped private sector rivals will be given fair access to the bidding process.
(And can the copywriter on the Aswaaq website go easy on the exclamation marks. Kipp counted 16, and the first store is yet to open.)

Could Gulf funds rescue Alitalia?

2008-04-03T10:49:00.000+04:00

It must be assumed the mess at Alitalia stinks so bad Gulf investment funds have gagged at the prospect of taking it on. The Italian airline, estimated to be losing $1.5m a day, is desperate for new money, and, after Air France-KLM pulled out of talks this week, there aren’t many alternatives.
Gulf investment funds are being courted worldwide, and by a range of industry sectors. Strange, then, that with Etihad, Emirates and Qatar Airways so buoyant, Abu Dhabi, Dubai or Qatar don’t want to get to grips with sorting out Alitalia. Sure, the airline has problems, but on the plus side it has brand recognition, decent slots in major European airports and, naturally, great slots at home. All things Gulf carriers covet.
The difference is Alitalia has a unionized workforce. Air France-KLM walked after proposals to cut 2,100 jobs and get to work on trimming costs were rejected by the unions. Italian politicians have even stepped in to say they would veto job cuts.
There is nothing wrong with Gulf funds steering clear of this mess, but it would be interesting to see how they would handle such a tricky rescue rather than the usual blue chip or cash-for-growth investment.

Are Damac sniffles first sign of real estate cold?

2008-04-02T12:54:00.001+04:00

Damac has got itself into a sticky spot over the axing of its Palm Springs project. There are multiple questions surrounding the decision - not least Damac's timing, it was reportedly happy with the project in February - but many will want to know how this impacts the wider Dubai property market.
The biggest concern is that Damac is not an isolated case, but the first (or most visible) sign that cracks are appearing. Are rising build costs threatening the whole market? Is a tightening of the housing market in the US and UK filtering through to the UAE? How will a dip in investor confidence in off-plan real estate play out?

Flabby media dodges another bullet

2008-03-31T12:49:00.000+04:00

How can a manufacturer of soap powder, shampoo and skin creams be an agent for change in the Middle East's media industry? The answer, of course, is advertising spend. With newspapers, magazines, radio and (most) TV being distributed for free, media owners rely on advertising to generate revenue. Knowing this, the advertisers have the right to expect certain demands to be met.
Chief among these is asking media owners to tell them how many people read/viewed/listened to their magazine/TV/radio station. In developed markets, the cheeky advertisers even ask media owners to prove their figures are correct. This information helps both sides work out how much an ad should cost.
That is not the case in the Middle East. With very few exceptions media owners are allowed to pluck figures from the air; whether the advertiser believes these figures, it has to negotiate a fee it feels comfortable with. The system penalizes good media and keeps bad media in business.

Understandably, such a situation is not popular among advertisers. It wastes their money and makes them complicit in potentially fraudulent transaction. The biggest advertisers in the Middle East have been working for years to change this.
So it will be off great relief to media owners that Jan Zijderveld, chairman of Unilever MENA and champion of the Advertising Business Group, is leaving to take up a new position in Singapore. Zijderveld has been a vocal advocate of change, and has worked hard to bring bring both sides together. But, not for the first time, media owners have played the long game and seen off an ambitious expat with designs on bringing the Middle East up to international standards.
No doubt someone else will pick up Zijderveld's baton, but momentum will be lost. Expect more stalling tactics, and no visible uplift in the quality of media.

Arab business doesn't need driven women...it needs them to drive themselves

2008-03-31T12:48:00.000+04:00

There has been plenty of jaw-jaw on how to get more Arab women into the work place, now there is chance hard cash will be thrown at the issue. The women's advisory panel of the Islamic Development Bank is meeting in Bahrain to discuss ways of spending a $10bn poverty-reduction fund.
How they will spend this windfall is anyone's guess. There are a myriad of problems and the size of the task is daunting.
According to UN data, in 2001, the participation of women in the global economy was estimated at 55.2 per cent, with only 29 per cent of economic activity in the Arab region, one of the lowest in the world. In 2002, the latest figures available, 44 million adult women (aged over 15 years and representing almost half of the female population of the Arab region) could not read or write.

In Saudi Arabia, where 58 per cent of University students are women, only around 9 percent of the women of the working age are available to work. As Arab News reports today, maybe the best to get women contributing to the economy is allowing them to drive. $10bn will buy a lot of Nissan Sunnys.

An oversupply of F1 tracks

2008-03-26T12:44:00.000+04:00

Bernie Ecclestone, boss of Formula 1, must love coming to the Middle East. With Bahrain hosting race 3 of this year’s season and Abu Dhabi lined up for next year, everywhere he goes he must be met with smiles and positive energy. As he’s pressuring Australia and the UK to improve the staging of their F1 races, it must be nice for him to play off the enthusiastic management of new circuits against old customers.
The problem for the Gulf is that it will soon past its freshest. Dubai’s track is already up to F1 standards and Qatar
That will make four F1 tracks within half an hour’s flying time, all of which are 30 minutes drive from an international airport serviced by a buoyant international airline. You would expect canny Ecclestone to then play one off against the other.
If you’ve yet to visit the impressive facility in Bahrain, best to get there before F1 leaves town. has revealed it is upgrading its Losail International Circuit. “Yes, we are planning a massive upgrade of the Losail circuit to make it possible to host Formula One races when the time comes,” Qatar Motor and Motorcycling Federation president Nasser Khaifa al-Attiyah tells Gulf Times.

A crash felt around the world

2008-03-13T08:37:00.000+04:00

Dubai has an unwritten marketing slogan: ‘the best place to live and work for one thousand miles in any direction’. No official will say it, and you won’t read it on any marketing material, but most expats will know the truth of it. Access to capital, entertainment, education, and an entrepreneurial outlook – combined with Dubai’s relatively relaxed live-and-let-live attitude – make it a better bet than, say, Cairo, Riyadh and Amman.
Even the driving is rated better than its neighbors (have you ever been to Cairo, or driven on Riyadh’s potholed highways?). That might not be the case anymore, at least to foreigners looking in.
The 300-car pile-up on the Dubai-Abu Dhabi road has made the news in Europe, Australia and India. TV viewers will have seen pictures more typical of a disaster movie than a car crash. They will be scratching their heads wondering how anyone can drive at 120kmph when visibility is down to 5 meters. With the stopping distance at this speed being around 200 meters, maybe, they’ll think, this is some new kind of Middle East suicide plot.
For all its big plans for big buildings and big planes, it is other big incidents that may shape Dubai’s international reputation.

UAE govt acts to stop locals emigrating

2008-03-12T10:31:00.001+04:00

The UAE is considering a plan to provide citizens of the Gulf state with discounts on 14 food items, gasoline and cooking fuel to help offset inflation, the head of a consumer protection body said. Under the proposal, the ministry of social affairs will provide nationals with cards they can use at 16 co-operative supermarkets in the country to be eligible for the discounts.
A masterstroke. The UAE economy, up 7.4 per cent last year, would no doubt collapse without the hard work and innovation of UAE nationals, who make up around 10 per cent of the country’s working population. Any initiative that keeps talent in the UAE, and discourages locals from emigrating to, say, France or South Africa, should be applauded.

Ugly fight for slice of the beautiful game

2008-03-11T12:30:00.000+04:00

It’s hard to make sense of Dubai International Capital’s lengthy wrestle for control of Liverpool Football Club. The latest reports – and things seem to change on a daily, if not hourly basis – is that Tom Hicks, the club’s co-owner, has terminated all talks with DIC. Last week it looked as though DIC would settle for a 49 per cent share, leaving majority control with Hicks. Hicks was then angered after reading DIC only agreed to 49 per cent as a means to an eventual takeover.
So now you have one co-owner who is happy to sell, another who isn’t – and may struggle to have a working relationship with DIC. For its part, DIC, which thought it had a deal in place to fully acquire the club in February 2007, has now agreed to pay nearly the same amount for half as much. In gambling terms, they seem to have shown their hand.
There seems little sense in Dubai paying over the odds if they can’t have some control over policy. Hicks has nixed the idea of ‘rule by committee’, saying it is unworkable. Hicks must think he can make money out of the club. It’s just hard to see him making any better, and quicker, profit than simply taking Dubai’s cash.
It is a mess.

YouTube as crap media-buster

2008-03-10T08:53:00.001+04:00

Newspapers that write feel-good pap, TV stations that don’t touch domestic stories, radio stations that read the news off the BBC. It would be easy to live a year in the Middle East and barely know what was happening on your doorstep.
Much is made of the lack of press freedom in the region, but maybe it is more to do with the lack of journalistic creativity. Perhaps it’s best to leave news reporting to the amateurs?
Wajiha Huwaidar, a Saudi activist, marked this year's International Women's Day by defying a ban on women driving in the ultra-conservative kingdom and posted a video of her act on YouTube. The video doesn’t show much, just Wajiha pootling around some quiet country roads and talking to camera. It doesn’t need Hollywood production values to get the story across.
Hats off to Wajiha and let’s hope it encourages more amateur story tellers. They could do better than the pros – compare ABC News’ tiresome ‘Dubai’s Dirty Little Secret’ with Paxploitation’s Do Buy! three parter). Or Kipp’s vote for the most original piece of film to come out of Dubai, Go Around Twice if You’re Happy.

Lessons from Watergate for currency speculators

2008-03-06T12:11:00.003+04:00

Will they, won’t they? It seems the world and his wife has an opinion on the dropping dollar and whether Gulf currencies will depeg or devalue. If you don’t like today’s verdict, wait half an hour and there will be anew one along.
Emirates Business today reports that Middle East banks are reducing their exposure to the US dollar ahead of an anticipated US rate cut later this month. “You will see an increase in investments in commodities and long-term bonds,” says R Seetharaman, Chief Executive of Qatar’s Doha Bank.
If you want to know what will happen with the dirham, maybe the best advice is to act like Bernstein and Woodward, the Washington Post reporters who brought down President Nixon: “Follow the money.”

Competing financial markets are good for business

2008-03-05T10:48:00.000+04:00

An open market, with free and fair competition, should produce keener prices, better products and less wastage. That concept seems easy enough to grasp when applied to, say, a fruit market (‘don’t buy those apples, these are fresher and cheaper’), it also works for financial markets.
Changes to new the UAE’s Companies Law, allowing family businesses to go to IPO floating just 30-50 per cent of shares, are expected shortly. The idea is to encourage more family business to market and provide more investment opportunities for the excess cash sloshing around the region. It is fair to say the changes wouldn’t have come about without some form of competition between Abu Dhabi and Dubai. Both markets want the business, both want to push through product innovation to tempt more people in.
As IPO activity in the US and Europe slows down there is a temptation to think the cash-rich Gulf can pootle along at its own pace. Not so. Now is the time to push on. So it is good to hear these changes are imminent, and that Abu Dhabi Securities Market has entered into MoUs with Karachi and Lahore stock exchanges and others to allow cross-listing and share trading, helping foreign companies to raise capital.
Far from competing for business, rival stock markets can increase the size of the total market, says Tom Healy, director-general of ADSM. He says a secondary market or a separate counter for Small and Medium Enterprises (SMEs) or companies with little paid-up capital, where they could raise capital to meet their expansion requirements, is also needed.
“One stock market would be a bad idea, as it would eliminate the competition, which is the essence of every business.”

UAE needs free media, not big media

2008-03-05T10:47:00.000+04:00

‘Creating a pool of media is the only way to survive in the coming years as competition between all types of media tools hots up.” The words of Ahmad Al Hammadi, Executive General Manager of Arab Media Group, speaking at the First Gulf Investment Forum, and quoted in one of his papers, Emirates Business. Hammadi has three newspapers, nine radio stations and sales rights to a couple of TV stations.
There is some old media sense in what he says – a diverse range of media, touching the consumer at different points during the day, providing a versatile platform for advertisers. But it suggests small and innovative media have no place in a modern media environment. This is nonsense.
What the media industry needs, what any industry needs, is free and fair competition. An innovative, outspoken freesheet should be allowed to distribute to homes in Dubai, instead of being banned by government-supported companies. It should be easier for publishers to get the license to print new titles. Talent should be able to move between employers and not face the threat of being banned.
There is nothing wrong with building empires, but it is not healthy for such a youthful market (bear in mind Gulf News just celebrated its 30^th birthday) to already be thinking about domination. Encouraging new media, new forms of information delivery, should be to the fore.

Why should low-cost carriers have all the Sales fun?

2008-03-03T14:47:00.000+04:00

Low-cost carriers have been around for years, and if there’s one sure-fire way for them to drum up a little publicity, to remind travelers they really do offer low-low fares, it’s the ‘all seats for sale from one dollar/pound/euro/dirham’ offer. It works as well in Luton as it does in Kuwait.
Jazeera Airways, fresh from announcing new routes and new planes, is currently on Sale, promising fares from as little as one dirham. Not all fares are one dirham, you understand, and the price doesn’t include taxes and booking charges, and your return flight will cost a lot more than one dirham, but you get the picture: it’s cheap. Though not as cheap as you first think.
Harmless enough. Low-cost airlines are among the best data-crunchers around; they know route load factors, price sensitivity and annual holiday patterns. It is no coincidence the Jazeera Sale falls outside the Ramadan, school and business holidays.
The question is: why don’t more sectors copy this type of sale? When low-cost airlines go on Sale the customer is at least allowed to dream there are bargains to be had; when mall retailers go on Sale it usually says to the customer ‘here’s the stuff we couldn’t sell last week at full price’.
Sales do clear unsold stock, but they can also be a time to reengage with consumers, to remind them what’s good about the business. Would it be such a disaster if coffee, cinema tickets or haircuts were slashed to one dirham for one day?

Labor camps: a tool of segregation

2008-03-02T13:32:00.004+04:00

Giddy excitement in

Qatar

as a new project to house 50,000 workers is announced. Once complete (in 2010), the $1 billion project will include mosques, playgrounds, a fitness centre, cinemas, malls, a motel, a medical centre, a petrol station, used car showrooms, and an auction place. Workers will sleep six to a room and each will have 4.25sqm of living space, says a breathless report in the Gulf Times, which is more than internationally accepted standards.
While better facilities are a step in the right direction, it is worth remembering such camps entrench the view that laborers are a resource that is to be used, controlled and, when finished with, shipped out. A fresh batch can then fill the accommodation.
Such camps, however well equipped, cement the view that laborers are not expats – they have no place in mainstream society, they can’t be expected to live among the community, they can’t rent accommodation on the open market. This camp ensures the two need never mix, and is that really the sign of a healthy and confident society?

Why governments prefer domestic bliss

2008-02-28T10:44:00.001+04:00

A new report PricewaterhouseCoopers says Britain could have had one of the world's biggest sovereign wealth funds had the windfall from its North Sea oil been saved rather than used to cut taxes and boost spending. The news will cause wry smiles among Gulf funds, particularly in light of EU moves to demand greater transparency from sovereign wealth funds.
The report points to Norway, which has used its North Sea revenues to build up a frighteningly profitable sovereign wealth fund worth some $650 billion, and says had the UK saved just half said its windfall it would have a fund bigger than that of Kuwait ($430bn).
Right now, with oil prices flying and sovereign wealth funds making eye-catching deals, the decision to use the monies to reduce taxes looks short sighted. But in a democracy with 50 million tax payers asking for some immediate benefit from the oil jackpot, who can blame successive UK governments for pandering to voters? Free marketers will also say it encourages individuals to invest their tax-break as they see fit.
In 20 years time it may be that Gulf governments will question why they spent so much oil money subsidizing housing, education, healthcare, water, loans, electricity and food for nationals, when they could have been building a bigger investment fund. But they wouldn’t be the first to want a quiet life at home.

Bahrain stubs out F1 posters

2008-02-26T13:37:00.001+04:00

News from

Bahrain

is that all tobacco advertisements relating to Formula One have been pulled thanks to an anti-smoking campaign by health officials. The move is the latest evidence Gulf states are getting serious about tackling what

Bahrain

’s public health assistant under-secretary calls an “epidemic” of smoking.

Hats of to Bahrain for stepping up, and with the F1 race only weeks away. "This is a beginning and will go a long way in our ultimate goal of getting Bahrain to be a smoke-free nation," Dr Mariam Al Jalahma told the Gulf Daily News.

Europe has already banned tobacco sponsorship, but new markets (F1 is in Bahrain, China and Turkey, and will be in the USAE next year) have been less strict. Bahrain is not up to European standards just yet – the ban applies to ads outside the race track. No word on whether advertising will be banned on the weekend of the race.

The one-eyed man is not King

2008-02-25T11:54:00.000+04:00

In amongst all the cranes and cement factories, Qatar is to be commended for giving over space in the bustling West Bay area to non-profit project. The Al Noor Institute for the Blind is building a stunning new facility for the visually impaired.
The interior design of the building sounds first class: textured floors to help students get their bearings, sound effects, stairs with touch markings, high contrast walls to help those with low vision. It is a credit to city in a hurry that it finds space for a non-commercial building in between the new banks, office blocks and designer apartments.
A pity, then, that the building’s exterior sounds so tactless. Someone clearly believed that a building for the visually impaired should be in the shape of an eye – an Eye-Shaped building’, says The Peninsula. Perhaps the new center for spine injuries should be two towers designed to look like legs. Or a burns unit in the shape of a flame. Or maybe the designers thought no one would notice.

Residency cap don't fit

2008-02-24T11:59:00.001+04:00

The proposed six-year residency cap on expatriate workers in the Gulf is unlikely to be introduced, senior officials told a newspaper on Saturday. “A proposal on a six-year residency cap on expatriates already exists. However, a ceiling on all expatriates working in the Gulf is unlikely, as all the Gulf states may not endorse a proposal of this magnitude in the near future,” Times of Oman quotes a sources close to Gulf policymakers.
The proposal looks to be going the same way as monetary union between Gulf states. Someone thinks it might be a good idea, but member states can’t agree on the details, or the deadline.
Worse still, the Times of Oman story suggests not everyone agrees there is a problem to solve. “Cheap foreign labor helps businesses earn better economic returns on their investments,” an Abu Dhabi-based businessman said on condition of anonymity. Beat that argument.
“Let me be frank,” says an Omani businessman. “Many expatriates, we know, are ready to do jobs that many of us, I mean, citizens, are not keen on.” The day a Sri Lankan expat in Dubai employs an Emirati as a maid might be the day the visa issue becomes redundant.

Nakheel’s REIT path

2008-02-21T13:07:00.000+04:00

Nakheel hopes to raise as much as Dh10 billion creating tradable real estate investment trusts. The revenues will be used to fund new projects; the REITs will be listed in Singapore and Dubai.
The plan is to create two REITs: one for infrastructure with an asset value of between Dh5 billion and Dh6 billion; another for homes with a value of between Dh3 billion and Dh4 billion.
REITs are well established means of driving revenue from real estate projects – and Nakheel had been expected to go down this route – but Dubai’s meddling in the rental market must throw up new and troubling questions for investors. With rent caps a central part of Dubai’s inflation-busting policy, will Nakheel’s developments be able to maximize their potential?

Let’s all move to Qatar

2008-02-20T16:15:00.002+04:00

Reports from

Qatar

suggest the government is to ban landlords from raising rents for the next two years. The drastic action is to help combat record inflation rates. A 27.7 per cent surge in rents spurred inflation in the world's largest exporter of liquefied natural gas to 13.74 per cent in December, the second-fastest pace on record.
It is the latest in a series of Gulf government schemes to get a grip on falling purchasing power. If it’s not rent caps, it is price controls on basic foodstuffs or bumper pay rises for public sector workers.

Qatar

says it will study how much to allow rent to rise in two years’ time. How this will affect investors’ enthusiasm to buy in Qatar real estate is unclear. Will a broad base of investors be keen on diving into a market where their potential returns are meddled with by the government?

Gulf funds as Abramovich’s Chelsea

2008-02-19T14:20:00.002+04:00

Another day, another ambitious announcement from a Gulf sovereign wealth fund. Yesterday Qatar Investment Authority said it was to spend $15bn over the next year acquiring assets, today it is the turn of Dubai International Capital. The investment fund, owned by the ruler of Dubai, plans to invest $5 billion in China, India and

Japan

over three years.
"Clearly because of the growth in emerging markets, we believe companies having exposure to emerging markets will grow significantly as well," says the fund's chief operating officer, Anand Krishnan. DIC wants to raise its asset base from $13bn to $30bn by 2012.
With oil prices at record levels, these Gulf funds certainly have the money. The task will be to find the right deals. Announcing how much money you want to spend is not always the best way to secure the best price. In football terms, Chelsea’s takeover by Roman Abramovich, the Russian billionaire, inflated prices for all clubs: selling clubs knew Chelsea could pay any price, rival buyers were forced to cough up to keep up.
That’s not say Gulf funds can’t find the right deal, but they will need the best management. Chelsea, it is to be remembered, won its first League title for 50 years once Abramovich’s cash kicked in.

Pilgrims finally cleared for coverage

2008-02-19T14:16:00.001+04:00

The market opportunity sure sounds attractive: 1.5 million Haj pilgrims each year, and more than five million Umrah pilgrims. Many of them are a long way from home, many of them in the country for the first time. The insurance sector has finally cranked into gear and created a product specifically suited for Saudi’s annual influx.
Tawuniya, Saudi Arabia’s first insurance company, says it will now provide insurance coverage to the millions of foreign pilgrims who come to the Kingdom each year. Arab News says it has signed agreements with Bahrain Kuwait Insurance Company in Manama and Al-Ain Ahlia Insurance Company in the UAE to market the product titled Manasik. The $30, one-month fee will provide cover up to $6,666 in medical bills.
While the move is to be commended, it is frightening that the Saudi authorities have taken so long to allow the private sector to find a solution to a consumer problem. Just as worrying, the go-ahead was given four years ago. According to 2005 figures (unfortunately the most recent) hospitals in Makkah and other holy sites provided health care to more than 11,000 pilgrims. Health centers in the holy cities treated 812,000 people.
No doubt the country’s insurance sector will be rubbing its hands. It is hoped the authorities now realize the role an open business sector can have in helping solve social issues.

Inflation busts faith in governments

2008-02-17T16:37:00.002+04:00

It is failing cooperatives, it is greedy supermarkets, it is ineffective government policies, it is imbalances in public and private sector pay. Whatever it is, the facts on the ground are that the cost of living is increasingly expensive. Consumers in Kuwait claim the price of basic foodstuffs has risen as much as 40 per cent in the past three months.

With the official inflation rate at 7.3 per cent in October, Kuwait Times says the price of staples (cooking oil, rice, eggs, fresh milk) has shot up and that low-income families are struggling to pay the bills.

Kuwait, which depegged from the dollar last summer and has since seen its currency appreciate by 5 per cent, is suffering more than most Gulf countries. But it is not a unique case. Every one of the GCC states has moved to tackle inflation; none appear to have a grip on it.

Inflation is a real threat to the stability of the Gulf’s economies. In a region where the national governments are expected to manage and provide for, letting prices run out of control undermines confidence in governments’ ability. It doesn’t help that oil prices are producing a windfall for the state coffers – ‘how can household budgets by squeezed when the country is now so rich?’

It doesn’t much the expat community. Not everyone is here for the money, but if conditions are better back home there must be a temptation to leave. It will be harder to attract talent if costs spiral. Paying higher wages has been the go-to strategy. Those days might be over.

Not Christian, but love, actually

2008-02-14T12:02:00.000+04:00

With St Valentine’s Day banned in Saudi and under scrutiny in Kuwait, the Gulf is a tough place for budding Romeos and Juliets. In Saudi, the religious police spend the preceding week cracking down on red rose salesmen; Kuwait’s National Assembly Committee for Monitoring Negative Alien Practices has it eye on what it sees as excessive commercialization.
And they’re doomed to fail. Religious authorities might well feel they should be worked up over St Valentine’s Christian connections, but for most consumers – and not just Christians, Feb 14 is becoming increasingly global – it is just a day to tell your loved one that you love them. One can discuss whether it’s best to show this love via the giving of cards, flowers, chocolates or racy underwear, but the concept is now established in consumers’ minds.
Banning business from making a quick buck will not stop the popularity of St Valentine. The true romantic will always find a way.

The Arab League’s fear of phone-ins

2008-02-13T10:58:00.001+04:00

More evidence, if it was needed, of the gaping chasm between how Arab governments view the media, and how the media actually is. The Arab League is proposing a satellite broadcasting charter which would entrench state control over broadcast media and curtail political expression, reports Arabian Business.
The move is thought to be in response to TV talk shows, and the worry that privately-owned stations are too viewer-focused. The paper says

Saudi Arabia

appears to have recently banned live talk shows after someone mocked the size (30 per cent!) of a civil servant salary increase - a position seen as a criticism of the royal family. Saudi stations still run phone-in programs but it is not clear if they are still live.
The charter would ban broadcasting material seen as undermining "social peace, national unity, public order and general propriety" – a broad catch-all that could be used for the most minor of statements.
The move comes as Saudi blogger Fouad Al-Farhan spends his third month in jail, with charges yet to be brought – and if they haven’t found anything yet, it is unlikely they ever will.
As we’ve said before, frightening journalists when you only have half a dozen daily newspapers and a handful of broadcasters is easy; scaring citizens with 24-hour access to blogging software is not.

Private investors take flight

2008-02-12T10:41:00.001+04:00

The Arab Business Angels Network launched last week. The network hopes to put entrepreneurs in need of finance in front of private investors with time and money to get involved. ABAN will also use a fund of its own to get into promising start-ups.
The idea is wonderful – this type of private financing is commonplace in Europe and US (where $25bn is invested each year), but doesn’t exist in the Middle East. ABAN hopes to find, and nurture, small businesses with the potential to grow. Entrepreneurs create wealth, create jobs, and help diversify the economy. Just as important as the money will be the experience; it is hoped cashed-out entrepreneurs will get involved, passing on their knowledge.
It has some first rate backers (Dubai International Capital is driving it, Intel and Dubai Silicon Oasis have signed as corporate angels), but it will need them if it wants to change attitudes to investing. When real estate and equity markets are making easy money, why bother dabbling with slow, high-risk investments? There is also an attitude, equally damaging, that if someone shows entrepreneurial spirit, don’t back them, sign them up to work for your company.
One major thing in ABAN’s favor is that it is not politically driven. Angel investors don’t need to be Arabs, start-ups don’t need to be created by Nationals; the point is that the business (and investment) will benefit the Arab world. As governments discuss nationalization, visa caps and incentives for local business, it is refreshingly modern in its thinking.

Dumb Bahrain tastes Dubai’s strike strife

2008-02-11T12:49:00.001+04:00

Dubai, so often the pioneering driver of economic development in the Gulf, is well used to having neighbors copy its ideas. There must be a sense of satisfaction this morning to see the neighbors also get lumbered with some of the downsides. Workers on

Bahrain

’s Durrat al Bahrain project are striking over pay and conditions, and their bosses appear to have no idea how to sort the problem.
Media reports claim more than 1,000 workers are now locked in their camp, as the bosses on the $6bn project scratch their heads. The workers have been on strike for the past two days demanding better pay, hot water, better medical facilities and other basics such as lights in the toilets. They are being paid $150 a month and have been encouraged in their complaints; the Indian Ambassador says his government is planning to impose a minimum wage of $265 for all Indians in the Gulf.
“How will the company make millions without us, who they treat as slaves?” asks one worker. It is line that could be printed on strikers’ banners across the region. Dubai, for once, will be grateful the attention is elsewhere. It seems incredible the Bahrain Government, part owners of Durrat al Bahrain, didn’t realize that denying medical facilities and hot water - and paying subsistence-level wages - would cause a problem.

Thumb-power

2008-02-06T12:41:00.001+04:00

SMS remains a technology with lots of potential applications waiting to be discovered and implemented — for everything from payment systems to information on demand. Given the mobile network operators’ strong desire to maximize profits, and the need for, say, Etisalat or Du to differentiate themselves, a good idea from a start-up has an excellent chance of getting heard.
The trend-spotting site Springwise has a good from the

Philippines

, where text messaging has caught on in a huge way. Two years ago, according to Pyramid Research, the Southeast Asian archipelago became the first nation on the planet where network providers saw revenues from text messaging exceed what users spent on voice. With its Share-A-Load programme, Philippine network provider Globe Telecom has capitalized on the local love of SMS messages by allowing its customers to send their phone credit (or ‘load’) to someone else. Globe charges PHP 1 or about US .024 for each transaction, making its service an easy way for parents to send money to their children, for example, to make sure they’re able to stay in touch.
Gulf telecom operators, hemmed in by government price controls, might do well to match this innovation.

Quick thinking creates slow-tech solution

2008-02-05T14:57:00.001+04:00

Full marks to Jazeera Airways for its quick and positive reaction to the ongoing internet connection slow down. With more than 60 per cent of the airline’s bookings being made online, it has produced a slimmed down version of its site (just 16 kilobytes in size, loading in less than 4 seconds on very slow connections) to cope with the problem. And released a press release telling the media all about it.
I have no idea how well the site responds to the slow down, or much business Jazeera will make and/or save, but such responsiveness deserves credit. It will be interesting to see if it carries on with the low-tech site after the problem is cleared. Even on a good day, I’d bet customers prefer quick and simple to slow and complicated.

Connecting with the right excuse

2008-02-04T13:08:00.001+04:00

For commuters using the

’s rail network autumn mornings would be sprinkled with late running trains. The standard, slightly baffling excuse would be that there were leaves on the line. Retailers, explaining a poor season’s sales, often fob off investors with the excuse that the weather was ‘wrong’, either too rainy or too sunny.
For Middle East telecom providers there is standard go-to line when services are disrupted: ‘damage to underwater cables’. A cable in the Mediterranean was damaged last week causing a slow down in internet connection speeds across the region. This was followed by damage to a cable off the coast of Dubai, and then another off Qatar. If one is bad luck, and two is careless, what does that make three?

In a region not given to public information announcements, maybe we should be grateful the telecom operators have even offered an excuse. But it is becoming tiresome. They used the same line last year when a cable was damaged off India. Would it be too much to ask them to explain how these cables are damaged, how they are repaired and how they plan to safeguard connections in the future?

KFC flaps its wings

2008-02-03T11:53:00.000+04:00

If you want to build the world’s biggest sandwich you will have to top the 2,500kg monster created by Wild Woody’s Chill and Grill. The longest line of pizza currently stands at 186.3m, in Treviso, Italy. Doha can now claim to be the home of the world’s largest bucket of fried chicken – a 300kg mountain courtesy of Qatar Food Company, the franchisee owner of KFC.
Setting the record has certainly made the papers, at least locally, and no doubt QFC is proudly counting the press clippings. “We wanted Doha to be in the record books and what better way to offer customers abundant supply of the product they love, while setting a record on the way as well,” says Sherif al-Ashry, a company official.
But is this really the kind of story KFC wants associated with its brand? A wasteful amount of presumably cold chicken (it was shipped from six locations) sat in a shopping mall. It makes the brand look cheap and greasy.
And unremarkable. “Judging the thousands of food-related record requests we get every day, it’s hard to tell whether it will stand for very long,” Kelly Garrett, a Guinness World Records adjudicator tells Gulf Times. “Besides, records are being broken, faster than they are made, these days.”

Credibility gap

2008-01-30T11:45:00.000+04:00

Citigroup has hammered Société Générale, saying its recently-discovered $7 billion fraud has threatened the bank’s entire credibility. The financial industry might like to imagine the French bank’s current difficulties can be kept local. They won’t.
The singular actions of Jérôme Kerviel, the French trader currently being questioned by French police, threaten to damage the reputation of the entire finance industry – from banks, to advisors to credit rating agencies - at least in consumers’ eyes. The SocGen debacle comes less than six months after Northern Rock, a British bank, failed, and within the same 12-month period that US banks realized they had botched their bet on the sub-prime market. To the man in the street, the banking industry looks like it is run by buffoons.
Credibility is all.
Which brings us to the news that Emirates Stocks and Commodities Authority (Esca) is to introduce a new licensing regime for stock brokers. The benchmark is to “promote integrity, fairness and sustain investors' confidence”, according to Shaikha Lubna Al Qasimi, UAE Minister of Economy. The move brings the UAE in line with London, Hong Kong and New York.
All stockbrokers will have to be up to speed by the middle of the year. A great idea, if it is backed up with action – and vigilance. Jérôme Kerviel, as the French police will be aware, had all the right qualifications.

The fortune in the labor camp

2008-01-29T13:18:00.002+04:00

Aldar Properties is to construct two residential cities for its workers. The two projects are expected to complete in 2010 and will eventually house 150,000 laborers.
“We are committed to provide respectable living conditions for workers ensuring security and safety,” says Aldar Chairman Ahmed Ali Al Sayegh. “We believe that the company’s progress is attributed partly to the labourers who work hard in our projects. For our part, we provide them with facilities and first-class services along with transportation to move them from the residential compounds to work sites.”
The new-and-improved labor camps are the latest attempt to reinvent the UAE’s dismal record on the treatment of workers. The next generation accommodation will be less like a jail, and more holiday camp. Ronald Barrott, Aldar CEO, says invitations will be “sent to many celebrities, such as singers, to come entertain the compound’s residents.”
There will also be shops, banks, cinemas and services. Will there be much need for shopping for residents earning less than $10 a day? You bet. The trick, according to CK Prahalad, is to stop thinking of the poor as victims and instead start seeing them as “resilient and creative entrepreneurs as well as value-demanding consumers”. Pick up his book, 'The Fortune at the Bottom of the Pyramid’, for details. Or do the math: 150,000 workers at $10 equals $1.5m.

Bar talk from Bahrain minister

2008-01-28T14:18:00.000+04:00

“A lord with billions in

Great Britain

cleans his own car on a Sunday morning, whereas people of the Gulf look for someone to hand them a glass of water from just a couple of meters away.”

So speaks Majid al-Alawi, Bahrain’s labor minister, quoted in Asharq Al-Awsat. Fond of the colorful quote, he says the Gulf is in danger of being swamped by an “Asian tsunami” of expat workers because locals are too “lazy” and “spoilt” to do simple tasks themselves, and that the threat is “worse than the atomic bomb or an Israeli attack”.
I’ve heard these sentiments expressed several times in expat hostelries, but hadn’t expected it from a government minister.
Alawi, an advocate of the six-year residency cap for unskilled expat workers, wants action to tackle this imbalance. If GCC governments aren’t going to act on the cap, he might be right in attacking the problem at source. It will be interesting to see whether Gulf Arabs feel his tap-room comments are worthy of discussion.

AdLand’s warped reality

2008-01-27T12:08:00.001+04:00

It is a dangerous science reading too much into the world imagined by the advertising industry. If aliens were to land on earth and catch a five minute ad-break they would conclude human teeth are white and straight, credit is easy to come by, and drinking soft drinks causes people to sing and dance.
We accept the ad industry sells us a fantasy, but that shouldn’t mean it loses touch with the real world. Middle East advertising asks consumers to suspend their grip on reality. The industry appears to have drawn up some very strange rules.

Maids must be invisible. No family will be seen to employ a maid.

In the home, housewives must wear brightly colored abayas. Black is too gloomy.

Buying a new car clears all traffic from the roads. Drivers must head immediately to a twisty mountain road.

All houses will be decorated in an ultra-modern style. All homes must have been built within the last five years.

Applying for a loan is a sign of success. Debt is to be celebrated.

Indians/Indonesians/Filipinos must not appear in crowd shots.

You can only imagine what the curious aliens would make of this. For those of us that live here it suggests a region terrified of admitting it is multi-cultural, old-fashioned, financially irresponsible, and clogged with traffic.

Death by a thousand cuts

2008-01-24T11:26:00.001+04:00

The Fed cuts interest rates, the UAE Central Bank, pegged to the dollar, is forced to follow suit. The difference here is that the

is hurtling towards recession, the UAE is not. In fact, it is trying to get a grip on a boom.
Today’s comment doesn’t need to come from Kipp. We’ll leave it to Shaikh Sultan bin Saud Al Qasimi, chairman of Barjeel Geojit Securities and managing director of the Sharjah-based Al Saud group. Cheaper money will only fuel consumption and, in particular, push up property prices, he tells Khaleej Times.
“In the UAE we have zero monetary policy,” a surprisingly forthright Al Qasimi states. “We have abdicated all responsibility for monetary policy to the

.” Quite.

Doha on Thames

2008-01-23T11:36:00.001+04:00

A consortium of Qatari funds is stumping up the $3.88 billion to fund the building of London’s "Shard of Glass" skyscraper. The 310-meter tower, described as “Europe's most recognisable commercial property landmark”, will add two million square feet of commercial space to the City.
It is another example of cash-rich Gulf funds stepping in to finance credit-crunched Western ventures. This one differs slightly in that it is a new build, high profile and slightly risky; nearly 400,000sqft of space has been pre-sold but filling the rest could prove sticky.
No word yet on whether the London public will know of the Qataris’ involvement, whether the tower will be renamed. Best to wait to see if the project works, then decide.

The Land of the Long Lunch

2008-01-22T11:13:00.001+04:00

“There is no possibility of achieving competitiveness without raising the culture of productivity,” said Professor Michael Porter, addressing the audience at 2nd Global Competitiveness Forum in Riyadh on Monday. If past experience of conferences in Saudi are anything to go by, half his audience would have been snoozing, the other half considering their lunch options.
Not that this should stop the Porter, professor at the Harvard Business School, an expert on economic competitiveness and paid north of $50,000 for making the trip, from delivering his presentation. He went to claim the poor productivity of the Saudi workers was due to the lack of proper training. A generous statement, but one that at least offered practical advice to the three Ministers in the audience.
As sensible and practical Porter might be, what Saudi needs is evidence of home grown productivity, not more words. If it can show how a lean, hardworking, motivated company is winning new business and competing on the world stage, then it might help convince Saudi industry. Until then, nice lunch, isn’t it?

Got talent

2008-01-21T10:51:00.000+04:00

A global study of MBA students at top European, US and Asian schools has revealed that the Middle East needs to do more to attract top international talent. File this one under ‘No, Shit-Sherlock’.
To be fair, a closer look at the study (Hill & Knowlton’s eighth annual Corporate Reputation Watch) does throw up some interesting insights, and explains what most of us already knew. MBA students much prefer publicly-listed companies to government or family-owned; one fifth are prepared to move abroad; and three-quarters would be happy to switch industry.
In a region with a high number of either state or family businesses, where workers are asked to sign up to daunting employment contracts, and career progression is sometimes based on sex and race, rather than talent, there would be seem to be much work to be done. If it wants to attract MBA talent.
From personal experience, the Middle East seems to have no problem attracting workers whose careers have stalled at home, have been parachuted in on a high salaried short term contract, are escaping flat economies in their home country, or those who fancy a change of scene and a new challenge. There is no problem with that. To an extent, it’s what happens when they get here, not what they bring, that matters. Get-up-and-go is more important to wealth creation than formal qualifications.
By all means pitch for MBA talent, but don’t imagine MBA equates to entrepreneurial.

First the World, tomorrow the Universe

2008-01-20T11:44:00.000+04:00

Nakheel, developers of the three Palm islands and The World, plans to build The Universe. The project will comprise of a series of islands strung along the Dubai coast, stretching from Palm Jumeirah to Palm Deira. The construction will take 20 years to complete; choosing the name couldn’t have than longer than 20 seconds.

As if to head off any criticism that its offshore developments were creating an environmental disaster zone, the news was preceded by the announcement Nakheel is to commit $55m to raise awareness of coastal development issues.

Almost two-thirds of the world's population lives in coastal communities and a large amount of development is taking place in these locations. As such there is a need for significant investment in research, development and positive transformation of these environments. The long-term aim is to provide leadership in the development of sustainable coastal communities," says Sultan Ahmad Bin Sulayem, Executive Chairman, Nakheel.

In October, Chinese businessman, Bin Hu, bought one of the islands of The World, Shanghai, for $28m. The cost of construction of The World is estimated at $14 billion. The $55m ‘green’ fund is, literally, a drop in the ocean.

Thrillingly sensible

2008-01-17T13:25:00.000+04:00

Emaar Malls has inked a deal with Sega Corporation to develop and operate indoor theme parks. Emaar plans to spend $4bn opening 100 malls across the Middle East, North African and Indian subcontinent. Sega is a global leader in interactive entertainment facility operations.

I can’t find anything to fault in this. Good business marrying up with another good business to create a better business. I’m sure large sums were involved, but that shouldn’t detract from the business sense. Granted, with 100 malls to play with Emaar could have opted to create its own Entertainments brand, but it has enough on its plate. Why make life more complicated?

If you’re planning rapid expansion it’s good to partner up with experts.

In praise of…rain

2008-01-16T10:06:00.000+04:00

Rain in the desert is a wonderful thing. Nourishment to parched ground, damping down dust, and, for Dubai, helping wash away the grime of a polluted city; it has also tested Dubai business.

Road builders will be examining their drainage systems
House builders will be praying the new roof is water-tight
Fast food restaurants will know their most hardened delivery drivers
The tourism industry asks itself ‘if the sun stops shining, then what?’
News providers should ask themselves are they doing enough to inform residents
Car cleaners prepare themselves for a busy weekend
And the owner of flooded Porsche Boxter at the Arabian Ranches roundabout will be wondering if he can part-ex on a 4WD

How did your business get on?

King of the Roads

2008-01-15T09:24:00.000+04:00

If nothing else, at least now Dubaians realize the importance of Sheikh Zayed Road. Close the road, the city stops.
Business may grumble that Monday’s public holiday – the fifth consecutive working week interrupted by a holiday – was called late, but it was unavoidable. For security reasons, the visit of George Bush to Dubai is not something that can be flagged in advance. If the authorities then choose to close down the city’s main artery for 10 hours, along with closures on feeder roads, then there is little option but to tell people to take the day off and stay home.
It is a pity Bush never got to see the real city, warts and all. The presidential bubble must think the world is full of clear roads, and smells of fresh paint.

Tax: enough chat, get on with it

2008-01-13T10:36:00.000+04:00

More mutterings about tax in the Gulf, this time from Bahrain. Khalifa Al Dhahrani, speaker of the Bahrain Parliament called for levying taxes on profits of foreign commercial institutions. As usual in these things he did not specify the tax rate or suggest a date for applying the new regime.
“Bahrain has limited sources of income and relies heavily on oil to fund its spending. Now it needs to diversify its sources, expand its financial assets and preserve the rights of the future generations,” says Al Dhahrani, reported in Gulf News. “It is only fair that foreign investors should contribute to the expenses by paying taxes.”
So what’s stopping them? Gulf countries seem to be able to command the building of roads, but new planes and construct office blocks, why can’t they introduce a tax system? If the idea is that tax revenues will be used to pay for infrastructure and services that will benefit the wider economy, where is the problem in that? Who’s complaining?
It seems no one is prepared to grasp the nettle. They shouldn’t worry. Business is not sold only on the idea of a tax-free environment. Ease of doing business, a deep pool of talent, good infrastructure, long term stability…all of these rank highly. Maybe Bahrain needs to just get on with it – and introduce the best, most equitable, most accountable tax system the world has seen.

Pirates of the Arabian

2008-01-09T11:08:00.000+04:00

Almost every office I’ve worked in has used hooky software, the building here is happy to allow Chinese DVD hawkers to go door to door, and holidaymakers include trips to Karama on their itinerary (my Christmas guest bought four handbags, one watch and a purse). I have friends here who are first name terms with their supplier of fakes, one recently had an order of Paul Smith shirts knocked up for less than 70ds (full retail price: 700ds). And they weren’t bad.

The UAE claims to stringent laws have kept piracy and counterfeiting under control. “While it is a serious matter in the entire Middle East it is not so serious here due to stringent measures and tough laws introduced since the mid-1990s,” Mohammed bin Abdul Aziz Al Shihhi, Planning Sector Undersecretary, tells Emirates Business. “The UAE takes the issue very seriously as it is directly linked to foreign investment.”

This is nonsense. While recognizing there is a big difference between an obviously fake handbag bought from a cheerfully dodgy shop in Karama, and unknowingly buying fake brake pads from an authorized retailer, there is clearly some gap between having laws and implementing them. If you’re happy to let sellers of fake goods continue to trade, don’t be surprised if a culture develops that says fakes are fine.
Counterfeit goods are a global problem, and unfortunately for Dubai, as a transport hub, it suffers more than most. But if the city is to really crack down on the problem, and earn a global reputation for managing this issue, it must crack down on fakes at every turn.
Rudy Giuliani, former mayor of New York and Republican presidential candidate, faced a similar problem when dealing with drug, crime and prostitution in Time Square. His Zero Tolerance policy cleaned the streets and revived the city’s reputation. Time for Dubai to step up.

Money buys class, but not exclusivity

2008-01-08T11:22:00.000+04:00

One of the major, modern headaches of ambitious brand owners is how far to take the brand. Pressure on revenue says roll out the brand into new territories (or categories); protecting what you have says don’t dilute the magic.

Starbucks is in the middle of such a headache, Fast Moving Consumer Goods giants such as Unilever and Proctor & Gamble face it every day. Right now, the Louvre, icon of France and Paris’ star museum, must be having its own internal wrangle.
The museum inked the latest stage in its deal to open a Louvre Abu Dhabi. There are $525m-worth of good reasons why France-Museums made the 30-year deal; the question now is how far do they take this roll out? Can we expect Louvre Rio, Louvre Cape Town or Louvre Auckland?
This matter because there is cachet to exclusivity. If Abu Dhabi can’t spend years creating its own world class museum, it would be nice if it at least acquired the exclusive rights to one of the best. Knowing it was one of four cities hosting a ‘Louvre Lite’ is a different proposition, particulary for its tourism marketing.
The danger for the Abu Dhabi, spending big money to acquire the rights to established formats, is that it signals the brands can be bought for cash. The brand owners may not always want to sell, buy they have advertised the fact they have a price. Building your own brands, however lengthy the process, may be the better option.

When bureaucrats meet business

2008-01-07T11:20:00.001+04:00

As Kuwait's banking community tells its country's lawmakers to stop meddling in monetary policy, Saudi's Shoura Council is stepping up its interference in small business issues. An incredibly detailed new law, awaiting Council of Ministers' approval, plans to govern the summer opening times of sheesha outlets, decide when highway food stops must close, and the winter hours of amusement arcades.

The Shoura Council says the law is the result of two years of research and study. It reiterates that all shops should be closed during prayer times, regardless of the season.
Business needs some government – and Saudi officials are right to point to shorter European opening hours – but it is the nitpicking interference that bothers. A recent World Bank report put Saudi 23rd in terms of business reforms (presumably it had more than most to reform), ahead of others in the region. Good luck with next year's report.

More heart, less bricks

2008-01-06T10:29:00.000+04:00

Many of us will have been on holiday and returned enthusing about a new city. Not everyone then plans to build a version of the city in their home town. Buti Saeed Al Gandhi is not everyone.
Al Gandhi, boss of Eminvest, a Dubai-based investment firm, is to build a version of the French city Lyon in Dubai. He is reported to have firmed plans after traveling to the city as part of a scheme to design a new French-language university in Dubai. The university plans remain, but it will now form part of a huge new district featuring public squares, restaurants, outdoor cafes and museums. French urban planners are on board and the project is expected to complete in 2012.
"We're not going to just copy the buildings and make a type of Lyon decor, but reinstitute the city's atmosphere with boutiques and cultural places in the heart of the city, transport, a social mix, streets and lanes," said urban specialist Jean-Paul Lebas, who is working on the project.
Al Gandhi could have picked a worse city to fall in love with. Lyon is famed as the home of French gastronomy; two of France's best known wine-growing regions are located nearby the Beaujolais to the north, and the Côtes du Rhône to the south; and parts of the city were named as UNESCO World Heritage Sites in 1998. It is the birthplace of cinema and has an agreeable summer temperature of around 27°.
How well wine, pork sausages and French art house cinema will translate in Dubai is anyone’s guess, but Al Gandhi needs to be commended for aiming to recreate an atmosphere, rather than just the architecture. With Dubai absent from any of the ‘world’s most livable city’ charts, it is no surprise to see developers go for the quick-fix solution: rebuild winning formats from elsewhere in the world.
What can we expect next? Business Week’s annual survey, conducted by Mercer Human Resource Consulting, ranks cities by political stability, currency-exchange regulations, political and media censorship, school quality, housing, the environment and public safety. Zurich, topped the list last year, followed by Geneva, and Vancouver and Vienna tied for third. The full list, including slideshow, is here.
Four of the ten most livable cities surveyed by the Economist Intelligence Unit are in Australia, and two of the top five are Canadian. Vancouver is the most attractive destination, Melbourne second. A developed public transport system is a high priority.
Monocle magazine rates Munich as its number one, with a winning combination of investment in infrastructure, high-quality housing, low crime, liberal politics and strong media. Copenhagen and Zurich are second and third.
There may be some differences in the three rankings, but all agree that ‘soft’ features (media freedom, political freedom, laws) are as important as ‘hard’ (transport, housing). Al Gandhi’s Little Lyon will do well to remember this.

Toilet paper

2008-01-03T10:03:00.000+04:00

This morning’s Financial Times leads with ‘Dollar fear sparks rush to oil and gold’, the Wall Street Journal also goes with oil (‘Oil Hits $100, Jolting Markets’). Emirates Business 247, the UAE’s month old business newspaper (advertising slogan: ‘Hungry For Dominance?’) goes with ‘Sheikh Mohammed the leader of change’.
This, according to Emirates Business, is a news story. Presumably this time last week Sheikh Mohammed wasn’t a leader of change, but, perhaps thanks to some change of policy over the new year break, he now is. Whatever, Emirates Business’ gushing 400 words don’t tell us much – other than that tomorrow is the second anniversary of Sheikh Mohammed’s ascension as the vice president, Prime Minister and ruler of Dubai.
Not to hammer Emirates Business (or the achievements of Sheikh Mohammed), but this is an extremely lame lead story. Okay, it might make for a decent analysis piece (evaluating the changes over the past two years) but as a front page lead it is an example of the powder puff pieces of old, not the ‘pioneering’ qualities parped by Emirates Business’ in its ‘About Us’ section. Tellingly, no other business media feels the need to lead with such a soft feature.
This matters because Dubai needs strong business media. It is a city built on commerce, one that is increasingly seen in the international news, and the failure of a government-owned paper (one that has just undergone an expensive relaunch) is not helpful. Emirates Business claims the region now ‘has a publication worthy of its economic and financial dynamism’. That is a back-handed compliment.

More sex in the city

2008-01-02T11:50:00.000+04:00

Women make up less than one per cent of executive boardroom membership of Dubai Financial Market-listed companies. Of the 371 boardroom members, just three are women. And none are based in the UAE.

There are many ways to read this Emirates Business survey, but ‘less than one per cent’ is ‘less than one per cent’ whichever way you slice it. In Norway, 36 per cent of boardroom members are women – and there is a government target of 40 per cent.
You could argue that this survey is only concerned with DFM-listed companies, so it is not representative of the broader UAE economy. But how many private businesses do you know with women in senior positions? Sure, there are notable examples, but it is not Little Oslo out there.
This matters because the UAE, and Dubai in particular, is casting itself as a new economy for the (not so) new century. If we accept that attracting and nurturing the best human resources is a profitable idea, and that this talent can move anywhere in the world, shouldn’t it be a major goal to remove any barriers to women moving up the career ladder?
This issue is not so much ‘bring more women into the boardroom’ as freeing up talent. If the best candidates are being prevented from progressing, the economy suffers. If Emirates can spire to be the world’s best airline, or Emaar the world’s best property developer, why can’t the UAE be home to the world’s most talented boardrooms?

Blessed be the firework makers

2007-12-31T11:03:00.000+04:00

Some easy New Year’s predictions: Dubai’s fireworks suppliers will enjoy a bumper start to the year, those looking for a second-hand, barely-used Lexus will find a bargain, and February Fridays at Mall of the Emirates will be a living hell. Welcome to 2008. Welcome to Dubai Shopping Festival.
A DSF press release, helpfully reprinted by Gulf News, informs us weekend firework displays will last 20 minutes (2007’s were a paltry three minutes), more than 90 Lexus and Nissan cars will be raffled (only to appear next day at 4x4 Motors), and visitors numbers will be up from 3.5million to nearly 4m.
The number of participating retailers will increase from 2,800 last year to over 3,500. Revenues are expected to top $3bn. There will be lots of gold to be won.
The official figures tell us DSF is a continued success, attracting more visitors to Dubai and generating greater revenue. The formula must work otherwise why would Jeddah and Doha, among others, want to copy it?
But what if, for one year, there was no DSF? Would Dubai fail to attract visitors during the best winter-sun period of the year? Would the golf, horse racing and tennis fail to add visitors? Would the world class malls be empty?
This is not to knock DSF, but some clearer evidence of the DSF effect would be welcome. How many visitors are persuaded to choose Dubai because of DSF? How many extra purchases are made because there is a raffle?
At the moment it appears DSF is an industry that needs to keep feeding itself.

The personal touch

2007-12-31T11:01:00.000+04:00

As Dubai involves itself in ever larger, and more diverse international deals, it is nice to be reminded that not every deal is based on hard cash and bottom lines. We’re told Sri Lanka’s decision to revoke the work permit of its national carrier’s CEO – a guy out in place by Emirates – will have an “extremely negative” impact on talks with Emirates over the renewal the contract to run the airline.
Never underestimate the power of the personal relationship, particularly, according to the Financial Times, when as many as 70 percent of businesses, either private or listed, are family controlled. Forty per cent of the Fortune 500 companies still under family control.
According to reports, the Sri Lanka government took the hump with Peter Hill after he reportedly refused to bump passengers off a flight from London to Colombo to make way for the island’s president and his entourage. It withdrew his work permit on December 19. The move is not likely to help relations as the two sides discuss an extension to their current deal. Hill had previous said the talks were dragging.
The upside of a personal relationship, or attachment to a business, is often long term thinking, or at least a willingness to stick to the path during tough times. The flipside is personal disputes are often harder to resolve. Disagreements between the members of the Bancroft family are widely seen as having created an opening for Rupert Murdoch to make his $5bn bid for Dow Jones, owners of the Wall Street Journal.
It may turn out that Peter Hill’s actions (and words) are part of Emirates’ bargaining strategy.

Du the math

2007-12-11T11:40:00.001+04:00

In a meeting with Coca Cola senior management a couple of years ago, the company’s regional md revealed how his life is governed by a continuous check of Coke’s retail presence. Every day, in shops, on planes, in bars, at vending machines, was spent checking whether Coke was beating Pepsi?

In this morning’s Emirates Business 24/7, Osman Sultan, CEO of Du, admits to a similar compulsive disorder: he says he feels a “quiet sense of achievement” every time he answers a call from an 055 prefix.

He must be short on thrills. Despite Du claiming to have passed the one million-customers barrier, a straw poll of friends and colleagues suggests very few people are using a Du number. Etisalat numbers continue to dominate – people still assume mobile numbers start with an 050 prefix. For the most part, the only people using a Du number are new arrivals; many Etisalat customers have booked a Du number, but don’t use it.

This is hardly Du’s fault. With no room to wriggle on price, the UAE’s second mobile operator has limited means to differentiate itself from the incumbent (not helped by both preferring lower case); there is not much of a compelling argument for consumers to shift operators. ‘I have a Du number but Etisalat matches the package, so why should I change,’ says one colleague.

Du has stated it wants 30 per cent of the UAE market by 2009. What it doesn’t say is whether this by market value, traffic or prefix.

Silent Salik

2007-12-10T11:06:00.000+04:00

To the surprise of no one Dubai’s Salik road toll system is to be expanded to all major roads and bridges in the city. Electronic gates will be installed on Emirates Road, Al Khail Road and Al Ittihad Road by 2009. Salik will also be introduced at Shindagha Tunnel, Business Bay Crossing and Maktoum bridge.

Since Salik was introduced in the summer, the RTA has inched towards some degree of public interaction. There has been a sharp increase in the number of RTA ads appearing in press and billboards. It is now advertising its complaints line: 800 9090, http://ecomplain.dubai.ae, or fax to 04 206 5532. It might have been nice to flag up some concept of dialogue before the next phase of expansion: a suggestion that public feedback might be taken into consideration.

The RTA says the roll-out is part of “a major push to get people to use public transport”, reports Emirates Business 24|7 - though neither the RTA nor the paper bother to provide details of how. No details on tolls either.

There is nothing wrong in admitting this is a tax on drivers. Sailk is expected to raise Dh600m this year; details of how this money is being spent on tackling the traffic problem would be welcome. A public face for the RTA would be ideal.