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Oxford alumni vote that the corporate reputation of the UAE has changed

 Last night the annual dinner debate of the Oxford University Said Business School alumni, meeting at the World Trade Centre Club in Dubai, argued the motion that ‘This house believes that the corporate reputation of the UAE is unchanged’.

The motion was roundly defeated, although a small minority asked to vote that ‘it was too early to say’. ArabianMoney editor Peter Cooper spoke against the motion and veteran Gulf banker Richard Stockdale presented the case in favour.

In the end Mr Stockdale’s powerful marshalling of historic facts supporting the idea of continuity could not over come the simple analysis of the recent past. Namely that a shift from boom to bust over the past two years has quite self-evidently changed the corporate reputation of the UAE.

Boom to bust

From being a place where business dreams could be realized in an amazing oil boom, the reality now is that business life is much tougher, even if the essential ‘kind, tolerant and very business friendly’ approach has not changed from the early days of the federation, argued Mr Cooper.

Mr Stockdale contended that the overarching principles of the UAE remained intact. But with half-built construction projects littering the country, redundancies still happening daily and local debts commanding a heavy discount to face value, it was an impossible case to win.

Oxford Business School alumni joined in the lively debate, also pointing out that the challenge is now to rebuild and revive the corporate reputation of the UAE in a very different world.

It was also noted out that the UAE has unique strengths to enable it to recover more strongly from the economic downturn than countries whose deficit problems are structural and not merely a property development boom that has gone spectacularly bust.

Oil wealth

The oil wealth of the nation is sometimes forgotten as people stare at the idle cranes and half-built towers, more true of Dubai than Abu Dhabi, though nobody would deny that the nation’s capital has also suffered in the worst downturn for 19 years.

So the UAE’s corporate reputation has suffered. The debts, unfinished projects and unpaid bills speak for themselves in this debate. The real question is how fast this episode can be overcome. On that the debate continues.

The UAE has the wealth to quickly eliminate its debt mountain, or at least replace it with long-term government bonds. A country with $1 trillion in its sovereign wealth funds and something north of $100 billion in debt cannot really be said to be in financial trouble.

Disclosure: Dubai Resident