Tag Archives economy

Endemic Mismanagement?

The government’s consolidated closing accounts for 2009 has been released to much uproar of the press, fitfully followed up by parliamentarian chagrin and threats to question ministers and impeach them should they be found wanting. Why? Because although the authorised and assigned government budget for recurrent expenditures and projects for 2009 was BD2.484 billion, only spent BD2.082 billion was spent, thus not utilising approximately BD400 million which equates to approximately 16% of the total.

The most offending ministries are:

    1. Ministry of Trade & Industry which only spent 18% of its assigned budget
    2. Ministry of Education spent only 20%
    3. Ministry of Finance spent only 39%
    4. Ministry of Foreign Affairs spent only 46%, while
    5. MInistry of Health utilised only 49% of its assigned and approved budget.

This is shocking because one would be forgiven in assuming that those budgets weren’t just haphazardly assigned. They must have been required by the ministry which in turn must have (should have?) supported those requirements with projects supported by plans of action, milestones and justifications and required only as much as the projects demanded. So I wonder what transpired to have this much disparity, and is this shortfall acceptable in international standards?

I am rather disturbed by the top two non-spenders as they are key to the development of this country, one is tasked with producing the appropriately educated personnel who would wind up in acceptable jobs generated or at least envisioned by the Ministry of Trade & Industry. What’s even more worrying is that the very ministry which is tasked with setting the government’s budget seems to be not able to manage its own budgetary requirements! As to the MInistry of Health and its chronic bed and other health facilities shortage, why was 50% of its budget not utilised? I guess Foreign Affairs can run quite adequately without 54% of its assigned budget too.

What prompted this situation and why was such mismanagement tolerated? Is it a case of no oversight by the government on its own organs? Are there no internal audits performed throughout the year to ensure that funds are properly and appropriately employed?

I look forward to hear from the offending ministries’ justifications. Is it that the market reached over-capacity and couldn’t partake in some projects; therefore funds had to be sequestered for the future?

An honest look needs to be taken by parliament, the transparency and audit bureaus who should come up with proper recommendations to rectify this situation. Heads, if appropriate, must roll. At the very least, the worst three offending ministers need to be relieved of their duties. Barring excellent excuses, they have shown that they are not fit for the job.

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Cementing the GCC ties

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We’re having yet another “crisis” in Bahrain. This time, it comes in cementy flavour!

FOREIGN racketeers are being blamed for a cement crisis which has crippled Bahrain’s construction industry.The suspension of supplies from Saudi is costing Bahrain’s contractors more than BD4 million a day, says sources. [GDN 12.06.08]

Let me first confess that I don’t know much about the construction industry, nor do I know a lot about the building material manufacturing and supply. My company did make a corporate video for one of the largest manufacturers of bricks, pre-cast slabs etc a few months ago, and through that process I did gain a little bit of knowledge, but hardly enough to pontificate on the processes and economies involved in this vital industry.

What does surprise me in this “new new” crisis are several factors:

  • Why isn’t Bahrain self-sufficient in producing its own primary building material
  • Why do Bahraini traders and factories complain about not getting enough primary supplies from Saudi when they know that the Saudi government heavily subsidises that industry so that they would use their products for the local market?
  • Why does the GCC Secretariat even allow such disparate subsidies from any of its members?
  • If our governments have to resort to protectionist policies like we are seeing Saudi imposing – fairly or unfairly – then what hope is there for GCC-wide economic integration?
  • and does this mean that the so called unified Gulf currency is (or should be) dead?

Without access to these basic material, how can the country sustain its development?

We have seen the issue of the Muharraq Municipality specifically derailing plans for the creation of a cement factory in Hidd – citing environmental concern – even though an environmental expert has given assurances that it does not pose any threat to the environment (arabic) through a public hearing which none of the municipal officers bothered to attend. Sure, cement factories because of their inherent manufacturing processes contribute a lot to CO2 gasses, accounting fully up to 8% of the global emissions, but I’m not convinced that the Municipal council has taken that metric into consideration, my guess it is more localised and I would love to know their main objection.

Even without it (and others) being in the Hidd industrial zone, why can’t the government allow them to congregate in Hafeera? An area already full of crushers and pre-cast plants? Or maybe do what they’re trying to do now and buy and manage rice plantations in Thailand and the Philippines, outsource!

Whatever it is, let them solve the problem themselves without depending on Saudi or the rest of the GCC. A country that does not have resources of its own but that of unbound enthusiasm and creativity of its people can indeed conquer the world! Heck, the idea of the plantations is a brilliant one and should be extended, these could be the first steps in the creation of the Bahraini Empire which will eventually rule the world!

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15 seconds of fame = 1 billion?

Hardly, but a twit at the municipal council is vehemently opposing it for some farcical excuses, wrapped up in Class A Xenophobia. Here are some of Mr. Hameed Al-Basri brainfarts which he is using in the hope of putting the kibosh on the project:

it would result in the area being “invaded” by foreigners with different cultures and moral values

He also wants the land to be used for more “useful” projects which could benefit the surrounding villages:

“It could be used for a public park, car parks for residents or a government housing project,” he said.

“But the Northern Municipal Council members have taken the worst decision and that’s approving an investment project without properly studying it.

“I am worried that nearby neighbourhoods, whether in my constituency or Daih village, where the project would be built, will be invaded by people from different nationalities who don’t understand our culture and moral values.

“That’s not all. The area will see more traffic jams, more than what is making people complain at the moment.”

Aha. Okay, I agree that the country needs to revamp the road network and consider the traffic in 25, 50 and even 100 years from today, and they are doing a lot of roads network expansion now, much to the chagrin of a lot of drivers, but one hopes that with these developments we’ll be much better off in a few months’ time. But this ludicrous objection to a huge investment of over a billion dinars is, well, ridiculous. Having an elected councillor whose main job is to suggest solutions to zoning and the various other municipal matters object to such a lifeline in his area is insane.

He doesn’t stop there of course, he’s now dug himself a hole so he must proceed to dig even deeper:

Basri Class A BrainfartMr Al Basri said just because the investor was promising residents jobs, it did not mean the project should be approved.

“What jobs can the project offer? As security guards or ushers, or cleaning plates after the rich finish their food?” he asked.

“In the end, the area’s unemployed will not get good salaries because the investor is not there to offer high salaries, but to make a profit.”

He said that from his experience and the projects he has approved in the Seef District, Sanabis and Daih, only 100 Bahraini jobseekers had been employed.

While 100 jobs created is much better than none at all, and while his suggestion that of those 100 the majority received menial positions might be true, what he should be concerned with, especially in that area of Bahrain which is renowned for “skirmishes” with the police in almost every single weekend, he should be happy that projects are being considered for that area and that its local residents are receiving the benefit of coming out of unemployment. But he ain’t happy.

Mr Al Basri hoped other councillors would review their decision and stop the project.

Well, thankfully someone from his own party is rejecting his brainfarts wholesale:

Municipal councillor Hameed Al-BasriHowever, Northern Municipal Council towns and villages development committee chairman and the project’s area councillor Sayed Ahmed Al Alawi said that Mr Al Basri’s push to halt the project would not affect it.

“We are both from the same municipal bloc – Al Wefaq – but Mr Al Basri has never given me a call saying that he has a problem with the project,” he said.

“I have talked with Al Wefaq bloc president and area MP Shaikh Ali Salman and he was in support of the project, saying that he would work on securing the benefits for the people, which I am also currently working on.

“So far, we have managed to reach an agreement with the investors to have a public park and a mosque built.

“The hotel will not offer alcohol and will abide by Islamic and traditional values.

“The investor has agreed to our terms without any fuss, so why is Mr Al Basri – who is approving similar projects in his constituency – upset?”

Mr Al Alawi said that the Royal Court had recommended the project and when it came to the council, it was just a formality to look at it.

“This project has been supported by the government, so it wouldn’t leave the area without a proper infrastructure and other services. On the contrary, it is an opportunity to have new roads, sewage networks and other facilities in the area,” he said.

“Mr Al Basri should quit fighting the project because he will not change our decision. He should instead focus on getting public services from investors in his constituency.”

In short, he’s told by his colleagues to shut the hell up and not to be such a complete eejit.

I hope he listens.

Incidentally, if you want to see some very nice pictures of current and future projects happening in Bahrain, scoot on over to my friend’s Fred Haentjens’ Flickr set. Well worth having a look.

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Zoning (almost) completed

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The National Plan going ahead to 2030 looks rather promising. We finally have the island zoned after an 18 month study by Messrs. Skidmore, Owing and Merryll, Esq. in which a complete infrastructural revamp is to take place to accommodate the country’s sustained development. I’ve not seen the actual study yet, but from what I read in the newspapers it’s a job well done:

The newly-completed National Plan includes developing ultra-modern transport systems and highway networks, linking self-contained regions with their own health, education, commercial and leisure services.

[…]

The zoning will define reclamation lines and identify specific areas for commercial, residential, industrial and tourism development, he told the GDN.

[…]

“The plan will shape growth to prevent traffic congestion caused by increased traffic volumes and strengthen linkages throughout the Gulf region, incorporating causeway access from Saudi Arabia to Qatar.”

[…]

“All developments will be undertaken in partnership with the private sector and the government will create an atmosphere whereby the private sector will be able to invest safely and comfortably,” he noted.

[…]

“The message of the plan is simple: Bahrain has reached a critical juncture and co-ordinated national planning must guide the way to the prosperous, creative and sustainable future Bahrainis expect and deserve.”

[…]

According to a decree issued by the Crown Prince last week, any change to the plan will be carried out with the full co-ordination of the EDB, the National Planning Committee and the municipal council.

Excellent and about time too. Maybe now we can actually have residential areas without bloody sheesha shops polluting the area, haphazard commercial schools and kindergartens within clearly designated housing neighbourhoods which happens because some “entrepreneur” builds a house and then rents it – with apparent full municipal approval – for use as a school, and maybe a real entrepreneurial person or developer can buy land without the threat of that development being surrounded by garages or factories in a very short space of time, etc.

But a the question that remains in my mind is that considering that 97% of the land (and sea?) is in private hands, where will the government find those necessary stretches of lands to develop these promised projects on?

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Will the UAE depeg?

Well…

UAE Vice-President and Prime Minister Sheikh Mohammed bin Rashid al-Maktoum has confirmed the federation is considering removing the dirham’s peg to the US dollar, while saying he is confident that inflation in the federation will solve itself.

I’ll take that as a “maybe“.

How about Bahrain?

Bahrain’s crown prince said on Saturday that even talking about revaluing the local currency against the dollar was irresponsible and the country had no plans to adjust the value of the dinar.

I’ll take that as “no effin’ chance boyo“!

So how are your purchases doing in the ever increasing – and completely obfuscated – inflationary economy in Bahrain? They say that even dog food is up by BD2 per bag and it’s set to rise again next week, so go and stock up!

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Beneficial conflicts

I’ve just come back from a very interesting talk given by Dr. Khaled Abdulla who was a guest speaker at tonights Rotary Club of Adliya meeting. Dr. Khaled is one of the pre-eminent economists in Bahrain as his very successful career asserts. In tonight’s talk entitled “Oil Prices and Impact on the Economy“, he posed a loaded question: “Why is it that in this region of the world we are faced with a major conflict whenever there is an appreciable hike in the price of oil?”

Iran, you’re next!He went on to list the first Gulf War (Iran/Iraq) which was heavily financed by the Gulf’s monarchies; the second Gulf War which was the invasion of Kuwait by Iraq, the third and on-going one is the Iraqi occupation by the USA and he suggests that the war clouds are already gathering rather heavily for a fourth conflict evidenced by the saber rattling by the USA against Iran.

These conflicts, he suggests, are nothing more than “correcting” the US deficit against the increase in its oil import bill. How that correction is made is by the US selling arms to us hapless Arabs! Robert Gates seemed to have confirmed that in a recently concluded security conference in Bahrain:

Claiming Iran may secretly have resumed efforts to build a nuclear weapon, the US defence secretary, Robert Gates, called for intensified international pressure on Tehran and urged Saudi Arabia and other Gulf states to develop a joint air and missile shield to ward off future threats.

It’s easy to strike Dr. Khaled’s observations as nothing more than yet another Arab conspiracy theories, but one would be best advised to think a little about these conditions and come to a studied conclusion. There is at least a semblance of truth in them if only by coincidence but certainly merits some more investigation.

Regardless of what your position is; the saber rattling is very real and multi-billion dollar deals have already been announced with the sale of Patriot 2 and 3 to both Saudi and the Emirates to the tune of US$11 billion or so. Pocket change to both governments it might be, but those funds could have easily been diverted to where they are needed most in our community: education, health, infrastructural or even just kept in the piggy-bank for future generations.

But there could be a fly in the American’s ointment. Our crown prince specifically is speaking rather candidly against confrontations, especially military ones. Being a rising economic and reforms champion, I guess he doesn’t want yet another war on his watch. Just imagine how fast the glut of cash we “suffer” from currently would dissipate if we were to be afflicted with yet another military conflict. And guess where that glut would migrate to.

Even more important than cash migration, the very important social reforms about to be enacted would grind to a screeching halt, resulting in our regression yet again for one or more generations.

It is high time that we ignored the warmongers. It is time to take care of ourselves first and foremost for a change. The economic, educational and labour reforms are nothing short of existential. They are critical to our immediate future and cannot wait any longer for their implementation, let alone being delayed by at least a generation due to yet another conflict.

The only valid option available to us is the diplomatic one. Maybe it is time to expand the GCC to be truly representative of the Persian Gulf! If that’s what it would take to keep the reforms on track, I’d welcome Iraq and Iran to be constructive members of the new GCC coalition.

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Scorned by a friend, championed by the enemy?

There must have been quite a run on dental surgeries over the last couple of days which continues today and possibly for a few days to come. The reason is not a sudden national oral hygiene awareness, but a condition borne of gnashed teeth to the point of shattering!

King Hamad meets Ahmedinejad

Why I hear you ask? Well, Ahmedinejad was Bahrain’s Santa yesterday. Yes, I know, his timing has always been off a bit, it’s still a few weeks until the presents are opened, but he came bearing very welcome gifts nonetheless, ones that the whole nation – especially the government and business community – has afforded them a huge sigh of relief. Bahrain, no thanks to our familial-tied Qatar, will now have guaranteed access to up to 2 billion cubic feet of gas a day to run its power stations which subsequently will directly shore the burgeoning plethora of energy-hungry projects; hence, one could say that Iran – much to the chagrin of even some parliamentarians and rabid anti-Iran personages – will have a direct hand in Bahrain’s future growth.

There must have been quite a run on dental surgeries

But, will that now translate into a recognition that Iran will have much more political influence over decisions made in this country? I would say very probably. After all, one doesn’t bite the hand that feeds. One hopes; however, that influence is somewhat tempered with a modicum of good sense and neighbourliness.

Much like the Iranian nuclear ambitions, I don’t particularly know where the fallouts of this agreement will take us. I am willing to give it a chance and a good measure of the benefit of doubt as I would assume that the architects of such vital agreement are a bunch of cool and calculating business heads rather than ones who are given to believe their own rhetoric. But then it could also be purely political in which the price paid could well be the US Navy is sent packing! But let’s just assume that it’s all business first and all other considerations second.

will that now translate into a recognition that Iran will have much more political influence over decisions made in this country?

You’re more than welcome Father Ahmedinejad and thanks for the prezzies. They are much appreciated. You should have stayed and chilled with us a bit. Maybe now that business is once again firmly established between our so far estranged countries, this minnow will dampen a bit of your fire to the better of all concerned.

It is indeed business which is the catalyst of rapprochement, rather than the naturally divisive worlds of religions and politics.

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Corruption Index slips again

CPI comparison table from 2005 - 2007

When the crown prince announced that we must eradicate corruption in our country, he couldn’t have timed it better.

I don’t know whether the thing that prompted both him and the prime minister to reiterate their intention to correct this situation is due to them receiving advance copies of the 2007 CPI Report or they were genuinely alarmed at the depth of corruption uncovered which gave rise to accelerating corruption cases brought against various companies in which the government has a stake in, but I am happy enough to give them the benefit of the doubt in that they did notice the money being bled from public funds and made the required political decision to staunch that flow.

Transparency International logo

Political decision alone is of course not going to resolve this down-ward spiral. What would help is primarily reforming of the judicial system and separate it completely from the executive – practically as well as constitutionally – and remove influence peddling and interference to subvert the course of justice. That is in general as far as corruption cases are concerned, but specifically competent courts and arbitration panels should also be enacted under the same criteria to adjudicate business cases expeditiously. Business cases have been known to go on for years if not decades. This of course gives comfort to corrupt individuals and practices. Who of us don’t remember the various corruption cases through the past few years?

Countries with a significant worsening in perceived levels of corruption in 2007 include Austria, Bahrain, Belize, Bhutan, Jordan, Laos, Macao, Malta, Mauritius, Oman, Papua New Guinea and Thailand.

The most important factor in winning against corruption of course is the presence of social justice and good governance, both of which are somewhat rather lacking, and this latest CPI report is symptomatic of this condition and should act as a clear warning that intrinsic changes must be enacted to bring the country back to a correct and sustainable path in which every Bahraini takes ownership in Bahrain’s future.

This is an alarming situation we are living in. It gave rise to the dangerous down-ward spiral we have entered with corruption; Bahrain – one might say – has become “حارة كل من إيدو إلو” (taking the law into one’s own hands / acting with impunity) – in the great words of Duraid Lahham.

How do we rise above this then?

Establish social justice and good governance. No one, no one, should be above the law. A simple formula that requires quite a lot of sacrifices from the leadership much more than it would from the common man. It means loosening the control strings and believing in Bahrainis. It means learning to genuinely trust each other. It means the eradication of sectarianism in every form it takes. It means the equal distribution of wealth. It means recognising flaws and genuinely fixing them.

Glossing over these issues and just using that tired adage that “we are one family” just won’t cut it any more. Action on the ground is needed, otherwise I can guarantee that the 2008 ranking will be even worse. Even staying still is not an option any more, others will continue to overhaul us as some already have.

How about starting with an honest and complete change of the cabinet rather than just reshuffling it? It is plainly obvious that real new capable persons be either appointed or elected into all of those positions with complete disregard to tribalism and sectarianism should be sought. Positions which should be answerable to parliament to ensure that should financial or administrative corruption be discovered, it is effectively and severely dealt with.

We have good men and women throughout our society who could shoulder these burdens, why not give them a chance to do so?

Once again, reports like this should not be discouraging. They are providing us with mirrors through which we can plainly see ourselves. What we do with that image is completely up to us.

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The Bahraini Economy Excels

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I’ve got some Good News™ for you guys:

As an exercise in deflating pessimism it couldn’t have been better. The merchants of doom and gloom have been predicating their comments on declining oil reserves for years, with the implicit rider that the entire economy of the kingdom was destined to plummet down a slippery slope.

Now a report from the Central Bank of Bahrain (CBB) has left the pessimists spluttering and bereft of ammunition for the slightest tale of woe. Oil revenues are up. Inflation is minimal (something Dubai and Qatar would love to be able to claim). Exports are up. The trade surplus is up. The heart and homeland of banking in the Gulf and beyond is riding the crest of a wave and – perhaps best of all – the vast majority of the new jobs that have been created in the past 12 months are in the private sector.

The report, a first of its kind issued on August 16, showed that the kingdom’s gross domestic product (GDP) increased by 7.1% in 2006, driven by strong local and foreign investment, a record high current accounts surplus and an expanding private sector.
Oxford Business Group – Bahrain Volume 117 – 24 Aug, ’07

That, my friends, is Good News™ and it will be a lot gooder when that percolates down to the rank and file.

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Mine is bigger!

The race for the tallest building has never abated, I don’t think, since man started building abodes, but now it is just getting silly:

But Burj Dubai may not hold the record for long. Another Dubai skyscraper, Al Burj, is slated to begin this year with a rumoured height of 1.2 kilometres. More tentatively, two other kilometre-tall towers are planned in the region: the 1001-metre Mubarak al-Kabeer in Kuwait and a 1022-metre tower in Manama, Bahrain.

World tallest buildings
click for larger

We don’t even have the infrastructure to handle the cars on the roads – and by “we” I include all the Arab countries – and we are lacking in just about every other necessary infrastructural and health and safety not to mention human rights and political representation – oh for God’s sake, let’s forget all of those intangibles for a minute, do we just have the fire-fighting and emergency capabilities to deal with such heights? Or should we presume that the fire and emergency services are going to wait downstairs until the mitigating circumstance just disappears before intervention?

God help those who are in the taller buildings in Bahrain. And doubly so for those in the tallest ones.

Somehow I think the priorities are bit screwed up in our countries.

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