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CONTENTS

w w w. t h e e d g e - m e . c o m

2011

CONTENTS ON THE COVER

Businesses and private individuals continually face threats from cyber criminals and their secret weapons in the fight to crack computer users’ security. Mark van Dijk files an up-to-date report on this subject and provides tips to business owners to prevent intrusion into their systems by hackers. (Page 48)

FINANCE & ECONOMICS .36. market watch

World and local markets, commodities and reinsurance update.

.38. Inside edge

Qatar’s banking sector scrutinised.

.40. special report

The Qatar economy’s rapid growth.

.44. ECONOMIC BAROMETER

The effect of credit ratings agencies on the global economy.

FEatures .56. FEATURE STORY

Erika Widén on Qatar’s ‘green building’ capital.

.60. BUSINESS INTERVIEW

Exclusive interview with GE’s CEO and president Nabil Habayeb.

.64. ON THE PULSE

Media transparency vs. GDP.

KNOWLEDGE & EXPERTISE .68. BUSINESS MANAGEMENT

The must-have career paths of the future.

.70. SMALL BUSINESS KNOW-HOW

Using e-commerce to create income for small businesses.

.72. MARKETING & DESIGN Design do’s and don’ts.

.74. LEGAL INSIGHT

Qatar’s Information Protection laws.

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CONTENTS

80 BUSINESS INSIGHT .77. Business Insight Interviews

Incoming CEO for Standard Chartered Bank in Qatar Charles Carlson discusses their mobile device banking application ‘Breeze’, and new Microsoft Country Manager for Qatar, Naim Yazbek, talks about the brand’s operations in the state.

87 REGULARS .06. .07. .08. .16. .18. .20. .23. .30. .32. .83. .88. 2

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from the editor Contributors News Etcetera QATAR IMPACT DOHA DIARY MIDDLE EAST MATTERS ENERGY AND RESEARCH COUNTRY FOCUS SPECIAL FOCUS TRAVEL & LIFESTYLE 10 THINGS


FROM THE EDITOR

FROM PuBlIcaTIons dIREcToR Mohamed Jaidah m.jaidah@firefly-me.com managIng EdIToR Miles Masterson m.masterson@theedge-me.com dEPuTy EdIToR Erika Widén e.widen@theedge-me.com REgIonal salEs dIREcToR Julia Toon j.toon@firefly-me.com +974 66880228 sEnIoR salEs managER Emma Land e.land@firefly-me.com +974 33197446 salEs managERs Pierre Le Bourdonnec p.lebourdonnec@theedge-me.com +974 55997802 Joseph Issac j.issac@firefly-me.com +974 33675301 dIsTRIBuTIon & suBscRIPTIons Azqa Haroon a.haroon@firefly-me.com +974 55692471 cREaTIVE dIREcToR Roula Zinati Ayoub dEsIgn cooRdInaTIon Charbel Najem dEsIgnER Sarah Jabari FInalIsER Michael Logaring PhoTogRaPhER Herbert Villadelrey PRInTEd By Ali Bin Ali Printing Press, Doha, Qatar

THE EDITOR

Clichés about change abound, but the one that first springs to mind is that it is constant. All around us life is always evolving. Perhaps the only aspects that are as enduring as change are the uncertainties we all face about what might actually happen in the future over which we have no sway – and how we personally can affect or influence change over the things which we do control. Perhaps it is fitting then, with all that is so uncertain around us – the ‘Arab Spring’, fragile diplomatic and political relationships, the fragile economies of the United States (US) and Europe, and ongoing natural disasters – this topic was on my mind. It is probably best exemplified though in the economic volatility of current times (as I write this the US and European stock markets are plummeting and the threat of Greek default could still drown the common currency and pull down the whole world’s economy). With so many people suffering from poverty, unemployment and the stress of a future with rapidly decreasing opportunities around the world, these modern times are deeply unsettling to many. Of course, here in Qatar, which was recently announced as the world’s fastest growing economy (see page 40), if the world markets were to really retract (and gross domestic product growth to be slashed by up to 50 percent in some established economies, as some predict), Doha would be largely buffered by its hydrocarbon wealth. Still, in the current age, but especially in an economic sense (as 2008’s downturn so blatantly exposed), everyone is connected and a world financial shift will affect Qatar. Closely tied to the above train of thought, are sovereign and corporate credit ratings, carried by the so-called “big three”

of Standard & Poor’s, Fitch and Moody’s, which many feel carry too much influence. This topic is unpacked and analysed by our economic correspondent Karim Nakhle on page 44. Elsewhere in the issue we look at changes – or at least proposed changes – to policy and legislation that might or will affect the energy sector and construction industry in Qatar on pages 23 and 56 respectively. The former is related to a change of our own. As you will see, we have formed a new section, ‘Energy and Research’, to cover in more regular detail news and issues relating to the sector, among other adjustments to the magazine that we hope you will appreciate. Miles Masterson, Managing Editor

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 11 times yearly to a readership base of more than 7500 professionals, providing advertisers with the needed additional reach and frequency to their most important and affluent audience. theEDGE is an authoritative business resource serving both large and small business operators.

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

theEDGE is printed monthly © 2011 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 Shutterstock and/or iStock Photo.

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CONTRIBUTORS

CONTRIBUTORS

P. 24 James ElwEn Managing Partner McGrigors LLP Law Firm Doha, Qatar

P. 24 Rudi Tscherning Director, Forum on Energy & Env. Law, Qatar University, Doha, Qatar

P. 25 Tad Dritz Marketing Manager Oxford Catalysts Ohio, United States

P.36 Dheeraj Shahdadpuri Analyst Dubai, UAE

P.38 Manjeet Chhabra General Manager, Middle East, Dun and Bradstreet Dubai, UAE

P.40 Matt Ghazarian Editorial Contributor Oxford Business Group Istanbul, Turkey

P.42 Janak Patwari Manager Business Performance, KPMG Doha, Qatar

P. 48 Karim Nakhle Senior Business Strategist Doha, Qatar

P. 52 Rachel Morris Journalist MENA Region Doha, Qatar

P.64 Edward Jameson Senior Business Journalist MENA Region London, United Kingdom

P. 68 Lynda Gratton Professor of Management Practice, London Business School, United Kingdom

P.64 Robert Madronic Marketing Instructor College of the North Atlantic Doha, Qatar

p.64 BRENDA HILL Senior Legal Consultant DLA Piper Doha, Qatar

P. 84 Victoria Scott Journalist Doha, Qatar

featured contributor Mark Van Dijk Mark van Dijk is a Cape Town-based journalist who covers a range of business, from travel and sports writing in Time Out travel guides and the official guide to the 2010 Fifa World Cup, to reports in Global Africa Network’s South African business publications. A former news editor at Independent Online and features writer for South African Sports Illustrated, van Dijk is now deputy editor of Men’s Health in South Africa.

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NEWS ETCETERA


NEWS ETCETERA LIFESTYLE

TO OF THE MONTH PHO

The

E D G E M A G A ZI N E

GREEK AUSTERITY WOES

September, 2011, Athens, Greece: Emboldened by the promise of ever-tougher public austerity measures by their continually beleaguered government, university students – such as this one peaking through a torn banner – protested in the centre of the Hellenic capital late last month. Should the Greek sovereign default come to pass, as many pundits are fearing it now might, it would almost certainly mean their exit from the euro zone and could create a financial domino effect felt around the world, in the form of the much feared ‘double dip recession’. (Image Corbis)

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NEWS ETCETERA

nEws Etcetera QTEl’s E-BIllIng

maKEs an EnVIRonmEnTal ImPacT Starting in October 2011, with the support of ictQatar, e-billing will be enforced by Qatar Telecommunications. By removing the need for hard copy invoicing for thousands of customers, Qtel has already been able to reduce the amount of paper used by the company, as part of its long term goal of becoming a paperless organisation. Paper bills are still available but customers will be charged a fee of QR5 per bill if they wish to continue receiving them and will have to actively reactivate this option every six months. Adel Al Mutawa, executive director, group communications, gave an exclusive statement to TheEDGE, saying: “Qtel is driving the e-Billing initiative as part of our vision for Corporate Social Responsibility, Adel Al Mutawa, executive director, group communications of Qtel, says that the company’s new ‘For Qatar, Hand in Hand’. Our aim electronic billing initiative, the first in the Qatar, is only a is to build sustainable programmes small part of their environmentally friendly policies. in partnership with the community, which will help to make Qatar a greener, more pleasant place to live and work. The e-Billing initiative works in concert with a number of other environmental programmes for Qtel, including efforts to reduce the internal use of paper within the company and our pioneering e-waste recycling programme. Launched in 2010, this programme provides an immediate and convenient disposal and recycling service. The first step was to place ‘drop boxes’ in every Qtel shop and office to encourage customers and employees to recycle mobile phones. We also hosted ‘Big Drop’ days to give the community a way to recycle larger e-waste items. All funds raised by charging for paper bills will go towards expanding this programme. At Qtel, we take our environmental responsibilities very seriously, because we know that we all have a stake in the future health of Qatar. Qtel is taking the lead in moving to becoming a fully paper-free environment, and we are investing in the processes that will ensure continued convenience for our customers. We are very proud that our customers have responded so strongly to our environmental initiatives. To date, more than 40,000 accounts belonging to over 25,000 customers have switched to the e-Bill, and we anticipate more customers moving across in the weeks and months ahead.”

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mshEIREB PRoPERTIEs REcyclIng sysTEm Recently, Msheireb Properties awarded Sweden’s ENVAC company a major contract to install a fully automated waste recycling system for its Msheireb Downtown project in Doha. A representative of Msheireb Properties explained further and exclusively toTheEDGE: “While there are other examples of the technology elsewhere in the Gulf, we believe this is its largest deployment within a development in the Middle East. It is a great example of how we are using advanced technology along with more traditional planning and architectural practices to minimise environmental impacts, and it will encourage occupants of Msheireb Downtown to adopt more environmentally responsive behaviour.” The development of the Msheireb Downtown Doha will be completed in five phases through 2016. The recycling system will start operating in tandem with the handover of the various developments within the project. The technology can handle around 80 percent of household waste, with three vertical chutes installed in each residential building, with inlets on each floor. Each is specially designed to handle organic waste such as kitchen refuse, ‘dry’ mixed recyclables such as glass, plastic, metal, cardboard packaging, newspapers, and residual waste such as wet paper, clothes and other assorted refuse. The system’s automated process uses air as a medium to suck the waste through a steel pipe network to a centralised waste collection terminal. Commercial, retail and residential will have their own dedicated inlets, while supermarkets, hotels and other standalone buildings will also get a dedicated connection to the network. “We are maximising the use of microclimatic effects through utilising wind and sun patterns, maximising water and energy efficiency and reducing carbon emissions across the site,” added the Msheireb spokesperson. “The project is aiming to be the world’s first large scale urban sustainability community.”


NEWS ETCETERA

QaTaR InTERnaTIonal EnVIRonmEnT PRoTEcTIon and susTaInaBlE EnERgy ExhIBITIon and conFEREncE (EcoQ) Qatar International Environment Protection and Sustainable Energy Exhibition and Conference (EcoQ) is an international annual exhibition and conference taking place in Qatar for three days, from 16 to 18 October 2011, at the Doha International Exhibition Centre. The expo will showcase the latest technologies, products on environmental protection and sustainable and renewable energy covering various related sectors such as: solar energy PV, green building, sustainable cities, architecture, recycling technologies, air pollution treatment, eco-friendly transportation, aviation and aerospace, bio-fuel, ecofriendly cooling systems, e-waste, marine protection and reservation and more. In addition, a high profile conference is organised in parallel to the expo to discuss environmental issues from a regional perspective. www.eco-q.org land oF ThE long whITE BusInEss oPPoRTunITy Beset by earthquakes and economic woes, New Zealand has hit the road to drum up business and investment from wealthy Gulf Cooperation Council (GCC) countries. Buoyed by the success of their hosting of the Rugby World Cup 2011, a trade delegation from New Zealand visited Qatar last month in a visit called the ‘Middle East Beachhead’ – a three-day programme organised by New Zealand Trade and Enterprise (NZTE) to help businesses establish themselves in the region. Sectors being targeted by the visit included education, healthcare, information technology (IT) and software, manufacturing, meteorology, professional services and telecommunications. New Zealand does not have an embassy in Qatar, but has established a commercial office in the United Arab Emirates (UAE) and an embassy in Saudi Arabia. New Zealand’s newly installed trade commissioner for the Middle East, Africa and Pakistan, Steve Jones said the GCC is already New Zealand’s sixth largest trading partner and exports to the region grew by 122 percent between 2000 and 2009.“The Middle East region, including Gulf states such as Qatar, clearly presents New Zealand firms with significant commercial opportunities,” Jones said in Doha. Other areas of cooperation with Qatar include ongoing talks on the issue of food security, with New Zealand one of the world’s biggest producers of beef and lamb.

al FaIsal QaTaR acQuIREs

london’s w hoTEl

Al Faisal Holding Company of Qatar recently acquired London’s W Hotel for close to GBP200 million (QR 1.1 billion). HE Sheikh Faisal bin Qassim Al Thani, chairman of Al Faisal Holding Company, said of the purchase: “We are delighted to have acquired this iconic landmark London development. Given its [unique] architectural quality, attractive setting and the strength of the international covenants of Starwood Hotels and Resorts Worldwide and Mars Retail Group, the addition of the W Hotel to the portfolio reflects our clear investment focus on high quality assets in prime locations as we continue to grow the business both locally and internationally.”

The W Hotel in London was recently purchased by Qatari company Al Faisal Holding for GBP200 million (QR 1.1 billion). (Image Getty)

sEPTEmBER IN BrIEF REal ESTaTE TRaNSaCTIONS According to Century 21 Qatar’s recent real estate transaction report, released in September and based on information from the real estate registry in the Department in the Ministry of Justice, nearly QR1.46 billion in transactions was recorded. As observed, the total value of transactions as compared with the previous month was down by approximately six percent. This is directly attributed to the yearly reduced working hours during the holy month of Ramadan and slow overall market movement during the summer season. The transactions are expected to return to normal later this year. During the month of August, the most expensive building was transacted in Umm Salal, valued at QR15 million. The most expensive house was located in Doha, with a transaction value recorded of QR50 million and a residential compound with a value of QR105 million. REgIONS CaRRIERS REaCH 140 mIllION According to The Boston Consulting Group Qatar Airways and Etihad Airways will be ranked in the global top 20 by 2015 and Emirates Airways is to become the world’s largest wide body carrier. Passenger flow to and from the Middle East increased by 45 million passengers over the five-year period from 2005 through 2010, and is expected to increase by another 45 million passengers from 2010 through 2015. QaTaRI dIaR aNd dElaNCEY BUY lONdON 2012 OlYmpICS VENUE Recently, Qatari Diar and Delancey working with Lifschutz Davidson Sandilands, have beaten rival developers in the race to buy the 2800home London 2012 Olympics Athletes Village in Stratford in the United Kingdom (UK). The formal announcement ended rivals Wellcome Trust and PLP’s GBP1 billion (QR5.6 billion) bid to buy the entire Olympic Park. The village was sold for GBP557 million (QR3.1 billion) and features 2818 new homes with potential to build 2000 more. UK culture secretary Jeremy Hunt said “This is a fantastic deal that will give taxpayers a great return and shows how we are securing a legacy from London’s Games.”

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NEWS ETCETERA

2011

events calendar ocToBER DOHA, QAtAr 2-5 MENA Investment Management Forum 2011

5-8

International Furniture and Décor Exhibition (INFDEx)

10

Second Islamic Conference for Financing

10-12

7th Annual HSE Forum in Energy

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Asset Integrity Management in Oil and Gas and Risk Management

16-18

Qatar International Environment Protection Exhibition (ecoQ)

16-19

Finance and Investment Exhibition

17-19

Doha Exhibition Transport and Rail

18-20

2nd Annual Global Petrochemicals Technology Conference

24-25

Air Power Middle East

25-29

Doha Tribeca Film Festival

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nEws In QuoTEs “Our lending capacity of...US $400 billion looks comfortable today, but pales in comparison with the potential financing needs of vulnerable countries.” Christine Lagarde, the new head of the International Monetary Fund, warning in late September that its emergency bail-out fund may not be adequate to deliver the scale of the support required by cash-strapped states in the near future.

“I have spent eight years with the network. We have been talking in this part of the world about change, about presidents who stay for decades in their posts. I thought maybe it is good to give an example as well, while the network is at the peak of its performance. It’s the right moment.” Outgoing Al Jazeera television network director general Waddah Khanfer on allegations that he was forced out due to political pressure.

“This year’s meeting is held amidst local, regional and international circumstances the Arab nations are facing. The most prominent among them is the developments in the Palestinian issue, particularly the stumbling of the Middle East peace process.” Qatar Prime Minister and Foreign Minister HE Sheikh Hamad bin Jassim bin Jabor Al Thani, chairman of the 136th session of the Arab League Council’s Ministerial meeting, commenting at the recent gathering.

“In the latest survey, Qatar has been recognised as the leading financial centre in the Middle East for the first time by the GFC Index. Qatar’s latest rise of 39 points in the GFC Index to achieve a total of 636 points, also maintains its existing ranking of 30th.” Statement from an annual report from the Global Financial Centre’s Index (GFCI), which was published on 26 September, 2011 and is sponsored by the QFC Authority. The report first published in 2007, ranks cities globally, according to their importance in the financial services sector.


NEWS ETCETERA

wEBsITE rEvIEWS

www.QaTaRsalE.com This website is essentially a powerful search engine for anyone seeking a used or new car or car rental service in Qatar. Basic and advanced search engines allow you to look for any kind of car, make, model, year, etcetera, available for sale, in not only Qatar but also through linked sites in Saudi Arabia and now Lebanon. On the site you can sign up for a free SMS service, which according to the site, is first for Middle East, to get the latest matches to your search keywords. www.maRKETwaTch.com MarketWatch, published by Dow Jones, tracks the pulse of markets for investors with more than 16 million visitors a month. The site covers business news, personal finance information, real-time commentary and investment tools and data, with journalists generating hundreds of stories, videos and market briefs a day from 10 bureaus in the United States, Europe and Asia.

wEB AND TEch NEWS BlacK haT aBu dhaBI With the main event recently held in the United States for the 15th consecutive year, The Black Hat Briefings are a series of highly technical information security conferences that bring together thought leaders from all facets of the information security world. Also held in Europe and Asia since 2000, the second regional version of this event will be held in Abu Dhabi in the United Arab Emirates from December 12 to 15. Black Hat is a premiere event for elite security researchers and the best security trainers to find their audience. www.blackhat.com QTa wEBsITE goEs moBIlE The Qatar Tourism Authority has launched a mobile version of its website, giving residents and visitors immediate access to tourist information about the country. The website, which can be accessed through a mobile browser is designed specifically for smart phones, so travel information is always available no matter where you are. Like the main site, the mobile site also has information about local tourism operators as well as the latest news from the QTA in a simple, easy-to read-format. m.qatartourism.gov.qa FacEBooK and sPoTIFy TEam uP

www.VIsualIzE.mE Recently launched and still in trial or ‘beta’ format, the creators of this unique website believe that the traditional text resume or curriculum vitae (CV) is boring, lengthy and long overdue for a makeover, so they have created a website that takes any standard CV and turns the information into easy-to-digest graphics, tables, pie charts etcetera.

TEch gadgET:

BLACKBErrY

sTaRlInK launchEs ThE nEw BB9810 Starlink has launched Blackberry’s latest handset, the Blackberry 9810, which is the second generation of the popular Blackberry Torch. This smartphone is similar in appearance to its predecessor, combining BlackBerry’s QWERTY keyboard design with a high-resolution touchscreen. The 9810 is powered by the new BlackBerry 7 OS and offers liquid graphics, an enhanced BlackBerry browser, voice-activated universal search, support for near field communication (NFC), and additional apps. www.starlinkworld.com

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Spotify CEO Daniel Ek makes an appearance following a keynote address by Facebook CEO Mark Zuckerberg at the Facebook f8 conference on late September in San Francisco, California in the United States. His appearance and an official announcement cemented rumours that the popular music website was to collaborate with Facebook, tapping into its vast market of more than 800 million users and integrating the social network with streaming music. (Image Getty).


QATAR IMPACT

DOHA TO BENGHAZI When the ‘Arab Spring’ as it has become known, began blooming in early 2011, asks Doha-based news anchor Kamahl santamaria, who would have thought Qatar would be playing a leading role on the military, political and economic front?

o

f course the country’s made no secret of its desire to be an influential Middle East, if not global player, but with Qatari jets carrying out nofly-zone missions over Libya and pictures of the Emir posted across Benghazi, there was definitely an added dimension. This is a topic which has been well covered, but I wonder if we’ve considered what sorts of risks this tiny country took in putting itself so far into the Libya conflict. For me, the gambles taken were some of the biggest issues. For one thing Qatar, along with the United Arab Emirates, actually joined the NATO mission. And while the Arab League did give its backing to the no-fly-zone, it was very much against the actual bombing of Libya which eventuated. Still, Qatar stayed with the Western alliance. It also aligned itself with the rebel base of Benghazi from a very early stage, and became the first Arab nation to recognise the National Transitional Council (NTC) in late March. These were all bold moves. Imagine how they could have backfired if other Arab nations didn’t eventually join the chorus? Qatar also gave a lot of money and assistance to the NTC in Benghazi. Some reports say it was worth more than US$400

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million (QR1.5 billion). It assisted in selling and marketing Libyan oil – one million barrels worth which brought in US$129 million (QR470 million) for the rebels at a crucial time. It went so far as to supply weapons and training for their fighters. While you can debate the rights and wrongs of supplying firepower, the rest may turn out to be inspired. Libya’s oil economy, unshackled from the stigma of pariah status, has the potential to be both a powerful force and useful for anyone who can get on board. While in Doha at a donors’ conference, the NTC Prime Minister Mahmoud Jibril said, “Qatar rescued us during a crisis, to help us generate some income.” He went on to say that the Libyan people would be the ones responsible for restarting Libya’s oil production, but it would not surprise anyone to see the Qataris alongside them in either advisory or investment roles. Physical reconstruction of the country, outside of oil and gas, will be another area of opportunity. Construction and development companies in Qatar have already shown what they can do in a relatively short time. The desert sands of Libya would provide another blank canvas for new projects. And remember what specifically made Qatar rich – natural gas. Exploration and investment in Libya’s natural gas reserves, which some estimates put at 1.5 trillion cubic metres, has been quite limited. Qatar’s

experience in turning gas into money would benefit not just Libya, but potential European markets thirsty for an option other than those presented by Russia. So, maybe there is a lesson to be learnt here. There have been a lot of comparisons between post-Saddam Iraq and post-Gaddafi Libya. And while I don’t think you can directly compare the two conflicts – Iraq was an invasion, Libya was essentially an internal battle – the battle for control and regeneration is not dissimilar. It needs to be about assistance and support at the height of the crisis, not simply coming in post-war and looking for opportunities. Those who help are unlikely to be forgotten. At the very least, Qatar’s prominence in the Libya conflict has meant exposure for the country; much in the way the 2022 World Cup brought the world’s attention. It was the Emir HH Sheikh Hamad bin Khalifa Al Thani standing front and centre with French president Nicholas Sarkozy at the ‘Friends of Libya’ meeting in Paris, chatting with British prime minister David Cameron during the photo call. United States secretary of state, Hillary Clinton, for example, was much further off to the side. Kamahl Santamaria is a Doha-based news anchor with Al Jazeera English, and host of the channel’s business and economics programme ‘Counting the Cost’.


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DOHA DIARY

ENVIRONMENTAL RESPONSIBILITY This month TheEDGE’s resident real estate columnist Edd brookes discusses a topic which all of us have the power to affect, and which in turn arguably negatively affects the prices of property in Doha: the ubiquity of litter.

a

very warm welcome back to the Doha Diary to all Qatar’s residents now returned from the summer break, and between issues of TheEDGE. I sincerely hope that you all had a happy and healthy time with your family and loved ones and that Ramadan enabled a period of quiet reflection, to give thanks for all the blessings that we enjoy, as well as giving thought to ways in which we are all able to help those less fortunate than ourselves, be it via financial or practical aid. I write this at 38,000 feet, returning from a fantastic Eid break in Cebu and Manila and I am currently somewhere over the Bay of Bengal sipping on a very nice glass of my favourite beverage. It is actually quite incredible to watch the magnificent display of nature’s power, which is manifesting as a lightning show outside my window. It is therefore no coincidence that I have decided to write today on an issue, which collectively we all have the ability to resolve, but to which little thought is given. It can have important knock-on consequences for our health, our built (and natural) environment as well as property values. The issue is litter. In fact I would go so far to call it mindless litter. While we cannot do

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much about dust and sandstorms (for which brave cleaners with an incredible head for heights can often be seen abseiling down the side of West Bay buildings with high pressure hoses in hand, blasting the grime and dust away to reveal the shining glass cladding once again) we can certainly make a difference when it comes to discarding our own rubbish, be it a can or a wrapper. Like any other city, no area of Doha is immune, and the amount of accumulated rubbish seems to correlate directly to the amount of hard working teams from Qatar Clean and the numerous other companies that are in attendance in various municipalities. On a number of occasions I have witnessed individuals emptying car ashtrays out of windows in car parks, discarding empty cans on grass verges and placing half-eaten fast food meals at the base of trees, despite there being many litter bins in the vicinity. Litter follows humans. Even a walk around the marina at The Pearl reveals an unsightly amount of non-biological waste, trapped between the marina berths and the marina wall. Outside the many 24-hour grocery stores, on the pavements and walkways along secondary roads in the older city areas and in increasing quantities, in the outlying suburbs, litter is an increasing and hazardous problem. On a recent trip down to the Inland Sea I was horrified that the shoreline surrounding

one of Qatar’s areas of outstanding beauty was suffering from the results of inconsiderate litter disposal. The knock-on effect in terms of the damage to wildlife, especially birds and marine animals, can be especially saddening. Certainly when it comes to the marketing of buildings for sale and for lease, appearance is everything and this of course has a marked effect on the eventual amount secured for rental or purchase. It amazes me the number of apartment buildings I see, especially in secondary areas, where only a token effort has been made to keep the common areas, especially lifts, free of litter and more increasingly, graffiti. Externally, even less effort is made. Appearances are all the more important when there is an element of oversupply of such buildings, and landlords are competing for tenants with neighbouring properties. Pretty obvious I know, but it always amazes me the lack of thought in terms of presentation and overall attention to detail. But the effect on real estate value aside, only together we can improve our environment, and show some respect to the thousands of workers who toil daily on our behalf – often in futility – to keep this city and country clean and debris-free. It will be worth it for all of us in the long run. Edd Brookes is a director and head of valuation, Middle East, at DTZ in Doha.


SUBSCRIPTION

SUBSCRIPTION FORM 2011 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 is 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, please 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

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MIDDLE EAST MATTERS

EXPATRIATE EXPERT The greatest cost to GCC businesses are the expatriates who are not effective, yet remain in their positions, says Dr. Tommy Weir, therefore expatriate effectiveness needs to be a top priority for every leader in the region.

D

o you want to be a great leader in the Gulf Cooperation Council (GCC)? It makes no difference if you are an expatriate or national, leadership success in the region is largely dependent on the ability to lead expatriates. The percentage of expatriates in the GCC private sector is among the highest around the world. By expatriates, I am not referring only to the common expatriate stereotype meaning western professionals, but to anyone who has left their native land and come here to work. In common practice, the term is often used in the context of professionals sent abroad by their companies, as opposed to locally hired staff. But I like to think of expatriates as people who are not from here. The GCC countries have more nationalities in their workforces than the United Nations does member countries. With this number of expatriates in the workforce come many different voices. Every leader needs to become an expert in leading expatriates as this is the day-today reality of leading in the region. Not only does your success as a leader depends on your ability to lead expatriates so do your organisations. According to research the failure rate of expatriates in the first year averages 30 percent, with it being as high as

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50 percent in some countries. Failure does not just mean turnover, it also means a loss of expected productivity as in the first year of an expatriate assignment the costs are high and the productivity is low. This is true from the top boss to the janitor. Plus, 24 percent of all expatriate assignments end prematurely. So, what can a leader do to succeed in leading expatriates? Clarity – Role ambiguity is when there is a lack of clarity on the part of an employee about what is expected in the workplace. Since role ambiguity is most common in expatriate assignments, given the new work environment, raising questions about how work evaluation, the scope of responsibilities and performance expectations, leaders need to be aware and provide greater clarity. Belonging – Adjustments to the culture represent a significant concern when employing expatriates. These adjustments are general in regards to adapting to the new host country and specifics relating to the work environment. In the GCC, it is even more complex as an expatriate has to adjust to their co-workers’ cultures as well. At first expatriates commonly feel like an outsider. There is one thing consistent about expatriates – they are not at home. Leaders have an opportunity to create an environment of belonging. The depth of belonging an employee feels at work has a connection to how well they perform.

Mentalisation – This deals with understanding issues from others’ viewpoints and building a climate of trust. The faster leaders are able to do this, the quicker and deeper their impact on performance will be. When working with expatriates, leaders need to develop the ability to understand the mental state of others and, more importantly, what underlines their behaviour. Multilingual in One Language – Just because a workforce is speaking a common language, leaders should not assume that the common language means common understanding. The meaning that is attached to words varies greatly between cultures. Leaders need to understand how the execution of certain universal practices translates from one culture to another to be able to respond to the specific needs of each team member. Coaching – When working with expatriates there is definitely going to be a variation in the workforce in regards to capability and quality. Unfortunately, when leaders experience this they are tempted to throw their hands in the air and do nothing. But what they need to do is take an active coaching approach to capability development and work with their employees to improve their development areas. Dr. Tommy Weir is an authority on fastgrowth and emerging market leadership, and an advisor and author.


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ENERGY & RESEARCH

QATAR’S RENEWABLE ENERGY POTENTIAL Qatar is currently without an overall policy on the expansion and development of renewable energy infrastructure. To promote the use of ‘green’ energy in the short and medium term, a more detailed supporting legal framework and fiscal policy would boost investor confidence, say Rudiger Tscherning and James Elwen

THE CASE FOR RENEWABLES The case for renewable energy ties in with the Qatar National Vision 2030 ‘sustainability’ agenda, since the use of renewable energy in Qatar would also contribute to long-term economic survival. Indeed, the National Development Strategy 2011-2016 encourages environmental development, the improvement of local air quality and the drive to establish a ‘knowledge-based’ society, which is consistent with the National Vision. By reducing the domestic consumption of Qatar’s fossil fuels, this generated ‘excess capacity’ of resources could be re-directed

towards lucrative global export markets and valuable intellectual capital brought in to augment the knowledge-based society. With a clear policy direction, Qatar could become a regional leader in renewable energy-focused manufacturing, and could also act as the main generator of renewable energy fed into the regional grid. A clear mandate will accelerate the Vision’s aim of establishing a comprehensive legal system for protection of all elements of the environment. Qatar can in turn use this ‘green’ impetus to be a hub for similar development in other countries, for sustainable agriculture and food security. This approach mirrors

the excellent work of the Qatar National Food Security Programme, which endorses renewable energy to achieve food security and economic diversification. There is long term potential, both from a domestic and regional perspective: with an indigenous renewable energy research and manufacturing industry, continuing the research activities at Qatar Science and Technology Park. Solar-powered desalination infrastructure to irrigate agriculture or solar-powered ‘vertical farming’ and hydroponic solutions, whereby food is grown intensively in skyscrapers coated in solar panels, are just two examples of this green energy potential.


ENERGY & RESEARCH

ESTABLISHED NATIONS In the global context, Germany and Scotland are excellent examples for Qatar in the field of large-scale expansion of renewable energy, transforming their renewable energy expertise into lucrative manufacturing export industries. Scotland is now reallocating and employing the skills, expertise and infrastructure from oil and gas to sustain an offshore renewables industry. Germany first introduced a statutory financial support mechanism to encourage the expansion of renewable energy in 1991. The ErneuerbareEnergien Gesetz, sets out a fixed compensation model for producers of renewable energy, consisting of what is known as a ‘feed-in tariff’. Smaller scale renewables are also supported similarly in Scotland, while large scale projects have been promoted by the Renewables Obligation since 2002, all underpinned by binding climate change targets on industry. The success of the German policy now sees industry and financial organisations driving the ‘Desertec Initiative’ to develop giant solar power capacity in Middle East and North Africa. Bringing renewable energy into existing and future energy and transport infrastructure in Qatar will not entail burdensome changes to sustained development, but only with a clear renewable energy policy.

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Integration of renewable energy into existing and future energy and transport in Qatar will not entail major changes. RENEWABLE POTENTIAL By 2017, the revamped Khalifa Stadium will be carbon-neutral, powered and climate controlled entirely by solar energy, serving as a precedent for Qatar’s 2022 World Cup event infrastructure. But rather than leave this infrastructure under utilised when no events are scheduled, the stadium could ‘double up’ as a locally distributed power plant. Outside the periods of use, typically during the daytime, the electricity generated can be redirected by way of smart-grids to cool or heat local schools or hospitals, for example. Smart-grid technology will effectively allocate renewable energy to centres of peak electricity demand, thereby balancing the existing fossil-fuel base load electricity supplies, and ensure that essential community infrastructure will have a consistent and reliable supply of electricity. Localised generation of electricity could also be used to distribute green power or heat to manufacturing zones or retail developments, as part of energy-efficient urban development. Such ‘renewable energy clusters’ may also serve as educational tools and as examples of innovative uses of alternative energy sources. A fully integrated renewable energy generation infrastructure in Qatar could also be developed in conjunction with national railway transport infrastructure projects, such as the Doha Metro. This makes for a logical opportunity to develop a network of electric car charging points that radiate from the parallel rail and electrification infrastructure. Renewable energy from localised generation could climate control the Metro stations, support ticket halls and information boards and complement the electricity generated for running the rail lines. Efficient electricity grid maximisation is already in the advanced stages of study in Germany, to facilitate transmission of green

power from offshore wind in the north of the country to centres of manufacturing in the south. In the long term, this renewable grid infrastructure could feed into the Gulf power grid as reserve capacity. In light of Qatar’s vast solar energy potential, Germany’s experience at expanding renewable energy and Scotland’s experience of swift and successful cross-over from hydrocarbons to a leader in renewables, coupled with world leading research and development in marine and carbon capture and storage technologies (CCS), could serve to be mutually beneficial for Qatar, Germany and Scotland. With its reputation for political and economic stability, Qatar would be an attractive regional research and manufacturing centre for renewable energy technologies in general. Capital in cash can be deployed by the state domestically and in renewables sectors in these overseas markets such as Germany and Scotland; and investment in the form of intellectual capital, can be imported to help realise Qatar’s National Vision. With an advanced and strategically located oil and gas infrastructure in place, there are real opportunities for developing CCS projects. Qatar has enormous renewable energy potential as the state enjoys abundant sunlight and boasts a notable offshore wind potential in its territorial waters.

Rudiger Tscherning is Director of the Forum on Energy and Environmental Law at Qatar University College of Law and a specialist in energy and environmental law. James Elwen is Managing Partner of the Doha office of McGrigors LLP law firm and a specialist in international oil/gas law, renewable energy and energy infrastructure law. The views expressed by the authors are personal and do not necessarily represent those of Qatar University or McGrigors LLP.


ENERGY & RESEARCH

LP GAS: TOO MUCH OF A GOOD THING

Natural gas is a boom industry in the United States (US) and Canada, and the number of new gas wells is increasing steadily. Combine that with the growth in production of so-called ‘unconventionals’, such as shale gas, then factor in a coming wave in synthetic fuel production, and all the ingredients are in place to generate an LP gas glut and a drop in prices. A looming financial disaster? Not necessarily, says US-based Tad Dritz

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efined as a gas that can be turned into a liquid fuel under relatively low pressure, liquified petroleum (LP) gas consists of propane and butane. Propane and butane are typically produced along with natural gas, or methane, from gas wells. As the number of new gas wells grows, not only does natural gas production increase, the production of propane and butane – and hence LP gas – increases too, with the risk of oversupply and a drop in both gas and LP gas prices. Moreover, thanks to improvements in drilling and extraction technologies, such as fracturing or hydrofracking, more shale gas plays are being exploited and the productivity of shale gas wells has been greatly improved. The result? Large amounts of shale gas are now coming on the market. And that production is set to grow as producers continue to increase their output while lowering their costs. According to an article in the authoritative publication, the Oil & Gas Financial Journal [vol 7, issue 8, 1 Aug 2010; The Race to Liquids, by E. Russell Braziel], one of the primary factors for drop in gas prices during the 18 months since January 2009 is a continuing oversupply of natural gas due to prolific production from shale plays. And because shale gas wells generally contain a higher percentage of LP components than natural gas wells, a side effect of the growth

in shale gas production has been a significant additional growth in LP gas production. That’s the present situation. But looking ahead into the not-too-distant future an increase in synthetic fuel production could have the side effect of bringing even more LP gas into the market. This is because synthetic fuels include fuels produced from processes such as biomass to liquids (BTL) and gas to liquids (GTL). GTL offers a way to tackle the problem of associated and stranded gas – gas reserves located far from existing pipeline infrastructure and markets. However, these abundant sources of energy that are often squandered. Rather than being transported to refineries for processing, stranded gas is often just left in the ground. Associated gas produced along with oil is frequently disposed of by flaring – a wasteful and environmentally unfriendly process that is increasingly subject to regulation – or by re-injection back into the reservoir at considerable expense. Interest in GTL – a technology once thought to be of little relevance in North America – is increasingly now, due partly to the introduction of stiffer environmental regulations and partly to a growing disconnect between oil and gas prices. As the price of natural gas has dropped over the past 18 months, the spread – or ratio between the price of a barrel of oil to that of 1,000 standard cubic feet (mscf) of natural gas – has increased, bringing big changes in

ENERGY AND RESEARCH BRIEFS

7TH ANNUAL HSE FORUM The seventh annual Health and Safety Forum in Energy (HSE) is set to take place from 10 to 12 October 2011 at the Grand Hyatt in Doha, Qatar. The Forum is being held under the patronage of HE Dr. Mohammed bin Saleh Al Sada, minister of energy and industry in Qatar and chairman of QP, includes a keynote address by Saad Al Kubaisi, HSE manager at QP, as well as more then 35 HSE experts on the leader’s panel from the top minds of the energy industry. www.hse-me.com UAE WORKSHOP ON CCS SUCCESS The United Nations Framework Convention on Climate Change (UNFCCC) made important progress towards allowing support for carbon capture and storage (CCS) projects under the Clean Development Mechanism (CDM) at a technical workshop hosted in September in Abu Dhabi by the United Arab Emirates’ (UAE) ministry of foreign affairs. A wide range of presentations gave delegates a current picture of managing CCS projects. Delegates were optimistic that the Abu Dhabi workshop has led to greater common understanding of the issues facing the sector, as well as identification of viable solutions that could form the basis of a possible global agreement later this year.

TheEDGE

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ENERGY & RESEARCH

hydrocarbon markets in its wake. In the US the oil/gas spread has historically varied between around six and 12. But beginning in mid-2009, natural gas prices seem to have become independent from oil prices, with the result that the spread ratio in North America has increased to greater than 20 and is expected to remain elevated for years or even decades. A large spread presents an arbitrage opportunity – and an incentive to use GTL technology to turn abundant North American natural gas into synthetic fuels. In contrast, energy security is a major driver in North America behind the growing interest in biofuels. BTL can be used to produce biofuels from a very wide range of waste feedstocks, including agricultural, animal and municipal wastes, and ligno-cellulosic waste from trees. The fuels produced via BTL can be substituted directly into existing fuel systems without the need for blending. They also burn cleaner than petroleum-based diesel and jet fuels, resulting in lower emissions of nitrogen oxides (NOx) and harmful particulates. With the development of cost-effective technologies that enable economical small scale and local production (also known as distributed production) of biofuels via BTL and small scale GTL to be carried out offshore, synthetic fuels production in North America looks set to increase even more. And with the growth in synthetic fuels production will come an increase in LP gas production. This is because as well as the methane used in synthetic liquid fuels, this process also generates waxes, propane and butane. Because the latter are essentially surplus to the synthetic fuel production process, operators may look to export them in the form of LP gas. LP gas is also a byproduct of hydrocracking, used to crack the waxes to produce liquid fuels. In theory this growth in LP production could lead to a glut and a resulting drop in prices. But rather than looking at increasing LP production in the US as a challenge to profitability, I think producers should consider it as an opportunity to develop new markets for what is – after all – an important commodity in the energy mix. LP gas is a valuable hydrocarbon-based fuel source in a world where hydrocarbon resources are not unlimited. It also offers other environmental advantages, emitting just 81 percent of the CO2 per kWh produced by oil, 70 percent of that produced by coal, and less than 50 percent of that emitted by coal-generated electricity distributed via the grid. In addition it burns more ‘cleanly’, releasing fewer particulates than heavier hydrocarbons. LP gas is already widely used around the world as an alternative to electricity and heating oil (kerosene); as a fuel for combined heat and power stations and as a fuel in vehicles. It is increasingly used to replace chlorofluorocarbons as an aerosol propellant and a refrigerant to reduce damage to the ozone layer. Surely, if we can develop ever more innovative technology to increase efficiency for LP production, we can come up with new, imaginative creative ways to market and take advantage of this valuable resource.

Tad Dritz is a Marketing Manager for the Oxford Catalysts Group in Ohio, USA.

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NUCLEAR STILL IN WORLD FUTURE Despite fears among the public about the risks following the Fukushima reactor disaster in Japan, nuclear power still has a strong future, government and industry leaders agreed in a session on energy security at the World Economic Forum’s Annual Meeting of the New Champions 2011, in September. Nuclear power will necessarily remain an important part of the energy security strategies of many countries, especially fastgrowing economies such as China and India that are building new plants, as well as the Middle East. “Our strategy for nuclear power will not change because of the Fukushima incident,” Mohamed bin Dhaen Al Hamli, minister of energy of the UAE underlined. The UAE is building four nuclear power plants, the first of which is slated to go on stream in 2017. “There will be much greater emphasis on nuclear safety but…just because of Fukushima, we cannot condemn an entire industry.” Pakistan’s minister of science and Technology, Mir Changez Khan Jamali, stressed that his country has to develop nuclear power because it faces an energy crisis and safety concerns should not be an issue. “We have the raw materials and expertise,” he said. “We need nuclear energy because of our energy deficit.” SMART ENERGY MIDDLE EAST 2011 The fifth annual Smart Energy Middle East Conference and Exhibition will be held at the Park Hyatt Hotel in Dubai, UAE, from 23 – 25 October 2011. The event aims to examine how the GCC region can achieve energy sustainability, operational excellence and customer engagement. Over 200 senior executives from the region’s utilities and energy sectors will gather to learn from leading global experts. An exhibition and extensive presentations, panel discussions, workshops and networking sessions will take place. The event will also incorporate the Metering International Excellence Awards in the form of the Smart Energy Excellence 2011 Award, Smart Utility 2011 Award and Smart Technology Innovation 2011 Award. www.smartgridsme.com


COUNTRY FOCUS

PAKISTAN:

BUILDING PARTNERSHIPS A long history of friendship, mutual respect and ongoing and ever-improving diplomatic and commercial relationships indicate that the fortunes of Qatar and its close neighbour Pakistan will forever be bound together, writes Rachel Morris

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n early 2012 the office of HH Sheikh Hamad bin Khalifah Al Thani, Emir of Qatar is planning to make a state visit Pakistan for the first time since 1999. However, the fact that it took more than a decade for the country’s ruler to return is not reflective of the esteem both Qatar and Pakistan hold for one other. “The relationship between Qatar and Pakistan goes back a long way,” says newly arrived Pakistani Ambassador to Qatar, Muhammad Sarfraz A. Khanzada. “Pakistanis were here from the very beginning of the country, 40 years ago. Pakistanis helped build this country.” When Khanzada refers to building Qatar, he is being literal. It was Pakistani labour that helped build many of the country’s original buildings, roads and other infrastructure. But Qatar has also been a friend to Pakistan in troubled times, including the 2008 earthquake that devastated the country and the 2010 flooding that caused damage and large-scale loss of life. “Qatar was among the first of those nations who immediately sent aid after the news of the floods, to deal with the immediate effects of the disaster and they are still involved,” says Khanzada. At its peak in the 1980s, there were more than 130,000 Pakistanis in Qatar but this number has declined to the current 80,000 here today. Of that number, around 50,000 are participating in the workforce while the remainder are families.

“Many moved on because their projects finished,” the ambassador, who was previously stationed in Qatar from 1987 to 1991, adds. The other reason is that Pakistani semi-skilled and unskilled workers are deemed expensive in comparison to workers from other countries, including Nepal. The ambassador believes it was the initial influx of Pakistani workers, many of whom are still in Qatar and now own small businesses, that created a great deal of goodwill, which he is keen to capitalise on. “Qatar will need an estimated two million workers to complete the projects needed for 2022 and the country’s development,” Khanzada explains. “This presents us with a great opportunity.” Upon his arrival in Qatar in April, Khanzada met with HE Sheikh Tamim bin Khalifah Al Thani to discuss the issue of bringing more Pakistani workers to Qatar. The meeting resulted in an agreement that Pakistan would be the first port of call for Qatari companies seeking semi- and unskilled workers for projects. The ambassador is also targetting Qatar’s private security needs for the coming decade. The ambassador believes that Pakistanis are well regarded in the region because there is an understanding of the country’s problems. “Pakistanis are strong and good workers and there is an acknowledgement of this in Qatar,” he says. He points to the opportunities that exist in Qatar as a way for Pakistan to deal with growing issues of employment and economic deprivation in the country, which in turn have led to well documented unrest. “Since 2001 and the ‘War on Terror’ began, more than 35,000 people have lost their lives in Pakistan, plus a further 5000 security and military personnel,” he says. “That’s a heavy toll.” According to the Pakistan Economic Survey 2010-11, the south Asian nation’s economy suffered direct and indirect financial losses up to US$67.93 billion (QR244.5 billion), which it attributed to its operations against militants since 2001 and the ambassador feels there is a much misunderstanding about what is happening in Pakistan. Comparatively, Qatar’s Pakistani numbers are small compared to the seven million around the globe. There are 1.2 million people of Pakistani origin in Saudi Arabia, one million in the United Arab Emirates (UAE) and 1.4 million in the United States (US). But Qatar’s Pakistani population nevertheless contribute a great deal to their home economy. The remittances of Pakistanis living abroad have played an important role in Pakistan’s economy. Pakistanis settled in western Europe and North America are important


COUNTRY FOCUS

Qatar will need an estimated two million workers to complete the projects needed for 2022 and the country’s development. This is a great opportunity for Pakistan. sources of foreign exchange for Pakistan. Since 1973, Pakistani workers in the oil-rich Arab states have been the source of billions dollars of remittances. Pakistani expats contributed US$11.2 billion (QR40 billion) to the economy in the financial year 2011. The major source countries of these remittances to Pakistan include the UAE, the US, Saudi Arabia, Gulf Cooperation Council (GCC) countries such as Bahrain, Kuwait, Qatar and Oman, and Australia, Canada, Japan, the United Kingdom and affluent European countries such as Norway. The GCC alone accounts for around US$3 billion (QR11 billion) of the above total. However, there are only a handful of Pakistani companies operating in Qatar. Encompassing support and logistics services for the construction industry as well as labour hire and recruitment companies. Others include Unicorn Pakistan, an engineering company, and Descon, a construction company. Another Pakistani-Qatari joint venture, Qatar Green, has been established to provide landscaping services for stadiums and sporting venues. Indeed it is in the sporting realm where Qatar will obviously

play a huge role as 2022 nears and the country submits its bid to host the 2020 Olympics, where the ambassador is working to gain representation for one of Pakistan’s lesser-known industries. “[We are] one of the world’s biggest producers of sporting goods,” he reveals. “All of the footballs used in the FIFA games are made in Pakistan.” Other sporting equipment produced in Pakistan includes cricket bats and hockey sticks as well as footballs for various codes and cricket balls. Beyond that, Khanzada is also working to bring more skilled Pakistanis to Qatar including medical staff. “Currently there are 24 Pakistani doctors at Hamad Medical Corporation, eight at Al Ahli Hospital and five at Qatar Petroleum. All of these doctors hold senior positions,” he says. As per other nations with significant agricultural land, Pakistan is in talks with land-lacking Qatar and companies such as Hassad Foods, which is seeking to provide food security for its citizens. “Pakistan is one of the biggest producers of rice in the world. We have a lot of fertile land,” Khanzada says. However, unlike other countries, and perhaps aware of the security issues within the country, Pakistan is keen to ensure that it benefits not just financially from the arrangements. “We are looking into a joint venture, to ensure that Pakistan benefits from this,” he adds. Pakistan’s energy shortages, which sees daily rolling blackouts in most big cities, as well as many smaller towns only having power for part of the day, also loom large in their future plans with Qatar and talks are underway to import LNG to Pakistan for domestic use. One issue of particular importance to the expatriate community in Qatar is the development of the Pakistan Education Centre in Abu Hammour in Doha. Opened in 1986, the newly renovated and expanded school houses more than 3000 students from early childhood through to senior high school. “It was built and funded by our community,” says the ambassador, who is a kind of de-facto principal of the school. While his country is rich in terms of resources, he says Pakistan needs assistance to bring these riches to the people. They are actively pursuing joint ventures in many areas, finishes Khanzada, who would also like to see many further Pakistani nationals in working in Qatar – perhaps, ultimately, 100,000 or more. PAKISTAN AT A GLANCE Population: 177 million, the world’s sixth most populous country. GDP per capita (nominal): US$1049 (QR3776). The economy of Pakistan is the 47th largest in the world Main industries: textiles, chemicals, food processing, steel, machinery, beverages, and clothing. The US and UAE are Pakistan’s biggest export partners


special focus

financial capital

the rise of mena investment As the financial world seems to lurch between a new crisis and recovery, all eyes are trained on the Middle East. The region is proving that it can offer emerging market returns with the safety and surety of a more mature environment. Ahead of the MENA Investment Management Forum 2011, to be held in Doha this month, Rachel Morris looks at the opportunities being created in the region and specifically Qatar.

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Held in association with the Qatar Financial Centre, the MENA Investment Management Forum, from October 2 to 5 in Doha, will examine the latest trends in the asset management industry.

n 2007 the Middle East and North Africa (MENA) regional onshore assets under management were estimated at US$57 billion (QR207 billion), with much of the management undertaken by international companies with little knowledge of the region and its customs. According to Cerulli Associates, with the repatriation of funds and the growth in the regional investment management providers, assets under management are expected to be over US$100 billion (QR364 billion) by 2012. McKinsey & Company, identifying a long-term trend, has estimated that asset management revenues in the Gulf Cooperation Council (GCC) region will increase by 10 to 15 percent annually from 2005 to 2015. The GCC countries display one of the world’s highest savings rates, estimated at 39 percent of gross domestic product (GDP), while private consumption as a percentage of GDP, estimated at 37 percent in 2009, is much lower than the world average of 60 percent. Samer Solh, managing director of Qatarbased Amwal Asset Management says Qatar is on the path to becoming recognised as a regional centre for asset management. Qatar’s continued economic growth is creating real and robust opportunities for new entrants, both local and international, looking for high returns in a safe environment. “Qatar is making great strides to establish itself as the regional hub for asset management and it is closer to achieving


special focus

this goal than other locations,” he told TheEDGE before the forum. “Any wealth management hub requires a sustainable and dynamic business ecosystem. This includes having advantageous regulatory and legal regimes, a strong talent pool, convenient and competitively priced business services infrastructure and, importantly, a capital-rich base of investors, including fund managers.” According to Solh, the climate in Qatar is conducive to the creation of a regional hub for asset management – one of the key points in the Qatar Financial Centre’s (QFC) strategy. “Qatar’s government and regulators have been important catalysts in transforming the market into such a regional hub for asset management and insurance to tap into the country’s vast wealth,” he says. To start, Qatar began with some of the necessary ingredients including increasingly wealthy family offices and early entrants and innovators. Add to that the Qatari government’s focus and effort to develop an institutional investor base. This began with the formalisation of the Qatar Investment Authority (QIA) and Qatar Holding. The government subsequently helped establish national pension schemes and other endowments which all have increasing capital to invest. Qatar has also been discussing a programme to allocate significant seed capital to asset managers that establish themselves in the country. That ought to be a very significant catalyst to help Qatar advance over other regional financial centres. “In addition, the establishment of the QFC provided a global best practice framework for the financial services industry which is evolving to meet the needs of the industry. Finally, Qatar is creating and growing its domestic public securities markets. On the fixed income side, we expect increased infrastructure funding to be financed through Eurobond and local currency bond issuances. The announced creation of a short term Qatari riyal T-bill programme is an important step to eventually creating a local currency yield curve. On the equity side, the Qatar Exchange’s initiatives to increase local listings and to adopt global best practices in settlements and rules all contribute to deepening liquidity. As Qatar progresses toward eventual inclusion in global stock

benchmarks that will attract liquidity on the investor side.” This month’s MENA Investment Management Forum held October 2 to 5 in Doha (formerly Fund Forum Middle East), which is held in association with the QFC, will examine the latest trends experts are seeing in the asset management industry regionally and globally. “On the global front, we are seeing the acceleration of two trends that have been in effect for a number of years,” reveals Solh. “The first trend is size segmentation. To survive, you need either asset scale with a strong brand name and distribution or you have a differentiated niche strategy with a unique edge in a small but inefficient and compelling strategy. Middle-sized managers are consolidating, shrinking or closing down. “The second trend is increased emphasis on regulation and operational risk management. Regulation is driven by political reaction to the financial failures and shocks that affected the markets in 2008 and 2009. Operational risk management is driven by the overwhelming capital of institutional investors such as pension funds, insurance companies and endowments who are sensitive to operational due diligence and risk mitigation by their managers.” According to Solh, this means that both emerging and established investment managers now have higher operating costs to meet infrastructure, transparency and regulatory requirements. “As a consequence, we have seen a number of effects: investment banks shutting down or spinning off proprietary trading desks; high profile managers closing their funds to outside money to focus on managing personal family wealth; and the growth of emerging manager platforms to seed new funds while providing operational oversight and infrastructure.” On the regional front, he explains as wealth continued to grow over the last decade, investors’ needs became greater, including increasing exposure to growing regional markets. In addition, as investors became more sophisticated, they started demanding more and better services, which, understandably, is more difficult for London or Geneva-based investment managers and

advisers to offer due to distance and culture. “The market meltdowns in 2008 and 2009 convinced regional investors, who invested in global strategies they thought were safe, to reassess the trust level they placed in fund managers who would just fly in from the United States, United Kingdom and Europe just to raise capital,” Solh says. There are other incentives to keep it local. The Qatar stock market, with 43 listed companies, rose nearly 25 percent in 2010 making it the best performing market among all the GCC and Middle Eastern exchanges last year. Meanwhile the Qatar Exchange in partnership with New York Stock Exchange Euronext continues to develop plans for new future products, such as derivatives. The market for bonds and sukuks has also increased substantially, with nearly US$3.5 billion (QR13 billion) of issues from Qatar in 2010, which met with huge investor demand. Qatar is lobbying to have its status, as decided by the index compiler Morgan Stanley Capital International, upgraded to ‘emerging market’ status. A review in June failed to change the status, but the experts are hopeful of a future shift, which would further buoy interest and investor confidence. The regional events of the past 10 months which saw revolutions in north Africa and unrest in other quarters, has somewhat slowed interest. According to Solh, the regional prognosis, which will be examined at the Forum, is growing each year. “As situations eventually stabilise, global investors will re-focus on the larger regional picture such as the long term wealth creation in the GCC, the attractive and expanding consumer populations in Turkey, Egypt and Saudi Arabia and the world leading energy and petrochemicals industries in Qatar and Saudi Arabia,” he says. “Combined with the rise of local institutional investor base and the eventual upgrading of the Qatari and UAE markets to ‘emerging market’ this will ultimately cause appetite for regional funds to grow.”

The MENA Investment Management Forum will be held from October 2 to 5 at the Grand Hyatt Doha. For more information go to www.menaimf.com TheEDGE

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Market Watch • Inside Edge • Special Report • Balance Sheet • Economic barometer

THE POWER OF CREDIT RATINGS (P.44)

Traders work in the Standard and Poor’s (S&P) 500 options pit at the Chicago Board Options Exchange in the United States (US). S&P, along with Fitch and Moody’s make up the ‘big three’ US credit ratings agencies, which many feel wield too much power and influence. In ‘Thumbs Up, Thumbs Down’ Karim Nakhle takes a closer look at these institutions.

ALSO IN THIS SECTION: • Market Watch: In our newly revamped Market Watch pages, we cover world and local markets, commodities and the QFC’s recent Reinsurance Barometer. (P.36). • Inside Edge: Manjeet Chhabra investigates the robust status quo and future potential of Qatar’s banking sector. (P.38). • Special Report: Matt Ghazarian reports on recent statistics released that indicated that Qatar is the world’s fastest growing economy. (P.40). • Balance Sheet: Janak Patwari discusses the importance of corporate vision and mission statement to the bottom line and how these can be implemented effectively. (P.42).

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MARKET WATCH

Global MARKET WATCH by Dheeraj shahdadpuri

WORLD REPORT: Battle Between Bulls and Bears Returns The unresolved European debt crisis and weakening United States (US) economic growth have continued to inflate fears of another round of global economic slowdown, at least in the short term. This uncertain outlook has made global financial markets fragile as bearish investor sentiment, within a short span of time, has knocked-off gains made during the last year. The benchmark US stock market index, Dow Jones Industrial Average (DJIA), after peaking to around 12,800 levels during the beginning of May is now trading around the 11,000 mark, a 14 percent retreat. Much of this decline is caused by the last minute agreement on raising the debt ceiling and the decision by Standard and Poor’s to lower the sovereign ratings of the nation to ‘AA+’. In the Euro Area, the elevated debt crisis of Greece has so far continued to concern policymakers, who are still struggling to come up with a solution to address the fears of the global investment community. Although a second bailout package has been approved for the troubled nation, many economic experts are still sceptical and believe that these measures alone may not solve the problem, and that fundamental future reforms must be implemented. The Gulf Cooperation Council (GCC) financial markets have not remained isolated from global developments and have declined in tandem with the weak global cues, despite relatively high crude prices on which outlook of the region’s oil-rich nations depend. Similar to what we are witnessing elsewhere around the world, stock market indices of all six GCC nations are trading in negative territory for year-to-date returns. In the near term, there are no signs of reduction in market volatility especially due to mixed reading of major economic indicators in US, which is giving a hard time to investors to foresee where the world’s biggest economy is heading. Outlook for the US and subsequently of most global financial markets very much depends on what steps the Federal Reserve (Fed) will take to safeguard its still nascent recovery, which has so far failed to bring down the high unemployment rate. However, a major hurdle for launching the next most anticipated measure by the Fed, Quantitative Easing (popularly termed as QE3), is the inflation rate, which in all probability could rise with another round of treasury purchase programme. In the near term, investors are expected to closely monitor developments surrounding the recently announced US$447 billion (QR1.6 trillion) stimulus package by the Obama administration and new steps that the European Central Bank will take to avoid debt contagion from spreading after its recent market intervention, aimed at A Greek citizen draws money from an Athens teller machine amid lowering Italian and increasing scepticism whether the country will in fact be able to honour its sovereign debt. (Image Corbis) Spanish bond yields.

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TheEDGE

COMMODITIES

CORNER

Gold shines.Oil weakens. In the midst of global economic uncertainty, investors have once again chosen to take refuge in gold. This flight has pushed the price of gold to a new record peak of US$1923 (QR7000) per ounce as investors continue to remain cautious about the slowing growth in the US and Euro Area, which if it persists, could impact the outlook of emerging economies. Ostensibly the recent price rally has been driven by investment demand as according to the World Gold Council, the demand for metal has fallen by 17 percent year-on-year during the second quarter. But due to higher price, in value terms demand for the metal has increased five percent to reach US$44.5 billion (QR161 billion); though at the time of writing this was declining. The oil price, which has a direct correlation with the equities, has weakened in recent months after peaking at a two year high of US$127 (QR462) per barrel for Brent Crude during the beginning of current year, on account of sensitive political shifts taking place in a number of Middle Eastern countries. A landmark decision by the International Energy Agency (IEA) to release strategic oil stock has also played a role in bringing the price of crude down. Despite these factors, strong demand especially from emerging giants like China and India has lately supported the price of the commodity, which continues to trade above the key psychological mark of US$100 (QR364) per barrel. Indeed, estimates by the IEA have remained optimistic, expecting consumption of petroleum products to reach 89.3 million barrels per day in late 2011.


MARKET WATCH

Qatar Stock

Market Weight of Global Economic

Uncertainty continues The effects of global economic turbulence are lately also being felt on the Qatar Stock Market which after reaching a two year high of 9242 in mid January has given up its gains and is now trading in negative territory for year-to-date (YTD) returns. However, so far the losses on the Qatar market have stayed relatively limited, down 3.8 percent YTD August-end, as compared to its GCC peers. This could be attributed to the fact that investors continue to remain confident in the strength of the domestic economic activity, which has stayed robust on account of soaring hydrocarbon revenues, which has given cushion to the government for allocating huge investments especially in the infrastructure space. Further, the Qatar Stock Market has been supported by the index heavyweights in banking and the financial subindex, which has so far stayed in positive territory till august-end with minuscule gains of 0.5 percent, despite major sell-off being witnessed particularly in financial stocks elsewhere around the world. However the services sector (down 9.2 percent) is the biggest loser in terms of YTD August returns. This is followed by the industrial sector and insurance sub-sector, which are down 8.9 percent and 4.2 percent respectively.

NEW QFCA GCC REInsurance Barometer

The latest edition of the GCC Insurance Barometer shows 92 percent of experts expect reinsurance prices in the GCC to stabilise or increase over the next one to two years. This represents a major change in the outlook compared with the results in the previous research at the beginning of 2011, when only 29 percent expected stable or increasing prices. “It is clear from the research findings,” said Akshay Randeva, director strategic development of the Qatar Financial Centre Authority (QFCA), “that the GCC region remains a very attractive market for the global reinsurance industry.” TheEDGE spoke exclusively to report compiler Dr. Kai-Uwe Schanz (pictured) further about the barometer: the barometer seems to indicate strong growth? Reinsurance in the GCC region is poised to keep growing at a faster rate than GDP. This reflects a very strong pipeline of large infrastructure, construction and energy projects. These risks are too big to be absorbed by the domestic insurance community and need to be diversified across the global reinsurance market. The growth prospects of reinsurers are also driven by the fact GCC insurance markets are among the world’s fastest growing, fuelled by demand for compulsory motor and medical insurance, as well as Shari’ah-compliant insurance (takaful). The GCC’s non-life insurance penetration (as a share of GDP) is one percent – same as Africa and a third of the global average. Why are prices expected to increase? Qatar’s insurance markets are dominated by ‘heavy’ commercial risks (for example construction and energy). Qatari insurers are simply too small to shoulder these mega risks – and it would probably be neither economically feasible nor sensible to try to do so. From the perspective of Qatar’s insurance companies reinsurance can be viewed as a (massive) substitute for capital. In addition, the domestic insurance market offers too little scope for risk diversification – the core competency and value proposition of the global reinsurance community. Over time, Qatar’s cession rate should come down as personal lines (for example health insurance) grow in importance. Do World and regional events and the global industry have a marked effect on the GCC? [Thanks to] the Arab Spring...a majority of respondents do not expect the most recent political developments to adversely affect the prospects of insurance and reinsurance in the region. Based on its natural wealth, increasingly successful economic diversification strategies and the nascent stage of domestic insurance markets the Gulf region remains a growth area, which offers highly attractive diversification opportunities.

TheEDGE

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INSIDE EDGE

BANKING ON

RAPID GROWTH A well-performing financial environment and burgeoning public expenditure are directly beneficial to the banking system of a domestic economy. With nearly US$100 billion (QR364 billion) worth of investments being planned between 2010 and 2015 in Qatar, public spending is going to be a primary force driving credit growth over the next five years, writes Manjeet Chhabra, who takes a closer look at the Qatari banking ecosystem.

T

he Qatari government has supported the domestic banking sector significantly in recent times, in order to help the system to tackle problems posed by the global financial crisis. After a decision in late 2008, the government and the Qatar Central Bank undertook several steps to augment the banks’ liquidity positions and to soften the overall tight credit scenario. At the beginning of 2009, Qatar Investment Authority (QIA) bought five percent of the capital of all national banks except Qatar National Bank (QNB) amounting to around QR2.5 billion. In March of that year, the government then infused another US$6.5 billion (QR27 billion) by the way of the purchase of domestic investment portfolios of banks, which wanted to sell them. In June 2009, the government conducted a loans purchase programme under which it purchased QR14.4 billion worth of loans and real estate investments that national banks wished to sell. This restructuring of real estate and equity portfolios helped contain the loan loss provisions of the Qatari banks and the banks ended up having a very low ratio of non-performing loans. In December, the QIA subscribed another five percent of the

share capital of the national banks for another QR2.7 billion. In another round of capital infusion, the QIA bought QR2.3 billion worth of equity in the Commercial Bank of Qatar and Doha Bank in the first half of 2011. During the same period, National Bank of Qatar conducted a 25 percent rights issue for the sole purpose of expanding its capital base to brace for future growth opportunities. QATARI BANKING LANDSCAPE The Qatari financial system comprises of 18 banks, categorised as Traditional National Banks (seven); Traditional Foreign Banks (seven) and Islamic National Banks (four); three finance companies and three investment companies. All foreign banks and the finance and investment companies are private entities. The total asset base of commercial banks operating in Qatar has grown at a compound CAGR of 31.5 percent during 2006-2010, from QR189.5 billon to QR567.5 billion. Over the same period, total credit advanced by the commercial banks grew at a CAGR of 32.3 percent from QR102.55 billion to QR314.5 billion. The customer deposits base also widened at a healthy pace, with a CAGR of 26.33 percent as deposits expanded from QR120.46 billion at the end of 2006 to QR306.8 billion at the end of 2010. Since

2006, capital adequacy of all the listed banks have remained well above the 10 percent level stipulated by the Central Bank. The Qatari listed banks account for close to 70 percent of the total assets base of the banking system. Similarly they also advance slightly more than 70 percent of all the loans and advances in Qatar. Among the listed banks, Qatar National Bank, Qatar Islamic Bank and Commercial Bank of Qatar account for the majority of more than 80 percent of total assets. Other listed banks have been making inroads over the past couple of years, but the difficult business scenario seems to have posed obstacles to impressive growth. After a round of financing from the government in 2009 and later in the first half of 2011, the listed banks are well capitalised to tackle any sort of hurdles related to credit supply. On the other hand, a United States (US) dollar peg has necessitated a loose monetary policy in Qatar in line with the one prevalent in the US. After keeping the interest rate at two percent until the first half of 2010, the Central Bank further lowered policy rate to one percent in April 2011. This is further expected to bolster credit off-take as banks can borrow at lower costs. Non-performing loans have been growing in absolute and relative terms, but stricter norms on consumer


INSIDE EDGE

TOTAL ASSETS OF LISTED COMMERCIAL BANKS

The robust macroeconomic fundamentals of the growing Qatari economy will prove immensely beneficial to the banks in the GCC state. lending will help in bettering the ratio. In the period prior to the global financial crisis, domestic credit growth rates remained very high but have softened in the past couple of years. But some sectors, which have been sustained by government and governmentowned entities, have shown the least signs of abatement. Public sector lending increased by more than 35 percent in 2010 and represented close to 35 percent of the total loans. This is a contrast to the private sector’s credit growth rate of around eight percent. The physical and social infrastructure spending prioritised by the government over the medium term will expand financing opportunities for the banks. laTEST REgUlaTORY UpdaTES In February 2011, the Qatar Central Bank came out with a regulation under which conventional commercial banks have to discontinue their Islamic operations by

the end of 2011. This has virtually led to a complete segregation of the conventional and Islamic banking segments unlike the global peer countries in which Islamic banking is offered hand in hand with conventional banking. The central bank’s regulation will be good for the Islamic players as conventional lenders will have to either convert their Islamic loans into conventional loans or sell them to the Islamic finance providers. Later in April 2011 the Central Bank announced stricter regulations pertaining to retail lending with an aim to reduce leverage in that segment. The Central Bank’s step came after the assets quality deterioration, which ensued in the retail segment after the 2008 crisis. lOOkINg FORwaRd The Qatari economy grew at a 15.7 percent pace in 2010 and the International

Monetary Fund (IMF) estimates that in 2011 it will fare even better with a growth target of more than 20 percent. The robust growth levels have been made possible by the significant enhancement of liquefied natural gas capacities in the country. On the back of robust revenue streams, the Qatari government has outlined a slew of expenditure projects running into billions. The robust macroeconomic fundamentals of the growing Qatari economy will prove immensely beneficial to the banks here. Public sector lending will remain a mainstay for the banks in Qatar as the government implements massive public projects over the next decade. Currently, Qatar National Bank and Masraf Al Rayan have a strong presence in this space, but it goes without saying that other banks too will realise the potential and spruce up their presence in public spending. Islamic banking entities will benefit in the medium term due to a low level of competition in a segment, which has witnessed high growth levels in the recent past. But overall stringent norms in retail lending might impact credit growth in that segment which will affect Islamic as well as conventional banks. Looking beyond the credit growth impact, the stricter norms will help in tackling the problem of nonperforming loans, which were seen primarily emanating from the consumer loan book. TheEDGE

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QATAR

SPECIAL REPORT

WORLD’S fAStESt

ECONOmY By Matt Ghazarian

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hile many economies worldwide are still sluggish or face another recession, Qatar is expected to see 21 percent real growth in 2011, with the country’s core sectors performing strongly. Qatar was the world’s fastest-growing economy between 2006 and 2010, with a compound annual growth rate (CAGR) of 15.7 percent, according to a recent report by Doha-based QNB Capital. QNB Capital, part of Qatar National Bank, has said public investments in the natural gas industry and other sectors have helped drive both rapid growth and diversification of the economy. The non-hydrocarbons economy achieved a CAGR of 16.4 percent between 2006 and 2010, with sectors such as manufacturing, financial services and construction expanding. In 2009, Qatar saw real gross domestic product (GDP) growth of 8.6 percent, according to the International Monetary Fund (IMF). And though this number was down from 25.4 percent the previous year, it is a rate that would still be considered remarkable by most countries, even in an excellent year. The IMF praised the Qatar authorities’ rapid counter-cyclical policy response, which included continued increases in gas-processing capacity, support for the banking system and a demand-stimulus rise in public spending. Having survived the international economic storm, Qatar is now strongly positioned to continue its rapid ascent, even amid concerns surrounding the United States (US) economy’s health, the eurozone’s stability and the sustainability of China’s GDP growth, Qatar’s financial system is well capitalised and has low levels of non-performing loans. The government is also able to spend heavily at a time when others are not. Public expenditure, much geared towards the 2022 World Cup, is both providing much-needed infrastructure and services and sustaining momentum in a slack global economy. QNB Capital forecasts the Qatari oil and gas sector will expand by almost a third in 2011, growing 29.5 percent, an increase driven largely by natural gas. Qatar is continuing to expand production of liquefied natural gas (LNG), where it is a world leader. Its LNG capacity is expected to rise to 77 million tonnes by the end of the year from 62 million tonnes in 2010. Crude oil output growth will be more modest, from 780,000 barrels per day (bpd) to around 800,000 bpd. Though this output is below the country’s overall production capacity of one million bpd – as Qatar is restricted by OPEC

commitments – the extra capacity cushion does enable it to ramp up crude output if world supply falls. The non-oil and gas sector is forecast to grow 14.1 percent. A number of new petrochemicals projects are underway that will support the expansion of the valueadded economy. Qatar is focusing on diversification and increasing exports of processed goods over raw materials, keeping more value local. The construction sector’s resurgence will also be key. Private sector demand for homes, office space and industrial developments will be partnered with huge government investments in infrastructure and social facilities, such as schools and hospitals, worth US$185 billion (QR674 billion) over the coming decade. The IMF forecasts nine percent non-hydrocarbons growth from 2012 to the end of 2015, and points out that, since Qatar plans to stop expanding its gas capacity after 2012 to prevent oversupply, other sectors will become increasingly important for driving the economy and boosting external competitiveness. With growth so strong, one of Qatar’s biggest economic challenges has been inflation. Qatar’s dollar peg limits its ability to head off inflationary pressure with monetary policy, so inflation remains a risk, particularly with demand stimulus from government and private spending. Though inflation reached 15 percent in 2008, both 2009 and 2010 were deflationary when measured by the consumer price index. The inflation rate remains relatively low, at an annual 1.9 percent in July 2011. Analyst forecasts see this rising to 3.2 percent for full-year 2011, while the IMF expects three percent, which is not high given a 20 percent-plus GDP growth rate. Qatar’s sizeable housing stock means supply has kept pace with demand, unlike in many other emerging markets where tight housing markets have led to rental inflation.

Matt Ghazarian is an editorial contributor at Oxford Business Group.


BALANCE SHEET

It’S A VISION THING

The concepts of a company having a ‘Vision’ and ‘Mission Statement’ are well known in business circles. But their contribution as a platform for growth and alignment, and thus to the bottom line and success of corporations, are often underestimated and underutilised, writes Janak patwari

I

n the early 1960s, when the race for space exploration was heating up, then United States president John F. Kennedy, visited the headquarters of the National Aeronautics and Space Administration (NASA). While touring the facility, the president saw a man mopping the floor. He stopped and asked the man what he did at NASA. The janitor proudly said to him, “Sir, I’m helping to put a man on the moon!” This story reflects how entrenched the mission of NASA was among its employees. It did not matter what job the janitor was responsible for, he was driven by the mission to place a man on the moon and he believed that his role contributed in the larger mission of NASA.

But while this story provides valuable lessons for today’s corporates, it also raises questions. Do the corporates across the globe today accord due importance to their company’s Vision and Mission? Are their Vision/Mission statements simple enough to connect with all employees and stakeholders? dEFInITIon and PuRPosE “The empires of the future are empires of the mind,” said Winston Churchill. In the modern corporate environment, these future empires are ostensibly built over the envisioned scenarios created in the minds of the founding entrepreneur, founding members, board or senior management of the company. Typically, companies design the following kinds of statement categories to

describe what the organisation stands and aspires to… Mission: This is the organisation’s fundamental reason for being. This usually does not change over long periods of time. Vision: This is a shared mental image or picture that describes a company’s desired future state. It is ambitious and acts as a source of focus and motivation. Goals: These represent the vision broken down to specific targets. While the Mission and Vision would be largely qualitative, the goals could be quantitative in nature. Core Values: Core Values are a set of timeless guiding principles of an organisation that represent the essence of a corporation’s character and personality and that of its owners and employees.


BALANCE SHEET

Once a company drafts the above statement aims for itself, it sets the direction in which the companies would focus their energies on. These statements form the platform upon which companies design their strategy. There are plenty of examples to show how these statements have set the direction for various companies. Case in point, Sony. Sony’s mission was to experience the sheer joy of innovation and the application of technology for the benefit and pleasure of the general public. From the middle of the 20th century, the company wanted their brand name to embody innovation and quality the world over and they wanted to change a global impression that Japanese products were inferior. They are guided by the values of encouraging individual ability and creativity and wanted to be a pioneer in their industry. Having set its direction using the above ambitions, as far back in 1950s, Sony of course has been fairly successful in achieving its goals. Walt Disney, on the other hand, was driven by the mission to make people happy. The Walt Disney Company is guided by the values of no cynicism and to unleash creativity, dreams and imagination. Guided by these statements, Disney too has been successful in its business. The bottom line is that for many senior management executives, vision remains merely some showcase statements that bear little relevance to reality. But for insightful strategists, vision is used to drive business forward. The vision/mission/goals and values provide a rallying point around which the entire organisation binds itself. This leads to a more unified and driven workforce that demonstrates a greater understanding and commitment towards the desired future state. ThE dRaFTIng PRocEss Any visioning exercise is usually conducted during a workshop or a series of workshops with the senior management. The participants of the visioning workshop should include senior management, business unit and departmental heads. 1. The participants should think through some of the probing questions, to explore what the company is best at, what their

aspirations are, what matters to them the most and what values are the most important to them. The objective is about exploring the right questions, based upon the company’s value system. The answers may be arrived at over multiple workshops. Employing an experienced neutral facilitator to conduct the visioning exercise helps keep things focused. 2. Prior to the visioning workshop, a high level assessment of the external environment (products, markets, customers, competitors and trends) and the internal environment (company structure, operations, technology and capabilities) should also be conducted. This helps set the baseline upon which discussions could be held at the workshop. 3. Conversations may also be held among senior executives and line personnel on the desired future state for the company, prior to the visioning workshop. These discussions

could then be synthesised in the workshop. Involvement makes the visioning process open, inclusive and successful. 4. After the visioning workshop, options for vision statements should be developed and their strategic implications explored. The varied views should be fine-tuned to develop one shared vision. Companies build their Vision, Mission, Goals and Values at varying levels of detail. While a company may design a compelling set, they are only as good as the strategic plan and work plans designed to support it. Irrespective of the length of these statements, what is important is that the message is communicated clearly. The ideal vision/mission statement should be rational, emotional, inspirational and aspirational. It should be clear and simple, future-focused, should provide hope and inspiration and be aligned with core values and customer needs.

VIsIonIng ExERcIsE PITFalls and TIPs FoR succEss The visioning exercise is a strong tool that companies can use to outline its way forward. However, companies should be careful about the pitfalls inherent in the process and take the necessary and adequate steps to ensure success. • Wise Management: The visioning process may encounter both co-operation and conflict and there may be political and cultural issues that need to be addressed. Management of all these issues would be critical to ensure a buy-in of the shared ultimate vision. • Communication: The senior and middle management should hold formal and informal meetings with the staff to explain the vision/mission/goals and values at both office/cafeteria and off site locations such as corporate retreats. • Alignment: Many companies have ambitious visions but do not have a plan to link it with action. Companies should align all aspects of the company including strategy, operations, organisation structure, selection of partners, suppliers and employees to the shared vision and values. • Relevance: Companies may need to revisit their vision/mission owing to any paradigm shifts, such as discontinuities in the market or the company being acquired or merged. The management should be careful in initiating this change to its vision/ mission and goals, lest it loses the core raison d’être of the company that has helped the company grow in the past. • Implementation: It is implementation and not the content of the statements that realise the desired change. Lack of implementation relegates the vision/mission/ goals and values as mere statements disconnected from reality. • Performance Measurement: Performance measures should be instituted to monitor and measure success in realising the vision. Performance measures are a powerful tool for change, by setting baseline values and establishing accountability, and ultimately achieving collective goals.

TheEDGE

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ECONOMIC BAROMETER

THUMBS UP THUMBS DOWN THE POWER AND INFLUENCE OF CREDIT RATINGS AGENCIES In this month’s Economic Barometer, Karim Nakhle looks at credit rating agencies, particularly the big three, Moody’s, Standard & Poor’s and Fitch. How exactly do they rate companies and governments? What purpose do they serve? How do they influence business and investments? And most importantly what is their net effect on the currently fragile global economy?


ECONOMIC BAROMETER

W

ith the recent and well-publicised downgrading of the United States’ (US) government credit rating from AAA to AA+, and a recent warning that Japan and China might suffer a similar fate, as well as the fact that the US Justice Department has launched an inquiry into the role Standard and Poor’s (S&P) played in the subprime crisis that sparked the economic downturn of 2008, international credit rating agencies (CRAs) have been in the news often lately. This has sparked much public interest in and questions about these sometimes-mysterious organisations. WHAT DO CREDIT RATINGS AGENCIES DO? Before any individual can qualify for a credit card, banks will run a credit check on their solvency. Similarly, the ratings agencies run credit checks on companies, countries and financial products. CRAs specialise in analysing and evaluating the creditworthiness of corporate and sovereign issuers of debt securities, debt obligations as well as the debt instruments themselves, and assigning credit ratings accordingly. In most cases, the issuers of securities are companies, special purpose entities, state and local governments, non-profit organisations, or national governments issuing debt-like securities (such as bonds) that can be traded on a secondary market. A credit rating for an issuer considers the issuer’s credit-worthiness (its ability to pay back a loan), and affects the interest rate applied to the particular security issued. Countries are rated on a sliding scale. The US, for example, had a top rating of AAA, which allowed it to borrow cash at cheap interest rates, before being downgraded to AA+ this year. Thus the lower the rating grade, the higher interest payments a nation must pay to attract investors to buy its bonds. Anything that slips to junk status – as Ireland, Portugal and Greek government bonds are rated – is considered a highly speculative investment. Furthermore, the pool of eligible investors is reduced and indeed many institutional investors, such as government pension funds, are forbidden to invest in junk-rated bonds, providing a good example of how the sway of ratings agencies can be considerable.

Traders work in the Standard Poor’s (S&P) 500 options pit at the Chicago Board Options Exchange on April 27, 2011 in Chicago in the United States. Credit ratings, whether they be of nations or corporations have the power to widely influence market volatility. (Image Brian Kersey/Getty Images)

WHO ARE THE CREDIT RATING AGENCIES? Historically, CRAs were created to give investors an unbiased assessment of investments, and investors paid for access to these ratings. However, in the 1970s CRAs started charging the issuers of new investments fees for ratings. In 1975, US legislators – ostensibly fearing a spate of unscrupulous ratings agencies – designated Standard & Poor’s, Moody’s and Fitch as the only organisations banks and brokers could use to evaluate the credit-worthiness of their products. Modern rating agencies thus fall into two categories: (i) recognised; and (ii) non-recognised. The former are recognised by supervisors in each country for regulatory purposes. As mentioned, the ‘big three’ are of course S&P, Moody’s Investor Services and Fitch Ratings. All originate in the US (although Fitch has dual headquarters in New York and London), which are internationally recognised and used all over the world. In the US, the ratings agencies are referred to as Nationally Recognized Statistical Rating Organizations (NRSRO). As of April 2011 only 10 NRSROs, were recognised by the American Security and Exchange Commission (SEC): Moody’s Investor Service, Standard & Poor’s, Fitch Ratings, Morningstar, Inc., Dominion Bond Rating Service, Ltd (DBRS), M. Best Company, Japan Credit Rating Agency, R&I Inc. (Rating and Investment Information, Inc.), Kroll Bond Rating Agency and Egan-Jones Rating Company. Many further international CRAs such as the Economist Intelligence Unit (EIU), Institutional Investor (II), and Euromoney are ‘non-recognised’ and there is a wide disparity among CRAs. They may also differ in size and scope (geographical and sectors) of coverage and there might be wide differences in their methodologies and definitions of the default risk, nullifying objective comparisons. WHY DO they WIELD SUCH INFLUENCE? Investors across the world look to credit rating agencies in order to judge where to place their investments in the market. For governments, the ratings agencies have a lot of power over the popularity of bonds: cash given to governments by investors that, over time, will pay a return on the original investment – unless that government defaults. The downgrade of Ireland as an example, signalled Moody’s belief that Ireland has a higher likelihood to default on investments. And therefore global investors have little appetite to invest in those bonds. In the new financial architecture, CRAs became more important in the management of both corporate and sovereign credit risk. Their role has received a boost from the revision by the Basel Committee

Ratings agencies have been criticised for having too much clout in jittery markets during the financial crisis. TheEDGE

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ECONOMIC BAROMETER

on Banking Supervision (BCBS) of capital standards, for banks culminating in Basel II and Basel III. HOW ARE GOVERNMENTS RATED? In rating sovereign debt, agencies look at economic and political risks. Economic risks include the existing debt burden, growth prospects and fiscal flexibility, while political risks include leadership stability, consensus on economic policy objectives, and barriers to global trade. Ratings depend on whether sovereign debt is denominated in local currency or foreign currency, because governments can often generate enough local currency to nominally meet local currency obligations, using open market operations (or quantitative easing). Printing currency in this way has inflationary implications, and S&P considers the risk of implied default through a devaluation of the currency. In the latest ratings craze, the buzz among financiers, investors and economists is all about who is going to downgrade which government next. Some feel it is a dangerous game being played by some CRA analysts, one that is contributing to continued economic volatility. WHERE TO FROM HERE? Credit ratings agencies have recently come under intense scrutiny. After watching many highly rated commercial debt securities become worthless several years ago, markets are now questioning the quality

Qatar and many of its neighbouring Gulf states such as Oman, Saudi Arabia and Kuwait are considered stable by the big ratings agencies. of CRA decisions to either downgrade or affirm the ratings of corporate and of sovereign debt. However, studies show that poorly rated corporate debt does default more frequently than highly rated debt. Some have argued this is not necessarily true of sovereign debt, but the relatively few instances of sovereign default since the growth in sovereign debt ratings, show that the predictions of CRAs might be correct more often than not. Ratings agencies have been criticised for having too much clout in jittery markets during the financial crisis. They were widely attacked for failing to warn of the risks posed by certain securities, in particular mortgage-backed securities, resulting in the US Justice Department inquiry. Having completely missed the build-up of risk that led to the global financial crisis in 2008, the agencies are now competing with one other to be the first to identify risks that may lead to the next crisis. At a time when the global economy is fragile and market sentiment is sensitive, unbalanced and unjustified rating decisions can initiate damaging self-fulfilling prophecies and certainly strengthen the arguments for tighter regulation of the rating agencies themselves. Nevertheless, for the time being they still seem to have the power to shake and rattle the global markets as they please. Below is a comparison in the ratings of the ‘big three’ recognised ratings agencies, Standard and Poor’s, Fitch Ratings and Moody’s. Because each agency’s approach is different, they are colour-coded in three categories.

Comparing the Agency Ratings

Deven Sharma, then-president of Standard & Poor’s, testifies before a subcommittee of the House Financial Services Committee in Washington, DC in the US on July 27, 2011. In September Sharma announced his decision to step down from his post and leave S&P as the ratings agency continues undergo the inquiry by the US Justice Department for its role in the positive rating of subprime mortgage securities just before the global downturn. (Image Corbis)

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TheEDGE

FITCH

MOODY’S

S&P

AAA

Aaa

AAA

AA+ AA AAA+ A ABBB+ BBB BBB-

Aa1 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3

AA+ AA AAA+ A ABBB+ BBB BBB-

BB+ BB BBB+ B BCCC

Ba1 Ba2 Ba3 B1 B2 B3 Caa Caa3 Ca

BB+ BB BBB+ B BCCC+ CCC CC

Prime

TOP NOTCH

High Grade Upper Medium Grade

UNDER OBSERVATION

Lower Medium Grade Non Investment Grade Speculative Highly Speculative Substantial Risks Extremely Speculative

JUNK


IN THE SPOTLIGHT

CYBEr hacKER

alERT

Businesses and private individuals face a growing threat from cyber criminals, and their secret weapon in the fight to crack computer users’ security may well be the users themselves, reports Mark Van Dijk


IN THE SPOTLIGHT

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n March this year, a small group of employees at the American computer security firm RSA received an e-mail with a Microsoft Word document attached. Because it was a suspicious e-mail from an unknown sender, RSA’s stateof-the-art security system automatically sent it to the employees’ spam folders. But one of the employees – perhaps out of curiosity – nonetheless opened the e-mail and the attached file. The file was infected with a malicious worm virus, and that employee’s simple double-click was exactly the unlocked door it needed. Within minutes, the virus was spread throughout RSA’s network, gathering the company’s secret information and intellectual property and secretly uploading it to an external outage storage site. And that was just the beginning. Using the cryptography information and Secure ID keys stolen from RSA, the hackers cracked the secure systems of one of RSA’s biggest clients: United States (US) aerospace and military equipment manufacturers Lockheed Martin. Now Lockheed Martin, which boasts $46-billion (QR167 billion) in annual revenue and includes the United States (US) Defense Department among its clients, was also compromised in a similar manner. Fortunately, they detected the security breach early and reacted immediately. All remote access for Lockheed Martin employees was disabled and all telecommuters were instructed to work from the office for at least a week. Within days, new Secure ID tokens (special keys which allow safe access to the company network) had been issued and the network passwords of all 133,000 employees had been reset. “As a result of the swift and deliberate actions taken to protect the network and increase IT security, our systems remain secure,” Lockheed Martin spokesperson Jennifer Whitlow said in an e-mailed statement. “No customer, program or employee personal data has been compromised”. The sense of relief was palpable. Their corporate security had been breached and all because an employee at another company had opened a seemingly innoccuous e-mail attachment.

Worldwide, operating remotely from anywhere at any time, cyber hackers are a threat to corporations, small businesses and governments alike. (Image Getty)

hacKERs’ anonymous When it began in the early 1990s, the Internet was seen as a massive virtual library where researchers could share information quickly and easily. Now in its third decade, the web is more like an enormous souq, where anything can be bought or sold, and where thieves and pickpockets lurk around every darkened corner. These are computer hackers: anonymous programmers who use viruses or hidden programs (also known as malware) to bypass the security systems on computers and mobile phones to steal personal information. In an online conference presented in July this year, Costin Raiu, director of the global research and analysis team at the

Russian computer security firm Kaspersky Lab, warned that if employees use their personal computer or mobile phone to send or read corporate e-mails, and then use that same device to access personal e-mails and social networking, they may be putting their company at risk too. As the Internet matures, the methods used by computer hackers are becoming increasingly advanced and their targets more ambitious. Yet few companies seem to appreciate the full extent of the danger. comPany comPRomIsE Earlier this year Microsoft published the results of its Security Intelligence Report.

If employees use their personal computer or mobile phone to send or read corporate e-mails, and then use that same device to access personal e-mails and social networking they may be putting their company at risk. TheEDGE

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caughT In ThE nET How to protect yourself and your business from security breaches: Use a safe Internet browser. If your browser releases regular security updates (at least once a week), you’re more likely to be safe from the latest viruses and hacking technology. Never open strange e-mail attachments. Hackers frequently use infected MS Word, PowerPoint or Excel documents to spread malware via e-mail.

In recent years the business of providing protective software to companies and state institutions has grown into a million dollar sector with players such as Symantec, Kaspersky and pictured here, Norton and McAfee. (Image Getty)

Among their findings, Microsoft’s researchers detected malware (short for ‘malicious software’) on an average of 8.7 of every 1000 computers scanned worldwide in the fourth quarter of 2010. Fortunately, Qatar still ranks significantly below the global average, with just 6.4 of every 1000 computers scanned here being infected with malware. For our GCC neighbours, however, the news is not so good. Oman (9) Bahrain (9), Kuwait (12) and Saudi Arabia (15.8) are all above the worldwide trend, with only the UAE (7.5) below the line. To combat this, the Qatari government is currently developing a national cyber crime legislation, which would require organisations to appoint staff to oversee processes involving the use of personal information and ensure that personnel are trained in information protection practices. Should the law be enacted, it would make Qatar the only country in the Middle East region to have national applicable data protection legislation. “Many SMEs throughout the GCC still haven’t recognised the tremendous impact a disaster such as hacking can have on their businesses,” Prajit Arakkal, director of distribution channel sales for online security specialists Symantec recently told the journal SME Advisor. “Despite warnings, it seems like many still think it can’t happen to them.”

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Symantec’s 2011 SME Disaster Preparedness Survey tells a similar tale: according to the survey, 57 percent of small businesses have no plan to deal with an outage or disruption to their computer or technology resources – but 81 percent of all respondents said they were somewhat very satisfied with their plans to deal with outages or disruptions, whether formal or informal. Either out of ignorance or out of naiveté, 84 percent stated that their computer systems were somewhat/completely protected. Raiu claims that 30 percent of all companies worldwide think they are specifically targeted by cyber attacks, while just nine percent of companies actually admit to having been the victim of at least one targeted attack. He adds that both these figures are very low, either because companies have not yet noticed that they’ve been compromised, or because they know they have, but refuse to admit it. “These are tailored attacks designed to break in...and steal your secrets,” Raiu says. “Many companies don’t want to talk about it.” Take, for example, the case of HBGary Federal, a firm that provides security services to the US government. In February this year, revealing plans to sell the company, chief executive officer Aaron Barr claimed

Beware social media. “On social networks, once a cyber criminal has access to someone’s account, they can post links to other websites on the victim’s profile,” warns Tamim Taufiq, head of consumer sales Middle East and North Africa at online security specialists Symantec. “These links will show up on the news feeds of the victim’s family and friends and lead them to infected sites with viruses and other nasty items.” Use your Smartphone sparingly. “Compromising a Smartphone can be easier than Mac or PC,” says Kaspersky Labs’ Costin Raiu. “What I think is really important here, if you have to use a Smartphone make sure you have a remote wipe solution so you can erase everything.” Always use strong passwords. If your password – or your any of your employees’ – is anything like p@55w0rd123 or 1qaz2wsx (which looks secure, until you type it into a QWERTY keyboard), hackers will be able to crack it in seconds. Update your password regularly, and use different passwords on all your online and company accounts. that HBGary Federal had the wherewithal to infiltrate the notorious hacker group Anonymous. Anonymous responded by breaking into HBGary Federal’s website, copying 20,000 e-mails belonging to Barr


IN THE SPOTLIGHT

sTay saFE ictQATAR is Qatar’s independent regulator and consumer advocate for information and communication technology. If you have any questions regarding ICT, go to www.ictqatar.qa. Q-CERT is Qatar’s Computer Emergency Response Team. To report online security issues, contact their hotline on +974 493 3408 or at incidents@ qcert.org.

White House press secretary Robert Gibbs announced in September of last year that his twitter account was hacked. (Image Corbis)

and company founder Greg Hoglund, and publishing them. HBGary Federal’s reputation was irreparably damaged. “Now,” claims Costin Raiu, “the company is worth less than one dollar.” Ironically, Barr and company, COO Ted Vera had made the hackers’ job easy by using simple passwords – and using those same passwords for their e-mail, Twitter and other social media sites. Vera was even using that very same password to access HBGary’s key Linux server. socIal sEcuRITy When it comes to keeping personal and corporate information secure, the challenges in Qatar and across the globe are immense. As if to prove this, the Black Hat Cyber Security Convention held in Las Vegas in August saw security researchers and hackers demonstrating an eye-opening array of technologies designed to exploit weaknesses in electronic security systems. Among the displays were a small aerial drone that flies around impersonating mobile phone towers and recording private phone calls, and a new program that allows car thieves to unlock and start a car using only a

laptop and a mobile phone. The next Black Hat Convention will be held at the Emirates Palace in Abu Dhabi this December and promises to highlight the latest vulnerabilities in computer technology. The subject brings to mind the television campaign launched here by ictQATAR – the Supreme Council of Information and Communication Technology, established in 2004 by HH the Emir Sheikh Hamad bin Khalifa Al Thani – which bears the message: “On the Internet, Your Privacy is Your Responsibility”. Indeed, Qatar is delicately poised in terms of information and communication technology. On one hand, the country’s online infrastructure relies entirely on a single Internet provider, Qatar Telecommunications (Qtel), making it, according to some observers, the Middle East country most vulnerable to a complete Internet shutdown. Yet on the other, Qatar ranks in an impressive 25th place overall in the 2010-11 Global Information Technology Report, the World Economic Forum’s annual assessment of nations’ international ITC competitiveness. The world is becoming more and more wired and that brings with it greater

conveniences and greater risks. Even as ictQATAR conducts its “Promise of e” campaign, focusing on the power of tehnology to enrich people’s lives, it warns that “the Internet is everything you want, but also a lot of what you don’t.” A sobering reminder of this came early one morning in September last year, when the White House press secretary Robert Gibbs sent out a garbled message on his Twitter account: “PressSec RT @doog_: http://t.co/@”onmouseover=”document. getElementById(‘status’).value=’RT doog_’;$(‘.status-update-form’). submit();”class=”modal ...” After a string of similar tweets, Gibbs sent out another: “My Twitter went haywire absolutely no clue why it sent that message or even what it is... paging the tech guys...” To Gibbs and his 97,000-odd Twitter followers, the messages looked like gibberish. It was, in fact, a javascript-based virus that spread merely by users running their mouse cursor over a link. Norwegian computer programmer Magnus Holm later claimed credit/blame for the hack. “I just started a Twitter worm,” he tweeted on @judofyr, adding later that he’d spotted a hole in Twitter’s online security and simply wanted to see if he could exploit it without doing any ‘real’ harm, he told the BBC as Twitter technicians scrambled to plug the gap. For Gibbs – and for the 133,000 Twitter users in Qatar and almost 200 million more around the world – it was yet another chilling reminder of how insecure our online security really is, and how aware business needs to be regarding this ever increasing threat. TheEDGE

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Hollywood actor Antonio Banderas stars in the big budget movie epic Black Gold, a portion of which was filmed in Qatar. The film premieres this month at the Doha Tribeca Film Festival and is being seen by many as an ‘acid test’ of the local industry. (Image courtesy DTFF)

BIG SCREEN BIG MONEY?

This year marks the third anniversary of the Doha Tribeca Film Festival and to open proceedings will be the premiere of the first locally produced Hollywood blockbuster, Black Gold. But amid the glitz and glamour, what knock-on effect has this international event had for the fledgling Qatar and regional film and cinema industry? And is the international buzz replicated in box office sales for locally produced movies? Rachel Morris investigates.

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n October 2011 the first film funded by the Doha Film Institute (DFI) will open. Jean-Jacques Annaud’s US$55 million (QR200 million) Arabian epic Black Gold, co-funded by the DFI and Tarak Ben Ammar’s Quinta Communications, will premiere to the world at this year’s Doha Tribeca Film Festival (DTFF). “We always aimed to have the world premiere at Doha Tribeca because it’s the perfect platform for this film, since it will allow us to maximise exploration of the film’s Arab cultural setting, while giving us access to international media,” Quinta Communications’ Ali Jaafar told industry publicationVariety magazine earlier this year.


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For many years stories from the Middle East and surrounding region have fascinated filmmakers and Hollywood. But the hype and glamour of the DTFF aside, a quick check of the cinemas in Qatar reveals a different scene – screens dominated by Hollywood and Bollywood classics. Qatar Cinema, who earlier this year signed a QR2 billion merger deal with Q Media, plan to open 50 more cinemas in the coming three years, investing more than QR1 billion to satisfy the country’s movie cravings. “After significant study and planning, we have decided to invest more than QR1 billion in the next three years to open more than 50 state-of-the-art multiplex facilities equipped with the latest technology in the field,” Q Media’s chairman, Sheikh Alhussain bin Ali bin Ahmed Al Thani says. The company also opened a women’s only cinema at Aspire Zone in 2011, screening Hollywood and Arabic films. Meanwhile, Qatar Cinema’s profits soared five percent in the first half of 2011 buoyed by blockbusters and franchises such as Harry Potter and the Deathly Hallows Part 2 and Pirates of the Caribbean. With its huge South Asian population, Bollywood also brings in the film lovers with one of the biggest releases of 2011, Ready, proving popular. But regionally-made success stories are few and far between. United Arab Emirates (UAE) production City of Life, telling the intertwined stories of an Emirati, a Russian flight attendant and an Indian taxi driver all living in Dubai, released in 2010, was a hit in the UAE, making AED500,000 (QR495, 576) in its opening weekend. Yet despite high profile releases at festivals around the world, it failed to ignite major interest. In Qatar, aside from the festival, DFI also runs an in-house production arm and yearround training, development and production support. A host of Arab filmmakers have benefited from this set up including Nadine Labaki, whose second film Where Do We Go Now? premiered at the Cannes Film Festival in May this year. And Ibrahim El Batout received backing from the DFI for his Egyptian renewal-themed Hawi, which won top Arab film awards at Doha Tribeca in 2010. But in terms of blockbuster success, many

Actor William Shimell, executive director of the Doha Tribeca Film Festival Amanda Palmer, and Doha Tribeca Film Festival co-programmer Hania Mroue arrive at a premiere during the 2010 Doha Tribeca Film Festival held at the Katara Cinema. (Image Andrew H. Walker/Getty Images for DTFF)

are looking towards Black Gold to deliver that and according to DFI executive director Amanda Palmer, the co-production could be the one to take Qatar’s film industry forward. “Black Gold really ticked so many boxes when we were looking for potential international co-productions and ultimately provided a great opportunity to take the regional film industry to the next level,” Palmer explains. “For one, it is a truly authentic Arab story, charting an important slice of the region’s history, albeit in a very modern and engaging way. I know that Jean-Jacques Annaud and Tarak Ben Ammar’s placed a real emphasis on capturing the essence of the region with this film, and I think they have managed to shine quite an accurate light on a part of the world that many people want to know more about – there is no doubt that this film offers some very true and unique insights into the region’s history, culture and traditions.” Palmer believes that Black Gold will strike a chord in the region because of the subject matter and the recognisable locales and of course storyline. TheEDGE

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Executive director of the Doha Tribeca Film Festival, Amanda Palmer, speaks at a press conference at the Doha Tribeca Film Festival last year in Doha. The event, the Doha Film Institute and recent filming of Black Gold have put Qatar’s fledgling film industry on the world cinematic map. (Image Andrew H. Walker/Getty Images)

“After significant study and planning, we have decided to invest more than QR1 billion in the next three years to open more than 50 state-of-the-art multiplex facilities equipped with the latest technology in the field.” - Q Media chairman Sheikh Alhussain bin Ali bin Ahmed Al Thani. “I think audiences within the region will also be responsive to the fact that this is a film with an Arab hero, which will be distributed and shown across the world, through Warner Brothers and Universal Pictures,” Palmer says. “I think this is particularly important, because mainstream cinema depictions of Arabs have historically been negative, based on inaccurate stereotypes, propaganda and fear. This film moves away from a negative typecast of Arabs, which is great for both regional and international audiences. “The production locations for the film are also significant, as much of it was shot in Qatar and Tunisia, during the Tunisian revolution. From an industry development perspective, the film thus provided a unique opportunity to test the region’s production capabilities. In Qatar

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alone we spent four weeks shooting the film’s epic battle scenes, which meant that we had to mobilise various national industry sectors as well as the general public, from local ministries, government officers to vendors and volunteers - and that’s naming just a few.” Palmer also says that Black Gold, with its star power and international flavour could be the film that makes Hollywood sit up and take notice but also points to the growing number of locally trained talent from writers through to post-production. “The distribution of this film to global audiences will hopefully send a message to the world that there is a legitimate industry developing here in the Middle East, impelled by insightful storytellers and truly engaged audiences,” she tells TheEDGE. “The film industry in this region is strongly committed to this transfer of knowledge, and understanding film, and there are so many people ambitiously striving, in front of and behind the camera, to produce high quality films and creative output. The region has a lot to give in terms of co-production, and the exposure of the film before international audiences and industry professionals will hopefully pave the way for future coproductions that showcase Arab talent and creativity in the right spirits.” Palmer also says that unlike other more mainstream production houses and financiers, the DFI and partners have the luxury of being able to be more altruistic when choosing projects to back. “I’m glad you question how Qatar’s involvement with the film benefitted Arab talent, because this really is the key consideration of DFI’s investment in international co-productions,” she says. “Obviously film financing has to take into account the commercial prospects of films, but when you are trying to build a sustainable film industry, your core focus really needs to be on educating and cultivating talent from within the region, in order to develop a skilled film community and a strong infrastructure to support it. “Central to achieving such is the provision of practical training opportunities for aspirant film talent,” says Palmer. “Black Gold was fantastic in this respect, because we were able


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to shoot the film’s battle scenes here in Qatar for four weeks, which meant that we could send students to intern on-set and on-location. For example, three DFI students interned on the project, including one of our Education staff members, Mohammad Al Ibrahim, who served as a third assistant director on-set and was also cast for a minor role in the film. In addition, approximately 20 members of DFI’s content team were on-ground day-in day-out capturing footage for a behind-thescenes special, which they are now currently in the process of cutting. The general local community was also heavily involved in the making of the film, with over 200 residents and locals from Doha serving various roles; behind and in front of camera.” Says Palmer: “For us, film financing plays an enormous role in supporting filmmaking in Qatar and throughout the MENA region. This year, we expanded our film financing arm and have already given grants to 25 new Middle East and North African projects, and we have undertaken to do the same every year from now on. In addition to our grants, our co-productions are central to building filmmaking experience and know-how in the local industry. “Our core focuses, when selecting coproductions, are not only to invest in credible, profitable films, but to also ensure that they have educational and capacity development opportunities for the region.” There are some industry insiders who believe that the Arab Spring that spread across the region in 2011 and the compelling narratives that it has produced will in fact drive this interest in regionally produced films, internationally and locally. Some say regional audiences will, many for the first time, be able to see and relate to stories, which resonate with their own identifiable experiences. Nicole Mackey, executive vice president, sales and acquisitions, for major industry player Fortissimo Films, said earlier this year: “People want to hear the stories behind today’s Egypt and see the real lives of people across the Middle East.” Former French film StudioCanal heavyweight Frederic Sichler, who launched Arab-focused production house Pacha

BLACK GOLD: QATAR’S STARRING ROLE

Starring heartthrob Antonio Banderas and Slumdog Millionaire star Frieda Pinto, Black Gold is a drama set in the Arab world amid the backdrop of the turbulent 1930s. It tells the story of two warring Emirs who make a truce to mutually respect a no man’s land that lies between their desert kingdoms. But when oil is discovered tensions arise as each fights for control of the area, known as the “Yellow Belt”, and the riches it promises to yield for their countries. The film’s director, Jean Jacques Annaud, is better known for his epics including Seven Years in Tibet. Many scenes were filmed on location in Qatar (as well as Tunisia) in the dunes around Mesaieed. Qatar also offered musical talent for Black Gold in the form of local vocalist Fahad Al Kubaisi. Al Kubaisi worked on the film’s opening track, which was recorded with film-music legend, James Horner - who has worked on the scores for blockbusters including Troy, Avatar and Titanic – at London’s famed Abbey Road Studios. Al Kubaisi recorded another of the film’s music tracks, a traditional Bedouin song, along with Qatari composer Abdulla Al Mannai.

Earlier in 2011 Qatar Cinema year signed a QR2 billion merger deal with Q Media, who plan to open 50 more cinemas in the coming three years, investing more than QR1 billion to satisfy the country’s movie cravings.

Pictures – whose selling point is ‘New Generations, New Films’ – at this year’s Cannes Film Festival, is confident that the best is yet to come from this region. Pacha unveiled its latest offering, Tahrir – The Good, The Bad, The Politician at the recent Toronto and Venice film festivals to much acclaim. “There’s no question that this new generation of young Arab filmmakers will be delivering a series of cinematic jewels over the next two-three years,” he says. But how much of this backing is translated into real box office gold both regionally and internationally? Palmer, a long-time advocate and public face of Qatar’s emerging cinema and film scene, stops short of making a

prediction as to the film’s success. “It is always difficult to make predictions about the commercial success of films because there are so many different variables that come into play – unfortunately quality does not always transfer to quantity, and vice versa,” she tells TheEDGE. “But I will say that we are certainly aiming to give this film major international exposure with the help of Warner Brothers and Universal Pictures, and we obviously hope that global audiences receive the film favourably. “Once the film releases internationally on November 23, I think we will have a much better idea about the film’s box office numbers,” finishes Palmer. TheEDGE

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FROM GREEN TO

Qatar General Electricity and Water Corporation (Kahramaa) will open its awareness park, located in Al Thumama area of Doha, in 2013. The fully sustainable building will demonstrate the processes of electricity generation and water desalination and serve as an innovative source of entertainment and knowledge, especially for children.

SUSTAINABLE The theory of ‘green building’ does not necessarily relate to the colour itself, it goes far beyond that to protecting the environment and the use of vegetation that is naturally grown in the region, explains Erika Widén

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he state of Qatar was the number one producer of carbon dioxide emissions per capita in the world in 2004, and is the world’s largest consumer of energy. Only three countries in the world produce less water than Qatar from freshwater sources and all potable water in the Gulf state is produced by desalination plants. These main factors have a negative impact on the environment since to generate power, energy is consumed, and therefore creates an unwanted by-product: pollution. “The utilisation of nature, such as the direction of the wind and the sun plays a very important role in being green or sustainable. It is now

a philosophy in today’s world as everybody is talking about it and it will definitely be the new trend for the new generation of architecture. But not only for buildings, [as] they are also trying to make sure infrastructure adheres to being green,” says Ibrahim Mohamed Jaidah, board member for Qatar Green Building Council (QGBC). When the first Rio De Janeiro Earth Summit was held in the 90s, enthused scientists, governments, individuals and all concerned parties around the sphere committed to saving the planet. Among the topics discussed were climate change, the depletion of fossil fuels and over consumption of natural resources, the use of which in construction


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The training is based on a combined global standard. As of today, there are more than 140 standards depending on their region of origin, such as the United States Leadership in Energy and Environment Design (American/U.S Leed), European Standard, and the United Kingdom Building Research Establishment Environmental Assessment Method (UK BREEAM) to name a few. These assessments are important in order to acquire a certificate, which allows the developers to proceed to the next developing phase.

“If you look at the Qatar National Master Plan 2030, it is very clear that there is a big emphasis on sustainability and to be ‘green’ ,“ says Dr. Yousef Al Horr, founder and chairman of The Gulf Organisation for Research & Development.

primed the concept of ‘Green Building’, now commonly termed as sustainable building or green construction. In essence, ‘green building’ aims for a unified and synergistic design to new developments and/or existing structures. This includes the building’s life cycle, from the site location to design construction, operation, maintenance, renovation and demolition, all of which complement the classical building design concerns of economy, utility, durability and comfort. The theory’s objective is to reduce the overall impact of the building’s environment on human health and its natural environment by efficiently using energy, water and other resources to protect the inhabitants health, improve employee productivity, reduce waste and pollution in general. The direction of prevailing winds, the sun’s rays and the usage of water also play important roles in creating a sustainable development. Qatar, being an arid climate, does not have a lot of greenery; however it has its own natural vegetation such as the Sidra tree and Dhreima flower which if used in the construction process, contribute to the overall sustainability. “Green is not necessarily the colour ‘green’. You can have the most beautiful white building that is very ‘green’ and sustainable, but it has nothing to do with the colour of green,” adds Jaidah. “In other words it doesn’t have to be full of plants to be considered ‘green’. I can have the most beautiful desert dwelling with hardly any desert shrubs and it could be the most sustainable building in terms of the environment.” TRAINING PROCESS In line with the nation’s 2030 vision, Qatar is determined to be a role model and green capital among the Middle East in sustainable development and climate change. But in order for a local project to be regarded as sustainable development, there is a certain training process that is mandatory at the developing stage, before the architectural drawings are even drafted.

QATARI STANDARD The Gulf Organisation for Research and Development (GORD) is a 100 percent Qatari governmental group promoting and enforcing ways buildings are designed and built. In 2007, GORD began to work with international research institutes and organisations from around the globe. Of the 140 rating standards existing worldwide, GORD narrowed it down to 40. After analysing the first cycle of assessment of each, GORD discovered that within those 40 systems for rating sustainability, six were more established systems. These six are the UK BREEAM, American LEED, Japanese CASBEE, Hong Kong SPEE TOOL, GREEN GLOBES and the Canadian system. Each one was subjected to another cycle of assessment and is considered as a parent of the local originating standard, called Qatar Sustainability Assessment System (QSAS). QSAS is the first of its kind, a sustainability rating system in the Middle East, customised to Qatar’s social and business culture, policies and local environment. It consists of eight major categories, criteria and measurements which are a valuable method in design and overall development.

The Qatar National Museum, will be the first large-scale sustainable development in the heart of Doha that visitors to Qatar will see as they arrive at the airport.

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“QSAS is the only system, worldwide which integrates culture and heritage within the green buildings. We do want modern architectural aspects, but we don’t want to forget completely the cultural context,” explains Dr. Yousef Al Horr, founder and chairman of GORD. “We want to preserve the identity of this part of the world. Another important aspect of QSAS is the economic concern; we promote local products, contractors and businesses to support the local economy. Ever since QSAS was officially launched in April 2009 at the Global City Conference held in Abu Dhabi, more than128 buildings in Qatar have been certified through QSAS. In fact, the standard has been adopted as part of the environmental design curriculum at King Fahd University, Qatar University and the University of Khartoum in Sudan. Earlier this year, QSAS was integrated into the Qatar Construction Specifications (QCS) to ensure certain criteria are mandatory for new buildings around the nation, based on legislation and the administrative cabinet, Decree Number 38 for year 2010 Section 7 that approves the new construction standard ‘QCS 2010’. From 2011 onwards, it will be compulsory for any high-rise building with an area of 10,000 square metres or above to comply with QSAS. In addition, new developing residential compounds that consist of square footage of 20,000 metres or more will have to abide to this ‘green’ by-law. EIGHT CATEGORIES “We do share similar categories with other international systems, and some of them are very unique to us such as the cultural and economic value as well as the management of operations, which are very unique to QSAS,” says Dr. Al Horr. “It is now the most comprehensive system in the world. We have schemes set up for sport venues or facilities and developed QSAS for mosques.” The measuring system to be certified as ‘green’ is relatively complex. There are eight main categories that require certain mandatory measures to calculate and evaluate the rating of the project, based on one star as the lowest rating, to six stars as the highest. The categories are urban connectivity, site, energy, water, materials, indoor environment, cultural and economic value, and management and operations. The Urban Connectivity (UC) consists of factors associated with the urban environment such as zoning, transportation networks and loadings. Loadings on the urban environment include traffic congestion and pollution. The Site (S) consists of factors associated with the land use such as [natural] conservation and site selection, planning and development. The Energy (E) consists of factors associated with energy demand on buildings, the efficiency of energy delivery, and the use of fossil energy sources that result in harmful emissions. The Water (W) category consists of factors associated with water consumption and its associated burden on municipal supply and treatment systems. The Material (M) category consists of factors associated with material extraction, processing, manufacturing, distribution, use/reuse, and disposal.

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GREEN BUILDING: QATAR cHALLenges 1. 2. 3. 4. 5. 6. 7. 8.

Builder incentives Product/systems information and sourcing Client knowledge Perceived cost increases Actual cost increase Lack of knowledge how to build ‘green’ Certification cost/paperwork Lack of regulations/building codes

The Qatar Sustainability Assessment System is a first, a sustainable rating system in the Middle East, customised to Qatar’s unique culture, policies and local environment. The Indoor Environment (IE) consists of factors associated with indoor environmental quality such as thermal comfort, air quality, acoustic quality, and light quality. The Cultural and Economic Value (CE) consists of factors associated with cultural conservation and support of the economy. Finally, the Management and Operations (MO) category consists of factors associated with building design management and operations. INCENTIVE ACTION For now, GORD is focusing on government projects, mega developments as well as commercial and private buildings, but only of specific sizes. “We aim to learn from this experience over the two to three years and sit back and evaluate and then plan for the next phase after looking at the results,” says Dr. Al Horr. QSAS will soon be officially called the Gulf Sustainability Assessment System (GSAS) since it shares the same climate characteristics as Qatar’s neighbouring countries and is approved as the most adequate standard for the region, as it satisfies the local community needs. This year the GORD-awarded Kahramaa Awareness Park was awarded by GORD with a five star rating and the Qatar National Museum four stars.


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Qatar is the largest consumer of energy and the one number one producer of carbon dioxide emissions per capita in the world.

Ahmad Jasiim Al-Jolo left and Ibrahim Mohamed Jaidah, right, board members for The Qatar Green Council, explained to TheEDGE their role in creating awareness of ‘green’.

Qatar is also the first country in the world to prioritise an incentive to support developers to go green. In western countries, this is commonly practiced by the decrease of taxes, but since a decrease of tariffs or taxes is not applicable in this part of the world, a different incentive is offered. Developers who achieve more than a two star rating are given a five percent incentive increase in construction area, known as ‘the land built up area’ and developers with a four star rating are given a ten percent increase in the ‘land built up area’. GREEN BENEFITS When questioned on construction costs, Dr. Horr notes the increase of costs of going green is not that much in comparison to ordinary construction. “It is only five to 10 percent on the capital cost and it can be recovered throughout the operation, like a higher rate for rent, so it pays off in the long term,” he says. “There will be savings in energy, in water, and in the use of materials. This will be a great benefit to the client himself as well as to the whole building,” agrees Ahmed Al Jolo, board member for Qatar Green Building Council. In 2009, the Qatar Green Building Council (QGBC) was officially launched under the patronage of HH Sheikha Mozah Bint Nasser Al Missned and Qatar Foundation for Education, Science and Community

Development. QGBC is an independent non-profit organisation committed to developing a sustainable approach to design and development of buildings. QGBC’s only mission is to educate the public and create awareness to develop a clear set of green building and environmental guidelines. The QGBC consists of seven local board members with degrees in engineering and architecture. “ We encourage being sustainable, to be green is what we are sort of preaching. Of course we encourage the QSAS simply because it addresses the local context more than anything else,” says Jaidah. Al Jolo emphasises his belief in educating the children from kindergarten to high school level and moving on to construction companies to ensure the awareness. “Even now some construction companies and developers are not even aware of the benefits of being green,” he says. “The problem is with the clients here. They are not aware of the hidden costs. When you are going ‘green’, in the long-term cycle of the project it would always work out a lot cheaper than not going ‘green’. Mostly here, the clients are always looking at the initial costs, and part of our job here is to educate people that to go ‘green’ is not that expensive when you look at the life cycle of the project.” Buildings are one of the top contributors to global warming, but emissions of these new buildings are lower and the consumption of energy is less. An important aspect of QSAS also includes the national economy. “We promote local products, contractors, the use of local businesses to support the local economy,” says Dr. Horr, “and if there is an existing structure we encourage people to re-use it instead of throwing it away. If this existing structure cannot be used on site then you can ship it somewhere else or maybe even recycle the materials.” Marketing consultants are also following the trend and using the concept of ‘green’ as a selling tool because they are promoting apartments that are healthy for the tenants, which will cut the monthly costs and are environmentally friendly. “Green buildings are good because they incorporate a lot of recycled materials which helps limit the amount of landfill needed due to the dumping of waste. It also helps when using recycled materials,” says Al Jolo, “because it limits the need for the development of new materials, which will cause more pollution and as a result reduce the impact the construction of the building has on the environment.” TheEDGE

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THE PERSONAL

T UCH

As president and CEO of GE in the Middle East, North Africa and Turkey, Nabil Habayeb has more than 30 years of involvement across the company’s operations in the region, as well as specifically in Qatar, which is one of the energy multinational’s key markets in the Arab world. In Doha as a guest for the country’s 40th anniversary celebrations in late September, Habayeb spoke exclusively to TheEDGE’s Miles Masterson about GE’s relationship with Qatar, and also revealed how he too has an intimate, personal connection with the country.


Business interview

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abil Habayeb was born and educated in Lebanon, and is now based at GE’s regional headquarters in Dubai. Though soft spoken and amiable, when discussing GE’s various operations in Qatar and the company’s close relationship with Doha, the importance of the country to Hayabeb is obvious in his conviction. GE has been operating in Qatar for more than 30 years and Hayabeb – who holds a Bachelors and Masters degree in Mechanical Engineering – has been working in the company since 1982. GE, which so far has injected more than US$100 million (QR364 million) into Qatar, he says, is heavily invested in the country’s future. GE’s activities in Qatar are as wideranging as the government’s diversification agenda. The company’s operations naturally encompass involvement in the oil and gas sector, in the form of a long-term partnership with RasGas’ liquefied natural gas (LNG) and sales production complex in Ras Laffan, and notably but less recently, with the building of five ‘super energy’ trains – liquefaction purification facilities – in 2005. It includes Qatar Service Centre of Oil and Gas, also in Ras Laffan, which among other things focuses on the research and development of new technologies and environmentally friendly deployment of the country’s hydrocarbon reserves, with special attention being paid to the application of advanced turbo machinery. Beyond that, in April 2011 GE opened its Advanced Technology Research Centre (GEATRC) at Qatar Science and Technology Park (QSTP) in Doha. According to a company press statement, this is in line with GE’s four business divisions in Oil and Gas, Global Research, Aviation and Healthcare, and the facility aims to focus on applied research and knowledge transfer in these key areas, in order to augment and help to drive Qatar’s social and economic growth. Also opened in Doha in April 2011, GE has a Global Water Sustainability Centre in partnership with ConocoPhillips, to innovate water solutions for hydrocarbon sector, as well as municipal and agricultural use. Moreover, GE has other vital partnerships here, with Qatar Steel to provide complete

GE has invested US$50 million (QR182 million) in the Advanced Technology Research Centre (GEATRC) at the Qatar Science and Technology Park (QSTP), bringing the company’s total investment in Qatar to US$100 million (QR364 million). Pictured is one of the aviation bays used in the facility to provide education and training in jet engine maintenance and technical and mechanical services to airline customers.

“When we take a look at GE’s portfolio, we are a company that has 20 years of strong focus in research and development, which is where education becomes extremely important. So the match between what Qatar needs and what GE can provide is great. It is a perfect fit.” production management solutions; Qatar Airlines, to provide GEnx engines for its 60-strong Airbus A350 fleet; Al Shaheen Energy in gas pipelines solutions and aftermarket services in turbo machinery; and manufacturing, in the form a facility opened in late 2010 in partnership with Doha’s Al

Farraj Trading and Manufacturing Company (FTMC) to assemble GE electrical equipment for supply throughout the region. The company also has a 50-50 partnership with Qatar Foundation (QF) in the form of a headquarters for GE’s healthcare information technology (IT), which aims to transform TheEDGE

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Qatar into a global a hub for innovation, entrepreneurship, research and education in this sector. “When we take a look at GE’s portfolio,” Hayabeb expands, “we are a company that has 20 years of strong focus in research and development, which is where education becomes extremely important. So the match between what Qatar needs and what GE can provide is great. “It is a perfect fit.” VALUED PARTNERSHIPS Hayabeb is complimentary about how Qatar’s leadership has encouraged collaboration with companies such as GE. “What we have seen in Qatar is that the leadership, particularly the leadership in the Ministry of Energy and Qatar Petroleum and His Excellency Abdulla Al Attiyah,” he explains, “and now Dr. Salah Al Sada as well, carrying on – has been great in being able to line up companies like GE; [to] trust in what we say...and taking a chance on big multinationals and technology. The super energy trains that we built were breakthrough technologies and Qatar was the first country in the world to take this technology and implement it and that is because of the trust in GE…and in our capability.” GE’s Oil and Gas Centre in Ras Laffan, feels Hayabeb, has also been a great example of the company’s commitment in the sector. “We moved our regional headquarters for oil and gas to be based in Doha,” he adds. “If we take a look at the others…the same examples can be applied in healthcare [and the] water sector, as well as Qatar Airways. “Qatar Airways is one of the major airlines for us,” Hayabeb continues, using GE’s relationship with the Doha-based airline as an example of how Qataris value working together with companies such as GE. Qatar’s officials and businessmen, he says, understand that open collaboration with large companies – albeit underpinned by a vigorous deal-making process and subsequent accountability to deliver on expectations – is key to achieving the country’s goals. “The biggest thing that Qatar has is that you get great people who value the concept of partnership,” adds Hayabeb, “because the

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“I think it is clear that everybody is focusing on diversification of the economy for sustainability. I think leveraging technology, spending on education and improving the lives of people and focusing on innovation are the areas that will help sustain and overcome a lot of these issues.” growth is huge, the opportunity is huge and we can only realise it by partnering on it.” GE’s collaboration with Qatar’s FTMC in the creation of the Al Farraj electrical component facility, Habayeb agrees, is another good example of a strong and productive local partnership. Though TheEDGE put forward that Qatar is not necessarily known for smaller scale manufacturing, Nabayeb countered that with the downstream petrochemical plants and other kinds of industry, the country is in fact geared towards this kind of production which makes it as good a location for manufacturing as any country in the region. “I think you get the same parameter scale,” he maintains. “You get the same benefits. You can discover different markets. You get a strong partner [so] this whole thing...if it makes economic sense, we will do it.” A FUTURE INVESTMENT Nevertheless, a cynic may observe Qatar’s phenomenal economic growth, and the potential retruns this presents to outside companies that could be construed as opportunistic. Some are suspected of only entering the state to turn as much profit as possible, but Hayabeb is adamant GE is not a company of that ilk. The firm, he explains, is involved here in many different industries. Some of these industries may see growth at a time when others may slow down – and their

cycle maybe out of sync with overall growth – so they have taken a wider and more longterm view out of necessity. “What differentiates us from others is that we are not just a company that goes in and invests in one sector or have one product to sell,” he underlines further. “It is not like we are a bank that we come in and say ‘we want money from here’. When there is a problem in a hospital, we are not going to pack up and go, because we have invested in healthcare [as well as] education and aviation.” Indeed, Habayeb again turns to GE’s involvement in the latter sector to make his point. The training facility at GEATRC in Doha, he says, is the largest of its kind outside of the United States (US). Among others, the facility provides education and training in jet engine maintenance and technical and mechanical services to airline customers. This, Habayeb adds, is not just important for Qatar but also for the region, as individuals from the Gulf, Ethopia and as far afield as Germany have been through the facility. We have trained over a 160 people so far,” says Habayeb. “That is progress specifically in line with what our partners are expecting.” Another example Habayeb then mentions is in the healthcare sector and the partnership with QF, particularly in mammography, which is of notable significance as breast cancer is on the increase in the region. “The research we are doing has been a great success,”


Business interview

he says, “and we are going to apply that technology globally. So overall we are very pleased with the progress of these centres.” WATER AND ENERGY Effective water conservation – especially with regard to use in industrial equipment, in an economy so reliant on hydrocarbon sector – and the development of sustainable energy practices and solutions for the future, are a further two areas where GE is highly active in Qatar. Beginning with the former, GE’s partnership with ConocoPhillips in the Global Water Sustainability Centre, is high priority project that has already reaped benefits for the industry and beyond in the eight months since its inauguration. Much research here, clarifies Habayeb, is focused on purifying water used in an industrial application for re-use. Developing technology for effective desalination is another of GE’s focuses in the water sector, as is recycling municipal wastewater for use in farming and similar purposes. “We can actually take raw sewage and turn that better than the World Health Organisation (WHO) standard for drinking water,” he exemplifies. “A lot of people would not drink that, but they can use it for irrigation.” “This is in addition to awareness and education around conservation of energy, because it is a very important necessity and there is a crisis,” Habayeb adds. “The important thing is to [also] continue looking at means to reduce the cost of the water.” GE is also very much involved in renewable energy. Habayeb discusses how, though it is not a large focus on the Gulf (an area not known for excessive movement of surface air), wind power is one of the largest businesses that GE have within its energy sector and this has been a great success around the world. However, thanks to an abundance of sunlight here, solar energy is an area of considerable focus, particularly when it comes to enhance the energy efficiency of gas turbines, for example. “We just announced recently that the FlexEfficiency gas turbine,” he describes, “which is combined with concentrated solar power and raises the efficiency of a whole plant to close to 70 percent, which is by far highest than any other manufacturer.”

GE’s top executive in the Middle East is proud of his company’s investment in and commitment to Qatar and is complimentary on how Doha leadership and business sectors have embraced working together for mutual benefit.

Nuclear energy, Habayeb continues, is also another aspect of this sector that GE is taking seriously. Despite much protestation from environmental activists following the disaster at Fukishima in Japan earlier this year, Habayeb is adamant that this sector is ripe for growth in the Gulf and his company will be involved in the development of this energy source in years to come. “Nuclear energy is something that people are very much looking at and exploring as an alternative means of power generation,” he says. “Nuclear energy is a big thing that is important for that governments of the region,” Habayeb furthers. “Qatar has announced that they are also looking at the nuclear energy, Jordan, UAE, Turkey, Saudi Arabia, Egypt, Morocco…and when the governments fulfil the legal requirements on a global basis to proceed with that, we will then be in a position to talk to them about what we can provide from a technology point of view. “I think it is clear that everybody is focusing on diversification of the economy for sustainability. People are focusing on the whole issue of food security, water security and energy security,” he adds. “Leveraging technology, spending on education and improving the lives of people and focusing on innovation are the areas that will help sustain and overcome many of these issues.”

A PERSONAL CONNECTION When the conversation returns to GE’s presence in the region, Habeyeb becomes animated, and goes back to his earlier point about remaining in Qatar for the long haul. “Being on the ground makes all difference,” he says. “It is about a personal touch. It is about continuity. It is about longterm plans. People who are opportunistic and just want to come in for a short-term gain and leave – may get the short-term gain, but they may not get their long-term benefits. We have realized the importance of being here. “Qatar is very dear to GE,” Habayeb then says, “but it is also very dear to me personally.” Indeed, as Habayeb goes on to reveal, his father and uncle worked in construction in Mesaieed in the 1940s and 1950s, and he recalls how his father would relate stories to him of his experiences in Qatar as a young child, the start of a lifelong affinity with the Gulf state. “My father just turned 93 and has moved in to live with us,” Habayeb says, “and as we were moving his things, I ran across his driver’s license from 1949, issued in Qatar. [If] you take a look at how the country has transformed, and how he was part of a construction company that helped build the country, what GE can bring now [and] how we are taking Qatar to a totally different level – this gives me personal connection to the country.” TheEDGE

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ON THE PULSE

A DEAFENING SILENCE Exploring media transparency and

GDP In Qatar, THe GCC and the world It has long been acknowledged that the self-correcting mechanism of a free media is a facilitator of national economic growth. But in light of Qatar’s most recently released GDP figures and those comparable of its neighbours, do the Gulf States comply with or challenge this convention? Edward Jameson investigates.


ON THE PULSE

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atar is the wealthiest country in the Gulf,” Qatar National Bank (QNB) Capital declared in its Economic Insight report, published in September. The statement, which relied on gross domestic product (GDP) per capita as its unit of measurement, was backed by a stream of 2010 data alongside some optimistic forward-looking projections. Qatar’s nominal GDP, a measure of GDP, or the sum value of goods and services in a given period that has not been adjusted for inflation, expanded by 30 percent in 2010 to reach QR463 billion. This qualifies Qatar as the fourth largest economy in the GCC, accounting for 12 percent of the region’s total, and equates to QR273, 000 per capita – the highest per capita figure in the world. The country’s strong economic growth continued in the first quarter of 2011, the bank says. GDP rose by 12 percent quarter on quarter, from QR126 billion in the fourth quarter of 2010 to QR142 billion in the first quarter of 2011. Looking ahead, QNB Capital expects Qatar’s nominal GDP to grow by a substantial 36 percent in 2011 to reach QR630 billion, based on the strong trend in crude oil prices seen this year to date and a “substantial increase” in natural gas production on the peninsula.

Growth vs. liberty Qatar’s growth will continue a trend that has been prevalent for some years now. According to data compiled by the World Bank, in 1990, per capita GDP in Qatar stood at QR57, 000. A decade later, in 2000, this figure had almost doubled to QR105,000. The 2010 figure of QR273,000 therefore represents an increase in the rate of expansion from 84 percent during the years 1990–2000 to 160 percent between 2000–2010. The figures reflect an impressive, sustained rate of expansion across the Qatari economy, driven by intelligent investment in the oil and gas sector and the reinvestment of the income gained from energy exports into financial services, education, sport, infrastructure and real estate, and the accompanying long-term liberalisation of economic policy. But, despite the growth of Qatar and of the wider Gulf region over the past two decades, the liberalisation of national economies has not, to the minds of many people, been matched by accompanying political liberalisation – a point harshly dragged into light by the Arab Spring. Freedom of expression, which has long been a thorny topic across the Gulf states, has ranked highly on the wish lists of the Arab Spring revolutionaries. “Institutional change always proceeds slowly, but there is great potential for swift gains in the freedoms of expression and assembly,” said director of studies at think-tank Freedom House, Christopher Walker, following a visit to Tunisia in the months after former president Zine El Abidine Ben Ali was forced to stand down. “News media are experiencing an openness that would have been unimaginable when Ben Ali was in power, and citizens have repeatedly mounted demonstrations to air their demands and grievances,” Walker says. But, he adds: “These gains are under constant threat. The Tunisian authorities can signal their commitment to long-term reform by taking steps to safeguard these

Freedom of expression goes with economic growth and there are clear examples in the World Press Freedom Index that back this, as the top 10 of both are mostly dominated by ‘free’ European countries. freedoms, particularly in the run-up to the constituent assembly elections [due on 23 October 2011].” It is a long-held belief of analysts and authors, particularly those on the left of the political spectrum, that freedom of expression is a facilitator of economic growth, for example, “Like adequate education, freedom of expression is no longer a political nicety, but a precondition for economic competitiveness,” wrote American-born science fiction author Alvin Toffler in his book Powershift, published back in 1990. MEDIA FREEDOM In qatar So has Qatar’s economic growth been accompanied by any improvement in media freedom? According to the World Press Freedom Index compiled by Paris-based organisation Reporters Without Borders, Qatar occupies 121st position in the global press freedom standings. With first place reflecting the most free media, this places Doha in the bottom third of the international rankings. By comparison, of the GCC countries, the United Arab Emirates (UAE) ties with Kuwait at 87; Oman is behind Qatar at 124, with Bahrain at 144 and Saudi Arabia languishing at 157. Qatar’s ranking marks a sharp decline from 94 the previous year and joint-74 the year before that. Qatar’s placement and indeed the placements of the other GCC states, indicates that there is still substantial work to be done in the area of liberating the means of mass communication across the Gulf. However, as the QNB Capital work demonstrates, economic growth has most definitely not suffered over the years as a result. In addition, according to the World Bank, the UAE boasts the third-largest GDP per capita in the world. Kuwait is seventh, Bahrain 21st, with Oman 36th and Saudi Arabia 41st. The records of the Gulf countries therefore appear to contradict the accepted general wisdom, which states that freedom of expression goes hand in hand with economic growth. That said, there are clear examples in the World Press Freedom Index that back up the accepted wisdom. The top 10 is dominated by TheEDGE

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ON THE PULSE

The liberalisation of national GCC economies has not, in the minds of many, been matched by politically or in the media.

Though Qatar itself is not highly ranked on the world media freedom listings, it is home to both the Doha Centre For Media Freedom and Al Jazeera, the Middle East’s most critical news outlet, which was recently taken to task by the Bahraini government for its documentary on the Manama uprising, Shouting in the Dark. (Image Corbis)

DOHA AND MEDIA FREEDOM There is perhaps room to challenge the lowly Reporters Without Borders ranking, particularly in the case of Qatar. Doha insists it has done much to further the cause of media freedom. The city is home not only to the Doha Centre for Media Freedom, but also to the Gulf’s most respected television news broadcaster, Al Jazeera. The Doha Centre, although it has been the target of much criticism in the past in terms of its underlying reasons for existence, is actively engaged in extending media freedom across the Middle East and North Africa region – most notably at present in Libya. “The call for freedom of expression including freedom of the media was one of the motives of the revolution,” the centre says in a statement. “The Doha Centre for Media Freedom is taking the initiative to announce an emergency plan to help the Libyan people to realise their aspirations of free expression, and publish and broadcast without fear.” In the case of Al Jazeera, the station has repeatedly clashed with regional governments which happen to disagree with its principles, the most recent example being that of Bahrain. Al Jazeera was criticised by the government of Bahrain with regards to a documentary it aired entitled Shouting in the Dark, with the government claiming that the film-makers failed to communicate its side of the story. Hitting back, Al Jazeera claimed that its requests for access to government figures were repeatedly turned down. The 2011 press freedom rankings are due to be published in October by Reporters Without Borders. It will be interesting to see whether such steps have assisted in raising Qatar up the World Press Freedom Index.

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northern and central European countries including Norway, Sweden and the Netherlands, all of which also feature in the GDP per capita top 10. While at the other end of the scale, the accepted wisdom finds further support. The bottom of the GDP list is dominated, as can be expected, by African nations. Eritrea, which comes bottom of the press freedom index, is fourth from bottom on the GDP standings. Perhaps the most stark example is that of the Korean peninsula countries. The World Bank does not measure the GDP of North Korea but, according to the CIA World Factbook, the country is rated a lowly 160 in terms of per-capita GDP. It is also second-bottom in the press freedom index. South Korea, on the other hand, is ranked a buoyant 31 in terms of GDP per capita, and a respectable joint-42 in theWorld Press Freedom Index. ECONOMIC DIVERSIFACTION So why does the Gulf appear to be the exception to the rule, and just how long can its exceptional performance last? The predominant reason lies in the sprint towards economic diversification being undertaken by all of the Gulf states without exception. Energy export income is being reinvested on a massive scale, reflected by the fact that, according to official data, public spending in Qatar jumped during the 2011/11 fiscal year, narrowing the government’s budget surplus to 2.9 percent of economic output, compared with 15.2 percent in 2009/10. Therefore, the Gulf nations can expect to see growth across the region for as long as the push for diversification continues, and the push will, by definition of its nature, continue until the reliance of governments on energy exports has been slashed. Therefore, the world can expect growth across the GCC to continue at pace for some time. Consequently, as long as economic prosperity continues, any structural reforms in terms of further media freedom are unlikely to materialise. As has been demonstrated by the Arab Spring, the push for wholesale liberalisation of laws governing political freedoms tends to be preceded by feelings of disenfranchisement and, at worst, long-term poverty. The latter condition at least is one that the Gulf states, due to their wealth of natural resources and investment programmes, are more than capable of avoiding.


KNOWLEDGE & EXPERTISE BUSINESS management • small business know-how • marketing and design • legal insight

CAREERS OF THE FUTURE (P.68)

Lynda Gratton, a professor of management practice at London Business School and a worldfamous human resources expert who writes for TheEDGE for the first time, discusses what she feels will be three of the most important career paths – grassroots advocacy, social entrepreneurship and micro-start ups – and what companies can do to leverage this knowledge.

ALSO IN THIS SECTION: •

Small Business Know-How: Robert Madronic discusses the levelling potential of e-commerce for small firms to earn money digitally. (P.70).

Marketing and Design: Roula Ayoub takes a look at what makes good contemporary design. (P.72).

Legal Insight: Brenda Hill talks us through the complexities and legalities of data protection and Internet Protocol (IP) rights in Qatar. (P.74).


Business management

FUTURE VOCATION AND THE EMERGING ENTREPRENEURIAL ‘ECOSYSTEM’

The in-demand careers of the future will be very different from those of the not-so-recent past. Recent research shows the must-have career paths of the future and how forward-thinking companies can take advantage of these trends. Beyond those that are always of value, these three broad career paths will be of value over the coming decade: grassroots advocacy, social entrepreneurship and micro-entrepreneurs, reveals British author and strategic thinker Lynda Gratton TREND ONE: GRASSROOTS ADVOCACY In 2009, strategists at Shell developed two scenarios about the state of energy resources in 2050, which they called ���Scramble’, and ‘Blueprint’. What is interesting about the ‘Blueprint’ scenario is the role that local, regional and global advocates play. The strategists believed that, rather than a top–down, centralised approach, in an increasingly transparent world, high-profile local actors will influence the national stage. Change, if is to occur, will come through the success of many individual initiatives that become linked and amplified around the world and progressively change the character of international debate. These ‘grassroots advocates’ will become the early developers of experiments, innovative solutions and the adoption of proven practice. We can expect to see advocacy rising in any area that people care about: from the education of children in developing countries, to the eradication of endemic diseases, to the support of small businesses. Expect to see a proliferation of enterprises built around developing and supporting advocacy skills and capabilities. These could be non-governemental organisations (NGOs) such as Save the Children, which already has a sophisticated programme of support for people

who want to volunteer to work with them, and also to those who work as advocates on their behalf. Or they could be companies such as Projects Abroad, which has sent more than 18,500 people to volunteer as interns in areas as diverse as teaching, conservation, medicine and journalism. TREND TWO: SOCIAL ENTREPRENEURSHIP For some, advocacy will be about becoming high-profile local actors who galvanise energy, and create ideas about how to move forward. For others, advocacy will entail using their leadership and management skills and to create organisations serving social needs. At the heart of social entrepreneurship is the will to organise, create and manage a venture to precipitate social change. So while a business enterprise measures performance in profit and return, a social entrepreneur focuses on measuring outcomes in broader ways. All over the world, social entrepreneurial businesses are springing up – NIKA Water Company, for example, which sells bottled water in the United States (US) and uses 100 percent of its profits to bring clean water to those in the developing world. Or Newman’s Own, which donates 100 percent of its total profits to support educational charities.


Business management

But it is not just individuals who make the running here. Across Asia and Europe in particular, social entrepreneurs are gathering together in teams, networks, and movements for change. Gen Y is beginning to play a role and we can expect this to gather greater momentum over the coming decades. For example, the Young Social Pioneers in Australia actively invest in emerging social entrepreneurs, while Istanbul’s Bilgi University does the same in Turkey. TREND THREE: MICRO-ENTREPRENEURSHIP Small businesses have always played a key role in the economy of developed and emerging markets. For example, in 2004, 40 percent of the working population in the US worked in small business, while 47 percent of the United Kingdom (UK) working population did the same. But what it means to be a micro-entrepreneur in 2025 will be very different from now. Although we can still expect large companies to exist in 2025 – and in fact there is an argument that these companies will become even larger – proportionally we can expect more people to work for themselves, or with a small group of other people. Though in the past, these small businesses may have targeted niche or local markets, advances in technology have empowered many micro-entrepreneurs with the capacity to reach a global platform, and to tap into streams of business that would have previously been too costly to tap into. This is thanks to the recent emergence of ‘ecosystems’, by which micro-entrepreneurs become integrated into the hinterland of larger companies. For a large company, there are huge potential benefits to be gained from encouraging ecosystem growth. Small companies, particularly those in the technology sector, are an unparalleled source of innovation – think of how many young start-ups Google buys every year – and the development of a strong ecosystem allows large organisations to create bilateral linkages with these micro-entrepreneurs. By providing a platform, or infrastructure, in which these small companies can trial and develop their ideas, large organisations can harness a proportion of their success. A strong ecosystem can quickly become a hub of innovation. Consider the many thousands of independent developers who build applications for the iPhone. Individually, these developers are working on small parts of the value chain, but their collective effort has created one of the most successful digital distribution platforms in history. Or consider the efforts being made by SingTel, which has created a number of collaborative platforms to help bring new ideas into the company. By granting independent developers access to its vast communications infrastructure, SingTel has developed a strong identity as a collaborative business environment, creating lasting global partnerships with hundreds of innovators at low cost.

At the heart of social entrepreneurship is the will to organise, create and manage a venture to make precipitate social change. So while a business enterprise measures performance in profit and return, a social entrepreneur focuses on measuring outcomes in broader ways. Whatever the mechanism of coordination, we can expect a greater proportion of the valuable work in companies to be carried out by people working independently. The main drivers, of course, will be the continued decline in the price of computing, and the development of ubiquitous cloud computing, which will equip even the smallest business with the most sophisticated analytics to track orders, work with third parties and collect money. Technological advances have enabled the democratisation of the innovative process, and have provided individuals and small businesses with the same resources that were once reserved for the technology giants. But it has not only empowered the producers of innovation; it has also empowered consumers to coordinate funding for these micro-entrepreneurs. The Internet is being used as a means for people to donate or invest in ideas they think are exciting or profitable. The most famous and successful example of this is Kickstarter, an online funding platform for inventors, designers, and artists that has so far raised over US$75 million (QR273 million) for thousands of independent projects. The success of this platform has hinted at the power of consumer-funded innovation, which will play an important part in defining the future relationship between producer and consumer.

Lynda Gratton is professor of management practice at London Business School and is the founder of the Hot Spots Movement. She was also voted number one in Human Resources magazine’s ‘Top 25 HR Most Influential UK Thinkers’ 2011 poll. TheEDGE

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small business know-how

HOW TO USE E-COMMERCE TO Create Income

Traditional organisations utilise outsourced intermediaries to ensure their business runs effectively. But as Robert Madronic explains, there are numerous tactics small business owners can use to save or make money through the means of e-commerce.

B

ill Gates once said “The Internet will help achieve friction free capitalism by putting buyer and seller in direct contact and providing more information to both about each other.� Essentially this means that thanks to the Internet, we are no longer beholden to middlemen such as wholesalers, agents or brokers, and those who used to stand in the way of our making money are easily avoided. In Qatar, it can take years and significant amounts of money to develop the professional relationships and reputation needed to build an effective business network. However, some e-commerce strategies allow you to save money and bypass some of the traditional hurdles the Internet makes redundant. ONLINE PURCHASING Traditionally retailers sourced their products from wholesalers or brokers either in Qatar or another regional trade centre who would charge a mark-up for their efforts. In many cases, these represent the fourth or fifth link in the supply chain. While these intermediaries do perform an important function in the chain, the mark-ups they charge and the challenges they may cause are not always fair or efficient. With the Internet, you can bypass local intermediaries

by dealing directly with parties in the county of origin. For example, if you want to import from abroad, you can use online marketplaces like www.alibaba.com to deal directly with manufacturers or local dealers in the supplier’s country. This not only allows you to cut out the cost of another middleman but to ensure that any delays or mistakes of local operators are also bypassed. It is important to remember that this kind of business comes with some challenges as well. You must make sure you can get your hands on samples before you place your big orders and ensure that your contracts ensure that you can get your money back if the goods received do not meet your expectations. It goes without saying that when doing business internationally you must do your due diligence to ensure you are dealing with legitimate and trustworthy firms.

not actually keep any of your own inventory. Once your customer purchases from you, your site automatically purchases the product from your offshore supplier and then ships the product directly to your customer using shipping services such as Aramex. This gives you several advantages. You get paid before you actually buy the product yourself, lowering your credit risks. You do not need to hold any inventory, saving money on rent and preventing you from holding unsold inventory at the end of a season. It also minimises the delays and difficulties in importing large amounts of products through customs. With this business model, as with the previous one, make sure you are selling quality products from reliable manufacturers. You should also make sure the products you are selling are legal to import into Qatar so you and your customers do not run foul of customs.

RETAILING ONLINE Another way to avoid local roadblocks is to develop your own online retail presence. Offering your own online store can either supplement your existing retail efforts or replace them entirely. Additional savings can be realised when combining your retail sales with offshore sourcing. Drop shipping is when you post products for sale on your own or via a third party website but you do

BUSINESS TRAVEL Companies that spend a great deal of money on travel understand how pricey such expenses can be. Dealing with local travel agencies can also be quite time consuming and frustrating. The best way to bypass these local suppliers is to use online travel sites like www.expedia.com or www.travelocity.com. These sites will provide you with the prices for international airlines, hotels, cruises


small business know-how

FREE E-COMMERCE RESOURCES There are a lot of resources available online that your firm can source for free. For example, websites like www.download.cnet.com offer software programs covering a variety of areas. Office software, security, design and communications are only a partial list of the offerings available. While some charge a small fee, many are available for no charge and are as effective as those that may cost hundreds or thousands of riyals. Why spend money for something you can get for free? You can also get a lot of valuable help online for free. When you need some specific business advice you can go to websites like www.allbusiness.com to find articles on a variety of topics from accounting to technology. If you cannot find any articles that cover your topic of interest, you can go to groups on websites such as www.linkedin.com and post specific questions to those who are members. Since the point of LinkedIn is to bring together professionals, you may find that many of those who respond to your questions can later become consultants or mentors. When utilising the many advantages the Internet and e-commerce can provide, the key is to remember to use the right tool for the right job. Not all tools can be used effectively by every firm in every country so be sure to do your due diligence before implementing any strategy. and even excursions anywhere in the world. and the savings are generally between 25 percent and 40 percent. Further, dealing with these sites provides you with a level of service and convenience that you may not find with local agencies. These sites are most effective when booking flights and hotels together. The risks associated with online travel sites are that you may have to sacrifice convenience for price on occasion; this sometimes includes

flying with airlines other than the local carrier. You may also have to deal with much higher fees when changing existing bookings or requesting cancellations. Just make sure you know the site’s rules before booking. OUTSOURCING SERVICES One of the biggest challenges with operating a business in Qatar is finding skilled employees. Accountants, information technology (IT) staff and marketing people

etcetera; generally these types of professions are filled with expatriates and in many cases require not only high salaries but additional costs for housing, travel and family schooling. Most people think that they must bring staff to work in a local office day to day but this is not always necessary. An accountant or a webmaster does not need to work in your office to be effective. In fact, they do not even need to be in the same country. There are a variety of international companies where you can hire offshore staff to handle your accounting, IT services and many other professional requirements either full-time or one project at a time. Imagine the savings that can be had when you do not need to pay for the extras that come with having an employee on the ground in Qatar. Not only do you save on the initial cost of getting staff here, you avoid having to terminate their employment. With these offshore companies, you can simply ask for a different staff or terminate the contract entirely. The challenge with this type of outsourcing is that it can be difficult for many firms to sacrifice the control of having an employee nearby to watch. It can also be a challenge to send what may be sensitive information to a foreign contractor. CROWDSOURCING This is an idea that is very similar to outsourcing in that it involves contracting a third party to perform a task either paid or as a volunteer. In this case, rather than hiring an individual, a firm can hire a group of people to perform a task. Essentially, a business posts their requirements on a website such as www. mturk.com indicating what is needed and the timeframe involved. Individual professionals can log into the site and choose to participate in whatever is needed. For example, if a company is interested in having a group of people fill out a survey about a new brand logo, they can post it on the site and get valuable feedback without the trouble of having to organise a local focus group. In this manner, a firm may get a variety of new and fresh ideas without having to pay a single riyal.

Robert Madronic is a marketing instructor at the College of the North Atlantic-Qatar. TheEDGE

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Marketing & Design

DEFINING GOOD DESIGN Aesthetics, organisation, structure, compatibility, mobile-friendliness, best practices, minimalism, typography, colour choice, drop shadows, rounded corners, responsiveness, usability, user experience - none of those things is integral to what ultimately falls into the category of ‘good design’. Roula Ayoub explains how good design is always beyond just looking good. GOOD DESIGN IS: INNOVATIVE Innovative design can both be a breakthrough product or service, or a redesign of an existing product or service. A breakthough product adds before-unseen value and function to the market and the user, while a redesign improves an existing product. FUNCTIONAL Useful design fills its intended function – and likely both a primary and secondary function. A useful design solves problems and optimises a given functionality.

Good design is not just what looks good. It also needs to perform its purpose: delivering value. INTUITIVE Intuitive design explains itself and makes a user manual unnecessary. A design makes how to use, perceive, and understand a product obvious. A good design explains its function. It clarifies the product’s structure. Better still, it can make the product clearly express its function by making use of the user’s intuition. At best, it is self-explanatory.

PRODUCT USEFUL It has to satisfy certain criteria, not only functional, but also psychological and aesthetic. Good design emphasises the usefulness of a product while disregarding anything that could possibly detract from it.

BUSINESS Assuming a product is designed to sell, a good design does well in the competition and stands out in a competitive market. A good business means a positive profit, why a good design sells well.

AESTHETIC An aesthetic product has an inherent power of being able to fascinate and immediately appeal to the senses. Only well-executed objects can be beautiful. The aesthetic quality of a product is integral to its usefulness because products used every day have an effect on people and their well-being.

HONEST An honest design communicates solely the functions and values it offers. It does not attempt to manipulate buyers and users with promises it cannot keep. This way, the meaning is always pure, direct and uncluttered.


Marketing & Design

WHEN DESIGNING LAYOUTS, THE FOLLOWING PRINCIPLES SHOULD BE TAKEN INto CONSIDERATION: • BALANCE is the distribution of heavy and light elements on the page. Larger, darker elements appear heavier in the design than smaller, lighter elements. The principle of balance shows you how to layout your pages so that they work in harmony. • CONTRAST When most people think of contrast, they typically think of colours or black and white. But there is more to contrast than colour. You can have contrasting shapes (square vs. circle), or contrasting sizes (large vs. small), or contrasting textures (smooth vs. rough). • EMPHASIS is what the eye is drawn to in a design. It’s tempting to give everything equal emphasis or try to emphasise everything in a design, but this ends up making the design bland and flat. Instead, as a designer you should determine the hierarchy of the page and then apply the emphasis to the elements based on that hierarchy. • RHYTHM is also called repetition. Rhythm brings an internal consistency to your designs. Patterns are easy for people to comprehend, and repetition provides patterns that make your message easier to absorb. • UNITY is also called proximity. It is the principle of keeping like elements together and diverse elements further apart. Unity pulls elements together.

LONG LASTING In a society of over-consumption, a good design has an important objective. It builds on sustainability in the sense that design and materials are durable and not just a trend. Waste and over-consumption is not part of good design. It avoids being fashionable and therefore never appears antiquated. Unlike fashionable design, it lasts many years – even in today’s throwaway society. USER-ORIENTED Good design is based on its use and designed to improve a given situation for its user. User-oriented design adds value both intellectual and material value to its product and in turn increases satisfaction and the life situation of its user. UNOBTRUSIVE Products and their design should be both neutral and restrained, to leave room for the user’s self-expression. Products fulfilling a purpose are like tools and are neither decorative objects nor works of art. DOWN TO THE LAST DETAIL Nothing must be arbitrary or left to chance. Care and accuracy in the design process show respect towards the consumer. AS LITTLE DESIGN AS POSSIBLE Dieter Rams makes the distinction between the common ‘Less is more’ and his strongly advised ‘Less, but better’ highlighting the fact that this approach focuses on the essential aspects thus the products are not burdened with non-essentials. The desirable result would then be purer and simpler. ENGAGES THROUGH INSTRINSIC MOTIVATION A good design makes the user want to engage through intrinsic rather than extrinsic motivation. FOCUSED A good design is effective and efficient in fulfilling its purpose. It relies on as few external factors and inputs as possible, and these are easy to measure and manipulate to achieve an expected other output. A good design is always the simplest possible working solution.

Roula Zinati Ayoub is the creative director at Firefly Communications. TheEDGE

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LEGAL INSIGHT

PROTECTING YOUR INTELLECTUAL

PROPERTY RIGHTS 02

IN QATAR

By brenda hill

Qatar law currently provides protection for trade marks, design rights, the protection of trade secrets and copyright. Patents can be protected through a Gulf Cooperation Council (“GCC”) patent filed at the GCC Patent Office and by filing a Patent Cooperation Treaty (“PCT”) patent at a PCT receiving office. Protecting your intellectual property is crucial to the success of your business. Intellectual property can protect: • what distinguishes your products and services from those provided by competitors (trademarks, design rights); • your technical and commercial knowledge, skill and experience relating to your products or services (know-how and trade secrets); • your original artistic musical, dramatic and literary works, and computer programs (copyright); and • your inventions, manufacturing process and new and inventive technical features of your products (patents).

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a. TRadE maRkS Trade marks are currently protected in Qatar by Law No. (9) of 2002 (the ‘Trade Marks Law’). The Trade Marks Law defines trade marks as “any visible sign capable of distinguishing the products (or services) of an enterprise, a trader, a manufacturer or a service provider”. An application for a trade mark registration is lodged with the Trade Marks Section at the Industrial Property Office of the Ministry of Business and Trade together with the applicable fee. The trade mark application is then examined to ensure that it meets the requirements of the Trade Marks Law. Accepted trade mark applications are published for opposition purposes in the Official Gazette. Any interested party may oppose the registration of the application within four months of the date of publication. If no oppositions are filed within the four month opposition period the trade mark application will proceed to registration and the registration certificate will be issued. A trade mark registration is valid for a period of 10 years from the date of filing the application, renewable on application for consecutive periods of 10 years. If the registration is not renewed, then all protection under the Trade Marks Law will cease.

TRadE maRkS REgISTRaTION RIgHTS Registration of a trade mark gives the owner the exclusive right to prevent third parties from using an identical or similar trade mark in a manner that is likely to mislead the public. The ownership of a registered trade mark can be assigned (transferred) with or without goodwill of the business. Unless the assignment is recorded in the trade marks register and published in the Official Gazette it has no effect vis-àvis third parties. Any interested party may request the court to cancel a trade mark registration on the basis of non-use if the owner fails to use the trade mark in Qatar within a period of five consecutive years from the date of registration. The owner can also cancel the trade mark by applying to the Trade Marks Section to cancel the trade mark.

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TRadE maRkS INFRINgEmENT Remedies for trade mark infringement include seizure of the infringing products and damages. An application to the Qatari courts would be required in order to obtain a remedy for infringement. The penalty for trade mark infringement could result in imprisonment for a term not exceeding two years and/or a fine not exceeding QR20,000.


LEGAL INSIGHT

04

B. dESIgN RIgHT Inventive designs or industrial models can be registered under the Trade Marks Law. The provisions of the Trade Marks Law apply equally to design rights. Some aspects specific to designs are not set out in the Trade Marks Law, making this law a little unclear. For example, there is no clear definition of what can be protected by a registered design and what specific criteria is to be applied, in other words it must have individual character. In order to obtain a registered design an application for a design registration is lodged with the Trade Marks/Design Section at the Industrial Property Office of the Ministry of Business and Trade. Once the design application is filed, the design is examined to ensure the design is new and all formalities have been complied with. Accepted design applications are published for opposition purposes in the Official Gazette. Any interested party may oppose the registration of the application within four months of the date of publication. If no oppositions are filed within the four month opposition period the design application will proceed to registration and the registration certificate will be issued. Protection lasts for five years, renewable on application for two further five year periods (15 years in total).

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dESIgN RIgHT – REgISTRaTION RIgHTS Registration of a design gives the owner the exclusive right to prevent third parties from using or copying the design. The ownership of a registered design can be assigned (transferred), but unless the assignment is recorded in the design register and published in the Official Gazette it shall have no effect vis-à-vis third parties. Assignment must be in writing, signed by the parties and registered at the Trade Marks/Design Section. Any interested party may request the court to cancel a design registration on the basis of non-use if the owner fails to use the design in Qatar within a period of five consecutive years from the date of registration.

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dESIgN RIgHT - INFRINgEmENT Remedies for infringement of design right include seizure of the infringing products. The penalty for design right infringement could result in imprisonment for a term not exceeding two years and/or a fine not exceeding QR20,000.

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C. pROTECTION OF TRadE SECRETS Law No. (5) of 2005 for the Protection of Trade Secrets deals with the protection of trade secrets (the ‘Trade Secrets Law’). The Trade Secrets Law defines “trade secrets” as unknown information that is not readily ascertainable by those working in a similar field, information that has economic benefit which emanates from its confidentiality and is the subject of reasonable efforts to maintain its secrecy. The owner of the trade secret may prevent any person from misusing the trade secret protected by the provisions of the Trade Secrets Law. The owner of the trade secret may assign (transfer) the rights in the trade secret in whole or in part to a third party. In the case of breach of contract and/or unauthorised use of the trade secret the owner can claim damages, obtain an injunction to prevent the further alleged infringement of the trade secret, an order for the provisional seizure of any products and an order to preserve any evidence of the alleged infringement. The penalty for violation of the Trade Secrets Law includes fines not exceeding QR50,000 and/or imprisonment not exceeding one year.

TheEDGE

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LEGAL INSIGHT

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d. COpYRIgHT The Copyright and Neighboring Rights Law No. (7) of 2002 (the ‘Copyright Law’) deals with the protection of copyright and neighbouring rights. Qatar is a member of the World Trade Organization and the World Intellectual Property Organization. However, Qatar is not a party to the Paris Convention for Protection of Intellectual Property. Protection of copyright and authors’ rights in Qatar is largely dependent upon the Copyright Law. Protection under the Copyright Law is conferred to the author’s original literary, dramatic, musical, artistic works, irrespective of the value, quality, purpose or mode of expression of such works. Protected works include books, lectures, dramas and musical plays, choreographed works, audiovisual works, photographic and similar works, works applied to arts, works of art and computer programs. By contrast, laws, legal provisions, administrative decision, international treaties, official documents and any translation of these are not generally protected and neither is daily news and other news of an informatory nature. Ideas, procedures, operational methods, mathematical concepts, principles and data are not protected, although derivatives of these are protected. Every published, displayed or circulated work is required to be accompanied by a certificate of origin, and a declaration (by the importer or owner) specifying the geographic area/place within which the display or circulation is authorised.

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COpYRIgHT - RIgHTS The author/owner of the copyright has the exclusive right to carry out or to authorise the reproduction, translation, making excerpts, musical arrangement or transformation, distribution through sale and/or rental, public performance and communication to the public of the works (the “economic rights”). The economic rights of the author/ owner are protected during the life of the author, and for 50 years after his/her death. The author may assign (transfer) any of his economic rights provided the transfer is in writing and specifies separately the manner of disposal in respect of each right. The author of the work (or director of a film) is also entitled to certain moral rights, such as being identified as the author and having the right to object to any derogatory treatment of the work. Neighbouring rights, which include the rights of performers, producers of sound recordings and rights of all broadcasting organisations, are also protected by the Copyright Law.

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COpYRIgHT INFRINgEmENT Sanctions for the infringement of copyright include granting injunctions, seizure of infringing copies, ordering of appropriate indemnification and seizure of profits gained from infringement. Penalties for violation of the Copyright Law include fines not less than QR30,000 and not exceeding QR100,000 and/or imprisonment for a period of not less than six months and not exceeding 12 months. The Office for the Protection of Copyright and Neighboring Rights at the Ministry of Business and Trade is responsible for the implementation of the Copyright Law.

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E. paTENT law At present, there is no direct patent registration system in Qatar. Patent protection is presently extended through applications filed through the GCC Patent Office in Riyadh, Saudi Arabia, which provides registration of patent rights throughout all Gulf Cooperation Council countries. Qatar has an issued Patent Law, Law No. (30) of 2006 (the ‘Patent Law’ or PTC). The Patent Law grants patents a term of protection for 20 years as from the date of grant in Qatar. However the Patent Law is not yet effective and there is no active Qatar Patent Office. On May 3, 2011 Qatar acceded to the Patent Cooperation Treaty. This means that as of August 3, 2011 both nationals and residents of Qatar can obtain patent protection in Qatar under the PCT by filing a PCT patent application at any PCT receiving office such as in Geneva, Switzerland.

Note: All Qatari Laws (save for those issued by the Qatar Financial Centre (QFC) to regulate its own business) are issued in Arabic and there are no official translations, therefore for the purposes of drafting this article we have used our own translation and interpreted the same in the context of Qatari regulation and current market practice.This article should be used for information purposes only. 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 Brenda Hill (brenda.hill@dlapiper.com).

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TheEDGE


BUSINESS INSIGHT Inside the minds of leading business figures

NEW MICROSOFT QATAR COUNTRY MANAGER (P.80)

Qatar’s new country manager for Microsoft, Naim Yazbeck, talked exclusively with TheEDGE’s Miles Masterson recently about the company’s relationship with ictQatar and as a partner in various ministerial departments in rolling out ‘e-governance’, their strategic pillars in Qatar, as well as his plans for growing the IT brand’s consumer market share in the country.

ALSO IN THIS SECTION: • BANKS FOLLOWING THE HIGH TECH TREND TheEDGE’s Erika Widén spoke exclusively with the newly appointed chief executive officer of Standard Chartered

Bank Qatar, Charles Carlson, about how they plan to expand their award winning mobile Breeze application and Internet services in the country.


BUSINESS INSIGHT

Information Technology

Incoming Microsoft Qatar country head aims to consolidate brand’s position New Microsoft Corporation Qatar Country Manager Naim Yazbeck joined Microsoft as the company’s public sector director for the Gulf in 2008, where for three years he developed relationships with governments across the region and the business. Recently, Yazbeck was offered his new Doha-based position at the helm of Microsoft in Qatar. TheEDGE’s Miles Masterson spoke to him exclusively about his new role and the company’s future plans.

Please present us with an overview of Microsofts local operations. Working with the public sector, is important for you in Qatar, or is that just part of it? If you look at Microsoft, our business is split into mainly four or five segments. Obviously, in this part of the world, including Qatar, the public sector is a big chunk of all this, in government education and healthcare. The second big part of our business is the big enterprises, telecom operators, banks, oil and gas companies, which we consider as non-governmental organisations. Then the third segment that we have is small and medium, which is the broader business. And then the last is the consumer business…customers who buy Xbox or Microsoft Office. The public sector is still the largest segment in Qatar and the Gulf, but what others have potential? The whole Gulf is very similar, where the public sector is a big chunk and obviously enterprise is a big chunk, but we are seeing a big trend in the past couple of years

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TheEDGE


BUSINESS INSIGHT

where the small and medium business is growing as well. Actually, governments including the Qatari government, have a lot of aspiration for entrepreneurship and enlarging this small and medium space, because this is where the real economy is and this is where we think the Qatar business will grow over the next three years. How exactly is Microsoft engaged with government institutions? We have a very strategic relationship with ictQatar and with all the governmental entities. We have been dealing with them on strategic projects and initiatives and we have a commitment to the government of Qatar in terms of building capacity, helping to bring new technologies and innovation to the country. For us, because we know that ICT is the core fuel of the economy, that is where we are focusing and helping the government in leveraging new technology to make sure that they build a solid place to fuel the economy. Does that involve building customised systems for each department? Today a lot of the e-government systems are basically related to Microsoft technology. So if you look at technologies like SharePoint, if you look at technologies like Office, like Link, which is unified communication, they are all the basis of e-government or e-service. Microsoft is providing the core technologies and we have a lot of partners who customise those technologies first to build specific systems for the government or private sector. You mention partnerships, how important is this to you? We probably have 80 partners in the Qatari market that we work with, the majority based here and some companies from outside. This is the core foundation of how Microsoft works. If you look at our strategy…and what is my strategy as a country manager for tackling the Qatari market, that probably can give you an idea. First thing that we look at, at Microsoft, is we want to keep leading in terms of innovation and bringing new technologies in the market. We are launching our cloud computing offering, ‘Office 365’ very soon. Qatar is among the first countries in the world where the service is going to be launched and this is going to be a huge innovation and value to the Qatari market, be it government or private sector, but mainly it is going to be needed in organisations. Second, we want to continue growing market share [as] competition is definitely getting tough.

“If you look at Qatar today and their aspirations, Microsoft are very much aligned to this and that is really part of our aim, to help Qataris and young nationals to be equipped to go into the job market.” It makes sense though for companies or governments to use the same software though, not many different kinds? There is a lot of integration of systems that the government uses that communicate, but there are also some specific independent systems that are unique to government and non-government organisations. But the third pillar for Microsoft is our commitment to the Qatar national plan. If you look at Qatar today and their aspirations in building the knowledge economy, in building capacity and in education, we are very much aligned to this and that is really part of our aim…to help Qataris and young nationals to be equipped to go into the job market. We do a lot of citizenship initiatives that are going into that direction and the fourth one is our relation with our strategic partners. We at Microsoft have always been and will always be committed to working with our partners in order to make sure we leverage this huge ecosystem, [where] more than fifty percent of the people working in ICT are related to Microsoft. You mentioned cloud computing, how is that going to come into Qatar? This is a huge bet for Microsoft globally, and is going to be a very big bet for us here. We will be the only company offering private cloud and public cloud in the local market. Private cloud means an organisation builds their data centre physically within their entities. Public cloud is a data centre running somewhere, it could be outside of Qatar, and people access their data accordingly. Office 365, our public cloud service, obviously is going to benefit the whole market, be it government or private sector, but mainly small and medium business. A lot of the struggle for small and medium business is that there is a big gap between their aspiration and their capacity… they may need to start with heavy investment in IT, which they cannot afford. Office 365 will allow what we call ‘on demand use’ of technology. They will pay for what they use for, which…is going to allow much more innovators and small startups.

What about the mobile sector, Microsoft has a strong relationship with Nokia? Mobile is going to be a very strategic direction for us and I think our partnership with Nokia is a core and is an important answer to the competition in the mobile market. So this is something that is very important for us…we believe our partnership with Nokia, their services and even if you look today at our existing version of Windows 7 Phone which we called Mango, it is coming to the market soon. It has more than 500 features and is going to really have solid platform, and we believe when this is going to come with Nokia phones, it is going to be even stronger. So I am very optimistic about our position in the mobile industry and over the next 12 months I can see major developments. What do you think the advantages are in terms of your competition? They are very well positioned as well as the hardware manufacturer. So they have the reach, they have the brand, they have the customer experience and they have the presence to deal with hardware. We bring the platform, we bring the integration with your office, because at the end of the day you need a telephone that helps you have the same experience that your laptop has in your office. I think we also bring the Microsoft brand with us. I think between the reach and the mobile handset experience that Nokia has and the experience that we are bringing is a seamless experience between the phone and the office and your PC, I think this is going to be a major advantage. Finally, can you outline Microsoft’s ambitions in the local gaming sector? Yes, it has always been big for Microsoft. The launch of Kinect last December, that was game-changing, I think we have gone from there to number one. Xbox Live is one of the solid services that exist today. It is not officially launched in Qatar [yet]. But definitely in gaming we have made major progress, and we will continue to lead the market. TheEDGE

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BUSINESS INSIGHT

Technological Banking

The Incoming CEO of Standard Chartered Bank in Qatar discusses the technology sector When banks have problems in their home markets they often withdraw internationally. For one bank, this is not the case as commitment to international markets is a crucial part of its strategy. Charles Carlson, chief executive officer of Standard Chartered Bank, (SCB) explains that the UK bank is different to its competitors and fully committed to Qatar. Carlson explains more to Erika Widén about their award winning mobile ‘Breeze’ application. For the second consecutive year global finance has awarded SCB as the ‘Best Consumer Internet Bank’ in Singapore, Pakistan, United Arab Emirates and Zambia, will this extend to Qatar? Qatar is a very tech-savvy society. A recent report estimates an overall Internet penetration in Qatar standing at 82 percent and we already have Internet banking to meet that need here. However, we have a new innovation that we just launched in Asia and plan to bring to the Middle East. It’s a mobile phone application called Breeze, which lets you do all your banking on your mobile phone, with a lot of extra features. In Qatar, the Blackberry seems to stand strong. Will SCB accommodate and expand

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TheEDGE

their ecosystem to other smartphones in the market? The Breeze mobile platform has been designed to work on Blackberries and Android smartphones as well the iPhone iOS platform. How is Standard Chartered Bank marketing its mobile service to encourage customers in different regions? We look at it in a slightly different way: in some places mobile banking is the only way to go because people do not have easy access to computers and the Internet, yet the uptake of mobile phones has been huge, so banking through these devices is the most convenient way for customers to use our services. For example, in some remote areas of Kenya, local farmers sell their products to brokers in the cities or the main markets. Thanks to mobile phones and mobile phone applications, they are now able to bypass the broker and sell their products

directly into the main market, giving them a bigger profit margin. That profit margin goes a long way in sustaining economic growth in the rural areas in Africa. With more than 11 years of extensive experience, of which seven years you have been stationed in Abu Dhabi and Bahrain, how will your expertise in the region be crucial for leading the bank’s growth here? The seven years I have spent in the Middle East has been more of a cultural experience. I was born in Egypt and I grew up in North Africa. With exposure to the region, my cultural understanding is going to be of immense help. But my experience in the developed markets of Singapore, New York and London, from a banking point of view, is also very useful to me because Qatar is a technologically savvy, sophisticated market, with tremendous growth opportunities.


BUSINESS INSIGHT

Standard Chartered Bank has been operating in Qatar for more than 60 years. Since then a lot of banks have entered the market. What is Standard Chartered Bank’s current position in the Qatar banking environment among its competitors? In wholesale banking we essentially offer the same industry and product expertise as Qatar. We have experts in the oil and gas businesses, telecommunications, mining and metals and petrochemicals, among other things. Qatar is also a net exporter of capital, so to that extent Qatar wants to make upstream investments across our geographical networks of Asia, Africa and the Middle East in oil and gas, mining metals, power and so on. Standard Chartered is well positioned to support the aspirations of Qatar in our network in addition to our presence on the ground here. In the Consumer Bank we focus on needsbased banking, which means giving customers what they actually want rather than just creating products and trying to sell them. So our priority banking and wealth management is more of a tailored approach rather than “one size fits all”. We are not in competition with the big local banks; rather we aim to complement their offering, so we work with them. What is your view in terms of consolidation in Qatar? There are several banks in Qatar that have a full license, and I do not think that is too large of a number given the size of the economy and where the country is headed. There are several banks in the QFC as well. They are doing more offshore banking but [consolidation] could happen. I do not see it necessarily as something of a pressing issue. The government has been very wise and people cannot come in and suddenly get a license, so I think the government manages the sector very well. Since being appointed CEO, what are Standard Chartered Bank’s priority tasks on the agenda for 2012? We are focusing on a section of the market where we can offer great value to our customers that they can’t necessarily get elsewhere, for example in priority banking particularly where international services are required. We have a branch network across 70 countries and offer a full range of wholesale banking and consumer banking across that international network. We expect increased momentum as the infrastructure plans start to materialise and we have the expertise to help those projects come

“We do see technology playing an increasingly important role in Qatar because it starts with what people want, and here the population is technologically sophisticated, not least the new generation coming out of school who are demanding it.” to fruition, whether through advice or financing or structuring. In some local websites there seem to be sporadic complaints of expatriates towards the service of many banks in Qatar, such as the ATM card decline slip that appears when purchasing items. Does Standard Chartered Bank have a preventive action for such incidents? We have an active service quality team and I am personally involved in reviewing the statistics on complaints, resolution and turnaround times. You aim to have a complaint-free month every month, but it’s unlikely to go to zero. There are thousands of banking transactions taking place and things do happen. The important thing is to ensure that complaints are addressed promptly and fairly. Often a complaint is an opportunity to turn the situation around into a compliment if we solve it quickly. I am sure other banks have similar ways of doing it. This is a pretty common complaint and certainly not unique to Qatar.. We do address this and other issues on a continual basis and we try to improve our service every day. How does Standard Chartered Bank monitor customer service? We take customer service very seriously – the statistics are on my table every month. We look at the matrix, the service level agreements, what is going on, the trends of complaints, and other metrics. So if you are asking how important it is, it is right up there, because we cannot have products without service and our annual performance process reviews this aspect as much as other targets. Today there is a high demand for instant and easy banking. Will SCB in the future have Near Field Communication (NFC), which will substitute the current credit/ debit card, where the customer, using a mobile device can swipe a payment or transaction near a reader module?

We are constantly engaging with technology providers and I envisage that we will have that capability in the region. It seems to work well when you have very high density, high volumes of small transactions. So it works very well in Japan and Korea, for example. You need a big population that is tech-savvy, yet uses this for small payments. We are still a cash society here in many ways. Small shops like cash; you go to the pharmacist’s and very often you pay in cash. But I think there will come a time that you will see this technology coming into the region. When market conditions are right, it will happen. In your opinion if NFC were to expand, do you believe it is safe? When Internet banking first came up it was the same issue and there are still people who will count the money they receive from the ATM as opposed to counting it from the teller; it’s just human tendency. We do see technology playing an increasingly important role in Qatar because it starts with what people want, and here the population is technologically sophisticated, not least the new generation coming out of school who are demanding it. The population is small and it is still a cash society, but that is all changing and I do think that you will see it coming to Qatar at some point. International banking has tightened regulations. Does this affect Qatar? The government, the Central Bank and the Qatar Central Bank have been in sync with developments all over the world. They have the same concerns as regulators in other parts of the world. Tighter regulation in other parts of the world is a natural thing and you see Qatar’s Central Bank being more vigilant. Qatar is aware of what the global issues are, and will have its own brand of regulation to suit the local market, so I think you will see tightening consistent with the rest of the world. TheEDGE

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TRaVEl & lIFESTYlE london BusInEss and ThaIland PlEasuRE (P.84)

TheEDGE guides you to some of the best hotels for travelling businessmen in the UK capital as well as a few good restaurants, shops and sights to take in if you have time to take a walk around the city’s streets. We also take a diversion to a new luxury resort in Thailand.

also In ThIs sEcTIon: •

doha power breakfasts: An at-a-glance guide to some of the ideal locations in Doha to meet for business in the morning, while powering up with the most important meal of the day (P.85). If the shoe fit: “Shoes maketh the man” or so the saying goes. TheEDGE’s quick read style guide to appropriate

• •

footwear for various business situations, new trends and some maintenance and polishing tips. (P.86). nokia n9: Nokia introduces its new flagship mobile device, the N9, to Qatar. (P.86). 10 things: 10 notable contributions ancient Arabs have made to the modern world. (P.88)


TRAVEL

Business Travel Insider: London London means business. The largest urban zone in the whole of the European Union, it has the most international visitors of any city in the world and ‘The City’ the United Kingdom capital’s financial district is one of the world’s economic powerhouses. As London prepares to hold the Olympic Games for a record third time, Victoria Scott advises those intending to visit this vibrant metropole for business or leisure or both. Getting there Qatar Airways (www.qatarairways.com) flies direct to London Heathrow four times daily. British Airways (www.ba.com) also flies daily from Doha, via Bahrain. On arrival, the quickest and easiest way into town is on the Heathrow Express (www.heathrowexpress. com, £18 one-way, First Class £26), direct to London Paddington. Once there, catch a black London cab and sit back and enjoy the journey to your hotel – London’s cabbies are famed for knowing their way around the city’s streets without the aid of a map. Currency: Pounds sterling. Exchange rate (as of Sept 2011) £1 = QR5.7 Where to stay Mandarin Oriental, Knightsbridge (www. mandarinoriental.com/london) Occupying one of London’s finest addresses (opposite Harvey Nichols, minutes from Harrods and right next to Hyde Park) this hotel’s impressive Victorian exterior and classic English style offer unbeatable luxury. Bag a table on the terrace at celebrity chef Heston Blumenthal’s hotel restaurant and you’ll be dining with London’s finest. Rooms from £519 (QR2900) a night, including breakfast. The Connaught, Mayfair (www.theconnaught.co.uk) The Connaught, in the heart of fashionable Mayfair, has recently had a makeover, its walls now sporting modern art alongside traditional period features. Michelin-starred food from Hélène Darroze is served in the hotel’s restaurant, and with Balenciaga and Marc Jacobs stores close by, the hotel is ideally placed for a spot of shopping after a hard day’s work. Rooms

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starts at UK£499 (QR2795) in October. The Savoy, The Strand (www.Fairmont. com/savoy) Fresh from an £100 million (QR560 million) restoration, this iconic hotel is within walking distance of both London’s West End theatres and the gleaming towers of The City. Many of its 268 luxurious rooms have stunning views of River Thames. Nine ‘personality suites’ have been created around some of The Savoy’s most high profile guests, and a brand new two-bedroom Royal Suite is truly fit for a king. Rooms start at £570 (QR3192) per night in October, including breakfast. Where to play: The Oxo Tower (http://www.harveynichols. com/oxo-tower-london) An off-shoot of Harvey Nichols, this riverside landmark is home to three lovely venues, our favourite being the laid back Brasserie. Here, you can feast on global delicacies while listening to live music, and if you’re here in good weather, take advantage of al fresco dining on the terrace for one of London’s finest views. Skylon at the Royal Festival Hall (www. skylonrestaurant.co.uk) This spectacular spot offers a great panorama of London’s skyline, with floor-to-ceiling windows overlooking the Thames. Famed for its excellent cocktails, this is the perfect place to watch the sunset in one of the world’s most exciting cities. Splash your cash: Forget Oxford Street (far too noisy and congested for our liking) and head instead to the King’s Road in Chelsea for a spot of retail therapy. Begin at department store

Peter Jones and head west, taking in designer stores, cafes, antique shops and high-street staples like Marks & Spencer as you go. For those missing Doha’s malls, Westfield London (uk.westfield.com/london) could be just the ticket. But with a retail floor area of 150,000 square metres, you’ll need comfortable shoes (and a large wallet) to explore it all. Culture vulture: The Tate Modern (www.tate.org.uk/modern) This collection of international modern art, housed in a former power station, is well worth a look, even if art isn’t usually your thing. The building is a piece of art in itself, and as with most museums in London, entry is free. The Royal Albert Hall (www.royalalberthall. com) This iconic piece of Victorian architecture is a fantastic concert venue. In October, it’s playing host to an eclectic list of events, from brass band competitions to Orff’s Carmina Burana.


LIFESTYLE

A Guide To: Doha Power Breakfasts

Bread and Bagels, Beach Tower, West Bay If your clients have their offices in West Bay, this relaxed venue could be just the right choice for an informal morning meeting. A relative newcomer to Doha, Bread and Bagels does exactly what it says on the tin. They’ve got bagels of every kind - there’s even a bagel simply named “Everything”. The mind boggles. The breakfast menu has so many options we reckon we could be there until lunch just deciding what to have. Open Saturday to Thursday 7 am to 10 pm, Friday from 9 am to 10 pm, free wifi. (4411 0041)

Dean and Deluca, Villaggio Mall If you’re based in the west of town, Dean and Deluca’s café ticks all the boxes for a tasty breakfast in pleasant surroundings. With good service, an excellent, varied menu (we rather like their toasted sandwiches) and the elegant surroundings of Villaggio’s upmarket wing, this place is one of our favourites. It’s brilliantly placed for a spot of indulgent shopping afterwards, too. Open daily 9 am to midnight. Breakfast served all day. (4451 9780) W Café, W Hotel, West Bay This candy coloured hideaway in West Bay is a well loved destination for afternoon tea (its cupcakes are gaining fame around the city) but it’s also a nice spot for breakfast. Its secluded ambience lends itself to the serious business of eating – and the odd business deal, too. Opens 6 am to11 am (Sat-Thurs) and 8 am - 11 am (Fridays), free wifi (4453 5000)

Le Notre, Ramada/VillaGgio Chic décor, free newspapers and two convenient locations make it a top spot for a top-level breakfast. We love their coffee and fresh juice, and the breakfast buffet is large and fresh, but you can order a la carte. Open 9am at Villaggio, 8am at Ramada Junction. (4455 2111) Marriott Doha We love the Marriott’s lovely sea view and its proximity to the airport; a handy location if you’ve just met someone off an early flight. The hotel’s glass-fronted Corniche restaurant offers a plentiful buffet and lots of a la carte options. We’re particularly impressed that they’ve thought of those of us watching our diets with low carb/low cholesterol options. Breakfast 6 am to 11.30 am (4429 8888)

The Amari Vogue Krabi, Thailand This Thai gem has a picture-postcard view that’s so stunning it doesn’t feel quite real. Perched above an unspoilt white beach, the Amari Vogue in Krabi looks out on the Andaman Sea and its myriad limestone karsts and islands. Although the resort is on Thailand’s mainland, and only 40 minutes from Krabi airport (with its connections to Bangkok and beyond) you could be forgiven for feeling that you’ve landed at a remote island hideaway. The view is certainly a feast for your eyes, but the hotel’s chefs will provide a feast for

your stomach, too. At breakfast, take a seat out on the terrace while indulging in the buffet at the Lotus Restaurant. As the sun sets, enjoy snacks and a happy-hour cocktail on the beach, and when night falls, eat out under the stars at the beachfront Bellini Italian Restaurant. The hotel has 55 luxurious rooms, all set around a lush tropical garden leading to an infinity pool and the beautiful Tub Kaek Beach below. As well as its standard rooms, the Amari Vogue has eight Honeymoon Deluxe and eight Royal Deluxe rooms, and four special Ocean Villas with outdoor jacuzzis. If you fancy indulging yourself, check out the hotel’s Breeze Spa, where you can sample a selection of the best treatments from Thai, Asian and Western traditions. And if you feel like you deserve a special treat, the hotel has two exclusive ‘Spa Suites’ – bedrooms with adjoining private treatment rooms, so guests need never to leave the privacy of their own room to enjoy what the spa has to offer. That’s what we call five star service. www.amari.com/vogue

A deluxe room at the Amari Vogue starts at 4534 TBT (QR544) a night in October, including breakfast. Qatar Airways (www.qatarairways.com) flies direct to Bangkok from Doha three times daily. Prices start at QR2590 for an economy return in October.

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SARTORIAL STYLE: IF THE

SHOE FITS…

TheEDGE’s quick guide to essential shoes for all business occasions. The Loafer Loafers are a sharp alternative to black lace-ups, just make sure your pair has a slim leather sole, round toe and a good polish. The Wing Tip The wing tip can be pointy and delicate, and not all of them look right with suits. A lace-up pair with slim leather soles in a rich brown patina will match any three-piece suit. THe Monk-Strap This is the shoe where a standard, single buckle reaches across the shoe’s tongue and ends right below the cuff of your pants. It’s a

subtle statement and at home in a corporate environ. Stick to dark leather at the office. The Ankle Boot The boot is making a big comeback this winter. Look out for a (black) pair with thin leather laces and some detail on the toe-cap. The Oxford A terrific formal shoe that does the business. Make sure yours is finely made, with a toe that is not too pointy, not too round, and certainly not square. A light shade of brown in soft leather or suede will look perfect with jeans, chinos or corduroy trousers.

READ IT: NET PROFIT “The types of people who work well in the internet are those who share a passion for the product and delighting the user, who have a spirit of creativity accompanied by a strong commercial drive as well, of course, as possessing a will to win and the self confidence not to be cowed by sometimes far better-financed competitors.” This excerpt from David Soskin’s informative book Net Profit: How to Succeed at Digital Business does two things. One, it exemplifies Soskin’s succinct and to-the-point writing style, which is both informative and engaging. Two, if that at all describes you or your company’s aspirations then you may want to take a look at this offering. As the former CEO of early and successful online start-up Cheapflights, and current head of mySupermarket.co.uk and Swapit.co.uk Soskin knows a trick or two about internet entrepreneurism and this book thus is an indispensable guide to success in

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the modern minefield that is online business. Available at Virgin Bookstore for QR127.

Love Your Shoes Prolong the life of your shoes by taking care of them. 1. Place shoe trees in both shoes. Using a clean rag, rub leather conditioner on any dry, cracked spots and allow to dry. 2. Apply shoe polish with a cloth to the top and heel of the shoe – used cloths caked with polish are best. Rub the polish in with a shoe brush, starting from the toe, using side-to-side and upand-down motions, and allow to dry. 3. Apply a second cat of polish, focused on the tongue and the crevices under buckles and where the leather meets the sole. Run a small, round brush over these spots with varying strokes, Allow to dry. Buff each shoe with a soft towel to finish off.

For a full range of business-suitable shoes, visit Salam Stores in West Bay, Doha.

THE NEW NOKIA n9 According to its manufacturers, the new Nokia N9 promises to redefine the way smartphones are used, with innovative technology and a unique look and feel. The Nokia N9 introduces a new design where a home key is replaced by a simple swipe to move seamlessly through applications. The 3.9-inch screen is made from scratch-resistant curved glass, which certainly creates a different user experience. Fitted with Near Field Communication, the Nokia N9 allows the user to easily share images and videos between devices. In addition, the N9 packs a powerful 8 megapixel Carl Zeiss wide angle lens, HD quality video capture. Available soon in Qatar. For more info contact GCG on 974 44910666


10 TEN THINGS

gifts from the Arab world

From the arts to the sciences, the Arab world has done much to improve and contribute to human civilization. This month TheEDGE takes a look at 10 of these valuable gifts.

Medicine In the field of medicine, Arabs improved upon the healing arts of ancient Mesopotamia and Egypt. Al Razi, a medical encyclopaedist of the ninth century, was the first to diagnose smallpox and measles. Syrian Ibn Sina, known in Europe as Avicenna, was the greatest writer of medicine in the Middle Ages, pioneering work in mental health and also in psychotherapy.

Horticulture The ancient Arabs were pioneers of botany, able to graft a single vine so that it would bear grapes in different colours, and brought peach, apricot, loquat and olive trees to southern Europe. Arab horticulture gave the world the fragrant flowers and herbs used to make perfumes, while the Egyptians, Syrians and Phoenicians created the cosmetics that were later borrowed by the women of Europe.

Mathematics Al Khwarizmi, credited with founding algebra, was inspired to find a more accurate method of ensuring precise land divisions so that the Qu’ran could be obeyed in laws of inheritance, while the Arab numeral sifr, or zero, provided new solutions for complex mathematical problems.

Astronomy As with algebra, astronomy was improved with religion in mind. Arab astronomers of the Middle Ages used it to chart the precise time of sunrises and sunsets and to determine the period of fasting during the holy month of Ramadan. Al Biruni discussed the possibility of the earth rotating on its own axis, a theory proven by Galileo six centuries later.

Architecture Arab architecture, focused on building mosques and mausoleums, created an elegant and daring style now found worldwide. The mosque of Ibn Tulun in Cairo, with its pointed arches, was the inspiration for many cathedrals in Europe. Designs from the mosques of Mecca, Tripoli and Damascus were interpreted as ribbed vaults across Europe, while the Muslim minaret in turn became the campanile.

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Geographical Navigation The world’s earliest geographical charts were developed by the Canaanites who, who with the Egyptians, are thought to have discovered the Atlantic. 12th century scientist, al Idrisi, compiled a world atlas, considered the best geographical guide of its time, and Portugal’s Vasco da Gama explored the east of Africa guided by an Arab pilot, Ahmed ibn Majid, who used maps not seen by Europeans.

Literature The rich Arabic language has left its mark through poetry and literature. Some even believe that the poet Nizami’s translations of Layla and Majnun inspired Shakespeare’s Romeo and Juliet. Ibn Tufail’s Hayy ibn Yaqzan, considered by many as the first novel, was translated into Latin in 1671 and English in 1708 and bears many similarities to William Defoe’s Robinson Crusoe. Crafts The ancient Arabs elevated small-scale artistries to new levels of perfection. Glassware, ceramics and textile weaves attest to their special skills. They covered walls and objects with intricate mosaics, tiles, carvings and paintings, developed new glazing techniques in pottery and were the original masters of silk weaving. Music Although the bagpipe is identified with the British Isles, it was originally brought to Europe by Crusaders returning from the wars in Palestine, where it was once the entertainment of shepherds. The harp, lyre, zither, drum, tambourine, flute, oboe and reed instruments of today are either exactly as they were used in early Arab civilisation, or variations of early Arab musical instruments. Language Modern European languages, such as Spanish, Portuguese, French, Italian and English, owe a great debt to Arabic, with the English language itself containing many words borrowed from Arabic, for example, orange (naranj), tariff (ta’rif) and sugar (sukkar). Perhaps the greatest contribution Arabs have made to human civilisation though has been the phonetic alphabet, which is part of every aspect of all our daily lives.



The Edge - Oct 2011 (Issue 26)