Monday, March 02, 2009

Fear For Aussies in Dubai cells

Fear for Aussies in Dubai cells

  • Royce Millar
  • March 2, 2009
The Atrium to be developed in Dubai.

The Atrium that was to be developed by Sunland Group in Dubai.

A vision of gleaming new cities in the desert has proved to be a mirage for Australians lured by Middle East riches.

THREE property industry high-flyers, including the senior agent of a company part-owned by James Packer, are among a growing number of Australians under arrest or investigation in Dubai as a supposed development miracle has succumbed to the world financial crisis.

Australian authorities have confirmed that 13 Australians are under arrest in Dubai over charges or allegations ranging from bribery to failure to pay bills.

A legal source in Dubai has confirmed that among those in jail or under effective house arrest over property-related bribery allegations are:

*Marcus Lee, until recently a senior executive with the Dubai Government-controlled Nakheel development company. He is a former executive with Australian companies Jones Lang LaSalle and Investa. Mr Lee is in jail without charge.

*Mr Lee's Nakheel colleague Matthew Joyce, a former Melburnian who is also in jail without charge.

*David Brown, head of the Sunland Group in the Middle East, a Queensland-based development company part-owned by Mr Packer. He has been interrogated at least four times and has had his passport confiscated.

They are of particular concern to lawyers and the Australian embassy because of the seriousness of the allegations and the uncertainty about their future. United Arab Emirates law allows suspects to be held indefinitely without charge.

It is believed the allegations involve millions of dollars in consultancy payments by Sunland to Nakheel and a third party over a waterfront property purchase.

Nakheel is one of four development companies linked to the government and ruler Sheik Mohammed bin Rashid al-Maktoum.

Mr Lee and Mr Joyce have been in solitary confinement since January 25. They have been allowed only limited access to lawyers and family.

Martin Amad is Mr Lee's and Mr Joyce's Melbourne lawyer. He refused to identify Mr Lee by name or discuss details of the cases. But he said he was anxious for his clients as they entered their second month in custody without charge. "We're concerned for the welfare of the accused in custody where they've been kept in solitary confinement. Their physical and mental health has deteriorated. We are becoming increasingly frustrated at the time it seems to be taking for the prosecution authorities to investigate the matter."

Mr Amad said he was confident that after the prosecution was made aware of the full details of the property deal, the case against his clients would be dropped.

Foreign Affairs Minister Stephen Smith recently cautioned Australians overseas to be aware of, and comply with, local laws.

Commenting on the 13 Australians under arrest in Dubai, a Department of Foreign Affairs and Trade spokesman said: "The United Arab Emirates legal system is different to the Australian legal system. People who are under investigation can be held in detention for long periods of time without bail."

In the mid-2000s, Dubai began marketing its plan for a property-led future: instant megacities underwritten by billions in sovereign wealth.

Thousands of Australians in the property industry flocked there, lured by tax-free work and projects underpinned, apparently, by government cash.

Among them were prominent local figures such as ex-Docklands Authority boss Jon Tabart, former City of Melbourne chief executive David Pitchford, senior Bracks government planner and bureaucrat Lindsay Neilson, builders Grollo and architects Woods Bagot.

Experts estimate that, at the peak of the boom, a quarter or more of the world's cranes were swinging on Dubai's new skyline.

But it came to a screaming halt last year as Nakheel pulled the pin on a proposed 1000-metre skyscraper. The Government's cash proved to be debt after all, and speculation-driven development meant 40,000 cranes had been building a house of cards.

Expats from around the world fled in their thousands.

Among those left there is real fear as stories spread of Australians, Americans and others going missing, only to turn up in prison days later.

Whether the allegations of bribery and other offences prove true, some close to the Dubai scene say authorities are seeking scapegoats.

'There is a lot of face-saving to be done," says one Melbourne property player well versed in business in Dubai.

"The sheikh can never be responsible, so somebody else has to be."

Most Australians interviewed for this story would not be identified. "You have to be really careful. It's not a democracy here," one said.

An exception is Karl Fender, co-founder of Fender Katsalidis.

He said in Melbourne his company was involved in a string of projects, most of which had stalled.

One scheme involved the construction of thousands of villas. In September 1600 sold. In October, only one sold.

Mr Fender said the Dubai phenomenon always felt shaky.

"Dubai was a place in a hurry. It was based on a hard-to-define marketplace, and built on a frenzy of speculation," Mr Fender said.

Last week, The Age sought comment through the UAE embassy in Canberra.

The embassy did not respond.

Sunland's Mr Brown did not respond to phone calls or emails.

Sunland's managing director in Australia, Sahba Abedian, confirmed Mr Brown had been interviewed by police, but insisted his company was not implicated in the investigation.

Too late to unite?

in agreement: Tengku Razaleigh (left) supports Hadi's call for a government of unity to take us out of the mess we are in

Tengku Razaleigh Hamzah’s impassioned plea for a “government of unity” on his blog last Saturday gives us hope that not all politicians have succumbed to the destructive and self-perpetuating logic of political opportunism that has gripped the country since March 8 last year.

Standing at the precipice of a devastating economic crisis, with the respectability of our institutions deeply in question, and with the threat of social decay growing daily around us, “we need to do more than coast down to a failure that we can already foresee”, he said.

Few Malaysians will disagree with his sentiments, but few also will agree on what precisely must be done. Our politicians are daily engaged in vicious but ultimately trivial battles that appear designed not so much to better the lot of the people, but to score points in an increasingly unscrupulous race to power — and unfortunately these battles are what shape the political mainstream today and command and divide loyalties around the country.

Furthermore, before we rush too quickly either to accept or reject the new scenario, we must remember that the alternative is equally unpalatable: Are our leaders and elected representatives so far removed from the will of the people as to be blind to fears of an economy in jeopardy and a society beset by a widespread deterioration of principle?

Tengku Razaleigh’s proposal to support Pas president Datuk Seri Abdul Hadi Awang’s call for a unity government may be the last remaining path out of this mess, but perhaps it is already too late for any such government to succeed in a climate long defined by political selfishness and institutionalised corruption.

Many now fear that the protracted political stalemate in Perak will degenerate further into an instability that will lead inevitably to violent social disorder; and regardless of whether these fears are reasonable or unfounded, the fear itself remains palpable and true.

Radical changes are required to prevent an even worse political crisis: We must decouple business interests from politics, and make government a thankless task so distasteful to those seeking financial reward or glittering fame that only true public servants will seek high office — and the higher the office, the greater the burden.

We must also acknowledge that the political system of racial power-sharing works well only when all ultimately yield to the visionary and benevolent leadership of a single individual; and that such a system, regardless of the benefits it may bring in the short term, will ultimately result in the destruction of institutional — and individual — independence that is crucial to the survival of a modern nation state.

We must cease to depend on “leaders” for guidance and start accepting responsibility ourselves for the state of our nation. We must remember that the political demagogues we slavishly worship should in reality be our servants and that we owe them no more consideration than we do those who willingly choose to do our bidding.

It is also time that we dissociate ideas from the personalities who utter them: A good idea remains so regardless of who thinks of it first, or who says it, just as a bad idea remains bad even in the mouths of the most cherished hero.

We must put an end to the ceaseless second-guessing and speculation about motives and evaluate proposals for what they are; for our prejudice against (or bias for) a particular champion has often in the past made us blind to the merit, or lack, of their arguments.

Tengku Razaleigh’s government of unity may buy us some time to realise our deeper need for social change, but any such time is limited and may come at a terrible price. We must remember that it is only through change that we can hope for salvation, and we must be prepared to meet this challenge without care for fame or fortune. Are we equal to this task?

World is on the brink of disaster

We're on the brink of disaster

Violent protests and riots are breaking out everywhere as economies collapse and governments fail. War is bound to follow.

Mapping a world at the brink

Survey the present world, and it's all too easy to spot a plethora of potential sites for such multiple eruptions -- or far worse. Take China. So far, the authorities have managed to control individual "mass incidents," preventing them from coalescing into something larger. But in a country with a more than 2,000-year history of vast millenarian uprisings, the risk of such escalation has to be on the minds of every Chinese leader.

On Feb. 2, a top Chinese party official, Chen Xiwen, announced that, in the last few months of 2008 alone, a staggering 20 million migrant workers, who left rural areas for the country's booming cities in recent years, had lost their jobs. Worse yet, they had little prospect of regaining them in 2009. If many of these workers return to the countryside, they may find nothing there either, not even land to work.

Under such circumstances, and with further millions likely to be shut out of coastal factories in the coming year, the prospect of mass unrest is high. No wonder the government announced a $585 billion stimulus plan aimed at generating rural employment and, at the same time, called on security forces to exercise discipline and restraint when dealing with protesters. Many analysts now believe that, as exports continue to dry up, rising unemployment could lead to nationwide strikes and protests that might overwhelm ordinary police capabilities and require full-scale intervention by the military (as occurred in Beijing during the Tiananmen Square demonstrations of 1989).

Or take many of the Third World petro-states that experienced heady boosts in income when oil prices were high, allowing governments to buy off dissident groups or finance powerful internal security forces. With oil prices plunging from $147 per barrel of crude oil to less than $40, such countries, from Angola to shaky Iraq, now face severe instability.

Nigeria is a typical case in point: When oil prices were high, the central government in Abuja raked in billions every year, enough to enrich elites in key parts of the country and subsidize a large military establishment; now that prices are low, the government will have a hard time satisfying all these previously well-fed competing obligations, which means the risk of internal disequilibrium will escalate. An insurgency in the oil-producing Niger Delta region, fueled by popular discontent with the failure of oil wealth to trickle down from the capital, is already gaining momentum and is likely to grow stronger as government revenues shrivel; other regions, equally disadvantaged by national revenue-sharing policies, will be open to disruptions of all sorts, including heightened levels of internecine warfare.

Bolivia is another energy producer that seems poised at the brink of an escalation in economic violence. One of the poorest countries in the Western Hemisphere, it harbors substantial oil and natural gas reserves in its eastern, lowland regions. A majority of the population -- many of Indian descent -- supports President Evo Morales, who seeks to exercise strong state control over the reserves and use the proceeds to uplift the nation's poor. But a majority of those in the eastern part of the country, largely controlled by a European-descended elite, resent central government interference and seek to control the reserves themselves. Their efforts to achieve greater autonomy have led to repeated clashes with government troops and, in deteriorating times, could set the stage for a full-scale civil war.

Given a global situation in which one startling, often unexpected development follows another, prediction is perilous. At a popular level, however, the basic picture is clear enough: Continued economic decline combined with a pervasive sense that existing systems and institutions are incapable of setting things right is already producing a potentially lethal brew of anxiety, fear and rage. Popular explosions of one sort or another are inevitable.

Some sense of this new reality appears to have percolated up to the highest reaches of the U.S. intelligence community. In testimony before the Senate Select Committee on Intelligence on Feb. 12, Adm. Dennis C. Blair, the new director of national intelligence, declared, "The primary near-term security concern of the United States is the global economic crisis and its geopolitical implications ... Statistical modeling shows that economic crises increase the risk of regime-threatening instability if they persist over a one to two year period" -- certain to be the case in the present situation.

Blair did not specify which countries he had in mind when he spoke of "regime-threatening instability" -- a new term in the American intelligence lexicon, at least when associated with economic crises -- but it is clear from his testimony that U.S. officials are closely watching dozens of shaky nations in Africa, the Middle East, Latin America and Central Asia.

Now go back to that map on your wall with all those red and orange pins in it and proceed to color in appropriate countries in various shades of red and orange to indicate recent striking declines in gross national product and rises in unemployment rates. Without 16 intelligence agencies under you, you'll still have a pretty good idea of the places that Blair and his associates are eyeing in terms of instability as the future darkens on a planet at the brink.