contents
February 2016
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52 “It’s a balancing act in the current market environment: on the one hand, you have to make sure that you are taking the appropriate actions from a cost perspective, but on the other you are investing for the future through training.” – Lorenzo Simonelli, president and CEO, GE Oil & Gas. According to Erhama Al Kaabi, senior advisor to the CEO at RasGas, Qatarisation is not a mere number to be achieved. “For us, it is a commitment to support and promote the development and success of Qataris who add value to the company,” he says.
cover story 36
Qatar’s vulnerability to environmental damages due to growing e-waste is APOCALYPSE no less than Analysing the effects of Qatar’s any other electronic throw-away culture developed nation’s, but the country lacks local infrastructure and legal framework to deal with this problem, writes Syed Ameen Kader.
Business Interview: Lorenzo Simonelli, president and CEO, GE Oil and Gas, on challenging times
- February 2016
Vol. 8 No. 2
- QATAR’S BUSINESS MAGAZINE - Vol. 8 No. 2 - Issue 76 - February 2016
E-WASTE
QATARISATION SPECIAL FOCUS Creating career development for Qatari nationals
DOHA: DESTINATION OF CHOICE UK MICE expert Phil Clements on Qatar’s potential as a premier events location
100% Qatari
PLUS:
Qatar revises LNG forecast price Regional corporates prepare for slower growth The importance of transparent property valuations Is Qatar under increased threat of cyber attacks?
Connect with us online www.gingercamelmedianetwork.com/edge facebook.com/theedgeqatar twitter.com/TheEdgeQatar linkedin.com/company/ the-edge-magazine-qatar
features Phil Clements believes that Qatar’s focus on sporting events and education is the right formula to propel its meetings, incentives, conferences and exhibitions sector. (Image Josoor Institute).
Special Feature: Creating career development for Qataris 46
Qatarisation is the process of creating a quality employable talent pool comprised of Qataris. The Edge speaks with a variety of stakeholders to gauge this mandate and the impact it has had on their businesses.
sectors
Business Interview: Doha: Destination of choice 42
Finance and Markets 25
Business Interview: Full stream ahead 52
Energy & Sustainability 27
The Edge's managing editor Miles Masterson discusses the future of Qatar’s mega events industry with Josoor Institute’s speaker Phil Clements, principal consultant for International Development at Leeds Beckett University.
Lorenzo Simonelli, president and CEO, GE Oil & Gas, outlines his company’s approach to satisfying the rapidly changing needs of the global hydrocarbons industry, detailing the importance of providing seamless geographic and product lines based on technical innovation and individual customer solutions.
In the context of consistently falling oil and gas prices in international markets, regional corporates have taken a variety of approaches in preparation for slower growth in the coming years, writes Oliver Cornock.
With Qatar’s own estimates for 2016 showing that it is set to run its first overall fiscal balance in 15 years, of around 4.8 percent of gross domestic product, it seems logical that the country is making an effort to retain its existing long-term LNG customers, writes Simon Watkins. The Edge | 5
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Real Estate & Construction 31 With an estimated 70 percent of the world’s wealth tied up in real estate, the importance of having a transparent and consistent method of valuation around the world is critical, writes Robert Jackson.
Tech & Communications 33
As critical infrastructures become connected, Qatar needs to be aware of possible attacks, such as those that happened in 2012 in the oil and gas industry, writes Andrey Nikishin of Kaspersky Lab.
MAIN OFFICE Tel: +974 4466 7744 Mob.: +974 5550 3923 Fax: +974 4465 7626 Email: avis@qatar.net.qa Website: www.avisqatar.com HAMAD INT’L AIRPORT (24 HOURS) Tel: +974 4010 8887 Mob.: +974 5580 4501 Mob.: +974 5583 0595 OUR COMPREHENSIVE RANGE OF SERVICES INCLUDE: Daily & weekly rentals | Monthly rental | Long term leases from 1 year & above | Free delivery & collection services | Chauffer driver services | Airport pickup and drop off | International reservation facility Baby seats available on request
Qatar has to consider cyber security issues to protect the city power grid, transport, mobility and other interconnected intelligent system’s integrity and availability. (Image Arabian Eye/Corbis)
Business Insight
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Salim Mansour, country manager, AXA Gulf, shares the general insurance company’s business philosophy and their plans for Qatar for 2016. Ahmed Abdelrazek, MD, Sapphire Hospitality & Management, talks about the growth prospect of the hospitality sector in Qatar. Brig. Dr. (Eng) Thani A Al Kuwari, chairman, DIMDEX, shares how the biennial event has evolved over the years, and its growing significance as a regional platform.
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‘OUTSTANDING ACHIEVEMENT AWARD 2015’ from AVIS Budget Group for excellent performance among 97 countries all over the world held at Dublin, Ireland on 15th October 2015
“The Qatar Armed Forces aims to develop a technically advanced military force to ensure its readiness to meet the challenges of the maritime domain in the 21st Century,” says Brig. Dr. (Eng) Thani A Al Kuwari, chairman, DIMDEX.
regulars 10 Photo of the Month 12 Business News 14 Qatar Perspectives 20 Products 66 From the Editor
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editor’s letter Anyone who has been involved in recruitment in any meaningful way in Qatar knows that it can sometimes be a frustrating process. Inside the country, ideal candidates end up not being able to join the firm because their previous sponsor will not release them with a ‘no objection certificate’ (NOC). Obtaining work visas and other necessary approvals for recruiting candidates both inside and outside the country’s borders can also often be a bureaucratic travail requiring both patience and fortitude. Nevertheless, with Qatar’s recent ranking in the Global Talent Competitive Index (GTCI) of number two in the region behind the United Arab Emirates (UAE) and 24th out of 109 countries globally, Qatar must be doing something correct, at least compared to its peers using this set of metrics. Even before the new Qatari labour laws are to be enacted in December this year (and which will eliminate the two-year embargo on workers who leave their jobs without an NOC at the end of their contract period, for example), the country scored well in the third edition of the annual GTCI. Qatar moved up one place from 2015 and finished one slot behind the UAE (which had slipped back one place from 22nd in 2014) and significantly ahead of Saudi Arabia (42), Kuwait (51), Lebanon (77) and Egypt (88). The survey was conducted by INSEAD in partnership with the Adecco Group and the Human Capital Leadership Institute of Singapore. It measures a country’s ability to attract top tier talent, and its international workforce mobility – in other words, how poised its companies are to shift key talent around with effective ease, in order to fulfil their most immediate objectives. This year’s GTCI was also focused on findings linked to the apparent correlation between movement of talent and economic prosperity. Remarkably perhaps for some embattled human resource officers, Qatar actually ranked number one in labour market flexibility. This could ostensibly be because, despite the above
mentioned challenges and other hurdles, the country is in fact far easier to come to work in for expatriates than many others worldwide. According to the index, Qatar also scored highly in the sustainability ranking for retaining talent gained, rising in fact from 41st in 2014 to 26th in 2015. The regulatory, market and business landscapes were also conducive to attracting talent, with Qatar rising from a ranking of 12th in 2014 to number five in 2015. In addition, those surveyed by GTCI determined that Qatar features one of the best standards of living, the quality of lifestyle ranking rising from 26th in 2014 to second in 2015, behind Austria. Yet there were also low points, with Qatar for example scoring poorly in the global knowledge category (60 out of 109), which focuses on higher skills, competencies and talent impact of its workforce; and slightly less spectacularly than the above rankings in the category of labour vocational rank – which measures employable skills and labour productivity – at 47th. So there is surely some effort to be made in developing the country’s workforce into one that can compete better internationally. This is, of course, but one survey. However, given the recent spate of layoffs in the oil and gas and other government-funded segments in the country, as well as the private sector’s ‘cautious optimism’ around the oil price and the fact that Qatar is set to post its first budget deficit this year, the data is encouraging. Since the sharp decline in the value of oil and commodities in general, and the subsequent mass summary dismissals in the energy, healthcare, transport and government sectors, The Edge has held that the labour markets of Qatar and its fellow energy exporting cohorts in the Middle East are entering a new and necessary paradigm of normalisation. Gone are the days of wanton spending and reckless recruiting of bloated, ineffective workforces. Hopefully when the oil price does once again rise, a leaner, more effective state and private sector economic and business machine will emerge, staffed by a far more competent and engaged legion of the highest skilled local and international workforce available.
Qatar scored highly in the GTCI sustainability ranking for retaining talent gained, rising Miles Masterson from 41st in 2014 to 26th in 2015. Managing Editor 10 | The Edge
Golden falcon 12 | The Edge
photo of the month
Novak Djokovic of Serbia holds the falcon-shaped victor’s trophy after winning the Qatar Open men’s single tennis final match against Rafael Nadal of Spain at the Qatar ExxonMobil Tennis Open in Doha in late January. It was a fitting and personal moment for the current world number one. “This trophy reminds me of someone who was very close to me, but who is no longer here. My grandfather used to call me Falcon,” said Djokovic, who clinched his first-ever Qatar tournament by trouncing Nadal in straight sets, 6-1, 6-2. (Image Arabian Eye/Reuters) The Edge | 13
news
business news
Qatar revises forecast for global natural gas prices
main story
Although Saudi Arabia’s strategy of trying to price out the nascent North American shale energy sector through continued excess oil and gas supply has slashed budget revenues for Organisation of Petroleum Exporting Countries (OPEC) member states, there is no sign of an imminent significant bounce in the global hydrocarbons complex any time soon. By Simon Watkins. Indeed, according to many analysts, prices are set to drop further, given the large volume of new supply set to come onto the markets now that virtually all sanctions on Iran were in practice removed on January 17. Consequently, although Qatar has recently sharply revised its 2016 forecast for average natural gas prices – a weighted average of European, Japanese, and United States (US) prices, which are, in turn, highly correlated to global oil prices – from its April 2015 projection, they may well fall even lower, according to global energy experts. In terms of pure hydrocarbons’ markets mechanics, as of yet the Saudi strategy has entirely failed to destroy – or even significantly delay – developments in the shale industry, with US oil output having rebounded as early as October of last year, to roughly where it was a year ago when the price war began, at about 9.1 million barrels per day (mbpd). As an adjunct to this, Qatar’s Ministry of Development Planning and Statistics (MDPS) noted in January that US natural gas production hit a new record in August 2015, as producers increased their operational efficiency and concentrated on proven production
Saudi Arabian Oil Minister Al Naimi talks to journalists during a meeting of OPEC oil ministers in Vienna. Due to the current situation regarding the oil price budgets for the collective, member states of the organisation have been reduced by almost half from USD1 trillion (QAR3.64 trillion) a year to USD550 billion (QAR2 trillion). (Image Arabian Eye/Corbis)
14 | The Edge
areas – notably in the Marcellus and Utica formations – to supply larger volumes despite low prices, making the price decline even starker in natural gas than in oil. The supply/demand disconnect is illustrated in the one month gas futures structure, which briefly slipped below USD2 (QAR7.28) per million British Thermal Units (mmBtu) in the US in October 2015. Although the World Bank predicts gas prices rising by 1.6 percent across the major geographical areas on average next year, the International Monetary Fund (IMF) believes that they will decline by a further 14.5 percent over that period, while Qatar’s estimates lie in between the two (see table opposite), but analysts highlight that there is more downside potential than is related simply to the straight hydrocarbons supply/ demand equation. “While the supply story has received significant attention over the last 18 months, it does not fully explain the fall in spot prices or the firmly negative roll yields since mid2014, and to get a complete picture we
1.6%
The average gas price increase predicted by the World Bank for 2016.
business quotes
Natural gas price index (2005 – 100) Index 154
Growth (%) 171 165 160
– 175
Forecast
– 145
113
107
93
94
– 105 – 70
36.2 3.4
– 35 11.0
-3.0 -3.7
-12.4
-0.5
– 0
– -35 -33.4 2010 2011 2012 2013 2014 2015 2016 2017 Note: The index is a weighted average of European, Japanese and US prices. Source: IMF, WEO October 2015 database
must also look at demand dynamics, given the importance of the business cycle – that is, growth recovery - to commodity markets,” New York-based Goldman Sachs commodities economist, Michael Hinds, told The Edge. The Goldman Sachs economists expected a clear re-acceleration in global economic activity by the third quarter of 2015, in line with the global output gap forecasts that were firmly into the ‘recovery phase’ of the business cycle by end-2015, and heading into the ‘expansion phase’ by late 2017/early 2018. However, said Hinds, this recovery has proven much more elusive than initially expected, and demand weakness has been compounding the negative returns associated with the ongoing supply shift, with emerging markets [EM] having driven this growth weakness, and private credit, sovereign debt and terms of trade shocks depressing activity. This marks the ‘Third Wave’ of the global financial crisis, according to Goldman Sachs, following the developed markets (DM) financial crisis and the European sovereign crisis, and has been characterised by the weak global growth backdrop feeding back into commodity price deflation outside the demand channel. “Weak EM growth, and worsening terms of trade, has seen significant EM FX depreciation, including among commodity producers and, as local currency costs of production have fallen, commodity cost curves have been pushed lower and flatter in US dollar terms, so exacerbating oversupply and making new equilibrium price levels a moving target, to the downside,” added Hinds. With the US Federal Reserve Bank having now embarked on an interest rate tightening cycle in December, there is no longer any pause in these self-reinforcing market elements, reinforcing the view of a continued negative outlook for commodities over the coming few months, he concluded. London-based Simon Watkins is The Edge magazine’s global energy editor.
news
“I think traditional economic concepts do not work anymore.” Klaus Schwab, founder and executive chairman of the World Economic Forum (WEF) at the organisation’s annual meeting in late January in Davos-Klosters, Switzerland. The theme of this year’s WEF was ‘The Fourth Industrial Revolution’ and focused on how disruption in many industries is now the new normal. “We need much more agile legislation and rule setting because it is difficult for the political community to cope with the fast technological progress,” added Schwab in a television interview, also writing on the WEF website: “In addition to being a key economic concern, inequality represents the greatest societal concern associated with the Fourth Industrial Revolution. The largest beneficiaries of innovation tend to be the providers of intellectual and physical capital…which explains the rising gap in wealth between those dependent on capital versus labour.”
“The challenges that Taiwan faces will not disappear in one day.” New Taiwanese president Tsai Ing-wen, discussing the challenges her new government will face as she enters office, particularly on the growing call for the Pacific island state to completely separate from China amid growing territorial disputes in the region. The leader of the Democratic Progressive Party assumed control after eight years of power for the Chinese-favouring Nationalist Party. “Only when we grow stronger will we be able to gain respect and protect our people and our democratic way of life,” added Tsai, who has not expressly endorsed the sentiment that the two states are part of one country, enhancing sentiments that the new Taiwanese leader will take her election as a mandate for Taipei to become more assertive towards Beijing and even secede altogether.
The Edge | 15
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business in quotes
“The market is definitely going to balance itself because today’s oil price is not sustainable whatsoever.” Qatari Minister of Energy and Industry, HE Mohamed bin Saleh Al Sada, speaking at an energy sector conference in London in January. Analysts took Al Sada’s remarks to mean the Organisation of Oil Exporting Countries would not make any change in its production output, despite the oil price sinking to slightly more than USD28 (QAR102) per barrel in the first weeks of 2016. “We expect that we will go through one more downturn cycle of oil price. But we will recover,” added Al Sada. Discussing Qatar’s strong position in the gas market, from the discovery of the North Field to today, Al Sada said, “We were then able to join up the dots on the value chain – production, processing and storage facilities and also the shipping fleet and many terminals which we built and own. The full chain would have been extremely difficult under today’s circumstances had we not been a ‘first-mover’.”
“A solution of the military conflict in Syria is the most hopeful message that we can have.” German Chancellor Angela Merkel, at a press conference in Turkey alongside Turkish Prime Minister Ahmet Davutoglu following the inaugural German-Turkish government talks, held in Berlin. Merkel added that resolution of the four-and-a-half year long Syrian civil war would be the first step towards resolving the migrant crisis that has burdened Europe with millions of refugees and eroded the German premier’s popularity at home, following December attacks on women in the city of Cologne, purportedly by migrants of Middle East and North African origin. “I am deeply convinced that the issue of illegal migration can only be solved with cooperation, if we work on the causes of migration, and that we have a great interest within the European Union to preserve the Schengen zone,” added Merkel.
16 | The Edge
Business News in Brief Global tax trends may impact Qatar’s tax framework: EY
The EY tax team who participated in the seminar.
EY recently hosted a seminar on changes to the tax and regulatory environment in Qatar, highlighting that taxation is likely to become a more prominent business concern across the Middle East. While low corporate tax rates will probably remain, value-added tax (VAT) seems likely to be introduced within the next few years. International developments also seem likely to influence the future direction for Qatar tax. Marcel Kerkvliet, international tax partner, EY Qatar, said, “The Qatar Ministry of Finance is expected to adopt at least some of the Organisation of Economic Cooperation and Development recommendations directly. This will affect future information reporting in Qatar, if not the way that taxable income is determined.”
Amwal appointed fund manager for Investment House’s Al Beit Al Mali Fund
Amwal’s appointment ceremony of the fund manager for Al Beit Al Mali Fund.
Amwal, Qatar’s leading independent asset management firm, has been appointed fund manager for the Al Beit Al Mali Fund founded by Investment House for investing in listed equities in Qatar, in line with Islamic principles. Regulated by the Qatar Central Bank, the fund’s objective is to achieve capital appreciation for its investors by investing in sharia’h-compliant companies listed on the Qatar Exchange. The Al Beit Al Mali fund is open only to private and institutional investors, and will offer the prospect of strong growth and long-term investment returns through investing in equities in Qatar.
business in brief Longines opens its first monobrand boutique in Doha City Center
Subol
Ahmed Mohamedali, a founding member of Subol, a Qatari technology start-up company, says they look to employing innovation and engineering methodologies to develop products that fulfil the needs of the marketplace.
Longines’ opening function of its mono-brand showroom at City Center, Doha.
On January 25, the Swiss watch brand Longines inaugurated its first monobrand boutique in Qatar, in Doha’s City Center. Longines carries a prestigious legacy of watchmaking expertise while reflecting its adherence to performance. This opening creates the opportunity for customers to discover the Longines universe and to admire iconic timepieces of the brand, as well as new models. The specially trained staff provide expert advice on the brand’s comprehensive range of watches and gives clients a first-hand experience of the brand’s history on tradition, performance and elegance.
GWC posts net profit of QAR185 million
GWC, Qatar’s leading logistics provider, concluded 2015 with a strong and stable rate of growth of 32 percent in its net profits, achieving QAR185 million, compared to QAR140 million at the end of 2014. The company’s revenue streams had an equally consistent rise, with total revenues peaking at QAR 787.9 million at the end of 2015, a 20 percent increase from QAR656.9 million in 2014. Earnings per share rose to QAR3.89 by the end of 2015, shaping an increase of 32 percent compared with the 2014 results of QAR2.95. The board of directors has recommended a 15 percent dividend be distributed to the shareholders, which will be presented for approval during the company’s Ordinary Assembly General Meeting to be held on February 14.
news
Start-up Watch
From right, Ahmed Mohamedali, along with other founding members Musab Al Mozien and Saleh Safran.
What was the idea behind starting this company? Our mission is to create innovative sociallyconscious technology products utilising the quintessential creativity of a diverse and multicultural team. We strive to grow our business by offering original, sustainable, reliable and profitable products. Several months after establishing the company, the team was able to develop a functional prototype of the company’s flagship product, given the name ‘Samam’. Being developed fully by Subol engineers, Samam gas detector, powered by its novel Nanosensor is the heart of a smart security system intended to protect families and homes from liquefied petroleum gas leakage and its threats. You get to connect many sensors around a property and connect the system with other smart home’s devices.
pursuing hardware development. The core value of our company relies in the process and the team. We believe that innovation and product development are very delicate subjects and mastering it requires testing and experience.
Tell us a bit about the backgrounds of the founding members. The founders, Musab Al Mozien, Saleh Safran and myself, Ahmed Mohamedali, all coming from mechanical engineering background, share the company’s vision with a group of talented engineers from the faculty of engineering at Qatar University. As engineers, it was intuitive to exploit the knowledge we acquired during our studies, and apply it to solve problems facing the society around us. That was the problem-solving part, however, the technology development industry is very advanced and complex. This is where the continuous learning is happening every day with us.
What has the response been like so far from the market? Since Subol’s inception, we were approached by many clients with regards to the technology development services, especially when asking for interactive and entertainment technologies where we developed some really interesting concepts. On the other hand, the initial product testing of Samam with the public showed great interest in our flagship product.
What is the unique selling proposition (USP) of your business model? When Subol was officially registered, it was rarely considered that a Qatari company is
What have been some of the main challenges in setting up this company? We were lucky to get support from Qatar Science and Technology Park and Qatar Business Incubation Center to be able to develop Samam. However, the main challenge we faced was to get informed mentorship from those with relevant experience in product development. Not to mention the hectic process of registering a business in such a field in a region where construction and real estate is what considered “engineering”.
What is the future plan of your company? Regarding Samam, we are now polishing the final engineering components, while working simultaneously with an elite industrial design agency in Europe to craft a beautiful casing for Samam. We are planning to offer the first patch for preorder exclusively on the company’s website and through social media @subolqa very soon. www.subol.qa The Edge | 17
news
events
Business events calendar February - May 2016 23-26 March Qatar Covertech
Qatar Covertech plans to evolve into a regional sourcing event for trade buyers in search of innovations and new technologies.
Expected to cover the entire spectrum of wall and floor covering technologies, Qatar Covertech presents a platform for manufacturers, suppliers, and buyers looking to capitalise on the huge potential of this sector. With unconventional features designed to grant buyers and exhibitors the extra edge, Qatar Covertech has been created to encourage more interaction among regional and international fraternities of the wall and floor covering technologies. It will be a good place for highlighting some of the latest innovations in the wall and floor covering sector. The previous event had more than 100 exhibitors from 12 countries, in addition to 4800 trade buyers.
28 -30 March Health Facilities Design and Development conference As the population of Qatar continues to grow at speed, it is critical that Qatar’s health facility construction experts develop facilities which are designed to effectively meet demand to the highest quality. With many large projects being announced by key Qatari government stakeholders, the health sector provides great opportunities for private healthcare providers. This conference aims to address the main challenges surrounding health design and development and illustrate innovative solutions to develop Qatar’s healthcare infrastructure efficiently. Drawing on experience of healthcare providers, architects, structural engineers and construction specialists, this event will provide attendees with strategies required to ensure successful project development and completion.
The event will provide good insight about how to successfully manage health facilities in Qatar to reduce overall costs.
29-31 March DIMDEX 2016 Organised and hosted by the Qatar Armed Forces, DIMDEX 2016 is expected to welcome a large number of defence professionals, military officers, industry vendors and trade visitors at the Qatar National Convention Centre (QNCC). Building on the success of the previous event, which hosted more than 13,000 visitors, 184 exhibitors, and 82 VIP delegations from 58 countries, DIMDEX 2016 plans to have larger exhibition space featuring new sectors such as maritime aviation, naval base security, unmanned aerial vehicles (UAVs), maritime patrol aircraft and coastal surveillance systems. The event will also host a high-level Middle East Naval Commanders Conference, bringing together senior defence authorities to offer a comprehensive insight into the key factors influencing the maritime defence industry in the region.
Events Listing February 1-2 February Education City Career Fair 3-4 February Waste Management and Recycling Summit Qatar 23-27 February Doha Jewellery and Watches Exhibition 2016
March 7-8 March 3rd Entrepreneurship in Economic Development Forum
April
11-12 April Arab Future Cities Summit 2016 13-16 April Qatar Pool & Spa 14-18 April Office World Exhibition (OWE) 26-28 April Cityscape Qatar
May
9-10 May LightingTech Qatar DIMDEX 2014 had a large number of defence professionals and VIP delegates attending the event from 58 countries.
18 | The Edge
9-12 May Project Qatar
qatar perspectives
Consumer e-commerce in Qatar: Moving towards
cashless transactions The e-commerce market in the Gulf Cooperation Council (GCC) continues to be a trending topic, having seen a five-fold growth rate over the past five years – from USD3.3 billion (QAR12 billion) in 2010 to USD15 billion (QAR55 billion) in 2015, according to a report by AT Kearney. Qatar, where the e-commerce ecosystem is currently in a fairly nascent stage in comparison to other GCC countries such as the United Arab Emirates, Kuwait and Saudi Arabia, represents significant potential for growth and development, writes Raghav Prasad. Currently, regional and international players including Souq.com and Amazon, which have proven to be extremely popular since nationals and expatriates alike look to discover new brands and products that may not be locally available, dominate the consumer sector of e-commerce in Qatar. Meanwhile, local and regional e-commerce providers such as Talabat and QTickets have addressed consumers’ preference for increased convenience when it comes to transactions. We often tend to think of e-commerce primarily in terms of consumer consumption. However, there is a large part of e-commerce that revolves around government spending. This category will continue to grow in Qatar, as entities such as Kahramaa widen their offerings via multiple payment gateways to make electronic payments simpler and safer for their customers. A 2015 study carried out by MasterCard on online shopping behaviour in Qatar revealed that 55 percent of respondents had made an online purchase during the three months prior to the study, of which 90 percent were satisfied with their online shopping experience. The study also found that mobile shopping is steadily on the rise with three in 10 respondents having made online purchases through their mobile phones during the three months prior to the study. The future of e-commerce is mobile and we expect mobile shopping to continue to rise in popularity in the GCC in the coming years as the availability of mobile wallets such as MasterPass becomes more widespread. The survey also found that online spending in absolute terms in Qatar is highest for airlines, followed by digital content for entertainment purposes, and groceries. Clothing and accessories, home appliances and electronic products are other categories that were popular among respondents. Of the survey respondents, 76 percent singled out factors such as convenient payment methods, value of items and security of the payment facility. 2016 is likely to see an increase in growth of e-commerce in 20 | The Edge
Raghav Prasad, general manager for Gulf countries, MasterCard.
Qatar as the awareness of the benefits of shopping online continues to spread among consumers. As it stands, a large proportion of e-commerce payments are carried out via cash-on-delivery, which is partly due to a lack of awareness around the increased safety and security of electronic payments compared to cash. The biggest opportunities exist in cross-border e-commerce, and the next big shift that will change things is when the major regional and international players find a way to address the logistical challenges that prevent goods from being delivered efficiently to Qatar’s residents. As the diversification of the economy from hydrocarbon progresses in the next five years, with developments unfolding in the aviation, education, tourism and sports sectors, both the government and the Qatar Central Bank are committed to modernising e-commerce. The size of the opportunity for electronic retailers (e-tailers) in the GCC is significant, with Google saying that the region’s digital space currently only accounts for about one percent of retail spending, compared to more mature markets. Beyond e-commerce, the growth opportunity becomes even more evident when one considers that approximately 85 percent of retail transactions are still being performed using cash. Organisations are gradually seeing the benefits of a cashless society and, with time and careful planning, the industry is leading a change in behaviour towards a world beyond cash.
At Qatar Cool, we understand that operational excellence is a byproduct of motivated and competent staff. To that effect, we firmly believe that our pursuit of excellence starts with identifying, recruiting, developing and retaining the right people. Our multi-faceted human resources strategy includes a plethora of initiatives and internship opportunities tailored to attract, retain and develop top talent at various levels of the organization. Thus, contributing to the human development pillar of the QNV 2030.
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finance & markets
In Qatar’s 2016 budget, which was released in December 2015, the government projected a QAR46.5 billion deficit – the nation’s first budget shortfall in a decade and a half. (Image Arabian Eye/ Corbis)
Middle East corporates rationalise expenditure
In the context of consistently falling oil and gas prices in the international markets, regional corporates have taken a variety of approaches in preparation for slower growth in the coming years. Broadly speaking, these efforts have involved streamlining operational costs while simultaneously maintaining long-term capital spending, writes Oliver Cornock.
I
n mid-December 2015, Qatar’s Ministry of Development Planning and Statistics cut the country’s gross domestic product (GDP) forecast for the year to 3.7 percent, down by nearly half from an earlier prediction of 7.3 percent and the 6.1 percent recorded in 2014. At the same time, the ministry slashed its outlook for 2016 and 2017, to 4.3 percent and 3.7 percent respectively. These adjustments come after nearly two years of declining oil and gas prices. From June 2014
through January 2016 the price of Brent crude – the international oil benchmark – dropped from USD115 (QAR418.6) per barrel to less than USD30 (QAR109.2) per barrel, a fall of nearly 75 percent. Qatar, like many neighbouring energy-rich Gulf Cooperation Council (GCC) member states, has a sizeable fiscal buffer and is well positioned to borrow from local and foreign lenders alike. Nonetheless, in recent years the country has taken action in preparation
for a prolonged period of low energy prices. In Qatar’s 2016 budget, which was released in December 2015, the government projected a QAR46.5 billion deficit – the nation’s first budget shortfall in a decade and a half. “Not only this year, but for years to come, [Gulf] countries will need to make an adjustment to better balance their spending to the new reality of oil prices,” Masood Ahmed, the director of the International Monetary Fund’s The Edge | 25
sectors | finance & markets
Middle East and Central Asia department, told local media in late 2015. As regional governments have moved to curtail spending, local corporates have not been immune to the impact, albeit to varying degrees depending on their respective economic sector. Oil and gas firms, for example, have been faced with clients seeking to renegotiate long-term contracts, in an effort to take advantage of lower market prices. Firms involved in oil-related activities have been the hardest hit, though Qatar’s liquefied natural gas (LNG) industry has not been immune to calls for lower pricing. Indeed, over the course of the past year, natural gas prices have fallen by nearly 35 percent due in large part to increased competition from US-based shale gas producers. According to a March 2015 study published by the Center on Global Energy Policy, a US-based research body affiliated with Columbia University, Qatar’s LNG revenues will likely plateau or decline further over the course of the coming decade.
Liquidity squeeze
In Qatar, both the financial and construction industries rely to a large degree on public sector deposits and contracts, respectively. As such, many of them are in the early stages of instituting belt-tightening policies. The banking sector, which reported a rapid withdrawal of government deposits in 2015, is currently in the early stages of what some have interpreted as a liquidity crunch. “There is clearly a squeeze on liquidity and some inertia in the system,” Robin Abraham, managing partner for the Middle East at the law firm Clifford Chance, told international media in December 2015. The construction industry, meanwhile, has thus far remained relatively busy, thanks to the government’s continued investment in infrastructure in the run-up to host the 2022 World Cup. Still, local builders are keeping a close eye on the economy. “Government-related enterprises (GREs) may see borrowing costs rise and there must be a possibility that the increase in sovereign borrowing in some Gulf countries removes some liquidity that would otherwise find its way to the GREs,” said Abraham. Regional corporates have taken a variety of approaches in preparation for slower growth in the coming years. Broadly speaking, these efforts have involved streamlining operational costs while simultaneously 26 | The Edge
As regional governments have moved to curtail spending, local corporates have not been immune to the impact, albeit to varying degrees depending on their respective economic sector. maintaining long-term capital spending. In 2015, for example, restructuring in Qatar’s energy sector resulted in numerous job cuts, with RasGas, Maersk Oil and others laying off hundreds of employees each. Qatar Petroleum, meanwhile, laid off an estimated 3000 workers in 2014 and 2015. “We are operating in a materially changed oil price environment and have taken necessary decisions to reduce activity levels through 2015, and ensure we focus where we can see adequate returns from our most robust projects,” Jakob Thomasen, the CEO of Maersk Oil, told local media in November 2015. For many smaller companies, meanwhile, the new operating environment has
encouraged additional investment in human resources, which tend to be these firms’ most valuable assets. “We are not laying people off,” Wim Roels, the CEO of Borouge, an Abu Dhabibased energy firm, said to the media in late 2015. “We are just spending money wisely and being conservative in spending, but [we are] not going to jeopardise [the future],” he added. Of course, many firms operating in Abu Dhabi, as in Qatar, have benefitted from more than a decade of strong economic growth and, as such, are relatively well situated to weather the current period of low oil prices. Oliver Cornock is the managing editor for the Middle East, Oxford Business Group.
Value of planned projects in qatar Power 3%
Water
Industrial 2% Chemicals 1%
Oil
5% 5%
Gas
6% 47%
31% Transport Construction Source: MEED
energy & sustainability
RasGas Q-Flex LNG carrier vessel Al Thumama delivered the first cargo, at Dahej Terminal in India, to Petronet under a new sales and purchase agreement in January 2016. (Image RasGas)
Qatar 2.0: adapting to a more competitive global hydrocarbons environment
With Qatar’s own estimates for 2016 showing that it is set to run its first overall fiscal deficit in 15 years, it seems logical that the country is making an effort to retain its existing long-term customers, writes The Edge’s global energy editor Simon Watkins.
T
his includes reducing the pricing and delivery parameters of liquefied natural gas (LNG) deals that had already been contractually agreed by clients. Case in point: for the third time this year, Qatargas delivered a Q-Flex liquefied natural gas cargo between multiple ports for a single customer, rather than the standard industry practice of loading one
cargo for delivery to one location. At the end of December, the Q-Flex carrier Duhail delivered a single cargo split between the Chinese terminals of Zhejiang and Tianjin, following similar style deliveries in August to China’s Fujian and Tianjin terminals and in March to terminals in the United Arab Emirates and India. “This flexibility on delivery has
so far only been made for three of Qatar’s biggest clients but it is highly likely that other major customers will start to demand the same, with negative impact on costs that this implies for Qatar going forward, as the global hydrocarbons industry remains a buyers’ market,” Sam Barden, CEO of Middle Eastern energy consultancy and trading firm, SBI Markets, in Dubai, told The Edge. The Edge | 27
sectors | energy & sustainability
Even more dramatically, and negative from a short-term revenues’ perspective, is the announcement at the beginning of this year that the long-running attempts by India to renegotiate the pricing on its long-term LNG import contracts have been spectacularly successful from India’s side. In a deal that marks Prime Minister Narendra Modi’s biggest diplomatic win in the energy sector since coming to power last year, India’s biggest gas importer, Petronet LNG, will now buy LNG from Qatar’s RasGas at almost half the original contact price, which will save the country about USD605 million (QAR2.2 billion) a year. Under the new deal, RasGas will supply LNG to Petronet at USD6 to 7 (QAR22 to 25.5) per million British thermal units (mmBtu) as from January 1 this year, against the USD12 to 13 (QAR 44 to 47) per mmBtu agreed in the original contract, according to a statement by Indian Oil Minister Dharmendra Pradhan, New Delhi. Underlining the shift in power in the global hydrocarbons sector from sellers to buyers even further is the fact that RasGas has also waived a USD1.5 billion (QAR5.5 billion) penalty against Petronet for lifting less gas than had been agreed in the original contract signed in 2004 that envisaged the sale of 7.5 million tonnes of LNG per year over a 25-year period, although the amount has now been increased to 8.5 million tonnes per year. While the deal is good news for India – the cheaper rates will be a huge and timely boost for the profitability of the country’s local refineries, and its power and fertiliser companies, in particular – the message that Qatar is willing to renegotiate on existing contracts is unlikely to be lost on Qatar’s other LNG customers. “If you have a major LNG contract with Qatar, or you are considering entering into one, why wouldn’t you attempt to negotiate it lower and, if Qatar says no then there are plenty of other energy supply options out there,” said Barden. It would appear, though, that this point has not been lost on Qatar’s energy authorities, as the middle of January saw Pakistan sign an LNG supply deal with Qatar instead of Royal Dutch Shell, with the Qataris seemingly winning out based on a willingness to lower prices. Although the deal is not the same as the long28 | The Edge
running indecision by Pakistan to choose an LNG supplier for a 15-year contract, it is an important indication of the way the bigger deal may go. According to senior oil and gas industry sources, Pakistan was to buy 60 LNG cargoes from Shell after the oil major submitted the lowest price in a tender finalised late last year but, before the deal had been formally signed, Qatargas came in with a more favourable deal, even though it was not involved in the original tender. According to the sources, Qatargas will supply the cargoes at a price of 13.37 percent of a barrel of crude oil, matching the price at which aggressive trading house Gunvor will deliver another 60 cargoes to Pakistan over the same 2016 to 2020 period. “It was a very sharp deal by Qatargas, and seems to point to a real change in attitude from Qatar, based on being a lot more aggressive and adaptable in the global energy markets, which is exactly
The message that Qatar is willing to renegotiate on existing contracts is unlikely to be lost on Qatar’s other LNG customers.
what is needed in these very difficult, ultra-competitive times,” concluded Barden.
How weak emerging market demand feeds back into commodity supply through the forex channel Shale revolution
More US economic growth
More commodity supply
EM FX (weakness channel)
Less emerging markets demand
Source: Goldman Sachs
US (positive) income effect channels
US monetary policy channel
Lower US energy prices
More US economic growth
Less accommodative US monetary policy
sectors | energy & sustainability
QP moves to expedite flagship Bul Hanine oil field Design contract on the initial phase of Qatar Petroleum’s (QP) USD10 billion (QAR36 billion) flagship upstream megaproject goes to Australia’s WorleyParsons. Qatar has awarded the design contract for the initial phase of Qatar Petroleum’s (QP) USD10 billion (QAR36 billion) flagship upstream megaproject to redevelop the offshore Bul Hanine oilfield to Australia’s WorleyParsons. In doing so, the country has sent a clear message that despite low global hydrocarbons prices, it is to continue to maintain capital spending on projects regarded as being of national strategic importance. As with the other major oil projects on QP’s development list, the principal aim to the Bul Hanine contract is to extend the life of the 44-year-old field rather than to increase production, as it has already been subject to extensive enhanced oil recovery (EOR) techniques to that effect, in line with Qatar’s other oil fields, leaving little scope for further output increases. The WorleyParsons part of the project will involve the front-end engineering and design (FEED) contract covering five topsides, each weighing around 1500 tonnes, which are being added under the Bul Hanine scheme’s first phase. Four will be installed on wellhead jackets to be delivered by USbased McDermott under an engineering, procurement, construction and installation contract (EPCIC) awarded in October 2015, while the fifth is believed to be designed for the modification of an existing jacket. Two of the new topsides are scheduled for delivery by the end of this year and the remaining two by July 2017. The entire Bul Hanine redevelopment, launched in May 2014, envisages the installation of 14 new wellhead jackets and the modification of existing jackets, as well as a new offshore central processing complex and the drilling of around 150 wells by 2028 – with the overall aim of extending the field’s life by 25 years. A new natural gas liquids (NGL) processing plant will also be built at Mesaieed to handle the estimated 900 million cubic feet (25.5 million cubic metres) per day of sour gas expected to be produced. Total project costs for this have been estimated by QP at QAR40 billion and 30 | The Edge
Qatar’s domestic oil consumption over the 2004 to 2014 period increased by 190 percent, the highest rate of increase in the entire Middle East region, hence QP’s investment in securing its oil output. (Image FotoArabia)
40
billion
Total project costs for the Bul Hanine’s redevelopment have been estimated by QP at QAR40 billion.
completion scheduled for 2022, although the status of phases subsequent to those currently being implemented is unknown. “In addition to sustaining economic growth and providing financial stability, this redevelopment is also an important step towards building the capabilities of local resources,” QP’s chairman Mohammed bin Saleh Al Sada, in Doha, said at the project launch. This latter point certainly has resonance, as figures released last month show that Qatar’s domestic oil consumption over the 2004 to 2014 period increased by 190 percent, the highest rate of increase in the entire Middle East region. In basic terms, Qatar’s consumption increased from 106,000 barrels per day (bpd) in 2004 to 307,000 bpd in 2014. Total oil consumption in the Middle East region increased from 5.9 mbpd in 2004 to 8.7 mbpd. This pattern of rising consumption is attributable, according to the World Bank, to the rapid rise in domestic populations and the corollary rise in household power (primarily for airconditioning) and for desalination plants that also use oil and gas to meet drinking water demands of residents.
real estate & construction Industry experts believe that the challenge lies in persuading unregulated markets to adopt a universal approach, rather than implementing their own regulatory standards. (Image Arabian Eye/Corbis)
Adopting standardised valuation practices for Qatar’s realty sector With an estimated 70 percent of the world’s wealth tied up in real estate, the importance of having a transparent and consistent method of valuation around the world is critical, writes Robert Jackson.
F
ollowing the financial crash in 2008, a major enquiry found poor property valuation practices was a major factor in the crisis. It was found that banks had overextended their loan commitments based on real estate security yet in many cases, the assets valued for lending purposes had been over-inflated. Once the crisis struck and real estate values came under scrutiny, many true values were significantly lower than the ones used for lending purposes. “This is a growing issue that needs to be addressed and adopted,” Edd Brookes, general manager, DTZ Qatar, said, “There
has to be a benchmark in standards, especially important given the financing decisions made on the basis of valuations.” As a result, International Valuation Standards (IVS) has become the centre of attention and is being adopted by numerous stakeholders ranging from governments to banks, financial institutions asset managers and owners as a means to mitigate risk and more diligently assess the value of built assets. Although majority of international real estate advisory practices with a presence in Qatar adopt a standardised approach to
real estate valuation, there are many local valuers who continue to follow their own regulatory standards. Industry professionals in Qatar have often voiced concern that current valuation practice is contributing to an artificially inflated real estate market, which is impacting on asset values and also rental prices. Nick Witty, director, Real Estate, Deloitte & Touche, said, “The lack of standardisation is widespread and often problematic in so far as inconsistencies or lack of the application of the International Property Measurement The Edge | 31
sectors | real estate & construction
Standards (IPMS) and the non-standard approaches to valuation may result in a lack of transparency, comparability and confidence in the valuer’s report.” Brookes agreed that the adoption of IVS in Qatar is absolutely crucial in terms of ensuring consistency, stability and accountability within the local real estate market. “Without its whole-hearted adoption and adherence, the amount of foreign direct investment in the Qatar real estate market will be limited,” he said. Within the region, however, many real estate stakeholder groups including several governments are now adopting IVS and implementing a regulatory framework, which supports its adoption. In Kingdom of Saudi Arabia, for example, the government has introduced a valuer registration scheme and law, which is mandating compliance with IVS for all valuers in the Kingdom. Abu Dhabi and Dubai are also actively working on the introduction of reformed valuation practices in recognition of the market risks, which currently exist.
Industry professionals in Qatar have often voiced concern that current valuation practice is contributing to an artificially inflated real estate market, which is impacting on asset values and also rental prices. 32 | The Edge
Qatar real estate: Organised retail supply in square metres (Gross Leasable Area) 2000 1500 1000 500 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: DTZ Research
Witty added, “Outside of the United Arab Emirates, real estate within the majority of the regional markets is not highly regulated and as such there is no requirement for valuers to adhere to any specific set of guidelines or the rules of professional conduct of a governing body.” It is important that the relevant authorities and regulatory bodies in Qatar work to address this and create a more transparent market capable of attracting local, regional and international investment. The banking and finance sector can also play a key role in this positive transition and in support of their risk mitigation initiatives, they must ensure that they pay due diligence to lending against appropriate valuation reports undertaken by competent and experienced professionals. With the real estate industry and the financing that supports the sector being very much a global industry, research confirms that increased adoption of international standards and regulations plays an underpinning role in driving market transparency which in turn drives investor confidence and investment activity in the world’s real estate markets. Adoption of IVS as a basis for valuation supported by industry guidance documents such as the RICS Red Book not only enables cross-border comparability
and consistency but mitigates risk for financial institutions as well as providing transparency and conformance in built asset valuations on company balance sheets reported under International Financial Reporting Standards (IFRS). If Qatar’s real estate markets are going to be able to compete with other major regional and global markets and provide investors, owners and occupiers with an appropriate level of confidence then relevant international standards need to be adopted including not only IVS but also the new IPMS and the impending International Ethical Standards.
Robert Jackson is the regional director for RICS, MENA region.
tech & communications
Qatar has to consider cyber security issues to protect the integrity and availability of the city power grid, transport, mobility and other interconnected intelligent systems. (Image Arabian Eye/Corbis)
Critical infrastructure: Why cyber security aspects need to be considered As critical infrastructures become connected, Qatar needs to be aware of possible attacks, such as those that happened in 2012 in the oil and gas industry, writes Andrey Nikishin of Kaspersky Lab.
T
he critical infrastructure in Qatar is a major example of the national importance when talking about cyber issues. Cyber security issues for smart cities are also to be considered, especially to protect the city power grid, transport, mobility and other interconnected intelligent systems’ integrity and availability. Doha is on the verge of being transformed to a smart city, and Qatar is preparing for the 2022 World Cup – all of which require high levels of synchronisation, flexibility, reliability and resiliency. Traditionally, industrial facilities have relied on the absence of a direct connection to the Internet to keep their critical
infrastructures safe from harm. This ‘air gap’ was deemed to protect industrial networks from becoming infected with malware or attacked by hackers. Today with the increasing prevalence of the Internet, industrial facilities appear to be increasingly connected to the Internet for different reasons. Third party contractors (hardware and software vendors and integrators) need to maintain their equipment, which they can now do remotely via the Internet, for example. This connection to the outside world has reduced the previously airtight nature of the air gap, giving hackers and malefactors an easy route to attack.
Advanced methods
Attackers are also becoming more sophisticated in their approach, with a notlong-ago discovered piece of malware, called Fanny, designed to jump over the air gap and steal information from a network that was considered to be isolated and out of reach. In another case, a malware attack went beyond espionage and caused massive damage to a steel furnace at a European iron plant. Earlier cases of the apparent 2012 attacks at Saudi Aramco, the world’s largest oil company, and RasGas, the Qatari gas giant, are also cautioning examples of both how vulnerable automated manufacturing operations can be, and the sheer scale of The Edge | 33
sectors | technology & communications
the damage that can be caused by a single incident. This begs the question, how far can such cyber espionage go and how serious can the damage be? The focus for industrial facilities therefore needs to be on critical infrastructure protection within the connected world and managing the associated vulnerabilities brought by alternative and indirect ways to connect to the industrial network. The following scenario of a large, complex facility in a difficult-to-reach location is typical. It could be an automated water purification system – a water treatment facility providing an entire city with potable water. To meet the expectations of modern civilisation, this facility must operate roundthe-clock, every single day of the week, 365 days a year. Normally, the equipment installed in such facilities requires regular maintenance. For this reason, it is important to be informed about the physical state of the equipment, otherwise it is difficult to tell how worn it is and whether or not it needs to be repaired. Without this knowledge, equipment may be taken out of service for maintenance at the wrong time or left to go on working too long. To be able to identify the moment when equipment has become critically worn and requires maintenance, online sensors and controllers are used. Advanced technologies come into play, providing communication between the physical equipment and the outside world, allowing analysis of the equipment’s condition and an informed decision to be made about its maintenance. This is not simply a case of a computer connecting to the Internet to provide remote management and control, but for physical equipment, which controls a real physical process being put online. The estimate shows that companies can save up to millions of dollars by taking this approach. But it is a double-edged sword. You can easily imagine the consequences of a cyber incident, which may be committed due to Internet connection: no water at all in the city, flooding or widespread water pollution.
Prevention is the cure
The air gap can no longer provide airtight protection for these critical infrastructures, and industrial facilities need to put in place reliable, information security measures to close the vulnerability. For many, their facility may have already been compromised with malware or have a network full of holes. To 34 | The Edge
understand the extent of the problem, a security audit of the facility will help identify vulnerabilities and create a threat model. Following the risk assessment, overlaying the threat model with a security map will help to apply the proper security solutions to critical areas and mitigate the risks where such solutions are not yet in place. There is no out-of-the-box security solution but it is imperative that industrial facilities do not rely on the air gap to keep them safe. A robust solution should consist of multiple layers, each covering a specific area to protect from malware and phishing, clean email from spam and viruses, fend off network attacks, etcetera. We cannot emphasise enough the importance of keeping the operating system and software fully updated and patched, so this functionality should also be on the list of ‘must-haves’. Ideally, the solution should cover different levels of automation, from the conventional corporate network down to networks that connect the equipment. But over and above that, security should be considered an evolving process that requires constant effort to stay one step ahead of the bad guys. To ensure the security process is as robust as possible, the threat posed by employees needs to be taken into consideration. Even the best spam filters, email anti-virus and anti-phishing tools cannot guarantee 100 percent efficiency in a constantly evolving cyber threats landscape. Cyber criminals will find more and more vulnerabilities to exploit
There is no out-ofthe-box security solution but it is imperative that industrial facilities do not rely on the air gap to keep them safe.
CYBER THREATS TO QATAR
Trojans, worms, and viruses were among the most common threats to Qatar from April to June 2013.
The Middle East and North Africa received the third highest volume of SMS spam (1.7 billion spam texts per month) from November 2013 to March 2014.
Qatar was one of the countries most affected by targeted attacks in 2013. Source: Qatar National Cyber Security Strategy report, May 2014.
and invent more and more ways to bypass the security solutions. Even a tiny fraction of a percent is enough, given the six orders of magnitude when we talk about numbers of threats encountered every day. It is also important never to rely on technology alone, but also to educate employees, increase their awareness and foster a cyber-culture to reduce their chances of falling victim to a social engineering trick.
Andrey Nikishin is the head of Future Technologies Projects at Kaspersky Lab.
E-waste Ap Analysing the effects of Qatar’s electronic throw-away culture Qatar’s vulnerability to environmental damages due to growing e-waste is no less than any other developed nation’s, but it lacks local infrastructure and legal framework to deal with this problem, writes Syed Ameen Kader.
36 | The Edge
pocalypse? W
ith almost 100 percent of the population having access to computers and mobile phones, Qatar is hooked on high-end devices and electronic gadgets. According to a 2013 survey report by ictQATAR, the average Qatari household has five mobile phones (nine mobile phones per Qatari-national household), more than three laptops and at least one desktop computer. As the country’s growing population continues to expand its user base of electronic products, it is no surprise that Qatar finds itself among the highest per capita electronic or e-waste generating nations in the world. Not to forget, e-waste does not include just information and communication technology (ICT) devices, but also other electricity and battery-run products such as televisions, refrigerators, air-conditioners, etcetera – a segment that also has a large consumer base in Qatar. According to a report released last year by United Nations University (UNU), Qatar’s domestic e-waste generation per inhabitant was 16.3 kilograms (kg) against the global average of 5.9 kg in 2014, although in absolute terms the amount was only 33 kilo tonnes, primarily due to the country’s low population. The United States (7.1 million tonnes) and China (six million tonnes) – which collectively discarded nearly one-third of the world’s 41.8 million metric tonnes of total e-waste – are the biggest culprits of this. (See table, page 39) Interestingly, unlike the matured economies such as the US or Europe whose domestic consumption of ICT devices and electronic products has grown more steadily – something that acted as a buffer period for these countries to develop their domestic industry and infrastructure to deal with e-waste – Qatar’s has moved much faster. The Gulf state’s user base of electronic devices has grown rapidly, and so has the per inhabitant e-waste generation. As a result of this, Qatar today faces the danger of discarded electronic junk building up into a toxic dump – something that poses huge health and environmental threats as well. Many developed countries have legislation in place to address this issue; Qatar seems to have none. The country had reportedly started drafting its first law for e-waste management in 2010, but no official announcement has been made so far on this. In the absence of any specific laws or guidelines, Qatar’s preparedness to deal with a growing e-waste problem is questionable. Moreover, although some work is being done in the areas of solid and municipal waste management, Qatar does not seem to have a robust e-waste management and recycling industry at present. Certainly not one to handle the volume.
The Edge | 37
cover story | e-waste
E-waste dumping
Comparatively, large countries such as the US and China also generate a massive amount of e-waste every year, but they collect and recycle a high proportion of e-waste domestically. The US, for example, is reported to have collected one million tonnes of e-waste, although that amount represents only 15 percent of what they had generated in 2012. China, whose national e-waste legislation manages the collection and treatment of TVs, refrigerators, washing machines, air conditioners and computers (desktop and laptops), officially treated around 1.3 million tonnes in 2013. In Qatar, no statistics are available on how much e-waste is collected or recycled each year. Nor, for that matter, can anyone say for sure what happens to the gadgets and electronic devices that people discard after use? It is hard to tell, but in the absence of any legislation, one can assume much of it is sent to developing-world facilities, where often safety and environmental guidelines are not followed. Dr. Ruediger Kuehr, head, UNU – Vice Rectorate in Europe, and the author of the report on e-waste, says, “Qatar like most countries of the Middle East are parties of the Basel Convention, an international regime controlling the trans-boundary movements of hazardous waste and their disposal. Since e-waste contains hazardous substances, e-waste shipments are also falling under the Basel Convention.”
“Each household in Qatar, on an average, has five mobile phones (nine mobile phones per Qatari-national household), three laptops and at least one desktop computer.” 38 | The Edge
Most environmental damage and health impacts related to e-waste arise from improper collection and treatment approaches. (Image Arabian Eye/Corbis)
Therefore, he adds, though Qatar, like most other nations in the Middle East, does not yet have a specific e-waste legislation in place, the ratification of the Basel Convention prohibits e-waste exports to developing countries. “In consequence, so far, after some first treatment of e-waste in Qatar, the end-processing of the hazardous components must take place in one of a handful of industrial hubs around the world. And such kinds of shipments are legal, but very often hindered by national legislations,” explains Kuehr. The UNU report states the main feature of this scenario is that e-waste is traded freely, and usually, its quantity is not systematically documented or reported to framework or requirements. In this scenario, e-waste is often not treated in the state-of-the-art facilities, and there is a potential that e-waste is shipped off to developing countries. Adds Kuehr, “Unscrupulous brokers are still shipping e-waste categorised as reuseable to developing countries, trying to make money out of it, though the products are junk or there is simply not market for them,” And here again, he explains, the (post-industrialised) nations can do better, preventing these exports. “But the same applies for the developing nations not allowing these imports,” he adds.
“Unscrupulous brokers are still shipping e-waste categorised as re-useable to developing countries, trying to make money out of it, though the products are junk or there is simply not market for them,” says Dr. Ruediger Kuehr, head, United Nations University – Vice Rectorate in Europe.
And this is a huge problem internationally. Another report by the United Nations Environment Programme (UNEP) reveals that up to 90 percent of the world’s electronic waste, worth nearly USD19 billion (QAR69 billion), is illegally traded or dumped each year. “The recycling rates are among the highest in the EU, but still a lot is unaccounted for. Both illegal dumping, but also organised crime are involved, as they are often paid to
e-waste | cover story
Domestic e-waste generated per country in 2014 Country
Generation
Kg/per inhabitant
Collection/ TREATMENT
United States
7.1 mt
22.1
1 mt
China
6.0 mt
4.4
1.3 mt
Japan
2.2 mt
17.3
556 kt
Germany
1.8 mt
21.6
691 kt
India
1.7 mt
1.3
N/A
United Kingdom
1.5 mt
23.5
504 kt
Norway
146 kt
28.3
105 kt
Qatar
33 kt
16.3
N/A
UAE
101 kt
17.2
N/A
Saudi Arabia
379 kt
12.5
N/A
Dana Haidan, head of CSR and Sustainability, Vodafone, says, “The initiative (phone trade-in) encouraged Vodafone customers to exchange their old handset with a 4G-enabled smartphone. Those handsets were then refurbished by Hyla Mobile, whose job is to capture, extend and optimise the life and value of used mobile phones.”
Source: United Nations University: The Global E-Waste Monitor 2014. Million tonnes (mt), kilo tonnes (kt).
get rid of hazardous wastes,” says Christian Nellemann, head of Rapid Response Assessment Unit at GRID-Arendal, a centre collaborating with the UNEP. Nellemann explains that the international conventions are designed specifically to assist countries and help prevent dumping of hazardous wastes. “There are always options available for countries who seriously want to deal with toxic waste and may not have the chemical facilities to deal with it. Nuclear material is one good example,” he adds. As per the Basel Convention, trading of second hand equipment is legal only if it is allowed by both sending and receiving countries, but the dumping of e-waste is prohibited.
Local initiatives
Although people are not legally bound to follow any specific rule on e-waste in Qatar, many organisations and companies have started taking some initiatives voluntarily. Qatar’s national telecom operator Ooredoo, for instance, in 2011, started an initiative called ‘Big Drop Days’ by arranging a special area to collect unwanted electronic equipment for safe disposal and recycling. The company had reportedly shipped more than four tonnes of e-waste to Singapore for recycling in that year. Vodafone, on the other hand, had launched a mobile phone trade-in service in 2014, and it was able to send more than 2000 handsets for refurbishment through its partner Hyla Mobile.
Dana Haidan, head of CSR and Sustainability, Vodafone, says, “The initiative encouraged Vodafone customers to exchange their old handset with a 4G-enabled smartphone. Those handsets were then refurbished by Hyla Mobile, formerly known as eRecycling Corps, whose job is to capture, extends and optimise the life and value of used mobile phones. They ensured 100 percent data security for customers, by professionally wiping the phones, before refurbishing or reselling.” Globally, efforts are being made to enhance the life span of electronic devices by repairing or refurbishing them as there is a huge market for such products. According to technology research firm Gartner, the market for refurbished phones – those traded in through a carrier and overhauled before being resold – will be 97 million devices in 2016 globally.
“Up to 90 percent of the world’s electronic waste, worth nearly USD19 billion (QAR69 billion), is illegally traded or dumped each year.”
In most developing countries, there is an enormous number of selfemployed people engaged in the collection and recycling of e-waste. (Image Arabian Eye/Corbis)
The Edge | 39
cover story | e-waste
“The recycling rates are amongst the highest in the EU, but still a lot is unaccounted for. Both illegal dumping, but also organised crime are involved, as they are often paid to get rid of hazardous wastes,” says Christian Nellemann, head of Rapid Response Assessment Unit at GRIDArendal, a centre collaborating with the United Nations Environment Programme.
Biju Nair, CEO of the US-based Hyla Mobile, who claims to have helped operators reclaim over 36 billion devices globally, says their programme with Vodafone Qatar started more than two years ago, when this practice was still maturing in the Middle East market. “Industry data seems to indicate that the Middle East market is warming up to the concept of buy back and trade in as a mechanism to retain customers and being environmentally friendly. In addition to this, Dubai is fast becoming a hub for purchase of used devices for refurbishing and redistribution to the EMEA markets,” he explains.
“Industry data seems to indicate that the Middle East market is warming up to the concept of buy back and trade in as a mechanism to retain customers and being environmentally friendly.” – Biju Nair, CEO, Hyla Mobile.
Certainly, there is a big market for used mobile phones and gadgets, and by refurbishing them, industries can to some extent reduce the amount of e-waste dumped into landfills. According to Annette Zimmermann, a research director at Gartner, instead of the 13 to 15 million refurbished iPhones coming to the market in 2016, that number could now be 20 to 30 million refurbished iPhones, thanks to such programmes. Nair says, “That’s still a small number given Apple sold more than two billion new iPhones since the release of the 6S model, but it should grow.” But what happens to the devices that cannot be repaired further? Nair says they give those devices for recycling to their partners who specialise in these. “They will extract reusable parts from these devices and the remaining parts are disposed of in an environmentally friendly manner. Of the phones we process, we see about five to seven percent get recycled. Others can be repurposed in various ways,” Nair explains.
Economic sense
Still, what is being extracted from these defunct devices is minimal, despite its highly reusable value. The UNU report estimates that the e-waste discarded in 2014 contained some 16.5 million tonnes of iron, 1.9 million tonnes of copper, and 300 tonnes of gold (equal to 11 percent of the world’s total 2013 gold production) as well as significant amounts of silver, aluminium, palladium, and other potentially reusable resources, with a combined estimated value of USD52 billion (QAR189 billion). Some estimates suggest the gold alone was valued at USD11.2 billion (QAR41 billion), with the metal often used in electronic devices. But extracting valuable metals from such devices is an expensive and specialised job that not many countries have managed to accomplish. Even the US, which has a vibrant e-waste management industry, sends a lot of this waste to countries such as Belgium and Japan. These countries have better technology and cleaner factories for the extraction of precious metals from circuit boards and other complicated instruments.
Regional scenario The escalating global e-waste problem is driven by the rising sales and shortening life cycles of electrical and electronic equipment. (Image Arabian Eye/Corbis )
40 | The Edge
Qatar has a handful of waste management companies working in this sector, and most of them are primarily into collection or transportation of e-waste. Besides the
e-waste | cover story
Worldwide disposal of e-waste in 2014
41.8
million tonnes of e-waste was generated in 2014.
6.5
million tonnes are collected by official take-back systems.
4
billion people are covered by national legislation.
USD
52 billion
The value of discarded materials, including gold, silver, iron and copper.
Total e-waste per category
1.0
million tonnes – Lamps
7.0
million tonnes - Temperature exchange equipment
3.0
million tonnes – Small IT
6.3
million tonnes – Screens
11.8
million tonnes – Large equipment
12.8
million tonnes – Small equipment
Source: United Nations University: The Global E-Waste Monitor 2014.
requirement of funding and advanced technology, lack of proper legislation makes it difficult to setup an e-waste recycling plant here. In fact, there are not many advanced recycling facilities operating in the Middle East region. One such plant, which is currently being developed by Enviroserve, is expected to come online in Dubai next year. Stuart Fleming, CEO, Enviroserve tells The Edge, “We will open our USD25 million investment plant with a capacity of 39,000 tonnes in Dubai, in 2017. To be called Gulf Electro Recycling (GER), the plant will offer services to ensure enviro-friendly recycling of e-scrap for the region.” He claims it will be the only such facility in the Middle East. How lucrative is the e-waste management market in Qatar? Fleming points out that one needs to differentiate between the actual scrap and what is known as the remarketing sector – in used electronics. “It’s a volume business. Qatar population and critical mass is something to consider for anyone investing
the type of funds one needs to manage it correctly,” he says, referring to the recycling side of the business; not trading. “Anyone can trade. If a client is looking for high values from their scrap, they have to forfeit data security and brand protection because they go for trade. But one has to be very careful who you trade with,” he adds. Companies working in this sector say logistics can very quickly reduce any margin on e-scrap. “Generally, e-scrap doesn’t cost a whole lot to the end-user but at the same time, it’s not a pot of gold,” explains Fleming. Although at a slow pace, the regional countries are moving forward to develop an ecosystem that can deal with mounting e-waste. “I think it is a conundrum for the authorities right now and moves will be made once, for example, GER is up and running in which case, a genuine regulation can be put into place that provides the solution. For example, what would a country legislate if there is nowhere to formally
process e-scrap?” argues Fleming. With the volume of global e-waste expected to rise by 21 percent to 50 million metric tonnes in 2018, this poses a global challenge. Ostensibly, improper and illegal dumping of e-waste is prevalent in many countries, irrespective of whether or not national e-waste legislation exists. In the absence of appropriate infrastructure and technologies for treating end-of-life electrical and electronic equipment in each nation around the globe, Kuehr emphasises, a coordinated effort along the reverse supply chain is needed. “This is also for not making some nations the graveyard of equipment of others and therefore a matter of environmental justice. But on the other hand, the collection and appropriate recycling of the majority of the e-waste generated is essential for harvesting resources which are rather limited on the earth-crust, but essential for our production chains,” concludes Kuehr. The Edge | 41
business interview | events & conferences
Doha: Destination of choice The Edge’s managing editor Miles Masterson discusses the future of Qatar’s mega events industry with Josoor Institute’s speaker Phil Clements, principal consultant for International Development at Leeds Beckett University. As Doha positions itself as a destination of choice for the international meetings, incentives, conferencing and exhibitions (MICE) market, there is a growing need for the city – and the broader State of Qatar – to set itself apart from its regional neighbours. The Josoor Institute is a centre of excellence for the sports and events industries, inspired and developed by the Supreme Committee for Delivery and Legacy with the goal to develop talented young people in the management and organisation of sporting and nonsporting events within Qatar and the Middle East and North Africa (MENA) region. Phil Clements, principal consultant for International Development at Leeds Beckett University in the United Kingdom (UK), recently spent time in Doha facilitating Josoor Institute’s professional certificate programme in major events management. Clements spoke to The Edge about the challenges and opportunities faced by Qatar’s mega events industry.
42 | The Edge
events & conferences | business interview
Global events expert Phil Clements believes that Qatar’s focus on sporting events and education is the right formula to propel its meetings, incentives, conferences and exhibitions sector into a bright future. (Image Josoor Institute).
The Edge | 43
business interview | events & conferences
Tell us about yourself, and how your experience is being transferred to the Josoor Institute.
We were approached two or three years ago by Josoor Institute to help with the legacy of the 2022 World Cup, upscaling the human resource capability in the whole Middle East and North Africa (MENA) region. With the change in the economics of the region in terms of oil and gas, the Qatar National Vision 2030 accepts that Qatar will have to start looking for new revenues. One of those areas is developing the events sector. We were approached to deliver training and education in this area through a series of short and long courses, which will take place over the next three to five years, leading up to the World Cup. We have delegates from the Supreme Committee for Delivery and Legacy, Doha Film Institute and various educational establishments. We have people from as far as Saudi Arabia, Yemen and all across the region. Anybody in the MENA region who is interested in putting on major events.
You recently attended a programme run by Josoor Institute in Doha. What was the purpose of the programme?
We developed and delivered the material, and we had teams come through from the UK for Josoor Institute’s certificate and diploma programmes. We are the largest faculty in the world dedicated to events management, and we can draw on a lot of expertise. This particular block looked at marketing and communication, the importance of public relations, and so on in the sports and events industries.
When you talk about marketing, do you mean marketing events primarily to the people who are going to attend the events?
Places like Qatar rely an awful lot on the international market, so there is a need to understand the international delegates – whether it be for meetings, conferences or sports events. But we also look at how to deal with sponsors, crisis management, everybody who has an interest in the event. Then of course you have the added challenges of working in this region, with its cultural context and cultural differences. 44 | The Edge
Venues such as the recently opened Doha Exhibitions and Conference Center in West Bay in Doha will ensure Qatar remains a player in the competitive regional MICE market.
“You have to understand what drives the delegate attendees and the people who book these conferences. What motivates them?” Qatar is competing against other destinations, in the region and internationally, for these large events. How does it market itself as a destination?
That’s really interesting. You can talk about the bidding process, because obviously the 2022 FIFA World Cup went through a rigorous procedure there. The fact is, countries have to prove they have the technical ability to do that – and let’s be honest, Qatar has proved beyond doubt that it can hold some amazing sporting events. There are obviously challenges here. Climate is one, but the state-of-the-art environmental air-conditioning that is being put in place is unbelievable. But the other side of it is these other events: cultural events, meetings and conferences. There is a lot of competition with Abu Dhabi, Dubai and even going into Saudi. You have to understand what drives the delegate attendees and the people who book these conferences. What motivates them? What are they looking for? How are destinations like Doha best placed to meet those needs? What will attract delegates is not just the meeting conference: it’s the opportunity to network, to meet, to progress careers, and of course the other activities outside those events.
In the MICE industry, there are other services – like catering, for example – that fall into the slipstream of the main event. Does the Josoor Institute have that holistic view, which looks at all those aspects of the industry?
Absolutely. The main attraction is, of course, the mega event. But beneath that, you have the suppliers of everything from food and beverage to security services, protocol services, logistics, and so on. All these things have to be provided. Quite understandably, the region wants to develop its own in-house capacity, and therefore the development of those skills is vital. This is not just for the World Cup, but right up to 2030. The facilities here in Qatar are state-of-the-art. Now all those auxiliary services have to be provided, together with the smaller events. How can they be used to attract people and increase participation right through the board? It is about upgrading everything: suppliers, smaller events, cultural events, and so on.
events & conferences | business interview
If you want to create an industry, then you need smaller events to sustain the industry in between the big events.
Exactly, and that will increase the attraction of the destination. On the back of the 2022 World Cup you want people to say, ‘Hey, I’d like to go back there. I had the opportunity to taste a bit of the flavour of what’s going on. Let’s go back for a week.’ That would be one of the prime motivations for the World Cup to leverage and develop the tourism industry.
Once the bid has been won, the next step is attracting people to attend the event. How does marketing and PR fit in? Is there a formula?
You’ve always got the basic principles. First, you have to understand who the customer is. What motivates them? What drives them? What’s going to press their buttons in terms of attending or choosing a location? With the MICE market, a potential client – somebody who is going to book a conference – is going to be saying, ‘Should I go to Doha, or should I go to Dubai? What’s the difference?’ There is a difference, and depending on what they are looking for, it’s not just based on cost – it’s based on quality of service. This is a people industry. It is the same with the sporting events. You can bring the big names here, like Federer or Djokovic, and they’re going to attract people. But you’ve got a small domestic population, so you’d have to look outside that – and that has its challenges as well. Event organisers here have to accept they are going to attract international visitors, so they must understand what those visitors are looking for. How do they fit in? What do they need? What can we provide in terms of services?
On a regional level, visitors might be able to attend a number of different events within their interest on the same trip.
It’s about synchronising it. If you want people to stay at a destination for longer, then give them a reason for doing that. I remember years ago working in Sydney, Australia, with Tourism New South Wales. They categorically said that they did not particularly want more visitors; they just wanted them to stay longer. So if you can put on a conference here, and tie it on the back of another conference, you’ll get people staying. The idea is that if you can get people to come here for conferences, then you can offer the other attractions. I am always amazed that when you come to Doha, there is always something going on in terms of sport.
How does Qatar distinguish itself from other Gulf states? What is its unique selling point?
Two words: affordable luxury. That seems to be the byword for everything in Qatar. In my opinion, Dubai has developed to become more a tourist destination. I hate to say it, but it’s a bit like the Disneyland of the Middle East. I think Qatar is looking to focus itself on sport, which reinforces with the World Cup and other fantastic events, and on education. There
The Josoor Institute aims to develop talented young people in the management and organisation of sporting and non-sporting events within Qatar and the Middle East and North Africa region. Clements recently spent time in Doha facilitating Josoor Institute’s professional certificate programme in major events management. (Image Josoor Institute)
“I think Qatar is looking to focus itself on sport, which reinforces with the World Cup and other fantastic events, and on education.”
are many opportunities in Qatar to become a centre for the whole MENA region in terms of education, as we are doing with the Josoor Institute.
Moving forward, what are the major challenges for Qatar in the MICE industry?
With education you have the growth. It is an education city. You have some major, world-leading universities coming here, which can only add to that equity. Sport is a different one. There is quite an emotional level to sport. You have the facilities, and you are attracting big names here. Now it is about saying, ‘Well, actually, we want to move into hosting more and more major, world-class tournaments.’ The beauty of the World Cup is that, once you have delivered that, you have shown you can do it. That is the proving ground. Qatar has done the Asian Games in 2006, it has run smaller events like the International Paralympic Committee Athletics World Championships in 2015, and it is starting to develop a reputation of being able to deliver. Once you can deliver, it’s a snowball: ‘We are successful. We can do this.’ This is an edited version of a podcast interview by The Edge. Listen to the full conversation on The Edge: Business News from Qatar and beyond, available through Soundcloud and iTunes, Ginger Camel Media Network, or at theedge.me/podcast
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special feature | qatarisation
Qatarisation: creating careers for nationals Human capital creation is one pillar of the Qatar National Vision 2030, and the National Development Strategy 2011-2016 suggested the way forward, in the short term. Qatarisation is the process of creating a quality employable talent pool of Qataris. To understand where this effort lies in the view of leading corporates, The Edge spoke to a variety of stakeholders to gauge the impact the initiative has had.
W
hile being wealthy, the hydrocarbon rich Gulf Cooperation Council (GCC) countries have a unique similarity: they are all dependent on expatriate labour. In November 2005, Abdul Rahman Al Attiyah, the fourth GCC secretary general, warned about the possible consequences of the situation. “The GCC countries need to look at the massive presence of expatriates basically as a national security issue, and not merely as an economic matter.” These concerns have led GCC states to create nationalisation plans to ensure that more nationals are employed in all sectors. In an attempt to decrease the dependence on foreign labour, Qatar started its own national plan: Qatarisation. In her research paper entitled, Qatarization Policy – Implementation Challenges (published under the aegis of Brookings Center Doha), Maryam Al Subaiey, Qatari writer and entrepreneur, wrote, “The reason this strategy is crucial to Qatar’s development is that it constitutes an investment in human capital that ensures knowledge transfer for future generations of Qataris. It therefore plays a significant role in the creation of a knowledgebased economy. In this context, the World Bank was asked by the Planning Council of Qatar and the Qatar Foundation to carry out an assessment that would help to formulate a vision for a knowledge-based economy – part of the National Vision 2030 initiative. The vision promotes economic incentives and governance frameworks which support a knowledgebased economy through investing in education and learning, innovation, and information technologies.”
46 | The Edge
Speaking with leading corporates in Doha, The Edge found out about their Qatarisation policies and what is in the pipeline for the next couple of years. THE POLICY INITIATIVE HSBC, in the words of Abdul Hakeem Mostafawi, CEO of HSBC Qatar, has a history that spans 62 years in the country. “From the outset, HSBC invested in the development of its workforce and offered great career prospects for its diverse employee base. As an international bank in Qatar, it has always been a priority to invest in the local talent as part of its contribution to the Qatar National Vision 2030 and also to ensure the connectivity with the business community of the country.” Incidentally, Mostafawi mentions that the longest serving employee in the history of HSBC worldwide, Hajji Qahtani, was a Qatari national who retired last year after working 54 years for the bank in Qatar. According to Erhama Al Kaabi, senior advisor to the CEO, at RasGas, Qatarisation is not a mere number to be achieved. “For us, it is a commitment to support and promote the development and success of Qataris who add value to the company.” Al Kaabi adds that the company’s goal is to build a competent, talented workforce of Qatari nationals through clearly-defined roles, responsibilities and meaningful assignments, ultimately creating a high-performance working culture in which people thrive and are fulfilled in their professional lives.
qatarisation | special feature
Qatarisation is crucial to Qatar’s development because it constitutes an investment in human capital that ensures knowledge transfer for future generations of Qataris. (Image Foto Arabia)
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special feature | qatarisation
Al Kaabi reveals that RasGas’ overall Qatarisation rate currently is 38 percent, which, given the competitive labour market for quality national employees, the company considers a success, and “one that we intend to build on”. For Standard Chartered Bank Qatar, the main reference when it comes to talent is the Qatar National Vision 2030, in the opinion of Charles Carlson, CEO of the bank in Qatar. The vision, Carlson mentions, has human development as one of its four pillars, with the aim of creating a capable and motivated workforce through training and development, in addition to ensuring the existence of the right mix of expatriate and local labour. In this context, Carlson also mentions that the bank’s recent support of the Qatar Finance and Banking Academy’s training initiative, Kawader, is testament of their drive to make sure that Qataris receive the best and highest training in the financial sector. “This,” Carlson says, “will encourage Qataris to join the sector and join us where we aim to provide further training and development as well as exposure to our international markets and experience. Our goal is to empower highly qualified Qataris and groom them for
“Our goal is to empower highly qualified Qataris and groom them for leadership positions within the bank, locally and across our markets globally.” – Charles Carlson, Standard Chartered Bank.
Security concerns have led the GCC states to create nationalisation plans to ensure that more citizens are employed in all sectors. (Image RasGas)
48 | The Edge
qatarisation | special feature
90%
Percentage of all jobs in public sector that Qataris will hold by 2016.
leadership positions within the bank, locally and across our markets globally.” Qatarisation Policy Commenting on HSBC’s Qatarisation policy, Mostafawi tells The Edge that this is part of the overall development plan for the bank’s workforce. “We take priority in investing in current Qatari employees to ensure that we develop their talents and prepare them for future leadership positions in the bank.” HSBC focuses on recruiting fresh graduates who have an interest in an international career through the graduates programme (Tomouh) and then invest in their continuous development as future leaders in the bank. “At the moment,” informs Mostafawi, “three Qatari graduates are part of this programme in Qatar and four more will be recruited this year.” The bank also invests in scholarships for high school graduates who aspire to have future careers in banking, says Mostafawi. RasGas’ Qatarisation plan, says Al Kaabi, is underpinned by five strategic themes, including: developing and institutionalising an integrated planning process; creating employment and development opportunities for nationals; building strong mentoring and coaching capabilities; continuing to develop relationships with the education sector. To this end, the company offers a well-defined career development framework that provides the tools and support for clear career planning. Qatari employees are provided with diverse, best-in-class training that focuses specifically on their needs, including orientation sessions for less-
Commenting on HSBC’s Qatarisation policy, Abdul Hakeem Mostafawi, CEO HSBC Qatar, tells The Edge that this is part of the overall development plan for the bank’s workforce, “We take priority in investing in current Qatari employees to ensure that we develop their talents and prepare them for future leadership positions in the bank.”
experienced staff, skills development training and English language courses. The aim is not necessarily all about the numbers, states Carlson on Standard Chartered Bank’s Qatarisation policy. “Our aim is to hire highly qualified Qatari talent,” Carlson adds, “We know that is now possible given the various competitive training and development programmes offered through reputable institutions.” Commenting on recent news reports that Qataris will comprise 90 percent of all jobs in the public sector by 2016, Carlson mentions, “The 90 percent is a number that only aims to solidify the concept of taking onboard talented Qataris, and in line with Qatar’s National Vision 2030.” The way forward Talking to The Edge about the immediate Qatarisation plans within HSBC in the next two years, Mostafawi says that the bank has recently recruited a number of high school graduates who will now start The Edge | 49
special feature | qatarisation
their university careers. “During their studies, we will offer them internships over their holiday breaks and we will also guide them through the mentoring programme that we have in the bank,” Mostafawi adds. Additionally, HSBC is currently recruiting candidates for the Tomouh programme whereby employees will undergo a two-year intensive learning programme that will include a stint in the regional office in Dubai and global hubs in London and Hong Kong as well as exposure to different departments within the bank. “Once they complete this programme, they will be ready for leadership positions within HSBC in Qatar,” mentions Mostafawi. RasGas is working towards a goal of 50 percent Qatarisation in permanent positions within a reasonable time period, and has recently implemented five-year rolling plans which include realistic annual targets to ensure that they meet that goal, says Al Kaabi, adding, “We recognise that retaining Qatari staff will be increasingly challenging as the economy diversifies, but our plan is to continue as we have, striving for the progress and prosperity of our people by providing a supportive working environment that offers opportunities to learn, grow, be challenged and ultimately, rewarded, as Qataris fulfill their personal potential.”
38%
RasGas’ overall current Qatarisation rate.
For Standard Chartered Bank Qatar, the main reference when it comes to talent is the Qatar National Vision 2030, in the opinion of Charles Carlson, CEO of the bank in the country.
50 | The Edge
According to Erhama Al Kaabi, RasGas senior advisor to the CEO, at RasGas, Qatarisation is not a mere number to be achieved. “For us, it is a commitment to support and promote the development and success of Qataris who add value to the company.”
“From the outset, HSBC invested in the development of its workforce and offered great career prospects for its diverse employee base.” – Abdul Hakeem Mostafawi, HSBC.
qatarisation | special feature
Growing the Qatari workforce:
What it means for the private sector With the continued volatility in energy prices and mixed sentiments about the economy, 2016 is projected as a year of ‘cautious optimism’ across the Gulf Cooperation Council (GCC), and organisational and HR leaders are scrambling to review their budgets and optimise costs. The mantra is simply to do more with less, write Radhika Punshi and David Jones.
B
usiness leaders have often expressed concerns about how human resource (HR) professionals need to get more strategically aligned to the business and rely less on using HR jargon and buzzwords that make little sense to anyone outside the HR team. How does the current economic climate impact the investment and progress (or lack of) that employers are making with Qatarisation? Needless to say, the nationalisation of the workforce continues to be the single biggest business and HR concern for employers and though spending on Qatarisation priorities may be slightly curtailed, we expect the opposite trend. Spending on Qatarisation will continue to increase as a proportion of HR budgets, and we will possibly see bigger cuts in recruitment budgets as well as the engagement and development of expatriates. However, the fact remains that Qatar continues to be one of the most, if not the most, competitive labour markets for local talent globally. Consider these facts. According to figures released by the Qatar Statistics Authority (Labour Force Statistics Bulletin 2012) and research by our team at The Talent Enterprise: • Out of a total labour force of 1.34 million, only 88,600 or so are Qataris. • 99.2 percent of private-sector jobs are held by expatriates. • The total number of Qatari students in public and private universities is about 10,115. • The total number of graduates that Qatar had in 2013-2014 was around 1970 and this number went up to around 2165 Qatari graduates for the subsequent year. • Finally, when you filter the list of
1.
2.
3.
4.
viable graduates (by their degree/ qualification), this number drops to nearly 550 to 650 potential candidates for employers to hire. This is of course assuming that all of these students would be keen to work. Our recommendations on the top five future Qatarisation priorities for 2016 and beyond are: Retain, upskill and reskill existing Qatari employees for the future: If HR teams had to prioritise one thing for 2016, we would recommend refocusing your attention on the retention of your current workforce, and investing in their skill development to take on roles in the future, both technical roles and as future leaders.
Radhika Punshi is managing director and David Jones is the CEO at The Talent Enterprise.
Focus on performance and productivity: There is still much to be desired in the way business and HR leaders set up and manage the performance of their employees. Focus on quality and not quantity of new hires: We would recommend developing a stronger employer brand which sets clear expectations on who would and who would not fit within the company, as well as using a more rigourous process for selection incorporating aspects such as assessment centres and psychometrics, which reduces the subjectivity of the process. Engage with education early on to build employability skills: The message here is self-explanatory. Employers need to engage with policy makers and educational providers
early on to design curriculums, workstudy programmes, etcetera, to ensure that students display essential work readiness and key life skills such as grit, resilience, positive mindset, confidence and realistic expectations from the world of work. 5.
Develop a sustainable expatriation strategy: It may be counter-intuitive to include this point as one of the key priorities, however, successful nationalisation can only be achieved side-by-side with successful and inclusive expatriation. This is not a zero-sum game and to sustain Qatar’s growth ambitions, relying on the skills, experience and contribution of foreign workers will continue to be a key part of the national agenda. The Edge | 51
fullstream ahead In an exclusive conversation with The Edge, Lorenzo Simonelli, president and CEO, GE Oil & Gas, outlines his company’s approach to satisfying the rapidly changing needs of the global hydrocarbons industry, detailing the importance of providing seamless geographic and product lines based on technical innovation and individual customer solutions. Story by Simon Watkins, interview by Syed Ameen Kader.
H
aving joined US conglomerate General Electric (GE) on its Financial Management graduate programme back in 1994, Lorenzo Simonelli worked across a range of GE businesses, including its huge Consumer and Industrial line and its global transportation segment before joining GE Oil & Gas. This has enabled him to bring to the business an appreciation of the importance of focusing on the benefits of advanced technology, intelligent systems, and working with individual clients across each of the three key areas of oil and gas - upstream, midstream, and downstream. “We have all of the measurement and control systems that are key to each of these areas across the entire value chain – from oil and gas drilling equipment and subsea systems, to turbo-machinery solutions, through to downstream processing, so we are neither just upstream nor downstream; we are fullstream,” he tells The Edge.
Global reach A foundation stone of GE Oil & Gas’ ability to take this approach is its sheer scale – 45,000 employees worldwide, at least USD5 billion (QAR18 billion) invested on research and development per year plus seven global research centres developing new technology, and its drilling systems being used in around 85 percent of offshore rigs. This allows the company to optimise synergies on all business levels across its products and services lines; especially important given the ongoing downturn in the hydrocarbons pricing complex. “We are working very closely with our customer partners on elements to reduce costs and becoming more productive can be achieved in a number of ways in the current market environment,” says Simonelli. “The first stems from product standardisation, rather than having everything customised, which results in greater cost-effectiveness; and the second is an awareness of environmental concerns; even before the COP21 Conference, we had been focusing on minimising CO2 and opportunities to re-inject in carbon capture, within our ‘Ecomagination’ programme,” he says, “whilst the third is all about working with our customers on the whole issue of project life cycle costs.”
52 | The Edge
”I don’t control the price of oil, but what I do control is the execution in the field, the costs and the relationships that we have with our customers and making sure that everybody stays motivated, so that’s what we are focused on,” Lorenzo Simonelli, President and CEO, GE Oil & Gas, tells The Edge. (Image Syed Ameen Kader)
The Edge | 53
business interview | oil & gas sector
The Industrial Internet In this latter regard, Simonelli stresses, the key remains the convergence of industrial machine, data and the Internet – termed the ‘Industrial Internet’ – which has the power to lift machine productivity, improving reliability and uptime, and bring down costs. According to GE Oil & Gas, the energy industry’s estimated downtime ranges from five to 10 percent, and the estimated average annual cost for a mid-size liquefied natural gas (LNG) facility due to unplanned downtime is USD150 million (QAR546 million), with an offshore well out of commission costing operators USD7 million (QAR25 million) per day in lost revenue. A corollary of this is that, by 2020, according to industry figures cited by GE Oil & Gas, the total technology spend on Industrial Internet is estimated to reach USD514 billion (QAR1872 billion), creating nearly USD1.3 trillion (QAR4.7 trillion) in value, which translates into to a return on investment of around 150 percent. “At GE Oil & Gas, Industrial Internet technologies underpin our technology and service strategy: more data means more control, which means less unplanned downtime, and the oil and gas industry, where assets and technology are often remote and hard to access and downtime is costly, is a particularly important market for this,” says Simonelli.
“If you look at the digital tools that we are applying now at RasGas and Qatargas, it’s all towards anticipating downtime, optimisation and better productivity.” These new software technologies, highlights Simonelli, range from managing networked fields, to ‘intelligent pipeline’ software and analytics, to underwater remote monitoring systems, and are part of a three-pronged approach to reducing costs, increasing efficiency, and optimising production, he says, with the first being ‘unified operations’, which connects all of the equipment in one site, providing the information on that equipment and allowing GE Oil & Gas to optimise its running and anticipate downtime parameters. The second component is the ‘Field Vantage’ software solution system that enables operators to greatly reduce risk and variability by flagging which equipment issues are likely to cause deferments to help minimise unplanned work-over, deploy
GE’s drilling systems being used in around 85 percent of offshore rigs – which allows the company to optimise synergies on all business levels across its products and services lines. (Image GE Oil & Gas)
54 | The Edge
resources, and minimise lost production. The system ties in to GE Oil & Gas’ overall solutions platform that ensure the optimal pump flow essential to meeting production targets. “Our advanced logic enables better and faster decision-making by monitoring and recommending operational set points to optimise oil production, reduce power usage, and maximise run life, which results from well, field and operation-wide visualisation, life cycle management, and prioritised alerts to enable efficient rig and crew deployments across the complete artificial lift operation,” Simonelli tells The Edge. The final element of this three-point strategy is ‘intelligent pipelines’, which is software that enables GE Oil & Gas to read what is happening to the pipeline, to be able to see if there is a leak taking place through leak detection tools and sensors that capture and come back, so reducing the expense required to go out and look at the pipeline, as it is all done from a central location. In sum, says Simonelli, the Industrial Internet systems offered by GE Oil & Gas, mean that it has connected gas turbines to scanners with sensors and software that monitor and collect data on the health of different parts of that machine, a cloudbased Internet platform that then analyses this data through advanced analytics involving historical data points to provide machine operators and maintenance engineers with real-time information. All of this is used to schedule predictive maintenance checks that improve machine efficiency as well as prevent downtime to improve overall productivity. Business in Qatar GE has been in Qatar since 1971, when the supergiant North Field (Qatar side)/South Pars (Iran side) natural gas condensate field was identified, with in-place volumes
oil & gas sector | business interview
of gas estimated to be around 1800 trillion cubic feet and some 50 billion barrels of natural gas condensate. “We have a large installed base of gas turbines, as well as aero derivatives from a compression standpoint, a service centre, and various technology projects in-country, and we work closely with RasGas, Qatargas, the downstream of QAFCO [Qatar Fertilizer Company] in addition to the various consortia at play here,” says Simonelli, “In fact, we have got 11 patents that have been issued at the Qatar Science and Technology project, with another eight pending.” Ensuring that its operational recommendations and product implementation for customers is as optimised and efficient as possible in all market conditions, through the interconnectivity of ‘smart’ systems and equipment lies the heart of GE Oil & Gas business in Qatar, underlines Simonelli. “If you look at the digital tools that we are applying now at RasGas and Qatargas, it’s all towards anticipating downtime, optimisation and better productivity, and if you increase the production by one percent, or you reduce the unplanned downtime by one percent, this means serious savings and opportunities for the operator,” he tells The Edge. “In addition, if you think of an LNG outage, if you are able to take down the number of days’ outage from 26 to 24, that two days saving is extra cargo that you are able to produce from an LNG perspective. So we are focused on making sure that we provide solutions during this tough timeframe and also stay very close to our customers on a local level,” Simonelli adds. This concept of localisation is a strategy for GE as a whole that is separate and distinct from local content compliance,
in that it focuses on capacity building – in human capital growth, supply chain development and partnership with local organisations and businesses – for talent and infrastructure development, according to Simonelli. The core idea of having the opportunity, as a global company, is to have a well-rounded economic impact on the regions where it operates, enabling growth in the communities in which it works, while concomitantly increasing the productivity, is one to which GE Oil & Gas is committed, regardless of temporary fluctuations in the dynamics of the global hydrocarbons market. Hydrocarbons pricing downturn In this context, Simonelli’s view is that, despite the challenging time currently, GE Oil & Gas has to be aggressively out in the marketplace on the offensive. “I don’t control the price of oil, but what I do control is the execution in the field, the costs and the relationships that we have with our customers and making sure that everybody stays motivated, so that’s what we are focused on,” he underlines, adding, “It’s really the execution within GE, operational execution and excellence on an ongoing basis, but at the right cost, with the quality in place and then the relationships and focusing on future technology that is at the core of our approach to the present difficult market circumstances.” One of the evident risks, of course, during a down-cycle is that good talent is lost, but GE has a focus on ensuring that it has training in place to capture and retain the most important people in the industry. “It’s a balancing act in the current market environment: on the one hand, you have to make sure that you are taking the appropriate actions from a cost perspective, but on the other you are
“It’s a balancing act in the current market environment: on the one hand, you have to make sure that you are taking the appropriate actions from a cost perspective, but on the other you are investing for the future through training.”
With the help of Industrial Internet technologies, GE Oil & Gas’ Simonelli says, you can have access to more data which means you have more control over unplanned downtime. (Image Oil & Gas)
investing for the future through training.” Part of GE Oil & Gas practical solution to this conundrum is to look at the situation from a volume standpoint, adds Simonelli. “You don’t need as many people in a factory when volumes are down but, on the engineering front, we have remained very much focused on our technology spend, and making sure that we are creating the talent that is necessary for the long-term,” he says. “As the industry comes back, some of that labour that exited can come as well, as the volume of products needing to be manufactured also rises: GE has been around for over one hundred years, and we plan to be here for another hundred and we’ve got to stay flexible and nimble and that’s what we do,” Simonelli concludes.
London-based Simon Watkins is The Edge magazine’s global energy editor.
The Edge | 55
Inside the minds of leading business figures
business insight Qatar insurance market is third in the region on volume of gross written premiums 58 Salim Mansour, country manager, AXA Gulf, speaks to The Edge about the general insurance company’s business philosophy and their plans for Qatar for 2016.
Having a clear and refined target market always gives our hotels an advantage 60
Ahead of the official opening of the Sapphire Plaza, a four-star hotel with 174 rooms and suites, Ahmed Abdelrazek, managing director, Sapphire Hospitality and Management, talks about the growth prospects of the hospitality sector in Qatar, and shares how a shortage of supply in the mid-market segment creates a perfect business opportunity to launch the property.
62 “The Qatar Armed Forces aims to develop a technically advanced military force to ensure its readiness to meet the challenges of the maritime domain in the 21st Century,” says Brig. Dr. (Eng) Thani A Al Kuwari, Chairman, DIMDEX.
Pictured above is the exhibition area at DIMDEX 2014, which had more than 80 VIP delegations participating from 58 countries.
The Edge | 57
business insight | insurance sector
underwriting risks
Qatar insurance market is third in the region on volume of gross written premiums Salim Mansour, country manager, AXA Gulf, speaks to The Edge about the general insurance company’s business philosophy and their plans for Qatar for 2016. Tell us about yourself: your professional experience and your role at AXA Gulf. I am currently the country manager for AXA Gulf in Qatar, a post I have held since joining the company in 2012. In my role, I am mainly responsible for growing AXA Gulf’s operations in line with AXA’s strategy in the Gulf Cooperation Council (GCC) region. I have more than two decades of experience in sales and healthcare operations. Prior to joining AXA Gulf, I worked with Ufa Assurances in Lebanon as the sales and marketing director and before that, I worked with Bupa Arabia in Saudi Arabia for 14 years, where I led the sales operations for the company across the country besides also training the sales force. How would you describe the business philosophy of AXA Gulf? Our mission is to protect people when they need us as well as increase risk awareness. AXA Gulf wants to lead the change by becoming the preferred company by being more available, attentive and reliable to our customers, distributors, partners, employees and shareholders. As a company, we have achieved success in offering creative ideas, global reach and highly flexible service capabilities matching the best-in-class insurance solutions to make our clients’ lives easier. We have invested a lot to remain close to our customers, listen and respond to their expectations as customers are looking for a one-stop trustworthy insurer. We are convinced that building on our key differentiating assets can only fulfil our ambition. These include our unique distribution mix, digital strategy underwriting agility, talent acquisition, international brand, and segmented product approach. We are also committed towards our community and causes we associate with include road safety, breast cancer and diabetes. Tell us about your assessments of the Qatar market, especially when it comes to the level of competition. According to Moody’s, which provides credit ratings, research, tools and analysis that contribute to transparent and integrated financial markets, Qatar currently sits third after the United Arab Emirates (UAE) and Saudi Arabia, in terms of the volume of written premiums in the insurance sector, which amounted to around USD2.2 billion (QAR8 billion) in 2014. That figure was expected to increase to USD2.5 billion (QAR9.1 billion) by the end of 2015, 58 | The Edge
with some monitoring agencies predicting an increase of 20 percent over 2014. Despite the fact that Qatar’s economy is smaller than other GCC countries, it does benefit from the high level of investments in different sectors, which would definitely reflect on the growth of the insurance sector. The insurance sector in Qatar still operates in a centralised manner, meaning that it is directly connected to the Qatari government, which is its biggest investor. With advancements in sports, tourism and investment planned by Qatar over the next five years, Moody’s expects the insurance
“We are convinced that building on our key differentiating assets can only fulfil our ambition. Assets include our unique distribution mix, digital strategy and underwriting agility, among others.”
insurance sector | business insight
sector to grow immensely and comprise 1.5 percent of the nation’s gross domestic product. On the other hand, competition and price wars are among the main challenges faced by the insurance sector globally. The increased number of players, combined with soft market conditions and a lack of expertise in underwriting and portfolio management skills, have taken a toll on the profitability of the insurance companies and most have reported a decline in their return on assets. Pricing is a key insurance decision. How does AXA arrive at a price peg for a particular risk? Insurers in general should take responsibility and revert to sustainable price levels in order to not put their profitability/business at stake. Today, the insurers that will succeed will be the ones who are delivering solutions in line with customer needs. The market offers huge potential to grow and at AXA Gulf we are committed to invest and develop our services, which are aligned with our objective to be one of the leading international insurers in the country. To address the increasing competition in the market, we have redefined our campaign strategy and focused on innovation by launching new products that are well-suited for the price-conscious customer. This product allows our customers to ‘select’ their options, in line with their needs and expectations, thereby providing a competitive edge, whilst also ensuring that there will be no compromise on benefits and service. Our strategy is centred on maintaining a long-term profitable book of business to ensure long-term sustainability in the best interest of all stakeholders. As our book of business has strongly grown in the past year and at a much quicker pace than the market, we expect it to continue in the coming years. Talk us through the various risks that AXA covers, on your business side. What are the most promising ones in the region? AXA Gulf offers a wide range of insurance products and services for corporate, SME and individual customers. In my opinion health and motor insurance are on top of the list as it is mandatory by law in some of the countries in the GCC. Other insurance solutions and products that AXA offers its
“To address the increasing competition in the market, we have redefined our campaign strategy and focused on innovation by launching new products that are well-suited for the price-conscious customer,” Salim Mansour, country manager, AXA Gulf told The Edge.
customers include property and casualty, marine, liability, group personal accident, art and crime. What about the risks on the retail/individual side? We offer insurance solutions that cover motor, health, travel, home, yacht, personal accident. What are your business plans for the next three years in the region? At AXA Gulf, we see a lot of growth potential in the Gulf region and hence we are focused on expanding our presence in the market by offering unique and tailored insurance solutions for various customer groups. Our main priorities for 2016 would be: accelerate growth in untapped streams; invest more in distribution to increase our footprint through our multi-access strategy; reinforce our market share in compulsory products (health and motor); improve our efficiency to optimise productivity and management of expenses; continuing to invest in recruitment, training and development of nationals; and continue to innovate both in quality of service and products to adapt our offering to customer needs. The Edge | 59
business insight | hospitality
MID-MARKET SEGMENT
Having a clear and refined target market always gives our hotels an advantage Ahead of the official opening of the Sapphire Plaza, a four-star hotel with 174 rooms and suites, Ahmed Abdelrazek, managing director, Sapphire Hospitality and Management, talks about the growth prospects of the hospitality sector in Qatar, and shares how a shortage of supply in the mid-market segment creates a perfect business opportunity to launch the property.
“It is very important to understand the reason behind a person’s choice of travel or hotel, no matter whether they are business or leisure travellers, or even corporate clients,� Ahmed Abdelrazek, managing director, Sapphire Hospitality and Management, told The Edge.
60 | The Edge
After having a soft launch in September, you are now preparing to open the hotel for guests later this year. Do you think the timing is right for launching a new property when the market is tough? Yes, we had our pre-soft opening last September 2015. In regards to the timing, what I can say from my 25 years of experience working for many big hotels and resort chains is that there is no universal rule about the best day to launch a property. However, as a preparation for opening this hotel, we have taken into consideration a number of things such as developing a market study and action plan, formulating a strategy for upcoming events in Doha and so on. That is why we are definitely confident
hospitality | business insight
of our decision to launch our first four-star hotel, Sapphire Plaza hotel, in Doha, Qatar. Qatar’s hospitality sector over the years has seen much of its new supply coming in for the high-end, luxury and five-star segments. The country seems to have a shortage of midmarket properties. Yours is a fourstar hotel. Is it a deliberate strategy to capture the mid-market segment? The market in Qatar has been actively developing a new dimension of luxury hotel and apartment properties for the past years. So, I would say, yes, one of our major focuses is the mid-market segment. We intent to offer spacious rooms with understated luxury services and elegance, just like a five-star hotel, but at a good price. So would you say that your unique selling proposition (USP) is offering luxury services at a good price. How are you going to present yourself in the market which is seeing a tough competition due to new supply? Our USP is to establish a close rapport with our mid-market segment, business and leisure travellers. Yes, having a clear and refined target market always gives us an advantage and better understanding. There can be hundreds of hotels in Doha that offer food and lodging, but what Sapphire Plaza hotel is looking to provide is a superior experience at a reasonable price. To sum up, I would say it is very important to understand the reason behind a person’s choice of travel or hotel, no matter whether they are business or leisure travellers, or even corporate clients. Tell us about your parent company and how that experience helped you venture into the hospitality sector. Our parent company, Dania group – which was established in 1997 and promoted by our chairman Sheikh Nasser Bin Mohammed Al Thani and Shahzad Ahmed Mughal, CEO and partner – plays an enormous role in achieving business success and company’s growth. Dania group has a wide range of business divisions such as real estate, contracting, interior designing and decorating, trading, travel and tourism, entertainment, and information technology. Driven by the sense of commitment to develop a new dimension in the hospitality sector, Sapphire Hospitality and
“Among its neighbours, for the past years, Qatar remains one of the largest and fastest growing markets in hospitality and tourism industries, registering an average annual visitor’s growth rate of 11.5 percent.”
Management has managed to establish itself in the first quarter of 2014. Certainly, our parent company has played a big role in that by providing full support – right from selecting property locations, furnitures and IT solution to helping us put out our first four-star hotel, in September 2015.
These impressive results are certainly having a positive impact on us. I think Qatar will get along in terms of tourism numbers, especially due to the upcoming 2022 World Cup, which will also offer good business and investment opportunities.
What is your take on the growth prospects of the hospitality and tourism sector in Qatar? Among its neighbours, for the past years, Qatar remains one of the largest and fastest growing markets in hospitality and tourism, registering an average annual visitor’s growth rate of 11.5 percent. According to Qatar Tourism Authority (QTA), the tourism sector recorded an impressive performance last year, registering 3.7 percent increase in the number of foreign visitors, in comparison to 2014. The country received 2.93 million visitors in 2015, when the hotel occupancy rates stood at as high as 71 percent, despite the addition of 15 new hotels into the market. The interesting thing to notice here is that hotel and hotel apartment data showed a positive performance with especially high occupancy rates in four-star hotels and standard hotel apartments.
The majority of Qatar’s travellers fall within the business segment, with a very low number of leisure travellers. Is this your main target market? Yes, one of our target markets is the business travellers who are looking for convenience and a good price. There is a fear of oversupply in the market due to the massive planned supply that is expected to enter in the run-up to the 2022 World Cup. Are you concerned about your occupancy rates and profits post the 2022 World Cup? In terms of number, I do not think there will be any effect on the hotels after the 2022 World Cup. In line with the Qatar National Vision 2030, Qatar is growing and so is the hospitality sector. The number of investors and visitors into this country are also increasing rapidly. We believe that after the 2022 World Cup, Qatar market will grow strongly and will continue to do so over the next decade. The Edge | 61
business insight | events
maritime sector
DIMDEX event is not just about Qatar, but it acts as a gateway
to the MENA defence market Hosted and organised by the Qatar Armed Forces, the fifth edition of Doha International Maritime Defence Exhibition and Conference – DIMDEX 2016 – is ready to take place in Doha between March 29 and 31, 2016. Speaking exclusively to The Edge, Brig. Dr. (Eng) Thani A Al Kuwari, chairman, DIMDEX, shares how the biennial event has evolved over the years, and its growing significance as a regional platform to discuss topics relating to trade, business and security.
What are your expectations for this year’s DIMDEX? Are any countries participating for the first time? DIMDEX has grown year on year and is now comparable in size and reputation with the largest shows of its type in the world. We expect this trend of growth to continue at DIMDEX 2016, and we have witnessed unprecedented levels of interest being shown by international and local exhibitors across different defence sectors since the event’s launch during International Defence Industry Fair in Turkey in May last year. This growth is reflected through the increase in exhibition space at the Qatar National Convention Centre (QNCC). 62 | The Edge
“The Qatar Armed Forces aims to develop a technically advanced military force to ensure its readiness to meet the challenges of the maritime domain in the 21st century,” says Brig. Dr. (Eng) Thani A Al Kuwari, Chairman, DIMDEX.
business insight | events
“The Gulf Cooperation Council countries in particular have historically had large defence budgets and been active buyers of the most technologically advanced defence equipment.”
In 2014, 82 delegations from 58 countries visited DIMDEX, and we are pleased to welcome three new countries – Canada, Finland and the Ukraine – exhibiting this year. What would be the major topics of discussion during this year’s conference? The high-level Middle East Naval Commanders Conference (MENC) is a major component of DIMDEX. The world’s top defence authorities will come together to share their insights about the key factors influencing the maritime defence industry in the region. The theme of this year’s MENC is: ‘The Maritime Domain – The Centre of Gravity for the Regional Security Complex of the Arabian Gulf’. The sea connects all states along the coast of the Arabian Gulf and our expert speakers will explore the diverse range of topics related to its security, not just from a military point of view, but also from security, freedom of navigation around maritime choke points, and environmental security. With senior military officers, highlevel delegations, academics and warship crews attending from a host of different nations, the MENC will help facilitate regional cooperation, as maritime security challenges are most often shared by countries in this region, and they are always debated at MENC in the spirit of military cooperation and exchange of information. What is the main purpose of organising this event? DIMDEX is organised for the advancement, prosperity and development of the state of Qatar in line with the vision of His Highness Sheikh Tamim bin Hamad Al Thani. Defence is a huge global industry and by welcoming major defence companies as exhibitors, VIP delegations from over 50 countries, and warships to Doha Commercial Port, DIMDEX has become a key event for Qatar’s meeting, incentive, conference and exhibition (MICE) sector. It strengthens the country’s reputation as a world-class business destination. DIMDEX has also become one of the most prominent non-tactical achievements of the Qatar Armed Forces and with a distinguished panel of expert speakers, MENC acts as Qatar’s platform for thought leadership in international maritime defence policy and practice.
Moving forward, how does Qatar wish to pursue its goal of fulfilling the needs of defence equipment? Do you plan to encourage the development of more manufacturing and assembling industries within Qatar? The Qatar Armed Forces aims to develop a technically advanced military force to ensure its readiness to meet the challenges of the maritime domain in the 21st century. Beyond the defence of Qatar’s territorial waters, this capability will allow Qatar to respond effectively to address new threats to security in the region. We are delighted to see that in addition to the return of defence industry giants attending DIMDEX 2016 as exhibitors, this year is notable for the increased attendance of local exhibitors, which we encourage and support. Why do you think Qatar is a lucrative defence equipment market? What are the business opportunities available for global manufacturers and suppliers? DIMDEX 2016 is not just about Qatar, but it acts as a gateway to the often difficult to access maritime defence market of the Middle East and North Africa region, where the studies indicate that deals are on the rise. The Gulf Cooperation Council (GCC) countries in particular have historically had large defence budgets and been active buyers of the most technologically advanced defence equipment. DIMDEX prides itself on linking exhibitors with the most sophisticated technology with senior defence procurement officials and decision-makers. Do you foresee any challenges for this sector? There will always be government-led demand for maritime defence technology as it is essential for protection of sovereign territory, maritime assets and trade routes upon which national economies – and in the case of the GCC – the global economy relies. The main challenge facing the growth of the maritime defence industry is keeping pace with the ever-changing threats to the security of territorial and international waters. This must be met through the adoption of new technologies, and for the sector to grow, companies must continue adapting and innovating in response to these threats.
products & reviews
Read it:
27 Powers of Persuasion
Convincing people to do more or less, if not exactly, what you want them to do is a powerful trait to hold, one that most highly successful people have in some way. However, according to author Chris St. Hilaire, there are four kinds of folk in this world who have this ability more than others and from whom the rest can learn the art of persuasion: politicians, marketers, lawyers and reporters. For example, according to the writer, politicians can elicit trust through a touch of the arm, marketers sell by reinforcing people’s beliefs, reporters use awkward silences to get people to talk and lawyers will know what the answer is before they have even asked the question. All methods each use to get what they want. These are just four techniques anyone can use to help them achieve their goals, which no matter what we do or hope to do, usually involves talking others into helping us, buying something from us, giving us something, or even getting out of our way. By studying the practices to this effect of not only many of the above mentioned four horsemen of coercion, but others such as company chief executives, the author observed a number of common
traits, which he then distilled into 27 pieces of advice in this book, subtitled ‘Simple Strategies to Seduce Audiences and Win Allies’. These include outlining goals and focusing on them, evaluating the egos of those whom you are setting out to charm. For example, learn to recognise if a person feels threatened by your presence or become able to read other emotions in your audience. Emotion also surfaces in a later chapter, when St. Hilaire discusses using emotive language to get your way – something any salesperson can tell you works a charm. Another classic practice used by politicians, particularly when trying to point out why a concept is wrong, at least from their perspective, is summed up in the title of the chapter ‘Challenge bad ideas by challenging the details’. In other words, focus on the flaws (in what might generally be a good idea, you oppose for whatever reason suits your agenda) and keep the argument centred around that. If reading this review you get the feeling there is something a little unsavoury about this whole concept, you would be correct. It is a feeling that grows more while reading 27 Powers of Persuasion, that you are being led into the secret tricks of a career confidence man who specialises in taking candy from babies. Perhaps if nothing else then, reading this book might be worth it if helps you spot a conman before he convinces you to do something you later regret. Available at Virgin Megastores in Doha.
Read it:
Becoming Steve Jobs
Most people will never have a book written about them, unless their vanity is so great, they do it themselves. Which, celebrity autobiographies aside (most of which are ghostwritten anyway), kind of does not count if nobody knows who you are. But whether you have passed from this mortal coil or not, to have even a single biography written about oneself by another author, especially a widely respected writer, is a big deal. More than one book about you? Legend. Become the subject of at least half a dozen – if not more depending on your definition of biography – and you are a bona fide superstar. Such as the erstwhile founder of the world’s richest company, Apple Inc. And so to Steve Jobs, eccentric son of a Syrian immigrant who rose through the metaphoric snake pit of Silicon Valley to become probably the most famous and infamous technology company founder and chief of all time, a business luminary for the ages, of whom reams have been written about since he first arose to prominence with his simple home computer, and will be written henceforth ad infinitum to be sure. Of course, ostensibly, the most famous biography of Jobs and one that bears immediate comparison was Time editor Walter Isaacson’s Steve Jobs, published in 2011, which we reviewed in The Edge at the time. But where Isaacson’s depiction of Jobs, though thorough and thoroughly engrossing, was mostly of a borderline psychopathic megalomaniac, who came across as explicitly unlikeable, the authors of Becoming Steve Jobs have taken a different tack.
Comparisons to the two books were probably inevitable, something the authors of the latter seem to have taken into account, both with the naming of their book and the choice of cover image. Instead of an older, almost arrogantly confident Jobs peering out, they have chosen to tightly crop an image of a pensive looking young Jobs in a plaid shirt. The allusion, direct through the title and hinted at in the image, that this is a book that concentrates more on Jobs’ formative years rather than the egocentric master of mind and matter he became. Of course, this is no puff project, the total jerk is still there but it is a far more sympathetic offering, related in the first person of author, Brent Schlender (the book is co-authored by fellow Fortune journalist Rick Tetzeli), who knew Jobs very well, rather than the detached perspective of Isaacson, purportedly a Jobs outsider. Containing previously unpublished interviews, Becoming Steve Jobs contains more technical detail than Steve Jobs and by all accounts is a more objective, realistic overview of the technology world’s ultimate alpha male. Available at Virgin Megastores in Doha.
66 | The Edge
products & reviews
SEIKO watch
App Reviews
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Epson projector Epson has announced three new full HD home cinema projectors that bring the big screen viewing experience into your home. The EHTW5350, EH-TW5300 and EH-TW5210 are each capable of delivering, bright sharp and clear full HD 1080p images, in both 2D and 3D. In fact, with these projectors, you can watch a movie every day on the big screen for the next 11 years without changing the lamp. Aimed at people who want a truly big-screen experience at home to watch films, this projector delivers Full HD entertainment at up to 332 inches.
Samsung VR
Virtual reality (VR) was among the top trends identified at CES 2016 in Las Vegas earlier this year and now available through the Samsung Gear VR, compatible with Galaxy Note5, S6 edge+, S6, and S6 edge smartphones, VR technology is reaching a wider base of consumers. With its 96-degree wide field of view on a Super AMOLED display, precise head-tracking and low latency, the Gear VR is bringing reality to the virtual world.
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SKRWT (Android, iOS)
When it comes to finetuning your images – such as adjusting the angles or correcting lens distortions – few apps can match the power of SKRWT. This paid app’s (costs a little less than QAR4) features include correction of lens distortion, vignette correction, auto-cropping, adjustable grid and custom compositions. The app also promises a non-destruction workflow, so your original images are always safe.
Wildcard (Android, iOS) RSS newsreaders tend to overload your feed with hundreds of stories a day, haphazardly arranged and with no easy way to get the complete picture on a certain topic. This is where Wildcard comes in. This free app for Android and iOS promises to deliver curated news right to your phone screen. The Wildcard editors collect related news from multiple reputable sources in one place for you to see, thus ensuring that all angles to a particular story are covered. The app puts these stories on what it calls cards, grouping them together by relevance.
Adobe Voice (iOS) This free Adobe app promises to make video presentations such as explainer videos easy to create. Previously available exclusively for the iPad, the new version is now available for the iPhone too. To help you get going, the app lets you choose from multiple narration templates. You can add icons, pictures from the web, your own pictures, background music and voiceovers to make professional-looking videos in minutes. The app also offers multiple ways to share your videos once you are done preparing them.
The Edge | 67
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