Thursday, April 09, 2015

A few thoughts on: Politics, and Foreign ownership in UAE

I've more or less kept blogger up as a running experiment on my thoughts, but to be clear I keep my one-liners off-line and like to have discourse on the topics I bring up instead of a monologue.

But sometimes, when its late at night, and I have nothing better to do I get lost in thought and come back to this blog.

Its fitting that a few posts back I talked about Iran, and these days thats a tense topic.

Iran and the USA have been going through dialogue to remove sanctions, which I believe is (still) in everyones best interests.

At the same time, Saudi has launched a second assault on Houthi's in Yemen to stem Shia influence in the area... I am of two minds on this.

The first is that "war is the failure of politics"; this isn't an outright war yet, but its heading there. In the UAE we have a mandatory draft of which I'll be heading to hopefully this December. The UAE is taking a more active stance in this regional conflict and we are preparing and even tagging along with Saudi Arabia.

We as a people (regionally-speaking) need to politic more. Open trade is around the corner, and yet the drums of war are banging?

This may sound a bit biased as a draftee, but I think the logic of tense trade suits us better than a cold-war-esque MAD scenario.

Second I think that turning politics into religious arguments in this case is kindling a flame. Time and time again we have seen wars fought on religious grounds that weren't really that religious, and this seems to be heading that way too. This is the more dangerous aspect of the conflict, and one that is harder to resolve... Keeping it political is likely the solution yet again, and Im holding out hope that it heads that direction.

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On foreign ownership in the UAE, this is something thats been debated a few times already, and a new company law has been set that likely paves the way for it.

I have serious concerns on the rise of debt-equity swaps in our economy, and the new company law does provide provisions for that. I believe that both traders and the legal system needs to seriously prepare for a shock, and careful regulation is needed to ensure it doesn't wipe out local trade.

Pushing for FDI is fine, and the DED is taking some good steps, but the way they are going about it is  downright scary. Enfranchising foreign companies is one thing, but simultaneously allowing debt-equity swaps which may allow for distressed investing firms to take root here in traditional trade sectors... Not really a good thing.

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