THE LAW AND THE COMMON MAN: R.I.P. COMMON SENSE
The Act altering the provisions of the Criminal Procedure Code was passed without any debate in Parliament. We therefore, do not know the reasons for this being passed so quickly.
In the light of the terrorist attacks and the prevailing sense that the law enforcement machinery needed to be strengthened, to protect those who pay taxes and abide by the law, this one comes as a shocker.
Laws are meant to capture the reality of the times and seek to make the world around us safer. They should provide the tax paying, law abiding citizen an environment where he can exercise his rights to a peaceful life and pursue happiness without restraints that are unfair within the meaning of natural justice. This Act seems to do just the opposite and is devoid of any "common sense".
President okays 7-year hitch for arrests
19 Jan 2009, 0048 hrs IST, Vishwa Mohan, TNN
NEW DELHI: The recently-revamped Criminal Procedure Code, which divests police of arrest powers in cases where maximum sentence is upto seven years, become law with President Pratibha Patil finally giving her assent last week.
The presidential assent, which came nearly three weeks after the bill was sent to her after getting it passed from Parliament, has now paved the way for the government to notify it.
Once the law, CrPC (Amendment) Act 2008, becomes effective, the police, instead of arresting the accused, will be obliged to issue him/her a "notice of appearance" for any offence punishable with imprisonment up to seven years. The person can be arrested only if he/she does not appear before the police in response to the notice.
Seven years or less is the maximum penalty for a host of offences, including attempt to commit culpable homicide, robbery, attempt to suicide, kidnapping, voluntarily causing grievous hurt, cheating, outraging a woman's modesty and death caused by negligence.
The radical change in the CrPC has, however, drawn flak from a number of Bar associations across the country. Lawyers -- who also observed strike in various courts after the bill was passed in Parliament -- argue that the amendment (in Section 41) doing away with mandatory arrest provisions would remove fear from the minds of criminals who would misuse the provisions under the garb of personal liberty.
Under Section 41, as it originally stood, a police officer may, without an order of a magistrate and without a warrant, arrest any person who has been concerned in any cognisabale offence.
Some chief ministers had also voiced concerns on the amendment during a conference on internal security here on January 6.
Allaying those concerns, home minister P Chidambaram wrote to all CMs a week later on January 13 and explained why it was necessary to bring such changes in the CrPC.
Referring to Section 41 of the Act, Chidambaram said in his letter, "This provision was severely criticised as capable of being misused and, in fact, was being misused." To substantiate his point, he advised CMs to refer to reports of the Law Commission and the Malimath Committee and also the judgment of the Supreme Court in D K Basu case which laid down guidelines for effecting arrest.
Advising CMs to see the amendments in the light of those suggestions and guidelines, Chidambaram, however, assured them that the government was ready to revisit the provisions, if it became necessary, in the next session of Parliament.
The amendment in CrPC, however, allows police to arrest without an order from a magistrate and without a warrant a person who commits a cognisable offence "in the presence of a police officer".
It also enables arrest of "a person who has committed a cognisable offence (punishable for a term which may be less than 7 years or extend upto 7 years) if there is a reasonable complaint or credible information or a reasonable suspicion and the police officer is satisfied that such arrest is necessary for proper investigation of the offence or for preventing tampering with the evidence". The only additional requirement in such cases is that the police officer will have "to record his reasons" for making the arrest.
The law further says that a police officer arresting a person will have to bear his identification badge or tag. Besides, a memorandum of arrest shall be prepared, witnessed and countersigned. The person arrested shall be told that he has the right to inform a relative or friend.
vishwa.mohan@timesgroup.com
Whatis not reported or addressed:
WHAT IS THE DIFFERENCE BETWEEN A "POLICE OFFICER" AND "POLICE" EFFECTING ARREST? WHAT SHOULD A CONSTABLE OR CONSTABLES DO, WHEN THEY SEE GOONS MOLESTING A WOMAN? GIVE THEM 'A NOTICE OF APPEARANCE'? WE OFTEN SEE CONVICTS 'GOING UNDERGROUND', 'JUMPING PAROLE', AND 'GIVING COPS THE SLIP'. SHOULD THEY BE GIVEN 'NOTICE OF APPEARANCE'? CAN MOST OF THE CASE SHEETERS IN THIS COUNTRY READ? DOES THIS LEGISLATION CONFUSE AND CREATE MORE IMPEDIMENTS, OR DOES IT MAKE THE LAW LIFE EASIER FOR THE COMMON MAN?
TILL DATE ONLY ONE OR MORE OF THE BLAST CASES HAVE BEEN SUCCESSFULLY PROSECUTED AND CAPITAL PUNISHMENT METED OUT.THERE ARE MORE THAN 40 ODD BLAST CASES IN MUMBAI AND ELSEWHERE THAT HAVE NOT BEEN CLOSED. EVEN HIGH PROFILE CASES LIKE THE ARUSHI MURDER CASE, RAPE OF THE TOURISTS IN GOA AND ELSEWHERE,THE NOIDA PANDHER MASS PEADICIDE, ETC ARE HANGING FIRE.
THERE IS NO POINT EXTRADITING CRIMINALS AND ACCUSING PAKISTAN, WHEN WE CANNOT BRING THOSE WITH US IN CUSTODY TO JUSTICE AND CLOSURE AND FOLLOW UP ON 'TRAINING CAMPS' IN THE COUNTRY (WHICH ACCORDING TO SOME MEDIA ARTICLES, EXISTS IN VAGAMON IN KERALA FROM WHERE SOME TERRORISTS WERE ARRESTED ON THEIR WAY TO KASHMIR).
R.I.P. Common Sense.The response of a Common Man.
We mourn the passing of a beloved old friend, Common Sense, who has
been with us for many years. No one knows for sure how old he was, since his
birth records were long ago lost in bureaucratic red tape.
Common Sense took a beating when you couldn't defend yourself from a burglar
in your own home and the burglar could sue you for assault.
Common Sense lost the will to live as religion became a business and
criminals received better treatment than their victims and ended up representing them in houses meant to pass laws.
Common sense finally gave up when it found that its god-father Justice, was keeping a mistress called Crime and spent most of his time in her twin sister Corruption’s house.
Common Sense was preceded in death by his parents Truth and Trust, by his
wife Discretion his daughter, Responsibility, and his son Reason.
He is survived by his siblings, “Human rights for every Tom, Dick, (Prick and Harami)”, “Keep stray dogs on the streets (No, we cannot adopt them full- time)”, “My ancestors were ill treated, so now you guys compensate and suffer”, “My religion is not numerically popular, I need to be treated differently”, “I was born in this latitude-longitude, so rest of you guys can bounce”, “I see him on the idiot box, so he is God and the Truth”.
God save us, Eeshwaro Rakshathu, Eeshwar hee Raksha,. Khuda Hafeez, Budhham Sharanam Gachami.
(Inspired from a similar article that appeared in the media in UK. This is not an original piece and has been adapted to the current situation here in India)
Sunday, January 18, 2009
Saturday, January 17, 2009
IN INDIA, YOU STILL GET JOBS
'In India, you'll still get a job'
James JoseSun, Jan 18 10:53 AM
New Delhi, Jan 18 (IANS) The 'India Shining' story may be under stress by the ongoing economic crisis, but some sectors and career options still hold promise for job seekers this year, according to human resource experts.
Leading advisory Boston Consulting Group says India will have a demand for 85-90 million people across various sectors, and the majority of the demand will come from high-growth industries like IT, outsourcing, banking, retail and healthcare.
Similarly, a survey by HR consultancy Manpower projects hiring to rise steadily by around 18 percent from this quarter in many sectors, signifying that jobs in India may not be entirely affected by the financial turmoil in rich nations.
'India poses a far more positive outlook as compared to what has been happening across the world,' said Cherian Kuruvila, director operations, Manpower India, adding that seven percent gross domestic product (GDP) growth for the country showed that the economy remained healthy.
'Employers in the mining and construction industries as also services sector are especially looking to scale up,' Kuruvila told IANS, but added that new jobs won't be distributed evenly through all regions and industries.
India has a work force of 484 million people, of which 273 million work in rural areas, 61 million in manufacturing and about 150 million in services, says the Boston Consulting Group that recently conducted a study on the country's services sector.
'Going forward, the Indian economy is likely to be overwhelmingly dependent on the growth of services. More than 70 percent of India's incremental GDP and 60 percent of new jobs over the next five years are expected to be generated by services.'
A survey across the Asia-Pacific region by TNS, a market research and business analysis firm, with Gallup International, a global human resource consulting firm, also threw up interesting findings.
Sixty-two percent of the Indians polled felt they would be able to hold on to their jobs in 2009 and the 57 percent who expected unemployment to rise did not not consider they would be the ones affected.
'It seems, despite the slowdowns and reports of downsizing, there is an overall confidence among the employed in India that 'My job is secure! Difficulties, if any, are for others, not me',' said TNS India executive director Chhavi Bhargava.
Experts concede that the present financial meltdown has raised doubts over the performance of some industries and its impact on salaries and perks, but hope Indian businesses will come out of the slump earlier than their counterparts overseas.
'The impact on salary was felt in 2008 and it may continue till some time. The payouts were significantly lower than the 15-200 percent bonus payouts in 2007,' said Absolute HR Services chief executive Kunal Banerji.
'Gone are the days of experimentation with jobs. I would advise employees not to be adventurous checking different jobs. Stability is the mantra,' said Confiar Consultants managing director Vivek Ahuja.
Apart from advising employees to keep their jobs this year, HR consultants also feel these are also the times when people will turn to age old values and ethics and play by the book.
'The old adages like no substitute for hard work and no short-cuts to success are back in vogue,' Banerji told IANS. 'Stay hungry for work or stay hungry is the mantra for corporate India.'
James JoseSun, Jan 18 10:53 AM
New Delhi, Jan 18 (IANS) The 'India Shining' story may be under stress by the ongoing economic crisis, but some sectors and career options still hold promise for job seekers this year, according to human resource experts.
Leading advisory Boston Consulting Group says India will have a demand for 85-90 million people across various sectors, and the majority of the demand will come from high-growth industries like IT, outsourcing, banking, retail and healthcare.
Similarly, a survey by HR consultancy Manpower projects hiring to rise steadily by around 18 percent from this quarter in many sectors, signifying that jobs in India may not be entirely affected by the financial turmoil in rich nations.
'India poses a far more positive outlook as compared to what has been happening across the world,' said Cherian Kuruvila, director operations, Manpower India, adding that seven percent gross domestic product (GDP) growth for the country showed that the economy remained healthy.
'Employers in the mining and construction industries as also services sector are especially looking to scale up,' Kuruvila told IANS, but added that new jobs won't be distributed evenly through all regions and industries.
India has a work force of 484 million people, of which 273 million work in rural areas, 61 million in manufacturing and about 150 million in services, says the Boston Consulting Group that recently conducted a study on the country's services sector.
'Going forward, the Indian economy is likely to be overwhelmingly dependent on the growth of services. More than 70 percent of India's incremental GDP and 60 percent of new jobs over the next five years are expected to be generated by services.'
A survey across the Asia-Pacific region by TNS, a market research and business analysis firm, with Gallup International, a global human resource consulting firm, also threw up interesting findings.
Sixty-two percent of the Indians polled felt they would be able to hold on to their jobs in 2009 and the 57 percent who expected unemployment to rise did not not consider they would be the ones affected.
'It seems, despite the slowdowns and reports of downsizing, there is an overall confidence among the employed in India that 'My job is secure! Difficulties, if any, are for others, not me',' said TNS India executive director Chhavi Bhargava.
Experts concede that the present financial meltdown has raised doubts over the performance of some industries and its impact on salaries and perks, but hope Indian businesses will come out of the slump earlier than their counterparts overseas.
'The impact on salary was felt in 2008 and it may continue till some time. The payouts were significantly lower than the 15-200 percent bonus payouts in 2007,' said Absolute HR Services chief executive Kunal Banerji.
'Gone are the days of experimentation with jobs. I would advise employees not to be adventurous checking different jobs. Stability is the mantra,' said Confiar Consultants managing director Vivek Ahuja.
Apart from advising employees to keep their jobs this year, HR consultants also feel these are also the times when people will turn to age old values and ethics and play by the book.
'The old adages like no substitute for hard work and no short-cuts to success are back in vogue,' Banerji told IANS. 'Stay hungry for work or stay hungry is the mantra for corporate India.'
IPL vs ICL Why the first mover came last and a Business Man's Guide to IPL
I was pleasantly surprised to see that SOLUS, a magazine brought out by the Advertising Club of Mumbai,had carried my article on the relative performance of the Indian Premier League and the Indian Cricket League.This was initially published in June 2008.
Given that the next season the Indian Premier League is due this summer, it may make for an interesting read. The ICL had its second season this winter and the results could be evaluated against this backdrop.
CLICK HERE
The full article on the IPL which is a "Guide to the Businessman" is available on clicking this link
CLICK HERE
Vinod Natesan
Mayan Consultants International
natesanvinod@rediffmail.com
QUICK PROFILE:
Mr. Vinod Natesan, Proprietor of Mayan Consultants International, is a post graduate of the Institute of Rural Management Anand. In the 19 years in the industry, he has been associated as a marketing consultant with the World Bank and NDDB, has serviced ITC, Procter & Gamble Unilever and Telco accounts while working for FCB, Lowe and Leo Burnett. He headed the Mumbai branch of PSL McCann Erickson, winning numerous creative awards like the Clio for work done on the Guestline Hotels and the Mahindra brands. In 2000, he joined, JWT as Assoc Vice President & Strategy Planning Director on the De Beers account and was part of the team that won the Effies and the Subash Ghoshal trophy for the Nakshatra launch. In 2002, he shifted to the Middle East and has been handling marketing assignments with retail groups like the Landmark Group, with Tourism promotion bodies in Tunisia and with tourism related authorities in Kerala. His last stint was with the Emirate of Ras al Khaimah, where he set up the Tourism Office and the Media City and left it as the Head of Operations, RAK Investment Authority. He has also been a visiting faculty in most of the management institutes in Mumbai since 1996. He currently operates out of Mumbai and is involved with projects in Trivandrum, Hamburg, Jharkhand and Mumbai. These include project feasibility and appraisal studies, advisories on market entry into India, tourism infrastructure related surveys and diagnostics and also advertising and marketing strategy related assignments.
PUBLICATIONS:
http://www.agencyfaqs.com/perl/news/index.html?sid=17427
http://www.adclubbombay.com/index.php/solus/511-why-the-first-mover-came-last
BLOGS:
http://vinodnatesansportfolio.blogspot.com
http://vnreferences.blogspot.com/
http://mayanmuse.blogspot.com
http://corpgypsy.blogspot.com/
http://moviebizz.blogspot.com/
WEB SITE
www.vinodnatesan.com
Given that the next season the Indian Premier League is due this summer, it may make for an interesting read. The ICL had its second season this winter and the results could be evaluated against this backdrop.
CLICK HERE
The full article on the IPL which is a "Guide to the Businessman" is available on clicking this link
CLICK HERE
Vinod Natesan
Mayan Consultants International
natesanvinod@rediffmail.com
QUICK PROFILE:
Mr. Vinod Natesan, Proprietor of Mayan Consultants International, is a post graduate of the Institute of Rural Management Anand. In the 19 years in the industry, he has been associated as a marketing consultant with the World Bank and NDDB, has serviced ITC, Procter & Gamble Unilever and Telco accounts while working for FCB, Lowe and Leo Burnett. He headed the Mumbai branch of PSL McCann Erickson, winning numerous creative awards like the Clio for work done on the Guestline Hotels and the Mahindra brands. In 2000, he joined, JWT as Assoc Vice President & Strategy Planning Director on the De Beers account and was part of the team that won the Effies and the Subash Ghoshal trophy for the Nakshatra launch. In 2002, he shifted to the Middle East and has been handling marketing assignments with retail groups like the Landmark Group, with Tourism promotion bodies in Tunisia and with tourism related authorities in Kerala. His last stint was with the Emirate of Ras al Khaimah, where he set up the Tourism Office and the Media City and left it as the Head of Operations, RAK Investment Authority. He has also been a visiting faculty in most of the management institutes in Mumbai since 1996. He currently operates out of Mumbai and is involved with projects in Trivandrum, Hamburg, Jharkhand and Mumbai. These include project feasibility and appraisal studies, advisories on market entry into India, tourism infrastructure related surveys and diagnostics and also advertising and marketing strategy related assignments.
PUBLICATIONS:
http://www.agencyfaqs.com/perl/news/index.html?sid=17427
http://www.adclubbombay.com/index.php/solus/511-why-the-first-mover-came-last
BLOGS:
http://vinodnatesansportfolio.blogspot.com
http://vnreferences.blogspot.com/
http://mayanmuse.blogspot.com
http://corpgypsy.blogspot.com/
http://moviebizz.blogspot.com/
WEB SITE
www.vinodnatesan.com
Wednesday, January 14, 2009
KANAI KUNHIRAMAN -Splendour in Stone
Splendour in Stone
Kanai Kunhiraman is one of the celebrated sculptors in Kerala, India. I had the good fortune to receive an award for “creative writing” from him in the late 70’s. This was when Kanai was a Professor at the Fine Arts College for a while.
Kanai's Oeuvre:
“Yakshi” ( a fairy, or a female extra terrestrial being) : Done in 1969, it was made of concrete. It depicts a woman in a seated posture,her legs spread leaving her womb exposed, almost as if she is giving birth. The statue is gigantic in proportions and is placed in the Malampuzha gardens near the famous dam. Behind the sculpture, the peaks of the Western Ghats rise in quiet majesty carpeted by lush green forests. The river that has been harnessed by man with the dam, completes the backdrop. It is nature at its majestic best and the sculpture captures the beauty and the power of nature to provide life and nurture it. Given that the female form in all its voluptuousness was in the nude, it became a controversy. However, wiser counsel prevailed and the statue was not clothed!! Kanai mentioned that nature had to be shown it in natural form and he like many, conceive it as a female life giving form.
“Kadal Kanyaka” (Mermaid): Done subsequently and placed at Shanghumugham beach in Trivandrum (Thiruvananthapuram), this depicts the sea and therefore the female form is shown as reclining. Kanai explains that the Mermaid was postured as horizontal,in harmony with the Ocean, unlike the “Yakshi” ,which was vertical, since the backdrop there was the mountains.
“Shanghu" (The Conch):is at the Tourist Village in Veli near Trivandrum (Thiruvananthapuram). It denotes wealth from the natural elements, which is what the tourism effort is all about. Once again, the setting is natural with the "conch" being placed between water and land.
Kanai holds that nature is the mother of man and that all ‘art’ in turn, is created by man. To signify the connection therefore, his sculptures are kept unfettered in the open, where man can access it without any barriers. He does not want his sculptures to be "caged like animals in a zoo" within the confines of museums.
He has done may bronze sculptures, including the famed one of EMS Namputhiripad (The first elected Communist Chief Minister in a democratic India). He mentions "Mookola Perumal" as a favourite. Here he used three pillars to denote the three stages of time and a globe to represent earth(If I am right). On another occasion, he used “fertility” as a symbol while designing the frontal landscaping for a building belonging to a fertilizer company(details not available currently).
Kanai mentions his visits to Europe as extremely educative and counts Professor Butler and Henry Moore as great influences. He also rates Raja Ravi Varma, the painter very highly. He believes that art has to reflect the culture and nature around us and should be simple. He does not follow any “movements” like post- modernism, etc for the sake of it.
Those of you who follow Malayalam can click on the link below to view a very interesting interview with the man himself.
http://video.webindia123.com/interviews/sculptors/kanaikunchiraman/index.htm
Dubai flooded with labour complaints, cancels work permits and visas
ANI
Thu, Jan 15 10:40 AM
Nicosia, Jan 15 (ANI): The Dubai Ministry of Labour has been flooded with thousands of labour complaints, as a very big number of workers and employees have been laid off, or have been made redundant in the wake of the global financial crisis.
The majority of these workers are Indians. Furthermore, it is estimated that about 1,500 work permits and visas are being canceled in Dubai each day.
Feeling the pinch of global slowdown many companies, mainly in the construction sector, have stopped all new employment and most of them have already laid off hundreds of workers.
What is more worrying, however, is the fact some companies is flagrantly violating labour laws by not paying workers their wages, or by forcing them to take unpaid leave.
Dozens of companies have given redundant employees a grace period of two to three months to look for alternative work. Jobs are, however, rare to find with most companies freezing recruitment.
According to unofficial estimates, the Ministry of Labour cancels on average 1500 working permits and visas a day.
At the same time, the Ministry has to examine an unprecedented number of complaints from workers.
The complaints have to be processed before the working permit is cancelled.(ANI)
Thu, Jan 15 10:40 AM
Nicosia, Jan 15 (ANI): The Dubai Ministry of Labour has been flooded with thousands of labour complaints, as a very big number of workers and employees have been laid off, or have been made redundant in the wake of the global financial crisis.
The majority of these workers are Indians. Furthermore, it is estimated that about 1,500 work permits and visas are being canceled in Dubai each day.
Feeling the pinch of global slowdown many companies, mainly in the construction sector, have stopped all new employment and most of them have already laid off hundreds of workers.
What is more worrying, however, is the fact some companies is flagrantly violating labour laws by not paying workers their wages, or by forcing them to take unpaid leave.
Dozens of companies have given redundant employees a grace period of two to three months to look for alternative work. Jobs are, however, rare to find with most companies freezing recruitment.
According to unofficial estimates, the Ministry of Labour cancels on average 1500 working permits and visas a day.
At the same time, the Ministry has to examine an unprecedented number of complaints from workers.
The complaints have to be processed before the working permit is cancelled.(ANI)
Monday, December 22, 2008
Consumer Protection Act 1994- Advertising to children
The author of this article Sakuntala Narasimhan received a Government of India National Award for Consumer Protection in 1994.
A little girl lisps "I love you" and names a brand of synthetic soft drink concentrate. Sales shoot up. There is no real fruit juice in it, no nourishment for growing bodies, yet no children's party is complete without this drink. The girl in the ad goes on to make the kind of money that even tenured professors do not earn, and lured by this money other parents try to push their pre-school progeny into advertising offices.
A beverage promoted as a "complete food and nourishing drink" puts out an advertisement with the photographs of six toppers of the higher secondary examination, implying that drinking the product ensures a high rank. Following a complaint by the Consumer Education and Research Centre (CERC) of Ahmedabad, pointing out that the ad plays on the anxiety of children as well as parents and that it is hard work rather than merely consuming some brand of drink that determines rank, the Monopolies and Restrictive Trade Practices Commission (MRTP) ordered the withdrawal of the advertisement. The Advertising Standards Council of India (ASCI) also agreed that the use of the photographs of rank holders was misleading and an unfair practice.
These are but two examples of how children are targeted and manipulated for the sake of profits. Children under the age of 15 make up nearly 40 per cent of our population. That means close to 400 million, a constituency of consumers larger than the population of the U.S., Canada and Australia combined. Apart from being a large potential market (for everything from bottled drinks to instant noodles and soaps) children also constitute tomorrow's generation - and advertisers know that consumption habits and preferences developed in childhood get carried into adulthood.
We arm children with road sense so that they will not be run over by speeding traffic outside, but we do not think of arming them in the same way against bulldozing ads or unscrupulous commercial practices that seek to manipulate their priorities and desires. And with television now in every home, the inveiglement is taken right into millions of living rooms where children become a captive (and impressionable) audience. Even toddlers who cannot yet read, have been known to recognise catchy jingles and visuals.
Which may not be a bad thing, provided ads gave out unbiased information. But do they? Cola drinks contain synthetic chemical sweeteners (far cheaper than conventional sweeteners) which are merely empty calories and provide no nutrients. Their long-term effects on human metabolism are also not fully known. With the equivalent of eight teaspoons of sugar a bottle, these bottled drinks also pose a threat to teeth. The caffeine content in them likewise is unhealthy for children. Yet children go for cola drinks because of massive advertising, sponsorship of sports events like cricket matches, the use of sportsmen as models in ads, and contests with attractive prizes.
In one such contest which promised mini-bats signed by Gavaskar in exchange for bottle caps, schoolboys in the posh Cuffe Parade area in Mumbai began to drink fizzy cola by the crateful (thereby spoiling appetite and health) while their peers, from middle-class families, began to rummage through garbage dumps looking for bottle tops, till a group of horrified mothers complained to a consumer organisation about the warped sense of values that such contests were promoting.
So who safeguards children's interests as consumers, in terms of health, quality of life and value systems, in a scenario where the annual outlays on advertising run to several hundred crores? In a country where children's per capita consumption of milk is 10 per cent less than the nutritional requirement, how ethical is it to target and lure them with fizzy drinks?
Our Constitution enshrines the state's obligations towards children and we have ratified international conventions and covenants that seek to uphold children's rights to safe growth into adulthood. Yet, their interests get eroded when lack of awareness on the one hand and lax enforcement of protective laws on the other result in the sale of sweets and ice lollies containing prohibited colours (sunset yellow, for example, which is a carcinogen) outside school gates. Often "medical" formulations banned abroad are permitted to be prescribed here. (Periactin, promoted as a "growth stimulant", is banned by the U.S. Food and Drug Administration, yet it was prescribed for my son by a doctor in Mumbai.)
Lead in the paint on toys can cause brain damage. A TV ad on Doordarshan used to show a little girl pretending to have a cough because she wanted to suck lozenges with a pepperminty taste - but cough drops which contain subclinical doses of epherdrine or menthol which can harm. Monosodium glutamate, which enhanced flavour, added to instant soup packets can harm infants. It was only after consumer activitists' pressures that the packets now contain labelling warning that it is "unsuitable for infants under 12 months and pregnant women."
G.S.Baine/Fotomedia
Growth hormones in chicken feed led to 3,000 children in Puerto Rico developing abnormal sexual changes, after eating chicken. Recently Germany banned the use of soft plastic teethers containing the chemical pthalates. Clear plastic feeding bottles are also banned due to the possibility of the plastic leaching while heating the formula but, the Consumer Guidance Society of India points out that most people in India do not even know of these hazards.
The Thalidomide tragedy is perhaps the most horrific example of how children can be harmed by new chemical formulations of which we do not know the long term effects. Thousands of deformed children were born to women who were prescribed the drug as a cure for morning sickness during pregnancy.
Children become victims in another sense too - one boy jumped out of a window last year in U.P. and died while imitating a TV stunt in an advertisement. Another was grievously injured trying to "fly" out like Shaktimaan in the popular TV serial. Children "consume" not only food and formulations but also attitudes and ideas, in the name of fantasy, without knowing where to draw the line.
Advertisements for a variety of "institutes" that promise to offer courses of study that "guarantee a job" proliferate, but not all such institutions are genuine. Gullible students and their parents, under tension, enroll and pay up fat fees, often to discover that the deal is bogus. Claiming a refund is often a futile exercise. This is a particularly reprehensible rip-off. CERC took one such institute, which was trying to cash in on the IIT aura (by naming itself the Indian Institute of Computer Management) to court and obtained a ruling asking the institute to change its name to avoid misleading students. Many "diplomas" and "certificates" from dubious institutions are worthless, but lack of awareness leads to much avoidable distress and loss of money.
Sweden has banned all TV advertisements aimed at children. Germany had an entire batch of bicycle helmets for children recalled after Test magazine found them substandard. We too have broadcasting codes and laws for protecting consumers, but we have not thought of initiating imaginative measures using modern communication techniques, to develop consumer consciousness in children. In England, for instance, a school teacher asked a boy who lost a tooth during class, to put the tooth in a cup of cola drink and leave it over the weekend. On Monday morning the class could see that the tooth was not only discolored but also corroded. The message, about the effects of cola drinks on teeth, went home clearly, without a didactic lecture from the teacher.
Children in a Bangalore school did a "project" where they counted the number of pages in notebooks and found that there were only 186 instead of the 200 printed on the cover. At a national seminar on "Children as Consumers" held at Ahmedabad by the CERC, students came up with perceptive comments and suggestions - one 9-year-old asked why Sachin drank cola if it was bad for the teeth; another wondered why his syllabus taught him about our Constitution in civics but not about consumer awareness "which would be more useful." Another wanted to know if she could "go to the police" to complain about cheating, when the grocery store sells flour that has worms.
Children learn young. And if the sellers seek to catch them young, why can't we catch them young too, arm them against practices and pressures that are not in their best interests?
Credit : The Hindu.
Source:Advertising Professionals of India - Sugandha Dubey
A little girl lisps "I love you" and names a brand of synthetic soft drink concentrate. Sales shoot up. There is no real fruit juice in it, no nourishment for growing bodies, yet no children's party is complete without this drink. The girl in the ad goes on to make the kind of money that even tenured professors do not earn, and lured by this money other parents try to push their pre-school progeny into advertising offices.
A beverage promoted as a "complete food and nourishing drink" puts out an advertisement with the photographs of six toppers of the higher secondary examination, implying that drinking the product ensures a high rank. Following a complaint by the Consumer Education and Research Centre (CERC) of Ahmedabad, pointing out that the ad plays on the anxiety of children as well as parents and that it is hard work rather than merely consuming some brand of drink that determines rank, the Monopolies and Restrictive Trade Practices Commission (MRTP) ordered the withdrawal of the advertisement. The Advertising Standards Council of India (ASCI) also agreed that the use of the photographs of rank holders was misleading and an unfair practice.
These are but two examples of how children are targeted and manipulated for the sake of profits. Children under the age of 15 make up nearly 40 per cent of our population. That means close to 400 million, a constituency of consumers larger than the population of the U.S., Canada and Australia combined. Apart from being a large potential market (for everything from bottled drinks to instant noodles and soaps) children also constitute tomorrow's generation - and advertisers know that consumption habits and preferences developed in childhood get carried into adulthood.
We arm children with road sense so that they will not be run over by speeding traffic outside, but we do not think of arming them in the same way against bulldozing ads or unscrupulous commercial practices that seek to manipulate their priorities and desires. And with television now in every home, the inveiglement is taken right into millions of living rooms where children become a captive (and impressionable) audience. Even toddlers who cannot yet read, have been known to recognise catchy jingles and visuals.
Which may not be a bad thing, provided ads gave out unbiased information. But do they? Cola drinks contain synthetic chemical sweeteners (far cheaper than conventional sweeteners) which are merely empty calories and provide no nutrients. Their long-term effects on human metabolism are also not fully known. With the equivalent of eight teaspoons of sugar a bottle, these bottled drinks also pose a threat to teeth. The caffeine content in them likewise is unhealthy for children. Yet children go for cola drinks because of massive advertising, sponsorship of sports events like cricket matches, the use of sportsmen as models in ads, and contests with attractive prizes.
In one such contest which promised mini-bats signed by Gavaskar in exchange for bottle caps, schoolboys in the posh Cuffe Parade area in Mumbai began to drink fizzy cola by the crateful (thereby spoiling appetite and health) while their peers, from middle-class families, began to rummage through garbage dumps looking for bottle tops, till a group of horrified mothers complained to a consumer organisation about the warped sense of values that such contests were promoting.
So who safeguards children's interests as consumers, in terms of health, quality of life and value systems, in a scenario where the annual outlays on advertising run to several hundred crores? In a country where children's per capita consumption of milk is 10 per cent less than the nutritional requirement, how ethical is it to target and lure them with fizzy drinks?
Our Constitution enshrines the state's obligations towards children and we have ratified international conventions and covenants that seek to uphold children's rights to safe growth into adulthood. Yet, their interests get eroded when lack of awareness on the one hand and lax enforcement of protective laws on the other result in the sale of sweets and ice lollies containing prohibited colours (sunset yellow, for example, which is a carcinogen) outside school gates. Often "medical" formulations banned abroad are permitted to be prescribed here. (Periactin, promoted as a "growth stimulant", is banned by the U.S. Food and Drug Administration, yet it was prescribed for my son by a doctor in Mumbai.)
Lead in the paint on toys can cause brain damage. A TV ad on Doordarshan used to show a little girl pretending to have a cough because she wanted to suck lozenges with a pepperminty taste - but cough drops which contain subclinical doses of epherdrine or menthol which can harm. Monosodium glutamate, which enhanced flavour, added to instant soup packets can harm infants. It was only after consumer activitists' pressures that the packets now contain labelling warning that it is "unsuitable for infants under 12 months and pregnant women."
G.S.Baine/Fotomedia
Growth hormones in chicken feed led to 3,000 children in Puerto Rico developing abnormal sexual changes, after eating chicken. Recently Germany banned the use of soft plastic teethers containing the chemical pthalates. Clear plastic feeding bottles are also banned due to the possibility of the plastic leaching while heating the formula but, the Consumer Guidance Society of India points out that most people in India do not even know of these hazards.
The Thalidomide tragedy is perhaps the most horrific example of how children can be harmed by new chemical formulations of which we do not know the long term effects. Thousands of deformed children were born to women who were prescribed the drug as a cure for morning sickness during pregnancy.
Children become victims in another sense too - one boy jumped out of a window last year in U.P. and died while imitating a TV stunt in an advertisement. Another was grievously injured trying to "fly" out like Shaktimaan in the popular TV serial. Children "consume" not only food and formulations but also attitudes and ideas, in the name of fantasy, without knowing where to draw the line.
Advertisements for a variety of "institutes" that promise to offer courses of study that "guarantee a job" proliferate, but not all such institutions are genuine. Gullible students and their parents, under tension, enroll and pay up fat fees, often to discover that the deal is bogus. Claiming a refund is often a futile exercise. This is a particularly reprehensible rip-off. CERC took one such institute, which was trying to cash in on the IIT aura (by naming itself the Indian Institute of Computer Management) to court and obtained a ruling asking the institute to change its name to avoid misleading students. Many "diplomas" and "certificates" from dubious institutions are worthless, but lack of awareness leads to much avoidable distress and loss of money.
Sweden has banned all TV advertisements aimed at children. Germany had an entire batch of bicycle helmets for children recalled after Test magazine found them substandard. We too have broadcasting codes and laws for protecting consumers, but we have not thought of initiating imaginative measures using modern communication techniques, to develop consumer consciousness in children. In England, for instance, a school teacher asked a boy who lost a tooth during class, to put the tooth in a cup of cola drink and leave it over the weekend. On Monday morning the class could see that the tooth was not only discolored but also corroded. The message, about the effects of cola drinks on teeth, went home clearly, without a didactic lecture from the teacher.
Children in a Bangalore school did a "project" where they counted the number of pages in notebooks and found that there were only 186 instead of the 200 printed on the cover. At a national seminar on "Children as Consumers" held at Ahmedabad by the CERC, students came up with perceptive comments and suggestions - one 9-year-old asked why Sachin drank cola if it was bad for the teeth; another wondered why his syllabus taught him about our Constitution in civics but not about consumer awareness "which would be more useful." Another wanted to know if she could "go to the police" to complain about cheating, when the grocery store sells flour that has worms.
Children learn young. And if the sellers seek to catch them young, why can't we catch them young too, arm them against practices and pressures that are not in their best interests?
Credit : The Hindu.
Source:Advertising Professionals of India - Sugandha Dubey
Friday, December 19, 2008
DUBAI - THE IMPACT OF THE GLOBAL MELTDOWN
A selection of articles in the media regarding the situation in Dubai.
Dubai faces meltdown, expat job losses feared
Dubai, Nov 12 : For the first time, fears have been openly voiced over a business meltdown in Dubai due to the global finanacial crisis, after a steep fall in realty stocks, the stalling of real estate sales, sacking of 200 employees by a leading developer and tightening of credits by banks.
In a front page report, the Gulf News reported that the Dubai stock market plummeted more than seven per cent yesterday as investors, gripped by worries of a real estate crash and a grim regional and global economic outlook, continued to be on a selling spree.
Many Indian developers like Shobha, stars like Shah Rukh Khan and expatriate businessmen have announced investments in the UAE and any likely meltdown will hit their business as well as job prospects of thousands of Indians and other expatriates.
It has been carnage in Dubai stock exchanges in the last few days as the worth of top government-owned real estate companies like Emaar, which had planned huge developments in India with a Calcutta-based real estate firm, continued rapid downward slide, declining 9.88 per cent to close at 3.74 Dirhams.
"Dubai is bearing the brunt of the regional and global market weakness... The market perception is that Dubai is seen as the "weakest link" within the GCC in this environment," said Khalid Masri, executive partner, Rasmala Investments. The combined loss of market capitalisation since last Sunday is about 65 billion Dirhams.
Vyas Jayabhanu, head of Abu Dhabi-based Al Dhafra Brokerage said a series of news yesterday created havoc. "Investors didn't take kindly to the news that real estate major Damac has laid off 200 employees. And then there was another big one that Emirates airlines profits dived by 88 per cent...Hence, investors, who came in today, did not believe Emaar chairman Mohammad Al Abbar's statement that UAE's GDP will contract from 14 per cent to nine per cent. They certainly feel it is going to be worse," he added.
In the last two months, expatriates, including a majority of Indians had sent home four billion Dirhams taking advantage of low rupee exchange value. Most of the funds were raised through easy personal loans from banks and any large scale layoffs will mean losses to banks.
Elsewhere in the region, a similar gloom pervades investors. Saudi Arabia's Tadawul Index closed 5.2 per cent down and Kuwait's stock exchange, the second largest in the Arab world, dropped 2.6 per cent. Qatar and Bahrain stock exchanges declined 6.25 per cent and 2.74 per cent, respectively.
Yesterday, leading UAE bank Mashreq announced that it was open to merger. Meanwhile, a top banker from cash rich Abu Dhabi, the CEO of Abu Dhabi Commercial Bank Ervin Enox said his bank will not allow defaults from Dubai-owned government companies on credit payments
Global financial crisis hits Dubai
Wednesday, November 12 2008
Dubai, Nov 12: Dubai city for the first time witnessed fear of financial meltdown on Tuesday, Nov 11 after the steep fall in realty stocks, the stalling of real estate sales, sacking of 200 employees by a leading developer and tightening of credits by banks. Also the fear was openly voiced over a business meltdown due to the global economic crisis.
On Tuesday, the Gulf News reported that the Dubai stock market plummeted more than seven per cent on Tuesday, Nov 11 as investors, gripped by worries of a real estate crash and a grim regional and global economic outlook, continued to be on a selling spree. Many Indian developers like Shobha, stars like Shah Rukh Khan and expatriate businessmen have announced investments in the UAE and any likely meltdown will hit their business as well as job prospects of thousands of Indians and other expatriates.
It has been carnage in Dubai stock exchanges in the last few days as the worth of top government-owned real estate companies like Emaar, which had planned huge developments in India with a Calcutta-based real estate firm, continued rapid downward slide, declining 9.88 per cent to close at 3.74 Dirhams.
"Dubai is bearing the brunt of the regional and global market weakness... The market perception is that Dubai is seen as the 'weakest link' within the GCC in this environment," said Khalid Masri, executive partner, Rasmala Investments. The combined loss of market capitalisation since last Sunday is about 65 billion Dirhams.
Vyas Jayabhanu, head of Abu Dhabi-based Al Dhafra Brokerage said a series of news yesterday created havoc. "Investors didn't take kindly to the news that real estate major Damac has laid off 200 employees. And then there was another big one that Emirates airlines profits dived by 88 per cent...Hence, investors, who came in today, did not believe Emaar chairman Mohammad Al Abbar's statement that UAE's GDP will contract from 14 per cent to nine per cent. They certainly feel it is going to be worse," he added.
In the last two months, expatriates, including a majority of Indians had sent home four billion Dirhams taking advantage of low rupee exchange value. Most of the funds were raised through easy personal loans from banks and any large scale layoffs will mean losses to banks.
Elsewhere in the region, a similar gloom pervades investors. Saudi Arabia's Tadawul Index closed 5.2 per cent down and Kuwait's stock exchange, the second largest in the Arab world, dropped 2.6 per cent. Qatar and Bahrain stock exchanges declined 6.25 per cent and 2.74 per cent, respectively.
On Tuesday, Nov 11 leading UAE bank Mashreq announced that it was open to merger. Meanwhile, a top banker from cash rich Abu Dhabi, the CEO of Abu Dhabi Commercial Bank Ervin Enox said his bank will not allow defaults from Dubai-owned government companies on credit payments.
Dubai realty meltdown stumps expat Indians
12 Dec 2008, 0530 hrs IST, Malena K Amusa, ET Bureau
NEW DELHI: When xxxx and xxxxxx moved from New York city to Dubai two years ago, they were greeted by the uncomfortable heat of
the desert emirate’s red hot property market. It took the couple, who are in their 30s and working for top corporations in Dubai, six months to secure an apartment mortgage as wealthy investors
from oil-rich Gulf neighbours and Russia were driving up property prices to dizzying heights. So, when they finally moved into their home earlier this year, they were elated.
But two weeks ago, they were facing a chilling new reality after the property market had cooled off substantially: they got a letter from their bank informing them that their monthly mortgage bill just went up from 18,000 dirham (dh) a month (Rs 2.47 lakh) to Dh 25,000 (Rs 3.43 lakh).
Citing global financial downturn, the bank, which takes its interest-rate cues from the cost of borrowing globally, had spiked the couple’s interest payment.
“Now, if one of us is laid off, we may have to give our keys to the bank,” rues xxxx Dubai — Asian realty’s ‘Promised Land’ — is showing symptoms of acute financial strain, causing big property developers like Nakheel to lay off hundreds, tycoons like Donald Trump to delay multi-million dollar projects, and average property buyers to balk at regulations that fail to shield investors from global fluctuations.
The oil-rich Gulf region, many had expected, would be spared the financial turmoil enveloping the rest of the world.
But crude oil prices fell from a peak of nearly $150 per barrel to less than $50, weakening Dubai’s financial backers and leaving the emirate, with little mineral wealth, in the doldrums.
“Unlike any part of the world, guys like me can’t walk out of a mortgage here,” says Abhy, a part-time property investor from Kochi, who wanted to protect his full identity. In July, Abhy, who works as a business consultant, invested 15% in cash in a 1,200 sq ft flat that cost Dh 1,700 per sq ft, in addition to getting a mortgage. His plan was to sell the flat in 2010 at a much higher rate. Today, he’s not sure he’ll get Dh 1,400 per sq ft even if he is lucky enough to find a buyer.
Abhy also had to give his bank an undated cheque for Dh 3.5 million, which the bank would cash in case he defaulted on his mortgage payments. That cheque would bounce, Abhy says. And most unsettling, his bank considers a change of job a default. A slowdown in Dubai’s economy could mean a fall from grace.
A recent report by UAE property assessment agency RichVille blames Dubai for doing little to protect investors such as Abhy.
“The central bank did not reduce its interest rates when all western countries reduced theirs,” the report said. Banks were discouraging construction and end-buyer finance “by significantly increasing interest rates, increasing required loan down payments to more than 35%, and finally making the terms for accepting loan applications very difficult.”
But hope seems to be on the horizon. Latest news reports indicate that banks are trying to make it easier to get a mortgage to spur buying.
And then there is the spectre of layoffs. Nakheel, one of the top three players in Dubai realty, laid off 500 employees — 15% of its workforce — in November. Morgan Stanley shed nearly 15% of its staff in Dubai and Lehman Brothers closed its office in Dubai’s financial district after it filed for bankruptcy protection in the US.
There are some lucky ones, too. Samir Sen, a civil engineer living in Dubai for 23 years, made a Dh 200,000 profit after buying a studio flat in 2006 and selling it last year. He’s now holding a second studio flat to develop and sell in two years. He is of the view that while credit is tightening, and people — who can’t afford to hold a home — struggle to sell, the housing market “is not going up or down; it’s stable.”
Venu Rajamony, India’s Consul General in Dubai, says the economy is strong, but adds that many Indians, mainly construction workers, are heading back home. There are 600,000 Indians living in Dubai, he said. Many are construction workers.
Abbas Ali Mirza, president of the Dubai-based Indian Business and Professional Council, an association of at least 700 business leaders, says: “Everything appears fine and normal.” Representatives of property development agencies Damac and Emaar declined to comment.
Meanwhile, XXXX and XXXXX consider their options. And one of them is to open a bedroom to a temporary tenant.
Dubai property giant sacks 500 as finance crisis bites
2008-11-30
DUBAI (AFP) - The Dubai property giant behind such grandiose projects as a one-kilometre tower and artifical palm-shaped islands said on Sunday it has fired 500 staff as the global economic crisis begins to bite in the oil-rich Gulf.
Government-controlled developer Nakheel, one of the biggest employers in the booming desert city-state, also said it would be scaling back work on some of its projects.
"Approximately 15 percent of the total workforce, which amounts to 500 employees, was made redundant," it said in a statement, describing the move as "a responsible action in light of the current global market conditions."
It is the largest job cut in the wake of the global financial meltdown to be announced in United Arab Emirates and in Dubai, a city of skyscrapers, opulent hotels and malls which hosts hundreds of thousands of foreign residents including Westerners and Asian workers.
"We have the responsibility to adjust our short term business plans to accommodate the current global environment," said an unnamed spokesperson quoted in the statement.
"The redundancies are indeed regrettable, but a necessity dictated by operational requirements which are in turn dependent on demand," the spokesperson added.
Earlier this month, Damac Group, owner of the region's largest private developer Damac Properties, said it cut 200 jobs or 2.5 percent of its workforce.
Nakheel is developing several iconic projects in Dubai, including three palm-shaped man-made islands, only one of which is completed, and a cluster of islands in the shape of a map of the world.
It also announced last month a jaw-dropping plan to build a one-kilometre-high (3,280 feet) tower which would overshadow the still unfinished Burj Dubai, already the tallest on earth.
Nakheel also develops residential and commercial property, whose sales thrived after the sector was opened to foreign investors a few years ago.
Last week, Nakheel jointly hosted a star-studded 20-million-dollar bash to celebrate the opening of the Atlantis Hotel on its Jumeirah Palm island, with a huge firework display.
Top officials in Dubai insist the emirate's real estate sector -- a major engine of economic growth in recent years -- will weather the global crisis, but investors appear to have lost confidence in the market which was until recently a great magnet for investments.
Mohammad Alabbar, head of Dubai's Advisory Council, which was formed to deal with the impact of the financial meltdown, hinted last week that Dubai's major developers will use their control over supply to curb an increasingly clear drop in property prices.
"Our priority is to manage supply in the real estate market to ensure equilibrium," he said.
Fears however loom over the future of Dubai's economy after a double-digit growth registered in the past few years, with concern rising over the emirate's accummulated foreign debt amid the global credit crunch.
The emirate's bourse has been taking severe beating since the beginning of the financial meltdown, mainly due to a nosedive in real estate shares.
Despite occasional surges, the Dubai Financial Market is now about 67 percent lower than its level at the the start of the year, while the market leader, Emaar property giant, has seen its shares drop to record lows.
Foreigners number over 4.7 million, or over 84 percent of the UAE population, while Indians alone account for 42.5 percent of all expatriates, according to an unofficial study released this year.
Expatriates from the Indian subcontinent and southeast Asia also make up around 75 percent of the workforce, the study said.
There are also about 120,000 Britons representing the largest Western community in the UAE, with 100,000 living in Dubai alone.
After months of press releases and government promises that there will be no such thing as a bubble in Dubai, the big boys of Dubai are finally saying, “Beam me up Scotty, I think I’m in trouble.”
“Trouble,” would be the understatement of the year, and the developers are making it clear they are not one whit interested in the fortunes of the smaller investor. Despite the recent introduction of laws written to protect smaller investors, Dubai’s property developers are thinking up new ways of avoiding any responsibility and screwing every last penny possible from the situation as fast as the new laws are passed.
MiNC, developer of Prodigy 1 in Jumeirah Village South has put a new proposal to their current investors:
Pay more than the agreed price, or we will cancel the project and keep your deposit.
The wording was slightly different, but that is what it amounts to. According to MiNC, two banks have withdrawn funding and “the project is no longer financially viable. Costs have increased to the extent that MiNC would make a significant and material loss if it were to build this project.”
Gulf News
It is actions such as this that will finally deflate what is left of the Dubai bubble. A lot of confusion is surrounding Article 11 under Law 13, which guarantees investors - “In the case of canceling the contract, the developer may retain 30 per cent of the ‘contract’s value’, and the rule of (30-70 per cent of the money paid) shall be applied on amounts exceeding 30 per cent.”
Key words here are “contracts value,” not “monies paid,” as the Article originally stated. Arguments abound and opinions are divided amongst those who feel that Dubai no longer needs outside investors and the emphasis of government intervention should be in favor of protecting the developers, and others feeling (as we do) that the smaller investor is vital if Dubai wishes to be anything more than a “Disneyland in the desert.”
As things stand at the moment, if a small investor defaults (as is starting to happen on a large scale), the developer keeps 100% of the money in some cases, and developers are simply refusing to answer questions or deal with inquiries. A number of smaller investors are attempting to band together in an effort to at least recover the “70% of monies paid.” One such group can be contacted here:
investorslaw13@hotmail.com
Elsewhere, prices are falling dramatically, with distressed properties being offered at 40% discounts on Palm Jumeirah, which is still massively over-priced. If falls in the US and Spain are any indicator, some analysts are expecting Dubai’s prices to fall anything as much as 60% in the next few months.
Other property websites are now starting to report on Dubai’s bursting bubble, and here is a selection:
Reuters - Dubai real estate suffers as distressed sales rise
AOL Dubai Property boom halts as prices fall and jobs go
According to Mohannad Sweid, CEO of Depa, some of Dubai companies are in “denial” about the viability of projects in light of the global financial crisis.
We are at the denial stage where lots of developers know for a fact that their projects should be cancelled and they’re either not announcing it or they’re saying it’s going to be delayed. We cannot deny the effect [the crisis] has been having, we are a part of this world and I believe it’s just not right to say we haven’t seen any impact. What we have had in the GCC in the last three years is the difference between reality and non-reality. Our market research showed there will be 280 new hotels built over four years within the GCC. That was advertised all the time… If we look at the reality - how many hotels have been delivered - it’s hardly more than five or six hotels a year.
In terms of risk to his own firm, Sweid was confident that infrastructure projects would still go ahead.
In this region, a lot of infrastructure is not developed yet and these elements of infrastructure have to be developed - it’s not a choice,” he said, citing Dubai’s new metro system as an example. He added that Depa was still on track for growth for next year, but the “fears” were for 2010 and 2011.
The real question is not whether the Dubai bubble has finally burst, but more how far it will deflate. With property prices quoted as having risen somewhere in the region of 76% over the last year, a major correction is likely. Already prices have fallen 40% in most developments, and we feel it is going to deflate a lot faster than it blew up.
Filed under Dubai by Mark Knowles
Dubai faces meltdown, expat job losses feared
Dubai, Nov 12 : For the first time, fears have been openly voiced over a business meltdown in Dubai due to the global finanacial crisis, after a steep fall in realty stocks, the stalling of real estate sales, sacking of 200 employees by a leading developer and tightening of credits by banks.
In a front page report, the Gulf News reported that the Dubai stock market plummeted more than seven per cent yesterday as investors, gripped by worries of a real estate crash and a grim regional and global economic outlook, continued to be on a selling spree.
Many Indian developers like Shobha, stars like Shah Rukh Khan and expatriate businessmen have announced investments in the UAE and any likely meltdown will hit their business as well as job prospects of thousands of Indians and other expatriates.
It has been carnage in Dubai stock exchanges in the last few days as the worth of top government-owned real estate companies like Emaar, which had planned huge developments in India with a Calcutta-based real estate firm, continued rapid downward slide, declining 9.88 per cent to close at 3.74 Dirhams.
"Dubai is bearing the brunt of the regional and global market weakness... The market perception is that Dubai is seen as the "weakest link" within the GCC in this environment," said Khalid Masri, executive partner, Rasmala Investments. The combined loss of market capitalisation since last Sunday is about 65 billion Dirhams.
Vyas Jayabhanu, head of Abu Dhabi-based Al Dhafra Brokerage said a series of news yesterday created havoc. "Investors didn't take kindly to the news that real estate major Damac has laid off 200 employees. And then there was another big one that Emirates airlines profits dived by 88 per cent...Hence, investors, who came in today, did not believe Emaar chairman Mohammad Al Abbar's statement that UAE's GDP will contract from 14 per cent to nine per cent. They certainly feel it is going to be worse," he added.
In the last two months, expatriates, including a majority of Indians had sent home four billion Dirhams taking advantage of low rupee exchange value. Most of the funds were raised through easy personal loans from banks and any large scale layoffs will mean losses to banks.
Elsewhere in the region, a similar gloom pervades investors. Saudi Arabia's Tadawul Index closed 5.2 per cent down and Kuwait's stock exchange, the second largest in the Arab world, dropped 2.6 per cent. Qatar and Bahrain stock exchanges declined 6.25 per cent and 2.74 per cent, respectively.
Yesterday, leading UAE bank Mashreq announced that it was open to merger. Meanwhile, a top banker from cash rich Abu Dhabi, the CEO of Abu Dhabi Commercial Bank Ervin Enox said his bank will not allow defaults from Dubai-owned government companies on credit payments
Global financial crisis hits Dubai
Wednesday, November 12 2008
Dubai, Nov 12: Dubai city for the first time witnessed fear of financial meltdown on Tuesday, Nov 11 after the steep fall in realty stocks, the stalling of real estate sales, sacking of 200 employees by a leading developer and tightening of credits by banks. Also the fear was openly voiced over a business meltdown due to the global economic crisis.
On Tuesday, the Gulf News reported that the Dubai stock market plummeted more than seven per cent on Tuesday, Nov 11 as investors, gripped by worries of a real estate crash and a grim regional and global economic outlook, continued to be on a selling spree. Many Indian developers like Shobha, stars like Shah Rukh Khan and expatriate businessmen have announced investments in the UAE and any likely meltdown will hit their business as well as job prospects of thousands of Indians and other expatriates.
It has been carnage in Dubai stock exchanges in the last few days as the worth of top government-owned real estate companies like Emaar, which had planned huge developments in India with a Calcutta-based real estate firm, continued rapid downward slide, declining 9.88 per cent to close at 3.74 Dirhams.
"Dubai is bearing the brunt of the regional and global market weakness... The market perception is that Dubai is seen as the 'weakest link' within the GCC in this environment," said Khalid Masri, executive partner, Rasmala Investments. The combined loss of market capitalisation since last Sunday is about 65 billion Dirhams.
Vyas Jayabhanu, head of Abu Dhabi-based Al Dhafra Brokerage said a series of news yesterday created havoc. "Investors didn't take kindly to the news that real estate major Damac has laid off 200 employees. And then there was another big one that Emirates airlines profits dived by 88 per cent...Hence, investors, who came in today, did not believe Emaar chairman Mohammad Al Abbar's statement that UAE's GDP will contract from 14 per cent to nine per cent. They certainly feel it is going to be worse," he added.
In the last two months, expatriates, including a majority of Indians had sent home four billion Dirhams taking advantage of low rupee exchange value. Most of the funds were raised through easy personal loans from banks and any large scale layoffs will mean losses to banks.
Elsewhere in the region, a similar gloom pervades investors. Saudi Arabia's Tadawul Index closed 5.2 per cent down and Kuwait's stock exchange, the second largest in the Arab world, dropped 2.6 per cent. Qatar and Bahrain stock exchanges declined 6.25 per cent and 2.74 per cent, respectively.
On Tuesday, Nov 11 leading UAE bank Mashreq announced that it was open to merger. Meanwhile, a top banker from cash rich Abu Dhabi, the CEO of Abu Dhabi Commercial Bank Ervin Enox said his bank will not allow defaults from Dubai-owned government companies on credit payments.
Dubai realty meltdown stumps expat Indians
12 Dec 2008, 0530 hrs IST, Malena K Amusa, ET Bureau
NEW DELHI: When xxxx and xxxxxx moved from New York city to Dubai two years ago, they were greeted by the uncomfortable heat of
the desert emirate’s red hot property market. It took the couple, who are in their 30s and working for top corporations in Dubai, six months to secure an apartment mortgage as wealthy investors
from oil-rich Gulf neighbours and Russia were driving up property prices to dizzying heights. So, when they finally moved into their home earlier this year, they were elated.
But two weeks ago, they were facing a chilling new reality after the property market had cooled off substantially: they got a letter from their bank informing them that their monthly mortgage bill just went up from 18,000 dirham (dh) a month (Rs 2.47 lakh) to Dh 25,000 (Rs 3.43 lakh).
Citing global financial downturn, the bank, which takes its interest-rate cues from the cost of borrowing globally, had spiked the couple’s interest payment.
“Now, if one of us is laid off, we may have to give our keys to the bank,” rues xxxx Dubai — Asian realty’s ‘Promised Land’ — is showing symptoms of acute financial strain, causing big property developers like Nakheel to lay off hundreds, tycoons like Donald Trump to delay multi-million dollar projects, and average property buyers to balk at regulations that fail to shield investors from global fluctuations.
The oil-rich Gulf region, many had expected, would be spared the financial turmoil enveloping the rest of the world.
But crude oil prices fell from a peak of nearly $150 per barrel to less than $50, weakening Dubai’s financial backers and leaving the emirate, with little mineral wealth, in the doldrums.
“Unlike any part of the world, guys like me can’t walk out of a mortgage here,” says Abhy, a part-time property investor from Kochi, who wanted to protect his full identity. In July, Abhy, who works as a business consultant, invested 15% in cash in a 1,200 sq ft flat that cost Dh 1,700 per sq ft, in addition to getting a mortgage. His plan was to sell the flat in 2010 at a much higher rate. Today, he’s not sure he’ll get Dh 1,400 per sq ft even if he is lucky enough to find a buyer.
Abhy also had to give his bank an undated cheque for Dh 3.5 million, which the bank would cash in case he defaulted on his mortgage payments. That cheque would bounce, Abhy says. And most unsettling, his bank considers a change of job a default. A slowdown in Dubai’s economy could mean a fall from grace.
A recent report by UAE property assessment agency RichVille blames Dubai for doing little to protect investors such as Abhy.
“The central bank did not reduce its interest rates when all western countries reduced theirs,” the report said. Banks were discouraging construction and end-buyer finance “by significantly increasing interest rates, increasing required loan down payments to more than 35%, and finally making the terms for accepting loan applications very difficult.”
But hope seems to be on the horizon. Latest news reports indicate that banks are trying to make it easier to get a mortgage to spur buying.
And then there is the spectre of layoffs. Nakheel, one of the top three players in Dubai realty, laid off 500 employees — 15% of its workforce — in November. Morgan Stanley shed nearly 15% of its staff in Dubai and Lehman Brothers closed its office in Dubai’s financial district after it filed for bankruptcy protection in the US.
There are some lucky ones, too. Samir Sen, a civil engineer living in Dubai for 23 years, made a Dh 200,000 profit after buying a studio flat in 2006 and selling it last year. He’s now holding a second studio flat to develop and sell in two years. He is of the view that while credit is tightening, and people — who can’t afford to hold a home — struggle to sell, the housing market “is not going up or down; it’s stable.”
Venu Rajamony, India’s Consul General in Dubai, says the economy is strong, but adds that many Indians, mainly construction workers, are heading back home. There are 600,000 Indians living in Dubai, he said. Many are construction workers.
Abbas Ali Mirza, president of the Dubai-based Indian Business and Professional Council, an association of at least 700 business leaders, says: “Everything appears fine and normal.” Representatives of property development agencies Damac and Emaar declined to comment.
Meanwhile, XXXX and XXXXX consider their options. And one of them is to open a bedroom to a temporary tenant.
Dubai property giant sacks 500 as finance crisis bites
2008-11-30
DUBAI (AFP) - The Dubai property giant behind such grandiose projects as a one-kilometre tower and artifical palm-shaped islands said on Sunday it has fired 500 staff as the global economic crisis begins to bite in the oil-rich Gulf.
Government-controlled developer Nakheel, one of the biggest employers in the booming desert city-state, also said it would be scaling back work on some of its projects.
"Approximately 15 percent of the total workforce, which amounts to 500 employees, was made redundant," it said in a statement, describing the move as "a responsible action in light of the current global market conditions."
It is the largest job cut in the wake of the global financial meltdown to be announced in United Arab Emirates and in Dubai, a city of skyscrapers, opulent hotels and malls which hosts hundreds of thousands of foreign residents including Westerners and Asian workers.
"We have the responsibility to adjust our short term business plans to accommodate the current global environment," said an unnamed spokesperson quoted in the statement.
"The redundancies are indeed regrettable, but a necessity dictated by operational requirements which are in turn dependent on demand," the spokesperson added.
Earlier this month, Damac Group, owner of the region's largest private developer Damac Properties, said it cut 200 jobs or 2.5 percent of its workforce.
Nakheel is developing several iconic projects in Dubai, including three palm-shaped man-made islands, only one of which is completed, and a cluster of islands in the shape of a map of the world.
It also announced last month a jaw-dropping plan to build a one-kilometre-high (3,280 feet) tower which would overshadow the still unfinished Burj Dubai, already the tallest on earth.
Nakheel also develops residential and commercial property, whose sales thrived after the sector was opened to foreign investors a few years ago.
Last week, Nakheel jointly hosted a star-studded 20-million-dollar bash to celebrate the opening of the Atlantis Hotel on its Jumeirah Palm island, with a huge firework display.
Top officials in Dubai insist the emirate's real estate sector -- a major engine of economic growth in recent years -- will weather the global crisis, but investors appear to have lost confidence in the market which was until recently a great magnet for investments.
Mohammad Alabbar, head of Dubai's Advisory Council, which was formed to deal with the impact of the financial meltdown, hinted last week that Dubai's major developers will use their control over supply to curb an increasingly clear drop in property prices.
"Our priority is to manage supply in the real estate market to ensure equilibrium," he said.
Fears however loom over the future of Dubai's economy after a double-digit growth registered in the past few years, with concern rising over the emirate's accummulated foreign debt amid the global credit crunch.
The emirate's bourse has been taking severe beating since the beginning of the financial meltdown, mainly due to a nosedive in real estate shares.
Despite occasional surges, the Dubai Financial Market is now about 67 percent lower than its level at the the start of the year, while the market leader, Emaar property giant, has seen its shares drop to record lows.
Foreigners number over 4.7 million, or over 84 percent of the UAE population, while Indians alone account for 42.5 percent of all expatriates, according to an unofficial study released this year.
Expatriates from the Indian subcontinent and southeast Asia also make up around 75 percent of the workforce, the study said.
There are also about 120,000 Britons representing the largest Western community in the UAE, with 100,000 living in Dubai alone.
After months of press releases and government promises that there will be no such thing as a bubble in Dubai, the big boys of Dubai are finally saying, “Beam me up Scotty, I think I’m in trouble.”
“Trouble,” would be the understatement of the year, and the developers are making it clear they are not one whit interested in the fortunes of the smaller investor. Despite the recent introduction of laws written to protect smaller investors, Dubai’s property developers are thinking up new ways of avoiding any responsibility and screwing every last penny possible from the situation as fast as the new laws are passed.
MiNC, developer of Prodigy 1 in Jumeirah Village South has put a new proposal to their current investors:
Pay more than the agreed price, or we will cancel the project and keep your deposit.
The wording was slightly different, but that is what it amounts to. According to MiNC, two banks have withdrawn funding and “the project is no longer financially viable. Costs have increased to the extent that MiNC would make a significant and material loss if it were to build this project.”
Gulf News
It is actions such as this that will finally deflate what is left of the Dubai bubble. A lot of confusion is surrounding Article 11 under Law 13, which guarantees investors - “In the case of canceling the contract, the developer may retain 30 per cent of the ‘contract’s value’, and the rule of (30-70 per cent of the money paid) shall be applied on amounts exceeding 30 per cent.”
Key words here are “contracts value,” not “monies paid,” as the Article originally stated. Arguments abound and opinions are divided amongst those who feel that Dubai no longer needs outside investors and the emphasis of government intervention should be in favor of protecting the developers, and others feeling (as we do) that the smaller investor is vital if Dubai wishes to be anything more than a “Disneyland in the desert.”
As things stand at the moment, if a small investor defaults (as is starting to happen on a large scale), the developer keeps 100% of the money in some cases, and developers are simply refusing to answer questions or deal with inquiries. A number of smaller investors are attempting to band together in an effort to at least recover the “70% of monies paid.” One such group can be contacted here:
investorslaw13@hotmail.com
Elsewhere, prices are falling dramatically, with distressed properties being offered at 40% discounts on Palm Jumeirah, which is still massively over-priced. If falls in the US and Spain are any indicator, some analysts are expecting Dubai’s prices to fall anything as much as 60% in the next few months.
Other property websites are now starting to report on Dubai’s bursting bubble, and here is a selection:
Reuters - Dubai real estate suffers as distressed sales rise
AOL Dubai Property boom halts as prices fall and jobs go
According to Mohannad Sweid, CEO of Depa, some of Dubai companies are in “denial” about the viability of projects in light of the global financial crisis.
We are at the denial stage where lots of developers know for a fact that their projects should be cancelled and they’re either not announcing it or they’re saying it’s going to be delayed. We cannot deny the effect [the crisis] has been having, we are a part of this world and I believe it’s just not right to say we haven’t seen any impact. What we have had in the GCC in the last three years is the difference between reality and non-reality. Our market research showed there will be 280 new hotels built over four years within the GCC. That was advertised all the time… If we look at the reality - how many hotels have been delivered - it’s hardly more than five or six hotels a year.
In terms of risk to his own firm, Sweid was confident that infrastructure projects would still go ahead.
In this region, a lot of infrastructure is not developed yet and these elements of infrastructure have to be developed - it’s not a choice,” he said, citing Dubai’s new metro system as an example. He added that Depa was still on track for growth for next year, but the “fears” were for 2010 and 2011.
The real question is not whether the Dubai bubble has finally burst, but more how far it will deflate. With property prices quoted as having risen somewhere in the region of 76% over the last year, a major correction is likely. Already prices have fallen 40% in most developments, and we feel it is going to deflate a lot faster than it blew up.
Filed under Dubai by Mark Knowles
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