The two weeks since Nov. 25, 2009 have seen Dubai getting more negative coverage in the world media than the scandal of Tiger Woods, the Copenhagen Climate Conference, and the killing of Somali ministers combined.

Why? The announcement by the Dubai World --- one of a score of companies under an $80bn Dubai Holdings, which is owned by the Government of Dubai --- asking its creditors to postpone upcoming repayments until May 2010.

The Arab governments are ultra secretive, therefore, the exact amount of the debt is not known but the most talked of figure is $59billion. A week ago, an anonymous official was quoted saying, "It is only $26bn" while the respected British newspaper, The Times, hinted at the figure as higher than $70billion.

No wonder, the Times' sister paper, the Sunday Times of Nov.29 --- both published in Dubai's Media City --- could not be seen in the country.

This Dubai Debt debacle or Dubai Crash has had a knock on effect on many stock market indexes and shares across the world.

In Uganda, I read about it in the New Vision of Dec.1 under the headline, "Shilling Stays Flat Against US Dollar."

The paper quoted the Standard Chartered Bank foreign exchange trader in Kampala, Dennis Mushabe, commenting that the market was "expected to watch closely the developments in Dubai with delayed payments or default by a leading property development firm; Dubai World [which was] likely to create a 'correction' in the emerging markets. 'Minus that, the shilling is expected to remain steady against the greenback, trading at the range of 1860/80.'"

So, here are some of the key words to guide this analysis by the Uganda Record to show how Ugandans can learn from the Arabs in the Gulf, who don't have democracy like us but they have moved far ahead of us.

The key words are: the multi-billion dollar debt; the federal arrangement of governance; and lack of 'democracy'.

What is Dubai?

On Nov.27, this question featured on the BBC website asked and answered by the UK's Durham University expert on the Gulf affairs, Christopher Davidson. His precise answer is enough in this analysis:

"Dubai does not have the enormous oil wealth enjoyed by its neighbours such as Abu Dhabi. Its main source of wealth has historically been as a port."

No wonder Dubai World, under which again lies Dubai Ports (DP World) is operating many world ports across the globe. In America, it caused a storm in 2006 while trying to take over six ports. The Americans feared "the Arab Muslims" running their ports.

I live in Sharjah, an Emirate that twins Dubai. However, it is not easy for many Ugandans to know which part of the world Sharjah is, or whether Sharjah is a country or a city –or a company. Many know Dubai as a country or a big city which is the centre of global trade.

To the uninitiated, Dubai is one of seven Emirates (fiefdoms ruled by Emirs or Sheikhs from royal families) that federated in December 1971 to make the United Arab Emirates (UAE).

The other Emirates go by the names of Abu Dhabi (the capital, which is slightly bigger than Masaka district, and an obscenely rich Emirate); Sharjah, Fujairah, Ras Al Khaimah, Ummul Quwain and Ajman.

What made Dubai is a story for another day --- soon. Has it crumbled? Not yet, and very unlikely.

The strength of federo

The debts of Dubai government's companies which put at risk liquidating some of the landmark properties such as the world's tallest building, Burj Dubai (due for opening on Jan.4, 2010; the world's first seven star hotel, Burj Al Arab (where many Ugandans remember Ugandan businessman Michael Ezra as said to have slept); the world's biggest mall, Dubai Mall among other icons of glamour and splendour is "only" $59billion.

The neighbouring Emirate of Abu Dhabi is sitting on a Sovereign Wealth Fund (SWF) of a reported $759billionn in cash. As one commentator put it, "that may be a tip of iceberg" of what Abu Dhabi really owns.

In effect, Abu Dhabi can easily bail out Dubai. Though the negotiations may still be ongoing, as one Abu Dhabi official is reported to have said; "we shall treat case by case," the former may not rescue the latter outrightly.

Some heads are rolling and authority on some assets may have to be ceded to Abu Dhabi.

If it was not for federo, Dubai would not have reached where it is, or if it had, and then stumbled, its sovereignty would have been written off for good.

It would have been only Abu Dhabi shining, just like we see Kampala, where the "only solution" for clipping Buganda's "humongous growth" than her neighbours who have "all contributed" to building the city is to constitutionally remove it from Buganda.

In short, under the federo arrangement, Ankole may borrow from Buganda or Bunyoro and both stay afloat. The Conservative Party's Ken Lukyamuzi is wont to defining federal arrangement of governance as "striking an agreement on how to share resources and authority thereof in given areas."

The people of Buganda are often chided for not "selling federo beyond their region" to attract support of other areas.

Interestingly, when oil was discovered in Bunyoro, many Banyoro (the people of Bunyoro) must have realised the importance of governance under federo system, but some are still expressing reservations because it is fronted by the Buganda's seat of governance, Mengo.

Of the six monarchical oil states that make up the Arabian Gulf, we select the UAE because of the several features it shares with Uganda.

Where Uganda has kingdoms, the UAE has Emirates. Otherwise, the six states that fall under the Gulf Corporation Council (GCC), an organisation set up in 1981 -in part to secure the specific interests- are all very rich. We are talking of Qatar, the Kingdom of Saudi Arabia; the Kingdom of Bahrain, Kuwait; the UAE and the Sultanate of Oman.

All of these, going by the Western definition of democracy, are undemocratic. And checking on the list of the Berlin based Transparency International's Corruption Perception Index, they're not corrupt.

In 1960s, their economies were as asparagus as Uganda's. Whilst they're "undemocratic" like many other banana republics and kingdoms, the Gulf countries are now donating to Uganda.

Thanks to their zero acceptance to corruption and, for the UAE, it has been also due to their federo arrangement of governance. No wonder, their National Day/Union Day which falls on Dec.2 still has meaning, unlike Uganda's flag independence.

END