Originally Posted by Rody69
Exploring urban issues facing 21st century, The Mile High Tower offers a fresh perspective on an idea that has been debated by architects for a century"1 mile =1600 M . Exploding land values, growing populations and expanding economies are placing extraordinary burdens on many culturally rich, but land deprived Asian regions. In response to these pressures we have proposed a vertical city. In conceiving the tower as a vertical city, the design team has integrated technological, architectural and urban planning strategies into a single structure that breathes with urban complexity. The scale of the building and the scope of the program force the reevaluation of current skyscraper precedents for form, purpose, infrastructure, transportation, structure, and sustainability.
Architecture and engineering have traditionally treated structure as static—the building frame was constructed to be strong and heavy enough to resist all anticipated loads. The Mile High Tower proposes a lighter, dynamic structural system that actively responds to forces placed upon it. Controlled by wind detecting sensors, stabilizing aileron-like fins run the length of the tower frame and modulate their position to control resonant motion and building drift.
The separation of the structural frame and the building envelope enhances the quality of the interior space by providing an abundance of natural light and ventilation. Equipped with wind generators, photovoltaic panels, a heliostat, and sewage treatment facilities, the tower attains a high degree of sustainability with minimal environmental impact.
Approaching the tower as a theoretical project has proven liberating, freeing the design team to seek new solutions to technical problems, to find creative approaches outside the present financial climate, and to implement environmentally sustainable strategies that will enhance the next generation of ultra-high rise buildings. Our paradigm is the human body. This near-future tower incorporates structural and climatic systems that, like the human body, respond dynamically and efficiently to forces placed upon them.
Pickard Chilton company have done the skyscraper design, plus other specialized engineering firms for structural, infrastructure and traffic design, cost and time planning!!
Saturday, February 23, 2008
Bahrain considering $1bn leisure development
Plans are being drawn up for a $1bn leisure city in the Bahrain to rival Disneyland.
The development is ideally going to be on a similar size and scale to Disneyland, with various ideas still being considered.
A source close to the project says that financial backing is being pursued and a leisure developer is being approached to take the project forward.
It is hoped the development will capitalise on the spare land available in the kingdom, stimulate higher land prices, and encourage more tourism to the kingdom.
The kingdom's $1.5bn Bahrain Bay project is another key development located off the north-east coast of the capital. It will combine commercial, residential and retail with a hotel at its centre.
Last Updated: 22 February 2008 10:42
Author: Christopher Sell.
The development is ideally going to be on a similar size and scale to Disneyland, with various ideas still being considered.
A source close to the project says that financial backing is being pursued and a leisure developer is being approached to take the project forward.
It is hoped the development will capitalise on the spare land available in the kingdom, stimulate higher land prices, and encourage more tourism to the kingdom.
The kingdom's $1.5bn Bahrain Bay project is another key development located off the north-east coast of the capital. It will combine commercial, residential and retail with a hotel at its centre.
Last Updated: 22 February 2008 10:42
Author: Christopher Sell.
Friday, February 22, 2008
Dubai-based Zabeel Investments Enters Strategic Joint Venture With The Light Group
LAS VEGAS, Feb. 20 /PRNewswire/ -- Dubai-based diversified investment group, Zabeel Investments has taken a strategic step into the hospitality sector, through the acquisition of a fifty percent stake in leading US hospitality development and management company, The Light Group.
This partnership marks the first foray into the US market by the fast-growing and dynamic investment house. The partnership unites the experience and innovation of the Las Vegas-based Light Group with the ambition and expertise of Dubai-based Zabeel Investments, delivering a distinct offering to both the US and UAE hospitality and entertainment sectors as well as markets further afield. The partnership continues the existing relationship between Dubai and CityCenter in Las Vegas where The Light Group will manage The Harmon Hotel, Spa & Residences, a property owned and under development by CityCenter Holdings, LLC, a joint venture of MGM MIRAGE and Dubai World. Additionally, Dubai World holds a significant stake in MGM MIRAGE.
According to a report published by Global Futures and Foresight in May 2007, during the next 20 years, more than US$ 3 trillion will be invested in the leisure and tourism industry in the Arab world, thus allowing airport capacity for an additional 300 million passengers, more than 200 new hotels, and growing regional visitor numbers to 150 million people, all of which are conservative estimates.
Commenting on the acquisition, Zabeel Investments' Executive Chairman, HE Mohammed Ali Al Hashimi, said: "The Light Group is internationally renowned for spearheading exclusive and innovative projects in the US such as The Harmon Hotel. Our goal is to develop the hospitality industry in the UAE and across the region -- an aim which encompasses all areas of this sector from food and beverage to hotels and restaurants. In addition, The Light Group can tap our UAE hospitality expertise, and evolve that to other developments around the world.
"The Harmon Hotel will be an exclusive, private and environmentally green luxury boutique hotel -- it is these concepts and values, which synergize so well with our own, that have made the group one of the most recognized and respected players in its field. The acquisition enables us to draw on the experience of The Light Group and transfer its knowledge, its brand of entertainment and innovative concepts and the highest service standards back to the UAE market, which continues to develop and evolve at a remarkable rate. In turn, we intend to support The Light Group as it continues to expand its hotel management, food and beverage, and entertainment portfolio further into key US cities."
"More and more the developments and growth found in the UAE and wider region are leading the way internationally in terms of scope and ambition," commented Andrew Sasson, Founder and Owner, The Light Group. "This factor, combined with the capability and vision that Zabeel Investments specifically brings to the table, marks the beginning of an exciting new chapter for our company that will see us escalating our portfolio throughout the US and further afield. The partnership is founded on a shared perspective of the potential that the hospitality sector holds around the world and through this common outlook we intend to embark on a number of pioneering projects."
Since its launch in February 2006, Zabeel Investments has made significant inroads to the high-end commercial real estate development and management sector in the UAE. Its development projects include the soon to be completed Tiara Residence on Palm Jumeirah. The group also has under development, the Tiara United Towers on Sheikh Zayed Road and America Hotels & Resorts in Tatweer's AED 200 billion Bawadi entertainment themed development, both of which mirror the creativity and high-end nature of The Light Group.
In terms of strategic investments, the company holds stakes in a number of international companies including the European Aeronautic Defence and Space Company (EADS) and Sony Corporation.
About The Light Group
Based in Las Vegas, The Light Group is one of the United States' leading hospitality development and management companies. Founded by Andrew Sasson and his partner, Andy Masi, the company will manage and operate The Harmon Hotel, Spa & Residences, one of the most luxurious, high-end boutique hotels across the globe opening in late 2009 at CityCenter, a joint venture between MGM MIRAGE and Dubai World.
The Light Group's portfolio also includes several food and beverage properties at AAA Five Diamond Bellagio Resort & Casino, The Mirage Hotel & Casino, Monte Carlo Resort & Casino and Treasure Island Hotel & Casino. http://www.lightgroup.com/
About Zabeel Investments
Founded in February 2006, Zabeel Investments is a Dubai-based diversified investment company with business interests spanning commercial real estate development and management, private equity and asset management across a wide range of economic sectors in the GCC and other international markets.
Zabeel Investments property portfolio currently comprises of approximately AED 15 billion of prestige residential, commercial and hospitality developments.
The Light Group
This partnership marks the first foray into the US market by the fast-growing and dynamic investment house. The partnership unites the experience and innovation of the Las Vegas-based Light Group with the ambition and expertise of Dubai-based Zabeel Investments, delivering a distinct offering to both the US and UAE hospitality and entertainment sectors as well as markets further afield. The partnership continues the existing relationship between Dubai and CityCenter in Las Vegas where The Light Group will manage The Harmon Hotel, Spa & Residences, a property owned and under development by CityCenter Holdings, LLC, a joint venture of MGM MIRAGE and Dubai World. Additionally, Dubai World holds a significant stake in MGM MIRAGE.
According to a report published by Global Futures and Foresight in May 2007, during the next 20 years, more than US$ 3 trillion will be invested in the leisure and tourism industry in the Arab world, thus allowing airport capacity for an additional 300 million passengers, more than 200 new hotels, and growing regional visitor numbers to 150 million people, all of which are conservative estimates.
Commenting on the acquisition, Zabeel Investments' Executive Chairman, HE Mohammed Ali Al Hashimi, said: "The Light Group is internationally renowned for spearheading exclusive and innovative projects in the US such as The Harmon Hotel. Our goal is to develop the hospitality industry in the UAE and across the region -- an aim which encompasses all areas of this sector from food and beverage to hotels and restaurants. In addition, The Light Group can tap our UAE hospitality expertise, and evolve that to other developments around the world.
"The Harmon Hotel will be an exclusive, private and environmentally green luxury boutique hotel -- it is these concepts and values, which synergize so well with our own, that have made the group one of the most recognized and respected players in its field. The acquisition enables us to draw on the experience of The Light Group and transfer its knowledge, its brand of entertainment and innovative concepts and the highest service standards back to the UAE market, which continues to develop and evolve at a remarkable rate. In turn, we intend to support The Light Group as it continues to expand its hotel management, food and beverage, and entertainment portfolio further into key US cities."
"More and more the developments and growth found in the UAE and wider region are leading the way internationally in terms of scope and ambition," commented Andrew Sasson, Founder and Owner, The Light Group. "This factor, combined with the capability and vision that Zabeel Investments specifically brings to the table, marks the beginning of an exciting new chapter for our company that will see us escalating our portfolio throughout the US and further afield. The partnership is founded on a shared perspective of the potential that the hospitality sector holds around the world and through this common outlook we intend to embark on a number of pioneering projects."
Since its launch in February 2006, Zabeel Investments has made significant inroads to the high-end commercial real estate development and management sector in the UAE. Its development projects include the soon to be completed Tiara Residence on Palm Jumeirah. The group also has under development, the Tiara United Towers on Sheikh Zayed Road and America Hotels & Resorts in Tatweer's AED 200 billion Bawadi entertainment themed development, both of which mirror the creativity and high-end nature of The Light Group.
In terms of strategic investments, the company holds stakes in a number of international companies including the European Aeronautic Defence and Space Company (EADS) and Sony Corporation.
About The Light Group
Based in Las Vegas, The Light Group is one of the United States' leading hospitality development and management companies. Founded by Andrew Sasson and his partner, Andy Masi, the company will manage and operate The Harmon Hotel, Spa & Residences, one of the most luxurious, high-end boutique hotels across the globe opening in late 2009 at CityCenter, a joint venture between MGM MIRAGE and Dubai World.
The Light Group's portfolio also includes several food and beverage properties at AAA Five Diamond Bellagio Resort & Casino, The Mirage Hotel & Casino, Monte Carlo Resort & Casino and Treasure Island Hotel & Casino. http://www.lightgroup.com/
About Zabeel Investments
Founded in February 2006, Zabeel Investments is a Dubai-based diversified investment company with business interests spanning commercial real estate development and management, private equity and asset management across a wide range of economic sectors in the GCC and other international markets.
Zabeel Investments property portfolio currently comprises of approximately AED 15 billion of prestige residential, commercial and hospitality developments.
The Light Group
Qatar Sovereign Wealth Fund Buying Credit Suisse Shares, Qatar Prime Minister Says
By William Patalon III
Executive Editor
Money Morning/The Money Map Report
The government of Qatar - operating through its state-run investment fund - is accumulating shares in Swiss banking giant Credit Suisse Group (CS) and says it intends to invest as much as $15 billion in U.S. and European bank stocks over the next year.
The announcement, made over the weekend by the prime minister of the Persian Gulf state is part of a major mobilization of capital that has what Money Morning has labeled as the "Middle East Cash Barons" bringing billions of dollars to bear on the U.S. and world banking sectors.
In the past year alone, these highly controversial state-run "sovereign wealth funds" have invested an estimated $70 billion in the world’s ailing banking system - most of them in the West. In the United States alone, the funds have provided bailout capital to the likes of Citigroup Inc. (C), Merrill Lynch & Co. Inc. (MER) and Morgan Stanley (MS) - financial-sector heavyweights whose balance sheets have been eviscerated by the subprime-spawned credit crisis. UBS AG (UBS) - also Swiss-based - has received Cash Baron bailout money, too.
During an interview late Sunday in the Qatar city of Doha, the prime minister, Sheikh Hamad bin Jasim bin Jaber al-Thani, told Bloomberg News that his country has "a relation with Credit Suisse and we bought some of the stock from the market, actually, but I cannot say what percentage because still we are in the process."
Sheikh Hamad is also the chief executive officer of the Qatar Investment Authority, the $60 billion sovereign wealth fund backed by the Qatar government. Currently, the fund has plans to double in size by 2010, with up to 40% of its investments in Asia, and the rest in Europe and the United States, according to research conducted by
London-based Standard Chartered PLC.
Sovereign Wealth Funds: The (Big) New Kids on the Block
Long the capitalist bastion, Wall Street is finally getting some competition, and is feeling the heat from these state-controlled investment pools known as sovereign wealth funds. Some - including the Kuwait Investment Authority - have been around since the 1950s.
Much of the money comes from crude-oil sales, which is why many of these government-operated venture pools are situated in the Middle East. And since oil prices have soared in recent years, these funds have turned into veritable "war chests" of capital that enable the states to mount ambitious acquisition and infrastructure-development jags.
The governments of such countries as Dubai, Saudi Arabia, China, Russia and Norway operate the big investment pools - and more are on the way. The capital was amassed chiefly through crude oil sales, although China started its fund with some of the estimated $1.3 trillion in foreign reserves racked up from the massive trade surpluses it routinely runs.
The richest sovereign funds include the Abu Dhabi Investment Authority, or AIDA ($875 billion), the Government of Singapore Investment Corp. ($330 billion), and Norway’s Government Pension Fund Global, or GPFG ($322 billion), although several others may be larger. Some of the other top funds include Singapore’s Temasek Holdings Pte. Ltd., Mainland China’s China Investment Corp., and Dubai’s Dubai International Corp.
New funds have been announced in recent months.
Many of these Cash Barons are looking for more than just an investment return: They are seeking the deal-making know-how that over time will transform them into global financial titans. That quest induced the China-controlled State Foreign Exchange Investment Co. to invest $3 billion in the private-equity whiz The Blackstone Group LP (BX) back in April. The funds often take passive stakes, meaning they don’t demand management say-so and don’t seek seats on the target company’s board of directors.
Sovereign wealth funds currently control an estimated $3.2 trillion in assets. That’s already believed to be more than the $1.5 trillion to $2 trillion held by worldwide hedge funds [though some sources put the hedge-fund estimate as high as $5 trillion].
The International Monetary Fund (IMF) and other experts predict the state-run venture funds could control $12 trillion by 2015. State-managed funds in countries including Kuwait, Abu Dhabi and South Korea have ballooned to $3.2 trillion in assets. Fueled by record oil prices and rising currency reserves, sovereign fund assets may gain fourfold to $12 trillion by 2015, equal to the capitalization of the Standard & Poor’s 500 Index, according to Morgan Stanley.
Money Morning Investment Director Keith Fitz-Gerald thinks the ultimate total will actually be much bigger: Even now, he estimates that the total capital under the control of the global Cash Barons is more likely to reach $20 trillion by the middle of the next decade.
The growth rate is certainly accelerating. The U.S. Treasury says that 20 new funds have been created since 2000 - more than half of them since 2005 - bringing the total to nearly 40 funds with total assets between $1.9 trillion and $2.9 trillion.
Needless to say, the funds have become the focus of controversy and concern in Washington. Congress is worried about the manner in which sovereign funds seem to have exploded onto the scene, the large and potentially influential stakes the funds have been taking in big U.S. investment-banking firms, and their lack of "transparency" - there’s no global equivalent of the U.S. Securities and Exchange Commission to force disclosure of their holdings or of their investment intent.
That lack of transparency is apparently a particular issue with the Qatar Investment Authority, which Standard Chartered cites as being among the world’s "most-secretive funds," a group that also includes those in the United Arab Emirates, Kuwait, China, Qatar, Brunei and Venezuela.
But some of its deals have been in the spotlight of late.
Among the deals the QIA pursued in order to diversify its assets and build its asset base in the European market was the purchase of a stake in the U.K.-based supermarket chain, J. Sainsbury PLC (OTC: JSAIY). Since the Qatari sovereign fund Delta Two acquired a 25% stake in the supermarket early in 2007, Delta Two had been expected to launch a bid for the entire chain for an estimated $21.7 billion. Delta Two is an affiliate of the Qatar Investment Authority.
But the full-scale takeover hit a snag, however, after the Sainsbury family and company pension-fund trustees balked at the structure of the deal, worrying that the supermarket will be burdened with a crushing level of debt.
In mid-January, Forbes.com reported that Delta Two transferred its entire 25% stake - 435.16 million shares - to state investment vehicle Qatar Holdings LLC, a wholly owned subsidiary of QIA, the primary investment vehicle.
As its interest in Credit Suisse underscores, Qatar wants to build a position in the global financial sector.
Last September, Qatar Holding purchased a 20% stake in the London Stock Exchange Group PLC. That stake was subsequently diluted to about 15% on Oct. 1 when the LSE finalized its $2.4 billion buyout of the Borsa Italiana SpA.
In other deals, the QIA has chalked up a 9.98% stake in the Nordic and Baltic exchange OMX, after buying 3.5% of the Nasdaq Stock Market Inc. (NDAQ), adding to its existing 20% stake.
But on Friday, the Nasdaq said it expects its $4.5 billion deal to acquire Nordic and Baltic stock exchange OMX through a complex tie-up with Borse Dubai Ltd. - a sovereign wealth fund affiliate of the state of Dubai - will close on Feb. 27. In a statement, Nasdaq said Borse Dubai had been successful in a tender offer for OMX shares, which paves the way for it to form the Nasdaq OMX Group. Separately, Borse Dubai said that after it exercises its options, it expects to hold a 97.6% stake in the entity.
Now, after agreeing to buy Qatar’s stake in OMX AB, Borse Dubai said it would consider an offer from Qatar to sell the shares it holds in the London Stock Exchange Group, in which Borse Dubai is the biggest shareholder, according to Bloomberg News.|
Back in September, when Borse Dubai cut its deal with OMX and Nasdaq, it said it would be left with a 20% stake in the Nasdaq and a 28% stake in the LSE. Qatar threatened to scuttle the deal, and bought the rivaling OMX stake and the 20% position in the London Stock Exchange. That forced Dubai to boost its own OMX offer.
According to Bloomberg, Dubai now owns 20.4% of LSE, 5% more than Qatar’s holding. Both sovereign investors saw their stakes get diluted when LSE on Oct. 1 completed its takeover of Borsa Italiana S.p.A.
Other QIA investments include 100% ownership of the U.K.-based Four Seasons Healthcare, a 97.3% stake in Lebanon’s BLC Bank SAL, and part of a 3.12% stake in European Aeronautic, Defence & Space Co. (EADS NV), the parent company of airliner maker and Boeing Co. (BA) rival Airbus Industries SAS, Standard Chartered said.
Switzerland’s second-biggest bank, Credit Suisse said on Feb. 12 that its fourth-quarter profit plunged 72% after taking a $1.2 billion write-down on debt and leveraged loans. The stock has fallen more than 30% since early October. UBS, Switzerland’s largest bank, has taken $14 billion in write-downs.
Credit Suisse already has ties to Qatar. In March 2006, it became the first European bank to get a license for the Qatar Financial Centre, a self-regulated business park designed to attract lenders to the Gulf state as part of Qatar’s ongoing plan to diversify its own
And when Qatar went after J. Sainsbury last year, Credit Suisse was one of the three Europe-based banks that agreed to underwrite billions of dollars in debt to help finance the buyout.
Executive Editor
Money Morning/The Money Map Report
The government of Qatar - operating through its state-run investment fund - is accumulating shares in Swiss banking giant Credit Suisse Group (CS) and says it intends to invest as much as $15 billion in U.S. and European bank stocks over the next year.
The announcement, made over the weekend by the prime minister of the Persian Gulf state is part of a major mobilization of capital that has what Money Morning has labeled as the "Middle East Cash Barons" bringing billions of dollars to bear on the U.S. and world banking sectors.
In the past year alone, these highly controversial state-run "sovereign wealth funds" have invested an estimated $70 billion in the world’s ailing banking system - most of them in the West. In the United States alone, the funds have provided bailout capital to the likes of Citigroup Inc. (C), Merrill Lynch & Co. Inc. (MER) and Morgan Stanley (MS) - financial-sector heavyweights whose balance sheets have been eviscerated by the subprime-spawned credit crisis. UBS AG (UBS) - also Swiss-based - has received Cash Baron bailout money, too.
During an interview late Sunday in the Qatar city of Doha, the prime minister, Sheikh Hamad bin Jasim bin Jaber al-Thani, told Bloomberg News that his country has "a relation with Credit Suisse and we bought some of the stock from the market, actually, but I cannot say what percentage because still we are in the process."
Sheikh Hamad is also the chief executive officer of the Qatar Investment Authority, the $60 billion sovereign wealth fund backed by the Qatar government. Currently, the fund has plans to double in size by 2010, with up to 40% of its investments in Asia, and the rest in Europe and the United States, according to research conducted by
London-based Standard Chartered PLC.
Sovereign Wealth Funds: The (Big) New Kids on the Block
Long the capitalist bastion, Wall Street is finally getting some competition, and is feeling the heat from these state-controlled investment pools known as sovereign wealth funds. Some - including the Kuwait Investment Authority - have been around since the 1950s.
Much of the money comes from crude-oil sales, which is why many of these government-operated venture pools are situated in the Middle East. And since oil prices have soared in recent years, these funds have turned into veritable "war chests" of capital that enable the states to mount ambitious acquisition and infrastructure-development jags.
The governments of such countries as Dubai, Saudi Arabia, China, Russia and Norway operate the big investment pools - and more are on the way. The capital was amassed chiefly through crude oil sales, although China started its fund with some of the estimated $1.3 trillion in foreign reserves racked up from the massive trade surpluses it routinely runs.
The richest sovereign funds include the Abu Dhabi Investment Authority, or AIDA ($875 billion), the Government of Singapore Investment Corp. ($330 billion), and Norway’s Government Pension Fund Global, or GPFG ($322 billion), although several others may be larger. Some of the other top funds include Singapore’s Temasek Holdings Pte. Ltd., Mainland China’s China Investment Corp., and Dubai’s Dubai International Corp.
New funds have been announced in recent months.
Many of these Cash Barons are looking for more than just an investment return: They are seeking the deal-making know-how that over time will transform them into global financial titans. That quest induced the China-controlled State Foreign Exchange Investment Co. to invest $3 billion in the private-equity whiz The Blackstone Group LP (BX) back in April. The funds often take passive stakes, meaning they don’t demand management say-so and don’t seek seats on the target company’s board of directors.
Sovereign wealth funds currently control an estimated $3.2 trillion in assets. That’s already believed to be more than the $1.5 trillion to $2 trillion held by worldwide hedge funds [though some sources put the hedge-fund estimate as high as $5 trillion].
The International Monetary Fund (IMF) and other experts predict the state-run venture funds could control $12 trillion by 2015. State-managed funds in countries including Kuwait, Abu Dhabi and South Korea have ballooned to $3.2 trillion in assets. Fueled by record oil prices and rising currency reserves, sovereign fund assets may gain fourfold to $12 trillion by 2015, equal to the capitalization of the Standard & Poor’s 500 Index, according to Morgan Stanley.
Money Morning Investment Director Keith Fitz-Gerald thinks the ultimate total will actually be much bigger: Even now, he estimates that the total capital under the control of the global Cash Barons is more likely to reach $20 trillion by the middle of the next decade.
The growth rate is certainly accelerating. The U.S. Treasury says that 20 new funds have been created since 2000 - more than half of them since 2005 - bringing the total to nearly 40 funds with total assets between $1.9 trillion and $2.9 trillion.
Needless to say, the funds have become the focus of controversy and concern in Washington. Congress is worried about the manner in which sovereign funds seem to have exploded onto the scene, the large and potentially influential stakes the funds have been taking in big U.S. investment-banking firms, and their lack of "transparency" - there’s no global equivalent of the U.S. Securities and Exchange Commission to force disclosure of their holdings or of their investment intent.
That lack of transparency is apparently a particular issue with the Qatar Investment Authority, which Standard Chartered cites as being among the world’s "most-secretive funds," a group that also includes those in the United Arab Emirates, Kuwait, China, Qatar, Brunei and Venezuela.
But some of its deals have been in the spotlight of late.
Among the deals the QIA pursued in order to diversify its assets and build its asset base in the European market was the purchase of a stake in the U.K.-based supermarket chain, J. Sainsbury PLC (OTC: JSAIY). Since the Qatari sovereign fund Delta Two acquired a 25% stake in the supermarket early in 2007, Delta Two had been expected to launch a bid for the entire chain for an estimated $21.7 billion. Delta Two is an affiliate of the Qatar Investment Authority.
But the full-scale takeover hit a snag, however, after the Sainsbury family and company pension-fund trustees balked at the structure of the deal, worrying that the supermarket will be burdened with a crushing level of debt.
In mid-January, Forbes.com reported that Delta Two transferred its entire 25% stake - 435.16 million shares - to state investment vehicle Qatar Holdings LLC, a wholly owned subsidiary of QIA, the primary investment vehicle.
As its interest in Credit Suisse underscores, Qatar wants to build a position in the global financial sector.
Last September, Qatar Holding purchased a 20% stake in the London Stock Exchange Group PLC. That stake was subsequently diluted to about 15% on Oct. 1 when the LSE finalized its $2.4 billion buyout of the Borsa Italiana SpA.
In other deals, the QIA has chalked up a 9.98% stake in the Nordic and Baltic exchange OMX, after buying 3.5% of the Nasdaq Stock Market Inc. (NDAQ), adding to its existing 20% stake.
But on Friday, the Nasdaq said it expects its $4.5 billion deal to acquire Nordic and Baltic stock exchange OMX through a complex tie-up with Borse Dubai Ltd. - a sovereign wealth fund affiliate of the state of Dubai - will close on Feb. 27. In a statement, Nasdaq said Borse Dubai had been successful in a tender offer for OMX shares, which paves the way for it to form the Nasdaq OMX Group. Separately, Borse Dubai said that after it exercises its options, it expects to hold a 97.6% stake in the entity.
Now, after agreeing to buy Qatar’s stake in OMX AB, Borse Dubai said it would consider an offer from Qatar to sell the shares it holds in the London Stock Exchange Group, in which Borse Dubai is the biggest shareholder, according to Bloomberg News.|
Back in September, when Borse Dubai cut its deal with OMX and Nasdaq, it said it would be left with a 20% stake in the Nasdaq and a 28% stake in the LSE. Qatar threatened to scuttle the deal, and bought the rivaling OMX stake and the 20% position in the London Stock Exchange. That forced Dubai to boost its own OMX offer.
According to Bloomberg, Dubai now owns 20.4% of LSE, 5% more than Qatar’s holding. Both sovereign investors saw their stakes get diluted when LSE on Oct. 1 completed its takeover of Borsa Italiana S.p.A.
Other QIA investments include 100% ownership of the U.K.-based Four Seasons Healthcare, a 97.3% stake in Lebanon’s BLC Bank SAL, and part of a 3.12% stake in European Aeronautic, Defence & Space Co. (EADS NV), the parent company of airliner maker and Boeing Co. (BA) rival Airbus Industries SAS, Standard Chartered said.
Switzerland’s second-biggest bank, Credit Suisse said on Feb. 12 that its fourth-quarter profit plunged 72% after taking a $1.2 billion write-down on debt and leveraged loans. The stock has fallen more than 30% since early October. UBS, Switzerland’s largest bank, has taken $14 billion in write-downs.
Credit Suisse already has ties to Qatar. In March 2006, it became the first European bank to get a license for the Qatar Financial Centre, a self-regulated business park designed to attract lenders to the Gulf state as part of Qatar’s ongoing plan to diversify its own
And when Qatar went after J. Sainsbury last year, Credit Suisse was one of the three Europe-based banks that agreed to underwrite billions of dollars in debt to help finance the buyout.
Tracking State Holding Companies and Sovereign Investors of the UAE
State-backed enterprises, often grouped into holding companies, still dominate the economy of the UAE -despite some privatization - and are among the leaders of its economic development plans. With their significant role in domestic economic development, state companies like Dubai World or its subsidiaries also lead outward investment, a tendency shared with other GCC countries.
This note attempts a partial survey of a spectrum of state-backed institutions including holding companies like Dubai World, sovereign wealth funds like ADIA, investment corporations like Istithmar and energy companies like TAQA– all of which have been involved in high profile investment abroad recently. It also includes some entities who have domestic economic development as their charge though it is an incomplete list. With many institutions overlapping, they can be confusing to distinguish the different entities. Their management also tends to overlap - with many of the same rulers and heads of key institutions sitting on multiple boards. The line between the holdings of the government, the ruling family and the private sector often blurs. Some states have created multiple entities with seemingly similar remits, perhaps to encourage competition, perhaps as a trial, further complicating the outlook. Recent restructuring (merging Dubai World's two main property developers for one) to refine investment strategies could avoid some of the overlap though.
Despite the still strong state role in the domestic economy and overseas investment, the private sector has been developing and some of state-owned enterprises are now quasi-private. Many of the mega projects are at least in part public-private partnerships and some of the flagship state companies are being considered for partial privatization though the time line and likelihood is uncertain.
Dubai and Abu Dhabi have a well established set of institutions for domestic and foreign investment, in most cases focused by sectors. Now many of the poorer emirates are following their lead, establishing investment corporations to channel investment in and in some cases back out. There are even a new institutions at the federal level.
UAE federal government
The Emirates Investment Authority, announced in 2007, is intended to invest the surplus reserves of the federal government. It is not yet known whether it will be making overseas acquisitions or what reserves it might receive to invest. The UAE’s budget is mostly contributed by Abu Dhabi and Dubai and usually balances with little surplus. It is possible that it may receive funds from other existing capital or that it could be a coordinating body for the federal governments investment –However, the reserves of the UAE central bank have nearly doubled in 2007 – exceeding $48 billion by the end of September (most recent available data). Like many other institutions, many of those on the EIA’s board are high ranking members of the UAE’s governing council and heads of other institutions such as Dubai World, IPIC and key state banks.
Abu Dhabi
Abu Dhabi Investment Council is the coordinating body for Abu Dhabi’s investment inside and outside the emirate. Its subsidiaries include the Abu Dhabi Investment Authority (ADIA) and the Abu Dhabi Investment Company (ADIC). It will also set investment policies and will be allowed to invest inside the Emirate unlike ADIA. The Abu Dhabi Economic Development Council will facilitate public and private partnerships. Sheikh Khalifa, Abu Dhabi’s ruler is the chairman of both the Investment Council and ADIA.
Abu Dhabi Investment Authority (ADIA) receives the bulk of Abu Dhabi’s fiscal surplus from oil. ADIA is thought to be the largest sovereign wealth fund, managing an estimated $650-700 billion primarily as a portfolio investor. Though little about its holdings or strategy has been disclosed, it is thought to have high exposure to equity and alternatives as well as emerging markets (see Euromoney for the most complete analysis). It entrusts as much as 70% of assets to external managers, with portions of all asset classes managed internally and externally. The existence of a separate direct investment arm (Mubadala, below) and its desire to remain below the radar may have limited its concentrated bets. However, it has taken some larger stakes in 2007 (including states near or above 5% in Citi, EFG Hermes).
ADIC, the first investment company in the UAE and a key financial services firm was founded in 1977. It was jointly owned by ADIA and the National Bank of Abu Dhabi (NBAD). Until recently, its investment services were available only to government clients like ADIA, ADNOC and the finance department but it will now raise funds from the public. To that end, it recently announced a joint venture with UBS to invest in infrastructure in the MENA region (including Turkey). In the spring of 2007, the FT reported that each of ADIC’s three sections, focusing on real estate, private equity and infrastructure respectively intended to raise between $500- 750 million from institutions and high net worth individuals. At that time, it had $200 million in private equity funds. Its focus was thought to be targeted to the UAE, GCC and MENA region. Infrastructure investments include Jordan’s Queen Alia Airport.
International Petroleum Investment Company (IPIC), started as a joint venture between the Abu Dhabi National Oil Company and ADIA in 2004, invests in oil and gas companies overseas. IPIC announced plans to double its $12.4b portfolio to $20 billion within five year. In 2006, its refineries produced over 2mbd and its petrochemical plants over 45 tons . Since its expansion began in 2004, IPIC has invested in Pakistan, Egypt Oman as well as in Japan, Korea, Spain and Austria (OMV) and is planning a petrochemical plant in Kazakhstan. Its projects in process include a pipeline to Fujairah’s port, which would allow over half of Abu Dhabi’s oil to bypass the Strait of Hormuz, which could be blocked by Iran. Avoiding the Strait might also lower shipping costs, avoiding the risk premium associated with the Strait. Many of IPIC’s purchases and a planned joint venture with OMV help build up its technological knowledge.
TAQA (Abu Dhabi National Energy Company) is an energy investment company, 51% of which is owned by the Abu Dhabi government. Through its subsidiaries, which are partly owned and managed by international utilities, TAQA provides 85% for electricity consumed in Abu Dhabi. It has holdings in nine countries including Africa and Asia, the North Sea and Canada’s oil sands. In part, these purchases may be intended both to share technology, diversify sources and to put a price floor for oil – its interests in Canadian oil sands are only viable with oil price over $50-60 a barrel. It has borrowed funds to finance a part of its purchases.
Mubadala is the direct investment arm of the Abu Dhabi government. It has stakes in Ferrari, the private equity firm Carlyle, SR Technik among others. It partnered with other UAE state enterprises Dubal, dubai’s aluminum company and ADNOC to invest in aluminum smelters and oil exploration respectively. It recently announced plans to increase its, it has stakes in aerospace - and yesterday suggested a renewed push into the area, an interest it shares with companies in Dubai and other GCC states. It has also signed MOUs with Boeing in which the company would help Abu Dhabi plan projects and build related components. . In addition to its foreign holdings it also has stakes in some of Abu Dhabi’s state banks.
Dubai
Investment Corporation of Dubai (ICD) is described at the investment arm of the Dubai government, having received the stakes in state and quasi-state owned enterprises from Dubai’s ministry of finance upon its creation in 2006. As such it is the parent of Dubai World, Emirates airline, Dubai Alumnium (Dubal), the National bank of Dubai, Shuaa Capital and Dubai Islamic Bank, Emaar, Dubai World Trade Centre and Jebel Ali Free Zone (the full portfolio is listed on its website). The board of ICD is headed by Sheikh Mohammed al Maktoum and includes high ranking members of the Dubai government and the heads of many of the largest holdings including Dubai World and the state banks. As well as supporting the outward investments of its underlying holdings, the ICD itself may now be investing abroad – it announced investment in India’s Bharti Airtel last month and ICD’s CEO suggested that Dubai was amassing a fund of up to $20b to invest in Korea.
Dubai World is the holding company for many of Dubai’s state enterprises including Dubai Ports World, Dubai Aerospace and others. An IPO for Dubai Ports World last year raised $5 billion – other of Dubai World’s companies, especially those in property have raised funds on the credit markets.
Dubai World’s investment arm Istithmar, has invested the surplus cash from domestic property holdings in private equity and property abroad – managing assets over $10 billion. As they grow, Dubai World has been restructuring some of these investment companies, having merged its two main real estate arms Nakheel and Isthithmar Real Estate last fall to create a new property development vehicle managing over $52 billion in properties. Istithmar itself was renamed Istithmar World with three subdivisions: Istithmar World Capital which invests in private equity and alternatives, Istithmar World Aviation which will invest in aerospace globally (encompassing the holdings in spiceJet, SR Technic and Dubai Aerospace – and capitalizing on the interest in corporate jets in the region) and Istithmar World Ventures which will seek out greenfield investment and startups (investments include joint ventures in climate change mitigation) Istithmar World Capital has deployed $3b to acquire stakes in over 50 companies worth $6b – and Istithmar World as a whole is intended to be self-funding by 2010.
Dubai Holding – is a holding company belonging to Sheikh Mohammed, grouping together his interests in state companies.
Most of its overseas holdings have been acquired through its investment arm, Dubai International Capital (DIC). DIC, established in 2004, has around $14b in assets under management including stakes of EADS, Tussaud’s and Sony. Like Istithmar capital comes from sales of property or other profits from other parts of Dubai holding. DIC’s funds including its Global Strategic Equities and MENA infrastructure fund accept outside investment, including some other SWFs (Qatar, for one) and its board has emerged as a who’s who of investment. It intends to increase its holdings in public and private equity to $25 billion by 2010, with perhaps $5b (or 1/5 of the total portfolio in Asia - India, China and Japan). To date, managers suggested, Asia makes up as much as 30% of its EM portfolio - the rest might be focused on MENA.
Dubai Investment Group is also a subsidiary of Dubai holding – at times the line between DIG and DIC has seemed unclear. Its focus is primarily as a fund of funds, investing largely in banks and financial institutions. It was originally called the Investment Office at its creation in 2005. It has a wide range of subsidiaries which invest in financial institutions, manufacturing, real estate, Sharia-compliant investments among others.
The other five emirates have been less active overseas. Most (Sharjah is an exception with its manufacturing/reexport base) still rely in part of subsidies from the Federal government. Many are now trying to capitalize on proximity to and lower costs than Dubai and Abu Dhabi by setting up export zones and investment vehicles of their own. Most of investment vehicles are primarily focused on attracting inward FDI and chanelling it towards selected sectors rather than investing the proceeds outside. This may change as development proceeds and some of the other emirates try to follow the path blazed by Abu Dhabi and Dubai. The Northern Emirates have also received investment from many of the investment vehicles mentioned above. In the 1970s oil boom, many tried to set up investment banks to receive a share of the oil wealth. This is an incomplete list with several entities with different goals grouped together.
Ras Al Khaimah, has experienced some of the highest levels of growth and investment among the northern emirates in recent years and recently received its own credit rating. The Ras al Khaimah Investment Authority (RAKIA), created in 2005 and headed by Sheikh Saqr Bin Mohammed Al Qasimi, ruler of Ras Al Khaimah, was intended to attract inward investment in a variety of sectors ranging from ceramics to resources. It now is venturing outside also. Its new subsidiary, the RAK Metals and Minerals Investments (RMMI) arm recently signed an MOU to export coal with Sumatra province and plans to invest in India and China, taking advantage of growing demand for metals in emerging Asia. In all, RAKIA and RMMI plan to invest over $1 billion in resource and infrastructure projects in Africa and Asia. Rakeen, its property development arm is involved in a number of projects abroad. RAK Petroleum is investing in various energy projects in the UAE and Oman, with the output to provide power for Ras Al Khaimah.
Sharjah Investment Centre is being developed by the Saudi-based real estate development firm SNASCO. Sharjah also has a number of export zones, including one targeted specifically on attracting Chinese investment.
Ajman Investment and Development Authority is focused on real estate development, primarily within Ajman.
Fujairah has been trying to capitalize on its position as the only Emirate on the gulf of Oman and thus outside of the Persian gulf. Shipments thus can avoid the political risks and security premium costs of passing through the Strait of Hormuz. The Fujairah Investment Establishment, the investment arm of the Fujarah government partnered with Dubai Investments to form El Taif Investments, a private equity firm with an initial capital of $132m. Though based in Fujairah, it will not be limited to investments there or in the Emirates. Fujairah authorities hope that the availability of such funds and the projects they support will attract more foreign investment. The lack of private property has likely been an obstacle to investment – all property belonged to the sheikh.
This note attempts a partial survey of a spectrum of state-backed institutions including holding companies like Dubai World, sovereign wealth funds like ADIA, investment corporations like Istithmar and energy companies like TAQA– all of which have been involved in high profile investment abroad recently. It also includes some entities who have domestic economic development as their charge though it is an incomplete list. With many institutions overlapping, they can be confusing to distinguish the different entities. Their management also tends to overlap - with many of the same rulers and heads of key institutions sitting on multiple boards. The line between the holdings of the government, the ruling family and the private sector often blurs. Some states have created multiple entities with seemingly similar remits, perhaps to encourage competition, perhaps as a trial, further complicating the outlook. Recent restructuring (merging Dubai World's two main property developers for one) to refine investment strategies could avoid some of the overlap though.
Despite the still strong state role in the domestic economy and overseas investment, the private sector has been developing and some of state-owned enterprises are now quasi-private. Many of the mega projects are at least in part public-private partnerships and some of the flagship state companies are being considered for partial privatization though the time line and likelihood is uncertain.
Dubai and Abu Dhabi have a well established set of institutions for domestic and foreign investment, in most cases focused by sectors. Now many of the poorer emirates are following their lead, establishing investment corporations to channel investment in and in some cases back out. There are even a new institutions at the federal level.
UAE federal government
The Emirates Investment Authority, announced in 2007, is intended to invest the surplus reserves of the federal government. It is not yet known whether it will be making overseas acquisitions or what reserves it might receive to invest. The UAE’s budget is mostly contributed by Abu Dhabi and Dubai and usually balances with little surplus. It is possible that it may receive funds from other existing capital or that it could be a coordinating body for the federal governments investment –However, the reserves of the UAE central bank have nearly doubled in 2007 – exceeding $48 billion by the end of September (most recent available data). Like many other institutions, many of those on the EIA’s board are high ranking members of the UAE’s governing council and heads of other institutions such as Dubai World, IPIC and key state banks.
Abu Dhabi
Abu Dhabi Investment Council is the coordinating body for Abu Dhabi’s investment inside and outside the emirate. Its subsidiaries include the Abu Dhabi Investment Authority (ADIA) and the Abu Dhabi Investment Company (ADIC). It will also set investment policies and will be allowed to invest inside the Emirate unlike ADIA. The Abu Dhabi Economic Development Council will facilitate public and private partnerships. Sheikh Khalifa, Abu Dhabi’s ruler is the chairman of both the Investment Council and ADIA.
Abu Dhabi Investment Authority (ADIA) receives the bulk of Abu Dhabi’s fiscal surplus from oil. ADIA is thought to be the largest sovereign wealth fund, managing an estimated $650-700 billion primarily as a portfolio investor. Though little about its holdings or strategy has been disclosed, it is thought to have high exposure to equity and alternatives as well as emerging markets (see Euromoney for the most complete analysis). It entrusts as much as 70% of assets to external managers, with portions of all asset classes managed internally and externally. The existence of a separate direct investment arm (Mubadala, below) and its desire to remain below the radar may have limited its concentrated bets. However, it has taken some larger stakes in 2007 (including states near or above 5% in Citi, EFG Hermes).
ADIC, the first investment company in the UAE and a key financial services firm was founded in 1977. It was jointly owned by ADIA and the National Bank of Abu Dhabi (NBAD). Until recently, its investment services were available only to government clients like ADIA, ADNOC and the finance department but it will now raise funds from the public. To that end, it recently announced a joint venture with UBS to invest in infrastructure in the MENA region (including Turkey). In the spring of 2007, the FT reported that each of ADIC’s three sections, focusing on real estate, private equity and infrastructure respectively intended to raise between $500- 750 million from institutions and high net worth individuals. At that time, it had $200 million in private equity funds. Its focus was thought to be targeted to the UAE, GCC and MENA region. Infrastructure investments include Jordan’s Queen Alia Airport.
International Petroleum Investment Company (IPIC), started as a joint venture between the Abu Dhabi National Oil Company and ADIA in 2004, invests in oil and gas companies overseas. IPIC announced plans to double its $12.4b portfolio to $20 billion within five year. In 2006, its refineries produced over 2mbd and its petrochemical plants over 45 tons . Since its expansion began in 2004, IPIC has invested in Pakistan, Egypt Oman as well as in Japan, Korea, Spain and Austria (OMV) and is planning a petrochemical plant in Kazakhstan. Its projects in process include a pipeline to Fujairah’s port, which would allow over half of Abu Dhabi’s oil to bypass the Strait of Hormuz, which could be blocked by Iran. Avoiding the Strait might also lower shipping costs, avoiding the risk premium associated with the Strait. Many of IPIC’s purchases and a planned joint venture with OMV help build up its technological knowledge.
TAQA (Abu Dhabi National Energy Company) is an energy investment company, 51% of which is owned by the Abu Dhabi government. Through its subsidiaries, which are partly owned and managed by international utilities, TAQA provides 85% for electricity consumed in Abu Dhabi. It has holdings in nine countries including Africa and Asia, the North Sea and Canada’s oil sands. In part, these purchases may be intended both to share technology, diversify sources and to put a price floor for oil – its interests in Canadian oil sands are only viable with oil price over $50-60 a barrel. It has borrowed funds to finance a part of its purchases.
Mubadala is the direct investment arm of the Abu Dhabi government. It has stakes in Ferrari, the private equity firm Carlyle, SR Technik among others. It partnered with other UAE state enterprises Dubal, dubai’s aluminum company and ADNOC to invest in aluminum smelters and oil exploration respectively. It recently announced plans to increase its, it has stakes in aerospace - and yesterday suggested a renewed push into the area, an interest it shares with companies in Dubai and other GCC states. It has also signed MOUs with Boeing in which the company would help Abu Dhabi plan projects and build related components. . In addition to its foreign holdings it also has stakes in some of Abu Dhabi’s state banks.
Dubai
Investment Corporation of Dubai (ICD) is described at the investment arm of the Dubai government, having received the stakes in state and quasi-state owned enterprises from Dubai’s ministry of finance upon its creation in 2006. As such it is the parent of Dubai World, Emirates airline, Dubai Alumnium (Dubal), the National bank of Dubai, Shuaa Capital and Dubai Islamic Bank, Emaar, Dubai World Trade Centre and Jebel Ali Free Zone (the full portfolio is listed on its website). The board of ICD is headed by Sheikh Mohammed al Maktoum and includes high ranking members of the Dubai government and the heads of many of the largest holdings including Dubai World and the state banks. As well as supporting the outward investments of its underlying holdings, the ICD itself may now be investing abroad – it announced investment in India’s Bharti Airtel last month and ICD’s CEO suggested that Dubai was amassing a fund of up to $20b to invest in Korea.
Dubai World is the holding company for many of Dubai’s state enterprises including Dubai Ports World, Dubai Aerospace and others. An IPO for Dubai Ports World last year raised $5 billion – other of Dubai World’s companies, especially those in property have raised funds on the credit markets.
Dubai World’s investment arm Istithmar, has invested the surplus cash from domestic property holdings in private equity and property abroad – managing assets over $10 billion. As they grow, Dubai World has been restructuring some of these investment companies, having merged its two main real estate arms Nakheel and Isthithmar Real Estate last fall to create a new property development vehicle managing over $52 billion in properties. Istithmar itself was renamed Istithmar World with three subdivisions: Istithmar World Capital which invests in private equity and alternatives, Istithmar World Aviation which will invest in aerospace globally (encompassing the holdings in spiceJet, SR Technic and Dubai Aerospace – and capitalizing on the interest in corporate jets in the region) and Istithmar World Ventures which will seek out greenfield investment and startups (investments include joint ventures in climate change mitigation) Istithmar World Capital has deployed $3b to acquire stakes in over 50 companies worth $6b – and Istithmar World as a whole is intended to be self-funding by 2010.
Dubai Holding – is a holding company belonging to Sheikh Mohammed, grouping together his interests in state companies.
Most of its overseas holdings have been acquired through its investment arm, Dubai International Capital (DIC). DIC, established in 2004, has around $14b in assets under management including stakes of EADS, Tussaud’s and Sony. Like Istithmar capital comes from sales of property or other profits from other parts of Dubai holding. DIC’s funds including its Global Strategic Equities and MENA infrastructure fund accept outside investment, including some other SWFs (Qatar, for one) and its board has emerged as a who’s who of investment. It intends to increase its holdings in public and private equity to $25 billion by 2010, with perhaps $5b (or 1/5 of the total portfolio in Asia - India, China and Japan). To date, managers suggested, Asia makes up as much as 30% of its EM portfolio - the rest might be focused on MENA.
Dubai Investment Group is also a subsidiary of Dubai holding – at times the line between DIG and DIC has seemed unclear. Its focus is primarily as a fund of funds, investing largely in banks and financial institutions. It was originally called the Investment Office at its creation in 2005. It has a wide range of subsidiaries which invest in financial institutions, manufacturing, real estate, Sharia-compliant investments among others.
The other five emirates have been less active overseas. Most (Sharjah is an exception with its manufacturing/reexport base) still rely in part of subsidies from the Federal government. Many are now trying to capitalize on proximity to and lower costs than Dubai and Abu Dhabi by setting up export zones and investment vehicles of their own. Most of investment vehicles are primarily focused on attracting inward FDI and chanelling it towards selected sectors rather than investing the proceeds outside. This may change as development proceeds and some of the other emirates try to follow the path blazed by Abu Dhabi and Dubai. The Northern Emirates have also received investment from many of the investment vehicles mentioned above. In the 1970s oil boom, many tried to set up investment banks to receive a share of the oil wealth. This is an incomplete list with several entities with different goals grouped together.
Ras Al Khaimah, has experienced some of the highest levels of growth and investment among the northern emirates in recent years and recently received its own credit rating. The Ras al Khaimah Investment Authority (RAKIA), created in 2005 and headed by Sheikh Saqr Bin Mohammed Al Qasimi, ruler of Ras Al Khaimah, was intended to attract inward investment in a variety of sectors ranging from ceramics to resources. It now is venturing outside also. Its new subsidiary, the RAK Metals and Minerals Investments (RMMI) arm recently signed an MOU to export coal with Sumatra province and plans to invest in India and China, taking advantage of growing demand for metals in emerging Asia. In all, RAKIA and RMMI plan to invest over $1 billion in resource and infrastructure projects in Africa and Asia. Rakeen, its property development arm is involved in a number of projects abroad. RAK Petroleum is investing in various energy projects in the UAE and Oman, with the output to provide power for Ras Al Khaimah.
Sharjah Investment Centre is being developed by the Saudi-based real estate development firm SNASCO. Sharjah also has a number of export zones, including one targeted specifically on attracting Chinese investment.
Ajman Investment and Development Authority is focused on real estate development, primarily within Ajman.
Fujairah has been trying to capitalize on its position as the only Emirate on the gulf of Oman and thus outside of the Persian gulf. Shipments thus can avoid the political risks and security premium costs of passing through the Strait of Hormuz. The Fujairah Investment Establishment, the investment arm of the Fujarah government partnered with Dubai Investments to form El Taif Investments, a private equity firm with an initial capital of $132m. Though based in Fujairah, it will not be limited to investments there or in the Emirates. Fujairah authorities hope that the availability of such funds and the projects they support will attract more foreign investment. The lack of private property has likely been an obstacle to investment – all property belonged to the sheikh.
Monday, February 11, 2008
Ten reasons Dubai real estate will continue to boom
Dubai real estate may well be the next asset class bubble to be created by inappropriate interest rate levels set by the US, alongside Hong Kong property. But there are at least 10 good reasons to think the present realty boom in Dubai will continue for rather longer than many outside observers believe possible.
United Arab Emirates: Sunday, February 10 - 2008 at 13:03
They may seem high now, but property prices will continue to rise
Dubai Property RSS feed
Abu Dhabi's real estate boom hits Dubai developers
US rate cuts to boost house prices in Dubai, Abu Dhabi and Hong Kong
Dubai real estate soon to be the most expensive in the world?
Buying property in Dubai makes good sense for residents
Real estate project launches show signs of slowing down
More Dubai Property stories »
1. Dubai mortgage rates are around 8.5 per cent and have yet to adjust to the recent US rate cuts, which they have to do because of the dollar peg to the dirham. Just a couple of years ago local mortgage rates of seven per cent were available. Therefore the downward pressure on the cost of home finance is clear, and if the local mortgage market follows Hong Kong and becomes more competitive, then interest rates could go much lower, making it significantly cheaper to buy than rent. Real interest rates are already negative due to high local inflation.
2. Rental yields in the Dubai market of 7-10 per cent are abnormally high by international standards. Rents are unlikely to fall in a booming market, so it is more likely that rising capital values will gradually pressure yields down towards global levels. There is no reason why rental yields should be higher in a booming city like Dubai than in a city where the economic outlook is poorer.
3. The hype about Dubai development projects has admittedly duped even this skeptical correspondent over the years. The fact is that far less supply is coming on stream than promised by overenthusiastic developers, due partly to limited supplies of manpower and materials. Dubai Properties is one of the biggest and has just said it will deliver 5,000 units to the freehold market in 2008 which is not nearly enough to meet surging demand.
4. Dubai house prices are still low in absolute terms in comparison to other global cities with similar salary levels. The HSBC survey of house prices in comparison to per capita GDP put Dubai and Abu Dhabi near the bottom. This is a historic anomaly that will be eliminated by price rises.
5. Six years ago, when Dubai freehold began, it was a market without any formal legislation and regulatory infrastructure. Now it has world-class laws, a state-of-the-art land registry and a strongly-led regulatory authority. Hope has been replaced by experience.
6. The Dubai Financial Market crashed in 2006 pushing local investors into property as an alternative. It recovered in late 2007, but is now again trending downwards with global stocks, and has become highly volatile, shifting over 10 per cent in a day. Expect stock market participants to again seek a more stable alternative.
7. Indeed, the absence of investment alternatives is a major theme for 2008. Global stock markets have had their worst January in history. Recent US interest rate cuts leave deposits paying 2.8 per cent. This makes Dubai real estate look attractive as an alternative. Where else offers such a return?
8. In the same way that the local stock market crash attracted foreign bargain hunters to invest last year, foreign investors in search of yield are also increasingly investing in Dubai real estate. Problems in the UK housing market might be dissuading some buyers, but large numbers of oil-rich Russians, for example, are now buying in Dubai.
9. Dubai still has some undeveloped market niches in real estate, such as holiday lets and fractional ownership, which are big and even dominant market phenomena in many beach resorts around the world. This source of higher rental yield on property has therefore yet to be fully tapped.
10. The Dubai Government has been the most proactive developer in the emirate, and its recent legislation and regulatory initiatives suggest that this support is not only likely to continue, but will respond appropriately to any adverse market developments.
United Arab Emirates: Sunday, February 10 - 2008 at 13:03
They may seem high now, but property prices will continue to rise
Dubai Property RSS feed
Abu Dhabi's real estate boom hits Dubai developers
US rate cuts to boost house prices in Dubai, Abu Dhabi and Hong Kong
Dubai real estate soon to be the most expensive in the world?
Buying property in Dubai makes good sense for residents
Real estate project launches show signs of slowing down
More Dubai Property stories »
1. Dubai mortgage rates are around 8.5 per cent and have yet to adjust to the recent US rate cuts, which they have to do because of the dollar peg to the dirham. Just a couple of years ago local mortgage rates of seven per cent were available. Therefore the downward pressure on the cost of home finance is clear, and if the local mortgage market follows Hong Kong and becomes more competitive, then interest rates could go much lower, making it significantly cheaper to buy than rent. Real interest rates are already negative due to high local inflation.
2. Rental yields in the Dubai market of 7-10 per cent are abnormally high by international standards. Rents are unlikely to fall in a booming market, so it is more likely that rising capital values will gradually pressure yields down towards global levels. There is no reason why rental yields should be higher in a booming city like Dubai than in a city where the economic outlook is poorer.
3. The hype about Dubai development projects has admittedly duped even this skeptical correspondent over the years. The fact is that far less supply is coming on stream than promised by overenthusiastic developers, due partly to limited supplies of manpower and materials. Dubai Properties is one of the biggest and has just said it will deliver 5,000 units to the freehold market in 2008 which is not nearly enough to meet surging demand.
4. Dubai house prices are still low in absolute terms in comparison to other global cities with similar salary levels. The HSBC survey of house prices in comparison to per capita GDP put Dubai and Abu Dhabi near the bottom. This is a historic anomaly that will be eliminated by price rises.
5. Six years ago, when Dubai freehold began, it was a market without any formal legislation and regulatory infrastructure. Now it has world-class laws, a state-of-the-art land registry and a strongly-led regulatory authority. Hope has been replaced by experience.
6. The Dubai Financial Market crashed in 2006 pushing local investors into property as an alternative. It recovered in late 2007, but is now again trending downwards with global stocks, and has become highly volatile, shifting over 10 per cent in a day. Expect stock market participants to again seek a more stable alternative.
7. Indeed, the absence of investment alternatives is a major theme for 2008. Global stock markets have had their worst January in history. Recent US interest rate cuts leave deposits paying 2.8 per cent. This makes Dubai real estate look attractive as an alternative. Where else offers such a return?
8. In the same way that the local stock market crash attracted foreign bargain hunters to invest last year, foreign investors in search of yield are also increasingly investing in Dubai real estate. Problems in the UK housing market might be dissuading some buyers, but large numbers of oil-rich Russians, for example, are now buying in Dubai.
9. Dubai still has some undeveloped market niches in real estate, such as holiday lets and fractional ownership, which are big and even dominant market phenomena in many beach resorts around the world. This source of higher rental yield on property has therefore yet to be fully tapped.
10. The Dubai Government has been the most proactive developer in the emirate, and its recent legislation and regulatory initiatives suggest that this support is not only likely to continue, but will respond appropriately to any adverse market developments.
Dubai Chamber goes green
Posted on Monday, 11 February 2008
Industry Sector Government
Country United Arab Emirates
Dubai Chamber has demonstrated that organisations don't need to wait to build new offices before making their premises green. According to the Centre for Responsible Business's CSR Al Youm released today, existing work environments can be greened, which benefits the bottom-line by reducing input costs like staff and electricity, mobilises staff and addresses the UAE's critical energy, water and waste challenges.
Jagath Gunawardena, Chief Engineer at Dubai Chamber, explains: "The Chamber began working on saving energy and water for its 18-storey building a decade ago. Between 1997 and 2003, the Chamber was able to reduce energy consumption by 33% and water consumption by 60%".
These reductions come in spite of an increase in the buildings use which now hosts more than 600 events a year, as well as the Chamber's University of Dubai, and other regular office space. Those who have seen the Dubai Chamber building at night would realise that it's one of the few buildings with its light offs after-hours. In fact the energy consumption of the building is now about 6.5 kWh/m2/year, which is a minute fraction of the UAE average (250 kWh/m2/year as reported in MEP Middle East) and makes this building a model for others in Dubai. Still, Dubai Chamber acknowledges that more can and will be done: "Following a recent environmental audit of the Chamber's building, more improvements will be made including optimizing lift use, lighting sensors in toilets and stairways, and the use of outdoor air during winter months for cooling. We are also looking to apply for LEED or Greenstar certification as well as implement ISO 14001" said Gunawardena.
But the green initiatives at Dubai Chamber don't stop with water and energy efficiency. The recently formed environmental committee has launched a recycling initiative thanks to the efforts of our 3Rs (reduce, reuse, recycle) team. Although in early stages, this initiatives has built relations between departments, facilitated communication and teamwork, and been very positively received all round. Thanks to the enthusiasm of employees and support from management, more environmental initiatives are also likely to follow soon.
The example of the Dubai Chamber's green initiative is one of many in the latest CSR Al Youm special on greening workplaces. This topic is increasingly important to businesses in Dubai, following last year's announcement of a new law on green construction, the formation of the Emirates Green Building Council, the certification of the first Platinum LEED building in the Middle East in Dubai, Dubai World's rules on green building, and the creation of the Masdar initiative in Abu Dhabi.
According to the CSR newsletter, green or sustainable buildings are constructed in a way that minimises their environmental impact, using less environmentally damaging materials and technologies. In addition, the ongoing use of such buildings is more environmentally sound too because they are more energy and water efficient. They tend also to be healthier and more pleasurable working or living environments.
Studies show that employee productivity rises significantly and absenteeism reduces markedly in eco-friendly buildings due to the creation of more natural surroundings (using natural light, outside air ventilation and natural furnishings), allowing employees to feel healthier and have higher energy levels too. Beyond increased employee productivity, greener workplaces help companies to substantially reduce costs through water and energy savings. Statistics from the Dubai Ministry of Economic and Commercial Affairs indicate that buildings consume 70% of Dubai's energy, well above the OECD average of 40% even in countries where air-conditioning is required for much of the year, indicating that buildings in the UAE could be much more efficient. Not only would the increased efficiency allow businesses to assist the UAE to respond to its energy and water challenges, but it would also assist their bottom line in more ways than one too.
The costs of constructing greener buildings are usually grossly overestimated. An international study by the World Business Council for Sustainable Development indicates that on average people believe that green buildings cost an extra 17% to build, but in fact it costs less than 5%. Furthermore, the lower ongoing usage costs of such buildings due to lower energy and water consumption ensures that these extra costs are paid off thereby saving users thousands of dirhams each year.
However greening workplaces does not begin and end with the construction and renovation of buildings. Businesses can also create green workplaces through employee training, recycling, carpooling, home-work flexibility, environmental policies and other means. Awareness raising, incentives and management support are fundamental to the success of such initiatives.
This edition of ‘CSR Al Youm' includes other topics such as the Win-Win of Carpooling, How to be a Green Office Champion, Sustainability Reporting, an Energy Efficient Mapping Resource, the DFSA Hedge Fund Code of Practice and a tool to help companies move take greening their office to the next level. A free copy can be downloaded at: downloading a free copy of ‘CSR Al Youm' newsletter is available on http://www.dubai-ethics.ae/derc/Compass.aspx.
Dubai Chamber established the Centre for Responsible Business, formally known as the Dubai Ethics Resource Centre, in 2004 to foster corporate integrity, and to assist organisations in applying responsible business practices that enhance performance and competitive edge.
Industry Sector Government
Country United Arab Emirates
Dubai Chamber has demonstrated that organisations don't need to wait to build new offices before making their premises green. According to the Centre for Responsible Business's CSR Al Youm released today, existing work environments can be greened, which benefits the bottom-line by reducing input costs like staff and electricity, mobilises staff and addresses the UAE's critical energy, water and waste challenges.
Jagath Gunawardena, Chief Engineer at Dubai Chamber, explains: "The Chamber began working on saving energy and water for its 18-storey building a decade ago. Between 1997 and 2003, the Chamber was able to reduce energy consumption by 33% and water consumption by 60%".
These reductions come in spite of an increase in the buildings use which now hosts more than 600 events a year, as well as the Chamber's University of Dubai, and other regular office space. Those who have seen the Dubai Chamber building at night would realise that it's one of the few buildings with its light offs after-hours. In fact the energy consumption of the building is now about 6.5 kWh/m2/year, which is a minute fraction of the UAE average (250 kWh/m2/year as reported in MEP Middle East) and makes this building a model for others in Dubai. Still, Dubai Chamber acknowledges that more can and will be done: "Following a recent environmental audit of the Chamber's building, more improvements will be made including optimizing lift use, lighting sensors in toilets and stairways, and the use of outdoor air during winter months for cooling. We are also looking to apply for LEED or Greenstar certification as well as implement ISO 14001" said Gunawardena.
But the green initiatives at Dubai Chamber don't stop with water and energy efficiency. The recently formed environmental committee has launched a recycling initiative thanks to the efforts of our 3Rs (reduce, reuse, recycle) team. Although in early stages, this initiatives has built relations between departments, facilitated communication and teamwork, and been very positively received all round. Thanks to the enthusiasm of employees and support from management, more environmental initiatives are also likely to follow soon.
The example of the Dubai Chamber's green initiative is one of many in the latest CSR Al Youm special on greening workplaces. This topic is increasingly important to businesses in Dubai, following last year's announcement of a new law on green construction, the formation of the Emirates Green Building Council, the certification of the first Platinum LEED building in the Middle East in Dubai, Dubai World's rules on green building, and the creation of the Masdar initiative in Abu Dhabi.
According to the CSR newsletter, green or sustainable buildings are constructed in a way that minimises their environmental impact, using less environmentally damaging materials and technologies. In addition, the ongoing use of such buildings is more environmentally sound too because they are more energy and water efficient. They tend also to be healthier and more pleasurable working or living environments.
Studies show that employee productivity rises significantly and absenteeism reduces markedly in eco-friendly buildings due to the creation of more natural surroundings (using natural light, outside air ventilation and natural furnishings), allowing employees to feel healthier and have higher energy levels too. Beyond increased employee productivity, greener workplaces help companies to substantially reduce costs through water and energy savings. Statistics from the Dubai Ministry of Economic and Commercial Affairs indicate that buildings consume 70% of Dubai's energy, well above the OECD average of 40% even in countries where air-conditioning is required for much of the year, indicating that buildings in the UAE could be much more efficient. Not only would the increased efficiency allow businesses to assist the UAE to respond to its energy and water challenges, but it would also assist their bottom line in more ways than one too.
The costs of constructing greener buildings are usually grossly overestimated. An international study by the World Business Council for Sustainable Development indicates that on average people believe that green buildings cost an extra 17% to build, but in fact it costs less than 5%. Furthermore, the lower ongoing usage costs of such buildings due to lower energy and water consumption ensures that these extra costs are paid off thereby saving users thousands of dirhams each year.
However greening workplaces does not begin and end with the construction and renovation of buildings. Businesses can also create green workplaces through employee training, recycling, carpooling, home-work flexibility, environmental policies and other means. Awareness raising, incentives and management support are fundamental to the success of such initiatives.
This edition of ‘CSR Al Youm' includes other topics such as the Win-Win of Carpooling, How to be a Green Office Champion, Sustainability Reporting, an Energy Efficient Mapping Resource, the DFSA Hedge Fund Code of Practice and a tool to help companies move take greening their office to the next level. A free copy can be downloaded at: downloading a free copy of ‘CSR Al Youm' newsletter is available on http://www.dubai-ethics.ae/derc/Compass.aspx.
Dubai Chamber established the Centre for Responsible Business, formally known as the Dubai Ethics Resource Centre, in 2004 to foster corporate integrity, and to assist organisations in applying responsible business practices that enhance performance and competitive edge.
In Oil-Rich Mideast, Shades of the Ivy League
TAMAR LEWIN
- Last modified: February 11. 2008 8:29AM
DOHA, Qatar — On a hot October evening, hundreds of families flocked to the sumptuous Ritz Carlton here in this Persian Gulf capital for an unusual college fair, the Education City roadshow.
Qataris, Bangladeshis, Syrians, Indians, Egyptians — in saris, in suits, in dishdashis, in jeans — came to hear what it takes to win admission to one of the five American universities that offer degrees at Education City, a 2,500-acre campus on the outskirts of Doha where oil and gas money pays for everything from adventurous architecture to professors’ salaries.
Education City, the largest enclave of American universities overseas, has fast become the elite of Qatari education, a sort of local Ivy League. But the five American schools have started small, with only about 300 slots among them for next year’s entering classes. So there is a slight buzz of anxiety at the fair, which starts with a nonalcoholic cocktail hour, with fruit juices passed on silver trays as families circulate among the booths.
“I just came to get my mind together,” said Rowea al-Shrem, a junior in a head-to-toe black abaya who came to the fair on her own. “I wanted to know what to expect, so I don’t go crazy next year.”
At a time when almost every major American university is concerned with expanding its global reach, Education City provides a glimpse of the range of American expertise in demand overseas. Five universities have brought programs here, and more are on their way.
Cornell’s medical school, which combines pre-med training and professional training over six years, will graduate the first Qatar-trained physicians this spring. Virginia Commonwealth University brought its art and design program to Qatari women 10 years ago and began admitting men this year. Carnegie Mellon offers computer and business programs.
Texas A&M, the largest of the Education City schools, teaches engineering, with petroleum engineering its largest program. Georgetown’s foreign service school is the latest arrival. Soon, Northwestern University’s journalism program will come, too.
When the crowd files into the ballroom to hear about the admission process — first in English, with Arabic translation available through headphones, then later in Arabic — what it hears is much the same as at an information session for a selective American college.
“We want to see students who are passionate and dedicated,” Valerie Jeremijenko, Virginia Commonwealth’s dean of student affairs, tells the crowd. “It’s competitive, but don’t let that discourage you.”
She sounds all the familiar themes: Work hard this year, so you can get great recommendations. Participate in extracurricular activities. Do not obsess about SAT scores, because we look at the whole person.
Education City is so firmly ensconced as the gold standard here that many students apply to several of its schools, knowing that their career will be determined by where they are accepted.
When Dana Hadan was a student at Doha’s leading girls’ science high school, she wanted to be a doctor and applied to Cornell’s medical school. But Cornell rejected her, and her parents did not want her to go to a medical school overseas. So Ms. Hadan enrolled instead in the business program at Carnegie Mellon.
Now, as a third-year student, she is happily learning macroeconomics and marketing. “I was never interested in business, but now I’m passionate about it,” said Ms. Hadan, a lively 20-year-old.
She never considered the locally run Qatar University: “I knew I wanted Education City,” she said.
Admission standards, degree requirements and curriculum — complete, in most cases, with an introductory two years of broad liberal arts — at the Education City schools are the same as at the American home campuses. So is the philosophy of teaching.
“There are lots of programs in different countries that are ‘kind of like,’ ‘in partnership with,’ or ‘inspired by’ American education,” said Charles E. Thorpe, the dean of Carnegie Mellon in Qatar. “But this is American education. And for many of our students, that’s a very big change. Almost all of them went to single-sex secondary schools. As recently as six years ago, the elementary reader in Qatar was the Koran, so students learned beautiful classical Arabic, but they had no experience with questions like ‘What do you think the author meant by that?’ or ‘Do you agree or disagree?’ ”
Education City is in many ways a study in contradictions, an island of American-style open debate in what remains an Islamic monarchy, albeit a liberal one by regional standards. Education City graduates will be a broadly educated elite, who have had extended contact with American professors and American ways of thinking, and, in some cases, spent time at their school’s home campus back in the United States.
Although it is still small and new, it could be a seedbed of change, with a profound impact on Qatar’s future and its relations with the United States — and perhaps, some Qatari parents worry, on their traditional way of life.
Opportunities for Women
Education City represents broad opportunities for women, in a nation where many families do not allow their daughters to travel overseas for higher education or to mix casually with men. Cornell stresses, proudly, that it was Qatar’s first coeducational institution of higher learning.
The female students are very much aware of their new opportunities and the support they have received from Sheika Mozah Bint Nasser al-Missned, the emir’s second wife and a strong advocate of women’s education. She is chairwoman of the Qatar Foundation, which runs Education City.
“I don’t want my father’s money or my husband’s money,” said Maryam al-Ibrahim, a 21-year-old second-year student at Virginia Commonwealth. “I want to work for a private company and be myself, and I would like to become someone important here.”
Mais Taha, a Texas A&M petroleum-engineering student, glows as she talks about her classes, including Reservoir Fluids — hydrocarbons, she explains sweetly — and Drilling.
“I’m one of the first Qatari girls willing to go out in the field and put on a coverall,” she said. “All the technicians were treating me as a princess, because I’d come in wearing an abaya, and then go out in overalls. And I can’t wait until I can go out and work on a rig.”
No wonder, then, that some Qatari parents are wary of Education City. “I know some girls who applied here, and their parents said they were not supposed to be hanging out with guys, but when they came they realized they had to, because of homework and projects,” Ms. Hadan said.
Carnegie Mellon feels like an American institution, with Mental Health Month posters on attention-deficit hyperactivity disorder and depression, Starbucks and the student bake sale, where Reem Khaled, preparing a business project, sells Betty Crocker brownies and pineapple cake and surveys customer interest in healthier options.
How much to localize the curriculum is an ongoing issue at the Education City schools, where officials sometimes find that problems and ideas transposed from America do not necessarily make much sense. “We had a problem that involved a boy whose after-school job was shoveling snow for so much an hour,” Mr. Thorpe said. The snow was not a problem, since Qataris had seen snow on television, he said. What was fundamentally unfamiliar was the concept of an after-school job.
The Education City schools often mirror American campus culture: Texas A&M holds the Aggie Muster every April, just like the College Station, Tex., campus. And at Carnegie Mellon, Ms. Hadan, working with the student government, helped organize “Crazy Week,” culminating in Tartan Day, when students wear the Carnegie Mellon plaid. “Everyone has at least a T-shirt,” she said. But on Pajama Day, the divide between Qataris and non-Qataris, a majority of Carnegie Mellon’s students, became clearer than ever. Some non-Qatari students arrived in full sleep regalia, complete with fuzzy slippers and teddy bears.
Ms. Hadan and the other Qataris remained in traditional dress, women in black abayas and head scarves, men in long white robes and headdresses. “Because of my culture, I couldn’t wear pajamas; it’s too embarrassing,” said Khalid al-Sooj, 19.
For many Education City students, one big draw is the opportunity to visit the American home campus, whether for a semester or a few weeks.
“I want to live that experience of studying abroad, because I believe it makes you grow,” said Ms. Hadan, who is spending the spring semester in Pittsburgh, with her parents’ blessing.
Whether the job market will view Education City graduates the same as American graduates of the same schools is not yet clear. The big test is approaching, as Cornell’s inaugural class applies for its medical residencies.
“We’re about to find out if they’re accepted the same as Cornell graduates in New York,” said Dr. Daniel Alonso, the dean of Weill Cornell medical school in Qatar. “They’ve been doing as well on the tests, but it remains to be seen.”
Cornell graduates in New York typically apply for 20 or 30 residencies to sure that they get a place, Dr. Alonso said. But uncertainty among the Qatar graduates prompted Khalid al-Khelaifi to apply to more than 60 American residency programs, just to be safe.
“We’re the first batch, so no one knows how we’ll do,” he said.Paying the Bills
Education City is an expensive experiment, made possible by Qatar’s immense oil and gas wealth. For the Cornell medical school alone, the Qatar Foundation promised $750 million over 11 years.
While American universities in other parts of the world look to tuition to support their overseas branches, the branches in Qatar depend on government largess: Qatar pays for the architecturally stunning classroom buildings, the faculty salaries and housing and transportation, and it has made multimillion-dollar gifts to the Education City universities.
“Had the Qatar Foundation not been willing to provide the level of support it did, we wouldn’t have considered going beyond a study-abroad site,” said Mark Weichold, dean of Texas A&M in Qatar.
Dr. Abdulla al-Thani, the Qatar Foundation’s vice president for education, declined to discuss specific gifts but said the foundation had often endowed chairs at the universities that have agreed to come to Education City.
Probably the biggest hurdle for American universities in Qatar is getting the right number and mix of faculty members. Even with free housing, bonus pay and big tax advantages, few professors want to relocate to the Persian Gulf, so many schools depend in good part on “fly-bys” who come for three or four weeks from the United States to give a series of lectures.
“We have half a dozen faculty who moved to Qatar, and 30 or 40 who go for a couple weeks,” said Dr. Antonio M. Gotto Jr., dean of Weill Cornell Medical School in New York. “We’re trying to recruit as many faculty as possible who will stay over there. About 15 percent of our lectures are through videoconferencing and ideally, I’d like to get that down to 5 percent.”
While the Qatar branches have a natural attraction for certain professors — Texas A&M’s petroleum engineers, say, or Georgetown’s experts in Middle Eastern politics — the Gulf does not interest everyone.
“You don’t get the full range of faculty here,” said Lynn Carter, a computer-science professor in his 19th year at Carnegie Mellon and his second of a three-year contract to teach in Qatar. “You get a lot of people at the end of their careers. It’s not good for young faculty with mortgages and young kids and tenure hopes. Coming to Qatar, where you don’t have graduate students and research grants, does you no good for getting tenure.”
While each Education City school offers a specialized program, Qatar hopes to meld them into a new entity, almost like a university whose departments are all independent. Students are encouraged to cross-register, so that Texas A&M’s engineering students can take art classes at Virginia Commonwealth.
“Personally, I like what the liberal arts do in the United States, but if you look at what our country needs right now, we need people trained in the oil and gas areas, we need doctors, we need media, so those are the programs we are bringing in,” said Dr. Thani, of the Qatar Foundation. “Now we are trying to create synergy between the different schools on campus, so it will offer more of what a large university would offer.”
In a nation where many Qataris, with their maids and drivers, live quite apart from the non-Qataris who make up most of the population, Education City mixes students of all nationalities. About half of the students are Qataris, and while they have some advantages — including a yearlong academic program to bolster the skills of those seeking admission — the Qatar Foundation supports non-Qataris, too, forgiving tuition loans to those who stay to work in Qatar after getting their degree.
“We think diversity is something very good, and we do not want to reduce our standards to admit more Qataris,” Dr. Thani said.
Opening Young Minds
Many Education City students are excited by their exposure to the broad array of cultures and new ways of thinking. At Georgetown, for example, “The Problem of God,” a required course, is immensely popular.
“It was amazing,” said Ibrahim al-Derbasti, a Qatari student. “We had Christians, Muslims, Hindus and an atheist. We talked about the difference between faith and religion. I had lived in Houston for four years, but I never understood the Trinity. Now I get it. Well, I don’t really get how Jesus is the son of God, but I understand the idea.”
In Gary Wasserman’s “U.S. Political Systems” course at Georgetown, a class on the 1977 litigation over neo-Nazis’ right to demonstrate in Skokie, Ill., quickly took a different course than it might have in an American classroom, with more students concerned with the problems of unfettered free speech. “It’s complicated, because in protecting civil liberties of one group you might be taking away the civil rights of others,” said Tara Makarem, a Lebanese-Syrian student, who had been troubled by the Danish publication of anti-Muslim cartoons in 2006.
And, a Saudi freshman wondered, if the A.C.L.U. defended the Nazis’ right to express hateful views in Skokie, why did no one protect Don Imus — he called him “Amos” — from losing his radio job for making racially offensive remarks of a kind accepted in rap lyrics?
Professor Wasserman, who previously taught in China, tried to find answers, talking about commercial pressures on broadcasters.
But Mohammed, the Saudi student who did not want his full name used, was still puzzled. “It’s almost like they added another thing to the Bill of Rights, the right for every American not to be offended,” he mused.
Such discussions make Qatar an invigorating place to teach, Professor Wasserman said.
“They come up with questions you hadn’t thought of,” he said. “You see how much they want to be a part of a globalized world, but you also see that they don’t want to have to give up their faith, their family, their traditions. And why should they?”
- Last modified: February 11. 2008 8:29AM
DOHA, Qatar — On a hot October evening, hundreds of families flocked to the sumptuous Ritz Carlton here in this Persian Gulf capital for an unusual college fair, the Education City roadshow.
Qataris, Bangladeshis, Syrians, Indians, Egyptians — in saris, in suits, in dishdashis, in jeans — came to hear what it takes to win admission to one of the five American universities that offer degrees at Education City, a 2,500-acre campus on the outskirts of Doha where oil and gas money pays for everything from adventurous architecture to professors’ salaries.
Education City, the largest enclave of American universities overseas, has fast become the elite of Qatari education, a sort of local Ivy League. But the five American schools have started small, with only about 300 slots among them for next year’s entering classes. So there is a slight buzz of anxiety at the fair, which starts with a nonalcoholic cocktail hour, with fruit juices passed on silver trays as families circulate among the booths.
“I just came to get my mind together,” said Rowea al-Shrem, a junior in a head-to-toe black abaya who came to the fair on her own. “I wanted to know what to expect, so I don’t go crazy next year.”
At a time when almost every major American university is concerned with expanding its global reach, Education City provides a glimpse of the range of American expertise in demand overseas. Five universities have brought programs here, and more are on their way.
Cornell’s medical school, which combines pre-med training and professional training over six years, will graduate the first Qatar-trained physicians this spring. Virginia Commonwealth University brought its art and design program to Qatari women 10 years ago and began admitting men this year. Carnegie Mellon offers computer and business programs.
Texas A&M, the largest of the Education City schools, teaches engineering, with petroleum engineering its largest program. Georgetown’s foreign service school is the latest arrival. Soon, Northwestern University’s journalism program will come, too.
When the crowd files into the ballroom to hear about the admission process — first in English, with Arabic translation available through headphones, then later in Arabic — what it hears is much the same as at an information session for a selective American college.
“We want to see students who are passionate and dedicated,” Valerie Jeremijenko, Virginia Commonwealth’s dean of student affairs, tells the crowd. “It’s competitive, but don’t let that discourage you.”
She sounds all the familiar themes: Work hard this year, so you can get great recommendations. Participate in extracurricular activities. Do not obsess about SAT scores, because we look at the whole person.
Education City is so firmly ensconced as the gold standard here that many students apply to several of its schools, knowing that their career will be determined by where they are accepted.
When Dana Hadan was a student at Doha’s leading girls’ science high school, she wanted to be a doctor and applied to Cornell’s medical school. But Cornell rejected her, and her parents did not want her to go to a medical school overseas. So Ms. Hadan enrolled instead in the business program at Carnegie Mellon.
Now, as a third-year student, she is happily learning macroeconomics and marketing. “I was never interested in business, but now I’m passionate about it,” said Ms. Hadan, a lively 20-year-old.
She never considered the locally run Qatar University: “I knew I wanted Education City,” she said.
Admission standards, degree requirements and curriculum — complete, in most cases, with an introductory two years of broad liberal arts — at the Education City schools are the same as at the American home campuses. So is the philosophy of teaching.
“There are lots of programs in different countries that are ‘kind of like,’ ‘in partnership with,’ or ‘inspired by’ American education,” said Charles E. Thorpe, the dean of Carnegie Mellon in Qatar. “But this is American education. And for many of our students, that’s a very big change. Almost all of them went to single-sex secondary schools. As recently as six years ago, the elementary reader in Qatar was the Koran, so students learned beautiful classical Arabic, but they had no experience with questions like ‘What do you think the author meant by that?’ or ‘Do you agree or disagree?’ ”
Education City is in many ways a study in contradictions, an island of American-style open debate in what remains an Islamic monarchy, albeit a liberal one by regional standards. Education City graduates will be a broadly educated elite, who have had extended contact with American professors and American ways of thinking, and, in some cases, spent time at their school’s home campus back in the United States.
Although it is still small and new, it could be a seedbed of change, with a profound impact on Qatar’s future and its relations with the United States — and perhaps, some Qatari parents worry, on their traditional way of life.
Opportunities for Women
Education City represents broad opportunities for women, in a nation where many families do not allow their daughters to travel overseas for higher education or to mix casually with men. Cornell stresses, proudly, that it was Qatar’s first coeducational institution of higher learning.
The female students are very much aware of their new opportunities and the support they have received from Sheika Mozah Bint Nasser al-Missned, the emir’s second wife and a strong advocate of women’s education. She is chairwoman of the Qatar Foundation, which runs Education City.
“I don’t want my father’s money or my husband’s money,” said Maryam al-Ibrahim, a 21-year-old second-year student at Virginia Commonwealth. “I want to work for a private company and be myself, and I would like to become someone important here.”
Mais Taha, a Texas A&M petroleum-engineering student, glows as she talks about her classes, including Reservoir Fluids — hydrocarbons, she explains sweetly — and Drilling.
“I’m one of the first Qatari girls willing to go out in the field and put on a coverall,” she said. “All the technicians were treating me as a princess, because I’d come in wearing an abaya, and then go out in overalls. And I can’t wait until I can go out and work on a rig.”
No wonder, then, that some Qatari parents are wary of Education City. “I know some girls who applied here, and their parents said they were not supposed to be hanging out with guys, but when they came they realized they had to, because of homework and projects,” Ms. Hadan said.
Carnegie Mellon feels like an American institution, with Mental Health Month posters on attention-deficit hyperactivity disorder and depression, Starbucks and the student bake sale, where Reem Khaled, preparing a business project, sells Betty Crocker brownies and pineapple cake and surveys customer interest in healthier options.
How much to localize the curriculum is an ongoing issue at the Education City schools, where officials sometimes find that problems and ideas transposed from America do not necessarily make much sense. “We had a problem that involved a boy whose after-school job was shoveling snow for so much an hour,” Mr. Thorpe said. The snow was not a problem, since Qataris had seen snow on television, he said. What was fundamentally unfamiliar was the concept of an after-school job.
The Education City schools often mirror American campus culture: Texas A&M holds the Aggie Muster every April, just like the College Station, Tex., campus. And at Carnegie Mellon, Ms. Hadan, working with the student government, helped organize “Crazy Week,” culminating in Tartan Day, when students wear the Carnegie Mellon plaid. “Everyone has at least a T-shirt,” she said. But on Pajama Day, the divide between Qataris and non-Qataris, a majority of Carnegie Mellon’s students, became clearer than ever. Some non-Qatari students arrived in full sleep regalia, complete with fuzzy slippers and teddy bears.
Ms. Hadan and the other Qataris remained in traditional dress, women in black abayas and head scarves, men in long white robes and headdresses. “Because of my culture, I couldn’t wear pajamas; it’s too embarrassing,” said Khalid al-Sooj, 19.
For many Education City students, one big draw is the opportunity to visit the American home campus, whether for a semester or a few weeks.
“I want to live that experience of studying abroad, because I believe it makes you grow,” said Ms. Hadan, who is spending the spring semester in Pittsburgh, with her parents’ blessing.
Whether the job market will view Education City graduates the same as American graduates of the same schools is not yet clear. The big test is approaching, as Cornell’s inaugural class applies for its medical residencies.
“We’re about to find out if they’re accepted the same as Cornell graduates in New York,” said Dr. Daniel Alonso, the dean of Weill Cornell medical school in Qatar. “They’ve been doing as well on the tests, but it remains to be seen.”
Cornell graduates in New York typically apply for 20 or 30 residencies to sure that they get a place, Dr. Alonso said. But uncertainty among the Qatar graduates prompted Khalid al-Khelaifi to apply to more than 60 American residency programs, just to be safe.
“We’re the first batch, so no one knows how we’ll do,” he said.Paying the Bills
Education City is an expensive experiment, made possible by Qatar’s immense oil and gas wealth. For the Cornell medical school alone, the Qatar Foundation promised $750 million over 11 years.
While American universities in other parts of the world look to tuition to support their overseas branches, the branches in Qatar depend on government largess: Qatar pays for the architecturally stunning classroom buildings, the faculty salaries and housing and transportation, and it has made multimillion-dollar gifts to the Education City universities.
“Had the Qatar Foundation not been willing to provide the level of support it did, we wouldn’t have considered going beyond a study-abroad site,” said Mark Weichold, dean of Texas A&M in Qatar.
Dr. Abdulla al-Thani, the Qatar Foundation’s vice president for education, declined to discuss specific gifts but said the foundation had often endowed chairs at the universities that have agreed to come to Education City.
Probably the biggest hurdle for American universities in Qatar is getting the right number and mix of faculty members. Even with free housing, bonus pay and big tax advantages, few professors want to relocate to the Persian Gulf, so many schools depend in good part on “fly-bys” who come for three or four weeks from the United States to give a series of lectures.
“We have half a dozen faculty who moved to Qatar, and 30 or 40 who go for a couple weeks,” said Dr. Antonio M. Gotto Jr., dean of Weill Cornell Medical School in New York. “We’re trying to recruit as many faculty as possible who will stay over there. About 15 percent of our lectures are through videoconferencing and ideally, I’d like to get that down to 5 percent.”
While the Qatar branches have a natural attraction for certain professors — Texas A&M’s petroleum engineers, say, or Georgetown’s experts in Middle Eastern politics — the Gulf does not interest everyone.
“You don’t get the full range of faculty here,” said Lynn Carter, a computer-science professor in his 19th year at Carnegie Mellon and his second of a three-year contract to teach in Qatar. “You get a lot of people at the end of their careers. It’s not good for young faculty with mortgages and young kids and tenure hopes. Coming to Qatar, where you don’t have graduate students and research grants, does you no good for getting tenure.”
While each Education City school offers a specialized program, Qatar hopes to meld them into a new entity, almost like a university whose departments are all independent. Students are encouraged to cross-register, so that Texas A&M’s engineering students can take art classes at Virginia Commonwealth.
“Personally, I like what the liberal arts do in the United States, but if you look at what our country needs right now, we need people trained in the oil and gas areas, we need doctors, we need media, so those are the programs we are bringing in,” said Dr. Thani, of the Qatar Foundation. “Now we are trying to create synergy between the different schools on campus, so it will offer more of what a large university would offer.”
In a nation where many Qataris, with their maids and drivers, live quite apart from the non-Qataris who make up most of the population, Education City mixes students of all nationalities. About half of the students are Qataris, and while they have some advantages — including a yearlong academic program to bolster the skills of those seeking admission — the Qatar Foundation supports non-Qataris, too, forgiving tuition loans to those who stay to work in Qatar after getting their degree.
“We think diversity is something very good, and we do not want to reduce our standards to admit more Qataris,” Dr. Thani said.
Opening Young Minds
Many Education City students are excited by their exposure to the broad array of cultures and new ways of thinking. At Georgetown, for example, “The Problem of God,” a required course, is immensely popular.
“It was amazing,” said Ibrahim al-Derbasti, a Qatari student. “We had Christians, Muslims, Hindus and an atheist. We talked about the difference between faith and religion. I had lived in Houston for four years, but I never understood the Trinity. Now I get it. Well, I don’t really get how Jesus is the son of God, but I understand the idea.”
In Gary Wasserman’s “U.S. Political Systems” course at Georgetown, a class on the 1977 litigation over neo-Nazis’ right to demonstrate in Skokie, Ill., quickly took a different course than it might have in an American classroom, with more students concerned with the problems of unfettered free speech. “It’s complicated, because in protecting civil liberties of one group you might be taking away the civil rights of others,” said Tara Makarem, a Lebanese-Syrian student, who had been troubled by the Danish publication of anti-Muslim cartoons in 2006.
And, a Saudi freshman wondered, if the A.C.L.U. defended the Nazis’ right to express hateful views in Skokie, why did no one protect Don Imus — he called him “Amos” — from losing his radio job for making racially offensive remarks of a kind accepted in rap lyrics?
Professor Wasserman, who previously taught in China, tried to find answers, talking about commercial pressures on broadcasters.
But Mohammed, the Saudi student who did not want his full name used, was still puzzled. “It’s almost like they added another thing to the Bill of Rights, the right for every American not to be offended,” he mused.
Such discussions make Qatar an invigorating place to teach, Professor Wasserman said.
“They come up with questions you hadn’t thought of,” he said. “You see how much they want to be a part of a globalized world, but you also see that they don’t want to have to give up their faith, their family, their traditions. And why should they?”
$1 billion investment on the way
By ARTHUR MACDONALD
MANAMA: Venture Capital Bank (VC-Bank) will invest $1 billion in the Middle East and North Africa by the end of this year.More than 25 per cent of the investment will be in Bahrain.
New projects include a $150 million Reef Island development of two residential tower blocks in the kingdom.
Speaking after the bank's annual general meeting yesterday, chairman Dr Ghassan Ahmed Sulaiman said the bank was reviewing its strategy after a very successful year and looking to expand its investment portfolio geographically.
He said they had made some investments in Jordan and Egypt and put $113m into a real estate venture in Oman.
But he said they would be prepared to look at Europe and Asia in the future and would not rule out investment in Iran if the political and economic situation offered opportunities.
"There are a lot of opportunities even in countries that are not enjoying an economic boom," he said.
Having completed its second year of being fully operational, the bank recorded a growth of 143pc last year, and reported $32.3m net profit.
"VC-Bank is a testament of how an innovative vision can materialise in a manner which far exceeds expectations for such a young firm. The bank enjoyed a highly successful last year, marked by record financial results, encouraging strategic initiatives, impressive new business achievements, and on-going organisational developments," said chief executive officer Abdullatif Mohamed Janahi.
"I would particularly like to highlight the bank's outstanding increase of 143pc in net profit to $32.3m and the return on equity (ROE) of 33pc.
"These examples constitute an extraordinary performance for a newly-established bank, with our ROE comparing more than favourably with even the most successful, long-established international institutions."
The bank implemented strategic initiatives during the year, including more than doubling their paid-up capital through a successful rights issue and private placement, which will support ambitious business plans for the future.
He said a $100m proposed establishment of Saudi Venture Capital Investment Company, which is currently under formation, heralds the start of a regional expansion strategy into Saudi Arabia and other key GCC markets.
VC-Bank successfully executed a number of new innovative products, projects and deals in the MENA region during last year. These include unique investment offerings in new sectors such as shipping and fertilisers, new investment companies to tap the potential of growing regional markets such as Oman and Morocco, and additional real estate offerings, including an exclusive residential community project in the iconic 'The World' development in Dubai.
Furthermore, the bank's existing portfolio of investments has substantially progressed during the year. Among these are the MENA SME Private Equity Fund, Jeddah and Abha City centre rejuvenations projects, Park Plaza, ASAS Real Estate Company, Challenger Limited, and House of Development.
"Currently working on a number of high-yielding investment projects, which we expect to finalise shortly before launching them as investment products to our esteemed clients," he added.
"To support our growing business activities, we have continued to build the institutional capability of the bank. Key strategies have included strengthening our framework of corporate governance, risk management and internal controls; enhancing our IT infrastructure; and expanding our team of professionals with several new appointments."
business@gdn.com.bh
MANAMA: Venture Capital Bank (VC-Bank) will invest $1 billion in the Middle East and North Africa by the end of this year.More than 25 per cent of the investment will be in Bahrain.
New projects include a $150 million Reef Island development of two residential tower blocks in the kingdom.
Speaking after the bank's annual general meeting yesterday, chairman Dr Ghassan Ahmed Sulaiman said the bank was reviewing its strategy after a very successful year and looking to expand its investment portfolio geographically.
He said they had made some investments in Jordan and Egypt and put $113m into a real estate venture in Oman.
But he said they would be prepared to look at Europe and Asia in the future and would not rule out investment in Iran if the political and economic situation offered opportunities.
"There are a lot of opportunities even in countries that are not enjoying an economic boom," he said.
Having completed its second year of being fully operational, the bank recorded a growth of 143pc last year, and reported $32.3m net profit.
"VC-Bank is a testament of how an innovative vision can materialise in a manner which far exceeds expectations for such a young firm. The bank enjoyed a highly successful last year, marked by record financial results, encouraging strategic initiatives, impressive new business achievements, and on-going organisational developments," said chief executive officer Abdullatif Mohamed Janahi.
"I would particularly like to highlight the bank's outstanding increase of 143pc in net profit to $32.3m and the return on equity (ROE) of 33pc.
"These examples constitute an extraordinary performance for a newly-established bank, with our ROE comparing more than favourably with even the most successful, long-established international institutions."
The bank implemented strategic initiatives during the year, including more than doubling their paid-up capital through a successful rights issue and private placement, which will support ambitious business plans for the future.
He said a $100m proposed establishment of Saudi Venture Capital Investment Company, which is currently under formation, heralds the start of a regional expansion strategy into Saudi Arabia and other key GCC markets.
VC-Bank successfully executed a number of new innovative products, projects and deals in the MENA region during last year. These include unique investment offerings in new sectors such as shipping and fertilisers, new investment companies to tap the potential of growing regional markets such as Oman and Morocco, and additional real estate offerings, including an exclusive residential community project in the iconic 'The World' development in Dubai.
Furthermore, the bank's existing portfolio of investments has substantially progressed during the year. Among these are the MENA SME Private Equity Fund, Jeddah and Abha City centre rejuvenations projects, Park Plaza, ASAS Real Estate Company, Challenger Limited, and House of Development.
"Currently working on a number of high-yielding investment projects, which we expect to finalise shortly before launching them as investment products to our esteemed clients," he added.
"To support our growing business activities, we have continued to build the institutional capability of the bank. Key strategies have included strengthening our framework of corporate governance, risk management and internal controls; enhancing our IT infrastructure; and expanding our team of professionals with several new appointments."
business@gdn.com.bh
Saturday, February 9, 2008
Doha to have 800 towers in 10 years
Riddoch... â€کdemand for luxury properties increasing’
By Pratap John
DESPITE rising inflation Doha will become one of the “busiest†construction areas in the world in the next 10 years or so, Damac Properties CEO Peter Riddoch has said.
“Over the next 10 years some 800 new towers will come up in Doha making it one of the busiest construction sites in the world,†he said in an interview with Gulf Times here yesterday.
Of all the sectors that have benefited from Qatar’s recent economic boom, the construction industry is the “most fortunateâ€, he said. The influx of liquid assets has brought about massive infrastructure, business and luxury projects in all corners of Qatar, Riddoch said.
“If you look at the expansion of Doha International Airport, which is one of the high profile developments currently under way with a projected price tag of $2bn in the first phase, and other government-contracted projects including major highways network expansion, you will be able to observe the large amount of investments that are being channelled into this sector. The private sector is also building rapidly. Damac Properties is one of the first developers in the region to enter Qatar’s market with a long term vision to cope with the rapidly expanding economy,†he said.
A recent report by the International Monetary Fund (IMF) said Qatar’s per capita income will have jumped 12.5% to $70,754 in 2007 and the estimated figure for 2006 stood at $62, 9214. Projections are that Qatar’s GDP will rise 12% a year all the way through to 2012, resulting in the influx of expatriate workers who will have the opportunity to buy properties in the State.
Riddoch, however, admitted the region’s high inflation in Qatar had affected the State’s construction industry. The imports have become costlier. There is also a shortage of construction materials.
Qatar’s inflation is the highest in the Gulf and expected to jump to around 15% in 2008 from a previous high of 13.7% in September 2007.
“But I understand the Government of Qatar is working on promoting the need for sand processing plants and for constructors to use locally produced materials wherever possible to reduce overheads,†he said.
Riddoch said Damac Properties’ strategic planning and business forecast before entering any market had helped it minimise the impact of any change on the economic climate in the place concerned.
Riddoch said the demand on luxury properties is increasing day by day in the GCC market mainly due to increasing individual income, which already is the highest in the region.
“The demand on luxury properties is increasing day by day not only in the GCC market, but also in other markets such as Jordan and Egypt where we are targeting the middle and upper segments of customers who are in need of or desire luxury end living, retail space or properties for commercial use.
“We offer exclusivity, luxury and quality and there is no dearth of investors from the region and outside. Besides Qataris and residents, we have investors from the UK, Jordan, Saudi Arabia, and the United Arab Emirates and they are willing to invest in luxury properties in Qatar. Shortly we will be opening more sales offices in other European countries such as Italy and Germany as part of our global sales strategy. Additionally, very soon in market such as Qatar, Egypt and Jordan we will be serving the upper middle class segment through an extremely competitive financing model with more than one large bank and other financial firms,†he said.
On Damac’s Qatar operations Riddoch said, “The Piazza project at Lusail is one of our success stories not only in the State but also in the region as a whole. The company is eager to replicate this success in future projects in Doha as the city is getting in for a major facelift. We are looking at the right opportunities here. We have recently expanded our operation by enlarging our sales force and market presence in Doha. Additionally, we have been conducting road shows and sales presentation for our clients in Qatar in order to give them the opportunity to have a closer look at our exclusive projects in the region.â€
http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=200798&version=1&template_id=36&parent_id=16
By Pratap John
DESPITE rising inflation Doha will become one of the “busiest†construction areas in the world in the next 10 years or so, Damac Properties CEO Peter Riddoch has said.
“Over the next 10 years some 800 new towers will come up in Doha making it one of the busiest construction sites in the world,†he said in an interview with Gulf Times here yesterday.
Of all the sectors that have benefited from Qatar’s recent economic boom, the construction industry is the “most fortunateâ€, he said. The influx of liquid assets has brought about massive infrastructure, business and luxury projects in all corners of Qatar, Riddoch said.
“If you look at the expansion of Doha International Airport, which is one of the high profile developments currently under way with a projected price tag of $2bn in the first phase, and other government-contracted projects including major highways network expansion, you will be able to observe the large amount of investments that are being channelled into this sector. The private sector is also building rapidly. Damac Properties is one of the first developers in the region to enter Qatar’s market with a long term vision to cope with the rapidly expanding economy,†he said.
A recent report by the International Monetary Fund (IMF) said Qatar’s per capita income will have jumped 12.5% to $70,754 in 2007 and the estimated figure for 2006 stood at $62, 9214. Projections are that Qatar’s GDP will rise 12% a year all the way through to 2012, resulting in the influx of expatriate workers who will have the opportunity to buy properties in the State.
Riddoch, however, admitted the region’s high inflation in Qatar had affected the State’s construction industry. The imports have become costlier. There is also a shortage of construction materials.
Qatar’s inflation is the highest in the Gulf and expected to jump to around 15% in 2008 from a previous high of 13.7% in September 2007.
“But I understand the Government of Qatar is working on promoting the need for sand processing plants and for constructors to use locally produced materials wherever possible to reduce overheads,†he said.
Riddoch said Damac Properties’ strategic planning and business forecast before entering any market had helped it minimise the impact of any change on the economic climate in the place concerned.
Riddoch said the demand on luxury properties is increasing day by day in the GCC market mainly due to increasing individual income, which already is the highest in the region.
“The demand on luxury properties is increasing day by day not only in the GCC market, but also in other markets such as Jordan and Egypt where we are targeting the middle and upper segments of customers who are in need of or desire luxury end living, retail space or properties for commercial use.
“We offer exclusivity, luxury and quality and there is no dearth of investors from the region and outside. Besides Qataris and residents, we have investors from the UK, Jordan, Saudi Arabia, and the United Arab Emirates and they are willing to invest in luxury properties in Qatar. Shortly we will be opening more sales offices in other European countries such as Italy and Germany as part of our global sales strategy. Additionally, very soon in market such as Qatar, Egypt and Jordan we will be serving the upper middle class segment through an extremely competitive financing model with more than one large bank and other financial firms,†he said.
On Damac’s Qatar operations Riddoch said, “The Piazza project at Lusail is one of our success stories not only in the State but also in the region as a whole. The company is eager to replicate this success in future projects in Doha as the city is getting in for a major facelift. We are looking at the right opportunities here. We have recently expanded our operation by enlarging our sales force and market presence in Doha. Additionally, we have been conducting road shows and sales presentation for our clients in Qatar in order to give them the opportunity to have a closer look at our exclusive projects in the region.â€
http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=200798&version=1&template_id=36&parent_id=16
A New Middle East, After All
A New Middle East, After All
What George W. Bush hath wrought.
by Reuel Marc Gerecht
02/18/2008, Volume 013, Issue 22
George W. Bush staked his presidency on his response to 9/11: on the proposition that the United States had to defeat the virulent forces loose in the Muslim world directly and militarily. In his last State of the Union address, delivered shortly after his first and only grand tour of the Middle East, Bush reaffirmed his intention to continue the fight everywhere he has committed American arms. It is way too soon to give the president a final grade, and it is surely tempting to flunk him, given the high-wire act the country has endured in Iraq. The denizens of the Middle East, however, will remember Bush as the most momentous American leader since an angry Thomas Jefferson sent men-of-war in pursuit of the Barbary pirates. His successor will not be able to walk away from what he has wrought. Let us consider the issues one by one--leaving aside for another day Iran and the menace of a Persian bomb.
IRAQ
The surge's success has put the administration more or less on autopilot: Neither Bush, nor his general, David Petraeus, nor a chastened Democratic Congress is going to abandon the surge through hasty troop reductions before Bush leaves office. Although the White House often seems bedeviled by the task of defining "victory" in Iraq, it really isn't that hard. Flawed and ugly as it is, Iraqi democracy stumbles forward. The Shiite and Sunni Arabs are slowly establishing representative political arrangements within their own communities that allow some diversity of opinion. With America's
indispensable oversight, Iraq's Arabs and Kurds are gradually and painfully checking their worst passions and ambitions. As each community conquers its own demons, Iraqis develop the sentiments and patience to work across the sectarian divides. Given the totalitarian hell that was Saddam's Iraq, the violence that came with his fall, American negligence from 2003 to 2007, and the hostility of Tehran and the nearby Arab rulers to an American-midwifed democratic Iraq, this is an amazing achievement. The court intellectuals in Cairo, Riyadh, and Damascus usually treat the new Iraq with contempt and distortion, but they know that a democratic Iraq, even one born of the sin of American occupation, defies autocracy throughout the region.
Although the success of the counterinsurgency has opened up many avenues for political progress, the challenges remain large.
The still unscheduled referendum in which the people of Kirkuk and its environs are to vote on the status of that multiethnic city could possibly throw the north of the country into chaos. The Kurds will be tenacious about their "Jerusalem." Although they are somewhat disingenuous in their intentions, the Kurds want unchallenged control over Kirkuk's oil and would strongly prefer to have fewer Arabs living among them, especially Arabs who moved into Kurdish homes emptied by Saddam Hussein. Underestimating the passion of ethnically based nationalism has a bloody history, and Iraq's Kurds are a passionate, much-abused people. They will not allow Tamim province, which has Kirkuk's oil, to slip from their control to the central government's.
Yet odds are the Kurdish political elite, who have done very well since the invasion and are acutely aware of Turkish, Iranian, and Iraqi Arab sensitivities about Kurdish nationalism, will continue to be sufficiently measured in their drive for independence to keep all hell from breaking loose. Right now, Kirkuk is a back-burner issue in the increasingly vibrant Iraqi political discussions. (Sunni and Shiite Arabs and Kurds who would not have spoken to each other six months ago for fear of being murdered if caught in late-evening chats in "enemy" territory are now having civil exchanges all over Baghdad.) The Kurds know they could lose a referendum on Kirkuk at this time; Kurdish efforts to drive out and silence the potential "no" vote have not yet been sufficiently successful. Nonetheless, the Bush administration would be wise to have a rapid-reaction force ready to preempt Kurdish, Arab, and Turkmen animosities in the north.
Since the surge has now reached the city of Mosul, just south of Kurdistan, it's a good time for the administration to suggest to the Kurds that the United States takes a dim view of land grabs not effected legally under the Iraqi constitution. Any Kurdish ethnic cleansing should be countered forcefully. The Kurds have no desire to confront U.S. troops, so a clear threat of force should keep the peace. And as long as Kurdish acquisitiveness is kept in check, a powerful Sunni-Shiite Arab alliance against the Kurds is unlikely. One of the surge's successes is that it has allowed for Kurdish-Arab problems to be worked out peacefully. In the process, a functioning, decentralized Iraq has started to take shape.
When provincial elections are finally held across Iraq, possibly this year, the Sunnis, too, may start to claim a bigger stake in a more representative political system in provinces where they dominate, if not in the country at large. Much more than national legislation (such as that recently enacted allowing more former Baathists to receive their pensions and reenter the government work force), provincial elections should spur meaningful reconciliation. Elections will help the Sunni Arabs create new political groupings that reflect who they are more accurately than their present national parties. And elections should help them recapture a healthier national consciousness and identify a more legitimate post-Saddam national elite.
Elections may provoke some violence. Indeed, preparing for both the provincial elections and the national elections due in 2009 will likely check
any American effort to draw down U.S. forces significantly before 2010. Yet internecine Sunni battles sparked by elections are likely to be limited. The Sunni Arabs have always known that they need to hang together to survive the greater demographic and geographic weight of the Shiites and Kurds. This instinct--which once led the community to embrace al Qaeda and other extremists--will now, with the success of their own anti-al Qaeda "Awakening," likely keep intra-Sunni violence at bearable levels. Indeed, decisively losing the 2006-07 Battle of Baghdad has had a sobering effect on the community--witness the Sunni confessions, reported in both Western and Arab media, about how the insurgency, "misled" by al Qaeda, went too far in killing Shiites.
Perhaps the biggest danger for Iraq is that the success of the Awakening will breed a renewed Sunni hubris. The historic sense of Sunni entitlement, the Sunni Arabs' belief in their own martial and moral superiority over Shiites, was fuel for the insurgency. If the Sunnis' successful fight against al Qaeda also awakens a desire for round two with the Shia, then we will return quickly to where we were before General Petraeus took command. Provincial elections, and the campaigning around them, will indicate whether the Sunnis are now willing to let go of "their" Iraq.
Slowly and reluctantly, the Shiite-led government is incorporating the Sunni Awakening groups in Baghdad into the capital's police force. Now the government must also find a way to incorporate Anbar province's Awakening forces into a loose federal police structure, and the American Army must maintain payments to these new Sunni militias if the Shiite-led government refuses to do so. If the Shia see that these defense forces do not intend to challenge the government militarily--and this will take time--then a slow federalization of these disparate militias is possible. Patience, pressure, finesse, and a constant flow of American cash will be required to ensure the Awakening does not spook the Shiite community, which remains leery of former Baathists and al Qaeda supporters who have recently changed sides. The American embassy will have to work to persuade the government to absorb these units, tribe by tribe, town by town, into constabularies paid by Baghdad.
On the Shiite side, provincial elections carry risks. There has been considerable Shiite-on-Shiite violence, more than has been reported by the much diminished Western press in Baghdad. The Shia are likely to continue to fight among themselves, especially in the south, where there are no U.S. forces. These duels, which occur between Iraq's two largest Shiite forces--the Mahdi Army and the Badr Corps of the Supreme Islamic Iraqi Council (SIIC, formerly SCIRI)--and a variety of local armed groups have always had the potential for catapulting the Shiite community into large-scale strife.
This violence has so far been contained, primarily for two reasons: U.S. forces are still all over the central Shiite provinces and can decisively take sides in Shiite battles if they choose to, and the clerical establishment led by Grand Ayatollah Ali Sistani has used its influence to discourage violent factionalism. Lasting stability will likely come through big Shiite political parties that pay due respect to the clerical establishment. Although decentralization and federalism make sense for the Kurds and the Sunni Arabs, it's difficult to see how intra-Shiite federalism could play out happily. Basra's violence hasn't infected the Shiite north in part because the sentiments and allegiances of the city and the surrounding countryside really are distinctive. Trying to separate Baghdad, however, from the central Shiite regions, as some Shiite leaders recommend, seems a recipe for more violence, not less. Already, petty warlordism has emerged among the Shia, and it could spread if the Shiite leadership renounced a compelling national idea. In an oil-rentier state where oil wealth, at least outside Kurdistan, will first go to the central government, any attempt to formally subdivide the Shiites could turn into a nightmare.
Despite their often fiery national and Arab consciousness, the Iraqi Shia have no national institutions aside from their clerical establishment, which has always been weak in the south. And the south illustrates what can happen among them when national and foreign forces are insufficient to counter entropy. For the Shia, then, depending on the location, provincial elections may weaken national consciousness and fortify those elements--especially Iranian influence--that we want diminished.
Nevertheless, provincial elections also hold out considerable promise for Iraq's largest community. The big Shiite parties desperately need to be more attentive to local concerns; they need to think more about potholes, schools, and electricity and less about the elite, highly personal, "Green Zone" politics of Baghdad. In the all-important central regions of Iraq, which will determine the fate of the country, the clerics of Najaf appear to be still strong on the ground. Local elections may enhance the power of the peace-promoting traditional scholars of Islamic law.
Most important, a lot of Iraqis, especially Arabs, are mad about the unresponsiveness of the national government. They want to see more representative government. Many Shiites, especially among the southern tribes, want to see local government develop that isn't held hostage to the Supreme Islamic Iraqi Council, the Sadrists, or the Iranians. Without American forces in the south, it will be difficult to stop these three from intimidating voters. Yet at the very least, provincial elections will force competition among all the parties. They will advance the democratic dynamic and prepare the ground for the all-important national elections.
Provincial elections, even if deeply flawed, should help develop local urban elites, who, before the coming of the modern dictatorships, were the key to stability and basic decency in the Middle East. With American help, these elites might be willing and able to change Iraq's electoral system from one based on party lists to one based on districts in time for the national elections of 2009. Although party list systems have certain advantages in violent societies, district systems are conducive to stronger local leadership and more attentive national parties. This change would greatly benefit Iraq--another reason the Bush administration should push hard for provincial elections this year. That second turn at the urns at the national level is critical for cementing the democratic ethic in any country. The Bush administration needs to do everything in its power to help the Iraqis have robust, competitive national elections in 2009.
Despite the horrendous violence of 2006 and 2007, the Shiite commitment to the political system remains intact. The Shiite-on-Shiite killing since 2007 may have actually helped: The forces allied to Moktada al-Sadr have fared poorly in direct collisions with the Shiite-led Iraqi army and the Badr Corps, the military wing of SIIC, the best-organized Shiite religious party. Sadr plays more politics now than he did two years ago, when the destruction of the Shiite shrine at Samarra plunged Iraq into a bloodbath. Like his much beloved, murdered father, Sadr is throwing his movement into social work. There is still a big military potential to this--young men organized into self-help societies can be turned into paramilitary forces. But Sadr, at least in Baghdad and the central Euphrates valley, is recasting himself as a peaceful, die-hard anti-American patriot. He is reportedly trying to become a more accomplished student of Iranian religious jurisprudence, a sure sign that Sadr is politically stuck. He cannot humble himself to go to school in Iraq--his scholastic credentials are too weak, and he is too disliked by the traditional clergy to attend his country's great religious schools. So he reaches out to Iran, hardly a winning political strategy for one whose appeal lies partly in his fiery Arab-Iraqi nationalism.
And Sadr's principal antagonist--Abd al-Aziz al-Hakim, the leader of SIIC--seems even more committed to the political process than Sadr. Hakim's uncle is one of the four grand ayatollahs of Najaf and probably the most influential after Sistani, the Iranian émigré who has become since 2003 the most beloved and respected ayatollah in the Shiite world. And Hakim himself has grown increasingly attentive to the concerns of Najaf since he returned from Iranian exile nearly five years ago.
With the possible exception of the prime minister, no Shiite politician is viewed as more accountable than Hakim for the successes and failures of the current government. If the Shia are unhappy with the government, the backlash could hit Hakim and his party fairly hard. The Najaf connection is his lifeline since Sistani, who has pushed and defined the democratic process more than anyone else, can guarantee that Hakim stays politically relevant even if popular dissatisfaction with the government grows. Given his personal limitations--he is neither an accomplished cleric nor a charismatic personality--Hakim is unlikely to derail the Bush administration or its successor with his personal ambition.
This said, one can wonder whether General Petraeus and Ambassador Ryan Crocker's decision to side so clearly with Hakim's Badr Corps over the disparate parts of Sadr's Mahdi army is astute. The SIIC's grassroots support may not be deep (provincial elections will help us know). Many faithful Iraqi Shiites have concerns about the SIIC's Iranian connections. Although its men serve in the Iraqi army, the Badr and the army are not the same. Iranian connections to the Badr are still strong--the ruling Iranian clergy has always put high value on nurturing foreign clienteles. General Petraeus is doing the best he can with too few troops, and picking proxies is an inevitable part of this surge.
Yet when Iraqis think about Hakim, they think first and foremost of his family's corruption and behind-the-scenes power. The Arabic word Ittilaat, "intelligence service," is often used to describe Hakim's SIIC. That's not a good sign. Militarily strong on the ground in the holy city of Najaf, Hakim and SIIC could envelop Grand Ayatollah Sistani, using both subtle physical intimidation and praise to ensure his support. Sistani is a cautious man; all lose in Iraq if he is de facto held hostage. It would be best not to tempt fate by fortifying too much the Badr Corps, an institution that could conceivably mutate into an Iraqi version of the Iranian Revolutionary Guard Corps, of which it once was part.
The immediate priority for the Bush administration should be to encourage the passage of a provincial-election law, then to speed the administrative preparations for a vote, which will take several months. These elections should breathe fresh air into Iraq's national politics and put purple index fingers again all over Middle Eastern television screens. Since the invasion, America's prestige has never been higher. The renewed mystique may not last. Many in Washington, especially inside the Pentagon and the leadership of the Democratic party, may resist holding provincial elections because they are likely to prevent big reductions in U.S. forces before 2010. But the president must realize this is probably a make-or-break issue for Iraqi democracy.
By the hair of his chinny-chin-chin, President Bush will probably leave office with a sputtering but functioning democratic system in Mesopotamia. Accepted wisdom now holds that the ripple effect from Iraq, if there is one, is all bad. In Europe this is mostly true. The loss of Tony Blair's Britain as a reliable and gutsy ally is perhaps the most regrettable by-product of Iraq in Europe. A second-rate military power, the United Kingdom was never going to be able to cope with a stressful, violent occupation. Our "special relationship" will continue, especially in the area of counterterrorism, where the United States has grown closer to every European security service since 2003. But Iraq has accelerated a distancing of American and British political elites.
In the Middle East, however, it is not clear that America's position has suffered that much from the invasion. Perhaps with Iran: More Americans might be willing to entertain the idea of preventive military strikes against Iran's nuclear facilities if the Bush administration had not done so poorly in Mesopotamia. But that issue aside, ripples from Iraq could still turn out to be more positive than negative, perhaps decisively so.
AL QAEDA AND THE WAR ON TERRORISM
Contrary to the views of most counterterrorism experts and most Democrats, the war against Islamic extremism has probably seen a pivotal victory in Iraq. Unlike 9/11 or the bombings in Madrid and London, the Second Iraq War, with its ferocious Muslim-on-Muslim violence, has actually provoked some deep reflection about holy war among the faithful in the Middle East. Although the situation could still unravel and Al Qaeda in Mesopotamia could get a new lease on life, the fight against that organization, and the Sunnis' second thoughts about their zeal against the Shia, have shaken Arabs' easy characterization of this war as a war against American occupation.
To begin with, Al Qaeda central--Osama bin Laden and his lieutenant, Ayman al Zawahiri--know they are in trouble. The war has produced a small epistolary avalanche of tactical recalculations and spiritual appeals to brother Muslims to focus the fight on American infidels. Iraq was supposed to break the United States. This was, in bin Laden's words, "a war over the destiny of the entire umma [the worldwide Muslim community]." Instead, Iraq is becoming a serious setback, if not a spiritual Waterloo, for the Muslim world's most feared and most respected jihadists. As bin Laden conceded about the Iraqi jihad, "Allah only knows what sort of ramifications it holds for Islam and its people."
In his December 29 declaration on Iraq, bin Laden savagely attacked Sunnis who are working with the Americans, calling them guilty of "clear infidelity and an open apostasy." Abu Ahmad al-Baghdadi, a spokesman for one of the Sunni insurgent groups, didn't buy this. He told Al Jazeera, the pro-Sunni, pro-insurgent Arabic satellite TV channel, that "Al Qaeda in Iraq has become a hand that destroys the Sunnis. Many Sunnis have been killed by them. Al Qaeda in Iraq is a source of corruption. . . . They always direct their weapons at innocent civilians." Al-Baghdadi had no difficulty throwing the Prophet Muhammad back at bin Laden: Why shouldn't Sunnis make a truce with the Americans when "the Prophet made a truce" with nonbelievers?
Commentary like this influences Muslim attitudes far more than all of America's public-diplomacy outreach; it is worth far more, too, than the soft-power appeal of any Barack Obama signaling his empathy with the downtrodden of the Third World.
Although Senators Obama, Hillary Clinton, and Joseph Biden would rather burn in oil than give George Bush credit for his insistence on linking the war in Iraq to the battle against Islamic extremism, the president has damaged al Qaeda--and al Qaeda has damaged itself--more in Mesopotamia than on any other battlefield. Al Qaeda will live on in the forbidding mountains of Afghanistan and Pakistan, and from there it may do horrendous harm to the United States and its European allies. But if al Qaeda is ever to evanesce, it will be because its jihadism lost its ethical appeal in the Arab heartland where it was born. American and Pakistani paramilitary successes against al Qaeda will never be sufficient to demonstrate the organization's evil to Muslims worldwide. Indeed, Pakistan's ineffectual attempts to assert control over tribal border areas have been counterproductive, giving bin Laden a fillip of hope at a time when his jihad is facing decided difficulty in Iraq.
By contrast, it is democracy in Iraq, as bin Laden correctly foresaw, that would be toxic to his cause: Few ideas elicit from him more venom. It is one of the great ironies of the war that President Bush, a man not known for perusing much primary material, actually did read bin Laden's declarations about Iraq and did consider his ideas. It is by no means clear Bush's antiwar critics ever have. We have not been able to counter the Egyptian and Saudi Arabian intellectual engines of jihadism against the United States; this would be difficult even if Bush's State Department actually tried it. But what we have done is help Iraqis grope their way toward democracy, even as al Qaeda's cruelty has rallied Iraqis to fight at our side.
AFGHANISTAN AND PAKISTAN
A year ago George W. Bush was the first American president to be on the way to losing two wars simultaneously. Now, he may be losing only one. The good news is that the administration knows it's in trouble in Afghanistan.
Even with the strain of Iraq, Secretary of Defense Robert Gates will likely increase troop levels sufficiently to parry the resurgent Taliban where it matters most. Afghanistan was always going to be an extraordinary test of American will. If the United States remains in Iraq for at least a decade (a pretty safe bet), it's likely to be in Afghanistan much longer.
Afghanistan is already proving too much for most of our NATO allies, who are hunkering down--and, in the case of the Spanish and Italians, "secretly" dealing with the Taliban in an effort to deflect violence from their troops. (One former senior Spanish official calls this "preemptive surrender.") With the mountainous tribal lands of Pakistan as a safe haven, Afghanistan's Pashtun Taliban--many of its members actually born in Pakistan's refugee camps and educated in its religious schools--was always going to recover. It is probably too late for President Bush to develop a new policy toward Pakistan. To do so, he would have to ignore the counsel of the State Department, the Pentagon, the CIA, and Washington's unofficial foreign-policy establishment, which remain more or less wedded to a pre-9/11 alignment of the United States with the Pakistani military--our "essential" but fragile ally against al Qaeda. We will soon see the denouement of our post-9/11 counterterrorist training of the Pakistani Army: Openly or discreetly, we must pray that it can wear down the Islamic extremists who control the tribal lands and are challenging Islamabad in the neighboring North-West Frontier Province.
A more effective, though nerve-racking, strategy would have had the United States use ground and air strikes inside Pakistan since 2002 to punish those aiding the rebirth of the Taliban. We should have been more focused on actually killing al Qaeda, the Taliban, and those in Pakistan who support them. Soon we could be in a worse position than we were before 9/11, with Afghan and Pakistani militants plotting and training without real fear of American harassment. Given the growing extremist presence there, the North-West Frontier Province may be destined to experience years of suicide bombings and insurgent attacks. This probably can't destabilize the entire country, but it can seriously stress the military and the intelligence services, where Pashtuns from the North-West Frontier Province disproportionately serve. No matter what we do, and no matter whether its government now becomes more democratic or more authoritarian, Pakistan is likely to experience increasing violence.
If undertaken at this late date, American strikes inside Pakistan would roil our relations with the Pakistani military and make life more dangerous for Americans living in Pakistan and Afghanistan. Our intelligence cooperation with Islamabad would probably suffer severely. Even secular Pakistanis might rise in indignation. On the other hand, what we have now is definitely not working. We will surely rue the day the United States allowed al Qaeda and its sympathizers a place to grow unmolested.
As Britain's internal-security service, MI5, is well aware, the Pakistani connection is now the most worrisome nexus for al Qaeda to exploit, what with the enormous number of Pakistanis traveling between the two countries. According to British internal-security officials, every year upwards of 80,000 Pakistanis resident in the United Kingdom, many of them British citizens, visit areas of Pakistan that are "rich with jihadists." Other European countries also have Pakistani communities. The discovery of jihadist cells within them is becoming a regular occurrence.
So far, the Pakistani military has proven itself unwilling or unable to fight it out with Pashtun fundamentalists who live near the Afghan-Pakistani border. With America's strong encouragement, President Musharraf attempted to extend his writ into the tribal regions. He failed abysmally, watching Pashtun forces in the army and the frontier constabulary grumble and often desert.
Unless we deploy a lot more troops to Afghanistan to implement an "ink-spot" counterinsurgency akin to the one led by General Petraeus in Iraq, it's doubtful the United States and NATO can reverse the ascendancy of the Taliban among the Pashtuns. Since we don't want to invade another country, we will give the Pakistani army another chance to destroy al Qaeda and neutralize the Taliban. But if the Pakistanis don't do what is necessary in the next 12 months, they probably never will. And note: If Washington is reluctant to launch paramilitary strikes into northwestern Pakistan to kill members of al Qaeda and disrupt new terrorist training camps, it definitely isn't going to launch covert operations to neutralize Pakistan's nuclear weapons in the event the Pakistani army becomes too Islamic. The level of intestinal fortitude and the quality of intelligence required for the former is vastly less than would be required for the latter.
Still, there are grounds for expecting that Pakistan will hang together. Its history since 1947 has given the nation an identity that sticks. The lingering legacy of the British--an aversion to extremes--among both the civilian elite and the tightknit officer corps has usually kept Pakistanis from acting like the more brutal elites of the Arab Middle East. As long as the unique ability of the Pakistani army to absorb both secularists and Islamists within its ranks continues--a modus vivendi that has held since at least the 1970s--the country won't fall apart and its nukes are unlikely either to disappear into the hands of extremists or to get fired. It's impossible to overstate the extent to which Pakistan's fundamentalists loathe the polytheist Hindus of India. Yet the Pakistani military, a tough and fraternal organization, has kept the country from indulging its worst instincts and doing anything stupid with its nukes. Even occasional military strikes by American forces against Taliban and al Qaeda strongholds in the remote tribal areas of northwestern Pakistan would not crack this institution or its control of nuclear weapons.
We will see whether the Pakistani army, always the backbone of the country, is sufficiently wise to allow the people's continuing attachment to messy democratic politics the room to grow. Pakistan's political salvation is probably a long way off no matter what Washington does, but greater distance between the United States and the Pakistani military would benefit both parties. Although it's impossible for America's allies within the military to say so publicly, they would likely be in no worse position if the United States assumed the responsibility for necessary military operations in the tribal regions. Then the Pakistanis could join our enemies in damning us for violating Pakistani sovereignty, while leaving all concerned more secure than if the Pakistani military took on the emboldened Pashtun fundamentalists and lost.
PALESTINE, EGYPT, SAUDI ARABIA, LEBANON, AND SYRIA
The Levant has not been kind to the Bush administration. On virtually every issue in this region, the White House has misfired, not fired at all, or been worn out by contradictory aspirations. The Israeli-Palestinian confrontation is as it was in 2000: an event controlled by the continuing Islamist evolution of the Palestinian people, who do not in sufficient numbers countenance peace with a Jewish state. The only real question remaining is whether the Fatah dictatorship on the West Bank will evolve quickly or slowly into a spiritual twin of Hamas. Contrary to what has been endlessly suggested by foreign-policy "realists," democracy did not destroy Fatah or undermine the chances for peace. Fatah destroyed Fatah. Westernized secular autocracies have similarly squandered their legitimacy throughout the Middle East ever since World War II. Elections will inevitably give expression to this failure.
No elected Muslim Arab government is likely to embrace Israel for many years to come. President Bush got the order backwards in his post-Annapolis speeches, suggesting that the Palestinians need to be able to envision a complete state living side by side with Israel so that democracy can triumph. Democracy did triumph among the Palestinians--Hamas won. Arab autocrats sign peace treaties with Israel; Arab democrats won't. That explains the Israelis' preference for Muslim dictatorship over Muslim democracy. Believing Muslims first have to figure out how to reconcile parliamentary legislation and the Holy Law; how to accept a Jewish state on land that devout Muslims see as part of the historic umma is much farther down this evolutionary path. Max Boot's parallel with the English and the Scots, who made war on each other for centuries, is apt--but the religious, social, cultural, political, and economic differences between the Jewish Israelis and the Muslim Palestinians dwarf the historic divide between Britain's warring peoples.
The preeminent issue for Palestinians, as for others in the region, is responsibility: Will Muslims become responsible for themselves, ethically and politically? Will they stop blaming others and blame themselves for their problems? It's very difficult to see how the Islamic, especially Arab, world can confront its manifest problems without Muslims, individually and collectively, assuming responsibility for their actions. Democracy is a good idea for the Middle East not because it will improve Western-Muslim relations. Odds are, in the short term, it will do the opposite. Increasingly, Muslims, especially devout Muslims, are backing democratic politics because they see this as the only way to restore legitimacy to government. Democracy, not dictatorship, opens societies to debates, which fundamentalists may well win. Elections that allow fundamentalists a chance to triumph--not police-state repression or antiterrorist pronouncements by the co-opted official clergy of the challenged regimes--are the key to eventually destroying the appeal of the violent extremists. As always, bin Laden is a helpful guide: If he loathes democracy among Muslims, it's a good reason to support it.
Hamas's triumph in the Palestinian elections of January 2006 probably put the last nail in the coffin of the Bush administration's efforts to encourage reform in Egypt and Saudi Arabia, the two countries that drove the spread of modern Islamic radicalism. From the beginning, Bush's democracy-and-reform agenda was largely rhetorical, undermined consistently by America's deference to Saudi oil and the senior cadre of the State Department's Near Eastern Bureau who saw the status quo as a safer bet than the convulsive, unsettling world of representative politics among Muslims. Like those American supporters of Israel who have grown queasy at the sight of democracy on the West Bank and in Gaza, the State Department's senior Arabists see the current regimes as bulwarks against radical Islam. They may admit that these autocracies have helped to radicalize their populations through repression. They may be uncomfortable with the aid these regimes have given to conservative religious forces to thwart more radical religious groups. They may even be distressed to see Egypt's ruler, Hosni Mubarak, harass and jail liberal democratic dissidents and critics (though if the U.S. ambassador in Cairo, Francis Ricciardone, is upset by this, he's doing a good job of hiding it).
But they are unwilling to risk the unknown, which is what greater democracy would produce. For them, 9/11 did not change the world; it made one more argument for hanging on tight to the imperfect but "stable" world we had. The only thing they really want to export to the Muslim Middle East is security. Even though President Bush occasionally throws a rhetorical Molotov cocktail at this pre-9/11 "realist" understanding of the Middle East, in practice this view now defines his administration. Bush fils asking the Saudis, pretty please, to lower the price of oil could just as easily have been Bush père. Bringing democracy to Saudi Arabia understandably was never a priority for the Bush administration (there were better places to push). But the administration egregiously failed to challenge the Saudis on matters of faith.
Even the relatively moderate, state-supported version of the Saudi Wahhabi faith, derived from the severe Hanbali school of law, is inimical to what Muslims historically have considered mainstream. It is also organically anti-American. On a global level, it is more dangerous than anything that has ever come out of Iran. After 9/11, President Bush could have easily ordered the State Department and the CIA to track Saudi state-supported religious institutions and publications in the Middle East and the West. Regular public reports on Saudi Arabia--biennial unclassified National Intelligence Estimates on Saudi missionary activity around the world--would have gone a long way toward galvanizing Western and anti-Wahhabi Muslim awareness of what the Saudi royal family and the Saudi state were doing. It's not too late for the American government to do this--Congress could require any administration to undertake such reporting. Foggy Bottom and Langley would fight it strenuously since it would crimp their bilateral Saudi relationships. Today, in post-9/11 Washington, they have the upper hand.
Lebanon today, too, isn't what the Bush administration had hoped, and Syria and its principal Lebanese ally, Hezbollah, are once again gaining strength through murder and intimidation. Once Syria's dictator, Bashar al-Assad, realized that Bush's soft-power Cedar Revolution wasn't going to bring him down (and for a moment in 2005, he wasn't sure), Washington lost its ability to coerce and intervene.
America's retreat from democratic Lebanon has been somewhat counterbalanced by Israel's bombing raid against the suspected nuclear site near Dayr az-Zawr, in Syria, which surprised and silenced both Damascus and its key backer, Tehran. But even here, the reaction in Washington is distressing. The Israelis exercised preemption, and the Bush administration--which has made preventive war an official part of America's post-9/11 doctrine--remained silent. The administration seems little inclined to dispute Israeli intelligence, but even if it thought the Israelis were wrong about North Korean involvement in this suspected nuclear site, the signal from the raid is exactly the one the president and the vice president were trying to send the Iranians about their nuclear facilities if they didn't stop uranium enrichment. It's hard to imagine a more helpful event for European and American Iran diplomacy, with its good-cop, bad-cop approach, yet Washington let it fall flat. It appears the administration went easy on Damascus partly for the illusory promise of Syrian participation in the Israeli-Palestinian peace process--which shows how far it has reverted to a pre-9/11 understanding of the Middle East.
Iraq and the war on terror will likely save the president's legacy in the Middle East. Although his soaring pro-democracy rhetoric has often been nullified by the actions of his minions and the president's own misunderstanding of what democracy in action means in the Muslim Middle East, George W. Bush has probably changed forever how Washington views Muslims and their rulers. Many in Washington may still believe, as George Kennan did, that Muslims are suited to dictatorship. Publicly, however, that position is no longer acceptable. This is no small achievement.
An uneasy and healthy tension now exists between rhetoric and reality, guaranteeing that Americans will continue to debate what has gone wrong and right in the Muslim Middle East. Whether America escapes another 9/11 or not, the president deserves credit for understanding that the region's murderous anti-American extremists, both secular and religious, had to be confronted on the battlefield. Sanctions, cruise missiles shot at rock huts and empty intelligence-service buildings, and close liaison relationships with foreign internal-security services were not enough. If the United States is brutally struck again by holy warriors, President Bush will seem prescient and wise--about the need for reform in the Middle East's autocracies, about the strategic shortsightedness and immorality of pre-9/11 American foreign policy toward Muslims, and about the imperative to use ugly tactics against mass-casualty terrorists. Given the forces arrayed against him, his administration's failures, and his own limitations, these are achievements even Ronald Reagan would envy.
Reuel Marc Gerecht is a resident fellow at the American Enterprise Institute and a contributing editor to THE WEEKLY STANDARD.
What George W. Bush hath wrought.
by Reuel Marc Gerecht
02/18/2008, Volume 013, Issue 22
George W. Bush staked his presidency on his response to 9/11: on the proposition that the United States had to defeat the virulent forces loose in the Muslim world directly and militarily. In his last State of the Union address, delivered shortly after his first and only grand tour of the Middle East, Bush reaffirmed his intention to continue the fight everywhere he has committed American arms. It is way too soon to give the president a final grade, and it is surely tempting to flunk him, given the high-wire act the country has endured in Iraq. The denizens of the Middle East, however, will remember Bush as the most momentous American leader since an angry Thomas Jefferson sent men-of-war in pursuit of the Barbary pirates. His successor will not be able to walk away from what he has wrought. Let us consider the issues one by one--leaving aside for another day Iran and the menace of a Persian bomb.
IRAQ
The surge's success has put the administration more or less on autopilot: Neither Bush, nor his general, David Petraeus, nor a chastened Democratic Congress is going to abandon the surge through hasty troop reductions before Bush leaves office. Although the White House often seems bedeviled by the task of defining "victory" in Iraq, it really isn't that hard. Flawed and ugly as it is, Iraqi democracy stumbles forward. The Shiite and Sunni Arabs are slowly establishing representative political arrangements within their own communities that allow some diversity of opinion. With America's
indispensable oversight, Iraq's Arabs and Kurds are gradually and painfully checking their worst passions and ambitions. As each community conquers its own demons, Iraqis develop the sentiments and patience to work across the sectarian divides. Given the totalitarian hell that was Saddam's Iraq, the violence that came with his fall, American negligence from 2003 to 2007, and the hostility of Tehran and the nearby Arab rulers to an American-midwifed democratic Iraq, this is an amazing achievement. The court intellectuals in Cairo, Riyadh, and Damascus usually treat the new Iraq with contempt and distortion, but they know that a democratic Iraq, even one born of the sin of American occupation, defies autocracy throughout the region.
Although the success of the counterinsurgency has opened up many avenues for political progress, the challenges remain large.
The still unscheduled referendum in which the people of Kirkuk and its environs are to vote on the status of that multiethnic city could possibly throw the north of the country into chaos. The Kurds will be tenacious about their "Jerusalem." Although they are somewhat disingenuous in their intentions, the Kurds want unchallenged control over Kirkuk's oil and would strongly prefer to have fewer Arabs living among them, especially Arabs who moved into Kurdish homes emptied by Saddam Hussein. Underestimating the passion of ethnically based nationalism has a bloody history, and Iraq's Kurds are a passionate, much-abused people. They will not allow Tamim province, which has Kirkuk's oil, to slip from their control to the central government's.
Yet odds are the Kurdish political elite, who have done very well since the invasion and are acutely aware of Turkish, Iranian, and Iraqi Arab sensitivities about Kurdish nationalism, will continue to be sufficiently measured in their drive for independence to keep all hell from breaking loose. Right now, Kirkuk is a back-burner issue in the increasingly vibrant Iraqi political discussions. (Sunni and Shiite Arabs and Kurds who would not have spoken to each other six months ago for fear of being murdered if caught in late-evening chats in "enemy" territory are now having civil exchanges all over Baghdad.) The Kurds know they could lose a referendum on Kirkuk at this time; Kurdish efforts to drive out and silence the potential "no" vote have not yet been sufficiently successful. Nonetheless, the Bush administration would be wise to have a rapid-reaction force ready to preempt Kurdish, Arab, and Turkmen animosities in the north.
Since the surge has now reached the city of Mosul, just south of Kurdistan, it's a good time for the administration to suggest to the Kurds that the United States takes a dim view of land grabs not effected legally under the Iraqi constitution. Any Kurdish ethnic cleansing should be countered forcefully. The Kurds have no desire to confront U.S. troops, so a clear threat of force should keep the peace. And as long as Kurdish acquisitiveness is kept in check, a powerful Sunni-Shiite Arab alliance against the Kurds is unlikely. One of the surge's successes is that it has allowed for Kurdish-Arab problems to be worked out peacefully. In the process, a functioning, decentralized Iraq has started to take shape.
When provincial elections are finally held across Iraq, possibly this year, the Sunnis, too, may start to claim a bigger stake in a more representative political system in provinces where they dominate, if not in the country at large. Much more than national legislation (such as that recently enacted allowing more former Baathists to receive their pensions and reenter the government work force), provincial elections should spur meaningful reconciliation. Elections will help the Sunni Arabs create new political groupings that reflect who they are more accurately than their present national parties. And elections should help them recapture a healthier national consciousness and identify a more legitimate post-Saddam national elite.
Elections may provoke some violence. Indeed, preparing for both the provincial elections and the national elections due in 2009 will likely check
any American effort to draw down U.S. forces significantly before 2010. Yet internecine Sunni battles sparked by elections are likely to be limited. The Sunni Arabs have always known that they need to hang together to survive the greater demographic and geographic weight of the Shiites and Kurds. This instinct--which once led the community to embrace al Qaeda and other extremists--will now, with the success of their own anti-al Qaeda "Awakening," likely keep intra-Sunni violence at bearable levels. Indeed, decisively losing the 2006-07 Battle of Baghdad has had a sobering effect on the community--witness the Sunni confessions, reported in both Western and Arab media, about how the insurgency, "misled" by al Qaeda, went too far in killing Shiites.
Perhaps the biggest danger for Iraq is that the success of the Awakening will breed a renewed Sunni hubris. The historic sense of Sunni entitlement, the Sunni Arabs' belief in their own martial and moral superiority over Shiites, was fuel for the insurgency. If the Sunnis' successful fight against al Qaeda also awakens a desire for round two with the Shia, then we will return quickly to where we were before General Petraeus took command. Provincial elections, and the campaigning around them, will indicate whether the Sunnis are now willing to let go of "their" Iraq.
Slowly and reluctantly, the Shiite-led government is incorporating the Sunni Awakening groups in Baghdad into the capital's police force. Now the government must also find a way to incorporate Anbar province's Awakening forces into a loose federal police structure, and the American Army must maintain payments to these new Sunni militias if the Shiite-led government refuses to do so. If the Shia see that these defense forces do not intend to challenge the government militarily--and this will take time--then a slow federalization of these disparate militias is possible. Patience, pressure, finesse, and a constant flow of American cash will be required to ensure the Awakening does not spook the Shiite community, which remains leery of former Baathists and al Qaeda supporters who have recently changed sides. The American embassy will have to work to persuade the government to absorb these units, tribe by tribe, town by town, into constabularies paid by Baghdad.
On the Shiite side, provincial elections carry risks. There has been considerable Shiite-on-Shiite violence, more than has been reported by the much diminished Western press in Baghdad. The Shia are likely to continue to fight among themselves, especially in the south, where there are no U.S. forces. These duels, which occur between Iraq's two largest Shiite forces--the Mahdi Army and the Badr Corps of the Supreme Islamic Iraqi Council (SIIC, formerly SCIRI)--and a variety of local armed groups have always had the potential for catapulting the Shiite community into large-scale strife.
This violence has so far been contained, primarily for two reasons: U.S. forces are still all over the central Shiite provinces and can decisively take sides in Shiite battles if they choose to, and the clerical establishment led by Grand Ayatollah Ali Sistani has used its influence to discourage violent factionalism. Lasting stability will likely come through big Shiite political parties that pay due respect to the clerical establishment. Although decentralization and federalism make sense for the Kurds and the Sunni Arabs, it's difficult to see how intra-Shiite federalism could play out happily. Basra's violence hasn't infected the Shiite north in part because the sentiments and allegiances of the city and the surrounding countryside really are distinctive. Trying to separate Baghdad, however, from the central Shiite regions, as some Shiite leaders recommend, seems a recipe for more violence, not less. Already, petty warlordism has emerged among the Shia, and it could spread if the Shiite leadership renounced a compelling national idea. In an oil-rentier state where oil wealth, at least outside Kurdistan, will first go to the central government, any attempt to formally subdivide the Shiites could turn into a nightmare.
Despite their often fiery national and Arab consciousness, the Iraqi Shia have no national institutions aside from their clerical establishment, which has always been weak in the south. And the south illustrates what can happen among them when national and foreign forces are insufficient to counter entropy. For the Shia, then, depending on the location, provincial elections may weaken national consciousness and fortify those elements--especially Iranian influence--that we want diminished.
Nevertheless, provincial elections also hold out considerable promise for Iraq's largest community. The big Shiite parties desperately need to be more attentive to local concerns; they need to think more about potholes, schools, and electricity and less about the elite, highly personal, "Green Zone" politics of Baghdad. In the all-important central regions of Iraq, which will determine the fate of the country, the clerics of Najaf appear to be still strong on the ground. Local elections may enhance the power of the peace-promoting traditional scholars of Islamic law.
Most important, a lot of Iraqis, especially Arabs, are mad about the unresponsiveness of the national government. They want to see more representative government. Many Shiites, especially among the southern tribes, want to see local government develop that isn't held hostage to the Supreme Islamic Iraqi Council, the Sadrists, or the Iranians. Without American forces in the south, it will be difficult to stop these three from intimidating voters. Yet at the very least, provincial elections will force competition among all the parties. They will advance the democratic dynamic and prepare the ground for the all-important national elections.
Provincial elections, even if deeply flawed, should help develop local urban elites, who, before the coming of the modern dictatorships, were the key to stability and basic decency in the Middle East. With American help, these elites might be willing and able to change Iraq's electoral system from one based on party lists to one based on districts in time for the national elections of 2009. Although party list systems have certain advantages in violent societies, district systems are conducive to stronger local leadership and more attentive national parties. This change would greatly benefit Iraq--another reason the Bush administration should push hard for provincial elections this year. That second turn at the urns at the national level is critical for cementing the democratic ethic in any country. The Bush administration needs to do everything in its power to help the Iraqis have robust, competitive national elections in 2009.
Despite the horrendous violence of 2006 and 2007, the Shiite commitment to the political system remains intact. The Shiite-on-Shiite killing since 2007 may have actually helped: The forces allied to Moktada al-Sadr have fared poorly in direct collisions with the Shiite-led Iraqi army and the Badr Corps, the military wing of SIIC, the best-organized Shiite religious party. Sadr plays more politics now than he did two years ago, when the destruction of the Shiite shrine at Samarra plunged Iraq into a bloodbath. Like his much beloved, murdered father, Sadr is throwing his movement into social work. There is still a big military potential to this--young men organized into self-help societies can be turned into paramilitary forces. But Sadr, at least in Baghdad and the central Euphrates valley, is recasting himself as a peaceful, die-hard anti-American patriot. He is reportedly trying to become a more accomplished student of Iranian religious jurisprudence, a sure sign that Sadr is politically stuck. He cannot humble himself to go to school in Iraq--his scholastic credentials are too weak, and he is too disliked by the traditional clergy to attend his country's great religious schools. So he reaches out to Iran, hardly a winning political strategy for one whose appeal lies partly in his fiery Arab-Iraqi nationalism.
And Sadr's principal antagonist--Abd al-Aziz al-Hakim, the leader of SIIC--seems even more committed to the political process than Sadr. Hakim's uncle is one of the four grand ayatollahs of Najaf and probably the most influential after Sistani, the Iranian émigré who has become since 2003 the most beloved and respected ayatollah in the Shiite world. And Hakim himself has grown increasingly attentive to the concerns of Najaf since he returned from Iranian exile nearly five years ago.
With the possible exception of the prime minister, no Shiite politician is viewed as more accountable than Hakim for the successes and failures of the current government. If the Shia are unhappy with the government, the backlash could hit Hakim and his party fairly hard. The Najaf connection is his lifeline since Sistani, who has pushed and defined the democratic process more than anyone else, can guarantee that Hakim stays politically relevant even if popular dissatisfaction with the government grows. Given his personal limitations--he is neither an accomplished cleric nor a charismatic personality--Hakim is unlikely to derail the Bush administration or its successor with his personal ambition.
This said, one can wonder whether General Petraeus and Ambassador Ryan Crocker's decision to side so clearly with Hakim's Badr Corps over the disparate parts of Sadr's Mahdi army is astute. The SIIC's grassroots support may not be deep (provincial elections will help us know). Many faithful Iraqi Shiites have concerns about the SIIC's Iranian connections. Although its men serve in the Iraqi army, the Badr and the army are not the same. Iranian connections to the Badr are still strong--the ruling Iranian clergy has always put high value on nurturing foreign clienteles. General Petraeus is doing the best he can with too few troops, and picking proxies is an inevitable part of this surge.
Yet when Iraqis think about Hakim, they think first and foremost of his family's corruption and behind-the-scenes power. The Arabic word Ittilaat, "intelligence service," is often used to describe Hakim's SIIC. That's not a good sign. Militarily strong on the ground in the holy city of Najaf, Hakim and SIIC could envelop Grand Ayatollah Sistani, using both subtle physical intimidation and praise to ensure his support. Sistani is a cautious man; all lose in Iraq if he is de facto held hostage. It would be best not to tempt fate by fortifying too much the Badr Corps, an institution that could conceivably mutate into an Iraqi version of the Iranian Revolutionary Guard Corps, of which it once was part.
The immediate priority for the Bush administration should be to encourage the passage of a provincial-election law, then to speed the administrative preparations for a vote, which will take several months. These elections should breathe fresh air into Iraq's national politics and put purple index fingers again all over Middle Eastern television screens. Since the invasion, America's prestige has never been higher. The renewed mystique may not last. Many in Washington, especially inside the Pentagon and the leadership of the Democratic party, may resist holding provincial elections because they are likely to prevent big reductions in U.S. forces before 2010. But the president must realize this is probably a make-or-break issue for Iraqi democracy.
By the hair of his chinny-chin-chin, President Bush will probably leave office with a sputtering but functioning democratic system in Mesopotamia. Accepted wisdom now holds that the ripple effect from Iraq, if there is one, is all bad. In Europe this is mostly true. The loss of Tony Blair's Britain as a reliable and gutsy ally is perhaps the most regrettable by-product of Iraq in Europe. A second-rate military power, the United Kingdom was never going to be able to cope with a stressful, violent occupation. Our "special relationship" will continue, especially in the area of counterterrorism, where the United States has grown closer to every European security service since 2003. But Iraq has accelerated a distancing of American and British political elites.
In the Middle East, however, it is not clear that America's position has suffered that much from the invasion. Perhaps with Iran: More Americans might be willing to entertain the idea of preventive military strikes against Iran's nuclear facilities if the Bush administration had not done so poorly in Mesopotamia. But that issue aside, ripples from Iraq could still turn out to be more positive than negative, perhaps decisively so.
AL QAEDA AND THE WAR ON TERRORISM
Contrary to the views of most counterterrorism experts and most Democrats, the war against Islamic extremism has probably seen a pivotal victory in Iraq. Unlike 9/11 or the bombings in Madrid and London, the Second Iraq War, with its ferocious Muslim-on-Muslim violence, has actually provoked some deep reflection about holy war among the faithful in the Middle East. Although the situation could still unravel and Al Qaeda in Mesopotamia could get a new lease on life, the fight against that organization, and the Sunnis' second thoughts about their zeal against the Shia, have shaken Arabs' easy characterization of this war as a war against American occupation.
To begin with, Al Qaeda central--Osama bin Laden and his lieutenant, Ayman al Zawahiri--know they are in trouble. The war has produced a small epistolary avalanche of tactical recalculations and spiritual appeals to brother Muslims to focus the fight on American infidels. Iraq was supposed to break the United States. This was, in bin Laden's words, "a war over the destiny of the entire umma [the worldwide Muslim community]." Instead, Iraq is becoming a serious setback, if not a spiritual Waterloo, for the Muslim world's most feared and most respected jihadists. As bin Laden conceded about the Iraqi jihad, "Allah only knows what sort of ramifications it holds for Islam and its people."
In his December 29 declaration on Iraq, bin Laden savagely attacked Sunnis who are working with the Americans, calling them guilty of "clear infidelity and an open apostasy." Abu Ahmad al-Baghdadi, a spokesman for one of the Sunni insurgent groups, didn't buy this. He told Al Jazeera, the pro-Sunni, pro-insurgent Arabic satellite TV channel, that "Al Qaeda in Iraq has become a hand that destroys the Sunnis. Many Sunnis have been killed by them. Al Qaeda in Iraq is a source of corruption. . . . They always direct their weapons at innocent civilians." Al-Baghdadi had no difficulty throwing the Prophet Muhammad back at bin Laden: Why shouldn't Sunnis make a truce with the Americans when "the Prophet made a truce" with nonbelievers?
Commentary like this influences Muslim attitudes far more than all of America's public-diplomacy outreach; it is worth far more, too, than the soft-power appeal of any Barack Obama signaling his empathy with the downtrodden of the Third World.
Although Senators Obama, Hillary Clinton, and Joseph Biden would rather burn in oil than give George Bush credit for his insistence on linking the war in Iraq to the battle against Islamic extremism, the president has damaged al Qaeda--and al Qaeda has damaged itself--more in Mesopotamia than on any other battlefield. Al Qaeda will live on in the forbidding mountains of Afghanistan and Pakistan, and from there it may do horrendous harm to the United States and its European allies. But if al Qaeda is ever to evanesce, it will be because its jihadism lost its ethical appeal in the Arab heartland where it was born. American and Pakistani paramilitary successes against al Qaeda will never be sufficient to demonstrate the organization's evil to Muslims worldwide. Indeed, Pakistan's ineffectual attempts to assert control over tribal border areas have been counterproductive, giving bin Laden a fillip of hope at a time when his jihad is facing decided difficulty in Iraq.
By contrast, it is democracy in Iraq, as bin Laden correctly foresaw, that would be toxic to his cause: Few ideas elicit from him more venom. It is one of the great ironies of the war that President Bush, a man not known for perusing much primary material, actually did read bin Laden's declarations about Iraq and did consider his ideas. It is by no means clear Bush's antiwar critics ever have. We have not been able to counter the Egyptian and Saudi Arabian intellectual engines of jihadism against the United States; this would be difficult even if Bush's State Department actually tried it. But what we have done is help Iraqis grope their way toward democracy, even as al Qaeda's cruelty has rallied Iraqis to fight at our side.
AFGHANISTAN AND PAKISTAN
A year ago George W. Bush was the first American president to be on the way to losing two wars simultaneously. Now, he may be losing only one. The good news is that the administration knows it's in trouble in Afghanistan.
Even with the strain of Iraq, Secretary of Defense Robert Gates will likely increase troop levels sufficiently to parry the resurgent Taliban where it matters most. Afghanistan was always going to be an extraordinary test of American will. If the United States remains in Iraq for at least a decade (a pretty safe bet), it's likely to be in Afghanistan much longer.
Afghanistan is already proving too much for most of our NATO allies, who are hunkering down--and, in the case of the Spanish and Italians, "secretly" dealing with the Taliban in an effort to deflect violence from their troops. (One former senior Spanish official calls this "preemptive surrender.") With the mountainous tribal lands of Pakistan as a safe haven, Afghanistan's Pashtun Taliban--many of its members actually born in Pakistan's refugee camps and educated in its religious schools--was always going to recover. It is probably too late for President Bush to develop a new policy toward Pakistan. To do so, he would have to ignore the counsel of the State Department, the Pentagon, the CIA, and Washington's unofficial foreign-policy establishment, which remain more or less wedded to a pre-9/11 alignment of the United States with the Pakistani military--our "essential" but fragile ally against al Qaeda. We will soon see the denouement of our post-9/11 counterterrorist training of the Pakistani Army: Openly or discreetly, we must pray that it can wear down the Islamic extremists who control the tribal lands and are challenging Islamabad in the neighboring North-West Frontier Province.
A more effective, though nerve-racking, strategy would have had the United States use ground and air strikes inside Pakistan since 2002 to punish those aiding the rebirth of the Taliban. We should have been more focused on actually killing al Qaeda, the Taliban, and those in Pakistan who support them. Soon we could be in a worse position than we were before 9/11, with Afghan and Pakistani militants plotting and training without real fear of American harassment. Given the growing extremist presence there, the North-West Frontier Province may be destined to experience years of suicide bombings and insurgent attacks. This probably can't destabilize the entire country, but it can seriously stress the military and the intelligence services, where Pashtuns from the North-West Frontier Province disproportionately serve. No matter what we do, and no matter whether its government now becomes more democratic or more authoritarian, Pakistan is likely to experience increasing violence.
If undertaken at this late date, American strikes inside Pakistan would roil our relations with the Pakistani military and make life more dangerous for Americans living in Pakistan and Afghanistan. Our intelligence cooperation with Islamabad would probably suffer severely. Even secular Pakistanis might rise in indignation. On the other hand, what we have now is definitely not working. We will surely rue the day the United States allowed al Qaeda and its sympathizers a place to grow unmolested.
As Britain's internal-security service, MI5, is well aware, the Pakistani connection is now the most worrisome nexus for al Qaeda to exploit, what with the enormous number of Pakistanis traveling between the two countries. According to British internal-security officials, every year upwards of 80,000 Pakistanis resident in the United Kingdom, many of them British citizens, visit areas of Pakistan that are "rich with jihadists." Other European countries also have Pakistani communities. The discovery of jihadist cells within them is becoming a regular occurrence.
So far, the Pakistani military has proven itself unwilling or unable to fight it out with Pashtun fundamentalists who live near the Afghan-Pakistani border. With America's strong encouragement, President Musharraf attempted to extend his writ into the tribal regions. He failed abysmally, watching Pashtun forces in the army and the frontier constabulary grumble and often desert.
Unless we deploy a lot more troops to Afghanistan to implement an "ink-spot" counterinsurgency akin to the one led by General Petraeus in Iraq, it's doubtful the United States and NATO can reverse the ascendancy of the Taliban among the Pashtuns. Since we don't want to invade another country, we will give the Pakistani army another chance to destroy al Qaeda and neutralize the Taliban. But if the Pakistanis don't do what is necessary in the next 12 months, they probably never will. And note: If Washington is reluctant to launch paramilitary strikes into northwestern Pakistan to kill members of al Qaeda and disrupt new terrorist training camps, it definitely isn't going to launch covert operations to neutralize Pakistan's nuclear weapons in the event the Pakistani army becomes too Islamic. The level of intestinal fortitude and the quality of intelligence required for the former is vastly less than would be required for the latter.
Still, there are grounds for expecting that Pakistan will hang together. Its history since 1947 has given the nation an identity that sticks. The lingering legacy of the British--an aversion to extremes--among both the civilian elite and the tightknit officer corps has usually kept Pakistanis from acting like the more brutal elites of the Arab Middle East. As long as the unique ability of the Pakistani army to absorb both secularists and Islamists within its ranks continues--a modus vivendi that has held since at least the 1970s--the country won't fall apart and its nukes are unlikely either to disappear into the hands of extremists or to get fired. It's impossible to overstate the extent to which Pakistan's fundamentalists loathe the polytheist Hindus of India. Yet the Pakistani military, a tough and fraternal organization, has kept the country from indulging its worst instincts and doing anything stupid with its nukes. Even occasional military strikes by American forces against Taliban and al Qaeda strongholds in the remote tribal areas of northwestern Pakistan would not crack this institution or its control of nuclear weapons.
We will see whether the Pakistani army, always the backbone of the country, is sufficiently wise to allow the people's continuing attachment to messy democratic politics the room to grow. Pakistan's political salvation is probably a long way off no matter what Washington does, but greater distance between the United States and the Pakistani military would benefit both parties. Although it's impossible for America's allies within the military to say so publicly, they would likely be in no worse position if the United States assumed the responsibility for necessary military operations in the tribal regions. Then the Pakistanis could join our enemies in damning us for violating Pakistani sovereignty, while leaving all concerned more secure than if the Pakistani military took on the emboldened Pashtun fundamentalists and lost.
PALESTINE, EGYPT, SAUDI ARABIA, LEBANON, AND SYRIA
The Levant has not been kind to the Bush administration. On virtually every issue in this region, the White House has misfired, not fired at all, or been worn out by contradictory aspirations. The Israeli-Palestinian confrontation is as it was in 2000: an event controlled by the continuing Islamist evolution of the Palestinian people, who do not in sufficient numbers countenance peace with a Jewish state. The only real question remaining is whether the Fatah dictatorship on the West Bank will evolve quickly or slowly into a spiritual twin of Hamas. Contrary to what has been endlessly suggested by foreign-policy "realists," democracy did not destroy Fatah or undermine the chances for peace. Fatah destroyed Fatah. Westernized secular autocracies have similarly squandered their legitimacy throughout the Middle East ever since World War II. Elections will inevitably give expression to this failure.
No elected Muslim Arab government is likely to embrace Israel for many years to come. President Bush got the order backwards in his post-Annapolis speeches, suggesting that the Palestinians need to be able to envision a complete state living side by side with Israel so that democracy can triumph. Democracy did triumph among the Palestinians--Hamas won. Arab autocrats sign peace treaties with Israel; Arab democrats won't. That explains the Israelis' preference for Muslim dictatorship over Muslim democracy. Believing Muslims first have to figure out how to reconcile parliamentary legislation and the Holy Law; how to accept a Jewish state on land that devout Muslims see as part of the historic umma is much farther down this evolutionary path. Max Boot's parallel with the English and the Scots, who made war on each other for centuries, is apt--but the religious, social, cultural, political, and economic differences between the Jewish Israelis and the Muslim Palestinians dwarf the historic divide between Britain's warring peoples.
The preeminent issue for Palestinians, as for others in the region, is responsibility: Will Muslims become responsible for themselves, ethically and politically? Will they stop blaming others and blame themselves for their problems? It's very difficult to see how the Islamic, especially Arab, world can confront its manifest problems without Muslims, individually and collectively, assuming responsibility for their actions. Democracy is a good idea for the Middle East not because it will improve Western-Muslim relations. Odds are, in the short term, it will do the opposite. Increasingly, Muslims, especially devout Muslims, are backing democratic politics because they see this as the only way to restore legitimacy to government. Democracy, not dictatorship, opens societies to debates, which fundamentalists may well win. Elections that allow fundamentalists a chance to triumph--not police-state repression or antiterrorist pronouncements by the co-opted official clergy of the challenged regimes--are the key to eventually destroying the appeal of the violent extremists. As always, bin Laden is a helpful guide: If he loathes democracy among Muslims, it's a good reason to support it.
Hamas's triumph in the Palestinian elections of January 2006 probably put the last nail in the coffin of the Bush administration's efforts to encourage reform in Egypt and Saudi Arabia, the two countries that drove the spread of modern Islamic radicalism. From the beginning, Bush's democracy-and-reform agenda was largely rhetorical, undermined consistently by America's deference to Saudi oil and the senior cadre of the State Department's Near Eastern Bureau who saw the status quo as a safer bet than the convulsive, unsettling world of representative politics among Muslims. Like those American supporters of Israel who have grown queasy at the sight of democracy on the West Bank and in Gaza, the State Department's senior Arabists see the current regimes as bulwarks against radical Islam. They may admit that these autocracies have helped to radicalize their populations through repression. They may be uncomfortable with the aid these regimes have given to conservative religious forces to thwart more radical religious groups. They may even be distressed to see Egypt's ruler, Hosni Mubarak, harass and jail liberal democratic dissidents and critics (though if the U.S. ambassador in Cairo, Francis Ricciardone, is upset by this, he's doing a good job of hiding it).
But they are unwilling to risk the unknown, which is what greater democracy would produce. For them, 9/11 did not change the world; it made one more argument for hanging on tight to the imperfect but "stable" world we had. The only thing they really want to export to the Muslim Middle East is security. Even though President Bush occasionally throws a rhetorical Molotov cocktail at this pre-9/11 "realist" understanding of the Middle East, in practice this view now defines his administration. Bush fils asking the Saudis, pretty please, to lower the price of oil could just as easily have been Bush père. Bringing democracy to Saudi Arabia understandably was never a priority for the Bush administration (there were better places to push). But the administration egregiously failed to challenge the Saudis on matters of faith.
Even the relatively moderate, state-supported version of the Saudi Wahhabi faith, derived from the severe Hanbali school of law, is inimical to what Muslims historically have considered mainstream. It is also organically anti-American. On a global level, it is more dangerous than anything that has ever come out of Iran. After 9/11, President Bush could have easily ordered the State Department and the CIA to track Saudi state-supported religious institutions and publications in the Middle East and the West. Regular public reports on Saudi Arabia--biennial unclassified National Intelligence Estimates on Saudi missionary activity around the world--would have gone a long way toward galvanizing Western and anti-Wahhabi Muslim awareness of what the Saudi royal family and the Saudi state were doing. It's not too late for the American government to do this--Congress could require any administration to undertake such reporting. Foggy Bottom and Langley would fight it strenuously since it would crimp their bilateral Saudi relationships. Today, in post-9/11 Washington, they have the upper hand.
Lebanon today, too, isn't what the Bush administration had hoped, and Syria and its principal Lebanese ally, Hezbollah, are once again gaining strength through murder and intimidation. Once Syria's dictator, Bashar al-Assad, realized that Bush's soft-power Cedar Revolution wasn't going to bring him down (and for a moment in 2005, he wasn't sure), Washington lost its ability to coerce and intervene.
America's retreat from democratic Lebanon has been somewhat counterbalanced by Israel's bombing raid against the suspected nuclear site near Dayr az-Zawr, in Syria, which surprised and silenced both Damascus and its key backer, Tehran. But even here, the reaction in Washington is distressing. The Israelis exercised preemption, and the Bush administration--which has made preventive war an official part of America's post-9/11 doctrine--remained silent. The administration seems little inclined to dispute Israeli intelligence, but even if it thought the Israelis were wrong about North Korean involvement in this suspected nuclear site, the signal from the raid is exactly the one the president and the vice president were trying to send the Iranians about their nuclear facilities if they didn't stop uranium enrichment. It's hard to imagine a more helpful event for European and American Iran diplomacy, with its good-cop, bad-cop approach, yet Washington let it fall flat. It appears the administration went easy on Damascus partly for the illusory promise of Syrian participation in the Israeli-Palestinian peace process--which shows how far it has reverted to a pre-9/11 understanding of the Middle East.
Iraq and the war on terror will likely save the president's legacy in the Middle East. Although his soaring pro-democracy rhetoric has often been nullified by the actions of his minions and the president's own misunderstanding of what democracy in action means in the Muslim Middle East, George W. Bush has probably changed forever how Washington views Muslims and their rulers. Many in Washington may still believe, as George Kennan did, that Muslims are suited to dictatorship. Publicly, however, that position is no longer acceptable. This is no small achievement.
An uneasy and healthy tension now exists between rhetoric and reality, guaranteeing that Americans will continue to debate what has gone wrong and right in the Muslim Middle East. Whether America escapes another 9/11 or not, the president deserves credit for understanding that the region's murderous anti-American extremists, both secular and religious, had to be confronted on the battlefield. Sanctions, cruise missiles shot at rock huts and empty intelligence-service buildings, and close liaison relationships with foreign internal-security services were not enough. If the United States is brutally struck again by holy warriors, President Bush will seem prescient and wise--about the need for reform in the Middle East's autocracies, about the strategic shortsightedness and immorality of pre-9/11 American foreign policy toward Muslims, and about the imperative to use ugly tactics against mass-casualty terrorists. Given the forces arrayed against him, his administration's failures, and his own limitations, these are achievements even Ronald Reagan would envy.
Reuel Marc Gerecht is a resident fellow at the American Enterprise Institute and a contributing editor to THE WEEKLY STANDARD.
Subscribe to:
Comments (Atom)
