Transition Layer
27th Jun 2005, 08:31
Depicting the Arab world as dominated by terrorism is an outdated cliche writes Paul Sheehan.
The price of oil has never been higher, the Middle East has never been more important and volatile, so it's a good time to take a fresh look at this source of so much friction. And a good place to start is with the Wallabies.
When the Australian rugby team plays its Test matches, the most conspicuous word emblazoned across the front of the players' jerseys is the team's principal sponsor. The name changes. It is currently Qantas. They will be the Qantas Wallabies until the World Cup in 2007. Thus two of corporate Australia's prized icons, the Wallabies and the flying kangaroo, happily co-exist as one product.
Yet the road to this comfortable outcome was tortuous. Someone else was willing to pay much more for the right to put a name across those gold jerseys. That someone was Emirates, the airline from the distant boom town of Dubai. Emirates is smaller than Qantas but it has deep pockets. It sponsors the Emirates Melbourne Cup. It sponsored the English Premier League champions, Chelsea, but is now switching to an even bigger franchise, Arsenal, in a sponsorship deal worth $180 million. When Arsenal's new 60,000-seat stadium opens next year, it will bear the name Emirates Stadium.
Emirates does not muck around. It has been growing exponentially for 20 years and plans to continue doing so, much to the consternation of Qantas and most of the world's other major airlines. And it recently announced a record annual profit of $920 million for the 2004-05 financial year.
When it came to the Wallabies, Emirates blew Qantas out of the water. Give or take several technicalities, this was the choice: Emirates offered $5 million a year for three years to 2007. Qantas countered with $3.3 million a year to 2007 - $5 million less than Emirates.
And the Australian Rugby Union chose Qantas. Offered a choice between the most glamorous domestic brand in Australia, and the name of an Arab oil-state run by sheiks, the rugby union played it safe. So it's the Qantas Wallabies, not the Emirates Wallabies.
One can reasonably assume that what hurt Emirates was the undertow of misgivings in opinion about anything coming out of the Gulf, not surprising given the public has been offered tunnel vision for years. When it comes to the Middle East, we remain locked in a malignant cliche, a vision of the region and its peoples as seething and dysfunctional, divided between Islamic fundamentalists and those who fear them. Blood and terror is the dominant news story from the Gulf.
It's a gulf alright. While the United Arab Emirates, Qatar, Oman, Lebanon, Kuwait, Afghanistan and, most spectacularly, Iraq, grapple with fundamental change, the Western narrative fixates on the worst of the worst - West Bank, Gaza, Sunni triangle, mad mullahs, the Taliban, and the psychotics hiding behind the green flag of Islamic jihad.
I've just spent a week in the Gulf, in Dubai and Oman, and it was an eye-popping experience. Oman, probably the best-run state in the Arab world, remains almost completely invisible to Australian eyes. A visitor to Dubai gets a first-hand look at prodigious ambition, fuelled by prodigious capital flows. Much of the money flowing to Dubai would once have been parked or invested in the United States or Europe but now flows into a neo-Manhattan rising improbably out of the Arabian desert.
Dozens of major projects are going up simultaneously, including the tallest building in the world, in an investment boom that has lasted 20 years with no signs of slowdown. Now, for the first time since the money river from oil was created in the Middle East, Arab states are building a sector outside the oil industry that can challenge on the global stage. Which brings us back to Emirates.
The global game is about to get tougher. Emirates, together with two new Gulf carriers modelling themselves on Emirates (Qatar Airways, based in Qatar, and Etihad, based in Abu Dhabi), have between them placed a massive order for the biggest airliner ever designed, the double-decker behemoth known as the Airbus A380. Emirates has ordered 45. By way of contrast, Qantas, which is much bigger than Emirates, has ordered 10. Geoff Dixon, the chief executive of Qantas, simply cannot see how Emirates is going to fill all those giant A380s. He is far from alone.
But Emirates is not just an airline. It is the embodiment of Dubai. It is an extension of the state. It personifies the vaulting ambitions of the hereditary rulers of Dubai, the Maktoum family, headed by Sheik Maktoum bin Rashid Al-Maktoum, Prime Minister of the United Arab Emirates and ruler of Dubai. The Maktoum family holds the controlling interest in Emirates.
The chairman of Emirates is Sheik Ahmed bin Saeed Al-Maktoum, who also happens to be the president of the Department of Civil Aviation. This cosy arrangement is a source of dark humour to Dixon. So is its tax policy. Emirates pays no company tax in Dubai. There is also no personal income tax in Dubai. It has lower labour costs. Dubai has a population of 1.1 million, but less than 20 per cent are Emirates. About 70 per cent of the population are Indian.
As a privately owned, state-sponsored carrier, it represents "sovereign risk", the highest quality debt-rating, which lowers borrowing costs. It also pays only modest dividends, its owners preferring that excess cash be ploughed back into growth. Dubai also has the great benefit of geography, positioned midway between Asia and Europe. It projects itself as a global airline hub.
Dubai is thus building itself a post-oil future, a modern post-industrial economy. It is a good news story, one of many in the Middle East. We've got to stop ignoring them.
The price of oil has never been higher, the Middle East has never been more important and volatile, so it's a good time to take a fresh look at this source of so much friction. And a good place to start is with the Wallabies.
When the Australian rugby team plays its Test matches, the most conspicuous word emblazoned across the front of the players' jerseys is the team's principal sponsor. The name changes. It is currently Qantas. They will be the Qantas Wallabies until the World Cup in 2007. Thus two of corporate Australia's prized icons, the Wallabies and the flying kangaroo, happily co-exist as one product.
Yet the road to this comfortable outcome was tortuous. Someone else was willing to pay much more for the right to put a name across those gold jerseys. That someone was Emirates, the airline from the distant boom town of Dubai. Emirates is smaller than Qantas but it has deep pockets. It sponsors the Emirates Melbourne Cup. It sponsored the English Premier League champions, Chelsea, but is now switching to an even bigger franchise, Arsenal, in a sponsorship deal worth $180 million. When Arsenal's new 60,000-seat stadium opens next year, it will bear the name Emirates Stadium.
Emirates does not muck around. It has been growing exponentially for 20 years and plans to continue doing so, much to the consternation of Qantas and most of the world's other major airlines. And it recently announced a record annual profit of $920 million for the 2004-05 financial year.
When it came to the Wallabies, Emirates blew Qantas out of the water. Give or take several technicalities, this was the choice: Emirates offered $5 million a year for three years to 2007. Qantas countered with $3.3 million a year to 2007 - $5 million less than Emirates.
And the Australian Rugby Union chose Qantas. Offered a choice between the most glamorous domestic brand in Australia, and the name of an Arab oil-state run by sheiks, the rugby union played it safe. So it's the Qantas Wallabies, not the Emirates Wallabies.
One can reasonably assume that what hurt Emirates was the undertow of misgivings in opinion about anything coming out of the Gulf, not surprising given the public has been offered tunnel vision for years. When it comes to the Middle East, we remain locked in a malignant cliche, a vision of the region and its peoples as seething and dysfunctional, divided between Islamic fundamentalists and those who fear them. Blood and terror is the dominant news story from the Gulf.
It's a gulf alright. While the United Arab Emirates, Qatar, Oman, Lebanon, Kuwait, Afghanistan and, most spectacularly, Iraq, grapple with fundamental change, the Western narrative fixates on the worst of the worst - West Bank, Gaza, Sunni triangle, mad mullahs, the Taliban, and the psychotics hiding behind the green flag of Islamic jihad.
I've just spent a week in the Gulf, in Dubai and Oman, and it was an eye-popping experience. Oman, probably the best-run state in the Arab world, remains almost completely invisible to Australian eyes. A visitor to Dubai gets a first-hand look at prodigious ambition, fuelled by prodigious capital flows. Much of the money flowing to Dubai would once have been parked or invested in the United States or Europe but now flows into a neo-Manhattan rising improbably out of the Arabian desert.
Dozens of major projects are going up simultaneously, including the tallest building in the world, in an investment boom that has lasted 20 years with no signs of slowdown. Now, for the first time since the money river from oil was created in the Middle East, Arab states are building a sector outside the oil industry that can challenge on the global stage. Which brings us back to Emirates.
The global game is about to get tougher. Emirates, together with two new Gulf carriers modelling themselves on Emirates (Qatar Airways, based in Qatar, and Etihad, based in Abu Dhabi), have between them placed a massive order for the biggest airliner ever designed, the double-decker behemoth known as the Airbus A380. Emirates has ordered 45. By way of contrast, Qantas, which is much bigger than Emirates, has ordered 10. Geoff Dixon, the chief executive of Qantas, simply cannot see how Emirates is going to fill all those giant A380s. He is far from alone.
But Emirates is not just an airline. It is the embodiment of Dubai. It is an extension of the state. It personifies the vaulting ambitions of the hereditary rulers of Dubai, the Maktoum family, headed by Sheik Maktoum bin Rashid Al-Maktoum, Prime Minister of the United Arab Emirates and ruler of Dubai. The Maktoum family holds the controlling interest in Emirates.
The chairman of Emirates is Sheik Ahmed bin Saeed Al-Maktoum, who also happens to be the president of the Department of Civil Aviation. This cosy arrangement is a source of dark humour to Dixon. So is its tax policy. Emirates pays no company tax in Dubai. There is also no personal income tax in Dubai. It has lower labour costs. Dubai has a population of 1.1 million, but less than 20 per cent are Emirates. About 70 per cent of the population are Indian.
As a privately owned, state-sponsored carrier, it represents "sovereign risk", the highest quality debt-rating, which lowers borrowing costs. It also pays only modest dividends, its owners preferring that excess cash be ploughed back into growth. Dubai also has the great benefit of geography, positioned midway between Asia and Europe. It projects itself as a global airline hub.
Dubai is thus building itself a post-oil future, a modern post-industrial economy. It is a good news story, one of many in the Middle East. We've got to stop ignoring them.