Property investment in Dubai

[WAJsal]

RECENT data from the Dubai Land Department shows that Pakistanis have purchased property worth more than Rs445bn in the years 2013 and 2014. This is a staggering number, although it is worth bearing in mind that there is no evidence yet that it is all ill-gotten gains.

Nevertheless, considering the economy has been sluggish at best during these years, with growth rates remaining below 4pc and large-scale manufacturing coming in at a dismal 2pc or lower, it is hard to understand where this large sum of money came from.

Read: Pakistanis share 8pc in Dubai property market

The same years saw spiralling inflows into other speculative trades well. Market cap in the Karachi Stock Exchange, for example, increased by 42pc in the same years and the local property market too, going by anecdotal evidence, has been booming. In fact, market cap in the KSE between January 2011 and February 2015 has increased by a staggering 161pc even as the number of listed companies has shrunk.

Also read: Pakistanis bought property worth 16bn dirhams in Dubai

Such outsize sums of money flowing into the speculative trades as the rest of the economy languishes in low growth points towards a key dysfunction. It indicates that for a certain segment of the population, incomes have continued to grow. It also indicates that these incomes find no profitable avenue for reinvestment within the country and are therefore diverted into speculative trades where returns are the result of increasing sums of money landing into the trade every year.

Questions need to be raised on both counts therefore. Where are the incomes that produce these flows being generated? And why are they opting out of acquiring productive stakes in the economy, opting for speculative returns instead?

Also read: KSE index breaches 35,000-point barrier

More specifically, it is worth asking if money that leaves Pakistan for investment in Dubai property is asked to furnish answers as to its source at any point. Source of funds questions need to be asked at some point, not only to detect ill-gotten gains, but also to curb tax evasion. The sums flowing into Dubai property will use formal channels and can, therefore, be detected. For a country known for its lack of tax compliance, tapping into this stream should be an important priority. But it stands to reason that a large number of individuals engaging in this trade have a powerful incentive to keep their funds hidden from the authorities. It equally stands to reason that these individuals would have the means to thwart the hand of the state, should it even contemplate the prospect of laying a finger on their funds. But numbers give away the reality. If the speculative trades can boom in years when the economy is going down, the most obvious conclusion suggests itself automatically. It is party time for some irrespective of what is happening to the rest of us. The tragedy writes itself from here on.

Published in Dawn February 22nd , 2015

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@Norwegian @That Guy , @Imran Khan @Pomegranate , @Green Arrow @DESERT FIGHTER @Horus @hunter_hunted , @ArsalanKhan21 @Oscar and many more,guys check this out ,had no idea.

 

[BetterPakistan]

I heard somewhere that Pakistanis are the second biggest shareholder of investment in Dubai.

 

[l'ingénieur]

This news is true. I used to live in Dubai and all my parent's friends had bought more than 2 apartments in dubai in terms on investment.

 

[Mav3rick]

Dubai is fast becoming the biggest haven for money laundering and tax evasion. A massive chunk of the total investment, from around the globe, is from corruption, tax evasion and money laundering. Dubai is also fast becoming the biggest host to international criminals who flee their own countries.

A good world does not need a place like Dubai in it, the more Dubai grows, the more it would have caused grievances for humanity.

 

[Al Bhatti]

Dubai is fast becoming the biggest haven for money laundering and tax evasion. A massive chunk of the total investment, from around the globe, is from corruption, tax evasion and money laundering. Dubai is also fast becoming the biggest host to international criminals who flee their own countries.

A good world does not need a place like Dubai in it, the more Dubai grows, the more it would have caused grievances for humanity.

Or, in other words the governments of those countries from that money comes cannot work good enough to run their respective countries.

RECENT data from the Dubai Land Department shows that Pakistanis have purchased property worth more than Rs445bn in the years 2013 and 2014. This is a staggering number, although it is worth bearing in mind that there is no evidence yet that it is all ill-gotten gains.

Nevertheless, considering the economy has been sluggish at best during these years, with growth rates remaining below 4pc and large-scale manufacturing coming in at a dismal 2pc or lower, it is hard to understand where this large sum of money came from.

Read: Pakistanis share 8pc in Dubai property market

The same years saw spiralling inflows into other speculative trades well. Market cap in the Karachi Stock Exchange, for example, increased by 42pc in the same years and the local property market too, going by anecdotal evidence, has been booming. In fact, market cap in the KSE between January 2011 and February 2015 has increased by a staggering 161pc even as the number of listed companies has shrunk.

Also read: Pakistanis bought property worth 16bn dirhams in Dubai

Such outsize sums of money flowing into the speculative trades as the rest of the economy languishes in low growth points towards a key dysfunction. It indicates that for a certain segment of the population, incomes have continued to grow. It also indicates that these incomes find no profitable avenue for reinvestment within the country and are therefore diverted into speculative trades where returns are the result of increasing sums of money landing into the trade every year.

Questions need to be raised on both counts therefore. Where are the incomes that produce these flows being generated? And why are they opting out of acquiring productive stakes in the economy, opting for speculative returns instead?

Also read: KSE index breaches 35,000-point barrier

More specifically, it is worth asking if money that leaves Pakistan for investment in Dubai property is asked to furnish answers as to its source at any point. Source of funds questions need to be asked at some point, not only to detect ill-gotten gains, but also to curb tax evasion. The sums flowing into Dubai property will use formal channels and can, therefore, be detected. For a country known for its lack of tax compliance, tapping into this stream should be an important priority. But it stands to reason that a large number of individuals engaging in this trade have a powerful incentive to keep their funds hidden from the authorities. It equally stands to reason that these individuals would have the means to thwart the hand of the state, should it even contemplate the prospect of laying a finger on their funds. But numbers give away the reality. If the speculative trades can boom in years when the economy is going down, the most obvious conclusion suggests itself automatically. It is party time for some irrespective of what is happening to the rest of us. The tragedy writes itself from here on.

Published in Dawn February 22nd , 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play
@Norwegian @That Guy , @Imran Khan @Pomegranate , @Green Arrow @DESERT FIGHTER @Horus @hunter_hunted , @ArsalanKhan21 @Oscar and many more,guys check this out ,had no idea.

The problem lies in how the governments in Pakistan run the nation.

 

[Imran Khan]

good invest in dubai rather then corrupt pakistan . if i have money i will never ever invest in pakistan . overseas pakistanis buy real estate in pakistan and QABZA GROUPS occupy them then you haveto go courts 50 years . pakistan don't care overseas pakistanis at all.

 

[Norwegian]

Nevertheless, considering the economy has been sluggish at best during these years, with growth rates remaining below 4pc and large-scale manufacturing coming in at a dismal 2pc or lower, it is hard to understand where this large sum of money came from.

Really? Hint: Corruption!

Such outsize sums of money flowing into the speculative trades as the rest of the economy languishes in low growth points towards a key dysfunction. It indicates that for a certain segment of the population, incomes have continued to grow. It also indicates that these incomes find no profitable avenue for reinvestment within the country and are therefore diverted into speculative trades where returns are the result of increasing sums of money landing into the trade every year.

Of course! Money earn from widespread corruption CANNOT be reinvested back in the source of corruption!

Questions need to be raised on both counts therefore. Where are the incomes that produce these flows being generated? And why are they opting out of acquiring productive stakes in the economy, opting for speculative returns instead?

Because investment in production requires government sanction which current Noora Koogo is unable to provide to the investors!

good invest in dubai rather then corrupt pakistan . if i have money i will never ever invest in pakistan . overseas pakistanis buy real estate in pakistan and QABZA GROUPS occupy them then you haveto go courts 50 years . pakistan don't care overseas pakistanis at all.

Very true. Former Governor of Punjab resigned for the very same reason!

 

[BetterPakistan]

Very true. Former Governor of Punjab resigned for the very same reason!

and many others.

 

[Gauss]

Its strange people are investing in dubai when ive heard from some people that dubai is becoming less and less livable. There is a non existent public service system and prices are through the roof. Most important thing that makes any place livable is a good public service system. Government should provide maximum services.