The Edge - Apr 2013 (Issue 43) by Firefly Communications

sector name | banner heading

contents april 2013

w w w.t h e e d ge. m e

cover story 60

In slightly more than a decade, Qatar’s rate of trafﬁc accidents and resulting injuries and deaths has increased by a phenomenal amount. Indeed, as reported in a recent study by Qatar University, Qatar Trafﬁc Department, and the Qatar Statistics Authority, the country now has the highest global rate of road accident fatalities. Besides the high rate of fatalities, the cost to the GDP of Qatar due to its high road accident rate, is estimated by The Edge to be as much as QR10 billion when calculated using a World Health Organization equation.

features

Feature Story: Digital youth empowerment

How Qatar’s Silatech is using technology to assist the country’s youth in determining what vocational opportunities are best for them.

Business Interview: Ahmed Mekky

Shehan Mashood interviews the founder and CEO of Qatar-based technology firm Gulf Bridge International.

Feature story: Insurance in Qatar and the MENA region

In March, Qatar Financial Centre (QFC) hosted the seventh annual MultaQa insurance conference and released the MENA Insurance Barometer. The Edge spoke with Dr. Kai Uwe Schanz, author of the report.

Business Management: Management Time 72

The London Business School’s Julian Birkinshaw and Simon Caulkin report on a Swedish firm’s experiment relating to how managers utilise their time, which they say contains great lessons for all businesses. The Edge | 3

contents page

sectors Finance & Markets

Simon Watkins asks if there is a need for Qatar to open up its markets, especially for the asset management industry.

Energy & Sustainability 29

Jamie Stewart reports that in March Qatar revealed a new natural gas discovery but says the field’s operators may be well advised to delay production.

Construction & Real Estate 33

Can a city like Doha have a ‘soul’ and if so, will this be an essential part of its long-term success? asks leading architect Tim Makowar.

Tech. & Communications 37

Rishi Saha, a Gulf based digital communications expert, provides five steps for firms to consider when managing an online crisis.

Business Insight 77

Remy Rowhani, director general, Qatar Chamber of Commerce and Industry spoke exclusively to The EDGE on what to expect from the forthcoming eighth World Chambers Congress in Doha. Additionally, The EDGE spoke with professor Laoucine Kerbache, the newly appointed Dean and CEO of HEC Paris Qatar and Kenneth Andrade, CIO of IDFC, about their recently launched India Equities Fund.

Qatar National Convention Centre will host the World Chambers Congress from April 22 to 25.

regulars Business News 10 Qatar Impact 18 Country Focus 42 Products Page 86 10 Things 88 4 | The Edge

publications director mohamed jaidah m.jaidah@firefly-me.com managing editor miles masterson m.masterson@theedge-me.com senior business editor aparajita mukherjee a.mukherjee@theedge-me.com deputy editor farwa zahra f.zahra@theedge-me.com digital editor/editorial asst. shehan mashood s.mashood@theedge-me.com regional sales director julia toon j.toon@firefly-me.com | +974 66880228 head of business sales manu parmar m.parmar@theedge-me.com | +974 33325038 sales managers adam kynnersley a.kynnersley@theedge-me.com | +974 66079716 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 design coordinator sarah jabari finaliser michael logaring photographer herbert villadelrey proofreader geoff instone printer ali bin ali printing press Doha, Qatar

firefly communications PO Box 11596, Doha , Qatar Tel: +974 44340360 / Fax: +974 44340359 www.firefly-me.com The Edge is printed monthly ÂŠ 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 The Edge or Firefly Communications. No responsibility or liability is accepted by the editorial staff or the publishers for any loss occasioned to any individual or company, legal or physical, acting or refraining from action as a result of any statement, fact, figure, expression of opinion or belief contained in The Edge. The publisher (Firefly Communications) does not officially endorse any advertising or advertorial content for third party products. Photography/ image credits and copyright, where not specifically stated, are that of Shutterstock and/or iStock Photo or Firefly Communications.

editor’s letter Reckless and dangerous driving: It is a problem that affects everyone in Qatar and has probably touched all of us directly. Most likely, if you are lucky, this might have been an involvement in a small traffic accident, which at worst means some whiplash, a lot of paperwork and a degree of cost for motor repairs, depending on who is determined the guilty party and what level of insurance those involved had. For the much less fortunate, the reality of driving on Qatar’s roads can lead to far worse accidents and collisions, involving serious injury or even death of loved ones. Here paperwork relating to insurance and medical bills and repair costs are of the least concern, when measured against permanent disability, grief and loss of valued income from a breadwinning spouse or parent. As the title of our special cover story on page 60 suggests, it is this cost to Qatar, not just in monetary terms, but also the undeniable negative effect on the psyche of the country, that makes it clear something urgently needs to be done to decrease the daily, world recordbreaking carnage on its roads. There is no doubt that driving in Qatar can be incredibly stressful at times. Often it seems the traffic may deteriorate into anarchy and sometimes one arrives at one’s destination frazzled and shaking from some near miss or having witnessed an accident of some kind. Indeed even if this is not the case, the wrecks of collisions on the roadside are a reminder of the very real danger we all face in Qatar every day. The risks and hazards aside though, the congestion and time it takes to get from one place to another is also a contributing factor to the overall stress levels, and often I ponder the

huge amount of work hours lost to the country’s economy as we all sit stuck bumper-to-bumper at clogged traffic lights instead of being productive in our places of work or at meetings. (Perhaps not too coincidentally, speeding and talking on mobile phones are two of the three main causes of accidents in the country). The Qatari authorities recently expressed renewed commitment to improving the situation, with a new National Traffic Strategy and the introduction of a driving licence point system to dissuade repeat offenders. But as anyone who has driven in Qatar can attest, they still face a massive challenge. There are people from scores of countries here, all used to extremely different driving cultures, and the sheer brazen rudeness of people of all nationalities pushing into queues, entering traffic or changing lanes at high speed, tailgating, overtaking on the blind shoulder, ramping pavements and more, needs to be experienced to be believed. Doha is, as we all know, a rapidly growing large-scale conurbation, and those of us living here have to deal with the constant road works and disruptions to traffic by general construction, which is a contributing factor to road accidents we can only hope recedes as the country develops. Indeed, the recent opening of the underpasses on Salwa Road is an example of how new roads can dramatically decrease transit times and make a previously arduous commute almost a pleasure. Personally I believe that whilst increasing measures to police and enforce basic traffic laws are highly welcome and absolutely necessary, what really needs to take place in Qatar is a paradigm shift in attitude of everybody who drives here. All drivers need to slow down, to consider their fellow road users and take fewer risks and be much less aggressive. That will naturally be a much harder goal to fulfill and I have no idea how it would be accomplished, but it is absolutely necessary, otherwise I fear the cost of road accidents here will simply continue to mount.

The wrecks of collisions on the roadside are a reminder of the very real danger we all Miles Masterson face every day in Qatar. Managing Editor

The Edge | 7

10 | The Edge

photo of the month

Friendly Ties

United States Secretary of State John Kerry (Left) gestures as Qatari Prime Minister and Foreign Minister Sheikh Hamad bin Jassim bin Jaber Al Thani speaks during their news conference in the late March at Wajbah Palace in Doha. (Image Reuters/Arabian Eye) The Edge | 11

news business

Al Jazeera to continue with expansion plans

Sheikh Ahmed bin Jassim Al Thani, director general of Al Jazeera recently announced a UK branded Al Jazeera channel, the latest in its expansion plans.

Following Al Jazeera network’s recent buyout of Current TV, that gave it access to the United States (US) markets, director general of Al Jazeera, Sheikh Ahmed bin Jassim Al Thani, has revealed that the cable network is preparing to launch a United Kingdom (UK) branded news channel, and that studies for a French language channel were also at an advanced stage. The Al Jazeera UK channel will begin as a five-hour primetime cut into the regular Al Jazeera network that runs 24 hours and has access to more than 90 percent of homes in the UK, according to Sheikh Jassim Al Thani. Speaking to local media, he noted that the news channels would, “help us build bridges with other nations and cultures in Europe, Africa, North America and other regions.” These announcements are the latest in Al Jazeera’s attempt to break into new markets. In 2011, the network opened Al Jazeera Balkan in Sarajevo, and there is also the possibility of a Turkish version of the channel. The organisation also recently brought out a new look for its Arabic channel studios, the biggest makeover it has had since 2004. Sheikh Jassim Al Thani added, “The Al Jazeera screen is part of people’s homes, so we’ve exerted a great deal of effort to modernise our presentation and look. We have employed the best and latest technology to maximise the production value. Al Jazeera has distinguished itself through outstanding news coverage and reports. Today, it adds more to its account through the new look.” There are also plans for the network to introduce new programming to the channel.

Qatar targeting AAA credit rating

It is unclear as of yet how Qatar will achieve an AAA credit rating. A major reason for the country’s banks’ increasing dependence on external financing has been the spend on infrastructure that is expected to continue up until the 2022 World Cup.

12 | The Edge

Addressing the seventh edition of the annual Multaqa Qatar Conference in Doha, Qatar’s Finance Minister HE Yousef Hussein Kamal said the country deserves an AAA rating, considering its economic stability in the past and the expected growth of nine percent in non-oil growth income this year. The upgrade will bring Qatar on a par with countries such as Australia and Norway. The cost of insuring Qatar’s dollar debt dropped to 63, 19 basis points down compared to the last year’s data compiled by Bloomberg. However, one of the three big credit rating agencies Standard & Poor’s has cast doubts on Qatar’s demand, saying the country may not be able to upgrade sovereign rating in the next two years. The reason for this, according to S&P analyst Trevor Cullinan, is the country’s limited monetary flexibility, and its banks’ increasing dependence on external financing. Qatar’s current sovereign rating of AA, assigned in November last year, reflects its already stable position in the international financial market with an average growth rate of 13 percent from 2008 to 2012.

news business

Qatar’s first three-year budget

The ministry of education will be one of the seven areas of focus, and a key priority in the upcoming three-year budget for Qatar.

“The island would be a great getaway without having to travel, and likely to capture the interests of many local residents.” - Khalifa Al Misnad, Qatari real estate company owner.

With a budget surplus last year, Qatar is set to announce its budget for 2014, 2015 and 2016. Incorporating a period of three years for the first time, Qatar’s upcoming budget will aim to provide investors with long-term overviews. The country’s 142 government ministries and organisations were scheduled to submit their proposals in March based on a budget guideline issued by the Ministry of Economy and Finance, making

the release date likely to be sometime in April. The cabinet, however, has indicated the document’s finalisation may take another two months, pushing the announcement to the end of June. The upcoming three-year budget, to be ratified every year, will focus on seven key sectors of infrastructure, science and technology, improving the service sector, economic diversification, education, health and the environment to support sustainable development. For the next financial year starting from April 1, science and technology development will remain the key priority along with the allocation of public spending on health, education and the environment.

Number of the month

The total amount of spending planned for development projects ahead of the 2022 World Cup, according to HE Yousuf Hussein Kamal, minister of economy and finance.

QR364 billion

A Maldivian-style resort in Qatar is set to open in July Banana Island Village Resort & Spa, a Maldivian-style resort located in the Arabian Gulf is near completion for its soft launch. Located 3.5km from Hamad International Airport, the resort features self-sufficient luxury villas constructed along the perimeter of a once uninhabited curved island. A project of UrbaCon General Contracting (UCC), Banana Island resort will open doors to its visitors in July or August, said the COO of UCC Glyn Thomas. “As you can imagine, there is a lot to do from a design-and-build point of view. We really only got the go-ahead on the concept in about mid-March [2012], so the detailed design itself took about four to five months,” said Thomas about the 18-month project, which is spread across an area that is 100m long and 117m wide. Qatar properties such as The Pearl Qatar, constructed with strong design inspirations from Venetian architecture, are primarily residential in nature, which makes Banana Island Village Resort & Spa the first of its kind. Considering the dearth of recreational sites in Qatar, “the island would act as a great getaway for many without having to travel, and likely to capture the interests of many of the local residents,” offers Khalifa Al Misnad, a Qatari real estate company owner. The Edge | 13

news

business in brief Katara Cultural Village and Aspire Zone Foundation join hands

Katara, the Cultural Village and Aspire Zone Foundation have signed a memorandum of understanding (MoU), supporting the Qatar National Vision 2030. The MoU is aimed at promoting awareness of culture and sports through festivals, exhibitions, seminars and other sports and cultural activities. The project will also be accompanied by a series of publications focusing on the goals of the joint venture.

Khalid bin Ibrahim Al Sulaiti, general manager Katara and Hilal bin Jaham Al Kuwari, head of Aspire Zone, sign a MoU to support the Qatar National Vision 2030.

Key executive appointments for IBQ

QFB Wasita comes to Qatar

International Bank of Qatar (IBQ) has recently hired two key executives. While Hassan Al Mulla is the bank’s new deputy head of retail, Andrew Ball has been appointed as head of retail banking. “Andrew and Hassan are promising talents within the retail banking division, I am sure their broad experience will further improve IBQ’s distinguished market position in Qatar,” said Jabra Ghandour, managing director of IBQ.

Qatar First Bank (QFB) has launched Wasita brand in Qatar. QFB has a 85 percent stake in Al Wasita Emirates for Services & Abdulla bin Fahad bin Ghorab Al Catering – an Marri is the chairman of QFB. Abu Dhabi based support services management firm. “Qatar’s booming economy and the projects planned as the country gears up to host the 2022 FIFA World Cup will no doubt increase demand for world class total support services companies,” said Abdulla bin Fahad bin Ghorab Al Marri, Chairman, QFB, explaining the importance of Wasita in Qatar.

Hassan Al Mulla is the new Deputy Head of Retail at IBQ.

QFBA launches Project Taddreb

Standard Chartered shows positive 2012 results Standard Chartered has reported a total group income of US$19.07 billion (QR69 billion), up by eight percent in 2012. The growth is primarily driven by clientfocused strategy and business diversity. The bank has 26 markets delivering over US$100 million (QR364 million) of income. Considering the bank’s positive growth chart in the last 10 years, it is expected to follow the upward trend in 2013.

Project Taddreb is the latest venture of Qatar Finance and Business Academy (QFBA), which was given a mandate by the Financial Markets Development Committee (FMDC) to help establish the training and competency framework for the financial services sector in Qatar. The project is aimed to ensure clearly defined qualification requirements for all key personnel in the financial services industry; strengthen the level of local competence and training, and to continue professional development across Qatar.

Project Taddreb seeks to promote services sector skills and vocational training programmes in Qatar.

Words & Numbers “We are pleased to see bilateral ties deepen [between Qatar and UK] with last week’s visit by HRH Prince Charles and the Duchess of Cornwall.” HE Michael O’Neill, British Ambassador to Qatar – speaking about Qatar-UK relationships.

14 | The Edge

445 billion US dollars (QR1.6 trillion). Value of Islamic banking assets with commercial banks in the GCC at the end of 2012.

“Without a doubt, 2013 is a pivotal year for Qatar’s transportation programmes. Never has there been a better time for companies to enter and expand their presence.” Edmund O’ Sullivan, Chairman MEED Events said. The amount allocated for massive transport infrastructure programmes in Qatar has reached US$17 billion (QR61.9 billion).

96.5 Qatar’s score on the latest MasterCard Index of Consumer Confidence, which is highest among the Middle Eastern markets.

events business Qatar, April 2013

event of the month 8-9

Bloomberg LINK

Qatar Financial Centre Authority (QFCA) will co-host the second Bloomberg Link two-day event to explore investment opportunities in the Middle East and beyond, at the St. Regis Doha hotel. The conference will bring together CEOs, asset managers, investors and prominent regional decision-makers to discuss the region’s fast-growing infrastructure and rising influence in investments around the world. The conference will examine the biggest challenges and opportunities for asset managers as they globalise. Over the two days, 16 panel discussions and one-on-one interviews will cover real estate development and investment activity. www.bloomberglink.com/event/doha-2013/

upcoming event 27-29 May

Cityscape Qatar 2013 The second edition of Cityscape Qatar has been set in the background of the booming growth of the real estate sector, with the value of total real estate transactions having doubled in 2012, equaling a staggering QR42 billion – 59.1 percent above 2011. The event will firmly place the spotlight on the Middle East’s largest real estate market, as it attracts key real estate professionals, investors and development companies to Doha. The event is jointly organised by Informa Exhibitions and Qmedia, Cityscape will highlight the various opportunities available in the real estate sector in Qatar. www.cityscapeqatar.com

16 | The Edge

Access MBA

Today, an MBA degree from a top business school guarantees you a 100 percent salary increase within three years. And the professional skills and network that the MBA and Executive MBA (EMBA) experience provides is immeasurable. Access MBA events give candidates around the world face-to-face time with recruiters from top international business schools. By registering for the one-to-one event, applicants’ profiles will be hand-selected and matched by the team of experts to the best MBA and EMBA programmes. www.accessmba.com

22-23

Arab Future Cities Summit 2013 The second Arab Future Cities Summit will be held at St. Regis, Doha. The backdrop of increasing urbanisation, climate change, and decreasing natural resources means that cities need to evolve, adapt and future-proof themselves to ensure that they are competitive and fit for purpose. Smart, sustainable, future cities are engines of growth, creating jobs and providing better places to live, work and grow. The Arab Future Cities Summit will bring together city leaders, government officials, academics, urban service providers and city development experts to share experiences, smart thinking and best practices for implementing the smart cities of tomorrow. The summit is an international platform for the transfer of knowledge. www.arabfuturecities.com

22-25

ICC WCF eighth World Chambers Congress The event is organised by the International Chamber of Commerce, World Chambers Federation and hosted by the Qatar Chamber of Commerce & Industry. It will bring together chambers of commerce and their leaders from around the world to share, learn and build new networks of opportunity. The programme is aimed at deriving insight from internationally renowned speakers through the plenary and workshop sessions. Speakers include leaders and experts from chambers of commerce, business and government. www.worldchamberscongress.com

qatar impact

The power of the ‘Q’ With one of Qatar’s biggest and most recognised companies – Qtel - now rebranded to Ooredoo, The Edge columnist Kamahl Santamaria wonders if dropping the ‘Q’ is the right long-term strategy.

he rumours about Qtel going through some sort of rebranding had been around for a while. But it still came as some sort of surprise when the telecommunications company favoured by most in this country gave itself such a different name and look. Qtel is gone. In its place is Ooredoo – which you quite possibly know by now means ‘I want’ in Arabic. Interestingly, the announcement was made not here in Qatar but at the Mobile World Congress in Barcelona – the biggest mobile communications gathering in the world. The chairman of Ooredoo, HE Sheikh Abdullah bin Mohamed bin Saud Al Thani, said the meaning of the word reflected the aspirations of the customers. And the thinking behind the rebrand is actually very sound. Qtel has controlling interests in not just Qtel Qatar, but Nedjma in Algeria, Tunisiana in Tunisia, Wataniya in Kuwait, Nawras in Oman, and Indosat in Indonesia. That adds up to nearly 90 million customers worldwide. The Ooredoo initiative will put all of those brands under one name, and reinforce the one Qatari company that they all have in common. But there is no getting away from the fact that Ooredoo, as a word, does not exactly conjure up images of mobile phones and internet access. Now, in the end, that may not be a problem. Ooredoo has a strong logo and branding, and there will surely be some major advertising campaigns to reinforce the new name and what it provides. But more importantly, I think it is missing something. Namely, the ‘Q’. Think about the big Qatari companies and 18 | The Edge

brands – Qatar Petroleum, Qatar Airways, Qatar Foundation, Qatalum, QAPCO, Qatar Holding, Qatar Investment Authority. It is easy to see what they all have in common. And more and more at an international level, a prominent letter Q is a good sign that a Qatari business is nearby. If you are getting on a plane with a Q in its airline code, then there is a good chance you are flying Qatar Airways – though that is not to forget Australia’s national carrier Qantas. Even if you are doing something as simple and mundane as filling out an online form, there is only one country you can choose from the drop-down menu which starts with a Q. The point I am making is that the letter Q has become such an important branding tool for companies and the country alike, and Ooredoo’s decision to abandon it will be an interesting test of how strong its Qatari heritage can come through internationally. The face of Ooredoo is also an interesting choice. Qatari Olympic medalist Nasser Al Attiyah

was on-hand in Barcelona for the branding announcement, and will be one of the new brand ambassadors. A great choice. But the other is the Argentinian football superstar Lionel Messi, who plays for Barcelona FC. Qatar’s links with Barcelona FC are obvious. First Qatar Foundation, then Qatar Airways became ‘shirt partners’ (in other words, corporate sponsors) of the club, in what was a major break with tradition for Barcelona. And while I do not doubt the pulling power of Lionel Messi, he is ultimately an Argentinian playing for a Spanish club. Is that necessarily the right combination to take Qatar to the world? Of course all my doubts may be proven wrong by the time the international rollout of the Ooredoo brand is completed in 2014. But there is also no doubting the power of the Q, because few countries and businesses anywhere in the world can claim to get such recognition from one solitary letter.

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.

SPECIAL ADVERTISEMENT

Al Gassar Resort marks first-year anniversary Strong performance in inaugural year delivering on the promise of being a unique luxury waterfront destination

L GASSAR RESORT, DOHA’S ICONIC LUXURY WATERFRONT DESTINATION, MARKS ITS FIRST YEAR ANNIVERSARY THIS MONTH, HIGHLIGHTING KEY MILESTONES THAT HAVE STRONGLY DEMONSTRATED THE ROBUST PERFORMANCE THE RESORT WHICH HAS ESTABLISHED ITSELF AS DOHA’S WATERFRONT LUXURY RESIDENTIAL AND HOSPITALITY DESTINATION. AL GASSAR RESORT, A MEMBER OF ALFARDAN GROUP, HAS SUCCESSFULLY BECOME OVER THE PAST YEAR A POPULAR CHOICE FOR RESIDENTS LOOKING FOR THE EXTRAORDINARY IN TERMS OF LOCATION, QUALITY AND EXCELLENCE IN SERVICE; ESPECIALLY WITH ITS UNIQUE ASPECT IN HAVING A POSH SOPHISTICATED INTERNATIONALLY RENOWNED HOTEL AS THE ST. REGIS DOHA AS THE CENTRE PIECE OF THE DEVELOPMENT.

The resort’s luxury-inspired, hotel-styled facilities and services, which have set a new standard in Qatar’s residential and hospitality sectors, have been mainly credited for making Al Gassar Resort a landmark destination in Doha. Al Gassar Resort offers a choice of 422 beautifully furnished, spacious apartments along with rooftop penthouses and terraces, all equipped with top-of-the-line furnishing and appliances and balconies overlooking Doha’s West Bay and the Arabian Gulf.

inaugural year is consistent with the growing reputation of Qatar as one of the world’s most exciting business and lifestyle destinations. Moreover, with its complete range of upscale amenities and world-class services, Al Gassar Resort has succeeded in setting a unique standard for luxury residential dwellings in Doha. It has certainly been a very busy and highly successful first year for Al Gassar Resort and we are deeply grateful to all our tenants and guests who played a major role in consolidating our status as one of the most recognizable brands in the luxury hospitality segment. A very special thanks must also go to the employees and staff who share the vision of unparalleled quality and excellence in service which al Gassar Resort portrays in every aspect of the development coinciding with the solid legacy of unmatched luxury offering Alfardan Group is renowned for. To celebrate this momentous occasion, we will continue new initiatives that are symbolic of our unwavering commitment to service quality and excellence as we move forward with our growth plans in 2013 and beyond.”

Mohamed Sleiman, Assistant Chief Operating Officer, Al Gassar Resort, said: “The success that Al Gassar Resort has achieved throughout its

Al Gassar Resort also celebrated the emergence of Al Gassar Ballroom as one of

SPECIAL ADVERTISEMENT

the popular destinations in Doha for corporate and private events alike, as well as high-profile shows throughout the year. Another milestone for Al Gassar Ballroom was the birth of Al Gassar Outdoor Catering due to the overwhelmed popularity of the Ballroom’s extravagant Food and beverage offers and unmatched spirit of service.

Al Gassar Resort A member of Alfardan Group, Al Gassar Resort is a key project that serves the rising demand for hotel-styled residential facilities and services in Qatar, while reinforcing Doha’s status as one of the most dynamic cities in the region. Positioned directly on Doha’s pristine coastline, Al Gassar Resort offers a distinctly unique lifestyle with its luxurious services that aim to pamper and exceed expectations of each resident and guest. Equipped with a complete range of hotel-like facilities, it offers exclusive membership to bachelors, business executives and families who are looking to enjoy its promise of a genuinely luxurious waterfront lifestyle in Doha.

Complementing its luxury-inspired hospitality amenities and services, Al Gassar Resort also prides itself with its unique customer-oriented service and hospitality with networking monthly events and occasions exclusive for the tenants and their families. In addition, the development offers top-of-the-range leisure, business and recreational facilities, including several spacious swimming pools, sunbathing areas, tennis courts as well as state-of-the-art gyms, a food & beverage outlet and a private spa area. The resort also has a dedicated children’s club, 24/7 concierge service, landscaped themed gardens with designated barbeque areas, walkways, and a full-service business centre, among other facilities. Moreover, Al Gassar Resort was also the first residential development in Qatar to offer residents cutting-edge Qtel Fibre services for high-speed internet connectivity.

CONTACT DETAILS P.O. Box Doha-Qatar Tel +974 44244800 Fax: +974 44208891

www.algassarresort.com

22 | The Edge

This section is brought to you by Qatar Financial Centre Contents: The IMF’s warning to Qatar 23 . FATCA Compliance 25 . The resurgence of the Dow Jones 25 . Streamlining Qatari insurance regulation 26.

finance & markets

Should Qatar take the IMF seriously? Following a recent statement by the International Monetary Fund (IMF) The Edge economic correspondent Simon Watkins offers his take on whether there is a need for Qatar to open up its markets, especially for the asset management industry.

n the surface, there seems little reason for the authorities in Qatar to loosen their grip on the number and type of asset management firms operating in the country. However, from a more indepth structural perspective, a broader and deeper (and more international) asset management industry is arguably precisely part of what Qatar needs to ensure against an over-reliance on domestic banks to carry the weight of the country’s financing needs. And, it appears that the Qatari authorities have understood this, certainly others have.

Over-reliance bank liquidity

domestic

In its most recent report, Standard & Poor’s (S&P) specifically highlighted that a particular rating constraint for Qatar is the lack of monetary policy flexibility. “Shallow local currency debt markets constrain the transmission of policy into the financial markets, which can hamper plans to broaden non-oil output bases, diversify the sources of funding including financial small and midsize enterprises, and undertake long-term investment projects,” says S&P’s GCC credit analyst Dima Jardaneh. This

Brought to you by:

The Edge | 23

sectors | finance & markets

overdependence on domestic banks poses potentially game-changing consequences for a country, as we saw regionally in Dubai in 2007 and 2008. Last year, in two watershed quarters – Q2 and Q3 - total lending by Qatar’s domestic banks increased to represent 120.1 percent of deposits, according to the Qatar Central Bank (QCB), implying that Qatari banks were reliant on short-term borrowing from capital markets and other domestic banks. This reliance on volatile short-term funding was exactly the same situation that occurred in 2008, when UAE banks were taking interbank lending from the rest of the world. In its most recent judgment on Qatar’s banking system – including both the conventional and the Islamic elements – major ratings agency Moody’s highlighted the high degree of dependence, “The economy is undiversified and heavily reliant on the oil and gas sector, and credit-risks relating to exposures to the construction and real-estate sector,” underlined the agency. Mindful, then, of this perhaps, the Qatar Financial Centre (QFC) has recently introduced the Collective Investment Schemes Rules 2010 and the Private Placement Schemes Rules 2010 in an attempt to enhance the QFC’s reputation as a prime jurisdiction in which to establish investment funds, although the Qatar Financial Centre Regulatory Authority (QFCRA) regulates all funds formed in the QFC. For investors, one key benefit of this new regulatory architecture is that a QFC fund is exempt from all Qatari taxes. The problem, here, though, is it does not go very far at all on a comparative regional basis, let alone on an international one. For example, the formation and offering of investment funds in Qatar is regulated by the QCB, with all funds domiciled in the emirate having to be licensed by the central bank

87.8 billion

The amount of external government borrowing in 2011 and 2012, up from QR28.3 billion in 2008-2009. 24 | The Edge

– with no exemptions – and subject to a 10 percent tax rate on profits sourced in the country.

The debt ghost: Hydrocarbons

This negative state of affairs may galvanise the Qatari authorities into overhauling their system at some point, or it may take a Dubai-style meltdown to do so. For his part, Amwal International Investment Company CEO, George Shehadeh, in Kuwait City, is one of many who believes that the development of a debt market in Qatar would strengthen the position of asset managers and enable them to better serve their clients. “Sovereign issues are a critical icebreaker for debt markets as they help establish the local risk-free benchmark as well as a yield curve that can stretch into longer dated maturities,” he says, “and we are seeing increasing interest from investors in a variety of debt and debt related instruments, with the traditionally equitybiased investors in the region being ready to support a broader debt market.” The catalyst for Qatar to genuinely open up its investment markets to firms from abroad may come sooner rather than later, as the country’s commitment to invest heavily in infrastructure, ahead of the 2022 FIFA World Cup, has sent its external debt rocketing in the past three years, with external government borrowing having more than tripled since 2009, reaching QR87.8 billion in 2011 to 2012, up from QR28.3 billion in 2008 to 2009. The outcome is high reliance on global finance volatility and uncertainty, according to the Bahrain-headquartered investment bank SICO. In this respect, the Qatari government issued government bonds worth QR50 billion in January 2011, including QR33 billion through sukuk instruments, in addition to other government securities which drew surplus liquidity from the system.

The catalyst for Qatar to genuinely open up its investment markets may come sooner rather than later, as it needs to invest heavily in infrastructure, ahead of the 2022 FIFA World Cup.

world will be re-assessed, and not to its benefit. This has not been lost on the IMF either, as in January it politely suggested (as it does usually before catastrophe hits) that Qatar introduces open market instruments to manage its liquidity. “We hope that this will help Qatar prevent unexpected flows of money from destabilising the banking system, and controlling inflationary pressure,” the Fund concluded.

A polite warning

However, a large percentage of the Qatari government’s external debt, an estimated QR87.7 billion, is maturing post 2017. This means that as long as Qatar’s balance sheet continues to grow, along with the running budget surpluses, debt roll-over risk is highly unlikely and the government will be able to refinance its debt or meet maturities. If, though, any of these factors falter, then Qatar’s sovereign standing in the global financial

Simon Watkins is a freelance financial journalist based in London in the United Kingdom

finance & markets | sectors

Taxation

FATCA compliance: No MENA government close to an agreement with the US

rests,” says Joseph el Fadl, partner in-charge of Global Financial Services Industry for Deloitte in the Middle East. FATCA requires not only all foreign (non-US) banks but also other foreign financial institutions (mutual and hedge funds, insurance companies, trusts and Islamic finance structures) to disclose all United States (US) account holders to the US Internal Revenue Services (IRS) tax authority. The operative mechanism is that if any affected entity wants to do business with or invest in the US, it has no choice but to comply with FATCA, irrespective of whether it has a US branch, office or other presence. Otherwise it will be taxed 30 percent on income as well as on its capital proceeds. In 2012 the US Treasury unveiled two models for intergovernmental agreements (IGAs) under FATCA. Recently further clarification has been provided around these two types, “IGA is the least worst option. It affords many benefits over the IRS direct route,” says Ali Kazimi, managing director and Deloitte Middle East FATCA leader. According to the US Treasury, there is still time for countries that have not already initiated discussions with the US Treasury on IGAs, to do so. It should be noted though that despite discussions, it is believed that there is at present no government in the MENA region close to entering into an agreement with the IRS, therefore local banks and financial institutions need to be prepared to be subject to the full FATCA requirements.

US markets

According to Deloitte, a flexible approach grounded in solid expertise will be required to meet the challenges in the Middle East while assessing and navigating the impact of FATCA.

By the end of 2013, the United States Foreign Account Tax Compliance Act (FATCA) will require all foreign financial institutions (FFIs) to enter into disclosure compliance agreements with the US Treasury. “FATCA is one of the most important and challenging projects for global financial institutions this year. Every CEO and board of directors needs to understand the legalities behind it and know where they stand. Ultimately, that is where the responsibility

The resurgence of the Dow Jones

a dilemma in the minds of many financial market followers. Has the global economy (and specifically the US) really overcome the worst of its recession in last the several decades? Have policymakers succeeded with their extraordinary arsenal? Historically, we have always witnessed that the benchmark index of a country is a reflection of its true economic wellbeing. If we go by this notion, then undeniably Dow Jones’ recent record streak, to a great extent, is a reflection of the underlying strength that the US economy has shown in recent past. Policymakers have indeed succeeded with their monetary and fiscal policies. Optimism is also visible in the US real estate sector, which was the epicentre of the financial crisis. What is worth noting is that the real estate sector is generally the last sector to see a recovery after a country’s economic prospects start to turn around. But there is an opposite too. The US economic outlook is still marred by the doom of sequester as high debt level recently forced the Senate to increase marginal income tax rate to 39.6 percent (from 35 percent) for families with taxable income of more than US$450,000 (QR1.65 million) a year. A further US$85 billion (QR309 billion) of spending cuts came into effect at the beginning of March. The country’s economic growth will undoubtedly come under some pressure on account of these fiscal adjustment measures. Then what is driving the Dow Jones? Partially it is the earning outlook of the companies, as US companies have increasingly gone global, their prospects not only depend on how they are operating locally but also on how reliant these companies are on their foreign earnings. Since growth especially in the Middle East and emerging Asia remains relatively positive, any exposure to these regions is bound to bring profits for their Western counterparts.

Dow Jones Industrial Average, the main index of the multi trillion-dollar finance industry, recently topped its five-year -old record of 14,164 writes The Edge analyst Dheeraj Shahdadpuri.

Despite the fragile recovery that we have witnessed since 2009, the Dow Jones has posted gains each year. However, this feat has ostensibly and simultaneously created

Dheeraj Shahdadpuri is a financial analyst currently based in Dubai in the United Arab Emirates. The Edge | 25

sectors | finance & markets

Financial services

Streamlining insurance regulation

Yousef Hussein Kamal, the minister of economy and finance, announced that plans were in motion to set up high-level regulatory coordination under the umbrella of the QCB.

The Qatar Central Bank’s takeover of responsibility for licensing and supervising the insurance industry should enhance regulation and level the playing field for insurance companies, says Thomas Bacon

The law of the Qatar Central Bank (QCB) and the Regulation of Financial Institutions, which came into effect in February, designates the QCB as the supreme regulatory authority for the financial services industry, transferring a role that previously belonged to the Ministry of Business and Trade. The new regulatory regime is expected to be fully in place later this year. The reform will bring regulation for insurance companies operating in the country in line with international industry standards and the insurance core principles set by the International Association of Insurance Supervisors (IAIS). Insurance firms operating in the Qatar Financial Centre (QFC) are already subject to a regulatory regime that meets this IAIS framework. Previously, local insurance companies set up outside the QFC were regulated by the statutes of a law that has been on the books since 1966. Michael Ryan, the CEO of the Qatar Financial Centre 26 | The Edge

Regulatory Authority (QFCRA), told Oxford Business Group that the new law is “a welcome development that is extremely dynamic for the financial services industry of Qatar”. The insurance sector, in particular, represents a valuable investment prospect. The low penetration rate of 0.89 percent, according to the Qatar Financial Centre Authority (QFCA), constitutes an attractive growth opportunity in a sector that has witnessed consistent expansion over the past few years. The country’s youthful population, robust economic foundations and a programme of infrastructure and oil and gas developments make it highly attractive to

There are very few compulsory insurance rules in Qatar. It is expected that the next few years will see more categories added – the most widely anticipated being mandatory health insurance.

both local and international insurers. Another reason to expect growth is that there are very few compulsory insurance rules in Qatar. Third-party motor liability and professional liability for engineers are the only two categories currently obligatory, far fewer than in many other countries. It is expected that the next few years will see more categories added to this list – the most widely anticipated being mandatory health insurance for Qataris and expatriates. The streamlining of the regulatory systems has been years in the making. In this vein, the new law also established the Financial Stability and Risk Control Committee (FSRCC) under the auspices of the QCB as a mechanism for coordinating the activities of Qatar’s three supervisory bodies and implementing a consistent regulatory regime across the financial industry. A plan to combine the QCB, the QFCRA and the QFMA into one sweeping regulatory entity was proposed several years ago, though never implemented. The appointment of the QCB’s governor to the chairmanship of the QFCRA in March 2012 marked the beginning of the two organisations’ harmonisation. That same month, Yousef Hussein Kamal, the minister of economy and finance, announced that plans were in motion to set up high-level regulatory coordination under the umbrella of the QCB.

Based in Turkey, Thomas Bacon is an analyst at Oxford Business Group (OBG).

The Edge | 27

28 | The Edge

Contents: Extract or hold fire? Qatar’s new gas find 29 . Qatar takes financial stake in its own growth 30 . Qatar investors told to ‘look to Next 11’ 31 . Solar drive should propel Qatar up energy index 32. Green building deal combines the old with the new 32.

energy & sustainability

Qatargas oil platform off the coast of Qatar in the Arabian Gulf: The country has revealed a new gas find, working with Germany’s largest natural gas producer Wintershall. (Image Corbis)

Extract or hold fire? Qatar’s new gas find In March, Qatar revealed a new natural gas discovery to the world. But the field’s operators might be well advised to hold fire on production, Jamie Stewart comments.

Qatar state-owned energy giant has discovered substantial deposits of natural gas off the north coast of the country, it was revealed in the middle of March. Working alongside Germany’s largest natural gas producer Wintershall, Qatar Petroleum (QP) said the find, in what is called Block 4 North, amounted to some 2.5 to 2.8 trillion cubic feet (tcf). Although widely reported, the find is not market-moving in global terms. With

Qatar already boasting proven reserves of some 890 tcf, it adds only one-third of one percent to Qatar’s known reserves. By comparison, Norwegian state-owned firm Statoil said in March that it had discovered up to six tcf of gas off the coast of Tanzania. But even the small percentage of new gas that QP found adds roughly eight months worth of exports to Qatar’s reserves, which remains significant. If recent reports prove accurate, Doha would be well advised to sit on its new

find temporarily, despite the urge to begin liquidating the asset as soon as possible. According to upstream oil and gas event organiser the Energy Exchange, there is some uncertainty as to the pace of gas demand growth in Europe, which remains a key export market for Qatar despite its ongoing push into Asian nations, which is fundamentally due to increased use of coal in European power generation coupled with expectations of low economic growth. However, in the future, the picture is The Edge | 29

sectors | energy & sustainability

expected to change dramatically, and Qatar will be on the right side of that shift. “By 2030, there is expected to be a 220 to 230 billion cubic metre (7.8-8.1 tcf) gas shortfall in Europe that will need to be filled,” the Energy Exchange stated. Shale gas, the production of which has driven down gas prices in the United States, “will not be the immediate solution,” it stated. “Europe will therefore need LNG [liquefied natural gas] and if Europe cannot secure a dedicated supply, it will have to compete globally to secure LNG volumes.”

Petroleum shipping

Qatar takes financial stake in its own growth

The waiting game

The good news for Doha is that it is already by far the world’s biggest exporter of LNG. And Qatar possesses a comfortable enough supply of natural gas to avoid rushing into things. The global market is expected to remain tight over the next couple of years, before new production projects in Australia and elsewhere begin to come on line. But thereafter the market is widely expected to enter a positive phase characterised by a loosening up of supply. It will be some time before gas can be extracted from the new field, and if Qatar can wait out the duration of the above period into the tighter window when European demand picks up, additional profits could be considerable. The potential positive impact on economic growth, and as a direct result on business in Qatar, is considerable. According to a Qatar National Bank (QNB) study into the banking sector, it was higher energy prices and increased hydrocarbon production that provided for large public spending programmes across the country last year, propelling it to the top of the asset growth table. “Among the GCC [Gulf Cooperation Council] countries, Qatar, which accounted for 15 percent of total GCC banking assets in 2012, stood at the forefront of growth,” QNB stated. However, whether or not the waiting game is a viable option is not up to Qatar alone. Germany’s Wintershall will also play its role in the strategic planning: “Wintershall has been actively exploring in Qatar for more than 30 years and we are pleased with the results of the wells in Block 4 North,” chief executive Rainer Seele said when the new find was announced. “We are looking forward to proving our capabilities as a reliable and technically competent operator and partner.” 30 | The Edge

Rainer Seele, chairman of Wintershall, Germany’s largest natural gas producer has been exploring in Qatar for more than 30 years. (Image Reuters)

CEO APICORP Ahmad bin Hamad Al Nuaimi believes that APICORP Petroleum Shipping Fund could be of huge benefit to Qatar’s gas producers.

A major bank, 10 percent owned by Qatar, is looking to cash in on growth in petroleum shipping and is already in control of five tankers, Jamie Stewart reports.

2.8 tcf

The amount of the new natural gas find in Qatar in March 2013.

Doha is part of an innovative international investment scheme seeking to cash in on growth in the petroleum shipping industry – growth that itself is partly driven by what is by far Qatar’s most valuable export: natural gas. And the man behind the project has revealed it could be just the first in a number of such funds aimed at the shipping industry, as well as other oil and gas related sectors. At the end of February, the Arab Petroleum Investments Corporation (APICORP), a multilateral development bank, unveiled its self-titled APICORP Petroleum Shipping Fund. The bank is owned by the Organization of Arab Petroleum Exporting Countries (OAPEC), with Qatar holding 10 percent of the bank. The US$150 million (QR546 million) fund, co-managed by specialist financial services firm Tufton Oceanic, has already acquired five medium-range petroleum product tankers. They will be employed

energy & sustainability | sectors

in the regional and international tanker market for five years “to help meet a projected upsurge in demand for petroleum product carriers,” APICORP stated. The shari’ah-compliant fund is aimed at helping oil and gas companies grow their business while generating regular returns for equity investors. APICORP chief executive bin Hamad Al Nuaimi said, “In this case, the fund helps companies meet their requirements for petroleum products transportation without burdening their balance sheets.” This could be of huge benefit to Qatar’s gas producers. And the APICORP Petroleum Shipping Fund is by no means a one-off, “We are exploring the development of similar new funds in shipping and other oil and gas sectors to take advantage of further such growth opportunities,” Al Nuaimi said.

tanker market creates the right conditions for the success of the fund,” Machin said. “The growth of rapidly industrialising mega-economies like China and India is expected to drive volumes of seaborne petroleum products in the next few years.” APICORP figures show that, as equity owner, it has invested in a total of 22 oil and gas joint venture projects worth in excess of US$16 billion (QR58 billion).

Growth

The growth forecast for the sector is backed by new figures published by the Qatar Statistics Authority (QSA). According to the group, the number of vessels arriving and departing at Qatar ports was highest during 2011 – the most recent year for which figures are available – when 5353 vessels docked at different Qatar ports. According to the QSA, the “main types of vessels were oil and gas tankers, amounting to 2694 vessels with a tonnage of 230 million, an increase of more than 174 percent compared with 2010 figures.” Mesaieed port accounted for the highest share, with 2112 vessels docked in, although this was actually down by two percent year-on-year. Mesaieed was followed by Ras Laffan port with 1944 vessels – a 13 percent increase. Both Al Nuaimi and Tufton Oceanic director Marcus Machin highlighted the growth prospects. “The positive outlook for demand growth in the global product

APICORP fund has acquired five medium-range petroleum product tankers which will be employed in the tanker market for five years. (Image Getty Images)

Energy investment

Qatar investors told to ‘look to Next 11’

International investors in Qatar are being advised to seriously consider injecting cash into projects in the ‘Next 11’ nations by Doha-based financial institution Commercialbank.

The Next 11 is a concept first aired by global investment bank Goldman Sachs. It is an umbrella term encompassing the markets of Egypt, Iran, Turkey, Nigeria, Mexico, Indonesia, Bangladesh, South Korea, Pakistan, the Philippines and Vietnam. These markets are characterised by rapidly growing populations hungry for goods and services, the bank’s MENAbased executive director, Salem Bou Auon explained. The news opens up the very real possibility of investing in energy projects –

The number of vessels arriving and departing at Qatar ports was highest during 2011 – 174 percent more compared to 2010.

a precursor to fuelling economic growth – to an affluent audience of Qatari investors with a traditional interest in that very sector. “Growth markets are expected to continue growing at an enormous rate for the next few years,” Commercialbank investment services general manager Parvez Khan said. “These markets are expected to deliver strong economic growth over the next couple of decades and will contribute 60 percent of global gross domestic product (GDP) over the next 30 to 40 years, a significant expansion that will benefit companies and people across these countries. “Investors have realised excellent returns over the last decade by investing in these markets, and all expectations are that the investors will continue to reap great rewards from investing in these countries,” he added. Opportunities within the energy sector are plentiful. For example in Egypt, the oil and gas sector represents 25 percent of the government’s fiscal revenues and accounts for nearly 70 percent of foreign direct investment, according to the US-based Multilateral Investment Guarantee Agency. The rate of GDP growth in the emerging markets is in stark contrast to more established destinations, and the Middle East region is not to be easily outdone as a potential investment location. According to the latest International Monetary Fund projections, economies in the Middle East and North Africa region (MENA), which includes Qatar and Egypt, The Edge | 31

sectors | energy & sustainability

are expected to achieve collective GDP growth 70 percent stronger than the United States in 2013 and well above the zero-growth environment expected in the Eurozone this year. The tip was revealed as part of a series of seminars being organised by Commercialbank. According to Khan, Qatari clients “are increasingly seeking investment ideas on a global basis”. The series of seminars will,” he said, “showcase several ways in which Qataris can diversify their portfolio and take advantage of some of the opportunities that might not otherwise be obvious.”

Economies in MENA are expected to achieve collective GDP growth 70 percent stronger than the United States in 2013.

“Whilst the Middle East countries did not rank highly in this report, I expect this to change,” Omar Boulos, managing director of Accenture Middle East, which worked on the study, said in March. “Governments and private companies across the region are investing billions of dollars in energy infrastructure and they have declared very real commitments to address the challenges of energy supply, particularly in terms of renewable energy,” he added. The comments came just one day after Qatar Solar Technologies, which is spearheading Doha’s solar power drive, presented property developer Barwa with the first of 136 solar modules that will power the Baytna project. As reported in The Edge last month, the scheme will be the country’s first Passivhaus, an extreme efficiency standard resulting in ultraminimal energy demand. The global energy architecture performance index measures energy systems in terms of economics, the environment and energy security.

The Baytna project will be Qatar’s first Passivhaus, designed to have extremely low energy demand. (Qatar Solar Technologies)

Green energy

Solar drive should propel Qatar up energy index Huge investment in solar power is expected to boost Doha’s standings as Qatar looks to clean up and diversify its energy system.

Qatar is expected to ascend the World Economic Forum’s global energy architecture performance index over the next few years after being ranked a disappointing 92nd place in the 2013 report – just one place above Kenya and below eight Middle East nations. 32 | The Edge

136

Solar modules that will power Qatar’s Baytna project.

Sustainable construction

Green building deal combines old with new

QGBC Vice Chairman Rasha Al Sulaiti and Bridget Bartlett COO CIOB sign MOU.

The burgeoning Qatar domestic green construction industry took a big step in early March with the signing of an agreement that will promote awareness of issues concerning sustainability in the built environment.

The memorandum of understanding (MoU) between the Qatar Green Building Council (QGBC) and the UK-based Chartered Institute of Building (CIOB) paves the way for knowledge-sharing between the two groups. “By combining our local expertise with the sizeable experience that the CIOB possesses in the field...this MoU opens the door for powerful collaboration,” QGBC vice-chairman Rasha Khamis Al Sulaiti said. The momentum behind sustainable construction in Qatar has been accelerating for some time. This culminated in Doha’s 2011 introduction of the Qatar Sustainability Assessment System (QSAS), which mandates certain criteria in new buildings, creating business and industrial opportunities. Pertinent criteria under QSAS, which hinge around Qatar’s arid environment, include water consumption, energy efficiency and urban connectivity.

Jamie Stewart is a freelance journalist and oil and gas industry researcher and analyst based in the United Kingdom.

Contents: Doha: A city with a ‘soul’? 33 . Part-time agents: Impact on consumers 34 . Developing uniform worker welfare standards 35 . Qatar eyeing UK dedicated investment fund 36.

real estate & construction

It is not widely understood how the fragile historic urban fabric of run-down neighbourhoods hold incalculable value for the community of Doha, as the place of memory from where new things of lasting value can grow, says a leading architect Tim Makower.

Doha: A city with a ‘soul’? Doha_On Centre was an installation at Tasmeem Conference held at VCU during March. But ‘Can a city have a ‘soul’ and if so, will its soul be an essential part of its long-term success ?’ asks Tim Makower.

he focus of the exhibition was Doha’s distinctive tripartite city centre. Although it can be argued that the centre of Doha encompasses major nodes such as the new airport and Al Sadd, the thesis of Doha_On Centre is that the three contrasting but potentially complementary components at the ‘centre of the centre’ – Old Doha, West Bay and the Corniche – are those which

most clearly offer clues to its identity. The show made the point that although the old city around Souk Waqif and Msheireb is geographically the centre of growth and activity, it is the connectedness between the old city and the new, West Bay via the Corniche, which holds the character of Doha today. Old Doha is likened to a precious patchwork, handed down through a family, from generation to generation; something to be repaired but not replaced. West Bay is described as a piece of unfinished business, waiting for a new layer of streetscape and walkable routes to be added among the sometimes crazy glass towers, which make such an impressive skyline, but such a difficult place to inhabit as a pedestrian. The Corniche is called the defining

motif of the city and, as well as a thorough examination of its present state, tantalising glimpses are given of how this already iconic crescent of public space encircling the Bay, could be dramatically renewed without being reinvented. A grand crescent of lights, and a necklace of trees is illustrated, giving the Bay a three-dimensional presence and affirming its role as the focal point of the city. With the city’s two urban hubs held in dialogue with each other across the water by the curve of the Corniche, the three parts of the city centre are likened to the heart and lung of the city, without which it wouldn’t have a life, and this raises the question of value. It is indeed appropriate in a nation with such high cultural aspirations, The Edge | 33

sectors | real estate & construction

to think of the word value as meaning something deeper than simply investments and returns, and to put quality above quantity as a goal. The quality of a building, or a street, or a public space, is not just the question of its value as a commodity; how well-made is it and whether it will last, although this matters more than is generally acknowledged. It is also about its nature and the role it plays within the community of the surrounding city. In the case of Old Doha, it is not widely understood how the immensely fragile historic urban fabric of run-down neighbourhoods such as Al Asmakh and Abdul Azeez hold incalculable value for the community of Doha, as the place of memory from where new things of lasting value can grow. The notion of rootedness or sense of belonging, which is portrayed as a fundamental aspect of the long-term sustainability of a city such as Doha, brings us back to the question of whether a city has a soul and if so, what is its value. Its value surely resides in its identity, both what it is and where it has come from, and what makes it different from other cities around the world. Old Doha holds the memory of what this city was only half a century ago, when its prosperity was just beginning. Meanwhile the sweeping curve of the Corniche and the dynamic it creates between old and new across the Bay is essential to this truly memorable cityscape. If these are treated as significant seeds in the garden of Doha from which healthy and lasting fruits can come, then the future of the city, building on its uniqueness and its strong sense of centre, is surely promising.

Tim Makower, founder of Makower Architects, is the architectural language advisor of Msheireb Properties and has been the architectural voice of Msheireb for over five years. 34 | The Edge

Rental market The three parts of the Part-time city centre â&#x20AC;&#x201C; Old agents: Impact on consumers Doha, West Bay and the Corniche â&#x20AC;&#x201C; are likened to the heart and lungs of the city.

Real estate website Mannzili recently conducted both a focus group and a survey in order to better comprehend what is happening in the real estate market in terms of their key users; home seekers and estate agents, writes Aziz Sharif.

78%

22%

About 78 percent of the small portfolio market uses part-time agents, only 22 percent used licensed estate agents.

There seem to be concerns regarding informal part-time agents, as they compete with the established and licensed real estate firms whilst seemingly delivering a very poor service. Their proliferation (see diagram bottom left) is due in part to the fact that they are incentivised to encourage the highest price from the consumer in order to command the highest commission, whilst costing them nothing to engage. These informal agents present a number of issues ranging from poor customer service to making promises that the property managers will not keep. Even though there are a number of reputable estate agencies operating in the marketplace, a number of interesting factors were uncovered by our research. For example, a sizeable portion of those searching for properties outside of the expatriate luxury sector tended to use informal agents. Qataris tended to use various channels to search for properties, which almost always meant them using parttime estate agents. Middle to highincome rental properties (defined as anything above QR5500) tended towards a more structured market where the large branded agencies operated. Low-cost

real estate & construction | sectors

housing (defined as anything under QR5500) is dominated by part-time estate agents, 100 percent of those we questioned in this segment used informal agents they found through online forums and chat services. Part-time agents also dominate the small portfolio market. They tend to be favoured by property managers with a small number of houses to save on costs. Our research indicated that a figure close to 78 percent of the small portfolio market uses part-time agents. The other 22 percent used conventional agencies because they held luxury properties. No one questioned in our survey was willing to say that they had a positive experience using these agents, citing missed appointments, poor communication and misleading statements. The part-time agents have a number of mechanisms that enable them to operate unhindered. It starts with property managers and owners themselves, whose interest is primarily to ensure occupancy and increased revenue. Therefore, using multiple agents with an incentive to push

prices upwards works in their favour. This is why it is common to see multiple prices for the same property in various channels. Furthermore, property managers who use online channels overstate their prices beyond that of the part-timers. This is due to a perceived higher income level of Internet users and the need for a margin for negotiations. This creates a sense of value for customers when comparing what is seen online versus what you hear from informal agents, leading only to further reliance on them. Due to the lack of development in how the industry interacts with their clients, these informal agents can generate a sense of high demand regardless of market conditions, and indicate much higher prices in order to command a higher commission. How do these factors affect the marketplace as a whole? There will always be informal agents as they are an unavoidable element in the industry, even if legislation is passed against it. The difference in what we are experiencing in Qatar is the level of reliance we have

on them. The general sense of poor customer service is mainly due to the fact that it is a part-time job for these agents which complements their primary source of income. The main point, however, is that their presence is indicative of the failings of others. Moreover, there are segments that have been largely underserviced by conventional agents that stimulated the need for these informal agents. Regardless of the lack of professionalism by some of these agents, they are filling a gap in the market that others are ignoring.

Aziz Sharif is managing partner of real estate website Mannzili in Doha, Qatar.

Migrant labour

Developing uniform worker welfare standards In mid-March at the HSE in Construction Qatar conference, issues revolving around the delivery of Qatarâ&#x20AC;&#x2122;s projects in a safe and eco-friendly manner were discussed. One of the speakers, Philip James, from CH2MHill, the assurance director for the Qatar 2022 World Cup, spoke about the welfare of local workers, their issues and the implementation of best practice, reports Shehan Mashood.

While the treatment of workers is a complex issue, it breaks down to three areas, said James in his opening remarks. How workers are recruited from their home countries is where it begins, with

A migrant worker in a labour camp, in Qatarâ&#x20AC;&#x2122;s industrial area. The quality of accommodation workers are provided with have drawn severe criticism from organisations such as Human Rights Watch. (Image by Matilda Gattoni)

The Edge | 35

sectors | real estate & construction

exorbitant recruitment fees, then the accommodation standards and finally construction worker safety. “There are quite a few unsafe construction sites in West Bay,” and according to James extremes in safety procedures exist, from sites with very good standards to buildings where he said, “I am half expecting bodies to land next to me every time I go past.” Although there is not much data in the region to work with regarding migrant workers, what James and his team extrapolated was that in the course of building their stadiums over the next decade, at least 14 people would [die], on a conservative estimate, he said. “And while we were doing that, probably another 300 people would die as well,” he added. And that was not something they were prepared to accept, he explained. James pointed out that while certain companies have an excellent record with regards to the treatment or living conditions of their workers, others who did not make it worse for the industry as a whole. Qatar is also in competition with other countries for workers, pointed out James, and there is not a limitless pool of workers out there. The negative consequences beyond the tragic loss of human life will also be the reputational damage that Qatar suffers, making it difficult to attract the necessary workers. “We are in competition,” said James, “we are going to need, depending on who you talk to, another 450,000 to 800,000 workers over the next eight to 10 years.” Dubai is recovering, Abu Dhabi has its own 2030 plan, and Saudi has got some massive infrastructure projects happening. The countries where these workers are sourced from also want their own people. What James suggested at the conference was the creation of a voluntary safety body that works collectively to develop a set of common worker welfare and health and safety standards. “If the stakeholders who we are trying to get involved, committed more, we would have about 80 percent of the projects across Qatar conform to the same standard,” he said. There is need of better enforcement of safety standards by the authorities, because of their inability to match the pace and size of projects happening. The new body would then free up the authorities to then go and chase up the remaining 20 percent, adds James. 36 | The Edge

Qatari Diar

Qatar considering UK dedicated investment fund

124

billion, Qatar’s achieved investment figure for the country’s projects in UK

While Qatari Diar’s Chelsea Barracks project – Qatar’s biggest real estate investment in London, worth QR16.5 billion– stays on hold amidst Britain’s ongoing recession, the country is in talks to create a UKdedicated investment fund.

“If the stakeholders who we are trying to get involved, committed more, we would have about 80 percent of the projects across Qatar conform to the same standard.”

Aiming to diversify Qatar’s investment portfolio, the fund that can value up to £10 billion (QR55.4 billion) will invest in Britain’s key infrastructure projects. With stakes in UK’s leading brands like Harrods and Sainsbury, the country’s current investment figure in UK exceeds QR124 billion. To ensure long-term economic stability, Qatar has been exploring investment opportunities non-dependent on hydrocarbons, said the Minister of Business and Trade HE Sheikh Jassim bin Abdulaziz Al Thani on the launching ceremony of the ministry’s document that analyses 30 years of Qatar’s business and trade growth. In midMarch, Marks & Spencer’s stocks surged by eight percent amidst speculations of the retail store’s GBP8 billion (QR44.1 billion) takeover by the Qatar Investment Authority. Despite negating statements from sources close to Qatar Holding, neither M&S nor QIA has denied the reports.

Contents: Survivng a social meda crisis 37 . Empowering Qatar’s entrepreneurs and SMEs using cloud technology 38 . Qatar: A hub for technology ventures? 40 . Rolling out a new era in broadband for Qatar 40.

tech & communications Surviving a social media crisis Rishi Saha, a Gulf based digital communications expert provides five steps to think about when managing an online crisis.

he feeling will be all too familiar to many of you: the sweaty palms, the dry mouth, the surges of adrenaline and the head-spinning disorientation. When a crisis hits your organisation, it can test all of your critical faculties. And the bad news is that social media has made the job of crisis communications even tougher. The core features of the crisis playbook message, discipline, transparency, empathy, response and rebuttal – have remained, but the rules of the game have changed. Consumers and citizens now have a public voice, thanks to Facebook, Twitter and all the other digital publishing tools at our disposal. Social media has also emboldened other key stakeholders – the media, employees, pressure groups and government. Those who have been on the receiving end of shoddy service no longer need to wait on a premium-rate customer care line for hours for an official response. They can vent their anger, publicly and immediately, whether you like it or not. More substantial crises – disasters, IT breaches and product recalls – pose an even greater threat. In these situations, effective crisis response goes well beyond reputation management and becomes a quasi-emergency service. Recent highprofile cases have shown how difficult this terrain can be. The horse meat scandal in the United Kingdom dominated coverage across the traditional news media and the The Edge | 37

sectors | technology & communications

Effective crisis response goes well beyond reputation management and becomes a quasiemergency service. Recent high-profile cases have shown how difficult this terrain can be. Internet, with many of the firms involved castigated for their slow approach. Conversely, the Qatari Ministry of Interior was praised for its agile, informative and sensitive handling of the Villaggio Mall tragedy, with their Twitter and Facebook accounts providing points of clarity amidst the online rumour mill. So how can organisations prepare and protect themselves? Here are five steps to consider: • Always be listening: Do you know what people are saying about you today? Without an up-to-date and accurate monitoring system, it is impossible to react with speed to fast-moving events. For example, Dell’s Social Media Command Center helps them track more than 25,000 daily conversations about their brand, and responds appropriately. • Build advocacy: If a crisis hits, who would give you the benefit of the doubt? By forging strong relationships with influential voices in your sector, you give yourself the chance to be heard, if and when the roof does cave in. • Design protocols: Holding statements, approval structures and online collateral can all be designed ahead of time and deployed when problems occur. When FedEx was confronted with a YouTube film showing one of their deliverymen mishandling a customer’s property, they 38 | The Edge

responded with their own apologetic video response within 24 hours. Could your firm respond that swiftly? • Test yourself: The worst time to test your crisis protocols is, of course, during a crisis. At Hill+Knowlton Strategies, we have built a social media crisis simulator, Flight School, through which day-long online crises can be simulated for clients, where staff are tested and protocols get drilled. • Respond with empathy: You may not possess all the facts, but social media abhors a vacuum. And if you fail to respond, the space will be filled by less sympathetic and inaccurate voices. Acknowledge concerns; be honest about the situation and correct misinformation.

Rishi Saha is regional director of Hill+Knowlton Strategies in the Middle East and is the former director of digital communications for Prime Minister David Cameron at 10 Downing Street.

Network optimisation

Empowering Qatar’s entrepreneurs and SMEs using cloud technology Leveraging technologies like the cloud could help small and medium businesses in Qatar increase their potential for growth into other markets, says Göksel Topbas, a Microsoft expert.

Now is the time to support local entrepreneurship. As the population continues to grow, the economic future of the region depends on our ability to battle common problems like rising unemployment and a lack of capital funds to support local businesses. We must help young companies lead the way and contribute to the country’s overall economic growth with their ideas and energy. Large corporations may get much of the attention, but it is small and medium businesses that are behind some of the most exciting contributions to economic growth, job creation and innovation. After all, every business starts off small. According to recent IDC research, small and medium enterprises (SMEs) constitute over 99 percent of all companies in the Middle East, Africa and Turkey region. However, they contribute to only about 30 percent of the total information technology (IT) spend. IT maturity among SME organisations is low, and IT infrastructure relatively weak. The more progressive SMEs, however, see IT as an enabler to address these challenges and capture new opportunities. As a result, IT spending among these businesses is expected to grow strongly over the coming years. Emerging technology paradigms such as cloud and mobility will enable SMEs ramp up or scale down with business and leapfrog technology generations to access cost-effective resources that will make them highly competitive, even against larger enterprises. The business world in which we

technology & communications | sectors

operate in is truly global, with businesses no longer confined to operate within their geographical boundaries. SMEs nowadays compete on the global stage, where more established companies are harnessing technology trends such as cloud computing, big data, and mobility. I recently met with a number of SME customers in Qatar who have improved productivity and become more responsive to their customers since they adopted cloudbased solutions into their business. One such customer was able to gain constant access to his customer information by storing it in the cloud, helping the company to issue orders more smoothly and quickly, and further grow their business. Small businesses in Qatar need IT tools and resources to grow and establish themselves in the same way, so they can increase profitability and move into new markets. Industry partners have the resources and commitment to make SMEs more competitive in the marketplace by providing enterprise-grade solutions that level the playing field between SMEs and enterprises.

IT maturity among SMEs is low, but the more progressive SMEs see IT as an enabler to capture new opportunities.â&#x20AC;?

GĂśksel Topbas is the Server and Tools Business Group Lead at Microsoft Gulf.

Source: Edge Strategies survey commissioned by Microsoft Corp. The Edge | 39

sectors | technology & communications

Entrepreneurship

Telecommunications

Qatar: A hub Rolling out for technology a new era in ventures? broadband for Qatar Enterprise Qatar has announced a new strategic partnership with TechWadi, a non-profit organisation trying to increase collaboration between Silicon Valley and the Arab region, to launch a new technology incubator in Qatar.

The incubation programme, set to be launched in April 2013, is an attempt to build bridges to Silicon Valley through mentorship, education, and financing; the hope is that this programme will help thousands of local and regional entrepreneurs, transforming Qatar into a regional hub for technology entrepreneurial ventures. According to Enterprise Qatar, select entrepreneurs from around the Arab region will be invited to join the incubator and benefit from a latest ecosystem. Every year, two groups of five to 10 qualified entrepreneurs will be given the opportunity to access the world’s leading technology experts in a branded Qatari pavilion in Silicon Valley. The graduates from the acceleration programme will also be eligible for subsequent seed financing from Enterprise Qatar and local venture capital partners to expand their businesses across Qatar and GCC. Noora Al Mannai, CEO of Enterprise Qatar, emphasised the strategic importance of the initiative with technology being a key driver of economic growth, saying, “Enterprise Qatar is dedicated to creating an entrepreneurship and innovation ecosystem that can support the growth of the Qatari economy in line with the National Vision 2030. Our incubation programme will catalyse would-be entrepreneurs and SMEs with genuine potential, but that needs adoption of the best practices to flourish. To that end, we are partnering with Silicon Valley-based TechWadi to help us with mentorship, business acceleration and access to capital. Enterprise Qatar is the first in the region to establish such a programme.” 40 | The Edge

His Excellency Sheikh Abdullah bin Mohammed bin Saud Al Thani, chairman of Ooredoo, announcing the rebranding of the Qtel group of companies at the mobile world congress in Barcelona, Spain. The company’s ability to successfully rollout its fibre optic broadband network will go a long way towards reinforcing customer service as a priority.

representative of Saudi Telecom was for telecom companies to engage with external groups from the outset of broadband planning so that the network expansion and consumer experiences are better linked. Ooredoo, previously known as Qtel, presented its new name and marketing identity at the event, noting that it will also be pursuing fresh strategic outlooks to match the new image. The ability of Ooredoo to implement a more aggressive broadband rollout will go a long way towards reinforcing customer service as a top priority on its agenda. While Ooredoo will be making considerable moves to establish its new identity, it also will need to focus on how to negotiate that new identity with its broadband expansion. This will enable Ooredoo to better enhance its intentions with regards to customer service needs.

Hassan Asif is a Media Industries and Technologies student at Northwestern University in Qatar.

Hassan Asif, who attended the Broadband MEA conference in Dubai recently takes a look at the impact broadband rollout will have on customer service.

An important aspect of the fifth annual Broadband MEA conference, which convened in March, was a focus on improving customer experiences with broadband throughout the region. The event included various presentations and panel discussions from experts in the region, with multiple contributors from Qatar. A common theme that was resonant across the telecommunications network providers in the region was the realisation that customer satisfaction cannot be viewed comprehensively. For example, in Doha there may be great disparities in how broadband is perceived by residential customers, based on their income levels. Qatar National Broadband Network’s (QNBN) chief technical officer, Ahmad Alsulati, confirmed this in the context of Qatar, where a similar concern has risen with the issue of optic fibre rollout. Another issue discussed that has particular importance in Qatar is strategies to be employed when dealing with vertical markets, such as education and healthcare, while also undertaking a mass awareness programme of its network services. One piece of useful advice provided by a

The ability of Ooredoo to implement a more aggressive broadband rollout will go a long way towards reinforcing customer service as a top priority on its agenda.

country focus | germany

Qatar and Germany: Broad-based bilateral relations

Germany is one of the most prominent countries where Qatar has allocated many of its sovereign funds â&#x20AC;&#x201C; Qatar Holding has a stake of 9.1 percent in construction major Hochtief, 17 percent in Volkswagen, 10 percent in Porsche and 3.04 percent in Siemens, in addition to recent private sector investments in the hospitality sector. What do these investments mean for the bilateral relations? What role will small and medium enterprises (SMEs) play in the future relations between Germany and Qatar? These are some questions The Edge asked the German Business Council as well as Angelika Storz-Chakarji, German Ambassador to Qatar. Aparajita Mukherjee reports.

ilateral relations have clearly a lot to do with investments, specially when Qatar has found investing avenues in many big German companies. But from The Edgeâ&#x20AC;&#x2122;s discussions with Angelika Storz-Chakarji, German Ambassador to Qatar, it is evident that apart from sovereign investments and the many flagship German corporates

42 | The Edge

from ABB, Deugro, Debaj, Deutsche Bank, to Siemens, Allianz, Aktor, spanning diverse sectors, a complete picture can only be arrived at when one takes into consideration the softer sides of the relationship. This could be a language learning centre or research collaboration at the university level. And given Qatarâ&#x20AC;&#x2122;s thrust into building a knowledge-based

economy, it is these factors that add to the diversity of relations, beyond the economic and financial spectrum. The trade figures for 2012 between Germany and Qatar indicate that there have been strong economic ties between the two countries. German exports to Qatar were around EUR1.2 billion (QR5.6 billion) while and Qatari exports to Germany were

germany | country focus

at EUR270 million (QR1274.4 million). According to Storz-Chakarji, this indicates that there remain some trade imbalances. “But,” she says, “I hope that the figures will see a healthy growth from both sides since it is important for the German economy as one that has a great reliance on exports and there are indications that the Qatari exports to Germany will further rise in future.” Commenting on the pillars of bilateral relations, Storz-Chakarji says, “Germany and Qatar look back on a long history of friendly and productive relations. An important symbol for that is the fact that in 2013, the two countries are celebrating the 40th anniversary of bilateral relations.” However, there are other priority sectors as well and Storz-Chakarji mentions that a milestone in the cultural field was the funding of the German International School of Doha in 2008. The school began merely as a start-up “but it has been growing and we are confident that it will become the centre for more activities for the 1700-plus Germans in the country. In addition to this, we now have the German Language Centre Doha, which is also flourishing and shows that there is growing interest in the German language here in Qatar both by Qataris and residents of Doha.” Norma Noun Sandawi, deputy representative and head of business development, German Business Council (AHK), one of the main pillars of bilateral relations between Qatar and Germany, hinges on the quality of German products and services. “From our experience, ‘Made in Germany’ is very much appreciated in Qatar and in most other countries worldwide, but it doesn’t guarantee any cooperation – it is a good way to get the foot into the door, but has to be followed by excellent business plans and comprehensive life cycle costs. This is where the structured work behaviour of Germans come into the forefront.”

Slower economic growth

The German economy, though one of the better-performing in Europe, has slowed down in 2012. Would that, in any way, have any impact on the broadening of economic and trade relations between the two countries? Storz-Chakarji gives her take by saying, “In spite of the macroeconomic differences in Europe, the German economy has experienced a phase of very solid growth in recent years, thanks to the consciously

chosen strategy of a strong manufacturing sector which is the backbone of our economy and in tandem, keeping the pre-eminence of the small and medium enterprises (SMEs). One point to note is that many of our SMEs and businesses are still family-owned and they have a large dose of flexibility built in. This essentially means that each of these can adapt to new economic realities and ways of doing business. As a trading partner, Germany thus has a lot to offer in terms of value to Qatar and the other nations of the world.” Anna Kristin Krönert, deputy representative and head of business development says that despite the economic crisis in Europe, Germany continued its economic growth in 2012 whereby the gross domestic product (GDP) increased by 0.7 percent compared to the previous year. “Of course, the GDP increase was much higher in preceding two years (2010: 4.2 percent, 2011: three percent) but the reason was the catching-up process after the world crisis in 2009.” Krönert adds, “Especially in a difficult external environment, Germany showed strength and exported 4.1 percent more goods and services in real terms compared to 2011. At the same time, imports increased only by 2.3 percent. Moreover, the number of the national working population achieved an all-time peak in 2012. We also see the future of the German economy to be very positive. The current GDP forecast for 2013 is 0.8 percent.”

Germany at a glance Government: Federal Republic of Germany Capital: Berlin Population: 82.3 million. GDP: US$3.4 trillion (QR12.38 trillion)

SMEs

Apart from large companies and corporates doing cross-border trading and collaboration, SMEs can compete effectively if given the right push, according to Storz-Chakarji. “Both in Germany as well as here in Qatar, the German Chamber of Commerce and Industry represents an important link between businesses in our two countries as they facilitate international business relations in a major way. Apart from this, whenever we have business delegations from Germany here in Qatar, we try and bring SMEs into the picture so that their participation in such delegations is guaranteed. One particular point that I would like to emphasise is that many of these SMEs are hidden champions in their particular field of business and thus have a lot to offer.” Storz-Chakarji adds that Germany would be happy to host more Qatari business delegations. “I think that particularly a large participation of SMEs

Angelika Storz-Chakarji, German Ambassador to Qatar tells, The Edge that in spite of the macroeconomic differences in Europe, the German economy has experienced a phase of solid growth in recent years, thanks to the consciously chosen strategy of a strong manufacturing sector which is the backbone of the German economy.

The Edge | 43

country focus | germany

could add an important dimension to these delegations. Trade fairs which are part of the German economy, for instance the Hanover Trade Fair would like to welcome Qatari SMEs, and they can benefit a lot by going and seeing the kind of activity that goes on in these fairs.” Commenting on the outcome of the Business and Investment in Qatar Forum to be held in Berlin in the middle of April 2013, Storz-Chakarji is optimistic and says that Germany is glad to be this year’s host country for this forum that will bring a very high-level Qatari delegaton to Qatar, both from the business and the political side. The Federal Chancellor Angela Merkel and His Execellency the Prime and Foreign Minister of Qatar Sheikh Hamad bin Jassim bin Jaber Al Thani will open the Forum. “We are confident that it will be a very fruitful forum for business leaders from both the sides, that is likely to result in a surge of trade and business relations between our two countries.”

BUSINESS TRAVEL INSIDER: Frankfurt, Germany Frankfurt is one of Europe’s main financial and business centres, but it is not all work and no play, writes Victoria Scott. GETTING THERE: Qatar Airways (www.qatarairways.com) flies to Frankfurt twice a day. An economy return fare in April costs from QR3680, or QR14,480 in business class. The flight time is around six hours. Currency: The Euro. 1 EUR = 4.7 QR (exchange rate as of March 2013) WHERE TO STAY: Rocco Forte Villa Kennedy (www.villakennedy.com/) This luxury five-star hotel is made up of three new buildings constructed around the historic Villa Speyer, which dates back to 1904. Comfortable, chic and central, it’s a short train journey from here to the airport, taking the stress out of your transfer. A room costs EUR378 (QR1784.16) in April, including breakfast. The hotel will give you free internet access if you book online. WHERE TO PLAY: Opera Restaurant (www.oper-frankfurt.de) Located in the elegant surroundings of the city’s grand Opera House, you can dine here on an excellent mix of German and Italian cuisine. If the weather is nice, ask to sit on the terrace outside. SPLASH YOUR CASH: Germany’s top city for business does not disappoint in the retail arena, either. Shopping street Zeil is the epicentre of the city’s fashion district, with department stores Galeria

44 | The Edge

Kaufhof and Karstadt offering an all-inone-stop shopping solution. Most stores are open until 8pm. CULTURE VULTURE: Staedel Museum (www.staedelmuseum. de/sm) The Staedel’s impressive collection will transport you through 700 years of European art history. You can see works by Rembrandt, Monet, Renoir and Picasso here. INSIDER TOP TIPS: In early May, most museums in the city hold a special all-night event called Lange Nacht der Museen (Long Night of Museums, www.nacht-dermuseen.de/frankfurt). Buses transport visitors from one museum to the next, and special events are organised at each location. It is hugely popular, so book in advance.

Join The Edge magazineâ&#x20AC;&#x2122;s online community.

FOLLOW THE EDGE

AND WIN A SMART PHONE! The Edge magazine has a rapidly growing online presence and community. To keep abreast of breaking news and fresh content on our website, as well as exclusive updates, content, conversations, insights relating to the business world in Qatar and the Middle East, follow The Edge on Twitter, Facebook or LinkedIn in April and also stand in line to win a Nokia N9 smartphone.

FOLLOW The Edge ONLINE:

LIKE our Facebook Group: www.facebook.com/ theedgeqatar

Join our LinkedIn Group: The Edge Qatar

DIGITAL YOUTH EMPOWERMENT nology to assist ch te g in us is ch te la Si r’s ta How Qa ining what vocational rm te de in h ut yo y’s tr un co e th em. opportunities are best for th

human resources | feature story

As career guidance is still a relatively new concept in most of the Arab world, Silatech recently launched Tamheed, an online assessment programme destined to play an important role in the career development of young Qataris. The Edge takes a closer look at Tamheed and how it might benefit local youth.

f you were to gather a group of professionals and ask them why they chose their respective career paths, you are likely to walk away with very different responses. Someone might be in a family business, while another may have taken a long and staggered path to get to where they are today. However you would probably also encounter at least one person who knew exactly what it is they wanted to do from the moment they were born. Some people seem to possess an intense, almost primordial drive, steering them down a predestined path towards success. They might say, “I’ve always known I was going to be in sales,” or “I wasn’t going to stop until I became a lawyer.” It is always impressive, and arguably sometimes a bit intimidating. Because for most people, the question of what to do for a career is not something they have been thinking about since birth. This lack of occupational focus is not an indication of laziness or ineptitude; rather, it is simply unfamiliarity with the careers that are available in the workplace. As a child, one might comprehend the notion of being a farmer or a policeman, but may not be aware of the thousands of other career paths that lay before them. In the Arab world especially, career guidance is virtually unknown, with many young people unaware of the opportunities in the private and public sector. But even individuals who are aware of various job options may not take into account their own personality and preferences when considering a possible career. In an effort to help the region’s youth find viable career options, Qatar-based Silatech has partnered with Mindmill, a European human resources firm specialising in online psychometric tests, to create the Tamheed programme – a suite of products that can be administered online in a user-friendly way, incorporating an expert system to help career counsellors provide personalised advice, and recruiters assess potential candidates. Tamheed is an online psychometric assessment tool that helps young people figure out their strengths, and what types of career they might most enjoy. It aims to open the eyes of young people to the choices available to them career-wise, and is an important aspect of the career guidance process that Silatech is working to establish throughout the region. Through a network of more than 42 affiliated career centres, Tamheed is able to reach and assist thousands of young Arabs in their quest for sustainable career development. Through a series of online assessments that evaluate an individual’s abilities, personality traits and interests, Tamheed helps users make more objective and informed decisions in many areas including recruitment, selection, training, development, and career

In the Arab world, career guidance is virtually unknown, with many young people unaware of the opportunities in the private and public sector. The Edge | 47

feature story | human resources

Tahmeed assessments can be completed with expert assistance for all school leavers, graduates and even those currently in the workforce at the Bedaya facility located at Katara in Doha.

guidance. The results are translated into a user-friendly report, which qualified career advisors review with the individuals in order to identify personality strengths and possible education, training or career paths. Accredited by the British Psychological Society and contextualised into Arabic and French, Tamheed assessments have been normed for the region by highly qualified psychometricians.

How Tamheed works

Users log on to the website (either at one of the regional career centres or from an offsite computer) and register to take the test. Tamheed utilises three distinct types of assessments to measure different aspects of each candidate’s ability: cognitive, personality and career interests. The cognitive portion consists of an ‘alphabet’ portion and one testing ‘number fluency’. The alphabet section is an assessment of basic literacy skills. It assesses the speed 48 | The Edge

of perceiving letters and selecting them into alphabetical order, foundational skills that allow individuals to read and write fluently and use language proficiently. The number fluency section is an assessment of basic numerical skills, testing an individual’s understanding, reasoning and ability when performing numerical tasks including addition, subtraction, multiplication, and division. The personality section asks questions, which measure individual differences in motivation and preferences – while the career interests section measures individual interests and motivations in terms of specific industries. Once users complete the assessments, they receive a personalised report that identifies their strengths and possible career paths. These reports are then analysed by professional career counsellors who help guide users and offer advice. One such user is Reem Al Sowaidi, a confident and upbeat 25-year-old Qatari who graduated from Stenden University

Through online assessments that evaluate an individual’s abilities, personality and interests, Tamheed helps users make informed career decisions.

human resources | feature story

Tamheed: Empowering Saudi women

QR73 billion

As five million new workers hope to enter the MENA labour market annually, the estimated funds needed to provide new jobs for these cohorts will exceed US$20 billion or QR73 billion annually, according to the Arab Labor Organization (ALO). Source: United Nations Diversity.

and took the test earlier this year. “I met with Majed [Fathallah Abdel-Meguid – a career advisor at the Bedaya Center, Qatar] and he told me about my personality, my strengths, my weaknesses, and how I should improve them,” said Al Sowaidi. “I took a course at the Bedaya Center called ‘How to be self confident’, [and one] about speaking skills. These were really good courses which boosted my personality and my speech.” When asked about the process, Al Sowaidi responded, “I definitely would recommend the process because as a student, I wish I had taken this before [entering university]...I would have started with a better idea of what I would be doing in life.” But Tamheed is not just limited to helping young people choose a career path. The programme was designed to aid individuals throughout multiple stages of career development. This is the case for Sharifa Al Saad, a 27-year-old Qatari whose Tamheed results reinforced that she was in a field that suited her strengths. Al Saad had been working in public relations for two years, and took Tamheed to ensure she was employed in a field that capitalised on her strengths. Her results showed that she was strong in media, graphic design and public relations, and her

Silatech also recently signed an agreement with Saudibased Glowork to join forces to make additional employment opportunities available for Saudi women. Glowork is a sustainable social enterprise, which seeks to increase access to employment for women and increase diversity in the Saudi workforce through the first Web portal specifically devoted to female recruitment in the Gulf Cooperation Council. Through the agreement, Silatech will introduce the Tamheed programme to Glowork’s offerings. Silatech will build capacity by training Glowork staff as certified Tamheed career advisors. Glowork will also integrate the newly developed Tamheed HR programme into its current screening and job placement initiatives targeting young, unemployed Saudi women. Silatech will also offer a number of workshops on employability and entrepreneurship for Glowork, as well as support Glowork’s upcoming ‘Step Ahead’ conference in April. The event is the first of its kind to focus primarily on local college graduates in Saudi Arabia. According to Glowork, 85 percent of the Saudis that are unemployed are women, which amounts to more than 1.2 million individuals. Silatech’s deputy chief executive officer Raed Al Emadi stressed that for the region to fully realise its economic and social potential, we need to more effectively utilise the skills and talents of all of our young people. “In addition to the difficulties young people already face in entering the workforce, young women have sometimes faced extra barriers of their own,” he added. Through this initiative with Glowork, Silatech is supporting an innovative approach that opens doors of opportunity for young women while at the same time respecting local culture and traditions.”

advisor counseled that she should continue in her career in public relations. “I made sure that I was in the right path, so I kept working in the same field.” When asked if the process gave her more confidence in her abilities and skills, Al Saad replied, “I was afraid that I’m not in the right path…so when I took Tamheed it was for this reason.” Al Saad’s story is a prime example of one of Tamheed’s main goals, which is to help Arab youth choose a career path which best fits their interests and aptitudes. In an effort to reach more young Qataris, Silatech has introduced Tamheed to a number of independent secondary schools in Qatar, as well as Qatar University and the College of the North Atlantic. Through these as well as other efforts, Silatech is working to develop a skilled workforce within Qatar and throughout the Arab world. Indeed, in Gulf countries specifically, the jobs available for Arab youth are vast and varied. While the temptation to choose a job based solely on salary may be great, the long-term effects of compensation-based job placement could be detrimental. But by helping young people to find jobs for which they are naturally suited, the youth benefit from longer and healthier careers, and the region benefits from sustainable economic development. The Edge | 49

Ahmed Mekky:

Connecting

Arabs to the world It has been a few busy years for Ahmed Mekky, the founder and CEO of Gulf Bridge International (GBI), a company that deploys and manages a network of cables that runs beneath seas and oceans and across land, transmitting telecommunication signals around the globe. In the 15 months preceding this interview, his company launched its first network linking the Middle East, extending those routes through to Europe and in the opposite direction to India. Last month, GBI announced the activation of a new route for its subsea cable network, one that could alter the dynamics of data communication delivery between Asia and Europe. By Shehan Mashood

business interview | technology infrastructure

hmed Mekky has been working in the telecommunications industry for nearly two decades, but his big break came in 2006 when the idea for a neutral entity servicing the growing needs for connectivity in the region was born. Seated in the lavish modern surroundings of the Gulf Bridge International (GBI) offices at Qatar Science and Technology Park (QSTP), Mekky explains that while working in the industry he identified a gap in the market. A need for an infrastructure that was owned by the region, for the region, to provide the kind of critical infrastructure and capacity that it required. GBI is the first privately-owned subsea cable system, linking all the Gulf countries together in what is known as a self-healing ring, which is esentially, pairs of cables laid between landing sites, enabling the information to flow both ways, and negating redundancy, and extends eastwards towards Mumbai, India and westwards to Europe. “It was a dream, and now it is a reality,” says Mekky.

A privately owned model

Subsea cable companies have traditionally been the product of a consortium of telecom operators who would join together to build the cable infrastructure, serving their needs for connectivity. And if it did happen to be privately owned by a single investor, in most cases it would be a single telecom operator, explains Mekky, one that leads the drive and manages to convince a few of their competitors in other countries to get the landing rights and connect to the cable. In return for an advance commitment and payment, the cable builder sells capacity on the pipeline to the other telecom operators. Mekky, however, wanted to offer better prices and better quality, and that was where it started. He wanted to develop a network that was truly neutral in identity. “We wanted this cable to be the cable of all the operators, not of any specific operator,” says Mekky. This meant that operators had control over what sort of access they enjoyed on the network and not be beholden to any of their competitors. “This was music to the ears of regulatory authorities because it gives fair access to all the operators in the region,” he says rather excitedly, hoping that their infrastructure will be what the region depends on in the coming years.

Raising capital

The first challenge Mekky faced was raising the capital for his idea. It started with Qatar Foundation, he explains, their commitment and support for the idea in its infancy was what helped GBI. Later they reached out to both local and international financing firms for advice, who then assisted them in drafting a private placement memorandum that would help them raise the initial capital. They were very selective with their potential investors, says Mekky, requiring investors that could not only put up the money but also help maintain the neutral identity of the company and add value now and for the future. It would have been much easier to raise the necessary funds without their added criteria, “but we weren’t thinking this way. We wanted to think about who is going to invest before how much they are going to invest,” he adds. Today the company’s investors include the Qatar Investment Authority and the Kuwait Investment Authority. “We have all the flags of the Gulf Cooperation Council (GCC) on the board of GBI,” Mekky says proudly. “This is one of the things that really makes GBI unique, for this is the first time these firms have cooperated

We wanted this cable to be the cable of all the operators, not of any specific operator.” 52 | The Edge

ys er la pond , Res mirates. ip h E Is e GB Arab as th nited ok on in the U lo s er ch Workirah bea Fuja

â&#x20AC;&#x153;What was limiting the growth of usage in the region was a high demand but limited availability, [but] the pipe is now open.â&#x20AC;?

sub s

les acab

o ut fr

ing o

lead

business interview | technology infrastructure

together on a big project like this,” suggesting it as a model to be repeated in future projects in different sectors.

Technical challenges

Raising the necessary financing was only Mekky’s first hurdle, there were a lot of technical challenges in implementing the subsea cable system, he admits. “The shallow waters of the Gulf, the number of pipelines that we needed to cross, we needed to have a crossing agreement with every owner of every pipeline. Also, getting the landing rights (for the cabling to be received onshore) in all of these countries, too, required permits and authorisations.” But his biggest challenge, he points out, was the lack of a unified approach to dealing with the permissions different regions required. Every country had its own system and regulations that they had to respect. This meant managing the requirements individually. “This is why,” he continues, “managing to deliver this network in less than three years’ time is something unheard of in the industry, with all of these challenges. It normally takes at least double the amount of time to deploy a network like this considering all that I have mentioned, plus the changes to the political map over the last few years, as well as the financial crunch, which the whole world has been suffering from.” Delivering this network in less than three years is a miracle in itself, he furthers.

100GbE

The highest capacity of the fibre optic network provided by GBI. They are also the first in the world to deploy this technology.

The new North Route, announced by GBI in March will carry a lot of traffic between Europe and Asia. Pictured is the entire GBI cable network.

54 | The Edge

technology infrastructure | business interview

“Previously, if there was a cable cut in the Mediterranean, then none of the traffic could get to the Gulf, or if a cable was cut in the Indian Ocean it would not be able to get to the Gulf.” Adapting to trends

The rate of data transfer in the Middle East is seeing exponential increases every year, Mekky says it is roughly doubling nearly every year. Considering the demand, his vision for the company was to commit to implementing the latest technology in the region to be able to handle the rising volume of data traffic. Having various GCC countries represented on the board of GBI assured that this mandate was carried out, since it could have a positive impact on their economies. When GBI first started implementing their technology, what was available was the 10 GbE connection, says Mekky, but they built the network to be scalable for any new technology that may come around. “We were the first to deploy the 40 GbE technology in the region and we are the first in the world to deploy the 100 GbE technology,” he furthers. (GbE, or gigabit ethernet, is a unit of capacity that can travel through fibre optic cables.) With the new advances implemented, the company can now offer a capacity that had never been available before, Mekky points out, and since GBI has linked all the countries in the region, they can enjoy the growth of demand with no limit to availability of capacity or access. “What was limiting the growth of usage in the region was a high demand but the availability was limited, with this the pipe is open,” he says.

Expanding the network

The GBI subsea cables land in all of the countries around the Gulf, and are designed in a loop to provide the ‘self-healing ring’ in the event of any cable cuts or if a part of the cable is damaged. The traffic would ‘self-heal’ by being rerouted to other directions until the ship comes and fixes it, says Mekky. Their network also stretches eastwards to India, with a landing site in Mumbai and westward, a connection that goes around the Arabian Peninsula into the Red Sea and the Mediterranean to land in Italy connecting it to Europe. Mekky goes on to say that while not in their initial plans, as part of their mandate to provide both the best technology and access, they extended their network into Europe. All the subsea cables for this route were laid out by GBI, and the terrestrial part of the route was completed by acquiring cables as opposed to latching onto other networks in Europe. This allows them to offer clients endto-end connectivity without going on to other networks. “If the destinations are beyond this [their current network], we are also able to secure for our client, through partnerships with other operators to provide our client end-to-end connectivity,” he explains. GBI’s advancement into Europe is only the beginning, according to Mekky, “There are other areas of expansion that we are looking at,” he says as he leans forward from his seat to reveal the company’s latest triumph. In March 2013,

GBI announced the new route that Mekky claims will change the dynamics of the telecom market of the region. The new route is a connection between Asia and Europe that travels from the Middle East to Iraq through to Turkey and then all the way to Frankfurt. “With a diversity of loops, this will create a beautiful network because this is the first in history that has this kind of access, this kind of diversity all over the region,” he says animatedly. Thanks to securing agreements with all of the partners here and the authorities in Iraq and Turkey, there is a lot of demand for this route, he confirms, since the latency is much less because the distance is shorter. “I am calling it the silk route,” he says, “it will carry a lot of traffic between Asia and Europe, and vice versa.” The company’s network is not only advantageous to the Middle East but also Indian operators who wish to access Europe. Mekky reveals that GBI had signed commercial deals with customers before the route was even completed because they understood the importance and value of the route. Another major advantage the new GBI route offers the Middle East is protection against Internet disruptions, like the one experienced in 2008 when undersea cables were damaged. “One of the things,” explains Mekky, “was that if there was a cable cut in the Mediterranean, then none of the traffic could get to the Gulf, or if a cable was cut in the Indian Ocean, it would not be able to get to the Gulf.” With the recently announced route, the Gulf is no longer at risk of being isolated and operators in Qatar, Kuwait and other countries around the Gulf today have the luxury of diversity. When asked what he sees in the future for GBI, Mekky adds that in conversations within the organisation, they have agreed that what has been accomplished so far is not the end. “This is the start of the journey actually,” he says. The Edge | 55

Insurance in

QATAR and the MENA region Challenging global trends 56 | The Edge

financial services | feature story

In March, Qatar Financial Centre (QFC) hosted the seventh annual MultaQa insurance conference in Doha. The event was the backdrop for the release of a report entitled the MENA Insurance Barometer, commissioned by the QFC. The Edge spoke with Dr. Kai Uwe Schanz, the author of the report about the prospects of domestic and regional insurance for the next 12 months. By Shehan Mashood

he Middle East and North Africa (MENA) as a region has an exceptionally low rate of insurance penetration, which according to the recently compiled report, is at one fifth of the global average. Dr. Schanz reveals the reasons for this are a mixture of cultural and institutional factors, especially when it comes to life insurance. Institutional reasons for lower penetration, Dr. Schanz points out, are when governments adopt lifelong protection for their citizens, offering that Qatar is certainly a prime example of this. Under such conditions there is little incentive for ordinary people to take out insurance and to provide for unforeseen circumstances. Citing China as a parallel, Dr. Schanz points out that while China is today one of the fastest growing insurance markets, 10 years ago healthcare and pensions were all covered by the government. “This has changed,” he explains, “and the government has placed more responsibility on the individuals and the corporations to take out their own provisions.” According to Dr. Schanz, whilst the MENA region has seen insurance penetration steadily increase over the past five years, it is still extraordinarily low compared to other regions in the world with similar income levels. The region contributes to five percent of global gross domestic production, but only shares one percent of the insurance market. While it is unclear how soon governments in the region will move towards placing more responsibility on the individuals, the outlook for the market is a positive one. This is mainly driven by the economic growth being experienced, and is expected to power growth in the market. Nonlife premiums in the MENA region amounted to over US$40 billion (QR145.6 billion) and a majority in the market, while life premiums shared less than 16 percent of the total insurance market.

Takaful

The emergence of takaful (shari’ah-compliant insurance), and family takaful insurance might be one way of promoting insurance in the region, says Dr. Schanz. However, according to the MENA Insurance Barometer, the growth prospects of takaful insurance have seen a significant downward revision from last year. One of the technical reasons, offers Dr. Schanz, might be that this year’s report covers the MENA region while past reports have only covered the GCC. So it could be that industry executives outside the Gulf are much less optimistic about takaful. What lies behind the scepticism, he says, is the failure of many institutions that offer takaful to define a distinct business model and differentiate themselves from conventional insurance bodies. In addition to this, there are also internal factors within the takaful firms. According to Dr. Schanz, in the process of conducting interviews for the report, certain executives noted that they know how to share profits but they do not know how to share losses. The concept of takaful is based on sharing both profits and losses collectively. Many companies lack a clear profile, adds Dr. Schanz, and this makes it tough to promote the concept. “But, according to many respondents, if this is tackled they would see a brighter long-term future for takaful,” he says. “The

Dr. Kai Uwe Schanz, the author of the MENA Insurance Barometer, discusses its finer points exclusively with The Edge.

“Qatar’s income level is above the global average, but insurance penetration is that of a poor subSaharan African country.” The Edge | 57

feature story | financial services

report has asked for the next 12 months. That’s a very important point to make but again conceptually, the biggest challenge is to try and address these cultural reservations vis-àvis the concept of insurance.”

Foreign competition

The MENA Insurance Barometer shows that foreign competition is still a concern, with half of respondents saying foreign insurers are likely to gain market share. Their financial strength ratings on average are better than those of local companies, says Dr. Schanz, “If you believe in financial strength ratings, that would be a reason to favour foreign providers. When you look at global giants like Generali [worldwide], Allianz or AIG, they have something to offer in terms of products, distribution and technical expertise,” he says. One of the obvious reasons they are likely to garner market share is the high number of expatriates, as it is very natural for them to prefer brands from their home country, points out Dr. Schanz. However, he notes that while there is going to be an increase in foreign market share, not one executive interviewed suggested they would expect a sudden increase. A gradual increase is what is likely to occur, which gives domestic insurers time to adjust and develop expertise and products.

Regulation

The influx of foreign companies and the increase in local insurers were cited as some of the major deficiencies in the region’s insurance markets, since it has led to excessive levels of competition. With numerous poorly-capitalised insurance companies operating in the market, the survey shows that these participants could jeopardise overall market stability. Therefore regulatory authorities trying to bring consistency to the market are likely to push up capital requirements, and by doing so promote consolidation amongst the smaller entities, explains Dr. Schanz. The other aspect brought up while compiling the report, he says, concerns investment regulations. The investment profiles of domestic insurance companies are relatively aggressive when compared to other countries around the world. They invest heavily in equities and real estate, he states, which at the end of the day is designed to back up their claims. (See box out)

Growth opportunities

The low insurance penetration is seen as an opportunity in the market. Qatar is a particularly striking example of this, Dr. Schanz says, the insurance penetration at 0.6 percent is just below half the MENA average, while the global average is around seven percent. “Qatar’s income level is above the global average, [but] the insurance penetration is that of a poor sub-Saharan African country,” he says. It is worthwhile noting that in a US$4.5 trillion (QR16.38 trillion) insurance industry, almost 60 percent is from life insurance premiums, furthers Dr. Schanz, and that is what is driving insurance penetration in most countries. Growth opportunities, at least for the immediate future in the MENA region, are likely to be driven on the non-life side, by health and personal lines of business such as home owners, adds Dr. Schnanz optimistically. Indeed, he closes, as Qatar continues on its large-scale spending on infrastructure projects, the growth prospects of the insurance sector here seem increasingly positive.

Low MENA insurance penetration is seen as an opportunity in the market.

16.4

Life Non life

58 | The Edge

trillion, the size of the insurance industry worldwide, almost 60 percent is from life insurance premiums, a line of insurance that is weak in the MENA region.

financial services | feature story

Global insurance sector regulatory developments

Since October 2011, there has been substantial change in the global regulatory requirements affecting insurers. The new suite of International Association of Insurance Supervisors (IAIS) solvency standards requires supervisory regimes worldwide to establish risk-based solvency requirements. These standards reflect a total balance sheet approach on an economic basis, which address all reasonably foreseeable and relevant material risks. For many jurisdictions and insurers, this will herald a new paradigm. As an example, the new IAIS standard on capital adequacy begins bringing international capital adequacy standards together. The standard requires all solvency regimes to establish regulatory capital requirements at a level sufficient to ensure that in adversity, an insurerâ&#x20AC;&#x2122;s obligations to policyholders will continue to be met as they fall due. It requires that insurers maintain capital resources to meet the regulatory capital requirements. The standard also introduces solvency control levels that are designed to trigger different degrees of intervention by supervisors. Significantly, the IAIS standard now requires all jurisdictions to set out appropriate target criteria for the calculation of regulatory capital requirements that underly the calibration of a standardised approach. This means that major insurance markets such as the United States and Japan are now moving to define such levels. Insurers will need to demonstrate that they have adequate financial resources, such as own funds (capital), technical provisions and the methods for calculating the Solvency Capital Requirement (SCR) and the Minimum Capital Requirement (MCR). The most significant is the SCR which aims to be set at a level where eligible own funds will enable insurers to absorb losses to a confidence level of 99.5 percent over one year. Many other markets including Australia, Bermuda, Canada, Singapore and South Africa, have either now introduced or are in the process of moving to adopt a similar approach. Regulators are also increasingly turning their attention to the quality of capital available to meet insurance liabilities and other commitments. Notwithstanding, risk-based capital regimes differ greatly between countries. When setting an insurerâ&#x20AC;&#x2122;s solvency capital requirements, riskbased capital regimes typically measure asset risk, insurance risk, and business risk. Recently, many risk-based capital regimes have increased the scope of risks considered when setting capital to include credit risk, market risk and operational risks.

Another major development is that the IAIS capital adequacy standard includes general provisions on the use of an internal model to determine regulatory capital requirements (where this is allowed by the supervisor). This is a major step forward worldwide in the supervisory arena. Further, insurers will need to validate their internal models by subjecting them to a statistical quality test, a calibration test and a use test. In addition to these capital requirements, many regulatory frameworks are beginning to include an enhanced Enterprise Risk Management (ERM) framework. Of all the new IAIS standards, ERM is the most significant. The standard now requires supervisors to seek high standards of risk management and governance from insurers and, critically, supervisors are being encouraged to challenge the insurers they regulate on risk management issues. In particular, the IAIS standard requires an Own Risk and Solvency Assessment (ORSA) under which an insurer undertakes its own forward-looking self-assessment of its risks, corresponding capital requirements and adequacy of capital resources under a sufficiently wide range of outcomes, using techniques that are appropriate to the nature, scale and complexity of the risks the insurer bears and adequate for risk and capital management for solvency purposes. The insurerâ&#x20AC;&#x2122;s measurement of risk will need to be supported by accurate documentation providing appropriately detailed descriptions and explanations of the risks covered, the measurement approaches used and the key assumptions made. The development of the risk-based capital remains an issue in Qatar, and insurance companies would need to assess the impact at an early stage. The Qatar Central Bank and the Qatar Financial Centre Regulatory Authority (QFCRA) will be working together to develop the insurance regulatory regime. Yacoub Hobeika is a partner in accounting advisory services and insurance services for KPMG in Qatar. Prior to joining KPMG, he was the CFO of International Insurance Company in Saudi Arabia. The information contained in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.

Abdulrahman Ahmad Al Shaibi, board member and managing director of QFCA speaks at the MultaQa insurance conference in Doha in March.

The Edge | 59

AT WHAT

COST? Measuring the price of Qatarâ&#x20AC;&#x2122;s high road accident rate by Mayssa Nehlawi and The Edge

cover story | road safety

As Qatar faces up the price of its high road accident, injury and death rates, some of the highest in the world, on its increasingly dangerous roads, the cost to the country both in terms of riyals – and on the population’s psyche – is clearly mounting, prompting the authorities to take unprecedented action. (Image Brian Candy)

n slightly more than a decade, Qatar’s rate of traffic accidents and resulting injuries and deaths have increased by 160 percent and as reported in a recent study by Qatar University, Qatar Traffic Department, and the Qatar Statistics Authority (2012), the country now has the dubious distinction of the highest global rate of road accident fatalities. Predictions for 2015 are even more worrisome, as traffic accidents in the country are expected to reach 220,000, with one out of five cars destined to be involved in a car accident each subsequent year. The cost to the country, of course, is obvious and enormous. But what is less known is that on a macro and statistical basis, road accident, and injury and fatality rates are empirically linked to growth in a country’s gross domestic product (GDP) level. This comes as no surprise to experts and academics in related fields, as this phenomenon is linked to Smeed’s Law. Briton R. J. Smeed was a forerunner of modern road accident research, who in the late 1940s came up with a formula to estimate or predict road fatalities by linking the population and registered vehicles in a country. Broadly, Smeed’s hypothesis also postulates that as a country becomes wealthier, traffic accidents increase to a certain level, after which they become a national concern and are dealt with by the country, leading to their decline. Is Qatar at Smeed’s road safety tipping point?

62 | The Edge

As transportation safety is an important foundation to achieve sustainable human development, the state has accorded it top priority.” – Brigadier Mohammed Abdullah Al Malki, secretary of Qatar’s National Committee for Traffic Safety.

road safety | cover story

Clearly there is a huge problem here, which the authorities are taking unprecedented steps to overcome, but may take many years if not more than a decade to overcome. However, with the launch of the Qatar National Traffic Strategy in early 2013 in conjunction with GCC Traffic Week, and the recent launch of a fleet of 44 Al Fazaa highway patrol vehicles, Qatar is obviously taking measures towards protecting lives, lowering costs, and raising awareness of the problem of road safety. But what many feel also needs to be looked at in greater detail is the design of the road system (with special regard to pedestrian safety), uniformity of cultural sensitisation of the driving population and coordinated data mining to help arrive at the costs to GDP that road accidents cause, apart from the loss of life. Are the state’s current efforts paying off? What is the future vision? These are some of the pressing questions. Indeed, the issue in the country is also unique in many ways, making dealing with the issue a major challenge on many fronts and incomparable to other nations, except perhaps some Gulf states such as Kuwait or the UAE. Generally, traffic problems in Qatar can be attributed to the remarkable increase in number of cars in recent years, the inability of the current road system to accommodate the country’s growth, with virtually no pedestrianfriendly roads, perhaps more than 100 nationalities driving here, many of whom often do not understand road signs in Arabic or English, and to put it diplomatically, have mismatched driving skills at best, along with extremely reckless driving by a minority. Driving instruction, too, has been highlighted as an area for improvement. “A whole lot of the driving behaviour that we encounter here has to do with cultural factors,” says Katmerka Kurtovic, business development manager, simulator systems, Williams Advanced Engineering, Qatar, to The Edge (see simulated driving box out). “On the difference between right and left-hand drive, between what is considered okay driving behaviour and what is non-negotiable...it is during the road practice that these cultural sensibilities need to be handled through, for which even the instructors need to be sensitised.” Exacerbating the problem is the fact that owning a car in Qatar is affordable for almost everyone, especially with the relatively low governmental fees on cars, low cost of fuel, lucrative car loans, and that many employers offer interest-free car loans as perks.

With highest global rate of road accident fatalities, is Qatar at a road safety tipping point? Clearly there is a huge problem here, which the authorities are taking unprecedented steps to overcome.

160%

The percentage of increase in traffic accidents in Qatar from 2000 to 2010.

In March 2013 the State of Qatar launched its National Traffic Strategy 2013 to 2022, with national dignitaries, including secretary of the National Committee for Traffic Safety Brigadier Mohammed Abdullah Al Malki and president of road building authority Ashghal, Engineer Nasser Ali Al Mawlawi present.

The Edge | 63

cover story | road safety

People who value expensive cars can easily find their desired vehicle – which are often in the several luxury car galleries in Doha. Expatriates can also enjoy driving a car at lower cost than in their country of origin. Over the past decade, this contributed to the huge increase in the number of registered cars in Qatar, by 5.5 percent annually, which according the Qatar Statistics Authority was 814,373 in 2011, placing it around one million currently, based on the same growth trend. Moreover, many roads in Qatar were designed some decades ago to accommodate a far lower number of cars. This has meant that the road system clearly cannot manage the rapid growth of the country. Adding to the congestion, construction sites abound and heavy construction machineries are often found on the roads, blocking traffic and causing onerous jams – as do ubiquitous road works, which can be haphazardly signposted and poorly coordinated.

The effect of road accidents to Qatar’s GDP could well be in excess of QR 10 billion annually, based on the formula used to determine WHO global estimates of road accident costs to international GDP.

220,000

The number of predicted car accidents annually in Qatar by 2015. The need for speed: driving far in excess of the speed limit remains the number one cause of traffic accidents in Qatar, followed by talking on mobile phones and eating while driving.

64 | The Edge

Economic Impact

Professor Abdulbari Bener is a senior consultant and head of the department of epidemiology and medical statistics at Hamad Medical Corporation (HMC). A consultant to the World Health Organization (WHO), Bener is arguably one of Qatar’s preeminent scholars in the field of road accident research. A study conducted by Bener and colleagues, on road traffic crashes and injuries in Qatar as reported by drivers, published in 2012 in the Journal of Egyptian Public Health (which had a sample size of 1762 drivers selected randomly among patients registered for daily visits), showed that young drivers in the age group of 25-34 years had the highest prevalence of road traffic injuries (RTIs) in Qatar. Bener’s research revealed that driving too fast remains the major cause of casualties in Qatar despite a slight decrease in the number of fatalities. But his study also showed that human behavioural factors including the use of cell phones, eating and drinking and traffic violations represented some of the main causes of RTIs, and as do reckless driving practices such as texting while driving. Bener also stressed that the numbers revealed by the authorities may not be wholly accurate as when compiling the study, “there was absence of coordinated data mining whereby the police have a certain segment of the data,” he states, “which pertains to the cause of an accident, but when it comes to the fatality figure, there is no central data bank, with HMC classifying any death beyond a certain period after an accident as a natural death.” According to Bener, there are four factors that go to make up the cost to GDP that road accidents cause. “Rehabilitation costs (whereby many Qatari nationals are sent on state costs for rehabilitation to either Europe or the US), family dislocation, productivity loss and trauma go to make up the components while compiling the actual cost to GDP,” he says, adding “though, in the absence of any

road safety | cover story

Professor Abdulbari Bener is a senior consultant and head of department of epidemiology and medical statistics at Hamad Medical Corporation and is arguably one of the country’s top experts on traffic safety. According to Bener, there are four factors that go to make up the cost to GDP that road accidents cause. “Rehabilitation costs (whereby many Qatari nationals are sent on State costs for rehabilitation to either Europe or the US), family dislocation, productivity loss and trauma,” he tells The Edge.

figures that go to make up these components, it is difficult to estimate a firm figure.” In Bener’s opinion, with healthcare insurance still not compulsory for Qatari nationals, the expenses on road accident cases are expended out of the health budget, again an instance where coming up with a cost to the state exchequer is virtually impossible. Nevertheless, basing Qatar’s approximate figures on the same formula used to determine WHO global estimates of road accident costs to international GDP, this figure could well be in excess of QR10 billion annually.

Roadworks in progress

As mentioned, the government is ostensibly working hard to overcome traffic problems in Qatar. State officials are issuing laws, setting strategies and masterplans, hosting conferences, and launching awareness programmes. For instance, Qatar’s Traffic Department sponsored a conference on road safety in 2012 with the motto of ‘Driving towards a safer future’, published a traffic magazine, launched awareness offices, and inaugurated traffic investigation sections in various places in the country. But this of course does not simply apply to creating laws, policing them and punishing offenders, as the road system itself is undoubtedly a contributing factor. Commenting on road design and its role in averting accidents, Rupert Booth, associate director at Atkins, a leading global engineering and project management consultancy involved in road construction in Qatar, told The Edge. “An effective, well-designed and efficiently managed road network

Qatari Law: Penalties in Traffic Act

The Traffic Act provides a point structure for traffic offences. Serious breaches such as running a red light or driving the wrong way around a roundabout and driving while under the influence of alcohol or drugs attract seven or six points, respectively, whereas lesser offences such as creating an obstruction and driving a motor vehicle emitting noxious odours or driving with only one plate attract three points or one point, respectively. Depending on the number of points a driver collects, he or she may have his or her licence revoked. Revocation is determined on a sliding scale dependant on the number of points a driver collects and how many times he or she has reached that number of points. For example, when a driver collects 14 points for the first time his licence should be revoked for a period of three months, which escalates up to revocation for one year when a driver collects eight points for the fourth time. Where a driver collects six points for the fifth time, his or her licence will be suspended indefinitely until such time as he or she has once again complied with all the licence requirements set out in the Traffic Law, subject always to a minimum revocation period of 12 months. (Information courtesy Emma Higham, Clyde & Co. LLP Qatar) Note: Qatari Laws (save for those issued by the Qatar Financial Centre to regulate internal business) are issued in Arabic and there are no official translations for the purpose of drafting this article, Clyde & Co has used their own translations, and interpreted in the context of Qatari regulation and current market practice.

The Edge | 65

cover story | road safety

is a key part of a nation’s multi-modal transport mix, and this has been recognised here in Qatar. The continual development of the road network over the next decade is an essential component not only for delivering a successful FIFA 2022 event but also for the quality of life in Qatar for generations to come.” Qatar has also set a national traffic strategy and a transport masterplan in addition to hosting an Intelligent Transport Systems (ITS) and Road Safety Forum. Currently, these are serving as roadmaps for traffic management in Qatar. At the third annual road planning, design and construction Middle East forum held in Doha in February 2013, Engineer Mohammed Serroukh, director general of ITS Arab told The Edge that within the region ITS, which he encourages states to invest in, is now widely recognised and is included in most transport studies and masterplans. Two advantages that Serroukh highlights are the real-time traffic monitoring system, which allows the responsible road authorities to accurately identify and measure traffic flows and congested bottlenecks; and the adaptive traffic control which allows all the networked signalised junctions to automatically respond to the traffic flows. This is generally underestimated, he said, adding, “It is a proven technology that is about 30 years old that has been demonstrated to provide from 15 percent to 30 percent road network efficiency.”

A National Traffic Strategy

Building on Qatar’s National Vision 2030 and the National Development Strategy 2011-2016, a National Traffic Strategy 2013-2022 was launched in early 2013. Aiming at reducing the number of traffic victims, enhancing traffic management, and enforcing safety measures, this strategy focuses

“Rehabilitation costs…family dislocation, productivity loss and trauma, make up the components of compiling the actual cost to GDP.” - Prof Abdulbari Bener, HMC. 66 | The Edge

road safety | cover story

on five dimensions: road safety, vehicle safety, pedestrians’ facilities, awareness building, in addition to refining license and legislation issues. Commenting to The Edge on the launch of the National Traffic Safety Strategy, road safety consultant John Kipling, currently transport and fleet management specialist, RasGas, says, “It is clear the government is well aware of all the problems, and is adopting a systematic approach to encompass all aspects of road safety, whether in road design, education, technology, research, enforcement and medical treatment, treating each problem not individually, but as a ‘whole’, examining the impact of one against the other.” However Kipling, formerly a traffic officer and accident investigator in the United Kingdom, warns against creating large initiatives that might not solve the root causes of the problems, as cars, after all, are driven by people and it is their behaviour that ultimately results in collisions. “Throwing money at a problem is not the answer,” says Kipling, “and Qatar appears to spend wisely, consulting world leaders in road safety, yet adopting ‘best practice’ to suit the needs of the people of Qatar, rather than buy in a one size fits all model.” It is also important, adds Kipling, for both companies and the people to contribute to the solution and not just rely on the state, forwarding some examples. “Whilst companies like RasGas, Qatargas, Shell and Exxon Mobile, provide luxury ‘mass transport’, driven by professional drivers, showcasing an efficient method of safe transport, at the same time reducing individual journeys, there is an argument for government intervention in further promoting the business example and perhaps expand public transport competition, to provide a better public service. “The public at large also has a huge responsibility to keep the roads safe,” he adds, “and as long as we see unrestrained children leaping around in the backseats of vehicles, young, testosterone fuelled boy racers acting with impunity, and some police officers failing to enforce the law defeats the object of the exercise. A problem money can’t fix.” Qatar’s National Traffic Strategy will be implemented through 200 action plans during the next five years, with the involvement of 13 different agencies. President of Ashghal, Engineer Nasser Ali Al Mawlawi, translated the aim of the strategy into numbers saying, “By implementing

this National Strategy for Traffic Safety, our aim is to reduce the death rate due to traffic accidents to 130 from the present number of 220 and cases of serious injuries to the rate of 300 compared to the present rate of 550 injuries per year.” The government of Qatar is providing all the necessary means to address traffic problems. Not only this, efforts have gone beyond the decision to host the 2022 World Cup; a complete ITS will be in place before the FIFA begins. It will provide accurate and user-friendly information about the traffic flow in all roads and highways across the country. Football fans attending the FIFA games will be able to access realtime information on a traffic situation by browsing an interactive map on the organising committee’s website. For all individuals, business owners and the state itself, it is of course hoped that the strategy is successful and the final outcome of Smeed’s decades-old law will be eventually become a reality in Qatar in the near future.

SIMULATED DRIVING: Experiencing the Corniche at QSTP with 3D Doha. By Aparajita Mukherjee Driving on the Doha Corniche at Qatar Science and Technology Park (QSTP). It sounds odd, I know, but that is exactly the “reality” of my virtual experience of driving on a 14-km long stretch of the Doha Corniche on a simulator of a Land Rover Evoque at the Simulation Systems, Williams Technology Centre, Qatar. The high-fidelity screen has packed in all the details of buildings, landmarks, roundabouts, signals, even the gradient of the roads. The last bit is what surprised me the most and being a regular driver on these roads, I know the ups and downs of the road, say on the side that leads to the Emiri Diwan from Souq Waqif – the simulation has THAT gradient built into it, exactly as it is. While driving the simulator, I did feel that it would be a very welcome addition to the driving schools’ training module. While in the beginning, I did swerve a bit (primarily because I am not used to driving such a powerful vehicle), but as I drove beyond the first three to five minutes, I steadied myself on the steering. From then on, it was a smooth ride for the entire 10 remaining minutes and with all the landmarks intact on the 3D Doha, I really felt I was indeed driving on the road. The experience was realistic to the point where I had some vehicles alongside which decided to overtake me without an indicator, something that is a regular occurrence on the roads of Doha. On the whole, the ride did not feel like a simulation (it was that real), but on finishing my ride, I did experience motion sickness for a while and needed a hot cup of tea before leaving QSTP and driving on Doha’s actual roads once again. “It is our understanding of technology that takes to increase training efficiency in a simulator in addition to high degree of immersion (which in effect means the closest that the simulation can get to reality) that the driver feels,” Max Renault, programme leader, simulation systems, Williams Technology Centre, Qatar told The Edge. “Of the 50-hour training module that has 15 theoretical hours for would-be drivers, and 35 on the road, we are recommending a 10-hour slot of the 35 to be on a simulator, which will enhance the awareness of environmental efficiency and cost efficiency of drivers, in addition to helping drivers drive safer.”

Also known as ‘3D Doha’ The Edge puts the Simulation Systems, Williams Technology Centre at QSTP to the test, in a virtual experience of driving on a 14-km long stretch of the Doha Corniche in a Land Rover Evoque.

The Edge | 67

future financial sector

Educating Qatarâ&#x20AC;&#x2122;s

financial education | business interview

Dr. Abdulazziz Al Horr, who was appointed as the CEO of the Qatar Finance and Business Academy (QFBA) last year, speaks with The Edge about the need to educate future generations in order to be able to manage and grow the wealth of Qatar, and how the programmes they have designed can help in this regard.

Could you tell us why the QFBA was formed?

QFBA is the education arm for Qatar Financial Centre Authority (QFCA). Qatar is now promoting itself as a financial hub to attract international banks, insurance companies, asset managers, and wealth managers to come and operate in this country. For the international organisations and companies to come into Qatar, they have certain necessities. They require a proper training and education institute, it is one of the most important factors that international banks and financial organisations consider when they come to operate in any area. Therefore QFCA in 2009, shortly after establishing themselves in 2005, decided to form the QFBA. But i want to make it clear that QFBA was not set up just to serve banks and companies that report or belong to QFCA. We cater for the entire financial industry, starting from banks to capital management companies; we cover all of these areas.

What did you do before you joined the QFBA?

I started my career in human development as an education professor at Qatar University, I then took a director position at the Arab Education and Leadership Center, I was also a director at Al Jazeera Media Training Center, and then got offered the opportunity of leading Qatar Finance and Business Academy as its CEO. As you see, most of my life has been dedicated to education and training. For the past 17 years, I have been involved in education in terms

“Sometimes we even offer weekend programmes, we are very flexible, utilising every way possible to encourage people to learn and develop.”

of research, teaching and training for higher level education and public education, specialising in three main sectors – media, finance and business.

How did you get involved in education?

My discipline is in education. I got my PhD and my master’s degree in education, I taught at Qatar University, and later became a certified professional trainer specialised in areas of strategic planning and leadership. So far I have written for more than 25 publications tackling subjects related to education, leadership, strategic planning, creativity and other areas.

Did you know you wanted to follow a career path of education early on in life?

Yes indeed, my goals were very clear in my mind, even when I was pursuing my higher education, I recall, for a newspaper interview, I was asked about what career I chose to specialise in, and my answer was at that time; to specialise in education and development for a promising future is what I wanted to do and this is how I envisioned my future. I still have the piece from that interview. So yes, it was very clear, in fact it was crystal clear in my mind that this was the path I wanted to go with.

You mentioned that you operate under the auspices of the QFCA, can you tell us more about that?

Sure, as I mentioned, you cannot have a financial centre without a proper training and development arm. You cannot have a distinguished financial sector without a focus on education and training. Training is not restricted to starters, but even for professionals. The certifications we offer with our programmes cover the A’s to Z’s of the industry. Establishing QFBA under QFCA was one of our unique selling points, besides the advantage of the economic boom, and the investment in the infrastructure happening in the country, QFBA is an added value for international firms to come and operate from Qatar.

You also work with organisations to develop courses based on their specific needs, could you talk about that? Some organisations have their own mechanisms of conducting the needs assessment. They give us what they want and we design our service accordingly. Other organisations ask for help to identify and

The Edge | 69

business interview | financial education

survey the needs of their employees. This is when we help them come up with a comprehensive training and development plan. So we cover both needs. However, there are also firms and banks that are small or medium sized. They donâ&#x20AC;&#x2122;t have many employees or the volume to go for a custom tailor-made programme, this is when our open calendar and public offerings programmes come into the picture.

Do you also work with individuals to develop plans based on their needs or is it only with organisations?

As I mentioned before, we open our doors for all, individuals are mainly interested in certifications. Individuals usually do not invest in isolated courses; they pay and invest in themselves more when it comes to acquiring a globally recognised certification. Nevertheless professionals are in some cases uncertain which certificate suits their needs, or is the right one for them to develop in their field. In other cases, they are unaware of what is required from them; we help them by understanding how they envision themselves in the future and understanding where they stand, and then we assign the certification that would help them get there.

The programmes you offer seem to be quite short and intensive, why is that so?

We offer courses that run up to six months, two months, two weeks, five days, that all depends on the course or certificate of the clients. Yes, for some clients we offer very condensed intensive programmes because they run on tight schedules, and others cannot be released from their job duties for a long time. For this reason, we sometimes intensify our programmes, and in other cases we schedule afternoon programmes for those who cannot leave their job even for short durations. I also want to highlight the fact that we even offer weekend programmes, especially for certifications because most of those who are coming for certification run on a busy schedule. They would like to acquire these certificates and we are very flexible, utilising every way possible to encourage people to learn and develop.

You mentioned business professionals, but whom else are these programmes targeted at? We have programmes for university students, we have programmes for fresh graduates, programmes for middle career stars, we even offer advanced programmes and certifications for high-level executives who still like to pursue a specific development in a specific course in their specialisation.

You talked about how important providing people with the technical skills is with all the investment coming in, do you see that as a priority more for Qataris, or the country in general?

The Qatar Finance and Business Academy as the education arm of the QFCA is based in QFC Tower 2, under the Qatar Financial Centre Authority.

70 | The Edge

Both generally, and for Qataris specifically, because to leverage on the wealth we have in Qatar, to protect the wealth, and even develop this wealth. You need talent; you need people, not robots. Foreigners help us, but they cannot do the job forever, it is our mission as Qataris and as young skilled talent to build this nation. However, without a proper set of skills, correct knowledge, and a healthy frame of mind, we cannot achieve what we want. Therefore,

financial education | business interview

â&#x20AC;&#x153;Qatar deserves nothing but the best. It is our duty as Qataris on an individual level and the duties of the organisations to develop our human capital.â&#x20AC;?

it is extremely important for the country as a whole, and for Qataris mainly to categorically upgrade themselves neither to be standard nor to be very good, but to excel. Our country, the wealth that we have, with the important roles that we are playing in the financial arena, in the political arena, in the media arena, and in research and development, I believe Qatar deserves nothing but the best. Therefore, it is our duty as Qataris on an individual level and the duties of the organisations on the corporate level to develop our human capital. And I can never stress on this point enough.

Can you talk about some of the courses you offer? And how you developed more programmes?

Actually we cater for the whole financial industry. When we talk about the financial industry banking takes a big chunk of it, whether it is conventional banking or Islamic banking. For conventional banking we cover executive programmes in all areas starting from the front office reaching to back office. As for the Islamic banking sector we also offer a wide range of courses and we are doing it in association and partnership with the Qatar Faculty of Islamic Studies (QFIS). For capital markets, one of our programmes is the CISI certifications. We are working closely with the Qatar Financial Markets Authority (QFMA) too, and we are the exclusive delivery partner for all their certification programmes. As you will notice, it is a wide range of offerings for the financial industry, never to forget the executive education and the management and leadership programmes.

Which programmes have you found to be the most popular?

The banking stream is the most popular and with the rising awareness of the importance of Islamic banking, Islamic banking courses are taking a big share of it. To my surprise, challenging certifications like CFA and CMA are also becoming very popular in the Qatari market.

Can you tell us about the Prometric test centre?

QFBA has partnered with Prometric to become the exclusive test centre and adminstrator for Prometric electronic exams. We will launch our test centre in April. It includes globally certified electronic tests for those studying on their own or studying with any training delivery organisation or partner. Prometric is a trusted test development and delivery provider to more than 400 organisations worldwide.

Does the QFBA have any other mandates?

Under the name Taddreb, we have been mandated by the financial market development committee (FMDC) to develop the competency framework for the whole financial industry, in partnership with the important industry experts, and the regulators. This project will last for 17 months, and we kicked off the project last January. Phase one will end in mid-April 2013, this framework will help upgrade the whole industry, to make people more aware of what they need to know and what they need to learn. It will also help corporations who need to design career paths for their employees to know from where to start and where to end their development journey. It is very important for companies operating in and from Qatar to have a fixed benchmark or standards against the specific requirements for certain positions while recruiting professionals for it. This comprehensive framework will support individuals in the financial services sector, particularly in regard to legislative principles, rules and guidance. Singapore, Hongkong, the UK, and most of the developed financial hubs have such a competency framework. The Edge | 71

e m i T t

n e m e g a n a M

72 | The Edge

What does a manager do most days? If your answer involves going to meetings, revising budgets, and checking and writing emails, you will greatly benefit from reading about one manager at If, a Swedish general insurance company, who changed this work pattern thanks to an experiment conducted in her firm. She revamped her calendar so she could spend more time working directly with employees and as a result overall productivity improved, write the London Business School’s Julian Birkinshaw and Simon Caulkin

t is a frequently observed truism that companies need to become more effective in their management methods. But this does not just mean pushing new ideas from the top – abolishing hierarchy or the budget, crowdsourcing or embracing Web 2.0. Just as interesting, and possibly more feasible, are less ambitious initiatives that concentrate on putting into practice things that we know work but somehow never do – less Management 2.0, more making Management 1.0 work properly. At least on the face of it, a surprising amount can be altered for the better, with little investment and to significant effect. This opens up a new line of enquiry for researchers and practitioners: forget why we are not reinventing the management paradigm from scratch, and start to focus on why we do not put into practice principles of good management that have been known about for years. The classic example is people management. The principles are well documented, but they are frequently ignored in practice. So what would happen if we could find a way of putting some of them into practice in a dedicated way? This was the focus of an experiment carried out recently within the sales and service team at the Stockholm, Sweden offices of the insurance company, If, the biggest non-life insurer in the Nordic countries.

the team’s competence but also raise its level. The design of the experiment was elementary. Take a team – in this case an already high-performing group on If’s customer service side, a team specialising in insurance for individual car brands – and change the way it is managed. Further, the experiment would measure how the team does an identifiable part of its job (crossselling) over a three-week period as a proxy for competence. The team members were unaware they were participating in an experiment, although the manager, Lotta Laitinen, obviously did. The experiment required a deliberate change in management style. Laitinen excused herself from roughly two hours a day of meetings and routine administration (which were handled for the duration by an obliging colleague), time which instead she spent directly working with her group, both jointly and individually. Meanwhile employees were co-opted into the process by being asked to discuss and articulate what would help them to do their jobs better. The process was anchored by an initial three-hour workshop focused on the purpose of the changes, ‘Why cross-sales is good for the company, why it is good for the customer and why it is good for me as an individual?’ Some of the issues raised in the workshop were the traditional responses to calls for better sales performance:

Designing the experiment

Managers should start to focus more on why we do not put into practice principles of good management that have been known about for years.

The starting point for the experiment was the simple proposition that If contained a lot of talent and competence that was not being fully utilised. The idea was to test what many years of research had suggested: that this latent talent could be released by giving employees more freedom, and by freeing up the manager of the group to spend more time on the sales floor coaching and helping them. That is, says Hakan Johansson, one member of the experiment design team, they believed that by acting in a slightly different way and by using intrinsic (rather than extrinsic) motivation, they could not only increase the usage of

The Edge | 73

business management | management efficiency

customer discounts and staff incentives. Beyond that, however, attention switched to “How do we improve? We’re the best at this, after all.” It was not about targets, it was emphasised, but learning how to do it better. As Niclas Ward, another member of the team, observed, “During the brainstorming, somebody said, this person in the group is actually better than the rest of us, so he has to have something to contribute. And they came up with the idea that, let us have him present the way he is working for an hour.” They also brought someone in from the claims unit, who gave his views on how crosssales benefit the customer. “It helped everyone to see how they could improve,” recalls Ward. The result was a two-pronged approach to change. The first had Laitinen spend more time with the group – the brainstorming workshop, an additional health workshop to help the team with such things as exercise and diet, performance appraisals with high performers (to learn their tricks), and also listening to calls and coaching on a one-to-one basis. In the second, employees would listen to and coach each other, with support from the leader. As Ward recalls, “That was the starting point for it, to give more influence to the group. They were learning from each other – so this is not only Laitinen listening to them but they actually listened to each other, and then they gave feedback to their colleague, and then Lotta joined them and gave feedback as well. That’s a quite different way of working.”

Impressive results

After three weeks, the results were measured three ways – by actual performance, through a questionnaire completed by the whole group and by selective interviews. The headline results figure was a five percent increase in sales over the period of the experiment compared with the three previous weeks. The overall figure concealed some unanticipated differences. Notably, there were major improvements among the below-average performers. The questionnaire responses were uniformly positive, team members strongly agreeing that the approach was indeed different, that they had more freedom to work in the way that suited them, that they got more time with the leader and that they felt more motivated. Laitinen’s reaction was also positive, initial hesitancy giving way to strong enthusiasm as the trial went on; and she continued to find fresh ways to work. She was adamant that she missed nothing by not going to the normal meetings she would have attended. “The first week was really stressful because I had to make plans for the three weeks,” she summed up. “But in the middle of the test period, I was satisfied when I went home every day.” Reviewing the experiment, the management group identified a number of unqualified pluses. Across a large organisation (If’s customer service side, alone, is 700 strong), a five percent boost to sales accomplished with little extra resource and a preparation time of weeks was clearly not to be passed up. Having experienced the new approach, none of the sales and service group wanted to go back to the old one. But it also opened up two big questions. First, was the improvement just a byproduct of the way the experiment was 74 | The Edge

designed – and did the team pick up on what was happening and modify their behaviour? Management researchers call this the ‘Hawthorne Effect’ – named after a famous social science experiment in the 1930s at Western Electric’s Hawthorne plant – and are taught to watch out for its contaminating influence. It does indeed seem likely that there was a ‘Hawthorne Effect’ here. But perhaps that was no bad thing. Hawthorne says people respond positively to attention; good management is, in large part, about providing a bit more attention to employees.

The headline results figure was a five percent increase in sales over the period of the experiment, compared with the three previous weeks.

business management | management efficiency

Managing time: Lessons for everyone

The success of the management time experiment gave real impetus to Swedish insurance firm If’s desire to improve the quality of management across its service centres. A survey was subsequently sent out to 1700 frontline employees, and it became clear that there was lots of room for improvement in the quality of coaching provided to workers. Additionally, a careful analysis was done of how 40 first-line managers were spending their time. The real eye-opener was that the average manager was spending 71 percent of his or her time on ‘pull’ activities, that is, doing things others have asked them to do – such as meetings, filling in reports and answering emails. Only 29 percent of the time spent by managers was on manager-driven ‘push’ activities – such as coaching the members of their team or meeting with customers. “These findings have provided a very clear view of the as-is situation in If’s private-line insurance business,” explained Hakan Johansson, one of the brains behind the experiment. “We are now developing specific plans for how to help our frontline managers become more effective coaches, and how to free up some of their time so they do more of the real value-added parts of their job. There is a big pay-off to the company if we can get this right.” There are lessons for everyone here. If you are trying to help your company to improve its management processes, it is easy to get drawn towards exciting new initiatives like crowdsourcing; but the real impact is more likely to come from doing simple and obvious things more effectively. And frontline coaching is about as simple and obvious as it gets: every company needs it, and yet most do it poorly. If you are an ambitious manager, and you are frustrated by the lack of impetus for change coming from above, this experiment shows there are ways you can make progress without permission. The If team got things moving by simply freeing up 10 hours of Lotta Laitinen’s time per week. There are many other, equally simple, changes you can make in how you or your team work. You just need to have the foresight to see what is possible and the tenacity to follow through.

Unlike social scientists, who are trained to keep their distance from the subjects of their investigation, managers actually have a responsibility to intervene, to provoke a change in behaviour through whatever approach works best. The second question was about capitalising on the successful outcomes. Although rewarding, the intense coaching style made different, and greater, demands on team leaders. And, quite apart from the emotional demands, was this kind of ‘admin-lite’, direct management style sustainable and scalable over time? Most of those involved were quick to realise that the viability of this model comes down to a question of management skill and management will. Although Laitinen, an experienced and highly capable manager, came to relish the engagement inherent in the new way of working, she recognised that this manner of working with employees may not be for everyone. It is full-on management and intense: the exposure and commitment to a team of workers requires boldness and a willingness to move out of the usual managerial comfort zone. Forcing managers, many of whom might be happier dealing with numbers behind a desk, to work in this way risks adding a counterproductive responsibility to a manager’s job description. For this approach to work, there needs to be “the recognition from management that this is the way to work, full stop, for the whole day,” noted Ward. “There is, I would say, an enormous underestimation of how Julian Birkinshaw is professor of strategic and international management much these things take on the frontline.” Clearly the will to change established and senior fellow of the Advanced practices and approaches needs to be Institute of Management Research at strong and itself well managed. But it seems London Business School. He is also cofounder of the Management Lab (MLab). the rewards are there for the taking.

Have you got

the edge factor?

As the fastest growing business magazine title in Qatar, The Edge seeks proactive Sales Managers and Executives. Reporting directly to Head of Business Sales, the successful candidates will develop new advertising revenues, build client relationships and help grow The Edge’s exposure in the market. The right applicant will be a tenacious self-starter able to find, develop and close their own business revenue and consistently exceed their sales targets. They will also need to be able to work independently, but also fit within a young and dynamic sales team.

Requirements: • A self-starter with excellent organisational skills preferred • Must be fluent in both written and spoken English • Previous magazine, newswire or newspaper experience is not necessary • Can meet multiple deadlines in a fast-paced environment • Has a passion for business and marketing • Is familiar with the online medium but not necessary as training is provided • Minimum of one-year experience of sales is must • Salary range will depend on experience

Please send your CV to: j.toon@firefly-me.com

The Edge | 75

Inside the minds of leading business figures

business insight Optimism on trade talks by weaving in flexibility>78 The Edge spoke exclusively with Remy Rowhani, director general of Qatar Chamber of Commerce and Industry, on what to expect from the eighth World Chambers Congress being held in Doha this month.

also in this section Taking on Qatar’s first executive MBA >80 Laoucine Kerbache, recently appointed dean and CEO of HEC Paris, spoke exclusively with The Edge about his vision for the business school and how they aim to develop programmes in line with the needs of the region.

Unravelling the art of equity investment>82

The Edge spoke with Kenneth Andrade, the chief investment officer at IDFC – a leading Indian infrastructure financing company – about opportunities for non-resident Indians to invest in their recently launched India Equities Fund.

Qatar National Convention Centre will host the World Chambers Congress from April 22 to 25.

The Edge | 77

business insight | global trade

World Chambers Congress

Doha Round of WTO: Optimism on trade talks by weaving in flexibility Remy Rowhani, director general Qatar Chamber of Commerce and Industry (QCCI), spoke exclusively to The EDGE about what to expect from the forthcoming eighth World Chambers Congress that is set to take place in April, given the deadlock that has plagued the Doha Round of talks for 11 years. One of the causes for the deadlock in the Doha Round is the use of negotiating approaches developed in the last century, which have not adapted to the 21st century realities of trade and multilateral negotiations. With a single undertaking approach, everything on the negotiating table has to be agreed by everyone or nothing is agreed, Rowhani tells The Edge. Both the WTO and G20 leaders have since been calling for new approaches. If the Doha Round talks become a success, it could increase the global trade by US$130 billion (QR473.2 billion) annually. How is the figure geographically spread? Actually, the figure of US$130 billion (QR473.2 billion) annual increase only applies to the trade facilitation component of the much larger Doha Round. Indeed, this annual increase would occur just by completing a standalone trade facilitation agreement, something the G20 Leaders recognised at their meeting in Los Cabos in June 2012. Further agreement on additional areas under negotiation would lead to even bigger increases of global trade volumes. Geographically, the majority of gains would go to the developing countries, thus honouring the development aspect of the Doha Round. According to latest report prepared by the Peterson Institute for International Economics, entitled 78 | The Edge

Payoff from the World Trade Agenda 2013, empirical studies show a parallel correlation between improvements in trade facilitation and increased trade volumes. According to the report’s conservative calculations, significant improvements in trade facilitation could increase exports of developing countries by approximately $570 billion (QR2.07 trillion) and exports of developed countries by $475 billion (QR1.7 trillion). Taken together, this would translate into more than $1 trillion (QR3.64 trillion) world export gains. What policy changes do you advocate at a global level? With rules that were mostly formulated in the mid-20th century, the rules governing trade negotiation are neither adapted to adequately address the trading realities of today, nor address emerging issues such as the interplay of trade and climate

change, trade and currency exchange rates, etcetera. These are some of the changes that I would want to see in reality. Lowering trade barriers is one of the agendas of the Doha Round. Where do the negotiations currently stand on this specific issue? After 11 years of negotiations, the World Trade Organization (WTO) talks on lowering trade barriers – along with other issues – are still stalled. Progress was reached in the WTO’s Uruguay Round, with countries committing to cut tariffs and maintain their customs duty rates at levels that are difficult to raise. Negotiations under the Doha Round have set out to take this further, intensifying efforts to bind tariffs in both agriculture and non-agricultural market access. With a trade facilitation agreement, the cost of doing business would be reduced from 10 percent to five percent of a product’s overall cost. What is your take on the single undertaking system that countries have? One of the causes behind the deadlock in the Doha Round is the use of negotiating approaches developed in the last century, which are not always adapted to the 21st century realities of trade and multilateral negotiations. With the single undertaking approach, everything on the negotiating table has to be agreed by everyone or nothing is agreed. The WTO and G20 leaders have now been calling for new approaches. The International Chamber of Commerce (ICC) and QCCI answered this call by launching the ICC Business World Trade Agenda initiative in 2012 at the WTO in Geneva. Through this initiative, the ICC is proposing that governments and business

global trade | business insight

“Further agreement on additional areas under negotiation would lead to even bigger increases of global trade volumes.” Remy Rowhani, director General Qatar Chamber of Commerce and Industry tells The Edge that the ICC is proposing that governments and businesses work together more closely to get beyond the Doha Round stalemate.

work more closely together to get beyond the Doha Round stalemate to define a more flexible approach that will make it possible to achieve results that will help pull the global economy out of the current crisis. Public-private partnership (PPP) is touted as one of the mantras for success of trade talks. What is your view on this? What specific measures in the realm of PPP does the Chamber advocate? Here we need to distinguish trade talks from Aid for Trade, which are two separate issues. PPPs are not connected to the success of trade negotiations; the success of trade negotiations is contingent upon the political will of member countries of the WTO to agree on a balanced set of issues, that could form the basis of an agreement by the ninth WTO Ministerial Conference to take place from December 3 to 6, 2013 in Bali, Indonesia. Rather, PPPs would be useful in facilitating the implementation of trade facilitation measures for Least Developed Countries through the WTO’s Aid for Trade, specifically those PPPs for infrastructure. Tell us about the agenda of the forthcoming World Trade Agenda (WTA) meeting in Qatar?

Qatar Chamber is hosting the ICC World Business Trade Agenda Summit, to be held on the first day of the ICC World Chambers Federation eighth World Chambers Congress on April 22, 2013. We are mobilising ICC’s international business network to define a practical and forward-looking trade policy agenda that will contribute to economic growth and job creation, moving global trade beyond Doha. The ICC Business World Trade Agenda initiative seeks the input of small, medium and large enterprises that produce the goods and services traded daily throughout the world. We are developing and refining a set of business recommendations in consultation with global business in the lead up to the summit in Qatar in April. The final business priorities will be submitted to governments ahead of the next G20 summit in Russia in September 2013 and the WTO ministerial conference in Bali. How serious, in your view, is the world community in engaging in the Doha Round? Many are discouraged, but the business community strongly believes that many agreements can still be harvested from the Doha Round. We feel that this is particularly urgent as a means for helping to pull the

global economy out of the current crisis. A WTO agreement on trade facilitation is expected to deliver gains of at least US$130 billion (QR473.2 billion) annually, with most of the gains benefitting developing countries. Up until now, there has not been such a significant initiative from the private sector. We strongly believe that our Business World Trade Agenda initiative will help forward negotiations in time for the WTO ministerial talks in Bali. With a stalemate of 11 years, what, in your view, needs to be prioritised so that the trade agenda can be taken forward? As part of the Business World Trade Agenda priorities, we are calling on governments to: conclude a standalone trade facilitation agreement; advance the multilateral process under the WTO framework; liberalise trade in services; lower barriers to trade in information technology products and services, and work towards a multilateral framework on international investment. These are effective elements of the Doha Round that, with further commitment, could be rapidly put into effect, building an effective rulesbased multilateral trading system for the 21st century. The Edge | 79

business insight | academic qualifications

Education

Taking on Qatarâ&#x20AC;&#x2122;s first executive MBA

The EDGE spoke exclusively with professor Laoucine Kerbache, the newly appointed dean and CEO of HEC Paris Qatar. He discussed how the various academic and research programmes were developed in line with the needs of Qatar and the region.

80 | The Edge

Can you tell us a little about what you did before coming to Qatar? Just prior to arriving in Qatar in February 2013, I served as associate dean, director of the HEC PhD programme for almost five years. I have been teaching in undergraduate, MBA, PhD, and executive programmes as well as actively conducting research in the field of operations management and supply chain management. Besides these activities, I have also been doing consulting work for companies in supply chain and operations management. In all, I have been in the higher education sector as an academic for more than 30 years. This experience has been extremely rich and rewarding.

the specialised masters but also for inhouse custom programmes. The next step is to build a locally based faculty of the same quality as that of HEC Paris main campus. The role of this faculty will be to contribute to local teaching and research development. Our objective is to produce, in terms of research and teaching, relevant content in line with the needs of Qatar and of the Gulf region. In short, my vision is to pursue and intensify the growth and influence of HEC Paris in Qatar through the excellence of its programmes and faculty. We have all the ingredients to achieve these goals, the UKbased Financial Times has ranked HEC Paris as number two in the world for executive education in 2012.

As the new dean, what is your vision for the future of HEC Paris in Qatar? My mission is to consolidate our positioning in executive education in Qatar and in the region, not only for degree programmes like the executive MBA and

Why did HEC decide to establish a branch in Qatar? The prime objective behind the establishment of HEC Paris in Qatar was to bring the finest executive education to the region, as a means to contribute to

academic qualifications | business insight

talent development needs of individuals and organisations, to better serve this market and to contribute to the transition towards a knowledge-based economy. Who is it that the executive programmes are looking to target in the country? Our management development programmes target experienced managers and executives. For our executive MBA programme, the average age of a typical cohort is 40 years, and participants have around 15 years of work experience. HEC Paris in Qatar just launched a new programme, the specialised master in strategic business unit management, which is aimed at younger professionals with high potential. The average age of a typical cohort is 29 years. Further, we offer custom-designed programmes for individual companies that are keen on addressing management development needs for their executives. What skills do you think an EMBA can provide high level decision makers working in Qatar? In addition to the basic skills offered in any EMBA, ours offers participants, who are often senior managers and executives, a unique opportunity to select from a number of majors. Each major is a practical and intense programme developed to provide executives with an understanding of the social, economic and environmental aspects of international business, as well as the skills to put their vision into action. Among the majors, the ones relative to energy, luxury, and reinventing business for emerging markets are of great benefit to the business sector in Qatar. In addition, participants have the opportunity to enhance their international experience by taking regular modules of the programmes at any of our other global locations. Can you tell us more about the other majors offered under the executive programme, and which of them are the most popular among participants in Qatar? To be more explicit, within the framework of the EMBA, HEC Paris offers eight different

majors, which allows them to make a special investment in their particular area of interest. The duration of each major is two weeks, with modules offered in two different locations of the world. For example, the luxury major takes place one week in Milan and one week in Paris. In Doha we are hosting the energy major, which is popular not only among participants from Qatar but from all the five different locations where our EMBA is offered. What other programmes are in your executive education portfolio? In addition to our degree programmes, there are two other main categories in our portfolio. The first category is customdesigned with programmes tailored to the needs of specific individual companies. The second category is what we call openenrolment management programmes. In Doha, we recently launched a specialised master in strategic business unit management. The programme aims at developing management acumen and fostering a genuinely entrepreneurial approach to management. Are students able to find immediate benefit and business application of what they study? All of the programmes offered by HEC Paris in Qatar have both theoretical bases and practical aims. Our participants are challenged by the faculty and monitored throughout the programme to apply the learnt concepts in their own organisation. Some HEC Paris faculty members were recently awarded research grants, what will these research projects entail? In fact, the Qatar National Research Fund (QNRF) awarded two research grants to two teams involving faculty members from HEC Paris. The first project is entitled ‘Designing, managing and assessing incentive structures for sustainable energy solutions’. The second project was awarded to a team of which I am part of. Our research project deals with ‘Revenue management modelling and optimisation for commercial airlines’.

“Our objective is to produce, in terms of research and teaching, relevant content in line with the needs of Qatar and of the Gulf region.” The Edge | 81

business insight | investment funds

Wealth management

Unravelling the art of equity investment The EDGE spoke exclusively with Kenneth Andrade, chief investment officer, IDFC, a leading Indian infrastructure financing company, on their recently launched IDFC India Equities Fund. With an overall investment sentiment looking upon the back of two contributing factors: a population base of 1.2 billion with an average age of 28 and the infrastructure business having the potential to absorb as much as US$1 trillion (QR3.64 trillion) over the next five years, this fund is open to non-resident Indians and has no restrictions on the amount that can be invested.

82 | The Edge

investment funds | business insight

Which leading companies and high growth sectors are you looking to invest in? IDFC Asset Management Company has been in existence for 13 years till to date. Management of equity funds within the firm started in 2005. Currently, IDFC Asset Management oversees over US$1.3 billion (QR4.7) in equity funds. The style of investing is to build a portfolio of robust companies who have demonstrated a higher growth rate than the underlying gross domestic production. In the Indian context, there are multiple ways to align to the growth of the companies. These are across sectors, indices and market capitalisations. So our approach is not to restrict our universe to any specific index. To be more articulate there are over 530 companies listed and traded in India with a market capitalisation of over US$100 million (QR364 million). Two very large trends are playing out in the country. India is emerging as one of the largest consumer economies with a population of 1.2 billion, with an average age of 28 which is a huge investing pool for fund mangers like us. Per capita income is climbing at double digits. This creates a very large opportunity for companies to profit from. Over the next decade, as more Indians enter the workforce and as aspirations climb, the consumer business should be able to log a double-digit growth for a long time. With IDFC an infrastructure player, will the fund invest in primarily infrastructure companies? The investment economy or the infrastructure business has the potential to absorb as much as US$1 trillion (QR3.64 trillion) over the next five years. While in the near terms this sector has been hugely volatile due to the absence of any directional policy, we do have a view that the same will change dramatically over the next year. This will make the sector attractive and bring in significant capital flows. The above two domestic driven trends would constitute a significant portion of our asset allocation. What is the maximum amount that an individual can invest? Can nonresident Indians (NRIs) invest in it? If

â&#x20AC;&#x153;The MSCI Index is designed to measure the performance of the large and midcap segments of the Indian market.â&#x20AC;?

Strong long-term performance is what is promised to investors. Define long-term. We would like to view long-term as a business cycle. In a country like India where the environment is emerging and the cost of capital is high, business cycles are between five and eight years. To fully capture the potential of the underlying asset, we think a time horizon somewhere in the above region is appropriate. The fund is benchmarked against the MSCI India NR Index. Tell us a little about the Index. The MSCI India Index is designed to measure the performance of the large and mid-cap segments of the Indian market. With 73 constituents, the index covers approximately 85 percent of the Indian equity universe. It is a comprehensive index covering market cap size, sector and style segments. The index is reviewed quarterly, thus reflecting the underlying market in a timely manner. Is there any balanced option in the fund (a mix of debt and equity)? If not, why not? As a foreign institutional investor into India, there are regulatory hurdles because of which we cannot participate in the Indian bond markets. We have thus kept our options limited to investing in equities in India.

yes, what is the cap that such investors will be subject to? As such there is no cap or restrictions on the maximum investment amount for an individual investor, as long as broad-basing requirement at the fund level is met. The same applies for NRIs as well and the fund is open to NRIs.

What is your take on the way the fund is likely to perform given that 2013 budget has just been announced? You are right when you indicate that returns are generated when sentiments are positive. But there is little we can do to predict the sentiment. Ideally we need to buy low when the environment has the potential and when the underlying process of policy shift and politics is in favour of higher corporate profitability. We do see that change happening in India. The political class has woken up from its slumber and corporate India is tightening its belt. The next five years would be an interesting remake of India where costs go down and sales begin to revive. This is an ideal situation for any equity investor to monetise. We believe it would be in the investorâ&#x20AC;&#x2122;s interest to pre-empt this change. The Edge | 83

Stay informed about business in Qatar. Online.

For more exclusive content visit us at

www.theedge.me

Q a t a r â&#x20AC;&#x2122;s B u s i n e s s M a g a z i n e

products and reviews

Panasonic RF800U

Panasonic’s RF800U is a multipurpose USB radio set which marks the comeback of the conventional radio sets, this time equipped with advanced technology. Because of its USB port, RF800U also works as a charging device for compatible gadgets. Its audio features include a 10cm full-range speaker, high sensitive four-band reception and USB playback. With an 81cm antenna, the radio is more sensitive to capture weak signals from distant areas. RF800U’s glossy surfaces blend in to give a modern look to a retro-style device.

Read it: Rebellion, revolution and a new world order HP ElitePad 900 Edited by Toby Manhire, The Arab Spring: Rebellion, revolution and a new world order, is a book of two halves. The first is a collection of posts from The Guardian live blog, and the second a collection of articles that appeared throughout the uprisings in The Guardian, newspaper in the United Kingdom. The Guardian live blog, which comprises around 200 of its 300 pages, is the live account of the dramatic events that transpired across the Middle East and North Africa in 2011. With more than two million words penned by the various journalists covering the region, reports from newswires, television and tweets over the year of protests are documented in this book. According to editor, Toby Manhire, the document was cut down to one thirtieth of its size for the book. While this has meant sacrificing the in-depth original manuscript that was The Guardian’s live blog during the uprisings, it still manages to convey the speed at which events unfolded, an excellent introduction for those wanting to catchup on past events. As for those who followed the events closely, it is a good reminder of how perhaps for the first time, the world was able to be so intimately involved, if only as a spectator to an uprising that transformed, and is still transforming the landscape of the region. The second part of the book is dedicated to reporting and opinion pieces that appeared in The Guardian from various writers, such as Tawakkul Karman, the Yemeni activist who won the Nobel Peace Prize in October of 2011, on the Yemeni revolution, to Wadah Khanfar, the former director general of the Al Jazeera network, on why we should welcome the rise of political Islam. Available at Virgin Megastore for QR120 86 | The Edge

HP unveiled its latest tablet ElitePad 900 in Dubai last month. The gadget allows multiple connectivity options, longer battery life and availability of addons to customise according to the user needs. The 1080p front-facing video camera and eight megapixel rear camera come with CyberLink YouCam software. The device is compatible with any ePrint-capable HP printer to allow direct print commands from the tablet. With a 25.7cm display, the device is 9.2 mm thin, making it easier to carry. ElitePad 900 additionally incorporates extensive features to ensure data management and security of the lost devices.

TAG Heuer Carerra Calibre 1887 TAG Heuer’s Carerra Calibre 1887, the sports chronograph, designed specifically for professional drivers and sports-car enthusiasts, has been upgraded by Carerra Calibre 1887 Jack Heuer Edition. The watch features a 45mm diameter, black titanium carbide steel bezel, fine-brushed and sandblasted steel and titanium cage with tachymetre and pulsometre on the dial. TAG Heuer’s latest range also includes similar items with variable diameters and dial features.

10 things

Business moguls who have ruined the firms they created We take a look at 10 people who built large and successful organisations only to be the very reason their company is failing today. Martha Stewart Omnimedia

In 2004 Martha Stewart was convicted of conspiracy and making false statements to a federal investigator after being indicted for insider trading. The company’s stock price has since dipped by more than half in the past five years, and executives have argued that Stewart’s unwarranted involvement has hampered their ability to make strategic changes.

Michael Dell: Dell

10 things

Dell founded a company which for a period of time was the most successful PC manufacturer in the world. But the company has lost significant market share and continues to do so with consumers opting for mobile devices. To make matters worse in 2010, Michael Dell and the company were fined US$100 million (QR364 million) for misrepresenting financial information.

Mike Lazaridis: BlackBerry

Under Lazaridis, the company lost significant global market share to its competitors in the smartphone market. Other major failures during his tenure have been the BlackBerry PlayBook and a global BlackBerry service outage which left customers unable to access their messages.

Angelo Mozilo: Countrywide Financial

Countrywide was one of the first firms to finance mortgages to high-risk borrowers, which eventually led to the subprime mortgage crash. While homeowners defaulted on their high interest loans, Mozilo got away by settling an insider trading charge and a ban from serving as an officer or director of a public company.

Aubrey McClendon: Chesapeake Energy As the CEO and co-founder of Chesapeake Energy, a natural gas producer, McClendon was featured in Forbes magazine as “America’s most reckless billionaire.” In 2008, the company’s share value

88 | The Edge

plummented by 60 percent. In the same year, he was credited with paying himself US$112 million.

Andrew Mason: Groupon

Google once offered to buy Groupon from Mason for more than US$6 billion. Today, Groupon is a fraction of what its stock price once was, and the failure is credited mainly to Mason’s bad management and the overstatement of financials for the company.

Dov Charney: American Apparel

The rapid expansion plans of the retailer with underlying management issues have resulted in its problems today. Charney has also had two sexual harassment lawsuits filed against him and the company’s factory was accused of employing illegal immigrants.

Richard Schulze: Best Buy

The electronics giant has seen its business lost to online retailers such as Amazon. Schulze was also the centre of a company sex scandal when it was discovered that he had knowledge of an affair of the former CEO with a staffer and had not reported it to the board. The company’s share price has dropped and it posted losses in 2012.

Mark Pincus: Zynga

Created in 2007, Zynga developed wildly popular social games like Farmville and Words with Friends that ran on mobile devices. Pincus, the founder and CEO, has been blamed for pursuing quick revenues instead of focusing on growth. Scam ads and their inability to replace old titles with popular new ones have led to disappointing results. Over the past year, Zynga’s share price has fallen from US$14.50 to US$2.09.

Kenneth Lay: Enron

Enron was formed in 1985 by Lay, who was also the CEO, by merging two energy companies. He was at the centre of a massive corruption scandal involving accounting fraud that eventually led to the company declaring bankruptcy. Lay passed away before his sentencing and his conviction was vacated. Enron no longer exists.