The Edge March Issue 2016 by Firefly Communications

contents

March 2016

Read more of the edge at www.theedge.me

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44 “Even the International Monetary Fund has recently advised states to exploit this valuable opportunity to rerationalise the expenditure and make some economic reforms in some sectors.”– Head of business news Hatem Ghandir, Al Jazeera Arabic TV. In an exclusive interview, Hatem Ghandir, head of business news, Al Jazeera Arabic TV and engineer in petroleum economics, offers an alternative view on the causes of the current low oil price, and its effect on regional and global markets.

cover story

features

Is consumer spending on the wane in Qatar? 40

As many world sports suffer from one scandal – THE POLITICS OF match-fixing or bribery – to the next, athletes, officials and tournament PLUS: hosts are counting the rising cost of ARABIA’S MARITIME THREATS cheating and corruption. Unexpected stakeholders – event sponsors – are now emerging to restore tattered reputations, but is it already too late in the game? asks Mark van Dijk.

Finance and Markets 23

Vol. 8 No. 3

- QATAR’S BUSINESS MAGAZINE - Vol. 8 No. 3 - Issue 77 - March 2016

Recently, the Organisation for Economic Cooperation and Development issued 15 final reports recommending actions to address different aspects of base erosion and profit shifting (BEPS). Kevin McManus and Paul Cooper of EY discuss the ways in which BEPS is likely to impact Qatar.

GREED

Is corruption ruining the image of global sports?

Economic zones to boost Qatar economy

Doha’s response to global tax trends

100% Qatari

Dealing with mobile hacking

Oil and gas industry security consultant Peter McKinley explores the ebb and flow of the threats to shipping and offshore installations.

sectors

Business Interview: Hatem Ghandir, head of business news, Al Jazeera, talks oil and geopolitics

- March 2016

Feature Story: Maritime safety: What are the potential threats? 48

Tawar Mall to open in Q4 2016

Analysing the safety of the region’s waterways

Connect with us online www.gingercamelmedianetwork.com/edge facebook.com/theedgeqatar twitter.com/TheEdgeQatar linkedin.com/company/ the-edge-magazine-qatar

While organised retail has the advantage of sales gimmicks such as promotional offers, smaller neighbourhood shops and outlets are witnessing volumes drop along with high rents. (Image Flickr/ Francisco Anzola)

As hydrocarbon prices have slumped to historic lows, Qatar, a primarily energy-driven economy, faces dwindling revenues and its first deficit budget in 15 years. The Edge's Aparajita Mukherjee unravels if these global macroeconomic realities have had an impact on the volume of consumer spending in the country.

Qatar has implemented Foreign Account Tax Compliance Act and has committed to implementing the OECD’s Common Reporting System for financial institutions. (Image Arabian Eye/ Corbis)

The Edge | 5

contents

Avis verticle half page.pdf

2/4/16

3:32 PM

AVIS

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

Energy & Sustainability 25 “To achieve consistently high levels of productivity, it is important that we extend maintenance intervals through proven technology,” said Qafco CEO, Khalifa A. Al Sowaidi.

A recent report by the Association of Chartered Certified Accountants outlines the three key factors that energy sector C-level executives need to monitor in order to achieve success in the most volatile era in oil and gas history, writes The Edge’s global energy editor Simon Watkins.

Real Estate & Construction 27

As Qatar is looking to diversify from its energy-based economy, the government has cleared a draft law, which will allow any type of company to be set up by a legal professional from Qatar or outside, without requiring to adhere to prevailing company laws applicable elsewhere, writes Syed Ameen Kader.

Tech & Communications 29

The finance sector in Qatar has a data security problem, but it goes beyond external threats from hackers. Jacob Chacko from Aruba explains what this threat is and how businesses can combat it.

Business Insight 53

The Edge managing editor Miles Masterson talks automotive sector with Markus Leithe, managing director, Middle East Commercial Operations of GMC. Pedro Ribeiro, general manager, Tawar Mall speaks about what the new mall will offer to the retail landscape in Qatar, reasons behind the delay in opening, and their plans for the first quarter after they open.

‘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

“You have a lot of automotive enthusiasts here that go all out to possess the best product in the market,” Markus Leithe, managing director, Middle East Commercial Operations of GMC, tells The Edge.

regulars

Call Us@4466 7744 6 | The Edge

From the Editor 8 Photo of the Month Business News 12 Qatar Perspectives Products 61

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editor’s letter The Edge’s most recent online survey – which focused on consumer spending – revealed some interesting information. But before we get into that, first a caveat. And that is, of course, that this data is hardly definitive. The Edge magazine is not a professional polling nor survey organisation, and we do not present these following figures as some sort of absolute statistical statement. No, what we present here is at best a narrow perspective of the zeitgeist in Qatar when it comes to money matters, based on the responses of a few hundred of our readers. Are people here feeling the trifecta of the low oil price, decreased government spending, and a general economic slowdown globally? This was the question that triggered our survey – and so without much further ado, let us look at the outcome. Beginning with overall age demographics, these matched those of Qatar, with the largest group being millennials in the 26- to 35-yearold age cohort at 58.2 percent, followed by the Gen-X group from 36 to 45, at 25.2 percent. Eighteen to 25-year-olds were next at 14.2 percent, followed by the 46 to 55 age group and finally by those over 55. 64.3 percent were male and 35.7 female, which is higher than the 3:1 ratio in the country, skewed as it is by the high proportion of male migrant workers in Qatar. Slightly more than one third of our survey respondents earn less than QAR10,000 per month, with those earning between QAR10,000, QAR15,000, QAR20,000, QAR30,000 and QAR50,000 spread equally at around 14 percent for each cohort. About 10 percent of respondents said they earn more than QAR50,000. One of the clearest indicators that people in Qatar are feeling economic pressure came in our first question, ‘Do you feel you have more or less disposable income?’. More than half – 58.6 percent – answered that they felt their ability to spend with discretion had been reduced. Those who felt that they had more money to spend and felt no change split the remainder.

Interestingly, slightly less than the above majority, 56.4 percent, indicated that they felt more caution in their spending, restricting purchases only to goods and services they felt they really needed, while 10 percent (perhaps many of the same folk in the highest earning bracket, one imagines), said they do not exercise any caution when spending. Thirty-four percent of The Edge readers described themselves as ‘mostly cautious’ but admitted to splurging occasionally, as is their wont. More tellingly perhaps, 54 percent of those surveyed said they had repatriated less money home of late, with 21 percent saying they had sent more home and 25 percent reporting no change in their remittances. The two sets of data immediately above could lead one to believe that it is becoming more costly to live in Qatar, and people are earning or saving less. Whatever the truth, more than half of the population, at least as represented by our survey, are spending less and sending less money home. Again not definitive, but certainly noteworthy. When pressed as to what was the cause of their current economic uncertainty, more than two thirds of respondents cited high accommodation/rental costs in Qatar as the number one factor contributing to their reduced personal liquidity. High inflation and redundancies also factored here, with 32.5 and 35.7 percent respectively attributing these to their depressed financial situation. Interestingly, only 25.2 percent attributed any contribution to the relevant status quo to the low oil price. But perhaps most tellingly, more than 70 percent of participants indicated they plan to spend less money in 2016 than they did in 2015. This economic uncertainty is a topic our senior business editor examines in more detail in our feature story on page 40, deducing, at least in part that while it is hoped we are not on the verge of another economic meltdown, consumer spending is down and fiscal responsibility must be the present focus of all in Qatar, whether it is by individuals, companies or government. The time for reckless and lavish spending is long gone for most save perhaps the incredibly wealthy, it seems.

According to our recent survey, more than half of the population in Qatar is spending Miles Masterson less and sending less money home. Managing Editor 8 | The Edge

Al Khaliji VHP.pdf

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The Edge is printed monthly ÂŠ 2016 Firefly Communications. All material strictly copyright and all rights reserved. Reproduction in whole or in part, without the prior written permission of Firefly Communications, is strictly forbidden. All content is believed to be factual at the time of publication. Views expressed by contributors are their own derived opinions and not necessarily endorsed by The Edge or Firefly Communications. No responsibility or liability is accepted by the editorial staff or the publishers for any loss occasioned to any individual or company, legal or physical, acting or refraining from action as a result of any statement, fact, figure, expression of opinion or belief contained in The Edge. The publisher (Firefly Communications) does not officially endorse any advertising or advertorial content for third party products. Photography/image credits and copyright, where not specifically stated, are that of Shutterstock and/or iStock Photo or Firefly Communications.

The Edge | 9

10 | The Edge

Virtually real

photo of the month

Visitors try the new Oculus VR virtual device at the Samsung stand during the Mobile World Congress in Barcelona, Spain in late February. The annual event is the worldâ&#x20AC;&#x2122;s largest mobile fair, which brings together the leading mobile companies. It is where the latest developments in the sector are presented, none bigger than the latest trend in mobile technology: virtual reality. (Image Jordi Boixareu, Arabian Eye/Corbis) The Edge | 11

news

business news

Qatari cabinet reshuffled

main story

In what has been widely viewed as an exercise in consolidation, HH the Emir Sheikh Tamim bin Hamad Al Thani reshuffled the Qatari Cabinet in January. Analysts feel that following falling energy prices, this, being the first such exercise since the Emir took office in June 2013, is an attempt to bring structural rationalisation in the government.

Former Foreign Minister Dr. Khalid bin Mohamed Al Attiyah is new Minister of State for Defence Affairs, as well as a member of the Council of Ministers.

The reshuffle has resulted in an 18 ministry-cabinet in total. The decree merged several ministries, including Communication and Transport and Culture, Youth and Sports, heralding the possibility of many job cuts. There have been some notable changes such as the replacement of Foreign Minister Dr. Khalid Al Attiyah with Sheikh Mohammed bin Abdulrahman Al Thani who has been promoted from Assistant Foreign Minister for International Cooperation Affairs. Al Attiyah is the new State Minister for Defence Affairs while HH the Emir Sheikh Tamim bin Hamad Al Thani also holds the post of Defence Minister. The outgoing Minister of State for Defence Affairs, Hamad Bin Ali Al Attiyah, was appointed as an adviser to HH the Emir for defence affairs, with rank equivalent to the prime minister, state media agency QNA revealed. The new cabinet also has a female minister, Dr. Hanan Al Kuwari who was the managing director 12 | The Edge

of Hamad Medical Corporation. She has replaced Abdullah bin Khalid Al Qahtani as Minister for Public Health. The titles of several of the members of the new cabinet suggest changes too. Below is the full list of new appointments, according to QNA: • Sheikh Mohammed bin Abdulrahman Al Thani, Minister of Foreign Affairs; • Khalid bin Mohamed Al Attiyah, Minister of State for Defence Affairs, as well as a member of the Council of Ministers; • Salah bin Ghanem Al Ali, Minister of Culture and Sports; • Issa bin Saad Al Naimi Juffali, Minister for Administrative Development and Labour and Social Affairs; • Jassim bin Saif Al Sulaiti, Minister of Transport and Communications; • Mohammed bin Abdullah Al Rumaihi, Minister of Municipality and the Environment; and • Hanan Al Kuwari, Minister of Public Health. HH The Emir Sheikh Tamim has said that Qatar needed to diversify its income and he urged an end to corruption. He said citizens should not “fear or panic” about the tumbling price of hydrocarbons. “As citizens your responsibilities are greater due to the low oil prices; however, citizens’ welfare and way of life should not be affected by the situation,” he said in a speech carried by QNA. Analysts commenting on the shakeup have attributed it as an effort to deal with falling hydrocarbon prices which is prompting Qatar and its neighbours to reassess their spending plans to contain

news

business quotes The appointments also show that HH the “All oil exporters will have Emir Sheikh Tamim bin to adjust by Hamad Al Thani is putting reducing his stamp on government spending and bringing in a new, and younger generation of increasing ministers. revenue.” budget deficits. The Edge reported in its January 2016 edition that Qatar’s 2016 budget is set to post a deficit of QAR46.5 billion. The Wall Street Journal has quoted Ibrahim Fraihat, a senior foreign policy fellow at the Brookings Institution in Qatar, as saying that the consolidation could reflect an adjustment to declines in energy prices and a longer-term push to trim bureaucracy. “I think there is a tendency to cut costs and be more efficient in the government reshuffle,” he said. The appointments also show that HH The Emir, Sheikh Tamim bin Hamad Al Thani is putting his stamp on government and bringing in a new, younger generation of ministers, Fraihat added.

Revised LIST of QATAR Ministries Ministry of Foreign Affairs (MOFA) Ministry of Energy and Industry (MEI) Ministry of Interior (MOI) Ministry of Awqaf and Islamic Affairs (MAIA) Ministry of Finance (MOF) Ministry of Justice (MOJ) Ministry of Education and Higher Education Ministry of Municipality and Urban Planning (MMUP) Ministry of Public Health (MPH) Ministry of Cultures, Arts and Heritage (MOC) Ministry of Business and Trade (MBT) Ministry of Environment (MOE) Ministry of Labour and Social Affairs (MLSA) Ministry of Youth and Sport (MYS) Ministry of Administrative Development (MAD) Ministry of Communication and Information Technology (MCIT) Ministry of Statistics and Developmental Planning (MSDP) Ministry of Transport (MOT)

So opined International Monetary Fund (IMF) managing director Christine Lagarde at the recent Arab Fiscal Forum in Abu Dhabi. Lagarde was voicing her support for the imminent inclusion of value added tax (VAT) to Gulf Cooperation Council (GCC) countries. “Oil prices have fallen by two-thirds from their most recent peak but supply- and demand-side factors suggest they are likely to stay low for an extended period,” said the IMF head, adding that the net loss to the economies of the GCC from weakened oil revenues in 2015 was over USD340 billion (QAR1.2 trillion). “Add to this greater emphasis on corporate income taxes as well as property and excise taxes. And continue to invest in building tax administration capacity that could eventually allow for introduction of personal income taxes,” Lagarde also advised.

“We will restore the image of FIFA and the respect of FIFA.” So iterated Gianni Infantino, the new FIFA president after winning the second and final round of an election held at the organisation’s headquarters in Zurich, Switzerland late February in order to replace the ousted incumbent Sepp Blatter. Forty-five year old Infantino is the Union of European Football Associations (UEFA) general secretary, who was a somewhat reluctant candidate and admits had not considered running for the position until recently. “FIFA has gone through sad times, moments of crisis, but those times are over,” he added. “We need to implement the reform and implement good governance and transparency. We also need to have respect…we’re going to win back this respect through hard work, commitment and we’re going to make sure we can finally focus on this wonderful game that is football.”

The Edge | 13

news

business in brief

QSTP supports entrepreneurship forum in Doha

Hamad Al Kuwari, managing director, QSTP, said entrepreneurship plays a major role in shaping and developing a knowledge-based economy.

Qatar Science & Technology Park (QSTP) has extended its support for the third edition of the Entrepreneurship in Economic Development Forum, to be held on March 7, in Doha. Organised by Qatar University, in collaboration with the Interactive Business Network (IBN), the two-day forum aims to foster young entrepreneurs take advantage of business opportunities in the future. Hamad Al Kuwari, managing director, QSTP, said, “Entrepreneurship plays a major role in shaping and developing a knowledgebased economy, which aligns with our priorities at QSTP to transform Qatar into a regional hub for technology innovation by constantly growing and strengthening our support for talented entrepreneurs.” Participants will discuss the prevailing entrepreneurial culture in Qatar and the wider Gulf region, proposing a specific plan of action to instil a culture of entrepreneurship in the various participating institutions.

QPAY partners with MasterCard to offer wage solutions for labourers QPAY, a Qatar-based electronic payment solutions provider, has partnered with MasterCard to introduce the first wage protection system (WPS) salary card platform which complies with the Qatar Central Bank (QCB) WPS payment regulations. Designed to help corporate clients comply with the latest labour payment laws by the QCB and the Qatar Ministry of Labour & Social Services (QMLSS), the system is user friendly, secure, turnkey, and provides immigrant labourers a Qatari IBAN bank account. 14 | The Edge

Strongest air travel demand recorded in 2015 The global passenger traffic demand (revenue passenger kilometres or RPKs) for the full year in 2015 rose 6.5 percent compared to 2014, according to latest traffic results by International Air Transport Association (IATA). This was the strongest result since the post-global financial crisis rebound in 2010 and well above the 10-year average annual growth rate of 5.5 percent. Middle East carriers had the strongest annual traffic growth at 10.5 percent. As a result, the report mentioned, the share of international traffic carried by Middle East airlines reached 14.2 percent, surpassing their North American counterparts (13.4 percent). Capacity growth of 13.2 percent exceeded the demand gains, pushing down load factor 1.7 points to 76.4 percent.

CMU-Q launches first SmartLab in the region

John O’Brien, associate dean of CMU-Q (left) during the launch of Q-SmartLab.

Carnegie Mellon University in Qatar (CMU-Q) recently launched the Qatar Security Market Analytics Research and Teaching Laboratory (Q-SmartLab). Q-SmartLab contains a large interactive visual dashboard that aggregates realtime information from the global financial markets. The lab allows users to sort information and analyse trends in financial markets on both a macro and micro scale. “The concept behind Q-SmartLab evolved from a research project on conventional and Islamic financial institutions in Doha and the Gulf state region. We realised that we were sitting on massive amounts of data, and we needed some sort of mechanism to deliver it to the students and faculty using a formal platform,” said John O’Brien, associate dean of CMU-Q.

Non-oil sector to drive 3.8 percent GDP growth in MENA

Shailesh Dash, founder and CEO of Al Masah Capital, expects Qatar’s GDP to rise 4.9 percent in 2016.

Non-oil sector revenues are expected to drive 3.8 percent gross domestic product (GDP) growth in the Middle East and North Africa (MENA) region in 2016, stated Al Masah Capital report, titled MENA Yearbook – 2016. In contrast, the report found that the global economic growth prospects are somewhat modest with the World Bank, International Monetary Fund and the Organization for Economic Cooperation and Development lowering their forecasts to 2.4 percent, 3.1 percent and 2.9 percent respectively. Shailesh Dash, founder and CEO of Al Masah Capital, stated in the report that Qatar is likely to have registered a GDP growth of 4.7 percent in 2015, which is expected to rise to 4.9 percent in 2016.

Private cloud enables organisations to innovate faster

New research from Oracle reveals that 89 percent of enterprises in the Middle East believe that private cloud enables them to innovate faster. The study comprising 458 companies in the Middle East, Europe and South Africa, conducted by IDG Connect on behalf of Oracle, found that half (51 percent) of businesses will have reached cloud maturity within two years. Respondents identified the most important building blocks for successful hybrid cloud deployments as winning the support of key business decision-makers (36 percent), building a strong relationship with a suppliers (30 percent) and cost efficiency (15 percent). The largest barriers to hybrid cloud adoption are managing multiple IT architectures (60 percent), scalability (60 percent) and network bandwidth (58).––

news

events

Business events calendar March - May 2016 11-12 April Arab Future Cities Summit 2016

18-19 April Smart Parking Qatar

Abdulla Abdulaziz Al Subaie, MD, Qatar Railways Company, was one of the speakers at the last year’s event. (Image Expotrade)

The first annual conference dedicated to the design, development and management of Qatar’s parking facilities will be held on April 18 to 19 in Doha. With congestion and parking being a major challenge for Qatar, the event presents opportunities for the parking industry to provide solutions for existing infrastructure and for future developments. Smart Parking Qatar will incorporate case studies and quality speakers from the relevant government agencies and other stakeholders from Qatar as well as from across the region and abroad to discuss the wide variety of ongoing and upcoming projects in Qatar to further develop the country’s parking facilities.

Qatar’s smart cities event, Arab Future Cities Summit 2016, in its fifth year now, will take place at The Ritz-Carlton, Doha. The two-day summit will broadly reflect on new developments arising in Qatar. Delivered through a combination of individual and joint presentations, panel discussions and Q&A sessions focusing on projects in Qatar, across the Gulf Cooperation Council and international case studies, Arab Future Cities Summit Qatar 2016, will focus on making smart cities a reality. This edition of the summit will bring together technologists, developers, urban planners and researchers, investors, engineers, policy professionals and the local government to share valuable ideas through informative and interactive discussions.

Events Listing March

7-8 March

3rd Entrepreneurship in Economic Development Forum

12-13 March Art for Tomorrow

15-16 March Qatar Projects

23-26 March Qatar Covertech

28 -30 March

Health Facilities Design and Development Conference New technologies and advanced design strategies can help maximise the development, management and optimisation of car parking facilities in Qatar.

29-31 March DIMDEX 2016

April

13-16 April 26-28 April Cityscape Qatar

Back for its fifth edition on April 26 to 28, Cityscape Qatar this year will take place at Doha Exhibition and Convention Center. It will bring together investors, developers, homebuyers, government officials and real estate professionals. With a large participation from some of the leading local and regional companies, Cityscape Qatar is expected to provide a unique opportunity to access the Qatari and regional real estate and investment community all under one roof. The Cityscape Qatar Market Overview, a seminar organised in association with DTZ, will also run concurrently to facilitate the exchange of data and opinion as they relate to the Qatar property market. Cityscape conferences deliver a high-profile platform The three-day real estate development and investment event will be held at Doha Exhibition for networking and information exchange. and Convention Center. 16 | The Edge

Qatar Pool & Spa

13-16 April

International Exhibition for Cooling, Heating, Refrigeration, Ventilation and Insulation Systems

14-18 April

Office World Exhibition (OWE)

May

9-10 May

LightingTech Qatar

9-12 May

Project Qatar

24-26 May Trans4 Qatar

qatar perspectives

Native advertising in Qatar: Now is the time to start

Suha Mardelli Haroun is ad sales director at Bayt.com. In the past decade, thanks to increased connectivity through smartphones and more accessible data plans, the Internet has become an indispensable and ubiquitous part of our modern-day life. Digital advertising spend is already big, and becoming larger. In 2015, it reached USD560 million (QAR2 billion), of which USD400 million (QAR1.5 billion) comes from the Gulf Cooperation Council (GCC) and is increasing at 37 percent per year to reach an astounding USD1 billion (QAR364 billion) in 2017. Search accounted for 44 percent of digital spend, while display accounted for 33 percent, including native advertising. Native advertising is a type of tactic in which advertisements are meant to mimic editorial content. This kind of advertising content not only attracts the consumer’s attention, but also offers something genuinely interesting or entertaining, and enhances user engagement with the advertisement. Increasingly, advertisers are resorting to native advertising to generate awareness and branding. The appeal of native is that it can – and should – be a fun part of the user experience. There are five key criteria for a display advertisement format to be termed as native: 1. Integrated: The advertising content is embedded within existing content, and it mimics the look and feel of the site being advertised on. 2. Non-intrusive: The advertisement is respectful of existing site user experience, and it stays within the same journey that the user was on the site for in the first place. 3. Transparent: The advertisement is 18 | The Edge

The Internet continues to be one of the key drivers of economic development in Qatar and in the Middle East, transforming and redefining commercial transactions and influencing societal dynamics. Naturally, with so many people in Qatar and in the Middle East spending increasingly long hours consuming information on the Internet, new advertising methods and other integrated forms of communication are becoming ever more important as well, writes Suha Mardelli Haroun.

clearly identified as sponsored content. Affinity: Advertising messages are in the relevant context of the page environment and user experience. Story-driven: The advertisement is aimed at enticing organic or native/ natural interest from the user.

How to use native advertising? The top three ways brands can make use of native advertising in Qatar to reach more audiences are: Feed-based native advertising: A big chunk of social media websites such as Facebook and Instagram let their clients serve feed-based advertisements to potential customers. Sometimes, this is a product developed to make online content readily available to users who want to pursue their education or learn new skills. It represents a great way for advertisers in the Qatari education industry to advertise their courses, and has been used extensively by Bayt.com. Promoted content: These usually are ordinary content on websites and social media channels that are purchased by advertisers who want to reach a wider group of users or to spark engagement from their existing followers. To engage a wider audience, brands should spend time in creating useful, interesting and naturallyshareable content that is related to their brand in the form of infographics, videos, blog posts. For instance, the Bayt.com specialties content platform attempts to do that by offering B2B advertisers the choice to target their selected audiences on the

platform. Advertisers sponsor communities of professionals who engage the users by posting questions and sharing articles. Recommended products: This is an easy way for brands to advertise products and services at the right time to the right customer. For example, if a brand is selling make-up, what better way to promote it than in a ‘Related Products’ widget on the same page as other make-up? A person already on that page is likely to be interested and looking, after all.

Native advertising is a type of a tactic in which advertisements are meant to mimic editorial content.

See what measures up.

Join CNNâ&#x20AC;&#x2122;s John Defterios as he visits some of the worldâ&#x20AC;&#x2122;s most dynamic cities for an insight into the fast-paced world of real estate development.

Tune in on Tuesdays during Connect The World on CNN.

in association with

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finance & markets

Qatar has implemented Foreign Account Tax Compliance Act (FATCA) and has committed to implementing the OECD’s Common Reporting System (CRS) for financial institutions. (Image Arabian Eye/Corbis)

Qatar: Responding to global tax trends

Governments have long been concerned with the shifting of profits into low-tax jurisdictions and corresponding reduction in tax in higher-tax jurisdiction. Recently, the Organisation for Economic Cooperation and Development (OECD), supported by the G20, issued 15 final reports recommending actions to address different aspects of base erosion and profit shifting (BEPS). Kevin McManus and Paul Cooper discuss the ways in which BEPS is likely to impact Qatar.

EPS will lead to significant changes in domestic tax laws, international tax agreements, extra-territorial provisions and greater bilateral and multilateral cooperation. Some recommendations will have immediate impact. Others will depend on how individual countries interpret and implement the recommendations. This is one of the weaknesses of BEPS. The OECD has no control over what individual countries do with the recommendations, even for its members. It will be some time

before the post-BEPS tax landscape is clear. BEPS challenges Qatar’s tax policy in two ways. Because of its low tax, Qatar may face tax leakage as investors respond to pressures to report more profits in their home countries. Qatar also faces fiscal challenges, so may look to tighten its own rules. Here is a brief look at some factors that may influence Qatar.

Is Qatar a tax haven?

A new draft law in Kuwait may treat Qatar

as a tax haven, because Qatar offers some investors tax rates that are less than 10 percent. If implemented, payments to Qatar may become non-deductible for tax purposes in Kuwait, while dividends and capital gains from Qatar may become taxable in Kuwait.

Exchange of information

Qatar has implemented Foreign Account Tax Compliance Act (FATCA) and has committed to implementing the OECD’s Common Reporting System (CRS) for The Edge | 23

sectors | finance & markets

financial institutions. Country by country (CbC) reporting is the next important item. Qatar would need to amend its law and enter into a multilateral agreement to exchange CbC reports. However, state tax law may already allow the Public Revenues and Taxes Department (PRTD) to request a multinational’s CbC report from its Qatar member. If a report is not provided, the PRTD may estimate the tax due.

Changes to tax treaties

Tax treaties operate on a bilateral basis. They offer access to lower tax rates, which encourages treaty shopping. They also establish the permanent establishment as the threshold before business profits are taxable at source, but this now allows a significant amount of business to be conducted without taxation in the electronic age. These and other issues are flagged in BEPS, but unilateral mechanisms to address the concerns will be cumbersome. Instead a multilateral instrument is contemplated, which could overnight change the permanent establishment rules or deny access to relief from double taxation. Qatar is one of more than 90 countries currently involved in preparing the multilateral instrument.

Countries cannot develop tax policy in isolation, and must be responsive to global trends and competitive threats to their tax base. Investors also need to watch developments closely.

10%

The assumed level of taxes on the basis of which European companies entered into long-term contracts in Qatar.

Kevin McManus is tax director and Paul Cooper is senior tax manager with EY Qatar.

Transfer pricing

Several BEPS recommendations will be embodied in the OECD transfer pricing guidelines. Qatar tax law refers to the OECD guidelines for both documenting transfer pricing and determining the arm’s length price. Changes are likely for hardto-value intangibles, low value-adding services, cost contribution agreements, as well as greater focus on aligning profit with the location where the real economic activity and control sits, rather than where it is contractually stated to be.

‘Switch over’ rule

In January 2016, the European Union (EU) issued its anti-avoidance package targeting BEPS. This included a ‘switchover’ rule, which could deny a tax exemption on dividends or branch profits remitted back to the EU. If implemented in its current form, this would impact particularly on French, German, Italian and Spanish multinationals operating in Qatar, such as those involved in longterm contracts who tendered based on 24 | The Edge

the assumption of a 10 percent Qatar tax rate and a full or partial tax exemption on dividends or branch profits ultimately paid to head office. Countries cannot develop tax policy in isolation, and must be responsive to global trends and competitive threats to their tax base. Investors also need to watch developments closely. In particular, the consequences of potential tax fallout relating to Qatar activities may not be in Qatar. Investors need increasingly to have a global tax focus.

Loan-to-deposit ratios for Qatari banks Total loan-to-deposit ratio (left scale)

Loan growth (right scale)

Deposit growth (right scale)

% 125

% 30

120

115

110

105

100

95 Dec-09 Dec-10

Dec-11

Source: Standard & Poor’s

Dec-12

Dec-13 Dec-14 Dec-15

energy & sustainability Workers carry out maintenance at an oil well in Kyzylorda region, southern Kazakhstan. In January, the oil price crash slashed Kazakhstan’s total exports by more than 40 percent and the Kazakh tenge has lost half of its value against the dollar since last August when the authorities abandoned their pegged exchange rate policy. (Image Arabian Eye/Reuters)

New report highlights how to deal with low hydrocarbons prices Published in the United Kingdom (UK) recently, Low Price, High Expectations, an Association of Chartered Certified Accountants (ACCA) report, outlines the three key factors that energy sector C-suite executives need to monitor in order to achieve success in the most volatile and competitive era in oil and gas history, writes The Edge’s global energy editor Simon Watkins.

hese measures are good management of growth, costs, and funding, Faye Chua, head of business insights for ACCA, in London, told The Edge. Integrated oil companies – those incorporate elements of upstream, midstream, and downstream activities – will find that managing growth opportunities is easier than for smaller exploration and production (E&P) specialists, as they are more diversified and therefore better able to withstand low hydrocarbons prices, added Chua. “A low oil price may hit upstream sales to third parties, but it makes oil purchases cheaper for the refining division,” she said. Interestingly in this regard from the

perspective of Qatar, the liquefied natural gas (LNG) sector appears less vulnerable than others in the hydrocarbons industry because a significant part of this output was pre-sold at a relatively high price in deals struck before hydrocarbons prices collapsed. Indeed, according to industry specialist, Wood Mackenzie, the number of prospective multi-billion-dollar export projects in the LNG industry where a final investment decision (FID) was expected to be made in 2015 and 2016, has not reduced significantly. “Even if the gas has not all been pre-sold, a finance director may not feel that investing in such a project is a big risk, if he or she is

“A low oil price may hit upstream sales to third parties, but it makes oil purchases cheaper for the refining division.” – Faye Chua, ACCA. The Edge | 25

sectors | energy & sustainability

Qafco signs deal with GE Oil and Gas for gas turbine maintenance

Good management of growth, costs and funding are key for the survival of oil and gas related companies, Faye Chua, head of business insights for ACCA, in London, told The Edge.

convinced that gas prices will go up in a few years’ time, given that the project had always been accounted for as a long-term revenue earner,” continued Chua. Cost management, then, needs to focus on concentrating asset sales on areas of the business not central to long-term strategy as much as possible, as no upstream business boss wants to sell off prized assets or abandon projects that could restore the company’s fortunes when oil prices pick up. “There is an opportunity to re-negotiate discounts with contractors to manage service costs and ongoing expenditure,” read the ACCA report, “as there could be room here as many suppliers may prefer lower margins to idle machinery in the challenging times we are currently experiencing.” With the global hydrocarbon industry’s debt repayments set to increase to USD550 billion (QAR2 trillion) over the next five years – with USD72 billion (QAR262 billion) maturing this year, rising to USD129 billion (QAR470 billion) in 2017 – funding management is the final key to surviving the current choppy environment. John Mitchell, an associate research fellow at Chatham House, and a former BP executive, highlights two challenges in this context. “Raising funds from long-term bonds when interest rates are generally low is advantageous, but a low interest rate environment may not last, so the question is how much do you want to load up your company with debt?” he said. On the subject, ACCA also stated in its report: “Firms with promising acreage in a developing country would typically hope to draw in substantial investment – and expertise – from large partners, and another solution is likely to come from experienced private equity firms prepared to take on higher-risk investments with longer payback times.”

Crude oil price In dollars per barrel 150 120 -58%

90 60

Brent Crude Oil

30 0

2008 2009

2010 2011

Source: Thomson Reuters

26 | The Edge

2012

2013 2014

2015

“To achieve consistently high levels of productivity, it is important that we extend maintenance intervals through proven technology,” said Qafco CEO, Khalifa A. Al Sowaidi, of the partnership.

The Qatar Fertiliser Company (Qafco) has signed a 15-year technical development partnership agreement with US conglomerate GE Oil and Gas’ Downstream Technology Solutions (DTS) business as Qafco rolls out its advanced 32 K Extendor Combustion System designed to strengthen the operational efficiency of the Qatari firm’s gas turbines. GE Oil and Gas will supply the parts for the project under the deal that builds on an earlier long-term service contract signed between GE Oil and Gas DTS and Qafco to optimise the performance of its plant in Mesaieed last year. More specifically, GE Oil and Gas installed a base of six FR6 gas turbines, 31 centrifugal compressors, 16 steam turbines and 16 pumps across Qafco’s plants and the new turbines, the first of which will be installed in 2017, will help in scaling up the operational efficiency of Qafco’s plants. The modification, repair and field services, meanwhile, will be provided through Qatar-based technicians. In this latter regard, said Rami Qasem, president and CEO of GE Oil and Gas for the Middle East, North Africa and Turkey, in Doha, this comprehensive upgrading, repairing and maintenance programme, led by GE Oil and Gas DTS’ Qatar-based team, will support Qafco by significantly reducing the combustion component wear and tear of the turbines and increasing the downtime between maintenance. Qafco’s CEO, Khalifa A. Al Sowaidi, concluded: “To achieve consistently high levels of productivity, it is important that we extend maintenance intervals through proven technology. With the new solution that is being implemented at Qafco for the first time in the region, we also gain from the localised expertise and support that GE brings.”

real estate & construction

Adjacent to Hamad International Airport (HIA), Ras Bufontas Special Economic Zone is ideally located for companies looking for world-class infrastructure and international connectivity. (Image Manateq)

New economic zones laws to boost Qatari economy

anataq, which is currently developing three economic zones in Ras Bufontas, Al Karana, and Um Alhoul, has been granted a 50year concession during which it will be in charge of the management, development, operation, and maintenance of the zones. The new law means company owners setting up a business inside Qatarâ&#x20AC;&#x2122;s economic zones can now have 100 percent ownership, as well as enjoy freedom for the unrestricted transfer of capital, revenues or investments out of the country. In general, the draft law on economic zones in Qatar

highlights the growing importance of the sector within the Gulf Cooperation Council. Nick Witty, director, Real Estate, Deloitte & Touche, Middle East, told The Edge, â&#x20AC;&#x153;Finite natural resources coupled more recently with falling oil prices means diversification into non-hydrocarbon based industries/services as a way of attracting foreign direct investment (FDI) is becoming increasingly more relevant.â&#x20AC;? Besides driving economic change by encouraging foreign direct investment (FDI) and promoting international trade ties, Witty said, economic zones make running business

years

The concession period given to Economic Zones Company. The Edge | 27

sectors | real estate & construction

easier and increase gross domestic product (GDP) for a country. “Economic zones also promote wider trade development, which is likely to include the manufacturing sector. In the case of Qatar, manufacturing and technology businesses are to be the focus of enterprise zone one, located closest to Hamad International Airport (HIA),” he said.

Regional competition

Qatar has been a late mover into this space although the country already set up tax free zones – Qatar Financial Center and Qatar Science and Technology Park – to attract FDI within the industrial sector. But these new free zones will cater to all kinds of businesses – something that can give Qatar an advantage over other regional competitors such as the United Arab Emirates (UAE). Industry experts said that the availability of greater levels of accommodation along with free zone status would encourage greater investment within these sectors and create new employment opportunities, further aiding diversification from the oil and gas industry. Mark Proudley, director, DTZ Qatar, said, “Qatar logistics sector will benefit from better quality infrastructure and also availability of higher quality warehousing and ancillary spaces. These also aim to lower the costs of occupying this type of

Nicky Witty, director, Real Estate, Deloitte & Touche, MIddle East.

space if these schemes flood the market with space as anticipated.” However, he said, it will be tough for Qatar to compete with established locations such as Dubai, particularly in the logistics sector as the UAE has become a global hub for distribution throughout the region. Witty, on the other hand, said, “Economic zones across the region tend to cater only for commercial and trading

“The three proposed zones in Qatar will aim to attract a wider range of businesses including, hydrocarbon based industries, manufacturing, technology and transport potentially attracting greater occupational diversity.” – Nick Witty, director, Real Estate, Deloitte & Touche, Middle East. 28 | The Edge

enterprises whereas the three proposed zones in Qatar will aim to attract a wider range of businesses including, hydrocarbon based industries, manufacturing, technology and transport, potentially attracting greater occupational diversity.” Given that most zones across the region offer similar incentives in the form of 100 percent foreign ownership and repatriation of profits, and no income, import or export taxes, he said, “It may be that Qatar can further differentiate itself from its regional competitors by offering more competitive rental packages, low cost and efficient licensing procedures, removal of restrictions on hiring foreign employees.” It can also look at having an extensive range of on-site facilities such as retail, food and beverage outlets, banks, gyms, health centres and the provision of mortgage facilities for buildings developed on leased land. Qatar’s non-hydrocarbon, logistics sector is predominantly based in and around the old Industrial Area, located approximately 18 kilometres to the west of the HIA and the New Doha Port. “The location of the existing Industrial Area and its ageing infrastructure means it is not readily accessible from the airport and port and as such, it is likely that, over time, the new economic zones will compete directly in terms of attracting some of the existing businesses to relocate,” concluded Witty.

tech & communications

According to an Aruba Networks survey, an alarming four out of every 10 finance organisations (39 percent) admitted to have lost data through the misuse of a mobile device.

#GenMobile workforce:

Both an asset and a threat to business The finance sector in Qatar has a data security problem, but it goes beyond external threats from hackers. Jacob Chacko from Aruba explains what this threat is and how businesses can combat it.

eople working in the finance sector are in agreement: there is a major threat to the success of the banking and finance industry, one that ignores boom and bust cycles and does not care about stock market fluctuations or interest rates. But this threat is also an essential and highly successful ingredient in the revival of the finance industryâ&#x20AC;&#x2122;s fortunes. What is this unwitting, non-malicious threat? It is the mobile-tech carrying employees themselves, better described as #GenMobile. Everyone has heard of

Generation X, Generation Y, and Generation Z (the Internetâ&#x20AC;&#x2122;s digital natives), but the #GenMobile is a new category to add to that list. Brought up in a world where mobile devices are an integral part of everyday life, #GenMobile is defined by a productivityfocused attitude that finds it as easy to share a status update as it does a password or mobile device with a colleague. And this is why the #GenMobile workforce is both an asset and a threat to business. To identify the true nature of this new type of employee, Aruba Networks, a Hewlett

39%

of respondents from financial institutions admit to losing company data due to misuse of a mobile device. The Edge | 29

sectors | technology & communications

Packard Enterprise company, surveyed 11,500 workers in 23 countries, asking them detailed questions about their work, their approach to data and their take on corporate and personal security in a technological landscape dominated by mobile devices.

Who are they?

#GenMobile are generally young (18-35), highly effective and mostly indifferent to computer security. Given the finance sector’s risk-averse take on data security, businesses would be forgiven for dismissing the idea of a ‘threat’ from their own highly trained staff. But with an alarming four out of every 10 finance organisations (39 percent) in the survey admitting to having lost data through the misuse of a mobile device (25 percent higher than other industries), it is worth reading on. #GenMobile, as the name suggests, is 100 percent comfortable with mobility, flexible working and using multiple mobile devices to get the job done. They will stop at nothing to get their work tasks completed, and 51 percent say that mobile technologies enable them to be more productive and engaged at work. This fervent need to get things done means 56 percent will disobey their managers to complete a task – while threequarters are happy to take IT issues into their own hands without getting in touch with their IT department. Sharing is also a risk factor, as 60 percent of respondents reported being happy to let others use their work mobile devices at least once a month, while a fifth do not have passwords on their mobile devices at all, in part to make sharing easier. It is not surprising then that security only limps into the top five of office tech concerns for #GenMobile.

#GenMobile in Qatar

With smartphone penetration already reaching 75 percent in Qatar and its usage mostly concentrated within the 15 to 34 age group, it is clear that #GenMobile has entered the workplace here as well. There is no doubt that mobile broadband services are expected to become a hot growth area in the near future. The country’s mobile infrastructure is already seeing improvement with the launch of 4G services by Vodafone Qatar and Ooredoo in the last few years. The Aruba research study suggests a higher predisposition towards at-risk 30 | The Edge

#GenMobile, as the name suggests, are 100 percent comfortable with mobility, flexible working and using multiple mobile devices to get the job done.

Five ways to make sure your organisation is prepared for #GenMobile: Businesses should make sure there is a policy covering roles, devices, locations and other contextual attributes. Create enforcement rules that extend from applications to devices to the network. Make sure security measures and policies map back to the organisation’s business objectives. Training is vital: all staff should have needs-assessed training to help them understand why policies are in place and how they can help. Take heed of feedback – it may improve IT workflows and performance.

behaviour among workers in what may be described as economically emergent countries. The top five at-risk countries are Malaysia, Thailand, South Korea, China, and the United Arab Emirates. Qatar being a highly connected country with two-thirds of its population falling within the 15 to 44 age group, it is not at any lesser risk than those emergent countries. So what do enterprises in Qatar do? Lockdown all mobile devices? Implement a highly restrictive password policy? No; this new generation is already contributing to the overall health of the finance sector. They bring big-thinking creativity, better collaboration and new ways of doing things; priceless in an era when consumer behaviour is changing at an incredible speed. Yet the impact of a security breach is both seismic and often irreparable.

#GenMobile is the future of business – and that means every business. Old business models that fail to adapt to #GenMobile will slowly crumble and may ultimately not survive. Embracing #GenMobile’s penchant for openness, innovation, collaboration and some degree of risk is good – but only when an organisation can understand and plan for the security risks these behaviours bring with them.

Jacob Chacko is the Business Lead, SMB & Commercial, Middle East & Turkey at Aruba.

The Politics

of Greed

corruption in sports | cover story

Is corruption ruining the image of global sports? And if so, what can be done about it? As many world sports suffer from one scandal – match-fixing or bribery – to the next, athletes, officials and tournament hosts are counting the rising cost of cheating and corruption. Unexpected stakeholders – event sponsors - are now emerging to restore tattered reputations, but is it already too late in the game? asks Mark van Dijk.

hen the International Sports Press Association (AIPS) conference opened in Doha’s Sheraton Hotel last month, sport itself – the ins and outs of actually playing it, or other involvement in organisation sporting competitions – was not at the top of the agenda. Instead of discussing Leicester City’s unexpected English Premier League title bid or the upcoming ICC World Twenty20 cricket tournament, the AIPS delegates focused on a topic that has dominated recent headlines: corruption. “The economic activity of sport represents almost two percent of the global gross domestic product (GDP) and between EUR800 billion (QAR3.2 trillion) and EUR900 billion (QAR3.6 trillion),” said Massimiliano Montanari, chief of cabinet at Qatar-based anti-corruption watchdog group, the International Centre for Sport Security (ICSS) before pointing to the ‘numerous scandals’ that currently surround world sport, from tennis match fixing to the ongoing corruption scandal at world football’s governing body, FIFA. Had Montanari chosen to list all the current alleged shennanigans in world sports, his soliliquoy could have been epic. For example, during the course of the previous days, a young Belgian cyclist had been caught concealing a motor in the frame of her bike during the Cyclocross World Championships; a veteran South African cricket player had been banned for 20 years for match-fixing; and two Kenyan athletes had accused a senior official of asking them for a bribe to reduce their four-year doping bans. More recently the tennis world has been embroiled in headline-making matchfixing scandals and has launched an independent enquiry into what seems to

In this file photo, then-FIFA President Sepp Blatter is accompanied by South Africa’s Tokyo Sexwale Cape Town’s Green Point stadium on September 15, 2008. Sexwale, a FIFA board member and candidate to replace disgraced Blatter, has vowed to strip Qatar of its right to host the event in 2022, despite being a member of the organising committee of the 2010 World Cup, which has de facto admitted to using bribery to secure the hosting rights. (Image Arabian Eye/Reuters)

be systemic corruption in that sport. Qatar, the host nation of the AIPS conference, too, had recently been subjected to new allegations of sports corruption relating to the country’s successful bid for the International Association of Athletics Federations (IAAF) champions, to add, of course, to ongoing allegations of graft around the state’s successful bid to host the 2022 World Cup. The latter allegations had became a key talking point in the lead-up to FIFA’s presidential elections in Zurich at the end of February. South African businessman Tokyo Sexwale (who has since bowed out when the Gianni Infantino was elected as new president) was one of five candidates to replace Sepp Blatter as FIFA president,

Numerous scandals currently surround world sports, from tennis match -fixing to the ongoing corruption scandal at world football’s governing body, FIFA. The Edge | 35

cover story | corruption in sports

QAR

121

million

Value of the 11-year sponsorship deal agreed between Adidas and the IAAF in 2008. Adidas has since terminated the contract in January 2016.

36 | The Edge

and had vowed to strip Qatar of the right to host the tournament if evidence emerged that bribes were used in the bidding process. Ironically, Sexwale was part of the organising committee for the 2010 World Cup in South Africa, which – according to the United States (US) and Swiss investigators – paid a USD10 million (QAR36 million) bribe to buy the North and Central American votes controlled by former FIFA regional chief Jack Warner. WHY THEY BID South Africa – like Qatar, and any other bid candidate – had clear incentives for wanting to stage world sport’s biggest event. Scarlett Cornelissen, a professor in the Department of Political Science at South Africa’s Stellenbosch University, outlined those incentives in Transparency International’s recent Global Corruption Report: Sport. Speaking exclusively to The Edge, Cornelissen explains, “One of the main motivations regards international status and prestige. A lot of so-called ‘smaller’ states, or emerging states, are making bids for these big events. Many are rapidly growing economies, with capital to throw around. They are trying to leverage that capital to make up for other shortcomings, in terms of hard power and so forth. For these states, these events are ways of gaining ‘soft power’ or prominence within the international system. I would imagine that Qatar falls into that category.” But if Qatar – or Russia, or South Africa or any other such state – hopes to raise its international profile through hosting a major sporting event, surely it would be doubly damaging if it were to emerge that it acted unethically to win the bid for whatever big event it was scheduled to host. Simon Chadwick, professor of Sports Enterprise at Salford University’s Centre for Sports Business, believes that – guilty or not – some of that damage may already have been done. “With the FIFA presidential election pending and ongoing investigations by the authorities – like the FBI – taking place, these are somewhat uncertain times for the Qatar World Cup, and indeed for Russia, for other bidding nations and for FIFA in general,” Chadwick tells The Edge. “For each of these parties, I think there has already been some reputational

damage caused in certain parts of the world. No matter what each country may or may not have done, such was the poor state of FIFA governance at the time of the 2018/2022 bids, that all are somehow perceived by various people as having somehow been complicit in the unacceptable bidding processes.” The danger for countries, even if they believe themselves to be innocent of any wrongdoing, is the actions of rogue actors or even just ongoing poor perceptions exacerbated by continued but ultimately baseless negative media spin. “My concern for Qatar is that the country might be singled out,” adds Chadwick, “while other larger, more established or more influential countries come out of this affair in much better shape. As such, Qatar needs to be prepared for this kind of scenario. It must remain vigilant to

corruption in sports | cover story

the outcomes of current investigations and be ready to carefully manage any negative fallout from them. To an extent, such outcomes are likely to be partly dependent upon who becomes the next FIFA president.” All of this of course, comes in the middle of allegations that Doha’s successful bid to stage the 2019 World Athletics Championships had been referred to the IAAF ethics committee. Nevertheless, following its successful bid for the 2022 World Cup, Qatar is now looking to host the world’s second largest sporting event. Speaking on the sidelines of February’s AIPS conference, Qatar Olympic Committee secretary general Dr. Thani Al Kuwari confirmed the country’s target to fly the five-ringed flag above Doha. “All the facilities are going to be ready for everything, especially after 2022, the facilities almost

99 percent are ready. Also, the logistics for those facilities are completed, so why not? You never know. Maybe 2028.” NOT FOR PROFIT When cities and states bid to host these high-profile sports events, they certainly do not do so for profit. The 2014 Winter Olympics in Sochi cost Russia USD51 billion (QAR185 billion). The 2014 FIFA World Cup cost Brazil USD11.6 billion (QAR42.2 billion). The EUR9 billion (QAR37 billion) cost of the 2004 Summer Olympics in Athens triggered Greece’s dramatic economic collapse, while the 1976 Montreal Olympics almost bankrupted the city (it took Montreal 30 years to settle its Olympic debts). But the ICSS’s Montanari was correct to point to the vast economic influence of the global sports industry. Ironically, given

Qatar Olympic Committee secretary general Dr. Thani Al Kuwari confirmed the country’s target to fly the five-ringed flag above Doha: “All the facilities are going to be ready for everything, especially after 2022, the facilities almost 99 percent are ready. Also, the logistics for those facilities are completed, so why not? You never know. Maybe 2028.” (Image Arabian Eye/Alamy)

Rather than being driven by morality, sponsors are taking decisions based upon the perceived impact on their brands.

Germany’s goalkeeper Manuel Neuer hits the ball out, as Argentina’s Lionel Messi reacts, during their 2014 World Cup final at the Maracana stadium in Rio de Janeiro, July 13, 2014. The 2014 FIFA World Cup cost Brazil USD11.6 billion (QAR42.2 billion). (Image Arabian Eye/Reuters)

The Edge | 37

cover story | corruption in sports

the vast amounts of purported ‘dirty’ money at play, sponsors are emerging as the great hope for cleaning up world sport’s cheating and corruption problems. For example, Dutch bank ING terminated its sponsorship deal with the Renault Formula 1 racing team after a race-fixing incident at the 2008 Singapore Grand Prix. Other cases include German sportswear company Puma, which ended its deal with the South African Football Association after FIFA found that four of the national team’s games in 2010 had been fixed. In the wake of world cycling’s doping crisis, sportswear company Skins terminated its sponsorship deal with the sport’s governing body Union Cycliste Internationale (UCI), and sued two UCI officials for USD2 million (QAR7.2million), claiming damage to its brand. Last month,

The estimated percentage of economic activity in the sports realm that contributes to global gross domestic product, somewhere around of QAR3.4 trillion annually.

Adidas and Nestlé both prematurely ended their commercial relationships with the IAAF over fears that doping scandals and corruption could damage their brands. Chadwick calls this ‘market-driven morality’. “Sponsors currently seem to perceive that there is some pressure upon them to take action, either to moderate or change socially unacceptable behaviours by terminating their sponsorship deals,” he tells The Edge. “Such a decision, though, seems to be based on sponsors making judgements about what is and isn’t acceptable: in other words, serving as moral arbiters on behalf of their customers. As such, we see some sponsors terminating deals in the light of doping cases, but not in the light of corruption.” Rather than being driven by morality, sponsors, he goes on to explain, are taking decisions based upon the perceived

NO WINNERS HERE

A brief recent history of cheating and corruption in sports

Johnson (r) ahead of American Carl Lewis, who eventually was awarded the gold medal. (Image Arabian Eye/ Reuters)

1988

Canadian sprinter Ben Johnson is stripped of his Olympic 100m gold medal after testing positive for an anabolic steroid.

38 | The Edge

Festina team masseur Willy Voet was one of 10 defendants to stand trial in the doping scandal and was convicted in 2000. (Image Arabian Eye/Reuters)

1998

Retrospective tests find that 92 percent of riders tested were doping during the Tour de France.

Hansie Cronje at a press conference shortly after admitting to receiving money from Indian bookmakers to influence the outcome of international cricket matches. (Image Arabian Eye/Reuters)

2000

A match-fixing scandal sees top cricket players from South Africa, India and Pakistan banned for life.

The International Olympic Committee in Lausanne March 17, where nine IOC members were expelled for taking bribes during Salt Lake City’s successful bid for the 2002 Games. (Image Arabian Eye/Reuters)

2002

Salt Lake City hosts the Winter Olympics, despite a bribe-tainted bid. Several IOC members are expelled as the IOC adopts new bidding processes.

corruption in sports | cover story

impact an incident or problem may have for them and their brands. “Morality is being driven by the market, and by market pressures,” furthers Chadwick. “My view is that this is somewhat cynical and creates inconsistencies in sponsor responses to different cases of transgression. I think sponsors need to start thinking rather more clearly about their positioning and how they stand on key issues such as doping. Furthermore, I think they need to publicly express their position, both to reassure their customers, but also as a means of threat to those who engage in transgressive behaviours.” Of course, many of the abovementioned allegations must yet be proven. Similarly, it remains to be shown, for example whether any alleged bribes in ‘brown envelopes’, came from official sources, or from other, independent,

Lance Armstrong is perhaps the bestknown international sports cheat, having used performance enhancing drugs to propel him to seven Tour de France victories, all of which were stripped. (Image Arabian Eye/Reuters)

2013

After years of denial, Lance Armstrong admits to doping, and is stripped of his seven Tour de France titles. He is dropped by all his sponsors, losing USD75 million (QAR273 million) in a single day.

Sponsors, are emerging as the great hope for cleaning up world sport’s cheating and corruption problems.

Former FIFA vice-president and UEFA president Michel Platini, along with FIFA president Blatter, was banned for eight years on December 21, 2015 by FIFA’s Ethics Committee. (Image Arabian Eye/Reuters)

2015

A US-led investigation uncovers decades of bribery at FIFA, totalling more than USD150 million (QAR546 million). Dozens of officials have been arrested as Swiss prosecutors open criminal proceedings against FIFA president Sepp Blatter.

interested parties. “When it comes to this kind of corruption, it’s usually small groups of ‘boosters’: a collection of businesspeople who push aggressively to make these bids succeed,” says Cornelissen. “Unfortunately, it’s been the case that at organisations like FIFA and the IOC, the bidding process is not very transparent.” This at the very least opens up grey areas and at worst says Cornelius, creates opportunity for graft and for money being exchanged. “The IOC has cleaned up their business. The bidding process for the Olympic Games is more transparent now, in the wake of the Salt Lake City Winter Olympics bidding scandal,” Cornelissen concludes,“It’s likely that FIFA will also improve now, because of the scandals that have hit the organisation. If so, that would be good for international sports.”

In November, the World AntiDoping Agency (WADA) in Montreal, Canada recommended that Russia’s Athletics Federation be banned from international competition. (Image Arabian Eye/Reuters)

2015

The IAAF suspends Russia from all international athletics competitions, amid a widespread international doping scandal.

The International Tennis Federation headquarters in London, Britain, where the Tennis Integrity Unit, charged with investigating the latest allegations to rock world sport, is based. (Image Arabian Eye/Reuters)

2016

Leaked files expose massive match-fixing in world tennis, with more than 70 top players accused of cheating over the past decade.

The Edge | 39

feature story | economic & spending

Is Qatari consumer Spending on the wane? The last two quarters of 2015, and into the New Year, have not witnessed many successive economic peaks. The world stock markets have crashed and recovered multiple times, hydrocarbon prices have slumped to historic lows and world media has reported on a staggering number of job losses just in the oil and gas industry alone. Naturally Qatar, a primarily energy-driven economy, faces dwindling revenues and its first deficit budget in 15 years. The Edge unravels if these global macroeconomic realities have had an impact on the volume of consumer spending in the country. By Aparajita Mukherjee.

Organised retail supply, an indicator that space is in demand, increased by 53,000 square metres (sqm) from 590,000 sqm to 643,000 sqm in 2015, according to Mark Proudley, director of DTZ Qatar. Pictured here is City Center Doha. (Image Arabian Eye/Corbis)

40 | The Edge

mid global economic slowdown predictions warning policymakers and governments across the world (mostly on the fear that it should not touch the proportions that we witnessed in 2008 to 2009, the financial community heard a voice of reassurance. This came from Nouriel Roubini, New York University’s economics professor at the World Economic Forum meet at Davos, in January. Roubini, who earned the name of ‘Dr. Doom’ having predicted the 2008 to 2009 crisis, has been quoted by international media that he “is less pessimistic than one might expect given the recent turmoil in global stock markets and growing concerns about a United States (US) recession”. But he cautioned that unless there is an appropriate and rapid policy response, the situation could get worse. A look at the prevailing macroeconomic realities since the second quarter of 2015 at least for the major Asian economies does not

economy & spending | feature story

give a promising picture, and policymakers do not seem to have any answers to what Roubini wants them to do urgently – appropriate and rapid policy response. China, ranked as the second largest economy in the world by the International Monetary Fund (IMF) World Economic Outlook (October 2015) with a nominal gross domestic product (GDP) of USD1.1 trillion (QAR4.1 trillion), experienced a series of stock market crashes since July 2015. This continued through August, sustaining the momentum till December 2015, and was followed by a steep sell-off with the Shanghai Composite Index experiencing a fall of seven percent on January 7, 2016 and having to suspend trading. This was a precursor to a series of global market crashes. United States (US) stocks recorded a sharp fall with a recurring pattern seen across European and Asian markets. Qatari stocks witnessed a multi-year low on January 17 with the benchmark index recording its lowest level since April 2013, closing at 8527.75 points after decreasing 7.16 percent, or 657.37 points. Along with the global stock market crash, the other worrying factor has been the consistent (and longest in duration) fall in hydrocarbon prices that has engaged policymakers’ attention. Oil prices have seen the sharpest downturn since the 1990s, with the price of Brent crude falling to USD27.67 (QAR100) a barrel when the Iran sanction

In the context of Mosafer, the luxury travel brand opening a store at New York, Ashraf Abu Issa, chairman of Abu Issa Holding, told The Edge, “We are expanding into South Africa and Turkey in the near future. Travel and tourism’s contribution to world GDP grew for the fifth consecutive year in 2014, rising to a total of 9.8 percent of world gross domestic product (USD7.6 trillion/QAR27.7 trillion). It is a thriving industry and is insignificantly impacted by slowing markets.”

was lifted mid-January, its lowest since 2003, primarily because of a supply glut (because of the Organization of Petroleum Exporting Countries’ – OPEC – reluctance to cut oil production after no consensus was reached in the recently-held OPEC meet held at Doha) and not weak demand. Many analysts have slashed their 2016 oil price forecasts, with Morgan Stanley analysts saying that oil in the USD20 (QAR72.8) is possible, if China devalues its currency further. Economists at the Royal Bank of Scotland say that oil could fall to USD16 (QAR58), while Standard Chartered predicts that prices could hit just USD10 (QAR36) a barrel. As a result, earnings for energy companies that had been used to a price band of between USD90/barrel (QAR327.6/barrel) to USD100/barrel (QAR364/barrel) over the last decade have plunged, prompting more than 258,000 workers globally (according to the Texas-based industry analyst Graves & Co) to lose their jobs. All international energy players such as Total, Schlumberger, British Petroleum, Royal Dutch Shell, Chevron, ConocoPhillips and others have reported job cuts. In Qatar, jobs cuts have been reported by Qatar Petroleum (QP) and RasGas.

programme, which involved termination of service contract of some non-Qatari staff and exiting non-core businesses, its chief executive Saad Sherida Al Kaabi said in a media briefing session at Doha. In early 2015, Doha News reported that, “unnamed industry sources told Reuters that the job cuts to the organisation’s 14,000-strong workforce could involve losing up to 30 percent of employees in some areas”.

Policy decisions

With the fall in oil prices, for over a year, the oil producing countries in the Gulf Cooperation Council (GCC) face shrinking revenues which has had an impact on government subsidies and has resulted in deficit budgets.

Ramifications

These predictions have held true for Qatar in 2015 as well, in separate and, at that point, seemingly unrelated events. In January 2015, Shell and QP scrapped the proposed USD6.4 billion (QAR23.3 billion) Al Karaana petrochemical project which was closely followed, in terms of chronology, with leading energy players downsizing their manpower, though there are no concrete numbers that have been given by any of the companies officially. Closely on the heels came the absorption of QP’s wholly-owned overseas investment subsidiary Qatar Petroleum International. Speaking to The Edge in March 2015, Calvin Cobbs, president of global energy consultancy Cobb & Associates, said, “It is the least severe form of business retrenchment in a period of ‘market difficulties’ to focus on achieving economies of scale both in company structure and project implementation, and is way less dramatic than the sorts of measures that we have seen being undertaken by some other producers in the Middle East.” Beginning in early- to mid-2015, stateowned QP completed a restructuring

“Since retail projects are largely funded through the private sector, it is unlikely that we will see them being cancelled as a direct result of the deficit.” – Duncan Mackay, KPMG Qatar. The Edge | 41

feature story | economy & spending

Qatar is set to post a deficit of QAR46.5 billion for its 2016 budget, with a revenue of QAR156 billion and expenditure of QAR202.5 billion which is 7.28 percent or QAR15.9 billion less than its last fiscal year. Expenditure has been cut in anticipation of the country’s first financial shortfall in 15 years. Immediately preceding the budget announcement, Kahraama increased utility tariffs in October 2015, its first in more than 10 years. Built in the new pricing plan is the slab factor: as the consumption goes up, so does the tariff. For example, someone living in a residential flat must now pay QAR.08/ kilowatt hour (kWh) for consuming up to 2000 kwh. Once that limit is exceeded, the rate goes up to QAR.09/kWh for the next 2000 kwh, then QAR.10/kWh and so on. Similarly, customers are charged more for cubic meter of water if they exceed a certain threshold. The postal services of state-owned QPost also hiked their costs effective January 1, 2016. Shipping charges have gone up depending on the weight of the item and the destination. Following the QPost hike, mid-January, Qatar cut fuel subsidies (following the United Arab Emirates, Saudi Arabia and Bahrain) and hiked petrol prices by 30 percent. The surprise price rise was announced by Woqod, the state fuel company, just hours before it came into effect. With all of the above contributing to rising costs, projections on salary raises by human resource consultants Mercer put the figure for Qatar at 4.9 percent, a figure below five percent for the first time in five years. According to another report by Korn Ferry Hay Group, salaries in the Gulf region are forecast to see a lower average real increase of 2.3 percent. The annual consumer prices in Qatar, according to Trading Economics, the data aggregator, rose 2.70 percent in December 2015, following a 1.9 percent rise in November. It is the highest figure since December 2014, mainly driven by cost of housing and utilities (+3.4 percent) and food and beverages (+0.7 percent).

Retail slowdown

Against this backdrop of macroeconomic uncertainty on multiple fronts and increase in the cost of living and lower prospects of salary raises, there has been a general feeling of insecurity, largely at the expatriate 42 | The Edge

Oil prices have seen the sharpest downturn since the 1990s, with the price of Brent crude falling to USD27.67 (QAR100) a barrel when the Iran sanction was lifted mid-January, its lowest since 2003, and a supply glut.

employee level, which has impacted the volume of consumer spending and has hit the retail market sentiments. In the context of their luxury brand Mosafer soft-launching a store at New York, Ashraf Abu Issa, chairman of Abu Issa Holding told The Edge that the high-end luxury retail market does not report sluggish sentiments, adding, “We are expanding into South Africa and Turkey in the near future. Travel and tourism’s contribution to world gross domestic product (GDP) grew for the fifth consecutive year in 2014, rising to a total of 9.8 percent of world GDP (USD7.6 trillion/ QAR27.7 trillion). It is a thriving industry and is insignificantly impacted by slowing markets.” “According to the Deloitte’s Global Powers of Retailing 2016, the eight retailers representing the Africa/Middle East generated composite growth of 19.4 percent, which is 4.5 times greater than the Top 250 as a whole,” Abbas Ali Mirza, audit partner, Deloitte Middle East, commenting on the findings of their report. Mirza adds that since the past year, oil prices have plummeted which has resulted in disinflationary pressures in many countries

economy & spending | feature story

thereby boosting consumer spending in major markets. “For the world’s leading retailers, the weakness of oil process has mostly been good news,” he stressed, though most of the mid-market retail players The Edge approached showed reticence on how their business has been doing since the second quarter of 2015 and this silence is reflective of a trend. Secondary data analysis, however, does not show, as yet, a gloomy retail sector, with organised retail supply, an indicator that space is in demand, increasing by 53,000 square metre (sqm) from 590,000 sqm to 643,000 sqm in 2015, according to Mark Proudley, director of DTZ Qatar. Proudley adds, “Appetite for new accommodation remains positive from retailers and a number of the new premium malls (Doha Festival City and Mall of Qatar) scheduled to open over the next 12 months are claiming to have leased in excess of 75 percent of their available space.” Drawing a causal connection between recent job redundancies and cuts in government spending and if these will impact the retail markets, Proudley says, “The obvious and easy answer would be yes based on the fact that there are fewer high earners in the country spending money.” DTZ anticipates that population increase – currently at 2.42 million, up eight percent over the 12 months to December 2015 – is being driven by lower-income population, which is reflected by greater availability of housing within prime residential schemes. Commenting on whether the government budget deficit in any way impacts the retail

Gaby Salomé, GM,, Al Mana Interiors, singles out fashion and electronics as two consumer subsegments that had the slowest uptake in recent times.

Consumer price index inflation ( % change year-on-year) 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 JAN - 14

JUL - 14

JAN 15

JUL - 15

JAN - 16

Source: Ministry of Development Planing and Statistics ( MDPS), Haver Analytics and QNB Economics

With the fall in oil prices, the oil producing countries in the GCC face shrinking revenues which has had an impact on government subsidies and has resulted in deficit budgets. sector and its fortunes, Duncan Mackay, partner at KPMG Qatar, reasons that while government cuts are affecting some hydrocarbon and infrastructure budgets, and some large projects have been cancelled, “since retail projects are largely funded through the private sector, it is unlikely that we will see them being cancelled as a direct result of the deficit”. Mackay continues that the impact could however come if consumer spending declines

as a result of lay-offs and wage freezes, as residents increasingly find ways to ‘tighten their belts’, a sentiment that Gaby Salomé, general manager, Al Mana Interiors, agrees with, singling out fashion and electronics as two consumer sub-segments that had the slowest uptake in recent times. Salome cites macroeconomic factors that have led consumers to be more careful with their expenditure and disagrees that the recent job redundancies have impacted consumer spending. “The lay-offs were expected but they have been more drastic than anticipated and it has impacted spending habits but it is certainly not the only reason,” adding that the year-end promotional offers did contribute to a positive turnaround, an advantage that organised retail has over neighbourhood small shops which have reportedly been facing declining volumes and high rentals. Mackay of KPMG, suggesting a way forward for the retail consumer goods industry, mentions that KPMG’s 2015 Global Consumer Executive Top of Mind Survey titled, To stand still is fall behind, has identified the six most prominent issues facing retailers and which they must address to ensure profitable growth: consumer trust; omni-channel approach; data security; sustainability and corporate social responsibility; consumer knowledge. “For Qatar’s retail sector to flourish, it too must address these challenges and we are increasingly seeing clients turn to us for assistance in these areas,” Mackay concludes. The Edge | 43

business interview | energy pricing

Supply and

Demand Hatem Ghandir, head of business news, Al Jazeera Arabic TV, discusses the possibility of considering the current crisis as an opportunity to review the incomes of their economies and spending policies among energy exporting countries, especially in the GCC. (Image FotoArabia)

44 | The Edge

energy pricing | business interview

In an exclusive interview, with The Edge’s Sanae Bougria, Hatem Ghandir, head of business news, Al Jazeera Arabic TV, an engineer in petroleum economics, offers an alternative view on what has caused the current low oil price and its effect on regional and global markets. The price of a barrel of oil remains under USD35 (QAR110), placing in many ways considerable strain on both regional and international economies. Identifying the most prominent repercussions of this and its causes, Ghandir, head of business news at Aljazeera Arabic, highlights a number of crucial issues underlying the current energy price. With insightful analysis of the status quo, Ghandir offers an alternative, more Arab-centric view on the dynamics of supply and demand that influence it to that mostly espoused by Western pundits.

t the outset, Ghandir emphasises oil’s vital contribution as a commodity to economy, through major sectors such as manufacturing, industry and transport, and points out that the major drop in the price recently is mainly a reflection of excess oil production – of three million barrels per day (bpd) of surplus – compared to current global market requirements. Moreover, Ghandir believes that media reports laying the blame for the low oil price solely on Saudi Arabia and Organization of Petroleum Exporting Countries (OPEC) members in causing this surplus of oil in the market are disingenuous. “As OPEC countries only contribute 30 percent of the total world oil production,” he says, “they cannot alone be held responsible for the market surplus and other oil-producing countries must also bear some responsibility.” While Ghandir concedes that Saudi Arabia had in fact previously embarked on a strategy in the 1980s to reduce its production percentage in an effort to raise prices, he adds that in this market any tightening of the Saudi output would mean it would lose market share and therefore, he The Edge | 45

business interview | energy pricing

Qatar, says Ghandir, is committed to specific projects to host the World Cup in 2022 “and has also pillars within its framework it is operating to achieve the Qatar National Vision 2030 so it is therefore very likely to execute large projects in specific deadlines.” (Image FotoArabia)

believes, Riyadh ostensibly does not want to repeat the same mistake. Nevertheless, internationally there is a widely-held belief, explains Ghandir, that OPEC countries – led by Saudi Arabia – should be expected to cut its production when there is an excessive supply of oil in the market, until the surplus is absorbed. But this should not be limited to OPEC only and should be shared among all oilexporting nations, argues Ghandir. “Why are we only demanding Saudi Arabia to reduce its production rate, but we do not ask Russia as well, which is currently producing at maximum capacity, with a daily production rate of about 11 million bpd, while Saudi Arabia’s production is only at 10 million bpd?” he asks. [Editor’s note: The two countries have since agreed, along with other OPEC countries such as Venezuela and Qatar, to freeze oil output at January levels.] According to Ghandir, the surplus has also resulted from increased production in the United States (US), which has doubled its oil production over the last five years. As the largest oil consumer in the world, the US has also recently become an oil exporter. Again, Ghandir stresses the need for commitment of all oil-exporting countries to reducing production. “Why is the US insisting on oil exports when its production costs per barrel are not covered by the current prices?” he reiterates. Besides excess supply, Ghandir also sees several other factors such as the slowdown in the global economy and 46 | The Edge

in particular in China, which is currently witnessing its most sluggish economic growth in 25 years and has had a significant effect on the demand for the world’s key commodity in the past 12 months. Negative and positive impacts Looking at the extent of the negative impact that the decline in oil price has caused internationally, Ghandir points out that it varies from country to country. “Weak states that rely on oil primarily and have no industries or other income have been unable to develop their economy in other industries rather than just focusing on the oil and gas sector,” he points out, citing Nigeria as an example. Though a member of OPEC, with a population of about 180 million to support through oil revenues (which contribute up to 80 percent of government earnings), this West African nation produces roughly a quarter of the oil of Saudi Arabia (population 27.7 million) and only slightly more than Qatar (population 2.4 million). Such countries, continues Ghandir, are consequently carrying expensive production costs compared to some other countries, such as Qatar, which have also invested wisely and accumulated financial benefits over the past 11 years, when oil prices were high. This is the result, he adds, of poor foresight. “Did they ever think about the possibility of a collapse in oil price at some point, and was there any forward planning for this eventuality?” asks Ghandir rhetorically.

“Even the International Monetary Fund has recently advised the Gulf states to exploit this valuable opportunity to re-rationalise the expenditure and make some economic reforms in some sectors.”

Nevertheless, whatever their financial situation, discussing the possibility of considering the current situation as an opportunity to review the incomes of their economies and spending policies among energy-exporting countries, especially in the Gulf Cooperation Council (GCC), Hatem agrees that this should be taken into consideration. “Their budgets have been governed by a preferential oil price,” furthers Ghandir, ”that some governments had previously put the oil price at between USD70 (QAR255) and USD100 (QAR364) per barrel, building large budgets.” However, he continues, these budgets were not always used wisely with some dramatic increases in hiring, which has led to the emergence of a high burden on the state. He adds, “Even the International Monetary Fund has recently advised the Gulf states to exploit this valuable opportunity to re-rationalise the expenditure and make some economic reforms in some sectors.” In response to whether some

energy pricing | business interview

countries have actually begun this review and planning, especially after a rolling talk between the GCC members on the application of a VAT (value added tax) on certain goods and materials with the exception of basic goods such as food, Ghandir says that this option is still under discussion within the GCC states. Though, according to recent reports, it seems likely that the GCC countries are moving towards implementing VAT at some point (most recently agreeing on a universal level of five percent across all six member states for VAT), there is a fear, Ghandir says, that this would hinder investment in the region, as the absence of most forms of tax in itself is one of the factors that encourages the influx of foreign capital in the region. Nevertheless, despite concerns about the low oil price, states such as Qatar (which depends of course mostly on gas exports, the value of which are linked to oil) and the United Arab Emirates are still moving toward investment in high-cost, large-scale projects. Qatar, for example, has allocated QAR5.6 billion from its budget for the fiscal year 2016 to invest in infrastructure projects, despite being set to register its first budget deficit in 15 years. “The fundamental problem economists in the world feared is an economic recession, which arises when the cessation of growth and economic development happens,” says Ghandir “but Qatar, for example, is committed to specific projects to host the world Cup in 2022 and has also pillars within its framework it is operating to achieve the Qatar National Vision 2030, so it is therefore very likely to execute large projects in specific deadlines.” It should be noted that Qatar has already signed a set of contracts for some major projects amounting in value to about USD71 billion (QAR258 billion), Ghandir adds. These projects are mainly dependent on gas, of which Qatar is the largest exporter of liquefied natural gas (LNG) in the world. It is also the thirdlargest producer of LNG in the world after Russia and the US. However Ghandir also emphasises that Qatar has other sources of income aside from its oil revenues and these are forwarded to the state treasury. “It is also worth mentioning that Qatar is one of the few countries,” he adds, “that still maintains a good level of economic

USD

billion

Qatar’s budget allocation for some major projects.

growth.” That said, Ghandir also stresses that all Arab nations and energy-producing countries generally should work harder in order to find alternative energy solutions. He also adds that the Arab region in particular is rich in energy sources. “Morocco has recently opened one of the largest solar power plants in the world, which shows how many treasures our Arab region contains and how this can be reached.” Finally, by addressing the expectations about the future of oil prices, Ghandir points out that the forecasts in the energy market are not always correct and they are often an estimate based on too many factors to be wholly accurate. With respect to the current data, Ghandir says, “The higher the price, the more we see the entrance of new players to the global

“As OPEC countries only contribute by 30 percent of the total world oil production,” Ghandir says, “they cannot alone be held responsible for the market surplus and other oil-producing countries must also bear some responsibility.” (Image FotoArabia)

“Why are we only demanding Saudi Arabia to reduce its production rate, but we do not ask Russia as well, which is currently producing at maximum capacity, with a daily production rate of around 11 million bpd, while Saudi Arabia’s is only at 10 million bpd?”

market. When exploration, production, operations and marketing become a viable economic operation for these players, and the more the prices fall, players are urged to fall out gradually, until the market is limited only to those key players who have the real power.” Ghandir concludes by adding that due to the recent rapid decline in energy prices, especially after the closure of about 700 drilling rigs in the US, as well as the ceasing of production and reduction in the productivity in some other companies as well, should help to absorb the existing surplus in the next year or so. This is an edited version of an Arabic 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

The Edge | 47

special feature | maritime security

oil & gas installations:

for the Arabian Gulf region?

With the potential increase in terrorism and possible threat of missile attacks, oil installations should be protected in the same way as military bases and other critical infrastructure by deploying air defence equipment.

48 | The Edge

maritime security | special feature e

Statistics indicate that the measures put in place to mitigate seaborne terrorism south of the Arabian Peninsula are working, with fewer attacks on merchant vessels and tankers recorded. But as the well-patrolled ‘high-risk areas’ in the Arabian Sea shrinks, potential threats can actually increase. Oil and gas industry security consultant, Peter McKinley explores the ebb and flow of the threats to shipping and offshore installations.

he potential threats from maritime terrorism and piracy are magnified as the entire region is dependent on only three main sea lanes to fuel its economy – the Strait of Hormuz, Bab al Mandeb and the Suez Canal. While security is always uppermost in the minds of the oil and gas industry, the reduction in the number of acts of piracy is no basis for complacency, especially in these vulnerable and strategically critical areas. The Arabian Peninsula is the largest in the world with a landmass of 3.2 million square kilometre. It is home to 78 million people in seven countries, most with long coastal borders, huge ports and industrial installations, especially in the waters of the Gulf Cooperation Council (GCC). From the Gulf of Aqaba, down the Red Sea to the Arabian Sea and into the Arabian Gulf – this huge expanse of water is the conduit for more than 30 percent of all crude oil shipments generated by 169 oil rigs channelled through 19 oil terminals – excluding a further nine in Iran. Apart from the shipping lanes themselves, the boundaries of the Arabian Peninsula are shared with some of the world’s most volatile nations where rule of law is compromised by terrorist groups, such as Al Qaeda, ISIS and Al Shabab. Threats to oil & gas installations According to a paper published by industry expert Dr. Mikhail Kashubsky, attacks on oil installations are nothing new, in fact they date back to 1899. Dr. Kashubsky identifies a total of eight threat categories, of which at least four or five are tangible risks today in the Gulf waters. Over the past 25 years, an average of two attacks have occurred every 12 months. That statistic aside, anticipating future risks is altogether more complex, with the potential increase in terrorism and possible threat of missile attacks. Therefore, oil installations should be protected in the same way as military

bases and other critical infrastructure by deploying air defence equipment. This scenario is made more hazardous as no equivalent to Operation Atalanta (a counter-piracy military operation at sea, off the Horn of Africa and Western Indian Ocean, first undertaken by the European Union –EU – naval forces) exists in the Arabian Gulf. Fishing to funding terrorism Nowadays, conflicts occur at any time and threats are getting increasingly unpredictable. The motivations for former fishermen to become pirates, and risk life and limb, have been well documented. Furthermore, they are potential recruits for terrorist groups and can be groomed to become suicide bombers. It is worth noting that much of the revenues generated through ransoms paid for release of crews, cargoes and vessels, were ostensibly directed to fund terrorism augmented by Al Shabab through the Horn of Africa and beyond. This cynical evolution prompted much political soul searching and legal analysis. One early consequence was a working code known as ‘Best Management Practice 4’ (BMP-4) developed and refined by the merchant shipping industry. This is a document designed as a reference guide to ship owners and seafarers alike. Oddly, no such code was established by the oil and gas industry, other than those implemented by individual rig operators. Naval defence strategy In addition to BMP-4, a military strategy was deployed through Operation Atalanta which was launched in 2008, largely to protect aid shipments. But by 2012 its scope had expanded significantly to coordinate counter- piracy operations. Under EU Council Joint Action 851, which is based on various United Nations (UN) resolutions, Operation Atalanta’s mandate was to: • Protect vessels of the World Food The Edge | 49

special feature | maritime security

The relatively calm waters of maritime security and defence could quickly be replaced by more turbulent conditions offshore caused by global terrorism and related instability.

LNG Terminals Adgas LNG Plant

UAE

Oman & Qalhat Plant

Oman

Qatargas I

Qatar

Qatargas II

Qatar

Qatargas III

Qatar

RasGas I

Qatar

RasGas II

Qatar

RasGas III

Qatar

Yemen LNG Plant

Yemen

Source: Globallnginfo.com

Types of threats Piracy Terrorism

• • •

Programme (WFP), African Union Mission in Somalia (AMISOM) and other vulnerable shipping; Deter and disrupt piracy and armed robbery at sea; Monitor fishing activities off the coast of Somalia; Support other EU missions and other international organisations working to strengthen maritime security and capacity in the region.

High-risk areas With continued unrest surrounding the Arabian Peninsula, it brings into question what the high-risk areas should actually look like? Historically, it was based on a set of circumstances, which are highly dynamic and offer opportunity to those willing to cause collateral damage in less protected areas. Quite recently the entrance to the Red Sea at the Bab Al Mandab Strait has witnessed some significant military activity from the joint forces engaged in fighting Yemen’s Houti rebellion, especially towards the port of Hodeida. In the north, it appears ISIS is spreading its influence in Sinai thus threatening the Suez Canal. In response, Egypt is investing heavily on upgrading its naval defence capabilities to ensure protection of its borders and this crucial shipping lane. Doubtless, other countries in the region are reviewing their own capabilities to secure critical national infrastructure. 50 | The Edge

Expert consensus The countries of the Arabian Gulf host a regular calendar of high-profile maritime and defence conferences, such as the Doha International Maritime Defence Exhibition and Conference (DIMDEX) that is taking place in Doha this month, which consistently encourages defence readiness. Senior defence and naval experts from the West and East all seem to agree that sea-borne terrorism has not gone away and that the Gulf’s dependence on safe and open sea lanes is best guaranteed by a proactive approach to defence. One example of how the international community is collaborating with the GCC countries on this is Britain’s re-establishment of its naval base in Bahrain. After more than 40 years, the United Kingdom (UK) has an agreement with Bahrain for the UK’s largest naval operations base outside of mainline Britain. The 25th anniversary of Kuwait’s liberation from Iraqi occupation on February 26 is a stark reminder of the economic, environmental and human cost of the first Gulf War. For many in the region, the memories of blazing oil fields and acrid smoke – the legacy of Saddam Hussein’s first incursion – remain hauntingly palpable. By putting in place the measures that expert consensus advocates, hopefully such recurrences can be prevented. Protecting the industry’s future It is obvious that the oil and gas industry is being affected by supply and demand scenarios of the energy sector. It is also

Insurgency Organised crime Inter-state hostilities Civil protest Vandalism Internal sabotage

Oil installations should be protected in the same way as military bases and other critical infrastructure by deploying air defence equipment.

maritime security | special feature

The high-risk area limits •

In the Red Sea – northern limit: Latitude 15°N

•

Eastern limit – Longitude 065°E

•

In the Gulf of Oman – northern limit: Latitude 22°N

•

Southern limit – Latitude 5°S

Oil Terminals Iran

Iraq

Kuwait

Oman

Qatar

Saudi Arabia

UAE

Total

Source: SGS-OGC

true to say that there has been a decline in offshore oil and gas exploration globally, but 70 percent of the region’s oil rigs are still active and should be properly protected. The possibility of suicide attacks similar to that on the USS Cole in the Port of Aden in October 2000 remains another major concern. Ports, production and exploration oil and gas installations, ocean-side refineries and naval bases are all vulnerable to suicide bombers using high-speed skiffs or rigidhulled inflatable boats (RHIBs) as a means of delivery of improvised explosive devices. The simultaneous suicide boat attacks allegedly by Al Qaeda on the Al Bashrah Oil Terminal and Khawr Al Amaya Oil Terminal in 2004 are

indicative of this threat. To mitigate against such incidents, the use of fast maritime defence assets in combination with powerful warships will be an essential part of the management of security for maritime operations, with trained armed maritime security personnel. Any disruption to this critical national infrastructure offers huge financial, political and human implications. While piracy was seen as a major threat to the wellbeing of the oil and gas industry, the relatively calm waters of maritime security and defence could quickly be replaced by more turbulent conditions offshore caused by global terrorism and related instability. The Edge | 51

sector name | banner heading

a qatari magazine dedicated to the countryâ&#x20AC;&#x2122;s booming construction industry

smartphone and tablet optimised.

www.qatarconstructionnews.com

The Edge | 1

Inside the minds of leading business figures

business insight Tawar Mall to open in Q4 2016 54

Automotive enthusiasm 56

The Edge managing editor Miles Masterson talks automotive sector with Markus Leithe, managing director, Middle East Commercial Operations of GMC.

Chairman and CEO of Tawar Mall, Jassim bin Tawar Al Kuwari with Pedro Ribeiro, general manager.

The Edge | 53

business insight | retail

SHOPPING MALL

Tawar Mall to open in Q4 2016

In conversation with The Edge, Pedro Ribeiro, general manager, Tawar Mall speaks about what the mall will offer to the retail landscape in Qatar, reasons behind the delay in opening and their plans for the first quarter after they open. Tell us about yourself, your educational and professional experience prior to joining Tawar Mall. I started to work at a Levi Strauss store at the age of 16 with the aim of being financially independent. Within the next three years, I had been promoted as the deputy store manager and eventually to country manager. I was also doing my studies at night after work, to get my degree. At that time, when I managed Levi’s, honestly, it was their golden era, which allowed me to understand the full cycle of a brand itself – from producing to selling – so this exposed me to the full knowledge of the retailer’s expectations and their frustrations. At that time, about 14 years ago, in Europe, the outlet format of shopping centres was not yet being implemented and I was approached by Factory Vila do Conde for implementing the outlet shopping centre format, policies and procedures. In 2006 the International Council of Shopping Centres awarded the project, which was under my leadership, as the best Shopping Centre in Europe. After this role, I managed the biggest shopping centre in Spain as a general manager. Thereafter, E.Leclerc, a French company that runs hypermarkets and shopping centres in Portugal, appointed me to be CEO. This was followed by my stint with Mall of Qatar for three years, immediately prior to my current role at Tawar Mall. How do you see the Gulf Cooperation Council (GCC) market in comparison to your European exposure? While European markets are more mature, compared with the GCC countries, we all are part of the economic cycle, which sees a period of growth and then a downturn. In my opinion, even a downturn presents an 54 | The Edge

opportunity, where one can take advantage of it. I will give you the Dubai example. They passed through a downturn and they understood how to turn that around with income from industries such as tourism, which has made them comparatively less dependent on hydrocarbons. This year will be a relatively tough year, but it will depend on how each retail player positions its offerings in the market. To a large extent, it will be a function of the strategy, the vision and how well one delivers and executes that vision. As of this moment, we have already signed 60 new brands that are not operating in Qatar. One month ago, this number was 37. This is clearly an indication that the retailers even in a challenging market scenario respect our credibility. How does Tawar Mall plan to compete with its regional competitors? We are in a specific part of the world where, due to the culture and due to the climate, a mall is not merely a mall, but a small city with space enough to accommodate families, so they can find entertainment options too. Tawar Mall has a built-up area of 300,000 square metres (sqm) of which the leased area would be 91,000 sqm. With this we have room for spacious and wider corridors with natural light, internal water fountains, external musical water fountain, such as in Dubai Mall, cinemas, family entertainment area, large food court and fine dining areas. These are in addition to our prime location and easy accessibility. We do not want to be the largest mall in Qatar, but we want to roll out a feasible project for the owners, the retailers and as a pleasant option for visitors, who will come back. We will use our space wisely. For instance, even if I have the possibility to sign 10 fashion stores in a certain area of the mall, I will rethink the numbers. While calculating

“We do not want to be the largest mall in Qatar, but we want to roll out a feasible project for the owners, the retailers and as a pleasant option for visitors, who will come back.”

retail | business insight

the footfall, we need to factor in that Qatar does not have the numbers of Dubai or Abu Dhabi. Given the location of our mall, we have factored in the people that live nearby – our first catchment area – which comprises the surrounding high-income Qatari neighbourhood, so this ensures that even on weekdays, we are guaranteed a decent number of visitors.

“The total investment will be in the region of QAR2 billion and that makes Tawar Mall the most expensive mall in the region.”

Given your past experience with shopping malls all across Europe, what advantage do you bring for Tawar Mall? As I have been a retailer, I can understand their needs and when they are explained rationally – that the operator will take care of the surrounding area of the store, and all they need to invest is in creating the store itself – they get the concept. As a proof of this, we have been able to sign some French, Italian and German brands, which are coming to Qatar for the first time. What is your take on the delay that the mall has experienced, because it was slated to open in 2014? How soon can we expect it to open? There have been two main reasons for the delay of Tawar Mall. One is of course the macroeconomic realities, which have delayed all the major projects around the region. The second is that the mall, owned by the Al Kuwari family, has been affected by the sad passing of Jabr Tawar Al Kuwari, after whom the mall has been named. Now his son, our CEO and chairman Jassim bin Tawar Al Kuwari, has been involved in the development process, every step of the way and the aim is to open the mall in the last quarter of 2016. What will be the total investment that the company will have made? The total investment will be in the region of QAR2 billion and that makes Tawar Mall the most expensive mall in the region. I started from scratch in mid-2015, and have already leased out 60 percent of our gross leasable area. I have a good international team, the right resources and the necessary budget. Even though I know that within the next few months there will be a bit of a slowdown in terms of leasing, we are prepared to face it. Can you list two priorities within three months of your opening? After opening the mall, we need to have a secure and safe operation. We will take good care of our clients and their safety

Pedro Ribeiro, general manager of Tawar Mall, told The Edge, “Tawar Mall has a built-up area of 300,000 square metre (sqm) of which the leased area would be 91,000 sqm, so we have room for spacious and wider corridors with natural light, internal water fountains, external musical water fountain, such as in Dubai Mall, cinemas, family entertainment area, a large food court and fine dining area.“

and this is what needs to be reflected in the daily activity of managing the mall as it is an important responsibility. So priority one, will be to implement preventive systems with my operation team. The second priority, within three months’ time is to have the mall 100 percent leased, because to be very clear, the mall will not be opened with full occupancy, but our aim is to open with at least 75 percent leased. The Edge | 55

business insight | automotive

vehicle sales

Automotive enthusiasm

The Edge managing editor Miles Masterson talks automotive sector with Markus Leithe, managing director, Middle East Commercial Operations of GMC. Before joining GMC Middle East, Markus Leithe started his career with General Motors Europe in 1998 as a product specialist in Ruesselsheim, Germany, and worked on various assignments in different functions for GM Europe and Chevrolet Europe in Switzerland and Germany. “These gave me the opportunity to learn about the automotive industry from all kinds of aspects,” says Leithe, his passion for his vocation matched by the fervour his customers in this region show for their motor cars. “I’ve been very fortunate where my career has taken me,” he adds. How did you come to be from your beginnings at GM Europe? Was it a conscious decision to come and work in the Middle East and if so what attracted you here? In 2011, I was offered the opportunity to relocate to the United Arab Emirates (UAE) and I was excited to accept, as this is such a buzzing and dynamic region. I started in this region with being responsible for sales, service and marketing for the Kingdom of Saudi Arabia (KSA), UAE and Oman. That was followed by assignments as the regional marketing director and then the regional sales and marketing operations director, before taking on my current assignment mid last year. So you see, my career has been a constant journey and this is what makes it exciting. What have you learned about the market since your arrival in the UAE? People who live in this region are very passionate. Especially when it comes to cars, you have a lot of automotive enthusiasts here that go all out to possess the best product in the market. And people want to be treated accordingly. That’s why we are so committed to building a stronger 56 | The Edge

relationship with customers by delivering great products and the best retail experience. One big difference to Europe is the key driver that defines the cost of ownership. Fuel prices are lower here than in other regions. Even after the latest changes they contribute less to the cost of ownership than other aspects, such as service costs. That’s why we are offering full transparency in our service cost with our menu pricing. You can easily access this information online or at the service reception prior to the service appointment. Or even when considering the purchase of a vehicle to compare the cost of ownership. No hidden charges, no bad surprises. Continuing from the above, can you elaborate more on the unique or most marked elements in your experience as previous GM director of vehicle sales and marketing operations Middle East? We see a very bright future for Chevrolet in the Middle East. We want to take a holistic approach to offer the best products and retail experience and we call that Chevrolet Complete Care. It’s not a campaign; it’s an attitude to put our customers at the centre of everything we do. We promise our customers to take care of them. This starts with providing all the required information – be it online or at our dealership – to make the right decision. It continues with the right offer to fit the financial requirements and a great delivery experience. And then, most importantly, we take care during the ownership of the vehicle with a great product and service experience, so in the end, when the vehicle is due for replacement our customer would not consider looking for an alternative brand.

“The Middle East has always been very open to innovation and technology, so I am convinced that in a few years from now the automotive landscape will look very different.”

automotive | business insight

Of all the items mentioned, which aspects do you think are the most challenging here, as opposed to in Europe? You mentioned competition from Japanese car brands in the SUV category, for example. There are a lot of opportunities for Chevrolet in the region. We have probably the most comprehensive and most modern vehicle portfolio of any manufacturer in the region. For us, the spirit of innovation and the passion for performance are at the heart of every vehicle. And performance means something very different for every customer. For a Corvette customer that might mean a great track handling, for a Silverado customer that might mean a great off-road capability and for a Spark customer that might mean low cost of ownership and most advanced safety features.

“Frankly I don’t see a slump in consumer spending. The Middle East region has traditionally been strong when it comes to interest in automobiles.” there is no free market competition here or in many other areas of the region. What is your perspective on that? Again, these assumptions are not true. Look at our partner Jaidah Automotive in Qatar. They have just invested a huge amount of money in a new showroom that reflects their commitment to deliver an outstanding shopping experience for Qatari customers. It is all about having the right partner.

What are your strategies to combat this competition, and are they a one-sizefits-all approach to the Middle East or is each market different? Let’s face it, customers are very different in every market of the Middle East and even within every market. Let’s take two different Tahoe customers for example: One could be a Qatari customer with a family of six people who uses his vehicle to visit his relatives in the village, the other one a German single expat in Dubai who loves the design and the powerful V8 engine that the Tahoe offers. On the surface they are both a Tahoe owner, but we are spending a lot of time talking to our customers to better understand the different needs and tailor the products accordingly. We take care of them. According to some critics of the industry, there also seems to be a variance in vehicle price across the Gulf Cooperation Council (GCC), apparently marked at times? We want to ensure you that this assumption is not true. If you compare the offers in detail, the specifications and options, you will find out that there is little to no price difference between GCC countries. And we are very transparent with that. Just access the dealer websites and you will agree. Some people also believe the high prices and often-reputed poor after-sales service of some brands in Qatar is due to the fact that many automotive brands are in the hands of a few agents and

“You have a lot of automotive enthusiasts here that go all out to possess the best product in the market. And people wanted to be treated accordingly,” Markus Leithe, managing director, Middle East Commercial Operations of GMC, told The Edge.

The Edge | 57

business insight | automotive

At 3300 square metres, Chevrolet’s new showroom at Jaidah Square in Doha is the automotive brand’s largest in the region.

In light of the fact that retail across the board in the region is apparently experiencing a slump in consumer spending, due to what analysts ascribe to lay-offs and low oil price, do you think the Qatar market is big enough to support such a large premise? Frankly I don’t see a slump in consumer spending. The Middle East region has traditionally been strong when it comes to interest in automobiles compared to many other places across the world. The automotive market is experiencing a lower growth rate at the moment than what we have seen during the last few years, but it will remain strong in future, especially for a brand such as Chevrolet. For example we have seen a 7.5 percent increase in Chevrolet passenger vehicles for 2015 versus 2014. What do you think of the Qatar Motor Show as a platform for launching or showcasing vehicles and having a presence at in relation to the Dubai version? How important is it to GMC and the automotive industry in the region? For Chevrolet, our focus in Qatar was the opening of the largest Chevrolet showroom in the region at Jaidah Automotive. With 58 | The Edge

an impressive space of 3300 square metres, this centre will showcase over 33 Chevrolet vehicles with a unique zoning concept. The new location comes as part of Jaidah Automotive’s ongoing expansion strategy. For GMC, the Qatar Motor Show was important for the brand that has been in the country for more than 60 years. GMC trucks and SUVs have been important in the development of the Qatar community, and we usually leverage the Qatar Motor Show as an opportunity to show our appreciation for our loyal customers. What about general trends? Self-driven cars and eco-friendly/hybrid vehicles are two trends that are gaining ground in the sector internationally. Will we see any developments here from your brands, or in the regional industry in general?

7.5%

The increase in the Middle East in Chevrolet passenger vehicle sales for 2015 versus 2014.

The automotive industry is going through big changes at the moment. Our General Motors president Dan Ammann stated very recently that we are anticipating more changes in the transportation industry in the next five years than the last 50 years. The Middle East has always been very open to innovation and technology, so I am convinced that in a few years from now the automotive landscape will look very different. In which segments of the market do you foresee the most growth in the sector in 2016 and why? The current Chevrolet line-up is one of the newest and most comprehensive in the Middle East covering every segment from stylish city cars through iconic sports cars to dependable SUVs and full-size pickups. We strongly believe in the Chevrolet brand in the Middle East and that we have the right product line-up and local knowledge to cater to our customer needs to continue our success in the region. We introduced four new vehicles at the Dubai International Motor Show, including the Camaro, Silverado, Malibu and Spark. In addition to those, we will be launching an additional five products by the end of 2016.

products & reviews

Reviews New Infiniti Q70 N

ew Infiniti Q70 sedan, offered by Saleh Al Hamad Al Mana Co., comes with new exterior, 3.7-litre V6 engine, and 363 Nm of torque. Infiniti Q70 is launched with the Excellence and Luxury Grade that features a premium body design. As an added alternative, the Sport Grade is available with the sport body design, which features a specially designed front bumper that gives an even lower and wider stance. The trapezoidal bumper intake and apron shape inspired from race car splitters give an athletic presence and bold impression. The car also offers improved interior with high-quality materials such as handcrafted wood accents

and custom leather appointments, as well as user-centered technologies. Important controls and switches are intuitively located so that the driver does not have to change driving posture to access them. The instrument panel consists of fine vision gauges and a seven-inch full colour vehicle information display, while the driver and front passengerâ&#x20AC;&#x2122;s seats are leather and feature 10-way power adjustment, including a twoway lumbar support. The new Q70 is equipped with the 3.7-litre V6 engine, rated at 329 hp @ 7000 rpm and 363 Nm of torque. The refined aluminium-alloy DOHC 24-valve engine is equipped with variable valve event and lift (VVEL) that combines hydraulic-

controlled variable valve timing and an electronically-controlled variable valve lift on the intake side to help improve performance and response. Also available is the 5.6-litre V8 engine that delivers 402 hp @ 6000 rpm and 550 Nm of torque. Infiniti Q70 also comes equipped with the latest in safety advancements that help drivers avoid a collision and further help protect the vehicle occupants if one occurs. It offers predictive forward collision warning that anticipates the speed and distance of two vehicles in front to ensure that in the event of an emergency, the vehicle comes to a safe stop. Other safety features such as intelligent cruise control and distance control are also available.

The Edge | 61

products & reviews

Read it:

Leaders Eat Last

If you read author Simon Sinek’s first book, the fairly self-explanatory, Start With Why, you might know that he is an adman turned inspirational author responsible for popularising a concept known as “golden circle”. This management tool uses a basic three ringed circle focusing on why an organisation does what it does, how it does it, and what the results of this effort should be. But perhaps you have not read his book, but you still may have heard of Sinek as he is purportedly a highly famous TED talk host and motivational speaker. However, perhaps you have in fact never heard of him, yet find yourself with the opportunity to read his second book: Leaders Eat Last: Why some teams pull together and others don’t. So, as is the point of reviews, should you open it and spend your precious time reading what this British author has to say? With the

ubiquity of such ‘inspirational’ self-help books at present in what seems to be a thriving industry, is what Sinek has to say, or in this case, write, worth reading? To start with, the premise is immediately intriguing. The book’s title takes its name from the fact that in the military, higher-ranking officers eat after the enlisted men or rank and file. The theory is that this type of self-sacrificing or at least humble behaviour from leaders in order to put the best interests of their minions and the company, ahead of their own self-enrichment or fulfilment is a recipe for success. Sinek takes the approach that effective leadership is just that, leading of teams and not managing. It is a timeless distinction, one that he examines in detail using case studies and examples from both the military and private sector to great effect. In fact, he goes back to the origins of homo sapiens to illustrate how humanity came to need and generate leaders, fast forwarding to the 20th century where he unpacks examples of both great and poor leadership throughout to drive his message home. Well paced and clearly thought out, Leaders Eat Last is at the very least a book you should consider. As Sinek points out, “Leadership is not a reason to do less; leadership is a responsibility to do more”. And if you fancy yourself as such a leader, then maybe reading this book is the next thing you should do. Available at Virgin Megastores in Doha.

Read it:

Thinking, Fast and Slow

While the above book is a fairly light and easy read, Thinking, Fast and Slow is a different prospect altogether. For one it is written by a Nobel Prize winner in economics and professor, American academic Daniel Kahnemann, and it is therefore much more dense and intense. The basic premise of this tome is that we can, and must, change the way we think; to think more clearly, less emotionally and to make better decisions. So instead of following the example of great leaders as Sinek exemplifies, in his introduction Kahnemann rather promotes concepts around self-reflection and self-discovery and the resultant improvement in objective cognitive thought as a potential path to success. To start this process, he opines, somewhat counterintuitively it seems for an academic, that we must first attune ourselves to gossip. Yes, gossip. Around the water cooler; for it is here opines Kahnemann, that we can recognise the mistakes of others and then compare them to our own. “The expectation of intelligent gossip is a powerful motive for serious self-criticism, more powerful than New Year’s resolutions to improve one’s decisionmaking at work and at home,” Kahnemann furthers. Inspired by the author’s obvious incredible intellect, observation and psychology, what follows is more than 400 pages of detail around

what he describes as two human operating systems of thought, one instinctive and largely involuntary and one that is far more measured and controlled. These are ostensibly widely used terms in the psychiatric field and building on several basic exercises the author refers to, and expands on these, concepts throughout Thinking, Fast and Slow. Therefore a light read this book is certainly not. However, the subject matter is quite engaging once you begin to grasp the concepts and the smoke and mirrors behind what Kahnemann calls the “illusion of validity”. You may well not be able to put it down once you have picked it up. Available at Virgin Megastores in Doha.

62 | The Edge

products & reviews

ROLEX WATCH

App Reviews

Rolex has introduced three new versions of the Oyster Perpetual Datejust Pearlmaster in a new 39 mm size. These 18-carat yellow or white gold models masterfully combine Rolex’s watchmaking art with the captivating natural charms of gold and coloured gemstones. These jewellery watches, which incorporate the new calibre 3235, are distinguished by a resplendent bezel set with a colour gradient of 48 baguette-cut sapphires. The three models come with coloured dials featuring a diamond-set six and nine, or in versions with fully-paved dials and diamond-set bracelets. Its Oyster case is also guaranteed waterproof to a depth of 100 metres (330 feet).

By M. Iqbal

Airdroid (Android)

This app allows you to go truly wireless, letting you transfer files between your phone and the computer via your home’s WiFi network. It also lets you control large aspects of your phone right from your computer screen. You can send text messages, edit contact details and even respond to mobile messages received on apps such as Facebook Messenger and WhatsApp, among others.

CANON PRINTERS Office Lens (iOS, Android) Canon recently unveiled three new printers – the Pixma G1400, Pixma G2400 and Pixma G3400 – all capable of printing up to 7000 colour and 6000 black pages from a single set of ink bottles. Featuring Canon’s brand new genuine Continuous Ink Supply System (CISS), each printer uses refillable ink tanks to offer volume printing that significantly reduces ongoing ink. The Pixma G1400 is a single function printer, while the Pixma G2400 and Pixma G3400 are all-in-one printers offering print, scan and copy functionalities. Each printer incorporates a durable fine print head system for high-quality prints at fast speeds, as well as technology that stops air penetrating the ink feeding tubes.

MONTBLANC PEN Montblanc has recently unveiled two high-end limited edition writing instruments, Boheme Skeleton Papillon and Etoile Mystérieuse, for the first time in the Middle East. Boheme Skeleton Papillon fountain pen is a one-of-a-kind artisan piece crafted in solid red and white gold, and adorned with 1402 brilliant cut diamonds totalling 7.21 carats and 37 sapphires. Whereas, Etoile Mystérieuse fountain pen continues the Maison’s heritage of exceptional craftsmanship in writing instruments. The elegant sterling silver writing instrument in black precious lacquer and crafted into a simple, yet elegant, curved silhouette includes 60 brilliant diamonds cascading down the barrel.

Are you looking to turn your smartphone into a scanner? This app from Microsoft promises to do just that. The documents you ‘scan’ with the app can be converted to PDF, Word and PowerPoint files. The files can even be saved to OneNote and OneDrive. The app also promises to automatically recognise text and numbers in the pictures, enabling searches throughout the files and making editing them easier. Office Lens also makes it easier for business users to digitise their physical business cards and save them to their address books and in OneNote.

Hooks (iOS, Android) Hooks promises to make your life easier, by pushing notifications about things you are interested in directly to your lockscreen. For instance, if you want to be notified instantly about the latest episode of your favourite TV show when it gets released, Hooks will automatically do so. It also gives live scores for your favourite teams. As the app is not specifically geared to the Gulf region, some of the information (such as the release date of a particular film) may not be pertinent to Qatar.

The Edge | 63

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