contents March 2015
w w w.t h e e d ge. m e
Special Section: How Qatar plans to harness the power of solar energy
- March 2015
42
61 In the context of Qatar’s increasing solar energy research and development. in this month’s Special Section The Edge takes a look at the solar status quo in the country and interviews Eng. Saleh Al Marri head of renewable energies in the technologies section at Kahramaa.
- QATAR’S BUSINESS MAGAZINE - Vol. 7 No. 3 - Issue 65 - March 2015
cover story
Vol. 7 No. 3
QATARISATION 2.0
OF OIL AND MONEY
Winners and losers in the new global crude paradigm
BUILDING WORKPLACE SKILLS AS A CRITICAL PRIORITY
100% Qatari
According to the MENA Labour Market Confidence Index ‘14, one of the most critical sources of talent for organisations across the region is the quality and availability of entry-level candidates to support their ambitious growth plans. There is clearly a lot to be done in fostering work readiness, write David Jones, Radhika Punshi and Namrata Budhraja of The Talent Enterprise, who advocate implementing what they call ‘Nationalisation 2.0’ as one potential solution.
features
54
Feature Story: Winners and losers in the Brent price tussle 48
Global energy editor Simon Watkins asks, if by capping production, is the Kingdom of Saudi Arabia, supported largely by OPEC, attempting to price out the nascent unconventional shale oil and gas revolution in the United States to preserve the basis of their global influence?
Business Interview: Social innovator Jon Duschinsky
54
The Conversation Farm’s Jon Duschinsky, a marketing expert whose clients include some of the largest global brands and was one of the drivers of 2014’s viral phenomenon, the ALS ‘Ice Bucket Challenge’, shared his insights with The Edge on “the era of the conversation”.
Special Section: Qatar’s solar plans and Kahramaa’s Reservoir Project exclusive with Eng. Saleh Al Marri 70
Qatar’s solar ambition has recently increased focus, with many new projects and initiatives being planned or implemented. Water and electricity corporation Kahraama recently announced a major project, the aim of which, Kahramaa’s head of renewable energies Eng. Saleh Hamad Al Marri tells The Edge’s Miles Masterson, is to contribute to the target of two percent of Qatar’s electricity output from renewable sources by 2020.
“We did not create the Ice Bucket Challenge,” says Jon Duschinsky, “we created the environment in which it could thrive and the community which could carry it. In short, we helped create the conversation that led to the Ice Bucket Challenge.” (Image Miles Masterson/photosbymilo)
The Edge | 3
contents page
sectors
Finance & Markets 27
With most forecasts suggesting oil prices are likely to stay low for some time, Qatar’s colossal infrastructure project pipeline may now be coming onstream at a time that could be described as inconvenient.
Energy & Sustainability 31
Qatar Petroleum’s decision to absorb its whollyowned overseas investment subsidiary Qatar Petroleum International makes business sense, according to Calvin Cobb, president of global energy consultancy Cobb & Associate.
Real Estate & Construction 35
In the latest edition of Cost of Living GCC Report, the United Arab Emirates and Qatar have emerged as the most expensive countries to live in.
Tech & Communications 39
ictQatar connected two more public parks in Qatar to the Internet in 2014, expanding public WiFi access across the country from five parks in 2007 at launch to nine parks.
Business Insight 75
Terry Tommason, partner and general manager at EC Harris Qatar, focuses on the increasing construction inflation and the impact the EC Harris’s Terry depressed international oil price is Tommason likely to have on construction costs discusses construction in Qatar. CEO and founder of The inflation. Entertainer Donna Benton also speaks exclusively to The Edge about this company’s unique business model, product selection, and its plans for Qatar.
regulars From the Editor 8 Photo of the Month 10 Business News 12 Qatar Perspectives 22 Products & Reviews 81 The Edge | 5
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6 | The Edge QCN Web VHP.indd 1
2/19/15 3:11 PM
editor’s letter The story broke as The Edge went to print this month, and was thus too late for inclusion in any meaningful way. This was the news that FIFA had announced that its special task force had finally recommended that the 2022 World Cup in Qatar be rescheduled to the cooler period of November or December that year. Also just before our presses began to roll, it was announced that the traditional curtainraiser to the event in 2021, the Confederations Cup, would likely be moved from Qatar to a country yet to be decided, most likely in Asia. While not unexpected, these revelations have once again brought to the fore the conspiracy theorists. These encompass those who allege Qatar bought its way to becoming the host of the event. And the camp on the opposite side of the spectrum, who speculate that racism is the main if not only motivational factor for those who object to the world cup being held here and are petitioning to get it moved away from Qatar. Regardless of where one might feel on those and other issues relating to the event – such as the plight of migrant workers here, the questions around a lack of budget accommodation, culture clashes and whether Western fans will even come in any reasonable numbers – the crux is that it now seems inevitable that the Qatar 2022 World Cup will be held during the winter months. As we have indicated before in this magazine, for FIFA to insist it be played at the usual period of June and July, and cancel the event altogether and move it outside of the region should be unthinkable. Indeed, it would be a clear signal that the world’s largest sporting spectacle will never be held in the belt of summer heat that encompasses the entire region, stretching from Morocco in the West to Pakistan in the East. So the ongoing story now will be framed in terms of repercussions: how will it affect the European football leagues and televised rights in a period that also influences the former, plus the Winter Olympic and the American football finals? Also, will there be legal ramifications from countries that lost the bid to Qatar to host the 2022 event, or any other negative backlashes?
How this pans out will have a massive effect on the economic and business environment here in Qatar, so please watch this space. The other major ongoing story affecting Qatar is of course the continued saga of depressed global oil prices. This too has raised many worrying questions. What has really caused this situation? Who does it really benefit, and did they have a role to play? Are Saudi and OPEC on the one side and the United States and the West on the other, playing games here? What will the economic repercussions be, both for oil and gas exporting countries, those dependent on hydrocarbon imports, and the world financial status quo as a whole? Where does Qatar fit into this story? Who will be the winners and losers, in other words? This issue our global energy editor Simon Watkins offers his insightful analysis on the topic on page 48. Another ongoing story affecting the Middle East relates to our cover story by David Jones, Radhika Punshi and Namrata Budhraja of The Talent Enterprise on page 42. It is widely acknowledged that the Middle East has a significant challenge in the fact that a large proportion of its population is young and that millions of them will enter the workforce in the next few years, many of them highly unprepared. Recent research conducted by our authors and other sources indicates there remains a chasm between what they expect from their employers and what employers expect from these young people, a large percentage of whom - both local and expatriate - are considered ‘average’ or ‘below average’ candidates. However, it is the former, as the local future of Qatar and the region, upon whom our authors focus, offering a potential road map to approach this challenge, in what they call ‘Qatarisation 2.0’. Elsewhere in this issue we take an in depth look at Qatar’s ambition to rapidly grow its solar power generation potential in the future. We also interview Jon Duschinsky – one of those who inspired the famous ALS ‘Ice Bucket Challenge’ – on the topic of social innovation and the positive effect embracing it can have on business large and small – which, it seems, is considerable. Enjoy the issue.
It now seems inevitable that the Qatar 2022 World Cup Miles Masterson will be held during the winter. Managing Editor 8 | The Edge
10 | The Edge
Constitutionally Covered
photo of the month
Supporters from The Council on American-Islamic Relations protest during a news conference outside the United States Supreme Court after the court heard oral arguments by the Equal Employment Opportunity Commission (EEOC) in EEOC versus Abercrombie & Fitch on February 25, 2015 in Washington, DC. Samantha Elauf of Tulsa, Oklahoma, filed a charge of religious discrimination with the EEOC, saying retailer Abercrombie & Fitch violated discrimination laws in 2008 by declining to hire her because she wore a Muslim head scarf. A verdict is expected in June. (Image Getty) The Edge | 11
news
business news
Gamers get their fix at Qatar’s first IGN Convention
main story
More than 5000 people, mostly drawn from Qatar’s youth population, attended Qatar’s first-ever gaming convention at the Qatar National Convention Centre on February 26 and 27. by M. Iqbal
Guinness World Record gaming holder Ryan Hart Street Fighter IV with an audience member.
The two-day event was loud and bustling, and the issues surrounding the fact that exhibitors could not retail their wares at the convention did little to fray the enthusiasm of the crowd. There was clearly a pentup demand for such an event and the IGN Convention delivered. Qatar’s fans dressed up as their favourite characters and got a chance to form the ‘longest human train in Doha,’ head-bang to songs from their favourite games, obtain autographs and have pictures taken with celebrities, and even challenge gaming Guinness World Record holder Ryan Hart to a duel in the gaming arena. But it was not just about having a good time. About 20 people signed up for a Gaming and App Development workshop by Qatari game development studio Girnaas, said the studio’s co-founder Fatima Al Kuwari. She said she was “amazed” by the response they got and “the big line of people wanting to talk to [Girnaas]”. The game studio had set up a booth upfront at the convention, introducing gamers to its characters and offering people a chance to sign up for game development and animation courses outside of the convention as well. “We are a living example that game development
“We can shift the focus from consuming games in the Middle East to producing them,” – Fatima Al Kuwari, Girnaas game studio, Qatar. 12 | The Edge
can happen in Qatar and that we can shift the focus from consuming games in the Middle East to producing them,” said Al Kuwari. The studio’s first game, Giddam, has been downloaded more than 400,000 times since its launch in December 2013. About 10,000 people play the game daily. Girnaas has also released three more games since Giddam, growing from five people at startup to 10 now. And they are still growing. The key to success for them has been focusing on the Middle East and North Africa region. “Arab culture is very rich in storytelling and we don’t see this in the games that our kids and families play,” added Al Kuwari adding, “they decided to turn “these stories and values [into games].” The business has been good. One of their newer games, Go Fahed was the official game of 24th Men’s Handball World Championship. “We get more requests than we can entertain,” said Al Kuwari, Girnaas is not a fluke. The circumstances are ripe for game development to become entrenched in the Gulf Cooperation Council. Hitesh Uchil, events and advertising director with IGN Middle East, said that the region is “waking up to game development”. He believes the lower barrier to entry presented by mobile platforms, and independently-produced friendly platforms such as the Xbox Live Arcade and PSN have helped spur development. “The barrier to entry is much lower,” explained Uchil. “The cost of development is less, the approval process is easier, and you don’t need a big name publisher to get your game out there.”
400,000
The number of times Giddam, Qatar’s first game has been downloaded since its release in 2103. 10,000 people play the game daily.
by the numbers Qatar 25th in Global Talent Competitiveness Index The Global Talent Competitiveness Index (GTCI) is an annual study which measures a nation’s competitiveness based on the quality of talent it can produce, attract and retain, was released by business school INSEAD recently. At 25th (34th, 2013) Qatar ranks particularly high on the ‘attract’ pillar, reflecting the government’s efforts to diversify its resourcebased economy. Bruno Lanvin, Executive Director, INSEAD European Competitiveness Initiative, spoke exclusively to The Edge on the significance of the Qatar ranking. What is the significance of Qatar’s ranking at 25? It confirms that the right policies have been put in place to make Qatar an attractive place for global talent. It reflects the fact that government authorities have acknowledged that moving away from an energy-based economy to a diversified competitive knowledgebased economy requires a strong focus on human capital. However, beyond the ‘attract’ factor, improving this ranking in the future will require additional efforts on the ‘grow’ and ‘retain’ pillars. Continued efforts to attract renowned academic institutions will help with the former, while improving local quality of life...will help the latter. Is there any contradiction involved in attracting foreign talent while promoting nationalisation in Qatar? It is largely a matter of growing local talent, and mixing it with external talent. This requires the creation of a dynamic environment within which mutual respect grows between ‘expats’ and ‘locals’. Localisation efforts should be measured not just by headcounts but by value addition – how do locals contribute to value creation in business and government, and how is this increasing over time? There is a good talent pool among young Qataris. Given the right opportunities, these young men and women will be the true pillars on which a sustainable and globally competitive knowledge economy can be built in Qatar. Will building a ‘knowledge economy’ attract foreign talent? Highly talented people tend to be motivated by factors beyond financial incentives. In particular, they are attracted by places where they know that they will have a chance to meet (and interface with) other talented individuals. To attract the leaders, creators and innovators who will lead in the knowledge economy, Qatar needs to be seen as a ‘talent hub’, in the way that Singapore and Silicon Valley have done.
13%
NUMBER OF THE MONTH Hamad International Airport (HIA) experienced a 13 percent passenger growth in 2014 in comparison to the previous year. This means over three million more passengers used Doha’s airport in 2014 compared to 2013.
news
United States (US) Export trade to the Middle East and North Africa (MENA) region reached record volumes in 2014 was the total volume of exports from the US to the MENA region in 2014. However, this was a year-on-year increase of approximately only
USD
71,465
1% from
billion
QAR260 billion
USD
70,957 billion QAR258 billion
In 2013 the biggest percentage increase in the region took place in Somalia, where US exports jumped
121% from
USD
to
USD
16
35
million
million
QAR127 million
QAR58 million
in 2014
in 2013
However US goods imports were as ever led by Gulf Cooperation Council (GCC) nations, especially the United Arab Emirates and Saudi Arabia, which together accounted for sales of
USD
40.79
60 percent of all US merchandise exports to the Arab world and overall the GCC, which also accounted for approximately
75%
billion
USD
of total sales of goods to the 22 countries of the Arab world, with Qatar at 4th with
5174 a volume of approximately
billion
QAR18,833 billion
The largest category volume of US export trade was
USD
in transportation equipment (including commercial aircraft), while the other top five export categories included:
24.8billion (QAR90.2 billion)
Non-electrical machinery, at USD9.5 billion (QAR34.6 billion)
Computer and electronic products, USD6.9 billion (QAR25.1 billion) Food and kindred products, at USD3.2 billion (QAR11.65 billion)
In 2014, US Foreign Military Sales (FMS) to MENA countries also contracted by
12.9%
to
USD35million QAR89.2 billion
Source: US government data analysed by the National USArab Chamber of Commerce (NUSACC)
The Edge | 13
news
business in quotes
“Addressing the root causes of terrorism will require a deeper, longer-term, and more strategic approach to the problem. It will require political leaders to have the courage to negotiate pluralistic, inclusive, power-sharing solutions to regional disputes. And it will require that tyrants be held to account.” HH Sheikh Tamim bin Hamad Al Thani, Emir of Qatar in an opinion editorial in the New York Times in late February, preceding his first meeting with US President Barack Obama. “This is not meant as an excuse for terrorism, because it is not,” wrote HH the Emir. “Qatar has been forceful in its condemnation of the barbaric acts perpetrated by these extremist groups, and steadfast in its support for a whole host of regional and international counterterrorism initiatives. But bullets and bombs alone will not win the war on terror.” (Image Arabian Eye/Reuters)
“There will be no compensation... We are doing nothing which destroys football. There is seven years to reorganise football around the world for this World Cup.” FIFA secretary general Jerome Valcke commenting on the recent recommendation by a FIFA task force that the 2022 World Cup in Qatar be rescheduled to the months of November/ December that year. The move will potentially disrupt the European club league at that time, leading some to demand recompense for the inconvenience, should the task force recommendation be heeded. But FIFA will not compensate European clubs for disrupting their season by rescheduling the 2022 World Cup, according to the governing body’s secretary general. “I definitely don’t feel I need to apologise...why should I apologise to clubs,” he added. (Image Arabian Eye/Reuters)
14 | The Edge
Business News in Brief Art World to gather in Doha
The International New York Times will host its inaugural Art for Tomorrow conference at Doha’s W Hotel from March 14 to 16. The conference, organised with Qatar Museums and the Ministry of Culture, Arts and Heritage of Qatar, will focus on the art and architecture that is building communities, developing commerce and enriching lives throughout the globe. The speaker line-up will include noted artist Jeff Koons and architect Jean Nouvel, among many others.
Significant Qatari investment expected in US infrastructure Robert A. Hager, Chairman, AmCham Qatar, HE the Ambassador of the United States of America in Qatar, Dana Shell Smith and Qatar Chamber director general Remy Rowhani at the recent forum.
A forum hosted by the American Chamber of Commerce Qatar revealed great opportunities for Qatari investors in the United States (US) market – with several speakers estimating that those investments would exceed USD35 billion (QAR91 billion) over the next five years. “The US-Qatar relationship is strong on many levels,” said HE the Ambassador of the United States of America in Qatar, Dana Shell Smith. “Our business and cultural relationship is the foundation that underpins so much of what we do. We share around USD7 billion (QAR25.5 billion) in bilateral trade.”
ICGF 2015 calls for greater Arab government transparency
Experts at the opening session of the fourth International Government Communication Forum (IGCF 2015), held in Sharjah in the UAE in February, urged greater transparency in government communications in the Arab world. “What we need in the Arab world is political reform if we are to gradually become democratic countries,” said HE Faisal Al Fayez, First Deputy Speaker of the Jordanian Senate Council. “We have to be accountable and seek direct communication between governments and citizens.”
news
business in brief
Insurance leaders to meet at MultaQa in March
Start-up Watch
MultaQa is one of the region’s premier gatherings for those in the insurance, reinsurance and related financial sectors.
More than 700 senior business insurance and reinsurance market leaders from more than 30 countries are set to convene at the 9th annual MultaQa Qatar conference. The two-day conference, co-hosted by the Qatar Central Bank and the Qatar Financial Centre (QFC) Authority, will start on March 8, 2015 and will feature keynote addresses by Finance Minister HE Ali Shareef Al Emadi and Qatar Central Bank Governor HE Sheikh Abdulla bin Saud Al Thani.
Al Thawadi urges Qatari youth to innovate
Speaking at Carnegie Mellon University in Qatar, Hassan Al Thawadi, secretary general of the Supreme Committee for Delivery & Legacy, emphasised the importance of cultivating an entrepreneurial culture and encouraging innovation among the region’s youth. “Millions of young, skilled and educated youth are entering job markets every year,” Al Thawadi said. “Creating viable opportunities for those people is the most important challenge for our region now, and in the decades that will follow – not only from an economic viewpoint, but also from a social and cultural perspective.”
Hassan Al Thawadi, secretary general of the Supreme Committee for Delivery & Legacy, emphasised the importance of cultivating an entrepreneurial culture and encouraging innovation among the region’s youth.
16 | The Edge
Qatari cycle retail entrepreneurs Marouf T. Mahmoud and Mohamed I. Al Sada with business partner Waheeja Al Husseini and various staff and team riders at the recent opening of their store in Doha.
Carbon Wheels Bike Shop Carbon Wheels Bike Shop was founded by Qatari Marouf Mahmoud, who always had a passion for bikes, and found that there was an active cycling scene in Qatar but no specialty bike shops to serve cyclists’ needs. In partnership with two other cyclists, Carbon Wheels Bike Shop was created in December 2014. The Edge spoke to Carbon Wheels business partner Waheeja Al Husseini about this local retail startup. Are there many serious cyclists in Qatar? While cycling is not a popular means of transport in Qatar, it is rapidly gaining traction as a sport. When you cycle, you can choose to do so alone or with groups of people - which makes it a lively social activity that can be enjoyed throughout the year. Carbon Wheels Bike Shop is a serious operation catering to the most discerning cyclists, but is also accessible to anyone. We have bikes for toddlers, kids from 3-12, city bikes, mountain bikes, road, triathlon and women-specific bikes for both mountain and road. Anyone looking to start cycling will benefit from the professional advice of our staff, all avid cyclists or ex-professional cyclists who’ve competed globally. What do you hope to do differently with your shop and in the cycling scene? Carbon Wheels Bike Shop is the first shop to sponsor a competitive cycling team in Qatar, the Carbon Wheels Race Team participated in Tour of Al Zubarah alongside the Qatar National Cycling Team - which was a big achievement for us and for Qatar to have two teams in such an important internationally-sanctioned race. Within the wider community, we are also present at several key cycling events where we offer free safety checks on bikes and last minute tuning before participants take off.
In terms of knowhow and technology, we bring world-class knowledge to the cycling scene through our maintenance centre and Retul Bike Fit Technology to help people find the most efficient and comfortable position on their bikes. What are the obstacles to cycling here? Qatar has ideal weather for cycling barring July and August. I regularly see people cycling all year long on the popular bike tracks such as the one on Ceremonial Road early in the morning and in the evening. The more serious cyclists who want to stay fit for competition are up cycling between the hours of 5 am and 9 am on the weekends, and in the evenings midweek. Automobile traffic is an issue any where in the world, so we follow best practice by always having a support vehicle join us on the rides and we always ride in groups. None is allowed to ride without a helmet and we adhere to a strict code of conduct on the roads. What has the experience been like? The road to get here hasn’t been easy, but the feedback from the community has been overwhelmingly positive - “finally a proper bike shop” is a regularly uttered statement by first-time visitors. Check out: www.carbonwheelsqtr.com
For the 4th year in a row, we are chosen the best airline in Europe. Every year, Skytrax, the world’s largest airline passenger satisfaction survey asks millions of passengers around the world to choose their favourite European airline. For the past four years, the answer has always been the same. Turkish Airlines remains the best airline in Europe. We would like to thank you and congratulate our employees for making this possible.
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events
Business Events Calendar MarchMay 2015 30 March-1 April International Property Show 2015 (Dubai)
Events Listing March
10-11 March Qatar Projects Conference The Arab Future Cities Summit focuses on sustainable city development in the Middle East.
13-14 April Arab Future Cities Summit 2015
Model of luxury housing estate at property trade fair in Dubai, United Arab Emirates. (Image Arabian Eye)
To be held at Dubai World Centre in the United Arab Emirates, the 11th edition of International Property Show (IPS 2015) will offer a perfect platform for both international and local real estate markets to showcase their residential, commercial and mixed-use products and to conduct serious transactional business. The event is designed to provide consumers and real estate professionals from around the world with a one-stop shop opportunity to explore, invest and benefit from the best property deals locally and internationally.
23-25 April Arab Diabetes Medical Congress 2015
The International Diabetes Federation estimates that the number of diabetics globally will reach 592 million by 2035. The financial burden on the healthcare system is substantial, with estimated costs of diabetes related complications accounting for up to 11 percent of total global healthcare spending. This congress is the region’s premier event connecting policy makers, diabetes experts and researchers to exchange knowledge and generate new ideas that will foster the advancement in prevention and control of diabetes in the region. 18 | The Edge
The Arab Future Cities Summit 2015, to be held at the Ritz-Carlton in Doha, will showcase city development best practice strategies through presentations from some of the world’s leading experts and the innovative solutions that will integrate citizens, systems and services. Connecting government authorities, developers, urban planners, investors, academics, and cutting-edge technologists, this event focuses on sustainable city development across the Middle East, with the theme of ‘Smart Solutions for Sustainable Cities’.
6-7 May HVACTech Qatar
The 2nd annual HVACTech Qatar conference will bring together private and government project owners, planning bodies, developers, main contractors and consultants, MEP contractors and consultants, utility operators and companies, regulators and solution providers. It will showcase the latest technology advancements, along with project case studies demonstrating how these advancements can best be applied to answer the specific requirements and challenges of construction in Qatar.
11-13 May Cityscape Qatar
Exhibitors at Cityscape Qatar 2015 will have the opportunity to showcase their projects and services to global real estate investors and financiers, developers and others. Visitors will be able to network with regional and international real estate investors, financiers and developers. The exhibition includes the Qatar Real Estate Summit and the Cityscape Awards.
10-11 March Qatar Chamber 1st SME Conference (Qatar-Germany) 14-16 March Art for Tomorrow Conference 23-24 March 6th Annual International Translation Conference
April
27-28 April Qatar Green Building Conference 2015
May
4-7 May Project Qatar 4-7 May Qatar StoneTech 4-7 May Heavy Max Machinery Exhibition 6-7 May Future BIM Implementation 18-21 May World Stadium Congress 18-21 May 1st Doha International Gift Exhibition 18-22 May Expo Expo Middle East Summit
Special advertiSement
TAKING SECURITY IN QATAR:
PLEDGE OVER SECURITIES LISTED ON THE QATAR EXCHANGE AND ENFORCEMENT ISSUES There are two types of securities that are listed on the Qatar Stock Exchange (“QE”), namely, shares and bonds. Currently, only governmental bonds issued by the Qatar Central Bank (“QCB”) on behalf of the government of Qatar are listed on the QE. Although the procedures relating to pledging of securities prescribed by the Qatar Central Securities Depository (“QCSD”) Rules of Dealing do not differentiate between shares and bonds, there are legal and practical differences in pledging bonds under the Qatari Civil Code No. 22 of 2004. This article will set out a summary of the issues relating to creation of a pledge over securities and discusses enforcement issues in Qatar. Qatar Stock Exchange The QE is the securities market in the State of Qatar and is regulated by the Qatar Financial Markets Authority. Last year QE was upgraded from frontier to emerging market status by index provider MSCI signaling investor confidence and improved governance. Currently, the QE has 43 listed companies and trades on securities, Government Bonds, Sukuks and Treasury Bills issued by the QCB. Qatar Central Securities Depository The QCSD was established jointly by the QCB and QE and has been operational since January 2014 and regulates the transfer of ownership of securities listed on the QE. The QCSD absorbed several functions from the QE and now acts as the central registry and depository for listed equity and debt securities (shares, bonds and sukuks) and is responsible for the settlement of orders by Deliveryversus-Payment and for registering pledges over listed securities. Creation of Pledge over Shares in Qatar Briefly, creation of a pledge over shares consists of a three-step process; registration of the pledgee bank by the QCSD, authentication of the share pledge and registration of the share pledge agreement. Firstly, the pledgee bank should register as a member with the QCSD. The QCSD accepts membership registration applications from both foreign and GCC banks. Subject to registering as pledgee member with the QCSD, any financial institution, including non-Qatari entities, can register pledges over securities listed on the QE. Secondly, the share pledge agreement should be authenticated before the Ministry of Justice in Qatar. The share pledge agreement should include provisions in relation to the payment of dividend (i.e. would the dividend be payable to the pledgee bank or the pledgor) and voting rights (before and after default). Finally, the authenticated share pledge would need to be registered with the QCSD. Upon completion of the pledge process, the QCSD will issue a letter to the pledgee bank providing confirmation of the pledge. Enforcement of pledge over securities in Qatar Enforcement of share pledges is not unusual in Qatar, and Courts in Qatar will order the sale of the shares if the outstanding debt is proven and the pledge has been properly created. It is important to note that enforcement in Qatar is a court-led process, and self-help remedies are not permitted under the law in
connection with commercial pledge over securities in general. The Qatari Commercial Code Law No. 27 of 2006 and the QCSD Rules of Dealing govern the enforcement of a commercial pledge over movables in general, including pledge over securities. Article 247 of the Commercial Code states that the rights of the pledgee over pledged shares in Qatar may only be enforced through a court process. Accordingly, subject to the discretion of the court, a pledgee bank may own the pledged shares after obtaining a court order. Where a pledgee bank seeks to obtain enforcement through a power of attorney, which authorises the pledgee bank to sell the shares without a court order, would be deemed invalid as it would seek to circumvent of the courtled process. Steps for Enforcement There is a summary procedure in place which would involve the pledgee bank petitioning the Qatari Courts to claim the total amount outstanding (or part thereof) following seven days from the pledgee bank sending a notification to the debtor that the amount is outstanding and obtaining an acknowledgement receipt. Whilst the mechanism of the summary process is expedient, in practice a defendant may raise substantive and procedural objections which would lead to the enforcement proceedings being referred to the Court of First Instance and this would greatly delay enforcement of the pledge which can take up to 3 years to resolve.
DINA AL WAHAbI Associate – Banking & Finance d.alwahabi@tamimi.com
Follow us on Twitter @AlTamimiCompany Join us on LinkedIn - Al Tamimi & Company www.tamimi.com
qatar perspectives
Wellness centres to be the basis of primary health care in Qatar The Primary Health Care Corporation (PHCC) has an ambitious, yet realistic ancomprehensive strategy in place to expand geographically. The strategy will be pertinent in allowing it to cope with population growth which will increasingly become a permanent reality in Qatar, in the opinion of Dr. Mariam Ali Abdulmalik.
“PHCC will soon promote the first wellness centre to be established in the State of Qatar that will offer a distinguished range of services.”
The PHCC is currently extending efforts intensively to execute a wide range of developmental projects and programmes to meet the public needs and expectations. These projects have been launched to ensure PHCC’s commitment to implement the National Primary Health Care Strategy and fulfil the corporation’s pledges towards the public. With this initiative in mind, the PHCC has started expanding and investing in multifarious fields within the organisation – be it at the facilities level, the service approach or at the manpower and workforce level that take care of the delivery. Geographically, the number of health centres across the State of Qatar will be increased by 50 percent by 2019, which means 10 additional health centres will be established. These will be operated on the basis of a progressive plan that is scheduled to be completed by 2019. The construction work has already begun in cooperation with the Public Works Authority – Ashghal – to deliver the first batch of additional health centres by the end of 2015. In the context of facilities development, the new outlook will be to approximate as closely the concept of wellness. PHCC will soon promote the establishment of the first wellness centre in the State of Qatar. These will be new types of health centres that will offer a distinguished range of services, allowing
the healthcare team to work together with the families to maintain the physical and psychological well-being of all family members. This new approach will provide patients with high quality of services and amenities such as a gym, swimming pool and physiotherapy facilities. PHCC has further invested in providing a high level of service standards by the enhancement of the overall patient experience through: improving the management of health centres; ensuring efficient patient management; improving the reception services; and upgrading the Hayyak service, a customer service line dedicated to answering the queries of patients as part of its efforts to provide the best services. The implementation of the Clinical Information System (CIS), as a bilateral partnership project between PHCC and Hamad Medical Corporation (HMC) under the supervision of the Supreme Council of Health to provide common patient medical records, has begun. This will be used by both HMC and PHCC to treat patients more accurately and effectively. This system has successfully delivered results and will ensure that Qatar’s population receives the most efficient and safe medical care. In relation to the workforce development plan, PHCC has recently hired 83 specialised doctors which indicates an increase of 14.4 percent compared to last year, as the corporation
22 | The Edge
is aiming to build the medical human resource capacity in order to cope with the geographic, demographic and economic growth. PHCC is also keen to overcome all difficulties that Qataris face in terms of developing their practical skills. To bridge this gap, PHCC is offering training programmes that have specifically been tailored for this purpose. PHCC has ambitious plans for the future and is currently building partnerships with leading educational institutions in Qatar. An agreement has been established with Weill Cornell Medical College, University of Calgary, College of North Atlantic, and Qatar University, in order to increase the proportion of trained Qatari specialists in various areas of healthcare and enhance the expertise and skills of medical staff. With these initiatives in place, PHCC looks forward to a journey that will not only be progressive but aid in heralding a new era of primary health care in the State of Qatar.
Dr. Mariam Ali Abdulmalik is the managing director of the PHCC.
qatar perspectives
Franchising in Qatar requires a robust legal framework Franchising allows businesses to expand into the rapidly growing Qatar market without the risk and capital investment traditionally associated with establishing a joint venture though it is not a risk-free means of expansion writes Lee Keane.
“Since Qatar does not have a specific franchising law, it is absolutely crucial to ensure that lawyers familiar with local laws and their implementation review the agreements.”
Qatar presents a tremendous opportunity for businesses looking to expand internationally. The country has a growing population, a rapidly growing economy, the highest gross domestic product per capita in the world, is set to host the 2022 World Cup and plans to spend an estimated USD200 billion (QAR728 billion) on infrastructure projects in the coming few years. Franchising continues to be the preferred model for businesses looking to expand quickly into Qatar’s rapidly developing economy without the risk and significant capital investment associated with entering the market through a joint venture. The franchise economy in the Middle East and North Africa (MENA) is worth USD30 billion (QAR109.2 billion) and is growing by 27 percent per year. The Gulf Cooperation Council (GCC) nations are at the forefront of growing the franchise economy in the MENA region. More than 50 percent of retail sales in the GCC are generated from international brands and the profitability of franchised outlets is often much higher in the Middle East than in the franchisor’s home country. Particular areas of opportunity exist in the food and beverage (F&B) sector. Fast food is estimated to account for 40 percent of the franchising market in the GCC. The F&B franchises are expected to grow by 25 percent in the coming years. It is anticipated that the health food sector will be a key area of growth within the F&B sector. Franchising opportunities are not, however, limited to F&B outlets. There is a strong appetite for international
brands in the retail sector. The education, transportation, tourism and health care sectors also offer potentially lucrative opportunities to franchisors.
24 | The Edge
Legal framework
Qatar does not have a specific franchising law. A franchisee will often be considered as an agent under Qatar law and thus franchising agreements will generally fall under the scope of Law No. (8) of 2002 on Organisation of Business of Commercial agents (the Commercial Agency Law). The Commercial Agency Law provides significant statutory protection to franchisees and local agents such as the right to an exclusive appointment and the right to receive compensation in the event that agreements with principals terminate or expire. The Commercial Agency Law may displace the terms of a written agreement between the parties. Even if the Commercial Agency Law does not apply, the franchisee may be afforded rights on termination by the Franchiser pursuant to Law No. (27) of 2006 (Commercial Code). In addition to the Commercial Agency Law, and the Commercial Code franchisors also need to be mindful of the broader legislative environment in Qatar. Intellectual property, labour and company legislation will impact on the granting and operation of a franchise in Qatar.
names before the franchise agreement is signed. This practice comes with high risks even if the franchise relationship is later formalised and documented. It is difficult to contest or assign the ownership of a trademark under Law No.(9) of 2002 On Trademarks, Trade Names, Geographical Indications and Industrial Models and Designs (the Trademark Law). International brand owners often struggle to wrest control of a registered trade name away from a former business partner based on their contractual rights, even if they are able to rely on famous trademark rights elsewhere in the world. The enforcement of legal rights can be difficult as there is no concept of binding legal precedent and a limited ability to obtain injunctions. As a result, although franchising in Qatar can be an excellent financial opportunity for both franchisor and franchisee, it is absolutely crucial to ensure that lawyers familiar with local laws and their implementation review the agreements.
Intellectual property
For franchisors, trademarks and trade names are at the forefront of brand protection. In the interests of commercial expediency, franchisors often allow a franchisee to register trademarks and trade
Lee Keane, Partner, Clyde & Co.
OfďŹ cial Business Magazine :
Contents: Current oil prices offer Qatar opportunity to manage deficits. 27.
finance & markets Current oil prices offer Qatar opportunity to manage deficits
Regional estimates have pegged Qatar’s cumulative infrastructure programme at QAR1 trillion, with QAR496.8 billion earmarked for buildings such as the one pictured here, near Souq Waqif. (Image Reuters/Corbis)
With oil prices likely to remain low – and most forecasts suggesting they are likely to stay low for some time to come – Qatar’s colossal infrastructure project pipeline may now be coming onstream at a time some financiers might describe as inconvenient, writes the Oxford Business Group’s Oliver Cornock
V
entures ONSITE, a regional construction project tracking system, estimates Qatar’s cumulative infrastructure programme to be currently worth some USD280.2 billion (QAR1 trillion), with USD136.5 billion (QAR496.8 billion) earmarked for buildings, USD103.4 billion (QAR376.5 billion) for infrastructure and USD40.3 billion (QAR146.7 billion) for energy development. MEED, meanwhile, estimates that for 2015 alone, some USD30 billion (QAR109.2 billion) of new project deals are set to be
signed. Much of the budgeting for these developments was undertaken in radically different circumstances. For the 2014-15 fiscal year, Qatar had assumed a USD65a-barrel price (QAR236.6) – significantly higher than at present. At the same time, while gas prices – and liquefied natural gas (LNG) prices in particular – are more crucial for Qatar than oil, recent decoupling of oil and gas has not all worked in the state’s favour, as many of Qatar’s LNG contracts are still indexed to oil. The recent IMF report, Learning to Live
QAR
109.2 billion
Size of new project deals to be signed in 2015, according to MEED estimates. The Edge | 27
.
sectors | finance & markets
“Recent decoupling of oil and gas has not all worked in the state’s favour, as many of Qatar’s LNG contracts are still indexed to oil.”
120
Futures curve as at Jun 30 2014
110 100 90 80 70
Futures curve as at Jun 30 2015
60 50
At the same time, Qatar has been diversifying both its asset base and its economy overall. The former strategy has seen a major recent surge in overseas investments, in particular – from Gauguin paintings to luxury London apartments – while the latter, a programme ongoing for many years, saw the value of the non-hydrocarbon sector exceed that of the hydrocarbon for the first time, back in the third quarter of 2014. Qatar is also less hamstrung by expensive fuel subsidies than many of its peers. Standard Chartered recently calculated the value of these at 5.5 percent of GDP for the state, in comparison to 11.5 percent in neighbouring Saudi Arabia. In addition, Qatar has huge financial reserves to fall back on. The IMF report categorised these financial buffers as “substantial” in the short run, with a series of larger-than
2021
2019
2020
2018
2017
2015
Diversifying assets
2016
40
Though oil prices have come down below expected levels, the Qatar government has made it clear that there will be no let up in the project roll out.
28 | The Edge
Oil futures curves (USD per barrel)
2014
with Cheaper Oil amid Weaker Demand, thus pinpointed Qatar as the second most affected oil-exporting country globally, when it comes to export revenue losses from lower oil prices, after Kuwait. The IMF then went on to predict that the country’s 2014 fiscal surplus of 9.2 percent of gross domestic product (GDP) would likely swing to a 1.5 percent fiscal deficit this year. The government has made it clear that there will be no let up in the project roll out, though, despite the new numbers. The Minister of Economy and Commerce, Sheikh Ahmed bin Jassim bin Mohamed Al Thani, told Bloomberg in late January that Qatar’s infrastructure development and investment programme was “going on as planned” and would “not be affected by the oil price going down”. Thus, it would seem likely that Qatar will see fiscal deficits become a feature of the economic landscape for some time to come – barring any immediate upswing in oil prices, or change of heart on project roll out. Successfully and efficiently managing the financing of this deficit will become a crucial factor in the years ahead, if there is to be no project disruption, and targets – such as the 2022 World Cup – are still to be met on time. Fortunately, the signs are that this management is already underway. Majors such as Qatar Petroleum (QP) have begun consolidation – the changes to Qatar Petroleum International (QPI) and the cancellation of the Al Karaana petrochemicals complex likely being indicators of this – while other government backed institutions, such as Qatar Foundation, have been consolidating their finances.
Source: Bloomberg and QNB Group analysis
expected budget surpluses in recent years adding to the country’s coffers. Some of these surpluses have been due to delays in project delivery, with this implementation issue also likely to ameliorate future deficits. Above all though, the management of a deficit budget will require much stricter financial discipline and tougher requirements for decision making in project roll out. At the same time, as ministers have also recently pointed out, the fall in oil prices highlights the importance of the private sector taking a much larger role in the economy, further reducing its dependence on government spending and their extensive hydrocarbon revenue bases. The government’s management of cheaper oil could thus turn out to be a welcome catalyst for Qatar’s entrepreneurs.
Oliver Cornock is regional editor, Middle East, for Oxford Business Group.
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Contents: QP absorbs QPI, which allows for greater focus on international projects. 31. QAFAC launches CO2 plant ahead of schedule. 32. GDF Suez looking to expand energy asset portfolio in Qatar. 33.
energy & sustainability QP absorbs QPI, which allows for greater focus on international projects Due to the depressed oil price many oil and gas producing countries have had to embark on drastic cost-cutting and consolidation tactics. (Image Arabian Eye)
With no end in sight for the tight operating environment in the global hydrocarbons sector, Qatar Petroleum’s (QP) decision to absorb its wholly-owned overseas investment subsidiary Qatar Petroleum International (QPI) makes business sense, Calvin Cobb, president of global energy consultancy, Cobb & RIG DUKHAN The newest based in Houston in the United States (US), recently told The Edge global oil and gas editor, Associates, assest to Simon Watkins. join the fleet
“I
t is the least severe form of business retrenchment in a period of ‘market difficulties’,” Cobb continued, “to focus on achieving economies of scale both in company structure and project implementation, and is way less dramatic than the sorts of measures that we have seen being undertaken by some other producers in the Middle East.” QPI was created in 2007 to acquire and manage Qatar’s portfolio of international up- and downstream hydrocarbons investments, with the aim of creating a longterm diversified revenue stream and to look for potential synergies with QP’s domestic operations. Compared to similar vehicles operated by Kuwait and the UAE, though,
QPI’s investments had been less risky, and the largest of them – for multi-billion dollar joint venture (JV) refineries in China and Vietnam – had been moving in a more measured fashion. The same could be said for its other holdings: a stake in the brown-field expansion of Egypt’s Mostorod refinery, plans for two fertiliser plants with Algeria’s Sonatrach, co-ownership of LNG import terminals in Italy, the United Kingdom and the US, and a small upstream portfolio comprising interests in Canada, Congo (Brazzaville) and Mauritania. Consequently, said Cobb, there is little ongoing business that might be truly jeopardised by the absorption of QPI
into its parent. Without QPI’s separate operation, QP’s wider initiatives that had sprung from QPI’s strategic partnership with Royal Dutch Shell (RDS) at the time of QPI’s establishment can be dealt with more nimbly and strategically, given that RDS is already a key foreign partner to QP at home through its shareholdings in the Qatargas 4 LNG and Pearl GTL (gas-to-liquids) ventures, according to prevailing market circumstances at any given time. Despite the January cancellation of its flagship USD6.4 billion (QAR23 billion) Al Karaana petrochemicals JV planned with RDS at Ras Laffan, RDS’ and QP’s commitments remain undimmed in those international markets that currently offer The Edge | 31
sectors | energy & sustainability
the best projects of return in the value chain (such as Asia), added Cobb. In 2009, for example, QP (through QPI) took stakes in two operational RDS petrochemicals ventures in Singapore, and they are also joint shareholders (alongside state oil firms PetroChina and PetroVietnam) downstream projects in those countries, which, although currently on hold, have not been cancelled. These include a USD13 billion (QAR47 billion) refining and petrochemicals complex in Zhejaing province in eastern China, and a USD4 billion (QAR15 billion) integrated Long Son complex in southern Vietnam. “The integration of QPI into QP will
unquestionably help us enhance our ability to expand internationally and extract further value for QP and the State of Qatar across the oil and gas value chain,” QP chairman and CEO Saad Sherida Al Kaabi says, “and we are looking forward to the next phase of international growth.” In this context, despite Al Karaana, Doha has made it clear that petrochemicals development remains a key strategic aim, albeit now in a more modest form than the mooted megaprojects. One such specific example is that, with the USD10.4 billion (QAR39 billion) Barzan gas project – close to being commissioned by QP at the North Field – whose primary objective is to provide
gas to fuel domestic industry rather than for export, large quantities of surplus ethane have become available. As a consequence of this, January saw QP launch a feasibility study with Qatar Petrochemical Company, Qatar Chemical Co. (a QP JV with the US’ Chevron Phillips), and Ras Laffan Olefins Co. (a conglomerate of multiple government-led vehicles) to study how the gas feedstock could be deployed to “maximise the benefit from available synergies by utilising the existing facilities and infrastructure in this sector”, according to Al Kaabi, and, crucially, to significantly further reduce capital and operational costs to mitigate low oil prices.
Emission reduction
becoming increasingly important in the fuels sector and within the petrochemical industry). The daily 500 tonnes capture is equivalent to the CO2 absorbed by 4.2 million trees in 10 years, or that emitted by 32 million vehicles per year. On the commercial side, the recovery unit – that has been constructed under licence from Japan’s Mitsubishi Heavy Industries, Japan – features specific new applications of CO2 recovery that are focused on optimising methanol production. According to Al Kuwari: “After conducting a thorough feasibility study to examine the technical
and economical benefits of the project, a cost analysis showed the project had definitely helped increase our production and profit.” Comprising flue gas pre-treatment, CO2 absorption, solvent generation and CO2 compression technology, the CDR plant is designed to produce 982,350 tonnes per annum of methanol and 610,000 tonnes per annum of methyl tert-butyl ether, and will consequently rank as one of the world’s largest commercial-scale CO2 capture facilities.
QAFAC launches CO2 recovery plant ahead of schedule
The Qatar Fuel Additives Company (QAFAC) has launched a USD80 million (QAR291 million) carbon dioxide (CO2) recovery (CDR) plant at Mesaieed, two months ahead of schedule. As highlighted in The Edge’s exclusive interview with QAFAC CEO, Nasser Jeham Al Kuwari in November 2014, this major development is in keeping with the company’s core commitment to reducing Qatar’s greenhouse gas (GHG) emissions, as part of the environmental sustainability regulations and policies contained in the Qatar National Vision 2030. The plant is also a key part of the Industries Qatar subsidiary’s objective to be in the top five world producers of methanol, its high-value derivatives, and butane subproducts by 2020. From the environmental perspective, the project will capture 500 tonnes of CO2 per day from its methanol reformer stack. This otherwise would have been emitted into the atmosphere, but instead will be injected back into the existing process to enhance the production capacity of methanol (a key chemical intermediate 32 | The Edge
“After conducting a thorough feasibility study to examine the benefits of the project, a cost analysis showed the project had helped increase our production.” – QAFAC CEO Nasser Jeham Al Kuwari.
“Stepping up the climate change challenge and playing our part in fulfilling the vision, we looked for ways to reduce GHG emissions into the atmosphere,” Nesser Jeham Al Kuwari, CEO of QAFAC had told The Edge.
500 tonnes
The amount of CO2 QAFAC’s recovery plant at Mesaieed will capture daily.
energy & sustainability | sectors
Qatar hydrocarbon production Oil & condensate production (m b/d), LHS Gas production (m/t/y) RHS 2.0
2.0
2.0
1.8 1.7 1.4
103.7
1.5
135.7
142.7
-140 -120 -100
105 1.0
160
-80
80.4
60 2009
2010
2011
2009
2012
2013
Source: BP, QNB analysis
Energy production
GDF Suez looking to expand energy asset portfolio in Qatar
French energy giant, GDF Suez, is looking to diversify its already sizeable portfolio of assets in Qatar, according to the Paris-based group chairman and CEO Gerard Mestrallet.
“We are interested in further expanding our presence in Qatar and strengthening our cooperation in the sectors like power, natural gas and energy services,” Mestrallet said during a recent visit to Doha. “Recent meetings with various potential partners have also evoked the idea of co-investments in the countries where we have strong presence, so we could propose to Qatari companies and individuals to co-invest with us in China, South-East Asia and Latin America,” he added. In general terms, the company is already the largest independent power producer in Qatar, involved in almost 40 percent of the state’s total power production. More specifically, it has a 40 percent stake in the Ras Laffan B Power and Water Plant, and a 20 percent stake in the Ras Laffan C Power and Water Plant (Qatar’s largest). Additionally, the company has a 60 percent stake in the major ongoing operation in Qatar’s Block 4 non-associated gas field (the biggest in the world), which is currently the subject of viability studies, following extensive drilling tests last year. Looking at the firm’s expansion strategy, Mestrallet said that energy management was one of the key areas of his discussions with Qatari authorities, particularly ahead of the 2022 World Cup. The Edge | 33
Contents: Rental inflation may force more families to move out of Doha. 35. New mobile app launched to facilitate residents of the Pearl-Qatar. 36.
real estate & construction Rent inflation continues to increase cost of living in Qatar
Qatar showed the highest levels of rents for residential apartments in the Gulf Cooperation Council, according to the Cost of Living GCC Report.
According to DTZ, rental inflation in 2015 will particularly impact middle-income families as the expected supply for this group is only 12 percent compared to 40 percent for prime residential units. by Farwa Zahra
I
n the latest edition of Cost of Living GCC Report, the United Arab Emirates (UAE) and Qatar have emerged as the most expensive countries to live in. For Qatar, however, a large part of the living cost is attributed to accommodation charges. For a two-bedroom apartment, Qatar showed the highest rentals, reaching an average of USD44,675 (QAR162,617) per annum, compared to USD31,536 (QAR114,791) in UAE which is the second most expensive for rentals. According to DTZ’s latest report, covering Q4 2014, demand within the
residential sector has been particularly high for four- and five-bedroom villas. That said, “There has been a seasonal reduction in demand for high quality apartment and villa accommodation, however the market remains buoyant with strong underlying demand,” states the report. While Doha in particular has been experiencing rental inflation for the last few years, Edd Brookes, general manager of DTZ, believes the pressure will ease in the coming years. “Given current growth rates of six to seven percent per annum, we anticipate prices returning to 2008 levels
in the next three years,” he said. For the time being, however, Doha’s rental inflation will remain, with middleincome families expected to suffer the most. Compared to the expected growth rate of 40 percent for prime residential units, stock focused on middle income is forecast to increase by only 12 percent in the next 12 months. On the freehold side, sales activity has grown within the residential sector. Indeed, of late, investors have been increasingly interested in Qatar’s property market. In Bloomberg’s fourth annual ranking of
The Edge | 35
QR
real estate & construction | sectors
“With Qatar’s population growth set to increase by over seven percent per annum… the real estate market will need to expand more quickly to keep pace and avoid overheating the market.” - Johnny Archer, associate director, DTZ. the most-promising emerging markets in which to invest, Qatar took the second slot. The hospitality sector in 2014 experienced increased occupancy due to increasing number of tourists and a slowdown in new hotel openings, with 108 two- to five-star hotels as of Q4 2014. According to DTZ, the pressure will build up once again as new stock of hotels becomes ready, with 125 hotels currently under construction. Within the retail sector, according to DTZ, no new mall was opened in 2014 thus increasing the likelihood that some of the nine malls under construction in Qatar will be opened for the public in 2015 and 2016. The combined retail space of the nine malls under construction is more than one million square metres (sqm). The office sector continued to show stable rentals in Q4 2014, more than 300,000 sqm of office space is forecast to be available in West Bay and Lusail by the end of 2015, thus increasing the vacancy levels.
36 | The Edge
Commenting on the current real estate trends, Johnny Archer, associate director at DTZ, said, “With Qatar’s population growth set to increase by over seven percent per annum in the coming years, the real estate market will need to expand more quickly to keep pace and avoid overheating the market.” property development
New mobile app launched to facilitate residents of the PearlQatar The new mobile app is aimed to embody the concept of smart city for the Pearl-Qatar. Residents of the Pearl-Qatar can now get a range of services through the newlylaunched mobile app. Supported by Android or iOS operating systems, the app can facilitate users in lodging complaints, making reservations, seek information and other services at the Pearl. Called The PearlQatar, the app has reached a rating of 4.8 out of five on Android Playstore. General areas and interests located in the app include shopping, dining, events, services, offers, events and properties. Some
Hussain Akbar Al Baker, senior events and marketing manager at the Pearl’s developer UDC, said: “The move to develop a one-stop-shop mobile application fulfils UDC’s vision for The Pearl-Qatar of being a smart island.”
specific ones include directions, parking and Novo Cinema. Concierge services facilitated by the app include golf cart, water taxi, wheelchair, limousine and call centre. Other services provided by the app include location directions for various outlets, opening hours, contact information and ongoing offers and promotions, without the need to contact the call centre or concierge desk. According to Hussain Akbar Al Baker, senior events and marketing manager at the Pearl’s developer United Development Company (UDC), “The move to develop a one-stop-shop mobile application fulfils UDC’s vision for The Pearl-Qatar of being a smart Island in all aspects of its infrastructure and services.” Earlier in January, UDC announced the opening of a 5000 sqm family entertainment centre, claiming it to be the biggest indoor entertainment centre in the region. The development of all three zones will also include the construction of houses and facilities for workers.
Bowling area at the Pearl’s indoor entertainment centre called Megapolis.
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Contents: Free WiFi expands in public parks. 39. Qataris launch real estate app. 40.
tech & communications ictQatar expands iParks public WiFi access across country
Sheraton Park on the Corniche in Doha is one of a growing number of public spaces in Qatar with free WiFi, which especially allows migrant workers access to the Internet they might not otherwise have had. (Image FotoArabia)
The iParks initiative has expanded from five parks in 2007 at launch to nine parks across Qatar, as the Ministry of Information and Communications Technology (ictQatar) connected two more parks to the internet in 2014, writes technology correspondent M. Iqbal.
T
he latest parks to be added to the matrix are Shahaniya in Al Rayan and the public park in Umm Salal. The other seven locations are: Al Wakrah Public Park, Corniche Al Khor, Simaisma Public Park, Dukhan Public Park and Sheraton, Rumailah and Dahl Al Hamam public parks in Doha. The shared Internet speed at each of the nine parks is now eight megabytes per second (mbps) or higher, according to the recently-released ictQatar Annual Report 2013/14. The initiative is part of the ministry’s attempt to broaden Internet access, especially for low-skilled transient
workers, who otherwise may not have the opportunity to obtain online access. The ministry provides free WiFi access to the public in the nine parks. According to the report, the service is accessible through a “simple, secure registration process in either English or Arabic and supported by a 24/7 customer care hotline”. And if figures are anything to go by, the strategy is paying off. The total number of log-ins increased from 195,737 in 2011 to 689,000 in 2013, a rise of more than 250 percent in just two years. The initiative seems to have worked so well for ictQatar that it plans to expand free WiFi coverage to
public places other than parks across Qatar. The initiative fits well within the ministry’s larger objective of keeping Qatar wellconnected. The National Broadband Plan, announced in December 2013, aims to offer all residents of Qatar a choice of at least two broadband service providers by 2016.
250%
The total number of log-ins onto Qatar’s free WiFi in its public parks increased from 195,737 in 2011 to 689,000 in 2013, a rate of 250 percent. The Edge | 39
sectors | tech & comms
The shared Internet speed at each of the nine parks is now eight megabytes per second (mbps) or higher, according to ictQatar’s recent report. The 10-year plan also aims to make affordable 100 mbps Internet connections available to 95 percent of households in Qatar, in addition to at least one gigabyte per second (gbps) Internet speed for businesses, schools, hospitals and government institutions. Qatar continued to rank number one for the second year running in Arab nations on Global Information Technology Report 2014’s Networked Readiness Index. Worldwide, Qatar ranked 23 out of the 148 countries included. The country aims to maintain the position with Qatar National Broadband Network – a government-owned company that is working to connect all of Qatar’s urban and rural areas via fibre optics – and the formation in 2014 of an independent Communications Regulatory Authority, which will work to introduce new service providers in the market and improve the clarity in the regulatory framework.
ictQatar’s 2013-14 report: Key statistics
+12%
Between 2010 and 2013 Internet penetration in Qatar households increased from 84 percent to 96 percent.
1,665,419
is the current number of mobile broadband connections, an increase of 32 percent.
QAR
8.6
+14% while Internet penetration for the mainstream population increased from 82 percent to 98 percent.
200,000
while the number of fixed broadband connections rose by 17 percent to slightly more than 200,000.
was the recorded revenue of the telecom market in Qatar in 2013.
billion QAR
1.1
billion 40 | The Edge
and an increase of 11 percent, from QR7.6 billion in 2012.
Tech start-ups
Renting apartments made easier in Qatar A new mobile application aims to make the search for an apartment to rent in Qatar much easier. Developed by two Qataris at the Qatar Business Incubation Center (QBIC) over eight months, Rinfo was officially launched in early February and is available free of charge on Google Play and Apple App Store, reports M. Iqbal. The idea behind the app is simple: instead of having to browse through hundreds of listings online and in the newspaper, could it be easier to forward your requirements to the real estate companies in Qatar and have them get back to you? That is exactly what Abdulahmeed Al Yousef – a senior business development manager at CBQ – had in mind when he began developing Rinfo about two years ago. He went with the first version to his best friend Saud Aldolaimi – an electrical engineer from the United Kingdom – who saw the potential in the idea and joined as a co-founder. Two years later, and after having being incubated at the QBIC, the app was ready for release. There is a simple registration process when you first install the app, which collects no personal information. Subsequent boot-ups present you four options from which to choose: 1. a live feed, where real estate agents advertise their recent deals; 2. a way to generate a request to send to real estate companies with your requirements; 3. a directory of all the real estate agents and companies signed up for the service; and 4. a place to follow up on the requests you have already generated. All requests generated by a user go to the real estate agencies and agents signed up with the service. They can then get back to the customer with options, according to Aldolaimi. “With Rinfo, your personal details are not required. All other alternatives require you to give you mobile number and personal details to agencies,” he said. The application also makes it easier for the real estate agents, as they receive all the requests on their phones, furthered Aldolaimi. “It was not hard to convince them to sign up. They could see the business potential right away.” Aldolaimi said they plan to keep the app free for end users. Instead they will make money by charging fees from real estate companies. The app is currently on Version 1.0.2, Al Yousef and Aldolaimi have plans to add features to Rinfo as they go along. The ambitious duo are aiming to make Rinfo “Our solution also does away with the the “app of the real estate problem of expired listings, where the market before the end of properties have already been rented out,” said Saud Aldolaimi, cofounder of Qatar’s this year”. recently released Rinfo real estate app.
Under the patronage of:
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H.E. Prof. Dr. Tawfik A. M. Khoja Director GeneralExecutive Board, Health Ministers’ Council for Cooperation Council States, Saudi Arabia
Dr. Abdulla Al Hamaq Executive Director Qatar Diabetes Association, Qatar
Prof. Salman Rawaf Professor of Public Health, Director WHO Collaborating Centre Director Imperial College London, UK
Prof. Dr. Peter Schwarz Department of Medicine III, Prevention and Care of Diabetes University of Dresden, Germany
Dr. Khaled Abdul Rahman Tayeb Vice President, Diabetes Committee, Ministry of Health; former President, National committee of Diabetes, Director Diabetes Center Al Noor Hospital, Makkah, Saudi Arabia
Key Benefits of Attending: > Connect with policy makers and major stakeholders to create new policies and strategies for preventing and controlling diabetes > Review advanced technologies for treatment of diabetes > Review innovative approaches to managing the complications of diabetes > Discuss cutting edge advancements in drugs research and surgical innovations > Explore novel therapies in diabetes treatment > Understand the genetics of diabetes > Obtain CME accreditation by attending this congress > Learn from an outstanding speaker faculty featuring more than 30 experts from key hospitals in the region Supported by:
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Qatarisation 2.0: Building workplace skills as a critical priority Enhancing workforce employability: How Qatar can make the most of the potential of its youth According to the MENA Labour Market Confidence Index ‘14, a recent study representing the views of more than 1250 human resource leaders, one of the most critical sources of talent for organisations across the region is the quality and availability of entry-level candidates to support their ambitious growth plans. The feedback on the quality of entry-level graduates remains mixed and there is clearly a lot to be done in fostering work readiness and building critical employability skills to prepare the younger generation of Qatar and the greater region for the workplace. David Jones, Radhika Punshi and Namrata Budhraja of The Talent Enterprise explore the subject further exclusively for The Edge.
cover story | youth development
W
ith more than 60 percent of the population under the age of 30 in the broader region (International Finance Corporation, 2011) and the number in excess of 50 percent across the Gulf Cooperation Council (The Talent Enterprise, 2014), the number of children and youth is at an all-time high across the Arab World. According to the United Nations Development Programme (UNDP, 2010), this “has resulted in the most rapid growth in the number of young people in the region’s modern history”. Thus to meet the growing demands of a fast accelerating population and to move towards a more diversified, competitive, knowledge economy, the challenge is ever more on the private sector to create jobs and provide opportunities for young people. The region has a compelling chance to tap into its demographic endowment due to its ‘youth bulge’. However, whilst having a young working age population is necessary to of course achieve this, it is not a sufficient condition for enhancing productive capacity required to drive economic growth on its own. The energy and aspirations of the region’s young people need to be channelled in the right direction in terms of developing their skills and providing positive work experiences. Indeed, despite the stated demographic dividend and current surplus of youth, one of the essential factors inhibiting employment of young nationals is that private sector employers believe that young people do not have the required skills for the workplace. The question remains: how do young Qataris make themselves more attractive for private sector
employers? And, just as importantly, how do private sector employers make themselves more attractive for young Qataris? Employers have to reflect and answer honestly whether their current employment practices and internal communication channels are really engaging enough for young Qataris. With the most common age of a Qatari citizen currently at 24 years old, are your human resource policies really talking the same language as that of your target group for attracting and retaining the workforce of the future?
Education to employment: The missing link
Put simply, the current transition from education to employment fails for many employers and young people. Firstly, there is a lack of information and support when young people are making education and career choices. In a recent global study (McKinsey, 2012) on the growing gap between education and employment, less than half of the students surveyed were confident that they would study the same subject if they were given the choice again. 40 percent of youth also reported that they were not familiar with the conditions and requirements of employers within their regional labour market.
It is estimated that changes take more than a decade, representing a real danger that today’s system is producing skills for yesterday’s workplace.
Proportion of youth population to total population in the GCC by 2015 GCC UAE Youth population Total population
Qatar Saudi Arabia Oman Kuwait Bahrain 20,000,000
40,000,000
60,000,000
Source: Source: Research by The Talent Enterprise (2014); United Nations, Department of Economic and Social Affairs, Population Division (2013)
44 | The Edge
Secondly, there is a real disconnect between key stakeholders on the issue of future readiness of students for the workplace. There is minimal alignment between educational providers, employers and students. It is reported that less than half of students and employers believe that the education system has prepared them for the workplace, compared to 71 percent of educational providers. According to other estimates, many students report that they need to wait six to 12 months to find employment, and more than 50 percent are unable to do so in their chosen area of study. How can we make our highly sclerotic and segmented labour markets more efficient? The government has a dual role to play in this regard, both as the prime employer of Qatari national youth and as a regulator of both the public and private sector education provision and labour markets. Qatarisation is a central part of the achievement of the Qatar National Vision 2030, which aims to effectively achieve the transition towards a knowledge-based
youth development | cover story
A fresh approach is required by all stakeholders, including educational institutions such as Qatar University (pictured), the government and the private sector, to better prepare Qatar’s youth for future success and fulfilment in the workplace, argue the authors. (Image Arabian Eye)
One factor inhibiting employment of young nationals is that private sector employers believe that they do not have the required skills for the workplace.
economy from the current energy-based economy. Considering the halfway point between the inception of these goals and their prospective achievement in the present, what is required is the need to consolidate advances to date and accelerate our future performance more broadly. Ostensibly a broader-based approach to Nationalisation – Nationalisation 2.0, a reboot of traditional approaches – is required. A key priority, then, is to equalise public sector and private sector pay and benefits, in order to make the former more attractive. Only in the GCC, and especially in Qatar, is there such a gap between public sector pay and that available in the private sector. The irony is that of all the public sector employees, teachers remain the lowest paid with the poorest employment conditions. In fact Qatar is unique amongst the GCC countries in that it has the highest proportion of expatriate teachers in its public education system (Ridge, 2014). Further, policy challenges will also be considered with regard to the current time lag in educational reform and impact in the labour market. Even if we know and can agree today on what needs to change
in the formal curricula provided through education, it is estimated to take more than a decade to impact the labour market. This represents a real danger that today’s education system is focused on producing skills for yesterday’s workplace. Particularly in the private sector, organisations are more informal, networked and globalised than ever before, requiring entrepreneurial employees who would be considered disruptive failures in today’s didactic classrooms. In addition, the incompatibility of private sector employability demands and the educational product currently supplied is highlighted by the role of language in education. Whilst local and global commercial labour markets require a greater proficiency in English, governments are also concerned with protecting local national and cultural identities and social cohesion as top priorities. This may have the impact of reducing the priority on English language provision within the education system.
Hire for attitude, train for skill?
Research by The Talent Enterprise shows that the skills most in demand include digital design, social media and Web 2.0, urban The Edge | 45
cover story | youth development
planning, technology and analytics, among other highly contemporary topics. But where are the courses to provide these skills? Moreover, further research indicates that employers are often looking for skills that go beyond qualifications and experience. Moving away from the conventional approach of cultivating technical skills amongst the youth, the importance of fostering foundational employability and life skills in our youth cannot be stressed enough. All over the world, and indeed in the region, employers are resorting to the mantra of ‘hire for attitude, train for skill’. Current advances in behavioural sciences, especially the fields of Positive Psychology and Positive Education and may be able to significantly contribute to the research and development of evidence-based practices in enhancing employability and life skills. Though labelled differently (virtues, life skills, soft skills, social and emotional skills, learning mindsets, employability skills, etcetera) building character strengths and strengths in young people have long been considered essential for social, personal, and vocational success. Critically, it has been established that these skills can be developed and practised, just as we can do with academic subjects or learning a new language. Arguably, having a positive mindset and possessing key characteristics are the single-most important determinants of achieving success in life and work outcomes, such as academic performance, productivity at work and even in aspects such as being able to find a job.
60%
The percentage of the population under the age of 30 in the broader Middle East and North Africa region.
50%
The percentage of regional graduates unable to find employment in their chosen field of study.
40 %
The percentage of youth who reported that they were not familiar with the conditions and requirements of employers within their regional labour market.
Expatriate 3%
National 17%
15%
Below Average Average
Below Average Average
Excellent
Excellent
58%
68%
Source: Source: Research by The Talent Enterprise (2014); United Nations, Department of Economic and Social Affairs, Population Division (2013)
46 | The Edge
These characteristics include key aspects such as the ability to deal with setbacks (resilience), set long-term goals (grit), selfefficacy (self-confidence), being empathetic and working with others (social intelligence) and achieving a sense of meaning and contribution that is beyond one’s own immediate zone of concern (pro-social purpose). It is also equally critical to focus on youth motivation, inculcate work ethics and establish the right incentives for the younger generation to focus on their personal and professional development. These skills can be imparted through the K-12 education system and in higher education by being incorporated into the curriculum as part of overall youth/character development, or delivered in more innovative ways using technology and apps that appeal to the younger generation.
Square pegs, round holes
Overall quality of entry-level candidates in the GCC
38%
Qatar is unique amongst the GCC countries in that it has the highest proportion of expatriate teachers in its public education system.
Arguably, an unintended consequence of Qatarisation has been that as a result of focusing on quotas, many young Qataris may be the wrong people for the wrong jobs. Someone who excels in customer service may be working in the back office, and another young national who loves creative design may be working as an accountant. Sadly, Talent Enterprise encounters this phenomenon in almost every organisation, private or public sector that it works with. This must change. Every individual has something unique they bring to the table, their own personal signature strengths, and as part of Qatarisation 2.0 it must be to ensure that ‘right’ people are being assisted in making the right academic and career choices, based on their strengths, aspirations and aptitude. To date, many such decisions
The Talent Enterprise’s approach to ‘Nationalisation 2.0’
HR strategy Apart from preparing young Arabs for the workplace, it is critical to focus on youth motivation, inculcate work ethics and establish the right incentives for the entire younger generation of the region to focus on their personal and professional development. (Image Arabian Eye)
Less than half of students and employers believe their education has prepared them for the workplace, compared to 71 percent of educational providers. are based on family or peer pressure, or what seems to be the most popular or socially acceptable academic or career choice. Hence, focusing on a strengths-based approach will tremendously help young people to identify careers that they would enjoy and be passionate about. Career development professionals need to shift their orientation to career guidance, which will help candidates identify their key strengths and passions and then match these strengths to prospective careers. The strength-based approach to career development is based on the simple assumption that each individual has something that they are good at and that these strengths can help them to choose appropriate careers and action plans to reach new goals. If more people spend more time working in areas that truly engage them, their personal productivity, that of their employer and indeed the whole nation, will undoubtedly be boosted. Focusing on strengths allows both the individual and the employer to engage in a meaningful, structured change and development process. With this unprecedented growth in local youth, there is an urgent need to elevate the level of career guidance delivered in the region. It is imperative that the key stakeholders – educators, career guidance professionals, employers and policy-makers, play their role in fostering these essential skills in the youth. Career
guidance professionals in particular, and educationalists in general, are in a critical position to improve the efficiency of local labour markets throughout the GCC, including Qatar. They need access to more labour market information, a closer working relationship with employers and crucially a repository of contemporary psychometric tools and assessments that they can leverage as part of the overall guidance process. Their role as gatekeepers and coaches are crucial in enabling the legions of young Qataris entering the workforce for the first time and ensuring that their transition from education to employment is a positive and productive one. The Talent Enterprise is a leading regional initiative dedicated to co-creating innovative and evidence-based solutions towards employability, nationalisation, talent and leadership. They have developed a strengths-based, behavioural change programme to foster employability skills and build foundational life skills, aligning the latest research and practice in positive psychology, positive education and contemporary social science, with the needs of the labour market in promoting employability and work readiness.
+ Employer branding
+ Recruitment & selection
+ Talent management & development
+ Total rewards & benefits
+ Engagement & retention
Nationalisation Version 2.0 The Edge | 47
Of
Oil
The conspiracy is equally debunked and supported: by capping production, is the Kingdom of Saudi Arabia, supported largely by all the nations in the Organisation of Petroleum Exporting Countries (OPEC), attempting to price out the nascent unconventional shale oil and gas revolution in the United States to preserve the basis of their global influence? And in doing so, has a tussle between these countries and those that advocate a higher oil price begun? And what are the real repercussions of all of this anyway? Who, economically, are the ultimate winners and losers? The Edge’s global energy editor Simon Watkins offers analysis.
48 | The Edge
and
Money... Winners and Losers in the great crude price tussle of 2015
The Edge | 49
feature story | of oil and money
D
espite some small spikes of late, there seems little prospect of any material upturn in the oil price any time soon, with the Saudis having recently reiterated that they are happy for it to fall to under USD20 (QAR73) per barrel (pb) if required. Some leading indicators have emerged showing that a degree of global economic rebalancing may be taking place. For example, the US oil rig count in January/ February saw its biggest period-on-period fall since 1991, and is already around 15 percent below its October 2014 peak. However, there has not yet been any hard evidence of a meaningful slowdown in US output growth, whilst there have been signs of negative pressures arising in many emerging markets, including, of course, those with hydrocarbon-centric economies. The key question from here is how the oil price saga is likely to pan out, and which of the global economies most involved and affected will be the winners and which the losers. Now is arguably the right time to do this, as in terms of the supply/ demand balance, the most critical period will be in the next few months, with H1 global demand typically at least one million barrels per day weaker than H2.
US downsides and upsides
Certainly, in North America, against whom the current destabilising oil price crash strategy is thought to be aimed principally,
there have already been immediate casualties in the shale oil and gas industry. According to Norwegian global energy consultancy Rystad Energy, around one third of the 800 oil and gas projects scheduled for final investment decisions (FID) this year are “unconventional”. These are worth USD500 billion (QAR1.8 trillion) and total nearly 60 billion barrels of oil equivalent. In Canada, for example, French energy giant Total recently decided to postpone the FID on the Joslyn project in Alberta, with an estimated cost of USD11 billion (QAR40 billion). Also Royal Dutch Shell’s (RDS) liquid natural gas (LNG) project in British Columbia requires oil at USD80 (QAR291) pb to break even, according to Citibank. More generally, RDS’ chief financial officer, Henry Simon, indicated recently that it was “less likely” to go ahead with unconventional projects in West Canada if oil fell below that level. Which of course it now has. Even in the Gulf of Mexico off the US, one of the most attractive oil production areas in the world, projects are facing challenges. BP last year put on hold a decision on its Mad Dog Phase 2 deep water project here after its development costs rose to USD20 billion (QAR73 billion), and further delays on the field’s development are expected by industry experts. In sum, concludes Bertrand Hodée, senior analyst at Raymond James in Paris, any offshore project with a
Saudi Oil Minister Ali Al Naimi, seen here with Qatar Energy Minister HE Sheikh Mohammed Bin Saleh Al Sada at a recent energy conference, has been both derided and praised for his firm stance on his country’s refusal to cap oil output, which is seen by some analysts as largely the source of the recent decline in world oil prices. (Image Getty Images)
50 | The Edge
In North America, due to the current oil price crash, there have already been casualties in the shale oil and gas industry. development cost above USD30 (QAR109) pb would most likely be put on hold, at current oil prices. Having said this, the follow-through into the North American economy in general (and to the US in particular) is far from being negative and is actually a net positive. “The political dimension to the US – and, by extension, Western – economic recovery argues for sustained low energy prices, both to boost domestic spending, and to keep the price of exports competitively low,” Christopher Cook, director of international energy consultancy, Wimpole International, Scotland, tells The Edge. “Keeping the oil price low is all the more important now, since the announcement in October of the end of the US’ quantitative easing programme and the resultant strengthening of the US dollar, both of which would naturally conspire to stymie economic recovery,” Cook adds. Indeed, it is estimated that every USD10 (QAR36.4) per barrel change in the price of crude oil results in a 25 cent change in the price of a gallon of gasoline. “For every penny that the national average [price of gasoline] falls, more than one billion dollars per year in additional consumer spending is estimated to be freed up,” Michael Green, a spokesman for the American Automobile Association in Washington, breaks it down further. Moreover, with President Barack Obama’s Democrats polling low, and elections less than two years away, it is particularly apposite to notice, says Wimpole’s Cook, that, “Although crude oil prices matter to those involved in producing oil or refining oil into products, most Americans, and the policymakers who represent and serve them, are mainly concerned with the price of gasoline.”
of oil and money | feature story
Every USD10 pb drop in the oil price shaves 3.4 percent and 4.2 percent of GDP from fiscal and current account balances, respectively in the GCC economy.
the potential scope for oil-driven local economic damage, the size of the local energy sector – without regard for the destination of that production – is an important metric, and oil accounts for around 50 percent for some of the Gulf States: Kuwait, Saudi Arabia, and Iraq [see chart],” Dominic Wilson of Goldman Sachs, in New York, tells The Edge. “That directly translates a decline in oil prices into a proportional decline in gross domestic product (GDP),” Wilson adds by way of explanation, “[which] suggests that, given a 60 percent decline in oil prices – which is roughly the size of the decline in front-month WTI crude oil over the last six months – nominal GDP in Kuwait and Saudi Arabia, for example, would decline by more than 25 percent, which is greater than the damage experienced in 2009.” Moreover, according to latest research from Bank of America Merrill Lynch (BAML),
USD
745
BILLION
Equal to QAR2.7 trillion, this is the Saudi Arabian foreign currency reserves – as at end-2014 – with which to service a fiscal deficit for an extended period if necessary, for example in a sustained run of low global oil prices.
In fact, in this context, according to the Energy Information Administration’s recent special report What Drives US Gasoline Prices? Brent crude oil prices are more important than West Texas Intermediate crude oil prices as a determinant of US gasoline prices in all four regions studied, including the Midwest. As such, Cook tells The Edge, it is entirely feasible (in line with comments from a number of senior commodities traders) that the US has for some time been constructing a short-term gasoline-led collar on Brent crude oil prices. In other words, they have been selling in the spot market, which has created the current contango market – with a corollary effect on other oil grades, and negative knockon effects for the major OPEC producers, including, of course, Saudi Arabia. “This would boost domestic consumption in the US, help mitigate against the strengthening dollar in the export markets, and neatly as well serve to curtail the basis of Saudi Arabia’s political influence in the Middle East, with which the US has grown increasingly uneasy,” Cook furthers.
Ripple effect
In direct contrast then, is the effect on those economies that are highly correlated to hydrocarbon prices, in particular those of the Middle East. “When thinking about
Gas flares from a shale fracking operation in North Dakota in the US. Oil and gas operations are booming in northern Colorado in the US. Though fracking and other low return energy projects have been stunted by the low oil price, many Western economies stand to benefit due to lower prices at the petrol pump. (Image Getty)
The Edge | 51
sector name | banner heading
Though it has huge foreign currency reserves, USD745 billion (QAR2.7 trillion) as at end-2014, in the longer term Saudi Arabia arguably has much to lose from a low oil price, as evidenced by Standard & Poor’s, which in the middle of February downgraded the outlook on Saudi Arabia’s key foreign currency AA- rating from ‘stable’ to ‘negative’. (Image Arabian Eye)
in New York, every USD10 (QAR36.4) pb drop in the oil price shaves 3.4 percent and 4.2 percent of GDP off fiscal and current account balances, respectively, in the Gulf Cooperation Council (GCC) economy as a whole. “As such, we now forecast aggregate twin deficits for the Gulf region, -8.4 percent of GDP on the fiscal side and minus three percent of GDP on the external side,” the bank recently stated. Consequently, the emphasis in the recent 2015 Saudi budget statement on the funding of projects already suggests that new ventures could be delayed, adding to already tightening liquidity across the GCC. “With the increased fiscal pressure of a prolonged oil price slump, we would expect capital expenditures to bear the brunt of the adjustment, as per historical experience,” concluded BAML. The ramifications of the oil price decline on Saudi’s reputation within the global oil industry have also very recently been extremely negative. According to a number of senior industry figures, the country’s energy giant, Saudi Aramco, has asked oilfield services companies to lower their charges – by at least 20 percent - in a move to reduce its costs in its desire to maintain current production levels even against the fall in the oil price. Although analysts expect Aramco to maintain its overall rig count steady, despite many international oil companies (IOCs) in Europe signalling that they are likely to reduce the number of their drilling rigs in order to 52 | The Edge
make savings, Saudi Arabia’s approach will clearly do little for its reputation as the dominant power in the global oil industry. This notion is underlined further by the recent suspension of its plans to build its USD2 (QAR7.3 billion) clean fuels plant (CFP) at its largest oil refinery in Ras Tanura, despite it having been lauded by the Saudis as a major cornerstone of its development strategy to improve its environmental credentials.
For the key influencer of the current oil price – Saudi Arabia – the stakes are the most high, in purely economic terms, but – when factoring in geopolitical concerns in the Kingdom – could, in fact, be even higher.
The view from Doha
Qatar, of course, is also a major producer of oil. Nonetheless, major ratings agency Standard & Poor’s retained its AA with a ‘stable’ outlook rating for Qatar’s economy, despite the fact that – along with Saudi Arabia – hydrocarbons account for up to 90 percent of its fiscal revenues as well. The key reason for this, according to Stephen Anderson, managing partner of global management consultancy, PwC, in Doha, is firstly its strong position in the world’s natural gas markets. “Natural gas prices began to decouple from oil prices...in 2008-09,” Anderson says, adding “and natural gas is enjoying increasing popularity over other fossil fuels due to its lower carbon emissions.” There are caveats, of course, continues Anderson, in that Qatar needs to continue to strengthen its macro-fiscal capabilities, particularly in three core areas: first, by accelerating the deepening of capital markets and sources
The Middle East’s wealthiest individual investor - Prince Alwaleed bin Talal – has repeatedly been an outspoken critic of Saudi Oil Minister Ali Al Naimi’s apparent plan to wage war on American shale, which he has said could have catastrophic long-term consequences for the Saudi economy. (Image Arabian Eye/Corbis)
of oil and money | feature story
Brent oil prices required for select OPEC states to meet fiscal sustainability thresholds (USD/bbl) Goldman Sachs primary deficit break even (2015E production, in US dollars) 200 180 160 140 120 100 80 70 60 40 20 0
of funding; second, by expanding the government’s revenue base; and third, by managing government expenditure efficiently. “These measures will help to achieve the desired AAA credit rating, develop a business environment attractive to private and international investors, diversify the economy, and ensure prudent management of governmental expenditure,” Anderson concludes.
ya
ia
Lib
n
Ni
ge r
Ira
q Ira
go la
ia
An
Al ge r
r
Ar Sau ab di ia Ru ss ia
Qa ta
UA E
Ku
wa
it
Long-term effects
Debt as a percentage of gross domestic product (GDP)
Libya Nigeria Iran Iraq Angola Algeria Russia Saudi Arabia Qatar UAE Kuwait 0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Price needed to keep GDP/debt constant (USD/bbl) 250 200 150 100 50
after one year
ya Lib
ia Ni ge r
n Ira
Ira q
a
ia
go l An
ge r Al
Ar Sau ab di ia Ru ss ia
r Qa ta
E UA
Ku
wa it
0
after two years
Source: IEA, Haver, World Bank, African Development Bank, Goldman Sachs Global Investment Research
So, for the key influencer of the current oil price – Saudi Arabia – the stakes are the most high, in purely economic terms. But – when factoring in geopolitical concerns in the Kingdom – could, in fact, be even higher. Certainly, according to analysis by Deutsche Bank Emerging Markets Research, Saudi Arabia is equipped with sufficient government assets to weather the budget deficits that would result from a depressed oil price for a period of seven to eight years, assuming no changes to nominal spending. Indeed, it has a huge foreign currency reserve – USD745 billion (QAR2.7 trillion) as at end-2014 – with which to service a fiscal deficit for an extended period if necessary (see charts). However, the notion of doing this will not be universally popular amongst senior figures in Saudi Arabia. Ostensibly, they worry that rebuilding reserves levels may be extremely difficult in the future, given the likelihood of a permanently reduced hydrocarbons pricing complex going forward - or so says Sam Barden, CEO of SBI Markets, in Dubai. “Such concerns have been exacerbated by the recent death of the shrewd politicallyaware King...which has caused uncertainty amongst the tribes as to the long-term future of the House of Saud, and their place in it,” Barden tells The Edge. Notably in this respect, for example, a key figure in the country, and the Middle East’s wealthiest individual investor Prince Alwaleed bin Talal – has repeatedly been an outspoken critic of Saudi Oil Minister Ali Al Naimi’s apparent plan to wage war on American shale, which he has said could have catastrophic long-term consequences for the Saudi economy. This appears to be a view shared by Standard & Poor’s, which in the middle of February downgraded the outlook on Saudi Arabia’s key foreign currency AA- rating from ‘stable’ to ‘negative’. The Edge | 53
Duschinsky was voted the world’s second most influential communicator in social innovation behind Bill Clinton in 2013, by Twitter philanthropic platform Business of Giving. (Image Miles Masterson/ photosbymilo)
54 | The Edge
We live in the era of the conversation. Exclusive insights from global branding and marketing guru Jon Duschinsky
He was voted the world’s second most influential communicator in social innovation behind Bill Clinton in 2013, by Twitter philanthropic platform Business of Giving. He is also one of the people behind the worldwide phenomenon that was last year’s ALS Ice Bucket Challenge. On a recent visit to Qatar, the Conversation Farm’s Jon Duschinsky, whose clients include some of the largest global brands such as Unilever and Coty, shared his insights with The Edge’s Miles Masterson on social innovation, what he calls “CSR 2.0”, and how these can contribute indelibly to greater success in the modern global business environment. We live in what I call “the era of the conversation” and that means that we are all connected and we are all able to share ideas and belong to communities that are no longer limited by linguistics, geography or culture. Ten or 15 years ago, when I was growing up, if I wanted to belong to a community, it had to be physically located where I was, it had to speak the same language and it had to be pretty much the same culture as I was.
That’s what we were drawn to. Today, if you’re growing up and you’re 15, 20 or 25, you belong beyond borders.
What that means is that you can instantly connect with people who are like-minded. So you don’t have to be forced into a community and the kind of group think of wherever you happen to be. You can explore what’s important to you, and what’s happened as a result of this is
that we’ve found that the whole generation is arriving – and this is filtering up and down demographically – with a much stronger sense of values.
In business, this relates to the notion of the triple bottom-line. Now, everything we do has to be not just for financial profit, but about social profit and environmental profit. Those are the three key drivers of business and companies that put social good at the heart of their The Edge | 55
business interview | social innovation
For a time in mid to late 2014, the world’s social media feeds were inundated with images of people, such as this man in China, dowsing themselves in iced water, a viral phenomenon Duschinsky’s agency, the Conversation Farm, were instrumental in. “We helped create the conversation that led to the Ice Bucket Challenge. It is this change in paradigm that is so important. With a conversation, cause and effect are no longer linear,” says Duschinsky. (Image Getty)
business make more money today. If you look at the S&P 500 over 2014 and you take the companies that are deemed to have social good baked into their business model, and you compare them to those who are deemed to be the least effective in that area, they outperform them by an average of 30 to 40 percent.
Doing good allows businesses to make more money today. That is the reality of the paradigm. Some companies have corporate social responsibility departments that are basically there to give away money and to make the company look good. Or you have companies that have decided, because the CEO had a particular pet project, to invest in that particular pet project that has nothing to do with the core brand values of that organisation.
The ones that do it right are the companies that work out what they stand for. They work out why they really get up in the morning. What are they hoping to do? And then they take that and they feed it into the social space, whether it’s social or environmental, and they do good in the world that is coherent with the core business that they do. Those are the successful companies. 56 | The Edge
Now at the same time, there are billions and billions of dollars being thrown away every year by companies. My favourite example of this is a bank in Canada, which because its logo is green, has invested hugely in the environment. But if you look at the core values of the company, it’s all about customer service. They’re open all the time. They’re a bank that makes you feel that there’s a real relationship. So their core brand values are civic responsibility. But yet they’re spending a fortune on replanting forests. It’s great, but it’s got nothing to do with who they really are as a business.
“If you look at the S&P 500 and take the companies that are deemed to have social good baked into their business model, they outperform the others by an average of 30 to 40 percent.”
social innovation | business interview
The key is authenticity. If you look at the companies that people respect today, people respect authentic companies. They respect the companies that stand for something. They make products but they demonstrate what they’re made of by doing things that are in a social space as well. That’s what I would define as social innovation. It is understanding that people and the environment in which we live is as important to your consumers as the product you make. Social good has traditionally been giving money to charities. But social good in today’s context is anything that is meaningful and makes a difference to us or the environment in which we live. It’s no longer the purview of the charity, so we’ve got to get that mindset out of our heads.
CSR is Version 1.0. It is a start but actually is fairly unsophisticated. It’s giving away money. Social innovation is CSR Version 2.0. For example, Toms is a US shoe company that’s the fastest-growing company in their industry ever. They’re making heaps of money, but they’ve also baked into their business model the idea that if you buy a pair of shoes, a pair of shoes gets given to somebody who needs it. They went from zero to selling two million pairs of shoes in just under four years. And they feel like they’re making a difference.
Another example is Buckler, which is a medium-sized boutique fashion company with stores in London, New York and Los Angeles.
“What is it that you can do that makes the world a better place that nobody else can do because of who you are? That is the core of your manifesto moving forward as a company.” the modern era, but he was really harking back to jeans in the pioneer days of the frontier west and how the jean was the clothing that helped build America. And today it’s a thing used in an urban environment to get the new and future America built. People wearing jeans as they go about their urban business.
Okay, so this guy’s passionate about jeans. So what can we do with jeans that is going to help him demonstrate how this piece of clothing is relevant socially? And not just relevant to the person who’s going to buy a pair of USD200 (QAR728) jeans? So we created a new line of jeans in the store that you cannot buy, but every time you buy a pair of the traditional jeans, you get given a dog tag with a number on it and a pair of these special jeans – we called them Buckler Works – will be sent to people working for charities on the frontline, in the new frontiers today. People who work
They were hit quite hard during the recession, because they’re in this middle-range; they weren’t mass-produced, low-priced; nor were they luxury, which was doing fine. They were in this middle-ground that was getting really badly battered and when they came to us they were discounting their products very heavily. So the conversation that we had with them was to say, “Why don’t you look at how much you’re going to give away by taking 40 percent off your products and invest it in doing something that is going to allow you to grow your brand?”
We asked them, “What do you stand for as a company?” Often we say to clients, “If I was to get you 30 seconds with Anderson Cooper on C N N tomorrow, what would you say?” Most companies haven’t got a clue, and this company didn’t. So we helped them go back to the core of what they were. Essentially they’d grown out of the founder’s love for jeans and when he talked about jeans, he had this passion for the fact that it was the work clothing of
Duschinsky holds breakout US footwear brand Toms, who give a pair of shoes away to the needy for every one purchased, as a good example of social innovation in business. “Entrepreneurial leaders here in Qatar have the same opportunity,” he says. Find the problem that you’re passionate about, and then seek new and innovative ways of solving that problem,”he says. (Image Getty)
The Edge | 57
business interview | social innovation
for Doctors Without Borders. People who work for UNICEF, who are in the field, who are in Afghanistan, who are helping rebuild communities who struggle from warfare. Let’s take the jean back to the new frontier of today’s society, by giving it to those folks.
So we’re creating a bit of a community around the fact these are not just USD200 (QAR728) pairs of jeans, they stand for something in our collective consciousness. These jeans would get worn out in the field for six months and then they’d get shipped back and we’d put them up in store windows and tell the story of this particular piece of clothing and what it had seen over those six months and then we’d auction them and the money raised goes back to the charity that’s supported. That was the principle of the campaign. Again it’s saying whatever you happen to make, and it can be as basic as a pair of jeans, there is an opportunity for you to put social good in your business model and do something that is going to get people’s interest. It’s going to tell a bit of a story, and is going to allow people to connect around your brand.
The reality around advertising is that people don’t want to be told what to think any more. People want to hear things from people they trust. We don’t trust brands anymore. We don’t trust governments anymore. We don’t trust institutions anymore. We trust our peers. We trust our networks. We trust the people who are part of our community. So if you are, as a company, still trying to advertise to people, then you’re already behind the curve because today people don’t want to be advertised at, they don’t want to be messaged at. They want to be involved in a conversation. They want to be given things to participate in, that they can feel ownership of and that are aligned with their values.
The best thing for a company is to pause whatever you’re spending on marketing right now and spend a bit of time working out what it is that you stand for. Now articulate that and then turn that into what I would call a manifesto: this is our mandate, this is why we do what we do. Once you’ve got your 58 | The Edge
34.2 million
The amount in USD raised by October 2014 for amyotrophic lateral sclerosis (ALS) research, thanks to the globally viral Ice Bucket Challenge. Like the Ice Bucket Challenge, according to Duschinsky, modern businesses need to reassess their entire reason for existing by throwing the cold water of their real social contribution on themselves. They can then emerge from it stronger with a social innovation strategy that will entrench and endear them in the market in which they exist. (Image Getty)
mandate, then you’re going to need an idea. A creative idea that allows you to bridge that mandate into the social good space. So once you’ve worked out what your mandate is, what’s the natural and authentic transition into the social good space? What is it that you can do that nobody else can do because of who you are? That’s the question that comes next. So who are you? And then what is it that you can do that makes the world a better place that nobody else can? That is the core of your manifesto moving forward as a company and of what you’re then going
social innovation | business interview
to begin to do, because once you work out which territory you can own, that nobody else can own, it’s got brand value.
There are opportunities to do this everywhere. For example, one of the major issues in Qatar is child obesity. How much does it cost to create a whole new language around food and give the kids tools to do this? Couple of million dollars? Tell me there’s not an entrepreneur in Qatar who would want to see this problem solved and doesn’t have a couple of million bucks to throw at it? Of course he does. Then let the government jump on board once it’s moving. People need to recognise that they have more power than at any time in history to create the future. They can create what they want for their countries and for their societies and their communities, and I would call out to entrepreneurs around that. Policy follows people. All of these problems that you think are government problems and that you think are social problems that cannot be dealt with, you can deal with them all.
If you look at the Zuckerbergs of the world and others, they’re saying, “Okay, so I’ve got a lot of money, I want to change the world.” How am I going to do that? Am I going to do it by giving money away to charities? Absolutely not. What I’m going to do is try and find innovative ways of solving these problems.” The entrepreneurial leaders here in Qatar have the same opportunity. Find the problem that you’re passionate about, and then seek new and innovative ways of solving that problem, get the train going. We are not the only people, as the Conversation Farm, doing this kind of stuff. The mechanics are there, it’s not rocket science. It’s just tapping into the fact that we live in the era of the conversation and recognising that and recognising that policy follows people.
What do you stand for? And then what space can you occupy that is meaningful to people? A space that only you can occupy because of who you are? Decide to do something in your space that gets people talking. And even better, if you can find a way of allowing them to
participate in whatever you’re doing, then you’ll get great traction, because people like to not just share things on social media, people like to curate and people like to create and people like to add and contribute.
I think back to when lots of people poured buckets of cold water over their heads for amyotrophic lateral sclerosis (ALS). A conversation is cheap, nimble, effective and organic and when we did the ice bucket challenge, it started with some work that we did trying to create a conversation around ALS in partnership with the World American Football. We highjacked American football, with a conversation created around this one guy who used to play, but who now has ALS and the fact that he was leading the fight and that there needed to be a conversation about this. It motivated a load of patients who came out of the woodwork and went, “finally we can have a voice!”
Those patients came together and were not just the pivot point in making the Ice Bucket Challenge go viral. They now have big networks, but they also convened, we worked with them to convene the world’s leading scientists on this issue. We locked 150 scientists in a room for two days and said, “Leave your egos at the door, and answer one question before we let you out of this room. And that is if money is no object and there are no barriers to collaboration, how are you going to cure this disease? How long’s it going to take and how much is it going to cost?” That was a year ago and now a business plan for a cure has been written by about 40 of those folks who continued to work together and have now nailed what it’s going to take to cure this disease, have put a dollar figure to it and they’ve put a timescale to it.
We did not create the Ice Bucket Challenge. We created the environment in which it could thrive and the community which could carry it. In short, we helped create the conversation that led to the Ice Bucket Challenge. It is this change in paradigm that is so important. With a
“Social innovation is understanding that people and the environment in which we live is as important to your consumers as the product you make.” conversation, cause and effect are no longer linear. A conversation is organic. When we did the work to change the conversation around ALS, could we have predicted that it would turn into the Ice Bucket Challenge? No, we couldn’t. But we did know that by changing the conversation, by building a community around the cause and by getting people talking about the issue we were creating the space for something truly remarkable to happen. And happen it did.
But you must remember there’s no one size fits all on this. You need to have a nod from the CEO. There are other companies where you’ve got a CMO who really gets it and understands that this is not traditional marketing. However, there is one truth here which is you can’t do this on your own. You can’t do it internally. You cannot create the manifesto and an understanding of looking at the problem differently from within your own. And then what’s very interesting is once you start to get to the point where you’re getting a manifesto down on paper, you share that with staff and people start coming up with ideas and initiatives and want to lead things. So a lot of this can happen quite organically as well. Social innovation releases an energy in an organisation that’s just immense. Jon Duschinsky was brought to Qatar by The London Speakers Bureau. The Edge | 59
Special Section:
THE SUN & SUSTAINABILITY How Qatar plans to harness the power of solar energy Investigating the viability of sustainable energy solutions and solar power in Qatar
Exclusive:
Eng. Saleh Al Marri, head of Renewable Energies Technologies Section at Kahramaa, discusses Qatar’s ambitious solar Mega Reservoir Project
The Power How Qatar plans to harness the power of solar energy
“The plummeting price of renewables is creating a historic opportunity to build a clean, sustainable energy system and avert catastrophic climate change in an affordable way,� says Adnan Z. Amin, director general of IRENA. (Image Corbis)
With year-round sunshine and a growing demand for energy, a country such as Qatar seems ideal for solar energy projects, though these are not without challenges, such as cost and harsh weather.
62 | The Edge
solar energy | special section
of The Sun Renewable energy is in nascent stages in Qatar. While the country has excellent solar energy potential and limited prospects for wind, biomass and tidal energy, it has negligible renewable energy capacity and no renewable energy legislation in place. Qatar experiences moderate wind speeds, which are suitable for small wind turbine generators for water pumping or to produce electricity at remote locations, such as isolated farms. Biomass energy potential in Qatar is largely contributed by municipal wastes and a 34 MW waste-to-energy plant is already in operation at Domestic Solid Waste Management Center at Messiaeed. Moreover, solar PV and concentrated solar power are well suited to local climatic conditions and serious efforts are already underway to tap Qatar’s vast solar power potential. by Salman Zafar
Q
atar’s solar energy future is steadily developing. With average daily sunshine of around nineand-a-half hours, low cloud cover conditions and seemingly plentiful space, there is great scope for small, medium as well as largescale solar power projects in the country. Qatar’s global horizontal irradiance is 2140 kilowatt hours (kWh) per square metres (m2) per year, which makes it well suited for solar photovoltaic (PV) systems. The country is geographically well positioned to tap its tremendous solar energy potential and has set a target of two percent renewable energy contribution in the national energy mix by 2022. Solar energy has multiple advantages for Qatar in the form of energy security, improved air quality, reduced greenhouse gas emissions, employment opportunities, apart from augmenting water and food security. Eng. Salah Hamad Al Marri, head of state electricity and water corporation Kahramaa’s Renewable Energy Division, regards energy security as the main driver behind Kahramaa’s foray into the solar energy sector as Qatar’s electricity is currently produced via gas turbines and relying solely on fossil fuels for energy is a
Qatar’s entrance into the solar sector has been boosted by its emergence as a regional research and development hub and transformation into a knowledge-based economy.
9.4
hours
The average amount of sunlight in Qatar per day. high-risk proposition. “Any interruption in oil and gas supplies would have huge implications on our energy resources and for the government,” Al Marri explains (see full interview on page 70). Qatar’s entrance into the solar sector has been boosted by its emergence as a regional research and development hub and ongoing transformation into a knowledge-based economy. Currently, efforts have focused on developing solar capacity in the country through research centres, universities, utilities and pilot projects, and a number of institutions including Kahramaa, Qatar Foundation, Qatar National Food Security Programme (QNFSP) and Qatar Science and Technology Park (QSTP) are actively working on this front. In fact, the number of institutions and companies in Qatar’s solar sector has rapidly multiplied in recent years.
Hurdles to overcome
Nevertheless, there are challenges. The largest barrier to growth of the solar sector The Edge | 63
special section | solar energy
Relative energy production
Energy output versus cleaning fequency 120% 100% 80% 60% 40% 20% 0 Weekly
2 months
6 months
Module cleaning frequency
Relative energy production
Heat Losses 120% 100% 80%
Extra output if kept at 25 C
60% 40% 20%
crystaline slilcon
Actual energy output
thin film
0
PV Type Key findings from study of performance of 30 solar technologies at QSTP (Source: GreenGulf)
Solar power systems are still considered to be highly expensive for Qatar, which has abundant and cheap supply of fossil fuels for power generation. “Renewable energy projects across the globe are now matching or outperforming fossil fuels, particularly when accounting for externalities like local pollution, environmental damage and ill health,” says Adnan Z. Amin, director general of IRENA. “The game has changed; the plummeting price of renewables is creating an historic opportunity to build a clean, sustainable energy system and avert catastrophic climate change in an affordable way.” Soiling of solar panels is another challenge to overcome for Qatar. Solar cells are usually designed for countries with mild and dirt-free weather, like Germany, Japan and the United States. On the other hand, Middle East nations experience harsh weather charactersied by frequent sandstorms, which result in accumulation of dust on solar panels. A recent study at the Solar Test Facility at Qatar Foundation showed that soiling reduces PV power output by 10 to 15 percent per month and most solar cells actually perform worse as they get hotter. Lack of rain to wash off dust from solar panels is a major problem for an arid country such as Qatar. Almost all freshwater in Qatar is produced by an energy-intensive desalination process, so using large quantities of water for PV cleaning is an unsustainable option. An efficient, low-water technique for tackling the menace of soiling is of paramount importance to ensure the success of solar projects in Qatar.
in Qatar has been the lack of renewable energy policy framework, legislations, institutional support, feed-in tariffs and grid access. Qatar requires a strong, visionary and coherent renewable energy policy as well as a flagship initiative, such as Abu Dhabi’s Masdar City, to accelerate its emergence in regional as well as global cleantech arenas. The power sector is solely dominated by the state-utility Kahramaa, which may discourage entrepreneurs and Independent Power Producers (IPPs) to enter the local market. Another critical hurdle is the price competitiveness as solar power systems are still considered to be highly expensive for Qatar, which has an abundant cheap supply of fossil fuels for power generation. This is despite the fact that in 2015 for the first time, demand for PV cells will outstrip their manufacture, and the cost of generating 2015 solar power has reached parity or dropped below the cost of fossil fuels for many technologies in many parts of the world, as mentioned in the recent IRENA report.
Kahramaa is spearheading efforts to transform Qatar into a regional solar hub. Kahramaa’s first solar power facility, to be setup in Duhail over 100,000 m2 area, is expected to be operational by 2016 with a generation capacity of 15MW. Kahramaa has targeted a generation capacity of 200MW solar power at 60 sites across the country by 2020, head of renewable energies, technologies section, Eng. Al Marri estimates, tallying to roughly one million m2 of space. To make up for Qatar’s space constraints, the company plans to
“The plummeting price of renewables is creating an historic opportunity to build a clean, sustainable energy system and avert catastrophic climate change in an affordable way,” says Adnan Z. Amin, director general of IRENA. (Image Corbis)
The solar test facility at QSTP has been conducting research and development in the sector for a number of years and is beginning to produce data results. (Image Green Gulf)
64 | The Edge
Major initiatives
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special section | solar energy
install solar panels on redundant surfaces such as roofs of power stations and water reservoirs, thereby utilising existing power transmission lines which will substantially reduce construction costs. Qatar Foundation has the largest pipeline of PV installations in the country and is producing around 85 percent of Qatar’s total solar energy. It recently announced the launch of one of the Gulf region’s first Energy Monitoring Centre (EMC) to manage its smart grid and monitor solar power generation across all sites within Education City. The EMC is part of the recently completed Solar SmartGrid Project that added a total of 1.68MW of new solar photovoltaic (PV) systems at various facilities within the QF campus. The project is also the first commercial PV project in Qatar to be granted approval for grid connection from Kahramaa. Qatar National Convention Center (QNCC) was the first Leadership in Environment and Design (LEED) certified project in Qatar and remains its largest rooftop solar system installed to date. QSTech, a polysilicon plant owned by Qatar Foundation and SolarWorld, is nearing completion and will produce 8000 tonnes
By the numbers: Qatar’s power sector Installed capacity
(2013)
8761 MW Installed solar capacity
(2014)
5 MW
Peak demand
(2013)
8761 MW Peak demand growth
(2013)
9%
Installed capacity requirement
(2020)
Solar energy target
(2020)
1.8
10861 MW 66 | The Edge
MW
1km = 1.5
2
million barrels of oil
One square km of land in Qatar receives solar energy (per year) equivalent to 1.5 million barrels of oil. per annum of high grade polysilicon for export to the world’s solar energy markets. QSTec is also constructing a 150MW Solar Module manufacturing facility and a 1.4MW solar farm at Ras Laffan. Qatar National Food Security Programme (QNFSP) has placed a strong emphasis on solar power as part of its master plan to devise a holistic solution to food security. QNFSP’s efforts are motivated by the objectives of the Qatar National Vision 2030, which aims to reduce reliance on fossil fuels, in addition to achieving environmental sustainability. Desalination powered by solar energy will not only ensure affordable, sustainable and secure freshwater supply but will also help increase the capacity for farming. According to Qatar’s Minister of Energy and Industry, Dr. Mohammed bin Saleh Al Sada, Qatar’s agricultural sector will require 750MW to 800MW of energy from renewable sources to deliver irrigation water and other production requirements such as cooling. The performance of PV systems is affected by local geographical and climatic challenges, including high temperature, humidity and soiling. QSTP and Chevron have established a test facility at QSTP, which will evaluate 10 to 20 different solar technologies, both photovoltaic and thermal. It is part of Chevron’s USD20 million (QAR73 million) Center for Sustainable Energy Efficiency at QSTP, which will also evaluate solar air conditioning and lowenergy lighting technologies. The aim is to provide local organisations with reliable data that will help them conduct solar feasibility studies, compare different technologies, and select the
right products. “The facility has gathered valuable data on performance of 30 different solar technologies, helping the industry optimise the performance of solar technologies in Middle East region since its launch in 2012”, says Omran Al Kuwari, cofounder and CEO of GreenGulf. To prevent solar testing laboratories simply working as isolated ‘silos’ the International Renewable Energy Agency (IRENA) has proposed a GCC Regional Solar Photovoltaic Testing Centres Network to link the region’s leading PV testing facilities. Their common data could then be employed by manufacturers, engineering contractors, financial institutions and research institutions to support technology deployment in the region. The network would aim for focused cooperation, to transform GCC solar laboratories into strong market players that can boost sector development. In addition to solar PV, Qatar has very good potential for concentrated solar power (CSP) as its direct normal irradiance (DNI) value is around 2008kWh per m2 per year, which is above the minimum threshold of 1800kWh per m2 per year. Qatar’s concentrated solar power potential can be effectively utilised in seawater desalination processes as well as large-scale power generation. CSP offers an attractive option to power industrial-scale desalination plants that require both high temperature fluids and electricity. CSP can provide stable energy supply for continuous operation of desalination plants, based on thermal or membrane processes, in Qatar. Leading CSP technology companies are taking a keen interest in the Qatar solar market and rapid developments are expected in the coming years. Like the sun that beats down high above the Arabian Peninsula it calls home, the future of solar energy in Qatar seems steady and bright.
Salman Zafar is a consultant, advisor, entrepreneur and writer with expertise in waste management, renewable energy, environment and sustainable development.
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Security in Energy:
Kahramaa Solar Amb An exclusive interview with Eng. Saleh Hamad Al Marri, head of Renewable Energies Technologies Section, Conservation and Energy Efficiency Department, Kahramaa Corporation
a’s bition
solar ambition | business interview
Kahramaa’s head of renewable energies, Eng. Saleh Hamad Al Marri, tells The Edge that apart from energy security, Qatar is embracing solar power for environmental reasons and to provide another source in case there is a need for it in what he calls “site demand management”.
Water and utility provider for the State of Qatar, Kahramaa, recently revealed its plans for a Mega Reservoir Project, consisting of a network of five mega water reservoir sites across Qatar, which at completion would provide a week’s worth of water storage in accordance with the anticipated demand in 2036. Fortuitously, these facilities also presented Kahramaa the opportunity to announce a pilot renewable energy project that will result in solar panels being installed atop these reservoirs. The aim of the solar project, says Kahramaa’s head of renewable energies, Eng. Saleh Hamad Al Marri, is to contribute in a large part to the target of two percent of Qatar’s electricity output by 2020 that is to come from renewable energy. The Edge’s Miles Masterson spoke to Al Marri about the project and Kahramaa’s decision to pursue solar as a renewable energy solution for Qatar.
The goal as set by the state of Qatar for energy output from renewables by 2022 is 10,000 megawatts (MW). This is two percent of the total projected output required of 200,000 MW to power the country’s ever-growing demand for electricity by that date. (Image FotoArabia)
“We want to minimise gas releases such as CO2 and monoxide, and the other ‘Nox’.”
business interview | solar ambition
K
ahramaa of course has a vested and critical interest in any renewable energy project, explains Al Marri, through a connection to Qatar’s electricity grid, and as a provider of related facilities. “We have a strong collaboration with Qatar Foundation (QF) for this,” he says, in reference to research and development that has been conducted by these institutions in recent years, including facilities at QF, Qatar National Convention Centre and the Solar Testing Facility at Qatar Science and Technology Park (QSTP). Al Marri is clear as to the primary reason Kahramaa is taking renewable energy, in particular solar, so seriously: energy security. As all of Qatar’s electricity is currently produced via gas turbines, relying solely on fossil fuels for energy is a high-risk proposition, he says. “Any interruption in oil and gas supplies would have huge implications on our energy resources and for the government,” Al Marri explains. Thus the next reason is to provide an alternative to conventional electricity sources during peak periods, to provide another source in case there is a need for it in what he calls “site demand management”. Thirdly, but no less importantly, is the positive contribution utilising solar energy has on carbon and other noxious emissions inherent in hydrocarbon-based energy processes. “We want to minimise gas releases such as CO2 and monoxide and the other ‘Nox’ [nitric oxide and nitrogen oxide],” justifies Al Marri. The overriding solution, he then explains, is to develop what Al Marri calls a “cocktail” of energy sources, adding that as the sole state utility provider Kahramaa is the only corporation in the country to lead the sector. “If Kahramaa does not promote it, who will?” he asks rhetorically. “We know solar is too expensive at this moment, but we are trying to use it in a wise way, in order to minimise the cost. We are doing it in a very special way so as to not incur expenses for the land, because we are using our rooftops in our reservoirs; and we are trying to maximise the offset of the natural gas that would be burned, to produce this electricity, in order to sell it in the global market.”
The final frontier
Although it would seem to the casual observer there are ostensibly large tracts of unused land outside of the Qatari capital Doha, that
“You cannot use most of the spaces in the country, because these are either natural reserves or set aside for use for future generations. So this is why we are using the rooftops of our water reservoirs.” 72 | The Edge
As a provider of related facilities and custodian of the national power grid, Kahramaa is perfectly positioned to curate Qatar’s solar ambitions. (Image FotoArabia)
might be perfect for solar farms, which require a lot of space, Al Marri is quick to dispel such an idea. In doing so he also underlines the genius of creating a dual purpose for the mega reservoirs, as well as Kahramaa’s commitment to running its operations with a businesslike approach, despite being a state function. Space for projects of such scale, reveals Al Marri, is actually a real issue for Qatar. “We have good solar radiation,” he explains, “but Qatar is only 11,000 square kilometres (m2), which is not that big. And you cannot use many spaces or most of the spaces in the country, because these are either natural reserves or set aside for use for future generations. So this is why we are using the rooftops of our water reservoirs...which are areas that nobody else would use.” These rooftops, Al Marri estimates, tally to roughly one million sqm of space, and though he concedes not all of it might be wholly suitable, most of it is perfect for solar farms. “One of them, the first package at Al Duhain, is expected to be awarded this quarter,” discloses Al Marri. On the subject of a business-like approach, Al Marri explains Kahramaa’s motivation behind developing its relationship with renewable energy as one of clearly defined phases. Apart from the challenge in finding space – a key issue they have, of course, so far solved by utilising the reservoirs – he adds that there is some reluctance to embrace this new path and so they will be unrolling it package by package, learning from each and refining the process and expanding the reach and output incrementally. “We will do it step by step, in a very cautious way, just to make sure that we are on the right track,” confirms Al Marri. “We don’t want to spend a lot of money and make a mistake that could have been avoided because we did it too quickly...Kahramaa is working on a
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business interview | solar ambition
commercial basis. It’s a government entity yes, but we are working to increase our annual performance. We’ve made a few initial models and we have done preliminary studies to make sure that we are going to benefit from these projects.”
Advantages and disadvantages
The conversation then turns to the pros and cons of embracing solar in Qatar. On paper it can seem like an ideal solution for such a sunny climate, but there are some major challenges. The country also has some distinct advantages to leverage, though, as Al Marri highlights. Indeed, on the upside, a major plus for Qatar is that its electricity grid is relatively young. Some parts are slightly dated, he admits, but the vast majority of the network is less than 15 years old. “It is easy to make it compatible with solar,” explains Al Marri further, adding that apart from the photovoltaic cells (PVC) that make up the solar panels, most of the equipment used is the same and because there are electricity network facilities already installed at the reservoirs, such as an 11 kilowatt (KW) substation for which “the distribution is the same as for the pump house that is pumping this water, which also minimises the cost,” as Al Marri points out. “Maintenance and operations of solar is not that complicated and the main cost is the panels,” he continues. “The other issues you talk about are transformers or converters or cables. These are being used on a daily basis in the Kahramaa network anyway. So it’s not that big a deal. There are no new items or anything else that’s new to us. We just need to customise it for solar and that’s it.” Further advantages for Qatar are its connection to regional electricity grids and its proximity to well-developed solar and renewable energy infrastructures in surrounding countries such as Saudi Arabia and the United Arab Emirates (UAE), as well as membership of various regional and international energy-related bodies. These include the Gulf Cooperation Council Interconnection Authority (GCCIA), which joined the GO-15 Reliable and Sustainable Power Grids network in 2014, and the Arab Union of Electricity. “Also there is IRENA, which is the International Renewable Energy Agency,” furthers Al Marri, adding that such connections and relationships enable Qatar to learn from its counterparts in the region and internationally, through workshops and other forms of communication. “Other parties share their experience and we do presentations, we share our experience,” he explains. “This is how we learn to avoid mistakes made in Saudi Arabia or the UAE, for example... we have continuous cooperation and information exchange.” On the downside, the high expense of photovoltaic cells (PVC) themselves, as well as other aspects of solar farm installations have long been prohibitive factors. But recently the production costs have been reduced dramatically. Qatar companies are also beginning to manufacture PVCs and related products, though Al Marri insists that though they would be happy to support local entities, it must be cost effective. “We are looking for the best PVC panels,” he says. “If there is a local product we will support it heavily. But we will not support anything that’s not feasible. If it’s a really good product, we’ll support it 100 percent because we are here to support the sector.” Apart from the above, the extreme weather in Qatar is a major issue. The combination of excessive heat in summer, humidity and dust/sand can denigrate solar installations faster than elsewhere in the world. Al Marri, however, seems confident that this challenge can be overcome through continued research and development by entities such as the Qatar Environment and Energy Research 74 | The Edge
2% The percentage of its electricity output Qatar aims to be drawn from renewable sources by 2020.
Institute (QEERI), QSTP and Qatar University, and mentions an upcoming workshop aimed at specifically this issue.
Realistic goals
The goal as set by the State of Qatar for energy output from renewables by 2022 is 10,000 megawatts (MW). This is two percent of the total projected output required of 200,000 MW by that date. Al Marri believes this a realistic target. “In Japan or the United States or France, the mix is more in line with Qatar’s aims,” he adds. In terms of the headstart that these countries have had on Middle Eastern states in developing renewable, particularly solar, Al Marri explains that it has for a long time been more cost effective for them to do so due to the high oil price. The recent decline in oil price notwithstanding, he continues, “we have another issue that they don’t have. We have a water problem. One barrel of water costs us maybe double or triple of one barrel of oil. This is a big, big problem for us. So this is why we are thinking to use technology such as solar to desalinate water or to produce water from our plant with solar technologies.” Moreover, Al Marri reiterates the cautious approach taken by Kahramaa is the most sensible. “If you want to jump to any technology like solar, you cannot wait until the price of energy or the technology comes down, because this might only come after 10 years or more. Maybe by then it will be too late. So if you want to jump into something, you need to do it gradually, and not necessarily to go heavily in this industry immediately. So yes we are optimistic, but we are also very cautious and realistic,” Al Marri closes.
The goal set by Qatar for energy output from renewables by 2022 is 10,000 megawatts (MW). This is two percent of the total projected output required of 200,000 MW to power the country’s demand for electricity by that date.
Inside the minds of leading business figures
business insight A compelling voucher offer is valid all days of the week, offering a significant degree of savings 78 CEO and founder of The Entertainer Donna Benton speaks exclusively to The Edge on its business model, product selection, country inclusion and what it has planned for Qatar in 2015-16.
Qatar’s 2015 construction inflation forecast to reach eight or nine percent 76 In conversation with The Edge, Terry Tommason, partner and general manager at EC Harris Qatar, focuses on a broad range of issues affecting the increasing construction inflation and the impact the sliding international oil prices is likely to have on the construction costs in Qatar.
76
In the opinion of Terry Tommason, partner and general manager at EC Harris Qatar, “It is very difficult to predict the future trending of the oil price in the region and the impact that any protracted volatility will have on the market. Currently we are witnessing increased levels of concern from some clients, particularly within the public sector where funding is tuned to oil and gas revenues.”
The Edge | 75
business insight | construction costs
REAL ESTATE INVESTMENT
Qatar’s 2015 construction inflation forecast to reach eight or nine percent
In conversation with The Edge, Terry Tommason, partner and general manager at EC Harris Qatar, focuses on a broad range of issues affecting the increasing construction inflation and the impact the depressed international oil price is likely to have on the increasing construction costs in Qatar.
Please tell us about yourself, your experience, etcetera. I am a partner at EC Harris and currently lead the Qatar business as its general manager. In addition, I serve as the Doha city executive for the Arcadis Big Urban Client programme. With extensive experience across the Middle East, I lead all major programmes and projects across Qatar and am also responsible for the strategic development and project management of building projects across the Middle East. Prior to joining and setting up the Qatar business in 2010, I worked for most of my career as a property developer and investor in the United Kingdom and Europe. Construction inflation for Qatar is expected to rise this year. How will the increasing construction costs affect the investor sentiment? According to our internal reports, we forecast that at peak levels of activity, and without appropriate mitigating actions, there is a risk that inflation between 2016 and 2019 could reach 18 percent per annum, but in 2015, Qatar construction inflation is forecast to reach eight to nine percent. This could be further suppressed by the price of oil and the 76 | The Edge
ongoing spending reviews. Investors will inevitably be cautious around the regional market, predominantly due to the oil price projections. Notwithstanding this, overseas investors have historically b een cautious of Qatar. The inflation challenge in Qatar will unquestionably compound as we near the 2022 World Cup and we expect that most investors will be keen to mitigate their exposure by forward planning around their supply chain and starting their projects sooner rather than later. Investors will need to choose their targets very diligently during these years ahead and have a clear route of entry and exit with a robust risk plan. What are some key reasons behind rising construction inflation in Qatar? Can you talk about those, other than the 2022 World Cup? Qatar is a small country relative to its planned expenditure on built assets. It has the need to import much of its materials and labour and is constrained from a logistics perspective. Regardless of the 2022 World Cup, peaks have historically massively challenged countries in the Gulf Cooperation Council (GCC) in construction activity as a consequence of bottlenecks in accessing materials and labour. Qatar is not an exception
“As Qatar strives towards realising the goals laid out in the Qatar National Vision 2030, the country needs to continue to face inflation challenges as it invests heavily in construction projects.”
construction costs | business insight
in this regard and will have many extraordinary challenges to overcome in order to attract and retain the necessary resources and secure the enormous volume of materials it requires across the infrastructure and buildings sectors. The issue is exacerbated by the recovery in the United Arab Emirates (UAE) market and Saudi Arabia’s aggressive social infrastructure aspirations. Global demand for the best resources and base construction materials is also increasing and serves as a reminder that Qatar is not alone in its challenge to deliver large and complex programmes of work.
Terry Tommason, partner and general manager at EC Harris Qatar, told The Edge, “Qatar is a small country relative to its planned expenditure on built assets. It has the need to import much of its materials and labour and is constrained from a logistics perspective.”
Where do you foresee Qatar’s construction costs going after the 2022 World Cup? It is very difficult to predict what will happen post-2022 but we need to bear in mind what I stated earlier – the 2022 World Cup is not necessarily the primary driver for construction cost inflation in Qatar. The challenges were comparable in the lead up to the 2006 Asian Games in Doha and the subsequent real estate boom. As Qatar relentlessly strives towards realising the goals laid out in the Qatar National Vision 2030, I would anticipate the country to continue to face inflation challenges as it invests heavily in construction projects that develop its infrastructure for future generations post-2022. This is the beginning of that journey and certainly not the end. How will the increasing costs impact the current contractors in Qatar’s construction sector? The principal impact on contractors will be the constraints it places around their own supply chains. Securing resources and materials with a view to locking them down for the construction duration against a fixed price will not be for the faint hearted. Competition for resources and materials will be intense and contractors are unlikely to bear the burden of the risk as they have done to date. This will drive changes in how clients currently select and engage contractors, since the likelihood is that contractors will either no-bid
or heavily risk price their tenders as the market warms. Successful contractor engagement is therefore crucial to ensuring that Qatar is ready for 2022 and will require a quantum leap in trust and approach from all parties concerned. If at all, how will the ongoing dip in oil prices impact Qatar’s construction inflation? It is very difficult to predict the future trending of the oil price in the region and the impact that any protracted volatility will have on the market. Currently we are witnessing increased levels of concern from some clients, particularly within the public sector where funding is tuned to oil and gas revenues. We have examples of projects being deferred and in some cases being cancelled. If this trend continues it will of course reduce demand for resources and materials in the region which will, to some degree, suppress the rate of construction cost inflation. However in the case of Qatar, it is more likely that this impact will be short term as the 2022 World Cup deadline is immovable with major projects that are critical to the tournament. This is not just about stadia; it is about delivering some of the largest infrastructure and building projects in the world to facilitate the greatest show on Earth. Hence I’m afraid the challenge of inflation is not going to disappear anytime soon in Qatar although it may take slightly longer to bite deep. Which aspect of construction takes the biggest chunk of overall costs in Qatar and Gulf? Which aspect is showing most transition? The biggest impact on construction cost in Qatar, and the Gulf, is derived from the cost of the materials, which are dependent on the prices of the commodities (metals etcetra) that make up this quantum. Labour, whilst less significant, is an important component and the ability to get skilled labour into the Middle East will continue to face big challenges. The Edge | 77
business insight | entrepreneurship
LOYALTY PROGRAMMES
A compelling voucher offer is valid all days of the week, offering a significant degree of savings CEO and founder of The Entertainer Donna Benton speaks exclusively to The Edge on its business model, product selection, country inclusion and its plans for Qatar for 2015 and beyond. Tell us about the company. What prompted the founding of your company? I came up with the idea of The Entertainer after I left a job that did not work out back in 2001. Shortly after I left, I was driving down Sheikh Zayed Road and I noticed that there were a huge number of restaurants and attractions along the road, but realised that there was no incentive for people to visit them – and this is how the idea for The Entertainer came to life. I decided Dubai needed a powerful offer programme that would influence people’s decision making and drive them to try new outlets. During the first year, I did all of the corporate legalities to set the business up, recruited all of the merchants, oversaw the printing and production and did most of the sales myself, literally door to door. The first year the book came out, we had 97 merchant partners and sold 983 products. This year we have over 10,000 merchant partners, with close to 500,000 users worldwide and drive USD1.3 billion (QAR4.73 billion) into the global economy. We still remain true to our original offer in our first book, which is always ‘Buy One Get One Free’. We enjoy great customer loyalty and a lot of the outlets in the United Arab Emirates (UAE) products have been with us since day one. What is The Entertainer’s unique selling point (USP)? From the outset I knew that USP of The Entertainer needed to be simple. I asked around the people I knew to try and establish what would make a compelling offer. The overriding feedback was that a compelling offer had to be valid seven days a week and had to give a significant degree of savings. With that in mind it was simple – I decided that the ‘Buy One Get One Free’ offer was a concept that would work for merchants and customers and this became my key USP. 78 | The Edge
What kind of rationale goes into including a particular product in The Entertainer? Our customers are top of mind when we think about a product. Will The Entertainer product support the lifestyle of our customers in that market? Will the product create value for our users? These are just some of the questions we ask before putting together our products. We also look to customise products for each market depending on customer preferences. How do you chose which merchants to include? Our team is always on the lookout for new outlets, concepts and experiences to include in The Entertainer. We hear of popular outlets or visit them and think, this would make a fantastic addition to our product. We are also lucky that there are a lot of outlets that have heard positive things about the Entertainer so they actually approach us and ask to be included. Across your global portfolio of products, what kind of differences or similarities do you encounter? We have over 51 products across 40 destinations in 15 countries – and we definitely see varying consumer tastes and preferences in each of these markets. In Asia, our customers are much more likely to eat out multiple times a week, and go on more frequent – though shorter – vacations abroad each year. In South Africa, our customers are more likely to eat out just once a week, and travel away from home for vacation far less frequently. And in the Middle East, where there are large families, we see many customers buying multiple products each year because they can save that much more with our offers for dining and activities in particular.
entrepreneurship | business insight
“Qatar is one of our ‘hero markets’ for 2015-16 – we are investing heavily in the product here. We have an office here now and we are investing in getting a team on the ground.”
Commenting on customer preferences, Donna Benton, CEO and founder of The Entertainer, told The Edge, “We have over 51 products across 40 destinations in 15 countries – and we definitely see varying consumer tastes and preferences in each of these markets.”
How do you decide when you want to include a new country? To be honest, I never dreamed we would be in 15 countries and become a global company. I was very focused on making the product successful in the UAE first. Then I started to think that it would be a welcome product in Qatar and so in 2008 we launched in Qatar, Oman and Bahrain. We committed our focus to these three markets to make them a success as I do believe that you have to crawl before you can walk. Some years later we launched across the GCC, but I still couldn’t have imagined the scale of our global growth. Then in 2012 The Abraaj Group acquired 50 percent of our company, which significantly sped up our expansion plans and has allowed us to become the global company we are today. Their investment also assisted with the development of our first The Entertainer smartphone app, which launched in November 2013. It was a huge step for us launching the first digital version of the Entertainer. Giving our customers a digital solution for redeeming Entertainer offers has helped us inordinately with the success of our new market launches. New markets expect you to be cutting edge and to offer a convenient and sophisticated product, and with the launch of the smartphone app, we have met those expectations. Is there any product/market development on the cards? We recently expanded into a number of new markets in Asia and South Africa and this year we are focused on going deeper in each of our markets. We will be busy increasing the number of merchant partners in our network and developing our existing
products to suit each market better. For example we have just released the first translation of our award-winning app – with Cantonese available in Hong Kong. We will be launching our GCC products in Arabic very soon. What benefits do you offer your members? Anyone who buys a product becomes a member. Entertainer Members enjoy exclusive monthly member offers at select outlets that are valid for use an unlimited number of times during that particular month. We also add new merchants throughout the year, and those who register themselves as members and download The Entertainer app have access to these additional offers throughout the year. Our members get regular e-mail updates on the monthly and new offers that are available to them. What lessons have you learned so far, and what are your plans for 2015-16? As a team our journey has been quite eventful. Since we have grown so much in a short time, we have all put in a lot of hard work and dedication to creating some great products. We have learnt a lot of things along the way but there’s one that stands out – if you believe in what you’re doing and have the passion to do it, there is no obstacle big enough to get in your way. Qatar is one of our ‘hero markets’ for 2015 to 2016 – we are investing heavily in the product here. We have an office here now and we are investing in getting a team on the ground to make Qatar one of the leading and most developed markets for The Entertainer. So expect to hear a lot more from us this year. The Edge | 79
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product & reviews
Reviews
2015 GMC Sierra Light Duty
T
he 2015 GMC Sierra Light Duty adds an all-new eightspeed automatic transmission to its powertrain roster, enhancing efficiency and refinement while maintaining capability. It is included on models equipped with the EcoTec3 6.2L V-8 engine. The Sierra’s new eight-speed transmission helps the pickup retain its 5443 kilogramme (12,000-pound) maximum trailering rating under newly adapted SAE J2807 Recommended Practices. Additionally, the entire lineup is available with a number of features engineered for serious towing, which features a 9.76-inch rear axle, heavy-duty rear springs, revised shock tuning, enhanced cooling and an integrated trailer brake controller.
The 2015 Sierra Light Duty range includes regular cab and two fourdoor cabs – the double cab and crew cab – body styles, all offered with 2WD and 4WD. Models and trim levels include the standard model, SLE, SLT and Denali (regular cab offered only in standard and SLE trims). The offroad-inspired All Terrain package is offered on double cab and crew cab models with SLE or SLT trim and includes the Z71 off-road suspension. Along with configurations to suit just about every need, Sierra’s range of technologies is tailored to the way customers use full-size pickups. The available 6.2L EcoTec3 V-8 is the most powerful engine offered in any lightduty pickup, with 420 horsepower and 624Nm of torque. It is matched with the all-new Hydra-Matic 8L90
eight-speed automatic transmission. The Sierra is constructed of high-strength steel that makes the frames and cabs stronger and lighter. Strategic use of aluminium alloys further reduces the weight of engines, front suspension components, hoods and other parts. Other features include driverfocused interiors featuring ample storage, multiple power and USB connections, a standard tie-down system in the rear, and this market segment’s only standard projectorbeam headlamps. Additional new and enhanced features for 2015 include the available spray-on bedliner now offered on all models; and a USB port is added to the upper glove box on SLE models equipped with the 40/20/40 front bench seat.
The Edge | 81
products & reviews
Read it:
Zero to One - Notes on Startups or How to Build the Future For those of us that live outside the technology/entrepreneur/start-up/venture capital headspace of the United States (US), and pay at the most passing interest to such matters, the name Peter Thiel will mean practically nothing. For the slightly more informed or interested, at best it will stir slight recognition, perhaps among the more knowledgeable will recognise the fact that he was a cofounder of PayPal. The truth is that, in these circles, Peter Thiel is widely known and revered, and a Google search of his name will also bring up the names of perhaps more well known tech/start-up/funding gurus in the US, such as PayPal cofounder Elon Musk or the likes of Mark Zuckerberg and Steve Jobs et al. Indeed, such is Thiel’s stature that Nassim Nicholas Taleb, esteemed author of The Black Swan, observes in Zero to One‘s liner notes: “When a risk taker writes a book, read it. In the case of Peter Thiel, read it twice. Or to be safe, three times. This is a classic.” Predictably, as can be gleaned from the subtitle of this book, it is filled with the observations and advice of
Thiel (and co-writer Blake Masters) for budding entrepreneurs and established businesspersons alike. But it also delves deeper than just that, and is in as many parts historical (such as covering the history of the dotcom boom and bust of the early 1990s); psychological (discussing, for example, the nature of people and secrets); and philosophical (Thiel asking, for instance “Can you control your future?”). So while on the surface Zero to One is all about encouraging entrepreneurs in creating new ideas and products instead of following tried and test models – to take risks, in other words – it is also much more than that. An engrossing read.
Available at Virgin Megastores in Doha.
Read it:
The 4-Hour Work Week - Escape The 9-5, Live Anywhere and Join the New Rich Like the above author, it may be difficult to find someone outside of the US that can correctly identify who Tim Ferriss is or what he does. But they may still have heard of his book The 4-Hour Work Week, which topped the New York Times Best Seller list shortly after it was published in 2007 and remained there for four more years. Since then the book has been translated into 35 languages and sold almost 1.5 million copies. Ferriss has also authored a couple of follow-up books along the 4-Hour thematic and runs a related blog, when he is not acting as an angel investor for startups of the likes of Facebook and Uber. To this expanded and updated version of the book he has added more than 100 pages of new content absent from the original, including references to new technologies and case studies of people who successfully followed what he wrote initially. In The 4-Hour Work Week, Ferriss advocates a formula for rejecting the traditional recipe for the average 82 | The Edge
working person’s life (school, study, work, climb corporate ladder, annual vacation, retire, die) and breaking out on one’s own, working as little as possible while, to paraphrase “making as much in a month as you do in a year and travel the world on a permanent holiday”. While it sounds like a dream, and perhaps it is (Ferriss has been in equal parts adored and derided for his theories), in entertaining and fascinating prose, he expands his view on how it is possible for anyone to become what he calls “the New Rich (NR)”, even you. Snake oil and fantasy perhaps, but oh so sweet.
Available at Virgin Megastores in Doha.
products & reviews
Sony Experia E4 Dual Most modern smartphones – no matter how advanced the operating system – have the same weakness: short battery life. Sony’s new Xperia E4 Dual aims to address that with a 2300mAh battery that promises up to two days of battery life (or longer, if the phone is in Stamina Mode). The 1.3 GHz quad-core processor promises fast performance, but it is the battery life that is being promoted a the real selling point of this product.
Acer Chromebook 15 Acer has expanded its Chromebook offering with a new 15.6-inch display (27 percent larger than the standard 13.3-inch), which provides users with significantly more real estate to view multiple tabs and apps. Acer is positioning its Chromebook 15 as a primary computing device, backing that claim with new 5th Generation Intel Core i3 and Intel Celeron processors, based on the Intel Broadwell micro-architecture.
Omega Seamaster Aqua Terra 150M In anticipation of Spectre, the upcoming James Bond film, watchmakers Omega have launched a limited edition Seamaster Aqua Terra 150M. While the Bond-inspired design is its most striking feature, the timepiece also has some hidden references: in a nod to the film’s fictional Agent 007, it is resistant to magnetic fields greater than 15,007 gauss.
Canon ImageFormula P-2018II Canon Middle East has announced the launch of its new ImageFormula P-208II portable scanner, with updated bundled software promising enhanced post-scan image processing, and built-in connectivity to cloud applications like Dropbox, OneDrive and Evernote. The P-208II is Windows and Mac compatible, and has a newly-designed paper feeder tray, which makes it easier to load multiple documents onto the 10-sheet automatic document feeder.
App Reviews by M. Iqbal
Cinema Qatar
Cinema Qatar keeps you updated on movies playing at all commercial cinemas in Doha. You can browse the list by movies or cinemas and can even see the expected Qatar release date of some of the upcoming films. Some features in the app are either badly implemented or not needed, but it does get the basics right: getting you a list of movies playing in your favourite cinema with their show times. Save for one annoying popup ad in the beginning, the app is fast, smooth and unobtrusive.
TuneIn Radio
This Internet radio app is the answer if you miss your favourite radio shows at home. It features more than 100,000 channels, making it easier for you to discover new channels, artists or songs and you can browse for radio shows, music, channels and podcasts. The free version is ad-supported, but a one-time payment of QAR36 gets you the Pro version, lets you record your favourite radio shows much like DVR.
Google Translate Google Translate is far from accurate but in most cases does a well enough job of getting the meaning across. It supports 90 languages, so just paste and go. You can even speak to it in one language and wait for it to translate it into another, though your mileage may vary from language to language. It also supports handwriting recognition.
The Edge | 83
MARCH 14-16, 2015 DOHA, QATAR
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