Does government give itself an advantage in private enterprise?
An anonymous commenter on an earlier post asks some tough questions:
Considering the red tape in Dubai for entrepreneurs and the almost impossible competitive laws, make it very difficult to establish and grow a sustainable organization. Now, with the launch of Dubai Government's own event management company, where does this leave us, seriously? When almost every profitable sector is dominated by semi-government companies including airlines, telecom, insurance, finance, banking, and now something as peculiar as event management too? Are we to be scared of the future business climate here? How much longer will it be until every industry has a semi-government entity in it, that can grow seamlessly without the hurdles that we go through, such as visas, permits, bank guarantees, etc.Readers, what do you think?
Labels: UAE government
posted by John B. Chilton at 3/03/2008 05:34:00 PM
17 Comments:
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I believe this advantage is "percieved" and short lived. Eventually I do not believe have access to visas and permits actually improves competitiveness.
What improves competitiveness is the people who are hired and the quality they bring to the table. This is where true private sector players can still differentiate themselves.
Example: In the case of master developed real estate the semi-governmental organizations (like Emaar, Nakheel, Dubai Properties and now Tatweer) actually created an entirely new "freehold" market that before did not exist.
Private developers in this case could piggy-back on governmental schemes and have fared rather well I think.
Even if those semi-governemental entities were meant to only kickstart development (or at least provide a 'business playground' for our affirmative action Emiratisation poster boys and -girls), once up and running they'll have to openly measure up to private business practices.
May well be, says one optimist, that this in the long run may raise the general threshold for government performance?
Of course the government gives itself an advantage. Just a few days ago, Dubai Internet City hiked its rent by 24%. The government mandated rent cap is 5%. This rent hike is necessary apparently due to the fact "operating costs have shot up due to economic growth in the region". Ah. There was me thinking it was due to the 70% pay increase for government employees.
THIS GOVERNMENT IS THE SMARTEST GOVERNMENT ON THE PLANET hands DOWN! LOL Y'all just keep running to them!!!!!
THIS GOVERNMENT is the SMARTEST GOVERNMENT on the PLANET hands down....J'ust keep running to them Y'all!!!
The Dubai Government will have the buffet and everyone else will be fighting for scraps. The only thing is can they do it professionally??? Look at the taxi service in Dubai and you will know what I mean.
Dubai is a good place relatively to start a business in the Middle East, but the gov always finds ways to 'tax' entrepreneurs, with assorted fees and charges, and of course, running a business here involves pain in the ass paperwork that's nonexistent in entrepreneur-friendly places such as the UK, Scandinavia, the U.S., and others.
The biggest issue is that the government does not need to play by its own rule. I have to second the other anonymous. I've seen rent jump by 60 fucking percents at renewal last month due to "it's like that". Businesses are presented with two options, taking it up the ass silently or not get their license renewed. (Because that stupid FZ license is tied to the lease of course.)
Talk about an advantage for that property management company that is Tecom, captive market, coercion.
Now if you want some big name who uses VoIP for their international calls without the gov even batting an eyelid please let me know. I am talking thousands of calls per day not the occasional one. I guess having an owner in the Federal National Council helps.
Add to that the rampant corruption in all the government agency (I'm not talking about the clerks) and try to keep in mind that for most project signed with the gov there was a backshish involved at some point.
I could go on for hours like that.
Enjoy
Service companies in areas like media, events management or PR, that are government-initiated, will scoop up an amount of government business, which reduces the size of the overall market.
However, in some ways, it's a cleansing mechanism for other privately-owned service providers. Government clients tend to be late payers/non-payers, tend to have the most unrealistic demands, and operate to crazy timetables. Having government departments as clients often means you have to drop everything to support a last-minute request, which makes you less dependable for other clients, and less competitive.
Sadly, if this continues/flourishes, it shall eventually return to bite them at the rear end.
As someone who was on the inside in the Dubai Govt and now has a small consulting firm, I can say that while it is true that the govt owned companies will be getting "guaranteed" business, a lot of these bigger commercial semi-govt entities outsource their work. This creates an opportunity for smaller firms to "do the work" and make someone else look like a hero. The bigger private firms due to their cost structures are not able to be very competitive - and this is a very competitive place. I see these company formations as a way of encouraging smaller businesses to startup (silver lining). Look at the Sh. MBR Establishment for Entrepreneurs. It is encouraging smaller companies - who then become service providers to larger companies. (IMO) Regards, Sam..
Pretty helpful material, much thanks for this article.
As per my point view, Dubai seems to be a quite a place to start an event management business and it is going to continue the same way as in the present scenario no matter what comes in the way.
Nice event planning for semi government companies in Dubai. Visitors can go through with visa and bank guaranteed permits also.
Enjoy the best services from the leading event management company Dubai. It will disclose a new flare of style and innovation in front of you.
very informative article
Events Management Dubai
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