Abstracts of note

For years, studies of state formation in early and medieval Europe have argued that the modern, representative state emerged as the result of negotiations between autocratic governments in need of tax revenues and citizens who were only willing to consent to taxation in exchange for greater government accountability. This paper presents evidence that similar dynamics shaped the formation of Somaliland’s democratic government. In particular, it shows that government dependency on local tax revenues -- which resulted from its ineligibility for foreign assistance -- provided those outside the government with the leverage needed to force the development of inclusive, representative and accountable political institutions.

That's Nicholas Eubank.

The UAE has a very large income for its size. The rulers own the country's vast oil wealth and spread enough of it around to the UAE citizens that none of them is indigent. The lesson from Somaliland would suggest there's no threat that the rulers will find themselves compelled to adopt major democratic reforms. So why the crackdown on the few activists who have spoken out?

The UAE's vulnerability is external -- it's a plum ripe for the picking by its neighbor, Iran.

Defending the UAE status quo

An op-ed in the Gulf News titled At what cost democracy? seem to me to identify only one cost.

The demand for elections in a country whose citizens are a minority means opening the door for foreigners to ask, in the future, for political participation. It also means opening the door for Iran, which is occupying part of Emirati soil, to support movements that threaten the stability the UAE has enjoyed for four decades.

This sort of argument is the use of fears to justify the lack of democracy and open debate.

He argues there isn't censorship, but doesn't admit that activists and intellectuals who speak out are rounded up.

Lawyers pledge allegiance to UAE rulers

Not long ago the UAE government shut down the independent jurist association and replaced it with its own body of jurists.

Now comes this news:

"We, the lawyers of Abu Dhabi emirate, call upon all citizens to deny activists' allegations denouncing our government. We ourselves are united in refuting these false claims, and remain fully loyal to His Highness President Shaikh Khalifa bin Zayed Al Nahyan, His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, and all other crown princes and rulers," a statement released by the lawyers said.

"We are fully ready to defend our values and society against false claims, and will follow our government's instruction to preserve unity in the country," the statement added.

The conference was organised in response to a petition drawn up in March by activists in the UAE that called for direct elections and more legislative powers in the UAE.

Speaking to Gulf News on the sidelines of the conference, Dr Shakir Matouq Al Marzouqi, an Abu Dhabi-based lawyer and consultant said anyone who spoke against the current government and the UAE was falsifying real information about life in the country. Petitioning the government for greater democratic freedoms is hardly sedition.

Read the rest in Gulf News.

Nine fold increase in number of Emiratis allowed to vote

The Federal National Council is most representative body in the UAE government. It is a talking shop (it makes recommendations to the rulers), but has no legislative, executive or judicial powers. A limited number of nationals, chosen by the rulers of the seven emirates, are given the franchise to vote. This year the number of voters has been increased 9 fold.

The National:

Dr Anwar Gargash, the Minister of State for FNC Affairs, said yesterday he expected about 70,000 Emiratis to go to the polls in September.That would be a ninefold increase on 2006, when 7,757 Emiratis - 6,595 men and 1,162 women - turned out to vote, and more than five times the legal minimum number of eligible electors, 12,000.

...
However, he said changes were being planned even before the start of the Arab Spring. "Three or four years ago we came up with this step [the new electoral process] and organised for it two years ago. "But also from events happening now it [political participation] became a priority. At the end of the day you speak the same language and share the same culture [with other Arab countries] so you have to keep an open eye around you."

However, he said universal suffrage - rather than appointing electors - may not be right for the UAE. "The histories of other countries are different," he said. "We have a different perspective of the future, what is good for you is not necessarily good for me."
...
In days gone by, society was small and all the people were able to communicate directly with the Ruler. That, he said, was no longer practical. “The Ruler cannot take the opinion of every person, but those who represent you can discuss the laws.”

The UAE has a population of around 5 million, perhaps 20% of whom are nationals.

GCC democracy reforms "urgent"

On the op-ed page of Gulf News, Abdulkhaleq Abdullah writes,

[P]olitical reform is the most urgent challenge facing the six Arab Gulf states but it is unlikely that the Arab Spring will make these states more democratic for two reasons.

First, the tragic events in Bahrain have had a profound negative impact on political reform movement in the region. Second, it is becoming amply clear that forces of status quo in the Gulf states are stronger than forces of change at this moment in history. Hence, although democratisation is badly needed, it should not be expected any time soon in the Gulf.
...
...Bahrain had the best opportunity to implement constitutional monarchy. Instead political reform experienced a huge setback not just in Bahrain but in the rest of the Gulf.

This was a shattering experience and a bad example of political reform. The lesson for the other Gulf states is that hasty democratisation opens up a Pandora's box into the unknown. Instantly, regime survival and political stability became priority number one.

The only way to keep stability is to energise forces of the status quo which is nearly on full alert throughout the Gulf. Continuity, not change, has always been the preferred wisdom in the largely conservative Gulf. Many believe that the old way is still the best way. Although not totally immune to winds of change the Gulf states are pulling the huge resources at their disposal to stop forces of change from picking traction.
...
The fact of the matter is that most of the Gulf states are not at their best when it comes to freedom and democracy. Indeed while they figure high on the Human Development Index the Gulf states rank badly when it comes to freedom and democracy index.

This means eventually the Gulf states have to attend to the issue of political reform.

One wonders if writing an op-ed calling for political reform is the same as petitioning your government for political reform.

Dr Abdulkhaleq Abdullah is professor of Political Science at UAE University.

Read the op-ed in full here.

Op-ed: Trouble-making is not a human right

Khalaf Al Habtoor, chairman of Al Habtoor Group, complains in a Gulf News op-ed about the condemnation the UAE has received for its crackdown on dissidents.

Of course, ‘freedom' means different things to different people. For those who think freedom means they have the right to disturb the peace, offend public morality, insult whomever they like or attempt to stir-up political dissent, the UAE isn't the place for them.
...
Those so-called activists have been infected by the revolutionary zeal in Tunisia, Egypt, Libya, Yemen and elsewhere in the region where people, unable to afford the rising price of bread, schooling for their children or desperate for career opportunities, have struggled against oppression and corruption.

The UAE authorities had every right to stop them in their tracks; they've behaved like sheep without pausing to think that Emiratis aren't victimised by poverty, oppression or corruption — in fact, it's just the opposite. They are nothing more than troublemakers. They have no constituency and they do not represent the majority in any way, shape or form.

Our rulers cannot permit a handful of malcontents to disturb the status quo for their own ends. And I'm sorry but if HRW, Whitbeck or any other individual or organisation doesn't like it, then tough! We must guard against anyone who threatens our way of life.

This is the country we love and anyone who wants to live here must play by its rules or find someplace else; somewhere that permits them to stand on a public soapbox and complain to their heart's content even while they worry where their next meal comes from.

I'm just grateful that the UAE's founder Shaikh Zayed Bin Sultan Al Nahyan and Shaikh Rashid Bin Saeed Al Maktoum, who cared for us like their own children, aren't here to witness the ingratitude displayed by a few spoilt and selfish people today. It's up to all proud Emiratis to maintain their legacy and do everything in their power to keep our beloved land from harm.

It's hard to see how a few dissidents with no constituency could do harm. It's also hard to see how legitimate concerns can be aired if every criticism of government is defined as a criminal act of personal insult.

Jurist group violated Section 16 says UAE government decree

Human Rights Watch

"UAE authorities have staged a hostile takeover of one of the country's leading rights groups," said Joe Stork, deputy Middle East director at Human Rights Watch. "The government is reacting to domestic criticisms by banning websites, detaining peaceful activists, and intensifying its chokehold on civil society."

According to the decree, the Jurist Association violated section 16 of the UAE's 2008 Law on Associations, which prohibits nongovernmental organizations and its members from interfering "in politics or in matters that impair State security and its ruling regime." The associations law tightly controls

nongovernmental organizations permitted to operate in the UAE.

The Jurist Association, established in 1980 to promote the rule of law and raise professional standards in the legal profession, has faced mounting government restrictions in recent years. In 2010, the government prohibited association representatives from attending meetings abroad and cancelled symposiums in the UAE that it considered controversial. Members told Human Rights Watch that officials pressured them to quit the association.

Read it all.

The father of the UAE, Zayed bin Sultan Al Nahyan, died in 2004.

4th UAE activist arrested says Gulf Intellectuals Forum

The UAE government is behaving as if it is insecure. What threat can a few dissidents be? My years of defending the UAE to acquitances, as quite an advanced and free country, and not like the Kingdom of Saudi Arabia are not looking good in hindsight.

AFP:

Another Emirati rights activist has been arrested, bringing to four the number jailed in the oil-rich Gulf state in the past month, a group of Gulf intellectuals said on Saturday.

Abdullah al-Shehhi was arrested on Friday by security forces, said a statement from the Gulf Discussion Forum, which groups intellectuals in the Gulf Arab states.

His family has not heard from him and does not know where he is detained, it added.
Shehhi, a former member of the UAE armed forces who was originally from the northern emirate of Ras al-Khaimah, was one of 133 signatories of a March 9 petition calling for direct elections and a parliament with legislative powers in the UAE, which has not yet seen protests that have swept other Arab states.
...

The group has called recent arrests part of "a 'protests phobia' regimes in the region are suffering from."

"The repression by Bahraini authorities of movements calling for freedom and democracy is an example," said the group, adding that Oman, which has also cracked down on pro-reform protests, is another.

Davidson's strongly worded critique

In Foreign Policy, Christopher Davidson says the UAE is verging on a police state, and that the recent detentions of UAE citizens is only evidence of a core problem. I agree the recent detentions are both unnecessary and reactionary, but I'm withholding endorsement of his larger argument. But the argument deserves a hearing, and I hope UAE citizens are not barred access.

The title and subtitle:

Making of a Police State

Over the last few years, the UAE has become increasingly oppressive. The recent crackdowns show how bad it really is.

The tough language:

Previously a collection of federated, tribe-based, traditional monarchies, led by the well-liked Sheikh Zayed bin Sultan al-Nahyan until his death in 2004, the UAE has since been morphing into a sophisticated police state led by Zayed's two principal sons from their Abu Dhabi power base -- the UAE's oil-rich, wealthiest emirate. Unlike their father, who had to consult with other tribal elders and powerful merchants across the entire country, the new rulers now govern with zero accountability over an increasingly urbanized and Abu Dhabi-dependent population, the movements and communications of which are now carefully monitored and censored.

Where's the evidence for that claim? For me it's unproven.

But the UAE's role in putting down dissent in Bahrain, plus detentions of its own citizens are enough for me to agree with Davidson that

...questions should have already been asked by those world-leading institutions -- many of which are based in democratic states -- that cooperate closely with the current regime, in return for generous wealth transfers and other benefits. Perhaps now their question mark will be a bit bigger. The UAE's rulers draw massive legitimacy from these external links...

Read it all.

Human Rights Watch objects to UAE crackdown

HRW issued two items on its website today about the detention of three UAE democracy advocates.

Foreign Institutions Should Condemn Crackdown
NYU, Louvre, Guggenheim Silent on Arrests of Activists

Excerpt:

International public institutions opening branches on Saadiyat Island should send a clear message to Emirate authorities that they strongly condemn the United Arab Emirate's attack on rights advocates, Human Rights Watch said today.

The Guggenheim, New York University (NYU), and the French Museum Agency (Agence France-Museums, responsible for the Louvre Abu Dhabi) should urge the immediate release of three activists detained since April 8, 2011, in what appears to be a politically motivated campaign of intimidation against political reformers, Human Rights Watch said in a letter to the institutions.

Letter to NYU, the Guggenheim Foundation, and Agence France-Museums Regarding the Arrest of Ahmed Mansoor

Excerpt:

As institutions that have invested a great deal in the United Arab Emirates, in particular a vision to lead the region's development as a free society that appreciates art and education and celebrates artists and academics, the Guggenheim, New York University and French Museum Agency have a responsibility to condemn publicly this outrageous attacks on activists. These institutions need to do so not only because those targeted include an artist and an academic, but because they are leading voices for freedom in their country. We know that your institutions are well placed to condemn such politically motivated arrests; for instance, Richard Armstrong and the Guggenheim Museum recently launched a petition demanding that the Chinese government release Ai WeiWei.

While the three detained activists may not have the renown or standing of Mr. WeiWei, in the context of the UAE, their principled stand for freedom is no less a threat to the UAE government than Mr. WeiWei's to the Chinese. And of course, the role of your institutions in the UAE is far more significant and prominent.

An analysis of the detention of Dr Nasser bin Ghaith

Habiba Hamid has a masterful analysis of the detention of Dr. Nasser bin Ghaith, putting it into the larger context of UAE government and society.

It's too good to excerpt. Read it all here.

More about Hamid at her twitter account.

Revised: When what's not said is as important as what is said

[I may have missed it, but I believe The National's article has been revised to emphasize that there is some dissatisfaction with indirect elections by an electoral college. See insert below.]

The Abu Dhabi owned The National reports:

The UAE announced today it would hold nationwide elections for the Federal National Council on September 24.

The elections, in which a minimum of 12,000 Emiratis will participate as members of the electoral college, will see half the members of the FNC elected by vote.

The election announcement, which came in a statement by the National Election Committee, follows a decision to triple the minimum number of Emiratis allowed to vote and the release of updated election guidelines by the NEC.

This will be the second election ever for the FNC, the country's advisory quasi-parliament.

The other half of FNC members are appointed by the rulers of each emirate.

So the number of with a vote has tripled. Let's do some more math. The UAE reports a population of 8 million. As much as 20% of those may be Emirati citizens. Compared to 12,000? And relative to the dilution due to giving the rulers choice of half the FNC membership? (Not to mention that the rulers also choose the 12,000.)

Omitted from the report is the recent call for direct elections. That's not responsible journalism. But that's not something you can blame the journalist for.

Inserted into my original post. I either missed or it's been been added to The National's report:

Dr al Muazzin, who has called for oversight committees to ensure that all families are represented as voters, said: “Our only concern is that there must be transparency in choosing the names for the electoral colleges.”

A decree last month tripled the minimum size of the electoral colleges in each emirate, which elect members to the FNC. Now at least 12,000 Emiratis will take part in the elections. There is no maximum number of electoral college members.

Nevertheless, several former FNC members have called for all Emiratis to be allowed to vote, and a petition posted online last week and signed by 133 Emiratis called for direct and universal elections for the FNC and full legislative powers to the council. Currently the FNC cannot initiate legislation.

That's all of interest. What I find it especially interesting is call that all families be represented. I suppose he means families as in tribes. Would that be equal representation? or proportional?

Amir Taheri writes:

What we see in the greater Mideast is a political upheaval, not an economic revolt. People are fed up with being treated as subjects of a pharaoh, sultan, emir, sheik or "supreme guide." They want a new relationship with their governments, based on respect for the citizen.

Are citizens in the UAE so comfortable with the paternalistic system that they don't want to rock the boat and risk losing that comfort?

133 UAE activists call for direct elections

UPDATED

It has been 39 years since the adoption of the UAE constitution. The preamble of the constitution state the desire,

to lay the foundation for federal rule in the coming years on a sound basis, corresponding to the realities and the capacities of the Emirates at the present time, enabling the Union, so far as possible, freely to achieve its goals, sustaining the identity of its members providing that this is not inconsistent with those goals and preparing the people of the Union at the same time for a dignified and free constitutional life, and progressing by steps towards a comprehensive, representative, democratic regime in an Islamic and Arab society free from fear and anxiety.

133 UAE activists say its time to complete the transition to a constitutional democracy.

AFP:

A group of Emirati intellectuals and activists on Wednesday petitioned the president of the Gulf state to introduce direct elections and vest the parliament with legislative powers. The petition, posted online, cites "rapid regional and international developments that necessitate improving national participation," in calling for the direct election of all members of the Federal National Council (FNC), which serves only as an advisory body.
...
Petitioners lamented that the process of efforts to widen political participation over 39 years, since the United Arab Emirates federation was formed, "have not followed the constitution." They wrote that the constitution stipulates a "process towards a comprehensive democratic parliamentary system."

The UAE, which groups seven emirates including Abu Dhabi and Dubai, had indirect elections in 2006 for the first time, where members of electoral colleges appointed by the emirates' rulers were entitled to vote half the members of 40-strong council.
The remainder were named by President Sheikh Khalifa bin Zayed Al-Nahayan.

Najla Al Awadhi, a former member of the Federal National Council, one of the first women to join the FNC and its youngest member has a related op-ed in The National:

Through the UAE Constitution, the founding fathers set out a political structure that would ensure a gradual evolution of the FNC into a fully empowered parliamentary body. The key words here are gradual and evolution. These principles were meant to nurture stability as the political process matured. A society requires the proper institutions and mindsets to implement and safeguard a democracy.

... We have seen this progress in the UAE as a result of this centralised, benevolent rule.

The challenge we face today is that the FNC's role is fundamentally the same as the day it was created. Building a legislative body is a process and yes, this process is continuing. Recent news that the size of the electoral pool of eligible voters will be increased for the next session is a major milestone in the FNC's development, and will ensure more Emiratis are able to participate in the building of a civil society.

But more needs to be done. For one, I believe in the need for a joint committee to work between the council and the cabinet, in order to begin the process of joint legislation. This would be an early phase building towards the time when the council fully legislates.

Thanks to @emile_hokayem for leads used in this post.

Updates.

Gulf News:

Over 100 UAE nationals have signed a call for comprehensive reform of the UAE's Federal National Council, including universal suffrage and more legislative power. A petition to President His Highness Shaikh Khalifa Bin Zayed Al Nahyan was circulated Wednesday online calling for more signatures.

The group called for "a comprehensive reform of the parliamentary system of the Federal National Council (FNC), and included demands for free elections by all citizens in the method of universal suffrage. It also demanded reform of the work of the parliament to include legislative and monitoring authorities".

The group includes intellectuals, university professors, former FNC members, former government officials and civil society activists. The petitioners say they are responding to international and regional changes and seek a democratic parliament as stipulated in the UAE constitution of 1971.

WSJ:

More than 100 citizens of the United Arab Emirates have submitted a petition to their rulers demanding an elected parliament with legislative powers, the first sign of a political response in the country to the political changes sweeping across the Middle East.

"This is probably the first political petition in the history of the U.A.E.," said Ibtissam Ketbi, a political scientist who is the first of the petition's 133 signatories.

CNN:

"The group called for a comprehensive reform of the parliamentary system of the Federal National Council (the Parliament), and included demands for free elections by all citizens," Mansoor said in an email. "It also demanded reform of legislation governing the work of the Parliament to include legislative and monitoring authorities and calling for necessary constitutional amendments to ensure that."

Despite widespread political unrest across the Middle East and North Africa, there have been no protests in the U.A.E. Demonstrations aren't technically illegal, but police never grant permits for them.

UAE inching towards more representative government

Members of the Federal National Council are seeking legislative powers for the council.

The National:

The 40-member FNC currently has the authority to debate and amend laws, question ministers and discuss the annual federal budget, but not to initiate legislation. Half of the FNC’s members are appointed by the rulers of the seven emirates, while the other half are chosen by an electoral college of nearly 6,700 Emiratis, who are chosen by the rulers.

Dr Anwar Gargash, the Minister of State for FNC Affairs, highlighted the fact that this FNC was a historic one, being the first to experience elections and to have its term extended to four years.
...
Some FNC members have a broad range of proposals for reform of the council. These include an expansion of the electoral base that elects half the members in order to enfranchise more Emiratis, and having more representatives.

Other proposals include granting the council broader oversight powers in order to hold government bodies accountable and, somewhere down the line, the power to initiate legislation.

Gulf News:

Sultan Saqr Al Suwaidi, a member from Dubai, said the House must have more powers to scrutinise the Government and take part in the decision making process and not just submit recommendations, which may or may not be implemented. "It is high time to move on to a full-fledged legislature and take proper decisions to boost political participation and help the FNC to play its role in supporting social, economic and political development," Al Suwaidi said.

He added political participation is a popular demand and the ceiling [of political life] has to be raised.
...
Political liberalisation in the UAE received a boost with the first elections to the country's legislature in December 2006. The elections, however, presented only a small step in terms of political development as only about 6,600 Emiratis were able to cast their vote.

Going all the way to "full legislative powers and universal suffrage", Dr Abdul Rahim Al Shahin, a Ras Al Khaimah representative told Gulf News he aspires for full legislative powers for the House and universal sufferage for Emiratis to help the House meet expectations heaped upon it. "It is not logical to allow hand-picked group of citizens to vote and deprive others from their rights," he said.

Note that the rulers of Abu Dhabi have ownership in The National, and the rulers of Dubai have ownership in The Gulf News.

There's no mention of popular election of rulers.

Do the citizenry want a more representative government? There is great income inequality in the UAE, but the economic well-being UAE citizens is much better than those in Saudi Arabia, and certainly Egypt. The country's wealth is shared with the citizenry. I'm not sure the attitude isn't leave well enough alone. That's not a recommendation wrapped in a conjecture. I'd like to see the UAE become a democracy.

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?

The puzzle continues

How can a country as rich as the UAE turn away citizens from higher education on the basis of lack of funds? It promises free education to all citizens, but doesn't fund it:

"When the oil was priced at $8 a barrel the government had been offering generous incentives to students, now when the oil almost reached $100 a barrel, students are denied admissions due to shortage of funds. How come this happens in the UAE which is considered one of the richest countries in the world?" asked Ali Majid Al Matroushi, an FNC [Federal National Council] member from Ajman.
...
Shaikh Nahyan Bin Mubarak Al Nahyan, Minister of Higher Education and Scientific Research, admitted that the shortage of funds "forced us to turn down admissions of 5,000 students this year and the number will be even bigger next year, when the Higher Colleges of Technology will be forced to reduce the number of seats from 16,000 to 14,000."

Shaikh Nahyan warned if no action is taken, the situation is going to get worse and the country will suffer a severe shortage of human resources that will adversely affect the economic development. He urged the private and the public sectors and businessmen to join hands to resolve this problem.

There is a parallel issue with the quality of government provided primary and secondary education. It's not up to snuff.

I'm not arguing that education is best funded and provided by government. But I am arguing that promises should be kept. And I am also suggesting that citizens should share in the oil wealth of the country.

Drug bust in free zone: Just how big was it?

Sunday's New York Times has a long article on free zones around the world, and the way they are used to move counterfeit drugs and cleanse their provenance. It's not all about the UAE (Dubai and Sharjah are conflated by the author of the article), but it is used as the example.

Quoting:

Three months ago, when the authorities announced that they had seized a large cache of counterfeit drugs from Euro Gulf’s warehouse deep inside a sprawling free trade zone here [Sharjah], they gave no hint of the raid’s global significance.

But an examination of the case reveals its link to a complex supply chain of fake drugs that ran from China through Hong Kong, the United Arab Emirates, Britain and the Bahamas, ultimately leading to an Internet pharmacy whose American customers believed they were buying medicine from Canada, according to interviews with regulators and drug company investigators in six countries.

The seizure highlights how counterfeit drugs move in a global economy, and why they are so difficult to trace. And it underscores the role played by free trade zones — areas specially designated by a growing number of countries to encourage trade, where tariffs are waived and there is minimal regulatory oversight.

The problem is that counterfeiters use free trade zones to hide — or sanitize — a drug’s provenance, or to make, market or relabel adulterated products, according to anticounterfeiting experts.

The article continues (emphasis added):

Dubai is particularly attractive to counterfeiters because of its strategic location on the Persian Gulf between Asia, Europe and Africa. Records show that nearly a third of all counterfeit drugs confiscated in Europe last year came from the United Arab Emirates. “Three or four years ago, Dubai did not even appear on the radar screen,” said an investigator for a major American drug company who is based in China and requested anonymity because he did not have authority to speak for his employer.

Dubai is vulnerable because of the huge volume of goods that move through its free trade areas, and because of what is perceived by some in the pharmaceutical industry to be a murky line of authority for rooting out counterfeits there. “It is not clear that the normal Dubai customs authorities have jurisdiction,” said Rubie Mages, a director of global security for Pfizer.

The authorities in Dubai do show a willingness to act when drug company investigators tip them to possible counterfeits, as they did in the raid announced earlier this year. “Dubai has taken a big step in fighting the counterfeiters,” said Ahmed Butti Ahmed, director general of Dubai customs. But significant quantities of fake drugs are still getting through, international health officials say.

More:

In July, the authorities in Dubai said fake drugs from Mauritius had been seized at a free zone next to the Dubai airport. There were more than half a million pills of counterfeit Plavix, a blood-thinning drug made by the French company Sanofi-Aventis. The Dubai health authorities say they do not know who made it. Some pills, a government official said at the time, contained cement powder.

There has been punishment and regulatory progress:

In Dubai, seven officials associated with Euro Gulf were convicted recently and sent to prison, customs officials said. “We have been successful in getting customs authorities to work with us to inspect and to seize questionable goods, but we still have a long way to go,” Ms. Mages said.
...
[T]here is no shortage of Chinese companies making fake, subpotent or adulterated drug products.

“Some of them in the morning, they manufacture good drugs and in the afternoon and evening they manufacture counterfeit medicine,” said Dr. Mohammed Abu Elkhair, a health official in Abu Dhabi who helped organize a conference last month in the capital city to educate United Arab Emirates officials on how to combat counterfeit medicine.

Dubai's future clouded in debt?

The Wall Street Journal reports ($)

Dubai is on a spending spree, and financial analysts are starting to wonder about the amount of debt the city-state is racking up.

Its oil production is dwindling, and its debt load is four times the average among other Persian Gulf states. Credit-rating companies are asking for more information to determine how sound the government really is.

"From published documents, it is difficult to get a picture of the complete financial situation," said Standard & Poor's analyst Farouk Soussa. "The transparency isn't good."

One of seven emirates making up the United Arab Emirates, Dubai, like other Middle East governments, has been on a deal-making binge. Companies owned or backed by the government have signed agreements or made plays for billions of dollars in assets this year, including stakes in American and European stock exchanges, a Las Vegas casino operator and, most recently, a chunk of Sony Corp. Part of Dubai's deal-making is financed by debt.

At the same time, other Dubai entities have launched expansion plans relying on public borrowing. Nakheel, a government-controlled company building a giant, palm-tree-shaped island development, placed $750 million in bonds this month to finance its plans. Government-owned Jebel Ali Free Zone recently listed 7.5 billion dirham ($2 billion) of bonds.
...
Dubai also has taken a more-complex approach to investing overseas. Most other deal-making countries have used massive investment authorities to pursue their deals. The Abu Dhabi Investment Authority, for instance, bought a $7.5 billion stake in Citigroup Inc. last month. In contrast, Dubai's ruler, Sheikh Mohammed bin Rashid al-Maktoum, has entrusted a cadre of lieutenants to run his own and his government's business interests. They often compete with one another and hunt for deals independently, but they all ultimately answer to Sheik Mohammed.

The government association has helped a handful of Dubai corporate entities get high credit ratings. The assumption is that Sheikh Mohammed or his government will come to the rescue in a pinch. And if Dubai gets overextended, analysts expect the emirate's much-richer cousins in Abu Dhabi will lend a hand. Abu Dhabi is the capital of the U.A.E., and its ruler is the country's president. Sheikh Mohammed is prime minister.
...
As its oil supplies dwindle, Dubai has diversified its economy into financial services, tourism and real-estate development, among other pursuits. Those revenue streams and their underlying assets are difficult to pin down without access to government books.

Intriguing. Emphasis added. If it is true that Abu Dhabi will step in in the event of insolvency we have the makings of an overinvestment problem like that which fueled the real estate crisis in the US in the eighties.

In a graphic accompanying the article Abu Dhabi's sovereign rating is given as AA/stable/A-1+. Abu Dhabi's debt as a percentage of GDP is 2.9%. Dubai's sovereign is "not available." Its debt as a percentage of GDP is 41.8%.

70% pay raise for UAE federal employees

It was announced the other day that employees of the federal government would receive a 70% pay increase.

There's a problem. Pay increases this large, out of line with private sector wage increases, run entirely contrary to the government's expressed desire to see more Emiratis in the private sector. Very few are, and with good reason. Their time would be better spent hounding someone for a job in government. That's a waste from the social perspective. It's a waste because it's effort that just moves money from one pocket to another and produces nothing. It discourages Emiratis from becoming engaged with the private sector and the virtue of merit-based reward. And not least of all the country develops no institutions of its own to foster economic growth.

In short, the country is suffering the curse of resource abundance.

There are better ways to share the plenty of high oil prices with its citizens. Write them a check; unhitch payment from employment in the government sector. Make them owners of the oil that is currently owned by the government. Make it difficult to reverse course -- as happened in Saudi Arabia where so much of the oil revenue now goes to maintaining a large royal family.

Petrol price increase in the offing?

Unlike some of its other fuel-rich neighbors the UAE has a history allowing the price of petrol at the pump to track more closely the level and movement of the international price of oil. The price of oil has increased considerably. Based on that record, an increase in the retail price is overdue.

Gulf News

The sources said Dubai-based oil retailers - Emirates National Oil Company (Enoc), Emirates Petroleum Products Company (Eppco) and Emarat - which buy gasoline from several sources are more susceptible to spikes in crude prices than the Abu Dhabi-based Adnoc Distribution, which sells fuels sourced entirely from the Abu Dhabi National Oil Company (Adnoc), the main UAE crude oil producer and refiner.

Oil company executives would not confirm or deny whether they have gone with their requests to the government to be allowed to increase the fuel prices.

Though Enoc has a 120,000 barrels per day refinery at Jebel Ali, it does not produce any gasoline as of now, and the bulk of what it sells, it's widely believed, is sourced from Adnoc at prices which are government-determined. Enoc, Eppco and Emarat sell gasoline at prices that range between Dh6.25-Dh6.75 per gallon.
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The oil industry sources claimed Enoc and Eppco are losing up to Dh4.5 a gallon for every gallon of gasoline sold, which includes storage costs.
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An executive at Adnoc Distribution said that there's no indication from the government yet on whether there would at all be any increase in oil product prices in the foreseeable future.

"As the marketing arm of Adnoc, we are there to implement the strategies of the government and will follow exactly what we are told to do. Our main purpose is to serve customers at our service stations and that's precisely what we have been doing," said the executive, requesting anonymity.