23 December, 2011

To live a mile high, you’ve got to be rich as a sheikh

Melbourne Herald Sun, Friday December 23, 2001

How would you fancy living in the sky, a mile above the street? That's the plan for the Mile High Tower, due for completion in 2013. It will dwarf the current tallest world record holder, the kilometre-high Burj Khalifa opened in 2010.

Now that's an interesting building - it started life as the Grollo Tower, remember that? When the burghers of Melbourne decided that we don't really want the world's tallest building in our front yard, the concept moved north.

But this column is not about buildings. It's about money and power. You see both these buildings are in a place we know lots about, and nothing about. Arabia and the gulf states.

The mile-high Kingdom Tower (right)is being built just north of Jeddah, on the Red Sea coast of Saudi Arabia. The Burj Khalifa is in Dubai, on the Persian Gulf. They are both reflections of the huge wealth and power of this region.

Who are the richest people in the world? Well at $80,000 a head the Qataris come out well ahead. And that's in a country one-sixth the size of Tasmania.

They could teach us a thing or two about sovereign wealth funds, too. Like us they have made vast incomes out of their resources. The Qatar Investment Authority fund is worth $70 billion. For a population of native citizens of 250,000. The other million and a half non-citizens do well, but they are essentially guest workers.

But what is the use of all this wealth if it does not buy you influence? Qatar showed the world how this is done when Sheikh Hamad bin Khalifa Al-Thani, the Emir, set up Al Jazeera in 1996.

This Middle Eastern version of CNN has rapidly become a major news force world-wide, by maintaining high standards of journalism and relatively unbiased coverage of events. Qatar may be just a thumbnail on the world map, but it has a loud and insistent voice.

The lesson of the value of media - and opportunity of investment - has not been lost. Saudi Prince Al-Waleed bin Talal took his own plunge into social media this week by investing $300 million for a "strategic stake" in Twitter. That's an awful lot of tweets.

There's another major sale coming up next year that will have the sheikhs queuing down the corridors. Facebook is set to launch its initial public offering (IPO) and speculation on the funds gathered runs as high as $10 billion.

Remember that scene in the movie The Social Network, the story about the launch of Facebook? Mark Zuckerberg is telling his growing staff that part of their pay will be in share options, and that in time these will be worth a fortune.

Well that time has come, and the market is estimating the sale will create at least a thousand instant millionaires. The venerable founder and CEO will be all of 27 years of age.

Now don't you wish you studied harder in your computer classes?

Modern technology - the internet, smartphones, and social media that they carry - have made a profound difference to the rulers of the world, and we see its striking affects in the middle east. They have made life very hard for despots, always the world is watching, as they discovered in the Arab Spring.

Now the people and businesses of the Middle East have come to a fork in the road. Do they follow the mega-rich investors and ride sky-high into a prosperous future, facing the fact that social media will make them transparent? Or will they follow the road of the fundamentalists and lock themselves back in the middle ages?


No comments: