Danish Clarification

The cartoon row will hopefully one day subside. News that EU Foreign Policy Chief Javier Solana visiting the Middle East to speak in person with leaders in the region can only be a good move at a time where Islam and the West exist at opposite polarities.

Having been emailed today to boycott goods with certain barcodes (which relate to specific countries), I think it worth reading the Q&A issued by the Ministry of Foreign Affairs of Denmark. I also found the Jyllands-Posten articles an interesting read. To this day, I am sure that I thought many other things happened, but I guess that is how the press can manipulate, in both directions. The whole situation is regrettable, and I hope and pray that the situation will start to calm.

Emiratisation and Education

I am not convinced that nationalising a whole job sector is beneficial for the UAE Nationals who struggle to get find opportunities in the work place. Don't get me wrong on this. I am very for giving the UAE Nationals the opportunities in their own country, but sectioning off a section of specific number of jobs neither promotes meritocracy nor sends out the right message. Of course, solving the issue is a difficult one and requires long term thinking and dedication. With numerous UAE Nationals out of work, something needs to be done. Offering some sort of benefit to companies who employ a certain percentage of staff could be an idea, as well as emiratizing levels within an organization or sector. The real reason that expats are here are to offer skills in a country that needs this expertise, and when those skills are met, it is important to fill those positions with capable UAE Nationals. I would therefore take the expenditure increase in education one step further. Joining up with international companies to offer placement schemes or work experience overseas would give the young Nationals a good grounding and expertise to come back and slot back to compete with the supposedly more skilled expat. Is meritocracy too much of an ideal to strive for?

Boiling Point

The UAE is often referred to as a melting pot of cultures. Well that melting pot is coming to the boil. You always hope that incidents such as the "Danish one" will die down, but as we speak, the demonstrations continue, most notably in Lebanon.

Media always plays a part in such debacles, and while I cant vouch for an opinion either way due to my lack of Arabic, Asharq Al-Awsat makes a shocking revelation:

Internet forums played an important role by publishing a number of stories attributed to the Queen of Denmark stating she despises Arabs and Muslims. The website alsaha.com was primarily responsible for stirring up popular sentiment. Based in the United Arab Emirates, the site is an extremist Salafi forum that discussed issues related to extremist Islam. It opposed US presence in Iraq and backed the kidnapping of foreigners. Despite the UAE government’s opposition to religious extremists, it has allowed alsaha.com to continue to incite readers through its threatening messages and al Qaeda clips. It is believed that more than 100 thousand internet users visit the site each day.

If it is true that a website such alsaha.com is inciting hatred, is based in the UAE, and nothing is being done about it, then will the UAE get officially dragged into this debacle politically?

Oh and by the way, I received this SMS from the British Embassy today:

Please be aware of the possibility of demonstrations after morning prayers tomorrow and where ever possible avoid large crowds, meeting spots, malls etc

Is this demonstration thing in Dubai becoming common place? For some reason I thought demonstrations were part of a democratic society. No matter, in any case Egypt play in the final of African Cup of Nations at 9pm, so the fickle crowds will be calm again by then.

I still worry though.

Abu Dhabi is an Emerging Global City

A couple of days ago, Forbes issued its Emerging Global Cities List for 2006 and joining Chengdu (China), Warsaw, Pune (India), Curritiba (Brazil), and Tripoli was the UAE capitial. This is what they had to say about Abbadabby:

"A kind of city-state in the mold of Singapore, this Persian Gulf archipelago hasn't experienced the same rush of foreign investment as neighboring city Dubai. But that's changing now that the Abu Dhabi government is pushing for more office and residential development. Experts expect to see less of the ultra-Vegas-style opulence that's taking over Dubai and more of the serious architecture associated with New York's Financial District. Key to realizing Abu Dhabi's faster growth is the abundance of petrodollars and a new, energetic ruler (Sheikh Khalifa bin Zayed Al Nahyan) who's actively promoting private investment in real estate."

It's always interesting to hear what the outside world think if what is going on here, and invariably it usually focuses on oil, property and opulence, even if they are not completely correct on the detail. The perception is there - we shall see if their predictions are correct.

Etisalat do not need to be worried

When the UAE telecoms regulatory authority (TRA) announced in 2005 that it would allow a competitor to the sole telecomes provider, Etisalat , the residents of the UAE clung to hope that this would allow some sort of change in service. Many professed, and still do, that they would change providers in an instant. Well, 2006 is here and the new operator, tentatively named Emirates Integrated Telecommunications Company (EITC) will launch probably H2 or Q3 this year.

What I forsee is a very similar offering in a tricky market. Going to market in telecoms is easiest within the mobile sector first, and no matter how negative anyone is towards Etisalat, let's be real here - the mobile and landline offering is pretty damn good. Mobile availability (or 'service') is always high and local call charges are very low even in the context of the Middle East market but especially in comparison to the world. There are numerous other issues that fall into the negative, such as overpriced international call charges, the banning of VoIP, restriction of some innocent web sites on 'cultural grounds', and the list goes on. The main issues that Etisalat face with regards to complaint are transparency of decision, or lack of it, some price elements and service provision in the internet and new media markets.

What we need to understand here is that EITC will go to market first with mobiles. Service will be similar and price cant get much lower. Furthermore, the TRA has a hold on price and will regulate to prevent a price war in other segments, so overseas calls will be unlikely to reduce to the extent that one would hope, at least in the short term. But also, things take time people are often reluctant to change, no matter how much they try and convince you otherwise. I think EITC will take some market and will slowly increase their share, possibly in new sign ups and somewhat on renewal.

EITC may perhaps launch their internet provision by the tail end of the year, and that should give Etisalat enough time to get their offerings into gear. But the question is this - does it really matter to them, especially in the grander scale of things? Etisalat have not hidden the fact that they wish to be a top ten proovider in the world, as far as market share. Let's be real again. That is not going to happen by staying in the UAE market. There is significant growth in other large markets of lower penetration such as Africa and the Middle East markets of Egypt, Jordan, Saudi Arabia and it is likely that Etisalat will enter some of these markets in the same way that they took a stake in the Pakistan market late last year. Expect also some other opportunistic ventures within other more competitive countires possibly in Europe. Being involved in a more mature saturated market will give Etisalat more market know how to be able to deal with their core offerings in their primary markets.

Whether Etisalat lose market share in their primary domestic market, they are not worried. They have or should have a very healthy bank account from operating as a monopoly for so long. Etisalat are more interested in long term strategy from a global perspective than losing a little ground which is a certainty that they can not change.

I look forward to seeing how the future unfolds over the coming year. Interesting times, my friends, interesting times.

Too good to be true?

Often, I am asked by people about the stockmarkets in the UAE, whether they will crash, whether it is a bubble just about to pop. While I am neither a soothsayer nor an expert dabbler in the markets, I can say this: The last three years have shown some remarkable gains. If you look at the image below, you can see what has happened to the Dubai Financial Market. Some would say that is pretty ridiculous. (the red line is the Abu Dhabi Securities Market)

But let's look a little more closely at what has happened over the past 3 months. Is that a market down turn? Is this a volatile market? I will leave it to you to judge.

To check out all the Middle Eastern markets in detail, I would recommend the Gulfbase website, where I obtained the images above, and you can analyse the UAE megastocks of Aldar and Emaar amongst others.

"You have grape flavour?"

Well hello,

The itch has been there for a while and so, after pondering on the peace pipe, I have decided to take the plunge into the land of Blog. I have been writing a newsletter for a while on all things UAE, and recently launched a site, aiming to give further information and insight. The blog will be the midway point between both - random thoughts on random issues, but all related to Abu Dhabi, Dubai, UAE, the Middle East, and Old Blighty. Well, mostly.

The future is not yet written. I may blog daily, or weekly. And I'll try to be different from expert blogs that are out there already. I hope that my flavour, the grape flavour, will provide something different.

I guess I'll smoke you later. Until then....