The relative of a victim of the New Delhi building fire cries outside the emergency ward of Lok Nayak Hospital, in New Delhi. EPA
The relative of a victim of the New Delhi building fire cries outside the emergency ward of Lok Nayak Hospital, in New Delhi. EPA
The relative of a victim of the New Delhi building fire cries outside the emergency ward of Lok Nayak Hospital, in New Delhi. EPA
The relative of a victim of the New Delhi building fire cries outside the emergency ward of Lok Nayak Hospital, in New Delhi. EPA

Delhi fire: lives cannot be lost due to loss of care and safety measures being flouted


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At 5am on Sunday India woke up to tragedy. A four-storey building housing unlicensed factories in Delhi was set ablaze by an electrical short circuit, costing 43 people their lives. Those who perished in the flames were mostly labourers who were sleeping at their workplace. For many of the victims, this was the only place they could afford to dwell in. The firefighters who attempted to rescue them could not get within 100 metres of the congested area leading to the building, where narrow alleyways and tangled electrical wires made it impossible for vehicles to get through.

Most of the workers who died in the flames moved to Delhi from India’s eastern states, in search of a better life. On Sunday, their dreams and those of hundreds of families who have lost a loved one, came to an end.

The blazing building was so hard to reach for rescuers that victims had the time to call their families as they were dying. Zakir Hussain told The National that his brother Shakir, who died in the fire, called his wife shortly before his demise. "He told her he might not survive, that the factory was filled with smoke and he was choking. His wife has been crying all morning," he said.

While Prime Minister Narendra Modi described the fire as “extremely horrific" and said the government is providing assistance, authorities have to make these neighbourhoods secure and ensure unscrupulous employers abide by the law. Had the factory owner and local authorities respected existing safety rules, many lives could have been spared. The owner of the building and its manager have been arrested, but much more could be done to enforce fire safety measures flouted by greedy factory owners.

In India, a substantial number of manufacturers are located in the old parts of big cities that are cheaper to rent but these often congested areas can be fire hazards. Yet factories continue to operate there illegally. This has allowed unscrupulous factory owners to cut costs by saving on basic security requirements, even if this means putting innocents’ lives in danger. The four-storey building that caught fire housed such illegal factories, where 20 rooms on each floor were connected by a single stairway, with only one entrance to the entire building that was essentially blocked by electrical wires.

Labourers should not have to die, simply for trying to make a living

These appalling conditions sparked Delhi’s biggest fire in two decades. Hardeep Singh Puri, India’s housing and urban development minister has called out the Delhi government for overlooking these grave violations of safety and fire norms.

The tragedy may taint the legacy of the city’s chief minister Arvind Kejriwal, who has pledged to tackle corruption throughout his political life. He has many achievements to boast, but this catastrophic loss of life will cast a long shadow.

Factory owners must care for their workers and abide by the law. Labourers should not have to die, simply for trying to make a living. One solution is to provide them with decent housing or at the very least pay them the minimum legal wage so that they can afford shelter. Many workers cannot afford Delhi rents and are reduced to sleeping in their workplace, like the victims of Sunday’s fire. Some workers of the charred factory say they were paid as little as 1,000 rupees (Dh52) a month, while others said they earned a salary of about 9,000 rupees (Dh465) – these figures are well below the official minimum wage of 14,842 rupees (Dh766) for unskilled workers.

Workers walk on a street near a factory site where a fire broke out a day before, in New Delhi. AFP
Workers walk on a street near a factory site where a fire broke out a day before, in New Delhi. AFP

As India mourns its dead and pays tribute to the nearly 150 fire fighters who saved the lives of many who were trapped in the building, authorities must work hand in hand with the police and local business owners to ensure that safety regulations are met so that no more lives are lost.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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