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Post apocalyptic Dubai 28, December 2009

Posted by thegulfblog.com in The Emirates.
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…is the setting for a new first person shoot’em’up computer game. The trailer, below, is curiously beautiful and extremely well done. Though, as has been said, I doubt whether that will be appreciated in Dubai when the game goes on sale there.

Hat tip: Dr. Chris Davidson

Dubai: the world’s longest ambulance 25, December 2009

Posted by thegulfblog.com in The Emirates.
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Is it just me or does Dubai at times remind you of a strung-out junkie, desperate for another fix of hyperbole and superlatives from the international press? I mean the world’s longest ambulance? What’s next, the world’s biggest cheese-grater? World’s biggest key-chain? World’s widest puddle? Feel free to add you own suggestions…

Hat tip: Suq al Mal

70% pay rise for Emiratis 23, December 2009

Posted by thegulfblog.com in The Emirates.
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The National reports that public sector Emirati workers will be receiving a 70% pay rise. I only have a few thoughts on this:

  • Do you think that Emiraiti in the ‘ministries’ will work harder for this pay now, or will the legendary* caricature of the four and a half day a week, 2 hour lunch break taking, late starting and early finishing Gulfie carry on as usual?
  • This is the rentier bargain in a nut-shell. ‘Yes, dear citizen, Dubai has huge issues, but don’t worry about it. Here’s some more cash…off you run to the shops now…’
  • There’s only so far that these salaries can rise. Not for a very long time given Abu Dhabi’s oil and gas wealth, but eventually these economies will have to face up to economic realities of ludicrously high wages and equally ludicrously low levels of productivity throughout the state sector. Decisions today are creating the mother of all rods for the backs of their grandchildren’s generation of rulers. It easy to give out cash like this but to take it back?…that’s not going to be pretty.

* The notion of ‘the national’ working in ‘a Ministry’ is a loaded concept in the Gulf. I’ve spoken to countless people about this in industries ranging from education to oil and gas to security to research in Kuwait, the Emirates and Qatar and I have unanimously heard stories of woefully under-productive workers with little to do (if anything at times), little motivation to do anything and no coercive measures to make them do anything. Needless to say, this doesn’t apply to all workers, but arguably the majority. I’ve heard these stories from nationals themselves and from ex-pats.

Technically, I could, of course, have been speaking to people with an agenda to push. However, given the numerous different settings in which I’ve talked to these people I doubt this and overall I do not really think that anyone with any serious experience of the region would argue with this premise. The only argument to have, as far as I see it, is over the question of how bad/prevalent it is. You can draw your own conclusions, but, as far as I see it, it is a chronic problem soundly based in rentier theory, which, as I explain above, poses a real threat to these societies.

Hat tip: UAE Community Blog

Who blinked first? 18, December 2009

Posted by thegulfblog.com in The Emirates.
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With Abu Dhabi agreeing to give Dubai some $10 billion, there are many interesting questions to be asked about the conditions that are now attached and what this means for some Dubai’s autonomy. The best discussion of this is available, of course, on the Suq Al Mal blog.

Dubai: No lessons learned 15, December 2009

Posted by thegulfblog.com in The Emirates.
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There’s a peach of a post over at Suq Al Mal discussing an absurdly triumphal editorial in a Dubai newspaper.

One would have thought that recent events would have resulted in a bit of introspection and restrained behavior.  Unless of course one was familiar with the region.
Today’s Khaleej Newspaper (Dubai) has a lead article entitled “We Can Do It”. Here is the first paragraph.
“GLOBAL crisis or not, Dubai has done it again. It has once again shown the world, beyond doubt, its ability and willingness not only to meet its obligations but any challenge to its unrivalled status as the most dynamic global financial and trading hub in the Gulf region.”
I’m not sure precisely what Dubai has done.
As I understand things, the kindly Shaykh up the road has sent around US$10 billion to be used to settle Dubai’s debts.  And Dubai is mailing the check.   How that shows ability is beyond me.  And how living off the kindness of strangers beats back challenges to a postulated “unrivalled status” also escapes me.

Migrants the only losers in Dubai 8, December 2009

Posted by thegulfblog.com in The Emirates.
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As much as Dubai is suffering at the moment from its crippling credit crunch, one must never lose sight of the fact that Emiratees will be fine. They will not go without their Porches, Range Rovers or trips to the South of France. The ones that will be suffering the most will, as always, be the migrant workers from Asia and North Africa. There are already stories of tens of thousands being laid off. Do you think that there is any – any – chance whatsoever that these workers will receive their owed back-pay or end of contract gratuity or severance pay? None. Khaaalis.

This is the reason that people should be angry with Dubai. Not because some greedy bankers in London have lost (yet more) money nor that the get-rich quick bankers and accountants from Essex who went to Dubai for no tax, cheap booze, the tackiest of houses and sex on the beach have lost their jobs, but because of the devastating knock-on effect that this will have on remittances and dirt-poor families in India, Pakistan, Bangladesh, Egypt, the Philippines….

Hat tip: Abstract JK

The Dubai kicking continues 4, December 2009

Posted by thegulfblog.com in The Emirates.
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The Guardian continues the Western media’s schadenfreude-imbued coverage of Dubai’s debacle today with a nice piece on the absurd construction plans that Dubai had in its make-believe pipeline. As so many people have said: ‘even though ‘I’ don’t know that much about economics, ‘I’ still knew that this level of delusional planning and aspiration would, at some stage, fall flat on its face’. Personally, I count myself among the now smug, after-the-fact-experts claiming that Dubai’s failure was but a matter of time. The only person, I think, that can really claim to have seen it coming is my supervisor in Durham, Dr. Christopher Davidson in his recent book on Dubai. Mabrouk, as they say.

A Small Gallery of Folly

A constantly shifting tower block. Nice idea, would be beautiful, but, come on, let’s be serious. Dubai ridiculous rating (DRR): 9/10

An underwater hotel. Please. DRR: 10/10

A ghastly Trump-built tower. Ugly. DRR: 3/10

A 1km tall tower. Compensating for something are we? DRR: 8/10

Dubai’s fundamental problem 30, November 2009

Posted by thegulfblog.com in The Emirates.
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Dubai is in a mess. One of the many reasons that it finds itself in such a predicament is because of a rather profound lack of transparency. Markets hate not knowing. It inevitably leads them to a pessimistic spiral. Statements that people should “shut up” speculating and worrying about the state of Dubai’s economy and that things are going “along nicely” are not worth the paper they are written on if they are not backed up by a transparent paper trail. Indeed, these ridiculous statements were ignored by the international markets much to Sheikh Mohammed bin Rashid al-Maktoum’s annoyance.

There is a truly fundamental problem here. Sheikh Mohammed bin Rashid al-Maktoum is used to people doing what they are told: he is the ruler, they are the ruled. Yet, in situations like this, he is not dealing with a few sycophantic Emirati bankers, fearful of a loss of patronage, but savvy international bankers, journalists and the like. They will need more than his ‘mighty word’ that things are alright. Indeed, their mistrust has been proven 100% correct: his word clearly means nothing, having being proven to be 100% incorrect and wrong.

This is the kind of thing that happens when someone is so rarely told ‘no’. At this point I am reminded of two leaders. The first is King Canute, who is said to have believed that he could stop the tide coming is as he was some kind of divine King: alas he couldn’t. The second is Gaddafi and his ridiculous speech at the UN a few months ago, a clear a demonstration as there has ever been of an idiot that no one has dared to say no to in 40 years.

The reaction to ban the Sunday Times in Dubai for an unflattering cartoon is typical and not a little pathetic.

And, just for good measures, here’s a (far better) cartoon from The Times’s excellent Peter Brookes.

It has been interesting to note the overbearing tone of near-gleeful Schadenfreude in the British and American press at Dubai’s embarrassing and ignominious default. The tone varies from superior to rude.

…the sea will wash away those hideous palm-shaped islands where our cheaper celebs spend spring weekends, the expat apartment blocks will crumble into dust, the scorpions will return and Dubai will be what it was in the 1960s, a frowsy fishing port in a scorched and very backward Third World country, with a moral code for the indigenous population drawn from AD 1335.

 

Abu Dhabi bails out Dubai…again 25, November 2009

Posted by thegulfblog.com in The Emirates.
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Two Abu Dhabi banks have lent some $5 billion to Dubai which is by all accounts still struggling massively since its credit-crunch collapse. For this ‘investment’ Abu Dhabi have demands both large and small. For example, Abu Dhabi sought and gained a huge stake in Dubai’s flagship airline Emirates and also changed a bill-board in a prominent place in Dubai from a picture of Dubai’s ruler to a pointedly different message proclaiming ‘Long live our Emirates Union’ with a picture of UAE President Shiekh Khalifah bin Zayed Al Nayhan, just to rub it in.

 

Iranian-UAE relations 27, October 2009

Posted by thegulfblog.com in Iran, The Emirates.
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The Iran in the Gulf blog highlights an interesting example showing just how interlinked the Iranian and the UAE are. This article nicely encapsulate just how much a decision made in one country can potentially significantly affect, for example, the economy in another.

 

Trade in basmati has suffered a setback after Iran stopped importing the rice.

Dhows carrying several tonnes of Indian and Pakistani basmati are stranded in Dubai and Sharjah after buyers in Iran backed out of agreements to take delivery.

Some traders in the UAE are now offering huge quantities of the rice at half the price. Traders said the departure of Iranian buyers from the market has impacted demand and brought down the price.

“Boats loaded with Indian and Pakistani basmati have been waiting to leave for Iran for some time now,” said the marketing manager of a food trading company in Dubai.

He said: “Boats filled with basmati have been lying idle in Dubai and at Sharjah Cornice. Iran used to be a good market for UAE re-exporters and the fall in demand there will definitely hurt the UAE market.”

He said prices of many premium basmati rice varieties have fallen by 30 per cent to 40 per cent.