The Edge - Jun 2012 (Issue 34)

w w w. t h e e d g e . m e

2012

CONTENTS FINANCE & ECONOMICS

.36. MARKET WATCH

Dheeraj Shadhadpuri provides an analytical market viewpoint of the recent problems in the ever-shaky eurozone region.

.38. BALANCE SHEET

Krishnaswamy Venkatesh looks at how family and individual businesses can list successfully via initial public offering.

.40. SPECIAL REPORT

Thomas Bacon examines the latest large sums of money being invested into Qatar’s construction sector.

ON THE COVER

E-commerce and online retail in Qatar and the Middle East region in general has seen massive growth in the past two years or so. New TheEDGE contributor Barry Mansfield takes a detailed look at this burgeoning subsector in our June 2012 cover story, speaking with a variety of local and international private and public sector players. Mansfield concludes while the current numbers look good, thanks to an emerging technologically savvy generation, this growth spurt is only the beginning and e-commerce in Qatar is set to grow even further in coming years. (Page 52)

.42. PERSONAL FINANCE

.60. ON THE PULSE

.44. ECONOMIC BAROMETER

KNOWLEDGE & EXPERTISE

Adrian bliss advises expatriates working in Qatar on how to create a will and testament.

Karim Nakhle takes a detailed look at the politics and policy differences influencing current discord among the weakest European economies.

FEatures

How Qatar’s budget is inexorably tied to world oil and gas prices.

.64. PRODUCTIVITY AND WELLBEING

Managing work pressure for maximum employee engagement.

.48. IN THE SPOTLIGHT

.66. LEGAL INSIGHT

.56. BUSINESS INTERVIEW

.68. BUSINESS MANAGEMENT

Martin Rivers takes a snapshot of the rapidly growing and diversifying aviation sector in Qatar.

CEO of Abu Issa Holding, Ashraf Abu Issa.

A new health insurance regime for Qatar from a legal perspective.

Are chief marketing officers really necessary to firms?

48 TheEDGE

3

CONTENTS

74

BuSINESS INSIGht INtErVIEWS .71. The new dean of Georgetown University in Qatar, Gerd

Nonneman (above) talks to TheEDGE about his vision and the calibre of graduates in the country soon to enter the workforce; James Scammon, the vice president of Bose International discusses the brand’s launch in Qatar and their innovative new products; and Ghada Philip El Rassi, deputy CEO of MEEZA, discusses their data centres and IT security.

REGuLArS .06. .07. .10. .12. .18. .21. .26. .28. .79. .84.

4

TheEDGE

FROM THE EDITOR CONTRIBUTORS FEEDBACK NEWS ETCETERA QATAR IMPACT ENERGY AND RESEARCH COUNTRY FOCUS OPINION TRAVEL AND LIFESTYLE 10 THINGS

80

FROM THE EDITOR

FROM PUBlICaTIONS dIRECTOR Mohamed Jaidah m.jaidah@firefly-me.com MaNaGING EdITOR Miles Masterson m.masterson@theedge-me.com dEPUTy EdITOR Erika Widén e.widen@theedge-me.com REGIONal SalES dIRECTOR Julia Toon j.toon@firefly-me.com +974 66880228 hEad OF BUSINESS SalES Emma Land e.land@firefly-me.com +974 33197446 SalES MaNaGERS Achraf Mannai a.mannai@theedge-me.com +974 55127480 Joseph Issac j.issac@firefly-me.com +974 33675301 dISTRIBUTION & SUBSCRIPTIONS Azqa Haroon a.haroon@firefly-me.com +974 55692471 CREaTIVE dIRECTOR Roula Zinati Ayoub aRT dIRECTION Lara Nakhlé dESIGN COORdINaTION Sarah Jabari FINalISER Michael Logaring PhOTOGRaPhER Herbert Villadelrey PRINTEd By Ali Bin Ali Printing Press, Doha, Qatar

THE EDITOR

As we were about to go to press the news of the tragic fire at Villaggio Mall in Doha came in. From all at TheEDGE magazine and Firefly Communications, we offer our thoughts and prayers to the parents, friends and loved ones of those who lost their lives. What transpired that dark Monday in late May 2012 will be a black mark on the psyche of Qatar and all its residents for a long time to come.

Many questions have been asked about the ostensibly inadequate safety measures in place at this mall, one of the city’s busiest.

Hopefully these questions will be answered in due course and those culpable are duly and severely punished and made an obvious public example of. I hope this incident will also stimulate every owner of every building and business in Doha to double check their safety measures and staff training and procedures and that the relevant regulators and authorities to do the same and enforce the relevant laws, without exception. Loss of life of this kind – of caring adults and wonderful, innocent children – due to any reason, be it negligence or scrimping on building or safety costs, has to be absolutely unacceptable and severely condemned and brutally punished. To do anything less or maintain a less than perfect safety standard is medieval and backward and possibly even the highest order of selfishness and greed and has no place in the modern society that Qatar is striving to become. That must be the silver lining to this otherwise incredibly dark and painfully sad cloud.

Let us move on to this issue. The results from our May survey on our website www. theedge.me interested us. Forty percent who took part are sure that cash will go the way of the traveller’s cheque (remember those?), which has all but vanished due to credit cards

and Internet banking.

We at TheEDGE are not so sure about the disappearance of cash any time in the near future. We agree that it will become less important, but maybe only to a point. E- and digital commerce is growing at a phenomenal rate in developed countries. Perhaps cash as we know it might vanish soon in countries such as those in North and South America, Europe, Australasia and parts of Asia.

But for poorer markets, certainly those classed as ‘frontier’ or ‘emerging’, where there are many people still surviving on the most basic of trade this will take a while to filter down, if ever. Where Qatar, one of the nations where digital retail and trading is growing fastest, fits in also remains to be seen. There is, as we all know too well, a great deal of wealth here.

But there are also many migrant workers for whom cash is still king, even if it is converted to bytes temporarily as it is gets wired home in remittances.

One caveat in this debate however is mobile or ‘m-commerce’. Unlike a few years ago, when barely anyone under the middle income bracket possessed a smartphone, now worldwide they are as ubiquitous as sand in a sandstorm, and could well replace the wallet in our pockets soon, either as the device through which e-commerce is performed, or as storage for digital currency.

This topic is something we will constantly be revisiting in the future, starting with our snapshot of Qatar’s e-commerce status quo

by Barry Mansfield in his informative cover story on page 52.

Miles Masterson, Managing Editor

Firefly Communications PO Box 11596, Doha , Qatar tel: +974 44340360 Fax: +974 44340359 www.firefly-me.com

theEDGE is printed monthly © 2012 Firefly Communications. All material strictly copyright and all rights reserved. reproduction in whole or in part, without the prior written permission of Firefly Communications, is strictly forbidden. All content is believed to be factual at the time of publication. Views expressed by contributors are their own derived opinions and not necessarily endorsed by theEDGE or Firefly Communications. No responsibility or liability is accepted by the editorial staff or the publishers for any loss occasioned to any individual or company, legal or physical, acting or refraining from action as a result of any statement, fact, figure, expression of opinion or belief contained in theEDGE. the publisher (Firefly Communications) does not officially endorse any advertising or advertorial content for third party products. Photography/image credits and copyright, where not specifically stated, are that of Shutterstock and/or iStock Photo or Firefly Communications.

6

TheEDGE

CONTRIBUTORS

CONTRIBUTORS

PG. 28 Dr. Yasser Thabet Head of Output Sky News Arabia Abu Dhabi, UAE

PG.30 Richard Gayle Managing Director London Global Associates London, United Kingdom

PG. 36 Dheeraj Shahdadpuri Analyst Dubai, UAE

PG.38 Krishnaswamy Venkatesh Partner, Corporate Finance KPMG Doha, Qatar

PG. 40 Thomas Bacon Analyst Oxford Business Group Istanbul, Turkey

P.42 AdrIAN BlIss Senior Financial Consultant Guardian Wealth Management Doha, Qatar

PG. 44 Karim Nakhle Senior Business Strategist Doha, Qatar

PG. 48 Martin Rivers Journalist for Aviation Consultancy Ascender London, United Kingdom

P.52 Barry Mansfield Freelance Journalist Oxford, United Kingdom

Pg.60 EdWArd JAmEsoN Senior Business Journalist MENA Region London, United Kingdom

PG. 64 Lauren Penny Human Resource Wellness and Engagement Consultant Freelance Doha, Qatar

PG. 66 David Salt Partner Clyde & Co Doha, Qatar

P.66 Michael Early Senior Associate Clyde & Co Doha, Qatar

PG. 80 Victoria Scott Journalist Doha, Qatar

About TheEDGE: TheEDGE is an ambitious business magazine targeting professionals operating within Qatar’s multi-sector business landscape. Printed monthly, TheEDGE was launched in July 2009 to fill the market void and to provide the business community with insight into the latest business trends and market developments.

TheEDGE is distributed 11 times yearly to a readership base of more than 10,000 professionals, providing advertisers with the needed additional reach and frequency to their most important and affluent audience. TheEDGE is an authoritative business resource serving both large and small business operators. Please e-mail info@theedge-me.com should you wish to contribute.

TheEDGE

7

READER FEEDBACK

FEEdBaCK BaCKChaT – lETTERS FROM

GENERaTION y As a young Arab in Qatar who has just entered the workforce who falls into the category of ‘Generation Y’ as TheEDGE cover article in April featured, I was interested to read the article. To be honest, I did not like it. It painted our age group to be kind of spoiled, insecure and maybe also lazy. While I agree there are people like that in the 20 to 30 year old age group, there are equally many of us that are not, we work hard and are respectful of the experience of our elders. You also stated that Generation Y was born in the 1960s to 1980, which is totally wrong. Maybe next time you should get someone younger to write it for a better perspective from our generation?

Ahmed, via email

Dear Ahmed, thank you for your valued input.

We agree in all people you get good and bad, but the feature was not just about that alone.

It was also about how to manage all three generations at once, and therefore someone with human resources experience would be best to write it, but point taken. Apologies for the copy gremlin, Gen Y was of course those born between 1981 and 2000. – Miles Masterson, Managing Editor QaTaR IMPaCT FaN Dear Editor, I would just like to say that I think Kamahl Santamaria is one of your best writers and I would like to see more articles from him.

He is not afraid to tell it like it is and be a little critical and always hits the nail on the head with his column. I watch his show on Al Jazeera and think he is one of their best presenters too.

Noor, West Bay, Qatar

10

TheEDGE

ThEEdGE REadERS

Hi Noor, thanks you are not the first to say that about Kamahl.

However his news programme Counting The Cost does keep him very busy, but we are very honoured to publish his insightful articles every month. – Miles Masterson, Managing Editor

ThEEdGE ONlINE SURVEy May 2012: E-COMMERCE

In May we asked our website visitors whether they think e-commerce would replace cold hard cash in the near future. 60 percent said no it would not and 40 percent said yes. Time will tell who is right, but digital business is clearly growing worldwide. Read more about e-commerce in the cover feature on page 52 of this issue.

wIll E-COMMERCE REPlaCE COld haRd CaSh IN ThE NEaR FUTURE? NO

yES

REACTION IN THE FORM OF LETTERS AND E-MAILS FROM THEEDGE READERS, AS WELL AS SURVEY FEEDBACK FROM OUR WEBSITE WWW.THEEDGE.ME

FOLLOW ThEEdGE AND wIN A NOKIa N9 Send us a letter or email correspondence, or follow TheEDGE on our Facebook page, Twitter feed or LinkedIn group and stand in line to win a Nokia N9 pictured here.

Each month one such reader will be drawn to receive this great prize.

Existing followers or those who fill in our online reader survey on www.theedge. me in June and July will also be included in the draw for those months.

FOllOw theEDGE ONlINE FOllOw US ON TwITTER: @ThEEdGEQaTaR jOIN OUR FaCEBOOK GROUP: WWW.FACEBOOK.COM/ QATARTHEEDGE jOIN OUR lINKEdIN GROUP: ThEEdGE MaGaZINE QaTaR

QATAR’S CATALYST FOR BUSINESS

Now Read TheEdge Online www.theedge.me is the Qatar business community’s new digital sensation. www.theedge.me contains current and archive feature and news content from our print magazine, breaking news and online exclusives, and extends the invaluable service TheEDGE magazine provides Qatar’s bustling multi-sector business community, making it the onestop online portal for all aspects of business-related content and information covering Qatar, The Middle East and the rest of the world.

Visit TheEDGE magazine’s website for the best coverage of the Qatari business world available on the Internet.

www.theedge.me

NEWS ETCETERA

NEWS ETCETERA

TO OF THE MONTH O H P

The

E D G E M A G A ZI N E

HORSES FOR COURSES

William Buick riding Izzi Top (far left) wins the Qatar Bloodstock Dahlia Stakes at the Newmarket racecourse in early May, in Newmarket in the United Kingdom. In 2011, Sheikh Hamad bin Abdullah Al Thani, along with his five brothers, signed a multimillion-pound deal through their Doha-based private investment vehicle, QIPCO, to provide the title sponsorship for the first two years of the British Champions Series. The 2012 series culminates in the QIPCO British Champions Day at Ascot in October, where GBP3 million (QAR17 million) alone in prize money is on offer across the final races in each of the five QIPCO British Champions Series horseracing categories.

(Photo by Alan Crowhurst/Getty Images)

TheEDGE

13

NEWS Etcetera

NEWs Etcetera SDC announces winning entrepreneurs at Reyada Awards Social Development Center (SDC), a member of Qatar Foundation for Education, Science, and Community Development, announced the award winning entrepreneurial projects for the first series of the Reyada Awards for Qatari Entrepreneurs in a prestigious ceremony held at the Qatar National Convention Center in May. The awards were presented to the winners by HE Munira bint Nasser Al Missned, chairperson of the board of trustees, SDC, accompanied by Amal Al Mannai, executive director, SDC, as well as a number of VIPs and renowned figures in Qatari society.

Winning entrepreneurs in the New Venture Challenge category included Lulwa Al Mansouri, who earned the golden award, followed by Mohamed Mansour Al Sharshani, recipient of the silver award.

Saleh Alaidh was also awarded first place for Entrepreneur Achiever Award while Shams Al Qasab ranked second in that category. In the Outstanding Entrepreneurial Support Award category, Vodafone earned the golden award for its dedicated corporate social responsibility efforts to support entrepreneurship, while the College of the North Atlantic earned the silver award in the same category.

Congratulating the winners of their achievements Amal Al Mannai, executive director, SDC, said: “I am immensely proud and amazed to witness some of the exemplary entrepreneurial projects that have earned the first set of Reyada Awards.”

“The Arabic word Reyada means leadership. The Reyada Awards were conceptualised with the intention of cultivating fresh ideas and unleashing the

entrepreneurial spirit in those individuals who actively strive to make a difference in Qatar. Today, I congratulate those who have transformed Reyada Awards from a mere concept into reality, and have begun fostering a spirit of innovation and healthy competition in our country, which will in effect lead to not only a more prosperous economy, but an enhanced, stable society.”

Hilton Worldwide and Al Faisal Holding Company To Launch DoubleTree by Hilton in Qatar With Two Major Developments Hilton Worldwide and Al Rayyan Tourism Investment Company (ARTIC), part of Faisal Holding Company LLC, one of Qatar’s largest private diversified industry groups, recently announced the joint signing of a management agreement for two new DoubleTree by Hilton properties in the Qatar capital, Doha.

Both developments, the 145-room DoubleTree by Hilton Doha -Al Sadd and the 240-room DoubleTree Suites by Hilton Doha, are expected to open in 2014 and will join a further three Hilton Worldwide pipeline

14

TheEDGE

properties due to open in Qatar over the next three years.

DoubleTree by Hilton Doha-Al Sadd will be located in Doha’s main commercial and retail district. The DoubleTree Suites

by Hilton Doha will be located in the Doha upscale financial and diplomatic districts of West Bay. Sheikh Faisal bin Qassim Al Thani said that the company, which also acquired the Radisson Blu Hotel in Chigaco in the US recently, were delighted to be working with Hilton Worldwide.

The DoubleTree Suites by Hilton Doha will include a mix of one, two and three-bedroom accommodations within a luxury, 52-storey, and high-rise complex expected to the completed by 2014.

NEWS Etcetera

Silatech-Supported World Bank Report Gives Moroccan Youth a Voice

A new report from the World Bank finds that almost half of all Moroccan youth between the ages of 15 and 29 are neither working, nor in school. Promoting Youth Opportunities and Participation in Morocco examines the causes for this widespread inactivity, and offers a series of proposals for supporting greater inclusion of young people into the social and economic life of the country. The report was supported by Silatech, a Doha-based social initiative, which aims to connect young people in the Arab world with employment and enterprise opportunities.

Based on innovative research that focuses directly on the personal views and experiences of young people, the report represents one of the most comprehensive analyses of youth issues in Morocco and highlights critical issues as regards the high level of inactivity – not just unemployment – among youth in Morocco. Two thousand households across the country were surveyed, and interviews conducted with 2883 young people residing in those households, along with numerous focus groups, to record the aspirations of a diverse cross section of the country’s youth and to identify the barriers that are holding them back.

CITYSCAPE QATAR Completed in Doha

Cityscape Qatar, backed by industry leaders, is an event that supported Qatar’s continued real estate growth by providing a showcase that highlighted high growth investment opportunities, presented innovative products and underlined sustainable developments. Cityscape Qatar served as a platform to bring together international, regional and local investors, architects and designers, real estate developers, governmental authorities and senior executives involved in the design and construction of public and private real estate developments from Qatar and internationally.

QFIB Sponsoring Al Fikra Qatar Business Plan Competition Awards

Emad Mansour, chief executive officer of QFIB and member of the judging panel of the final session of the Al Fikra competition.

In line with Qatar First Investment Bank’s (QFIB) commitment to encourage innovation and contribute to the development of the small and medium enterprise (SME) sector in Qatar and the Middle East and North Africa region, the bank announced sponsorship of the second annual Al Fikra Business Plan competition awards, organised by Enterprise Qatar.

SMEs are vital contributors to the economy. They play an important role in the diversification of income and creation of employment, specifically in a country like Qatar, which is witnessing phenomenal growth rates across all sectors.

Aimed at developing a national culture of entrepreneurship, the key objectives of the competition include providing young entrepreneurs with professional guidance from industry experts.

NEWs IN BRIEF

INJAZ Qatar hosts Mubadara 2012, Young Enterprise of the Year competition As part of its commitment to the human development pillar of the Qatar National Vision 2030, INJAZ Qatar, a non-profit organisation and affiliate of Junior Achievement (JA) Worldwide, celebrated the success of Mubadara, the 5th Annual Young Enterprise of the Year competition recently.

QFC Authority publishes its first ‘GCC Insurance Barometer’ The report, which is based on 20 in-depth interviews with senior executives of regional and international insurance companies and intermediaries operating in the Gulf Cooperation Countries region, highlights the main strengths, weaknesses, opportunities and challenges of the US$ 15 billion (QR54.6 billion) GCC insurance marketplace, the near-term pricing and profitability outlook, prospects by lines of business as well as major trends and drivers. Download the full report at www.qfc.com.

MEEZA Leader In IT At Arab Achievement Awards in Abu Dhabi MEEZA, the leading information technology (IT) services and solutions provider in Qatar, has been recognised as the ‘Leader in IT’ in the Arab world, during the prestigious Arab Achievements Awards.

The ceremony took place during the renowned Arab Investment Summit, which was held in Abu Dhabi, United Jean-Philippe Sohier, chief Arab Emirates marketing officer of MEEZA recently. receives the award.

TheEDGE

15

NEWS ETCETERA

2012

EVENTS CALENDAr EVENTS CALENDAR jUNE

3–7

World Stadium Congress 2012

10 – 13

2nd Underground Infrastructure and Deep Foundations

10 – 13

Lean Six Sigma Middle East

14 – 16

Doha Startup Weekend For a full and comprehensive calendar of events in Qatar please visit www.theedge.me

“Those who need to stay on (in Lebanon) should contact Qatar’s embassy in Beirut.”

Qatar News Agency (QNA) quoted the foreign ministry of Qatar as saying. Qatar, Bahrain and the United Arab Emirates have urged their nationals to avoid to travel and exit Lebanon for security reasons as fighting has erupted in the borders between Syria and in northern Lebanon. The advisory from the three states warns ahead of the long summer, which is a favourite holiday destination of Gulf Cooperation Council citizens.

16

TheEDGE

NEwS IN QUOTES “As Afghans stand up, they will not stand alone…we are now unified behind a plan to responsibly wind down the war in Afghanistan.”

Barack Obama, president to the United States (US) said during the recent two-day alliances summit. Leaders of the North Atlantic Treaty Organisation have sealed a landmark agreement to hand control of Afghanistan over to its own security forces by the middle of next year, putting the Western alliance on an “irreversible” path out of the decade-long war.

“We must set an example for the youth of Qatar, inspire them to excel, and place emphasis on enhancing creativity. This year we saw a group of extremely talented and motivated young individuals who presented creative, viable products to the judging panel. Seeing the potential of these young students fills me with great hope for the future of Qatar.”

Ashraf Abu Issa, INJAZ Qatar founding board member and chairman of Abu Issa Holding said during the recent celebrated success of Mubadara, the 5th Annual Young Enterprise of the Year competition at Katara, organised by INJAZ Qatar.

“The Israeli premier is now required to take a longawaited step towards achieving peace. And the peace must be based on cessation of [Jewish] settlements [in occupied Palestinian territories], the 1967 borders and the two-state solution…Palestine is the last Arab homeland that has not been given its freedom [to] date, and it’s time to earn it.”

The Emir HH Sheikh Hamad bin Khalifa Al Thani speaking at the 12th Doha Forum and Enriching the Middle East’s Economic Future at Sheraton Doha recently. The Emir reminded Israel, without mentioning any [Arab] country, that it should not be betting on others against their people or it would be isolated and left with no friends.

“This is strictly prohibited…we will work day and night until these beloved people are with us.”

Sheikh Hassan Nasrallah said in a televised speech recently. The leader of Lebanon’s Shi’ite militant group Hezbollah has appealed for calm after people blocked roads and burned tires in Beirut to protest the kidnapping of 11 Lebanese Shi’ites in neighbouring Syria.

QATAR IMPACT

AVAILABLE

The World Cup is coming to Qatar in 2022, and the country needs a lot of hotel space to cope with the influx of people. But what happens with all those spare beds in the meantime, and after the big event? Kamahl Santamaria investigates.

i

have always been fascinated by the way hotels are such a prominent part of life in Qatar. The fact that they contain top restaurants, serve alcohol, allow you to join their health and spa clubs, host major conferences – it all means they become a part of the everyday landscape.

And for a small town, Doha’s never been short on top-class hotels. Starting with the grand old lady the Sheraton, to the Middle East’s first W Hotel, and now a major St Regis development.

But there is a problem. Or at least there could well be a problem in the coming years, as dozens of new hotels come onstream and create an oversupply of beds and facilities for what is a limited audience.

Consider that Qatar National Hotels, which was recently rebranded as Katara Hospitality, already has 4000 four and five star hotel rooms under its management across eight properties. It has another 1000 rooms planned for a major development in Lusail City. Across the whole country there are – including Katara’s – more than 100 properties, totalling 44,000 rooms.

Add in another 55,000 or so planned for the World Cup – to comply with FIFA guidelines – and you can easily see the major oversupply in the lead up to and after the World Cup.

18

TheEDGE

And on top of that, there are some major factors that may work against the viability of all these hotels.

For a start, Doha is not yet a bona fide tourist town, and the big players know this.

Simon Casson, General Manager of the Four Seasons Hotel Doha told TheEDGE: “The season is October to May really, and most business is done within these months…Qatar is predominantly a business, conference and meetings market. The leisure segment is small but growing.”

What is also growing is Qatar’s population, but it is really only a small proportion that will actually patronise the hotels. Restaurants, events and memberships are all pitched at those with disposable incomes – a market which will always exist – but remember the majority of Qatar’s expatriate population sends its money home as remittances. If you have too many hotel options, you are spreading a limited base pretty thin.

Still, it is not putting some of the world’s biggest hospitality names off from setting up shop here.

The newest addition to the hotel landscape is the St Regis Hotel, which opened in May. In an interview with me for Al Jazeera English, Frits van Paasschen – the president of its parent company Starwood Hotels and Resorts – said: “When we open a hotel, we open it with an eye towards the next 20, 30 or 40 years… when

a market is growing this fast, will there be fits and starts in terms of supply and demand? – absolutely. Over the long term am I concerned about it? – absolutely not.”

Over at the Four Seasons, Simon Casson thinks survival in a crowded marketplace is about trusting what you do: “Back in 2005, when we opened the Four Seasons, we quickly assumed the leadership position in RevPAR (revenue per available room) and have not relinquished it since. This past performance is probably the surest indicator of future performance. So, concerned, yes, as the supply is disproportionate to the demand…worried, not so much, based on the confidence I and our guests have in our product and services.”

In the end, those of us who have been here for five or more years know how much the country has grown. It has probably surprised most of us too. So perhaps it is not beyond the realm of possibility that Doha will need a large hospitality sector, particularly with the strain we already see on hotel rooms during major conferences.

It seems new hotels are entering the market with a long-term view to success.

What is less certain is whether the more difficult short-to-medium term will not prove their downfall first.

Kamahl Santamaria is a Doha-based news anchor with Al Jazeera English and host of the channel’s business and economics programme Counting the Cost.

SUBSCRIPTION

SUBSCRIPTION FORM 2012 TheEDGE is Qatar’s dedicated monthly business magazine.

TheEDGE incorporates a mix of industry news and analysis, in depth features, special interviews with key business decision makers, economic insight and market activity reports, and tips for how you can improve your day-to-day business operations.

TheEDGE is delivered straight to the door of the targeted business community.

To ensure you keep up-to-date, with what is happening in Qatar’s business landscape, please fill in the subscription form (below) to receive TheEDGE on a monthly basis.

Subscription is FREE (in Qatar). Forms are to be addressed to the Subscriptions Department at: TheEDGE Subscriptions Department Firefly Communications 11th Floor, Jaidah Tower PO Box 11596 Doha, Qatar

Last Name : First Name: Address: Company: Designation: PO Box: Area Code: City: Country: Tel: Email: Date and Signature: 20

TheEDGE

ENERGY & RESEARCH

Can Doha learn from Spain’s

In recent years Qatar has benefitted from its ability to forge friendships with a host of other countries. And through its latest relationshipbuilding exercise, this time with Spain, Doha stands to gain in the field of renewable energy. Jamie Stewart reports.

A

t the national scale, the energy sectors of Qatar and Spain, in southwestern Europe, have both much in common geographically, but much that separates them economically.

On the similarities side, each has an

abundant supply of sunshine, with plans afoot for huge development of solar power generation infrastructure to aid energy security through low-carbon electricity production.

Each has a vested interest in the gas sector. In Spain, gas occupies around 15 percent of the power generation mix annually, while Qatar is

heavily dependant on gas-fired production.

On the economic differences side however, the nations could not be further apart. While Qatar’s coffers continue to swell and it looks to unveil an expansionist budget boosted by gas export income, Spain is caught up in the European debt crisis; a highly

The Spanish Business Council in Qatar and IBQ organised a lecture recently, hosted by José Carlos García de Quevedo, director general of trade and investment of the Spanish Ministry of Economy and Competitiveness (pictured left) and Bhupendra Jain, head of corporate banking at IBQ (pictured right).

ENERGY & RESEARCH

In Spain, gas occupies around 15 percent of the power generation mix annually, while Qatar is heavily dependant on gasfired production. indebted country embarking on a programme of austerity. Far from expanding its budget, Spain is reining in its spending.

And it is this complex mixture between disparities and similarities from which each stands to mutually benefit: Qatar in the field of renewable energy, and Spain in the field of trade and commerce.

SpaNISH gain The importance of the relationship is not lost on the Doha-based Spanish Business Council in Qatar, or on the International Bank of Qatar (IBQ).

Speaking at a lecture organised by the Spanish council and IBQ in Doha, Spanish Ministry of Economy and Competitiveness director general for trade and investment José Carlos García de Quevedo said that bilateral trade and investment relations between the two countries have increased over recent years but sill have “far to go”.

In 2011, the total budgetary deficit of Spain stood at 8.5 percent of its gross domestic product (GDP) according to official statistics site Eurostat. This means national expenditure exceeded income by 8.5 percent of the country’s GDP. Compare this to Qatar. Latest figures from the Qatar Central Bank reveal a surplus, as opposed to a deficit, in Doha over the first nine months of 2011 equivalent to 4.9 percent of GDP – meaning the state earned

22

TheEDGE

considerably more than it spent.

Countries such as Spain have much to gain from increasing trade relations with Doha: “Foreign trade and investment will be the key for future economic growth and employment creation,” de Quevedo said, outlining the importance of certain strategic partners – like Qatar – in this process.

Qatari benefit Given that Spain is seeking to boost its bilateral trade with resource-rich Qatar – not an unusual tactic among debt-burdened European nations in recent years – what does Doha stand to gain from the relationship?

Among Doha’s long-term goals, and key within its overarching National Vision 2030, is a drive to ensure sustainable development.

The plan points out the dangers of financial returns from hydrocarbon wealth “being used inefficiently [and] delivering low returns”.

As it says, “Qatar wants to make up ground quickly, but there are speed limits”.

Within this space, Qatar can potentially learn much from Spain. In 2012 to date, Spain’s non-renewable electricity generation sector – its power plants that burn fossil fuels – have accounted for 64 percent of its total power generation. Its renewable sector made up the remaining 36 percent – at more than a third this is a huge percentage, comparatively speaking, for an industrialised country.

By contrast, despite an almost unlimited resource in terms of solar power, Qatar’s total power generation capacity is almost exclusively gas-fired, which has proved enough to give the country a surplus of power for export purposes, but this must change over time if the sustainable development goal is going to be achieved.

Against this backdrop, Spain has the potential to act as a regulatory and political model if Qatar is to put in place the incentives required to boost power generation from sustainable, renewable sources.

Speaking in Doha in early May, Qatar University Energy Forum director Rudiger Tscherning said: “It is important to focus on a medium to long-term timeframe. The regulatory environment that is in place now will influence future energy projects for a long time.

“It is important to establish clear

frameworks for energy management planning and the associated considerations for environmental sustainability now to plan for the next phase of major projects,” he added.

Qatari quota?

Qatar has already put in place the building blocks to follow in Spain’s renewable energy footsteps. Qatar Solar Technologies (QST), aligned to the Qatar Foundation, is building a huge solar grade polysilicon plant – the material used to construct solar panels – in Ras Laffan Industrial City.

QST is aiming for completion of the first phase in late 2013, while full operations will begin early in 2014. In Spain’s case, generous state-sponsored subsidies were offered to developers in order to boost power production from renewable sources. In Qatar’s case, the government is also playing a leading role, via the state-run Qatar Foundation.

But some believe more can be done. “Qatar doesn’t have a specific policy in place to help facilitate the development of renewable energy infrastructure,” Rajini Harikrishnan, associate at law firm Sultan Al Abdulla & Partners, says.

“If Qatar is to follow international standards and trends for renewable energy projects, it has to build a political strategy and a legislative framework for renewable energy, both of which are missing at present.”

According to Harikrishnan, like many countries including Spain, Qatar should adopt laws to make development and production of renewable energy resources more economically attractive. “Rebate and loan guarantee programs for renewable energy developers and owners should be initiated,” he explained.

Harikrishnan pointed to countries that employ quota systems: “The idea is that a certain amount of energy from renewable sources is mandated, but how this done and at what cost is left to the market to decide.

Under the quota system, companies failing to meet the obligations to purchase the regulated amount of renewable energy must pay a penalty,” he said.

Qatar has a long way to go in pursuit of its renewable energy goals, while Spain has far to travel in pursuit of its economic ones.

But each can shorten its journey if it learns from the other.

ENERGY & RESEARCH

Energy sustainability efforts in GCC ‘fragmented’, industry body warns The shift towards a sustainable energy system across the Gulf region has been hampered by uncommon regulatory frameworks between different countries – or in some cases, within the same country – a major clean energy body has warned. Jamie Stewart reports.

A

s a result of the regulatory constraint, “only fragmented efforts have been realised so far” in the field of energy efficiency, the European Union-Gulf Cooperation Council (EU-GCC) Clean Energy Network said in a statement following a three-day meeting of its members in Doha in mid-May. The body highlighted disparity between regulatory frameworks across the region as being among “a number of challenges, barriers, and collaboration opportunities” that it had indentified, including the existence of different regimes within the same country – such as the United Arab Emirates (UAE), where Dubai and Abu Dhabi have implemented different building codes.

The EU-GCC Clean Energy Network was established in 2009 to support the long-term energy relationship between the two regions, with a particular focus on clean energy issues.

Many GCC countries are seeking to channel earnings from hydrocarbon exports into renewable energy and energy efficiency as a means of diversifying economies, while ensuring that the region maintains its leadership position in an evolving sector.

Similarly, countries are treading the same development path, although as a bloc EU states’ energy sustainability programmes are more advanced than those of the GCC nations.

Progress Demand side measures, such as energy efficiency, are seen as key to reducing

consumption and boosting the overall sustainability of national energy systems.

But according to the EU-GCC network, the regulatory disparities must be addressed.

The group highlighted steps taken by particular GCC countries to speed up progress.

It said “solid case studies” should be put on the ground to demonstrate the potential for energy efficiency measures, such as Qatar’s Downtown Doha Project being developed by Msheireb Properties, which it labelled “a very ambitious initiative”.

The statement also pointed to “efforts to deal with the problem of fragmented activities”

in Bahrain, where the government has established a national energy agency to oversee and coordinate previously disjointed projects across the country.

In addition to fragmented regulation, comparatively low energy prices were also hampering demand-side sustainability measures, because the financial incentive to cut consumption was not sufficient to incentivise the necessary action, the group said.

“However, it is quite promising that a lot of research is being conducted and potential fertile cooperation ground among EU and GCC countries exists,” it concluded.

Qatar’s Downtown Doha Project currently being developed by Msheireb Properties and labelled as a state of the art ambitious energy efficient initiative.

TheEDGE

23

Country Focus

SWEDEN:

ENHANCING BILATERAL TRADE

T

he Kingdom of Sweden is a Nordic country in the Scandinavian Peninsula situated in northern Europe. In parts of the country there are only around 46 to 79 days of sunshine a year and in the North of the Arctic Circle, the sun never sets during a certain period in summer and never rises for part of the winter.

Qatar is an independent emirate on the Arabian Peninsula and unlike northern Europe, the climate is humid and hot during summer with less than three inches (75 millimetres) of rain annually.

Nevertheless, despite the extreme opposite climates, both peninsulas do share some common ground. Qatar ranks among the highest per capita gross domestic product (GDP) in the world and is considered the richest Muslim nation.

According to the World Bank, Sweden’s GDP is worth US$458 billion (QR1.6 trillion) or 0.74 percent of the world’s economy.

In 1960 to 2010, Sweden’s average GDP was US$171.45 billion (QR624 billion), which escalated to US$ 486 billion (QR1.6 trillion) in 2008 and recorded a historical low of US$14.84 billion (QR54 billion) in 1960.

In 2010 Sweden ranked fourth in The Economist’s Democracy Index and ninth in the United Nations Human Development Index, and is the second most competitive country in the world after Switzerland, according to the World Economic Forum.

In 1995 Sweden joined the European Union (EU) and is the third largest country in the EU by area, however the Swedish kronor remains the currency of choice and there are no plans in the near future to replace the kronor with the euro.

The EU has respectfully accepted Sweden’s decision to remain outside of the eurozone. Olli Kehn, the EU commissioner for economic affairs has stated that this is up to the Swedish people to decide.

There are approximately 5000 Swedes residing in the Gulf

The Scandinavian and Arabian Peninsulas have differing but extreme weather, yet they share many similarities in the economic aspect. Erika Widén reports on how both boast among the highest GDPs in the world and their potential opportunity for bilateral trade.

Cooperation Council (GCC]. TheEDGE spoke with Max Bjur, Swedish ambassador to the United Arab Emirates (UAE), Bahrain, and Qatar about the bilateral relations between the three regional countries and Sweden.

“The Swedish population in Qatar is quite small, around 100 people, but we can clearly see a growing interest from Swedish companies to establish themselves in Qatar, so I’m quite sure there will be more Swedes soon,” said Bjur.

Since the establishment of the Swedish embassy in Abu Dhabi in 2002, the relationship between all three regional countries has developed in many areas, especially in trade. Dr. Ewa Björling, Swedish trade minister and foreign minister, Carl Bildt have made several official visits to the UAE, Qatar and other countries in the region in order to deepen and enhance the bilateral trade.

Currently there is no written bilateral memorandum of understanding (MOU) between Qatar and Sweden, but Burj hopes that a general MOU on closer cooperation will materialise soon, and a draft is being worked on.

Sweden’s economy is an export-import mix, featuring a modern distribution system, superb internal and external communications and a skilled work force.

Hydropower, iron ore and timber feature highly in foreign trade.

Fifty percent of Sweden’s engineering sector account for output and export. In addition to the automotive, telecommunications and pharmaceutical industries are of great significance to the country’s highly developed economy.

Swedish exports to Qatar are approximately KR1.7 billion (QR800 million), and the main areas for imports are iron, steel, vehicles and engineering products, whereas Sweden mainly imports hydrocarbons from Qatar.

“All the big well-known Swedish companies such as Ericsson,

country focus

According to the World Bank, Sweden’s GDP is worth US$458 billion (QR1.6 trillion) or 0.74 percent of the world’s economy.

Volvo, IKEA, Atlas Copco and ABB have been established in the GCC for many years, but we can also see that more SMEs in areas such as cleantech, energy and healthcare,” added Bjur.

Approximately 20 Swedish companies participated in the recently held Project Qatar exhibition, representing a wide range of Swedish businesses, from small solar energy companies to Volvo and Scania with heavy trucks, buses and construction machines.

“The [Swedish] embassy works in close cooperation with the Swedish Trade Council, and together we focus on the big and most important exhibitions, for example Project Qatar in Doha, World Future Energy Summit in Abu Dhabi and Arab Health and Gulfood in Dubai,”said Bjur.

Qatar Airways has been operating direct flights to Stockholm since 2007 and in 2010 expanded to a daily service and a wide body Airbus capacity, with the A330. The expansion has not only widened Qatar Airways reach in the Nordic region of Scandinavia with more flights and bigger aircrafts, but also offers further bilateral opportunities for both nations.

Msheireb Properties last year awarded Sweden’s ENVAC AB a major contract to install a state-of-the-art automated waste recycling system for its flagship Msheireb Downtown project in Doha. A mixeduse QR20 billion development is expected to be completed in 2016.

Moreover, the trendy global retail clothing brand Hennes & Mauritz (H&M) is one of Sweden’s largest companies. Known for its latest fashion quality clothing at an affordable price, the brand is available throughout Doha’s main shopping malls.

The Swedish economy went into a recession in the third quarter of 2008 and continued in further turmoil in 2009 as following the global crisis export demand and consumption declined, however strong exports and return of profitability by Sweden’s banking sector drove the strong rebound in 2010. The largest trade partnerships are with Germany, the United States of America, the United Kingdom, Denmark, Finland and sister country Norway.

Burj believes that Qatar is a vibrant place with a huge potential for more Swedish business and a stronger presence in the near future.

SWEDEN AT A GLANCE Population: Around 9.4 million GDP per capita (2010): US$39,100 (QR142,324) Government: Constitutional monarchy with a parliamentary democratic government.

Main Industries: Timber, hydropower, and iron ore.

TheEDGE

27

OPINION

NEWS CAN NO LONGER BE KEPT SECRET

OPINION

Talk of reform – especially in the current climate prevailing in the Arab world – tends to focus on the impact of change on a country’s constitutions and laws. Dr. Yasser Thabet discusses an overlooked area that is often is the main beneficiary of reform: the media.

B

arriers to freedom of expression and openness are disappearing across the Arab world.

Innovation and technology have changed the media landscape, leading to the creation of a new generation of information consumers that is dependent on mobile communication through the iPad, iPhone, Android phones and other mobile devices. The way people communicate has changed through such tools, allowing users to connect and express their views anywhere, anytime via an array of social media networks such as Facebook and Twitter.

The methods of newsgathering and distribution have also entered a significant new stage in their development on the back of this communication and information revolution. No longer are communication and news a binary relationship between a sender and receiver; rather, multiple media platforms now come together to create an interactive dialogue, providing the public with a fuller and more rounded picture of news and current events.

Beyond the technological revolution, the news industry is also undergoing profound changes in terms of budget allocations, the training and qualification of journalists, the mobility of news media across countries, allowing for diversity of views and local insights as well as higher demands for editorial and visual creativity in news reporting. Today the only impediment to the reporting of a story is in the journalist’s imagination.

Arab satellite channels, especially news channels, have played a key role in paving the way for freedom of information in the Arab region. Successfully delivering quality news coverage from across the globe. It is thanks to the demands of Arab

audiences for high quality, professional news produced to international standards that we see homegrown Arab channels able to compete with Western-based news outlets. Audiences are no longer dependent on getting their information from foreign sources, and can instead expect local news in their own language delivered by Arab journalists who have an understanding of what makes news here.

There are two fundamental reasons for the success of the Arab news channels. First their capacity to influence the removal of barriers and restrictions, that hindered the provision of quality news coverage. Secondly, the emergence and widespread penetration across the region of Arab satellite channels, which were able to reach audiences previously missed by the print media due to high rates of illiteracy. Reaching a larger segment of the population increased participation and further impacted the ability to push down barriers where they existed.

Another fundamental shift for Arab news channels, beyond the changing rules in news reporting, is the need to cater to a new generation of viewers who consume media in ways very different to their predecessors. As a result, news in the region is increasingly communicating across multiple platforms including online, mobile and live Internet broadcasting in addition to traditional television broadcasting. This creates a need to understand the importance of presenting news in ways that grab the attention of the viewer and makes following the news enjoyable as well as informative.

The act of reporting therefore becomes a key component in the development of the news, offering an additional layer of information that is both in-depth and interesting in

terms of explaining the news and taking into account differing views and opinions in relation to a story.

The final trend in news reporting across the Arab world is speed. In a dynamic region that is witnessing dramatic changes and fastpaced developments, news channels must be able to respond at a pace equal to the evolution of events. Doing so is the only way to retain the confidence of an increasingly demanding and ever questioning audience thirsty for up-to-the-minute news.

Bearing in mind these developments in the Arab media scene, and given that public awareness and engagement in the Middle East and North Africa is at a historical high, audiences have become more important than ever. News outlets must ensure the information they provide is accurate, credible, communicates visually and can be substantiated. The days of having a passive audience that accepts spoon-fed news are long gone. The Arab viewer will question, challenge and offer an opinion. Any newsroom competing in the Arab news space has to critically and innovatively consider how to simultaneously provide viewers, readers and listeners with cutting edge news without compromising quality, both in terms of content and visual appeal.

It is essential for Arab channels to build bridges with citizen journalists in order for the public to evolve from being simple spectators of the news to becoming active players in the creation of it.

Dr. Yasser Thabet is head of output at Sky News Arabia.

Arab satellite channels have played a key role in paving the way for freedom in the Arab region.

TheEDGE

29

SPECIAL FOCUS

COMBAtING CYBER CRIME IN THE GULF As Qatar’s economy and aligned infrastructure progress rapidly, cyber crime knocks harder at the doors of emerging nations – affecting businesses and individuals more than they may know. Richard Gayle unpicks the hotly discussed topic and provides tips on how to avoid being susceptible to cyber crime.

SPECIAL FOCUS

e

-crime costs companies globally US$1.7 trillion (QR6.1 trillion) every year and its insatiable appetite sees no sign of being satisfied soon. Yury Fedotov, head of the United Nations Office on Drugs and Crime (UNODC) stated that cyber crime generates an estimated US$2.8 trillion (QR10 trillion) in global annual proceeds, or 3.7 percent of the world’s gross domestic product (GDP).

The trends of e-crime in the Gulf Cooperation Council (GCC) are disturbing.

While profitable industries such as the finance, oil and gas, hospitality and retail sectors are left most at risk, no business or individual is completely immune.

Criminals attack organisations which have a slower security response, are less reactive to security attacks and have insufficient in-house expertise and experience due to insufficient business investment. These are often small to medium sized businesses.

Because of the increased recent arrests and prosecutions from large-scale attacks and data breaches on financial services firms the criminals are changing tack, opting to play cyber crime safe and target the smaller and non-financial organisations – making it harder to catch them. Matters can get very serious when individuals and organisations are affected and your identity and company property is stolen for criminal or terrorist activities.

The most alarming statistics come out of the United Kingdom (UK). E-crime/ fraud and intellectual property (IP) fraud is costing the UK economy alone around GBP27 billion (QR98 billion) every year – a hard lesson for any government to learn.

More than half of the small to medium enterprises (SMEs) that suffer e-crime go out of business within one year of the attacks, and their cash flow and capital reserves are severally depleted for several months if they survive the attack.

E-CRIME IN ThE GCC What is shocking about this kind of fraud in the GCC is the high levels of IP and identity (ID) theft. If we look at the 2011 statistics out of the United Arab Emirates (UAE), credit card and debit card breaches are costing the banking industry an unsavoury US$55 million (QR200 million).

The cost in lost business opportunities and reduced revenues account for 69 percent of the total data breach costs, an average of US$4.59 million (QR16 million) per breach, or US$139 (QR505) per record. Case in point would be ‘The Dubai Skimming Cash’ point (ATM) scams where organised fraudsters stole customer bank details and netted around US$600,000 (QR2.1 million) in just eight days. Several thousand banking customers were affected.

The increase in this type of criminal activity is kept fed through the economic boom and expansion, where e-crime education and prevention has not been taken seriously by national governments. To combat e-crime, collaborative initiatives are required from national governments, local regulatory bodies, intelligence agencies, large security vendors and management consulting firms.

Another method to combat this specialised style of crime is through greater regional and international cooperation to track down the perpetrators and secure quicker convictions, underpinned by greater international crossboard e-crime laws. Currently there are insufficient laws and regulations to counteract these ongoing challenges. Following the United Arab Emirates (UAE) federal government’s e-crime bill in March 2007 and the continuing financial and economic crisis, cyber crime, identity theft, and intellectual property theft is at an all time high. Qatar and Abu Dhabi are seen as financial ‘honey pots’ to inside and outside attackers. The scale and complexity of the attacks, breaches and ongoing investigations is continuing to escalate in the region.

TIPS FOR COMPaNIES TO COMBaT E-CRIME • Mitigate external and internal attacks, securing public and private facing infrastructure, websites, data, and assets.

• Take regular advice from the specialists on current technology weaknesses, IT security threats, vulnerabilities and enterprise risks faced.

• Engage in cross-collaborative security initiatives.

• Invest more in incident handling, management and forensic. programmes.

• Eliminate all unnecessary data.

• Ensure essential enterprise risk controls are prescribed, met, reviewed and managed.

• Assess remote access services and 3rd party relationships.

• Audit your user account information regularly and monitor privilege activities.

• Examine devices for skimming and tampering such as cash points (ATM’s).

• Have in place physical risk controls to deal with physical theft.

On a positive note, however, governments are slowly starting to sit up take notice of the damage e-crime can do. Prevention should be the attitude though, not cure, and further regulation should be implemented by central governments and computer bodies to encourage companies and individuals within the information technology (IT) security/ IT professional consulting industry to maintain standards and compliance. This is the framework used in the legal and financial services sector in the UK for example, which if copied in IT and IT security industries, can only promote greater ethical responsible business practices. Regulation should especially apply to companies and individuals developing ethical hacking software, systems and standards.

Richard Gayle is managing director at London Global Associates.

TheEDGE

31

AlfArdAn ProPerties lAunches innovAtive e-concePt

‘mydohahome.com’ website facilitates people to browse through all available Alfardan Properties-managed residential and commercial properties in Qatar June 2012 Alfardan Properties has announced the launch of a new website www.mydohahome.com, an innovative e-concept that facilitates people from anywhere in the world to browse through all the available Alfardan Properties-managed residential and commercial properties in Qatar. The ‘mydohahome.com’ initiative enables those seeking to lease high quality units in any of Alfardan Properties’ developments get a comprehensive overview of the property, especially its main features, amenities and services.

Muhiballah Mani, COO, Alfardan Properties, said,

“The ‘mydohahome.com’ concept is yet another innovation from Alfardan Properties, in line with our relentless efforts to identify market requirements and respond with appropriate solutions that exceed the expectations of our target audience. This website is being launched at a time when Qatar is increasingly gaining global attention and is emerging as a major Middle Eastern hub.

We believe that this web solution, which features unique residential and commercial real estate options, will benefit people from across the region planning to live

and work in Qatar. The Concept and object of the website is to facilitate searching for real-estate options in Doha and to present all those who plan to move to Doha or change their current residences unique luxury options provided by Alfardan and Alfardan Properties.”

Visitors to the website can easily screen through the available properties looking for their requirements by just filling out the desired location, unit type, size, facilities, leisure and recreation amenities, etc. to which the selections would be filtered accordingly.

A complete property description would

then be highlighted taking the users to the official website or registering them with a leasing agent who would then contact the user immediately.

“Over the years, Alfardan Properties has built an excellent reputation for developing high quality, luxurious residential and commercial properties in prime locations across Qatar. The new website will provide all the required information regarding the available properties in a user-friendly format so that the potential tenant can make an informed choice,” he added.

The ‘mydohahome.com’ website, which is developed and managed

by Alfardan Properties, offers site visitors who register their inquiry, an instant 360-degree solution for their requirement, covering availability of units, specific services and facilities, for both residential and commercial properties of the company.

The website will feature units from some of Alfardan Properties’ renowned developments such as Alfardan Towers, a fusion of residential and commercial amenities in a luxurious

development; One Porto Arabia, the first property available for lease on ‘The Pearl Qatar’; Laguna Beach, the exclusive villa compound in the West Bay Lagoon; Kempinski Residences & Suites, which has been credited for establishing new national benchmarks for luxury residences; the Alfardan Gardens; and the recently opened Al Gassar Resort, owned by RDC and managed by Alfardan Group, the exclusive residential complex that offers high-net worth individuals the opportunity to live in a luxurious waterfront community in Doha.

FINANCE & ECONOMICS

Market Watch • Balance Sheet • Special Report • PERSONAL FINANCE • Economic barometer

THE FIGHT FOR THE SURVIVAL OF THE EUROZONE (P.44) Financial instability has never been great across Europe.

Karim Nakhle looks in detail at the deepening and seemingly never-ending crises within the most vulnerable member states of the financial coalition.

ALSO IN THIS SECTION: • Market Watch: Dheeraj Shahdadpuri reports on how the recent elections held in France and Greece have focused on the topic of ‘Austerity versus Growth’. (P.36) • Balance Sheet: Krishnaswany Venkatesh writes on how individual and family business can prepare for a successful listing to become publicly traded enterprises. (P.38) • Special Report: Thomas Bacon examines how Qatar’s huge investments in infrastructure are contributing to an excellent construction sector outlook in the country. (P.40) • Personal Finance: Adrian Bliss writes about the importance of creating a will and testament for expatriates and the local and international laws to be considered when drafting it. (P.42)

Brought to you by:

MARKET WATCH

AUSTERITY VS. GROWTH – THE DEBATE RETURNS

BY DHEERAJ SHAHDADPURI

The recent set of elections in France and Greece has once again brought back the long debated ‘Austerity vs. Growth’ topic at the decision table for the euro area policymakers. After fighting the crisis for more than two years, where the dreaded word austerity was chosen over short-term economic prosperity, the return of the Socialist Party in France and stale mate in Greece’s election has created new round of uncertainties for the euro area. The general public has sent out a clear message to political parties that relentless budgetary cuts introduced under the austerity measures are not acceptable. This angst to a great extent is justified, as the pressure to limit spending has further choked the already weak economic activity, and in turn has pushed the unemployment rate even higher. Opposing the current policies, the new French leader has made his position clear by revealing the pact to curtail debt should be re-negotiated and measures to stimulate growth must be introduced at the same time.

The initial reaction of the global financial markets to the recent developments in the euro area has been a little concerning. Investors are worried that the voice raised against austerity can jeopardise the progress that has been made so far in addressing the high debt levels of many euro nations which is not sustainable in the long run. Given the fact that economic growth and government austerity are not mutually exclusive, any failure to make a steady progress in bringing debt levels down in the euro area can give rise to crisis of confidence that can eventually impact the global economic activity. But in the short run, it seems that we are not going to see any solution to the debate surrounding austerity and growth, and in all probability the euro area policy makers will remain hard pressed to continue moving forward with the agenda of promoting spending cuts (led by Germany) to control the high debt levels, which if left unattended can create panic for the regional economy.

Options with the policymakers are undoubtedly limited at present. If they have to focus on growth, the government will be required to pump in money into the economy by resorting to external financing, which has become costlier over the last few years. This will also initially increase the deficit of the troubled nations, which will be like adding fuel to the fire, and which had only recently started to look in control after the European Central Bank (ECB), washed the regional banking industry with a little more than EUR1 trillion (QR4.6 trillion) in Long Term Refinancing Option (LTRO). Another dimension to this strategy is that investors will not welcome a move like this, and a major caveat with this approach is the growth must also be shared in parallel by the private sector from where the government could earn additional tax revenues.

If this is unlikely to materialise, the government will end up adding more debt to its kitty without achieving the objective of creating a self-sustained economic recovery. Hence, austerity in itself is not so evil given the current circumstances surrounding the euro area.

But it is the blanket austerity that is the culprit and is causing a whole lot of pain. The unprecedented cuts introduced across the board over the last year have not helped in the debt fighting cause and have not stopped troubled nations from seeking external financing, which for a few now comes in the form of bailout money rather

36

TheEDGE

than through the sale of bonds.

With eight out of 17 euro nations in recession, the move is being criticised as it is creating extreme short-term pain for troubled nations. The changing political landscape, especially in Greece, has once again made investors look towards the probability of Greece exiting the euro area to gain independence. By doing this, Greece can resort to printing money (much like the United States) to stimulate economic growth which can also give Greece much needed time to implement structural reforms and bring down its deficit levels.

However, this move sounds easier than what could happen in reality. Although Greece will gain independence, it may find hard to compete against other regional countries to regain exports competitiveness and attract investments without which it will be difficult to rebalance its fiscal position. Also, policymakers (especially Germany and France) would want to avoid any member nation exiting the euro, as it will create doubts in the mind of investors over the bloc’s integration and long term viability, which in itself will impact the economic activity by limiting investment from outside the region.

The All new 2013

malibu

A journey refined

Starting at Q.R. 75,499*

Success never looked so good Wherever you’re headed in life, the right car makes all the difference. Malibu features bold Camaro-inspired design to help you make the right impression.

• Whisper-quiet cabin • Ice Blue ambient lighting • 7-inch color touchscreen radio

• Bluetooth connectivity • Rearview camera • Remote start

*Terms and conditions apply.

Malibu Ad for TheEDGE 21cmx27cm.indd 1

5/31/12 10:57 AM

BALANCE SHEET

Are family businesses in our region ready for listing?

A stock market launch, or initial public offering (IPO), is the first sale of stocks by a company to the public, the famous recent example of course Facebook, the highest IPO in history. Krishnaswany Venkatesh looks at how the GCC’s individual or family businesses can perform a successful listing and become a publicly traded enterprise.

T

he majority of first timers in the public market fail because they focus on the destination rather than the journey. Family businesses wanting to list their shares in a stock exchange continue to carry a lot of apprehension.

Questions often revolve around control (business and the board) and share price. But the question they need to ask is – why do we need to list or go public? Must they establish the ‘need’ or succession? First and secondgeneration family businesses in the region see the need driven by succession planning.

Most family businesses think that taking their business public automatically cushions it from failing as it passes on to the next generation. If this were to be true, it probably is the easiest way to do in order to protect businesses from disintegrating through generations.

Medium to large family businesses in the region have interests in everything from watches, sun glasses, electronics, cars, diamonds, cleaning and maintenance services, electrical, mechanical, manpower supply to manufacturing (cement, readymix etcetera) apart from real estate holdings that is unrelated to business activities. Company borrowings have personal guarantees of shareholders, business assets are in personal names, and

personal assets in books of the business, and the list seems endless.

Individual Businesses Look at where individual businesses within the group stand – in terms of size, growth prospects, maturity, need for capital, technical expertise or updated technology, management pool, systems and integration.

Unless one understands the current state, it will be impossible to shape the future with certainty.

Unfortunately most businesses look at a listing as a regulatory compliance matter. In most cases the first questions asked are: What is the requirement? Is it two year profits?

Three year balance sheets? QR100 million capital? 100 shareholders? Whatever the case, the journey comprises a number of steps, most importantly a full commitment from existing shareholders, and the family who need to live with the decision of going public.

People Issues Let us deal with the most important – ‘people issues’. People in this context include the board, senior and middle management, and remaining employees. In the case of family businesses, people will also include immediate family members

who have an indirect interest and therefore participation in the business. While businesses looking at the people issue typically appoint a reputed consultant and assume he or she will solve the problem, people and culture are factors that need to come from within an organisation. In this instance, for example consultants will help draft appropriate guidelines for the board, management, and role of family members, and family governance.

However, unless there is commitment from all stakeholders to implement those guidelines, one will not have a successful business model that will sustain in the long term. Research has shown that this is most often the single reason for failure in any transition from privately held business to a public company.

This is one of the reasons, most businesses make a two staged transition – stage one is introducing certain private third party investors into the business and the board prior to opening up to the larger public.

This process helps the business, and more importantly the family shareholders and non-shareholder family members to achieve emotional detachment from the day-today operations of the business, thereby achieving separation between the board

BALANCE SHEET

and management. Once this separation and comfort is sufficiently achieved, then a wider public shareholding can be achieved with more ease.

Valuation and IPO Pricing How does one define a successful listing? Are the shares being regularly traded? Is the movement in share price steady and healthy or is it volatile? Are shareholders making money or is the IPO aggressively priced?

This leads us to a single most important question in any initial public offering – ‘valuation’. Sellers expect the maximum price, often forgetting that the buyer also needs to make money. A buyer will pay only what the business will make in the future rather than its glorious past – a truth conveniently forgotten by sellers. Another important factor is an IPO price is confused with the value or notional price of the assets the business holds (most often real estate) rather than what profits or yields those assets generate for shareholders – liquidation value versus concern value.

There are however a number of ways to make this attractive for the incoming investor without existing shareholders giving away their jewel: separate personal assets from business assets, put in place appropriate financing/leasing structures for some of the assets to improve financial efficiency of the business, plan for and target an appropriate leverage in the business. The most forgotten and sometimes very effective tool to improve pricing is to be open and transparent. Investors price uncertainty and risk, both of which can be minimised by full and transparent disclosure – after all, an investor putting his money in the business has every right to know where that money will be going.

Investor/Shareholder Communication Not many businesses in this region take communication with its shareholders seriously. There is hardly a regular update to investors, rarely analyst coverage of the business, no revenue or profit guidance.

In most cases the only interaction with

Most family businesses think that taking their business public automatically cushions it from failing as it passes on to the next generation. shareholders/investors is at the Annual General Meeting (AGM). The power of regular and transparent communication with the market is under estimated. Regular communication not only generates active interest in the stock that enables a healthy trading volume, but also helps check volatility 10 simple steps towards a successful IPO 1. Set your destination – know whether IPO is the right choice for the company at this time 2. Identify and select your ‘IPO advisor’ who has the experience to take you through the journey 3. Formulate your ‘equity story’ – highlight past success and future growth potential 4. Pre-IPO readiness test – assess and identify gaps that need to be addressed 5. Develop a plan, timeline and seek

in the price. This also helps the stock move away from a dividend driven stock to one that gives healthy capital gains as well. The board and management have a key role to play in this aspect, and should be encouraged by the regulators. The ‘state owned’ listed entities can clearly take the lead here. commitment from all stakeholders to address the identified gaps 6. Execute the plan that brings people, systems and processes in line with market requirements 7. Select the other key advisors – lawyers, bankers, and PR advisors.

8. Create an ‘Investor Relations’ function and define its goals 9. Get your pricing right – remember investors pay value for the future, not the past.

10. Go to market – timing is everything

Listing Requirements in Qatar – QE Venture Market Track Record

One year track operating history required along with financial statements

Market Capitalisation

Minimum subscribed capital of QR 5 million.

Minimum of 50 percent of the nominal value must be paid-up (100 percent required in the case of public offering).

Minimum Free Float

QFMA requires a minimum float of 10 percent.

Minimum Shareholders

Requires a minimum of 20 shareholders

Disclosure Document

Publish a prospectus approved by QFMA

Lock-up requirements

A lock-up 50 percent of the shares of owners of private joint stock company (closed shareholding company) converted to a public joint stock company for one year.

All board members are required to retain a minimum number of shares for the duration of their office.

TheEDGE

39

SPECIAL REPORT

PleNTY To

BUIlD

By Thomas Bacon

M

assive investments in infrastructure make an excellent outlook for Qatar’s construction sector. The nation’s rising population, growing economy, increasing diversification and the forthcoming World Cup 2022 are all contributing factors.

According to HE Mohamed bin Saleh Al Sada, the minister of energy and industry, Qatar will invest around QR70 billion (US$19.21 billion) on its electricity and water utilities through 2021 to meet rising demand. Some QR30 billion (US$8.23 billion) will go to the power sector, with a further QR22 billion (US$6.04 billion) allotted to expanding the water system.

The country’s utilities body, Kahramaa, has already approved 20 projects related to water and power, according to Al Sada, who added that infrastructure schemes to support the country’s industrial and agricultural needs would be announced in the near future.

Qatar is one of the world’s driest countries, making water security a pressing issue. The country relies on desalination, a costly process involving capital-intensive plants and substantial energy inputs, for 99.9 percent of its water supply, according to international press reports. Demand is growing – consumption has risen from 83 million gallons per day (g/d) in 2000 to more than 235 million g/d in 2012, and is forecast to reach 361 million g/d by 2020.

Investment will not only go to increasing desalination capacity, but to a major expansion of storage and improvements to the water system’s efficiency. Al Sada also said that the Gulf Cooperation Council (GCC) member states should work more closely together on developing water circulation technology. The countries share similar challenges with regard to water supply, and pooling their considerable resources and growing research capacity could be beneficial.

The private sector looks set to play a leading role in the financing, construction and management of new utilities, as Qatar has been a regional leader in independent water and power projects (IWPPs), in which private firms take an ownership stake.

The Middle East and North Africa (MENA) region’s largest single-site producers of power and water, for example, and one of the biggest in the world, is Ras Girtas, a Qatari IWPP that commenced operations in 2011. The site has a current production capacity of 2730 megawatts (MW) and 286,404 cubic metres of

40

TheEDGE

water per day and is expected to supply around 30 percent of the country’s total electricity and 20 percent of its potable water when fully operational.

Private foreign investors own 40 percent of the consortium running the plant, with France’s GDF Suez taking a 20 percent stake, Japanese firms Mitsui and Chubu Electric Power Company taking a 10 percent stake, and Yonden taking five percent.

Utilities are an important part of a wider infrastructure development drive currently underway, worth an estimated US$100 billion (QR364 billion) over the next five years. Transportation is another area on which the country is focusing its considerable resources. Big-ticket projects in particular have caught international attention.

The US$14.5 billion New Doha International Airport (NDIA) is due to open later this year, and last autumn, transport officials said the country was lining up QR40 billion (US$10.98 billion) in investment in three integrated rail projects that will link the country to the wider Gulf Railway.

The three rail projects consist of a mainline network, the Lusail light railway and the Doha Metro.

The first phase of the mainline (or long distance) network is due to be completed by 2021, in time for the World Cup in 2022.

The Lusail light rail line will run for 28 kilometres (km), with 8.3 km underground, and will have 36 stations.

The system is due to be up and running in 2016, and 90 percent of the tunnelling work is already complete.

As for the Metro, the first phase, which is expected to be completed by 2020/21, will have 135 km of track and 47 stations. It will serve much of the city, including the tournament stadiums. Phase two is expected to be complete by 2026 and will see the remaining 77 km added. After a slower period, Qatar’s construction sector can look forward to some potentially excellent years, particularly due to huge investments being made in infrastructure.

Thomas Bacon is an analyst at Oxford Business Group.

PERSONAL FINANCE

THERE IS CERTAINTY Adrian Bliss writes about the essential element of financing planning and which for most is least relevant on the to do list. It is important to create a will and testament and be aware of the local and international law before drafting it.

n

ot many of us like to dwell on this essential element of financial planning, but in many ways the actual writing of the will is the easy part. After all, you know what your assets are, you know where they are situated, and the majority of us know the beneficiaries of our last will and testament.

The complicated part for an expatriate

is ensuring that all bases are covered so you remain compliant with local and international laws when drawing up your will. If you assume that writing a will under the law of your nationality is the only step you need to take, then think again.

The Qatar Branch of law firm McGrigors LLP confirms that for anyone owning property, or holding bank accounts in a country other than that of their nationality, it is important to

find out how local laws will impact upon the wishes expressed in their will, and whether a local will is also required.

Also, while expatriates will find that a valid United Kingdom (UK) will (from any UK jurisdiction) is recognised by many foreign jurisdictions, in some countries such as France, forced heirship rules that restrict the ability of a testator (a person who makes a valid will) to decide how

PERSONAL FINANCE

assets are distributed after death, need to be considered. This is also an issue in Scotland, which has a distinct legal system from England, Wales, and Northern Ireland.

For expatriates living in Qatar it is not necessary to have a local will drawn up as full recognition is given to a UK will. It is, however, advisable to have a UK will translated into Arabic, as this will speed up and assist probate should death occur in Qatar.

If you own property in Qatar, there is no problem with this asset being included in a UK will. But if you are a British expatriate who is also Muslim, and you die without a valid will (intestate) then your relatives are still entitled to insist that your estate is distributed in accordance with Shari’ah law, even if you are not practising Islam.

And while Qatar-based expatriates can be assured that there are no inheritance taxes payable locally, McGrigors warns that if you are deemed to be UK-domiciled – and the overwhelming majority of expatriates will still be UK domiciled no matter how many years they have been living overseas – then UK inheritance tax laws will apply to all of your assets, wherever they are situated. If the deceased is not domiciled in the UK then UK inheritance tax (IHT) laws will only apply to the deceased’s assets in the UK. The 2012-13 band now stands at GBP325,000 (QR1.8 million) after which IHT becomes chargeable on an estate’s assets.

While British expatriates find it virtually impossible to alter their UK domicile status, an increasing number do marry someone they have met overseas, which means the partner will be non-UK domiciled. The main implication of this will be that the non-domiciled spouse will not benefit from the IHT allowance shared between couples on the death of one partner. While the IHT threshold stands at GBP325,000 (QR1.8 million) for the current tax year, the band is considerable lower – down to just GBP55,000 (QR319,000) when the beneficiary is non-UK domiciled. This somewhat unfair discrepancy was raised in the last budget and proposals to amend it are widely expected to be included in the next finance bill. While such expectation offers

no guarantee, the proposals as they stand do allow for a non-UK domiciled testator to elect to be treated as if domiciled in the UK. And, of course, we all have to remember that whenever our life changes in some major way – children are born, assets are bought, partners leave each other and new relationships are formed – a will must be examined to check it is still relevant and expresses your own wishes for how your estate is shared out.

So what if you get divorced? There are two issues here to concern yourself with provision for your former spouse and children and the guardianship of your children if they are still under formal adult age.

McGrigors explains that if you are domiciled in England and Wales and had a full and final settlement in your divorce then your former spouse will have no claim on your estate. But if your former spouse is financially dependent on you, for example you pay maintenance or alimony, then under English law it is likely you will need to make provision in your estate for them. If not, your spouse may have a claim under the Inheritance (Provision for Family and Dependents) Act 1975. If you do not make provision in your will, your former spouse can apply to the courts for provision to be made. The same applies for any dependants or children.

It is also important to be aware that children may be dependants, even if they are your former spouse’s children, particularly if it can be proved you are deemed to have assumed parental responsibility for the children at some stage.

With a situation like this, a common solution is to set up a trust for your former spouse and any children of the marriage (or dependants) so that financial provision can continue to be made for them with the capital being reserved for the children. Ideally, you and your former spouse will agree on the nomination of guardians for your children in the event that both parents die. Failing to agree on such a nomination may mean the issue has to be settled by the Court.

When it comes to children from different marriages, English law states that the children’s respective surviving parents will have custody unless they have agreed to other arrangements. Provision can be made for children in the will and/or through a trust.

As the old adage goes, there are only

For British expatriates living in Qatar it is not necessary to have a local will drawn up as full recognition is given to a UK will.

Key Points to consider when drawing up a Will 1. Is your will recognised locally?

2. Speed up probate by considering a local language translation of your will.

3. Check on local regulations on forced heirship or local taxes payable.

4. Keep up to speed with UK inheritance tax rules and bands.

5. Consider the implications for a non-UK domiciled spouse.

6. Review your will regularly to take into account a change of partner, divorce or the addition of children.

7. Consider whether you need more than one will.

Glossary Testator: A person who makes a valid will.

Forced Heirship: Restriction of the ability of a testator to decide how assets are distributed after death.

IHT: Inheritance tax is the level of tax paid on assets following death.

Probate: The legal process of administration of an estate following death.

two certainties in life - death and taxes.

So why not add an element of certainty in death and draw up a will.

Adrian Bliss, senior financial consultant, Guardian Wealth Management Qatar LLP. TheEDGE

43

ECONOMIC BAROMETER

DEATH OF THE

EUROZONE Reflecting the contrary mood of most of Europe’s citizens towards austerity is a float from the ‘Spectacle of Defiance and Hope’ with a giant skull with a banker’s hat from a May Day March in Dublin, Ireland. Activists from trade unions, political parties, community groups and the Occupy Movement marched through the Irish capital to commemorate International Labour Day and to protest against the austerity measures being put into place in Ireland. (Image Corbis)

europe’s FIGHT FOR THE SURVIVAL OF THE EUROZONE ENTERS A NEW PHASE AS KEY MEMBER STATES FIGHT tight FISCAL MEASURES Following elections that toppled the incumbents in France and Greece and paved the way for pro anti-austerity parties, the eurozone is yet again facing new structural changes and challenges. Karim Nakhle looks in detail at the deepening and seemingly never-ending crises within the most vulnerable states.

F

or Europe’s elected political leaders, the debt and currency crisis has taken an extraordinarily heavy toll. Of the 17 governments in the eurozone using the single currency, voters have forced 10 out of office in little more than a year.

The eurozone is braced for a further bout of austerity despite pledges from the new political leaders to promote growth policies instead of the unpopular austerity measure previously championed by many. Spain, the Netherlands, Slovakia, Slovenia, and Belgium will fail to meet spending targets and may also miss the deficit target in 2013, as well as Ireland, Greece, and Portugal (narrowly) who are in bailout programmes and are not expected to comply.

British deficit figures were by far the worst of all in the European Union (EU) except for the bailed-out Greeks and Irish, falling from 8.3 percent last year to 6.5 percent next

ECONOMIC BAROMETER

year. But British growth was forecast to equal Germany’s next year at 1.7 percent, 0.4 percent above the EU average.

Europe’s new growth champion, new president François Hollande of France, central campaign pledges to challenge Germanscripted austerity and pursue growth policies, it looked as though belt-tightening would be inevitable in France when the commission projected budget deficits of 4.5 percent and 4.2 percent of gross domestic product (GDP) this year and next, while the president has committed to meeting the three percent target next year. That means finding savings of EUR24 billion (QR112 billion).

Economic contraction in the last two quarters meant the EU was in recession, with unemployment increasing to a record 11 percent in the eurozone next year, the highest level in 15 years. Forecasts of a return to mild growth risked have been upended by a worsening sovereign debt crisis and a possible surge in global oil prices.

Europe must think the unthinkable – and act now. The EU must realise that the markets are betting on a Greek default and the eurozone is breaking up. The euro has fallen almost five percent against the dollar in May and 11 percent since the start of the year. The FTSE 100 has lost six percent of its value in May too. Things are starting to look ugly.

A Greek Impasse The European Central Bank (ECB) is in a bad position. But one suggested mechanism of buying government bonds – also known as quantitative easing – would be a huge step for the ECB. Rolling out that weapon before the ink is dry on the Greek bailout would be admitting that the package is not enough to stop the rot spreading to Portugal or Spain.

The ECB looks as if it is not even trying to get ahead of events. After six months of dithering over Greece, investors expected lessons to have been learned. Instead, politicians maintain that a break-up of the eurozone is inconceivable and that Greece will not default.

In the real world though, hard money is being bet on both outcomes. The two staple parties of Greek government – Pasok and New Democracy – have been trounced for bringing the country to this impasse over

Of the 17 governments in the eurozone using the single currency, voters have forced 10 out of office in the past year. four decades, and for implementing the bailout agreements. The Greek electorate has clearly stated what it does not want: old politics and the so-called rescue by the troika of the EU, the International Monetary Fund (IMF) and the ECB. During the past two years a parade of mediocre Greek politicians have pretended to negotiate with the troika, while decrying their own country as “corrupt”. They were backed by technical experts terrified at the thought of displeasing the lenders to Greece. Some of the politicians and experts were people who had also handled the disastrous Greek entry into European monetary union. The result was two bailout agreements, in May 2010 and March 2012 – monuments to bad economics and social callousness. By the end of 2012 austerity will have led to contraction of the Greek economy by 20 percent, a jump in unemployment toward 25 percent, a full-

blown humanitarian crisis in the urban centres, and a completely unmanageable public debt.

Greece is dying on its feet. Meanwhile its old political class twitters on about participating in the European ‘game’ and making structural reforms that will bring growth in the future.

The clear winner of the recent Greek elections is Syriza, a coalition of leftwing organisations. If it gets its act together, it could help resolve the crisis and give a boost to the European anti-austerity movement.

Syriza caused an earthquake by denouncing the March bailout. It has called for a moratorium on debt payments, an international commission to audit Greek debt, aggressive debt write-offs, deep redistribution of income and wealth, bank nationalisation, and a new industrial policy to rejuvenate the manufacturing sector. These measures are exactly what the Greek economy needs.

Implementing them depends entirely on

Pain behind the smiles: despite a jovial atmosphere discussions regarding the future of the eurozone and Spain’s impact on this were serious between the beleaguered president of Spain Mariano Rajoy and the embattled president of European Central, Bank Mario Draghi in early May in Barcelona, Spain. (Image Getty Images)

TheEDGE

45

ECONOMIC BAROMETER

One among thousands, a student covers his face during the students march against the public budget cuts in education and the reforms proposed by the government of Spain with a heavy police deployment, during the European Central Bank’s meeting in Barcelona in May. (Image Corbis)

rejecting the recent bailout and stopping payments on the debt.

Syriza believes that the measures can be introduced while the country remains within the eurozone. It has been unwilling to call for Greek exit, thus increasing its appeal to voters who worry about the aftermath of exit and believe that the euro is integral to the European identity of Greeks. However, some feel it would be impossible for Greece to stay in the eurozone if it went down this path. Moreover, exit would be both necessary and beneficial to the economy in the medium term, and remains the most likely outcome for Greece.

The ECB temporarily stopped lending to some Greek banks to limit its risk as ECB’s president Mario Draghi said ECB will not compromise on key principles to keep Greece in the euro area, and will push the responsibility for lending to some Greek financial institutions onto the Greek central bank until they have sufficiently boosted their capital.

Once the recapitalisation process is finalised, the banks will regain access to standard Eurosystem refinancing operations.

The move comes after Draghi acknowledged for the first time that Greece could leave the monetary union. While the bank’s “strong preference” is that Greece faces a fresh election on June 17, stays in the 17-nation euro area, the ECB has to continue to preserve the integrity of its balance sheet, and prioritise it over monetary union.

46

TheEDGE

The Struggling Matador Spain is a crucial front in Europe’s battle to contain its economic crisis, but the Spanish economy is in a tailspin. Some forecasters say the unemployment rate, already 24.4 percent, could reach 30 percent. The government’s credit rating has just been downgraded, and its cost of borrowing – close to six percent – is putting its solvency in question. Investors are watching the country’s banks with concern.

Recent soveriegn credit downgrades, mainly on account of budget overshoots by Spain’s regional governments reflect the views of S&P and Moody’s of mounting risks to Spain’s net general government debt as a share of GDP in light of the contracting economy.

This in particular due to the deterioration in the budget deficit trajectory for 2011 to 2015 and the likelihood that the government will need to further support to the banking sector.

Europe’s leaders cannot blame Spain’s government as it is making progress on reforms aimed at improving the country’s competitiveness and has tried – to a fault – to meet the EU’s austerity demands.

Will the ECB’s money provide the needed stability? This is the trillion euro question. The ECB’s intervention has brought temporary relief, but only at the cost of increasing Spain’s financial fragility as its banks used the ECB’s loans to buy more of their government’s subsequently downgraded debt. The more investors understand this frailty, the greater the risk of financial meltdown becomes.

PORTUGUESE PROBLEM In April, Portugal’s parliament ratified the new European pact on budgetary discipline, the second EU country to do so after Greece.

The pact provides for an automatic procedure to punitively sanction a country that swerves away from the rules: a structural deficit of 0.5 percent, a maximum public deficit of three percent and a national debt ceiling of 60 percent of GDP. Ratification was the order of the day for the vast majority of parliament members, as Portugal is under close surveillance by the Troika’s institutional creditors.

Since May last year Portugal has received international loans worth EUR78 billion (QR358 billion), spread over three years, in return for which Lisbon committed to more than halving its deficit to 4.2 percent in one year. And yet the scale of the public debt kept increasing. It is projected to reach 115 percent by the end of this year. Sweeping austerity measures in response to the euro debt crisis have further drawn the economy into recession and nudged unemployment up to 15 percent.

ITALIAN UNEASE Italians were eager to get rid of Berlusconi’s Forza Italia, replacing the incumbent party with the current government of Mario Monti.

To their great disappointment, the new prime minister announced the cut of economic growth forecasts for 2012 by as much as 1.2 percent – far more than the 0.4 percent contraction the government previously forecast, in a move that cast doubt on the viability of their austerity programme in the face of the advancing debt crisis. His approval rating has fallen further, by five percentage points from to 45 percent, hit by higher taxes, controversial labour reform and a stagnant economy. Rome is paying the price for market worries about feeble economies and large debt burdens in the eurozone. A flood of low-cost loans from the ECB helped push down Italian borrowing costs earlier this year. Italy’s sixmonth auction yields had been declining since hitting a euro lifetime record of 6.5 percent in late November and reached an 18 month low in March.

IN THE SPOTLIGHT

READY FOR

TAKE OFF The New Doha International Airport, with construction investment of more than QR64 billion, is set to open its doors by the end of the year. Martin Rivers examines Doha’s vision to become the busiest transit hub in the world once the airport is completed in 2015 – and the country’s high demand for the deluxe private jet industry.

An impression of the ministerial and VIP terminal at the New Doha Internaitional Airport (NDIA), the first phase of which is due to open by the end of 2012. (Image courtesy Qatar Airways)

IN THE SPOTLIGHT

W

hen the New Doha International Airport (NDIA) opens its doors on 12 December 2012, the Gulf’s youngest aviation hub will be able to handle 12.5 million passengers per year – more than eight times the current population of Doha. By the time it is completed in 2015, the 5400 acre site will be almost two-thirds the size of the capital.

Qatar Airways chief executive Akbar Al Baker, who also heads up the development of NDIA, revealed last month that the project would be more expensive than planned. His latest estimate pegs it at US$17.5 billion (QR64 billion), but few will be surprised if costs rise further.

However for Qatar, which has allocated 40 percent of its budget between now and 2016 to infrastructure projects, this is undoubtedly a price worth paying. The tiny Gulf state places aviation at the heart of its economic growth plans – matching commitments by the governments of Abu Dhabi and Dubai – and

Ongoing economic headwinds mean Qatar’s business jet operators must diversify their activities in order to mitigate risk. the NDIA will be the centrepiece of Doha’s strategic vision to become one of the busiest transit hubs in the world.

By 2015, the airport will have an annual capacity of 50 million passengers and two million tonnes of cargo – more than double the traffic currently passing through Doha. As well as accommodating rapidly expanding Qatar Airways in its main passenger terminal, the Emiri Terminal will re-define luxury travel for selected officials and dignitaries. By combining quality with quantity, NDIA will set the tone for Qatar’s rising star for decades to come.

Hassan Al Mousawi, chief executive of Rizon Jet, speaks to TheEDGE about Qatar’s private jet industry.

QUALITY FIRST Business aviation operator Rizon Jet, a subsidiary of Ghanim bin Saad al Saad & Sons Group Holdings, is one of the many Qatari companies that will be affected by the NDIA project, which is being developed just four kilometres to the east of the current airport.

“We are considering our options [in] moving at this time. A lot depends on the wider plan for the existing airport,” chief executive Hassan Al Mousawi tells TheEDGE. With authorities also talking up a US$140 million (QR509 million) refurbishment programme for the current hub, he clarifies, “Once we know the final plan, we can take a decision on which location is best for us, and most importantly for our customers.”

Rizon Jet was founded just six years ago, but its investment in the existing gateway is plain to see. In March, it became the first private jet operator to open its own terminal in Doha International Airport, complementing its other VIP base at London’s Biggin Hill Airport. The facilities at both sites have been tailored to the firm’s high-end corporate clientele, comprising luxury lounges, fine dining menus, business suites and teleconferencing boardrooms.

“We would like to stay here,” Al Mousawi says of his extravagant new terminal in the current Doha gateway. “But if the decision is taken to close the airport, then we are prepared to build an even better facility at the New Doha International Airport.”

Wherever the firm bases its operations, it is well positioned to benefit from the booming charter industry. A host of business jet operators have sprung up across the Gulf region over the past decade – with the United Arab Emirates (UAE) and Saudi Arabia TheEDGE

49

IN THE SPOTLIGHT

emerging as hotspots for the sector – and Qatar’s burgeoning economic prowess, combined with its pre-eminence as a mass transit hub, positions Doha as an ideal player.

“We operate out of Doha International Airport, but our business is not directly related to the airport hub,” the chief executive notes. “Our business is fuelled by the economic activity of Qatar and the Gulf region, and the demand for exclusive business and leisure travel that that activity creates.”

Deeper penetration into Europe and the Middle East lies at the core of Rizon Jet’s growth strategy, ensuring that the Dohabased company connects with new market opportunities wherever they emerge, in what Al Mousawi stresses is a quintessentially “global business”.

To this end, the company is already looking beyond Doha and London. A new operating base is planned for Paris Le Bourget Airport in 2014, establishing a vital presence in ‘Europe’s busiest business aviation airport’. Closer to home, Al Mousawi was at the time of writing poised to announce the placement of a Bombardier Challenger 605 in the Saudi capital Riyadh.

“The Saudi market is very active, and it

is important for us to have a presence there,” he explains. “The nature of our business is a lot of ad hoc and short-notice flights, and having an aircraft positioned there will allow us to react even faster. It also saves some of the empty-leg costs associated with getting an airplane into Riyadh.”

Supporting this expansion, the company is steadily increasingly its fleet size. On top of the two Challenger 605s and one Hawker 900XP owned by Rizon Jet, its management division also looks after one Bombardier Global Express and one additional Challenger 605 on behalf of private customers. United Kingdom (UK) affiliate Oryx Jet provides access to another three planes, while an Airbus Corporate Jet will join the fleet in 2013 on a private management contract.

“We not only provide airplanes that are available for charter,” Al Mousawi notes, emphasising the need for operational flexibility given unpredictable levels of demand in the private jet industry. “We can work on three models – charter only, mixed charter and private, and private only.”

Ongoing economic headwinds mean Qatar’s business jet operators must diversify

How the interior of the NDIA is set to look. (Image courtesy Qatar Airways).

50

TheEDGE

their activities still further in order to mitigate risk. Alongside its charter and management divisions, Rizon Jet offers independent private jet owners access to its fixed-base operations (FBO) – comprising services like fuelling, hangarage and VIP passenger handling – while its maintenance, repair and overhaul (MRO) division provides technical support for an array of aircraft types.

These combined operations provide a ‘one-stop shop’ for business aviation, in Al Mousawi’s words, keeping his 100plus employees amply occupied. But the company faces stiff competition from Qatar Executive, the private jet subsidiary of Qatar Airways, which has six Challenger and Global aircraft of its own, and which can piggyback on the traffic of its gigantic parent company.

HUB EXPANSION Though Qatar Airways embodies the same meticulous focus on luxury – being one of just five airlines on the planet awarded a five-star rating by aviation research firm Skytrax – the company has altogether grander aspirations than private jet operators such as Rizon Jet.

IN THE SPOTLIGHT

Having started in 1994 with a single wet-leased Boeing 767, Qatar Airways has ballooned in size to become the Gulf region’s second largest carrier.

Having started in 1994 with a single wet-leased Boeing 767, Qatar Airways has ballooned in size to become the Gulf’s second largest carrier. Its fleet of 108 aircraft will grow by another 11 jets before the end of the year, and with 250-plus deliveries in the pipeline it expects to double in size by 2020. This expansion is borne out by the flag carrier’s extensive route network, which now totals 113 destinations and continues to grow on a monthly basis.

“Aggressive expansion has been a key element of our growth strategy and this level of upturn is set to continue,” chief executive Al Baker tells TheEDGE. “Last year we inducted 15 new routes to our network and this year we have already planned 13 new destinations – all coming at a time of aggressive expansion in the region, and amid tough economic conditions worldwide.”

Al Baker acknowledges that Gulf aviation has become fiercely competitive – with Dubai’s Emirates Airline and Abu Dhabi’s Etihad Airways also growing exponentially – but he insists this is good for the wider industry, saying: “Regional rivalry is a challenge and we welcome it, as we always consider competition to be healthy for us and for the travelling public, who are given greater choices.”

Further afield, however, Qatar Airways has an uneasy relationship with legacy carriers in Europe and North America.

QATARI CARGO While all 108 aircraft in Qatar Airways’ fleet can transport cargo in their belly holds, burgeoning demand for inter-continental freight services via the Gulf has led the flag carrier to invest in a bespoke cargo fleet. Subsidiary Qatar Airways Cargo (QAC) currently operates seven freighter aircraft – three Airbus A300Fs and four Boeing 777Fs – with another four 777Fs due to arrive between now and 2014.

Offering 113 destinations across its network, including 20 dedicated freighter routes, QAC provides extensive cargo services to Asia, the Middle East, Africa, Europe and the Americas.

Last year alone, Doha International Airport processed 796,000 tonnes of cargo, utilising the hub’s trans-shipment facilities, which include temperature-adjusted chillers, high-value commodities storage and dangerous goods holding areas. Everything from electronics to motor vehicles to livestock routinely makes its way through the gateway.

With the New Doha International Airport (NDIA) expanding annual cargo capacity to two million tonnes upon completion, Qatar Airways chief executive Akbar Al Baker in May hinted at the conversion of up to 20 Airbus A330 passenger jets into freighters. The new wave of expansion follows last year’s acquisition of a 35 percent stake in European freight carrier Cargolux, which dramatically extended the reach of QAC’s overseas network.

The interior of a private jet, which are in increasingly high demand in Qatar. (Images courtesy Rizon Jet).

Germany’s Lufthansa and Air Canada in particular have accused Gulf airlines of state support, and are lobbying their own governments to restrict landing rights.

“They are only doing it because of insecurity, jealousy and [because they are] unable to cope with the competitive threat of Gulf carriers,” Al Baker argues, calling such tactics ‘unethical’ and noting that Europe’s airlines have a long history of enjoying state subsidies. “We have successfully carved a niche for ourselves and have shifted the goalposts on a global level. We are proving time and again to be pacesetters and go-getters in all areas of operation, while others are falling behind.”

The shared success of Qatar Airways, Emirates and Etihad has as much to do with geography as with pro-aviation government policies. The Gulf sits at the crossroads between East and West, placing more than

two billion people within four hours’ flying time, and connecting any two major cities on the planet without additional stopovers.

For European airlines whose home bases have long functioned as inter-continental hubs, Gulf aviation therefore represents a unique threat. Qatar’s heavy investment in air transport aims to re-draw well-trodden global flight paths, siphoning transit traffic away from Frankfurt, Paris and London, instead funnelling it through Doha.

Al Baker is resolute when asked about protectionist moves by Western governments, promising that Gulf carriers will “continue to apply pressure individually and collectively to aviation bodies, governments and regional associations to fight for equal competition”. He is ultimately optimistic, adding, “There is no doubt that by continuing to offer quality service and more choice, we as airlines in the region will win the fight and give travellers what they fully deserve.”

To this end, the NDIA project will ensure Qatar’s ground services are secondto-none, while Al Baker’s growing fleet – soon to include the first Boeing 787 Dreamliners in the Gulf – will match this quality in the skies overhead. Alongside a healthy competitive environment both at home and abroad, Qatar’s aviation sector looks set to take off.

TheEDGE

51

COVER STORY

THE GROWTH OF

E-COMMERCE

IN QATAR

COVER STORY

Qatar is now the third biggest spender online in the Middle East.

Barry Mansfield examines the factors driving this trend, and the main challenges faced by retailers as they strive to embrace the Internet age.

STaTE OF E-COMMERCE The Middle East experienced spectacular growth in e-commerce during 2011. Many new online launches took place in Jordan, Egypt, Lebanon and the Gulf nations and reports from the United Kingdom’s (UK) Interactive Media in Retail Group (IMRG), and Visa suggest that by 2015 the online retail market in the Gulf Cooperation Council (GCC) countries will have grown to US$15 billion (QR54.6 billion), up from US$3.3 billion (QR12 billion) in 2010.

The increasing availability of broadband, high speed download packet access (HSDPA) and WiMax Internet connectivity in the Arab world means that online sales are no longer a luxury for retailers: they are now a necessity – gone are the days of simply waiting for customers to walk through the front door to make a purchase.

For now, flight reservations and ticket sales account for the majority of transfers made online, but Internet users are increasingly comfortable purchasing textiles, household items and other consumer goods from the comfort of their living room.

According to Euromonitor International, Qatar is now the third biggest online spender in the region, behind Saudi Arabia (an estimated US$800 million/QR2.9 billion for 2011) and the United Arab Emirates (more than US$2 billion/QR7.2 billion). A study conducted last year by Visa suggested that Qatar’s e-commerce volume was set to increase by 60 percent, with US$600 million (QR2.2 billion) in online transactions by the end of 2011 from the US$375 (QAR 1.4 billion) earned in 2010.

Not only that, but Visa believes the continuing upward trend will help to make Qatar the fastest growing information technology (IT) market in the Middle East and North Africa (MENA) region from 2011 to 2015. Qtel has already invested heavily in technology from Nokia Siemens Networks for a countrywide upgrade to

its mobile broadband network (enabling download speeds of up to 14.4 Mbps, using HSDPA) in early 2010. As for online services, Visa has backed up its encouraging words with cash incentives designed to get Qataris shopping more online. Last June, for example, its campaign with Qatar Airways saw Visa debit and credit cardholders entered into a draw to win free flights and spending money – each time they made a card purchase.

Kamran Siddiqi, general manager for Visa Middle East, insists there “is still some way to go if e-commerce in Qatar and the wider region is to meet its full potential.”

Likewise, Stephen Leeds, e-commerce business leader for Visa Middle East, has warned that online shopping in the region is “still in its infancy.” He fears that the industry is likely to be plagued by the security fears that have slowed uptake in other parts of the world. But Leeds still believes Qatar has all the right ingredients to enable e-commerce to “continue to grow, such as government commitment and retailer investment.”

E-QaTaR These factors helped Qatar to become a regional mover in the United Nations’ 2011 e-readiness survey – where the country’s performance was slick in the e-government rankings, jumping from 62nd to 53rd place.

The government first launched e-services in 2003; 24-hour access was available by 2010 with the revamped Hukoomi portal.

E-commerce is part of the ambitious ICT2015 strategy and the Malomatia initiative to

develop local information communications and technology (ICT) talent.

Qatar’s e-Commerce law, enacted in April 2010, has also clarified vital business issues such as e-signatures, e-transactions, e-documentation and online authorisation. ictQATAR believes this law will enable Qatari businesses to become more innovative.

Ahmad Al Kuwari, manager of ICT market Development, describes it as “a vital part of helping local businesses competing in the global marketplace.”

“More trustworthy sellers are coming online,” according to Samir Toukan, chief executive officer (CEO) of Jabbar Internet Group. “As we shop with new brands we have to look for sellers who provide certain certification, good customer service, good policies on fraud protection. But not all people will buy using credit cards. We see cash on delivery (COD) as a trend in our market. ” Jabbar, which includes Souq.com, CashU. com and Ikoo.com, has called on Aramex for help with warehousing facilities to store its inventory, customs clearance services to expedite the clearance of goods at the main borders, and payment options, including collection, billing and management for the COD service. Aramex is also the co-creator of an “e-freight” paperless cargo system, which will accelerate regional trade by enabling cargo operators, airlines and customs officials to exchange the required documents electronically.

But the real innovations in e-commerce, says Touken, are yet to come through. He believes social networking will transform online business in the Middle East: “The Arab

MyUS.com reports 2012 has seen 210 percent revenue growth in Qatar and 150 percent customer growth from 2011.

TheEDGE

53

COVER STORY

world is a youth market, and Internet literate,” he points out. “As the young people become working citizens, they are more likely to buy online than the older population. We have seen a massive increase in users of Facebook and Twitter in the region. We will see more social shopping habits with the advent of virtual goods and multi-player games.”

Businesses are finding that usability, both for the end customer and the administrator of the website, is the key to rapid technology adoption. For example, when Priocept built a multilingual e-commerce Sitecore website

for Virgin Mobile in Qatar, the development team determined that the Web Content Management (WCM) system should enable non-technical editors to manage the web experience. Administrative tools for financial reporting and order tracking were integrated into the management suite.

Priocept ensured that the website could deliver content to a broad range of device types and channels, including kiosks and Apple’s immensely popular iPad tablet.

Then there is the brand-building ‘Experience Map’ – an animated, interactive, multimedia

menu, which provides detailed information on forthcoming events in the region.

Priocept spent five months building a critical sales and service channel for Virgin Mobile, which would go on to generate around QR9 million in sales in its first eight weeks of trading.

Qatar’s wider mobile sector has realised great benefits from initiatives of this type. In a similar venture, Expansys’ e-commerce services subsidiary, PJ Media, supplied the official online store for Vodafone Qatar, and will soon be creating, launching and supporting the new site

The digitally savvy large youth population across the Arab world, but specifically in wealthy countries such as the UAE, Saudi Arabia and Qatar, will be a major driver in the continued rapid growth of e-commerce in the region in the near future. (Image Arabian Eye)

54

TheEDGE

COVER STORY

A study conducted in 2011 by Visa suggested that Qatar’s e-commerce volume was set to increase by up to 60 percent. for Vodafone Turkey, using the expertise and bespoke intellectual property developed during the successful deployment in Doha.

BANKING ON E-SERVICE Doha’s financial services sector is also increasingly confident in its ability to bring the world’s most advanced e-services to clients. In May 2012, Al Khalij Commercial Bank QSC launched a ‘state-of-the-art’ online banking service that looks radically different from earlier platforms. Robin McCall, the banking’s group CEO, says the goal is to enable up to 95 percent of inbranch transactions to be performed online, with fund transfers or credit card payments accounting for the bulk of this.

What really makes the Al Khalij service stand out, according to McCall, is its user interface, which “appears, and acts, like a modern smart application…as we decided that the traditional look and feel of typical online banking websites neither met our needs nor our brand.” Al Khalij consulted with the world’s top security experts to formulate what McCall describes as a “randomised virtual keyboard“ with “beneficiary activations,” but he claims the site’s most advanced security features are “located beneath the hood” so that most users will be unaware of and unhindered by the technology.

LOOKING ABROAD Qatari shoppers cannot find everything they want in Qatar itself, of course. In

particular, they have a strong affinity for hard-to-find American labels, and now – thanks to MyUS.com - they have a packageforwarding service that can be used to safely and affordably ship items directly from the United States to the Middle East. According to MyUS.com, customers are purchasing everything from vacuum cleaners and auto parts to apparel and electronics and shipping them back to Qatar. John Wright, MyUS. com’s vice-president, reports that 2012 has seen 210 percent revenue growth in Qatar and a 150 percent growth in customers from 2011. The most popular stores are online traders Amazon and Ebay, followed by fashion giants like Gap, Nordstrom and Ralph Lauren.

In Wright’s view, Qataris are “more than comfortable” with the payment systems available to them now; he perceives them as extremely intelligent and brand-aware, savvy shoppers. But MyUS.com also offers personal shopping services for those who do not own a credit card or if their card is not accepted at a certain retailer; the company’s personal shoppers will use a corporate credit card issued in the US to buy the item if necessary.

“Language is probably the biggest obstacle,” adds Wright. “As we grow and are now offering support in additional languages, that barrier is slowing dissipating.”

MyUS.com’s success may have helped to gloss over some of Qatar’s local weaknesses in e-commerce delivery, according to Kevin Gormand, CEO of classifieds website Mubawab, which now attracts over 600,000 unique users per month. “It is impossible to find technical local talent to develop good e-commerce websites in Qatar,” explains Gormand.

This means entrepreneurs turn to cheaper consultants from the Asian subcontinent, with all the communication problems this entails, or expensive Western companies.

“The high price of development or the poor quality of the sites make it hard to produce the working business model necessary for e-commerce websites, and this is why we see few local initiatives, and more global ones,” Gormand says.

Although Gormand fears the size of the market may also be a limitation, he is

Near Field Communication Near field communication (NFC) is a form of contactless communication between devices such as smartphones or tablets. It allows a user to wave the smartphone over a NFC compatible device to send information without needing to touch the devices together or go through multiple steps setting up a connection. NFC is growing in popularity in the US in particular and has been adopted, albeit in trial format, in many other countries, including Qatar.

Since March 2012 NFC contactless payments arrived in Qatar, with field testing carried out in a joint venture by Qatar National Bank Group (QNB), carrier Qtel, Oberthur Technologies and MasterCard. QNB customers received a free NFC SIM or QNB sticker, using Blackberry or ‘PayPass’-compatible phones. QNB is set to equip merchants with NFC compatible contactless payments terminals, initially in locations such as cinemas, coffee shops and food stalls like those found in the City Center mall in Doha. Purchases under QR100 will be possible, without the need to provide a signature or PIN.

A passenger swipes a mobile phone with NFC mobile payment function over an automated bus fare collector on a bus in Beijing, capital of China, Nov. 5, 2011. (Image Corbis)

optimistic for the next five years, as he sees a boom ahead in mobile e-commerce, mobile payments and adapted platforms. “Mobile e-commerce is the future…but the telecom company would have to be part of the deal.

People may not trust local websites, but they trust in their phone company, web apps and transactions over the phone. The very high penetration rate of smartphones in Qatar will make this option possible.”

TheEDGE

55

Business Interview

ADDING VALUE

AbU Issa Holding chairman and ceo ASHRAF ABU ISSA DISCUSSES THE CHALLENGES OF RUNNING A BUSINESS IN QATAR and how local firms must plan for the future

Business Interview

Ashraf Abu Issa was thrust to the helm of Abu Issa Holding in his late teens, and in the 25 years since, the company’s chairman and chief executive officer has steered the firm to much success, this being in turn recognised by his peers when Abu Issa was chosen for the Ernst & Young Qatar Entrepreneur of the Year Award 2011 recently in Doha. In an exclusive interview with TheEDGE, Abu Issa discusses the challenges and nuances of running such a diverse business concern in Qatar.

A

shraf Abu Issa is noticeably happy to be representing Qatar at the global E&Y Entrepreneur of the Year 2011 Awards in Monte Carlo in June of this year. A tall, well built man with a strong handshake, easy going manner and soft-spoken voice,TheEDGE meets Abu Issa in his plush Doha headquarters above the Blue Salon luxury department store in Al Sadd, his office reflecting his passion for valuable sculptures, paintings and other artworks and antiques.

Being recognised by my peers and representing Qataris is an achievement for me as only four countries from the Middle East are participating,” Abu Issa tells TheEDGE with an easy smile. “It is an honour for me too, and it means a big responsibility towards my colleagues, my community and above all my country. I hope this award will inspire and encourage young entrepreneurs in Qatar to achieve their dreams and more.”

SINK OR SWIM “Being a young business owner in Qatar is something that Abu Issa can relate to. In 1987 his father Abdul Raheem Abu Issa passed away suddenly and left the 19-year-old Ashraf to run the company along with his younger brother Nabil, who is vice chairman. The teenagers were not totally unprepared however, as he and Nabil had spent much time in the summer working at the family business Blue Salon, which then employed 36 people and was focused on distributing products such as Samsonite, Fuji and luxury perfume brands in Qatar. When their father would depart on business trips, the Abu Issa brothers would take over from him. “We were there in more of a watchman position rather than administration,” explains the Abu Issa Holding chairman and chief executive officer (CEO).

“But of course after he passed away the feeling of responsibility was the main thing.”

This feeling of being beholden to his staff, adds Abu Issa, is what drove him to continue the legacy of his father was because the livelihoods of his employees and families depended on it. “Feeling responsible is really the key,” he furthers. “You are responsible for the people that work for you; you are responsible for your family, for your customers. These are the things that kept me going and made me work really hard, I didn’t want to let anybody down.”

One of the main initial challenges, recalls Abu Issa, was to prove to his staff, many of them much older and more experienced, that he had the mettle to lead company. Abu Issa says that no matter how

intimidating this might have seemed at first, he had no choice but to forge ahead. Often, he adds, establishing their trust and support came from trying situations. “Circumstances happen where you get a chance to demonstrate leadership,” explains Abu Issa. “Sometimes it happens unintentionally and the guys around you are like, ‘okay, he can handle himself’.

“It didn’t stop myself from laying the foundation for a relationship with my employees based on mutual trust and respect, characteristics that are still strong in the company culture today,” he says of his youth and inexperience at the time. “Meanwhile I had to build stronger relationship with the suppliers at that time and prove to them my business capability and professionalism. Step by step I gained the trust of new brands, making the company portfolio grow, counting today more than 30 companies and 2000 employees.”

QUALITY OVER QUANTITY Almost immediately Ashraf Abu Issa began to assert his vision for the growth of the Abu Issa Holding. However, first he and his brother had to alternate running the company while they finished their studies. A proponent of constantly improving oneself, Abu Issa also recent completed a business course at Harvard. “It is not a masters degree, but it is very close,” he says. “It is one of the only executive programs where they consider you as a Harvard Alumni.”

From this, Abu Issa says he has learned that instead of working IN a business, leaders should work ON it. “That is the difference,” he says. “In the business you are more involved in the day-to-day operations and you are looking at the details that, normally, you should have somebody else who is delegated to do. Working on the

A feeling of responsibility to his staff is what drove Abu Issa to continue the legacy of his father, as the livelihoods of his employees depended on it.

TheEDGE

55 57

Business Interview

business, looking at the big picture and seeing where you could be making money somewhere, you are not adding value. This is where you want to be careful, making money is good in the short term, but you have to make sure that the business is also adding value.

You have to always create a niche for yourself. Somewhere other competitors or newcomers cannot come into your zone of comfort.

So I started to look into that and develop a know-how or a niche that cannot be easily copied by others in the future.”

Elaborating on the concept of “adding value” at least in a human resources (HR) sense, Abu Issa explains that this is done by creating a culture of knowledge in a company, whereby everything that is learned by all the employees is shared and stored for future reference. “It should be in the DNA of the company,” says Abu Issa.

“If every new person comes to the business and has to learn from scratch that means you are throwing away 30 years of experience.”

But it is the genesis of Abu Issa Holding, in the form of Blue Salon, that for Ashraf Abu Issa is where the concept of “adding value” that forms the core of his company’s business values began.

“When we started in 1981 we introduced many new products, brands and categories to the market that didn’t exist,” he recounts, adding that the biggest challenge during that relatively unsophisticated consumer period was educating their Qatari customers about the concept of quality and paying more for something that might be more expensive, but is infinitely better and/ or may last a lifetime. Increasing sophistication and adding value to their lives, in other words.

“For example,” Abu Issa continues animatedly, “we had the aim to introduce high end cosmetics for skin care [to Qatar], it was not easy to convince a woman to spend five or six hundred riyal on a bottle of creams, a small tube, just for her eyes. The thing is if you bring the right experts and the right advisors to explain all of these products than yes, you will succeed.”

Abu Issa cites another example of adding value through quality versus quantity, in the form of one of his company’s mainstay products. “Why would someone buy Samsonite when we launched it?” he asks rhetorically. “To pay six hundred riyals when they can find a similar piece in the market for two hundred? The warranty, the safety, and the wheels… everything that is involved with that, this is what we have to explain to people.”

MANAGING DIVERSIFICATION Since the company’s inception through Blue Salon as its flagship enterprise (which soon evolved from distribution to retail), in the last 31 years Abu Issa Holding has diversified into many different sectors of Qatar business, including telecommunications and information technology (IT), energy and engineering, investments, joint ventures and consultancy and training.

Though we soon discuss the challenges and solutions to operating a such a wide range of concerns in the modern era, Abu Issa harkens back even to the challenges the company faced in the 1980s. He explains how they had to set up their own marketing and creative advertising division to achieve their aims to communicate

58 56

TheEDGE

their message of added value and quality. There were none in Qatar at the time they felt could do the job, and much of this work was outsourced to Dubai. But knowing their own products and being based in the country, Abu Issa adds, meant they were best position to make sure they remained relevant and on-message.

Abu Issa then makes an interesting point regarding why his company has grown and diversified in the manner it has. In forming a creative department, or in later investigating the need for a sophisticated IT system to service the company at a crucial stage in its development, growth and diversification in operations became two mutually beneficial parts of the same whole.

“The issue in Qatar,” says Abu Issa, “is that you only have the one very small market. For me to have a state of the art IT system, I have to pay ten million riyals. How can I justify that if I don’t have enough business to cover that? But if I don’t have that system, I will be behind all of my regional competitors. The principles expect some kind of reporting system and they want a balance sheet every first of the month, they want to know their stock position, they want to know their expiry dates, they want to know everything.

So I cannot just have a normal IT system, I have to have a very sophisticated one, but not one business can justify that. So we have to build others.”

Abu Issa explains further, is that there are only 250,000 Qataris, and out of the remaining population at least half are low-wage workers who cannot be considered a consumer market for high-end luxury goods. “So really our target market is very small so we have to build and expand horizontally to be able to sustain a professional company,” adds Abu Issa. “For example, if I want to have a good HR manager I will have to pay him a big salary, [but] I cannot just only on my retail business alone justify that.”

On the challenge of the day-to-day management of such a diverse entity, Abu Issa is candid. “In terms of back office, the principles are the same, he reveals. “The back office work, the supply chain, the warehousing, inventory control, accounting, all of these things are the same, more or less. The front face, this is the façade, which is very different. The mentality of someone selling a luxury consumer product is different from a bottle of perfume or an expensive watch, it is different to selling a refrigerator or an air conditioner. Also my profitability in that is also different, so I have to “We must set an example for the youth of Qatar, inspire them to excel, and place create a new DNA for the emphasis on enhancing creativity,” said Ashraf front face of my electronics Abu Issa, speaking in his capacity as founding board member of INJAZ Qatar, at Mubadara, department and the same the 5th Annual Young Enterprise of the Year for every other business… competition award ceremony recently at we have all of these brands Katara. (Image courtesy INJAZ Qatar)

Business Interview

that we also distribute – so each area, each industry or each target customer has to [be approached with] a different state of mind.”

Interestingly, though, he says profit margins might be higher in selling perfumes or chocolates than air conditioning units for example, Abu Issa again returns to the concept of adding value, and bringing new products to the market and long-term sustainability, over short-term gains. “That is not the way to do it,” he underlines.

Another important aspect of Abu Issa’s company portfolio is joint ventures (JV), which Abu Issa Holding not only facilitate but also undertake themselves, should the partnership and circumstances make sense. These JVs, he says, are mostly focused on capital projects relating to government projects.

“These are much bigger scale projects where the technical knowhow is very much needed. These kinds of businesses need experts with a track record, so we cannot do it alone. We always focus and make sure that we are into our core business, and the team that I created to do the joint ventures is totally separate from the core company,” explains Abu Issa, who also says he will not do deals with foreign businesses who do not commit on the ground in Doha and want to be involved by what he calls “remote control”.

There is a good reason for this. Like any businessman in Qatar, Abu Issa is naturally happy about the all business coming into the country thanks to the 2022 World Cup, and to a larger degree all of the public infrastructure, in line with the 2030 National Vision and private building projects that were planned even before Qatar was awarded the venue in ten years by FIFA. However, it is the potential of Qatar post-2030 that interests Abu Issa the most. He is reluctant to invest in infrastructure companies, for example, as he feels these will not be here for the long term, he his happy to consult and be involved in JVs. Whilst the construction boom is underway, there will be constant need for external expertise, Abu Issa adds. But once everything is complete he feels that local companies will be sufficient to oversee the finished products. “You know that after you build those facilities you need some way to manage them,” he says. “You need to maintain them, so we will build these sorts of companies.”

ENTREPRENEUR FOR LIFE In light of his recent E&Y EOY award, when asked if he still considers himself an entrepreneur, Ashraf Abu Issa ponders the question a moment, before he answers: “Yes I do, because for most entrepreneurs money is not the driver. It is the success and getting somewhere where nobody else has been. Or building an organisation and seeing people enjoy working or growing it to a certain level of number of people. From 1981 we had 36 people and now we have 2400 people and that is without JV’s.

When it comes to entering new business territory, “crazy risk” says Abu Issa, is for banks. He explains that his modus operandi is more one of calculated or intelligent risk with a measure of intuition. “You can maybe smell the business, you can feel where there is room for a certain brand, business, niche or whatever,” he says. “And then work towards that.

“For most entrepreneurs money is not the driver. It is the success and getting somewhere where nobody else has been.”

– Ashraf Abu Issa.

“My policy is and has always been to grow and build an infrastructure,” continues Abu Issa. Point in case: Mosafer, Abu Issa Holding’s new travel and tourism agency. “Mosafer means traveller in Arabic,” says Abu Issa. “It is the same word used in Hindi, Urdu and Turkish and Persian. Safari the English word comes from ‘safer’ the verb for traveller. This is a concept we are building, we are designing our own projects, we have an R&D department and a sourcing and quality control office in Asia. We are constantly searching for products that can help travellers move easier and travel lighter and that are more durable and convenient.

“We have seven stores between Qatar, the UAE and Saudi, all of them are very successful and that encourages us to go abroad. My concept of Mosafer is that it will work even better in the developed countries because there is not a business there that addresses that as a specialisation.”

Though Mosafer and some of Abu Issa Holding’s other business concerns also operate in the region and that kind of growth is always something he will look at, for now Ashraf Abu Issa is content to focus mostly on his overall domestic operations in Qatar, which he also believes, thanks to all the initiatives and momentum for SMEs, is a highly fertile ground for business start ups.

As far as following in his footsteps and setting an example for young Qatari entrepreneurs, many would do well to emulate Ashraf Abu Issa, who is a founding board member of INJAZ Qatar and he encourages them to contact him for advice.

“I think entrepreneurs in our region are very open to teach younger ones to go about their business. I advise young entrepreneurs not to be limited to and discouraged by our small market, but look beyond that and consider the region and even the world as their potential market,” continues Abu Issa in closing. “But with that in mind, there is no better base than our local market in Qatar. Because local companies are part of Qatar’s development and represent Qatar at the international scale, a favourable business environment has always been deeply rooted in Qatar’s expansion plans. We understand the vision of His Highness the Emir and the 2030 vision, we have an idea of how many people are going to come into Qatar and this is within the master plan of the country – so if you plan accordingly… and [for] the quality of people, the quality of services that are coming, you have to be prepared.”

TheEDGE

59

ON the PULSE

The Hydrocarbon Game Qatar’s exposure to global oil and gas prices is immense, with volatile international events able to influence Doha’s spending power. So how is the market bearing up in light of the peninsula’s huge budgetary needs? Edward Jameson reports.

Umm Al Berka roundabout at the entrance to Ras Laffan, Qatar’s premiere oil and gas processing facility. (Image Corbis)

ON the PULSE

T

he world of oil and gas trade is a volatile, unpredictable and potentially lucrative one, in which both necessity and speculation combine to buffer energy prices and ultimately contribute to the shaping of national and regional economies.

And perhaps nowhere is this more in evidence than the Middle East and especially, Qatar which, has built its world number one gross domestic product (GDP) on a foundation of oil and gas exports.

And among the top ten World Bank ranked GDP per capita nations, Norway and the Netherlands have also gathered fortunes from natural gas export income, while the United Arab Emirates (UAE) and Kuwait have each built cities in the sands as a direct result of oil exports.

On the demand side, the impact of hydrocarbons on national economies is equally pronounced. The world’s fastest growing international markets – China, Turkey, India and Brazil – have in recent years found their growth restricted not by financial crises, but by cost-effective access to the same hydrocarbon resources.

DOHA’S BUDGET In Doha, the significance of global oil and gas prices on the national economy cannot be overstated. At the time of writing, Qatar was close to unveiling its 2012/13 budget and, according to reports, finance minister Yousef Hussain Kamal, is preparing a “much bigger” budget than was the case the previous year.

The driving force behind this increase in spending, Kamal says, is that for the first time in three years, Doha is planning to increase its oil-price assumption from US$55 (QR200) per barrel (/bl) to US$65bl (QR236).

Last year, the Qatari economy grew by a huge 14 percent, with year on year growth

in the fourth quarter alone coming in at 14.7 percent, according to the Qatar Statistics Authority. The increase in national wealth was attributed to an increase in oil prices, and a consequent rise in natural gas values, which coincided with an increase in gas production on the peninsula.

The link between oil and gas prices is not a fundamental one – it is more the result of financial structures. Across the globe, many natural gas supply contracts are index linked to oil prices. That is, if the average price of a basket of crude oil products increases, so the price that a customer may pay to receive a particular volume of natural gas also increases – the gas price directly tracks the oil price. As a result, the movements of the two hydrocarbon markets are very closely linked.

OIL TODAY In mid-May, the price of Brent crude, which is used to price approximately two thirds of the world’s internationally traded crude oil, stood at US$113/bl (QR411), its lowest since early February. Between these dates, the price rose to more than US$125/bl (QR364), where it remained for a sustained six-week period, before falling back.

But the Brent crude oil price has not fallen below US$100/bl (QR364) since early October 2011, which shines a light on the deliberately conservative nature of the Doha oil-based budget, and the likelihood of Qatar winding up with a substantial surplus.

An oil price in excess of US$100/bl (QR364) is considered high by historical standards. Prices approached US$150/bl (QR546) in the days leading up to the dawn of the financial crisis in July 2008, before retreating.

But in February 2011, two events: the Japanese earthquake and the emergence

Japan’s trade with Qatar, its third largest trading partner among GCC countries, increased by 36 percent in 2011.

Doha is close to unveiling its 2012/13 budget and according to reports, finance minister HE Yousef Hussain Kamal is preparing a “much bigger” budget than was the case the previous year.

(Image Reuters/Arabian Eye)

of civil war in Libya, again pushed crude prices into three figure territory. And since this date 15 months ago, prices have only once dipped below the three figure floor and only then for a single day, thus marking the longest spell of a three-figure oil price in the history of global trade.

OIL FUTURES The vagaries of predicting global oil prices are many, varied and complicated.

Oil price movements – and by extension Doha’s long-term income – can be influenced by political instability, poor economic data, an explosion on a pipeline or a threat against the leader of a hydrocarbon-exporting nation.

According to the Organisation of Petroleum Exporting Countries’ (OPEC’s) latest forecast, global oil demand to 2015 will increase by 5.3 percent to reach 93 million barrels a day (mb/d) after a swifter-than-expected global economic rebound led by emerging Asian economies. But despite this, Europe’s debt crisis and slowing United States (US) growth pose risks, the group says. “It is assumed that prices stay in the range of US$85–95/ bl (QR309–345) for this decade,” OPEC concluded.

A second international organisation, the US-based Energy Information Administration, broadly agrees with OPEC. The group’s most recent estimate put world crude prices at US$95/bl (QR345) in 2015, rising to US$108 (QR393) in 2020.

TheEDGE

61

ECONOMIC BAROMETER

LNG Today Qatar, positioned as it is geographically, exports the vast majority of its liquefied natural gas (LNG) via tanker ship. The global market for LNG to be delivered over the short-term, known as spot cargoes, is commonly priced in FOB (freight on board) US dollars per million metric British thermal units (MMBtu).

In the Middle East, prices have traced a sustained increase since 2010, supported by a long list of geopolitical drivers and global events. The peak in LNG prices was seen late in 2011, prior to the northern hemisphere’s mild winter as nations stocked up to cover against the possibility of cold weathertriggered high demand, when a FOB cargo in the Middle East was valued at US$16.2 (QR59)/MMBtu. Following this, prices retreated to US$12.9 (QR47)/MMBtu, before gradually tracking higher again. At the time of writing, spot LNG prices were back in line with their long-term peak.

As one would expect, LNG prices elsewhere around the world are very closely interlinked because of the global nature of the market.

When demand is high during the northern hemisphere winter, the opposite is true in the southern hemisphere. But when the northern hemisphere enters its summer, demand is supported by the southern hemisphere winter – meaning Qatar is able to sell its most valuable export into a year-round market.

As a result, prices in Qatar’s two dominant markets for LNG exports, northwest Europe and the Far East, have traced a very similar path to that set in the Middle East, with spot values in May of this year broadly in line with historical peaks.

GAS FUTURES It is difficult to distinguish future gas prices from those of oil because of the intrinsic financial link between the two commodities.

But one primary driver of the LNG spot gas market that exerts a more pronounced influence on gas prices than on the crude market is Japan’s ongoing energy gap.

Since the Far East nation switched off its huge 50-strong nuclear reactor fleet for safety checks, the nation has been heavily reliant on expensive imports of predominantly crude oil and LNG, in order to fuel its rebuilding efforts.

62

TheEDGE

“Japan’s trade with Qatar, its third largest trading partner among the Gulf Cooperation Council (GCC) countries, increased by 36 percent to US$31.2 billion (QR113 billion) in 2011,” the Japan External Trade Organization (JETRO) confirmed in a statement in May. “Qatar was the world’s largest supplier of gaseous hydrocarbons to Japan,” it said. “The value of Japan’s import of petroleum gasses from Qatar, which has also pledged to supply additional quantities of LNG jumped to US$13.2 billion (QR48 billion) in 2011, compared to US$7.4 billion (QR26.9 billion) in 2010.”

Much may now depend on the degree of public opposition that exists when the Japanese government inevitably moves to ease its heavy burden of import costs by reactivating its nuclear power plants.

Should the government be forced to back down from the idea of reactivation, as some analysts fear it will, there will be no mediumterm alternative other than to continue to import fossil-fuels – which will support demand and possibly keep global prices near the current historical peak.

THE BROAD OUTLOOK Should support for demand remain in place, Doha will find the means to fund expansionist budgets similar to the one it is preparing to unveil. And with the small matter of the 2022 World Cup construction programme to bankroll over the next decade, expansionist budgets are required. And even looking beyond the 2022 World Cup, the hugely expensive process of economic diversification must continue to progress with the same impressive momentum that has characterised it over the past decade.

It is difficult to distinguish future gas prices from oil because of the financial link.

Getting Tech The direction of oil and gas prices, and by extension, Qatar’s spending power, is very much at the mercy of global events. But one thing that Doha certainly does have the means to control its ability to extract huge volumes of hydrocarbons in an efficient and profitable manner.

Speaking at the Society of Petroleum Engineers International Production and Operations Conference and Exhibition in Doha in mid-May, energy minister HE Mohammed bin Saleh Al Sada said: “Advances in the oil and gas engineering technology over the past several years have played a significant role in the successful transformation of Qatar’s economy. It has left an indelible footprint on the path of Qatar’s development as the world’s leading producer and transporter of LNG.” Alongside the development of Qatar’s North Field, the largest single natural gas reservoir in the world, field development plans for three Qatar Petroleum-operated mature oil fields are currently underway, Al Sada says. “The redevelopment of these fields is being carried out using the latest ‘smart’ oil field technology that will help improve recovery.”

“Advances in the oil and gas engineering technology over the past several years have played a significant role in the successful transformation of Qatar’s economy,” says Qatar’s energy minister HE Mohammed bin Saleh Al Sada. (Image Reuters/Arabian Eye)

KNOWLEDGE & EXPERTISE PRODUCTIVITY ANd WELLBEING • legal insight • BUSINESS management

MANAGING PRESSURE FOR ENGAGEMENT (P.64)

Lauren Penny writes how managing pressure ineffectively by employees and managers can negatively impact an organisation and explores the need for managing pressure for engagement.

ALSO IN THIS SECTION: •

Legal Insight: Michael Early and David Salt look at The Supreme Council of Health’s recent announcement of a new draft law concerning mandatory health insurance in Qatar. (P.66)

•

Business Management: D. Eric Boyd, Rajesh Chandy and Marcus Cunha explain how chief marketing officers can play an important role in an organisation. (P.68)

PRODUCTIVITY AND WELLBEING

MANAGING PrESSurE FOr

ENGaGEMENT

Managers are expected to lead their teams for continuous and long periods of optimum performance and productivity while employees are expected to recognise their own behavioural signs when stress exceeds normal parameters. Lauren Penny explores the cycle of managing pressure for engagement.

M

anaging pressure ineffectively by employees and managers in their job can negatively impact their health, job performance, behaviour and attitude, within the organisation and even lead to dismissal or resignation. However, there is a level of engagement whereby the right ability to cope with the work pressure can result in creative thought and role decisiveness, leading to employees peaking in their performance.

There is a pivotal point before the ‘peak of performance’ when the performance is ineffective due to the lack of pressure, and after the ‘peak of performance’ where stress exceeds the ability to cope leading to the deterioration of productivity.

But whose responsibility is it to recognise the ability to cope, is it the manager or employee? How can employees recognise these negative signs when they react aggressively to people over minor issues?

Who is to rectify when an employee is increasingly being absent as they feel they are not included in projects, when work deterioration is common and their work reveals signs of abnormal errors, confusion and frustration?

Employees in high stressed state – should their performance go undetected – can lead to the nonreversal stage of employee burnout.

MANAGING PRESSURE Let’s explore the three areas of managing pressure of engagement and identify the signs, and potential methods to sustain employees in the optimum ‘peak of performance’.

The curve of managing pressure for engagement can be seen in three areas: 1. Lack of Engagement 2. Performance Focused – Engaged 3. Stress: Burnout

PRODUCTIVITY AND WELLBEING

LACK OF ENGAGEMENT Rust Out: When an employee rusts out, it means that the employee has become bored in their workplace, ultimately becoming depressed and apathetic. The quality of work goes downhill, as the employee loses interest, finding the job unfulfilling. For middle management, they plateau out and find themselves unable to advance. Young, talented employees with strong qualifications may also rust out if they are placed in positions that do not allow them to utilise their skills, causing them to get bored and restless.

Frustration: Employees can experience pockets of frustration when subjected to unnecessary rules and procedures, unproductive organisational structures and the feeling of not being heard.

Boredom: Boredom in the workplace is fundamentally due to the fact that the majority of employees want to go to work to feel that they are contributing and adding value and if they are not, then the stress factor of boredom appears. They can withdraw or become disruptive and even abusive to others, productivity is reduced, and they might sabotage projects or even steal from the company.

Suggested ways to overcome this lack of engagement are to: • Keep employees active and involved • Match the employee interests to their role and skills.

• Keep the channels of communication open between the employee and manager.

• Allow for decisions to be made by the employee within their remit.

FOCUSED – ENGAGED Alert: Employees are awake, alert and aware to all matters for effective output and engagement.

Decisive: Employees are able to make important, crucial, quick and critical decisions.

Creative: Employees are motivated to make a difference in their role and their projects. They have the ability to produce something that is new and that will add value to their role and organisation. They have a fresh approach to productivity, managing people or delivering services.

Effective: Employees are efficient and performing at their maximum effectiveness and value.

Optimum: Employees optimal performance arises when employees feel a sense of connection to their work and their organisational targets and achievements.

This encourages employees to increase their discretionary effort in ways that help unleash business performance and deliver their optimum performance of productivity.

Suggested ways to enhance employee performance and peak performance are: • Clear and understood expectations of deliverables, goals and milestones.

• Consistent and honest feedback of both strengths and areas for improvement.

• Open and regular communication of priorities, amendments and expectations.

• A well balanced diet. Certain foods boost a sustainable high level of performance.

• Regular exercise to reduce and eliminate unwanted negative stress and the release of feel good endorphins.

• Rest periods within the day and after work.

• Balance in personal life.

• Provide autonomy for the employee to make relevant decisions within their role.

STRESS: BURNOUT Reduced efficiency: The employee after their peak performance over long periods of time, limited rest or changes in the workplace; can start to show signs of reduction of efficiency in performance.

Hard to concentrate: The employee shows signs of lack of concentration and loss of thought.

Indecisive: Employees are slower to make up their mind, hesitant and uncertain. The speed of decision-making is reduced compared to their optimum ability to make decisions.

Irritable: Negative behavioural signs of irritability towards colleagues start to show and the employee presents a short temper.

Anxious: Presenting signs of apprehensiveness and nervousness of project timelines and deliverables.

Confused: The employees are puzzled and bewildered with the matters at hand and in-effective in their decision and productivity, due to their confused minds.

Fatigue and exhaustion: The employee normally fit and well, shows a level of reduced or low energy, tiredness, often seeking caffeine and sugary drinks to bring un-natural energy to their day.

Increasingly make judgemental or memory related mistakes with the onset of fatigue and exhaustion.

Burnout: Burnout strikes employees when they have exhausted their physical or emotional strength. This usually occurs as a result of prolonged stress or frustration. Stressful jobs, lack of support and resources, employee’s expectations of themselves and tight deadlines can all contribute to burnout.

Suggested ways for managers to effectively overcome the stress of their employees that leads to burnout are: • Regular meetings with the employees of deliverables and observing the behaviour of the employee.

• Rectify the matter with the employee by working together to reduce the stress triggers. Managers are to be mindful that in most cases, the employee is not aware of their stress or their behaviour.

• Meet with the employee to further understand the reasons for stress, organisational pressures, managerial issues, personal issues.

• Work closely to rekindle employee motivation and boost their confidence.

• Hold group discussions with employees of the workplace of the stress triggers; an employee survey may be useful.

• It is critical for engaged managers to consistently work with their employees to continue to support and encourage their peak performance. Failure to do so, may not only impact the work delivery but lead the employee to burnout and effective resignation from the role, a situation every manager wants to avoid.

Effective performance of employees can be seen as a direct reflection of the effective managerial leadership and awareness of the cycle of managing pressure for engagement. Managing pressure ineffectively by employees and managers can negatively impact their health and job performance.

TheEDGE

65

LEGAL INSIGHT

A NEW

hEalTh REGIME FOr QATAR

By Michael Early and David Salt

T

he rapidly increasing population of Qatar, combined with continuing advancements in medical technology and pharmaceutical innovations, has begun to put pressure on the financial and infrastructure capacity of the healthcare sector. Pursuant to the goals set out in the Qatar National Vision 2030, the State of Qatar has been working to implement a social health insurance scheme (SHIS) to provide universal health care access by 2014, in order to strengthen the healthcare infrastructure of the country.

The Supreme Council of Health (SCH), the governmental entity responsible for the development and implementation of the SHIS, last month revealed initial details regarding the way in which the scheme will be implemented. Currently the draft law that will implement the SHIS is under consideration with the Council of Ministers.

LEGAL INSIGHT

Although the draft law has not been circulated for wider consultation, several key details have been released by the SCH through local newspapers and media statements. According to these sources, the draft law provides that the government will pay the health insurance premiums for Qatari nationals while employers will be responsible for the premiums of their expatriate workers.

Once the draft law has been approved and comes into effect, the government plans to require all residents of and visitors to Qatar to have insurance coverage by the end of 2014.

The SHIS will be mandatory for residents and will be linked to the processing and granting of residence permits for expatriates.

However, the position with respect to the coverage of expatriates who are not sponsored by an employer remains unclear. In preparation of the implementation of the draft law, the government has initiated the establishment of the National Health Insurance Company (NHIC), which will be wholly owned by the SCH. The NHIC will have a seven-member board of directors representing various ministries and other public and private entities.

The NHIC will ultimately launch and regulate the SHIS by coordinating between insurance providers and the beneficiaries of the SHIS. The scheme will be further supported by a third party administrator responsible for establishing a provider network and processing claims.

Currently the intention is for the SHIS to cover all public and private healthcare service providers in Qatar including primary, secondary and tertiary healthcare services.

Hospitals, clinics, polyclinics, as well as medical laboratories should also be included in the SHIS. The tendering process for the third party administrator is expected to commence in the near future.

The SHIS will be rolled out through a series of five phases. On 12 April 2012 the SCH announced that the pilot programme of the SHIS will be launched around November of this year, followed by additional phased programme rollouts to be completed by the end of 2014. The pilot programme will initially provide cover to approximately 75,000 Qatari women aged 15 years and above. Among the services to be covered by

Health insurance will be mandatory for Qatar residents and will be linked to the processing and granting of residence permits for expatriates. the programme are maternity, obstetrics and gynaecology with more services becoming available at a later date. The application of the pilot programme has been deliberately limited in order to enable the SCH to micromanage a small portion of the public healthcare population, allowing them to troubleshoot issues as they arise while simultaneously limiting the impact of such issues.

The second stage of the SHIS is planned for July 2013 and will extend the scheme coverage to include all Qatari nationals and provide access to primary healthcare facilities and certain private sector participants. In October 2013 the third stage will be implemented entitling all Qatari nationals to basic services from all healthcare providers in Qatar. By May 2014 the fourth stage will extend coverage of all Qatari nationals under the SHIS to all services in the private sector and half of the services available on an outpatient basis.

The final stage, earmarked for the end of 2014, will extend SHIS coverage to include all residents of Qatar with the majority of those covered eligible for the basic package of benefits of healthcare services at both primary and secondary levels.

The current intention is for private health insurance companies to operate under the NHIC as providers of supplementary health insurance services, while the NHIC will be the sole provider of the basic premium package.

It is also envisaged that Qatari nationals will be entitled to receive a more enhanced basic package compared to other residents.

In addition to providing health insurance coverage, the SHIS will use the premiums collected to fund the scheme with the goal of improving the quality and efficiency of healthcare services being offered in the country, and thereby potentially increasing the

participation of the private healthcare sector in the scheme.

At this stage the SCH in conducting a comprehensive study in order to identify the overall costs associated with healthcare services in Qatar. The findings of the study will aid in determining the applicable premium amounts for the SHIS. Once the SHIS has been put in place, the draft enabling legislation may be reviewed subsequently and amended as necessary to reflect the development of the scheme.

Although the draft enabling law has generally been agreed, the SHIS will not formally commence until the legislation has been promulgated. In the interim many residents (as well as stakeholders in the healthcare sector) anxiously await the roll out of the SHIS’ first phase. While it is likely that there are quite a few challenges to face before the SHIS will be implemented effectively, it appears that Qatar is progressing the scheme at a pace that may well see its complete implementation prior to 2015.

All Qatari Laws (save for those issued by the Qatar Financial Centre (QFC) to regulate its own business) are issued in Arabic and there are no official translations, therefore for the purposes of drafting this article we have used our own translation and interpreted the same in the context of Qatari regulation and current market practice. This article should be used for information purposes only. It is not legal advice and should not be relied upon as such. Please end questions in connection with this article or the legal issues it covers, to David Salt or Michael Earley of Clyde & Co LLP at david.salt@clydeco. com.qa or michael.earley@clydeco.com.qa TheEDGE

67

BUSINESS MANAGEMENT

Th

eC

MO

Consequence

of

Ar ec necessa hief ma Bu siness ry rke sh ows Sc ? Recenting office th is is tha hool t London no t th resea rs t absole answe rc h ut rt e. o

BUSINESS MANAGEMENT

Some executives feel that chief marketing officers (CMOs) have limited effect on corporate performance and do not add significant value to a firm’s bottom line. D. Eric Boyd, Rajesh Chandy and Marcus Cunha agree that while the CMOs role in many firms is in great peril, they also argue that their research has uncovered reasons why the contributions of some CMOs are invaluable.

H

iring the person who is truly the right fit for the firm’s chief marketing officer (CMO) may be the key to their success in the position. The CMO is the direct steward of a firm’s customers, and customers are one of the few stakeholders who actually provide revenues that keep a firm running.

To be a high-performance CMO requires not only the collection and dissemination of market information, but also the design and implementation of marketing strategies. Most importantly, the CMO is the executive responsible for the management of relationships with critical stakeholders.

When it comes to new and existing major clients, their negotiation skills usually play an essential role.

Our recent research examined newly hired CMOs and asked the question: how did the appointment affect the stock value of the company? The answers revealed that a CMO is far from irrelevant to the financial performance of any firm. It also exposed an unanticipated factor controlling a CMO’s influence on the company’s stock price – the firm’s own customers. Success can only happen if the CMO is not the pawn of one or more powerful customers.

Of course, the success of a CMO is also significantly influenced by firm size, scope and performance.

Yet, from our findings emerges a portrait of the CMO of consequence.

WALKING A TIGHTROPE The CMO finds himself/herself squarely between the interests of the firm that employs him/her and the major customers who buy from that firm. That is because the CMO is

responsible for understanding the concerns and interests of customers, and ensuring that the voice of this critical stakeholder group is heard. But customers are not inert actors.

They have power over firms as a result of their financial importance, and they are often willing to use this power to influence decision-making. The CMO can quickly become the ultimate middleman, forced to represent a large customer’s demands or requests, which usually requires their interface with other executives in the firm.

This can become quite sensitive.

The push by powerful customers to focus a firm’s financial, human and capital resources on activities catering to their current needs, can pressure a CMO into a pattern of making short-sighted decisions to please the powerful customer. Additionally, fear over losing the revenue or resources provided by a powerful customer can cause the CMO (and the firm) to focus solely on one customer’s interests at the expense of other customers. Depending on what it costs to keep a large customer satisfied, the CMO may funnel scarce resources into service for that one powerful customer.

OUTSIDE INFLUENCE Our research suggests at least two key factors help some CMOs manage effectively, even in the presence of powerful customers.

One factor is whether the CMO is an insider or an outsider to the firm. Another important factor is the amount of experience the CMO brings to the firm. A CMO who is brought in from outside a firm can be the start afresh and remove any encumbrances placed upon the firm by a large, powerful customer. When a CMO has extensive experience in the marketplace with other firms, he can quickly

identify other large customers with whom a new relationship can be established. This can rapidly rebalance the influence of any dominant existing customer.

By contrast, CMOs who are promoted to their position after serving many years inside the firm may find, upon promotion, that the peer executives with whom they have worked for many years are hesitant to make any dramatic changes. The appointment of an insider is generally viewed as an endorsement of the status quo within a firm while the appointment of an outsider is viewed as an attempt to break from the past. The newly promoted CMO may feel he has a duty to protect the interests of a powerful customer; his/her misplaced loyalty could blind the CMO to other market opportunities.

Outsiders will be permitted greater discretion in engaging in any activity that is less focused on a powerful customer, and will also bring new perspectives and behaviours that call into question routines and norms that support a firm’s focus on the interests of a powerful customer. Lastly, the network of contacts outside a firm that an outsider

A new CMO who has a track record in the chief marketer’s role is more likely to project security and confidence.

TheEDGE

69

BUSINESS MANAGEMENT

brings to the CMO position provides a set of opportunities that may not have otherwise been evident in the presence of a powerful customer demanding high levels of managerial attention.

The second factor is that a new CMO who has a track record in the chief marketer’s role is more likely to project security and confidence in his/her decisions, and provides executives with already ingrained insights on how to manage the relationship with a powerful customer. This helps the CMO inside his own firm, and garners the requisite respect to bargain effectively, when needed with the firm’s customers.

THE CMO DIFFERENCE We found some important factors that determine whether a CMO can make a positive contribution. How much discretion the CMO has regarding the impact of customer power relates strongly to three firm-level factors: firm scope, firm size and prior firm performance.

Firms with large scope usually compete in a large number of markets. CMOs working in firms with large scope are able to stay abreast of changes in the market at large – despite the pressure put on them by powerful customers to focus solely on their interests. Each market requires managing different relationships, supporting past and present customers and working with different suppliers. These activities create a set of pre-existing market obligations that CMOs must support. Each connection alerts the CMO to new investment opportunities that he may have overlooked.

Finally, competing in multiple markets enhances the CMO’s informational role. It appears CMOs

CMO candidates should carefully assess the level of discretion that would be available to them in the job.

70

TheEDGE

in firms with large scope have an advantage and can successfully fulfil their relational roles, despite the presence of powerful customers.

The size of a firm may also moderate the effect of customer power on a CMO’s role in the firm’s performance. The negative impact of a powerful customer on the managerial decisions of a CMO is likely to be greater in larger versus smaller firms. When a firm’s customer base includes a major customer, often marketing activities will be divided among organisational units. A major customer may make inordinate time and resource demands.

One result of this dispersion is that key informational, decisional and relational roles typically performed by the CMO get distributed among department heads throughout the firm.

This in turn will dilute the power of the CMO. Finally, a key factor determining a CMO’s aspiration level is the past performance of the firm itself. At those with higher prior performance, it is likely that pressure exists to bring in new customers and thus exceed the performance of prior years.

A key role for any marketing function is to generate sales. Therefore, prior performance is an important gauge other firms use when forming strategic relationships.

DO CMOs MATTER? Here are the primary questions we asked and what our research revealed, in brief: Does a CMO affect firm performance?

The answer must include this caveat: on average, the appointment of a CMO in the presence of high customer power actually reduces firm value. Conversely, the appointment of a CMO when customer power is low creates firm value.

How much does experience count?

Investors appear to recognise that an experienced CMO can limit the effect of customer power on managerial discretion. An experienced CMO is seen as a boon to the future of a firm.

How much of a role does market scope play? The effect of customer power is less when a CMO’s firm has a larger scope. The return associated with the appointment of a CMO is greater – even when the firm faces high customer power – if the appointing firm has an above-average level of scope.

Do CMOs impact a firm’s value? Their contributions are far from uniform. In only 46 percent of the cases in our study was the stock market response to the appointment of a CMO positive, meaning, in 54 percent of the cases, the response was negative. We argue that the contributions of CMOs to firm value are highly contingent on the managerial discretion available to them in performing their informational, decisional and relational roles.

The successful CMO Recruiters considering CMO candidates might be more likely to place a successful executive if they have a better sense of the contingencies involved in CMO success.

CMO candidates should carefully assess – before they plunge into a new CMO position – the level of discretion that would be available to them in the job. CMOs are, in their role as customer stewards, often expected to develop strong economic ties between their firms and their customers. Yet ironically, a move toward strong economic ties with a few customers will likely reduce CMO discretion and thus limit the effectiveness of CMOs in driving firm value.

As with the success of any corporate executive, many factors come into play. The success of the person in that role is keenly related to his past experience, the present business context and the nature of the customer base. CMOs can affect firm value in a unique way; but the firm must be sure the right kind of person is chosen for the office.

When the fit is right, the CMO can be an executive of great consequence.

BUSINESS INSIGHT Inside the minds of leading business figures

NEW DEAN AT GEORGETOWN UNIVERSITY QATAR (P.74) Previously professor of international relations and Middle East politics at Exeter University in the United Kingdom, Gerd Nonneman is now the new dean of Georgetown School of Foreign Service in Qatar. He discussed with TheEDGE his vision and the calibere of graduates that will be entering the workforce soon.

ALSO IN THIS SECTION: •

Bose Corporation latest audio products: James Scammon, vice president of Asia Pacific for Bose recently visited Doha to open the first Bose store at Lagoona Mall.

TheEDGE was at the launch and interviewed Scammon about their latest innovative audio products. (P.72)

•

Meeza discuss the importance of IT Security: Qatar’s premier information technology (IT) services and solutions provider, MEEZA is continually providing new concepts in data storage. TheEDGE spoke to MEEZA’s deputy chief executive officer Ghada Philip El Rassi. (P.76)

BUSINESS INSIGHT

Technological Audio

The Vice President of Bose Corporation discusses their innovative audio technology products and systems James Scammon, vice president of Asia Pacific for Bose Corporation with

responsibilities’ in the Middle East and African markets, recently visited Doha to open the first Bose store at Lagoona Mall. Erika WidÊn reports further about Bose Corporation and why they remain the global leader in audio innovative technology products.

72

TheEDGE

BUSINESS INSIGHT

A

ccording to James Scammon, vice president of Asia Pacific for Bose Corportation, “Dr. Amar Bose founded Bose in the United States (US) 1964. Dr. Bose started the company with one key objective to get products to market that make people’s lives better. Our focus has been to fund our research to enable us to bring new and the best in class products to market. This in turn has fuelled our growth and development since then.”

Scammon goes onto quote Bose in an interview in 2007 regardomg an early review that has kept Bose Corporation alive untill today. ‘“One magazine in the US, a really credible magazine, had a reviewer named Norman Eisenburg who really knew his music,” said Dr Bose. “In those days I used to take the loudspeaker to the reviewer. I packed my son and loudspeaker in the car and went off. I put this little thing on top of the big speakers he had, turned it on, and within five minutes he said: ‘I don’t care if this is made of green cheese, it’s the best sound, most accurate sound, I’ve ever heard.’

“He came out with a review titled ‘Surround and Conquer’. He was not known to do things like that. Everybody in the press knew he knew music and it resulted in rave reviews one after another, and we were able to survive.”

In 1993, said Scammon, Dr. Bose opened his first store in Kittery, Maine. Since then the company has expanded more than 160 stores around the US and a large number worldwide.

Dr. Bose, while a graduate student eight years before he launched Bose Corporation was disappointed with a high-end stereo system he had purchased. He then conducted an intensive research aimed at clarifying factors, which he found as fundamental weaknesses – plaguing quality audio systems.

The main weakness was that the design of the electronics and speakers failed the spatial properties of radiated sound in homes and apartments. When he began his own company, his mission was to achieve ‘ Better Sound Through Research’ which has remained untill today the company’s slogan.

Bose products are not new to the Qatari market. Darwish Holding has a 20-year partnership with Bose Corporation and are the sole distributor of Bose audio products, which have been available to the local market since then. “As our association has strengthened, so has the connection of people in Qatar with the brand Bose,” said Scammon. “It seemed the right next step to have an exclusive showroom

“Our focus has been to fund our research to enable us to bring new and the best in class products to market.” that could get all offerings from Bose for the home under one roof. This will help us not only offer people of Qatar a wider variety but an overall better experience.”

Recently Bose Corporation opened their first store situated in the high-end shopping centre, Lagoona Mall. Bose products are available throughout the Gulf Cooperation Council (GCC) through a network of distributors. While Bose products are present in Qatar, Kuwait, Bahrain, Saudi Arabia and Oman, only a few exclusive Bose stores are available in a few cities of these Arabian states.

Bose products are best known to deliver loudspeakers, noise-cancelling headsets and automotive sound systems.

“We are focused on delivering quality audio no matter what our offering may be.

Our products come with three attributes that act as a signature for them, great audio performance, simple to use and elegant design that blends into your home,” said Scammon, “All systems use Bose proprietary technologies making them unique in the market. No matter what size of the system it promises to deliver a quality sound as close as possible to how the artist intended it to be reproduced.”

In Qatar the Bose exclusive store will be offering all products for domestic use, which includes home theatre systems, music systems, speakers, computer speakers, iPod docking stations and headphones.

According to Scammon, there are several innovative technologies ensuring Bose systems to perform not only well but also easy for the customer to use. One innovative technology of Bose Corporation is the AdaptiQ, which is integrated in all Bose home theatre systems today. AdaptiQ is a smart engineering system that is inside the computer and once it is installed it listens for the speaker placement and room acoustics and calibrates the system to perform optimally in the home space.

Their second innovation, furthered Scammon, is the noise cancellation technology that comes in the active headphones. This was a category that was spearheaded by Bose. People who travel frequently or who work in noisy environments

will be able to appreciate the fatigue that is imposed on a person by the whole effort of cutting out unwanted noise, and concentrating on getting work or even trying to sleep on a long flight. The QuietComfort headsets listens to these unwanted sounds and cancels them out, allowing for silence around the ears or just pure music to come through.

While the QuietComfort technology, said Scammon, works on great noise cancellation, another innovation used by Bose is the ProprietaryTriport technology that ensures great bass response along with high quality audio from the headphones without the need for an external bass booster. The performance and the sound is so clear that customers often compare the experience to listening to music on a stereo system.

During the recent launch at Lagoona Mall, Bose Corporation introduced to Doha its latest home theatre module, The VideoWave Entertainment System. “Bose VideoWave is our first foray into marrying great video with outstanding audio performance,” said Scammon, “the visualisation of our research engineers was to create a television that had the home theatre built into it without adding components to the television, and that is just what they achieved with the Bose VideoWave. In fact the Complex. com in the United States said that this is the best sounding TV ever.” The Bose VideoWave has a complete sound system built behind the screen that promises a room filling rich experience for the viewer, hearing an amazing low note performance without an external bass module, clear highs, a room filling sound that seems to come from a sound stage much wider than the size of the screen. Scammon added that the final point is their innovative Clickpad that has redefined how easy and intuitive a remote can be.

This remote, while holding just the essential functions, allows users to navigate through the controls without leaving the action on the screen. Also those controls appear on the screen that are relevant to the source while watching, making it easy to use and navigate.

The vision of Bose Corporation is for more people across the globe to receive the Bose innovative technology experience, added Scammon, including the Middle East and of course Qatar.

TheEDGE

73

BUSINESS INSIGHT

Higher Education

The new dean of Georgetown University Qatar speaks about higher education Previously professor of international relations and Middle East politics at Exeter University in the United Kingdom, Gerd Nonneman is now the new dean of Georgetown School of Foreign Service in Qatar. He discussed with TheEDGE his vision and the calibre of Georgetwon graduates that will be entering the workforce soon.

As the new dean of Georgetown University Qatar, what is your vision for Georgetown University Qatar and future plans?

The vision is to pursue excellence in research and teaching, and show relevance and rootedness by engaging with society. By engaging with the other institutions that then leads to initiatives, like thinking about joint certificates with other institutions, like collaborative agreements with Qatar University, like outreach into Qatari Society, and like things that are an expression of values of Georgetown which are not just about pursuing excellence. The whole Georgetown values derive from the Jesuit heritage which is not just about excellence, it is about being the best you can for others. That is really quite explicit, and it is constantly drummed into people here and has been for the last two hundred and seventy something years.

That is reflected in an aspect of the student experience at Georgetown, and that is quite unique. It is called Service Learning Trips.

They go abroad to a programme called Zones of Peace and explore areas where there has been conflict but there has also been reconstruction going on, reconciliation, and where there are tangible projects to be taken.

It is all about not just sitting in your ivory tower with all of your privilege and excellence, but to be part of your local, regional and global society.

74

TheEDGE

How does Georgetown University differentiate from other universities and what makes the university unique?

As long as you adopt or can see yourself in those wider values of taking care of the person, being the best you can for others and so on, and indeed, develop tolerance of people of different views. That is something that I think is unique to Georgetown and secondly the School of Foreign Service of which we are a branch here, and is certainly unique in Qatar as a liberal arts programme. That is to say that yes they are focused ultimately at becoming global leaders in any field and that may include Foreign Service. They do this by building on a very broad curriculum that is about history, philosophy, economics, language, and anthropology etcetera. All of the students have to go through this, and it is taken very seriously. They get a whole broad skills set before they choose their major. That is why when they come out of here they can become polished diplomats, or government servants. But they can also become journalists, economists, join law firms, and they can go to graduate programmes anywhere in the world.

Because of the very broad liberal arts approach you produce a more rounded person. Secondly, that kind of job market is very wide.

What special English programmes do you offer since for the majority of the students English is either their second or third language?

There are no special programmes offered for people who are not very good at English.

In fact, you only get in here if you have very high scores in your secondary education but unless you are a native English speaker, you have to put forward a minimum level certificate of ILTS or TEFL at a very high

BUSINESS INSIGHT

level. In fact, the required level here is higher than in some good universities in the United Kingdom (UK) or in the United States – in order to make sure that they can actually cope with a very demanding programme.

You don’t want to bring people in just hoping that they will somehow get by. Because it is tough and there is a lot of reading, discussion, writing, and academic skills are necessary.

Now, what we do, and that is not just for people who don’t have English as a native language, we run a very impressive academic service operation. This includes professionals in English for academic purposes, academic skills – all kinds of generic skills, but it would also include specific tuition in certain subjects like economics. Economics can be very hard and every student has to take microeconomics even if they don’t go on to do a major in international economics. So there are people, including students and advanced students who help others through the difficult bits. They get extra tuition to help them through. So we do have that sort of general help available for students. It is not so much the language that is a problem once they come in, the problem is that some students who are educated in Qatar at secondary level are with a few exceptions– not always as well prepared for top level critical reading, critical analysis, large volumes of reading and integrating that material into large writing assignments. Those things are not always what secondary education in Qatar prepares people best for, so they might be exceptionally bright, have incredible qualities and a skill set, but you have to make sure that you have the apparatus in place to take them through those little hurdles. By year two or three, and certainly by the end of year four, they perform at the highest level globally.

What is your perspective in regards to media freedom in Qatar? And do you feel that freedom of speech is more open here in comparison to other places in the Gulf Cooperation Council?

I think that this is a work in progress. When you talk about media you have to divide print media and visual media. Print media, I would say that Qatar is just about running with the pack in the Gulf Cooperation Council (GCC) because within the GCC there is an increased opening, much less so in Oman, but Saudi newspapers tackle very tricky subjects, Kuwaiti newspapers have done so for a long time. Qatar is moving with the pack in the television and broadcast media. Al Jazeera English and Al Jazeera Arabic show Qatar well

“The new Qatari graduates will know aspects of law, microeconomics and macroeconomics, and be truly proficient in an extra language as it is also a requirement.” ahead of the pack so if you take the print media out of the picture then you could say that Qatar is really ahead of the other Gulf countries.

enough in their GPA to do a semester abroad.

So we encourage them to go and study abroad even if they are based here.

How prepared are Georgetown graduates once they enter the work force whether it will be in Qatar or in the Gulf region?

No graduate is ever fully prepared for the work force. There is always a good deal of on the job training, but I would say that our graduates are better prepared than virtually any that I know of because of that level of training that they have had through the broad liberal arts programme. They will know aspects of law, microeconomics and macroeconomics, and be truly proficient in an extra language, as it is also a requirement. They will have a broad historical background. They would have studied politics, done exercises in critical analysis of problems, practiced debating, and even putting forward views that are not their own. They come out at the end with a skill set, a level of confidence in engaging that prepares them exceptionally well and the proof of the pudding is in the eating. If you look at the statistics of where our students go and whether they get jobs, we score better than any other institution in Qatar. I think we are in the high 90 percent of people getting jobs. It is only very occasionally a graduate hasn’t got a job within six months or after a year. The distribution shows that they are really going everywhere, the government and private sectors, oil and gas, higher education, law etcetera.

Of the one third of Qatari students registered at Georgetown University Qatar, are the majority girls? Does this mean that boys prefer to receive a higher education abroad?

Yes, and there are several explanations.

Boys in the Gulf as a whole are underrepresented in universities. One because they, with fantastic exceptions – perform at much lower level than the girls if you take them as a group. They are less motivated but also the families find it less problematic to have their sons go study abroad than the girls. It is a combination of these elements that explains why boys are under- represented in university education in the Gulf.

Do Qatari students prefer to study in their home country or do they prefer to go abroad?

It is hard to put down a general rule. There are some who clearly prefer to study abroad if they can, because it is a different experience.

There are some though that like to stay close to their families and of course some of the students would like to study abroad, but their families won’t allow them. It is a mixed picture, but what we do is with the students that come here, we try and give them a particular version of the Georgetown experience –but we also encourage the ones who are scoring high

You have a number of publications in regards to political viewpoints. Could you give TheEDGE an insight of the current research that you are doing now?

One project is a kind of collection of the best work that has been published over the last thirty years or so on Arab democratisation and authoritarianism, which should appear later this year with an introductory essay by myself.

Another is a similar kind of collection on the international relations of the Middle East. I am currently finalising the Arabic updated edition of a book I produced with a colleague on Saudi Arabia – covering the politics, economics and society in Saudi Arabia. In the longer run I hope to return to a project, but this is not going to be for another couple of years, on the foreign policies of the Gulf States.

On a separate track, one of the things that I remain very closely involved in is a Journal of Arabian studies. It is the only scholarly journal on the region anywhere really. It is a proper, international peer reviewed journal and I am the associate editor of that, and in fact Georgetown is going to co-produce it with the University of Exeter in the UK, which has the only centre for Gulf studies in the world, and where I was previously based.

TheEDGE

75

BUSINESS INSIGHT

InformationTechnology

MEEZA executive discusses cutting edge data centres and disaster recovery services As Qatar’s premier information technology (IT) services and solutions provider, MEEZA is continually providing new concepts in data storage and protection to the local and international market. TheEDGE spoke exclusively to MEEZA’s Deputy Chief Executive Officer Ghada Philip El Rassi, to find out more about their M-VAULT Data Centres and the measures MEEZA takes to ensure that every client’s data is totally secure.

What are MEEZA Data Centres and how do your clients benefit from this service?

MEEZA data centres, named as M-VAULT 1, 2 and 3, serve as an important foundation on which MEEZA delivers a full portfolio of Managed IT Services and Solutions to the market.

All three M-VAULTs are built and operated to support a full range of business drivers targeting both international and national companies. These facilities are designed and operated to meet requirements of the Uptime Institute Tier III Data Centre Classification to ensure and provide the maximum availability and resilience for its clients.

MEEZA utilises Cold Aisle containment solutions to deliver more efficient, environmentally sound solutions for our customers. Traditionally, entire data centres were kept cool to ensure system stability. With cold aisle technology, racks are set up in self-contained aisles behind sealed doors for cooling efficiency. Cold air is only required in the sealed zone.

The Cold Aisle containment concept is

76

TheEDGE

technically elegant. Stated simply, all significant air pathways from the hot aisle to the cold aisle are blocked. This creates a Modular Private Suite/ POD build and design concept for our clients with the following benefits: • Short lead time to build new bespoke suites/ PODs • High power and cooling densities – 12kW • per rack • Multi vendor rack infrastructure provision • and floor space only options • Regulated and monitored temperature and humidity control This ensures that the cold air emitted from the floor is sealed and is therefore unaffected by hot exhaust air. This also creates a secure compute environment with secure access controlled by electronic keypad or biometrics. MEEZA has designed and constructed interconnected geographically diverse data centre facilities to provide customers with a network of facilities across Qatar. To deliver a full range of services: • Data Suite Services • Premium Colocation Services • Infrastructure Services • Applications Management Services • Disaster Recovery and Business • Continuity Solutions What are MEEZA’s flexible and scalable information technology and solutions?

MEEZA’s best of breed scalable data centre design model provides companies with the following benefits: • Future capacity expansion

• • • •

Ability to scale quickly Data protection/sensitivity High-performance IT Disaster Recovery and Business Continuity Solutions

Why is protection of valuable information technology assets critical to businesses?

If data is lost, the company loses its integrity and its professional responsibility in the market, while when a client’s data resides in our M-VAULTS this means that we should protect this data more than the clients themselves.

The information is very critical to any business, and securing this data is essential. In a world of staggering change, the first duty of MEEZA remains: to protect the confidentiality, integrity and availability of client’s data. Information security is an integral part of MEEZA and is a core principle, which all services are built upon.

The task of protecting security is never complete and in an age of uncertainty MEEZA remains vigilant, regularly taking stock of the changing threats we face. Clients trust MEEZA to protect valuable information and we take this responsibility seriously ensuring all solutions are built to highest security standard.

How are the MEEZA Data Centres categorised?

MEEZA has three Data Centres in Qatar, named as M-VAULT 1,2 and 3, built on foundations of security, availability and scalability to ensure maximum client value and advantage, supporting a full suite of Managed IT Services and Solutions. The critical systems

BUSINESS INSIGHT

serving MEEZA’s data centre facilities are certified in accordance with Tier III as defined by the Uptime Institute. The fundamental Tier III criterion is that the system is concurrently maintainable. Each and every element of the system, including chillers, pumps, tanks, valves, and sections of pipe work will be designed such that it can be isolated for maintenance or replacement while that system continues to provide “N” or duty capacity.

LEED (Leadership in Energy and Environmental Design) is an accepted benchmark for a buildings energy and environmental impact during design, construction and operation. The green data centre has moved from the theoretical to the realistic, with IT leaders being challenged to construct new data centres (or retrofit existing ones) with energy saving features, sustainable materials, and other environmental efficiencies in mind.

M-VAULT 1, the first of its kind in Qatar, launched in 2008, and located at Qatar Science and Technology Park (QSTP), is a Tier III Data Centre delivering an uptime and availability of 99.98 percent. M-VAULT 1, is built on foundations of security, availability and scalability to ensure maximum client value and advantage, supporting a full suite of Managed IT Services and Solutions.

M-VAULT 2 is located on its own campus, 30km outside of Doha and is scheduled to begin operation by the third quarter of this year. It is designed and built to Uptime Institute Tier III Standards, with 99.98 percent guaranteed availability. It is LEED platinum certified (first in the MENA region), where it maximises energy to increase performance. The world-class facility offers Business Continuity solutions for all key Disaster Recovery requirements criteria through service delivery and IT experts.

M-VAULT 3, the third data centre, started operation in mid-April of this year. It is located at closed proximity to MEEZA’s original data centre at QSTP, and is tailored towards high density computing in particular for the purposes of servicing research, engineering, health, banking, pharmaceutical and technology sectors. It is LEED Gold certified because of its sustainable and environmentally friendly design.

MEEZA enables businesses of various sizes and across sectors with the option to utilize IT as a differentiator and an engine of growth. MEEZA is now certified for ISO 27001:2005 and ISO 9001:2008 standards.

The certification is awarded by Bureau Veritas Certification and accredited by United

Kingdom Accreditation Service (UKAS).

The certification of compliance with ISO 27001:2005 and ISO 9001:2008 recognises that policies, procedures, processes and practices of MEEZA ensure consistent quality and security in the services and workmanship we provide to our clients. With this certification, our clients can be confident that MEEZA is dedicated to maintaining the highest efficiency and responsiveness in achieving our ultimate goal – guaranteed client satisfaction.

What are the control measures in the recovery plan?

MEEZA’s Business Continuity services ensure both maximum server availability and rapid recovery in the event of a disaster. Our services are individually tailored to our client’s specific requirements and provide: • Business impact analysis • Risk assessment • Plan creation • Solution design • Testing assistance • Secure plan hosting MEEZA stores and manages our clients’ continuity plans offsite and control their accessibility: our software service (Hosted SharePoint) is specifically designed for the creation, development and maintenance of Business Continuity Plans, providing client access to their plans from anywhere in the world.

MEEZA works closely with its clients to define the engagement model and key personnel required to complete a Business Continuity analysis. The analysis stage requires a full understanding of the clients’ processes and procedures, backup technologies, alternative work practices and criticality/ impact of the failure of core business processes.

Our risk assessments identify the range of potential threats our clients’ businesses may face, their potential impact and the likelihood of each threat occurring to its business. From here, MEEZA work with its clients to develop an outline Business Continuity Plan based on findings from the analysis stage. The Business Continuity Plan considers alternative methods to recover critical business solutions and ensures that these are properly documented where appropriate. Once the design has been agreed and tested, it is implemented across our clients business, ensuring that all employees are informed of their roles and responsibilities. MEEZA provides additional testing services to review Business Continuity Plans and accommodate changes to our clients’ organisational structure. Reviews typically occur

annually on the anniversary of the contract commencement date throughout the contract term.

What are MEEZAs preventive measures?

To ensure that our clients’ Disaster Recovery plans remains current, MEEZA performs periodic reviews and updates. MEEZA change management process identifies changes in our clients’ business requirements and technology environment, working continuously with our clients to refine and adjust the Disaster Recovery (DR) plan accordingly.

Any identified changes to the Disaster Recovery plan will be reviewed during regular service management reviews. MEEZA’s approach includes the following activities: • Identify the individuals responsible for DR activities (Disaster Recovery Management Team), and; • Develop team plans that encompass all the necessary functions for recovery • Use plans during DR exercises for validation of procedures Why should Qatar firms take this eriously?

As organisations become more dependent upon IT for their day-to-day operation, the risk to business continuity increases dramatically. Both commercial and public sector IT departments alike require a robust disaster recovery facility to ensure rapid recovery from serious failure, be it a virus, security breach, hardware or software issue, data corruption or force majeure.

Are there different types of disaster recovery solutions that the client may choose?

There are two elements that determine the type of solutions any client would opt for, the Data and the Platform the company information are sitting on are the main pillars to consider. MEEZA offers a wide variety of disaster recovery services from cold standby equipment in safe storage to hot, instantly available services maintained by live feeds from primary sources. For virtualised environments, MEEZA provides solutions from vendors such as VMware in addition to storage replication technologies.

Does this differ for a big or a small company?

Big companies usually prefer to opt for a fully dedicated platform and are willing to invest even more for their own resources in term of Disaster Recovery. Small companies opt for shared resources, as it is less costly. As a new trend, Disaster Recovery can sit on the cloud, which is suitable for all types of companies.

TheEDGE

77

TRAVEL & LIFESTYLE KUALA LUMPUR BUSINESS TRAVEL INSIDER (P.80) Victoria Scott provides an insight to one of South East Asia’s capitals, which was formed 150 years ago, and is now a bustling metropolis.

ALSO IN THIS SECTION: • •

A guide to Doha: Summer is here. TheEDGE tells you where are the ideal day trips to spend the whole day with family and friends. (P.81) Read It: Deloitte’s book As One has been rated as an indespensable resource for leaders worldwide (P.82)

•

10 Things: The 2012 Olympic Games will be held soon in the United Kingdom. TheEDGE gives you a quick tour of London as a local. (P.84)

TRAVEL

Business Travel Insider: Kuala Lumpur Kuala Lumpur means ‘muddy estuary’ in Malay – but Malaysia’s capital does not let its title hold it back. Only 150 years in the making, it has grown from a sleepy tin mining village to a bustling metropolis. Victoria Scott shares her tips for travellers visiting one of Asia’s newest cities.

Getting there: Qatar Airways ( (www.qatarairways.com) Flies to Kuala Lumpur twice daily. An economy return fare costs QR4830 in June, and Business Class QR11,220. The flight time is around seven and a half hours.

Qatari citizens and many other nationalities can buy a visa on arrival, but check www.kln.gov.my/web/guest/ requirement-for-foreigner before you travel.

Currency: Malaysian Ringgit. MYR1 = QR1.2 (exchange rate as of April 2012) Where to stay: Shangri-La Kuala Lumpur (www. shangri-la.com/kualalumpur/shangrila) Five minutes’ walk from the Petronas Towers, this hotel consistently tops tables for luxury and service. It is worth upgrading to a clubroom; benefits include free breakfast, all day refreshments and cocktails in the evening, and a free packing and unpacking service.

A standard room starts at MYR356 (QR427) in mid-June, not including breakfast.

Clubrooms start from MYR630 (QR756).

Hilton Kuala Lumpur (www.hilton.com/ KualaLumpur) The Hilton’s 14 meeting rooms and leveL7even (the hotel’s exciting multi-event venue) make this an excellent choice for a business trip. Make sure you stop by the sushi and sashimi counter at the hotel’s excellent Iketeru restaurant.

A deluxe room starts at MYR500 (QR600) a night in mid-June, excluding breakfast.

Crowne Plaza Mutiara Kuala Lumpur (www.crowneplazakl.com) This hotel is the perfect place for business and pleasure.

Right in the middle of the action, it has 28 meeting rooms and is only a four-minute walk from the KLCC (Kuala Lumpur Convention Centre) and equally close to the Bukit Bintang

80

TheEDGE

shopping district.

A standard room costs MYR357 (QR1299) a night in mid-June, MYR465 (QR558) inclusive of breakfast.

Where to play: Bijan (www.bijanrestaurant.com) For classy Malaysian food in a lovely setting, head to Bijan. If the weather is nice, ask for a table in the restaurant’s garden. Do not overorder; the portions are very generous.

Albion (albionkl.com/) This modern British eatery located in the Bukit Bintang area offers excellent food in a relaxing environment, a complete contrast to the busy streets outside.

Come here for the personal touch: the restaurant’s owner greets diners individually every evening.

Splash your cash: KL’s 66 shopping malls bring shopaholics to the city like bees around a proverbial honey pot.

For high-end goods, head to Suria KLCC (www.suriaklcc.com) one of Malaysia’s top shopping destinations. It is located beneath the famous Petronas Twin Towers, once the tallest buildings in the world.

For more humble fare, head to Chinatown, which is a great hunting ground for souvenirs.

We recommend art-deco Central Market

(www.centralmarket.com.my) a former produce market crammed with stalls selling arts and crafts.

Culture vulture: If it is music you are after, seek out the Dewan Filharmonik Petronas, an orchestral venue in the basement of the Petronas Towers, home of the Malaysian Philharmonic Orchestra. Check out www.mpo.com.my for event listings and ticketing information.

Kuala Lumpur Railway Station is worth a visit even if you are not catching a train. Designed by British Architect Arthur Benison Hubback, it fuses Anglo and Asian influences. There is also a mini-museum of Malaysian railway history inside.

And last but not least, make time to visit KL’s Museum of Islamic Art (iamm.org. my) to view its varied, highly regarded collection.

Insider top tip: Just south of the Twin Towers is the Menara KL Tower. Some say the views from here are better than those from the Petronas Towers, and it is certainly a less popular and therefore quieter option. It is not an easy place to reach by public transport, though, so hop in a taxi.

LIFESTYLE LIFESTYLE

TheEDGE Down time: The Four Seasons Sharm El-Sheikh, Egypt This place is an enduring favourite, and it is not hard to work out why. Located in Egypt’s holiday playground of Sharm el-Sheikh, it offers every luxury that visitors think to ask for (and even those they do not).

The hotel’s four swimming pools are gorgeous, but do not stay away from the beach, and definitely do not forget your snorkel: the sea here offers some of the best diving and snorkelling in the world. There are 76 dive sites within a day’s boat ride of Sharm El Sheikh, or the hotel also has its own private house reef if you prefer to stay closer to base.

If you bring your family, the Kids for All Seasons programme is bound to keep them occupied for hours, leaving you time to soak up the sun and perhaps sign up for some of the hotel’s many activities, which include tennis, aerobics and yoga classes.

You will need that calorie burn, as the hotel’s four restaurants set out to spoil you. You can even arrange a bespoke menu for special occasions. When is our birthday again?

A Superior room costs from US$290 (QR1055) per night in mid-June, including breakfast. www.fourseasons.com/sharmelsheikh

To fly to Sharm El Sheikh from Doha, fly with Qatar Airways (www.qatarairways.com) to Cairo (up to twice daily, QR2240 economy return, flight time three hours 15 minutes) and then connect to an Egyptair flight to Sharm. The flight from Cairo takes an hour and costs around US$200 (QR728) in economy in midJune. (www.egyptair.com).

GUIDE to Doha - The Ultimate day trips from Doha The summer is almost upon us. So now is the time to seize the day, grab a map, your 4x4 and a large bottle of drinking water and head out of Doha to explore what the rest of Qatar has to offer.

Wakra Beach Just south of the airport, this broad expanse of clean golden sand is one of Qatar’s best beaches. The conditions here are brilliant for kitesurfing, and the water is shallow, so it is very child friendly, too.

Be careful where you park, however; many a car has got stuck here and needed to be towed out ahead of the incoming tide.

The inland sea Yes, it is a Qatar cliché, but honestly, how many times have you been there? Probably not enough. It is unspoilt, lovely for swimming, and let us face it, the adrenaline ride over the dunes is hugely fun, too. We like to take a barbeque and our best friends for a relaxing afternoon in good company. Just do not get lost.

Al Shahaniya Drive 30 minutes along the Dukhan road to reach Qatar’s Camel City. Races are generally held on Friday afternoons, but you can come any time and watch camels being put through their paces. The trainers are friendly and happy to be photographed.

Fuwairit Our favourite Qatari beach, home to nesting turtles in season, it is a beautiful expanse of unspoilt sand which gives way to clear water full of interesting marine life. Pack your snorkel. It has no facilities, so come fully equipped.

TheEDGE

81

LIFESTYLE

REad IT: AS ONE

Based in the United States, The Deloitte Center for Collective Leadership (DCCL) is an organisation dedicated to supporting leaders and studying leadership issues around the world. In recent years they have been instrumental in setting up the As One project, which has essentially studied all forms of human collaborative endeavours and especially the leader and follower components of these different aspects of human life.

The result is the book As One, subtitled ‘Individual Action Collective Power’. Under the broad theme of “collective leadership”, which in turn emanates from the concept of “collective behaviour” of groups of people from all walks of life. The book scrutinises all forms of human structures, from businesses, to non-governmental organisations to orchestras, Cirque du Soleil, sports teams and military structures.

The resulting offering is a fascinating insight into human interactions and hierarchical structures and a publication that has been rated as indespendable to leaders worldwide. www.asone.org Available at Virgin Megastore for QR 217.

82

TheEDGE

Fifty One East and Sony launch VAIO E14 notebook series in Qatar

Consumer electronics brand Sony recently announced the new VAIO E14 Series, a 14-inch notebook with stylish new wrap design and long battery life. The VAIO E14 Series is available at all Fifty One East’s outlets located in Al Maha centre, City Centre Doha and Villaggio, Landmark mall and Lagoona mall.

Ideal for stress-free everyday computing, the laptop is equipped with third generation Intel® Core™ i5 andi7 CPU with AMD Radeon™ HD 7670M discrete GPU (VRAM: 1GB). The lightweight VAIO E14 stands out from the crowd with its soft and subtly reassuring ‘wrap design.’ Available in five refreshing colours including white, black, pink, silver or gun metallic, its design is accented by complementary colour flourishes around the notebook’s edge, touchpad and keyboard. The device also comes with a premium diamond-cut finish VAIO logo on the lid and a ‘personalisation kit’ comprising matching mouse and keyboard skin.

CaNON’S CINEMA EOS Canon has launched its professional HD Cine Camera System, EOS C300. The interchangeable-lens digital cinema camera is a landmark addition as the first ever model in Canon’s Cinema EOS System for professional filmmakers and cinematographers. It is available at Salam Studio and Stores, sole distributor of Canon photo and video products in Qatar.

aRUMaIla Boutique Hotels

Located in the historic and culturally rich surroundings of Souq Waqif, Arumaila belongs to the exclusive set of five-star boutique hotels, collectively known as the Souq Waqif Boutique Hotels. Presenting a fusion of traditional Arab hospitality and modern facilities and services to meet the needs of the 21st century traveller, the threestory Arumaila Boutique Hotel is based on an up-beat, à la mode theme, characterised by its vibrant décor and ambience. The hotel is located 15 minutes away from Doha International Airport, and within 10 minutes radius of Modern Art Gallery, the Corniche, Corniche Garden, Museum of Islamic Art and Qatar National Museum.

10 TEN THINGS

ways to see

London like a local

As the United Kingdom’s capital revs up for the Olympics, TheEDGE’s resident Londoner Victoria Scott offers some insider tips for Qatar’s Olympic tourists.

Invest in an Oyster Card London’s public transport system is comprehensive and efficient, but also rather pricey. Oyster cards are prepaid plastic smartcards, which are the cheapest way to pay for single journeys on the city’s buses, trains and underground system. Visit www.tfl.gov. uk for more details.

Book your hotel transfer in advance The city’s taxis will be at full stretch and London’s black cabs are expensive for airport transfers. Instead, book a private cab in advance. Addison Lee (www.addisonlee. com) has luxury cars, which promise to whisk you to your hotel in style. The company’s smart phone apps are very handy, too.

until 2am, so you can make a real night of it. A truly international city, there are Halal restaurants dotted all around London. Check out www.myhalallondon.com to find your nearest outlet.

Escape to the green spaces London is blessed with some fantastic parks. Why not seek out some of the less well known ones? Battersea Park, with its riverside promenade, boating lake and children’s zoo.

Also worth a look is the view from the top of Parliament Hill in Hampstead Heath. See www.visitlondon.com/attractions/outdoors for more ideas.

Buy AN A-Z LONDON MAP London’s definitive map is nearly 80 years old, but it is no less relevant now than it was when it began. Every Londoner uses one regularly to help speed their passage through the city’s confusing network of streets and pathways. It is brilliant at helping you work out whether it is quicker to walk than to take the tube (it often is.) www.az.co.uk

Take to the river The roads will be jammed, so take to the water instead. There will be two types of special water taxi services running: the 2012 Games river bus express will provide commuter-type services, and the 2012 Games river tours will travel at a more leisurely pace, usually with tourist commentary. www. london2012.com/visiting

Wear comfortable shoes Even if you opt to take the tube rather than walk, you will need some seriously sensible shoes. Tube station connections can mean trekking long distances, often with a mad rush at the end to catch a departing train.

Invest in some sturdy, flat shoes. It is not a fashion statement, but you will be so grateful for them when you are hiking across town to get to an Olympic event.

Find a taste of home Edgware Road, just west of Oxford Street, is a haven for Middle Eastern fare.

We particularly love Lebanese restaurant Maroush (www.maroush.com). It stays open

84

TheEDGE

Make the most of free museums Most of London’s big museums are free to enter. They are perfect for a bit of time out from the Olympic madness. We love the

Science Museum (www.sciencemuseum.org. uk) – particularly the aviation section on the top floor – and the Natural History Museum next door (www.nhm.ac.uk).

Grab the front seat at the top of the bus This is the best place to sit. For the price of a normal bus ticket you get a fantastic view of London from the public transport equivalent of a penthouse. Try Number 19, which journeys over Battersea Bridge, up the King’s Road, onto Knightsbridge then past Hyde Park and into Bloomsbury.

Borrow a ‘Boris Bike’ The Barclays Cycle Hire scheme (usually just called ‘Boris Bikes’ after London’s Mayor, Boris Johnson) is a great way to get around.

Bikes are stored at hundreds of docking stations around the city. There is no booking required – you just pay with a credit or debit card. See www.tfl.gov.uk/roadusers/cycling.