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From The Editor

The agenda of global food supplies has moved up a notch on the radar of world leaders, who often raise food security issues and bring needed attention to the continuing food crisis and long-term concerns. Policy breakthroughs and substantial action, however, have been limited. More directly, in the Middle East (most notably in the Gulf Cooperation Council region) where severe shortages of fresh water supplies limit agricultural production, combined with unsustainable population rise, the region is forced to import the bulk of its food supply. The universally accepted definition of food security is: “A situation when all people, at all times, have physical, social, and economic access to sufficient, safe, and nutritious food to meet their dietary needs, and food preferences for an active and healthy life.” As current climate trends are likely to continue and intensify, creating unique conditions, challenges and/ or opportunities for natural and human adaptation, the need to find solutions in which to secure national and global food supplies will also continue to escalate. In recent years this has forced countries to buy up agricultural land and feed stock in foreign countries. However, this too has implications, such as unethical land grabs, supply chain control and regulation, the implications of a genetically modified (GM) food supply and possible contamination into non-GM food chains, pricing volatility and the strains of heavy foreign investment. A recent report by the Arab Monetary Fund and the Arab Organisation for Agricultural Development stated that Arab nations have reeled under a cumulative farm gap of more than US$155 billion (QR564 billion) over the past nine years. Qatar imports up to 98 percent of its food supplies and in 2008, the country’s total foods spend cost the state’s economy US$1.2 billion (QR5.5 billion). A rapidly changing world combined with mounting domestic challenges is prompting many Middle Eastern countries to rethink their development models and to initiate economic and social reforms.

The conventional model has been based on oil wealth, a preference of state over markets, import substitution industrialisation, and often untargeted redistribution mechanisms. It is widely acknowledged that economic diversification, a stronger role of the private sector, and a stronger focus on pro-poor growth are urgently needed for Middle Eastern countries to prosper in the 21st century. These development challenges are further complicated by global and regional issues, which include the global financial crisis, ongoing conflicts and climate change. The surge in world food prices in 2007 and 2008, and the introduction of export restrictions by some countries on certain commodities, impelled Gulf countries to refocus on policies and investments to improve food security, and better link food security to national development strategies and plans. However, environmental and economic studies show that many of the region’s longstanding challenges persist; yet taking immediate action is more urgent in light of the aforementioned crises coupled with the projected impacts of climate change. Fostering development and achieving food security will require economic growth and diversification that generates new job creation for a broad population, breaking the vulnerability to international oil and food price volatility, better managing depleting water resources and climate change adaptation effectively, transforming social policies to target the underprivileged, and empowering women to play a more active role in the economy and society. Designing policies and investments for achieving progress in this regard are most likely to be successful if based on lessons from the past, successful countries’ experiences and research-based strategic analysis. There are key actions, which need to be taken on regional, national and sub-national levels to foster development and food security. However, as food security is an issue that will persist, any action taken will only be, in reality, successful if it is engineered for long-term rather than short-term gains.

Kelly Lewis Managing Editor

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letters@theedge-me.com TheEDGE

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WHO WE ARE

Managing editor Kelly Lewis k.lewis@firefly-me.com +974 55067574 Acting editor Miles Masterson m.masterson@firefly-me.com +974 66080447 Senior business journalist Megan Masterson megan.masterson@firefly-me.com +974 55348748 REGIONAL SALES DIRECTOR Julia Toon j.toon@firefly-me.com +974 66880228 SENIOR SALES manager Emma Land e.land@firefly-me.com +974 33197446 Marketing administrator Azqa Haroon a.haroon@firefly-me.com +974 55692471

About TheEDGE: TheEDGE is an ambitious business magazine targeting professionals operating within Qatar’s multi-sector business landscape. Printed monthly, TheEDGE was launched in July 2009 to fill the market void and to provide the business community with insight into the latest business trends and market developments. TheEDGE is distributed 12 times yearly to a readership base of more than 7500 professionals, providing advertisers with the needed additional reach and frequency to their most important audience. TheEDGE is an authoritative business resource serving both large and small business operators.

Creative director Roula Zinati Ayoub Art AND DESIGN Lara Nakhlé Rena Chehayber Rana Cheikha Charbel Najem Finaliser Michael Logaring

Firefly Communications PO Box 11596, Doha , Qatar Tel: +974 44340360 Fax: +974 44340359 www.firefly-me.com

Photographer Herbert Villadelrey DISTRIBUTION and SUBSCRIPTION Dan Louie Javier +974 66975087 d.javier@firefly-me.com

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TheEDGE

TheEDGE is printed monthly © 2010 Firefly Communications. All material strictly copyright and all rights reserved. Reproduction in whole or in part, without the prior written permission of Firefly Communications, is strictly forbidden. All content is believed to be factual at the time of publication. Views expressed by contributors are their own derived opinions and not necessarily endorsed by TheEDGE or Firefly Communications. No responsibility or liability is accepted by the editorial staff or the publishers for any loss occasioned to any individual or company, legal or physical, acting or refraining from action as a result of any statement, fact, figure, expression of opinion or belief contained in TheEDGE. The publisher (Firefly Communications) does not officially endorse any advertising or advertorial content for third party products. Photography/image credits and copyright, where not specifically stated, are that of Getty Images and/or iStock Photo.


CONTENTS

CONTENTS www.theedge-me.com

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September 2010

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Contributors

A brief introduction to the specialised team of contributors who lend their expertise and insight to TheEDGE.

.10. NEWS IN BRIEF

A snapshot of the latest business developments affecting the business landscape within Qatar and the GCC region.

.13. NEWS IN QUOTES & NUMBERS

Powerful statements and important statistics that made an impact.

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.14. ON THE EDGE

Described as “a pageant of nerdiness”, TED brings together the brightest and best. Miles Masterson finds out more about the savviest conference around.

.17. Business Insight

TheEDGE speaks with key professionals from in and around the region to uncover the latest news on the business front.

.26. In the spotlight

Despite uncertainty and mistrust of traditional banks, Islamic banking in the United Kingdom is widely considered to have ‘flopped’. Christine Toner investigates.

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CONTENTS

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.43. ECONOMIC BAROMETER

Karim Nakhle outlines the findings of The Middle East Business Optimism Outlook, a survey of top CEOs, exclusively for TheEDGE.

.46. ON THE PULSE

The battle for the skies is only just beginning, reports Edward Jameson.

.49. GREEN BUSINESS

The economic advantages of recycling are plentiful in Qatar. Sam Pickering investigates.

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.29. MARKET WATCH

Jonathan Dymond recommends how to appoint a competent financial adviser.

.32. INSIDE EDGE

The debt troubles of a few eurozone economies have given rise to new uncertainties. Dheeraj Shahdadpuri takes a closer look.

36. COVER STORY

Rachel Morris reports on the necessary and sometimes controversial steps taken by Gulf countries to secure future food supplies.

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.52. ENTREPRENEUR

Miles Masterson interviews Amra Tareen, advocate of citizen journalism and founder of Allvoices.com, the largest user-generated news website in the world.

.56. SPECIAL FEATURE

Joseph Glenn Jessome in the final in the series, explores how capitalism has thwarted autism’s altruistic geniuses.

.61. BUSINESS VIEW – REAL ESTATE

Steve Morgan says real estate organisations should look to the Far East to forge future growth.

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CONTENTS

.64. SPECIAL REPORT

Oliver Cornock reports that the future is looking big and bright for Qatar’s economic standing.

.66. BRAND BEAT

Charlotte Stubbs recommends the new media options available to companies looking for fresh ways to interact with the world.

.70. BALANCE SHEET

Peter Kohut outlines the advantages an organisation could gain by implementing governance, risk and compliance to strengthen overall effectiveness.

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.73. LEGAL INSIGHT

Ray O’Connor and Brenda Hill explain legal jargon and Qatar’s invisible rules.

.76. BUSINESS KNOW-HOW

Ali Ahmar investigates how companies can protect valuable data in an era of mobile employees.

.79. SPEAK EASY

Effective leaders have to be great communicators in order to project clarity and conviction. Fran McElwaine explains why good communication in an organisation is vital for its success.

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INDUSTRY FOCUS HEALTH FOODS

.81. BEHIND THE WHEEL

Qatar’s oil and gas industry takes the lead in protecting employees from its dangerous roads. Miles Masterson takes a closer look.

INDUSTRY FOCUS HEALTH FOODS

H

ealth food products are ‘nutraceutical’, a term coined in the United States (US) in 1989, combining the words ‘nutrition’ and ‘pharmaceutical’. Nutraceuticals are foodstuffs that provide a range of health and medical benefits, including the prevention and treatment of disease. They range from isolated nutrients, dietary supplements, and specific diets, to genetically engineered foods, herbal products and processed foods, such as cereals, soups, and beverages. The concept of health food obtained a favourable public reputation in the global market right from the time of its emergence and has grown rapidly and now even overtaken the market of organic food. Health food is an advantageous way for new companies to break into new and existing markets. The sector has also caught the attention of many global multinational corporations, who are adding health food products to their lines. However, even though the health foods and beverages segment is a growing market worldwide, it is still emerging in Gulf Cooperation Council (GCC) countries, with many new entrants trying to provide products for a consumer base that is becoming increasingly aware of the benefits of health foods. The following information was taken from a recent study on health

.85. INDUSTRY FOCUS

The growing GCC health food and beverage market, examined by Srividyaranjani Venkatasubramanian.

“Rising consumer awareness coupled with changing lifestyles and rising per capita income, due to surge in oil prices, has encouraged consumers to switch to healthy breakfast alternatives. This has lead to the growth of the breakfast cereals market, which forms the largest part of the food component of the sector in Gulf countries.”

.89. HOW-TO GUIDE

Market your business effectively and the top mistakes to avoid when creating a sales brochure. 86

foods and beverages in the United Arab Emirates (UAE) and Kingdom of Saudi Arabia (KSA) markets. GROWING CATEGORIES Health beverages have been in the global market for more than a decade. Though it started out as a niche category, it has now joined the mainstream global beverage market due to its rapid expansion. The functional beverages in the global market are clearly segmented into sports and performance beverages, energy drinks, enhanced fruit juices, single serve fruit juices, ready-to-drink teas, soy beverages and enhanced water. Health beverages in the GCC market are also segmented in the same way. In the Gulf market, the sports and energy drinks market is also the fastest growing segment, followed by malt-based health beverages segment. Since the sports and energy drinks segment and the soy beverages are relatively nascent, there are currently no defined regulations existing to govern them, but still the market is growing at double digits in both areas and expected to grow exponentially within the forecast period. Rising consumer awareness coupled with changing lifestyles and rising per capita income due to surge in oil prices have encouraged consumers to switch to healthy breakfast alternatives. This has lead to the growth of the breakfast cereals market, which forms the largest part of the food component of the sector in Gulf countries. Moreover, overall, the growth of such functional foods segment is favoured by the current change in lifestyles among the masses towards the preference of foods having health and wellness

“In 2009, the health foods market in the GCC stood at approximately US$205 million (QR746 million).” perspective. Ostensibly this is to overcome a sedentary lifestyle – due to both rapid urbanisation and accumulation of wealth – and to counter dietary diseases prevalent in the region. GCC HEALTH FOOD AND BEVERAGE MARKET VALUE In 2009, the health foods market in GCC stood at approximately US$205 million (QR746 million) with a growth rate of 22 to 24 percent for the year 2009. Though the market is at its infancy, and has only a few global

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BEHIND THE WHEEL

BEHIND THE WHEEL

ROAD SAFETY IN QATAR’S OIL AND GAS INDUSTRY

In the second of our series on road safety in Qatar, TheEDGE takes a look at how the hydrocarbon industry is countering the economic and human toll of road accidents on their sites and involving their employees and vehicles, and how they are utilising tools such as defensive driving courses and in-vehicle monitoring systems to do so.

TAKING ROAD SAFETY SERIOUSLY In a field renowned for its attention to the health and safety of its employees, large multinational and local companies in the hydrocarbon industry operating in Qatar understandably have stringent standards when it comes to road safety. These are even more necessary when you consider the long distances travelled annually by the industry’s commuting employees, as well its trucks, buses and transport vehicles such as fuel tankers. According to Safedrive International, which conducts ‘defensive driving’ tuition (see sidebar) in Qatar, “motor vehicle crashes [are] the leading cause of fatalities within the industry”. This is based on information taken from an international database of 2913 million hours worked in 38 countries and including operations in 93 countries across the world. With its high motor accident rate relative to global levels (see TheEDGE issue 13), this is especially relevant in Qatar. The country has a large expatriate community, almost all exclusively here to work on medium- to long-term contracts, the majority in the hydrocarbon industry and more than 60 percent of whom account for road accidents,

injuries and fatalities here. Therefore the safety of those working in this sector in Qatar is treated as paramount. Take Shell, whose approach to road safety in many ways exemplifies how seriously the industry treats the issue. Beyond mandatory defensive driving training, Shell has invested in decreasing the potential for accidents amongst its workers and vehicle fleets. “Our big project here is the Pearl GTL and back in May we passed 200 million kilometres driven,” says Simon Buerk, Shell communications manager, who adds that this is the equivalent of driving 5000 times around the world on the equator. With more than 50,000 people working on that project alone, from the onset Shell, in line with its set of international ‘lifesaving’ criteria, identified road safety as a huge potential risk. It took into the account that the company had tens of thousands of workers commuting seven kilometres twice daily from Pearl Village in Ras Laffan to the site. Shell also realised it had hundreds of staff commuting in their own vehicles from Doha and decided to eliminate unnecessary journeys wherever possible, actively managing their transport by providing buses for all of them.

“For people that are based in Doha who work in Ras Laffan we have required them to travel up to site by bus,” explains Buerk. “This has saved us 15 million kilometres that people would have otherwise driven by themselves in private cars. Most of those kilometres would have been early in the morning, or late in the afternoon after a long day at work, so we think this is a much safer way to do it.” Those commuting the shorter distance from Pearl Village to Ras Laffan also travel in company buses, further decreasing the odds of an accident. “We have 380 buses and they are travelling about 13,000 kilometres (kms) a day within Ras Laffan,” adds Buerk. “They have to wear seatbelts in the front and the back and for all the vehicles that we have, we have an in-vehicle monitoring system.” (IVMS, see sidebar.) The savings, in both lives and on equipment, Buerk reveals, have more than been worth it. “[With the] company absorbing the cost of buses, investing in the safety of its employees, we achieved those 5000 trips around the world without a single serious injury.” As per many companies in the industry, Shell has been involved with further road

.102. qatar projects

An update on projects taking shape in Qatar.

.103. tenders

Your monthly go-to list for the latest business opportunities in Qatar.

By Miles Masterson

Evocative artwork from a recent Ras Laffan Road Safety Awareness campaign on driving with mobile phones. Image courtesy Ras Laffan.

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.93. TECH TOOLS

TheEDGE looks at the latest gadgets hitting the shelves this month.

.94. LIFE & STYLE

Train with Doha’s Gaelic football club, and immerse yourself in the top sites of Rome.

.100. EVENTS & Conferences

Key industry events, conferences, courses and exhibitions taking place in September.

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CONTRIBUTORS

The Usual Suspects...

p.26 Christine Toner Economic Correspondent London, United Kingdom

p.46 Edward Jameson Senior Business Journalist Middle East and North Africa region

p.73 Ray o’connor Senior Legal Consultant DLA Piper Qatar, Doha

p.29 John Dymond Country Manager OIB International Doha, Qatar

p.49 SAM PICKERING Managing Director BG2 Global Solutions London, United Kingdom

p.73 BRENDA HILL Senior Legal Consultant DLA Piper Qatar, Doha

p.32 Dheeraj Shahdadpuri Analyst Dun and Bradstreet South Asia, Middle East

p.36 RACHEL MORRIS Freelance Journalist Middle East and North Africa region

p.64 Oliver Cornock Regional Editor Oxford Business Group Gulf Cooperation Council region

p.66 CHARLOTTE STUBBS Client Services Creative Action Design Doha, Qatar

p.79 Fran McElwaine Director, Change and Organisational Communications Hill and Knowlton Middle East

p.43 Karim Nakhle Senior Business Strategist Doha, Qatar

p.70 PETER KOHUT Director Financial Risk Management KPMG Advisory Manama, Bahrain

All contributors to TheEDGE are well-regarded leaders in their respective industries. If you are interested in joining the esteemed panel of contributors, please contact the managing editor, Kelly Lewis at k.lewis@firefly-me.com

TheEDGE

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NEWS IN BRIEF

LOCAL QATAR ‘OVERBANKED’ EXPERTS SAY Experts warn that the Qatari banking sector must seek new avenues of growth in a bid to flourish in an overcrowded market. With a population of just under 1.7 million, there are 18 banks that operate in the state, which include four Islamic banks and seven foreign-owned lenders. “The country is overbanked, and this has already led to a few mergers and acquisitions in the sector since the beginning of this year. Also, with a small population and economy, it is hard for further expansion potential within Qatar,” Janany Vamadeva, banking analyst at HC Brokerage told Gulf Daily News. Some analysts said that consolidation in Qatar could spark additional mergers and acquisitions in the wider region. QATAR EXCHANGE’S WENT SAYS BONDS REQUIRE NEW RULES The Qatar Exchange must draft new listing rules before trading in bonds and Islamic debt can begin, Andre Went, the bourse’s chief executive officer told Bloomberg. “We are drafting new rules for the bonds,” Went confirmed during a press conference late last month. The rules would relate to information disclosure and the size of the bonds by issuers, he said. Went declined to say when bond or sukuk trading would start. In February, he said that bond trading might begin before the September introduction of the NYSE Euronext Universal Trading Platform, called UTP.

SHARJAH UNVEILS LAW ON PROPERTY OWNERSHIP The United Arab Emirate (UAE) of Sharjah recently unveiled a law limiting the right to own property in the emirate to UAE nationals and nationals of Gulf Cooperation Council states, and corporate bodies fully owned by them. Exception may be granted by the (emirate’s) ruler to own property through the inheritance transition in accordance with Shari’ah declaration, legitimate or waiver of the owner to a relative of the first degree as prescribed by executive regulations of the legislation, according to the new law.

UAE FIRMS FAVOUR GCC MONETARY UNION A recent poll conducted by the polling firm YouGovSiraj showed only 18 percent of United Arab Emirates-based businesses believed that a Gulf currency union would be bad for business, the National reported as part of its annual economic survey. Almost half of companies in the UAE thought a common Gulf currency would be good for business, despite the country’s decision to pull out of the monetary union project last year. Meanwhile, 34 percent of businesses surveyed said a unified currency union would make no difference.

SETTING STANDARDS FOR THE GCC RAIL NETWORK In a bid to help streamline how the Gulf Cooperation Council (GCC) rail network development will be implemented, the GCC Secretariat has devised a study, which will result in a new rail authority overseeing the development of the scheme, MEED reported. The most pressing issue facing the proposed GCC rail network is the indefinite delay of the Qatar-Bahrain Causeway. The challenge for the GCC Secretariat and transport ministers lies in ensuring all six states stick to a set timeline so that the project is up and running by 2017 as planned.

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GCC TO DO AWAY WITH BORDER CURBS ON GOODS The latest push to eliminate obstacles could help the Gulf Cooperation Council (GCC) Customs Union ease transportation of goods and services across the region from next year, Gulf News reported. The secretary-general, Abdul Rahman Al Attiyah, said the union – as stipulated in the GCC Economic Agreement – would eliminate all the customs and other obstacles impeding the free movement of GCC and foreign goods among the member countries as long as hurdles were not caused by security or quarantine reasons. QATAR FIRST BOOSTS INVESTMENTS IN TURKEY Qatar First Investment Bank (QFIB) plans to spend US$500 million (QR1.8 billion) in Turkey. QFIB aims to invest in Turkey’s energy, finance and healthcare industries, chairman Abdullah bin Fahad bin Ghorab Al Marri announced in a recent press conference in Istanbul. QFIB will help Turkish healthcare provider Memorial Health Group to expand in the Middle East after acquiring a 20 percent stake in the company, Memorial chief executive Ugur Genc said.


NEWS IN BRIEF

INTERNATIONAL ASEAN MINISTERS REVIEW FREE TRADE PROGRESS The meeting of the Association of Southeast Asian Nations (ASEAN) Economic Ministers (AEM), held late last month, in Da Nang, Vietnam, reaffirmed their resolve to ensure the realisation of the ASEAN Economic Community (AEC) in 2015. The AEM reviewed the implementation of measures in the AEC Blueprint that fall under their purview, including those relating to trade in goods, services and investment. The AEM reaffirmed its resolve to progress the timely and substantive implementation of the measures in the blueprint and, thereby, ensure the credibility and integrity of ASEAN economic integration, with the realisation of a single market and production base in 2015. AIRBUS FACES DELAYS WITH ITS NEW PLANE Aviation sources claimed that Boeing rival Airbus was beginning to show some of the same delays on its new A350XWB airliner that plagued Boeing on its new 787. Flightblogger Jon Ostrower reported that the final assembly of the first example of the twin-jet is set to begin in next year’s third quarter instead of in the first quarter as originally planned. The new technologies involved in making an airliner largely out of composites instead of conventional metal lie at the root of some of the delays, Airbus executives have said. The European manufacturer said it still intended to deliver the first plane on time to Qatar Airways in the middle of 2013. FLOODS HIT PAKISTAN’S GAS IMPORT PLANS Pakistan will fall short of the 38.2 billion cubic metres of natural gas it was forecast to produce this year, Alexis Aik, head of the global gas team at FACTS Global Energy in Singapore confirmed. Pakistan’s plans for gas imports have run aground due to heavily damaged infrastructure as a result of the floods, international sanctions imposed against Iran and a contract dispute with a European energy supplier.

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“Pakistan is desperate as it faces huge power shortages,” Aik stated. “It was looking to speed up liquefied natural gas imports, which are more viable than pipeline imports.”

Kristinn Hraffnson, who speaks on behalf of the website from nearby Iceland, said WikiLeaks wants a publishing certificate for Sweden, which is needed to receive journalistic protection.

THE AUSTRALIAN NATION IS DIVIDED OVER BEING A REPUBLIC Australian of the Year Patrick McGorry has criticised Australians for failing to seriously address the issue of a republic. McGorry said Australia needed to “emerge from its prolonged adolescence” and become a republic sooner rather than later. Prime Minister Julia Gillard said she wanted Australia to become a republic when the Queen, now 84, no longer reigned, and said she planned to lead a national debate on the form the republic should take if she were re-elected prime minister. Opposition leader Tony Abbott rejected the notion of change and said that he was certain Australia would never abandon the monarchy in his lifetime.

GERMANY PLANS LIMITS ON FACEBOOK USE IN HIRING As part of the draft of a law governing workplace privacy, the German government proposed placing restrictions on employers that want to use Facebook profiles when recruiting. The bill would allow managers to search for publicly accessible information about prospective employees on the Internet and to view their pages on job networking sites, like LinkedIn or Xing. However, it would draw the line at purely social networking sites like Facebook, said Philipp Spauschus, a spokesman for the Interior Minister, Thomas de Maizière.

WIKILEAKS BUILDS A LEGAL SHIELD IN SWEDEN WikiLeaks, the whistle-blowing website, which has published thousands of secret documents on the war in Afghanistan, is seeking a media safe haven to protect against rising threats, which would seek to dissolve the site’s transparency. The site’s elusive founder, Australian Julian Assange, has been spending lots of time lately in Sweden, where the media laws are among the world’s most protective for journalists.

GLACIERS RETREATING IN ASIA A report by the US Geological Survey, in collaboration with 39 international scientists, revealed that many of Asia’s glaciers are retreating. The reports finds that the diminishing glaciers will impact water supplies for millions of people, increase the likelihood of outburst floods that threaten life and property in nearby areas, as well as contribute to sea-level rise. The report on the status of Asia’s glaciers, included research conducted in Russia, China, India, Nepal, Bhutan, Pakistan, Afghanistan, Georgia, Kyrgyzstan, Tajikistan, and Kazakhstan.


NEWS IN QUOTES AND NUMBERS

News in Numbers

#80

A poll conducted in 60 countries including Qatar, the United Arab Emirates, Saudi Arabia and Bahrain revealed a dearth of promotion opportunities and a lack of involvement from top management are among the biggest frustrations for Gulf employees. The survey, conducted by services firm Regus, asked employees at various firms which three stressful factors would most convince them to quit their jobs. The findings revealed employees’ main concerns were the lengthy commute to work, a lack of administrative support, bosses taking credit for their employees’ work and overwork. By far the biggest issue for Qatar-based employees (80 percent) was the lack of involvement with top brass. From the worldwide perspective, the biggest source of annoyance for workers was the lack of promotion despite good results, followed by lack of communication from senior staff, overwork, rude colleagues and a lack of belief in colleagues’ competence.

Pic of the Month

News in Quotes We do expect consolidation to take place among banks in Qatar, as well as see an acceleration of consolidation among banks within the Gulf Cooperation Council. There are too many banks for the existing population for each to achieve economies of scale. Douglas Beal, partner and managing director at Boston Consulting Group Middle East.

I would think the appropriate time for this nation [Australia] to move to being a republic is when we see the monarch change. Australian Prime Minister Julia Gillard said when asked recently if she would consider a referendum on a republic before the Queen died.

These groups are making plans for after the United States (US) withdrawal and for after the formation of the new Iraqi government… some groups think they will start their big battle after the US withdrawal they want to preserve themselves to attack the Iraqi government not the US forces. Iraq’s acting national security adviser Safa Al Sheikh said in relation to the withdrawal of American troops.

A reveller swims in tomato pulp during La Tomatina festival, the world’s biggest tomato fight in Buñol, Spain. More than 45,000 people from all over the world descended on the small Valencian town to participate in this year’s La Tomatina festival, with the local town hall estimating that more than 100 tonnes of rotten and over-ripe tomatoes were thrown (photo courtesy of Jasper Juinen/Getty Images).

The murder attempt is an act of terror aimed at muzzling voices, endangering press freedom, undermining security and stability, and threatening people’s lives’. Bahrain Interior Minister Shaikh Rashid bin Abdulla Al Khalifa said in regard to the attack on the managing editor of Al Watan, Muhannad Abu Zeitoun. TheEDGE

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ON THE EDGE

WHO THE HECK IS TED? :

No, TED is not a pet name for man called Theodore with a penchant for capital letters, but an acronym for technology, entertainment and design, an increasingly popular series of conferences with uber-cool geek cache, a grassroots variation of which – TEDxDoha – will soon be coming to Qatar.

T

MILES MASTERSON reports his year, TED turned 26. Coincidentally, this was also the age that TED’s American founder Richard Saul Wurman was when he published his first book, Cities: A Comparison in Form and Scale, in 1962. Wurman penned 80 more books, but is most famous for the bestseller Information Anxiety, about the concept of data overload in the post-modern age. A cynic could consider it somewhat ironic then that Wurman has written so many information-heavy tomes – with titles such as Various Dwellings Described in a Comparative Manner – as well as brought the world the first TED, which focused on the convergence of technology, entertainment and design and the sharing of concepts and information (indeed, TED’s mantra is “ideas worth spreading”). Nevertheless, inspired by what he saw as the confluence of these until-then disparate spheres, the first TED was held in 1984 in Monterey Bay, California. Tellingly, the infant event and business concept, launched as a one-off, showcased a demonstration of the newly released Macintosh computer and a talk by one of its co-inventors Alan Kay (Steve Jobs and his ubiquitous black shirt were yet to enrapture the iWorld), among other innovative features.

TED 1.0, however, lost money and went into a six year hiatus. But Wurman and company tried again in 1990, and by then everyone else, it seems, had caught up. Geographically and ideologically located close to Silicon Valley, the second coming of TED proved much more popular among the world’s emerging technocracy. Held annually ever since, the conference now attracts the elite of many fields, both as speakers and attendees. The scope of TED has broadened to include Bill Clinton, Jane Goodall, Al Gore, Billy Graham, Peter Gabriel, the founders of Google and the creator of the 99 comic series, Doctor Naif Al Mutawa. “Yet,” claims the TED website, “often the real stars have been the unexpected: Li Lu, a key organiser of the Tiananmen Square student protest; Aimee Mullins, a Paralympics competitor, who tried out a new pair of artificial legs onstage.” TED has also had its critics however, chief among them Lebanese scholar Nassim Taleb, who spoke at the TED2008, but then later denounced it as a “monstrosity that turns scientists and thinkers into low-level entertainers, like circus performers.” Similar censure has been levelled at TED by other critics. Much of this is typified by the question asked in a recent issue of GQ magazine by writer Michael Wolff (who called TED “a pageant of nerdiness”): “is it an example of lots of self-satisfied and cringe-inducing people drinking a very heady soft drink, all the more potent because they will have paid almost GBP4000 (QR 22,458) for the privilege of drinking it?” Naysayers aside, now curated by Wired magazine’s Chris Anderson – who bought TED from Wurman in 2001 – TED’s success speaks for itself. It has grown into two main conferences held in the United States (US) annually, and through a global strategy to move beyond the US, to the TEDGlobal Conference in Oxford in the United Kingdom every year. Apart from awards, projects and a popular website (where a new talk is posted every day), TED’s reach (and Wurman’s vision) has spread to TEDIndia in 2009 and, most recently TEDx, scores of grassroot satellite events both in the US and all around the world. TEDxDoha will be held in Doha on October 29, 2010. For more information log onto: www.tedxdoha.net

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TheEDGE Appeal for Donations TheEDGE is appealing to all individuals, organisations and the business community of Qatar alike, to lend a hand of support to the victims of the Pakistan flood. To date, more than 20 million people have been affected by the flood, which has spread throughout all areas of Pakistan. The Pakistani people are in dire need of any help we as human beings can offer. Placing race, religion and geographic location aside, let us unite in a spirit of compassion for a good cause and give with open hands. The road to recovery is going to be very long and arduous, with the country facing issues such as waterborne disease and the loss of its economically vital agricultural lands. Food, water and clothes are needed most urgently. Charitable donations in cash will only go so far, with limited supply available within Pakistan. For this reason, we at Firefly Communications have put together a drive to collect non-perishable and essential food items to send directly to the victims. With the help of Pakistan International Airlines (PIA), which are taking cargo free of charge from around the world to Pakistan, we will ensure the donations are delivered as soon as possible. Please bring in or deliver your goods to TheEDGE’s office – Firefly Communications, Abdullah Bin Thani Street, Jaidah Tower, 11th Floor – where we will package ‘kits’ for families in need of food and personal items. Please note: Firefly Communications does not accept cash donations. Thank you for your support.

Additional details as to the relief programme through PIA and box contents can be found online at: www.piac.com.pk/Flood_Relief/ For more information contact Saira Bokhari at Firefly Communications on +974 4434 0360.


BUSINESS INSIGHT

Food Security

The Road To Food Security As environmental conditions intensify and urban populations continue to sprawl, the impact on global food security and safety has also been amplified. In recent years this has forced countries to buy up agricultural land and feedstock in foreign countries, but Qatar is embarking on an ambitious initiative in which to secure domestic food supplies – Qatar National Food Security Programme (QNFSP). The aim of the QNFSP is to draw on cutting-edge technologies and new farming techniques, including aeroponics – soilless agriculture – to achieve food selfsufficiency by 2023. Kelly Lewis spoke to Fahad Al Attiyah, chairman of the QNFSP to discuss the programme’s objectives. QNFSP’s masterplan is to combine overseas production with domestic farming, tapping into research and development institutions to find solutions to harvesting in the desert. Can you discuss the specific targets and budgets of the programme? Our [QNFSP] target is to make Qatar’s food supplies secure. This will take us about 10 years to achieve because we have to overcome some serious constraints; most are natural constraints, but there are also institutional and infrastructure restraints. We aim to make Qatar food secure primarily through domestic resources. However, wherever there is a food deficit it will be supplemented through policies, which will be built on diversifying imports. We aim to build up a strategic reserve of food commodities, be that ambient, long shelf and short shelf produce – it’s a three tier solution to a very complicated problem. In terms of timeframes, we are currently developing the detailed design of the entire masterplan, the details of which will be revealed closer to the date of launch. We have identified the four main components that the programme will be built up upon: renewable energy, water, agriculture and food. We still need to rollout Phase 1, which is

the detailed design and Phase 2, which is the implementation period. I think for us to complete Phase 1, it will take between now until December 2012 and Phase 2 will take 10 years to complete. During this time we will be developing a water desalination plant, building all the supporting infrastructure and implementing institutions to support the programme’s overall framework. For example, we will rollout government institutions such as the Food Safety Agency and the Renewable Energy Agency. Such agencies will be created to bring policies in line with the new masterplan. From implementation, it will take 10 years before we realise, in the year 2023, whether we have really achieved what we intended to achieve. How many farms are currently operating in Qatar and what food stocks are being produced locally? The registered number of farms ranges around 1400. However, recent data shows that only 900 are operational. From these 900, currently they can only supply the market with a small fraction of what’s required. However, people would be very surprised to know that these farms grow a variety of foodstuffs – much of which is assumed not possible to be grown in Qatar – an assortment of the vegetables, fruits, cereal crops and livestock are grown, or reared on these farms. So it is possible to

grow a wide range of crop types, but not currently in the quantity, or the quality that the market demands. The quality can be improved, that is not the issue, but the quantity is the biggest issue we are facing. Another problem is the fact that most of these farms use ancient production techniques. Only by improving efficiency, will farmers be able to produce higher yields. By introducing new technologies, building large desalination plants and power plants, implementing new irrigation systems and by minimising the post-harvest loss, will we be able to improve the situation – post-harvest losses from mishandling, spoilage and pest infestation are put at 40 percent; this means that almost half of what is produced never reaches the consumer for whom it was grown, and the effort and money required to produce it are lost forever. We need to make sure that the entire supply chain is tightly governed and managed in order for us to minimise our losses, given that we live in a very dry country and every drop of water counts. Is Qatar establishing new trade relations in a bid to diversify its secured import food supplies? Absolutely. It is a policy that we have to diversify our food imports as to minimise the risk of future food shortages. I won’t go into specifics, but I would say Africa, as an entire continent, is a very promising. Generally we find that a lot of the Gulf countries, including Qatar, have been mostly dealing with Asian, Eastern European or European countries generally. I think Africa, and also Asia, is the direction that trade relations are moving, this is due largely to the production potential and abundance of natural resources. The surge in world food prices in 2007 and 2008, and the introduction of export restrictions by some countries on certain commodities impelled Gulf countries to develop new strategies in which to ensure food security. How will the QNFSP ward against pricing volatility? There will be a set of criteria that will be developed. There will be a multiplicity of questions that will first have to be asked in which TheEDGE

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to form the basis of the criteria. For example: What is the political, environmental and farming situation in that country? Do we have diplomatic relations with these nations that we are investing in? What is our trade relationship, aside from food, with that country? Such questions would need to be addressed before we decide whether a country is eligible for any of our investments. I think that a company like Hassad Food, which is wholly owned by the government, would be in a good position to develop strict criteria guidelines in a bid to ensure that their investments and pricing structure is protected. A recent report by the Arab Monetary Fund and the Arab Organisation for Agricultural Development stated that Arab nations have reeled under a cumulative farm gap of more than US$155 billion (QR564 billion) over the past nine years. As Qatar imports around 90 percent of its food supplies, what is the annual economic spend on its food imports? The most recent data we have shows that in 2008, the total spend on Qatari food imports was US$1.2 billion (QR5.5 billion). Through the QNFSP we are saying that we can substitute the level and cost of the import deficit that Qatar has by producing a lot of these foods domestically. The QNFSP can justify the cost of producing foodstuffs domestically as the produce will be of better quality, it will be recently harvested and freshly delivered to market from close sources. Whereas if you import food, you are subject to the volatility of international prices. While Qatar imports much of its food supply, it’s not a large consumer in comparison to other countries like Saudi Arabia or Iran, for example. Therefore, it is exposed more greatly to price volatility. If you compare the FAO Food Price Index [which measures monthly price changes for a food basket composed of cereals, oilseeds, dairy, meat and sugar] to the Qatar consumer price index, you would find that our market pricing is extremely volatile. This is due purely to the size of the country’s consumption and ability to buy – at the end of the day that is a risk that the consumers are paying for. We are trying to ease pricing volatility and to help consumers pay reasonable prices, which will be stable throughout the year. We are also aiming to improve the supply chain where foodstuffs are available on a continual basis.

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“We need to make sure that the entire supply chain is tightly governed and managed in order for us to minimise our losses, given that we live in a very dry country and every drop of water counts.” The future is not about whether you can afford to buy food; the future is about whether the food is available and that is a big risk that we are addressing when developing our mass supply. The farm gap, the difference between imports and exports of food products, peaked at about US$23 billion (QR84 billion) in 2008 to bring the cumulative Arab food shortage to US$155.5 billion (QR566 billion) during 2000 to 2008, the report showed. Additionally it stated that total Arab food exports stood at just US$10.5 billion (QR38.2 billion) in 2008, while imports were as high as US$33 billion (QR120 billion), their highest level. How will the QNFSP bridge the fiscal farm gap? We are trying to make available to farmers the tools necessary for them to really bridge that gap. What we are trying to do is to put in incentives to make sure that we have the right controls, so these incentives are not wasted in an unproductive manner. We want to make sure that farmers will use these incentives and produce food in a more efficient way – those who wish to take benefit of the scheme will be subject to conditions, which will enable us to control the supply chain. Some of the provisions will include that the entire farm must be third generation – we are not going to be sticking to all the ancient practices as they won’t achieve the desired result. The farm gap will need to be bridged fairly quickly and the only way to achieve this is to introduce technologies that are adaptable to arid climates. In order to effectively implement such incentives we are surveying a diversity of globally available technologies that are designed to produce a variety of produce such as vegetables, fruits, cereals and fodder. Firstly, we are investigating how these technologies would work in this region. Once we have fully established this we will work to build our incentive schemes. We will make these technologies available and accessible to farmers through the creation of agencies that will assist with the process, while also facilitating that transition through the

availability of microfinancing. In terms of when the produce will enter into the market, we will assist with subsidies where required. We know that agriculture globally is hugely subsidised – we are not going to be hiding the fact that subsidies are going to be playing a role as part of the QNFSP, but are they going to be smart subsidies. You have previously said that investment in research into the use of renewable energy, particularly solar power, in future desalination plants offers a means to increase domestic food production. What research and development (R&D) institutions is QNFSP looking to work with to develop new technologies? Our technologies partners include the German Aerospace Institute (DLR), the Norman Borlaug Institute for International Agriculture at Texas A&M University (Texas) – one of the world’s best known agricultural institutes, International Center for Agricultural Research in the Dry Areas (ICARDA) – one of only 15 institutions globally recognised that conduct research in dryland areas. We have a network of R&D centres that we are dealing with and we have held talks with various United States (US) based institutions, including Sandia National Laboratories, among others. We are doing this in the hope that Qatar can become a preferred remote R&D location whereby such centres would establish local R&D facilities in Qatar. Not only to serve Qatar, but the entire Middle East and North Africa (MENA) region in research into solar technologies, agriculture, water, food sciences and biodiversity. We are also trying to encourage a critical mass of such centres. We are not simply looking for the establishment of one centre per research field, but rather a multiplicity of research centres for each industry – maybe up to 100 R&D centres ranging in size, covering different areas and different disciplines in the industry. We need to bring solutions to where the problems are. Additionally, it’s common to find solutions that have been developed from afield, but there


BUSINESS INSIGHT

are inherent problems with this, such as lengthy periods of delivery and adaption. In most cases the studies have been conducted in climates and conditions dissimilar to this region, therefore the R&D may not always be valid. Many of the R&D centres that we have been in contact with agree that they should be closer to where the issues are in order to address the matters more rapidly and effectively – this is an interesting evolution; a new approach that has not been prevalent before now. There is a huge deficit when it comes to regional, basic and fundamental research as well as applied research. Applied research is important, but equally basic and fundamental research is essential because it addresses the long-term issues and matters that may not be of concern today, but could be of concern in the future. Qatar’s General Electricity and Water Corporation (Kahramaa) has chosen French environmental consultant Sogreah for a feasibility study to investigate the state’s first solar seawater desalination plant, which forms part of the QNFSP project. The Qatari authorities have set an ambitious target of producing up to five million cubic metres per day of water to irrigate inland agricultural areas. Can you talk more in-depth about this project? We have various scenarios of water requirement. We have not yet defined the exact definitive figure, but our maximum scenario is a desalination plant capable of producing five million cubic metres of water per day, which means it’s going to be the largest desalination plant ever built globally. The most important aspect to this programme is that, in regard to the whole water production and the energy required, we are underpinning it with renewables. We will produce water supply using only renewable energy. This is the interesting aspect of this entire programme because for us to really be sustainable, using fossil fuels is not going to be viable option. Even though we know that it

could last us for decades to come, from a strategic point of view, underpinning an entire industry on a depleteable source is not a wise thing to do. Providing resources using renewable technology will enable us work towards offsetting a lot of the emissions that we are currently producing. You have previously gone on record saying that the GCC should give the highest priority to establishing a regional centre of excellence for solar-energy research for water desalination, greenhouse solar cooling and greenhouse hydroponic-technology development. And that a dedicated GCC agricultural research centre for dryland crops, livestock and aquaculture development, and adaptation to future climate change should also be established. In regard to this, is QNFSP involved in the establishment of such initiatives itself? Qatar signed a memorandum of understanding (MOU) with the US recently between the US Department of Energy and the Ministry of Energy and Industry in Qatar. The MOU addresses cooperation in the areas of renewable energy, green technology, water, with very little reference to utilising hydrocarbon resources or the conventional energy sources. We are also in discussions with the Federal Government of Germany to establish an R&D facility for this here in Qatar. These discussions are still ongoing and we cannot really release more information about at this stage, but we are making concrete steps to establish such initiatives. We have been visiting a multiplicity of R&D centres in the US, Britain, Germany and in the MENA region, with the aim to understand what is required and what the deficiencies are in the region. This will help us to devise our plans more effectively and to address these issues, and factor them in for future references. Additionally, we have been involved in workshops and conferences. We are organising a side event taking place in New York this month. During the

“A key component of the QNFSP initiative is that it has a zero export policy, whereas in other countries such measures are not in place. This policy will help Qatar guard against protecting its resources and natural reserves.”

event we will bring together dryland countries in the hope of a creating an alliance called the Global Dryland Alliance. This is a new concept that we are putting forth as a way of making Qatar take the lead with the initiative – there are 700 million people globally living in dryland areas, so the intention is to build an alliance that will recognise the issues relating to dryland countries and move towards finding solutions. There is a lack of science-based information in regard to the agro-ecological suitability of any given locality for different types of crop. What role does QNFSP play in making strategic decisions, and research into which crops to produce locally, and which to secure through international and GCC investments? That is an excellent question. There is a huge science-based knowledge gap and this knowledge gap not only exists in the minds of policymakers, or in those in charge of developing strategies, but it also, most importantly, exists with the farmers who are there to support the market and who are there to respond to market demands. It will be very costly for farmers to experiment growing crops that have not been proven in the region and because of the knowledge gap, farmers will not go down that route. As it stands, we are actually unaware of our ability, or inability, of growing a variety of crops in a climate like Qatar’s, whether using technology or not. So what we have embarked on with the QNFSP is research in which to create a reference document that will remove the gap and make information available to farmers and investors domestically on what can be achieved. As part of the QNFSP we will be conducting a series of crop trials – some will be laboratory-based – which will not exclude any crop type; we will not exclude rice or wheat, not even apples, which we know very well will not grow in Qatar, but we need to have the research available, at least technically, so we can inform farmers on what crops are viable and ecologically possible. A key component of the QNFSP initiative is that it has a zero export policy, whereas in other countries such measures are not in place. This policy will help Qatar guard against protecting its resources and natural reserves. The world’s consumption is growing and there is only a finite amount of water or resources that are available to one country. As a way of addressing this problem in Qatar, we have decided that we will not export any of our food. How could TheEDGE

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you begin to think of exporting when you have a food deficit of 90 percent? I don’t think that we will arrive at a position where Qatar would consider exporting its food. Having said that, Qatar could re-export products by adding value to its imported goods in the form of raw materials, then process it and make it into food for re-export – this is something that we are planning as part of the QNFSP. By drawing on our overseas investments it will help to diversify the economy and also make Qatar a magnet for processing giants and food companies such as Procter and Gamble, Nestlé and Unilever – we would hope for such companies to view Qatar as a regional base for their operations. There is much debate on overseas farmland investments. Can you discuss the pros and cons and the means to mitigate negative consequences, while also discussing the importance of establishing legal framework, a code of conduct and sustainability assurances to help the emergence of a win-win situation, one where the benefit of free trade and cross-border investment and integration would accrue to all countries and people? I will talk first about free trade. Free trade is excellent in times where there is no crisis. And in times when there is a crisis when there are shortages of food, we are talking about not stopping food from coming in, but export restrictions. Recently we have seen such moves in Russia as a result of the country’s severe fires. Such moves may soon be followed by the Ukraine. I am also very concerned about the long-term impact that the floods in Pakistan will have on the country’s rice exports. Pakistan is one of the largest rice producers in the world. The entire Punjab region is flooded and that is where most of Pakistan’s agricultural land is located. Free trade can help and is essential, however, free trade also has its limitations. Realising these limitations makes us question what we are going to do. It draws attention to how we will need to address such issues in our policies, in our strategies, in our investment strategies, etcetera. It is essential that when we invest in a country we realise the girth of our investments, that we do not put our eggs in one basket, for example. Secondly, when we go to lesser-developed countries, for example, in East Africa or West Africa, our investments are coupled with many benefits and with technology transfer to such

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nations. It is supported by the fact that we will be employing a lot of locals. It is coupled with the fact that we are very cautious as to environmental practices – we want to ensure longevity. We are not in the business of going into a country, doing investments and leaving an environmental catastrophe behind. This is certainly not the reputation that we would want to have and neither the policy that we would want to institute. All of these things are part of our overall QNFSP vision and when we invest in a country, we ensure that we bring with us more than just the financial investment. Our added value is that we educate, train, maintain and improve environmental conditions – this is not rhetoric, this is actually practice, which we achieve through initiatives instituted by the Consort of the Emir Sheikha Mozah. These programmes include working with Silatech in Iraq and in Yemen where we are training young men and women in a bid to equip and prepare them to work in the market. This all costs a lot of money, but we know that this money is worth paying for because it makes available, well-skilled people to work in these investments long-term.

Would the QNFSP be open to implementing genetically modified (GM) crops as part of its plan? We are open to GM. I do not have an issue with GM as long as the science, the process and the methodology has been proven to be safe and secure. I believe that GM is a technology that the world should employ as it can certainly help challenged agricultural areas. To date science has not proven any negative aspects to GM. Sceptics and the media have fed the negative view, and that debate will continue for some time to come. But then you ask yourself the question: ‘Would GM help a country like Qatar?’ The answer, from my understanding, is that it could be yes. I am not saying that it is a definite yes, but I am saying, GM technology could help to produce locally grown crops that are heat resistant, water resistant and salt resistant. We are open to adopting the best solution, the one that will be also mindful of all the associated issues, like the heavy use of fertilisers…we may actually create our own GM laboratories in order to free ourselves from all the monopoly that is associated with GM produced seeds.

How is QNFSP actively establishing functional partnerships between politicians, scientists, the business community and the consumers in order to move beyond rhetoric to real actions for sustainable food security? The QNFSP must involve all stakeholders from the onset. How we are structured is that we are a taskforce of 14 government agencies led directly by the Emir’s office and run from the highest political level. The level of coordination with private sector and non-governmental organisations is of the utmost importance, therefore, we are engaged in constant dialogue and communication with them discussing all the various aspects. In the private sector, we are talking to farmers, traders and the retailers in order to address their fears and concerns, and to understand what is actually stopping them from achieving growth. Or alternatively, to help them plan for where they want to be positioned in the years to come. We will work to architect a system that will function from its implementation – 2013 to 2023 – and by full-scale rollout we want to help establish a fully functional economy that has a purposeful matrix in place between the private and public sector, education, R&D and the marketplace.

What about new job creation as part of the QNFSP initiative? There will be a vast amount of new jobs created as part of the programme. While we are not yet in a position to put a figure on it, we estimate that it will be substantial. The QNFSP will help to create new economies and there will be job opportunities across the board from education, R&D, industry, technology, factories for irrigation and solar manufacturing, as well as jobs in the domestic farming marketplace and in the water sector, the renewable sector, the government sector and within institutions. To develop the framework for the employment, we are working in conjunction with several institutions locally to develop the entire human resources plan. Given the amount of local expertise that will be required going forward, will the QNFSP look to create agricultural universities? Definitely this is part of the long-term plan. We are looking to establish an agricultural university based in Qatar, which will also serve the broader MENA region – we do not have specific timeframes for its rollout currently, but it’s all coordinated and synchronised as part of the plan’s strategy.


BUSINESS INSIGHT

Agribusiness

Agribusinesses ripe for harvest Extreme heat, limited water supplies and high soil salinity, coupled with an ever-sprawling urban population, make farming in the Gulf region a major challenge. However, it is a challenge that must be overcome if the region is to combat the growing issue of food security. Despite the obstacles, Qatar, among other Gulf states, is investing in agribusinesses and technologies that would help secure food supplies domestically. Kelly Lewis spoke one-on-one with the chairman of Hassad Food, Nasser Mohamed Al Hajri, to discuss the investments it is making on the domestic and foreign front. Hassad, established by the Qatar Investment Authority (QIA) in July 2008, is a venture that aims to secure the state’s food supplies by heavily investing in food production on a global scale. By the year-end Hassad plans to invest up to US$700 million (QR2.5 billion) in buying stakes in globally positioned agricultural companies as part of the government’s strategy to secure an adequate supply of reasonably priced food. Hassad has set itself an ambitious five-year plan in which to: achieve the state’s food security; invest in global long-term key projects/companies/ operators; develop strategic alliances/partnerships; ensure geographic diversification and flexibility; comply with global standards and produce an international standard of branded products. To achieve its strategic plan, Al Hajri explained that the company has five key pillars that it is focused on: “The production and supply of rice, sugar, grain, meat (white and red), and animal feed.” Hassad’s mission is to develop its business in three stages. Initially it will focus on companies that produce basic food items, like meat, wheat, rice, sugar, soybeans and animal feed. In the second phase, it will extend its operations to fruits and vegetable farming, and in the third, it will start marketing and packaging produce under its own brand.

To date, the countries and sectors that Hassad has identified are Qatar (animal feed, flower, poultry, logistics, greenhouse); Australia (sheep, grain); Brazil (poultry/beef, sugar, grain); Argentina (grain); Sudan (sugar, grain, animal feed); Turkey (meat, dairy, sheep, grain); Cambodia, India, Pakistan (rice); Uruguay (rice, grain, meat) and Georgia (grain). However, Al Hajri said the company was also investigating further ventures in Guatemala, Columbia, Dominican Republic, Ukraine, Romania, Russia, Georgia, Mozambique, Vietnam and New Zealand. Al Hajri said Hassad aimed to be in a position where it could say “in general terms, that it is supplying Qatar with at least 60 percent of the country’s food requirements”. “To accomplish this target we will have to continue to invest heavily. In fact in the past two years, we have been analysing the required market demand and production. We have looked at our food purchases and investment volumes during this period, and we are now in a position where some of our projects are coming on-stream. We anticipate projects in Australia, Argentina, Brazil, Turkey, Sudan, India and Vietnam to come on-line this year. “In fact we are targeting to have some of our rice production arrive in Qatar before the end of this year.”

Qatar, like most of its neighbouring Gulf states, is heavily reliant on imported food, buying up to 98 percent of its requirements from foreign soil. The surge in world food prices in 2007 and 2008, and the introduction of export restrictions by some countries on certain commodities – which began in late 2007 when wheat-exporting countries, like Russia and Argentina, attempted to counter domestic food price rises by limiting or banning exports – impelled Gulf countries to develop new strategies in which to ensure food security. While these moves reassured those living in the exporting countries, they created panic in the scores of countries that import vital produce. At that point, as world market prices for grain and soybeans were soaring, governments in foodimporting countries suddenly realised that they could no longer rely on the market for supplies. In response, some countries boosted efforts to firm-up long-term bilateral trade agreements that would achieve future grain supplies. However, in a seller’s market, few were successful. The inability to negotiate long-term trade agreements was accompanied by an entirely new genre of responses among the more affluent foodimporting countries as they sought to buy or lease large blocks of land to farm in other countries. As food supplies tighten around the globe there is an unprecedented pursuit for land – a quest that crosses national boundaries. The role of government in land acquisition varies. In some cases, government-owned corporations are acquiring the land. In others, private entities are the buyers, with the government of the investing country using its diplomatic resources to achieve an agreement favourable to the investors. The land-buying countries are mostly those whose populations have outrun their own land and water resources. Among them are Qatar, Saudi Arabia, Kuwait, Egypt, Jordan and the United Arab Emirates. Some of these countries, for example, have leased farmland in Ethiopia, Ukraine, Sudan, Kazakhstan, the Philippines, Vietnam, and Brazil. TheEDGE

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However, Hassad states that the direct leasing of land is not in line with its strategic ambitions: Al Hajri explained that leasing deals are not always “win-win situations”. “Land by itself is worth nothing to us, we are investing in the long-term production of land in line with the local farming community…we don’t want to be in a situation where the rich are taking away food and land from the poor.” Al Hajri states that Hassad has set itself apart from other Gulf states in that it is focused on the acquisition and development of existing agribusiness companies rather than involving the lease of large tracts of farmland. Foreign governments and private firms investing and acquiring large tracts of land in other countries for the purpose of agricultural production and export have been a widely documented trend in recent years. These large-scale land-lease deals have attracted criticism on the grounds that they could impair the rights of existing smallholders and damage the host country’s own food security. Last year, the Economist ran an article, which featured statistics from the International Food Policy Research Institute. It stated that 37 to 49 million acres of farmland were the subject of deals or proposed deals involving foreigners, between 2006 and mid-2009 alone. Such investments are spurred by concerns over food security and growing populations, as well as the expanding market for biofuels. Governments and private investors alike are brokering deals for large swathes of fertile land, sometimes in exchange for promises of investments in infrastructure or education, and sometimes for what amounts to pennies. In either case, when countries buy up arable land in foreign countries, it can have a knockon effect on that country’s land sovereignty, its investments in smallholder agriculture, on food security and indigenous identity, which also produces a conundrum for policymakers on the issue. In Hassad’s case, Al Hajri said the company firmly understood the importance of land sovereignty and investments in smallholder agriculture to food security and indigenous identity. However, he said, “if managed correctly” foreign deals could be a “win-win” solution for those involved. Al Hajri highlighted the need for more community-investor partnerships, which do not require large-scale transfer of land rights.

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“We anticipate projects in Australia, Argentina, Brazil, Turkey, Sudan, India and Vietnam to come on-line this year… In fact we are targeting to have some of our rice production arrive in Qatar before the end of this year.” He said it was imperative for foreign deals to be long-term, while fully taking into account the associated social, economic and environmental impacts. That they should balance profit with social responsibility, while being supported by governments, civil society organisations, and the private sector, to ensure that they are mutually beneficial. “Hassad is not a short-term investor, it’s a long-term investor. We do not believe in land grabbing. We are not about real estate investment. We are interested in investing in food production and agribusiness. Therefore, Hassad looks to work together with the community that it’s invested in. We have to be part of it,” Al Hajri stated. He added that the success of long-term deals would only be realised through the implementation of supporting mechanisms such as the securitisation of land rights, giving local community members a role in negotiations, strengthening the integrity of contracts, and establishing robust monitoring mechanisms to oversee implementation of land policies and laws. In a bid to step up its community-based relations, last year Hassad put in place firm agreements with eight leading charitable and humanitarian organisations in Qatar. Under the terms of the agreement Al Hajri said the organisations would work alongside Hassad to vent out their activities in the form of education, health services, developmental projects and job opportunities on Hassad’s project sites. Additionally, to provide access to an abundance of foreign cultivated farmland, Hassad formed a 100 percent Sydney-based subsidiary last December, Hassad Australia, to buy farmland for wheat and livestock production. The move marked the company’s first established subsidiary. However, Hassad has since established a second, 75 percentowned subsidiary in Sudan, Hassad Sudan. The company’s strategy is to target regional operators in host countries, and either establish

a joint production venture with them or acquire them wholly. Al Hajri confirmed that Hassad was in advanced stages of establishing three further subsidiaries this year in Turkey, Brazil and Argentina, respectively. While there are many examples of foreigners buying land in the past couple of years, Hassad exemplifies sovereign wealth funds buying up rural land in Australia. Hassad has bought more than AU$40 million (QR130 million) worth of sheep stations in northern New South Wales and South Australia in the past six months and intends to increase its land holding, according to the Australian Financial Review. The expanding market for bio-fuels is viewed by some as an issue for food security as it competes for arable land space and natural resources. While Hassad’s role is to increase food security, Al Hajri said that it would take a “flexible” approach and consider investing in land for biofuel production. “On seeing the opportunities currently within Hassad’s reach and evaluating them, we have identified some opportunities [namely with regards to sugar] where we could produce a 70/30 percent biofuel to produce breakdown. However, because our priority is to produce food and not biofuel, we would aim for a 30/70 percent biofuel to produce mix,” Al Hajri stated. “When you talk about economy and scale, and business and profit, you have to have the right mix. Therefore, we are flexible; we would like to see more food than biofuels produced, but whenever biofuel makes a profit – and profit is a core part of our mission – then we have to make the decisions that correspond with that.” Meanwhile, Al Hajri confirmed that the government is planning to launch an initial public offering for the shares of Hassad Food, in order to list it on the local bourse. “We [Hassad] will be floated on the Qatar Exchange and I believe that will take place within a period of two to three years.”


BUSINESS INSIGHT

Water Desalination

Quenching Qatar’s thirst As a result of its burgeoning industry, coupled with the country’s thirsty population, Qatar is set to wear the unpalatable tag of one of the world’s highest per-capita users of water. However, a privately held start-up company based in Qatar, Sterling Water, is working to ease the burden of the state’s water shortages through the implementation of cutting-edge technologies. Kelly Lewis spoke directly with George Forbes, the managing director of Sterling Water, to find out more about the initiative. It is widely understood that Qatar and the Gulf region, have limited groundwater resources, which are rapidly depleting due to excessive use. Over the years the fresh water scarcity has resulted in a heavy reliance on desalinated water supply – a dependence where the Gulf economies account for more than 40 percent of the world’s water desalination capacity. In its recent report, the Economist Intelligence Unit (EIU) stated Qatar’s water demand was set to double by the decade-end, with EIU projecting a requirement for 104.7 billion imperial gallons by 2020. For 2010, Qatar’s water requirements are estimated to stand at 56.22 billion imperial gallons. The growth in demand for water in Qatar is among the highest in the Gulf countries. In a bid to meet the mounting demand, the region will be forced to rely increasingly on desalinated water, which, in regard to traditional desalination methods, is expensive and energy-intensive. However, Forbes believes that the water desalination technology that his company is putting forth will deliver one highly efficient and affordable solution to the widespread problem. The technology (waterpod), developed by the New Mexico State University (NMSU) in the United States (US), employs a low temperature evaporative water desalination system that slashes the energy and maintenance costs associated with converting salt water to potable water. Low temperature distillation is widely considered as one of the most promising methods of desalination.

In a major step forward for the desalination industry, the research team behind the concept, led by Doctor Nirmala Khandan at the College of Engineering at NMSU, developed a successful proof-of-concept model last year. The NMSUled project transferred the science and prototype model from lab bench to a market-capable product. Earlier this year Sterling Water acquired the worldwide rights to the technology. The system was developed in a bid to tap into available brackish water resources, purify it and then use the reserves to augment limited freshwater supplies. Additionally, the technology offers the industry with an alternative desalination process as opposed to the more traditional methods such as reverse osmosis and electrodialysis, which consume significant amounts of energy. Forbes stated that the system utilises the natural effects of gravity and atmospheric pressure to create a vacuum in which water can evaporate and condense at near-ambient temperatures.

How the system works is that a vacuum is created between two vertically aligned 30-foot tubes – one rising up from a tank of saline water and the other from a tank of freshwater – connected at the top by a horizontal tube. Only a nominal increase of between 10 to 15 degrees in the headspace water temperature over the saline column is required to cause the flow to travel in the freshwater direction. This enables pure, distilled water to collect in the freshwater column, while the brine concentrate is left behind to flow into a separate container. As this technology requires so little energy to run, it can be powered using low-grade heat like solar energy. Forbes said that Sterling Water opted for the use of solar energy as it was not only energy efficient technology, but the solar panel (one per unit) produced enough energy to drive the pumps that manage the source water, while also storing energy to enable maintain continuous production. The original unit designed by the research team at NMSU in 2007, produced five gallons per day. The technology later evolved in 2009 to include a two-stage evaporator unit, which enabled the system to produce more than 200 gallons per day, or enough pure water to meet the need for about 15 to 37 people. Now that Sterling Water holds the rights to this technology, Forbes said that the company “always understood the capability of the technology and realised its potential for use, not only in the US, but more so in arid, water challenged areas such as the Middle East, Australia, India, China, Pakistan, North Africa and Southeast Asia”. “In January this year we were granted the license, by February we initiated international legal patents to protect our intellectual property and

“We feel, rather than having centralised water distribution, which means also centralised control, we can move the waterpod to places that presently are not served. I think that is a paradigm shift and I think this really can change the game in many ways for people around the world.” TheEDGE

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BUSINESS INSIGHT

those were completed around April. Now our intention is to get the product market-ready for rollout within 2011.” While the company has already approached a number of major players in the Qatari market, Forbes said the discussions had been verbal and produced “loose agreements”, which were “too premature to discuss” at this stage. “Our goal now is to transform the 200 gallons per day model and build a manufacturing prototype, we will endeavour with this for the next month,” he confirmed. Forbes said Sterling Water wanted to establish itself as the point of incubation, and to set up its operations in Qatar Science and Technology Park as he believed the venture would be a “good fit” for the company. “Our model is for us to be the intellectual property developers, the technology innovators and the people who manufacture the technology. We want to commercialise the product for the broader marketplace and to build next generation products – we want to build our systems for an established network of partners in various countries,” he said. “It would be far too ambitious for us to open up supply and marketing channels in each individual market. Instead what we aim to do is give exclusive rights to a select number of companies that have the local expertise and are ready to take the product and move with it. These partners would be the retail point of sale, while we will remain at the wholesale point of sale.” Forbes said he believed the technology would “most likely” gain entry into markets that were not “presently served”. He said that would likely be in areas where there were barriers to entry with conventional devices like electricity and other sources of energy, which are principally derived from fossil fuels. However, he added that places in need of humanitarian assistance, such as Pakistan, Haiti and China were also prospects for this technology. “I really believe this is a potential solution for these instances where we are seeing brackish water, contamination of freshwater and aquifers because, in many places, we are seeing wells just being abandoned. The infrastructure is in place, the well remains, the groundwater is there, it’s just no longer usable,” he stated. “Bangladesh is a prime example where millions of people are being poisoned by groundwater arsenic contamination. With our technology we could retrofit the existing

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“Bangladesh is a prime example where millions of people are being poisoned by groundwater arsenic contamination. With our technology we could retrofit the existing infrastructure in those ground wells to draw potable water fit for consumption.” infrastructure in those ground wells to draw potable water fit for consumption.” On the local front, Forbes said he believed the technology would have the biggest impact in rural areas where water was presently serviced by vehicles, or in agriculture. However, once the waterpod is fully rolled out into the market, Forbes said the employment of the technology would “probably move in directions that we did not think of”. Additionally, Forbes said that Sterling Water had the next generation of products already in the pipeline, with systems capable of producing 1000 gallons per day and “upwards in the tank configuration”. In regard to pricing and manufacturing of the waterpod, Forbes said that “intuition tells us that if we do manage the intellectual property and design, and the commercialisation process here in Qatar, we can then be in a good position because we will be able to straddle both East and West to take advantage of lower cost centres available for manufacturing.” However, Forbes said the factors he believed would dictate this would be the point of sale, the networks and territories, the cost of materials and labour, and the overall environment. “We want to be positioned in an environment that really promotes entrepreneurship, but we don’t want to be positioned in a high tax environment or an environment that would impede our growth in any way,” he added. Forbes said the pricing structure of the waterpod was still yet to be defined. “We are still toying with the price structure because it depends on the scale of the system required – the price could range dramatically based on the individual requirements of the system – I don’t know that we can project a target price point at this stage.” However, as the manufacturing prototype will be developed over the course of the month, Forbes said that the next few weeks would give the

company greater insight in which to flesh out some firm cost structures. “However, I think at the end of the day our initial assessment is looking at worse case and best case scenarios, which will put us in a position where orders of magnitude will be less expensive than the existing and conventional technology that is in the marketplace,” Forbes confirmed. “When you look at a major desalination plant with, for example, 500,000 gallons per day, because of the sheer volume, the cost per unit is very low. If you compare that to a device, which is conventional and produces 200 gallons per day using reverse osmosis with the required infrastructure, the unit price is significantly higher than our unit price per product.” Forbes said he believed that this new technology would not only disrupt people’s mindset when it comes to desalination technology, but that it would also disrupt people’s buying habits. “People will now be in position where they have to consider an upfront capital expense with almost no running cost or operating cost, as compared to the conventional model, which is a capital cost upfront plus the additional running costs. Therefore, we may have to look at ways to match our customers’ needs. For example, with leasing, financing, buybacks; the kinds of initiatives that are currently not in the market. We are going to be pioneering with new ways to enable people to have water.” Forbes said just as with any new innovation start-up, that he expected to encounter some level of resistance and scepticism, but he said Sterling Water’s ambition was to produce a device that could “enable the earth to quench its thirst”. “We feel, rather than having centralised water distribution, which means also centralised control, we can move the waterpod to places that presently are not served. I think that is a paradigm shift and I think this really can change the game in many ways for people around the world.”


IN THE SPOTLIGHT

The ISLAMIC Alternative Uncertainty in the lending market should have ostensibly led to an increase in interest in Islamic Banking in the United Kingdom. But, despite being promoted by the government, Shari’ah-compliant finance is widely considered to have ‘flopped’…or has it? Christine Toner investigates

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ince the credit crunch hit the United Kingdom (UK) back in 2007, there have been two main challenges for those who lend money: risk and liquidity. Even now, in 2010, both of these issues still concern business leaders, as they struggle to obtain finance without posing any risk to their enterprises. Moreover, with interest rates at their lowest levels in history, private individuals have sought to put their money elsewhere, so mainstream banks that have traditionally relied on revenue savings accounts are also feeling the pinch. Meanwhile, specialised lenders are struggling to secure funds due to the fall of the securitisation market, where they previously raised money.

THE ISLAMIC ALTERNATIVE

The Islamic Bank of Britain is one of the most liquid and prudent banks in the country.

However, one lending institution in the UK is facing neither of these problems, the Islamic Bank of Britain (IBB), which is one of the most liquid and prudent banks in the country, mainly due to the amount of private savings it holds and its attitude towards lending. Even in 2008, at the height of the economic meltdown, accountant and financial adviser BDO Stoy Hayward predicted that more individuals and corporations would invest in Islamic banking and Shari’ah-compliant products. It claimed Islamic banks were some of the few financial institutions to still have significant sums


IN THE SPOTLIGHT

of money available for finance, unlike their Western banking counterparts, who would continue to constrict their lending policies. Dan Taylor, head of banking at BDO Stoy Hayward, also opined that further growth of Islamic banking in the UK would be attributed to their more conservative approach to financing, as, much like the private equity model, risks are shared with investors. In addition, he said, it is more difficult for Islamic financial institutions to use leverage, so their risk profile is naturally lower. “In light of the prevailing market turmoil we could expect the number of standalone Islamic financial institutions present in the UK to double in the next three years, further reaffirming London’s position as the centre of choice for the provision of Islamic finance,” added Taylor.

PERCEIVED AS A ‘FLOP’

One might assume that this would precipitate more business for Islamic finance, but a recent article in the Times indicated that the opposite was in fact true. “Islamic bank accounts and other financial products have failed to take off in Britain,” it claimed. “This is despite hopes that the UK would become a pioneer in a new growth market. New banks that were set up to appeal to the UK’s nearly two million Muslims and Shari’ah-compliant products created by the existing high street lenders have failed to make much of an impact, critics say.” Indeed, IBB is not the only provider of Islamic finance in the UK, but these have had various degrees of success. HSBC has an Islamic banking arm called Amanah, which has been fairly successful over the years. Lloyds Banking Group though, attempted to offer Shari’ah-compliant products but did not prove too successful. Nevertheless, for the past few years the UK government has been keen to promote the country as a location for international Islamic finance. Indeed, despite the Times article, figures released by the Banker magazine estimated that four years after the market was launched in the UK it was worth an estimated US19.4 billion (QR69 billion). So why has it been viewed as unsuccessful? Firstly, Steven Amos, head of marketing at IBB, says it is important to clarify that the abovementioned article was a little “over emotive”. Amos says the problem the banking system faces is that initial expectations, first formed when the bank opened in 2004, were unrealistic. He says the fact the bank has not lived up to these expectations is why it has been viewed as a failure and is used in the argument that Islamic finance has “flopped” as some in the UK have termed it. But the bank has actually remained steady throughout the credit crunch and a recent cash injection of GBP20 million (QR112 million)

Lloyds Bank in the UK were one of the first adopt Islamic finance but without much success, contributing to the unfounded sentiment that the concept was a ‘flop’ in the country.

With an Islamic banking arm called Amanah, HSBC has been one of the few non-Islamic banks in the UK to adopt Shari’ah-based financial principles with some success.

will allow the lender to be a more competitive player in the market. Amos said in the future more information is key in order for Islamic finance to be a success, this is because brokers and consumers do not necessarily understand the products enough to get involved; but the IBB is working to educate both customers and advisers, especially the latter so they are best placed to recommend Shari’ah-compliant products. However, this is not always easy. “It is a difficult market,” agrees financial adviser Fahim Antoniades. “First, there are cultural differences in the way personal information is exchanged by individuals here and in the Islamic world. In my experience if you get to know a Muslim person well they will give you an insight into their personal situation and financial standing, whereas in Western culture it is almost the opposite – individuals prefer not to let even friends or neighbours in on their personal situation.” The IBB’s attempts to make Islamic finance available to all and to help UK consumers understand it may go some way towards making Islamic finance a success yet. With the government keen to promote the benefits of Shari’ah-compliant finance, the IBB and other providers may see a surge in interest and, in the near future, those ‘unrealistic expectations’ of 2004 may become far more achievable. TheEDGE

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IN THE SPOTLIGHT

Key terms in Islamic Finance

Ijara (a form of leasing) involves a contract whereby the bank buys and then leases an item such as a consumer durable for a specified rent over a specific period. The duration of the lease as well as the basis for the rent are set and agreed in advance. The bank retains ownership of the item throughout the arrangement and claims it at the end. Ijara-wa-iktana is similar to Ijara except that included in the contract is a promise by the customer to buy the item at the end of the lease period at a pre-agreed price. Rentals paid during the period of the lease constitute part of the purchase price and final sale is often for a token sum. Ijara (with diminishing Musharaka), the principle of Ijara with diminishing Musharaka can be used for home buying services. Diminishing Musharaka means the bank reduces its equity in an asset with any additional capital payment customers make, over and above rental payments. Their ownership of the asset increases and the bank’s decreases by a similar amount each time it makes a capital payment. Mudaraba refers to an investment made on a client’s behalf by a more skilled person. It takes the form of a contract between two parties, one, who provides the funds and the other, who provides the expertise. These parties agree to the division of any profits made in advance. In other words, a bank would make Shari’ah-compliant investments and share the profits with the customer, in effect charging for its time and effort. If no profit is made the loss is borne by the customer and the bank does not take a fee. Mudarib In a Mudaraba contract, the expert who manages the investment is known as a Mudarib.

Murabaha is a contract for purchase and resale and allows a customer

to make purchases without having to take out a loan and pay interest. So the bank purchases the goods for the customer and resells them to the customer on a deferred basis, adding an agreed profit margin. The customer then pays the sale price for the goods in instalments effectively obtaining credit without paying interest.

Musharaka means partnership. It involves one party placing capital

with another and both sharing the risks and rewards. The difference between Musharaka arrangements and normal banking is that any kind of profit-sharing ratio can be agreed, but losses must be proportionate to the amount invested.

Qard is a loan that is free of profit. Banks usually use this arrangement for current accounts. In essence, it means that a current account is a loan to the bank, which is used for investment and other purposes. Obviously, it has to be paid back in full on demand. Riba means interest, which is prohibited in Islamic law. Wakala is an agency contract, which usually includes in its terms a fee for the expertise of the agent. For example, a bank may use it for large deposit accounts.

A teller counts money at the Islamic Bank of Britain in London.

UNDERSTANDING SHARI’AH BANKING

Islamic finance has its roots in Shari’ah law, under which making money from money is forbidden and profit should only be made through legitimate investments. This means there are two main differentiators between Islamic banking and conventional lending. Firstly, Islamic banking is ethical, and investing in businesses which are considered unethical is prohibited. This includes companies that deal in arms, gambling, pornography, tobacco or any others contrary to Islamic values. And second, interest is forbidden. “Islamic banking is structured on the principles of risk-sharing and entrepreneurship,” says Amos. “Rather than paying interest, Islamic banks share profits according to a ratio agreed in advance with their customers. The main difference between Islamic and conventional banking is that Islamic teaching maintains that money itself has no intrinsic value.” As wealth can only be generated through legitimate trade and investment, any gains relating to this trading are shared between the person providing the capital and the person providing the expertise. IBB generates all its profit through Shari’ahcompliant trading and investment activities. It then shares any profits with its customers, who must hold one of IBB’s savings or investment accounts, at a pre-agreed ratio. Source: Islamic Bank of Britain

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MARKET WATCH

GOOD COP, BAD COP Who do you trust with your offshore investments when not a day passes without a call – and sales pitch – from a potential financial adviser? Jonathan Dymond recommends a sensible approach that will help investors avoid the possible pitfalls.


MARKET WATCH

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hoosing a competent financial adviser is a real concern for most offshore savers or potential investors. Certainly, in the past, advisers were seen as being similar to secondhand car dealers and insurance sales representatives. These days, in the United Kingdom and Europe, the reputation of those in the industry has improved significantly, thanks in no small part to the larger established firms moving to a fee-based income system, removing the stigma of commissions from the equation. This change was the result of both media pressure and consumer dissatisfaction, backed by the full weight of the Financial Services Authority (FSA) and its subsequent legislative measures. In the Middle East, there is currently no such regulation. It has been promised, but when it will arrive (and whether it will have the teeth to ensure it is meaningful) is uncertain. A year ago, an informed source at the Qatar Financial Centre remarked, “Yes, certainly [full regulation] is on the agenda, but I think we will see all the roads and pavements in Doha finished first.” While we await regulatory changes, attention should also be paid to the manner in which many financial advisers are educated, and how they view and approach their role in their relationships with clients. Prior to establishing an office in Doha, I attended a ‘training course’ organised by a financial organisation, against my better judgement in retrospect. The entire course was geared towards learning a sales script by heart and delivering it to a prospect. Of the 17 delegates, only two of us were industry professionals, the rest were an eclectic mix of young telesales people and last-ditch salesmen. The business model employed by this company – and taught to us delegates – was one with little planning, research or relationship-building. They advocated a process where we were encouraged to throw enough mud at a wall, in the hope that inevitably some of it would stick.

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But the reality is, whether it sticks or not, it is still mud. To the best of my knowledge, this organisation no longer operates in Qatar. However they are still many such ‘financial advisers’ around and it is key to know which ones to steer clear of. To aid in this there are organisations currently ‘educating’ people on the kind of advisers investors that they would do well to avoid. ‘Daytrippers’ – those advisers and organisations flying in and out of the country – simply have no accountability, and if you are sold a product from a non-accredited adviser, you will have no legal recourse. The absence of regulation mentioned earlier, and lack of compliant process, means that one needs to be both aware and on guard. As such, all of our financial recommendations are made through institutions based in ‘designated status jurisdictions’, namely the Isle of Man, Jersey and Guernsey, locales where you will find all the legislative powers and governance associated with the FSA, but without the tax burden. For example, mandatory on the islands are insurance schemes with premiums paid by the financial advisory institutions to ensure the effectiveness of the islands’ various investor protection schemes. In the case of any institution failing to meet liabilities (insolvency or bankruptcy), up to 90 percent of monies invested are available to the investor – higher than anywhere else in the world. In addition, regardless of where the advice was dispensed, the financial ombudsman is available for recourse in these jurisdictions. Many of TheEDGE’s readers are likely to be aware of the issues involved in offshore investments, but the concerns – that there is no real regulation and the vast majority of independent financial services’ income will be commission-based – need to be considered in light of this. Here are some guidelines to help investors avoid possible pitfalls: • Do have a conversation that gives advisers the chance to introduce themselves and their services.

• Do look for stability. Your adviser should be locally based and always available by phone and for a personal meeting. Ideally, look for one with family ties to the area – do you really want to put your trust in a ‘daytripper’ who can come and go at a whim, deciding to nip off sharply when you really need advice? • Do trust advisers with age and experience. Naturally there are quality young advisers with good technical knowledge, but someone with a proven record is a safer bet. • Do ask for references. A top-notch consultant will have a number of local clients willing to recommend their services, and vouch for their integrity and reliability. • Do ask questions. Find out about your adviser’s background, and discern whether he or she will be paid on a commissiononly basis. Someone whose income is commission-based will likely be under greater financial pressure and may be focused on short-term gain, rather than helping you make the best long-term financial decisions. From my perspective, I am open to my clients’ questions – the sooner trust can be established on both sides, then the closer both parties are to a successful working relationship. • Do not automatically hang up on a cold caller. The call may come at an inconvenient time, but allow the caller to establish this immediately, and offer an alternative. Very rarely, and especially in the summer when the peninsula is near-empty, I have picked up the phone and made new, happy clients through cold calling. • Do not even consider transacting any business over the phone with somebody you cannot meet personally. I have a client who bought non-existent shares over the phone from an operation in Singapore, because “the website, and everything else, all sounded and looked so legitimate and professional”. The general rule of thumb is that if it looks too good to be true, then it probably is. • Do not hand cash or personal cheques over to an adviser. All transactions should always take place via telegraphic


MARKET WATCH

transfer or standing order direct to the recommended provider or institution. • Do not listen to a sales script. We all repeat various parts of our introductions, but if someone is unable to divert from their script, they are highly unlikely to have a firm grasp on the complexities of their business. Do you honestly believe that such a person will serve you well? • Do not pre-judge people. Sometimes you will find a humble, honest adviser, who simply does not present themself well or is very nervous. • Do remember that ultimately it is reliability, accountability and honesty that are far better traits than technical brilliance or a smooth patter. • Finally, do not ignore the issue of strategic financial planning itself. Choosing an adviser is likely to be one of the most important decisions you will make – both for yourself and your family. This is by no means an exhaustive cautionary list, and while I am sure that most of these points seem to be mere commonsense, I am a firm believer in them. Straightforward commonsense has always served me and my clients well. If more people had adopted the level-headed and practical approach advocated above…well, we might just have avoided that little joy we now refer to as the ‘credit crunch’.

TheEDGE

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INSIDE EDGE

In a fragile global economic recovery, the recent debt troubles of a few eurozone economies have shattered investor and consumer confidence and given rise to new uncertainties, the impact of which could be witnessed as soon as the latter half of this year. Dheeraj Shahdadpuri reports


INSIDE EDGE

FISCAL CONSOLIDATION

VS. GROWTH F or now, a timely fiscal and monetary response prevented a far worse outcome for the global economy, which was expected to enter a phase of prolonged downturn. However, since the second quarter of last year, financial markets in most advanced and developing countries rallied through the worst of the crisis. Inter-bank lending rates and emerging market bond spreads have returned to close to normal levels. The real economy has also improved as industrial production expanded at an 11 percent annual rate in the first quarter of 2010, which has also supported the recovery in global trade and the logistics sector. In general, the global economy has shown increased signs of improvement during the last couple of quarters and there is now a pressing need to address high debt and deficit levels, which are mainly an outcome of massive liquidity support provided by various governments. However, there is a general consensus that much of this growth has been induced by extraordinary support provided by governments, the effects of which are expected to fade as we move into 2011. In addition, if we look at very recent developments the world over, the outlook for the global economy has again come under tremendous uncertainty, further pressing the policymakers to keep most of this stimulus support intact. EUROZONE DEBT TROUBLES It is ironic to note that until the end of first quarter of 2010, the global economic recovery was expected to strengthen further on increased private sector spending as consumer confidence returned gradually. But the debt trouble of a few high-income eurozone members – especially

Greece, which was on the verge of defaulting on its sovereign debt – has probably changed the course of this recovery. When the crisis broke, the eurozone authorities, together with International Monetary Fund (IMF) were quick to recognise the need to address the situation by announcing a three-year bailout package for Greece. However, pressure from other member states (Portugal, Spain and Ireland) accentuated the situation as their credit default swap rose to new highs. This induced the European Central Bank to take extra efforts and provide a wider blanket of US$1 trillion (QR364 trillion) to curtail the contagion from spreading. While market conditions have improved as Greece and Spain have successfully returned to capital markets with new debt issuance, the cost of borrowing still remains high, which is an indication of the fragility of the financial markets. This is further evidenced by the fact that most international stock markets are still trading below their recent peaks made during late April, as investors in general are still seen shying away from taking excessive risk. In its recent World Economic Outlook report, although the IMF nevertheless upped its forecast for the global economic growth rate to 4.6 percent as against 4.2 percent in its April forecast, it has clearly outlined that downside risks to recovery have recently increased. The IMF has revised growth rates for many developing nations and also upped the gross domestic product (GDP) estimates for United States (US). All these would add to global economic growth. However, growth rate projections for the eurozone remain unchanged at one percent. If countries like Greece, Portugal and Ireland are not able to apply

austerity measures in full, then they might face negative reaction from the financial markets. And if international financial markets become more concerned about the eurozone, then liquidity will be affected as risk appetite will subside considerably, which will lead to the collapse of asset prices. The IMF has referred to this phenomenon as a probable downside in the near future. Such financial risks have risen, especially in advanced economies on account of further deteriorating fiscal trends, as government expenditure has soared in last two years to put life back into their respective economies. Additionally, the recent bout of bad news from the eurozone has induced financial markets to shift their focus on the fiscal weaknesses of many advanced nations, which are still plagued by fragile bank lending due to lowrisk appetite. The cascading effect of this nervousness can be seen in the higher interest rates that most fragile economies are paying to raise money from the international markets. A SLOW SHIFT TO FINANCIAL HEALTH In the short-term, the outlook of many advanced and emerging nations is under scrutiny, with financial markets closely examining the fiscal cost of the massive amounts of money pumped into their economies. This is especially true for advanced nations, which faced a more severe downturn in their economic activity as compared to most emerging countries. According to estimates by the IMF, the debt of Group of Seven (G-7) nations is expected to touch 113 percent of their collective GDP in 2010, a level not seen since 1950. This is a major concern and most advanced nations are increasingly required TheEDGE

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INSIDE EDGE

to set their public finances on a sustainable path as their governments take unprecedented steps to fight the recession. In contrast to this, the need to unwind stimulus measures among developing countries is generally less demanding, as both fiscal deficits and debt-toGDP ratios are relatively much lower. High public debt limits the scope for counter-cyclical fiscal actions if required. Also, the effectiveness of fiscal policy actions could be dampened by sustainability considerations, which in turn could make market reactions more severe, potentially deepening future cyclical downturns. Furthermore, excessive supply of government bonds puts upward pressure on interest rates and, therefore, discourages private investment. Until the financial crisis hit the global economy, governments were easily able to carry out massive issuance in domestic markets to support high investments, as general risk appetite was low. However, during downturns, government issuance places further pressure on liquidity in the financial system. To add to this, servicing of debt takes considerable expenditure away from programmes, such as research and development, human capital formation and infrastructure development, making fiscal consolidation more difficult. The speed at which consolidation must be carried out depends on the state of the economy. There is a general belief that any roll back of stimulus measures would be led by the world’s biggest economy, the United States (US), which would be a clear signal for many other nations that the global economic growth has gained sufficient momentum. However, concerns are already running high on that country’s fiscal deficit, which is expected to touch a record high of US$1.56 trillion (QR568 trillion) in the current year. Considering this, many people have already called for withdrawing some stimulus support from the economy. But this would compromise the growth of the economy, which has not yet picked up sufficient momentum. This is a key reason behind the Federal Bank’s hint that it is ready to keep its accommodating policies in place for an extended period of time so that the economy can gain further strength. The recent

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Policymakers need to establish the right balance between fiscal consolidation and stimulus support.

austerity measures taken by a few eurozone economies are expected to affect the growth rate of the region in the short-term. This is why the debate between consolidation and growth is running high, keeping policymakers uncertain. NERVOUS MARKETS Markets are expecting that the strong recovery – which was earlier supported by monthly data for the global economy – is expected to lose some steam in the coming months. However, annual growth rates should continue to strengthen, especially among developing countries. The outlook for the global economy nevertheless is under close watch once again, mainly driven by the negative reaction of financial markets to key economic data. Lead among these is the eurozone area, which has to accommodate austerity measures and ensure

that the region continues to grow and contribute to global economic growth at the same time. Although the recent stress test results have highlighted that the reaction to the region’s debt troubles were overblown, markets are, however, not yet totally placated. Lately, investors have been concentrating on expectations of the slowing pace of global economic growth and going forward no matter in which direction markets move. Policymakers need to remain active in figuring out the right balance between fiscal consolidation and the need to continue stimulus support. Until there is clarity on how the fiscal imbalances in most of the developed economies are being dealt with, emerging nations continue to provide a relatively low risk environment, which will help them attract more foreign investments.


COVER STORY

a matter of national security

By Jamie Stewart In late September, the world’s great and good will meet in New York to discuss advances made on the United Nation’s (UN) Millennium Goals. On the agenda is expected to be food security and access to adequate supplies of food and water for the world’s population. Food security, however, is not just an issue for the globe’s poorer, hungrier nations. Countries in the Gulf Cooperation Council (GCC) region are grappling with very real threats to access to food and water supplies, and the solutions they are seeking are not making everyone happy. Rachel Morris reports


COVER STORY

“Qatar, along with its neighbours in the GCC, is facing some stark choices in coming years – seek or create reliable alternative water and food sources, or deal with security issues.“

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t is a date in the not-too-distant future. A man-made disaster has disrupted power supply in a small resource-rich, yet, agriculture-poor country in the GCC. As a result of the disaster, the five desalination plants used to supplement the country’s non-existent fresh water supply have shut down. With less than a week’s supply of fresh water, authorities start rationing bottled supplies, which in turn are running low resulting in a black market for supplies. Protests break out in the streets; supermarkets are looted by frustrated people. The outbreak of civil disobedience disrupts regular flights, many containing cargoes of food, as operators are concerned about escalating violence. Consignments by road from neighbouring nations are being hijacked and crews manning boats delivering live export livestock and other supplies are afraid to unload their cargoes because of the rising tide of violence. The military have been deployed to the streets to calm the crowds, and the government, facing a humanitarian crisis as well as a very real national security problem (both internal and external), appeals to their neighbours and the international community for assistance. But this help has a price… This scenario may appear at first glance to be something from Hollywood’s latest apocalyptic themed thriller, like 2012 meets Children of Men. However, it is a very real possibility in the GCC region, where the natural resources do not extend to plentiful and easily accessible fresh water supplies, or to homegrown crops to feed a nation. Qatar, along with its neighbours in the GCC, including Saudi Arabia and the United Arab Emirates (UAE), is facing some very stark choices in coming years – seek or create reliable alternative sources of water and food supplies, or deal with some very real national security issues. In August, the world watched as Pakistan, beset by the worst flooding the imperiled nation has ever seen, faced its own food security crisis. With more than 20 million affected by the floods and no access to fresh, uncontaminated water and food, the humanitarian crisis there is almost incomprehensible. According to the Food and Agricultural Organization (FAO), some 80 percent of crops have been lost in affected areas, which happen to be the ‘bread basket’ of Pakistan. Extreme weather also threatens crops and water supplies in countries as diverse as Russia and Australia, which is still battling a drought. FAO deputy director-general Jim Butler said in April: “First and foremost, nation states need to assume their responsibilities for meeting the basic needs of their people.” And it is this need to ensure the “basic needs” of their people that has forced Qatar and other GCC nations to take drastic and sometimes controversial steps. In the GCC, the total population of the region has more than quadrupled between 1970 and 2000, rising from less than eight million to more than 30 million. In 2005 the population stood at around 36 million and is expected to reach about 58 million by the year 2030. According to preliminary findings of the 2010 Census, Qatar’s population stands at 1.6 million and is set to reach 2.4 million by 2030. TheEDGE

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Add precious water to the mix, and the situation worsens. According to the Gulf Research Center, by 2025, domestic GCC water demand is expected to double, and the industrial sector will ask for threefold the current water amount. “Desalination will hardly be able to function as a large-scale substitute for conventional water sources in agriculture as it is energy-intensive and costly,” the body said in its 2008 report on Potential for GCC Agro Investments in Africa. In Qatar, the land problem is acute and the water situation more so. A mere 28,000 hectares of Qatar’s one million-hectare landmass are considered arable, and this portion is shrinking rapidly as salinity levels in the groundwater rise and increasing desertification takes hold, according to a recent study by the Qatar Science and Technology Park. This means less than 10 percent of the country’s landmass is arable. As a result the country must depend on imports – in fact more than 90 percent of the country’s food supplies are derived from imports.

“In Qatar, the land problem is acute and the water situation more so. Only 28,000 hectares of its one million hectare landmass are considered arable.“ As for water, despite large power-intensive desalination plants, there is very little fresh water. What there is is subterranean. If a disaster were to affect Qatar’s water supply, it is said the country would run out of fresh water within a week. The FAO also revealed earlier this year that by mid-2009, overall food prices had risen two percent globally since the end of 2008, despite the world economic slowdown, and with those living in GCC countries spending a larger percentage of their incomes on

food than other regions, the effect is very real. Qatar’s issues are replicated across the region where lack of arable land combined with rising population and salinity levels mean governments are under pressure to find solutions both in the short and long term. Saudi Arabia, for example, is moving away from water-intensive wheat cultivation because of concerns over future water supplies – having been self sufficient in wheat until 2007. The solutions are not easy and straddle a slew of socio-political, ethical and environmental issues.

Greenhouse farming is one of the many methods that Qatar is investing in to improve its food stocks.

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One controversial remedy has seen countries like Qatar look overseas to countries like Brazil and Kenya to solve their land shortage issues. These, colloquially known as ‘land grabs’, see rich countries buy farmland or similar resources to produce food stocks for their own countries. This not only ensures supply of food, but also allows countries to bypass international food markets, enabling them to deliver products to their populations at substantially lower prices. “For the Gulf countries under current technology, it’s impossible to guarantee their food security internally because they lack water resources and arable land,” said Mohammed Raouf, programme manager of environmental research with the Gulf Research Center, a UAE-based think tank, who has been studying the issue of food security in the Arab world. He says, for the current circumstances, buying land in other, more fertile countries, is the policy of choice for countries like the UAE, Saudi Arabia and Qatar. The catalyst for the land buying has its genesis in the global hike in food prices of 2008. Rapid economic growth coupled with rising food prices drove inflation, with the consumer price index hitting 16 percent in Qatar in 2007. Spurred into action, governments started looking overseas to ensure cheaper food supplies, notably to poorer, hungrier nations. The implications of this are obvious – rich countries buying vast tracks of land in poor countries only to take the proceeds offshore. Not only does it impact on food prices, with countries and companies bypassing supply chains and international pricing mechanisms, the practice has also been described as a form of ‘neo colonialism’. The FAO estimated last year that nearly 20 million hectares of farmland — an area half the size of all Europe’s arable land — was sold or negotiated for sale or lease in a six month period. While some European countries have been involved in these projects, namely for production of biofuels, it is the GCC countries that are leading the charge in terms of food for consumption and bulking up their future stocks. A Saudi agricultural consortium has announced plans to invest in food production

Qatar is also developing partnerships with nations in Africa, South America and elsewhere to ensure its food security.

in Ethiopia, Sudan and Egypt. Meanwhile Qatar has forged ahead to invest in Kenya, Brazil and unusually Australia. In August, Qatar’s Hassad Foods announced it would invest in sugar production in Brazil. Hassad is also investing in poultry and poultry feed projects in Brazil. The production will take care of at least 60 percent of the demand in the Qatari market as the feed is very cheap in Brazil. The issue is complicated by claims that local farmers have been locked out of their land as governments, looking for cash injections, sell off prime real estate to conglomerates and foreign nations. This is complicating the issue for coun-

ties like Qatar, which is seeking to lease 40,000 hectares of land in the Tana River delta region in the north of Kenya for crop production. However, local farmers claim the land is not deeded to the government and not theirs to lease. To avoid claims of ‘unethical’ grabbing of land at the expense of local communities, Qatar has embarked on a mission to ‘leave behind’ sustainable industry and infrastructure in the selected countries. Qatar has offered to provide loans of up to US$3.5 billion (QR12.7 billion) to the Kenyan government to build a new deepwater port at Lamu, close to where Doha is hoping to lease land.

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“Genetic modification (GM) has become a potential panacea for Middle Eastern countries with cash to spend.”

Furthermore, it seeks to employ locals as well as build roads and other infrastructure. Governments in Kenya, Cambodia and Vietnam have been domestically forced to defend the sale of land to foreign powers, especially in times of internal food shortages. According to the FAO there are 307 million hungry people in Africa, with most of these living in sub-Saharan Africa and 21 African countries are classified as being “in crisis”. Four of these countries – Kenya, Lesotho, Swaziland and Zimbabwe – are described as having an “exceptional shortfall” in food production or supplies. Ethiopia is one of the hungriest countries in the world with more than 13 million people needing food aid, but paradoxically the government is offering at least three million hectares of its most fertile land to rich countries. At an international level, many including

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the UN have expressed concern about the commitments made by richer countries, which may have their eyes more firmly planted on their ‘prize’. That is, whether the promise of local investment, jobs and other big ticket goodies will ever materialise. “A key issue is the extent to which commitments on investment, jobs and infrastructure are legally enforceable in the same way as government commitments to provide and maintain access to land,” the FAO said in a report on land acquisition in 2009. One person to express caution on the issue of land acquisition is Lennart Bage, president of the International Fund for Agricultural Development (IFAD). Bage said that Gulf countries making agricultural investments in Asia and Africa must safeguard the interests of local communities in which they are investing or face massive backlash. “The important thing is to have the right approach because in many countries, speaking generally, there is a need for investment in agriculture,” he said. “If the investments are done in a way that benefits the local population, then it’s a win-win situation.” Aside from overseas acquisitions, many countries facing food insecurity are seeking to use technology to boost their chances of success against an unwilling mother nature. Genetic modification (GM) of crops, cloud seeding, solar technologies and other labour and resource intensive procedures have become a potential panacea for Middle Eastern countries with cash to spend on research, development and implementation. In recent years scientists have seen genetic modification as a way to beat nature. GM is a technology that puts genetic material from completely unrelated organisms into a plant or animal in order to give the recipient organism desirable features such as higher yields, greater pest resistance, or better drought tolerance. While much of the food

we eat today contains some form of GM (for example, disease resistant wheat), notably much of it has focused on improving taste and appearance only. Another interesting twist on the GM debate ironically involves the issue of land grabs. Concern about food security and fuel consumption has driven many countries to buy land in developing countries to grow biofuels such as sugarcane. China and the European Union (EU) are the main contenders here, with the GCC countries lucky to be blessed with plentiful fuel reserves. Green lobbyists Friends of the Earth, in a 2010 report said that: “Growing European and international demand for agrofuels as a transport fuel is creating market demand for agrofuels,” the report states. “While African politicians may promise that agrofuels will bring locally sourced energy supplies to their countries, the reality is that most of the foreign companies are developing agrofuels to sell on the international market. The EU’s mandatory target for increasing agrofuels is a clear driver to the land grabbing in Africa.” Even developed countries like the United Kingdom (UK) and United States (US) are looking to GM crops as a way to address their food supply needs. However, the UK’s recently released food strategy for the next 20 years, Food 2030, also raises some concerns, notably about it being seen as a quick fix: “GM, like nanotechnology, is not a technological panacea for meeting the varied and complex challenges of food security, but could have some potential to help meet future challenges,” the UK report states. “Safety must remain our top priority and the government will continue to be led by science when assessing the safety of GM technologies.” What is clear is that there is no easy fix for countries for what is fast becoming a global food crisis. Climate change, over-farming and


COVER STORY

Qatar has invested heavily into livestock production in Australia and intends to further increase its international land holdings.

desertification continue to create challenges for all nations from the poorest to the richest. Qatar has taken the initiative by establishing the Qatar National Food Security Programme that is looking at issues including partnerships to develop technologies to increase farm production. Their view is a long-term one (see page 17 for a full interview). New desalination plants are under construction as well as allowing, for the first time, foreign investors 100 percent ownership of agricultural projects, intended to stimulate investment. The UAE is planning a system of storage for basic staples such as wheat and rice. Oman, learning the lessons from the devastating 2006 Cyclone Gonu, which crippled the nation, already stores up to four months of consumption needs. Saudi Arabia is providing financial incentives for both local and foreign investors in its agricultural sector. As a result, total private sector investments in agriculture in the kingdom are estimated to have reached

“Desertification, overfarming and climate change continue to create challenges for all nations, poor to rich.“ US$10.4 billion (QR37.8 billion) in 2009. In 2010 Saudi Arabia is allocating US$12.3 billion (QR44.8 billion) to the agriculture and water sectors, a rise of almost 31 percent over the 2009 figure. New water desalination plants are also planned, along with measures to upgrade existing ones. According to UN reports, water and ac-

cess to it, as well as access to food supplies, will be the defining resource issue for the coming millennium. “If not managed properly, it could touch off a cascade of related crises – affecting trade, economic growth, social progress and even political security around the world,” UN secretary-general Ban Ki Moon said.

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RETURNING FROM THE BRINK

The Middle East Business Optimism Outlook is an annual survey prepared exclusively for TheEDGE by Inventure’s Middle East and North Africa team, and regular contributor Karim Nakhle. Nakhle reports that the 2010 survey, incorporating the input of some of the Middle East’s top 100 chief executive officers (CEOs), shows, despite some caution, there is increasing optimism in the economic and business future of the region.

FT

ew, if any, business leaders will forget the past 18 months. The global recession was the most serious many had ever experienced. For a significant proportion of global businesses, there is no doubt that the recent financial crisis has changed their outlook, their operations and their prospects permanently. Some are still coming to terms with the severity of the downturn, while others have consolidated and reduced their cost base so they are now well-prepared for future growth. The economic situation has spread around the world, but as this report shows, responses to the crisis – by geography, sector and business function – have been extremely varied. MIDDLE EASTERN CONFIDENCE The survey gathered the opinions of some of the region’s top 100 CEOs and entrepreneurs to ask them how they view the post-crisis business environment, what changes they are making to adapt their organisations, their readiness to begin investing again, as well as raising hopes for a sustainable recovery across many key markets in the region. This provided direct and important insight into the regional economic climate from some of its most influential players. The consensus is largely that the Middle East is emerging from the shadow of the global financial crisis, with a strong sense of confidence as business leaders set priorities for bolstering their competitiveness on the world stage. As the region begins to recover, satisfaction as to how governments have coped with the difficult

situation has gained momentum since 2009. This was most notably in the United Arab Emirates (UAE), where the indices increased 31 points to 72 percent of UAE executives polled. Indeed, the mood of business people has been improving over the last seven quarters after a low in late 2008, widely seen as the height of the financial crisis. Predictions of revenue, maintenance of profits, budgets and meeting targets, all remain positive and the index across all six Gulf Cooperation Council (GCC) states recently hit its highest point in two years. According to the survey, while the overall business optimism index remained below its zenith of 2007 and early 2008, specific indicators showed a positive outlook in key operational areas. Forecast growth for 2010 revealed that 43 percent of respondents see an increase in business turnover in the Middle East, 40 percent see an increase in profit, and 33 percent are planning to increase investment. Moreover, these companies are actively looking for new opportunities, while continuing to rationalise unnecessary spend and streamlining their operations to maximise revenue potential. Out of the 100 top executives in the region, the survey found that 58 percent of respondents feel the current conditions have improved, and 82 percent are optimistic about the prospects for the next two years. More than half of respondents are optimistic that the next three months will present increasing revenue for their companies, and 35 percent are anticipating revenue growth from international trade opportunities. The UAE index showed one of the highest rises


ECONOMIC BAROMETER

quarter-on-quarter, with business confidence growing 33 points to 78 percent since the last Inventure survey in September 2009. However, yet again, the country lagged behind Saudi Arabia, which remains the most confident with an index of 97 percent, closely followed by Qatar, with an index of 95 percent. Nevertheless, while Middle East executives are upbeat, they are also realistic about obstacles. Concerns about labour issues, for example, are rising. Forty-six percent of respondents believe labour reform is an issue requiring immediate attention. Education reform tops the list of long-term concerns at 33 percent (see chart below). To make the region more competitive, senior executives are generally looking at local markets and to the developing world: 48 percent say that diversification within Middle East economies, especially in the GCC, would be the best opportunity to build competitiveness. Yet more prefer to pursue partnerships with BRIC nations (Brazil, Russia, India, China) or developing economies in Eastern Europe and/or Africa (32 percent) than with developed ones (eight percent). CURRENT AND FUTURE BUSINESS OPTIMISM Many of the most interesting results in the survey were the differences between countries. When senior executives were asked as to their view on current conditions in their country, a majority of those surveyed in the UAE (57 percent) rated current business conditions as in a “decline” (this

in contrast to senior executives in Saudi Arabia, where 71 percent saw conditions as “unchanged” or “flourishing”). But when asked about the future, these same executives in the UAE were much more positive, with only two percent seeing a decline in the next two years, and nearly half (45 percent) rating conditions as flourishing. This confidence in the future by the UAE may suggest that executives believe that immediate challenges are merely temporary setbacks and that their economies are poised for a recovery and eventual growth. Improved business confidence levels and stable oil prices will drive a rebound in growth in the Qatar market as well. According to Credit Suisse, Qatar is expected to achieve the highest gross domestic growth (GDP) growth rate for the second consecutive year in 2010 – estimated at 18.5 percent. Qatar was the fastest growing economy in 2009, with GDP growth reaching an estimated 9.6 percent year-on-year. “This growth will be driven by expansion of liquefied natural gas production and the non-hydrocarbon sectors of the economy,” says Kamran Butt, head of Middle East Equities Research at Credit Suisse, Private Banking. “In line with our positive economic outlook for 2010, supported by stronger energy prices, we believe that fiscal and external accounts will most likely reach surpluses.” The impact of the global financial crisis has been limited in Qatar itself due to timely and supportive macro economic policies, and intervention in the local banking system. Mohamad Hawa, head of MENA (Middle East

and North Africa) Equity Strategy and Financial Research at Credit Suisse, Investment Banking, adds that Abu Dhabi banks look attractive and Qatar is a preferred market due to its high economic growth. Credit Suisse says risk remains within Middle East and Africa in the form of inflation, with the region likely to see upward pressure on inflation, which is currently subdued. LEADERSHIP MEETING CHALLENGES Interestingly, when we probed respondents on which country was best meeting the most urgent challenges to the region (economic, political, and social), the UAE emerged as a clear leader. When asked which of the Middle East governments is setting a standard for business friendliness, educational reform, and legal reform, the UAE again emerged as a consistent leader, with no other country emerging as a clear second: 68 percent of those surveyed view the UAE as setting a standard for business friendliness, 36 percent see it as setting a standard for legal reform, and 32 percent view it as setting a standard for education reform. Bahrain runs a distant second for business friendliness (12 percent) and legal reform (17 percent), and Qatar receives second place responses (15 percent) for education reform. EMPLOYMENT OUTLOOK Employers are significantly more positive about hiring and about the business environment as compared to this time last year. Fifty-four percent of respondents state that they expect their organisation to undertake some hiring this year, up from 37 percent in 2009. While 35 percent indicate they would “possibly” engage in recruitment in 2010. Only 11 percent of

Survey question: Which issues require immediate attention; which pose the greatest threat to the region’s competitiveness, and which, if left unaddressed, have a negative impact on decision making vis-a-vis investment? 46% 36%

Requires immediate attention Poses greatest long-term threat

33%

Has negative impact on decision making

25%

13% 13%

11% 7%

Labour reform

Education reform

Note: Sample size of 100 for the region

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7%

Transparency

6% 5% 4% Bureaucracy

7% 7%

6%

Company ownership laws

2% 2%

4%

Environmental protection


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respondents rule out any hiring in the next 12 months: a significant reduction from 27 percent last year. The gradual return of employer confidence is also indicated by the 52 percent of respondents who anticipate an increase in their local staffing levels in the year ahead, up from 36 percent in early 2009. Only six percent of surveyed companies predict a reduction in their staffing levels, down from nine percent last year. Despite the more positive sentiment among employers, they expect the market to remain heavily client-driven and are even more confident than last year regarding the balance of power in the labour market. Only 23 percent of those surveyed expect skills shortages in 2010, down from 32 percent last year; while twothirds expect the balance to shift even further in favour of employers. As a result, 76 percent of respondents expect no significant change in general salary levels over the coming year, with just 21 percent anticipating any increases. It will be very interesting to see how employers’ perceptions change over the course of 2010; the general expectation seems to be that the market will remain highly client-driven and may even move further in that direction. However, there are early signs of candidate shortages in some key areas and the return to growth could result in acute skills shortages more rapidly than anticipated. Of those candidates who were made redundant in 2009, a significant number have either already found alternative employment within the region, or have made the decision to relocate, therefore, reducing the pool of locally available talent.

communications that followed the company’s announcement that it was seeking a standstill agreement on its debt repayments. Revealing the views of those most immediately engaged in the daily management of business affairs in the region provides an interesting and valuable counterpoint to the attempts to parse high-level communiqués, or predict the future of financial markets. These on the ground perspectives are valuable not only for managers in the region – as they develop and implement their strategic, organisational, and operational plans – but also for every executive around the world whose business has an interest in the region, or is considering doing business here. OVERCOMING CHALLENGES Markets are expected to see major swings in growth, as both the volume and depth of change is expected to increase. When a crisis hits, there is a natural and practical tendency toward tunnel vision, focusing only on the problem at hand. But management needs to take a look around and ensure that the company is still headed in the right direction, and if not, make the necessary adjustments. There are, however, certain reactions to the crisis that most companies share: • The normal changes that businesses make in the course of their commercial life have

accelerated. As a result, companies will have to act more quickly, and make efforts to identify trends and anticipate future changes; • Companies have to be more flexible in their approach to change, which means being quicker to implement and incorporate the changes that they identify as necessary; • To achieve such speed and flexibility, companies must concentrate on building a solid foundation – the most advantageous IT systems, a responsive and dynamic human resources function, and a robust and consistent finance function – to create a flexible and efficient value chain: they also need to put in place more qualitative key performance indicators; • Importantly, they must support all of this with strong and decisive management. A POSITIVE OUTLOOK More than 80 percent of Middle East-based CEOs who responded to the survey, said they are confident about their prospects in the coming 12 months (82 percent), and 79 percent are expecting a recovery in their national economies in the next two years. More than a third of Middle East respondents, 39 percent, went on to say they believe their national economy has either already rebounded or will rebound by the third quarter of 2010. Such confidence and optimism can only be a good thing.

IMMEDIATE THREATS The collective responses across the region are not surprising. Respondents indicate labour reform as strategic for the short-term and reform in the education system as strategic for the long-term. Within the UAE, however, transparency – not education or labour – was seen as the top issue requiring immediate attention (36 percent), well above labour reform (21 percent), company ownership laws (17 percent), education reform (11 percent), and reducing bureaucracy (11 percent). The recent crisis surrounding Dubai World has pushed transparency. Critics have raised questions about the inability of investors to accurately assess Dubai World’s debt and risk levels, the closed nature of governmental decision making around the crisis, and the often confusing and incomplete TheEDGE

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ON THE PULSE

The battle for the skies

This summer Dubai opened what will become the world’s largest airport. The aviation sector is a potential goldmine for Middle East economies and as the race picks up for a slice of the wealth, Edward Jameson discovers that this is no regional flight of fancy.


ON THE PULSE

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n June 1, Dubai’s ruler Sheikh Mohammed bin Rashid Al Maktoum inaugurated the state’s shiny new airport. The raising of the initial phase of infrastructure from the desert sand throughout a time when Dubai’s debt had become something of a global front-page story was no mean feat. Al Maktoum International Airport is planned to be the world’s biggest. The first runway opened, as planned, at the beginning of July for cargo operations. The remaining four runways of this colossal fiverunway development will follow in due course. Somewhat fortuitous timing has complemented the opening of the airport. The global recession is, at least on paper and for the time being, at an end, and tourist numbers are beginning to recover accordingly. International tourist arrivals were estimated to have declined globally by four percent in 2009, falling to 880 million, according to the United Nations World Tourism Organisation (UNWTO). On a more bullish note, however, the UNWTO forecasts growth in international tourist arrivals of between three and four percent in 2010. Al Maktoum International Airport may only be open to cargo operations at present, but by the time it begins to usher passenger traffic through its air-conditioned hubs to the desert city beyond, tourist arrivals look set to recover further still. The opening of the airport, as is the case with so many of the Middle East region’s industrial and commercial sectors, will pave the way – quite literally – for the onset of potentially stiff competition between cities and nations. Within the tourism industry, the economies of the region have laid out their stalls, and set in stone plans to target differing customer bases, sometimes in direct competition with one another. The battle for the ground has long been underway; the battle for the skies, however, is only just beginning. Doha arriving Just four kilometres from the hustle and bustle of Doha International Airport is a sprawling construction site, covering an area equivalent to approximately two-thirds of Doha city itself, or 12 times the size of the existing airport. The New Doha International Airport (NDIA) will occupy the site. According to industry bible, Airport Technology: “The current airport handles 4.2 million passengers a year, whereas the new airport will be able to handle 12.5 million a year after the first phase of construction in 2010.” That is some leap in passenger numbers, but the long view leaves even this figure in the shade. Phase 2 of the development is set to open in 2011, giving the airport a passenger capacity of 24 million passengers a year and allowing the transportation of 750,000 tonnes of cargo. Additionally, upon its completion, which is scheduled for 2015, the airport is expected to handle 50 million passengers a year, two million tonnes of cargo, with a massive 320,000 aircraft arrivals and departures each year. Due to its extreme size, NDIA is unlikely to serve the Qatari capital alone – the city is expected to grow by a third over the next two decades, according to research firm Euromonitor. Its airport, as has been stated, is to grow by 12 times. If it is to utilise its full capacity, NDIA will have to serve the region well outside the confines of the Qatari peninsula, in effect acting as a regional transport and logistical hub, and as a stopover for those

making the 24-hour journey from East to West or vice versa, placing it in direct competition with none other than Al Maktoum International Airport. Resurgence One respite for those that have a stake in the impending competition is the indisputable fact that passenger numbers are on the up, and the present situation is looking considerably brighter for the industry than it has done over the past 18 to 24 months. Last month, Abu Dhabi Airports Company (ADAC) released its traffic figures for the first half of 2010, which showed a strong increase of 11.7 percent in passenger traffic through Abu Dhabi International Airport as compared with the same period last year. Meanwhile cargo loads increased more substantially by 20.3 percent. “Our airport is currently growing twice as fast as the average total world passenger traffic,” says ADAC chief executive officer James Bennett. The gain bolstered the state’s overall increase in passenger traffic, which stood slightly higher at 11.9 percent, according to the United Arab Emirates’ General Civil Aviation Authority. And the resurgence in passenger numbers is by no means exclusive to the region’s betterknown destinations or stopovers. Passenger traffic through Muscat International Airport grew by 29 percent to surpass 2.7 million during the first half of this year, compared to the corresponding period in 2009, Oman Airports Management Company says. The growth was attributed by the company to “the increase in economic activity and the steady growth of tourism, as well as the launch of operations by new airlines such as Flydubai, Kenya Airways and a rise in the number of flights operated by Oman Air”.

With business taking off, Middle Eastern cities are lining up to capture more of the aviation sector.

Walsh’s words British Airways chief executive Willie Walsh, recently under fire over an ongoing cabin crew strike action, is appearing before a packed room populated by members of the United Kingdom’s Aviation Club in central London. He is questioned on the impending coming-of-age of the industry in the Middle East region. TheEDGE

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ON THE PULSE

British Airways chief executive Willie Walsh: “The ambition [in the Middle East] is very large by any scale”.

“The challenge in the Middle East is whether it can sustain three large global carriers. I struggle to see how you can create three global hubs [Doha, Dubai and Abu Dhabi] so close to each other. It has never been done before,” he says. “That is not to say it can’t be done, but the ambition there is very large by any scale. I think the next five years will tell a lot.” Walsh goes on to spell out the scale of the task – not in competing with one another, but in how the rest of the world will compete with the Middle East: “We are not sitting back waiting for something to break. We are taking action today to make sure we are in a position to compete effectively on a global scale with those carriers,” he says. “We’ve got to make sure we treat these ambitious carriers with respect and do whatever is necessary to make sure we compete with them.” Therefore, the battle for the skies is not only going to be fought by the Middle East states, although the regional tussle will be a tough one. Beyond the blue, sunburnt skies of the Middle East, a larger battle will be taking place, between Europe, the Americas, the Middle East and Asia, for passengers and freight the length of the globe. Many fronts As the battle for the skies gears up to take advantage of the resurgence in passenger numbers and cargo loads, the full extent of the boost that the sector is capable of providing to the economies of the region becomes ever clearer. Doha, Dubai, Abu Dhabi and the many ambitious cities of the region are not merely hoping to cash in and build a profitable and prosperous aviation sector – they are hoping the sector will itself go a long way to boosting their own state economies. Regional cities do not want to build a nice chunk of infrastructure that can be left alone to rake in a handsome turnover. They want to build a new economy, to transform themselves behind the sphere of energy and natural resources, and embrace a more sustainable future. This battle is a war that will be fought on many fronts.

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According to the UNWTO, in 2009, international tourism generated QR3.1 trillion in export earnings. That is equal to QR2.3 million for every man, woman and child in Qatar. To the victor in this battle for the skies goes the possibility of unimaginable spoils. To debt-laden Dubai, the opportunity is one that the once-mighty Middle Eastern tiger economy is eager to sink its teeth into. The Emirate is hedging its bets, as economists the world over have long been advising it to do, backing aviation and logistics as the road to economic recovery coupled with the continued bankrolling of its tourism sector. And although still vital to the city, real estate, so exposed for so long to the vagaries of the global economy, can finally be afforded less prominence. The sense of occasion, and the vitality of the sector to the lifeblood of Dubai, was not lost on Dubai Airports chairman Sheikh Ahmed bin Saeed Al Maktoum. “Phase 1 is the first step in a long infrastructure development project that over time will see our new airport transformed into the world’s largest global gateway and a multi-modal logistics hub that plays an increasingly integral role in the ongoing economic and social development of Dubai,” Al Maktoum said at the official opening of the airport. This is shaping up to be a battle not just for the skies, but also for a large slice of the region’s potential future prosperity. Commercial and industrial port facilities constitute a sustainable, long-term economic sector, which, although exposed to lulls in global trade, has the potential to provide a

Officials and journalists arrive at the July 1 opening of Al Maktoum International Airport in Dubai.

stable income through good times and bad – particularly in a part of the world that forms the geographical confluence between East and West. Be it Doha, Dubai, Abu Dhabi; Muscat, Manama or Riyadh – or even the Middle East versus Europe versus Asia – fasten your safety belts. Let the battle for the skies commence.


GREEN BUSINESS

PROFITING FROM RECYCLING Though the concept of recycling has yet to catch on in Qatar, the economic advantages will surely lead the country to take advantage of this dormant but potentially lucrative industry in the near future. Sam Pickering reports


GREEN BUSINESS

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educe. Reuse. Recycle’. Many will have heard the catchy strap line for dealing with waste, otherwise known as the ‘3Rs’. It is usually quoted in a bid to encourage us all to reduce the amount of waste we create, that anything we use we should try and reuse somehow, and finally recycle if this is not possible. The imperative of following the 3Rs for the benefit of climate change are numerous and have been explored previously in this column in TheEDGE. Likewise, in the past TheEDGE has tackled questions of how best to reduce and reuse materials, but it is the recycling element that really needs to be addressed in Qatar specifically. However, as catchy as the 3Rs strap line is, Qatar is simply not embracing the concept yet and landfill waste in Qatar has reached epic proportions, with approximately 2500 tonnes of domestic waste produced per day, 2500 tonnes of commercial and industrial waste and over 20,000 tonnes per day of construction and demolition waste. Ignoring the 3Rs is not sustainable, partly because landfill space will fill up and partly because the economic sense to recycle will inevitably be taken advantage of by someone with entrepreneurial prowess. For many countries, recycling is a necessity due to a dearth of landfill space and also because the open market value allows significant profits to be made from initiative recycling. Take the United Kingdom (UK) for example, where the lack of space is particularly prevalent as increased waste due to population growth has meant that landfill sites are nearing capacity. This, coupled with public outcry against additional landfill sites being created and/or utilised, means that a proportion of waste simply has to be recycled. Looking at the daily rates of waste in Qatar, the excessive tonnage being produced and sent to landfills simply cannot continue. For one the space required for such disposal is not infinite and is quickly running out (the country has three landfill sites – Umm Al Afai landfill, Al Shamal landfill and Mesaieed Industrial City landfill). Another reason that the current status quo cannot continue is that waste, which can be recycled has an economic value. There are several ways to make a profit from someone else’s waste and tapping into this will only be a matter of time. Indeed, the recycling industry is well established globally, with huge plants processing recycled materials throughout the world, especially in Brazil, India and China, where much of the world’s waste is sent for recycling. Given the size of Qatar and the rapid development taking place here, there is certainly room for recycling businesses to take advantage of the latent potential inherent in these excessive levels of waste. Worldwide, many find the idea of throwing a glass bottle in a normal bin reprehensible and it is now commonplace to recycle waste most associated with businesses and domestic buildings. In most Western societies, the mindset to recycle is an everyday phenomenon, one of which has in fact only developed very recently. It is just as likely this speedy adoption of the 3Rs will take hold just as easily in Qatar. Incentives are the key to success to ensure that companies, municipalities and individuals choose to recycle. The simplest mechanism is a landfill tax. This is a common piece of legislation. Within the UK the figure for landfill tax is US$75 (QR272) per tonne; within the United States (US) it varies between sites, but on average is US$20

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The GCC creates 120 million tonnes of waste and virtually none is recycled. Qatar is one of the worst culprits. (QR72) per tonne. This theme permeates throughout the world. If it costs to dispose in landfill, alternatives immediately become more attractive and the demand for recycling facilities increases. It is not just the cost of the alternative that will encourage a recycling industry in Qatar but the fact that it is worth billions per annum. Qatar provides a perfect market for companies looking for recycling opportunities: Huge amounts of waste; cheap energy; low labour and transport costs; good infrastructure and plenty of space for plants. In fact, Qatar may well have a comparative advantage in the recycling trade. The momentum has taken hold in the Gulf and already Dubai is implementing a strategy to recycle much of what is otherwise wasted. However, there are still huge opportunities for companies offering such services. It is well known that Gulf countries creates some 120 millions tonnes of waste, of which virtually none is recycled. Qatar is per capita one of the worst culprits. Given the current drive within Qatar to develop a sustainable economy, recycling must play a pivotal role and as a by-product will aid in the development of the manufacturing sector. The sustainable appetite within Qatar provides the opportunity to deliver truly efficient recycling through the utilisation of renewable energy sources to power such plants. Anaerobic digestion and concentrated solar power can produce the type of electricity to make such facilities self-sufficient. The recycling sector within Qatar is an untapped element of the economy calling out to be developed. Reduce, reuse and recycle makes economic sense; helps in the bid to slow climate change and could yet put Qatar on the world map as a trade leader.

RECYCLING BY NUMBERS Understanding the advantages and value to be had by recycling is essential if one is to grasp what an opportunity we bear witness to. The subsequent energy produced at recycling plants from simple consumables indicates just how easy it is to make money from others’ waste. This and other numerical facts tell the whole story: • One recycled tin can would save enough energy to power a television for three hours. • One recycled glass bottle would save enough energy to power a computer for 25 minutes. • One recycled plastic bottle would save enough energy to power a 60-watt light bulb for three hours. • 70 percent less energy is required to recycle paper compared with making it from raw materials. • An average family uses an average of 500 glass bottles and jars annually. • The largest glass furnace produces more than one million glass bottles and jars per day. • Glass is 100 percent recyclable and can be used again and again. • Glass that is thrown away and ends up in landfills will never decompose. • Plastic can take up to 500 years to decompose. • It takes 24 trees to make one tonne of newspaper. • QR205million worth of aluminium is thrown away each year.

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CONTENT IS KING

Amra Tareen, Founder and CEO of Allvoices.com

Launched two years ago, Allvoices.com has grown to become the largest user-generated news website in the world, with more than 400,000 contributors and in excess of 6.5 million unique visitors per month. Miles Masterson interviewed the founder of Allvoices, Amra Tareen, to find out about this successful Internet start up.

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llvoices was founded in April 2007 by Tareen, who now lives in the United States (US), but grew up in Pakistan and completed her Bachelors of Electrical Engineering and Computer Science in Australia, before moving to the US where she completed a Masters of Business Administration at Harvard. Allvoices.com, based in San Francisco, California, was launched in July 2008. Since then the website has become one of the most successful independent start ups on the Internet, providing a viable alternative to the online juggernauts run by traditional global news media corporations. The website was in part inspired by the September 2001 World Trade Center attacks in New York.

“I founded Allvoices in response to the way I had seen Westerners become suspicious of all Muslims directly after 9/11,” says Tareen. “My feelings were there had to be a better way to get everyone talking together, or least provide a platform where anyone, anywhere could share their story so that others might learn something and get a better understanding of how the rest of the world sees events.” The concept of Allvoices continued to form Tareen’s mind while she worked in various communication, investment and marketing roles in the US. Then in Pakistan in 2005, while volunteering with earthquake relief workers, Tareen observed how “people had their stories to share, they had access to cell phones and to me it was giving people cause to write their own stories and giving them a voice”.


ENTREPRENEUR

“It was very important that we heard from people on the ground about what was going on...” On a personal level, Tareen was also motivated by her own need to relate what she had seen and experienced of this natural disaster, but felt frustrated that there was no easy outlet for her to do so. “I had pictures of the destruction and amazing stories of heroism and compassion, but how do I get this message out? Do I send an email to CNN? Do I write a blog that nobody will ever find?” Following extensive planning and campaigning for investment, Tareen and a group of like-minded Silicon Valley partners secured venture capital and founded, developed and launched Allvoices.com, which has grown organically into one of the most influential user generated online media outlets, rivalling powerhouses such as CNN’s iReport. “It was very important that we heard from people on the ground about what was going on where they were...that started a dialogue and conversation across seas between different people in different places and got them really trying to understand each other. Instead of having [news] dictated by the reporter or the editor, let the individual write it down directly and have some mechanism of vetting what they are writing, so that is what Allvoices is,” Tareen furthers. Though she rarely writes for the website herself, preferring to remain behind the scenes and allow the website’s contributors to influence content, Tareen felt compelled to weigh in recently on the furore surrounding the building of an Islamic cultural centre near the Ground Zero site in New York. When she does feel compelled to contribute, it is usually on an issue she feels strongly about, but emphasises this is always from her perspective as a citizen of the world, in this case as a Muslim living in the US.

“The whole Ground Zero thing, I cannot understand what is going on…as a Muslim woman in the US and a person who cares, you cannot blame 1.5 billion people for things that were done by a fraction of the Muslim community,” she explains. “I think that was the whole idea behind Allvoices too, you really want to give voices to the people, because you can’t judge by stereotypes and that is the whole point.” On why she feels issues such as ‘Islamophobia’ and other forms of bigotry in the US and the rest of the world seem to be on the increase, Tareen holds the current troubled financial situation in most countries responsible. “My fear is that when people are in economic trouble it is the blame game and [that’s when] the hatred comes out.” Tareen quickly adds, though, that she is of the opinion this is why the financial security provided by egalitarian business models such as Allvoices, which seeks to reimburse most, if not all, of its contributors, can go a long way to negating these sentiments. Nevertheless, though altruistic concepts are what form the basis of Allvoices’ reason for existence, the website is founded on solid business principles. In fact, if the business was not structured as such, it would not exist, says Tareen, who describe how she managed to secure funding from billion-dollar US venture capital company, Venture Point Venture Partners, (who have a stake in the company, but do not appear on the website). “You come up with a business plan, which I did, and then you come up with a team – you don’t hire them fully but they are people who are involved in developing the business plan with you – and then you go out and raise money here in Silicon Valley, and then once you get funding you start a company and you start the product.” As per most media, Allvoices’ revenue is advertising-based, but adds Tareen, it is gearing ultimately towards what she calls “advertising syndication” to more mainstream media as their business grows. “The more people contribute, the more we get page views, the more ads we can serve, and the more money we can make from advertising. Then we want to use some of that revenue to make sure it goes back to the users who actually write the content on Allvoices.” Described by media pundits as a highly original method of blending traditional and so-called ‘citizen journalism’, these “users” Tareen reveals, are a combination of non-professional and professional journalists, many of the latter among those discharged from mainstream media employment in the recession. Contributors are ranked according to the accuracy of their reports, and the users themselves perform a large portion of the peer review vetting process Tareen describes, which can lead to their accounts being deleted due to inaccuracy, racism or hate speech, etcetera. Indeed, though she admits that the website – which permits users to register under pseudonyms – is vulnerable to abuse from those with subversive agendas or spreading misinformation, unlike websites such as WikiLeaks for example, which merely puts the information in the TheEDGE

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“I believe that the mainstream media in the United States is really in trouble and someone with a low cost model needs to emerge.” 54

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public domain and is in many ways distanced from responsibility for the repercussions, the safety of their reporters and those mentioned in their reports is paramount. Allvoices, she says, is also the only website of its kind to implement a “report credibility meter, so that visitors to the site can gauge a report’s veracity and credibility of the contributor as well. This is in part what makes our technology so special”. Moreover, the innovative IT which drives Allvoices has been designed to “algorithmically rate, rank and validate” news content. Aside from user generated content, the website features integrated multimedia links to other mainstream news and video feeds, really simple syndication (RSS) feeds, blogs and related comments on social media websites such as Twitter and Facebook. Additionally, Allvoices breaks down news into subject, country and even city, which assists visitors in finding stories important to them. Part of this includes linked “landing pages”, such as www.allvoices/ qatar, which collates all news relating to the country. “The whole concept was that we wanted you to go to one place and see different perspectives,” furthers Tareen. “ If something is happening in Qatar, what are the Qatar newspapers saying, what are the bloggers saying, what are the global newspapers saying, what are citizens saying? We wanted to have multiple perspectives…in fact, that is one of our most attractive attributes, this ability to take news from anywhere in the world and make it accessible to everyone in that immediate location, their city, country, region or even around the globe.


ENTREPRENEUR

“What no one else has been able to do well is do hyper-local on a global scale and make it work like we have.” The incorporation of search engine optimisation (SEO) by the website also forms a large part of the power of the Allvoices. Through SEO, web users searching on Google for example, will find its contributors’ (many of whom do not know how to write content that can be searched for easily online) stories far more effectively. Along with increased links from other web pages back to Allvoices, this in turn improves the website’s overall online rankings and therefore delivers more traffic for their advertising partners. While Allvoices rarely feels direct pressure from big spending anchor clients like many other media, it has found that some advertisers do not want to be associated with some kinds of sensitive content, a potential pitfall which has lead them to develop unique IT systems to manage it. “There will be certain categories that we will probably never make any money on,” says Tareen, “but there will others that we will make a lot of money off, so it has to be an automated, low cost many user generated content site for the model to work.” Initially Allvoices also found a lot of scepticism regarding whether the website had any financial merit, as many traditional outlets themselves have yet to crack the challenge of making online media profitable, particularly news driven entities. “Some people tell you that you will not be able to monetise news,” explains Tareen, who feels the staff-heavy business model driving traditional news media and gigantic news media brands themselves are rapidly becoming irrelevant. “I still hear it all the time and you know what, it keeps me going, because I really do believe in it. I do believe that the mainstream media in the US is really in trouble and someone with a low cost model needs to emerge...something that promotes people who actually write instead of trying to create themselves as a big entity and I think it is going to be a big business in the future.” Associated with this is a perceived threat to their vocation by long-term journalists and editors by the kind of ‘citizen journalism’ found on websites such as Allvoices. They cite ‘amateur’ foibles such as a lack of fact checking and poor writing in their arguments. These, of course, do appear on the site, but are largely discredited through its internal ratings structures. “I do not think a site like Allvoices means that professional journalism is going to go away,” reasons Tareen, adding that the whole industry is by necessity becoming more interlinked and interdependent. This also extends to the concept of the ‘scoop’, where one media outlet beats the competition by breaking a story first. The business of traditional media is largely built on this idea, says Tareen, but despite its growth, Allvoices, she admits, has not really become known for breaking massive stories, though photos of the Mumbai bombings for example, appeared on the website before some of the larger news sites. However, this goes some way to back up Tareen’s perspective as she offers evidence of a fading media business model that is no longer relevant in the Internet age. “News gets broken somewhere and then it spreads to little snippets on Twitter and the real place that broke it does not get anything. It is more about how you promote [user] content and how their voices get heard, to deliver that. How you build context

“You cannot police the Internet...we all need to know the truth...that is the only way we are going to change...” and how you influence other people is more important than breaking news…everything around it is what matters. “Our model is a little different, it is a low cost model and to survive we do not really need those ‘big hits’...for a site like Allvoices, yes there will be the big hits, but there will also be the long tails. If you pull all the long tails together, then to survive you do not really need a lot of big hits.” While it might seem at first glance that Allvoices.com has a liberal slant, Tareen says you will find the full gamut of opinions and reports on the website, and debates between differing viewpoints can often become heated. Understandably, Tareen is a proponent of the freedom of speech. Though traditional press liberty seems to be declining throughout the world and journalists are under threat, especially in Asia, Africa, the Middle East, South America and even the US, Tareen feels that as long as social media outlets and websites such as Allvoices.com – which she hopes will one day have millions of users – thrive, the true story will always emerge. “You cannot police the Internet,” Tareen says. “Where there is a will there is a way. Technology keeps changing and people will find a way, that is why I always bet on [them]…We all need to know the truth and that is the only way we are going to change or how we are going to evolve, [with] the real information to make real decisions, because if we do not, life will not improve for anyone. “I do really believe in the freedom of media and that is why I started Allvoices.” TheEDGE

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SPECIAL FEATURE

THE

GENIUSOF

AUTISM Part Two


SPECIAL FEATURE

In the second installment of TheEDGE’s special feature, Joseph Glenn Jessome takes a closer look at how capitalism, greed and big business have thwarted autistic geniuses in their efforts to improve humanity, and how people with autism may, nevertheless, ultimately come to mankind’s rescue.

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ast month, we discussed the impact that people with autism – with their natural inclination towards honesty and profoundly altruistic tendencies – could have on the world and businesses of the future. In this, the final of our two-part series, we investigate how neurotypical greed has hindered geniuses like Nikola Tesla in their aims to better society. A closer look at Tesla Tesla, an autistic savant, stated that his main purpose in life was to uplift the condition of humanity. Said to have been scientifically brilliant, he had little sense of humour and appeared socially inept to those who knew him. So focused was he on science and his goals, that he may not have taken the time to educate himself in social matters and corrupt business practices – or perhaps his autistic condition prevented him from being able to deal with those who had ulterior motives. Many of Tesla’s idiosyncrasies were in line with typically high functioning autistics, right down to his love of solitude and preference to be surrounded by animals. He

never married or dated and chose to remain celibate throughout his life. Tesla was seemingly obsessed with the number three, a trait, which many autistic children seem to share. He would not stay in a hotel unless the room number was divisible by three, he requested that napkins be folded three times, and he often felt the need to walk around the block three times before entering a building. Tesla gave accounts of how his processes had to be divisible by three or he felt compelled to redo them. Because of this repetitive behaviour, in hindsight, many suspected that Tesla had obsessive compulsive disorder (OCD), a condition that rarely occurs in autistic individuals. In fact, the overlapping of similar symptoms often leads to a misdiagnosis of OCD, when the condition is actually autism. In Tesla’s case, his repetition almost always had a purpose, which differentiates him from those who have OCD. Ultimately, it would be difficult to argue with the success of his adhering to his ‘rituals’. Deemed odd by many, the effectiveness of Tesla’s idiosyncrasies may be up for debate, but his scientific success is not. Tesla’s many works irrefutably prove TheEDGE

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“Tesla desired free electricity for all, a possibility that was greatly at odds with the capitalist ambitions of the business elite…” that he was a genius. To describe how his incredible mind worked, Tesla is quoted as saying, “When the word was spoken to me, the image of the object would appear vividly. And sometimes I was unable to distinguish whether what I saw was tangible or not.” Tesla said that he could not control the flashes of light, which would often have him zone out from his physical environment, and he would picture entire inventions complete with dimensions. His visual memory was so evolved that often he built complex apparatus from mere memory. Coincidentally Tesla died at the age of 86 in 1943, one year before the term ‘autism’ was coined. He died of heart failure – on the 33rd floor of The New Yorker, in hotel room number 3327. A rivalry with Thomas Edison Even though he was someone who made a remarkable contribution to the world, Tesla died penniless and surrounded only by his papers, drawings, and proposed inventions. He – perhaps as a result of his autistic condition – did not possess the necessary emotional and social intelligence to predict the immoral and unethical behaviour of the people he dealt with. Evidence of Tesla’s naiveté occurred when he entered into a verbal agreement with his employer at the time, American inventor, Thomas Edison. Tesla was promised US$50,000 (QR182,000) for completing the task of improving the design of Edison’s generators, an agreement that Edison reneged on. Shortly thereafter, their

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employer/employee relationship broke down when Tesla felt unappreciated for his efforts. The stated cause of Tesla’s departure was Edison’s refusal to increase his pay by US$7 (QR25) per week. Most likely though, the root cause of the end of their working relationship was the unfulfilled promise of Tesla’s just reward for completing the formidable task of improving Edison’s technology. Tesla went on to promote alternating current and bested Edison, who wanted to power the world with direct current. Tesla enjoyed greater scientific success and rose to unexpected heights, dwarfing his humble beginnings and much of the work of Edison. Interestingly, almost everyone is taught about Thomas Edison at school, with only those who choose to study physics exposed to Nikola Tesla. Very few have been taught how Tesla won the ‘war of the currents’ over Edison, a businessman focused on financial wealth who wanted many of his products to wear out quickly, so that more could be sold. Perhaps Tesla’s relative obscurity in comparison to that of Edison can be explained by what occurred next in his career, a death knell sounded by JP Morgan and other international bankers. JP Morgan flexes HIS muscles The fatal blow to Tesla’s career occurred when JP Morgan himself cancelled the project, Wardenclyff Tower, a deal that would have seen Tesla beat Italian inventor, Guglielmo Marconi with the first transAtlantic radio wave transmission.


SPECIAL FEATURE

At that time, it was well known that Tesla desired free electricity for all, a possibility that was greatly at odds with the capitalist ambitions of the business elite and bankers such as JP Morgan. When ‘the establishment’ was unable to control Tesla’s desire to uplift humanity, they chose instead to destroy him. According to some historians, JP Morgan had Tesla blacklisted, perpetrating a character assassination by pointing to his autistic idiosyncrasies as proof of insanity. Tesla’s autism made him an easy victim in the court of public opinion, and he was soon discarded by American society as a ‘mad scientist’, when belief took root that he had permanently crossed the line from genius to insanity. Tesla accomplishments should have made him one of the wealthiest men in the world, but as wealth accumulation was neither his

purpose nor his focus, he lacked the financial means to fight against the allegations or further his scientific works. After being blacklisted by all possible financiers, he would eventually suffer a nervous breakdown, spawned from not possessing the financial resources to bring his incredible ideas to fruition. What happened to Tesla’s career mid-life was no accident, or a case of brilliance gone mad. It was instead a classic example of big business flexing its size, political power and financial influence to silence intellect that would have changed the world as we know it. Did Tesla’s autistic condition, which led to his brilliant inventions, also lead to his eventual downfall? Or was his ruin inevitable, considering that his desire to improve the lives of people was in stark contrast to ‘the establishment’s’ capitalist ambitions?

In keeping with his obvious genius and clarity of mind, Tesla said that the present belonged to the corrupt business establishment, but that the future – for which he really worked – was his. Autism: bringing honesty to the mainstream Many individuals working on autism research and development projects are convinced that autism is genetic and evolutionary. Their efforts to help orientate severely autistic individuals, high functioning autistics and all children in general, will eventually have a profound effect on the level of honesty combined with intellect that exists in the world. Certainly humanity would benefit far more from having more people who think like Tesla – honest and brilliant people who can TheEDGE

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“Perhaps it is not that far-fetched to imagine that neurotypical people are increasingly becoming a scourge on the planet.” help build a Utopian-like society where electricity is free, and naturally produced without harmful environmental effects – and by having fewer people and institutions that think and conduct themselves like Thomas Edison and JP Morgan. Tesla envisioned a world where people care more about each other and personal freedoms, than profits. With the increasing number of autistic births and the indicated improvements with early intervention, this appears to be the direction in which society is heading. Ronald Davis, an autistic man who became a millionaire at 36 and authored the book, The Gift of Dyslexia, is quoted as saying that he despised Harvard so much, he hoped that it burned to the ground, its ashes bulldozed, then loaded onto a barge and dispersed at sea where no one could find them. When queried about his strong negative emotions, he replied, “The question that nobody dares to ask about the Enron scandal that temporarily rocked the United States economy is this: ‘Where did the people who did what they did, learn to do what they did?’ The answer is Harvard Business School, Law School, and places like them.” As discussed in the first installment of our series, people with autism are predominantly governed by natural law – conscience, honour, honesty, morality and

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decency – rather than by what is socially acceptable. Autistics young and old, often have social issues and trouble fitting in. Yet, in the words of Jiddu Krishnamurti, “It is no measure of health to be well adjusted to a profoundly sick society”. Perhaps it is not that far-fetched to imagine that neurotypical people are increasingly becoming a scourge on the planet, and that high functioning and ‘orientated’ autistics (individuals who think logically and brilliantly, and behave responsibly and ethically) and will be coming to society’s aid, instead of vice versa. There are many historical accounts of great people overcoming seemingly insurmountable odds, to demonstrate and share their genius potential with the world. However, society must do a better job of raising, educating and providing more children with the opportunity to achieve what a man named Albert said that they all could. Avarice, corruption and evil only lives in some of us. Genius is not a dirty word, and more importantly, it lives in all of us. Joseph Glenn Jessome B.Sc., A.Ed. is involved in an international autism research and development project based in California with contributors from around the globe.


BUSINESS VIEW REAL ESTATE

MIDDLE EAST MEETS FAR EAST By Steve Morgan


BUSINESS VIEW REAL ESTATE

S

trengthened by business confidence and positive economic conditions, the current view of the Far East property market is one of continual improvement, which is why it remains an attractive proposition for many. In fact, in comparison to many other locations, most of Asia – notably China, India and Indonesia – is expected to have among the highest growth rates, and more companies are wishing to take an effective role in enhancing these economies through investments and partnerships. Indeed, better-than-expected economic conditions in the Far East have boosted business sentiment and have strengthened demand as companies upgrade to better quality work spaces. Asia was the first region to emerge from the recession last year and the main cause for this upward correction was a strongerthan-expected surge in external trade around the turn of 2010, which should ultimately lead to stronger capital expenditure (capex), and, especially in India, a better outlook for domestic demand. Moreover, the region will be responsible for 60 percent of the predicted global growth of 4.4 percent in 2010 (in totality, the world’s emerging markets will be responsible for 75 percent of growth). For some internationally operating real estate companies and property consultants, who operate in the region, a long-term strategy is therefore one of continued commitment to growing an already established international network of offices in Asia. For example, Cluttons’ new association with VPC Asia Pacific reinforces a strong belief in the resilience of Asian economies, with countries such as Malaysia leading the way for new development. As with many companies, a key focus for future expansion is to obtain more business from international sources. This should not detract any existing emphasis from the European or Middle East markets, but rather recognise the fact that we live in a truly global market, where international networks and cross-border relationships will play an increasingly important role. Asia continues to be an attractive proposition for many corporate clients showing posi-

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Real estate and property consultancy companies operating in Europe and Middle East are increasingly looking to the Far East for new business and forging partnerships with their peers in the region.

tive recovery measures following the global economic crisis. Asia, including China and India, is expected to have the highest growth rates and existing opportunities to play an effective role, together with other Asian companies in enhancing these economies. As with other key corporations, there is a commitment to growing international presence with strategic alliances and new joint ventures in the Middle East and the Far East. The above association is a good example of how companies from as far afield as the United Kingdom (UK) and Middle Eastern clients looking for opportunities to be part of the Far East growth economies, can benefit from the extensive market knowledge of local companies. Conversely, Asian investors wanting to capitalise on the weakening Sterling or other eurozone currencies and slow real estate recovery in Europe will have strong advisors in the form of their Western or Middle Eastern counterparts.

Local knowledge, local needs Indeed, local collaboration will facilitate an exchange of knowledge and specialised skills and help to introduce the Asia Pacific as a property region to more UK and Middle East investors. Similarly, many Asian players, especially property developers, leisure and hospitality operators and manufacturers, are exploring opportunities beyond borders, particularly in the Middle East and Europe; and this is where partnerships will help facilitate the process. Extended international presence can now tap into market knowledge and client networks in UK, Europe, the Middle East and the Far East. Companies are drawing on this significant experience of the Asian property market and are partnering with Asian players that have built up many years of experience, and indepth knowledge of the local property markets – partnerships like these will ultimately have mutual benefits for both clients.


BUSINESS VIEW REAL ESTATE

Global expansion The global economy and weakness of the Sterling contribute to compromised growth for the property sector. Furthermore, the strong recovery in Asian economies, particularly China, India and Indonesia, means that Asian conglomerates can take advantage of the reduction in UK property prices and the weakness of the Sterling, in particular, to invest in the UK. Asia, most notably China and India, is expected to have the highest economic growth rates – businesses across the globe will want to have a lasting role in these growth economies. For many corporate clients, Asia continues to be an attractive proposition, with the Asian players demonstrating great leadership and forward thinking through positive recovery measures following the global economic crisis. We anticipate that as partnerships are established, there will be opportunities to grow and expand the existing networks across the Asia Pacific. One of the key mutual benefits of this cross-continent partnership is knowledge sharing and career development, leading the way to growing UK businesses in support of activity in the Far East. Asian Islamic Finance Islamic finance is developing at a remarkable pace and is increasingly forming a part of the equation in international finance, whether at government-to-government or private sector levels, including the property market (see The Islamic Alternative in this issue, page 26). Currently there are more than 300 Islamic financial institutions in more than 75 countries, though they are mainly concentrated in the Middle East and Southeast Asia. However, they are also gaining popularity in Europe and the United States. The Malaysian Islamic financial sector is seen as one of the most progressive and attractive in the world given the numerous incentives planned, coupled with further liberation in the coming years. An attractive aspect to partnerships between the Middle and Far East, pertinently in the real estate sector, will therefore, be the ability to offer leading investment links between two of the major Islamic financial markets in the world – the Middle East and

Malaysia. This will also offer access to Singapore, which has recently revised its regulatory framework and tax structure, and gradually introduced various Shari’ah-compliant financial products in the last couple of years. Through its strategy of integrated financial and economic development, Singapore can create new opportunities for Islamic finance and related financial products in the region and will, therefore, also play an important role. East Looking West Forging alliances with the Far East, though, is not simply a one way street. Alliances of this nature facilitate cross border investments for companies in the UK, Middle East and the Asia Pacific, enabling them to innovate the property valuation practices in the Asian region, and tap into international best practices and an established network of experts and clients. Knowledge gain and increased skill sets go hand-in-hand with international collaboration – it facilitates the introduction of new market players and alliances, such partnerships will present the Asia Pacific region as a new source of wealth for UK and Middle East investors.

Similarly, key players in the hospitality and manufacturing sectors are eyeing potential opportunities beyond their Asian borders. They are now turning their focus to the Middle East and Europe in a bid to secure strong global alliances and to continue to build on thier economic standing. Overall strategic focus The experience gained by companies operating these regions and their involvement of strategic growth in recent years, particularly in the Middle East, means that challenges posed by expansion are easily absorbed and that focus should remain on core business lines. Nevertheless, the aforementioned associations will enhance businesses services offered in the UK and abroad, and will help companies that undertake them develop into global players, with China, India and Indonesia arguably the largest growth markets for such partnerships in the short- to medium-term. Only by recognising and embracing new markets with enthusiasm, will property consultants will be able to stay one step ahead of their competition in the future.

The Far East is predicted to be responsible for 60 percent of world growth in 2010, ostensibly predicating a property and construction upswing in the region.

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SPECIAL REPORT

Qatar:

Coming out on top By Oliver Cornock

By all recent indicators, Qatar is leading the way among Gulf Cooperation Council (GCC) economies, with a major bank forecasting that the country will be the top performer across the Gulf over the next two years, buoyed by large liquefied natural gas projects (LNG), as well as residential and retail real estate developments. According to the Global Economic Weekly Report, issued in July by the Bank of America Merrill Lynch, Qatar’s gross domestic product (GDP) is set to grow by 11.3 percent in 2010 and 9.6 percent in 2011. Estimates in the rest of the GCC countries are lower, at 3.6 percent and 4.2 percent respectively. However, Qatar is expected to show a surplus of eight percent of its GDP in 2010 and nine percent in 2011, compared to a Gulf average of 7.3 percent and 10 percent. Individual country GDP estimates for 2010 and 2011 came in, respectively, at 3.2 percent and 3.9 percent for Saudi Arabia; one percent and two percent for the United Arab Emirates (UAE); 2.5 percent and 3.1 percent for Kuwait; 4.6 percent and 4.8 percent for Oman; and 2.4 percent and 2.8 percent for Bahrain. In an effort to boost growth even further, Qatar cut its overnight deposit rate by 50 basis points, the first reduction in more than

two years, to 1.5 percent, effective as of August 11. Lowering the overnight interest rate was in line with the global and regional situation, the Central Bank said in a release. Other key rates, such as the overnight lending facility and the repo rate, were unchanged, at 5.5 percent and 5.55 percent, respectively. The government received affirmation of its own due diligence when credit rating analysts Standard and Poor’s (S&P) raised the country’s long-term sovereign rating from AA- to AA in July. It also affirmed the country’s short-term ratings at A-1+, noting that its outlook is stable and said that Qatar is “weathering the global downturn well, with deflationary pressures and financial sector problems contained by the economic flexibility generated by new gas projects”. S&P also expects the country’s real GDP per capita to expand by 11 percent in 2010, thanks to investments in the LNG industry, which it expects to raise production to 78 million tonnes per year by 2012, up from 37 million tonnes in 2009. The company says this growth will provide a cushion for Qatar’s fiscal and external accounts. Qatar’s economy is also being buoyed by ongoing construction and development projects. Local press reported that, as of June, 18,000 buildings were in construction – more than one for every 100 people.


SPECIAL REPORT

Qatar’s population is expected to reach two million by 2013, up from the 1.67 million of today, which means that its construction boom must continue if it is to meet increasing demand. Ongoing projects include a major airport, the US$20 billion (QR73 billion) The Pearl Qatar residential and retail development, the US$5.5 billion (QR20 billion) Musheireb downtown project and the US$14 billion (QR51 billion) Lusail City waterfront development. The Pearl Qatar, the country’s largest residential and retail development, expects residential units to reach 4000 this year, doubling to 8000 by the end of 2011, an executive at the United Development Company said at a recent press conference. The Pearl Qatar should be mostly complete by 2012, with more than 40,000 people living in some 16,000 units. Work is also continuing apace on the Musheireb project, a development containing 200 buildings and 1000 residential units for the 27,000 people expected to live or work in the area by the time it is finished in 2016. The chief executive officer (CEO) of Dohaland, the project’s developer, confirmed in July that construction on the 35-hectare site is on schedule. Other projects underway include the Ras Laffan Industrial City; Education City, for

The Musheireb project is one of the many large-scale developments underway in Qatar set to bolster the country’s rapidly growing economy in years to come.

which the local Midmac Contracting Company will later this year complete the US$154 million (QR561 million) School of Foreign Service for Georgetown University; the New Doha International Airport; the Qatar-Bahrain Causeway; the Doha Expressway Project; and a national railway system. Also on the cards are several hospital projects, such as the US$2.3 billion (QR8.4 billion) Sidra Medical and Research Centre in Doha, which will initially house 412 beds,

a number that is set to grow to 550 in the future. The completion date is set for 2012. This will be followed by a US$1.1 billion (QR4 billion) ear, nose and throat hospital at Hamad Medical City, the country’s centre for public healthcare services. With the global economy starting to turn towards an upswing, if Qatar’s momentum on its myriad projects continues apace, the country looks likely to meet expectations for significant growth in 2010 and into 2011. TheEDGE

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K BRAND BEAT

eeping your finger on the pulse

By Charlotte Stubbs

T

he rise of new digital technologies has brought with it not only new media and science, but also fresh ways of interaction and a new fabric of society, which has the ability to freely exchange information or intellectual property from any given place around the world. The rapid acceleration of innovative creative developments and our ability to readily share, collaborate and exchange globally has broadened our horizons. As a result there has never been a more important time for companies and brands to ‘keep their finger on the pulse’. To remain up-to-date with not only the more relevant trends, but also advancements and future changes, is vital in order to stay ahead of the game as we continue to accelerate into the future. Design companies play a key role in this. Presenting clients with fresh, innovative and creative ideas not only adds brand value, it also creates and maintains a competitive business edge – helping guide, direct and express the longer term direction and success. Therefore, remaining inspired as a designer is essential not only as source of creativity, but also in adding value to a client’s business. Head of creative for Creative Action Design, Chris Evans comments: “We get inspired by people around us and the incredible

world we live in. With the advancement of technology and the web, we are able to access an incredible range of inspiration and knowledge, which helps develop us as creatives and adds massive value to our clients.” Freelance graphic designer Larry Issa adds: “Being a freelancer means I have to find inspiration in my work, otherwise my clients will not be inspired by what I’m doing. Keeping up-todate is a major driving force. I need to know that I’m creating work that is unique, provokes thought and hopefully, inspires others.” Luckily for creative agencies, much of this investigation can now be undertaken through digital portals. Digital databases, social media networks, print publications and graphic communication have provided us with more creative and information exchanges than ever before. People of all ages are beginning to not only access the web, but to also contribute. At present, there are a vast number of blogs available on the Internet – 144 million, according to BlogPulse. Social media networks have expanded immensely in the past decade, with people sharing their favourite links, videos and campaigns willingly. StumbleUpon is a website that helps people discover and share websites that might interest them. All the websites featured on its database have been recommended and shared by one of its eight million plus users.

This brings us to an interesting point, the way we receive information has also changed. We no longer want to be just consumers where we listen to corporations and accept their ideas as they are presented to us. Instead, we prefer to be part of a new era of ‘creation’. We seek recommendations for what products are ‘hot’ and which ones are leaving us cold. We want to create and share our own products, services and ideas – either on our own or in collaboration with others. Swap Your Shop is a new online community, which has blossomed out of the need to keep one’s finger on the pulse. It allows creative professionals to swap their home and office spaces with other members of the online community, and work remotely for their employers. This innovative approach gives people the opportunity to be creatively influenced and gain new ideas to bring back to the workplace. This creates added value for both the employee, who is seeking new opportunities and experiences without needing to give up work, and also for the employer, who has the benefit of this new inspiration and creativity coming into its workforce. Anyone who has access to the Internet now has the ability to create, collaborate and exchange information – today you do not need to be a published author or decorated producer in order to reach the general public. Blogging is a 21st century development, and many bloggers


BRAND BEAT

“This is not a world made up of passive consumers anymore; that era is over. This world is made up of collaborators. We can create and share.” now boast successful blogging careers – something that was not in existence a few years ago. A blogger’s role is to write about things, which others will find of interest – in essence, a creative hub for those of a similar mind. People can now draw inspiration from portfolio websites such as Behance.net, which is a professional platform with the purpose of showcasing portfolios and allowing creative designers to gain exposure to millions. It allows people to seek inspiration from the work of others, to share, create dialogue and collaborate. Fundamentally, it is all about creating opportunities. The Internet provides a galaxy of new hubs where people of similar minds can connect. People freely exchange music via MySpace and post videos via YouTube channels. Pop idol Lady Gaga’s Bad Romance music video recently clocked more than 185 million viewers on YouTube. This figure illustrates the grand scale at which people interact with the Internet as a source of education and

inspiration on a daily basis. YouTube boasts double the prime-time audience of all three major American broadcasting networks combined, exceeding two billion views a day. As showcased in Brett Gaylor’s recent film documentary, Rip!: A Remix Manifesto, there is a growing movement that argues against copyright and the boundaries of sharing intellectual property. The movement suggests it is beneficial to share ideas and that good ideas should not be kept to themselves. Sharing is the essence of creation – an important way to create a synergy and the idea that two or more things, which come together, are worth more combined than they are individually. Gaylor states: “This is not a world made up of passive consumers anymore; that era is over. This world is made up of collaborators. We can create and share.” The most influential figure in the film is Lawrence Lessig. Lessig is a widely published author, lawyer and a professor at Stanford,

who states: “In the world of text (written work) people are free to write and recreate the culture that’s around them. Without relying on clearing permissions upfront and relying on a very robust set of freedoms entrenched in the law. But, if you use digital technology to do the same things you don’t have any of those freedoms. That’s a censorship of people’s creative activity, the ability of people to speak and spread their message using all the culture that’s around them.” The rise of technology and the digital age has allowed the spread of information to move at a more rapid pace than ever before, and has educated us globally to changes far beyond our own horizons. Not only do we simply access the web to communicate through email, it is intrinsic to our modern generation’s ability to source knowledge. It is no wonder that Google is listed with a brand value of US$100 billion (QR364 billion), leading the top brands list in 2010. Our ability to communicate, share, interact, challenge, collaborate and educate ourselves is slowly shifting to digital streams. And with a TheEDGE

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BRAND BEAT

“In a world where ideas are uploaded and downloaded at an exponential rate, a company must ensure that it is not only educated, but also absorbed by the swift advancements across all new technologies...”

digital population of 1.73 billion Internet users, it highlights the need for all brands to continually challenge, change and adapt to the different devices that are available. One organisation, which has a vast following of people that are keen to stay apace with new trends, is technology, entertainment and design (TED). TED is a global set of conferences curated by the American private non-profit Sapling Foundation, formed to disseminate “ideas worth spreading”. TED talks are now becoming a growing phenomenon as they address an increasingly wide range of topics within the research and practice of science and culture. Each speaker is given a maximum of 18 minutes to present their ideas in the most innovative and engaging way possible. Spin-off TEDx events are independently organised TED events that take place across the world, organised and managed by local people with a thirst for sharing knowledge and collaborating with like-minded people. Anya Kamenetz from Fast Company notes that, “what links [people who watch the TED talks] is our desire to learn; TEDsters feel part of a curious, engaged, enlightened, and tech-savvy tribe. These two things – great ideas and the human connections they create

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– make TED a unique phenomenon.” We [Creative Action Design] integrated our blog ‘Daily Dose’ to our online presence where we showcase the best examples of design from around the world. Daily Dose is a platform of inspiration and intelligence for all designers, marketers and ‘coolhunters’. Our mission is not to target specific markets or clients, but rather to contribute and exhibit our creative inspiration – passing it on so that others may draw from it. Sourced from a limitless array of mediums, across varied disciplines, from innovation in 3D projection mapping, to concept housing by design graduates. Often we find that we are linking to other blogs – other people, who are also searching for what is innovative and exciting in the blogsphere. Due to its online popularity the blog has been extended as an iPhone application, also called ‘A Daily Dose’. A Daily Dose brings users our daily inspiration direct to their phones, with the ability to comment and share. The iPhone may be seen as a revolution because it has created a new system of information. Where in the past we might have searched for information via web browsers on our computers, the iPhone provides us with specialised, and often free, individual programs which locate the information for us. People can

keep up with what is happening in the design world wherever they are – travelling to a meeting or lounging by the pool. The Internet, and the development of iPhones and iPhone applications have enabled us to share what we feel are the best design examples around. In a world where ideas are uploaded and downloaded at an exponential rate, a company must ensure that it is not only educated, but also absorbed by the swift advancements across all new technologies, the fresh faces in popular culture, changes in social behaviour, emerging brands and inspiring design solutions. By keeping a finger on the pulse, clients will benefit from the enhanced knowledge, creativity and desire by a company wanting to always be at the top of its game. In an ever-changing design world, which thanks to the online realm is now moving at a faster pace than ever, this is essential. Trends come and go, and successful organisations will always ensure they are one step ahead of the pack. By reading blogs, people gain a real insight into what other innovative individuals are doing. Sharing ideas, and collaborating with all sorts of organisations and people, is becoming much more mainstream. This is where the future lies; so make sure you are moving with it.


BALANCE SHEET

GRC in

the GCC –

Beyond Control By Peter Kohut

O

rganisations across the globe use governance, risk and compliance (GRC) to enhance their competitive advantage, positively influence their valuation and create an agile or high-velocity organisation. So what exactly is GRC and why should organisations in the Gulf region be interested? Competitive advantage, increased valuation, agile enterprise, high-velocity organisation…these are not necessarily terms that spring to mind when discussing governance, risk or compliance. But they might, if one talks about GRC. The fact that the acronym has been established as quasi-standard, at least in certain industries, is indication that there is more to GRC than meets the eye. GRC represents a framework, a management philosophy, and a guiding

principle to unify various control and assurance functions, with the objective of leveraging commonalities to strengthen overall effectiveness and improve efficiency. GRC is, therefore, more than the sum of its constituents. It realises that to govern, control and assure an organisation in an optimal manner, it means considering the system of governance, risk and compliance. This system view emphasises the intricate relationships between the individual functions, their dependencies, and effects on each other to form a holistic view. KPMG defines GRC as “an integrated framework that unifies governance, risk, compliance and assurance functions to achieve a consistent and holistic vision across the organisation”. Before discussing how the holistic system view of GRC can achieve the value propositions briefly outlined, another

important question needs to be addressed. And that is who should actually be interested in GRC? The GRC movement started with large, complex, globally operating organisations, in particular, from the highly regulated financial industry. These adopters of GRC realised that the spend on governance and assurance functions had spiralled out of control and the complex web of related assurance activities was full of holes, causing the overall approach to be less than effective. So, does that mean that GRC is only useful for large, established, complex corporations? The answer is a resounding no. A common phrase we often hear uttered by executives engaged in costly initiatives to improve their existing governance and assurance framework as part of a GRC movement is: “If I could just design my


BALANCE SHEET

“In today’s rapidly changing economic environment it pays to be agile and able to react to threats, while leveraging opportunities more speedily than the competition.” framework from scratch, I would do many things differently.” Therefore, foresightful organisations in growing mode and smart companies thinking about establishing a risk or compliance function, are equally jumping on the GRC bandwagon to understand how they should design their governance and assurance functions from the outset, rather than spend significant money on later stage improvements to even out design mistakes. GRC protects and enhances business value So how can GRC fulfil ambitious value propositions? Through embracing a holistic system view of governance, risk and compliance, it fosters a risk-aware culture throughout the organisation, which in turn is fundamental to effectively protecting business value. We have seen, and the press has reported, a significant number of cases, for example, UBS or BP, where organisations with technically sophisticated governance and risk infrastructures got into trouble owing to a lack of risk-aware, or risksensitive culture. Since the system view of GRC considers the relationships between the governance and assurance functions on multiple layers of abstraction, it supports informed, efficient decision-making, which would not otherwise be possible.

During our work with GRC, we noticed a frequent complaint from business units of some larger organisations that they experienced an overload of assurance, risk and compliance driven requests, all asking essentially for the same type of information. Just as the business had to deal with a flood of similar requests, reporting to the decision makers, including the board, was equally chaotic. Multiple, uncoordinated, ofteninconsistent reporting lines and formats created a rather blurry picture – timeconsuming if not impossible to resolve in the typical timeframes available to digest such information on a senior level. Through the holistic system approach of GRC, such communication paths and reporting lines are streamlined, with components being leveraged across the governance and assurance functions, rather than duplicated or recreated. As a result, decisions can be made faster and more accurately, when and where required. GRC enhances agility and enables a high-velocity organisation In today’s rapidly changing economic environment it pays to be agile and able to react to threats, while leveraging opportunities more speedily than the competition. In a traditional operating organisation, the business side adapts

quickly to changes in the environment, but the governance, risk or compliance functions take significantly longer to react, leaving the organisation exposed while the functions are re-aligned. Given GRC’s emphasis on leveraging data, processes, and systems across governance and assurance functions, a single change affects all the respective functions, rather than just one. Change is consequently rapidly and holistically disseminated, enabling the governance and assurance functions to keep pace with change in the business. Rapid, system-wide spread of change is equally important for a high-velocity organisation. High-velocity organisations are masters of organisational learning. Whether learning comes from solutions identified as a response to shortcomings experienced internally, or from new business operating models as a reaction to a changing environment – high-velocity organisations can institutionalise such lessons quickly and effectively. The experience of one becomes the expertise of many, not just on an intellectual level, but on an operational one as well. Within GRC designs, the commonalities between governance and assurance functions, including the vocabulary used across the GRC functions, makes such rapid assimilation of learning possible, therefore, enabling a high-velocity organisation. GRC strengthens competitive advantage The aforementioned benefits of GRC – achieving agility, enabling a high-velocity organisation, and its impact on value, if institutionalised properly – becomes a core competency of an organisation that is difficult for competitors to emulate. However, GRC can also impact the bottom line directly, by rationalising governance and assurance activities to create long lasting cost savings. Several organisations we worked with were able to shave off yearly control, risk and assurance related costs way beyond the initial

TheEDGE

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BALANCE SHEET

outlay for the GRC initiative. This leads us to how GRC is implemented in practical terms. GRC itself is a conceptual way of thinking, rather than a tangible prescription. However, once the holistic system view of governance, risk and compliance is adopted, a range of potential initiatives emerge, all of which find a place under the GRC heading. A good first exercise is to identify who actually owns, is accountable for, and has the responsibility for, risk and control within the organisation. Taking stock of the current state often reveals interesting surprises. Around certain types of risk, human resources-related in particular, a large number of parties think they have ownership, whereas with others, such as strategic risk, no one appears to want to take responsibility. Removing unwanted and unwarranted redundancies and filling the gaps, achieves both an increase in efficiency as well as an increase in effectiveness. And should the organisation be in the early stages of organisational development, it benefits them to pay close attention to such matters. Properly designing roles and responsibilities with a GRC mindset upfront builds in such efficiency and effectiveness measures from scratch. It is also advisable to bring the assorted GRC parties to the table as early as possible and align the various languages used. It is often astonishing how the same risk can be labelled differently, depending on whether compliance, internal audit, legal, or the risk department looks at it. As a consequence of this, despite addressing the same risk, these departments do not understand each other, and perhaps even worse, the users of the departmental reports are even more confused. With such fundamental issues as ownership and nomenclature clarified, the organisation can address various structural elements within GRC. For instance many organisations have a large number of committees in place, which do not really serve any significant purpose. They might well have been put in place as an ad hoc governance element for a project

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GRC works to achieve a consistent and holistic vision across the organisation.

and then simply abandoned when the project terminated. One organisation had more than 20 committees running before our advisory team initiated their GRC-aligned review. Now the organisation runs more efficiently and effectively with fewer than five such committees. Likewise, IT infrastructures and common processes can equally be harmonised across the governance and assurance functions. The GRC movement in the Gulf region

is not yet widespread. Some foresightful organisations have started with tactical solutions, such as the committee or more general governance optimisation, or the realignment of roles, responsibilities and ownership. However, all organisations – whether small or large, start-up or mature – can only benefit from taking a different perspective on their GRC approach beyond control.


LEGAL INSIGHT

Legal Jargon

Explained

Ray O’Connor and Brenda Hill discuss legal jargon and invisible rules to reveal what they mean for the individual in Qatar.


LEGAL INSIGHT

C

ontracts contain terms, which can be confusing or have a purpose that is not entirely understood. The first part of this article examines the terms ‘jurisdiction’ and ‘joinder’. These are often overlooked when drafting contracts and can cause real problems should a dispute arise. The second part of this article contains some examples of Qatari rules and laws, which apply to business contracts in Qatar even if not expressly provided for in the contract itself. These cannot be excluded or amended by the parties. Part 1 – Common legal terms Jurisdiction – if there is a dispute between contracting parties jurisdiction clauses make it clear from the onset, which body is empowered to deal with that dispute and whether the decision will be final and binding. The most common jurisdiction clauses refer to international arbitration rules, or the courts of a specific country, although other options (usually interim dispute resolution measures) are available. If a dispute does arise and there is no jurisdiction clause in the contract (or the clause is unclear, or ambiguous), one of the parties could use this as a perfect opportunity to ‘muddy the waters’, while also making it difficult for the other party to commence the dispute resolution process without the risk of any decision being overturned/rejected at a later stage. For example, even if a court in one country does take on a case and hears a dispute, a common tactical defence manoeuvre is for the defendant to ‘reserve its position’ on the court’s jurisdiction, while taking part in the proceedings. Assuming the claimant wins and wants to enforce that decision in another country, the relevant foreign court may reject the award by agreeing with the defendants’ ‘reserved position’ that the original court never had jurisdiction. This can give rise to another set of proceedings. It is even possible for there

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to be simultaneous sets of proceedings in different jurisdictions, with a race to ultimately achieve to a favourable decision and enforce it in the relevant country. When considering jurisdiction clauses, it is important to consider how any award/decision can be enforced in practice against the other party, for example, where the ultimate assets of the defendant are located. An award which is unenforceable is worthless. Contracts of an international flavour often have arbitration clauses that grant jurisdiction to international arbitration organisations. For example, the International Chamber of Commerce (ICC), or the London Court of International Arbitration (LCIA) rely on the relevant country being a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (also known as the New York Convention). Subject to certain limited restrictions, this requires the courts of contracting states to give effect to agreements to arbitrate and recognise, and enforce arbitral awards. Arbitration can be a sensible step, but there are pros and cons involved and different rules for each organisation. Care should always be taken to ensure that in these circumstances, arbitration is appropriate and the relevant laws of the countries are considered.

Joinder – a joinder clause allows multiple parties to be ‘joined’ into the same set of legal proceedings where the same questions of law, or fact, arise which are common to the parties. It allows a single entity (for example, a judge) to hear all the arguments and make a decision, which apportions liability between the parties. If joinder is not possible, an innocent party may not be able to prove its claim against any of the potential defendants, so could be left entirely without a remedy – even if the defendants (viewed collectively) are manifestly to blame. This is sometimes referred to as a ‘legal black hole’. The good news is that joinder is usually possible if court proceedings are in the same country and may also be possible with arbitration proceedings – depending on the relevant arbitration rules and provided there is careful drafting. Sometimes joining parties to the same set of proceedings is not desirable. Therefore, other techniques have been used to create decisions, which are aligned between multiple parties. For example, with Development Agreements, Private Finance Initiative (PFI) and Public Private Partnership (PPP) projects and structures where ‘special purpose vehicles’ are used


LEGAL INSIGHT

or it is necessary to pass down obligations. These techniques include the use of (i) ‘pay when paid’ or ‘pay when entitled to be paid’ clauses, (ii) ‘equivalent project relief and entitlement’ clauses, (iii) permitting ‘name borrowing’ in order to pursue or defend claims in the name of another party, and (iv) provisions making decisions under one agreement final and binding under another agreement (for example, measurement evaluations by an expert). All these techniques have merit, but they need to be very carefully considered and drafted, and the laws of certain countries may not allow a party to use them. Part 2 – Invisible Rules Qatari law recognises the principle of ‘freedom of contract’. This freedom is subject to a number of exceptions and implied rules, which cannot be excluded or ignored, even if expressly agreed to by the parties in the contract. Understanding these ‘invisible rules’ allows a party to consider whether to adjust the price, obtain additional insurance cover, adopt a different approach in the contract or even walk away from a deal. Ignorance of these ‘invisible rules’ could turn out to be very costly. Some common ‘invisible rules’ applicable in Qatar are set out briefly below, but there are many more: Public morals, order and good faith – contract clauses cannot contain any term prohibited by law or contrary to public order. If the contract does contain an offending clause, the clause or even the entire contract may be void. This principle is applicable regardless of any choice of law clause in the contract. The Civil Code of Qatar also provides that a contract must be executed in a way that is consistent with the

requirements of good faith. There is, however, no definition of ‘good faith’ so this needs to be assessed case-by-case. Commercial impossibility – the Civil Code of Qatar provides that if there is a general, exceptional and unforeseeable event, which results in a contractual obligation being onerous (as opposed to impossible) and which will result in a substantial loss for one of the parties, the court has the power to reduce the obligation to a more reasonable level. While this may not be applied frequently, the parties cannot contract out of this. Liquidated Damages – parties often use liquidated damages to establish the measure of damages, which can be recovered for a particular breach (for example, delay damages and key performance indicators). This makes sense, particularly as it may be difficult, costly or time consuming to prove the actual damage suffered. Under Qatari law, if the debtor can show that the creditor has not incurred a loss, the liquidated sum will not be payable. The court may also reduce the compensation payable if the debtor can show that the determination is either grossly excessive, or that the obligation has been partially fulfilled. The level of liquidated damages also acts as a ceiling on the recoverable loss unless the loss has been caused by the deception, or gross mistake of the other party. Exclusions of liability– a common mechanism to control exposure in a contract is to exclude certain types of recoverable loss for example ‘loss of profits’. Regardless of the exclusion, the Civil Code of Qatar provides that it is not possible to exclude liability where the loss is due to a parties’ deception or gross mistake. It is not altogether clear how ‘gross’ a mistake needs to be in order for an exclusion to apply. In

practice, the threshold may be relatively low. Fitness for purpose – for contracts for works, any materials supplied must comply with the contract specification. If there is no specification, they must be sufficient for their intended purpose. Decennial Liability – in general terms, pure works contractors and professional consultants are jointly and strictly liable for up to 10 years for defects, which threaten the safety or stability of construction works. This applies even if the defect was unavoidable and was not caused by the negligence of either the contractor, or the design consultant. It is not possible to contract out of this protection. Consumer Protection Laws – Qatar has implemented wide reaching legislation, which is intended to protect consumers. For example, there are rules governing the advertisement and description of goods and services, a consumer’s rights to refunds/replacements/repairs, the need for pricing transparency, actions intended to control market prices, health and safety standards and recall of defective products. The definition of ‘consumer’ and ‘supplier’ are broad and include manufacturers and entities in the supply chain and end-users. There are civil and criminal sanctions (fines and imprisonment) for failure to comply with the law. Therefore, it is recommended that anyone involved in manufacturing, advertising, or of selling goods and services obtains a copy of Law No. 8 of 2008, Concerning Consumer Protection from the Ministry of Business and Trade. Note: This article is only a general introduction to some legal terms and laws in Qatar. It is not legal advice and should not be relied upon as such. If any reader requires legal advice, this should be obtained from an experienced lawyer, who can provide advice, which is tailored to the relevant facts and circumstances. For any information in respect of legal issues, please contact Ray O’Connor (ray.o’connor@dlapiper) or Brenda Hill (brenda.hill@dlapiper.com). TheEDGE

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BUSINESS KNOW-HOW

How do you protect valuable enterprise data in an age when employees frequently work beyond the reach of traditional data centre security controls? Ali Ahmar investigates


BUSINESS KNOW-HOW

I

ncreasing staff mobility means that building an impenetrable perimeter is no longer sufficient. And because these staff no longer work from a specific workstation that is hardwired into the corporate local area network, it is no longer clear where an organisation’s perimeter lies. Employees may be based in remote, regional outposts and working across a wide area network. They may be on-site, but working over a wireless local area network (WLAN) from warehouses, distribution centres or other distant points on an organisational campus. They may be travelling between meetings, attending conferences, working at client’s offices or from their own homes and connecting to back-end systems over the Internet, via remote devices such as laptop computers or cellular telephones. On the positive side, this kind of mobile working brings new freedoms to an organisation, making it possible for staff to access work and information when they are on the move. It brings a new flexibility to when they work and how they work, making them more productive. And there are no frustrating periods of down time in which they cannot complete work until they return to their office-based desktop computer. Wherever members of this increasingly mobile workforce roam, the priorities and challenges for chief information officers (CIOs) and their teams remain the same: Safeguard the integrity of corporate data, be sure it does not fall into the wrong hands, and at the same time, guarantee that the security measures you take do not impact application performance or affect user-experience. For these reasons, many CIOs cannot be blamed for casting an apprehensive eye over their existing security systems and

practices, and deciding that a fresh approach is needed. If they are to meet the challenges of the mobile workforce, a more comprehensive approach which seeks to impose rigorous data security measures is required, not only at the core of the corporate network, but outwards to its most distant endpoints, such as laptops and smart phones in the field. The core, however, is still the best place to start. While it is vital to secure data no matter where it resides, the most critical business data continues to be attached to the storage area network. This fabric is centralised and supports almost every aspect of the data centre – from the server environment and workstations, to edge computing and the back-up environment. This makes it an ideal place to standardise and consolidate a holistic security strategy. The key is to build upwards and outwards from there, developing robust and non-intrusive security policies that address the needs of different kinds of users. For that reason, a fabric-based security solution is an increasingly popular option for CIOs concerned with safeguarding sensitive customer and employee data and their company’s valuable intellectual property. In particular, they are looking for an architectural approach which incorporates a security intelligence layer, managed through a centralised administrative console. The benefits of this kind of solution are clear. It enables IT professionals to: • Create and enforce security policies; • Update them or develop new ones in response to emerging threats; • To monitor systems; • And conduct regular security audits of the corporate infrastructure, with a view to spotting potential breaches before they occur. The right solution will also incorporate powerful encryption technology – preferably with advanced encryption standard-256 (AES) – enabling them to wrap sensitive data in transit between systems in an additional layer of protection.

From these solid foundations, network infrastructure products, which reach out to the mobile workforce can be connected directly into the core, extending security best practices to the rest of the corporate infrastructure. Take, for example, the corporate network’s perimeter: technological advances mean that a WLAN can now extend an enterprise network to areas of the business that were previously unattached to the enterprise infrastructure, particularly to locations on an organisational campus, where laying a cable infrastructure might prove challenging or prohibitively expensive. In this way, remote teams working from anywhere on that campus can access the applications they need from laptops, tablet PCs and personal digital assistants, also known as palmtops. Or, they may be warehouse staff recording the dispatch of goods to a customer from a loading bay, medical staff taking patient details in an outpatients clinic, or library staff providing a mobile book collection service around a university campus. Some CIOs and their teams still have doubts about the security of wireless networking technologies, a hangover, perhaps, from the early days of the 21st century when vulnerabilities in the wired equivalent privacy protocol were publicly exposed. However today’s wireless networking products, when tied to a secure data-centre fibre backbone, can offer levels of end-toend protection just as secure as a wired network. Wi-Fi Protected Access 2 based on the Institute of Electrical and Electronics Engineers 802.11i security standard, uses algorithms built on AES, for example. Wireless intrusion systems, meanwhile, can enable IT teams to detect and locate unauthorised devices. And techniques such as ‘geofencing’ (a virtual

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perimeter for a real-world geographic area) enable them to provide access to back-end systems based on the physical location of wireless devices. Likewise, a secure data-centre fibre backbone also brings the endpoint devices of mobile workers that little bit closer to network administrators and firmly under their control. Regardless of their physical location, the laptops and smart phones that so many mobile employees rely on to stay productive must be secured if an organisation is going to lessen the risks associated with their loss or theft. It is not just a matter of protecting the integrity of the data they hold, it is also about safeguarding the data they are able to access at the back-end. A robust, holistic security strategy, which takes into account increased

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mobility will seek to secure these devices both locally and centrally. Local measures include hardware lock-downs (equipment should be password-protected so that it can not be accessed by unauthorised users) and softwarelevel precautions (encryption should be applied so that even if the device is compromised, the data it contains is useless without the proper authentication keys). Meanwhile, at a centralised level, network administrators need to tie network access control and intrusion-detection systems into the corporate security backbone, so that they can control the data traffic that follows to and from these devices at the point where the corporate network meets the public Internet. From such a solid foundation, it is possible to build an architecture today that protects corporate data from malicious activities, data breaches, network intrusions and policy

violations, even as it roams the campus and the wider world in the hands of mobile workers. Many companies are looking to do just that. According to IT analyst firm Forrester Research, approximately 40 percent of businesses will significantly increase their spending on new IT security technologies this year. But without a strong, secure core, corporate data at the network edge and remote endpoints that may prove far harder to lock down. The first question any company with a mobile workforce must therefore ask itself should be: How safe is your most sensitive data, really?

Ali Ahmar is the regional sales manager for Middle East North Africa for Brocade Communications.


SPEAK EASY

STAYING

IN THE

LOOP

To risk a well-worn cliché, leaders are encouraged to ‘walk the walk’. This is usually understood to mean leading from the front and demonstrating good management skills by projecting certainty and conviction. But, Fran McElwaine reports that this is only half the story and there is more to organisational communication as a key leadership skill than just setting a competent, confident example.


SPEAK EASY

“Highly engaged employees make more effort, perform better and are less likely to leave voluntarily than less engaged employees.”

B

y implication, the other half of the truism, ‘talking the talk’ suggests an empty and rather shallow ability to waffle and spout jargon. But this line of thinking does not do the requirement for a leader to have good communication skills as much justice as it deserves. Let us investigate this a bit further. Can you think of a single charismatic and effective leader – one who genuinely instigated change and commanded respect – that was not also extremely good at ‘talking the talk’? When Mahatma Ghandi said: “Be the change you want to see in the world”, he encapsulated in that single sentence the essence of his vision and the power of his conviction. Those 10 simple words are one of the most emphatic examples of effective leadership communication in history. Moreover, consider the fact that most leaders spend the majority of their time talking. They negotiate, they persuade, they explain and they challenge, and they do all of this with words. Either verbally, as in face-to-face meetings and presentations, or in the written form, through documents, emails and proposals, the ability to communicate effectively is a fundamental leadership skill. The higher up in an organisation one progresses, the more important the skill becomes. As the leadership role becomes one of aligning and engaging people with an overall strategic direction, so too the ability to inspire and persuade becomes an increasing predicator of success. Why is it then that so many managers believe that ‘internal communications’

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is a function that can be outsourced, or delegated (often, but not always) to junior members of their company’s communication department? Is it right that the important, some might say essential, function of aligning an employee base should be vested in an expensive intranet site or e-newsletter that takes hours to prepare – and seconds to ignore? How much better would it be to empower managers to cascade important strategic messages in the manner people most like to receive them – through face-toface communication? Well-known research conducted by global professional services company Towers Perrin (now Towers Watson) demonstrates that employees look to their immediate line managers for more than 60 percent of the information they need to do their job. If those managers are ineffective communicators – conveying the wrong information to their teams, or, more often, none at all – how are employees supposed to understand their role in actioning strategic imperatives? Accordingly, there is a direct correlation between the degree of importance an organisation gives to internal communications – and by definition the degree to which their managers are empowered to deliver important strategic information – and the level of engagement of their employees. A wide range of research indicates that highly engaged employees make more effort, perform better and are less likely to leave voluntarily than less engaged employees. A 2009 Watson Wyatt report on the return of investment of internal communications stated

that effective employee communication is a leading indicator of financial performance. Additionally, the report found that it is a driver of employee engagement and those companies that actively engage their managers in communicating corporate strategy experience up to a 47 percent increase in shareholder value. In 2007 the Corporate Leadership Council revealed research that showed employees with high morale “perform 20 percent better and try 57 percent harder” than their less engaged peers and added that “organisations that communicate a clear employee value proposition experience 87 percent less employee churn” or turnover. Bearing in mind that the direct and indirect costs to an organisation each time an employee leaves is estimated at 150 percent of their annual package, internal communications begin to take on a new and significant role in driving the bottom line. Effective organisational communications is also a key indicator of likely success and organisational reputation. In its 2004 report, Boosting Business Performance, PricewaterhouseCoopers (PWC) conclude that 100 percent of organisations which meet the PWC criteria for maturity, utilise internal communications as an important and strategic element of business delivery. The ability to communicate effectively in the corporate sense is, therefore, far from being the preserve of the managerial lightweight. Rather, it is a predicator of leadership success, enhanced performance outcomes and a demonstrably healthier balance sheet. Indeed, you may be able to ‘walk the walk’, but to be a truly effective leader you also have to be able to ‘talk the talk’.


BEHIND THE WHEEL

ROAD SAFETY IN QATAR’S OIL AND GAS INDUSTRY

In the second of our series on road safety in Qatar, TheEDGE takes a look at how the hydrocarbon industry is countering the economic and human toll of road accidents on their sites and involving their employees and vehicles, and how they are utilising tools such as defensive driving courses and in-vehicle monitoring systems to do so. By Miles Masterson


BEHIND THE WHEEL

TAKING ROAD SAFETY SERIOUSLY In a field renowned for its attention to the health and safety of its employees, large multinational and local companies in the hydrocarbon industry operating in Qatar understandably have stringent standards when it comes to road safety. These are even more necessary when you consider the long distances travelled annually by the industry’s commuting employees, as well its trucks, buses and transport vehicles such as fuel tankers. According to Safedrive International, which conducts ‘defensive driving’ tuition (see sidebar) in Qatar, “motor vehicle crashes [are] the leading cause of fatalities within the industry”. This is based on information taken from an international database of 2913 million hours worked in 38 countries and including operations in 93 countries across the world. With its high motor accident rate relative to global levels (see TheEDGE issue 13), this is especially relevant in Qatar. The country has a large expatriate community, almost all exclusively here to work on medium- to long-term contracts, the majority in the hydrocarbon industry and more than 60 percent of whom account for road accidents,

injuries and fatalities here. Therefore the safety of those working in this sector in Qatar is treated as paramount. Take Shell, whose approach to road safety in many ways exemplifies how seriously the industry treats the issue. Beyond mandatory defensive driving training, Shell has invested in decreasing the potential for accidents amongst its workers and vehicle fleets. “Our big project here is the Pearl GTL and back in May we passed 200 million kilometres driven,” says Simon Buerk, Shell communications manager, who adds that this is the equivalent of driving 5000 times around the world on the equator. With more than 50,000 people working on that project alone, from the onset Shell, in line with its set of international ‘lifesaving’ criteria, identified road safety as a huge potential risk. It took into the account that the company had tens of thousands of workers commuting seven kilometres twice daily from Pearl Village in Ras Laffan to the site. Shell also realised it had hundreds of staff commuting in their own vehicles from Doha and decided to eliminate unnecessary journeys wherever possible, actively managing their transport by providing buses for all of them.

“For people that are based in Doha who work in Ras Laffan we have required them to travel up to site by bus,” explains Buerk. “This has saved us 15 million kilometres that people would have otherwise driven by themselves in private cars. Most of those kilometres would have been early in the morning, or late in the afternoon after a long day at work, so we think this is a much safer way to do it.” Those commuting the shorter distance from Pearl Village to Ras Laffan also travel in company buses, further decreasing the odds of an accident. “We have 380 buses and they are travelling about 13,000 kilometres (kms) a day within Ras Laffan,” adds Buerk. “They have to wear seatbelts in the front and the back and for all the vehicles that we have, we have an in-vehicle monitoring system.” (IVMS, see sidebar.) The savings, in both lives and on equipment, Buerk reveals, have more than been worth it. “[With the] company absorbing the cost of buses, investing in the safety of its employees, we achieved those 5000 trips around the world without a single serious injury.” As per many companies in the industry, Shell has been involved with further road

Evocative artwork from a recent Ras Laffan Road Safety Awareness campaign on driving with mobile phones. Image courtesy Ras Laffan.

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safety initiatives within Ras Laffan. Buerk says they are also working with the Ministry of Interior Traffic Department and the Supreme Council of Education on including road safety in the education cirriculum. Of course, Shell is not alone in promoting such initiatives, and Buerk is quick to point out that the company is also currently part of a community outreach programme in northern Qatar, alongside its peers. “It is not just us, it is all the end users in Ras Laffan, Qatargas, RasGas...and it is under Qatar Petroleum, which runs Ras Laffan.” Ras Laffan Industrial City itself is in turn extremely focused on improving and maintaining a high standard of road safety. “Road Safety campaigns comprise a good part of our yearly plan. We conduct awareness campaigns on monthly basis,” says Ras Laffan media officer, Jack Saba. In 2010 alone these have included campaigns on speeding, not driving with mobile phones and safer bus driving. “Every campaign consists of more than 15,000 awareness leaflets that we distribute all over the city. More than 40 outdoor signboards are distributed all over Ras Laffan, and animated designs placed on giant electronic billboards on the main gate and port gate of Ras Laffan.” These initiatives, as well as the city’s zero-tolerance attitude towards reckless driving, are clearly paying dividends. As Bob Coventry, country manager for Qatar of Safedrive International, who has worked extensively within the complex, says: “When you look at Ras Laffan, it is a very strict environment, strict speed limits, observation of limits, signalling, wearing seatbelts; there are inspectors out there, as well as Ras Laffan’s own security forces.” As as a result , explains Coventry, there are very few incidents in Ras Laffan, based on the number of people working on site. THE VALUE OF DEFENSIVE DRIVING STRATEGIES AND IN-VEHICLE MONITORING According to Safedrive International, analysis conducted in the United Kingdom (UK) and in South Africa, before and after defensive driving courses and other

DEFENSIVE DRIVING AND IVMS A prerequisite for employment in almost all facets of the hydrocarbon industry is the completion of a ‘defensive driving’ course, which extends to all subcontractors. This is augmented by a computerised in-vehicle monitoring system (IVMS), installed in industry fleets to ensure that drivers adhere to defensive driving – legally, safely and economically. Driving, says Bob Coventry, country manager for Qatar of Safedrive International, is one of the most dangerous things most human being will ever do, on a par with skydiving for example, and as companies and individuals, we all need to be more cognisant of that fact. “We don’t teach people to drive, we teach people with a licence to drive defensively and be aware of the driving situation and their own vehicle.” “It’s also attitude,” furthers Ian Caygill of the Qatar International Safety Centre (QISC). “For example,” he says, “when I started training people here, they used to complain about people switching into the right hand lane to overtake and cutting them off. And I said: ‘Hang on, you know this is going to happen so why does it annoy and upset you? Why are you not aware of this and just say to yourself, ‘I have to deal with this?’ It is all about attitude.” Using such examples, QISC begins its one-day defensive driving course with a practical module designed to enlighten drivers to the merits of being vigilant and remaining calm behind the wheel. It also provides them with a handbook aimed at explaining the intricacies of Qatar’s roads and local traffic laws. As up to 95 percent of road accidents are due to driver error, QISC then emphasise their charges to not take the act of driving anywhere for granted. Many though, express that they feel they are adequately skilled behind the wheel and do not see the point – but they are soon corrected. “We talk about emergency braking at 80 kilometres per hour (kph),” says Marco Virgili, head of driver training at QISC. “We ask the class how many metres will it take to stop, and you know for a fact that they will say five metres. But it takes 57 metres, and that’s the thing, when you are driving and you have someone behind you two metres from your bumper, he thinks he can stop, but he can’t, he’ll hit you.” Followed by a practical component in the second part of the day, this information is backed up by a series of enlightening photos and sobering videos, including what happens to a car when it hits a brick wall at various speeds, the lesson being that slowing down by a few kph per hour can more than double your chances of survival in an impact. Apart from the dangers of speeding and tailgating, QISC’s defensive driving course also covers dealing with many other facets of road safety, including predicting traffic behaviour ahead, how to negotiate Qatar’s roundabouts, when it is okay to drive talking on a mobile phone (never, obviously) and the importance of wearing seatbelts. Others include adapting to the weather, how to deal with dense traffic situations, the difference between normal and ABS brakes, and how to gear down, brake and stop correctly, as well as adopting a safe following space and leaving a gap in front of you at an intersection or a roundabout. Defensive driving students must achieve a 60 percent pass. “If not, then we say to the company they are is not competent and it is up to them what they want to do,” says Virgili. Nevertheless, with the introduction of a global positioning system (GPS)-based computer-driven IVMS located on-board company vehicles, the performance of drivers can be assessed continually and their bad habits rectified over time. This data can also be used to determine the cause of an accident. However, not only does this system record each driver’s information on USB, thanks to GPS programming it can also immediately warn them, via a small buzzer when they are exceeding the speed limit in a certain area, for example. Using this information, a reputation for good driving performance can set a healthy competitive atmosphere within organisations and forces even management to set a good example, as everyone’s results become common knowlege internally. Moreover, says Coventry, this system saves hydrocarbon companies money, as it weeds out consistently poor drivers, saves on wear on tear and decreases the accident rate significantly. “The drivers see the upside too,” he says. “They can complete their journey in the same time, but they are more relaxed, so everybody benefits.”

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techniques were introduced to participant hydrocarbon industry companies, has highlighted a marked reduction in clients’ automobile accident rate (an accepted global industry measure of automobile accidents). In the first two years in one fleet this was 60 percent; and a 58 percent reduction in an another, over 14 months. There are also corresponding associated

savings in reduction to vehicle damage, in the former case above, 55 percent, and in the latter, 95 percent. “Through our driving programme and driver monitoring, fuel is saved,” adds Coventry, whose company also advise institutions on the best economic choice of vehicles to invest in for their fleets. “A company with a fleet of buses in the UK saved

“Defensive driving and other road safety measures result in a marked decrease in road accident rates.”

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one million pounds (QR 5.6million) over six months, because their drivers were driving less harshly and idling for less time. So not only are they saving them money, they are emitting less pollution into the environment.” Yet despite these facts, a positive attitude towards road safety is not as pervasive in Qatar’s private sector as one might imagine. “The larger companies, the likes of Shell, Exxon Mobil and Qatargas, are active proponents of road safety,” says Mario Virgilli, head of driver training and road safety at Qatar International Safety Centre (QISC), another leading facilitator of defensive driving in Qatar. “Then you get the smaller companies that have to get the certificate to get on site,” Virgili adds. “That’s where they question it; how good it is, how bad it is and how much it costs… their attitude is: ‘Why should it take us a day to learn what we already know?’” “They only see the outlay on their bottom line, but they really need to look beyond that,” concurs Coventry. Nevertheless, at least in the hydrocarbon industry in Qatar, the fact is that companies and individuals who do not comply will find themselves out of work. With the authorities paying more attention to road safety both in the private and public sector, this standard is set to follow into other industries, such as construction. Here, for example, says Ian Caygill, senior business development manager at QISC, speed limits of 30 kms per hour are now being enforced to ensure the safety of pedestrians on building sites. When one considers that most people make the move to or travel to Qatar for business reasons, it only seems fair that the private sector should respond to the example set by the hydrocarbon industry, take action and share the responsibility for road safety. While it might be going too far to suggest defensive driving and IVMS should be made mandatory for all organisations across all sectors in Qatar, consider the impact, both financially and in the reduction of accidents, if they were. “There is no reason it would not succeed in any company if you applied the same principles,” offers Coventry. “Plus, there is a marked cost-to-benefit return.”


INDUSTRY FOCUS HEALTH FOODS

THE GCC HEALTH FOOD AND BEVERAGE MARKET By Srividyaranjani Venkatasubramanian


INDUSTRY FOCUS HEALTH FOODS

H

ealth food products are ‘nutraceutical’, a term coined in the United States (US) in 1989, combining the words ‘nutrition’ and ‘pharmaceutical’. Nutraceuticals are foodstuffs that provide a range of health and medical benefits, including the prevention and treatment of disease. They range from isolated nutrients, dietary supplements, and specific diets, to genetically engineered foods, herbal products and processed foods, such as cereals, soups, and beverages. The concept of health food obtained a favourable public reputation in the global market right from the time of its emergence and has grown rapidly and now even overtaken the market of organic food. Health food is an advantageous way for new companies to break into new and existing markets. The sector has also caught the attention of many global multinational corporations, who are adding health food products to their lines. However, even though the health foods and beverages segment is a growing market worldwide, it is still emerging in Gulf Cooperation Council (GCC) countries, with many new entrants trying to provide products for a consumer base that is becoming increasingly aware of the benefits of health foods. The following information was taken from a recent study on health

“Rising consumer awareness coupled with changing lifestyles and rising per capita income, due to surge in oil prices, has encouraged consumers to switch to healthy breakfast alternatives. This has lead to the growth of the breakfast cereals market, which forms the largest part of the food component of the sector in Gulf countries.” 86

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INDUSTRY FOCUS HEALTH FOODS

foods and beverages in the United Arab Emirates (UAE) and Kingdom of Saudi Arabia (KSA) markets. GROWING CATEGORIES Health beverages have been in the global market for more than a decade. Though it started out as a niche category, it has now joined the mainstream global beverage market due to its rapid expansion. The functional beverages in the global market are clearly segmented into sports and performance beverages, energy drinks, enhanced fruit juices, single serve fruit juices, ready-to-drink teas, soy beverages and enhanced water. Health beverages in the GCC market are also segmented in the same way. In the Gulf market, the sports and energy drinks market is also the fastest growing segment, followed by malt-based health beverages segment. Since the sports and energy drinks segment and the soy beverages are relatively nascent, there are currently no defined regulations existing to govern them, but still the market is growing at double digits in both areas and expected to grow exponentially within the forecast period. Rising consumer awareness coupled with changing lifestyles and rising per capita income due to surge in oil prices have encouraged consumers to switch to healthy breakfast alternatives. This has lead to the growth of the breakfast cereals market, which forms the largest part of the food component of the sector in Gulf countries. Moreover, overall, the growth of such functional foods segment is favoured by the current change in lifestyles among the masses towards the preference of foods having health and wellness

“In 2009, the health foods market in the GCC stood at approximately US$205 million (QR746 million).” perspective. Ostensibly this is to overcome a sedentary lifestyle – due to both rapid urbanisation and accumulation of wealth – and to counter dietary diseases prevalent in the region. GCC HEALTH FOOD AND BEVERAGE MARKET VALUE In 2009, the health foods market in GCC stood at approximately US$205 million (QR746 million) with a growth rate of 22 to 24 percent for the year 2009. Though the market is at its infancy, and has only a few global

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typically in the UAE and KSA, the total health beverage market is also expected to experience a substantial growth in the future. Apart from flavoured milk and malted health beverages, the rest of the health beverage market is in its infancy and less recognised amongst GCC consumers. Yet the total functional beverages market in GCC countries stood at approximately US$1.8 billion (QR6.6 billion), heralding a growth of 22 percent for the year 2009. The market is expected to consistently grow in double digits during the next five years. In addition, prices are anticipated to follow a similar rising trend in the forecast period. These price hikes will be mainly owing to escalating demand, instigation of many functional variants, rising costs for the raw materials, brand equity, and usage of premium ingredients (see sidebar for more). The sports and energy drinks and malted beverages are priced quite high in the health beverages segment. They are priced at US$1.29 (QR4.7) to US$2 (QR7.3) and US$8 (QR29) to US$13 (QR47.3). The fruit beverages and flavoured milks are priced at a range of US$0.82 (QR2.9) to US$1.50 (QR5.5) per litre.

Srividyaranjani Venkatasubramanian is the research associate for Chemicals, Materials and Foods Practice, South Asia and Middle East, for Frost and Sullivan.

FACTORS INFLUENCING HEALTH FOOD AND BEVERAGE PRICES

players who dominate, with the growing living standards and increasing consumer awareness in the UAE and KSA, this market is expected to experience substantial growth in the future. A large contributing factor in this sector will also be the fact that prices are expected to rise in the coming years, due to both hikes in the prices of raw materials and packaging costs. The price rises in raw material (such as wheat, rye, flour, etcetera) are mainly due to shortages. Other pricing factors include government offering subsidies to the manufacturers and the increasing popularity of economy packs in the case of breakfast cereals, etcetera. Currently, breakfast cereals are quite moderately priced to attract natives of GCC. The average prices of the same are US$1.70 (QR6.2) to US$2.13 (QR7.5) With growing economies and high living standards in the Gulf,

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Flavoured milk • Price may increase with launch of new fortified variants. • High import duties in the UAE leads to price increase. Sports and energy drinks • Price may increase with launch of sugar-free and cola variants. • Price varies across brands depending on the ingredients used. Malted health beverages • Increasing costs for imports and raw materials in turn increases the product price. • Addition of premium ingredients and packaging have greater influence in price rise. Fruit beverages • Increasing costs for imports and raw materials. • Increase in demand from consumers favours the manufacturers to increase the product prices. Breakfast cereals • Increasing costs for raw materials. • Increase in popularity of economy packs increases sales, even though the cost of it is higher respectively.


HOW-TO GUIDE

HOW-TO MARKET your

Business Effectively


how-to guide

Stop Wasting Your Money And Start Marketing Effectively By Kaitlyn Miller

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arketing will always be one of the biggest expenses that a business owner will have. Month by month, marketing incurs costs, which can be a great headache for many business owners. This is because, as much as the business owners want to, they cannot get the return they want from their marketing strategy, be it brochure printing or letterhead printing. However, the key to being effective and profitable is in the return of investment (ROI). As businesses spend regularly on their marketing activities, definitely they would be expecting a return that is equivalent to what they have spent, no matter if it is print brochures or print letterheads. As a wise business owner, you should be focusing on the greatest possible ROI and the maximum benefit that you can

get from your money and effort. What it all boils down to is that marketing is all about ‘paying’ for the means to get you the most profitable clients and prospects. So for every penny spent, you have to get every penny back as profits. If you do not, then your marketing plan will be a total waste of your time, energy and, more importantly, your precious hard earned money. If this is the usual scenario for you when you market your business, it is high time that you fix this problem – the sooner the better. So what can be the easiest thing for you to do to fix this? You can improve on the value for your money in your marketing campaign by using the following steps: Step 1: Measure how you are performing in the market. This means looking at your marketing collaterals and see how they fare with the competition.

“Nowhere does it say that you have to hire salespeople, or buy ideas from them to market your business to your client.” 90

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Step 2: Find out which ones work and which ones do not give you the profit you expect. Step 3: Stop the marketing strategies that do not work and produce more of those that provide you with profitable results, so you will always have the ROI you want from your marketing effort. The bottom line is to stop wasting your precious dollars and start making profits for your business. Do not ride the bandwagon when marketing. Nowhere does it say that you have to put an ad in the Yellow Pages, or set up a costly website in order to gain the profits for your business. Further, nowhere does it say that you have to hire salespeople, or buy ideas from them to effectively market your business to your target clients. The fastest and easiest way to market, and get your desired results is to stop wasting your resources on strategies that do not work. Just stop; and instead invest your money on marketing campaigns that give you the most returns. It may be a big step to turn your back on non-working strategies. But the earlier you stop using them, the earlier it is for you to stop wasting your money and getting the ROI from others that really works.


HOW-TO GUIDE

Common Formatting Mistakes That Will Destroy Your Brochure By Johnray Daniels

T

here are a few grave formatting mistakes that will destroy your efforts for brochure printing. Even brochure templates will not help you solve formatting mistakes if you really do not know about them. There are seven common mistakes that will destroy the design and function of your brochures. Read the mistakes listed below and try to avoid them for your brochure printing. You will save yourself a lot of money, effort and anguish if you do so. Cramming: One very common formatting mistake that a lot of beginners commit when designing their colour brochures is cramming. This is basically the tendency to cram a lot of information into one brochure. This leads to a brochure with content that appears ‘overloaded’ with little space between the text. When this happens, readers will be immediately be overwhelmed by the brochure even if they have not read it yet. To avoid this from happening, always try to compose a colour brochure with the barest and most important information that you need to convey. You do not have to

“There are many new and creative font styles to use. The problem though is that using too many makes a custom brochure look cluttered and amateurish. It is best to always use one, or at the maximum two, different font styles for your colour brochures.” explain everything on it. You can just show the best and important details to readers in your brochure and then lead them to other resources, which have more information (such as a website). Try to hire a writer if you can so that your brochure content will be as concise and as short as possible to avoid cramming. FONT STYLES: Another common formatting mistake that

a lot of people commit is the use of too many font styles. There are many new and creative font styles to use. The problem though is that using too many makes a custom brochure look cluttered and amateurish. It is best to always use one, or at the maximum two, different font styles for your colour brochures. Use more than that and your design and theme might already be too messy.

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how-to guide

“With headings and subheadings, people

can read more quickly, as they can organise the facts they are reading into categories and headings. This makes for an easier time reading and remembering the brochure.” So rein in your creativity and use only fewer font styles. OVER-USE OF FEATURES: Another common mistake that people commit is using italics, underlining and bolding text too frequently. Employing too much of these in your content can be detrimental to the look of your colour brochure. These formatting options are only needed to give certain words or phrases an emphasis. Overuse it and you will only make a mess out of your colour brochures. So try to minimise these formatting options until they are actually needed. ZERO READER FRIENDLINESS: It is a fact that many brochure writers and designers have a tendency to compose large paragraphs in a bid to fit all the information in the brochures. The problem with large paragraphs is that they make the text content look blocky, extensive and hard to read. It is best to avoid this when composing your brochure text. Cut different ideas into separate paragraphs and use lists when possible. This should help make the text more engaging and not daunting and boring. BAD LAYOUT: Some designers also forget to use headings and subheadings in their

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brochures. This is a bad mistake to do since it makes the brochure appear as if it is long and boring to read. However, with headings and subheadings, people can read more quickly, as they can organise the facts they are reading to categories and headings. This makes for an easier time reading and remembering the brochure. So make sure you also try to use headings and subheadings when it is your turn. Too much centre ALIGNMENT: The centre align is a great paragraph alignment and many people often like all

their titles, headings and other special text aligned to the centre. However, if you overuse it on the majority of text, titles, and images this will lead to an overall unappealing design, while also making the text look misaligned on the edges. Avoid the use of too many centre alignments and only use it when necessary. wrong COLOUR choices: Always check your text colours against unfavourable background colours. Sometimes, the survival of the brochure is dependent on the accurate blending of colours, as this makes for memorable and powerful business brochure printing. Try to avoid unpleasant text colours and mix and match your text with the proper primary and secondary colours. Do not be afraid to try to learn all these using tutorials. The more you learn the better your chances are at designing colour brochures that make an impact. These are the seven key formatting mistakes that can destroy good brochure printing. Just follow the tips above and you will minimise the chance of them destroying your colour brochures designs.

“Always try to avoid unpleasant text colours and mix and match your text with proper primary and secondary colours. Do not be afraid to try to learn using these tutorials. The more you learn the better your chances are at designing colour brochures that make an impact.”


TECH TOOLS

TECH

FOR EXECS

The latest in tech’ design and innovation for the busy executive. BETTER THAN iPHONE?

With its monstrous 11-centimetre touch screen and a one gigahertz (GHz) processor, the new HTC HD2 is twice as fast as some smartphones. Showcasing Windows Mobile 6.5, the HTC features improved web-browsing efficiency and My Phone, a free web-based service that automatically backs up and syncs contacts, photos and text messages. The phone conveniently locates all interactions like email, SMS, phone logs, and even Facebook updates in one place – next to the photo of the person with you want to stay in touch with. HTC HD2 makes it simple to go from reading an email to calling the sender, and if you need to contact more than one person, just tap next to the images of everyone to create an instant conference call. Available in Qatar for approximately US$680 (QR2477). www.htc.com

TAKING TECH’ STYLE UP A NOTCH

The iMac line has long been the pinnacle of refined desktop computing, and if you are considering purchasing a Macbook Pro, and portability is not an issue, you may be better off with the new iMac Core i3 instead. Externally, the new iMac looks the same as the previous generation, but if Apple is to be believed, it is almost 50 percent faster than its predecessor. With its 54.6-centimetre glossy glass and aluminium display, it offers great viewing angles and excellent colour reproduction. The iMac line has solid green credentials too – it meets stringent Energy Star 5.0 requirements and features mercury-free displays made with arsenic-free glass. iMac uses PVC-free components and cables, and uses highly recyclable materials. Available in the Middle East priced from approximately US$1199 (QR4365). www.apple.com

A LITTLE ACCESSORY WITH A LOT OF KICK The new Magic Trackpad is the first multi-touch trackpad to work with a Mac desktop computer and uses the same technology as that on the Macbook Pro. The wear-resistant glass surface supports a full set of gestures (such as two-finger scrolling, pinching to zoom, rotating with your fingertips, and three-finger swiping), giving you a new way to control and interact with what is on your screen. The entire surface is a button that clicks, so it can be used in place of a mouse, or in conjunction with one on any Mac. Designed to sit flush with the Apple wireless keyboard, the trackpad uses Bluetooth technology, eliminating the need for cables. Available in Qatar for approximately US$69 (QR250). www.apple.com

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LIFE AND STYLE

Product Of The Month FOR GROWN-UPS ONLY If you do not have a den of your own yet, this is as good a reason as any to set some space aside. The Ultimate Gaming Chair deserves a room far away from the hustle and bustle of family life, because, quite frankly, it is packed with features that have to be relished over and over again. To start off, there are twelve vibration motors throughout the chair that are synchronised with games action. Any type of gaming accessory will likely work with the chair, including steering wheels and custom controllers. This includes PS2, Xbox, Gamecube, PC, Mac, Wii, PS1 and XboxLive. For audio only, you can also use your iPod, PSP or generic MP3 player. Use your own headphones, or plug the chair into your home stereo system for the full surround experience. Made of leather, the chair features an adjustable headrest, leg rest and even a beverage and remote control holder. Available in the Middle East for approximately US$400 (QR1500). www.UltimateGameChair.com

CREATIVE SNAPS The market is filled with digital cameras, but for a model that is easy to use and does everything you need it to, the new Samsung ST5000 and ST60 models are your best bet. The ultra-slim ST5000 features an 8.9-centimetre-wide video graphics array (WVGA) active-matrix organic light-emitting diode (AMOLED) touch screen and an oversized lens with a 7x optical zoom. The ST5000 shoots pictures in 14.2 mega pixels, ensuring clean, crisp images every time. Meanwhile, the ST60 comes with new image effects and photo styles, such as Vivid, Forest, Retro, and Classic, allowing the user to add a touch of creativity of their own. The new DeFog Clear/Fog Lifting option allows the camera to cut through the haze and take clear photos. The ST60 also offers high-definition video recording. Both Samsung cameras are now available in Qatar. The ST5000 is priced at approximately QR1000 and the ST60 is approximately QR870. www.samsung.com

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LIFE AND STYLE

TOOLS FOR LIVING

THE GPS SYSTEM THAT HAS TEETH Pioneer’s all-in-one multimedia box is the best way to add digital horsepower to your car. With global positioning system (GPS) navigation that can be upgraded to receive traffic data, DVD and multimedia playback and iPod integration, the new AVIC-Z110BT is cutting-edge but it also features old-fashioned AM/FM radio. However, it is the secondary features that get it onto our list this month – auto importing of contacts, and voice control of most major functions. Not only does it bring a variety of features to your car, the Pioneer AVIC-Z110BT also provides a quick and easy way to access them. Available in the Middle East for approximately US$1300 (QR4730). www.pioneer.com

KEEP IT CLEAN AND COOL The new Samsung Crystal Air Conditioner is not just a pretty face. Unlike most air conditioners that merely cool you down, the Crystal cools a room while circulating clean, fresh air. This it achieves with its Anti-Virus filter and an evaporator that is 1.6 times sturdier than the typical filter, as well as a Virus Doctor Micro that helps eliminate microscopic dust mites, mould, and unpleasant odours. The Crystal’s Good Sleep II feature affords energy savings of up to 36 percent, and the precise temperature control system automatically adjusts the ideal temperature and humidity to allow comfort while you sleep. But what makes the Crystal perfect for the Middle East is its Ultra Tropical Rotary (UTR) Plus compressor, which quickly cools a room even in a severe climate. The UTR Plus will maintain its performance even when the day hits a scorching 60 degrees Celsius. Available in the Middle East at AED2299 (QR2278) for the 1.5-tonne model, and AED2499 (QR2476) for the 2-tonne model. www.samsung.com

A PROJECTOR TO PLAY WITH Although the new BenQ is billed as an educational projector perfect for classrooms, we think it is a nifty little gadget for the home and office as well. Four models have been launched in the Middle East, offering a high quality and interactive experience for teachers looking to inspire students, managers hoping to encourage sales staff, or football fanatics analysing the game with friends. The MP780 ST model includes the BenQ PointDraw technology, with calibration-free and whiteboard-free interactive pen, 3D-readiness and built-in speakers, allowing the user to point, draw and doodle on any projected surface. The MP778 and MP780 ST both feature USB display and a USB reader, an integrated mic and a large 1.6:1 zoom ratio. The projector can also be used to share presentations and images and watch videos. As suitable for a small room as for a large auditorium or boardroom, the BenQ projector is now available in the Middle East from approximately US$2099 (QR7640). www.BenQ.co.ae

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LIFE AND STYLE

By Barry O’Sullivan

Image courtesy of Andrew Fallon.

Gaelic football, one of the most popular spectator sports in Ireland, is believed to have descended from ancient Irish football known as caid. Along with hurling, it is part of a unique tradition of sports organised and promoted by the Gaelic Athletic Association (GAA), Ireland’s largest sporting organisation, with close to a million members. What makes the GAA so unique in the modern world is that in a sporting society dominated by football and rugby, it has managed to maintain the status of Gaelic football and hurling as Ireland’s number one and number two sports, respectively. Making this achievement all the more remarkable is the fact that the GAA is an amateur organisation and those involved donate their time and effort for the sheer joy of the game. Gaelic football is played with a round leather ball on a rectangular pitch, similar to that of rugby, with H-shaped goals at each end. The winning team is the one that scores the highest number of points, achieved by kicking or striking the ball with the hand through the goals. Teams consist of 15 players and they move the ball up the pitch with a combination of carrying, soloing (dropping and then toe-kicking the ball upward into the hands), kicking, and hand-passing to teammates. Increasing in popularity, the sport is played in all four corners of the globe – from Australia and Asia, to South America and the Middle East – and not only by those with Irish roots and heritage. In Qatar, the growing contingent of Irish expatriates led to the formation of Gaelic football club, Oryx na hEireann, in 2004. Since its inception, the club has gone from strength to strength, competing in and winning tournaments in Oman, Bahrain, Abu Dhabi and Dubai, culminating in it becoming the first team from the Middle East to win the Dubai Gaelic Games in 2010, beating teams from the Middle East and Ireland. This year saw the club expand at an exceptional rate, with the addition of a second men’s team and two ladies teams, also travelling and competing in tournaments throughout the region. So popular is the sport in Qatar that the club expects to add a third men’s team this year.


LIFE AND STYLE

Image courtesy of Andrew Fallon.

Key to the GAA’s success and popularity is its open-door policy for newcomers and anyone wishing to try their hand at native Irish sports. All levels and types of athletes and participants are welcome to train with the club, whether to get fit or make some social contacts.

Qatar’s GAA is a non-profit organisation run by volunteers and currently sponsored by a number of leading local businesses including Kentz Engineers and Constructors, Doha Rugby Club, Mercury Engineering, Davis Langdon, Primepower, WJ Groundwater, Sepam, and the Qatar Irish Society. The GAA is open to new sponsorships in 2011.

The Gaelic football team trains from September to February, every Tuesday night at the Doha Rugby Club in Soudan South. Although it is free to train with the team, interested participants need to join the Doha Rugby Club as social members in order to use the facilities. For more information, contact pro.qatar.asia@gaa.ie

“Since the club’s inception, it has gone from strength to strength, competing in and winning tournaments in Oman, Bahrain, Abu Dhabi and Dubai, culminating in it becoming the first team from the Middle East to win the Dubai Gaelic Games in 2010.” TheEDGE

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La

DOLCE VITA Aah, Roma. Where to begin in a city filled with two millennia of history? Let our picks of The Eternal City’s top attractions be your guide to your own Roman Holiday. By Megan Masterson

O

nce the seat of the mightiest empire in existence, the eternal city of Rome is spread out like a living museum. Watch the centuries peel back to reveal a history crammed with gladiators and Mussolini, Michelangelo and Fellini. Rome’s timeless magic lies in its ability to blend old with new. Empires may have risen and fallen, but Rome remains.

The Colosseum

Almost 2000 years old, this enduring symbol of ancient Rome clings to its foundations despite years of pillaging and earthquakes. Once the proud home of chariot races, it is where gladiators used to fight each other – and wild animals – to the death, all in the name of entertainment. The cages in which both gladiators and animals were kept can still be found under the enormous structure. Shaped like a modern-day football stadium, it can seat up to 45,000 spectators, has four storeys and is almost 50 metres high.

The Pantheon

The stately Pantheon, the burial place of Italy’s first two kings as well as Renaissance artist, Raphael, is one of the world’s most inspiring architectural designs. Built as a temple to the gods in 120AD, its perfectly proportionate dome is more than 43 metres in diameter (by comparison, the dome of the White House in Washington is only 29 metres

in diameter), and rests on sturdy marble columns. The only light source flowing through the central oculus was used by the Romans to measure time (with the aid of a sundial) and the dates of equinoxes and solstices. The Pantheon is probably one of the most intact pieces of Roman architecture in the world, having somehow survived 20 centuries of invasion, erosion and decay.

The Spanish Steps and Piazza di Spagna

In the 18th century, Italy’s most beautiful women and men would gather at the famed Spanish Steps in the hopes of being chosen as an artist’s model. Today, the steps attract thousands of tourists who enjoy the beautiful surroundings (the best time to visit is in May when the steps are decorated with pink azaleas). Built in 1725, the steps elegantly curve their way from the Piazza di Spagna to the Church of Santa Trinit dei Monti, a beautiful pastel-tinted French church. At the foot of the steps lies Bernini’s boat-shaped Barcaccia fountain, making this area the perfect spot to stop and take a breather.

Trevi Fountain (Fontana di Trevi)

The tiny Piazza di Trevi has been immortalised through this fountain built for Pope Clement XII. The statues adorning the fountain represent Abundance, Agrippa, Salubrity, the Virgin and Neptune guided by two


LIFE AND STYLE

tritons. As everyone knows, tossing a coin into the fountain is supposed to guarantee a return trip to Rome, but as this is what every tourist pushes and shoves to do, we suggest you buy a gelato and stand back to peoplewatch instead.

St Peter’s Basilica (Basilica di San Pietro)

Above the site of St Peter’s tomb lies the overwhelming Basilica, filled with notable sculptures such as Michelangelo’s Pietà (protected by bulletproof glass since the attack of 1972) and Arnolfo da Cambio’s bronze statue of St Peter, its foot worn down by the constant flow of pilgrim’s kisses. Resting above the papal altar is Bernini’s Throne of St Peter. Special permission has to be obtained to view St Peter’s tomb in the Necropolis tomb, which lies one level below the Vatican Grottoes, where other papal tombs can be found.

Basilica di San Giovanni

Built in the fourth century by Constantine the Great, this was the first church built in Rome and is the cathedral of the diocese of Rome, ranking above all other Roman Catholic churches, even St Peter’s Basilica. It is the

official ecclesiastical seat of the Pope and is where he celebrates Mass on certain religious holidays. Inside are several important relics, a 13th century cloister, an ancient baptistery, a high altar that may only be used by the Pope, and a cedar table said to have been the one used by Christ at the Last Supper. Across the street is another important pilgrimage site, the Palace of the Holy Steps, believed to be the 28 marble steps originally at Pontius Pilate’s villa in Jerusalem that Christ climbed the day he was brought before Pilate. They have been in Rome since 1589.

The Vatican Museums

Throughout nearly 3000 years of history, Rome has created and produced innumerable masterpieces and artifacts that are now preserved in museums such as the Vatican Museums. These consist of about 12 complexes and over 1300 rooms. You will not be able to see everything in one afternoon, but the most important ones include the Sistine Chapel (featuring its famous ceiling painted by Michelangelo), the Rooms of Raphael, the Gallery of the Maps, the Gallery of Tapestries, the Octagonal Courtyard and the Belvedere Torso.

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EVENTS AND CONFERENCES

SEPTEMBER 26 – 27 RETAIL MANAGEMENT CONFERENCE Hyatt Regency Dubai, United Arab Emirates

Retail Management will help attendees integrate and execute a robust retail strategy to improve operations and margins. The event will allow participants to explore store design, in-store marketing, and category management. Find out how best to manage shelf space, make accurate decisions that suit the brand and store image, structure a team for long-term results and ensure healthy stock levels. Contact Miss Bernadine for further details at BernadineM@marcusevanskl.com.

www.marcusevans.com

SEPTEMBER 26 – 27 URBAN DRAINAGE, SEWERAGE AND IRRIGATION CONFERENCE Intercontinental Hotel, Muscat, Oman

The perfect opportunity for government officials, professionals and experts in urban development to listen to case studies and expert opinions on strategic drainage, sewerage and irrigation management. Delegates will explore issues such as engineering values, strategic cost planning in upgrading infrastructure, and how to benefit from storm water management. Benchmark best practices and gain insights into the latest technology. Contact Miss Bernadine for further details at BernadineM@marcusevanskl.com.

www.marcusevan.com

SEPTEMBER 28 – 29 LEVANT DESALINATION ASSOCIATION CONFERENCE The Cham Palace, Damascus, Syria

This conference will dissect the overall theme of Water Reuse and Desalination: Experience and Opportunity. Structured with expert presentations and an open forum, issues covered will include the cost effective solutions of desalination and water reuse technologies, how the reuse of wastewater can reduce the need for allocation of fresh water, and how to promote water demand management to ensure sustainability of water resources.

www.levantdesal.org

SEPTEMBER 28 – 29 MIDDLE EAST AND NORTH AFRICA NUCLEAR CONSTRUCTION CONFERENCE La Royal Meridien Beach Resort and Spa, Dubai, United Arab Emirates

Discover how to mitigate risk and maximise efficiency in nuclear construction projects. Experts will examine the role that nuclear energy has to play in each region, analyse global nuclear markets and illustrate how to work within emerging regulations and develop a labour force to deliver results timeously. Also covered will be where to best situate a power station in light of risks and required infrastructure, and how to navigate the obstacles of a new nuclear build.

www.nuclearenergyinsider.com/mena/

SEPTEMBER 27 – 28

SEPTEMBER 29 – 30

THE FIRST INTERNATIONAL CONFERENCE FOR DEVELOPMENT AND REAL ESTATE INVESTMENT Sheraton Damascus Hotel, Damascus, Syria

INFORMATION TECHNOLOGY LEADERS MENA SUMMIT Hilton Hotel, Abu Dhabi, United Arab Emirates

An ideal event for real estate developers, agents and brokers, architects, property management companies, and engineering consultants, among others. Topics include real estate sector reforms in Syria, the legislative and regulatory infrastructure required for investment, and development opportunities. Attendees will be able to engage in discussions, exchange ideas, generate sales, build and develop new business opportunities, build brand image and network with potential clients and industry peers.

www.bizdev-sy.com/intro.php

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A popular conference for business executives who want to understand how technology can transform their businesses. The agenda includes business and info IT alignment, effective IT leadership through strategic planning, value generation, dealing with declining budgets, and insight into new areas of growth. Join panel discussions, workshops and luncheons to network with IT directors and managers, managing directors, chief information officers and chief financial officers.

www.itleadersmena.com


CONSTRUCTION AND TENDERS

QATAR PROJECTS UPDATE TAQA EYES QATAR AND IRAQ Saudi Arabia’s industrialisation and energy services company, TAQA, is reportedly considering investing US$1.6 billion (QR5.8 billion) in pipelines and US$133 million (QR484 million) in offshore platforms in Qatar and Iraq. TAQA officials told a Saudi newspaper that they were considering investing in Qatar’s gas industry and Iraq’s oil industry, having already invested SAR500 million (QR485 million) in Saudi Arabia’s offshore oil and gas platforms. Interest has increased since one of TAQA’s main partners, Italian oilfields services company, Saipem, won the US$10 billion (QR36 billion) to develop fields in southern Iraq. FIRE PROTECTION AT THE GATE Promat Middle East has supplied fire protection products to Doha’s mixed use development, The Gate. Cafco 400 is a spray-applied wet mix product designed to provide fire protection for structural steel, and Promatect-250 is a lightweight cladding board, which offers stability and fire resistance. Promat also supplied Supalux fire-resistant building board for certain mechanical areas. The products offer 120 minutes of fire protection. LEGAL DOUBTS PLAGUE TENDER AWARD OF CYPRUSQATAR PROJECT Doubts have been raised about the government’s ability to meet its deadline on the Cyprus-Qatar luxury hotel project site in Nicosia, after news broke that a legal appeal may be lodged with the Tenders Review Authority over an unusually low offer submitted by the winning bidder. Lawyers acting for one of the four losing bidders have written to the Finance Ministry highlighting that the winning bid – submitted by Antonis Loizou and Associates – of EUR4800 (QR22,210) was “unusually low” compared to the EUR30,000 (QR139,000) that other bidders offered. Lawyers suggested that the fact that Loizou himself had already made a valuation in a May 2010 press article should have ruled his firm out of the bidding process. ASHGHAL INVITES BIDS FOR ROAD WORKS Qatar’s Public Works Authority (Ashghal) has invited firms to submit bids for two contracts aimed at addressing road congestion in Doha. The first project involves carrying out improvement works in the Al Wakrah municipality and the construction of temporary roads in Zones 90 to 95. The second involves the construction of temporary and permanent roads and sidewalks, traffic signs, road markings and surface water drainage in various locations around Doha. Both projects are part of plans to invest US$20 billion (QR72.8 billion) in new roads and related drainage and infrastructure in the country in the next five years. Bids must be submitted by September 21. EZDAN’S FUTURE LOOKS BRIGHT Qatar’s Ezdan Real Estate, the country’s largest property developer by market value, expects to complete projects that are currently underway and worth US$5.49 billion (QR20 billion) in the next three years. The company is also reportedly on the brink of concluding a deal with partners to own a QR1 billion stake in a Malaysian real estate fund, which is expected to be listed on the Malaysian bourse by the end of 2010.

102 TheEDGE

TANWEEN MANAGING PROJECTS WORTH QR80 BILLION Tanween, a development management unit of Barwa Real Estate, is managing projects worth an estimated QR80 billion. The unit, previously known as Quality International Qatar, is managing Qatari Diar’s Wakra Aqua Park project, and is in talks with the company to manage further projects. Tanween is also managing an as-yet-unnamed project in Saudi Arabia, as well as five of Barwa’s local projects. ROADWORKS BEGIN IN AIN KHALID AREA Qatar’s Public Works Authority (Ashghal) awarded a US$14 million (QR51 million) contract to local company, Aswan Trading and Contracting, to complete a road improvement project in the Ain Khalid area. Work began recently on the project and it is expected to be completed in 2012. A PARTNERSHIP FOR ASIA TOWERS Ezdan Real Estate has partnered with Qatar General Insurance and Reinsurance Company and Al Sarri Trading to develop the QR2.5 billion Asia Towers project. The project, one of the largest in Qatar, comprises four residential towers in Doha’s West Bay area. Each of the towers will be 55 storeys and will include 1600 residential units. The development will also include commercial and entertainment facilities and hotel apartments. Asia Towers is expected to be completed in three years. QATARGAS 4 ON SCHEDULE Royal Dutch Shell has been quoted by Reuters as saying that construction at the Qatargas 4 liquefied natural gas (LNG) and the Pearl GTL project will be completed by the end of 2010. Shell holds 30 percent of the LNG project worth US$8 billion (QR29 billion), which, when complete, will cement Qatar’s position as the world’s largest LNG exporter, with an annual production capacity of 77 million tonnes per annum. Shell reportedly delayed the start of project as contractors were struggling to keep up with the pace of development in Qatar’s gas industry.


CONSTRUCTION AND TENDERS

QATAR TENDERS SUPPLY OF FERTILISER Description: Supply of organic fertiliser for municipality. Closing date: September 19 Client: Ministry of Municipal Affairs and Agriculture Phone: +974 4437 8143 Fax: +974 4495 443 9360 Email: ctc@qatar.net.qa Website: www.ctc.gov.qa Tender no: 49/2010-2011 Bid bond: QR15,000 Tender documents can be obtained from: Central Tenders Committee, Rawabi Street, Al Muntazah, Doha. NAVAL BOATS FOR PATROL Description: Supply of eight naval patrol boats for ministry department. Closing date: September 20 Client: Ministry of Environment Phone: +974 4437 8143 Fax: +974 4495 443 9360 Email: ctc@qatar.net.qa Website: www.ctc.gov.qa Tender no: 569/2010-2011 Bid bond: QR56,000 Tender documents can be obtained from: Central Tenders Committee, Rawabi Street, Al Muntazah, Doha. LARGE-SCALE SUGAR SUPPLY Description: Supply 800,000 sacks of soft crystal type, premium white sugar. Closing date: September 20 Client: Central Tenders Committee Phone: +974 4437 8143 Fax: +974 4495 443 9360 Email: ctc@qatar.net.qa Website: www.ctc.gov.qa Tender no: 566/2010-2011 Bid bond: QR1.95 million Tender documents can be obtained from: Central Tenders Committee, Rawabi Street, Al Muntazah, Doha. DOHA ROAD IMPROVEMENT WORKS Description: Construction of temporary and permanent roads, including site clearance, earthworks, flexible surfacing, traffic signs and road markings, water works, street lighting and kerbing and footways. Closing date: September 21 Client: Public Works Authority

Phone: +974 4495 000 Fax: +974 4495 0777 Email: info@ashghal.gov.qa Website: www.ashghal.gov.qa Tender no: PWA/GTC/029/10-11 Bid bond: QR3.5 million Tender documents can be obtained from: Contract Affairs, Public Works Authority (Ashghal), Doha. ROAD IMPROVEMENT WORKS Description: Construction of temporary and permanent roads in area of Al Wakrah and within boundaries of Zone 90 to Zone 95. Closing date: September 21 Client: Public Works Authority Phone: +974 4495 000 Fax: +974 4495 0777 Email:info@ashghal.gov.qa Website: www.ashghal.gov.qa Tender no: PWA/GTC/030/10-11 Bid bond: QR1.32 million Tender documents can be obtained from: Contract Affairs, Public Works Authority (Ashghal), Doha. CLEANING SERVICES Description: Cleaning services for the building of the Ministry of Energy and Industry. Closing date: September 26 Client: Ministry of Energy and Industry Phone: +974 4437 8143 Fax: +974 4495 443 9360 Email: ctc@qatar.net.qa Website: www.ctc.gov.qa Tender no: 51/2010-2011 Bid bond: QR30,000 Tender documents can be obtained from: Central Tenders Committee, Rawabi Street, Al Muntazah, Doha. CONSTRUCTION AND MAINTENANCE OF SEWERAGE SCHEME Description: Construction of manholes, inspection chambers and shallow chambers to connect to existing sewer network. Contract includes construction, testing and maintenance. Closing date: September 27 Client: Public Works Authority Phone: +974 4495 000 Fax: +974 4495 0777 Email: info@ashghal.gov.qa Website: www.ashghal.gov.qa Tender no: PWA/STC/038/10-11 Bid bond: QR12,000

Tender documents can be obtained from: Contract Affairs, Public Works Authority (Ashghal), Doha. SUPPLY OF VEHICLES FOR GARBAGE COLLECTION Description: Supply of 32 garbage collection vehicles, all with varying collection capacities. Closing date: September 27 Client: Ministry of Municipal Affairs and Agriculture Phone: +974 4437 8143 Fax: +974 4495 443 9360 Email: ctc@qatar.net.qa Website: www.ctc.gov.qa Tender no: 570/2010-2011 Bid bond: QR500,000 Tender documents can be obtained from: Central Tenders Committee, Rawabi Street, Al Muntazah, Doha. GARDEN MAINTENANCE Description: Maintenance and caring works for grassed areas and irrigation at fourth Area 31 site. Closing date: September 27 Client: Ministry of Municipal Affairs and Agriculture Phone: +974 4437 8143 Fax: +974 4495 443 9360 Email: ctc@qatar.net.qa Website: www.ctc.gov.qa Tender no: 573/2010-2011 Bid bond: QR180,000 Tender documents can be obtained from: Central Tenders Committee, Rawabi Street, Al Muntazah, Doha. CONSTRUCTION OF MOSQUES AND IMAM HOUSE Description: Construction, completion and maintenance of mosques and imam house for Ministry of Awqaf and Islamic Affairs. The project comprises three mosque complexes in three different locations and includes all associated finishes, services and external works. Closing date: September 28 Client: Public Works Authority Phone: +974 4495 000 Fax: +974 4495 0777 Email:info@ashghal.gov.qa Website: www.ashghal.gov.qa Tender no: PWA/GTC/031/10-11 Bid bond: QR650,000 Tender documents can be obtained from: Contract Affairs, Public Works Authority (Ashghal), Doha. TheEDGE

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SUBSCRIPTION

SUBSCRIPTION FORM 2010 TheEDGE is Qatar’s dedicated monthly business magazine.

TheEDGE incorporates a mix of industry news and analysis, in depth features, special interviews with key business decision makers, economic insight and market activity reports, and tips for how you can improve your day-to-day business operations. TheEDGE will not be available on the news stands, but will be delivered straight to the door of the targeted business community. To ensure you keep up-to-date, with what is happening in Qatar’s business landscape, fill in the subscription form (below) to receive TheEDGE on a monthly basis. Subscription is FREE (in Qatar). Forms are to be addressed to the Subscriptions Department at: TheEDGE Subscriptions Department Firefly Communications 11th Floor, Jaidah Tower PO Box 11596 Doha, Qatar

Last Name : First Name: Address: Company: Designation: PO Box: Area Code: City: Country: Tel: Email: Date and Signature: 104 TheEDGE


The Edge - Sep 2010 (Issue 14)  

The Edge is a business magazine targeting ambitious professionals operating within Qatar’s multi-sector business landscape. The Edge is read...

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