The recent UAE Government decision of intervention could not have been better timed or delivered. Given the international financial crisis, the step is welcomed, as it is timely, necessary and critical to bringing about confidence and a safety net to the local market and economy.
But as the global financial crisis is bringing international and regional stock markets down, the Gulf states need to install a comprehensive contingency plan to reduce its impact on the regional economy - which is about to enter into a monetary union. The latest global meltdown is the first of its kind to have impacted the regional economies, especially the UAE - which has become part of the global financial system.
One thing is pretty clear from the latest developments: the Gulf region in general and the UAE in particular are no longer isolated from the global financial system. The Gulf has now become more integrated to and interdependent on the global economy than before. Therefore, the governments can no longer remain aloof from the developments.
Over the last five years regional governments have pumped a lot of cash into global assets whose values have declined significantly in the current meltdown. It's time to take stocks of the remnants. One cannot assume that everything is right here.
On top of it, a few hundred billion dirhams have been siphoned out of the UAE's financial system by international financial institutions over the last two months, creating a liquidity crunch in the local market that forced the UAE Central Bank to inject Dh50 billion into the system to help banks finance ongoing projects so that the economy doesn't slow down.
The cost of borrowing has gone up and if it continues further, some mid-size developers will have to either slow down or cancel their projects.
As global leaders ponder the best options to bail out the troubled banks, it's also time for the Gulf countries to sit down and take stock of the exact situation and take action.
Although macro-economic fundamentals remain on a solid footing, it would be foolish to think that the regional economies are out of danger because there is always a first time for every good and bad experience.
Despite the fact that oil prices are heading south, inflation shows no signs of cooling, which could squeeze the real income of the middle-income group. Besides, the issue of transparency, dissemination of information, regular auditing, implementation of financial reporting standards and continuous vigilance could save regional economies from such a situation in the coming years. The growing pains are going from bad to worse. It's time for action if the region's governments want to minimise the pain.
Acre disturbances a failure of policy
The recent clashes between Palestinian families and Jewish protesters in a town located in Israel mark a dangerous turn of events as Palestinians are once again falling victim to discrimination and attack. This needs to be addressed with urgency and action.
Palestinians living within Israel - referred to at times as Arab-Israelis - constitute no less than 20 per cent of the population which accounts for about one million. These are families that have remained behind in their villages and towns as Israel officially became a state in 1948. The most recent clashes have taken place in the northern town of Acre when Jewish protesters torched two houses belonging to Arab families. Many Palestinians have been attacked and injured and about 100 cars and 40 shops were damaged.
These incidents are alarming as they highlight an increase in the number of discriminatory attacks against Palestinians living in Israel.
But their status as such is not new as the Jewish state has never granted them full rights as citizens. In fact, for over five decades, Israel has ensured their treatment as a minority as Israeli laws fell short of providing any protection or any set of rights on par with Israeli citizens.
In addition, all Israeli governments have consistently maintained an aggressive policy of land seizures which has affected the land and housing rights of many Palestinians. The disturbances in Acre also come as proof of the failure of Israeli policy in assimilating or integrating the Palestinian population, treating them instead as second-class citizens.
Worse yet, they have been separated into small segregated communities, splitting apart entire communities. So could the recent clashes be the beginning of a planned campaign of ethnic cleansing and uprooting of Palestinians living in Israel?
