As stock markets fall in the Middle East, what price democracy?
Long-term confidence in the Middle East and North Africa remains high despite unrest and tumbling share prices, say local lawyers – but opinions are divided over the true economic impact of democratic reform.
For some, free elections and a strong rule of law equate to long-term economic growth and investment opportunity. For others, stability is the key to steady transaction flow – and calls for democracy a potential distraction.
‘In the long term, I don’t think it is a good idea to buy stability at the expense of the rule of law, which I think is what may have been happening in some of these jurisdictions,’ says Jay Fortin, head of Al Tamimi & Company’s Qatar office. ‘Any time you create artificial stability by supporting a regime that doesn’t respect individual rights and fundamental property rights, in the long run that is not a good idea.’
The long-term foreign currency credit ratings of Egypt, Tunisia, Libya, Bahrain, Jordan, Oman and Lebanon have all suffered since unrest spread across the region. Fitch downgraded Tunisia’s rating to BBB- from BBB on 2 March due to continued concerns about political uncertainty. On 10 March, however, Standard & Poor’s removed Egypt from review for a downgrade of its BB rating, citing improved prospects for political transition.
In a blog on 11 March, Mark Mobius, Executive Chairman of Templeton Emerging Marketing Group, was adamant economic growth in the Middle East could recover and improve in the long-term ‘if governments implement the right policies’.
Mobius’ trust has no investments in the region, but the $1.1bn Templeton Emerging Frontier Markets Fund, which Mobius also runs, had 6.9 per cent of its assets invested in Egypt at the end of January. A further 7.1 per cent was invested in Qatar, 7.4 per cent in Saudi Arabia and six per cent in the United Arab Emirates – though nothing in Libya.
Mobius writes: ‘Increased freedom, increased democracy and decreased corruption are possible developments as a result of the political upheaval in the region, and these potential outcomes will indeed be positive. For these economies to truly thrive, the opportunities for small business growth and entrepreneurialism must be improved.’
Yet not all are convinced by the investment potential of freedom and accountability. Campbell Steedman, Norton Rose Senior Partner in the Middle East, admits that ‘change brings opportunity, because there is always someone looking to invest in that process of change’, but believes that stability takes priority.
‘In a market such as this, I think rule of law, from an investment perspective, has been historically overlooked if there is stability,’ he says. ‘Of the two, stability gives investors greater confidence than change. Though frequent change may improve the law slightly, it may be a destabilising factor for investors because they base their investment on predictability.’
Read the full article on the IBA website: http://tinyurl.com/IBAmiddle-east-commerce.
IBA to open Asia office in Seoul
The IBA is delighted to announce the opening of a new regional office in Seoul, South Korea. The office is due to open by the end of this year, and will be in addition to the regional offices in Latin America and the Middle East, in São Paulo, Brazil, and Dubai, United Arab Emirates.
The IBA’s administrative office is in London, United Kingdom. The Hague, The Netherlands, and Johannesburg, South Africa, are home to the IBA’s specialist centres: the International Criminal Court Monitoring and Outreach Programme and the Southern Africa Litigation Centre.
Akira Kawamura, IBA President, said: ‘I am delighted that the IBA is opening an office in Seoul. This action is consistent with our philosophy, as the global voice of the legal profession, to bring together law experts on a regional and global basis. The new IBA Asia Office will be an important addition to our existing international offices and will fortify our commitment to the legal profession in the region.’
IBA Middle East Office: ‘Bringing Women Lawyers Together’
The life of a lawyer involves many challenges. This is especially true for women lawyers, who often have to cope with a demanding professional life, while also facing the uphill struggle for parity with male colleagues.
The IBA Middle East Office is planning to offer a series of events for women in the law over the coming months, as part of a new ‘Bringing Women Lawyers Together’ series. The first of these was held on 20 March 2011 at the Al Majlis, Capitol Club, DIFC, Dubai, UAE. The lunchtime discussion was led by Luma Saqqaf, founder of Choice Life Coaching and a former partner and global head of Islamic finance at Linklaters in Dubai.
Mark Stephens, lawyer of WikiLeaks founder Julian Assange, on media ethics and extradition
Julian Assange is a journalist committed to the truth, who has been unfairly portrayed by the media and unjustly smeared by a political conspiracy between the American and Swedish authorites, according to his lawyer, Mark Stephens.
Speaking to the IBA on 1 February, days before his client’s extradition hearing, Stephens referred to the Swedish investigation into rape allegations against his client as a ‘persecution’. He also claimed the Swedish authorities had struck a deal with the Americans for Assange’s extradition.
Assange lost the case and has been ordered to return to Sweden to face questioning on the allegations. He is appealing the ruling.
Stephens stressed that his previous comment: ‘a honey-trap has been sprung’, made after the accusations first came to light, was not designed to cast doubt on the women’s stories.
‘What it was and what most sensible people looking at this believe it is, is a holding charge,’ he told the IBA. ‘We have heard from Sweden and Washington that a deal has been cut between the Swedes and the Americans that, in the event he goes to Sweden, they will apply for his extradition to America and Sweden will drop the allegations of rape.
‘It is a very worrying situation if a back-door deal is being done that we are not seeing here, that is not being revealed to the British courts.’
When asked what evidence he had for this supposition, Stephens said it was ‘widely known and widely discussed’ in the legal–diplomatic community in Sweden before Christmas.
Despite Stephens’ fears regarding extradition, he was adamant that Assange would be safe from prosecution in the United States because he had ‘broken no law’.
‘He is a journalist, somebody who is the conveyor of information. He wasn’t the leaker or the hacker. He didn’t procure the information. For years newspapers have had anonymous drop boxes where you put brown envelopes. In the modern era what happens is journalists receive CDs full of data. We’re in an era of data journalism.’
Read the full article on the IBA website: tinyurl.com/IBA-mark-stephens.
Major IBA projects
Major LPD and PPID activities and projects undertaken or initiated over the last 12 months can now be viewed on the IBA website (www.ibanet.org). Examples include:
Anti-corruption training for seniorlevel private practitioners of top law firms;
The Corporate and M&A Law Committee’s production of a squeezeout guide;
The Insurance Committee’s comparative study of the legal and regulatory methodologies and practical requirements applicable to the transfer of insurance;
The Mining Law Committee’s work on the Model Mining Development Agreement (MMDA);
The Anti-Money Laundering Legislation Implementation Group’s launching of a website at www.antimoneylaundering.org;
The establishment of the IBA Student Committee; and
The publication of books on banking, international franchising and mediation.
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