RIYADH // Labour issues were high on the agenda of a top-level Indian delegation during its recent visit to Saudi Arabia, where officials have just announced a six-month amnesty permitting illegal foreigners to leave the kingdom without penalties.
The Indian minister for overseas affairs, Vaayalar Ravi, was pleased with his discussions with Saudi officials, according to the Indian ambassador, Talmiz Ahmed, who said the Saudis promised increased enforcement of their labour laws to ease difficulties faced by an estimated 1.8 million Indians working here.
"The minister returned [home] with great happiness," Mr Ahmed said, adding that his visit was part of "an ongoing interaction we have at the ministerial level". Mr Ravi's visit reflects the renewed attention by both countries to their bilateral ties, which got a huge boost in February when Manmohan Singh made a three-day visit here, the first by an Indian prime minister in 28 years. Indira Gandhi visited in 1982. Mr Singh, who was reciprocating King Abdullah's 2006 visit to India, said his trip "reflects the strong mutual desire of both countries to reinvigorate our relations".
This mutual desire arises largely from geo-strategic concerns, said Theodore Karasik, director of research and development for the Dubai-based think tank Institute for Near East and Gulf Military Analysis (Inegma). "There are different hot spots that they would like to coordinate on, including Iran, Afghanistan and Pakistan," he said. And "as we move into 2011, when there might be big changes in South Asia," he added, it is in the interest of both countries to have enhanced relations.
Saudi Arabia's "move to the East", exemplified in its greater attention to both India and China, is meant "to make Saudi foreign policy more dynamic", Mr Karasik said. A by-product of closer Saudi-Indian ties could be better working conditions for Indian expatriates in the kingdom, Mr Karasik added. Mr Ahmed said that in bilateral talks, Mr Ravi briefed the Saudis on a new Indian government programme to computerise and make accessible through Indian embassies in the Gulf all the details about each Indian worker in every Gulf country.
Called E-Migration, the programme will be tested first in the UAE starting in about a month, and then spread to other Gulf countries, Mr Ahmed said. Mr Ravi, who met the vice governor of Riyadh, Prince Sattam, and the deputy minister of labour, Abdulwaheed al Humaid, also raised the problem of Saudi sponsors who falsely inform the government that their foreign labourer has absconded to get a new visa to bring another worker into the country. This abuse, called haroob, is harmful to the labourer because he then winds up having illegal status.
"Our workers complain that sometimes an employer is dissatisfied and rather than send his employee back to India, he declares that he has escaped," Mr Ahmed said. "The Saudi government is familiar with the problem and they told us that if a worker is declared missing now, the employer will not be issued a new visa automatically. [Instead, officials] will look into these matters in greater detail … So we were quite satisfied with that."
As for the six-month amnesty announced on September 21, Mr Ahmed said his government is still waiting for "clarifications" on how it would work and most importantly, whether it would apply to expatriate workers, as well as to those who have overstayed visas given for pilgrimage to Mecca. Mr Ahmed said Indians working illegally in the kingdom "would not be more than 30,000 to 40,000". "So far, they have not set out details of any scheme, so we have to see the small print of how they intend to handle this," Mr Ahmed said of the announced amnesty. One of the main questions his government has, he said, is whether an illegal worker who comes forward can get his status adjusted and remain here working.
When the UAE offered an amnesty for illegal workers in 2007, about 100,000 Indians returned home and a further 40,000 were permitted to regularise their job status and stay working, Mr Ahmed said. The embassies of other countries with large expatriate populations in the kingdom also said they were waiting for details of the programme. Paulo Saret, a vice consul at the Philippine Embassy in Riyadh, said: "We haven't heard a word from the Saudi authorities yet," said . "We want to know the parameters of it before we disseminate any information to our nationals."
A spokesman for the interior ministry, which is responsible for passports and visas, said he would try to get details of the programme for The National, but had not called back by yesterday afternoon. Although efforts are being made by the Saudi government to correct some abuses, critics say the fundamental problem is kafala, the sponsorship system. This system, which is widespread in the Gulf region, makes foreign workers vulnerable to abuse because it deprives them of their autonomy: they must surrender their passports to their sponsors, who also must give permission for the worker to change jobs or leave the country.
Bahrain abandoned its sponsorship system last year and on Sunday Kuwait announced that it would follow suit beginning in February. cmurphy@thenational.ae
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
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Fixtures
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Tips on buying property during a pandemic
Islay Robinson, group chief executive of mortgage broker Enness Global, offers his advice on buying property in today's market.
While many have been quick to call a market collapse, this simply isn’t what we’re seeing on the ground. Many pockets of the global property market, including London and the UAE, continue to be compelling locations to invest in real estate.
While an air of uncertainty remains, the outlook is far better than anyone could have predicted. However, it is still important to consider the wider threat posed by Covid-19 when buying bricks and mortar.
Anything with outside space, gardens and private entrances is a must and these property features will see your investment keep its value should the pandemic drag on. In contrast, flats and particularly high-rise developments are falling in popularity and investors should avoid them at all costs.
Attractive investment property can be hard to find amid strong demand and heightened buyer activity. When you do find one, be prepared to move hard and fast to secure it. If you have your finances in order, this shouldn’t be an issue.
Lenders continue to lend and rates remain at an all-time low, so utilise this. There is no point in tying up cash when you can keep this liquidity to maximise other opportunities.
Keep your head and, as always when investing, take the long-term view. External factors such as coronavirus or Brexit will present challenges in the short-term, but the long-term outlook remains strong.
Finally, keep an eye on your currency. Whenever currency fluctuations favour foreign buyers, you can bet that demand will increase, as they act to secure what is essentially a discounted property.
Types of bank fraud
1) Phishing
Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
2) Smishing
The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
3) Vishing
The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
4) SIM swap
Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
5) Identity theft
Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
6) Prize scams
Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
Four reasons global stock markets are falling right now
There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:
1. Rising US interest rates
The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.
Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”
At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.
2. Stronger dollar
High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.”
3. Global trade war
Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”
4. Eurozone uncertainty
Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.
Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”
The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”
FA Cup quarter-final draw
The matches will be played across the weekend of 21 and 22 March
Sheffield United v Arsenal
Newcastle v Manchester City
Norwich v Derby/Manchester United
Leicester City v Chelsea
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
