Murky beginnings of United Nations – White Man’s Burden

From William Easterly’s excellent “Tyranny of Experts”

The triumph of the technocratic idea of development was written into the charter of the new United Nations. On June 26, 1945, in San Francisco at the United Nations Conference on International Organization, representatives of the world’s countries signed the United Nations Charter, which reads in part: “We the peoples of the United Nations,” in order “to reaf-firm faith in fundamental human rights, in the dignity and worth of the human person, in the equal rights of men and women and of nations large and small, and . . . to promote social progress and better standards of life in larger freedom,” have determined “to employ international machinery for the promotion of the economic and social advancement of all peoples.”53 This sounds admirable, of course, but there is a fundamental omission. The UN Charter paid at least lip-service to rights and freedom, but it made no mention of independence for colonial peoples. Perhaps it helps to understand this contradiction to learn that the main author of the soaring language of the charter was Jan Smuts, the long-time South African leader and long-time advocate of white rule in Africa. At the conference in San Francisco, Smuts praised the United Kingdom as the “greatest colonial power” in the world. Smuts saw the United Nations as serving “men and women everywhere, including dependent peoples, still unable to look after themselves.”54 The “international machinery” to promote “advancement” of “dependent peoples” included the British Empire. At the time of the UN’s founding, the United Nations and the British Empire were mutually supportive international organizations.

W.E.B. DuBois accused Smuts and the other UN founders of “lying about democracy when we mean imperial control of 750 millions of human beings in colonies.”55

Friedrich Hayek had questioned the moral value of any real power given to an international organization in The Road to Serfdom in 1944. Hayek, with his realism about the Allies wielding such power and his suspicion of unchecked power at any level, reacted a lot like the left-wing anti-imperialist DuBois. He asked, “can there be much doubt that this would mean a more or less conscious endeavor to secure the dominance of the white man, and would rightly be so regarded by all other races?”56

Article 73 of the UN Charter said that some unspecified UN members have “responsibilities for the administration of territories whose peoples have not yet attained a full measure of self-government.” As Lord Hailey pointed out in the 1956 revision of the Africa Survey, this provision did not give “the organization of the United Nations any authority to intervene in the control of these territories.” The article requires such members to ensure for these peoples “protection against abuses.” This article thereby firmly required colonial powers to protect their colonial subjects against—themselves.57

When the United Nations published its first report on development in 1947,Economic Development in Selected Countries: Plans, Programmes and Agencies, it included plans for “British African Non-Self-Governing and Non-Metropolitan Territories” and “French African Overseas Territories.” The introduction to the report lumps together all “governments of the less developed countries,” including the European colonial rulers of these territories next to local rulers like those in Argentina, Brazil, Chile, Poland, and Yugoslavia. The report declared that all members of this diverse group of autocrats, democrats, Stalinists, and colonizers shared the “ultimate aim in economic development” which “is to raise the national welfare of the entire population.

Principle of Economic Efficiency : Islamic Economics

In the emphasis on the economic efficiency of the use of natural resources, either for consumption or production, we find Islam is differentiating clearly between two important notions: isràf and tabzìr. This has been mentioned in the Quranic verses with a particular distinction between the two.

In consumption for example, isràf could be interpreted as extending the level of consumption beyond the level of basic needs. This may lead to, and incorporates, the consumption of luxurious goods and services. In terms of the relationship between saving and spending, isràf may also be widened to include sacrificing future consumption, saving, for the sake of immediate consumption, and spending; which is a reflection of the consumer’s time preference in allocating his consumption between present and future income. In this case the balance between the two types of consumption, in both cases, first, the basic needs as compared with luxurious consumption, and second, future as compared to present consumption, which good Muslims are required to observe, may be impaired. This is not recommended; it is frowned upon and may even attract God’s dissatisfaction. But the punishment for this behaviour, is not, as it seems from reading the Quranic verses, as severe as the punishment associated with another level of consumption, tabzìr.

Tabzìr in an economic sense is the unnecessary use of economic resources, i.e. wastage of economic resources, large or small, and at all levels of consumption. Tabzìr, is not confined to the level of extravagance, but goes beyond that to include even the level of necessities if the consumer was wasteful in satisfying his or her very basic needs of these essential physio-sociological wants. To put it another way, one may have a variety of suits, meals, electrical appliances, and may in that reach the level of extravagance, which, to remind ourselves, is frowned upon and may even attract a penalty subject to the ability of economic resources and the development state of the economy, but one may not waste fabric or food ingredients
unnecessarily in having even one modest suit or eating one meal. Wastage, tabzìr, even in fulfilling most basic needs is forbidden. Therefore, while isràf is the extensive use of resources, tabzìr is the wasteful use of these resources; and there is a distinct line between the two. While the former may lead to further comfort, better appearance and, most likely, more pleasure in life, the latter leads to no purpose but wasting valuable resources to the community and the world by putting these resources to no use. The former may make one less of a perfect Muslim, but the latter would render a person irresponsible to the point of evil: a brother of Satan, “Verily resource wasters (mubazzirìn) are brethren to Satan, and Satan is the worst
unbeliever”, (Quran 17:27). Tabzìr attracts the wrath of God, for which the penalty is His retribution.

Excerpted from
Islamic Economics. A Short History (Themes in Islamic Studies) by Ahmed El-Ashker, Rodney Wilson

Is MQM working in cahoots with Lyari Gang?

My cousin calls me. I don’t recognize his number on the cellphone so I ask him why has he changed his number. He says he is receiving extortion threats. He runs a School in Federal B Area (an MQM strong hold). He tells me that all other private schools in the area have received a similar threat. I ask him is it MQM? He said MQM are nicer people, they have minimum monthly donation of 20k per month and that is it. So I asked if it is notorious Tehreek Taliban Pakistan (TTP)? He says, “No! it’s Lyari gang.”

Now my cousin lives in a neighborhood that is self contained in terms of his needs i.e. all his near and dear ones live in the same locality and kids study in same school so it’s not like that he is afraid that he or his family will be targeted when he travels out of that MQM stronghold because he rarely has any need to. And a threat is not useful unless TTP can enforce it at short notice.

Now if you have lived in MQM area, you know that MQM has local on the ground intelligence i.e., guy smoking cigarette at the street barricade all day long, Sabzi wala, corner shop wala, hardcore MQM supporters that is your neighbor etc. To send threat and then to enforce it in MQM area, Lyari people need local intelligence to not only to gather info but most importantly to enforce their threat. It is hard to fathom how they would have been able to gather this information without being noticed by local MQM intel.

Anyway my cousin and other private school owners in the area go to meet IG Sind Shahid Hayat but according to him Hayat wasn’t willing to listen and with non-Urdu speaking people around him as officers and advisors kept on saying that it’s the Urdu speaking people who are to be blamed. Where can one go to seek redress if the police keeps on blaming the victim? So my cousin is shifting rather opening a new school in Lahore and starting there from April session.

I live in Korangi_another MQM stronghold. Shopkeepers in our area get MQM “donation” slips every month depending on the size of the business from Rs 1,000 to Rs 5,000. Last month, the meat shop walah refused pony up Rs 5,000 when every one around him did. Following week he, and him alone among 100s of shops, receives an extortion demand from Lyari Gang and he pays up Rs100,000 to get them off his back.

This is all anecdotal. With all the caveats that go along with such statements, my conclusion is bloody MoFos MQM is either in cahoots with Lyari Gang or they pretend to be Lyari Gang when it suits them. Bastards pretend to be the last stand against Lyari gang and Taliban but are not above working with them or pretending to be them when it suits them.

Nothing surprising here because our chowkidaars (the army, police) have already been stealing from the till but it hurts slightly more when your ethnic brother saviors also engage in similar tactics.

 

Polio leads to infertelity: a myth

Every few weeks, we come across articles in the newspaper that locals or the tribal elders not allowing polio vaccination in their area because people think it will render their kids infertile. Then there are efforts from government side to educate the people that it is just a myth but the myth isn’t getting destroyed. From Guardian

Now religious scholars have joined the campaign to dismantle the myths and battle the resurgence of polio. A campaign led by National Research and Development Foundation (NRDF) in partnership with Unicef has brought together more than 5,000 of them, working on provincial and district levels, to tackle the issue. The group comprises of scholars belonging to the Deobandi sect, a school of thought followed by the majority of population in the tribal belt.

In Fata, clerics helped resolve 8,120 vaccine refusal cases during a week-long campaign in March this year. Another 160 religious scholars from Swat have issued a Fatwa in favour of the vaccinations. A campaign, starting this month, will be led by Shia scholars as it expands to the Parachinar valley, where the majority of the population are Shia Muslims.

Now if “polio drops leads to infertility” was a Taliban ploy, then we would not need to convince Shias as they are arch enemies of Taliban and would not have bought Taliban ploy hook, line and sinker. It doesn’t help the case that CIA used fake polio campaign to hunt for Osama Bin Laden leading to some polio administering NGOs to fly their staff outside Pakistan immediately as they would’ve been threatened.

But resistance to polio has been in the region even before Taliban took over. Where did the myth that it leads to infertility arrive. I came across this passage in the book Poor Economics talking about similar resistance to polio drops in India which gives some background:

India had had a long history with family planning, starting in the mid-1960s. In 1971, the state of Kerala experimented with mobile sterilization services, the “sterilization camps” approach that was to be the cornerstone of Sanjay Gandhi’s plan during the Emergency. Although most politicians before him had identified population control as an important issue, Sanjay Gandhi brought to the problem both an unprecedented level of enthusiasm and the ability (and willingness) to twist as many arms as necessary to implement his chosen policies.

In April 1976, the Indian Cabinet approved a formal statement of national population policy that called for a number of measures to encourage family planning, notably, large financial incentives for those who agreed to be sterilized (such as a month’s wages or priority on a housing list), and more frighteningly, authorization for each state to develop compulsory sterilization laws (for, say, everyone with more than two children). Although only one state proposed such a law (and that law was never approved), states were explicitly pressured to set sterilization quotas and fulfill them, and all but three states “voluntarily” chose targets greater than what was proposed by the central government: The targets totaled 8.6 million sterilizations “for 1976–1977.

Once laid out, the quotas were not taken lightly. The chief of the Uttar Pradesh bureaucracy wrote by telegraph to his principal field subordinates: “Inform everybody that failure to achieve monthly targets will not only result in the stoppage of salaries but also suspension and severest penalties. Galvanise entire administrative machinery forthwith repeat forthwith and continue to report daily progress by crash wireless to me and secretary to Chief Minister.” Every government employee, down to the village level, and not excluding railway inspectors and school teachers, was supposed to know the local target. Parents of schoolchildren were visited by teachers, who told them that in the future, their children may be denied enrollment in school if they did not agree to get sterilized. People traveling by train without a ticket—a widely accepted practice among the poor until then—were handed heavy fines unless they chose sterilization. Not surprisingly, the pressure occasionally went much further. In Uttawar, a Muslim village near the capital city of Delhi, all male villagers were rounded up one night by the police, sent to the police stations on bogus charges, and sent from there to be sterilized.

The policy appears to have achieved its immediate target, although the incentives probably also led to some overreporting in the number of actual sterilizations. In 1976–1977, 8.25 million people were reportedly sterilized, 6.5 million of them during just the period July–December 1976. By the end of 1976, 21 percent of Indian couples were sterilized. But the violations of civil liberties that were an integral part of the implementation of the program were widely resented, and when in 1977, India finally held elections, discussions of the sterilization policy were a key part of the debate, as captured most memorably by the slogan “Indira hatao, indiri bachao (Get rid of Indira and save your penis).” It is widely believed that Indira Gandhi’s defeat in the 1977 elections was in part driven by popular hatred for this program. The new government immediately reversed the policy.

In one of those ironic twists in which historians delight, it is not inconceivable that in the longer term, Sanjay Gandhi actually contributed to the faster growth of India’s population. Tainted by the emergency, family-planning policies in India retreated into the shadows and in the shadows they have remained—some states, such as Rajasthan, do continue to promote sterilization on a voluntary basis, but no one except the health bureaucracy seems to have any interest in it. In the meantime, however, generalized suspicion of the motivations of the state seems to be one of the most durable residues of the Emergency; for example, one still routinely hears of people in slums and villages refusing pulse polio drops because they believe it is a way to secretly sterilize children.

 

Pakistan Army and Martial Race

From Express Tribune:

Lieutenant General Raheel Sharif was appointed as the new Chief of the Army Staff  (COAS) and Lieutenant General Rashad Mehmood was appointed as the new Chairman of Joint Chief of Staff Committee (CJCSC) on Wednesday

So this is what head of Inter Services Public Relations Gen Asim Bajwa tweets from his personal account:

 

One can also find the bio-data on ISPR page here.

Since it was stated in the first line, a lot of people wondered what is martial stock. And here Wikipedia comes to help:

Martial race was a designation created by Army officials of British India after the Indian Rebellion of 1857, where they classified each caste into one of two categories, ‘martial’ and ‘non-martial’. The ostensible reason was that a ‘martial race’ was typically brave and well-built for fighting, while the ‘non-martial races’ were those whom the British believed to be unfit for battle because of their sedentary lifestyles. However, an alternative hypothesis is that British-trained Indian soldiers were among those who rebelled in 1857 and thereafter recruitment policy favoured castes which had remained loyal to the British and diminished or abandoned recruitment from the catchment area of the Bengal army.

The British regarded the ‘martial races’ as valiant and strong but also intellectually inferior, lacking the initiative or leadership qualities to command large military formations. They were also regarded as politically subservient or docile to authority. For these reasons, the ‘martial races’ theory did not lead to officers being recruited from them; recruitment was based on social class and loyalty to the British Raj.

Whereas Martial Race theory continued to be abandoned every where, Pakistani military continues to hang on to it

English: Flag of the Pakistan Army
English: Flag of the Pakistan Army (Photo credit: Wikipedia)

Though seldom used in today’s context, it has been alleged that Pakistan Military believed in the concept of martial races, and thought that they would easily defeat India in a war, especially prior to the Second Kashmir War Based on this belief in martial supremacy, it was popularly said that one Pakistani soldier was equal to four to ten Hindus or Indian soldiers, and thus numerical superiority of the foe could be overcome.

The Pakistan Army was also accused of bias and racism by the Bengalis of East Pakistan who felt humiliated by this dubious theory that was being floated in West Pakistan, that they were not ‘martially inclined’ compared to the Punjabis and Pashtuns. Pakistani author Hasan-Askari Rizvi notes that the limited recruitment of Bengali personnel in the Pakistan Army was because the West Pakistanis “could not overcome the hangover of the martial race theory”.

Defence writers in Pakistan have noted that the 1971 defeat was partially attributable to the flawed ‘martial races’ theory which led to wishfully thinking that it was possible to defeat the Indian Army based on the theory alone. Author Stephen P. Cohen notes that “Elevating the ‘martial races’ theory to the level of an absolute truth had domestic implications for Pakistani politics and contributed to the neglect of other aspects of security.” Since then, the ‘martial race’ theory has rarely, if ever, been used by Pakistan.

Probably Wikipedia writers didn’t get the ISPR bio-data of COAS Gen Raheel Sharif. I have gone and edited the above entry to incorporate Pakistan Army still believes in Martial Race theory. Lets see if it gets accepted.

To summarize, Martial Race theory was devised by British Raj to define races that will remain loyal to British. This view is also propounded by Shuja Nawaz in his book Crossed Swords.

The point here is not to belittle the valor and sacrifices of soldiers of Pakistan Army. The point here is Pakistan Army continues to hold the dubious theory as absolute truth that their former colonial masters floated to keep them as a loyal subject.

It is now forgotten but this is how British treated brave men such as Tipu Sultan by calling stray dogs as Tipu. As quoted by Mushtaq Yusufi in his book Aab-e-Gum:

Failing

Caveat: This post will have a religious flavor. Moreover, the chronology of the events is true

Wednesday, 20th November 2013

I read this longform piece What It’s Like to Fail. Though one may not agree with the choices author made but it is an inspiring uplifting story about a man trying to survive and fight against the consequences of the bad decisions he had made. One paragraph particularly stood out:

What happens when you hit bottom? I can tell you one thing: you don’t bounce back. You crawl back, fighting every step of the way. It isn’t a straight arc back up either; there are dozens of setbacks every step of the way. And the place you land isn’t anywhere near where you were when you slipped off the cliff.

It is human nature but an Ivy League education makes you more conscious of where in the corporate ladder your classmates are. It is cliched but no one measures their quality of life in strength of their relationships with friends and family. The measure of a successful person is his wealth, which school one’s kids go to, what is the job description and employer name on one’s business card, where did we go to during summer holidays etc. And yes, we do admit everyday that we are amongst top 5% or top 10% of the world and non-deservingly more blessed than 5.5 billion people (assuming world population is 6 billion) but the circle we move in comprises of top 5% of the world and we always compare ourselves to them.

Post financial crisis of 2008, amongst the 150 or so graduates of my Ivy League class, only one or two updated their job descriptions on LinkedIn with a promotion or move up the career ladder. And comparing myself to them made me depressed as my career had come to a stand still. I carried on at my dead end job because there weren’t any better jobs in the market. What I knew from school grapevine but didn’t admit to myself was that reason many of my colleagues were not updating their profiles had been made redundant by the crisis. I talked to quite a few colleagues from my earlier jobs and with the exception of one or two, all are sticking to their jobs (with or without promotion) because their current jobs is providing them temporary job security which is a huge stress relief in these fluid times.

Thursday, 21st November 2013

I called up one of my closest friend. Both of us lamented our lucks. We took a break from career, went to business school and graduated a year before the credit crisis struck. While we were studying, it was still hey days and our colleagues climbed up the corporate ladder during this time. So when we joined the workforce, unlike earlier times wherein we were supposed to get a bigger and higher role as our CV was embellished with a top university education, we had to struggle very hard to get the position we left. Though I don’t think of it this way, but from a career growth perspective, the decision to go for a higher education at an elite university appears like a mistake to my friend. I look at it totally differently. It was one of my dreams to go for an education at an elite university and with grace of God I realized that dream. I look at the decision to go to the elite university like this as founder and CEO of Amazon Jeff Bezos had said:

“When you are in the thick of things, you can get confused by small stuff,” Bezos said a few years later. “I knew when I was eighty that I would never, for example, think about why I walked away from my 1994 Wall Street bonus right in the middle of the year at the worst possible time. That kind of thing just isn’t something you worry about when you’re eighty years old. At the same time, I knew that I might sincerely regret not having participated in this thing called the Internet that I thought was going to be a revolutionizing event. When I thought about it that way… it was incredibly easy to make the decision.”

For me the experience, the learning and achievement of sitting amongst the top finance leaders of the future and having studied, competed and held my own in academics with the best students of the world is a source of pride. I don’t know whether I will get to live to 80 and be able to derive same pride at that age but having realized one of my dreams is something to be truly thankful for.

I didn’t complain about my decision to go for an elite education but I did complain about how the career has come to a stop, prices for foodstuff, rent as well as kid’s tuition fees are rising etc and life isn’t exactly turning out to be how I thought it would. By life (I meant career).

Friday, 22nd November 2013

The Friday sermon at the mosque was about being thankful for what you have and comparing yourself to the ones below you and not comparing yourself for what you don’t have. Have heard such pep talk before. Then the Imam quoted following verses from the Quran. I don’t know about you but I have felt that whenever a verse is quoted from Quran, it just sinks directly into my heart and clears up a lot of things. May be it is faith. May be I am what you call a fundamentalist. Despite having read large number of books on worldly wisdom and sciences, I am still melted by Quranic verses. And the timing was perfect. It felt like that sermon was especially for me as I was feeling down.


And [remember] when your Lord proclaimed, ‘If you are grateful, I will surely increase you [in favor]; but if you deny, indeed, My punishment is severe.’ ” [Ibrahim:7]

Yet we are all human and sometimes feel that God is unnecessarily punishing us or testing us. And the Imam then quoted the following verse

What would Allah do with your punishment if you are grateful and believe? And ever is Allah Appreciative and Knowing. [Nisa:147]

This reminded me of the verse that my father used to quote:

And do not wish for that by which Allah has made some of you exceed others. For men is a share of what they have earned, and for women is a share of what they have earned. And ask Allah of his bounty. Indeed Allah is ever, of all things, Knowing.

The crux of above verse being that never compare yourself or ask the Lord for what he has given others. Just keep asking Him for his bounty. He may and will bless you with a different sort of bounty.

So yes, I am in a dead end career for now. And yes, the price of goods and services are rising whereas my income is not rising proportionately at all. And yes by the standards I use to measure my life (read career), I am failing but I have achieved a lot in life, realized a lot of my dreams and more for which I am thankful to Lord and seek His mercy and graciousness to bless me with more bounty from his unlimited sources.

Sunday, 24nd November 2013

A friend shares this as his status update on Facebook:

Volume 1, Book 3, Number 73: Narrated ‘Abdullah bin Mas’ud: The Prophet said, “Do not wish to be like anyone except in two cases. (The first is) A person, whom Allah has given wealth and he spends it righteously; (the second is) the one whom Allah has given wisdom (the Holy Qur’an) and he acts according to it and teaches it to others.” (Fateh-al-Bari page 177 Vol. 1)

My earlier related posts:

Bahria Town : Sucker born every minute

So the premium on Bahria Town registration slip of Rs.15,000 has reached Rs.195,000 in less than two months if all the SMSs and emails are to be believed. That is a 1,300% return in less than two months. For a “piece of slip” which has nothing behind it (the slip entitles you to nothing) yet people are falling over one another to buy it, it boggles the mind.

Yes Yes I know it is Bahria Town and Malik Riaz has developed good projects in Lahore and Islamabad but still it does not make sense. Let me give you an example. Lets say your closest friend   your brother who you trust asks you to buy a piece of slip for Rs.100,000. Discussion will move like this:

You: “what does the piece of slip entitles me to?”

You brother: “Nothing. It is just an invitation to apply for booking.”

You: “Ok. Is the booking guaranteed?”.

Your brother “No.”

You: “Rs.100,000 for a piece of paper? Isn’t that exhorbitant. Acha chalo..where is the land that I will book if I am lucky? Is it inside Karachi like Naya Nazimabad, is it in suburbs somewhere near Gulshan-e-Maymar or is it mid-way to Hyderabad near DHA City”.

Your brother: “I have no idea”.

You: “What is the size of the plot or its final price?”

Your brother: “I have no clue”

You: “When do you expect the booking to happen?”

Your brother: “I am not sure”

You: “So you are asking me to pay Rs.100,000 for a piece of paper which does not guarantee me a plot which you have no idea where it is located or what size it is or what is its price?”

Your brother: “Yes”

You:”Why?”

Your brother: “Because it is Bahria Town”

You know how stupid the brother sounds. It is exactly what is happening. Reminds me of Tulip Mania as recounted by Charles Mackay

According to Mackay, the growing popularity of tulips in the early 17th century caught the attention of the entire nation; “the population, even to its lowest dregs, embarked in the tulip trade”.[6] By 1635, a sale of 40 bulbs for 100,000 florins (also known as Dutch guilders) was recorded. By way of comparison, a ton of butter cost around 100 florins, a skilled laborer might earn 150 florins a year, and “eight fat swine” cost 240 florins.[6] (According to the International Institute of Social History, one florin had the purchasing power of €10.28 in 2002.[33])

By 1636 tulips were traded on the exchanges of numerous Dutch towns and cities. This encouraged trading in tulips by all members of society; Mackay recounted people selling or trading their other possessions in order to speculate in the tulip market, such as an offer of 12 acres (49,000 m2) of land for one of two existing Semper Augustus bulbs, or a single bulb of the Viceroy that was purchased for a basket of goods (shown at right) worth 2,500 florins.

You might come back with the argument that there is really something behind it. People are willing to pay Rs.195,000 for the “piece of slip.” And this brings us to Greater fool theory:

The greater fool theory describes a situation where the price of an object is not being driven by intrinsic values, but by expectations that irrational bidders for limited assets or commodities, will set the price. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price. Or one may rationally have the expectation that the item can be resold to a “greater fool” later.

In real estate the greater fool theory can drive investment under the expectation that prices will rise, or force need-based-buyers to out bid irrational or ill-informed buyers. A need-basis can be for basic housing or for organizations fulfilling exigent commercial interests.

The question that it raises is that Malik Riaz is no philanthropist. If there is so much demand for real estate in Karachi, why not increase the price of the plot and pocket the profit. But he is smart. He is allowing ordinary people to become stake holders in his mischievous schemes so that when he does something illegal or wrong, ordinary people who have made profit this “piece of slip” business will defend him in court of public opinion “uss nay aam aadmi ko munafa kamanay ka moqa dia” not realizing that this profit is a fluke, a gamble in its truest form. It is not even halal (because in Islam when you trade, the item being traded needs to be clearly identified) but lets not bring religion here.

I just got an email from a friend explaining Bahria Town tactics. So I will copy and paste it below:

It is very difficult to say anything about Bahria Town Karachi upcoming projects
1. Bahria Town Icon – Pakistan’s Tallest Building Plan (62 Storey Building)
2. Bahria Town Tower – 24 Storey Building at final stage of completion
3. Bahria Town Karachi – Master Planned Community (Villas and Plots)

We do not have any information regarding rate, payment plan and possession date. For Bahria Town Karachi, (as per Bahria Town track record) there is no idea of location of this project. It is obvious that it would be planned out of city area. As Karachi is a very big city and commuting to city area is not safe so it may not attract the investors in the start.

I understand Bahria Town itself is not clear so it is asking for registration first. It is kind of feeler to understand the demand as well as to collect huge funds.

About 8 years ago Bahria Town Pvt. Ltd. started same strategy when it sold 85,000 HOME PLUS cards and charged Rs.6,000/= or US$100 with a commitment that the card holders will be receiving the application forms of upcoming projects at their door steps. It was January 2005 when Home Plus cards project was launched. Do you have any idea when was upcoming project launched? After 16 months, on March 22, 2006, Bahria Town started sending application forms of its Awami Villas Project to Home Plus Card Holders.

If we consider the track record and strategy of Bahria Town, the actual launch of Karachi projects would be after a year or so. This registration scheme will also help BT to understand the trend of investors in Karachi and the demand for these projects. This demand would be the main factor in deciding the pricing of project and payment plan.

Karachi is a business hub of Pakistan. Bahria Town can not afford to ignore its market and investors. Contrary to that, Karachi also needs these kinds of safe, secure living and business atmosphere which Bahria has planned to provide. As mentioned above, Bahria Town would take around a year or so to present some actual project plan. It will, in the meantime, play with the funds received from registration. I hope that Bahria Town will flourish in Karachi but it should be considered a long term investment.

Earlier I had calculated that Malik Riaz will be making around Rs. 600 Million from the interest on the cash he has received. But if he takes two years to announce the actual project, the actual income would be in the range of Rs.1.5 Billion. I know it is not a big amount for Malik Riaz but it is free income.

So all those waiting for some clarity on the project. Sit tight and wait. They are saying that premium on the “piece of slip” will increase to Rs.2.5Million.

My recommendation:

  • If you are looking for some quick high risk-high return money making opportunity, I suggest you buy a slip and flip it quickly to the next sucker. Don’t hold on to it for ever.
  • If you have multiple slips, sell one and get your principal and profit out. Then you can continue to hold on to other slips for any further gain or the property
  • If you are looking to buy some real estate, my suggestion is to wait till the project is announced and people get allotment letters. A lot of people will want to sell the property and exit when the project is announced. You might have to pay a premium for a file but at least you will know what are you buying

Profit before Pakistanis: A case of mangoes, potatoes and bottled water

Last year I visited Madina Munawwarah and stayed at a five star hotel which had a bed and breakfast deal. They had a large breakfast buffet in the morning comprising of Arabic, Oriental, etc breakfast options. To cut the long story short, they also a had a fruit table where all kinds of sliced fruit were available in ready to eat format. I was amazed at their watermelon pieces. They must have cut around 50 to 100 watermelons to fill the various trays on multiple tables. The surprising part of it that there was not a single bad water melon. All the watermelons were red-dark pink and sweet. Whenever we go to a shop to buy water melons we have to check for sweet and red ones and occasionally we end up with unripe or non-sweet water melons. But in that hotel all the water melons pieces were ripe and sweet and red. Why can’t we get such delicious water melons every time?

This reminded me of an earlier event. Around 2004, a colleague of mine who used to work in the same bank branch as I did in Karachi was traveling to his home town Mirpurkhas. It was mango season and as Mirpurkhas lied in mango country, I asked him to buy me some delicious mangoes from Mirpurkhas. When he came back, he was empty handed. I asked him why didn’t he bring mangoes for me. He said the quality available there was not good. I told him that it is not possible that the good quality mangoes didn’t grow in Sind. He said that I misunderstood him. It is not that good mangoes don’t grow in Mirpurkhas rather good mangoes are not sold in Mirpurkhas. They are packed and sent to Karachi for consumption and export as they get higher prices. It is a tragedy that the people where the fruit is grown are not able to buy it because people in far away places like Karachi or abroad are willing to pay a much higher price for it.

Around 2008, a friend in Karachi was advising on merger between makers of Lays chips and Kolson snacks. He was sitting in one of the meetings between the two companies and discussion of potatoes came up wherein the Kolson guy told the Lays people that you don’t leave any potatoes for us. At this, the Lays people just laughed. When the meeting was over, my friend asked the Kolson team what is this about potatoes.

Kolson team told him that Lays has reached an arrangement with major potato farmers in Pakistan that they will get the first pick of all potatoes grown in the country. Once the company fulfills its quota or has rejected the produce, then the farmers can sell the potatoes in the market. So in a sense, the Pakistani nation buys and consumes that potatoes that have been rejected by Lays. Our best potatoes are used to make chips.

Nestle has also been involved in such practices. From the petition page Nestlé: Stop draining Pakistan dry!

Nestlé’s aggressive water grab is already descending like a plague on parts of Pakistan. In the small village of Bhati Dilwan, villagers have watched their water table sink hundreds of feet since Nestlé moved in. Children are getting sick from the foul-smelling sludge they’re forced to choke down.

I remember there was time in late 1980s that we used to drink water right out of kitchen sink. Now the media campaign with respect to bad quality of water in our water pipelines and disease associated with it get so much coverage that every one is forced to buy expensive water (something which is supposed to be cheap and readily accessible). From the study funded by Swiss Coalition of Development Organisations, Swissaid, Catholic Lenten Fund, Bread for all, Helvetas Caritas, Interchurch Aid “Drinking Water Crisis in Pakistan and the Issue of Bottled Water: The Case of Nestlé’s ‘Pure Life’” (ironically Nestle is a swiss company):

The aggressive market strategies of Nestlé went astray when “awareness seminars” about bad water conditions turned out to be counterproductive. Nestlé asked its Lahore ad agency, Interflow Communications Ltd., to organize public information events about water hygiene issues. Participating officials of health and water agencies announced that tests had determined that urban water was unsafe for drinking and even existing bottled water was unhealthy. Nestlé discontinued the seminars immediately after it was reproached for unethical marketing practices. For instance, a representative from the Lahore Water Supply Company alleged that Nestlé was “misleading the people to make money”. Regardless of the discussion and temporary fall back from Nestlé, it became clear that bad news was also good news, and Nestlé gained public attention as a safe option for bottled water. In the end, Nestlé successfully stepped into the market andfilled a need, but turned water from a danger into a luxury.

Furthermore

After five years of operation, Nestlé faced its first opposition when it announced that it would build a second production plant in Karachi. On October 25, 2003, the Shaheed Zulfiqar Ali Bhutto Institute of Science and Technology sent a writ petition to the Sindh High Court (Karachi), saying that the 20 acres leased out to Nestlé were carved out of the 300 acres of land allotted to it previously. The lawsuit has been joined by Sindh Institute of Urology & Transplantation, Aga Khan Hospital and Medical College Foundation, Sindh Madressahtul Islam, Newport Institute of Communication & Economics, Sir Syed University of Engineering & Technology, Shaukat Khanum Memorial Cancer Hospital & Research Centre, and Ziauddin Medical University — all land allottees in the said area. The property is located in an area spread over 15,500 acres, given to 30 different parties, believed to be designated for various educational and health purposes, and declared “Education City Karachi”. Nestlé bought the property for a price of PKR 500’000, double the price paid by the other parties, with the intention to invest USD 10 million and extract 306 million litres of water annually, for the sale of 228 million litres of bottled water. Ironically, the plant was not planned to meet the needs of the people of Karachi or the South of Pakistan, but for US forces at Afghanistan’s Kandahar Air Base.

The plaintiffs argued that Nestlé’s industrial ambitions defeated the very purpose of the area. Nestlé argued that the property was allotted after approval of the provincial cabinet and the department of industries. Furthermore, Nestlé claimed at the end of the dispute that the area was never declared for a single, non-industrial purpose, and the company presented various public officials to promote this position. The plaintiffs, however, could prove that the area was dedicated to education and health services since 1999, and the Sindh High Court (Karachi) held that water extraction by the proposed bottling plant would “diminish water deposits in the aquifers rapidly and shall adversely affect the plaintiffs’ right to use the underground water according to their genuine needs ”. The case is still open, regarding the plant and the investment, since Nestlé continues to legally challenge the decision of the Sindh High Court (Karachi). Nevertheless, one has to keep Nestlé’s self – commitment in mind, namely that it “consult[s] with local communities on water issues”, which was obviously not the case in Karachi.

The losers in this game are the poor

Insufficient water quality mostly affects the poor, who have little power to change policies and priorities and who cannot afford alternatives, such as bottled water, filtering and boiling. The Government of Pakistan officially admitted that “richer households are substantially more likely to have water piped to a tap in the household”. Furthermore, the Government of Pakistan acknowledged that the engagement of corporations, which extract groundwater and sell it as bottled water, might be one of the factors working against water quality improvement because it has reduced the political pressure for improvement by this part of society whose voices are valued and heard.

In conclusion,

Even Nestlé confessed before it started to produce ‘Pure Life’ that “the fact that everybody can’t afford ‘Pure Life’ is unfortunate, but does that mean we shouldn’t sell it at all?”. From this perspective, it is reasonable that Nestlé focused its marketing on urban centres, railway and bus stations and highway stops. To conclude, one has to say that Nestlé ‘Pure Life’ in Pakistan is not an affordable alternative for the great portion of the population without access to safe drinking water. Rather the introduction of bottled water in Pakistan is an attempt to initiate the bottled water culture, where water is a status symbol and a way of life for the rich.

So whether you grow potatoes or mangoes or sitting on water reserves, if you are poor, you will not be able to enjoy these fruits of nature.

Coming back to watermelon story, it was like the five star hotels have made a deal with watermelon growers to sell them the best watermelons and once the hotels have bought as per their requirement, then the farmers can sell the remaining watermelons in the market.

  • Further reading:

If you are interested in reading more about scandalous bottled water campaigns, please read this Mother Jones expose about Fiji water: Spin the Bottle. (It is worth reading in the full)

Obama sips it. Paris Hilton loves it. Mary J. Blige won’t sing without it. How did a plastic water bottle, imported from a military dictatorship thousands of miles away, become the epitome of cool?

Nowhere in Fiji Water’s glossy marketing materials will you find reference to the typhoid outbreaks that plague Fijians because of the island’s faulty water supplies; the corporate entities that Fiji Water has—despite the owners’ talk of financial transparency—set up in tax havens like the Cayman Islands and Luxembourg; or the fact that its signature bottle is made from Chinese plastic in a diesel-fueled plant and hauled thousands of miles to its ecoconscious consumers. And, of course, you won’t find mention of the military junta for which Fiji Water is a major source of global recognition and legitimacy.

During the 2000 coup, a small posse of villagers wielding spearguns and dynamite seized on the chaos to take over the bottling plant and threaten to burn it down. “The land is sacred and central to our continued existence and identity,” a village spokesman told the Fiji Times, adding that “no Fijian should live off the breadcrumbs of past colonial injustices.” Two years later, the company created the Vatukaloko Trust Fund, a charity targeting several villages surrounding its plant. It won’t say how much it has given to the trust, but court proceedings indicate that it has agreed to donate .15 percent of its Fijian operation’s net revenues; a company official testified that the total was about $100,000 in 2007. (For perspective, the trade journal Brandweek put Fiji Water’s marketing budget at $10 million in 2008; it recently dropped $250,000 to become a founding partner of the new Salt Lake City soccer stadium.)

Is Dubai back? Do I have anything against Bahria Town?

Dubai is heating up again if hundreds of billions of dollars of new projects announced in last two weeks to coincide with Cityscape Dubai. Both Dubai and Abu Dhabi are in this game.

Property, transport and power: Mega projects that will shape future of the Emirates

Beyond the halls of Cityscape, where the towers of tomorrow will jostle for position with other real estate developments, a handful of mega projects are rapidly transforming the non-oil economy of the Emirates. They represent a key part of a blueprint aimed at diversifying the nation’s economy and using hydrocarbon wealth to build industries of the future. From the nuclear reactors taking shape in the west to the pipeline carrying crude to the east, massive infrastructure projects worth hundreds of billions of dollars are changing the industrial foundations of the country.

You can click on the link above to read about the details of these projects. I will not go into financial details as I have noticed that most of the time people are just looking for headline grabbing news items. So I will use news headlines. I am not telling you that it is a mirage nor I am telling you not to invest in Dubai. I just want to let you know that be careful of what you invest in. Do research and don’t rush. If it is too good to be true, then probably it is.

This is the picture of Damac’s Akoya project that they unveiled in the current Cityscape.

This is how they are marketing the project

Who in the world uses Mafia Don’s picture to market the project. Probably most of prospective investors will find this harmless or even say that I am building unnecessary links. May be I am. But then you have this at the same time Cityscape exhibition is going

Dubai real estate promotion
DAMAC promotion before 2008. Giving away a private jet with the property. We still have some way to go till that time returns

Dubai’s Damac accused of selling same project twice

Damac publicly claimed at one point that 75 percent of La Residence had been sold off-plan, despite never laying a single brick.

In March this year, the company announced a new project branded by Hollywood studio Paramount on the same site, before launching sales to a fresh batch of investors.

Email correspondence between the investor and an agent representing Damac seen by Arabian Business urged the former to accept the offer, warning that the developer has significant legal clout and the backing of Dubai’s royal family.

True unlike last time, there is little bank debt so this is not leveraged speculation. People are putting up their own money. The advantage of this will be when the market crashes, unlike last time, banks will remain standing but investors will be left without their shirts.

State-owned developer Nakheel even said it would restart work on one of its most ill-starred projects, a palm-shaped artificial island with an amphitheatre which helped to drive it deep into debt a few years ago. But people are still as blind:

“We are seeing the same hype again as in 2008,” Jammal Hammoud, head of investment firm Milestones Capital, told a meeting at Cityscape.

Hours later, a scuffle broke out in the building as hundreds of would-be buyers lined up to take advantage of special offers from state-controlled developer Emaar Properties. Security had to be called to control the crowd.

One investor, who did not wish to be named, said he had just reserved a yet-to-be-built, four-bedroom apartment at Fountain Views, an Emaar project, for 4 million dirhams ($1.1 million).

“I had just a few minutes to decide because there were so many behind me who wanted the unit. I just took it on the hope that Dubai will be booming soon,” said the Indian national.

You are investing millions of your own money and you are deciding it in a few minutes. If the same guy was working for a bank or an investor he would take days if not weeks to decide whether to invest his employer’s money. But since it is his own money, he doesn’t care.

Dubai’s Deyaar JV says new project sold out

Deyaar

A joint venture between Dubai real estate firms Deyaar Development and Dubai Properties Group said that phase one of its new project had sold out following a two-day sales event.

Arady Developments said that units at its Central Park Residences went on sale over September 14-15, with investors snapping up all of the released studio, one-, two- and penthouse apartments. The company did not specify how many units had been put up for sale.

These companies had been in Dubai for last many years. The expats who are buying these properties would have been there would a few years. What has changed in last couple of months that suddenly all projects and properties that nobody considered was worth investing in are selling like hot cakes. Or is it a race to get your hands on anything that is available. (FYI Deyaar is owned by Dubai Islamic Bank which is in turn owned by ruling family)

Meydan Business Park sold out

All 120 plots in the Meydan Business Park have been sold out with the prices in the sought-after location fetching as much as AED30m ($8.17m), the developer revealed.

“We had approximately 120 (lots) and we’ve sold it out just before Cityscape,” he said, added that about 80 to 90 lots sold within two months of hitting the market.

US$8 million property is not cheap. Are these people buying these properties to live for capital gain. If its to live in them, may it be a comfortable and dream home for them. If they are buying to put on rent or sell at a capital gain, we are in property bubble and last one holding the title deed will not be wearing shorts when the tide goes out.

Meydan, Meraas launch Dubai Canal homes project

Mohammad Al Khayat, Meydan’s head of commercial and free zone, told reporters at Cityscape Global on Tuesday that the joint venture, which was valued at about AED30-35bn ($8.62bn-$9.53bn) in sales, would be for residential development on both sides of the canal.

A project of the size of $9 billion in sales. That is just one project. There will be another projects as well. Does Dubai government have the cash to carry out all the infrastructure work probably in tens of billions of dollars that is a prerequisite for these projects to take off. But position of Dubai is not so strong.

IMF warns Dubai on debt risks
But Dubai’s debt remained “substantial” at $142bn, about 102 per cent of GDP, the IMF said. Around $60bn of that amount fell due between this year and 2017, it said.

Forthcoming maturing debt next year included $20bn in Dubai government debt lent by Abu Dhabi and the Central Bank in 2009 as part of the Dubai Financial Support Fund. The cash was used to help companies struggling in the aftermath of the financial crisis.

Restructured debt related to Dubai World and Nakheel, the property company, will begin to mature in 2015 and 2016, the IMF said.

And probably to cover his ass, or may be he is jealous of Dubai’s growth or may be he wants to have “I told you so” moment when the time comes, Head of Abu Dhabi government development agency says that there is a bubble in Dubai real estate


Dubai headed for another slump within 18mths says Abu Dhabi chief

The head of an Abu Dhabi real estate firm backed by the Mubadala Group has predicted Dubai’s property sector will hit another slump in 18 to 24 months, saying the change was inevitable in an emerging market.

 

I have nothing against Dubai. Rather I think its a role model of how a country which could have easily been suffering from Dutch Disease controlled it (though didn’t eliminate it) significantly just by virtue of its visionary leadership. However, having seen friends and family burnt last time and jumping in again this time saying that “this time its different”, my only suggestion is its your money, just be careful what you invest in.

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Now coming to Bahria Town. Friends and family have called me to let me know that they have been receiving calls from real estate agents who are willing to buy registration forms from them at a premium of Rs.20,000 to Rs.30,000. At an investment of Rs.15,000, that is almost an 150% to 200% return.

So I asked them did any one sell their registration. No one has. So it is a paper return. Some one left a comment on my earlier blog post that he is ready to buy the forms. The question one needs to ask is that if there were unlimited forms this time and anyone could print the forms or get the forms from any of the bank branches and submit it over a number of days then why didn’t these buyers submit a form on the requisite day? Assuming something stopped them, I am still waiting for a single anecdote where someone has actually realized that profit. Till someone sells his form to one of these buyers, it is just a con game. If some common man makes some money, I am happy for him and may he do well. But when you don’t know what is the underlying property, its a gamble over a piece of paper.

I just leave you with story which made the internet back in 2006-2008 crisis

Once upon a time in a village a man appeared who announced to the villagers that he would buy monkeys for $10. The villagers knew that the jungle held countless monkeys, easily caught. The man bought 2 thousand.

As the supply diminished, they become difficult to catch, and villagers returned to their farms.  The man announced that he would pay $20. The villagers renewed their efforts and caught 1,000 more monkeys.

The supply quickly diminished, but before they returned to their farms the man increased his offer to $40 each.  Monkeys became so rare that it was difficult to even see a monkey let alone catch it. But they caught 500.

The man now announced that he would buy monkeys at $100! However, since he had to go to the city on some business his assistant would now buy for the man.   The man departed.

Then the assistant told the villagers, “Look at all these monkeys the man has in that big cage.  I will sell them to you at $50 each. When the man comes back you can sell the monkey’s back to him for $100.” The villagers queued up with all their saving to buy the monkeys.  The assistant took their money. They never saw either the man or his assistant again.

They now owned 3,500 monkeys. They were paid $60,000 to catch them, and bought them back for $175,000.

Again I wish Malik Riaz and all the investors good fortune.

Who is responsibe for violence in Karachi? It’s Sattar Buksh

I had written a few posts earlier about killings in Karachi and if anyone is interested in serious study or resources about it, I refer you to my earlier post Resources on Karachi Killings. Its has links to very rich and in-depth studies on violence in Karachi. But they all miss the angle that has come to light recently while I was browsing through a Karachi food forum on Facebook.

Karachi is a dichotomous city and probably Pakistan is dichotomous as well. There is a part of society that though complains of violence and inflation yet throngs to new food outlets in Karachi that “are popping up like windows on Macbook screens.” and has no qualms spending 5 to 10 thousand rupees on a lunch/dinner or even a snack out for four. It is customary to add here —> for 5 to 10 thousand rupees, a poor family of four can manage to feed themselves for a month.

One of those outlets is Sattar Buksh, a play on Starbucks. Sattar and Buksh are pretty common names in parts of the country.

The owners even got the low standard newspaper Express Tribune to report on its opening as a news.

Everyone’s talking about Sattar Buksh

Sattar Buksh is the latest addition to the list of cafes opened up to cater to the insatiable Karachi appetite, which is ready to engulf everything as people reach new heights of desperation in the entertainment-starved, terror-stricken metropolis. The new place has opened up in Clifton Block 4, that is fast picking up as the next swanky lane catering to the discerning and privileged. It has restaurants such as China Kitchen, Hook, Line & Sinker and the newly opened, Monte Cristo. The Sattar Buksh team says it wasn’t their first venue choice; the cafe was supposed to be in another location in Clifton.

You can read the whole article by clicking on the header. It makes for interesting read. Do not miss the comments as they provide an interesting perspective.

There is also a very active food forum on Facebook known as SWOT’s Guide for Karachi’s Restaurants, Cafes, Dhabas, Khokas and Take-outs and where people critique these food outlets. They can be brutal. Probably Sattar Buksh received one such brutal review which resulted in this

 

But probably that wasn’t enough. So he went on defending it with these arguments

 

All this time we have been looking for political, ethnic or financial reasons for people being killed mercilessly in Karachi. But now we find out that its rich entrepreneur kids who are opening eating outlets for rich people but upon receiving negative reviews go on a killing spree.

Bloody hell.

Post script: I didn’t know Pakistanis were giving HEADs to foreign outlets. That is why service at recently opened Burger King in Karachi was so bad as all the servers were busy receiving head.