I thought this was an interesting article talking about Dubai. Here is the article first published by Oxford Business Group (OBG), the global publishing, research and consultancy firm.

*This article is copyright of Oxford Business Group 2018. Published under permission by OBG www.oxfordbusinessgroup.com.

22 Dec 2017

Increased activity in trade, tourism and construction paved the way for another year of growth in Dubai, with momentum expected to continue through 2018 as the emirate’s preparations for Expo 2020 shift up a gear.  

The corruption scandal in Saudi Arabia continues to run and run. While prominent Saudi princes and businessmen are arrested, Prince Al Waleed Bin Talal, one of the richest men in the region said to be worth $16 billion, there are stories that they will give part of their holdings to Crown Prince Mohammad Bin Salman (MBS) who is calling the shots . Is this really a purge on corruption or a power grab?

 In some of the reports, US mercenaries, who provide protection for MBS, are reportedly holding the hostages. In another report, Americans are also being held in the round up.

This is the link.

http://www.dailymail.co.uk/news/article-5215505/Saudi-prince-detained American-businessmen-crackdown.html

This is the news story in the Daily Mail (UK).

I'm curious to learn how the imposition of 5 per cent VAT from New Years' Day will affect the cost of living in Saudi Arabia and the UAE. I can't say I know what will happen in Saudi, since I have not lived there, but it won't be easy in Dubai. The governments have talked about introducing VAT for some years (Indeed, I wrote in July how the governments have been talking about introducing VAT for the past 10 years) but the fall in oil prices has meant that talk has now become reality.

 In Dubai, the cost of living is already expensive, especially rent and food. When it comes to utilities like electricity, the fee (bill) can vary widely from month-to-month and it doesn’t appear to be rooted in reality. When 5 per cent VAT is imposed, what will this mean for the actual bill? Of course, the higher the bill, the higher the VAT that will be imposed.

 I might be sceptical, but that sceptism is rooted in reality.

 I found this article about VAT, which does explain it all.

By ASSOCIATED PRESS and IAIN BURNS FOR MAILONLINE

I’ve just been listening to a debate on Al Jazeera TV (English) between an Israeli, an Arab representative and a lawmaker at the EU on a number of topics namely about President Trump’s recognition of Jerusalem as the capital of Israel, Iran’s nuclear ambitions and the US withdrawal from the Paris Agreement (although the latter was scarcely covered because the other two took up most of the time).

 The first issue- that is President Trump’s recognition of Jerusalem as the capital of Israel- is amazingly complicated, albeit interesting. I have my own take on if and how peace can ever be achieved between Israel and Palestine having been in Bethlehem for a conference, and traveling into East Jerusalem from there. What an experience. I learned a great deal.

 So I was interested to read this article that that originally appeared in the Financial Times and thereafter as a Brookings Brief.

 https://www.brookings.edu/blog/markaz/2017/12/08/donald-trumps-jerusalem-move-may-prove-too-clever-by-half/?utm_campaign=Brookings%20Brief&utm_source=hs_email&utm_medium=email&utm_content=59227578

 Martin Indyk explains that President Trump's speech recognizing Jerusalem as the capital of Israel did too little to fulfill the annexationist appetite of Israel's right wing, while it also left Palestinians and their Arab and Muslim supporters deeply dissatisfied. This piece originally appeared in the Financial Times.

Hospitals. They’re exhausting, probably because there are so many sick and dying people. On top of that, there’s all that equipment designed to monitor people and make them well again.

It’s because I’ve been visiting the Intensive Care Unit (ICU) at the local hospital, where it is known as the Critical Care Unit (CCU) that I haven’t written anything for a few days.

 Travelling up and down to the hospital, and sitting there for a few hours each time, three times a day is, to say the least, exhausting. It’s hard to believe that’s the case when you’re doing nothing- but all those sick and dying people sap the energy. I now believe in energy chakras.

 The surgeons, doctors and nurses are great. They seem to come from all over the world- from Scotland, India, England, the US and Saudi Arabia.

Workers’ rights in the Arab Gulf countries often come in for criticism, especially from organisations like Amnesty International and the International Labour Organisation. It’s true. The rules are abhorrent but often the criticism that is lurched at say Qatar is almost as true of the other Gulf countries.

 But with the ongoing dispute between Qatar and four other states- Saudi Arabia, UAE, Brain and Egypt- Qatar has even more interest in ridding itself of the “kafala” system. Under this system a local citizen or local company (the kafil) must sponsor foreign workers in order for their work visas and residency to be valid. This means that an individual's right to work and residence in the host country is dependent on the employer, rendering millions of workers from South Asia and elsewhere vulnerable to exploitation.

 Even though Qatar is in the line of fire, mainly because it is hosting FIFA 2022, other Gulf countries also use this system. In the UAE for example you must have a sponsor to reside in the country and you can change employer (without permission) if you are in, or are going, to a free zone. That wasn’t always the case.

 And when I was living there, the employer still took an employee’s passport; if not (as was the case with me since I refused to hand over my passport) the employer takes the employee’s ID card instead. I was also know of one person who had to finish her contract (she was Swedish) before she could leave the country. This happened in September.

 In Qatar it can be impossible to change jobs, if the current employer doesn’t allow it. I know one person- a Canadian citizen- to whom that happened. She had to flee the country. This was in 2013.

The war in Yemen wages on, seemingly without end. And if the Saudi-led coalition doesn't let humanitarian aid into the country there will be a huge famine. Saudi Arabia is fighting the Houthis, which dominates the government and is Iran backed. Saudi Arabia, which is Sunni, wants to be the dominant force in the Middle East. At the moment, it is waging a proxy war against Iran and is failing. It has not achieved the gains it hoped it would by backing the rebels in Syria; Bashir Assad, who is backed by Iran is still in power. The next country on the cards is Lebanon and in a delicately balanced government between about 14 different religions, where the Prime Minister is always a Sunni, Saudi Arabia has caused chaos by insisting that the Prime Minister, Saad Hariri, resigned. Saudi Arabia wants to wage war against Iran-back Hezbollah which certainly dominates in the South of Lebanon. (The photos are from there). This article in Arab Digest explains well what is happening in Lebanon.

Summary: resignation of Prime Minister Hariri less a Lebanese affair than part of the Saudi obsession with Iran (backed by Israel but not the US). Poor Lebanon will pay the price.

On 4 November the Lebanese Prime Minister Saad Hariri announced his resignation. He made the announcement in Riyadh, saying that there were covert plans against his life. In language more characteristic of Saudi than of Lebanese politics (he is a dual Lebanese/Saudi national) he accused Iran of creating in Hizbullah a state within a state; “I say to Iran and its allies – you have lost in your efforts to meddle in the affairs of the Arab world... [the region] will rise again and the hands that you have wickedly extended into it will be cut off.” An AP report comments that “Saudi fingerprints were seen all over Hariri's resignation.”

As we commented in a posting of 3 November 2016 the Lebanese political game is played by rules laid down over seventy years ago in the National Pact. Since Ottoman times the population has consisted of a wide palette of minorities, Maronite Catholic, Greek Orthodox, Sunni Muslim, Shia Muslim, Druze, not to mention Armenians, Kurds and others. The president is a Maronite, the prime minister a Sunni, the speaker of parliament a Shia, the army commander a Druze, and so on. Minority communities include differing political or tribal elements, so that both the governments and the oppositions have been mosaic coalitions. This unique system has given Lebanon prosperity and stability, interrupted from time to time by external forces and events, Palestinian (refugees in 1948, PLO from Jordan in 1970), Syrian (multiple intervention from 1976 to 2005, now 1.5 million refugees), Israeli (various wars, occupation of the mainly Shia south from 1982 to 2000).

In 2005 the long serving Prime Minister Rafiq Hariri, father of Saad, was assassinated. Hizbullah was accused (not only Hizbullah), but the investigation got nowhere. After long conflict and confusion the present government under President Michel Aoun was formed a year ago. As we commented on 17 March it resulted from a deal with Hizbullah. Originally formed to resist the Israeli occupation, Hizbullah represents the Lebanese Shia community as well as being the most powerful military force in Lebanon. Supported by Iran it has played a major military role in the Syrian civil war in support of the regime.

There's been a lot of talk recently about the Balfour Declaration since November 2 was the centenary of that document.  This date was when Israel obtained land in Palestianian territory. The outcome depends on whether you are an Israeli or a Palestianian. Here 's what was written in the Arab Digest.

Summary: debate in Parliament produces nothing new. Among many comments on the centenary a new Balfour Centenary Declaration supported by MPs from all parties and many others.

As expected (our posting of 20 October) the approach to the centenary of the Balfour declaration, today 2 November 2017, has produced much comment. The British and Israeli prime ministers are expected to speak at a commemoration banquet tonight. The Foreign Secretary Boris Johnson made a statement in Parliament on 30 October which was followed by a brief debate. Emily Thornberry, Shadow Foreign Secretary, argued that “With the empty vessel that is the American President making lots of noise but being utterly directionless, the need for Britain to show leadership on this issue [Palestine] is ever more pressing”. Johnson stuck to the well worn position of using the USA as a human shield: “the US Administration have shown their commitment to breaking the deadlock, and a new American envoy, Jason Greenblatt, has made repeated visits to the region. The Government will of course support these efforts in whatever way we can… we need them to be in the lead… we see the most fertile prospects now in the new push coming from America… ”

All parties represented in Parliament are now committed to recognition of Palestine as a state except the governing Conservative party (and presumably their coalition partner the Northern Irish Democratic Unionist Party), whose intention is clearly to wait for America.

On 31 October a Balfour Centenary Declaration, see below, was launched in Parliament by Richard Burden MP (Labour), Lord Cope of Berkeley (Conservative), Dr Philippa Whitford MP (Scottish National party), and Rt Hon Tom Brake MP (Lib Dem), signed by over 60 distinguished people including members of Parliament from the four main parties. We are grateful to Vincent Fean, former British ambassador and former consul-general in Jerusalem, for the text from which he spoke to an audience of over 1000 at Westminster Central Hall.

There is so much happening in Saudi Arabia right now, and not just the meetings with Donald Trump and his clan. Oil, the Saudi ruling family and Islam are all showing signs of cracks. Certainly, Saudi Arabia is not how it used to be. Explaining this is Andrew Critchlow, who spent a long time in the Middle East, (when I was there). He went to the UK and was working with Thomson Reuters.

Three main pillars bind Saudi Arabia together: oil, the ruling Al Saud family and Islam. Reforms are preparing the Middle East’s largest economy for the end of a reliance on the first. But they could have a destabilising knock-on effect on the other two.

Saudi as a modern nation was founded in 1932 by a powerful regional overlord known as Ibn Saud. Since then the family has monopolised power by doling out its vast petroleum wealth in the form of handouts and preferential business deals while maintaining an uneasy pact with an ultra-conservative domestic religious establishment. But a 62 percent slide in the price of crude since 2012 has forced the kingdom to cut benefits such as energy subsidies for the average Saudi. Buying support is about to get tougher.

The radical restructuring of the economy now being managed by Deputy Crown Prince Mohammed bin Salman – one of Ibn Saud’s many grandsons – is ambitious and not before time. The prince, widely known as ‘MbS’, last month presented the details of his Vision 2030 and short-term National Transformation Plan, with the aim of weaning Saudi off oil, which still accounts for over 70 percent of budget revenues. But although it’s a financial necessity for Riyadh to rein in a record budget deficit, politically the strategy is risky – it could prove unpopular in poorer rural tribal areas of the desert kingdom.

That would be okay if the 1000-plus princes of the Al Saud family were a unified bunch. But they are not immune to disagreements. After the death of the incumbent King Salman bin Abdulaziz, power will pass for the first time outside the direct line of Ibn Saud’s sons, which itself implies a less harmonious succession. The sudden elevation of the 31-year-old MbS, the current king’s son, looks a threat to his cousin Mohammed bin Nayef, who as crown prince is the official heir to the throne. It could also kindle resentment among the sons of previous rulers who were passed over, including those who don’t descend from the offspring of Ibn Saud’s most influential wife, Hassa bint Ahmed al-Sudairi.

This is the final chapter in the forthcoming e-book which considers what will happen when the Saudi and Egyptian regimes fall and the West’s struggle against Jihad.

The Future of the Middle East

We are pleased to announce today the publication of the final chapter in our forthcoming new e-book ‘The Future of the Middle East’, co-produced by Global Policy and Arab Digest and edited by Hugh Miles and Alastair Newton.

Global Policy is an interdisciplinary peer reviewed journal and online platform which aims to bring together academics and practitioners to analyse public and private solutions to global issues. Established in 2010, Global Policy is based at Durham University and edited by David Held and Dani Rodrik.

We would like to thank again all the experts who so kindly contributed to this project and made it a success. The completed e-book will be published on October 23rd. We will provide more information about this closer to the time. Meanwhile all previous chapters are freely available here.

Saudi Arabia is attempting to diversify its economy so that it becomes less reliant on oil. Part of the plan includes an initial public offering (IPO) of Saudi Aramco, the world’s largest oil company, valued at between about USD 8 billion and USD 10 billion.  It’s hoping to get more than that when the oil company goes public, reportedly about USD 2 trillion. But will this be achieved?

It appears that Saudi Arabia, and Saudi Aramco in particular, is scaling back its plans for diversification. It seems that it may not happen to the extent originally intended by 2020.

The problems across the Middle East just seem to get worse. How is it possible? When you're living in the region it's pretty clear that US foreign policy in particular, as well as the foreign policy of many of the European countries, including the UK and Germany, are much to blame, whether good or bad-- although foreign policy is generally bad.

This article that was published in Foreign Policy magazine back in June is enlightening. It explains why the problems are so intractable. One reason is expediency and stupidity; the other is the lack of force. Only force will bring about a solution, sort of, especially when it comes to the Israeli - Palestinian peace process. As I was told about five years ago when visiting both countries (I was attending a conference in Bethlehem) Israel will always be better off (territory wise) with the status quo than taking part in a negotiated settlement. This article appears to bear this out.

I'm working on some projects that require financing from the Middle East. It's undoubtedly more challenging than before to raise finance in that part of the world, as this article that was published on August 16, 2017 in Arabia Inc confirms.

Working capital metrics for firms have been weakening each quarter beginning from the fourth quarter of 2014.

The crash in oil prices and subsequent economic pressures have impacted the working capital performance for companies big and large, according to accounting firm PricewaterhouseCoopers (PwC).

I was amused to read this article in the the UK’s Daily Mail today. Billionaire? When I interviewed Hussein Sajwani a few years ago, he was still CEO of Damac, the Middle East’s largest private developer, but certainly not a billionaire. I also understand that at that time, the property developer had had some financial problems, and the Dubai Government helped out. Damac has always been a property developer that was too big to fail. Imagine what damage could be done to Dubai’s reputation.

When I was back in Dubai recently, Damac was advertising Trump villas, as well as his golf course. Clearly, local investors are not investing as Damac would have hoped so it is now looking further afield for investors.

There’s been a great deal of talk about fires recently- the Grenfell Tower in Kensington Borough, London and now the appropriately named Torch Tower in Dubai.

I know the building well, since I passed it most days and it was down the road from our office. Not an outstanding building, just a tall one.  And one where the rental price was high- fully furnished, good facilities (but that’s the norm in Dubai)- which was about 20,000 dirhams a month (USD 5,400 a month) for rent. Some of the people have moved back in, according to reports.

It was the second time it had caught alight within two years. It’s the external cladding that is to blame evidently. I interviewed the CEO

I’m always intrigued to read about foreigners getting into trouble in Dubai. It must be easy to think that the emirate is so “Western”. On the surface, it is. Go beneath it, it is not.

 This article about an unmarried couple having consensual sex in the UAE is shocking by Western standards. It is true. The UAE has strict laws. But it’s not nearly as cut and dry as this story might suggest.

 In the first instance, the couple did not have sex in Dubai; it was Sharjah, an adjoining emirate, which has adopted Saudi rules. There is no way anybody would have allowed any hanky panky there.

The diplomatic row between Qatar and Saudi Arabia and its allies, such as the UAE, shows no signs of abating. The latest story to come out is that the UAE is accused of hacking Qatar state media, an accusation that the UAE obviously denies.

Having been a journalist in the region for 8.5 years, I am fully aware that neither country is known for its propensity to be kind to journalists, and governments of both countries are prepared to become involved in the editorial process.

It is likely that this diplomatic argument is not only about “terrorism”. All countries involved are accused of that. It could be about money too; who has the most and will it continue? The falling oil price is not helping; meanwhile liquified petroleum gas (LPG) prices upon which Qatar is reliant are remaining steady.

The falling price of oil is not good for GCC economies, but this can’t be any real surprise? The question now is how this problem is going to be resolved in a region where there has been little attempt to diversify the economies?

Dubai, which has never been an oil-producing emirate, started to diversify earlier than other countries in the region. In this respect, the emirate has been very successful. Logistics is now the driving force behind the Dubai economy; tourism is probably number two. However, the emirate is still dependent on Abu Dhabi for its oil revenue.

The Gulf crisis –that is Saudi Arabia, the UAE and Bahrain imposing a land, sea and air blockade against Qatar is likely to be ongoing. Kuwait and Oman are remaining neutral, which is typically the case. Saudi Arabia and its allies cut ties with Qatar on June 5 and have accused it of funding terrorism- an accusation that Qatar denies. They later issued a 13-point list of demands, among them being the closure of the news network Al Jazeera, that have been rejected by Qatar.

Last week saw the reshuffle of the ruling family in Saudi Arabia, something that many observers expected to happen a couple of years ago. By Western standards, the hope, and expectation, is that the country will become more open and transparent, with a respect for human rights. For some in Saudi, there might be the same expectations, for others there may be not. The views across the Kingdom differ widely.

A couple of years ago when I was attending a conference in Riyadh (wearing the abbaya, but not the head gear) one presenter, who argued that Saudi Arabia should allow more women to join the work force, said “women are no less moral than men”.  It's a comment I have never forgotten.