Riaz Haq writes this data-driven blog to provide information, express his opinions and make comments on many topics. Subjects include personal activities, education, South Asia, South Asian community, regional and international affairs and US politics to financial markets. For investors interested in South Asia, Riaz has another blog called South Asia Investor at http://www.southasiainvestor.com and a YouTube video channel https://www.youtube.com/channel/UCkrIDyFbC9N9evXYb9cA_gQ
Saturday, August 1, 2009
July in Dubai
My family and I stopped in Dubai for a three-day vacation in July on our way to Pakistan from the United States. As I was planning the Dubai stopover, a friend of mine who maintains an apartment in Dubai for his frequent business trips there heard about it, and offered to me the use of his apartment and his driver for the duration of our stay. This friendly gesture proved to be extremely convenient and valuable for us. Not only did the driver meet us at the airport upon arrival, he stayed with us and showed us around the usual places such as Palm Jumeirah, Burj ul Arab, Atlantis hotel and resort, various shopping malls, etc. He also arranged for a desert safari for us. In addition to the tourism, my family and I got a chance to meet an old friend of mine and his family, who have been settled in Dubai for the last thirty years. He heads the sales office of a major European company there.
Our Dubai arrival was very smooth. The plane landed at 4AM, about a half hour earlier than scheduled, and the immigration and customs procedure were very quick and efficient. As we came out of the airport terminal building, our eyeglasses were all fogged up by the heat and humidity of Dubai. We had to take them off to look for the driver who was supposed to receive us. He did arrive shortly after, and took us to the apartment and got us settled in there. On our way, we heard the muezzin's calls for the morning prayers from several mosques, reminding us that we were in a Muslim nation. We stopped at a Pakistani restaurant, and picked up a breakfast of desi omelets and paratha and ate at the apartment.
After resting for a few hours, we ventured out to the Dubai city mall. As we drove from the apartment, the city appeared to be enveloped in a rather thick haze that the driver suggested was dust. The roads were wide, and we could see many shiny new buildings, and few cranes on either side of the road. The traffic seemed fairly light for a normal business day. We headed to the Mall's food court for lunch. Many of the restaurants were familiar, including KFC, Burger King, Krispy Kreme and Subway, but we decided to go for the middle eastern fare at a Lebanese place. The food was quite good and reasonably priced. Since I needed a GSM cell phone and a local SIM, the driver took me to a phone company outlet, where an Indian gentleman was kind enough to suggest buying at Carrefour at a much better price, which I did. The cell phone was activated within an hour after installing the SIM and I was able to make several calls, including overseas calls.
The mall has many European stores selling designer merchandise, along with many small stores carrying all kinds of things ranging from apparel to jewelry, shoes, flowers, toys, electronics and food items. The stores selling expensive European designer apparel and accessories such as expensive bags, shoes and jewelry appear to be particularly favored by the rich Emirati women who are quite fashion-conscious. One could see glimpses of many of them, even though some were covered from head to toe, wearing expensive designer stuff visible underneath their black covers.
In the evening, my wife and daughters checked out some of the desi apparel and jewelry stores, and later we visited my old friend's apartment. He had arranged for dinner at a restaurant called Barbecue Delight that offered a delectable buffet with a wide selection including chicken tikka, seekh kabab, nihari, naan, biryani etc. We enjoyed the food and talked about how things are going in Dubai. He confirmed for us what we had heard and observed; the business is significantly down from a year ago, the rents have come down, the real estate prices are slipping, many people have lost their jobs and left the Emirate, some with the keys in their cars abandoned at the airport. It was reported earlier this year that Dubai police have found at least 3,000 automobiles -- sedans, SUVs-- abandoned outside Dubai International Airport in the prior four months. Dubai and other emirates in the UAE have been heavily criticized for their labor laws that badly treat the poor immigrant labor building the infrastructure. In 2007, the New York Times reported that "after several years of unprecedented labor unrest, the government is seeking peace with this army of sweat-stained migrants who make local citizens a minority in their own country and sustain one of the world's great building booms. Regulators here have enforced midday sun breaks, improved health benefits, upgraded living conditions and cracked down on employers brazen enough to stop paying workers at all."
There have also been reports of bailout of debt-ridden Dubai by Abu Dhabi recently, when Dubai was unable to honor a $10 billion bond in June, 2009. Another default is likely on a $10 billion bond coming due in December this year. Dubai has a reported debt load of over $80 billion that must be handled even as the property values continue to fall. These issues of debt and falling property prices will continue to be a drag on Dubai’s recovery. However, as the crisis unfolds, Dubai does have an advantage: no other city in the Middle East has the vision or the infrastructure to act as a services hub for the rest of the oil-rich region, which is expected to rebound from this global recession faster than other areas. With $600 billion of foreign exchange reserves and sovereign investments, the United Arab Emirates, of which Dubai is a part, has considerable resources to support Dubai's recovery.
Continuing our vacation the next day, we saw more malls including the Mall of the Emirates and Ibn Batoota mall. These malls did not seem crowded. But there were quite a few kids at the indoor ski resort at the Mall of the Emirates. The artificial ski slope seemed to be fairly tame, like a beginner bunny slope at ski resorts in the Sierras, perfect for the curious young ones wanting to explore skiing and snowboarding. We then went to see the newly built Palm Jumeirah, a man-made island about 5 km in diameter. It covers an area of 600 hectares and was reclaimed from the sea. Once complete, the development will increase the Dubai shoreline by 75 km. We saw a lot of apartments and villas on Jumeirah that appear to be empty. Many are said to have been bought by foreign, non-resident speculators who who were hoping to make a quick buck by flipping these properties prior to the bubble burst.
While most environmentalists believe Palm Jumeirah is a disaster, it is a great engineering feat and aesthetically quite pleasing, particularly the Atlantis hotel and resorts are beautiful. There is a very impressive aquarium inside Atlantis that features live sharks. But there are persistent concerns that most of the reclaimed development will come under water as the sea level rises with global warming later this century.
We headed out to Sharjah for the desert safari in the afternoon. We were driven in a Toyota Landrover, and as we approached the desert, the driver partially let out the air from the tires to get better traction on sand. It was quite a thrill ride over the sand dunes and felt much like a roller coaster ride. The driver drove up to the top of the sand dunes, and then rapidly came down the other side, slipping and sliding all the way.
Following the sand dune adventure in Sharjah, there were camel rides, dinner and belly dance at a camp in Dubai. The driver explained to us that the camp is located in Dubai because the Emir of Sharjah has forbidden drinking and dancing in his emirate.
It was an enjoyable few days for us in Dubai. It's an emirate like no other, allowing night clubs to operate along with its many mosques. In spite of its current economic difficulties and concerns about labor practices, it has the potential to come back strong because of its multiple advantages, such as many first-world businesses, excellent infrastructure and its ambitious leadership. It represents a place where the average people of South Asia and the Middle East can get a taste of how the other half in the first world lives, and hope to aim higher to improve their own lives in their native lands.
South Asians Flee Dubai as Economy Slows
UAE Investments in Pakistan
Global Warming Impact
Labels: Dubai, Economic Crisis, Foreign Workers, Vacation
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Here's some bad news about Dubai and its impact on World markets, according to Wall Street Journal:
Stocks slumped Friday as investors reacted to a debt crisis in Dubai, with more repercussions likely on tap the next few days as traders return from major holidays in both the U.S. and Middle East.
Crude oil touched a six-week low, gold tumbled, and the dollar climbed as worried investors sought safe havens.
The stock market's slide began in Europe, continued in Asia, and then through the U.S. trading session after Dubai said it would delay repayments on $60 billion of debt from its investment company, Dubai World. The decision raised broader questions about the safety of emerging-market debt and the strength of the global recovery The Dow Jones Industrial Average was off 233 points at its morning low and ended the shortened post-Thanksgiving session with a 154.48-point decline, off 1.5%, at 10309.92, hurt by declines in all 30 components. The Dow, which entered Friday's session at a 13-month high, ended the week down 0.1%, snapping a three-week winning streak.
Traders and money managers drew some comfort from the U.S. market's recovery from its intraday lows Friday. Many point out that Dubai's main creditors are European banks, not Wall Street firms. But that could still lead to gyrations next week and beyond if investors with exposure to Dubai's troubles continue to unload commodities, U.S. shares, and other assets that have shown hefty gains this year to raise cash.
"We still need to see if there's going to be a domino effect here," with Dubai's credit woes spreading to its neighbors and trading partners, said Kevin Shacknofsky, of Alpine Woods Capital Investors. "The markets are telling us for now that this is a containable problem, but we're not absolutely certain of that yet."
In particular, traders are waiting to see details of possible aid from oil-rich Abu Dhabi to prop up Dubai. Both are city-states within the federation known as the United Arab Emirates, which was the world's eighth-largest oil producer in 2008, according to U.S. government data.
Analysts said such a rescue may have to be hammered out in the coming days, since many key players in the Middle East are away Friday for the Eid Al-Adha holiday marking the end of the annual Muslim pilgrimage to Mecca. Trading was light in the U.S. on Friday, with many participants taking an extended Thanksgiving break.
In Asia, Japan's Nikkei stock average slid 3.2%. Hong Kong's Hang Seng index tumbled 4.8%. South Korea's benchmark dropped 4.7%.
The dollar rose, with the U.S. Dollar Index, which measures the greenback against a basket of six other currencies, up 0.2%. The euro fell to $1.4960, down from $1.5017 late Wednesday.
Treasurys also gained. The two-year note was recently up 4/32 to yield 0.687%, while the 10-year note rose 17/16 to yield 3.207%.
Friday's moves in the financial markets reverse a recent trend in which investors have generally favored riskier investments, reflecting optimistism that the world was coming out of recession. But now attention is turning not just to Dubai but also to Greece, which is scrambling to refinance its mounting public debt.
Here's a report about the exodus of Indian workers from Dubai due to financial crisis:
NEW DELHI: There is no cause for worry over potential job losses among Indians employed in the Gulf following the multi-billion-dollar debt
default risk faced by Dubai World, Minister for Overseas Indian Affairs Vayalar Ravi said on Saturday.
"There is no need to panic," the minister told media over the phone from Chennai, adding: "I have feedback from our consulate general in Dubai and our embassies there. We are not expecting any kind of exodus of Indian workers to India."
According to Ravi, there was some impact in the Gulf region at the beginning of the meltdown last year but the situation had changed since then. "I even announced this in parliament. About 100,000 Indian workers had returned from Dubai at that time. But many of them have gone back now," the minister pointed out. "India won't be affected by Dubai's debts."
The state-run Dubai World stunned the global financial world Thursday when it announced it would need to restructure its debt, estimated at $59 billion, to pre-empt default and asked creditors for a six-month deferment.
The conglomerate has a host of companies under its fold with interests in a wide range of businesses such as realty, infrastructure, logistics and economic zones. It operates not just in the region but across a clutch of countries, including India.
The total debt of Dubai as an emirate is estimated at $80 billion. There were some concerns in India among the families of expatriate Indians working in the Gulf since the region accounts for nearly half of the country's inward remittances worth $25 million annually.
An estimated five million Indians work in the region. But key policy-makers like Ravi, Finance Minister Pranab Mukherjee, Commerce Minister Anand Sharma and Reserve Bank of Governor D. Subbarao have sought to calm the nervous, saying the impact on the Indian economy will be negligible.
The BBC is reporting that Dubai crisis is impacting a remote village in Bihar:
In August 2008, Bharat Bhushan Tiwari - from Akhopur village in eastern Indian Bihar - took a loan of 71,000 rupees ($1,500) from a village moneylender to pay a local agent who had arranged a job for his son in Dubai.
Mr Tiwari - who runs a small shop - was hoping for better days for his family of five by sending his second son, Jay Kumar Tiwari, to the Gulf country.
Jay Kumar had got a job as a carpenter in a Dubai-based construction company and had big dreams - he wanted to earn a lot of money to pull his family out of grinding poverty.
But last month, their dreams came crashing down when Jay Kumar was asked by the company officials to quit by 6 March 2010.
Dubai has been hit by an unprecedented financial crisis and the tremors are being felt in far away Bihar.
"This has been a cruel joke on our fate," Bharat Bhushan Tiwari told the BBC, trying to fight back his tears.
His other two sons are also unemployed and the Tiwari family now prays that the situation improves in Dubai.
Here's a news report about South Asian labor losing jobs in Dubai:
There are millions of poor, impoverished labourers from South Asia in the Gulf region. Indeed, the long-enjoyed boom that saw cities such as Dubai carve out a new niche for excess and opportunity was built on the backs of such migrant workers, who are often treated as little more than bonded labour. Drawn from India, Pakistan and Bangladesh and often paying hundreds of dollars to a middle man to secure a job, these workers – on arrival in the Gulf – find conditions are often atrocious and that they have virtually no rights. Many have complained of being prevented from leaving.
The upside of the hardship for the large numbers of South Asians who make their way to the Gulf – Indians are said to make up more than 40 per cent of the population of Dubai alone – is the amount of money that gets sent home in remittances. Figures suggest that in 2007, Indians living in the Gulf sent a total of $27bn to their families.
For some states, the money sent home is a considerable slice of the total economy. In Kerala, for example, such remittances make up around 22 per cent of the state's income.
Speaking from Thiruvananthapuram, the state's finance minister, Thomas Isaac, said he believed that even if the Dubai crisis did not rock India in its entirety it would affect Kerala "very much". "Half of the workforce in the United Arab Emirates are Malayalis [people from Kerala] and it seems certain that the construction activity in Dubai is going to take a hit," he said. "The impact is that the Dubai real estate market will decelerate."
Mr Ravi, the central government minister, did not agree. Having spoken with Indian consulates in the Gulf, he said authorities believed that while the Dubai World crisis would have international implications, it would not lead to large job losses for migrant workers. He said, however, that despite such an assessment, the government was planning to announce a comprehensive package to rehabilitate those Indian workers who do return from the Gulf. "It will take some more time to operationalise the fund," he added.
But for Sajid and his friends in Meerut, in the state of Uttar Pradesh, the harsh reality has already struck.
Another migrant labourer who had lost his job in Dubai, Noor Mohammed, wept as he told the Times of India: "We had wanted to save money to get our families to the UAE. Our dreams lie shattered."
Here's an interesting Op Ed by George Fulton in Pakistan's edition of International Herald Tribune:
We haven’t got a lot to be thankful for these days in Pakistan.
But at least we are not Dubai.
Fed up with loadshedding, bombs, and TV cynicism pervading Pakistan, I recently escaped to Dubai for a holiday. Big mistake. Huge. Ten days later I returned, gasping for Karachi’s polluted, but far sweeter, air. Dubai may have the world’s tallest building and the world’s largest shopping mall, but it also has the world’s tiniest soul. It’s a plastic city built in steel and glass.
It has imported all the worst aspects of western culture (excessive consumption, environmental defilement) without importing any of its benefits (democracy, art). This is a city designed for instant gratification a hedonistic paradise for gluttons to indulge in fast food, fast living and fast women. It’s Las Vegas in a dish dash. You want to eat a gold leaf date? Munch away.
You want to drink a Dhs 3,000 bottle of champagne? Bottoms up. You want a UN selection of hookers at your fingertips? Tres bien. Let’s start with the malls. These cathedrals of capitalism, these mosques of materialism are mausoleums of the living dead. Slack jawed zombies roam around consuming food, clothes and electronics in a desperate attempt to fill the emptiness of their existence.
Whilst at the Mall of the Emirates the azan goes off. Nobody appears to move to the prayer room; everyone’s too busy performing sajda before Stella McCartney, genuflecting before Gucci, and prostrating themselves at Prada. With Dubai, one recalls F Scott Fitzgerald’s The Great Gatsby.
The people are modern day Gatsbys, buying shirts that they will never wear and books they will never read. Like Fitzgerald’s roaring 20s America, Dubai is a moral failure a society obsessed with wealth and status. Everyone is trying to keep up with the Jones’ or the Javaids. You see the goras with their perma-tans, streaked highlights and their flabby cleavages.
Here's a report on Dubai's dangerous exposure to Iran and India policies:
Dubai needs to adjust its economic policies in order to reduce a “perilous” dependence on trade with India and Iran, according to a report by the government-backed Dubai Economic Council.
In an assessment of the emirate’s trade policies published on Monday, the DEC said other regional centers such as Qatar, Abu Dhabi and Bahrain could grab a share of Dubai’s lucrative export and re-export trade unless the emirate diversifies its trading partners and reduces its dependence on trading in gold and jewellery.
“Dubai’s concentrated trade activities with India and Iran are perilous,” the report said. “In the event of changes in trade regulations, regime or preferences in these countries, it has the potential of undermining the future sustainability of Dubai as a regional trading hub.”
Dubai has since the 1990s positioned itself as one of the Middle East’s largest trading hubs, with total non-oil trade rising 13% in 2012 to 1.235tn dirhams ($336.25bn). Yet 70%, nearly two-thirds, of its trade is done with India and Iran, and the bulk of its trade by value is in gold and jewellery, making Dubai vulnerable to tightening global sanctions on Iran and any changes in India’s policies on gold imports, the report said.
Aside from diversifying its trade partners, Dubai must prioritise exports of manufactured goods and machinery, which currently make up a “negligible” amount of its total trade, the DEC said. It also suggested that Dubai should follow the lead of Hong Kong and Singapore in their transition from low-tech exporters to exporters of technology-rich products such as electronics, biotechnology, pharmaceuticals and precision engineering.
The DEC is the economic consultancy arm of the Dubai government.
The report noted that Abu Dhabi, Qatar and Bahrain are taking steps to improve their ports and trading infrastructure, and could easily grab a greater share of Dubai’s re-export trade unless the emirate adjusts its policies.
“Evidently, Dubai ports and airports have the advantage of being already in place and competitive for international standards. However, if not supported by adequate trade policies, such advantage may erode,” the DEC warned.
Top Execs Exposed: VPs, CEOs from #India, #Egypt, #Singapore with fake degrees in #UAE | #AxactScandal http://bit.ly/1EyOa0b
Dr R. Srivastava who works at a reputed hospital in Dubai said she can’t believe her PhD in quality management from Midtown University is good for nothing. She spent Dh40,000 on the ‘course’ between 2011 and 2014. “I saw Midtown’s advertisement on Facebook and enrolled for the course hoping it would enhance my career,” Dr Srivastava told XPRESS.
An IT manager at a software firm who forked out Dh18,000 for an online computer networking degree from Edgebrook University is equally gutted. “This is heart-wrenching. Would you believe, I even threw a party to celebrate my graduation. I had been saving for years for this course hoping it would help me get a promotion,” said the Egyptian.
Not everyone could handle the truth. “What do you mean my degree is fake?” demanded Ali, vice-president of a retail firm, when XPRESS called him about his MBA degree from Rochville University.
“My degree is 100 per cent genuine. It’s duly attested by all relevant agencies and I have been using it for years,” he said angrily before disconnecting the line. Ali may want to know that his fellow alumni at Rochville was a dog. The year Ali got his degree, the university also awarded an MBA to a canine named Chester.
This happened when an undercover Singaporean journalist enrolled her pub for the university’s online MBA programme. The dog’s degree came in a parcel couriered from a Dubai address. An insider at AXACT said the UAE was their most lucrative market after the US. “Hundreds of school dropouts from the US bought our degrees to land jobs in Iraq and other Middle East cities. The UAE was key to our operation. We funnelled nearly Dh288 million from here to Pakistan in the past four years,” the man said, citing anonymity. He refused to give details.
#Canada based #middleeast food restaurant chain Paramount Fine Foods comes to #Pakistan. #shawarma #falafel
KARACHI: Paramount Fine Foods, a Canada-based Middle Eastern cuisine franchise, is set to open its doors in Pakistan, aiming for 30 restaurants across the country in the next five years and creating employment opportunities for the youth.
Set up 17 years ago in Ontario, Canada, by Lebanese immigrant Mohammad Fakih, Paramount now has 36 locations across Canada and plans to add another 60 restaurants around the world by the end of this year.
A memorandum of understanding was signed between Paramount Fine Foods and Pakistan Beverage Ltd (PBL) on Wednesday.
CEO and Managing Director of PBL Yasin H. Kassam and CEO of Paramount Fine Foods Saad Saleem signed the agreement for supply of carbonated and non-carbonated beverages to Paramount Fine Foods in Pakistan.
The ceremony was witnessed by Paramount International Chief Operating Officer Ali Khalil, ASA Corporation Partners Atif Khan and Shahrum Saleem, Director Operations of ASA Corporation Aman Virji, Director of PBL Zaid Yasin and General Manager of PBL Agha Muhammad Khan.
Mr Saleem said the Pakistani consumers’ food palate is expanding thanks to their travel. “With more and more people going to Dubai for vacations and getting a taste of Arab cuisine, there is demand for fine Middle Eastern dining. The roadside shawarma just doesn’t cut it. We picked the biggest Middle Eastern food chain and look forward to expanding,” he said.
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