Monday, November 30, 2009

Impact from the DW issue

I treat this blog not only as somewhere where I can express my own opinions but also as a place for conversation. I start the conversation by posting something, people join in by leaving comments, I and others respond and so the conversation goes on.

This post is an example, I'm continuing a conversation by responding to questions left on my last post about the Dubai World debt issue and the PR surrounding it. I started to answer in the comments box but it was really too long as a comment so I decided to turn it into a new post.

The question was: How do you think this will impact Dubai in the next 3 months and also, if this has just come out now, what other stories do you think will start to 'appear' that have remained hidden so far?

First a disclaimer: Predicting the future is nothing more than a guess. Whoever does it, however expert they are, it's just making a personal guess as to what may happen.

I've been asked what I think, I could be right or I could be wrong, it's only a guess, but here goes:

Impact over the next three months? Three months is a very short period. My thoughts are that we won't see much impact down here at street level in that time. Unless you work for one of the DW companies, that is. If you do then you can expect even more changes than you've experienced over the past year. But for the rest of us, no.

There is currently bad publicity internationally for Dubai on a massive scale and I'm sure that will continue, but it relates to business so I don't see it affecting, for example, tourist arrivals.

As for the financial world, after the initial and inevitable panic, and when eventually the information vacuum is filled by official, meaningful, believable statements from the authorities here, things will settle down. It will take a long, long time for confidence to be restored but it will be eventually.

In the real economy, as a result of the global downturn we, like many other places, already have economic slowdown, redundancies, companies closing, invoices not being paid resulting in huge cashflow problems, a property price slump, tighter credit conditions, less spending. I don't see the DW issue making any difference to that in the short term.

The Feds are in damage control mode, taking action to limit impact on the economy in general.

There's been the entirely expected run on the local share markets this morning, when they re-opened after the Eid holiday. Dubai’s lost 7.2% late morning, the biggest drop since November 2008, and Abu Dhabi’s index was down 8.2%, the most since May 2006.

Big drops, but we've seen it before. They'll bounce back.

The Feds have announced support for the banks, the companies most at risk from the Dubai World problem, having set up a special liquidity facility for local and foreign banks operating in the UAE. They've also stated that they will support selected Dubai companies, without naming them. I assume it will depend on which ones they think are viable.

There are obviously high-level meetings going on between Federal and Dubai government officials so I expect more measures will be announced if they're felt necessary as the Feds get to the facts.

Put into perspective, ignoring the terrible handling of the issue in Dubai over the last year culminating in the new PR disaster, the root of the issue is that a company is planning to restructure its debt. That's normal business practice and if it had been handled competently we wouldn't have the problem we now have.

So in the next three months, which was the question, I don't think we'll experience any impact specifically from this Dubai World issue.

To carry on the thought, over the longer term I think the impact will be positive.

What I expect to see is a stop to the overdevelopment, especially of farcical projects which were simply not viable and were nothing to do with commerce, the lifeblood of Dubai. They're what caused the problem in the first place.

The companies in DW group will be reorganised now by someone who knows how to do it, and who according to the reports will be given the authority to carry out whatever's necessary. I assume there'll be payment of overdue invoices, a restructuring of debt and the companies left in the group will be commercially viable.

In a more general sense I think that instead of focusing on property and the speculation that goes with it the focus will go back to Dubai's tradition of trading based on its location, plus the new tourism industry. That should have been the focus for Dubai's latest development boom; they should have built the airport, the commercial cluster 'cities' and at least parts of Dubailand but not Palm Deira, Palm Jebel Ali/Waterfront, The World, the Arabian Canal for example. They didn't, they got carried away and lost focus but I'm sure it will now get back to those basics.

Politically, I think there'll also be far less independence in future for Dubai, and the other emirates, with a much stronger federal government.

On that subject it'd be interesting to know whether the complete lack of comment from Dubai authorities is voluntary head-in-the-sand or whether the Feds have said 'keep quiet and leave it to us'.

The other question was: Any other hidden stories? The normal way of dealing with bad events in this region is to do it behind closed doors, sort out the problem without letting anyone know there even was a problem. Maybe there have been others, will be others, which will be dealt with in that traditional way.

But I can't see another similar problem to this Dubai World debt thing appearing.

It's the big one. It involves the biggest companies, government related or owned, responsible for the biggest, most-publicised projects.

For months the authorities have been saying there would be no problem with meeting the commitments, the markets have been led to believe that governments were underwriting the debts. Then an out-0f-the-blue announcement that there was problem. And of course the realisation that the government had never actually said that it would guarantee company debts.

I don't think there's another one to spring on us.

Saturday, November 28, 2009

A PR disaster

On Thursday, the morning after Dubai World's bombshell announcement that payment of the Nakheel bond due on December 14 was to be delayed, I said it was "badly, badly handled all round".

An understatement.

It was actually a classic of mishandling. Business schools should use it as a case study of exactly what not to do. Of how to turn bad news into a disaster.

There's inevitably been over-reaction, with bond and stock markets plunging from Europe to Asia to the US to Australia, bank shares hammered, a flight to safe havens, damning stories all around the world.

"Nervous traders, trying to understand what it meant, caused havoc across global markets. Shares plunged, currencies were battered and billions of pounds were wiped off the value of all companies with Middle East connections. British banks, considered to be among the most exposed to Dubai, were at the centre of this new maelstrom and collectively shed £14bn in value on Thursday alone."
Daily Telegraph

An overreaction of course but panic is the natural reaction of markets to bad news. After a short period it settles down as people think rather than just act but blind panic is always the first response.

To put it in perspective the amounts involved (about $60billion) are tiny in relation to what's been going on in the world. Companies like Lehman Bros ($613billion liabilities), banks by the dozen, countries like Iceland were leveraged multiple times more than DW, making Dubai World's debts almost petty cash.

But Dubai's reputation is taking a battering because of the way the thing was handled.

Statements in the months leading up to the maturing of Nakheel's bond were that the finances were all in order, then came the terse announcement on Wednesday that payment due on December 14 would be deferred at least six months. The timing of the announcement minutes before the ten day holiday added immeasurably to the problem, causing the doubts and panic, increasing the fallout. An obvious attempt to dodge the hard questions that were bound to be asked.

The problem isn't only the admission that the commitments couldn't be met - there's still belief that Abu Dhabi will come to the rescue. The way it's been handled leads people to believe that Dubai's much-vaunted business acumen is a myth. If they can't even handle something like this competently...

I've been glancing through some of my regular reads and I'm finding:

"Released after the markets shut, ahead of the 10-day Eid holiday and the Thanksgiving break in America, the notice was designed to have minimum impact. It wasn't the Dubai government's first miscalculation.amateurish...botched messaging...episode of incompetence...the biggest debt-market cock-up...this week's events have damaged its reputation for economic competence"

The Nakheel bond has been the subject of much speculation for a year at least. It was the big test of Dubai's ability to service its debt, of Dubai's ability to run businesses effectively. In a wider sense it was also taken a representative of Islamic bonds in general.

Past months have seen senior government figures reassuring the markets. Dubai could and would meet its commitments they said.

Even earlier in the day of the announcement statements were released about Dubai raising another $5 billion from Abu Dhabi banks.

So everything was under control.

What happened?

They decided to make the announcement of what is being seen as a default at close of business.

At close of business on the eve of a ten day holiday.

Drop a bombshell as you leave for holiday.

"Dubai’s authorities have acted badly....This week’s revelations were not only unexpected; they were also delivered just as the Gulf states shut up shop for an extended holiday. This is the action of a company that seems to think that it can operate in a globalised marketplace only when it suits its purposes."
The Times

I seems it's not only investors and traders who were caught by surprise. More than one report suggests that even Abu Dhabi wasn't aware that the announcement was going to be made.

"Thursday's market turmoil appeared to take federal officials in the capital Abu Dhabi by surprise. One person familiar with their thinking said there was dismay over the reaction to the handling of the announcement."
Wall Street Journal

There are also reports that 'frantic phone calls' to government officials and business leaders were unanswered.

Naturally. Everyone's on holiday. Try again about December 6. No problem, that's not even two weeks away and everything's under control anyway.

It was carefully planned, according to the statement issued late on Thursday.

I like the column by Alistair Osborne in the Daily Telegraph on the subject:

"Why we must consider Dubai's 'careful planning' a work of pure genius

Let's be generous here. Maybe Dubai was just trying to set another record.

It's already given us the biggest building, biggest indoor ski slope, biggest shopping mall and biggest theme park. Surely, it was only a matter of time before it went for another biggie: the biggest debt-market cock-up.

The Wall Street journal says:

"For Dubai to now claim it had anticipated the market reaction to its "sensible business decision" is preposterous. Dubai stands accused of irresponsibility, incompetence and bad faith. Few will trust now anything it says."

So, a PR disaster of the highest magnitude. Unbelievably badly handled. I can't imagine what they were thinking, it shows a complete unawareness of the real business world.

It's astonishing from a city that owes its very existence to commerce. A city that's been a successful trading, commercial centre from its beginnings. Where business is the culture.

It really should, and probably will, be required study at business schools.

But it won't be the end of Dubai, in spite of what some commentators will now be saying. We've already seen some of that, plus highly critical pieces using the announcement as an excuse to come back into print, such as the latest Johann Hari piece in The Independent.

The sky won't fall in. The desert won't reclaim the city. It won't be a ghost town.

Think of it terms we've grown accustomed to over the past year. Think of it as toxic debt. It's separate from the real economy. It's like the financial markets and the real economy, they're very different from each other.

This is about the ability of one company in particular, and associated companies, to repay its loans.

Dubai has two sectors, the most important is the real economy where tens of thousands of generally SMEs are still trading, still doing profitable business. Dubai Chamber of Commerce has over 100,000 members for example, and Jebel Ali Free Zone alone has over 6,000 companies registered there.

Other large government-related companies such as Emirates Airline, Dubal, Ducab, Dubai International Airport, Dubai Duty Free are all producing excellent profits.

And of course the old established merchant family conglomerates are still going strong - Al Ghurair, Al Futtaim, Al Majid, Al Habtoor, Galadari and the others.

So business goes on much as usual in the real world. It's always been there, trundling along quietly and profitably out of the news. Dubai's history since the early eighteen-hundreds has been about being commercially successful and going on into the future that will continue.

The other sector is the fantasy world of unsustainable development. But that was a blip in the grand scheme of things for the last five or six years, for other parts of the world too, not just for Dubai - although Dubai's was more outrageous, more unsustainable than probably anywhere. That's what's dead, the fantasy world, the parallel universe, to which Nakheel was the worst contributor.

I said earlier that Dubai's culture was business, which is what I've long argued with people who've said there's no culture. People are here to work, to do business, and always have been. It's the focus of just about everyone here and it's the reason for the city's existence.

But another part of the culture is 'I must have it now' and that's been a large part of the problem. Wanting to build a city the size of Singapore in a decade.

What's actually been achieved is amazing but Nakheel in particular went far too far in too many grandiose developments at the same time. Reality went out of the window and they were off in the land of the fairies. Reality always reappears as it has now.

It's a pity the old established merchant families weren't in charge. In fact it seems with the recent sackings and sideways transfers of some big-name rising stars that the old guard is being brought in to get things back onto a more sensible level.

A huge PR disaster, damage to Dubai's reputation, damage that will take some time to repair, and a setback for Dubai's growth. But not its collapse.

You can read some of the international press I've quoted from here:

The Times.
Daily Telegraph.
Wall Street Journal.

Thursday, November 26, 2009

Shock at Dubai World announcement

The business world was expecting Nakheel to redeem its Islamic bond when it matures in two weeks.

Recent comments from Dubai government VIPs reinforced the expectation that debts would be paid on time.

So there's alarm in markets around the world since Dubai World briefly announced that it was asking creditors to defer payment for at least six months.

What a disastrous blow for Brand Dubai.

The bond has enormous significance because it's both the world's largest Islamic financial instrument and is considered the ultimate litmus test for Dubai's ability to meet its commitments.

Equally bad, the announcement was made after close of business on the eve of the Eid holiday, so now no-one's available for comment or clarification. That fact hasn't been missed by commentators either.

Badly, badly handled all round.

Commentators around the world are talking about it in disapproving terms and there's the question of whether this will be considered a default, with enormous implications for not only Dubai but Islamic bonds in general.

The New York Times says that the move demostrates that Abu Dhabi won't unconditionally bail out Dubai government controlled companies but that there has to be a genuine restructuring of the debt with the pain being equally shared by Dubai and its banks.

The Wall Street Journal talks about bankers and executives being stunned by the announcement, and says 'Dubai's efforts to deal with its mountain of debt estimated to exceed $80 billion were dealt a hammer blow.'

The Times, once one of the world's great newspapers but now reduced to near-tabloid level since being bought by Rupert Murdoch, predictably goes with the cliche 'Dubai World and properties built on sand.'

The UK Daily Telegraph headlines its report 'Dubai recovery hopes hit by debt 'standstill' call' and says that 'the credit-crunched Gulf playground, has shattered hopes of imminent financial recovery.'

The Financial Times has the widest coverage and talks about markets reeling at the announcement and acting with alarm at fears of default. Comments from analysts confirm the reaction.

There's only one positive side to the announcement and predictably the local media puts that spin on it, that Dubai World is to be re-restructured and an outside world-renowned expert is being brought in as Chief Restructuring Officer. Gulf News print edition headline, for example, says 'Dubai World gets a breather'.

The trouble is that it's the right move but it's taken far too long for the move to be made.

For nearly a year the Dubai World companies have been going through a 'restructuring'. But it's always a nonsense for the management responsible for a company's troubles to be allowed to create and preside over a restructuring made necessary because of their own policies. A Chief Restructuring Officer, an outside expert with a proven track record, was needed from the beginning of the crisis to sort the mess out. But it wasn't treated with the urgency the situation demanded.

They became bloated companies with unnecessarily huge numbers of people being paid huge amounts of money, huge duplication of job functions between the companies in the group, unnecessary competition to build the biggest, tallest.

That led to too many mega-projects all going ahead at the same time. Worse, many were pushing engineering into uncharted waters but second and third versions were being pushed ahead before the engineers had worked out how to make the first one. The Palm Islands/The World are a classic example.

Heads, senior heads that is, should have rolled long ago.

Thankfully the financial crisis put a stop to the nonsense and has forced the companies to come down to earth. Restructuring was inevitable and long overdue. It is happening but it's all taken far too long.

We're a year into the crisis before the real moves are made that needed to be made there and then.

(The Tamweel/Amlak merger is another example. The property market is desperate for mortgage providers but the two largest have been in limbo for over a year without a policy decision being made to get them back into business. And we've been told that it won't happen until next year.)

To my mind this is the biggest blow to Brand Dubai that I can recall. The one that will do the most damage to Dubai's reputation as a good, safe place to do business, as a place that understands what business is all about and knows how to conduct it.

We'll undoubtedly be seeing more of the 'Dubai collapsing, reclaimed by the desert' stories from certain commentators as a result of this announcement.

Ignore them, Dubai will survive as the commercial centre that it's been for nearly two hundred years.

But this is a huge setback.

You can read some of the comments about it here:

NYT. Dubai Fund Asks for Stay on Debt Payments.

WSJ. Dubai Debt Woes Turn Ugly After It Seeks Standstill Deal

The Times. Dubai World and properties built on sand.

Daily Telegraph. Dubai recovery hopes hit by debt 'standstill' call.

FT. Dubai shock after debt standstill call which also has links to related articles.

Tuesday, November 24, 2009

Courts, organised crime.

The complaint is the same in many countries, that the courts are soft on crime.

We get some unfathomable sentences here in Dubai - draconian sentences for seemingly minor offences and a slap on the wrist for serious offences.

I read with disbelief that a drunken, speeding bus driver who killed a motorcyclist was given a one year sentence.

We have a zero policy for drinking and driving, he was way over the limit even in countries such as the UK and Australia, he was travelling at high speed on Beach Road. He slammed into an eighteen year old motorcyclist who was, correctly, stopped at a red traffic light.

The court decided his punishment should be one year.

After the sentence Salah Bu Farousha, Head of Dubai's Traffic Public Prosecution said that they wanted : "...tough and deterrent traffic court verdicts against errant drivers and especially those who drink and drive recklessly."

He added: "We constantly appeal primary verdicts which we deem as not deterrent enough."

I hope they appeal this sentence.

There was another story that caught my attention too, a sign of the changing times in Dubai.

In one of our much-publicised new developments, International City, police raided apartments that were operating as brothels. Fifty two of them apparently.

Fifty two?!

They should rename it Brothel City.

There's a predictable sequence when gang-run operations are set up and generate a lot of money. Another gang comes in demanding protection money or tries to muscle in on the operation.

I didn't think I'd see it in Dubai but here it is.

Asian gangs, mainly Vietnamese, who were involved in running brothels in the development...were also involved in inciting violent incidents among their competitors including, murdering an Indian man and seriously injuring another at the China cluster on Friday. Both men were among the competitors involved in the same illegal operations.

The incident on Friday involved more than 20 gang members who managed to break into a brothel at the China cluster demanding money profited from running the business.

Killer driver gets a year.

Brothel City.

Monday, November 23, 2009

Dubai's road deaths down

I've noted in a few posts that, although there are still plenty of morons out there, road behaviour generally seems to be improving in Dubai.

That seems to be supported by RTA figures for 2008 which show that road deaths are down for the first time in eight years. Speed is a major factor in fatalities and I've noticed a definite slowing down since, for example, Sheikh Zayed Road's limit was reduced to 100kph.

Sadly there were 157 unnecessary deaths caused by road crashes last year, but that's better than the 180 killed in 2007.

On SZR, where the speed limit was reduced from 120kph to 100kph, the stretch between between Defence Roundabout and Interchange 5 had a dramatic drop in fatalities, down from 29 in 2007 to 10 last year.

Speed is a factor in crashes in general but it isn't just the reduction of speed limits that have helped to reduce the danger on our roads, it's much more complicated than that, as Maitha bin Udai, CEO of Traffic & Roads Agency, said.

I've noticed not only a reduction in speed but also, for example, far fewer people driving along the hard shoulder, far fewer driving aggressively and forcing their way in. That's not down to speed limits but to less frustration with log-jammed traffic. A frustrated driver is a dangerous driver. The improvement in traffic flow is thanks to the opening of so many new roads and intersections plus the slightly fewer vehicles on the roads.

There's a long way to go but at least the figures are going in the right direction at long last.

Gulf News has the story here.

Saturday, November 21, 2009

Meanwhile, back home...

"It has never been this hot, dry and windy in combination ever before," Premier Nathan Rees told reporters on Saturday.

There is no immediate threat to lives or property from 66 fires burning across NSW however, "unprecedented conditions" call for extreme vigilance, the premier says.

On Friday there were more than 120 fires across the state so the firefighters have done a huge job to halve the number.

No chance for them to relax though:

Sydney Forecast

Tomorrow 41°C

Wind NNW 26km/h

Plus dry lightning strikes. The Blue Mountains National Park, visited by around 3 million tourists a year and covering over half a million acres, was closed because of fires lit by lightning strikes on Friday.A total ban on open fires was declared in New South Wales.

The new level of 'Catastrophic' fire warning is in place for towns in large areas of western NSW.

The new highest category category was introduced after Black Saturday, when 173 people died in February's fires around Melbourne.

'Catastrophic' level is: Even specially constructed and actively defended homes may not provide shelter. Safest to leave the night before the expected fire. Under no circumstances will it be safe to stay and defend the home.

For months the authorities have been warning that this could well be the worst fire season ever and it's looking ominously as though they could be right.

But it isn't just bushfires they have to worry about.

A story from our local paper this week, close to our home an hour north of Sydney:

ANASTASIA Stead lived through many people’s worst nightmare at her Glenning Valley home on Sunday night.

Reaching out to turn off her bedlight, the girl, 14, was confronted by a 2m snake curled around her alarm clock.

The agitated adult diamond python hissed at Anastasia, who yelled to her mother for help.

I'd have yelled too.

A snake wrangler from WIRES, our wildlife rescue organisation, came and removed it...

Photo: Express Advocate

Never a dull moment in the sunburnt country.

NSW faces unprecedented conditions.

Snake alarm.

Thursday, November 19, 2009

Top Secret Kit Kats

Back to something that really annoys me, companies who have a 'No Photo' policy for something that's open to the public and has absolutely no reason to be secret.

I've posted examples in the past and I'll continue to rant as long as companies carry on with the stupidity of it.

The latest example I came across was what is promoted as the largest sweet shop in the world, Candylicious at Dubai Mall.

Outside there are two big, prominently displayed signs:

Yep, a sweet shop banning photography because...ermmmm.

What is the thinking behind it? I just don't understand.

It's a big but bog-standard sweet shop selling Kit Kat, Mars Bars and the like, some nuts, pick & mix sweets - the stuff you get in any supermarket, mall, sweet shop.

Is it a secret shop design then? Well, it's a public area so it can't be secret can it.

In spite of the design concept rationale (I'll get to that in a second) it's an absolutely bog-standard sweet shop - shelves around the walls, some island displays, coloured spots dotted around the floor.

But 'No Photography' is allowed.

Funnily enough, on October 26 Time Out published a gallery of sixteen photos, of the shop and close-ups of chocolates which are on sale there.

Here's the first shot from Time Out's gallery:

Told you, absolutely bog standard design.

You'd be surprised how often designers come up with a design, then write the rationale afterwards to sell it to the client.

Keep the picture of the shop in mind as you read what they say about it:

"Introducing a brand new concept - Candylicious combines candy and the world of imagination in a hip and fashion forward candy store. Located right infront of the aquarium, you cannot miss the vibrant colours and millions of wonderful candy (sic) from this fun and entertaining store.

Candylicious is an abstract concept representing fantasy, joy and irreplaceable childhood memeories. (sic)"

Anyone know anyone from Candylicious? If you do, please ask them what their rationale is.

They made a policy decision that they'd ban photography of their shop. Why? What do they need to keep secret? What is it that they won't allow to be photographed even though it's open to full public view?

The Time Out gallery is here.

Wednesday, November 18, 2009

To old Dubai

I went into the city yesterday so I thought I'd give the Metro another go.

I was visiting Bur Dubai and then Deira and with only a few stations currently open there was a bit of walking involved. In this beautiful weather that suited me fine, I've always enjoyed walking and I love wandering around the old areas of Dubai anyway.

I went from Mall of the Emirates to Khalid Bin Al Waleed station (better known as Bank Street or Burjuman), it took twenty minutes and cost Dh6.50. That compares very favourably with driving, especially with the parking problems in the city.

To cross to Deira I wandered down to the Creek and, as I always do, invested a dirham in an abra ride.

Like all cities around the world with old and new sections the old part of Dubai is very different from New Dubai. It's grown naturally rather than being just plonked on some empty land, so it has soul, heart.

It's all a bit jumbled and scruffy in many parts but that's all part of its charm and I always get a lift in spirits being there.

I came back from Union Station and again it's about twenty minutes and costs Dh6.50.

By the way, on the way down to the Creek I walked through Bastakiyah, which I must explore again because there's a lot more going on than last time I was there.

Interesting food available too;

Tuesday, November 17, 2009

It's here again

Am I right in thinking that Christmas is appearing in the shops a little closer to Christmas than in previous years?

Monday, November 16, 2009

Changing times

Not so long ago, seeing one of these around Dubai Marina was unthinkable. Now there are more than a few:

Not good for investors but good for tenants and for business in general. The ridiculous and unsustainable rents were killing the goose that laid the golden egg.

Sunday, November 15, 2009

A different pace Pt. 2

Construction grinds along very slowly in Australia.

Nearly three weeks ago I posted about the snail pace progress on minor work in front of our house. My friend and neightbour sent me some photographs taken on October 28 showing the work the council contractor was doing in front of our three houses - they do very small stretches at a time.

What they're doing is putting in kerbs, guttering, a footpath and resurfacing the road.

The stretch in front of our three houses was going to be finished 'in about a week'.

Today my friend sent a photograph of the Aussie workers slaving away trying to get the work finished:

He tells me they've managed, since the first photo nineteen days ago, to get the kerb and guttering laid the length of the three houses and to lay the first coat for sealing the road.

They still haven't started the footpath and they also have to build retaining walls and re-landscape the banks which they destroyed, and also replace our driveways which they dug up.

With the progress they're making I agree with my pal: "With less than six weeks until Christmas, we are wondering if this project will be completed by then."

Friday, November 13, 2009

Shhh. Keep it secret.

An interesting and strongly worded lead editorial in Gulf News today from none other than the Editor in Chief which shows a mindset I thought was on the way out.

In it he lambasts the Japanese Consul General for saying what is already common knowledge, that "Dubai companies are late on their dues to Japanese companies."

He says the CG is out of line, accuses him of violating diplomatic norms and goes as far as saying: "I urge the UAE Government to strongly condemn his stance, and summon him and his boss, the ambassador, to protest against his reckless behaviour, and perhaps the UAE should declare him persona non grata."

Ironically, it was a government-controlled paper, The National, which published the CG's remarks.

I saw no comparable editorial rant when the Financial Times ran a story about the UK's Secretary of State for Business: "Lord Mandelson has raised concerns about the failure of developers in the United Arab Emirates to pay British contractors, and has sought reassurances from local rulers that financial commitments will be honoured." No demand then that Lord M be declared persona non grata.

It leads me to suspect that the reason behind this rant was that the story appeared locally.

Local exposure goes against the old thinking of keeping the UAE population in the dark if anything unwanted is said or happens. Pointless. Those days are long gone. In the age of the internet we know what's happening, but that mindset hasn't kept up with the information age.

It really is a ferocious attack on the CG.

"Does Mr Otsuka work as a Consul General of Japan, or as an official spokesman for these Japanese companies? Perhaps the companies appointed him as their official representative and forgot to tell us.

Did the companies concerned give him a mandate to speak on their behalf, or was it just an individual effort by someone who obviously took all the wrong turns?

Personally, I don’t want to believe that the Consul General works secretly as an adviser to a Japanese company, or as a paid lawyer, which would propel him to embarrass his embassy and country. But I think the diplomat was betrayed by his ill-advised, undiplomatic comments and stuck his nose into something that is not his business. seems the Japanese Consul General, through his strange comment, has joined the orchestra that has been playing all the negative tunes against Dubai, especially in some sections of the Western media"

Actually, the reality is that dilomats and business are inextricably linked. Embassies are involved in promoting and helping their countries' companies as much as they are in issuing visas and attending cocktail parties.

Even royal families promote their countries' exports. Britain's Queen visits a country and a huge business group travels with her. Her son Prince Andrew, Duke of York, is the United Kingdom's Special Representative for International Trade and Investment.

So it's a bit rich saying that a CG is out of line and exceeding his brief, which the editorial sneeringly refers to as: ... his job, which I believe is to issue entry visas."

He also says: "So far, we have not heard from the companies on whose behalf the Consul General volunteered to speak - in the process, shooting himself in the foot."

We have.

The report in The National included a quote from the GM of Mitsubish Heavy Industries saying that MHI was awaiting payments on major contracts with Dubai companies.

A decade into the 21st century, with all the strides the UAE and Dubai have made in moving on from archaic thinking, I really am surprised at the mindset and at the ferociousness of the criticism.

You can read the editorial here. What do you think?

Thursday, November 12, 2009

Interesting weather...

A radio report this morning said Dubai is getting weather stations that will automatically alert motorists to dangerous weather.

I thought it was relevant because there was an interesting mix of weather as I drove into Knowledge Village and when I'd parked I took two photographs, a few seconds apart.

We had unusually clear blue sky:

But down at ground level the wind was swirling and the air was full of dust and sand:

Amusingly, in the dust and sand there were four joggers out running in Dubai Marina, one of them with his eyes closed to keep the dust out. You can't help wondering how they can't work out that any health benefits of the exercise are more than cancelled out by the lungsful of rubbish they're sucking in.

Wednesday, November 11, 2009

Thumbs up for the Metro

A visit to Deira was in the diary this morning and I decided to go by Metro.

It's not a novelty for me, I've used the equivalent in other cities all my life but I can understand the excitement for people who haven't experienced it.

For me it works if it gets me from A to B conveniently, easily, comfortably and gives value for money.

Credit where credit's due, the Metro ticked all the boxes.

I was also going to Mall of theEmirates so that solved one of the potential problems, getting to and parking at a station. I parked at MoE and walked through the mall to the station. I was only going to be a couple of hours so the parking was free.

In the station the ticket counter was closed but a staff member, an Emirati lady, was on hand and directed me to the Information counter, which was issuing tickets.

The current ten minutes between trains isn't too bad and I waited only a couple of minutes. Train wasn't crowded, they're clean, modern and comfortable;

The big plus is sailing along SZR relaxing and watching the motorists. Not jammed at 10am but the Defence and Trade Centre roundabouts, and of course the city itself, were very busy. The Metro is a hell of a lot less stressful.

The ride isn't the roller coaster the track suggests it will be, in fact you're hardly aware of all the ups and downs.

I forgot to time it but I guess I was in to Union/Ittihad Station in about twenty minutes. Much less than in the car, no parking problems and much more relaxing than driving.

Coming back, again the ticket office was closed - is that a cost-cutting measure I wonder? I was directed to the ticket machines, by an Emirati male staff member, who talked me through the steps. Actually it's easy enough and the how-to-use information is clear and good.

A couple of other ticks - the trains have a visual and voice information system which tells you the name of the next station, the information signage at the stations is clear, the stations have good clear local area maps - or at least there's one at Union Station so I assume the others also have them.

The staff were on hand and helpful, and it was interesting to see Emiratis in such non-executive positions, which goes against the general view of the jobs they will do.

A problem I can see in future when all the stations are open is the time a journey will take. The stations are very close together - I took this shot as we pulled into one station and the previous, currently not open, station is very close:

But that aside, it works very well and it'll certainly be my preferred transport if it goes where I need to go.

I have visitors coming in to T3 and I'd be tempted to meet them and bring them back on the Metro rather than driving - but bizarrely you can't take luggage onto the train. There's not a lot of point having a train servicing an airport if luggage isn't allowed on it.

So, there are a few things to be looked at but overall they seem to have done well.

Tuesday, November 10, 2009

Here they go again

I just don't understand the thought process.

If there is any thought.

It's something I've posted about many times, the constant digging up of work which has just been finished.

Here's an example, just one of many in Dubai Marina.

For the past couple of years they've been erecting the building. The usual thing, a messy construction site behind a tatty plywood fence.

The exterior work is finished, the fence comes down. They send in a team to tidy it all up and lay the footpath pavers.

A week after it's all finished they send in another team to dig a bloody great hole in the footpath.

Why leave it until the pavers are laid?

Why not dig the hole and do whatever they need to do while it's still a patch of sand?

Monday, November 09, 2009

Money wasted by lack of planning

Back in March/April there were several press reports of the billions owed to UK contractors by Dubai government-related companies, discussions at ministerial level etc.

Inevitably it isn't just UK companies owed money and The National has now reported that unsurprisingly Japanese builders are in the same position with billions owed to them.

I've made the point several times in the past that it's a disaster for Brand Dubai, for Dubai's reputation as a reliable place to do business, a threat to Dubai's commercial plans for the future, so I won't repeat myself.

But I will repeat myself about the huge wastage of money caused by a lack of planning. If so many billions weren't wasted there'd be more money available to pay bills.

Yesterday for the first time in a few months I drove onto Road 611 from Al Sufouh Road, over the interchange which crosses SZR.

611 is a new road, this section was finished not very long ago.

Now it looks like this:

A big section being dug up, diversions in place, a road junction being replaced by a flyover.

Population projections, tourist arrival projections, traffic density and projections were all available yet must have been ignored because what was obviously an inadequate road plan was created, approved and built.

Not only billions wasted but it causes unnecessary extra pollution, traffic jams, lost productivity and driver frustration.

All because not enough competent thought was given to planning.

And this is just one of many examples all over the city.

Japanese contractors owed billions by Dubai firms.

Saturday, November 07, 2009

Oz, land of extremes

Over the years I've often told visitors who ask about the weather, what to wear, what to look out for, that Australia is a land of extremes.

Partly the weather is different in different parts of the country due to it being a hell of a long way from north to south. The far north is way up towards the equator so is wet tropics while the far south has nothing but water between it and Antarctica.

But it's not only that, we really do get extremes at the same time in roughly the same area.

When we went back in February for a couple of weeks we flew into Sydney and then drove north into Queensland to the Sunshine Coast just north of Brisbane.

I couldn't finalise the trip until a couple of days before we were ready to go because the area we'd be driving through had floods and bushfires.

See what I mean about extremes.

By the time we were ready to set off the fires were under control. We were planning to visit friends living in Bellingen, pop 3,000, who were cut off by floodwater but fortunately the access roads became passable the day before we arrived.

The prompt for this post is that in today's Aussie papers there's news that the same areas of the mid-north coast have again been declared natural disaster zones because of flooding.

Bellingen is isolated again by floods. The Bellinger River peaked at 7.2 metres so it broke its banks, brought bridges down, cut roads.

Why do people live in such areas?

It's beautiful country:


The town had 351mm of rain in the 48 hours to early this morning - over a foot in the old money.

The access roads look like this:

Photo: Nerrida Johnson. ABC

At the same time the Rural Fire Service in NSW is listing fourteen bush and grass fires on its current Incidents List.

Thursday, November 05, 2009

Worthy Thingamy safely installed.

I wasn't aware in advance that your car won't be registered unless it comes equipped with a Trigonal Baffle-Board.

A Trigonal Baffle-Board?

Don't panic about it if your car's soon to be re-registered though, they're on sale when you take the car in for inspection.

State of the art, technologically advanced yet they cost only Dh30. And they look like this:

Well, like this when they're twisted into shape:

It's not only a Worthy Thingamy, amazingly, it Protects The Whole Shoot.

I know this from the helpful information on the box.

Tuesday, November 03, 2009

Dubai's demise

Three things prompted this post, a conversation and two experiences.

The conversation was a visiting UK businessman saying the other evening that we in Dubai are unaware of the bad situation we're in. We're not exposed to the truth as presented by the press in the UK so we don't realise that the city's economy has collapsed.


Firstly, we are of course fully aware of what the world's media says - we have access to it on the internet.

Secondly, while there's been a dramatic slowdow it's not the picture conjoured up by sections of the British press. You know the stories, tens of thousands of expats fleeing, schools emptying, a ghost town being reclaimed by the desert.

The two experiences were yesterday evening's peak time which gave us traffic gridlock on Sheikh Zayed Road, on Al Sufouh Road, in Knowledge Village.

Then walking the length of Dubai Marina I was struck by the huge amount of construction still going on. There's the constant noise of generators, machinery, hammering, shouting along the full length of the Marina.

An awful lot of companies are still doing an awful lot of business.

They jumped the gun with the obituaries.

Monday, November 02, 2009

A different pace

Back in Oz, like many other places I'm sure, we complain endlessly about the time it takes our local councils to get things done.

The slowness is even more marked when you're used to the speed of things here, where whole cities get built in three or four years.

Our neighbour has just sent us some photos of work going on to upgrade our street.

The street is more like a country lane, with grassy banks either side, has less than fifty houses each side and is about a kilometre long.

Seven years ago the council started to upgrade it with kerbs and drainage and a footpath.

Seven years ago.

We're five houses from the top and they've just reached us. You can see what's been done at the lower section, between the two cars.

They're now doing the stretch in front of our house, across three houses, which they'll have finished in about a week.

A week.

We had a cemented-in rockery full of plants on the bank in front of our house. Yesterday it looked like this:

And although we had no say in whether it was done or what should be done, we have to pay half the cost. A$40 per metre for kerbing and A$37 per sq. metre for the footpath.

Sunday, November 01, 2009

They never learn

I'm constantly amazed that in spite of being able to create and build huge projects, in an amazingly short period, organisations here can't ever seem to think about the most basic, simple requirements.

Not anything difficult, just the most basic admininstration and procedures.

I posted the other day about a major change to the flow of traffic just outside Knowledge Village, done in the dead of night so that the morning rush met a brand new road system - but no-one thought of the need to erect signs warning of "Changed Traffic Conditions".

The Metro was promoted by the brand-building 'My City - My Metro' ad campaign - but no-one thought to run a campaign telling people how to actually use the trains.

The Metro also has stations at the airport - but no-one thought that airline passengers would need to take their luggage on the train.

The National had another one in its report on the Abu Dhabi F1 race.

By all accounts they've created one of the world's best F1 racing circuits and infrastructure, and all in an amazing time-frame.

Then you get to the most basic parts, getting there and back.

They put in a whole fleet of shuttle buses - but no-one thought that they may need to tell passengers where to catch the buses or where the buses were going.

A passenger said:

"I found that while it got us there and to the event very well, there was no instruction getting back. People were getting on wrong buses, buses were going to wrong stops."

The electronic signs on the buses simply read 'Gateway', which not surprisingly confused a lot of passengers.

As usual, no-one thought of the basics in advance.

Having created chaos they hurriedly made the changes which should have been in place from the beginning:

Several changes were made yesterday to improve pedestrian traffic flow. A metal barrier separated the bus passengers heading towards the colour-coded parking zones from those heading to the three park-and-ride locations at Marina Mall, Shahama and Zayed Sport City.
The electronic signs on the buses now read Purple, Orange, Blue or Lime directing them to specific car parks.

"It’s a lot better tonight now that they have the bars filtering you into a line."

Mark Robinson, 30, from the UK, said it took him only five minutes to find a bus. The previous day getting on to a bus had taken an hour and 40 minutes, he estimated.

Organisations staffed by people from all over the world, many of them very highly paid, presumably recruited for their expertise. And time after time after time, across organisation after organisation, they get the basic simple stuff completely wrong.

The National story is here.