The Rise of Trump: An international perspective.

Donald Trumps rise in the domestic political platform of US politics carries its own malaise of the lack of serious intellect within the Republican Party allowing a conceited ego maniac to hijack the party. While his presence on the political scene started as a form of abstract entertainment he moulded himself, backed by his panache to be racist, sexist and conceit, to appeal to a debased anger that underlies many Americans personal thinking, he catapulted himself to be a front runner by projecting the unthinkable and the unsaid. Domestic politics aside, Donald Trump is perhaps the scariest of the candidates when it comes to visualising his potential role and impact on international politics.

Should be be taken seriously enough to ever become the President of the United States his current menu of recipes for approaching the international political scene is not only fraught with a demagogue's ideological frame of mind but more alarmingly a lack of intellect and finesse. His flippant remarks about Mexicans being rapists, Muslims being barred from entering the United States and the not so welcoming attitude towards all and sundry suggests Trump is way out of his league in understanding how world politics works. One cannot help but imagine a world with Trump as the leader of the most powerful country being a more unsafe place than ever before.

If his appeal to the average American is that he represents their anger at the loss of jobs to China and invasion of low paid foreign immigrants, he is also out of the touch with the anger that a large body of people around the world have towards America's lack of empathy for the political and social needs of the people they have tried to shape into their own mould of foreign policy. While Trump as the leader of the free world may still have some affinity to the likes of Putin's leadership of Russia (he did admire Putin's hatred for the press), Trump will certainly be out of his depth in dealing with the Chinese, Japanese and the large assembly of Muslim leaders whose people he has sought to paint in one sweeping stroke with his demagogic brush.

On a more deeper note Trump has thrived off harping on what is wrong with the world, including the American domestic scene, but has not offered any solutions on how to fix things. Whenever the debate has turned to a serious note Trump has had the nerve to bring the discussion down to raw emotion even centring on the vulgar. However, Trump's antics are not just some school boy tantrums but a carefully designed charade to keep the debate at an emotional pitch, a almost vulgar disdain for the serious question, the serious answer or indeed an agenda that begs anything more than a rhetorical profanity for what this man can end up projecting.

If ever elected as the President, Trump will have the power to take military action, and given his bullying style could well even pressure Congress into creating a world order where the search of peace will be replaced by a search to get even. Sadly as much of his anger on the domestic front is misplaced, the same might well be true of his vision of world politics, leading us to foresee a World According to Trump where the dictum of 'shoot first question later' might well be the order of political action.

Trump die hard supporters will argue that he will mature and mould himself into being a leader of the world and while projecting a strong America will also forge a more effective leadership on the world map. This might well happen, especially if he leaves world politics to a competent Secretary of State, however given his ego this is highly unlikely. One can only wonder in fear of how he will approach the thorny issues of Middle East politics, or acceptance of China as an equal partner on the world scene or engage in a serious dialogue with Europeans or the Mexican and Canadian neighbours (both of whom he has not been kind to).

Political watchers can only hope that even if he wins the Republican ticket  Donald Trump may fail to raise the ante when it comes to the final stretch of the Presidential race. Indeed from an international perspective we know too well that US Presidents are not elected for their acumen of international politics but more on the basis of their domestic agenda. Let us hope people within America realise that Trump may appeal to the unsaid within American society there are still a vast silent majority who balk at his egotistical style which offers only platitudes of hate and no substance on solutions.

Pakistan Cricket: A saga of hope.

Charting Pakistan cricket teams progress in the current 2015 Cricket World Cup with comparisons to 1992, when they won the tournament, is perhaps clinging to the hope that somehow miracles can mysteriously reappear. The possibility to reach the next round largely depends on their performance for the last three matches, but more than that a statistical hope that other teams don't do well. The drama of Pakistan cricket is precisely that, a large dose of hope; hope the pitch conditions suit them, hope the other team does not do well, hope that a catch is taken, hope the batsmen can see the ball....


 Cricket in Pakistan lacks leadership in its administration, leadership on the field and most of all the testosterone of becoming a winning side. Yes we have heard its a side steeped in natural talent and who knows if they make it to the next round suddenly they be a rejuvenated side. Yet that simple statement is also tinged with a large measure of hope than objective planning and the certainty of performance.

The team selections are amazingly bizarre, almost if the opposition was asked to choose who they would like to play against. We cannot bring the players from Pakistan who were dropped for reasons that were explained with cricket logic that in any case is absent from the selection process. What the team lacks is heart and passion, and Fawad Alam certainly could have provided that, and a measure of better success than the team that is down under.

Some comments on the individuals would not be out of place.

 Misbah as a rear guard player has held his own, but at best he is merely been holding the enemy at the gate till the troops who had no heart to fight can retreat into a dismal defeat. What he has lacked is the flair and attacking mindset that captains should bring to the pitch. In fairness to him he would say 'attack with who?'

 Nasir Jamshed: He was picked to replace Mohammed Hafeez who had a leg injury and had to pull out. Frankly a one legged Hafeez would be better than a blind batsman, who cannot catch the simplest of catches his grandmother would easily take. How much longer will we hope he will perform with a 50 or a 100? I just wish when he injured his finger in the last match it would have broken so he can be sent home and someone who plays cricket replace him.


 Shahid Afridi: Pakistan cricket lives on the hope that when he does not perform with the bat, which has been more often than not, he will perform with the ball. Of late it seems he has done neither. The fans and pundits agree that he can change a game, but does Afridi know he needs to change his mindset first? He is so taken up with the 'Boom Boom' label he has that he plays to the crowd by trying to slog every bowler out of the park. Most days that just cannot happen.

 Umar Akmal: Every time he comes out to bat the commentators always say he has tons of talent. Somehow he has to find a way to carry that talent into the batting crease with him. Talent in his kitbag does no good to the cause and is akin to sending a soldier to war without a weapon. Why should he even be considered a keeper at this level is beyond comprehension.

 Younis Khan: The former stalwart of test cricket, is nothing more than an ageing aspirant of one day cricket, and somehow feels he is sent in to give the other side catching practice. Yes he can bring stability to a side but more often then not when the side crumbles he joins in the rout.

 What ever happened to the idea of playing Sarfaraz Ahmed as a specialist keeper and even opener. He certainly would take the catches that Umar Akmal felt were not necessary to grab and the results may have been different. Why isn't a specialist spinner like Yasir Shah being played? Are we so plagued by batting failures that adding a batsman, especially the likes of Nasir and Younis are the only solution.

 Pakistan side's fielding is simply a joke. Perhaps after their batting has given the other side catching practice they feel its not necessary to take any more catches for the day. The spirit to fight back is just absent. As someone said that now the team has to fight like cornered tigers; well the team is cornered now we need to find some tigers.


 What makes this whole saga so hard to watch is the fact that teams like Ireland and other minnows have shown more heart than the professionals of the Pakistan side. Yes there are many recipes to try and get this Biryani of failures right but getting the mindset right and making the proper selection choices is a basic requisite before cooking up success is even possible. The alternative is that we continue to rely on hope and somehow through some customary magic wand the one or two players who can carve out wins turn up on the pitch.

Discussion on Education and change with a closed minded Taliban sympathiser.

Not long back the young Pakistani girl Malala Yousufzai was in the news with the launch of her book and narrating her struggle and the need for education for girls in Pakistan. The majority of Pakistani's were proud of the bravery of the young girl and while her endeavours will raise awareness of the issue of education for girls in the North West of Pakistan, there is no doubt that in some very conservative quarters there is a Taliban type sentiment that educating girls is counter productive.


 Around the same time the debate about education and what Malala Yusufzai was promoting came to a head with a discussion with a person who I would best describe as a Taliban sympathiser. I shall simply call him TS and the dialogue went like this.

 "This girl should not be allowed to appear on TV, especially in England (he pronounced it Ing-land)she is bringing shame to our country."

"How is she bringing the country to shame?" I asked.

"We should only teach girls home economics, to make them better mothers and wives." TS fancied he was a little liberal than the Taliban in his position.

"Well why not a doctor or a teacher, or any profession." I enquired.

"How can you have your daughter working in a public place, seeing men who are not related to her, and with it come all the vices of the West?" TS was getting worked up.

"What vices? Look TS if your daughter has a good upbringing then she will up hold the values that are ingrained in her." I offered my conciliatory view.

 "You do not know these vices." TS asked accusingly.

"Education is not a vice." I answered.

"Perhaps not, but then the girl is working, comes in contact with men, they take her phone number call her for work and then slowly they tempt her to this dating thing and next your daughter's reputation is in the gutter and no one will marry her." TS had figured out the whole script.

"Are you saying that girls should not have mobile phones?"

 "Actually no they should not. Its an evil in their hands." TS smiled.

"This is character assassination of all women which logically one cannot accept." I told him.
 "OK lets stick to the job thing. So you do not want your daughter to be a doctor because she will meet men?"

"Absolutely not." TS answered.

 "TS who do you love the most in the world?" I asked.

 "My mother ofcourse!"

"OK not lets assume God forbid your mother is seriously ill and needs to go to a hospital and if as you say girls should not be educated it is natural then only a male doctor will examine your mother. Right?' I asked TS.

"What are you suggesting?" TS was getting a bit aggressive.

"Well if you do not want your mother to be touched or examined by a male doctor then the only choice is a female doctor, who obviously will be someone's daughter. So how can you be against educating women?" Even though I am not suggesting education for women should only be to become doctors, but for the limited closed minded thinking of TS I took the narrow route.

"See this is the problem with you Western minded Pakistani's you twist something so simple of education and make it too complicated by giving these examples which are all theoretical. My mother, may she be blessed, is in good health so why should i think of what you are saying." TS was getting even more aggressive.

"TS may your mother never be sick but just hope when she does go to a hospital she is not having to be examined by a male doctor. My suggestion pray someone else has had an open mind enough to educate their daughter to be the doctor who will examine her." I was smiling.

 TS stood up, glared at me and walked out. Lucky for me he did not come back with a gun and shoot me for being an infidel.  

Pakistan: Negotiating with Militants.

The recent spate of attacks by the Pakistan Taliban, most notable of which was the attack on Karachi Airport, backed with a promise by its leadership of more attacks, scuttles any belief that negotiating with the Taliban and other militant elements is a senseless position. Imran Khan, the leader of the PTI, and who govern the province where the Taliban and co have most of their activities, was for a few years adamant that the a negotiated settlement with the Taliban was not only possible but desirable. As noble as the desire for peace and negotiating it across the table sounds the idea of negotiating with someone who says, "if i do not get my way I will fire my guns", can only be a non starter. In the wake of the attacks even Imran Khan has been quick to back the military action against the militants and he must realise that negotiating with the Taliban and co is not a feasible position. In Pakistan we have been stressing we are a democracy, and for the first time in its checkered democratic history, the incumbent government handed over power after losing in the elections to another civilian government without the ignominy of the military stepping in. Pakistan has a parliament and has elected representatives, no matter how weak the democracy may seem, so negotiating with a power group that has not got any representation from the people through the democratic process is like admitting that political groups who are well armed can hijack the 'democratic' process whenever they wish to. The statement by the Taliban that as the peace talks were faltering they have decided to take revenge and there will be more attacks is simply saying that if we do not get our way we will kill you and kill a great deal more innocent people. Imran Khan and his party should wake up and if they do want to make a difference, and a positive difference, they should simply say, 'so long as you carry a gun there cannot be a discussion'. This has to be non-negotiable, and then it as to ask what is there to negotiate? Taliban was the Shari'ah law in the country, well there already are Shari'ah laws as approved by the Parliament in force in the country! They want a society where selective education of their flavour is only allowed; ask them to win enough parliamentary seats and with a majority in the National Assembly pass the laws they want. In essence one has to wonder when one says we will talk to the Taliban one had to wonder that in a democratic system, as rickety as it may be, what can you talk to them about? The audacity of the recent attacks, and the targeting of military targets by the Taliban has infuriated the Pakistan Army, perhaps more so that the attackers were foreign nationals who form the cadre of the Taliban militant force also. The moment has really come for Pakistani politicians and the public to reject the politics of violence and there has to be no giving in to talks where the basis of a discussion is enforced through guns. The only talks that can be held with the Taliban is their disarmament and to only give them the option to be a political party that can try its luck at the polls. The politics of division especially on religious grounds where each may claim to be 'better Muslims' then others is not in the spirit of Islam, where tolerance is the creed and not the intolerance that these militants espouse. Imran Khan, Nawaz Sharif and the other parties within the Parliament should all agree to a single plan on the issue of terrorism and militancy. There has to be a national program for also educating the masses on the real issues of national reconstruction and how the rigid position of the militants is against the very edifice of statehood. Any change that must happen to the social and political fabric of the country must happen through the democratic process and not through the power of militancy.

ICC Reorganization: A case of faulted logic.

India, Australia and England have created a triad of exclusivity to essentially take over the administration of cricket world wide. Each has their own logic to why they have worked secretly for months to hijack the cricket world and their logic is nonsensical to say the least. It ignores the welfare of the sport, scuttles the work to create a wider worldwide appeal (why else would we have T-20), and tries to create a Security Council type of structure which can hardly benefit anyone other than the three countries mooting this hair brained idea. England's argument would be simple; the inventors of the game, the home of the ICC till it was moved to Dubai, and essentially the people who taught the rest of the world the game of cricket and its bizarre rules that outsiders take a while to understand. I always argued that apart from the commercial reasons for colonization the purpose of the British Empire was to teach the world their sports so in time the former colonies would beat them at the very games they were taught. Need I say more than England's performance in Soccer, Rugby and Cricket? So other than a sense of nostalgic history England's claim to be in the elite Group of Three is without any basis. Australia, perhaps because of the longest run as the world's premier Test playing nation and one day side could lay better claim to an exalted position. However, performance on the field does not mean you end up with a position of power in the ICC other than what other nations would have. Besides when the fortunes of performance vane, as they eventually do, does the position of power be surrendered? Just because China dominates, say diving in the Olympics does not mean the power of the sport administration should shift to Beijing? By the argument of performance, South Africa has shown its mastery in test and one day cricket in recent years, why are they excluded? Both Sri Lanka and Pakistan have carved out their own short periods of supremacy on the cricket pitch; so do we end up with a power shifting structure that changes with each world cup? India's claim to be in the elite club and control the destiny of cricket is perhaps the most illogical. Its argument that it generates 80% of the viewership of the sport on TV media it deserves the right to be in the Group of Three is contradictory. While it argues this position on the world scene, its own Premier League (IPL) is based on a more equitable formula of revenue distribution where the last placed club would get perhaps 50% of what the winning club would get, but more importantly, this is based on a formula of the number of appearances and matches you play. If India's argument is based on viewership, considering its massive population, then asking for a different revenue sharing formula for matches that India plays would be fair, but to want a bigger share of ALL worldwide revenues even when India is not playing a series is arrogant to say the least. Another problem with India having the power within the ICC rests upon the state of cricket administration within India. To say that Indian cricket administration within the country is rotten to the core would be an understatement. The scandals involving IPL and members or relatives of members of the BCCI board are well documented. Why would the world cricket administration allow these rotten corrupt scoundrels into their portals of power? Will the code of ethics of the ICC be totally ignored? The fact that India offered side deals to Bangladesh, Pakistan and Sri Lanka where by saying that revenue sharing on bilateral series will be open for discussion and distribution/adjustment from India's share is really a form of bribery to get into the Group of Three. I would venture that South Africa would also have been offered some treats on the side to accept the new structure. But stop and ponder, if all the other countries stood together and told Australia, India, and England to pack their cricket bags and play amongst themselves, I doubt that it would have made a huge difference to the world of cricket. In the long run cricket would remain healthy as South Africa, Sri Lanka and Pakistan combined have enough of a pull to keep their own audiences entertained. Sure an South Africa-Australia series would be missed but by the same token Australia beating England and India each time would get boring too. Sadly the future of cricket will be scuttled for ever by the problems that three countries will bring to the ICC and none of the other boards see that.

On haircuts and debt settlements.

There has been recent talk, some of it unsubstantiated press rumors, that Dubai World, the debt laden Government Related Entity of Dubai, has been contemplating, on the advice of its consultants, to consider as much as a 40% haircut on the debt and repayment of the balance over seven years with no interest. Needless to say, banks had two reactions ignore the rumor, (hard to do in the present day) or just balk as the audacity of the whole idea. Haircuts and debt repayments only happen to work, if that is the word to use, when there is literally no hope for any possibility of the principal debt ever being repaid. If the rumor was an attempt to test the waters, then the consultants need a fair dose of understanding that you hold a dialogue with the banks and do not pretend to have a conversation through the rumor mill, this always backfires.

While I am not privy to the discussions or indeed the people who are making these decisions, so what I venture our is conjecture and my recommendations may well be off the mark; yet as a three decade resident in the financial world of UAE, and an ardent well wisher for the country I would imagine a solution oriented approach is what is needed. What are the options ahead for this debt settlement?

In the first place we must be clear that the entire extent and complexity of the Dubai World debt is not entirely public and in similar vein neither is the possible cash flow profile over the next few years really known to the general public. Thus, if a seven or five year repayment is suggested it goes without saying that the cash flow projections will have to match this settlement profile. Keeping this in mind I would suggest the following.


1. When considering a haircut of any amount there has to be a clear understanding that this is seriously hurt the image and the standing of not only Dubai but also UAE within the financial community. Even if such an offer is accepted it will be with the gesture and lack of goodwill to provide additional funding in the future even when things are better. Bankers have a long memory and will remind you of their losses from decades back. Any haircut that is suggested has to be tied to an incentive. My suggestion would be to offer the banks a 70% settlement with the balance 30% to be strucurted as a Zero coupon bond with a long maturity and the caveat that this 30% would be exempted from payment under a formula for early payments. Thus if the 70% is to be paid say in seven years then for each year this amount is paid earlier there is a percentage of the 30% zero coupon bond that is written off. This creates an incentive for DW to pay early to get the discount. Ofcourse, the 70% should carry a new negotiated interest rate.

2. While legally there is the possibility of a bankruptcy to be considered and a financial 'guru' even said to me that there is no harm in such a route being explored and mentioned the examples of Enron, Japan Air Lines and many others. My simple response is that those were not GRE's and were joint stock companies with a broad public shareholding, DW's default will in the end be seen as a moral default of the entities behind it and this is not an option that should be even discussed.


Then the smart one's will ask are we not in a catch 22 situation?

In a sense yes, but then we have to consider long term solutions. Here is what I would do.


1. Within the UAE finance structure the Dubai Government should consider a long term Treasury Bond issuance program. These bonds should not only be seen as a monetary measure to deal with the deficit but also to restructure the debt of the GRE's in a manner similar to what many governments around the world do. US Treasuries are issued all the time and new issues retire old bonds and the cycle goes on under a long term program. It is precisely the lack of this program that has resulted in the funding of long term project needs with short term borrowing resulting in this mess.

2. The current Federal and Abu Dhabi Government assistance should also be rolled into this Treasury Bond program and perhaps even seek a tier one issuance with the Federal Government or Abu Dhabi government subscription of the earlier issues. This will bring much needed liquidity into the trading of these Treasury Bonds.

3. The UAE Central Bank to support such a program in the classification of these as investment securities rather than as simply loans to Dubai Government.

4. Set out the assessment of the cash flows of Dubai World and seek an debt retirement program which is realistic and not based upon the hope of things improving. It will mean that more detailed information on the cash flow and asset profile of the company and then to see how this can be managed to meet the obligations. With the backdrop of a Treasury Bond program the pressure to come up with three, five or seven year debt repayments will be overcome as the Treasury Bonds, through their liquidity and re-issuance programs will be able to manage a more orderly debt retirement rather than a pressured situation as we sit in today.


The reality is that any settlement of this debt has to be realistic in its scope and intent; failure to recognize the sensitivity of the situation within the financial world would have repercussions that might be hard to deal with. It is therefore vital that for the good the country's standing a positive approach is important in this situation. I am not convinced that haircuts and interest waivers is the solution, this is not giving the right message.

Is Dubai Inc's debt really $170 billion?

The EFG Hermes report that suggested that Dubai Inc, implying all government related enterprises (GRE) and direct government debt could add up to between US$ 130-170 billion opens up a discussion in ones mind. The report suggests that the current known debt of $96.6 billion could be higher on account of the bilateral loans with local banks. It even cites the possibility that EmiratesNBD bank might have an exposure of $24 billion to Dubai Inc. This prompted me to check the balance sheet of the bank and to glean through the information known in the market and reported from time to time. The related party exposure shown at end of September 2009 in the balance sheet shows DH 45 billion (not dollars) due from possibly Dubai Inc as a whole, and there are deposits etc of about Dh 7 billion. I cannot therefore understand how such an assertion can me made. The entire loan book of the bank is US$ 53 billion of which just retail lending is $ 6.56 billion and then there is the trade finance and corporate lending, which when is adjusted to the over all loan book, by reason of deduction can only end up with the Dubai Inc exposure as $12 billion or so.


In addition, the local banks also have have massive deposits from the government entities and this is a major part of their float that comes to them and is a key part of the interest margin that they earn.

At the time of the Dubai World announcement in November 2009 the total debt estimated, which includes obligations to suppliers and contractors, was around $82 billion. Yes new obligations were taken with the Central Bank and the recent Abu Dhabi assistance which would not, in theory change the position of the over all obligation. Assume that of the $25 billion raised from the Central Bank and the Abu Dhabi assistance, about 75% was used to retire debt and the balance kept in reserve for operations or other maturing obligations, then even the net effect would be that the obligations would go up to US$88 billion.

How this can suddenly be considered a having increased to US$130-170 billion is baffling to me. I have always assessed that of the $82 billion about $60 billion is bank loans or bonds issued in the market and the balance $ 22 billion is creditors like consultants, contractors and service providers. A number of these creditors had either agreed or willing to agree to a reduction in their amounts in exchange for a definite payment plan.

I can buy the argument that if all the grandiose plans that were underway in Dubai were to continue at the same pace as they were in the early part of 2008 then indeed one can argue that the debt obligations of Dubai Inc would have mushroomed. Whether they would have been to the extent of $130-170 billion is a moot question. Intersestingly a couple of weeks back EFG Hermes published a report on the UAE banks and had made not any mention of the assertion that is being made today! So what information has come to light that would prompt this sort of assessment?

I am not suggesting that the research analysts at this reputable bank are being malicious but I do feel, very strongly, that issuing blase' statements is not conducive to the functions of a research analyst. After all we are not talking of an increase of say 10% which can be said to have happened in the normal course of business. In effect the suggestion is that the exposure to Dubai Inc is well over 120% more than was known to them or the market a few weeks back. This is where I think there are two options when I read such reports, a. press the delete button, or b. apply some common sense (which could be uncommon these days) and see is there any logic to this sort of thinking.

Clearly I took the second course. However, this asserts my position a few weeks back that it is time that a white paper is issued by Dubai Inc on the debts, the assets and that will clear up the air. This has, willy nilly, become a public matter through the way such reports have emerged in the media. This therefore needs a clear and coherent response from the right circles. I agree that bloggers like me can only speculate on the matter at hand, but we can use logic.

In a nutshell I find the nature of this report on the debt from EFG Hermes to be speculative in nature and I do believe that they owe it to the audience to explain themselves. Simply to assert that this could well be on account of bilateral loans from the banks which might not be reported is a rather serious accusation. I would presume the UAE Central Bank and the Auditors of the banks, all of whom are well reputed professionals, could hardly have sat by quietly eating their homous oblivious to any new lending spree in to Dubai Inc. I am in the consulting business and know for sure that new debt of Dubai Inc or most even well known companies is not on offer these days. Banks have hunkered down and just preserving themselves for the moment (not necessarily the best strategy in my opinion) but nevertheless that is how it is.


Ofcourse when the year end balance sheets come out in a few weeks time we will know for sure what the final verdict is. Till then I will reserve judgment and simply say that this report needs validation, and EFG Hermes may have got this one wrong.