December 27, 2009
FT on Gulf Censorship in business, reflexions of censorship inducing economic failure. (useful review)
Despite my delay an article well worth reviewing, as it highlights the nexus of needs for developing private sector and civil culture: Dubai crisis throws the spotlight on analysts.
As a pre commentary, the article highlights a key problem in the MENA region and in particular the Gulf with its pet press and ostentatious obsession with Praise remains: lack of critical thinking or at least public critical thinking.
It is worthwhile noting that globally, business press and business reporting - even in the USA - is not particularly literate or well informed, let alone critical. One only gets critical reporting in business issues on Big Items from Big Papers (most literately - in my order of preference - from Financial Times and from Wall Street Journal). Regional / local equivalents exists of various quality, but sadly well-informed business reporting available to the public is rare (quality subscriptions are available of course).
All this aside, the FT article is spot on (if a bit narrow in its focus on the Gulf - sadly although understandably - most MENA conversation in Anglophone media really is about the Gulf and Indoafpak lands). Some comments on the article:
First on transparency:
Abu Dhabi’s recent Dubai bail-out may have removed some of the immediate risks of default in the emirate but the saga has left a bitter taste in the mouths of many investors – and led to calls for greater transparency in the United Arab Emirates.
Dubai has admitted that it owes about $80bn, but the restructuring of the Dubai World conglomerate announced earlier this month has revealed a mass of undisclosed loans. Some analysts estimate that the emirate could owe as much as $150bn in total.
Primo, everyone suspected this. Second, the approach of dribbling out (at metaphorical gunpoint) clarifications only worsens the doubts of investors and renders the Emirates (I used that deliberately) image. Rather better to get all the known bad news out now, price it all in, and move forward.
But not if:
(i) One is in reality treating this as a "domestic affaire" and foreign (non Emirate perhaps non Gulf) creditors are secondary considerations (conracts be fucked)
(ii) One is deeply underwater relative to obligations, and believes that in short term nothing is clear.
Anyway, this is almost obvious. Stating that
The disparity highlights the fact that the official statistics and forecasts that are available are often either lacking or misleading, say bankers.verges on the banal.
If anyone believed Emirati official projections since say 2005 (and clearly some people really did - although post fact denials muddy the water) they were morons... or corrupt dupes.
This has meant that during the past year and more, the research teams of international and regional banks have proved vital sources of information and analysis.
Well that would not be my call (I would say the fucking cunts were Johnny fucking come lately useless fuckers).
Public and Private analysis that I have seen have been post facto ass covering. I will admit that a few high cost services I will not cite as I am not in the business of pimping non-public sourcing and fucking blogs (e.g. Suq Al Mal and some others would have given better insight than the faux numbers coming out of Dubai.
In any case the observation that [the] "series of negative reports produced in the wake of the financial crisis has not been welcomed by local executives and officials – who in the preceding years were accustomed to a muzzled local press and uniformly glowing reports is no surprise.
We can skip over the details of the article, although it deserves a close analysis, to a core and key observation: a relatively free and critical business press (however illiterate) is useful to have as a reality check.
No matter how stupid or illiterate they are, an actively critical press is useful in to help reign in the worst idiocies. I will try to expand on this later, but a major lesson I have taken away from my experience in investing or operating in emerging markets is that even a "yellow press" -if it is reasonably free and competitive - is useful.
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Posted by: Dubaiwalla at December 28, 2009 12:38 AM
"No matter how stupid or illiterate they are, an actively critical press is useful in to help reign in the worst idiocies.. . . [A] major lesson I have taken away from my experience in investing or operating in emerging markets is that even a "yellow press" -if it is reasonably free and competitive - is useful."
Ah, the other shoe of classical liberalism than liberal economics -- free expression. Freedom indeed really works better as a team, it's not just ideology saying that, it's utilitarian data talking.
On Dubai and such, many years ago a reporter for one of the larger news agencies told me that they ran a critical story about some local operation, agency or official there, and a phone call soon came from someone on the Inside saying darkly, "if you want to continue reporting from here, please watch what you say."
There was a self-censorship reinforced by such occasional direct intimations.
And meanwhile the blocked websites via the national IP weren't all porn and blasphemy content, alot of negative commentary and news reports were blocked.
Posted by: matthew hogan at December 28, 2009 02:47 PM