Monday, May 19, 2008

The Sorry State of UAE Real Estate

by Sheikh Sultan bin Saud Al Qasimi
Chairman, Barjeel Geogit Securities and Cll

One has to wonder about the lack of government supervision that allows firms to issue press releases that are clearly stretching the truth, break promises that begin with delivering real estate projects late or never and jeopardize the reputation of the UAE buy mistreating foreign labour.

It seems like not a single day passes without yet another extravagant announcement about a new real estate project that defies gravity, the laws of nature and the laws of finance.
One has to wonder about the lack of government supervision that allows firms to issue press releases that are clearly stretching the truth, break promises that begin with delivering real estate projects late or never and jeopardize the reputation of the UAE buy mistreating foreign labour.

Take the case of a local development company in the UAE that is owned by GCC shareholders. This firm claims to have AED300 Billion under development, which roughly accounts for 75 percent of the GDP of Abu Dhabi. The firm has announced a project "in excess of US$20 billion" in a country that has a GDP of US$36 Billion. Does that make sense to anyone else? It clearly escapes my understanding. How can the government allow such press releases, and how does the local press publish them without verification? To put things into perspective, this case is similar to someone claiming to have a project "in excess of US$ 7 trillion" in the US (roughly 55 per cent of the GDP).

Another local company, which is one of the few home-grown brands to go regional, claims to have a portfolio "in excess of US$40 Billion." This is clearly an example of a company that bit off more than it could chew. A local news report found that out of the 15 advertised projects in Dubai that the company was developing, all were running, "substantially behind their projected completion schedules" to the extent that investors were threatening to withhold future payments to the developer. Oddly enough, one of the few publicized cases of real estate developers fleeing the country after selling off planned projects to unsuspecting investors to the tune of AED14 million has yet to be resolved.

Another issue plaguing the real estate sector is the copycat culture that is about to make our beautiful city of Dubai into a sameville mini-me of other cities around the world. For example, more than one project currently promises to replicate the Eiffel Tower in Paris; moreover, as if copying individual landmarks was not enough, one project even threatens to replicate the entire city of Lyon in Dubai. A contender for the most profuse project award has to be the Falcon City of Wonders that has pledged to reproduce. "the Pyramids, Eiffel Tower, Taj Mahal, Great Wall of China and the Leaning Tower of Pisa". Tatweer also has its own replication process going on within the Bawadi project.
Don't people understand that, what has made Dubai great is the spirit of entrepreneurial originality? Shall we wait for a project that promises to replicate the entire city of Abu Dhabi in Dubai or maybe the Holy Shrine of Mecca?
Labour Pains
A different case of construction workers woes emerged in the autumn of 2007, when 40,000 employees of Arabtech went on strike over low wages that, according to the official UAE news agency, "turned into riots", with stones being thrown at police. This situation could have been dangerous for the entire country if you consider that the size of the Dubai police force is around 15,000 personnel (they were outnumbered three to one).
The management of Arabtech must be proud now that it has reported a 115 per cent increase in profits to US$ 93 million in the 2007, despite serious damage to the UAE's reputation and social security.
Basically, because the company didn't meet the labourers demands for an AED90 Million increase per year (a sizeable 25 per cent of its profit), the UAE was unfavorably featured on the front pages of various newspapers, websites and TV stations around the world as a country that does not treat its "guest workers" fairly. Was that decision worth the damage?
Other Emirates
Sharjah's real estate development is the least planned in the UAE, with problems relating to parking, electricity cuts, water stoppages and general frustration about the sorry state of roads. Despite a daily headline in the local press, all seem to be well on course to staying exactly the same. Abu Dhabi should pay attention to the plight of its sister emirates before launching gigantic projects in the relatively calm capital island that will result in traffic chaos similar to what Dubai is experiencing today.
How do we even account for such a collective failure of engineering and planning? Clearly the UAE authorities were not prepared for such a fast pace of development. For a country that proudly claims to have US$500 billion worth of real estate projects under development, it is high time for the federal government to enact serious nationwide laws and regulations that will set this industry straight.
Courtesy: MONEY works magazine March 2008

Malaysiakini : Children without childhood

(This article is from Malaysiakini)

Stan Yee May 12, 08 11:14am
If we can turn our attention away from politics for a moment, there is a lot for us to worry about elsewhere. The state of our education, for instance.
Our exam-oriented system is cause for grave concern because the whole nation is fixated on a concept of ‘academic excellence’ as defined by exam results.
Scholastic performance is no longer a function of what the school can produce, but rather largely a result of performance-enhancing private tuition.
What is intended to benchmark our educational standard relative to comparable countries abroad, and a means of gauging our teachers’ level of competence, the public exams have now become annual inter-school high-jump contests in which doing well is not good enough. The quest is for the highest number of ‘A’ passes.
To achieve the optimum performance many students go to private tuition classes that cumulatively add up almost as much time as the hours they spend in school every day. On their part some schools pick and choose students to make sure that the weak ones will not spoil their percentages. The old idea about going to school to learn to be a well-rounded person seems to have been thrown out the window.
Each time our public exams turn out brilliant results, the crossbar of the standard of excellence is moved yet another notch higher, never mind that these results have been induced by the tuition steroids that have been pumped into children.
Some kids attend one tuition class after another, after school every day. As if that is not bad enough, now their time is going to be even more constricted by the new national programme known as the Integrated Timetable for Secondary Schools in which selected schools operate from 7am to 3pm to integrate the normal curriculum with co-curriculum periods.
If I understand the situation correctly the proposed timetable is still at its pilot stage to test the system and the reaction of the school community throughout the country. As such the programme will only serve its trial purpose if the local directors of education understand its trial nature and provide honest feedback to the education ministry - and not a glowing report unrelated to the situation just to please the bosses in KL who conceived the idea.
At first glance, two days a week for such an integrated school schedule should suffice. Anything more will overburden both students and teachers. We should not emulate Japan whose schools finish at 3pm. They have all manner of facilities and extra-curricular programmes to engage a wide range of interests among the students. Even so the rat-race there has driven many a young person to desperation.
We do not want that to happen here. Already, we have seen an increasing number of suicides in this country. Just recently one child jumped off the 5th floor of his school building in Kota Kinabalu, which partly prompted this article. Many fear that if the new schedule is accepted it will intensify an already suffocating daily regime for children, and will lead to even more stress and strain and a worsening mental health situation. There is a real fear that, for some, this may well be the last straw.

Missing dimensions

Apropos the exams, one wonders what good it will do to our education system when the authorities read more than they should into exam results that have been artificially enhanced by factors that have little to do with what our schools are capable of producing.
The intensifying pressure on the school population exacts a heavy price and begs many questions. Is getting a good number of ‘As’ so important that we can disregard everything else that children enjoy doing, like being with friends, playing sports, spending time with the family or just ‘stand and stare’ and be children?
Will the exam results that benchmark our educational standard serve the purpose to the extent they are touted to represent? And what glory can our schools honestly derive from the high percentages that students achieve when they know that without tuition the results may have been very different?
What price do children have to pay to satisfy this standard of excellence to which their schools do not measure up, and when students have to forfeit their short, priceless childhood to boost the glory of the school and perhaps their parents’ ego?
How many hours can we expect children to work in a day and how many days a week?
We bemoan the fact that our young people do not read. How can they when they get stuck all day with those boring textbooks that they lug around in their school bags? How can they not be sick to death of books?
What about character and personality development? Character does not grow out of a massive dose of maths or science or BM or English or loads of textbooks or even religious or moral instruction classes. If anything these can even stifle character development.
There is something quite ridiculous about the way moral instruction is made an examination subject. Kids swot up the moral values presented in a cut and dried fashion to pass the tests. They do not necessarily live up to the values or even believe in these. They swot up on whatever they think the examiner wants.
Few think things through for themselves and relate these to real-life situations where right or wrong does not always present itself in black and white clarity. They memorise words but do not necessarily internalise skills and values.
Children learn to relate to the world from social interaction with other children, from lessons learned in normal conflicts and perhaps a fight or two, from adults around them, from literature and good movies, from sports and some of the foolish things that adults look back on and laugh about. Anything short of this may turn children into insipid introverts with very little imagination, personal initiative or drive and ability to work independently.
While some children do need tuition to help them catch up on weak subjects, it should not be a substitute for the normal learning at school. They should receive their staple diet of education at school. Tuition is just a supplement to make up for the shortfall at school.
Unfortunately as the demand for tuition increases, so will the likelihood of some teachers’ ethical standard and professionalism going the other way.
But, all said, the main culprit is our over-emphasis on using exam results as the yardstick for our schools’ scholastic worth. Periodically we should re-calibrate the benchmark to accord with what the system can produce unaided by extraneous factors.
As matters stand, the present one-size-fits-all approach is woefully out of sync with the realities on the ground. It gives the education ministry a bloated idea of the country’s educational standard.

STAN YEE is a retired government officer in Kota Kinabalu.