Think | Q3 | 2010

2 0 1 0

G L O B A L

I S S U E S

I N

P E R S P E C T I V E

01

I S S U E

G L O B A L

06

I S S U E S

I N

1 5

2 0 1 0

P E R S P E C T I V E

24 THE FRUITS OF IMAGINATION Introducing an internationally-acclaimed creative film project that challenges world hunger.

50 THE FIGHT AGAINST BREAST CANCER Breast cancer is on the rise around the world, but new technologies mean that the odds of surviving are greater than ever.

26 THE POWER OF 10 Saudi Arabia committed to become one of the top ten most competitive destinations in the world by 2010. Goal achieved; what next?

54 THE BIGGER PICTURE Growing understanding of cost-effective but environmentally sound practices is propelling industry in a more sustainable and socially responsible direction.

44 PUTTING PEOPLE FIRST Klaus Kleinfield, CEO of aluminium company Alcoa, on why it’s nice to be important, but it’s more important to be nice.

60 ASSET MANAGEMENT Despite serious concerns about the planet’s future, the World Wildlife Fund is optimistic about change, and more heavyweights are joining the cause.

“VOLUNTEERING IS A NECESSARY PART OF CREATING A VIBRANT AND DYNAMIC CORPORATE ENVIRONMENT...YOU UNCOVER ASPECTS YOU HADN’T PREVIOUSLY BEEN ABLE TO SEE” KLAUS KLEINFELD, CEO, ALCOA

64 FALL FOR COLOUR Where to spend and what to buy to stay on trend this autumn.

REGULARS

OPINION

13 SPECTRUM

32 SAMA CEO SPEAKS TO THINK

68 WANDERLUX Travellers might have tightened their belts and stayed home last year, but this year, they’re not skimping.

19 PICTURE PERFECT

74 PROJECT 60 Through “Project 60”, the newly established Economic Cities Authority will showcase the best in contemporary Saudi art, starting with the work of Ola Hijazi.

THINK spans the globe for creative new ideas A look at the growing popularity of artistic photography along with some of its brightest new talent

83 FUTURE THINKING

Efficient living in future New York

85 BOOKS

Everything you need to know

86 VISIONARY Dr Craig Venter

THINK talks exclusively to H.E. Dr Muhammed Sulaiman Al-Jasser, Governor of SAMA, on the topic of a unified GCC currency

36 THINK ROUNDTABLE

The euro been operating since 2002 but the recession has reopened the debate on the workability common currencies

39 FORWARD THINKING

The World Future Society’s Futurist of the Year, Theodore J Gordon, looks at factors that can alter the fate of the world

40 WHAT DO YOU THINK?

Graduate and post-graduate students discuss the future of capitalism

07

SAGIA EDITORIAL ADVISOR EDITORIAL LIAISON

Fahd M Hamidaddin Aseel A Al-Zamil

MOTIVATE PUBLISHING EDITOR-IN-CHIEF GROUP EDITOR + MANAGING PARTNER GROUP SENIOR EDITOR

Obaid Humaid Al Tayer Ian Fairservice Gina Johnson

GROUP EDITOR FEATURES EDITOR CHIEF SUB EDITOR EDITORIAL ASSISTANT GENERAL MANAGER GROUP SALES GENERAL MANAGER SPECIAL PROJECTS GENERAL MANAGER – PRODUCTION + CIRCULATION PRODUCTION MANAGER DISTRIBUTION DESIGN INTERNATIONAL CORRESPONDENTS

Catherine Belbin catherine@motivate.ae Dorothy Waldman dorothy@motivate.ae Iain Smith iain@motivate.ae Belinda Igaya belinda@motivate.ae Anthony Milne anthony@motivate.ae Ashish Limaye ashish@motivate.ae S Sasidharan sasidharan@motivate.ae C. Sudhakar sudhakar@motivate.ae Nayeem Dakhway nayeem@motivate.ae Design Studio Ashlee Beard, Steve Hill, Joanne Molina, Glenn Freeman, Lisa Vincenti, Laura Collacott

SAUDI ARABIAN GENERAL INVESTMENT AUTHORITY (SAGIA) SAGIA HEADQUARTERS

Imam Saud Bin Abdulaziz Road (University Road), PO Box 5927, Riyadh 11432, Kingdom of Saudi Arabia, T +966 1 203 5555 F +966 1 263 2894 E Info@sagia.gov.sa

SAGIA INTERNATIONAL OFFICES MIDDLE EAST & AFRICA EUROPE FRANCE ITALY GERMANY UNITED KINGDOM

Hatem A Al-Ahmad; E mena@sagia.gov.sa Mai Al-Torki; E europe@sagia.gov.sa Lucile Pons van der Slikke; E france@sagia.gov.sa Mai Al-Torki; E italy@sagia.gov.sa Dahlia T Rahaimy; E germany@sagia.gov.sa Sara Bouzo; E uk@sagia.gov.sa

THE AMERICAS

Ahmed Islam; E americas@sagia.gov.sa

WASHINGTON DC

Ahmed Islam; E americas@sagia.gov.sa

EAST ASIA WEST ASIA

Noriko Sozuki; E japan@sagia.gov.sa Meshari S. Al-Khaled; E singapore@sagia.gov.sa

MOTIVATE PUBLISHING HEAD OFFICE

PO Box 2331, Dubai, United Arab Emirates T +971 4 282 4060 F +971 4 282 4436 E motivate@motivate.ae

ABU DHABI

E motivate-adh@motivate.ae

LONDON

E: motivateuk@motivate.ae

INTERNATIONAL MEDIA REPRESENTATIVES AUSTRALIA CHINA/HONG KONG CYPRUS FRANCE/SWITZERLAND GERMANY INDIA ITALY JAPAN

Emphasis Media Limited; E advertising@emphasis.net Epistle Communications & Media; E nasreenk@epistlemedia.com Intermedia Europe Ltd; E administration@intermedia.europe.com IMV International Media Service GmbH; E j.hoffmann@vhb.de Media Star; E ravi@mediastar.co.in IMM Italia; E lucia.colucci@fastwebnet.it Skynet Media Inc.; E skynetmedia@y2.dion.ne.jp

TURKEY

Media Ltd; E mediamarketingtr@medialtd.com.tr

UNITED KINGDOM

Spafax Inflight Media; E nhopkins@spafax.com

UNITED STATES PRINTING

sagia.gov.sa

Okeeffe Media; E okeeffekev@bigpond.com.au

Redwood Custom Communications Inc.; E brigitte.baron@redwoodcc.com Emirates Printing Press, Dubai

Motivate Publishing LLC, on behalf of Saudi Arabian General Investment Authority, publishes THINK quarterly. SAGIA and Motivate Publishing do not accept liability for errors or omissions contained in this publication for whatever reason, however caused. The opinions and views contained in this publication are not necessarily those of SAGIA or of the publishers. SAGIA and the publishers take no responsibility for the goods and services advertised. All materials are protected by copyright.

All rights are reserved. No part of this publication may be reproduced in any material form whatsoever without the written permission of the copyright owner, except as may be permitted by applicable laws.

EDIT 2010

WINNER’S CIRCLE Such goal-setting approaches are also reflected within the cultural landscape, a rich tapestry that is unfolding further across the region.

The environment is also inextricably tied to global survival and success, with the new Saudi Arabia leading regional progress in enhancing the environmental agenda at all levels, from individual through to corporate and political.

Only through leveraging each of the above concepts, combining thought and action, can we stand atop the winners podium and continue the perpetual drive for success.

Catherine Belbin, Group Editor THINK@motivate.ae

A cancer cell

011

CORBIS

In this issue THINK focuses on the rewards of winning through unified strategic and tactical approaches.

The joining of hands to form the worlds largest human ribbon to create awareness of breast cancer; the uniting of countries to create a stronger single currency and economic zones - each of these outcomes is achieved only through goal orientation, careful manoeuvring and evaluation.

In addition to planning, leadership qualities are paramount in achieving success in all disciplines of life, whether cultural, social, political or economic.

Fostering collective, critical thinking and encouraging debate at all levels is just as important. This creates knowledge and opinions that can be leveraged in achieving individual and national goals.

LEADING THE WAY WRITTEN BY LAURA COLLACOTT

From the memoirs of Britain’s former Prime Minister to the strong position of the Arab world in the economic downturn, there is plenty catching the eye across the globe

013

SPECTRUM JOBS IN CRISIS

THE International Monetary Fund (IMF) is warning that the United States and Europe face the worst job crisis since the 1930s. The labour market is in dire straits. “The recession has left behind a wasteland of unemployment,” says IMF chief Dominique Strauss-Kahn, stressing that joblessness could cause an explosion of unrest and destabilise democracies.

According to a joint IMF-ILO (International Labour Organisation) report, 30 million jobs have been lost since the downturn; the majority in richer economies, and 210 million people are now without work. Compounding the problem, and its resolution, the experts anticipate that growth, when it rebounds, will be less labour intensive and require fewer workers. Globally, industry needs to create 45 millions jobs a year to just tread water.

The leaders of the ILO and IMF are calling upon governments to commit to policies that focus on job creation and effective social dialogue, mitigating the threat of unrest.

“Tackling the jobs crisis is not only critical for a meaningful global economic recovery, but also for social cohesion and peace,” Strauss-Kahn adds.

Since stepped down as Prime Minister of Great Britain, Tony Blair has turned his hand to many things, including being Middle East Peace Envoy. He has now penned his book, A Journey, which describes his life as a political leader.

In it, you can read first-hand about the difficult decisions it takes to run Britain domestically and internationally; the highs, the lows; the conflicts, the peace negotiations; the reforms and the internal struggles. Blair seeks to illuminate behindthe-scenes political life, draw out lessons on leadership in difficult, challenging times and project his opinions on the shape of the new world order to come.

Community conscience

In an effort to instil a sense of social responsibility among business people in Saudi Arabia, The Red Crescent is working to establish Friends of the Red Crescent committees at all chambers of commerce and industry across the Kingdom.

The policy aims to exchange ideas that will help to promote humanitarian and philanthropic activities with the support of business people. Committees will be charged with arranging appropriate ways of collecting donations, holding activities and hosting relevant programmes.

014

©UNESCO/ADA

Memoirs of a Prime Minister

CULTURAL UNDERSTANDING UNESCO and Saudi Arabia have together launched the King Abdullah Programme, an international initiative to promote a culture of dialogue and peace.

To mark the occasion, representatives from UNESCO and The Kingdom officially opened a pertinent cultural exhibition that displays 23 paintings by top artists from around the world, Twenty Windows on the World.

“Saudi Arabia wanted to tackle all problems through dialogue that deepens the common values of nations and cultures,” says Prince Faisal Abdullah, Education Minister.

He stressed the importance of finding a solution to the Palestinian problem and of promoting world peace through the encouragement of peaceful coexistence between faiths and cultures.

EMERGING WEALTH

INSURING SAUDI

EMERGING markets are poised to be worth US$80trillion in two decades, more than five times what they are worth today, according to research by Goldman Sachs.

China is set to become the world’s largest stock market, thanks to fast economic expansion and a growing capital market. A report by the IMF anticipates that emerging economies will expand 6.4 per cent in 2011, compared to just 2.4 per cent in developed countries.

Timothy Moe, the report’s author, estimates that institutional investors will buy US$4trillion in equities to raise their stake in emerging markets from six per cent to 18 per cent.

THE Saudi insurance sector is ripe for mergers and acquisitions, according to Ali Al-Subaihin, CEO of Tawuniya. He said authorities are keen to develop the employment market for the growing population and reduce dependency on oil, having licensed 30 new insurance firms dealing largely in health and motor insurance, which is not currently compulsory.

Few of these companies have been able to gather the scale necessary to become profitable, leading analysts to believe that mergers and acquisitions will be required.

“Consolidation is bound to happen, if it

does not happen this year, it will happen next year or the year after. The catalyst would be for the regulator to intervene and suggest that some firms merge or for some firms to seek the regulator’s approval to merge,” says Ali AlSubaihin, speaking at theReuters Middle East Investment Summit.

“The sector is ripe for consolidation. It does not look like the regulator will license more insurance firms. For us, we will consider any viable opportunity, the only problem is that we have yet to find the right opportunity.”

LIFE BLOOD

SAUDI Arabia is to build the world’s largest desalination plant having signed a deal with Doosan Heavy Industries & Construction for a US$1.46billion facility in Ras Az Zawr. It will have a capacity of 228 MIGD (Million Imperial Gallons per Day), enough to supply 15,000 people, and use the combined processes of Multi-Stage Flashing and Reverse Osmosis.

Water is a heavily pressurised resource in the region and demand grows as quickly as desalination plants can be built. Kuwait was the first country to build a desalination facility in the 1960s and today more than 50 per cent of all desalination occurs in the Middle East, with 24 per cent in Saudi Arabia.

In addition, the country has signed contracts for the construction of a freshwater pumping station to deliver water between Taif and Baha.

The deal is worth US$283million and when complete will supply 80,000 cubic metres of desalinated water daily from the plants in Shuaiba and Shaqeeq to four additional cities.

Money matters

RISING CONFIDENCE CONFIDENCE in the Saudi Arabian domestic market has improved, supporting recovery, according to a recent survey by Banque Saudi Fransi. Business leaders are beginning to take more investment risks for higher returns, while consumers are returning to the shops. Executives are still proceeding warily, but more are prepared to take bullish moves.

The Eurozone debt crisis affected sentiment in the third quarter, but businesses have mitigated this by planning increased production capacity and new staff hires.

Of course, a higher oil price also underpins confidence, as do perceptions of improved real estate prices and better share performance.

INFLATION DIPS INFLATION in Saudi Arabia has eased from an 18-month peak of 6.1 per cent to 5.9 per cent. This is the highest among the Gulf crude producers.

The governor of the Saudi Arabian Monetary Agency (SAMA), Muhammad Al-Jasser, says the rises are a result of increased global food prices and believes monetary measures are powerless to curb rising inflation.

Experts believe the inflationary pressures are difficult to manage in the short-term as they are influenced by global trends and only rental inflation can be pragmatically challenged with structural fixes and the building of more housing units.

SAUDI HOSTS GLOBAL FORUM LEADERS from international business and politics will gather in Riyadh, Saudi Arabia for the 2011 Global Competitiveness Forum (GCF), held from 22 to 25 January.

Entering its fifth year, the GCF is an annual meeting of top business executives, international political leaders, selected intellectuals and academics who share an interest in global competitiveness. Paul Hawken, internationally acclaimed environmentalist, businessman and author, is among the confirmed keynote speakers at this year’s event, which features a cast of global leaders from business and politics.

The program is designed to create a discussion platform for various international stakeholders on a broad range of topics. Innovation is the theme of the 2011 GCF, with each annual forum crafted around a central focus.

Delegates from past events include Tony Blair, former British Prime Minister, James Wolfensohn, 9th President of the World Bank and Michael Dell, Founder and CEO, Dell Inc. To learn more about the GCF, agenda or speakers you can visit www.gcf.org.sa

HIGH ENERGY

THE Council of Ministers in Saudi Arabia has underlined its support for efforts to ensure energy security. Chairing the Cabinet meeting, King Abdullah spoke about recent communications to develop good working relations with the Syrian President Bashar Assad; Iranian President Mahmoud Ahmedinejad; and Egyptian President Hosni Mubarak.

There are also calls in the Cabinet to strengthen the Arab League co-operation in order for the organisation to play an effective

role at regional and international levels.

“Every Arab country should comply with reforms and agreed upon resolutions and show a high degree of credibility and seriousness in implementing resolutions,” a Cabinet statement said.

The Cabinet urged the international community to extend all-out support to Pakistan to help the country recover from the recent floods that killed hundreds of people and rendered thousands more homeless. It also agreed to sign MOUs with Lebanon, Vietnam and South Korea to improve youth welfare, agriculture and water respectively.

A recent customer poll into the Best Domestic Cash Management Bank voted the Saudi British Bank (SABB) as top in the field. The survey, conducted

by Euromoney, was based on feedback from cash managers, treasurers and financial officers worldwide who were asked to rate the services provided by their lead cash management bank. It is the third year running that the bank has walked away with the award.

“This award clearly demonstrates that our approach to cash management is being well received in the Kingdom.

We are committed to delivering top quality service and are focused on creating tailor-made solutions based on our customers’ needs,” says David Dew, managing director of SABB. “This technical strength, combined with our extensive foot print in the Kingdom and our global reach has positioned SABB as one of the strongest cash management banks in Saudi Arabia.”

Combating fraud Dr Abdulaziz Al-Khwaiter of the Finance Ministry spoke at the Consumer Protection from Fraud and Counterfeiting forum to stress that commercial fraud and counterfeiting are issues that have negatively affected consumers and the wider public. He says that the government, in conjunction with the private sector, has taken a collective stand to eradicate commercial fraud and counterfeiting.

The First Arab Forum for Consumer Protection from Fraud and Counterfeiting has brought in new recommendations for Saudi Customs to limit the supply of fake products, which have so far been effective. They have cleared the country’s name from the strict regular watch list, particularly in relation to the protection of intellectual property rights.

015

SPECTRUM

SOFITEL LUXURY HITS KSA EASTERN PROVINCE OPEC’s halfcentury In September, OPEC, the organisation representing the countries that claim threequarters of the world’s proven reserves, marked its 50th anniversary.

The organisation played a key role in restoring the price of US$70-80 per barrel – the range it feels is appropriate for consumers and producers – during the latest recession. Senior officials in Libya, however, have claimed that this figure should rise to US$100 per barrel because the rising cost of imports has eroded members’ income: wheat prices have risen by over 50 per cent as a result of the Russian drought, a market that Libya buys heavily from.

Acting as the industry’s only regulator, OPEC has the power to influence price and supply and is set to have a more critical role going forward as world demand increases and supplies become more limited. Although non-OPEC production is forecast to grow, over the longer-term, forecasters believe that OPEC’s market share will increase thanks to ongoing exploration.

Cancer research AstraZeneca and Cancer Research UK have taken a new drug into clinical trial that could revolutionise the treatment of cancer.

AZD-3965 blocks cells’ ability to generate energy and therefore survive – AstraZeneca’s development department are to see if this can be of benefit to cancer treatment. At the end of the trial the pharmaceutical giant has the option to develop the drug further or surrender the rights to Cancer Research Technology to secure a different partner, maximising the chance of the drug reaching patients.

016

THE Sofitel Al Khobar The Corniche, the latest luxury hotel to open in the popular Eastern Province of Saudi Arabia, has opened in Al Khobar, an important regional economic centre reputed for its luxurious malls, pedestrian streets, and numerous cafés and restaurants.

“Consistent with the Sofitel luxury brand’s image and positioning, we are confident that Sofitel Al Khobar The Corniche will be the landmark property for the Sofitel brand in the Kingdom of Saudi Arabia and will complement our other properties of the region,” said Sami Nasser, Sofitel Vice President, Middle East, Africa and Indian Ocean.

Located on Saudi Arabia’s east coast, the elegant hotel looks out over the Arabian Gulf and offers views over both the city and the sea. The hotel’s interiors were created by, WA International, imbibed with the spirit of the Orient, whilst the powerful silhouette of the building dominates the coastline.

Sofitel Al Khobar The Corniche joins other Sofitel hotel properties due to open in Bahrain, Egypt and Mauritius in 2011.

TOURISM DRIVE IN order to tap into a niche market of conservative tourism, the Saudi Commission for Tourism and Antiquities is launching a programme called “Umra Plus”. This will encourage pilgrims to extend their stay in the Kingdom and visit previously inaccessible sites such as the ancient Nabatean city in Madaen Saleh and the remains of the famous railway linking the Levant with the holy city of Mecca.

In an effort to enhance the quality of the tourism provision in the country, the commission has proposed that Saudis working in the sector are sent abroad for familiarisation and training to improve service standards as they disseminate their learning on their return.

The government has handed out

BUILDING TOWARDS SUCCESS

US$344million in maintenance and operations contracts to keep the country’s airports clean, landscaped and operational.

All initiatives form part of an overall strategy to increase tourism receipts and boost the sector’s contribution to non-oil GDP to 11 per cent over the next two decades. It currently brings 6.5 per cent of the non-oil GDP.

SAUDI Arabia awarded US$6.5billion worth of construction contracts in the second quarter of 2010, almost double the value of contracts in the first quarter and a trend likely to continue.

Most spending has been in the sectors of energy and residential real estate, and the sector has been boosted by massive government spending on infrastructure as well as stated government priorities that have spurred a number of mega-projects.

The construction sector in the country is forecast to grow by 6.4 per cent in 2010 and will contribute 10.4 per cent to GDP. Employment by construction companies accounts for a staggering 40.4 per cent of the workforce. It is growing at a faster pace than the hydrocarbon sector, which is expected to grow by 4.4 per cent this year.

GENESIS DESIGN BY RADO

r 5.5 AUTOMATIC / HIGH-TECH CERAMICS / WWW.RADO.COM

ART+CULTURE

PICTURE PERFECT AS THE INTEREST AND DEMAND FOR PHOTOGRAPHY CONTINUES TO INCREASE, THE VALUE OF VINTAGE AND CONTEMPORARY WORKS IS RISING. WRITTEN BY DOROTHY WALDMAN

Sotheby’s New York Photographs from The Polaroid Collection Ansel Adams Canyon de Chelle National Monument, Arizona

WORKS by Robert Frank, Richard Avedon, Irving Penn and Ansel Adams were among the most sought after pieces at the recent auction of outstanding photographs held on October 8 by Phillips de Pury & Company in New York.

Estimated to yield between US$100,000 and US$150,000, Robert Franks’ 1955 Trolley - New Orleans is undoubtedly one of the pillars of classic American photography and it sold for US$158,5000. Richard Avedon’s Brigitte Bardot, Hair by Alexandre, Paris Studio from 1959 is among his most celebrated and rare portraits and was estimated to bring a sum in the same range as Trolley, but actually sold for US$170,000.

Pablo Picasso a la Californie, Cannes,

shot by Irving Penn in 1957, embodies the majestic essence of the Spanish artist as well as the timeless elegance of the renowned photographer. It sold for US$182,500, considerably more than the estimated US$80,000-US$120,000 predicted prior to the sale. His 1951 photograph Chef made an impressive showing, bringing US$134,500, four times its predicted selling price of between US$30-40, 000.

Other photographic masterpieces included in this unprecedented sale that included Robert Mapplethorpe’s Calla Lily from 1986 which went for US$74,500, a number of works by Ansel Adams, as well as the more recent Paradise 23 Sao Francisco de avier, Brasil, Thomas Struth’s 2001 work that was estimated at US$60,000-80,000,

but actually went for US$86,500 while Marilyn Minter’s Swarve from 2005, sold at the middle of its estimated range at US$31,250.

A summer sale at Sotheby’s of Photographs from the Polaroid Collection exceeded the expectations for the entire sale after just the first night.

A new record was set for Adams with his iconic mural-sized prints, which achieved the top five prices of the first night’s sales. Clearing Winter Storm, Yosemite National Park, from 1942 sold for US$722,500, well above its high estimate of US$500,000.

The high prices being paid for photography are an indication of the resilience of the market, according to Vanessa Kramer, director of photographs at Phillips de Pury. Unlike

other art forms, photography requires the artist to actually be in the presence of the subject, determining what is to be photographed and what is to be excluded, how and what angle to frame the photo at and exactly which moment to grasp, all of which are highly subjective.

Photography has found an avid new following in a generation that is intrigued by the fusing of science and art to interpret reality by freezing time, capturing an instant that can then be manipulated to expand the limits of creativity and the perception of reality.

Throughout the world, photography and photography exhibitions are increasing in importance and popularity, as illustrated by the number and range of exhibits on offer.

019

ART+CULTURE Parcours de Travali Maison Europenne de la Photographie, Paris

01

HIGHEST PRICES PAID FOR PHOTOGRAPHS

Karl Lagerfeld, the renowned Francebased German fashion designer, offers some impressive surprises in his innovative, experimental photographic work. If the exhibit merely featured his work in fashion, it would still be worth seeing, but this proves to be so much more than that with intriguing portraits, landscapes and architecture.

His work ranges from silkscreen cityscapes to Lichtenstein-inspired Poplike pictures to a neon-encircled selfportrait in his The Beauty of Violence series, which features Italian model Baptiste Giabiconi. Until October 31.

Brasilia, 1500 Gallery, New York

Celebrating a half century of Brasilia, the purpose planned and built capital in the centre of Brazil, the 1500 Gallery in New York, which specialises in Brazilian photography and photographers, is displaying vintage photographs of the city.

Curated by Murillo Meirells, the images capture the planning, construction and inauguration of the capital city during the late 1950s. The architectural, figurative and photojournalistic images in the Brasilia exhibition highlight the idealism of the socialist government and its team of visionary urban planners, architects and landscape designers, including Lucio Costa, Oscar Niemeyer and Roberto Burle Marx.

Until November 27.

Heinrich Kuhn, Musée de l’Orangerie, Jardin des Tuileries, Paris

Pictorialism, an international photographic movement around the beginning of the 20th century that was closely linked to Alfred Stieglitz and Edward Steichen, strove to create photographic images that rivalled the artistic merits of painting. Heinrich Kuhn, one of its central figures, was known for his experiments with printing techniques such as gum bichromate. Work like this is included in the exhibition, as well as his progression from Romantic Impressionism to a less detailed, almost abstract style that emphasised the study of light, emphasising the 020

1. 99 Cent II Diptychon (2001), Andreas Gursky (Three prints of the same photograph) US$3,346,456, February 2007; US$2,480,000, November 2006; US$2,250,000, May 2006

tonal values that were reflected in the development of the Vienna Secession.

He is considered the master of the autochrome, a technique with rich, delicate colours.

From October 2 to January 23, 2011 Facing East, Davidson College, United States

The works of three US-based artists of Middle Eastern descent look at the concepts of identity and “otherness’ in a multimedia exhibition that examines traditional structures and the contemporary visual culture.

From October 14 to December 8.

Changing Views: 100 years after the Exhibition Masterpieces of Muhammadan Art in Munich, Haus der Kunst, Munich

The Future of Tradition – The Tradition of Future will mark the centennial of the

02

largest exhibition of art from Islamic culture. The celebration will also include several exhibitions, lectures and cultural programmes, including installations from the original 1910 exhibition (which featured more than 3,600 pieces and set new standards for the research and reception of art from Muslim countries) as well as contemporary art, design, photography, architecture and fashion, with displays designed by innovative Egyptian architect Samir el Kordy.

Until January 9, 2011.

A Sense of Being, Saudi Pavilion at Shanghai World Expo 2010

2. The Pond-Moonlight (1904), Edward Steichen US$2,928,000, February 2006 3. Kremlin of Tobolsk (2009), Dmitry Medvedev US$1,750,000, January 2010 4. Nude (1925), Edward Weston US$1,609,000, April 2008 5. Georgia O’Keeffe Hands (1919), Alfred Stieglitz US$1,470,000, February 2006 6. Georgia O’Keeffe Nude (1919), Alfred Stieglit, US$1,360,000, February 2006

More than 130 contemporary works of art created by 23 Saudi contemporary artists express a sense of being through faith and respond to global and local issues. The exhibition, under the auspices of the King Abdulaziz Center for World Culture at Saudi Aramco, includes photography, calligraphy, poetry, paintings, sculptures, animations, videos, and installations.

Until October 31.

7. Untitled (Cowboy) (1989), Richard Prince US$1,248,000, November 2005

Photography Through the Eyes of Saudi Arabian Women

10. The Great Wave Sete (1857), Gustave Le Gray US$838,000, 1999

A recently released book, Photography Through the Eyes of Saudi Arabian Women, by Saudi Arabian photographer Rania Abdel Razek, a photography teacher at Dar Al-Hekma College, features a collection of images

by Saudi female photographers. It spawned an exhibition focusing on the artists’ perspectives.

8. Nautilus (1927), Edward Weston US$1,082,500, April 2010 9. Athènes Temple de Jupiter olympien pris de l’est (1842), Joseph-Philibert Girault de Prangey US$922,488, 2003

11. Joueur d’Orgue (1898-1899), Eugène Atget US$686,500, 2010 12. Andy Warhol (1987), Robert Mapplethorpe, US$643,200, 2006

01 New Installation of the Modern Art Galleries Museum Associates/ LACMA 02 Red OverLook, 2009

ART+CULTURE

SHOOT LOCALLY, SHOW GLOBALLY SAUDI ARABIAN PHOTOGRAPHERS HAVE BEEN INVITED TO PARTICIPATE IN A THINK PHOTOGRAPHIC COMPETITION BY SUBMITTING A RANGE OF PHOTOGRAPHS THAT HIGHLIGHT THE DIVERSITY OF THEIR COUNTRY. WRITTEN BY DOROTHY WALDMAN

TODAY’S Saudi Arabia is rapidly transforming itself into one of the most competitive economies in the world and it is becoming one of the most lucrative markets for strategic investment. Saudi Arabia is also home to creative, talented people who are proud of their country’s culture, progress and aims for the future.

To communicate the new Saudi Arabia to the world, THINK is sponsoring the National Photographic Competition 2010. All photographers in Saudi Arabia – amateur or professional, young or old, regardless of gender – have been invited to capture their vision of the Kingdom of today to communicate the theme of Think Saudi Arabia: Capturing Advancement in Design, Economy and Society.

Appreciating the reality that art reflects the essence of the culture and the people that created it, THINK has selected photography as the medium for this competition to communicate the wonders of contemporary Saudi.

According to Michal Stecklw, one of the international jury of respected 022

visual arts and media experts who will judge the submissions: “Photography is one of the most effective ways of reaching out to an international audience with a story or projected image. It transcends linguistic, religious and political barriers. It serves as a point of connection between a photographer and his audience across various cultural codes.”

Photographers submitted up to five entries, in up to three of the seven categories that reflect different aspects of the new Saudi Arabia. The categories were selected to allow for a three dimensional view of the Kingdom.

However, in addition to reflecting their country, the photographers will also provide insights into their own values and their approach to their art, providing an even deeper look into the essence and creativity of those who live, and are therefore products of, what is to much of the world the Saudi Arabian mystique.

Some may view their art much as HRH Reem Al Faisal, a photographer who is also a judge. “I like to define myself as a Muslim artist, sprung from my native

Saudi culture and history. For me, light is one of the many manifestations of God. Every photograph is a pattern of light and shade. For me, my photography is a way to praise God’s glory in the universe,” she says.

The tenets of good photography will also be at the forefront of the judging.

Rachel Hotchkiss, the creative director of Image Source, another judge, adds: “When considering the question, what makes a good image, I always respond – an image that is personally unique and carries an individual thought, opinion or idea, but communicates globally.”

Art, especially photography, has the power to stir emotions with the capturing of a single instant in time and to facilitate change, which is one of the challenges of this competition.

“In an ever changing world, creative professionals face the challenge to express through their work the thoughts of society. This is a vital task that sometimes is overwhelmed by business demands and the wrong idea that extraordinary cannot be found in the ordinary moments of life,” says Daniel

Bernado, one of the panel of judges.

In addition to encouraging great photography, this competition also challenges the artists to do much more – to change perceptions. “As a media professional, it’s exciting to be part of something that can change the perceptions and expand the concept of art as a tool to improve the world we live in, bringing to life the essential creative thought,” Bernardo says.

All entries must were submitted by October 31 for judging and the winners will be announced online at a later date, with cash prizes awarded to those who come first and second. Additionally, the winning photographs will appear in future issues of THINK and all high quality photographs will be shown in a special exhibition.

SPONSORS The competition is sponsored by Toyota Land Cruiser, Abdullatif Jameel, celebrating the 60th anniversary of production of the first 4x4 cars in Saudi Arabia; Al-Watan Newspaper, is the media partner, and is known

CATEGORIES

JURY

Individuals may submit in up to three of the following categories.

“SAGIA BELIEVES THAT ART IS A REFLECTION OF CREATIVITY AND INNOVATION. IT IS MOST IMPORTANTLY A UNIVERSAL LANGUAGE, A BRIDGE BETWEEN COUNTRIES, CULTURES AND PEOPLE. THINK MAGAZINE, AS A NEW VOICE OF SAUDI ARABIA HEARD BY GLOBAL BUSINESS AND THOUGHT LEADERS, IS PROUD TO COMMUNICATE THE KINGDOM’S DEVELOPMENT AND TRANSFORMATION THAT UNVEILS EXCEPTIONAL BUSINESS OPPORTUNITIES. AND THERE IS NO BETTER MEANS OF COMMUNICATION THAN THE ART CAPTURED BY THE LENSES OF SAUDI’S TALENTED PEOPLE”.

FAHD M. HAMIDDADIN GENERAL DIRECTOR OF MARKETING AND COMMUNICATION, SAGIA

for supporting Saudi youth and feel strongly about the patriotic implications the competition brings.

Meanwhile sponsor Bravo, sees THINK magazine as an ideal way to reach its CEO class readership. The exhibition design is sponsored by Focal Design.

DATES The exhibition of entrant’s work will be held in Jeddah at the Ana Special Mall on the November 17 and in Riyadh at the end of November, where the winning photographs and approximately 50 of the best participating photos will be displayed.

Submissions can be viewed at:

www.thinksaudiarabia.com

Design & Architecture Buildings, sculpture or even architectural details viewed from different angles and perspectives, perhaps contrasting the contemporary and historic, or focusing on the beauty of geometry or exquisite brickwork, offer talented artists rich and diverse possibilities to capture Saudi Arabia in fresh, creative ways.

Identity Visually explore the questions, “Who am I?” “Where do I come from?” and “Where do I belong?” to facilitate an understanding of the Saudi Arabian culture in the international arena.

Development Underscoring the new competitive Saudi Arabia, this category focuses on advancements in such areas as education, healthcare, infrastructure, industry, science and the economy.

HRH Princess Reem Al Faisal Photographer Born in Jeddah, Saudi Arabia, she studied Arabic Literature at King Abdul Aziz University in Jeddah and photography at Speos School in Paris.

Rachel Hotchkiss Creative director, Image Source Rachel Hotchkiss leads the team responsible for the creation of both photographic images and motion clips and sets the creative strategy. Her role is to conceptualise, visualise, conceive and produce contemporary creative products.

Michal J Steckiw Jury panel moderator & consultant, projects manager Michak Steckiw founded MJS Creative and works with the creative industry and international design bodies in Canada, United Kingdom and Poland. He also is involved in Design Weeks in Qatar, Australia, Cuba, Italy and Spain and the World Design Congress in Beijing. He is also a photographer.

Culture & Society Images of people and events, those that tell a story in that one instant, even without words, are the theme of this category. Think of the photo accompanying a news story about a celebrity or important event that says more than the words. Submissions may be in either colour or black and white.

Andrea Springer Programme director, World Design Capital Andrea Springer currently works for the International Council of Societies of Industrial Design – an initiative that seeks to showcase cities that have leveraged design as a tool to improve social, cultural and economic development.

Natural Beauty Be it sand dunes that stretch past the horizon or a single blossom, the scale and possibilities of the photography of nature in the unique regions of the Kingdom is almost endless.

Adam Scholes Global creative Director, JWT An unconventional artistic talent who has worked in music, videos and print, Adam Scholes has won numerous awards in a variety of media, including a Silver Lion at Cannes and a D & AD Pencil and Poster of the Year.

Documentary Record an actual event, not altered by the camera or technology, to accurately document a person, place, issue or significant historical event at a particular moment in time. The event should have taken place between 2009 and 2010.

Advertising/Commercial Create an image designed to sell a product, idea or brand. Whether fashion, retail, music, design or other, use an avant-garde or traditional approach, but be creative and objective. Special effects and equipment are permitted in this category.

Daniel Bernardo Lead designer and creative director, InSkin Media Daniel Bernardo is co-founder and chief designer of Lodren Studio, an independent experimental design house in Brazil, and has a cultural and artistic background that includes social and environmental design, art direction, anthropology/sociology and history of art.

Iva Babaja Designer and Photographer, Vice-President, Icograda/International Design Alliance Babaja is currently creative director at Euro RSCG agency in Zagreb and founder and president of the Association for Promotion of Visual Culture and Communications (VIZUM). She has worked extensively with various international art organisations.

PRIZES First Prize: US$15,000 Second Prize: US$8,000 Best in category: Awarded to the best in each of the seven categories: US$1,000 (3,750 SR) Winning photographs will be published in THINK magazine. All high-quality photographs will be showcased in a special exhibition.

023

024

ART+CULTURE

THE FRUITS OF IMAGINATION

AMONG THE WINNERS AT MICROSOFT’S ANNUAL IMAGINE CUP COMPETITION WAS A SAUDI ARABIAN TEAM, LED BY AL-MUHANNAD ALKADAM,WHO CREATED A FILM ABOUT CONQUERING WORLD HUNGER THAT WON SECOND PLACE IN DIGITAL CATEGORY. WRITTEN BY DOROTHY WALDMAN IMAGINE a world without hunger, imagine a world where resources are used wisely and people voluntarily help others, then imagine how you can be the catalyst to bring about these changes. These were among the challenges students tackled in Microsoft’s annual Imagine Cup competition in 2010, where young people were challenged to use the power of their imaginations and technology to create a powerful visual message that can help change the world.

More than 325,000 high school, college and university students from 113 countries participated in the competition. The winners in the 11 categories were celebrated at an awards ceremony in Warsaw, Poland, where the First Lady of the United States Michelle Obama relayed via video a message that summarised the purpose of the challenge.

“The ideas you are generating and the ways you are turning those ideas into action and into real solutions for real problems is truly remarkable,” she said. “Through your ingenuity, you are literally changing the world.

You are giving birth to new ways of thinking, new ways of doing and new ways of learning. And isn’t that what imagination is all about?”

Let Us Eat Together, developed by Dreaming Spirits, a team of students from Saudi Arabia led by Al-Muhannad Al-Kadam, was awarded second place in the Digital Media category, the first win by a Saudi team. The short film looks at world hunger and presents a solution that anyone who can afford food can participate in to help the less fortunate. Using graphics,

to another, yet our spirits dream of solving all problems of all spirits in the world, no matter what the problem is or what spirit it is, thus, our spirits are dreaming.

Which came first, the story or the graphic possibilities?

The idea of using graphics was there from the beginning. We agreed to put the work together in this way, using motion graphics to present the facts and figures. The scenario was written based on available graphics possibilities.

special effects and clever computer manipulations, the team created an entertaining, educational film that can be viewed at http://www.youtube.com/ watch?v=Q8A-FfiVeuU Al-Kadam, who is also an accomplished photographer, is a student in the architectural department at the King Fahd University of Petroleum & Minerals. In an exclusive interview, he told THINK about his experience working as part of Dreaming Spirits.

What were some problems you encountered and how did you solve them?

There were no severe problems – Alhamdulillah – maybe resources shortage, since we are students, were annoying. But, with Allah’s Blessing we could use the simplest resources to get

a work of this level. Utilising our simple expertise and limited resources to get the best out of what we can do. For example, we were having trouble with sound during video capture due to the fact that we don’t have a sound system.

We were forced after that to record the whole voice in one shot in one of the studios and then merge it with the video. We also used normal lighting, not cinematic lighting, because it is very expensive.

What was it like to represent Saudi Arabia in Poland?

It was really a great feeling to represent my country. The wonderful thing is that my representation ended up winning in a field that nobody else has won before me in a worldwide competition.

It is an outstanding feeling to receive congratulations from all our Arab colleagues. Their congratulations were always: “You are a pride for Arabs.

You raise our heads your victory is our victory.” This is one of the amazing expressions that still resonates in my mind and heart.

What’s next?

I have launched my next movie, Obama Free Homaidan, which appeals to US President Barack Obama to use his constitutional power of presidential pardon to set free a Saudi man jailed for sexual assault. I am aiming in the movie to influence US public opinion and reach Obama with the hope that he would use his powers to pardon Al-Turki.

What was your inspiration for the name Dreaming Spirits and for your film?

The most important relationship that connects us, before nationality, colour and language, is the human spirit.

Spirit is found in all of us, despite our differences. It is the one aspect that doesn’t change There should be some humanity and love in human spirit This amount of love differs from one

025

THINK 10X10

THE

THE KINGDOM’S PERFORMANCE IN KEY INVESTMENT, ECONOMIC AND EASE OF DOING BUSINESS REPORTS CONTINUES TO IMPROVE, BUT THE COUNTRY’S AMBITIOUS PLANS FOR THE FUTURE SHOW THAT IT IS NOT RESTING ON ITS LAURELS.

POWER OF 10 THE

Saudi Arabian General Investment Authority (SAGIA) was proud to announce the extraordinary success of its 10x10 programme, achieved when the Kingdom was ranked 8th for Foreign Direct Investment (FDI) by the United Nations Conference on Trade and Development (UNCTAD) earlier this year. As THINK was going to press, Saudi Arabia was also awaiting the outcome of the World Bank’s 2010 Doing Business Report, which would further secure its position among the top 10 most competitive business destinations in the world.

“Being in the top 10 means that, objectively speaking, at least according to independent international ranking agencies such as the World Bank’s Ease of Doing Business Report, Saudi Arabia is the most conducive environment for business in the world. And if investment goes where it is most welcome, which it does, then it means that investment will flow into Saudi Arabia, which it has,” says His Excellency Governor Amr Al-Dabbagh.

“I imagine also that it could be seen to convey our ability to deliver on an objective, which began five years ago when we launched our 10x10 initiative, which was to become among the top 10 most competitive economies in the world by 2010. And moreover, if it’s the case that countries that have high rankings and/or have shown significant gains have done so by showing consistently superior performance in key macro and microeconomic areas, then we are one of those superior performing countries.”

Al-Dabbagh also acknowledges how numerous other vital accomplishments have helped accelerate the Kingdom’s success. “The Kingdom is also ranked by UNCTAD as the eighth largest attractor of FDI in the world, which is a confirmation of the correlation between competitiveness and FDI inflows,” he says. “Of course, as we become even

026

more competitive, we will become larger recipients of FDI. A competitive investment environment attracts investment, which allows existing companies to grow, which opens the doors for new companies to form, and ultimately leads to job creation and sustainable economic growth.

Investment, simply stated, is the oxygen of any economy.”

The Kingdom’s new ranking definitively reflects the realisation of its 10x10 programme. Established less than half a decade ago in 2006, it was launched by SAGIA to enact reforms and promote targeted investments with the goal of creating an economically competitive environment and positioning Saudi Arabia among the world’s top 10 most competitive economies by 2010. It sought to target, meet and exceed the criteria of internationally acclaimed agencies that evaluate countries’ performances as globally competitive economic powers.

These rankings convey vital qualitative and quantitative messages about the Saudi Arabian economic environment to the international business community. “Messages are subjective, rankings are objective. We are the best place to do business in the world according to objective reports. I imagine, and it is our experience so far as indicated by the UNCTAD report, that investors will act on the favourability of the climate and investment will increase, which is the very point of creating a better business climate,” Al-Dabbagh explains.

The initiatives stemming from 10x10 laid the foundation for Saudi Arabia’s rapid and sustained economic success, which has dramatically contrasted with the recent worldwide financial downturn. Foreign Direct Investment into the Middle East sustained a six-year continuous increase, growing to US$90 billion in 2008, a time when the rest of the world was

FAISAL ALMALKI

WRITTEN BY JOANNE MOLINA

“OUR NEXT GOAL IS ENCAPSULATED IN THREE NUMBERS, 60, 24 AND 7. THE GOAL FOR OUR ECONOMIC CITIES IS THE ULTIMATE IN COMPETITIVE DESTINATIONS, BY PROVIDING ALL GOVERNMENT SERVICES IN 60 MINUTES, 24 HOURS A DAY, 7 DAYS A WEEK.” X

X

X

X

X

X

X

X

X

X

HIS EXCELLENCY GOVERNOR AMR AL-DABBAGH 027

THINK 10X10

FDI STOCK BY SECTORS IN 2009 (TOTAL US$ 147.1 BILLION) MAJOR PROJECTS AND COMPANIES / FOREIGN INVESTORS NATIONALITY

BANQUE SAUDI FRANSI France SABB (SAUDI BRITISH BANK) Netherlands ARAB NATIONAL BANK Jordan SAUDI INVESTMENT BANK USA, Japan

SAUDI HOLLANDI BANK Netherlands BANK AL-JAZIRA Pakistan THE MEDITERRIANEAN & GULF INSURANCE & REINSURANCE CO. MEDGULF Bahrain, Lebanon

8.3%

3.1%

ETIHAD ETISALAT CO. (MOBILY) UAE MOBILE TELECOMMUNICATIONS COMPANY SAUDI ARABIA (ZAIN) Kuwait ALCATEL-LUCENT FRANCE (BRANCH) France GULF STEVECORING COMPANY LTD. Kuwait SABIC TERMINAL SERVICES CO. (SABTANK) Netherlands

SAUDI ARAMCO MOBIL REFINERY CO., LTD. (SAMREF) USA SAUDI ARAMCO SHELL REFINERY CO. (SASREF) Netherlands

14.4%

10.9% 16.7% 5.3%

ARABIAN BEMCO CONTRACTING CO. LTD. Lebanon AL-MABANI GEN. CONTRACTORS COMPANY LTD. Lebanon MIDDLE EAST ENGINEERING & DEVELOPMENT CO. LTD. Korea TECHNIP SAUDI ARABIA LTD. France ABB CONTRACTS CO., LTD. Swiss JAN DE NUL SAUDI ARABIA CO. LTD. Belgium.

CONTRACTING AND TRADING CO. (CAT) Lebanon

SAUDI ARAMCO LUBRICATING OIL REFINING CO. (LUBEREF) USA ARAMCO-TOTAL REFINERY France SAUDI CHEVRON PHILEPS COMPANY USA

10.5%

7.7%

12.2%

6.5%

RABIGH REFINING AND PETROCHEMICAL COMPANY Japan SAUDI POLYMERS COMPANY USA EASTERN PETROCHEMICAL CO. (SHARQ) Japan SAUDI METHANOL CO. (AL-RAZI) Japan SAUDI YANBU PETROCHEMICAL CO. (YANPET) USA SAUDI CHEVRON PHILEPS COMPANY USA SAUDI PETROCHEMICAL CO. (SADAF) USA JUBAIL PETROCHEMICAL CO. (KEMYA) USA SAUDI METHANOL COMPANY (AR-RAZI) Japan SAUDI ETHYLENE & POLYETHYLENE COMPANY France NATIONAL METHANOL CO. (IBN SINA) USA AL-JUBAIL FERTILIZER COMPANY (AL-BAYRONI) Taiwan SAUDI EUROPEAN PETROCHEMICAL COMPANY (IBN ZAHR) Italy, Arab Countries ARABIAN INDUSTRIAL FIBRES CO. (IBN RUSHD) Arab Countries

AL SAFI DANON CO. LTD. France UNITED SUGAR COMPANY United Kingdom MODERN PRODUCTS COMPANY Swiss FUTURE PIPE INDUSTRIES L.L.C. Netherlands JUBAIL ENERGY SERVICES COMPANY (JESCO) Italy NATIONAL PIPE COMPANY LTD. Japan AL-SALAM AIRCRAFTS CO. LTD. USA

4.3%

EMAAR -ECONOMIC CITY (KING ABDULLAH ECO. CITY) UAE BAITEK REAL ESTATE CO. Kuwait AMLAK INTERNATIONAL FOR REAL ESTAT DEVELOPMENT & FINANCE CO. / UAE

REFINED PETROLEUM PRODUCTS CHEMICAL & PETROCHEMICAL INDUSTRIES OTHER INDUSTRIES MINING, OIL AND GAS

028

SHAIBA WATER & ELECTRICITY CO. Malaysia JUBAIL WATER AND POWER CO. Bahrain JUBAIL ENERGY COMPANY USA

RABIGH ARABIAN WATER & ELECTRICITY CO. Japan TYHAMA POWER GENERATION CO. LTD. Bahrain

ELECTRICITY, GAS AND WATER SUPPLY REAL ESTATE CONTRACTING TRANSPORT, STORAGE AND COMMUNICATIONS

SINO SAUDI GAS LIMITED China LUKSAR ENERGY LIMITED Russia ENIREPSA GAS LIMITED Italy, Spain SOUTH RUB’ AL-KHALI COMPANY SRAK France, Netherland SCHLUMBERGER MIDDLE EAST SA USA

ARABIAN DRILLING COMPANY France SAUDI HALLIBURTON LOGGING CO. LTD. USA DOWELL SCHLUMBERGER SAUDI ARABIAN CO. LTD. USA STROYTRANSGAZ BRANCH

FINANCE SERVICES & INSURANCE TRADE OTHER ACTIVITIES

01

01 Riyadh, Saudi Capital 02 Al Jubail industrial plant

02

suffering major losses due to the global recession. Saudi Arabia’s inflows grew 57 per cent to US$38 billion, the largest amount in the region.

According to the 2010 World Investment Report published by UNCTAD, Saudi Arabia succeeded in attracting further FDI investments during 2009, led largely by investments in industry. Total FDI inflows amounted to US$35.5 billion and although these inflows were lower by seven per cent than the total FDI inflows attracted during 2008, they contributed to raising the internal FDI stock value to US$147.1 billion by the end of year 2009.

Analysis of FDI into the Kingdom reveals that some of the world’s greatest economic powers have looked to Saudi Arabia for investment. The sources of the largest FDI inflows during 2009 were the United States, with an FDI inflow amounting to US$5.8 billion, followed by Kuwait (US$4.3 billion), the UAE (US$3.8 billion), France (US$2.6 billion) and Japan (US$2 billion).

The achievements of the 10x10 competitiveness agenda were possible because the programme continuously benchmarked itself against three internationally recognised measures: the World Bank/International Finance Corporation Ease of Doing Business index, published in the annual Doing Business report; The United Nations Conference on Trade and Development’s measurement of FDI inflows into countries, published in the World Investment Report; and The World Economic Forum’s Global Business Competitiveness Index, published in the annual Global Competitiveness Report.

The Doing Business report concentrates on aspects of the business environment, such as procedures and regulations regarding starting businesses, employing workers and enforcing contracts. The World Investment Report ranks countries according to their performance in attracting FDI inflows. The Global Competitiveness Report assesses the longer-term effects of reform on broader themes of competitiveness.

The Kingdom’s success would not have been possible without exceptional leadership. “The new World Bank assessment is evidence

of great leadership in the Kingdom, especially by His Majesty, King Abdullah bin Abdulaziz, the Custodian of the Two Holy Mosques, who is the chief architect behind the vision,” Al-Dabbagh says.

And it is under the leadership of Al-Dabbagh that SAGIA has brought competitiveness to the top of the national agenda with the 10x10 initiative, which has become a model programme for economic competitiveness and investment.

IN ADDITION, striving to meet and exceed the recommendations and criteria of these three external measures of evaluation, SAGIA infused the private sector with the spirit of competition by launching strategic internal domestic initiatives, such as the Saudi Fast Growth 100 initiative.

This national programme promotes entrepreneurship and innovation by recognising Saudi Arabian businesses with the fastest revenue growth over a five-year period.

Another internal device to measure and create a competitive environment for economic growth is the Saudi Arabian Responsible Competitiveness Index (SARCI). This multi-year initiative assesses the strength of participating organisations’ strategies, management, engagement processes and performance systems as well as ranking the most socially responsible companies in Saudi Arabia.

Organisations with exceptional SARCI results receive recognition in the form of the King Khalid Responsible Competitiveness Award, given to the top three most socially responsible companies on the SARCI. In 2010, three outstanding companies – National Commercial Bank, Al Fanar Company and Zamil Industrial – were presented with King Khalid Awards for Responsible Competitiveness to mark their achievements as responsible business leaders.

The winning companies earned recognition for their ambitious, balanced and responsible business programmes, which combine 029

JOSEPH POON

THINK 10X10

01

leadership with effective management systems. SARCI measured the companies against primary drivers of responsible competitiveness: the state of health and safety, employee benefits, charitable giving, resource efficiency, product innovation, consumer education and responsible lobbying. The National Commercial Bank was recognised for being the first Saudi Arabian business to produce a world-class sustainability report, Zamil Industrial was noted for its environmental management programme and Al Fanar was praised for its commitment to reducing counterfeiting and its focus on customer satisfaction.

The Saudi Oxford Advanced Management and Leadership Programme engages public and private sector leaders in an educational environment to discuss leadership challenges and design innovation strategies, the final component of the SARCI, which created an atmosphere where Saudi companies can implement the necessary changes that helped the Kingdom to achieve its top 10 rankings.

The extensive efforts to establish leadership that would advance their competitive economic agenda included the establishment of the National Competitiveness Center (NCC). It monitors, assesses, and supports the enhancement of competitiveness in Saudi Arabia. Under the direction of the President of the NCC, Dr Awwad Al-Awwad, Deputy Governor for Investment Affairs at SAGIA, the NCC has successfully pursued the competitiveness agenda and driven reforms essential to the Kingdom’s growth.

“Our progress would not be possible without the invaluable cooperation and shared vision of our partners throughout the government and the private sector,” Dr Al-Awwad says.

030

02

A remarkable history of public partnership and internationally recognised accomplishments, in conjunction with an unwavering dedication to reform, made this rapid advancement in the Kingdom’s international rankings possible. In 2009, Saudi Arabia became one of the top 20 most competitive countries for protecting investors. It strengthened investors’ legal rights during the past year by clarifying specific protections afforded by the Companies Act, part of the Regulation for Companies.

Saudi Arabia has demonstrated through its commitment to reform and investors’ security that there has never been a better time to invest in one of the Kingdom’s many internationally competitive economic sectors.

THESE LARGER ambitions were realised by enacting numerous domestic measures to create an internal infrastructure that would accommodate the needs of foreign investors. Recognising the centrality of investors’ rights to the Kingdom’s overall competitiveness, the Ministry of Commerce and Industry emphasised that the current law requires companies to immediately notify shareholders of a director’s conflict of interest in a transaction and to announce the incident on both its own website and that of the Tadawul (Capital Market).

Similarly, the ministry pointed out that the Companies Act empowers minority shareholders to order inspections of a company without the approval of a general shareholders’ meeting. As in the case of construction permit costs, clarifying existing legislation and regulation highlighted the importance of clearly promulgating laws and publicising critical information.

In June 2008, the Unified Office for commercial registration in Riyadh

01 Kingdom Centre, Riyadh 02 Irrigation at Al Jubail Industrial City

TOP 20 COUNTRIES FOR FDI INFLOWS COUNTRY 2009 RANK U.S. 1 China 2 France 3 Hong Kong 4 United Kingdom 5 Russian Federation 6 Germany 7 Saudi Arabia 8 India 9 Belgium 10 Italy 11 Luxembourg 12 Netherlands 13 Brazil 14 British Virgin Islands 15 Ireland 16 Australia 17 Canada 18 Singapore 19 Spain 20

FDI INFLOWS (US$ BN) 130 95 60 48 46 39 36 36 35 34 31 27 27 26 25 25 23 19 17 15

Source: World Investment Report 20010, United Nations Conference on Trade and Development

IMAGE COURTESY OMA

01

01 The proposed new international airport in Jeddah

TOP 20 COUNTRIES IN DOING BUSINESS 2010 COUNTRY Singapore New Zealand Hong Kong U.S. U.K. Denmark Ireland Canada Australia Norway Georgia Thailand Saudi Arabia Iceland Japan Finland Mauritius Sweden Korea Bahrain

2009 RANK 2008 RANK CHANGE 1 1 0 2 2 0 3 4 1 4 3 1 5 6 1 6 5 1 7 7 0 8 8 0 9 9 0 10 10 0 11 15 4 12 13 1 13 16 3 14 14 0 15 15 0 16 11 5 17 24 7 18 17 1 19 23 4 20 18 2

Source: Doing Business, World Bank/IFC, 2009−2010; NCC analysis

became fully operational, thanks to a shared commitment to enhancing the Kingdom’s business environment and tremendous collaborative efforts among SAGIA, the Ministry of Commerce and Industry, the Riyadh Chamber of Commerce, the Official Gazette, the General Organisation of Social Insurance (GOSI) and the Department of Zakat and Income Tax (DZIT).

Integrating personnel from these public authorities as well as from a notary public and a private bank, the Unified Office efficiently consolidates into one entity all of the interactions and procedures necessary to start a business. While the previous system required entrepreneurs to spend days shuttling among different agencies, the pioneering Unified Office allows an individual to register his company, announce its incorporation, open a bank account, and register with GOSI and DZIT under one roof.

Entrepreneurs can now visit the Unified Office one day and receive their commercial registration the next, if not on that very same day.

To meet the needs of foreign industry and construction investors, SAGIA enlisted the help of legal experts to analyze the construction permit process and potential areas for improvement. Research found that the licensing process costs only US$6,345 – not US$11,534 as previously reported: a significant discrepancy that would attract enthusiastic investors. In addition to streamlining procedures, ensuring that accurate information about doing business in Saudi Arabia is reported internationally is crucial to developing the Kingdom’s competitiveness, as publications like Doing Business extensively impact the decisions of investors and entrepreneurs internationally Saudi Arabia has also successfully streamlined its process for

dealing with construction permits and in November 2008, the Riyadh Municipality enabled builders to immediately secure temporary building permits. Indicating an unwavering dedication to the Kingdom’s economic development, the Riyadh Municipality’s new policy reduced the overall time required to deal with construction permits from 125 days to only 94.

Building on the momentum of these and other reforms in 2008, Saudi Arabia reached a ranking of 13th in the World Bank/IFC’s 2009 Doing Business report. For the fourth straight year, the Kingdom’s efforts to strengthen its economy were met with an enthusiastic response from foreign investors, as FDI inflows in 2008 increased by 57 per cent over those in 2007 to more than US$38 billion, making Saudi Arabia the world’s 14th-largest recipient of FDI inflows by 2009 – and eventually the top 10 rankings of 2010.

The future goals of Saudi Arabia reflect the Kingdom’s exceptionally progressive and overachieving ambitions – the same competitive qualities that secured the nation its unparalleled upward mobility in its international rankings. In the near future, the Kingdom aims to create a domestic infrastructure that surpasses technological and bureaucratic efficiency, productivity and stability not only in the Middle East, but across the world.

“Our next goal is encapsulated in three numbers: 60, 24 and 7. The goal for our economic cities is the ultimate in competitive destinations, by providing all government services in 60 minutes, 24 hours a day, 7 days a week,” Governor Al-Dabbagh says. “You can’t sleep because you just remembered you forgot to renew your driver’s license and it’s 2am on Sunday morning? Pop in, we’ll sort it out in no time.”

031

SAMA CEO SPEAKS TO THINK

THINKING ABOUT A

UNIFIED CURRENCY DR MUHAMMAD SULAIMAN AL-JASSER, GOVERNOR OF THE SAUDI ARABIAN MONETARY AGENCY, SHARES HIS THOUGHTS ON THE TOPIC OF A UNIFIED CURRENCY

THE

recipient of the 2010 Achievement Award of the Arab Bankers Association of North America, His Excellency Dr Muhammad Sulaiman Al-Jasser has been the Governor of the Saudi Arabian Monetary Agency (SAMA) since February of 2009. He joined the International Monetary Fund (IMF) as Economic Adviser to the Executive Director for Saudi Arabia in 1988, eventually becoming the Executive Director at the IMF, a post he held until 1995. From 1995, until his current appointment, he served as Vice Governor of SAMA. Dr Al-Jasser has also served as a member of the Saudi Arabian Negotiation Team on the accession of Saudi Arabia to the World Trade Organisation and was honored with the King Abdulaziz Medal of the First Order for his services to the Kingdom of Saudi Arabia.

With a vast experience in the realm of international monetary policy, the current Chairman of the Gulf Cooperation Council (GCC) Monetary Council is eminently qualified to discuss the topic of a single currency, which has been seriously and vigorously debated within the region during recent years. Though the suggested goal of finalising an agreement that provides for a single currency to be used among the GCC states is highly unlikely at this point due to stalled negotiations, Dr Al-Jasser recognises many benefits to such an economic agreement.

“The adoption of a common currency will bring a number of economic benefits,” he states. “It will eliminate the currency conversion costs involved in intraregional transactions and remove the disturbances in relative prices arising from nominal exchange rate fluctuations. The

032

lowering of transaction costs and removal of exchange rate uncertainty will contribute to raising intraregional trade.

“The adoption of a common currency, with the resultant reduction in currency conversion costs and elimination of exchange risks, should promote intraregional investments. It will also be conducive to investment by foreigners in the region. Moreover, the introduction of a common currency will serve as a catalyst for stronger integration and deepening of financial markets.

“It will foster the integration of money markets across the common currency region and lead to a uniform short-term interest rate structure.

The introduction of a common currency will also be associated with the pursuit of a common monetary policy and more disciplined fiscal policies by the member countries.”

However, Dr Al-Jasser, who earned both his Master of Arts and PhD in economics from the University of California in 1981 and 1986, respectively, recognises that in spite of these profound benefits, for a monetary union to be successful, certain safeguards must be implemented.

“Fiscal discipline is crucial for the success of the monetary union.

Without it, large differences in member countries’ fiscal stances can create tensions, leading to policy disagreement and hindering other key macroeconomic convergence requirements for the smooth functioning of the union, such as price and financial stability,” he says.

“Member countries must, therefore, be subject to fiscal convergence criteria [budget deficit/GDP and debt/GDP] and adequate budgetary

CORBIS

WRITTEN BY DOROTHY WALDMAN

THE ADOPTION OF A COMMON CURRENCY, WITH THEX XRESULTANT REDUCTION IN CURRENCY CONVERSION COSTSX XAND ELIMINATION OF EXCHANGE RISKS, SHOULDX XPROMOTE INTRAREGIONAL INVESTMENTS.”X X

HIS EXCELLENCY DR. MUHAMMED SULAIMAN AL-JASSER

033

034

SAMA CEO SPEAKS TO THINK

02

01

01 HE Dr Al Jasser addressing SAGIA’s annual Global Competitiveness Forum in Riyadh earlier this year 02 Opened in 1986, the 25km long King Fahd Causeway links the Kingdom to Bahrain 03 SAMA Head office

procedures for maintaining fiscal discipline. The achievement of fiscal convergence should receive the highest priority before the introduction of the common currency.

“Compliance with the fiscal convergence criteria is essential on a sustained basis during the transition to the common currency. Thus, improvements related to one-off measures or temporary positive terms of trade shock would not be considered sustainable. A monetary union ultimately needs to be complemented by co-ordination between fiscal and monetary policy.”

This co-ordination between fiscal and monetary policies, especially between participating countries, may, however, prove to be a significant hurdle as such co-operation may be construed as a requirement for each member state to 03 forego a certain level of autonomy and sovereignty.

“The introduction of a common currency will involve a loss of independence in pursuing monetary and exchange rate policies by the common currency countries individually,” Dr Al-Jasser admits. “However, this will not be of much significance for the GCC countries as these countries have already been co-ordinating their monetary, financial and other policies, and their exchange rates have remained almost unchanged for a prolonged period under a similar pegged exchange rate regime.”

Although the common bonds of the GCC countries may promote a level of voluntary compliance not necessarily connecting the countries that use the euro, the recent difficulties the Eurozone has experienced

cannot be ignored. They graphically illustrate the need for safeguards and the potential need to enforce compliance to specific criteria.

“It is highly desirable to form monetary unions for obvious reasons.

However, member countries must play by the rules and strictly adhere to the prescribed convergence criteria to ensure their durable success,” Dr Al-Jasser says as a recommendation to any group of sovereign nations, including those of the GCC who are considering a unified currency. “Indeed, events in the Eurozone point to the necessity of having better balance sheet management at the government and banking system level.”

The role of each nation’s central bank would not be dramatically altered, he says, but there may be certain restrictions.

“National central banks should continue to carry out all standard central banking operations involving the common currency. However, these operations should be in line with the dictates of the monetary union central bank.”

With the multitudinous benefits to countries sharing a unified currency, THINK asked Dr Al-Jasser whether he thought the time had come to consider a worldwide unified currency. Admittedly, this is not on any universal organisation’s agenda, but it is an intriguing concept to contemplate.

“A worldwide unified currency could be part of one’s wish list against a backdrop of diverse economic structures,” he says. “However, that is impractical as the world tried the gold standard before. Moreover, for one currency to succeed, the world would need to have effective policy coordination. It will be extremely difficult to co-ordinate economic policies in a group as diverse as the world is.”

035

THINK ROUNDTABLE

SINGLE MINDED THE GLOBAL ECONOMIC CRISIS HAS REOPENED THE DEBATE ON THE WORKABILITY OF A COMMON CURRENCY AMONG A GROUP OF NATIONS. WRITTEN BY DOROTHY WALDMAN

WHEN

the earliest explorers began to discover new peoples and products, and different ways of accomplishing trade, rudimentary barter transactions between individuals to exchange goods and services became outmoded. It meant that new ways of doing business had to be established to accommodate these new realities of expanded trade and commerce.

Almost from the very beginning, governments (whether headed by the chief of a nomadic tribe or elected president or prime minister of a world power) and economists (regardless of what they were called at the time) have focused their efforts on the goal of making trade transactions more efficient, resulting in the creation of money, stock exchanges and international arbitration. Fluctuations in values and exchange rates between the currencies of different nations has thus lead to a debate regarding the feasibility of the creation of a single, unified currency among various groupings of countries.

In the latter half of the 20th century, the possibility of creating a common, unified currency was contemplated by the European Union (EU), the members of the North American Free Trade Agreement (NAFTA) and the Gulf Cooperation Council (GCC). However, only the euro, which was introduced on New Year’s Day 1999, has become a reality.

The AMERO (the suggested NAFTA currency) has slipped into obscurity and the establishment of such a currency is still under consideration within the Gulf States, with the initial goal of 2010 inauguration date extended, perhaps to 2013 or beyond.

There are many advantages of having a unified currency according to Benita Ferrero-Waldner, former European Commissioner and member of the board of wind turbine manufacturer Gamesa in Spain, who is a passionate advocate of the common currency concept, even though she is well aware of the controversies surrounding it.

“First of all, within the different countries you have one currency. You have transparency, you don’t have any more different exchange rates, you don’t evaluate or devaluate with regards to another one. There are many, many benefits,” she says.

Among the recognised benefits are significant savings in the cost of transactions within the currency zone from not having to convert currencies. This can lead to the development of wider markets for goods and services; the increased ease in attracting investment and improving competitiveness on the world markets; improved opportunities for planning and strategy formulation; and, until recently, the anticipation that economies as part of a massive market would not fluctuate as dramatically as in the past from boom to bust, therefore adding stability.

“Different currencies add volatility to your investment outlook. You invest from your local currency into a different currency,” said Jens Yahya Zimmermann, managing partner of New Silk Route Growth Captial, at the Global Arab Business Meeting (GAB). By not having the risk of currency fluctuations, investment decisions are based on anticipated return, not exchange rates.

036

The major disadvantage is not economic, but rather political, because of the inevitable loss of sovereignty in controlling certain aspects of monetary and fiscal policy within a member country. The recent economic crisis, including Greece’s highly leveraged public debt estimated at 120 per cent of GDP, illustrates how the policies of one country within such an economic union can affect all the countries within the grouping, in spite of safeguards initially put into place. A public debt of this magnitude is in violation of the Maastricht Treaty of 1992, which limits the amount of debt a member country can incur to 60 per cent of GDP. The thesis of Nobel Prize-winning economist Robert Mundell, who is sometimes referred to as the conceptual father of the euro, states that in international finance, a government can have only two choices among three options: (1) stable exchange rates, (2) international capital mobility and (3) domestic economic policy autonomy (such as full employment, interest rate policies and counter-cyclical fiscal spending).

His vision requires sovereign states to give up domestic economic policy autonomy in exchange for the benefits of cross-border capital mobility and stable exchange rates. The political importance domestic economic policy plays within a country presents stumbling blocks for nations negotiating an agreement regarding the establishment of a common currency.

DISSENSION RESULTS when the goals of different countries come into conflict. For example, one country may use interest rates to fuel its expansion and this may cause inflation in another, or if one country accumulates large debt from domestic policies. To eliminate such problems, member countries must agree in advance to forego a certain amount of self-determination and sovereignty of internal fiscal policy for the greater good.

This presents the problem of the sovereignty of member nations. James Fierro, the founding partner of Venture Resources, an organisation involved in the identification, development and financing of emerging growth companies says: “The problem with money is the nature of it being sovereign. Because it is sovereign, it then requires you to use FX [foreign exchange] and to manage FX you have to manage volatility, and to manage volatility you have to use speculation. The single, number one underlying reason for the global economic crisis was not the bankers but the failing monetary system. This monetary system is not designed for global economies, it is designed for sovereign economies.”

Interestingly, he goes on to explain how this is bringing about a retro trend – the return to the barter system. “We found out that most of the biggest companies in the world are engaged in some form of nonmonetary trade. They don’t usually call it barter; they refer to it as offset trade, counter trade, reciprocal trade or industrial participation trade,” Fierro says.

“Why does GE sell a US$150 million power generating turbine to China and take payment in coal and frozen chicken? For me this is almost

“THE PROBLEM WITH MONEY IS THE NATURE OF IT BEING SOVEREIGN. BECAUSE IT IS SOVEREIGN, IT THEN REQUIRES YOU TO USE FX [FOREIGN EXCHANGE] AND TO MANAGE FX YOU HAVE TO MANAGE VOLATILITY, AND TO MANAGE VOLATILITY YOU HAVE TO USE SPECULATION. THE SINGLE, NUMBER ONE UNDERLYING REASON FOR THE GLOBAL ECONOMIC CRISIS WAS NOT THE BANKERS BUT THE FAILING MONETARY SYSTEM. THIS MONETARY SYSTEM IS NOT DESIGNED FOR GLOBAL ECONOMIES, IT IS DESIGNED FOR SOVEREIGN ECONOMIES.” X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

037

THINK ROUNDTABLE

EUROZONE COUNTRIES More than 320 million Europeans use the euro across 22 countries:

01

02

unbelievable. The reason they do it is money is simply not available. When you start digging deeper on why money is not available – it goes back to the design of the monetary system. Non-monetary trade is actually an extremely efficient transaction except that it has to be done in a bilateral trade – there is no paper work, no FX and no mismanagement.”

Is the concept of a common currency still relevant today, in light of current events? According to Ferrero-Waldner, it is. “I was fighting for the euro as State Secretary for Foreign Affairs in Austria. Indeed I think the unified currency is a very important step forward. As we have seen now in the crisis, there has to also be at least a coordination of economic policies. It’s very important,” she says.

Andorra* Austria Belgium Cyprus Finland France Germany Greece Ireland Italy Kosovo*

03

“Today we are living in a globalised world. And in a globalised world, one player cannot make up against the others. I am a defender of the bigger groups, although you forego sovereignty in some ways. I think for the benefit of higher importance, the benefit of your country, yes, I would go for it. I would do that as an analogy to what we have been doing in the EU. There was a moment of risk, but I think we have been going ahead with a better coordination of fiscal and economic policies.”

Whether a common currency is in the best interests of an individual country can only be determined by those involved, and their willingness to co-operate and co-ordinate common goals and policies for the united benefit. And this is as political as it is economic.

Luxembourg Malta Monaco* Montenegro* Netherlands Portugal San Marino* Slovakia Slovenia Spain Vatican City*

Estonia is expected to begin using the euro in 2011.

Q Lithuania and Latvia are expected to join the Eurozone in the next few years and begin using the euro.

Q European Union members not part of the Eurozone and who therefore who do not use the euro are the United Kingdom, Denmark and Sweden. *Non-EU members that officially use the euro as their currency.

Q

COMMON CURRENCY AND THE GCC IS A COMMON CURRENCY NECESSARY IN THE GCC AND WOULD IT BE BENEFICIAL TO THE REGION? THERE ARE MANY FACETS TO CONSIDER. A SINGLE currency within the GCC and the accompanying common economic policies could bolster foreign direct investment as well as trade agreements between member countries, paving the way for sustainable growth. A common currency may also be able to establish the GCC as a global force alongside the dollar and the euro, becoming an important element in the challenges of globalisation.

However, a single currency project also has political significance. “The formation of a GCC monetary union would create a political and institutional environment that would facilitate greater regional policy co-ordination,” points out Masood Ahmed, director of the Middle East and Central Asia department at the International Monetary Fund in Washington.

038

The practicality of a common currency is dependent on co-ordinated financial integration, banking regulations and payment and settlement systems; transparent and improved economic decision making; and the standardisation of economic statistics across the region. A regional monetary authority and monetary policy and procedures must be established.

At the Global Arab Business Meeting in Ras Al Khaimah, Mohammed Al- Barwani, chairman of MB Holding, Oman, commented: “I think yes it would be easier, but all GCC currencies are really dollar-based.

So although in different countries of the GCC, we have currencies with different names, forget about the names, underneath it is the US dollar. So in reality we almost have a common currency. “

Shahid Kazi, General Manager, ValuStrat Consulting, at the same meeting remarked, “Going now to our region, the Arab world, we have to question what is the basis of the issuance of our currencies. Let’s not talk politically, let’s just think logically… all the economies, all the financial experts and all the stakeholders in the system need to sit down and set what is the basis of our dirham, riyal or dinar.

“Yes there are some logistical constraints such as the current peg to the dollar, but these issues are resolvable if our intentions are right. This is my strong advice to the Arab world – to have an audited basis on how these currencies are issued.”

01 Benita Ferrero-Waldner 02 Robert Mundell 03 James Fiero

OPINION FUTURIST WRITTEN BY THEODORE J GORDON, THE WORLD FUTURE SOCIETY’S FUTURIST OF THE YEAR

THE MOST RECENT SOFI IS BASED ON A SCENARIO OF A SERIOUS CONTINUING RECESSION. ALTHOUGH PAST ANALYSES HAVE SHOWN A GENERALLY FAVOURABLE OUTLOOK, SOFI PROJECTS A DECLINING LEVEL FROM 2010 TO 2020 AS THE WORLD WORKS THROUGH ITS FINANCIAL DISARRAY.

THE STATE OF THE FUTURE INDEX LOOKS AT FACTORS THAT CAN ALTER THE FATE OF THE WORLD AND OFFERS SUGGESTIONS THAT MAY SECURE A BETTER TOMORROW.

MEASURING THE STATE OF THE FUTURE WILL the world of our children be better than our own?

We look around and see fewer wars but more terrorism; diminishing infant mortality but higher social costs as the elderly population expands. Some things are improving and others are worsening. So how can the question be answered responsibly?

Consider the stock market: some stocks are up, while others are down. The condition of the market as a whole would be hard to understand without composite indexes. On the social stage, United Nations Development Programme (UNDP) computes the Human Development Index (HDI) to compare social conditions among countries; the HDI is composed of measures of life expectancy, income and education.

All indexes have a dark side: they tend to wipe out differences among groups and hide variations in the components of the index that lead to overall ups and downs.

Also, almost all deal only with history and the present and do not forecast.

Ten years ago, the Millennium Project, an independent non-profit global participatory futures research think tank, constructed the first State of the Future Index (SOFI). In a unique global study, judgements of experts from around the world were used to choose the variables that such an index ought to include and the relative importance of each. The SOFI is based on forecasts of these variables. It answers the question: is the outlook for the future improving?

The SOFI calculation also considers the consequences of future events that could change the trends of each variable, for example how a large-scale accident at a nuclear power plant might later affect global fossil fuel consumption, or how the advent of a strong global protectionist movement among exporting nations might affect overall availability of food.

About 100 such developments have been considered and

while there is no way to compute most of the linkages, the judgements of experts are used to assess the probabilities of occurrence and timing of the consequences of these “gamechanging” developments.

Many variables appear likely to continue to improve despite the pressures of the recession.

Variables that seem likely to continue improving include: ■ Literacy rate ■ School enrollment ■ Countries having or thought to have plans for nuclear weapons ■ GDP per unit of energy use ■ Number of major armed conflicts ■ Population growth ■ Physicians ■ Internet users ■ Infant mortality ■ Life expectancy at birth ■ Women in parliaments However, there is a risk of reversal in some variables that had improved in the past.

Variables that had improved but may change direction include: ■ Population with access to improved water sources ■ Poverty: people earning under US$1.25 per day

■ ■ ■ ■ ■ ■

R&D expenditures Clean energy use Food availability Population in countries that are free GDP per capita Number of refugees

Some may change for the better.

Variables that were worsening but may improve include: ■ People voting in elections ■ Forest lands ■ Prevalence of HIV And some which worsened in the past two decades seem poised to continue to worsen.

Variables that have been worsening and may continue to worsen include: ■ Levels of corruption ■ CO2 emissions ■ Unemployment ■ People killed or injured in terrorist attacks ■ Global surface temperature anomalies ■ Total debt service

The most recent SOFI is based on a scenario of a serious continuing recession. Although past analyses have shown a generally favourable outlook, the recession SOFI projects a declining level from 2010 to 2020 as the world works through its financial disarray. Even so, considering future developments tends to brighten expectations, as shown by the curves in the figure below, with the upper curve rising at a rate approaching the 1990-2005 era.

Some of the Millennium Project’s work has illustrated how the SOFI might be used to help decision makers choose beneficial policies by demonstrating the effects of proposed policies on the Index. The SOFI approach provides a mechanism for studying the relationships among the items in a system – how making a single change ripples throughout a system, in other words, creating some positive and intended consequences as well as unintended results. Think tanks in several countries have constructed SOFIs for their own country, and one Gulf country has included the method in its national planning process to inform policy making and establish targets for their early warning system.

The SOFI and the global collection of expert opinion (used in the SOFI to obtain the judgements needed for its computation) are part of a larger movement in planning known as “collective intelligence”.

Collective intelligence systems seek synergies among data, information and human judgement, using software and hardware, which provides feedback to produce (nearly) justin-time knowledge for better decisions. The interaction and feedback among these elements allow each to benefit from the other.

A global climate change situation room has been built in Gimcheon, South Korea, focusing collective intelligence on climate change. Other applications – from nations to business – will benefit from this new way to synthesise information and judgement to help improve decision making at all levels.

Theodore J Gordon is the Senior Research Fellow of the Millennium Project which he co-founded. He was also the founder and President of the Futures Group and a founder of the Institute for the Future. He is the author of numerous books and papers dealing with futures research methodology; much of his work has been associated with the Delphi method, Real Time Delphi, Trend Impact and Cross Impact Analysis. He also was Chief Engineer for the upper stage of the Saturn V rocket used in the Apollo programme.

039

WHAT DO YOU THINK

WHAT DO YOU THINK? WHAT IS THE FUTURE OF CAPITALISM IN THE GLOBAL ECONOMY? GRADUATE AND POST-GRADUATE STUDENTS DISCUSS THE ISSUE AND PUT FORWARD THEIR IDEAS. WRITTEN BY JOANNE MOLINA

A SPECTRE

“

is haunting Europe – the spectre of Communism,” proclaimed Karl Marx and Friedrich Engels in The Communist Manifesto, published in 1848. Their query into how capitalism’s tenets impact labour, culture and society seems to have gone out of vogue with the fall of the Berlin Wall and the rise of a thriving capitalist economy in countries such as post-Communist Russia and China.

But today, as the political, cultural and social structures of nations attempt to accommodate the later stages of advanced capitalism, it may be prudent to ask if the questions posed by the spectre haunting Europe in the 19th century are still worth asking.

It is no coincidence that interdisciplinary critiques of capitalism, such as those in the novels of Charles Dickens, the writings of textile and furniture designer William Morris and even the contemporary controversial British graffiti artist Banksy, have appeared alongside the rise and dominance of this economic model.

Given the proliferation of capitalist models in both developed and developing nations, as well as contemporary concerns with the psychological, economic, environmental and social implications of its preeminence, we asked a group of graduate and postgraduate students what they believe the future of capitalism might be.

During a discussion at a Washington think tank some years ago, a participant half-jested that on the evening of November 9, 1989, American diplomats were sipping cocktails at a villa in Wannsee, the southern section of Berlin. Upon returning home, they were stunned to witness crowds pouring into the streets.

The scholar Ted Hopf has made the argument that the end of the Cold War was not predicted, in part, because the question was never asked in the first place. We are, alas, hapless; or are we?

History happens, with its announcement typically and indifferently eluding diplomats and scholars alike. Francis Fukyama’s famous declaration that history may have come to an end in 1989 should deliver the point home that the tempting practice of proclamations and predictions is unseemly in scholarship.

We cannot know, or predict, the future of capitalism in an era of globalisation. However, we can search our minds or look to scholars, whose reasoning powers may help us discern hints about its sustainability.

Two scholars – Albert O Hirschman and Karl Polanyi – come to mind in this regard. Both theorists describe a sort of built-in resilience that characterises modern-day economies.

For Hirschman, economic systems never draw from their full potential – it is this ‘slack’ in the system that is available and called upon when problems arise. For Polanyi, who coined the term, ‘double movement’, economic systems undergoing rapid transformations and growth are typically characterised by lags in terms of addressing the social fallout.

040

When that happens, energy is mustered to address the latter.

When markets fail to deliver the outcome that societies value, we legislate, or we revolt; if we don’t move, we sink, and usually not all in equal parts.

Markets – and other putative sociological constraints – provide the conduit through which to organise economies; individuals edit them.

The current staying power of capitalism resides in the latter. Globalisation, however defined, may produce political-economic outcomes that will affect different sociological groups unequally, or even inefficiently. Whether capitalism survives a rapidly transforming global economy could hinge on the ideological latitude accorded to individuals to muster the responsiveness necessary to address crises when they emerge. We can’t predict the results.

It bears remembering that there is not one form of capitalism, or two – there are many. It’s something to celebrate.”

Heidi Hiebert, international studies, American University Heidi Hiebert earned her MA in international economics from the Graduate Institute of International Studies in Geneva, Switzerland. Hiebert has worked for the World Economic Forum in Geneva and Decision Resources, a former affiliate of Arthur D Little Inc in Boston, Massachusetts and Berlin, Germany.

Both Karl Marx and Joseph Schumpeter, polar opposites with regard to capitalism, agreed on one point: whether one called it ‘creative destruction’ (Schumpeter) or ‘order in disorder’ (Marx), capitalism progressed on the basis of a fundamental principle of disruption.

For decades, the common view found itself rewarded by the idea that this disruption would provide a relatively constant rising tide, and we in our boats, both small and large, could comfortably set sail on the waves of the various market indices. What changed all of that, as we all know, was the sort of disruption that causes people to re-evaluate the safety of their ideas, leading to a new disruption where the forces of regulation are in a pitched battle with the previous forces of deregulation.

So what does this bode for the future of a once again questionable capitalism? Certainly not the post-capitalism of a vague Communist freedom, for one aspect that is only recently coming into view for thinkers of the market is just what a participant in capitalism is – the rational actor who plays a utilitarian game, or the irrational consumer who thinks only of what can be gained now without regard to the consequences of the future?

As things stand, the latter defines the market and its members, and no higher principle guides their relations. Until one does, the market will be guided by the principle of disruption, and the seesaw of productivity and disaster will mirror this.”

WC Swedlow, philosophy, DePaul University WC Swedlow received his Bachelor’s degree from the University of California, Santa Cruz, and recently received his PhD in philosophy from DePaul University.

His book, Against the Personification of Democracy: A Lacanian Critique of Political Subjectivity, was published by Continuum in 2009.

WHEN MARKETS FAIL TO DELIVER THE OUTCOME THAT SOCIETIES VALUE, WE LEGISLATE, OR WE REVOLT; IF WE DON’T MOVE, WE SINK, AND USUALLY NOT ALL IN EQUAL PARTS. MARKETS – AND OTHER PUTATIVE SOCIOLOGICAL CONSTRAINTS – PROVIDE THE CONDUIT THROUGH WHICH TO ORGANISE ECONOMIES; INDIVIDUALS EDIT THEM.

X

X

X

X

X

X

X

X

X

X

X

X

WHAT DO YOU THINK The emergence of the capitalist system has revolutionised the Of course, we need to bear in mind the enormous intellectual work that ways people live, it has redefined their wants and needs and has will be required to demonstrate the possibility and viability of such an radicalised the ways markets operate. Since the first industrial revolution, idea. But I believe that such a process would encourage us to think about the successive ‘technological innovation surges’ the extent and limits of our moral and political that followed contributed in bringing an communities, and, ultimately, what distinguishes unprecedented standard of living and in forming us from others at the international level, which I today’s civilisation. think will be crucial in discovering alternatives to However, the shortfalls of capitalism of the current capitalist system.” turbulence and self-destruction were predicted David Schwartzman, neuroscience, by early economists such as Smith, Marx, and Oxford University Schumpeter. Today, such shortfalls are evident, David Schwartzman recently completed his PhD in for example, in the widened gap between the cognitive neuroscience at Oxford Brookes University in rich and the poor, the credit crunch causing the the UK, where he also received an MA in science. recent economic meltdown and the deteriorating environment.

The advent of the internet, impressive The future of capitalism should pursue technological innovations, vast Sustainable Development as a guiding vision to improvements to communications and balance the social, environmental and economic transportation infrastructures and the reduction dimensions. Especially as the fight against of trade barriers are all contributing factors to a climate change gains momentum and enforces smaller, flatter world. Every day the human race a direction away from fossil fuels and towards is becoming increasingly exposed and accessible OIL-BASED COUNTRIES, cleaner and greener energy. Oil-based countries, SUCH AS SAUDI ARABIA, to its varied constituent cultures. Capitalism has such as Saudi Arabia, have an opportunity to HAVE AN OPPORTUNITY done wonders in making this happen – it has continue to lead the world energy markets by improved both the standard and quality of living TO CONTINUE TO LEAD pursuing such a transition. for many nations.

THE WORLD ENERGY Whether it is Social Capitalism or Natural The story is not all rosy, though. Among other MARKETS BY PURSUING Capitalism, the kind of capitalism that must things, critics have accused capitalism of widening SUCH A TRANSITION. be sought after in the future is the kind which the rich-poor gap. The financial crisis has shed NOURA MANSOURI concerns the less developed world and provides much light on the capacity of unregulated human a platform where developed nations could assist in alleviating poverty, greed and its destructive consequences. Hence, along with the benefits eradicating illiteracy, and developing economies. The kind that Amartya of globalisation, there are broader and deeper systemic risks that all Sen teaches on the liberty that people should have ‘to live the kind of governments involved in the free market world should proactively life they have reason to value,’ and the one which Mohammad Yunus address.

Moving forward, I see it as necessary to allow the resilient redefines into a ‘New Kind of Capitalism’ that cares for society’s most entrepreneurial human spirit to flourish but under a moderate degree of pressing needs. government/third-party regulation to contain this growing systemic risk.

Noura Mansouri, doctoral student, Queen Mary University of London The combination would allow capitalism to evolve in a manner that is Noura Mansouri is a Saudi doctoral student in managing energy technology more beneficial (than detrimental) to humanity. innovation and policy for sustainable development at Queen Mary University Think of a firm as a powerful member of society. Taking into account of London in the UK, where she has also completed her MBA in Technology Churchill’s observation that ‘the price of greatness is responsibility’, a Exploitation and Management. She has received her BSc in Management corporation should act like a responsible member of society – one that Information System at Dar Al Hekma College in Jeddah, Saudi Arabia, where gives back as much as it derives from its environment. I believe that she has also received Diplomatic Training in collaboration with The Fletcher for capitalism to succeed the symmetry principle will be much more School, Tufts University, USA. prominent in shaping our future and sustainability will be its main driver.

As we look on with hope that the current financial train wreck A case in point is Saudi Arabia with its God-given oil reserves. It has the is coming to an end, voices are being raised which demand huge potential to take global environmental sustainability to a whole new level. increases in the regulation and curbing of capitalist excess. Capitalism, like Almost a decade ago, Bill Clinton publicly stated that the Kingdom any system, has remained largely untested, the test has recently come in the should not simply aim to be the oil capital of the world but the energy form of the global economic crisis and capitalism has categorically failed. capital of the world. Through conscientious capital allocation, it has the Karl Marx predicted that capitalism would ultimately suffer from a capacity to utilise its oil revenues to transform the currently decentralised cycle of worsening crises, each crisis serving a temporary rejuvenating renewable energy field into a brand new globally centralised industry – function but bringing closer the day when the system will no longer one that would defy the myth of there being mutual exclusivity between be able to manage its internal contradictions. I believe that the era of enormous wealth and environmental sustainability. financial liberalisation is coming to an end. Yet, unlike in the 1930s, no Jamil Fahmy, MBA candidate, The George Washington University credible alternative to this system exists on the horizon.

Jamil Fahmy is a 2012 MBA candidate at the George Washington University So where do we go from here? Perhaps one way to address the structural School of Business with a vested interest in international finance and challenges the world is encountering in the fields of international finance, sustainability. He is from Jeddah, Saudi Arabia. He has been working on the economics, development, and the environment is to explore the feasibility structured derivatives desk of a prominent regional commercial bank based in of public policy at the global level?

Saudi Arabia.

042

LEADERS

S au d i A r a b i a o %FDFNCFS t 3BEJTTPO #MV )PUFMT 3FTPSUT 3JZBEI ,JOHEPN PG 4BVEJ "SBCJB

‘‘

‘‘

Very valuable event for Executives

4 Interactive WorksIop

s

aste n rclass witI Dr. Kapla

5 Great Reasons To "tte

nd

Rida Kaj, CEO, 4VOCVMBI (SPVQ, KSA

Fe atu

1

CLe ve l

red M

/FYU (FOFSBUJPO 1FSGPSNBODF 4UBSUT )FSF Dr. Robert Kaplan – LIVE and IN PERSON

Exc lusi v

1

e Dinn

lan p a K . r e r w it I D

VISIT www.iirme.com/bscsaudi for more information Headline Sponsor

Co-Sponsors

Supporting Sponsor

Sponsors

Associate Partner

Associate Partner

In association with

In association with

Exhibitor

Media Partners

Event Partner

ES Consulting

Organised By

CEO INDUSTRY

044

INTERVIEW

KLAUS KLEINFELD, CEO OF ALCOA, THE WORLD’S THIRD LARGEST PRODUCER OF ALUMINUM, PUTS A LOT OF STOCK IN AIDING THE COMMUNITIES HIS MULTINATIONAL COMPANY HAS OPERATIONS IN – AND IS PROUD THAT HIS WORKFORCE FEELS THE SAME WAY. WRITTEN BY JOANNE MOLINA

PUTTING PEOPLE FIRST “

WE

have an obligation to win the license to operate in the communities where we do business,” declares Klaus Kleinfeld, CEO of New York-based Alcoa, the world’s leading producer of primary aluminum, fabricated aluminum and alumina.

Employing around 59,000 people in 31 countries across the world, it has been named the most admired metal company for 27 consecutive years by Fortune magazine, whose “admired” ranking is the authoritative index of corporate reputation in the United States. Kleinfeld’s nuanced philosophy of leadership and management bring keen insight into the needs of the international marketplace, securing Alcoa’s future success.

“The role and task of the CEO will probably always remain the same and that is to lead people,” he says. Kleinfeld acknowledges the importance of not only hiring the best employees but also making sure that everyone is aligned and can work together as a team. “Nobody is perfect but a team can be,” he reflects. “Motivating a team is about showing people that they can achieve what they believed to be impossible.”

His belief in the power of harnessing the talent of individual players to forge a dynamic team has created a progressive atmosphere that extends to every facet of the company’s global presence. Alcoa has produced solutions to environmental issues, and helped create and sustain important social and quality of life-based projects in each community in which they do business.

One of Alcoa’s premiere forward-looking projects has been its 045

INTERVIEW

01

collaboration with Ma’aden, the Saudi Arabian Mining Company, to develop a fully integrated, world-class aluminum industry in the Kingdom.

“I am fortunate to have been able to work with His Royal Highness Prince Faisal bin Turki Al Saud and SAGIA. They have been uncompromising in their support and determination to make the Ma’aden Alcoa aluminium joint venture a success,” Kleinfeld says.

Established as a Saudi Arabian joint stock company in March 1997, Ma’aden facilitates the development of Saudi Arabia’s non-petroleum mineral resources and diversifies the Kingdom’s economy away from petroleum and petrochemical sectors. In July 2008, Ma’aden offered 50 per cent of the company’s shares for subscription in a successful $2.46 billion initial public offering (IPO).

Located at the port city of Ras az Zawr, the location for Ma’aden’s minerals industry complex, a 77km/sq site, 90km north of Al Jubail on the Arabian Gulf coast, will become the world’s largest fully integrated aluminum complex. In addition to housing the alumina refinery, 046

aluminum smelter and rolling mill for the Ma’aden Alcoa joint venture aluminium industry, it is also the site for Ma’aden Phosphate Company’s integrated chemical and fertiliser facility, which is due to begin operation in 2010.

At the ground breaking ceremony in June, Abdullah Busfar, Ma’aden’s Vice-President (Aluminium, Strategic Business Unit) and Project Management said: “The team has worked very hard over a long period of time to bring the project this far, and it is from today that we actually begin to see it on the ground in Ras az Zawr. It is a landmark day not only for Ma’aden and Alcoa but also for the aluminium industry in the Gulf and for the diversification of Saudi industry.”

Capital investment will be approximately $1.8 billion, subject to the completion of detailed feasibility studies and environmental impact assessments. Ma’aden will own 60 per cent of the joint venture; Alcoa will control the remaining 40 per cent o through an investment partnership in which it will own 20 per cent, and its partners will participate through

01 Barra Grande hydropower plant in Brazil

01

02

financing that represents the other 20 percent. Alcoa and each of the partners will invest $900 million over a four-year period and will be responsible for its pro rata share of the project financing, in addition to specific completion commitments.

Alcoa will provide its extensive industry knowledge, management expertise and support during the design, construction and operation of the mine, refinery, smelter and rolling mill. It will also arrange the supply of alumina feedstock to the smelter from outside the Kingdom until the project refinery comes on stream. Alcoa and Ma’aden will work with leading international and local firms on the design and construction of the complex, including Wagstaff, which will supply the joint venture’s vertical direct chill casting complex with t-ingot, rolling ingot and extrusion billet casting equipment. The contract includes capital equipment and technology to produce aluminum rolling ingot and extrusion billet at the casting complex, currently under construction and scheduled to start production in 2013.

01 Reforestation, Western Australia 02 Alcoa’s sustainable development, Huntley Australia

INITIALLY, the joint venture will develop a fully integrated industrial complex, including a bauxite mine with an initial capacity of 4,000,000 metric tonnes per year (mtpy), an alumina refinery with an initial capacity of 1.8 million mtpy, an aluminum smelter with an initial capacity of ingot, slab and billet of 740,000 mtpy, and a rolling mill with initial hot-mill capacity of between 250,000 and 460,000 mtpy. The mill will focus initially on the production of sheet, end and tab stock for the manufacture of aluminum cans, and potentially other products to serve

the construction industry. “It will be one of the most technically advanced mills in the world,” Kleinfeld says.

The natural, environmentally friendly quality of aluminum has also allowed the company to rapidly diversify its products and services while maintaining its position as an environmental leader. “We are blessed because aluminum is a miracle metal,” Kleinfeld says.

Approximately 75 per cent of all of the aluminum ever produced since 1888 is still in active use today. For the ninth consecutive year, Alcoa (NYSE:AA) has been selected as a component of the Dow Jones Sustainability Indexes (DJSI). Alcoa was named to both the World and the North American Indexes. The Dow Jones Sustainability World Index (DJSI World) comprises the leading companies in terms of sustainability around the world, and captures the top 10 per cent based on long-term economic, environmental and social criteria out of the biggest 2,500 companies worldwide. The Dow Jones Sustainability North America Index (DJSI North America) captures the leading 20 per cent in terms of sustainability out of the largest 600 North American companies.

According to the company’s 2009 sustainability report, Alcoa’s advances included performing life cycle assessments of aluminum-containing products, including computer laptops, automotive space frames, truck/ trailers, city buses, and aluminum bottles; conducting third-party, peer-reviewed life cycle assessments of aluminum beverage containers and automotive parts in association with the European Aluminium Association, U.S. Aluminum Association and International Aluminium Institute; continuing reductions in absolute greenhouse gas emissions 047

INTERVIEW

02

01

in 2009 that resulted in a 44 per cent reduction from 1990 levels; and processing improvements in their Global Primary Products group, which reduced direct greenhouse gas emissions by more than one million tonnes over 2008.

Alcoa is also the first aluminum company to receive a Cradle to Cradle certification from MBDC (McDonough Braungart Design Chemistry), a global sustainability consulting and product certification firm, when it was awarded silver certification for its primary aluminum. Cradle to Cradle certification is an independent environmental certification process for materials and products that assesses the total impact of a product on human health and the environment.

“Cradle to Cradle certification is landmark recognition of the uniquely sustainable characteristics of Alcoa aluminum,” says Kevin Anton, chief sustainability officer for Alcoa. “Through this certification, Alcoa can assure its customers the company is continuing to improve the sustainability of our metal from initial production through use and then recycling.”

Kleinfeld lauds Alcoa’s efforts surrounding the development of their mine in the Juriti region of Brazil, a project striving to meet and exceed standards that will allow both the environment and the community in the area to thrive. In partnership with the municipal administration of Juruti and in agreement with the community, Alcoa launched the positive agenda.

With investments of $50 million the package of actions includes rural and urban infrastructure, health, education, culture, the environment, public security and social assistance. These are voluntary actions on the part of the company that have been agreed to directly by the community following public hearings that resulted in the licence being granted for setting up the Juruti mine.

One of the greatest results of these initiatives has been creating a foundation for agency on behalf of the Juriti community. Its efforts have been so extensive that Conservation International, a leading sustainability 048

03

NGO, said: “Alcoa is raising the bar quite high and is creating hopefully a new model of how mining projects can be established in Amazonia without creating new waves of deforestation in the region.”

In the form of $18 million in investments, which Alcoa has committed to as its operating licence, the company will help provide much needed infrastructure to the Juruti region. In addition, Alcoa will invest an additional $30m in voluntary investments covering projects that include the creation of a new regional hospital in Juruti as well as the expansion of a preexisting hospital (prior to this, many people in Juruti had to travel by boat for 12 hours to get medical attention).

In addition, the investments will foster the creation of two new technical schools to teach residents skills to improve their career opportunities for generations to come, and the creation of three deep-water wells for fresh water needs. These wells provide cleaner water to the city residents and will likely improve overall health conditions in the city.

Kleinfeld’s commitment to humanitarian goals is also personal and he is proud that his employees feel the same way. In April 2010, he received the 2010 Ripples of Hope Award from City Year New York for his personal commitment. “This award from City Year belongs to all of the Alcoa employees who volunteer alongside City Year Corps members at PS 48 and at The Point Community Center in the South Bronx,” said Kleinfeld, humbly acknowledging his team.

Approximately 90 per cent of Alcoa’s worldwide operating locations now have community programmes, and Alcoa and Alcoa Foundation invested more than $34 million in the communities in which the company operates worldwide.

“Volunteering is a necessary part of creating a vibrant and dynamic corporate environment,” Kleinfeld says. “You see the many dimensions of the people you work with and uncover aspects you hadn’t previously been able to see. Ultimately, its a vital bonding experience for personal and collective growth.”

01 Can reclamation, Tennessee USA 02 Fabricated aluminum products, Samara Russia 03 Bauxite processing Juruti mine, Brazil

HEALTH

THE FIGHT AGAINST BREAST CANCER ACROSS THE WORLD, CASES OF BREAST CANCER ARE INCREASING AS MORE WOMEN ARE DIAGNOSED, BUT A RANGE OF INNOVATIVE PROGRAMMES ARE SHOWING THAT A POSITIVE PROGNOSIS IS STILL POSSIBLE. WRITTEN BY DOROTHY WALDMAN

IN 2010,

over one million women will be diagnosed with breast cancer and about half a million will die from the disease. Once considered an affliction most likely to strike affluent white women in industrialised areas of North America and Western Europe, breast cancer is on the rise throughout the world, representing one in 10 of all new cancers diagnosed and almost one in four cancers in women worldwide.

Today, nearly four million women are living with breast cancer and many of these live in highly developed countries. However, by 2020, the World Health Organisation anticipates a 50 per cent increase in cancer and 70 per cent of all new breast cancer cases worldwide will be in developing countries.

In countries with access to state-of-the-art diagnosis, survival rates are beyond 80 per cent and closer to 90 per cent in some areas. In the United States, where one out of eight women will be diagnosed with breast cancer during her lifetime, an estimated US$68.1 billion is spent each year to diagnose and treat the disease.

The situation is different in much of the rest of the world. The number of patients diagnosed with curable breast cancer drops to about 50 per 050

cent in areas where adequate services are not available – in high income countries fatality rates are less than half that.

In emerging economies, breast cancer is a relatively new concern for both women and medical professionals. Currently, the average woman diagnosed in Kenya can only wait for her death; in South Africa only five per cent of cancers are caught in the early stages when they are most curable; and Pune in India has only one comprehensive breast cancer facility for the 3.5 million women it is supposed to serve, resulting in half of all the women going entirely without treatment.

Mammography machines, the single most important tool in early detection, are available in the Ukraine, but a shortage of film requires that doctors choose between taking the recommended two-view image of a patient’s breasts and taking a one-view image of twice as many women.

In Venezuela, some hospitals have the equipment for large biopsies, a sophisticated procedure for early detection, but the cost of actually using it presents a prohibitive challenge, with one hospital reporting that the procedure has not been preformed in three years. Unsurprisingly, more than 70 per cent of all cancer deaths occur in countries where resources for diagnoses and treatment are limited or non-existent.

COST OF NEW CASES OF BREAST CANCER BY COUNTRY Total Cost (US$)

Australia Bangladesh China France Germany Guatemala India Netherlands Saudi Arabia United States UAE

377,837,261 3,422,972 176,821,281 1,535,292,360 2,089,246,140 2,421,188 48,796,462 404,546,601 16,924,099 16,097,364,800 4,735,500

NOT JUST A FEMALE PROBLEM Often wrongly considered a disease that just afflicts older women, breast cancer does not discriminate according to gender or age.

Although it is about 100 times less common among men than women and its incidence in relation to the population has remained stable in the past 30 years, approximately 2,000 men will be diagnosed with breast cancer this year in the United States alone, about one per cent of total cases, and close to 400 men will die from it.

The prognosis for men has generally been considered worse than that for women, but that is largely due to the fact men tend to get a diagnosis at a later stage as they often do not believe they can get it.

“Actually [breast cancer] is easier to find in men,” says Dr Stanley Waintraub, of the John Theurer Cancer Center in New Jersey.

“Men may ignore symptoms such as lumps, pain in the breast or discharge from the nipples.”

Recent research published online in the Journal of Medical Genetics has revealed that men, like women, who carry the BRCA2 genetic mutation, have a higher risk of contracting the disease – 7.1 per cent by the age of 70 and 8.6 per cent by the age of 80 – so these men should be particularly vigilant about early detection.

Richard Roundtree, known for his role as a maverick, macho private investigator in the film Shaft, thought doctors were questioning his masculinity when he was diagnosed in 1993. “Every opportunity I get,” he says, “I am very vocal about the fact that breast cancer is not gender specific.”

Former Kiss drummer Peter Criss, known as Catman, was treated for the disease in 2008 and has some sage advice for men who discover a lump in their breast. “Don’t sit around playing Mr. Tough Guy. Don’t say: ‘It’s going to go away.’ It might not and you might not see life anymore and how beautiful it is,” he says.

This is a message that the John W Nick Foundation, which provides support and information on male breast cancer, hopes men take heed of.

051

HEALTH NO AGE LIMIT Contrary to popular thought, it is not just older women who need to worry about older cancer, young girls are at risk, too.

A four-year-old girl, probably the youngest case of secretory carcinoma of the breast and one of only a few children around the world to suffer from a malignant breast tumour prior to puberty, was the youngest breast cancer survivor to participate in Toronto’s Weekend to End Women’s Cancers in Cambridge, Ontario in September. Last year, a 10-year-old girl in California was also diagnosed with breast cancer. Both of these brave youngsters underwent mastectomies.

Thankfully such cases is extremely rare and the disease is treatable.

Less rare is breast cancer in young women. In the 15 to 39-year-old age group, breast cancer accounts for about 25 per cent of all cancers in females, which rises to 39 per cent in the 35 to 39-year-old age group. One in 20 women with breast cancer are diagnosed before the age of 40.

Typically, early detection is less likely in younger women and their cancers are more aggressive than those found in older women, resulting in lower survival rates.

Although the costs in terms of human suffering are incalculable, measurable costs for medical expenses including hospital stays, surgery, chemotherapy and radiation, associated non-medical expenses such as travel expenses for treatment, specialized equipment and home services, and loss of productivity are soaring as the number of cases diagnosed escalates.

A report by the American Cancer Society found that cancer cost the world US$896 billion in 2008, about 1.5 per cent of the world’s entire gross domestic product. New breast cancer cases alone account for US$28 billion in 2009, US$13 billion in medical costs, US$8 billion in non-medical costs and productivity losses of around US$700 million.

The best possible way to deal with the costs of cancer “is not to have it in the first place”, says Dr Robert C Young, former president of the American Cancer Society. “So the focus on prevention makes great sense.” In 2009, global investment in cancer research was around US$19 billion. Organisations such as the Susan B Komen Foundation, which funds breast cancer research, and the Zahra Breast Cancer Association bring awareness to combat breast cancer through education and support.

Although a genetic predisposition to breast cancer is evident, research indicates that as many as half of all breast cancers occur in women who have no known specific risk factors, indicating that other factors must be involved. Other than gender, age (81 per cent of cases occur in women aged 50 and over, with nearly half of all cases diagnosed in the 50-69 age group.), lack of or delayed childbearing and higher hormone levels appear to correlate to incidence.

A 2009 World Cancer Research Fund report estimated that 38 per cent of breast cancer cases in the US, 42 per cent in the UK, 28 per cent in 052

01

Brazil and 20 per cent in China could be preventable through lifestyle changes such as a reduction in alcohol intake, an increase in physical activity and maintaining a healthy weight.

Interestingly, research by Cancer Research UK indicates that women who migrate from low to high-risk countries typically also experience increases in occurrence, suggesting a strong effect for lifestyle or environmental factors. The roll of oestrogen in breast cancer has raised the possibility that certain environmental contaminants, including PCBs and pesticides such as DDT, that mimic the female hormone, may well be involved. Cases of breast cancer amongst the residents of Seveso in Italy who were exposed to a 1976 industrial accident and people living in Chapaevsk in Russia, who suffered contamination from a nearby chemical plant also suggest a link between breast cancer and dioxins.

However, until breast cancer is eliminated as a threat, early detection is the best way to control costs with the best possible outcomes. A report by the US Preventive Services Task Force announced a decline in cancer death rates in the US by almost two per cent a year between 2001 and 2006, which some consider the positive result of early detection as well as other factors. Interestingly, when the UK introduced its national screening programme in 1988, there was a marked increase in the incidence of breast cancer as previously undiagnosed cases were detected.

Although there is a tremendous need to detect and treat breast cancer at the earliest stage, these needs have to be balanced by the ability to provide these costly technologies and services, requiring innovative problem solving. As imaging and other diagnostic tools are made available in underserved areas and as the world’s population ages, a backlog of undetected cancers may be revealed.

GLOBAL INVESTMENT IN CANCER RESEARCH, 2009

19,238 4,244 GOVERNMENT

6,461 1,360 CHARITABLE

625 1,205 HEALTHCARE & UNIVERSITY SYSTEMS

149 1,870 3,322 0

5,000 TOTAL US

10,000

15,000

20,000

PHARMA INDUSTRY (TOP 24 COMPANIES) EU REST OF WORLD

Funding (US$m)

IN THE PINK

02

03

01 Acuson X300 ultrasound, Siemens 02 Dr. Modi Batterjee, campaign spokesperson and founding member of Al Bidayah Center 02 New technologies from Siemens help in the early detection of breast cancer

Meanwhile, innovative schemes are necessary to increase both awareness and positive outcomes. One such scheme is currently being planned by the Africa Oxford Cancer Foundation to distribute Tamoxifen to selected women who discovered lumps at breast-examination clinics held in village churches as a precautionary measure, in anticipation of stabilising or reducing the tumour burden in up to 50 per cent of the patients, greatly reducing the overall costs of treating the disease.

In spite of the huge variations in detection and treatment, there is still room for optimism. The increasing visibility of breast cancer due to education and fund-raising initiatives has helped remove the stigma and resulting isolation from the disease while enabling research that is developing cures and discovering causes and means of prevention.

In a perfect world, there would be a cure, but until that time comes, there is still much each of us can do to increase the odds for survival.

A record-breaking attempt at forming the largest female human chain marked Saudi Arabias Zahra Breast Cancer Associations contribution to the Kingdoms breast cancer awareness campaign in October 2010.

At the time of going to press, thousands had registered and the Zahra Breast Cancer Association was on track to making history.

The attendance of representatives from the Guinness World Book of Records was confirmed, in witnessing and verifying the formation of the worlds largest female human pink ribbon chain.

Awareness is the first step in curing breast cancer, a disease which is the leading cause of cancer deaths amongst women in Saudi Arabia.

According to the latest Saudi Cancer Registry report, more than 10,000 cases of cancer were treated here in one year alone, with breast cancer accounting for 24 percent of treated cancer cases.

Breast cancer is a huge challenge for women in Saudi Arabia - awareness and education about this disease is a key element in curbing this challenge, said HRH Reema bin Bandar bin Sultan, who heads up the important initiative. I am convinced we can help reduce the spread of breast cancer in Saudi Arabia with early detection and strong awareness campaigns.

HRH Reema explained the idea for the record attempt, which is part of their campaign, A Womans Stand, is all about creating a unified stand against breast cancer. I have had family members and friends diagnosed with breast cancer, and this strengthened my determination to become an agent of change and break this vicious cycle, she said, adding that she first learned of the formation of the Zahra Breast Cancer Association, the sponsor of this event, on the same evening as a close friends breast cancer diagnosis.

Dr Modia Batterjee, spokesperson for the campaign, said that although breaking the world record would be an important feat, the awareness it has already built is key: The most important result is educating people and helping to decrease the occurrences of breast cancer in the Kingdom.

The female chain will be a symbol of womens strength, commitment and support for one another. By attempting to break the world record for the largest human awareness ribbon, we wanted to gain huge public exposure and show people that when you stand together, great things can happen, she said.

HRH Reema added: When people find out what we are doing and why, they automatically ask us: How can we help? What can we do?

The support from the Saudi community has been great and we really foresee the event as being a great success.

In addition to this highly visible event, the Zahra Breast Cancer Association also organises numerous functions to educate and create awareness about this disease, including educational lectures, workshops and printed materials for women, along with scientific training programmes for doctors and other health professionals.

There are a number of other schemes in the Kingdom also seeking to raise awareness of breast cancer. These include an official breast cancer awareness website, an early detection program and the Zahra Touch boutique, which provides patients with prostheses, wigs and other specialised items.

053

GETTY/GALLO IMAGES

THE BIGGER PICTURE MULTINATIONAL BUSINESSES ARE, OF COURSE, ALWAYS LOOKING TO TURN A PROFIT, BUT A GROWING UNDERSTANDING OF ENVIRONMENTALLY SOUND PRACTICES BY SOME COMPANIES IS HELPING TO PUSH THEIR INDUSTRIES IN A MORE SUSTAINABLE AND SOCIALLY RESPONSIBLE DIRECTION. WRITTEN BY JOANNE MOLINA

054

CORPORATE RESPONSIBILITY

LIVING

01 Daniel Kammen, Professor in the Energy and Resources Group 02 Philips Master LED Green Products

GETTY/GALLO IMAGES

“REAL PROGRESS CAN ONLY BE MADE IF ALL STAKEHOLDERS TAKE UP THEIR RESPONSIBILITY.”

02

in a healthy, sustainable environment should not be a luxury. As the queries and analyses of the BP disaster in the Gulf of Mexico continue, the global community has a renewed interest in questioning where a business’s responsibilities lie in relation to complex and interconnecting environment concerns.

The link between curbing factory emissions, utilising alternative energy sources, mandating recyclable materials and maintaining stringent policies against deforestation and the productive use of agricultural resources are inexorably bound to addressing world hunger, poverty, health and economic stability and growth. Given the elaborate structure of investment, as well as a legal and financial commitment to their stockholders, businesses must make difficult decisions to maintain a positive balance sheet and address increasing ecological concerns.

Public outcry and the actions of international institutions that monitor the flow and distribution of global capital and investment, such as the World Bank, are necessitating the creation of new methods to ensure both corporate and environmental stability.

In September, the World Bank announced the appointment of professor of energy Daniel M Kammen of the University of California, Berkeley, as the organisation’s Chief Technical Specialist for Renewable Energy and Energy Efficiency. This new position was created to provide strategic leadership on policy, technical and operational fronts in order to enhance the impact of the Bank’s renewable energy and energy efficiency activities, as well as to expand its role as an enabler of related global dialogue.

However, some of the world’s top global corporations are also leading the field with conscious and determined efforts to adopt technological and industrial standards and practices that accommodate or even exceed the bars set by third-party environmental analysts.

ENERGY “One of the biggest challenges for our society and, thus, for our industry, is to improve the quality of people’s lives – particularly in new and emerging markets – while managing the resulting ecological footprint,” says Henk de Bruin, head of the corporate sustainability office for Philips.

The Netherlands-based Philips is a diversified health and well-being company, a world leader in healthcare, lifestyle and lighting.

De Bruin cites the United Nations’ Millennium Development Goals as being a crucial guidepost for the company’s environmental advances. “With only five years left until the 2015 deadline to achieve the Millennium Development Goals, Philips strongly supports this call to action. We believe that affordable, accessible and accountable healthcare solutions with a light ecological footprint are essential contributions to reaching these UN goals,” he says. This “light ecological footprint” is another industry challenge requiring constant improvement, and energy and materials are key elements in this process.

Philips’ philosophy of environmental responsibility has evolved over the past few decades and broadened its scope, beginning with energy, waste, water and emission management in manufacturing, followed by green product development, supply chain management and collection and recycling. Provided this is properly and consistently managed by dealing with reputational risks and business opportunities in a balanced way, there is no principal conflict attending environmental needs and the needs of a business. By embedding environmental and social challenges

01

in its strategy, a company can even become an engine of growth. There is evidence of this with the Philips Green products proposition, currently contributing to more than 30 per cent of Philips’ sales.

To further address these challenges and the timely guidelines of the UN, Philips launched its EcoVision5 programme, with the following three main targets for 2015: first, to bring care to 500 million people; second, to improve the energy efficiency of their overall portfolio by 50 per cent; and third, to double the amount of recycled materials in its products, as well as doubling the collection and recycling of Philips products.

De Bruin also explains the recent re-evaluation of how companies are choosing to tackle environmental issues. “The challenges for combating environmental concerns in general over the last decades – not specific to our industry or to Philips – were related to the erroneous perception that focusing on finding environmental solutions costs money, at the detriment of economic benefits,” he says.

In the marketplace, being publicly amenable to these concerns was generally frowned upon because it was perceived as catering to needs other than business. “Businesses that paid attention to the impact of their activities on the environment and on society were pegged as ‘soft’.

Fortunately, this perception issue is shifting. Focusing on environmental and social issues, or what we simply call sustainability, now is becoming a mainstream business consideration and an expectation from customers and stakeholders,” de Bruin says.

However, according to de Bruin, responsibility for the environment lies not just with international agencies or corporate initiatives. “Real progress can only be made if all stakeholders take up their responsibility,” he suggests.

This includes a combination of responsible agents: business, nongovernment organisations and consumers. “Governments can facilitate a level playing field for business and citizens. Non-governmental organisations can influence governments, business and the public at large.

Customers can take these various forms of information into account in their purchasing behaviour and business can provide solutions for their needs – closely following trends and carrying out market research by taking environmental aspects into account,” de Bruin says.

055

“THE MORE INTENSIFIED DAIRYING BECOMES, THE MORE CARE WE NEED TO TAKE TO MITIGATE THE RISK OF ENVIRONMENTAL IMPACTS. NEW ZEALANDERS ARE VERY ENVIRONMENTALLY AWARE AND WHILE THEY ARE VERY CONSCIOUS OF FONTERRA’S MAJOR ROLE IN THE ECONOMY, THEY ARE NOT PREPARED TO SEE ENVIRONMENTAL VALUES TRADED OFF FOR ECONOMIC GAINS.”

01

PASTURES NEW “Farming, by its very nature, relies on the environment for its survival and while practices have certainly changed over time there has always been a fundamental understanding that we have to treat the ecosystems that support our industry with the greatest of care,” says Andrew Ferrier, CEO of New Zealand-based company Fonterra.

Fonterra, New Zealand’s largest company with an excess of $11.7 billion in revenue, is a cooperative, wholly owned by farmer shareholders. In a country that exports 95 per cent of the milk it produces, Fonterra is responsible for 95 per cent of all national dairy exports and accounts for a quarter of New Zealand’s total exports. Its the biggest supplier to the globally traded market for dairy, exporting more than two million tonnes as of July 2010, and it is the largest dairy processor in the world.

“We have a major role in meeting dairy demand globally and there is no sign of that demand abating. The global population has quadrupled over the past 100 years. The World Health Organisation is forecasting that the demand for food will double by 2050 – just 40 years away. Dairy is nutrient dense, so it will have a critical role to play in nourishing the world’s growing population, but this cannot be done at an unacceptable environmental cost,” Ferrier explains.

In a typical year, Fonterra collects approximately 20 billion litres of milk – around 14 billion litres in New Zealand. It processes products at roughly 28 sites in New Zealand and have another 60 sites around the world, 10 of them in Australia. Two-thirds of its revenue is dairy 056

ingredients and it sells to 140 countries – every continent in the world except Antarctica. One third of its revenue is consumer products, which have leading positions in consumer dairy in Australia, Asia, the Middle East and Latin America.

“Whichever way you look at our business, there is one inescapable conclusion: we have to be sustainable, both environmentally and economically. To produce in-demand dairy products, farmers need to be confident of making a return, but they also need to be confident their land can sustain higher production, so our relationship with the environment is something we take very seriously. Sustainable co-operative performance is a major component of our growth strategy,” Ferrier says.

New Zealand’s natural geography allows dairying to be increasingly regarded as the most profitable use of agricultural land. Unlike many parts of the world, where cows are housed indoors and fed grain, the country’s herds are predominantly grass fed from farm pastures. This is viewed by Fonterra as a major competitive advantage, both in terms of production costs and the value consumers place on products from “clean, green” New Zealand – but it does impose environmental challenges.

On farms, for example, the focus is on practical steps farmers can take to protect water quality, such as excluding stock from waterways, riparian planting, nutrient budgets which minimise fertilizer use and adopting best-practice irrigation techniques in full compliance with management regulations. Fonterra spends around $5 million a year supporting farmers

01 Andrew Ferrier, CEO of Fonterra 02 Marco Tronchetti Provera, chairman of Pirelli

CORPORATE RESPONSIBILITY

“GLOBALLY, WE MUST ACT ON THREE FRONTS: WE MUST CLEAN UP ENVIRONMENTAL DAMAGE CREATED IN THE PAST, WE MUST LIVE AND MANUFACTURE IN A SUSTAINABLE WAY, LIMITING NEW DAMAGE TO THE ENVIRONMENT, AND WE MUST INVEST IN INNOVATION TO DISCOVER NEW PATHS FOR A SUSTAINABLE FUTURE.”

with on-farm sustainability advice. It also funds research across a broad range of areas, including forage research to produce grasses that support higher milk production per hectare, genetic research to improve the productivity of herds and research to develop science-based tools to reduce nutrient losses.

“The more intensified dairying becomes, the more care we need to take to mitigate the risk of environmental impacts,” Ferrier says. “New Zealanders are very environmentally aware and while they are very conscious of Fonterra’s major role in the economy, they are not prepared to see environmental values traded off for economic gains.”

Climate change is another challenge Fonterra is prepared to tackle.

“We have the challenge of growing production to feed a rapidly growing world population without exacerbating climate change. Globally, dairy emissions account for 2.7 per cent of total greenhouse gas emissions.

That’s relatively low, but nonetheless, the dairy sector recognises that improving our carbon footprint is a key element of sustainable milk production,” Ferrier says.

For Fonterra, this is a very topical issue given New Zealand’s response to climate change is the introduction this year of an Emissions Trading Scheme.

From 2015, this will include agricultural emissions – it is the only country in the world currently making this commitment and it is a significant one given our greenhouse gas profile, where agriculture accounts for 47 per cent of total emissions (with dairying 19 per cent of those).

Fonterra’s response has been to take the lead by definitively determining the carbon footprint of its major export products. This has enabled it to identify where emissions reductions efforts should be directed – which is primarily on farms, where 85 per cent of emissions in their carbon footprint occur. It is also driving down emissions in the business. Its energy reduction project, one of the largest energy efficiency programmes in New Zealand, saved 320,000 tonnes of carbon dioxide, equivalent relative to 2003 levels, last year.

“As a cooperative, our farmers are our stockholders as well as supplying the raw ingredients for our global production company. We do not view the environment as something separate from our business, it is our business and because of this innate connection to the land environmental responsibility is at the core of everything we do,” Ferrier says.

Environmental responsibility for Fonterra is also a form of civic responsibility. “This responsibility is shared throughout the organization, from the grassroots farmers to the top management team and we take our leadership position very seriously. Being the largest and most visible company in a relatively small country like New Zealand puts us constantly under the spotlight and New Zealanders rightly demand the highest standards of environmental custodianship, regardless of how many export dollars we bring in the door,” he asserts.

But there are still incredible challenges that Fonterra will have to face in the future. “The greatest challenge between agriculture and the environment is going to be feeding a global population that is forecast to reach seven billion next year and nine billion by 2050,” Ferrier reveals.

“That’s an extra two billion people to find food, water and shelter for over the next 40 years in a world that is already pushing past the limits of what we can safely sustain.”

It’s Fonterra’s view that in order to feed the burgeoning global population in the years to come, trade barriers need to come down and subsidies be removed so that inefficiencies in the agricultural industry are worked out of the system. The company has built a substantial knowledge base on how to do this and is keen to share it with the world. It is working with other producers around the globe to help bring nutrition to people for the least economic and environmental cost. “Quite simply, our future survival depends on it and that’s a challenge we think is worth putting our good name on,” Ferrier says.

02

MOTORING ON “I believe it has become clear that all of us on the planet have a great responsibility toward future generations, one that cannot be put off until some later date when it is more convenient. People currently in leadership positions must take this responsibility especially seriously,” argues Marco Tronchetti Provera, chairman of the Milan-based Pirelli, a company active in the tyre and real estate sector among others. It is a premier supplier to the automotive industry, which pollutes heavily, and bears responsibility for investment in the future.

“Globally, we must act on three fronts: we must clean up environmental damage created in the past, we must live and manufacture in a sustainable way, limiting new damage to the environment, and we must invest in innovation to discover new paths for a sustainable future,” Provera explains.

At Pirelli, the philosophy is for the company to take responsibility for itself on each front, along with its stakeholders. “With consumers, we must educate them and offer them environmentally friendly products at an affordable price. We have an obligation to our stockholders to do business correctly and for a profit, and our approach to this is to focus on quality and innovation,” Provera says.

“With our suppliers, we are very selective and we require them to be sustainable, too. With our local stakeholders, we are attentive to the communities where we are based and fund hospitals, universities, social 057

CORPORATE RESPONSIBILITY

welfare and environmental projects. And, of course, we are attentive to the health, safety and well-being of our own workers. We believe responsibility for the environment lies with everyone and we begin at home.”

Pirelli has always been focused on the environment and acted early to create a sustainability steering committee and a corporate sustainability department, which guides it in everything it does. “We have devoted scientists and engineers researching how to clean up the environment and exist in a more sustainable way, and we have registered patents for such things as turning city waste into clean fuel and filtering diesel emissions to eliminate tiny particulate matter that pollutes and causes cancer,” Provera says.

“We have consistently upgraded and rebuilt our factories, and built new factories with attention to energy and water savings and low emissions.

Our newest factory, which will begin production next year, will be solar powered and will be built with special smog-eating cement.”

Europe has set quality standards for tyres in terms of fuel consumption, as well as safety and noise levels. “We apply these standards all over the world, whether or not governments are calling for them. We are rolling out new fuel efficient tires, including creating a new segment of ‘green’ tyres for SUVs and developing cyber-technology so that a chip will be able to communicate asphalt conditions to the car through the tyre, thus both increasing safety and improving environmental impact,” Provera says.

“We are eliminating pollutants like highly aromatic oils and we are using sustainable materials. Our research focuses on ‘green performance’, which means solutions that are both environmentally sound and high-performance, including standards for racing tyres. By the end of 2011, 40 per cent of our revenue will be generated from environmentally friendly products.”

Even so, cost-effective solutions to environmental challenges are still as much of an issue for Pirelli as they are for the rest of the automotive 058

industry. “That is where governments come in,” Provera says. “For example, as long as petroleum-based energy is cheaper than solar or wind power, companies trying to sell alternative energy will not succeed. Governments need to support the research needed to make clean technology cheaper and they need to help transitions take place by setting standards and forcing change in industries, and in some cases by footing the bill.”

Provera also notes that consumers have to be amenable to accommodating these challenges. “The consumer is not always so environmentally sensitive as to spend more money for a product that is better for the planet, so this is an area where the free market needs a little boost from governments.” But he also adds that “the challenges for Pirelli are often bureaucratic: too many different regulatory standards, too many jurisdictions to register the same patent in, high costs, high taxes, uneven competition. But we are a company that has always been driven by research and development, and this will continue.”

Pirelli’s enthusiastic attitude towards innovation is also a part of its risk-prevention philosophy. “Such truly unfortunate disasters, such as the BP disaster, confirm my conviction that governance based on strong risk prevention is a must. Companies should be able to ensure they are doing their utmost to prevent any potential negative environmental or social impact that could be caused by their activities,” Provera says.

He is very philosophical about the past, present and future of the industry and Pirelli’s forward-thinking strategies. “I, myself, cannot yet imagine a world without driving, a world without automobiles, or a world without oil extraction,” he says. “We thus need to work with what we have, focusing more and more on research not only to simply develop, but to develop in a sustainable way. Technology is a good thing; it is the key to finding sustainable solutions. I am confident that if we focus our efforts and resources in this direction we will find them.”

“THE CONSUMER IS NOT ALWAYS SO ENVIRONMENTALLY SENSITIVE AS TO SPEND MORE MONEY FOR A PRODUCT THAT IS BETTER FOR THE PLANET, SO THIS IS AN AREA WHERE THE FREE MARKET NEEDS A LITTLE BOOST FROM GOVERNMENTS.”

PLANET

Charuplaya treefrog (Hyla callipleura) Manu National Park, Peru

060

ENVIRONMENT

A S S E T

DESPITE DIRE PREDICTIONS REGARDING THE LOSS OF THE EARTH’S BIODIVERSITY, THE WORLD WILDLIFE FUND CONTINUES TO BE AN ARBITER OF CHANGE, AND MORE CORPORATIONS AND GOVERNMENTS ARE NOW THROWING THEIR WEIGHT BEHIND ITS EFFORTS. WRITTEN BY LISA VINCENTI

M A N A G E M E N T

“Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist,” activist and economist Kenneth E Boulding once famously quipped. Scientists and a new breed of greenminded leaders have been fervently warning businesses, governments and consumers for the past decade that the earth has reached maximum capacity – and change has to come and come soon, or else.

Were Boulding alive today, he would likely have expanded his analysis to include all nations, corporations and consumers, who believe we can continue along the route of unabated global consumption. The day the planet exhausted its renewable resources officially arrived on August 21, 2010, with human consumption being financed for the remainder of the year by digging into the planets non-renewable reserves – and by 2050 society will need two planets to keep up with the current demand for goods and services.

“If you spent your entire annual income in nine months, you would probably be extremely concerned,” says Mathis Wackernagel, president of Global Footprint Network, a California-based environmental research organisation that tracks global biocapacity against human demand. “The situation is no less dire when it comes to our ecological budget. Climate change, biodiversity loss, deforestation, water and food shortages – these are all clear signs that we can no longer finance our consumption on credit. Nature is foreclosing.”

Today, according to Global Footprint and UK-based think-tank nef (the New Economics Foundation), which have developed a measure of the world’s ecological footprint, humanity requires the equivalent of 1.5 planets to provide the resources consumed yearly and absorb waste.

They say that our use of more than the earth can renew has resulted in everything from climate change and greenhouse gas build-up to species extinction, biodiversity loss, depleted fisheries and soil erosion. A crisis is at hand and the World Wildlife Fund (WWF) is stepping up efforts 061

PLANET

01

to reverse this course, enlisting the aid of businesses and governments around the world.

“The next few years will be a critical period for the future of our planet,” says Jim Leape, director general of WWF International. “We have huge challenges ahead of us, but I’m confident that we can rise to them.”

In fact, the WWF, a non-governmental agency founded in 1961, has named 2010 the International Year of Biodiversity. “[It is] a year when the world will set new targets to protect and conserve our environment for people and nature,” according to Chief Emeka Anyaoku, its former president. Those goals include reducing the world’s global footprint to pre-2000 levels by 2020; with an overall target of staying within earth’s capacity by 2050. No easy feat considering that the Swiss-based agency saw revenues drop by $4m to $598m last year.

NONETHELESS, it continues to devote more expenditure on conservation efforts. And, perhaps more importantly, is that corporate and government support of the WWF agenda continues to grow – signaling that a shift in attitude toward the state of the environment and society’s impact on it, is taking place among top business leaders and policy makers.

Since 1985, the WWF has invested more than $9bn in more than 11,000 projects, spending $366m on conservation programmes in 2009 (the most recent figures available), up from $302m in 2008 and $286m in 2007. This comes amid a decline in income from $684m in 2007 to $598m in 2009, a time period that saw record increases coming from the corporate (up to $70m in 2009 from $68m in 2007) and government (up to $130m from $99m for the same period) sectors.

062

Today, it is not merely society’s impact on the environment making headlines, but also the effect of a depleted planet on well-being and health. Lifestyles are changing and consumers in more developed regions are returning to the basics, where sustainable, environmentally friendly products, be they grown at local farms or purchased from high-end luxury goods makers, are becoming mainstream requirements. No longer does being an environmentalist mark one as a member of a fringe group.

As a larger slice of the consuming public has begun to insist on a proactive approach to sustainability with regards to the products and service they purchase, forward-thinking corporations have adopted new strategies in response. More and more in the business community are beginning to view sustainability and environmental conservation not as a cost to the bottom line but as a way to drive future profitability and ensure survival. However, time is running out – and quickly.

“We have only this generation to get sustainability and the environment right,” Leape notes. Plants, animals, fungi and microorganisms form a complex, interconnected web of ecosystems and habitats providing humanity with clean water, breathable air, food, medicine, energy and more. There are already millions of people around the world who are feeling the consequences, in rich and poor countries alike. Power shortages, uncertainty over food security and water availability, and increased vulnerability to natural disasters and diseases are making headlines on a daily basis.

“Just as a few lonely economists warned us we were living beyond our financial means and overdrawing our financial assets, scientists are warning us that we’re living beyond our ecological means and

“Just as a few lonely economists warned us we were living beyond our financial means and overdrawing our financial assets, scientists are warning us that we’re living beyond our ecological means and overdrawing our natural assets.”

01 Drought in french guianamangrove tree

ENVIRONMENT

03

02

01

05 05 Leonardo DiCaprio

01 Local woman at Mekong river near South Vietnam 02 In the last 10 years we have lost nearly half of all our wild tigers 03 Icebergs in Northeast Greenland 04 World Wildlife Fund wetlands conservation programs help individuals earn a living

overdrawing our natural assets,” argues Glenn Prickett, senior vicepresident at Conservation International, a Washington DC-based organisation that works with governments and companies (including Starbucks and Wal-Mart) to make conservation part of their business.

“Mother Nature doesn’t do bailouts.”

The global financial crisis of 2008 has morphed into something far larger than merely serving as a marker of a major worldwide recession.

It has become a symbol of what is wrong with our current economic model – a model where success is measured on an unsustainable model of growth based on production. Furthermore, it has witnessed a rethinking among some economic analysts and players who now ponder the fundamental nature of what it means to be successful not only as a business or nation but as society as a whole. Using strict measures such as gross domestic product, sales or even new store openings is antiquated to these forward-thinkers. They say that these markers fail to take some of the most important, though far more difficult to measure, criteria of success into account, including well-being and happiness.

“The GDP suited a different era and now we need a metric for our times,” says Nic Marks, a fellow at the London-based New Economics Foundation and founder of its Centre for Well-Being. “During the Second World War, production was important. After the war was the need for rebuilding. We’re way past that. We need to account for our ecological footprint and see how we’re operating on the planet. The GDP is often precisely wrong in that it’s not measuring progress, just the making of stuff.”

The foundation developed a new marker for measuring the success of nations, which it has dubbed the Happy Planet Index. HPI combines

04

economic metrics with indicators of well-being, including subjective measures of life satisfaction, which have become quite sophisticated (HPI uses data from Gallup, World Values Survey, and Ecological Footprint).

The index assesses social and economic well-being in the context of resources used, looking at the degree of human happiness generated per quantity of environment consumed.

“HPI is striving to measure a better future,” Marks says, adding that one appeal of the GDP, has been that it presents a simple message: up is good; down is bad. “HPI is trying to mirror that simplicity, using one number as a headline indicator.”

As a steward of sustainability and environmental conservation, the WWF has undertaken an massive campaign to further it’s agenda of conserving biodiversity and reducing society’s impact on the environment. “Businesses realize that their supply chain can be at risk if they are using natural resources that are depleting fast, and particularly vulnerable to cost volatility,” notes WWF’s Jennifer Meunier CHANGE TO Eleni Androulaki. “Moreover, companies realize that they can reduce costs by being more sustainable – for example, using more energy efficient buildings results in reduced CO2 emissions and lower energy costs. Companies also stand to gain additional benefits from proposing sustainable products to consumers – including an improvement of their overall image.”

Yves Manfrini, a fund manager of Union Bancaire Privee, Switzerland, adds: “In a world of shrinking resources, those who first recognise the need for sustainability and adopt appropriate strategies will succeed best in future global competition.”

063

AUTUMN TONES Amouage’s Oriental Oud candle from the new Oud home collection imbues interiors with the woody fragrance of Agarwood, evoking the intoxicating scent of autumn.

Available from Gazzaz, 30th St AKA Prince Sultan Bin Abdulaziz St, Riyadh; amouage.com For after hours glamour, Valextra’s Handy clutch bags are well worth the trip to Milan. This seasonal triumvirate of navy, ocra and marasca offers the ideal match for any ensemble; valextra.it

AUTUMNAL TONES INSPIRE A WINTER RICH IN COLOUR. STAND OUT IN THE MOST DAZZLING HUES OF THE SEASON. WRITTEN BY ASHLEE BEARD

FALL FOR COLOUR TRENDS are notoriously cyclical, and as forecasters astutely point out, during times of economic struggle, fashions become brighter and designs become bolder. Manufacturers turn to chromatherapy in an attempt to coerce customers back into retail therapy, luring us with warm autumnal tones, from deep Bordeaux and russet reds, to invigorating tones of apple green and orange – a favourite this season. Each shade plays an important psychological role as tools to instil calm, energy – even productivity – as commercial interior design teams and leading corporations have discovered. Strength, power and leadership, make a bold statement this season.

Creative Cycle’s unique custom-built Battle Axe, created by master bike builder Doug Keim, is the ultimate road warrior.

Made to order; creativecycles.com

064

Encased in walnut, Tivoli Audio’s new anniversary model, the Model 10 table radio, brings you the the best sounds of the season.

Tivoli Audio M10, Available from Dubai Audio Centre Sheikh Zayed Road, PO Box 32836; dubaiaudio.com

Protect your coveted iPad in the tones and textures of the season with Tod’s calfskin and crocodile iPad cases.

Ground Floor Centria Mall, Olaya Street, Riyadh; tods.com

Chloé’s Darla epitomizes the sophisticated femininity of the celebrated French fashion house.

Finished in soft calfskin in the colours of the season, these chic little numbers are the ideal office accessory.

Available from Saks Fifth Avenue, Kingdom Shopping Center, Olaya Street, PO Box 11321 Riyadh; chloe.com

Stylish storage comes courtesy of Dutch artists Scholten & Baijings for Established & Sons, ideal for stashing away your favourite things.

Established & Sons, available from Four, Shuwaikh Industrial Area, Mahdi Habeeb Building, Block 7, Str 12, Office 8, Shuwaikh; establishedandsons.com

Belt up in Aquascutum’s cozy chartreuse wool suit, guaranteed to become a perennial favourite. Aquascutum, available from Villa Moda, Moda Mall, Bahrain WTC, Manama, Kingdom of Bahrain; aquascutum.com

065

Walnut with sycamore marquetry marks out master cabinet maker David Linley as a true craftsman, as the Garrick desk set attests.

Available by mail order, David Linley, 60 Pimlico Road, London, SW1W 8LP; davidlinleyfurniture.com With Montblanc’s limited edition Vintage Chronographe on your wrist, it’s impossible not to watch the clock.

This new member to the venerated Collection Villeret 1858 features a stylish spiral shaped tachymetre and telemetre, circumscribed in an 18kt red gold case. Kingdom Centre, 1st Floor, Riyadh; montblanc.com

Be the king of the urban jungle and show your predatory prowess with Louis Quatorze’s audacious printed briefcase. Louis Quatorze; louisquatorze-paris.fr

SHO

JI FU

Gucci’s Winter 2010 collection features earthy country colors for urban living

066

JII06

Spend too much time in taxis?

Obviously Scandinavian design group Front have. Moroso’s quirky Wood chair is inspired by the classic wooden bead seat cover; moroso.it

4

AUTUMN TONES

Warm mahogany tones single out Riva’s new Aquariva by Marc Newson as the most stylish speedboat of the season.

The limited edition Aquariva by Marc Newson is available from Gagosian Gallery, 555 West 24th Street, New York NY10011; gagosian.com

Add a shot of colour to your desktop while maintaining order in style with Danese Milano’s Bumblebee magazine holder.

Be the envy of the boardroom with ColorWare’s custom coloured iPhone G4. ColorWare; colorwarepc.com

Take the stress out of stopovers with Mandarina Duck’s Drop Plus. Its bold, sturdy polycarbonate shell stands out on any luggage carousel, ensuring a quick getaway; mandarinaduck.com

067

068

LUXURY TRAVEL

EXPERTS PREDICT THAT THE WORLD TRAVEL MARKET WILL CONTINUE TO GROW, AND TOURISTS AREN’T SKIMPING. THINK DISCLOSES THE INSIDE TRACK ON FUTURE TRAVEL TRENDS AND THE FINEST NEW HOTELS ACROSS THE WORLD.

WANDERLUX PACK

CastaDiva Resort

your bags; next year will be the year to travel. At the start of 2010, we reported that the Middle East was to defy the recession with a host of new luxury hotel openings, legacies of the boom years.

While it has been true that properties have been plumping their pillows and opening their doors across the world, the question on everyone’s lips has been whether there is enough demand for five-star travel to keep them in business.

Traditionally, high-end hotels are kept alive by a healthy mix of executive and wealthy leisure travellers. Over the last couple of years corporate and domestic purses have been snapped firmly shut and jittery hoteliers and commentators wondered if things would ever be the same again.

Travel slumped in 2009, falling by around 13 per cent across the region, leading the World Travel & Tourism Council (WTTC) to gloomily claim at the outset of 2010 that it was likely to be a flat year for travel, pointing out that international airlines saw passenger numbers dip dramatically.

But it seems that things are on the turn.

According to the UN World Tourism Organization (UNWTO), international travel has jumped seven per cent, but the Middle East has led the pack with a 20 per cent growth in tourist numbers. Whatever the realities of this year’s performance, both the WTTC and UNWTO agree that the tourism market will grow steadily over the coming decade, starting next year.

Perhaps buoyed by this news, the new project announcements that have been so scarce this year have begun once again. Notable in the Middle East is Orascom Development’s news that it is to splurge US$245 million on two Four-Seasons managed hotels, slated to be ready by the end of 2011.

That the hotels planned are Four Seasons properties is a sign that there remains an appetite for luxury travel. In fact, high-end hotels have seen the most demand and are back up to the levels of three years ago after occupancy in these properties increased by 10 per cent in the first half of 2010. Here in the Middle East, a recent survey by STR Global shows that 49.7 per cent of hotel rooms under construction in the region are ‘luxury’ and ‘upper upscale’. Marriott Hotels has reported second quarter profits that beat expectations and anticipates that room rates will likely rise again by the end of the year when corporate bookings resurge. The willingness to splash out on luxury trips is a sign that people are once again confident in their financial stability.

Paul Nelson, spokesman for the World Travel Market, says: “The global financial downturn has seen a number of people switch from quantity to

quality. Holidaymakers are reducing the number of holidays they take but up-grading the quality of accommodation they stay in.” That has meant an increased demand for all-inclusive packages in five-star resorts: Travellers are prepared to spend on their holidays but they don’t want to pay for hidden extras.

Dr. Rag. Gabriele Zerbi, CEO of H.r.c, (CastaDiva), a luxury hotel chain on the shores of Italy’s Lake Como, is in accord: “The five-star luxury sector is not affected by the crisis. This may not be the same for the three and four-star properties, but the fact that there are very few fivestar luxury properties in Italy protects this sector.”

He also believes that luxury is also evolving. “Today there is a new concept of luxury; a type of luxury that’s younger, less formal and less rigid. Dynamic, cultivated people nowadays want to have their emotions stimulated, they want new experiences but, more than anything, they want a service that matches their individual personality.”

Tourists are predicted to roam domestically and internationally, short and long-haul, as households up their spending on holidays having reined themselves in last year. But, unfortunately for airlines, they’re likely to continue their disfavour for business class, with the vast majority of leisure tourists saying that they will continue to fly economy and more business customers sticking with premium economy tickets.

Not that carriers have been disheartened. Middle Eastern airlines are capitalising on the weakness of their Western counterparts and growing at a staggering speed. Emirates put in a US$9.1 billion order at this year’s Farnborough Air Show and forges ahead with a dedicated terminal for its A380s at Dubai Airport. Etihad Airways posted double-digit growth for the first half of 2010. Qatar Airways has orders and options for 178 news planes and plans to go ahead with 15 new destination launches in the coming 12 months.

Not to be outdone, Western airlines are pursuing a vigorous mergers and acquisitions frenzy to adapt their business models to a new world travel order. United and Continental have been approved to form a ‘super airline’; BA has merged with Iberia and eyes other potential take-overs in a bid to keep up, despite being troubled by industrial action; Lufthansa has acquired three additional European airlines and anticipates that international mergers will continue apace.

With hotels and airlines aligned in their determination, all that remains is a mighty tussle for market share. Travellers should take full advantage as the airlines and hotels attempt to woo customers with attractive offers and benefits.

069

LUXURY TRAVEL

01

070

02

01 Praia de Luz – elegant lounge bar at Park Hyatt Goa Resort and Spa 02 CastaDiva Resort hammam 03 Fine dining in Hotel Verta

The travel and tourism industry employs approximately 235 million people and generates over 9.2 per cent of world GDP Q From 1950 to 2005, international tourism arrivals expanded at an annual rate of 6.5 per cent, growing from 25 million to 806 million travelers.

Q In 1950 the top 15 destinations absorbed 88 per cent of international arrivals; in 2005 that figure was down to 57 per cent, reflecting the emergence of new destinations, many of them in developing countries.

Q By 2020 international arrivals are expected to surpass 1.5 billion people.

Many of these are expected to be retired Baby Boomers.

Q The five most visited countries last year were, in order, France, USA, Spain, China and Italy.

Q

LAKE COMO, ITALY The CastaDiva is the chicest five-star resort to open on the shores of Lake Como in a century. A short 55km drive to the heart of Milan, the CastaDiva is gaining in popularity with those in search of a less formal, individual destination for those in the know. The former lakeside residence of the famous opera singer Giuditta Pasta, the luxury resort brings a new dimension to the Como hospitality landscape.

Nestled in the gardens are secluded luxury villas, apartments and even a spectacular independent duplex fit for a rock star. George Clooney, still one of the Lakes’ most celebrated celebrities, and his Italian television personality girlfriend have already tried and tested it.

The piece de resistance, however, is the 1300 square metre spa, which has been conceived to resemble the set of a James Bond movie.

The dual occupancy thematic spa suites are perfect for honeymoon couples.

The floating swimming pool and deck, which converts into a magnificent show fountain at night, adds to the romance of the idyllic resort.

Book into: CastaDiva Resort, part of the Tais Collection Where: Lake Como, Italy Why: Contemporary operatic style resort – the newest five-star luxury resort to open in Italy this summer.

Contact: +39 31 32 511, www.castadivaresort.com

CAPE TOWN, SOUTH AFRICA The Delaire Graff Estate is an established destinction that reflects the wealth of South Africa’s diamond and wine trades. Owner Laurence Graff, founder and Chairman of Graff Diamonds, bought this estate straddling the Stellenboch and Franschhoek districts and vowed to turn it into one of the leading restaurants and boutique hotels in the world-famous vineyard region.

He’s done a good job. You’ll find a delicious series of 10 private lodges set against breathtaking hillsides with all the facilities you and your party could need. Choose from a two-bedroom Owner’s Lodge with log fireplace and private heated pool, or cosy up in a smaller one-bedroom lodge, also with

03

its own pool and butler’s kitchen – some even have views as far as the iconic Table Mountain. Privacy is assured by delicate hedges of camellia and coffee jasmine and you can enjoy guilt-free indulgence, safe in the knowledge that every effort is being taken on your behalf to minimise water and electricity consumption. And if you like the artwork, ask Graff for more details – all the pieces have been selected from his private collection.

Back in the main lodge, you can take advantage of a private dining room, conference facilities and even a boutique cinema.

Book into: Delaire Graff Lodges & Spa Where: Cape Town, South Africa Why: The best views in the Stellenboch Contact: +27 21 885-8160, www.delaire.co.za

GOA, INDIA Spread over 46 acres, the Park Hyatt Resort and Spa, conceptualized as an Indo-Portuguese village, resembles a lively picturesque town full of fragrant plant-filled courtyards and gardens, linked by Venetian canals, bridges and cobbled streets. The hotel blends vibrant elegance with high drama to recreate the cheerful and relaxed atmosphere of a small Goan village.

At the heart of the resort village, a collection of four recently refurbished plaza restaurants offers a variety of culinary delights, each with a select menu of authentic food and lively open kitchens, as well as indoor and outdoor seating. An in-house cinema provides evening entertainment for those who have time on their hands and prefer the indoors. The warm décor of the rooms, with a sunken mini swimming pool and outdoor shower, make them unforgettable.

Book into: Park Hyatt Goa Resort and Spa Where: Goa, India Why: Its distinctive Indo-Portuguese style, excellent facilities and warm ambiance Contact: +91 832 272 1234, goa.park.hyatt.com

071

LUXURY TRAVEL

01

LUANG PRABANG, LAOS Most people wanting a taste of South East Asia make a beeline for Thailand, but to do so is to spurn one of the most regal cities of the region. Luang Prabang, the cultural and spiritual capital of Laos, is found on the banks of the Mekong River, which snakes languidly towards the sea. As a former colony, the city boasts a fusion of laid-back French-Laotian culture, with coffee and croissants sitting alongside golden-roofed temples amid the jungle. There is nowhere better to stay in the city than the Alila Luang Prabang. Built on a heritage site, it channels colonial sophistication without forsaking any modern luxuries. Secluded but just 10 minutes from town, you can retreat to a sanctuary of plush calm after a busy day exploring and enjoy tranquil gardens, real fires, natural spa therapies and gourmet meals. There are only suites here, all of which open onto either a private garden, pool or pavilion – two even have exclusive tower access for the ultimate in panoramic dining.

Book into: Alila Luang Prabang Where: Luang Prabang, Laos Why: Perfectly combines luxury with cultural distractions and outdoor pursuits Contact: +856 71 260 777, www.alilahotels.com/luangprabang

LONDON, UK The Von Essen group of hotels counts amongst its properties a Castle frequented by Britain’s Henry VIII so you can be pretty sure that you’re going to encounter something special when you book in. The newest to launch is the Hotel Verta in the heart of London. Sitting alongside the London Heliport in Battersea, it might be one of the best aerially connected spots in London, perhaps excluding Heathrow airport, which would be significantly noisier. It combines old world, five-star values with boutique service, artisan decorative flavours and views over the historic River Thames. Rooms combine the best in classic design – with period art deco furniture and locally relevant books and maps – with contemporary technology including flat screen TVs, WiFi and touch pad heating and light controls. And when you get hungry, call roomservice for the very best in modern European cuisine, from lobster thermidor to the humble burger, as you watch helicopters descend.

Book into: Hotel Verta Where: London, UK Why: Unrivalled location if you prefer to travel by air Contact: +4420 7801 3500, www.hotel-verta.co.uk

072

02

DUBAI, UAE The opening of the Armani Hotel in Dubai marked the first of the internationally celebrated designer’s hotels. Housed in the base of Burj Khalifa, the world’s tallest building, the property has been personally designed by Giorgio to bring interiors suffused with his understated style.

The focus is on luxurious quality. Each room is clad in opulent fabrics and leather, the bathrooms are finished in green bamboo marble from Brazil, while the living spaces are furnished with bespoke oak tables with a liquid metal finish. It is minimalism taken to a new level, but the sharp lines and graphic design schemes are precisely evocative of his distinctive signature clothing. Be sure to take advantage of the exceptionally helpful staff in finding your way around – you risk getting lost if you don’t.

Book into: Armani Hotel Dubai Where: Dubai, UAE Why: Be among the first to experience the designer’s hotel Contact: +971 4 888 3888, dubai.armanihotels.com

LONDON, UK Since 1889, the very name ‘Savoy’ has stood to mean the very best in classic hospitality; it was the first to be lit by electricity and the first to have ‘ascending rooms’, or lifts as we now know them. The iconic London hotel has been closed for three years in a refurbishment project that took twice as long and cost over twice as much as planned. Problems have plagued the development, now, under the Fairmont banner, the company awarded the management contract, but the staff are prepped and ready to reopen the former palace for business on 10/10/10.

The new incarnation blends original Edwardian grandeur with Art Deco glamour and the latest, discreet technological conveniences, maintaining its five-star service standards. Many of the 269 rooms and suites have views of the River Thames and London City, while the signature suites have been styled after some of the hotel’s highest profile guests. The Royalty among them has given rise to a spectacular two-bedroom Royal Suite which previewers say is ‘fit for a King’.

Book into: The Savoy Where: London, UK Why: The rebirth of one of the world’s grandes dames hotels Contact: +44 207 420 2300, www.fairmont.com/savoy

01 Armani Hotel Dubai 02 Alila Luang Prabang

EXHIBITION

PROJECT 60 THE NEWLY ESTABLISHED ECONOMIC CITIES AUTHORITY (ECA) IS MARKING ITS ESTABLISHMENT WITH THE LAUNCH OF AN INNOVATIVE NEW ART SCHEME, SHOWCASING THE VERY BEST IN CONTEMPORARY SAUDI ARABIAN ART. DESIGNED TO SUPPORT THE CULTURAL DEVELOPMENT AMBITIONS FOUND IN SAUDI’S ECONOMIC CITIES, “PROJECT 60” WILL INVITE CONTEMPORARY SAUDI ARTISTS TO LEND THEIR ARTWORK – 60 PIECES IN TOTAL – TO THE NEW ECA OFFICES IN KING ABDULLAH ECONOMIC CITY FOR A THREEMONTH DISPLAY. THE INITIATIVE ALSO INCLUDES A COMMITMENT FROM THE GOVERNMENT’S ECA, WHICH ENSURES ITS SERVICES WILL BE OFFERED IN NO MORE THAN 60 MINUTES, ALL DAY LONG, THROUGHOUT THE ENTIRE WEEK.

074

075

EXHIBITION

03 06

01

02 05

04 01 02 03 04 05 06

076

Symphonyat 4 Symphonyat 10 Muwashahat 11 Washmiyat 9 Darwishyat 1 Washmiyat 15

02

01

THE

03 01 Ola Hijazi in her studio 02 Economic Cities Authority, exhibition venue 03 Darwishyat 22

Economic Cities Authority (ECA) has identified an opportunity to utilize its headquarters as a platform to expose Saudi art to the diverse audience of business and political figures who frequent the offices on a daily basis. Project 60 will also serve to highlight one of the ECA’s most exciting initiatives, 60/24/7, a service to make government and non-governmental services available to residents and expatriates, individuals or businesses, within 60 minutes of their request, any time of the day.

Modern artist Ola Hijazi’s will be the first to display her most recent work in the head office, under a scheme which communicates ECA’s cultural mandate, which recognises the fundamental role vibrant culture plays in supporting a successful city, especially where parks, museums and other cultural provisions are diminished.

The authority is focused on developing an urban ecosystem within the Economic Cities that simultaneously fosters the mutually supportive fields of business and culture. Project 60 will allow the organisation to open a creative dialogue surrounding the mandate, which recognizes that culture is integral to the liveable cities.

The scheme will be inaugurated through an opening reception jointlyhosted by ECA and King Abdullah Economic City developer Emaar. The local and international business and diplomatic community, in addition to the art community in Saudi Arabia, will be invited to view a regularlyrefreshed showcase of cutting-edge Saudi artwork, year-round.

The economic cities stand as physical proof that the oil powers are not complacent in their oil weath. Saudi Arabia may be one of the world’s wealthiest nations, but it also has a large, youthful population. In an effort to diversify the economy away from a dependency on hydrocarbons

and create sustainable jobs (an estimated 1.3 million of them) for its burgeoning populace, authorities are establishing dedicated economic cities. SAGIA estimates that the forward-thinking, sustainably designed and environmentally-minded cities will contribute US$150 billion to the GDP by 2020, not to mention a high quality of life for residents. They are intended to provide continuous improvement to the Saudi Arabian investment environment. Four of the six planned new economic cities are currently under development – King Abdullah Economic City, Prince Abdul Aziz bin Mousaed Economic City, Jazan Economic City and Knowledge Economic City – in conjunction with UAE real estate developer, Emaar Properties.

Over a 1,000 of the world’s free zones were surveyed and the 60 deemed most successful were meticulously studied to determine key success factors during the economic city development process. The resulting products are intended to create vibrant centres of excellence in several sectors.

THE MOST prized of the new cities is the King Abdullah Economic City (KAEC). It represents a US$27 billion investment driven by the government but funded by the private sector, the largest private sector project in the region. And in order to encourage private investment, authorities have been actively removing barriers to trade to make the new cities among the world’s easiest places to do business.

When completed, KAEC will be the size of Washington DC, housing and employing up to two million people. Six key components are intended to create diversity of economic opportunity: a sea port, industrial zone, 077

EXHIBITION

02

03

04

01 02 03 04

01

078

Muwashahat 10 Kulsumyat 4 Symphonyat 7 Kulsumyat 1

079

OLA HEJAZI

www.olahejazi.com Born in Tripoli, Lebanon, Saudi artist Ola Hejazi has been based in Jeddah since she was raised there as a child. Considered one of the leading abstract expressionist artists in the Kingdom, Ola’s trajectory as an artist can be traced back to the Saudi Art Center in Jeddah where she first experimented with oil painting in 1995. She has gone on to develop her skills in printmaking and portraiture through a host of courses in the best art schools internationally, including the Chelsea College of Art and Design and the Slade Art School at the University College of London.

Her work follows the theme of abstraction and traditional symbols, with a pronounced use of primary colours and Arabic calligraphy as a clearly distinguishable common thread. She is constantly drawing on her educational background in Arabic literature, seeking inspiration from the poetry of Mohammad Darwish or the music of the iconic Umm Khulthoum in her latest series Darwishiyat and Khulthoumiyat. Ola likes to express her form of ‘truth’, as she sees it, through a combination of bright colours and often written words on the canvas, relaying through her images a rich array of human emotions. None of her pieces are titled, a deliberate move so that viewers are not confined in their interpretation of her work.

Her work has steadily evolved throughout the years, expressing stronger opinions about her own design. There is more colour, more detail, and more tension in her work. In her last series Tattoos, she introduces black onto her canvases and uses numbers and geometric shapes instead of the free form calligraphy that has dominated her earlier work.

In addition to her private painting endeavours, she enjoys working to foster artistic talent with children and also trains teachers to develop their experiences in order to teach their students in a more creative way.

“The visionary inspiration and imagination in not a technical skill learned in school,” she says, “but rather to my personal belief, a gift from God. This is the only way I can explain the source of any idea I may have during the creation process.”

One of Saudi Arabia’s leading and most celebrated female artists, she has participated in countless group exhibitions internationally, including Qatar, Jordan, France and Egypt.

Preceding her display for Project 60, Ola has exhibited solo shows at Atellier Jeddah in 2001, Europia Gallery in Paris in 2007 and a permanent collection at the SAGIA headquarters in Riyadh since 2007.

080

EXHIBITION

02

03

01

01 02 03 04 05

Washmiyat 4 King Abdullah Economic City Darwishyat 9 Washamyat 24 Darwishyat 4 04

educational zone, centre business district, financial island and residential districts, including 25,000 hotel rooms to accommodate guests, notably on their way to pilgrimage.

With access to the Red Sea, and a key strategic location between Jeddah and the Holy Cities of Mekkah and Medina, the city also incorporates a special sea terminal for these pilgrims. In addition, it is intended that the port will make KAEC a global hub for light industry, providing good transport links and proximity to the rich natural resources found in Africa and the Middle East.

Maximising the natural resources available in the Kingdom itself is also a goal. Petroleum resources will provide low-cost feedstock for a range of petroleum derivatives, including plastics in a so-called ‘Plastics Valley’ where automotive, biomedical, construction and food packaging applications will be co-located. Knowledge-based industries are welcomed to the city; education is prioritized; financial services

05

are invited to establish a hub in the heart of the globally important Saudi market.

Low-cost energy provides the main enticement for foreign investors.

But not the only enticement. The Kingdom has been actively developing its human resource pool by supporting its highly-educated youth population through vocationally relevant higher education programmes.

Developing a Cultural Strategy for the Economic Cities will add another dimension to the urban environment that will cater to the young and educated demographic who seek out these types of lifestyle amenities. With long term plans to include cultural landmarks, such as museums and art centers, “Project 60” is just the first showcase of a broad development plan to infuse creativity and innovation into the fabric of the Economic Cities.

The exhibition will be open for viewing from November 2nd, 2010.

Athr Gallery www.athrart.com is Project 60’s Gallery Partner.

081

FUTURE THINKING

THE EFFICACY OF EFFICIENCY THE CONCEPT OF A SELF-SUFFICIENT NEW YORK COULD POINT THE WAY TO HOW PEOPLE LIVE OF THE CITIES IN THE FUTURE. WRITTEN BY STEVE HILL

EFFICIENT LIVING MACHINE is an imaginative and dramatic view of how New York could look in the not too distant future as an energy self-sufficient metropolis.

In this world, virtually everything residents require would be within easy reach thanks to an overlapping grid system that flows between buildings, becoming home to offices and residences as well as generating new public spaces for parks, recreational facilities and even farms, improving the livability of the city.

In this new city, nothing and no one is rooted to the ground, with residents no longer needing to have their own cars because the public transport system would be so convenient and efficient.

And the vertical connections on the grid system – rising from current and planned stations on the city’s Metro lines – would be crucial in overall design terms, helping generate enough electricity, food, heat and oxygen for the Efficient Living Machine to be completely self sufficient.

Electricity would be generated by the use of wind turbines plus highly concentrated photo voltaic and hydrogen systems. The length of the food chain would become much shorter thanks to the close proximity of farms to the eventual destination of products.

And the fermentation of organic waste from the farm and the city itself would help produce a source of heating for residents.

Oxygen produced on these grids would be circulated throughout domestic buildings to enhance living comfort, while rainwater would be collected and purified before being recirculated, ready to be consumed by residents.

The firms of LEDarchitecturestudio and HIDDENOFFICE have collaborated to produce these concept proposals, which are described as a way “to revise the city… and above all an attempt to imagine what could take place in another way”.

Residents, they add, could be offered differing lifestyles on different levels of the grid, with the density of functions enabling people to move conveniently from the office to a park or farm.

083

BOOKS

ERICK VAN EGERAAT

REVIEWS BY DOROTHY WALDMAN

Erick van Egeraat won first prize in 2007 for his concept design for the National Library of the Republic of Tatarstan, Russia. Embedded into the hill, a multi-functional atrium is at once a meeting point, boulevard, gallery, living room, garden and educational facility, with the intention of encouraging citizens to use the resource freely.

ICONOCLAST: A NEUROSCIENTIST REVEALS HOW TO THINK DIFFERENTLY Gregory Berns Harvard Business Press Defining an iconoclast as a person who does something that others say cannot be done, Gregory Berns, who holds the Distinguished Chair of Neureconomics at Emory University yet translates technical findings for a broad audience, reveals how successful people think differently.

Recognising the natural roadblocks that inhibit innovative thinking – flawed perception, fear of failure and the inability to persuade others – he examines a host of successes to illustrate and explain how breaking through these barriers allowed these individuals to earn their iconic status.

THE BUSINESS PLAYGROUND: WHERE CREATIVITY AND COMMERCE COLLIDE Dave Stewart & Mark Simmons Prentice Hall In today’s highly world, there are many businesses trying to compete on the basis of quality, price and timing. However, to be truly successful you have to be creative to discover unique ways of doing things better or differently from everyone else. Most cultures focus on structure and uniformity rather than on the risks associated with creativity. This entertaining book applies the magic of creativity that we all innately possessed as children to business by providing a plethora of idea-inducing games to recharge the creative juices.

WHAT THE DOG SAW AND OTHER ADVENTURES Malcolm Gladwell Penguin Books This collection of articles, which all originally appeared in The New Yorker, share the unique observations of Malcolm Gladwell, the highlyregarded author of The Tipping Point, Blink and Outliers. The title essay is about Cesar Millan, a dog whisperer. Interested in what goes through the minds of people, Gladwell first wanted to know how Millan was able to calm animals, then realised that the real question was what went on inside the dog’s head. Other essays ponder financial scandals and disasters, such as the crash of the Challenger space shuttle, or wonder about decision-making in a world of both too much and not enough information.

GOOD VALUE: REFLECTIONS ON MONEY, MORALITY AND AN UNCERTAIN WORLD Stephen Green Allen Lane As the world began its plunge into economic crisis in 2008, Stephen Green, chairman of HSBC, began reflecting on history, politics, religion, philosophy, literature and economics to understand the deepening gloom surrounding global affairs. Beginning with an examination of how globalisation has affected human history, he progresses towards the future. With the seemingly contradictory goals of reducing poverty while reducing carbon emissions, businesses and people must develop new ways to interact and react with each other for the individual and communal good in order to produce lasting value.

085

VISIONARY

THE

first-ever synthetic life form to be birthed in a laboratory has been created by Dr John Craig Venter, recognised as one of the world’s leading scientists for his contributions in genome research.

Every letter of the genetic code of a single-cell bacterium was synthetically replicated at the Craig Venter Institute in Rockville, Maryland, after more than a decade of work at a cost of $40 million. To mark the genome as synthetic so its replication can be traced, strands of watermarked DNA containing a coded message were introduced into the cell.

PIONEERING SCIENTIST, DR CRAIG VENTER,IS THE FIRST PERSON TO SYNTHECISE A LIVING ORGANISM IN A LABORATORY.

EVAN HURD

WRITTEN BY DOROTHY WALDMAN

086

“This is an important step, both scientifically and philosophically,” Dr Venter says, marking a new era when life can be made to benefit humanity by absorbing pollutants from the atmosphere and even producing proteins for life-saving vaccines.

The economic value of this discovery has been estimated to be more than a trillion dollars; if his vision of creating algae that can be converted into fuel – a Venter project in conjunction with ExxonMobil – comes to fruition.

Some see this achievement as a significant breakthrough, assuring Dr Venter the Nobel Prize. Other scientists argue that it is not a new kind of life form because the cell behaves like any other of its kind, while still others view it as an apocalyptic Pandora’s box.

Although opposed to the war in Vietnam, it was during his drafted tour of duty as a medical corpsman with the US Navy, when he cared for wounded soldiers, that the former surfer and night clerk ar Sears department store developed a desire to study medicine that would lead to scientific research.

He entered the State University of New York, Buffalo, leaving in six years with a doctorate and then joining the National Institute of Health, where he developed a rapid method of finding genes, ultimately becoming entwined in an international patent controversy.

Regardless of the furowre that sometimes surrounds his work, Dr Venter’s most recent discovery is “a defining moment in the history of biology and biotechnology” according to Mark Bedau, a philosopher at Reed College, Portland, Oregon. Dr Venter was listed on Time magazine’s 100 most influencial people in the world list in 2007 and 2008.

Powered by

performance Life is constant. The energy to power society can be no less. Each and every day Sempra Energy companies provide reliable, sustainable energy to millions of people. We take great pride in owning the largest natural gas utility in the United States and building large scale energy infrastructure. This includes one of the largest thin-film solar sites in North America and joint development of the most expansive natural gas pipeline built in North America in the last 20 years. We operate one of the leading LNG import firms in the United States. Our clean-burning natural gas power plants produce over 2,600 megawatts of electricity. At Sempra, it’s not about who we are. It’s about what we doď€

www.sempra.com