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Canada ........................C$ 7.50 France ..........................Ő 4.57 Germany ....................... Ő 6.14

Egypt ..............................E£ 10 Italy.............................. Ő 5.17 Jordan .......................... JD 4.5

Kuwait ...........................KD 1.2 Lebanon .................... L£ 5,000 Morocco.........................DH 22

Oman............................ OR 1.5 Qatar .............................QR 15 Saudi Arabia ...................SR 15

Switzerland ....................SFR 8 Syria............................ S£ 100 Tunisia .......................... TD 2.5

UAE .............................AED 15 UK .....................................£ 2 USA ....................................$ 5

YEARBOOK 2018

GEOPOLITICS

TILTING BALANCE 2018 will be no different and Middle East may even see fresh set of conflicts amid the Saudi-Iranian tension and Trump’s evolving incoherent policies

10

26

28

20

INFOGRAPHICS

ECONOMY

NUMBERS SPEAK

COURSE RESTRUCTURING

The Arab world dominated headlines throughout 2017 and is expected to do so in 2018

30

After past few years of sluggish economic growth, Middle East is looking for partial recovery in 2018

GEOPOLITICS

ECONOMY

SHIFTING ORDER

FISCAL CONSOLIDATION

Jean-Marie Guehenno believes it is important to handle Middle East crisis with utmost care

34

Mohammed Bin Abdul Aziz Al Shehhi on how technology will be a game-changer in 2018

GEOPOLITICS

ECONOMY

TIGHT SPOT

SECURING FUTURE

Treating migrants with due respect is the need of the hour, feels Richard Danziger

4 TRENDS I THE YEARBOOK 2018

36

Why we need a streak of robust infrastructure investments, explains Leslie Maasdorp

COLLE CT ION

©Photograph: Laurent Ballesta/Gombessa Project

Fifty Fathoms

RAISE AWARENESS, TRANSMIT OUR PASSION, HELP PROTECT THE OCEAN www.blancpain-ocean-commitment.com

BEIJING · CANNES · DUBAI · GENEVA · HONG KONG · LAS VEGAS · LONDON · MACAU · MADRID MANAMA · MOSCOW · MUNICH · NEW YORK · PARIS · SEOUL · SHANGHAI · SINGAPORE · TAIPEI · TOKYO · Z U R IC H

YEARBOOK 2018

GCC

PARADIGM SHIFT Change will be the new normal for the GCC region as most of the industries are undergoing transformation at this moment

44

48

50

38

FINANCE

BANKING

AGAINST HEADWINDS

OPTIMISTIC OUTLOOK

Middle East’s financial landscape is changing fast as focus is on digital inclusion of all

52

GCC banks are up against fresh challenges posed by new regulations and technological disruptions

FINANCE

BANKING

GOING DIGITAL

MOVING FORWARD

Jorn Lambert on massive opportunities in this region that are beyond developed markets

57

Economic outlook of the MENA region is expected to improve, believes Mahmoud Mohieldin

FINANCE

BANKING

GOING STRONG

BUILDING UP

Essa Kazim on why DIFC is going sturdy despite fluctuating oil prices

6 TRENDS I THE YEARBOOK 2018

60

Ramesh Subramaniam on fintech’s broad spectrum and how it is changing traditional mediums

E-mail: editor@trendsmagazine.net Managing Editor: Alkesh Sharma a.sharma@mediaquestcorp.com Contributor: Gareth Smyth, Al Emid, Tim Kennedy Art Director: Jean-Christophe Nys Art Manager: Sandy Farah

72

ENERGY

GREEN FUTURE Energy landscape across the Middle East region is evolving fast with increased focus on renewables

Correspondents: London: Gerald Butt Beirut: Gareth Smyth New York: Aline Sara ADVERTISING Senior Business Development Manager: Marc Sleiman m.sleiman@mediaquestcorp.com +(971) 52 633 3378 Printers: U.A.E.: United Printing and Publishing (Abu Dhabi) N˚ Commission Paritaire 1201 K80 202 – N˚ ISSN 0983-1509 PUBLISHED BY Medialeader FZ A Mediaquest Company

TECHNOLOGY

EMBRACING DIGITAL 62

AI has taken the world by storm, and the Middle East is taking this phenomenon to a different level

ENERGY

GREENER TOMORROW 77

Suhail Muhammad Al-Mazroui on how UAE is setting green examples before others

TOURISM

UNABATED GROWTH 82

Increasing tourist footfall is giving the much-needed push to sagging economy

8 TRENDS I THE YEARBOOK 2018

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THE YEARBOOK 2018 I INFOGRAPHICS

The Arab World in Numbers Change will be the new normal for the Arab world in 2018, with corporate ecosystem undergoing paradigm shift to ensure its thriving survival. If on one side some countries in the region showed exemplary resilience to ďŹ ght odds and emerge as winners, others were mired in political and security turmoil. Here’s a look at some of the major highlights of the year gone by, along with projections for the months ahead.

10 TRENDS I THE YEARBOOK 2018

INFOGRAPHICS I THE YEARBOOK 2018

TRENDS I THE YEARBOOK 2018 11

THE YEARBOOK 2018 I INFOGRAPHICS

ECONOMIC OUTLOOK • GLOBAL OUTPUT TO GROW BY 3.6% IN 2018 • GROWTH FORECAST FOR 2018 IS 1.9% FOR ADVANCED ECONOMIES WHILE 4.8% FOR EMERGING AND DEVELOPING ECONOMIES

(Source – IMF)

• OUTPUT FOR MIDDLE EAST ESTIMATED TO GROW BY 3.3% IN 2018 • PROJECTIONS FOR SAUDI ARABIA IN 2018 ARE A GROWTH OF 1.1% • UAE‘S ECONOMIC GROWTH WILL ACCELERATE TO 4.4% IN 2018

GLOBAL TERRORISM INDEX 2017

TERRORISM • THE VAST MAJORITY OF TERRORISM OCCURS IN MIDDLE EAST AND NORTH AFRICA, SOUTH ASIA AND SUB-SAHARAN AFRICA REGIONS • COLLECTIVELY THESE REGIONS ACCOUNT FOR 84% OF ALL ATTACKS AND 94% OF DEATHS

RANKS • RANK 1 – IRAQ

• RANK 2 – AFGHANISTAN

• RANK 3 – NIGERIA

• RANK 4 – SYRIA

• RANK 5 – PAKISTAN

• RANK 6 – YEMEN

RANKS

GLOBAL PEACE INDEX 2017 • MOST PEACEFUL COUNTRIES

• LEAST PEACEFUL COUNTRIES • 58 – KUWAIT

ICELAND ......................

SYRIA ......................

NEW ZEALAND ............................

AFGHANISTAN ...............

• 65 – UAE

PORTUGAL .....................

IRAQ ...................

• 70 – OMAN

AUSTRIA ...................................

SOUTH SUDAN ..........

• 95 – JORDAN

DENMARK ......................

YEMEN ..............

• 2.14% DETERIORATION IN THE GLOBAL LEVEL OF PEACE IN LAST 10 YEARS

• 129 – IRAN • 131 – BAHRAIN • 133 – SAUDI ARABIA

• 93 COUNTRIES IMPROVED THEIR LEVELS OF PEACEFULNESS, THAN DETERIORATED • THE GLOBAL ECONOMIC IMPACT OF VIOLENCE WAS $14.3 TRILLION PPP IN 2016, EQUIVALENT TO 12.6% OF GLOBAL GDP

12 TRENDS I THE YEARBOOK 2018

• 148 – LEBENON • 161 – IRAQ • 163 - SYRIA

INFOGRAPHICS I THE YEARBOOK 2018

CYBER-SECURITY IN MIDDLE EAST

60%

43%

80%

• OVER 60% PROFESSIONALS SAY COMPANIES ILL-EQUIPPED TO COPE WITH CYBER-SECURITY INCIDENTS

• 43% SAY THEIR ORGANIZATIONS DO NOT PROVIDE ENOUGH PROFESSIONAL TRAINING TO HANDLE CYBER-SECURITY INCIDENTS

• 80% SAY THERE ARE NOT ENOUGH QUALIFIED PROFESSIONALS

TOP CONCERNS • DATA EXPOSURE

• HACKING

• CYBER TERRORISM

• RANSOM WARE

(Source: Global Information Security Workforce Study )

• IN THE UAE 83% OF RETAILERS BELIEVE E-COMMERCE WILL BRING FURTHER IMPROVEMENTS TO THE SHOPPING EXPERIENCE

83% • 87% OF UAE RETAILERS SAY THEY HAVE SEEN A POSITIVE IMPACT ON PRODUCTIVITY SINCE IMPLEMENTING NEW TECHNOLOGY SOLUTIONS

87%

• UAE E-COMMERCE SECTOR TO RISE TO AED 40BN IN 2018

40

BN

• 75% OF UAE RETAILERS ARE UNDER THE IMPRESSION THAT CUSTOMERS EXPECT TO RECEIVE THEIR ONLINE DELIVERIES EITHER THE NEXT DAY OR WITHIN 2-3 DAYS

75%

• RETAILERS IN THE UAE BELIEVE WAREHOUSE AUTOMATION (38%) AND ARTIFICIAL INTELLIGENCE (36%) WILL PLAY THE BIGGEST ROLE IN SHAPING THE FUTURE OF THEIR INDUSTRY

WA 38%

AI 36%

• 72% UAE RETAILERS BELIEVE THAT CUSTOMERS ARE WILLING TO PAY EXTRA FOR QUICKER DELIVERY

• 84% OF RETAILERS BELIEVE THEIR CUSTOMERS ARE SATISFIED WITH THE CURRENT DELIVERY OPTIONS

• 75% IN THE UAE STATE THEY CURRENTLY HAVE THE RIGHT TECHNOLOGY SOLUTIONS FOR AUTOMATION

75%

84% • IN THE GCC, THE E-COMMERCE MARKET IS SET TO QUADRUPLE TO REACH $20BN BY 2020

• THE E-COMMERCE SECTOR IS EXPECTED TO REACH $10 BILLION IN 2018 (COMPARED TO $2.5 BILLION IN 2014)

$40 in 2018 BN

72%

$40

$2.5

BN

in 2014

BN TRENDS I THE YEARBOOK 2018 13

(Source: Honeywell Survey in association with YouGov)

E-COMMERCE TRENDS IN UAE

THE YEARBOOK 2018 I INFOGRAPHICS

BUSINESS BENEFITS OF RIGHT TO DRIVE FOR WOMEN IN KSA

Key beneficiaries of the Royal Decree are the small and medium sized vehicle brands such as Toyota, Hyundai, Ford and Nissan 82% 60% 38% OF SAUDI WOMEN INTEND TO GET DRIVING LICENSE; DRIVING TO WORK AS THEIR PRIMARY MOTIVATION AND MALES ARE ENDORSING THIS CHANGE

• NON-PREMIUM, SMALL AND MEDIUM CAR SEGMENTS ARE MORE IN DEMAND

INTEND TO BUY A CAR IN NEXT 3 YEARS

PLAN TO BUY A CAR IN 2018

• TAXI AND UBER SERVICES WILL SEE DECLINING DEMAND FOR HIRED TRANSPORTATION

• ADDITIONAL BENEFIT TO RETAIL, ENTERTAINMENT, FOOD AND BEVERAGES SECTORS

WHAT WOMEN THINK OF THE DECISION?

61%

FEEL THAT THE SOCIETY IS PROGRESSING THE RIGHT WAY

55%

ADMIT THEY FEEL A SENSE OF EMPOWERMENT

WHY KSA WOMEN WANT TO DRIVE?

45%

39%

FOR GOING TO WORK

FOR DROPPING CHILDREN

46%

SEE THIS DECISION AS OPPORTUNITY FOR ENHANCED CAREER OPPORTUNITIES

17%

FOR SHOPPING MORE AND INDULGING IN MORE LEISURE ACTIVITIES

92%

OF INTENDING DRIVERS WILL REDUCE THEIR RELIANCE ON TAXIS AND SERVICES SUCH AS UBER

80%

TO REDUCE THEIR RELIANCE ON PERSONAL DRIVERS

14 TRENDS I THE YEARBOOK 2018

(Source: Kantar TNS report )

WHO MIGHT SUFFER?

INFOGRAPHICS I THE YEARBOOK 2018

SMART TRAVEL TRENDS IN GCC • 89% OF GCC TRAVELERS USE HOTEL MOBILE APPS • 75% BOOK THEIR ROOMS THROUGH A HOTEL APP • MOST TRAVELERS BOOK THEIR ROOM ONLINE, WITH 39% CHOOSING TO USE AN ONLINE TRAVEL AGENT, • 37% USE THE HOTEL’S WEBSITE • 27% USE THE HOTEL’S MOBILE APP • 20% STILL CALL THE HOTEL’S CONTACT CENTER OR EMAIL FOR QUERIES

HOW DO TRAVELS EVALUATE THEIR STAY?

31% BASE THEIR EXPERIENCE ON SMOOTH AND FAST CHECK-IN

15% LOOK FOR AN EASY-TO-USE APP

34%

44% WOULDN’T GIVE A HOTEL A SECOND CHANCE IN THE EVENT OF BAD SERVICE

37%

WOULD WRITE A NEGATIVE REVIEW ON A SITE SUCH AS TRIPADVISOR ( Source: The Customer Experience in Hospitality Survey, conducted with YouGov)

WOULD COMPLAIN TO THE HOTEL DIRECTLY AND TELL FRIENDS AND FAMILY ABOUT ANY ISSUES

FUTURE OF TRAVEL AND TOURISM IN MIDDLE EAST

By 2020 the Middle Travel and Tourism (T&T) Competitiveness East Region will Index Global Ranking 2017 • 29 – UAE • 60 – BAHRAIN • 63 – SAUDI ARABIA • 66 – OMAN • 74 - EGYPT • 96 – LEBENON • 100 – KUWAIT

(Source: World Economic Forum )

• ADD AIRPORT CAPACITY FOR 300 MILLION EXTRA PASSENGERS • BUILD OVER 200 NEW HOTELS • ADD 100,000 ADDITIONAL ROOMS • GROW VISITOR NUMBERS TO 150 MILLION • INCREASE THE SIZE OF THE AIRCRAFT FLEET BY OVER 150% BY 2025

TRENDS I THE YEARBOOK 2018 15

THE YEARBOOK 2018 I INFOGRAPHICS

FINANCIAL CRIME IN MIDDLE EAST IN 2017

What compliance executives, based in financial institutions across region have to say • 46% INDICATE A LACK OF CONFIDENCE IN THEIR FINANCIAL CRIME PROGRAMS

• 35% INDICATE A LACK OF UNDERSTANDING OF THE REGULATORY ENVIRONMENT

• 67% SAY THAT THEIR TECHNOLOGY HAS INCREASED IN SOPHISTICATION

46%

35%

67%

• 83% HAVE AN ANTI MONEY LAUNDERING (AML) PROGRAM IN PLACE

• 65% OF RESPONDENTS INDICATED THAT THEIR COMPLIANCE INVESTMENT HAD INCREASED OVER THE PAST 2 YEARS

83%

65%

2 YEARS

45%

• 63% INDICATED THAT THEY EXPECTED INVESTMENT TO CONTINUE TO INCREASE OVER NEXT 2 YEARS

63%

• 45% BELIEVE THAT JUSTIFYING OVERALL COSTS IS THE BIGGEST CHALLENGE OF PROGRAM MANAGEMENT

• 86% ARE CONCERNED ABOUT CYBER CRIME

86% 2 YEARS

FINANCIAL CRIME PROGRAMS THAT MIDDLE EAST COMPANIES HAVE IN PLACE ARE • ANTI-MONEY LAUNDERING • FINANCIAL CRIME PROGRAMS • BRIBERY AND CORRUPTION • SANCTIONS • COUNTER-TERRORISM FINANCING • FRAUD (INTERNAL AND EXTERNAL) • CYBER CRIME RISKS AREAS

14.81% SAY FAILURE TO LIVE UP TO CUSTOMER EXPECTATIONS

37.05% BELIEVE FAILURE TO MEET

12.96% SAY FAILURE TO TAKE PROPER

REGULATORY REQUIREMENTS

12.04% SAY THE ACT OF

19.44% FAILURE TO REACH

ACTION TO FIND RISK THAT IS HIDING IN YOUR DATABASE

UNWITTINGLY FACILITATING AN ILLEGAL ACT

BUSINESS OBJECTIVES

CONFIDENCE IN PREVENTION PROGRAMS 8.57% SAY THEY ARE NOT AT ALL CONFIDENT 10.48% NOT VERY CONFIDENT 41.9% VERY CONFIDENT 14.29% EXTREMELY CONFIDENT 16 TRENDS I THE YEARBOOK 2018

( Source – Deloitte report with Thomson Reuters)

INFOGRAPHICS I THE YEARBOOK 2018

AVIATION IN MIDDLE EAST IN NUMBERS • MIDDLE EAST PASSENGER NUMBERS TO GROW BY 7% IN 2018 • MIDDLE EAST AIRLINES WILL SEE NET PROFITS DOUBLING TO $600 MILLION IN 2018 • THE EMIRATES GROUP HAD A REVENUE OF AED49.4 BILLION ($13.5 BILLION) FOR THE FIRST SIX MONTHS OF ITS 2017-18 FINANCIAL YEAR • FLYDUBAI REPORTED LOSSES OF AED143.24 MILLION ON REVENUES OF AED2.5 BILLION FOR THE FIRST HALF OF 2017 • THE TOTAL VALUE OF 152 ACTIVE AVIATION-RELATED PROJECTS IN THE MIDDLE EAST REACHED AED211.8 BILLION BY APRIL 2017 • SAUDI ARABIA HAD LARGEST SHARE OF PROJECT VALUE AT 46% OF THE GCC’S TOTAL • UAE RANKED SECOND AT 26% • KUWAIT RANKED THIRD AT 12% • THE GULF REGION’S AVIATION PROJECTS ACCOUNTED FOR 72% OF THE TOTAL ESTIMATED VALUE FOR ALL AVIATION PROJECTS IN MENA • UAE’S EMIRATES IS THIRD BIGGEST CARGO CARRIER IN THE WORLD WITH 2.5 MILLION FREIGHT TONNES LIFTED IN 2016 • EMIRATES CARRIED 3.8 BILLION PASSENGERS ON SCHEDULED SERVICES IN 2016, REPRESENTING AN ADDITIONAL 242 MILLION AIR TRIPS FROM 2015 ( Source – International Air Transport Association)

STATISTICS OF THE ARABIC LANGUAGE

+300 MILLION ARABIC SPEAKRRS IN THE WORLD

2 ARABIC LANGUAGES: CLASSICAL ARABIC OR FURSHA, WHICH IS THE LANGUAGE OF THE QURAN, AND MODERN ARABIC AND ITS DIALECTS

AT LEAST 11 WORDS FOR LOVE AND EACH ONE OF THEM CONVEYS A DIFFERENT STAGE IN THE PROCESS OF FALLING IN LOVE!

DECEMBER 18

1 OF 6

185 MILLION

OFFICIAL LANGUAGES OF THE UNITED NATIONS (UN)

ARABIC SPEAKERS USE THE INTERNET; ALMOST 5% OF ALL INTERNET USERS WORLWIDE

IS UN ARABIC LANGUAGE DAY

( Source – The British Council - Internet World Stats) TRENDS I THE YEARBOOK 2018 17

THE YEARBOOK 2018 I INFOGRAPHICS

HIRING TRENDS IN UAE FOR 2018 • Expo 2020 WILL BRING NEW ROLES TO THE TRAVEL, TOURISM AND HOSPITALITY INDUSTRIES • SURGE IN DIGITAL INNOVATION AND TRANSFORMATION PROJECTS TO ADD NEW ROLES TOO • 47% OF BUSINESSES AGREE HAVING NEW DATA SYSTEMS, ANALYTICAL TOOLS AND TECHNICAL INFRASTRUCTURES • 94% OF ALL UAE BUSINESSES ARE SMES • 28% OF UAE BUSINESSES ARE PLANNING TO ADD NEW DIGITAL TRANSFORMATION ROLES • DUBAI CHAMBER OF COMMERCE HAVE SHOWN THAT 26,000 NEW BUSINESS LICENSES WERE APPROVED IN

2016 FOR SMES, AND OVER 100,000 WERE RENEWED ACCOUNTING AND FINANCE

87% of CFOs say it’s challenging to find skilled finance professionals MOST ROLES IN DEMAND • CHIEF FINANCIAL OFFICERS • TAX ACCOUNTANTS/MANAGERS • FINANCIAL PLANNING AND • ANALYSIS ANALYSTS • TREASURY DIRECTORS/MANAGERS FINANCIAL SERVICES

ROLES IN DEMAND • COMPLIANCE OFFICERS (AML/KYC) • MONEY-LAUNDERING REPORTING OFFICERS • TAX ACCOUNTANTS • M&A/INVESTMENT BANKING ASSOCIATES

TECHNOLOGY

ROLES IN DEMAND • PROGRAMME MANAGERS • BUSINESS ANALYSTS • APP SUPPORT DEVELOPERS

HUMAN RESOURCE AND OFFICE ADMINISTRATION

TOP FIVE IN-DEMAND FUNCTIONAL AREAS WITHIN OFFICE ADMINISTRATION

30% LOGISTIC SUPPORT 33% GENERAL SUPPORT 33% PROJECT ADMINISTRATIVE SUPPORT

ROLES IN DEMAND • HEADS OF HR • HR BUSINESS PARTNERS • EXECUTIVE/PERSONAL ASSISTANTS • OFFICE MANAGERS • RECEPTIONISTS 18 TRENDS I THE YEARBOOK 2018

( Source: Robert Half 2018 Salary )

35% HR ANALYSIS/ASSISTANCE 38% CUSTOMER SERVICE

INFOGRAPHICS I THE YEARBOOK 2018

SAUDI’S NEOM – THE CITY OF FUTURE ( Source: FOXBusiness report )

• “NEOM”, STEMS FROM SAUDI ARABIA’S VISION 2030 PLAN • WILL BE LOCATED ON THE COAST OF THE RED SEA • WILL SPAN MORE THAN 10,000 SQUARE MILES (26,500 SQUARE KILOMETERS) • WILL EXTEND ACROSS THE BORDERS OF EGYPT AND JORDAN, MAKING IT THE FIRST SPECIAL ECONOMIC ZONE TO SPAN THREE COUNTRIES • WILL FOCUS ON NINE SECTORS • WILL TAKE $500 BILLION TO BUILD • KLAUS KLEINFELD WILL LEAD THE DEVELOPMENT OF NEOM • WILL EMBODY ALL THE CHARACTERISTICS OF A FUTURISTIC CITY

KEY FIGURES FROM SAUDI ARABIA’S 2018 BUDGET, 2017 FISCAL DATA

Budget Deficit

Revenue

Funding and Debt

• 2018: DEFICIT SEEN AT 7.3% OF GDP

• OIL REVENUE TO RISE TO 492 BILLION RIYALS IN 2018 • NON-OIL REVENUE SEEN AT 291 BILLION RIYALS IN 2018 • TOTAL REVENUE TO RISE 12.6% IN 2018 • TAX REVENUE BUDGETED AT 142 BILLION RIYALS IN 2018 • VALUE-ADDED-TAX EXPECTED TO GENERATE 23 BILLION RIYALS IN 2018 • EXPATRIATE TAX TO GENERATE 28 BILLION RIYALS

• 2018: PUBLIC DEBT BUDGETED AT 21% OF GDP

• 2017: DEFICIT WAS 8.9% OF GDP • DELAYS TARGET TO BALANCE BUDGET TO 2023 FROM AS EARLY AS 2019

2023

• 2018 DEBT ISSUANCE TARGET IS 117 BILLION RIYALS, FROM 134 BILLION RIYALS IN 2017

• 2017: DEBT STOOD AT 17% OF GDP

• 2018: SPENDING TO GROW TO 978 BILLION RIYALS

2018 budget to be funded by

• 2017: ROSE 11.5% TO 926 BILLION RIYALS

• 50% FROM OIL REVENUE

• CAPITAL SPENDING TO INCREASE BY 13.6%

• 30% FROM NON-OIL REVENUE

Spending

• 12% FROM DEBT

• 210 BILLION RIYALS EARMARKED FOR MILITARY SPENDING • SPENDING ON HEALTHCARE TO RISE TO 147 BILLION RIYALS

GDP

• 8% FROM GOVERNMENT BALANCES

• 2017: OVERALL ECONOMY CONTRACTED 0.5% • 2018: ECONOMY TO GROW 2.7% AND NON-OIL ECONOMY TO EXPAND 3.7%

Inflation • 2018 INFLATION SEEN AT 5.7%

TRENDS I THE YEARBOOK 2018 19

( Source: Bloomberg )

• PROJECTED SPENDING OF 32 BILLION RIYALS ON CASH TRANSFER PROGRAM IN 2018

THE YEARBOOK 2018 I GEOPOLITICS

YEARBOOK 2016 I BANKING

20 TRENDS I THE YEARBOOK 2018

GEOPOLITICS I THE YEARBOOK 2018

Power Play at Display By Alkesh Sharma, Dubai

The Middle East is more tense than ever with the US’ disruptive policies and Saudi Arabia-Iran regional supremacy war turning bitter and polarizing Gulf states further. he year gone by was a tumultuous one for the Middle East region. If the Yemen and Syrian civil wars were not enough to strain relations among Arab nations and pit them against each other, Qatar blockade and Lebanon crisis further exposed the deep fault lines in the region. Even though the United States and Russia claimed victory over Islamic State and its complete ouster from Iraq and Syria, Kurds voted overwhelmingly to break away from Baghdad in the September referendum, alarming neighboring Turkey and Iran who have their own Kurdish minorities. Inconsistent policies of the US too added to the regional tension — the latest being President Donald Trump’s move to recognize Jerusalem as Israel’s

T

capital. Amid the turbulence, Russia silently and gradually increased its footprint across the region by way of arms and energy deals and smart diplomacy. If foreign affairs experts are to be believed, 2018 will be no different from the last year and the already tense Middle East may even see fresh set of conÁLFWV DPLG WKH 6DXGL ,UDQLDQ WHQVLRQ DQG Trump’s evolving incoherent policies. West bridging Gulf The US and its European allies are deeply concerned over Gulf nations’ rift with Qatar over its alleged funding to extremists and close ties with Iran. Saudi Arabia, the United Arab Emirates, Bahrain and Egypt continue to boycott Qatar, while Oman and Kuwait have taken a contrary stand. After the member

countries skipped the Gulf Cooperation Council’s (GCC) December summit in Kuwait and the UAE announced to set up a bilateral cooperation committee with Saudi Arabia, there’s a big question mark over the council’s future. Alarmed, the West has told the GCC members that the region remains stronger with them working together as a whole. A united GCC, founded in 1980, is the West’s best bet to act as a bulwark to reign in an expansionist Iran. The regional rivalry between Sunni Muslim Saudi Arabia and Shiite Islamist Iran is an open secret and is visible in the proxy wars in Yemen and Syria. With Saudi Crown Prince Mohammad bin Salman at the helm of affairs, Ri\DGK KDV DGRSWHG DQ ´LURQ ÀVWµ SROLF\ and taken the regional rivalry to next TRENDS I THE YEARBOOK 2018 21

THE YEARBOOK 2018 I GEOPOLITICS

Š Reuters

to “any dialogueâ€? and issued clearest denial of any Hezbollah role in Yemen. In the words of UAE’s Minister of State for Foreign Affairs Anwar Gargash, Lebanon must implement its poliF\ RI NHHSLQJ RXW RI :HVW $VLD FRQĂ LFWV in order to get out of its own crisis as well as regional troubles. For the time being, it seems Lebanon has managed to steer clear of becoming another Ă DVKSRLQW LQ WKH 0LGGOH (DVW UHJLRQ To soothe frayed nerves, Switzerland’s embassies in Riyadh and Tehran have signed agreements to represent Iranian interests in Saudi Arabia and Saudi interests in Iran. After the Middle Eastern rivals severed relations at the beginning of January 2016, both countries agreed to Switzerland’s offer RI LWV WUDGLWLRQDO SROLF\ RI JRRG RIĂ€FHV to “undertake a protecting power mandate on both sidesâ€?.

A Saudi-backed Islamic military coalition is providing logistical, intelligence and training support to the West African counter-terrorism force. level. Following the launch of a longrange ballistic missile by Houthi rebels toward Riyadh and the killing of former Yemeni President Ali Abdullah Saleh recently, Saudi Arabia has tightened their blockade on Yemen. The United Nations is investigating Iran’s possible transfer of ballistic missiles to Houthis. 1RZ /HEDQRQ WRR ÀQGV LWVHOI caught in the regional power struggle. In November, Lebanese Prime Minister Saad Hariri’s sudden announcement of resignation from Riyadh sent the region into further crisis. Hariri’s move was interpreted as a result of Saudi Arabia’s direct intervention in Lebanon and desire to create an opposition against Iran which backs Hezbollah. In 22 TRENDS I THE YEARBOOK 2018

his resignation speech, Hariri had attacked Iran along with Hezbollah for sowing strife in the Arab world. 7KH EUHDNWKURXJK ÀQDOO\ FDPH DIWHU Hariri met French President Emmanuel Macron, Egyptian coup leader and President Abdel-Fattah el-Sisi and visited Greek Cyprus. A stable Lebanon, which hosts 1.5 million Syrian refugees, is in WKH LQWHUHVW RI (XURSH ZKLFK ÀQGV LWVHOI divided over the refugee issue. Taking back his resignation and announcing his return to Beirut, Hariri stressed the importance of the Lebanese state policy of staying out of reJLRQDO FRQà LFWV QRWDEO\ <HPHQ ,Q D positive sign, Hezbollah leader Sayyed Hassan Nasrallah has said he is open

US’ disruptive policies Even before he was elected to the White House, Donald Trump had made it amply clear he was dead against the Iran nuclear deal. By opting for Riyadh in May for his maiden overseas visit as US President and striking an arms agreement worth over $350 billion with the Kingdom, Trump gave a glimpse into his “chaotic and disruptiveâ€? policies to come to check Iran in its track. “You will see us build a coalition to really push back against Iran and what they’re doing,â€? US Ambassador to the United Nations Nikki Haley recently said at the UN while presenting evidence of Iranian weapons supplied to the Houthi militia in Yemen. This new US’ Middle East policy of fueling Saudi Arabia’s ambitions and adopting a harder line toward Iran will only add to the regional supremacy war between the archrivals and lead to PRUH FRQĂ LFWV Trump’s latest irrational move of recognizing Jerusalem as the capital of Israel ignores the complexities of the ,VUDHOL 3DOHVWLQLDQ FRQĂ LFW 7KH 81

Security Council had in 1980 declared “null and voidâ€? the law passed by then Israeli Prime Minister Menachem Begin declaring Jerusalem the “complete and unitedâ€? capital of Israel. The decision has thrown the region further into quandary. In a hurriedly called summit at Istanbul on December 13, Organization of Islamic Cooperation’s (OIC) 50 member states unanimously condemned the move and called on the world to respond by recognizing East Jerusalem as the capital of Palestine. Enraged, OIC was unequivocal in admitting that the US under Trump had forfeited its role as a peace broker in efforts to end Israeli-Palestinian conĂ LFW -RUGDQ¡V .LQJ $EGXOODK ZKRVH Hashemite dynasty is custodian of Jerusalem’s Muslim sites, rejected any attempt to alter the status quo of Jerusalem and its holy sites. “From now on, it is out of the question for a biased United States to be a mediator between Israel and Palestine, that period is over. We need to discuss who will be a mediator from now on. This needs to be tackled in the UN tooâ€? Turkish President Tayyip Erdogan, who hosted the summit, said. Jerusalem is home to Islam’s third holiest site and has been at the heart of the ,VUDHOL 3DOHVWLQLDQ FRQĂ LFW IRU GHFDGHV ,VUDHO FDSWXUHG $UDE (DVW -HUXVDOHP LQ 1967 and later annexed it in an action not recognized internationally. Experts believe Trump should rather reinforce WKH ORQJ KHOG $UDE 3HDFH ,QLWLDWLYH XQder which Israel would be recognized WKURXJKRXW WKH $UDE ZRUOG LQ UHWXUQ IRU a Palestinian state in Gaza, the West Bank and East Jerusalem. Even though the Trump administration says it remains committed to reaching peace between Israel and the Palestinians and its decision does not affect Jerusalem’s future borders or status, the damage has been done. Trump’s misadventure has given Iran an opportunity to unite the Muslim world

Š Reuters

GEOPOLITICS I THE YEARBOOK 2018

Inconsistent policies of the US too added to the regional tension, the latest being President Trump’s move to recognize Jerusalem as Israel’s capital. to overcome internal problems through dialogue so it could unite against Israel. Tehran has repeatedly called for the destruction of the Israeli state and backs VHYHUDO PLOLWDQW JURXSV LQ WKHLU Ă€JKW against it. Political analysts believe the US decision deliberately undermines the previous peace efforts and will give impetus to extremism and terrorism, and threaten international peace and security. Turkey has warned that Trump’s declaration would plunge the world into “a Ă€UH ZLWK QR HQG LQ VLJKWÂľ IS’ loss Iran’s gain The US administration also has no real plans for Syria and Iraq in the

SRVW ,VODPLF 6WDWH HUD ZKHUH .XUGLVK forces, supported by the US air force, freed large swaths of land from the terror group and are now pressing for LQGHSHQGHQFH ,UDQ LV WKH PDLQ EHQHĂ€ciary of the territorial collapse of the IS caliphate. It is outmaneuvering the US through its proxies and allies in Baghdad, Damascus and Beirut. 3RVW .XUGLVK UHIHUHQGXP IDLOXUH Iran has strengthened some of the key sectarian militias inside Iraq with an DLP WR ZHDNHQ RU H[HUFLVH LQĂ XHQFH over areas that have been pro-West. Supported by the Iranian-backed Shia militias of the Hashd al-Shaabi, Iraqi security forces have pushed into many DUHDV KHOG E\ .XUGV 6KLD PLOLWLDV TRENDS I THE YEARBOOK 2018 23

THE YEARBOOK 2018 I GEOPOLITICS

Š Reuters

training support to West African counter-terrorism force, in its bid to check Tehran’s expansionist agenda. The $150 million grant to the G5 Sahel force, composed of the armies of Mali, Mauritania, Niger, Burkina Faso and Chad, is a sign that Gulf Arab states are upping WKHLU LQà XHQFH LQ WKH UHJLRQ

Amid the deepening chaos in the Middle East, Russia has silently increased its inuence by ďŹ lling the gaps left by the US. continue to consolidate around the city of Tal Afar and advance south along the border with Syria toward al-Qa’im. A concerned Rex Tillerson, US Secretary of State, was at the Saudi-Iraqi summit recently, in a hope to help pull Iraq out of Iran’s orbit. Trump’s Middle East policy is confusing geopolitical reality with rhetoric and optimism. His Riyadh summit to forge an alliance to isolate Tehran has failed terribly to contain Iran. “The US involvement has degenerated into a series of spasmodic and at best tactical moves and at worst unfocused rage against notional threats even as we resolutely fail to deal with the actual WKUHDWV WR RXU SRVLWLRQ DQG LQĂ XHQFH Âľ 24 TRENDS I THE YEARBOOK 2018

says Stephen Blank of the Conservative American Foreign Policy Council. The Sunni Muslim world is profoundly concerned about the seemingly unchecked advance of Iranian LQà XHQFH DFURVV WKH QRUWKHUQ WLHU RI the Middle East, from the Mediterranean to the Iraq border. To check Iran, Saudi Arabia is engaging with Iraq and seeking to build alliances with 6KLD ÀJXUHV LQFOXGLQJ 3ULPH 0LQLVWHU Haider al-Abadi and Muqtada al-Sadr. It has announced to open a consulate general in Najaf. A Saudi-backed Islamic military coalition, widely seen as a vehicle for counWHULQJ WKH JURZLQJ LQà XHQFH RI ,UDQ LV providing logistical, intelligence and

Russia steps in Amid the deepening chaos in the Middle East, Russia has silently increased LWV LQà XHQFH E\ ÀOOLQJ WKH JDSV OHIW E\ the US. Russian airpower has turned the tide of the Syrian civil war raging since 2011 in favor of President Bashar al-Assad, whose ouster had become a à DVKSRLQW LQ WKH ZRUOG DIIDLUV %\ ÀUPly standing beside Assad despite the strong opposition from the West, Putin has not only stamped his authority but also proved he is an all-weather reliable friend. The US and allies have now somehow accepted the fact that Assad will not be ousted, which is a major victory for Moscow. As the Syrian war is nearing its end, Russia is improving ties with predominantly Sunni Arab Gulf states. The whirlwind Middle Eastern tour of Russian President Vladimir Putin in December was evidence of Russia’s increasing footprint as a powerful and dependable partner in the Middle East. On a surprise visit to Syria, he declared victory against the Islamic State and reduction in Russian forces in the strife-torn country. Putin then met the Turkish President, their eighth meeting in 2017, and announced resumption of GLUHFW FRPPHUFLDO à LJKWV WR ,VWDQEXO There has been a dramatic improvement in relations between the two nations after they were soured by the assassination of the Russian ambassador in Turkey and shooting down of RusVLDQ ÀJKWHU MHW E\ 7XUNLVK IRUFHV WZR years ago. Putin’s next stop was in Cairo. He signed a nuclear plant deal worth $30 billion with Sisi and held discussion of

GEOPOLITICS I THE YEARBOOK 2018

possible agreement for the Russian air force to use Egyptian bases. Political analysts say in the wake of America rescinding from its traditional role in the Middle East, Russia clearly sees an opportunity to emerge as a key player in the region. And Putin’s outreach program is part of a well-thought out broader strategy, they add. By denouncing Trump’s Jerusalem move in Ankara, the Russian President cashed in on the opportunity and won many a friend in the region. Putin has shown a striking ability to transcend traditional dividing lines in the region and cultivate ties with rivals. Despite being on opposite sides RI WKH 6\ULDQ FRQĂ LFW DQG VKDUS GLIIHUences over Iran, Moscow has been able to strengthen its ties with Riyadh. Saudi Crown Prince Mohammed Bin Salman and King Salman bin Abdulaziz Al Saud’s visit to Moscow in quick succession would have been unthinkable two years ago. The two hydrocarbon producing giants have found the common ground in their cooperation on oil. Riyadh and Moscow have said they would do ´ZKDWHYHU LW WDNHVÂľ WR VWDELOL]H WKH RLO market. Until a year ago, Riyadh and Moscow had virtually no dialogue at all and both countries competed to secure deals. A 2017 Pew survey in the region found that 64 percent see Russia as PRUH LQĂ XHQWLDO LQ 0LGGOH (DVWHUQ DIfairs than compared to a decade ago. Damascus to Doha, Russian Defence Minister Sergei Shoigu has been showing up at unexpected places. Other areas of interest for the defence ministry have included Egypt, Sudan and Libya. Shoigu was involved in talks between Putin and Sudanese President Omar al-Bashir in Moscow last year and the ministry hosted Khalifa Haftar, Eastern Libya’s domLQDQW PLOLWDU\ Ă€JXUH DERDUG LWV VROH aircraft carrier recently.

2018 will be no different and Middle East may even see fresh set of conicts amid the Saudi-Iranian tension and Trump’s evolving incoherent policies. ´)RU WKH 5XVVLDQV LW¡V GHĂ€QLWHO\ FRQtinuing to project the image of a great power in the Middle East “They’re looking to create new contexts, to create new partnerships where they could EH VHHQ DV DQ LQĂ XHQWLDO DFWRU Âľ VD\V Yury Barmin, an expert on Russian relations in the Middle East. Future ahead New geopolitical equations are emerging fast in the Middle East region. Amid rising tension and uncertainties, experts believe, we are going to witness further polarization with Israel, Saudi Arabia and other Gulf states on one side and Iran, Hezbollah and its other subalterns on the other. Though Jerusalem remains

a sensitive issue and at the heart of the Muslim world, Saudi-led Gulf states will expand the framework of cooperation with Israel to weaken the common enemy Hezbollah in or outside Lebanon, and contain Iranian forces inside Syria. The new debate on “moderate and radiFDO ,VODPÂľ ZLOO DOVR NHHS WKH 0XVOLP world on tenterhooks. $ORQJVLGH WKH UHJLRQDO FRQĂ LFWV DQG tension brewing in the region, the US and Russia’s power play for greater inĂ XHQFH RQ WKH UHJLRQDO DIIDLUV ZLOO EH on display. With Washington’s abrupt and incoherent Middle East strategy putting it in an advantageous situation, Moscow will emerge as a greater regional player than ever. TRENDS I THE YEARBOOK 2018 25

THE YEARBOOK 2018 I INTERVIEW - GEOPOLITICS

Š Reuters

Jean-Marie Guehenno President and CEO, International Crisis Group

For a Peaceful World By Alkesh Sharma, Dubai

Jean-Marie Guehenno believes Syria is facing a major risk of a soft partition and it will be a terrible mistake in the long-run. f we talk about cities in terms of legitimacy and accountability, how feasible do you think it is to have these values in today’s world? It is easy to have these values at a city level because people of a city can clearly see whether the city delivers in terms of security and infrastructure or not. They have a concrete view of what is happening. But, achieving these values is more distant at a state level. So the proximity of a city helps a lot in terms of accountability and the leaders of the city can be legitimate because of the services they deliver.

I

So are you basically in favor of having more cities? 26 TRENDS I THE YEARBOOK 2018

Anyway people are moving toward cities, because today you create value through exchange and trade and you need cities as they are the hubs of the world. Talking about movement, currently you have more than 50 percent of the population of the world that lives in the cities and this trend will continue. How do you look at the Middle East region in this context? Cities here are emerging very fast and there is a lot of emphasis on smart cities too. I think it is very important for the Middle East to use its cities to connect to the rest of the world. The Middle East has been connected to the rest of world through

crisis and through oil. This image needs to be changed. The positive thing is that the region is very well located halfway between Asia and Europe, which is a major market and it is also closer to Africa. Now, Africa is a continent, which is the best example of gap between the best case scenario and the worst case scenario. Best case scenario is that there is a lot of potential in this continent. The world is going to need more food in coming years and Africa has the greatest preserve of land. So if the good case scenario in Africa develops, it will be the hub of growth and prosperity. So it is an advantage being closer to this region too. In short, Middle East is in the center of three major markets

GEOPOLITICS - INTERVIEW I THE YEARBOOK 2018

two of which are already very much developed and third has a great potential — so that’s Middle East for me.

According to you, what are the major crises that world is facing right now? Well, there is one crisis – the North Korea crisis. You have to put it up there (as number one) because any possibility of a nuclear war will be a very catastrophic event. Second is the humanitarian or refugee crisis in the Middle East region and third and an important one is a number of IHVWHULQJ FRQÁLFWV LQ $IULFD $QRWKHU RQH that needs attention is the Latin America crisis of weakening of the state that will make criminal economy entrenched. These are a few burning issues that can be seen as major crisis. How do you look at the Middle East crisis at this moment? See, when refugees’ issue came up after World War II, the idea of being a refugee was a very temporary one. But today if we see Palestinian crisis they have been refugees since decades now. This phenomenon has become a fundamental issue in our world today. What is important LV WKDW RQH VKRXOG QRW FRQÁDWH WKH LVVXH RI refugees and migrants. You have refugees ZKR DUH ÁHHLQJ FRQÁLFWV DQG WKHUH DUH migrants that are attracted to a different life, so it’s a complex issue. It is a movement of people due to war and movement of people due to lack of opportunities. And, I think both these issues are here to stay. The challenge is to manage it – it can be a big opportunity also. These

© Reuters

What is your view on the recent crisis in the city of Catalonia (Spain)? Was it handled properly? I don’t think that it was handled very properly. See, independence and justice status quo is not the right way to put across the question. I think there is a need for developing a different relationship between Catalonia and Spain and I hope that eventually there will be a practical negotiation that will allow for it.

“Extremism in Europe is largely the product of exclusion. Many of these extremists adapt a radical interpretation of Islam.” moving people can also be a problem for the country they are leaving and this problem needs to be addressed. For example if there is a really good doctor leaving an African country, while there are already very few doctors, it is a challenge for the country to retain the talent. What do you have to say about the ongoing Syrian crisis? We are working closely on the Syrian issue and we believe that the present risk in this entire crisis is that of a soft partition. And it will be a terrible mistake – Syria must remain one country, it is good that ZH VHH PRUH ORFDO FHDVHÀUHV QRZ 7KHUH should be a negotiation between local and global powers to control the situation.

Why are we having rising incidents of extremism in Europe? Well, I think extremism in Europe is largely the product of exclusion. These extremists adapt a radical interpretation of Islam and some of them don’t even have a direct or indirect connection with the Islamic world. They convert (their religion) as they see WKLV DV D MXVWLÀFDWLRQ RI WKHLU YLROHQW XUJH or behavior. I think the long-term answer to this problem is better urban policies so that there are no more suburbs that are left behind the mainstream society. Also better integration policies with the efforts of the state and local authorities can help. After all, a community is best integrated at a local level. TRENDS I THE YEARBOOK 2018 27

THE YEARBOOK 2018 I INTERVIEW - GEOPOLITICS

© AFP

Richard Danziger Regional Director, International Organization for Migration

Fleeing Conflicts By Alkesh Sharma, Dubai

Richard Danziger appeals people to treat migrants with respect as they can contribute toward economic development of the country they choose to migrate to. igration is one of the oldest practices; if some people are migrating in search of better avenues then there are few who are running away from crisis or GLIÀFXOW FLUFXPVWDQFHV ,I ZH ORRN DW WKH current migration trends, what are the challenges that this domain is facing? Migration is one of the major issues that are faced by the world at this time. People are on a constant move at any point of time across the world. You can understand the gravity of the situation by the fact that three percent of total worlds’ population is migrants. Now, there are a number of reasons for which people decide to migrate and leave

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28 TRENDS I THE YEARBOOK 2018

their countries. Some of these people DUH ÁHHLQJ FRQÁLFWV ZKLOH RWKHUV DUH looking for opportunities in their work and career, for example in Gulf, where most of the people come for good jobs and better incomes. There is also a movement of people in VRPH SDUWV RI WKH ZRUOG GXH WR FRQÁLFWV and even climate change. So, the issue is that how can we manage this movement, how to regulate and how to make sure things remain safe for both migrants and the society. From society, my meaning is WKH DFWXDO VRFLHW\ RI RULJLQ DQG WKH ÀQDO society of destination. In nutshell, the main challenge is to manage the whole migration process.

6R KRZ ZHOO DUH \RX PDQDJLQJ LW" ,V WKH situation under control or is it going out of bounds? When we see what is going on across the world, whether it is the people crossing the Mediterranean sea or what all is happening in some parts of the Middle East region, I would not say it is under control. No, it is not under control. It actually needs a concerted effort by governments, private sectors, civil society and even by the media all across the world. The effort should be toward reaching a amicable solution and creating a safe environment for migrants. If we look at the wider picture, obviously there is a lot of stigma associated with

GEOPOLITICS - INTERVIEW I THE YEARBOOK 2018

Some of the European countries were quite open for new migrants, coming from countries like Syria and Iraq, but of late things have changed drastically. How do you look at this changing scenario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Ă€FDQWO\ WR WKH ORFDO HFRQRPLHV DQG WKHLU H[SHUWLVH FDQ EH XVHG E\ WKH QDWLRQV WKH\ DUH PRYLQJ WR WR GHYHORS LQIUDVWUXFWXUH DQG ORFDO WDOHQW SRRO

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PLJUDQWV ,Q PDQ\ FDVHV SHRSOH ÀQG LW GLIÀFXOW WR FRQQHFW HPRWLRQDOO\ DQG psychologically with the new migrants. $OVR WKHUH DUH LVVXHV UHODWHG ZLWK FXOWXUDO PLQJOLQJ DQG WKHUH UHPDLQ FHUWDLQ JDSV 7KRXJK WKLV LV QRUPDO DV D VRFLHW\ EXW ZH FRQVLGHU LW DV DQRWKHU FKDOOHQJH , PXVW VD\ LQWHJUDWLQJ WKH PLJUDQW SRSXODWLRQ LQ the mainstream society always remain a ELJ WDVN

“Migrants can always contribute to local economies and their expertise can be used to develop infrastructure and local talent-pool.�

How do you look at the US approach toward migrants especially after Donald Trump came to power? ,I \RX ORRN DW WKH HYLGHQFH HYHQ WKH LUUHJXODU LPPLJUDQWV LQ WKH 86 SD\ PRUH WD[HV WKDQ ZKDW WKH\ DUH WDNLQJ DV VRFLDO EHQHĂ€WV OLNH HGXFDWLRQ KHDOWK DQG VR IRUWK 7KHUHIRUH WKHUH LV D QHW JDLQ IRU WKH 86 WR KDYH QXPEHU LPPLJUDQWV HVSHFLDOO\ 0H[LFDQ PLJUDQWV

VKRXOG HQMR\ WKH VDPH KXPDQ ULJKWV WKDW WKH QRUPDO FLWL]HQV RI WKH FRXQWU\ GR )RU WKH JRYHUQPHQWV DQG GHFLVLRQ PDNHUV , ZRXOG VD\ WKDW ZH DUH UHDG\ WR ZRUN WRJHWKHU :H MXVW QHHG WR ZRUN FROOHFWLYHO\ WRZDUG ÀQGLQJ VROXWLRQV IRU PLJUDWLRQ FULVLV :H PXVW FRPH XS ZLWK D IUDPHZRUN WKDW SURYLGHV D VDIH legal migration channel so that it is EHQHÀFLDO IRU ERWK WKH PLJUDQWV DQG WKH overall society.

Do you have any message from your organization about migrants that you would like to send? , ZRXOG OLNH WR XUJH HYHU\RQH WR WUHDW PLJUDQWV ZLWK GLJQLW\ DQG UHVSHFW 7KH\

Do you have any approximate global number of migrants, who are in the waiting list looking for a new home? ,W LV GLIĂ€FXOW WR WHOO WKH H[DFW QXPEHU SRWHQWLDO PLJUDQWV ZKR DUH FXUUHQWO\

RQ WKH ZDLWLQJ OLVW %XW WKHUH LV DQRWKHU LPSRUWDQW LVVXH UHODWHG ZLWK PLJUDQWV /LNH , OLYH LQ 6HQHJDO DQG LQ WKDW SDUW RI $IULFD D ORW RI \RXWKV DUH ORRNLQJ IRUZDUG WR PLJUDWH WR VRPH RWKHU GHYHORSHG FRXQWU\ LQ VHDUFK RI EHWWHU DYHQXHV RI OLIH 6R LQ VXFK FRXQWULHV WKH PDLQ FKDOOHQJH EHIRUH WKH ORFDO JRYHUQPHQW LV WR KHOS LWV \RXWK WR ÀQG DSSURSULDWH HPSOR\PHQW RSWLRQV VRFLDO VHFXULW\ DQG ZHOO EHLQJ WKDW ZRXOG NHHS WKHP LQ WKHLU KRPH FRXQWU\ ,Q IDFW LW VKRXOG EH WKH PDLQ JRDO RI WKH JRYHUQPHQWV WR PDNH VXUH WKH\ \RXWKV KDYH JRRG MREV DYDLODEOH LQVLGH WKHLU RZQ FRXQWULHV RWKHUZLVH WKH\ VKRXOG HQDEOH OHJDO FKDQQHOV RI PLJUDWLRQ IRU WKHP TRENDS I THE YEARBOOK 2018 29

THE YEARBOOK 2018 I ECONOMY

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30 TRENDS I THE YEARBOOK 2018

ECONOMY I THE YEARBOOK 2018

Growth Rebounds By Alkesh Sharma, Dubai

After past few years of sluggish economic growth, Middle East nations can expect recovery in 2018 as diversiямБcation plans and reformative measures ямБnally pay off. teadfast on the path of economic GLYHUVL├АFDWLRQ DQG VWUXFWXUDO UHIRUPV FRXQWULHV LQ WKH 0LGGOH (DVW DQG 1RUWK $IULFD 0(1$ VHHP WR KDYH ├АQDOO\ IRXQG WKH HTXLOLEULXP WR DGMXVW WR WKH ┬┤QHZ UHDOLW\┬╡ RI ORZHU RLO SULFHV 7KLV LV UH├БHFWHG LQ WKH MXVW UHOHDVHG RXWORRN IRU WKH UHJLRQ LQ E\ YDULRXV LQWHUQDWLRQDO RUJDQL]DWLRQV DQG DQDO\VWV $V SHU WKH ,QWHUQDWLRQDO 0RQHWDU\ )XQG ,0) WKH RYHUDOO JURZWK LQ WKH *XOI &RRSHUDWLRQ &RXQFLO *&& LV SURMHFWHG WR ERWWRP RXW DW DERXW SHUFHQW LQ ZKHUHDV LWV QRQ RLO JURZWK ZLOO SLFN XS WR SHUFHQW LQ 7KH (PLUDWHV 1%' 5HVHDUFK forecasts the UAE economy to expand SHUFHQW IURP SHUFHQW LQ 6DXGL $UDELD SHUFHQW 2PDQ DQG

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'H├АFLW VKULQNV 7KH (PLUDWHV 1%' 5HVHDUFK H[SHFWV WKH WRWDO EXGJHW GH├АFLW RI WKH *&& ZLOO EH DURXQG ELOOLRQ VHYHQ SHUFHQW RI WKH *'3 LQ DV FRPSDUHG WR ELOOLRQ ODVW ├АQDQFLDO \HDU RQ DFFRXQW RI VXVWDLQHG ├АVFDO FRQVROLGDWLRQ DQG UHIRUPV $V JOREDO LQWHUHVW UDWHV DUH IDYRUDEO\ ORZ D ODUJH SRUWLRQ RI WKH GH├АFLW LV H[SHFWHG WR EH ├АQDQFHG IURP LQWHUQDWLRQDO GHEW LVVXDQFHV WKHUHE\ HDVLQJ D OHQJWK\ IXQGLQJ VTXHH]H (FRQRPLF H[SHUWV DUH RI WKH YLHZ WKDW UHJLRQDO GHEW OHYHOV ZLOO FRQWLQXH WR IDOO WLOO LI JRYHUQPHQWV FDUHIXOO\ WDUJHW FXUUHQW H[SHQGLWXUHV WR VSXU VRFLDO VSHQGLQJ DQG SXEOLF LQYHVWPHQW WR PLWLJDWH WKH ORZ JURZWK IDOORXWV 7KH UHJLRQDO JRYHUQPHQWV KDYH DOVR GRQH ZHOO E\ KROGLQJ RQ WR WKHLU IRUHLJQ TRENDS I THE YEARBOOK 2018 31

THE YEARBOOK 2018 I ECONOMY

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Consolidated gross public foreign assets of the GCC countries, which peaked at $2.6 trillion in 2014, are likely to decline only to $2.3 trillion in 2017-18. DVVHWV DQG QRW XVLQJ WKHP WR PDNH XS IRU DQ\ VKRUWIDOO LQ RLO UHYHQXH $FFRUGLQJ WR ,QVWLWXWLRQ RI ,QWHUQDWLRQDO )LQDQFH FRQVROLGDWHG JURVV SXEOLF IRUHLJQ DVVHWV RI WKH *&& FRXQWULHV ZKLFK SHDNHG DW WULOOLRQ LQ DUH OLNHO\ WR GHFOLQH RQO\ WR WULOOLRQ LQ $OPRVW WZR WKLUGV RI WKHVH DVVHWV DUH PDQDJHG E\ VRYHUHLJQ ZHDOWK IXQGV ZLWK GLYHUVLÀHG SRUWIROLRV RI SXEOLF HTXLWLHV DQG À[HG LQFRPH VHFXULWLHV 6RYHUHLJQ ZHDOWK IXQGV DUH FXUUHQWO\ LQ a healthy position to attract more forHLJQ LQYHVWPHQW ´,PSURYHG FXUUHQW DFFRXQW SRVLWLRQV DV D UHVXOW RI UHSOHQLVKHG RLO UHVHUYHV ZLOO VXSSRUW LQYHVWPHQW LQ QRQ RLO 32 TRENDS I THE YEARBOOK 2018

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ECONOMY I THE YEARBOOK 2018

5HVLGHQWV KDG ORQJ HQMR\HG D WD[ IUHH DQG KHDYLO\ VXEVLGLVHG H[LVWHQFH ZKLFK LV GLIÀFXOW WR VXVWDLQ LQ WKH ZDNH RI SHUVLVWLQJ RLO PDUNHW YRODWLOLW\ DQG HURGLQJ FRIIHUV )XUWKHU KLNH LQ IXHO SULFHV VODVK LQ ZDWHU DQG SRZHU VXEVLGLHV DQG DXVWHULW\ PHDVXUHV VXFK DV ZDJH FXWV FDQ·W EH DYRLGHG PRYLQJ IRUZDUG DV JRYHUQPHQWV EDODQFH WKH ERRNV 7KH ,0) DOVR UHFRPPHQGV *XOI FRXQWULHV WR LQWURGXFH RU H[SDQG WD[HV RQ EXVLQHVV SURÀWV 3ULYDWL]DWLRQ GULYH $XWKRULWLHV DFURVV WKH UHJLRQ KDYH FRQGXFWHG GHWDLOHG YDOXDWLRQV DQG LGHQWLÀHG HQWLWLHV IRU D VHOO RII RU IRU SXUVXLQJ SXEOLF SULYDWH SDUWQHUVKLSV *RYHUQPHQWV LQ WKH UHJLRQV IXOO\ UHDOLVH IXWXUH JURZWK ZLOO EH HQVXUHG RQO\ LI WKH SULYDWH VHFWRU·V UROH H[SDQG FRQWLQXRXVO\ ,QWHUHVWLQJO\ 0RRG\·V ,QYHVWRUV 6HUYLFH SUHGLFWV D VWDEOH RXWORRN IRU *&& FRPSDQLHV LQ ZLWK PDQ\ RI WKHP ORRNLQJ WRZDUGV FRQVROLGDWLRQV DQG DFTXLVLWLRQV RXWVLGH WKH UHJLRQ WR ZDUG RII WKH ORZ JURZWK IDOORXWV DQG GZLQGOLQJ SURÀWV +RZHYHU WKH ,0) VWDWHV WKH *XOI UHJLRQ VKRXOG VSHHG XS IXQGLQJ WKH VPDOO DQG PHGLXP HQWHUSULVHV 60(V WR DGGUHVV WKH ULVLQJ SUREOHP RI XQHPSOR\PHQW UHVXOWLQJ IURP VXEGXHG JURZWK ÀJXUHV ´7KH JURZWK LQ *&& ZRXOG EH VWLOO QRW HQRXJK WR VLJQLÀFDQWO\ UHGXFH WKH SHUFHQW XQHPSOR\PHQW UDWH 7KH 60( VHFWRU DFFRXQWV IRU PRUH WKDQ SHUFHQW RI QHZ MREV LQ WKH UHJLRQ 8QIRUWXQDWHO\ WKLV VHFWRU LV IDFLQJ DFXWH VKRUWDJH RI IXQGLQJ %HVLGHV PDNLQJ EDQN ÀQDQFH DYDLODEOH JRYHUQPHQWV VKRXOG IDFLOLWDWH FDSLWDO ÁRZV LQWR WKH VHFWRU IURP RWKHU IXQGLQJ FKDQQHOV VXFK DV SULYDWH HTXLW\ µ VD\V -LKDG $]RXU 'LUHFWRU 0LGGOH (DVW ,0) +RZHYHU FRQFHUWHG HIIRUWV DUH RQ DFURVV WKH UHJLRQ WR HQVXUH OLTXLGLW\ IRU WKH SULYDWH VHFWRU 7KH FDSLWDO UDLVHG YLD LQLWLDO SXEOLF RIIHULQJV ,32V LQ WKH 0(1$ UHJLRQ UHDFKHG PLOOLRQ LQ WKH 4 D SHUFHQW LQFUHDVH RQ

Authorities across the region have conducted detailed valuations and identified entities for a sell-off or for pursuing public-private partnerships. 4 DFFRUGLQJ WR (UQVW <RXQJ D SURIHVVLRQDO VHUYLFHV ÀUP &DSLWDOV 0DUNHW $XWKRULW\ UHFHQWO\ ÁRDWHG D WHQGHU LQ RUGHU WR VHOO D VWDNH LQ WKH %RXUVD .XZDLW 6DXGL $UDELD KDV GHFODUHG LWV SODQ WR VHOO D VWDNH LQ 7DGDZXO ² WKH ELJJHVW ERXUVH LQ WKH *&& EDVHG RQ PDUNHW FDSLWDOL]DWLRQ 0XVFDW 6HFXULWLHV 0DUNHW WRR LV JRLQJ SULYDWH %HVLGHV 'XEDL 6WUDWHJLF 3ODQ ELJ WLFNHW SURMHFWV OLNH 'XEDL ([SR 9LVLRQ QDWLRQDO WUDQVIRUPDWLRQ SODQV DPRQJ RWKHUV SURPLVH WR VSXU SXEOLF VSHQGLQJ ERRVW LQIUDVWUXFWXUH DQG NHHS WKH SULYDWH VHFWRU WLFNLQJ 'HVSLWH WKH WHQVH JHRSROLWLFDO FOLPDWH LQ WKH 0LGGOH (DVW *&& QDWLRQV

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THE YEARBOOK 2018 I INTERVIEW - ECONOMY

Mohammed Bin Abdul Aziz Al Shehhi UAE’s Undersecretary for Economic Affairs

Sustainable Growth By Osama Al Ranna, Dubai

ArtiďŹ cial Intelligence (AI) will play a major role in nurturing a strong economy in the UAE in the coming months, says Mohammed Bin Abdul Aziz Al Shehhi. CC economies are facing a turbulent phase because of dwindling oil pricers. How would you GHĂ€QH WKH IXWXUH RI WKH HFRQRP\ in UAE? Will the market open up and should we expect good time in the coming months? To understand the future, let us go back to UAE Centennial 2071 that was launched by the Cabinet to make UAE the best country in the world by 2071. 8QGHU WKLV &HQWHQQLDO Ă€YH NH\ FULWHULD ZHUH GHFLGHG DQG WKH FRXQWU\¡V GHYHORSPHQW LV HYDOXDWHG RQ WKHP 2QH RI WKHVH criteria is economy. So, economy is like WKH PRVW LPSRUWDQW SLOODU IRU WKH VXFFHVV for any country.

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34 TRENDS I THE YEARBOOK 2018

1RZ ZKHQ ZH WDON DERXW D GHYHORSHG HFRQRP\ ZH KDYH WR ORRN DW YDULRXV RWKHU LPSRUWDQW WKLQJV OLNH GLJLWDO economy, green economy and economic GLYHUVLĂ€FDWLRQ $V IDU DV $UWLĂ€FLDO ,QWHOOLJHQFH $, LV FRQFHUQHG ZH WKLQN LW SOD\V D PDMRU UROH LQ GHYHORSLQJ D strong economy. Therefore, we, in the 0LQLVWU\ RI (FRQRP\ HPSKDVL]H WKDW RXU YLHZ RI HFRQRP\ VKRXOG FKDQJH FRPSOHWHO\ WRGD\ How do you think can we create more opportunities for the economy to flourish? New sectors, that contribute to our economy more than the current ones, must be

FUHDWHG WR NHHS XS ZLWK WKH IXWXUH +RZHYHU LQ WKH QHDU IXWXUH FRQWULEXWLRQ RI some sectors toward the economy, will EH PLQLPL]HG HVSHFLDOO\ WKH VHFWRU RI hydrocarbon but at the same time, new RQHV PXVW FRPH XS ,Q WKH 0LQLVWU\ RI (FRQRP\ ZH ZRUN FORVHO\ ZLWK WKH RIĂ€FH RI +LV +LJKQHVV Prime Minister of the UAE through 6PDUW 'XEDL RIĂ€FH DQG WKH )RXUWK ,QGXVWULDO 5HYROXWLRQ &RXQFLO LQ RUGHU WR NHHS XS ZLWK WKH WHFKQRORJLFDO GHYHORSPHQWV KDSSHQLQJ LQ WRGD\¡V ZRUOG Currently, we are taking on tremendous GHYHORSPHQWV LQ DUWLĂ€FLDO LQWHOOLJHQFH LQFOXGLQJ ' SULQWLQJ HVSHFLDOO\ LI ZH are thinking about construction sector.

ECONOMY - INTERVIEW I THE YEARBOOK 2018

:KDW , PHDQ E\ FRQVWUXFWLRQ VHFWRU LV WKH FRQVXOWDWLYH ODERU VHFWLRQ RI LW ZKHUH DUWLĂ€FLDO LQWHOOLJHQFH ZLOO SOD\ DQ essential role in enhancing the quantity and quality of work. 5HVXOWDQWO\ ZH ZLOO KDYH OHVV ODERU IRUFH ZLWK PRUH HIĂ€FLHQF\ $FFRUGLQJO\ DW 0LQLVWU\ RI (FRQRP\ ZH DUH NHHSLQJ XS ZLWK YLVLRQ ZKLFK ZH DUH DOPRVW GRQH ZLWK ,W LV DERXW PDNLQJ WKH country a Knowledge Economy, and this LV IURP ZKHUH ZH ZLOO MXPS WRZDUG WKH &HQWHQQLDO YLVLRQ SURMHFW $W WKH same time we need to make sure that ZH DUH GHFUHDVLQJ RXU GHSHQGHQF\ RQ RLO DQG DUH EHLQJ LQYROYHG LQ WKH GLJLWDO economy and green economy on a much wider scale. In UAE, there is a lot of empasis toward knowledge economy. How do you look at the journey toward becoming a knowledge economy? ,Q WKH NQRZOHGJH HFRQRP\ ZH ZLOO EH GHSHQGLQJ PRUH RQ LQQRYDWLRQ 7KLV LV WKH SDUW RI WKH LQWHUQDWLRQDO DJHQGD RI Ministry of Economy. We are closely ORRNLQJ LQWR WKH *OREDO ,QQRYDWLRQ ,Qdex and there are many factors associated with it including education, health, LQWHOOHFWXDO SURSHUW\ SDWHQWV HWF Though we are concerned about the LQWHOOHFWXDO SURSHUW\ IDFWRU EXW ZKHQ LW FRPHV WR NQRZOHGJH HFRQRP\ SDWHQW ZKLFK LV SDUW RI WKH LQWHOOHFWXDO SURSHUW\ ZLOO KDYH JUHDW FRQWULEXWLRQV WRZDUG WKH economy sector. They are the assets of DQ\ QDWLRQ DQG PRUH QXPEHU RI SDWHQWV PHDQV ZH DUH DQ LQQRYDWLYH FRXQWU\ Therefore we need to continue our efforts toward this direction. ,Q WKLV FRQWH[W KDYLQJ UHJLVWHUHG SDWHQWV UHJLVWHUHG LQVLGH 8$( LQGLFDWH \RX GR QRW GHSHQG RQ WKH WUDGLWLRQDO HFRQRP\ DV \RX LQQRYDWH DQG QHZ HFRQRP\ QHZ SRWHQWLDOLWLHV EDVHG RQ LQQRYDWLRQ DUH FUHDWHG DQG LPSOHPHQWed successfully. How can UAE cope with the global economic problems that have impacted

“When we talk about a developed economy, we have to look at various other important things like digital economy and economic diversiďŹ cation.â€? different parts of the world, especially Middle East region? , WKLQN DQVZHU WR WKLV TXHVWLRQ LV E\ IROORZLQJ GLYHUVLĂ€FDWLRQ ² ZH QHHG WR GLYHUVLI\ /HW PH WHOO \RX WKDW WKLV Ă XFWXDWLRQ WKH HFRQRPLF SUREOHP \RX DUH talking about, did not hit all sectors. We KDG SUREOHPV LQ RLO SULFHV ZKLFK DUH FXUUHQWO\ UHFRYHULQJ YHU\ ZHOO +RZHYHU DV , PHQWLRQHG HDUOLHU WKH PRUH sectors contribute in the economy, the OHVV ULVN UDWHV \RX KDYH $FFRUGLQJ WR this, we need more sectors to contribute WR WKH RYHUDOO JURZWK UDWKHU WKDQ IRFXVing on one or two of them. And for this UHDVRQ ZH ZLOO NHHS JRLQJ RQ DFFRUGLQJ WR WKLV DSSURDFK WLOO ZH KDYH ]HUR SHUFHQW contribution of oil in our GDP in 2050.

What are the sectors that would lead UAE economy in the future? :HOO WKH VHFWRUV WKDW ZLOO GULYH WKH growth of UAE in the coming years will EH WKH LQGXVWULDO VHFWRU ² WKH VRSKLVWLFDWHG LQGXVWULHV WR EH VSHFLĂ€F 2YHUDOO WKH LPSRUWDQW VHJPHQWV ZLOO UHPDLQ DUWLĂ€FLDO LQWHOOLJHQFH VHUYLFHV VHFWRU DQG tourism. We see the emergence of imPHQVH RSSRUWXQLWLHV RXW RI WKHVH VHFWRUV +RZHYHU DFFRUGLQJ WR WKH ODVW FDELQHW UHVKXIĂ H LQGXVWULDO VHFWRU ZDV PDGH WKH SDUW RI 0LQLVWU\ RI (QHUJ\ +RZHYHU , WKLQN ZH DUH GRLQJ EHWWHU WKDQ VWDWHV RI RWKHU UHJLRQV DV ZH KDYH EHWWHU infrastructure, as well as we are a knowledge-based economy and this makes a huge difference. TRENDS I THE YEARBOOK 2018 35

THE YEARBOOK 2018 I INTERVIEW - ECONOMY

Š Getty Images

Leslie Maasdorp VP and Chief Financial OfďŹ cer, New Development Bank

Eyeing Global Expansion By Alkesh Sharma, Dubai

We should focus on future prooďŹ ng the infrastructure investments so that it stays relevant for up to 50 years from now, says Leslie Maasdorp. hat is the primary focus of your bank while you decide about lending money to the customers? :H DUH DQ LQIUDVWUXFWXUH Ă€QDQFH LQVWLWXtion so we are mainly focused on building infrastructures - be it ports or roads or power or renewable energy and so on. But we are doing it on sustainability lenses. We are also focused on reducing carbon emissions in the economy and designing sustainable transport systems of the future. So it is not just about putting infrastructure in place, it is more about future SURRĂ€QJ WKLV LQIUDVWUXFWXUH SURYLQJ WKDW this infrastructure will be appropriate for the world, 50 years from now.

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36 TRENDS I THE YEARBOOK 2018

For example, if you build a road, you cannot build a road just for traditional FDUV ZKHQ WKH IXWXUH LV RI VHOI GULYLQJ FDUV 6R \RX KDYH WR GHVLJQ URDGV LQ D GLIIHUHQW PDQQHU <RX KDYH WR WDNH LQWR DFcount that people will use different types of mobility systems. This far-sightedness PDNHV LQIUDVWUXFWXUH IXWXUH SURRI DQG LQ today’s world where things are changing VR IDVW LW LV LPSHUDWLYH WR ORRN DW WKLQJV LQ this way. How important is it for you to have global partnerships? 6HH ZH XOWLPDWHO\ ZRUN OLNH PXOWL ODWHUDO EDQNV :H ZRUN DFURVV WKH VWDWHV DQG ZH DOVR ZRUN DFURVV WKH JRYHUQPHQWV

Currently, world is facing a lot of probOHPV DQG WKHUH DUH SUHYDLOLQJ DFURVV WKH VWDWHV OLNH WKH ORVV RI ELRGLYHUVLW\ RU FOLmate change, or problems related to refuJHHV DQG LPPLJUDWLRQ FULVLV :H KDYH WR understand that it is not only one country WKDW VKRXOG EH FRQFHUQHG EXW HYHU\RQH is affected because of these. 6R LW VKRXOG EH KDQGOHG RQ WKH OHYHO RI global collaborations. This is the reason why multi-literal solutions are important. Our problems are global in character and multilateral in nature so our solutions FDQQRW EH QDWLRQDO 7R VROYH WKH SUREOHPV RI WKH 8$( \RX KDYH WR ORRN DW WKH UHJLRQ 7KLV IDFW PDNHV LW DOO WKH PRUH LPSRUWDQW WR KDYH JOREDO FROODERUDWLRQV

ECONOMY - INTERVIEW I THE YEARBOOK 2018

Economic conditions are changing fast and if you look at current times some of the countries are in deeper economic crises when compared to the situation few years back. So has it, in any way, impacted your business? Well, the current economic condition is only one aspect of looking at the bigger picture. A bank like ours looks at a long term future so even if countries are going through economic crisis, we focus on the medium and the long term. This helps us to look at things very objectively and same is the situation with economies in some of the troubled countries. We need to look at long term and medium term solutions rather than short term. So I would not say that our business is b affected because of this. If we talk about BRICS, it constitutes 50 percent of global population and nearly one-third of the world GDP comes through it. It is undoubtedly a very strong position; how is it actually helping you? I come from South Africa that is a part RI WKH %5,&6 QHWZRUN 7KHVH ÀYH FRXQtries are currently building strong mechanics to collaborate among each other and create better future and better opportunities. Resultantly there are very strong investments and sanctions of trade à RZV %5,&6 LV MXVW WKH QXFOHXV WKH NH\ point is that BRICS will expand beyond ÀYH FRXQWULHV DQG WKLV LV DQ H[DPSOH RI emerging markets getting a voice in global affairs. So our bank is going to expand and include other countries as well. We have a wide expansion in mind in the coming years. Industry experts are looking at New Development Bank as an alternative away from US dollar-propelled economies. What is your viewpoint? We think that in order to develop local FDSLWDO PDUNHWV ZH KDYH WR DOVR ÀQDQFH the infrastructure projects in local currencies. You know, the US dollar is only RQH FXUUHQF\ LQ ZKLFK RQH FDQ ÀQDQFH

“Alongside the US dollar, we should also develop other currencies, so that they can also become currencies of the future.� large infrastructure projects, it is just one face. And in fact there are a lot of other aspects to it. For example, if you do business in India, you need Indian rupee and Indian capital markets should develop in this process. So our idea is that alongside the US dollar, we should also develop other currencies, so that they can also become currencies of the future. You are working in some very niche segments. Are you still facing any kind of competition from other banks? We don’t see ourselves competing against other banks. We work in a very complementary fashion and we have a very different focus. Because there is a

big infrastructure gap in various countries across the world, there is a massive need for infrastructure development and trillions of dollars are required at this PRPHQW WR IXOÀOO WKH GHPDQG And it is evident that current banks are QRW HQRXJK WR ÀOO WKLV KXJH JDS 7KHUHfore, we work together with these instituWLRQV , PHDQ RWKHU ÀQDQFLDO LQVWLWXWLRQV and this is the good way forward so that there is enough money and expertise to cater to the infrastructure sector. Another important thing is that for infrastructure to be future- ready, there has to be a collective effort. This completely eliminates the idea of competition. Yes, we strive for better, but we don’t compete. TRENDS I THE YEARBOOK 2018 37

THE YEARBOOK 2018 I GCC

© Getty Images

YEARBOOK 2016 I BANKING

38 TRENDS I THE YEARBOOK 2018

GCC I THE YEARBOOK 2018

GCC: Floating Ahead By Gareth Smyth, Riyadh

Change will be the new normal for the GCC region. Over the past few months, the region has undergone massive transformation, so is it time to reap dividends? old on tight. If 2017 was the liveliest year yet of the 21st century for the countries of the Gulf Cooperation Council (GCC), the pace of change is set to continue in 2018 and may increase. Nobody doubts Saudi Arabia’s Crown Prince Mohammed bin Salman — who in June led the GCC in demanding Qatar distance itself from Iran and Islamist groups, and who in November ODXQFKHG KLJK SURÀOH FRUUXSWLRQ DUrests shaking Saudi society — will in 2018 persist with robust foreign policies alongside efforts to create a dynamic, privatized economy laced with greater social freedoms and a streamlined political order. The month of June will see Saudi women driving, and Saudi cinemas

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ZLOO RSHQ LQ IRU WKH ÀUVW WLPH since the 1980s, a big push toward refurbishing the global image. John Travolta appeared on a Riyadh stage in December 2017: other stars will now follow. Gradually, GCC markets have absorbed many changes during 2017, while the OPEC production agreement, extended through 2018, should ensure stable oil prices after 10 percent-plus increases in 2017. With a falling dollar also offering D UHà DWLRQDU\ WDLOZLQG WKH ,QWHUQDtional Monetary Fund (IMF) predicts improved growth in 2018, with the United Arab Emirates up to 3.4 percent from 1.7 percent in 2017, Saudi Arabia up to 1.1 percent from 0.1 percent, Oman up to 3.7 percent from 0 percent , Qatar up to 3.1 percent from

2.5 percent, Kuwait up to 4.1 percent from 2.1 percent, and only Bahrain down from 2.5 percent to 1.7 percent. All sectors will need to innovate. Airlines faced a tough 2017, given slow economic growth. Washington’s travel restrictions and banning of on-board electronics led both Etihad and EmirDWHV WKH WZR 8$( FDUULHUV à \LQJ WR America, to reduce frequencies and routes (Emirates aims to restore US capacity by mid-2018). With a projected seven percent increase in demand for air travel in the Middle East in 2018, the International Air Transport Association (IATA) IRUHFDVWV D PLOOLRQ SURÀW IRU UHgional airlines, double the projected 2017 level while still below $1.3 billion in 2016. TRENDS I THE YEARBOOK 2018 39

Š Alamy

THE YEARBOOK 2018 I GCC

Given sluggish growth and political uncertainty, GCC stock markets in 2017 missed out on a strong year in both the US and emerging markets. Technological change will quicken after rapid developments in 2017. Saudi $UDELD LQ 2FWREHU PDUNHG D JOREDO ÀUVW by naturalizing a robot, Sophia, which was designed by Hong Kong-based Hanson Robotics. Even more ambitiously, Saudi Arabia announced plans for NEOM, a $500-billion city on its 5HG 6HD FRDVW EDVHG RQ DUWLÀFLDO LQWHOligence and renewables. Louvre Abu Dhabi, opened in November 2017 by French president Emmanuel Macron, will in 2018 exhibit Leonardo da Vinci’s Salvator Mundi, a portrait of Jesus, sold at New York record of $450.3 40 TRENDS I THE YEARBOOK 2018

million in November reportedly to the Saudi prince Badr bin Abdullah AlFarhan. The New Year also promises surprises in style, after Dubai in December KRVWHG WKH Ă€UVW Âś0RGHVW )DVKLRQ :HHN¡ itself following the central role of hijab in New York Fashion Week in October and Time magazine naming 16-year-old 6DXGL 5D\RXI $OKXPHGKL DPRQJ LWV Âś 0RVW ,QĂ XHQWLDO 7HHQV¡ DIWHU VKH GHVLJQHG Apple’s new headscarf-clad emoji. )LUP Ă€VFDO IRXQGDWLRQV Encouraged by the IMF, Gulf governments have long looked to diversity

from oil, and will not be diverted as oil prices’ recovery to around $60 a EDUUHO LPSURYHV ÀVFDO RXWORRNV :LWK WUDLO EOD]LQJ 'XEDL DQG ÀQDQFLDO powerhouse Abu Dhabi, the UAE – where hydrocarbons account for just 30 percent of GDP and 40 percent of exports – will continue to lead in diYHUVLÀFDWLRQ VAT will be quickly accepted in DV LWV EHQHÀWV ZLOO EHFRPH FOHDU in the UAE and Saudi Arabia after introduction on January 1. The tax was agreed in 2016 by the six GCC members, and Bahrain, Oman, Kuwait and Qatar have until January 2019 to follow suit. The UAE estimates VAT will generate $3.3 billion and Saudi Arabia $9.3 billion in 2018 alone.

The tax will encourage transparency, and better book-keeping will help SMEs (small and medium enterprises) UDLVH Ă€QDQFH $V *5 0HKWD IRUPHU chairman of the Institute of Chartered Accountants India, told a recent conference in Dubai, “[VAT] will clean up the anomalies in accounting, and create more transparency and international acceptance, rather than creating an image of tax heaven.â€? Fiscal reform is not just about VAT. The Saudi government, having set its largest-ever budget at $261 billion, has raised electricity tariffs as a step toward encouraging sustainability, diversifying government income and LPSURYLQJ HIĂ€FLHQF\ Saudi Aramco is also expected to amend some fuel prices in 2018. As highlighted in the Saudi National Transformation Program and Vision GLYHUVLĂ€FDWLRQ UHTXLUHV ERRVWing the private sector, enhancing public-private partnerships, reforming labor markets and attracting FDI. And Saudi Arabia’s leadership is very meticulously following its reformation path while achieving these aims. 6WURQJ ERQG LVVXHV Analysts expect 2018 to bring GCC bond issues, including sukuk or Islamic bonds, of $70-$90 billion after a record $85 billion in 2017 as governments continue to compensate for falling oil revenue (sovereign bonds were half the 2017 total, up from 12 percent in 2015). Governments will continue WR WDS FDSLWDO PDUNHWV WR IXQG GHĂ€FLWV — especially Saudi Arabia, Bahrain and Oman. Banks, corporations and sovereigns will also note that while interest rates are rising they remain at historically low levels. Hence issuers may lock in good rates ahead of expected hikes by the Federal Reserve in 2018 — given GCC nations excepting Kuwait peg their currencies to the dollar and follow the US Federal Reserve’s monetary policy.

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GCC I THE YEARBOOK 2018

As highlighted in the Vision 2030, diversiďŹ cation requires boosting the private sector, enhancing PPPs, reforming labor markets and attracting new FDI. %LJJHU UROH RI LQWHUQHW Worldwide active users of Facebook have increased from 360 million in 2009 to 2.07 billion today, but regional growth is even faster. Internet users in the Middle East and Africa active on Facebook will reach 58 percent in 2018, up from 41.9 percent in 2013. The UAE has 8.7 million Facebook users, Saudi Arabia 17 million, and Egypt 27 million. Of 800 million worldwide Instagram users, 63 million are in the Middle East. Just a few years ago, some argued social media heralded a new age of

citizen journalists and powerful consumers. But there is also a downside as billions surrender personal data, information on their preferences and trails of their on-line behavior. The problem of political extremism was highlighted at a recent meeting of the UAE Federal National Council by Saeed al-Remeithi of Abu Dhabi, who urged Awqaf, the Authority of Islamic Affairs and Endowments, to enhance counter-efforts on social media. œ)DNH QHZV¡ ZLOO FRQWLQXH LQ Reportedly 44 percent of Americans get their news from Facebook. A recent TRENDS I THE YEARBOOK 2018 41

© Reuters

THE YEARBOOK 2018 I GCC

2018 is expected to bring GCC bond issues of $70-$90 billion after $85 billion in 2017 as governments continue to compensate for falling oil revenue. survey, published in September, found Arabs are even more likely than Americans to get news from social media, and that younger Arabs are more likely to trust it than their elders. ( FRPPHUFH ERRP Internet growth opens business opportunities for e-commerce, a market expected to grow to $20 billion a year by 2020 and which could boost employment in a region where 30 percent of young people have no job. Headlines have been grabbed by Souq.com, acquired by Amazon in September for 42 TRENDS I THE YEARBOOK 2018

$580 million and which in December launched the American giant’s global store on its website and which plans to introduce other lines like Amazon prime and the Kindle e-reader. Not to be outdone when pipped over acquiring Souq, Mohamed Alabbar in September launched Noon.com with half the $1 billion seed money from the Saudi Public Investment Fund. The government’s Dubai Airport Freezone Authority (DAFZA) and Wasl Asset Management Group revealed in September the $735 million joint venture of Dubai CommerCity,

a 2.1-million sq-ft e-commerce free trade zone close to Dubai International Airport. This e-commerce’s need requires distribution as well as Internet access. Ronaldo Mouchawar, co-founder of the Souq, in September acquired Dubai logistics operator Wings.ae to help provide faster shipping, and sales subsequently doubled during Souq’s White Friday promotion on November 22, 2017. Also, don’t rule out a direct presence in Saudi Arabia in 2018 of Apple and Amazon, who now sell via third parties. Both have reportedly been in discussions with Riyadh, which is committed to easing regulatory limits on foreign ownership.

GCC I THE YEARBOOK 2018

%HWWHU \HDU IRU VWRFNV Given sluggish growth and political uncertainty, GCC stock markets in 2017 missed out on a strong year in both the US and emerging markets. Of the Gulf region’s seven main indexes only two – %DKUDLQ DQG .XZDLW ² Ă€QLVKHG LQ the black while Saudi Arabia ended the \HDU Ă DW 4DWDUL HTXLWLHV ZHUH ZRUVW RII losing 18.3 percent for the year, making it one of the world’s worst performers. Cautious recovery is expected in 2018 given better economic growth and improved oil prices. A Reuters poll in December of 13 leading Middle Eastern asset managers found that 54 percent expect to raise allocations to regional equities over the next three months and none to cut back, the most positive balance since August. The underlying potential of Tadawul, the Saudi bourse, was belied by a meagre 0.2 percent rise in 2017. With a huge market capitalization DQG D GLYHUVLĂ€HG OLVW RI LQGXVWU\ VHFtors attractive to international portfolio investors, Tadawul is widely expected to achieve a formal upgrade in 2018 from MSCI’s emerging markets index before an actual inclusion in 2019 that could in itself draw in about ELOOLRQ DFFRUGLQJ WR Ă€QDQFLDO analysts State Street. Amid Tadawul’s PRGHUQL]DWLRQ HIIRUWV D VKDUH Ă RDW LV expected in 2018, with Kuwait and Oman also planning privatizations of their bourses, while they have yet to agree timelines. 7RZDUG ,32V SULYDWL]DWLRQ Gregory Hughes, MENA IPO leader of Ernst & Young, gave an upbeat projection for 2018 in launching the consultants’ most recent report expecting “a number of premium government or partially government owned asVHWV Ă RDWHG RYHU WKH QH[W WZR \HDUV particularly in the energy-related sector.â€? Saudi IPOs in 2017 included the Musharaka Real Estate Investment Trust (REIT) at $95.1 million,

Internet growth opens business opportunities for e-commerce, a market expected to grow to $20 billion a year by 2020 and which could also boost employment. Zahrat Al Waha for Trading at $62 million and Al-Maather REIT at $49.7 million: next up is Saudi builder Dar Al-Arkan Real Estate Development Company, which has announced its plans to list 30 percent percent of a subsidiary. After a gap of two years, the Muscat Securities Market (MSM) in Oman witnessed two important IPOs in Q3 2017, Al Ahlia Insurance Company raising $19.5 million and Vision Insurance $10.4 million. 7KH ÀUVW .XZDLW OLVWLQJ RI LV H[pected to be Shamal Azzour Al-Oula.

Among IPOs expected in the UAE is Emirates Global Aluminum – no doubt encouraged by the combined $2.16 billion raised in the last quarter of 2017 by ADNOC in Abu Dhabi and Emaar Properties in Dubai. Dubai’s Union Properties has said it plans to à RDW VKDUHV LQ LWV IDFLOLWLHV PDQDJHment unit in the second half of the year. The really big one, however, set for the second half of the year 2018, and to be split between Saudi Arabia DQG DQ DV \HW XQVSHFLÀHG IRUHLJQ H[change, is the mooted IPO of around ÀYH SHUFHQW RI 6DXGL $UDPFR TRENDS I THE YEARBOOK 2018 43

THE YEARBOOK 2018 I FINANCE

YEARBOOK 2016 I BANKING

44 TRENDS I THE YEARBOOK 2018

FINANCE I THE YEARBOOK 2018

Financial e-Disruption By Alkesh Sharma, Dubai

The Middle East’s ďŹ nancial landscape is changing fast as technology shapes core business operations and brings sharp focus on digital inclusion and a cashless future. he digitally connected world has made the consumer the real king. With rapid technological advancement and innovation, the entire focus has shifted toward delivering services to consumers online in a secured way. 7KH Ă€QDQFLDO VHUYLFH LQGXVWU\ LV ZLWQHVVLQJ DQ XSKHDYDO ZLWK Ă€QWHFK VWDUWXSV gaining stronghold and challenging the traditional business models of established players like banks, stock exchanges and money transfer businesses. 7KH SDFH RI Ă€QWHFK LQQRYDWLRQ LQ the Middle East and North Africa (MENA), especially in the Gulf Cooperation Council (CCC), has been rapid over the past couple of years, primarily on the back of investors’ unmovLQJ FRQĂ€GHQFH LQ VWDUWXSV 7KH 0LGGOH East has amassed over $100 million in

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ÀQWHFK VWDUWXS IXQGLQJ LQ WKH SDVW WHQ \HDUV $V PDQ\ DV ÀQWHFK VWDUWXSV were launched in 2016 and at least $50 million of funding is expected to them by the end of 2017-18, up from $18 million in 2016-17, according to a report by Wamda Research Lab and Payfort. The ÀJXUH FRQVWLWXWHV D PLQXVFXOH VKDUH RI 0.1 percent of a burgeoning industry valued at $867 billion in 2016. However, with governments moving way from oil toward creating a knowlHGJH EDVHG GLJLWDO HFRQRP\ ÀQWHFK LV making inroads into the region at the pace comparable to the West and emerging as one of the world’s most innovative markets. Players such as peer-to-peer lending platform Beehive, challenger bank NOW Money, payments procesVRU 3D\)RUW DUH GLVUXSWLQJ WKH ÀQDQFLDO

services industry with particular focus on consumer-centric payments, ecommerce, banking, insurance and wealth management. Most of them operate through blockchain, a secure platform which ensures privacy, gives data access to select entities in a network and removes the risk of cyber thefts. “As technology is evolving, customers don’t want to visit bank branches, they H[SHFW WR FRQGXFW WKHLU Ă€QDQFLDO WUDQVDFtions on their computer or mobile. And processes are constantly evolving to capture that feedback and the expectations of customers,â€? says Mohsin Aikal, Head FRQVXPHU Ă€QDQFH 1RRU %DQN Cryptocurrency growth Cryptocurrency, or virtual currency, is one disruption that promises money TRENDS I THE YEARBOOK 2018 45

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THE YEARBOOK 2018 I FINANCE

Fintech can help boost ďŹ nancial inclusion by providing cheaper services to the common man and help in economic diversity and growth across the region. remitters in the Middle East with reduced service costs and is likely to LPSDFW WKH SURĂ€WDELOLW\ RI EDQNV E\ slashing money transfer fees and commissions, which currently constitutes one-quarter of their revenues. Bitcoin’s crazy run in December took the cryptocurrency market by storm. The world’s highest-valued cryptoasset started 2017 with $1,000 market value and ended the year at over $15,000, not before a mad rally saw it close to $20,000-mark in a matter of days. Since GCC accounts for a substantial proportion of global remittances, foreign exchange houses are excited about incorporating Bitcoin-enabling technology to cut costs. According to the World Bank, remittances to the MENA are expected to grow by 4.6 percent to $51 billion in 2017 and by 2.9 percent to $53 billion 46 TRENDS I THE YEARBOOK 2018

in 2018. Nearly $102 billion in outward remittances is made by the GCC expatriate population. The global average transfer cost was estimated at a hefty 7.2 percent in the third quarter of 2017 for a transfer of $200. And that’s ZKHUH Ă€QWHFK FRXOG EULQJ FRVWV GRZQ Bitcoin’s value lies in the fact that it removes middle men that heap extra costs on facilitators and customers. “Fees payable on Bitcoin transactions are around one to three percent. Our customers see it as a cheaper and easier alternative to traditional channels as they don’t have to pay fees at both ends,â€? says Ola Doudin, CEO, BitOasis, a Dubai-based startup which facilitates Bitcoin transactions across the MENA. The demand for cryptocurrencies will only increase. TheGCCcoin, the UHJLRQ¡V Ă€UVW JUHHQ FU\SWRFXUUHQF\

is being promoted to become a daily mode of payment, even for a cup of coffee! Exchange houses in the GCC are viewing Bitcoin as an important development. UAE Exchange invested in two blockchain-based companies, Loyyal and Bankchain, in 2017 and is in talks ZLWK RWKHUV ² D Ă€UP VWDWHPHQW RI LWV FRQĂ€GHQFH LQ WKH QDVFHQW WHFKQRORJ\ Regulators across the region are nurWXULQJ Ă€QWHFK LQIUDVWUXFWXUH Âľ +RQJ Kong’s Securities and Futures Commission has signed a pact with the Dubai Financial Services Authority to establish a framework for the two regulators WR KHOS HDFK RWKHU GHYHORS WKH Ă€QWHFK industry. Abu Dhabi Global Market creDWHG WKH UHJLRQ¡V Ă€UVW ´UHJXODWRU\ VDQGboxâ€?, allowing new products to be tested without full regulatory compliance. Bahrain and Qatar also launched its own regulatory sandbox programmes. The Central Bank of UAE has issued regulations relating to stored-value and electronic payments, payment operations, netting and settlement systems in order to facilitate robust adoption of digital payments across the UAE in a secure manner. Rise of aggregators As personal loans and easy credit dried up due to liquidity crunch, aggregator or comparison sites like Souqalmal stepped in and changed the perVRQDO Ă€QDQFH ODQGVFDSH LQ WKH UHJLRQ Aggregator websites allow consumers to make an informed decision by providing FRPSDULVRQV EHWZHHQ GLIIHUHQW Ă€QDQcial products such as credit cards, loans, mortgages and investment products. The comparison platform Souqalmal. com has raised 10 million in a disclosed deal in 2017. KPMG estimates there has been 60 to 80 percent increase annually LQ WKH QXPEHU RI Ă€QDQFLDO SURGXFWV EHing purchased through aggregators in the UAE market. “People in this region are waking up WR WKH EHQHĂ€WV RI FRPSDULQJ Ă€QDQFLDO products and beginning to realise that

FINANCE I THE YEARBOOK 2018

comparison sites really do save them money,â€? says Umair Hameed, Partner, KPMG’s management consulting business. Comparisons of products are forcing companies to compete more directly on rates and services. The Gulf region has a long way to go in adoption of comparison sites. In Europe, over half of insurance policies are bought through comparison websites, whereas that number is minimal here. But as the adoption increases, it will give the region’s smaller institutions a level-playing Ă€HOG WR FRPSHWH ZLWK ELJ QDPHV ZLWK IRcus solely on pricing and better services. Financial inclusion A large chunk of the population in the region is unbanked, but they all have the most powerful tool — smartphone. According to the McKinsey Middle East Digitisation Index, the UAE, Qatar, and Bahrain are among the top countries in the world with 100 percent smartphone penetration and there would be 160 million digital users by 2025 who could contribute up to 3.8 percent annually in GDP — amounting to approximately $95 billion. )LQWHFK FDQ KHOS ERRVW Ă€QDQFLDO LQclusion by providing tools and cheaper services to the common man and help in economic diversity and growth across WKH UHJLRQ )RU LQVWDQFH DUWLĂ€FLDO LQWHOOLJHQFH DOORZV Ă€QDQFLDO LQVWLWXWLRQV WR draw valuable insight from consumers’ data and improve their services. Utilizing data analytics, lenders could soon be calling customers to offer them products more tailored to their needs. “Fintech has become an innovative way to bridge the divide and provide cheaper services to the unbanked. Instead of following banks’ red-tape, it focuses on improving customer experience by giving them simple solutions. It has the ability to run lean customer-driven businesses and still leverage a bank’s processing, issuing and acceptance systems,â€? says Moussa Beidas, cofounder of Dubai-based startup Bridg, which allows

Cryptocurrency is one disruption that promises money remitters in the region with reduced service costs and is likely to impact the proďŹ tability of banks. smartphone-to-smartphone payments by using Bluetooth. Nearly 90 percent of retail transactions in the Middle East are made in cash and cheque. To become a cashless society, public-private partnerships will be required to create an inclusive economy and drive the socio-economic growth. For instance, in Egypt, Mastercard has successfully managed to digitize salary payments of over 4.6 million government employees and is working with the JRYHUQPHQW RQ WKH Ă€QDQFLDO LQFOXVLRQ of 54 million citizens (65 percent of the population) through a digital National ID program. “Every digital device has the potential to connect more people to formal Ă€QDQFLDO LQIUDVWUXFWXUH E\ EHFRPLQJ a commerce device. Breakthroughs in technology and innovation are

focused on developing a more inclusive, connected payments landscape,� says Timothy Murphy, Mastercard’s, FKLHI IUDQFKLVH RIÀFHU Abdulaziz Fahad Al Jouf, founder of PayTabs, a Saudi-based payment proFHVVLQJ VWDUWXS VD\V ÀQWHFK LV JURZLQJ at a breakneck speed year on year and fast becoming the Middle East’s new oil. The driver of this phenomenal growth is a burgeoning tech-savvy young population which is not reluctant to see their gadgets turn into commercial touch points. According to the Ericsson Mobility Report, 70 percent of people across the world will be smartphone users by 2020, and Asia, Africa and the Middle East will account for 80 percent of them. This provides a perfect launch pad for QHZ FRVW HIIHFWLYH ÀQWHFK VROXWLRQV DQG the growth of the sector. TRENDS I THE YEARBOOK 2018 47

THE YEARBOOK 2018 I INTERVIEW - FINANCE

Jorn Lambert Group Executive, Digital Channels in Emerging Payments, Mastercard

Beyond Payments By Alkesh Sharma, Dubai

Jorn Lambert says Mastercard aims at offering richer experiences and sees massive opportunities in this region that are beyond developed markets. hen it comes to evolving payment technology, how do you look at Middle East region? Today, consumer patterns are changing at a pace faster than what we have ever witnessed in the last 50 years. These rapid changes will cause a massive disruption, but this disruption is more of an opportunity than a threat. Although, every disruption comes with a threat, in the case of a digital disruption, this opportunity is more prominent and much bigger. Moreover, the opportunity is highly relevant here in the Middle East, as technology has given us a chance to reach consumers as well as PHUFKDQWV LQ DQ HIĂ€FLHQW PDQQHU ,Q WKLV

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48 TRENDS I THE YEARBOOK 2018

region in particular, we see innumerable opportunities compared to developed markets, with richer experiences and lesser chances of fraud. Our key goal is to include millions of people, who are currently in the cash economy, into a cashless economy that is based on electronic payment solutions. In the domain of payment technology, which major trends are ruling the industry? Tokenization is a key trend. Gradually, consumers will start making payments from all types of connected devices such as smartphones, smart watches and conQHFWHG FDUV ,Q WKLV FRQWH[W 0DVWHUFDUG

strongly believes that every connected device has the potential to become a commerce device, and as an industry we need to enable payments in a ‘secure’ way for WKH HQWLUH ,R7 LQWHUQHW RI WKLQJV ZRUOG )RU LQVWDQFH LI , SXW P\ FDUG QXPEHU LQ my car, in my watch or in my dishwasher, there is a possibility of a hacker getting in there and stealing all that important data. To make sure this doesn’t happen, Mastercard has invested in tokenization, which means that instead of your 16-digit number, a fake number goes into the phone and in that fake number we have integrated some very clever cryptography, which allows us to verify the authenticity of every transaction you make. This system is so secure that

FINANCE - INTERVIEW I THE YEARBOOK 2018

even if someone breaks into your phone, steals the data and makes a transaction, we ZLOO EH QRWLĂ€HG LPPHGLDWHO\ DQG WKH WUDQVaction will be declined. We expect to see around 30 billion tokens in the next three to Ă€YH \HDUV 7KH UHVSRQVH WR WRNHQL]DWLRQ KDV been immensely positive, and around 1,200 banks have enabled it including banks from the MENA region. How do you look at big data and AI disrupting your industry? %LJ GDWD DQG $, DUH PDMRU GLVUXSWLRQV WKDW the world and this region are witnessing at the moment. As our President and CEO $MD\ %DQJD SXW LW UHFHQWO\ DW DQ HYHQW data is the new ‘oil’, as it drives some of the world’s most successful companies. Now, more than ever, it is important to understand that the most valuable piece of data is ‘knowing what people buy’. Banks have not really monetized arWLĂ€FLDO LQWHOOLJHQFH DV PXFK WKH\ VKRXOG have. They utilize it for fraud detection or for credit scoring but they haven’t employed it to hyper-personalize consumer services. As an industry, we are investing KHDYLO\ LQ DUWLĂ€FLDO LQWHOOLJHQFH DQG ELJ data scoring so that our customers – the banks – can effectively cater to their clients’ needs as well as manage frauds. What is your take on shared economy? The concept of shared economy is fascinating, and it has blossomed over the last couple of years. Today, Uber and Airbnb are all over the world, along with many other successful sharing models in the market. There is shared economy around clothes, around bicycles, etc. So basically, the concept of shared economy has turned every consumer into a merchant. For us, a merchant in today’s world is someone who has a terminal and who undergoes all the processes that an acquirer does – but this doesn’t work in a shared economy. So, we have been doing a lot of work to see how are we going to adapt to the new economy model, and how to ensure that a consumer who pays can also receive money through same terminals.

“Opportunity is highly relevant in the Middle East, as technology has given us a chance to reach consumers as well as merchants in an efďŹ cient manner.â€? There are frictions along the path of online payment. How is Mastercard making it better? As an industry, there is a huge opportunity for us to bring frictionless payments to our customers. And the reason we have not been that successful so far is because we are putting existing processes into a new space rather than reinventing these processes. Today, many devices have biometrics and suitability, which combine both the convincing and security aspects, whereas in the past, devices had either of the two. The process for creating this frictionless payment does exist, but the challenge lies in deploying it for millions of merchants and making it available for

billions of consumers across the globe. Even though, inconsistency is an issue, we are seeing good progress. In your industry, what could be the potential hurdles in the path of data monetizing? Payments data faces many restrictions and in most geographies, you need consumers’ consent before accessing and using it. Technically we don’t have the data, but our clients do. We are in a consultancy mode as we work for banks, enabling them to make better use of their data. Another huge factor that needs attention is having better fraud analytics and detection systems. We are monetizing on constant basis in this direction. TRENDS I THE YEARBOOK 2018 49

THE YEARBOOK 2018 I INTERVIEW - FINANCE

© Reuters

Essa Kazim Chairman, DIFC

Promoting Inclusions By Alkesh Sharma, Dubai

Despite fluctuating oil prices, DIFC is going strong and managing to achieve its targets and KPIs, says Essa Kazim. verall market is not very favorable in the Middle East reJLRQ DQG PRVW RI WKH ÀQDQFLDO institutions are struggling to maintain the growth momentum. Despite these negative market sentiPHQWV 'XEDL ,QWHUQDWLRQDO )LQDQFLDO Centre (DIFC) is doing well and has registered some good numbers in the SDVW 6R ZKDW LV WKH VXFFHVV PDQWUD EHKLQG ',)&·V VXFFHVV" We are working very diligently to ensure growth and are taking care of all aspects in this direction. As a result, we have managed to achieve our KPIs (Key Performance Indicators) regularly. Our KPIs are in terms of the number

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50 TRENDS I THE YEARBOOK 2018

of companies that have been licensed, LQ WHUPV RI WKH QXPEHU RI RIÀFHV WKDW have been leased and in terms of employment (generation). There are three main criteria and KPIs that we are continuously monitoring and making sure that we achieve them without any fail. In fact, we are quite happy with the growth rate and we are determined to continue the same cycle of growth in the coming days. You mentioned about the KPIs. Are \RX KDSS\ ZLWK WKHP" Yes, we have been able to achieve them. Well, if you compare the numbers of the last three years (2015-17), the average

was like we were doing (licensing) 300 companies annually as opposed to 250 companies prior to 2014. 7KH UHJLRQ LV H[SHULHQFLQJ YRODWLOH RLO SULFHV WKH\ DUH JRLQJ XS DQG GRZQ LPSDFWLQJ YDULRXV LQGXVWULHV +DV LW LPSDFWHG ',)& LQ DQ\ ZD\" As I mentioned that after the drop in the oil price in 2014, we were averaging 300 companies (licensing) a year. This is compared to the period, prior to 2014, when oil prices were around 100 dollars per barrel. So the drop in the oil price did not affect us much and we kept growing because of better policies and HIÀFLHQW PHFKDQLVPV

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FINANCE - INTERVIEW I THE YEARBOOK 2018

Today most of the industries are talking about the Fourth Industrial Revolution DQG KRZ WKH QHZ WHFKQRORJ\ PDUYHOV DUH LPSDFWLQJ WKHLU EXVLQHVV :KHQ LW FRPHV WR ',)& KRZ KDYH \RX EHHQ EHQHÀWHG IURP WKH )RXUWK ,QGXVWULDO 5HYROXWLRQ" 3URPRWLQJ ÀQDQFLDO WHFKQRORJLHV LV KLJKO\ VLJQLÀFDQW IRU XV DQG ZH DUH SXWWLQJ VSHcial efforts in that direction. In fact, we will continue to support more usage of techQRORJ\ LQ WKH ÀQDQFLDO VHFWRU DQG WKHUHE\ HQKDQFH WKH HIÀFLHQF\ RI ÀQDQFLDO LQVWLWXtions in the country as well as in the wider region. Moving ahead, we also want to adopt and contribute toward the direction RI WKH ÀQDQFLDO LQFOXVLRQV LQ WKH UHJLRQ :H FRQVLGHU ÀQDQFLDO LQFOXVLRQ YHU\ LPSRUWDQW to ensure wholesome growth of the region. <RX KDYH ULJKWO\ VDLG WKDW ÀQDQFLDO LQFOXVLRQV DUH RQH RI WKH PRVW LPSRUWDQW

“We will continue to support more usage of technology in the ďŹ nancial sector and thereby enhance the efďŹ ciency of ďŹ nancial institutions in the country.â€? LVVXHV DW WKLV PRPHQW :KDW DUH \RXU H[SHFWDWLRQV RI WKHVH Ă€QDQFLDO LQFOXVLRQV LQ " I am sure that there will be more than two inclusions in the coming months, but I do not know whether they will be DFKLHYHG LQ WKH Ă€UVW TXDUWHU RI RU

after it. This is because it is not the DIFC’s decision to make. +RZHYHU , H[SHFW WKDW WKHVH QHZ ÀQDQcial inclusions will surely have a positive impact on the overall markets, because they will activate them. Therefore, we always encourage these inclusion practices.

$100 MILLION

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1750

A ďŹ ntech-focused fund, worth this amount, which will help to support ground-breaking ďŹ ntech ďŹ rms from incubation to growth stage.

DIFC’s 2024 Strategy envisions a thriving community of this number of professionals, active in various ďŹ elds, based in the Centre.

Currently, more than this number of active registered companies operate from the Centre, with a combined workforce of 21,628 people. TRENDS I THE YEARBOOK 2018 51

© Getty Images

THE YEARBOOK 2018 I BANKING

52 TRENDS I THE YEARBOOK 2018

BANKING I THE YEARBOOK 2018

Banking on Prudence By Alkesh Sharma, Dubai

Having withstood tightening liquidity and low profitability resolutely, GCC banks are up against fresh challenges posed by new regulations and technological disruptions. W ZDV PRUH DERXW ÀVFDO FRQVROLGDWLRQ WKDQ EHLQJ DGYHQWXURXV LQ IRU WKH EDQNLQJ VHFWRU LQ WKH *XOI &RRSHUDWLRQ &RXQFLO *&& ZKLFK KDV IHOW WKH ULSSOHV RI FRQWLQXHG ORZ RLO SULFHV PRVW 7KRXJK EDQNV ZDUGHG RII OLTXLGLW\ FRQFHUQV E\ NHHSLQJ FDSLWDO EXIIHUV LQWDFW DQG DGRSWLQJ PRUH VWULQJHQW OHQGLQJ FULWHULD WKH ORDQ JURZWK FRQWLQXHV WR EH VXEGXHG 7KH UHFHQW SROLF\ UDWH KLNHV E\ WKH *&& FHQWUDO EDQNV LQ UHVSRQVH WR EDVLV SRLQWV· LQFUHDVH LQ LQWHUHVW UDWHV E\ WKH 86 )HGHUDO 5HVHUYH ZLOO IXUWKHU LPSDFW ERUURZLQJ FRVWV 7KH 1HZ <HDU KDV UXQJ LQ IRU *XOI EDQNV ZLWK IUHVK FKDOOHQJHV ZLWK WKH LPSOHPHQWDWLRQ RI ,QWHUQDWLRQDO )LQDQFLDO 5HSRUWLQJ 6WDQGDUGV ,)56 DQG WKH 9DOXH $GGHG 7D[ 9$7

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Central banks and ministries of finance need to cooperate on exchanging information on projected government cash flows. PRQWK ,Q %DKUDLQ WRWDO GHSRVLWV GXULQJ WKH \HDU JUHZ RYHU ÀYH SHUFHQW WR ELOOLRQ ,Q 6DXGL $UDELD OLTXLGLW\ SUHVVXUHV KDYH HDVHG RZLQJ WR UHFRUG ERQG LVVXDQFH RI ELOOLRQ LQ .XZDLWL EDQNV WDSSHG WKH GHEW PDUNHWV WR UDLVH WLHU DQG WLHU %DVHO ,,, FRPSOLDQW IXQGV H[FHHGLQJ ELOOLRQ %HVLGHV EDQNV KDYH UH SULFHG WKHLU ORDQ ERRNV DQG DUH ZHOO SODFHG WR EHQHÀW IURP IXUWKHU LQWHUHVW UDWH XSV GXH WR KLJK OHYHOV RI QRQ UHPXQHUDWHG GHSRVLWV ´:H H[SHFW FDSLWDO OHYHOV WR EH ODUJHO\ XQFKDQJHG LQ GXH WR ORZHU ORDQ JURZWK 5DWLRV DUH DERYH LQWHUQDWLRQDO SHHUV EXW EXIIHUV DUH RQO\ DGHTXDWH JLYHQ KLJK FRQFHQWUDWLRQ VLQJOH ERUURZHU DQG VHFWRU DQG WKHUHIRUH HYHQW ULVN µ VD\V 5HGPRQG 5DPVGDOH DQ DQDO\VW ZLWK )LWFK 5DWLQJV 54 TRENDS I THE YEARBOOK 2018

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GCC banking sector has shown tremendous resilience in the face of emerging macroeconomics, evolving consumer behaviour and altering regulations. WKDQNV WR WKHLU FRQVHUYDWLYH DSSURDFK WR SURYLVLRQLQJ %DQNV DUH ZRUNLQJ FORVHO\ ZLWK WKHLU DXGLWRUV DQG FUHDWLQJ V\VWHPV WR PDNH VXUH WKH\ FDQ SOXJ GDWD JDSV WR PRGHO IRUZDUG ORRNLQJ ORVVHV 7KH &HQWUDO %DQN RI %DKUDLQ LV SUHSDULQJ WR LQWURGXFH ¶)$6 · UHJXODWLRQV ³ WKH ,VODPLF HTXLYDOHQW RI ,)65 ³ WR JRYHUQ FRUSRUDWH JRYHUQDQFH DQG VKDULD H[WHUQDO DXGLWLQJ %HVLGHV LPSOHPHQWDWLRQ RI %DVHO ,,, DQG WKH OLTXLGLW\ FDSLWDO UDWLR UXOHV ZLOO KDYH DQ LPSDFW RQ RYHUDOO OLTXLGLW\ 1HZ UHJXODWLRQV DUH JRLQJ WR PDNH WKH FRVW RI GRLQJ EXVLQHVV PRUH H[SHQVLYH LPSDFWLQJ WKH FUHGLW JURZWK IXUWKHU VWUHVV DQDO\VWV ,Q DGGLWLRQ WR WKLV *&& EDQNV KDYH PDGH KHFWLF SUHSDUDWLRQV IRU 9$7 WKH QHZ WD[ UHJLPH DQG UHDGLHG WKHLU FXV-

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BANKING - INTERVIEW I THE YEARBOOK 2018

Š AFP

Mahmoud Mohieldin Senior Vice President, The 2030 Development Agenda, World Bank Group

Overcoming Hurdles By Alkesh Sharma, Dubai

There are improvements expected in 2018 in the economic outlook of the MENA region and we are expecting the market to open up a bit, asserts Mahmoud Mohieldin. an you elaborate up on the economic outlook for 2018 for the Middle East and North Africa (MENA) region? I would like to mention here that we had a recent report on the region, which basically predicts that there is going to be a slight improvement in the economic growth in the region. However, there will be a requirement of more inclusiveness in that growth. This means that we need more of the growth that is associated with good and decent job creation opportunities. This is basically what this region requires at this moment. But to do this, we need some prerequisites to be considered and

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addressed. First is that we need to invest in human capital, health, quality education and good social protection schemes. Undoubtedly, this investment is the core basis of our economic growth. Second is the investment in infrastructure. Here the infrastructure is not just road networks or seaports or airports but LQYHVWPHQW LQ WKH LQWHUQHW LQ ÀEHU RSWLFV and in all of the associated technologies. Investing in these is as important as the road networks, airports and seaports for any economy. Third prerequisite is the investment in resilience. So, to sum up, three kinds of investments required for any kind of sustainable growth in the region are investments

in human capital and social security, in infrastructure and in resilience. Only then the desired outcomes will be apparent in the coming months. +RZ ZRXOG \RX GHĂ€QH WKH FRQFHSW RI investment in resilience? Why is it needed and how does it help economies in the region? Let me explain this with examples. See, countries around the world have been subject to a number of shocks and disturbances at regular intervals. From pandemics in Africa and Latin America, we are talking about Ebola and Zika, to the shocks because of what is happening in the neighboring countries TRENDS I THE YEARBOOK 2018 57

© AFP

THE YEARBOOK 2018 I INTERVIEW - BANKING

“We have to flow the funds to those who don’t have it and ingrain a tendency to save by making some behavioral changes and cultural changes.” after the disruption of several wars. We have to understand that the neighbor countries are affected by what happens in countries of geographical proximity and so we need to get ready for these kinds of shocks as well. And how can it be done – by investing in resilience. However, good part is that, we have seen all across the world that despite of all of these natural disasters and shocks, we have proved the resilience. Various economies and the countries across the world have fought against all odds. What I mean is that if we invest in resilience we will be in a better position to handle various troubles – be it natural disasters 58 TRENDS I THE YEARBOOK 2018

or war consequences. It is important to make this investment if we want to recover the losses. The banks in this region are facing the problem of liquidity crunch. How do you look at this hurdle and how drastic is it? The problem of liquidity crunch really depends on the kind of case we are talking about. If we go to the fundamental issue of concern, it is basically the lower saving rates in this region. Even in some countries with higher per capita income there isn’t really decent accommodation and mobilization

of national, domestic, public and private savings. I would say that some countries including some of the Gulf countries, did well in the investment through sovereign or wealth funds which have been mobilizing the sources. But in the other countries, including the non-oil countries, you will see a lower saving rate regardless of the per-capita income. This is because even if you see that the per capita income in other countries could be low or high, the receiving rates and the saving rates are higher than the region. We really need to reconsider some of the issues related to reforms on WKH ÀQDQFLDO VHFWRU :H KDYH WR ÁRZ WKH funds to those who don’t have it and ingrain an increased tendency to save by making some behavioral changes and cultural changes.

BANKING - INTERVIEW I THE YEARBOOK 2018

Then we have one in Egypt named (TXDO $FFHVV DQG 6LPSOLÀHG (QYLURQPHQW for Investment Project. The main aim of this project is to improve the regulatory environment for investors through simpliÀHG OLFHQVLQJ DQG WUDQVSDUHQW LQGXVWULDO land allocation processes. The project focuses on supporting cross-cutting reforms in the country that target constraints afIHFWLQJ ÀUPV LQ DOO VHFWRUV RI WKH HFRQRP\ It particularly works on reforms that promote transparency and predictability of the regulatory environment. The World Bank programs, although WKH\ DUH EDVLFDOO\ DERXW SURYLGLQJ Ànancial assistance, are more importantly about the technical assistance and the sharing of the knowledge and know-how too. We are also involved on various other levels too apart from just monetary help that we offer.

So there are a variety of matters here. Now this is how we look at the liquidity issue in a broader sense and in terms of long term future. But in the short term, liquidity issues require management changes and enhancing the capacity to mobilize funds from abroad including foreign direct investment and portfolio investment. You mentioned about reforms. So, how is World Bank contributing in this direction when it comes to MENA region? Do you currently have any projects in this region? If yes, can you elaborate? Well, World Bank has a variety of programs that we are funding or organizing with various countries in the region. Some of these are technical assistance programs. To mention some, we have capacity building programs like improving

tax systems or government systems that we are doing with countries in the region. We also have big projects including investments to the private sector arms or assisting in loans in all of the areas I mentioned. We have programs in education, infrastructure, renewable energy and more. We are working with different countries for different projects like we have one program in Morocco called Morocco - Identity and Targeting for Social Protection Project. The project’s objective is to expand coverage of a Unique Identifying Number (UIN) for the Moroccan population and foreign residents, and to improve targeting of Social Safety Nets (SSNs). The enhancement of identity and targeting systems will parWLFXODUO\ EHQHÀW ZRPHQ E\ IDFLOLWDWLQJ WKHLU DFFHVV WR VRFLDO DQG ÀQDQFLDO VHUYLFHV

How do you look at the banking sector globally in 2018? Will it be a comfortable journey ahead? :HOO , WKLQN WKDW WKH ÀQDQFLDO VHFWRU DURXQG the world has been learning from the expeULHQFH RI WKH UHFHQW ÀQDQFLDO FULVLV 'XH WR this, there is greater adherence to the regulations, as far as the micro and the macro prudential regulations are concerned. For example, having capital adequacy like having loan to value ratios and more will come to play as the lessons learnt and they will be implemented by various institutions across the world. However the kind of changes, growing competition and the disruption to the business including the increasing XVH RI DOWHUQDWLYH RSWLRQV VXFK DV ÀQDQcial intermediaries – will be another issue that all the banks will have to consider going forward. Overall the year will see changes, as most of the technologies in the industry will change too. It will be a conformable journey if we prepare ourselves and are ready to change with the changes that are happening around us. It is also LPSRUWDQW WR KDYH D GLYHUVLÀHG YLHZ RI changes and challenges. TRENDS I THE YEARBOOK 2018 59

THE YEARBOOK 2018 I INTERVIEW - BANKING

Ramesh Subramaniam Director General, Southeast Asia Department, Asian Development Bank

Road Ahead By Alkesh Sharma, Dubai

Fintech is a broad spectrum, and it will change the traditional means of ďŹ nancial intermediation rapidly, afďŹ rms Ramesh Subramaniam. hat would you say about the new technological concepts OLNH $UWLĂ€FLDO ,QWHOOLJHQFH 5RERWLFV DQG )RXUWK ,QGXVtrial Revolution? How have they affected banking sector? The Fourth Industrial Revolution, as a concept, has made it possible to bring a number of things together. In last couple of years it has helped increase awareness tremendously. ,I \RX ORRN DW WKH Ă€QDQFLDO VHUYLFHV industry, technology disruptions have been happening for many years now. For example the mobile revolution — that happened around ten years back and that had started changing the face of banking

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60 TRENDS I THE YEARBOOK 2018

sector globally back then. But now what the central banks as well as commercial EDQNV DUH ORRNLQJ DW LV KRZ FDQ ÀQDQFLDO intermediation be strengthened with the QHZHVW FRQFHSWV LQ WHFKQRORJ\ OLNH ÀQWHFK %XW , PXVW VD\ WKDW ÀQWHFK LV D EURDG spectrum. If you look at e-commerce for instance, the advancements have been made not only in the middle class segment of the society but also even the lower middle class is using the e-commerce. Now, there are concerns that the tradiWLRQDO PHDQV RI ÀQDQFLDO LQWHUPHGLDWLRQ will be changing rapidly. So we are quite heavily involved in all the developments that will change the face of banking industry in coming years. We work with

many countries in this context. But what Dubai and basically UAE has done with technological advancements is marvelous. UAE has really taken the lead. Even from the institutional point of view, what UAE has done on government level by KDYLQJ D GHGLFDWHG PLQVWHU IRU $UWLÀFLDO Intelligence, has set an example for the rest of the world. We have a lot to learn from UAE, I must say. What are the major challenges facing the banking sector globally? :HOO LI ZH ORRN DW ÀQWHFK WKHUH LV WKH Ànancial intermediation challenge that I mentioned. The challenge is that banks have to be quick and nimble in responding

BANKING - INTERVIEW I THE YEARBOOK 2018

to crisis and changes. For example if you look at e-commerce, and if they (banks) start offering a broader range of products, public might not need traditional banking any more. And this is true for all other sectors as well. So in that sense if commercial banks are slow to respond, if the regulators are rigid in terms of what and how the disruptive technologies change processes DURXQG XV LW ZLOO PDNH WKLQJV GLIÀFXOW Blockchains and bitcoins, along with $UWLÀFLDO ,QWHOOLJHQFH DQG WKH )RXUWK Industrial Revolution have also made a much deeper impact. Banks are much more than just banks today because of these technologies. So there are opportunities as well as threats. In terms of opportunities, this technological advancement has opened new venues for capital and for investment. But at the regulator side, of course, there is a whole range of issues that need to be looked at. How do you look at the Middle East region at this point of time when the market is not doing very well? Well, as the Asian Development Bank, we do not look at the Middle East region. This is not a region where we operate directly because our 68 member countries are outside the Middle East region. However, in terms of collaborations, when we look at segments like SULYDWH VHFWRU ÀQDQFLQJ WKHUH DUH FR ÀQDQFLQJ RSSRUWXQLWLHV WKDW ZH DOZD\V explore in the region. What are the current priorities of Asian Development Bank? We are a bank that has been in existence since last 50 years. Around 70 percent of lending by our bank has been in infrastructure, transport, energy and urban services. Then we also invest in food security, water security and education and so on. Moving ahead if you look at priorities, infrastructure will remain a top priority given that many FRXQWULHV VWLOO IDFH VLJQLÀFDQW QHHGV

“Blockchains, bitcoins, ArtiďŹ cial Intelligence and the Fourth Industrial Revolution have made a much deeper impact on the banking sector.â€? even large countries like China and India and also middle sized as well as smaller countries need a lot in terms of infrastructure. Climate change is also an important issue that we need to tackle both in adaptation and mitigation. How has your bank performed in the last few months? Well, as a development institution, we measure our performance in terms of development effectiveness. We have a very well laid out research framework, where we track the number of things

that are happening in the regional level as well as in countries and at the sector level and our contribution in it. For example, in transport we see how much the road access has improved and that decides how well we have performed. In the last one year, what we have done is that we are able to track electricity access with simple indicators like what is the number of people or the percentage of people who have an access to electricity. So these are the kind of things that we track and evaluate our performance upon. TRENDS I THE YEARBOOK 2018 61

THE YEARBOOK 2018 I TECHNOLOGY

© Getty Images

YEARBOOK 2016 I BANKING

62 TRENDS I THE YEARBOOK 2018

TECHNOLOGY I THE YEARBOOK 2018

Tech-Tonic Shift By Alkesh Sharma, Dubai

AI has taken the world by storm, and the Middle East countries especially the UAE, and Saudi Arabia, are taking this phenomenon to a different level altogether. UWLÀFLDO LQWHOOLJHQFH $, XQGLVSXWHGO\ WKH EHVW WHFKQRORJLFDO JLIW RI WKH GLJLWDO DJH WRJHWKHU ZLWK ,QWHUQHW RI 7KLQJV EORFNFKDLQ DQG GDWD DQDO\WLFV LV IXHOLQJ WKH )RXUWK ,QGXVWULDO 5HYROXWLRQ DURXQG WKH ZRUOG $QG WKH 0LGGOH (DVW DQG 1RUWK $IULFD QDWLRQV HVSHFLDOO\ WKRVH LQ WKH *XOI &RRSHUDWLRQ &RXQFLO *&& KDYH RFFXSLHG D SLRQHHULQJ SRVLWLRQ LQ XVKHULQJ LQ WKH $, GULYHQ IXWXUH 7KH :RUOG (FRQRPLF )RUXP KHOG LWV $QQXDO *OREDO )XWXUH &RXQFLOV· PHHWLQJ LQ 'XEDL LQ 1RYHPEHU ODVW \HDU WR GHYHORS VWUDWHJ\ IRU D WHFKQRORJ\ GRPLQDWHG IXWXUH (DUOLHU LQ 8$( &DELQHW $IIDLUV DQG )XWXUH 0LQLVWHU 0RKDPPHG $O *HUJDZL DQG :() ([HFXWLYH &KDLUPDQ .ODXV 6FKZDE XQYHLOHG D JURXQGEUHDNLQJ UHSRUW WLWOHG

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(DVW DQG $IULFD VWUHVVHV $, LV VHW WR KDYH WKH ELJJHVW WHFKQRORJLFDO LPSDFW RQ WKH RLO DQG JDV LQGXVWU\ RYHU WKH FRPLQJ \HDUV ,Q WKH 8$( DQG 6DXGL $UDELD EURXJKW WKH ZRUOG·V VSRWOLJKW RQ WKH UHJLRQ ZLWK WKHLU SDWK EUHDNLQJ $, LQLWLDWLYHV )RU LQVWDQFH WKH 8$( EHFDPH WKH ÀUVW FRXQWU\ WR SXW IRUWK D FOHDU FXW $, VWUDWHJ\ DQG FUHDWHG WKH 0LQLVWHU RI 6WDWH IRU $, ZKLOH 6DXGL $UDELD E\ JUDQWLQJ FLWL]HQVKLS WR DQ $, URERW WRR DQQRXQFHG LWV LQWHQWLRQ WR PDNH WKH PRVW RI WKH HPHUJLQJ ÀHOG 7KH 1HZ <HDU ZLOO VHH DUWLÀFLDO LQWHOOLJHQFH ³ ZKLFK UHIHUV WR D YDULHW\ RI WHFKQRORJLHV VXFK DV QDWXUDO ODQJXDJH SURFHVVLQJ QHXUDO QHWZRUNV DQG PDFKLQH OHDUQLQJ ³ EHFRPH WKH PDLQ HQJLQH RI JURZWK TRENDS I THE YEARBOOK 2018 63

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THE YEARBOOK 2018 I TECHNOLOGY

AI and robotics are reinventing the workforce and creating fears of replacing humans in the value chain, rendering many jobs redundant. “AI’s deep learning and robotic automation brings closer the possibility of ‘singularity’: the point at which machine thought supersedes human capability. With the rapid developments in machine learning, data mining and cognitive computing, the next decade promises to see huge leaps forward,� says Gerard Gallagher, Advisory Leader, EY (Africa, India and Middle East). UAE — the trendsetter Among all GCC nations, the UAE has the most ambitious plans to use AI tools and machine learning not only across all sectors but to develop new ones and create a new economy and a smart society. AI, deep learning, and cognitive 64 TRENDS I THE YEARBOOK 2018

computing are being excessively used LQ WKH ÀHOGV RI EDQNLQJ FXVWRPHU VHUvice, defense, healthcare, and so forth. ,Q D ÀUVW RI LWV NLQG H[SHULPHQW LQ WKH region, the UAE government’s Smart 'XEDL 2IÀFH KDV GHSOR\HG D PHWUH WDOO URERW UHFHSWLRQLVW )DUDK OLNH DQ\ other human being to welcome guests, alert employees for meeting and help with security screenings and payments. Dubai Electricity and Water Authority (DEWA) has announced the recruitPHQW RI ÀYH URERWV DV VWDII DV SDUW RI LWV &XVWRPHU +DSSLQHVV &HQWUHV ,WV RIÀFH LV WKH ÀUVW LQWHJUDWHG VPDUW FXVWRPHU happiness centre in Dubai which relies on AI and robotics to provide smart and innovative services to customers.

(DUOLHU LQ '(:$ ODXQFKHG D customer-service bot, built using components of Microsoft’s cloud-based cognitive services platform. Its virtual employee Rammas responds naturally to customer enquiries, through multiple languages and channels. DEWA LV WKH Ă€UVW JRYHUQPHQW RUJDQL]DWLRQ WR launch an online chatbot in both Arabic and English. Emirates airline has announced to GHYHORS D Ă HHW RI $, DXWRQRPRXV YHhicles to assist in airside operations. Vehicles will be completely powered by solar or electrical energy and imSURYH RSHUDWLRQDO HIĂ€FLHQF\ E\ SHUcent. Besides, the airline is using AI to transform cabin crew and develop solutions to “integrate the needsâ€? of Emirates passengers. Oracle has announced to open the UHJLRQ¡V Ă€UVW $, ODE E\ -DQXDU\ HQG LQ Dubai to complement the government’s focus on emerging technologies. “The lab will show the power of the technology to customers and industry solutions relevant to the region. There’s a long way to go as we currently use OHVV WKDQ SHUFHQW RI $, LQ WKH ZRUNspace. This (UAE) is a perfect country as we get all the support from the government,â€? says Arun Khehar, Senior Vice-President (Applications), Oracle Eastern Central Europe, Middle East and Africa. Saudis not far behind /LNHZLVH WKH .LQJGRP RI 6DXGL $UDELD LV PDNLQJ FRQFHUWHG HIIRUWV WR XWLOL]H DUWLĂ€FLDO LQWHOOLJHQFH WR JLYH D ELJ SXVK to its economy. While Riyadh’s decision to grant AI-powered robot Sophia FLWL]HQVKLS FUHDWHG ULSSOHV LWV SODQ WR develop a robot-run utopian megacity on the shores of the Red Sea has caught the world’s attention. 7RXWHG DV D ELOOLRQ WHFKQRORJLcal wonder, Neom — meaning ‘new future’ — will be bigger than Dubai and have a liberal international trade centre, a business hub with advanced

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TECHNOLOGY I THE YEARBOOK 2018

Scientists are now talking about “singularity”, creation of artificial superintelligence by 2030 where machines can think exactly like humans. WKH WHFK VDYY\ \RXQJ SRSXODWLRQ SHUFHQW RI WRWDO SRSXODFH LV XQGHU DFURVV WKH UHJLRQ FRXOG EHQHÀW VXEVWDQWLDOO\ IURP $, DQG YLUWXDO UHDOLW\ 7KH FRPELQHG UHYHQXH IRU WKH 95 DQG $5 VHJPHQWV DFFRUGLQJ WR ,QWHUQDWLRQDO 'DWD &RUSRUDWLRQ LV H[SHFWHG WR KLW ELOOLRQ E\ JOREDOO\ $, ZLOO DOVR GULYH WKH IXWXUH RI FORXG FRPSXWLQJ LQ WKH UHJLRQ $ UHFHQW 2UDFOH +DUYDUG %XVLQHVV 5HYLHZ 6WXG\ VKRZV SHUFHQW RI EXVLQHVVHV LQ WKH *&& FRQVLGHU 9$7 GHSOR\PHQW IURP -DQXDU\ DV D WLSSLQJ SRLQW WR WKH FORXG DQG GLJLWDO WUDQVIRUPDWLRQ SURMHFWV ZLWKLQ WKHLU RUJDQL]DWLRQV 1HDUO\ D WKLUG RI FORXG XVHUV FLWH WKH LQFOXVLRQ RI $, DV D NH\ UHTXLUHPHQW RI FORXG

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THE YEARBOOK 2018 I TECHNOLOGY

Estimated to be worth $66 million in 2017-18, the region’s AI market is expected to grow to a whopping $250 million by 2025. DUWLÀFLDO LQWHOOLJHQFH PDUNHWSODFH WKDW FDQ DFW DV D EULGJH EHWZHHQ $, GHYHORSHUV DQG EXVLQHVV XVHUV $W SUHVHQW PDMRU FRUSRUDWLRQV VXFK DV *RRJOH RU )DFHERRN VHOO $, SDFNDJHV DQG DQG WKHUH·V QR GLVFRYHUDELOLW\ IRU $, LQYHQWRUV ´6LQJXODULW\1(7 LV RQH VXFK EORFNFKDLQ IDFLOLWDWHG V\VWHP ZKLFK GHPRFUDWL]HV WKH $, ODQGVFDSH DQG HQDEOHV VPDOO EXVLQHVV RZQHUV WR EUDQG PDQDJHUV DQG HYHU\ERG\ WR FRQQHFW ZLWK $,V DQG $, GHYHORSHUV IRU QLFKH VROXWLRQV µ VD\V 6LQJXODULW\1(7 &(2 %HQ *RHUW]HO Automated future ,Q DQ HYHU LQFUHDVLQJ LQWHUFRQQHFWHG ZRUOG DQG SODWIRUPV OLNH 6LQJXODULW\1HW $, PDFKLQHV LQWHUHVWLQJO\ FDQ 66 TRENDS I THE YEARBOOK 2018

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TECHNOLOGY - INTERVIEW I THE YEARBOOK 2018

Omar bin Sultan Al Olama Minister of State for ArtiďŹ cial Intelligence, UAE

Revolution Awaits By Osama Al Ranna & Alkesh Sharma, Dubai

UAE aspires to become a pioneer in programming and using ArtiďŹ cial Intelligence solutions in a positive way, says Omar Bin Sultan Al Olama. KDW UROH GRHV $UWLĂ€FLDO ,QWHOOLJHQFH $, SOD\ LQ YDULRXV HFRQRPLHV" +RZ KDV LW VSHFLĂ€FDOO\ KHOSHG WKH 8$(" AI plays a major role in all economies and UAE is not an exception. If we want to trace its effect on the economics, I will give you a small example, and you can apply the same formula of evaluating the effects on other sectors. If we look at the stock exchange in the US, for example, ZH ZLOO Ă€QG $, V\VWHPV DUH FOHDUO\ OHDGing it. It is a simple thing there, but the output on the economy is tremendous, as well as on the individual using this technology — it is making a difference at all levels. In UAE, we aspire to become a

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pioneer in programming and using AI in a positive way. In the next 20 or 30 years, size of this industry will be worth trillions of dollars. Consequently, if we will ZRUN WRZDUG KDYLQJ D VWDNH LQ WKLV ÀHOG HYHQ D VPDOO RQH LW ZLOO KDYH D VLJQLÀFDQW impact on the economy. $UH WKHUH DQ\ VSHFLÀF QXPEHUV WKDW \RX FDQ VKDUH — LQ WHUPV RI VSHQGLQJ LQ $, WKDW 8$( LV GRLQJ" We should not look at spending in such a way, I mean from volume or allocations point of view. Programming is a language, and AI is based on this language. When you teach the entire population the programming language and AI in that

manner, people will establish corporations and develop the systems, not only to reach the level of developing the economy, but to the level of changing the future of the nations entirely. For example we launched a project named — One Million Young Arab Coders, in which we did not just focus on the UAE, we rather invited the entire Arab World for it. With this project, one million individuals will master programming and we will resultantly see a rise in the number of individual experts in programming in AI. This way, we will have DQ HQWLUH \RXQJ JHQHUDWLRQ TXDOLÀHG LQ WKLV ÀHOG 7KLV LV RXU JRDO WR GHYHORS WKH whole region not just UAE exclusively. TRENDS I THE YEARBOOK 2018 67

THE YEARBOOK 2018 I INTERVIEW - TECHNOLOGY

“Currently there is no one who can claim understanding the intrinsic nature of AI 100 percent, as everybody is still searching and learning this ďŹ eld. In your view, how can the Arab world XWLOL]H LWV \RXWK LQ WKLV Ă€HOG RI $, HVSHFLDOO\ ZKHQ SHUFHQW RI WKH $UDE ZRUOG SRSXODWLRQ LV WKDW RI \RXQJVWHUV" Well, this chance is not exclusive to the Arab World; rather it is a global one, as 50 percent of world population is less than 30 years and hence very young. We need to adapt ourselves to this fact and work on it. Youth is an opportunity that has to be utilized appropriately. From my own experience, youngsters needs two things — Ă€UVW LV HPSRZHUPHQW DQG VHFRQG LV opportunity to nourish their talents. They need a platform to express themselves, whether it is through work or education. Originally, youths are unskilled and we need to give them the basic information 68 TRENDS I THE YEARBOOK 2018

or training, such as language skills, basic training etc. so that they can proceed with developing themselves and inventing wonderful things. The Arab World has various initiatives focusing on empowering the youth. For example the One Million Young Arab Coders initiative aims to teach programming systems to one million individual in the Arab World and this will create more than 20 million jobs. In a nutshell, Arab youth today has better future. Not long ago, who could think that a 25 or 27-year-old young man could be appointed as a minister, or a 22-year-old young lady could be a minister too. This proves that youth has been empowered and has a gigantic role in the governments and work environment in

general. In this context, let us have a look at the best international corporations; such as Facebook, and Snapchat, and other big ÀUPV ZKLFK ZHUH HVWDEOLVKHG E\ WR 25-year-old young individuals. Therefore I think the opportunities are available, but they (youths) have to be empowered to speak language of the future, which is the programming language. 'R \RX WKLQN FRPSDQLHV DUH UHDG\ IRU WKLV LQà X[ RI WUDLQHG SHRSOH" I would say that this issue is also applicable to big corporations, which have to evolve, as who does not keep up with the AI will be driven out of the market. Let us remember Kodak — it was one of the largest corporations in the world, where is it today? It vanished as it did not keep up with the technological evolutions. In the same context, this is also applicable to the governments across the world,

TECHNOLOGY - INTERVIEW I THE YEARBOOK 2018

who have to develop their works and performances to keep up with current developments, and adapt to these variables including AI solutions. How do you look at the future of AI in the region? As far as AI is concerned, we are still in the beginning, as there are legislations applied in all countries. For example, nuclear energy has strong legislations in all countries. I expect seeing an organization for AI governance in the near future; PD\ EH LQ WKH QH[W ÀYH RU WHQ \HDUV 6HH AI has tremendous economic impact, as well as big positive effect on the states. I would like to raise a very important point here that currently there is no one who can claim understanding the intrinsic nature of AI 100 percent, as everybody is VWLOO VHDUFKLQJ DQG OHDUQLQJ WKLV ÀHOG We have to understand the pros and cons, then take the decisions accordingly. Can AI play a bigger role in law enforcement and anti-crime and antiterrorist programs? Today, and through smartphones, you can search internet and upload something that might be good and accepted by others. However, someone else might use internet to sell contraband, upload bad contents, or launch anti-government activities. Internet is a platform utilized by people for good and bad purposes. There are legislations DQG ODZV LVVXHG WR ÀJKW HYLO DQG VXSSRUW good and positive approaches. AI has the same dimensions. We, as states, organizations, and individuals, have to focus on the SRVLWLYH DQG ÀJKW WKH QHJDWLYH LQ WKLV ÀHOG The world has reached a stage where we aspire to be connected to everything around us, and collect data from everything around us. AI supports us issuing recommendations that help us to be better DQG PXFK PRUH TXDOLÀHG LQ DOO ÀHOGV For example, if we want to use the satellites to collect current meteorology data related to the geographical and geological information, the size of this information will be four million gigabytes. We need a

“The most important thing is the role played by the governments and organizations to utilize technology to serve people and not to harm humanity.â€? line of more than 30-km of CDs on top of each other to download this information on them. Passing this information to the best scientist in the world means he will VSHQG KLV OLIH ZLWKRXW EHLQJ DEOH WR Ă€QLVK reading and understanding it. On the other hand, AI provides us with recommendations, as well as best scientists’ opinions, giving us a chance to take better decisions. In other words, AI has a very positive impact, and creates new chances to help us protect our planet, and generate new ways of connectivity based on adequacy. As states, our task is to focus on the positives sides.

Absolutely. Just compare our life and those of our fathers or grandfathers. Even, if we compare our current life conditions to 50 years ago, undoubtedly, ours is better. Life is developing and improving as we make use of technology to serve us. Although, some technologies are harmful, but the majority of the technological approaches serve us well. However, the most important thing is the role played by the governments and organizations to utilize technology to serve people and not to harm humanity.

Do you think our world will be a better place in the coming years because of AI?

For a detailed version of this interview logon to trendsmena.com TRENDS I THE YEARBOOK 2018 69

THE YEARBOOK 2018 I INTERVIEW - TECHNOLOGY

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Justine Cassell Professor, Associate Dean, Technology Strategy and Impact, Carnegie Mellon University

Future Humans By Alkesh Sharma, Dubai

AI is a modeling technique and to say that it is engulďŹ ng the region means that technology is playing an ever-greater role in the society, states Justine Cassell. ow do you look at the fears associated with the Fourth Industrial Revolution? Are they real or just a temporary phase? Every technological innovation has terULĂ€HG WKH SHRSOH ZKR KDYH OLYHG WKURXJK LW 7KH VWHDP HQJLQH ZKLFK ZDV LQYHQWHG SHUKDSV GXULQJ WKH VHFRQG LQGXVWULDO UHYROXWLRQ ZDV WHUULI\LQJ $W WKDW WLPH LW ZDV WKRXJKW WKDW WKH VWHDP HQJLQH ZLOO WDNH DZD\ MREV IURP HYHU\ SHUVRQ LQ HYHU\ FRXQWU\ WKDW IDFWRULHV ZHUH JRLQJ WR VKXW GRZQ EHFDXVH RI DXWRPDWLRQ WKDW VWHDP HQJLQHV ZHUH JRLQJ WR EHFRPH OLNH SHRSOH DQG GHVWUR\ SHRSOH 6R WKLV LV QRW D QHZ IHDU LQ IDFW WKLV IHDU ZDV DOVR HYLGHQW

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70 TRENDS I THE YEARBOOK 2018

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TECHNOLOGY - INTERVIEW I THE YEARBOOK 2018

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“If we are putting technology in the hands of people for whom money is more important than human well being, then we will end up in dystopia.” Most of the industries are talking DERXW $UWLÀFLDO ,QWHOOLJHQFH $, $V an expert, how do you look at the developments so far? )LUVW ZH KDYH WR JR EDFN WR WKH GHÀQLWLRQ RI $, $, LV QRW D WHFKQRORJ\ OLNH D WHOHSKRQH RU URERWV EXW LW LV D WHFKQLTXH $QG WKH WHFKQLTXH LV WR PRGHO WKH KXPDQ DELOLWLHV RI GRLQJ D WDVN HLWKHU LQ WKH VDPH ZD\ DV WKH KXPDQV GR RU HYHQ EHWWHU WKDQ WKDW 6R ZKHQ VRPHRQH WDONV DERXW URERWV WDNLQJ RWKHU SHRSOH·V MREV EHFDXVH RI $, ZKDW WKH\ PHDQ LV WKDW VRPHRQH KDV WKH PRGHO RI WKH DELOLW\ RI WKH ZRUNHU WR JUDVS DQ REMHFW DQG WR SXW LQ D ER[ DQG WKH\ KDYH WDXJKW WKLV DELOLW\ WR D URERW ZKLFK LV TXLWH GLIÀFXOW $, LV D PRGHOLQJ WHFKQLTXH DQG VR WR VD\ WKDW $, LV HQJXOÀQJ WKH UHJLRQ PHDQV WKDW WHFKQRORJ\ LV SOD\LQJ DQ HYHU JUHDWHU UROH LQ WKH VRFLHW\ $QG WKDW WRGD\·V WHFKQRORJ\ ZKLFK \HVWHUGD\ ZDV WHOHYLVLRQ EHIRUH WKDW ZDV WHOHSKRQH DQG EHIRUH WKDW ZDV WHOHJUDSK WKH VDPH ZD\ LV $, WRGD\

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THE YEARBOOK 2018 I ENERGY

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72 TRENDS I THE YEARBOOK 2018

ENERGY I THE YEARBOOK 2018

Clean Sweep By Alkesh Sharma, Dubai

Energy landscape across the Middle East region is evolving fast with increased focus on renewables, creating new opportunities and a sustainable carbon-free future. PDVVLYH HFRQRPLF GLYHUVLÀFDWLRQ H[HUFLVH LV XQGHUZD\ LQ WKH 0LGGOH (DVW WR JUDGXDOO\ HQG GHSHQGHQF\ RQ IRVVLO IXHOV IRU D VXVWDLQDEOH IXWXUH 2QH VHFWRU WKDW KDV LPPHQVHO\ EHQHÀWHG IURP WKH H[HUFLVH LV WKDW RI UHQHZDEOH HQHUJ\ 2YHU WKH \HDUV LW KDV QRW RQO\ HPHUJHG DV D UHOLDEOH DQG YLDEOH PHDQV WR UHSODFH FRQYHQWLRQDO HQHUJ\ VRXUFHV EXW DOVR DV D SURÀWDEOH VHFWRU DQG UHDO FRQWULEXWRU WR WKH UHJLRQDO HFRQRP\ %XUJHRQLQJ SRSXODWLRQ UDSLG LQGXVWULDOL]DWLRQ DQG XUEDQL]DWLRQ PHDQ D QHYHU HQGLQJ LQVDWLDEOH GHPDQG IRU HQHUJ\ $FFRUGLQJ WR WKH ,QWHUQDWLRQDO 5HQHZDEOH (QHUJ\ $JHQF\ ,5(1$ *XOI &RRSHUDWLRQ &RXQFLO *&& FRXQWULHV· HOHFWULFLW\ FRQVXPSWLRQ LV JURZLQJ DW DOPRVW HLJKW SHUFHQW D \HDU DQG H[SHFWHG WR UHDFK WHUDZDWW

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The region boasts of abundant year-round sunshine, the space to develop large solar power plants and significant wind and geothermal resources. (Sun)Lightning growth :LWK LPSURYHPHQW LQ WHFKQRORJ\ GHFOLQLQJ FRVW RI SURGXFWLRQ LQFUHDVHG LQWHUHVW RI WKH SULYDWH VHFWRU DQG VWURQJHU JRYHUQPHQW FRPPLWPHQWV WKH UHQHZDEOH HQHUJ\ VHFWRU LV H[SDQGLQJ H[SRQHQWLDOO\ )URP PHUH *: LQ WKH UHQHZDEOH HQHUJ\ SURGXFWLRQ URVH WR ZKRSSLQJ *: LQ VWLOO LW DFFRXQWHG IRU OHVV WKDQ RQH SHUFHQW RI WKH WRWDO SRZHU JHQHUDWHG LQ WKH UHJLRQ 7KH VRODU SRZHU VHFWRU LV FXUUHQWO\ KDYLQJ D GUHDP UXQ DWWUDFWLQJ QHDUO\ SHUFHQW RI JUHHQ SURMHFW LQYHVWPHQWV LQ WKH UHJLRQ $V SHU ,5(1$ WKH UHJLRQ·V GDLO\ VRODU LQVWDOODWLRQ DYHUDJH RI .:K 74 TRENDS I THE YEARBOOK 2018

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THE YEARBOOK 2018 I ENERGY

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Green bonds, which fund environment friendly businesses and assets, have emerged as the most preferred financing tools for the clean energy sector. HDFK \HDU WR SURGXFH 0: 'XEDL 0XQLFLSDOLW\ WRR LV EXLOGLQJ D PXOWL ELOOLRQ :7( IDFLOLW\ WRXWHG WR EH WKH ODUJHVW LQ WKH 0LGGOH (DVW WR UHGXFH ODQGÀOO ZDVWH E\ SHUFHQW RYHU WKH QH[W ÀYH \HDUV DQG VWDUW FUHDWLQJ 0: E\ VHFRQG TXDUWHU RI 7KH 8$(·V 0LQLVWU\ RI &OLPDWH &KDQJH DQG (QYLURQPHQW KDV HQJDJHG OHDGLQJ SOD\HUV IRU PRUH VXFK IDFLOLWLHV LQ 5DV $O .KDLPDK DQG )XMDLUDK $FFRUGLQJ WR WKH :RUOG %DQN WKH VROLG ZDVWH SURGXFHG LQ XUEDQ DUHDV LQ WKH *&& ZLOO LQFUHDVH E\ SHUFHQW WR UHDFK WRQV SHU GD\ :7( LQLWLDWLYHV FDQ FRQYHUW DOPRVW SHUFHQW RI WKLV ZDVWH LQWR HQHUJ\ 76 TRENDS I THE YEARBOOK 2018

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ENERGY - INTERVIEW I THE YEARBOOK 2018

Š Reuters

Suhail Muhammad Al-Mazroui Minister of Energy, UAE, and Head of the Federal Electricity and Water Authority (FEWA)

Meeting Energy Needs By Osama Al Ranna, Dubai

Suhail Muhammad Al-Mazroui says that FEWA is all set to make all transactions paper-less and is putting emphasis on achieving the real goals of Emiratization. hat is the future of nuclear power project in the UAE? How far has the implementation reached? With regards to UAE nuclear power project, it includes building four nuclear power plants in Barakah site. The project is going well according to its agenda. As planned, the operation will start next year, as there are not any undue delays and hence all things are well on the track. However, the project is not a matter of engineers or technicians, or anything related to project’s components. The issue is the ability of the implementation company to get the licenses and to start operating process. We hope it will all go

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as planned. It is not easy, but we are sure that everybody is working on this project in safest ways to complete the project as soon as possible. The four plants will be in service from 2021. In accordance with the plan, 25 percent of the power provided to the transportation vehicles in UAE will be from the nuclear power plants, DQG , WKLQN LW LV JRLQJ WR EH D VLJQLÀcant shift. We announced the power strategy 2050, which aims to have six percent of the entire UAE energy from the nuclear power. This is according to the current data, as these rates will be UHYLHZHG HYHU\ ÀYH \HDUV DQG ÀJXUHV might change.

In this context, if we see a revolution in QXFOHDU HQHUJ\ ÀHOG LQ VPDOO HQJLQHV DQG reactors, and if this all becomes economically competitive, then, it shall start early, or there might be a rate change of around ten percent. How is the world looking at the current sources of energy generation and how is UAE looking at the same? See, currently the world is facing intense competition for the four basic sources of energy generation, which includes natural gas, coal including clean coal, nuclear energy, and renewable energy, which includes sun and wind. These four sources of energy are competing among themselves TRENDS I THE YEARBOOK 2018 77

THE YEARBOOK 2018 I INTERVIEW - ENERGY

“We announced the power strategy 2050, which aims to have six percent of the entire UAE energy from the nuclear power.” on factors like cost, sustainability, and HIÀFLHQF\ 7KH FRPSHWLWLRQ LV DQ HFRQRPLF RQH RU D FRPSHWLWLRQ ZLWK LWV RZQ FULWHULD :H LQ 8$( FDQQRW FORVH RXU PLQG WR ZKDW LV KDSSHQLQJ DURXQG 7KHUHIRUH ZH KDYH WR UHYLHZ RXU SODQV DQG DFKLHYHPHQWV HYHU\ ÀYH \HDUV 2XU SODQ LQ 8$( IRU HQHUJ\ UHVRXUFHV LV KDYLQJ SHUFHQW QDWXUDO JDV SHUFHQW UHQHZDEOH HQHUJ\ VL[ SHUFHQW QXFOHDU HQHUJ\ DQG SHUFHQW FOHDQ FRDO 7KHVH DUH WKH JRDOV ZH KDYH DQQRXQFHG 2I FRXUVH WHFKQRORJLHV DQG FDSDELOLWLHV DUH DYDLODEOH EXW ZH DUH JRLQJ WR UHYLHZ WKHP HYHU\ ÀYH \HDUV GHSHQGLQJ RQ WKH FKDQJH RI SULFHV DQG WHFKQRORJLHV 7KHVH UDWHV PD\ FKDQJH EXW ZH ZLOO NHHS 78 TRENDS I THE YEARBOOK 2018

RXU SURMHFWV LQ WKH UHQHZDEOH HQHUJ\ LQWDFW (VSHFLDOO\ ZH DUH VXUH WKDW LWV FRVW LV GURSSLQJ DQG LWV HIÀFLHQF\ LV LPSURYLQJ <RX ZLOO QRWLFH WKLV LQ WKH FRPLQJ SURMHFWV Given the rise in oil prices lately, is it possible to have an increase in production in the UAE? 3ULFHV DUH VXEMHFW WR WKH VXSSO\ DQG GHPDQG RI WKH PDUNHW :LWK UHJDUGV WR LQFUHDVLQJ SURGXFWLRQ WKHUH VKDOO EH QR LQFUHDVH ,Q 8$( ZH DUH FRPPLWWHG WR ZKDW KDV EHHQ DJUHHG XSRQ IRUPHUO\ $V ZDV DQQRXQFHG LQ 1RYHPEHU RXU FRPPLWPHQW LV IRU RQH \HDU DQG ZLOO EH UHYLHZHG LQ WKH PLG RI WKDW \HDU :H DUH FRPPLWWHG WR WKH

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ENERGY - INTERVIEW I THE YEARBOOK 2018

LQTXLULHV RU SURYLGH KHOS WR WKH SHRSOH Our employees will visit the homes of elGHUO\ SHRSOH RU SHRSOH RI GHWHUPLQDWLRQ WR SURYLGH WKHP ZLWK WKH QHFHVVDU\ DQG UHTXLUHG VHUYLFHV What are your plans in the near future? How do you plan to make services better? ,Q WKH WKLUG TXDUWHU RI ZH ZLOO VWDUW LPSOHPHQWLQJ WKH DXWRPDWLF UHDGLQJ RI PHWHUV 7KHUH ZLOO EH QR KXPDQ UHDGHU IRU HOHFWULFLW\ DQG ZDWHU &XUUHQWO\ ZH DUH ZRUNLQJ RQ WKLV SURMHFW %\ WKH EHJLQQLQJ RI WKH ÀUVW TXDUWHU RI DOO UHDGLQJV RI )(:$ PHWHUV ZLOO EH DXWRPDWLF 7KLV LV DQRWKHU ELJ VWHS WRZDUGV PDNLQJ WKLQJV PRUH WHFKQRORJ\ GULYHQ Can you throw some light on the water saving initiatives and its achievements at FEWA so far?

In 2014, you announced the “Professional Excellence” Awards in the FEWA, and you recently concluded its fourth edition, how would you sum up its march? First of all, I would like to say that the award’s basic objective was to upgrade HPSOR\HHV· HIÀFLHQF\ WKURXJK FRPSHWLWLRQ 7KHVH DZDUGV DUH EDVHG RQ LQWHUQDWLRQDO FRQGLWLRQV DQG VWLSXODWLRQV DORQJ ZLWK EHLQJ LQ DOLJQPHQW ZLWK 6KHLNK 0XKDPPDG %LQ 5DVKLG $ZDUG IRU ([FHOOHQFH 7KH\ DUH FRQGXFWHG RQ VHYHUDO FULWHULD QDPHO\ SHUIRUPDQFH DQG DFKLHYHPHQW LQLWLDWLYH DQG LQQRYDWLRQ HGXFDWLRQ DQG VXSHUYLVLRQ What would you say are recent achievements of FEWA? $V IDU DV WKH DFKLHYHPHQWV DUH FRQFHUQHG

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For a detailed version of this interview logon to trendsmena.com TRENDS I THE YEARBOOK 2018 79

THE YEARBOOK 2018 I INTERVIEW - ENERGY

Tony Pan CEO, Modern Electron

Energy Concerns By Alkesh Sharma, Dubai

Various new technologies are coming up but we don’t know the right direction to pursue and it is increasing the volatility in the market, believes Tony Pan. f we talk about Middle East, this region is working more toward switching to the renewables and lessening their dependence of hydrocarbons. How do you look at this prospect and at the overall energy scenario? As, in terms of price, wind and solar energies have decreased dramatically in ODVW ÀYH WR WHQ \HDUV PXFK IDVWHU WKDQ a lot of people had projected and this is LQ IDFW D ZRQGHUIXO WKLQJ 6R ZH DOO DUH JRLQJ WR VHH D PDVVLYH XSWDNH LQ ZLQG and solar as energy options, across the ZRUOG LQ WKH QH[W IHZ GHFDGHV 7KDW EH LQJ VDLG \RX KDYH WR UHDOL]H WKDW HQHUJ\ VHFWRU LV KXJH DQG ULJKW QRZ ZLQG DQG VRODU FRPELQHG DUH RQO\ D IHZ SHUFHQW RI

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80 TRENDS I THE YEARBOOK 2018

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ENERGY - INTERVIEW I THE YEARBOOK 2018

HYHQW 6R QRZ WKH PRVW LQWHUHVWLQJ WKLQJ is that whether the electric vehicles will FXW WKH GHPDQG RU QRW 7KHUH LV D YHUVLRQ RI WKH IXWXUH ZKHUH WKHUH ZLOO EH D ELJ XS WDNH RI HOHFWULF YHKLFOHV DQG WKLV ZLOO UH VXOW LQ FKDQJHV LQ FRDO FRQVXPSWLRQ <RX FDQ KDYH GHPDQG GURS E\ WHQ SHUFHQW YHU VXV H[SHFWDWLRQ DQG SULFHV FDQ FRPH XS E\ SHUFHQW DQG \RX KDYH WR EH FDUHIXO DERXW WKDW VFHQDULR 6R DOO WKLV FRPELQHG FDQ FUHDWH D ORW RI GLVUXSWLRQ DQG LQVWDELO LW\ LQ RLO VHFWRU LQ WKH FRPLQJ IXWXUH DQG ZH KDYH WR EH FDUHIXO DERXW WKLV Globally there has been a massive push on electric vehicles by governments but are people opting for them easily? ,W LV EHWZHHQ WKH WZR WKLQJV \RX VDLG $ ORW RI SHRSOH DUH EX\LQJ HOHFWULF YHKLFOHV DQG WDNLQJ DGYDQWDJH RI VXEVLGLHV EXW WKH ÀUVW DGDSWRUV DUH EX\LQJ WKHVH YHKL FOHV HYHQ ZLWKRXW WKH VXEVLGLHV ,Q VRPH FDVHV SHUIRUPDQFH KDV RXWSHUIRUPHG WKH WUDGLWLRQDO YHKLFOHV OLNH LQ WKH FDVH RI PD[LPXP WRUTXH LW LV SKHQRPHQDO LW LV MXVW OLNH D VSRUWV FDU $QG VRPH SHRSOH DUH EX\LQJ EHFDXVH WKH\ ZDQW WR EH HQYLURQ PHQWDO IULHQGO\ DW DQ\ FRVW 6R \HV WKHUH DUH SHRSOH ZKR DUH EX\LQJ WKHVH FDUV EXW WKH ELJ TXHVWLRQ LV KRZ PXFK RI LW ZLOO EH VSUHDG LQ WKH PDVV PDUNHW <RX KDYH WKH ÀUVW DGDSWRUV DQG WKH\ DUH QRW JRLQJ DZD\ WKH\ ZLOO EX\ %XW WKH UHDO FKDOOHQJH LV WR JHW WKH QH[W SHUFHQW FXV WRPHUV WR EX\ WKHVH FDUV DQG KRZ FDQ LW EH GRQH WKLV LV \HW WR EH ÀJXUHG RXW Worldwide what are the trends that will dominate the energy market? *OREDO DFFHSWDQFH RI FOLPDWH FKDQJH LV VRPHWKLQJ WR VHULRXVO\ WKLQN DERXW :H VWLOO GRQ·W KDYH D JOREDO UHFRJQLWLRQ RI FDU ERQ SULFH $ ORW RI WKH FRPPLWPHQWV RI WKH ODVW DJUHHPHQWV DUH \HW WR EH LPSOHPHQW HG 5LJKW QRZ 86 LV WKH RQO\ FRXQWU\ WKDW KDVQ·W VLJQHG WKH WUHDW\ %XW LQ WKH ORQJ WHUP WKH URDG LV KHDGLQJ WRZDUG WDNLQJ WKH FDUERQ HPLVVLRQV VHULRXVO\ 3ROLFLHV ZLOO EH LPSOHPHQWHG DQG WKDW will massively affect the energy sector DFURVV DOO VHJPHQWV 6R WKDW LV RQH ELJ

“Autonomous vehicles can massively increase the car usage rate and this will also increase the oil demand because even if you are blind you can use a car.”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·W NQRZ WKH ULJKW GL UHFWLRQ DQG LW ZLOO LQFUHDVH WKH YRODWLOLW\ 7KHUHIRUH WKH URDG QHHGV WR EH UHDG\ IRU increased volatility in energy sector and

VWDNHKROGHU SROLF\ PDNHUV DQG WKH FRP SDQLHV VKRXOG EH UHDG\ IRU WKDW 8QFHU WDLQO\ LV WKH QHZ QDPH RI WKH JDPH What is Modern Electron doing and what brought you to Dubai? :H DUH D VWDUW XS FRPSDQ\ GHYHORSLQJ EUHDNWKURXJK HQHUJ\ WHFKQRORJLHV DQG ZH ZRUN LQ HOHFWULFLW\ JHQHUDWLRQ , DP SDUW RI WKH JOREDO IXWXUH FRXQFLO IRU HQHUJ\ ZLWK LQ WKH RUJDQL]DWLRQ :H DUH UHDOO\ WKLQN LQJ DERXW WKH ZKROH SLFWXUH RI HQHUJ\ QRW LQ WHUPV RI RQO\ HOHFWULFLW\ EXW LQ WHUPV RI K\GURFDUERQV JDV DQG RLO ÀHOGV :H DUH ÀQGLQJ RXW KRZ DOO WKLV ZLOO ÀW LQ WKH IXWXUH DQG KRZ ZH FDQ FROODERUDWH ZLWK FLWLHV OLNH 'XEDL LQ WKH FRPLQJ \HDUV TRENDS I THE YEARBOOK 2018 81

THE YEARBOOK 2018 I TOURISM

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82 TRENDS I THE YEARBOOK 2018

TOURISM I THE YEARBOOK 2018

Booster Dose By Alkesh Sharma, Dubai

Increasing tourist footfall is giving the much-needed push to sagging economy and creation of world-class infrastructure across the Middle East region. ven as there’s pressure on the Gulf Cooperation Council (GCC) countries to curtail spending and prioritize projects, the tourism sector has remained above such considerations DQG LV GULYLQJ WKH GLYHUVLÀFDWLRQ SODQ In the run up to the mega-ticket events in the region, like the 2020 World Expo in Dubai, the local governments have their eyes set on building capacity of tourism and hospitality sectors to posiWLRQ WKH UHJLRQ DV D JOREDO WRXULVP KXE And there are valid reasons for showing WKH LQFUHDVHG FRQÀGHQFH LQ WKH VHFWRU According to the UN World Tourism Organization (UNTWO), destinations DURXQG WKH ZRUOG ZHOFRPHG ELOOLRQ tourists between January and October 2017, a seven percent increase on the VDPH SHULRG ODVW \HDU 7KH 0LGGOH (DVW showed extraordinary growth of over

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VHYHQ SHUFHQW $V SHU WKH ODWHVW UHVHDUFK by the World Travel & Tourism Council, the direct contribution of travel and tourism to the Gulf GDP is forecast to ULVH E\ SHUFHQW WR ELOOLRQ LQ IURP ELOOLRQ LQ ,W LV H[SHFWHG WR JURZ E\ SHUFHQW SHU DQQXP WR ELOOLRQ E\ ´7KHVH robust results, the best we have seen in PDQ\ \HDUV UHĂ HFW WKH VXVWDLQHG GHPDQG IRU WUDYHO DURXQG WKH ZRUOG 7KH QXPEHU RI WRXULVWV ZLOO UHDFK ELOOLRQ in 2030, calling for increased focus on international tourism and travel,â€? said Taleb Rifai, Secretary-General, UNWTO, at the UNWTO/UNESCO Conference on Tourism and Culture held UHFHQWO\ LQ 2PDQ While Hajj pilgrimage in Saudi Arabia and shoppers’ paradise UAE conWLQXH WR JLYH Ă€OOLS WR WKH *&& WRXULVP

industry, attempts are on to develop other key cultural, leisure and entertainment attractions to make the most RI IDYRUDEOH FRQGLWLRQV 0RVW UHFHQWO\ the UAE granted visas on arrival to Chinese and Russian visitors; Oman launched new simple e-visa service; and Saudi Arabia plans to issue tourLVW YLVDV RQOLQH IRU WUDYHOOHUV IURP FRXQWULHV LQ WKH ÀUVW TXDUWHU RI DV part of its efforts to increase the numEHU RI LQWHUQDWLRQDO WRXULVWV Upbeat hospitality sector The UNWTO forecasts the region to KRVW PLOOLRQ LQWHUQDWLRQDO WRXULVWV — almost triple the present volume RI PLOOLRQ ³ E\ 7KH HYHU increasing tourists have driven the exSDQVLRQ RI WKH KRVSLWDOLW\ VHFWRU 7KHUH DUH FXUUHQWO\ RYHU KRVSLWDOLW\ TRENDS I THE YEARBOOK 2018 83

THE YEARBOOK 2018 I TOURISM

As a result, hotel developers and operators are exploring the mid-market KRWHOV LQ WKH WKUHH WR IRXU VWDU VHJPHQW Gulf hoteliers, including Emaar’s Rove and Rotana’s Centro, have opened up to mid-scale segment to create new revHQXH FKDQQHOV )UDQFH·V /RXYUH +RWHOV SODQV URRPV DFURVV SURSHUWLHV in the budget-friendly segment by 2020 LQ WKH 0LGGOH (DVW

Direct contribution of travel and tourism to the Gulf GDP is forecast to rise by 3.8 percent to $53.4 billion in 2017-18 from $51.4 billion in 2016-17. projects (representing approximately URRPV ZRUWK RYHU ELOlion under various stages of planning, GHVLJQ DQG FRQVWUXFWLRQ LQ WKH *&& The UAE and Saudi Arabia take the OLRQ·V VKDUH ZLWK DQG SURMHFWV UHVSHFWLYHO\ $OVR KRWHOV SURMHFWV ZRUWK RYHU ELOOLRQ DUH H[SHFWHG WR EH DZDUGHG WKLV \HDU ,Q 'XEDL·V hotels had the highest daily occuSDQF\ RI SHUFHQW DQG DQ DYHUDJH GDLO\ UDWH $'5 RI IROORZHG E\ 0XVFDW SHUFHQW RFFXSDQF\ DQG $'5 DQG 'RKD SHUFHQW RFFXSDQF\ DQG $'5 +RZHYHU WKH SURÀOH RI WRXULVWV LV LQFUHDVLQJO\ 84 TRENDS I THE YEARBOOK 2018

FKDQJLQJ %HVLGHV (XURSH DQG 5XVVLD Asia is emerging as the fastest growth PDUNHW IRU WKH UHJLRQDO WRXULVP 7R broaden the revenue generation, there’s a need to explore the mid-market tourism segment and offer good value-forPRQH\ KRVSLWDOLW\ ´+RWHO LQYHVWRUV QHHG WR ULVH WR WKH challenge of changing traveler dePDQGV DQG VSHFLÀF UHTXLUHPHQWV RI groups such as millennials, families, halal travellers and those from emerging markets such as China and InGLD µ VD\V +DLWKDP 0DWWDU &(2 5DV Al Khaimah Tourism Development $XWKRULW\ 5$.7'$

Focus on mobility The increasing tourist footfall in the region also calls for smoother mobility DQG EHWWHU FRQQHFWLYLW\ +HQFH KHFWLF activities are being witnessed in the WUDQVSRUW VHFWRU $W OHDVW SURMHFWV ZRUWK ELOOLRQ ZHUH XQGHU YDULous stages of construction in November FRPSDUHG WR ELOOLRQ LQ WKH ÀUVW PRQWKV ODVW \HDU $FFRUGLQJ WR WKH %1& 1HWZRUN D FRQVWUXFWLRQ SURjects’ analyst, the transport sector constitutes six percent of all active projects in the region, with railways accounting for more than half of the total projects ZRUWK ELOOLRQ Saudi Arabia’s Haramain highVSHHG UDLO FRQQHFWLQJ -HGGDK WR 0HFFD has become operational and will give ERRVW WR UHOLJLRXV WRXULVP &RPSULVLQJ SDVVHQJHU FDUV WKH WUDLQ ZLOO RIIHU two-way trips every half an hour beWZHHQ $O 0DVMLG DO +DUDP 0HFFD DQG $O 0DVMLG DQ 1DEDZL 0HGLQD DW D VSHHG RI NP SHU KRXU 7KH KLJK VSHHG UDLO VWUHWFKHV WR km and is expected to transport some PLOOLRQ SDVVHQJHUV DQQXDOO\ 7KH ambitious pan-GCC Railway Network, slated to be completed in 2021, DOVR SURPLVHV WR JLYH D ÀOOLS WR WRXUism as mobility from one nation to anRWKHU EHFRPHV HDVLHU WKDQ HYHU 2WKHU smaller railway projects are currently XQGHUZD\ DFURVV WKH UHJLRQ 'XEDL 0HWUR·V 5HG /LQH RQH RI WKH ORQJHVW driverless metro lines in the world, is also being upgraded to transport some PLOOLRQ H[SHFWHG YLVLWRUV GXULQJ WKH :RUOG ([SR

TOURISM I THE YEARBOOK 2018

´7KH *&& QDWLRQV DUH SODQQLQJ WR make their economies more sustainable by improving infrastructure that will help the cross-border trade, tourism and public mobility that are esVHQWLDO IRU GLYHUVLĂ€FDWLRQ 2QFH DOO transportation projects are complete, these will change the way people move within the region,â€? says Avin Gidwani, &(2 %1& 1HWZRUN New hotspots %HVLGHV EXLOGLQJ FDSDFLW\ DQG XSJUDGing infrastructure, GCC countries are UHDOL]LQJ WKHLU XQLTXH WRXULVP SRWHQWLDOV %HLQJ KRPH WR WKH WZR KROLHVW SODFHV LQ ,VODP Âł 0HFFD DQG 0HGLQD — the Kingdom of Saudi Arabia is in a natural position to exploit its tourism SRWHQWLDO 7KH UHFHQWO\ XQYHLOHG 5HG Sea project, an ambitious plan to develRS PLOHV RI ZHVW FRDVWOLQH DQG reef-fringed islands into a tourist hotVSRW FRXOG DGG ELOOLRQ DQG jobs to Saudi Arabia’s economy every \HDU 7KH SKDVH RQH RI WKH SURMHFW ZLOO VWDUW LQ DXWXPQ DQG FRPSOHWH LQ 7KH .LQJGRP LV DOVR EXLOGLQJ $O )DLVDOL\DK D FLW\ DOPRVW WKH VL]H RI 0RVFRZ ZHVW RI 0HFFD E\ ² DQG Entertainment City, a project covering VT NP WKDW ZLOO LQFOXGH D VDIDUL DUHD DQG 6L[ )ODJV WKHPH SDUN 7KH 8$( LV WKH Ă€UVW FKRLFH RI LQWHUQDWLRQDO WUDYHOHUV LQ WKH UHJLRQ ,W LV therefore, building theme parks and museums to help attract a greater numEHU RI WRXULVWV $EX 'KDEL RSHQHG WKH /RXYUH LQ 1RYHPEHU WKH VHFRQG VXFK universal art museum in the world DIWHU )UDQFH DQG WKH DXWKRULWLHV DUH ZRUNLQJ RQ Ă€QLVKLQJ WKH *XJJHQKHLP 0XVHXP WKH ODUJHVW LQ WKH ZRUOG WLPHV WKH VL]H RI WKH 1HZ <RUN JDOOHU\ :DUQHU %URWKHUV :RUOG $EX 'KDEL Indoor theme park is set to open this \HDU RQ <DV ,VODQG ,Q 'XEDL ';% (QWHUWDLQPHQWV LV EXLOGLQJ 6L[ )ODJV theme park, which is set to open in ,W ZLOO EH WKH WKLUG DWWUDFWLRQ LQ DGGLWLRQ WR WKH H[LVWLQJ 0RWLRQJDWH

“A number of factors will drive growth in the tourism market, including the ongoing effort to attract holidaymakers and business travelers alike.� /HJRODQG 'XEDL DQG %ROO\ZRRG 3DUNV 'XEDL 2PDQ &RQYHQWLRQ DQG ([KLELtion Centre has made the Sultanate the most preferred choice for holding international meetings, conferences and H[KLELWLRQV 7KH 2PDQ 7RXULVP Strategy aims at reviving the old heritage and cuisine to infuse culture into tourism to make it a crucial economic SLOODU IRU QDWLRQDO LQFRPH In addition, the focus is on stimulatLQJ WKH GRPHVWLF WRXULVP PDUNHW 6DXGL Arabia has lifted a cinema ban and announced women will be allowed to GULYH IURP QH[W -XQH 7KH FKDQJH LQ consumption pattern will also go well

with the Kingdom’s decision to create an entertainment authority to ramp up local spending on music concerts, movLHV IHVWLYDOV HWF ´$ QXPEHU RI IDFWRUV ZLOO GULYH JURZWK in the tourism market, including the ongoing effort to attract global and regional holidaymakers and business WUDYHOHUV DOLNH Âľ VD\V %0, 5HVHDUFK D XQLW RI WKH )LWFK JURXS With their liberal visa policies, increased connectivity and upcoming mega projects, the GCC countries are well-poised to cement their position further as the most popular tourist desWLQDWLRQV LQ WKH ZRUOG LQ TRENDS I THE YEARBOOK 2018 85

THE YEARBOOK 2018 I INTERVIEW - TOURISM

Mamoun Hmedan Managing Director for MENA and India, Wego

Travel Smart By Alkesh Sharma, Dubai

2018 is expected to be the year of greater mobile-technology innovations and better use of AI in the travel and tourism industry, says Mamoun Hmedan. ow has the year 2017 been for the tourism sector? The MENA region stood out for a number of reasons. Egypt, for example, was up 52 percent in terms of international arrivals, quite a turnaURXQG IURP D GLIÀFXOW 7XQLVLD DQG Turkey have seen similar rebounds with double-digit growth. The Middle East overall has seen 5 percent growth in international tourist arrivals – these are all positive signs, and an indicator of these markets’ resilience and maturity. At a macroscopic level, it really helped that worldwide travel continued to remain on track and even outperformed WKH JOREDO HFRQRP\ LQ

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86 TRENDS I THE YEARBOOK 2018

KDV EHHQ LQFUHGLEO\ SRVLWLYH LQ terms of investor sentiment and innovations. It started with Wego becoming the fastest loading mobile travel site in the world, after implementing Accelerated Mobile Pages (AMP) combined with Progressive Web App (PWA). What will be the major trends that will rule the tourism sector in 2018? Tech-savvy millennials continue to drive tourism trends in the MENA region. Therefore, the expectation is that ZLOO EH D \HDU RI JUHDWHU PRELOH technology innovations and better use RI $UWLÀFLDO ,QWHOOLJHQFH $, 6LQFH *HQ < LV TXLWH À[DWHG RQ FXVWRPL]HG

experiences, travel service providers need to harness innovative technology to understand customer preferences and offer bespoke solutions that will generate a new wave of loyalty. Wego is already raring to incorporate advanced technologies at every step and will continue to dominate the mobile travel apps channel. Though its use in the travel industry is currently only conceptual, blockchain has much potential in changing the way SHRSOH H[FKDQJH WUDYHO LGHQWLĂ€FDWLRQ manage baggage-tracking details, or even avail loyalty points. This software SODWIRUP VKRXOG VWDUW UHYROXWLRQL]LQJ the travel industry in the near term. In

TOURISM - INTERVIEW I THE YEARBOOK 2018

terms of the airline industry, we believe that low-cost-carriers will launch VHYHUDO Ă LJKWV RQ WKH PRUH SURĂ€WDEOH ORQJ KDXO URXWHV 0DQ\ ORFDO DLUOLQHV ZLOO DOVR VHUYH DV IHHGHUV WKDW EULQJ LQ travelers from destinations not served E\ ODUJH FDUULHUV WR KXE DLUSRUWV IRU RQZDUG MRXUQH\V *URZWK LQ OHLVXUH WUDYHO ecotourism and wellness tourism is also H[SHFWHG LQ +RZ KDV WKH RLO SULFH Ă XFWXDWLRQV DQG GLVWXUEHG JHRSROLWLFDO FRQGLWLRQV LPSDFWHG WKH WRXULVP LQGXVWU\" The UAE’s inbound and outbound tourLVP KDV ODUJHO\ UHPDLQHG XQDIIHFWHG LQ ,Q IDFW WKHUH KDV EHHQ SHUFHQW JURZWK UHSRUWHG LQ LQWHUQDWLRQDO RYHUQLJKW YLVLWRUV DUULYLQJ LQ 'XEDL GXULQJ WKH Ă€UVW QLQH PRQWKV RI WKH \HDU ,Q JHQHUDO JHRSROLWLFDO WHQVLRQ DQG ORZ RLO SULFHV FDQ SXW SUHVVXUH RQ WKH KRVSLWDOLW\ VHFWRU LQ WKH UHJLRQ EXW ZLWK WKH 8$( EHLQJ GXEEHG DV RQH RI the most secure destinations with wellGHYHORSHG KRVSLWDOLW\ DQG HQWHUWDLQPHQW LQIUDVWUXFWXUH LWV UHSXWDWLRQ KDV RQO\ VROLGLĂ€HG DV D JUHDW SODFH WR YLVLW :KDW GR \RX WKLQN ZLOO EH WKH PDMRU FKDQJHV WKDW WKH LQGXVWU\ ZLOO VHH LQ WKH ZDNH RI (;32 " 7KHUH LV VR PXFK JUHDW ZRUN EHLQJ SXW LQ ² IURP LPSURYHG LQIUDVWUXFWXUH DQG GHVWLQDWLRQ PDUNHWLQJ LQYHVWPHQWV WR HYHQ DWWUDFWLQJ JUHDWHU IRUHLJQ LQYHVWPHQWV WR PDNH ([SR D JDPH FKDQJHU IRU WKH VXFFHVV RI WKH LQGXVWU\ $OO RI WKHVH LQLWLDWLYHV DUH VXUH WR SRVLWLRQ 'XEDL DV WKH œÀUVW FKRLFH¡ IRU WKH LQWHUQDWLRQDO OHLVXUH DQG EXVLQHVV WUDYHOHU EHIRUH GXULQJ DQG HYHQ DIWHU WKH ZRUOG IDLU 'R \RX WKLQN LW LV DGYLVDEOH WR KDYH D FRPELQHG WRXULVP DQG WUDYHO GHYHORSPHQW SODQ IRU WKH UHJLRQ" 7KH 0LGGOH (DVW KDV PXFK WR JDLQ IURP FROOHFWLYHO\ ZRUNLQJ WRZDUG SURPRWLQJ WKHLU VKDUHG FXOWXUDO KHULWDJH DQG QDWXUDO ZRQGHUV WR SRWHQWLDO WRXULVWV *UHDW V\QHUJLHV FDQ EH WDSSHG LI DOO WKH

“Tech-savvy millennials continue to drive tourism trends in the MENA. 2018 will be a year of greater mobile-technology innovations and better use of AI.â€? 0(1$ QDWLRQV ZRUN WRJHWKHU WR DFKLHYH FRPPRQ VWUDWHJLF JRDOV 8QLTXH MRLQW WRXULVP SDFNDJHV ZKHUH WRXULVWV WR RQH 0(1$ FRXQWU\ DUH HQFRXUDJHG WR DOVR YLVLW D SDUWQHU QDWLRQ LV D JUHDW ZD\ WR VKLQH D ELJJHU VSRWOLJKW RQ WKH UHJLRQ This, in turn, will result in more tourism-led jobs, infrastructure investments DQG IRUHLJQ H[FKDQJH OHDGLQJ WR VXVWDLQDEOH JURZWK IRU DOO PHPEHU QDWLRQV 7HFKQRORJ\ KDV FKDQJHG WKH ZD\ LQGXVWULHV ZRUN +RZ KDV LW FKDQJHG WKH WUDYHO DQG WRXULVP LQGXVWU\ LQ " 7RGD\ HYHU\ FRPSRQHQW RI WKH SURFHVV RI WUDYHO MRXUQH\ IURP Ă€UVW WKRXJKWV RI D WULS ULJKW WKURXJK WR FRPSOHWLRQ LQYROYHV WHFKQRORJ\ (DFK RI WKHVH FRPSRnents has a tech solution to assist in the SURFHVV UHVXOWLQJ LQ DQ RYHUDOO LPSURYHG

H[SHULHQFH IRU WKH WUDYHOHU 7HFKQRORJ\ KDV GULYHQ D FKDQJH LQ WKH ZD\ WKH LQGXVWU\ FRQGXFWV LWV EXVLQHVV 7UDYHOHUV LQ WKH 0LGGOH (DVW DQG $IULFD UHJLRQ KDYH WLPH DQG DJDLQ VKRZHG D JUHDW HDVH LQ WKH DGRSWLRQ RI WHFKQRORJ\ LQWR HYHU\GD\ OLIH 7RGD\ WKH PRELOH SKRQH LV D QDWXUDO H[WHQVLRQ RI WKH UHJLRQ¡V PLOOHQQLDO SRSXODWLRQ DQG KDV infused into the entire value chain of the WUDYHO DQG WRXULVP LQGXVWU\ ,Q IDFW WKH PRGHUQ WUDYHOHU Ă€QGV LQGLVSHQVDEOH WKH DSSV WKDW KHOS FRPSDUH DQG ERRN Ă LJKW WLFNHWV DQG KRWHO URRPV SD\ IRU KROLGD\ SXUFKDVHV ZLWK DQ H ZDOOHW RU HYHQ KHOS XVHUV FRQYHUVH LQ IRUHLJQ ODQJXDJHV

For a detailed version of this interview logon to trendsmena.com TRENDS I THE YEARBOOK 2018 87

THE YEARBOOK 2018 I YEAR IN PICTURES

Glimpses of 2017

June 5: Saudi-led quartet severed ties with Qatar, who was accused of promototing extremism, supporting Muslim brotherhood and meddling in the internal matters of other Arab states.

88 TRENDS I THE YEARBOOK 2018

March 28: US e-commerce giant Amazon buys Souq.com, disrupting the retail ecosystem in the region.

© Reuters

January 27: US President Donald Trump signs an order suspending the entry of people from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen for at least 90 days causing distress, confusion, and disrupting global air travel.

© Reuters

Ten major events that defined the year gone by.

September 26: Saudi King Salman bin Abdulaziz Al Saud lifted the Kingdom’s ban on women drivers, saying women in the country will be allowed to drive by June 2018.

© Reuters

YEAR IN PICTURES I THE YEARBOOK 2018

September 26: Dubai, partnering with one of its subsidiaries called Emcredit Limited and UK-based Object Tech Group, launched its own blockchain-based cryptocurrency emCash.

October 19: Omar Bin Sultan Al Olama was appointed UAE’s Minister of Artificial Intelligence. UAE becomes the first country in the world to get a minister of Artificial Intelligence.

TRENDS I THE YEARBOOK 2018 89

October 25: Saudi Arabia announced to establish $500 billion city of the future ‘NEOM’ with its first phase expected to be completed in 2025.

November 22: Ride-hailing service Uber had suffered a massive cyberattack, which had sacrificed the confidential data of nearly 57 million customers and drivers, the company revealed.

90 TRENDS I THE YEARBOOK 2018

November 4: Saudi Arabia’s Crown Prince Mohammed bin Salman took a decisive action to detain dozens of princes, businessmen and senior officials on the charges of corruption.

December 6: US recognizes Jerusalem as Israel’s official capital and planned to move its embassy there from Tel Aviv.

© Reuters

THE YEARBOOK 2018 I YEAR IN PICTURES

KNOWLEDGE, DATA, INSIGHTS EXCLUSIVE RESEARCH 31 SESSIONS, WORKSHOPS, 85 SPEAKERS UNRIVALED NETWORKING REGIONAL LUXURY EXECUTIVES UNDER ONE ROOF GLOBAL STUDENT COMPETITION

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