For the country’s prosperity, better bankruptcy laws

In England the first laws on bankruptcy were passed in 1542 in the time of King Henry VIII. But even then the concept was not unknown or unheard of in our region. The second chapter of the Quran includes the provision that an insolvent person should be allowed time to settle his debts. 

And in fact, ever since trade was established, it has been common for traders and merchants who have run out of money to flee to foreign countries where their debts could not reach them. In the UAE, we have recently witnessed many instances of a foreign partner or trader running from his creditors to an unknown land without notice, burdening his local partner or sponsor with the liabilities and criminal penalties.

Even in extreme cases there exists significant reluctance to declare bankruptcy though there are 255 distinct provisions in the UAE Federal Commercial Transactions Law No 18 of 1993 that allow individuals and businesses to do so. In addition to these federal laws, DIFC, the region’s largest free trade zone, has its own insolvency laws that are clear, well-drafted and based mainly on the English legal system.

There are many reasons why people avoid declaring bankruptcy but many times it results from a lack of understanding of the legal process or the legal consequences of doing so. But there is also a cultural stigma attached to it. No matter where you are in the world, declaring bankruptcy is not an easy choice. It is unfortunate that many indebted individuals and businesses are not aware what a positive decision it can be and how it can lighten their financial burden.

Most of the Gulf states including the UAE have not yet experienced insolvencies of the kind witnessed in other developed financial centres of the world such as those that have occurred in London and New York. Because of the underdeveloped legal infrastructure, delay in its proceedings and a lack of confidence in the judiciary, the regime remains largely untested. Corporations that have problems with their solvency are encouraged to restructure rather than consider bankruptcy.

Today the UAE requires a distinct insolvency law. The law should provide for the development of a clear plan that allows a debtor, who is unable to pay his creditors, to resolve his debts through the division of his assets among his creditors. This division should be supervised and allow the interests of each creditor to be treated with some measure of equality. Certain insolvency proceedings could allow a debtor to stay in business and use revenues to resolve the debts they owe. An additional purpose of bankruptcy law should be to allow debtors to free themselves of many of the financial obligations they have accumulated after their assets are distributed, even if their debts have not been paid in full.

We need a law that treats people, companies, establishments and partnerships who go bust in a respectable way. This would allow them to take action when they realise that they don’t have enough cash to treat their creditors fairly and honestly. Still, such a law should penalise severely those company directors or partners who behave wrongly, recklessly or dishonestly in their pursuit of bankruptcy and they should be disqualified from conducting business for a limited period of time.

Developing such a law can only be a positive choice. Bankruptcy should be an option for businesses who are seriously out of cash. It is their choice whether they want to use this formal option or not but it is important that this respectable option exists and that it is supported by the system. 

I am of the strong view that this regime must cultivate a “rescue culture” to promote the policy that people and companies should be allowed a chance to reconfigure if their business still has value and can be rescued and reconstructed. As this nation strives to be part of a globalised society and one of the key financial centres in the world, we must commit to modernise our legal system by introducing laws that will improve the business environment. Most importantly, we must invest in our judiciary and legal machinery so it boosts the confidence of investors in our market.

As published in The National,  http://www.thenational.ae/apps/pbcs.dll/article?AID=/20090826/OPINION/708259924/1080

Jobs for Emiratis: why the state can’t do it all

Nations moving from good to great require not only excellent infrastructure, high GDP and a healthy employment environment, but also – and most important – a skilled national workforce. The mix is delicate and the challenge for the UAE is great. Legislative support, strong private-sector involvement and citizens who demand relevance from their education system are all vital.

The diversity of people, languages, cultures and beliefs in this country is both an opportunity and a challenge. 
Diversity brings fresh ideas and new perspectives, but it must also be managed tactfully and sensitively. One of the strengths of the UAE workforce is its mixture of people from different backgrounds and ethnicity who live and work together, and who ought to learn from each other and add value to each other.

The UAE has managed to attract the world’s biggest blue-chip companies and institutions. Some have their headquarters here. But look inside their offices and you will hardly find a single UAE national employee. I wonder why? 

A company is truly global when it has a diverse group of employees, but there are different ways to measure that. An organisation is often defined by the size and number of offices it has across different continents, but I believe that to be truly global it must integrate within its workforce people from each country in which it has a presence.

Emiratisation has been at the top of the agenda for some time and we must appreciate the financial resources and the immense time and effort the Government has invested in developing the national workforce: from building national colleges and universities to creating national vocational qualifications and occupational standards of competence, scholarships for UAE nationals to study abroad and numerous leadership and development initiatives – the list is endless.

So the question that arises is, what role do multinational companies in the private sector play, or intend to play, in building, developing and integrating the national workforce?

I do not want by any means to underestimate the scope of this challenge, and I know of many multinationals who have been working hard with the public sector to realise the Government’s vision. But this is more than a vision – it is something our economy needs. 

Hiring Emirati nationals has both benefits and drawbacks. One benefit is that they know the language and culture, and often have connections to local institutions or Government agencies that can be helpful to employers – and most important, they know how things are done in the local way. This in itself is a cutting advantage when doing business.

On the other hand, I recognise that some nationals may be unfamiliar with western business practices and are unable to communicate well in English, and therefore require further education and training. Moreover, a severe shortage of skilled labour often makes local recruiting difficult. 

One way to resolve this challenge is for foreign companies to recruit nationals directly from local colleges and universities. While these institutions are a good source of entry-level staff, they may not fulfil companies’ needs for professionals experienced in management, finance, marketing and human resources. This is where a company’s commitment is put to the test: the seriousness of its investment in training nationals, developing them from a junior level and qualifying them to apply for senior managerial positions.

The challenge is complicated by the fact that Emirati nationals are relatively few in number: they constitute only 17.74 per cent of the workforce. According to the latest statistics, published at the end of last year, the Emirati workforce numbered about 250,000, and more than 38 per cent of the UAE national population is under the age of 15. In addition, most of the national workforce is concentrated in the public sector: 44 per cent of its employees are Emirati, according to figures released this week. 

Foreign companies seeking to recruit qualified local employees must customarily offer better salary and benefits packages than those provided by local employers or the public sector. They must also offer other incentives, including opportunities for advancement and career development. Foreign employers must also overcome other disadvantages that local managers might perceive in working for non-UAE companies. These may include an absence of the type of personal relationships with peers and superiors that they would find in a local company, a foreign company’s weak reputation or image in the local economy, or even a company’s uncertain business prospects. In addition, a foreign company must convince its employees that it is in the UAE for the long haul, and is therefore willing to invest time and money in training its national employees.

With the impact of globalisation, the issues faced by countries in developing a national workforce are not new, but it is interesting to see how each country chooses to address the challenge of maximising the talent that it has at its disposal. It is now time for the private sector to commit firmly to this cause. It would be a rewarding investment. Multinationals must work hand in hand to build and serve in the development of the UAE’s most invaluable and irreplaceable asset – its national human capital.

As published in The National on 20 May 2009. 

Kindly follow the link: http://www.thenational.ae/article/20090521/OPINION/905219997

The Crisis Facing Graduates, how we can help

As the financial tsunami passes from one coast to another, anxiety continues to grow in every economic sector around the globe. The storm is cold,bitter and ruthless, and leaves us all restless. In recent months we have all seen how governments, banks and corporations scramble to cope with plunging share prices, international financial turmoil and a serious downturn in every national economy. Among the more defenceless victims, sadly, are new college and university graduates.

Young people who completed their final examinations in anticipation of marching into the world of work are slowly learning the bitter facts of the downturn, and trying to accept that the years ahead of them may be more challenging than they had thought. Many are waiting with folded hands for a single interview invitation or an initial job offer.

The situation is equally distressing for parents who have tirelessly invested their time and money in their children’s education, waiting for the day that they take responsibility for reducing some of their parents’ burdens. It may be even more difficult for some graduates who have dependants relying on them to generate income for the family.

New graduates have to cope with three issues: first, the economic slowdown means there are fewer jobs available; second, widespread redundancies mean there are more experienced people than there might have been in previous years trying to secure the same jobs; third, there are many graduates from previous years who are still jobless. In due course the problem will escalate, and there will be an oversupply of graduates and a shortage of high-end jobs, which will cause chronic difficulties: and the layoffs and business closures of recent months have made the situation worse.

My heart goes out to these young people. It is painful when you discover that you either have to downsize your dreams and accept whatever job is offered to you to earn money and gain experience, or extend your postgraduate “holiday” in the hope that the next job offer is better and meets your expectations. But with the right frame of mind, persistence and the right support, anything can be achieved – so please do not despair: look at the circumstances rationally and make the most of your opportunities.

In recent months, it seems to me, as the world has been preoccupied with how to deal with the global financial crisis, it has forgotten how important our young people are to the future. How can we afford to waste their ambition, their talent and their hard-earned degrees? We ought to use them before their time and talent are wasted. They are our hope for tomorrow, and they need support and guidance in the current gloom – from parents, schools and universities, and public and private sectors.

Recently I met a group of new graduates, all of whom looked lost and disappointed, and we explored some ideas on how they might pursue their careers in the economic downturn. Here’s what I told them.

First, you may need to lower your job expectations. You must face the reality boldly, and it is advisable to obtain any sort of employment first, rather than wait for that dream job. Graduates may also need to prepare themselves to work from the bottom, and accept a salary rather lower than they had anticipated.

Second, you need to attend career fairs and to apply to as many companies as possible, which will increase the probability of interviews and potential employment.

Third, graduates should make the most of each interview to show yourselves in the best possible light. And when you experience failure you should not be disappointed: tell yourself that failure is inevitable in life, and you should adjust your mood and feel privileged because you gained an experience. Fourth, approach your university career centre. It should provide a series of guidance courses to help graduates to become aware of the employment situation, build confidence and establish positive attitudes.

Lastly my message to young people is: determination is a prerequisite for success. Welcome everything that comes your way, good or bad, you will be thankful for it all, and I promise you will gain experience from it all. Adopt an attitude of perseverance.

We must all work together to ensure that the correct measures are taken for graduates to pursue and secure a career. For our tomorrow to be promising, we must take care today of the building blocks of our economy – our young people.

As published in The National on 1 March 2009

It was a time of sadness – but one of hope, too

I personally felt as if I were living at the speed of a Concorde; I am not sure that 2008 gave the world a chance to breathe, or even to sigh: it has been a year of such dramatic incidents. If asked, how would you sum up 2008? I have attempted to summarise it in a few words – but have successfully failed the attempt.

Newspapers and television channels around the world have attempted to keep their audiences amused around the clock for the last 12 months. On a quick reflection of this year, the historic opening and closing ceremonies of the Olympic games in Beijing, with their superb displays of Chinese talent and the lavish fireworks spectacle will always remain memorable.

The last many weeks, however have kept everyone on their toes and destroyed the usual consumer mood to shop for the year end celebrations. First there was the massacre in Mumbai, and then the horrifying Israeli bombardment of Gaza, with hundreds killed and thousands injured. And all this while, around the globe, hundreds of thousands of people have been made redundant.

Yes, 2008 has brought tears in abundance, but we must not forget there was also laughter as well as anger, and there was also hope.

Speaking of hope, the US elections could not have been more interesting; especially the Democratic choice between a white woman and a black American, and the world awaited the final result with patience and curiosity for America’s choice. Barack Obama’s victory over John McCain stirred a lot of emotions of hope and regenerated faith in humanity again.

The world witnessed something that many people would not have even dared to dream. It is only four decades ago that black Americans struggled to obtain their basic rights, such as a decent education. It is encouraging to realise that 40 years after the assassination of Martin Luther King, his dream has been fulfilled.I don’t think anyone would dare to envy Obama in 2009 as he has more than a challenging year ahead of him. Not only will he have to fulfil the bold promises he made to his people, but he will also have to clean and clear the pollution created by the former administration while leading his nation through the worst economic downturn since the great depression. Most importantly, he will also have to restore the world’s faith in America. Obama is under test, and the world will be watching him very closely; many will be waiting for a single mistake so as to discredit him.

In 2008, we also had to say goodbye with regret to many people who had made a real difference to the world: Hua Guofeng, who as Chairman of the Chinese Communist Party developed the economy and the education system, restoring calm in the most challenging times after Mao’s death; Paul Newman who lived a charmed life; Suharto, who did good and bad to the Indonesian economy; Maharishi Mahesh Yogi, the Indian guru; and Yves Saint Laurent, the French fashion designer who introduced trousers for women and redefined fashion forever.

In mid 2008, the world was hit by a financial tsunami. As I write it is affecting both multibillion dollar industries and individuals. What is scary about this crisis is that its parameter is undefined, its depth is unknown and its course unpredictable. It is only a few months since Lehman Brothers filed for Chapter 11. I still can’t digest the fact that such an institution could collapse so spectacularly. Hundreds of questions have been raised, but as yet there are very few answers.

More recently, I was alarmed by the revelations that the entire $50 billion business of the Wall Street “wizard”, Bernard Madoff, was a criminal scam. There is obviously a huge flaw in the system if he could get away with it for so long. What concerns me more is that so far only Madoff has been discovered. How many more are there as yet undiscovered?As 2008 comes to an end, with Gaza again in ruins, it is also very sad to experience the tensions between India and Pakistan. I often wish that Muhammad Ali Jinnah had listened to Mahatma Gandhi and not insisted on the partition of the subcontinent. I view India and Pakistan as one soul in two different bodies.

None of us may have a quick solution for many of the problems ahead of us, but today is a time to reflect on our actions and question why the world is where it is. It is time for us all to stand in unity and work collectively to resolve the problems ahead. We should appreciate that we live in a global village and are part of each other, therefore any kind of negative or positive impact in a country at one end of the globe will have an impact on other countries. The large scale of the planet’s problems, whether from global warming or financial crisis, can’t be resolved by individual persons or nations. It is time for us to share knowledge and expertise globally, and aim to live in harmony and peace. The world – and humankind – are under test. I wonder how we will act and react in 2009?

As published in The National on 1 Jan 2009. http://www.thenational.ae/article/20090101/OPINION/973437092&SearchID=73341864715490

Our leaders had a vision: today it is our reality

As the UAE celebrates its 37th National Day, let us sit back and reflect on the last 37 years, appreciate our today and eagerly await our promising tomorrow. What is so special about our country? The UAE means opportunities, it means business. It is a place for forward thinking opportunists, and a place where you can dare to make your dream a reality. I say this with humility and a pinch of pride but definitely without any bias. I personally have not witnessed, and neither have I read in history books, of a nation that has achieved so much in just 37 years – a nation with world class infrastructure and a literacy rate above 90 per cent today.

It is impossible to list here the endless achievements of the UAE, its leaders and its people. What this country has accomplished since 1971 is more than impressive, it has much to teach the world – about growth, being an innovative model for the region and the world at large, and about how to construct a vibrant multiracial, multiethnic, multicultural society.Everyone wonders how a small country with a population of 6 million people can achieve so much. The credit for its success of course goes to the founding fathers: Sheikh Zayed bin Sultan Al Nahyan of Abu Dhabi, the first president, and Sheikh Rashid bin Saeed Al Maktoum of Dubai, the first vice-president, and all the other leaders of the UAE who united to create a nation built on vision and trust.

One cannot thank or appreciate enough, either, the admirable leadership under the current regime of Sheikh Khalifa Bin Zayed Al Nahyan, the President of the UAE and ruler of Abu Dhabi, and Sheikh Mohammed Bin Rashid Al Maktoum, the Vice President and Prime Minister and ruler of Dubai. They have wisely and strategically brought us to the centre stage of the world, enabling the country to stand tall in the eyes of the international community.

The UAE’s success story is now relatively well known, despite the regular knocks it receives from some elements of the Western media. But because many of these knocks have been globally transmitted, there are those in the world beyond the Gulf who do not understand that behind the success lies an even more interesting story of innovative social and economic solutions. These solutions may be worth studying for those striving to bridge the growing divides of an increasingly troubled planet.

Societies should be judged ultimately on their ability to deliver to their people most of their human needs: food, shelter, health, education, security, a clean environment, a sense of community, and a sense of purpose in life. It is on these dimensions that the UAE could act as a role model for a crowded planet. What’s more, it does not provide these excellent facilities to its citizens only, but it also extends its generosity to the large expatriate community in the country.
UAE society emphasises the importance of the family. Government policies are skewed in favour of encouraging extended families to live comfortably. These policies also encourage families to care for their own elderly. The traditional Arab Islamic emphasis on clan and kinship still provides a valuable social glue, even as society modernises and develops.An equally strong emphasis is placed on multi-racial and multi-cultural harmony. The UAE welcomes everyone warmly and is host to about 185 nationalities – almost as many as can be found in the United Nations – who live together in harmony. We have media houses which publish newspapers in five different languages to cater for the needs of different communities. We also have German, Indian, Japanese, French, British, American and Filipino schools with their own academic syllabuses to cater for the educational needs of their communities. These are just a few examples of what the world can learn from how the UAE creates a bridge between Arab society and elsewhere.

I have many friends who have moved to the UAE, and they usually sum up their reasons for doing so by saying: “This is great, we love it here. It’s a place where East is fused with West – you have best of both worlds here.”The UAE is generous and has given us all a platform on which to flourish and grow. As UAE nationals we should continue to build on the dreams of our leaders: for our leaders rely on the nation’s youth and its talent. They have invested in us and provided us with facilities that no other country offers so generously, and therefore we have a duty to make the most of what they have offered us and continue to build this great nation.

As Sheikh Mohammed Bin Rashid Al Maktoum once said: “We believe that our youth are the backbone of the nation and the foundation on which to develop this noble civilisation, unaffected by the wind of change, no matter how hard it blows.” The greatest tool that our youth has been given is education. The UAE is putting all its efforts into creating a knowledge-based economy, so I would urge all my brothers and sisters – who are our promise of tomorrow – to study and to learn. It will be your education that will set you apart from your friends, not your wealth or social status.

And in realising your aspirations and your dreams, remember the wise words of our belated father, Sheikh Zayed Bin Sultan Al Nahyan: “He who does not know his past cannot make the best of his present and future, for it is from the past that we learn.”

As published on 2 December 2008 in The National.
http://www.thenational.ae/article/20081202/OPINION/584035837&SearchID=73341864715490