Foreign investments from the Arab world and other emerging economies are making the headlines nowadays. The most recent is the acquisition of a 90 per cent stake of the Chrysler building in New York by the Abu Dhabi Investment Council (Adic) for US$800 million (Dh2.93 billion).
There should be nothing worrying about this. New York City, the global melting pot, stands as a symbol of liberal capitalism, progress and openness. There is no deal that cannot be pursued in this city, which takes pride in its position as the world's key location when it comes to turning ideas into money.
But this time it is different. Aggravated by the effect that a slowing US economy and declining incomes have on the mood of Americans, the public reaction to Adic's investment has been cool. Commentators have warned that New York is selling out to foreign investors. One particular story run by the Washington Post Express inadvertently referred to an "Abu Ghraib investment firm" as being behind the investment; obviously an error, but nevertheless it demonstrates the thinking behind the story.
There are two preliminary conclusions to be drawn from this episode. The first is that Arab investors face growing political obstacles when they go abroad. The heated debate about the future role of sovereign wealth funds (SWFs) from the Arab world and other emerging economies is a further indication of the changing mood. The second is that Arab investors need to better assess and manage the public opposition and political risks that they face, now and in the future.
This can be done, as has been impressively demonstrated by Samih Sawiris, the Egyptian entrepreneur who is the chairman of Orascom Hotels and Development. In December 2005 Mr Sawiris announced his intention to build a huge resort in Andermatt, Switzerland, for an investment of well above $1bn. What is astonishing about it is that, more than two years later, construction appears ready to go ahead, despite all the political objections and pitfalls that a project like this is bound to face.
Andermatt is a small town located in one of the most conservative Swiss regions, the canton of Uri, one of the founding cantons of the Swiss Confederation and home to the Swiss national hero, Wilhelm Tell. Andermatt is the embodiment of what Switzerland represents for the outside world; it stands for the rural and conservative Alpine country.
According to Mr Sawiris's plans, a massive hotel resort, including all amenities that a world-class holiday destination features today, will be built. The investment will fundamentally alter the face of the village of Andermatt, the valley in which it is located, the canton of Uri, and indeed will have an impact on the Swiss economy. One would assume that a project like this would face even stiffer resistance than a similar project in New York, and end in tears for the foreign investor.
But only two-and-a-half years later, the project is about to get under way. And not only that, it has the full support of the community of Andermatt. In March, during a town hall meeting, 96 per cent of the citizens of Andermatt voted in favour of the resort. This is counter-intuitive. Why are the people from rural and conservative Andermatt more receptive to foreign investors than cosmopolitan New Yorkers?
Andermatt's residents were at first bemused by the scale of Mr Sawiris's project, which will easily double the size of their village. Many wondered whether the ambitious project, which included a high-altitude golf course, was really suited to Andermatt's traditions and climate. Local farmers dug in their heels when it became clear that the golf course was going to swallow up more land than had originally been expected, and that they were therefore faced with losing some of their fields.
Aware that these objections posed a serious risk to the project, Mr Sawiris went into high gear, applying a sophisticated form of business diplomacy. This included developing an understanding of local culture and a sense of the economic and political interests of the different stakeholders. It also required the stamina to patiently pursue protracted negotiations with the local community to secure his investment.
In numerous town hall meetings with the citizens of Andermatt, in conversations with farmers, NGOs and other local authorities, he made concessions where they helped to overcome objections, but stood firm against demands that would fundamentally alter the character of his project. By following this path, Mr Sawiris was able to negotiate a deal that satisfied him and the community of Andermatt.
It is a far stretch from Andermatt to New York. But the events in these two places indicate that business diplomacy might make a crucial difference when investing abroad. The acquisition of the Chrysler building went ahead, regardless of the reservations of New Yorkers. But the episode of Mr Sawiris's Andermatt investment and the overall political climate seems to indicate that sophisticated business diplomacy is bound to become an essential element of the Arab investor's recipe for success.
Sven Behrendt is a visiting scholar at the Carnegie Middle East Center in Beirut.
MATCH INFO
League Cup, last 16
Manchester City v Southampton, Tuesday, 11.45pm (UAE)
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The specs
Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now
Racecard
6pm: The Pointe - Conditions (TB) Dh82,500 (Turf) 1,400m
6.35pm: Palm West Beach - Maiden (TB) Dh82,500 (T) 1,800m
7.10pm: The View at the Palm - Handicap (TB) Dh85,000 (Dirt) 1,400m
7.45pm: Nakeel Graduate Stakes - Conditions (TB) Dh100,000 (T) 1,600m
8.20pm: Club Vista Mare - Handicap (TB) Dh95,000 (D) 1,900m
8.55pm: The Palm Fountain - Handicap (TB) Dh95,000 (D) 1,200m
9.30pm: The Palm Tower - Handicap (TB) Dh87,500 (T) 1,600m
Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
COMPANY%20PROFILE
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The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
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From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
COMPANY PROFILE
Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed
Series info
Test series schedule 1st Test, Abu Dhabi: Sri Lanka won by 21 runs; 2nd Test, Dubai: Play starts at 2pm, Friday-Tuesday
ODI series schedule 1st ODI, Dubai: October 13; 2nd ODI, Abu Dhabi: October 16; 3rd ODI, Abu Dhabi: October 18; 4th ODI, Sharjah: October 20; 5th ODI, Sharjah: October 23
T20 series schedule 1st T20, Abu Dhabi: October 26; 2nd T20, Abu Dhabi: October 27; 3rd T20, Lahore: October 29
Tickets Available at www.q-tickets.com
Stat Fourteen Fourteen of the past 15 Test matches in the UAE have been decided on the final day. Both of the previous two Tests at Dubai International Stadium have been settled in the last session. Pakistan won with less than an hour to go against West Indies last year. Against England in 2015, there were just three balls left.
Key battle - Azhar Ali v Rangana Herath Herath may not quite be as flash as Muttiah Muralitharan, his former spin-twin who ended his career by taking his 800th wicket with his final delivery in Tests. He still has a decent sense of an ending, though. He won the Abu Dhabi match for his side with 11 wickets, the last of which was his 400th in Tests. It was not the first time he has owned Pakistan, either. A quarter of all his Test victims have been Pakistani. If Pakistan are going to avoid a first ever series defeat in the UAE, Azhar, their senior batsman, needs to stand up and show the way to blunt Herath.
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
Sri Lanka-India Test series schedule
- 1st Test India won by 304 runs at Galle
- 2nd Test India won by innings and 53 runs at Colombo
- 3rd Test August 12-16 at Pallekele
UAE currency: the story behind the money in your pockets
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MATCH INFO
Sheffield United 0 Wolves 2 (Jimenez 3', Saiss 6)
Man of the Match Romain Saiss (Wolves)
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Veil (Object Lessons)
Rafia Zakaria
Bloomsbury Academic
The specs
Engine: 77.4kW all-wheel-drive dual motor
Power: 320bhp
Torque: 605Nm
Transmission: Single-speed automatic
Price: From Dh219,000
On sale: Now
Omar Yabroudi's factfile
Born: October 20, 1989, Sharjah
Education: Bachelor of Science and Football, Liverpool John Moores University
2010: Accrington Stanley FC, internship
2010-2012: Crystal Palace, performance analyst with U-18 academy
2012-2015: Barnet FC, first-team performance analyst/head of recruitment
2015-2017: Nottingham Forest, head of recruitment
2018-present: Crystal Palace, player recruitment manager
Drishyam 2
Directed by: Jeethu Joseph
Starring: Mohanlal, Meena, Ansiba, Murali Gopy
Rating: 4 stars
Alita: Battle Angel
Director: Robert Rodriguez
Stars: Rosa Salazar, Christoph Waltz, Keean Johnson
Four stars
Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
The specs
Engine: 3.9-litre twin-turbo V8
Power: 620hp from 5,750-7,500rpm
Torque: 760Nm from 3,000-5,750rpm
Transmission: Eight-speed dual-clutch auto
On sale: Now
Price: From Dh1.05 million ($286,000)
The Year Earth Changed
Directed by:Tom Beard
Narrated by: Sir David Attenborough
Stars: 4
Why the Tourist Club?
Originally, The Club (which many people chose to call the “British Club”) was the only place where one could use the beach with changing rooms and a shower, and get refreshments.
In the early 1970s, the Government of Abu Dhabi wanted to give more people a place to get together on the beach, with some facilities for children. The place chosen was where the annual boat race was held, which Sheikh Zayed always attended and which brought crowds of locals and expatriates to the stretch of beach to the left of Le Méridien and the Marina.
It started with a round two-storey building, erected in about two weeks by Orient Contracting for Sheikh Zayed to use at one these races. Soon many facilities were planned and built, and members were invited to join.
Why it was called “Nadi Al Siyahi” is beyond me. But it is likely that one wanted to convey the idea that this was open to all comers. Because there was no danger of encountering alcohol on the premises, unlike at The Club, it was a place in particular for the many Arab expatriate civil servants to join. Initially the fees were very low and membership was offered free to many people, too.
Eventually there was a skating rink, bowling and many other amusements.
Frauke Heard-Bey is a historian and has lived in Abu Dhabi since 1968.