Original on: http://newsweek.washingtonpost.com/postglobal/anwer_sher/2007/12/worst_is_yet_to_come_for_pakis.html
The Question: After Benazir Bhutto's assassination on Thursday, what's next for Pakistan?
Benazir Bhutto's assassination is not only a terrible loss to the political process and the nation of Pakistan - it also shows how fragile the country is to the acts of militants. Her tragic death must be viewed in the context of Pakistan's political and security situation: this is clearly a sign of worse things to come.
First and foremost, it is highly unlikely that the elections will be held as scheduled on January 8, 2008. That might the rallying point for both Benazir's Peoples Party (under the leadership of Amin Fahim) and Nawaz Sharif's Muslim League to seek sweeping changes and a return to the rule of law. This is a huge blow to the U.S., as it backed her and General Musharraf and now will be hard-pressed to handle the political process in Pakistan.
Clearly Benazir Bhutto's killing shows the telltale signs of an al-Qaeda style attack. It sends two messages: one to the Pakistani politicians that they should soften their tone against terrorism, and another to the Americans that their political support will be hacked down from the top. This is a huge embarrassment for General Musharraf, because all his claims of victory against terrorism have come to naught. If nothing else, now that he is out of uniform one cannot rule out the Army seeking to remove him, either through constitutional means or otherwise.
There are already reports of violence in the interior of Sindh, where Benazir was very popular, and it would seem that the situation may get out of hand: people will take to the streets, blaming Musharraf for the failure to ensure security in the country. On balance, I would predict that with elections postponed it is highly possible that conspiracy theories will emerge that will weaken President Musharraf and amplify calls for his removal. In the light of civil strife, it would seem that a major change is more likely than ever.
I knew Benazir personally, and the few times we met and discussed politics, although we may have disagreed on issues, I never had a doubt that she was one of the most astute political figures in the country. Her opponent Nawaz Sharif now carries the responsibility of bringing reason into the country and may even suggest a joint government for national reconstruction.
Sunday, December 30, 2007
Saturday, December 22, 2007
The Kite Runner
‘Kite Runner’ Threats Reveal Afghanistan’s Hypocrisy
(this is my post to Postglobal Washington Posts online blog where I am a panelist)
http://newsweek.washingtonpost.com/postglobal/anwer_sher/2007/12/kite_runner_threats_reveal_afg.html
and the main page is on http://newsweek.washingtonpost.com/postglobal/
The Question: The producers of the movie "The Kite Runner" had to evacuate three boy actors from Afghanistan because they were involved in a scene portraying homosexual rape. Who's at fault here: the movie producers who exposed the boys to danger, or the Afghan culture that threatens them?
I am a Pathan from the tribal areas of Pakistan, so perhaps this question poses difficult issues. From a modern perspective there is no doubt that the lack of tolerance, especially on artistic expressions, has been a matter of concern for people like me. I question whether the Afghans who have threatened the actors are suggesting that homosexuality doesn't happen in Afghanistan, or whether they are suggesting that exposing its existence is a crime. The reality is that homosexuality has been prevalent in Afghan culture for centuries, and proliferated especially during the Taliban years when contact between women and men was very difficult. In The Kite Runner, the homosexual rape is the contentious issue especially because a boy who later grows up to be a Taliban official commits it. The portrayal highlights the fact that often in Afghan society during times of war, captured enemy men were sodomized. As British officers from the Afghan wars would say: ‘Better to put a bullet through your own head then be taken prisoner.’
Clearly the reaction towards the actors is not acceptable, but we have to understand that such a reaction was pretty much expected, even though the film was made outside Afghanistan. There are a number of taboo issues for these societies; homosexuality is clearly one of them, even though a famous Pashtu poet wrote elaborate poems praising boys over men. This is indeed the hypocritical side of society, and in times such as this they will take the religious view that homosexuality is a sin – just like the Catholics and conservative Christians would react to the idea of same-sex marriages. The difference, and a fundamental one, is that here it is not the homosexuals who are being threatened, but the actors who portrayed the characters. This is where the lack of tolerance shows up.
On the other hand, the filmmakers have much to answer for: from reportedly paying the key actors only $18,000 (the going rate for a small side role in a regular Paramount movie, perhaps), to not anticipating that the response from within Afghan would threaten the safety of the actors. One of the actors, Zekaria Ibrahmi, (who plays Amir as a child) had expressed his desire to study and live in the U.S. Perhaps that wish should have been built into the contract, to ensure the actors were safe.
The sad part is that as a modern thinking Pathan, I can see both sides of the equation. While I vehemently disagree with fundamentalism and intolerance, I also understand that this reaction should have been expected – and the filmmakers should have had a contingency plan.
(this is my post to Postglobal Washington Posts online blog where I am a panelist)
http://newsweek.washingtonpost.com/postglobal/anwer_sher/2007/12/kite_runner_threats_reveal_afg.html
and the main page is on http://newsweek.washingtonpost.com/postglobal/
The Question: The producers of the movie "The Kite Runner" had to evacuate three boy actors from Afghanistan because they were involved in a scene portraying homosexual rape. Who's at fault here: the movie producers who exposed the boys to danger, or the Afghan culture that threatens them?
I am a Pathan from the tribal areas of Pakistan, so perhaps this question poses difficult issues. From a modern perspective there is no doubt that the lack of tolerance, especially on artistic expressions, has been a matter of concern for people like me. I question whether the Afghans who have threatened the actors are suggesting that homosexuality doesn't happen in Afghanistan, or whether they are suggesting that exposing its existence is a crime. The reality is that homosexuality has been prevalent in Afghan culture for centuries, and proliferated especially during the Taliban years when contact between women and men was very difficult. In The Kite Runner, the homosexual rape is the contentious issue especially because a boy who later grows up to be a Taliban official commits it. The portrayal highlights the fact that often in Afghan society during times of war, captured enemy men were sodomized. As British officers from the Afghan wars would say: ‘Better to put a bullet through your own head then be taken prisoner.’
Clearly the reaction towards the actors is not acceptable, but we have to understand that such a reaction was pretty much expected, even though the film was made outside Afghanistan. There are a number of taboo issues for these societies; homosexuality is clearly one of them, even though a famous Pashtu poet wrote elaborate poems praising boys over men. This is indeed the hypocritical side of society, and in times such as this they will take the religious view that homosexuality is a sin – just like the Catholics and conservative Christians would react to the idea of same-sex marriages. The difference, and a fundamental one, is that here it is not the homosexuals who are being threatened, but the actors who portrayed the characters. This is where the lack of tolerance shows up.
On the other hand, the filmmakers have much to answer for: from reportedly paying the key actors only $18,000 (the going rate for a small side role in a regular Paramount movie, perhaps), to not anticipating that the response from within Afghan would threaten the safety of the actors. One of the actors, Zekaria Ibrahmi, (who plays Amir as a child) had expressed his desire to study and live in the U.S. Perhaps that wish should have been built into the contract, to ensure the actors were safe.
The sad part is that as a modern thinking Pathan, I can see both sides of the equation. While I vehemently disagree with fundamentalism and intolerance, I also understand that this reaction should have been expected – and the filmmakers should have had a contingency plan.
Saturday, December 15, 2007
Sher View: Clinton Library Funding
The Washington Post yesterday has raised the issue of foreign, which should imply all foreign sources, but names mostly Middle Eastern sources, and implied there was something sinister about the donations to the former presidents' presidential library. For Senator Obama to also be mentioned that the wishes to bring in strict legislation to donations for such foundations shows that both the Washington Post and Senator Obama are way off the mark. First why question donations from the Middle East only, surely the British and European donors also appear on the list, indeed why not also question US donors too, after all they would have a greater vested interest to use donations for a political cause.
Most importantly, why would someone want to 'bribe or influence' a former President of the US? I can see it being an issue funding a presidential hopeful as being a major issue, (not that US special interest groups don't do that), but why would I pay say $10 million for a lovely library to a man who is no more in office, other than out of goodwill or friendship?
Secondly this is an old issue, as far as I see it dead and buried but brought up by Washington Post perhaps to support the Obama cause, consider the Post seems to like the Obama camp more than anyone else.
Thirdly, instead of celebrating such donations as a triumph of understanding and diplomacy its being looked down up either because the source of funding is not politically convenient or sounds sinister enough for respectable numbers to behave like weekend rags. Come on guys this was not like the Middle East funding some clandestine subversive group within America.
Fourthly, the Middle East donates alot of money to alot of causes, when you produce a daily cash flow of billions and need to only spend a fraction of that money, you do have alot of people lining up for donations. If reporters want to really do their homework then do mention the donations made elsewhere by these same Middle Eastern personalities. I know from personal experience, being an ex banker, that the late Sh Zayed of Abu Dhabi alone funded two major hospitals, one airport, a whole road network system in two towns, and a rural development program in Pakistan that ran into billions. Many will find fault with that, so if he then also gave say a million dollars to an EX presidents library big deal.
Finally, political motives could abound anywhere, the reality is that be fair, name all donors, and suggest the motives from all parties, and don't just bash the Middle East.
I marvel at the ability of the human mind to take something good and twist it into something sinister.
Most importantly, why would someone want to 'bribe or influence' a former President of the US? I can see it being an issue funding a presidential hopeful as being a major issue, (not that US special interest groups don't do that), but why would I pay say $10 million for a lovely library to a man who is no more in office, other than out of goodwill or friendship?
Secondly this is an old issue, as far as I see it dead and buried but brought up by Washington Post perhaps to support the Obama cause, consider the Post seems to like the Obama camp more than anyone else.
Thirdly, instead of celebrating such donations as a triumph of understanding and diplomacy its being looked down up either because the source of funding is not politically convenient or sounds sinister enough for respectable numbers to behave like weekend rags. Come on guys this was not like the Middle East funding some clandestine subversive group within America.
Fourthly, the Middle East donates alot of money to alot of causes, when you produce a daily cash flow of billions and need to only spend a fraction of that money, you do have alot of people lining up for donations. If reporters want to really do their homework then do mention the donations made elsewhere by these same Middle Eastern personalities. I know from personal experience, being an ex banker, that the late Sh Zayed of Abu Dhabi alone funded two major hospitals, one airport, a whole road network system in two towns, and a rural development program in Pakistan that ran into billions. Many will find fault with that, so if he then also gave say a million dollars to an EX presidents library big deal.
Finally, political motives could abound anywhere, the reality is that be fair, name all donors, and suggest the motives from all parties, and don't just bash the Middle East.
I marvel at the ability of the human mind to take something good and twist it into something sinister.
Friday, November 23, 2007
Sher View: The deed is done.
Indeed the deed is done. The General has got the endorsement from the Judges he appointed, announced the election date, and before December 1st 2007 will have shed the military uniform and seemingly all will be well. His good friend President George W Bush has said while the emergency is not something the US is elated about, 'General Musharraf has done a lot for democracy.' A truly puzzling statement. But then what Mr. G W Bush thinks of the General is not important, what the people of Pakistan will feel is more crucial.
Yes indeed the General was doing fine for democracy up to a year or so back, then the proverbial 'drunk with power' syndrome got to the man. Locking up political opponents, firing a Judge for alleged corruption without referring the case to the judiciary to try their own, and mishandling the siege of a mosque a few hundred meters from the Presidential residence in Islamabad all started a response from the General that has not made sense. In an interview to BBC the General tried to justify his actions and asked 'you think I just went mad in the last few months?'. The truth is Yes sir you have gone pretty mad. Here is why.
Building democracy by tearing up the constitution, locking up over 3,000 lawyers and human rights activists and rewriting the rules to protect your position is NOT Democracy. Interestingly Benazir Bhutto in championing 'democracy' cut her deals, then the general reneged and she did a hasty U turn and now might well contest the election as the sole main political leader if Nawaz Sharif is not allowed to contest the election. Under the new rules Mr. Sharif has to be personally present to file his nomination papers, so it is likely he will convince his Saudi hosts to let him return. Perhaps this was one of the reasons General Musharraf visited King Abdullah in Riyadh to either ask the Saudis not to let former PM back, but is more likely that he was trying to ask them to get Mr. Sharif agree to not demand the general's removal as President if he, in return, is allowed to return.
The Americans have again got this wrong, as if their main purpose is to fight terrorism and restore democracy then the way forward is rather simpler than backing just the General and Benazir Bhutto. They should engage in a contact with Mr. Nawaz Sharif and indeed the religious political parties in getting them to agree that Washington will support a full free election in return all political parties must agree to reduce violence within Pakistan. This is also in the interests of all the political parties, as terrorism within the country takes the political initiative away from the party leadership. Ms Bhutto and General Musharraf, now out of uniform, will not be able to deal with terrorism on their own.
If full and free elections are held and all parties are allowed to contest then this is what is likely, Sind province will go to Benazir's political party, Punjab to Nawaz Sharif, the North West Frontier Province to the MMA (a coalition of religious political parties) and Baluchistan to the Baluchi nationalist parties. Only the PML of Nawaz Sharif can deal with the groups who will win in NWFP and Baluchistan, and it is in these provinces that the problems of militancy and terrorism exist. This is why I have always argued that the country needs a government of national reconstruction where all parties are encouraged to form a collective government. Backing only one or two horses in this complex race will never be a fruitful bet and hence the dialogue has to be more broad based.
For the US hence the option has to be a neutral encouragement for free elections after they have had contacts with all political parties. It would seem while there will be legal and political resentments to the generals 'election' as the President, there is a chance that if free elections are allowed and all are allowed to participate then perhaps the chances are that this sordid deed will be buried in the need for national interest.
Yes indeed the General was doing fine for democracy up to a year or so back, then the proverbial 'drunk with power' syndrome got to the man. Locking up political opponents, firing a Judge for alleged corruption without referring the case to the judiciary to try their own, and mishandling the siege of a mosque a few hundred meters from the Presidential residence in Islamabad all started a response from the General that has not made sense. In an interview to BBC the General tried to justify his actions and asked 'you think I just went mad in the last few months?'. The truth is Yes sir you have gone pretty mad. Here is why.
Building democracy by tearing up the constitution, locking up over 3,000 lawyers and human rights activists and rewriting the rules to protect your position is NOT Democracy. Interestingly Benazir Bhutto in championing 'democracy' cut her deals, then the general reneged and she did a hasty U turn and now might well contest the election as the sole main political leader if Nawaz Sharif is not allowed to contest the election. Under the new rules Mr. Sharif has to be personally present to file his nomination papers, so it is likely he will convince his Saudi hosts to let him return. Perhaps this was one of the reasons General Musharraf visited King Abdullah in Riyadh to either ask the Saudis not to let former PM back, but is more likely that he was trying to ask them to get Mr. Sharif agree to not demand the general's removal as President if he, in return, is allowed to return.
The Americans have again got this wrong, as if their main purpose is to fight terrorism and restore democracy then the way forward is rather simpler than backing just the General and Benazir Bhutto. They should engage in a contact with Mr. Nawaz Sharif and indeed the religious political parties in getting them to agree that Washington will support a full free election in return all political parties must agree to reduce violence within Pakistan. This is also in the interests of all the political parties, as terrorism within the country takes the political initiative away from the party leadership. Ms Bhutto and General Musharraf, now out of uniform, will not be able to deal with terrorism on their own.
If full and free elections are held and all parties are allowed to contest then this is what is likely, Sind province will go to Benazir's political party, Punjab to Nawaz Sharif, the North West Frontier Province to the MMA (a coalition of religious political parties) and Baluchistan to the Baluchi nationalist parties. Only the PML of Nawaz Sharif can deal with the groups who will win in NWFP and Baluchistan, and it is in these provinces that the problems of militancy and terrorism exist. This is why I have always argued that the country needs a government of national reconstruction where all parties are encouraged to form a collective government. Backing only one or two horses in this complex race will never be a fruitful bet and hence the dialogue has to be more broad based.
For the US hence the option has to be a neutral encouragement for free elections after they have had contacts with all political parties. It would seem while there will be legal and political resentments to the generals 'election' as the President, there is a chance that if free elections are allowed and all are allowed to participate then perhaps the chances are that this sordid deed will be buried in the need for national interest.
Tuesday, November 20, 2007
Sher View: Counting the General's days
Through interviews given in the presidential palace in Islamabad to carefully selected foreign journalists, President Pervez Musharraf of Pakistan has been valiantly trying to present himself as a champion of democracy and free media. To underscore that point, the veteran general has been donning not his army uniform but has appeared in mufti – smart charcoal-grey suits, and sober shirts and muted ties. Of course, those televised images were mostly seen by foreign viewers, and not by his fellow 160 million Pakistanis. The indigenous media remain muzzled – which is to be expected in light of the fact that the general has suspended Pakistan's Constitution and pretty much imposed martial law. Pakistani journalists have been kept away from their president.
To his credit, Mr. Musharraf has kept a straight face through these interviews. His phlegmatic visage notwithstanding, he must surely know that his days in office are numbered – that the end to his rule may come as early as this weekend when John Negroponte, the Deputy Secretary of State of the United States, arrives in Islamabad to give President Musharraf the news that Washington is unfastening its embrace of the general. Of course, the encounter will be preceded by some due diligence on Mr. Negroponte's part; in fact, he has already been in touch with elements within the current administration, and with members of the civilian opposition. By the time Secretary Negroponte relays the unwelcome news to President Musharraf, the scenario for political succession would have been tidily worked out.
Such a scenario may include the return to Pakistan of Nawaz Sharif, the former prime minister whom Musharraf overthrew in a bloodless coup in 1999 and bundled off to exile to Saudi Arabia. When Mr. Sharif gamely tried to return home some weeks ago, he was not allowed back into his own country. There's little question in my mind that the U.S. has not been talking with Mr. Sharif. Unlike his political opponent Benazir Bhutto – who was prepared to make a Faustian pact with Mr. Musharraf in a power-sharing arrangement under which he would continue as president and she would become prime minister – Mr. Sharif not only wants Mr. Musharraf to relinquish Pakistan's presidency but also leave the army altogether. (The general said yesterday that he may do the latter but not the former.)
My political and business sources tell me that the chancelleries of Europe have been open to the idea of a return by Mr. Sharif. Indeed, some European leaders have privately encouraged the Bush Administration to widen its dialogue with Pakistani constituencies beyond Ms. Bhutto and her Pakistan People's Party. They have emphasized that she does not – yet – have support from the street; specifically, Pakistan's students have not rallied to her cause. It's nice to have lawyers agitating in her behalf, but let it be noted that the Pakistan's agents of change historically have been students: Generals Mohammed Ayub Khan and Yahya Khan – both military dictators – were forced to yield power only after protests led and manned by students became so massive that the "voice" of the street could not be ignored.
General Musharraf has shown few signs of acknowledging this history. I can't blame him, of course – after all, who wants to raise intimations of one's own political mortality? What the general did not say in his media interviews has been at least as important – if not more – than the predictable words he uttered. He did say that his political rival Ms. Bhutto was under house arrest to "protect" her from terrorist attacks. But he neglected to mention that Imran Khan, an iconic hero of cricket who turned to politics, was being manhandled and arrested under Pakistan's draconian anti-terrorist measures. Mr. Khan's crime was to lead a student protest against the imposition of the emergency, which is normally the right of any person under a democracy. Could it be that General Musharraf is scared that the charismatic Mr. Khan will be the rallying figure for the country's youthful population?
General Musharraf would do well to study his own nation's history. Almost three decades ago, Benazir Bhutto's father Prime Minister Zulfikar Ali Bhutto appeared on national television when faced with rising protests against his increasingly dictatorial rule. With arrogance that was barely concealed, he said that the seat of power he sat upon was much stronger than people imagined. In less than a month after that speech, General Zia ul-Haq – then chief of the army – deposed him in a military coup.
As I watched President Musharraf's interviews from my vantage point in Dubai, I could not help but think that while the general talked of saving Pakistan he seemed to be oblivious to the fact that it needs saving from his own authoritarian actions – actions that clearly don't have an agenda beyond political survival. Indeed, his assertion that national elections have been historically held in Pakistan came across as scarcely credible in view of the fact that the polls were conducted under the barrel of the gun and emergency powers of the army. History may not be the general's forte, but surely he must know that one of those elections – in 1988 – was held when General Zia was killed mysteriously in a plane crash. Military dictators don't necessarily retire or fade away in Pakistan. And while I certainly don't wish General Musharraf ill, it wouldn't be hyperbole to say that his termination as president could come with extreme prejudice.
The general is cornered. His tough-talking interviews are not going to placate the protests against him. Perhaps what Imran Khan was trying with the students causes the most concern to the military, and it is not surprising that he would be dubbed a terrorist – not because he was planning terrorist acts but because he was igniting the fuse General Musharraf's army would worry most about.
While the protests continue – accompanied by a chorus of threats from Western capitals about cutting aid – General Musharraf himself must be worried about that his political slippage. The idea of him stepping down is now not only an anathema but would be political suicide from his perspective. Though he has tried to play down the situation by promising elections, and even saying that he would relinquish his army post but remain president, he must dread John Negroponte's forthcoming visit. Under the circumstances, how warm will Mr. Musharraf's hospitality be to his hangman?
President Musharraf could simply ignore Mr. Negroponte's "advice" as the meddling by a foreign power in the domestic affairs of a sovereign state, albeit one that traditionally has been a geopolitical ally of the United States, and one whose partnership is central to Washington's war on global terrorism. Mr. Musharraf rules under the Provisional Constitutional Order – in effect, a military diktat to sanction the emergency – and he and his friends are putting immense pressure of the judges of the provincial High Courts of Pakistan's four provinces to take a new oath of office. This would reinstate the High Courts, allowing the federal government to keep the nation's Supreme Court suspended. This, the general hopes, will give him some legitimacy beyond the dubious provisions of the Provisional Constitutional Order. Reports have been pouring in that each of the judges of the High Courts are visited a number of times a day to pressure them into taking the new oath.
Secretary Negroponte recognizes that there can be no return to even a semblance of normalcy in Pakistan while General Musharraf is still at the helm. This would be the ideal time for one to be fly on the wall of the Pakistan Military Headquarters where the Joint Chief of Staffs must be meeting. It is not beyond imagination to think that pressure from within the army must be mounting on General Musharraf to step down, and allow the smooth transition to civilian rule. Indeed, there's the precedent of General Aslam Beg in 1988 arguing an identical point; it would not be unlikely to see some of the Corp Commanders – the equivalent of the joint chiefs of staff -- trying to impress this position on general Musharraf. This is all the more possible considering that the general has claimed he allows "full democracy and expression of views" by his army officers.
If, as expected, Mr. Negroponte makes it clear to General Musharraf that the US position with respect to him has changed, it would mean not only a change in Pakistan's governance. It would send a strong signal that will allow a change – whether from internal pressures of the army or as a result of America wanting to be an honest broker for democracy – allowing an interim government where a return to democracy will be possible. It is also possible that since two of general's closest advisors are his former military secretary -- now heading the Inter Services Intelligence -- and his wife's relative -- who heads the Military Intelligence -- the chances are he could be fed information he wants to hear rather than what needs to be heard by President Musharraf. In other words, the general and his cabal will all be living in a fool's paradise.
While the general may feel he and his cabal have the situation under control, it is clear that having promising elections but keeping politicians either locked up or in exile can hardly be salutary to President Musharraf's cause. Nor will such continued condition be perceived as a sane act of a man supposedly committed to the fashioning of a democrat system in Pakistan, however daunting the task. Perceptions do matter in the daily life of individuals and institutions, and of nations. Right now, General Musharraf's army is seen as hostage takers of the country rather. President Musharraf would rather have himself and his uniformed caudillo be seen as brave saviors. And while he can dictate governance for the moment, unfortunately for him Mr. Musharraf cannot reshape perceptions that are solidifying that the time has come for him to leave with his dignity – and neck – intact.
To his credit, Mr. Musharraf has kept a straight face through these interviews. His phlegmatic visage notwithstanding, he must surely know that his days in office are numbered – that the end to his rule may come as early as this weekend when John Negroponte, the Deputy Secretary of State of the United States, arrives in Islamabad to give President Musharraf the news that Washington is unfastening its embrace of the general. Of course, the encounter will be preceded by some due diligence on Mr. Negroponte's part; in fact, he has already been in touch with elements within the current administration, and with members of the civilian opposition. By the time Secretary Negroponte relays the unwelcome news to President Musharraf, the scenario for political succession would have been tidily worked out.
Such a scenario may include the return to Pakistan of Nawaz Sharif, the former prime minister whom Musharraf overthrew in a bloodless coup in 1999 and bundled off to exile to Saudi Arabia. When Mr. Sharif gamely tried to return home some weeks ago, he was not allowed back into his own country. There's little question in my mind that the U.S. has not been talking with Mr. Sharif. Unlike his political opponent Benazir Bhutto – who was prepared to make a Faustian pact with Mr. Musharraf in a power-sharing arrangement under which he would continue as president and she would become prime minister – Mr. Sharif not only wants Mr. Musharraf to relinquish Pakistan's presidency but also leave the army altogether. (The general said yesterday that he may do the latter but not the former.)
My political and business sources tell me that the chancelleries of Europe have been open to the idea of a return by Mr. Sharif. Indeed, some European leaders have privately encouraged the Bush Administration to widen its dialogue with Pakistani constituencies beyond Ms. Bhutto and her Pakistan People's Party. They have emphasized that she does not – yet – have support from the street; specifically, Pakistan's students have not rallied to her cause. It's nice to have lawyers agitating in her behalf, but let it be noted that the Pakistan's agents of change historically have been students: Generals Mohammed Ayub Khan and Yahya Khan – both military dictators – were forced to yield power only after protests led and manned by students became so massive that the "voice" of the street could not be ignored.
General Musharraf has shown few signs of acknowledging this history. I can't blame him, of course – after all, who wants to raise intimations of one's own political mortality? What the general did not say in his media interviews has been at least as important – if not more – than the predictable words he uttered. He did say that his political rival Ms. Bhutto was under house arrest to "protect" her from terrorist attacks. But he neglected to mention that Imran Khan, an iconic hero of cricket who turned to politics, was being manhandled and arrested under Pakistan's draconian anti-terrorist measures. Mr. Khan's crime was to lead a student protest against the imposition of the emergency, which is normally the right of any person under a democracy. Could it be that General Musharraf is scared that the charismatic Mr. Khan will be the rallying figure for the country's youthful population?
General Musharraf would do well to study his own nation's history. Almost three decades ago, Benazir Bhutto's father Prime Minister Zulfikar Ali Bhutto appeared on national television when faced with rising protests against his increasingly dictatorial rule. With arrogance that was barely concealed, he said that the seat of power he sat upon was much stronger than people imagined. In less than a month after that speech, General Zia ul-Haq – then chief of the army – deposed him in a military coup.
As I watched President Musharraf's interviews from my vantage point in Dubai, I could not help but think that while the general talked of saving Pakistan he seemed to be oblivious to the fact that it needs saving from his own authoritarian actions – actions that clearly don't have an agenda beyond political survival. Indeed, his assertion that national elections have been historically held in Pakistan came across as scarcely credible in view of the fact that the polls were conducted under the barrel of the gun and emergency powers of the army. History may not be the general's forte, but surely he must know that one of those elections – in 1988 – was held when General Zia was killed mysteriously in a plane crash. Military dictators don't necessarily retire or fade away in Pakistan. And while I certainly don't wish General Musharraf ill, it wouldn't be hyperbole to say that his termination as president could come with extreme prejudice.
The general is cornered. His tough-talking interviews are not going to placate the protests against him. Perhaps what Imran Khan was trying with the students causes the most concern to the military, and it is not surprising that he would be dubbed a terrorist – not because he was planning terrorist acts but because he was igniting the fuse General Musharraf's army would worry most about.
While the protests continue – accompanied by a chorus of threats from Western capitals about cutting aid – General Musharraf himself must be worried about that his political slippage. The idea of him stepping down is now not only an anathema but would be political suicide from his perspective. Though he has tried to play down the situation by promising elections, and even saying that he would relinquish his army post but remain president, he must dread John Negroponte's forthcoming visit. Under the circumstances, how warm will Mr. Musharraf's hospitality be to his hangman?
President Musharraf could simply ignore Mr. Negroponte's "advice" as the meddling by a foreign power in the domestic affairs of a sovereign state, albeit one that traditionally has been a geopolitical ally of the United States, and one whose partnership is central to Washington's war on global terrorism. Mr. Musharraf rules under the Provisional Constitutional Order – in effect, a military diktat to sanction the emergency – and he and his friends are putting immense pressure of the judges of the provincial High Courts of Pakistan's four provinces to take a new oath of office. This would reinstate the High Courts, allowing the federal government to keep the nation's Supreme Court suspended. This, the general hopes, will give him some legitimacy beyond the dubious provisions of the Provisional Constitutional Order. Reports have been pouring in that each of the judges of the High Courts are visited a number of times a day to pressure them into taking the new oath.
Secretary Negroponte recognizes that there can be no return to even a semblance of normalcy in Pakistan while General Musharraf is still at the helm. This would be the ideal time for one to be fly on the wall of the Pakistan Military Headquarters where the Joint Chief of Staffs must be meeting. It is not beyond imagination to think that pressure from within the army must be mounting on General Musharraf to step down, and allow the smooth transition to civilian rule. Indeed, there's the precedent of General Aslam Beg in 1988 arguing an identical point; it would not be unlikely to see some of the Corp Commanders – the equivalent of the joint chiefs of staff -- trying to impress this position on general Musharraf. This is all the more possible considering that the general has claimed he allows "full democracy and expression of views" by his army officers.
If, as expected, Mr. Negroponte makes it clear to General Musharraf that the US position with respect to him has changed, it would mean not only a change in Pakistan's governance. It would send a strong signal that will allow a change – whether from internal pressures of the army or as a result of America wanting to be an honest broker for democracy – allowing an interim government where a return to democracy will be possible. It is also possible that since two of general's closest advisors are his former military secretary -- now heading the Inter Services Intelligence -- and his wife's relative -- who heads the Military Intelligence -- the chances are he could be fed information he wants to hear rather than what needs to be heard by President Musharraf. In other words, the general and his cabal will all be living in a fool's paradise.
While the general may feel he and his cabal have the situation under control, it is clear that having promising elections but keeping politicians either locked up or in exile can hardly be salutary to President Musharraf's cause. Nor will such continued condition be perceived as a sane act of a man supposedly committed to the fashioning of a democrat system in Pakistan, however daunting the task. Perceptions do matter in the daily life of individuals and institutions, and of nations. Right now, General Musharraf's army is seen as hostage takers of the country rather. President Musharraf would rather have himself and his uniformed caudillo be seen as brave saviors. And while he can dictate governance for the moment, unfortunately for him Mr. Musharraf cannot reshape perceptions that are solidifying that the time has come for him to leave with his dignity – and neck – intact.
Sher Value: Oil to score a century!
Crude oil prices will, most probably, breach the $100 per barrel mark, and perhaps by an easier stride from the mid nineties where it stands perched today. However, there is more to the issue of oil prices than just watching it in the nervous nineties, its perhaps the most fabulous story on commodities. Between 1999 and 2006 the price of oil moved from $10 to $60, and between 2006 and now, the end of 2007 it has moved from $60 to $96, and for once none of these increases can be blamed on the OPEC or any political or economic maneuvering of the oil cartel. To put this rise in perspective assume a country exporting 2 million barrels of oil a day in 1999 was earning US$20 million per day, and today the same country is earning US$192 million per day!
To understand this phenomenal rise we have to look at the massive demand for energy that growth in India and China have been witnessing. China’s demand for oil has more than tripled in these seven odd years. There is little evidence that this global demand will slow down and a world recession, while possible, will have to be quite severe to bring this engine to a halt.
As OPEC ministers meet in Saudi Arabia it is not only clear that an output increase is not on the cards but surprisingly some members are arguing that perhaps it is time to dump the dollar as the reference pricing currency. While a continued fall in the greenback value will hurt the purchasing power of oil earnings, and the market will price in ‘compensatory increases’ for the price of oil. This is partially responsible for the recent up ticks as oil inches towards the 100 mark.
However, the price of oil is not only about demand and supply, but also is related to future demand and future supply. As demand has been growing we have to remember that oil reserves are growing at less that .75% per year. In the past two decades new reserves have been discovered at the rate of about 3% per year. What this means is that if oil demand has grown by an average of 12% a year over the past decade then new reserves have only been created at one fourth that level clearly implying that into the future there will be serious supply constraints. While high oil prices will spur on new oil explorations, the cycle of discovery to actual oil production does take a few years to achieve.
Long term economic modeling will suggest that a recession on a world wide scale may perhaps be the best thing to calm things down, the simple truth is that the engines that are pumping away in the emerging markets, and consumer led demand will be hard to reign in. The US was consuming 16 million barrels a day in the 1970’s and today its consuming 22 million barrels but the growth has been elsewhere. Try and imagine if every Chinese and Indian move to own an automobile, scary thought right?
To understand this phenomenal rise we have to look at the massive demand for energy that growth in India and China have been witnessing. China’s demand for oil has more than tripled in these seven odd years. There is little evidence that this global demand will slow down and a world recession, while possible, will have to be quite severe to bring this engine to a halt.
As OPEC ministers meet in Saudi Arabia it is not only clear that an output increase is not on the cards but surprisingly some members are arguing that perhaps it is time to dump the dollar as the reference pricing currency. While a continued fall in the greenback value will hurt the purchasing power of oil earnings, and the market will price in ‘compensatory increases’ for the price of oil. This is partially responsible for the recent up ticks as oil inches towards the 100 mark.
However, the price of oil is not only about demand and supply, but also is related to future demand and future supply. As demand has been growing we have to remember that oil reserves are growing at less that .75% per year. In the past two decades new reserves have been discovered at the rate of about 3% per year. What this means is that if oil demand has grown by an average of 12% a year over the past decade then new reserves have only been created at one fourth that level clearly implying that into the future there will be serious supply constraints. While high oil prices will spur on new oil explorations, the cycle of discovery to actual oil production does take a few years to achieve.
Long term economic modeling will suggest that a recession on a world wide scale may perhaps be the best thing to calm things down, the simple truth is that the engines that are pumping away in the emerging markets, and consumer led demand will be hard to reign in. The US was consuming 16 million barrels a day in the 1970’s and today its consuming 22 million barrels but the growth has been elsewhere. Try and imagine if every Chinese and Indian move to own an automobile, scary thought right?
Wednesday, November 14, 2007
Sher View: Pakistan: a fragile moment.
After a jet lagged appearance on Riz Khan's talk show on Al Jazeera International, I have had time to reflect a little more deeply on the situation in my country. To say these are precarious times would be an understatement; Pakistan is perhaps at its most fragile moment since its independence in 1947. It is blatantly clear that self interest, which has been the hall mark of most of the nations leaders, be they in uniform or not, has begun to unfold in a sadistic soup of side deals, broken promises, exiles and finally the show of the power of the gun muzzle through 'emergency powers'. 160 million souls have now been again imprisoned behind the shadow of a political intent that is clearly only serving the handful who have decided to determine what is best for the country.
Sadly this attitude and apathy is not confined to Pakistanis only; the United States and others have taken the position of a rhetorical slap on the hand of a general who has gone mad, while hoping their political contriving with just one political leader might be the solution. In the backdrop of this the country's former Chief Justice, with perhaps the record of being the only Chief of an apex court to be dismissed twice in succession, has forgotten his oath to uphold law and taken to supporting a political rather than a legal position.
As emails pour in from observers and friends from abroad wondering why Pakistan is trying to commit political suicide there is a lack of solutions. As the general promises elections one can only wonder if these elections, if and when they are held, can mean anything with an election commission that will partial or indeed with only one political party being a serious contender. It is all the more baffling to note that in the middle of this turmoil an extremist insurgency continues in Waziristan and Swat where militant Islamists have raid their own flags, torn down Pakistan's flag and essentially declared their own Emirate. If the general wanted to combat extremism there is no evidence that he has moved against those elements who clearly have committed treasonable acts and even more surprisingly the former Chief Justice has not felt it worthy to condemn what is clearly an act of treason.
Interestingly the view that some might feel, in the West, that between General Musharaf and Benazir Bhutto there is perhaps a possibility to curb 'terrorism'. In the first place home grown militancy is not linked to Al Qadea, but more a knee jerk reaction to Musharraf's failure to deal with the causes of the resentment within the masses. There is no doubt in my mind that unless a broad based return to a truly democratic system does not occur the political and social will to deal with militancy will not emerge. It is clear that even the religious political parties do not want militancy like that in Waziristan but this is something that has not been understood by General Musharraf and his minders.
It would seem that as this political stalemate continues, even though a placating promise of an election might be some ray of hope, the reality is these are all truncated solutions. There is not enough people power on the streets to topple the general and perhaps only Imran Khan, cricketer turn politician understands that unless the students do not take to the streets the only hope is that the generals comrades in uniform either convince him to back down or take the measures to be a true obundsman for the country and bring some change to the system. Yet will the politicians promise in return not to go back to corruption and nepotism which seems to have been the hallmark of each civilian government. This is, as I said, a fragile moment and its time for Pakistanis to think of the country and not themselves.
Sadly this attitude and apathy is not confined to Pakistanis only; the United States and others have taken the position of a rhetorical slap on the hand of a general who has gone mad, while hoping their political contriving with just one political leader might be the solution. In the backdrop of this the country's former Chief Justice, with perhaps the record of being the only Chief of an apex court to be dismissed twice in succession, has forgotten his oath to uphold law and taken to supporting a political rather than a legal position.
As emails pour in from observers and friends from abroad wondering why Pakistan is trying to commit political suicide there is a lack of solutions. As the general promises elections one can only wonder if these elections, if and when they are held, can mean anything with an election commission that will partial or indeed with only one political party being a serious contender. It is all the more baffling to note that in the middle of this turmoil an extremist insurgency continues in Waziristan and Swat where militant Islamists have raid their own flags, torn down Pakistan's flag and essentially declared their own Emirate. If the general wanted to combat extremism there is no evidence that he has moved against those elements who clearly have committed treasonable acts and even more surprisingly the former Chief Justice has not felt it worthy to condemn what is clearly an act of treason.
Interestingly the view that some might feel, in the West, that between General Musharaf and Benazir Bhutto there is perhaps a possibility to curb 'terrorism'. In the first place home grown militancy is not linked to Al Qadea, but more a knee jerk reaction to Musharraf's failure to deal with the causes of the resentment within the masses. There is no doubt in my mind that unless a broad based return to a truly democratic system does not occur the political and social will to deal with militancy will not emerge. It is clear that even the religious political parties do not want militancy like that in Waziristan but this is something that has not been understood by General Musharraf and his minders.
It would seem that as this political stalemate continues, even though a placating promise of an election might be some ray of hope, the reality is these are all truncated solutions. There is not enough people power on the streets to topple the general and perhaps only Imran Khan, cricketer turn politician understands that unless the students do not take to the streets the only hope is that the generals comrades in uniform either convince him to back down or take the measures to be a true obundsman for the country and bring some change to the system. Yet will the politicians promise in return not to go back to corruption and nepotism which seems to have been the hallmark of each civilian government. This is, as I said, a fragile moment and its time for Pakistanis to think of the country and not themselves.
Thursday, November 8, 2007
Sher View: The General Totters
Being in the boots of General Pervez Musharraf is not one of the things many Pakistanis would desire, particularly right at this moment as he implements the suspension of the Constitution and imposes total military rule -- against the warning of the Bush Administration -- in one of America's longtime allies in the volatile South Asia region.
Faced with a possible Supreme Court judgment that would have gone against his Presidency, a controversial deal with former Prime Minister Benazir Bhutto, the bundling off of another former Prime Minister Nawaz Sharif, and the rising pressure of militants in his own backyard, clearly General Musharraf was and is a cornered man.
For the past year or so the military strongman clearly lost his touch, if not the political momentum: his handling of the firing of the Supreme Court Chief Justice and storming of the Lal (Red) Mosque barely 200 meters from the Military Intelligence Headquarters were more than mere embarrassments; they showed that the General did have a conspicuous chink in his armor.
While he tried a political foxtrot in the last few months favoring Benazir Bhutto to return in exchange for an amnesty on possible convictions against her on corruption charges -- presumably with an understanding from Ms. Bhutto that the General would remain as the President -- it was becoming clear that the General was not politically savvy about what he was getting himself into. His handling of sending Nawaz Sharif back into political exile in Saudi Arabia -- the country that had guaranteed Mr. Sharif not returning to Pakistan for at least ten years -- clearly showed that the General was picking his favorites among which political opponents would be permitted to come back home from abroad..
What happens next?
The Bush Administration -- which gave Pakistan more than $10 billion, mostly in military aid, since General Musharraf seized power in a bloodless coup in 1999 -- is scarcely pleased with what the General has donem It is more likely that the Europeans will take economically effective steps against Pakistan’s regime. The Americans will have to balance things given that Musharraf will use the martial law as the necessary weapon he needs to go after the militants of Al Qaeda and Taliban. With press freedoms curtailed or restricted, and military force rather than para-military rangers fighting the militants, his bet will be for quick results if Mr. Musharraf wants some semblance of acceptability in the White House again..
While it is possible that there will be mass political rallies against him in Pakistan -- a land of 177 million Muslims of many persuasions -- it is highly unlikely that General Musharraf and his generals will be as tolerant of street demonstrations as they were during the uproar over the Supreme Court Chief Justice's firing. Benazir Bhutto will perhaps come out of this politically for the worse, finding her deal with the General scuttled. And even though she was acquiring some kudos for speaking out against terrorism after the attack on her convoy upon her return to Pakistan from her exile in Dubai,, she will be hard pressed to prove that democracy was really her sole motive for returning to Pakistan.
The martial law and the General’s sudden about-face actually will favor Nawaz Sharif, who in exile with the Saudis as their "guest," is going to gain the most from this turn of events. It will help him all the more since it seems that the United States had pressed both the General and Benazir Bhutto to come to some understanding; I am told reliably that some American officials urged Musharraf not to undertake any discussions with Nawaz Sharif.
In the street politics of Pakistan this is a huge dividend that Mr. Sharif can encash as and when he wants.
It is possible that General Musharraf acted to pre-empt any dissension within the army ranks. With the November 15th court judgment expected against General Musharraf's presidential election, it is possible his generals were getting uncomfortable about his personalization of the political challenges before the country.
It would well be that the martial law might have staved off any possible attempts by nationalist inspired Generals within the army. One of the most difficult aspects to fathom will be the reaction of the command line generals who have not always felt comfortable with performing martial law duties. Even though since the times of General Zia ul Haq -- one of Mr. Musharraf's predecessors as army chief and president-by-coup -- the army was highly politicized, it cannot be guaranteed that these generals will follow the edict of a President and Chief of Army Staff who seems to be battling more for his life than for his country.
For Pakistan and the region this is a precarious and fragile moment, and martial laws may not be the solution. While dealing with the militants may seem easier by comparison, there is no doubt that the political drama that is unfolding will not end so easily.
General Musharraf has merely written out the first act of a drama the Pakistani public is well versed in, but as with all such dramas the audience has no loyalties. Sadly enough, with Ms. Bhutto'’s political juggling and Mr. Sharif fuming in Saudi Arabia as a "guest," the chances are that General Musharraf will have to have a head-on clash with political forces within the country and most likely within the army.
Only the next few weeks will tell us if the General has truly tottered and fallen. Until then, this past weekend's troubling developments will remain a precarious tangle in Pakistan’s sad political history of military meddling, Islamist maneuverings, and the shredding of the social order.
America may well lose a key ally in the region in its war against global terrorism. It is difficult not to despair about Pakistan's prospects. It is even more difficult bot to despair over the incipient possibility that America's enormous economic, military and political investment in Pakistan may well have been for nought.
Faced with a possible Supreme Court judgment that would have gone against his Presidency, a controversial deal with former Prime Minister Benazir Bhutto, the bundling off of another former Prime Minister Nawaz Sharif, and the rising pressure of militants in his own backyard, clearly General Musharraf was and is a cornered man.
For the past year or so the military strongman clearly lost his touch, if not the political momentum: his handling of the firing of the Supreme Court Chief Justice and storming of the Lal (Red) Mosque barely 200 meters from the Military Intelligence Headquarters were more than mere embarrassments; they showed that the General did have a conspicuous chink in his armor.
While he tried a political foxtrot in the last few months favoring Benazir Bhutto to return in exchange for an amnesty on possible convictions against her on corruption charges -- presumably with an understanding from Ms. Bhutto that the General would remain as the President -- it was becoming clear that the General was not politically savvy about what he was getting himself into. His handling of sending Nawaz Sharif back into political exile in Saudi Arabia -- the country that had guaranteed Mr. Sharif not returning to Pakistan for at least ten years -- clearly showed that the General was picking his favorites among which political opponents would be permitted to come back home from abroad..
What happens next?
The Bush Administration -- which gave Pakistan more than $10 billion, mostly in military aid, since General Musharraf seized power in a bloodless coup in 1999 -- is scarcely pleased with what the General has donem It is more likely that the Europeans will take economically effective steps against Pakistan’s regime. The Americans will have to balance things given that Musharraf will use the martial law as the necessary weapon he needs to go after the militants of Al Qaeda and Taliban. With press freedoms curtailed or restricted, and military force rather than para-military rangers fighting the militants, his bet will be for quick results if Mr. Musharraf wants some semblance of acceptability in the White House again..
While it is possible that there will be mass political rallies against him in Pakistan -- a land of 177 million Muslims of many persuasions -- it is highly unlikely that General Musharraf and his generals will be as tolerant of street demonstrations as they were during the uproar over the Supreme Court Chief Justice's firing. Benazir Bhutto will perhaps come out of this politically for the worse, finding her deal with the General scuttled. And even though she was acquiring some kudos for speaking out against terrorism after the attack on her convoy upon her return to Pakistan from her exile in Dubai,, she will be hard pressed to prove that democracy was really her sole motive for returning to Pakistan.
The martial law and the General’s sudden about-face actually will favor Nawaz Sharif, who in exile with the Saudis as their "guest," is going to gain the most from this turn of events. It will help him all the more since it seems that the United States had pressed both the General and Benazir Bhutto to come to some understanding; I am told reliably that some American officials urged Musharraf not to undertake any discussions with Nawaz Sharif.
In the street politics of Pakistan this is a huge dividend that Mr. Sharif can encash as and when he wants.
It is possible that General Musharraf acted to pre-empt any dissension within the army ranks. With the November 15th court judgment expected against General Musharraf's presidential election, it is possible his generals were getting uncomfortable about his personalization of the political challenges before the country.
It would well be that the martial law might have staved off any possible attempts by nationalist inspired Generals within the army. One of the most difficult aspects to fathom will be the reaction of the command line generals who have not always felt comfortable with performing martial law duties. Even though since the times of General Zia ul Haq -- one of Mr. Musharraf's predecessors as army chief and president-by-coup -- the army was highly politicized, it cannot be guaranteed that these generals will follow the edict of a President and Chief of Army Staff who seems to be battling more for his life than for his country.
For Pakistan and the region this is a precarious and fragile moment, and martial laws may not be the solution. While dealing with the militants may seem easier by comparison, there is no doubt that the political drama that is unfolding will not end so easily.
General Musharraf has merely written out the first act of a drama the Pakistani public is well versed in, but as with all such dramas the audience has no loyalties. Sadly enough, with Ms. Bhutto'’s political juggling and Mr. Sharif fuming in Saudi Arabia as a "guest," the chances are that General Musharraf will have to have a head-on clash with political forces within the country and most likely within the army.
Only the next few weeks will tell us if the General has truly tottered and fallen. Until then, this past weekend's troubling developments will remain a precarious tangle in Pakistan’s sad political history of military meddling, Islamist maneuverings, and the shredding of the social order.
America may well lose a key ally in the region in its war against global terrorism. It is difficult not to despair about Pakistan's prospects. It is even more difficult bot to despair over the incipient possibility that America's enormous economic, military and political investment in Pakistan may well have been for nought.
Sher View: The General Totters
Being in the boots of General Pervez Musharraf is not one of the things many Pakistanis would desire, particularly right at this moment as he implements the suspension of the Constitution and imposes total military rule -- against the warning of the Bush Administration -- in one of America's longtime allies in the volatile South Asia region.
Faced with a possible Supreme Court judgment that would have gone against his Presidency, a controversial deal with former Prime Minister Benazir Bhutto, the bundling off of another former Prime Minister Nawaz Sharif, and the rising pressure of militants in his own backyard, clearly General Musharraf was and is a cornered man.
For the past year or so the military strongman clearly lost his touch, if not the political momentum: his handling of the firing of the Supreme Court Chief Justice and storming of the Lal (Red) Mosque barely 200 meters from the Military Intelligence Headquarters were more than mere embarrassments; they showed that the General did have a conspicuous chink in his armor.
While he tried a political foxtrot in the last few months favoring Benazir Bhutto to return in exchange for an amnesty on possible convictions against her on corruption charges -- presumably with an understanding from Ms. Bhutto that the General would remain as the President -- it was becoming clear that the General was not politically savvy about what he was getting himself into. His handling of sending Nawaz Sharif back into political exile in Saudi Arabia -- the country that had guaranteed Mr. Sharif not returning to Pakistan for at least ten years -- clearly showed that the General was picking his favorites among which political opponents would be permitted to come back home from abroad..
What happens next?
The Bush Administration -- which gave Pakistan more than $10 billion, mostly in military aid, since General Musharraf seized power in a bloodless coup in 1999 -- is scarcely pleased with what the General has donem It is more likely that the Europeans will take economically effective steps against Pakistan’s regime. The Americans will have to balance things given that Musharraf will use the martial law as the necessary weapon he needs to go after the militants of Al Qaeda and Taliban. With press freedoms curtailed or restricted, and military force rather than para-military rangers fighting the militants, his bet will be for quick results if Mr. Musharraf wants some semblance of acceptability in the White House again..
While it is possible that there will be mass political rallies against him in Pakistan -- a land of 177 million Muslims of many persuasions -- it is highly unlikely that General Musharraf and his generals will be as tolerant of street demonstrations as they were during the uproar over the Supreme Court Chief Justice's firing. Benazir Bhutto will perhaps come out of this politically for the worse, finding her deal with the General scuttled. And even though she was acquiring some kudos for speaking out against terrorism after the attack on her convoy upon her return to Pakistan from her exile in Dubai,, she will be hard pressed to prove that democracy was really her sole motive for returning to Pakistan.
The martial law and the General’s sudden about-face actually will favor Nawaz Sharif, who in exile with the Saudis as their "guest," is going to gain the most from this turn of events. It will help him all the more since it seems that the United States had pressed both the General and Benazir Bhutto to come to some understanding; I am told reliably that some American officials urged Musharraf not to undertake any discussions with Nawaz Sharif.
In the street politics of Pakistan this is a huge dividend that Mr. Sharif can encash as and when he wants.
It is possible that General Musharraf acted to pre-empt any dissension within the army ranks. With the November 15th court judgment expected against General Musharraf's presidential election, it is possible his generals were getting uncomfortable about his personalization of the political challenges before the country.
It would well be that the martial law might have staved off any possible attempts by nationalist inspired Generals within the army. One of the most difficult aspects to fathom will be the reaction of the command line generals who have not always felt comfortable with performing martial law duties. Even though since the times of General Zia ul Haq -- one of Mr. Musharraf's predecessors as army chief and president-by-coup -- the army was highly politicized, it cannot be guaranteed that these generals will follow the edict of a President and Chief of Army Staff who seems to be battling more for his life than for his country.
For Pakistan and the region this is a precarious and fragile moment, and martial laws may not be the solution. While dealing with the militants may seem easier by comparison, there is no doubt that the political drama that is unfolding will not end so easily.
General Musharraf has merely written out the first act of a drama the Pakistani public is well versed in, but as with all such dramas the audience has no loyalties. Sadly enough, with Ms. Bhutto'’s political juggling and Mr. Sharif fuming in Saudi Arabia as a "guest," the chances are that General Musharraf will have to have a head-on clash with political forces within the country and most likely within the army.
Only the next few weeks will tell us if the General has truly tottered and fallen. Until then, this past weekend's troubling developments will remain a precarious tangle in Pakistan’s sad political history of military meddling, Islamist maneuverings, and the shredding of the social order.
America may well lose a key ally in the region in its war against global terrorism. It is difficult not to despair about Pakistan's prospects. It is even more difficult bot to despair over the incipient possibility that America's enormous economic, military and political investment in Pakistan may well have been for nought.
Faced with a possible Supreme Court judgment that would have gone against his Presidency, a controversial deal with former Prime Minister Benazir Bhutto, the bundling off of another former Prime Minister Nawaz Sharif, and the rising pressure of militants in his own backyard, clearly General Musharraf was and is a cornered man.
For the past year or so the military strongman clearly lost his touch, if not the political momentum: his handling of the firing of the Supreme Court Chief Justice and storming of the Lal (Red) Mosque barely 200 meters from the Military Intelligence Headquarters were more than mere embarrassments; they showed that the General did have a conspicuous chink in his armor.
While he tried a political foxtrot in the last few months favoring Benazir Bhutto to return in exchange for an amnesty on possible convictions against her on corruption charges -- presumably with an understanding from Ms. Bhutto that the General would remain as the President -- it was becoming clear that the General was not politically savvy about what he was getting himself into. His handling of sending Nawaz Sharif back into political exile in Saudi Arabia -- the country that had guaranteed Mr. Sharif not returning to Pakistan for at least ten years -- clearly showed that the General was picking his favorites among which political opponents would be permitted to come back home from abroad..
What happens next?
The Bush Administration -- which gave Pakistan more than $10 billion, mostly in military aid, since General Musharraf seized power in a bloodless coup in 1999 -- is scarcely pleased with what the General has donem It is more likely that the Europeans will take economically effective steps against Pakistan’s regime. The Americans will have to balance things given that Musharraf will use the martial law as the necessary weapon he needs to go after the militants of Al Qaeda and Taliban. With press freedoms curtailed or restricted, and military force rather than para-military rangers fighting the militants, his bet will be for quick results if Mr. Musharraf wants some semblance of acceptability in the White House again..
While it is possible that there will be mass political rallies against him in Pakistan -- a land of 177 million Muslims of many persuasions -- it is highly unlikely that General Musharraf and his generals will be as tolerant of street demonstrations as they were during the uproar over the Supreme Court Chief Justice's firing. Benazir Bhutto will perhaps come out of this politically for the worse, finding her deal with the General scuttled. And even though she was acquiring some kudos for speaking out against terrorism after the attack on her convoy upon her return to Pakistan from her exile in Dubai,, she will be hard pressed to prove that democracy was really her sole motive for returning to Pakistan.
The martial law and the General’s sudden about-face actually will favor Nawaz Sharif, who in exile with the Saudis as their "guest," is going to gain the most from this turn of events. It will help him all the more since it seems that the United States had pressed both the General and Benazir Bhutto to come to some understanding; I am told reliably that some American officials urged Musharraf not to undertake any discussions with Nawaz Sharif.
In the street politics of Pakistan this is a huge dividend that Mr. Sharif can encash as and when he wants.
It is possible that General Musharraf acted to pre-empt any dissension within the army ranks. With the November 15th court judgment expected against General Musharraf's presidential election, it is possible his generals were getting uncomfortable about his personalization of the political challenges before the country.
It would well be that the martial law might have staved off any possible attempts by nationalist inspired Generals within the army. One of the most difficult aspects to fathom will be the reaction of the command line generals who have not always felt comfortable with performing martial law duties. Even though since the times of General Zia ul Haq -- one of Mr. Musharraf's predecessors as army chief and president-by-coup -- the army was highly politicized, it cannot be guaranteed that these generals will follow the edict of a President and Chief of Army Staff who seems to be battling more for his life than for his country.
For Pakistan and the region this is a precarious and fragile moment, and martial laws may not be the solution. While dealing with the militants may seem easier by comparison, there is no doubt that the political drama that is unfolding will not end so easily.
General Musharraf has merely written out the first act of a drama the Pakistani public is well versed in, but as with all such dramas the audience has no loyalties. Sadly enough, with Ms. Bhutto'’s political juggling and Mr. Sharif fuming in Saudi Arabia as a "guest," the chances are that General Musharraf will have to have a head-on clash with political forces within the country and most likely within the army.
Only the next few weeks will tell us if the General has truly tottered and fallen. Until then, this past weekend's troubling developments will remain a precarious tangle in Pakistan’s sad political history of military meddling, Islamist maneuverings, and the shredding of the social order.
America may well lose a key ally in the region in its war against global terrorism. It is difficult not to despair about Pakistan's prospects. It is even more difficult bot to despair over the incipient possibility that America's enormous economic, military and political investment in Pakistan may well have been for nought.
Wednesday, October 31, 2007
Sher Value: Alternative Energy
Back two decades ago there was a consensus that when oil prices were consistently above US$ 30 per barrel the move towards alternate energy would be spurned on to reach a commercially viable solution. Now with oil in the mid $80 range, and in my opinion set to eventually cross the $100 mark, it is surprising that alternate energy is not the hottest topic on the scene. Indeed a lot has been done in the past two decades and perhaps now we can see a major effort forward towards solar and other alternate forms of energy emerging on the market.
In the US work is underway for a 550 megawatt solar thermal generation plant in the Mojave Desert, which will provide power to over 400,000 homes. In addition Spain, Morocco, India, Iran and others have solar power generation projects underway, which produce anywhere from 30 MW to 354 MW of power. While such power plants will not be the suppliers for huge industrial consumers they will take the place of valuable conventional power generation. Just imagine if all the homes in UAE could get their power needs from alternate energy.
We also have to consider that sooner or later the use of nuclear energy will be a cleaner and more efficient way of mass power generation in the future. Thus it is not far from conceivable that in the coming years perhaps countries like UAE and Qatar will consider nuclear power plants to replace the conventional energy generation. This will mean that the current myopic view of nuclear energy will have to change, and with the right safeguards should actually be encouraged.
It is also clear that with the current concern for the environment and global warming the impetus for alternate energy sources will gather pace. It is inevitable that we will have to consider a wide variety of generation needs, and indeed the government should consider incentives for those businesses who deploy clean, safe and efficient alternate energy systems.
The current predictions are that solar power generation will become more efficient and while today it would cost 15 cents pr Kilowatt hour it is estimated that within a couple years, and as more systems are deployed, the cost will come down to 7 cents per KWh, making solar energy very competitive with the oil and gas fired traditional power generation technologies.
We are at the point where alternate energies can be sustainable and to do this we need to create an encouraging atmosphere and this where a major effort towards legislation and financial support should be considered. This is the right way forward and nothing could be more positive than an oil producing country to also embrace the idea of solar and other alternate forms of energy. Interestingly, UAE is making a commitment to go Green and also is one of the countries listed as the most suitable for generating solar energy. Lets do something about this.
In the US work is underway for a 550 megawatt solar thermal generation plant in the Mojave Desert, which will provide power to over 400,000 homes. In addition Spain, Morocco, India, Iran and others have solar power generation projects underway, which produce anywhere from 30 MW to 354 MW of power. While such power plants will not be the suppliers for huge industrial consumers they will take the place of valuable conventional power generation. Just imagine if all the homes in UAE could get their power needs from alternate energy.
We also have to consider that sooner or later the use of nuclear energy will be a cleaner and more efficient way of mass power generation in the future. Thus it is not far from conceivable that in the coming years perhaps countries like UAE and Qatar will consider nuclear power plants to replace the conventional energy generation. This will mean that the current myopic view of nuclear energy will have to change, and with the right safeguards should actually be encouraged.
It is also clear that with the current concern for the environment and global warming the impetus for alternate energy sources will gather pace. It is inevitable that we will have to consider a wide variety of generation needs, and indeed the government should consider incentives for those businesses who deploy clean, safe and efficient alternate energy systems.
The current predictions are that solar power generation will become more efficient and while today it would cost 15 cents pr Kilowatt hour it is estimated that within a couple years, and as more systems are deployed, the cost will come down to 7 cents per KWh, making solar energy very competitive with the oil and gas fired traditional power generation technologies.
We are at the point where alternate energies can be sustainable and to do this we need to create an encouraging atmosphere and this where a major effort towards legislation and financial support should be considered. This is the right way forward and nothing could be more positive than an oil producing country to also embrace the idea of solar and other alternate forms of energy. Interestingly, UAE is making a commitment to go Green and also is one of the countries listed as the most suitable for generating solar energy. Lets do something about this.
Tuesday, October 23, 2007
Sher View: Thinkers on Iraq.
I was recently fortunate, thanks to the brilliant organization skills of my friend Pranay Gupte, to meet with some of the delegates that attended the Festival of Thinkers in Abu Dhabi. While I am not personally prone to large 'festival' type functions where presumably 'thinking' would be the order of the day, I prefer the smaller five to six people around a table conversation, I was nevertheless quite fascinated that people were, rightfully so, concerned about the Iraq war and the region. I felt genuine concern for what is happening in the region and most of all there seemed a resonance of searching for a way out of the 'mess Mr. Bush and Co' have created.
After over 34,650 violent deaths in Iraq in 2006 alone, (averaging close to 100 per day) one has to wonder what indeed are the benefits of this entire episode. But calling it an episode would be a blatant understatement, and indeed one without any remorse or feeling. Iraq is a tragedy on a scale that will haunt Arab politics and, more importantly, the social fiber for decades to come. Beyond the bombed and mutilated bodies there is a bigger price to pay for a failed state. If Saddam Hussein created the failed state of Iraq through his ruthless dictatorship, the events after the invasion of Iraq have taken the concepts of a failed state to an art form.
Iraq's embroiling mess of blood and tears and endless tragedy is also a failure of Arab Leadership, who have silently watched the piecemeal destruction not only of the Baath political apparatus but the dismantling of society to the point where life for the common Iraqi is nothing but painfully fragile. While US policymakers have recently distracted the debate to Iran and its possible nuclear ambitions, which God only knows are well founded or not, the reality is being forgotten that an unstable Iraq is in nobody's interest, and least of all Iran's. However, Iranian leadership misguided as it is also is propped up more by American pressure to remove it than by its own 'wise' policies. So long as Ahmednijedad can stand up on center stage and be seen as standing up to the US, the system within Iran cannot change him for a more moderate leadership; that is how Iran works.
I was asked often, 'how does the US solve this mess?' I do not have an answer, I have some wild guesses, but clear cut answer through the smoke of gunpowder and killings is always next to impossible. I will, in respect to the illustrious names who asked me that question venture a guess.
Iraq needs stability and it needs Arabs to provide the stability. This means that the Arab leadership should consider, with US encouragement, the creation of an Arab or Muslim peace force to go in and replace all American and their allies in Iraq. In addition a format for a large government of national reconciliation be 'nominated' by the Arab League, to stir Iraq through this transition phase. This is the only possible solution till the domestic situation can be calmed down to the point where a modicum of stability and peace comes to the war torn country. This allows the US a withdrawal from the region, allows both the Arabs and the Iranians to take a stake in the stability and peace in their own backyard and atleast sets the path for some possibilities for peace.
After over 34,650 violent deaths in Iraq in 2006 alone, (averaging close to 100 per day) one has to wonder what indeed are the benefits of this entire episode. But calling it an episode would be a blatant understatement, and indeed one without any remorse or feeling. Iraq is a tragedy on a scale that will haunt Arab politics and, more importantly, the social fiber for decades to come. Beyond the bombed and mutilated bodies there is a bigger price to pay for a failed state. If Saddam Hussein created the failed state of Iraq through his ruthless dictatorship, the events after the invasion of Iraq have taken the concepts of a failed state to an art form.
Iraq's embroiling mess of blood and tears and endless tragedy is also a failure of Arab Leadership, who have silently watched the piecemeal destruction not only of the Baath political apparatus but the dismantling of society to the point where life for the common Iraqi is nothing but painfully fragile. While US policymakers have recently distracted the debate to Iran and its possible nuclear ambitions, which God only knows are well founded or not, the reality is being forgotten that an unstable Iraq is in nobody's interest, and least of all Iran's. However, Iranian leadership misguided as it is also is propped up more by American pressure to remove it than by its own 'wise' policies. So long as Ahmednijedad can stand up on center stage and be seen as standing up to the US, the system within Iran cannot change him for a more moderate leadership; that is how Iran works.
I was asked often, 'how does the US solve this mess?' I do not have an answer, I have some wild guesses, but clear cut answer through the smoke of gunpowder and killings is always next to impossible. I will, in respect to the illustrious names who asked me that question venture a guess.
Iraq needs stability and it needs Arabs to provide the stability. This means that the Arab leadership should consider, with US encouragement, the creation of an Arab or Muslim peace force to go in and replace all American and their allies in Iraq. In addition a format for a large government of national reconciliation be 'nominated' by the Arab League, to stir Iraq through this transition phase. This is the only possible solution till the domestic situation can be calmed down to the point where a modicum of stability and peace comes to the war torn country. This allows the US a withdrawal from the region, allows both the Arabs and the Iranians to take a stake in the stability and peace in their own backyard and atleast sets the path for some possibilities for peace.
Monday, October 22, 2007
Sher Value: Thought and Action
As the ink on these pages begins to dry out, hundreds of delegates to the Festival of Thinkers will have commenced the proceedings of the gathering, which brings together Nobel Laureates, powerful media personalities and people who have made a difference. While the Festival of Thinkers conjures the image of a hall full of people sitting in exaggerated poses, hand under chin, contemplating and pondering, the reality is that it sets a wonderful stage for bringing together people on a platform from where if nothing, understanding will emerge.
We do live in a fragile world, where issues from global warming to man made political disasters are threatening large populations of humanity. There is a greater effort being made to destroy what humanity has rather than build something for the future. It is therefore all the more important that efforts like this Festival serve not only as a platform for bringing people together for discussions, but also to move the mind set into action, into creating concrete accountable action plans for change.
Today there are hundreds of alliances and foundations for bringing change and welfare to humanity and earth, and they all are carving out a nice, positive role. What we need to consider is to move the envelope of experience further out, and think of such a platform as the Festival of Thinkers to become the aggregator of these alliances under a banner of ‘humane thought’. Such a collective will serve a huge purpose to aggregate alliances, charities and foundations to bring about structural changes in the body of society and economic and eco systems to allow for sustainable recovery. The most vital element today is coordinating the efforts of so many noble minded alliances and charities into a concerted policy of action .
Some years back I recall with the earthquake in Pakistan there were tons of agencies, charities and foundations pouring in aid, and resources to help in the earthquake devastated areas but it cannot be over looked that a large number of these relief efforts were actually duplicating themselves, causing actually a waste in the system of care. The Festival therefore allows people of a diverse range of cultures, educations and attitudes to sit together an work out an agenda of social change which will be followed up and not merely left behind on the delegates tables to be cleaned out the next day.
We live in a world where we need understanding, compassion and empathy. We need to understand why we have, mostly in the past 100 years, undone the quality of life that our future generations could have enjoyed. We have to pause at this moment and create the synergy that is needed between thought, business and compassion. Our model of tomorrow cannot be politically utilitarian; neither can it be economically and socially myopic because the results of these will be catastrophic. A Festival of Thinkers must create an idiom of thought which will force us to make a difference.
We do live in a fragile world, where issues from global warming to man made political disasters are threatening large populations of humanity. There is a greater effort being made to destroy what humanity has rather than build something for the future. It is therefore all the more important that efforts like this Festival serve not only as a platform for bringing people together for discussions, but also to move the mind set into action, into creating concrete accountable action plans for change.
Today there are hundreds of alliances and foundations for bringing change and welfare to humanity and earth, and they all are carving out a nice, positive role. What we need to consider is to move the envelope of experience further out, and think of such a platform as the Festival of Thinkers to become the aggregator of these alliances under a banner of ‘humane thought’. Such a collective will serve a huge purpose to aggregate alliances, charities and foundations to bring about structural changes in the body of society and economic and eco systems to allow for sustainable recovery. The most vital element today is coordinating the efforts of so many noble minded alliances and charities into a concerted policy of action .
Some years back I recall with the earthquake in Pakistan there were tons of agencies, charities and foundations pouring in aid, and resources to help in the earthquake devastated areas but it cannot be over looked that a large number of these relief efforts were actually duplicating themselves, causing actually a waste in the system of care. The Festival therefore allows people of a diverse range of cultures, educations and attitudes to sit together an work out an agenda of social change which will be followed up and not merely left behind on the delegates tables to be cleaned out the next day.
We live in a world where we need understanding, compassion and empathy. We need to understand why we have, mostly in the past 100 years, undone the quality of life that our future generations could have enjoyed. We have to pause at this moment and create the synergy that is needed between thought, business and compassion. Our model of tomorrow cannot be politically utilitarian; neither can it be economically and socially myopic because the results of these will be catastrophic. A Festival of Thinkers must create an idiom of thought which will force us to make a difference.
Sunday, October 7, 2007
Sher Value: Good Business or Bad Business?
Living in an ever shrinking world we are no longer isolated from the events that happens miles away. The famines of Africa, the effects of the Tsunami, the plight of children around the world, are all now in our face, and thanks to some TV channels, 24 hours a day. This is truly the ‘nano-second’ age and in such and age there are two options; either do something, or simply turn off the TV.
Over a decade ago, as a young CEO of a bank I was asked as to the reasons the bank supported causes like the WWF, the Arabian Leopard Trust, MSF and many others, and I recall saying if business cannot accept a social agenda for the betterment of people and earth then its not good business. I recall it was around 1992 when I had said that and most other CEO’s called to tell me I was losing the plot of running a bank. Perhaps plots are meant to be lost, perhaps we need a vision to make a difference.
Both Dubai and Abu Dhabi have launched high profile drives to raise money, and more importantly, awareness, to causes that concern the human condition. While Dubai had started a program of care towards education around the world, Abu Dhabi has taken up the challenge of a broader format, and in both cases the response from the public has been over whelming. I read somewhere that the US government spends over US$ 1 billion at the Pentagon a DAY! Now factor that into health and education around the world and instead of swords we create pens and clinics, I have no doubt the world will not only be a better place but a safer place.
So then why is the message of ‘good business’ so hard to get, because simply put it is putting your profits into social good which in turn brings you more expansion as the market place becomes better and vibrant. Perhaps because the near term gain is more important, cutting down forests for a profit seems better to some then perhaps creating forests that will replace what we mow down.
Indeed man has wrecked more havoc on man himself than nature and in it bad business, has never played a glorious role other than to further its own cause. The resulting impact has been that only now the big business companies are beginning to become ‘energy companies’ rather than simply ‘oil companies’ and with oil at $80 a barrel alternate energy and clean energy becomes an item on their agenda.
Then there is the bad business of governments, where conscious is abandoned for gain, where India’s oil minister signs three oil explorations contracts with the Burmese military junta the same day the streets are filled with Buddhist monks being shot at, where the issues of climate change are pushed aside into the rubbish pile where other agendas of social change lay buried. Good business and good government are getting together to make a difference and that’s the good news.
Over a decade ago, as a young CEO of a bank I was asked as to the reasons the bank supported causes like the WWF, the Arabian Leopard Trust, MSF and many others, and I recall saying if business cannot accept a social agenda for the betterment of people and earth then its not good business. I recall it was around 1992 when I had said that and most other CEO’s called to tell me I was losing the plot of running a bank. Perhaps plots are meant to be lost, perhaps we need a vision to make a difference.
Both Dubai and Abu Dhabi have launched high profile drives to raise money, and more importantly, awareness, to causes that concern the human condition. While Dubai had started a program of care towards education around the world, Abu Dhabi has taken up the challenge of a broader format, and in both cases the response from the public has been over whelming. I read somewhere that the US government spends over US$ 1 billion at the Pentagon a DAY! Now factor that into health and education around the world and instead of swords we create pens and clinics, I have no doubt the world will not only be a better place but a safer place.
So then why is the message of ‘good business’ so hard to get, because simply put it is putting your profits into social good which in turn brings you more expansion as the market place becomes better and vibrant. Perhaps because the near term gain is more important, cutting down forests for a profit seems better to some then perhaps creating forests that will replace what we mow down.
Indeed man has wrecked more havoc on man himself than nature and in it bad business, has never played a glorious role other than to further its own cause. The resulting impact has been that only now the big business companies are beginning to become ‘energy companies’ rather than simply ‘oil companies’ and with oil at $80 a barrel alternate energy and clean energy becomes an item on their agenda.
Then there is the bad business of governments, where conscious is abandoned for gain, where India’s oil minister signs three oil explorations contracts with the Burmese military junta the same day the streets are filled with Buddhist monks being shot at, where the issues of climate change are pushed aside into the rubbish pile where other agendas of social change lay buried. Good business and good government are getting together to make a difference and that’s the good news.
Friday, October 5, 2007
Sher View: Burma is India's Litmus Test
India has always celebrated its successes, as indeed would many countries, both in its domestic and foreign policy, around the principles of democracy, secularism and Mathama Ghandi's principles of non violence. While India today boasts of its secular ideals, and perhaps rightly so, it has sadly betrayed Ghandi's adherence to non violence in its support for the military Junta in Myanmar (Burma). On September 23, 2007 as demonstrators were gathering in Rangoon and other cities, Indian minister for oil was in Myanmar signing three agreements on oil exploration and quite blatantly ignoring the uprising of the monks without making a single reference to the trouble on his return home.
Today India runs a trade surplus of US$400 million with Burma, largely made up through the export of military hardware and ammunition. Faced with growing influence of China with the Myanmar regime, India, ten years ago, commenced it policy of engagement with the regime in Myanmar. While China, being a non democratic country can be expected to do no better, but India? Interestingly the Indian press and public support the pro democracy movement, a fact that the Indian government continues to ignore.
India cannot go on sitting on the sidelines and ignore the role it must play in bringing about change in a country where guns and ammunition supplied by New Delhi are mowing down peace loving Buddhist monks. It is time for a change in policy and it is clear that unless China and India do not change their policy on Burma, the chances are that there is little than the world community can do to help the pro democracy movement. While changing perceptions and policy is China are next to impossible, India on the other hand as a conscious to answer for, a conscious that seems woefully lost on its own leadership.
Today India runs a trade surplus of US$400 million with Burma, largely made up through the export of military hardware and ammunition. Faced with growing influence of China with the Myanmar regime, India, ten years ago, commenced it policy of engagement with the regime in Myanmar. While China, being a non democratic country can be expected to do no better, but India? Interestingly the Indian press and public support the pro democracy movement, a fact that the Indian government continues to ignore.
India cannot go on sitting on the sidelines and ignore the role it must play in bringing about change in a country where guns and ammunition supplied by New Delhi are mowing down peace loving Buddhist monks. It is time for a change in policy and it is clear that unless China and India do not change their policy on Burma, the chances are that there is little than the world community can do to help the pro democracy movement. While changing perceptions and policy is China are next to impossible, India on the other hand as a conscious to answer for, a conscious that seems woefully lost on its own leadership.
Tuesday, October 2, 2007
Sher Value: The Pressure of Growth
Growing an economy and expansion are the hallmarks of a successful business model and indeed in this sense the UAE has set a wonderful example. As skyscrapers move even higher into the stratosphere, and new hotels pop up with the regularity that is almost predictable there is a perceptible pressure for services building up. While this is inevitable that service standards do suffer through an expansion phase of an economy, good planning should, generally speaking, rid one self of the complain of bad service. However, the adherence to quality is more a buzzword and it is becoming appalling to see how a lax attitude has come into some of the service sector, to the point where the customer does not matter.
A 30 day wait to get an internet connection in the Jumairah area, a 15 minute hold on the phone to make a claim, a 10 day wait to get the simplest information back from a bank, or indeed a 30 minute lapse for a cup of coffee changes the meaning of the phrase ‘instant coffee’. There is no denying that growth in the country has stretched the resource side of the market to the point where it is more than strained, but then where were the planners, the trainers, the human resource specialists all planning for the boom?
There are three distinct phases of the process; design build and operate, and it is at the latter part of his process that the model is beginning to fall off the seams. What is surprising is that this is happening at all the scales of the economic spectrum, so bad service is as common with the major telecom company, as it is with a coffee shop on Sh Zayed road. Why isn’t anyone doing something about it? Well simply put the business is already too good, so if a few customers go to bed complaining about things then so what as there are enough waiting in the sidelines. This is indeed the worse possible thinking in a situation like the one we are currently faced with.
Here are my suggestions; stop all Quality Awards immediately because companies that have already won the award have little interest in quality and the ones who have not won it really seem more caught up in making money rather than being ‘good’. Secondly it is high time that a customer care system is put in place to deal with complaints and please given them enough operators so that phone is atleast answered.
The country is on the cutting edge of the financial and service sector and needs to compete and needs to renew its pledge for service. This can only be achieved if there is a clear cut recognition that we currently have a problem of deteriorating service and attention to detail and this is hurting the image of the country. Too much has been invested into the country for a brighter future to let a bad service at one point of contact with clients to tarnish that image. Things need to be fixed and fast!!!
A 30 day wait to get an internet connection in the Jumairah area, a 15 minute hold on the phone to make a claim, a 10 day wait to get the simplest information back from a bank, or indeed a 30 minute lapse for a cup of coffee changes the meaning of the phrase ‘instant coffee’. There is no denying that growth in the country has stretched the resource side of the market to the point where it is more than strained, but then where were the planners, the trainers, the human resource specialists all planning for the boom?
There are three distinct phases of the process; design build and operate, and it is at the latter part of his process that the model is beginning to fall off the seams. What is surprising is that this is happening at all the scales of the economic spectrum, so bad service is as common with the major telecom company, as it is with a coffee shop on Sh Zayed road. Why isn’t anyone doing something about it? Well simply put the business is already too good, so if a few customers go to bed complaining about things then so what as there are enough waiting in the sidelines. This is indeed the worse possible thinking in a situation like the one we are currently faced with.
Here are my suggestions; stop all Quality Awards immediately because companies that have already won the award have little interest in quality and the ones who have not won it really seem more caught up in making money rather than being ‘good’. Secondly it is high time that a customer care system is put in place to deal with complaints and please given them enough operators so that phone is atleast answered.
The country is on the cutting edge of the financial and service sector and needs to compete and needs to renew its pledge for service. This can only be achieved if there is a clear cut recognition that we currently have a problem of deteriorating service and attention to detail and this is hurting the image of the country. Too much has been invested into the country for a brighter future to let a bad service at one point of contact with clients to tarnish that image. Things need to be fixed and fast!!!
Tuesday, September 25, 2007
Sher Value: An elegant end.
Just when we thought we are going to be in for a long fight the tables turned neatly with the announcement that Borse Dubai and Nasdaq had arrived at a settlement where by after the purchase of OMX, Borse Dubai will swap all the stock for a stake in both NASDAQ and the London Stock Exchange. In a sense it clearly shows that the spirit of compromise was there on the side of Dubai and that its interest in OMX was not so much about controlling all the stock but to consider viable investments, irrespective of the size of the shareholding. From Borse Dubai’s perspective that is important is that with this deal they get 20% of NASDAQ shares and 25% of LSE stocks, which are significant shareholdings in the exchanges.
The announcement has barely hit the airwaves when there was noise about the ‘implications’ of this deal on ‘US security’. Some have argued that this is reminiscent of the DP World’s take over of P&O which resulted in 6 US ports being owned by DP World and what followed was an over exaggerated drama on security and others aspects. In the end the 6 ports management was sold off to other operators allowing the P&O deal to continue. Senate Banking Committee Chairman Christopher Dodd called for a ‘careful review’ to ensure that there are no security implications from the deal whereby Borse Dubai owns 20% of a US stock exchange.
I find politicians to not only be naïve but also seriously myopic. The honorable Chairman Dodd should ask for the foreign holdings report from the US Treasury department, and indeed he will realize that a 20% stake in their stock exchange is the least of the issues. Foreign Holdings of US treasury debt have increased by 50% between 2003 and 2006. In addition more than half the US current account deficit is funded by foreign government purchases of US Securities(US$448 billion in 2006). Between China, Japan and the Arab oil producing countries they hold 60% of US securities and any decision by them to reduce these holdings will cause a serious damage to the US financial system.
NASDAQ is a US$ 4 billion market cap company, hardly the sort that would cause a national catastrophe if 20% of NASDAQ is owned by Borse Dubai. Indeed as President Bush said a review of the deal is needed and Democratic leader Nancy Pelosi call the deal as being different from the ports deal and more a ‘marketplace’ issue and nothing else.
The hawks in Capitol Hill should be careful about raising the hysteria level too much on what is a simple financial transaction. Let me assure you that a 20% stake cannot do any harm to US security as it does not even give the new shareholder the power to appoint a doorman at the exchange entrance. The vulnerability of the US financial system is through the foreign holdings and more a result of economic weaknesses, as indeed a continuing slide of the US dollar makes the investments for foreigners less attractive. So stop worrying about friends buying some stock.
The announcement has barely hit the airwaves when there was noise about the ‘implications’ of this deal on ‘US security’. Some have argued that this is reminiscent of the DP World’s take over of P&O which resulted in 6 US ports being owned by DP World and what followed was an over exaggerated drama on security and others aspects. In the end the 6 ports management was sold off to other operators allowing the P&O deal to continue. Senate Banking Committee Chairman Christopher Dodd called for a ‘careful review’ to ensure that there are no security implications from the deal whereby Borse Dubai owns 20% of a US stock exchange.
I find politicians to not only be naïve but also seriously myopic. The honorable Chairman Dodd should ask for the foreign holdings report from the US Treasury department, and indeed he will realize that a 20% stake in their stock exchange is the least of the issues. Foreign Holdings of US treasury debt have increased by 50% between 2003 and 2006. In addition more than half the US current account deficit is funded by foreign government purchases of US Securities(US$448 billion in 2006). Between China, Japan and the Arab oil producing countries they hold 60% of US securities and any decision by them to reduce these holdings will cause a serious damage to the US financial system.
NASDAQ is a US$ 4 billion market cap company, hardly the sort that would cause a national catastrophe if 20% of NASDAQ is owned by Borse Dubai. Indeed as President Bush said a review of the deal is needed and Democratic leader Nancy Pelosi call the deal as being different from the ports deal and more a ‘marketplace’ issue and nothing else.
The hawks in Capitol Hill should be careful about raising the hysteria level too much on what is a simple financial transaction. Let me assure you that a 20% stake cannot do any harm to US security as it does not even give the new shareholder the power to appoint a doorman at the exchange entrance. The vulnerability of the US financial system is through the foreign holdings and more a result of economic weaknesses, as indeed a continuing slide of the US dollar makes the investments for foreigners less attractive. So stop worrying about friends buying some stock.
Tuesday, September 18, 2007
Sher Value: OMX bid
In the long history of bidding wars, the OMX issue will eventually go down as just another bid. However, the detail in the fine line is always difficult to read; quite simply NASDAQ, the US exchange, bid $3.7 billion for OMX the Nordic exchange. A few days later Borse Dubai bid $4 billion all cash for OMX, in comparison to the partial cash, partial stock deal of NASDAQ. I am no rocket scientist but clearly the Borse Dubai deal is better, but the surprise is that the management of OMX led by Magnus Boecker have seemingly thrown in their lot with the NASDAQ bid.
First of all the rules of any bid are that the management of the company does not take sides. Secondly, it would seem that the NASDAQ proposal is for Mr. Boecker to the chairman of the combined company that will be created by the NASDAQ-OMX combination. Mostly importantly, the NASDAQ bid also assures the senior management will be given generous pay rises which are built into the plan that NASDAQ has submitted for the combined company.
In the most lenient analysis one cannot escape the fact that management is being bribed by the offer, and clearly it is in their interests to work against the Borse Dubai bid for the company irrespective of the merits of the case. The Wallenberg family, who own 10% of the OMX stock have also joined the fray with comments indicating that the NASDAQ bid might actually be higher when analyzed compared to the Borse Dubai bid! This I must see because the NASDAQ offer in August included a swap of stock of 0.502 stock of NASDAQ for each OMX share that are ofcourse susceptible to the vagaries of the stock market. Nevertheless to say that $3.7 billion is more than $4 billion is not the sort of thing that one’s math teacher will be very proud off.
We also have to consider the argument that a transatlantic link up for OMX is better than a link with the markets in Dubai. NASDAQ’s bid comes on the heals of its failed bid for the London Stock Exchange, and increasing pressure from changes to the way securities are being traded in the US, i.e. the proposed Goldman Sachs ‘single dealer platform’ which will drive exchange driven benefits more into a seamless electronic trading environment. But then this could all be an ego trip for Bob Greifeld, the CEO of NASDAQ who loves to battle; just consider the recent move to block LSE from issuing new stock to funds LSE’s proposed take over of Borsa Italiana.
Compare the conduct of NASDAQ as it battles at home, goes nasty after a failed bid for LSE and then basically is offering silver spoons to the management of an exchange it is trying to take over.
In contrast for OMX the opportunities that come from joining one of the most dynamic financial plays of modern history cannot be under estimated. In the first instance the liquidity that comes from the Gulf and through Dubai is phenomenal and through my days as a banker I know that fund managers love investments coming from this region. What OMX will find is a new doorway opens to them, rather than enter portals into the US market that are frankly well traversed and over valued. Yet I would close on the note that NASDAQ doesn’t fight clean, but were it another other competitor than Brose Dubai, who don’t like ugly battles, the chances are Bob and Boeckr would find themselves fighting legal battles for what is essentially a pay off to management.
First of all the rules of any bid are that the management of the company does not take sides. Secondly, it would seem that the NASDAQ proposal is for Mr. Boecker to the chairman of the combined company that will be created by the NASDAQ-OMX combination. Mostly importantly, the NASDAQ bid also assures the senior management will be given generous pay rises which are built into the plan that NASDAQ has submitted for the combined company.
In the most lenient analysis one cannot escape the fact that management is being bribed by the offer, and clearly it is in their interests to work against the Borse Dubai bid for the company irrespective of the merits of the case. The Wallenberg family, who own 10% of the OMX stock have also joined the fray with comments indicating that the NASDAQ bid might actually be higher when analyzed compared to the Borse Dubai bid! This I must see because the NASDAQ offer in August included a swap of stock of 0.502 stock of NASDAQ for each OMX share that are ofcourse susceptible to the vagaries of the stock market. Nevertheless to say that $3.7 billion is more than $4 billion is not the sort of thing that one’s math teacher will be very proud off.
We also have to consider the argument that a transatlantic link up for OMX is better than a link with the markets in Dubai. NASDAQ’s bid comes on the heals of its failed bid for the London Stock Exchange, and increasing pressure from changes to the way securities are being traded in the US, i.e. the proposed Goldman Sachs ‘single dealer platform’ which will drive exchange driven benefits more into a seamless electronic trading environment. But then this could all be an ego trip for Bob Greifeld, the CEO of NASDAQ who loves to battle; just consider the recent move to block LSE from issuing new stock to funds LSE’s proposed take over of Borsa Italiana.
Compare the conduct of NASDAQ as it battles at home, goes nasty after a failed bid for LSE and then basically is offering silver spoons to the management of an exchange it is trying to take over.
In contrast for OMX the opportunities that come from joining one of the most dynamic financial plays of modern history cannot be under estimated. In the first instance the liquidity that comes from the Gulf and through Dubai is phenomenal and through my days as a banker I know that fund managers love investments coming from this region. What OMX will find is a new doorway opens to them, rather than enter portals into the US market that are frankly well traversed and over valued. Yet I would close on the note that NASDAQ doesn’t fight clean, but were it another other competitor than Brose Dubai, who don’t like ugly battles, the chances are Bob and Boeckr would find themselves fighting legal battles for what is essentially a pay off to management.
Saturday, September 8, 2007
Sher Value: Inflation Monster
We all, without exception, love growth, it symbolizes that we are doing something positive and the benefits of our policies and hard work are bearing fruit. However, as most economists will tell you, growth comes with its challenges and pitfalls. Some of these can be faced through good fiscal and monetary policy and others can be dealt with in terms of a strategic framework, while not all risks from hyper growth can be mitigated, there is little denying that a good framework is usually a good thing to have.
UAE has been experiencing phenomenal growth, with oil prices having averaged close to US$ 60 per barrel for over a year, a massive expansion in the real estate sector, the growth of banking, hospitality and services all abode well for the future. With growth, usually comes the competition of money seeking those goods and services which become more dear resulting in inflation. Classically, the best way to fight inflation is to have a proactive monetary policy, where indicators are watched and action is taken prior to inflation becoming a chronic problem for growth. Central bank regulators usually balance the needs of economic growth by a variety of measures, the most common and perhaps effective, being the use of interest rates and money supply to either spurt the economy on or rein in too much money supply.
However, for the UAE its linkage to the US dollar creates a unique set of issues, most of which being that while domestic growth has been robust, the UAE Dihram has slid by over 15% last year against the Euro alone on account of the UAE Dihram being pegged to the US Dollar. In addition, while not explicitly stated, UAE interest rate policy closely reflects the movements in the US interest rates creating a dichotomy.
Take the current situation, the US needs to get out of a credit crunch and hence has to make lending easier and provide liquidity to the markets by lowering interest rates. UAE on the other hand had to rein in money supply and curb inflation for which it would typically increase interest rates! While it is commonly stated that a delinking for the US Dollar would reduce the value of UAE’s exports (mostly in dollars) and its investments, (also mostly held in dollars) these adjustments would be notional and allow the UAE to either let its currency float (not recommended by me as it needs active monetary management) or to adjust the peg against the dollar. Ideally, I hae argued that the UAE should create a basket of currencies and adjust its rate against the basket on a regular basis. This will also mean that the UAE Central Bank will have to play a more active part in issuing longer term treasuries to soak in the liquidity and redeem them when it needs to provide liquidity.
UAE, as an economy, is dynamic, robust and becoming more integral to the world capital markets and it has to move away from reactive financial management to a more proactive model. Growth is a great story around the dinner table and something we have to be proud of, but inflation is a pretty stubborn customer that could upset the apple cart.
UAE has been experiencing phenomenal growth, with oil prices having averaged close to US$ 60 per barrel for over a year, a massive expansion in the real estate sector, the growth of banking, hospitality and services all abode well for the future. With growth, usually comes the competition of money seeking those goods and services which become more dear resulting in inflation. Classically, the best way to fight inflation is to have a proactive monetary policy, where indicators are watched and action is taken prior to inflation becoming a chronic problem for growth. Central bank regulators usually balance the needs of economic growth by a variety of measures, the most common and perhaps effective, being the use of interest rates and money supply to either spurt the economy on or rein in too much money supply.
However, for the UAE its linkage to the US dollar creates a unique set of issues, most of which being that while domestic growth has been robust, the UAE Dihram has slid by over 15% last year against the Euro alone on account of the UAE Dihram being pegged to the US Dollar. In addition, while not explicitly stated, UAE interest rate policy closely reflects the movements in the US interest rates creating a dichotomy.
Take the current situation, the US needs to get out of a credit crunch and hence has to make lending easier and provide liquidity to the markets by lowering interest rates. UAE on the other hand had to rein in money supply and curb inflation for which it would typically increase interest rates! While it is commonly stated that a delinking for the US Dollar would reduce the value of UAE’s exports (mostly in dollars) and its investments, (also mostly held in dollars) these adjustments would be notional and allow the UAE to either let its currency float (not recommended by me as it needs active monetary management) or to adjust the peg against the dollar. Ideally, I hae argued that the UAE should create a basket of currencies and adjust its rate against the basket on a regular basis. This will also mean that the UAE Central Bank will have to play a more active part in issuing longer term treasuries to soak in the liquidity and redeem them when it needs to provide liquidity.
UAE, as an economy, is dynamic, robust and becoming more integral to the world capital markets and it has to move away from reactive financial management to a more proactive model. Growth is a great story around the dinner table and something we have to be proud of, but inflation is a pretty stubborn customer that could upset the apple cart.
Tuesday, August 28, 2007
Sher Value: Labor Issues
Over the past week Al Jazeera International has being running a program on the issues of migrant labor and while investigative and issue provoking the recommendations are more implied than clearly stated. Indeed for the GCC countries issues of migrant labor are becoming important and this is an issue that the media, especially in the West seem to be catching on to. This does not suggest that all matters related to labor are fine, but in my opinion, if you are to discuss an issue the please also recommend what can be done to improve things.
I do feel that labor conditions will be a major issue within the realm of the media and various interested parties in the next few months. On the back of this attention there are some who are not making distinction between state sponsored exploitation of migrant workers and the breaking of laws by private companies. I do believe that GCC countries are concerned about labor issues and I know from being here in UAE that this is a matter of concern to the government. Over the years a number of measures have been taken to improve the situation and I understand that in the coming months the scrutiny on labor camps will become more focused.
However, a large number of the abuses start before the migrant worker has even arrived here. Many workers will tell you of the huge amounts of money they pay agents in their home countries prior to them even getting on the plane. In many cases, if not all, the agents are charging the worker for services, i.e. health checks, tickets, approvals and the visa cost, for which the employer in the GCC country has already paid the agent.
Thus the worker arrives into the country to work with a huge debt burden on his head, at times equal to a full years wages. This is perhaps the most pressing stress on his mind and results not only in depression but in many cases an acceptance of some harsh conditions knowing that he has not other option. There are a number of measures that need to be taken by all countries to fix these issues. Here are some of my recommendations:
Create an intra-governmental NGO comprising of GCC countries and countries from where the major work force comes. This NGO will be empowered with bringing about changes in laws on both sides that will help the workers.
Impose punitive fines and punishment on employers and agents who violate the laws, and this should be transparent and without exception.
Enact minimum wage legislation immediately.
Create a special insurance and pension fund for workers to which governments and employers will contribute, with the aim that when the workers retire they have a meaningful financial investment.
Improve the living conditions for workers and make it mandatory for companies to bring care for their workers.
It is important that these measures are enacted immediately and done so in a fully transparent manner. The problem is that the intent of the government is there it just needs to be given more teeth.
I do feel that labor conditions will be a major issue within the realm of the media and various interested parties in the next few months. On the back of this attention there are some who are not making distinction between state sponsored exploitation of migrant workers and the breaking of laws by private companies. I do believe that GCC countries are concerned about labor issues and I know from being here in UAE that this is a matter of concern to the government. Over the years a number of measures have been taken to improve the situation and I understand that in the coming months the scrutiny on labor camps will become more focused.
However, a large number of the abuses start before the migrant worker has even arrived here. Many workers will tell you of the huge amounts of money they pay agents in their home countries prior to them even getting on the plane. In many cases, if not all, the agents are charging the worker for services, i.e. health checks, tickets, approvals and the visa cost, for which the employer in the GCC country has already paid the agent.
Thus the worker arrives into the country to work with a huge debt burden on his head, at times equal to a full years wages. This is perhaps the most pressing stress on his mind and results not only in depression but in many cases an acceptance of some harsh conditions knowing that he has not other option. There are a number of measures that need to be taken by all countries to fix these issues. Here are some of my recommendations:
Create an intra-governmental NGO comprising of GCC countries and countries from where the major work force comes. This NGO will be empowered with bringing about changes in laws on both sides that will help the workers.
Impose punitive fines and punishment on employers and agents who violate the laws, and this should be transparent and without exception.
Enact minimum wage legislation immediately.
Create a special insurance and pension fund for workers to which governments and employers will contribute, with the aim that when the workers retire they have a meaningful financial investment.
Improve the living conditions for workers and make it mandatory for companies to bring care for their workers.
It is important that these measures are enacted immediately and done so in a fully transparent manner. The problem is that the intent of the government is there it just needs to be given more teeth.
Monday, August 20, 2007
Sher Value: Bringing Meaning into the company
As I am planning to join the ranks of motivational speakers I am doing a fair bit if research and some interesting pieces of information are, ofcourse, popping up. However, the more I am digging into the heart of corporate culture and as a consequence, the nature of humans in management I believe some startling revelations surface.
In the first place examining 15 corporate mission statements for companies in the region I was shocked at the way each has used words that either they don’t understand, or words they preached but never really implement. Superlatives such as ‘excellence’ ‘quality’ ‘care’ and others are dropped with such continuity that it is almost as if the proponents of those words in the vision statements of companies want to believe them also.
When one observes the business leaders of these companies with such super vision companies sooner or later, usually before the 15th minute, they have either contradicted themselves or, more commonly, contradicted the very vision statement that they have so eagerly professed on glossy 300 gram paper. In a few cases if one were to refer to the vision statement of the same company as the business leader of the company and without telling him or her you quote from their own vision it is more likely that the business person will not have picked up you were referring to their, not your, vision statement.
Why does this happen?
A variety of reasons but principally a great deal of them believe in the management hype but not the content of the message. In a great number of cases the vision statement was either drafted by a wordsmith from a public relations company or by the coterie around the business leader without the rank and file of the company being involved. In some disastrous cases the by lines of the corporate brand were developed by a marketing and branding company who really have done nothing other than play with words.
The ethos of a company has to be reflected into the communication strategy and not that first the brand tag lines are ‘invented’ and then ‘owned’ by the company. Great companies learn to deliver what they promise, and deliver day in and day out without exception. Companies like Jetblue airways, the low fare airline that created a buzz, have a work ethic that seeps from the top down which shows the care they put in. David Neeleman, the founder and Chairman of JetBlue Airways flies each week on the airline so he can speak to the customers and he lead question is ‘what can we do to improve things?’
More importantly the company operations team each month will deconstruct each delay and examine the reasons for it and what could have been done for the passenger to improve things. The airline has the second best punctuality record of the airlines in the US. The policy on arrival is that within 20 minutes the baggage should be in the hand of the passenger. ‘Give him a 45 minute wait after a one hour flight and that is the last thing he will remember.’ Neeleman knows most of his employees by their first name and drives himself, no fancy cars and a drummed down lifestyle.
Lets learn.
In the first place examining 15 corporate mission statements for companies in the region I was shocked at the way each has used words that either they don’t understand, or words they preached but never really implement. Superlatives such as ‘excellence’ ‘quality’ ‘care’ and others are dropped with such continuity that it is almost as if the proponents of those words in the vision statements of companies want to believe them also.
When one observes the business leaders of these companies with such super vision companies sooner or later, usually before the 15th minute, they have either contradicted themselves or, more commonly, contradicted the very vision statement that they have so eagerly professed on glossy 300 gram paper. In a few cases if one were to refer to the vision statement of the same company as the business leader of the company and without telling him or her you quote from their own vision it is more likely that the business person will not have picked up you were referring to their, not your, vision statement.
Why does this happen?
A variety of reasons but principally a great deal of them believe in the management hype but not the content of the message. In a great number of cases the vision statement was either drafted by a wordsmith from a public relations company or by the coterie around the business leader without the rank and file of the company being involved. In some disastrous cases the by lines of the corporate brand were developed by a marketing and branding company who really have done nothing other than play with words.
The ethos of a company has to be reflected into the communication strategy and not that first the brand tag lines are ‘invented’ and then ‘owned’ by the company. Great companies learn to deliver what they promise, and deliver day in and day out without exception. Companies like Jetblue airways, the low fare airline that created a buzz, have a work ethic that seeps from the top down which shows the care they put in. David Neeleman, the founder and Chairman of JetBlue Airways flies each week on the airline so he can speak to the customers and he lead question is ‘what can we do to improve things?’
More importantly the company operations team each month will deconstruct each delay and examine the reasons for it and what could have been done for the passenger to improve things. The airline has the second best punctuality record of the airlines in the US. The policy on arrival is that within 20 minutes the baggage should be in the hand of the passenger. ‘Give him a 45 minute wait after a one hour flight and that is the last thing he will remember.’ Neeleman knows most of his employees by their first name and drives himself, no fancy cars and a drummed down lifestyle.
Lets learn.
Sunday, August 5, 2007
Sher Value: Escrow Law: adeeper look.
Last week I have established in my mind, unequivocally, that the new law on escrow accounts is indeed in the best interests of the buyer and the market conditions for sure. There are a few refinements to the law, which can be handled through procedures that need to be considered and this is a practical way to see a good law being implemented.
Under the proposed law payments will be certified by the consultants and then the accountants and finally approved by the Land Department. The edict is that the Land Department will approve the payment within 7 days, however, there is no provision in the law to cover the delays. Under current FIDIC procedures, which govern contracts, the employer has 56 days from the day the contractor submits the bill to pay the contractor. In the event that there are delays in this the contractor has the right to claim. These 56 days were determined based upon the time it takes to verify the works, and the documentation of the billing, and hence there never was a chance that a third party (i.e. the Land Department) will check and approve the payment. This means that any delays by the Land Department could most certainly result in a payment delay claim from the contractor. How is this resolved?
Another more crucial element is when there is a dispute between the contractor and the client, then the position of the escrow account and the procedure actually complicate the matter even more. How does then the payment situation resolve itself as under the law as passed there is no provision for the payments to be suspended in such an event.
Interestingly, the banks who are to be the recipients of the escrow funds have suddenly jumped on the issue and some have said that they will have to charge to maintain the escrow account. From what I see in the law the banks have nothing to do in terms of verifying the payments or making any undertaking for the payments. I heard a few developers tell me that banks have suggested a 2% fee for maintaining escrow funds! I think this is totally shameless as banks are not required to do anything extraordinary under the law and I do not see why they should suddenly becomes scalpers in this situation. Indeed I would argue that banks are already holding sale funds that they receive so I do not see any difference on their lives.
One aspect of the law needs to be tightened up is the fiduciary responsibilities of the escrow agents as this is where comfort will be driven into the system. I also feel if escrow agents are specialized accounting and legal firms, as is the case in say the US, then indeed the need for the Land Department to confirm payments does not arise. I am sure these aspects are being looked at and the law will be further refined in its operation.
Under the proposed law payments will be certified by the consultants and then the accountants and finally approved by the Land Department. The edict is that the Land Department will approve the payment within 7 days, however, there is no provision in the law to cover the delays. Under current FIDIC procedures, which govern contracts, the employer has 56 days from the day the contractor submits the bill to pay the contractor. In the event that there are delays in this the contractor has the right to claim. These 56 days were determined based upon the time it takes to verify the works, and the documentation of the billing, and hence there never was a chance that a third party (i.e. the Land Department) will check and approve the payment. This means that any delays by the Land Department could most certainly result in a payment delay claim from the contractor. How is this resolved?
Another more crucial element is when there is a dispute between the contractor and the client, then the position of the escrow account and the procedure actually complicate the matter even more. How does then the payment situation resolve itself as under the law as passed there is no provision for the payments to be suspended in such an event.
Interestingly, the banks who are to be the recipients of the escrow funds have suddenly jumped on the issue and some have said that they will have to charge to maintain the escrow account. From what I see in the law the banks have nothing to do in terms of verifying the payments or making any undertaking for the payments. I heard a few developers tell me that banks have suggested a 2% fee for maintaining escrow funds! I think this is totally shameless as banks are not required to do anything extraordinary under the law and I do not see why they should suddenly becomes scalpers in this situation. Indeed I would argue that banks are already holding sale funds that they receive so I do not see any difference on their lives.
One aspect of the law needs to be tightened up is the fiduciary responsibilities of the escrow agents as this is where comfort will be driven into the system. I also feel if escrow agents are specialized accounting and legal firms, as is the case in say the US, then indeed the need for the Land Department to confirm payments does not arise. I am sure these aspects are being looked at and the law will be further refined in its operation.
Monday, July 30, 2007
Sher Value:Finally a voice for the buyers.
Dubai’s Law no 8, issued in October of last year, but promulgated only last week by its publication into the Official Gazette, brings to the forefront a major development that favor the purchasers of homes. This is a change for a large number of the developers who have been selling off plan units but not linking the payments to the construction schedule. The result of not linking the payments to the construction process has meant that some developers have larger sums of money than the comparative work on the construction itself. For this class of developers the new law will change the way they have been operating.
For those developers who had been linking the payments from the end buyers to the progress of construction the adjustment to the new law will not be an issue. While a few procedural steps have been introduced in the new law, one of he procedures are onerous. Interestingly contractors will like the new law as it will ensure that within seven days of he approval of their bill they will be paid, reducing the risk of delayed payments.
On the face of it the law makes no exceptions for the large developers like Emaar and others who are partially government owned and have established a good track record. In addition, the law does insist on the release of the final 10% after one year and only when all the buyers have registered their units. This does pose some problems as a large number of end buyers do not register their units and rely on the sale and purchase contract as the basis for further sales. I would suggest to the authorities a few clarifications to the law.
I would suggest that provision be made that if a developer is registered with the Department once he would not require re-registration. I also recommend that developers be rated by the Department indicating the number of buildings or projects they have successfully completed and delivered; thus the buyers will know what a 3 star developer is better then a 1 star developer. I would also recommend that provision for the final ten percent be changed to be on either all the units being registered or one year which ever happens first.
The impact of the new law will emerge in the coming weeks. My suspicion is that the speculators who have been buying plots in the past with the intention to flip them will feel the first pinch of the law. On the whole the long term effect of the law will be positive and bring much needed confidence to the market. It must be clear that the law suggests by inference that should a developer build with his own resources and after completion of the building offer completed units for sale the provision of the new law do not apply.
My verdict: a Good law and was much awaited.
For those developers who had been linking the payments from the end buyers to the progress of construction the adjustment to the new law will not be an issue. While a few procedural steps have been introduced in the new law, one of he procedures are onerous. Interestingly contractors will like the new law as it will ensure that within seven days of he approval of their bill they will be paid, reducing the risk of delayed payments.
On the face of it the law makes no exceptions for the large developers like Emaar and others who are partially government owned and have established a good track record. In addition, the law does insist on the release of the final 10% after one year and only when all the buyers have registered their units. This does pose some problems as a large number of end buyers do not register their units and rely on the sale and purchase contract as the basis for further sales. I would suggest to the authorities a few clarifications to the law.
I would suggest that provision be made that if a developer is registered with the Department once he would not require re-registration. I also recommend that developers be rated by the Department indicating the number of buildings or projects they have successfully completed and delivered; thus the buyers will know what a 3 star developer is better then a 1 star developer. I would also recommend that provision for the final ten percent be changed to be on either all the units being registered or one year which ever happens first.
The impact of the new law will emerge in the coming weeks. My suspicion is that the speculators who have been buying plots in the past with the intention to flip them will feel the first pinch of the law. On the whole the long term effect of the law will be positive and bring much needed confidence to the market. It must be clear that the law suggests by inference that should a developer build with his own resources and after completion of the building offer completed units for sale the provision of the new law do not apply.
My verdict: a Good law and was much awaited.
Sunday, July 22, 2007
Sher Value: Management Ethos
These days it doesn’t take much for someone to spot a well run company from a terribly run company; all you need is good eyesight. As I move into helping my wife create a new angle to management training by using horses to learn management skills, because horses never lie, I am noticing more things. My vision was always good to spot management practices, but then sometimes we miss out the small detail, and it is there that difference lies.
My case in point of good management manners comes from Dubai Holding, and its many subsidiaries, and I have had the pleasure to visit, on a number of occasions its Chairman and many of its rank and file management and staff. Did you notice they ALWAYS walk you to the elevator and will say their good byes there, even if it’s the Chairman or a manager of small unit of this giant company. Now that is a fascinating management habit, it warm, it’s engaging and most of all a great habit to have. I am told that then they have internal meetings, after the meeting is over everybody, and I mean everybody, will collect their own litter like coffee cups etc and put it away and tidy up the meeting room. No one leaves the room till this is not done. I think this is such a refreshing approach to management, team building and camaraderie that it is almost bespoke and is the hallmark of a company destined to achieve a great deal more.
I have also seen many other companies who could learn from these examples. There are numerous examples of bad management practices too. You walk into some offices and you feel that air of management neglect. The place reeks of it, people’s hollow smiles, and the silent fear are all visible. One has no option but to stand back and evaluate how a company that cannot take care of its people progress. I often have argued that before we are about being in a business we have to first accept we are in the people business.
Many companies have got this wrong, they will under pay, mistreat and allow the worst sort of politics and practices to come into the office environment and then they wonder why people do not work for the company with zeal and enthusiasm.
I am indeed impressed that a huge company like Dubai Holding has developed a management ethos that is so powerful and visible from the outside. It is all the more important because being what Dubai is all about it highlights the management ethos that almost becomes a trademark of its own. Indeed some of the best management practices are rooted in a sense of humility and sincerity. One has to hope now that others will notice and emulate this example of good management. The dividend of this is unseen and unmeasured but trust me its perhaps the strongest item on the balance sheet of the company: Management Ethos.
My case in point of good management manners comes from Dubai Holding, and its many subsidiaries, and I have had the pleasure to visit, on a number of occasions its Chairman and many of its rank and file management and staff. Did you notice they ALWAYS walk you to the elevator and will say their good byes there, even if it’s the Chairman or a manager of small unit of this giant company. Now that is a fascinating management habit, it warm, it’s engaging and most of all a great habit to have. I am told that then they have internal meetings, after the meeting is over everybody, and I mean everybody, will collect their own litter like coffee cups etc and put it away and tidy up the meeting room. No one leaves the room till this is not done. I think this is such a refreshing approach to management, team building and camaraderie that it is almost bespoke and is the hallmark of a company destined to achieve a great deal more.
I have also seen many other companies who could learn from these examples. There are numerous examples of bad management practices too. You walk into some offices and you feel that air of management neglect. The place reeks of it, people’s hollow smiles, and the silent fear are all visible. One has no option but to stand back and evaluate how a company that cannot take care of its people progress. I often have argued that before we are about being in a business we have to first accept we are in the people business.
Many companies have got this wrong, they will under pay, mistreat and allow the worst sort of politics and practices to come into the office environment and then they wonder why people do not work for the company with zeal and enthusiasm.
I am indeed impressed that a huge company like Dubai Holding has developed a management ethos that is so powerful and visible from the outside. It is all the more important because being what Dubai is all about it highlights the management ethos that almost becomes a trademark of its own. Indeed some of the best management practices are rooted in a sense of humility and sincerity. One has to hope now that others will notice and emulate this example of good management. The dividend of this is unseen and unmeasured but trust me its perhaps the strongest item on the balance sheet of the company: Management Ethos.
Sunday, July 15, 2007
Sher Value: Class Actions-A Matter of Business
One of the amazing things about the promotion of capitalism and free economy is that even what are ostensibly service sectors get into the act of making money. Back in the 1960’s the idea of a class action suit was to reduce litigation costs and to bring some equity into the claim process should the class action be successful. It was a bold legal principle meant to champion the cause of the under privileged and the poor who could not afford a battle against a corporate giant.
Fifty odd ears on and class actions have become a business; some banks also have created private equity funds that back the legal and associated costs of class action battles. The result is that mushrooming of court dockets with class action cases some of which have little to do with justice than with the issues of commercialism.
The case of the case against Wal-Mart, Dukes versus Wal-Mart, filed in 2001 indicates how an employee, Betty Dukes, who was reprimanded by a female supervisor for prolonged lunch breaks, brought a $11 billion class action suit against the company on the basis of alleged sexual discrimination at work. Seven years later the battle continues with major funding backing Dukes s the idea of preying on a corporate giant is appealing to many; irrespective of the merits of the case.
Class action lawyers are not the sort of folk I will have for dinner, (does that mean I have violated some right of theirs), not because I question their social or legal skills, but simply because its too predatory a practice for me to accept. I am all for the underdog, I am all for justice, but can I accept the fact that most class action lawyers will take close to 60% of the settlement in cash. In some cases we find that some of the plaintiffs end up with ‘coupon settlements’ where all they get is coupons to buy more of goods and services from the defendant company, while the lawyers, nit surprisingly, have walked off with most of the cash settlement.
The expansion of this phenomenon has developed two aspects, one is where lawyers are trying to establish international jurisdiction of US courts for class action cases and secondly a move is under way to expand class action norms into the European legal system. This is a dangerous trend as it makes a mockery of what were essentially legal principles to establish fairness and equity. There is talk of bringing class action cases against a number of countries over issues of labor law and other human rights issues. While I am all for fair treatment of people I do have a major problem with American lawyers taking such aggressive positions ignoring their own track record. Have forgotten that some of the ‘Black Code’ laws of the Southern States in the US were formally abolished only about a decade back. Perhaps there is an argument for a class action case against Mississippi for allowing the Jim Crow laws and the Black Codes to continue so far into the progress of human history, and why not file that case in New Delhi? But then this is business not justice.
Fifty odd ears on and class actions have become a business; some banks also have created private equity funds that back the legal and associated costs of class action battles. The result is that mushrooming of court dockets with class action cases some of which have little to do with justice than with the issues of commercialism.
The case of the case against Wal-Mart, Dukes versus Wal-Mart, filed in 2001 indicates how an employee, Betty Dukes, who was reprimanded by a female supervisor for prolonged lunch breaks, brought a $11 billion class action suit against the company on the basis of alleged sexual discrimination at work. Seven years later the battle continues with major funding backing Dukes s the idea of preying on a corporate giant is appealing to many; irrespective of the merits of the case.
Class action lawyers are not the sort of folk I will have for dinner, (does that mean I have violated some right of theirs), not because I question their social or legal skills, but simply because its too predatory a practice for me to accept. I am all for the underdog, I am all for justice, but can I accept the fact that most class action lawyers will take close to 60% of the settlement in cash. In some cases we find that some of the plaintiffs end up with ‘coupon settlements’ where all they get is coupons to buy more of goods and services from the defendant company, while the lawyers, nit surprisingly, have walked off with most of the cash settlement.
The expansion of this phenomenon has developed two aspects, one is where lawyers are trying to establish international jurisdiction of US courts for class action cases and secondly a move is under way to expand class action norms into the European legal system. This is a dangerous trend as it makes a mockery of what were essentially legal principles to establish fairness and equity. There is talk of bringing class action cases against a number of countries over issues of labor law and other human rights issues. While I am all for fair treatment of people I do have a major problem with American lawyers taking such aggressive positions ignoring their own track record. Have forgotten that some of the ‘Black Code’ laws of the Southern States in the US were formally abolished only about a decade back. Perhaps there is an argument for a class action case against Mississippi for allowing the Jim Crow laws and the Black Codes to continue so far into the progress of human history, and why not file that case in New Delhi? But then this is business not justice.
Saturday, July 14, 2007
Sher Value: Take Over Fever & Diversification
The news is all over the place, a stake in EADS, Barneys under bid, Bank stakes being claimed and the list is getting to be endless. There is a plethora of equity and acquisition deals being done from the Middle East into the Western markets. The deployment of overseas investments representing money leaving the Arab world for investment abroad just this year alone has been estimated at US$40 billion, and probably does not include the reserve transactions from public sector strategic investments. It is estimated that the Kuwait Investment Authority, KIA, according to one public source, has reserves of US$213 billion, and indeed a great deal of this was rebuilt after the devastating impact of 1991 political developments in the region. My personal guess, and I emphasis only a guess, is that the reserves of the GCC countries are perhaps more than $1.2 trillion and perhaps represents the largest singular segment of investment buying power in one region.
Indeed there are a number of countries who singularly have a higher Gross Domestic Product, GDP, than the entire GCC bloc, but it's the financial reserves, especially when related to the population and the investment opportunities within the region that count. Even though the real estate and infrastructure of the region has been expanding at what seems a break neck speed, in the larger scheme of things we have to accept that the growth of financial assets and financial reserves has been more robust and consistent in the past decade than anything else. This means that financial assets and their accumulation is far outstripping the growth in say the real estate sector.
What this does mean is that even though the strong liquidity in the market will continue to fuel the real estate expansion, in addition to other elements of diversification, the need for liquidity to go overseas will be a major drive of the investment philosophy and it is something that cannot really be avoided. The acquisition of financial assets and companies is a normal behavior of this strategy.
As much as targeting mature companies in business conditions where they are either undervalued today or are likely to be great investments over the horizon the strategy again is really akin to stock picking. However, there is an argument to be made of going into economies where the business case is more of an emerging market, where companies may not have emerged into the limelight. I believe both India, and China, and other smaller economies have a number of companies who would be ripe for acquisition and actually be propelled onto the world stage through modernization and proper systems and business positioning. This is where the marvel of capital and expertise can best be applied, keeping in mind the impact of these emerging economies is massive and ignoring them would be a vital mistake.
Wednesday, July 4, 2007
Sher Value: Conservation and Construction
As the week came to an end, for a long time Gulf resident, the news of Oman's Arabian Oryx sanctuary being closed off and losing its Habitat status with UNESCO was a sad event. Once this sanctuary, largely supported by the Government of Oman and PDO (Petroleum Development of Oman) boasted of close to 400 Oryx, today has dwindled to only four pairs of breeding Oryx, as a result of a number of factors, ranging from poaching to mismanagement. This is clearly a case where the intention to do good was always there it was just managed in the wrong way.
For those who know me are aware that I have always advocated conscientious development and this implies the need for sustainable development and most importantly to preserve the natural resources of the country and the region. Indeed, natural reserves like Al Maha are having populations of Oryx that can be developed into sustainable herds, as indeed the program that Abu Dhabi under ERDWA has launched for sustainable sanctuaries. These are important programs and they need careful planning and support.
While there is a propensity for people to believe that because the government has a great deal of money public and corporate funding is not needed, the reality is that we do need the corporate level to be involved in these efforts because if nothing else they increase awareness. In addition, as we continue with the construction boom, we also bring a much needed awareness to the issues of conservation and environmental impact. Admittedly in the past two odd years I have seen the authorities to get really strict about environmental impact of projects a great deal more needs to be done.
As we go off reclaiming land from the sea, and tearing down yet another sand dune we have to be aware that we are dealing with a very fragile environment and steps we are taking today will have profound and perhaps irreversible impact on the environment and the flora and fauna of the region. Call me a traditionalist but I did enjoy, not too long back, the early morning drive, only 10 km from the city to see gazelle and watch them in their habitat, and today that land is being torn down by bulldozers, indeed with the gazelle having been relocated. But we do need to say a lot more about what is being done to balance the needs of construction with the demands for conservation.
Indeed, a lot is being done about it, but a lot more needs to be said about it. It is here that awareness is important and this awareness has to come from the corporate sector and that is the best way forward. I would like to see more companies step up with campaigns for the environment and what needs to be done to save it. This is the way forward and we have to consider it with seriousness. In the same measure it would be good for a more public profile to be taken by the government on the issue of conservation.
Sunday, June 24, 2007
Sher Value: Competing Interests
After sending off my book to the publishers the mind plans the next one; hence a book about Dubai has been a work in progress. One of the things I used to marvel at was that Dubai was creating an enabling economy, where the government sets up the infrastructure and private business flourishes creating services income for the government. Indeed, in some areas an element of aggregating competition has happened and government owned entities have been competing with the private sector. This has been all together healthy; up to a point. Now I am afraid its all getting a little too unbalanced.
In the past two years one of the major concerns seems to be the emergence of the government or semi government companies becoming competitors with the private sector. There is on the one hand a good feeling that the government is supportive and confident enough of the economy to be an active participant. However, there is a propensity for some officials to actually consider its role to be actively competitive with the private sector. As someone said that what these public sector companies are doing is to take the model from the private sector and expand it to a much larger size, re-brand it and launch it as their own.
The result is that the private sector is feeling squeezed by the pressures that come from this strategy. Some will argue that instead of the enabling model the competition that has been created is cornering the private sector to the point that their new business formations is declining. A leading retailer told me the other day that a public sector entity has been approaching foreign franchises to enter into retail franchising and felt that this was likely to create a monopolistic trend that cannot be healthy for the market.
By all means there is no doubt that the government here has been extremely supportive of the private sector and that is why this alliance has flourished. I strongly advocate that balanced competition is good but head on competition between the public sector and the private sector is likely to be counter productive. The answer is that the public sector should become a 'co-investor' with the private sector, thus taking equity positions of up to 40% of the private sector businesses and this is where the synergy works best.
This will ensure that the entrepreneurial spirit of the private sector remains intact, public sector financial strength works to create expansion, and most importantly brings together a synergistic sustainability to the market model. Thus the public sector companies should be setting up private equity operations rather than companies that compete. Just the rumor that a major public sector hotel strip is considering to enter into the theme park and attraction model creates competition that makes existing private sector developers wonder what they were doing for the past three years developing alliances in what is a very difficult market.
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