By Emeka Chiakwelu www.Afripol.Org
Africa is confronted with lack of internal security which becomes a deterrent force in the economic advancement of the continent. Capital flight and low foreign investment are the precipitates and ramification of the insecurity.
American government have set-up Africom - a military command for Africa, which is to secure peace and goodwill in Africa. Many African countries are skeptical of America's real intention, fearing that Africom can become a tool to punish America's foes in the region in the name of fighting terrorism. The unexpressed fear is that it could be used to control and manipulate internal policies and status quo of African nations.
Beyond the fundamental security motivation of the exercise: "For the U.S., however, AFRICOM will be more than a military exercise. Stephen Morrison, director of the Africa program at the Center for Strategic and International Studies, says it will feature a unique interagency mix (NPR), combining intelligence, diplomatic, health and aid experts. That suggests to many a more robust effort to fight AIDS and other diseases in Africa, to encourage democratic and market economic reforms, as well as to prevent states from collapsing and providing fertile ground for terrorists. Finally, Africa stands to play an increasingly important role as a supplier of oil to America (National Interest Online) over the next few decades, with some projecting that West Africa's exports to the United States will outstrip the Middle East's by 2015. "
Africa inability to advance economically like the rest of other continents is due to several fundamental reasons; among them is paucity of security infrastructures and apparatus. Africom can play a vital role in contributing to the stabilization of maritime life in Africa. The ships and cargoes transporting commodities and passengers must be able to conduct their businesses in a worry free environment.
The sum total of the African countries and African Union contingency plans for securing the territorial integrity of the continent is minimal and is not meeting up the requisite infrastructure needed to safe guard the continent. In the 21st century world there cannot be advancement in the economic development without adequate security that allow and guarantee passage of goods and services. Africa is beset with instability and ubiquitous intra and inters mêlée that makes trade and capitalism unattractive.
At the horn of Africa, the Somali pirates operating in the Indian Ocean are not making it easy for passage of ships and cargoes including passengers who have services and expertise to render to Africa. The Africa Union does not have any strategy to safeguard waters of Africa, nor does any African country have the resources and technical know-how to undertake such a complex and gigantic project. The waters of West African coast including Gulf of Guinea, must be secured from armed militia and terrorists who are bent on obstructing oil production in the upstream oil drilling and exploration.
Africom can be a force for good because it can supply the security infrastructures, manpower and technology needed to secure Africa from the danger of pirates and criminals that are making it difficult for normal conduct of maritime business. The resource and money that African countries have devoted and allocated for securing maritime peace can be used for other project in the continent. The point is that Africa will not relinquish her responsibility to Africom but work in concert with Africom in keeping Africa safe from criminal intruder, warmongers and terrorists.
When Africa does experience uncivil eruptions and disturbances that produce exothermic havoc including pogroms, massacre and holocaust in Rwanda, and the on going Sudan problem, Africa lacks the logistic capability to transport manpower to the danger point. Africom can be of great aide in such situation and can be become a combatant force to arrest ugly situations and developments that have the potential to escalate to a monstrous dimension that can demolish massive life and property like in Rwanda massacre.
When Africa achieved a quantifiable peace the flow of investment and capital becomes more attractive to both domestic and foreign investors which can halt capital flight. Africom can be a constructive partner in this endeavor without jeopardizing African territorial integrity.
The psychology of trust
It is said, "Once bitten, twice shy." Africans cannot be blame for being skeptical about the latest development because of her antecedent history with outsiders. Slavery and colonialism legacy still permeates the continent's reaction and psychology to new ideas and developments including the presence of Africom. But Africa cannot dwell in the past, for the time has come for Africa to seize new opportunity and take reasonable risk in order to further her interest and facilitate stability in her geopolitical landscape. Africa can be able to forge strategic alliance with America and Africom. All things being equal, America has done a lot of good things in Africa. United States is an exceptional nation in that she has no colonial ambition and can be a catalyst partner for economic development in Africa. The emergence of President Obama, an African America is explemary of the goodwill to Africa which can encourage confidence building for Africans.
Freedom and prosperity
America has to work succinctly to assiduously allay their fears and show to Africans the benefits of Africom. This must be done with goodwill and civility while respecting African territorial integrity.
Peace and tranquility are good for business for all the parties concerned which can be achieved through dialogue and understanding. To this end, American diplomats in Africa have to embark on thorough enlightenment campaign.Africa needs stability and quantifiable peace for economic progress and Africom can contribute to the endeavor.
Emeka Chiakwelu is the Principal Policy Strategist at Afripol Organization. http://www.afripol.org/
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Wednesday, April 29, 2009
Tuesday, April 28, 2009
Alistair Darling, Chancellor of the Exchequer, United Kingdom of Great Britain and Northern Ireland
| Author: | Alistair Darling |
|---|
April 24, 2009
Let me start by thanking the Council of Foreign Relations for the opportunity to speak here today.
This morning, I would like to talk to you about the importance of countries coming together, to support our economies now during these difficult times, as well as preparing for recovery.
Finance ministers from the G7 and the G20 nations will meet later today, here in Washington.
At the London Summit, the G20 agreed a concerted and coordinated response to the global financial crisis – in order to speed up the recovery.
And already countries have started to take action to do that – here in the US, in the UK, in Europe and in Asia. But we need to do more if we are to meet the goals of the London agreement.
Our priority today must be to turn that agreement into action.
It is almost impossible to open a newspaper these days and not see a story about the current state of the global economy.
In Asia, export growth is falling sharply, in Japan alone by over 45 per cent in the last few months.
In Europe, industrial production is falling sharply.
Across the world, and in the UK too, I have always been clear that the last six months were going to be very difficult.
And I expected the first quarter of this year, in particular, to see a large contraction in the UK economy.
But we must also remember that there is huge uncertainty – at times like this, when large shocks hit economies everywhere, economic data becomes much harder to read.
So there is little doubt that the economic situation, across the world, here in America, and in Britain, has been both difficult and uncertain in the last few months.
Yet I think there are reasons to be confident about the economy.
Many people have seen parallels with what happened following the Wall Street crash of 1929.
Then, when the world economy was plunged into deep crisis in the early 1930s, the response was too little and too late.
Both nationally and internationally, a failure to act turned a serious downturn into a prolonged depression, that lasted for the best part of a decade.
Now we have seen decisive action in many countries, and set in motion forces which help the global economy come out of recession sooner.
And in the UK, the action already taken means that I expect the economy to start growing again towards the end of the year.
Much of this general help, for example to protect jobs, is essential to economies and should mean people get back into work quickly.
In Europe, for example, we have seen direct support for certain labour-intensive industries.
Here in the US, the new administration has been supporting the economy with increases in public spending in education, transport infrastructure and science.
And in the UK we have introduced a 13-month cut in sales tax, VAT, to boost spending and put money in people’s pockets. As well as cutting income tax for middle and modest income families.
This has now been complemented with further specific support, which I announced in my Budget on Wednesday.
It included measures to help homeowners in difficulty, help companies deal with cash flow problems, and make sure people spend as short a time as possible out of a job.
And I also took action to prepare our economy for the future – by encouraging businesses to invest, by supporting low-carbon projects, and by making sure the public finances remain sustainable.
That’s important. It’s right to support business and families now – as well as to prepare for the future – but as governments we need to do that while maintaining sound public finances.
On top of the fiscal support, central banks have cut interest rates aggressively and have started to use the full range of monetary policy instruments, including credit and quantitative easing.
This fiscal and monetary expansion to support global demand represents the largest stimulus of modern times.
Each country agreed in London to take whatever further action is necessary to restore global growth to over 2 per cent by the end of next year.
This action will, by the end of next year, amount to over $5 trillion.
We have been bold and aggressive because the risks of doing too little are far greater than the risk doing too much.
Or as John Maynard Keynes said, I’d rather be roughly right than precisely wrong.
To ensure that countries are held to account for their macroeconomic policies, the G20 has called on the IMF to assess the actions taken and the actions required to restore growth of over 2 per cent per year.
It is clear that, as well as taking action at home, every G20 country is determined to act together to restore growth, take steps to restore bank lending, and prepare for recovery.
Cleaning up the banks’ balance sheets is essential – because if we do not fix the banks, we will not fix the economy.
It is difficult. But it’s got to be done – it’s an essential precondition to recovery – and it needs to be done quickly.
We in the UK are providing that support, with massive liquidity provision, capital injections and by insuring banks’ assets.
Banks must clean up their balance sheets – it is the only way to get credit flowing again.
At the London Summit, we committed to take the necessary further action to restore the normal flow of credit thought the financial system, both domestically and globally.
To do this, and to maximize the effect of our policies, the G20 agreed a framework to repair and reform the financial system.
In the coming months, countries will need to ensure that new programmes adhere to this framework.
It is clear that the immediate cause of the crisis has been a failure in the financial sector.
In the UK, I will shortly be setting out our approach to renewing financial markets for the long-term, building on the G20 agreements.
We need to build trust in the banking system, and harness the strengths of the financial services sector for the benefit of society
Crucial to this is financial regulation and supervision – where there are many lessons to be learnt.
Across the G20 countries, domestic financial regulation must be reformed to promote integrity, guard against all types of risk, discourage excessive risk-taking, dampen rather than amplify financial shocks, and protect consumers and investors.
But we also need a more globally consistent regulatory system. And as part of this, we must:
Endorse and implement new tough principles on pay and compensation.
Expand regulatory oversight to all systemically important financial institutions, including hedge funds.
And take action to protect the world’s financial system and our public finances by cracking down on tax havens.
Again, the key to the delivery of the financial system will depend on international cooperation. And central to this will be the newly established Financial Stability Board – which brings together a wider group of developed and emerging economies.
We must also ensure that our other international financial institutions - the IMF, the World Bank and the multilateral development banks – not only have the funding they need, but are also effective, and responsive enough to manage this crisis and prevent future crises.
The G20 agreed future reforms and modernisation of their mandates, scope and governance to reflect the new challenges of globalisation and ensure their long-term relevance and legitimacy.
Emerging market and developing economies continue to be most at risk from the reversal of capital flows and the withdrawal of credit.
It is not only our moral imperative but also in our economic interest to provide support to these countries. These countries have been the engines of recent world growth and they are vital to a successful global recovery.
Support for these countries now will minimise the long-term damage to global potential.
The agreements we reached in London will ensure that the IMF has the firepower it needs to mitigate the spillovers to the emerging and developing economies.
Trebling the resources available to the IMF to $750billion, supporting a new SDR allocation of $250 billion and $100bn of additional lending from the multilateral development banks constitute an unprecedented response to the crisis.
In particular, we will ensure the delivery of $50 billion of support to low-income countries, including $6bn additional concessional and flexible finance through the sale of IMF gold and surplus income.
Growth in international trade has underpinned global prosperity for the last half century, but it is now falling for the first time in 25 years, exacerbated by the drying up of trade credit.
The G20 committed to support world trade and reject protectionism and to tackle the shortfall in trade credit by providing $250 billion of support for trade finance through our export credit and investment agencies and the multilateral development banks.
We extended the pledge not to raise new barriers to investment or trade in goods and services, impose export restrictions or implement WTO inconsistent measures.
Such commitments are in stark contrast to the tariff wars of the 1930s and demonstrate our strong international cooperation through the G20 and our resolve to avoid the mistakes of the past.
Each individual G20 country must put the commitments into practice. Our actions are now what count.
There are no quick fixes. But because of the progress we have made, both domestically and globally, we can begin to restore confidence, save jobs and bring the world economy out of recession.
Implementation is now our priority. We must all look for real progress to have been made – and to be made urgently. We don’t have any time to lose.
Thank you.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Miami among major cities of the future
Miami made the short list on fDi Magazine’s major cities of the future, ranking fifth. Topping the list was New York, followed by Chicago, Houston and Los Angeles.
Miami ranked No. 8 on the magazine’s list of North American cities of the future for 2009-2010.
Miami also ranked third among major cities for lowest unemployment and as a major city for best business friendliness. The city ranked fourth among major cities for best foreign direct investment strategy.
“The rankings are a measure of Miami-Dade’s economic potential, not only of our ability to attract new foreign direct investment projects, but also our strategy to promote Miami-Dade as the business center of the Americas,” Beacon Council President and CEO Frank Nero said in a news release.
The survey, which took more than six months to research, involved the data collection of nearly 400 North American cities.
In the small city category, Fort Lauderdale ranked as the second best for business friendliness.
Major cities have a population of more than 1 million, while small cities have a population greater than 100,000, but smaller than 500,000.
Monday, April 27, 2009
CFM wins $270M Gulf Air order
Gulf Air, the primary airline for the Kingdom of Bahrain, has ordered CFM International’s CFM56-5B engines to power 15 new Airbus A320 aircraft, an order worth $270 million at list price.
Delivery of the engines is scheduled to run from late 2009 to 2013, CFM said in a news release.
The airline also signed a 10-year repair, maintenance and overhaul contract with GE Aviation for the new engines. That agreement is valued at $100 million, GE Aviation said.
Gulf Air flies to more than 40 destinations in Africa, Asia, Europe, the Middle East and Far East, according to the release.
CFM International, based in Evendale is a joint venture between GE Aviation’s parent, General Electric Co. (NYSE: GE) and Snecma in France.
King Abdullah of Jordan and The Senate Foreign Relations Committee
AMMAN (JT) - His Majesty King Abdullah on Friday said that now is the time for the US to lead Middle East peace efforts, to ensure that no more time is wasted.
In a speech delivered at the Centre for Strategic and International Studies Friday, the Monarch said: "It begins with an effective peace plan for 2009 and beyond - a plan of negotiations that can achieve concrete results quickly."
To bring about peace, King Abdullah said: "There must be an end… to occupation and confrontation… to settlement building… to unilateral actions in Jerusalem."
Delivering the speech in the presence of Her Majesty Queen Rania and over 200 political, economic and media leaders in Washington, King Abdullah underlined the urgent need not to waste more opportunities, saying: "Time, my friends, is not on our side. Every day we lose makes the conflict much harder to resolve."
"We do not have time to engage in yet another open-ended process. We have seen what comes of process without progress. Every missed opportunity has alienated more people on both sides. Such a course increases distrust and difficulties and fuels those who seek to carry the parties down the path of confrontation," said the King.
King Abdullah said the two-state solution has been agreed by the parties and the entire international community, adding that for seven years, against all provocation, the landmark Arab Peace Initiative has held.
"The initiative lays out the parameters of a comprehensive settlement - ending the occupation... creating a Palestinian state... and providing security guarantees and normal relations for Israel," said the Monarch.
Also Friday, King Abdullah met with US Secretary of Defence Robert M. Gates and discussed means to enhance bilateral ties and exchange of expertise in defence fields.
King Abdullah and Gates also discussed developments in the Middle East and efforts to find a just settlement to the Palestinian-Israeli conflict on the basis of the two-state solution.
On Thursday, King Abdullah met with the Senate Foreign Relations Committee, chaired by Senator John Kerry (D-Mass.), in the presence of minority leader, Senator Richard Lugar (R-Ind.), where they discussed means to realise peace in the region and resolve the Palestinian-Israeli conflict.
Also Thursday, King Abdullah met with several leaders in the Senate, including Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY). They looked into means to bolster bilateral cooperation in different fields.
At Thursday's meetings, King Abdullah emphasised that the two-state solution is the best way to resolve the problems and challenges facing the Middle East.
The Monarch also voiced his appreciation for the Senate's support in developing Jordanian-American ties.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Saturday, April 25, 2009
Read the victory speech by Jacob Zuma
ANC President Jacob Zuma addressed political parties and guests at the IEC centre in Pretoria after the announcement of the official election results. Here is the full text of his speech...
Ladies and gentlemen... We have come to the end of a vibrant election campaign. The huge voter turnout has indicated the value attached by our people to the right to vote and to the constitutional and democratic way to change or renew a government's mandate.
We congratulate the Independent Electoral Commission for once again delivering a good and efficient election. They always rise to our expectations and make our nation proud. Where there were glitches, they were attended to very quickly.
The elections were free and fair and we accept the results. They were attracted by our policies and the delivery of services in the past 15 years, as well as the track record of this movement in working to build a better South Africa since 1912.
We do not take the mandate lightly, we know the responsibility that comes with it. We also thank our people who voted for the ANC for the first time in this election. We assure you that your vote was not misplaced. We thank ANC cadres, supporters and volunteers for their excellent work across the length and breadth of our country. This is your victory.
To those South Africans who did not vote for the ANC, we will form a government that takes care of your needs to the best of our ability. Working together we will make it a government for all South Africans.
The new president of the Republic will be a president for all, and he will work to unite the country around a programme of action that will see an improvement in the delivery of services. He will strive to turn the climate in the country into a positive and relaxed one, that makes people free to be creative and work hard to improve their lives and the economy of the country.
Now that the election is over, we must enter a new era of hope and progress. We must enter a period where we bury mistrust, uncertainty, pain and tension, and begin a new chapter of harmony and collaboration. We cannot afford to dwell on the negatives. We have gone through a difficult period over a few years; it is now time to put it all behind us. We must enter a period in which South Africa reclaims its position and image as a thriving nation, which can overcome all its difficulties, and which is able to put the country first above sectional and party political interests.
As the ANC, we will build on the huge mobilisation success of our election campaign. We will build on the excitement around the ANC brand and policies. The ANC victory is an endorsement of our policies and programmes. But more than that, it is a victory for the country's Constitution, which we will always uphold, promote and defend. We reiterate that the Constitution is not under threat from the ANC. It has never been.
Our resounding victory is a celebration for people from all walks of life who helped to shape our Manifesto which will now become government's programme of action for the next five years.
We thank women, the youth, black professionals, minority groups, workers, artists and entertainers, traditional leaders, religious leaders and many sectors and individuals who made inputs into this Manifesto. There will be no surprises in the next administration's programme of action.
The electorate has endorsed our call for an equitable, sustainable and inclusive growth path that will bring decent work and sustainable livelihoods.
We have scored a victory for a better education system, better health care, safer and secure communities, and rural development.
We will make our country one that creates an enabling environment for women to develop, thrive and be successful. Let me emphasise that we remain committed to every word we uttered during the election campaign. We were serious when we said we would improve the pace and quality of service delivery, that we will appoint competent people to government, and that we will be tough on non-performance.
The incoming Cabinet will be required to turn the public service into an efficient, effective and very caring machinery that will respond effectively to the needs of our people. We were serious when we said we want to maintain direct contact with the citizens.
We will not be a government that is out of touch with its people. A cabinet lekgotla, scheduled for towards the end of May, will turn the Manifesto into a programme of action which will have clear time frames and deliverables. This will then be communicated to the nation in the State of the Nation address scheduled for early in June. We congratulate all opposition parties on a hard fought election campaign.
Now, we must work together and unite our people. We may disagree on how to bring about a better life for all, but what unites us is the fact that this country belongs to all of us, black, white, coloured and Indian equally.
We will need to work together on issues that are in the national interest, on which there is no need to compete or permanently bicker. We will work with all parties in Parliament to deepen the oversight role of Parliament. Together we must promote and defend the integrity of our State Institutions, including the judiciary and law enforcement agencies, and the Chapter 9 institutions.
We will work with all parties. We will need to do more to elevate our national days, such as the forthcoming Freedom Day, into inclusive, serious and meaningful occasions, which are instruments of nation building.
We intend to work with all parties and sectors to promote our sports development, starting with the 2010 Fifa Soccer World Cup. We must work tirelessly together to make the Confederations Cup in June and the World Cup next year phenomenal successes.
The World Cup provides tremendous opportunities for our country. We want to ensure that the tournament leaves a proud legacy that our children and our communities will enjoy for many years to come, and which contributes to the long term development of the country. We are convinced that we will make a success of the tournament and that we will impress the world with our abilities as a host for an event of this magnitude.
South Africa has played a key role in international affairs since 1994. We will ensure continuity in that regard. We will work with the African Union and SADC, as well as with other regional blocs, to promote sustainable development, peace and security. We will continue with efforts to find lasting solutions in Zimbabwe, Sudan, Democratic Republic of Congo, Western Sahara, Somalia and other flashpoints.
We applaud the progress made in Zimbabwe and with our neighbours and comrades well on the way forward. We congratulate the Burundians on progress made thus far in the quest for lasting peace. We welcome the announcement by the rebel group FNL that it will now lay down arms and participate in the democratic process in that country.
We will strengthen our participation in multilateral institutions, including the United Nations. We will further deepen our relationship with the developed North as well as our role in the South-South dialogue programmes. We are concerned about the potential impact of the global economic crisis.
We will work with all stakeholders, especially business and labour, to find ways to prevent and cushion our people against job losses and other difficulties that may arise. As we prepare for the transition into a new administration, our message to South Africans is that we will remain true to our undertaking to build a caring, inclusive, listening and responsive government.
South Africa needs a government that fully understands what else needs to be done to reverse our apartheid past, building on the successes of the past 15 years. The ANC, working together with all our people, will form such a government.
Working together, we will do much more to build a better life for all our people. I thank you.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Ladies and gentlemen... We have come to the end of a vibrant election campaign. The huge voter turnout has indicated the value attached by our people to the right to vote and to the constitutional and democratic way to change or renew a government's mandate.
We congratulate the Independent Electoral Commission for once again delivering a good and efficient election. They always rise to our expectations and make our nation proud. Where there were glitches, they were attended to very quickly.
The elections were free and fair and we accept the results. They were attracted by our policies and the delivery of services in the past 15 years, as well as the track record of this movement in working to build a better South Africa since 1912.
We do not take the mandate lightly, we know the responsibility that comes with it. We also thank our people who voted for the ANC for the first time in this election. We assure you that your vote was not misplaced. We thank ANC cadres, supporters and volunteers for their excellent work across the length and breadth of our country. This is your victory.
To those South Africans who did not vote for the ANC, we will form a government that takes care of your needs to the best of our ability. Working together we will make it a government for all South Africans.
The new president of the Republic will be a president for all, and he will work to unite the country around a programme of action that will see an improvement in the delivery of services. He will strive to turn the climate in the country into a positive and relaxed one, that makes people free to be creative and work hard to improve their lives and the economy of the country.
Now that the election is over, we must enter a new era of hope and progress. We must enter a period where we bury mistrust, uncertainty, pain and tension, and begin a new chapter of harmony and collaboration. We cannot afford to dwell on the negatives. We have gone through a difficult period over a few years; it is now time to put it all behind us. We must enter a period in which South Africa reclaims its position and image as a thriving nation, which can overcome all its difficulties, and which is able to put the country first above sectional and party political interests.
As the ANC, we will build on the huge mobilisation success of our election campaign. We will build on the excitement around the ANC brand and policies. The ANC victory is an endorsement of our policies and programmes. But more than that, it is a victory for the country's Constitution, which we will always uphold, promote and defend. We reiterate that the Constitution is not under threat from the ANC. It has never been.
Our resounding victory is a celebration for people from all walks of life who helped to shape our Manifesto which will now become government's programme of action for the next five years.
We thank women, the youth, black professionals, minority groups, workers, artists and entertainers, traditional leaders, religious leaders and many sectors and individuals who made inputs into this Manifesto. There will be no surprises in the next administration's programme of action.
The electorate has endorsed our call for an equitable, sustainable and inclusive growth path that will bring decent work and sustainable livelihoods.
We have scored a victory for a better education system, better health care, safer and secure communities, and rural development.
We will make our country one that creates an enabling environment for women to develop, thrive and be successful. Let me emphasise that we remain committed to every word we uttered during the election campaign. We were serious when we said we would improve the pace and quality of service delivery, that we will appoint competent people to government, and that we will be tough on non-performance.
The incoming Cabinet will be required to turn the public service into an efficient, effective and very caring machinery that will respond effectively to the needs of our people. We were serious when we said we want to maintain direct contact with the citizens.
We will not be a government that is out of touch with its people. A cabinet lekgotla, scheduled for towards the end of May, will turn the Manifesto into a programme of action which will have clear time frames and deliverables. This will then be communicated to the nation in the State of the Nation address scheduled for early in June. We congratulate all opposition parties on a hard fought election campaign.
Now, we must work together and unite our people. We may disagree on how to bring about a better life for all, but what unites us is the fact that this country belongs to all of us, black, white, coloured and Indian equally.
We will need to work together on issues that are in the national interest, on which there is no need to compete or permanently bicker. We will work with all parties in Parliament to deepen the oversight role of Parliament. Together we must promote and defend the integrity of our State Institutions, including the judiciary and law enforcement agencies, and the Chapter 9 institutions.
We will work with all parties. We will need to do more to elevate our national days, such as the forthcoming Freedom Day, into inclusive, serious and meaningful occasions, which are instruments of nation building.
We intend to work with all parties and sectors to promote our sports development, starting with the 2010 Fifa Soccer World Cup. We must work tirelessly together to make the Confederations Cup in June and the World Cup next year phenomenal successes.
The World Cup provides tremendous opportunities for our country. We want to ensure that the tournament leaves a proud legacy that our children and our communities will enjoy for many years to come, and which contributes to the long term development of the country. We are convinced that we will make a success of the tournament and that we will impress the world with our abilities as a host for an event of this magnitude.
South Africa has played a key role in international affairs since 1994. We will ensure continuity in that regard. We will work with the African Union and SADC, as well as with other regional blocs, to promote sustainable development, peace and security. We will continue with efforts to find lasting solutions in Zimbabwe, Sudan, Democratic Republic of Congo, Western Sahara, Somalia and other flashpoints.
We applaud the progress made in Zimbabwe and with our neighbours and comrades well on the way forward. We congratulate the Burundians on progress made thus far in the quest for lasting peace. We welcome the announcement by the rebel group FNL that it will now lay down arms and participate in the democratic process in that country.
We will strengthen our participation in multilateral institutions, including the United Nations. We will further deepen our relationship with the developed North as well as our role in the South-South dialogue programmes. We are concerned about the potential impact of the global economic crisis.
We will work with all stakeholders, especially business and labour, to find ways to prevent and cushion our people against job losses and other difficulties that may arise. As we prepare for the transition into a new administration, our message to South Africans is that we will remain true to our undertaking to build a caring, inclusive, listening and responsive government.
South Africa needs a government that fully understands what else needs to be done to reverse our apartheid past, building on the successes of the past 15 years. The ANC, working together with all our people, will form such a government.
Working together, we will do much more to build a better life for all our people. I thank you.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Friday, April 24, 2009
The Impact of the sub-prime crisis on banks in sub-Saharan Africa
Whilst few African financial services companies have had direct exposure to the crisis, the secondary impacts are all too clear.
Ernst & Young24 April 2009 03:16
Africa has not escaped the impact of the sub-prime crisis entirely. Although the crisis’ origins lie in the USA, it spread rapidly across the globe, hurting European and then Asian companies along the way. Whilst few African financial services companies have had direct exposure to the crisis, the secondary impacts are all too clear.
First, and most crucially, GDP growth is declining, (South Africa’s GDP in fact contracted in the last quarter of 2008, whilst Nigeria’s growth is expected to slump from 8% in 2008 to 3% in the current year.)
Secondly, the major currencies of southern, eastern and western major countries (South Africa, Kenya and Nigeria) experienced rapid depreciation, as foreigners sought to repatriate funds to their home countries, and collapsing demand for the continent’s mining and manufacturing goods followed. The South African rand depreciated 40% against the US $ in 2008, while the Nigerian naira and Kenyan shilling feel more mildly, shedding 25% and 23% respectively.
In addition, the effect of global liquidity crunch is also felt across the continent through reduced credit availability. Many infrastructure projects are being placed on hold, given the unavailability of finance, and the cost of raising that finance. Again, foreign banks have become far more risk averse then they were 18 months ago, and are not keenly providing funds for (perceived) riskier emerging market countries. Infrastructure projects which were viable with high and rising commodity prices are no longer attractive, and hence many have been shelved, either for lack of funding, or due to the reduced economic rationale.
For all the above reasons, the impact of the crisis is by no means over yet. South African financial services companies reported record low confidence levels in the first quarter of 2009, with expectations that profits and revenue will continue slowing through 2009.
Whilst interest rate cuts may provide some relief, there is no strong evidence that corporates or individuals are taking up credit again. In South Africa, for example, credit growth between January 2008 and 2009 slowed from 28% to 13.2%. Bad debts continued to grow in the 1st quarter, and growing unemployment may yet prove to keep the trend of impaired debts to total advances growing for the foreseeable future.
Having said that, African banks are by no means as badly off as what their global peers are. Most major global banks have reported hefty losses since the middle of July 2008. African banks, by contrast, are reporting lower profits than they were prior to the sub-prime crisis breaking, but profits remain positive.
However, rumours have surfaced in Nigeria about some of the large banks facing liquidity concerns, raising questions about their sustainability, and prompting attempted takeovers. These rumours stem from the Nigerian banking sector taking on large debt exposure in the petroleum import sector, which is unable to repay its debts in the current environment. In addition, Nigerian banks also have exposure to Nigerian stocks, to the tune of N800bn. According to the British edition of Business Monitor, Nigeria’s regulatory authorities are in the process of drafting plans to set up a state controlled fund to buy out bad debts, in a manner not dissimilar to US and European precedents.
In Kenya, liquidity was kept alive by allowing banks to borrow from other banks, using government securities as collateral. This was the first time such trades have occurred in the country, and this has provided liquidity that would otherwise not have been available.’
At a financial services summit recently held in Lagos, Emilio Pera, lead financial services director at Ernst & Young comments, ‘Undoubtedly African banks are facing tougher trading conditions than they were last year this time, despite the recent interest rate relief. This is clearly seen in the pace at which market capitalisation has fallen. But African banks are not faced with such sharp equity valuation downgrades as what some of their global peers are. In the worst case scenario in South Africa, one bank’s market capitalisation fell 39%. Nigeria’s largest bank by market capitalisation, Diamond Bank, had a more dramatic 57% loss in value, but has since recovered from its lowest point.’
He continues, ‘To some extent South African local economic circumstances have played a role in financial services’ market capitalisations falling: high interest rates and consumer price inflation have squeezed disposable income, thereby pushing up bad debts in the case of the banking sector, and causing increased policy lapses in the case of insurers.’
Concludes Pera, ‘Generally, the situation in Africa has been similar across the three main regions (east, south and west), whereby resource price collapses have caused lay-offs and reduced growth prospects. But the response of the regulatory authorities has differed. Whilst South African banks are for the most part well capitalised, Nigerian authorities have intervened directly, by capping interest rates, and may yet purchase bad debts in the industry. The eastern region, which is less resource dependent, has not faced as dramatic an impact on its banking sector as the other regions.‘
Ernst & Young
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Monday, April 20, 2009
South Africa -THE ZUMA ELECTION
THE ZUMA ELECTION
20 April 2009
I have deliberately called this the Zuma election rather than the South African election, because that is what it has all been about. The only real issues in this election have turned on Zuma and these have been issues that he brought to the campaign. This has been the case right down to the last 12 days before polling when Helen Zille’s Democratic Alliance trumpeted the slogan “Stop Zuma”. And former president FW de Klerk issued a public statement calling on voters to avoid giving the ANC a two-thirds majority.
SOME POSITIVES AND NEGATIVES
This was an election organised and run very smoothly to the credit of the Independent Electoral Commission (IEC). The sorting out initially of the parties, the handling of candidate lists, and the registration of voters has been impressive. Particularly impressive is the record number of new and young voters who registered. The IEC also deftly handled any complaints it received.
Another positive in this election has been the way the media has played it. Yes, newspapers have a right to take up positions – whether in respect to particular parties or in respect to issues. But their reportage has been comprehensive and their commentary fair.
A positive in this election has been confirmation of the constitutional right of South Africans living abroad to vote in general elections - provided they are registered. The fact that the South African embassy in London was the biggest polling booth in the whole election (involving more than 7 000 voters) testifies to the interest South Africans abroad have in the well-being and politics of their country. Obviously, next time round there will be many more such voters, given that the right to vote has been established.
Another positive is the fact that the election has changed the political landscape. The emergence of COPE, which reflects essentially the growing black middle-class, is a major factor in terms of future politics – however disappointingly COPE may perform in the election itself. Related to this is that the election had a strong moral focus – given the fact that it revolved around Zuma and the charges against him. The country needed an awakening in this regard and I think it got it.
But there were also negatives.
There is the question of campaign financing. The ANC had more money than it knew what to do with. Some examples. The Financial Mail in its pre-election issue says that the ANC ordered around 2 million T-shirts ahead of the polls. (It had 300 000 printed prior to the 2004 election.) The DA has printed 150 000 at about R20/shirt. If the ANC pays the same rate, it will have spent R40 million on campaign T-shirts alone! Its posters in and around Gauteng (Johannesburg) were held in permanent plastic and steel holders actually bolted to lamp posts – unlike other political parties with their cardboard and string efforts. And then there is the ANC’s fleet of 4x4’s which ferried officials, candidates and voters around the country. One suspects that all of this cost much more than the publicised donations which the ANC received from certain businesspeople. Mathews Phosa, at a breakfast meeting in Cape Town last week, was asked about the need for campaign fun ding reform. At the same time, the questioner put it to Phosa that the ANC had received funding from Libya and/or China. He replied to the general question but didn’t respond to the question of where the ANC got its campaign funding from. There is a strong suspicion, actually voiced by certain columnists, that the ANC campaign certainly received funding from China – which was the reason for the extraordinary decision to refuse a visa to the Dalai Lama.
Another negative was the lack of any real political debate or real discussion of what one might describe as “the bread and butter” issues. This was because Zuma, and the issues surrounding him, dominated this election to the exclusion of most other things.
But the biggest negative was the dominant role played in this election by Jacob Zuma. For example, I don’t recall a single commentator comparing the kind of leadership which, say, Sam Shilowa or Helen Zille could bring to a new government. To make comparisons along these lines would simply have been unreal – given on the one hand the certainty that the ANC would have a majority and on the other hand Zuma’s individual personal domination and central role in the election.
It was a foregone conclusion that the ANC would win the election – the only big question was by what margin and whether it would gain a two-thirds majority. But overshadowing everything else of importance was Jacob Zuma, the ANC’s presidential candidate. I can’t think of a parliamentary election (as opposed to a presidential election) in which an individual has played so dominant a role.
There were three reasons for this. Firstly, there was the passionate commitment of his supporters – a passion fuelled by Thabo Mbeki’s actual perceived mistreatment of Zuma. Secondly, the fact that Jacob Zuma as a personality in this election, with all the baggage he brought, his more vocal and irresponsible supporters, his own often scary statements, the questionable release of Schabir Shaik and his legal manoeuvrings around the criminal charges against him was a highly controversial and divisive figure.
Something of the flavour of this was conveyed by Diana Geddes, who wrote the cover story on the election for the most recent Economist. In an interview on Fine Music Radio of Cape Town, she initially raved about Zuma as a personality. She played down his lack of formal education, spoke of his enormous energy and his ability to relate to people, even referring to his excellent voice. In fact, she was so upbeat that interviewer Lindsey Williams remarked that she seemed to be a fan!
But when it came to his public statements and positions, Geddes expressed concern at what sort of president Zuma would be. She gave as an example a statement which he made in February about ANC members who joined COPE. “They will find it cold outside the ANC – very cold.” She said there was something ominous about this.
The third reason for Zuma’s dominance of this election campaign ironically is the fact that he personally was the soft underbelly of the ANC – something all the other parties instinctively understood and tried to exploit. The hope was that somehow – whether imposed from outside or self-inflicted, Zuma would blow up and derail the ANC’s campaign.
This was everybody outside of the ANC’s hope, and Helen Zille therefore was being completely consistent when, after the NPA dropped charges against Zuma, she took the decision on judicial review. She was similarly being consistent when she trumpeted right at the end of the campaign the “Stop Zuma” slogan.
Nothing here suggests that Zuma will not make a good, even great, president. All polities at different stages require a particular leadership. Right now, after Mbeki and all the uncertainties, we need a return to Mandela’s reconciliation and consensual style of leadership. Zuma, as Geddes suggests, may be the person.
But given Jacob Zuma's overwhelmingly dominant role in this election, and the controversies surrounding him, much depends on how he reacts after the election. No doubt he will make overtures to South Africans in general and to minorities in particular - as he did to Afrikaners during the campaign. But the purge that started after Polokwane in December is likely only to deepen after the election. This is unfortunate as it means some excellent people will be pushed to the margins. The counterpart to this, of course, is that it places a heavy responsibility on those who stayed on in the ANC and supported Zuma and who have a sense of responsibility in relation to the country, its economy and all the people of South Africa. A heavy onus rests on people like Cyril Ramaphosa, Tokyo Sexwale and Mathews Phosa to ensure that the ANC remains accountable to all South Africans.
WHAT WILL THE OUTCOME BE?
The last survey conducted in March by Ipsos Markinor, from all accounts the country’s most reliable survey, in rounded figures gave the:
- ANC – 65%
- Democratic Alliance – 11%
- Congress of People (COPE) – 9%
- Inkatha Freedom Party – 3%
- Independent Democrats – 1%
- United Democratic Movement - 0.7%
- African Christian Democratic Party – 0.6%
- Freedom Front (FF+) – 0.6%
On the question of a two-thirds majority, the latest poll shows the ANC possibly between 64% - 66%, with opposition parties collectively mustering 26% - 28%, with 9% of voters still undecided.
Alister Sparks, veteran analyst whose opinion I respect, puts the numbers as follows:
- ANC – between 60% and 65%
- Democratic Alliance (DA) – between 12% and 15%
- COPE – between 8% and 10%
Spark expects the DA to show the most improvement – a view with which I agree.
Of some importance is the fact that the opposition parties apparently have already agreed on a cooperative and combined opposition strategy. In terms of the Electoral Act, there can’t be any mergers, as this would mean that the party merging would lose its seats. But the need to cooperate is apparently acknowledged by all parties who gain some representation.
To be specific, I will chance the following:
- ANC - 62%
- Democratic Alliance - 13.5%
- COPE - 8.8%
- Inkatha Freedom Party - 2.5%
- Independent Democrats - 1.2%
Of the minnows, the Freedom Front will do better than most people anticipate.
Dr Denis Worrall
Email: kamreyac@omegainvest.co.za for all enquiries
Copyright 2009. Omega Investment Research. All Rights Reserved
www.omegainvest.co.za
Saturday, April 18, 2009
Obama relaxes Cuba restrictions; trade could follow
Frequent-flier miles may turn into more frequent agricultural export sales to Cuba and someday, perhaps, fresh produce imports from the island country.
U.S. agricultural exporters were at least hoping expanding opportunities after political movement in mid-April toward expanded contact with the communist country.
The Obama administration on April 13 lifted travel restrictions for Cuban Americans and also removed limits on how much money they could send to family members in Cuba.
Cuba’s economy is in desperate need of money, said Jim Allen, president of the New York Apple Association, Fishers. The decision to relax restrictions will increase the money supply in Cuba and that should lead to more trade, Allen said.
“Right now, they don’t have any money to deal with,” he said. “This is a big step.”
Allen said the real opportunity could come with removal of the embargo on Cuban goods entering the U.S. market, which has been in place since 1962.
“If they had something to sell, then I think the whole situation would change,” he said.
Mike Stuart, president of the Florida Fruit & Vegetable Association, Maitland, said unrestricted trade with Cuba would likely bring winter competition for Florida vegetable growers.
“I don’t think there is any question it would be a major disruption,” he said. “At some point in time it is going to happen. It is just a matter of when.”
Cuba was a significant exporter of vegetables to the U.S. in the 1950s and some believe the country would be positioned to compete with Florida and Central America producers, particularly for Eastern U.S. markets.
Even if the embargo was lifted immediately, it could take about 10 years before the country may be ready to compete in the U.S. market, said Tony DiMare, vice president of the DiMare Co., Homestead, Fla.
“If it was relaxed, it would take many years to develop the infrastructure back to be able to trade fruits and vegetables,” he said.
However, Cuba could wield a large influence on winter vegetable sales when that happens, DiMare said.
“Anytime you add trading partners importing like products to the U.S., it will have a negative effect in the market place,” he said. “It would probably be a huge factor.”
Total U.S. agricultural exports to Cuba totaled more than $690 million in 2008, up from $413 million in 2007, but only a fraction was from fresh produce. Apples sales to Cuba were valued at $1.7 million and grapes were at $500,000, according to the U.S. Department of Agriculture. Top commodities exported from the U.S. to Cuba include wheat, corn, soybeans, chicken, rice and dairy.
Export opportunities
That’s not because of a lack of interest in the potential export market. Produce industry leaders have traveled to Cuba to explore trade possibilities.
In 2008, state agriculture commissioners from New York and California led trade delegations to the island, and Frank Muir, chief executive officer of the Eagle-based Idaho Potato Commission, led a commission visit to Cuba in 2007 to explore seed and frozen potato sales possibilities.
John Keeling, executive vice president and chief executive officer of the Washington, DC-based National Potato Council, said April 15 Cuban officials have also visited Maine, North Dakota and Idaho to look at seed potatoes. “We have a protocol to ship seed potatoes down there, but to date there has never been a shipment.”
While Cuba has perhaps elevated interest in their market in part to build political support for relaxed trade rules with the U.S., agricultural leaders aren’t shy about expressing support for more normalized trade relations.
Bob Stallman, president of the American Farm Bureau Federation, Washington, D.C., said in a statement April 14 his group supports Senate Bill 428, which would remove general travel restrictions to Cuba.
“This legislation is an important step in easing trade restrictions on Cuba,” Stallman said in a statement. “Allowing unrestricted travel to Cuba will increase U.S. agricultural sales and boost tourism.”
U.S. agricultural goods have been eligible for export sales to Cuba since October 2000, when President Clinton signed the Trade Sanctions Reform and Export Enhancement Act of 2000.
Passage of Senate bill 428 should result in increasing exports to Cuba, Stallman said in his statement.
Language in an omnibus appropriations bill would allow travel on a general license rather than a specific license. Farm Bureau believes that will reduce delays in commercial sales.
The Farm Bureau also favors commercially defining “cash payments in advance” that would allow payments from Cuba to be wired directly to U.S. banks instead of going through a third-country bank as is currently required.
The group also favors more access to U.S. travel for Cuban agricultural inspectors to meet with suppliers and inspect facilities.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Friday, April 17, 2009
South Africa - What the ANC's victory means
The ANC is poised to win a convincing majority in national polls on Wednesday on the back of an effective electoral machinery and a resurgence in the populous province of KwaZulu-Natal.
But beneath the headline figures, which will likely see the party coming close to the critical two-thirds majority it so urgently wants, there are signs of an important change in the political landscape.
The ANC’s victory portends an arguably more significant realignment: a shift in the political landscape which could see the Democratic Alliance and Cope work closely together and so begin the work of crafting a governing alternative for future elections.
Cope galvanises ANC
The formation of Cope put the ANC in battle mode: it threw all its campaigning talent and tens of millions of rands into the campaign. ANC secretary general Gwede Mantashe, who spoke to the Mail & Guardian this week, predicted a two-thirds majority for his party and said the ANC strategy had been to protect its traditional support bases from the newcomer. The latest Ipsos Markinor poll, released this week, suggests the ANC will do well but that it will end with a 65% majority victory.
Mantashe denied organising events in areas where Cope events were planned. “It was a coincidence that we were always in the same area. The main issue was to contest and reassert the ANC in traditional ANC areas.”
Mantashe said the ANC’s election campaign had been successful because of its decision to do away with rival power centres in the party, loyal either to former president Thabo Mbeki or to ANC president Jacob Zuma.
“Many thought this would backfire and strengthen Cope. But as things unfolded, we became convinced it was the right decision.”
Mantashe acknowledged that Cope’s formation had an initial impact on the ANC, but said this was no longer true.
“We could not take the formation of Cope as a non-event. It distracted our programmes, but we went through that phase quickly and started focusing on ANC programmes.”
The South African culture of support for the underdog has proven to be the wind beneath the ANC’s wings: while the opposition is up in arms over the withdrawal of charges against party president Zuma, the campaign is likely to be boosted by his perceived victory.
The survey said Zuma’s legal woes have not affected his party and that only the controversial behaviour of the ANC Youth League and its president, Julius Malema, have cost it support.
One-third of voters polled said they would vote for an opposition party because of Malema, while 10% said they would not vote at all because of him. More than 50% of those polled said Zuma’s legal troubles will “make them more likely to vote for the ANC”.
Realignment
South Africa stands on the brink of a major political realignment, as opposition parties, particularly Cope and the DA, move quickly towards a cooperative relationship after next week’s elections.
While the elections are likely to set Cope and the DA on the road to convergence, there are also indications that the lesser parties, particularly the IFP and the UDM, will take a heavy hit at the polls.
Some analysts believe that the Zuma factor could push the IFP below 20% in its KwaZulu-Natal stronghold, from 48% in 2004.
Opposition leaders are already preparing to work together more closely to fight the ANC. The combined court challenge by the DA, Cope, UDM, ACDP and IFP to the National Prosecuting Authority’s decision to drop charges against Zuma could be a straw in the wind.
Cope second deputy president Lynda Odendaal confirmed that opposition parties are growing closer. “We have a more conciliatory approach, because we have the same issues. It makes sense for us to be closer,” she told the M&G.
The election is also likely to highlight a growing Zimbabwe-style divide between rural and urban voters, with the ANC pulling almost half of its votes from rural areas and the DA receiving almost 70% of its support from towns and cities.
Despite a vibrant and well-resourced election campaign, the ANC could lose its two-thirds majority in Parliament, preventing it from unilaterally altering the Constitution. The survey, gives the party a clear majority, with 64,7% nationally.
It predicted that the DA will drop to 10,8%, from 12,4%, while Cope will poll 8,9% and the IFP 2,7%.
Smaller parties such as the UDM and ID will also decline to 0,7% and 1,1% respectively.
Markinor polled 3 531 voters countrywide between February 24 and March 10 this year.
But the parties’ final vote-catching push this week will play an important role, as 4,2% of the electorate, or 900 000 votes, is still undecided. About 3,9% (800 000 voters) would not state their preference. Roughly 50 000 votes are needed for a party to secure one parliamentary seat.
A racial glass ceiling
Voting will continue to be mainly race-based, with 78,8% of black voters backing the ANC, while the majority of the DA’s votes come from whites (59,8% of whites sampled), coloureds (35,1%) and Indians (29,6%).
About 22,2% of coloureds surveyed will vote for Cope and 13,7% of whites, suggesting Cope is the only party likely to break racial patterns of electoral support.
The survey showed that the ANC is the party of choice for most rural voters, while Cope and DA support is concentrated in the metros.
Markinor found 69,7% of DA votes come from urban voters in areas such as Pretoria, Cape Town, Durban, Johannesburg, Port Elizabeth and the East Rand.
DA leader Helen Zille campaigned nationally, but the party focused on the Western Cape, where Zille has a strong presence as Cape Town mayor.
And the parties think?
Assessing their own chances, political parties are, predictably, more optimistic than the survey.
Cope is convinced it will take between 15% and 20% of the national vote. Its first deputy president, Mbhazima Shilowa, told the M&G the party wants to govern in six provinces -- Western Cape, Eastern Cape, Northern Cape, Limpopo, Gauteng and North West -- on its own or in coalition.
The party has given up on KwaZulu-Natal and the Free State, despite president Mosiuoa Lekota and secretary general Charlotte Lobe hailing from the latter province.
Cope expects its best election result in Limpopo, where it estimates it will take 42% and be placed to lead a coalition government. An earlier Markinor survey found 30% backing in Limpopo.
In the Western Cape the party is aiming for 25% and claims to have strong support in black and coloured townships.
The DA is likely to be the province’s majority party, while falling short of an absolute majority -- meaning that coalition rule with smaller parties is likely there.
In the Northern Cape Cope expects to win 35% of the vote, making it the official opposition. It expects a similar outcome in Mpumalanga.
In the Eastern Cape, once considered a Cope stronghold, a recent spate of by-election losses and the defection of regional Cope leaders to the ANC have hurt its support.
Mantashe said the ANC would use the Siyanqoba (Victory) rally, taking place simultaneously at two stadiums at the weekend, to send a clear message to “right-wing” elements out to destroy the ANC and Zuma.
But beneath the headline figures, which will likely see the party coming close to the critical two-thirds majority it so urgently wants, there are signs of an important change in the political landscape.
The ANC’s victory portends an arguably more significant realignment: a shift in the political landscape which could see the Democratic Alliance and Cope work closely together and so begin the work of crafting a governing alternative for future elections.
Cope galvanises ANC
The formation of Cope put the ANC in battle mode: it threw all its campaigning talent and tens of millions of rands into the campaign. ANC secretary general Gwede Mantashe, who spoke to the Mail & Guardian this week, predicted a two-thirds majority for his party and said the ANC strategy had been to protect its traditional support bases from the newcomer. The latest Ipsos Markinor poll, released this week, suggests the ANC will do well but that it will end with a 65% majority victory.
Mantashe denied organising events in areas where Cope events were planned. “It was a coincidence that we were always in the same area. The main issue was to contest and reassert the ANC in traditional ANC areas.”
Mantashe said the ANC’s election campaign had been successful because of its decision to do away with rival power centres in the party, loyal either to former president Thabo Mbeki or to ANC president Jacob Zuma.
“Many thought this would backfire and strengthen Cope. But as things unfolded, we became convinced it was the right decision.”
Mantashe acknowledged that Cope’s formation had an initial impact on the ANC, but said this was no longer true.
“We could not take the formation of Cope as a non-event. It distracted our programmes, but we went through that phase quickly and started focusing on ANC programmes.”
The South African culture of support for the underdog has proven to be the wind beneath the ANC’s wings: while the opposition is up in arms over the withdrawal of charges against party president Zuma, the campaign is likely to be boosted by his perceived victory.
The survey said Zuma’s legal woes have not affected his party and that only the controversial behaviour of the ANC Youth League and its president, Julius Malema, have cost it support.
One-third of voters polled said they would vote for an opposition party because of Malema, while 10% said they would not vote at all because of him. More than 50% of those polled said Zuma’s legal troubles will “make them more likely to vote for the ANC”.
Realignment
South Africa stands on the brink of a major political realignment, as opposition parties, particularly Cope and the DA, move quickly towards a cooperative relationship after next week’s elections.
While the elections are likely to set Cope and the DA on the road to convergence, there are also indications that the lesser parties, particularly the IFP and the UDM, will take a heavy hit at the polls.
Some analysts believe that the Zuma factor could push the IFP below 20% in its KwaZulu-Natal stronghold, from 48% in 2004.
Opposition leaders are already preparing to work together more closely to fight the ANC. The combined court challenge by the DA, Cope, UDM, ACDP and IFP to the National Prosecuting Authority’s decision to drop charges against Zuma could be a straw in the wind.
Cope second deputy president Lynda Odendaal confirmed that opposition parties are growing closer. “We have a more conciliatory approach, because we have the same issues. It makes sense for us to be closer,” she told the M&G.
The election is also likely to highlight a growing Zimbabwe-style divide between rural and urban voters, with the ANC pulling almost half of its votes from rural areas and the DA receiving almost 70% of its support from towns and cities.
Despite a vibrant and well-resourced election campaign, the ANC could lose its two-thirds majority in Parliament, preventing it from unilaterally altering the Constitution. The survey, gives the party a clear majority, with 64,7% nationally.
It predicted that the DA will drop to 10,8%, from 12,4%, while Cope will poll 8,9% and the IFP 2,7%.
Smaller parties such as the UDM and ID will also decline to 0,7% and 1,1% respectively.
Markinor polled 3 531 voters countrywide between February 24 and March 10 this year.
But the parties’ final vote-catching push this week will play an important role, as 4,2% of the electorate, or 900 000 votes, is still undecided. About 3,9% (800 000 voters) would not state their preference. Roughly 50 000 votes are needed for a party to secure one parliamentary seat.
A racial glass ceiling
Voting will continue to be mainly race-based, with 78,8% of black voters backing the ANC, while the majority of the DA’s votes come from whites (59,8% of whites sampled), coloureds (35,1%) and Indians (29,6%).
About 22,2% of coloureds surveyed will vote for Cope and 13,7% of whites, suggesting Cope is the only party likely to break racial patterns of electoral support.
The survey showed that the ANC is the party of choice for most rural voters, while Cope and DA support is concentrated in the metros.
Markinor found 69,7% of DA votes come from urban voters in areas such as Pretoria, Cape Town, Durban, Johannesburg, Port Elizabeth and the East Rand.
DA leader Helen Zille campaigned nationally, but the party focused on the Western Cape, where Zille has a strong presence as Cape Town mayor.
And the parties think?
Assessing their own chances, political parties are, predictably, more optimistic than the survey.
Cope is convinced it will take between 15% and 20% of the national vote. Its first deputy president, Mbhazima Shilowa, told the M&G the party wants to govern in six provinces -- Western Cape, Eastern Cape, Northern Cape, Limpopo, Gauteng and North West -- on its own or in coalition.
The party has given up on KwaZulu-Natal and the Free State, despite president Mosiuoa Lekota and secretary general Charlotte Lobe hailing from the latter province.
Cope expects its best election result in Limpopo, where it estimates it will take 42% and be placed to lead a coalition government. An earlier Markinor survey found 30% backing in Limpopo.
In the Western Cape the party is aiming for 25% and claims to have strong support in black and coloured townships.
The DA is likely to be the province’s majority party, while falling short of an absolute majority -- meaning that coalition rule with smaller parties is likely there.
In the Northern Cape Cope expects to win 35% of the vote, making it the official opposition. It expects a similar outcome in Mpumalanga.
In the Eastern Cape, once considered a Cope stronghold, a recent spate of by-election losses and the defection of regional Cope leaders to the ANC have hurt its support.
Mantashe said the ANC would use the Siyanqoba (Victory) rally, taking place simultaneously at two stadiums at the weekend, to send a clear message to “right-wing” elements out to destroy the ANC and Zuma.
Source: Mail & Guardian Online
MMANALEDI MATABOGE, MANDY ROSSOUW AND MATUMA LETSOALO | JOHANNESBURG, SOUTH AFRICA
http://www.mg.co.za/article/2009-04-17-what-the-ancs-victory-means
Monday, April 13, 2009
South Africa- Wanted: a national industry base
South Africa needs to adopt policies that develop local capacity.
In the global downturn, there is broad recognition that government investment in the economy has a critical role to play in kick-starting economic activity and, consequently, boosting both business confidence and private investment.
The challenge is to spend this money in a way that optimises its impact on domestic economic activity, particularly investment and the development of technological and industrial capabilities.
Between 1976 and 1994, public investment in infrastructure dropped from 16% of GDP to around 6%. Between 1994 and 2004, fixed investment remained at the 5% to 6% level. As a result of this drop in investment, our capital procurement capabilities declined, as well as the capacity of supplier industries.
Analysis by the Department of Public Enterprises (DPE), with the Industrial Development Corporation, suggested that up to 40% of the requirement for Eskom and Transnet investment programmes would need to be imported.
It is tempting to believe that the solution is simple: proclaim a policy directive that the public sector needs to procure a high proportion of the capital programmes locally. This would seem to provide additional stimuli to national industry and decrease the import bill — both good news for growth. The problem is that in many areas local capabilities do not exist, or where they do exist they are comparatively expensive.
We need to promote investment to build a globally competitive national industry, capable of supplying not just the needs of the national infrastructure programme, but of exporting as well. The question is how.
The first step must be to ensure basic procurement disciplines are put in place. Very often national suppliers are excluded because of inadequate communication between the buyer and the supplier community. Equipment is often not procured locally because the tender is unnecessarily specified, thus excluding national suppliers. Inadequate notice of the tender means national suppliers are not able to prepare capacity to meet the demand.
After the massive downturn in government investment in the 1970s, suppliers are wary of making significant investments in plant and skills without some security of demand. This requires the supplier entering into a longer term relationship with the customer, giving it the confidence to invest.
While this can give the supplier additional power, in practice, when the supplier depends on a major customer, these relationships are often associated with continuous productivity and quality improvements and innovations. This has happened in the automotive and deep mining industries in South Africa.
As a first step towards building a developmental procurement culture, the DPE, with the support of the Department of Trade and Industry, introduced the competitive supplier development programme. This requires Eskom, Transnet and the Pebble Bed Modular Reactor to produce strategic supplier development plans, based on an assessment of the demand created by their five-year infrastructure plans, and an assessment of the capabilities of the national supplier community.
The plans encourage the enterprises to start thinking about supplier development at the earliest stage of the project development cycle, with an emphasis on where the enterprise will build longer term relationships.
In addition, they are made public so the supplier community can plan ahead.
Transnet took the plan a step further by establishing a rail and port supplier association — a platform for communication.
Also, in partnership with the DPE and the UN Development Organisation, Transnet launched a supplier benchmarking programme to encourage suppliers to achieve world-class levels of efficiency and quality, and to enable Transnet to broker developmental relationships between global original equipment manufacturers and South African companies.
Eskom is establishing component hubs to encourage development of national capabilities in key components.
The basic requirement for achieving leverage from procurements is to have highly skilled procurement practitioners in place overseeing the project development cycle.
Transnet has launched an ambitious procurement capability programme. In partnership with the UK Chartered Institute of Procurement and Supply, it has a comprehensive procurement capacity building programme to provide increasingly sophisticated skills to support supplier development. In addition, Transnet annually benchmarks the quality of the procurement capability as a whole. So, it is encouraging investment in suppliers while achieving significant savings from procuring effectively.
There is no reason large private sector companies cannot also enhance their procurement capabilities and leverage their procurements to promote investment and growth in their supplier industries. This is already an accepted practice in advanced manufacturing industries such as automotive and aerospace.
South Africa already pays an effective premium for black economic empowerment. It is critical that this policy coherently supports supplier development.
For example, the empowerment profile of a company should take into account the “empowered value add” or the concrete value that is being produced in South Africa. For example, a company with a 50% empowerment score, but that produces a product in South Africa, should be given a higher rating than a company with an 80% score, but which imports the product.
Capital expenditure programmes in state- owned enterprises, government and private sector companies create vast potential for the development of supplier industries and contribute to growth and employment.
Enormous value is lost to the economy through inefficient procurement and the absence of concerted national initiatives to build procurement capability. Investments in building national capabilities are not being made because of poor procurement planning and execution. We need to implement policies that encourage and reward the building of capability.
Dr Ritchken is strategic projects adviser to the Department of Public
Enterprises
http://www.thetimes.co.za/Business/BusinessTimes/Article1.aspx?id=968853
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
What the US learnt from Iraq … and the Arab world didn’t
The war in Iraq has taught the United States the limitation of using its military superpower for social engineering around the world, a lesson clearly learnt by Barack Obama. Yet six years after the toppling of Saddam Hussein’s statue in Firdos Square, what has been learnt by the Iraqis and the Arabs? Little, if anything.
And who started the war anyway? Aside from September 11, some manipulative Iraqi leaders in exile and America’s appetite for controlling the world’s fourth-largest oil reservoir, an army of Arab intellectuals contributed to the American adventure.
Time and again since the end of the Second World War the proponents of pan-Arabism, nationalism, leftism and progressive ideologies peddled one main idea: western colonialism – French and British, then American – is responsible for Arab misery.
Unverifiable stories of Saddam Hussein’s connections to the CIA were plenty, and gave many Arabs little to worry about when Iraq’s strongman employed brutality against his own citizens, as long as they could easily blame it on America. Whenever a Palestinian militant blew himself up with a suicide bomb, many Arabs blamed the miserable socio-economic conditions in the Palestinian Territories under American-sponsored Israeli occupation.
For decades, with an increasing number of reports showing many Arab countries lagging behind in all aspects of development, intellectuals rarely blamed the dominant cultural trends in those countries. Instead they found it easier to pound America for supporting autocrats such as Saddam, and obstructing the natural tendency among Arab peoples towards development and self improvement.
Then, after nearly 60 years, America suddenly reversed its behaviour by sending its troops to topple Iraq’s dictator, an act that the US oddly judged to be in its own interests. Arabs took to the streets en masse to protest against the war, while intellectuals suddenly disregarded the links they often highlighted between Iraqi backwardness and the rule of an American-supported dictator.
Only a minority of Arabs – namely Kuwaitis who had felt Saddam’s wrath, and a majority of Iraqis – stood their ground in cheering for the toppling of the Iraqi autocrat. “Iraq is the country of one million engineers”, and “Cairo writes, Beirut publishes and Baghdad reads” were only a couple of the thoughts that many of us, supporters of the war, offered to argue that finally an opportunity had come to the Iraqi people.
I visited Iraq in 2003 shortly after the downfall of the Saddam Hussein regime, after 21 years in exile and for the first time as an adult. I was keen to take part in my country’s rebirth. But instead of the one million engineers we hoped for, we got two million thieves who looted their own nation.
Going to Iraq in 2003 was like going back decades in a time machine. At the time, Iraqis had not seen cell phones, and only a few knew about the internet. Satellite technology was alien too, and I vividly remember trying to explain to family and friends how an ATM machine works, the credit card system, GPS and many other technologies that were common knowledge in most other countries.
We proponents of change in Iraq were cheated: the state of Iraq was a mirage, and vacuum was inevitable. Saddam had missiles that he paraded along with what looked like a mighty army, but underneath that facade there were no institutions or civil society to keep anything running after him.
While many might argue that it was Saddam who destroyed Iraq, making it crumble in his absence, it is hard to believe that one man could kill one of the oldest civilisations in the world. Judging by other nations who saw their dictators collapse but still developed safely into relatively stable countries, such as in Eastern Europe after the Cold War and Japan after the Second Wold War, there is no reason to consider Iraq a classic case of transformation from autocracy to democracy.
Furthermore, there is no evidence indicating that a robust civil society ever existed in Iraq. The country never practised peaceful politics. Since its inception, Iraq’s history tells only stories of warring tribal alliances hiding under a fake garb called the state, and resulting in either brutal clashes or tyranny.
Saddam did not come from Mars. He came from the village of Awja. His character was shaped on the streets of Baghdad when, along with his clan, calling itself Baathist, he engaged in fist fights with other clans who called themselves communists, Nasserites and other unfitting titles borrowed from modern times.
In Iraq, Saddam was not the cause of Iraqi backwardness, but rather its product. And in his absence and the ensuing vacuum, intelligence operatives from neighbouring countries found an opportunity to settle scores with America on the one hand, and among themselves on the other. The result was five years of Iraqi bloodshed.
This is the sad story of Iraq and most of the Arab world, and the lesson should be clear: when looking at their misery, the Arabs should stop blaming the Mongols, the Persians, the Ottomans, the French, the British, the Russians, the Israelis or the Americans for their ills.
When feeling in distress over socioeconomic and political issues inside their countries, Arabs should start looking inward and keep in mind an Ancient Greek aphorism: Know Thyself.
Hussain Abdul Hussain is a Visiting Fellow with Chatham House, London
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Sunday, April 12, 2009
Hard up in New York? Pawn your Renoir
Pity the world's rich: as the credit crunch bites, they too are heading to the pawnbroker's -- albeit with a Renoir or Van Gogh under their arm.
New York pawn shops dealing with art collectors are at the refined end of a market more accustomed to seeing loans exchanged for an old watch, a television or family jewellery.
But with banks squeezing credit lines, hocking an Old Master, or an Andy Warhol, can be a good way to raise serious cash.
"There is a large liquidity crisis at the moment. Banks are limiting their lending," said Meghan Carleton, a banker at Art Finance Partners, with offices in a small art gallery on the seventh floor of an Art Deco skyscraper near Central Park.
According to Carleton, pawning art goes back to the legendary Medici family of power brokers, bankers, rulers and art patrons who lived in Florence between the 14th and 18th centuries.
But it's the modern recession and banking crisis that is driving her business.
"We have seen an increase in the last six to eight months," Carleton said. "Up to 40% of our clients are new ones, or old [ones] who bring more things."
Unlike less privileged debtors, someone pawning a valuable art work doesn't actually push the canvas across a counter.
"Our borrowers keep their properties at home," said another art loans specialist, who asked not to be identified.
"If they default, we can sue them and force them to sell even their house. Every loan is personally guaranteed by the borrower."
The revelation in the New York Times earlier this year that photographer Annie Leibovitz had taken a $15-million loan from Art Capital Group by pawning her own work caused a scandal in this secretive corner of the finance world.
Carleton said she would never reveal customers' identities, although she said they come from all over the world and some "are famous".
"They leverage art not necessarily to repay debts," she said. "It can be to launch a new business, or to buy another piece of art."
But "all of them require anonymity. In divorce cases, for example", she added.
The system is similar to traditional pawn brokering, only on a greater scale.
A client pawns a work of art and secures a loan amounting to 40% of its estimated value.
The loan is usually short term, but can be longer in some cases, according to the website of Fine Art Finance, which is part of Emigrant Bank.
The debtor pays a hefty interest of between 12% to 19% of the value of the loan. In case of default the debtor loses the piece and, potentially, other assets -- something that happens in about 15% of cases, according to Carleton.
A handful of institutions -- including Art Capital, Art Finance Partners and Fine Art Finance -- operate in New York, generally with no more than five partners.
The art loans specialist who did not want to be identified said that major banks had got out of the business.
"Deutsche Bank, Citi or Bank of America occasionally made art loans, or loans secured by musical instruments. That is no longer the case. Many banks lost gigantic amounts in the 1970s and in the 1990s," she said.
"It's a very scary kind of loan," she said. "The art market is wild, not transparent at all, perfect for irregular activities".
The specialist said that her own institution makes loans above $1-million and will accept only entire collections -- whether paintings, furniture, or stringed instruments -- that are worth at least $5-million as collateral.
"Since 2008 we have seen an increase in inquiries of one and a half to two times," she said.
"We don't have losses in our portfolio. We are very very over-collateralised."
Web Address: http://www.mg.co.za/article/2009-04-12-hard-up-in-new-york-pawn-your-renoir
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Power plants drive new Gulf construction projects
Abu Dhabi´s Dolphin Energy, which pipes gas from Qatar to UAE and Omani customers, mostly electricity producers, is also reportedly close to a deal to refinance $3.45bn of debt. The company is a joint venture between Abu Dhabi´s government-owned Mubadala, the French energy group Total and the US oil company Occidental Petroleum. Jacques Brinon / AFP
From Kuwait to Saudi Arabia, power plants are becoming the Gulf’s new symbols of growth as the region’s development focus shifts from soaring towers to infrastructure.
The recent drought in project financing has left the Gulf’s shores littered with the shells of half-built property developments, some of which may never be completed. GCC governments are now pushing the region’s banks to direct lending to power and water projects instead, and have announced plans to award contracts for a flurry of developments in the sector.
Last week, Kuwait’s electricity and water ministry said it planned to launch bidding rounds for 3.3 billion Kuwaiti dinars (Dh41.08bn) of electricity generation and water desalination projects by the end of next year. In all, five power plants are planned to add 6,700 megawatts (Mw) of generating capacity.
The state-owned Dubai Electricity and Water Authority said it would invest Dh13bn (US$3.53bn) this year in new projects as part of a multi-year Dh75bn programme to increase Dubai’s electricity and water supplies.
The moves reflect the greater direct and indirect role governments are expected to play in project financing to ensure that necessary infrastructure projects are not derailed, as private-sector lenders continue to be reluctant to advance credit.
As a result, the strategic importance of development projects is taking precedence over their potential to generate quick profits in decisions on which projects move ahead.
“Governments are expected to replace the private sector as the leading entities to announce new mega-projects,” said a recent report by the Wharton School of the University of Pennsylvania on GCC investment. “The emphasis has shifted from real estate to human capital and infrastructure.”
After propping them up with liquidity injections, GCC governments have considerable influence with the banks. Where additional funds are needed from offshore lenders, government support for power projects could also boost confidence among credit providers.
Some key power-sector developments, including Bahrain’s $1.6bn Al Dur electricity project, were close to securing financing, according to industry sources.
Abu Dhabi’s Dolphin Energy, which pipes gas from Qatar to UAE and Omani customers, mostly electricity producers, is also reportedly close to a deal to refinance $3.45bn of debt. The company is a joint venture between Abu Dhabi’s government-owned Mubadala, the French energy group Total and the US oil company Occidental Petroleum.
Some Gulf states have also shown willingness to invest directly in their power sectors, at least as an interim measure.
Earlier this month, the Saudi government approved the creation of a state-owned enterprise to invest in power-generation projects in the kingdom. The Water and Electricity Holding Company will initially take over the 32 per cent stakes in three Saudi power and water projects currently held by a government-owned investment fund, but would build on those assets through commercial deals. As the investment climate improves, the new company could offer some or all of its shares to the public, said Abdullah al Shehri, the vice governor for regulatory affairs of the Saudi Electricity and Cogeneration Regulatory Authority.
In one of its highest-profile energy projects, the UAE is pressing ahead with plans to develop a fleet of nuclear power stations to meet a projected 9 per cent annual increase in electricity demand in the country over the next decade.
Emirates Nuclear Energy Corporation, the organisation running the nuclear implementation programme, recently began pre-qualifying teams of companies to bid on a contract to build the UAE’s first atomic power plant, setting a deadline of late this month for the submission of documents.
The potential consortium leaders, all suppliers of nuclear reactors, include France’s Areva, the US firms, Westinghouse and GE, Japan’s Toshiba, and Korea Electric Power Corporation.
The Ras al Khaimah Government, through its RAK Investment Authority, recently bought into an Indonesian coal-mining project to provide fuel for a planned coal-fired power plant in the emirate.
Elsewhere in the Gulf, gas is the fuel of choice for most power projects, and that is spurring a surge of government investment in gas development.
Saudi Aramco, the Saudi national petroleum company, is accelerating the development of two recently discovered gasfields. It has included the Arabiyah-Hasbah development in its five-year plan for 2010-2014. Last month, Aramco said it would invest $60bn in boosting the kingdom’s gas-production capacity over the next five years.
Abu Dhabi National Oil Company is evaluating bids for a major project to boost gas production by integrating offshore and onshore gas developments, and is expected soon to announce a final decision on a plan to develop the Shah sour gasfield with the US company ConocoPhillips.
Beyond the Gulf, India, another power-hungry nation, last week announced the launch of its biggest auction of onshore and offshore oil and gas exploration licences. Its government, which expects to attract $3bn in exploration commitments, is also accepting bids on projects to extract gas trapped in coal seams.
“The most effective antidote for the meltdown is the generation of economic activity,” said R S Pandey, the Indian government’s petroleum secretary.
tcarlisle@thenational.ae
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Thursday, April 9, 2009
The dark side of Dubai
Dubai was meant to be a Middle-Eastern Shangri-La, a glittering monument to Arab enterprise and western capitalism. But as hard times arrive in the city state that rose from the desert sands, an uglier story is emerging. Johann Hari reports
The wide, smiling face of Sheikh Mohammed – the absolute ruler of Dubai – beams down on his creation. His image is displayed on every other building, sandwiched between the more familiar corporate rictuses of Ronald McDonald and Colonel Sanders. This man has sold Dubai to the world as the city of One Thousand and One Arabian Lights, a Shangri-La in the Middle East insulated from the dust-storms blasting across the region. He dominates the Manhattan-manqué skyline, beaming out from row after row of glass pyramids and hotels smelted into the shape of piles of golden coins. And there he stands on the tallest building in the world – a skinny spike, jabbing farther into the sky than any other human construction in history.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
The wide, smiling face of Sheikh Mohammed – the absolute ruler of Dubai – beams down on his creation. His image is displayed on every other building, sandwiched between the more familiar corporate rictuses of Ronald McDonald and Colonel Sanders. This man has sold Dubai to the world as the city of One Thousand and One Arabian Lights, a Shangri-La in the Middle East insulated from the dust-storms blasting across the region. He dominates the Manhattan-manqué skyline, beaming out from row after row of glass pyramids and hotels smelted into the shape of piles of golden coins. And there he stands on the tallest building in the world – a skinny spike, jabbing farther into the sky than any other human construction in history.
But something has flickered in Sheikh Mohammed's smile. The ubiquitous cranes have paused on the skyline, as if stuck in time. There are countless buildings half-finished, seemingly abandoned. In the swankiest new constructions – like the vast Atlantis hotel, a giant pink castle built in 1,000 days for $1.5bn on its own artificial island – where rainwater is leaking from the ceilings and the tiles are falling off the roof. This Neverland was built on the Never-Never – and now the cracks are beginning to show. Suddenly it looks less like Manhattan in the sun than Iceland in the desert.
Once the manic burst of building has stopped and the whirlwind has slowed, the secrets of Dubai are slowly seeping out. This is a city built from nothing in just a few wild decades on credit and ecocide, suppression and slavery. Dubai is a living metal metaphor for the neo-liberal globalised world that may be crashing – at last – into history.
I. An Adult Disneyland
Karen Andrews can't speak. Every time she starts to tell her story, she puts her head down and crumples. She is slim and angular and has the faded radiance of the once-rich, even though her clothes are as creased as her forehead. I find her in the car park of one of Dubai's finest international hotels, where she is living, in her Range Rover. She has been sleeping here for months, thanks to the kindness of the Bangladeshi car park attendants who don't have the heart to move her on. This is not where she thought her Dubai dream would end.
Her story comes out in stutters, over four hours. At times, her old voice – witty and warm – breaks through. Karen came here from Canada when her husband was offered a job in the senior division of a famous multinational. "When he said Dubai, I said – if you want me to wear black and quit booze, baby, you've got the wrong girl. But he asked me to give it a chance. And I loved him."
All her worries melted when she touched down in Dubai in 2005. "It was an adult Disneyland, where Sheikh Mohammed is the mouse," she says. "Life was fantastic. You had these amazing big apartments, you had a whole army of your own staff, you pay no taxes at all. It seemed like everyone was a CEO. We were partying the whole time."
Her husband, Daniel, bought two properties. "We were drunk on Dubai," she says. But for the first time in his life, he was beginning to mismanage their finances. "We're not talking huge sums, but he was getting confused. It was so unlike Daniel, I was surprised. We got into a little bit of debt." After a year, she found out why: Daniel was diagnosed with a brain tumour.
One doctor told him he had a year to live; another said it was benign and he'd be okay. But the debts were growing. "Before I came here, I didn't know anything about Dubai law. I assumed if all these big companies come here, it must be pretty like Canada's or any other liberal democracy's," she says. Nobody told her there is no concept of bankruptcy. If you get into debt and you can't pay, you go to prison.
"When we realised that, I sat Daniel down and told him: listen, we need to get out of here. He knew he was guaranteed a pay-off when he resigned, so we said – right, let's take the pay-off, clear the debt, and go." So Daniel resigned – but he was given a lower pay-off than his contract suggested. The debt remained. As soon as you quit your job in Dubai, your employer has to inform your bank. If you have any outstanding debts that aren't covered by your savings, then all your accounts are frozen, and you are forbidden to leave the country.
"Suddenly our cards stopped working. We had nothing. We were thrown out of our apartment." Karen can't speak about what happened next for a long time; she is shaking.
Daniel was arrested and taken away on the day of their eviction. It was six days before she could talk to him. "He told me he was put in a cell with another debtor, a Sri Lankan guy who was only 27, who said he couldn't face the shame to his family. Daniel woke up and the boy had swallowed razor-blades. He banged for help, but nobody came, and the boy died in front of him."
Karen managed to beg from her friends for a few weeks, "but it was so humiliating. I've never lived like this. I worked in the fashion industry. I had my own shops. I've never..." She peters out.
Daniel was sentenced to six months' imprisonment at a trial he couldn't understand. It was in Arabic, and there was no translation. "Now I'm here illegally, too," Karen says I've got no money, nothing. I have to last nine months until he's out, somehow." Looking away, almost paralysed with embarrassment, she asks if I could buy her a meal.
She is not alone. All over the city, there are maxed-out expats sleeping secretly in the sand-dunes or the airport or in their cars.
"The thing you have to understand about Dubai is – nothing is what it seems," Karen says at last. "Nothing. This isn't a city, it's a con-job. They lure you in telling you it's one thing – a modern kind of place – but beneath the surface it's a medieval dictatorship."
II. Tumbleweed
Thirty years ago, almost all of contemporary Dubai was desert, inhabited only by cactuses and tumbleweed and scorpions. But downtown there are traces of the town that once was, buried amidst the metal and glass. In the dusty fort of the Dubai Museum, a sanitised version of this story is told.
In the mid-18th century, a small village was built here, in the lower Persian Gulf, where people would dive for pearls off the coast. It soon began to accumulate a cosmopolitan population washing up from Persia, the Indian subcontinent, and other Arab countries, all hoping to make their fortune. They named it after a local locust, the daba, who consumed everything before it. The town was soon seized by the gunships of the British Empire, who held it by the throat as late as 1971. As they scuttled away, Dubai decided to ally with the six surrounding states and make up the United Arab Emirates (UAE).
The British quit, exhausted, just as oil was being discovered, and the sheikhs who suddenly found themselves in charge faced a remarkable dilemma. They were largely illiterate nomads who spent their lives driving camels through the desert – yet now they had a vast pot of gold. What should they do with it?
Dubai only had a dribble of oil compared to neighbouring Abu Dhabi – so Sheikh Maktoum decided to use the revenues to build something that would last. Israel used to boast it made the desert bloom; Sheikh Maktoum resolved to make the desert boom. He would build a city to be a centre of tourism and financial services, sucking up cash and talent from across the globe. He invited the world to come tax-free – and they came in their millions, swamping the local population, who now make up just 5 per cent of Dubai. A city seemed to fall from the sky in just three decades, whole and complete and swelling. They fast-forwarded from the 18th century to the 21st in a single generation.
If you take the Big Bus Tour of Dubai – the passport to a pre-processed experience of every major city on earth – you are fed the propaganda-vision of how this happened. "Dubai's motto is 'Open doors, open minds'," the tour guide tells you in clipped tones, before depositing you at the souks to buy camel tea-cosies. "Here you are free. To purchase fabrics," he adds. As you pass each new monumental building, he tells you: "The World Trade Centre was built by His Highness..."
But this is a lie. The sheikh did not build this city. It was built by slaves. They are building it now.
III. Hidden in plain view
There are three different Dubais, all swirling around each other. There are the expats, like Karen; there are the Emiratis, headed by Sheikh Mohammed; and then there is the foreign underclass who built the city, and are trapped here. They are hidden in plain view. You see them everywhere, in dirt-caked blue uniforms, being shouted at by their superiors, like a chain gang – but you are trained not to look. It is like a mantra: the Sheikh built the city. The Sheikh built the city. Workers? What workers?
Every evening, the hundreds of thousands of young men who build Dubai are bussed from their sites to a vast concrete wasteland an hour out of town, where they are quarantined away. Until a few years ago they were shuttled back and forth on cattle trucks, but the expats complained this was unsightly, so now they are shunted on small metal buses that function like greenhouses in the desert heat. They sweat like sponges being slowly wrung out.
Sonapur is a rubble-strewn patchwork of miles and miles of identical concrete buildings. Some 300,000 men live piled up here, in a place whose name in Hindi means "City of Gold". In the first camp I stop at – riven with the smell of sewage and sweat – the men huddle around, eager to tell someone, anyone, what is happening to them.
Sahinal Monir, a slim 24-year-old from the deltas of Bangladesh. "To get you here, they tell you Dubai is heaven. Then you get here and realise it is hell," he says. Four years ago, an employment agent arrived in Sahinal's village in Southern Bangladesh. He told the men of the village that there was a place where they could earn 40,000 takka a month (£400) just for working nine-to-five on construction projects. It was a place where they would be given great accommodation, great food, and treated well. All they had to do was pay an up-front fee of 220,000 takka (£2,300) for the work visa – a fee they'd pay off in the first six months, easy. So Sahinal sold his family land, and took out a loan from the local lender, to head to this paradise.
As soon as he arrived at Dubai airport, his passport was taken from him by his construction company. He has not seen it since. He was told brusquely that from now on he would be working 14-hour days in the desert heat – where western tourists are advised not to stay outside for even five minutes in summer, when it hits 55 degrees – for 500 dirhams a month (£90), less than a quarter of the wage he was promised. If you don't like it, the company told him, go home. "But how can I go home? You have my passport, and I have no money for the ticket," he said. "Well, then you'd better get to work," they replied.
Sahinal was in a panic. His family back home – his son, daughter, wife and parents – were waiting for money, excited that their boy had finally made it. But he was going to have to work for more than two years just to pay for the cost of getting here – and all to earn less than he did in Bangladesh.
He shows me his room. It is a tiny, poky, concrete cell with triple-decker bunk-beds, where he lives with 11 other men. All his belongings are piled onto his bunk: three shirts, a spare pair of trousers, and a cellphone. The room stinks, because the lavatories in the corner of the camp – holes in the ground – are backed up with excrement and clouds of black flies. There is no air conditioning or fans, so the heat is "unbearable. You cannot sleep. All you do is sweat and scratch all night." At the height of summer, people sleep on the floor, on the roof, anywhere where they can pray for a moment of breeze.
The water delivered to the camp in huge white containers isn't properly desalinated: it tastes of salt. "It makes us sick, but we have nothing else to drink," he says.
The work is "the worst in the world," he says. "You have to carry 50kg bricks and blocks of cement in the worst heat imaginable ... This heat – it is like nothing else. You sweat so much you can't pee, not for days or weeks. It's like all the liquid comes out through your skin and you stink. You become dizzy and sick but you aren't allowed to stop, except for an hour in the afternoon. You know if you drop anything or slip, you could die. If you take time off sick, your wages are docked, and you are trapped here even longer."
He is currently working on the 67th floor of a shiny new tower, where he builds upwards, into the sky, into the heat. He doesn't know its name. In his four years here, he has never seen the Dubai of tourist-fame, except as he constructs it floor-by-floor.
Is he angry? He is quiet for a long time. "Here, nobody shows their anger. You can't. You get put in jail for a long time, then deported." Last year, some workers went on strike after they were not given their wages for four months. The Dubai police surrounded their camps with razor-wire and water-cannons and blasted them out and back to work.
The "ringleaders" were imprisoned. I try a different question: does Sohinal regret coming? All the men look down, awkwardly. "How can we think about that? We are trapped. If we start to think about regrets..." He lets the sentence trail off. Eventually, another worker breaks the silence by adding: "I miss my country, my family and my land. We can grow food in Bangladesh. Here, nothing grows. Just oil and buildings."
Since the recession hit, they say, the electricity has been cut off in dozens of the camps, and the men have not been paid for months. Their companies have disappeared with their passports and their pay. "We have been robbed of everything. Even if somehow we get back to Bangladesh, the loan sharks will demand we repay our loans immediately, and when we can't, we'll be sent to prison."
This is all supposed to be illegal. Employers are meant to pay on time, never take your passport, give you breaks in the heat – but I met nobody who said it happens. Not one. These men are conned into coming and trapped into staying, with the complicity of the Dubai authorities.
Sahinal could well die out here. A British man who used to work on construction projects told me: "There's a huge number of suicides in the camps and on the construction sites, but they're not reported. They're described as 'accidents'." Even then, their families aren't free: they simply inherit the debts. A Human Rights Watch study found there is a "cover-up of the true extent" of deaths from heat exhaustion, overwork and suicide, but the Indian consulate registered 971 deaths of their nationals in 2005 alone. After this figure was leaked, the consulates were told to stop counting.
At night, in the dusk, I sit in the camp with Sohinal and his friends as they scrape together what they have left to buy a cheap bottle of spirits. They down it in one ferocious gulp. "It helps you to feel numb", Sohinal says through a stinging throat. In the distance, the glistening Dubai skyline he built stands, oblivious.
IV. Mauled by the mall
I find myself stumbling in a daze from the camps into the sprawling marble malls that seem to stand on every street in Dubai. It is so hot there is no point building pavements; people gather in these cathedrals of consumerism to bask in the air conditioning. So within a ten minute taxi-ride, I have left Sohinal and I am standing in the middle of Harvey Nichols, being shown a £20,000 taffeta dress by a bored salesgirl. "As you can see, it is cut on the bias..." she says, and I stop writing.
Time doesn't seem to pass in the malls. Days blur with the same electric light, the same shined floors, the same brands I know from home. Here, Dubai is reduced to its component sounds: do-buy. In the most expensive malls I am almost alone, the shops empty and echoing. On the record, everybody tells me business is going fine. Off the record, they look panicky. There is a hat exhibition ahead of the Dubai races, selling elaborate headgear for £1,000 a pop. "Last year, we were packed. Now look," a hat designer tells me. She swoops her arm over a vacant space.
I approach a blonde 17-year-old Dutch girl wandering around in hotpants, oblivious to the swarms of men gaping at her. "I love it here!" she says. "The heat, the malls, the beach!" Does it ever bother you that it's a slave society? She puts her head down, just as Sohinal did. "I try not to see," she says. Even at 17, she has learned not to look, and not to ask; that, she senses, is a transgression too far.
Between the malls, there is nothing but the connecting tissue of asphalt. Every road has at least four lanes; Dubai feels like a motorway punctuated by shopping centres. You only walk anywhere if you are suicidal. The residents of Dubai flit from mall to mall by car or taxis.
How does it feel if this is your country, filled with foreigners? Unlike the expats and the slave class, I can't just approach the native Emiratis to ask questions when I see them wandering around – the men in cool white robes, the women in sweltering black. If you try, the women blank you, and the men look affronted, and tell you brusquely that Dubai is "fine". So I browse through the Emirati blog-scene and found some typical-sounding young Emiratis. We meet – where else? – in the mall.
Ahmed al-Atar is a handsome 23-year-old with a neat, trimmed beard, tailored white robes, and rectangular wire-glasses. He speaks perfect American-English, and quickly shows that he knows London, Los Angeles and Paris better than most westerners. Sitting back in his chair in an identikit Starbucks, he announces: "This is the best place in the world to be young! The government pays for your education up to PhD level. You get given a free house when you get married. You get free healthcare, and if it's not good enough here, they pay for you to go abroad. You don't even have to pay for your phone calls. Almost everyone has a maid, a nanny, and a driver. And we never pay any taxes. Don't you wish you were Emirati?"
I try to raise potential objections to this Panglossian summary, but he leans forward and says: "Look – my grandfather woke up every day and he would have to fight to get to the well first to get water. When the wells ran dry, they had to have water delivered by camel. They were always hungry and thirsty and desperate for jobs. He limped all his life, because he there was no medical treatment available when he broke his leg. Now look at us!"
For Emiratis, this is a Santa Claus state, handing out goodies while it makes its money elsewhere: through renting out land to foreigners, soft taxes on them like business and airport charges, and the remaining dribble of oil. Most Emiratis, like Ahmed, work for the government, so they're cushioned from the credit crunch. "I haven't felt any effect at all, and nor have my friends," he says. "Your employment is secure. You will only be fired if you do something incredibly bad." The laws are currently being tightened, to make it even more impossible to sack an Emirati.
Sure, the flooding-in of expats can sometimes be "an eyesore", Ahmed says. "But we see the expats as the price we had to pay for this development. How else could we do it? Nobody wants to go back to the days of the desert, the days before everyone came. We went from being like an African country to having an average income per head of $120,000 a year. And we're supposed to complain?"
He says the lack of political freedom is fine by him. "You'll find it very hard to find an Emirati who doesn't support Sheikh Mohammed." Because they're scared? "No, because we really all support him. He's a great leader. Just look!" He smiles and says: "I'm sure my life is very much like yours. We hang out, have a coffee, go to the movies. You'll be in a Pizza Hut or Nando's in London, and at the same time I'll be in one in Dubai," he says, ordering another latte.
But do all young Emiratis see it this way? Can it really be so sunny in the political sands? In the sleek Emirates Tower Hotel, I meet Sultan al-Qassemi. He's a 31-year-old Emirati columnist for the Dubai press and private art collector, with a reputation for being a contrarian liberal, advocating gradual reform. He is wearing Western clothes – blue jeans and a Ralph Lauren shirt – and speaks incredibly fast, turning himself into a manic whirr of arguments.
"People here are turning into lazy, overweight babies!" he exclaims. "The nanny state has gone too far. We don't do anything for ourselves! Why don't any of us work for the private sector? Why can't a mother and father look after their own child?" And yet, when I try to bring up the system of slavery that built Dubai, he looks angry. "People should give us credit," he insists. "We are the most tolerant people in the world. Dubai is the only truly international city in the world. Everyone who comes here is treated with respect."
I pause, and think of the vast camps in Sonapur, just a few miles away. Does he even know they exist? He looks irritated. "You know, if there are 30 or 40 cases [of worker abuse] a year, that sounds like a lot but when you think about how many people are here..." Thirty or 40? This abuse is endemic to the system, I say. We're talking about hundreds of thousands.
Sultan is furious. He splutters: "You don't think Mexicans are treated badly in New York City? And how long did it take Britain to treat people well? I could come to London and write about the homeless people on Oxford Street and make your city sound like a terrible place, too! The workers here can leave any time they want! Any Indian can leave, any Asian can leave!"
But they can't, I point out. Their passports are taken away, and their wages are withheld. "Well, I feel bad if that happens, and anybody who does that should be punished. But their embassies should help them." They try. But why do you forbid the workers – with force – from going on strike against lousy employers? "Thank God we don't allow that!" he exclaims. "Strikes are in-convenient! They go on the street – we're not having that. We won't be like France. Imagine a country where they the workers can just stop whenever they want!" So what should the workers do when they are cheated and lied to? "Quit. Leave the country."
I sigh. Sultan is seething now. "People in the West are always complaining about us," he says. Suddenly, he adopts a mock-whiny voice and says, in imitation of these disgusting critics: "Why don't you treat animals better? Why don't you have better shampoo advertising? Why don't you treat labourers better?" It's a revealing order: animals, shampoo, then workers. He becomes more heated, shifting in his seat, jabbing his finger at me. "I gave workers who worked for me safety goggles and special boots, and they didn't want to wear them! It slows them down!"
And then he smiles, coming up with what he sees as his killer argument. "When I see Western journalists criticise us – don't you realise you're shooting yourself in the foot? The Middle East will be far more dangerous if Dubai fails. Our export isn't oil, it's hope. Poor Egyptians or Libyans or Iranians grow up saying – I want to go to Dubai. We're very important to the region. We are showing how to be a modern Muslim country. We don't have any fundamentalists here. Europeans shouldn't gloat at our demise. You should be very worried.... Do you know what will happen if this model fails? Dubai will go down the Iranian path, the Islamist path."
Sultan sits back. My arguments have clearly disturbed him; he says in a softer, conciliatory tone, almost pleading: "Listen. My mother used to go to the well and get a bucket of water every morning. On her wedding day, she was given an orange as a gift because she had never eaten one. Two of my brothers died when they were babies because the healthcare system hadn't developed yet. Don't judge us." He says it again, his eyes filled with intensity: "Don't judge us."
V. The Dunkin' Donuts Dissidents
But there is another face to the Emirati minority – a small huddle of dissidents, trying to shake the Sheikhs out of abusive laws. Next to a Virgin Megastore and a Dunkin' Donuts, with James Blunt's "You're Beautiful" blaring behind me, I meet the Dubai dictatorship's Public Enemy Number One. By way of introduction, Mohammed al-Mansoori says from within his white robes and sinewy face: "Westerners come her and see the malls and the tall buildings and they think that means we are free. But these businesses, these buildings – who are they for? This is a dictatorship. The royal family think they own the country, and the people are their servants. There is no freedom here."
We snuffle out the only Arabic restaurant in this mall, and he says everything you are banned – under threat of prison – from saying in Dubai. Mohammed tells me he was born in Dubai to a fisherman father who taught him one enduring lesson: Never follow the herd. Think for yourself. In the sudden surge of development, Mohammed trained as a lawyer. By the Noughties, he had climbed to the head of the Jurists' Association, an organisation set up to press for Dubai's laws to be consistent with international human rights legislation.
And then – suddenly – Mohammed thwacked into the limits of Sheikh Mohammed's tolerance. Horrified by the "system of slavery" his country was being built on, he spoke out to Human Rights Watch and the BBC. "So I was hauled in by the secret police and told: shut up, or you will lose you job, and your children will be unemployable," he says. "But how could I be silent?"
He was stripped of his lawyer's licence and his passport – becoming yet another person imprisoned in this country. "I have been blacklisted and so have my children. The newspapers are not allowed to write about me."
Why is the state so keen to defend this system of slavery? He offers a prosaic explanation. "Most companies are owned by the government, so they oppose human rights laws because it will reduce their profit margins. It's in their interests that the workers are slaves."
Last time there was a depression, there was a starbust of democracy in Dubai, seized by force from the sheikhs. In the 1930s, the city's merchants banded together against Sheikh Said bin Maktum al-Maktum – the absolute ruler of his day – and insisted they be given control over the state finances. It lasted only a few years, before the Sheikh – with the enthusiastic support of the British – snuffed them out.
And today? Sheikh Mohammed turned Dubai into Creditopolis, a city built entirely on debt. Dubai owes 107 percent of its entire GDP. It would be bust already, if the neighbouring oil-soaked state of Abu Dhabi hadn't pulled out its chequebook. Mohammed says this will constrict freedom even further. "Now Abu Dhabi calls the tunes – and they are much more conservative and restrictive than even Dubai. Freedom here will diminish every day." Already, new media laws have been drafted forbidding the press to report on anything that could "damage" Dubai or "its economy". Is this why the newspapers are giving away glossy supplements talking about "encouraging economic indicators"?
Everybody here waves Islamism as the threat somewhere over the horizon, sure to swell if their advice is not followed. Today, every imam is appointed by the government, and every sermon is tightly controlled to keep it moderate. But Mohammed says anxiously: "We don't have Islamism here now, but I think that if you control people and give them no way to express anger, it could rise. People who are told to shut up all the time can just explode."
Later that day, against another identikit-corporate backdrop, I meet another dissident – Abdulkhaleq Abdullah, Professor of Political Science at Emirates University. His anger focuses not on political reform, but the erosion of Emirati identity. He is famous among the locals, a rare outspoken conductor for their anger. He says somberly: "There has been a rupture here. This is a totally different city to the one I was born in 50 years ago."
He looks around at the shiny floors and Western tourists and says: "What we see now didn't occur in our wildest dreams. We never thought we could be such a success, a trendsetter, a model for other Arab countries. The people of Dubai are mighty proud of their city, and rightly so. And yet..." He shakes his head. "In our hearts, we fear we have built a modern city but we are losing it to all these expats."
Adbulkhaleq says every Emirati of his generation lives with a "psychological trauma." Their hearts are divided – "between pride on one side, and fear on the other." Just after he says this, a smiling waitress approaches, and asks us what we would like to drink. He orders a Coke.
VI. Dubai Pride
There is one group in Dubai for whom the rhetoric of sudden freedom and liberation rings true – but it is the very group the government wanted to liberate least: gays.
Beneath a famous international hotel, I clamber down into possibly the only gay club on the Saudi Arabian peninsula. I find a United Nations of tank-tops and bulging biceps, dancing to Kylie, dropping ecstasy, and partying like it's Soho. "Dubai is the best place in the Muslim world for gays!" a 25-year old Emirati with spiked hair says, his arms wrapped around his 31-year old "husband". "We are alive. We can meet. That is more than most Arab gays."
It is illegal to be gay in Dubai, and punishable by 10 years in prison. But the locations of the latest unofficial gay clubs circulate online, and men flock there, seemingly unafraid of the police. "They might bust the club, but they will just disperse us," one of them says. "The police have other things to do."
In every large city, gay people find a way to find each other – but Dubai has become the clearing-house for the region's homosexuals, a place where they can live in relative safety. Saleh, a lean private in the Saudi Arabian army, has come here for the Coldplay concert, and tells me Dubai is "great" for gays: "In Saudi, it's hard to be straight when you're young. The women are shut away so everyone has gay sex. But they only want to have sex with boys – 15- to 21-year-olds. I'm 27, so I'm too old now. I need to find real gays, so this is the best place. All Arab gays want to live in Dubai."
With that, Saleh dances off across the dancefloor, towards a Dutch guy with big biceps and a big smile.
VII. The Lifestyle
All the guidebooks call Dubai a "melting pot", but as I trawl across the city, I find that every group here huddles together in its own little ethnic enclave – and becomes a caricature of itself. One night – in the heart of this homesick city, tired of the malls and the camps – I go to Double Decker, a hang-out for British expats. At the entrance there is a red telephone box, and London bus-stop signs. Its wooden interior looks like a cross between a colonial clubhouse in the Raj and an Eighties school disco, with blinking coloured lights and cheese blaring out. As I enter, a girl in a short skirt collapses out of the door onto her back. A guy wearing a pirate hat helps her to her feet, dropping his beer bottle with a paralytic laugh.
I start to talk to two sun-dried women in their sixties who have been getting gently sozzled since midday. "You stay here for The Lifestyle," they say, telling me to take a seat and order some more drinks. All the expats talk about The Lifestyle, but when you ask what it is, they become vague. Ann Wark tries to summarise it: "Here, you go out every night. You'd never do that back home. You see people all the time. It's great. You have lots of free time. You have maids and staff so you don't have to do all that stuff. You party!"
They have been in Dubai for 20 years, and they are happy to explain how the city works. "You've got a hierarchy, haven't you?" Ann says. "It's the Emiratis at the top, then I'd say the British and other Westerners. Then I suppose it's the Filipinos, because they've got a bit more brains than the Indians. Then at the bottom you've got the Indians and all them lot."
They admit, however, they have "never" spoken to an Emirati. Never? "No. They keep themselves to themselves." Yet Dubai has disappointed them. Jules Taylor tells me: "If you have an accident here it's a nightmare. There was a British woman we knew who ran over an Indian guy, and she was locked up for four days! If you have a tiny bit of alcohol on your breath they're all over you. These Indians throw themselves in front of cars, because then their family has to be given blood money – you know, compensation. But the police just blame us. That poor woman."
A 24-year-old British woman called Hannah Gamble takes a break from the dancefloor to talk to me. "I love the sun and the beach! It's great out here!" she says. Is there anything bad? "Oh yes!" she says. Ah: one of them has noticed, I think with relief. "The banks! When you want to make a transfer you have to fax them. You can't do it online." Anything else? She thinks hard. "The traffic's not very good."
When I ask the British expats how they feel to not be in a democracy, their reaction is always the same. First, they look bemused. Then they look affronted. "It's the Arab way!" an Essex boy shouts at me in response, as he tries to put a pair of comedy antlers on his head while pouring some beer into the mouth of his friend, who is lying on his back on the floor, gurning.
Later, in a hotel bar, I start chatting to a dyspeptic expat American who works in the cosmetics industry and is desperate to get away from these people. She says: "All the people who couldn't succeed in their own countries end up here, and suddenly they're rich and promoted way above their abilities and bragging about how great they are. I've never met so many incompetent people in such senior positions anywhere in the world." She adds: "It's absolutely racist. I had Filipino girls working for me doing the same job as a European girl, and she's paid a quarter of the wages. The people who do the real work are paid next to nothing, while these incompetent managers pay themselves £40,000 a month."
With the exception of her, one theme unites every expat I speak to: their joy at having staff to do the work that would clog their lives up Back Home. Everyone, it seems, has a maid. The maids used to be predominantly Filipino, but with the recession, Filipinos have been judged to be too expensive, so a nice Ethiopian servant girl is the latest fashionable accessory.
It is an open secret that once you hire a maid, you have absolute power over her. You take her passport – everyone does; you decide when to pay her, and when – if ever – she can take a break; and you decide who she talks to. She speaks no Arabic. She cannot escape.
In a Burger King, a Filipino girl tells me it is "terrifying" for her to wander the malls in Dubai because Filipino maids or nannies always sneak away from the family they are with and beg her for help. "They say – 'Please, I am being held prisoner, they don't let me call home, they make me work every waking hour seven days a week.' At first I would say – my God, I will tell the consulate, where are you staying? But they never know their address, and the consulate isn't interested. I avoid them now. I keep thinking about a woman who told me she hadn't eaten any fruit in four years. They think I have power because I can walk around on my own, but I'm powerless."
The only hostel for women in Dubai – a filthy private villa on the brink of being repossessed – is filled with escaped maids. Mela Matari, a 25-year-old Ethiopian woman with a drooping smile, tells me what happened to her – and thousands like her. She was promised a paradise in the sands by an agency, so she left her four year-old daughter at home and headed here to earn money for a better future. "But they paid me half what they promised. I was put with an Australian family – four children – and Madam made me work from 6am to 1am every day, with no day off. I was exhausted and pleaded for a break, but they just shouted: 'You came here to work, not sleep!' Then one day I just couldn't go on, and Madam beat me. She beat me with her fists and kicked me. My ear still hurts. They wouldn't give me my wages: they said they'd pay me at the end of the two years. What could I do? I didn't know anybody here. I was terrified."
One day, after yet another beating, Mela ran out onto the streets, and asked – in broken English – how to find the Ethiopian consulate. After walking for two days, she found it, but they told her she had to get her passport back from Madam. "Well, how could I?" she asks. She has been in this hostel for six months. She has spoken to her daughter twice. "I lost my country, I lost my daughter, I lost everything," she says.
As she says this, I remember a stray sentence I heard back at Double Decker. I asked a British woman called Hermione Frayling what the best thing about Dubai was. "Oh, the servant class!" she trilled. "You do nothing. They'll do anything!"
VIII. The End of The World
The World is empty. It has been abandoned, its continents unfinished. Through binoculars, I think I can glimpse Britain; this sceptred isle barren in the salt-breeze.
Here, off the coast of Dubai, developers have been rebuilding the world. They have constructed artificial islands in the shape of all planet Earth's land masses, and they plan to sell each continent off to be built on. There were rumours that the Beckhams would bid for Britain. But the people who work at the nearby coast say they haven't seen anybody there for months now. "The World is over," a South African suggests.
All over Dubai, crazy projects that were Under Construction are now Under Collapse. They were building an air-conditioned beach here, with cooling pipes running below the sand, so the super-rich didn't singe their toes on their way from towel to sea.
The projects completed just before the global economy crashed look empty and tattered. The Atlantis Hotel was launched last winter in a $20m fin-de-siecle party attended by Robert De Niro, Lindsay Lohan and Lily Allen. Sitting on its own fake island – shaped, of course, like a palm tree – it looks like an immense upturned tooth in a faintly decaying mouth. It is pink and turreted – the architecture of the pharaohs, as reimagined by Zsa-Zsa Gabor. Its Grand Lobby is a monumental dome covered in glitterballs, held up by eight monumental concrete palm trees. Standing in the middle, there is a giant shining glass structure that looks like the intestines of every guest who has ever stayed at the Atlantis. It is unexpectedly raining; water is leaking from the roof, and tiles are falling off.
A South African PR girl shows me around its most coveted rooms, explaining that this is "the greatest luxury offered in the world". We stroll past shops selling £24m diamond rings around a hotel themed on the lost and sunken continent of, yes, Atlantis. There are huge water tanks filled with sharks, which poke around mock-abandoned castles and dumped submarines. There are more than 1,500 rooms here, each with a sea view. The Neptune suite has three floors, and – I gasp as I see it – it looks out directly on to the vast shark tank. You lie on the bed, and the sharks stare in at you. In Dubai, you can sleep with the fishes, and survive.
But even the luxury – reminiscent of a Bond villain's lair – is also being abandoned. I check myself in for a few nights to the classiest hotel in town, the Park Hyatt. It is the fashionistas' favourite hotel, where Elle Macpherson and Tommy Hilfiger stay, a gorgeous, understated palace. It feels empty. Whenever I eat, I am one of the only people in the restaurant. A staff member tells me in a whisper: "It used to be full here. Now there's hardly anyone." Rattling around, I feel like Jack Nicholson in The Shining, the last man in an abandoned, haunted home.
The most famous hotel in Dubai – the proud icon of the city – is the Burj al Arab hotel, sitting on the shore, shaped like a giant glass sailing boat. In the lobby, I start chatting to a couple from London who work in the City. They have been coming to Dubai for 10 years now, and they say they love it. "You never know what you'll find here," he says. "On our last trip, at the beginning of the holiday, our window looked out on the sea. By the end, they'd built an entire island there."
My patience frayed by all this excess, I find myself snapping: doesn't the omnipresent slave class bother you? I hope they misunderstood me, because the woman replied: "That's what we come for! It's great, you can't do anything for yourself!" Her husband chimes in: "When you go to the toilet, they open the door, they turn on the tap – the only thing they don't do is take it out for you when you have a piss!" And they both fall about laughing.
IX. Taking on the Desert
Dubai is not just a city living beyond its financial means; it is living beyond its ecological means. You stand on a manicured Dubai lawn and watch the sprinklers spray water all around you. You see tourists flocking to swim with dolphins. You wander into a mountain-sized freezer where they have built a ski slope with real snow. And a voice at the back of your head squeaks: this is the desert. This is the most water-stressed place on the planet. How can this be happening? How is it possible?
The very earth is trying to repel Dubai, to dry it up and blow it away. The new Tiger Woods Gold Course needs four million gallons of water to be pumped on to its grounds every day, or it would simply shrivel and disappear on the winds. The city is regularly washed over with dust-storms that fog up the skies and turn the skyline into a blur. When the dust parts, heat burns through. It cooks anything that is not kept constantly, artificially wet.
Dr Mohammed Raouf, the environmental director of the Gulf Research Centre, sounds sombre as he sits in his Dubai office and warns: "This is a desert area, and we are trying to defy its environment. It is very unwise. If you take on the desert, you will lose."
Sheikh Maktoum built his showcase city in a place with no useable water. None. There is no surface water, very little acquifer, and among the lowest rainfall in the world. So Dubai drinks the sea. The Emirates' water is stripped of salt in vast desalination plants around the Gulf – making it the most expensive water on earth. It costs more than petrol to produce, and belches vast amounts of carbon dioxide into the atmosphere as it goes. It's the main reason why a resident of Dubai has the biggest average carbon footprint of any human being – more than double that of an American.
If a recession turns into depression, Dr Raouf believes Dubai could run out of water. "At the moment, we have financial reserves that cover bringing so much water to the middle of the desert. But if we had lower revenues – if, say, the world shifts to a source of energy other than oil..." he shakes his head. "We will have a very big problem. Water is the main source of life. It would be a catastrophe. Dubai only has enough water to last us a week. There's almost no storage. We don't know what will happen if our supplies falter. It would be hard to survive."
Global warming, he adds, makes the problem even worse. "We are building all these artificial islands, but if the sea level rises, they will be gone, and we will lose a lot. Developers keep saying it's all fine, they've taken it into consideration, but I'm not so sure."
Is the Dubai government concerned about any of this? "There isn't much interest in these problems," he says sadly. But just to stand still, the average resident of Dubai needs three times more water than the average human. In the looming century of water stresses and a transition away from fossil fuels, Dubai is uniquely vulnerable.
I wanted to understand how the government of Dubai will react, so I decided to look at how it has dealt with an environmental problem that already exists – the pollution of its beaches. One woman – an American, working at one of the big hotels – had written in a lot of online forums arguing that it was bad and getting worse, so I called her to arrange a meeting. "I can't talk to you," she said sternly. Not even if it's off the record? "I can't talk to you." But I don't have to disclose your name... "You're not listening. This phone is bugged. I can't talk to you," she snapped, and hung up.
The next day I turned up at her office. "If you reveal my identity, I'll be sent on the first plane out of this city," she said, before beginning to nervously pace the shore with me. "It started like this. We began to get complaints from people using the beach. The water looked and smelled odd, and they were starting to get sick after going into it. So I wrote to the ministers of health and tourism and expected to hear back immediately – but there was nothing. Silence. I hand-delivered the letters. Still nothing."
The water quality got worse and worse. The guests started to spot raw sewage, condoms, and used sanitary towels floating in the sea. So the hotel ordered its own water analyses from a professional company. "They told us it was full of fecal matter and bacteria 'too numerous to count'. I had to start telling guests not to go in the water, and since they'd come on a beach holiday, as you can imagine, they were pretty pissed off." She began to make angry posts on the expat discussion forums – and people began to figure out what was happening. Dubai had expanded so fast its sewage treatment facilities couldn't keep up. The sewage disposal trucks had to queue for three or four days at the treatment plants – so instead, they were simply drilling open the manholes and dumping the untreated sewage down them, so it flowed straight to the sea.
Suddenly, it was an open secret – and the municipal authorities finally acknowledged the problem. They said they would fine the truckers. But the water quality didn't improve: it became black and stank. "It's got chemicals in it. I don't know what they are. But this stuff is toxic."
She continued to complain – and started to receive anonymous phone calls. "Stop embarassing Dubai, or your visa will be cancelled and you're out," they said. She says: "The expats are terrified to talk about anything. One critical comment in the newspapers and they deport you. So what am I supposed to do? Now the water is worse than ever. People are getting really sick. Eye infections, ear infections, stomach infections, rashes. Look at it!" There is faeces floating on the beach, in the shadow of one of Dubai's most famous hotels.
"What I learnt about Dubai is that the authorities don't give a toss about the environment," she says, standing in the stench. "They're pumping toxins into the sea, their main tourist attraction, for God's sake. If there are environmental problems in the future, I can tell you now how they will deal with them – deny it's happening, cover it up, and carry on until it's a total disaster." As she speaks, a dust-storm blows around us, as the desert tries, slowly, insistently, to take back its land.
X. Fake Plastic Trees
On my final night in the Dubai Disneyland, I stop off on my way to the airport, at a Pizza Hut that sits at the side of one of the city's endless, wide, gaping roads. It is identical to the one near my apartment in London in every respect, even the vomit-coloured decor. My mind is whirring and distracted. Perhaps Dubai disturbed me so much, I am thinking, because here, the entire global supply chain is condensed. Many of my goods are made by semi-enslaved populations desperate for a chance 2,000 miles away; is the only difference that here, they are merely two miles away, and you sometimes get to glimpse their faces? Dubai is Market Fundamentalist Globalisation in One City.
I ask the Filipino girl behind the counter if she likes it here. "It's OK," she says cautiously. Really? I say. I can't stand it. She sighs with relief and says: "This is the most terrible place! I hate it! I was here for months before I realised – everything in Dubai is fake. Everything you see. The trees are fake, the workers' contracts are fake, the islands are fake, the smiles are fake – even the water is fake!" But she is trapped, she says. She got into debt to come here, and she is stuck for three years: an old story now. "I think Dubai is like an oasis. It is an illusion, not real. You think you have seen water in the distance, but you get close and you only get a mouthful of sand."
As she says this, another customer enters. She forces her face into the broad, empty Dubai smile and says: "And how may I help you tonight, sir?"
Some names in this article have been changed.
http://www.independent.co.uk/opinion/commentators/johann-hari/the-dark-side-of-dubai-1664368.htmlUS EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Subscribe to:
Posts (Atom)
