Vinayshil Gautam
The UAE’s Crown Prince Mohamed bin Zayed Al Nahyan was on a state visit to India recently. India and the UAE are not new friends on the block. When I was in Kozhikode, I noticed that Dubai occurred more frequently in social conversation than Delhi. I have practiced management development in Dubai and addressed audiences in the various Emirates of UAE. In every case I had the feeling of bonding.
Nobody thought of me as a Hindu and I never felt that the population of UAE was predominantly different because it followed Islam. Even among the Emirates, the variation is large, and social norms between two adjacent Emirates, like Dubai and Sharjah, quite distinct.
The creation of Dubai is evidence that the rise of nationalism in the Gulf Cooperation Council is not necessarily a copy of the rise of nationalism in the larger parts of Asia.
The boundary disputes between India and China; India and Pakistan; not to overlook the disputes in the south-east Asian archipelago and, say, between Myanmar and Thailand, are colonial hangovers.
The UAE is a unique entity in its own right. Illustratively, Dubai has set multiple standards for business and industry. Indeed one intervention in the form of airline – Emirates – has brought the globe to this small Emir-dom. Figures are telling: Emirates moves 50 million people in a year. It is a telling example how seeking independent advice from a specialist can help one set up an enterprise in a fundamentally sound manner.
In the case of Emirates, the role of Sir Maurice Flanagan, one of the founding figures of the airline, is crucial. Emirates is not an eternally subsidised Company. Sir Maurice once commented on the Emirates incurring unusual social costs of around $600 million each year: “They say we don’t pay taxes. Of course, we pay taxes. Dubai is a city, not a country. We pay municipal taxes, we incur social costs (others) don’t have to think about. Full family medical service, free furnished accommodation for pilots and cabin crew and managers… every year we have paid more than $100
million in dividend to the owner of the company.”
In 1985, the Vice President of the UAE and Emir of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, gave Sir Maurice US$10 million and told him not to come back for subsidy or protection of any kind. This is a tell tale message to Air India and anyone else who is listening.
The Government of India, irrespective of party affiliations, has been grappling for decades with the cost of subsidies with no noted success. Fertilisers are lying without off take in factories and farm subsidies are being continuously debated with much heat and little light.
The message: The visit of the UAE Crown Prince is symbolic of a whiff of fresh air. It is symbolic of an alternate model of corporate governance.
Like the business success of the UAE, the success of Israel in maintaining its security beyond any reasonable doubt is humongous. Israelis even revived a ‘dead’ language – Hebrew – and made it their national language. These are tales which need to be told and retold, not just in C suits but in media which runs public campaign on corruption and those who seek control of the ACB.
Even the role of a central bank needs revamp. There is a fundamental shift which the powers that be in the Reserve Bank of India need to register. ‘Neutral’ interest rates, which neither boost nor constraint growth, need to be seriously considered. In various parts of the world, because of their own conditions, various economies run on a differing logic.
In some cases, rates have declined and subsequently are likely to be lower in the future than in the past. This is because of a growing abundance of savings relative to investment. It is clear that the real interest rates that is adjusted for inflation will be lower than what they have been historically replicated in the pronouncements of many reserve bank heads including Janet Yellen.
Fiscal policy, like any other, has to be context specific. The visit of the UAE Crown Prince should be a reminder of alternate models elsewhere. It was a graciously useful visit.
