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Will the global credit crunch finally put an end to the emirate’s building boom?
Dubai’s boom has long been fueled by the notion that the region’s oil economy would one day betray the tiny emirate. With shrinking hydrocarbon revenues now a single-digit percentage of its GDP, diversification into tourism, finance and other services was a no-brainer. Even if oil prices slumped—as they have in recent weeks, to around $75-a-barrel—the city’s rapidly multiplying hotels and resorts could still be counted on to attract sun-seekers from Europe and Asia. The result: a supercharged real-estate market that includes some $300 billion in recent projects.
Yet with stocks around the world tumbling and credit markets frozen, Dubai’s heavily leveraged building binge is starting to raise concerns. A recent Moody’s report found that Dubai’s leverage now exceeds its GDP, and is likely to continue to outpace growth for another five years. That makes access to international credit markets particularly important. Unfortunately, loans are hard to come by these days. It doesn’t help that Dubai’s real-estate prices seem to be cooling somewhat (even if average returns are still in the double-digits). Finally, and perhaps most troubling, slumping world stock markets and rising unemployment are likely to keep non-Gulf tourists at home, just when those revenues are needed most.
Few believe that Dubai is really in danger of defaulting on its debt. It is, of course, only one of seven emirates in the U.A.E.; vastly wealthier Abu Dhabi or other Gulf countries would almost certainly rescue their neighbor in the event of a crisis. In a proactive move, the U.A.E. recently announced plans to guarantee domestic bank deposits for three years and inject some $30 billion into local banks. As for Dubai, any potential rescue would be relatively inexpensive, considering the hundreds of billions of dollars sloshing around in the region’s sovereign wealth funds.
Still, with oil and natural gas prices falling, those funds are no longer unlimited. And any intervention close to home in the Gulf could make sovereign-wealth funds even more skittish about investing abroad in foundering U.S. banks, as they did late last year. That could remove an important prop for struggling Wall Street firms. “A lot of these funds invested [last year] and got burned,” says David Rubenstein, managing director of The Carlyle Group, who spent much of last week in Dubai. “I don’t think any part of the world is immune.”
Gulf-watchers began raising eyebrows earlier this month, when two Dubai mortgage lenders, Amlak Finance and Tamweel, announced they were merging. Still, even if Dubai is likely to suffer from the lack of liquidity in the international credit markets, its fundamental problem is of a slightly different nature than the derivative-fueled bust of the American mortgage crisis. “There’s virtually no securitization here,” says one senior private-equity investor in the U.A.E., who asked not to be named so he could speak more frankly. “Markets are not very evolved here.” The problem, instead, is that the speculative construction has been so feverish that banks have overextended themselves. “They just don’t have the cash because they’ve been making these crazy loans,” says the investor.
Dubai’s building boom is so new that many of those loans are only beginning to be repaid. If tourism slows for any protracted period of time, it could leave developers vulnerable. Take, for example, the emirate’s newly opened Atlantis resort, a massive pink structure complete with shark tank and palm-shaped man-made islands. For now it’s packed—and not only with oil-rich Gulfies. “You walk around, and the voices you hear are all British and Russian,” says Richard Rivlin, author of “Desert Capitalists.” Yet “if the Brits are feeling pain in their pocketbooks, they’re going to be more worried about making their mortgage payments than going on a weeklong holiday in Dubai.”
There is, however, one category of visitor that is still making the cross-Atlantic trek to Dubai. As Wall Street firms have gone bust, “you’re starting to see a lot of New York resumes floating around,” says the private-equity investor, with more than a hint of schadenfreude. An influx of cash-strapped former masters-of-the-universe isn’t exactly the kind of visitor the emirate’s economic planners had in mind. But at least there are some people out there who still believe in Dubai’s promise.
© 2008
Source: http://www.newsweek.com/id/165400
It wasn’t all for show. China opts to keep in place some of its Olympics Games pollution control.
Frederic J. Brown / Getty Images
By Popular Demand: Limits on auto traffic will remain on a six-month trial basis
By Melinda Liu | NEWSWEEK
Published Oct 11, 2008
From the magazine issue dated Oct 20, 2008
And soon the government is slated to unveil 1,000 clean-energy public-transport vehicles in 10 Chinese cities. Beijing introduced 23 fuel-cell cars, 470 electric vehicles and 102 hybrids during the Games, and drivers loved them. Wan says local officials and citizens are warming to the green vehicles, too. “The Olympics has been a time for demonstrating new kinds of high technology,” he says. “It’ll be just like people who have an old TV at home—they’ll change it when they see a new LCD screen.”
Another improvement has been in public transportation. Among Beijing’s Games-related initiatives were a new subway line, an airport rail link and reduced bus fares. Such transit saw heavier use as drivers were forced off the roads. Bluer skies and fewer traffic jams have since persuaded more than two thirds of respondents in a recent survey to support the traffic controls. New rules will take 800,000 vehicles off the streets daily and require ordinary citizens to take public transport one day a week.
Of course, the battle is not over yet. Parts of the Olympics pollution crackdown can’t be sustained on a permanent basis, such as shutting down construction sites and factories inside Beijing and closing some factories in neighboring provinces. That means pollution is likely to return in the coming months, if not to previous levels. Beijing’s pollution index in August was the lowest in a decade—but it quadrupled in early October after Olympic traffic restrictions were relaxed. And private-car owners—and China’s powerful auto industry—may vigorously protest the new regulations in hopes of persuading authorities to scrap them when the trial period ends next April.
Indeed, the backlash has already begun. Within two hours of the announcement of the new traffic restrictions on Sept. 28, thousands of Netizens posted complaints on the China’s leading web portal, sina.com, grousing that the new measures discriminate “unfairly” against car owners. “There is still a debate over the vehicle ban, even though the government is determined to uphold the air quality, and is getting a lot of support from ordinary people,” says Mao Shoulong, a public administration expert at Renmin University. This resistance is one reason Wan—who worked for 10 years at the German automaker Audi in vehicle development and strategic planning—has trained his sights on building cleaner cars, not banning them entirely. He says the government is “trying its best” to build on green vehicles introduced during the Games. If all public transport vehicles were switched to clean energy, Wan says, the sector would reduce fuel consumption by nearly 25-30 percent and cut emissions by a quarter. That could outstrip the benefits of halving the number of buses and taxis currently on the roads. In other words, it would let Beijingers keep their blue skies—and their beloved cars, too.
© 2008
Source: http://www.newsweek.com/id/163579?from=rss
Activists back move to slash emissions by 90 percent, but have concerns
Sources of airborne lead in the United States have included mines such as one that used to operate near Picher, Okla. This sign reminds residents of lead hazards from the mine, which is now a Superfund site.
Charlie Riedel / AP
msnbc.com staff and news service reports
updated 4:37 p.m. CT, Thurs., Oct. 16, 2008
WASHINGTON – Faced with a court order to set a new standard, the Environmental Protection Agency on Thursday announced it would order industry to slash the amount of lead allowed in the nation’s air by 90 percent.
EPA officials said the new limit would better protect public health, especially that of children.
“Our nation’s air is cleaner today than just a generation ago, and last night I built upon this progress by signing the strongest air quality standards for lead in our nation’s history,” Stephen Johnson, the EPA administrator, said Thursday. “Thanks to this stronger standard, EPA will protect my children from remaining sources of airborne lead.”
The new limit — 0.15 micrograms per cubic meter — is the first update to the lead standard since 1978, when leaded gasoline was phased out. That is 10 times lower than the previous standard, which was 1.5 micrograms per cubic meter.
The new standard will require that the 16,000 remaining sources of lead — including smelters, metal mines, and waste incinerators — to slash their emissions.
“More than 6,000 studies since 1990 have examined the effects of lead on health and the environment,” the EPA noted in a statement, “Some studies have linked exposure to low levels of lead with damage to children’s development, including IQ loss.”
A representative for the Association of Battery Recyclers said the new standard would be difficult to meet. Several members of the group, which represents 14 facilities that recycle lead from car batteries, met on Oct. 2nd with the White House and EPA. They were hoping for a higher standard.
“We have put in the best controls and we are going to still have compliance problems,” said Robert Steinwurtzel, an attorney for the group. “We explained to them our concerns that if the standard was promulgated at lower end of EPA’s range it would threaten viability of industry.”
EPA took experts’ advice
Environmentalists hailed the move, but said the agency could have done more to monitor emissions to ensure that the standard is met. Along with the announcement of a new standard, EPA said it would require lead to be measured in 101 cities across the country, and near sources that release at least one ton of lead per year. Advocates said Thursday that EPA’s plan would exclude hundreds of sources of lead.
“The EPA has followed the advice of its own advisers and public health advocates to set a more stringent standard for airborne lead,” Gina Solomon, a health expert at the Natural Resources Defense Council, said in a statement.
In contrast, the Bush administration did not follow its own staff’s advice or its science advisers when it set new health standards for smog and soot that were less stringent than recommended.
Solomon also noted, however, that the EPA only has half as many monitoring stations as it used to have. “With less than 200 air lead monitors nationwide, scientists don’t even know how much lead is in the air in most communities,” she said. “Now that the EPA has recognized the severity of lead exposure, it must rebuild the monitoring network.”
“EPA must place air monitors at the locations where they matter most — downwind of the big polluters,” she added. “EPA’s plan for only 236 new or relocated monitors is not adequate to detect problems, since there are thousands of serious lead polluters nationwide.”
Sen. Barbara Boxer, D-Calif. and chair of the Senate environment committee, shared that view. “I have concerns about the EPA’s monitoring plan and its failure to fully protect communities near dangerous sources,” she said in a statement. “I will work to ensure that the standards as well as the monitoring program protect children from toxic lead pollution.”
The NRDC was also concerned that the EPA will allow companies to average lead exposures over a three-month period. “That means that large but brief ’spikes’ of lead emissions from smelters and other polluters could contaminate the soil of playgrounds and backyards even in some areas that are in attainment of the new standard,” Solomon said.
Lawsuit led to action
The EPA acted after a lawsuit brought by the Missouri Coalition for the Environment led a federal court in 2004 to order a review of the lead standard.
The group sued on behalf of two former residents of Herculaneum, Mo., the home of the last lead smelter in the U.S. The smelter has repeatedly violated the older health standard for lead in recent years, and blood taken from children in the area in 2002 showed elevated concentrations of the toxic metal.
The court later directed the EPA to issue its final rule by midnight Wednesday.
The lawsuit charged that the EPA had failed to review the lead standard every five years as law requires. Since 1990, more than 6,000 studies have examined the effects of lead on health and the environment, according to the agency.
“They still have to enforce it,” said Kathleen Logan Smith, executive director of the coalition. “But it is there. It is a start.”
No later than October 2011, EPA will designate areas of the country that fail to meet the new standard, requiring state and local governments to find ways to reduce lead emissions.
Based on air quality data from collected from 2005-2007, 18 counties in Alabama, Colorado, Florida, Illinois, Indiana, Minnesota, Missouri, New Jersey, Ohio, Pennsylvania, Tennessee and Texas would fail to meet the standard.
EPA said the cost of the reductions would be between $150 million to $2.8 billion, but the standard would produce economic benefits of approximately $3.7 billion to $6.9 billion. EPA assumed that children would be smarter and earn more money as a result of less lead in the air when it calculated the benefits.
The Associated Press contributed to this report.
Source: http://www.msnbc.msn.com/id/27216428/wid/18298287/
Temple’s elaborately sculptured stones fall prey to car exhaust fumes
An engineer uses laser beams to remove the black crust caused by pollution from decorations on the porch of the Caryatids of the Erectheion temple on the Acropolis.
By Deborah Kyvrikosaios
updated 10:49 a.m. CT, Fri., Oct. 17, 2008
ATHENS – In the past two and a half thousand years, the temples of the Acropolis have suffered fire, bombing and earthquake. Now, scientists are trying to save them from a new modern enemy: pollution.
Standing on a hilltop at the center of Athens, a city of 4 million people, the Acropolis’ elaborately sculptured stones have fallen prey to a film of black crust from car exhaust fumes, industrial pollution, acid rain and fires.
A team of Greek engineers and restorers are using an innovative laser technology system to clean the surface of the ancient monuments, uncovering colors and ornamentation hidden for decades.
“It is very serious,” said Maria Ioannidou, director of the Acropolis Restoration Service, of the pollution. “It destroys sculptural, structural and painting details. One of our aims is to regain these cultural details using new technology.”
For years the team tested 40 different methods, including mechanical and chemical processes, to find the safest solutions to restore the white of the marbles without losing detail.
The winner was the brainchild of Crete’s Foundation for Research and Technology, which created a system that uses two laser beams of infrared and ultraviolet rays simultaneously.
These rays have been used separately to clean ancient marble, but it was found that one left a yellow tint while the other left a gray one. The new system blasts off layers of black film leaving the marble details intact, without discoloration.
But it is a risky process.
“If you remove something you cannot put it back in place, so we must be quite sure that we remove unwanted pollutants and leave … all the information on the original surface,” said Evi Papaconstantinou, the chemical engineer in charge of the team.
The system was first used on the sculptures of the west frieze of the Parthenon temple in 2004. Now the team has begun a second operation on the porch of the Caryatids, where besides pollution they must erase soot from fires and the mistakes of past restorers who tried to mend the roof with cement.
Scientists first scan the marbles with ultrasound and an infrared imaging and spectroscopy system to reveal what lies beneath the black crust. To their astonishment, they found colors, ornamentation and script that had been hidden for years.
Even wearing goggles, restorers can work only for two hours a day because of the flashing rays from the laser. They lie on a reclining doctor’s chair to carry out the time consuming process on the roof inch by inch.
Restoring the Caryatid porch is expected to take one year, but the cleaning will continue as long as pollution persists.
“The conservation team will remain on the rock because the marble is alive. It will remain exposed to the atmosphere,” said Papaconstantinou.
For years, archaeologists and scientists have debated how to protect the monuments from pollution, some even suggesting the temples be covered with domes. The creation of an Athens subway helped reduce pollution, but vehicles still cram the streets and the Greek capital remains blanketed in a thick smog.
Acid rain has eroded some fine details from the porous marble of the Acropolis sculptures, including the Caryatids, and have had to be moved to museums and replaced with replicas.
“We can’t stop the pollution, but we can lessen the effects,” said Ioannidou.
Copyright 2008 Reuters. Click for restrictions.
Source: http://www.msnbc.msn.com/id/27237685/wid/18298287/
An environmental expert talks about the challenges of helping disadvantaged communities deal with pollution and climate change at a local level.
By Daniel Stone | NEWSWEEK
Published Oct 21, 2008
The way people are affected by the environment is often presented on a global scale—tides rising or forests dying as a result of climate change. But the way human beings have a direct impact on the planet is often more visible on a local level. Communities closer to industrial areas may be affected by higher than average asthma rates, for instance, and towns with poor water treatment or slow clean-up from disasters may show a disproportionate number of children with developmental problems.
A report released today by two environmental organizations, the Blacksmith Institute and Green Cross Switzerland, found that localized pollution is the leading contributing factor to disability and disease in communities across the world. Even in the United States, air pollution and contaminated water sources result in death, persistent illness and neurological impairment for millions of people. And children, researchers found, are usually disproportionately affected.
Activists for environmental justice claim that the people most affected usually lack the time or resources to fight against factors that will affect their health. But the problem, says Julie Sze, director of the Environmental Justice Project at the University of California, Davis, is rarely politically motivated, at least not explicitly. It’s more an issue of business-focused zoning and lax regulatory control. It can also be a symptom of the larger inequality in America, which often falls along race and class lines. Sze spoke to NEWSWEEK’s Daniel Stone about the extent of environmental injustice and what can be done. Excerpts:
NEWSWEEK: What’s the scope of this type of environmental injustice? How large is the problem?
Julie Sze: Globalization has really allowed injustice to really go global. The term really describes all different types of problems. Some people use it to describe climate change and how that affects people disproportionately in the third world. It’s not [a single] issue but more an analytic frame that describes environmental injustice, so you can apply it to lots of different topics.
Problems like ground-water contamination and lack of clean air are found more in developing countries and more disadvantaged communities. How big is the problem in the U.S.?
You see it more and more in the U.S. There’s a huge body of research that looks at the kind of global contaminants that you’re talking about—groundwater contamination, toxic expulsion from refineries, whatever—in the U.S. It’s definitely [happening] in the U.S., because there’s inequality in the U.S.
What causes that? Is it local governments that are corrupt? Or officials who are out of touch with the people their decisions affect?
It’s hard to generalize. A lot of it is different in different regions. For example, in the Southeast, you have large communities of African-Americans who live around the oil refineries down there. It can also be a factor of employment discrimination. If you look at [the effect of] nuclear mining on uranium[-rich] communities, that’s very different, it’s an entirely different problem. It’s very hard to say what causes it. It’s often historical and plays in with different factors, things like race, class, both class and race, zoning laws and, of course, [who has] interests in political decisions.
New Orleans post-Hurricane Katrina comes to mind as affected by environmental factors and lack of appropriate policy. Are there other communities with similar issues?
I’ve looked at New York. A lot of it there is industrial pollution. Black and Latino child-asthma rates are almost eight times the national average. That plays into the zoning history that concentrated all these industrial developers in the same place. Asthma is just one case. I’ve looked at the San Diego and Tijuana area, where people are affected by trade between [the two cities] because zoning around the border can often be more lax.
Is it possible to chart who’s to blame in each instance?
A lot of it has to do with very general things. In New York, again, it’s an issue of zoning. It’s not targeted. Decision-makers made decisions to make Manhattan less industrialized and that pushed a lot of industrialization—which usually pollutes the most—into the outer parts of the city. So how do you implicate that? It’s just the law and regulations, but it’s never politically calculated [to target people].
Is the problem compounded by the fact that these communities lack the resources and time to assemble?
Absolutely. It’s all about resources and access to decision making. One of the slogans behind environmental justice is giving people “a place at the table.” There are lots of elements to environmental justice: access to decision makers, access to legal resources and many others. It’s not surprising that middle- and lower-class communities mobilize differently.
Is there a solution?
On some levels, people are very aggressive in trying to deal with this, both with regulatory framework and through legislation. California, for example, has over 20 laws that deal with environmental justice. So I wouldn’t say it’s a lost cause. I wouldn’t want anyone to think that there’s no way we can deal with any of this.
The term “environmental injustice” implies morality — that those who aren’t affected have a responsibility to act and speak up for those who are. Is there a national, even global responsibility here?
Yes, I think part of the responsibility is understanding that different groups experience their world according to circumstances that are different. Even if you’re not affected, you’re still connected to that person.
So how can unaffected communities play a more vocal role in protecting affected communities?
In Europe, and I think this is really interesting, they have a very different fundamental approach to dealing with this. It’s called the precautionary principle, which California is now also using. It basically says that instead of proving that something causes harm, you have to prove that it doesn’t cause harm. That affects how things get produced and how people think about development. That’s a really concrete example of how we can do better, and where we’ll end up, in comparison to the Europe, if we don’t.
© 2008
Source: http://www.newsweek.com/id/165013
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