7StarsDubai

Dubai UAE News from the Press Property Market Disaster and More

  • Dubai 7 Stars
  • March 2009
    M T W T F S S
    « Feb   Apr »
     1
    2345678
    9101112131415
    16171819202122
    23242526272829
    3031  
  • Middle East Unrest Update

  • Talk of the Town

    Jo Hopworth on Justice For Natalie – Na…
    Mariam on Criminal Complaint filed in Ge…
    Martin Kraeter on ACI Dubai Funds filed bankrupt…
    Independent Observer on Iranian’s lawsuit reveals roya…
    Rado on DubaiTouristen landen schnell…
    Dubai Citizen on Al Fajer Properties Case…
    Dane on Outlook in concrete- Dubai Wor…
    jamesl fayad on RERA Dubai – Dubai Prope…
    Jacques on Malika Karoum finally arrested…
    James Brown on ACI – Alternative Capita…
    Journalist on Al Fajer Properties-500 Invest…
    ron oakeley on ACI – Alternative Capita…
    Benson Fu on Shahram Zadeh against Al Fajer…
    Monika on RERA – Dubai mulls cance…
    Ali Varahram on Shahram Zadeh against Al Fajer…
  • Top Rated Comments

  • Top Posts

  • RSS Dubai United Arab Emirates Property Real Estate Debt Fraud Developer Investor Court News

    • Criminal Complaint filed against Al Fajer Properties Sheikh Maktoum
      Criminal Complaint filed in Germany against Sheikh Maktoum Hasher Maktoum Juma Al Maktoum CEO of Dubai Developer Al Fajer Properties The Dubai Sheikh who mislead and extort a German Couple  Germany – Dubai 2011 A German elderly couple , today 80 + 50 years old who have been Dubai Tourists since a decade, bought in 2005 an apartment at Nakheel´s Dubai Residen […]
    • UAE: Human Rights Blogger, Sorbonne Lecturer Charged With ‘Humiliating' Officials
      source Human Rights Watch www.hrw.org (Beirut) - The United Arab Emirates attorney general should immediately drop all charges against five pro-democracy activists to halt their trial, Human Rights Watch said today. The charges of "humiliating" top officials relate solely to the defendants' peaceful use of speech to criticize the UAE governmen […]
    • Nakheel Dubai Sunland Case
      June 5, 2011After 21 hearings, Chris O'Donnell, the Australian chief executive of Dubai's major developer, Nakheel, came to the defence of his former colleagues Matthew Joyce and Marcus Lee. Mr Joyce and Mr Lee are accused of profiting from the sale of land that had been earmarked for a colossal high-rise development, which was to include the futur […]
    • Dubai Nakheel CEO decided to leave the company
      Dubai June 7, 2011 Nakheel said on Wednesday that its CEO Chris O'Donnell had left the company "after completing his contract terms". O'Donnell, an Australian who joined the developer in 2006, said he had decided to leave Nakheel following five years spent with the company, the statement added. O'Donnell has overseen a traumatic time […]
    • Owner of Dubai Developer Damac Hussain Sajwani files case against Egypt corruption ruling
      Dubai property developer Damac said on Tuesday it had filed an international arbitration case against Egypt over a land dispute and the conviction of its chairman and owner, Hussain Sajwani.A Cairo court last week sentenced Sajwani in his absence to jail and ordered him to pay a $40.5 million fine in connection with his 2006 purchase of land at Egypt's […]
    • Dubai Palm Jumeriah - Investors plan to take legal action
      Investors in Dubai Palm Jumeirah’s Golden Mile complex will this week serve the developer behind the project with a legal ultimatum to hand over their units or issue them with a refund.Up to ten investors in the luxury complex plan to issue Souq Residences with legal notice in a bid to force a resolution to a dispute that has been ongoing for more than a yea […]
  • Top Rated Posts

    • 472,447 visitors 2010
  • Disclaimer 7 Stars Dubai

    This Website of the Blog 7starsdubai.wordpress.com and 7starsdubai.com content still existing media releases and comments from reputated press and websites only. The content of this Website focus to consumer protection for Investors of the Dubai Property market, the UAE and the Middle East. Press Article from the international Press who report about Fraud in relation with Property Investment and Real Estate Developer Investor Disputes in Dubai and the UAE as well reports from the Press about other criiminal acts and Civil Real Estate cases, Lawsuits before the Court in Dubai, the UAE or other countries. Furtheron we show reports about consumer protection and human rights in the Middle East. Actual Topics about the Unrest in Middle East. The information comprised in this section is not, nor is it held out to be, a solicitation of any person to take any form of investment decision. The content of this site does not constitute advice or a recommendation by us.Communications and should not be relied upon in making (or refraining from making) any decision relating to investments or any other matter. You should consult your own independent financial adviser and obtain professional advice before exercising any investment decisions or choices based on information featured in this Web site. We can not be held liable or responsible in any way for any opinions, suggestions, recommendations or comments made by any of the contributors to the various columns on this Web site nor do opinions of contributors necessarily reflect those of us.In no event shall we be liable for any damages whatsoever, including, without limitation, direct, special, indirect, consequential, or incidental damages, or damages for lost profits, loss of revenue, or loss of use, arising out of or related to this Web site or the information contained in it, whether such damages arise in contract, negligence, tort, under statute, in equity, at law or otherwise. Comment Rules: Although the administrators and moderators of 7starsdubai.com will attempt to keep all objectionable comments off this Blog, it is impossible for us to review all comments . All messages express the views of the author, and neither the owners of this Blog, nor the administrator of this Blog will be held responsible for the content of any message, comment. By agreeing to these rules, you warrant that you will not post any messages that are obscene, vulgar, hateful, threatening, or otherwise violative of any laws. The adminstrator of this Blog reserve the right to remove, edit, move or close any comment (message) for any reason This Blog content still existing media releases and comments from websites only. The information comprised in this section is not, nor is it held out to be, a solicitation of any person to take any form of investment decision. The content of this site does not constitute advice or a recommendation by us.Communications and should not be relied upon in making (or refraining from making) any decision relating to investments or any other matter. You should consult your own independent financial adviser and obtain professional advice before exercising any investment decisions or choices based on information featured in this Blog. We can not be held liable or responsible in any way for any opinions, suggestions, recommendations or comments made by any of the contributors to the various columns on this Web site nor do opinions of contributors necessarily reflect those of us.In no event shall we be liable for any damages whatsoever, including, without limitation, direct, special, indirect, consequential, or incidental damages, or damages for lost profits, loss of revenue, or loss of use, arising out of or related to this Web site or the information contained in it, whether such damages arise in contract, negligence, tort, under statute, in equity, at law or otherwise. Copyright: The copyright to the text of the blog is held by the author or link as source provided, where applicable. All images displayed are copyright their respective owners and are used either under licence or under the fair use provisions of international copyright law. The information contained in this Web site is for general guidance on matters of interest only. The application and impact of laws can vary widely based on the specific facts involved. Given the changing nature of laws, rules and regulations, and the inherent hazards of electronic communication, there may be delays, omissions or inaccuracies in information contained in this site. Accordingly, the information on this site is provided with the understanding that the authors and publishers are not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. Before making any decision or taking any action, you should consult the administrator of this website. While we have made every attempt to ensure that the information contained in this site has been obtained from reliable sources, 7starsdubai.com is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this site is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will 7starsdubai its related partnerships or corporations, or the partners, agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this site or for any consequential, special or similar damages, even if advised of the possibility of such damages. Certain links in the Web site connect to other sites maintained by third parties that may or may not be presented within a frame on the Web site. 7starsdubai.com has not verified the contents of such third party sites and does not endorse, warrant, promote or recommend any services or products, that may be provided or accessed through them or any person or body which may provide them. 7starsdubai.com has not issued or caused to be issued any advertisements which may appear on these Web sites. We do not review, monitor or endorse any third party web sites linked to Our Site and We are not responsible for the content of any web site linked to Our Site. Your access to any web site that links to Our Site is at your sole risk. We are not responsible for the information, material, products, or services contained on or accessible through such other web sites and will not be liable for any form of loss or damage arising as a result of or in connection with your visits to such web sites. Any links to other web sites are provided merely for the convenience of the users of this Site and the inclusion of these links does not imply an endorsement of the linked web sites or the content therein. In addition, you agree not to link your web site or any other third party web site to Our Site or frame Our Site as part of any other web site without Our express prior written consent. We reserve the right, at any time and for any reason not prohibited by law, to deny permission to anyone to link a web site to, or frame, Our Site. We reserve the right to withdraw Our consent at any time to a link to, or framing of, Our Site at Our sole discretion without notice. Your use of this Site and the operation of these Terms and Conditions shall be governed by and construed in accordance with the laws and regulations of and applicable in Germany You agree, acknowledge, and submit to the Court in Germany having non-exclusive jurisdiction over all and any dispute or difference between us arising out of or in connection with this Agreement. Please review these Terms and Conditions carefully before using this Site. Your use of this Site indicates your irrevocable agreement to be bound by these Terms and Conditions (as may be amended by Us from time to time). If you do not agree to be bound by these Terms and Conditions please stop accessing and using this Site immediately. Warning: We are aware that several times Cybercriminals mirrowed our Website and posted on several Forums, Website comments by misuse of our email adresses. These Cybercriminals registerd several similar looking Domains and installed several 1:1 mirrowed Websites which look like our Website 7starsdubai. We have already taken the necessary steps by filing criminal complaints against the Individuals behind this Identity theft an Cybercrime, by misusing fraudulently our Blog Identity 7starsdubai. In Search engines like Google, Yahoo, Bling and others you should always take a close view to the links. If this links do not originaly start with www.7starsdubai.com or http://7starsdubai.worpress.com/.... you will end on a faked mirrowed modificated Website. The genral Background of this Cybercriminals is a Stalking and Smear campaign, faking stories for their personal use, to discriminate Persons with the goal to destroy their reputation.
  • RSS ZDF Heute Germany

    • Untitled
    • Gabriel ruft Türkei zur Freilassung Deutscher auf
      Haft in der TürkeiSeit einem halben Jahr sitzt der "Welt"-Korrespondent Deniz Yücel in der Türkei wegen Terrorverdachts in Untersuchungshaft. Heute soll er wieder Besuch vom deutschen Botschafter bekommen.  Außerdem sind in der Türkei viele andere Deutsche in Haft. Außenminister Gabriel verlangte ihre Freilassung und rechtsstaatliche Verfahren.Vide […]
    • "Warum sollten wir Jungen nicht auch was zu sagen haben?"
      Mit 18 in den BundestagMit gerade 18 Jahren wollen Diyar Agu, Lea Laux und Floris Beer am 24. September in den Bundestag. Was motiviert die jüngsten Direktkandidaten der Republik? Welche politischen Ziele haben sie und wie sind ihre ersten Erfahrungen im Wahlkampf? heute.de hat nachgefragt.Interaktiv Kandidaten-CheckVideo Jungpolitiker auf StimmenfangVideo Y […]
    • Meine Direktkandidaten für die Bundestagswahl checken
      Bundestagswahl299 Plätze im Bundestag sind über die Erststimme zu vergeben. Da in jedem Wahlkreis mehrere Kandidaten antreten, bewerben sich über 2.400 Direktkandidaten. Welcher von ihnen vertritt am ehesten meine Ansichten? Wem kann ich meine Erststimme geben? Hier kann der Kandidaten-Check helfen.Interaktiv Kandidaten-CheckVideo "Wähl mich!"Video […]
    • Machen Flüchtlinge Urlaub in ihren Herkunftsländern?
      #ZDFcheck17Eine Meldung aus Baden-Württemberg sorgt für Aufsehen. Zahlreiche Flüchtlinge hätten seit 2014 angeblich Urlaub in ihren Heimatländern gemacht, darunter auch Iraker und Syrer. Bei genauerer Betrachtung zeigt sich: die Meldung ist überzogen.Video Machen Asylbewerber Heimaturlaub?Video Integration - aber wie?
    • Trump für Truppenaufstockung in Afghanistan
      Kampf gegen TalibanAbzug hieß die Devise von US-Präsident Donald Trump im Wahlkampf und darüber hinaus. Nun gibt es eine überraschende Wende in seiner Afghanistan-Politik. Kein Abzug, sondern Aufstockung der Truppen sieht er als Lösungsweg an. Am Ende könne sogar eine Lösung mit den Taliban stehen.Video Neue Afghanistan-StrategieVideo US-Strategie für Afghan […]
    • Hunderttausende Minen im Boden
      AfghanistanEin großes Problem für die Zukunft Afghanistans sind die militärischen Altlasten des Landes. Hunderttausende Minen schlummern im Boden und sind eine lebensbedrohliche Gefahr für die Menschen. Es könnte noch 100 Jahre dauern, bis die Minen geräumt sind. (Video)
    • Terrorzelle in Barcelona zerschlagen
      Anschläge in SpanienDie Jagd auf den Hauptattentäter von Barcelona hat vier Tage gedauert. Mit der Erschießung von Younes Abouyaaquoub gilt die Terrorzelle als zerschlagen. Die Anti-Terror-Operation der Polizei ist damit aber noch nicht abgeschlossen.Video Attentäter erschossenVideo Barcelona nach dem Anschlag
    • Mit Kunst gegen das Vergessen
      25 Jahre Krawalle von LichtenhagenDas "Sonnenblumenhaus" in Rostock-Lichtenhagen wurde 1992 weltweit zum Symbol für Rassismus und Fremdenhass. 25 Jahre später soll mit einer Gedenkwoche und Kunstobjekten an die schwersten ausländerfeindlichen Ausschreitungen nach der Wende erinnert werden.Video Krawalle in Rostock-LichtenhagenVideo Erinnerungen ein […]
    • Juristisches Tauziehen um Gefährder-Abschiebung
      Vor dem BundesverwaltungsgerichtAbschieben, festsetzen, überwachen: Für den Umgang mit islamistischen Gefährdern mangelt es nicht an Möglichkeiten. In der Praxis laufen sie aber oft ins Leere. Zwei Abschiebungen aus Niedersachsen prüft jetzt das Bundesverwaltungsgericht.Video Mehr GefährderVideo Abschiebung ohne VorwarnungVideo Gefährder-Haft in Bayern […]
    • Russischer Theater-Regisseur verhaftet
      Nach Pass-EinzugSchon seit Mai haben die russischen Behörden seinen Pass eingezogen. Nun wurde der russische Theater-Regisseur und Regime-Kritiker Kirill Serebrennikow verhaftet.Video Festnahmen in RusslandVideo Proteste in Russland
    • Ischia: Tote und Verletzte bei Erdbeben
      ItalienIschia ist eine beliebte Ferieninsel vor der Küste Neapels. August ist Hochsaison für Touristen. Ein Erdbeben der Stärke 4 hat das Urlaubsidyll in einen Alptraum verwandelt. Mindestens zwei Menschen starben. Viele wurden verletzt.Video Zwei Tote bei Erdbeben
    • Im absurden Dschungel der Konto-Gebühren
      Kritik von Stiftung WarentestGeldverdienen ist in der Zinsflaute nicht einfach für Banken und Sparkassen. Die Zeche zahlen oft die Kunden. Stiftung Warentest kritisiert teils "absurde" Gebühren.Video Banken erhöhen GebührenVideo 2007 startet die WeltfinanzkriseVideo EZB: Weiterhin Nullzinspolitik
    • Ringer Frank Stäbler gewinnt historisches WM-Gold
      Weltmeistschaft in ParisFrank Stäbler hat als erster deutscher Ringer WM-Gold in zwei verschiedenen Gewichtsklassen geholt. Der Weltmeister von 2015 in der Kategorie bis 66 Kilogramm gewann in Paris den Titel im griechisch-römischen Stil der Kategorie bis 71 Kilogramm.
    • Ein eiskaltes Jahr im Dienst der Forschung
      Tiefsee-Roboter "Tramper"Roboter, die im Auftrag der Wissenschaft mutterseelenallein ihre Runden drehen - vom Mars kennt man das. In der arktischen Tiefsee ist das noch neu. "Tramper" ist dort seit einem Jahr unterwegs. Jetzt soll er geborgen werden. Niemand weiß, ob er noch funktioniert - und was er mitbringt.Video Abenteuer Tiefseeforsc […]
    • Tattoos im Gesundheitscheck
      Jäger & Sammler"In Deutschland ist mittlerweile jeder Zehnte tätowiert, bei Jüngeren sogar jeder Vierte - Tendenz steigend! Die Szene ist sehr unreglementiert - jeder darf tätowieren! Es gibt keine klaren Regeln für Beruf oder Farben. Gesundheitliche Risiken sind nicht ausgeschlossen. Jäger&Sammler macht den Check."
    • Bizarrer Streit um Affen-Selfie
      Im Rechtsstreit mit PETAEin Makake, der Selfies knipst, ein Naturfotograf, der sich in den Ruin getrieben sieht und eine Wissenschaftlerin in Handschellen: Der Streit um das Urheberrecht eines Affen an seinem Selfie sorgt für Aufsehen. Endet der Rechtsstreit in den USA bald?
    • Untitled
    • Bundesgericht entscheidet über Abschiebung islamistischer Gefährder
      22.08.17 11:59 | Das Bundesverwaltungsgericht entscheidet heute erstmals über die Abschiebung islamistischer Gefährder. Die beiden Männer waren vom Landeskriminalamt Niedersachsen als Gefährder eingestuft und im Februar bei einer Razzia in Göttingen festgenommen worden. Das niedersächsische Innenministerium ordnete die Abschiebung der Männer nach Algerien so […]
    • Brexit: Vorschläge für grenzüberschreitende Zivilklagen
      22.08.17 11:40 | Großbritannien will heute Vorschläge für grenzüberschreitende Zivilprozesse nach dem EU-Austritt vorstellen. Das kündigte das Brexit-Ministerium in London an. Die Vorschläge sollen demnach Verbrauchern und Geschäftsleuten für die Zukunft Sicherheiten geben: zum Beispiel zur Klärung von Scheidungsmodalitäten bei Familien, die in verschiedenen […]

Dubai`s Business Culture in Question – A Business Culture of Keeping Quiet

Posted by 7starsdubai on March 11, 2009


original published 11 Mar 2009

Being a business journalist has never been easy in the notoriously tight-lipped UAE. But will investors tolerate Dubai & Co’s culture of keeping quiet amid a global financial crisis, asks Dana El-Baltaji for Arab Media & Society.

A few months ago, I conducted a small experiment. I sent out emails and faxes to over ten companies in the GCC, asking the investor relations officers to reply with information on their disclosure policies.  I wanted to see how many would send me what is widely regarded as public information. I got exactly one response, and it was the wrong one. The officer sent me his company’s brochure. The experiment was a total failure.

But it proved something that I and many business journalists already know: Companies in the GCC, especially private and government-owned corporations, are not forthcoming about their company details.   This can include anything from earnings statements, to information on layoffs, new hires, or, as I discovered, their guidelines on what data – if any – to make public.

As a business journalist, all I need are numbers and the occasional interview to write my story. Without them, I’ll have to rely on rumors, outdated information or one of the press releases that flood my inbox to write on the UAE’s companies. Or if I’m lucky, I can rely on a friend who’s willing to leak information about her company in exchange for a free dinner (seriously).

But getting a hold of figures is a problem. And while some say it’s only a transparency issue, I disagree. It’s also a censorship issue, albeit an indirect one: companies’ lack of transparency means they don’t need the government to censor business news, because the necessary information isn’t available in the first place.

Journalists, then, rely on rumors. And as one PR executive at Nakheel told me a few years ago, local companies don’t respond to rumors.

In fact, local companies respond to very little. They have a culture of keeping quiet about big news, including arrests, layoffs and the cancellation of major property developments.  But there’s only so much negative news they can hold back from the public, especially now during the financial crisis, when the “Dubai dream” appears to be frying in its own oil.

A Culture of Keeping Quiet

Secrecy isn’t just a corporate phenomenon; it’s a national one. Many Emiratis don’t like to talk about their companies, their families, their society or their culture. They keep information to themselves across the board, which is why many expatriates living in the UAE know very little about their host country.

I decided, then, to look into the issue of national identity, and how it can lead to a lack of transparency in the corporate world. My research began with a meeting with Aisha Sultan, an Emirati writer and columnist, and part-time manager of political programs on Dubai TV.

Frankly, she caught me off guard. I was expecting to meet a woman who didn’t really want to talk about Emirati society, but felt she needed to. I was ready to coax her into talking, and warm up with small talk. Instead, Sultan, told me where to sit, positioned by dictaphone and told me to get rolling. She had grocery shopping to do, and she had a lot to say. “Let’s begin,” she said.

Sultan agreed to meet me to discuss the challenges the UAE is facing with its national identity. She also agreed to explain why, in spite of being one of the most visible cities on Earth, Dubai refuses to discuss societal, corporate and governmental issues in public.

“Our problem,” she explained, “is that our heads are stuck in the tribes, and our bodies are in the state. We don’t know who we are.” In the UAE, the challenges Emiratis face in determining their national identity is a basic one, a struggle to reconcile tribal and federal identities. Many Emiratis still identify with their tribe, and not with the state, causing more complications when determining what defines the UAE’s national identity. Interestingly, even among themselves, Emiratis do not reveal too much information about their families, businesses or their personal lives.

The national identity issues are further compounded by the presence of millions of foreigners in their country; according to reports, the UAE is made up of roughly 90 percent foreigners, although some government estimates are between 80-85 percent. Either way, Emiratis are a minority. And like most minorities, they tend to self-segregate and are increasingly worried about keeping their traditions and customs alive.

More importantly, however, the lopsided demographics have led Emiratis to feel at risk of losing their power over their nation. Consequently, they are not forthcoming about the UAE’s real population, and the government’s websites have outdated, and some say, inaccurate statistics about the nation.

“We don’t say anything,” Sultan adds. “We don’t talk about anything, and anyone who does is silenced immediately. It can be about something trivial, but because it has something to do with Emiratis, it’s not ok to talk about it. Even if it’s business.”

Not surprisingly, Emiratis’ unwillingness to disclose information about themselves has translated into being overprotective of data and figures. It’s a culture evident in corporations and the local government.

Disclose at Your Peril

Under current Emirati law, public companies must disclose their annual (and sometimes quarterly) results. In the future, they will also be obliged to publish their corporate governance practices.

Private companies, however, don’t need to be forthcoming, especially the multi-billion dollar, headline grabbing variety. Why? Because in the UAE, there are two types of big, local businesses: family companies, and government-owned corporations. They rely on their own credit to finance their deals and operational costs. Therefore, they have no obligation to disclose their financial dealings, how they practice corporate governance and whether they had a profitable year because they don’t need our money.

In fact, it’s their right to be as opaque as their tinted car windows. As one businessman — who wished to remain anonymous — told me at the World Economic Forum (WEF) in Sharm El Sheikh, 2008: “It’s my business. No one can tell me how to run my business.”

The result of this approach is twofold. Professor Ludo Van der Heyden, a specialist on family businesses at INSEAD, a leading business school in France, explains: “It is difficult for people outside the [family] system to get in. Firstly, [outsiders] don’t understand the system, and secondly, they’re not invited in.

“One of the key principals in good governance is to have a good level of transparency and clarity,” he adds. “But what is clear to the family is not clear to outsiders. And they don’t want to be clear to outsiders.”

Consequently, private corporations, both family and government owned, are regarded with suspicion. And, not surprisingly, journalists can only assume that the corporations’ accounting books must read like best-selling fiction.

But Nabil Al Yousuf, executive president of the Dubai School of Government, has another explanation: “I think that the fact that we don’t have a tax regime means many companies are not asked to disclose their financials. Actually, this enforces that culture of being completely closed when it comes to information. There is this fear that if we disclose too much information we will be asked to pay taxes, or we will be asked to contribute[…]. So we just keep our numbers to ourselves as much as possible.”

But it isn’t just the numbers businesses are secretive about. They don’t reveal layoffs, arrests, deals, and how the corporations are run. And in the UAE, suspicions are further compounded with the power only a handful of families have in companies throughout the nation. There are some chairmen, like Emaar’s Mohamed Ali Alabbar, who are on the board of over 20 companies.

In the UAE, corporations do business with people they know, like family members. Multi-million dollar deals are agreed over cups of coffee and handshakes. According to the businessman I spoke to at the WEF, it’s how business is done in the region: “The local culture and the social norms are big factors here; businessmen cannot simply ignore them because they do not exist in the West.”

“We do business a certain way in the GCC; we have always conducted business this way, and there is no need to change it. Especially when you consider how few of us locals are working in the GCC. If I want to do business, I am bound to do business with a family member or an old friend. It’s not only because it is the way we have always done things in Dubai, but also because there are so few of us. It’s bound to happen.”

Blurring the Line

The insular Emirati commercial elite have also done extensive business with the government. They helped the federation build the UAE from scratch, forming long-lasting business ties and friendships with rulers and ministers. Ultimately, such close relationships blur the lines between the government and corporations, which is a point of contention for Aisha Sultan : “Why is the government and the corporate world so intertwined in the Emirates?” she asked. “Where in the world is this acceptable? Doesn’t this vagueness cause a conflict of interests?”

Indeed it does. Interestingly, the UAE government agrees. In the first week of December 2008, it released a law forbidding government ministers from conducting “professional work, commercial, financial or any trade deal with the federal government or local governments while on duty,” the official news agency WAM reported.

The law doesn’t do much to separate the state from the corporate world, but it’s a start.

Unfortunately, it’s a slow and late start. Ever since the real estate bubble burst in Dubai in September 2008, and soon after the arrests of Zack Shahin, former-CEO of Deyaar, Saad Abdul Razak, the CEO of Dubai Islamic Bank and Rifaat Othmani, the former VP for finance structure at Dubai Islamic Bank, investor confidence in Dubai’s and the UAE’s offerings plummeted. Ultimately, there are factors in the way business has always been conducted in the nation that need to change in order to restore investor confidence.

As credit dries up around the globe, investors in Dubai no longer trust the seemingly wild ambitions that local companies have for the nation’s future. And while local, private and government owned corporations might not need investor cash to stay afloat, Emirati businesses do need consumers to buy their products, tourists to fill their malls and hotel suites, and mental investments in their “vision” to sustain their image as an oasis of growth.

And because the Emirates was successful in attracting thousands of foreign investors who are used to dealing with companies that disclose their financial and corporate details willingly, it needs to give them what they want: an understanding of how local companies operate and how they are financed.

Assuming the Worst

Local companies’ lack of transparency has resulted in negative reports in the media that may blow market realities out of proportion, like news of dramatic drops in property prices in ‘hot’ locations like The Palm, Jumeriah. As many journalists know, one negative report — baseless or otherwise—  will instigate others, until finally enough negative press is written about a subject to shake investor confidence further, leading to more losses.

The irony is that because the UAE’s biggest companies are family and government owned, and because they are funded by federal and private capital, and (typical of family and government businesses in the region) have relied very little on credit, many companies in the Emirates have been relatively unaffected by the credit crunch.

In fact, according to Professor Ludo Van der Heyden, the credit crisis has exposed the strengths of family businesses: “The first reason is that families don’t like credit. They like equity. They don’t like heavy borrowing. They don’t have much debt,” he explains. “Secondly, family businesses like to understand what they are investing in, so they don’t like these financial instruments that are in trouble today. So, I think that private firms and family firms will come out of the crisis just fine.”

This isn’t to suggest that the UAE economy will remain unharmed by the credit crisis. What it does suggest, however, is that if companies were more forthcoming about their facts and figures, and investors had more confidence in the nation’s businesses and developments, the Emirates would not be losing as many investors as it is today. They’d know that the nation’s corporations have strong foundations, and that, in spite of the world economic meltdown, the UAE won’t go under.

Ultimately, what it all boils down to is transparency and accountability, and the perception that corporations in the UAE don’t respect the two. Without public disclosure of information, whether it be financial or managerial, journalists and the public are likely to assume the worst of any corporation. Who wouldn’t?

Advertisements

Sorry, the comment form is closed at this time.

 
%d bloggers like this: