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Friday, 9 October 2009

Dubai: The Story of the World's Fastest City by Jim Crane: review

A photo of Rashid bin Saeed Al MaktoumImage via Wikipedia
(Complete article posted as I believe it is worthy of being read in full, as it demonstrates even-handedness is possible, when commenting on Dubai!)

Dubai’s wealth came quickly, and it got a little carried away: artificial islands, gaudy hotels and pointy skyscrapers, spectacular or tasteless as they are, according to your viewpoint. But at first, wealth brought amenities we take for granted: running water, electricity, roads. Dubai’s first electric lights were hooked up in the Sixties. It put in taps and telephones around the same time.

When the Emir of Qatar married a Dubai princess, the dowry was to pay for the city’s first tarmac road; a year later, he paid for a bridge connecting the emirate’s two halves. He probably felt sorry for his backward neighbour, which had just been taken over by his eccentric new father-in-law, Sheikh Rashid bin Saeed al-Maktoum.

The sheikh’s eccentricity was shown in his determination that though he had seen nothing of the world, the world ought to know all about Dubai. He wanted the city’s name to be on everyone’s lips and he has certainly had his way.

In the late Forties, Dubai had suffered an extended famine in which people had eaten locusts, leaves and lizards in order to survive. Yet within a few years, Sheikh Rashid had ordered the Middle East’s biggest port, its tallest skyscraper and its largest airport.

The rest is – well, not quite history because we can’t be sure how it will all turn out. By the time Sheikh Rashid died in 1991, Dubai was a commercial powerhouse, its port the most important in the Middle East. His successor, Sheikh Mohammed, extended his father’s methods, demanding ever more fantastical – some might say fanatical – monuments.

Krane is even-handed between Dubai’s critics, who point to its appalling treatment of the workers who have built the place, often lured from Indian and Bangladeshi villages on the promise of wages they do not receive, and supporters, who stand amazed at its progress, its (relative) liberalism and its energy.

“Here the sheikh simply says, ‘That flyover isn’t big enough. Knock it down and double it’, which is great,” gushes a former British ambassador. “In Britain, the planning committee would discover that some rare bat is living in a tree nearby and the whole thing would be scrapped.”

That’s true enough: the United Arab Emirates’ flora and fauna – coral reefs, rare kingfishers and oryx, mangrove swamps – are disappearing under the tide of concrete and car emissions. “The UAE acts like a spoiled child,” says Habiba al-Marashi, an environmental activist. “It’s like these brat children,” she says. “They go into the playroom and mess it up.” If anything, I would have liked to have seen Krane explore this theme further. “A government that prefers impulsive decisions to level-headed planning,” is his hesitant description.

Dubai won’t collapse. British writers may find it boorish compared with Hampstead but, as Krane suggests, for Iraqis, Palestinians, Lebanese and Iranians its attractions are viewed rather differently. It may not, though, become much more humane in its ambitions or methods. At a recent meet-and-greet, Sheikh Mohammed was asked whether he thought he had made any mistakes. He thought for a while and looked offended. He couldn’t think of any.

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Iran plans 1 bln euros in bonds in Dec

Iran plans to issue bonds worth 1 billion euros with an interest rate of 9 percent in December to help finance development of the South Pars natural gas field in the Gulf, a senior official was quoted on Friday as saying.

Iranian officials have previously announced plans to issue such bonds, but without giving a date.

"Based on the budget law, there will an issuance of 1 billion euros in bonds in December for the development of South Pars phases," Fars News Agency quoted Morteza Elahi, head of planning at the state Pars Oil and Gas Company, as saying.

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Lenders Amlak, Tamweel May Be Merged Into New Islamic Bank

Amlak Finance PJSC and Tamweel PJSC, the United Arab Emirates mortgage lenders being reorganized by the federal government, may be merged into a new Islamic bank, the country’s economy minister said.

“The final proposal is to have an Islamic bank that operates like any other Islamic lender but with a bigger focus on property finance,” Sultan Bin Saeed al-Mansouri told Dubai Television today. “The federal government will have a capital contribution.”

Amlak and Tamweel’s investors may own a third of the new bank, while the federal government and Dubai’s government may share the remaining stake equally, al-Mansouri said. The proposal, which requires approval from the Council of Ministers, may be passed before the end of this year, he said.

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Dubai May Raise $10 Billion for Fund in November (Update1)

Dubai, which set up a $20 billon fund to help state-related companies through the credit crisis, will probably raise a second $10 billion for the program in November, Emaar Properties PJSC chairman said.

“I am not sure of the date, October, November? November is a more reasonable date,” Mohammed Alabbar, who also headed the government committee evaluating the impact of the global credit crisis on Dubai, told CNN in an interview from Dubai today. Financing “will be majority government and minority private sector in my opinion,” he said.

The fund borrowed the first $10 billion by selling bonds to the United Arab Emirate’s central bank in February to help state-related companies facing problems raising cash amid the global credit crunch. Dubai, the second-biggest of seven sheikhdoms that make up the U.A.E., and its related companies earlier borrowed more than $80 billion to transform the economy into a tourist and financial services hub.

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Abu Dhabi firms may join Vietnam refinery project

Venezuela’s withdrawal from a refinery joint venture in Vietnam has opened the door for Abu Dhabi’s International Petroleum Investment Company (IPIC) to expand its portfolio of Asian petroleum assets.

The national Venezuelan oil company Petroleos de Venezuela (PDVSA) has withdrawn from the US$7 billion (Dh25.71bn) Long Son project to build Vietnam’s third oil refinery, according to the Lao Dong, a Vietnamese state-run newspaper that quoted the PetroVietnam managing director Phung Dinh Thuc.

Mr Thuc gave no reason for the decision. He said PetroVietnam, the Vietnamese state oil company, was “proactively negotiating” with a consortium of IPIC, Petronas of Malaysia and the Switzerland-based oil trader Trafigura about investing in the 200,000 barrel per day refinery development in southern Vietnam, about 100km east of Ho Chi Minh City.

SWFs to back alternative energy development

Representatives of the world’s sovereign wealth funds met in the Azerbaijan capital Baku on Thursday to discuss policy and prospects in the post-crisis environment, amid calls for greater transparency in SWF dealings, and use of their huge wealth to promote alternative energy projects.

SWF leaders reiterated their commitment to the Santiago principles, agreed under the auspices of the International Monetary Fund, for openness and accountability in SWF dealings. These had come under fire in the wake of investments by Middle East and Asian funds in western financial institutions before the onset of the global financial crisis.

The Baku meetings – held under the banner “Global prospects and local challenges” – also heard calls for greater use of SWF resources to promote investment in renewable energy sources. “I would like to see more investment in renewable energy,” said Alastair Newton of Nomura International on the eve of the Baku meetings. “SWFs could make concrete contributons in moving to a low carbon economy,” he told a Qatari newspaper.

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Postcard from Dubai

I want to see the world," I told a boatman in Dubai Creek, and pulled out my map. He waved me on board his little wooden boat with no hesitation. I could have told him I wanted to sail up the river Styx, and he would have agreed. Times are tough in the Persian Gulf emirate, and my Bangladeshi boatman had spent hours chugging up and down the creek looking for a fare. It was his bad luck that his passenger appeared to be crazy.

I repeated. Again he nodded, this time rolling his eyes slightly. He tried distracting me, asking me if I wanted to visit the Ali bin Abi Taleb mosque or ogle the colossal white yachts lining the waterfront like beached Moby Dicks. I pointed out our route — down the creek to the harbor and into the Arabian Sea. There, three miles offshore, was a cluster of 300 man-made islands shaped like a map of the globe. Each was named after a country or a city. The massive archipelago stretched across six miles and supposedly had been constructed with more than 5,000 tons of coral, making it the largest artificial reef on the planet. "See?" I said. "This is the World."
(See 10 things to do in Dubai.)

The boatman shook his head madly. "Not possible," he muttered. With sign language — the universal drawing of the finger across the throat — he made it clear that no matter how much money I was offering (and frankly, it wasn't much), he wouldn't sail into the maze of islands. The World was a pet project of Dubai's ruler, Sheik Mohammed bin Rashid al-Maktoum, and it was patrolled by security guards in fast boats. Illegal Bangladeshi immigrants and nosy foreign reporters entered at their peril.

Dubai: Is the Worst Over?

On the surface, Dubai doesn't seem as hard hit by the global recession as one might think. At 11 o'clock on a recent evening, the emirate's gigantic airport was crowded with travelers facing 15-minute waits at passport controls. Restaurants and nightclubs are filled with a cosmopolitan mix of visitors and locals.

And Dubai hasn't completely lost its old pizzazz. On a recent evening, Mohamed Alabbar, the tireless chairman of Emaar Properties, the emirate's largest real estate developer, proudly walked with visitors on the newly opened promenade around the spectacular artificial lake that lies at the foot of the nearly completed Burj Dubai, the world's tallest building. As the voice of Andrea Bocelli sang Time to Say Goodbye, colored sprays of water danced high in the air like a fireworks display. Alabbar said the fountains, which are meant to outclass a similar waterworks at Las Vegas' Bellagio hotel and casino, had cost more than $250 million. "If it makes people happy, it's O.K.," he said.

But scratch a little deeper, and there are signs of malaise. Real estate prices are down by as much as 50%, and, because the authorities are pressuring developers to finish projects they have begun, empty space is piling up. According to a recently released survey from London real estate consultancy Knight Frank, over the past year Dubai has suffered by far the steepest drop in residential property prices among 32 developed economies surveyed worldwide, down 47.3% on average. (The second-worst market, Singapore, saw prices fall 27.7% over the same period, from June 30, 2008, to June 30, 2009.)

Iraq signs deal for Rumaila field

Iraq’s oil ministry said on Thursday it had signed a deal with Britain’s BP and China’s CNPC to develop its super-giant Rumaila oilfield, a milestone in Iraq’s efforts to renew its struggling oil sector.

“The signed contract will be referred to the cabinet for approval, after which the oil ministry will hold a ceremony to announce the beginning of work by the two companies,” said Asim Jihad, a ministry spokesman.

Jihad said the deal was signed by ministry officials represented by Iraq’s South Oil Company and officials from CNPC and BP.

.Dubai World, Rothschild And Deutsche Seek Nakheel Debt Deal

Dubai World and its financial advisors Rothschild and Deutsche Bank AG (DB) are close to a deal with banks on easing part of the conglomerate's $20 billion debt burden, according to people familiar with the matter.

A plan to repay, or extend part of a $3.52 billion Islamic bond due in December for its troubled real estate unit Nakheel is at an advanced stage of discussion, the people said.

"Banks will have the option to rollover the bond for another year with higher interest or to get paid now," a senior banker working on the deal told Zawya Dow Jones. A similar deal is also being offered for some debt maturing next year, the banker said.

Emirates Airline Raises $413.7M In Ex-Im Guaranteed Bond

Emirates Airline, the Mideast's largest carrier, said Thursday it raised $413.7 million in an Export Import Bank of the United States, Ex-Im Bank, guaranteed bond to finance new Boeing Co planes.

"This transaction is very important for the industry as it represents the first offering of its kind directly into the global public capital markets," said Brian Jeffery, Senior Vice President, Corporate Treasury at Emirates.

The bond comes as Dubai's government, owner of Emirates, is struggling to ease concerns that it can service its debt pile that's estimated to exceed $80 billion.

The debt is priced at a fixed rate coupon of 3.465% per year. The secured notes are due Aug. 21 2021 and are payable in installments of principal and interest on a quarterly basis.END