Basketballer proves it's all about the numbers game

Bill Bradley's almost innate feeling for his position on the court and the advantages it gave him in basketball, then later as a politician, show the importance of knowing where you are.

Bill Bradley, right (United States). The former New York Knicks basketball player went on to become a US senator in the upper house of the country's bicameral legislature.

In A Sense of Where You Are, John McPhee's Pulitzer Prize-winning book about the early basketball career of Bill Bradley, the author describes a man who cultivated an almost innate feeling for his position on the court. Bradley knew where his teammates were and when they were open for a pass. He watched his opponents, anticipated their movements and defended aggressively as he raced down the court on a break. He also had a great jump shot.

McPhee's book says a lot about Bradley, who went on to be a Democratic US senator. It also says a lot about sports and a lot about the ways in which sport can serve as a lens to focus on the broader sphere of life. But its main point - and the title of the book - is to show how fundamental it is in any context, whether it's sports, business, daily life or speeding down Sheikh Zayed Road on a Thursday night, to know where you are.

In business, the principle of knowing where you are is pretty basic. If you're thinking about opening a sandwich shop, it helps to know whether there are eight other similar shops in the area. If you're about to make an investment in a company, it helps if you're clear on the economic prospects for the country, how markets have performed and what returns you should expect. Knowing the lay of the land is also essential for governments considering where to best allocate public funds. Building a new road might make sense but only if you know people are going to use it.

Economists, analysts and government agencies in the UAE routinely produce statistics that aim to inform us about the present state of affairs. Surveys may tell us we've racked up too much credit card debt, or that most people don't save, or that business leaders see brighter futures but are less enthused about the recent past. Government statistics bodies try to describe the composition of the country's labour force, its population, the incidence of disease and the number of legal cases going through the courts. Analysts estimate earnings for companies and make their economic growth predictions.

Those are the kinds of ways in which people start to build a sense of where they are. In the UAE, we're still some distance from really knowing where we are. One reader recently wrote to me to claim Abu Dhabi was in recession despite a statistician's assertion to the contrary in an article I wrote. A recession is typically defined as two consecutive quarters of contraction in real GDP. The Statistics Centre Abu Dhabi (SCAD), the emirate's official data body, does not produce real GDP figures, or GDP adjusted for changes in the prices of imports and exports as well as returns on foreign investments. It only produces raw nominal GDP numbers, which showed an 18 per cent decline between 2008 and last year.

Nevertheless, the statistics centre is working on releasing real GDP numbers and may do so as early as next year. In the absence of that information, though, we lack the tools for a more nuanced take on the economy. We simply don't know where we are yet, even if anecdotal evidence seems to point one way or the other. And that's the basic problem with a relative dearth of statistics such as exists in the UAE. People have to make decisions under a considerably greater degree of uncertainty than if they knew exactly what the status quo was.

And as speculation fills the gap left by the absence of accurate numbers, the picture of where things stand gets increasingly skewed. More weight is given to independent surveys of business and investor confidence, as well as to the estimates of analysts at the big banks whose clients can't go anywhere without a sense of where they are. Those surveys and projections aren't necessarily wrong. They're just not quite as good as cold, hard data.

By and large, though, the statistics about the country are getting better and more numerous. The Dubai Statistics Centre this year released its most comprehensive report yet on the emirate's labour force, showing employment remains concentrated in the flagging construction sector. SCAD also recently released its statistical yearbook for this year, divulging more figures about the make-up of the emirate's economy and society than had ever been produced before.

Regular releases of data by the SCAD are on the way, which should keep people better informed about changes in the emirate's society and economy. Having a sense of where you are wasn't too important before the financial crisis, when the central conundrum for businessmen in the UAE wasn't so much which investments would profit and which would lose money but rather which stood to gain the most. With today's lower economic growth, coupled with a big dollop of uncertainty about the future, businesses and investors are demanding to know more before they take risks. With increasingly limited resources, they must be more careful.

As a result, investigating and describing where we are is an urgent priority. The verdict is still out but it's one that statistics bodies in Dubai, Abu Dhabi and at the Federal level appear to be taking seriously. [e-mail]