The Edge April Issue 2016 by Firefly Communications

contents

April 2016

Read more of the edge at www.theedge.me

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40 An artist’s impression of Doha Festival City project that will have 38,000 sqm of space dedicated to entertainment. Scheduled to open in September, the project will feature both indoor and outdoor attractions, and will soon be home to Qatar’s first Snow Park. “We have seen a number of lawyers and doctors who have received good success, but within the engineering and architectural industry, there aren’t many in Qatar,” says Ibrahim Mohamed Jaidah, CEO, AEB.

cover story 40

Qatar’s diversified population continues to STATE OF grow, but the BOREDOM? country still lacks sufficient recreational facilities - both for locals and for people who visit Qatar for leisure. Syed PLUS: Ameen Kader analyses the Qatari market, comparing it with its regional neighbours, and concludes that Qatar’s approach to leisure and entertainment is very much rooted in tradition and authenticity, balanced with modern convenience.

features

Business Interview: Qatar: An interesting yet challenging market for Uber 34

Exclusive Interview: Christopher Free, Uber GM, Qatar & UAE, on challenging markets

100% Qatari

- April 2016

Vol. 8 No. 4

- QATAR’S BUSINESS MAGAZINE - Vol. 8 No. 4 - Issue 78 - April 2016

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Given its size and diversity, Africa has, for long, been an attractive investment destination for the GCC. A 2015 research by Economist Intelligence Unit has pointed out that the current trend is more towards foreign direct investment. The Edge’s Aparajita Mukherjee analyses the investment trends.

sectors

Are there enough entertainment choices in Doha and beyond? The Edge investigates

Investing in reputation Qatar’s renewables challenges Cost reductions in labour housing Optimism in Qatar insurance sector

Feature Story: Defining the paradigm for GCC investments in Africa 50

Christopher Free, Uber general manager for Qatar and the United Arab Emirates, speaks to The Edge’s Aparajita Mukherjee about the business and financial models of the company, and what makes this region stand out, in his opinion.

Business Interview: Making a global impression 46 Ibrahim Mohamed Jaidah has come a long way since his architectural firm Arab Engineering Bureau (AEB) was set up. In an exclusive interview with Syed Ameen Kader, AEB’s chief architect and CEO, Jaidah shares his journey on what it takes to become a respected name.

Qatar Central Bank (QCB) had been issuing sukuks on a quarterly basis in 2013, followed by a massive issuance in January 2014, amounting to QAR11 billion. Pictured here is QCB governor HE Sheikh Abdullah bin Saud Al Thani. (Image Arabian Eye/Reuters)

Finance and Markets 21

Qatar is a unique market within the Gulf Cooperation Council with an economy that has been rapidly growing on the back of natural gas. This, added to the diversification efforts, can together support the growth in insurance companies and takaful operators, writes Blake Goud. The Edge | 3

contents

Al Khaliji VHP.pdf

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Energy & Sustainability 23 IRENA holds that uptake in renewable energy has so far fallen short of potential in the GCC.

A paper published by the International Renewable Energy Agency (IRENA) in Q1 2016, has made a strong case for why GCC countries should increase efforts to produce clean energy, writes The Edge’s executive editor Miles Masterson.

Real Estate & Construction 27

The government’s recent move to reallocate 23 plots of land to private companies for developing temporary labour accommodation is not only expected to improve the living conditions of workers but also reduce the cost of development, writes Nick Witty.

Tech & Communications 29

Traditional enterprise resource planning systems are proving inflexible, time consuming, and costly to change. As a result, more mid-market finance and insurance companies are deciding that a hybrid approach is the optimum way forward, writes Monzer Tohme.

Business Insight 55

In an exclusive interview with The Edge, Milvin George, managing director, Officine Panerai, Richemont Group, Middle East, shares the company’s expansion strategy and growth potential of the GCC market. Speaking exclusively with The Edge, Joanne Luce, managing director of Aqua Group, shares what it takes to make resources work and achieve long-term growth and value.

“Family businesses are arguably the fastest-growing investment vehicles in the world today,” Joanne Luce, managing director, Aqua Group, told The Edge.

regulars From the Editor 6 Photo of the Month Business News 10 Qatar Perspectives Products 60 4 | The Edge

8 16

editor’s letter March 2016 was a volatile month, with both tragedy and hope occurring arguably in equal measure. Top of mind as we put the finishing touches to The Edge’s April edition was the latest bombing incident, responsibility claimed by ISIS, in Brussels, Belgium. Once again, the fragile sanctity of the modern world has been disrupted by terror and the wilful murder of innocent people. Cue the condemnations and commiserations, mostly deserved and necessary of course to help people deal with their shock and grief and quell their anger, but also the demagoguery, particularly, infamously from some of the current American presidential election candidates. Insert here then the hollow but indiscriminate soundbytes slating Islam and refugees and calls for a return to waterboarding and other forms of torture, closed borders, patrolling of Muslim areas and other reactionary measures in the United States and Western Europe, that if not as extreme as suicide bombings or random killings, certainly do not make the situation any better. The Brussels bombings, and the November 2015 terrorist attacks and Charlie Hebdo killings in France earlier that year, as well as the shootings in California in December were all naturally unforgiveable and should not be condoned or forgotten. But let us not ignore, as the Western media and my Facebook feed seem to do from time to time, in the past three months there have been more than 150 terrorist attacks in the world, in March alone there were also multiple bomb attacks, including in Turkey and Somalia. Where will it end? There cannot be a man, woman or child on this planet who could predict that, with many different factors at play. But at The Edge, our hearts must go out to the victims and loved ones of all those who have suffered loss or injury from any of these recent attacks, and hope that our collective humanity will triumph over the nefarious intent that seems to have captured so many of our fellow men and women, and has led them to perpetrate such heinous acts in the name of their beliefs, political, religious or otherwise. These people must not triumph, the social, economic and human consequences for all

of us – and whether we reside here in the Middle East, or in Africa, Europe, the Americas or Asia, we are all affected in some way – are simply too great. The cynic might view this news or indeed any news cycle recently with an air of resignation that things can only get worse as they don’t seem to be getting any better, but hopefully such negative proclivities will not win out and good men will not stand by and allow this kind of evil to prevail. There is always hope, no matter how tenuous. Point in case, in March, Syria heralded the fifth anniversary of that country’s civil war, a relentless and heartbreaking conflict that, no matter where you might stand in support from the Assad government to the Free Syria movement, you cannot deny has torn a once-thriving country into pieces and has resulted in the heartbreaking deaths of hundreds of thousands of people, many of them children and most completely innocent. Yet here, at least at the time of writing, a real if fragile ceasefire – faltering due to some individual incidents, but mostly holding in late March – had been brokered in Syria and for the first time since those fateful first protests in the streets of Daraa, Damascus and Aleppo in January 2011. For the first time in half a decade of continual conflict, children could play mostly unscathed in the streets of these and other Syrian cities and antiAssad demonstrators took to the same streets for the first time to voice their unquelled discontent at their country’s political status quo. Whether anything will emerge from this tentative break in hostilities towards a permanent solution for this beleaguered Arab state is anyone’s guess, but at least it offered a glimmer of hope in an otherwise never-ending spiral of aggression, destruction and death, that underneath it all that positive human spirit, our shared humanity is emerging to find a solution. Let us all hope that it does win the day in Syria and spreads, across the Middle East and the rest of the world and a new movement squashes this violent extremism and relentless anger that really, truly threatens to engulf us all. For the sake of our children, we collectively should not tolerate this stupid, violent behaviour for very much longer.

In the past three months, there have been more than Miles Masterson 150 terrorist attacks in the world. Executive Editor 6 | The Edge

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8 | The Edge

Syrian smiles

photo of the month

Down a side street in a suburb of Damascus, Syria ravaged by conflict, children smile for the camera in mid-March, as the fragile ceasefire agreement between the Syrian Army and the rebels controlling their district – which came into effect on February 27, 2016 – holds. At the time of writing, representatives of stakeholders in the Syrian civil war, which marked its fifth year this March, were conducting talks in Geneva, Switzerland, under the guidance of United Nations’ special envoy Stefan de Mistura. (Photo by Valery Sharifulin/TASS via Getty Images) The Edge | 9

news

business news

Freezing oil production

main story

With Doha the setting for a gathering of many of the world’s key oil producers this April, Qatar has taken centre stage in a major recent alignment between Organization of Petroleum Exporting Countries (OPEC) and non-OPEC hydrocarbons giants. Their meeting here, to discuss the next steps in a freeze in production, has also helped boost oil prices, which had already been shifting gradually upwards since mid-February, writes Oliver Cornock. This was when Saudi Arabia, Russia, Qatar and Venezuela first announced an oil output freeze at January 2016 levels, a move that finally seems to have helped put a floor under the price of crude – at least for now. Yet there are still many questions over just how much of an impact this move may have, as the global hydrocarbons market continues to undergo some of its most important structural changes in decades. Meanwhile, the world continues to see some significant surpluses in oil production, with the likelihood that these may increase in the months ahead. Yet the very fact that OPEC and non-OPEC members are gathering to discuss a freeze of any kind may still be an important first step in the reassertion of their grip on the market, with significant medium- to long-term consequences for Qatar. When Russia and Saudi Arabia, the world’s top two oil producers, which each pump more than 10 million barrels per day (bpd), first announced the freeze in February, Goldman Sachs had been predicting less than USD20 (QAR72.8) a barrel as the future pricing floor. At the same time, estimates of the global surplus in oil had just been raised to some 1.75 million bpd, up from 1.5 million bpd in January, while the average barrel prices stood at around

While for now, Qatar and other hydrocarbons producing countries still have to tighten their belts, the Doha meeting could potentially provide some future easing. 10 | The Edge

USD30 (QAR109.2). That these lows have been sustained – the price is now some 70 percent lower than its 2014 high – has meant major cuts in revenues from Brunei Darussalam to Bahrain and Nigeria. Yet throughout the recent freefall, Saudi Arabia and other oil producers have continued to keep production high, for reasons connected to seeing off new global competition – from shale and other new sources in particular. Thus, the decision in February to freeze represents a major about-turn for this policy. Since then, the oil price has been creeping up again, with benchmark Brent Crude at USD40.33 (QAR146.8) a barrel by March 16. That was also the day some 15 OPEC and non-OPEC members, representing 73 percent of global oil output, announced they would attend the April 17 Doha meeting.

Remaining questions

There are, however, still some question marks over the impact all this may have. First, freezing oil output at January levels means freezing it at a level of supply that is still significantly above demand. When the large current global oil stockpiles are factored in, too, production could be frozen for some time before making any significant dent in global surpluses – particularly with economic activity in the worldwide slowdown scenario. Secondly, there is the world’s seventh largest oil producer – Iran – as a factor. At the time of writing, this country was not going to be among those in Doha in April.

Real GDP growth by sector

(% change, year-on-year) 20% 15% 10% 5%

Non-Hydrocarbon

Hydrocarbon

Total

13.4%

4.9% 4.6% 4.0%

2.3%

4.4% 3.8%

0% -5%

2011 2012 2013 2014 Q115 Q215 Q315 Sources: MDPS, Haver Analytics and QNB Economics

Indeed, Tehran has expressed a wish to hike its output as it reenters global markets with the lifting of sanctions. According to OPEC, the Iranians have been raising output by around 245,000 bpd over the last two months. If Iran is not included in the deal, the impact of a production freeze would clearly be weakened, although Saudi Arabia has declared it is willing to go ahead with the move, with or without the Iranians – Riyadh’s main geopolitical rival. Running counter to this, however, in terms of overall oil prices, are some other factors that may cut global output despite any deals – or lack of them. First, to counter declining revenue, many of the 15 countries likely to be in Doha have been hiking output in recent times, with their 2015 levels increasingly unsustainable. The combined output of the 15 countries will likely fall some 200,000 bpd in 2016 due to cut backs in investment, declining resources and lacklustre demand, according to the International Energy Agency. Freezing output at the January 2016 level may indeed already be beyond some of these countries’ current industries, with an output decline likely to gather speed as 2016 plays out, reducing supply and stockpiles. Second, there are the wider geopolitical implications of the 15 countries managing to reach an agreement. If a deal can be negotiated, this could be a major first step in the reintroduction of supply controls in the market, with the 15 states able to exercise some important influence over future prices. While for now, then, Qatar and other hydrocarbons producing countries still have to tighten their belts, the Doha meeting could potentially provide some future easing.

news

business quotes “If they are interested, Qatar Airways will be very interested.”

Qatari Airways CEO Akbar Al Baker discussing whether or not the Doha-based carrier might purchase a stake in Indian airline IndiGo, at a recent aviation event. Al Baker revealed that his company had in the past attempted to discuss a deal with the South Asian airline but this had not yet materialised for various reasons. “We did at a time show interest in IndiGo. But unfortunately because of the rules, as an airline, we couldn’t go and invest in an [airline’s] IPO directly. We had to do it with our parent company, and our parent organisation, which is our sovereign fund, and to do that, we needed more time,” said Al Baker, who also commented that he felt his country had been unfairly treated by India in terms of bilateral air traffic rights. “We have been asking the Indian government to open talks with Qatar for the last seven years,” Al Baker said.

“We’ll watch how the economy behaves.” United States Federal Reserve Bank chairwoman Janet L. Yellen referring to the decision by her organisation to not raise interest rates. For months analysts have expected the Fed, as the US central bank is commonly known, to increase its benchmark rate, which would have repercussions not only in that country, but worldwide. However, as economic growth in the US remains sluggish and outlooks are increasingly pessimistic, its committee voted to keep the rate between 0.25 and 0.5 percent. Yellen added that it remained likely that this may be increased at some point in 2017, it very much depended on the market. ”We’ll watch how the economy behaves,” she said. “We are prepared to respond if things transpire differently.”

Oliver Cornock is the managing editor, Middle East, Oxford Business Group. The Edge | 11

news

business in quotes

“Productivity growth across the West is too low.”

Business News in Brief 3rd Entrepreneurship in Economic Development Forum underscores importance of academic programmes

A session in progress at the 3rd Entrepreneurship in Economic Development Forum held recently.

United Kingdom chancellor George Osborne explaining tax changes in the new British budget, which comprises comprehensive reform of the country’s tax system, including higher rates for larger businesses and lower rates for smaller enterprises in order to boost stagnant economic growth. Osborne described it as a “tax system that says to the world: we’re open for business. A government that’s on your side”. Among many others, the new regime also included a provision or ‘sugar tax’ to increase taxes on soft drinks. “I am not prepared to look back at my time here in this parliament doing this job,” said Osborne, “and say to my children’s generation, ‘I’m sorry, we knew there was a problem with sugary drinks, we knew it caused disease, but we ducked the difficult decisions.’”

“We can employ innovative means.” While outlining what his government is planning in order to ensure continued growth of 6.5 to 6.7 percent in the country, Chinese Premier Li Keqiang justified the use of macroeconomic regulation to do so. “A dysfunctional real economy represents the biggest risk to financial markets,” he said, adding, “Reform and development aren’t contradictory. We should be able to stimulate market vitality and support economic development via structural reforms. We are confident that as long as we continue to reform and open up. China’s economy will not suffer a hard landing. Economic productivity is being held back by unnecessary government interference and we need to create a more level playing field and more oversight.”

12 | The Edge

Public and private sector leaders as well as renowned academicians from the region and beyond emphasised the need to further create relevant academic programmes and conducive government policies that will continue to encourage the development of entrepreneurial skills and capabilities among aspiring business leaders in the region. Organised by Qatar University and Qatar Development Bank, the event took place at the Sheraton Doha Resort and Convention Hotel in Qatar on March 7 and 8, 2016. It was held under the Patronage of HE Sheikh Abdullah bin Nasser bin Khalifa Al Thani, the Prime Minister of the State of Qatar and inaugurated by HE Sheikh Ahmed Bin Jassim Al Thani, Minister of Economy and Trade. “The academic community aims to provide the necessary knowledge and skills required for the success of tomorrow’s business leaders,” said Dr. Khalid Shams AbdelKader, associate dean of the College of Business and Economics at Qatar University. “Through open lines of communication with the business community and government authorities, we can effectively integrate the valuable lessons shared by successful entrepreneurs as well as existing economic and business policies into our curriculum on entrepreneurship,” he added.

Qatar, Egypt and UAE top drivers of MENA’s USD105 billion M&A activity between 2010 and 2015 Mergers and Acquisitions (M&A) activity in the Middle East and North Africa (MENA) region has remained robust during the current decade, barring 2015 when both the number and value of deals significantly declined, revealed a Al Masah Capital Limited report, MENA M&A Industry. During the period 2010 to 2015, the region witnessed M&A deals worth USD105.5 billion (QAR384 billion) with Gulf Cooperation Council (GCC)-based companies leading the way in terms of volume and value year on year, peaking at an unprecedented 88.1 percent of the total value of deals in 2015. According to the report, Qatar, Egypt and the United Arab Emirates with deals worth USD22.37 billion (QAR81.4 billion), USD21.72 billion (QAR79 billion) and USD21.29 billion (QAR77.5 billion), respectively, accounting for 62 percent of the total deal value during the period, were the most preferred investment destinations in the MENA region. Furthermore, real estate and construction accounted for 239 deals worth USD29.51 billion (QAR107.4 billion) and financial services and banking with 346 deals worth USD23.04 billion (QAR83.9 billion).

business in brief Qatar residential rentals increased seven percent in 2015 Despite the backdrop of on-going economic uncertainty and a sustained period of low oil price, residential rental levels in Qatar continued to expand unabated during 2015, rising by approximately seven percent year on year, according to the H2 2015 Qatar MarketView by global real estate consultancy firm CBRE. “Albeit, this was down from the 14 percent annual growth achieved during the same period in 2014. Rental rate growth during the second half of the year was around five percent, although growth in the final quarter was measured at just one percent. Smaller apartment units, particularly those within central locations, remained in high demand, although rental growth was actually most evident for secondary and more affordable locations,” said Mat Green, head of Research & Consulting UAE, CBRE Middle East. “There has been increasing evidence of tenant relocations and downsizing, with some occupiers moving into smaller units or choosing more affordable accommodation in less prominent areas of the city,” added Green. Housing options in locations such as Al Sadd, West Bay Lagoon and The PearlQatar continue to attract solid demand from higher income groups of expatriates. Typical monthly rents for one bedroom and two bedroom apartments in Al Sadd range from QAR8000 to QAR14,000 per month, while West Bay Lagoon and The Pearl-Qatar range from QAR14,000 to QAR20,000 per month. From a total housing stock of roughly 180,000 units during 2010, Doha’s total housing stock has grown to reach in excess of 226,500 units at the end of 2015, translating into a circa five percent annual growth rate. The MarketView highlights that a significant majority (80 percent) of future supply will cater to upper-mid to high-income segments, with estimated rental levels in excess of QAR7500/month, meaning a minimum household monthly income of around QRA25,000/month would be required.

news

EY MENA Tax Conference tackles key challenges facing taxpayers in MENA EY hosted the annual Middle East and North Africa (MENA) Tax Conference at the St. Regis, Dubai, featuring panel sessions on the key challenges facing taxpayers in the MENA at present. today. The conference brought together C-suite executives from leading multinational companies to provide the latest updates on the changing tax landscape in MENA. Sherif El Kilany, MENA tax leader, EY, said, “The tax landscape across the MENA region is currently going through major changes. GCC governments are now starting to cut subsidies and introduce taxes to help combat the deficit created by the lower oil prices. Changes in the global tax landscape are also expected to have a knock-on effect on MENA countries. Governments across the world have long been concerned about the shifting of profits into low-tax jurisdictions and corresponding reduction in tax in higher-tax jurisdictions. The recent recommendations by the Organisation for Economic Cooperation and Development (OECD), that address different aspects of base erosion and profit shifting are likely to impact countries in MENA that are typically known for having low taxes.” The EY MENA

Sherif El Kilany, MENA tax leader, EY, said, “The tax landscape across the MENA region is currently going through major changes. GCC governments are now starting to cut subsidies and introduce taxes to help combat the deficit created by the lower oil prices.”

Tax Conference is held in major cities across the world including Dubai, London, Houston, Tokyo and Seoul, with the aim of keeping companies that operate in MENA updated with key tax developments. GCC Government officials as of January 1, 2018 have now confirmed the introduction date for VAT. The MENA tax conference featured a session on preparing for VAT in the GCC, providing status updates on the tax implementation and the actions that companies in the region need to take.

Qatar achieves desalination breakthrough with first renewable energy wind farm Monsson Group, a leading company in renewable energy across the world, officially launched its entry into the Qatari market at a conference held at the InterContinental Doha-The City, recently. At the same time, the conference announced the company’s pilot project and first of its kind in Qatar, the Reverse Osmosis Water Desalination Plant powered by renewable energy. The event was well attended by international experts in the field of energy and the media. Among the subjects of discussion was the importance of renewable energy in Qatar and what it means to the country in the future. The distinguished speakers included Dr. Dallia Ali, chair for R&D Monsson Middle East and associate professor at Hamad Bin Khalifa University Qatar; Ewa Polano, ambassador of Sweden to Qatar; Costin Lupu, director of Monsson Middle East & Africa; Bader Al Sada and Ali Hussain Al Sada, beneficiaries of the pilot

A section of the audience at the conference held by the Monsson Group, announcing its entry into the Qatari marketplace.

project, among others. The Qatari beneficiary of the project Ali Hussain Ali Al Sada explained, “The reverse osmosis process powered by renewable energy is a ground-breaking development in Qatar offering fresh desalinated water with very low energy cost and consumption. We believe this is the way forward and the perfect solution for addressing increasing energy demands without tapping into precious fossil fuel reserves.” The Edge | 13

news

events

Business events calendar April - May 2016 April Doha OPEC meeting

Saudi Arabia’s Oil Minister Ali Al Naimi and Qatar’s Energy Minister Dr. Mohammad bin Saleh Al Sada attend a joint news conference at a meeting in Doha, Qatar in February. Another meeting of OPEC and key non-OPEC producer countries will be held in Doha on April 17. (Image Arabian Eye/Corbis)

HE the Minister of Energy and Industry and current President of the Organization of the Petroleum Exporting Countries (OPEC) Dr. Mohammed Bin Saleh Al Sada announced in March a meeting of OPEC and key non-OPEC producer countries to be held in Doha held on April 17. According to the Ministry of Energy and Industry, this comes as a follow-up to the meeting that was held in February in Doha between Qatar, Saudi Arabia, Russia and Venezuela at which they proposed an accord to freeze oil output at January 2016 levels and called on other producers to do so. To date, around 15 OPEC and non-OPEC producers, accounting for about 73 percent of global oil output, support this initiative. Qatar, as the president of OPEC, has been coordinating with OPEC and non-OPEC oil producer countries to gather more support for the Doha initiative to stabilise the market. The proposal is being increasingly supported by both OPEC and non-OPEC countries including Saudi Arabia and Russia.

May 9-12 Project Qatar

Under the patronage of the Qatari government and the support of HE Sheikh Abdullah bin Nasser bin Khalifa Al Thani, the Prime Minister and the Minister of Interior, IFP Qatar will once again host Project Qatar 2016, the 13th International Construction Technology & Building Materials Exhibition. To ensure the most favourable exhibition experience, and to accommodate the The 13th Project Qatar, which will be organised from May 9 to 12, is one of the country’s largest exponentially growing needs of the exhibition the events has decided to move its venue this year to for both visitors and exhibitors, Project Qatar the Doha Exhibition and Convention Centre (DECC). has moved its venue this year. The exhibition, which will be held from May 9 to 12, will be hosted by the Doha Exhibition and Convention Centre (DECC). The DECC is a pillar-free venue with a modular wall system, high-tech meeting and conference rooms, a VIP hosting suite and underground parking for 3000 cars. The 13th International Construction Technology and Building Materials Exhibition will be held concurrently with Qatar Stone Tech 2015, the fifth International Stone and Stone Technology Show, Heavy Max 2016. 14 | The Edge

May 23 ICC Banking Workshop Called ‘Documentary Credits in Today’s Challenging Environment- by Gary Collyer’, this workshop looks back at the past 12-18 months to highlight the issues, actions and decisions that have occurred in that time. The world of trade finance is continually evolving and, for banks, it is no longer a simple process of document examination and handling. For corporates, the need for compliant documents to be presented is ever more critical. This workshop will look at best practices that should be adopted when issuing, advising, confirming, amending, presenting and examining documents, and honouring or refusing documents. Its contents will be of interest to bankers (trade finance, risk management, credit administration, product, operations, customer services, legal and compliance), importers and exporters, ship owners, logistics and insurance personnel, lawyers and academics.

Events Listing April / May 11-12 April

Arab Future Cities Summit 2016

13-16 April

Qatar Pool & Spa

18-19 April

Smart Parking Qatar

26-28 April

Cityscape Qatar

16-19 May

World Stadium Congress 2016

18-19 May

International Conference on Economics and Business Management (ICEBM)

qatar perspectives

Investing in reputation throughout the economic cycle The world over, in times of economic constraint, the temptation may be for business leaders to see reputation as an operating cost to be struck through with a red line, rather than an asset and source of value creation to continue to nurture. Reputation is one of the determinants of short- and long-term business success and therefore a valuable intangible asset, writes Neil Daugherty. As I write this article, the comedian Simon Brodkin has just ambushed Volkswagen’s presentation at the Geneva motor show. Brodkin was last seen in Switzerland throwing a fistful of dollars at Sepp Blatter. Whether you are FIFA or Volkswagen (VW), nowadays you can chart the nadir of your corporate reputation as when you become the butt of Brodkin’s practical jokes. You would forgive VW’s investors for failing to see the funny side – VW’s share price is down by more than 50 percent in the past year, since its emissions scandal. FIFA, with its own reputational challenges, has admitted it is USD550 million (QAR1.8 billion) behind its revenue targets for 2015 to 2018. All of this plays out at a time when oil price is in the band of USD37 (QAR134.7) to USD40 (QAR149.2) – almost 70 percent down on the highs of summer 2014. So in a world of economic challenges, what price does reputation command? The world over, in times of economic constraint, the temptation may be for business leaders to see reputation as an operating cost rather than an asset and source of value creation to continue to nurture. It is one of the determinants of short- and long-term business success and therefore a valuable intangible asset, enhancing a business’s ability to execute its strategy within a desired timescale and cost range. Prolonged periods of prosperity can be deceptive: even businesses that are listing ships rise with the prevailing economic tide. By contrast, periods of economic downturn accelerate natural selection in business – sorting great businesses from the merely good, and good businesses from the average or failing. As chief executive officers and chief financial officers, with their consultants 16 | The Edge

and advisers prepare to take a red pen to their balance sheets, the experience of past recessions demonstrates that those that treat reputation as an asset rather than a liability (or operating cost) will emerge stronger. Those companies that tend to their brands, and employer brand, during a downturn just as they manage their tangible assets, can derive competitive advantage during the subsequent economic upswing. Proprietary research from Blue Rubicon and Oxford Metrica has looked at the performance, stretching over a period of 10 years, of listed businesses which had experienced some form of major correction (defined as a swing of five percent or more) to their share price related to a reputational shock. Once market noise (the effect of the rising and falling tide of the market) had been adjusted for, this research showed those that had invested in their reputations traded at an eight percent premium to their peers. Apply this ‘reputation premium’ to Alphabet/Google, the world’s largest listed business, and

Neil Daugherty is managing director of Blue Rubicon Qatar.

this represents USD40 billion (QAR145.6 billion) of shareholder value. The best business leaders prove their worth in times of economic stress. Those who ignore the worth of their reputations during a prolonged economic downturn, risk becoming either a mere footnote to history, or the punchline to a bad joke.

Those companies that tend to their brands, and employer brand, during a downturn just as they manage their tangible assets, can derive competitive advantage during the subsequent economic upswing.

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finance & markets

Qatari insurance market: Bright outlook despite depressed hydrocarbon prices Qatar is a unique market within the Gulf Cooperation Council (GCC) with an economy that has been rapidly growing on the back of natural gas. With diversification efforts added to this, the economy can support the growth in insurance companies and takaful operators, writes Blake Goud.

his is not to say that the drop in energy prices is not having an effect on the insurance and the takaful segment. Qatar represented USD34 billion (QAR123.8 billion) of the USD197 billion (QAR717 billion) in projects tendered across the GCC in 2015. This quantum of projects tendered, which represents a record amount, will continue to be supportive for insurance companies in 2016 since many projects will be completed only over a multi-year process. The bigger challenge to Qatarâ&#x20AC;&#x2122;s insurers

(including its takaful operators) comes from their dependence on investment income to offset high combined ratios, which is a measure of profitability used by an insurance company to indicate how well it is performing in its daily operations. The combined ratio is calculated by taking the sum of incurred losses and expenses and then dividing them by earned premium. The ratio is typically expressed as a percentage. For the insurers and takaful operators included in the Finance Forward Middle East

35%

The percentage decline of the Qatar Exchange All Share Index of equities during 2015. The Edge | 19

sectors | finance & markets

Insurance Outlook Report, the combined ratio for Qatari companies was 115 percent, compared to an operating ratio of 71 percent. Taken together, these highlight a competitive market for underwriting (a combined ratio above 100 percent indicates that underwriting income is not sufficient to cover the insurersâ&#x20AC;&#x2122; underwriting and operating expenses) within the backdrop of a strong investment market. The survey conducted for the report did not ask specifically about the asset allocation of insurers (other studies have found investments to be concentrated in real estate and equities), but it did ask about anticipated changes in asset class allocations. We found that the most frequent asset class that insurance companies would reduce was real estate exposure, and that they would increase their investment grade and emerging market fixed income allocations, as the macroeconomic backdrop slows and the value of real estate and equities fall. Real estate firm DTZ saw the potential for rising vacancy in commercial real estate, in particular, as a source of price weakness. In addition, the Qatar Exchange All Share Index of equities fell from over 3600 to under 2300 (or 35 percent) during 2015 and has rebounded to regain about 40 percent of the lost value so far in 2016. The drop in the two largest asset classes for many insurers is likely to have an effect, but a relatively small one on the 2016 prospects because the equity markets have stopped falling, for the time being, and because many insurers remain very well capitalised. It will be painful, but not overwhelmingly so, for insurers to rebalance their asset allocations. If they have held some assets for many years, they will likely be able to realise some profits, although not as many as if they sold before energy prices fell.

Reinvestment of proceeds

The challenge for these insurers and, in particular, for takaful operators, will be how to reinvest the proceeds from their real estate and equity holdings in fixed income. This is more of an issue for takaful operators than for insurers because a more limited amount of local currency sukuk is issued and it is in high demand from both insurers and banks. Qatar Central Bank (QCB) had been issuing sukuks on a quarterly basis in 2013, followed by a massive issuance in January 2014, amounting to QAR11 billion. However, 20 | The Edge

The challenge for these insurers and, in particular, for takaful operators, will be how to reinvest the proceeds from their real estate and equity holdings in fixed income. this dried up with relatively a much smaller issuance in April 2014, followed by a hiatus until the final four months of 2015 when a combined QAR8 billion volume tranche was issued. Future issuance trends from QCB will determine the ability of insurers to diversify their assets. The outlook for Qatarâ&#x20AC;&#x2122;s insurers and takaful operators remains bright even if energy prices remain low. The healthy

capitalisation of most insurers will allow them to survive both the highly competitive market where their underwriting profitability will remain squeezed. It will also allow them to better weather a shift towards a more balanced investment approach compared to the equity and real estate heavy allocation today. The unique challenge facing takaful operators is the inconsistent supply of sovereign (local currency-denominated) sukuk that provides them with a lucrative yield and lower risk investment to reduce their vulnerability they have today from a significant reliance on investment income to offset underwriting losses.

Blake Goud is chief research officer at Middle East Global Advisors.

Latest QNB group growth forecasts (Real GDP growth rates, % change) 12 10 8 China

EMs SSA US GCC

4 2

Euro Area

0 2010

2011

2012

2013

2014

-2 Sources: IMF estimates and QNB Economics forecasts

2015e 2016f

energy & sustainability Low oil price must inspire increased focus on renewable energy in GCC: IRENA report

IRENA holds that uptake in renewable energy has so far fallen short of potential in the GCC. “This can be attributed to a range of factors, including institutional inertia faced with new markets, clarity in institutional roles and responsibilities, and lack of dedicated policies and regulations,” states its recent report Renewable Energy Market Analysis: The GCC Region.

Renewable Energy Market Analysis: The GCC Region, a paper published by the International Renewable Energy Agency (IRENA) in Q1 2016, has made a strong case for why Gulf Cooperation Council (GCC) countries should increase efforts to produce clean energy, writes The Edge’s executive editor Miles Masterson.

ccording to the report, hydrocarbon exports, in the form of crude oil, petroleum products and other liquids and natural gas, were the main source of government budget revenues in the GCC, constituting almost 80 percent of total revenue in 2013, for example. (Saudi Arabia is the region’s largest exporter of crude, with almost 19 percent of global exports in 2013. Qatar is the largest exporter of natural gas, at almost 12 percent of global exports in 2013.) This has of course spurred phenomenal economic growth in the region and concomitant energy consumption, which rose during the 2000s at around five percent per year, a higher rate than India, China and Brazil, for example. Qatar’s residential electricity demand alone grew at an average rate of 17 percent per year over the 2000s and early 2010s. An increased need for energy, along with the slump in the oil price and its effect on state revenues, has highlighted the urgency

for the region’s countries to ensure their renewable energy targets are met, if that had not exceeded. Additional factors outlined by IRENA that contribute to this imperative are increased job potential and mitigating vulnerability to climate change. Growing populations and an increasing need to create employment opportunities is another reason, with IRENA estimating that achieving GCC renewable energy targets and plans could create an average of 140,000 direct jobs every year. “If global temperatures continue to rise, the region will experience an above average increase in temperatures and decrease in precipitation. This would mean a rise in demand for air conditioning and desalination,” furthers the report, which also states, “in line with the countries’ Intended Nationally Determined Contributions (INDC) submissions to the Paris climate conference (COP21), carbon emissions can be reduced by a cumulative total of around one

gigatonne (Gt) by 2030, resulting in an eight percent reduction in the region’s per capita carbon footprint.” The concurrent decrease in reliance on traditional hydrocarbon energy resources would also result in a 16 percent reduction in water usage in the power sector, and of course could result in the region reducing 2.5 billion barrels of oil equivalent (20152030), IRENA estimates leading to overall savings of USD55 billion (QAR200 billion) to USD87 billion (QAR317 billion), depending on the energy prices at the time, for the GCC.

17%

Qatar’s residential electricity demand alone grew at an average rate of 17 percent per year over the 2000s and early 2010s according to an IRENA report. The Edge | 21

sectors | energy & sustainability

Nevertheless the agency holds, efforts have thus far fallen short of potential in the region. “This can be attributed to a range of factors, including institutional inertia faced with new markets, clarity in institutional roles and responsibilities, and lack of dedicated policies and regulations,” states IRENA. But the current oil price, which though hovering around USD40 (QAR146) per barrel of benchmark Brent Crude, is climbing encouragingly away from the nadir of USD20 (QAR73) per barrel predicted by some bearish analysts in late 2015, that has created the urgency for Gulf states to refocus on renewable energy.

Grand challenges

Dr. Khalid Al Subai, executive director of Qatar Environment and Energy Research Institute (QEERI), Hamad bin Khalifa University, agrees. “Qatar National Vision (QNV) 2030 calls for the diversification of the economy and not relying mainly on natural resources,” he told The Edge. “The oil prices should emphasise the need to diversify the economy and look at energy security by adding other sources such as renewables to the mix. “More support for research and development is needed to advance the renewable energy sector in Qatar,” added Al Subai. “QEERI, as a research institute of Hamad bin Khalifa University, is committed to doing its part in achieving QNV 2030, with the institute’s strategy to conduct focused R&D projects that address the national grand challenges: energy and water security.” Qatar, reveals the IRENA document, plans to produce 20 percent of its energy capacity via renewables by 2030, most of which will come from solar energy. And despite the agency’s general criticisms of development of the sector across the GCC, Al Subai maintained this country is devoting sufficient resources to developing renewables. “Qatar is committed to deploying a considerable amount of solar energy (mainly PV) on the Qatar grid in its effort to maintain energy security and sustainable development,” explained Al Subai. “The Supreme Committee for the 2022 World Cup along with Kahramaa, Qatar Electricity and Water Company (QEWC) and others are committed to introducing renewable energy. QEERI is supporting and assisting these efforts through grand challenge research and development projects in collaboration with the various stakeholders.” In the Renewable Energy Market 22 | The Edge

The slump in the oil price has highlighted the urgency for the region’s countries to ensure their renewable energy targets are met. Analysis: The GCC Region report, 85 percent of respondents surveyed on the matter said they felt that reducing water and electricity subsidies would help the development of renewable energy in the region, a sentiment with which Al Subai also concurs. “This is one strategy to reduce consumption of energy and water in general, looking at energy and water cost more equally among various sources of energy. What we also need is to advance the innovation of renewable energy technologies through R&D and invest more in the clean tech sector,” he said. Nevertheless, challenges remain to encouraging the increased development of renewables in Qatar and its neighbouring states, said Subai. There are several challenges on the technical, economical and societal levels,” he explained to The Edge.

Total final energy consumption in the GCC by sector in 2013 (%)

“Qatar is committed to deploying a considerable amount of solar energy,” says Dr. Khalid Al Subai, executive director of Qatar Environment and Energy Research Institute (QEERI), Hamad bin Khalifa University.

“From a technical point, we have to improve efficiency and reliability of renewable sources in the GCC (desert) environment and develop an infrastructure for accommodating the integration of renewables (such as smart grids). These are the focus of the grand challenge projects QEERI is undertaking,” Subai mentioned. “On the economic side,” Al Subai continued, “the cost of renewables must go down to compete with other fossil-based sources. The society also has to embrace renewables as a means of protecting the environment and achieving energy security. We have to create an environment to nurture this new developing sector.”

The full IRENA Renewable Energy Market Analysis: The GCC Region document is available for download at www.irena.org Breakdown of energy consumption within GCC industries in 2013 (%)

69%

Natural Gas

Others

50%

10%

Industry

Residential

Commercial

32%

Transport

Source: IEA, 2015

25% Oil

Source: IEA, 2015

Others

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real estate & construction

The government has taken the initiative to build more labour cities in partnership with private companies. Pictured here is the new Labour City that opened last year in Sanaya Industrial Area in Doha. (Image Getty Images)

New land plots to increase labour accommodation supply, reduce cost of development The Qatari governmentâ&#x20AC;&#x2122;s recent move to reallocate 23 plots of land to private companies for developing temporary labour accommodation is not only expected to improve the living conditions of workers, but also reduce the cost of development, writes Nick Witty.

n the back of a housing shortage in the country, construction companies have had to accommodate their workers in the unorganised housing sector, which often lacks proper amenities. In a bid to mitigate this, the government has taken the decision to allocate 23 plots of land across the country for the development of workerâ&#x20AC;&#x2122;s accommodation by the private

sector on a build, operate, transfer (BOT) basis. The likely effects of this initiative will be reduction in both the costs of development and housing the workforce for the short term, and arguably thereby making the affordable housing segment more attractive to developers/investors, albeit only if the land is given free of cost, leased or subsidised. Mohamad Sheikh Al Souk, deputy

million

Expected demand for beds for labourers in the run-up to the 2022 World Cup. The Edge | 25

sectors | real estate & construction

general manager, Construction Development Contracting and Trading, said, “Increasing the supply will definitely lower the demand and consequently the prices will drop. This is a very good initiative and must be continuously monitored in order to decrease these prices.” At the moment, he said, there are many factors contributing to the inflation in Qatar but this step will definitely lower a major portion of the cost. Terming this a good opportunity for developers, Al Souk said that at least now they have the chance to tap into a market that is virtually non-existent. There has been a clear gap between the demand and supply of quality labour accommodation which meets international standards. The industry experts see this as a significant step towards achieving Qatar’s objective to improve expatriate construction worker’s standard of living in the country. The demand for workers accommodation has increased in Qatar since mid-2013, primarily as a result of the implementation of the National Human Rights Commission’s guidelines on the quality and size of accommodation. The findings of the most recent April 2015 census are yet to be released; however, the 2010 census indicated that there were approximately 920,000 bluecollar workers accommodated in multiple locations in developments of varying sizes and quality across the country. Current forecasts suggest that there could be additional demand for between 500,000 and one million beds in the run-up to the 2022 World Cup. Despite the increase in demand, it is widely reported that many private sector construction companies are deterred from entering the market for two primary reasons, the first being the cost of land; and the second being the increased costs associated with housing their own workforce. Land in Qatar, like many Gulf countries, is traded as a commodity without the ultimate owners necessarily having any intention of developing it. As a result, land is often too expensive to develop into lowcost accommodation as the developer is unable to secure the returns they require. As such the focus is on higher end, higher quality products which command higher rents and in turn higher investment returns. 26 | The Edge

private partnership “Increasing Public The government initially took the lead supporting the quasi-government the supply will bydeveloper, Barwa Development Company, in developing Barwa Al Baraha, referred to definitely lower locally as Barwa’s Workers’ City. Located the demand and in proximity to Doha’s old industrial area the west of the city, the development consequently the inwhich extends to approximately 1.8 million square metres is capable of prices will drop. housing up to 53,000 occupants it one of the largest workers’ This is a very good making accommodation complexes in the Gulf Council. Facilities include a initiative and must Cooperation hotel, entertainment centre, mall, laundry, be continuously health centre, mosque, Islamic centre, station, civil defence centre, firemonitored in order police control centre, sports facilities, shops, and offices. to decrease these restaurants While there is very limited data released publicly, anecdotally, the prices.” availability of housing for lower- to income households has been – Mohamad Sheikh middlerelatively limited despite the fact that those new labour compounds opened Al Souk, deputy recently in Qatar. There is still a steady general manager, demand for affordable housing especially as the country continues to witness rental Construction growth across all residential sectors. Though given current land prices Development across the country, it is likely that this segment will remain unattractive to Contracting and developers and it will fall upon the government and quasi-government Trading. developers to take a lead and perhaps subsidise accommodation.

Nick Witty is a director, Real Estate, Deloitte & Touche, Middle East.

tech & communications

A hybrid approach that combines a best-in-class financial management solution with line-of-business applications has been shown to generate very positive results for mid-market finance and insurance companies.

The advantage of using a hybrid financial management system In the face of continuous changes in the global economy, regulations and compliance, traditional enterprise resource planning (ERP) systems have proven inflexible, time consuming, and costly to change. As a result, more and more mid-market finance and insurance companies are deciding that a hybrid approach is the optimum way forward, writes Monzer Tohme.

inance and insurance companies can no longer afford to be constrained by their financial management systems, knocked of course by every regulatory change, and left exposed to the enormous cost and disruption of implementing change. They need to lighten the burden of managing complex industry requirements and ensure financial management systems that enable growth rather than obstruct it. The big question is how they will do this. Mid-market finance and insurance companies have a variety of options available for meeting their financial management needs. Often, in fact, the choices can be too plentiful, making

it difficult to thoroughly assess the benefits and downsides of each approach. However, the process can be simplified by classifying financial management technology strategies into the three broad categories outlined below. These strategies will inevitably evolve along with technology, although companies can easily become locked into systems that are unable to adapt as the business changes and grows. That is why it is so critical to choose a strategy that can accommodate a companyâ&#x20AC;&#x2122;s needs both now and over the long haul. Whether the company is starting from scratch or replacing a key piece of its overall technology puzzle, making the right decisions now The Edge | 27

sectors | technology & communications

can ensure that the financial management system is an asset to long-term growth and profitability.

The big ERP approach

ERP systems have long been a challenge for mid-market finance and insurance companies. They offer name-brand credibility, promise robust functionality, and often seem like a safe choice in a sea of options. However, the promise of large-scale ERP for the mid-market has rarely lived up to reality. A primary source of ERP’s failure to meet expectations in the mid-market is the one-size-fits-all approach that big ERP companies take – and that size is large. Mid-market companies that choose this route often find themselves with solutions that are expensive, inflexible, unnecessarily complex, and ultimately unable to meet their industry-specific requirements. So while ERP systems have much to offer, finance directors in the mid-market often look to other options that are more adaptable, far more cost effective, and more closely aligned with their specific business needs.

The line-of-business approach

Line-of-business applications can be defined as systems developed to address a particular business process or need (for example, claims processing), but they frequently have broader functionality (for example, financials) built in. These systems can be vendor-provided, homegrown, or some combination of both. Line-of-business applications are chosen for their focus on complex, industry-driven business needs that broader systems may address at only a superficial level. They have typically been developed over time, and provide deep functionality and industry expertise in their given area of focus. However, the strength of line-of-business applications is also the source of their weakness, particularly when it comes to financial management. Precisely because they are so focused, line-of-business applications rarely provide robust functionality outside their area of expertise. Often, companies will start using whatever financial management capabilities are provided when they are small and their needs are basic. Within a very short time, however, most outgrow the limited financial management functionality and find themselves stuck with a system that is unable to adapt or grow. The bottom line is that line-of-business applications have much to offer and can be a valuable asset, particularly in the complex finance and insurance industries.

A primary source of ERP’s failure to meet expectations in the midmarket is the one-size-fitsall approach that big ERP companies take – and that size is large.

system that can keep pace with business needs that change overnight, while others get the systems they need to manage complex, industry-specific business processes. Best-in-class financial management solutions put the power in the finance department’s hands, providing the flexibility to adapt without the assistance of consultants, application specialists, or even IT. This is especially welcome in mid-market enterprises, which very often have limited IT resources and skills at their disposal. By leveraging best-in-class financial management systems that have robust integration capabilities, they can leverage thirdparty applications without jeopardising data accuracy, reporting, and control. The result is the best of both worlds – applications that are the best of the best for their specific business area but able to work seamlessly together. When evaluating financial management systems, companies must get beyond today’s needs and keep an eye on what is coming, both in terms of organisation’s needs and market trends. The right decision will put businesses in control and ensure that they have a finance department with the tools and resources to handle anything that comes their way.

Best-in-class and line-of-business applications

Best-in-class applications can be defined as systems that address a single, core business area (for example, financial management) that is common across industries. These solutions have typically been developed from the ground up to address their area of focus, rather than added on to other applications to create a packaged offering. While there is no official classification, best-in-class solutions are those that have a singular focus and robust functionality that broader-based solutions cannot match. For mid-market finance and insurance companies, a hybrid approach that combines a best-in-class financial management solution with line-of-business applications has been shown to generate very positive results for the simple reason that everybody wins. Financial executives get a highly flexible 28 | The Edge

Monzer Tohme is the country manager, Middle East, at Infor.

business interview | technology

yet challenging market for uber Christopher Free, Uber general manager for Qatar and the United Arab Emirates (UAE), was in Qatar recently as part of Qatar Business Incubation Center’s (QBIC) Speaker Series, one of their programmes to encourage and support aspiring entrepreneurs to overcome their external obstacles, and dedicate themselves to their start-up ideas full time. Free speaks to The Edge, in an exclusive interview, about the business and financial models of the company and what makes this region stand out, in his opinion. By Aparajita Mukherjee.

hristopher Free, general manager for Uber, Qatar and the UAE is a Manchester University graduate. Being the son of a diplomat, Free revealed, “I spent a part of my childhood in India (New Delhi) and then at Istanbul where I graduated from high school and went back to the United Kingdom (UK) for my university education, majoring in material science.” Following his university degree, Free started his career with Accenture Strategy in 2007 for four years, where he gained deep business insight. Free tells The Edge, “This experience was amazing, especially for a fresh graduate to get his teeth into the world of business, how various companies operate in different markets,” adding, “but I reached a point where I was making presentations and not knowing what came of those eventually. By then, at the end of four years, I was longing to get more direct operational experience and I joined a small venture capital firm, WPSChallenger as a senior associate, which was based in London, with an office at Los Angeles (LA) where I moved to eventually. The company operated a small fund of around USD20 million (QAR72.8 million) and was investing in technology start-ups.” It was in LA that he came across Uber in 2013. “LA, by its very size, is the perfect ground for a venture such as Uber to come to life. It is huge but its public transportation network is not great. I remember going home to the UK in the summer of 2013, returning to LA in August and Uber was all over the place, transforming completely the way the city worked.”

32 | The Edge

â&#x20AC;&#x153;Today, we are a USD62 billion (QAR225.7 billion) company, with a million rides a day, across the world, and when you reach that scale, or that level of product-market fit, people will start to replicate the model. Our focus has to be to stick with the best quality product that we can deliver at all time points,â&#x20AC;? Christopher Free, general manager Uber for Qatar and the UAE tells The Edge. (Image QBIC)

The Edge | 33

business interview | technology

At the time, says Free, WPSChallenger was going out to raise a new USD100 million (QAR364 million) fund and “every time I sat and spoke to an investor, I felt that I was lacking in the operational experience and the challenges that these investors were talking about, all of which are essential business traits in the real world. I desperately wanted to get that operational experience and ended up joining Uber in the summer of 2014 as a launcher which, in Uber parlance, means that s/he goes to a city in which Uber currently does not operate and launches the service there from scratch – finding office space, hiring a local team, getting the technology localised, and the initial pool of drivers on board”. As part of Uber, Free has been a launcher in Poland, then in Norway and then in Dubai, where initially he was part of the strategy and planning team for the Middle East and North Africa (MENA) region. From there, he transitioned into his current role as general manager of the UAE and Qatar.

“What we managed to do in a short time span of just over five years is growing at an incredible pace. The supply in Doha has grown at the rate of 70 times from where we began two years ago.”

The Uber financial model

continue to support the number of trips we will keep doing, with volumes picking up. Also to ensure the convenience aspect such as making a split share ride possible with fares being split between riders.” Three is Uber’s international footprint. In Free’s words, “The application working seamlessly in all the 390 cities that Uber operates and setting up the service before competitors arrive there, with the same degree of convenience that riders are used to.” Free talks about market segmentation from Uber’s standpoint and as examples, he cites Uber Axis which is a relatively low-cost service, and Uber Black which is more of a luxurious product. On other players having replicated Uber’s business model, and how much of an impact that has had on the company’s market share, Free says, “What we managed to do in a short time span of just over five years is grow at an incredible pace. For instance, the supply in Doha has grown at the rate of 70 times from where we began two years ago, in Dubai, the supply has grown by 90 times from where we began. These numbers are indicative of the major markets we operate in.” Elucidating further, Free says, “Today, we are a USD62 billion (QAR225.7 billion) company with a million rides a day, across the world, and when you reach that scale, or that level of product-market fit, people will

Uber is a technology platform, says Free. He explains, “We have an application, which basically has two sides to it. On the one hand are the drivers and on the other the riders. That technology platform can be used for a number of different things: for instance, in Dubai we have made helicopter rides for customers who wanted and needed them, bringing in the concept of tailor-making with the same technology application.” The business model is based on a lead generation service. Free explains what this means in the world of transportation: “We give a driver the opportunity to use the application to generate business, and we charge a commission for using that lead generation.” There are around 390 cities in Uber’s map, across georgraphies. What does Uber ensure to give a similar feel for riders? According to Free, the consistency of riders’ feel is fundamental to Uber’s success and the factors that make that consistency possible are: “One, efficiency which means that at any time of the day and in any part of a city, a rider can open the app and get a ride within five minutes, across all our jurisdictions.” The second factor is technology, explaining which Free says, “Many don’t realise that Uber has 1000 engineers working on the backend at San Francisco to make this application the best from a technology standpoint, to ensure that it can 34 | The Edge

start to replicate the model. Our focus has to be to stick with the best quality product that we can deliver at all time points; while competition is there and it exists, our focus is on how to make the product the best it can be; how we can out-innovate our competitors; how can we do things which only Uber can do.” Free acknowledges that competition ensures that “we are on our toes all the time, which is what competition does to any business across the world”.

Business models

There are two different business models depending on the jurisdiction. Illustrating the two models, Free uses the Qatar and the

technology | business interview

Uber is a technology platform, according to Free. “We have an application, which basically has two sides to it. On the one hand are the drivers and on the other the riders. That technology platform can be used for a number of different things: for instance, in Dubai, we have made helicopter rides possible for customers who wanted and needed them, bringing in the concept of tailor-making with the same technology application,.” he says. (Image QBIC)

UAE examples, saying, “In these countries, we work only with those drivers who are registered with a limousine company. So we are giving limousine companies the ability to get on to our platform.” Talking about the background checks that Uber does in these markets, Free mentions, “For the documentation aspect of the cars, we rely on the local transportation regulator to ensure that the cars and the drivers have fulfilled the requisite checks that are needed – the drivers’ identity (or residence permit), and that the car is the same as the one that is registered with the limousine company.” “Once these requisites are met, we

provide some training to the driver about how “Uber to use the application, some basics around customer service,” continues Free, adding, has 1000 “We also have a two-way rating system which that after every ride the rider rates engineers working ensures the driver and vice versa. We then have a data set which we visit every week and any driver on the backend who doesn’t meet the required thresholds are at San Francisco asked to come back for retraining with us to up their level of service, and if they don’t meet to make this our standards repeatedly, we deactivate the application the best application.” Efficiency is one of Uber’s hallmarks. Free The Edge, “In Dubai, for instance, you from a technology tells have a Lexus AS which is the most popular limousine on demand, and it waits outside standpoint.” The Edge | 35

business interview | technology

a hotel for eight hours and does three or four trips at best. What Uber does is to utilise all such vehicles that have idle capacity more efficiently.” The other model is for countries such as the United States (US), where the drivers own the cars. Closely linked to the business model is the revenue generation potential of these two types of markets. Free mentions that because of labour laws or the relevant transport regulators in the region, be it the RTA in Dubai, or in Qatar with the Ministry of Transport, Uber can only use licensed cars which act as natural caps, impacting the supply scale which is in contrast to what is possible in say the US where anyone who has the right car, and has a solid driving history can potentially join the platform, making the supply base unlimited. Commenting on the challenges in markets which, by dint of their regulations, constrict the car supply base, Free says, “Our job becomes slightly more challenging in such

Commenting on Uber’s international footprint, Free says, “The application works seamlessly in all the 390 cities that Uber operates, and we set up the service before competitors arrive there, with the same degree of convenience that riders are used to.” (Image Uber)

Uber has two business models: in the region, they work with registered limousine operators and in other countries, the cars are owned by the drivers.

The Uber business model is based on a lead generation service. In the world of transportation, Free explains, “We give a driver the opportunity to use the application to generate business and we charge a commission for using that lead generation.” (Image FotoArabia)

36 | The Edge

technology | business interview

Uber in numbers

QAR225.7 billion: The size of Uber.

390

1 million

The number of cities Uber is present in globally.

The number of rides per day globally.

70 times

The growth rate of Uber’s fleet size in Doha since its launch.

1000

The number of engineers Uber employs to perfect its app.

225,000

The target market size of Qatar.

markets since we need to think of innovative ways in which we can start to scale up our fleet within the rules and regulations that we have to abide by. These are the nuanced challenges that we work with and one that has an impact on the consumer side, being reflected in the cost angle. In these jurisdictions, we are more expensive than taxis. For instance in Dubai, we are 30 percent more expensive than taxis which to an extent, applies to Doha as well which

is an economic decision that has been made, rather than being a function of the relevant regulatory climate.” By its very nature then, in the region, Uber’s target demographics is different from that of the US where the service is largely focused on being efficient and affordable to every single rider. “The regulatory barrier makes the business dynamics slightly different,” says Free. Commenting on why Free sees Qatar as an interesting yet challenging market

to operate for Uber, he illustrates, “Our potential target market comprise the 800,000 expatriate population, of which roughly 50 percent are blue-collar workers. Half of that is 400,000 and, of those, many have their own cars or are provided transport by their employers, which scales down our market size to roughly between 200,000 and 225,000. With that, we have done as well as say the larger cities in Saudi Arabia where the market is bigger, comparatively.”

The Edge | 37

cover story | leisure & entertainment

State of

Boredom? Qatarâ&#x20AC;&#x2122;s diversified population continues to grow, but the country still lacks sufficient recreational facilities - both for locals and for people who visit Qatar for leisure. Syed Ameen Kader analyses the Qatari market, comparing it with its regional neighbours, and concludes that Qatarâ&#x20AC;&#x2122;s approach to leisure and entertainment is very much rooted in tradition and authenticity, balanced with modern convenience.

38 | The Edge

leisure & entertainment | cover story

ith the rapid economic diversification, the needs and lifestyles of Qatar’s urban populace have evolved to a point where there is a compelling need to offer them different types of entertainment and leisure facilities. But, one gets a sense while talking to friends or colleagues, or visiting online forums, that there is a lack of plurality of options when it comes to spending one’s leisure time. Qatar has some recreational facilities, but those are mostly within shopping malls, which are, in industry parlance called family entertainment centres (FEC). Although the country has many other leisure facilities ranging from water parks, traditional souqs, museums and exhibitions, unspoiled deserts and beaches, through to luxury hospitality and high-fashion offerings, the question is whether those are enough to meet the demands of the local population, let alone the foreign travellers. Michael Connors, associate director, Faithful+Gould, says, “Currently there are a number of facilities that fulfil the demand. However, the population in Qatar is growing and quickly becoming more diverse with a wide range of nationalities.” He continues that with many population groups – nationals and expatriates – having varying income levels, different customs contributes to differing views on how leisure time is spent. “In addition, the local population in Qatar is increasingly becoming more connected to global trends and reflecting these trends. These factors create challenges in determining how best to cater to the entertainment needs of all going forward,” says Connors. He agrees that there is a gap, and therefore opportunity for developers to bring theme space offers to Qatar that are positioned at accessible price points. In fact, that trend has already started to emerge

“As a business model, the developer needs to consider whether they will operate the attraction themselves or seek a tenant. If doing it themselves, they then need robust operations to manage the attraction properly.” – Michael Connors, associate director, Faithful+Gould.

Doha Festival City, scheduled to open in September, includes 38,000 square metres of space dedicated to entertainment, and will soon be home to Qatar’s first Snow Park, in addition to the region’s first Angry Birds theme park, which will feature both indoor and outdoor attractions. (Image Doha Festival City)

The Edge | 39

cover story | leisure & entertainment

Visitors and guests during the opening of Megapolis project in March this year. Located in the heart of Medina Centrale, The PearlQatar, the project spread over 6000 sqm, is one of the largest indoor family entertainment centres in the Gulf Cooperation Council. (Image Megapolis)

in the region. The United Arab Emirates (UAE) seems to have taken a lead in this, but others such as Qatar, Saudi Arabia, Bahrain and Oman are also in the process of doing so. Mat Green, head of Research and Consulting, CBRE Middle East, says, “Over the past decade, the Middle East has seen the rise of multiple major leisure and entertainment attractions, including Aquaventure in Dubai and Yas Waterworld in Abu Dhabi. These developments, along with planned museums and theme parks, now form an integral part of the country’s (the UAE’s) tourism strategy, with countries such as Qatar now also following suit.” Initially, these attractions were developed as anchor or ancillary components of the malls and hotels. However, more recently, sizeable standalone theme parks have been delivered in Abu Dhabi while Dubai is currently constructing a theme park cluster, the first phase of which is expected to open later this year. “The latest theme park announcement came from Muscat/Barka, Oman, which intends to build Oman’s first waterpark, while a second water park is planned for Salalah in 2017. The water parks in Barka and Salalah will accommodate 1200 and 500 daily visitors respectively,” says Harmen De Jong, partner, Development Consultancy & Research, Knight Frank. Like a number of cities within the region, Doha is also undergoing a transformation of its retail and leisure markets amid an ongoing construction boom as the government strives to modernise the city in the build-up to the 2022 World Cup. However, despite some obvious improvements, Green says, 40 | The Edge

Qatar’s recreational and leisure market remains quite limited and is largely concentrated around its shopping malls. But, he says, there are a number of more exciting attractions set for delivery as part of the future destination malls. “This includes the region’s first Angry Birds theme park, which is set to open at the upcoming Doha Festival City (DFC) mall. Other announced projects for DFC include Juniverse, a kids edutainment concept and a snow park,” adds Green. Speaking to The Edge, Kareem Shamma, CEO, DFC, agrees, “While Qatar does have a certain amount of entertainment, leisure and gaming facilities, which have been introduced relatively recently to the market or indeed are still in the pipeline, they are simply not sufficient to cater to the needs of the existing Doha community or the projected increase in population.” He says their research has highlighted the need for a wider variety of entertainment options, catering to the different age groups in Doha. “The entertainment industry is showing significant growth, with a larger variety of options being tailored to the very discerning consumer base both in Qatar and the wider Gulf Cooperation Council (GCC),” Shamma adds. That is what the DFC project looks to capitalise on by including 38,000 square metres (sqm) of space dedicated to entertainment. Scheduled to open in September 2016, the project will feature both indoor and outdoor attractions, and will soon be home to Qatar’s first Snow Park. Another standalone entertainment project to make a debut in Doha this year is Megapolis, which, according to its developer Palma Hospitality, has been developed after taking into account the

leisure & entertainment | cover story

specific needs and lifestyles of Doha’s urban and cosmopolitan populace. Charbel Mhanna, general manager, Palma Hospitality Group, says, “While Qatar has made great strides across all industries in the past few years, there remains a need for dedicated and comprehensive family entertainment centres such as Megapolis that fully cater to the needs of every age group and attract repeat visits.” Spread over a 6000 sqm area, the company claims, Megapolis is one of the largest indoor family entertainment centres in the GCC, with the capacity to welcome up to 3000 guests at any given moment. The project offers a wide selection of games, attractions and activities including bowling, indoor golf, darts, billiards, karaoke and flight simulators. Climate and economic factors As a business model, what has so far worked for developers is a combination of both retail and entertainment: FECs. That is why we see an influx of shopping malls all across the region. This is primarily due to two reasons: one of course is the economic viability; the other is the climatic condition. Summer heat is a deterring factor for this region to develop projects with large outdoor facilities. However, industry experts suggest, there are ways to deal with that. In fact, the summer season is enjoyed by many European travellers, which can be capitalised on by project owners. Andrew Williamson, head of retail, JLL MENA, says, “To combat the warm climate and provide pleasant outdoor spaces, developers are providing air-conditioned outdoor F&B seating areas and incorporating shaded walkways in their developments.

This can be seen with Mall of the World by Dubai Holding where temperature-controlled arcades are being introduced.” Talking about the climatic condition of Qatar, Shamma of DFC agrees the country has at least eight months of more enjoyable weather. To capitalise on that, he says, “We are delivering unique indoor and outdoor leisure offerings that have been specially developed in, and for, Doha.” Industry experts suggest that entertainment venues in this region should have both indoor and outdoor spaces to cater for seasonality and nationalities. “Today the tourism industry requires venues to be built to cater for global audiences since the airline network is expanding rapidly and reaching audiences worldwide. Entertainment venues, in order to be economically viable, need to be within a mixed use scheme, ideally

Qatar’s approach to leisure and entertainment is very much rooted in tradition and authenticity, balanced with modern convenience. This ethos fits well with the current trend in the experienced world traveller demographic.

“While Qatar has made great strides across all industries in the past few years, there remains a need for dedicated and comprehensive family entertainment centres such as Megapolis that fully cater to the needs of every age group and attract repeat visits,” says Charbel Mhanna, general manager, Palma Hospitality Group.

The Edge | 41

cover story | leisure & entertainment

Located next door to Megapolis is the first Middle East outlet of Cool de Sac – a unique concept from the Palma Hospitality Group and Aura Hospitality & Food Services that combines kids’ entertainment with eating out.

“A well-planned theme park within a larger mixed-use master plan is likely to yield sufficient returns, predominantly driven by hotel room nights and spending at retail and F&B clusters,” says Harmen De Jong, partner, Development Consultancy & Research, Knight Frank.

encompassing residential, retail and hospitality,” says Filippo Sona, director, head of Hotels (MENA region), Colliers International. Besides the family entertainment centres, another form of leisure facilities that has been very successful in this region is water parks. Aqua Park Qatar is the first such theme park to be built in Qatar, and is spread over an area of 50,000 sqm. Instead of water parks, De Jong of Knight Frank suggests, developers could look into various forms of ‘water play’ which require a much lower capital investment and can be enjoyed throughout the year. Besides Megapolis or Aqua Park Qatar, there are not many standalone entertainment facilities in Qatar, primarily due to the economic feasibility factors. Of course, to make a decision on developing a standalone leisure attraction requires deep market knowledge and insight. The potential return on investment, and the risk profile or sensitivity around that, are also some of the key considerations that need to be made before building any such development. As a business model, Connors of Faithful+Gould suggests, the developer needs to consider whether they will operate the attraction themselves or seek a tenant. “If doing it themselves, they then need robust operations to manage the attraction properly to continually delight and exceed customer expectations. The developer also needs to have a clear lifespan defined for the attraction. They need to decide to exit or refresh at the right time to avoid diminishing returns from a declining asset,” he explains. According to Green of CBRE, clustering of facilities, such as including hotels and entertainment facilities within destination malls, or combining water parks and resort hotels, is a strategy that has a proven track record in the region, with higher footfall and longer dwell times often achieved as a result. “Hence, this tends is to be the preferred strategy over developing standalone facilities,” he suggests. While the operation of a theme park can be profitable, the high capital expenditure associated with theme parks drive down investor returns. However, theme parks do have a positive economic impact and induce demand for other more profitable 42 | The Edge

sectors such as hospitality and retail. “A well-planned theme park within a larger mixed-use master plan is likely to yield sufficient returns predominantly driven by hotel room nights and spending at retail and F&B clusters,” says De Jong. Taking a different approach Both the UAE and Qatar have set ambitious targets to dramatically increase their visitor numbers over the next five years. To achieve these goals, they are developing new tourism drivers and identifying new source markets. While the UAE is building a number of theme parks and water parks in order to meet growing demand from international visitors, Qatar has adopted a different approach. Furthermore, while Qatar’s population is similar to Dubai’s, it attracts less than three million visitors per year, compared to Dubai’s 13 million plus. “We sense that Qatar has forged its own path in this regard and has carefully considered its position

2.93 million

Total number of visitors to Qatar in 2015.

leisure & entertainment | cover story

Key tourism-related projects in Qatar Msheireb Museums (Opened in 2015)

Anantara Banana Island (Opened in 2015)

Megapolis

(Opened in 2016)

Doha Festival City

(Scheduled to open in 2016) whereas Dubai, for example, has developed something for everyone; a mass-market destination. Qatar, on the other hand, wants to carefully showcase itself to the world in a way that perpetuates its people’s culture, values and traditions,” explains Connors. Qatar’s unique offering as a tourist destination is rooted in its authentic cultural experiences, family entertainment options, and business events facilitation. A spokesperson from Qatar Tourism Authority (QTA) says their aim is to position Qatar on the map of world-class tourism destinations by promoting the culture, values and traditions of its people. That is why they are working hard to involve homegrown talent in developing Qatar’s tourism sector, to ensure that the country’s heritage and culture is reflected in visitor experiences. Last year, QTA partnered with Qatar Development Bank and Qatar Business Incubation Center (QBIC) to create QBIC Tourism, a specialised business incubator that enables local entrepreneurs to develop products and services that enhance the Qatar tourism experience. QBIC Tourism officially launched in January 2016, and has already incubated nine tourism start-ups. Qatar’s approach to leisure and entertainment is very much rooted in tradition and authenticity, balanced with modern convenience. This ethos fits well with the current trend in the experienced world traveller demographic who are commonly seeking unique experiences, while also wanting luxury too. Connors agrees Qatar should leverage on its strengths. The country is already a mature destination

Hilton Salwa Beach Resort (Scheduled to open in 2019)

Entertainment City, Lusail for business tourism, particularly in meetings, incentives, conferencing, exhibitions (MICE), as well as having a growing pedigree in hosting international sporting events. “The average stay is relatively short among these travellers, however. By better promoting its existing leisure offerings among these groups, stop-over durations after events will increase, building momentum towards sustainable growth in leisure tourist numbers,” he adds. Connors says they expect to see developers bringing more projects and programmes to market that will have a bias towards heritage enhancement and cultural instigation. There is no doubt that Qatar would benefit tremendously from creating its own localised strategy and model for tourism growth, by taking into account factors that will most significantly impact the future of the entertainment and tourism sectors in the country. While Qatar is actively directing its efforts on further developing and strengthening its local tourism sectors to move away from being hydrocarbon-based, residents can only hope that sooner or later they will be able to beat their boredom. The Edge | 43

business interview | architecture

Making a global impression

From designing some of the iconic Qatar Embassy buildings in foreign countries to winning the 2022 World Cup stadium project, Ibrahim Mohamed Jaidah has come a long way since acquiring the Arab Engineering Bureau (AEB) in 1991. Today, with close to 700 employees of 35 different nationalities, AEB has grown into a truly global architectural firm of Qatari origin with five international offices in the Middle East and Southeast Asia. In an exclusive interview with Syed Ameen Kader, AEB’s chief architect and chief executive officer Jaidah shares his journey from local to global, and what it takes to become a respected name in the industry.

AEB has been appointed design consultant for the 2022 World Cup’s eighth proposed stadium in Al Thumama. Tell us about the project and the design competition. It was an international design competition where a number of firms competed. We are proud that we won it. The stadium will be built over an area of 515,400 square metres (sqm) and will have a minimum capacity of 40,000. Like all the other stadiums, it is part of the brief that the project has to be unique. It needs to meet all the international standards and have the latest technologies in the world, but, in terms of identity, it should belong to its surroundings. As in the case of other stadiums – whether it is Al Bayt stadium in Al Khor or all the other stadiums in Al Wakrah – they all have some relevance to our culture and nature. 44 | The Edge

architecture | business interview

“We have seen some lawyers and doctors, who have received good success, but within the engineering and architectural industry, there aren’t many in Qatar,” says Ibrahim Mohamed Jaidah, chief architect and chief executive officer, AEB.

The Edge | 45

business interview | architecture

You are the first Qatari architectural firm to do so. What do you think has worked in your favour to win such a tough competition? We had the right team from all over the world because it is such a highly specialised project. But reflecting the cultural identity into the design, I think, was the key, besides the fact that we are as big as any other international firm which has the best technical and aesthetical capabilities. But timely delivery is also the key for such a project. We are a local company and have been delivering projects for many years in Qatar. In fact, we are celebrating our 50th anniversary this year. The company was originally founded in 1966 before I took over in 1991. That also gives confidence to the client. So after 50 years of delivering projects in Qatar, I think we can be trusted for any scale of projects. Tell us about your global presence. Was it an intentional strategy to expand your operations internationally? We have done projects in many places where we do not have branches – from Mauritania to Sudan to Cyprus and Yemen. We continue to do projects all over the world, but our branches are in Doha, Abu Dhabi, Muscat, Kuala Lumpur, Bangkok and Manila. These are the locations where we have a physical presence. And, hopefully, we will be in Dubai very soon. We are extremely busy here, but we get calls from people who say they want us to come and do their projects. So when you are in demand, you cannot refuse. About 10 years ago when clients told us to come, we started realising that we need to expand globally. I started the first branch in Abu Dhabi and I was literally given a job. Actually, I was asked to enter a competition that I won. They said take the job and open a branch. And the rest is history. A similar incident happened with Muscat. We had an opportunity to do a big project there. Now we are building so many projects there.

46 | The Edge

Was it tough to compete with big and established players in those markets where you entered? We moved there because we got called. They said, “Take the job and open your office here.” So our clients are telling us to open a branch and we get rewarded with a job for opening that branch. So we are actually called to open. We didn’t open and go and look for work. The work took us there to open a branch. But those countries are different from Qatar, both culturally and architecturally. With AEB’s specialisation in Qatari traditional designs, how challenging was it to compete in those markets? It wasn’t that challenging because buildings are buildings at the end of the day. We do very contemporary buildings

Ministry of Interior Headquarters building is a very important project for Ibrahim Jaidah, who rates this as one of his favourites in Qatar. (Image AEB)

“In 25 years of my career, this is the fourth time something like this (economic slowdown) has happened. So we have seen this go up and down.”

AEB has completed a wide range of projects, including office buildings, embassies and hospitality projects, such as the Marsa Malaz Kempinski, The Pearl-Qatar (pictured here). (Image AEB)

architecture | business interview

which I think, is healthy. We see this happening in many economies around the world. As soon as there is crunch situation, I think people become more economical, they learn and as things pick up again, they are just better. In 25 years of my career, this is the fourth time something like this has happened. So we have seen this go up and down. Thankfully, it does not hit as hard as it hit other places in the world because our per capita income is high. Our government is good and we started diversifying into the gas industry. We have also done mega investments in the overseas market. However, as far as our company is concerned, we continue signing contracts like we did before. At present, we are negotiating a contract every week or so, and I think the clock is still ticking. Qatar has many ambitions and projects that have to go on, especially, those related to the 2022 World Cup and infrastructure projects. The private sector has not slowed down, especially when it comes to hotels or the Lusail project. It may be possible that the middle investors, or the small five-storey building guys are a bit more cautious. But, usually, in such times, it is best to continue building because you are getting the best deals from the contractors.

even in Qatar, such as the ones we have done in West Bay, The Pearl-Qatar and Lusail. We are doing quite a bit of those projects. So at the end of the day, stateof-the-art engineering and architecture are capabilities that are global. It does not have to reflect a certain identity at all. When we do something here, or we do in Muscat, we reflect the local culture. What type of diversified manpower pool do you have in your company? We have 35 nationalities and we speak 44 languages in one office. So that is really something we are proud of. We are as global as you can imagine, and we really have a mixed-culture within our environment. There are concerns about the current economy, due to the dip in the oil price. How challenging are the times for you as an architecture firm? I think it was very well stated in HH the Emir Sheikh Tamim bin Hamad Al Thaniâ&#x20AC;&#x2122;s speech during the opening of the Shura Council session a few months ago that we can become more efficient now and this is exactly what is happening. In my opinion, the right sizing of most of the companies is a healthy sign. It is like a wake-up call to say that you have to become more efficient. You donâ&#x20AC;&#x2122;t exaggerate the sizes so all the companies are doing this,

We are extremely busy here, but we get calls from people who say they want us to come and do their projects. So when you are in demand, you cannot just say no.

Why are there not many Qatari architectural firms like yours here? Many people from my generation have gone to work for the government or into setting up businesses, but there are not many people in truly professional businesses. We have seen some lawyers and doctors, who have received good success, but within the engineering and architectural industry, you are correct, there are not many in Qatar. Even within the whole Gulf Cooperation Council, you would not find 20 firms that have been established and have grown. There is a lot to learn from international architecture best practices, but I think with Qatar Universityâ&#x20AC;&#x2122;s school of architecture, we train a decent number of these youngsters who are now decision makers in government and so on. So I am extremely optimistic that there will be continuity. The Edge | 47

feature story | gccâ&#x20AC;&#x2122;s africa investments

The african frontier Defining the paradigm: From food security to FDI

Given its size and diversity, Africa has long been an investment destination and an attractive one for the Gulf Cooperation Council (GCC), with Qatar and Saudi Arabia buying farmland across the continent. A 2015 research by Economist Intelligence Unit (EIU), entitled Beyond Commodities: Gulf investors and the new Africa, commissioned by the Dubai Chamber of Commerce and Industry, has pointed out that the current trend is more towards foreign direct investment (FDI), moving away only from agro-businesses. The Edgeâ&#x20AC;&#x2122;s Aparajita Mukherjee analyses the investment trends and opportunities for the GCC in Africa.

48 | The Edge

gcc’s africa investments | feature story

he push among GCC states to invest in Africa was driven more by necessity than choice following the 2007 to 2008 global food price crisis. In a region that is import dependent for 60 to 80 percent of its food requirements, the decision to invest was clearly a strategic one. The GCC countries face the burden of a growing population, with growth of around 40 percent expected by 2030 over the 2010 figures. This means that they are faced with a food supply stretch coupled with prices that are exposed to geopolitical uncertainties and the vagaries of climate change. Qatar, for instance, imports about 90 percent of its food requirements annually, and this is expected to increase 153 percent over the next decade as the population grows. This will undoubtedly make the country vulnerable to price fluctuations. To ward off against these, like other GCC nations primarily Saudi Arabia, Qatar has invested in land acquisitions in Africa, notably in Sudan and Kenya, among several other locations. With a similar pattern of food dependence for all of the GCC countries and along with sourcing from Eastern Europe and farther in South America and Asia, GCC investors began looking more to Africa. Countries such as Sudan, Ethiopia, Mali, Mauritania, Mozambique and Tanzania, along with the North African countries of Morocco and Egypt became prominent GCC investment destinations. However, analysts such as Eckhart Woertz, the author of Oil for Food: The Global Food Crisis and the Middle East, do not believe in the assumption that Africa is a food supplier to the GCC and tells The Edge, “African countries do not contribute meaningful quantities to GCC food imports.” Commenting on the sectors that the GCC countries have concentrated on while investing in Africa, Woertz – who is also a senior research fellow at CIDOB (Barcelona Centre for International Affairs) - says, “There has been interest in the telecommunication sector, especially in West Africa, real estate investments, for example in South Africa and some interest in mining. There have been a number of announcements about agro-investments, for example in Ethiopia, Sudan, and Mali, but only few projects have actually been The Edge | 49

feature story | gcc’s africa investments

implemented and only on a fraction of the announced scale.” Anna Rosenberg, head of Sub-Saharan Africa Research of Frontier Strategy Group, a global research and advisory firm headquartered in Washington DC that specialises in doing business in emerging markets, tells The Edge that Saudi Arabia, Qatar, and the United Arab Emirates (UAE) are the most active GCC investors across Africa. A strategic area of investments in Africa stems from the extreme pressure on Gulf water resources, according to Rosenberg, and countries such as Saudi Arabia and the UAE are investing heavily in African markets, such as Ethiopia, Kenya, and Sudan to tap local agricultural resources. Citing examples, Rosenberg mentions, “In Egypt, a group of Emirati and Saudi companies are proposing to fund a USD3 billion (QAR10.9 billion) industrial city near the Suez Canal. If approved, the zone would be an industrial base to produce food and cars,” adding that this type of projects would also strengthen the UAE-Saudi political influence in Egypt where these countries have donated billions of dollars to help the government stabilise its currency and fund important infrastructure upgrades. Matthew Spivack, head of Middle East and North Africa Research, Frontier Strategy Group, says, “First of all, the subSaharan Africa region remains the second fastest-growing region in the world after developing Asia, despite current economic challenges that are affecting many of the world’s developing economies.” Spivack adds, “Growth is driven by a

Anna Rosenberg, head of Sub-Saharan Africa Research of Frontier Strategy Group, a global research and advisory firm headquartered in Washington DC that specialises in doing business in emerging markets, tells The Edge that Saudi Arabia, Qatar, and the United Arab Emirates (UAE) are the most active GCC investors across Africa.

50 | The Edge

Investments have moved in tandem with political ties and most GCC countries have embassies in a sizeable number of African states, with Qatar and the UAE having opened embassies in Somalia’s capital Mogadishu in 2014. Pictured here is former Qatari Foreign Minister Dr. Khalid bin Mohamed Al Attiyah (currently the Minister of State for Defence Affairs and a member of the Council of Ministers) escorted by Somali Foreign Minister Abdulsalam Hadliye Omar upon his arrival at the airport in Mogadishu in 2015. (Image Arabian Eye/Reuters)

large and growing consumer class, heavy public and private investments into infrastructure development, improving operating environments and technology innovations.” These are megatrends, according to Spivack, who feels that these will contribute to the region’s socioeconomic development over the next several years and decades and they are unlikely going to be substantially derailed by short-term macroeconomic volatility or political risks. “Anyone wanting to benefit from that substantial development trajectory has to understand that there will be short-term difficulties on the way,” he explains. Investments have moved in tandem with political ties and most GCC countries have embassies in a sizeable number of African states, with Qatar and the UAE having opened embassies in Somalia’s capital Mogadishu in 2014.

Beyond food and into FDI

Analysts have pointed out that Africa, with an economic growth rate of more than four percent, still accounts for about only two percent of global trade. Africa’s economy is projected to grow by 4.4 percent this year and five percent in 2017 as against three percent growth expected in developed countries. The EIU research commissioned by the Dubai Chamber of Commerce and Industry has pointed out that between 2005 and 2014, GCC countries have pumped around USD9.3 billion (QAR33.9 billion) in the form of FDIs into Africa, with a further USD2.7 billion (QAR9.8 billion) in the first half of 2015 alone. The chamber’s president, Hamad Buamim, has pointed out that it is not only larger firms that are set to seize opportunities in Africa, but smaller companies too. Qatar’s sovereign wealth fund is

gcc’s africa investments | feature story

“Growth is driven by a large and growing consumer class, heavy public and private investments into infrastructure development, improving operating environments and technology innovations.” – Matthew Spivack, Frontier Strategy Group.

The bank is already present in Libya, Mauritania, South Sudan, Sudan and Tunisia, and through its Egyptian business Société Général, which it bought for USD2 billion (QAR7.3 billion) in 2013.

The foray of GCC sovereign wealth funds

also expanding its reach in Africa. While Qatar Holding’s USD400,000 (QAR1.5 billion) investment in 2013 to support the agricultural supply chain in East Africa was a start, the potential for the fund to bring substantial impact should not be discounted. GCC banks and financial institutions have long been investing in Africa, especially within trade and infrastructure project financing, according to the EIU. Both Qatar National Bank (QNB, the GCC’s largest bank) and the National Bank of Abu Dhabi are focusing on expanding to Africa, while others such as the Union National Bank and the Abu Dhabi Islamic Bank, are currently only active in North Africa. QNB has acquired banks in Egypt, Libya and Tunisia, and set up branches in Mauritania, Sudan and South Sudan, as well as acquired a 23 percent stake in Ecobank, a pan African bank in 2014.

In September 2014, Dubai’s sovereign wealth fund (SWF) Investment Corporation of Dubai invested USD300 million (QAR1.1 billion) to acquire a 1.4 percent stake in Nigeria’s largest cement manufacturer Dangote Cement. At that time, CEO of the SWF, Mohammed Al Shaibani had revealed that the fund is also exploring other deals with Dangote, particularly in agriculture and infrastructure projects Another GCC fund investing in Africa’s largest economy is Eagle Hills, headed by Emaar’s Mohammed Alabbar. In July 2014, the firm declared its role in the USD18 billion (QAR65.5 billion) Centenary City project (a mixed-use residential and commercial development, stretching over 1200 hectares) in Abuja, the Nigerian capital. Eagle Hills signed an agreement to co-invest along with Nigerian SWF authorities in the deal. In November 2013, the Abu Dhabi government’s investment vehicle Mubadala signed a USD5 billion (QAR18.2 billion) agreement to develop a bauxite mine and alumina refinery in Guinea through stateowned Emirates Global Aluminium.

“Sovereign wealth fund investment is cautiously going into countries where they feel it is needed; infrastructure projects, particularly in power, real estate and commercial,” says Pratibha Thaker, regional director Middle East and Africa at the Economist Intelligence Unit. In the case of Qatar, Woertz echoes the cautious approach (as Thaker does), especially in the specific context of the falling hydrocarbon prices and mentions that with low oil prices and its spending needs for the 2022 World Cup, “Qatar will have less money to spend abroad and will be likely more cautious in their investment approach than the last decade.” Woertz mentions, “Qatar’s hands are probably a bit tied right now. Like other GCC countries, Qatar would need to invest more in knowhow and domestic capacities to administer projects in Africa, which require more attendance than, say a portfolio investment in the city of London.” Spivack of the Frontier Strategy Group mentions that whether or not GCC investment accelerates will come down to a small number of political decision makers, adding, “If oil prices stay at their current level or drop further in the next couple of years, GCC governments will be under increasing pressure to abandon long-term investment projects abroad in order to support immediate priorities and promote stability at home.” The Edge | 51

feature story | gcc’s africa investments

Telecom

GCC telecommunications companies have long identified Africa’s potential and invested sizeably which is evident with the volumes, though there have been some setbacks as well. As of 2013, the UAE’s Etisalat was the biggest player from the region in Africa’s telecom sector. It had taken a controlling stake in Gabon Telecom, and following that (but in 2013), a USD5.3 billion (QAR19.3 billion) stake in Maroc Telecom. Surprisingly, this was on the back of Etisalat experiencing a business contraction in Africa in 2013, with a year-on-year revenue reduction of one percent by June 2013 (with the exception of Nigeria) and a nine percent revenue reduction in Egypt alone. Much earlier, in 2010 Kuwaiti telecom operator, Zain Group sold most of its subSaharan operations to Indian player Bharti Airtel for around USD9 billion (QAR32.8 billion). This trend later got reversed, when it was reported that Zain Group was looking to concentrate on North Africa rather than sub-Saharan Africa, seeking a controlling stake in Inwi in Morocco, where it already had a 15 percent stake. Ooredoo also operates in the north African countries of Tunisia and Algeria.

Qatar imports about 90 percent of its food requirements annually, and this is expected to increase 153 percent over the next decade as the population grows.

52 | The Edge

90 %

The extent of food imports by Qatar.

40 %

Expected growth of population in the GCC by 2030, over the 2010 figures.

USD9.3 billion

The total quantum of FDI from the GCC countries into Africa between 2005 and 2014.

USD400,000

Size of Qatar Holding’s investment in 2013 to support the chain in East Africa. 23%

23%

QNB’s stake in Ecobank, a pan African bank in 2014.

Challenges

Eckhart Woertz, the author of Oil for Food: The Global Food Crisis and the Middle East and a senior research fellow at CIDOB (Barcelona Centre for International Affairs) says, “There has been interest in the telecommunication sector, especially in West Africa, real estate investments, for example in South Africa, and some interest in mining.”

GCC investments in numbers

One of the main factors preventing more ambitious Gulf investment into Africa is the continent’s high-risk perception with operational problems, non-honouring of contracts, currency volatility, political risks and changing of government policy among the main concerns. “This is not an easy continent to do business,” says Thaker of EIU. “The political risk is still high, more elections are taking place, you have countries like South Sudan and Somalia, as well as movements like Boko Haram and Al Shabab to remind you that Africa is also politically in transition,” the EIU research states. Spivack of Frontier Strategy Group is of the opinion that governance has improved across many countries in Africa, while risks are inherent to doing business in emerging markets across the world – not just African markets.

Commenting on the likelihood and extent of increasing GCC exposure to Africa, Woertz of CIDOB tells The Edge, “Africa is a big continent with a promising resource base and a growing population. But one needs to be cautious – the whole ‘Africa rising’ narrative that has been spun by media and banks is largely fake. Africa relies heavily on exports of raw materials, that has contributed to growth during the commodities boom of the 2000s, but growth is not necessarily development, especially if the boom has only benefitted a minority. For real development, it would require more value-added manufacturing and non-mineral growth and exports.” “The GCC could provide capital and contribute to African development if the projects are right. The GCC countries could strive to be part of capacity building and knowledge transfer as well, just providing capital is not as interesting in the long run,” Woertz closes.

Inside the minds of leading business figures

business insight Panerai consolidates its retail network by focusing more on boutiques 56 In an exclusive interview with The Edge, Milvin George, managing director, Officine Panerai, Richemont Group, Middle East, shares the companyâ&#x20AC;&#x2122;s expansion strategy and growth potential of the GCC market.

Helping high-net worth families mitigate risk, maximise returns 58 Borne out of a partnership with leading families, Aqua Group provides commercial structuring, strategic acquisitions and estate planning. Speaking exclusively with The Edge, Joanne Luce, managing director of Aqua Group, shares what it takes to make resources work and achieve long-term growth and value.

The Panerai booth at the 12th edition of the annual Doha Jewellery & Watches Exhibition 2016, held at the Doha Exhibition and Convention Centre between February 23 and 27, 2016. (Image Panerai)

The Edge | 53

business insight | luxury brands

watches

Panerai consolidates its retail network by focusing more on boutiques In an interview with The Edge, Milvin George, managing director, Officine Panerai, Richemont Group, Middle East, shares the company’s expansion strategy and growth potential of the Gulf Cooperation Council (GCC) market. Tell us about your distribution model and presence in this region. We have over 66 boutiques all across the world in major cities such as New York, Paris, Los Angeles, Hong Kong, Dubai, and Doha. In the GCC, we have 11 boutiques, and if you exclude India and Lebanon, we have nine boutiques. We also have about 10 points of sales in the GCC. So in term of distribution, we are very niche. We do not have a big distribution channel and we have to follow our business model. Today, we do not have enough watches to supply. We work with Ali Bin Ali who is the operator of Panerai boutiques in Qatar and Saudi Arabia. We have three boutiques with them in Doha, Jeddah and Riyadh. We work very closely with them, in terms of the image, uniform, how to receive customers and deal with them – all these managed by us through the training that we give throughout the year to the boutique staff. Moving forward, what would be your expansion strategy? We have presence through two distribution channels – standalone boutique and multi-brand stores. Panerai staff manages standalone boutiques where you have the maximum number of watches available. As you know we do not have enough supply, so when you commit to a boutique, it means you also commit to making sure that there is a complete collection on display or available in the boutique. While we are streamlining the number 54 | The Edge

“It is very important to have clear strategies on how to connect with a new generation, and nowadays we see that generations are keen on online and social media presence,” says Milvin George, managing director, Officine Panerai, Richemont Group, Middle East. (Image FotoArabia)

luxury brands | business insight

of points of sales that we have. The idea is to consolidate our retail network by focusing more on boutiques. For the 2016 – 2017 financial year, we have a couple of boutiques on our horizon. These are all linked to the opening of brand new malls. So whenever they are ready to give us the units – it could be next year or just the beginning of the year after – we will open our boutiques. In terms of the locations, we are looking at Saudi Arabia and Qatar for expansion. What has your performance been this year, and what are your expectations for next year? In this financial year that ends in March, we hope to meet our target. We are going to close the year meeting our budget and exceeding it despite an economic slowdown everywhere. What is happening to us is that today we are able to fulfill the waiting list in an easier manner. We still have the waiting list but it is not increasing in size. So it is realistic for us at the moment. 2016–2017 will be the year to really further consolidate our retail network, maintain the boutiques that we have and probably renovate some of them. We will focus more on strengthening our customer relationship management (CRM) in boutiques, training our staff and raising the bar. It is better in these tough times to push ourselves even more, and enhance service levels to customers. It involves approaching them, be it through communication, advertising, online presence or when they are in the store. It is also time to streamline the multi-brand network that we have, maybe upgrade and personalise some corners and of course opening new boutiques. How do you approach the design and technology development for your brand? I would say it is been really a journey of a lot of work in terms of working on the brand, launching the brand worldwide, working on introducing the first watch movement in 2005 after opening the manufacturing facility in 2002 in Neuchatel in Switzerland. So today we have more than 20 calibers, 20 movements in Panerai. It is quite impressive for the short period of time. If you are going to claim that you are a watch-making brand, then you have to have a strong backbone – own manufacturing

For the 2016 – 2017 financial year, we have a couple of boutiques on our horizon. These are all linked to the opening of brand new malls. In terms of the locations, we are looking at Saudi Arabia and Qatar for expansion.

facility is a must. So that you can produce your calibers and movements, and have a full control over the research and development (R&D), assembly line, and all the testing that each watch goes through. You need to have all these things under the one roof and managed by you. How much customisation do you do for your customers? We have introduced a special edition watch for Qatar and Saudi Arabia. It is called Luminor 1950 Sealand (PAM00849). This special edition watch is personalised with a beautifully hand-engraved cover for the dial, featuring white Arabian horses riding in the desert with palm trees and the sea in the background. If customers request us to do some minor customisation such as mentioning their names or something on the back, we can look at it. But if they want to personalise it further, we do not do it. What do you do to attract the younger generation, which is tech-savvy and more attracted to high-tech watches such as an Apple watch? It is very important to have clear strategies on how to connect with the new generation, and nowadays we see that generations are keen on online and social media presence. So we have a strong strategy to be very visible online and through social media such as Facebook, Instagram, Twitter and YouTube. We also do a lot of digital advertising. We cannot deviate from the brand DNA. We are not a trendy brand. We are an evolving company. We are always working on coming to the customer with new materials, new technologies, and different sizes, but in terms of launching something just to suit an age group, it does not work for us. When do you generally launch new collections? Every year we do our exhibition at Salon International de la Haute Horlogerie (SIHH), Geneva. It was in January this year when we launched around 15 to 20 watches and presented them to the press and our dealers such as Ali Bin Ali. We work on a quota system, and they have a number of pieces committed to them through the year. What is the growth potential of the GCC market? It is the highest market in terms of average sales. It does very well with high-end and complicated watches and there is a very strong potential in the GCC for such timepieces. The Edge | 55

business insight | investment

UHNW families

Helping high-net worth families mitigate risk, maximise returns Borne out of a partnership with leading families, Aqua Group provides commercial structuring, strategic acquisitions and estate planning. Speaking exclusively with The Edge, Joanne Luce, managing director of Aqua Group, shares what it takes to make resources work and achieve longterm value and growth. You became the first privately-owned entity to receive a trust and company services licence in the Qatar Financial Centre (QFC). Tell us what it means for your business and the clients that you serve in Qatar. We are really excited that Aqua can now provide a unique blend of services to ensure that the families we serve receive excellent service, security, and value, allowing us to mitigate their risk and maximise their returns. Since we got our licence in February 2015, Aqua has enhanced its existing relationships with a small number of key ultra high net worth (UHNW) families while seeking to continue to grow the business. Our team in Qatar has worked together for a number of years, and share a strong understanding of working with clients to secure advantages for family-owned businesses. This brings together a broad and deep understanding of how structuring and service can be used to optimise the clientâ&#x20AC;&#x2122;s expectations and returns, and we are glad that we can now offer our services locally under the QFC umbrella. Tell us about the strategy of your company. The strategy behind Aqua is to grow and develop a credible financial services business to allow key families, which Aqua assists, to improve their return on capital investment, through providing them first-mover advantage on key strategic acquisitions. We structure our affairs using corporate partnership or estate planning mechanisms to ensure that the families we serve can meet their specific commercial objectives, increasing their value as well as ensuring confidentiality and security for their families. With the oil price falling, how do you think this would impact the outbound investment from Qatar? Qatar has been moving towards foreign investment primarily to diversify its investment portfolio, increase revenues from investment opportunities, and promote its national economy. Qatar is among the countries, which has grasped the opportunities that the recession in Europe provided for investment in key sectors such as real estate, sports and the financial markets. While it is hard to predict the future of Qatarâ&#x20AC;&#x2122;s investment outcomes, from what we have seen over the years, the results have been fruitful because the state is carefully choosing its 56 | The Edge

Qatar is among the countries, which has grasped the opportunities that the recession in Europe provided for investment in key sectors such as real estate, sports and the financial markets.

investment | business insight

investment opportunities and is dedicated to financial stability and to a discretionary fiscal policy. With the continuing volatility in the world’s financial markets, investors and business leaders are looking for alternative solutions that will provide long-term stability and the potential for continued capital gain. Over the years Aqua has developed strategies to address some of these growing concerns, and offers tailormade solutions that enable our clients to move forward through the changing times, ensuring trust in financial services is restored by going back to the age-old effective management model followed by family-owned businesses, rather than expecting a large institutional bank to stabilise your business or your family. Our range of service offerings provides

the platform for these strategies to work for our clients who are almost exclusively family-owned businesses. Qatar remains one of the largest capital investors in the United Kingdom (UK) and Europe, and research suggests that private and non-institutional investors that include property firms, UHNW families, equity and private funds are increasingly becoming major sources of outbound capital from Qatar. What are the tax-efficient investment opportunities for Qataris and familyowned businesses? To address volatility of currency markets, we support careful strategies to minimise loss. We assist our clients to look at strategies that get the most from income producing assets. We manage residency

options for the European Union (EU) and assist in the acquisition of real estate, vessels, commercial businesses, retail shopping centres, care homes, hotels and leisure, and sign effective inward and external double tax treaties to maximise the return to the investors. With you having offices in Malta and Jersey, how does that help you better serve your Qatari clients? Having established Aqua offices in these key jurisdictions has allowed us to broaden our service offerings for our clients by capitalising on the different strengths of each jurisdiction, as well as giving our clients a strong platform to grow their business through Europe and the UK. The specific service Aqua provides depends on the asset strategy and aspirations of those families who are comfortable using core elements of the Aqua service offering. As family-run businesses in Qatar are going through a transformational phase through adopting corporate best practices, what role are you looking to play in this? Family businesses are arguably the fastest-growing investment vehicles in the world today, as families with substantial wealth are increasingly seeing advantages in the creation of a customised platform focused on their family ensuring that the right client outcome is achieved. We see our role in helping to create a ‘plug in and play’ strategy, using the best of the offshore structuring and access to the EU, utilising tax mitigation and an effective double tax treaty network to place Aqua as a multi family office and our clients in a strategically advantageous position. We are strong on corporate governance and bring many years of experience of financial structuring into play so that the family business keeps up to date with regulatory and tax issues. We also help developing right relationships between family and external professionals through practical and value-added corporate governance.

“Family businesses are arguably the fastest-growing investment vehicles in the world today, as families with substantial wealth are increasingly seeing advantages in the creation of a customised platform focused on their family ensuring that the right client outcome is achieved,” Joanne Luce, managing director, Aqua Group, told The Edge.

What is your future plan? Looking to the future, we are keen to continue with our sustainable growth plan for our business, to expanding our team in order to provide better quality services for our clients. We are hoping to offer internships in Qatar and continue building and developing. The Edge | 57

products & reviews

Read it:

No Place to Hide

It is highly unlikely that anyone who pays even scant attention to international news would not recognise the name Edward Snowden. The former United States (US) security contractor remains one of the most infamous people in the world, mainly due to his release of thousands of classified documents in early 2013, effectively ‘blowing the whistle’ on the covert surveillance of the US state organisation National Security Agency (NSA), which was monitoring in huge volumes the communications of countries, companies and people all around the world without their permission. But the name of Glenn Greenwald, the American journalist who helped Snowden reveal what he knew via newspapers and later on websites, is perhaps much lesser known, even though he is arguably almost as instrumental as his source in breaking the story to the world. Greenwald, a former constitutional lawyer-turned-investigative journalist, had spent his life uncovering and reporting on injustice and nation-state abuses and their association with technology, sums up the whole story from its genesis in this succinct, matter-of-fact and often shocking tell-all book.

Read it:

Indeed, Greenwald reveals that when Snowden contacted him as an anonymous source in late December 2012, he at first dismissed the gravity of the information that this person was purporting to possess and, distracted by other assignments, neglected to follow up on it. But he eventually followed up and before long he found himself face to face with his source, Snowden, in a Hong Kong hotel room, taking in the sheer enormity of the information the technology contractor held with sheer astonishment. What follows is an account of how they broke these stories to the world via newspapers and websites, and the incredible media furore that followed. But the book also highlights in fairly fine detail the sheer extent of the NSA’s surveillance of all sorts of communications across the entire planet, and their flippant and almost jocular disregard for the privacy of those they were spying on. Greenwald’s account of how the government sought to chase down Snowden, which then moved to him when the latter disappeared underground is also harrowing, and the entire book stands as a testament to the dangers and realities of government overreach in the age of the information explosion, as well as points out their subterfuge in initially denying at the collusion of large technology companies with them to obtain our most private data. It also highlights the ongoing debates over whether privacy and the right to one’s most intimate information and data is even relevant in this brave new world of ours, and how the world should treat people such as Snowden and Greenwald when they reveal secret state information publicly. Fascinating reading if this kind of subject matter boots up your hard drive. Available at Virgin Megastores in Doha.

How to Lead

The basic premise of this book is that anyone can learn to lead, and that everyone can learn to lead better. It follows the previous editions (this is the fourth edition of How to Lead) with a focus on the practical skills of leadership. But this edition also focuses on what leaders have to do to be effective: it marries actions to skills. Based on original research into some of the world’s best organisations across the public, private and voluntary sectors, How to Lead cuts right through all the myths to get straight to the heart of what you need to do and how you need to do it in order to succeed. Author Jo Owen takes the approach that there is a consistent set of actions that leaders have to follow at all levels of the organisation. He summarises this as IPA: Idea, People, Action. He points out that “the best leaders have a clear idea of how they are going to make a difference; and then they make it happen”. This sounds obvious, but Owen says, like most things that are obvious, many managers never see it, and even fewer are able to put it into practice. This book highlights how practising managers and leaders at all levels put the obvious into action. Traditionally, most leadership books are based on private sector examples. Having set up eight national charities, Owen is aware of

the challenges that voluntary sector leaders face. Public sector leadership is not easy either – huge constraints and intense scrutiny are just a couple of the challenges public sector leaders face. He is of the opinion that each sector can learn from the others. Its clear focus on practical, straightforward advice and guidance, delivered with honesty and humour, and with a focus on the practical skills of leadership, will help you understand all the core skills you need to succeed. As with the earlier editions, you cannot read this book and finish it as a leader. But it will help you put structure on the random walk of experience; it will help you make sense of the nonsense around you; it will help you accelerate your learning; and it can be your private coach on your path to leadership. Available at Virgin Megastores in Doha.

58 | The Edge

products & reviews

Samsung mobile

App Reviews

Samsung Electronics has launched the Galaxy S7 and Galaxy S7 edge series of mobile that comes with dual pixel camera, delivering brighter and sharper images, even in low light. Motion Panorama, a new camera mode, brings movement to traditional panoramic photos, giving the user better visual experience. The 5.1-inch Galaxy S7 and 5.5-inch Galaxy S7 edge are constructed with 3D glass, metal and ergonomic curves. Without compromising on design, both the models have increased utility with IP68 water and dust resistance. Edge UX, the advanced edge experience available on Galaxy S7 edge, provides convenience and increased efficiency by creating easy shortcuts.

Sony camera Sony has introduced the latest addition of mirrorless cameras, the α6300. It comes with 4D focus system that can lock focus on a subject within 0.05 seconds. Additionally, the α6300 has a 425-phase detection AF points that are densely positioned over the entire image area, and can shoot images at up to 11 frames per second with continuous autofocus and exposure tracking. The camera is equipped with a newly developed 24.2 MP APS-C sized Exmor CMOS sensor that works together with a BIONZ X image processing engine to produce high image quality throughout the entire ISO sensitivity range of ISO 100 to 51200.

iPad Pro Apple has launched iPad Pro, which is more powerful than previous versions, yet it is only 6.9 mm thin and weighs just 1.57 lbs (700 grams). Its 12.9-inch Retina display, nearly double the CPU performance of iPad Air 2, and refined multi-touch technology offers faster performance and better experience. The screen offers 78 percent more display area than that of iPad Air 2. Under the glass lie a revamped multi‑touch subsystem and 5.6 million pixels, making it the highest-resolution display of any iOS device. iPad Pro has the new A9X, a third‑generation chip with 64‑bit desktop‑class architecture. It delivers up to 1.8 times the CPU performance and double the graphics performance of iPad Air 2.

Tudor watch The new calibre Tudor MT5612, now powering the Pelagos model, provides power reserve of approximately 70 hours. In addition to the hour, minute and central second functions, it provides an instant date display visible through an aperture positioned at 3 o’clock. Its self-winding system is bidirectional. And, a first for a Tudor product, it is certified by the Swiss Official Chronometer Testing Institute (COSC). This technical update of the Tudor Pelagos is accompanied by the introduction of a new colour combination for the dial, bezel and rubber strap. In addition to its original matt black version, this model is now available in matt blue, the emblematic colour of the brand’s divers’ watches since the 1960s.

By M. Iqbal

Pocket (Android, iOS)

The app offers you the ability to save links, articles and videos for perusal later on, at your convenience. You will no longer need to email links to yourself – you can save articles to Pocket from your personal computer, phone, tablet and also from within other apps. It promises a cleaner, distraction-free reading experience when you get back to the article. There is a text-to-speech engine to read the articles to you.

Pintasking (Android) Pintasking promises to bring the convenience of alt-tabbing to your Android device – it allows you to create floating shortcuts in the form of pins (similar to Facebook Messenger’s chatheads). You can then access the apps with a single tap, without having to go through the tedious process of navigating all your recent apps via Android’s recent app feature. The pins do not take over part of your screen like Facebook’s chatheads, and can instead be brought to the fore via a simple gesture. You can also set the app up to switch between two apps.

Duolingo (Android, iOS) If you have ever fancied learning a new language, Duolingo may be just right for you. This free app promises to get you through your lessons as if playing a game. You will start with basic verbs, phrases and sentences and learn new words as you go along. The developers estimate that 34 hours of Duolingo are equivalent to a semester of university-level education. The languages currently supported include English, Spanish, French, German, Italian, Portuguese, Dutch, Irish, Swedish, Russian and Turkish.

The Edge | 59