I haven't written a blog for about a week because my Apple Mac Pro went kaput and I've been arguing with Currys PC World (in the UK) ever since. For the meantime, I've now got a PC but I miss my Mac. It was going to cost me £800 to have a new screen fitted- on a computer which needs replaced anyway because the memory was overloaded. I was first told by Currys that I could get the screen repaired for £60 plus the cost of the repair- which I was told would be about £60, a big difference from £800, which all the Mac shops also told me. Why the difference? Currys PC World  buys at trade so it's therefore cheaper. Turns out it isn't. To cut a long story short I am going to get my retrieved data tomorrow, for the fifth time.

Maybe this is just a deviation from the day-to-day writing I must do. But I'm not the only one who's deviating it seems- Israel is too. This article, from Brooking s Brief, (which first appeared in Foreign Policy) below explains why this is the case, and why "friends" might be fleeting.

Blind Spot

By Khaled Elgindy

U.S. President Donald Trump took a bipartisan hit after meeting with Russian President Vladimir Putin in Helsinki earlier this month, with Republicans and Democrats alike assailing what’s being peddled as his full capitulation to Putin. Undercutting the U.S. intelligence community to endorse Putin’s denial of Russian tampering with the 2016 election, Trump won wall-to-wall scorn for his performance. Meanwhile, in Israel, the summit was understandable cause for celebration.

Media Release24 July 2018Investment Environment Report - July 2018

 

In this 'Investment Environment Report' Mike Frith, Manager, Economics, explains the global investment environment and its implications for the NZ Super Fund.

Watch a short video of Mike Frith discussing the investment environment.

Economic and market backdrop

Economic fundamentals remain sound, underpinned by strong momentum, favourable market sentiment, supportive financial conditions, and expansionary fiscal policy in the United States. Together, these support corporate earnings and equity markets. However, it is not all one-way traffic. The strong performance of equity markets through 2016 and 2017 has not been sustained into 2018 thus far.   Central Bank liquidity is being slowly withdrawn and inflation expectations and interest rates have increased. These are all normal late-cycle market developments, although give cause for market participants to reassess expectations for corporate earnings growth. In addition, market volatility has increased due to global trade tensions and European political outcomes, which increase market uncertainty around the global outlook.

The story of Abraaj, the largest private equity house in the Middle East, is perhaps the story of Dubai. How, after excessive hubris, the private equity firm was brought down to size. This seems to be happening to Dubai itself. Just read the article: "Dubai is melting like a glacier in the desert". https://www.luciadore.com/blog/dubai-is-melting-like-a-glacier-in-the-desert

This article in Bloomberg's Business Week explains what happened. https://www.bloomberg.com/news/articles/2018-06

The Downfall of Dubai’s Star Investor

With the potential collapse of Arif Naqvi’s Abraaj Group comes trouble for the United Arab Emirates’ nascent financial industry. ByTracy Alloway, Dinesh Nair, and Matthew MartinJune 14, 2018Pakistani financier Arif Naqvi shared a stage with Bill Gates at the World Economic Forum in Davos, Switzerland, in January for a panel on global health. Even alongside the billionaire philanthropist and two medical professionals, Naqvi stood out for his enthusiasm: “Like Bill, I’m an optimist,” he said. “So I believe the glass is half full, very firmly. I don’t believe it’s half empty.”Unbeknownst to the audience, four investors in Naqvi’s Dubai-based $1 billion health-care fund, including the Bill & Melinda Gates Foundation, had recruited forensic accountants to investigate where their money had gone. The existence of the inquiry was first reported less than a week later by the Wall Street Journal. A subsequent review by Deloitte LLP, made at the request of Abraaj Group, Naqvi’s holding company, found it had dipped into money reserved for the health-care fund as well as a private equity fund, according to a draft summary sent to creditors and seen by Bloomberg News. Abraaj’s senior managers shared “collective responsibility” for “lapses in governance and control,” Deloitte said.In March, Naqvi halted fresh investments and released investors from commitments to a new fund, what would have been Abraaj’s largest to date. Later that month, the company began slashing jobs and downsizing its business to better prepare it for “sustainable growth,” according to a statement.

Abraaj was still pushing creditors to agree to a standstill on debt payments as of mid-June. Now it’s considering filing for provisional liquidation ahead of a June 29 court hearing on a petition from Kuwait’s Public Institution for Social Security seeking to dissolve its holdings, according to people with knowledge of goings-on inside the company.

“We should have reacted to the kind of questions that investors were asking, arguably, in a different way,” Naqvi says. “The fact that we didn’t, the fact that we took a particular perspective and stuck to that is in hindsight not the smartest thing we could have done.”

“Private equity is still a nascent industry in the region, so it’s a shame to see the biggest name falling apart”

Israel is in a state of emergency, and has been since 1948. How can this be allowed and what does it mean for the population? Reading this article in Al Monitor by a former justice and religious affairs minister, Yossi Bellin, t shows there is a whole list of ramifications.

Does Israel need to be in a state of emergency?

A cease-fire between Israel and Hamas was announced the night of July 14, following large exchanges of fire between the Islamist movement and the Israel Defense Forces. That there is an undeclared cease-fire — one not officially authorized by the Israeli government — does not, however, end Israel’s state of emergency. Actually, the state of emergency is always in effect, making it unnecessary to declare it every time there is an escalation of violence. There is no need to declare a state of emergency for an urgent call-up of the reserves, because such a call-up, under Order 8, does not depend on that. Whether dealing with people from Gaza setting nearby fields on fire or with using heavier weapons systems, there is no need for a formal decision on a new security status. The state of emergency is always present in Israel, because the tail wags the dog.

On July 12, Haaretz announced that a joint committee of the Knesset's Foreign Affairs and Defense Committee and the Constitution, Law and Justice Committee had decided to respond positively to a government request and recommend to the Knesset that it extend the current state of emergency by another year. No one was upset about it. How can anyone get excited over a situation that has existed since May 19, 1948?

It began at the height of the 1948 War of Independence. Israel needed to ensure that the public received goods and services, and there was nothing more natural for the interim government than deciding that a country that was just 5 days old, and already in a state of war, to declare a state of emergency. This way, it could procure existing resources from the public on behalf of the security effort. The war ended less than a year later, but the state of emergency remained in effect. Someone forgot to revoke it, or perhaps it was just all too convenient to give it up so easily.

Everything to do with Iran and how it interacts with the other members of the Iranian elite and the West is interesting to me. In Dubai, when Iranians could enter easily, and many worked for the government or pseudo-government agencies, the people provided a great deal of information- far more than the Saudis, for example

This article from Al Monitor explains the difficult relationship between President Hossein and members of his own elite and the West.  

Rouhani goes on offense against critics, shady interests and ‘culture of opacity’

Week in Review July 8, 2018

Iranian President Hassan Ruhani attends a news conference at the Chancellery in Vienna, Austria, July 4, 2018.

The dislike of the Arabs by the Israeli/Jewish State, and the Jews by many Arabs runs deep. This hostility is neither a one-off, nor short lived. As a non-Jewish, non Arab person the tension in Israel and the West Bank is palpable, even after a short visit.

 This article written by Yossi Beilin for Israel Pulse, produced by Al Monitor Group, explains some of the underlying issues.

Yossi Beilin July 11, 2018

Article Summary

In a letter to the prime minister and the Knesset, President Reuven Rivlin pleaded with Benjamin Netanyahu to remove a clause in the proposed Nationality Law that would make it legal to deny Arabs the right to live in Jewish villages.

The financial crisis of 2008 coincided with the meltdown of Dubai’s real estate market. The economy has never properly recovered but Dubai is back to its old ways. Build and develop and the people will come. Except they are not.

This article in moderndiplomacy explains why.

Published

July 7, 2018

By Mir Mohammad Ali Khan

I was sent this article today, by a Saudi, and read it with fascination. While the article takes a swipe at Saudis, Emiratis are

But then, as I learned today, nor are those working at Ealing Council In London. I waited for one hour before I was served, and I was next in the queue all that time, and then it took forty minutes to sort out my request and go to the cashier. Yes, a new computer system had only just been installed, making it slower for the employees, but ..…. Are these employees not the same as the Saudis or Emiratis?

From Business Insider

 800,000 ex-pats have left Saudi Arabia, creating a hiring crisis because 'young Saudi men and women are lazy and are not interested in working'

Ambrose Carey, AlacoJul. 9, 2018, 1:52 PMThe Saudisation policy of Crown Prince Prince Mohammed bin Salman (MbS) has coincided with an "expat exodus" and flight of foreign investment.Saudi businesses are complaining that locals don't want to do "low-status" jobs that many expats worked — creating a real problem for the economy.In November, a paper by the Institute of International Finance projected capital outflows in 2017 at $101 billion, 15% of GDP.Fortunately, a recent rebound in oil prices has temporarily rescued the ailing Saudi Arabian economy, but it will not be a long-term solution.

Saudi Crown Prince Mohammed bin Salman may have portrayed himself as a moderniser rolling back the country’s stultifying social restrictions – but he is struggling to turn the country’s financial fortunes around, with the economy suffering a crisis of confidence.

So I see that Abraaj Group, previously the largest private equity firm in the Middle East, is struggling to keep afloat, amid allegations that some of the funds have been mismanaged.

This is a turnaround, especially from the times when it was sponsoring Art Dubai. Indeed it was sponsor of the main art prize, to support contemporary artists of the Middle East, North Africa and South Asia.  

Now, it appears not to have the prestige that it once did.

 I was working on Khaleej Times, from where the article below came, and then on mergermarket, part of the Financial Times Group, and was covering a great deal on private equity. And here’s an article from Arabian Business that explains the background.

 Filed on July 5, 2018 | Last updated on July 5, 2018 at 04.09 pm (Khaleej Times)

I’ve often wondered about the relationship between Saudi Arabia and Jordan. Both are wanting to be the dominant country in the Middle East, but it’s Jordan that has control of the holy sites in Jerusalem. To learn more about this relationship read this article from Al Monitor below.

  Rasha Abou Jalal July 2, 2018

Article Summary

Saudi Arabia is boosting its efforts to take over Jordan's administration of Jerusalem's holy sites, and many think the pressure is coming from Saudi efforts to drum up support for the US peace plan for the Mideast.

REUTERS/Ammar Awad

Focusing on Jordan in the Middle East is a little unusual in that it is considered one of the most stable societies in the region. To many, it is surprising that it is not.

When I was working in Dubai one Jordanian journalist who was working with me noted the protests that were taking place in Amman and how ineffective the government was. Nothing has changed.

The government is still ineffective and the reforms have not happened. Hence, the public protests at the end of May.

For an explanation of what is happening in Jordan, Osama Al Sharif from Al Monitor gives a good explanation.

 

I sent this press release out today.

29 June, New Zealand.

Anti money-laundering legislation to hit Kiwi SME businesses from next month

The number of Kiwi businesses that need to comply with AML / CFT (Anti-Money Laundering and combating the Financing of Terrorism) legislation will quadruple overnight.

From July 1, legislative requirements will be imposed on the legal, real estate, sports betting, and high-value goods industries (jewellery, precious metals, precious stones, watches, motor vehicles, boats, art or antiques where they take cash payments of $15,000 or more).

 

I apologise for not having written anything recently. My excuse is that I travelled to the other side of the world, from New Zealand to England. I’ve adjusted to the time zone now. While travelling, Turkey held its general election.

While in Dubai, I met a number of people who had nothing but bad things to say about Recep Tayyip Erdogan. Yet he keeps winning elections. Why is that? Here’s a take on things from Kemal Kirisci, from the Brookings Institute.

 

 Yesterday’s election in Turkey—which saw a remarkable 87 percent turnout—yielded a victory for strongman Recep Tayyip Erdoğan. This, despite a surprisingly strong opposition challenge that he had not seen before. Unless Erdoğan addresses Turkey’s mounting domestic and foreign policy problems, he and his party will be vulnerable at the local elections in March 2019. To truly sustain his victory, he will need to tone down his populistic rhetoric and cooperate with a parliament that is now much more diverse.

I was talking this evening about how often changes are made in Dubai, the UAE, to visa rules, for example. If changes are made, more money is made. How cynical is that?

 Here’s what happened to the business visa rules for example, as explained in the Entrepreneur Middle East.

 The UAE Cabinet, under the leadership of H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has announced its decision to allow 100% foreign ownership of companies in UAE, on Sunday. This comes as part of the country’s decision to adopt a new visa system for international “investors and talents,” introducing a long-term 10-year visa for certain categories of professionals. Sheikh Mohammed also directed the Ministry of Economy to coordinate with concerned parties to implement the resolution, and follow up on its developments, and said that the decision will be enforced by third quarter of this year.

The plan is expected to result in a clear boost for UAE’s emerging small businesses, as the country now has plans to allow for 100% business ownership of all enterprises in the country- an incentive previously only applicable for companies operating in the free zones (whereas other companies were required to have a local partner with minimum 51% ownership). “The new visa system will increase the chances of attracting investors and competencies to the UAE, and thus increase the country's economic competitiveness globally. The global investors' ownership is expected to reach 100% by the end of the year,” said the official statement.

At today's Cabinet meeting, we decided to allow 100% foreign ownership of companies in UAE, with a 10 year visa for investors,scientists, doctors, engineers, entrepreneurs and innovators. The UAE has always welcomed, and always will, innovators and business leaders

Today marks the historic meeting between US President Trump and North Korean President Kim Jong-UN. It is a shame that nothing like this meeting has taken place between the US President and the Iranian President, Houssan Rouhani.What will happen now that the US is not going along with the nuclear deal. Here's a view from experts at Brookings as to what might happen.

Around the Halls: Brookings experts discuss the implications of President Trump’s Iran nuclear deal announcement

Suzanne Maloney, Natan Sachs, Bruce Riedel, Daniel L. Byman, Hady Amr, Mara Karlin, Samantha Gross, Frank A. Rose, Richard Nephew, Steven Pifer, Célia Belin, Dror Michman, Tamara Cofman Wittes, Tanvi Madan, and Kadira Pethiyagoda Tuesday, May 8, 2018

Order from Chaos

Editor's Note:

I’ve been to a number of superb art exhibitions in Dubai, including Art Dubai, an annual exhibition where the best of art across the Middle East is shown.Some of the best shows are when the great auction houses- Southebys and Christies, bring exhbitions to town. Therefore, I was intrigued to read this article below which talks about Middle Easterm artists giving traditional art a modern twist.

 Middle Eastern artists give traditional art a modern twist

India Stoughton June 4, 2018 (From Al Monitor).

Article Summary

Bahraini weaving, Palestinian embroidery and Iraqi miniatures are among the traditional art forms being reinvented and adapted by the Middle Eastern artists competing for the fifth edition of the Jameel Prize.

Is Trump really so popular in Israel?

 

It is easy to think that everyone’s on board with its stance on Iran - given the current rhetoric coming out of Israel- and with the US. While there are doubters I’m sure there are detractors too. I remember the occasion I entered Jerusalem via the Wall from Bethlehem. When I finally got through the other side- it wasn’t easy- and got on a bus- the Israeli man sitting beside me said: “Not everyone agrees with the Government’s policies”.

 

Uri Savir from Al Monitor explains.

 The US unilaterally pulling out of the Iran nuclear deal- the Joint Comprehensive Plan of Action (JCPOA)- has caused chaos in Iran and the EU but also in the international community. The question is whether the deal will stay alive between the EU and Iran? Will the EU manage to renegotiate the deal?

Here is what Al Monitor's Bijan Khajehpour has to say. He is an economist and a managing partner at Atieh International, a Vienna-based international strategic consulting firm.

by Bijan Khajehpour May 29, 2018

 Article Summary

As Iran and other remaining signatories to the JCPOA labor to keep the nuclear deal intact, rising regime cohesion amid Ayatollah Khamenei’s outlining of effective “red lines” indicate the predominance of realism in Tehran.

I’ve often thought about whether one’s self awareness help’s one in doing better at the job or business? Or at communication generally? The answer seems to be a resounding yes. And the article below reinforces this. For the benefits of self-awareness include:

enriched emotional intelligence and greater empathy and listening skills;improved critical-thinking skills and decision making;strengthened communications and relationships; andenhanced leadership capabilities and capacity.

 

Know Thyself: Examining the Benefits of Self-Reflection

Bruce Berger, Ph.D., University of Alabama, IPR Trustee

 The value of self-awareness has been recognized for millennia. “Know thyself” was inscribed on the forecourt of the Temple of Apollo at Delphi. Greek philosophers believed self-knowledge was the highest form of knowledge.

Reading this article below about Kuwait made me think about the Gulf Cooperation Council (GCC) countries and the attempt to form a  currency union. There was much chatter about it in 2007 and talk about it has gone on for years. Nothing has happened. The UAE objected to the central bank being located in Saudi; and the GCC countries never agreed on a name for the common currency. That was a fundamental flaw. Any talk of a common currency has stopped. Kuwait has always sat on the fence with this. It seems to have opted out early on. The balancing act that Kuwait is doing with Saudi Arabia and Iran is not much different. Hamad Alboshi at Al Monitor explains.

Hamad H. Albloshi May 24, 2018 Article SummaryThe muted responses to the US withdrawal from the Iran deal among smaller Gulf Cooperation Council member states reflect careful policies designed to balance ties with Iran and Saudi Arabi

Reactions to US President Donald Trump’s decision to withdraw from the Joint Comprehensive Plan of Action (JCPOA) have varied around the world, including in the Gulf Cooperation Council (GCC). While Saudi Arabia, the United Arab Emirates and Bahrain have strongly backed the US move, other Gulf states have been cautious and declined to adopt a clear stance on the matter. For instance, Kuwait has not echoed the Saudi position and rather announced its understanding of the US decision to withdraw from the deal. The Kuwaiti position on the JCPOA is significant considering its close relationship with Saudi Arabia on the one hand, and its alliance with the United States on the other.

Since gaining independence from Britain in 1961, Kuwait has used different tools to secure its existence. First and foremost, it has relied on international powers for its protection, a trend that became critical after its liberation from Iraq in 1991. In addition, Kuwait has sought to protect itself by balancing its relationships with its neighbors — with the notable exception of the 1980-88 Iran-Iraq War, when it sided with Iraq. Kuwait has further relied on mediation as a tool of its foreign policy. This tool is not new, but rather boosted in recent years as Kuwait has mediated to end the ongoing war in Yemen. The eruption in 2017 of the crisis between Saudi Arabia, the UAE and Bahrain on the one hand and Qatar on the other has further strengthened Kuwait’s role as a mediator. Kuwait benefits from this position because it shows the importance of the country both regionally and globally. While its efforts do not always succeed, the regional and international recognition of its mediator role is critical for its security. Hence, it is important for Kuwait to balance its relationships with Saudi Arabia and Iran — the main rivals in the region — to gain the trust necessary to pursue its mediating efforts. As such, its reaction to the US withdrawal from the JCPOA should be seen as part of this balancing strategy.

Both Saudi Arabia and Iran harbor desires to dominate the region — and both of these desires concern Kuwait. Iran wanted to export its Islamic Revolution in the 1980s, and there are voices in the Islamic Republic who are still committed to that cause. In addition, Iran’s influence in Iraq, Syria and Lebanon is not welcomed by the Kuwaitis. Moreover, Tehran’s reported interference in Kuwait — as seen in announcements of the discovery of alleged cells associated with the Islamic Revolutionary Guard Corps — is seen as a threat. At the same time, despite the close relationship between Kuwait and Saudi Arabia, there is a belief among some in Kuwait that the country would have been next in line had the Saudis succeeded in their efforts to coerce Qatar last year.