Tuesday, August 30, 2005
Monday, August 29, 2005
The annual economic freedom report produced by the Cato Institute, a US think tank that promotes liberal economic policies, ranked the UAE 16th and Kuwait and Oman 18th out of 123 countries.
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"It's fair to say that in general the Arab countries are weak on a whole range of issues, from trade policy to regulation of business and labour," said Ian Vasquez, director of the Project on Global Economic Liberty at the Cato Institute. "There's too much bureaucratic regulation, and the integrity of the rule of law is not so strong." Vasquez cited Jordan as a country that has successfully reformed parts of its economy. Thanks to the recent stability of inflation rates and looser restrictions in international trade, Jordan climbed from 45th in 2003 to 36th this year.
. . .
The survey found that countries in the top fifth of the freedom rankings grew at 2.4 per cent in 2002 compared to the countries in the bottom fifth — including Syria and Algeria — which actually saw their economies shrink by 0.5 percent in the same year. The report also suggested that countries with more economic freedom have substantially higher per capita incomes. Countries in the top fifth of the freedom rankings had a per capita income of $26,106 while countries in the bottom fifth of the rankings had a per capita income of $2,828.
"Many economists have long argued that economic growth and poverty reduction require an economic policy that encourages economic freedom," said John B. Taylor, an undersecretary for International Affairs at the US Treasury. "This report provides plenty of empirical evidence of that."
While official comment was not available, industry sources said a decision will be taken jointly by all the retail players within days. Retail petrol prices were last increased in April last year, from Dh4 per gallon to Dh4.75. Retailers have for several years been urging realistic retail prices that reflect international crude prices. According to Hussain Sultan, Enoc group chief executive, UAE-based retailers have been suffering losses for several years.Retail prices for petrol in the UAE do not reflect international crude prices; they do not move with crude prices and the price of petrol relative to crude is low compared to that relative price in non oil-rich countries (taxes are not the explanation because I am referring to the price of petrol net of taxes). What keeps the price low is that at least some retail players choose to sell at low prices because their government owners wish to keep the price of petrol low to disburse some benefits to the population. Why other retailers would follow suit is a matter of speculation. Perhaps it is tautological to say so, but they appear to stay in the market because they believe that through an agreement amongst the small number of retailers price will be increased so that economic profits can be earned in the future. For this expected future gain they maintain their system of retail outlets.
The Khaleej Times reports:
DUBAI — Widespread manipulation of Dubai Islamic Bank stocks by two operators prompted the Dubai Financial Market to cancel all trades in the bank’s shares yesterday. Following an investigation, DFM has found that most of the transactions on DIB were from two investors who manipulated the share prices. Although the DFM has not identified the two operators, market sources said these are two large institutional brokers — one of them closely linked to a leading bank.Indeed.
The cancellation of trading will mean Saturday’s closing price is the last price of DIB share. The bull-run on Dubai Islamic Bank (DIB) counter yesterday saw its turnover hitting a new record high of Dh9.34 billion, 55 per cent higher than the highest ever market turnover reported in UAE and one of the highest ever daily turnovers in the world recorded on a single counter.
. . .
“The UAE market is facing a strange phenomenon of high liquidity and very low level of market sophistication. While on the one hand the there is huge potential for growth, the investors and brokers are not adequately educated to deal with a situation such as these. Low level of business ethics in the market can also work against the credibility and future growth of investments,” said P. Krishanamurthy an investment analyst.
From Reuters' coverage:
Shailesh Dash, head of research at Global Investment House in Kuwait, said it was encouraging that authorities acted promptly. "If these types of practices are allowed to go unchecked, they can certainly undermine confidence in the market," he said. "But the authorities appear to have acted quickly and that is a good thing, especially at a time when a lot of international investors are taking an interest in the Dubai market and in markets across the Gulf," he said.
This is an good as any indication that oil prices are high because many of the US economy is healthy and growing (not to mention China and India).
If oil prices do break through $100 per barrel it will be because these economies keep growing.
People respond to incentives
"The oil sands give Canada one of the single greatest advantages of any state in the Western world," says Paul Chastko, a University of Calgary historian who recently published a book called Developing Alberta's Oil Sands. "It gives Canada the ability to supply all of North America for the next 50 years without touching a drop of imported oil."The Canadian tar sands are one reason I don't think oil will reach $100 per barrel in the next 10 years.
. . .
The National Energy Board estimates there are approximately 1.6 trillion barrels of crude bitumen saturating the ground in northern Alberta. Bitumen -- a form of heavy, thick oil laden with sulphur and deficient in hydrogen -- can be refined into synthetic crude oil to make everything from gasoline to plastics. It is the lifeblood of every industrialized economy. According to the Alberta Energy and Utilities Board, about 178 billion barrels of bitumen are economically recoverable using existing technology -- enough to produce more than 150 billion barrels of crude.
If these estimates are accurate, Canada's oil reserves rank second behind only Saudi Arabia's 260 billion barrels. And there are many who believe the current oil sands assessments understate the true potential here. The AEUB has projected that rising prices and improved technology could ultimately push the oil sands yield close to 300 billion barrels, which would make it the richest petroleum field in the world. By 2015, the oil sands are expected to be producing roughly three million barrels of petroleum a day. Assuming prices will average US$40 a barrel (well below where they are today), that suggests annual revenues of close to US$43 billion.
Last year alone, Alberta collected almost $900 million in oil sands royalties, and the Athabasca Regional Issues Working Group, an industry association, estimates that provincial revenues will hit $3 billion a year by 2011.
. . .
"How can you not be optimistic with these commodity prices?" George [Rick George, the president and chief executive of Suncor] says. "And look, prices aren't going to stay this high. There will be volatility. But even with oil in the mid-US$30s, this industry and Suncor will perform very well."
Sunday, August 28, 2005
According to Standard Chartered, the London-listed Asian and African bank, average oil revenues per capita in Qatar soared from about $15,000 (£7,000) to nearly $50,000 in 2004, while in Kuwait, oil revenues per head increased from just over $10,000 to about $25,000 last year. One consequence has been a boom in Middle Eastern stock markets and property developments. The United Arab Emirates stock market surged more than 95 per cent last year, followed closely by the Saudi Arabian bourse, which rose more than 80 per cent.
. . .
Brad Bourland, the chief economist of Samba, the Saudi bank, is forecasting oil export revenues for the kingdom will reach $157bn this year, an increase of 48 per cent on last year. In a report published last month, the bank says that this year will be the "best in the kingdom's economic history".
Some of the mountain of oil-fuelled cash is being spent on buying US and European assets but, unlike the 1970s, a significant amount of these petrodollars is being kept closer to home and invested in neighbouring countries. A very visible result has been an unprecedented construction boom in the region, with Dubai leading the way. Unlike its larger neighbours, the tiny United Arab Emirates state has few domestic oil and gas resources - less than 5 per cent of Dubai's economy is based on hydrocarbons - and analysts believe its reserves will run out in the next 10 years. Nevertheless, the state has been busy transforming itself into a tourist and real estate haven for the processing and spending of petrodollars.
Read the whole thing. It appears the link above may expire. I'll post the whole thing in an update should that happen.
It is understood that many of the complaints related to the University’s local partner, and with help from KV [Knowledge Village], a potential replacement was found. But a senior official at the University alleged that the free zone then tried to change the conditions of the licence. Under the original deal, the University and the local partner each had a licence from KV.And from today's Gulf News we read:
“KV had initially suggested a local partner and after the University had invested substantially toward setting up an alternative arrangement KV just reversed its policy and said it would not provide a separate licence to the local partner.
It was a complete turnaround,” said the source, who asked not to be identified. A statement from the University described the new policy as: “an unacceptable change in position by KV as it shifts all the financial risk of the campus to USQ."
The reason given by DKV for closing USQD was academic quality. USQD, however, told Gulf News: "Each term the quality of teaching was evaluated by students and the Chief Academic Officer … on many occasions [faculty] performance was above the USQ average. "Unfortunately, DKV never asked for any evidence of teaching ability, but listened only to complaints from disgruntled students."
In response DKV told Gulf News during an investigation it identified "several shortcomings including lack of direct control from USQ Australia, which had an impact on management and academic quality". This resulted in a much higher student failure rate in its Dubai campus compared to its parent campus in Australia, the statement said.
UAE social assistance:: KT
Extracts from the Khaleej Times article:
- Under the current system, monthly social benefits covers widowed national and divorced women, the disabled and the handicapped, the aged, orphans, single daughters, married students, relatives of jailed dependants, estranged wives and insolvents. Also eligible for social security benefits are widowed and divorced national women previously married to foreigners and the expatriate husbands of UAE women.
- According to an official report, approximately Dh660 million ($179 million) was distributed among 77,000 beneficiaries of social welfare in the UAE, with the elderly accounting for the largest group of recipients (12,000), followed by divorcees (5000), in 2003.
- The budgetary allocation for social security entitlements amount varies between one per cent and two per cent of the GDP.
- The report said the rapid rise in population coupled with the demands of modern living had necessitated government intervention at federal level to ensure that the housing needs of nationals are met throughout the Federation, and such programmes include the free distribution of houses and land to UAE citizens.
- The Social Security Department at the Ministry of Labour and Social Affairs plans to reduce the number of social welfare recipients by assisting those suitable for jobs in finding employment for them, or to set up small businesses. . . Sources said the government was conducting a comprehensive study to approve monthly allocations for job-seekers. According to the study, the total number of jobless persons will be determined and action would then be taken to find them jobs in the Federal and local governments, besides private and public sectors. Unemployed nationals who show enthusiasm to be employed will be encouraged by giving them monthly financial assistance. The new Social Security Scheme also contains major amendments which cover various categories and new procedures as follow up for employment.
The Khaleej Times reports:
According to recent statistics released by Dr Khalid Mohammed Al Khazraji, Under-Secretary of the Labour Ministry, informal economy in the country accounts for around 60 per cent of the total expat labour force.I assume that informal workforce in this case means foreigners working in the UAE who do not have a work visa. 60 percent is a very large number, especially if you take into account that 80% of the population of the country are non nationals and that many of them are men without family in the UAE. Is illegal immigration of that magnitude?
. . .
Responding to a question by your favourite No.1 newspaper, Khaleej Times, on why fees imposed on least-educated expatriate employees for sponsorship transfer is high, he said that the new sponsorship transfer system aims to rid the country of informal economy and ensure that highly skilled cadres are retained. “We are targeting qualified cadres. We are eventually keen on providing them with a suitable atmosphere in the local labour market in a way that would enhance the economy,” said Dr Al Kaabi.
Under the new system, less skilled employees have to pay a fee of Dh5,000 and must complete three years in service to have their sponsorship transferred. It is permissible by law for this category to transfer their visa only once in their lifetime. Meanwhile, the law stipulates that masters and doctorate holders can transfer sponsorship after one year of continuous service. A Dh1,500 fee is levied on expatriates in this category. The minister said the main objective of the sponsorship system was to ensure retention of qualified expatriate labour force, lessen restrictions on movement of human capital in the local labour market and curb violations of rules.
A Dh5,000 is the neighborhood of a year's salary for most unskilled non nationals in the UAE. A low-skilled worker who wishes to change employment is likely simply to go outside the formal system; the same holds true for a low-skilled who wants to leave a second employer -- they have little to lose if they are caught. From the article it sounds as if the "new system" implements a more strigent set of rules and fees for changing sponsorship. This will only spur an increase in the proportion of low wage workers going into informal (illegal) employment.
The project will comprise 10 islands surrounded by five-metre deep attractive lakes, fed by the Arabian Gulf waters.
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Nine islands will be developed according to global engineering and architectural techniques and will be located in the Al Hamriyah area, while the tenth island will be distinguished by its location, the report said. Bridges will connect the ten islands. The project will consist of ten high-rise buildings located in the middle of the islands, residential units, more than 2,500 villas, offices, hotels and recreation outlets. A 5.4-million-square-foot space has been chosen for the project with completion scheduled in three years.
Saturday, August 27, 2005
Untraceable license plates, in Georgia, the peanut state
Alhurra and Radio Sawa also scored well in news reliability. The ACNielsen survey reported that 77 percent of Alhurra's viewers and 73 percent of Radio Sawa's listeners consider the news reliable. Compared to the ACNielsen surveys a year ago, news credibility for Alhurra took major jumps in three key markets: in Egypt 70 percent to 92 percent, in Jordan from 46 percent to 68 percent, and in Lebanon from 53 percent to 79 percent.
As the spokesman for Tourism and Commerce Marketing states construction and inconvenience is inevitable with growth. However, Dubai is not world standard when it comes to neatness of construction sites. There is room for improvement commensurate with Dubai's ambitions; a comparison of work sites in Dubai and the other parts of the developed world will show the difference. Further, even if five star hotels have low vacancy rates now, this is not a compelling signal that positive impressions are being formed by visitors. Dubai relies on positive impressions in order to meet its very ambitious growth targets for tourism demand.
Dozens of UK holidaymakers are understood to have cancelled their trips to Dubai after a documentary showing construction work at Jumeirah Beach Residence. The programme, Package Holidays Uncovered, was screened on British channel ITV earlier this month. The reporter visited the Hilton Jumeirah and highlighted heavy construction work immediately opposite the hotel. It also named the Ritz-Carlton, the Sheraton Jumeirah and the Royal Meridien. “We’ve lost dozens of nights as a direct result of this programme,” said a source at a five star hotel, who asked not to be identified.
. . .
Although frustrating, Elaghoury said the programme was perfectly fair. “It was just a realistic portrayal of what it looks like from the balcony of a hotel,” he said.
But a source at a major hotel slammed the state of the area. “The biggest problem is the litter,” said the source, who asked not to be named. “There’s styrofoam and plastic everywhere, and the road is turning into a dirt track. “It doesn’t exactly set a good first impression to visitors.” The hotels say they have been able to fill most of the rooms with other customers.
Mohammad Abdul Mannan at the Department of Tourism and Commerce Marketing said the problems were regrettable but necessary as Dubai grows. “Some hotels could have had some difficulty but if you go around the city, you will realise that it is very difficult to get a room even in a five star hotel,” he said.
UPDATE: Gulf News has an article on Dubai's beautification drive .
This is a well-written article on the importance of remittances to Bangladesh and the role of Bangladeshis in the UAE economy.
Bss&Brn offers some parallels between the UAE of the 00's and the USA of the 70's.
Some professors don’t think the digital options really break new ground. “I’m on the bloody Internet, on your screen answering questions,” Gottheil said of an option to which book owners can log in for help via video. “What’s Krugman going to do new, tell jokes? Unless he comes on 3-D. Then, OK, he beat me.”
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Cassing said the Aplia option allowed her to assign homework that is done online and graded automatically to her 200 students. She credits that for part of improved student performance over the past, when she used Mankiw’s book and homework was essentially optional because all 200 problem sets could not be graded.
. . .
Sanderson said he “winced in a couple places” where he detected some bias in Krugman’s book. “Paul doesn’t use minimum wage as one of the traditional examples of restrictions. He would have a hard time doing that and coming back and arguing for higher wages for the unskilled.”
Friday, August 26, 2005
“The whole thing rotates,” said the source. “You will be able to acquire villas, apartments, floating villas on water, [and] flying villas [that] elevate in the air. So you have the accessibility to a villa that not only rotates on ground, but it gives you up to a 15 metre to 20 metre up in-the-air elevation. It’s a mind-blowing project. We [will] have 20 towers with every single floor rotating. The capitalisation of the project is going to be in the range of AED3.7 billion to AED4 billion (US$1 billion to US$1.09 billion),” he added.
The venture would be one of over 200 individual construction projects expected to make up DubaiLand, which was announced by the emirate’s government in 2003. It aims to house around 55 hotels and become the largest leisure, entertainment and tourism attraction in the world.
. . .
When fully operational, the promoters expect it to attract more than 200,000 visitors per day and employ around 300,000 people.
Charles Murray writes:
The historical reality of male dominance of the greatest achievements in science and the arts is not open to argument. The question is whether the social and legal exclusion of women is a sufficient explanation for this situation, or whether sex-specific characteristics are also at work.Is this difference perhaps due to socialization or opportunity? Murray argues these cannot explain all the difference. Read the whole thing if you are willing.
Mathematics offers an entry point for thinking about the answer. Through high school, girls earn better grades in math than boys, but the boys usually do better on standardized tests. The difference in means is modest, but the male advantage increases as the focus shifts from means to extremes. In a large sample of mathematically gifted youths, for example, seven times as many males as females scored in the top percentile of the SAT mathematics test. We do not have good test data on the male-female ratio at the top one-hundredth or top one-thousandth of a percentile, where first-rate mathematicians are most likely to be found, but collateral evidence suggests that the male advantage there continues to increase, perhaps exponentially.
Becker writes (my emphasis):
Posner, in his comment, writes:
It is obvious why affirmative action may hurt members of the majority group who are denied promotions or admission to various colleges, even though their records are better than many minorities accepted. But why is it bad for a country like the United States to do this, and often also for the minority groups gaining these privileges? My belief is that affirmative action is bad for any country that aspires to be a meritocracy, as the United States does, despite past slavery and discrimination that are terrible violations of this aspiration. The case for a meritocracy is that achievements based on merit produces the most dynamic, innovative, and flexible economy and social structure. Encouraging promotion or admission of less qualified applicants because of their race, gender, or other characteristics, clearly violates this principle, and produces a less progressive economy, and a distorted social structure.
The appeal of a meritocracy explains why one can, as I do, strongly oppose both affirmative action, and discrimination against African Americans, women, and various other groups that have suffered discrimination in employment and in admissions to schools and colleges. While affirmative action programs give advantages to various minorities that are not justified by qualifications, discrimination does the opposite, and gives advantages to the majority that exceed their skills and qualifications.
. . .
When discrimination dominated affirmative action, an African American or female medical doctor would be better than average since they had to overcome artificial hurdles to get where they were. That was not a desirable situation because discrimination made it harder for these groups to get ahead, so fewer of them than was warranted by their abilities and skills managed to make it to medical school. However, now, minority doctors and other professionals are greeted suspiciously by many patients and customers who fear they got where they are only because they were subject to lower standards. That can hardly make someone feel good, and helps explain some of the segregation and defensiveness of minorities receiving affirmative action help at schools or on jobs.
While opposing affirmative action, I do not advocate just letting the status quo operate without attempting to help groups that have suffered greatly in the past from discrimination. Employers, universities, and other organizations should make special efforts to find qualified members of minority groups, persons who might have been overlooked because of their poor family backgrounds or the bad schools they attended. . . .
Another attractive policy is to help disadvantaged children at early ages rather than using affirmative action when they apply for jobs or colleges. There is still controversy over how much and how durable is the gain from head start programs, although I believe that extra effort spent on these children at very young ages tends to yield a decent return in terms of later achievements. But it has been conclusively shown that efforts to educate and help in other ways when children are in their teens generally fail since by that time the children have fallen too far behind others of their age to be able to catch up. Put more technically, current human capital investments builds on past investments, so if past investments are inadequate, the current investments have low returns.
A situation in which 12 percent of the population is lagging badly behind the rest of the population is not healthy. I don't think affirmative action for blacks does much to promote their integration and sense of belonging in this society, but it probably does a little (notwithstanding Becker's correct point about the negative effect of affirmative action on self-esteem). Without affirmative action, elite educational institutions and other elite institutions (probably including the officer corps of the military) would have virtually no blacks, and this would underscore the gulf in achievement in a dramatic way that would be potentially harmful to social peace.
Lynne Kiesling gives the U.S. an excellent summary; it's not rocket science. (Via Instapundit.)
Quote, emphasis added:
JEDDAH—Continuing closures of call centres across Saudi Arabia after Saudi Telecom sharply lowered the price of international telephone calls was endangering the livelihood of over 16,000 employees who work at 4,000 call centres spread all over Kingdom, according to a report in the Arabic daily Asharq Al-Awsat.16,000 workers in 4,000 centers is an average of 4 workers per center. These are small centers. The Arab News story refers to them as "call cabins." Call cabins are shops where you can go and make a local or international phone call. Here's another Arab News story where they are mentioned, giving an idea of the kind services provided.
The price reductions initiated by Saudi Telecom have drastically affected the income of call centres around the Kingdom and turned many into loss-making businesses to the extent that many are laying off staff or closing down the business.
Sadeq Al-Abdaly an agent for investors in the sector, has made an appeal to Saudi Labour Minister Dr. Ghazi Al-Gossaibi, asking the government, to save the sector from ruin and its employees from unemployment. He warned that If Saudi Telecom does not change its policies, we will find ourselves obliged to take it to court to save our jobs and income.
Al-Abdaly said: "I rely on call centres as my only source of income. I have been working in this field now for four years and have 25 young Saudi men working for me, given that this line of work does not require specific qualifications.
Saudi Telecom continues to neglect this sector deliberately despite receiving 80 per cent of the revenue from each centre, Yahia Al-Jhfaly, head of a company that owns a number of centres in the eastern region was quoted as saying the by the daily last week. He warned that STC needed to reconsider investors profit margins as they pay the rent and the workers salaries but only receive 20 per cent of the income.
He explained that in Saudi Arabia, only young people worked in call centres. If the neglect of the sector continued, these employees were likely to lose their jobs. Unemployment would increase and many would lose their only source of income.
The University of Southern Queensland Dubai campus has closed following complaints from students, Dubai Knowledge Village (DKV) said yesterday.
USQD campus is based in DKV. De-licensing by DKV after investigation means the branch campus will shut next month just after a year in operation.
The USQD branch campus has over 300 students doing both bachelors and master's degree program-mes in business administration, mass communication and information technology. The DKV statement said: "Dubai Knowledge Village had received feedback from students … which developed into major complaints from both students and parents on the quality of education over the 2004-2005 academic year."
DKV identified several problems, including lack of direct control from USQ Australia, which impacted the academic quality, lack of academic materials, consistently shortened semesters and inadequate number of faculty.
The statement said after several attempts to solve the problems failed, "DKV was compelled to de-licence the University of Southern Queensland's branch in Dubai. While taking this decision, DKV made sure that students could complete the current semester (ending September 22, 2005)."
Thursday, August 25, 2005
Let's go back in a few days and see how things are going. We could see economic theory in action if and when the price ceiling becomes binding.
In the Gulf you often hear "after tomorrow." I believe it is a direct translation from the Arabic equivalent of "we'll do that as soon as possible", that is, at some unspecified future time.
It's the promise that keeps on giving. If you ask the next day you may receive the promise. My colleague with an especially perceptive wit calls it the rolling promise.
Companies are making tangible use of customer information. The Dynamist has the story. Economists love this kind of stuff.
Nationals engaged in the trade have been campaigning for a larger say and share in the trade, complaining that expats with their numbers had an undue hold on the trade, an imbalance, which should be set right.Nationals in the fish trade would like to see higher profits and a more comfortable working environment. One way to achieve this is to prevent non-national fish mongers from operating.
The finer points of the decree would throw light on this and other aspects of the trade, provide answers to several questions like what would have happen to the expat fish-seller post-nationalisation, and whether they would have to leave the country.
A not unrelated story: Abu Dhabi’s fish market shut down :: KT
As Kurds and Shiites in Iraq push for a federal constitution, fears are rising in the Arab world that the urge to create separate states could spread in countries with religious and ethnic minorities, analysts said.
When minority groups feel oppressed or deem that their rights are restricted by the centralised states in which they live, they are drawn to notions of autonomy or federalism so that they can better exercise their rights, Arab experts said.
Therefore, the Arab world is keeping a close eye on the outcome of demands for a federalist Iraq as it creates its first constitution since the fall of ex-dictator Saddam Hussein, said Nabil Abdel-Fattah, an analyst from Cairo's Al Ahram Center for Political and Strategic Studies.
"The result of the fight - between Sunnis who are against federalism in Iraq and Kurds who are for it - will have a decisive influence on how other countries' crises play out, from west of Asia to the Middle East and Iran," he said.
"Federalism was not one of the concepts in the Arab political dictionary, until now," he said.
The United Arab Emirates is presently the only federal state in the gulf region.
Some parallels between the sources of success of the federal system in the UAE and the USA can be made. For example,
- The USA was formed by the voluntary association of the 13 colonial states; the UAE was formed by the voluntary association of 7 independent emirates.
- In both countries the individual states/emirates saw there was a political and economic gain to unifying and ceding control to a central government for joint protection from foreign intervention, and to reign in destructive barriers to trade between states/emirates.
- The USA had George Washington; the UAE had Sheik Zayed. Both founding leaders were highly respected by large majorities of their citizens.
- The USA and the UAE both experienced huge immigration -- the difference here being that in the UAE few of these immigrants have gained citizenship.
- In the USA and the UAE the ethnic and sectarian diversity within each state/emirate was not dissimilar to the diversity between the states/emirates.
- In the USA and the UAE states/emirates were delegated considerable discretion to handle local affairs locally.
- The US left some questions of major conflict unresolved. Less than 100 years after its founding, a very bloody civil war was fought over those issues. When that war ended the central government gained considerable power, including a greatly expanded ability to tax -- and thereby redistribute. In the UAE 90% of the oil wealth is in Abu Dhabi and it has been used for the same redistributive purposes as well as a carrot and stick to defuse conflict between emirates.
Abu Dhabi citizens, among the world's wealthiest people, can buy homes without royal approval for the first time in 34 years.The entire article is worth reading for a perspective on wealth of the Abu Dhabi emirate. Illustration:
Sheikh Khalifa bin Zayed al-Nayhan, president of the United Arab Emirates and ruler of the capital city of Abu Dhabi, on Aug. 13 ended a law that allowed only royal family members and their associates to own land. The change may extend a real-estate boom in the city, where 250,000 residents had per-capita oil revenue of $115,000 last year.
The land decree is the biggest step toward opening Abu Dhabi's economy since the November death of Sheikh Zayed bin Sultan al-Nahyan, who ruled the emirate for 40 years. The U.A.E., created in 1971, is benefiting from record oil prices and billions of dollars of property investment.
Gaining the right to buy land is ``good for the economy and opens more opportunities for locals,'' Rashid Darwish al-Ketbi, whose family has lived in Abu Dhabi for three generations, said in an interview on Aug. 16. ``It's taken 25 years of debate to come to this decision. If we didn't do it now we would never do it.''
. . .
Abu Dhabi's ruling family rescinded the right to buy and sell land in the early 1970s, when local Bedouins migrating to the city from the desert were sold worthless plots at unfair prices, said al-Ketbi, who owns a 30-story apartment block in neighboring Dubai, which already allowed private ownership of land. Al-Ketbi is also a director of Union National Bank in Abu Dhabi.
Citizens of Abu Dhabi are the wealthiest Arabs based on oil revenue per native resident last year. By comparison, residents got $37,000 each from oil in Qatar and $6,000 in Saudi Arabia. The Dubai-based Middle East Strategy Advisors estimates Abu Dhabi and Qatar's native population to be 250,000, while that of Saudi Arabia is 17.5 million.Abu Dhabi produces about 90 percent of the UAE's oil; about half of the native population of the UAE resides in Abu Dhabi.
Tuesday, August 23, 2005
Many housemaids are now expressing a preference for one nationality or another in personal adverts that are on display in some of Dubai's shops. For example, there is the "experienced maid" who is seeking "immediate employment with accommodation from a European family".
Another Sri Lankan maid who claims 12 years' experience in looking after children is looking for "full-time employment with an American or British family with sponsorship". When asked why she was advertising for an American or a European family, Francesca, a 37-year-old Filipina, said it was "just the Filipino way".
"Some of the families from other countries pay you less salary but make you work harder," she said. Francesca, who is currently in the UAE on a visit visa, said she would also happily work for a Chinese family, having spent 16 years employed by one in the past.
Radhika, 45, a Sri Lankan maid, said she preferred working with British, European and even Indian families because they treated maids well.
"I have experience working with these nationalities and it is quite good. I worked for three years for a British family in Dubai before they moved to Qatar. They treated me quite well. I was paid Dh1,400 a month. I used to get weekly days off and gifts for Christmas," she said. Radhika said she ironed, cleaned and babysat for the British family and the working hours were not excessive.
Quoting, emphasis added:
On a recent trip to Dubai, William P Kistler, European president of the Urban Land Institute, an international research body advocating best practises in land use, met with both public and private sector representatives. Generally, he was impressed by what he saw but had serious reservations about Palm Jumeirah.
"Palm Jumeirah is a peninsular, with one way in and out," he observes. "The question of how the road provision is going to connect into the transit infrastructure is something that we got a not very satisfactory answer to."
He predicts bottlenecks just exiting each of the 18 fronds of the palm, the longest of which has 154 homes. Then all that traffic has to get on to the trunk, where more vehicles will join, and then ashore. Though the five lanes in each direction leading to and from Palm Jumeirah appear generous, this connects to Sheikh Zayed Road, Dubai's main highway where traffic moves as slowly as water down a blocked drain [an exaggeration, but it can be quite congested at peak hours as regularly reported in Gulf News].
Two further major road projects are to be built behind the Sheikh Zayed Road - but so are 100 proposed residential towers housing up 40,000 people, right at the head of the palm. "People were wondering if the infrastructure was sustainable, even before they announced the construction of the Palm Jumeirah," says Mr Kistler.
Mr. Kistler is good at avoiding dangling participles. Perhaps the fronds will silt up and you'll be able to walk to shore.
Read the whole thing - including a debate over the number of residences and hotels by completion. Thanks to Desert Idleness for the link.
From the August 13 issue of Gulf News, emphasis added:
The law also states that non-UAE nationals shall have the right to own surface property, but not the land itself, in investment areas. They shall have the right to arrange all their properties on it (surface) and to derive benefit from the real estate based on a long-term land title agreement which shall last for 99 years, or a long-term surface ownership agreement of 50 years renewable for the same period, subject to the agreement of both parties.Note the law is applies only to the emirate of Abu Dhabi; it is not a national law governing land ownership in the UAE.
Anybody who has the right to benefit from the real estate both the land and its surface for a period exceeding 10 years shall have the right, even without due permission from the property owner, to act on it, including the right to mortgage it. However, the owner of the property shall not mortgage it unless he gets approval from the one who has the right of benefit of the property or the surface. In both cases, the law says, both parties have the right to agree on the contrary.
I don't share Matthew Simmons's angst, but I admire his style. He is that rare doomsayer who puts his money where his doom is.
After reading his prediction, quoted Sunday in the cover story of The New York Times Magazine, that oil prices will soar into the triple digits, I called to ask if he'd back his prophecy with cash. Without a second's hesitation, he agreed to bet me $5,000.
. . .
I'm just following the advice of a mentor and friend, the economist Julian Simon: if you find anyone willing to bet that natural resource prices are going up, take him for all you can.
Julian took up gambling during the last end-of-oil crisis, in 1980, when experts were predicting a new age of scarcity as the planet's resources were depleted by the growing population. Julian had debunked these fears in "The Ultimate Resource," the bible of Cornucopian economics, which showed how human ingenuity had kept driving down the price of energy and other natural resources for centuries.
He offered to bet the pessimists that oil or any other resource they chose would be cheaper, in real terms, at any date they picked in the future. The ecologist Paul Ehrlich, author of "The Population Bomb" and "The End of Affluence," took up his offer and chose copper, tin and three other metals worth $1,000 in 1980.
When the famous bet was settled 10 years later, the value of the metals had declined by more than half. As usual, people had found new ways to get the metals as well as cheaper substitutes, like the fiber optic cables that replaced copper telephone wires.
Tyler Cowen reports Emiratis are into vacationing in rainy spots.
Quoting the editorial:
One 'trick' that has come in handy for these lawless elements has been highlighted in the Press. Agents of a company would hire a group of labourers, and once they arrive in the country, the company would transfer them to anywhere they wanted within the UAE, and after opening a file against the labourers inform the authorities that the labourers had absconded, that the company had no knowledge of their whereabouts. This is just one 'trick' from the bag of dirty tricks that these illegal traders in visas have adopted. There are others with the help of which they commit a crime and then try to absolve themselves of blame, and escape legal responsibility.Work visas are scarce and have a market value. A company can get more visas from the Ministry of Labour by transferring workers to another part of the UAE, perhaps to another company and then - with the worker unawares - report that the worker has absconded and cannot be located. If it is the worker who holds the visa, and the law allowed workers to change employers, then the value of the visa would be rebound to the worker in the former of higher wages as workers sold themselves to the highest bidder.
The question is, how long would these lawless elements in the country's fabric be given a free run, to carry on with their illegal acts? We think there's a crying need for stricter measures, and punishments to deter the lot.
Note that all companies in UAE have at least 50 percent Emirati ownership.
Quoting from the editorial:
UAE already has a woman minister. Last month, by giving unhappy wives the right to end their marriages, the draft personal status law gave women power another boost.One lesson: never confuse the UAE with the KSA. Please.
Now, with the appointment of several women as administration directors and section heads, females are set to play a more effective role in Dubai Public Prosecution, a key segment of the emirate's justice system.
This is a welcome move as it works well for a rapidly developing emirate such as Dubai to make prudent use of its human resources, without a gender bias.
Quoting, emphasis added:
Preliminary figures provided by the UAE's Ministry of Interior indicate that around 3,000 children are currently involved in camel racing, of whom around 2,800 are aged under 10 years old. With UNICEF's technical assistance, the UAE's Ministry of Interior plans to review these figures in a survey of camel jockeys. "We applaud these bold initiatives by the UAE, on the one hand cracking down on the import and employment of children as camel jockeys, and on the other hand working with the countries from which the children came to ensure a safe return to the children's families.The UAE has made a start: 51 out of 3,000. Earlier other children were repatriated to their home countries. There's still a long way to go.
The BBC noted in July that "Using children has officially been banned in the UAE since 1980. Earlier this year it tightened the rules, banning under-16s and those lighter than 45kg (100lb) from racing."
. . .
UNICEF announced this month that the United Arab Emirates is acting implement a new law that bans children camel jockeys for the traditional camel racing sport.
Earlier this month, August 11, the first group of Bangladeshi camel jockeys has been repatriated from the United Arab Emirates (UAE) and arrived safely in Dhaka.
The thirty six former camel jockeys aged between 4 and 15 were greeted by the State Minister of Home Affairs, Md. Lutfozzaman Babar and UNICEF country representative Morten Giersing at Zia International airport after their flight from Abu Dhabi.
A further 15 children were also repatriated bringing the number of children who arrived today [8/22/2005 ] from the UAE to 51.
"The priority for these children now is that they be rehabilitated and reintegrated into the family, their local communities and Bangladesh society. Their safety and well-being is our focus now," said Mr Giersing.
In May of this year the government of the UAE Government banned camel racing with the use of underage jockeys - that is, children under the age of 16. Most of these children received little or no pay, had no access to education, were starved before races to keep their weight down and were separated from family and culture.
Some of these children were trafficked from Bangladesh, others were sent there to earn money for their families back home and others were used as underage jockeys to earn money for the family living in the UAE.
What will the parents do when the child is repatriated? Send them out to work in the next best alternative?
Of the children still in the UAE, how are they being treated by their employer now that their usefulness to the employer has been lost (to the extent the law is enforced)?
Labels: camel jockeys
Read it all. Via Cafe Hayek whose post on the subject (Adam Smith's hand on the gas pump) is also recommended.
Monday, August 22, 2005
Today, nine years after his lunch with Mr. Greenspan and five years after the markets finally did crash, Mr. Shiller is sounding the same warning for real estate that he did for stocks. In speeches, in television and radio interviews and in a second edition of his prophetic 2000 book, "Irrational Exuberance," he is arguing that the housing craze is another bubble destined to end badly, just as every other real-estate boom on record has.Although I remain convinced the U.S. is in a housing bubble, it is odd that Shiller's buying and holding real estate.
These, in short, are his second 15 minutes of gloom. He predicts that prices could fall 40 percent in inflation-adjusted terms over the next generation and that the end of the bubble will probably cause a recession at some point.
Despite being a boyish-looking 59-year-old academic economist with a halting speaking manner, he has become the bugaboo of the multibillion-dollar real-estate industry.
. . .
Most people have never looked at decades and decades of home prices, because such data have been almost impossible to find. Stock-market charts often go back almost a century. Housing charts typically start sometime in the distant decade of the 1970's.
But Mr. Shiller has unearthed some rare historical housing data for other countries. Using old classified advertisements, he was then able to fashion a chart for the United States that goes back to the 19th century.
It all points to an unavoidable truth, he says. Every housing boom of the last few centuries has been followed by decades in which home values fell relative to inflation. Over the long term, the portion of income that families spend on their shelter stays about the same.
Builders become more efficient, as they are doing today. Places that were once sleepy hinterlands, like the counties south of San Francisco or a patch of desert in southern Nevada, turn into bustling centers that take pressure off prices elsewhere. Even now, the United States remains a mostly empty nation.
"This is the biggest boom we've ever had," said Mr. Shiller, who bought into the boom himself in 2002, with a vacation home near one of Connecticut's Thimble Islands.
Mr. Shiller has little company for his radical notion that house prices could fall by 40 percent. Many economists say that interest rates are low enough and demand for housing in big urban areas is high enough to keep from prices from falling very far. Mr. Shiller himself confesses to some doubt.
"I don't have any certainty," he said. "I have a lot of humility" about any prediction.
"We do have a shortage of land in the prestige areas, and so there is a potential for them to go up," he added. "But I just know that the trend over the last century has been for new prestige areas to appear."
A new report by Madar Research Group urges GCC and Arab markets to open up their telecommunications industry, end monopolies, and in so doing give customers the service they deserve faster, cheaper and better service. Competition, the report says, leads to lower, more aggressive pricing, better service and more targetted marketing.Countries that liberalize the mobile sector may also be foregoing the option of shutting down mobile communications in the event of a popular uprising. (We saw the power of this technology in the Orange Revolution and the Cedar Revolution.) Such a choice may signal that governments are making a democratic move, a willingness to expose themselves to the judgment of citizen opinion.
Madar Research claim they have proved it by examining the effect of new entrants into closely regulated markets in the Arab world. The study focused on the market changes and growth witnessed in Morocco, Jordan, Kuwait and Bahrain all of which have moved away from a monopolistic structure of the local mobile sector. According to the study, the liberalisation of the mobile sector in all four countries led to a huge increase in market uptake, offering significant benefits to customer.
In 2000, the year when a second mobile carrier entered their telecommunication markets, Morocco and Jordan witnessed a 683 per cent and 250 per cent increase respectively in the number of subscribers. While Kuwait registered a subscription growth of 87 per cent in the year the second mobile carrier entered the market, Bahrain recorded a 47 per cent rise.
JEDDAH — Saudis are taking up jobs that earlier they did not even think of as they felt these were below their dignity. They were guided by their own perceptions as well as by the prevailing society's distorted way of looking at some jobs as adoptable and others as "taboo".I note that per capita average income in Saudi Arabia is 1/5 to 1/4 of what it is the UAE. This average includes nonnationals. Further, in the UAE nonnationals make up 80 percent of the population whereas in Saudi Arabia they are in the minority. Thus, the necessity of broadening attitudes on respectable work is not as pressing in the UAE nationals as it is for Saudi Arabians. Yet, attitudes among Emiratis (and their families) are changing, albeit slowly.
They have now come to realise that economic development and growth depends on hard work and not on superficial feelings about what status a particular job lends to the worker.
A Saudi and his family have not only taken up some such jobs but are also proud of doing so, according to a report in the Arabic daily Al-Hayat.
Raed, 35, does not feel embarrassed to work as a personal escort. He has asked his three wives to work with him as female escorts for Saudi families and as babysitters for their children.
No worries: people respond to incentives
What most of these doomsday scenarios have gotten wrong is the fundamental idea of economics: people respond to incentives. If the price of a good goes up, people demand less of it, the companies that make it figure out how to make more of it, and everyone tries to figure out how to produce substitutes for it. Add to that the march of technological innovation (like the green revolution, birth control, etc.). The end result: markets figure out how to deal with problems of supply and demand.
Which is exactly the situation with oil right now.
Read it all. Be sure to follow the links to the posts on peak oil by James Hamilton (Econbrowser).
Sunday, August 21, 2005
But is the issue whether the earth will be warmer over the next decade or is it whether human activity is a sizeable cause of warming?
When I read about this research I was as impressed as Mahalanobis. I told my wife. Her reaction: "This is news to you?"
Intended and unintended
And who suffers? The consumer, the citizens.
Quoting; emphasis added:
The UAE's imports exceeded Dh185 billion last year. The imports have grown rapidly over the past few years due to a constant growth in the non-oil economy, which accounted for more than a fifth of the UAE's total imports of goods, according to statistics by Arab Monetary Fund (AMF).
Dubai handles about 73 per cent of UAE's total foreign trade. The emirate's total imports reached Dh116.5 billion in 2004 with 16 per cent growth in foreign trade, according to a report by Dubai Chamber of Commerce (DCCI).
The import trend surged tremendously as population has increased and goods are re-exported. The UAE has emerged as a major re-export hub with 72 per cent of goods imported being re-exported to 160 countries.
According to another report by Emirates Industrial Bank, recent trends show sharp increase in imports. Growth in import demand is now keeping pace with the GDP growth and expansion of the non-oil sector. However, this rise in imports has been cushioned by an even larger increase in re-exports as UAE is the third largest re-exporter in the world after Singapore and Hong Kong.
Topics covered today: (1) nonnational whose employer is ill-treating him, (2) an American seeking advice on starting a business in the UAE, (3) nonnational with a work visa wants to know the rules for bringing his family to the UAE, (4) US citizen divorcing a UAE national wants to know if she can still visit the UAE, (5) rules for changing jobs without a ban, and (6) consequences of a nonnational working without a work visa.
About 80,000 companies in the UAE are in violation of the government's emiratisation policies and labour laws according to a recently published report. A senior official also said that many companies that appear to work along the lines of the Labour Ministry's new company categorisations only exist on paper. The official, who did not wish to be identified, was responding to a report published yesterday by the Arabic daily, Al Ittihad, which listed the numbers of companies in the newly implemented categorisation system.Category A firms are full compliance with emiratization rules. Categories are further explained here.
Companies are categorised by their application of emiratisation policies and labour laws. Category A pays the least transaction fees, Category C, the most.
According to the labour ministry database, there are 440,000 companies registered in the UAE. About 81.5 per cent of those companies, some 359,000, are in category A. But the official said many of those companies had closed down. "The only reason why they were put in category A was because they have no employees and so they've got no fines, and no problems with emiratisation or the nationality quota rules," he said. He could not say how many such companies were in category A, but he said the majority of category A companies employed less than four people and so were exempt from mixed-nationality guidelines or emiratisation policies.It's not just about employing nationals, but also about uni-nationality workforces:
"They don't represent most of the companies employing expatriates," he said. Statistics indicate that only 18 per cent of expatriates, 450,000 people, work for category A companies, out of a registered expatriate labour force of 2.5 million. The official said the real number was "probably 10 per cent less than that". He said most companies were actually in category C, some 44,000.
Category C companies have 75 per cent or more of its workforce from one nationality, or have violated emiratisation policies, or have employed workers with violations against them.UPDATE: Today's KT defines categories A, B, and C here.
"The least amount of companies are in category B," he said. There are about 36,000 companies in this category.
The official said the Ministry would not reconsider forcing some companies to have a mixed-nationality workforce or to employ UAE nationals. Company representatives have repeatedly said that for most, it is impossible to reach category A. One complained that cafeterias, cleaning and construction companies, relying on low-skilled workers, would never make it to category A.
But the official said it was "their problem to deal with".
"Most sectors don't have to emiratise, they just have to have a mixed nationality workforce.
"An Indian cafeteria can employ some Pakistanis," he said.
Residents yesterday called for the establishment of a body to monitor unnecessary rises in rent in the emirate. According to them, the absence of such an organisation has been encouraging landlords and other private real estate agencies to increase annual rents for their properties whenever they wish.Mr. Ragunath's landlord apparently does not fear that tenants will leave, probably because there aren't apartments available at the same rent that are better maintained. From this perspective, Mr. Ragunath wants something without paying for it.
. . .
Another resident called for an organisation responsible for both the monitoring of rent and checking maintenance and conditions of buildings.
M.A. Ragunath said: "The maintenance of the building I live in is very poor. We have problems almost every day. A poor sanitary system is the biggest problem. We keep on at the maintenance people, but they don't care."
As the population of the UAE continues to grow rapidly -- due to large numbers of foreigners obtaining work visas -- the demand for housing grows. This pushes up the price of all housing including existing rental property and raises the return to investment in housing. The higher return induces new construction which over time will bring prices back down.
Thus, it is not simply a matter that owners can "increase annual rents for their properties whenever they wish." There needs to be an increase in demand. As renters find they cannot find vacancies at current rent levels, owners find they raise rents without losing renters. Market rents will rise until there is no one who cannot find an apartment who is willing to pay the market rent.
For a statement on the popularity of economists go here.
UPDATE: This story in today's Khaleej Times says an update in federal law governing landlord-tenant relations is in the works. It states further that regarding existing law
the tenant has the right to complain if the rent was increased by over 20 per cent over the actual rent every two years. They stated that some tenants had filed complaints and that the department had redressed the situation as per the laws.But enforcement is an issue:
In the event the contract was for two years or less, the landlord shall maintain the right to increase the rent specified in the contract once every two years within the limit of 20 per cent. The two-year period, shall either, commence from the time the contract was concluded or from the date the last rent increment was effected. In all cases the landlord shall inform the tenant of his desire to increase the rent at least three months before the expiry of the contract.”That sounds not merely whimsical but seemingly abusive. Let's walk through this:
But when the tenant rejects the increase, the landlord simply abstains from renewing the contract. Now the tenant who has refused to accept the proposed increase in rent will have to look for another apartment and later be obliged to pay to the landlord the money for declining the apartment, which in most cases are high and equivalent to a year's rent.
Although it is illegal for the landlord to ask the tenant to vacate the apartment, the Department of Social Services and Commercial Buildings (DSSCB) did not do anything to address the issue. After all, the tenant would be the biggest loser, and will subsequently have to accept whimsical rent increases.
- After 2 years the landlord offers to renew your contract but at a higher rent
- You decline the offer
- The landlord charges you a year's rent for declining the apartment
The abuse comes in if the renter is mislead into believing that this law limiting prices increases is enforced at little or no cost to the renter. If it is actually difficult or impossible to have this law enforced, then the mislead renter will not anticipate the potential for abuse built into the contract whereby the owner can use the non-renewal penalty to squeeze more out of the renter.
The government promises free education to nationals in government institutions of higher education, but now rations it. I wonder what criteria is used to ration the seats. I wonder why the level of funding is not sufficient to fulfill the bargain made with students that if they qualify they will get a seat. Has a decision been made that HCT will have to find other means of funding if it wishes to admit all qualified students? These means could include: private sector business funding, or shifting some of the financial burden to students.
The Higher Colleges of Technology will have to turn away qualified students because at its current level of funding it cannot provide them with quality education, said the UAE Minister of Education and the colleges' Chancellor.
Speaking at the Higher Colleges of Technology's (HCT) 18th annual conference, Shaikh Nahyan Bin Mubarak Al Nahyan said: "This year we will have to turn away many qualified students because at our current levels of funding we cannot provide them with the quality education that is our hallmark.
"This issue is very serious and is commanding all our attention. We will continue to make the case that sufficient funding is essential to the success of HCT. We are exploring all possible options to secure the necessary funding."
Saturday, August 20, 2005
Government figures show that the money transferred by Moroccans living abroad is the second source of hard currency and the second source of income to the country. Observers estimate the number of Moroccans, at home, who depend on these transfers, directly or indirectly, amounts to 8 million.
Supply and demand: still alive and kicking
If by "dent demand" you mean decrease demand or decrease the quantity demanded, then this is no surprise. It is confirmation that rising oil prices are being driven by increasing demand for oil and not by manipulation of markets.
"Indians are not preferred to apply."
The UAE is 80 percent nonnationals. Many companies prefer to hire from one nationality or segregate nationalities by job classification. Classified ads are often very blunt about preferences by ethnicity.
The country's population is very heterogeneous, but within jobs it often is not. However, in my department we have a team of 15 with members from US, Egypt, Jordan, Armenia, Iran, Korea, Sri Lanka, Bolivia, Turkey and New Zealand.
Due to new technology, foreign refrigeration units can be inspected without unloading at port. This saves the costs of transfer to local coolers including damage to perishable goods in hot weather. Local coolers are unhappy with the loss of business and want the Customs Authority to reverse its decision to adopt the new technology. What's good for consumers isn't always good for business. It is good that the Customs Authority has said it will stand by its decision.
Friday, August 19, 2005
The Dubai government hopes its Dubailand project, which includes several theme parks, will lift the number of international tourists visiting the emirate from 6m this year to 15m in 2010.15m by 2010 from a base of 6m in 2005? I am doubtful the past rate of growth can be sustained. A park 3 times the size of Disney World? The small mind of this mere economist boggles.
Salem bin Dasmal, chief executive of Dubailand, says the resort will be "one of the top five destinations in the world for family entertainment, tourism and leisure". The project was inspired by the Walt Disney World resort in Florida where Disney operates a cluster of parks that have helped make the US state one of the world's top tourist destinations. "It's what we want to do in Dubai - develop an all-encompassing leisure destination for tourism," he says.
Although the Dubai government is providing the infrastructure for Dubailand, private operators are being contracted to run the attractions and other facilities, which include a dinosaur park run by the UK's Natural History Museum and a Manchester United football academy.
Mr bin Dasmal says Dubailand, at 3bn sq ft (270m sq m), will be three times the size of Disney's Orlando resort.
. . .
The project will include opportunities for hotel development, which could offset the costs of building the theme parks and remove some of the investment risk associated with such projects.
Mr bin Dasmal is confident that Dubailand will be profitable because demand for tourism in the Middle East is growing at such a rapid rate.
"Theme parks in more mature markets will achieve [annual returns of] 3 or 4 per cent," he says. "A well-designed theme park in Dubai would achieve better returns than an international equivalent because there is little local competition and lots of demand. We are on target to hit 15m tourists in Dubai by 2010. All these families are coming here and they need entertainment."
There's a huge amount of construction going on, fueled by the sale of oil. There's a considerable amount of personal services to the well-to-do nationals, services provided by non-nationals who comprise at least 3 quarters of the population and remit much of their income back to their home countries. Yes, Dubai attracts tourism and has been able to fill its hotels, but there's no way to tell whether these enterprises are profitable or are underwritten by oil money.
Most of UAE's diversification comes from investing in companies and real estate around the developed world. At least that's my guess.
Is The Emirates Economist outsourced? Considering you'd have to pay me to stop doing it myself it seems unlikely.
Tuesday, August 09, 2005
In an earlier statement, Gosaibi warned unemployed Saudis that his ministry would consider only serious job seekers. “Any Saudi who demands a salary not in line with his qualification and training or refuses to join training courses or shifts from one place to another or rejects any job other than government jobs will be considered as not serious,” he explained.
“The ministry will not be responsible for the employment of those who are not serious as it cannot force them to work,” he added.
. . .
Saudis between the ages of 16 and 25 accounted for 68 percent of the total registered job seekers; of that number, 88 percent were unmarried and 57 percent had less than a secondary education. Fourteen percent of the job seekers held bachelor or higher degrees.
. . .
At least 30 percent of employees in companies with 20 or more workers must be Saudi by the middle of next year. He said the ministry would continue to control recruitment abroad in order to limit dependence on foreign workers. Last year, recruitment visas for private companies were cut by 17.8 percent to 684,201 from 832,244 the year before.
. . .
In a related development, the Labor Ministry in coordination with the Riyadh Chamber of Commerce and Industry has produced a plan for the gradual Saudization of operation, maintenance and cleaning jobs in some 500 private firms which will create jobs for 150,000 Saudis. The Cabinet has instructed the companies specializing in operation, maintenance and cleaning to allocate five percent of their jobs to Saudis in the first year in order to attain 50 percent Saudization within five years. In accordance with the plan, the government will instruct companies receiving public contracts to employ qualified Saudis. The companies will only get visas for foreigners in the absence of Saudi workers.
Monday, August 08, 2005
File under: Dubai, big
Project height of the Burj Dubai: A secret, but in excess of 600 meters. Some estimate 800 meters. The current record holder is the Taipei 101 which is 509 meters.
UMM AL-QUWAIN, United Arab Emirates -- The Khor al-Beidah lagoon is a pristine tidal flat teeming with wildlife, including endangered birds, sea turtles and manatee-like dugong that swim among its tangles of mangroves.
But a bevy of dredges and construction gangs are about to begin transforming a 1,500-acre parcel into a $3.3 billion luxury conglomeration of homes, shops, marinas and beach resorts aimed at foreign buyers and tourists.
The crown jewels of the development are private villas to be built on artificial islands with gated access _ and views over one of the few remaining mangrove archipelago left in the Persian Gulf.
Developers say the waterfront complex, called Umm Al-Quwain Marina, will skirt the mangroves and leave most of the 20 square miles of wetland untouched.
"Our aim is to create a community of special neighborhoods bordering an open stretch of water with views of the marina against a backdrop of the gulf," says Mohammed Ali Alabbar, chairman of Emaar, the Middle East's largest developer.
Environmentalists are aghast. They fear construction and people, cars and boats will drive off Khor al-Beidah's internationally famous wildlife, including birds that migrate from Siberia to Africa and the rare socotra cormorant that nests almost exclusively on the Arabian Peninsula.
. . .
The leaders of Umm Al-Quwain, however, are eager to bring big projects to their emirate, which is the least-developed of the seven states in the United Arab Emirates. It has little of the energy wealth of Abu Dhabi, the largest of the emirates, and few of the tourists of Dubai, one of the world's fastest-growing cities and tourist destinations.
. . .
The once empty Emirates coast is awash in construction that has buried coral reefs, mangrove swamps and other wildlife zones. The tidal lagoon here is one of the last such areas in the country, especially since the partial bulldozing of a mangrove swamp on the east coast.
. . .
What you're seeing in this region is on par with development in North America 100 years ago," says Robert Booth, Emaar's executive director.
The IMF would like to see the UAE diversify its sources of government revenue. I don't see the why, nor do those interviewed by the Khaleej Times.
Women from across the country held a demonstration in the capital recently, handing out fliers to passersby and wading into traffic to give pamphlets to drivers, to demand that Iraq's constitution contain an article ensuring equality for women. The most recent draft of the document lacks such an article, and would potentially place a number of matters of personal status under sharia, or Islamic law, thus putting women at a legal disadvantage in matters such as inheritance, divorce, and child custody.
The women held their demonstration in Firdos Square, less than a kilometer away from where Mijbil Issa, one of the constitutional committee members, was assassinated the same day. The demonstration was one of the few places in Iraq that Naghem Khadim, a women's right's activist from the conservative Shiite holy city of Najaf, two hours south of the capital, could find herself in the minority while wearing a hijab.
"We are not against sharia. But it should not be the only basis for writing the constitution. The liberals should be allowed to go ahead with their own ethics," Khadim said.
She also said that January's elections, for which the law stipulated that a third of the candidates should be women, were marred by the fact that many of the candidates remained anonymous because of security concerns, and that women had, as a result, elected women that did not represent them.
"We are under pressure from religious extremists and tribal influences," Khadim said. "We would like to get away from those and to have our human rights and to be treated like women anywhere else in the world."
The committee to draft the constitution now consists of nine women and 61 men. Four of the women on the council represent conservative Islamic political parties, which have been at the head of the push for sharia to play a major part in the document.
Sunday, August 07, 2005
While the rest of the world says the U.S. culture is in decline, David Brooks sees evidence that it has improved considerably in the last 20 to 30 years. Quoting:
Thanks to Lawrence of Salt Springs for the link.
many of the indicators of social breakdown, which shot upward in the late 1960's and 1970's, and which plateaued at high levels in the 1980's, have been declining since the early 1990's.
I always thought it would be dramatic to live through a moral revival. Great leaders would emerge. There would be important books, speeches, marches and crusades. We're in the middle of a moral revival now, and there has been very little of that. This revival has been a bottom-up, prosaic, un-self-conscious one, led by normal parents, normal neighbors and normal community activists.
The first thing that has happened is that people have stopped believing in stupid ideas: that the traditional family is obsolete, that drugs are liberating, that it is every adolescent's social duty to be a rebel.
The second thing that has happened is that many Americans have become better parents. Time diary studies reveal that parents now spend more time actively engaged with kids, even though both parents are more likely to work outside the home.
Third, many people in the younger generation, under age 30 or so, are reacting against the culture of divorce. They are trying to lead lives that are more stable than the ones their parents led. Post-boomers behave better than the baby boomers did.
Fourth, over the past few decades, neighborhood and charitable groups have emerged to help people lead more organized lives, even in the absence of cohesive families.