Rupert Murdoch has called on Gulf states to open up their markets to global competition from companies such as his own News Corporation by cutting regulation and ending censorship.

In a keynote speech expounding the value of media content for its ability to contribute to global economic growth at the inaugural Abu Dhabi Media Summit, Murdoch said light-touch regulation would help the oil-rich Arab city state build an effective creative industry.

"A creative sector flourishes best in societies where governments intervene with a light hand," he told an audience of 550 delegates at the inaugural summit.

Echoing a theme that is likely to be repeated at other events during the two-day summit, Murdoch promoted the idea of paying for content in a digital age in which much is expected to be free. "In many parts of the world, we are finding that the best way to finance quality content is by having a balance of advertising and subscription revenue," he said.

Murdoch, the owner of the Times and the Sun in the UK as well as the Wall Street Journal, New York Post and Fox in the US, also made a call for press freedom in a country criticised by others for its censorship. "With this increased global attention comes the occasional inconvenient or unwelcome story. Again, I speak from some personal experience. Throughout my life, I have endured my share of blistering newspaper attacks … unflattering television coverage … and books that grossly distort my views or my businesses or both. I have learned that this kind of coverage is a fact of life in a modern media society. I have learned too that it is the price one pays for success.

"For a nation, the stakes are even higher. In face of an inconvenient story, it can be tempting to resort to censorship or civil or criminal laws to try to bury it. This is not only a problem here: in France a criminal defamation law remains in place. In the long run, this is counterproductive. Markets that distort their media end up promoting the very panic and distrust that they had hoped to control."

The conference, with delegates including Maurice Lévy of Publicis, Tim Armstrong of AOL and Eric Schmidt of Google as well as James Murdoch, head of News Corp outside the US, and the Daily Mirror's editor, Richard Wallace, was opened by Sheikh Mohammed Khalaf al-Mazrouei, the chairman of the government-owned Abu Dhabi Media Company. The country, which has significant oil resources unlike its indebted neighbour Dubai, is keen to diversify into creative and cultural industries and the event, held at a five-star hotel, is an attempt to create the media equivalent of the Davos economic summit. Murdoch said that the creative industry would create jobs that were "environmentally friendly, well paying, and contribute to a better quality of life".

Calling for ad markets to be opened up, he said: "Opaque markets tend to be unfairly dominated by one or two players. This can be a cosy arrangement for those players. But a nation pays a very high price for this cosy arrangement – because it takes away the financial engine needed to drive investment in local content."

Despite achieving much of his early success in the UK, Murdoch credited his adopted homeland for News Corp's growth. "We succeeded because the open American economy let us compete on our talents," he said.

As well as investing in Rotana, the world's largest producer of Arab music and setting up local production offices in Abu Dhabi, News Corp announced a strategic partnership between Fox International Channels and Abu Dhabi's twofour54 yesterday.

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