UAE: Media hub strategy

I’m reproducing a brief I wrote a few months back for Oxford Analytica about the media hub model in the UAE.  At the time Abu Dhabi hadn’t formally launched its big media hub to compete with Dubai Media City, but I think that underscores even more the Dubai-Abu Dhabi rivalry/emulation I touched on in the briefing.  Enjoy:

United Arab Emirates: Media hub strategy bears fruit

EVENT: A new federal media law scrapping jail terms for press violations is nearing approval.

SIGNIFICANCE: The law formalises a decree issued last year by Dubai’s ruler, Sheikh Mohammed bin Rashid al-Maktoum. The United Arab Emirates is realising gains from a decade of investments aimed at developing into a global media hub.

ANALYSIS: The new law is part of a decade-long effort to boost the United Arab Emirates’ (UAE) domestic media production and attract foreign media firms. Dubai is now the venue of choice for global media companies seeking a foothold in the region. Sponsoring and advertising in these media advance its strategic goals of becoming a world business and tourism destination (see UNITED ARAB EMIRATES: Disaffected threaten Dubai model – May 8, 2008).

Its status as the physical base for media outlets also gives the state coercive political power over content, which it uses on occasion. This is a major success for the UAE’s state-driven development model, and has prompted the wealthier emirate of Abu Dhabi to take similar steps to centralise and promote media. A secondary goal of the media drive is to foster a unified Emirati identity and to strengthen civil society. However, this is hampered by conservative elites and a near total dependence on foreign workers.

Dubai initiative. Dubai led the media hub push with the launch of the Dubai Media City (DMC) free zone in 2001. Since launch, DMC has attracted many global media players including Reuters, BBC World, Associated Press Television News, CNN, and MBC. The free zone is managed by TECOM Investments, a company almost completely owned by the Maktoum family, and managed with the help of several consulting firms. Its primary goals are to:

• attract foreign media companies to base in the UAE; and

• drive Emirati media production.

Media advantages. A free zone base offers foreign media workers and firms a number of advantages:

• Income is not taxed.

• Journalists are clustered together, making networking easier.

• It offers high quality infrastructure — fibre optic networks, office, and studio space.

• The travel hub makes it easy to dispatch journalists to hotspots.

• There are no restrictions on hiring foreign employees.

• Absolute (100%) foreign ownership is allowed (compared to 49% outside free zones) (see GULF STATES: GCC states vie to attract investment – January 9, 2008).

• The regulatory environment is tailored to streamline bureaucracy.

• It is connected to other free zones: in addition to DMC, TECOM investments also runs Dubai Internet City, Dubai Studio City, and other related free zones.

UAE advantages. Benefits to the UAE from developing into a media hub are also numerous:

• New revenue streams from licences, administrative fees, and profits from government-controlled companies continue the UAE’s diversification away from energy.

• Advertising and sponsorship promote the UAE’s real estate, finance, and tourism sectors. For example, CNN’s Marketplace Middle East programme is produced in DMC, and its main advertiser is Dubai International Financial Centre (DIFC), a free zone for financial services and investment firms.

• It offers soft power opportunities: media coverage can introduce the UAE to foreign audiences, help counter negative stories, and frame coverage of international events.

• The government has significant leverage over journalists and content. Journalists’ visas can be revoked for offending Emirati elites. The Pakistani satellite channel Geo TV was recently threatened with expulsion from DMC if it did not drop two political talk shows. It was also temporarily pulled off the air during the Pakistani emergency rule period in November 2007, presumably under pressure from Islamabad.

• It resonates well with the UAE’s attempts to brand itself as a ‘hub between East and West’.

Senior royalty, including Prime Minster Sheikh Mohammed bin Rashid al-Maktoum and more recently President Khalifa bin Zayed bin Sultan al-Nahyan, see developing domestic media as a way to promote national cohesion and the development of civil society.

Dubai emulation. Dubai’s success with DMC has prompted its wealthier neighbour Abu Dhabi to take a similar tack. Over the last two years Abu Dhabi has centralised its state-owned media assets into a single holding company, the Abu Dhabi Media Company. The centrepiece of this effort was the April launch of an English language daily broadsheet named The National.

Outlook. However, these efforts face a number of challenges:

• Local talent. Due to a dependence on foreign workers, developing vibrant domestic media with an Emirati voice is not proceeding as fast as hoped. A main goal in launching The National, for example, was to develop a venue for in-depth local reporting that would promote civic identity. Yet the paper has been unable to attract local talent and is staffed almost entirely by Western expatriates. Its coverage has been far less hard-hitting than pre-launch hype suggested.

• Continuity. Most expatriate media employees do not stay long term. Turnover is high, hurting standards and continuity. This is exacerbated by regulations that allow companies to create visa problems for employees who leave to work for a local competitor. Such rules lower incentives for good performance and impede the career development of talented workers.

• Inflation. Rapid inflation, especially in the property market, is eating into living standards, making the UAE, particularly Abu Dhabi, less attractive to foreign workers than even one year ago (see UNITED ARAB EMIRATES: Inflation threatens hub ambition – June 16, 2008).

• Media freedom. The political pressure exerted on Geo TV has cast doubts on the credibility of government commitments to media freedom. There is little national consensus on where the limits on free speech lie or what constitutes libel. While freedom of speech is officially enshrined in law and prison terms for press violations were abolished in 2007, journalists can be harassed or expelled when their work offends powerful interests or if they impose political costs on the government, as with Geo TV. While forming such norms on media and expression is a complex process for any nation, it is further complicated in the Emirates by:

1. the nation’s youth and recent integration;
2. dependence on skilled and unskilled foreign labour;
3. rapid economic growth over the last 30 years; and
4. wide disparities in lifestyle and community standards among emirates, particularly between the glitzy cosmopolitan Dubai and more socially conservative emirates such as Sharjah or Ras al-Khaimah.

An aggressive media strategy has helped promote the UAE as a tourism and business hub. This is dependent on an ability to attract skilled foreign workers and media companies, which could falter if wages do not keep pace with inflation or property prices skyrocket. Efforts to use media to foster civil society or create a stronger social fabric will take longer and be less successful.

CONCLUSION: The UAE authorities and powerful business concerns will continue to foster positive coverage by bankrolling friendly media such as The National. The government will use its coercive power over content if key political or economic interests are threatened, but will do so sparingly to avoid alienating its lifeblood of foreign media workers and companies.

This is an electronic version of an article published in The Oxford Analytica Daily Brief