Thorns of a burst bubble cut Gulf optimism

By Paul Cochrane, in Beirut

For business journalists, writing about the Gulf from 2004 to 2008 was often a repetitive process. Regardless of the sector being covered, the opening paragraph would invariably have a growth figure in the double digits, and the projection for the next year would also be very healthy. The global financial crisis in the autumn of 2008 dimmed the region's business fortunes, flipping that opening paragraph to negative double-digit growth or, for some sectors, growth in the low single-digits.

This change was welcomed by many business journalists, if only to spice up their writing, but of course not by the business community. The reasons behind strong growth can be easily explained, but a downturn and a serious contraction in revenues requires a different explanation, and it was time for journalists to start asking hard questions – at least it should have been time to play hardball.

However, just as the crisis was beginning to bite, the government of the United Arab Emirates (UAE) introduced a draft media law in January to update the archaic 1980 law. Media outlets quickly understood the ramifications of the proposed rules, which include article 32, whereby journalists can be fined up to US$1.3 million for “disparaging” government officials, members of the royal family or Islam, and article 33, which fines journalists up to US$136,000 for harming the nation’s image and reporting “misleading” information on the economy.

Given such fines, way beyond the financial means of most journalists and media outlets, how could hacks ask hard questions? And how could journalists report on companies and firms that were in trouble but directly linked to royal families? It is a clear Catch-22 situation: journalists want to do their job, and the public and investors have the right to know about financial shenanigans, but to do so could come with a hefty price tag, and if you can’t cough it up, it’s a stint behind bars in the debtors’ jail.

The whole notion of transparency thus became a mockery, and how deep the impact of the crisis had run became a topic that was barely debated in print or on television, at least not in the UAE and other Gulf Cooperation Council countries with similarly draconian media laws. How ingrained such self-censorship is among Gulf journalists was evident in the headlines and articles in the aftermath of the bomb dropped on the global markets by state-owned Dubai World’s announcement of a six-month standstill in payments of US$59.3 billion in liabilities. The Gulf News gushed: “Government intervention to ensure commercial success,” the Abu Dhabi-owned The National downplayed the impact, stating “A silver lining in Dubai World” and the Khaleej Times espoused optimism: “Restructuring ‘A Sensible Business Decision.'”

Elsewhere, papers headlines were of “castles in the sand,” “Dubai in turmoil,” and “Bombshell decision has severely damaged Dubai’s reputation.” So, for us business journalists, reporting on the Gulf is certainly keeping us on our toes as we cover, or indeed cover up, the Gulf’s (mis)fortunes, and avoid getting fined a lifetime’s salary in the process.

 Picture  credit: Paul Cochrane