Formerly TBS Journal

ISSN: 1687-7721

Financial Crisis in the UAE - A Paralysis of Analysis

Issue 10, Spring 2010

By Sam Potter

Central Dubai by night

Central Dubai by night



At times during the global financial crisis the international press has been ruthless in its analysis of the impact felt by the United Arab Emirates (UAE), and in particular Dubai. Yet in the country’s local press, its problems were tackled with kid gloves – when they were tackled at all. For a long time, the local media were loath to even admit the UAE was affected. Many observers suggest that the government exercised censorship over the issue, instructing media outlets to toe the line or else. But the truth is more subtle, as contributor Sam Potter explains.


It’s a comparison that’s barely worth making. One is a globally famous newspaper of 225 years' standing, headquartered in one of the world’s great capitals (population 7 million plus), and, though recent years have seen a decline in circulations, it still boasts a paying audience of more than half a million. The other is a mere 32 years old. It is published from a city with some 2.5m inhabitants, and reaches an audited audience of 115,366.


Yet the difference in the respect afforded The Times of London and the UAE’s Gulf News is not only due to history and circumstance; it is also closely related to content. The Times enjoys and employs the freedom you’d expect from a country in the top twenty of the Reporters Without Borders Press Freedom Index 2009, while the Gulf News appears to suffer from the constraints of a country which ranks 86th on the same list.


The contrast between the two titles has been graphically illustrated throughout the global financial crisis. On the one hand, the Times has provided a detailed, urgent and continual commentary on the world’s economic woes and the problems Britain has endured as a result. In some eyes, its work has on occasion crossed the line into hysterics, but the fact remains that its coverage has been extensive and for the most part thorough. On the other hand, Gulf News – like all the local papers in the UAE – has provided decidedly poor coverage of the crisis.


In December 2009, for instance, at the height of the Dubai World debt crisis, the Times published more than 40 articles explaining the Dubai World situation and the ramifications being felt across the global financial markets, while Gulf News published less than half that number – just 20 articles. So a key newspaper in the local media scene, based just a few miles from the Dubai World offices, paid the story less attention than a foreign title almost 3,500 miles away. No wonder the watching world pays little attention to local media within the UAE.


The assumption is generally that the UAE government has had a program of censorship in operation, whereby local media outlets have been forced to toe the official line (that the UAE is fine, that there are no problems, and so on). But in fact this is a half truth: the UAE government has no need to enforce a program of censorship, because it has, over time, fostered an environment in which the media will censor itself. The problem it has just discovered is that a censored media (self-censored or otherwise) is a weak media.


Unintentionally the government caused the local media to be a force against it during this whole international crisis,” says Ahmed Mansoor, a prominent UAE freedom of speech activist. He believes that the reports and predictions emanating from certain corners of the international media – including the Times – are too often exaggerated. But he says the local media’s voice has proved wholly ineffective against the tirade of negative foreign reports, and it’s the government’s long-term management of the media – coupled with a general lack of transparency – that has brought about the situation.


On one side they built, over time, many obstacles and many hurdles for the press to talk freely,” says Mansoor. “And on the other side they did not supply them the required information. These were major reasons the media were unable to stand and reasonably defend the country.”


So the UAE’s viewpoint was not only represented by a stifled media with low credibility on the world stage, but one operating with inadequate information.


Mansoor is not naïve. He’s well aware that the United Arab Emirates has faced its share of troubles throughout the economic downturn. But some international articles go too far, especially in the British press. Take, for example, Rod Liddle’s opinion piece for the Times, entited “The joke’s on us as Bling Central lose its sparkle”. He writes: “The desert will reclaim the expensive hotels with their bling-encrusted lobbies and opulent suites … and the sea will wash away those hideous palm-shaped islands where our cheaper celebs spend spring weekends, the expat apartment blocks will crumble into dust, the scorpions will return and Dubai will be what it was in the 1960s.” Mansoor calls reports such as these “exorbitantly exaggerated”.


I don’t want to say that everything that’s been said by [international] media has been wrong – there’s quite a lot that has been said there which is extremely right,” he says. “However, that does not mean that everything that has been said outside has been correct. There has been some exaggeration in some parts, and our media was not able to defend [the country] because it did not have the self-confidence to talk about these subjects.”


The weakness of the local media and the lack of credibility afforded it on a global stage stems from two longstanding and commonly recognized concerns: Firstly, almost all local media in the country is owned by, or indirectly influenced by, the government. Secondly, the media law in the country is opaque and outdated, and most independent commentators have grave misgivings about the new version in the pipeline.





The ownership issue is a well-established barrier to free speech. Three key newspapers – Al Bayan, Emarat Al Youm and Emirates Business 24/7 – are owned by the Dubai government through Dubai Media Incorporated, while the Abu Dhabi government owns Al Ittihad and The National through Abu Dhabi Media Company. The remaining papers are privately owned but most have a close connection to UAE governing bodies; Gulf News, for instance, is published by Al Nisr Publishing, which is part owned by the country’s Minister of State for Financial Affairs, Obaid Humaid Al Tayer. It’s a similar story for radio and television, with both of the UAE’s two most prominent emirates well represented in each medium.


[Not all local media] may want to be on the same side as the government, but they are because their existence is bound by the existence of the government and the support that they receive from the government,” says Mansoor. He will concede that the foreign local media (i.e. the English-speaking media) has a “relatively” higher tolerance and higher level of freedom when it comes to sensitive subjects, but says: “The problem is that they are not totally out of government control either. They are subject to the same rules and regulations, the same legislation covers both Arabic and non-Arabic media. The same sources of support are supplied to both. The owners of the foreign local media (the English-speaking media) are either government or pro-government individuals.”


The result of this situation can be seen in the Reporters Without Borders Press Freedom Index 2009: the UAE occupies 86th position on the list. Countries including Liberia and Georgia are placed higher than the UAE.


The invisible but palpable influence of the government has been present throughout the downturn, both in the content of the papers and their behavior. In December, Gulf News suffered great embarrassment when an internal memo was leaked. It instructed editorial staff to avoid using words like “bailout” and “default” and terms such as “debt crisis”. Instead, reporters were urged to “ensure the following politically correct terminology is used” before being provided with words such as “financial consolidation” and “fiscal support”.


The memo was leaked to Zawya Dow Jones, and the story was also run by the Wall Street Journal, and both outlets no doubt took great delight in drawing the matter to wider public attention. Their parent company, News Corp, also owns Britain’s Times and Sunday Times, which ran into trouble with the UAE government just a few weeks prior to the leak.


At the time Gulf News editor Francis Matthew described the memo as “a style guide”, and in fact the information contained in it was probably the result of an independent editorial decision. I have spoken with a number of journalists across the UAE who all have a similar story to tell about their efforts to cover the downturn. They are not always handed “style guides”, nor do they believe the government is issuing blanket directives, but they confirm that media outlets censor themselves as a matter of course.


One former business reporter of a national daily newspaper told me: “It would almost be better if there were someone in the room from the government saying, ‘You can say this and not that.’ At least then everyone would know where they stood. But the truth is that government intervention is applied retrospectively. It means you don’t know exactly where you stand so you must err on the side of caution.”


Dubai Media Observer is an anonymous blog used by members of the English-speaking media in the UAE to vent their frustrations over press freedom, employers, and each other. In December the host of the blog asked for concrete examples of acts of censorship by the UAE government during the financial crisis: it received 17 comments from contributors, but not one offered a clear-cut example. The comments do, however, give an idea of what’s really happening.


Talk of censorship is a red herring,” says one post. “I suspect that anyone working in local media can testify that the long arm of the censor rarely makes an appearance in or around the newsroom. Editors are not, except in rare occasions, getting phone calls from big men who insist that a certain story be yanked from the paper. The powers-that-be know how to send a message , and they know that certain editors (particularly at publications bankrolled by the powers-that-be) would rather keep their jobs than rock the boat.”


Another post puts it more succinctly: “Nobody censors [UAE daily] The National! We do that ourselves, thank you very much.”





The second concern undermining the UAE media’s international credibility is the legal circumstances in which it operates. The present, antiquated Press and Publications Law (it was established in 1980) is woefully inadequate according to most observers, and its replacement, the UAE draft media law (currently awaiting the signature of President Shaikh Khalifa Bin Zayed Al Nahyan) has been widely criticized. Human Rights Watch says it “unlawfully restricts free expression and will unduly interfere with the media's ability to report on sensitive subjects”, and Reporters Without Borders calls it “worrying”.


An article featured in the last edition of AMS covers the media law in more detail ( One of the more questionable clauses is highly pertinent to the coverage of economic events and as such could cause further consternation to UAE-based journalists covering economic events. The law specifically targets “misleading” stories “that harm the national economy”.


This ominous and vague-sounding rule will surely make it even more difficult for local media to adequately and openly address the UAE’s outlook in a world downturn, because presumably the government will be the arbiter of what is misleading. But in the early days of the crisis the government maintained that the country was completely untouched by the crisis; if the law had been in use, would anyone claiming differently have been accused of misleading the public and punished accordingly, even though they would have been right?


I contacted Ibrahim Al Abed, director general of the National Media Council. the UAE’s media regulatory body, by email to ask what effect the new law, and this clause specifically, would have on reporters’ ability to cover the crisis.


The clause referring to stories that 'harm the national economy' specifically states that the law is applicable only in cases where such stories are not only misleading and inaccurate but are also known by their writers to be so prior to their publication,” he replies. “Even then, the relevant clause of the law would become applicable only in cases where the media outlet concerned refuses a request to correct the inaccurate information through subsequent publication. Whether or not a particular story may have a damaging effect on the economy is not the point. The relevant clause is designed to deal with stories that are inaccurate and misleading, are known in advance, prior to publication, to be inaccurate and misleading and where publishers refuse to publish corrections of any errors of fact contained in their published stories.”


But the new law is yet to be implemented, and still papers avoid the subject of the economic downturn and its affect on the UAE completely, or treat it with kid gloves. The media seems to be operating under an invisible censorship that exists beyond the law, and many believe the NMC bears responsibility for it. But Al Abed rejects the accusation.


The NMC has no policy, as such, relating to media coverage of the financial crisis,” he says. “It is not the role of the NMC to try to set guidelines for the nature of coverage of any issue, beyond the desire to encourage reporting to be accurate and thorough and opinion pieces to be well-sourced. The NMC has worked during the crisis to encourage officials, both of government institutions and of companies affected by the crisis, to engage with the media, in the belief that this is the best way to allow the media to present a balanced view.”Nevertheless, a number of incidents through the course of the financial crisis have left observers concerned over the government’s influence. In April 2009, for example, the UAE government imposed a distribution ban on an issue of the monthly French magazine Jeune Afrique. The issue contained an article by journalist Akram Belkaïd entitled “Dubai, end of the dream”. It covered the emirate’s economic and political difficulties, and was evidently not welcome.


And in October, one of the UAE’s most popular Arabic blogs, Mujarad-Ensan (Just a human being), was blocked by the UAE’s biggest Internet Service Provider, Etisalat, the day after its author posted an entry entitled: “Let’s laugh together: our economy is doing well”. A full explanation for the decision was never provided, but the entry analyzed the impact of the US housing crisis on the UAE. It was, however, unblocked 10 days later.


Then there were the bans incurred by the Times and Sunday Times. The two heavyweights felt the displeasure of the UAE’s leadership for their coverage of Dubai’s debt crisis. Distribution of the Sunday Times was blocked across the country in late November thanks to a report which included a photo montage showing Dubai ruler Sheikh Mohammed Bin Rashid Al Maktoum sinking under a sea of debt, and the Times was censored a week later for describing Sheikh Mohammed as a “benign dictator” and criticizing his management of the economy. Ironically Rupert Murdoch, chairman and CEO of News Corp (the parent company of the papers) was keynote speaker at the Abu Dhabi Media Summit in March. As one might expect, he seized the opportunity to encourage regional governments to regulate with a “light touch”. “By making the decision for greater openness, you will… declare your confidence in your people,” he said.


A somewhat less clear-cut incident, but potentially more significant, surrounds Nasser Bin Hassan al Shaikh, who until the middle of last year was director-general of the Government of Dubai’s Department of Finance. Previously he had been a member of the Executive Committee and the Supreme Fiscal Committee, Chief Financial Officer of the Dubai Office (Government of Dubai), and he has served on the boards of a raft of successful private and public-sector companies.


In short, he was well-qualified for his job. That didn’t help him, however . In May he was moved from his post at the Department of Finance to become Assistant to the Director of the Ruler's Court for Foreign Affairs, before disappearing from government service altogether just over a month later. Mansoor believes Al Sheikh’s departure from the government was prompted by his appearance and performance at the World Economic Forum in Jordan, where he made comments on how $10 billion raised through long-term bonds would be used. A few weeks earlier he had also spoken about the economic situation on a Dubai business radio station, Dubai Eye.


He was a very competent guy, a high-calibre guy but he was fired because he talked about subjects that the government would not talk about in a very open way,” says Mansoor. Al-Sheikh’s removal certainly smacks of an effort to control the information flow to local media. No official explanation has yet been given for his departure.





Government influence – whether perceived or genuine – is serious enough to provoke an outspoken reaction from even the local press on occasion. These voices of dissent – or perhaps they are cries for help – are rarely aired publicly, but they do surface from time to time. Gulf News risked the government’s ire recently when it published an opinion piece by its Abu Dhabi editor, Abdullah Rasheed Al Hammadi. Entitled “The ceiling of press freedom in the UAE is falling”, it was an unusually direct message to the government that lamented media freedom in the UAE as it now stands.


The media is faced with two major challenges,” he writes. “The first is unregulated media openness, represented by the huge flow of information in the foreign media. The second is the inability of the national media to compete due to the restrictions imposed on them…. There isn’t enough protection provided to journalists and self-censorship is practiced by our newspapers to avoid angering official bodies and to please the government…. Standards have declined such that newspapers carry little news, advertisements and a few shallow words.”


Rasheed’s article, which was intended to encourage a productive dialogue between the government’s Federal National Council (the country’s legislature) and the NMC as they met for the first time in months, prompted a simple response from Al Abed at the NMC when I asked him about it. “The very fact that Abdullah Rasheed was free to publish his article is an indication that press freedom does exist,” he says. “There is critical coverage on a wide range of issues daily. Whether newspapers and their reporters practice a degree of self-censorship is a matter for them, not for government, to address. The same applies to the media internationally. It is worth noting, perhaps, that freedoms in this area, as in others, are best preserved and protected by using them.”


Rasheed’s ploy to influence the FNC/NMC meeting appeared to come to nothing; reports said the meeting concentrated on the Emiratization of media companies and the plan to implement TV audience measurement in the UAE, rather than on press freedom and censorship.





The NMC may not have adopted a definitive strategy towards the media throughout the financial crisis – at least, not publicly – but Mansoor says they did not need to. The control it exercises in general has allowed it to define coverage in the local media. “It’s all driven by the government,” says Mansoor. “The media here cannot go outside the boundaries of the government, and that’s why any view they come up with is official.”


This situation has been achieved largely thanks to the dual role of the NMC. It is not only the face of the media law, it also runs the official government news agency WAM: a carrot and stick situation, according to Mansoor. “I’m totally against combining the NMC and WAM under the same management,” he says. “From one side you handle the legislation – they engineer the media activity laws – and on the other side they are praising this draft. It’s like a double-sided knife that could hit you from any side.”


According to Mansoor, this means that media outlets are under constant pressure to both accept without question and use the press releases published by WAM. He says it’s a strategy that has lately been used aggressively in an effort to counteract negative international coverage with positive national stories.


Al Abed dismisses the suggestion. “There is no undue pressure on the media to publish WAM stories,” he says. “Many of the local media outlets use very little WAM material, except as sources from which stories of their own are subsequently developed, as is the case with news agencies throughout the world. Frequently, local media outlets do not publish WAM stories which contain important statements relating to government decisions or policies – but this is entirely a matter for the media outlets themselves to determine.”


It is true that many outlets choose not to use most WAM releases, largely because they are so one-sided in nature. But this leaves a distinct gap in coverage of government affairs, and hence a huge hole in an average daily newspaper. Faced with little choice, editors grudgingly use WAM material. Gulf News, for instance, often prints WAM stories verbatim, and cites WAM as the author. There is no effort even to rewrite the story, let alone conduct any further investigation into its veracity or otherwise.


It’s hard to place too much blame on members of the local media, however. They are in a difficult situation: almost all outlets are controlled or influenced by government. The outlets themselves have to preserve their existence, and the individuals working for them want to preserve their livelihoods (not to mention their liberty), so they are unlikely to challenge the status quo. Which means the onus is on the government to change its approach.


It would be a wise decision, according to Nicholas Lunt, managing director of M:Communications in the Middle East. M:Communications is an international financial PR agency with a global network of offices, and Lunt says that, to be taken seriously on the world stage, trust is everything.


If [the government] didn’t realize before, they surely must realize now that markets – equity capital markets, the whole financial system – is not really about money, it’s much more about trust,” he says. “And the trust has dissipated. So working more effectively and more transparently with both local and international media to tell their story in a transparent way – in a timely way – would go a long way to restoring the trust that has dissipated.”





The overall effect of this somewhat messy situation is that the UAE has lost both trust and credibility, not just from a financial perspective, but also from a media point of view. The world was watching and – thanks to the long-standing issues of censorship – the local media missed an opportunity to rise to the occasion.


Mansoor tells me that the UAE’s clumsy media handling of the crisis is bad news for its aim to be a major media center in the Middle East, though for now they’ll probably get away with it.


The facilities are still the best in the region,” he points out. “And people look at it differently. I’m sure that the international media would not compromise their freedom. If they reach a point where they cannot state whatever they want to state freely, then they would say goodbye, thank you we are not going to compromise our value. [But] if I were a media owner, I would definitely look at the international media reports that are generated about the country when it comes to freedom of expression.” After all, facilities can always be built somewhere else.


But the issue goes beyond the obvious business benefits of becoming an international media hub (attracting large employers, forging international contacts and so on). The state of a nation’s media is often an excellent measure of the more general health of a country and, as Lunt points out, economic and financial coverage is a vital part of the media’s role.


A vibrant media is an indication that there is a vibrant economy and a vibrant society,” he says. “And a critical part of a healthy media is going to be strong, informed, intelligent financial coverage. I would say that it’s absolutely essential that there is good local coverage of that sector.”


Those of us with a vested interest in freedom of speech in the UAE have some grounds for hope: the age of digital technology and the Internet is shining a light into some of the darkest corners of the globe. The UAE government has found out the hard way that a financial crisis is not the only thing beyond its control – international news coverage is also out of its reach. How much longer can the local media’s inadequate coverage remain the norm when more credible reports are just a mouse click away?


Sam Potter is a media graduate, writer, and journalist for publishers Mediaquestcorp, where he covers the Middle East media industry for titles including Communicate, Trends and

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