24 March, 2008

Towards a World without Walls

Today's NZ Herald carries an interesting read penned by Mike Moore, a former Prime Minister of New Zealand with a longtime interest in Foreign Affairs and Overseas Trade. As well as being a prolific author, in 1998 he also decided to run for the post of Director General of the World Trade Organisation - a position that he won after a protracted contest, and which he held from 1999 to 2002.

His column, titled: Arab states on the frontline of progress - gives a summary of his business dealings in the Middle East.

Some of his statements include interesting information.


For instance, he writes about the discussions around the UAE creating a new currency. If they were to do this, it would rank 4th in the world behind the US$, the Euro€ and the Yen¥. That's no small-time impact on the balance of foreign currencies!


Other points that caught my attention:
~ if the Gulf Co-operation Council (the GCC - made up of Bahrain, Oman, Qatar, Saudi Arabia, Kuwait and the United Arab Emirates) ever got their act together, it would be the seventh-largest economy in the developing world - twice the size of Turkey, South Africa, or Argentina. Its global savings are higher than China's, and its current account surplus on a par with China.

~ The Abu Dhabi Investment Authority is second only to the Bank of Japan in terms of assets.
~ The International Monetary Fund suggests infrastructure investment will reach $800 billion by 2010. On the respected index of economic freedom, the GCC is well ahead of Russia, China, and India. Half the GCC states score ahead of Italy.

~ Only 40 per cent of Dubai's income is now resource-based.
~ Dubai now enjoys more tourists than Egypt. (I don't know that "enjoys" would be the word that I would use to describe it!)


The article is an interesting read written by a man whose credentials and experience in Foreign Affairs and Overseas Trade make him an authority in this area.


Link to article
Mike's website - Towards a World without Walls

15 comments:

Kyle said...

The Abu Dhabi Investment Authority is second only to the Bank of Japan in terms of assets.

The ADIA’s wealth belongs to the ruling family while that of the BOJ belongs to major corporations that remain the driving force of the economy. Even if one were to go under, it would still remain afloat whereas the UAE would sink should the ADIA choose to cut loose owing to force majeure.

Hence, comparing their elastic growth to anybody does not sound fair.

nzm said...

Kyle: wouldn't the same thing happen to the Japan economy and the BOJ shareholder companies if the BOJ went under?

I would say that it would have a significant affect on the Nippon economic stability.

nzm said...

Besides, the only comparison Mike has made is to compare their number of assets, not the effect if they did go under.

B.D. said...

A bit of a long post NZM... but I would like to hold up your post as a good example of how to introduce a topic to readers on our blog. Thanks.

Kyle said...

NZM:

wouldn't the same thing happen to the Japan economy and the BOJ shareholder companies if the BOJ went under?

I suppose it’s possible if all the BOJ shareholders do the domino waltz simultaneously. However, the chances of this happening and its after-effects are far less compared to an individual (ADIA) withdrawal, owing to force majeure, per se!

Besides, the only comparison Mike has made is to compare their number of assets, not the effect if they did go under.

Well, maybe I was premature in making the going-under assessment. However, there’s hardly any comparison of a commodities based export economy’s wealth to a single family’s chunky change but then again, money talks!

Cheers :)

the real nick said...

I am not sure I get the point of this piece. It's rather dull name- and stats dropping drivel without a hint of critical insight into the reasons behind all this GCC development frenzy.

Now, no ad personam of course, but there might have been a reason why the man was Prime minister for all of two months and served only half a term as WTO boss.

(But still preferable to Micheal Moore.)

Proud Emirati said...

Actually kyle it is not clear whether ADIA is owned to the royal family or the government of Abu Dhabi because there is no visible distinction between the two.

Kyle said...

Proud Emirati:

If I'm not mistaken, ADIA and Mubadala for that matter are both owned by the Abu-Dhabi Ruling Family.

secretdubai said...

Actually kyle it is not clear whether ADIA is owned to the royal family or the government of Abu Dhabi because there is no visible distinction between the two.

Exactly - which is a major problem for your nation, when its assets are owned by private individuals rather than the actual population.

It should at least be held in a kind of "trust" for people here, but currently it is not, it is private wealth, and the same goes for Dubai.

This wasn't an issue half a century ago when there weren't trillions of dollars floating round the emirates, but now that there are, the wealth shouldn't be owned by the few "royals" who just happened to be tribal chiefs when the oil started spurting.

A hundred, even fifty years ago, there was far less difference between the ruling sheikh and the tribe. Now there are vast, unjustifiable divisions of wealther: where some emiratis live in palaces with dozens of servants purely through being born "royal" whereas others are desperately poor and really struggle.

And we all talk about the generosity of the sheikhs, and granted they are generous, but whose money are they being generous with? Was it ever really theirs in the first place?

nzm said...

The Real Nick: Mike took over as PM just before an election when the then PM resigned, knowing that his party was to face heavy defeat.

He shared the WTO position with another candidate after a clear majority could not be reached after long periods of voting and ballots. So it was agreed that he and the other guy (whose name escapes me right now) would split the term.

Sorry that you don't find the piece interesting. I do, as I didn't realise the impact on the world currencies if the UAE did decide to float a new one. Thought that others might too.

Perhaps you would like to add that insight that you find lacking? After all, the aim of posting such pieces is to create discussion.

cheers.

Kyle said...

NZM:

Sorry to barge in but I do find your response to Nick quite interesting.

There is a lot of loose talk about a Dollar de-peg, trading on the Iranian Oil Bourse in Euros and that new currency float you mention here.

From a strategic point of view, their eventuality is linked to the geo-political scenario in this region.

the real nick said...
This comment has been removed by the author.
the real nick said...

@ nzm,

Perhaps you would like to add that insight that you find lacking? After all, the aim of posting such pieces is to create discussion.

I don't have the insight. But, to say it with Wittgenstein, if you don't have anything sensible to say, don't say anything (re. Moore).
I am always happy to read expert opinions on the matter, which is why I read 'The Emirates Economist' blog.

And secondly, the aim may well be to create discussion, but it does not follow that one will succeed in achieving this by posting someone else’s bland drivel.

DUBAI JAZZ said...

Real Nick,
Drivels? This man is a former head of the world trade organization and you think what he says is drivels?

DUBAI JAZZ said...

NZM
Thank you for sharing this, and please don't hesitate to post these gems!.

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