The need for clear communications – Saudi’s drive to balance the books

lazy-saudis

Saudi’s social media scene has been on fire over the past week due to a number of controversial issues regarding government officials. This is a news story from the Times on a comment made by a minister regarding Saudi inefficiency.

This week has been an interesting one for Social Media watchers in the Kingdom. Thousands of Saudi nationals have taken part in online campaigns/used popular hashtags relating to three high-level government officials who have either made controversial statements or who have been accused of using their influence on behalf of family members (you can see media coverage on two of the issues from Saudi Gazette here and Arab News here). The campaigns follow a decision a month ago to cut benefits for Saudi government employees. The decree, which was made in light of low oil prices and a rising Saudi budget deficit, is biting hard; this week Reuters reported that the Saudi central bank had asked retail banks to reschedule property loans for those affected by the cuts.

One of the campaigns began after a government document was leaked online, with personal details including name, position and salary. It’s only logical to assume that many government officials in the Kingdom are angry at seeing their pay cheques shrink; they’ll become even more angry when they see what they feel to be others not doing the same. In this environment, it wouldn’t be hard to also imagine officials being able to take a picture via their smartphone of a document which may reveal an embarrassing situation and then sharing it via social media (or, more likely, dark social).

I had the pleasure of listening to a senior Saudi journalist this week. He made a pertinent point when he said, “We can spend billions on consultants. We could have spent millions on a PR agency to convey the message behind the cuts and why they were necessary.”

In times of hardship, good communications becomes even more important. Saudi’s citizens need to understand the logic behind government decisions. They need to feel that they are engaged and are part of the debate. And they need to see government’s leadership doing just that, namely leading by example (as I’ve said before, actions are much more powerful than words in shaping perception).

We may see more issues coming to light in the Kingdom over the coming months, and more skeletons being revealed in government closets. When it comes to the government’s engagement and communication with its people, the transparency, clarity and consistency (or lack of) will either help get many Saudi citizens on board, or it may alienate them further. I for one hope it’s the former, rather than the latter.

 

The importance of reputation – the examples of Mubadala and IPIC


The concept of reputation, which can be defined as how much stakeholders trust organizations, is often difficult to measure. It’s an intangible, an idea which is often best understood at the most inappropriate time (in other words, during a crisis).

In Abu Dhabi last week news broke about a merger between two government-owned investment vehicles. The deal between Mubadala and IPIC would create a combined fund worth US$135 billion according to Reuters. At a time of budget tightening due to low oil prices, the merger promises to bring about significant cost savings according to media reports.

Reuters had another interesting take on the merger, which I’ll copy from the article.

IPIC is also in the midst of a row with 1MDB. The Abu Dhabi fund has asked a London court to arbitrate in a dispute with the Malaysian state fund over a debt restructuring in which IPIC is claiming about $6.5 billion.

While unlikely to impact these proceedings, the sovereign wealth fund analyst said the scandal had undermined IPIC’s reputation and so a tie-up with Mubadala, which is considered one of the better-run state investment funds in the region, would be beneficial.

The analyst that Reuters spoke to argued that IPIC’s reputation was hit by the issue in Malaysia. In addition, the departure of its previous CEO and dealings in its investments such as Arabtec have also contributed to reputation all issues. In contrast, Mubadala has a strong brand, helped in part to the leadership of its management and financial transparency.

It’s not only communicators who need to understand that every action will impact organizational reputation (leaders of listed companies know all too well what public sentiment can do to the stock price, and their jobs). The Mubadala-IPIC merger is an example of how much both good and not so good reputations can impact the business.

What’s in a word? Coverage of Saudi oil minister Ali Al-Naimi’s departure by newswire media and social media reactions

Another week passes by and we witness more remarkable changes in Saudi Arabia. Over the past weekend Saudi King Salman announced a raft of changes which impacted the Kingdom’s government structure as well as those who were tasked with leading the changes.

The headline grabber, in more ways than one, was the departure of the longstanding oil minister Ali Al-Naimi. Al-Naimi had been an ever-present in government, serving as the oil minister for just over two decades. There had long been talk of Ali Al-Naimi, who is now 80, stepping down. When the time came, it was still a surprise to many.

Rather than talk about the man, who is a legend in the oil industry and is held in high regard by Saudis, I wanted to briefly look at the headlines from the AFP, Bloomberg, Reuters and the Wall Street Journal.

AFP used the word ‘sacked’ in their headline, but then reverted to replaced in the copy. Interestingly, the piece which was on the AFP site is no longer present. The below is from the cached version on Google.

AFP Naimi coverage

Bloomberg, which has scored a number of scoops in the Kingdom recently with its coverage of Deputy Crown Prince Mohammed Bin Salman, went for the below title which . The news piece was diplomatic in terms of the wording used about All Al-Naimi’s departure, including the use of the verb ‘replaced’ to describe the change in ministers (Ali Al-Naimi’s successor is the Chairman of Saudi Aramco Khalid Al-Falih).

Bloomberg Coverage

Reuters also focused on the incoming minister and used the word replaced.

Reuters coverage

Last but not least, Wall Street Journal initially opted for the word ‘fired’ in their title. After a firestorm on Twitter, including attacks against its Riyadh-based Saudi correspondent (and Saudi national) Ahmed Al-Omran, the title was changed from fired to dismissed (the word fired is still in the url as you can see from the below).

WSJ coverage

The argument that the WSJ team put forward is that the wording was correct – one is appointed to a minister’s post and then one is fired. Fired effectively means the same as replaced, dismissed or sacked. The nuance was lost on many who took offence and reached out directly to Ahmed via Twitter to complain. In a rare display of understanding, the WSJ changed the title. Ahmed Al-Omran also apologized for any offense taken.

In a region where the international media has rarely been given much attention by the national population, the Ali Al-Naimi story underlined a possible change in attitudes brought about by social media and the need to communicate what Gulf nationals feel is a correct story or narrative to the outside world. For these reasons, this will not be the last time that the foreign media comes under scrutiny for the wording they use to describe what is happening on the ground here in the Gulf.

Does the Bloomberg deal with ADGM impact its impartiality or not?

Does this deal with ADGM (pictured) mean something for Bloomberg's journalistic impartiality in the region?

Does this deal with ADGM (pictured) mean something for Bloomberg’s journalistic impartiality in the region?

The issue of impartiality is one which is seldom discussed in the Middle East – this probably isn’t a surprise when considering that much of the region’s press is owned by some form of government authority. However, when it comes to international media the issue of impartiality is a different story. Journalists from abroad, news wires in particular, often have to navigate the challenging waters of what to report on and how to report. They know that the consequences of their work can be dire, and I have known several brave journalists who have been asked to leave the country they were based in. For me, they’re often the most trusted source of information.

The deal between Bloomberg and Abu Dhabi Global Market (ADGM), the aspiring, brand new international financial centre located in the heart of the UAE’s capital city, was announced last week. The deal, which had been in the works for some time, will include the following details as reported by The National:

The partnership will involve major media initiatives from a new office on ADGM’s Al Maryah Island base, including a dedicated digital platform, new programming and an annual conference of global business leaders in the capital.

Tracy Alloway, Bloomberg’s executive editor of markets, based in New York, and a former Financial Times US correspondent, will lead the ADGM editorial operation.

The TV centrepiece of the new initiative will be a daily global markets programme, from new studios in the Dubai International Financial Centre, which will include editorial content from Ms Alloway broadcast live from ADGM.

A new “anchor” broadcaster will soon be named to present the show, which will seek to bridge the gap between Asian and European markets in Bloomberg’s global network.

There will also be a dedicated Middle East edition of the Bloomberg website, with original input from its 80-strong editorial team, headquartered in Dubai.

I heard about the deal some time back, and what was said to me was that ADGM would be financially supporting Bloomberg’s news organization in Abu Dhabi. It’s a great deal for ADGM, which was recently set up and which has aspirations to become a global hub for financial trading. Alongside the likes of Reuters and Dow Jones, Bloomberg is a global name when it comes to business reporting.

However, is impartiality impacted when money is involved? How will Bloomberg report bad news from ADGM? And how would ADGM respond? All of us who have worked in the media industry in the region know stories of how publishers will behave differently for advertisers, often not reporting negative pieces and instead pushing out good news.

Bloomberg is a different proposition to a local publication; its reporters do write everything, warts and all. Similarly, there’s been a major push to make ADGM a global player on the financial stage, with experienced executives brought in from Singapore and London.

For the sake of argument, let’s address the elephant in the room. As a matter of principle, should Bloomberg have said yes to the deal? Even if no reporting lines are broken, does the deal imply that there could be a measure of bias? Time will tell and each and every organization has its ups and downs. I’m looking forward to seeing Bloomberg’s new setup in ADGM and what it means for journalism and impartiality in the Middle East.

Baker & McKenzie Habib Al Mulla, Asdaa and OSN and when the client apologized before the agency

Have you ever heard of a client apologizing a week before the agency sends out a correction? (image source: http://www.tumblr.com)

There are few surprises left for veterans of the media, marketing and communications industry in the Middle East. However, every now and then something pops up that can raise a smile or cause a roll of the eyes.

One such story is the unusual case of the UAE-based Baker & McKenzie Habib Al Mulla. Through its public relations agency Asdaa, the law firm put out a release entitled ‘Mergers and acquisitions boom in Middle East’, which laid out the most notable M&A activity in 2014 and Baker & McKenzie Habib Al Mulla’s predictions that cross-border mergers and acquisitions would pick up pace in 2015. The original story is still online here at Khaleej Times.

All well and good we all may think. Except, there was a mistake in the release. And it wasn’t a simple typo or grammatical error. No, it was much more serious. Have a look at the below paragraph.

The Media and Entertainment sector was the largest recipient of inbound M&A activity in terms of value with almost 36 per cent share. This was driven by the $3.2 billion sale of Orbit Showtime Network Co, a Dubai-based owner and operator of TV station, to an undisclosed US private equity firm. This is also the largest deal since 2010.

There was a problem on the above information about OSN’s sale. It never happened. Dubai-based business monthly Trends Middle East was the first publication to point this glaring error out in a blog post. Trends’ editorial team did what any good bunch of journalists should do, and they verified the facts contained in the release. Unfortunately, a number of other publications didn’t (the list is on the Trends website).

The Trends team then reached out to all the parties involved, including Baker & McKenzie Habib Al Mulla, Asdaa and OSN. OSN issued a statement denying the information in the release. Baker & McKenzie Habib Al Mulla also put out a statement to Trends which you can read below.

“Baker & McKenzie Habib Al Mulla would like to clarify that our recent analysis regarding M&A activity in the Middle East was based on data from Thomson ONE Analytics, part of Thomson Reuters. “The data comprised announced deals as of December 14, 2014, including the proposed sale of OSN. Thomson Reuters’ criteria for announced deals include deals that are completed, intended, partially completed, pending and unconditional. We apologize for any unintended misunderstanding regarding the status of OSN’s proposed sale.”

However, despite reaching out to Trends and two days after the press release was issued, Asdaa hadn’t gotten back to Trends with a clarification (as per Trends’ own website). A statement was sent out to the media by Asdaa nine days after the incorrect release was published, and a week after Asdaa’s client had gotten back to Trends with the correction email. The correct as of January 6th is below.

“Baker & McKenzie Habib Al Mulla would like to clarify that our recent analysis regarding M&A activity in the Middle East, issued on 23 December 2014, was based on data from Thomson ONE Analytics, part of Thomson Reuters. The data comprised deals announced during 2014, including the reported approach by an un-named US private equity firm for the acquisition of OSN, which did not proceed. Please note the reference to the sale of OSN was incorrect.

Although an offer was announced in July 2014, the offer was rejected by OSN’s shareholders in August 2014 and OSN continues to be wholly owned by Panther Media Group Limited. We apologise for any unintended misunderstanding regarding the status of OSN’s ownership.”

I have to ask, is this the first time a law firm has apologized before its agency? It’s normally the communications and public relations firms who advocate for a quick and speedy apology. When it seems that a quick and speedy resolution could have brought this to a close, especially in a social media age where the recommended response time is literally 15 minutes, why did the client say sorry before the agency? If the communications industry is to consult and advise clients in a trusted manner, we really have to do better. Let’s hope that those involved have processes in place to both fact-check and, when something goes wrong, get back to media in as short an amount of time as possible.

What are your thoughts?

How long do we have to wait for competition in the UAE’s telco space?

Sometimes you have to wonder if anyone at Du, Etisalat or the TRA is listening when it comes to doing a deal on market liberalization (image source: http://www.healthyblackmen.org)

As the saying goes, everything comes to those who wait. If you’re waiting for competition in the UAE’s telco space you may have a couple more years of waiting. Reuters published a story today detailing how despite talks beginning in September 2009, Du and Etisalat have yet to agree terms for network sharing. The best bits from the Reuters piece are below.

The United Arab Emirates’ two telecom operators, Etisalat and du, remain at loggerheads over a deal to allow them to compete on fixed line services nearly four years after negotiations began.

Du and Etisalat already offer fixed-line, broadband and television packages in the UAE, but not in the same districts, with du confined to the newer areas of Dubai.

The two companies, which are both majority-owned by government institutions, started technology trials that would allow network sharing more than two years ago and an agreement was slated to be concluded by 2011-end.

But a report from the Telecommunications Regulatory Authority (TRA) this week shows the companies cannot agree on the extent of so-called bitstream access, which would enable one operator to permit the other to use its fixed network, or a method to determine the fees for allowing such access.

“The two licensees are still negotiating,” states the regulator’s report, which was published on its website.
“Bitstream access could have a significant impact on competition.”

The TRA states it will “impose a requirement to offer bitstream access products for both residential and business markets,” reiterating a commitment it made in a 2010 policy document.

Further liberalisation has proved fraught – mobile number portability, which would allow customers to retain their phone number when switching provider, has yet to be introduced despite the regulator previously stating this would be available by mid-2008.

Now, almost four years later ad yet we’re still nowhere near having any competition in the telecoms space in the UAE. The question is when is the UAE’s Telecoms Regulatory Authority going to step up and force the two telcos to agree a deal?

Across the region, we have some powerful regulators who have forced incumbent operators into making changes (Bahrain’s TRA is a great example of how a regulator should act on behalf of a country’s consumers). And yet, despite repeated promises from the TRA the UAE’s public is still waiting for a raft of measures that will liberalize the telecommunications sector, reduce costs and, hopefully, raise the quality of the country’s telecommunication services.

Just remember, if you’re waiting for the respective parties to agree and benefit from market liberalisation in the UAE’s telco sector it’s probably best not to hold your breath based on Du’s and Etisalat’s track record.

Saudi-based journalists to follow – Reem Shamseddine

Following on from a recent post about one of my favourite journalists who covers issues related to the Kingdom, here’s a second piece for those interested in the media world of Saudi Arabia.

There are few newswires in the Kingdom (the most prominent are Bloomberg, Dow Jones, and Reuters) and the best established is Reuters. The venerable London-based news agency was the first to set up shop in Riyadh and has since expanded its bureaus to Jeddah and Al-Khobar.

Reuters has some stellar reporters working in and covering Saudi Arabia. For me, their star is the person who has been serving Reuters the longest in Saudi Arabia. Reem Shamseddine is Reuter’s main correspondent for Saudi Arabia’s energy sector and it’s a position that she has held for almost four years. During that time she’s broken every major energy story in Saudi Arabia, and in the process covering giants such as Aramco, SABIC, Dow Chemicals, Maaden etc…

Despite the size of the oil and gas industry and affiliated sectors in Saudi Arabia (the Kingdom is one of the largest oil exporters worldwide), there’s no more challenging assignment than trying to break through the myriad number of embedded public relations professionals to actually get to and report the actual story. Reem has consistently shown an ability to develop contacts and to understand the issues that are central to Saudi Arabia’s energy industry.

Reem is the type of journalist who will be thoroughly prepared for an interview and will question the interviewee on every subject. She’ll quite literally leave no stone unturned in her search for a story or piece of information.

If you’re eager to read more about Reem’s work, have a look at these articles online including interviews with the Deputy Minister for Electricity and Water and the Chairman of Saudi Electricity Company Dr Saleh Al-Awaji, an overview of Saudi Arabia’s mining sector, and of course numerous pieces with Aramco including this one on its production plans.

If you’re working in the energy or industrial sector there are a handful of journalists that you must know and deal with. Reem Shamseddine should be at the top of that list. Reem can be reached by email at Reem.Shamseddine(at)thomsonreuters.com and at Twitter on the handle @shamseddine_r

Reem Shamseddine has met with and interviewed the good and the great of Saudi Arabia’s oil and gas industry and energy sector such as the Minister for Oil Ali Al-Naimi