The Economist

...used to be my absolute favorite magazine. In Lebanon, I believe about 200 Economist publications wait patiently for me in one of my storage areas. Back in the day, as I stashed them away, I told myself that maybe 10 years down the road I'd pick them up again and get a glimpse into my past.

Today, however, is a different story. I read the economist at work because I must. The magazine, quite frankly has become too pedantic for my taste. Too much policy recommendations... too little analysis. Frankly, I think it is committing hubris - what sort of contributions, for example, can a magazine called The Economist make to enriching the debate on the Palestine-Israeli conflict or the genocide in Darfur?

Sometimes however, the magazine gets it right - and usually, it does so when it sticks to subjects close to its "core," if you will. Last week's edition contained two quintessential examples of such brilliance: their cover page, and a commentary about Dubai's stock exchange. Here's the cover page:

Of course, some would argue that this image has more to do with international relations or geopolitics than economics - but don't tell the Economist's editors that, because they probably won't let you escape from their lecturing until they convince you otherwise. Whatever the case, I just love this cover, and it deserves recognition!

The other coup de grace pulled by this edition of the Economist pertains to Dubai's stock exchange, and why it has experienced lack-luster performance despite its declared ambitions to grow into a truly global capital market. On that particular issue, the Economist writes,

To win a place in the top club of financial centres, Dubai must attract not just providers of capital but users, too. The bankers need companies that want to sell their shares and bonds in the region; fund managers want local companies to invest in; and private-equity partners need a pipeline of enticing ventures and the prospect of listing their companies after a few years. Dubai has sought to profit from the unprecedented mobility of markets, but without local demand for capital, that same mobility will start to count against it.

The trouble is that few local companies are ready for Dubai's capital markets. The Arab world includes plenty of sophisticated large investors but few modern companies. Long ago, the region's failure to develop joint-stock companies was one reason why it fell behind the West. Even today, financial transparency is weak and accounting is erratic. Most enterprises are family owned and, since they operate in protected markets, have no great need to raise capital, especially if it means exposing themselves to greater scrutiny.