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Cheeky Mandelson ignores UK debt but offers Dubai advice

with 4 comments

British Business Secretary Peter Mandelson was in Dubai yesterday warning the government to get its act together quickly to sort of the $22 billion Dubai World debt standstill. Coming from a government that has run up one of the largest national debts in modern history it is a bit much to be lecturing Dubai on debt.

According to the International Monetary Fund’s estimates of the fiscal adjustments developed economies need to make to restore fiscal stability over the decade ahead, the worst positioned nations are the UK and Japan. Both need a fiscal tightening of 13 per cent of GDP.

UK worse off than Greece

That is ahead of Ireland, Spain and Greece at nine per cent. And in sixth place, as Professor Niall Ferguson pointed out in the Financial Times, is America, ‘which would need to tighten fiscal policy by 8.8 per cent of GDP to satisfy the IMF’.

Dubai just does not come into this league. Indeed, as a part of the United Arab Emirates Dubai is a constituent city of a net creditor nation, that is to say a rare country whose debts are more than cancelled by credits held overseas, not to mention $3 trillion in oil reserves.

No wonder that Mr. Mandelson said that Britain ‘wants to be there’ for the recovery in Dubai. But it is laughable to have the architect of New Labour in Britain, and one of the men most clearly responsible for the debt mountain of the UK, to tell Dubai how to tackle its problems.

No banker or businessman

It is not as though the Business Secretary has any business or banking credentials. He is a career party man and politician and has not an inkling of entrepreneurial insight. And even his political capital is running out as his government faces annihilation at the next general election that cannot be postponed beyond June.

But where Dubai could learn from the man known as the Prince of Darkness is from his media manipulation skills. The Dubai ‘debt crisis’ that never was last December has entered the annals of PR history as among the worst examples of crisis management.

Good professional PR advice is needed in Dubai. But never make a PR man your Business Secretary – that is a sure route to national bankruptcy.

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Written by Peter Cooper

February 15, 2010 at 8:54 am

4 Responses

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  1. And whilst he is at it maybe he can also help John Terry (the Chelsea FC football capton) who is in Dubai to salvage his marriage after being caught with his pants down. This mans talents holds no bounds.

    On a serious note and reading between the lines why is he there anyway. My view is he is acting on behalf of the UK banks to whom the money is owed to. We are not talking loose change here. Can we take it that any further loses by the UK banks on these poor loans and investments in Dubai will lead to further trouble ahead for the UK banks. If so dont worry the UK tax payer will sought it out.

    Joseph

    February 15, 2010 at 8:45 pm

  2. “Indeed, as a part of the United Arab Emirates Dubai is a constituent city of a net creditor nation, that is to say a rare country whose debts are more than cancelled by credits held overseas, not to mention $3 trillion in oil reserves.”

    If they have so much money why are they unable to pay off their debts? Seems pretty simple.

    Tom

    February 15, 2010 at 6:33 pm

  3. Dubai’s Debt was built on lavish spending, creating wealth without any sophisticated legal framework, speculative economy thanks to no real economy, poor human and labor rights accord, heavily censored media. And to top all of that to compete with global destinations such as New York and London.

    To be honest, Dubai needs a lecture because the country has failed many.

    Ed Note: Dubai is not a country, it is a city. And Dubai has a splendid infrastructure to show for its spending: new airport, world’s tallest building, world’s newest metro, big new malls, world’s largest container port, etc. On these it is not competing with London or New York, Dubai is ahead.

    Narmi Usek

    February 15, 2010 at 3:53 pm

  4. Very amusing Peter and quite right. Feedback at dinner last night with Mandy’s Dubai hosts was illuminating. “Cheeky” would be an understatement; downnright rude seemed more appropriate

    One issue though. I believe Dubai did use PR men as business advisers, which is one reason for the mess in the first place.

    stephen corley

    February 15, 2010 at 11:06 am


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