Dubai gets sucked into Saudi corruption turmoil-"let the wonkery begin ladies and gentlemen"
"Some of the biggest names in Dubai real estate saw their shares slump this week as regional markets were hit by fallout from the Saudi anti-corruption purge at the weekend."
Over 40 notable townspeople were accused for corruption on Saturday. These accusations come at a time of terror for the country. Their stock market has been experiencing a rapid/consistent decrease since even before the "anti-purge" events. The uncertainty is not helping obviously, as people are reluctant to invest. The ongoing corruption has costed the country/region over billions of dollars and there is no signs of that number shrinking. What should they do to combat their corruption and recover from these unstable times? How can they increase consumer confidence?
-NB
http://money.cnn.com/2017/11/09/news/economy/dubai-shares-saudi/index.html?iid=SF_LN
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ReplyDeleteThe corruption will hurt their consumer confidence. A deep investigation could maybe bring out anymore corruption and clean the slate. Inevitably, its tough to come back from corruption, as really nothing good comes from it. Firing people, and trying to make people optimistic enough to invest again. Increasing consumer confidence can only come from showing people that the corruption is over.
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This makes me wonder where the corruption is really coming from- is it the people or the leaders? The Saudi prince could feel threatened by the wealthy, business people. I think institutionally there needs to be a re haul so the people and the government can work together without fear. People are afraid, as you mentioned, to invest in this area due to the every changing political environment. Highly doubt that anything will happen, but maybe if things get low enough there will have to be drastic action taken.
ReplyDeleteThe recent events with Saudi Arabia and their "anti-corruption purge" can have significant effects on the middle eastern countries. With Saudi Arabia being an economic powerhouse in the Arabian peninsula, they have a tremendous amount of power in the region. We saw this back in June when Saudi Arabia shut down their boarders and airspace to Qatar, a neighboring country. Due to the Saudi's tremendous power in the region, UAE, Bahrain, Egypt and the Maldives followed Saudi Arabia's move and cut diplomatic relations with Qatar. This put extreme economic pressure on Qatar because previously they imported a lot of goods from Saudi Arabia. Personally, I was in Qatar's capital, Doha, a few days after the diplomatic relations were cut and it was obvious it was taking a toll on the Qatari citizens. The supermarkets were packed due to a higher demand of groceries with the uncertainties that existed and certain goods were not available because they were imported from Saudi Arabia. With UAE being a small country as well, they will have to do whatever they can to keep relations in tact with Saudi Arabia in order to avoid a crash in their economy.
ReplyDeleteIt seems that many of the real estate markets and the stock markets are overvalued so it won't take much to send them tumbling.
ReplyDeleteI agree with Antonio, corruption is definitely going to be hard to escape in the short-term, since there are practically no benefits from it. This could lead to many people losing their jobs, and they will lose some investors. It will be interesting to see how these real estate markets bounce back.
ReplyDeleteI agree with Toni and Jack. To escape this corruption, it is likely high level workers in their government need to be fired. Once the corruption is dealt with, investment is likely to increase again.
ReplyDeleteTo escape corruption the government needs to fire all those whom are corruption. Then create a new policy in order to have a system for all major firms that is like a checks and balances. This way it will regulate those in charge and reduce the rate of corruption. It will help restore consumer confidence and help the economy as a whole .
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