Is UAE promoting Compulsive Shopping?

Compulsive Shopping Disorder (CSD) is a psychological disorder which has gained increased attention in the West over the years.

Recent articles in Gulf News and Medical News Today quoting American Journal of Psychiatry indicated that there may be 10 million plus people in US alone, who shop compulsively, placing their work, families and their mental health in jeopardy! And in UAE, going by lower rates for personal loans, frequent launch of attractive credit card promotions (sometimes even by Finance houses), pushing loans to boost bank earnings, and high growth potential for credit cards in the region, we may expect to have our own share of compulsive shoppers soon! In a recent online poll by Gulf News indicated that 16% of respondents do shopping as a therapy – for 6% it’s an addiction, 8% do it to tackle boredom and 2% do it to socialize.

Compulsive Shoppers are those people who "shop till they drop" believing that they will feel better if they do so, and often run their credit cards up to the limit. The behavior may result in interpersonal, occupational, family and financial problems in one's life. In many ways the consequences of this behavior are similar to that of any other addiction.

Looking at the scores of promotions running throughout the year, e.g. DSF, DSS, Ramadan, Eid, Christmas, GITEX, etc. and more, one might tend to think that UAE is indeed promoting more and more shopping! Celebrities coming to Dubai are often quoted saying: "…every time I've come here, I've emptied my purse". The big stores are always embarking on sales and marketing promotions, in order to attract more customers and increase the volume of business: more discounts, competitive prices; added value offers, etc. force the shoppers to buy certain goods – often by impulse.

Shopping in UAE often equates psychiatric treatment. It means different things to different residents; e.g. a cure to combat loneliness; a source of evening entertainment; a venue for a family outing; a source of enhancing one’s self-esteem; or sometimes...just to give rein to a compulsive disorder (see pie chart).

How to avoid shopping habit to degrade into a compulsion?

Although the importance of judging one’s own spending couldn’t be better highlighted, I’ve provided some additional links below to tackle the personal / psychiatric aspect of this.

On a socio-economic level, here are a few ideas worth exploring in UAE:

1. Ceiling on the number of promotions in a year. For example, 2-3 grand promotions in a year – DSF, DSS and any other one. This will reduce the impulse to “grab the offer” every time.
2. Ceiling on the extent of discounts advertised. Many a times we see “Up to 70% discounts” in the malls / outlets, which is rubbish! More realistic discount values will restrain the compulsion need for shopping.
3. All Grand Events need not be equated to heavy promotion. Limiting promotional activities within the grand events will reduce the rush for shopping within those few days of shopping.
4. Cut down easy loan availability on credit cards. Easy credit on credit cards is one of the worst nuisances existing in the market. Imposing stricter conditions to offer such loans as well as accepting such loans will create a lesser indebted society!
5. Establish stricter / heavier collaterals on personal loans. This will limit personal loans to situations when you need them badly – not just to pay your credit card or buy that expensive watch! Hence creating a lesser indebted society again!
6. Enforce stricter rules for Credit Card promotions. Restricting launches of rampant promotions will limit newer customers as well as limit spending on existing credit cards, thus affecting binge buying.
7. Squeeze cash-flow in the market. Restricted cash flow will retrain spending and hence limit visits to shopping malls.

Some Useful Links:

• Is Compulsive Buying a Real Disorder…?
• Men Suffer From Compulsive Shopping Too
• Shop till you drop 'is a desire gone out of control'
• How to manage compulsive shopping or spending addiction
• Compulsive Shopping and Spending
• Is compulsive shopping eating up your wallet?
• Five ways to stop the urge to shop
• What Is Spending Addiction?
• Shopping and other addictions
• Defining, confronting and helping shopping addiction
• Spending addiction forum
• Addiction and other psychological problems
• Supermarkets: psychiatric treatment in a shopping cart

Technorati :UAE. Culture. Society. Psychology. Behaviour. Compulsive shopping

More thoughts on Obesity (UAE)

Obesity is a subject that keeps on popping up time and again all over the world. I have commented upon this twice before (see here and here). Gulf News alone gave 100 matches related to obesity (Jan-Oct'06), while the New York Times had 33 matched articles for the last 30 days.

As a resident, I feel there are some ready indicators which safely point towards possible reasons for obesity in UAE. Fast-food and Eating Habits are definitely two of the important reasons.

A recent online poll done by Gulf News gave some interesting results on “use of fast food outlets” in UAE (see the attached pie-chart):

1) A whopping 72% of the respondents polled in favor of eating in a fast food outlet at least once a week!
2) Almost half of the respondents definitely eat in a fast food outlet once a week
3) 6% of the respondents use a fast-food outlet everyday of the week.

A second poll threw some light on the Eating Habits (see the bar chart):
Half of the respondents said they eat because of love of food – 6.3% said they eat because of comfort, while 1.4% each eats because of greed and socializing.

Although the sample-size of the polls is not available to me, I feel the above are good indicators worth pondering upon. For example, if one considers the Emirati community today, obesity is the most alarming! Considering a vast majority of the locals is aged 15-25 years, it’s easy to understand why. Most often than not, one finds group of young men – some of them are at least overweight - are socializing in fast-food joints.

Similarly, if one looks at the subcon families, one again finds that the usual “daily outing” happens to be the fast-food joints! Parents are more often than not overweight. And some of the children are found to be excessively out of shape compared to their ages!

As expressed earlier, my personal opinion is that pricing of food, especially ready-made / fast-food need to be re-looked at, especially in UAE – if not in the whole GCC region! Tax-free income (even though salaries refuse to rise!!), expensive ready-to-wear apparels, recreation opportunities, entertainment, etc. make fast-food the last inexpensive resort to spend money upon. The result? You order more, eat more and waste more… just to have a weekend high! If the fast-food / read-made food is priced higher than usual, the excessive expenditure on fast-food is bound to reduce – thus affecting obesity too!

I know the above solution seems too simplistic or "easier said than done"! However, I open the house to readers to submit more ideas for the benefit of the young nation. Here to you, readers...

Technorati :Obesity. Emiratis. UAE. Fast-Food. Behaviour. Business

Debating Dubai's Distinctiveness

John B. Chilton, who's writes the Emirates Economist blog, has posted a NYT article on Dubai on UAE Community Blog, which, sort of validates my oft-voiced contention that in its mind-blowing -speed growth initiatives, Dubai - and to some extent UAE as a whole - is fearing the loss of its grip on its Arab identity.

Some quotes from the article:

• “We fear that the expatriate is going to impose his culture on us,” said Maya Rashid Ghadeer, a columnist with the daily Al Bayan in Dubai who writes about the local community. “Most locals are afraid that they are losing their basic identity forever.”
  
• "Usually minorities assimilate into the majority,” Mr. Abdulkhaliq Abdallah (a professor of political science at UAE University) said. “But we don’t want to assimilate into the majority. We want to preserve the localness, the Emiratiness of this city.”
• “There is this pressure to stake out your claims, especially with the locals,” Mr. James Piecowye - a radio talk show host said. “There is more and more pressure to say, ‘This is how things should be.’ ”

The article raises a few very interesting and thought provoking questions that I would like to pose to the readers:

1) How much permissive Dubai should be? - I guess in it's strategic efforts to draw attention and business, it has stopped considering that it's a Muslim state governed by Sharia laws.
2) Does Dubai really have any deep-rooted culture that can be sustained? - As a city-state, it has all signs of a flourishing metro culture, but sadly, no "Arabic culture", that Sharjah / Abu Dhabi enjoy.
3) Does Dubai at all wants to be recognised as an epitome of Arab culture and values? - I guess not! Showcase to some extent, yes, but not a live example of GCC Arab culture which can be practiced / assimilated. Much of its showcased culture is often meant for sale to Western world - not for adoption.
4) How much Dubai closer to UAE? - Yes, it enjoys the position of a commercial capital of UAE, a conduit for Western entry to UAE; But it is more recognised as a wealthy priveledged brother of UAE.

I feel therefore, that no matter how the professors / intelligentsia / social thinkers would like to talk or debate about it, Dubai has come too far to sustain the deep Arabian flavour in it's identity. Any move to enforce the strict rules of Sharia law, a-la-Saudia, runs the risk of violent opposition, thus severely affecting its marketability to the Western World, plus negatively affecting the overall economy of the region.

Any other opinions?

Technorati :Dubai. Culture. UAE. Community. Society. Behaviour. Psychology

Microcredit Revolution in the MiddleEast?

I hope I’m not too late in blogging about it, but I read an interview of Dr Yunus, which assured me that potential of Microcredit in Middle-East is recognized well! Read the full interview and support article from Gulf News.

A few key points from the coverage are as follows:

1. One of the ways Microcredit net was expanded was through “Word-of-mouth” marketing: you hear your neighbors benefiting from the scheme, and decide to enter the scheme yourself. (I feel same process will succeed in this region too, esp. among worker class)
   
2. Initially the scheme was never thought out on a scale it is done today. Dr Yunus just kept on finding solutions arising out of day-to-day field problems and it kept on getting better
   
3. Jordan is the first one to set up a Microcredit company, (JMCC) – launched by Queen Rania with Dr Yunus on the advisory board. Egypt (Al Tadamun, RADE) and Yemen are also introducing the scheme as a part of their poverty eradication strategy
   
4. Good news is that KSA (through PFP) – the largest among GCC countries - will also see Microcredit being implemented in certain areas soon. “Grameen Trust” organization is ready to support any initiatives in any other GCC / Middle-Eastern countries
   
5. Conventional Banks can also open the doors to the poorer borrowers (a point that I raised in my previous post below), by framing supporting rules. However this will lower their profit margin – benefiting the have-nots.
   
6. Remittance business is an area where Grameen Bank would be interested to enter. This perhaps would reduce dependency on non-banking modes of money transfers (that I talked of before)
   
7. Although Libya, Malta and 6 GCC countries have highest per-capita income (~ $4000) there are 12 other active / potentially active World Bank borrowers, with per-capita incomes between $330-2,870.

I feel Microcredit scheme could really change the face of economic reforms in all the WB borrowing / non-borrowing countries. It all depends how the potential of the scheme is recognized and implemented in each economy.

One other point worth musing about is that except KSA, all other GCC countries are very much dependent on expat workers for the growth of their economies. Majority of these workers are from developing Asian economies. Therefore is it possible to have any significant change in economic outlook, should microfinance schemes are allowed to operate among these workers? Does it also improve the forex outlook of the parent countries of these workers?

I guess I need expert / specialist opinions from the blogosphere…

Some more useful Links on Microcredit:

1. Business loans for Jordan's impoverished women
   
2. Egypt: Combating child labour through micro-credit
   
3. Best piece on what we know about micro-credit
   
4. Nobel Peace Prize announcement story in NYT by Celia W.Dugger (2006)
5. Article and case study on whether Microfinance really work (Indian story)
6. Hal R. Varian’s Commentary in NYT on the economics of Microcredit (2001)

Technorati :Microcredit. Dr Yunus. Expats. Remittances. GCC. Middle East

Needed - a Dr.Yunus for every Gulf state!

The awarding of Nobel Prize for Peace (instead of Economics) to Dr Mohammad Yunus could perhaps be one of the many controversial decisions that the Nobel Prize Committee has taken for the Peace prize over the years. However, it cannot be denied that Dr Yunus well deserved this kind of world recognition – esp. since his feat and achievement is perhaps a slap on the face of conventional banking as we know it! Ever since I read about him in "The 8th Habit" - a book by Stephen Covey, I’ve been feeling a mix of excitement and agitation.

“Microcredit” – the core system he pioneered and implemented in his “Grameen Bank” is perhaps not something new. In simplest terms, we all lend small amounts of monies to friends / acquaintances for a short period, against trust / emotional bonding we develop with them. However the flesh and blood he has put into the idea is a success story in itself.

The system has been copied in more than 100 nations, and even though economies of UAE / GCC are far stronger than Bangladesh, I feel the model can be utilized in this region too!

Majority of the banks in the Gulf region (kindly correct me) seem to be operating on “profit” model of business – i.e. “if you have a collateral we can give you a credit; if you want to manage your small finances, then pay us for the service; however sorry - no interests will be paid against your savings deposits with us!”

The result? Majority of the Expat savings are never kept in the banks for a longer periods; they are instead remitted to their home countries where they are able to invest and earn. And if that Expat happens to be the hapless laborers / construction-site workers – then even a bank remittance is avoided due to the fee involved! The meager savings are then invested in illegal, but close-knit groups known as “kitty” or “committee” or "society". Depending on the number of members, one can have the money back within 6-12 months or temporarily multiples of it, at any time.

However, come to think of this – if every person could approach a Dr Yunus (or his institution) operating in every Gulf country, then all the low paid Expats (e.g. site workers / laborers / maids etc.) would have preferred to keep the money here for a longer time, utilized it to the benefit of this country’s economy (in whatever little ways they can!) and had benefited themselves too to some extent. Simply a win-win situation for everybody!

To give an example, the outward remittances from the Gulf reached Dhs 213.15 billion in 2004-05. Assuming just 20% of this represents remittances from the low-salaried workers, who usually remit either in bulk or through trusted hands (not banks), at least a quarter of this money (or Dhs 10 billion) could be utilized! It could perhaps be in form of short-term investments, e.g. small-scale businesses, involving these workers, who’d love to recycle their monies, rather than working multiple shifts to earn that extra buck (see examples here and here)!

Doesn’t it make sense?

I currently do not have the statistics of unskilled low-wage earners in UAE to calculate how it could affect UAE alone. So stay tuned till I find some more data.

ADDENDUM:
Gulf News Print editorial today rightly comments "...It wasn't about money... It was about respect...". I strongly feel that here's a chance to give that respect to thousands of deprived Expat workers here.

(read comments on the article in UAE Community Blog)

Some useful links:

• What is Microcredit?
• The Microfinance Gateway (most comprehensive info on the web)
• The Grameen (Bank) Foundation
• Microcredit Summit Campaign
• Taking Capitalism to the Poor, by Columbia Business School members
  
• Banker to the Poor: The Autobiography of Muhammad Yunus
• The Hidden Wealth of the Poor (Economist)

Technorati :Microcredit. Dr Yunus. Economics. Expats. Remittances. GCC

Obesity - the fast-food link

A few weeks ago, I had pondered about obesity among GCC nationals. Some startling facts published today reassure me that one of the most important causes indeed is Diet.

Consider these:

- There are 315 fast food outlets in the UAE; 43 of these are McDonald’s alone!
- One single Hardee’s outlet sells 20,000 burgers per day!
- In 2004, total sales recorded for GCC fast-food market was US$ 600M! UAE’s fast food market is estimated at US$117M
- At least 26% of UAE residents eat at a fast-food joint once a week! This figure shoots up to 65% in case of Emiratis and Expat Arabs!

The facts raise a few questions which are worth pondering about:

1) Could there be a possibility of a “Food Law” that restricts the menus (or ingredients) of these fast-food joint? Knowing that obesity is high among Emiratis and fast food contribute largely to this menace, I feel this kind of law would be in best interest of all residents

2) Is there a possibility that Food companies and MNCs are requested to launch “good food habit” campaigns targeted primarily to the parents of school-going kids? Knowing the revenues generated from the Gulf food sector esp. during Ramadan and festival times, I feel it would be easier for Govt. lobbies to convince these companies.

3) Is there a possibility of restricting the growth of “unhealthy” fast-food joints in favour of “healthier” ones? Growth of Fast-food culture is fuelled by the growth of mall culture in GCC. Perhaps by looking at the menus and ingredients, a certification could be imposed as “necessary” to have a shop in the malls.

Any more ideas on this?

See UAE Community blog discussions on this post. Photo Courtesy: Gulf News

Technorati :Obesity. Emiratis. UAE. Fast-Food. Behaviour. Business