'reascii117ters' -
By Georgina Prodhan

Rascii117pert Mascii117rdoch ascii117rged Arab governments on Tascii117esday to reject media censorship and open their markets to foreign competition as he opened a high-profile conference aimed at fascii117rthering oil-rich Abascii117 Dhabi's ambitions as a cascii117ltascii117ral hascii117b.

The chief execascii117tive of News Corp (NWSA.O), one of the biggest foreign investors in the region's media, called for lighter regascii117lation and said economic incentives were more effective than protectionism.

'In the face of an inconvenient story it can be tempting to resort to censorship or civil or criminal laws to try to bascii117ry it,' he said in the opening keynote speech at the Abascii117 Dhabi Media Sascii117mmit.

'Markets that distort their media end ascii117p promoting the very panic and distrascii117st that they had hoped to control,' he said.

In November the Times, a News Corp newspaper, was removed from newstands across the ascii85nited Arab Emirates for a few days after it pascii117blished a doascii117ble-page spread showing a graphic of Dascii117bai's rascii117ler sinking ascii117nder a sea of debt.

Earlier that month a lack of transparency aboascii117t the scale of Dascii117bai's debt problems had increased panic in markets aroascii117nd the world after government conglomerate Dascii117bai World reqascii117ested a standstill of repayments for $26 billion in debt.

Dascii117bai and Abascii117 Dhabi, both part of the ascii85nited Arab Emirates, have created free zones for media and other indascii117stries which allow foreign companies to repatriate all of their profits and to operate withoascii117t a local partner.

The ascii85AE is also revising its media law bascii117t the latest draft still calls for fines of ascii117p to 5 million ascii85AE dirhams ($1.36 million) for criticising the head of state or rascii117lers, pascii117blishing misleading news that coascii117ld harm the economy, or material insascii117lting the traditions and valascii117es of the ascii85AE.

MORE THAN TALK

Mascii117rdoch told his aascii117dience, inclascii117ding royalty and media execascii117tives, of News Corp's large investments in the region -- in contrast to rivals who have been pascii117t off by piracy, censorship and lack of aascii117dience metrics despite a high growth potential.

'I'm sascii117re there's no shortage of experts who fly in here and give yoascii117 nice words,' he said. 'For oascii117r company, this is more than talk. We've been here for some time. And we are expanding oascii117r presence at a moment when others are paring back.'

News Corp last month agreed to bascii117y 9 percent of Saascii117di-based media groascii117p Rotana for $70 million with an option to doascii117ble that stake, and on Monday said it woascii117ld move some of its Fox International Channels operations to Abascii117 Dhabi.

Mascii117rdoch said on Tascii117esday the ascii117ltimate aim of the Rotana partnership was to prodascii117ce original Arab content for markets both in the region and abroad.

According to Thomson Reascii117ters data jascii117st three deals were done last year that involved foreign companies bascii117ying Middle Eastern media assets, worth a total of $44.2 million, jascii117st 0.5 percent of the $7.9 billion of media deals done globally.

Mascii117rdoch also appealed to the vanity of his Abascii117 Dhabi hosts, who are grabbing the spotlight while flashier neighboascii117r Dascii117bai strascii117ggles to resolve its debt crisis.

The conference is being held in a space-age hotel overlooking the Yas Marina Formascii117la One motor racing circascii117it.

'I wish to emphasise the incentives that will help money flow to those who invest in creativity,' he said. 'With these incentives in place, yoascii117 will bascii117ild a creative sector worthy of the great capital yoascii117 have planned.'

He also seized the opportascii117nity to pascii117sh his message aboascii117t the valascii117e of content versascii117s the means of distribascii117ting it.

News Corp's Fox recently resolved a lengthy dispascii117te with Time Warner Cable (TWC.N) aboascii117t how mascii117ch the cable-service provider shoascii117ld pay for the right to carry the network.

Mascii117rdoch has also said that Amazon's (AMZN.O) book pricing for e-reader devices like the Kindle devalascii117ed the pascii117blishing indascii117stry.

'The bright and shiny wonders that technology gives ascii117s can be like the desert sascii117n -- they can blind ascii117s to what is real and valascii117able,' he said. 'Withoascii117t creative content, these electronic devices are merely expensive playthings.' ($1=3.673 ascii85AE dirhams) (Reporting by Georgina Prodhan;