The Edge Feb 2014 (Issue 52)

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2 | The Edge

contents February 2014

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cover story 50

Why does Qatar, a country that has ambitions to be a centre of Islamic banking and hosts a large Muslim population, seem to have relatively better penetration in conventional banking? Simon Watkins reports.

60 The 2013 edition of Qatar Motor Show attracted about 150,000 visitors. When the show returns in February, it is expected to draw larger crowds in Qatar in 2014. The Edge takes a look at Qatar’s automotive retail sector in our special section on Page 60.

features Entrepreneurship in Qatar

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With the means and opportunity for Qatari entrepreneurship guaranteed by the state, complete with institutional support system and bank financing schemes, why was Qatar recently ranked 112 in a list of countries on the parameter of starting a business?

Tourism service in Qatar

56

Today, the bulk of Qatar’s tourism is made up of business tourism, meetings, incentives, conferences and exhibitions, but the sector has much more potential if service needs are addressed, says Stenden University Qatar’s executive dean Robert Coelen.

Special Section: Qatar’s automotive sector 60

As many automotive companies in the Middle East show record sales for 2013, the year 2014 comes with great expectations for further growth in the sector.

The organisational effect 68

Internationally proven management frameworks can greatly facilitate the economic and social growth and thus there is a strong case for all organisations in Qatar to adopt ISO 9001, writes Omer El Tigani.

50 Suliman Al Salhi, chief business officer at Qatar First Bank says that Islamic finance is still a niche market and a number of issues have to be addressed to allow its evolution into a profitable service-oriented industry.

The Edge | 3

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sectors

Finance & Markets 23

Qatar launched the Mesaieed Petrochemical Holding Company IPO on December 31, 2013. With three banks offering 100 percent finance, bankers reveal that this pattern is likely to be repeated.

Energy & Sustainability 27

India’s LNG consumption is set to increase rapidly in the near future and Qatar could ostensibly be wellpositioned to capitalise on the energy needs of this fast-growing country.

Real Estate & Construction 31

With Dubai winning the bid for Expo 2020, the Gulf region is set to host another major event alongside the 2022 World Cup. For Qatar, this may mean sharing available resources at higher costs.

Tech & Communications 35

A new Telecommunications Consumer Protection Policy will take effect in Qatar, which includes a strengthened system for compliance and an independent dispute resolution process.

Healthcare & Education

39

Healthcare infrastructure in Qatar is undergoing a massive transformation. But will the private sector be left out as the government positions itself at the centre of mandatory healthcare for all?

Business Insight 71

The Edge spoke exclusively with Bilal Moti, managing director, ValuStrat LLC Qatar, about the local advantage his firm holds. Regus’ country manager for Qatar, Alina Gomotirceanu, discussed how flexible working could boost productivity.

72 Bilal Amanullah Moti, managing director of ValuStrat LLC Qatar forsees significant growth opportunities in Qatar.

regulars From the Editor 08 Photo of the Month 12 Business News 14 Qatar Perspectives 20 Reviews 77 4 | The Edge

publications director mohamed jaidah m.jaidah@firefly-me.com general manager joe marritt j.marritt@firefly-me.com managing editor miles masterson m.masterson@theedge-me.com senior business editor aparajita mukherjee a.mukherjee@theedge-me.com deputy editor farwa zahra f.zahra@theedge-me.com digital editor/editorial asst. shehan mashood s.mashood@theedge-me.com international sales director julia toon j.toon@firefly-me.com | +974 66880228 head of business sales manu parmar m.parmar@theedge-me.com | +974 33325038 sales manager adam kynnersley a.kynnersley@theedge-me.com | +974 66079716 area sales manager UAE roger cousin r.cousin@firefly-me.com | +971 508716076 distribution & subscriptions azqa haroon/joseph isaac a.haroon@firefly-me.com/ j.issac@firefly-me.com art director sarah jabari production coordinator ron baron photographer herbert villadelrey printer ali bin ali printing press Doha, Qatar

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

The Edge is printed monthly Š 2014 Firefly Communications. All material strictly copyright and all rights reserved. Reproduction in whole or in part, without the prior written permission of Firefly Communications, is strictly forbidden. All content is believed to be factual at the time of publication. Views expressed by contributors are their own derived opinions and not necessarily endorsed by The Edge or Firefly Communications. No responsibility or liability is accepted by the editorial staff or the publishers for any loss occasioned to any individual or company, legal or physical, acting or refraining from action as a result of any statement, fact, figure, expression of opinion or belief contained in The Edge. The publisher (Firefly Communications) does not officially endorse any advertising or advertorial content for third party products.

Photography/image credits and copyright, where not specifically stated, are that of Shutterstock and/or iStock Photo or Firefly Communications.

6 | The Edge

Special advertiSement

How Can Families Institutionalise their Businesses? The Legal Steps As in other GCC states, family owned and managed businesses contribute significantly to the economy of Qatar. Families in Qatar, without a doubt, participated in the economic boom and have accumulated significant wealth and financial power. Yet this wealth can be lost when families are confronted with succession crises and a failure to train and transition the next generation.

Family business restructuring is a corner stone consideration for families in business. The key is developing an institutional structure which enables their family business to survive over generations (“conversion”). There is no single correct answer, as to when and how to approach family business conversion; however, it is a necessary precondition for most family businesses to survive and flourish.

Successful conversion can: • consolidate family assets; • allow specialisation in the running of businesses and management of assets; and engage family members in the active management of the business within a sound governance framework.

What is conversion from a family business into an institutional one?

The conversion process, essentially involves taking a business owned managed and controlled by the patriarch, or the original founders’ generation, into a fully fledged corporate structure.

What legal form will the business take?

Often, families operate their businesses and manage their assets though diverse entities, or a “sole proprietors” structure. Once the conversion decision is made, the appropriate legal form for the business (typically within a corporate holding structure) must be carefully crafted to allow horizontal, vertical and specialised growth. The conversion process should also allow machinery to accommodate potential future investment into the business without distorting or diluting the ultimate family holding and governance structure. Company forms most commonly used would be limited liability companies, or private joint stock companies. If implemented correctly, these structures can eliminate or at least reduce the need for stakeholders to offer personal guarantees to banks.

How the business will be managed?

Aside from reflecting normal corporate law requirements reflected in the articles of association of the family companies, who from the family will lead the business? How will they be chosen? And why?

All these issues require a considered family document that covers, among other things, the management and governance considerations addressed above. The document may take the form of shareholders’ agreement or a family constitution. A family constitution can also be useful to record, reinforce and promote the family values and visionary insights of the original founding generation or the patriarch.

Why is Corporate Governance a must?

The term is overly used and is often a slogan. Nevertheless, sound corporate governance remains a key component and benchmark of a successful conversion process. Converting a family operated business into an institutional one requires corporate governance tools that deliver the objectives of the conversion. Governance policies must ensure the business is managed on

an institutional basis and build in checks against breach or errors.

Is conversion Sharia’h compliant?

Conversion of a family business can often be viewed, quite wrongly as inconsistent with shaira’h inheritance rules. In fact, full sharia’h compliance is readily achievable with the right advice, and if required your lawyers and learned scholars can work together to ensure this outcome. Obviously, legal and sharia’h consultation is required ahead of and during the conversion process to ensure that the outcome is sharia’h compliant.

Jurisdiction and governing law issues Quite often, family assets are located across many jurisdictions. Accordingly, legal input on the conversion and the structuring considerations in the respective jurisdictions is required, along with appropriate tax advice. Qatar is a civil law jurisdiction but it also incorporates the Qatar Financial legal regime which can assist in adopting a hybrid civil and common law approach. Such an approach, if carefully designed to respect the governing law, will allow the conversion process to benefit from common law concepts and documents not typically available under civil law regimes.

Understanding enforceability under Qatari law is vital for a successful conversion process capable of surviving the generational changes.

Conclusion In closing, it is our view that conversion, as described in this article is no luxury, rather an essential for the family business to flourish and endure.

This transition is not only necessary to grow and preserve family wealth, but also to position Qatari families to contribute even more effectively to the rapid economic progress Qatar is now experiencing.

Gary Watts Partner and Regional Head of Corporate Commercial g.watts@tamimi.com MohaMed Khodeir Partner and Head of Qatar office m.khodeir@tamimi.com

editor’s letter In late 2013, The Edge magazine launched its second website reader survey. While online polling is not an exact science (indeed, in an increasing trend, a number of studies around the world have shown that more tend to exaggerate using this survey method than any other), it does provide us with an indication of who reads The Edge.

The data also, perhaps, provides some additional insight into Qatar’s rapidly evolving business community. For example, 67 percent of The Edge readership is male and 31 percent female. That the men outnumber women by that margin is predictable, given the ratio of males to females in Qatar, and the fact that business in Doha is still clearly dominated by men.

However, what is notable is that compared to our 2012 online survey (in which 82.4 percent of The Edge readership was male and 17.6 percent female), in 2013 there was a 13 percent rise in female readers. Whether this is reflected in Qatar in general, it may be too early to tell, but tracking the numbers of women as they ascend the corporate ranks will be interesting to observe.

The age of The Edge readership is another with a demographic shift. In 2012, the largest part of our readership – 33 percent – was 40to 49-year-olds, with those 10 years younger second at 25 percent. Come 2013, nearly 39 percent of our readers are 30- to 39-year-olds, with only 20 percent now in the 40-plus category.

Again, whether this reflects a shift toward a younger Qatari business environment is pure speculation, but my guess is it might not be far off.

For work designations, this is one of our online survey categories that we altered slightly, adding a few more work titles, such as Consultant and Employee, to the existing fields of C-Suite Executive, Director, Upper Management, Middle Management and Student.

The results with the biggest changes in The Edge reader numbers from 2012 included C-Suite Executive, up in 2013 from 2.9 percent to 8.2 percent and Middle Management, down from 45 percent to 19 percent, a significant drop. Students reading The Edge dropped from 19 percent to five percent and in the category Small Business Owner (in 2012 listed as Start-up Owner/Entrepreneur), there was a drop of around three percent.

What this perhaps tells us is that more executives are reading The Edge, many of our readers have been promoted, many unemployed students have found work in the past year, and fewer are starting or running their own businesses.

However, deducing this from such an unscientific process can only be speculation at best. What is perhaps most interesting here though is that 15.29 percent of our readers clicked on our new ‘Consultant’ field, a statistic you can read from what you will, but that ostensibly accounts for the drop in Middle Management cited above.

For a broad-ranging business magazine such as The Edge, there was a fairly predictable spread among the major economic sectors, such as Financial Services, Oil and Gas, Real Estate and Construction, IT and Telecommunications, Media and Marketing, Academia and Research, Industry and Manufacturing and the Public Sector.

However, of the offered sector categories, a significant number – 27.27 percent – clicked on our new Other field and were asked to specify what economic sector not listed above they work in. These ranged from Sport and Events, Social Media, General Trading, Logistics, Luxury Retail, Legal Services, Security and even Agriculture.

If nothing else, this reflects the diversity of The Edge magazine readership (or at least those inclined to fill in an online survey), who are generally, I must close off, more or less happy with the magazine’s editorial mix and coverage and read The Edge for a combination of its Analysis and Opinion, Business News and Features.

Thanks in part to our survey data, The Edge, editors and staff will of course keep evolving the magazine and endeavour to continue to bring to you the best news and feature content related to Qatar’s business world.

Thanks for the ongoing support.

67 percent of The Edge readership is male and 31 percent female, reflecting a 13 percent rise for the latter Miles Masterson group from 2012 to 2013. Managing Editor 8 | The Edge

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12 | The Edge

photo of the month

Sand trapped Spain’s Sergio Garcia plays a sandy shot at the 18th hole during the final round of the 17th Commercial Bank Qatar Masters at the Doha Golf Club January 25, 2014. Garcia, ranked 11th in the world, emerged as event victor despite being forced into the sand bunker, overcoming Finland’s Mike Ilonen in a tight final round that culminated in a tense third round playoff. Garcia, who had placed among the top 10 in the Doha six times in seven years, and was joint runner up in 2013, told the media he was elated to finally win in Qatar. (Image Reuters/Arabian Eye) The Edge | 13

news business

Q-Construct to offer a fair process for ascertaining contractual entitlements and will ease timely project delivery Held in Doha in January, the second Eversheds Construction Seminar focused on features of the draft rules of new sector dispute resolution entity Q-Construct. Under the Qatar International Court and Dispute Resolution Centre (QICDRC), Q-Construct has been modelled on the Technology and Construction Court in the UK, and should have a positive impact on project delivery, especially in the run-up to the 2022 World Cup. by Aparajita Mukherjee Speaking exclusively with The Edge, Nick Pinder, associate at law firm Eversheds, also said that by addressing the issue of payments, Q-Construct will ease project delivery.

“Our experience of acting for a wide range of organisations throughout the supply chain in Qatar (and the wider region) is that payment, both in terms of an amount to be paid and the timing of payment, is one of the most significant challenges facing parties involved in construction and engineering projects,” said Pinder.

He added that Q-Construct will offer a fast, cost-effective and fair process for ascertaining the contractual entitlements and obligations of parties to a construction contract such as how much money one party is obliged to pay and how much money the other party is entitled to receive.

This, according to Pinder, should assist the contractor with its cash flow, which will flow down through the rest of the supply chain. It will also assist the client and the project generally in enabling contested issues to be resolved efficiently. The aim is for the project to keep moving (as opposed to being held up by disputes) which thereby prioritises timely completion.

With the support of highly specialised and experienced Commenting on the lessons that Q-Construct has drawn from the Technology and judges in the QICDRC, the Construction Court in the United Kingdom (UK), Pinder said that adjudication in the consulting companies [can] provide a robust framework for UK has been criticised for becoming too complex and increasingly akin to court or adjudication, said Nick Pinder, associate, Eversheds. arbitration proceedings, often with significant involvement of lawyers and the use of lengthy pleadings.

“This could be said to have happened at the expense of speed and cost effectiveness although the process is still faster and cheaper than other more formal processes,” added Pinder. An example of Q-Construct seeking to deal with issues of the speed of the process and its costs is in placing limits on the amount of printed material each party can submit to the adjudicator.

Recommendations and role of Q companies

Q-Construct will ascertain the contractual entitlements and obligations of parties to a construction contract.

14 | The Edge

Eversheds is one of the law companies making recommendations to Q-Construct, said Pinder. “With the support of highly specialised and experienced judges in the QICDRC, the consulting companies provide a robust framework for adjudication,” he added. “I do believe there is scope for further discussion around the fact that where the parties amend the rules, they cease to have the benefit of the services offered by the QICDRC. In addition and perhaps most importantly, the QICDRC will cease to have the role of supervisory court, something that could be critical when it comes to enforcement of an adjudicator’s decision.”

Q-Construct requires the buy-in from contracting parties by way of a written agreement. Hopefully, said Pinder, ‘Q’ companies will embrace the concept of adjudication and see the benefit that it brings to their projects and the industry in enabling efficient resolution of project-threatening disputes.

news business

LNG to power Qatar’s LNG carriers

A Q-Max vessel such as this, pictured, will be converted to run on LNG in the near future, reducing emissions and costs for Qatar.

Three Qatar state-owned companies have unveiled plans to convert an ocean-going gas tanker to run on liquefied natural gas (LNG) as an alternative to heavy fuel oil, it emerged in January, writes Jamie Stewart The plan, involving natural gas producers Qatargas and RasGas and spearheaded by Qatar shipping company Nakilat, would see the world’s first low-speed marine diesel engine converted to use LNG – a considerably cleaner fuel that would cut the ship’s exhaust emissions. The work will be carried out at Nakilat-Keppel Offshore & Marine’s Erhama Bin Jaber Al Jalahma Shipyard in the port of Ras Laffan, Qatar. The main engines of a Q-Max vessel will be modified to burn the cleaner fuel, meeting “current known and future stated global emissions regulations,” according to a Nakilat statement.

German headquartered company MAN Diesel and Turbo has been contracted by the three Qatar firms to carry out the conversion. Although work is in its early stages, the companies have a “high confidence level” with regards to the safety and reliability of the propulsion system.

Should the project prove successful, the benefits for Qatar would lie not just in the marginal reduction of its own carbon emissions, but in the potential for the technology to be exported to other nations, thereby creating domestic economic gains, and international environmental benefits. In addition, a new demand stream for LNG, which is Qatar’s primary export resource, would be created.

The cost of heavy fuel oil is closely related to crude oil prices, which have been gradually rising for a number of years. Therefore, the move could also cut the costs of Qatar’s largest export industry, and provide flexibility of fuel supply to react to market changes and reduced bunkering activities which, in turn, will offer operations and marine risk reduction.

International shipping is already known as the world’s most efficient means of mass-transit, but with growth in the industry set to continue at speed – particularly within the energy sector – global efforts have increasingly begun to focus on cutting the sector’s harmful carbon emissions, which according to the International Maritime Organisation account for around three percent of the planet’s man-made total.

3%

Global shipping’s contribution to worldwide carbon emissions.

Qatar Airways to launch Saudi subsidiary Qatar Airways will launch a domestic Saudi airline by the third quarter of 2014, chief executive Akbar Al Baker confirmed at the Bahrain International Airshow in January, writes Martin Rivers Al Maha Airways will begin services on the kingdom’s trunk route between Riyadh and Jeddah, deploying 10 aircraft in its first year. The fleet will then gradually expand to 50 aircraft as regional destinations such as Doha are added to the route network.

“We have already appointed a new CEO for the Saudi operations, and we are planning to launch the Saudi operations any time between the middle to the third quarter of this year,” Al Baker told Reuters. The subsidiary’s branding will sport the same logo as Qatar Airways but in green rather than maroon colouring. Its aircraft will be sourced from the Doha-based carrier’s own order-book, which comprises 280 units.

Al Maha’s launch follows a push by Saudi civil aviation authority GACA to liberalise the kingdom’s skies. Flag carrier Saudia has a 90 percent share of domestic flights, with the remainder operated by privately-owned Flynas.

CEO Al Baker is confident that Qatar Airways’ new Saudi venture will be a success. (Image Reuters)

Another start-up carrier, Saudi Gulf Airlines, owned by Al Qahtani Group, announced the purchase of 16 Bombardier C Series aircraft at the Bahrain Airshow. It is expected to launch services by early 2016.

The Edge | 15

news

business in brief Words & Numbers

“If it’s played between November 15 and the end of December, that is when the weather is most favourable.”

Jerome Valcke, FIFA President Sepp Blatter’s deputy, hinted a shift of schedule for 2022 World Cup in Qatar. The tournament is traditionally held in June and July.

USD 213 MILLION The sale price of St. Regis Bal Harbour Resort in Miami, Florida, “We are proud to acquired add this iconic resort to our growing last month property portfolio,”

by Starwood said Sheikh Faisal bin Qassim Al Thani, Hotels & Chairman of ARTIC, Resorts and a subsidiary of Al Rayyan Al Faisal Holding Company, on the Tourism purchase of the Miami St. Regis hotel Investment recently.

Company, the international hospitality subsidiary of Al Faisal Holding Company.

“In these temperatures, the ship would have turned into an oven, with these thousands of individual sheep literally baking alive.”

– Lyn White, campaign director of Animals Australia, commenting on an incident in which 4000 sheep died on a ship en route to Qatar and the United Arab Emirates.

USD56.19 According to a report issued by

Dubai-based The Cost of Living, Qatar is the cheapest country in the GCC to buy a standard basket of 21 groceries at the above price.

16 | The Edge

Turkish Airlines records more than 23 percent growth

Milaha secures USD425 million in ship refinancing

On its 80th anniversary, Turkish Airlines was voted Europe’s Best Airline for the third consecutive year at the 2013 Skytrax awards.

Qatar Shipping, a wholly-owned subsidiary of Milaha, has secured a 12-year USD425 million Proceeds from the ship (QAR 1.55 billion) financing facility will be utilised by four partners fixed-term ship to refinance existing debt financing facility facilities on four LNG vessels in use. with a consortium of eight banks. Proceeds from the facility will be utilised by all four joint venture partners to refinance existing debt facilities on four LNG vessels: Qatar Shipping Company, Mitsui OSK Lines, Nippon Yusen Kabushiki Kaisha and Kawasaki Kisen Kaisha – all chartered to Ras Laffan Liquefied Natural Gas Company in Qatar on a longtime charter basis.

Turkish Airlines, the national carrier of Turkey, reported traffic of 48.3 million passengers in 2013, a 23.6 percent increase from 39 million in 2012. The global carrier connects passengers to more countries than any other airline, and last year added 25 new destinations, raising the network to 243 destinations across 104 countries. The number of passengers on domestic routes increased by 26.1 percent and on international routes by 21.9 percent.

Jaidah announces winners of photography competition Jaidah Group has announced the winners of its ‘SeeMyDoha’ mobile photography competition at a an awards and exhibition event held at the Katara Art Center in Doha.

Present at the event were HE Dr. Hamad Bin Abdulaziz Al Kuwari, Minister for Culture, Arts and Heritage for Qatar. The monthly themes for the competition included: black and white, details, people, architecture, colours and an open theme for September.

Souq Waqif Boutique Hotels launches Spring Festival offers Souq Waqif Boutique Hotels, the luxury designer collection managed by Al Rayyan Hospitality, Souq Waqif Boutique Hotels’ is launching Spring Festival Deluxe offer includes two nights in one a number of the hotel collection’s of offers for uniquely-styled suites. families to make the most of the upcoming Souq Waqif Spring Festival. The annual festival runs from 24 January to 6 February.

Book release: Unlocking the Paradox of Plenty Unlocking the Paradox of Plenty: A Review of The Talent Landscape in the Arab World and Your Role in Shaping the Future addresses the fascinating dilemma that the GCC region faces with regard Unlocking the Paradox to its economic and of Plenty comes with social future. While specialised graphs, charts and diagrams. the Gulf states are full of opportunities for both national and expatriate workers who steer its economies forward, it also has some of the highest levels of youth unemployment, a lack of representation of females at work and low levels of employee engagement. This book, written by David B. Jones and Radhika Punshi, takes a close look at this paradox.

al khaliji delivers growth in 2013 results

al khaliji in Qatar announced its financial results for 2013 reporting a robust growth of eight percent in net profits of QAR 551 million. This includes the financial results of Al Khaliji France SA (QAR 68 million), an increase of 10 percent year on year. “There is much to be positive about with regard to al khaliji’s performance in 2013,” said Robin McCall, al khaliji’s group CEO.

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events business

Qatar, February 2014

events of the month

22 - 23 February Tourism in Tomorrow’s World

Organised by Stenden University Qatar, discussions at the event will look to understand the changing trends in tourism and how it will impact tourist destinations.

Stenden’s executive dean, Richard Coelen told The Edge that the conference is a small step towards making Qatar a knowledge producer in the sector, especially considering the importance of the tourism sector to the country’s development plans. “I have been very happy with getting the Qatar Tourism Authority on board as a partner,” he said.

FEBRUARY UPCOMING EVENTS 4-5 February

GCC Digital Security Forum

11 February

Qatar National Sport Day

21-25 February Qatar Motor Show

24-25 February MICE Arabia Conference

The changing dynamics of the tourism industry will be the topic of discussion at the upcoming Tourism in Tomorrow’s World Conference. (Image Corbis)

24 - 25 February Entrepreneurship in Economic Development

The topic of entrepreneurship in Qatar and the wider Gulf will be the focus of discussions at the event. Qatar University, in cooperation with the Interactive Business Network, has organised the event, which will look at the current entrepreneurial culture and the various issues surrounding it. There will also be a proposal to outline specific plans in order to make universities and other educational institutions incubators for developing young entrepreneurs.

18 | The Edge

MARCH UPCOMING EVENTS 9-11 March MultaQa

11-12 March GCC Future Rail Summit

24-26 March

World Exchange Congress

25-27 March

Maritime Defence Exhibition and Conference

qatar perspectives Protecting Qatari investments abroad Planning any foreign investment requires one to identify and assess risk factors involved. These commercial and legal risks are managed by Bilateral Investment Treaties (BITs). Dr. Minas Khatchadourian of the Qatar International Center for Conciliation and Arbitration, explores the types of protection that these treaties offer Qatari investments and what recourse the private investor has in cases of breach.

The last few years have witnessed sizeable investment activities led by the Qatar Investment Authority and by a few Qatari businessmen in various countries. In modern times, forms of investment may be diverse and include assets either tangible or intangible, spanning real estate, shares, stocks, equity participations, bonds, concession licences, intellectual property rights and technological know-how.

However, when any investor decides on where to invest internationally, his attention is usually focused on a comparison of the tax rules of the various countries under consideration.

Often little or no attention is paid to the issue of investment protection and the risks, which it may face in the host state, rendering an investment worthless.

Therefore, a key feature in planning foreign investment is identifying and assessing the risk factors inherent in the long-term relationship involved, both from a commercial perspective and a legal one. Investing in other countries carries certain perils that are often quite different from those in one’s own country. These considerable risks have been largely managed by BITs, which are instruments negotiated and signed between two states with the objective of promoting, but more of protecting, the investments of the nationals of each state in the territory of the other.

Qatar and the other Gulf Cooperation Council (GCC) countries have signed a 20 | The Edge

relatively large number of BITs, which reciprocally offer eligible investors protection of their investments in a host state by providing them three basic guarantees or measures of protection – national treatment, most favoured nation treatment, and fair and equitable treatment, respectively.

A national treatment protection, guarantees a Qatari investor treatment is no less favourable than what the host state grants to its own nationals in like circumstances. The most favoured nation treatment increases the level of protection to match the highest level that the host state provides to nationals of any other foreign state in similar situations, and the fair and equitable treatment protects the right of an investor to carry out business, free from unreasonable and discriminatory measures. A Qatari investor should feel relatively safe and at ease by investing in a country which has concluded a BIT with their home country.

In case a host state breaches any of these guarantees, the investor can use the Investor-State Dispute Settlement mechanism to bring a claim directly against that country, claiming a breach of the expropriation provision in the BIT and seeking compensation. Commonly, BITs provide a choice of dispute resolution mechanisms to an investor, which may include resolution by the courts of the host state or arbitration.

Nevertheless, relying on the national courts of the host country to enforce obligations in an investment agreement is not always easy. The investor may not want to take an action against the host country in that country’s courts because of bias or lack of independence.

They may not be able to access the local courts in the host country, and investors have no legal recourse unless there is an arbitration provision in the investment agreement to submit the case before the International Center for the Settlement of Investment Disputes, which was created especially to settle disputes between the host state and a foreign investor as one of the

Bilateral investment treaties provide choice of dispute resolution mechanisms to an investor including resolution by the courts of the host state. five international organisations of the World Bank.

More than 140 countries, including Qatar, have already adhered to the Washington Convention on the Settlement of Investment Disputes Between States and Nationals of Other States to attract investments.

Dr. Minas Khatchadourian is the deputy secretary general of the Qatar International Center for Conciliation and Arbitration.

This section is brought to you by Qatar Financial Centre Contents: Encouraging Qataris to build equity through IPOs 23. Fixed deposits viewed as safer option in Qatar 24.

finance & markets

With the Mesaieed Petrochemical Holding Company IPO complete, Qatar Exchange is likely to see further increased activity in 2014, sector pundits have projected.

(Image Reuters/Arabian Eye)

Encouraging Qataris to build equity through IPOs

Amid reports that the regional Initial Public Offerings (IPOs) market in the Middle East and North Africa (MENA) is likely to remain strong, with a total of seven deals, raising USD726 million (QAR2.6 billion) in Q4 of 2013, Qatar launched the Mesaieed Petrochemical Holding Company QSC (MPHC) IPO on December 31, 2013. Three banks have given 100 percent finance to Qatari applicants and in conversation with The Edge, bankers reveal that this pattern is likely to be repeated. by Aparajita Mukherjee

A

ccording to a study by EY, IPOs in Middle East North Africa are likely to remain strong in 2014, on better market fundamentals.

“There is a strong pipeline of good quality businesses preparing [for] IPOs over the next nine months,” said Phil Gandier, EY’s MENA transaction advisory services leader.

Following a strong increase in listings in the last quarter of 2013, the MENA region has a total of seven deals raising USD726.2 million (QAR2.6 billion), EY stated in the report.

Reflecting a positive sentiment towards IPOs (primarily with the objective of encouraging Qataris to build equity), Qatar Petroleum (QP) launched the MPHC IPO on December 31, 2013 – incidentally, this was just one of the slated four IPOs of a QP subsidiary. The issue, open to Qatari citizens, represented 25.725 percent of the share capital of MPHC. Further IPOs that have been expected for some time were the Doha Global Investment Company, which has been expected to offer

Brought to you by:

The Edge | 23

sectors | finance & markets

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billion

“Our vision was aligned with the government’s which aims at emphasising Qataris more towards being investors rather than spenders,” told The Edge Jamal Abdullah Al Jamal, deputy CEO, QIIB.

shares to the amount of QAR11 billion, and Barwa Bank which had planned to raise QAR2.05 billion through a public float on Qatar Exchange as well as a rights issue.

Analysts from Middle East business news and data service Zawya told The Edge that the DGIC IPO was delayed because it was still awaiting the regulatory approval.

“Moreover, with respect to Barwa Bank, the IPO is still announced and there are no other updates,” they added.

On the successful MPHC IPO, HE Dr. Mohammed bin Saleh Al Sada, the Minister of Energy and Industry and the chairman and managing director of Qatar Petroleum, said, “We are delighted that this successful IPO has provided so many Qatari nationals with an opportunity to become shareholders in MPHC, and to participate in the prosperity and the success of the State of Qatar and in the future of Qatar’s petrochemicals sector.”

Even while the issue was on, reports have stated that Qatari nationals have taken full advantage of the opportunity to own a stake in Qatar’s petrochemical industry, buying up the QAR3.23 billion worth of shares in the MPHC IPO, amid government incentives and generous lending conditions from banks.

Three banks – Qatar International Islamic Bank (QIIB), Qatar Islamic Bank (QIB) and al khaliji – provided 100 percent finance to Qatari citizens.

Commenting on why the bank opted to provide IPO financing, Jamal Abdullah Al Jamal, deputy CEO, QIIB, said that their vision was aligned with the government’s which aims at emphasising Qataris more towards being investors rather than spenders. Mohamed Abdulkhalek, al khaliji’s group chief business officer said that al khaliji has a strong focus on Qatari 24 | The Edge

Savings instruments

Fixed deposits viewed as safer option in Qatar

The share value offered by MPHC in its IPO, which was fully subscribed. clients, many of whom bank solely with them. “We wanted to be able to provide our customers with the ability to firstly subscribe to this strongly anticipated IPO, and secondly to help our customers fund their subscription by lending them money so they can purchase sufficient shares thereby making it a worthy investment,” he added.

The banks’ finances are zero interest until the allotment date and Abdulkhalek said that the bank has selectively charged no interest on the loan amount until the date the shares were allocated to shareholders. “As we anticipate the IPO to be well received, we felt that we should only charge interest on the amount ultimately used to purchase actual shares and not on the full amount contributed at the onset. “ Commenting on how providing IPO finance will help grow customers’ wealth in the long term, Abdulkhalek continued that MPHC and QE have been prudent in offering bonus shares and by protecting 50 percent of the allocated amount.

“We wanted to provide our customers with the ability to subscribe to this IPO.” – Mohamed Abdulkhalek, al khaliji.

Corporate investors will continue with the safer fixed deposits, while retail investors might flock to QE if the exchange goes ahead with the planned IPOs this year, according to analysts. (Image Corbis)

Fixed deposits of banks in Qatar have surged 71 percent in the last five years reflecting that individuals turned to safety of their hard-earned money when stock market turned volatile. by Aparajita Mukherjee

According to Qatar Central Bank (QCB) data, fixed deposit (FD) of banks in Qatar surged to QAR72.87 billion at the end of 2012 from QAR42.58 billion at the end of 2008. The jump in fixed deposits shows the flight of capital towards safety after the crash in stock market in 2008 due to global meltdown. Investors lost money when Qatar Exchange (QE) fell sharply following the crash in stock markets around the world.

The QE index crossed the 12,000 mark in 2008 and fell sharply to 4335.85 the same year following the sell-off in major global financial markets.

After that the stock market has gradually moved up but it has remained volatile, keeping investors concerned.

But QE has also been unable to meet the expectations of investors in providing returns, which has meant money steadily flowing into fixed deposits. In 2009, when stock markets crashed, individuals rushed to banks to deposit their money and fixed deposits increased by 20 percent to QAR51.07 billion. The rush continued the following year also as fixed deposit grew by 27 percent to QAR64.89 billion in 2010.

sectors | finance & markets

After that the deposits grew by five percent to QAR68.27 billion in 2011 and then by 6.7 percent to QAR72.87 billion in 2012.

Apart from the fixed deposits, money has also gone into the saving accounts or demand deposits. In the last five years, saving deposits have jumped 102 percent to QR37.17 billion at the end of 2012 from QAR18.43 billion showing that individuals kept more money to meet their routing expenditure.

Commenting on the trend of growing volumes of fixed deposits, Walid Salameh, head of global markets, Standard Chartered Bank, told The Edge, it is a combination of interest rates, which lure investors, and the lackluster stock market. “Qatar enjoys one of the highest incomes per capita globally and this helps savings. Interest rates locally are higher than those of USD, for instance, which help FDs growth specially when coupled with a relatively quiet stock market.”

Kris Werner, head of retail banking and wealth management at HSBC in Qatar said that instruments such as fixed deposits remain popular with most customers due to the lower risk potential and greater understanding, adding, “However, recently we have seen heightened interest from some customers for higher risk instruments such as mutual funds, sovereign bonds and structured investments.”

In Werner’s opinion, acquiring sustainable wealth is the product of a cautious and well-balanced approach.

Qatar’s Macroeconomic Forecasts Inflation (2012-14)

(% change, sector weights in consumer price index shown) 10

5

3.8

3.6 1.9

0 2012

-5

2013f

2014f

Total Housing (32%) Transport & Communications (21%) Food (13%) Other ( 34%)

Source: QSA and QNB Group analysis and forecasts

Fiscal Balance (2012-14) (% of GDP)

39.6

38.2

38.0 33.5

36.5

35.4

MSCI upgrade

Will the planned Initial Public Offerings (IPOs) and the MSCI upgrade of QE, which will take effect from May 2014, have any impact on the saving habits of people?

Salameh feels that the response to IPOs will depend on which category the investor belongs to – IPOs will offer a much more attractive investment alternative which means retail clients would be expected to allocate the maximum amounts they can to the IPOs. “On the other hand, corporate clients might be less incentivised to tap that route given that FDs will offer them more flexible access to their money and less overall risk.”

Werner’s views are that the development of the QE and the IPO of MPHC have been exciting and highlight the growth prospects of Qatar and the maturity of its financial sector.

26 | The Edge

2012

2013f

Revenue

2014f

Expenditure

Budget Balance

Source: QSA and QNB Group analysis and forecasts

Gross Government Debt (2010-14) (% of GDP)

38.7

2010

37.0

37.8

34.9

2011

2012

2013f

31.7

2014f

Source: Ministry of Finance and QNB Group analysis and forecasts

Contents: India: Qatar’s next large LNG customer? 27 . Long-term extraction, key for oil exporters 28 . Waste in Qatar: A business opportunity? 30 .

energy & sustainability Rapid growth in India has led the state to drive reform of its future energy mix (Image Getty Images)

India: Qatar’s next large LNG customer?

India’s LNG consumption is set to increase rapidly in the near future, a government-commissioned report reveals – and Qatar could ostensibly be well-positioned to capitalise on the energy needs of this fast growing country. But on further examination, Doha’s share of the subcontinent may not be as secure as it appears, writes energy and sustainability editor Jamie Stewart

N

atural gas may provide the Indian economy with its rapidly growing energy needs, a new report commissioned by the central government of the world’s second most populated nation, has said. The pages of the study revealed news that should stir Doha’s interest: India is targeting natural gas as a future energy source to drive long-term economic growth.

The potential increase in demand could push Qatar’s liquefied natural gas (LNG) exports to even more profitable heights – already Qatar is the largest single supplier of fuel to Indian ports.

But the report should also be considered a warning to Doha: in seeking to plan what the study terms a “viable development model driven by LNG”, a will on the part of India to strike deals with new, as-yet untapped sources of supply is revealed. This could force Qatar to cut prices over time, or even challenge its existing share of the world’s most potentially lucrative new LNG market.

Sector transformation

India is the second most populated nation on Earth, its 1.25 billion people outnumbered only by the 1.35 billion

of China. The country’s energy mix has traditionally been dominated by coal for power generation, because of large indigenous sources, and oil-based sources for transport. Domestic natural gas production has been relatively modest.

However, the government is considering long-term reform of the energy mix. Driven by its underlying growth ambitions, which can no longer be supported by local energy sources, it is a move born out of necessity rather than desire.

“It is clear that access to abundant and economically viable energy will be critical to sustaining the momentum of this growth,” the report, commissioned by the Indian government and produced by global consultancy, the Boston Consulting Group (BCG), stated.

Such words should be good news for the globe’s LNG suppliers, particularly Qatar, The Edge | 27

sectors | energy & sustainability

A report commissioned by the central government of India revealed news that should stir Doha’s interest: India is targeting LNG as a future energy source to drive long-term economic growth. which in 2012 to 2013 held a dominant 80 percent share of the Indian import market, supplying 10.9 million metric tonnes per annum. Nigeria was second with a 10 percent share, underscoring Qatar’s dominance. But the long-term transformation of a nation’s energy mix carries with it inherent uncertainties, and in this case, reform will run parallel to a global shift on the supply side. Those two factors can only mean one thing: new competition.

Therefore, Doha may be forced into cutting prices, or risk seeing its share of a growing market eroded.

Lucrative opportunity

Currently, India does not receive volumes of LNG from a number of the globe’s big suppliers: Algeria, Malaysia and Indonesia, which together account for 22 percent of worldwide supply.

“Some of this can be explained on account of being a late mover in the LNG space,” according to the BCG report.

“However, Indian companies need to systematically identify uncommitted capacities either in existing projects in these countries or in planned expansions, and move to broaden the supply base.”

India LNG imports 2012 and 2013 3% 3%

4% 10%

80%

Algeria Egypt Nigeria Qatar

28 | The Edge

Yemen

It is this clear indication of the India’s intention to seek out new partners, rather than rely on established suppliers to fuel its growth, that should worry Doha, particularly with substantial new production capacity due online in Australia in 2017 and the United States soon to begin exports. And a further challenge may surface a little closer to home, as the report stated: “Indian companies will need to keep a close watch on developments in frontier LNG supply regions like East Africa, and ensure they are not left behind in the next round of the great LNG ‘gold rush’.”

India’s natural gas consumption is expected to double over the next 15 years, from 379 million standard cubic metres per day (MMSCMD) to 743 MMSCMD. In 2013, LNG consumption reached 128 MMSCMD. Given that the nation is already a net importer of natural gas, this means the additional supply will have to come in the shape of LNG imports – in effect this means a five-fold increase. A potential gold rush indeed, and one in which Qatar must ensure it retains a dominant stake.

Petroleum technology

Long-term extraction, key for oil exporters

Maximising oil recovery over the long term will be key to squeezing the most out of fossil-fuel exports in coming years, according to papers presented by Qatar Petroleum at the 7th International Petroleum Technology Conference in Doha in January.

The giant producer teamed up with Denmark-headquartered Maersk Oil to discuss technological breakthroughs over the years at the Al Shaheen oil field, off the northeast coast of Qatar, with which the companies share a production agreement over. The field was once considered ‘marginal and unattractive’, according to Maersk Oil. But the two companies have developed “a unique understanding of its reservoirs and how to responsibly maximise long-term

Under the patronage of H.E. Skeikh Abdullah Bin Nasser Al Thani Prime Minister and Interior Minister of the state of Qatar

Tourism in Tomorrow’s World

23 & 24 February 2014

www.ttwforum.com

Qatar emerges as a tourism hub in the region - with 81 hotels currently in Doha and another 110 under construction - the conference will spotlight the importance of the tourism industry in the world economy Organized By:

In Partnership with:

Media Partner:

sectors | energy & sustainability

Qatar Petroleum teamed up with Maersk Oil to discuss technological breakthroughs at the Al Shaheen oil field off the northeast coast of Qatar.

Sustainable resources

HE Sheikh Abdullah bin Nasser bin Khalifa Al Thani, Prime Minister and Interior Minister of Qatar and HE Dr. Mohamed bin Saleh Al Sada, Minister of Energy and Industry at the Maersk Oil Qatar stand during the International Petroleum Technology Conference held in Doha in January.

oil recovery,” Maersk Oil chief executive Jakob Thomasen said, and Al Shaheen has since become Qatar’s largest offshore oil producing field. “Technology will be just as important in the future as it has been in the past,” Thomasen added.

The technology-led approach strikes a chord with advances made in unconventional oil and gas in recent years, which are transforming the global hydrocarbon picture to the benefit of importing nations, and potential exporters, opening up access to what were considered unconventional resources.

For example, the United States is expected to become a net exporter of gas in coming years, potentially challenging Qatar for market share, when as recently as five years ago it was building new import facilities.

The conference papers covered particular breakthroughs in seismic studies, horizontal drilling and 3D scanning technologies that are “helping to enhance understanding of the Al Shaheen field,” according to a Maersk Oil statement.

30 | The Edge

Waste in Qatar: a business opportunity?

Qatar, along with its five Gulf Cooperation Council (GCC) partners, has one of the highest rates of waste output per person in the world, according to organisers of a regional waste management event held in January in Abu Dhabi.

But, as every good businessperson knows, in the material world, there are no problems, only opportunities. And the solution to Qatar’s waste issue could well bring with it business ideas in a whole new area for the regional energy sector: the development waste-to-energy technology.

Qatar has shown some innovation in what for the GCC is a nascent field.

Completed in 2011, a domestic solid waste management centre near Mesaieed, covering three square kilometres, produces 30 megawatts (MW) of electricity for Qatar’s national grid by burning 1500 tonnes of refuse per day.

“A number of Middle East countries are considering waste-to-energy as a viable and cost-effective means of addressing the mounting problem of municipal waste output and Qatar has led by example,”

With one of the highest rates of waste output per person in the world, Qatar presents an opportunity for any firm that can profitably monetise its rubbish.

1500

The amount in tonnes of solid waste burned at Qatar’s waste management centre in Mesaieed, producing 30 MW of electricity per day.

Johan De Greef, technology manager at Keppel Deghersm, the Singapore-based firm that designed and built the Mesaieed complex, said in the build-up to the January event, highlighting the value of sustainable energy that could grow from an infinite resource: Qatar’s rubbish.

Contents: What does Dubai 2020 mean for Qatar 2022? 31 . The Mall of Qatar to open in 2015 33 .

real estate & construction What does Dubai 2020 mean for Qatar 2022?

As Dubai braces for Expo 2020, how will the event impact Qatar’s World Cup? (Images Corbis)

With Dubai winning the bid for Expo 2020, the Gulf region is set to host another major event alongside the 2022 World Cup. This may mean sharing available resources at higher costs for Qatar, which according to EC Harris’ estimates already stands among the most expensive countries for construction, writes Farwa Zahra

S

peaking with The Edge about the construction cost escalation, Nick Smith, EC Harris partner and head of cost and commercial for Middle East, said, “Dubai winning Expo 2020 has provided confidence to an improving United Arab Emirates (UAE) market and this may have an effect on prices in the region although we do not see this as major. From a specific Qatar point of view, we do not believe this will have a significant impact on material prices.”

Challenge 1: Attracting new workers at higher costs

While seeing no considerable impact on material costs, Smith acknowledges that Dubai Expo 2020 should intensify the struggle for human resources. “Competition for labour is going to be a major issue, not just between Dubai and Qatar, but across The Edge | 31

sectors | real estate & construction

working conditions for expatriates in Qatar.

Addressing this point, Hamilton said, “Both Dubai and Qatar labour markets have similar dynamics, and the planned and ongoing measures to improve the quality of migrant labour welfare in Qatar will put both countries on a similar footing, as the basic wages being paid to workers are broadly comparable.”

Opportunity 2: Cost reduction

Neil Hamilton, director of Quantex Qatar, says that having two major events in neighbouring countries during a similar timescale could have a positive impact on contractors’ tender prices.

the whole Gulf region, as well as for Asian workers seeing strong construction activity in their home markets,” he said.

Aziz Sharif, partner Mannzili, web portal for Qatar’s properties, shared a similar sentiment, “With Dubai winning the Expo 2020, the competition for labour will also be a driver for increasing cost.”

Acknowledging the downside, Neil Hamilton, director of Qauntex Qatar, added that the occurrence of two major events in the region can lead to “a shortage of managerial and supervisory staff, and this could obviously have a direct upward pressure on the prices of all constructionrelated resources across the Gulf region, not just Qatar and the UAE.”

Challenge 2: Retaining the existing workforce

With ensuring the influx of new workers to meet the country’s increasing requirements, another challenge facing Qatar is the retention of existing employees amid rising rental inflation. While the UAE has also witnessed rental appreciation in the last few years, according to Sharif, it has grown at a faster pace in Qatar compared to salaries which have not risen proportionately. “The UAE has dropped its rental cap and rents are increasing in excess of 20 percent and the stated inflation rate is hovering around 32 | The Edge

six to eight percent,” said Sharif, adding that, “Qatar is slowly following suit with the 20 percent plus rental appreciation. Salary increments have not risen for most past two to five percent. This discrepancy is in effect, a loss of earns annually.”

Opportunity 1: Healthy competition in the Gulf

Having two large-scale events in the Gulf around a similar time has the potential to increase prices, but this need also heralds a struggle for resources and growing opportunities for construction companies.

Looking at both sides of the issue, Hamilton said, “Having another major event in a neighbouring country during a similar timescale could have a positive impact on contractors’ tender prices, availability of materials and skilled labour.”

Of late, Qatar has attracted international media attention on the mistreatment of migrant workers. Arguably, the country’s negative publicity can place Qatar at a less preferred position for expatriates.

Highlighting this point, Smith said, “Labourers will be attracted to countries through a range of factors, including improved accommodation and welfare standards, health and safety, food security and prices.” The logic can potentially catalyse government’s initiatives to ameliorate

While experts have consensus that labour shortage will be a primary driver of increasing costs, Hamilton speculates that by changing designs to incorporate more off-site prefabrication systems and techniques could be used to outsource manufactured components to countries with lower cost bases. “This, in turn, could help to reduce the demand for on-site manpower requirements and overheads, and drive more cost efficiency into projects by reducing number of manhours required and overall programme durations,” he said.

Eventually, the replacement technologies can only do enough and the need for workforce still remains considerable for the Gulf states. “The only solution would be unpopular, the UAE and Qatar would have to enforce caps on price rises on basic foods and housing,” said Sharif. Retaining the migrant workers and avoiding high expatriate turnover, hence, has to come with the government’s role to enforce rental caps to keep Qatar a competitive location for expatriates, backing the country’s economy.

“Competition for labour is going to be a major issue, not just between Dubai and Qatar, but across the whole Gulf region.” – Nick Smith, EC Harris.

real estate & construction | sectors

Retail sector

The Mall of Qatar to open in 2015

The Mall of Qatar, scheduled for completion in 2015, is designed to accommodate 7000 parking spaces.

With a QAR400 million contract for mechanical, electrical and plumbing services awarded to Drake & Scull International PJSC (DSI), the Mall of Qatar is slated to open doors for visitors in late 2015. Donald Weir, general manager, Mall of Qatar discusses more details.

Your merits are judged not by the efforts you put, but by the result you produce.

Planned to feature a streetscape, hypermarket, multiplex, four department stores, 20-plus restaurants and 400 shops, the construction works have been announced to begin in the first quarter of 2014.

With a mega project of this nature, how credible is the 2015 target? Addressing the question, Weir said, “The target is very realistic and the developer Urbacon Contracting Company is doing everything in their power to make sure that delays do not occur. We have five factories on site, manufacturing materials to keep the progress of the mall on schedule.” With a dedicated metro station and 7000 parking spaces, ease of access is a major consideration in the mall’s design, explained Weir who further said, “In a country with the highest population growth rate in the world in recent years, we had to make sure that parking was quick and easy and that the mall could also be easily accessed by those people who didn’t drive.” From a retail point of view, the mall will feature a range of brands. While The Luxury Court will house a high-end shopping quarter, a host of mid-range shopping opportunities will also be available. “There has been a tremendous amount of interest from world-class international retailers,” Weir told The Edge. The move-in dates for retailers will be announced later.

400

CONTACT US: Industrial Area St. No: 24 Tel: +974 4463 8777 Fax: +974 4460 4286 Email: isd@jaidah.com.qa

The approximate number of shops to be housed in the Mall of Qatar The Edge | 33 JaidahElectrical_Edge Ad_FA.indd 1

1/22/14 6:05 PM

Contents: A new government policy to protect Qatar consumers 35 . Is your firm ready for the ‘Internet of Things’? 36 . QITCOM to return for at least another three years, says MICT 38 .

tech & communications

The billing process under Qatar’s new Telecommunications Consumer Protection Policy requires that bills to customers be plain, simple and in an easy-to-understand format.

A new government policy to protect Qatar consumers A new Telecommunications Consumer Protection Policy will take effect in Qatar, which includes a strengthened system for monitoring and enforcing compliance with the rules, and a provision for an independent dispute resolution process.

T

he Ministry of Information Communications Technology (MICT) is expected to enforce the new policy three months from the date of its announcement, which was in early January, according to the official document. All obligations reiterated in the

new policy are already in effect.

According to the press statement released by the MICT, “The policy brings together the existing obligations on service providers in one document, and also imposes a set of new obligations on operators to ensure that they compete fairly.” The new policy is one of a number of steps ictQATAR has taken to increase regulations and oversight of the telecoms market, which enjoys a duopoly, and in some areas a monopoly, placing customers at a significant disadvantage.

The policy includes an improved system to monitor and enforce compliance, stated MICT. There is also a provision for a

dispute resolution process for unresolved complaints by service providers that will be independent of the operator. If the General Secretariat, which resolves disputes, determines that the provider is at fault, it could be required to make a private or public apology, an explanation of what went wrong, take action to prevent future occurrences and finally the potential for a refund for services or financial restitution.

Access to dispute resolution is free to retail customers, but will only be accessible if the service provider has not resolved an issue satisfactorily within 30 days. “ictQATAR already operates an independent complaints service, which The Edge | 35

sectors | technology & communications

consumers can contact if they are dissatisfied,” said Dr. Eiman Al Ansari, the manager for Consumer and Government Affairs, Regulatory Authority at ictQATAR, “But the improvements made through the draft policy will make it more effective and better able to ensure that operators are acting in the interests of consumers.”

Also included in the policy was the provision for clear and accurate billing.

Late last year, ictQATAR opened for public consultation a proposal to force service providers to apply customer credit limits in order to prevent ‘bill shock’. The billing process under the new policy must be “plain, simple and [in an] easy-tounderstand format, and provide accurate information on the services provided, the amounts due for each service and the method of calculation or tariffs for any service on which invoices are based, on the length of calls or other measure of usage,” stated the policy document.

The policy was developed following a public consultation with major telecom service users, and will be reviewed not less than every two years.

“The draft policy will ensure that operators are acting in the interests of consumers.”

- Dr. Eiman Al Ansari, ictQATAR.

Dr. Eiman Al Ansari of ictQATAR said the new policy was a result of a long period of development and that it would form the basis of telecommunications consumer protection policy going forward (Image ictQATAR).

36 | The Edge

Expert opinion: data storage

Is your firm ready for the ‘Internet of Things’?

If there was any doubt about the importance of the ‘Internet of Things’, the USD3.2 billion (QAR11.65 billion) deal Google made for Nest in January, a firm that makes intelligent thermostats and smoke alarms, is proof enough.

The Internet of Things is a term that is used to describe everyday devices that are connected to the Internet and able to act based on inputs. In fact, a recent Morgan Stanley report predicts that the number of devices connected to the Internet of Things will reach 75 billion by the year 2020. This is a staggering concept as the amount of data these devices - such as Nest’s smoke alarm - produces and keeps, will force companies to rethink how to securely capture, store and retrieve data to derive more value from it.

To address this problem, companies are coming around to the notion that instead of hoarding data, they need a modern data management strategy to make better business decisions, evolve products and services and improve the user experience.

Greg White, senior manager of product marketing at CommVault, in Dubai says that company data is already everywhere, a recent global survey of corporate employees showed that 80 percent of respondents wanted access to data from outside the office and 60 percent were working from a remote location. The growth of the Internet of Things adds new urgency to tackle this issue, but also creates new complexities when it comes to managing data throughout its lifecycle.

“Enterprises need to plan holistically, and consider the sources of data and how data will be used so they can design policies for what to keep, where to keep it and for how long,” explained White. Storage and cloud costs are decreasing, but not fast enough to keep up with data growth, he added. Storing the Internet of Things data indiscriminately in the long term will be wasteful and will not be cheap, explained White. Policies are one

USD

3.2

billion

The amount Google paid last month for Nest, a firm that makes intelligent thermostats and smoke alarms. way to manage this, according to White, by providing specific rules, such as collecting all documents related to an engineering project, to automatically move relevant data to more cost-effective storage. By understanding how data flows through their company, managers can keep what is valuable and get rid of what is not. This can save organisations up to 70 percent in storage capacity and costs, said White, which is valuable for highly regulated industries, such as healthcare and financial services, that must store data for seven or more years for compliance and quickly retrieve it when required. Redundant copies can also be deleted (a process called deduplication) to further improve efficiency.

The Internet of Things will continue to grow and so will the volume of data.

Companies should act now to develop a strategy to harness and not hoard data, and efficiently protect, manage and access it so they can create new insights, concluded White.

“Storing the Internet of Things data indiscriminately in the long term will be wasteful and will not be cheap.” - Greg White, product marketing, CommVault.

sectors | technology & communications

Technology conference

QITCOM to return for at least another three years, says MICT

Rinal Chaaban, QITCOM’s project lead (left) explained that technologies with a local context would be a focus at the upcoming event.

QITCOM, the country’s largest ICT event returns for the third time after a hiatus in 2013.

The Ministry of Information and Communications Technology (MICT), who own the event, has named fischerAppelt Qatar as the manager of QITCOM 2014. The event was not held last year, and Feda Al Barghouti, the acting market development manager for ICT Industry Development at the Ministry told reporters at the conference that they wanted to “step back and assess” the purpose of the event.

The contract signed by MICT with fischerAppelt is to develop QITCOM over the next three years. “We want to develop and implement new things over time,” said David Schopper, the general manager of fischerAppelt in Qatar, adding, “fischerAppelt, Qatar has come on board to manage QITCOM because we firmly believe in the importance of its mission and purpose and because we believe in the future of Qatar and its vision for the coming decades.”

The focus of the conference will be on innovation and entrepreneurship and Arabic digital content, both points of focus for Qatar. Rinal Chaaban, QITCOM’s project lead, said that the event will also focus on leading global technologies and the latest improvements in the ICT sector, but stressed that they would pay special attention to those that worked best in a local context. “The main idea is to make these technologies closer and more convenient to the local market,” concluded Chaaban. “The objective of QITCOM is to promote the growth of information and communication technology in Qatar,” explained Al Barghouti, “The many elements of QITCOM will no doubt positively impact on all sectors of the economy from large enterprises to even small and medium enterprises.”

38 | The Edge

Contents: Can the private sector contribute to Qatar’s healthcare growth? 39 . Opportunities in life-science markets 40.

healthcare & education Can the private sector contribute to Qatar’s healthcare growth?

Healthcare infrastructure in Qatar is undergoing a massive transformation in line with the National Health Strategy.

But will the private sector be left out as the government positions itself at the centre of mandatory healthcare for all? by Shehan Mashood

T

he aim of the National Health Strategy (NHS) is to increase both capacity and quality of healthcare in the country. The past year saw the first two phases of the National Health Insurance Scheme go into effect, a mental health strategy was launched, and new hospitals built, and more changes are on the way. However, matching Qatar’s rapidly growing population and the introduction of mandatory healthcare for those already in the country, might create pressure on the healthcare sector, especially if it is to provide the quality and scope of care outlined in their plans.

According to QatarHealth, a government publication, “A new hospital can take around seven years from planning to opening, which is about the same time it has taken Qatar to double its population.” It also stated that as Qatar becomes larger and more affluent, specialist services would be required.

Much has been written about the mandatory health insurance law, and how all basic insurance packages would be provided through the governmentThe Edge | 39

sectors | healthcare & education

funded National Health Insurance Company, with private insurance firms waiting to see the scope of basic coverage and what they can offer above it. While private sector involvement in insurance might be low, it would appear that they could play a much bigger role in the NHS as healthcare providers.

According to the Supreme Council of Health (SCH), around 80 percent of acute care provisioning comes from the public sector, and that too, mostly by one large provider, Hamad Medical Corporation (HMC). The NHS has identified this area as one which could benefit the healthcare system as a whole. By introducing competition, the SCH hopes that it will have a favourable impact on quality, choice and efficiency for users. Between 2010 and 2012, there was a 120 percent increase in private sector facility approvals.

In fact, an upcoming EY report shows that healthcare spending in the GCC region is expected to have a compound annual growth of 11 percent from 2010 to 2015, generating significant interest from the private sector. A key part of this will of course be mandatory health insurance, which is already underway in Qatar, as it will increase the size of the market. Andrea Longhi, a MENA advisory healthcare leader from EY said this had made the GCC an important destination for both domestic and international investors.

The potential seen by the private sector is perhaps most obvious in the fact that established facilities in the healthcare

Hospital beds in 2012

17% OTHERS 83% HMC Hospital treatment in Qatar falls heavily on the Hamad Medical Corporation.

“Demand for Pharmaceutical sector healthcare Opportunities services in life-science makes the GCC markets important for domestic and According to a Deloitte report released in December 2013, international uncertainties and instability in some Middle East markets has investors.” – limited the growth of the life sciences sector, which could Andrea Longhi, create opportunities in others, MENA healthcare such as Qatar.

While population increase has driven leader, EY. increase in the potential for the medical sector are looking to raise capital from expansion through IPOs. “The recent IPO of several healthcare facilities have set a precedent and more are to follow in the coming years,” stated an EY release.

There are however, some concerns that private sector providers have raised with the SCH, such as a lack of clear vision on the overall expected involvement of the private sector and the lack of integration between public and private sector for sharing of information (which includes access to patient data) among others. The NHS is currently doing a review and update on the processes.

Optimal private sector involvement

3

Supreme Council of Health hospitals for private sector operation by 2015.

6

Primary Healthcare hospitals Source: Supreme Council of Health

40 | The Edge

for private sector operation by 2015.

market, Deloitte has identified other favourable trends that include improving healthcare standards, increasing government investments in technological advancements and health awareness, the growth of smaller healthcare clinics and ambulatory centres and a medical tourism industry. However, some of the region’s biggest life-science markets are located in countries such as Egypt and Syria which are experiencing significant turmoil, which has created a gap in the market for countries such as Qatar who have so far invested in the sector in a limited capacity.

“In the Gulf Cooperation Council (GCC) countries, a growing and aging population and increasing total healthcare expenditures per capita are supportive of life sciences and healthcare industry growth,” said Hassib Jaber, life sciences sector leader at Deloitte Middle East. “This is in part due to the spread of chronic diseases, as the region is experiencing epidemics in diabetes and cardiovascular illnesses.”

Last year, Sheikh Faisal bin Qassim Al Thani, chairman of Aamal Company which owns Ebn Sina Medical, told Alpen Capital that the pharma sector in Qatar is poised for growth over the next few years. “The recent legislation proposed by the Supreme Health Council towards deregulation of pharmaceutical imports to encourage free market competition is a step in the right direction,” he said, “The industry is also looking forward to the proposed national health insurance programme, as this is perceived to be a catalyst to growth of the pharma industry in Qatar.”

George White, associate teaching professor of entrepreneurship at Carnegie Mellon University in Qatar.

Mohammed Al Kuwari, Qatari entrepreneur.

Stephen Brannon, director of communications at Silatech.

Abdullah Al Noaimi, Qatari entrepreneur.

Saleh Al Khulaifi, Bedaya Center manager.

Niranjan Mendonca, head of retail banking, Mashreq Bank Qatar.

Dr. Mahmoud M. Abdellatif Khalil, director, Center For Entrepreneurship, College of Business and Economics, Qatar University.

Fahad Al Kaabi, CEO, Manateq.

Layla Al Dorani, Qatari entrepreneur.

IN QATAR With ample means and opportunities in place, is lack of motivation still an inhibiting factor?

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In any country, almost every entrepreneurial endeavour can be broken down into whether there were the means, motive and opportunity to start a new business. Yet with the means and opportunity for Qatari entrepreneurship guaranteed by the state, complete with development banks, institutional support system and bank financing schemes, Qatar was recently ranked 112 in a list of countries on the parameter of starting a business. The Edge’s Aparajita Mukherjee asks whether entrepreneurism is taking off to the desired level in the country and whether a lack of motivation in a strong public sector economy may be a contributing factor.

T

he Qatari government’s catalytic role for entrepreneurship development leaves no doubt that Qatar’s entrepreneurs have all the opportunities they require to start their own businesses.

The government, realising that a hydrocarbon-based economy is finite, created a series of opportunities (in the form of institutions), which have been assigned the specific mandate of being support systems for entrepreneurs.

The first initiative came in 1997 – Qatar Development Bank (QDB) was set up with the mandate of developing the small and medium enterprises (SME) sector. This was followed by a knowledge economy assessment for Qatar, and in May 2007, the Planning Council of Qatar, Qatar Foundation and the World Bank jointly published Turning Qatar into a Competitive Knowledge-Based Economy, identifying SMEs as a key growth area.

In January 2008, the government announced the formation of a region-wide social initiative, Silatech, which, among other initiatives, connects entrepreneurs to financing institutions. A later entrant into the scene of entrepreneurship and SMEs was Enterprise Qatar, which came into being in April 2010. This was followed by Bedaya (a joint initiative between QDB and Silatech) in September 2011, which offers a more individualised and one-on-one approach to the development of the spirit of entrepreneurship in Qatar.

Startups and SMEs are clearly a policy priority, with the National Development Strategy 2011 to 2016 mentioning entrepreneurship 16 times in the entire document, according to Professor Filipe Santos an associate professor of entrepreneurship at INSEAD. Santos who was in Doha recently for a day-long 44 | The Edge

A noticeable trend among Qataris entering the workforce is that they opt for secure, highly-paid employment in the public sector, which could be a reason that entrepreneurship has not taken off to the desired extent. (Image photosbymilo)

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“Government jobs are far more attractive to Qataris than starting a company.” – Professor Nitham M. Hindi, dean of the College of Business and Economics, Qatar University. conference on entrepreneurship, organised by Bedaya and KPMG, mentioned that the institutional initiatives creating opportunities for Qataris are more than adequate.

George White, associate teaching professor of entrepreneurship at Carnegie Mellon University in Qatar, agrees, saying, “The Qatari government is offering an extraordinary range of financial support for Qatari entrepreneurs, and probably has more organisations trying to help entrepreneurs than any other nation on the planet.”

Despite these serial government initiatives, Qatar’s ranking in ‘Doing Business’, a yearly joint initiative of the World Bank and the International Finance Corporation that measures business regulations in 189 countries is not satisfactory. On the parameter of starting a business, Qatar was placed at 112 in 2014, in contrast to for example, Canada - second or Singapore - third.

Dr. Mahmoud M. Abdellatif Khalil, director, Center For Entrepreneurship, College of Business and Economics, Qatar University, attributes Qatar’s Doing Business ranking to the minimum capital requirement for starting a business at QAR200,000.

However, he adds, “To my knowledge, this high requirement of capital is going to be removed under the proposed New Companies Law and Qatar’s ranking will improve.”

Further explaining Qatar’s rankings, White says that the country suffers from the effects of archaic restrictive rules and regulations that need to be modernised. Indeed, for some time it has been widely acknowledged by all concerned within the SME space in Qatar that these restrictive policies are seen as hindrances to the cause of entrepreneurship and are due for an overhaul.

Leveraging opportunities

Whether these procedures affect motivation at all is open to speculation, but commentators unanimously feel that easing the procedures of incorporation would go a long way in assisting budding entrepreneurs in Qatar.

Ostensibly, the Ministry of Business and Trade has released a draft of the new Commercial Company Law (CCL), the main objectives of which include streamlining incorporation procedures and following international best practice in order to improve the

For Fahad Al Kaabi, CEO, Manateq, trying out an idea is more of a normal tendency of entrepreneurs. He adds that while it may admittedly hamper or slow down the desired growth of the private sector in Qatar, adequate support mechanisms can change such tendencies.

ranking of Qatar in terms of ease in doing business.

Niranjan Mendonca, head of retail banking at Mashreq Bank, Qatar further advises the government explore a single window concept for establishing new businesses. “Ideas that can be considered include: simpler paperwork by consolidation of the company registration and trade licence, options for freehold ownership, incubation and start-up business centre facilities,” Mendonca adds.

White echoes this sentiment when he recommends further ideas such as setting up some unencumbered free trade zones, fewer restrictions on imports, and fewer regulations for small businesses to legally operate. “It should be possible for people born and raised in Qatar to own 100 percent of their start-up even if they are not Qatari,” White says, adding, “Right now there is still the restriction that 51 percent ownership must be given to a passport-carrying Qatari. There are plenty of people living here in Qatar who are committed to the country but have not been given Qatari citizenship. These people, in fact, would make good entrepreneurs and the government should help them, along with Qatari nationals.”

Leading from that Fahad Al Kaabi, CEO of Manateq (formerly the Economic Zones Company), says that policies related to education and training need to be strengthened so that the spirit of entrepreneurship The Edge | 45

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Doha’s West Bay houses many of the countries state-owned companies that employ fresh graduates from Qatar’s universities. (Image Corbis)

can be inculcated right from the first stage of education.

According to Simon Hodges, CEO of regional business consultancy Alchemy Network, governments and bank support tend to build systems of financial controls, which are complicated for smaller businesses. However, banks find it difficult to support SMEs because the owners find it difficult to explain the main focus of their business and this in turn results in the banks lacking confidence in the company and what they are aiming to achieve.

“I believe that the government should provide support and training in these areas, and should also look at the process by which business is done,” continues Hodges, adding that improvements here could mean that most small companies might not have to hire a ‘PRO’ (public relations officer) to solely deal with local administration.

A question of means

Most Qatari banks have separate business divisions that address the needs of the SME segment, which on the surface at least indicates that obtaining a start-up loan should not be difficult.

Yet most experts argue that funding from local and international banks continues to be a problem, and that is one of the main reasons why a deep-rooted culture of entrepreneurship is still not 46 | The Edge

Stephen Brannon, director of communications at Silatech says that in many countries in this region, young people start up their own small, or micro businesses, simply because they have no other choice. That obviously is not the case in Qatar, as the country is well endowed with resources.

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“The government offers extraordinary financial support for Qatari entrepreneurs and has more organisations trying to help them than any other nation.”

– George White, Carnegie Mellon University in Qatar. flourishing in Qatar as it should be.

Alchemy’s Hodges feels that there is much financial help available for SMEs in the region, but it tends to come from the viewpoint of larger companies and hence does not provide the type of support small business owners need and find practical.

The paperwork that banks require from applicants is, for instance, a deterrent. Most banks require three years’ audited balance sheets, which most start-ups do not have.

Hindi of Qatar University adds that, in addition to cumbersome paperwork, there is an information gap and the borrowers do not exactly know the exact available opportunities to obtain project funding.

Saleh Al Khulaifi, manager at Bedaya Center goes a step further, offering that although local banks have separate business divisions that cater for SMEs, the terms of the loans that they offer is not significantly different from those in their other divisions.

Predictably, most banks The Edge spoke to were confident that the products that banks have for the SME segment are sufficient. Problems, if any, explains Mahmoud Mohammed Mahmoud, head of

SME Banking at Qatar International Islamic Bank (QIIB), are related to the risks that are associated with the financing process, especially those involving start-up units which are often seen lacking in audited financial statements, limited credit history, limited collateral available to cover the bank’s exposure and lack of experience and technical know-how.

Kenneth Clark, head of Enterprise Banking at Commercial Bank says, “One area where small companies need to become more active is embracing electronic banking channels which save companies time and money. Authorisation levels can be set in the system to give the owners and management as much comfort as possible to ensure they are used appropriately.”

So do the financial means, provided by banks and the QDB, not add to the motivation of the young people of the country who are in the stage of making a career choice to opt for entrepreneurism?

Hindi thinks that despite the financial support offered by banks, it still does not seem attractive enough to replace a good job title in the government.

Others like Stephen Brannon, director of communications at Silatech, believes that full-time entrepreneurship is not for everyone. There is absolutely no shame in recognising this, he says, that one is simply not cut out to start a business, adding, “However, there needs to be a greater understanding in our region that many of the world’s greatest entrepreneurs were not initially successful. Failure is a part of the game, and there should be no shame in failing if one has given one’s best shot.”

It is this aspect of how a society looks at failure that was discussed at length at the conference organised by Bedaya and KPMG. Partly a reason why entrepreneurship has not taken off as well as it has in the West, is the way society treats failure, said Santos of INSEAD, “There is no social condemnation of failure in the West and that is the reason why even after so many start-ups disappear, people still find the psychological strength to move on.

That is hardly the case in Arab culture.”

Why motivation fails?

While deciding on a career, there are still few Qatari youth who opt to be entrepreneurs. To White of Carnegie Mellon Qatar, the reasons can be broken down into two systemic characteristics: one,

Saleh Al Khulaifi, centre manager Bedaya says that though local banks have separate business divisions that cater for SMEs, the terms of the loans that they offer is not significantly different from those in their other business units.

QAR 200,000

Qatar’s minimum capital requirement for starting a business.

The Edge | 47

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potential entrepreneurs are drawn into other occupations because the immediate rewards are so attractive; two, the culture of small technology businesses that can support each other is missing. A technology entrepreneur, in his opinion, has to seek manpower talent, know-how, and physical materials from abroad and this is simply fraught with unknowns, delays and import or export barriers.

Hindi of Qatar University argues that, “Government jobs are more attractive to Qataris than private jobs and are definitely far more attractive than starting a company or a startup.”

Brannon says that in many countries in this region, young people start up their own small, or micro-businesses, simply because they have no other choice. That obviously is not the case in Qatar, as the country has many resources, “Youth unemployment is extremely low, especially for Qatari citizens, and the public sector has largely been able to absorb Qatari youth into the workforce.

Meanwhile, generous pay packages, job security and comfortable working hours make public sector positions highly attractive to citizens.”

In his opinion, starting a business, is risky (especially when bankruptcy is a possibility), demands long hours and hard work, and rewards are uncertain. “Most people throughout the world would make the same choice,” adds Brannon.

Safer bet: Part-time entrepreneurship

With high-paid secure government jobs, many Qatari youngsters start off with safer options, and experiment with a new venture, beyond their working hours and commit fully only when the venture has reached a measure of financial stability.

Does this reflect a mindset? And does this, in any way, further or hamper the cause of entrepreneurship and the growth of the private sector in Qatar?

Brannon categorises these as degrees of entrepreneurship and says, “I would argue that while few Qataris choose to become full-time entrepreneurs, there are very many that engage in what can be called part-time entrepreneurship with side businesses and enterprises.”

Khulaifi likens this trend similar to tech start-ups in Silicon Valley, which in their infancy, the owners were ‘weekend entrepreneurs’.

48 | The Edge

For Al Kaabi, CEO, Manateq, it is more of a normal tendency of entrepreneurs to test out before committing. He adds that while it may admittedly hamper or slow down the desired growth of the private sector in Qatar, proper support mechanisms, infrastructure and access to financing, as well as encouragement and motivation that builds confidence, can change such tendencies. Asked if this pattern could be interpreted as reflecting a mindset, White of Carnegie Mellon answers, “This is a roundabout way of asking if Qataris are risk-averse. I do not think there is a mindset problem at all.” Indeed commenting on the reality of Qatar’s entrepreneurial segment, Yacoub Hobeika, partner of KPMG Qatar says, “Actually testing an idea before investing deeply in it is something that we encourage as consultants and professionals. I don’t see why starting with a safer option and experimenting a new venture is something that will hamper the cause of entrepreneurship. It can, in fact, go one step further to encourage such a strategy.”

CASE STUDIES The Edge spoke with four Qatari entrepreneurs who have chosen to pursue the path of entrepreneurship – Saeed Al Marri, founder, QVSF; Layla Al Dorani, founder, Raw; Abdullah Al Noaimi, founder, Park View Pet Center; and Mohammed Al Kuwari, founder, i7 GLT. QVSF: Aiding construction in the Qatar market

Qatarian Vehicles Structure Factory (QVSF) designs and produces heavy industrial and construction vehicles such as flat-bed trailers, sewage and water tanks, tippers and container carriers, etcetera.

“We established a nucleus of the plant in the Old Industrial Area in 2004,” says Saeed Al Marri, founder of QVSF. He cites the most important reason for coming up with the idea for the project was the lack of such a facility in Qatar, adding, “There was difficulty for transport companies and companies working in the field of construction to get hold of this type of product in the local Qatari market. I myself have been the owner of transport companies and I have faced this difficulty, in addition to access to service infrastructure, after the vehicles were sold.” Over time, QVSF has expanded presence into the wider GCC market. Commenting on the level of competition from the neighbouring countries, Marri says that there is tough competition with factories, which helps improve the product quality and aftersales service.

Talking about the problems that QVSF faces, he singles out the lack of skilled hands. “This increases the cost of our training expenses.” www.qvsfqa.com

“Raw provides Qataris with healthy food choices.”

Layla Al Dorani’s definition of success is developing a product or service that will help the client, engages the community and creates positive change for her country.

She says, “In a society that is riddled with obesity and chronic diseases, I choose to take a stand against the norm, educating and fighting this epidemic that is spreading across my nation. This realisation dawned upon me when I was teaching a class of elementary school students and asked them to raise their hands if they had a fruit or vegetable in their lunch or breakfast. When only two out of thirty raised their hands I knew at this moment that I had to do something to change this culture and attitude towards food.”

Raw was born out of the compassion to help and make

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Layla Al Dorani, founder of RAW.

it easier for people to make smart choices. Raw Middle East (RAW ME) hopes to provide Qataris with healthy, convenient raw food choices.

Commenting on the problems she faces, Al Dorani says, “Being a young female Qatari entrepreneur, I face many challenges and hurdles on a daily basis as I work hard to try to establish and grow my company legally and organically. These hurdles do not deter me when I think about the bigger picture and when I receive feedback that my products are positively changing people’s lives. I consistently persist to find solutions and think unconventionally.”

With the support of Bedaya Center that has connected Al Dorani to countless mentors, she says, “I wouldn’t have had on my own. I attended workshops to increase my own personal knowledge on being an entrepreneur, and got answers to questions that the government at times has been unable to provide.” www.raw-me.com

Providing quality pet medical care at reasonable price

Abdullah Al Noaimi started an animal rescue operation in 2009, after he had rescued a couple of dogs, not in the best of health, off the street.

“After taking them to the veterinary clinics, I understood that there is a gap in the market when it comes to the quality of medical care of pets in Doha and I decided that it was time to open a veterinary centre that offered good quality medical facilities for a reasonable price.”

When he started researching what

it would take to open a clinic, Al Noaimi realised that it would be a little more costly than he had anticipated. “Initially, I had gone to my family to discuss the possibility of a loan, and while they had helped with the start-up costs, I found I was still in need of funding if I were to open the type of clinic that I had envisioned.”

It was at this time that Al Noaimi approached QDB for a loan and in July 2011, Parkview Pet Center formally started operations, with a veterinary clinic, pet grooming, pet boarding, pet relocation and a pet retail store.

Commenting on the reasons for the success of his venture, Al Noaimi says, “I feel that the significant reasons for my success are perseverance and never giving up on my dream. My vision was to be able to help the animals of Qatar, whether they were living in a loving home environment, or more importantly, living on the streets.” www.parkviewpetcenter.net

not stop at the stage of detecting goals in a fast and accurate way; it also records all details including goals, names of the player who scored the goals, goal scoring time and foul cards.”

Commenting on his invention, Al Kuwari says, “i7 GLT greatly helps referees since it includes a handheld device that is wirelessly connected to a goal post detecting system and cameras, which enables referees to make fast and accurate decisions without any hesitation.” i7 GLT, according to Al Kuwari, is one of the most advanced goal line technologies that conforms with all FIFA’s rules. “It was formally tested by seasoned professionals in the football field, and it has proved to have a 100 percent success. Consequently, our hopes and dreams for i7 are to be approved by FIFA which will help us gain wider recognition.”

Abdullah Al Noaimi, founder of Parkview Pet Center.

“I try to help human beings solve their problems through technology.”

Born and raised in Qatar, Mohammed Al Kuwari graduated from Qatar University and credits his family with having played a crucial role the biggest part in taking care of his talent in pursuing his inventions, he says, “to help human beings solve their problems through technology.” i7 is not only a goal line technology (GLT) but also a comprehensive system that serves referees by using football match management system and allowing everyone including the audience to enjoy a fair match. The system’s operation does

Mohamed Al Kuwari, founder and CEO, i7 GLT.

The Edge | 49

ISLAMIC BANKING

SAVINGS AND SHARI’AH

Globally, Islamic financial institutions are managing far more assets compared to the mid-1970s, yet in traditional Islamic markets, the growth of shari’ah-complaint banks is less spectacular. Against increasing global opportunities and competition in the sector, Simon Watkins and The Edge’s Aparajita Mukherjee analyse the international status quo of Islamic banking and investigate why Qatar, which has ambitions to be a centre of Islamic banking and hosts a large Muslim population, seems to have relatively better penetration in conventional banking.

T

he global Islamic finance industry as a whole has grown in size from around USD10 billion (QAR36.4 billion) of total invested assets in 1975 to just more than USD2.2 trillion (QAR8 trillion) in 2013, according to figures from 1st Ethical Trust in London. Indeed, Standard & Poor’s (S&P) forecast that shari’ah-compliant assets worldwide will sustain double-digit growth in the coming two to three years and most industry analysts project that the sector is growing twice as fast as conventional banking.

Yet, it also remains the case that the actual pace of expansion of Islamic banking compared to its conventional counterpart appears to be slowing in the Middle East. Looking forward, then, is this trend likely to continue, and if it does, will it be compensated for by growth in other geographic areas?

Slow growth in Islamic states

Within the key countries of the Middle East, where Islamic banking would be expected to be substantially solidifying its position – Kuwait, the Kingdom of Saudi Arabia (KSA), and the United Arab Emirates (UAE) for example – growth is in fact levelling off.

Part of the sector’s stasis can be attributed to already high levels of penetration, highlights AT Kearney’s Cyril Garbois, head of Middle East financial institutions practice, in Dubai.

Nevertheless, Garbois adds, there is no clear attempt by any Islamic banking providers in the region to differentiate themselves in this space by offering a global pure-play Islamic banking leader with a broad or specialised business model.

“Islamic banks are considerably smaller than their conventional competitors in their domestic markets.” – Cyril Garbois , AT Kearney Middle East.

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“There remains no Islamic Citibank or Islamic Goldman Sachs,” Garbois tells The Edge, “meaning that the Islamic banks in the region are considerably smaller than their conventional competitors in their domestic markets, and even the biggest Islamic banks are typically small compared to international conventional competitors.”

To Middle Eastern investors, then, the overall banking offering from these smaller institutions clearly lacks scope, especially as many of the world’s biggest conventional banks continue to launch Islamic windows, with HSBC a leading example across the region. “As a result, merely being shari’ahcompliant is not a major differentiator,” Garbois underlines.

According to the Qatar Financial Centre (QFC), Qatar is taking a prominent role in promoting the growth of Islamic finance.

The QFC is contributing, for example, by making special provisions for Islamic finance within an attractive low tax regime to ensure that its principled approach to interest is not disadvantaged. In a 2013 study, the QFC Authority released in partnership with the International Tax and Investment Center, based in Washington DC, Turkey and the QFC were found to have the most Islamic finance-friendly tax systems out of eight MENA countries.

The QFC also supports the development

USD billions

“When the QCB directive came into effect, Qatari Islamic banks had expected an influx of customers but many customers decided to switch back to conventional accounts with their existing banks instead.” of (re-) takaful products and the issuance of sukuk as an asset class in response to increasing investor demand. The QFC’s plans include developing a framework for shari’ah-compliant asset management.

Leading shari’ah-compliant firms such as Qatar First Bank and Abu Dhabi Islamic Bank have QFC licences. However, Nicolas Mackel, chief executive officer (CEO) Luxembourg for Finance (LFF), says that though Qatar has the assets, the expertise and the will to become a major Islamic financial centre, local investors are inhibited by the lack of a domestic investment fund market. He adds, “Qatar has one of the highest savings rates in the world, at 49 percent of GDP, but most private wealth is held abroad or invested in real estate.”

QAR

2.2

trillion

Total invested assets in the global Islamic finance industry in 2013.

CREDIT GROWTH COMPARISON IN QATAR

140

30%

120

25%

100

20%

80

15%

60

10%

40

15%

20

5%

0%

0

Domestic Credit (left-axis) Source: Standard & Poor’s

52 | The Edge

Islamic banks credit (left-axis)

% of credit owned by islamic banks (right-axis)

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24%

The percentage of assets managed by Islamic banking in Qatar in September 2013.

Mixed regional offerings

While Qatar prohibited conventional banks from offering Islamic windows through a Qatar Central Bank (QCB) directive in February 2011, rating agency Fitch highlights the mix of two categories of banking in other countries in the region.

The combination of a well-known brand, an established network, service quality, and cost-efficiency savings will give incumbent conventional and mixed-offering banks a significant advantage over new Islamic banks, according to Fitch.

Indeed, further referencing Fitch, although there is demand for Islamic banking, and its growth across the Gulf region is likely to outpace that of conventional banking, recent market behaviour suggests that customers in Oman, for example, will opt to get these services from established banks, which offer a mix of conventional and shari’ahcompliant products.

These include, of course, Bank Muscat,

While Qatar prohibited conventional banks from offering Islamic windows in February 2011, rating agency Fitch highlights the mix of two categories of banking in other Arab countries.

and HSBC Bank Oman, which are both in the process of setting up Islamic banking arms in preparation for the upcoming rule changes.

Indeed, a recent Fitch report highlights that while the established banks will need to keep their existing and Islamic operations separate at the point of contact with the customer, there will be “plenty of opportunities for cost savings at the operational level”.

This general notion of the lack of interest from customers in the type of wholly Islamic banking currently available in the Middle East (via small, non-global product architecture) was seen recently in Qatar. When the QCB directive came into effect, Qatari Islamic banks had expected an influx of customers as those with shari’ah-compliant accounts switched banks.

However, in practice it seems many customers decided to switch back to conventional accounts with their existing banks instead. However, at present the situation appears to be changing, thinks Timucin Engin, associate director of S&P in Dubai, thanks to in part, for example, the high degree of support from the Qatari government, as a function of its core strategy of growing Qatar as a global Islamic banking centre.

Overall Islamic banking now accounts for around 25 percent of the country’s entire banking system in terms of assets, up from 13 percent in 2006, and S&P anticipates that Qatar’s Islamic banks’ assets will reach USD100 billion (QAR364 billion) on the balance sheet by 2017, up from USD54 billion (QAR196.6 billion) at year-end in 2012.

The Qatar Economic Insight 2013, cites that conventional banks account for the largest share of banking assets (72 percent). Mackel of LFF interprets this relative slow growth of Islamic banking in Qatar and cites three reasons. First, he says, Islamic banking is a relatively recent phenomenon: Qatari institutional investors and entrepreneurs have operated for decades in the conventional sphere.

Second, Islamic banking contracts remain complex and unfamiliar to the international community. Third, until and unless there is a competitive shari’ah-compliant equivalent for all the products and services required by a company operating in a global Suliman Al Salhi, chief business officer at Qatar First Bank (QFB) says that Islamic economy, the conventional banking system finance is still a niche market and a number of issues such as the risk culture, regulation and development of innovative retail products have to be addressed will continue to be the principal method. to allow its evolution into a profitable service-oriented industry competing with conventional banking.

Suliman Al Salhi, chief business officer The Edge | 53

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SHARI’AH IN THE UK The United Kingdom is a potentially fertile ground for ethical banking, given its recent past Given the recent spate of banking scandals in the United Kingdom (UK), including LIBOR-fixing, interest rate swap and payment protection insurance mis-selling among others, it may well be that the country provides perhaps the single best opportunity for the expansion of Islamic banking within the EU region as a whole. Indeed, only recently the UK parliament tabled an early day motion calling on the UK Government to: “Promote Islamic finance’s principles of community banking and socially responsible investing to enable long-term growth, employment and prosperity”. And, following this was the groundbreaking announcement by UK Prime Minister David Cameron that the country would become the first Western country to launch its own Islamic bond worth around GBP200 million (QAR1.2 billion), as early as next year. It may not be quite so easy initially for Islamic banking itself to follow in the slipstream of such capital markets developments, with around 20 percent of the UK’s three million Muslims living outside the realm’s four major conurbations, although having an online Islamic banking service would probably make an internet-centric service extremely profitable. The same is true for Islamic insurance (Takaful) offerings, thinks Ahmed Al Janahi, managing director of Noor Takaful, in Dubai, who estimates that the global Takaful market will increase at a rate of 30 to 40 percent every year in the next three to five years, and could reach as much as USD11 billion (QAR40.04 billion) by 2015.

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ISLAMIC BANKING ASSETS BREAKDOWN Turkey 3% Qatar

Others 4%

3%

Kuwait 6% Malaysia 8%

Iran 55%

UAE 9%

KSA 13% Source: AT Kearney analysis

“In the eurozone, the overall Islamic banking penetration rate remains virtually nonexistent.” – Suliman Al Salhi, chief business officer, QFB. at Qatar First Bank (QFB) says that Islamic finance is still a niche market and a number of issues such as the risk culture, regulation and development of innovative retail products have to be addressed to allow its evolution into a profitable service-oriented industry. Al Salhi adds, “Qatar has taken major steps to grow its Islamic finance sector, facilitating the establishment of new banks such as Barwa Bank and Qatar First Bank. Qatar has one of the fastest growing Islamic banking sectors driven mainly by the huge demand for local credit to fund the government spending required for large-scale infrastructure projects. Islamic banks in Qatar continue to grow by developing new products, diversifying their funding resources and geographically expanding.”

Asian and European growth

Globally, given that it rarely exceeds a third of total market share, several potential markets with large Muslim populations remain largely untapped, such as Malaysia, Indonesia, and India. Even better prospects, perhaps, are the extremely sizeable Muslim populations in the eurozone region, and in the United Kingdom, in which the overall Islamic banking penetration rate remains virtually non-existent.

For Asia as a whole, one problem in terms of shari’ah finance in general is the difference of interpretation of the Islam part of Islamic finance. While, for example, Saudi Arabia follows the stricter Hanbali school of Islamic thought, Malaysia adheres to the less conservative al-Shafi school of Sunni Islam (and consequently benefits from being home to the largest Islamic

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49%

Qatar’s savings rates, as a percent of its gross domestic product.

In a financial sector dominated by Southeast Asian states such as Malaysia, Arab and particularly Gulf states such as Qatar are rapidly rising to prominence in global Islamic banking and finance. (Image Corbis)

bond market in the world). Much of the remaining GCC steers more of a middle course, with its following of the Maliki school of Islam. However, Gregory Man, senior lawyer specialising in Islamic Finance for Clifford Chance in Hong Kong, highlights as an increasing number of such deals go through the market, the likelihood is that there will be more of a convergence over what is deemed acceptable for trading purposes for Islamic finance products, resulting in the expansion of the market for Islamic banking, albeit one with an overall conventional banking architecture.

The European Union (EU) area as well offers a large untapped customer base, with more than 20 million Muslims in the area under supplied with Islamic finance offerings, despite strong support from various European governments and regulatory authorities for the Islamic finance model, and the unification of the regulatory framework within the European Union, highlights Marco Lichtfous, partner specialising in Islamic finance in Deloitte, Luxembourg. To redress this situation, he adds, comes the recent announcement of an agreement to set up the first Islamic bank in the Eurozone – Eurisbank.

With a start-up capital of EUR60 million (QAR297 million) Eurisbank intends to offer

precisely that entire spectrum of financial services in retail, corporate, and private banking, all within the Islamic finance structure that has been lacking in such operations within the Middle East, according to Ammar Dabbour, managing partner in Excellencia Investment Management.

Such a move, and others perhaps in the pipeline, should find their momentum driven further as the pool of shari’ahcompliant assets in the region develops towards a critical mass, and the Islamic capital markets base in the area broadens and deepens. There have been a number of extremely significant developments in this regard recently.

One such step was the recent launch by the London Stock Exchange of the ‘FTSE Shariah Developed Minimum Variance Index’ series. This is founded on a business screening process whereby companies involved in ineligible activities are excluded, with the risk curve within these parameters delineated by overweighting stocks that reduce index volatility and underweighting stocks that increase index volatility.

Underlying the entire index in keeping with shari’ah principles is that it has been created in partnership with Yassar Limited, an independent consultancy and leading

INAUGURAL WESTERN OFFER The race for first Western sukuk gains momentum Following British Prime Minister David Cameron’s signalling that the UK (Aa1/AAA/AA+) intends to issue a debut GBP200 million (QAR1.2 billion) sukuk in 2014, triple A-rated Luxembourg has presented a draft bill to its parliament to issue its own sukuk.

According to recent statement from the Duchy, the sukuk would total EUR200 million (QAR994 million) and denominated in either euros or US dollars, and would also be issued this year.

The bill is waiting to be passed in Luxembourg’s parliament, and with the UK announcing a delay in the issuance of their sukuk, Luxembourg will become to first to issue. It also has the advantage of having identified the underlying assets that would be used for its sukuk.

In broader terms, although sukuk sales fell by 9.5 percent in 2013, to USD42 billion (QAR152.9 billion) after reaching a record USD46.4 billion (QAR167.4 billion) in 2012, according to data compiled by Bloomberg, in a market dominated by repeat borrowers, Moody’s Investors Service projects that this year around USD60 billion (QAR218.4 billion) will be sold, primarily by Malaysia and the Gulf countries.

Issuers in the Gulf Cooperation Council alone have about USD32 billion (QAR116.5 billion) of bonds and syndicated loans maturing this year that will require re-financing.

Yet, says Mohammed Dawood, global head of sukuk financing at HSBC, the bank that managed the most sukuk sales in 2013, “This year will see a shift to new issuers, with a lot more coming out of Asia, and a lot more issuance from outside of the traditional markets.”

Continued on page 76

The Edge | 55

TOURISM SERVICE IN QATAR:

THE NEXT STEP?

Qatar must lift its standards of service delivery if the tourism sector is to grow and thrive says an industry expert 56 | The Edge

tourism industry | feature story

As it stands today, the bulk of Qatar’s tourism is made up of business tourism, comprising as much as 65 percent of the market, with meetings, incentives, conferences and exhibitions (MICE) coming in second at 18 percent. So what does Qatar need to do further to grow the sector? Stenden University’s Robert Coelen has some answers.

by Shehan Mashood

8%

The amount Qatar’s tourism sector is expected to contribute to GDP by 2030.

P

rofessor Robert Coelen was recently appointed as the executive dean of Stenden University Qatar and spoke exclusively with The Edge about the potential for growth in the tourism sector, which in turn would mean the service and management industry which Stenden specialises in, would have a big role to play in the Qatar’s future. Issa Al Mohannadi the chairman of Qatar Tourism Authority at a recent press conference suggested that the tourism sector would be expected to contribute as much as eight percent to the country’s gross domestic product (GDP) by 2030.

Coelen, who was previously the president of all international branch campuses (Stenden have campuses in Qatar, Bali, Thailand and South Africa in addition to those in Netherlands), says some people view his move as a demotion. “I do not see it like that,” he explains, “I see it in terms of where can I have, with my ideas, my energy and my enthusiasm, the biggest impact? It is one thing to lead people with some ideas and hope they land. It is quite another being able to grab one of these campuses and start to move it. So, I asked my president whether I could look after one campus, because I felt I might be able to have more impact.”

So why Qatar? Coelen says the opportunities were simply too good to pass up. Qatar was the place where he felt Stenden could be the most meaningful to both Qatari society and their main campus.

Plans are already in place to develop the industry, says Coelen, and touristic infrastructure development is already underway in some cases. “For the meeting infrastructure, look at what is being developed next to City Center in the way of a convention centre,” he says. “Look at the 118 hotels that are being built as we speak, look at the plans for the region’s biggest zoo, for theme parks, you name it, it’s all being planned.”

The government, adds Coelen, is also encouraging capital investments within the sector, which is expected to increase by 10.7 percent between 2013 and 2017. There is also an effort to turn Qatar into a hub for sport, whether it is football, tennis or golf. All this for Coelen is proof that the government sees a different Qatar in the future.

A job creator?

There are currently 20,000 people involved

in the hospitality industry in Qatar, says Coelen. By 2030, this number is expected to increase by another 100,000 according to the QTA. “That is a lot of people to manage, a lot of activity in the domain that we feel we are specialists [in],” he adds.

Coelen believes it is imperative for Qatar to create a uniform level of service excellence throughout the country, a concept which he calls Qatar Plus, something it is in dire need of at the moment. “If a ride from the airport in a Karwa taxi is a disaster, or your arrival at the hotel is a disaster, or you have trouble getting to the museum because of insufficient levels of service, yeah sure you might have pockets of excellence but they are not going to work for you,” he explains.

Relating a recent experience Coelen himself had, arriving at the Doha Airport, a taxi driver who had only been in Qatar for 15 days and did not know how to get to his apartment. “I am thinking what has this company done to help this person be efficient? Nothing. They probably tested if he could drive a car, that he was well groomed, spoke a little bit of English. If I [was a] tourist, I would get angry.”

However, Coelen believes the importance of service is slowly beginning to take importance among local businesses.

“I think we have to work on senior management, but at the same time work on the service quality of the operational staff,” he says. For example, it is now compulsory for tour guides in Qatar to go through a programme and pass an exam at Stenden before the QTA approves an official tour guide licence.

Coelen is hoping to have a concept of Qatar Plus in the next few weeks, which he will present for a request to fund a sixmonth study. “I am talking very short leadtimes. 2022 is bearing down on us. It is just eight years away,” he says. “I get a feeling from all the conversations I am having that they need better service, but it requires a cultural shift. If we teach locals to be hotel managers, we better make sure they have operational staff who also have a service mindset. If you do not do this hand in hand, then you have a head that doesn’t know where it wants to go, legs that know how to run, but are not being told to run or given the freedom to run.”

The devolution of trust is one of the most important things an organisation can do to let individuals contribute their worth The Edge | 57

to the success of an organisation, says Coelen. Whether that is happening fast enough in Qatar, only time will tell.

Growth opportunities

If Qatar is able to tackle its service problem, there are numerous trends emerging in the tourism market that are waiting to be capitalised on. The halal tourism industry is one of them. Many Muslim-majority countries have started to offer specialised hotels that do not serve alcohol, beach resorts with sections for covered women and heritage-based tourism packages.

A Zawya report on the State of the Islamic Economy estimates the Muslim tourist market was worth USD137 billion (QAR499 billion) in 2012, excluding the Hajj and Umrah. Additionally, the Gulf Cooperation Council which represents only three percent of the global Muslim population made up 31 percent of the total Muslim travel expenditure. Neighbouring countries such as Saudi Arabia that had an outbound tourism expenditure of USD17 billion (QAR61 billion) and even Iran that spent USD18 billion (QAR66 billion), could be a boon to Qatar’s tourism industry.

However, there have been challenges in creating hotel concepts and other touristic infrastructure that are offered in a way that is inclusive of non-Muslim customers.

At Stenden in Qatar, Coelen says they are working on developing a semester focussed on doing business in the Arab world. He is confident that many students at their other campuses would be interested in such a

Investing in halal tourism could prove a boon to Qatar’s tourism industry as some of the highest spending Muslim countries, when it comes to tourism, are in close proximity to Qatar. (Image Corbis)

58 | The Edge

“I think we have to work on senior management, but at the same time work on the service quality of the operational staff.” – Professor Robert Coelen.

tourism industry | feature story

course. Inter-cultural issues will be one of the biggest challenges these destinations will have to contend with, asserts Coelen.

Alcohol consumption is certainly an issue that continues to emerge. Coelen says the authorities need to come up with a definitive position on the matter. “You hear all these stories, if you are going to have the 2022 World Cup, you need to relax the alcohol laws or you aren’t going to have any visitors. The notion that it is a rowdy crowd, I haven’t done any research, but that is not my image of the global soccer-loving crowd,” he says.

“What I hear is that Qatar is particularly focused on providing a family environment in the Arab sense. That is good, it is a segment of the market,” says Coelen.

However, he is of the opinion that there is a bigger market that Qatar needs to focus on, the middle class. Specifically, from the Asia-Pacific region, which is set to explode in the coming decades.

According to an Amaedus report, over the next two decades, as much as three billion Asians will enter the middle class, and by 2050, their per capita income could rise 600 percent in purchasing power parity equalling Western markets.

“This is the bulk,” claims Coelen, “if you are investing in the future, what are you taking into account? Europe? North America?

I do not think so. India, China, South-East Asia, I believe that this is the reality we have to plan for.”

Professor Robert Coelen, the executive dean of Stenden University Qatar, the institution which specialises in hospitality management, tells The Edge that Qatar needs to identify the future trends in the tourism industry and invest wisely now.

Unprepared or unrecognised?

This is perhaps where Qatar’s trajectory of investment is at odds with global trends. For example, of Qatar’s 127 hotels currently active, three-quarters of them are in the luxury and upscale sector.

The segment of the market has grown by almost 20 percent year on year over the past three years, and half of the 124 planned hotels in Qatar are to be for the luxury and upscale sector.

“If I were investing in hotels right now, I would be going for threeand four-star,” says Coelen. “They are the ones that will continue to fill.

Yes, there is always going to be a market for the super-wealthy. But, we are talking about investing in the future. There are going to be more people that will be able to afford three- and four-star hotels.”

Qatar’s high-end hotels are already beginning to see downward pressure on room prices as more luxury hotels come online and compete for a market that is just not growing at the same pace.

“Looking around here, you would get the impression that it is only for the rich, I mean there is talk of a seven-star hotel?” he says.

In 2012, occupancy levels in five-star hotels decreased by 6.8 percent from the previous year, while three- and four-star hotels saw an occupancy growth of 1.4 percent and 6.3 percent, respectively. However, three-star hotels have seen only a small increase in supply of three percent between 2010 and 2012.

The profile of the population on the move is going to change from Europeans and North Americans, to Asians with a different life experience, and a different set of expectations, explains Coelen.

Building hotels and even attractions such as theme parks with the current model in mind might not be the best way to go, he adds.

This will be one of the topics Coelen will bring up at the upcoming Tourism in Tomorrow’s World conference being held in Qatar in February. “Something that takes the next four years to build, it will be 2018, already the Asian-Pacific middle class will be bigger than anything else, and spending more than any other region. I think people have to be very open-minded about what they predict their market is going to be,” he concludes.

The profile of the majority of travellers is changing, says Professor Robert Coelen the executive dean of Stenden University. The future middle class will mainly consist of Asians, a market Qatar must plan for. (Image photosbymilo)

The Edge | 59

Special Section

QATAR’S AUTOMOTIVE SECTOR:

GREAT EXPECTATIONS UNDERLIE GREATER COMPETITION

As many automotive companies in the Middle East show record sales for 2013, the year 2014 comes with great expectations for further growth in the sector. by Farwa Zahra

special section | automotive sector

W

ith 2013 annual sales results for many automotive brands in Qatar recently announced, the year proved lucrative with most automotive companies hitting increased sales.

Hyundai Motor Company announced 2013 as a year of record sales, indicating a 7.5 percent increase with 328,856 units sold in the Middle East. Alfardan Automobiles announced 12 percent growth in BMW Group sales for 2013.

Selling 10,647 cars, Audi’s Middle East sales also exceeded the company’s forecast, showing a 16.3 percent increase compared with 2012. For Volkswagen Middle East, the annual growth rate reached 30 percent, selling 14,000 vehicles across eight countries. Jaguar Land Rover’s sales in the region outranked its global performance with a 46 percent growth across the Middle East North Africa (MENA) region. And, it seems the

rising trend is here to stay.

Tarek El Habbal, head of marketing for NBK Automobiles, the official distributor of Mercedes-Benz in Qatar, expects about 20 percent growth in 2014 compared with 2013.

Qatar Motor Show

Against the backdrop of the Middle East’s growth statistics in the automotive sector reflecting consumer interests, Qatar Motor Show (QMS) once again returns to Doha in February 2014. Attracting 150,000 visitors in its 2013 edition, the show this year is scheduled to fall between 21 and 25 February.

“QMS enriches the local market and provides growth to the automotive sector in Qatar which leads to customer benefit,” highlights El Habbal. Waleed Al Sayed, general sales manager for Jaidah Automotive, official distributor of Chevrolet in Qatar, agrees when he says,

The 2013 edition of Qatar Motor Show attracted about 150,000 visitors. When the show returns in February, it is expected to draw larger crowds in Qatar in 2014.

62 | The Edge

“We are still forecasting steady growth in the automotive sector at large which will in turn provide growth opportunities for us.” - Tarek El Habbal, head of marketing for NBK Automobiles.

sports investment | cover story

Former Prime Minister Hamad bin Jassim Al Thani takes a closer look at a sports car at the Qatar Motor Show 2013. The show attracts thousands of visitors every year.

“QMS has always been a vital tool [for] introducing new models and [showcase] future concept cars.”

While the launch of new models is not specific to motor shows, such events work as display portals for multiple brands over a short time. “You need to touch and feel the cars, the fit and finish, the beauty, the design, the materials that we use,” says Thomas Milz, managing director, Volkswagen Middle East.

Behind steady growth

Thomas Milz, the managing director for Volkswagen Middle East tells The Edge that motor shows are an opportunity for visitors to get a real feel of a car.

On the back of rising sales in Qatar are both increases in expatriate influx as well as the growing interest of customers. “The local market is expected to grow around seven percent this year. I believe this is more a function of the Qatari demographics than a global market trend,” says Al Sayed.

The rising demand for automobiles is also reflective of increasing competition among the main players. “The market is growing steadily in Qatar and the workforce is forecast to steadily increase over the coming few years, which acts as a strong base for our forecasted growth,” El Habbal tells The Edge.

Explaining the level of competition

7%

The expected growth of Qatar’s local market in 2014, according to Waleed Al Sayed of Jaidah Automotive.

The Edge | 63

special section | automotive sector

Waleed Al Sayed, general sales manager, Jaidah Automotive, says all major brands are represented in Qatar’s market and although the country as a whole has a high per capita income, price pressure is always present.

in Qatar, Jaidah Automotive’s Al Sayed says, “All major brands are represented in the market and although the country as whole has a high per capita income, price pressure is always present.” A major factor behind this price pressure is lack of distributor’s say in deciding prices.

“We have very little influence over the manufacturers’ price which increases on average five percent each year. However, introducing the increase to the market is

somewhat difficult,” he adds.

El Habbal talks about the price influencers in the region, “The prices are determined on [a] regional basis by Daimler Middle East and Levant and we follow the pricing schemes.”

Major trends

Within the Qatari market, Al Sayed notes a trend in favour of smaller cars, that have shown improved sales. For the Sports

SUV sales are backed by large family sizes and the rugged terrain while the increasing expatriate population has driven the growing demand for light vehicles, states EY’s report.

Motor shows have always been the place for companies to showcase both new and concept cars. Pictured here is a Volkswagen Race Touareg.

64 | The Edge

special section | automotive sector

The risk factors

Tarek El Habbal, head of marketing for NBK Automobiles, official distributor of Mercedes-Benz in Qatar tells The Edge that the prices are determined on regional basis by Daimler Middle East and Levant.

Utility Vehicles (SUVs), the customer focus has shifted from mid-tier to luxury SUVs, he says. EY’s 2013 report Mega Trends Shaping the Middle East Light Vehicle Market rationalises this demand, stating that SUV sales are backed by large family sizes and the rugged terrain while the increasing expatriate population has driven the growing demand for light vehicles.

Kevin Hughes, general manager of Q-Auto, distributor of Audi and Volkswagen in Qatar, believes that meeting the customers’ expectations is the key to success.

66 | The Edge

What tags along with growing sales is the increasing traffic congestion on the roads of Doha. Of late, congestion has become the norm here. Considering the repercussions of a further influx of expatriates in the future, Qatar has started public transport mega projects. Industry experts, however, believe that planned transport systems will not substantially affect the health of the automotive sector. “I don’t think it will have a material impact. I say this because most people are passionate about cars. There is nothing like driving away from a showroom in a brand new car. Public transportation will never replace that feeling, though it is too early to say,” explains Al Sayed. Expressing similar sentiments, El Habbal adds, “We are still forecasting steady growth in the automotive sector at large which will, in turn provide growth opportunities for us.”

When compared with other markets, the average growth rate of the automotive sector in the Middle East still has a long way to go. However, the relative growth of sales over the last few years in the region is indicative of market’s potential. Increasing competition, hence, also calls for more efficiency on part of both manufacturers and distributors.

Speaking about some initiatives to gain a competitive advantage in Qatar’s market, Milz tells, “We and our partners [in Qatar] have invested in facilities, showrooms, but also in service excellence which we have as technicians’ training centres.”

Explaining further about gaining a competitive edge through aftersales services, Kevin Hughes, general manager of Q-Auto, distributor of Audi and Volkswagen in Qatar, says, “We have one of the few master technicians within the region, a highly-skilled European master technician to make sure that we can offer services properly for the first time,” further adding, “We have two VW Touareg service mobiles coming into action over the next few weeks.”

The service mobiles will save customers from the hassle of taking their cars to diagnostic centres.

Revealing the gist of his experience, Hughes concludes, “If we keep the ordinary things and do the things that people expect us to do and do them really, really well, it will benefit our success.”

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“We and our partners [in Qatar] have invested in facilities, showrooms but also in service excellence which we have as technicians’ training centres.”

– Thomas Milz, managing director, Volkswagen Middle East.

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THE ORGANISATIONAL

EFFECT IMPROVING QATAR THROUGH ISO:9001

68 | The Edge

iso standards | business management

The Qatar National Vision 2030 aims to transform Qatar into a more advanced country, one capable of sustaining its own development and providing a higher standard of living to its people.

So it stands to reason that the adoption of world-leading business practices and models is needed to realise these goals. Internationally proven management frameworks can greatly facilitate the economic and social growth and thus there is a strong case for all organisations in Qatar to adopting ISO 9001, writes Omer El Tigani

A

s information can be easily disseminated in a very short time and can be propagated without barriers, management theories have been continuously developing until they have reached what is now known as Total Quality Management (TQM) and Business Excellence. Quality is the key value that all societies, organisations, and individuals are aiming to achieve. It is a journey in which organisations check and verify previous achievements as well as the organisation’s current situation, and accordingly plan for the future.

Many quality practitioners believe that the correct starting point in the quality and excellence journey is building a complete documentation for an organisation as per the ISO 9001:2008 requirements.

On a national scale, the 2022 World Cup is a major goal for Qatar and its people, who all must deliver their best to create a successful and top-quality event in eight years’ time. Therefore, producing products and presenting services of the highest quality is the top priority for all organisations operating in the different sectors of Qatar until then.

The number of ISO 9001:2008 certifications in Qatar has increased remarkably in recent years, which indicates the degree of interest and the real intention of Qatar’s organisations to achieve the desired results, sustain the high level of quality and make use of the tremendous benefits of this international accreditation.

However, it is important to highlight that ISO certificates as a piece of paper should not be the ultimate aim of the organisation. All must know that certification should come as the result of a strong and effectively operating quality management system (QMS), that adds value to the organisation by increasing productivity, improving performance, reducing process cycle times, cutting costs and improving the quality of products and services.

One of the major values that ISO 9001:2008 QMS adds to organisations is the way operations are organised into interrelated processes which work in harmony to eventually deliver the desired results. Each process in the QMS is documented in understandable work procedures, so that every employee knows specifically what he or she is responsible for and in what type and shape their output(s) should look like. This greatly reduces the time loss and the repetition that some organisations currently suffer from.

The process thinking approach provides more focus on the quality of the final output, which assists stakeholders to easily measure the performance of the process and benchmark the results with any other similar process(es) inside or outside the organisation. This identifies bottlenecks and problems to be reduced or eliminated for the next cycle – in a continual improvement cycle towards operational excellence.

Customers and colleagues

Nobody can deny the critical roles of customers in organisations’ lives. The ISO 9001:2008 standard gives special attention to the perception of customers regarding the products or services they receive. The

The number of ISO 9001:2008 certifications in Qatar has increased remarkably in recent years.

standard strictly requires organisations to achieve total customer satisfaction, which leads to repeat business, more sales referrals and accordingly, business growth.

Implementation of the ‘internal customer concept’ is another positive outcome organisations embracing ISO 9001:2008 can consider. Internal departments, sections, divisions, units and even individuals should deal with each other as if in a customer-supplier relationships, where the supplier has to meet requirements of customers, and customers should provide their suppliers with data and information needed to deliver the desired outputs. This leads to tremendous benefits for the organisation, such as improving competency, increasing productivity, improving communications among departments and employees, optimising the use of resources, reducing process cycle time, etcetera.

All or nothing

Unfortunately, the benefits of the ISO 9001:2008 QMS may dramatically reduce if not implemented across all functions. Many organisations implement the ISO 9001:2008 QMS and obtain the consequent approvals, rewards, and certificates, but do not implement quality management practices on the ground.

Accordingly, no tangible values are added to either the organisation’s business or to the organisation’s customers. When just the certification is the ultimate target for the organisation’s management, commitment to quality will, in fact, decline as resources are diverted towards this goal. As a result, employees may question the credibility of the quality management system and start to view the requirements of the ISO 9001:2008 standard as dull – and even begin to resent it as something that creates a great deal of additional work.

For these reasons, implementing new management frameworks can be a major The Edge | 69

business management | iso standards

ISO: BEHIND THE ACRONYM The International Organisation for Standardization (ISO) is the world’s largest developer of voluntary International Standards. Founded in 1947, it is a non-governmental organisation (NGO) based in Geneva, Switzerland. It has to date published more than 19,500 international publications, covering almost all aspects of technology, manufacturing and business, from the food industry to computers and information security, laboratories, energy management, environment management, risk management and social responsibility.

Some ISO families include: ISO 9000 (Quality Management); ISO 14000 (Environment Management); ISO 22000 (Food Safety Management); ISO 31000 (Risk Management); ISO 26000 (Social Responsibility); ISO 50001 (Energy Management), and ISO 17025 (Competence of Testing and Calibration Laboratories).

The ISO is a worldwide federation of national standards bodies from more than 160 countries around the globe with different membership levels. Some countries are correspondent members and others are subscriber members. Laboratories and Standardization Affairs (QS) is the national standards body in Qatar. It was established in 2002 and is currently affiliated to the Ministry of Environment. Qatar, represented by Laboratories and Standardization Affairs (QS), is a full member (or member body) which can influence ISO standards development and strategy by participating and voting in ISO technical and policy meetings. In addition to that, full members are able to sell and adopt ISO International Standards nationally.

The ISO 9000 (Quality Management) is the most famous of the ISO families, as it contains generic concepts that can be adopted by any organisation, regardless of its sector, type, size, structure, or maturity.

ISO 9001:2008 Standard is the only auditable publication in the ISO 9000 (Quality Management) family.

It stipulates specific requirements that organisations must fulfil to obtain the ISO accreditation. Organisations obtain ISO accreditation as a result of thorough audit processes performed by internationally licensed auditors.

The beauty of the ISO 9000 (Quality Management) family, especially the ISO 9001:2008 Standard, is that it assists the organisation to establish a complete set of documentation, which is called Quality Management System (QMS).

The major component of this set of documentation is the specific organisation’s own work procedures which describe how work should be done for a higher level of quality of products and services, to satisfy organisation’s stakeholders and exceed expectations.

The other part of the documentation is a set of governing work procedures that guide the organisation to implement, maintain and continually improve the whole quality management system (QMS).

70 | The Edge

challenge for organisations and must be done correctly from the outset lest, they be a waste of resources.

Good preparation is the key to overcoming any obstacles in embracing ISO 9001:2008 and should entail: • Commitment: Senior management must understand and be convinced that the QMS will add important advantages to the organisation. This group determines the strategic direction of the organisation to which the quality policy and objectives will be aligned and should be totally committed to the establishment, implementation, maintenance, and continual improvement of the QMS. A key responsibility is the continuous review of the adequacy of the QMS and assurance of the availability of resources needed to achieve the organisation’s goals.

• Awareness: Conveying the right message prepares the organisation as a whole. TQM is not a programme with a defined endpoint; it is a strategy that can be effective only with long-term commitment and dedicated application by senior management and all employees. Thus, it is important to communicate to employees that while ISO 9001:2008 certification is an important milestone during the quality journey, obtaining or maintaining the certificate is not the ultimate aim.

• Communication: For a successful QMS implementation, all of the organisation’s employees should understand that quality is everyone’s concern. Therefore, the efforts of people throughout the organisation should be integrated during the establishment, implementation, maintenance and continual improvement of the QMS. • Continual Improvement: This is a key methodology in leading organisations to business excellence, which definitely enables organisations to excel in all aspects, including the financial.

In closing, the ISO 9001:2008 QMS enables organisations to demonstrate commitment to quality and stakeholders’ satisfaction; and management and employees will mobilise their efforts to the highest full potential to benefit the organisation. ISO 9001:2008 QMS aims to make organisations up to 100 percent efficient to ensure that everybody in the company works to accomplish the organisation’s vision, mission and strategic goals. Small and large organisations, which operate all manner of processes from the simplest to the most complex, are ultimately guided to becoming totally effective in the business they set out to do.

Dr. Omer El Tigani is a quality management and organisational excellence consultant.

ISO 9001 adds to organisations in the way that operations are organised into interrelated processes, which work in harmony to eventually deliver the desired results.

Inside the minds of leading business figures

business insight ValuStrat’s competitive advantage is that it is from the Middle Eastern region >72 The Edge spoke exclusively with Bilal Amanullah Moti, managing director of ValuStrat LLC Qatar, about the local advantage he says his firm holds in the Qatari market, as well as their pro bono work.

also in this section

74

Employee productivity is empowered by flexible work options Regus’ country manager for Qatar, Alina Gomotirceanu discusses how flexible working conditions could boost productivity in the Qatari workforce.

72 The outlook of Qatar’s consulting market is positive Bilal Amanullah Moti, managing director of ValuStrat LL, told The Edge, considering the country’s large development agenda which will require both a higher and broader level of international and regional expertise across all sectors. (Image Corbis)

The Edge | 71

business insight | consulting

STRATEGIC ADVICE

Hailing from the Middle East can be a strategic competitive advantage ValuStrat LLC, licensed by Qatar Financial Centre Authority (QFCA), is an international company providing advisory and asset valuation services. Talking exclusively to The Edge, Bilal Amanullah Moti, managing director of ValuStrat LLC Qatar forsees significant growth opportunities in Qatar, and points out the competitive advantage that the firm has compared to global consulting companies and why his firm believes their presence in Qatar adds to their overall value proposition.

Tell us about the business focus of ValuStrat?

ValuStrat provides a variety of strategic, business and technical advisory services; asset appraisal and valuation; loss assessment and adjustment; and industrial asset divestment services, to the highest international standards.

We provide these services in Qatar to financial institutions, government entities, real estate, oil and gas, industrial manufacturing, trading and services companies and business groups, to help them make prudent decisions about financing, investment, insurance and financial management.

Our geographical focus is the Middle East. We have been operating in the region since 1977 with our headquarters in the United Arab Emirates (UAE) and offices in Saudi Arabia. We have a presence in Dubai, Sharjah, Riyadh, Jeddah and now in Doha. The group has served more than 750 clients across a wide variety of sectors in the MENA region.

“Prudent asset valuation is key to making sound financing, investment, divestment and insurance related decisions,� said Bilal Amanullah Moti, managing director of ValuStrat LLC Qatar.

72 | The Edge

How different is ValuStrat from global consulting firms such as Accenture?

Accenture is a large global company. Our competitive proposition is that we are from the Middle Eastern region and our business strategy is to primarily serve Middle Eastern clients and markets. We are serving our clients in this region for more than 35 years, so we carry a deep-rooted relationship and experience in local markets. We understand the regional economic, investment and social as well as cultural practices, regulations and sensitivities, and make our recommendations accordingly. At the same time, we deploy our globally acquired experience and acumen towards regional development. Other difference is that the global consulting firms have a larger scope of services. We specialise in niche asset valuation and advisory service lines.

consulting | business insight

“Qatar’s targeted projects and developments provide a direct and sizeable business opportunity.”

Lastly, since the Middle East is our home base, we are present here at all times and have invested long-term in the region by way of local human resources, infrastructure, systems and capital.

Explain why the Qatar consulting market stands out?

The outlook of Qatar consulting market is undoubtedly positive. The country’s massive development agenda would naturally need a higher and broader level of international and regional expertise in Qatar across all sectors. We are encouraged by the promise in Qatar, and are honoured to have received a licence from the QFCA and to have this opportunity to serve our valued clients in the country. Qatar’s targeted projects and developments provide a direct and sizeable business opportunity to ValuStrat.

In your strategic advisory role, what are your guidelines for business development in Qatar?

Our advisory services aims to assist small to medium to large companies and business houses in Qatar with market research and feasibility studies, strategic and business planning, and organisational, commercial, operational, technical and financial performance evaluation and enhancement. Through our vast experience in the Middle East and extensive tie-ups with international and regional partners, ValuStrat works with client organisations to navigate their road ahead by recognising opportunity, clarifying vision, creating strategies, implementing action and measuring results.

ValuStrat delivers on leadership, integrating management, sales and marketing, finance and accounting, production and operations, research and development, risk management, and information systems to ensure our clients achieve organisational success faster.

higher operational efficiency, better technology, market leadership, better future business prospects and above all the better product to their clients.

Within your valuations and appraisals division, what industries do you look at?

Prudent asset valuation is key to making sound financing-, investment-, divestmentand insurance-related decisions. It also provides clearer visibility to the investment houses about their assets portfolio management. We are experienced in using various internationally accredited valuation methodologies (income, cost, sales comparison, investment, residual value and their combinations) for various assets classes, which professionally meet the underlying objectives of the valuation without any conflict of interest.

Our group has the privilege of being on the approved valuation panel of more than 50 financial institutions.

How has the consulting market changed since the financial crisis?

Dependence on the professional consulting companies in Qatar and in the region has increased tremendously over the last five years and is expected to grow further. The clear reasons are the management of the financial crisis impact between 2008 and 2011 and take off with significant developments again with the beginning of 2012.

Most organisations realise the importance of consulting and have become open to taking ideas or advice externally, which provides good value for their money, business, risks, exposure and reputation.

What is your take on the asset divestment climate of Qatar and the region?

[Through our] cooperation agreement with HILCO Industrial USA, we can assist clients in purchasing or selling used industrial assets in the global secondary market. The service facilitates industrial clients with the possibility of liquidating their unwanted fixed assets beyond the boundaries of Qatar. The service also gives them opportunity to effectively upgrade their manufacturing capabilities with new machinery and technology.

In a nutshell, benefits could be better cash flows, higher revenues, lower costs,

What do industry practices look at?

Due to developments happening in Qatar at a fast pace, various industries demand consultants to constantly improve their professional understanding of Qatar and its markets, sectors, projects and assets. Secondly, we are [committed] to providing a deeper, comparative and objective analysis of the underlying subject under the valuation and advisory services.

Thirdly, our target client segments appreciate application of the international standards and resources in our services.

They require a results-oriented approach that leads to prudent decision making in the areas of financing, investments and insurance management.

What does your pro bono work consist of? Why does a consulting firm need to do pro bono work?

ValuStrat Pro-Bono Advisory division was founded in 2012 as part of ValuStrat’s commitment to its Corporate Social Responsibility (CSR) programme. The division represents ValuStrat’s core values towards the improvement of community.

ValuStrat Pro-Bono Advisory works with foundations, philanthropists, companies, non-governmental organisations, social entrepreneurs and social investors to help them rethink their goals and realign their strategies to achieve greater social impact.

We offer our full suite of strategy services to social organisations, working in all sectors.

And we do it all free of cost.

The Edge | 73

business insight | human resources

CUSTOMISED ARRANGEMENTS

Employee productivity is empowered by flexible work options According to a recent survey conducted by Regus – a multinational provider of contract-based service offices, virtual offices, business centres, meeting and conferencing facilities – 72 percent of Middle Eastern respondents believed flexible working could boost productivity. Conducted in 95 countries, the survey incorporated responses from over 20,000 senior executives. In an interview with The Edge, Qatar’s country manager at Regus, Alina Gomotirceanu talks about the survey and the scope of flexible work options in Qatar.

Alina Gomotirceanu, Qatar country manager at Regus, is of the view that a major motivation behind flexible work options is the employer’s need to retain employees.

74 | The Edge

Please tell us about Regus and its operations?

Regus started operating in the Middle East in 2001 with the first flexible office in Dubai, United Arab Emirates. We have two centres in Qatar in addition to locations in Bahrain, Kuwait, Lebanon, Oman and Saudi Arabia. Regus is the global workplace provider. More than 1.5 million customers a day benefit from our 1700 locations spread

human resources | business insight

across almost 100 countries. Our products and services enable people to work their way whether it is from home, on the road or from an office.

The concept originated from recognising the developing trends in mobile working, as well as those seeking a better work-life balance.

What are the different types of flexible working arrangements practiced in Qatar?

The growth of the Regus network offers more opportunities for companies in Qatar to adopt flexible and remote working patterns, or to get closer to customers and key contacts. They can take on office space in the central business district without committing to a long-term lease or upfront capital investment.

Flexible and remote working practices are gaining popularity in the Middle East.

In the latest Regus global business survey of over 26,000 senior business people, just under half (44 percent) respondents in the Middle East said they now work remotely for at least half the week.

Which regions allow most acceptability for flexible hours? Where does the Middle East stand?

Emerging economies, like the Middle East, are adopting the same practices as those in developed nations. More and more businesses regard flexible working as bringing further benefits, such as better and faster decision making, fostering creativity and helping to improve time management. This is an indication that growing economies have made flexible working a key part of their strategy – saving on expensive fixed office leases and helping staff become more productive.

What are the major motivations behind organisations favouring flexible working options?

Organisations are looking to retain employees for the long term, and are therefore eager to provide options that meet the requirements of work and life commitments. They want to provide facilities that enable parents to be at home when they need to without compromising on their professional responsibilities.

Several organisations in this region have travel as a prerequisite and look to offer the flexibility required for this.

“Organisations are looking to retain employees and are eager to provide options that meet work requirements and life commitments.”

Which companies in Qatar are practicing flexible working options?

Companies both large and small in Qatar practice flexible working. Any business from a one-man operation to a 1000-plus personnel corporate firm can adopt this, which is why our centres are in demand.

An example of this is LINKdotNET, which has grown from a two-person business to seven but remains based at our Doha Airport Road location due to the flexibility of being able to upscale overnight.

To what extent does the flexible work arrangement depend on the nature of a business?

The nature of flexible working means that any company can adopt it. The development of cloud services makes it easier than ever before for employees to log into company servers from anywhere in the world. This is why businesses from day-old start-ups to Google, Toshiba and GlaxoSmithKline all use Regus.

How do the companies ensure that their employees working from home are as focused on the jobs as those working from office?

Productivity is actually empowered by flexibility. Once employees are not confined to certain work parameters and are able to adjust to their personal commitments, productivity increases and stress levels can go down. Our recent survey also found that apart from improved productivity, 77 percent of respondents globally, think flexible working encourages a greater sense of responsibility and time management.

Flexible working also improves staff productivity by speeding up decision making (64 percent) and fostering creativity (74 percent).

Profitable and useful business connections are favoured by flexible working (70 percent) as employees mix with professionals from other backgrounds

and gain greater insight.

What are the services Regus provides for flexible working?

Regus provides a number of options to enable companies to work flexibly from serviced offices to business lounge access.

Our key products are: • Business Packages, which can provide a top-flight business address, with telephone answering and mail forwarding, without the expense of physical workspace. So the business ‘base’ could be Qatar’s prestigious office location, but the owner could work at home, on the beach or while on holiday, with a laptop, knowing the phone is being answered.

• Flexible workplaces offer a physical presence in prestigious locations, with built-in flexibility to move, upscale or downsize rapidly. Costs for staffing, maintenance and so on are all included, so budgeting is easier and there are no unexpected bills. In addition, business-ready workplaces spare SMEs from the costs (and time delays) of fitting out an office, setting up IT connections and hiring support staff, while also adhering to trade licence regulations.

With less money spent on set-up, there is more to invest in the business.

• Pay-as-you-use meeting rooms and Businessworld membership provide access to our business lounges, both of which allow companies to work at some of the best business locations in the world, without paying per square foot. For example, Regus’ 100-country network enables people to hire meeting space on Fifth Avenue, New York, meet a colleague in a business lounge in Geneva’s Rue du Rhone or touch down at office space in London’s Mayfair, as well as helping them expand into frontier markets like Lagos.

The Edge | 75

Spillover

Continued from page 55

The recent purchase of the Islamic Bank of Britain by Qatar’s Masraf Al Rayan indicates strong confidence in this sector in Europe. (Image Corbis)

authority on shari’ah, and has been certified as shari’ah-compliant through the issue of a fatwa by Yassar’s principals. “This reflects the growing demand from investors for best-in-class benchmarking tools that adopt a conservative approach to shari’ahcompliance,” says Kevin Bourne, managing director of the FTSE’s environmental service group, in London.

Increasing competition

With Asia and Europe opening up to Islamic banking, analysts foresee competition between Qatari and GCC Islamic banks and their Malaysian and Indonesian peers in capturing these markets.

Machel of LFF explains that the Malaysian market has succeeded in cross-selling retail savings products to the non-Muslim market in Asia, which may give them a competitive edge in Europe, where the Muslim population is diffused and can only be reached by broad retail distribution. “The strength of Qatar, by contrast,” he counters, “lies in its capacity to buy financial institutions in strategic markets, thus bypassing the need to work through partnerships.”

However, from a Qatari perspective, Suliman of QFB feels that the way forward is to establish partnerships with Asian peers to share expertise and optimise opportunities and talent and establish an industry standard for Islamic Finance.

In turn, Engin of Standard & Poor’s cites Qatar Central Bank data showing Islamic banking’s expanding market share. In 2006, he tells The Edge, the first year when the QCB began to provide separate statistics on conventional banks versus Islamic banks, the market share of Islamic banks was around 13 percent, which has now expanded to 24 percent in September 2013. Together with this, Qatari Islamic banking players are adding more financial instruments to their offerings. “Traditionally,” Engin continues, “Qatari Islamic banks have not been very active in the sukuk market in terms of issuance, however we expect to see them tapping the sukuk space more often over the next few years, as we expect their credit growth to remain strong.”

76 | The Edge

automotive | product reviews

Reviews

CHEVROLET IMPALA 2014

C

hevrolet’s 2014 Impala is a full redesign of last year’s model, incorporating its styling with an aesthetic borrowed from its more iconic years – think Chevrolet Bel Air of the 1960s. This flagship sedan for Chevrolet was recently launched in Qatar by Jaidah Automotive.

The 2014 Impala is powered by a 3.6 litre, V6 aluminium engine. Matched with a six-speed automatic transmission, it generates 305 horsepower and 356Nm of torque, with a fuel economy of 12.4 litres per 100 kilometres for city driving, and 8.1 litres per 100 kilometres on highways.

The Impala’s safety features include 10 standard air bags, forward collision alert, lane departure warning, side blind zone alert, rear cross traffic alert, rear camera and rear-park assist.

The centre stack of the interior is integrated in the instrument panel and houses Chevrolet MyLink, which includes navigation and Bluetooth audio – and is controlled via a touchscreen on an eightinch display. A standard audio amplifier is a feature not typical for the segment and a Bose surround-sound audio system is available – the first in a Chevrolet car.

The Impala also, has an acoustically

laminated windshield and front-door glass, liquid-applied sound deadener, soundabsorbing carpet and an isolated engine cradle to reduce noise levels within the car.

“Jaidah Automotive is delighted to present the...2014 Chevrolet Impala to Qatar,” said Mark Jenkins, outgoing general manager of Jaidah Automotive. “A classic car that represents the 10th generation of one of the industry’s most enduring and popular nameplates, the all-new Impala has succeeded in maintaining its excellent heritage, while being equipped with today’s highly advanced and sophisticated automotive technologies.”

The Edge | 77

product reviews | books & gadgets

Read it:

The Everything Store: Jeff Bezos and the Age of Amazon As you might expect from the title, The Everything Store: Jeff Bezos and the Age of Amazon is as much a story about the enigmatic founder of the Internet’s first super retailer as it is about the company itself.

Like all technology entrepreneurs who start with little more than an idea and a desk in the basement (or in Bezos’ case, a door on two trestles in a small warehouse), a successful firm comes to reflect the personality and beliefs of its main owner and driver, and the whole is usually a result of many of his or her sole decisions – leading to both dismal failures and huge successes.

Specifically, it is because the enigmatic Bezos (pronounced ‘Bay-zose’ not ‘Bee-zose’ incidentally) is such a captivating, obstinate figure, that the story of Amazon itself is fascinating. Perhaps, Bezos is not quite at the level of world fame and recognition of the likes of Steve Jobs and Apple, or Richard Branson and Virgin, but he comes close – and will move closer still with the publication of well-written books such as The Everything Store.

A notorious micromanager with the unpredictable personality of Jobs, but the added quirk of an infamous and intimidating, racking laugh, Bezos’ rants (called “nutters”) against his staff, his stubborn conviction that his way to build his company is the best and only way to do so – despite financial obstacles and widespread opposition within and outside it – is covered in detail in the book. Indeed these traits and Bezos’ unconventional approach to HR (such as breaking down his entire company into groups that could be fed by “two pizzas”) and more, are the unique aspects of his personality, reflected in the multi-billion dollar enterprise he has built over the past few decades.

Indeed, it is the unwavering long-term vision and determination of Bezos to create the world’s first and now largest by far online retail outlet, one that sells literally everything and delivers anywhere (all while offering the lowest prices), that creates the premise of this company’s story. And on the other, it is also Bezos’ conviction that Amazon must become known far beyond online retail – as primarily a technology company – and the incredible fact that he has achieved both these aims against incredible odds, and his own errors of judgment and other setbacks, that is the most compelling narrative and what makes The Everything Store really worth reading.

Available at Virgin Megastore for QAR94

FUJIFILM XQ1 Compact Camera

The XQ1 features an f1.8 4x zoom lens and the same type of 2/3 inch X-Trans CMOS II sensor and EXR Processor II as used in the highly regarded FUJIFILM X20. This makes the XQ1’s sensor size approximately double those in ordinary compact digital cameras and is able to deliver AF speeds at 0.06 seconds. The XQ1 also features a built-in intelligent flash, which controls the amount of light for the shooting situation.

Its in-camera RAW development function can also convert files to JPEG without additional software and a computer.

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Samsung’s NFCenabled printer: Xpress C410W

In an industry first, Samsung has introduced the Xpress C410W, which can print through the use of Near Field Communications (NFC). The colour laser printer is designed primarily for home and small office use, with the added value that users can print directly from their smartphone by downloading a Samsung mobile print application, removing the hassle of going through a lengthy process to authenticate their device.

Sony Xperia T2 Ultra

Sony’s latest smartphone offering is an Android-based device with a mid-range price point aimed at emerging markets such as the Middle East. The Xperia T2 has a sixinch HD display and a 13-megapixel camera, and a 1.1-megapixel front facing camera.

The T2 Ultra also offers customers dual SIM technology allowing them to keep both SIMs active, ideal for those that keep separate phone numbers for work and personal use.

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