contents October 2014
w w w.t h e e d ge. m e
Interview: The benefits of district cooling with Qatar Cool chairman Omar Alfardan
- October 2014
42
- QATAR’S BUSINESS MAGAZINE - Vol. 6 No. 10 - Issue 60 - October 2014
cover story
And what Qatar is doing about preserving this most precious of natural resources
Vol. 6 No. 10
THE
MIDDLE EAST'S WATER IS RUNNING OUT
100% Qatari
PLUS:
SPECIAL SECTION:
Education in Qatar
48 Omar Alfardan, chairman of Qatar Cool, tells The Edge that air conditioning accounts for 70 percent of electricity consumption in the Gulf region and the alternative, district cooling, is an extremely eco-friendly and affordable solution to its indoor cooling challenges.
features
QATAR'S HOMELAND SECURITY
Do domestic defence strategies present private sector opportunities? QMDI's Amal Khoury Apple pushes new payment system Trade and transport in the GCC Business Insight: GEW’s Elaine Gold
Access to potable water is increasingly becoming an issue worldwide, and nowhere is this challenge more acute than the arid deserts of the Middle East. For a country such as Qatar, with limited fresh water reserves, a subsidy system and a fast growing population with high consumption habits, this problem is even more pressing. Shehan Mashood examines Qatar’s stark water realities and discovers what solutions the country is investing in.
42
Business Interview: District cooling offers environmental benefits 48
In an exclusive interview with The Edge, Omar Alfardan, chairman of Qatar Cool talks about the business model of the country’s leading district cooling company and how it strikes a balance between energy utilisation and reduced energy consumption.
Feature Story: Qatar’s homeland security 52
Since Qatar gained independence in 1971, it has increased the scale of its armed forces. But as Qatar’s military and capability remain comparatively small, to what end can any growth here serve? And what opportunities might this offer to private sector businesses?
Business Interview: Bringing professionalism to the MICE industry 58
Amal Khoury, events director within the Professional Conference Organiser at QMDI, talks about the importance of having a professional conference organiser to attract high profile events and grow the country’s visibility in the international events and conferences sector.
Special Section: Education 65
The Edge’s Aparajita Mukherjee interviewed five representatives from different parts of Qatar’s education matrix to build an overview of the sector’s current status quo.
In March, this year Qatar made military training mandatory for all male citizens between the ages of 18 and 35. The country is also increasing its military resources, providing limited but lucrative opportunities for private sector businesses. (Image Corbis)
The Edge | 5
contents page
sectors
Finance & Markets 25
A new report has underscored the importance of ongoing improvements in transport and logistics networks in diversifying the economies of the Middle East away from hydrocarbons.
Energy & Sustainability 31
Gasal and Qatar Chemical Company have signed a long-term pipeline network agreement under which Gasal will supply the nitrogen necessary for the Ras Laffan Olefins Company ethylene cracker in Ras Laffan.
The new pipeline deal will ensure Qatar’s growing prominence in the region’s downstream hydrocarbon sector. (Image Corbis)
Real Estate & Construction 35 A real estate expert explains why Doha’s residential rents are only going to increase in the near future, and what the repercussions of this might be.
Tech & Communications 37
While Apple Pay is the company’s latest bet on transforming the mobile payments industry to make it easier and secure to conduct transactions, countries such as Qatar could take a while to benefit.
Business Insight 75 Amr Belal, managing partner of the green division, Innovations Unlimited ME (IUME) and Markus Jordan, managing partner of the events division, IUME, talk about the business divisions of the multidisciplinary company. Global Entrepreneurship Week (GEW) is the world’s largest celebration of the innovators. Elaine Gold, director, Organisation and Strategy, Silatech talks about the event partners and what they hope to achieve this year.
regulars From the Editor 10 Photo of the month 12 Business News 14 Qatar Perspectives 20 Products 81 6 | The Edge
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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.
8 | The Edge
editor’s letter It has been said many times that in the future, wars will not be fought over territory, ideology or energy resources – but rather that one precious resource that makes all life on our planet possible: fresh water. This is especially pertinent given the current situation, where in rapidly developing countries such as Qatar, water consumption rates far outstrip potential future availability, in an already volatile region. On an international scale, problems such as global warming exacerbate the issue by potentially negatively affecting rainfall in the Middle East, among many other locations. Locally, problems such as the seepage of toxins from overflowing landfills into already depleted aquifers ostensibly add further to the challenges faced by Qatari authorities in conserving what little available water they already have. Besides its primary use in its potable state for quenching thirst, cooking and providing hydration to humans, non-saline water is essential for many other applications. Think of its uses in construction or as steam in power turbines as just two. Arguably, even if there was just enough water for human consumption, this would still not suffice, and a lack of access to water could affect many business sectors and industries. Something must clearly be done and fortunately Qatar has realised the urgency of this challenge and is taking many steps towards ensuring that the demand for water here can be met, as Shehan Mashood outlines in our cover story on page 42. Many of these potential solutions involve technology and the construction of giant reservoirs, as well as the possible elimination of subsidies for water tariffs for the country’s businesses and residents. It is upon the latter I would like to focus though. Such is the ubiquity of water shortage issues, I
believe there could be few nationalities living and working in Qatar that are not familiar with water problems and the looming threat of drought. Even rich, industrialised Western countries such as the United States (where a drought is currently crippling California) or the United Kingdom, which believe it or not faces water restrictions from time to time are affected by this problem. Hailing from semi-arid Southern Africa, which is regularly struck by water shortages and often suffers from drought, I am highly familiar with campaigns that educate the population regarding water conservation, down to turning the taps off when we clean our teeth and reusing grey water for gardening, etcetera. I am also familiar with water rules being implemented by the authorities, such as placing limitation on washing cars and watering gardens, which are rigorously enforced by local authorities and transgressors are heavily penalised. Communities too, self police and those who flaunt legal requirements are chastised by their fellow citizens for wantonly wasting something belonging to all of us. This brings me to my point. Every day, every singly day, I am astounded to see cars being washed all over Doha. In my compound alone, at least 20 to 30 cars get hosed excessively daily, despite this apparently being illegal. It has to be respected that people would like to drive around in a clean car, and not wishing to come across as sanctimonious, but I feel washing one’s car does not have to be done so often and should be done only using a bucket. Arguably, if this amount of wastage is deemed socially acceptable then it would hardly be surprising that this kind of wastage is continued in households and businesses, and is reflected in Qatar’s enormous water consumption averages. While issues of subsidisation and lack of enforcement are factors, to me the fact that this amount of water is wasted blatantly is down to one thing only: lack of information. Perhaps a protracted public water conservation campaign to educate the population of Qatar, national and expatriate, from schools to the workplace should be implemented, otherwise all other efforts to conserve Qatar’s water resources may ultimately be in vain.
Besides its primary uses, non-saline water is essential for many other applications. Think of its uses in construction or as steam in Miles Masterson power turbines, for example. Managing Editor 10 | The Edge
12 | The Edge
Cycling cyclone
photo of the month
The Qatar team competes in the Cycling Track Men’s Team Pursuit qualifying round during the 2014 Asian Games at Incheon International Velodrome in September in Incheon, South Korea. Held every four years and hosted by Qatar in 2006, China in 2010 and due to be held in Jakarta, Indonesia in 2018, the Asian Games bring together the best of the greater regions track and field athletes in sports ranging from archery to the Chinese martial art of wushu. This year will feature 13,000 athletes (including more than 250 from Qatar) competing in 36 sports for more than 400 gold medals. (Image Getty Images) The Edge | 13
news main story Alongside continuing private sector and massive infrastructure development Qatar seems set to resemble a construction site for some time as well as be at risk of cost inflation within this booming sector. (Image Corbis)
business news Qatar ranks second as most attractive country for infrastructure investment
As Qatar emerges as the second most attractive global infrastructure market, it also faces risks of rising construction inflation. With plans for a second terminal of Hamad International Airport, The Edge explores how the planned expansion may affect the country’s construction sector. by Farwa Zahra According to Arcadis’ Second Global Infrastructure Investment Index, Qatar has been ranked as the second most attractive country for infrastructure investments. With Singapore taking the first slot in world ranking, Qatar’s second rank also means it is the most attractive market within the Gulf Cooperation Council (GCC), followed by the United Arab Emirates at third. The report ranks 41 countries on factors such as quality of the existing infrastructure, availability of debt finance, tax rates, GDP per capita, and government policy. However, the opportunities also come with risk factors. For the GCC, construction inflation is a major challenge resulting from simultaneous large-scale projects, shortage of skilled labour, and rising prices of imported building materials. Arcadis forecasts 20 percent construction inflation in the GCC between 2016 and 2019. The further airport will add to this, according to the report. “In Qatar, plans are already being prepared to construct a second terminal at the recently-opened Hamad International Airport, if passenger growth exceeds current projections,” states the Economic Insight: Middle East Q3 2014. However, Martin Rivers, a United Kingdombased commercial air transport expert, believes the second terminal is less likely to impact construction inflation or Qatar’s market in the near future., “Airport infrastructure development is an ultra-long game,” he told The Edge. “It takes decades for plans to bear fruit.”
“Airport infrastructure development is an ultra-long game; it takes decades for plans to bear fruit.” – Martin Rivers, commercial air transport expert.
20% The expected rate of the GCC’s construction inflation between 2016 and 2019. 14 | The Edge
QNB release book to improve financial knowhow for young people in Qatar QNB recently released a new publication Money Made Easy, which is aimed at improving the financial knowledge of Qatar’s youngest population, children nine years and above. The Edge caught up with Yousef Darwish, general manager Group Communications at QNB: Can you tell us briefly about the book? Money Made Easy highlights money matters relevant to everyday life, both on a personal, national and global level. Our approach has been to combine illustrations and case studies, using simple, easy to understand language. Split into a number of educational chapters, including for example, the History of Money, Handling Budgets and The Role of Banks, Money Made Easy is available in two versions, Arabic and English. A highlight of the Book is a Play and Discover section where children are asked to interact and engage in a series of entertaining puzzles and challenges.
by the numbers
news
Travel in Qatar and the GCC Qatar and the GCC had some of the best hotel industry metrics in 2013 (USD)
Qatar
Occupancy rate:
64%
Average daily rate:
$233
Revenue per available room:
$149
“This book will GCC hopefully have a significant impact on our younger generation’s ability to manage their personal finances wisely.” – Yousef Darwish, general manager Group Communications at QNB.
Is there a lack of know-how about finance among youngsters? Qatar has the highest standards of living and GDP per capita in the world, but we also have higher levels of personal spending and debt. It is important that future generations are comfortable with using and understanding the value of money in their everyday lives. This book will hopefully make an important contribution to Qatar’s future. Can you tell us about the app you are developing? It will hopefully be available to download on iTunes in November and will include animated parts of the book and some games. As with the hardcopy, the app will be available in Arabic and English. Could you tell us where the book will be distributed, and what age group it is aimed at? And what the reaction to it has been so far? Money Made Easy has been distributed to 40 independent schools and 16 major private schools across Qatar and its introduction has been received positively by teachers, children and parents alike. We will continue to rollout distribution to reach as many children and educational establishments as possible. This book will hopefully have a significant impact on our younger generation’s ability to manage their personal finances wisely and responsibly.
Occupancy rate:
68%
Average daily rate:
$227
Revenue per available room:
$154
Occupancy rate:
ASIA 68% PACIFIC Average daily rate:
$122
Revenue per available room:
$83
Occupancy rate:
europe 67%
Average daily rate:
$134
Revenue per available room:
$90
For the full interview with Yousef Darwish log onto www.theedge.me The Edge | 15
news
business in quotes
“Qatar doesn’t see itself as an alternative to other producers and exporters. We producers complement each other. We know that energy is not just a commercial product but a very strategic one and we know what responsibility a producer therefore has.” Qatar’s Energy and Industry Minister HE Mohammed Al Sada responding to a question to the Frankfurter Allgemeine Zeitung daily in late September regarding a question whether Qatar would step up to potentially replace Russian liquid natural gas supply in Europe.
“We are planning to be ready for the acceptance and delivery of the first aircraft in line with the contract by the end of the year. This programme is of course another big challenge for everybody but we expect to have the [safety] certification reasonably soon as initially planned, so we are on track.” Airbus CEO Fabrice Bregier commenting on the delivery of Airbus A350 planes to Qatar Airways, which he promised will take place by the end of the year, at an event in Doha for the delayed delivery of A380 superjumbo aeroplanes to the airline.
16 | The Edge
“Qatar will host the FIFA World Cup in 2022, despite comments of FIFA Executive Committee member Dr. Zwanziger, which reflect his personal opinion and not that of FIFA. The only question now is when, not if. Summer or winter, we will be ready. We have proven that a FIFA World Cup in Qatar in the summer is possible with state-of-theart cooling technology.” Nasser Al Khater, executive director of communications for Qatar 2022’s Supreme Committee for Delivery & Legacy, in a statement reacting to comments by a prominent FIFA member that he thought Qatar would not be hosting the event.
Business News in Brief Qatar businesses remain firmly optimistic for Q3, 2014 Optimism among Qatar’s business community remains firm for the third quarter of 2014. The composite Business Optimism Index (BOI) for Qatar’s nonhydrocarbon sector stands at 39, the same as for Q3, 2013. However, it is eight points lower than in Q2, 2014, primarily because of the expected seasonal downturn in business activity during the holy month of Ramadan and the summer. Within the non-hydrocarbon sector, manufacturing is the most strongly optimistic for Q3 2014, backed by demand from new projects, a strong economy and a rising population.
International maritime industry joins Qatar International Boat Show
Organisers of the Qatar International Boat Show (QIBS) in November have confirmed that many of the top names in the maritime industry will be present at the show. Four shipyards will be exhibiting for the first time at QIBS 2014. Qatar
business in brief International Boat Show 2014 will be open daily from 3.00pm to 9.30pm from November 11-15 at Mourjan Marinas – Lusail City, just to the north of Doha.
Mashreq Qatar launches a supplementary ATM/Debit Card
Start-up Watch
news
Coworking means working in collaboration, where community is at the core of success, where people come before profit.
Mashreq Qatar has launched a Supplementary ATM/Debit Card in partnership with VISA. Individual customers
In a new semi-regular section of Business News, The Edge highlights new innovative businesses in Qatar. First up, 7ayak hub: Niranjan Mendonca, head of Retail Banking, Mashreq Qatar said the bank wants to provide the highest levels of convenience for its customers.
can now open an account and get up to six free Supplementary ATM/Debit Cards issued for their immediate family members. Cardholders can use the cards to withdraw cash using any ATM in Qatar, or withdraw cash with zero withdrawal fee from any of the one million ATMs across the world displaying the Visa logo.
Muntajat promotes Qatar’s chemical and petrochemical industry
A delegation led by Qatar Chemical and Petrochemical Marketing and Distribution Company (Muntajat) joined industry players at The 5th Annual Gulf Petrochemical and Chemical Association Fertiliser Convention
Muntajat delegation at The 5th Annual Gulf Petrochemical and Chemical Association Fertiliser Convention.
What is it? 7ayak Hub is the 1st coworking space in Qatar, designed to support community of change makers to scale up their work through access to collaborative network, educational content and creative space. But what is coworking? Coworking refers to individuals working in the same space though on different projects and for different companies. Coworking is not a business incubator, typical office space or accelerator. Coworking means working in collaboration, where community is at the core of success, where people come before profit and social, collaborative and informal aspects of work are most important. Why is it unique? 7ayak Hub provide affordable, flexible and creative working space for entrepreneurs, start-uppers, freelancers, creatives, community activists, small and medium enterprises; technically to anyone, who needs a space to work. Along with space comes numerous networking opportunities, because 7ayak dedicate a lot of time working on community building and match making start-ups and companies, who can either barter the services, or establish partnerships and sponsorship agreements. Who is currently working out of 7ayak hub? Among more established companies or how 7ayak call them “grown-ups”, are Business Excellence Center – business management consulting firm for SMEs, Dorra – creative edutainment solution agency, Mediadante – independent film production company, The Youth Company – social enterprise for youth development. Start-ups hosted at the hub include Karak Time – new web show, featuring people and stories positively shaping Qatar to 2030 vision; House of Wow, a photo and video production company serving start-ups and SMEs; 7ayak Seha – healthy lifestyle guide and directory among others. What are the prices like? A hot desk cost is QAR50 a day or QAR500 a month, A dedicated desk price starts from QAR1000 depending on the duration of the contract, and 7ayak offer private office spaces as well. A hot desk comes with a host of administrative benefits. 7ayak also has a meeting room, workshop room and event space for rent.
to represent the State of Qatar’s growing downstream industry. The Muntajat delegation participated in discussions of emerging trends in the petrochemical industry with a focus on the role of fertilisers in food security. The Edge | 17
news
events
29-30 October
3rd World Annual Refining and Petrochemical Technology Summit
Events Listing October 19-22 October Science Parks World Conference
This two-day closed-door summit is billed as a gathering of global petrochemical and refining experts to discuss the latest technological process advancements for a refinery or a petrochemical plant. It will feature focused presentations, interactive panel discussions and technology sessions covering topics such as investment planning of integrated petrochemicals complex and refinery, planning for research and development, innovation in refining technology, strategies to improve operational efficiency and controlling shutdowns, technologies to reduce hydrogen consumption, process safety management in petrochemical and refining plants and integration of refining and petrochemical complexes.
20-22 October Milipol 26-28 October Qatar Plastic, Printing and Packaging Exhibition
10-11 November
27-28 October Future Landscape and Public Realm Qatar
6th Annual Middle East District Cooling Summit This event will host 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, as well as technology and solution providers involved in the master planning and development of major district cooling projects in the region. Key topics to be discussed include updates on the regulatory framework and policies, efficiency of district cooling versus traditional air conditioning, energy savings through district cooling methodologies and approaches in the region, district cooling automation technologies, sustainability and green buildings and the future of solar cooling.
28-29 October IFSB-FSI Seminar on Liquidity Risk in Islamic and Conventional Banks
17-23 November
4-6 November WISE Education Summit
Global Entrepreneurship Week For the third year running, Qatar is participating in Global Entrepreneurship Week (GEW). On Monday 17th and Tuesday 18th November at the Marriott Marquis Hotel there will be free workshops on a range of topics such as: How to Pitch Your Business Idea, The Importance of PR & Marketing, Social Delegates in discussion at Entrepreneurship, How to Successfully Start Your Business, Developing an an event at last year’s Global Entrepreneurial Mindset, Opportunities for Entrepreneurs in the Sports and Entrepreneurship Week in Qatar. Leisure Industry and more, including a Hackathon later in the week hosted by QSTP and as part of the first International Women’s Entrepreneurship Day, there will be an evening event hosted by Qatar Chamber to celebrate Qatar’s Women Entrepreneurs.
24-25 November
Euromoney Qatar The focus of this year’s Euromoney which will be held under the banner of ‘Global finance: Relaunched’ will cover aspects of the future of the financial industry across the globe and in Qatar. Richard Banks, the director of Euromoney Qatar conference said, “This year’s Euromoney Qatar conference will focus on the new regulatory environment and ask how much is too much? Can real growth return if the financial sector is so heavily regulated?” Discussion about the future of the Qatari economy will revolve around many of the mega-projects underway, the role of the banking sector in financing these projects and whether they have the necessary capital, skills and risk management structures to manage the growth.
18 | The Edge
November 3-5 November HSE in Energy Forum 3-5 November Doha Goals Forum
11-15 November Qatar International Boat Show 16-19 November Strategy Leaders Qatar 17-18 November Solar Qatar Summit 18-19 November 3rd Annual Middle East Smart Cities Summit 24-25 November Euromoney Qatar 26 November QAFAC-MI Middle East Methanol Forum
qatar perspectives Can franchising encourage entrepreneurship in Qatar? According to Qatar’s National Vision 2030, a major strategy for both human and economic development is the investment in and development of an entrepreneurial culture. Qatar has made significant investments to encourage citizens to engage in entrepreneurial activity says Robert Madronic but argues that instead of acting as middlemen, Qatar needs to focus on new industries. The massive economic development in Qatar is evident from the towering skyscrapers to the seemingly endless series of ships unloading cargo at Port of Doha. What is not so obvious is the role Qatari entrepreneurs have played in this development so far. The idea of encouraging entrepreneurial development in Qatar was born out of the fact that Qatar needs to have alternative industries in place to ensure its long-term economic independence as oil and gas begin to run out or as substitutes emerge. As this happens, Qatar will need to develop new and different industries to maintain its economic stability. The role of entrepreneurs in any economy is to create, grow and manage businesses that can engage in trade by selling products and services internationally. Unfortunately, far too many entrepreneurs in Qatar have taken the easy route as middlemen, franchising foreignowned companies rather than starting and growing Qatari businesses. While this does keep some money and control in the hands of local, Qatari business owners, it arguably does not stimulate the learning, independence and self-efficacy gained from starting an enterprise from scratch. Unless local businesses learn to start and develop new enterprises, Qatar will never be able to grow beyond the easy money of petrochemicals. When a local businessperson decides to become a franchisee, he essentially 20 | The Edge
Unless local businesses learn to start and develop new enterprises, Qatar will never be able to grow beyond the easy money of petrochemicals. pays a fee, takes over a system developed by the franchisor and pays royalties on their revenues. This means franchising is importing knowledge, goods and services from the franchisors’ home country and selling them locally. In exchange for the security, training and marketing power of the franchise trademark, the owner must be able and willing to give up independence and a great deal of learning. As a franchise owner, they should, ideally, comply with the various controls and procedures established by the franchisor. While this allows the franchisee to earn revenue and some management experience, the longterm sustainability of the franchise still depends on the overall local economy. The franchise does not bring in new money from international markets. In fact, there is a net outflow of money to the franchisor’s host country. Thus, Qatari businesses earn learn less than they otherwise would have. While Qatari franchisees may not learn as much from owning a franchise than from starting a business themselves, they can receive a fair amount of training. For nationals, this training can, in theory, be leveraged into the development of locally-modified systems that can be franchised to other countries to bring in international revenue. This would work well for Qatar except for some issues. First, many franchises in Qatar are master franchises where the local firm buys the rights to a franchise and then develops a series of new locations in the country. While a Qatari national owns the company, most often they do not hire Qataris as
managers of these locations and instead hire expatriates who receive the training to manage and operate them. Thus, the expatriate managers and employees gain the educational benefits from the franchise and the bulk of the economic benefits are gained by the franchisors in their home countries. For Qatar’s long-term economic diversification away from hydrocarbons, a significant push is needed to develop industries from scratch. Rather than simply importing products and services from other places, Qatar’s next generation of entrepreneurs need the economic, educational and governmental support to become inventors of new products, creators of new services and pioneers of innovative new businesses.
Robert Madronic is marketing instructor at the School of Business Studies, College of North Atlantic Qatar.
qatar perspectives Seeking financial advice in Qatar When seeking financial advice, consumers are warned to ensure they use a qualified advisor from a licensed and regulated firm. Riaan Francois Venter explains what this actually means in Qatar for those seeking financial advice.
By engaging a firm licensed by the QFCRA, the consumer can be sure that the firm is governed, managed, financially stable and accountable under relevant laws.
In its strategic plan for financial sector regulation, Qatar Central Bank (QCB) states its objective as “building a resilient financial sector for the State of Qatar that operates to the highest international standards of regulation and supervision”. As such, the “competent authority” must license all financial advisory firms operating within Qatar to perform the services they offer – the Qatar Financial Centre Regulatory Authority (QFCRA) or Ministry of Business and Trade (now regulated by QCB). In its commitment to achieving its goals, Qatar is cleaning up its financial sector and cracking down on unlicensed operators within the country, as well as ‘fly-in’ advisors who travel to Qatar to conduct business. The service provider and the client may have large financial penalties imposed if found to be operating outside the law. Without licensing and regulation, there is no control over the qualifications of the financial advisor, their fitness or propriety; quality of the advice given or information disclosed; product quality or the financial soundness of the product providers and no protection for the consumer. Without licensing and regulation, who is there to ensure that such operators act ethically, in the best interests of the client? Under the governance of the QCB, the QFCRA licenses, regulates and supervises banking, financial and insurance-related businesses carried on, in, or from the Qatar Financial Centre (QFC) in accordance with the highest level of international regulation and supervision, as per QCB’s vision. It offers the most stringent level of regulation and supervision for financial
advisory firms that are assigned a dedicated team of supervisors. Using a risk-based approach, they assess and monitor every facet of the business from its structure and management to its business processes and documentation to the approval of key employees and customer-facing staff and the nature and quality of advice given.
22 | The Edge
advice sought. One would never consider going to an unqualified, unlicensed doctor or lawyer. Similarly in the realm of seeking financial advice, one needs to consider a licensed advisor alone.
Consumer benefits
By engaging a firm licensed by the QFCRA, the consumer can be sure that the firm is appropriately governed, managed, financially stable and accountable under the relevant laws. The QFCRA also ensures that the advisor is fit, proper and qualified to provide the financial advice for which they are licensed. The QFCRA is unique in Qatar requiring an advisor to have the UK Level 4 Diploma (or equivalent from a comparable jurisdiction) as a minimum requirement. The advice consumers receive is clearly explained, justified and documented, based on robust ‘Know Your Client’ requirements, with transparent disclosure of charges, risks, warnings and what and how the advisor is paid. On the other hand, the product providers used and the products offered are regulated, financially sound and high quality. They have access to robust and effective channels to complain and seek recompense. The QFCRA has powers to sanction firms and/ or individuals that carry their license, when necessary. As with a doctor, lawyer or any other professional, the advisor-client relationship requires a high degree of trust. Trust that the specialist in a field is qualified and licensed to provide the
Riaan Francois Venter is a QFCauthorised financial advisor for Nexus Financial Services.
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Contents: Intra-regional trade key to Qatar’s diversification strategy 25. Qatarisation drives in Doha’s financial sector 26. Insurance regulatory climate in Qatar reflects vibrant sector 28.
finance & markets Plans are already underway construct a second terminal at recently-opened Hamad International Airport, further boosting the potential for intraregional trade between Qatar and GCC+5 countries
Intra-regional trade key to Qatar’s diversification strategy Ahead of the long-delayed implementation of the Gulf Cooperation Council (GCC) Customs Union, now envisaged for January 1, 2015, a new report from the Institute of Chartered Accountants in England and Wales (ICAEW) has been released. It underscores the importance of improvements in transport and logistics networks in diversifying many regional economies, namely the GCC plus Egypt, Iran, Iraq, Jordan, and Lebanon (GCC+5) away from their reliance on hydrocarbons assets, writes Simon Watkins.
I
n its Economic Insight: Middle East Q3 2014, the ICAEW has highlighted that the region has long-relied upon roads as the main mode of transport for goods. But while that has been practical – given the comparatively smaller size of Gulf Cooperation Countries (GCC) countries and the abundance of cheap road fuels – road freight can be costly and slow over long distances. This acts as a brake on the growth in trade volumes between GCC countries. “Road transport policies can also be particularly contentious,” the report states, “for example, the United Arab Emirates’ (UAE) recent proposals to levy additional tax upon road vehicles entering the Emirates
have frustrated both Saudi Arabia and Oman, who have urged the UAE to reconsider, as this tax would impose additional costs upon their transport sectors, and stoke price inflation for many basic items.” In this context, increasing investment in railways infrastructure is one of the keys for dealing with population growth and increasing congestion, particularly within cities, and in developing the ambitious growth plans for the tourism sector, and here Saudi Arabia, Qatar, and the UAE are leading the change, with investment plans worth USD45 billion (QAR163.8 billion), USD37 billion (QAR143.7 billion), and USD22 billion (QAR80.1 billion), respectively. In general
The Edge | 25
sectors | finance & markets
All transport developments will need to function within the framework of a GCC Customs Union. terms, the most ambitious of the region’s railway infrastructure plans is the planned GCC Railway, a 2177-km project which will link the networks of the six GCC countries, and would be delivered by a new GCC Railway Authority, with a view to becoming operational by 2018-19, according to Ramiz Al Assar, World Bank resident advisor of the GCC Secretariat General, in Riyadh. Clearly, though, with the region’s rapidlydeveloping tourism market also crucial to the diversification objective, aviation projects also account for a substantial part of the region’s infrastructure pipeline. In this respect, the growth of Dubai International Airport, which recently displaced London Heathrow as the world’s busiest airport for international passengers, can be seen as a sign of how importantly the GCC states regard the development of their aviation sectors, underlines the ICAEW. In Qatar plans are already being prepared to construct a second terminal at the recently-opened Hamad International Airport, if passenger growth exceeds current projections, particularly ahead of 2022. “It is part of our long-term vision, as we are hosting the 2022 World Cup, to have another terminal and, once that’s ready we will move other airlines to the second terminal and dedicate the first one to Qatar Airways,” says Qatar’s Civil Aviation Authority chairman and managing director, HE Abdul Aziz Al Noaimi, in Doha. Having said this, there certainly is some way to go before the intra-regional trade in the GCC+5 comes anywhere near that of other major global regions. According to figures from the Centre for Economics and Business Research (CEBR), the overall trade picture in the Middle East has changed little in the last 10 years: from 2003 to 2013, the proportion of GCC+5 nations’ goods exports which were shipped to other countries in the region grew only marginally, from 8.9 percent to 9.4 percent. However, trade between the GCC countries stood at USD92 billion (QAR334.9 billion) in 2013, and is expected to grow by five percent this year, according to Sultan Bin Saeed Al Mansouri,
26 | The Edge
the UAE’s Economy Minister, in Dubai. This still compares unfavourably to countries in the North American Free Trade (NAFTA), consisting of the United States Eurozone members comprised 49.2 percent and 45.1 percent of their memberships’ total goods exports respectively in 2013. More appositely, given its majority emerging markets status countries, Association of Southeast Asian Nations (ASEAN), intraregional trade accounted for 26.0 percent of total goods exports. Ultimately, concludes Al Mansouri, all of these transport developments will need to function within the overall framework of a workable Customs Union, and adjunct business architecture. “The development of laws and regulations governing doing business in the GCC - for example, industrial laws, investment laws - need to be established within the six GCC countries to be able to facilitate all the businesses of trade and investment.”
0.5%
Percentage growth from 2003 to 2013 in GCC exports to countries outside the region. Labour market
Qatarisation drives in Doha’s financial sector As one of the principle pillars of Qatar’s non-hydrocarbon private sector, the financial services industry has recently been a focal point in the drive to Qatarisation, writes Oxford Business Group’s Oliver Cornock. Indeed, the replacement of a number of expatriate banking chiefs with Qatari nationals in recent months has been one of the more visible signs of this
Qatar’s Civil Aviation Authority chairman and managing director, HE Abdul Aziz Al Noaimi says the country is convinced that HIA and its expansion will contribute to intra-regional trade.
renewed emphasis. Yet the implications of Qatarisation reach far beyond the boardrooms. A 20 percent Qatari-national quota by 2030 is the target across the private sector. But while foreigners and locals alike agree that Qatarisation is an essential goal, there are concerns over just how rapidly the target can be met. For the private sector as a whole, recent data suggests that the country faces a tough challenge in meeting the 20 percent goal, however, this is despite the fact that the Qatarisation drive began with an Emiri decree in 1997. Qatar National Bank (QNB) reported in its September 2014 economic review that expatriates made up 94.1 percent of the private sector labour force, giving a 5.9 percent Qatarisation rate far from even a shorter term target of 15 percent by the end of the 2011-2016 fiveyear plan. In the financial sector, however, the numbers are generally much better. QNB, for example, has implemented a five-year strategic plan in this area and claims a 50 percent Qatarisation rate. Al Khaliji, meanwhile, also recently appointed a string of nationals to senior positions, including one to replace expatriate CEO Robin McCall. Many of the new appointments have been women, strengthening gender balance. QIB, meanwhile, has long been pursuing a programme to attract nationals, with the bank saying that it had hit 29 percent Qatarisation by the end of 2013. Other financial sector outfits have equally been pushing hard towards their goals. Naturally the key here is the role of training and education, and in this too, there has been progress. The Qatar Finance and Business Academy (QFBA) has been
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sectors | finance & markets
central to this, having also drawn up the Training and Competency Framework for the sector at the behest of the Financial Markets Development Committee. “In 2013,” QFBA CEO Abdul Aziz Al Horr told OBG, “we had approximately 1626 people come through our doors, with an estimated 2000 expected in 2014. A large number of the participants have been Qatari, with a significant portion being trained by QFBA since opening.” Other institutions offering finance courses include the Qatar Faculty of Islamic Studies, the College of the North Atlantic and Qatar University. Challenges do remain, however. Training and education cannot be rushed, with the need to match quotas to actual availability clearly key. Here, the private sector has traditionally been at a disadvantage in attracting nationals, with public sector jobs often granting more security as well as better pensions and other benefits. Yet as the popularity of the programmes already being run by the QFBA and others demonstrate – along with the success many institutions have already had – given the chance, Qatari nationals are far from lacking in the desire to leave their mark on the country’s dynamic financial industry.
2000
The number of participants in QFBA financial courses in 2014. “A large number have been Qatari,” says CEO Abdul Aziz Al Horr.
Oliver Cornock is regional editor, Middle East, for Oxford Business Group.
28 | The Edge
Financial regulation
Insurance regulatory climate in Qatar reflects vibrant sector The Qatar insurance sector is vibrant, growing and highly competitive. Looking ahead to 2015 and onwards, the industry will face a major regulatory change as Qatar Central Bank (QCB) prepares to introduce its regulatory framework, writes KPMG’s Adeel Mushtaq. It is widely expected that these new regulations will be based on the revised Insurance Core Principles (ICPs) as issued by the International Association Insurance Supervisors (IAIS). The amendments to the Qatar Financial Centre Regulatory Authority (QFCRA) PINS rulebook, based on ICPs, comes into effect from January 1, 2015. The insurance sector in Qatar is taking steps to enhance insurance regulation with a view to developing a global financial centre and providing international standard infrastructure, regulatory environment and necessary support for innovative solutions. However, for most insurers, the current wave of change will present challenges to their business models, cost structures and how they communicate with stakeholders. Insurance sector executives should plan ahead to achieve sustainable growth in this fast-changing environment coupled with equally fast evolving regulatory and governance landscape. Regulatory change coupled with the upcoming Phase II of IFRS 4 Insurance Contract project, is not only complex but also have broad implications on underlying system changes – processes which Qatar insurers may not be prepared for. Qatar Insurance firms that wish to stay ahead need to strategise the change and build tools and capabilities to cut through the complexity for the implementation of the new regulations.
The regulatory changes are undoubtedly challenging and the cost of implementation is likely to be high. The current operating environment is characterised by low global growth, flat yield curves and high expectations from external stakeholders, such as analysts, rating agencies and regulators for quality risk and capital management. Considerable pressure is therefore being applied to the management of insurers to grow and write profitable business, achieve an increasing return on capital while at the same time, maintain robust risk and capital management frameworks and reducing operating expenses. Ostensibly, most insurers do have some processes, people and systems in place to manage risk and capital in their businesses and are aiming to build regulatory changes on to their existing risk and capital management frameworks. The regulatory changes are undoubtedly challenging and the cost of implementation is likely to be high. Therefore it is recommended that efforts should focus on developing enhancements rather than low-cost alternatives. The ultimate aim should be competitive advantage by identifying, managing or avoiding unwanted risks, increasing capital efficiency and identifying potential opportunities for growth.
Adeel Mushtaq is a senior manager within KPMG Assurance and Advisory Services.
Contents: Gasal takes the lead on the RLOC pipeline deal 31. Barzan Gas to commence operations in Q1 2015 32. NakilatKeppel O&M completes GDI lift-boat prep 33.
energy & sustainability
Gasal takes the lead on the RLOC pipeline deal
As competition between Gulf states increases, particularly Oman, the new pipeline deal will ensure Qatar’s growing prominence in the region’s downstream hydrocarbon sector. (Image Corbis)
Gasal and Qatar Chemical Company (Q-Chem) have signed a long-term pipeline network agreement under which Gasal will supply the nitrogen necessary for the Ras Laffan Olefins Company (RLOC) ethylene cracker in Ras Laffan Industrial City, writes Simon Watkins.
A
s a supplier to a wide range of major government-linked petrochemical and industrial projects at both Ras Laffan and Mesaieed, and with state-owned Qatar Petroleum (QP) as the second biggest shareholder, Gasal is ideally placed to take advantage of the massive increase in chemicals production planned by Doha, currently taking shape as the massive planned Al Sejeel and Al Karaana projects approach the construction phase. While new upstream gas ventures to feed liquid natural gas (LNG) exports have been on hold since 2005, the last major remaining development in the pipeline – of the Barzan field, specifically to feed domestic industry – is nearing commissioning, according to a statement from operator RasGas in early September, with commercial production expected to begin from its 700 million cubic feet (19.8 million cubic metres) per day first train in early 2015. Gasal has supplied nitrogen to the RLOC cracker since commissioning in 2009 through a dedicated unit situated within the plant and is already delivering gas to customers such as Dolphin Energy and Oryx GTL (gas-to-liquids), but connection to the wider network, is designed to increase reliability, safety and flexibility of supply, according to Ahmed Ibrahim Al Emadi, Q-Chem General Manager, in Doha. The news comes alongside a swathe of new announcements in the neighbouring downstream sector, the most recent dramatic example of which is that the Sultanate of Oman will award engineering, procurement and construction (EPC) contracts worth USD65 billion (QAR237 billion) over the next five years. This in large part will be connected to activities surrounding the proposed refinery and petrochemical project at Duqm, according to Madhu Pillai, project director of Kentz Engineering International Oman, in Muscat. The Edge | 31
sectors | energy & sustainability
Connection to the wider network, is designed to increase reliability, safety and flexibility. A significant slice of this USD65 billion (QAR237 billion) of contracts will be directed at Oman Oil Refineries and Petroleum Industries Company’s (ORPIC) two additional major projects, which are at design stage: the Liwa Plastics Project (LPP) and the Muscat-Sohar Product Pipeline (MSPP). The LPP steam cracker project to improve value added by processing light ends produced in Orpic’s Sohar refinery and aromatics plant remains on schedule for completion during 2018, and will enable the Sultanate to produce, for the first time, polyethylene. In the meantime, the MSPP (involving a 280-kilometre pipeline between Muscat and Sohar for the transporting of refined products, and including a large storage
Qatar’s Production of Gas by Usage (m t/y, % shares shown)
Exports (Pipeline) Production for domestic use Exports (LNG) 143
151
11.1%
11.7% 35.7%
80
37.7%
20.8% 33.0% 51.2% 33.0% 2009
52.6% 2010
2011
2012
2013E
2014F
2015F
2016F
Sources: BP, analysis and forecasts
and distribution terminal in Jifnain), is now expected to be completed by late 2017. Given the resultant increased competition in the downstream sector, then, the new Gasal network in Ras Laffan – which will include 35
kilometres of oxygen, nitrogen, and hydrogen pipelines connected with multiple sources – can also be used as a platform for further expansion of its downstream activities.
Natural gas
Barzan Gas to commence operations in Q1 2015 Qatar’s Barzan Train 1 (of the planned six in total), will start operation from the first quarter of 2015, writes Simon Watkins. As the cornerstone of Qatar’s plan to increase its use of natural gas from the North Field to fuel its power plants and meet rising domestic demand for electricity, the progress of the Barzan Gas Project (BGP), the joint venture between Qatar Petroleum and ExxonMobil Corporation has been hampered by delays with the final completion date for the project having been revised to the end of 2021, from the original estimate of 2016. According to RasGas, the developer and operator of the project, Train 1 is already more than 95 percent complete, and is rapidly ramping up for first production of clean-burning natural gas by early next year, with the plan still being that, once fully completed, Trains 1
30,000
The number of people who worked on Barzan Train 1 at its peak of construction. 32 | The Edge
and 2 will produce around 1.4 billion cubic feet a day (bcfd) of cleanburning natural gas from the North Field. In fact, as an adjunct to this, RasGas has also announced that construction work on Train 2 is also progressing well with expectations to be completed by the middle of 2015. Combined with RasGas’ other facilities production (LNG and sales gas), the BGP is set to make RasGas one of the largest single gas processors in the world with a production capacity of 11bcfd (the equivalent of almost two million barrels of oil). In addition to sales gas, Barzan will produce about 22,000 barrels per day (bpd) of field condensate, 6,000bpd of plant condensate, 34,000bpd of ethane, 10,500bpd of propane and 7,500bpd of butane. The mega-project, which includes both offshore and onshore facilities, began in 2011, with the offshore facilities including three offshore wellhead platforms, subsea pipelines and cables, and the onshore ones comprising a gas processing unit, a sulphur recovery unit to remove impurities from the natural gas, and a natural gas liquids (NGL) recovery unit, which will produce methane, ethane, propane, butane and condensate. The final part of the chain is that the ethane produced from the plant will be used as a feedstock for the growing Qatari petrochemical industry.
energy & sustainability | sectors
Shipbuilding
Nakilat-Keppel O&M completes GDI lift-boat prep Nakilat-Keppel Offshore and Marine (NKOM), a joint venture between Qatar’s gas shipper Nakilat and Singapore’s Keppel Corporation subsidiary Keppel Offshore and Marine Ltd, has announced another milestone, with the keel laying of its first lift-boat new-build project, awarded recently in July by long-time client Gulf Drilling International (GDI). The project marks the shipyard’s first foray into the offshore jackup new-build market and is also the first such project to be undertaken in Qatar. Once completed in 2015, the lift-boat will support GDI’s growing offshore fleet of jackAn example of a liftboat – a multiple use vessel that can ups. be sailed as well used as a Customised for platform – which will soon be manufactured in Qatar, initially field transit operations for drilling firm GDI. (Image Corbis) in the Middle East and North Africa, the self-propelled and self-elevating lift-boat (LB310) is designed in collaboration with Bennett Offshore, a naval architecture and marine engineering arm of Keppel Offshore & Marine (KOM). It can operate in water depths of up to 65 meters and will be equipped with a unique 200 tons leg encircling crane, a large open deck space of around 8,611 square feet (800 square metres), a heli-deck and accommodation quarters for 130 people. In general terms, a lift-boat is a more efficient and cost-effective alternative to traditional offshore support vessels performing well-servicing, data-logging, wire-line cleaning, maintenance, commissioning and decommissioning of offshore platforms; this is especially so since it is self-propelled and thus can be mobilised without requiring third party assistance. In addition, it can accommodate a large number of offshore crew and also enhance the overall safety by providing a more stable work environment with its self-elevating feature. The Edge | 33
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Contents: Rental inflation may force more families to move out of Doha 35. Works begin on the first phase of Qatar’s three economic zones 36.
real estate & construction Rental inflation may force more families to move out of Doha Compounded apartments and villas are likely to see higher rental inflation in 2014, says Mark Proudley, associate director, DTZ. Pictured here is The Pearl-Qatar’s Porto Arabia. (Image Corbis)
As residential rentals continue to escalate in Doha, residents await government intervention through actions such as a rental freeze. In February this year, Qatari authorities ordered a freeze on commercial rents. As many real estate experts believe the rents are only going to go up in the near future, Mark Proudley of DTZ explains his reasoning behind this forecast and warns about its potential repercussions. by Farwa Zahra
A
ccording to DTZ’s associate director, Mark Proudley, “DTZ anticipates that residential rents will continue to rise in the short to medium on the back of strong population growth. Rental inflation is being exacerbated by delays in new projects reaching completion.” A recent report by Qatar National Bank (QNB), mentions higher land prices as a core reason behind rising rents. “According to the latest Ministry of Justice data, land prices have increased 52.7 percent since the beginning of the year. This has led to a rise in rent inflation to 7.9 percent in August 2014,” states the report. The land prices, it furthers, are driven by Qatar’s fast-growing economy and rapid population growth. While Doha’s entire residential sector will be affected by the ongoing influx of expatriates, some locations are bound to
The Edge | 35
real estate & construction | sectors
catch more attraction and hence greater levels of demand. Similarly, apartments and villas located in compounds are likely to continue gaining more attention due to the shared amenities they offer. “DTZ forecasts that the residential compound market will record even greater levels of rental growth,” said Proudley. According to QNB, the rising rents will likely cause inflation to rise to 3.4 percent in 2014 and four percent between 2015 and 2016. The government of Qatar last implemented a rental freeze on the residential sector in 2008. According to media reports in August this year, Mishal Al Dahnim, a Central Municipal Council member representing Al Hilal, urged the need for residential rent control, saying that rents should not be left to supply and demand, as supply is much less compared to demand. Al Dahnim also said that there should be a legislative measure to control rental inflation. However, in absence of a law controlling residential rents, the cost of living will continue to rise for residents of Doha. Articulating the result of increasing rents, Proudley said, “We anticipate that more lower- to middle-income families will start moving out to new developments on the outskirts of Doha into areas like Wukhair and Al Kheesa.” Indeed, the observation seems plausible considering the share of rents in a household’s monthly expenditure. According to QNB, rental inflation makes up around 32 percent of Qatar’s inflation basket. Expecting the rents to rise at least till 2015, QNB forecasts the trend leading to a 4.2 percent and five percent increase in domestic inflation in 2014 and 2015.
Mark Proudley, associate director, DTZ, says that the residential compound market will record even greater levels of rental growth.
36 | The Edge
“More lowerto middleincome families will start moving out to new developments on the outskirts of Doha into areas like Wukhair and Al Kheesa.” – Mark Proudley, DTZ. Construction
Works begin on phase 1 of Qatar’s three economic zones With works started on the first phase of Abu Al Fantas economic zone focused on telecommunications, technology, logistics, healthcare, energy, environment, warehousing, and related industries, Fahad Al Kaabi, chief executive officer of Manateq says the first zone is scheduled for completion in 2019. Qatar has started works on the first economic zone near the Hamad International Airport in Doha. The first phase of this project will be completed in 2017, said Fahad Al Kaabi, chief executive officer of Manateq, an autonomous government
company overseeing the construction of three economic zones. According to Zawya Projects News, the recently-started Abu Al Fantas economic zone will cover an area of around 4.1 square kilometres and will involve mainly technology, industries and logistic services. “Work is underway in Abu Al Fantas zone. The second and third phases will be finished in 2018 and 2019, respectively,” he said. Al Kaabi added that another economic zone in the area nearby Al Karaana will be launched in two stages, with expected delivery dates in 2019 and 2022. The third zone, near the port of Umm Al Houl, will comprise three stages, which will be completed in 2017, 2019 and 2022, Al Kaabi said. The development of all three zones will also include the construction of houses and facilities for workers.
Qatar’s Economic Zones at a Glance Abu Al Fantas
4.1 sq km
Next to Hamad International Airport Industry: Technology, logistics, healthcare, energy, environment, telecommunications, warehousing, and related industries.
Al Karaana
38.4 sq km
Between Doha and Bu Samra area Industry: Construction materials, machinery and equipment, security and maintenance, warehousing products, catering, and innovative industries.
Umm Al Houl
33.5 sq km
Next to Doha’s New Port project Industry: Petrochemicals, construction materials, metals, foodstuff supply products, logistic services, machinery and equipment, and auto parts and services.
Contents: Can Apple Pay disrupt the mobile payments industry? 37.
tech & communications
Eddy Cue, Apple’s senior vice president of Internet Software and Service, introduces Apple Pay during a recent Apple event at the Flint Center in Cupertino, California. (Image Reuters/Arabian Eye)
Can
disrupt the mobile payments industry? Apple Pay, is the company’s latest bet on transforming the mobile payments industry to make it easier and secure to conduct retail transactions. Apple has been successful in the past in disrupting the music industry, but payments might be a far bigger challenge, and countries such as Qatar could be waiting a while before seeing the benefits. by Shehan Mashood
T
he mobile payment system introduced by Apple will work on the new iPhone 6 and iPhone 6 Plus using Near Field Communications (NFC), a decade plus old technology that has struggled for years to go mainstream. The payment system works with a dedicated chip within the phone that Apple calls the ‘Secure Element’ and its Touch ID will authenticate payment. The Apple Pay technology will also work with the Apple Watch, which was recently announced. This creates a backdoor entry for more
than 200 million users of the iPhone 5, iPhone 5c and iPhone 5s around the world, although it is highly unlikely they will all purchase an Apple Watch.
Adoption
The payments industry is notoriously difficult to break into for numerous reasons and while there have been advances made on the merchant side, consumers have seen very little innovation from their credit card companies. However, Apple Pay already has support from credit and debit cards
from the three major payment networks in the United States (US) where it launched, American Express, MasterCard and Visa, and issuing banks representing 83 percent of US credit card purchase volume. The challenge is greater on the retail side. In addition to the 258 Apple retail stores in the US and some large retailers that will support Apple Pay, the exposure is limited. In the US there are around 220,000 merchant locations with contactless payment enabled, from the total of nine million in the country. The Edge | 37
sector name | tech & comms
Qatar residents’ reasons for not shopping online No control Technology Security
26% 31% 44%
Source: ictQATAR
However, a major change to credit cards is coming to the US next year. In late 2015 merchants who do not support credit cards with a chip that uses a pin number to complete transactions – a feature all cards in Qatar have – will be held liable for any fraud that occurs. This will mean millions of merchants will need to purchase and install new card-reading hardware the next year to comply. This could lead to a dramatic increase in the use of NFC. What is especially bold is Apple’s move to bypass the payment processors that have been used for decades, says Lucas Zaichkowsky, an enterprise defence architect at AccessData. Point of sale and online ordering systems integrated to support Apple Pay can send the device account number and the dynamic transaction security code directly to the card issuer for approval. In essence, they are creating their own secure payment network to facilitate their proprietary payment technology, he explains.
Security
A system that runs like Apple Pay, could also pave the way for increased adoption of online transactions, which has struggled in Qatar and the Middle East due to a perceived lack of security. In fact, an ictQATAR study showed that 44 percent
The roll-out of Apple Pay outside the US will be based on Apple’s strategy.” - Aaron Oliver, Mastercard. 38 | The Edge
of those surveyed suggested security as the biggest reason for not shopping online. However, Yasser, Kunhi, Visa associate director, Risk Services says, with advances in risk management Visa has managed to reduce fraud to near historic-lows for the Middle East and North Africa region, which sits at three cents per USD100 transacted. This is lower than the six cents per USD100 lost to fraud globally, making Qatar and the region relatively safer. The finger print ID system implemented by Apple could significantly reduce the risk of fraud. The system could also reduce cases of fraud when transacting in person. “When you are using Apple Pay in a store, restaurant or other merchant, cashiers will no longer see your name, credit card number or security code, helping to reduce the potential for fraud,” said Eddy Cue, Apple’s senior vice president of Internet Software and Services. With Apple Pay, the physical phone becomes the sole point for potential exploitation, explains Zaichkowsky. Hopefully, Apple has implemented significant and sophisticated measures into protecting card data stored in the iPhones, he says adding, “Regardless, removing sensitive payment data from the merchants’ hands is a necessary step to solve the increased breach epidemic retailers have been facing.” According to Apple when a card is added, the actual card numbers are not stored on the device or on Apple servers. Instead, a unique device account number is assigned, encrypted and securely stored in the Secure Element on the iPhone or Apple Watch. Each transaction is authorised with a one-time unique number using your device account number, instead of using the three-digit security code from the back of the credit card. This creates a dynamic security code to securely validate each transaction.
Coming to the Middle-East
It is unclear as of yet when Apple Pay will come to Qatar, or the wider Middle East. According to Aaron Oliver, head of emerging payments, Middle East and Africa at Mastercard, the roll out of Apple Pay outside the US would be based on Apple’s strategy. “That said, MasterCard is well prepared to support its roll-out in Qatar and the wider Middle East,” he added. After this first hurdle will come card-issuing banks, who also need to support the Apple Pay eco-system. Finally there is the issue of retailers that will need to implement NFC readers if Apple Pay is to be successful. However, if Apple is able to push NFC to mainstream in the US, and other mobile manufacturers start implementing NFC as a standard on Android phones, the most popular and widely adopted mobile operating system in the world, fast and secure mobile payments could finally become a reality for consumers.
Apple’s new payment system will use the fingerprint ID to complete transactions. (Image Apple)
40 | The Edge
The Edge | 41
water security | cover story
THE MIDDLE EAST’S WATER IS RUNNING OUT
And what Qatar is doing about preserving this most precious of natural resources Qatar is located in a region that is one of the most water scarce in the world, with less than 130 millimetres of rainfall a year. Add to this equation the fact that Qatar has some of the highest per capita water consumption rates in the world, around 500 litres a day, and you have an acute water security problem to deal with. In fact for all the oil and gas swimming beneath the Gulf, the countries that make up the Gulf Cooperation Council (GCC) are all water stressed. However, it is not all bad news, and there are investments being made to reduce the risk of water scarcity in the region. by Shehan Mashood
cover story | water security
H
igh water consumption per capita is not unique to Qatar but an issue across the GCC. Dr. Rabhi Mohtar, from the Biological and Agricultural Engineering and Zachry Department of Civil Engineering at Texas A&M university, who worked as the executive director for strategic projects, research and development at Qatar Foundation tells The Edge that it is quite normal for communities living a comparable lifestyle in dry lands to consume more water overall compared to counterparts living in wet areas. “It takes more water to sustain life in hot dry environments,” he says. In fact, the already high water use spikes during the hot summer months of June and July.
Water subsidies
However, there is an added issue exacerbating the problem of water use in the Gulf States: water subsidies. Dr. Mohtar says, “Subsidies in water and energy are known to constitute higher water use and Qatar is no exception.” The Qatar National Development Strategy 2011-2016 document acknowledges as much, stating, “Water subsidies eclipse the scarcity and true value of the resource and contribute to overconsumption and waste.” According to DesalData it costs around QAR10 per m3 (cubic metre) of water generated by desalination in Qatar.
“The reservoirs will act as a strategic storage that is able to maintain normal water supply for up to seven days.” - Mohammed Salem Al Mansoori, Kahramaa. 44 | The Edge
This is then sold on to consumers at subsidised rates depending on use, with residential flats and villas receiving up to a 55.8 percent subsidy (QAR4.4 per m3) on water. The government report hints at the possibility of eliminating subsidies stating, “User charges that more accurately reflect full economic costs could make a significant contribution to redirecting Qatar’s precious natural resources to higher value uses. Such efforts might be initially targeted at the non-Qatari population and industrial and commercial users.” Nevertheless, there is no suggested time-frame for such a move. “I believe it should be considered as one of the ways to reduce water consumption,” says Dr. Mohtar, “It is a matter of time when removing subsidies is implemented. Oman and United Arab Emirates (UAE) have started this process. I say process since it will take time to make it happen, people feel entitled to free water. In Qatar it is considered as part of wealth sharing.” Indeed if anything, the current political climate of the Gulf is likely to
Once completed, the mega-reservoirs will act as a strategic storage that is able to maintain normal water supply for up to seven days, or 30 with rationing, says Mohammed Salem Al Mansoori, manager water projects at Kahramaa.
water security | cover story
WATER SUBSIDIES IN QATAR It costs
QAR10
to produce one cubic metre of water through desalination.
Percentage subsidised: Residential Flat
QAR5.60 (55.8%)
Residential Villa
QAR5.60 (55.8%)
A worker stands at a desalination plant, located outside of Riyadh. “Saudi Arabia is moving towards implementing membrane technologies that are less tolling on energy use and overall cheaper,” explains Dr. Rabi Mohtar. (Image Reuters/ Arabian Eye)
make governments more reluctant to cut subsidies of any sort. For now, Qatar’s electricity and water provider Kahramaa has chosen to focus on moderating public water use through a campaign called Tarsheed. The aim is to stem water losses in the distribution network and reduce overall consumption. The target is to reduce consumption by 35 percent by the year 2016. There are also plans to create a fully integrated approach to water management by 2014, with an independent regulator to help accelerate reforms in the water sector. The same government report states that “Few tangible aspects of Qatar’s life and economy are as in need of efficiency reforms as water that is crucial to all human activity but in scarce supply.”
Desalination technology
Desalinated water is also expensive to produce as it requires considerable energy input. This is somewhat negated by the region’s easy access to cheap energy to power desalination plants. These factors have made the GCC a global centre of water desalination. Omar Saif, currently a researcher at Masdar Institute for Science and Technology in Abu Dhabi published data in 2012 that shows the region accounts for 43 percent of the total desalination activities around the globe. The preferred choice of desalination in the region has been to use a technology called Multi-Stage Flash distillation (MSF) that uses heat to convert water to steam. MSF constitutes 59 percent of desalination capacity in the GCC, and due to its high energy use requirements produces greenhouse gases, which is another
Commercial
QAR4.80 (47.8%)
Industrial
QAR5.60 (55.8%)
Government
QAR3.00 (29.9%)
Source: The Future Outlook of Desalination in the Gulf, DesalData, Kahramaa.
The Edge | 45
cover story | water security
negative side effect. “These are thermal technologies that used to be more robust and reliable and more adapted to integrate with the electricity generation,” explains Dr. Mohtar. However, he says Saudi Arabia is moving towards implementing membrane technologies that are less tolling on energy use and overall cheaper. “The membrane technologies are mature now and are as reliable as thermal technologies and should be explored,” he adds. Data from 2012 shows reverse osmosis (a membrane-based desalination technology) made up 29 percent of capacity in the GCC. In Doha, the Qatar Environment and Energy Research Institute (QEERI), has been working on perfecting a membrane technology called Seawater Reverse Osmosis (SWRO) which uses up to a quarter of the energy that thermal desalination does. Dr. Mohtar points out that the technology has a problem with fouling (particulate matter ruining the membrane surface that allows the sea water to pass essentially cleaning it of saline). “However,” he furthers, “the technology is now mature enough and indeed pilot facilities are needed to optimise its operation since much of the technology needs to be site specific for temperature, turbidity, and salinity of the water, which differs from coast to coast in Qatar. “There are cheaper and more energy-efficient membranes that are being developed to improve on the desalination technologies which we need to further work on,” says Dr. Mohtar, “the materials research is booming and we must ride that wave.”
Water storage
What other options does Qatar have? “With depleted ground water resources (lower ground water supply and added salinity) desalination is the only source currently,” says Dr. Mohtar. In order to increase water security, and in case of water pollution to the Arabian Gulf, Qatar’s single source of water for desalination, Kahraama are building mega-reservoirs at five different sites around the country.
“I believe [subsidies] should be considered as one of the ways to reduce water consumption.” - Dr. Rabhi Mohtar, Texas A&M University. 46 | The Edge
The earthworks of the mega-reservoirs projects are completed at three sites and the project is expected to be completed by 2016.
Once completed the reservoirs will act as a strategic storage that is able to maintain normal water supply for up to seven days, or 30 with rationing, says Mohammed Salem Al Mansoori, manager water projects at Kahramaa. “The reservoirs themselves are semi buried, fully covered, rectangular structures,” Al Mansoori tells The Edge, with each of them able to hold capacities anywhere between 325 million to 367 million litres of treated water. To be able to maximise their supply security, the reservoir sites are spread along the Qatar National Utility corridor, adds Al Mansoori, using the corridor to feed water to each other and into transmission. Apart from the mega reservoirs, there are approximately 100 existing reservoir with smaller capacities, explains Al Mansoori. “We must also look at the demand,” says Dr. Mohtar, “and not only focus on supply. This is done by reducing usage of water and electricity.”
Water in the industry
The industrial sector is often one of the largest consumers of water. However, in Qatar, water siphoned by industry through Kahramaa’s grid is relatively small compared to the total water used in the industry, says Johnjoseph Ryan, manager of advisory services at Sustainability Excellence, a firm that works on a strategic level with organisations that are trying to understand risk and the opportunities in areas such as water security. “From what we have seen companies tend not to be extracting water from the direct freshwater resources,” he says. Many of the big gas firms tend to generate their own water on site for their own usage, adds Ryan. To avoid any potential risks to their access to water they are bringing this function inhouse, which gives them a measure of control on the capacity they generate and to their own specifications. Energy companies themselves are also investing in technologies in water desalination and re-use. “I think the realisation is that if they are using more water and as a result more energy,” says Ryan, “they are producing more emissions and since a lot of that extra consumption is coming
Subsidies in water and energy are known to constitute higher water use, and Qatar is no exception says, Dr. Rabhi Mohtar, from the Biological and Agricultural Engineering and Zachry Department of Civil Engineering at Texas A&M University.
water security | cover story
A deslination and power generation plant run by the Dubai Electricity and Water Authority, in the UAE. The UAE has already started the process of removing subsidies, says Dr. Mohtar. (Image Corbis)
from desalination, it is also going to have an impact on biodiversity so I think that is often driving more change I would say, rather than the water scarcity issue itself.� Qatar and the Gulf states happen to be blessed with wealth to stave off water crises and seem to be planning for the future. Not far away from the GCC sits Yemen a far poorer country with 25 million people and the same acute water related issues. A widely quoted article from a local newspaper, Al Thawra claims that as much 80 percent of conflicts in Yemen’s rural regions are water related. The average Yemeni today only has access to about 140 m3 of water per year for all uses, this is in comparison to 1000 m3 per person per year in the Middle East. Yemen stands as a stark example of what could happen if nations in the region do not deal with their water related problems in a holistic manner.
Cumulative Online Capacity (m3/day)
A bleak look into the future
Cumulative installed desalination capacity in GCC States since 1990 (in millions) 25 20 15 10 5 0 1990
1995
2000
Qatar
Saudi Arabia
Bahrain
Kuwait
2005 UAE
2010 Oman
Source: The Future Outlook of Desalination in the Gulf.
The Edge | 47
business interview | district cooling
District Cooling environmenta
Omar Alfardan, chairman of Qatar Cool says, “Air-conditioning operators are under increasing pressure, to comply with the Chlorofluorocarbon (CFC) phase out imposed by the Montreal Protocol, on substances that deplete the ozone layer.�
48 | The Edge
district cooling | business interview
ooling offers ironmental benefits Plant One of Qatar Cool in the West Bay District, Doha
In an exclusive interview with The Edge, Omar Alfardan, chairman of Qatar Cool talks about the business model of the country’s leading district cooling company and how the company strikes a balance between energy utilisation and reduced energy consumption.
If you were to discuss your business model, what would you say?
Our business model is similar to a utilities business model, where we initiate the investment of the plant, the pipe distribution network (PDN) and the energy transfer systems (ETS) within the customers’ premises. With a 20-year customer contract we provide chilled water for air conditioning purposes, to our customers building(s) in exchange of fixed recurring charges.
How does the company offer cooling solutions without affecting the environment?
Qatar Cool offers many environmental benefits through district cooling. District cooling reduces CO2 emissions considerably, as well as reducing the energy consumption by almost 50 percent compared to conventional cooling systems. A study made by Qatar Cool showed, the produced cooling capacity by The PearlThe Edge | 49
business interview | district cooling
Qatar plant in the past four years, saves a tremendous amount of CO2 emissions, in comparison to the conventional cooling systems. According to a scientific study, a mature tree can absorb 10 kg of CO2 per year, translating to Qatar Cool savings of around 64,911 metric tonnes of CO2 in the past four year, which is equivalent to planting 6,491,100 trees. Air-conditioning operators are under increasing pressure, to comply with the Chlorofluorocarbon (CFC) phase out imposed by the Montreal Protocol, on substances that deplete the ozone layer. District cooling systems thus offer an alternative solution by use of less ozone depleting refrigerants like R134a thereby fostering such phase out of CFC.
Bay area, to meet the growing demand for district cooling. At the same time, we are working with many major developments in the country to establish a district cooling system in their projects.
64,911
How does the company strike a balance between higher energy utilisation and reduced energy consumption?
of CO2 saved by Qatar Cool in the past four years.
tonnes
Air conditioning accounts for 70 percent of electricity consumption in the Gulf region. Qatar Cool’s systems use between 40 percent and 60 percent less energy utilised than in conventional cooling systems, which includes, air-cooled chillers, packaged units, ducted split units and window type air conditioners.
Going by the expansion plans of Qatar Cool, right from 2006, what are the business expansion steps that we can expect to see from you in 201415?
Qatar Cool has had significant growth over the past 10 years, we now boast three operative plants, two in the West Bay Area and one on The Pearl-Qatar, as well as the expansion of opening our fourth plant in 2016, which will be situated in the West
“District cooling is 40 percent to 60 percent more energy efficient than conventional systems; it has substantially lower operating costs, and higher operating reliability and availability.” 50 | The Edge
In a district such as The Pearl-Qatar, Qatar Cool saves around 130 MW (mega watt) of connected power. District cooling usually consumes one kW per tonne while air-cooled chillers use 1.7 kW per tonne. With continuous improvement and efforts of highly competent operators, we are now able to produce 1.0 tonne of refrigeration utilising 0.87 kW of power.
Besides West Bay and The Pearl-Qatar, what are the immediate geographical expansion plans? We are in discussions with many major developments in Qatar, we believe that
there are a lot of opportunities that exist now, and more to come soon with the country’s development plans.
While selling to new customers, how do you market the cost advantages of the technology?
District cooling has substantial benefits for the developer/customer, not only cost benefits but environmental and community. District Cooling is 40 percent to 60 percent more energy efficient than conventional systems; it has substantially lower operating costs, and higher operating reliability and availability. District cooling reduces construction cost, air conditioning
district cooling | business interview
Omar Alfardan, chairman of Qatar Cool, says that air conditioning accounts for 70 percent of electricity consumption in the Gulf region.
systems typically constitute up to 10 percent of overall building costs, by outsourcing air-conditioning requirements developers are able to reduce their overall building cost. District cooling reduces maintenance costs, air conditioning systems; especially in large buildings require regular professional maintenance. District cooling increases revenue generating potential, air conditioning systems are usually installed on the roof or in individual offices/apartments. By utilising district cooling, these airconditioning units are no longer required. District cooling also provides financial gain, as electricity is a subsidised commodity, and the impact on its demand is an impact on national resources. Also reducing the demand of natural gas for power generation, in line with the National Gas Conservation Strategy is beneficial to the developer and customer.
Tell us about your health, safety and environment initiatives in a nutshell.
York centrifugal chiller installed in series counter flow with a total capacity of 5000-tonne refrigeration.
“In a district such as The Pearl-Qatar, Qatar Cool saves around 130 MW (mega watts) of connected power.�
Qatar Cool has established cross-functional health and safety committees throughout the company. We have developed and are continually improving policies, procedures and systems that comply with relevant standards. We have provided appropriate Health, Safety and Environmental (HSE) training to all our employees, our contractors and visitors as relevant. The company undertakes regular risk assessments and develops management programmes to address identified risks. We undertake regular measurement and monitoring of applicable environmental parameters to comply with all relevant regulatory requirements. Qatar Cool has been awarded the British Safety Council International Safety Award 2014, for the continued efforts and precautions implemented in all of our plants.
The only main parts would be the chilled water pumps that generate a small amount of heat that could be cooled by stand-by small mounted split units.
What international best practices of district cooling do you follow?
Qatar Cool has been a member of the International District Energy Association (IDEA) for several years, which is a nonprofit trade association that facilitates the exchange of information among district energy professionals on a global level. IDEA is an advocacy for the district energy industry, holding conferences, seminars and outreach programmes for their global members. Since 2008, IDEA has recognised Qatar Cool annually for our systems, districts served and innovative practices. Qatar Cool has been awarded four District Energy Space awards from IDEA for the total number of buildings committed to district energy. Qatar Cool has also been recognised for the innovative practices and for the best system of the year, twice.
Is there any substantial new investment plans in the coming year?
We are building our fourth plant in the West Bay area, to anticipate the projects that support the 2022 World Cup as well as the Qatar National Vision 2030. We are sure that district cooling will be the first choice for the developments and Qatar Cool will be the first choice as the provider.
Given the high summer temperatures in Qatar, how do you ensure the safety of the cooling units, which are located in the basement of many highrise buildings?
With district cooling, the cooling units located in the basements are minimised. In fact the area utilised by district cooling, heat exchangers is less than 75 percent of that of conventional occupied space.
A section of the chiller hall showing the condenser water and chilled water line at Qatar Cool.
The Edge | 51
feature story | national security
Qatar’s Homeland
Security Qatar’s recent increasing efforts to bolster its defence capabilities has presented opportunities for the private sector in logistics and support
national security | feature story
Given its geographical position and diminutive size, since Qatar gained independence in 1971, it has increased the scale of its armed forces from little more than the Royal Guard Regiment, and some scattered units equipped with a few armoured cars and four aircraft, to a combined army, air force and navy of around 11,900. But even with recent investments, Qatar’s forces and capability remain comparatively small, so what end can any militarisation of Qatar serve? And what opportunities, if any, does this all offer to private sector business? International correspondent Simon Watkins offers analysis.
Qatar National Day parade 2013. Through recent arms hardware purchase and conscription, Qatar is seeking to bolster its domestic defence, thereby creating opportunities here for private sector defence contractors. (Image Reuters/Arabian Eye)
feature story | national security
I
n March 2014 the Qatari government invested approximately USD23.89 billion (QAR87 billion) on a range of the latest Main Battle Tanks, AH-64E Apache Longbow and NH90 attack helicopters (among others), and Boeing 737 airborne early warning and control aircraft, together with A330 MRTT air-to-air refuelling aircraft, plus warships, FGM-148 Javelin anti-tank missiles, artillery, A/N FPS-132 Block 5 Early Warning Radar systems, and night-vision goggles. In March the country also made it law that Qatari men aged 18-35 must serve three to four months in its armed forces. The recent spate of purchases and mandatory conscription can be seen as a function of a new found awareness by the Qatari government of the need to lessen Qatar’s security dependence on the interoperability with foreign forces – most notably those of the United States (US) but also historically those of the United Kingdom (UK) and France – that has long-served as a force-multiplier for its own military. But why does Qatar regard this as increasingly important now? After all, for many years, with the US Al Udeid Air Base and Camp As Saliyeh (one of Central Command’s - CENTCOM’s - most important operating installations) in place the tacit, if not overtly stated, understanding was that the US would vouchsafe Qatar’s security from all threats, given its importance both geographically and as a major global energy supplier.
The turning point
Arguably the key turning point for all of the US’ foreign satellites in this regard, says George Friedman, chief executive officer of global intelligence firm Stratfor, in Washington, came in January 2013 when President Barack Obama announced that the US would transfer the primary responsibility for combat operations in Afghanistan to the Afghan military in the coming months. “The United States showed right then that it was not just drawing down its combat commitments, but also that it is moving away from the view that it has the primary responsibility for trying to manage the world on behalf of itself, the Europeans and its other allies,” says Friedman, “and the new world order is that the burden is shifting to those who have immediate interests involved in any given situation.” This notion, he adds, has been underlined most palpably 54 | The Edge
US Secretary of Defense Chuck Hagel and Qatar’s Minister of State for Defence Affairs Hamad bin Ali Al Attiyah sign an arms system agreement at the Pentagon in Arlington, Virginia in July 2014. (Image Reuters/Arabian Eye)
again recently with the initial reluctance of the US to become involved at the ground combat level to counter the rise of the Islamic State in either Syria or Iraq, though it has of course more recently reversed this. But for Qatar and its neighbours, it is not just the seemingly inexorable rise of the Islamic State that poses potentially catastrophic security problems, but also the potential threat from regional superpower in waiting, Iran. “The current greatest threat to Qatari security is still the prospect of Iran gaining a nuclear weapon and using it to achieve strategic dominance in the region and especially in the Gulf, and this, combined with upgrading its offensive missile capacity presents a clear danger to the Qataris,” opines Michael Stephens, deputy director, Royal United Services Institute, in Doha.
Key threats
In this context, then, by far the most important hardware that the Qataris have bought was the March QAR27.5 billion spent on the Patriot air and missile defence system. According to defence contractor and arms manufacturer Raytheon’s Senior Middle East Business Development and Strategy manager, Michael H. Wood, the Patriot, “is the world’s most advanced air and missile defence system that can counter threats from tactical ballistic missiles, cruise missiles and advanced aircraft, and is continuously upgraded to keep ahead of evolving threats”. All the more so, as the efficacy of this
Recent purchases and mandatory conscription can be seen as a function of the need to lessen Qatar’s security dependence on the interoperability with foreign forces.
system is enhanced when it is deployed in tandem with Qatar’s already installed Terminal High Altitude Area Defense (THAAD) system, which is designed to intercept and destroy ballistic missiles, including those carrying weapons of mass destruction. Indeed, given its lack of military manpower – even despite the recent expansion in numbers the combined strength of Qatar’s army units is still barely that of a Western regiment – investment in the very latest military technology remains one of the cornerstones of Qatar’s security strategy going forward. “They have expended a lot of resources in upgrading the technological capabilities of their forces, their early warning infrastructure, and their domestic monitoring capabilities, as this is an important part of maintaining the best defence and security posture vis-a-vis its internal and external threats,” says Stephens, “and this strategy is being continued under the new Emir, Sheikh Tamim bin Hamad Al Thani.” Paul Beaver, security expert and CEO of Defence Communications in the UK agrees. “Border security, surveillance and cyber security are key non-kinetic protection measures which Qatar can take and is starting to take,” he says. “Investment in these ‘invisible’ assets can be just as important as buying hardware.”
Relationships win contracts
For foreign firms across the defence equipment spectrum, then, the current security landscape in Qatar would appear to be rich with potential, and so it may be, but it does not come without the necessity of knowing precisely how to approach the business, and an awareness of possible pitfalls, explains Stephens. “There is a big opportunity for private sector business, but
In March this year, Qatar made military training mandatory for all male citizens between the ages of 18 and 35. (Image Corbis)
QAR
87
billion
The total amount of contracts in orders for military hardware ordered by Qatar in March 2014.
Though officially operated by Qatar’s armed forces, the American airbase at Al Udeid in Qatar is a crucial component in the US Central Command or CENTCOM matrix in the region, for both military and humanitarian purposes as evidenced by this consignment of aid destined for Iraq in August 2014. (Image Reuters/Arabian Eye)
The Edge | 55
feature story | national security
There is undoubtedly an opportunity for companies with good quality and innovative security products to find a market in Qatar. to walk straight into defence and security contracting is difficult, as it is based heavily on reputation in the industry, and familiarity with those making procurement decisions,” he adds. “It is unusual for new companies to suddenly be awarded big defence contracts, as trust must be built up first and a good track record of delivery be built.” This pattern was again seen in March of this year, when the Qatar Emiri Air Force (QEAF) needed to replace most of its helicopters. Although its Sikorsky S-92 VIP helicopters were modern, much of the remainder – including a handful of ageing Lynx maritime helicopters, 12-13 old Sea King/Westland Commando medium naval utility and patrol helicopters, 6 SA330 Puma medium utility helicopters, 6 SA332F Super Pumas, and 12 old SA324G Gazelle light armed scout helicopters – were redundant for front line operational duties. Given its huge resources, the Qataris went both with longstanding relationships, value for money, and optimal technical specifications, choosing the UK’s AgustaWestland AW139s, France’s NH90NFH naval helicopters, and 12 NH90-TTH utility helicopters, and from the US, Sikorsky MH-60R armed sea control helicopters, and MH-60S medium naval utility helicopters. 56 | The Edge
In the crucial matter of enhancing the calibre of its military personnel as well, the advantages of a business coming from one of the long-established triumvirate of traditional powers active in Qatar – the US/ UK/France – is obvious, the process having begun in earnest in May 2006, with a project to create a branch of the école spéciale militaire de Saint-Cyr that was initiated by a direct request from the then Qatari leader HH the Father Emir Hamad bin Khalifa Al Thani to French President Jacques Chirac, and has recently been extended further. And only recently, as a further example, US firm Lockheed Martin was awarded a contract for QAR1.5 billion for air force academy training, although Colonel James L. Weingartner, Defence Attache for the US Embassy, in Doha, characterised this as “a direct commercial sale”. Defence Communications’ Paul Beaver explains that there are now so few state-run companies “that Qatar, like its neighbours, deals through government-to-government contracts which have the private sector as the service or equipment provider”. Nevertheless, highlights RUSI’s Stephens, there is undoubtedly a major opportunity for companies with good quality and innovative security products to find a market in Qatar, over time, although contractors need to be cognisant of their operating environment. “There are still issues to do with transparency of budgets and best practice that plague defence and security expenditure in the Gulf,” he says, “and it is still the case that these areas of public expenditure are typically keep away from public eyes, which leads to accusations of financial irregularity.” Clearly, though, as with any business operating anywhere, contractors need to do their homework and due diligence in Qatar’s
defence sector, to get to know their clients and understand the lay of the land, and to scope out the landscape prior to market entry. “Ultimately, although breaking the market in Qatar is tough, it is not impossible,” adds Stephens. “Private sector companies tend to have the real expertise in security matters,” furthers Beaver, “whilst largest, multinationals from Europe and North America have the weight and economic power to suit the procurement of military hardware. Nation states tend to like to deal with larger companies, often when they are in international partnerships – this gives a feeling of dependability.” A case in point in this regard is the recent award to a firm not in one of the US/UK/France triumvirate of traditional
national security | feature story
New opportunities
“To walk straight into defence and security contracting is difficult, because it is based heavily on reputation in the industry.” – Michael Stephens, RUSI.
A part of Qatar’s defence budget is for boosting its coast guard capabilities. (Image Qatar Ministry of Interior)
powers active in Qatar; Turkish-firm Ares Shipyard’s QAR200 million contract from Qatar’s Coast Guard Service for 17 patrol boats. These would be coordinated with the new helicopters to provide defence against aggression from neighbours whilst also guarding against internal threats, said Qatari Naval Staff Brigadier, Tariq Al Obaidli. Given the short distance from Iran and Iraq to Qatar across the Arabian Gulf, he stresses that maritime defence is also particularly important for Qatar, especially as its territorial waters are home to much of its vast and valuable hydrocarbon resources. “We depend more on the sea than on land, with the challenges including terrorist acts, destruction of pipelines, drug trafficking, piracy, illegal fishing and oil and gas leakage, among others,” said Al Obaidli.
In the broader scheme of things, the opportunities for international defence companies to enter into major new contracts with Qatar Armed Forces in the coming years are likely to increase, as the role that Qatar plays in the wider geopolitical world continues to change, and with it the way in which it plays the ‘Great Game’ of international relations. This is exemplified by two annual upcoming security industry events in Qatar, Milipol in October and the Defence Logistics Forum in November. Up until recently, highlights Meghan O’Sullivan, adjunct senior fellow for Middle East Affairs, Council for Foreign Relations, in Washington, Qatar focused its energies on being a neutral party facilitating diplomatic compromises such as, for example, helping to resolve a Lebanese impasse over the formation of the government in 2008, playing an integral part on the brokering of the 2009 accord between Fatah and Hamas, and even gaining credit from the Sudanese for assisting in a political understanding over Darfur. “Such behaviour was consistent with the obvious needs of a small country in a dangerous and difficult part of the world, and Qatar sought to establish relationships with as many countries and parties as possible, and endeavoured to prove its indispensability without ever taking sides on the region’s many sensitive matters,” says O’Sullivan. However, she adds, since the onset of the Arab Spring, and the fresh threats that this has created for Qatar, the emirate appears to have adopted a more proactive foreign policy, no longer seeming satisfied with balancing its relationships with the greater powers – be they the US, Iran, or Saudi Arabia – but instead seeing a window to steer and shape events, having sensed its comparative strengths. How far Qatar will diverge from its former ‘balancing act’ policy between the West and regional forces under the new Emir HH Sheikh Tamim bin Khalifa Al Thani remains open to debate and what effect this will have on the country’s internal security remains to be seen. But what is clear is that as tensions seem set to continue to escalate in the region, Qatar will need to focus on its own homeland security more than ever before. The Edge | 57
Amal Khoury, who is the events director within the Professional Conference Organiser (PCO) at Qatar MICE Development Institute (QMDI), tells The Edge that her objective was to bring the QMDI PCO to international standards so that they are able to compete internationally.
Abdulla Saleh Al Raisi, CEO of Commercial Bank says, “I remember those days when people were extremely reluctant to use cards which was an indicator of trust deficit, but we went ahead and implemented it.”
“We need to be able to compete internationally.” – Amal Khoury, events director, QMDI. 58 | The Edge
Qatar MICE Development Institute’s Amal Khoury talks about what it takes to create successful events and exhibitions in Doha Amal Khoury is the events director within the Professional Conference Organiser (PCO) at Qatar MICE Development Institute (QMDI), a joint venture partnership with Qatar Foundation. As Qatar attempts to grow its tourism industry, the MICE (meetings, incentives, conferencing, exhibitions) sector is expected to contribute heavily to it. Khoury talks about the importance of having a professional conference organiser to attract high-profile events to the country and create a knock-on effect that will grow Qatar’s visibility in the international MICE industry. by Shehan Mashood
The Edge | 59
business interview | events and conferences
My background within the MICE industry comes from Copenhagen, Denmark. I was congress director
at an international company called International Conference Services, and I worked there for 12 years, actually more than 12 years at this private company. It was focussed on bringing the MICE industry to Denmark. It was the epoch where Denmark was competing with Vienna, and we wanted to put Copenhagen on the map, and I was very active in this. Then I moved to Dubai, where I created a Professional Conference Organisers (PCO) department from scratch within the Dubai World Trade Centre after which I moved to MICE International working on sports events. After that I moved to Qatar, to QMDI where I have been for a year and a half.
As the PCO director, my objective was to bring the QMDI PCO to international standards.
By saying so, it means that we need to be able to compete internationally, not just locally. We need to be able to bring in the biggest association meetings that are happening around the Gulf or in Asia. We need to have the framework for them to come to us, because those associations are the most important targets for the PCO, those are associations that create a snowball effect. One gets the other and on and on. The statutes of any association from around the world demand to have professional conference organisers on their projects, not just any event management company. This is because the role of a PCO is more as an advisor, for the association, you are their legal advisor, their financial advisor, you are their friend, you are their coach, it is not just about logistics. It is about finding partnerships for example in the local market. They might come to you and say, “Where are the interesting doctors, can you help us find them?� So you see, it really is about going into relationships. Whether it is an economic relationship or some other form of business relationship.
Since I arrived, we have diversified.
We have had a lot of projects with Qatar Foundation (QF) and we still have a lot of projects with QF. This year, in May, we had Kahramaa and in November we will have Mowasalat, so we are really expanding and diversifying in a good way because the QF projects are specific and we are building up on that.
Competing on the international stage.
Well the secret for that really is experience, and having a preferred list of suppliers. Fortunately at QMDI we have the procurement department so we rely on them as well to sort out and select suppliers. We do this together with them because we have the experience, and we base our decisions on previous events. We arrange meetings with all the suppliers, and to be honest with you, since I have been here, nothing has gotten out of control. I had heard before arriving in Qatar that they had a problem with transportation when you have huge events. Before I arrived here I heard that they needed help, that companies should be bigger and things like that. But I have never experienced this yet personally, and I hope I will not experience it. But the logistics of course it is an ongoing work in Qatar, definitely.
Sponsorship is a very interesting subject because we are blessed and lucky that we are in the Gulf. If you are in Europe right now or even in the United States (US), 60 | The Edge
In addition to Professional Conference Organisers, QMDI also works in organising events across numerous industry sectors including live events such as sporting fixtures such as the Qatar Masters golf tournament.
events & conferences | business interview
Large-scale Events in Qatar Here are some of the largest events that have been hosted in Qatar in recent years COP18 United Nations Summit QNCC & Doha Exhibition Center The COP 18/CMP8 was held in Qatar in late 2012. The COP is the United Nations’ Conference on climate change that meets annually where more than 195 parties take part and is among one of the most high-profile events Qatar has hosted to date.
16,000
visitors
World Petroleum Congress QNCC
14,650 visitors
cirque du soleil Aspire Zone
15,500 seats
Disney on Ice QNCC
32,000
tickets sold Project Qatar Doha Exhibition Center
40,000 visitors
Qatar Motor Show Doha Exhibition Center The Qatar National Convention Centre pictured above is currently the country’s largest exhibition space with 40,000 sqm. Once completed, the Doha Exhibition and Convention Center will add 29,000 sqm of space. “We need to have the framework for [associations] to come to us, they are the most important targets for the PCO, those are associations that create a snowball effect,” says Khoury of QMDI.
100,000
visitors
Source: Qatar Tourism Authority
The Edge | 61
business interview | events and conferences
“I think we are so lucky that in Qatar there are still companies very interested in sponsoring events.”
it is extremely difficult to get sponsorship of your events. I think we are so lucky that in Qatar there are still companies very interested in sponsoring events. And within the vision of having a PCO with international standards, we are now as QMDI, offering sponsorship services. This means that we go in and we assist clients in developing strategy, putting the targets, all the logistics that are connected to the event, the prospectus and then we sell on their behalf. Actually, selling it is the wrong word, because what we are doing is really creating partnerships with the potential sponsors or exhibitors.
We are creating relationships.
It is not only one event, you see, what we try to provide them is a relationship. And there are lots of levels, but truly we are very lucky in the Gulf compared to other parts of the world. In Europe for example, to get sponsorship is very difficult because events have a very narrow target, they are not going to spend much money on visibility, and at the end of the day sponsors are not very interested, unless it is in the medical field, and even then, it is very difficult.
The pre-event marketing process is the most important.
This is because not only does it boost attendance but also creates visibility of the whole effort for whoever is organising this event. We usually partner with a public relations (PR) company for that because they are the experts. And we partner in such a way that it also becomes a relationship. It is not just a case of, you do to job for me and that Amal Khoury tells The Edge that pre-marekting is it. No, it is more about let us think of an event is one of the most important facets of an event. “We usually partner with a PR and work together. Of course it also company because they are the experts,” she says. depends on the size of the event and the budget because you have different kinds of events. The not-for-profit events do not have the same budget that corporate events do. They are very limited so this is where if we can, if they do not have the budget for a professional PR agency, we advise on how to reach their audience.
Slowly the market will get educated and be able to distinguish between a professional event sponsor from just event management company.
This is why you need a PCO and not any event management company. PCO is the denomination that gives you trust. We are doing this professionally, we are not going and overpromising, we are not selling, we are creating partnerships. It is so easy for a client to be impressed by the talk of somebody that says, “I am going to get you all the sponsors 62 | The Edge
in the world in one week or one month.” Many people do that, but I think the market is getting more educated in the Gulf.
Challenges with exhibitors and sponsors is not unique to Doha, but is common in the Gulf.
It is a new market and it needs a bit more experience. It is education and it our task as the PCO to educate the client, and I think this will also have a snowball effect with time that people will know what to believe and what not to believe.
In the long-term, the viability of conferences depends on the type.
You have the association conferences, you have the corporate conferences, you have the governmental conferences, and you have the semi-governmental conferences. You also have different purposes such as promotional, communications and others. If it is an association event, the decision is not in your hands because association events travel all around the world. They are actually once a year or every two years or every five years, depending on the statute of the association, and they are usually also limited to a continent, either European, or international or Asian. Now we have Pan-Arab ones which are absolutely great. This is something that really excites me a lot because when I was young in Lebanon, we did not have this opportunity, it did not exist. This is what QF is focused on, giving the opportunity for academia to participate in conferences instead of going to Europe or the US. It is happening in the Arab world which is a great thing. The governmental ones, what they are good at is bringing in experts from abroad to certain conferences. And of course it can be a repeat business if it is based on relationships with the delegates. Let me give you an example, the Annual Research Forum that we do for QF, we received over 800 abstracts this year, in Europe this is considered a huge success. I mean those are researchers, scientists coming to Qatar, sending their research to be evaluated and then have the opportunity to present their research either by poster or by oral presentation. In Europe if you say I had a conference where I received 700 abstracts, this is a great success.
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EDUCATION The Edge speaks with leading representatives of Qatar’s fastgrowing education sector about the opportunities and challenges being created in the sector as the country’s population continues to rise at a rapid rate.
Special Section: Education Inside:
66 Chartered Institute of Management Accountants 67 Qatar University College of Pharmacy 70 Qatar Finance and Business Academy 69 Sherborne Qatar 72 Weill Cornell Medical College - Qatar The Edge | 65
education | cima
CIMA ensures students
gain skills businesses need The Chartered Institute of Management Accountants (CIMA) was founded in 1919 and is today the world’s leading and largest professional body of management accountants. It has more than 218,000 members and students operating in 177 countries. In conversation with The Edge, Geetu Ahuja, head of Gulf Cooperation Council, CIMA talks about CIMA’s qualifications and how these help in employability. Tell us about CIMA and the qualifications you provide?
CIMA established its GCC operations in 2008, and today is based in the Dubai International Financial Centre (DIFC). CIMA provides aspiring business and finance professionals the most relevant qualification, combining accounting, finance and management skills. CIMA trained professionals work across varied industries including fast moving consumer goods, oil and gas, retail, aviation, commerce, management consultancies and banks. Anyone can study CIMA, the only requirements are competence in mathematics and the English language. The CIMA qualification consists of four levels: Certificate (or entry level that provides students an introduction and foundation to the CIMA qualification); Operational (the first level of the professional qualification whereby on completion students are
“While 75 million young people across the world cannot find work, many businesses have vacancies they cannot fill.” 66 | The Edge
awarded the CIMA Diploma in Management Accounting); Management (which trains students to manage projects, conduct detailed analysis and understand product pricing and decision-making. On completion of this level, students are awarded the CIMA Advanced Diploma in Management Accounting); Strategic (which focuses on how to formulate financial strategy and manage strategic relationships while managing risk, using the competencies gained at operational and management levels). CIMA has formed a joint venture with the American Institute of CPAs (AICPA) to establish the Chartered Global Management Accountant (CGMA) designation.
How do you see CIMA helping bridge the gap between education and employability? While 75 million young people across the world cannot find work, many businesses have vacancies they cannot fill. When it comes to the finance sector, professionals are not just expected to have the technical skills to produce good accounting information, but are also required to apply financial disciplines in business management, to influence people and lead within the organisation. Employability is of critical importance to students and CIMA is determined to ensure students gain the skills businesses need now and in the future. Working with stakeholders across the world, CIMA conducted comprehensive research, over the past 24 months, into the role of management
Geetu Ahuja, head of GCC, CIMA says, “CIMA is the only international accountancy body with a sole focus on business, giving students more than just accounting knowledge.”
accountants, the skills employers expect of them, and how these are changing. This has allowed CIMA to develop a competency framework for the future. CIMA works closely with employers; and sponsors leading-edge research, constantly updating its qualification, professional experience requirements and continuing professional development to ensure it remains the employers’ choice when recruiting.
How can qualifications such as CIMA help in increasing professional skills and job prospects?
In today’s business environment professionals are expected to have a thorough understanding of the organisation, its strategic vision and insights on how the company can set itself apart in a competitive landscape. Having the right job skills and training not only helps employees handle work challenges with ease but also allows them to stay ahead and contribute more efficiently to an organisation’s growth. CIMA is the only international accountancy body with a sole focus on business, giving students more than just accounting knowledge. One of the core capabilities that CIMA students and members acquire is skills and competencies to provide strategic insights to the organisation. Students are not only financially qualified but also professionally trained in business management, capable of advising on business strategy and risk management.
college of pharmacy | education
Conducting research
in an evolving country is critical Qatar’s growing need for medication experts led to the opening of the Qatar University College of Pharmacy in 2008. Talking to The Edge, Dr. Mohammad Diab, assistant dean of Outreach and Engagement, College of Pharmacy, Qatar University, discusses the challenges facing Qatari educators and how the government cap on fees aids those who cannot afford a quality education. Can you tell us about the College of Pharmacy, Qatar University? Why was it set up?
Qatar recently opened new hospitals like Al Wakra and has others such as Sidra Medical and Research Center opening in the near future to keep up with the population growth and society demands. The drive for locally-trained pharmacists is a part of the human development pillar of the Qatar National Vision 2030 and its quest to establish advanced educational and health systems. Our pharmacy students spend 24 weeks in structured rotations at various pharmacy sites in Qatar to learn how to best care for patients and continue to advance patient outcomes.
What are some of the challenges you encounter in Qatar as educators?
It is a challenge to juggle teaching and research. Publishing our research is an important requirement in an academic environment. Conducting research in an evolving country such as Qatar is critical to learning more about the health of the society. We do not want to rely on data from the Middle East or others. We must continue to advance our scientific knowledge of the Qatari people. We are also challenged to stay up to date on the latest advancements in technology used in our classrooms. Professors at our college use lecture capture software for all lectures to allow students access 24/7 on and off campus to review lectures. We use the latest version of Blackboard, a content management system and a virtual hospital
with 1000 virtual patients for making cases. We have to be adaptable to change and advancement.
Do you feel there is a lack of capacity and quality education in Qatar? If so, does this create opportunities in the sector?
From our perspective there is definitely quality education available in Qatar. We have recruited the brightest international faculty many educated in Canada and the United States. We have accreditation from CCAPP Canada for our BSc and PharmD programmes. We have built a CanadianAccredited programme and achieved the first and only fully accredited BSc and Doctor of Pharmacy (PharmD) programme set up outside of Canada. Our Continuing Pharmacy Professional Development programme is also accredited by ACPE, which is an American organisation.
What are your thoughts on government limitations on fees?
We are pleased that the government supports fee capping to ensure that all students in Qatar have the financial means to further their education. Obtaining a university degree will help make a student employable, especially in a country such as Qatar that has such aggressive plans for the future. Students from all economic levels have a right to have access education and we thank the government for such an important initiative. Qatar has invested heavily in its people and access to education is an important component.
“The drive for locally-trained pharmacists is a part of the human development pillar of the Qatar National Vision 2030 and its quest to establish advanced educational and health systems.”
Dr. Mohammad Diab, assistant dean of Outreach and Engagement, College of Pharmacy, Qatar University, says, “We are pleased that the government supports fee capping to ensure that all students in Qatar have the financial means to further their education.”
The Edge | 67
sector name education | qfba | banner heading
Kawader instiLls job-specific skills for the financial sector
Dr. Abdulaziz Al Horr, CEO, QFBA, says, “Kawader this year is a slightly more compact programme spanning five months rather than seven months.”
The Kawader programme is an innovative learning initiative by Qatar Financial Centre Authority (QFCA) and Qatar Finance and Business Academy (QFBA), who believe in investing in the future of potential business leaders and decision makers in Qatar’s emerging industry of financial services sector. In conversation with The Edge, Dr. Abdulaziz Al Horr, CEO, QFBA, talks about what the programme will achieve for Qatar. Can you tell us about QFBA and the Kawader programme?
The programme endeavours to equip participants with internationally recognised professional certifications along with enhanced personal development skills which will drive their growth in the industry. The ‘Kawader’ programme includes introductory sessions on banking, insurance, asset management and capital markets. There is a session focused on financial English to enhance the understanding of terminology used in the finance industry. Sessions on personal development and corporate social responsibility are aimed at enhancing professional behaviour and attitude in the work environment. A range of internationally recognised certifications in banking, insurance, and Islamic finance and capital markets are offered to the participants and they specialise in one area based on their interest and aptitude. Further, in order to supplement the training sessions, participants are to go through experiential learning with our partner firms wherein they get a feel of a live working environment in the financial services sector.
This is the second year the programme is running, is anything being done differently this year?
In its second run this year, the key elements of Kawader – the specialisation qualifications, the English qualification, corporate social responsibility, introductions to various sectors, remain intact. However, Kawader this 68 | The Edge
year is a slightly more compact programme spanning five months rather than seven months. The Personal Development module has been enhanced by benchmarking the learning to the International Leadership and Management (ILM) certification and we have also included more overseas internship opportunities this year. Additionally, we are exploring inspirational value adds such as ‘Coffee with CEO’ sessions interspersed throughout the programme.
Can you tell us how many people completed the programme last year? How many do you expect this year?
Kawader 2013 to 2014 helped 14 young talented Qataris to become business leaders. The alumni currently hold managerial roles in the industry, wherein they are already bringing in positive changes in their professional environments. Success of the programme in its first year led to an increased demand by the financial sector and this year QFBA has enrolled 22 young Qataris who are either in their fourth year of university or are fresh graduates.
What are some of the specific areas of development the Kawader programme focusses on?
This programme is designed to meet the increasing demand from both local and international financial services institutions for a pool of talented ‘Qatari Nationals’ in the financial services sector.
We believe that targeting participants at their fourth year or at their entry level of the job, will not only generate greater interest towards a career in financial services, but also provide them with a good foundation for developing skills in the area. The overall programme structure includes training towards specific areas in the financial sector such as banking, Islamic finance, insurance, capital markets, asset management, introductory qualifications complimented by on the job experience through internships. It also includes financial English as well as personal development training and qualifications.
“A range of [globally] recognised certifications in banking, insurance, and Islamic finance and capital markets are offered to the participants.”
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sector name education | sherborne | banner heading qatar
Establishing a new school is an exciting,
challenging prospect
Sherborne Qatar (SQ) is the only overseas school developed by Sherborne School, a renowned historic English Independent School. Michael Weston, senior headmaster, SQ talks to The Edge about the challenges in the sector and what the school wants to achieve in the near future. Can you tell us about Sherborne Qatar, why was it set up?
SQ is the only British school in Qatar with such a rich heritage. It was set up as a not-forprofit Preparatory and Senior School at the invitation of the Supreme Education Council within its Outstanding Schools initiative. We bring the best of British education and ethos to Doha, teaching and guiding boys and girls from the British community, from the Qatari community and other nations too. Our age range is from pre-school to sixth form. All of our teachers are fully qualified and have the relevant experience and knowledge to develop the academic, artistic, musical, dramatic, sporting and still-hidden talents of our pupils. Sherborne Qatar belongs to the prestigious Sharaka Holdings. A dominant entity in the State of Qatar, Sharaka Holdings has a lineage of over 40 years. “Sharaka” in Arabic means “partnership”. Partnerships form the core ethos of the company.
What are some of the challenges you encounter in Qatar as educators?
Establishing a new school is an exciting and challenging prospect from which we have all learned a lot. We look positively upon opportunities to work in collaboration with the SEC to enable us all to gain a better understanding of the local expectations and benefit from the wealth of experience that we offer. All schools are doing their best, for example, to meet the demand for places and working on such matters with support from many within Doha is a priority for us. 70 | The Edge
Michael Weston, senior headmaster, SQ, “It is understandable that fees must come under scrutiny and recent changes to the way in which increases are handled have made for a more transparent, fair process.”
Do you feel there is a lack of capacity and quality education in Qatar? And if so, does this create opportunities in the sector?
There are good schools in Qatar which, like SQ, have been accredited by the United Kingdom (UK) Department for Education as British Schools Overseas, because they meet the same standards as those required in the UK. It is clear that over the next few years there will be a lot of people coming to Doha to live and work. I am sure there will be openings for schools across the age range and SQ is going to be at the forefront of those developments.
What are your thoughts on government limitations on fees, what impact does this have on your business? It is understandable that fees must come
“All schools are doing their best to meet the demand for places with support from many within Doha, it is a priority for us.” under scrutiny and recent changes to the way in which increases are handled have made for a more transparent, fair process. All enterprises must live within their means, delivering the best service that they can. SQ is no different and we are continually further improving our performance, providing real educational value for the cost of the fees.
What are your future plans for Sherborne in Qatar?
SQ is committed to a long-term presence in Doha. Next year, we will be complete in terms of our full age range. Our intention then is to continue to build on our already strong academic reputation, expand further, strengthen our active ties with Sherborne School, and establish our permanent home as soon as possible. I believe that in the Preparatory School and in the Senior School we are creating unique schools of which we can all be proud.
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sector name education | wcmc-q | banner heading
A global medical programme training physicians to treat people from around the world Dr. Javaid I. Sheikh, Dean of Weill Cornell Medical College in Qatar (WCMC-Q) says, “We have cutting-edge research programmes investigating mechanisms of obesity and its related illnesses.”
Tell us about yourself – your Qatar stint in particular and the period before that.
My medical specialty is neuropsychiatry but for many years I have also been involved in global medical education. Prior to joining WCMC-Q in 2007 I served as associate dean and professor of psychiatry and Behavioral Sciences at Stanford University School of Medicine in California. When I was offered the position for vice dean for research and professor of Psychiatry at WCMC-Q, though, the opportunity to be part of a project that was establishing a medical college and research programme from nothing was too great to pass up and I moved to Qatar. It is a decision I have never regretted. I was honoured to be made Dean of the college in 2010 and it has been tremendously satisfying to help lead the college into the position it is today.
If you were to talk about the specifics of the healthcare challenges in Qatar, what would you say?
Undoubtedly the greatest healthcare challenges facing Qatar today are the same as in most of the region and the United States – obesity, diabetes, and heart disease. The good news is that if people are willing to change their lifestyles, namely their diet and physical activity, these healthcare challenges can be dealt with very effectively. At WCMC-Q we currently have a community health campaign - Sahtak Awalan: Your Health First – that is educating the population about the benefits of exercise and eating a balanced diet, with a particular focus on school children as we believe that healthy behaviours need to be cultivated early in life. We also have cutting-edge research programmes investigating mechanisms of obesity 72 | The Edge
In conversation with The Edge, Dr. Javaid I. Sheikh, dean of Weill Cornell Medical College in Qatar (WCMC-Q) talks about the healthcare challenges in Qatar and its partnership with Hamad Medical Corporation and Sidra.
and its related illnesses. At the end of the day, people have to take responsibility for their own health and at the moment too many fail to exercise regularly and rely on processed, high-fat foods. We at WCMC-Q are committed to health promotion and improving quality of life of Qatari population.
And how much of that is reflected in the way the medical programme is designed in WCMC-Q?
The medical programme at WCMC-Q is designed as a global programme and not for a specific location. As physicians we have to be able to treat all people and all illnesses anywhere in the world. A medical programme, wherever it is in the world, must provide a basic grounding in the normal functioning and diseases of the human body and mind. When students graduate, however, they can choose to specialise.
Tell us about WCMC-Q’s collaboration with Hamad Medical Corporation (HMC) and Sidra?
Our partnerships with HMC and Sidra – along with other facilities such as Aspetar are essential for quality training of our medical students and for our faculty to stay involved in clinical care delivery and research. Since 2006, our third and fourth year students have joined HMC teams for their clinical clerkships and some electives and HMC physicians who have been appointed to WCMC-Q’s faculty have made important contributions to our students’ education. Many of our faculty are also involved clinically at HMC and there have been numerous biomedical research collaborations between WCMC-Q, HMC and WCMC in New York. Sidra Medical and Research Center will have a similar and parallel role in the area of women and children’s health when it opens its doors.
“At the end of the day, people have to take responsibility for their own health.”
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Inside the minds of leading business figures
business insight Local partners share GEW’s passion for supporting entrepreneurship > 78
Renewable energy costlier primarily due to low domestic energy pricing > 76
Global Entrepreneurship Week (GEW) is the world’s largest celebration of innovators. On the anvil of this year’s GEW, Elaine Gold, director, Organisation and Strategy, Silatech talks about the event partners and what they hope to achieve in November this year.
In an exclusive conversation with The Edge, Amr Belal, managing partner of the green division, Innovations Unlimited ME (IUME) and Markus Jordan, managing partner of the events division, IUME talk about the business divisions of
the multidisciplinary company, and the future of the renewable energy business in Qatar.
76
Innovations Unlimited ME is one of the only few companies here in Doha with a fireworks licence and together with partners they have produced some of the most impressive fireworks displays in the region, including the Qatar National Day fireworks display 2013 (pictured here) and Dubai’s new year 2013 fireworks celebration, which set a new world record as the largest fireworks display ever.
The Edge | 75
business insight | sustainability
green lighting
Renewable energy costlier primarily due to low domestic energy pricing
Markus Jordan, managing partner of the events division, IUME, said “With our motto ‘You dream it. We do it’ in mind, we create for every event a unique atmosphere that leaves memorable impressions for the guests.”
In an exclusive conversation with The Edge, Amr Belal, managing partner of the green division, Innovations Unlimited ME (IUME) and Markus Jordan, managing partner of the events division, IUME talk about the business divisions of the multidisciplinary company, and the future of the renewable energy business in the Qatar and the greater Gulf Cooperation Council (GCC). Tell us about the main business divisions of IUME. Amr Belal: IUME is a multidisciplinary company dedicated to bringing the latest services and technologies in the fields of events management, renewable energy solutions, advertising and lighting. We operate two distinct business divisions that focus on these areas; the events division and the green division. The company was founded in 2009 with headquarters in Doha and later a branch office in Bahrain and a representative team in Egypt. Since then, we have made big strides in advancing our activity and servicing some of the major organisations in our markets. Both of our business divisions are now established as leaders in their area of expertise. What is the focus of your events division? Markus Jordan: IUME is one of the leading event management agencies headquartered in Doha, offering turnkey solutions to our clients. Every event is exclusive and tailored exactly to our customers needs. With our 76 | The Edge
motto “You dream it. We do it” in mind we create for every event a unique atmosphere that leaves memorable impressions for the guests. IUME has an experienced in-house team, which has worked on numerous high-profile events such as the Asian Football Cup 2011, UNESCO World Heritage Conference, Qatar National Day and the World Swimming Cup in Doha. Our team supports the clients for the entire life cycle of each event starting from its creation to the design, the build and the delivery. We offer seamless turnkey solutions resulting in an absolutely carefree preparation process. Being the owner of a large pool of event technologies, warehoused in Qatar we have the latest state-of-the-art equipment for lighting, projections and sound on the ground. This allows us to react very quickly and efficiently to any requirements of our clients. What kind of events do you focus on? Markus Jordan: We offer a wide range of event solutions ranging from conferences to gala dinners and sports presentations
just to mention a few. With Doha being one of the most quickly developing cities in the world we have specialised in building inaugurations. Music synchronised fireworks or special effects can turn the inauguration moment into a unique experience. IUME is one of the few companies here in Doha with a fireworks licence and together with our partner we have produced some of the most impressive fireworks displays in the region, including the Qatar National Day fireworks display 2013 and Dubai’s new year 2013 fireworks celebration, which set a new world record in the Guinness Book of World Records as the largest fireworks display ever. How big is your renewable energy division? Amr Belal: What we call our green division is our business unit specialising in renewable energy solutions. We take pride in contributing to the sustainability industry, which is a key pillar of government strategies for the future. Over the past few years, we have
sustainability | business insight
Amr Belal, managing partner of the green division, Innovations Unlimited ME (IUME) added, “Our longterm business plan involves leveraging our success to date into growing across the region to become the partner of choice.”
established ourselves as a leading company in Qatar having been awarded major renewable energy tenders; with 12 active projects in the country, we are diligently working on a number of other opportunities at a regional level. A major installation that we are currently undertaking is Msheireb Downtown, the regeneration of the heart of Doha, set to be an unprecedented cluster of sustainable buildings. The various phases of the projects that IUME is involved in make up over 1.5 MW of generated power capacity from photovoltaic installations. Another project that we will be commissioning very soon is the Kahramaa Awareness Park, one of Qatar’s green benchmarks and futuristic education venues. Currently under construction with expected opening by year end, the park will receive public visitors to illustrate the different aspects of sustainable living. What business prospects do you see for your renewable energy division in Qatar? Amr Belal: Increasing global concerns about environmental degradation and energy inefficiency have translated into a prospering sustainability industry in recent years, although fossil fuel depletion also remains a significant driver. Qatar is no exception, with sustainable development a key pillar of its 2030 National Vision; add to that the country’s aim to host an ecological 2022 World Cup and you have got the ideal environment for a thriving market. The country’s investments in infrastructure development taking up 40 percent of the government budget through 2016, are planned to achieve thriving outcomes, and clearly advocating sustainable practices, namely green building standards. Many significant programmes of work are already in the construction stage and increasingly showcasing sustainable designs. Al Sadd stadium is the first sports facility to adopt a renewable energy source, with the roof-mounted solar system we implement at its multipurpose hall.
What is the cost impact of solutions that you offer under your renewable energy division? Amr Belal: While switching to renewable energy has undeniable environmental benefits, supports the energy diversification goals of a country and helps achieve set generation targets, it has been questioned whether renewables offer the Gulf Cooperation Council (GCC) region any tangible economic advantage It is important to mark the difference between government-led deployment of renewables and private investments in individual systems. While at the private user level in the GCC, renewable energy still boasts a higher cost, primarily due to the low domestic energy pricing, in the form of government subsidies, governments look at the larger economic impact of energy diversification. On the one hand, surging energy demand in the GCC will continue to divert the larger part of local production from the high revenuegenerating export market, more so in the absence of alternatives to fossil fuels. On the other hand, the continuing rise in oil market prices and production prices, compared to the shrinking costs of renewable energy technologies, will increasingly make the latter more attractive. What is the growth plans for IUME in 2015? Amr Belal: We have been privileged with the position we achieved to date, in winning flagship projects under both of our business divisions. On the green division side, these projects stand to redefine sustainability, while our events division has delivered some unique legacies such as the UNESCO World Heritage opening and closing ceremony this past year. Our long-term business plan involves leveraging our success to date into growing across the region to become the partner of choice.
“Switching to renewable energy has undeniable environmental benefits, it supports the energy diversification goals of a country and helps achieve set generation targets.” – Amr Belal, IUME. The Edge | 77
business insight | entrepreneurship
mentorship
GEW Qatar privileged to have a network of local partners sharing passion for supporting entrepreneurship Global Entrepreneurship Week (GEW) is the world’s largest celebration of the innovators and job creators who launch startups that bring ideas to life, drive economic growth and expand human welfare. On the anvil of this year’s GEW, Elaine Gold, director, Organisation and Strategy, Silatech talks about the event partners and what they hope to achieve this year. Tell us about GEW Qatar. During one week each November, GEW inspires people everywhere through local, national and global activities designed to help them explore their potential as selfstarters and innovators. These activities, from large-scale competitions and events to intimate networking gatherings, connect participants to potential collaborators, mentors and even investors – introducing them to new possibilities and exciting opportunities. 78 | The Edge
In 2013 November, GEW Qatar ran a programme for a week with 33 participating organisations, 62 events and 3600 participants involved in activities over the week. We were privileged to have the support of a network of local partners who share our passion for supporting entrepreneurship, and to bring attention to the vital role that entrepreneurship plays in the region’s economic development. The founding members of the ‘GEW Board’, chaired by Silatech, includes: Bedaya Center, Enterprise Qatar, Shell Qatar, Entrepreneurs’ Organization (EO), ICT Qatar, Qatar Chamber, Qatar Development Bank, Qatar Science and Technology Park, How Women Work and The Youth Company. How, in your view, can the spirit of entrepreneurship be learnt from global peers, in the context of the fact that each country and its cultural contexts are different? The Global Community of GEW countries is a very close community even though there are now 150 countries participating. As GEW Qatar, we regularly connect and share ideas with other host organisations from the MENA region, and we can learn much from countries who have similar cultural values. What we find when we share experiences
is that the issues facing entrepreneurs are more similar than we first might think: finding funds for start-ups, finding an effective mentor, and finding support to scale-up. What role do the partners play in GEW? There are two main categories, the first is the membership of our advisory board the Board meets regularly throughout the year in order to review the success of the week, and plan for improvements. We divide
“GEW inspires people through local, national and global activities designed to help them explore their potential as self-starters and innovators.”
entrepreneurship | business insight
In November 2013, GEW Qatar ran a programme for a week with 33 participating organisations, 62 events and 3600 participants involved in activities over the week.” “What we find when we share experiences is that the issues facing entrepreneurs are more similar than we first might think: finding funds for start-ups, finding an effective mentor, and finding support to scale-up.” Elaine Gold, director, Organisation and Strategy Silatech told The Edge.
into two sub-groups, one to take care of the marketing and public relations and the other to focus on the programme of activities and ensure that there is no duplication as well as ensure that the workshops will meet the needs of the diverse audience in Qatar for GEW. This can range from youth interested in knowing more about entrepreneurship, to entrepreneurs at the idea or start-up phase, to larger organisations and small and medium enterprises and policy makers. The second category is a wider group of organisations and individuals who give their services and expertise for free in order to deliver a workshop or organise an event. Given the fact that career choices are still influenced by what elders think, how do you think events such as GEW can make a difference? GEW does much to raise awareness about entrepreneurship and establish it as a career option for the youth. The Bedaya and Shell Business Challenge, which has run each year leading up to GEW, has successfully taken the excitement of entrepreneurship to all the local universities in Qatar and many of the high schools. GEW also gives an opportunity for successful local entrepreneurs to be given prominence, who can inspire and act as role models, reassuring parents about entrepreneurship as a valid option for younger family members. Many entrepreneurs may not like routine functions such as accounting. How do you help such entrepreneurs? Many individuals are not comfortable with dealing with the financial aspects of starting up a business, but it is an essential element and although this can be delegated to a member of the team, every business owner has to understand the basics. There are many programmes, which can help to take the fear out of accounting, again, organisations such as Bedaya, 7AyakHub, and Qatar Business Incubation Centre (QBIC) can help. These organisations will also help you find a mentor who can give one to one support as needed. What role do you think crowdfunding can play in the growth of an entrepreneurship culture? Over the past few years, crowdfunding has been a global phenomenon and has had a tremendous impact on fostering and democratising entrepreneurship at all levels of society. Within the
Middle East and North Africa region, the Silatech sponsored Kiva Arab Youth initiative has raised close to USD6 million (QAR21.84 million) in a little over two years that has been crowdfunded from over 120,000 users across to globe to support micro-entrepreneurs. This initiative has helped finance 3900 businesses across the region and supported the creation of more than 3000 new jobs. The sheer amount of support and success of this initiative has prompted Silatech to develop the Narwi platform, the first online microgiving platform created by Arabs for Arabs. With Narwi’s impending launch, there is positive momentum in expanding and scaling entrepreneurship activity in this region Tell us some achievements that GEW has met in the past years. 2012 was the first year that Qatar was involved in GEW. We held 30 events and had over 1000 participants; last year we held 62 events and had over 3600 attendees. Qatar was recognised internationally for its contribution to GEW by being nominated in four categories out of a total of six GEW Awards. In 2013 we held an event where new startups could present their business to a panel of potential investors. As well as those who were awarded funds from the panel, a number of businesses who pitched their ideas have gone on to get funding through the contacts they made at the event. What are you looking forward to achieving this year? We are delighted to announce that we have our first patron for GEW this year, HE Sheikh Hamad bin Jassim bin Mohammed Al Thani, Minister of Economy and Trade. We are extremely grateful to EQ and Shell Qatar for their continued sponsorship of GEW Qatar, however we need more corporate sponsors who can help us to fund more events, and a gala dinner this year, so that we can raise the profile even higher of the work GEW can do to enhance the entrepreneurship ecosystem. We have an increased number of activities planned, and some high quality speakers. Also, this year sees the launch of International Women’s Entrepreneurship Day on November 19, and we will be profiling a number of Qatar’s Women Entrepreneurs in the lead up to this day, Qatar Chamber will be hosting an evening event which will include a link to the International celebrations in New York, where Qatar will be represented by Aysha Al Mudahka, CEO of QBIC. So, lots to look forward to. The Edge | 79
product & reviews
Reviews
Chevrolet Tahoe
T
he 2015 Tahoe by Chevrolet is the latest SUV of the brand’s best selling model in Doha. The new styling advances made in the Tahoe contribute to a quieter ride. This is thanks to a direct-injected EcoTec3 5.3 litre V8 which features new technologies, including cylinder deactivation, continuously variable valve timing and an advanced combustion system, designed to make the most of power, torque and efficiency across a broad range of operating conditions. The second-
and third-row seats of the SUV fold flat for convenience and create more space – there is also an option available for a power-folding feature. The new Tahoe has approximately two inches more legroom for second-row passengers. The 2015 model is packed with technology with six USB ports and six power outlets – including a 110-volt three-prong outlet – to support electronic devices of all kinds (this means up to 12 charging locations). There is also an eightinch colour touch screen radio with next-
generation MyLink connectivity and a rear-seat entertainment system with a BluRay DVD player. The interior also includes a ‘conversation mirror’ in the overhead console that provides a panoramic view of the rear seats. The Tahoe also includes radar, and standard and available features include forward collision alert, front park assist, lane departure warning, lane change assist, rear cross traffic alert and adaptive cruise control. The starting price for the Tahoe is QAR179,300.
The Edge | 81
products & reviews
Read it:
Brick By Brick - How Lego rewrote the rules of innovation There is probably nobody reading this review born after 1950 that has not heard of the Lego brand or indeed played with its definitive blocks as a child. And those who are currently parents of young children may even currently be revisiting their own childhoods in building all manner of imaginative constructions with their offspring, such is the perennial appeal of Lego. The company itself is widely regarded as one of the global benchmarks in branding and customer service, having been declared over the years one of the world’s most recognisable brands and respected companies, among other accolades. So here then is the history of this truly amazing company in one book, which should be of interest to entrepreneurs, company managers and anyone who has ever handled its colourful toy blocks. There is probably a lot you do not know about Lego. The company’s roots are in wooden toy manufacturing, which began in the workshop of carpenter Ole Kirk Christensen in Billund, Denmark in 1932 (Lego being an abbreviation of a Danish phrase that means “play well”). But it was not until it began manufacturing its distinctive plastic bricks in 1949 that the essence of the Lego company truly began. The book in fact starts in Billund, where Lego’s headquarters remain despite the fact that it is a remote, cold outpost on the Danish
Jutland peninsula where there is the original Legoland and one in four of its residents owe their living to the company. It is also here that the company’s founding principles, which endure as much as its founder’s legacy, were formed. These include the principle idea that a set of values themselves are vital and Christiansen’s mantra “only the best is good enough”, Lego’s second principle that ‘experimentation begets innovation’ and its third, that Lego is ‘not a product but a system.’ Other principles, which author David Robertson, who writes in a concise, accessible style, unpacks like a kid with a new box of Lego bricks. These include having a tight focus, ‘First Stores, Then the Kids’ alludes to one of the company’s most important facets, its legendary customer service and respect for its primary clients, the children of the world. The remainder of the book is an engaging roller coaster ride through the fortunes of this incredible company’s history, from its meteoric rise to success from the patenting of its brick system in 1958 (an innovation pushed by Christiansen’s son Godtfred), the introduction of the toddler version Duplo and other innovations and highs, to its little known but near-collapse in 2003. Indeed it is how Lego avoided the brink of bankruptcy and embraced new practices, technology and product lines to reinvent itself that is probably the most interesting aspect of this book for business people. But as we said, it is also arguably a fascinating historical reference for anyone who has ever played with this enduring plastic toy. Available at Virgin Megastores in Doha.
Read it:
Office Politics - How to thrive in a world of lying, backstabbing and dirty tricks This book was originally selected for The Edge book reviews on the premise it might be humorous. After all, who has not encountered office politics, which in the Gulf is of course exacerbated by the cultural differences of dozens of nationalities which one often has to find the funny side of in order to survive? But as The Edge began to read through Office Politics, the realisation began to dawn that the author of this book Oliver James, is actually taking a serious approach to the topic. Office politics, he argues, have the power to break a career, and if played correctly, make one. 82 | The Edge
Indeed, this is partly the underlying reason for this book: that learning to play the Machiavellian social games of the workplace if not well, then at least efficiently, by being able to recognise the landscape of the battlefield it presents, can only serve one’s ascent up the corporate ladder well. The first thing James does then is identify what he calls ‘Psychopathy, Machiavellianism and Narcissism’. In reading further, we come to recognise the kind of selfish, self-serving, ruthless people that he further terms the ‘Dark Triad’. These are the individuals most likely to make the workplace unpleasant and can include owners, managers and even colleagues. What follows is a smooth, interesting read as James further breaks down the twisted psychology of such individuals and then offers solutions as to how to deal with them, which would in fact be quite funny if it was not such as sad reality of the workplace. Available at Virgin Megastores in Doha.
products & reviews
Canon Maxify
Canon’s new Maxify inkjet printer range consists of four multi-functional devices (MFDs), the as well as one single-function printer. The Maxify range has been designed to handle the high print volumes required by small and home offices. In addition, the Maxify MB5340 features a two-sided scan functionality, which allows both sides of the document to be scanned simultaneously. Two sensors scan both the front and back of the page as it moves through the printer, saving valuable time when large batches of documents need to be processed in one go. Wi-Fi connectivity allows the printers to deliver wireless printing from mobile devices. The Maxify range also offers printing from and scanning to, cloud storage providers such as Evernote, Dropbox, OneDrive and Google Drive,
Vertu V Headphone The Vertu Headphones are from a single billet of lightweight aircraft-grade aluminium, making the headphones extremely strong and durable. The V Headphones are tuned and rigorously tested in collaboration with Bang & Olufsen. The advanced speaker drivers of the Vertu headphones are customdesigned to sit parallel to the ear. This angle, combined with the ported construction, enhances the quality of audio throughout the frequency range, producing a natural sound character that delivers crisp details, a deep bass extension and a wide sound stage. The detachable cushions are formed from high-quality memory foam and encased in hand stitched, British-sourced lamb’s leather for a custom fit. The cushions mould to the user’s contours for increased comfort and, are coupled with an exceptionally low clamp force to create a comfortable fit.
App Reviews SwiftKey Third-party keyboards are old news on the Android platform, however with the latest iOS8 now supporting keyboards, it might be time to switch out your regular keyboard on the iPhone. SwiftKey is a learning keyboard that analyses the words you use often and the way you type to model its prediction engine. Keep in mind the app transfers over the Internet what you type in messages and emails to monitor your habits for better performance.
1Password If you are tired of keeping track of dozens of usernames and passwords for all the services you sign up online, use this app to create complicated passwords and keep them in a single secure location, unlocked by one master password. It runs on Windows, Mac, iOS and Android, so you can access the service on any of your devices. The app can now also be unlocked with Apple’s touch ID interface.
Apple iPhone 6
AJ+
Apple’s new iPhone 6 is the smaller 4.7-inch version of its two new releases. The iPhone 6 is also thinner than its predecessors. Yet it includes Apple’s new A8 chip with secondgeneration 64-bit desktop-class architecture for increased performance and power efficiency. The 4.7-inch Retina HD display, provides 38 percent more viewing area than iPhone 5s. The new display also creates higher contrast for deeper blacks and shows more accurate colours at wider viewing angles. It also has faster LTE download speeds of up to 150 Mbps, and also supports high-quality voice calls over LTE as well as WiFi calling.
Al Jazeera’s new digital only channel launched a new app that organises stories as stacks of cards covering numerous topics and create explainers on current events. The content is made up of short videos, infographics, polls, comments and quizzes. Targeted at a younger generation, the news content is formatted to be consumed in small portions sort of like a social media feed.
The Edge | 83
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