Archive for the ‘Media’ Category
His arrest last Thursday caused uproar in Bahrain but by the evening the minister appeared in his majlis. He then denied reports that he was implicated in money laundering operations, protesting his innocence and saying that he would carry on his government work.
A police statement said: ‘An official has been detained on charges of committing money laundering transactions domestically and abroad. The ministry (of interior) noticed the events in early 2009, and therefore monitored the official’s activities, meetings and communications closely and secretly.’
In a telephone interview with Al Arabiya TV the former minister said: ‘My dismissal is perhaps aimed at facilitating the ongoing investigation. I have the right to defend myself … and the accusations are completely untrue.’
Bahrain has long been a major regional financial centre, although in recent years that title has largely past to Dubai with its English language, multi-national regulatory system. Bahrain still operates in Arabic and under Shariah Law.
But Bahrain is the regional headquarters of the anti-money laundering watchdog the Financial Action Task Force and issued a stern anti-money laundering law in the wake of 9/11. No high profile investigations or arrests have been made since then.
The National newspaper reported today ‘local media say there have been other arrests across the Gulf, including in Kuwait and Dubai, and the network laundered money for drug-traffickers and the Iranian Revolutionary Guard, something Bahraini officials have yet to deny. Most reports say the sum laundered exceeded $12 million, though other estimates have put it as high as $80 million’.
This is almost bound to be a trial by media, and bloggers in Bahrain have been active. All that can be usefully said at this moment is that the minister concerned, who was allowed to go home after being questioned last Thursday is implicated in a major financial scandal, and doubtless further facts will emerge in due course.
In the meantime this story is bound to be the subject of a myriad of conspiracy theories and ill-informed speculation. But in this case the truth may yet trump any fiction.
When statistics appear that are totally out of synch with general opinion there are questions to be asked. What then are we to make of the 7.6 per cent growth in the population of Dubai in 2009 to 1.77 million now claimed by the official Dubai Statistics Center?
Lest we forget 2009 was the year that the biggest contributor to Dubai’s GDP, construction and real estate, crashed in spectacular style. The city is littered with half-built construction projects whose work forces and management have been sent home.
Real estate crash
The once high-profile real estate agents have also packed their bags and returned to their home countries. True the population of the Dubai prison has benefited from both these sectors in the aftermath of the crash. Otherwise it is hard to see where population growth might have come from in 2009.
Perhaps the Dubai Statistics Center could provide us with more of a sectoral breakdown. Have companies in the Jebel Ali Free Zone been adding staff? What about Emirates Airline, although they did have a recruitment freeze for most of the year?
Hotels bringing in people? Possible with new hotels still opening but many more running at lower staffing levels due to a slump in tourism. The Dubai Statistics Centre data shows total hotel guests falling from 1.62 million in the first quarter to 1.54 million in the fourth.
Retail is the only sector that certainly did employ more staff with the opening of several giant shopping malls. Commercial license renewals in Dubai fell from 17,346 in the first quarter to 15,900 by the fourth, although it is hard to see if this represents a net loss or even a gain.
Who else brought people into Dubai in 2009? The Dubai Metro, well yes. Perhaps that also explains what has happened to the city’s once legendary traffic jams that have curiously vanished.
But then data published by the Dubai Chamber of Commerce and Industry showed total exports slumping by 16 per cent to $50.5 billion in 2009, the same annual percentage fall recorded by China, the world’s largest exporter, so business was definitely down.
Yet according to the Dubai Statistics Center the number of mobile telephones rose from 2.94 million in the first quarter to 3.05 million in the fourth quarter. Then again mobile phones have become so cheap and just a fashion item that multiple phone ownership is common, and this indicator is not that useful anymore.
All that can be usefully said is that the population growth claim requires some more solid evidence if it is to be accepted as a realistic figure, and any statistical organization ought to be able to back up its figures with reams of unquestionable evidence.
Warnings from credit rating agencies like Moody’s that the US and UK are in danger of losing their AAA ratings could be the final straw that persuades central bankers to jack up interest rates by a marginal amount this week.
An article on the financial website arabianmoney.net last week that cited senior banking sources as predicting a 0.25% rise in the Fed funds target overnight rate on Tuesday, has set pulses racing (click here).
But few commentators give this source much credence and the tendency is to believe the Fed and its promises of an extended period of low interest rates.
Words can always be twisted, of course. The Fed could jack up rates 0.25 per cent and still claim that it is sticking true to its word, with rates still low and expected to stay low for the foreseeable future.
The impact on financial markets would be instant. The AAA-rating would be assured and bond prices surge. Stock markets would come off their recent highs and this might be greeted as a healthy correction from overvalued levels.
Markets dislike the unexpected but they may have become unduly complacent recently believing that emergency low interest rates are an indefinite phenomenon.
All history says otherwise if only because artificially suppressing the cost of money is inflationary and unfair to those paid low interest rates. It is also bad for government debt ratings and the government has a lot of debt to raise this year.
Standby for a shock announcement from Fed chairman Ben Bernanke tomorrow night. The fear in the market today is that China is tightening but the real gorilla in the front room might be much closer to home.
None other than News Corporation boss Rupert Murdoch leads the stellar line-up of speakers at the three day event with strong representation from other global media groups. He has bought a nine per cent stake in the Saudi media conglomerate Rotana, and yesterday revealed his aim ‘to tap into Arab talent and ultimately produce original Arab content’.
At the same time Mr Murdoch urged Arab governments to ease censorship laws with the big carrot of jobs for the future. Perhaps somebody important will have been listening.
Mr Murdoch is opening his offices in the Abu Dhabi Media Park, alongside CNN and Thomson Reuters. Indeed, Abu Dhabi is likely to prove an easier platform for his media than Saudi Arabia.
Abu Dhabi has been making a big push to develop its local media, led by The National newspaper and supported by a wide range of subsidies for companies setting up in its media free zone. There has also been an associated rise in advertising spend.
Some smaller media-related firms have left the Dubai Media City for Abu Dhabi’s warm welcome. But the DMC is hardly emptying, as the problems finding a parking space bear witness, and a lot of the firms still moving in seem to be the marketing departments of large multinational companies.
Ironically enough these are the very advertising clients the media requires. And there are already complaints from some of the early residents of Abu Dhabi’s Media Park that the advertising pool in Abu Dhabi is rather small and that they have to spend all their time commuting back and forth to Dubai.
Too few stories
Journalists face a similar inconvenience. Abu Dhabi is never likely to provide a story on the scale of the Dubai debt crisis, for instance. Residents of Abu Dhabi might think that no bad thing but the media thrives on big stories as well as advertising dollars.
Is Mr Murdoch then backing the wrong horse? As the commercial hub city of the region the long-term future of the UAE media lies more in Dubai than Abu Dhabi both in terms of advertising spend and journalism.
Expect to see the Dubai media consolidate and fight back as the city bounces back from its recent financial crisis, and for the media to return from Abu Dhabi as the subsidies run out. And as Mr Murdoch has correctly noticed censorship remains a big issue in many Arab countries but not the UAE.
Could the price of gold really top $5,000 in the current bull market? ArabianMoney editor and publisher Peter Cooper became convinced that the gold price will reach this price within the next few years during a year of sabbatical travel after selling out of his Dubai dot-com.
The reasons for this prediction are in the final chapter of his latest book, ‘Dubai Sabbatical: The Road to $5,000 Gold’ published today and available exclusively from Amazon.com and through the link below.
ArabianMoney readers will be familiar with his conclusions. But for anybody considering investment in precious metals there is plenty of new meat in this analysis, and it would be a very useful summary to read before taking the final plunge.
But this is primarily a travelog about a year of traveling in some style through Asia, Australia, South Africa, Europe and of course the Middle East, and you might also find some excellent ideas for holidays as well as investments.
The places visited include: Doha, Hong Kong, The Maldives, Cape Town, Hermanus, Plettenberg, The Gold Coast, Melbourne, Victoria, Sydney, Ayer’s Rock, Perth, Moscow, St Petersburg, Wiltshire, Cornwall, London, Florence, Venice, Petra and Luxor.
Life is also about having fun, not just making money!
Qatar Airways kept up a bullish front at the Hyderabad International Exhibition and Conference on Civil Aviation yesterday. But all is not well in the emirate which last month sacked 40 staff from its high profile Qatar Financial Centre, including its brilliant PR chief Steve Martin.
The euphemistic talk is of a reassessment of budget priorities. The talk in Doha is of over-expansion without due regard to commercial good sense. And the big whisper is that gas prices are down, and that the outlook for gas revenues may be far below expectations.
Who knows how much gas the now depressed economies in the UK and USA will actually require from Qatar. Certainly the previous plans linked to far faster rates of global economic growth will have to be reassessed.
In the meantime, the huge investments in liquefied natural gas infrastructure still have to be paid for and their massive loans serviced. There has been no indication that debt is a problem just yet in Qatar. But the credit crunch has already been manifest in a slowdown in finance for local property projects, many of which are now on a go slow or have stopped.
The new airport is said to be around two years behind schedule and over budget, so planes queue up on the tarmac at the overwhelmed original Doha airport, and a new luxury hotel is bang in the flight path.
Is the order backlog from Qatar Airways therefore as secure as its executives proclaim? The airline has 220 aircraft on order worth some $40 billion. By 2013 its fleet will grow from 80 aircraft today to 120 and its network jump from 86 to 120 destinations.
Over the past five years Qatar Airways has doubled its fleet and invested in five-star service standards that are the envy of the industry. Passengers also enjoy discounted fares courtesy of gas-subsidies. The airline has never made a profit. Is this not over-expansion?
Thin commercial logic
Without a domestic tourism industry like nearby Dubai the logic for creating a massive airline based in Doha has always been thin on commercial grounds. Bringing tourists into a city creates local spending that boosts the overall value of an airline to a local economy. Transit passengers do not have the same value.
Advertising expenditure can only go so far in any business model. Ask the now sharply cutback Qatar Financial Centre that has spent many millions on some superb adverts.
No at the end of the day any business has to stand on its own two feet and make a profit. State subsidies can fund a start-up and maintain a loss-making business. Ask Gulf Air. But there is no substitute for sound business economics and that is a fact many Gulf States are now starting to appreciate.
It is not just the Bradley date in the financial astrology calender tomorrow, nor the warnings from the chart experts like Bob Prechter and Harry Dent that the end is nigh, there is also the simple flow of mood from optimism to realism to pessimism that drives markets to consider.
Global financial markets have rallied for the best part of 11 months from their lows following the 2008 crash. But the combination of excess liquidity and carefully contrived market spin that has taken the US stock market 70 per cent off its low point is almost done.
The Fed is now debating how to withdraw from near zero interest rates, always a policy that cannot last for long because of the inflation risk. President Obama leads the spin doctors but reality is closing in like a snowstorm in the North East or an earthquake in Chile.
And that reality is nothing like as rosy as advertised. It was always a bit of a long-shot. How can an economy built on debt expand when banks are being more prudent in their lending? How can a consumer driven economy thrive when saving is popular again?
We still have a moribund housing market in the USA with millions of of loan foreclosures to come over the next two years, further depressing house prices and construction activity.
Then again what of China? Again there is a reality check. The growth produced last year as a result of the biggest government intervention in the history of markets is very low quality, causing an inventory build and asset price inflation.
Liquidity powers up markets into a bubble. Then they crash when it runs out. This much we know from our history books. China’s 2009 performance is a classic liquidity bubble.
US financial markets’ optimism has been self-reinforcing with recession measures like job cuts boosting profits in the short-term. The problem is that raising unemployment levels does lasting damage to the real economy and domestic demand.
It could be that financial markets stagger sideways for another few weeks until the weight of negative news becomes too much and they take a real tumble. But bad news is greatly outweighing good news right now, so the turning point has to be very near.
Bob Prechter and Harry Dent both expect a big crash after the long rally from the lows of last March. The downside looks considerable and any upside very limited from this point. Sell!