By Anil Bhoyrul
CEO Kevin Roberts says stimulus not working, wave of crime and violence to come.
Saatchi & Saatchi global CEO Kevin Roberts has warned of mass social disorder in 2010, with “more violence, more drugs, more alcohol abuse, more crime” being the next phase of the global economic crisis.
In an interview with Arabian Business magazine to be published on Sunday, Roberts dismissed the predictions of growth next year by the World Bank and the International Monetary Fund (IMF). Instead, he warns that “the bad times are here".
He said: “It will be tough next year because the stimulus packages are not stimulating. They are not working. The social costs will go through the roof. 70 million unemployed means more violence, more drugs, more alcohol abuse, more crime. It is already happening. You will see a social crisis in urban developed markets.
“Think Chicago, London, Mumbai. 20% of 16 year olds don’t find a job so they don’t spend. They get pissed off because they believe they deserve it so they will take it….People will lose hope and turn to drugs and violence against weaker people, their wives and children.”
He added: “This is not a recession. This is a reframing of the world. Consumers are never going to go back to spending more than they earn. This was fundamentally a problem of consumers saving nothing and spending what they didn’t earn. Recession is over but the only people that can borrow money are people that have money, and they are the people that don’t need it.”
But despite his concerns for the global economy, Roberts was more positive on Dubai, saying the emirate has done spectacular things on “job creation” in the past few years.
Last month, the IMF said growth in Arab oil exporters was set to slow to 0.7 percent this year but would rebound in 2010 to grow by 5.2 percent on rising oil revenue.
Saudi Arabia and five of its neighbours in the world's biggest oil-exporting region are likely to post fiscal surpluses amounting to 5.3 percent of gross domestic product this year, compared with 27.4 percent of GDP in 2008, the IMF said.
Next year's surpluses will amount to 10.4 percent of the region's GDP.
Real GDP growth in 2009 for the Gulf - including the UAE, Kuwait, Qatar, Oman and Bahrain - would fall from an estimated 6.4 percent last year, the IMF added.
In a wide ranging interview, Roberts – who heads up 7,000 staff and is a respected speaker at international conferences, also took a swipe at the region’s advertising industry, saying that advertising award ceremonies have been “a shambles"
It's about time somebody started to speak out about this. The corporate world wants us all to think everything is ok while they get on with returning to the bonus culture. The financial industry has learned nothing from this crisis of their making. The absolute sence of entitlement to their multi - million dollar bonus for producing nothing tangible is amazing. They manipulate prices witout regard for the effect it has on main street. They drove oil to $150 per barrell and yet demand was not their at $100 per barrel. They played with rice and drove the prices up in their pursuit of profit with scant regard to the affect it has on the poor. They shrug this off with a remark about the MARKET doing its thing. Watching Nick Griffin on BBC recently sent a shiver down my spine. Not with what he says but to the fact he is appealing to peoples sense of frustration in the UK. The fact that he has not got the intellect to really take hold of the masses means he is not a worry, However somewhere in Europe,Middle East, Aisa, Americas somewhere there is a person who will be able to articulate the frustrations of people...An intellectual NICK GRIFFIN.....someone educated and articulate that will lead people down a dark path.....In the word's of Lee Iaccoca...."Where have all the leaders gone"
Kevin should get his facts correct. In India 16 year old in Metros go to school and colleges and not go for jobs as he is asserting. India Inc. is hiring. Not all economies have suffered as badly as US.
The words of a wise man who can see the reality for what it is. Bad times are here for many, worse times are ahead for even more people. I'm not referring specifically to Dubai, but generalizing for various nations as the CEO did and I look forward to the reading the full interview.. I remain in awe of the global mainstream press - reporting happy news every day. Stock markets are rising, banks are lending (soon?), the recession is over, business and consumer confidence rising. These are the headlines. What is missing are the big, BOLD, headlines on the true picture of misery out there- the banks that are failing every week, the lack of money in agencies (FDIC et al) that protect consumer deposits, default rates increasing both in mortgages and credit lines, commercial properties soon to follow as stores and offices remain vacant due to small business bankruptcies. Unemployment rising, but even where it has stabilized millions remain out of work with no clue as to when the job market will recover to provide for THEIR job. Who will create 70+ million jobs? And by when? By the year 2030? When global rebuilding takes place to fill jobs of the deceased killed during the 15-year civil unrest? A terrible vision of the future, a horrible legacy to leave our children... The real information is out there, it's just reported in small one-liners or in snippets of information as part of wider the "feel-good-all-over" articles. China and India both have increased the wealth of their citizens - 1% of the one billion population (each) is well off. That's 20 million people who can afford hotel rates here in Dubai, in London, NY or Paris. I don't see them saving the world any time soon with their travels or spending patterns. With the reality of a negative business outlook globally, I'm sure financial houses will finds ways to dent the wealth of anyone holding paper-backed currencies. India is to be saluted for their buying 200 tons of IMF gold, China likely to buy the next large IMF tranche, to support their currencies and thereby to support their citizens. Holders of dollar-backed assets, such as us here with the dirham, are facing the worst. As it seems, only gold has retained its shine these past 4000 years and we're mostly too poor to buy the kilo bars that we should automatically own were paper money still tied to gold, as it was in the early 20th century. Good luck to us all, we'll need it. Some of us, will make our own luck by remaining well informed.
Suffice is to say that Saatchi & Saatchi is quite successful in advertisement industry (I hope I am right !!) and Mr. Kevin Roberts must stick to prediction about that segment.
Even if it were true...do you really state it to the media? I guess this shows that Saatchi needs to do something shocking to get attention. I don't think scaring people is going to solve any problems. Predicting social unrest is simply not going to happen. It may be true that financial misfortune may lead to unstable situations. But the majority of the people in the world were living in poorer situations not long ago. The prosperous situation may have been short lived but it does not mean that after the money has come and gone that everyone will suddenly lose their moral compass. I guess this says a little about Kevin's character and what he is likely to do if he lost his money (Violence, Drug abuse, alcohol abuse...) Oh yeah, whats with the 16 year olds who are not in school... Any 16 year old looking for a job, who is not in school, is likely to be a drug abuser, alcohol abuser and resort to violence anyway... Thats just bad parenting.
Just because the advertisment industry is not doing well doesn't mean that the economy will not bounce back. For sure advertisment industry will not bounce back in the near future because companies started reducing their advertising budget as a cost saving measure and is passing on the benefits to the customer as discounts to be competitive in the market. Demand is nothing but desire! and it's impossible to supress one's desire to lead a good life for long. It is true that media has created a fear factor in each and every person on this planet. But, today's human being have very short memory as we depend more on external Hard Drives. Therefore, thinks will change very soon and this you will witness first in the retail industry especially in the home decoration and furnishing industry as the trend will shift towords renovation before getting its pace and gradually picking up the real estate industry which will ultimately boost the banking sector. The upcoming young generation are very Ambitious and they live for Today and not for Tomorrow. This attitude of their will push the economic recovery process much faster than any of the economist would have thought about.
Its already happenning right now .... what makes 2010 different from whats happenning now. Yes every year this would escalate at some pace. Not really a surprising prediction! in my humble opinion --> Predictable!
To Jessy: you don't shoot the messenger. even if you hate his message, because it's true. all the indicators are here. no one can hide his head in the sand any longer. something drastic needs to be done, and done quickly. so get over your displeasure, and seriously rethink your life and values. that's the thing that works right now. -- langyaw
I agree with Roberts but would reframe the global problems he outlines. "Democracy" assumed that the system would run in the best interests of everyone. The word "enlightened" was used. Recent decades however, have been flawed with widescale immorality, greed, corruption. Traits that 'diseased' govts, banks, investment houses, consumers. Institutions invented more and more speculative "theory money" (debt) to replace real money. Think of Blair's regime, ENRON, Bush and the Iraq War, hedge funds. Unless leader countries find and embrace new ethical codes nothing will change. Religions too, have been hijacked by the same flaws. Look at the bestial taliban, the mind crazed and murderous Al Qaeda. There are ominous echoes of Animal Farm, Clockwork Orange and 1984. Where is this new, radical, ehtical, moral global code to come from?
Well said......society world wide is bankupt....A new way forward is needed and soon....not the empty promises of YES WE CAN but real substance.....it is only a matter of time before someone steps out of the crowd and leads the world down a road of no return. it is funny how every religion sees greed as a deadly sin.....we learn nothing