Dubai always prided  itself with the positive coverage of international media about the Dubai feats starting with Burj Al Arab, then the Palm and the Burj Dubai. Not this time. International media is giving Dubai a hard beating and its debt default has not only affected the direct investors and the local banks, but also world stock markets for fear of another major downturn. This morning news coming from the USA says that the Dubai default has affected further the housing problems in the US and has driven the prices  down. Since the mention of the freeze of debts till May 2010 two days ago, international media are on Dubai’s case citing issues and possible doomsday scenarios for the emirate. While all this coverage touches upon the impact of such a default on the world markets and world investors and lending countries like the UK, France and the US, nothing has been said on what impact it will have on business in Dubai itself and the thousands of companies that are based here. For the past 11 months the emirate of Abu Dhabi has seen a major shift in terms of drawing a lot of Dubai based businesses looking for projects and being a part of the major projects Abu Dhabi is building, while Dubai has stayed  fairly quiet with hundreds of cranes along the horizon are standing still as if frozen in time.  Check this Huffington Post article for more details: http://www.huffingtonpost.com/2009/11/26/dubai-request-for-debt-st_n_371852.html

Following another US $ 5 billion bond from Abu Dhabi banks, Dubai asked for a freeze on debts till May 2010. Just after a series of assurances that Dubai will keep its promises and pay its debts, the announcement took the investors and economists by storm. It also created a question mark on the impact of such a request on the future of the Emirate. The news was carried by international media like the New York Times  and Financial Times which shows international interest in what is happening in Dubai and the future of this Emirate after the enormous growth it witnessed during recent years. The amount of debt due and total could reach US $ 80 billion according to certain estimates and everyone is looking to see how Dubai is going to get out of this crisis. It even sent stock markets tumbling. Read more about it here: http://www.politico.com/morningmoney/

In an email I received recently, the Finnish minister of health was talking against the intended vaccination and adamant that this whole thing is only to make the pharma companies richer and to limit the population. See for yourself. http://www.youtube.com/watch?v=nTgyakGAddM

Encouraged by the comments of a recent foreign visitor, I decided to visit Atlantis to see the Lost Chamber, the glorified name for the aquarium.  We paid Dhs 200 to enter only to be disappointed with the lack of any info about the fish, the presence of more walls than fish and to find out later that the big aquarium, which is the main attraction can actually be seen from the hotel lobby without even paying a dime. The hotel lobby and the small shopping avenue were filled with people. Most have come to see the aquarium for free not to shop or to eat. The restaurants were empty and the hosts were waiting for people who never attempted to even look at them or the venue. We parked the car far from the hotel and were taken by a shuttle bus to the hotel. In case you were thinking of Valet Parking, the cost is Dhs 150. How sad. The whole place looked like it needed some new management to really drive business.

Misleading  research leads to wrong strategies for marketing, NPD, advertising and everything else. That’s what we faced recently during a major yearly planning meeting. The biggest issue with research companies is their inability to actually question the numbers rather than simply report them.

It seems that the UAE is suffering from lack of professionalism. The head of a big local family group said  in a radio interview today that out of any 10 professionals working in the UAE, only 3 or 4 are actually so. The rest are just pausing as such.

If this is true, this means that we have a big crisis in the way business is run in the country. When there is a lack of professionals, a lot of mistakes will be made. That might also explain why the country’s growth is less than it should be and the recent issues that companies faced when the crisis hit.

To drive the point home, the presenter who was calculating  the 10% lay offs of 3600 in this local family group came up with the conclusion that it is  36 and not 360 as it should be.  He happens to be another ‘professinal’ presenting the “Business Breakfast”

During the last Lynx Awards in Dubai and apart from the ad scam, we had the chance to see the ads that won gold, silver, etc… So basically we had the chance to also judge what the judges deemed a gold variety or a silver one. The Lynx award concept starts and ends with the creativity of the ad. Now come the Effies where during the awards ceremony, a happy MC started shouting out the nominees and happy sponsors named the winners. However, what the audience got to see is bits and pieces of an ad or sometimes nothing with no proof of why it won. They did not share the ’story’ or the ‘numbers’ that made it a success. Thus there we were looking at people receiving their awards with no knowledge of why they won or what was the story ! They are called Effies because they were ‘effective’. The least they could have shared was the numbers that made them so.. A short 2 minute video could have done the job perfectly.

Just when you thought that the world economy is recovering and so should that of Dubai, few signs prove this point. The recent excitement about opening the Metro was one. However, that was overshadowed by the negative press about the frequent delays and issues that it is facing. While some might be happy that a lot of people are using the Metro, it became a victim of its own success and a project which is 75% over budget.

City Scape is being held again in Dubai in October. However, its GM declared that the exhibitors are down by 30% and that Emaar and Nakheel decided to participate although they declared otherwise before. This in itself brings some doubts and lowers confidence in the sector. It would be interesting to see what kind of success this City Scape will have.

While I could not find the latest import/export figures for Dubai ports, the one for Abu Dhabi, the Capital, showed a 58% downward trend in automotive import/export figures. This is another indication that automotive which has been a big sector in the economy has gone back to the level it were three years ago.

By the end of this year, Dubai has to pay around US$ 4 billion. Everyone is waiting to see if they are going to keep their commitments. It seems a lot is riding on this. Also, everyone is watching to see how they are going to manage the US $ 84 billion debts that they have.

There has been around 2 million visitors/tourists to Dubai. However, a report mentioned that the length of stay has shortened which means less revenue for hotels and other service sectors that cater for this segment.

All predictions point to the middle of 2010 as a time where a tangible recovery will be felt. So let’s wait and see.

The UAE has decided to take drastic measures against anyone suspected of having H1N1/Swine flu. They declared that people arriving in the UAE with H1N1 will be quarantined and their employer given the choice to cancel their employment if he wishes. Also, anyone arriving with a high temperature or flu like symptoms will have to produce a paper/medical report  stating that he does not have the disease. If not, then he will be quarantined, tested and kept away till a decision is made on what to do with him if it is proven that he is infected.

According to the latest media reports, the UAE has witnessed less than 200 cases since the start of the epedimic. Despite that the government has resorted to drastic measures to stop it from spreading.

Of course these actions will be taken only against the expatriate population and visitors and not the native one.

The question here is why give the employers the opportunity to cancel expat employees visas if they have the virus? After all it is treatable in most cases .

I got a call from one of the media reporters asking me whether I thought that the industry’s situation is getting better because they heard that an ad agency is in the process of hiring 20 people across the MENA region. In all honesty, I wish I could say yes confidently. What I could say though is that those agencies who land new business are hiring and those who are losing are letting people go. Just the way it always was. I could also say that it is not the same across the UAE or the Gulf.

Daily news about the financial sector in Dubai make the situation look not so promising. Banks are asked to boost their reserves and to embrace for the upcoming defaults on loans. Shops are giving out 50-70% discount. A car company has just announced that you can own a car by paying Dhs 30/day in an effort to boost sales and compensate for lack of lending and liquidity in the market.

On the other hand, Abu Dhabi is building a Ferrari Theme Park, museums and Sorouh one of the real estate companies there has just posted profit in the Q1 of 2009.

One thing for certain is that the public sector is trying to boost the economy by continuing with its efforts to build the infra-structure. The problem is with the scarcity of information on the economy and the financial situation in the region, one can only speculate to what comes next hoping that it is going to be positive.

What do you think?