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The global financial crisis has had an impact on the Arab Gulf and its economies, some believe that the decline in property values and stock in Dubai is a result of the crisis, while others are saying that the dispute that is taking place involving two large companies in the Eastern province of Saudi Arabia is also an upshot of this crisis.

Personally, I do not believe that the dispute between the two companies – a dispute that is ongoing and intensifying – can be categorized as an “example” of the consequences of the global financial crisis. This is because there are clear signs and indications that confirm the large flaw in granting one party [involved in the afore-mentioned issue] the authority to carry out large financial operations amidst this murky climate.

This issue does not require astrologists or psychics in order to be resolved, all that is needed to reach a just and logical outcome is for the evidence to be reviewed. Information [on this issue] continued to be reported over the past days and news of the debts that the two companies owe to certain Gulf banks was uncovered. News was also revealed that one of the companies was involved in ongoing negotiations to sell some of its assets in Saudi Arabia.

In the midst of these events, there were disturbing signs that without a doubt increase the seriousness of the situation and give this issue unexpected dramatic dimensions. More evidence was uncovered that confirm that this issue is more than a mere commercial dispute that can be settled by compromise or reconciliation. This case has other dimensions, and the decline in the relations [between the two companies] has become extremely serious.

The Bahrain Monetary Agency [BMA] announced that it would carry out an extensive investigation into this controversial case as it also involves banking issues inside Bahrain. In fact Bahrain was the original source of the flood of news that has emerged with regards to this issue. The BMA deserves praise for taking this step and moving away from a state of inactivity and the clinging to the illusion of public relations and mediation that does nothing more than waste time and further exacerbate the issue, increasing the [potential] number of people who are affected.

The BMA has implicitly recognition that the issue [that it will investigate] is more than a mere financial dispute, and that this has further dimensions that require investigation on a different level in order for this case to be put back on the right track. We hope that other financial agencies follow the direction of the BMA with regards to this. The Saudi Capital Market Authority [CMA] has also issued strict administrative decisions in order to restore discipline to the Saudi market, and other financial institutions must follow up on this. When the dust settles, and this issue is clarified it will be easy for correct decisions to be taken. Today, many are keeping a watchful eye on this case as its outcome will clarify and resolve many more issues.

Hussein Shobokshi

Hussein Shobokshi

Hussein Shobokshi is a businessman and prominent columnist. Mr. Shobokshi hosts the weekly current affairs program Al-Takreer on Al-Arabiya, and in 1995 he was chosen as one of the "Global Leaders for Tomorrow" by the World Economic Forum. He received his BA in Political Science and Management from the University of Tulsa.

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