Pirates, alone, seem to be making a good return on their investment; that is, until they run into the Indian navy.
Pirates, alone, seem to be making a good return on their investment; that is, until they run into the Indian navy.

Why we need more pirates in a deflationary world



At last, a ray of economic cheer amid all the gloom. While sales of cars have stalled, banks are going bust and former High Street chains in Britain are now worth as little as the rubbish they sell, one group is making out like bandits. No, it is not the lawyers, who I am pleased to report are also feeling the pinch. Soon we will be able to say: "My learned friend, could you bring me a side salad and another pitcher of water? Many thanks."

Those that can't get jobs as waiters will be standing at traffic lights, offering to clean the windows of your car for a few coins. Few things could be more satisfying than seeing lawyers on the streets with a squeegee bottle, but we should also celebrate the group of people who are making out like bandits. The only problem is that they are bandits. Pirates, to be precise. We can only marvel the audacity of this small Somali crew, who with a minimal investment and no government bailout are able to turn, say, US$100,000 (Dh367,000) - the cost of buying a couple of speedboats and the odd anti-tank weapon - into $100 million with the takeover of the Sirius Star and its precious cargo of oil.

The warships of the world are stacked against them, but for the most part they are no match for our men in inflatable boats. Only the Indian government is prepared to respond in an appropriate manner by blowing suspected pirate ships out of the water. The public has always had a secret admiration for robbers, bandits and pirates. Robin Hood is still a national hero in England, although there is scant evidence that he distributed much of his gains to the poor, while Butch Cassidy and the Sundance Kid's exploits were immortalised in film.

While we do not suggest that this illegal activity should be copied throughout the world, we do think that there is something to be learnt from their approach that can be applied in the corporate world. They probably won't be studying this at Harvard Business School, which may be why we are in such a mess now. For where are the corporate pirates now? There was a time when they were willing to risk it all for reward, betting their own money and expertise against the market. In the old days, merchants clubbed together to pay for vessels that went out trading and returned - hopefully - laden with cargo.

This is the origin of the phrase "when the ship comes in". These informal groups were turned into merchant banks, which risked their own capital to make money. If the ship went down, the money was lost - and the government did not intervene. In the 1970s and 1980s, Jimmy Goldsmith was the original buccaneer. Aged 47, he left Britain to try his luck in the US, a move he dubbed "Operation New World". With a billion-dollar pot, his initial forays were met with enthusiasm by both politicians and businessmen.

He hung out with Henry Kissinger and businessmen such as Al Dunlap. "Jimmy really loved America," recalled Mr Dunlap years later. "I cannot tell how excited he was and how much charisma he generated in those days." Mr Goldsmith took over Diamond International, a logging company, and its profitable revival made him something of a star. He testified before a Senate investigations committee. His answers were met with admiration and he was invited to become a US citizen and even run for political office.

However, the mood changed when he made a bid for Goodyear Tyre and Rubber. The company was badly run, but knew how to use its contacts in Washington to defend itself. A coalition of union bosses and Ohio politicians pursued Mr Goldsmith. Pensioners were bussed to Capitol Hill to beg that the "pirate" be repulsed. There was an angry Senate hearing in which he was heckled. The deal fell apart and he left a couple of hundred million dollars richer.

"It was clear to me that we were not living in the real world," he said later. "We had now entered the post-Reagan period with the triple alliance of big business, big government and big unions fighting back." The "land of the free" purged the corporate pirates. How it reacts to the economic crisis will determine for the next 20 years whether the US is back in the real world. The barbarians are no longer at the gates, but inside congress, begging for help.

The most audacious thing the head of a US car maker does now is fly in to Washington in his own corporate jet, saying the company is on its last legs and demanding cash. Why don't they dip into their executive pay packets, have a whip round at the golf club and buy Chrysler if they think it is worth saving? The danger is that they, along with many others, now fear something altogether more terrifying. Deflation is the scariest word you can mention to an economist. Whisper it into his or her ear and watch them jump out of their skin.

The Japanese, who know a thing or two about deflation - what happens when instead of prices rising, they keep falling to such an extent that people delay purchases, safe in the knowledge that they will be cheaper the next day. When this happens, economies grind to a halt. Japan already experienced one "lost decade" in the 1990s. It does not want another. The Japanese call deflation "the monster".

Faced with falling house and car prices, who knows how we should react? A friend of mine was on the phone last night from London. "I have the inflatable boat, can you lay your hands on the weapons?" rwright@thenational.ae

COMPANY PROFILE
Name: ARDH Collective
Based: Dubai
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Sector: Sustainability
Total funding: Self funded
Number of employees: 4
COMPANY PROFILE
Name: HyperSpace
 
Started: 2020
 
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Brief scores:

Barcelona 3

Pique 38', Messi 51 (pen), Suarez 82'

Rayo Vallecano 1

De Tomas Gomez 24'

The Sand Castle

Director: Matty Brown

Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea

Rating: 2.5/5

A little about CVRL

Founded in 1985 by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, the Central Veterinary Research Laboratory (CVRL) is a government diagnostic centre that provides testing and research facilities to the UAE and neighbouring countries.

One of its main goals is to provide permanent treatment solutions for veterinary related diseases. 

The taxidermy centre was established 12 years ago and is headed by Dr Ulrich Wernery. 

THE SPECS

Engine: Four-cylinder 2.5-litre

Transmission: Seven-speed auto

Power: 165hp

Torque: 241Nm

Price: Dh99,900 to Dh134,000

On sale: now

COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
The specs: 2017 Ford F-150 Raptor

Price, base / as tested Dh220,000 / Dh320,000

Engine 3.5L V6

Transmission 10-speed automatic

Power 421hp @ 6,000rpm

Torque 678Nm @ 3,750rpm

Fuel economy, combined 14.1L / 100km

Top financial tips for graduates

Araminta Robertson, of the Financially Mint blog, shares her financial advice for university leavers:

1. Build digital or technical skills: After graduation, people can find it extremely hard to find jobs. From programming to digital marketing, your early twenties are for building skills. Future employers will want people with tech skills.

2. Side hustle: At 16, I lived in a village and started teaching online, as well as doing work as a virtual assistant and marketer. There are six skills you can use online: translation; teaching; programming; digital marketing; design and writing. If you master two, you’ll always be able to make money.

3. Networking: Knowing how to make connections is extremely useful. Use LinkedIn to find people who have the job you want, connect and ask to meet for coffee. Ask how they did it and if they know anyone who can help you. I secured quite a few clients this way.

4. Pay yourself first: The minute you receive any income, put about 15 per cent aside into a savings account you won’t touch, to go towards your emergency fund or to start investing. I do 20 per cent. It helped me start saving immediately.

How to protect yourself when air quality drops

Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

Wear a face mask.

Stay indoors when conditions are particularly poor.

If driving, turn your engine off when stationary.

Company%20Profile
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The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now

Opening day UAE Premiership fixtures, Friday, September 22:

  • Dubai Sports City Eagles v Dubai Exiles
  • Dubai Hurricanes v Abu Dhabi Saracens
  • Jebel Ali Dragons v Abu Dhabi Harlequins