Abu Dhabi is a country on a mission. To become the oil state that built itself a real, future-proofed economy. To be the brightest star in global investment markets. To be the Switzerland of the Middle East. And to be a world star in media, sports and culture.
In short, this home of as much as 9% of the world's oil reserves (and a mere 1.6 million people) wants to become the most admired and successful spot on the planet and an oasis of peace and maturity in a seething region. And the US-educated movers who are driving Abu Dhabi see investments in the media as a key way to "brand" their country, create global influence, and build export earnings.
Abu Dhabi is the richest of the seven emirates, and accounts for some 60% of the UAE's GDP. Arguably the best known emirate is still Dubai - 70 miles down the road - whose headline-catching property developments collapsed in flames - and had to be rescued in 2009 by its then slower-moving, more secretive but wealthier neighbour. The ultimate humiliation might have been Dubai being forced to name its (and the world's) tallest tower after Khalifa, hereditary leader of Abu Dhabi.
Power shift from Dubai
The $10bn rescue of Dubai marked a public power shift to Abu Dhabi. The UAE is a federation of sovereign states but Abu Dhabi has most of the oil - and a lock on the presidency and the seat of government. Now, after a few years of quietly sneering about Dubai's brash expansion and Westernisation, Abu Dhabi is enjoying life on the world stage - and is determined to avoid the pitfalls of its noisy neighbour.
Abu Dhabi's objectives are straightforward enough: to replace oil revenues with industry and tourism. But it is ultra-smart, image-conconscious and creative.
Think of how much you knew about Abu Dhabi before the Formula One Grand Prix (happening again this weekend) hit the stunning Yas island circuit. Or before the ruling family injected hundreds of millions into the UK's championship-chasing Manchester City football club. Or before Rupert Murdoch, Google's Eric Schmidt and others bowled up at the Abu Dhabi Media Summit. And think of how impressed you were when you heard that this dustbowl had built local branches of the Sorbonne and New York University, and was building UAE clones too of the Guggenheim and Louvre museums on impressive reclaimed islands. Or that the award-winning 8-year-old Etihad is the world's fastest growing airline. Or the way that the country has attracted the FIFA Club World Cup and ICC cricket matches. Ten years ago, the UAE meant Dubai to foreigners in business or leisure; today, it's Abu Dhabi.
Then, there are eye-catching plans - from the world's sixth largest oil producer, of all countries - for a sizeable zero-carbon city. And, meanwhile, it has made major investments in General Electric, private equity firm Carlyle, Ferrari, and London's ExcCel G20-to-X-Factor-to-Olympics venue. It was Abu Dhabi which (profitably) "rescued" Barclays in the dark days post-Lehman. And, as this increasingly self-confident nation owns the world's largest sovereign wealth fund (the Abu Dhabi Investment Authority), you have to listen very hard to hear any hint of controversy from a region built on it. That's the Switzerland bit.
Media at its heart
Abu Dhabi's extended media operations are right at the heart of its global ambitions. Symbolically, what had started life as the Emirates Media Company, based in Dubai, is now the Abu Dhabi Media Company. This is the burgeoning group sprawling across TV, radio, newspapers, magazines, film and digital ops. It's the largest media owner in the Middle East and rapidly getting larger.
In 2008, it launched The National,a high-quality English-language daily newspaper resembling Britain's Daily Telegraph from which it drew its launch editor and much of its early talent. It is no more likely to become profitable than any other new daily newspaper. But it is playing self-evident role in the image-making of Abu Dhabi as a Western-friendly cultural hub in the Middle East.
The inter-woven families who rule Abu Dhabi exercise their economic muscle with some style, symbolised by nobody better than Khaldoon Al-Mubarak (pictured above, with Rupert Murdoch).
Cool, smart and football-mad
Most Brits first heard his name when Abu Dhabi swooped on the then struggling Manchester City of the English Premier League. For the 35-year-old football-mad Al-Mubarak, it was a dream deal alright. He has spent years following Premier League games on a plasma screen in his office and couldn't wait to get onto the training pitch with his new charges once the ink was dry on the surprise deal. This quiet, unassuming, bespectacled man is one of the architects of the new Abu Dhabi. He is chairman of the Executive Affairs Authority, a member of the country's 98-strong elite Executive Council, and CEO of Mubadala its high-profile private equity fund.
He is also involved in nearly everything Abu Dhabi does in business and on the international stage. Al-Mubarak has been wowing international business for several years as the country's interface with the rest of the world. One US banker says: "He has a lot of bandwidth for his age. He is a great public face for Abu Dhabi as well as being one of the great young business leaders in the world."
The US-educated Al-Mubarak is an exceptional man and has been able to juggle a large number of business and government roles in Abu Dhabi and internationally. He talks quietly and broadly about how "We are building a country together", leaving open to doubt whether the "we" includes the Abu Dhabi ruling family or his growing legions of international partners. But he is nothing if not creative and charming. And connected. Al-Mubarak's position owes much to his closeness to the Abu Dhabi Crown Prince, half-brother to Abu Dhabi's ruler and his expected successor, who is credited with the progressive policies of the past 10 years. Internationally, Al-Mubarak's smooth Western ways, smart suits and US vocabulary are considerable assets too. Even the designer stubble helps.
A co-founder of Carlyle put it bluntly: "If you have his leadership skills and you can speak for the Crown Prince and you have the money, that is a very effective combination."
A great double act
Al-Mubarak and the Crown Prince are certainly some double act. And they've had a heady time as world oil prices have rocked and rolled to fill the coffers of a country with enviable health and education services - and no income tax. But, just to remind us that everyone gets splashed in a sea of debt, default and doubt, the bad news has now come to Abu Dhabi too.
The budgets are secret, planning is by decree, and there are not many press releases. But the cutbacks have started to hit some of Abu Dhabi's most public developments. The Guggenheim and Louvre developments have been delayed, the no-carbon city has been put on hold, and the government's key Tourism & Development Investment Company (which also builds hotels) is believed to have cut its 2011 budget by 28% to $3.6bn.
A slump of sorts
The ultra-rich Abu Dhabi has had its plans thrown by a collapse in private investment following the global slump. So, with the state itself having to fund a bigger share of the investment, some things have had to give and that even includes the National Museum named after its ruler.
The country which opened its property market to foreign buyers only in 2005 - three years after Dubai - is now feeling the pain of half-finished buildings, deferred investments and foregone prestige projects. Some real pain right now.
But there is another elephant in this home of 21st century economic promise: a slight lack of errr freedom. Abu Dhabi is much more religiously tolerant than the region's average, is investing impressively in health and education. And its citizens, just two generations away from desert living in Bedouin tents, pay little for urban housing and have high living standards. But there's no democracy.
The odd management upheaval at The National has raised eyebrows about editorial freedom. But that's nothing like the current, scarcely-reported trial of five campaigners for political reform who look like paying the price for daring to think that the Arab Spring might come to Abu Dhabi. The activists are being tried in the country's Supreme Court on charges of insulting the UAE rulers and "anti-state" crimes.
The trouble is that the defendants are not obvious firebrands. There have been no street demonstrations or posters, just an internet petition calling for constitutional change - led by a man who, even at the time of his arrest, was a legal adviser to the country's armed forces. Amnesty International and Human Rights Watch have been all over the case. And the no-appeal verdict (due by 27 November) may be pivotal. This is a case that will require all the creativity that is Abu Dhabi's modus operandi around the world. It certainly risks having a longer-term impact than any number of kissing-in-public prosecutions in Dubai.
But there are other straws in the wind. Go and see the riveting movie The Help about racial intolerance in the American south, based on the bestselling book. It has been co-produced by live-wire Abu Dhabi film company ImageNation.
To connect the dots, read this blogpost from a former UAE expat: "One of the reasons I stopped working in Abu Dhabi was because I had been hired by an institution that turned out to be involved in very abusive practices. I saw first hand the systemic oppression of maids, all of them from Africa, South East Asia and the Philippines. Why would ImageNation Abu Dhabi invest in a movie that advances the idea of civil rights? Why would this government-owned company back a film that perpetuates supposedly rancid notions about the social standing and lives of domestic workers, when this government itself has often been accused of not addressing the abuse that domestic workers in the Emirates face at the hands of the ruling classes?"
You can decide (as the blogger obviously did) that the movie investment was part of a Machiavellian plot to divert attention from cold reality and promote liberal support. Or you can see it as one of Abu Dhabi's media strategy risks.
A friendly face in the Middle East
I believe Abu Dhabi will ride these and many other waves as it builds its international reputation, not least in all things media. Not unlike China, Abu Dhabi may, over time, need to justify its governance to a wider world. But Abu Dhabi is already seen by millions of people (from football fans to tourists, investors and governments) as a friendly face from an unfriendly region. The brand is looking good: a blend, perhaps, of Switzerland, Singapore and Chile?
The country's media-sports-culture strategy could almost have been written by Rupert Murdoch during one of his fawning trips to the sheikhdom. It is simultaneously a way of building industry, tourism, inward investment and strong links especially with western countries where media is, well, so important. And just as Al Jazeera (from Qatar) has been enjoying fast-growing Western audiences after a decade of being identified too closely with those Bin Laden video messages, guess what Abu Dhabi is doing next? Sky News Arabia - with Rupert Murdoch's BSkyB, coming to a transponder near you.
Abu Dhabi is great at partnerships, diplomacy and making friends. Even anonymously, US and UK partners purr about the ability of Al-Mubarak et al to listen, learn - and invest for the longterm. In media, there are joint ventures with international giants like Warner Bros, Sony, Universal Music, National Geographic - and Rupert Murdoch. These deals increasingly focus on building domestic media, entertainment and information industries at the same time as investing internationally.
Even now, the growth rates for the Middle East media and entertainment industries are dizzy. They are set to almost double revenues to $26bn in the three years up to 2013. And you've guessed which country will account for the lion's share of that growth. Abu Dhabi is stretching its lead in the region and getting set to flex its muscles in the media world beyond.
Keeping it in the family
Abu Dhabi's careful strategy for its businesses has been to build strong supervisory boards exclusively of ruling family and friends, and then to recruit established CEOs from around the world. The expat execs learn to live with being on the outside. They are well-paid to run well-funded companies and train their successors. Short-term suits on the management floor; and long-term dish-dash robes in the boardroom. The movie business is being built by an American, the airline by an Aussie, and the media business by a Brit.
For all the volcanic economic times, Abu Dhabi still exudes calm reassurance. As Khaldoon Al-Mubarak says, "We are not going to be running away when the market is down." While this unusual city-state-business is pulling in its horns during the turbulence, we should now expect to see Abu Dhabi moving to capitalise on falling values in foreign companies.
Al-Mubarak has had discussions about new media investments in the UK and Australia, the two countries in which Etihad is heavily involved in sports sponsorship. Such investments must also have been on the agenda of ranging talks with Rupert Murdoch about: News Corp's decision to establish operations in Abu Dhabi; the launch of Sky News Arabia; co-funding movies; and perhaps also plans to develop the Wall Street Journal more strongly in the Middle East. And the eyes of Al-Mubarak and fellow Abu Dhabi power brokers have been on the ructions at News Corp. Any kind of break-up or divestment programme could create real opportunities for expansive "friendly" investment, the kind Abu Dhabi likes best.
A big Murdoch deal?
Perhaps we should expect Abu Dhabi investment in BSkyB or even in News Corp itself. Or, perhaps Murdoch and Al-Mubarak are hatching a way of helping News Corp divest its UK newspapers and so grab 100% of the Aussie-American's beloved BSkyB. There is plenty of room for conjecture around the ways in which Time Warner, News Corp, and Viacom might take Abu Dhabi oil cash in return for sharing in future expansion at home and internationally.
As elsewhere, you can believe that the combination of great minds, great wealth and long-term vision will ultimately be undone by the cry for democratic freedom. Or you can admire the energies and imagination of a country that is investing as futuristically in education as it is in international business.
You can either believe that this most admired city-state will go down in the flames set to destroy Assad's Syria. Or you can predict that, within a few years, Abu Dhabi will (among many other things) be one of the world's leading media operators. I, for one, believe the unrivalled combination of capital, ambition, brainpower and internationalism make Abu Dhabi the safest bet that ever came out of the Middle East. And good news for media too.