IMF raising volume on call to address anti-globalization anger

IMF chief Christine Lagarde has repeatedly stressed that giving in to protectionism will not help those on the margins and in fact will make matters worse by driving up prices and eroding global growth. (AFP)
Updated 21 April 2017
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IMF raising volume on call to address anti-globalization anger

WASHINGTON: As the global recovery gathers pace, the International Monetary Fund (IMF) is turning up the volume on its call for wealthy countries to address popular anger over the impact of globalization and head off the threat of protectionism.

The renewed push comes as finance ministers from 189 countries gather for the fund’s semi-annual meeting Friday and Saturday, in a tense atmosphere of rising anti-trade rhetoric in many advanced economies.
“This sentiment of populism in the views of many is fueled by the feeling of being excluded or being left out,” IMF chief Christine Lagarde said Thursday night.
“What better than more growth, more equitably shared, in order to respond.”
The IMF for years has been calling for countries to drive toward what it calls more inclusive growth with programs to help those hurt by globalization and trade — but typically it has centered on developing nations.
Now the focus is on advanced economies and the message has taken on greater urgency, amid anti-internationalist sentiment evident in the election of US President Donald Trump, as well as in the bitter French election campaign and last summer’s British vote to leave the EU.
Lagarde has repeatedly stressed that giving in to protectionism will not help those on the margins and in fact will make matters worse by driving up prices and eroding global growth.
But as the IMF raised its forecast for global economic growth to 3.5 percent for this year — a rare upward revision — Lagarde said it is time to address these concerns from “an economic point of view,” to help spread the benefits of growth to marginalized groups while preserving international cooperation.
Raghuram Rajan, former governor of the Reserve Bank of India (RBI), said the legitimate concern in advanced economies “reflects a cry of anger and for help.”
Governments should respond with “broad-based rehabilitation” of communities hurt by lost manufacturing — a situation nearly entirely due to technological advances rather than trade, even though trade is blamed, he said.
“We need to think seriously about rebuilding these communities... to lift up the forgotten man,” Rajan said in a lecture at the IMF entitled “Popular Insurrections,” which Lagarde attended.
“Industrial countries have large areas that need development,” Rajan said. But this “requires (a) certain amount of funding, and new thinking.”
It also may mean returning decision-making on some issues like trade and climate rules back to national governments, rather than leaving them in the hands of multilateral institutions — which have drawn the ire of many US, British and French voters.
The IMF said “hundreds of millions” of people have been lifted out of poverty through economic integration and technological progress, “helping to reduce global income inequality.”
The fund is calling for governments to use “well-targeted initiatives” to help workers adversely affected by free trade and other economic changes to find jobs in new industries.
In addition, they should direct spending toward establishing social safety nets to help with the loss of income, as well as improving education and training, the IMF said.


Dubai property developer Damac on hunt for land in Saudi Arabia

Hussain Sajwani
Updated 3 min 15 sec ago
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Dubai property developer Damac on hunt for land in Saudi Arabia

  • Brexit a “concern” for UK property market says Sajwani
  • Developer mulls investing “up to £500 million” on London project

LONDON: The Dubai-listed developer Damac says it is scouting for additional plots of land in Saudi Arabia, both in established cities and the Kingdom’s emerging giga-projects such as Neom.
Hussain Sajwani, chairman of Damac Properties, also said the company would look to invest up to £500 million ($660 million) on a second development in the UK, and that it is on track to deliver a record 7,000 or more units this year.
Amid a slowing property market in Dubai, Damac’s base, the developer is eying Saudi Arabia as a potential ground for expansion for its high-spec residential projects.
Damac has one development in Jeddah, and a twin-tower project in Riyadh — and Sajwani said it is looking for additional plots in the Kingdom.
“It’s a big market. It is changing, it is opening up, so we see a potential there … We are looking,” he said.
“In the Middle East, Saudi Arabia is the biggest economy … They have some very ambitious projects, like the Neom city and other large projects. We’re watching those and studying them very carefully.”
The $500 billion Neom project, which was announced in 2017, is set to be a huge economic zone with residential, commercial and tourist facilities on the Red Sea coast.
Sajwani said doing business in Saudi Arabia was “a bit more difficult or complicated” that the UAE, but said the country is opening up, citing moves to allow women to drive and reopen cinemas.
He was speaking to Arab News in Damac’s London sales office, opposite the Harrods department store in Knightsbridge. The office, kitted out in plush Versace furnishings, is selling units at Damac’s first development in the UK, the Damac Tower Nine Elms London.
The 50-storey development is in a new urban district south of the River Thames, which is also home to the US Embassy and the famous Battersea Power Station, which is being redeveloped as a residential and commercial property.
Work on Damac's tower is underway and is due to complete in late 2020 or early 2021, Sajwani said.
“We have sold more than 60 percent of the project,” he said. “It’s very mixed, we have (buyers) from the UK, from Asia, the Middle East.”
Damac’s first London project was launched in 2015, the year before the referendum on the UK exiting the EU — the result of which has had a knock-on effect on the London property market.
“Definitely Brexit has cause a lot of concern, people are not clear where the situation will go. Overall, the market has suffered because of Brexit,” Sajwani said.
“It’s going to be difficult for the coming two years at least … unless (the UK decides) to stay in the EU.”
Despite the ongoing uncertainty over Brexit, Sajwani said Damac was looking for additional plots of land in London, both in the “golden triangle” — the pricey areas of Mayfair, Belgravia and Knightsbridge, which are popular with Gulf investors — and new residential districts like Nine Elms.
Sajwani is considering an investment of “up to £500 million” on a new project in the UK capital.
“We are looking aggressively, and spending a lot of time … finding other opportunities,” he said. “Our appetite for London is there.”
Damac is also considering other international property markets for expansion, including parts of Europe and North American cities like Toronto, Boston, New York and Miami, Sajwani said.
The international drive by Damac comes, however, amid a tough property market in the developer’s home market of Dubai.
Damac in February reported that its 2018 profits fell by nearly 60 percent, with its fourth-quarter profit tumbling by 87 percent, according to Reuters calculations.
Sajwani — whose company attracted headlines for its partnership with the Trump Organization for two golf courses in Dubai — does not see any immediate recovery in the emirate’s property market, or Damac’s financial results.
“(With) the market being soft, prices being under pressure, we are part of the market — we are not going to do better than last year,” he said. “This year and next year are going to be difficult years. But it’s a great opportunity for the buyers.”
But the developer said Dubai was “very strong fundamentally,” citing factors like its advanced infrastructure, safety and security, and low taxes.
In 2018, Damac delivered over 4,100 units — a record for the company — and this year, despite the difficult market, it plans to hand over even more.
“We’re expecting north of 7,000,” Sajwani said. “This year will be another record.”