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5 TIPS FOR DISTRIBUTORS IN QATAR Most foreign companies appointing distributors in Qatar would have business dealings in multiple jurisdictions and strict terms in its contracts which protect the interests of the foreign companies. Distributors in Qatar should therefore consider the contractual terms carefully to ensure their business interests are protected and at the same time, they are able to comply with the requirements of their foreign suppliers. From the local distributor’s perspective, these are 5 important issues to take note of in a distribution agreement:
1.
2.
3.
Exclusivity for Distributor
the distribution agreement should state whether distributor is to be an exclusive distributor and the region in which it has exclusivity (e.g., Qatar or the whole of the Gcc). the distributor should also check if the supplier itself is allowed to sell directly into Qatar. if the agreement does not state that the distributor has exclusivity in Qatar, the distributor would not have any recourse against the supplier if others start selling the same products in Qatar. if the understanding is that the distributor is to have exclusive distribution rights in Qatar, it should ensure that the supplier is not only restricted from selling to others in Qatar but the supplier also has to ensure that its distributors in other countries do not sell to any other dealers or customers in Qatar.
NoN-coMpEtitioN clausEs
5.
DuratioN aND tErMiNatioN
any party entering into a contract should consider whether a longer or shorter term would suit its business needs. How long should the term of the contract be – does the distributor want a longer period of commitment from the principal? at the same time, if the distributor is starting a new business or is unsure of the demand for the product in Qatar, it may not want to be tied down for too long a period. the distributors should also consider if there are specific circumstances in which it wants to terminate a contract before the end of its term, e.g., where the principal becomes insolvent or the shareholders or management have changed to such an extent that the distributor is no longer comfortable dealing with the new management.
do the terms of the agreement restrict the distributor from selling other similar or competing products? Such a requirement should be considered carefully as it would obviously limit how the distributor conducts its other business. Both parties should also ensure that such a non-competition clause should not be included in a situation where there would be a risk of breaching law no. 19 of 2006 protecting competition and de-monopolisation (which prohibits anti-competitive practices).
licENcE for usE of traDEMarks aND NaMEs; approvals for MarkEtiNg MatErials
the distributor should ensure that it is granted a licence for the use of all relevant trade marks and trade names. to the extent possible, all the specific trade marks and names should be listed in the contract. the distributor also needs to check if the contract requires it to adhere to certain branding guidelines and whether approval is required for marketing materials; big companies tend to have stricter guidelines on branding and approval processes.
4.
a presence in Qatar, then the practical consequence is that customers and the authorities will only look to the distributor if there are complaints about the products.
WarraNtiEs aND rEpairs
How are defective products and repairs to be dealt with? if the principal is not the manufacturer, then the distributor should check on the terms of the manufacturer’s warranty and whether the distributor or the customers are able to claim on it. the distributor should also bear in mind that it has certain liabilities to the customer under the consumer protection law. if the manufacturer and/or principal does not have
WonG YuenpinG Senior Associate Al Tamimi & Company w.yuenping@tamimi.com Follow us on Twitter @AlTamimiCompany Join us on LinkedIn – Al Tamimi & Company www.tamimi.com
contents July 2014
w w w.t h e e d ge. m e
COMMEMORATIVE 5 th ANNIVERSARY EDITION: QATAR’S BUSINESS MAGAZINE SINCE 2009 Vol. 6 No. 7 - Issue 57 July 2009 - July 2014
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The Edge Magazine was launched in July 2009. In the subsequent five years, Qatar has experienced landmark achievements such as reaching 77 million tonnes of LNG output per annum, has built the tallest building in London and witnessed the unprecedented voluntary and peaceful abdication of its ruler. Here is five years of The Edge, Qatar’s Business Magazine, and five years of developments in Qatar, as seen through the pages of the magazine.
56 The Ariane 5 ECA launcher rocket takes off from Europe’s Spaceport in Kourou, French Guiana in 2013, carrying on board the Es’hail 1, Qatar’s first satellite. We speak with the company CEO Ali Ahmed Al Kuwari about its strategic relevance to Qatar’s communications infrastructure. (Image Flickr ESA-CNES-ARIANESPACE/Eutelsat)
features
Business Interview: Transmission from space
- QATAR’S BUSINESS MAGAZINE - Vol. 6 No. 7 - Issue 57 (July 2009 - July 2014)
cover story
100% Qatari
56
Ali Ahmed Al Kuwari, CEO of Qatar-based satellite company Es’hailSat talks to The Edge about the rising demand for telecoms and broadcast services across the region as the population is expected to increase by as much as 30 percent by 2030.
Feature Story: 2014 Qatar-Brazil Year of Culture
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Qatar and Brazil share a vibrant trade relationship with the total trade volume crossing the USD1 billion (QAR3.86 billion) mark for the first time in 2012. The Edge’s Aparajita Mukherjee investigates whether year-long cooperative initiatives in the fields of art and culture could help in deepening the business relations between nations.
62 Rashed Al Qurese, director of marketing and promotion at Qatar Tourism Authority, says a ‘year of culture’ is a concept intended to deepen the understanding between Qatari and Brazilian people and the respective cultures.
The Edge | 3
contents page
sectors
Finance & Markets 21
With large spending planned for development projects, and the QAR3.64 peg against the US dollar, it makes sense for Qatar Central Bank to continue to mop up excess monetary liquidity through domestic bond issuances.
Energy & Sustainability 25
Qatar has reportedly given commitment to Pakistan that it will begin exporting 200 million cubic feet of LNG per day next year.
Real Estate & Construction 29
With rental contracts more or less up to the discretion of landlords, residents in Doha face rental increases, reaching four percent in the first two quarters of 2014.
While Doha’s residential sector is undersupplied, the PearlQatar has a vacancy rate of 75 percent, expected to see high occupancy once neighbourhood retail facilities are completed. (Image Flickr Aih.)
Tech & Communications 31
The Ministry of Information and Communications Technology and the British Royal Mail recently signed a memorandum of understanding for the modernisation of Qatar Postal Services Company.
Business Insight 67
Soubhi Chebib, general manager of Gulf Business Machines Qatar, talks about trends in the IT industry. Malcolm Furber, president of Chartered Institute of Management Accountants (CIMA) highlights key findings of their new report.
“We need to understand the mindset of the younger generation and what they want out of a career,” CIMA president Malcolm Furber tells The Edge.
regulars From the Editor 8 Photo of the Month 10 Business News 12 Qatar Perspectives 16 Products 73 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 senior graphic designer niveen saeed 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
editor’s letter The Edge Magazine was launched five years ago in July. And while in most countries a 5th Birthday Edition of a business magazine would perhaps not reflect extensive change, Qatar is not just any country. Rapid growth and development following the global recession have meant that in just half a decade since The Edge’s first edition in mid-2009, the landscape, skyline, population, economic and social dynamics of this diminutive but influential Gulf state have evolved dramatically. Since then, Qatar has experienced landmark achievements such as reaching 77 million tonnes of liquid natural gas (LNG) output per annum, has won the rights to host the FIFA World Cup in 2022, has built the tallest building in London, and witnessed the unprecedented voluntary and peaceful abdication of its ruler in favour of one of the youngest heads of state in the world, HH the Emir Sheikh Tamim bin Hamad bin Khalifa Al Thani. In fulfilling its role in documenting the widest realm of business in Qatar, the Gulf and world beyond, in the past five years (spanning the second half of 2009 to date), The Edge magazine has come to encapsulate and document all the vicissitudes of this short but remarkable passage of time in this small, utterly unique country, in our own inimitable way. The past six months have been special for The Edge itself as we celebrated our 50th issue in December 2013 and now, half a year later, we have reached another major milestone. In this, the 5th Anniversary Issue, we have taken a slightly different approach than the former though, choosing to highlight a small selection of the notable articles we have featured in The Edge since our first issue debuted in July 2009. These are features and interviews that we believe reflect both the progress of Qatar and,
we feel, that define the kind of magazine The Edge has become during that time. In our ‘Then and Now’ boxes, we also highlight figures that hopefully show just how quickly and markedly some things have grown and/or changed since our launch. From the beginning, within its mandate – and indeed its very name – The Edge has endeavoured to objectively cover gritty topics within the Qatari business paradigm, including human resource challenges, food security, sustainable energy, inflation and economic issues, Qatarisation, women in the workplace, the Arab Spring, the plight of migrant workers in Qatar, and more. The magazine has also evolved in tandem with the country it is proud to cover and calls home, including a format change and redesign at the beginning of 2013, two incarnations of our website, a fast-growing social media following and a series of highly successful brand extensions. These have included The Edge Environ, The Edge Qatar Property Review, The Edge Finance, The Edge Business Travel Guide and most recently, the very well-received The Edge Qatar Construction News (QCN). Going through five years of back issues of the magazine, it is clear how much Qatar has evolved, but also how many challenges – as pertinent in 2014 as they were in 2009 – remain for the country, including issues surrounding human resources and migrant workers or the ease of starting a small business here, to name three. Then there is the ongoing development and controversy relating to the 2022 World Cup. What is certain from when it was announced, is that since FIFA’s president Sepp Blatter opened that envelope on December 2, 2010, Qatar has become far more prominent on the world stage. Many of the resultant positive and negative repercussions of this have been featured in the pages of The Edge – and of course we will continue to offer our unique brand of coverage and analysis as long as the magazine exists, which we hope will be for many more years, Inshallah. May we also take this opportunity to wish our Muslim readers Ramadan Kareem and to those taking one, a safe and restful summer break. Enjoy the magazine and see you in H2, 2014.
Going through five years of The Edge, it is clear how much Qatar has evolved, but also how many challenges – as pertinent in 2014 as they were Miles Masterson in 2009 – remain. Managing Editor 8 | The Edge
10 | The Edge
photo of the month
Multicultural Madness
During July, excitement around the 2014 FIFA World Cup in Brazil reached a crescendo as the final rounds were completed. As the first World Cup since Qatar was awarded the rights to host the event in 2022, this event truly gave the country an opportunity to take stock firsthand of what it entails to put on such an event and what to expect in terms of spectators of the beautiful game, such as this multicultural trio attending a match in the National Mane Garrincha Stadium in Brasilia, capital of Brazil, in late June. (Photo Dida Sampiao/Estadoa Conteudo/Picture Alliance/Corbis). The Edge | 11
news business
Regional aviation issues discussed at IATA AGM in Doha With global airline bosses beating a path to Doha in June for the annual general meeting of the International Air Transport Association (IATA), any further delay to the opening of Hamad International Airport (HIA) would have been a huge embarrassment for Qatar. by Martin Rivers
Fortunately, following a two-year delay blamed on United States contractor Bechtel, Qatar Airways moved its entire operation to the new gateway on May 27 without problem. “Qatar Airways will be able to offer an exceptional passenger experience, as HIA has been designed with passengers foremost in mind,” said Qatar Airways chief executive officer Akbar Al Baker. “The airport will also be able to accommodate the world’s largest aircraft, such as our much-anticipated Qatar Airways Airbus A380, which will commence operations to the United Kingdom (UK) in June and France in July.” The reference to the A380 was perhaps testing fate. Two days before the AGM opened, Qatar Airways announced that deliveries of its doubledecker aircraft – of which it has 10 on order Akbar Al Baker, chief executive officer of Qatar Airways, – would be delayed by “several weeks” due speaking at the AGM. (Image to unresolved cabin issues. Qatar Airways/Flickr) An indefinite delay followed in mid-June, with Al Baker telling Reuters that the aircraft’s interior did not yet, “meet the high standards and expectations of Qatar Airways”. Al Baker is reputed to be a perfectionist and has previously rejected aircraft from Boeing, citing performance issues. Even without Qatar’s A380s, however, the IATA AGM got underway in characteristically extravagant style. Highlights included a gala concert performance by Kylie Minogue and a videotaped message from Harrison Ford, but behind the glitz, delegates quickly got down to business. IATA director general Tony Tyler opened proceedings by paying credit to the achievements of Middle Eastern carriers, whose market share of global traffic has risen from four percent to nine percent over the past decade. But Tyler warned that
“Regional governments are not managing finite airspace as a common resource.” – Tony Tyler, director general, IATA. 12 | The Edge
breakneck expansion carries its own risks. While Qatar is among the top investors in airport infrastructure – HIA launched with a capacity of 30 million, eventually rising to 50 million – crossborder collaboration over airspace management has not kept pace. This risks causing bottlenecks that create inconvenience for passengers. “The region’s governments are not managing finite airspace as a common resource,” Tyler warned. “The resulting delays are a burden to the efficiency of the connectivity that Gulf carriers are providing over their hubs. A more coordinated approach to managing the region’s limited airspace is needed.” The familiar spectre of confrontation with Europe’s airlines was also raised, with Abdul Wahab Teffaha, the secretary general of the Arab Air Carriers Organization (AACO), warning about a “growing problem of protectionist voices,” emanating from the continent. His remarks were in reference to the European Union’s attempted revival of defunct Regulation 868/2004, which had been drafted to protect European carriers “against subsidisation and unfair pricing practices” by foreign airlines. Just days after the AGM closed, Lufthansa, Europe’s largest airline, issued a profit warning in which it effectively blamed Gulf carriers for poaching its customers. With the EU also now investigating Etihad over its 33.3 percent stake in Switzerland-based Etihad Regional, the stage is set for a showdown between the Gulf’s rising aviation stars and their floundering competitors in Europe.
news business
Incidents of cardiovascular disease on the rise in Qatar
Dr. Khalid Abdulnoor Saifeldeen, director, Hamad International Training Centre (third from right) at the relaunch of the ‘Kulluna for a Healthy Heart’ initiative.
An increase to about 4000 Qatar residents being admitted to hospital for heart attacks and heart failures per year has prompted a relaunch of the ‘Kulluna for a Healthy Heart’ initiative. by Roisin Bailey Cardiovascular disease is one of the leading causes of death worldwide, according to the Word Health Organization, with the World Heart Federation estimating that it causes 17.3 million deaths each year. The ‘Kulluna for a Healthy Heart’ campaign, taking place at City Center Doha and The Mall on D-Ring road, raises awareness on preventing heart disease, highlighting the various factors that can lead to heart-related illnesses such as
smoking, obesity, high blood pressure and diabetes. Dr. Khalid Abdulnoor Saifeldeen, director at Hamad International Training Centre said, “Our campaign is designed to spread awareness of the importance of knowing your health status and to inform the public about how they can incorporate a healthier lifestyle.” Talking about the new developments for cardiovascular treatment at Hamad Medical Corporation (HMC), Dr. Omar Al Tamimi, cardiovascular consultant, Heart Hospital, HMC, said, “The Heart Hospital has facilitated a special division in the Emergency Department for critical cases that require immediate intervention.” The new electronic, wireless technology for heart x-rays will allow for swift and accurate assessment of the patient’s condition, minimising the time before proper medical care is provided, explained Al Tamimi. “This technology will reinforce a higher survival and recovery rate,” he added. Other developments include new identification methods to ensure the fast track of heart patients through the Emergency Department as well as more well equipped ambulances and a planned increase in the number of beds.
Lusail Light Rail Transit to start service in 2018 While three of Qatar’s major rail and metro projects are facing delays, Lusail Light Rail Transit is the latest to show progress with the tram contract awarded by the Qatar Railways Company (Qatar Rail). by Farwa Zahra According to a recent report by MEED, Qatar is one of the three largest markets for rail and metro infrastructure in the Middle East, which currently features USD167billion (QAR 608 billion) worth of active and unawarded rail and metro projects. “In Qatar, there are still several contracts to be awarded on the Doha Metro in addition to the main packages on the long-distance passenger and freight networks,” the report states. While the Education City People Mover is more imminent, due to be complete by 2015, some major projects are still on hold. Both the West Bay People Mover and Friendship Bridge are on hold, while the Msheireb tram has also been postponed. The latest progress on Qatar’s rail scene is the Lusail tram contract awarded by Qatar Rail to a consortium of Alstom and QDVC. The four-line tram network is worth USD2.72 billion (QAR 10 billion). Expected to start service in 2018 with the launch of the Yellow Line, the next phase of delivery is scheduled in 2020. The four-line network will cross the city covering a distance of 33 kilometres (km), including 7km underground and 37 stations. Designed to
accommodate 200,000 people, Lusail City will also house one of the 2022 World Cup stadiums. For the design of the Lusail Iconic stadium, four firms have been shortlisted.
Lusail Light Rail Transit is scheduled to be fully operational by 2020. Pictured here is the Lusail Marina. (Image Flickr Paul Trafford)
Number of the month The cost of Lusail’s four-line tram network.
QAR 10 billion The Edge | 13
news
business in brief Words & Numbers
22
Qatar’s ranking on the Global Peace Index (GPI) 2014, down three spots from last year, based on the level of peace. The index ranks 162 independent states, covering 99.6 percent of the world’s population.
“Qatar’s football history may be much younger than in Europe or South America but the passion for the game here and across the Middle East is every bit as intense.” Sheikh Hamad bin Khalifa bin Ahmad Al Thani, president of the Qatar Football Association, wrote in response to bribery allegations against Qatar, published in The Guardian. (Image Flickr Doha Stadium Plus Qatar)
6
The number of Qatari companies that appeared in the ‘Forbes Global 2000’ list.
“The launch of Al Bayt Stadium and precinct will honour Qatar’s past while fully embracing the country’s global future.” Hassan Al Thawadi, secretary general of Supreme Committee for Delivery and Legacy, while unveiling the design for Qatar’s second proposed stadium for the 2022 World Cup.
14 | The Edge
S&P report reveals Qatar as one of the least vulnerable GCC economies
QNB’s ‘Welcome to Qatar’: a one-stop solution for newcomers to Doha
According to Standard & Poor’s (S&P) report Hooked On Oil: How Susceptible are Gulf Sovereigns to Concentration Risk?, Gulf sovereigns’ high and increasing dependence on hydrocarbon revenues is a key vulnerability of their economies and their ratings. In particular, government budgets have become more susceptible to a sharp drop in oil prices. The S&P study shows that Bahrain and Oman are the most vulnerable economies to a sharp and sustained decline in the hydrocarbons market in the Gulf Cooperation Council. Qatar and the United Arab Emirates are reportedly the least vulnerable.
Qatar National Bank (QNB) has launched its latest programme ‘Welcome to Qatar’, to assist newcomers in settling into their new environment. Upon arrival, QNB offers the newcomers a free SIM card, credit and a complimentary data plan from its preferred partner Ooredoo, and exclusive discounts from leading retailers in Qatar for all their relocation needs. New arrivals can open their new account online from their home country or at any of QNB’s local branches once they have arrived.
al khaliji named ‘Best Premium Bank’ in the Middle East
Tasweeq and Qatar Petroleum Industrial Cities launch Go Green campaign Qatar International Petroleum Marketing Company (Tasweeq), in The ‘Go Green’ cooperation with campaign was launched on June Qatar Petroleum’s 16 in Ras Laffan and Industrial Cities Mesaieed. Directorate, is sponsoring an environmental awareness campaign in the industrial cities of Ras Laffan and Mesaieed to educate employees on saving energy and conserving nature. Titled ‘Go Green to Save Energy and Preserve Nature’, the campaign aims to inform everyone how they can help protect the environment by consuming less energy at work and at home.
Alfardan Automobiles offers Islamic Financing services Alfardan Automobiles, the official BMW Group importer in Qatar, has signed Representatives of a partnership Alfardan Automobiles and QIB at the signing with Qatar Islamic ceremony. Bank, to provide Islamic finance solutions to their customers. The agreement is expected to see many customers benefit from the services as well as the unique Ramadan offers by the BMW Group importer.
A representative of al khaliji receives the award for ‘Best Premium Bank’ at the Banker Middle East Industry Awards 2014.
Al Khalij Commercial Bank (al khaliji) has been named the ‘Best Premium Bank’ in the Middle East at the Banker Middle East Industry Awards 2014. Organised by CPI Financial, the annual event sets the benchmark for successful banking in the Middle East and North Africa region.
Turkish Airlines adds 254th network destination With existing services to Paris, Lyon, Nice, Toulouse and Marseilles, Turkish Bordeaux, Paris, is the th Airlines has added 254 destination of Turkish Airlines. Bordeaux as its sixth destination in France. Bordeaux flights are operated five times a week on Mondays, Wednesdays, Thursdays and Saturdays in both directions, and introductory round trip fares are available from Istanbul to Bordeaux. For the first six months of operations to new destinations, there is a 25 percent reduction in the miles needed to redeem either award tickets or upgrades.
events Qatar, H2 2014
UPCOMING EVENTS 8 - 9 September Future Interiors Future Interiors Qatar 2014 is a brand new conference, launched this year as part of the Project Qatar Conference Series to address challenges and opportunities within the architecture, design and interior construction industry. According to a press statement from organisers, the Gulf Cooperation Council interiors market was valued between USD1.36 billion (QAR4.9 billion) and USD1.47 billion (QAR5.3 billion) in 2013, growing by 15 percent in 2014 to reach USD1.58 billion (QAR5.75 billion).
OTHER UPCOMING EVENTS
17 – 18 September
Waste Management and Recycling Summit
22 - 24 September
SPE Middle East Health, Safety, Environment & Sustainable Development Conference & Exhibition
1 October
Back 2 Business
22 – 23 October
ITS and Road Safety Forum
Future Interiors Qatar will provide a meeting place for project owners, project managers, design professionals, contractors and consultants to stay up to date on industry trends and lucrative business opportunities.
10 - 11 November Middle East District Cooling Summit
The 6th Annual Middle East District Cooling Summit will be held under the patronage of HE Dr. Mohammed bin Saleh Al Sada, Minister of Energy and Industry, and the support of Qatar General Electricity and Water Corporation – Kahramaa. The summit, to be held in Doha, will involve the participation of global and regional government authorities, decision makers and regional project stakeholders, master project developers and end users, leading research institutes and consultancy firms, technology and solution providers involved in the master planning and development of major district cooling projects in the region.
19 – 22 October
International Association of Science Parks Annual World Conference
27 – 28 October
Future Landscape & Public Realm Qatar
3 – 5 November
HSE Forum in Energy
7 – 10 December
ITU Telecom World
9 – 10 December
Euromoney Qatar Conference
The Edge | 15
qatar perspectives
Variety of dispute resolution methods gaining popularity in Qatar With an exceptional quantum of investment at stake, the commercial Qatari sector is naturally prone to increasing disputes and litigations which have seen legal reforms, particularly in dispute resolution methods, opines Khalifa Al Misnad
Investors entering into contracts with a party located in Qatar are increasingly selecting arbitration as a method of dispute resolution.
Qatar’s economy has witnessed significant growth driven by the amount of foreign investment in Qatar and the continuous investment of the State of Qatar on an international scale. Qatar is said to be on the verge of even a bigger boom as it approaches the milestones of the 2022 World Cup and its National Vision 2030. With this exceptional quantum of investment at stake, the commercial Qatari sector is naturally prone to increasing disputes and litigations. To better cope with the increase in disputes, Qatar has taken significant steps over the last decade towards reforming its legal system to conform to the international best practices and standards, particularly with regards to dispute resolution methods. Further steps are said to be in the process of being taken towards a full reform. Presently, foreign and local parties doing business in Qatar benefit from various options in resolving disputes should they opt out of resolving them through the established courts. For instance, investors entering into contracts with a party located in Qatar are increasingly selecting arbitration as a dispute resolution method. As is the case in other parts of the world, the choice of arbitration for the resolution of disputes is increasingly popular in view of the numerous advantages it offers in comparison to resorting to the national courts. The arbitration process is generally faster since it is private and provides the added security of enabling one to select the arbitrator (or arbitrators). Equally important, arbitration is less adversarial than litigation which helps maintain a
healthy business relationship between the parties, if such is required, despite disputes. Locally, institutional arbitration is presently deemed as the most popular type of arbitration in Qatar. In fact, the majority of the local and foreign investing entities are choosing it over ad hoc arbitration, in which the parties are required to determine all the aspects of the arbitration such as the number of arbitrators, the manner of their appointment and the procedure, rather than institutional arbitration which has rules and guidelines that you opt into when selecting such a process. The arbitration process in an institutional arbitration is handled by a specialised institution, which has its own rules that provide a framework for the conduct of the proceedings. The availability of pre-established rules and procedures and a list of qualified arbitrators to choose from are surely the reasons that have made institutional arbitration more attractive to investors. In Qatar, local arbitration institutions are available, such as the Qatar International Center of Arbitration which was established in 2006 and is located in the Chamber of Commerce and Industry. It applies Qatari Civil and Commercial Procedure Law No (13) of 1990. A new centre of arbitration has been introduced recently by the Qatar International Court and Dispute Resolution Center, which was established in 2009 as a modern business court, but also offers alternative dispute resolution services in the form of arbitration and mediation. One of the key factors that promote foreign investment and that supports the
16 | The Edge
growth and development of a market such as Qatar’s, is the stability and security that an established, well-founded and fair legal and judicial system brings to investors, guaranteeing peace of mind that their interests would be protected in case of a dispute. Qatar has realised the importance of bringing such security to investors and is working steadily and surely towards achieving these goals.
Khalifa Al Misnad is partner with legal firm Al Misnad & Rifaat.
qatar perspectives Bringing talent management to life in Qatar Right now, business in Qatar is experiencing prosperity, achieving impressive growth at a time when growth is hard to come by in other parts of the world. To sustain that growth in the long term, there needs to be continuous investment in one factor - talent, writes Erika Maree
In Qatar, the need to invest in talent takes on added significance, with the need to ensure Qatarisation and attract key skills from the global market.
A company is only as good as its people. Today we know that talent not only has a positive and direct connection to a company’s financial performance, but can be the biggest differentiator that separates one organisation from its competitors. Worldwide, the discipline of talent management is booming. Battered by a decade of financial crises, executives have learned the hard way that their people can literally make or ruin the business. Talent management is becoming as important as traditional business imperatives such as generating revenues and managing costs. In Qatar, the need to invest in talent takes on an added significance with the twin imperatives of ensuring Qatarisation, while attracting key skills from across the world in a competitive global talent market. Qatarisation and talent management are not two different things. In fact, they aim for similar outcomes and objectives: to acquire and place the right people; to develop and connect them; to engage and retain them. Qatarisation is effectively talent management for Qatari citizens, and means that the development of the Qatari workforce, through proper education and training, is a national priority. Every company in Qatar should place Qatarisation at the heart of its strategic talent management plans. It presents a significant opportunity for companies to get a competitive edge not only locally, but regionally and globally. The problem is, despite all the attention paid to the idea of talent, most organisations are not managing it through a coherent, unified strategy. Effective talent management is not
a stand-alone discipline. It has to link directly with business objectives to address critical challenges such as filling gaps in the leadership pipeline; filling key positions; creating a performance-driven culture; accommodating rapid hiring due to growth; developing new skills resulting from business changes; and keeping employees engaged and satisfied. The problem is that many organisations have different divisions that deal with recruiting, performance management, development, succession planning, workforce planning and benefits. It is important to get these departments collaborating, so that organisations can have a holistic view of their people from the day they join until the day they leave. The human resource (HR) function must adopt an integrated talent management approach. Successful HR organisations ensure the robust coordination of efforts across all relevant departments, working to common objectives. There has to be a willingness to work together, and a culture of cooperation for the wider business benefit. Talent management as a concept is not always understood either by HR or top management. It is not a goal in itself: it is a potent enabler for achieving organisational objectives by managing talent risks that are generated by uncertainty in business demand. Implementation of the talent management strategy lies with management. If management does not buy in to the idea, talent management will fail. Managers are ultimately the gatekeepers of the biggest asset of the company – talented
18 | The Edge
employees – and must be supported to work with HR to ensure that practices and systems are in place to support the strategy. A high-impact, integrated talent management approach starts by identifying the unique organisational challenges, structuring the HR division to meet these needs, and knowing what people are needed to support the business goals. Companies that do this are on the way to realising the powerful competitive advantage of having talented, committed people from the start to finish – and will be the successful businesses of tomorrow.
Erika Maree is a senior manager and HR consultant with KPMG Qatar.
The Edge would like wish our readers and advertisers
Contents: Qatar’s bond markets bring longer domestic tenor option 21. Challenges facing family-run businesses 22.
finance & markets
HE Minister of Finance Ali Sharif Al Emadi (right) with HE Sheikh Abdullah bin Saud Al Thani, governor of QCB, in Tunis to attend the opening ceremony for Arab financial institutions. (Image Reuters/ Arabian Eye)
Qatar’s bond markets bring longer domestic tenor option With at least USD210 billion (QAR764.4 billion) to be spent by Qatar’s government and corporate sector on development projects ahead of the 2022 World Cup, and no corollary room for accommodative currency moves, given the enduring QAR3.64 peg against the US dollar, it makes sense for Qatar Central Bank (QCB) to continue to mop up excess monetary liquidity through domestic bond issuances, writes Simon Watkins
T
hese bond issuances are in line with the monetary authorities elsewhere in the region, although these issues are becoming more interesting. As opposed to the previous local currency quarterly government bond sales that began in March 2013 – usually with a QAR3 billion conventional bond issue, and another QAR1 billion of sukuk issuance, of
three- to five-year tenors – last month’s QAR4 billion total offering saw a substantial extension of the yield curve. It included QAR2.1 billion in three-year bonds and QAR950 million of five-year debt, both of the non-sukuk variety, but with another QAR950 million in a seven-year tranche. “Not only does this longer tenor provide a further mechanism for smoothing out
excess liquidity over a more manageable timeframe but it also provides a benchmark for future corporate bond offerings as well,” highlighted Roger Nightingale, chief executive officer of fund management advisory firm, RN Associates, in London. Indeed, in respect of the former, QCB launched monthly auctions of 91-, 182- and 273-day treasury bills in May and August The Edge | 21
sectors | finance & markets
2011. This resulted in available liquidity dropping to just QAR5.8 billion by the end of 2011 (from QAR73.2 billion in 2010), but liquidity began building again from a year later, with bank deposits soaring to a record QAR448.9 billion in November 2012, a 30.5 percent jump from November 2011, according to QCB data. Concomitantly, it pushed the average three-month interbank lending rate down to an inflation-boosting 0.76 percent for a period in November 2012, the lowest since June 2011, from a March 2012 peak of 1.75 percent. Since then, with continued treasury bills and local currency bond sales, it has settled back around the inflation-containing 4.5 percent level. In the context of the latter, meanwhile, building out the yield curve for conventional government bonds will certainly allow greater flexibility in funding for new projects, or for refinancing operations, for Qatar’s corporate sector. This point was underlined by QCB governor HE Sheikh Abdullah bin Saud Al Thani following the introduction of the longer-dated bonds: “The type of bonds and the auction volume to be issued in the future would depend on liquidity conditions as well as the stance of monetary policy at that time, and is in line with the objective of lengthening the maturity profile and thereby developing the government debt market.” This flexibility will be especially valuable at a time when they are looking to increase their international investment pools, following the recent reclassification of the Qatar Stock Exchange from Frontier to Emerging in MSCI’s investment indices. Indeed, it is interesting to note that on the same date that QCB announced the longer local debt tenor, Commercial Bank of Qatar announced its intention to meet international fixed income investors (Bank
Questions remain as to the degree to which property markets in the GCC are again becoming overheated. 22 | The Edge
of America Merrill Lynch, HSBC, and Morgan Stanley have been mandated for the issue) for a potential benchmark dollar bond issue, which may well be at the long-end of the five- to seven-year duration.
QATARI COMPANIES AMONG FORBES MIDDLE EAST TOP 500 COMPANIES IN THE ARAB WORLD 2014
Regional monetary policy
Industrials
To put these new developments into a regional context, questions still remain as to the degree to which certain property markets in the Gulf Cooperation Council (GCC) are again becoming overheated. The region’s emergence (palpably from around 2010) from the global financial crisis that began in 2007 has been reflected in a resurgence in its level of bond issuance. Of this, in 2013, a total of USD51.5 billion (QAR187.5 billion) was raised by the GCC’s central banks (of Kuwait, Bahrain, Qatar, and Oman). The QCB accounted for USD16.20 billion (QAR58.97 billion), a 172.55 percent increase from the 2012 figure (compared to the highest level of issuance in the region, the Central Bank of Kuwait’s USD25.4 billion/QAR92.46 billion). As it stood, Qatar’s corporate bond issuance was relatively robust, at USD6.7 billion (QAR24.39 billion), during the year, representing 41.3 percent. This was in line with that from United Arab Emirates issuances (although the overall nominal figure was much higher, at USD18.8 billion/ QAR68.4 billion). Across the region as a whole, the split between conventional and sukuk bond issuance was virtually even (with the latter having a slight edge at 51.4 percent of the total debt offerings).
107companies
Industries Qatar ranks first QAR 114 billion
Banking
101 companies QNB ranks first QAR 135 billion
Insurance
31 companies Qatar Insurance with largest market value QAR 8 billion
Retail
17 companies Qatar Fuel gets top honours QAR 16 billion
Business strategy
Challenges facing familyrun businesses KPMG’s Middle East and South Asia steering group for family businesses recently held a meet to address how the firm can best help develop familyrun businesses. by Aparajita Mukherjee Talking to The Edge on how family businesses can best meet the requirements of professionalisation, Yacoub Hobeika, partner of KPMG Qatar and head of family
Telecom
15 companies Ooredoo QAR 45 billion
Transport
15 companies Nakilat QAR 12 billion
finance & markets | sectors
businesses and enterprise said, “Family businesses in Qatar have seen rapid growth and are highly diversified. However, the market competition has exposed strategic and operational challenges in many family businesses and professionalisation is required to run them with enduring success.” In Hobeika’s opinion, to run a successful family business, the owners need an understanding of the process of business strategy. Explaining further, he said, “Many of the large family businesses have reached the stage where it is necessary to have a more structured governance process – one which is less dependent on the leader. The majority of family businesses have the second or third generation joining the business, and governance structures should be flexible enough to address the diverse interests of more family members from different generations.” “A well-defined approach to succession planning is needed to accommodate the needs and demands of family members, and introduce external professional managerial talent where critical competencies are absent within the family. This can enhance professionalisation in such businesses,” said Hobeika. Most family-owned businesses in Qatar are diversified, handling sectors such as automotive, construction and IT. When asked how to ensure a single unified vision for these diverse business units, Hobeika said, “Family businesses should have stringent evaluation processes of their entire business portfolio based on the unified longterm goals of the business. This process may involve divestment of businesses that no longer fit into the long-term growth strategy. A detailed business portfolio review should be carried out to identify the non-performing businesses.”
Yacoub Hobeika, partner of KPMG Qatar and head of family businesses and enterprise, told The Edge that family businesses in Qatar have been exposed to the realities of the strategic and operational challenges by market competition.
The Edge | 23
sector name | banner heading
24 | The Edge
Contents: Qatar to broaden its LNG exports market further, to Pakistan 25. Bringing Qatar down on the C02 emissions list 26. QSE puts itself centre-stage in global solar energy game 27 .
energy & sustainability
The Pakistan government is keeping three options open for LNG imports - a supply agreement with Qatar on a state-to-state basis, floating tenders for import through competitive bidding, and spot purchases after the successful bidder completes construction of a terminal in Karachi.
Qatar to broaden its LNG exports market further, to Pakistan Following on from the recent announcement from official Qatar sources that the state now delivers liquefied natural gas (LNG) to 26 out of the current total of 29 LNG importing countries, accounting for 33 percent of the world’s LNG supply, news emerges that Qatar has given a firm commitment to Pakistan that it will start exporting 200 million cubic feet of LNG per day (mmcfd) next year, which may be expanded to 400 mmcfd, according to sources in Karachi. by Simon Watkins
T
he deal follows a meeting on May 13 in Karachi between a negotiating team from Qatar and officials from Pakistan State Oil, the Sui Southern Gas Company, and Interstate Gas Systems (ISGS) – a state-run company formed to handle energy import projects – that discussed a non-binding document outlining the main issues relevant to such a partnership agreement. Pakistan’s commitment to securing LNG supplies can be gauged from the fact that it is already building its own LNG terminals, one of which is expected to be completed in the second half of this year and, according to Pakistan’s former Ambassador to Qatar, Syed Hassan Raza, “Qatar will gain a lot from this export of LNG to Pakistan, as Pakistan needs on a sustained basis a regular supply The Edge | 25
sectors | real estate & construction
Overall, though, the need for Pakistan on the gas energy front is pressing, as, according to an assessment from the Ministry of Petroleum, gas production will drop from the current 4.47 billion cubic feet per day (bcfd) to 2.53 bcfd in 2019 to 2020 if additional supplies are not sourced, leaving a gas shortfall of 4.79 bcfd in 2019 to 2020, compared to one of 1.88 bcfd in 2013 to 2014.
Green energy
Bringing Qatar down on the CO2 emissions list Pakistan’s Petroleum and Natural Resources Minister, Shahid Khaqan Abbasi, stated recently that prices for the potential Qatar–Pakistan LNG deal had not been finalised yet. (Image Reuters/ArabianEye)
USD
2
billion
Value of Pakistan’s annual LNG market. that would be annually worth more than USD2 billion (QAR7.28 billion).” According to Pakistan’s Petroleum and Natural Resources Minister, Shahid Khaqan Abbasi, although the two sides discussed a wide range of contractual clauses, the subject of price has not yet been finalised, with the intention being to address this issue in July. However, Qatar’s efforts to include a clause that would allow it to place a USD200 million (QAR728 million) penalty if Pakistan terminated the supply contract were apparently not accepted by the Pakistan team. As it currently stands, Qatar maintains the position that the LNG supply contract should be for 15 years initially, and extendable for another five years with no price reopener, and the LNG price to be fixed as a percentage of the brent crude oil price. 26 | The Edge
In this context, during negotiations with the previous Pakistan People’s Partyled government, Qatar had offered LNG export at a price equivalent to 14.7 percent of brent crude oil when it was hovering around USD110 (QAR400) per barrel in the international market, but later Qatar pushed the price down to USD17.437 (QAR63) per million British thermal units (mmbtu), a 0.5 percent discount over the previous rate of USD18.002 (QAR65.52) for the 20-year lifetime of the project. However, this latter price did not cover capital cost of the LNG terminal and its charges, import expenses, re-gasification, wastage, and shipping costs. These additional costs would add about USD2.084 (QAR7.58) per mmbtu to the quoted price. However, in this respect, the Pakistan side has separately awarded the LNG terminal services contract to Elengy Terminal Pakistan, a subsidiary of Engro Corp, and ISGS has already signed IranPakistan and Turkmenistan-AfghanistanPakistan-India gas pipeline deals. Additionally, the Pakistan government is keeping three options open for LNG imports – including a supply agreement with Qatar on a state-to-state basis, floating tenders for import through competitive bidding, and spotting purchases after the successful bidder completes construction of a terminal in Karachi.
Qatar University’s carbon capture and management project aims to reduce energy-intensive and carbonproducing electricity generation and water desalination.
Given that Qatar still has the highest percapita emission of carbon dioxide in the world, according to the United States Department of Energy’s Carbon Dioxide Information Analysis Center (among others) – three times as high as the United States itself – it is clearly welcome that Qatar University’s Gas Processing Centre (GPC) is working on a project that aims to capture carbon mainly from industrial and natural gas streams, according to the university’s vice president for research, Dr. Hassan Al Derham. “Qatar University’s Gas Processing Centre Carbon Capture and Management (CCM) team is developing a series of technologies for carbon dioxide capture, which focuses mainly on liquid solvent and solid sorbents as well as catalytic conversion technologies,” he says. Given that the oil pumped, and gas extracted, from the country’s sands is not counted against its carbon consumption (unless it is burned in-state), it may surprise many that its carbon emissions are second to none. However, the electricity and water provided to residents of Qatar, the former burning relentlessly in air-conditioners, for example, and the latter often produced by desalinating seawater – is particularly
energy & sustainability | sectors
energy-intensive, and demand in the country is rising by seven percent per year. The GPC is adopting a CCM research programme based on the previously developed GPC Technology Roadmap, which identified promising directions for research at the CCM, and Dr. Abdelbaki Benamour, who leads the liquid solvent technology research team, said that the project is running in tandem with national environmental policies with the Ministry of Environment as a member of a consortium created by the GPC. Al Derham concludes that the 2.8 percent of Qatar’s gross domestic product (GDP) that is to be spent on research and development activities in this context is clearly money well spent.
Solar power
QSE puts itself centre-stage in global solar energy game It has been a standout period for Qatar Solar Energy (QSE), a private initiative supported by the Qatar government, with technological developments and new deals placing the firm at the forefront of the solar energy supply complex from the Middle East and North Africa (MENA) region.
To begin with, in early June, QSE unveiled a new vertically integrated solar panel manufacturing and research facility – located in Doha’s New Industrial Area – which can produce panels capable of generating as much as 300 megawatts (MW) of energy annually, the largest in the MENA region.
Solar energy is set to bounce back globally 800 700 600
70
Solar
60
Biomass and waste Wind
50
Other
500 40
400
30
300 200
20
100
10
0 01 2013
02 2013
03 2013
04 2013
01 2014
0
Total new investment New-build asset finance (value)
New-build asset finance (no. of deals)
The increase per year in demand for desalinated seawater in Qatar, which is highly energy-intensive to produce.
Energy Country Attractiveness Index, new investment in clean energy increased 10 percent in Q1 2013 to USD47.7 billion (QAR174 billion), largely due to a 42 percent increase in the small-scale solar investment sector (totalling USD21.2 billion/QAR 77 billion) and the continuous opening up of new markets. “While the Q1 2014 figure represented a drop in Q4 2013 investment totalling USD58.1 billion (QAR211 billion), a rush to meet yearend incentive deadlines can often distort final quarter figures,” stated Ben Warren, EY’s London-based energy and environmental infrastructure leader, “with Europe and the Americas - excluding the US and Brazil experiencing a fall in investment on the same quarter last year while all other regions saw investment increases.” Having said that, the appetite for new solar supply in Asia remains buoyant, according to industry figures, with China’s government, for example, having recently announced plans to install 70GW of solar capacity by 2017, double its previously announced target of 35GW by 2015, and forecasts for Japan indicating as much as 36GW of new solar capacity by 2018. Additionally, intra-regionally, Egypt is reportedly looking to invest USD1 billion (QAR3.6 billion) in solar energy over the coming years, with government sources indicating that a giant project is in the pipeline, while in the United Arab Emirates, the Dubai Electricity & Water Authority in April opened a tender for 100MW of solar PV
Investment value (USD$b)
7%
Although Qatar, given its position as the largest exporter of liquefied natural gas in the world, is unlikely to trade fossil fuel production for solar anytime soon, such a shift towards greater uptake of renewables in the country is in line with the Qatar government’s plans to convert at least two percent of its power output to renewable sources by 2020. QSE also announced initiatives to cater for this growth. “We have plans to expand our capacity to 2.5 gigawatts (GW),” said QSE board member Reyad Fezzami, “as solar energy is now global, and is a cost-competitive point for consumers, and it is growing [rapidly] in every country in the world.” Indeed, constant improvements in solar technology and a sharp fall in the price of silicon (a primary raw material used to manufacture wafers for solar modules) to about USD20 (QAR73) per kilogram (kg) from nearly USD400 (QAR1456) per kg in 2008, have helped bring the unit cost of solar energy closer to non-renewables. This is reflected in the cost of QSE’s polysilicon imports from its largest suppliers – Kazakhstan, Germany, and China. Such cost reductions are likely to push solar energy sourcing investment back up again, following a slight drop globally, as prices spiked and take-up in the key markets of the eurozone declined over the course of last year due to the ongoing squeeze in public finances in periphery countries (see chart). Even as it stands, though, according to EY’s June 2014 publication, Renewable
Source: BNEF project database and global trends in clean energy investment - Q1 2014 fact pack, BNEF. April 2014. Values include BNEF estimates for undisclosed deals.
The Edge | 27
sectors | energy & sustainability
capacity, the second phase of the 1GW Mohammed bin Rashid Al Maktoum Solar Park (the first 13MW, phase was opened in 2013). In this context, QSE has also announced that it has signed agreements with Jermyn Capital to supply panels capable of producing 150MW of solar power to the Japanese market and with Power Capital to supply panels to generate 150MW to the Thailand market. According to statements from the respective counterparts, QSE was chosen as the solar provider of choice for its ability to deliver higher efficiency solutions at lower costs with plans to work together with both companies on solar power initiatives; in fact, QSE is currently the only facility for ingot, wafer, cell and module production in the MENA region. Fezzami highlighted this unique market position, saying, “In this research-cum-manufacturing facility, we are not only producing one of the best products in the world, but also constantly focusing on improving technology and efficiency which cover more than just solar energy.” Given that QSE meets all global standards on solar technology, its products can be used anywhere in the world, but he adds that the products are more suitable in the MENA region because of their high levels of solar radiation levels. More particularly, says QSE’s chief executive officer, Salim Abbassi, the QSE business model is focused on large end-users (such as 5, 10, and 15 to 30MW projects in the world), and not on the domestic individual markets, given that this market in the region has not yet developed to a stage where certified installers are available. Nonetheless, looking further forward, QSE is currently working with a range of other firms to find ways to introduce the concept and installation in the individual domestic market so that when the demand is there, QSE can deliver those solutions as well as the larger projects lined up.
QSE is currently the only facility for ingot, wafer, cell and module production in the MENA region.
28 | The Edge
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Contents: No respite for Doha’s residents as rents continue to rise 29. Malls in Qatar: Latest trends 30.
real estate & construction
No respite for Doha’s residents as rents continue to rise
While Doha’s residential sector is undersupplied, the Pearl-Qatar has a vacancy rate of 75 percent, primarily around the zones that have yet to be completed. These finished units are expected to see high occupancy rates once neighbourhood retail facilities are completed, and a healthy tenant mix of food and beverage units come into place. (Image Flickr Aih.)
As the average family size in Doha continues to decrease, the demand for residential units sees a rise, accompanied by the influx of expatriates. With rental contracts more or less up to the discretion of landlords, residents in Doha face rental increases, reaching four percent in the first two quarters of 2014. by Farwa Zahra
A
s the commercial sector in Doha has seen a rental freeze by the government, real estate company Colliers International indicates no increase in rents for office tenants and retailers. However, the residential sector continues to show rising rents. Rents have been on an upward trajectory since 2012, increasing by 10 percent in 2013. “We have seen pace of growth slow to a more manageable level of four percent in 2014,” Ian Albert, regional director, Colliers International,
tells The Edge. “However, as the population increase continues to apply pressure to an undersupplied market, we anticipate that rentals are likely to maintain an upward trend throughout 2014,” Albert added. With no rental cap enforced for residential units, Albert said that renewed contracts are left to the discretion of landlords. According to Colliers‘ quarterly report for Q2 2014, an increasing population, rapid development in Qatar, and undersupply of residential units are
not the only drivers of rental escalation. The report states, “Average household size is continuing to decline in Doha. From an average household size of 5.01 in 2002, it has now fallen to 4.4. A decreasing household size together with an increasing population is likely to drive up demand for more housing units in the city.” Based on this household size and after excluding elementary workers, Colliers estimated the residential demand to reach 266,000 units by 2018. The Edge | 29
sectors | real estate & construction
Primary research conducted by Colliers suggests that the occupancy rate across Doha is currently 85 percent, while the high-end gated communities are currently enjoying average occupancy rates of approximately 97 percent, indicating a preference and high demand for such accommodation. With a majority of apartments, the residential units in Doha totalled 122,000 by the end of 2013, according to the research. About 75 percent of completed units in the Pearl-Qatar are still vacant. “The majority of units vacant are those around the zones that have yet to be completed. Within some locations there is a lack of community feel and limited convenience retail, and food and beverage (F&B) amenities,” said Albert. He explained that once neighbourhood retail facilities are completed, and a healthy tenant mix of F&B units come into place, these recently completed units are likely to see an increase in occupancy rates. Talking about future master plans, Albert mentioned Lusail. The project, once completed, is likely to add a further 48,000 units into the market. The heightened levels of supply in the future will help relax rental inflation. That said, considering a recent report on the slow progress of completing housing units by Damac Properties in Lusail, the reality of another 48,000 units is seemingly less likely in the near future.
“We anticipate rentals are likely to maintain an upward trend in 2014.” - Ian Albert, regional director, Colliers International. Retail sector
Malls in Qatar: Latest trends
The Mall of Qatar is scheduled to be fully finished in the last quarter of 2015. Pictured here is a model of the mall displayed at Cityscape Qatar 2014.
To balance the pace of expatriates coming into the country, Qatar is also strategising the expansion of its retail base. In an interview with The Edge, Shem Krey, deputy managing director, Mall of Qatar, discusses some trends in Qatar’s malls. More outlets of same brands
Ian Albert, regional director, Colliers International, says that established residential developments with good accessibility and social infrastructure facilities will continue to perform competitively, compared to developments that do not offer such facilities.
30 | The Edge
Some may see having multiple outlets of a brand in close vicinity or in the same mall as redundant or cannibalising. According to Krey, the practice of housing more than one outlet in a single mall is an emerging trend in Qatar. Instead of being redundant or detrimental, retailers are looking for a competitive advantage to have more distribution of their brand. Having one of their shops in a mall is not doing it. “Why are there two Starbucks right across the same square in these bigger cities? It is because of this density of market penetration allows you to actually sell better in each of the shops if you have more brand awareness,” he said, adding
that “the outlets are looking for two, three, four and five outlets” in bigger malls.
Increasing spending power
Qatar has one of the highest incomes per capita with a majority of its population employed, resulting in increased purchasing power. Considering the increasing number of expatriates, the number of employed customers will further expand benefits of the retail sector. “Income is tax-free as compared to places like Europe and United States, where people’s spending capacity is not as capable,” added Krey.
Growing tourism industry
“Tourism is growing in double digits each year in Qatar,” said Krey. The growth of tourism also means an increase in the average spend within Qatar. Symbiotically, the increase in the number and scale of malls can also boost the country’s tourism industry. “So those big regional malls do attract tourism. We believe that the Mall of Qatar will encourage further to the country,” he concluded.
Contents: Could Q-Post and Royal Mail tie-up improve Qatar’s postal services? 31. Tracking technology links driving habits to insurance costs 32 .
tech & communications
Could Q-Post and Royal Mail tie-up improve Qatar’s postal services? The Ministry of Information and Communications Technology (MICT) and the British Royal Mail recently signed a memorandum of understanding (MoU) for the modernisation of Qatar Postal Services Company (Q-Post).
t
he MICT, which took over the running of Q-Post, is looking to improve the services offered by the country’s postal service. Since absorbing it into the MICT, numerous online services have been introduced such as online tracking for delivery, and even a mobile application that allows you to track parcels. The MoU is a first step in developing “mutual cooperation and exchanges, till such time as more definitive contractual obligations have been arrived at,” revealed a statement by MICT. Unlike postal services in other developed countries, such as the United States Postal Service which made a loss of USD1.9 billion (QAR6.9 billion) this quarter, the Royal Mail, which has over 300 years of experience in the postal services industry, has managed to transform its business model to stay relevant. This knowledge could greatly benefit both individuals and businesses in Qatar, said Faleh Al Naemi from the MICT, who signed the MoU. Indeed, if models such as those adopted in the United Kingdom (UK) by Royal Mail were applied in Qatar, it could prove a boon to e-commerce, specifically to deliveries in the country. Last year in the UK alone,
The Royal Mail service in the United Kingdom delivers more than one billion parcels a year. It has managed to stay relevant and profitable in the changing market, something Q-Post will be looking to replicate as it drives transformation of its business functions. (Image Reuters/ArabianEye)
The Edge | 31
sectors | technology & communications
SATISFACTION WITH Q-POST SERVICES
47%
AWARE AND used online services
43%
AWARE BUT NEVER USED ONLINE services
10%
UNAWARE BUT INTERESTED TO KNOw Source: Households and Individuals Survey, 2013
Royal Mail delivered one billion parcels. Al Naemi stressed that one of the potential advantages to Q-Post would be enhancing the skills and capabilities of Q-Post’s management as well as technical skills
for staff. The MoU also stated that Royal Mail would provide strategic assistance in implementation of its transformation. However, Q-Post is likely to face many challenges in implementing its vision
Smart cars
Tracking technology links driving habits to insurance costs A deal signed recently between Qatar Mobility Innovations Center (QMIC) and Qatar Insurance Company (QIC) will test a pilot project that links drivers’ performance to insurance plans. As a first step, QMIC and QIC are launching a pilot project with a group of volunteers. The Masarak Telematics Platform developed by QMIC will be used to monitor and assess driver behaviour. This will eventually be used to optimise a driving ranking and assessment system that will identify a set of performance indicators that will enable the delivery of a Pay-How-You-Drive insurance plan. The hope is that these insurance plans
32 | The Edge
Ali Saleh Al Fadala, senior deputy group CEO of QIC, said the pilot programme could be a key step to making a significant and positive difference in altering driving behaviour and increasing road safety.
will serve as a key motivator to keep bad driving habits in check and increase road safety. A recent study from the University of Michigan Transportation Research Institute, that compared mortality from road crashes in 193 countries found Qatar to have one of the highest percentages of fatality rates arising from road accidents. Qatar was ranked second with 14.3 percent behind
of becoming the preferred choice for residents in Qatar. A recent MICT report Qatar’s ICT Landscape 2014: Households and Individuals found that much work needed to be done to improve consumer views of Q-Post. In fact, 88 percent of the population had not used Q-Post services over the past 12 months. The survey also found that 44 percent of people were unaware of Q-Post’s online services and of those, nearly half stated they were not interested in knowing about them, preferring to use global courier services such as DHL and Aramex. In a recent speech, Hessa Al Jaber, Minister of MICT, said there would also be some changes in the coming period to regulate the postal sector “toward providing services that fulfill customers’ needs, be they individuals or corporates, as well as developing an infrastructure for postal service networks and systems”.
only the United Arab Emirates at 15.9 percent. As part of the pilot programme, more than 25 percent of the employees of QIC in Qatar have volunteered to participate in the pilot programme to determine how to make the technology available to the market. The intelligence programme will learn about driver behaviour through devices embedded in participating vehicles. The invehicle device will be able to collect data for evaluating key driving habits including harsh acceleration, harsh deceleration, over-speeding and distance driven. All these factors will be used by the Masarak iFleet cloud-based system to compute the driver scorecard, where drivers can then be compared and ranked. Ali Saleh Al Fadala, senior deputy group CEO of QIC, commented, “As the national leader in the insurance industry, QIC is proud to partner with another national firm like QMIC to use innovative systems and technologies to introduce innovative insurance applications for road safety and for the first time in the region. This partnership is a key step to make a significant positive difference in road safety and driving behaviour.” Driver data coupled with proper incentives based on habits could influence the driving behaviour and have a significant impact on road safety.
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Though West Bay’s iconic skyline in 2009 - The Edge’s first year of publication - was developing rapidly, even some of Qatar’s most iconic structures had yet to be completed. Which familiar buildings that have since been constructed can you spot by their absence from this image? Bonus points for spotting Rafael Nadal of Spain and Roger Federer of Switzerland play tennis on top of a dhow to launch the 2009 ATP World Tour during previews for the Exxon Mobil Qatar Open. (Photo Getty Images)
34 | The Edge
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the edge
years of
2009 to 2014
The Edge | 35
Five Years of The Edge: 2009 highlights Launch Issue Cover Labour Challenges
Story:
Qatar’s
In the cover story of the first edition of The Edge, released in July 2009, we chose to highlight an issue that, five years later, is still a pertinent topic of discussion in Qatar: its foreign labour force and the challenges that it presents to this small Gulf Emirate. “Qatar’s spike in economic activity over the past five years, in particular, the rapid increase in large-scale domestic infrastructure, and investment projects and rising government expenditure, has propelled the unsustainable rate at which Qatar’s national-toexpatriate population ratio has grown,” wrote The Edge’s first
editor, Kelly Lewis. In our cover story, we discussed why Qatar must define the size of its expatriate workforce by both market and social needs, because the composition of Qatar’s population will determine the nature and cohesiveness of its society, and shape its future generation. Stated differently, the unprecedented increase in the number of expatriates was felt to potentially cause erosion of national identity. The article goes on to discuss issues surrounding the labour rights of youth and women in the Gulf and Qatar, topics that, it seems, are also totally relevant today.
Qatar is facing an important challenge [to combat the rising number of unskilled migrant workers]...it’s a phenomenon that is intensifying and needs to be tackled.” HE Dr. Ibrahim B. Ibrahim, the secretarygeneral of the General Secretariat for Developmental Planning and economic advisor to Qatar’s HH the Emir Father Sheikh Hamad bin Khalifa Al Thani.
then and now Migrant workers in Qatar 2009
1,101,680 2014
1,449,234
Telco Tussle Staying on the IT front, in ‘Telco Tussle’, The Edge ’s launch issue also took a look at Vodafone’s entry that year as Qatar’s second mobile service provider and the impending battle for market share that would ensue. A cheeky launch party that included senior managers entering the hall riding camels, and employees releasing balloons bearing the slogan ‘Bye Bye Qtel, Hello Vodafone’, appeared to be a highprofile challenge to the opposition. “Perhaps unused to competition in the domestic market, especially of the sort served up by its rival, Qtel hit back, accusing Vodafone of negative campaigning that was contrary to the traditional business culture of Qatar,” wrote Oxford Business Group’s Daniel Moore in the article.
Vodafone Qatar’s cheeky launch party included senior managers riding camels, and employees releasing balloons bearing the slogan ‘Bye Bye Qtel, Hello Vodafone’.
then and now
Food Security: Undersupply / Overdemand In issue three of The Edge , October 2009, focus switched to another pressing issue for Qatar, food security, as we reported on the formation and activities of Hassad Food. “As part of Hassad Food’s drive to ensure food security (in meat, wheat, rice, corn, soy beans, fruits and vegetables for Qatar and the region), it will invest in existing agricultural businesses and projects around the world and re-export the produce where needed,” wrote Kelly Lewis. Downstream Debut DOWNSTREAM Other highlights from INDUSTRIES our first year included ON THE UP the cover story in our fourth issue, where we discussed on Qatar’s downstream oil and gas ambitions in terms of producing petrochemical byproducts, including fertilisers. Based on the fact that Qatar had become the largest exporter of liquefied natural gas in 2008, in November 2009, we discussed why Qatar’s oil and gas sector would remain the backbone of the country’s economy and how further investment in midand downstream manufacturing would further strengthen this. COVER STORY
Despite Qatar’s efforts to further diversify its national income and reduce its reliance on depletable resources, the oil and gas sector remains as the backbone of the country’s economy. By Kelly Lewis and Abdel Rahman Abdel Basit.
COVER STORY
I
n recent years the Middle East has become recognised as the hub for the global petrochemicals industry, with Gulf Cooperation Council (GCC) countries emerging as the largest producers and exporters of petrochemicals and plastics. However, while the industry has not been immune to the economic impact of global slowdown, it has continued to show strong signs of growth. Experts say that ambitious investment initiatives into the petrochemicals sector – which have been earmarked for 2010 totalling more the US$50 billion (QR182 billion) and US$12 billion (QR44 billion) in Qatar alone – has cemented the Middle East’s position as the ‘natural home’ for the petrochemical industry. The Middle East offers a superlative opportunity for companies in this sector and with huge volumes coming on line over the next few years – the GCC becoming the focus of international polymer producers and converters – there is immense growth potential for the regional downstream plastics industry. For example, today Saudi Arabian low-density polyurethane (LDP) is delivered to Chinese factories at prices lower than locally produced LDP: • Production of polyethylene-based products in the Middle East is projected to grow by 20 percent in 2010. • Middle East share in the global ethylene market is expected to grow from nine percent in 2004, to 17 percent in 2010. • And 40 percent of all new ethylene capacity will be built in the Middle East. The Financial Times has made clear its view, saying that the present crisis may be the making of the Gulf’s chemicals industry. Chiefly, it says this is because of easy and cut-price access to oil and gas. Seeking to capitalise on this advantage, governments have thrown cash at their petrochemical industries in recent years, expanding total output to US$59.6 billion (QR217 billion) and an annual growth rate of more than nine percent since 1997. The Gulf focuses mostly on basic petrochemicals such as ethylene, polyolefins, polypropylene, but will soon be able to produce a wider array of chemical products and it is already a leading manufacturer of fertilisers.
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VODAFONE 2010:
OOREDOO QATAR 2010:
2,052,540
2013:
2013:
1,084,000
2,449,123
then and now
464,962
NOVEMBER 2009
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2010
sector name | banner heading
HH the Emir Father Sheikh Hamad bin Khalifa Al Thani holds up the FIFA World Cup trophy in December 2010 as Qatar wins the bid to host the tournament in 2022. Qatar will become the first Middle Eastern country to host football’s largest tournament. (Image Reuters)
The Edge | 39
Five Years of The Edge: 2010 highlights Urban Planning In 2010, The Edge explored Qatar’s rapid growth and development from the perspective of both local and international companies. The February issue looked at sustainability and urban planning in Qatar. Managing Editor Kelly Lewis interviewed Ali Abdulla Al Abdulla, director general of Qatar’s Urban Planning and Development Authority. We learned of plans for the state’s infrastructure development, taking a close look at the newly-published Master Plan for Qatar, which included a more effective transport system, initiatives towards a green environment, upgrading existing infrastructure and water supply.
“I’m positive that we will achieve our goal because from the beginning of this year, we’ve begun a fiveyear plan to upgrade and revamp many of Qatar’s major roads.” – Ali Abdulla Al Abdullah, director general of Qatar’s Urban Planning and Development Authority.
Qatar will invest over QAR510 billion over the next five years in transport infrastructure to transform Qatar. (Source: Deloitte, 2010)
Vodafone Home The Edge met chief executive officer of Vodafone Qatar Grahame Maher. After less than a year in the market, Vodafone had captured a 22 percent market share. “Here in Qatar you have some of the richest people in the world, the poorest and everything in between – with every nationality and every language,” said Maher. “So we have a great environment to develop innovative solutions that fit the whole world.”
Vodafone Qatar’s New Zealander CEO Grahame Maher did what few Western executives have managed in Qatar: successfully take on an incumbent parastatal entity (Qtel) with great flair – and some cheek and grit – yet also ostensibly charmed the Qatari business establishment simultaneously. He died suddenly in late 2010, but is still remembered fondly by all in Doha who knew him.
In 2010, Qatar Holding, an investment arm of the Qatar Investment Authority, purchased the London department store Harrods in a deal reported to be worth USD2.3 billion (QAR8.4 billion) (Image Getty Images)
OVERSEAS INVESTMENTS The November edition of The Edge explored the acquisitions and investments being made by Qatar Investment Authority (QIA), the Gulf’s youngest sovereign wealth fund, in the overseas market, particularly in the retail, real estate and financial sectors. “The world’s largest exporter of liquefied natural gas became one of the fastest growing economies worldwide in 2009. It grew at an average pace of 17.4 percent over the past five years. Qatar has been quietly building an industrial and sector-based investment portfolio, which would rival even the most adventurous and diversity-driven multinational,” wrote author Rachel Morris. QATARISATION QUOTAS In October 2010, Morris then looked at the present and future of Qatarisation. The first serious push for Qatarisation was led by HE Abdullah bin Hamad Al Attiyah, then-Deputy Premier and Minister of Energy and Industry, who in the early 1990s announced Qatar’s goal of achieving at least 50 percent employment of Qatari citizens in the hydrocarbon sector. Quoting a RAND-Qatar Policy Institute study of human capital in the Gulf Corporation Council (GCC) countries, the article focused on the realities of the scheme and concluded that though well-intentioned, local private sector employers faced great challenges in meeting set quotas.
Until Qatar’s young nationals receive the education and training needed to equip them with the appropriate skills for the market, the pool of Qatari human resources entering the market will be unqualified.” – RAND-Qatar Policy Institute study of human resources in the Gulf Cooperation Council (GCC) countries: Facing Human Capital Challenges of the 21 st Century .
Girl Power New Acting Editor Miles Masterson spoke to Qatari businesswoman Buthaina Hassan Al Ansari in July 2010. A A member of the Qatar Business Women Forum and Arab International Women’s Forum, Al Ansari had just returned from the Presidential Summit on Entrepreneurship in the United States where she breakfasted at the White House with President Barack Obama. During the interview, Al Ansari told The Edge that women entering the business world here in Qatar are far luckier than those in many Arab countries. “I always say that I am a Qatari, but with an international standard and that I will give my projects a local identity,” she added. ENTREPRENEUR
Al Ansari suggests a threefold countermeasure strategy. Firstly, explains Al Ansari – who holds a Masters of Business Administration (MBA) and in Planning and Human Resources from Qatar University, as well as diplomas from universities and schools in London and Cairo – you need a solid education and must continuously add to your qualifications throughout your career, if possible overseas, to enhance to your world view. “You are facing giants so you have to build your knowledge and your awareness of exactly what you need to deliver,” she says. Qualifications, Al Ansari continues, are only the beginning. You also need to build up a good portfolio in order to sell your service or product. “I have worked with huge corporate names. This adds value to your service, once you mention that.” Thirdly, Al Ansari advises to point out that you are from Qatar and know the market like no one else. “I say I am a local, but with an international standard,” she explains. “I always say: I will give … my projects a local identity.”
part from being the head of strategic planning with Qatar Telecom, Buthaina Hassan Al Ansari is a member of Qatar Business Women Forum (QBWF) and Arab International Women’s Forum (AIWF). To add to her growning list of accolades Al Ansari was also one of only three Middle Eastern women invited to Washington DC in the United States (US), to attend the Presidential Summit on Entrepreneurship in April. “I had breakfast at the White House with President Barack Obama and
career and visibility. “It really added a lot to us, just in terms of choosing me [and how] it will enhance my profile.” Marketing one’s self and/or company, it quickly becomes clear, is central to Al Ansari’s business ethos and is what in part motivated her to start her monthly magazine Qatariat, the first of its kind in the country. “I found there is a big opportunity to target businesswomen, to educate them and enhance their knowledge in terms of how to start their business and how to highlight their achievements to the public,” she
“You are facing giants so you have to build your knowledge and your awareness of what you need to deliver.” - Buthaina Al Ansari
Hillary Clinton and it was really inspiring,” says Al Ansari proudly, adding that being selected both raised the visibility of Middle Eastern businesswoman and was good for her
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explains. “I founded the magazine as a tool to make the connection.” Though, says Al Ansari, there are still a few archaic attitudes in the upper echelons of a minority of Qatari
companies, women entering the business world here are far luckier than those in many Arab countries (and, she agrees, the West, where women executives are still rare in large corporations). This is mainly, Al Ansari adds, thanks to the solid economic foundation of Qatar, and its good reputation internationally, as well as the forward-thinking policies in the education and social upliftment of both genders by the Emir Sheikh Hamad bin Khalifa Al Thani and Consort Sheikha Mozah bint Nasser Al Missned. The Consort has in particular encouraged women to be inventive and creative and therefore, says Al Ansari, “if you are of a high calibre and have experience, the opportunities are there.” Indeed, Al Ansari goes on to explain that is not necessarily being a woman that is the most difficult aspect of doing business in Qatar, but rather being trusted to do a good job as a local in a competitive market dominated by international franchises. “This is one of the most common challenges I face,” she says.
DEVELOPMENT THROUGH QATARIAT
Al Ansari’s experience and motivation is embodied in Qatariat’s three divisions: Qatariat Training and Development, which helps Qatari women to develop their skills; Qatariat Development Consultancy, which assists both women and men with their business plans; and Qatariat the magazine, which is also for men notes Al Ansari. “We do not want to be their competitors, we want to be their partners … the nation needs us both.” The inspiration for her training business was due the lack of skilled women in Qatar. While working in human resources at a Qatar bank a few years ago, Al Ansari was tasked with finding decent staff to fill vacancies,
which she found difficult. So she decided to do something about it, giving rise to Qatariat. “But lately I have found an increasing number of women in the banking sector,” she says. “This is because of the good programmes we have in the schools and universities.” Qatariat therefore aims to enhance the knowledge of female employees
“I always say that I am a Qatari, but with an international standard and that I will give my projects a local identity.”
to empower their rise through the ranks and help maintain a good brand reputation for companies. For example, they run courses and workshops aimed at improving customer service, for both VIP clients and call centres in the banking sector. Al Ansari’s aim, through the development consultancy, is to foster entrepreneurship in Qatar. Apart from helping clients with advertising, branding, logos and networking, the consultancy offers coaching and guidance to both genders as well as steering them through the intimidating process of obtaining a bank loan. However, Al Ansari says this has never been easier for Qataris thanks to the Enterprise Qatar forum for small and medium business enterprises (SMEs) and the Qatar Development Bank. Yet, entrepreneurs, she says, must add something to society and be more innovative when coming up with new ideas for businesses. “Let me give you an example,” smiles Al Ansari, “we do not need another abaya shop, we have enough of those.”
A PASSION FOR CSR
Throughout our interview Al Ansari’s zeal for her life’s ambition
“CSR should not just be part of a policy in a company. It is more than that, it should have its own department, like communication or public relations.”
JULY 2010
then and now
Qatari females in the workplace April 2010 Qatari Females
24,908 32,004 Q4 2013 Qatari Females
ENTREPRENEUR
is obvious. She hopes to continue to expand her business and through Qatariat and the women’s foundations she is involved in and to keep mentoring young girls, who Al Ansari says, can check out her website at www.qatariat.org or contact her any time for input on business matters, as she loves to consult and offer advice.
Nevertheless, it is on the final topic of discussion, corporate social responsibility (CSR), that Al Ansari becomes most visibly passionate. She recently established a company called Qatar CSR, and says that her understanding of the concept is that it should encompass education, health, protecting the environment and be of benefit to society’s less privileged. However, although Al Ansari admits CSR is a powerful and necessary marketing tool for modern companies and this is part of the reason she has embarked on her latest venture. Yet she adds that the altruistic and social benefits are most important – especially when it comes to building awareness among the youth. Indeed, Al Ansari is working to get the basics of the topic taught at schools and universities. Qatar CSR aims to further enhance the young generation by, she hopes, working in collaboration with Qatari companies such as Qatar Airways or Doha Bank, for example, to create a CSR academy. This would be similar to those in London and Abu Dhabi and will produce individuals who specialise in the field. “CSR shouldn’t just be part of a policy in a company,” closes Al Ansari. “It is more than that, it should have its own department like a communication or public relations department, because we are at a time when the environment needs help, the earth needs help… we need to educate our children to practice this in their daily lives.” JULY 2010
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then and now
Qatar State Budget 2010-2011
QAR118 billion 2014-2015
QAR225 billion
The Qatar Prix Du Cadran at the prestigious Prix del’Arc de Triomphe horse race in Paris, attracts more than 70,000 spectators each year. Qatar’s sponsorship of the event was extended till 2022. Seen here is 2010 winner, Frenchman Gerald Mosse, on horse ‘Gentoo’ (Image Getty)
2011
Five Years of The Edge: 2011 highlights Human Resources Challenges Qatar’s human resources challenge is a topic covered numerous times over the years in The Edge including a very candid interview with Ali Al Humaidi, the managing director of Almaras Consultancy, a firm focused primarily on human resource development. Somewhat critical of aspects of the policies in place, Al Humaidi spoke passionately about the need for a smart approach to a potentially divisive subject.
“I think in a country like Qatar with a small population, with an expanding economy with demand for manpower, we need to go for strategic Qatarisation. Qatarisation where it matters. Qatarisation in the decision-making areas. Qatarisation in the informationsensitive areas. Qatarisation that will sustain continuity…so we do not waste the very small human resources we have.” – Ali Al Humaidi, managing director, Almaras Consultancy.
then and now Qataris in the workforce 2010
71,076 2013
96,224
Qatar is booming In 2011, the Qatari economy continued to grow, and while oil and gas remained the main contributor to the nation’s growth, construction was one of the sectors fuelling the economy. In 2010 to 2011, the State budget allocated 36.9 percent to capital projects at a value of QAR43.5 billion, much of it going to infrastructure development. While many of these infrastructure projects were already planned, the awarding of the 2022 World Cup accelerated timelines, creating a flurry of tenders for projects, according to Tony Saadie, executive general manager, Qatar, of Al Habtoor Leighton Group.
then and now Hydrocarbon contribution to Qatar’s GDP 2011
59.3%
2014-2015
54.4%
The Arab Spring The Arab Spring was perhaps the defining story of 2011, with protests spreading across much of the Middle East and North Africa. In our special cover story in the March edition, we looked at the economic impact of the protests on Egypt, as stores shuttered and the tourism industry of the nation was severely impacted, which it is still struggling to recover from. The Edge ’s August/September 2011 issue revisited the Arab revolution, predicting that the saga was nowhere close to the end. In fact, in many ways, it was only the beginning. At the time of writing, the ongoing turmoil in Syria had claimed 1300 lives.
Since February 2011 the entire MENA region has been gripped by the Arab Spring protests and revolutions. Three years on the story continues with no real end in sight. (Photo by Mario Tama/Getty Images)
IN THE SPOTLIGHT
IN THE SPOTLIGHT
SPEcIAl cOVER StORY
MISSION QATAR:
DIVERSIFY
AND PROSPER
The International Monetary Fund disclosed that Qatar is on track to be the best performer in the region, and its gross domestic product growth is sustainable on the back of an expansion in hydrocarbon production and an increase in investments. But are Qatar’s diversification aims beyond reliance on oil and gas, as per the National Vision 2030, going to light up the country’s future? So far, so good, reports Edward Jameson
F
or almost a decade now, the share in Qatar’s gross domestic product occupied by the hydrocarbon sectors has been, on average, 57 percent.” This statistic, published last year by global thinktank, GLG Research, opened a window onto the historical reliance of Qatar on its hydrocarbon export industry. Being able to boast the world’s third largest natural gas reserves, behind only Russia and Iran, is the economic blessing that has in recent years seen Qatar punch far above its weight on the global stage and has, ultimately, allowed the Emirate to accrue the funds necessary to secure the rights to host sport’s most lucrative global tournament – the FIFA World Cup, in 2022. But such fortune brings with it a challenge that will reach across generations of Qataris. In order to maintain the position that the country has assumed in recent years, the state must look beyond the hydrocarbon boom, particularly in light of the planet’s need to shift towards a global energy policy based more on renewable sources, and less on fossil fuels. This means a mass programme of economic diversification for Qatar, which is already well underway, along with other Gulf countries that find themselves in a similar position. Qatar has a brief moment in time – a golden opportunity – to diversify its economy over the next 20 years away from hydrocarbons. But what does this really mean for the state over the coming decades? Such a programme entails an enforced paradigm shift on a number of levels. It must start at the beginning, with education, and predict what will follow, while maintaining the foundations on which the future will be built. A THREE PRONGED APPROACH Qatar is pursuing a three-pronged approach in its long-term quest to secure a prosperous economic future, as spelt out in its National Vision 2030. These are: • A knowledge-based economy characterised by innovation, entrepreneurship, and excellence in education, • The expansion of industries and services with competitive advantages derived from hydrocarbon industries, • The design and development of economic activities in which Qatar can specialise, including the technical and human requirements of these activities.
STRAND ONE: GRASSROOTS EDUCATION Over the past decade, Qatar has made its diversification intentions clear with the commissioning of a mega-project that constitutes the ‘grassroots’ of its long-term strategy, and provides the foundations on which the first strand of its strategy – a knowledge-based economy – must be built: Education City. The sprawling 14-square-kilometre campus already houses a number of progressive organisations and research centres, alongside internationally renowned establishments including Georgetown University, Carnegie Mellon University and HEC Paris, to name but a few. The Qatar Foundation for Education, Science and Community Development (QF) is the driving force behind the mega-project. The magnitude of the task before the foundation, which formed in 1995, is immense. In 2008, the World Bank published a report entitled The road not travelled: Education reform in the Middle East and North Africa, which said:
The presence of world-renowned tertiary education institutions, such as Carnegie Mellon, in Doha’s Education City complex are at the very heart of Qatar’s vision to shift the country from one that is dependent on hydrocarbons, to one that is being rebuilt on the strength of a ‘knowledge-based’ economy.
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Focus on Diversification The diversification of Qatar’s economy away from hydrocarbons is a critical issue that The Edge has covered periodically. In a special cover story written by Edward Jameson, The Edge explored Qatar’s long-term quest to secure a prosperous economic future. The first is creating a knowledge-based economy that is characterised by innovation, entrepreneurship, and excellence in education.
“A new framework for regional and international engagement is urgently required that addresses the likelihood of renewed violence as elite factions reposition. Beyond that, the international community would be wise to prepare for several cycles of transition in coming years.” – Ginny Hill, Middle East and North Africa programme associate fellow at United Kingdom (UK)-based thinktank, Chatham House, commenting on the Arab Spring in mid 2011.
2012
then and now
QIA ESTIMATED Assets Under Management 2010
QAR291 billion 2013
QAR619 billion
The Qatar funded The Shard tower in London was inaugurated in a spectacular laser show in the British capital in July 2012. The 310-metre high tower is owned by London Bridge Quarter of which Qatar is the majority shareholder. (Image Getty)
Five Years of The Edge: 2012 highlights Qatar’s Entrepreneurial Ecosystem The cover story in our March issue contained the first of The Edge ’s now-annual focus on the opportunities and challenges faced by the growing small and medium enterprise (SME) sector in Qatar and looked at the facilities and services available for ‘start-ups’. We examined the SME marketplace and met with, among others, Shareefa Fadhel, cofounder and managing director of Roudha, and Ayesha Al Mudehki, who also cofounded Roudha and is executive director of Injaz Qatar. The two Qatari women are committed to developing SMEs for local women.
Once there is a comfortable environment for females to come out and start their business in respect to our culture, I will be satisfied.” - Ayesha Al Mudehki, executive director of Injaz Qatar.
Aysha Al Mudehki, executive director of Injaz Qatar talked about the importance of promoting a sense of entrepreneurial social responsibility among local schoolkids.
then and now Ease of starting a business ranking by World Bank
An Interview with Abdul Hakeem Mostafawi Another highlight from the same issue includes an interview with Abdul Hakeem Mostafawi, CEO for HSBC Qatar who became the first ever-Qatari head of an international institution. “I think the significance to it is that it is always good to have somebody from a country that understands the local culture well,” Mostafawi explained. “Someone who understands the sensitivities and needs and wants of the community.”
2009
57th 2014
112th Generation Y The Edge ’s May 2012 cover story looked at ‘Generation Y’ and how it is integrating with ‘Generation X’ and the ‘Baby Boomers’ in the workplace. “For the first time in history, organisations are confronted with three generations working alongside each other,” wrote Deborah Rogers. Later in the article she continued, “Generation Y are the future of our organisation and here to stay. They are flexible, adaptable, excellent team players and value helping others and place a high emphasis on relationships in the workplace. They are also outspoken, take risks, are technologically advanced and learn by doing, not listening or being lectured to.”
Business interview
Business interview
A GLOBAL VISION AN EXCLUSIVE INTERVIEW WITH AbdUL HAkEEm moSTAfAWI, CEo of HSbC QATAR
As the first Qatari head of an international banking institution in Qatar, Abdul Hakeem Mostafawi has become one of the most high profile bankers in Doha since his appointment as the CEO of HSBC more than three years ago. TheEDGE sat down with Mostafawi recently to discuss what motivated his rise to the top echelons of local banking, and to obtain his insight and perspective on where the banking business is going in the country and Qatar’s overall economic environment as whole.
S
ipping a cup of coffee he made himself from a small machine in his Doha office, Abdul Hakeem Mostafawi reveals he always wanted to work for an international bank. Following his graduation from the University of Arizona in the United States, where he earned a Bachelor of Science in business administration major, and a minor in marketing, he joined HSBC in their internship programme in their Hong Kong office in 1989. His career development, says Mostafawi, has always been orientated towards passion, commitment, hard work and the rewards that would inevitably follow. And as an international institution he felt HSBC would be the ideal environment, in which he could learn the banking profession from different colleagues from around the world. His tenure in Hong Kong, Mostafawi adds, was also a great experience and preparation for his subsequent positions, as it was a highly dynamic business atmosphere – much like Qatar is today. “The timing was good,” Mostafawi elaborates, “because there was this process that was happening politically, but at the same time you are where the environment was very vibrant. For me as a Qatari being there was a great experience.” Businesswise, Mostafawi feels the buzz of Hong Kong in the late 1980s has much in common with Qatar in 2012, although with obvious exceptions. “It is different because this area is resources, oil and gas orientated, whereas that area is export and services driven,” he says. “But the similarity is in a sense that there is a boom. Rapid growth that was happening there, and now here, the people and the kind of sentiment.” After a year in Hong Kong and a short stint in London, Mostafawi returned to Qatar to be closer to his family and further his career by contributing to HSBC’s operations here and the development of the country as whole.
He worked his way through the organisation, starting out in retail banking, becoming a successful branch manager in Al Rayyan and at a new branch in Al Sadd. Mostafawi then managed the trade services department of HSBC, which was largely associated with projects and trade, and moved on to become the head of “wholesale banking”, covering both corporate and investment banking, before becoming chief executive officer (CEO) in October 2008. LOCAL KNOWLEDGE As the first Qatari head of an international bank in Doha, Mostafawi agrees he has perhaps been somewhat overhyped, as there are in effect only two such institutions operating on a large scale and in retail banking in the country. Nevertheless Mostafawi humbly acknowledges the importance of his posting for HSBC – which has been present in Qatar since 1954 – and the local banking sector. “I think the significance to it is that it is always good to have somebody from a country that understands the local culture well,” Mostafawi expands. “Someone who understands the sensitivities and needs and wants of the community. For example, I have a global exposure by being part of this organisation and at the same time a Qatari like myself can understand what the needs of my country are. I am in the middle of that and I can articulate that. And we do that very well, for example, we have seen over the past six or seven years that Qataris and Qatari businesses are increasingly becoming global and investing beyond Qatar. “We are a strong emerging market bank and this is one of the areas that the Qataris have interest in,” continues Mostafawi. “China, India, Malaysia, Indonesia and even some of the developed markets where we have strong connectivity, like France and England. And we help our clients that way. So me being a Qatari helps in a better understanding of our client needs.” theeDGe
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Water Opportunity In the July 2012 issue, Barry Mansfield explored the steps Doha is taking in tackling Qatar’s future water management issues. “By Q3 2011, the Qatar Electricity and Water Company had reached a water desalination capacity of 265 million gallons per day,” Mansfield reported. “Qatar still plans to invest heavily in further desalination facilities, with around USD16.8 billion (QAR61 billion) in total slated for power and water supply schemes.” Leading Qatar’s Energy Quest Sticking with the sustainability theme in the October issue, The Edge spoke to Dr. Rabi Mohtar, Qatar Environment and Energy Research Institute, and discussed the challenges ahead for creating a more environmentally responsible future in Qatar. “My projection, especially with the Arab world, is that we are heading for a head-on crash,” said Dr. Mohtar, “and it is not only about water security. It is about economic meltdown…most of our water, over 75 percent, goes into food production and yet we don’t have enough water to meet our own needs, and on top of that, our water use is not efficient.”
FEATURE STORY
FEATURE STORY
WATER
OPPORTUNITY
W
ith an average of around 80 millimetres a year, Qatar has one of the world’s lowest levels of rainfall. The Qatar National Development Strategy (QNDS) has admitted that the three key water sources on which Qatar depends – desalination, groundwater and recycled water – are under stress. Qatar’s natural evaporation rate of 2000 millimetres puts it into a water deficit, while consumption and network leakage rates are staggeringly high. Per capita water use is one of the highest in the world, estimated at an average of 460 litres per day, according to the Permanent Committee on Water Resources. Though the Qatari government openly acknowledges the urgency of tackling water stress, a network of privately-owned enterprises, spanning multinationals to family-run start-ups, to lone entrepreneurs, is also looking to apply its talents and expertise to address the challenge this reality brings to the country. MASSIVE INVESTMENT Although by Q3 2011 the Qatar Electricity and Water Company had reached a water desalination capacity of 265 million gallons per day, Qatar still plans to invest heavily in further desalination facilities, with around US$16.8 billion (QR61 billion) in total slated for power and water supply schemes. According to Commercialbank Capital, Qatar’s likely spend in coming years for the water sector alone is US$6.9 billion (QR25 billion) and most recently as last year, three projects were awarded with a total value of US$362 million (QR1.3 billion). There is no shortage of funds to spend, it seems, since the Qatar National Vision
HOW QATAR IS TACKLING ITS FRESH WATER CHALLENGES As a small peninsula in one of the most dry and arid regions in the world, it is no secret that Qatar faces incredible challenges in securing fresh water for private and industrial usage. With consumption set to increase exponential in the coming decade, Barry Mansfield looks at what steps Doha is taking as well as the role of private business in tackling Qatar’s future water management issues.
for 2030 identifies water stress as severely impacting on food security. Accordingly, Qatar has commissioned the US$3.9 (QR14 billion) Ras Girtas plant at Ras Laffan, which will produce 286,404 cubic metres (m3) per day of desalinated water. Qatar water and electricity utility Kahramaa has invested in water storage construction activity, undertaking a US$2.8 (QR11 billion) reservoir project capable of holding seven days’ worth of fresh water as a backup for desalinated water supply. The 1.9 billion gallon facility will include a network of reservoirs connected by a 183 kilometre, 2.5 metre wide pipeline linking the Ras Laffan desalination facility in Qatar’s north and the Ras Abu Fontas plant in the south. PROBLEMS AND CHALLENGES Despite all these grand projects, problems remain and it has been felt that even these massive investments are a short-term fix. This is because in Qatar the absence of permanent surface water means that agriculture is almost entirely dependent on irrigation from pumped groundwater. It is estimated that Qatar’s aquifers will be depleted in 20 to 30 years at recent rates of withdrawal. International watchdog, the United Nations Environmental Programme (UNEP) has predicted that with increasing urban and rural development, groundwater pollution (by nitrates) is a probability. Analyst Dr. Charlie Beldon of United Kingdom (UK) risk assessment firm Maplecroft has emphasised the need for “a cohesive policy for water that involves all stakeholders and considers all sectors.” Thankfully, there are signs that the Doha government is beginning to prepare the groundwork for such a policy. For example, Qatar’s Ministry of Environment and the
A network of privately owned enterprises is looking to apply expertise to address the challenge of providing adequate fresh water that Qatar faces. TheEDGE
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then and now Qatar water production 2009
312.4 million cubic metres
Testing the Sun The final issue of 2012 continued with the sustainability debate, exploring the latest Solar Test Facility at Qatar Science and Technology Park, which is a joint venture between Chevron and Qatari renewable energy company The Edge spoke Greengulf. exclusively to Carl Atallah, president of Chevron Qatar Limited, who said, “Solar energy may prove to be a significant contributor to the energy mix in the future.” Atallah explained to The Edge that before investing in solar, the efficiencies of it in such harsh conditions must be accurately assessed. FEATURE STORY
FEATURE STORY
TESTING THE
SUN QATAR OPENS FIRST SOLAR POWER TECHNOLOGY TESTING FACILITY AT QSTP
2014
437.1 million
As part of Qatar’s ongoing drive towards energy efficiency, in early December 2012 international energy firm Chevron and Qatari renewable energy company GreenGulf will inaugurate their Solar Test Facility, a long-awaited joint venture to test and evaluate current and emerging solar technologies at the Qatar Science and Technology Park. TheEDGE spoke exclusively to Carl Atallah, president of Chevron Qatar Limited, about how the facility came to be, what it hopes to achieve, and how it might contribute to this small but sun washed Gulf state’s potential to become a future hub for solar energy production and industry.
T
he process that led to the inception of this facility, Carl Atallah reveals, began when Chevron signed an agreement with local authorities to locate its Centre for Sustainable Energy Efficiency (CSEE) at the Qatar Science and Technology Park (QSTP) in Doha in early 2009. “HE Abdullah bin Hamad Al Attiyah was instrumental in Chevron establishing the CSEE with the support of Qatar energy minister, HE Dr. Mohammed bin Saleh Al Sada, who inaugurated the centre when it officially opened in 2011,” says Atallah. Focusing on showing to students, professional and officials how energy is consumed and how it can be done efficiently, the raison d’etre of the centre, explains Atallah, was a combination of motivation from these ministers, and all involved in the Qatari energy sector, realising that much energy is wasted in the production and generation of power from hydrocarbons. It was also down to the fact, he says, that “at Chevron we believe that energy efficiency is the most readily available and cheapest form of energy for both energy importing and exporting countries alike.” Atallah explains that more than two decades ago Chevron embarked on an internal audit to transform how energy was utilised within their own facilities. “We began to make changes in our own operations around the world, and that has resulted in a reduction of energy
consumption of more than 30 percent,” he tells TheEDGE. “At the same time the company doubled in size, so it is a huge impact in terms of energy consumption… about US$7 billion (QR26 billion) a year savings for Chevron globally. That is a huge economic benefit, but it is also a huge impact on cutting our own carbon footprint.” AN UNTAPPED RESOURCE In regions well endowed with hydrocarbon resources such the Middle East, this cost saving approach to energy efficiency has not been a priority, says Atallah. However, the awareness that these resources are finite – and that production and consumption of energy can be achieved more energy efficiently and environmentally friendlier – prompted the Qatari authorities to pursue ways to improve the situation. One such avenue eventually led to the formation of the CSEE, and ultimately the Solar Test Facility. In 2009, Qatari GreenGulf CEO Omran Al Kuwari had pitched the idea of establishing a solar test facility at QSTP. In March 2009, the project was announced under the patronage of HH Sheikha Moza bint Nasser, chairperson of Qatar Foundation. In that same year, GreenGulf’s Corporate Research Agreement with QSTP was signed to move the project forward. With the support and guidance of QSTP, GreenGulf and Chevron agreed to develop the Solar Test Facility jointly and in 2010, both entities signed a Joint Study Agreement to develop
and operate the QSTP Solar Test Facility. “Since we started this project, the National Vision from HH the Emir Sheikh Hamad bin Khalifa Al Thani has provided a platform for a discussion in renewable energy, because of his vision to make Qatar more sustainable,” says Atallah. “On the consumption side, cutting wasteful consumption of energy, in other words improving energy efficiency, is one important factor. On the energy generation side, Qatar receives some of the highest solar radiation in the world, so solar energy may prove to be a significant contributor to the energy mix in the future.” But before investing in solar, explains Atallah, the technologies used to generate this form of energy in the Middle East must be accurately assessed. “How efficient is generating solar power under the harsh climatic conditions present in this region? is a question that must be answered,” he says. Only the new facility can achieve this. It will be included among a small number of similar projects, all of which are in the United States (US), where Chevron has three sister sites in different environments: two in California and one in New Mexico. Set to become Chevron’s most comprehensive, the Doha Solar Test Facility will become a pivotal phase in the development and construction of solar power technology in the region, especially in determining which of these can withstand the rigours of exposure to the heat, humidity and dust common in the Arabian Gulf. TheEDGE
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cubic metres
City of Light Towards the end of the year, Barry Mansfield took a look at the Lusail project, which was gaining momentum at the time. Mansfield reported that infrastructure construction totalling USD7.4 billion (QAR30 billion) would finish by late 2015.
QAR164 billion
Estimated cost of Lusail City project in 2012.
Lusail City, Qatar’s largest and most ambition construction development, is scheduled to be fully completed in 2019 at the earliest. If it can overcome its challenges and come to fruition in time, Lusail City will boast among the most sophisticated and aesthetically pleasing urban environments on earth. (Rendering courtesy Lusail City)
2013
In late June of 2013, HH the Emir Father Sheikh Hamad bin Khalifa Al Thani handed power to his 33-year-old-son and Heir Apparent, HH the Emir Sheikh Tamim bin Hamad Al Thani. (Image Reuters)
Five Years of The Edge: 2013 highlights Liberalising Qatar’s Financial Sector Reporting from the first Euromoney Conference to be held in Doha, Shehan Mashood looked at Qatar’s financial sector and explained the new law, which brought various regulatory authorities under a
then and now Qatar banking sector assets
single umbrella organisation. “A new law mandating the Qatar Central Bank as ‘supreme regulator’ is an attempt to advance the legal financial framework within the country by increasing cooperation between the regulatory bodies, and has been welcomed by all.” Qatar’s Labour Challenge In the same issue, Erika Widen looked at the heated debate surrounding migrant workers’ rights in Qatar. She spoke with Sharon Burrow, general secretary of the International Trade Union Confederation who commented, “If Qatar wants to be respected in the global community and host international events, they must ensure that migrant workers have rights.” In 2014, some inroads were made in April when plans were revealed by the Qatari government to abolish the sponsorship system. However, no timeline was given as to when these changes will be implemented.
Affecting Emissions Moving onto environment and sustainability issues, Jamie Stewart in the same issue reported from the United Nations (UN) Climate Change Conference, COP18, which was held in Doha. Stewart pointed out that Qatar is the world’s highest per capita emitter of greenhouse gases and questioned how it can potentially offset this.
Qatar’s ex-deputy prime minister Abdullah bin Hamad Al Attiyah chaired COP 18 in Doha in December 2012. (Getty Images)
2009
qar470 billion 2013
qar910 billion
Hundreds of people marched up the Corniche in a coordinated public demonstration on the sidelines of the COP 18 UN Climate Change Conference held in Doha in December 2012, a first for the country. Motivated by the International Trade Union Confederation, a contingent joined in the march to protest Qatar’s migrant labour human rights standards, which were cast negatively in a June 2012 report by Human Rights Watch, a US-based non-governmental organisation. (Image Omar Chatriwala)
At What Cost? In the cover story of Issue 43, Mayssa Nehlawi highlighted Qatar’s shocking statistic of having the highest global rate of road accident fatalities, quoting a study by Qatar University, the Qatar Traffic Department and the Qatar Statistics Authority. President of Ashghal, engineer Nasser Ali Al Mawlawi, said of the National Traffic Strategy 20132022, “Our aim is to reduce the death rate due to traffic accidents to 130 from the present number of 220 and cases of serious injuries to the rate of 300 compared to the present rate of 550 injuries per year.”
QAR73 billion
Cost of Ashghal Expressways estimated in 2013
Connecting Arabs to the World In the same issue, Shehan Mashood met with Ahmed Mekky, the founder and CEO of Gulf Bridge International, based at the Qatar Science and Technology Park to learn more about their subsea cable network that will link the Gulf to the rest of the world, creating more capacity and resiliency in the region’s Internet infrastructure.
Workers look on as the GBI ship, Responder lays sub seacables leading out from Fujairah beach in the United Arab Emirates.
Beyond Bricks and Mortar In Issue 47, Shehan Mashood explored Qatar’s e-commerce market, which was worth USD600 million (QAR2.2 billion) in 2012, a figure that by 2015 is expected to reach USD1.1 billion (QAR4 billion) and asked if the Qatari market is sophisticated enough to support this rapid growth.
Beyond Bricks
& Mortar
Can Qatar really become the ‘Silicon Valley’ of the Middle East?
““There is so much opportunity in Qatar, either because something has not been done or it has not been done well.” – Khalifa Saleh Al Haroon, entrepreneur and CEO of iloveqatar.net
then and now Qatar’s Gateway to Industry Later in 2013, The Edge took a trip back to the to Qatar Science and Technology Park to meet with its managing director, Hamad Al Kuwari, who highlighted their journey so far. He stated, “In these four-plus years, we have been able to define a culture that befits a science park. Today, having 42 companies is a testament to the work we have done convincing people to come undertake technological development in Qatar and the value they have gotten from it.”
qATAR Household Internet connection speeds with 4mbps and above 2010
39% 2013
48%
Five Years of The Edge: 2014 highlights The Future is Downstream The downstream sector is key to “While the global LNG market is sustaining energy sector growth set to shift in favour of buyers, in Qatar, wrote Jamie Stewart in Qatar is pursuing a strategy of January’s issue (Issue 51). The downstream diversification in an article focused on Qatar’s standing attempt to establish itself as the on the global market within the world’s pre-eminent chemicals and downstream sector. Stewart wrote, petrochemicals hub.”
then and now Qatar natural gas production 2009
86 million cubic feet per day 2014
15.3 million cubic feet per day
Great Power, Greater Responsibility The Edge in June 2014, touched once again on issues of migrant labour rights in Qatar, exploring reactions to the Qatar government’s recent announcement on proposed labour reforms. “While the international media remains skeptical, and particularly volatile since the May announcements, residents of Qatar are generally reluctant to express opinions about the ongoing issue of migrant workers – an observation evident by the fact that while The Edge approached 20-plus construction companies, only two responded with comments,” wrote Farwa Zahra.
Qatar the new talent realities Moving onto the March issue of The Edge, David Jones and Radhika Punshi of The Talent Enterprise discuss talent acquisition and retention challenges which Qatar and the region face ahead of 2022 World Cup. “The IMF recently forecast that by 2020, the world as a whole would have more people over 65 than under 25 for the first time in recorded human history,” the article reported. “This will make securing key talent increasingly challenging, especially in preparation for an event that will likely last for just six weeks. Managing and predicting attrition risk will become key in order to ensure expatriates, in particular, are fully productive during key delivery milestones for Qatar.”
“The key is to gain the realisation of the worth of an individual as an individual and not merely as a resource.” - Christopher Newman, welfare manager, Health, Safety, Security and Environment Directorate, Qatar Foundation.
Q a t a r ’s B u s i n e s s M a g a z i n e
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from space
An interview with Ali Ahmed Al Kuwari, CEO of Es’hailSat, Qatar’s first satellite company
sector name business interview | banner | communications heading
Qatar-based satellite company, Es’hailSat was created in 2010 to meet the rising demand for telecoms and broadcast across the region as the population is expected to increase by as much as 30 percent by 2030. Ali Ahmed Al Kuwari, CEO of Es’hailSat tells The Edge that their aim is to provide satellitebased services to what will be a growing population with an increasing demand for communication in the coming years. by Shehan Mashood
Tell us a little about yourself, and where you worked before joining Es’hailSat? I was assistant secretary general for corporate services, which is more or less equivalent to a chief financial officer’s role, in addition to some other managerial roles before I joined the Ministry of Information and Communications Technology (ictQatar). As part of the national satellite committee, which was formed to follow up the satellite manufacturing process and to form the company (Es’hailSat), I was exposed to the satellite industry and accepted to take on the challenge of such a new industry in Qatar. You launched Es’hail 1 last year. Can you tell us about the customers you are serving? There are a variety of services and companies that the Es’hail 1 caters to such as TV, radio, trunking, telecoms and network services. This is one of the main advantages of Es’hail 1, in that it offers multi-application services, which will attract a wide and diverse customer base. Es’hail 1 is already almost completely sold out, with Al Jazeera taking a significant part of the capacity for high-definition versions of their premium sports and news channels. Other types of capacity are also leased out to Qatari stakeholders, but we 58 | The Edge
The Es’hail 1 launched last year was Qatar’s first satellite, jointly owned and operated by Eutelsat, a French satellite provider. It is seen here undergoing final antenna testing before deployment. (Image Flickr Space Systems Loral/Eutelsat)
are open for business to all customers: national and international. Also, we have a very close working relationship with beIN Sports and have signed long-term contracts with them. Both parties expect this relationship to continue in the very long term. Looking at the agreement reached with ArabSat before the launch of Es’hail 1, what was the biggest challenge and how has the agreement helped your company? The signing of a strategic partnership agreement was to promote closer cooperation between the two companies and strengthen the reach and penetration of the 26 degrees East hotspot neighbourhood for TV broadcasting. This agreement allows us to acquire some additional bandwidth that will enable us to operate Es’hail 2, which will be located in spot 26 East. This will ultimately help 26 East be in a better position. Under the terms of the agreement, Es’hailSat will acquire the rights to 500MHz of premium Ku-band bandwidth at the 26.0 East TV broadcasting hotspot. Es’hailSat’s second satellite, Es’hail 2, will use these frequencies and be designed to provide Direct-to-Home and other telecommunications services from the 26 degrees East hotspot. Furthermore, the arrangement between Es’hailSat and
“As well as procuring the satellite, to launch it ourselves we will need to build the satellite control centre at our dedicated site north of Doha.”
manufacturing sector sector name | business | bannerinterview heading
300 mbps
The data rate per transponder on the Es’hail 1
Arabsat will pave the way for enhanced operational flexibility and mutual in-orbit back up between the two satellite fleets.
“As well as procuring the satellite, the launch ourselves we will need to build the satellite control centre at our dedicated site north of Doha.”
When will the Es’hail 2 be launched? And what are your expansion plans for the long term? We recently released request for proposals for our second satellite Es’hail 2, and I expect to place a contract in the summer. As well as procuring the satellite, the launch and the launch insurance ourselves, we will need to build the satellite control centre at our dedicated site north of Doha. The satellite will be ‘flown’ from there by our own staff, and the same facility will also be used to transmit television channels and other traffic to the satellite, again managed by our own staff. This is a key part of our vision: to provide a secure, independent satellite system to meet the needs of Qatari stakeholders and others well into the future. Es’hail 2 will be another multi-mission satellite. The headline service is a further 24 Ku-band transponders for TV broadcasting with the high level of security that we already provide on Es’hail 1. There are also payloads for government communications, and an amateur satellite payload – the first time the amateur radio community will ever have had a payload dedicated to them on a geostationary satellite – that will enable direct connections from Brazil to India and from Norway to South Africa. Is the goal to become a profitable business or serve the long-term strategic interests of Qatar? The Qatar Satellite Company has to go through two phases - to fulfill the strategic objectives of the State of Qatar and secondly, to grow commercially.
Ali Ahmed Al Kuwari, CEO of Es’hailSat tells The Edge that a key part of Es’hailSat’s vision is to provide a secure, independent satellite system to meet the needs of Qatari stakeholders and others well into the future.
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sector name business interview | banner | communications heading
“It is a competitive picture, but that is how it is in every region of the world, no satellite operator ‘owns’ a market by virtue of their geographical location.” Can you talk to us about the directto-home market? What is the demand and competition like in the region? Is there room for another player such as Es’hailSat? We continue to see robust growth both in demand and in supply to fulfill that demand, which is a picture you will find in many parts of the world. Es’hailSat was formed with the goal of providing independent and high quality services. That is how we will stay competitive - by providing the highest quality of services at the best market price. Competition is good. There are four companies in the Middle East that own and operate satellites - Es’hailSat, Arabsat,
Nilesat and Yahsat. Then there are other satellite operators based elsewhere in the world whose satellites also cover the Middle East including Intelsat in Washington, SES in Luxembourg, Eutelsat in Paris and other smaller ones. It is a competitive picture but that is how it is in every region of the world. No satellite operator ‘owns’ a market by virtue of their geographical location. How has fast fibre to home (FFTH) impacted the DTH market for satellite companies? FFTH is clearly an alternative to satellite broadcast. However, that choice is not open to every consumer in Middle East and North Africa (MENA), and that situation
ES’HAIL 1 COVERAGE The Ka-band coverage
The Es’hail 1 is equipped with the ability to broadcast on the newer Ka-band frequency which has a broader spectrum allowing for greater volumes of traffic to be transferred. Over the coming decade, demand for Ka-band capacity is expected to increase significantly in regions such as the Middle East and Africa.
60 | The Edge
Ali Ahmed Al Kuwari, CEO of Es’hailSat tells The Edge that Es’hailSat may look outside the MENA region in the future as it seeks to build a sustainable company.
will take a long time to change. Also there is the fundamental advantage of satellite broadcast that can reach the whole audience in the MENA with a huge selection of channels in the latest formats such as HDTV. There are high installation costs for FFTH to reach high customer penetration levels, whereas satellite can address virtually 100 percent of the audience from launch. For the foreseeable future, there is probably a role for FFTH alongside satellite broadcasting. Tell us about the Ka-band that the Es’hail 1 is able to broadcast on. Is this where you see the potential for growth? Es’hail 1 provides advanced Ka-band capacity, with up to 300mbps data rate per transponder, allowing for solutions in both broadband and trunking. With beams covering Qatar and the surrounding area, a MENA beam and a steerable beam that can be located anywhere on the visible earth from the 25.5 East orbital position, a two-way trunking link can quickly be established from such distant locations as London, Moscow, Madagascar, Rio de Janeiro, Kabul, Mumbai, Johannesburg, Reykjavik, and even China.
sector name | banner heading
You mentioned the possibility of an Es’hail 3. Is there a demand for capacity that you are filling in the market? We will be bringing more capacity on Es’hail 1 online over the coming months and we are procuring Es’hail 2. In parallel, we have already started the early preparatory work on Es’hail 3, talking to customers and other stakeholders to understand their requirements so that we can provide them with what they need. Realistically, I expect to place an order for a third satellite no earlier than 2016. How do you see Es’hailSat contributing to the future economy of Qatar? Es’hailSat is here for the long term. We are part of the State of Qatar’s vision to invest in infrastructure. Today, Qatar is investing heavily to diversify itself. The ICT sector is led by ictQatar as the regulator, and it has established different operators to enable the ICT sector and to promote its agenda, which in the end will meet the objectives of the Qatar Vision 2030. The country’s ICT sector mainly comprises Qatar Satellite (Es’hailSat), Qatar National Broadband, as well as the telecom operators. Five years ago, there was only one operator, but today there are several, which is a testament to Qatar’s desire to open the market and promote diversification of the economy. Diversification is a very important point, and it needs to be considered seriously, and every country needs to have such a backup plan to have resources to run the economy. Are there plans to deploy satellites to service areas outside of the Middle East? Initially we have concentrated our attention on our strategic objectives, which are focused on the MENA region. As we continue to build a sustainable company, we are addressing our commercial objectives, which may open opportunities outside of MENA. We continuously look at opportunities both within and outside of MENA in order to make informative decisions for our next investment. It should be noted that our national stakeholders and local companies have already invested internationally and, where feasible, we will endeavour to provide the satellite communications infrastructure they require.
The Ariane 5 ECA launcher rocket takes off from Europe’s Spaceport in Kourou, French Guiana on Thursday, August 29, 2013, carrying on board the Es’hail 1. (Image Flickr ESA-CNES-ARIANESPACE/Eutelsat)
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business management | human resources
Qatar-Brazil 2014 year of culture logo at the Qatar International Food Festival held recently at the Museum of Islamic Art park in Qatar.
2014 QatarBrazil year of culture: Precursor to broader business relations? Qatar and Brazil share a vibrant trade relationship with the total trade volume crossing the USD1 billion (QAR3.86 billion) mark for the first time in 2012, though there are at present no long-term energy contracts between the two countries. The Edge investigates whether year-long cooperative initiatives in the fields of art and culture could help in deepening the business relations between nations. Or do they serve a cosmetic purpose of bringing two culturally diverse and distant nations closer by fostering greater cultural empathy with no real business or political significance? by Aparajita Mukherjee
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feature story || bilateral bilateralrelations relations
T
adeu Valadares, ambassador of Brazil to Qatar, tells The Edge, that the business dimension between two countries is one of the most important elements of modern contemporary diplomatic strategies. “For us Brazilians, it was a very significant moment when in 2013 we were invited to be Qatar’s partners in the 2014 year of culture. We felt that this is an important opportunity for us to showcase here in Doha some aspects of the Brazilian culture and, at the same time, to take to Brazil elements of Qatari culture.” Valadares adds that Brazil recognises the fact that the main initiative of the cultural year has been taken by the Qatari side. But, will it mean a deepening
Tadeu Valadares, ambassador of Brazil to Qatar stresses that the Qatari side has been very active in the context of the year of culture between the two countries.
64 | The Edge
QAR
3.86 billion
Total trade volume between Qatar and Brazil in 2012.
of business and trade relations between Qatar and Brazil? Valadares points out that in 2012, the bilateral trade figure surpassed USD1.06 billion (QAR3.86 billion) for the first time. This growth, in his opinion, was a result of the increase of the import of natural gas by Brazil. “It was the first time since 1993 that the balance of trade was in favour of Qatar. Generally, Brazil exports more than it imports,” he says, “Brazil is more or less the 20th most important destination for Qatari exports.” Commenting on the diplomacy between Qatar and Brazil, Valadares says, “In terms of the diplomatic political relations, we have a perfect dialogue and many convergences, sharing important goals.” For Rashed Al Qurese, director of marketing and promotion at Qatar Tourism Authority (QTA), a ‘year of culture’ is more of a concept that deepens the understanding between people and their respective cultures. According to him, “In addition to being a year of culture, 2014 will deepen the ties between Brazil and Qatar being host nations for the FIFA World Cup, some years apart – Brazil in 2014 and Qatar in 2022.” Safiya Al Hajiri, director of the office of strategic cultural relations, Qatar Museums (QM) feels that the Qatar-Brazil 2014 year of culture is merely an extension of the strong diplomatic and business ties between Qatar and Brazil. Al Hajiri adds that cultural activities between individuals and institutions in Qatar and Brazil serve the purpose of building bridges because “we believe culture is one of the most powerful tools for creating mutual understanding, which includes the arts, sports, literature”.
Safiya Al Hajiri, director of the office of strategic cultural relations, Qatar Museums feels that the Qatar Brazil 2014 year of culture is an extension of the very strong diplomatic and business ties between the two nations.
“In terms of diplomatic relations, we have a perfect dialogue and many convergences, sharing important goals.” – Tadeu Valadares, ambassador of Brazil to Qatar.
bilateral relations | feature story
Brazil’s David Luiz (left) celebrates next to teammate Fred after scoring a goal during their 2014 World Cup round of 16 game at the Mineirao stadium in Belo Horizonte. There are likely many lessons Qatar could learn from Brazil’s hosting of the World Cup, with the Supreme Committee for 2022 sending observers to numerous matches.(Image Reuters/Arabian Eye)
Events and highlights
There are several categories of events planned throughout 2014 and Londonbased Crossway Foundation is a partner of QM and has been tasked with organising some of the events marking the year of culture. Talking exclusively with The Edge, Imogen Ware, managing director of Crossway Foundation, says, “We are involved in the Qatar Brazil 2014 year of culture through its hugely popular Create & Inspire initiative. This year’s competition is open to 16- to 25-year-old nationals and residents of Qatar.” Ware adds that 12 competition winners will have the opportunity to travel to Brazil in September 2014 to experience one of the most
colourful cultures in the world on the creative adventure of a lifetime. Commenting on the role that QM plays in the year-long events, Al Hajiri says, “A big part of our mission is to nurture artists in Qatar. As part of that, this year we have a photographic journey with the Qatar Photographic Society whereby two extremely talented photographers, Aref Al Ammari and Abdullah Al Tamimi have just returned from a 17-day journey around Brazil, capturing it in pictures. This is a photographic exchange expedition in partnership with the Ministry of Culture. Two Brazilian photographers, Pedro Varela and Carolina Ponte also came to Doha in April and an exhibition marking all of their
work was exhibited at Katara, last month, under the title ‘A Journey From The Amazon To The Desert’. Another highlight is The Pearl Exhibition, a QM event that details the history of pearling in the Gulf, the development of the pearling industry and the use of pearls in fashion. Al Hajiri adds that this exhibition has travelled as part of the year of culture for the past three years – first to Japan for Qatar – Japan 2012, then to the United Kingdom as part of Qatar – UK 2013, and now to Sao Paolo, this year for Qatar – Brazil 2014. Commenting on the role played by the QTA, Al Qurese says that the body plays a partnership role in supporting the cultural
Qatar and Brazil exports (in USD millions)
Rashed Al Qurese, director of marketing and promotion at Qatar Tourism Authority (QTA), a ‘year of culture’ is more of a concept that deepens the understanding between people and the respective cultures.
2008
294,333,564
144,396,663
2012
316,707,521
748,358,169 The Edge | 65
feature story | bilateral relations
“We believe culture is one of the most powerful tools for creating mutual understanding, which includes the arts, sports, literature.” – Safiya Al Hajiri, QM. year and activities organised by the public and private sectors. He adds, “In March 2014, QTA and Qatar Airways organised the Qatar International Food Festival,
which highlighted Brazilian cuisine as part of the offering to guests. Additionally, QTA supports QM in its cultural efforts related to the year, and lists all events related to the cultural year, on its OnQatar events diary website (onqatar.qa).” Valadares stresses that the underlying motive behind organising the cultural events – be it in art, photography, book exhibitions or movies – is that the two countries will be “closer to each other than they were at the beginning”. “From my viewpoint as a diplomat,” says Brazilian ambassador Valadares, “I think, the most important aspect of this whole exercise of the year of culture is its significance in the context of the present world that is so divided, so conflictive which found weightage in political scientist Samuel P. Huntington’s thesis about clash of civilizations. “A year of culture,” he adds, “brings to the fore modest efforts at the national level to bring two culturally diverse nations to a widening level of understanding, which may well be a precursor to greater political dialogue and deeper business relations.”
Imogen Ware, managing director of Crossway Foundation, says, “We are involved in the Qatar – Brazil 2014 year of culture through its hugely popular Create & Inspire initiative. This year’s competition is open to 16 to 25-year-old nationals and residents of Qatar.”
Kheit competition: Bridging the cultural divide Kheit is a new competition to celebrate the diplomatic ties between Qatar and Brazil, and develop a strong partnership between the two countries. This competition organised by the National Museum Qatar in partnership with Qatar Brazil 2014, Virginia Commonwealth University Qatar, and the Centro Universitário Belas Artes de São Paulo, aims to increase engagement between the people of both countries in the spirit of innovation, openness and learning in the field of fashion. The competition offered an opportunity for students from selected universities to research, create and interpret cultural heritage through art and design with the express purpose of bridging cultures, sharing knowledge and fostering a cultural exchange and dialogue between institutions and individuals in cultural, heritage, arts and design. According to Safiya Al Hajiri, director of the office of strategic cultural relations,
66 | The Edge
Qatar Museums and students from the selected universities of Brazil and Qatar researched women’s and men’s wear from each country. “Their research provided a strong narrative that reflected design criteria, philosophy, vision and values, and included moodboards as well as sketchbooks. This research was used as inspiration to design a final
Graffiti workshop with Alexandre Orion at Qatar.
piece that incorporated heritage styles of both countries in a contemporary manner. Ten final pieces were showcased in an exhibition to celebrate the cultural similarities and differences in fashion in Qatar in April and subsequently will be shown in Belas Artes in Brazil. One winner from each university will travel to the other country.”
Inside the minds of leading business figures
business insight Technology is being widely adopted to make organisations more competitive and agile in the marketplace > 68 In an exclusive interview with The Edge, Soubhi Chebib, general manager for Gulf Business Machines (GBM) Qatar, talks about trends and challenges in the IT industry.
Moving out of one’s comfort zone makes a more successful management accountant 70 Malcolm Furber, president of Chartered Institute of Management Accountants (CIMA) highlights to The Edge the key findings of their new report, Addressing the Employability Crisis: Reconnecting Education, Skills and Jobs.
The reasons for the disconnect between education and employability can be attributed to a lack of education, in the sense that the younger generation is not aware of what of the factors that make a new recruit a success in the function that he is being hired for, most often a result of the gap between the degree a student has received and the job he has been recruited for. Pictured are students at Qatar University, one main source of manpower supply to the local job market. (Image Corbis)
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business insight | technology
IT SOLUTIONS
Technology is making organisations more competitive and agile In an exclusive interview with The Edge, Soubhi Chebib, general manager for Gulf Business Machines (GBM) Qatar, talks about trends and challenges in the Information Technology industry. He also discusses how technology solutions provided by GBM are transforming business functions and changing the way companies interact with their customers.
Tell us about your role at GBM and your previous experience? I came to Doha in 2012 as general manager for GBM Qatar, with the aim of building a team known for its thought leadership. The goal at this office is to enable our clients to be leaders in their respective business sectors, and contribute to the development of IT in Qatar. Previously, I was in Dubai for 11 years as regional director for IBM Systems and Software. In addition to my work in Qatar and the United Arab Emirates, in my 30 years of professional IT experience, I have also worked in Canada, France, Kuwait and Bahrain in different management roles. I have been working in management with IBM and GBM for the last 20 years. In my opinion, good management is about sound judgement, delivery on commitments and agility to adapt to customer needs. I am blessed to work in a profession that I am passionate about. Can you tell us about the services GBM provides and the industries you work with? We operate across many industries. Our major customers are in banking, government, healthcare services, oil and gas, airlines as well as media and telecommunications. We also serve many other sectors, as IT is everywhere. We have a large portfolio of services supported by highly certified teams, and we continue to innovate based on market trends and our customers’ requirements. GBM recently launched a mobile app for its customers that allows them to open an incident, track the resolution of problems and even measure the quality of service. 68 | The Edge
How is IT transforming business functions? For a long time, the primary role of IT was to automate a function or a process to improve efficiency and customer service. Then, integration technology made it possible to connect different applications and systems within, and even across, organisation boundaries. Because of integration, systems can now speak with each other, providing more valuable services and improved productivity. Today, mobile technology is putting IT services in people’s hands, bringing them closer to their business and increasing efficiencies. Analytics are helping businesses understand customer needs, predicting future requirements and, in some cases, enabling profitability. Several technological advances – the Internet, interconnectivity, smart devices, smart computing, and big data – are allowing us to rethink existing systems and processes. Now, we can look at the bigger picture, with smarter solutions for government, utilities, building, traffic, banking, media, schools, healthcare and so many other sectors. The advanced capabilities of middleware software and computing systems allow business leaders to look at challenges more holistically, delivering far better experiences to end-users. Do you find companies in Qatar willing or interested in making that change? It depends on the priority of each organisation and its leadership. Without active leadership and commitment, this progress cannot happen. We are witnessing institutions adopt the latest technologies related to mobility; this has allowed
technology | business insight
“Mobile technology is putting IT services in people’s hands, bringing them closer to their business and increasing efficiencies.” Technology is also widely adopted to make organisations more competitive and agile in the marketplace. Are those companies in Qatar deploying big data generating actionable insight from data and seeing a return on their investment? Yes, many of our customers are focusing on big data. It is unlike the traditional business analytics approach because with big data, it is possible to collect, process and analyse structured and unstructured data within organisations and outside their boundaries. Organisations in Qatar are now looking to combine the strength of their internal data, with social media and other sources to gain intelligence that will assist them in growing their businesses. Soubhi Chebib, general manager of Gulf Business Machines Qatar, tells The Edge, “The advance capabilities of middleware software and computing systems allow business leaders to look at challenges more holistically, delivering far better experiences to end-users.”
them to acquire a higher level of efficiency and improved customer loyalty.
Where do you see the highest interest in technology to improve business functions and efficiency? We are working across various industries, and all of these sectors have different priorities in terms of technology deployments. However, we are seeing a growing interest in the areas of banking, public sector and sports.
What are some of the challenges you see in the market? The alignment between business architecture and information architecture, along with all supporting infrastructure, remains a challenge. What worked a year ago might not be the best approach today. Certainly, access to qualified skills and resources also remain a key challenge. As IT is part of the fabric of business, new challenges arise every day such as system integration, data quality, system availability, and business continuity despite disruptive events. All of these factors need to be addressed while improving the return on investment. Furthermore, it is crucial to ensure that the steps we are taking today do not create additional problems in the future.
Talk to us about the Internet of Things. What are the possibilities networked devices communicating with each other can offer a city such as Doha? The Internet of Things is a network of smart devices connected to the Internet. These devices contain embedded technology that interacts with systems to automate and optimise operations. When we have so many of these interconnected smart devices, the speed in which decisions are made, along with how they are made, changes. Doha can benefit from smart city and smart traffic programmes to optimise its resources, reduce bottlenecks and improve planning.
What is the major driving force in clients adopting technology? The driving force in adopting new technologies varies. In the public sector, the focus, typically, is to provide citizens with better services, improve government transparency, better security, modernising government services and improving efficiency. In other sectors, customers are looking at adopting new technologies to innovate new products and/or services, increase profitability, and improve security or customer service.
What does the role of a system integrator entail and what are some of the challenges you face in this space? The role of a system integrator is a complicated one. However, we have been playing this role for almost a quarter of a century. The challenges are big – bringing together multiple systems and subsystems, while ensuring that the all components function together and work seamlessly with existing legacy systems, is no easy feat. While many challenges are technical in nature, many others are management-related, especially when working across multiple organisations, in change control and management. The Edge | 69
business insight | management education
Employability
Moving out of one’s comfort zone makes a more successful management accountant Despite widespread unemployment and underemployment across the world, many employers cannot find people with the skills they need to grow their businesses and strengthen their local economies. Demand for the most talented individuals continues to increase as business becomes more complex. There is clearly a disconnect between education and the skills business needs. Speaking with The Edge, Malcolm Furber, president of the Chartered Institute of Management Accountants (CIMA) highlights the key findings of their new report Addressing the Employability Crisis: Reconnecting Education, Skills and Jobs. Tell us about yourself and your tenure at CIMA. I am a longstanding council member of the CIMA, with a career spanning over 40 years, of which I spent 31 years in big multinationals. I have worked as a marketing accountant for ICI’s agrochemical business in the AsiaPacific region, with responsibility for the evaluation of new business opportunities and the performance of its operations in that region. I moved to South Africa in 1980, initially to look after ICI’s subsidiary there but I was transferred permanently in 1984, and held various senior positions in finance, information technology and corporate planning. In 1992, I joined Afrox, a gases and welding products supplier, as senior financial manager for its major production and distribution sites, but left the company, in 2004, having been involved in the establishment of performance improvement and measurement programmes. Currently I run my own consulting business where I 70 | The Edge
play a major role in business improvement assignments for both the private and public sector which has included a twoyear SAP business intelligence project at the South African Revenue Services. What is the different in the job market today since you started your career? Over 20 years, I have realised that our qualifications cannot make us detached from the way businesses are run. One has to get out there, understand how the business works – from the technical details that may be handled by the engineers, to the marketing people, the bankers and IT. The walls between industry, heavy manufacturing and financial services no longer exist which were operational when I started my career, and this highlights how good one’s qualification is, how you can move from one industry to another, from one sector to another. Today, a management accountant is required to move out of one’s own comfort zone of pure accounting and
learn marketing speak, engineering speak, human resource speak, IT speak. He is expected to be a person who knows how everything fits together. What does CIMA do? And how does it select its research topics? CIMA is a professional body, currently spanning 177 countries, and has around 90,000 members and 130,000 students affiliated to it. The demographic is moving out of the United Kingdom (UK) where it was predominantly founded, outside into major growth areas such as Africa, South-East Asia, India and China. In 2011, CIMA entered into a joint venture with the American Institute of Certified Public Accountants (AICPA) to launch a global management accounting designation called the Chartered Global Management Accountant (CGMA) which has added 40,000 members to CIMA. One of the focus areas for CIMA in my presidential year was the emphasis on continuing professional development, life-long learning, because the moment
management education | business insight
“We need to understand the mindset of the younger generation and what they want out of a career.”
one does not heed what is going on in the marketplace, one goes out of date and that is professionally scary. So one has to keep up with new standards such as the US GAAP, IFRS, and local tax laws which give management accountants the tools to anticipate the bends in the road ahead for any company. The change in the finance function is moving in that direction with much of the regular financial accounting side functions now being done through technology, so that space is not only not growing, but in fact shrinking. Organisations want sound financial people who have links with a professional association or institute and are bound by a code of ethics, professional standards, well versed in regulations, which make them trust the people they hire. For instance, I had recent significant feedback from one of the big business schools in China to find out what the real issues out there in the marketplace were, and I think our research and our thought leadership publications are hitting all the right spots. As a consultant, I’m out in the market and can see what is happening – trends such as big data that is prevalent in a number of industries or real-time accounting which has cropped up literally in the last month or so, where companies are now saying they want to close their books and disclose their results within 12 hours of actually finalising the figures. What, in CIMA’s opinion, are the reasons for the disconnect between education and employability? It is lack of education, in the sense that the younger generation is not aware what factors make a new recruit a success in the function that he is being hired for. For example, in our profession of management accountants, there is a lack of understanding of what the finance function does; it typically gets labelled as a dull and boring profession and in my dialogues with my American counterpart, we talk about how to create the wow factor to attract the younger generation to accounting. At CIMA, we have produced some good research material at the moment about employability, the gap between academia and what business really needs, and what I am pleased to see here in this region is the fact that universities and business
Companies are looking for young leaders, they want leaders in their organisations a lot sooner, CIMA president Malcolm Furbertells The Edge.
schools are linking up with professional qualification bodies, so one does not just come out with a degree, but also with a professional qualification attached to that. What is the way forward in creating a better connect between education and employability? We need to understand the mindset of the younger generation and what they want out of a career. One of the things we have found is the fact that companies are looking for young leaders, they want leaders in their organisations a lot sooner than perhaps in my day. CIMA has done a lot of work into looking at the prospective hires and pushing that into the public knowledge domain as well. We also have a research project at the moment, the findings of which will be unveiled in Rome at the World Congress of Accountants in November 2014, on the future of learning and how people want to learn in the future. I think we have taken a major step forward recently in our new syllabus and our new qualification assessment methods, which are in sync with the current market realities. The Edge | 71
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automotive | product reviews
Reviews
Jaguar F-Type Coupé
T
he 2015 F-Type coupé is Jaguar’s follow-up to last year’s convertible version that had many critics raving and won the World Car Design of the Year award. Much of the lines from the striking F-Type are taken from the C-X16 concept Jaguar that debuted back in 2011 at the Frankfurt Motor Show. The two-seater, rear drive top of the range coupé is a five–litre V8 supercharged engine producing 489-brake horsepower, that does 0 to 100 kmph in 4.2 seconds, and a restricted top speed of 300
kilometres per hour. Recently released in Qatar, it is also available in a three litre supercharged V6 that does 0 to 100 kmph in 5.1 seconds and a top speed of 259 kmph. The range-topping coupé features a bespoke suspension set-up including a second-generation Electronic Active Differential, which redistributes engine torque between the rear wheels and – for the first time on a Jaguar – torque vectoring by braking, which applies precisely metered braking force to the inner wheels during cornering to enhance
agility. The Jaguar F-Type Coupé launch in Qatar follows a 28 percent jump in Jaguar sales recorded for Alfardan Premier Motors in the last fiscal year, according to a press statement. Prices for the F-Type start at QAR279,000. Speaking at the launch, general manager for Alfardan Premier Motors, Rabih Ataya said, “We have witnessed unprecedented sales growth over the last fiscal year and this is reflected in the strong interest we have received around the F-Type Coupé since its reveal at the Los Angeles Auto Show.” The Edge | 73
products & reviews
Read it:
The Rules of Management It is a problem to a lesser or greater degree worldwide. But work long enough in the Gulf and you will realise that there are major issues here when it comes to human resources, or more specifically, managers of people. Too often, unqualified, ill-prepared managers are put in such positions, either through long tenure and it being ‘their turn’, or due to their nationality, or simply to fill a vacancy as soon as possible. This results, oftentimes, in a dictatorial style of management – epitomised by the saying “it’s my way or the highway” or that other Gulf chestnut “if you don’t like it, leave” – causing low morale and poor productivity. Many think that being in a management position is about power, and make the lives of their staff intolerable by issuing unreasonable demands and decrees, or by exhibiting aggressive, rude and sometimes prejudicial behaviour. Bad managers take credit for the work of others, blame them when things go wrong, and are often cited as the main reason people are unhappy at work or leave their jobs. They also lack clear goals, and the means to achieve these are often absent under their flawed leadership. True managers, of course, realise their role is not to be ‘the boss’
and push people around, but to ensure that all staff have the tools and opportunities to do their jobs effectively, the ultimate goal being the reputation and profit margins of the company. This is where The Rules of Management comes in, and should perhaps be made mandatory reading for anyone who is placed in charge of others. Sage advice includes having confidence in one’s staff and not “micromanaging: ”Show them you trust them by backing off, leaving them alone to get on with the job.” Or being proactive, but admitting fallibility and taking responsibility: “Better to jump and make a mistake than to sit there too frightened to make a move.” These two nuggets are among the scores of valuable take-out for managers.
Available at Virgin Megastores in Doha.
Read it:
The Squeeze: Oil, Money & Greed in the 21st Century In The Squeeze: Oil Money & Greed in the 21st Century, author Tom Bower extracts a gripping story from interviews of industry professionals, and leads readers through a 30-year turbulent history of the oil industry leading to the price hike in 2008. Beside the recollections of 250 people interviewed for The Squeeze, Bower also relies on government regulators and companies’ reports, magazines, news reports and previously published works on the sector, creating a diligent work, which reads more like a fictional saga. 74 | The Edge
While the book builds upon an otherwise common idea of oil as one of the most politicised commodities, what gives Bower’s account an exclusive perspective is his investigative approach. With interviews from BP’s key figures such as the company’s former chief executive officer Lord Browne, the book features insider information about BP and its safety management leading to the Deepwater Horizon oil spill in the Gulf of Mexico – considered one of the largest marine oil spills to date. Calling the oil sector an industry “plagued by secrecy, inaccuracy and unexpected disasters”, Bower revisits the role of states across the world including, of course, Qatar. While the oil and gas sector may sound a dry subject for some, what sets this book apart is its diversion from chronicle or theoretical account of the past events, and turning them into tale to grasp the reader’s interest for 525 engrossing pages.
Available at Virgin Megastores in Doha.
products & reviews
Huawei Ascend P7 The Ascend P7 which was launched recently in the region is Huawei’s 4G LTEenabled smartphone with a five-inch full high definition display. The phone comes with an eight-megapixel front-facing and 13 megapixel rear-facing camera. At just 6.5 millimetres in width, the Ascend P7 is perhaps one of the slimmest 4G LTE smartphones in the market. The phone also uses a smart network switching technology that stabilises the connection even during weak signal reception to minimise battery drainage.
Canon Image Rendez-Vous Formula Celestial
The new image FORMULA P-215II from Canon is a mobile scanner designed for travelling or just saving space on your desktop. With faster speeds, the new model is able to scan up to 30 pages a minute and can feed up to 20 pages at a time through its automatic document feeder. It also includes enhanced image processing features such as shadow cropping, and photo mode to help users to achieve better scan results.
Citizen EcoDrive Satellite Wave F100 Citizen’s latest watch, part of its Satellite Wave series, achieves the world’s fastest signal reception speed from up to three seconds, it is also the world’s thinnest lightpowered satellite-synchronised watch, at 12.4 millimetres, made from lightweight titanium. Improvements include recognition of 40 times zones. The dial design is
The Rendez-Vous Celestial by JaegerLeCoultre has an 18-carat white gold case encrusted in diamonds that run all the way to the crowns and the bezel. The watch also has a zodiac calendar on the dial, which shows the position of the constellations at any moment of the year, by means of an annual calendar that governs the system of time display and measurement.
inspired by the solar panels used to power orbiting satellites and the hollowed push buttons simulate the fuselage of navigational satellites.
App Reviews
Arsel
An app launched by the Qatar Communications Regulatory Authority (CRA) of the Ministry of Information and Communications Technology allows you to send direct comments and feedback on network-related issues. If you are unhappy with a service or are having a network issue with either Ooredoo or Vodafone, you can now send comments directly to the CRA. The app also includes a map where consumer comments about network quality can be seen.
Sunrise Calendar This beautifully designed app puts both native calendar apps from Android and iOS to shame with its great interface and design. What really makes this app worthwhile is its new release that integrates with a number of accounts beyond the usual to include Evernote, Asana and GitHub among others. It also comes with a great web app on Chrome making it one of the best free cross platform calendar services out there.
Moment
App developer Kevin Holesh says he built the app for himself when he realised how much his addiction to technology was affecting real-world relationships with people. This simple app tracks how long you use your phone for each day, and the results can often be surprising. Holesh told news website Techcrunch that people’s guesses were almost always 50 percent too low. If you are looking to cut down on how much you use your phone, monitoring your usage might be a good place to start.
The Edge | 75
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