editor’s letter
FROM THE
EDITOR
TURNING LIQUIDITY INTO EQUITY
Managing editor James McCarthy jmccarthy@surlaterre-me.com +974 3159743 Editor Kelly Lewis k.lewis@firefly-me.com +974 5067574 Sales & marketing manager Emma Tapper e.tapper@firefly-me.com +974 3197446 Creative director Roula Zinati Ayoub Art AND DESIGN Lara Nakhleh Rena Chehayber Larry Issa Finaliser Michael Logaring printed by Ali Bin Ali Printing Press Doha, Qatar
Firefly Communications PO Box 11596, Doha , Qatar Tel: +974 4340360 Fax: +974 4340359 www.firefly-me.com
While the price of oil plummeted off the back of the global downturn and numerous projects were either shelved or cancelled throughout the Middle East, governments across the Gulf Cooperation Council (GCC) have bolstered their financial investment into a number of industry areas, including infrastructure projects, healthcare and education, to spur economic growth. In recent months the level of optimism across the region’s multipronged business landscape has risen significantly, which has been boosted by the recent spike in oil prices, fuelling further investment into new projects. Additionally, syndicated loans for projects in the Gulf have totalled around US$30 billion (QR109 billion) so far this year compared to US$90 billion (QR328 billion) in 2008 and US$130 billion (QR473 billion) in 2007. According to Dubai-based research firm Proleads, the economic stance of the region is poised for growth as GCC countries have the most active construction markets in the world for the oil, gas and petrochemical industries, with projects budgeted at more than US$690 billion (QR473 billion). Due to the continued output production rate and the international demand for GCC oil, gas and petrochemical products – earnings from which constitute about 85 percent of the region’s export revenues – the GCC has cemented its position as the global ‘industry’ hub. In line with this, the region has become the focus of international polymer producers and converters, which means there is immense growth potential for the downstream plastics industry. While the Gulf focuses mostly on basic petrochemicals such as ethylene, polyolefins and polypropylene, it will soon be capable of producing a broader offering of chemical products and it is already a leading manufacturer of fertilisers. Additionally, governments within the GCC are looking to take advantage of the low costs and abundant feedstock in the region to promote downstream industries for further diversification and development. The progression of these multiple strategies will foster the continued economic growth of the region and increase employment opportunities, while also cultivating new areas of investment and joint ventures between foreign companies, and local establishments in the GCC.
Kelly Lewis
Editor
TheEDGE is printed monthly © 2009 Firefly Communications. All material strictly copyright and all rights reserved. Reproduction in whole or in part, without the prior written permission of Firefly Communications, is strictly forbidden. All content is believed to be factual at the time of publication. Views expressed by contributors are their own derived opinions and not necessarily endorsed by TheEDGE or Firefly Communications. 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 Getty Images and/or iStock Photo.
NOVEMBER 2009
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contents
NOVEMBER 09
Contributors .6.
A brief introduction to the specialised team of contributors, who regularly lend their expertise and insight to TheEDGE.
.10.
NEWS IN BRIEF .8.
A snapshot of the latest business developments affecting the business landscape within Qatar and the GCC region.
NEWS IN QUOTES & NUMBERS .10.
Powerful statements and important statistics that made an impact.
BUSINESS INSIGHT .12.
.26.
.30.
TheEDGE speaks with key business people from in and around the region to discover what is in store for Qatar.
MARKET WATCH .23.
Martin Menachery lends his expert view to discuss the economic environment within Qatar and its diversification threshold.
INSIDE EDGE .26.
Rajesh Mirchandani gives the ‘inside edge’ on the state of Qatar’s insurance and reinsurance market.
COVER STORY .30.
Kelly Lewis and Abdel Rahman Abdel Basit examine the burgeoning market for the regional downstream petrochemicals and plastics industry.
NUCLEAR DETERRENCE & SECURITY .38.
TheEDGE looks at the rising threat of nuclear proliferation and deterrence in the Gulf region, which are among the main security issues currently taking centre stage.
SPECIAL REPORT .45.
Daniel Moore of Oxford Business Group examines Qatar’s ambitions to bolster its ICT capacity in line with the states national development programme. NOVEMBER 2009
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contents
NOVEMBER 09
ON THE PULSE .48.
Edward Jameson explores the evolution of nuclear power generation in one of the world’s most politically sensitive regions and examines the complex relationship between the GCC, Iran and the US.
.59.
BUSINESS VIEWS - REAL ESTATE .52.
Edward Brookes contemplates the illusion and complexity of time in the local real estate sector.
LEGAL INSIGHT .54.
Clyde & Co’s Terry McMahon discuss the past, present and future of Qatar’s depletable source of wealth, oil & gas.
INDUSTRY FOCUS - MARKETING .59.
Corporate image-builder Orlando Kimber discusses marketing strategies in the wake of the global downturn.
HOW-TO GUIDE .63.
In this edition, TheEDGE looks at media and communication strategies and how businesses can best leverage these platforms.
EVENTS & CONFERENCES .75.
A round-up of key industry events taking place in the MENA region and abroad in September.
TECH TOOLS .68.
TheEDGE takes a look at the latest tools and gadgets hitting the shelves.
LIFE & STYLE .70.
To beat the stress TheEDGE explores ways for you to relax and unwind.
QATAR PROJECT NEWS .76.
An update on key projects that are underway within Qatar as well as Qatari developments abroad, and a listing of the latest tenders open for biding. NOVEMBER 2009
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contributors
Orlando Kimber
Film production specialist - Doha, Qatar Orlando Kimber is a corporate image builder and film production specialist based in Qatar. In the past few years, Kimber has expanded his portfolio of work to include more than 20 high-end documentaries, corporate video production and television commercial work. His most recent film production includes an interview with H H Sheikha Mozah bint Nasser Al Missned, which was shown to great acclaim during the launch of Qatar Science and Technology Park. His interviews conducted with business leaders from around the globe have been aired on CNN. In the past 12 months he has filmed in Houston, New York, London, Paris, The Hague, Cape Town, Dubai and of course Doha.
Terry McMahon
Senior energy lawyer - Clyde & Co, Doha, Qatar Terry McMahon has more than 30-years experience working as a lawyer in the oil and gas industry. He has advised numerous energy companies and negotiated complex multi-billion dollar transactions, which include the exploration and production of refineries and other petroleum-based plants, cross border pipelines and transportation facilities on a worldwide basis. In addition to being a high-level legal executive in several US-based companies, McMahon was located in Muscat, Oman for six years as general counsel to Oman Oil Company and in Bogota, Colombia for four years as general counsel to Occidental de Colombia. He was the first lawyer to negotiate a liquid natural gas (LNG) contract with Algeria for the exportation of LNG to the US.
Edd Brookes
Director - DTZ Middle East Operations, Doha, Qatar Edd Brookes, based in Qatar for the past four years, is a professional member of the Royal Institution of Chartered Surveyors and a director of DTZ Middle East Operations. In addition to being head of DTZ Middle East Valuation, Brookes runs the Agency Department, which is involved in the sale and leasing of a number of key projects. The diverse calibre of Brookes’ work has seen him operate out of various MENA countries. He is a regular guest on the BBC’s World Middle East Business Report and a speaker at key regional events.
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NOVEMBER 2009
contributors
Edward Jameson
Senior business journalist - Middle East North Africa region Edward Jameson is a seasoned business journalist operating out of the GCC. Jameson’s editorial expertise extends to the construction, logistics and environmental sectors. After earning an MA in Journalism in the UK, Jameson traveled extensively throughout Australasia, South East Asia, the UK and, most recently, the Gulf region. Throughout Jameson’s career his work has featured in numerous global leading publications in both print and online mediums.
Rajesh Mirchandani
CEO - Dun & Bradstreet South, Asia Middle East Ltd, Dubai, UAE Rajesh Mirchandani is a postgraduate from Indian Institute of Management Studies (IIM-C) and is currently responsible for the South Asia, Middle East and Africa (excluding South African bloc) operations of Dun & Bradstreet. Mirchandani led the management team responsible for the buyout and creation of Dun & Bradstreet South Asia Middle East Ltd. Mirchandani has exceeded Dun & Bradstreet corporate objectives each year of the past 10 years and has achieved the highest score globally on the Dun & Bradstreet Employee Satisfaction Index. He also serves on the board of directors for several companies in India and aboard. Prior to his current post as CEO, Mirchandani was the managing director of Dun & Bradstreet ASEAN/ South Asia. Preceding this, he was managing director of Meridian VAT Reclaim.
Daniel Moore
Editorial manager - Oxford Business Group, Doha, Qatar Daniel Moore is the editorial manager (for Qatar) of the global publishing, research and consultancy firm, Oxford Business Group. Moore has been operating out of Qatar for the past two years, as well as working in an editorial and research capacity throughout East and South Africa and Europe. In addition to this international experience, Moore worked for two years, with an American-based consultancy company on international project development and coordination initiatives, as well as business development projects in Europe and Africa. He holds a Bachelor of Science in Marketing, with certification in international business, as well as a Bachelor of Arts in French from Texas A&M University in the US. Moore has also completed certification courses and undertaken extensive studies in international business and modern French at L’Université de Lausanne in Lausanne, Switzerland. He has travelled extensively throughout Europe, Africa, The Americas, the Middle East and Southeast Asia.
NOVEMBER 2009
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NEWS
NEWS IN BRIEF VIGILANT ECONOMIC GROWTH URGED BY IMF
The International Monetary Fund (IMF) has warned that Gulf economies, while poised to recover faster from the downturn than many of their global counterparts, should remain vigilant against potential asset bubbles in the future. Masood Ahmed, director of the Middle East and Central Asia Department of the IMF, addressed delegates during last month’s Dubai Economic Forum, which discussed the financial crisis and its impact on Gulf Cooperation Council countries. “Most of the financial troubles in the region had [their] roots in excess liquidity in the system that inflated asset prices. One important lesson that the region has to learn from this crisis is to manage its surpluses effectively while avoiding liquidityinduced asset price inflation,” Masood said. According to the latest IMF forecast, the six Gulf economies together are projected to grow 5.2 percent in 2010 against a projected real growth of 0.7 percent in their combined gross domestic product (GDP) for 2009. While the oil-based GDP was expected to grow 5.5 percent and the non-oil GDP has been forecast to grow at 4.4 percent, with inflation projected at 3.8 percent in 2010. While commending governments and central banks in the Gulf for playing a proactive role in supporting the financial sector, and the economies through liquidity support programmes and direct capital injections, Masood urged that governments continue their active fiscal and monetary policy support of the economies. Most governments in the region have initiated economic stimulus programmes, with Saudi Arabia announcing the largest package, while Kuwait remains at the lower end of the spectrum. 8
NOVEMBER 2009
FOOD CRISIS TO FORCE RELIANCE ON GM CROPS
In order to meet the growing demand for food security and reduce the environmental impact of farming, a British science body has announced the world needs to increase its production of genetically modified crops. The Royal Society said in a report that the world faced a “grand challenge” to feed another 2.3 billion people by 2050 and at the same time limit the environmental impact of the farm sector. The world will have to increase food output by 70 percent and invest US$83 billion (QR302 billion) annually in developing countries by mid-century, the United Nations (UN) Food and Agricultural Organisation said earlier this month. “The problem is such an acute one, doing that sustainably without eroding soil, overusing fertilisers is an enormous challenge,” the chair of the Royal Society report, Cambridge University’s David Baulcombe told Reuters. “There isn’t a lot more land to use…and from the point of expense and using fossil fuels, we want to use less fertiliser. “The food supply problem is likely to come to a head 10, 20, 30 years from now,” he said, adding that this did not leave “much time” given the research lead time to develop new crops. To cater for future food demand supplies, various approaches will need to be implemented from hi-tech genetically modified crops to lowtech management approaches, which will include sowing grass around maize to divert pests, as well as the presevation of natural crop varieties.
BARWA WINS BID TO FREEZE ESTATE OF DEAN REES
Qatar’s Barwa Real Estate Company won a court bid late last month to provisionally sequestrate the estate of Dean Rees, who is accused of luring investors to an alleged Ponzi scheme run by Barry Tannenbaum, Bloomberg reported. The order was granted by Judge Mohammed Jajbhav in South Africa’s, South Gauteng High Court last month. The property developer won its bid after a similar application was dismissed in the United Kingdom in August. Barwa’s attorney at Dewey and Leboeuf said the company lost more than US$30 million (QR109 million) investing with Rees and Tannenbaum. “We’re confident our client and other international companies will take comfort in the willingness of our government and criminal authorities to bring suspected criminals to book,” Barwa’s Johannesburg-based attorney, Greg Nott said.
NEWS
‘FIRST’ STEP A BIG ONE FOR NEW ISLAMIC BANK
CNN BOOSTS ITS MEDIA CAPACITY IN GULF REGION
As the United Arab Emirates continues to bolster its position as the hub for media production and broadcast, CNN will officially rollout daily broadcast operations from its new Abu Dhabi facility this month. CNN’s office is located in the city’s twofour54 free zone and boasts a state-of-the-art production centre, which will see the newsgathering hub deliver live broadcasts of its weekday news programme. The new facility is positioned alongside the network’s 46 international newsgathering operations, which also include CNN’s three current broadcast production centres in Hong Kong, London and Atlanta. CNN Abu Dhabi will coordinate newsgathering for the seven CNN operations in the region in Baghdad, Beirut, Cairo, Dubai, Islamabad, Jerusalem and Kabul. With 30 staff, the new hub forms a key base for CNN from which it will coordinate the regional bureaux. Under the banner of its broadcast offerings, CNN will air programmes that include, PRISM, Inside the Middle East and Marketplace Middle East.
WILLIAMS F1 TEAM TO BOOST GREEN VEHICLE TECHNOLOGY IN QATAR
Formula One (F1) team, Williams has signed a partnership deal with Qatar Science and Technology Park (QSTP) to develop F1 technologies for commercial application. Williams will open the first F1related technical centre outside of Europe. It will focus on two projects, both with commercial goals – the industrial application of Magnetically Loaded Composite (MLC) flywheels and the advancement of Williams’ simulator know-how for competition and road car use. The flywheel project will seek to address the potential to store and release energy rapidly. Initial target markets include mass transit systems such as trains and trams. Under the multi-million dollar venture, Williams will employ around 20 staff and extend its research and development capabilities in line with a projected revenue stream that will reward both Williams and QSTP.
In a bid to grow its multipronged business strategy, Qatar First Investment Bank (QFIB) could spend up to 45 percent of its QR1.6 billion (US$438 million) paid-up capital on acquisitions, the Shariah-compliant bank told reporters during a press conference last month. QFIB chairman, Abdulla bin Fahd Al Marri said the bank already had “three deals in the pipeline” and was eyeing up ventures and investment stakes in a number of sectors, which include energy, real estate, construction, finance and healthcare. Regulated by Qatar Financial Centre Regulatory Authority, with an authorised capital of QR3.6 billion QFIB launched operations in March this year and has ambitious plans to establish itself as the leader in Shariah compliant investment banking in Qatar and the Gulf region. With a 60 percent Qatari shareholder stake and remaining 40 percent held by investors in the Gulf region, the bank has set its sights on acquiring a customer-base of high net worth individuals and government institutions. Marri said an acquisition deal for a controlling stake in a key regional company was currently under review and was expected to be firmed-up mid this month. “We’re reviewing a deal in the industrial sector; buying over 70 percent of a company that owns seven factories in the Gulf Cooperation Council region,” he said. “It’s a very good company...going through expansion and because of the crisis that became a little difficult. It was looking for a new investor so we seized the opportunity.” He added that future acquisitions could include a joint venture in Turkey, with a Gulf Arab sovereign wealth fund to buy a stake in an “established” services company. Marri also confirmed the bank was eyeing a deal in the healthcare sector within the Levant region, which he said was expected to be announced by either year-end or early 2010. NOVEMBER 2009
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NEWS IN QUOTES & NUMBERS
news in quotes
news in numbers
18
“Qatar may be more flush with cash having crystallised 1.4 billion pounds (QR8.3 billion) of its Barclays stake…but we see speculation that it may bid for the rest of Sainsbury as non-credible.”
Analysts for Bank of America Merrill Lynch Global Research stated in a recent report, which also claimed that Qatar’s sovereign wealth fund was “unlikely” to bid for J Sainsbury Plc.
50
25
75
“You wont see us involved in infrastructure projects in the GCC.”
Michael Essex, director of the World Bank International Finance Corporation (IFC) MENA operations, said in relation to the IFC not being open to lending to infrastructure projects in the GCC. This is because the group does not qualify as an emerging market, which warrants funding assistance from the World Bank.
“Creating a viable solar energy industry is an important goal for us in Qatar in order to meet the challenges of climate change facing our planet. Chevron’s research centre at Qatar Science and Technology Park (QSTP) is a key part of our strategy, helping to develop technology that will demonstrate the real-world effectiveness of solar energy.” Dr. Tidu Maini, executive chairman of QSTP, said as Chevron appointed Mike Farshchi as research manager of its Center for Sustainable Energy Efficiency at QSTP.
“The new US$14 billion (QR51 billion) airport will be over 22 kilometres and open in 2011.”
Qatar’s Civil Aviation Authority chairman Abdul Aziz Al Noaimi said during a recent aviation conference in Doha. In addition, he said the new airport would have capacity for 24 million passengers and cargo of 1.4 million tonnes a year.
Fuelled by falling rents (down 18 percent since January) and food prices, Qatar’s consumer price index (CPI) decreased 1.1 percent in September compared to the previous month, according to figures released by Qatar Statistics Authority. At the time of publication, the statistics authority’s website quoted Qatar’s CPI standing at 122.44, down 4.7 percent from the beginning of 2009. The index has continued a gradual deflation trend throughout 2009 following a period of high inflation the previous year. The latest CPI revealed that food prices in September decreased 0.6 percent when compared to August and were 1.2 percent lower than at the beginning of 2009. Rental prices declined in September by 3.2 percent with a 4.8 percent decrease in rental prices for villas and a 5.6 percent decrease for stand-alone houses. Apartment rental prices were down 18 percent down for the year.
Pic Of the month
“The relations with Iran are of much importance to Qatar and Doha officials will spare no efforts to further advance and promote these relations in different fields.”
Qatari Finance minister Yousef Hossein Kamal said at a meeting with Iranian ambassador to Doha Abdullah Sohrabi. Kamal hailed Qatar’s positive ties with the Islamic Republic of Iran and underlined Doha’s willingness to further expand relations with Tehran.
“We are entering into the final stages of efforts to bring the proposed agreement into force.”
State Department spokesman Ian Kelly confirmed at a press briefing that the US and the UAE were finalising a landmark nuclear power cooperation agreement as Congress had given its tacit approval.
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NOVEMBER 2009
- Italy’s Roberto Locatelli of Metis Gilera Team crashes during the 250cc race at the Australian MotoGP, at Phillip Island Grand Prix Circuit on October 18, 2009. (Photo by Quinn Rooney). -
BUSINESS INSIGHT – DEFENCE & SECURITY
A MATTER OF SECURITY
- Martin Bennett, BAE Systems’ vice president for the Middle East. -
Given the rising global demand for security infrastructure, while also recognising the significant affects of the global economic slowdown, how has BAE Systems tracked with its 2009 economic performance – has it been above of below the group’s expectations? BAE Systems is a public company with its shares listed on the London Stock Exchange. Our year-end is December 31, so we aren’t able to comment on our performance for the full year to December 31, 2009. However, for the six months to June 30, 2009, BAE Systems’ sales were US$14.8 million (QR54 million) and underlying earnings before the deduction of interest, tax and amortisation expenses was US$1.46 million (QR5.32 million). Most importantly we have an extremely strong order book of US$73.8 billion (QR269 billion). At the time of our interim results, Ian King, CEO, commented: ‘BAE Systems continues to perform well 12
NOVEMBER 2009
Across the Gulf Cooperation Council (GCC), individual states are seeking to boost their economic endurance as they forge ahead with a number of new commercial ventures. However, in line with these initiatives is the need to ward against potential security and terrorism threats. Asset protection, national defence and overall security infrastructure is key to ensuring a stable and growing economy. Kelly Lewis speaks one-on-one with BAE Systems’ vice president for the Middle East, Martin Bennett, about the leading global defence, security and aerospace company’s strategic ambitions for the GCC market. with performance in the first half of 2009 consistent with the group’s expectations of good growth for the full year. BAE Systems’ strategy of investment in businesses with strong positions in attractive sectors of the defence and security market continues despite the difficult economic environment and changes in priorities in many of its markets, the group continues to develop plans for growth over the medium term.’ Going forward, how will BAE Systems strategically position itself within attractive sectors of the defence and security market, and what plans does the group have for continued development and growth in the medium term? Overall BAE Systems’ strategy is to deliver sustainable growth in shareholder value by being the premier global defence, security and aerospace company. It is currently the second largest defence company
in the world and fifth largest supplier to the Pentagon. The company continues to focus on its core business areas of land, sea and air and for 2009 and into 2010, with a key focus on our four global initiatives of land, readiness and sustainment, security and unmanned aircraft systems. The acquisition of Detica [an international business and technology consulting firm] a year ago has enabled the company to accelerate the implementation of its strategy to develop a world-class security business across all our markets, with a more recent focus on the Middle East. Traditionally in the Middle East marketplace, BAE Systems has experienced an export and investment relationship greatly focused around land and armaments. However, the company seems to be shifting its focus more toward joint ventures in the region, with a strong emphasis on the integration of systems for homeland security. Can
BUSINESS INSIGHT – DEFENCE & SECURITY you expand on what this will mean in real terms for BAE Systems and for the GCC region? BAE Systems has been operating in the Middle East since the 1950s, with a heritage of supplying aircraft throughout the region. More recently it has focused on land and sea. As a company, BAE Systems places a strong emphasis on industrial partnerships and already has a number of joint ventures throughout the world, including a joint venture with Abu Dhabi Ship Builders, called Gulf Logistics and Naval Support. Through industrial partnerships, BAE Systems is able to share knowledge and best practice to support the growth of the countries in which it operates. This therefore enables BAE Systems to share in the success of those countries, both economically and by increasing the number of professional and skilled workers. As you know, there is a growing diversity of projects and investments throughout the Gulf region. Considering this, how important is it for individual states to step up their security infrastructure to protect their assets against various security threats (in air, land and sea)? It is always important for a country to be able to protect its assets, particularly against potential security threats. The Gulf region as a whole plays a key role in a number of important sectors, specifically natural resources, transportation and financial services. In protecting these important areas, countries need to look at the different ways of doing this, whether it is cyber-security for financial services or more traditional methods for natural resources and transportation. Further (to the above question), from which GCC countries are you seeing the most intensive efforts in bolstering security measures? All the GCC countries, equally, are increasing their efforts in homeland security and protecting their assets. However, most recently the Kingdom of Saudi Arabia appointed a European company to help it improve border security across all its land and sea boundaries. In the United Arab Emirates (UAE), the Critical National Infrastructure Authority has been established, which works to defend, secure and support the critical
- BAE Systems operates across air, land and sea and also delivers advanced electronics, security, information technology solutions and customer support services. -
infrastructure and vital utilities of Abu Dhabi, in addition to securing the emirate’s continued economic stability. As security intelligence is becoming increasingly important for BAE Systems, how will the company leverage its position, now it has acquired Detica, to offer applications that will combat security risks such as cyber security and anti terrorism in the Middle East market? On the cyber security side, Detica focuses on helping government and corporate clients reveal intelligence, maintain security, manage risk and strengthen resilience in today’s complex operating environment. One of its applications, Detica NetReveal, is a revolution in the detection of fraud and organised crime. Global banks and insurers as well as government and law enforcement agencies at the heart of their fight against a range of criminal threats use it. On the more traditional side of security, BAE Systems works closely with governments globally to provide a wide range of products and services, which help combat security risks. These include armoured vehicles, combat aircraft, radars, unmanned systems and naval ships, to name but a few.
There is growing awareness among GCC states for the need to increase national and border security in order to protect against threats such as smuggling, terrorism and illegal immigration. Can you discuss the importance of this security measure for the GCC? Security is important in any region to ensure a stable and growing economy. With the current operations in Iraq and Afghanistan, along with the instability in Yemen and piracy in the Gulf of Aden, it could be argued that security in the Middle East is of particular importance. Additionally, in regard to Qatar, can you discuss the above importance of security measures in line with the need for the state to protect its economic assets such as oil rigs and refineries, power stations, water desalination plants and its ports and logistic infrastructure? Qatar is no exception to the rest of the world when it comes to the security of its national infrastructure. As Qatar develops its infrastructure, there is the opportunity for it to design, from the beginning, solutions that are the most appropriate for its needs. NOVEMBER 2009
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BUSINESS INSIGHT – DEFENCE & SECURITY
- The Gulf needs to protect itself from the rising threat of piracy on the high seas. -
The Gulf, and the greater Middle East, region imports and exports a huge quantity of stocks and materials, including liquid natural gas, oil, food supplies and construction materials. Therefore, security of the ports and all logistics systems is obviously a very serious issue to consider. Can you expand on what BAE Systems is involved in within the GCC region (and Qatar) in order to boost these security measures? As BAE Systems’ move into the security arena is relatively new, we are currently developing our offering for the GCC. As and when this develops further, we will be able to comment in more detail on this. Additionally, as the UAE has plans for a nuclear power plant, and it is likely that other states will follow suit in the coming years, what security measures will need to be put in place to protect national and regional security against threats? Other than what has already been mentioned, it is too early for us to be able to comment on this. 14
NOVEMBER 2009
Further to this, and considering the soaring levels of piracy on the high seas in recent times, this presents a significant risk to the region both in terms of its current import and export fleet of stock. If enriched uranium was to be exported from the region, this would surely place the Gulf in a vulnerable position for attack. Yes, the Gulf region is certainly vulnerable. The Straits of Hormuz, with Oman on one side and Iran on the other, are one of the busiest shipping lanes in the world and the only way in and out of the Arabian Gulf. In the region, to date piracy has generally concentrated on the Gulf of Aden. However, the GCC needs to be prepared for all eventualities. In the absence of a stable, functioning government in Somalia, there have been a number of initiatives to protect shipping. The Combined Task Force 150 (CTF-150), a multinational naval task force, was established following the attacks on the World Trade Center to pursue the ‘war on terror’, and now has a secondary role of addressing piracy.
In early 2009, CTF-151 was set up to conduct counter-piracy operations over a wide geographical area that includes the Gulf of Aden, the Arabian Sea, the Indian Ocean and the Red Sea. Currently it includes naval forces from the United Kingdom (UK), the United States (US), Denmark and Turkey. BAE Systems has wide experience of commissioning, safety engineering, security engineering, operational and technical analysis, systems design and integration, and through-life support. It is currently reviewing its capabilities to provide an end-to-end vessel security audit and enhancement capability, if there is a market demand for this service. Is BAE Systems working on any partnerships in the region to assess these (above) security requirements in which to create an effective solution to this increasing threat to maritime security? The company is not currently working on any specific partnerships on the security side. However, BAE Systems is looking at opportunities for
BUSINESS INSIGHT – DEFENCE & SECURITY
- Talisman is a third-generation unmanned underwater vehicle with multi-role mission capability. -
industrial partnerships more generally throughout the region. In July 2009, BVT Surface Fleet (the maritime joint venture between BAE Systems and VT Group) formed a joint venture with Abu Dhabi Ship Building to provide world-class naval support services for customers in the GCC region and in Egypt and Jordan. The new company, Gulf Logistics and Naval Support LLC (GLNS), is the first company of its kind in the Arabian Gulf. It will offer a range of naval support services across the full spectrum of integrated logistics, support and training, as well as outsourcing solutions for base facilities to support the marine fleets of navies, coast guards, marine police, homeland security organisations, special forces and other key commercial customers. As the GCC pushes forward with its search for renewal and nonrenewable energy sources, what are some of the technologies that BAE Systems can offer for different security applications e.g. technologies for wind farms? BAE Systems has a strong history of research and development, and consequently works with a number of organisations looking at new technologies. Two particular areas, which might be of interest, are wind farms and our HybriDrive propulsion systems. In terms of wind farm technology, more than half of the UK’s proposed wind farm developments are objected to on the grounds they interfere with air traffic control or defence radar systems. Rotating turbines of wind farms wreak havoc on radar systems and cause clutter on screens, which prevents detection of other objects in the airspace. With the aim of helping the UK to achieve its target of generating 15 percent of its energy from renewable
sources by 2020, BAE Systems is working to design a ‘stealth’ wind turbine, which is invisible to radar. A key area of development is the application of radar absorbent materials, commonly used on advanced military vehicles to prevent detection. These materials, made from rubber, foam or paint, can be applied to existing turbines or inserted within the turbine blades, with the effect of making the wind farms invisible to radar. Other solutions being trialled by the company include careful positioning of wind farms to avoid interference, innovative software featuring sophisticated algorithms to filter out the radar signals produced by wind turbines and the reshaping of turbines so they deflect signals away from the radar’s line of sight. Where HybriDrive is concerned, BAE Systems is the world’s leading producer of efficient, low-emission hybrid electric propulsion systems for heavy-duty vehicles. The company’s HybriDrive propulsion technology has been in daily revenue service on buses in New York and other cities since 1998. The system meets the durability requirements of demanding urban transit operations, currently
powering more than 2000 buses and transporting more than a million passengers daily. BAE Systems powers the world’s largest hybrid bus fleet, which operates in New York City, and hybrid bus fleets in cities including San Francisco, Toronto and London. To date, these buses have accumulated more than 100 million miles, saved nearly five million gallons of diesel fuel, and prevented more than 50,000 tonnes of carbon emissions. You recently said (during a press conference) that BAE Systems had current joint ventures in Oman, UAE, Saudi Arabia and “hopefully soon would have one in Qatar”. Are you able to expand on the regional partnerships the company has and the local-based ventures that BAE Systems is vying for? As previously mentioned, BVT Surface Fleet, our shipbuilding operation, has recently set up a joint-venture with Abu Dhabi Ship Builders to provide naval logistics and support. We are actively looking to set up additional industrial partnerships and joint ventures throughout the region. We are unable to comment specifically on a country-by-country basis.
- GCC states need to increase national and border security in order to protect against threats such as smuggling, terrorism and illegal immigration. -
NOVEMBER 2009
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BUSINESS INSIGHT – NATURAL RESOURCES & TECHNOLOGY
AVIATION INDUSTRY
FUELLED FOR A BETTER FUTURE A significant development was realised for the aviation industry last month when Qatar Airways flight QR076, outbound from London Gatwick, touched down in Doha. The aircraft, an Airbus A340-600 powered by Rolls-Royce Trent 556 engines, was flown using fuel derived from natural gas. The flight marked the first time that a commercial airliner, carrying passengers, had utilised the new fuel application. Kelly Lewis speaks with Andy Brown, Shell’s executive vice president, Qatar, and managing director of the Pearl GTL, about Shell’s involvement.
- Andy Brown. -
G
as to liquids (GTL) Jet Fuel is a blend of conventional oil-based kerosene (standard Jet A1) and up to 50 percent GTL kerosene. GTL kerosene, developed and produced by Shell, is a new, synthetic, kerosene made from natural gas rather than crude oil. Technical standards body, ASTM International, recently approved the new jet fuel specification, ASTM D7566, which endorses jet fuel containing up to 50 percent GTL kerosene for use in civil aviation. The debut flight was the latest development off the back of more than two years of scientific work carried out by a consortium consisting of Shell, Airbus, Qatar Airways, Qatar Petroleum, Qatar Science and Technology Park, Rolls-Royce and WOQOD, into the benefits of using GTL Jet Fuel in aviation engines. GTL Jet Fuel has lower emissions of particulates and other pollutants that can affect local air quality. GTL Jet 16
NOVEMBER 2009
Fuel also has a slightly higher energy density per kilogram than oil-derived kerosene, meaning that a lower weight of fuel may be required for each kilometre flown. The consortium has been working to quantify the potential fuel saving, among other work, much of which is being undertaken at the Qatar Science and Technology Park in Doha. When TheEDGE asked Andy Brown about the tangible benefits that the new fuel would deliver to air quality, he said research was being conducted to determine such findings. “The GTL kerosene component of GTL Jet Fuel burns with near zero sulphur dioxide emissions and substantially lower particulates, which are very fine soot particles. Several tests have already indicated encouraging results that potential reductions are substantial,” Brown confirmed. “The consortium of companies involved in the flight is working to quantify the benefits further. We’ve
adopted a network approach to this work, linking young Qatari scientists with senior researchers in Qatar and abroad. The work will focus on the intimate relationship between fuel composition and performance characteristics, bringing together unique expertise from the different consortium members, in partnership with academic institutions in Qatar and abroad.” While the debut flight utilised a 50/50 fuel blend ration, Brown said more research and experimentation would be undertaken using various fuel blends to identify the best application for emissions reductions and overall performance. “More scientific work will now take place. Consortium partners signed two further research agreements with academic institutions on the day after the flight. One of those agreements – between the Qatar Science and Technology Park, Texas A&M at Qatar, Rolls-Royce and the
BUSINESS INSIGHT – NATURAL RESOURCES & TECHNOLOGY
German research institution DLR – was to establish a more in-depth characterisation of the combustion performance of a range of GTL Jet Fuel blends,” he said. “This research work, also supported by Shell scientists, will focus on the ignition and spray characteristics of pure GTL kerosene, different blend combinations of GTL kerosene and oil-derived kerosene at high altitudes, as well as the complex combination of gaseous and particulate emissions from aircraft engines.” While GTL kerosene has a lower specific density than conventional fuel (around 0.74g/litre against 0.8g/ litre), which provides up to five percent higher energy density per weight, the global kerosene standard sets a minimum specific density of 0.75g/litre. In regard to whether Shell would challenge this point (to establish that lower density does not have an impact on combustion characteristics to enable the full potential and capacity of this fuel blend to be exploited), Brown said, at the current time, Shell was happy with the blend certification provided by ASTM International. “This [ASTM D7566] certification was a major milestone for the aviation
industry – in fact there have only been four new fuels approved since the dawn of aviation with Bleriot’s flight across the English Channel,” Brown stated. “Having a new source of fuel is important because it contributes to diversification of supply. Part of the intention of the scientific work we are doing is to move beyond 50 percent blends and optimise the fuel performance, but their certification will be a matter for the standards authorities, and will only take place after rigorous assessment and fit-forpurpose testing.” As the GTL kerosene component of GTL Jet Fuel has a higher hydrogen to carbon ratio, which enables greater energy density (the amount of energy stored in a kilogram of fuel), Brown said the lighter load weight might produce fuel saving benefits. “This means aircraft may be able to carry a slightly lower fuel load for a given range and/or carry a more useful payload if the aircraft is limited by maximum takeoff weight. The consortium is working to quantify the benefits of this further, but they may include a modest reduction in fuel consumption from the aircraft itself, when compared to aircraft using pure oil-derived kerosene.
Qatar Airways has committed to fuelling all of its fleet with the GTL kerosene fuel when it becomes available in commercial quantities. However, Brown said that, as Shell had other GTL applications under its banner, there would be further commercial discussion held with relevant parties. “Construction will be complete at Pearl GTL around the end of 2010, with project ramp-up then taking about 12 months. There are actually five GTL products from Pearl GTL, and GTL kerosene specifically will only be available from 2012. So there is some time for the relevant commercial discussions to take place,” he noted. “Obviously from Pearl GTL’s perspective, it is encouraging to hear comments from potential customers like Qatar Airways expressing enthusiasm for the product.” While the aviation industry provides the largest market for GTL kerosene fuel, Brown said it could also be used as a dry-cleaning agent. As GTL kerosene contains fewer emissions, he added that there could also be a potential market for its application in places where kerosene was used inside the home for heating, such as Japan. NOVEMBER 2009
17
BUSINESS INSIGHT – NATURAL RESOURCES & TECHNOLOGY In regard to the cost impact to consumers, Qatar Airways CEO, Akbar Al Baker, said that the GTL kerosene fuel was more expensive, which would be reflected in customer ticket pricing. However from Shell’s perspective, Brown said the benefits of the fuel were significant, but pricing would be subject to supply and demand. “We believe that GTL Jet Fuel’s potential to reduce emissions that affect local air quality around airports, and the fact that it is a new source of supply for the aviation industry, will make it attractive to airlines and airport authorities,” he stated. “The price of GTL Jet Fuel will be set by supply and demand, just like any other commodity. How our customers reflect the price of their fuel supply in their offerings to their own customers is really a matter for them.” To generate the GTL kerosene fuel, Brown said labour costs in the energy industry, although significant in absolute terms, were dwarfed by the cost of building the plants to produce Shell’s products, as well as the infrastructure to deliver them. “In terms of the economics of the GTL process compared to a conventional refinery, the key difference is that Pearl GTL is an integrated project,” he informed.
“This means that the Pearl GTL has no feedstock costs, as it includes wells, platforms offshore and pipelines to produce its own natural gas. A conventional refinery would buy crude oil as its feedstock on the open market at the prevailing price.” In regard to the implementation of new safety measures in which to handle the fuel, as well as its ease of adaption, Brown said a key benefit of GTL Jet Fuel was that it was a “dropin replacement”. “There are no modifications required to the aircraft engine, or indeed any other parts of the equipment or procedure, to get the fuel to the aircraft. Aircraft can fill up on GTL Jet Fuel in one airport and then fill with oil-derived Jet A1 at the next stop with no problems. As GTL kerosene fuel has been designed as a pliable product, Brown said the GTL Jet Fuel was just as transportable, throughout various logistical stages, as conventional Jet A1 was, while being fully miscible with Jet A1fuel. “No new technology is required [to transport GTL Jet Fuel] and existing equipment and infrastructure can also be used,” he informed. “New equipment and infrastructure would only be required
- Qatar’s Pearl GTL plant will turn natural gas into cleaner burning liquid fuels and other products. -
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if an airport wanted to provide both GTL Jet Fuel and Jet A1. Given that would entail duplicate additional expense, I feel it is unlikely airports would choose to do that, but it would be up to them. “As GTL Jet Fuel is a drop-in replacement, there is no issue with planes filling up with GTL Jet Fuel at one airport and then filling up with Jet A1 on subsequent stops.” The ASTM D7566 standard provides criteria for the production, distribution and use of aviation turbine engine fuel produced from coal, natural gas or biomass using the Fischer-Tropsch process. However, Brown said that Shell was constantly developing methods in order to produce new fuel types. “The gasification and FischerTropsch process technology used in GTL can be used with biomass (BTL) and indeed coal (CTL). We call the technology XTL because of this flexibility of feedstock. The highquality fuels are the exactly the same,” Brown stated. “Beside Fischer-Tropsch, Shell scientists are continuously looking for new pathways to manufacture fuels from various fossil and renewable resources as part of our research and development programme.”
BUSINESS INSIGHT – FINANCIAL REGULATION
THE GLOBAL AGENDA
Delegates from the international financial arena converged on Doha last month to discuss and debate the difficult questions that many bodies in the financial services industry are grappling with: regulatory infrastructure and the way forward for the global economy. Kelly Lewis spoke with Sir John Stuttard, vice chairman for PricewaterhouseCoopers, and former Lord Mayor of the City of London during the QFINANCE Global Debates to get his view on the situation.
- Sir John Stuttard, vice chairman for PricewaterhouseCoopers. -
D
uring the debates, there was much discussion about the predictability of the financial downturn. Some industry bodies raised the point that economic indicators were visible in the lead-up to the financial crisis, which they said should have been measured and put into context with historical economic patterns in a bid to prevent the global downturn. However, if the current economic environment was an outcome that could have been prevented, there should have been more foresight exercised by those in power. Further, proactive measures should have been taken to implement a robust regulatory framework rather than the reactive approach that is now taking place. The other matter
of concern has been the level of finger pointing and tit-for-tat among those playing the blame game. In Stuttard’s view, political leaders and governments are the parties that should be held most accountable before stringing regulators up as the guilty players and being allowed to wash their hands of the problem. “Governments are responsible for managing the economy, not regulators. Regulators are responsible for managing or regulating a portion of the economy,” he stated. “Governments are accountable for controlling the economic performance of a country. When you consider the massive amount of foreign exchange reserves that were being ploughed into United States’ (US) treasury bonds and European bonds by the economies of China, the Middle East and India, and to some extent Russia, it meant there was too much liquidity in the international markets at too little price. And because there was so much money sloshing around the system it resulted in interest rates being kept artificially low. “This was very beneficial to the US and European economies in particular, because as they had too much money in the financial system, it meant that it could be lent to whoever; consumers to borrow more than perhaps they should as well businesses and that led, frankly, to a credit bubble, which at some stage was going to burst. “The politicians; George W. Bush, Tony Blair and Gordon Brown – the US and the United Kingdom (UK) –
were very pleased to see this continuing economic growth and claimed to there electorates that this was a result of their wise policies. Brown in particular actually proclaimed this was the end of ‘boom and bust’.” Stuttard said that he was perplexed as to how Brown could have come to that conclusion, “why did he and the others delude themselves into believing this was a new era?” he questioned. Stuttard said that Brown, Blair and Bush were partly convinced by what they were told by the industry and economists, which was that they had discovered a “new paradigm,” and that “new paradigm was based on the securitisation of assets and the spreading of risk from certain financial institutions out to the wider world”. “These [economic] instruments that have all got funny names, people don’t really understand them; illegibly spread this risk and therefore enabled this new paradigm to be created,” he noted. However, Stuttard said there were some economists and analysts, who were doubtful and raised a voice of concern. But, Stuttard said: “if you’re a politician enjoying continuous economic growth year-on-year, it’s a very brave politician, who wants to get re-elected, that says ‘we’re going to put a stop to all this and actually try and reverse the situation’”. “Therefore I put the crisis primarily down to our leaders, our political leaders number one, not necessarily to the regulators.” NOVEMBER 2009
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BUSINESS INSIGHT – FINANCIAL REGULATION
- Economic policies pursued by former US President George W. Bush and British Prime Minister Gordon Brown have been heavily questioned by financial experts. -
While Stuttard believed political leaders were to blame in the first instance, he also highlighted the failure by regulators to act accordingly. “In the US, Alan Greenspan believed, and said in his book, The Age of Turbulence: Adventures in a New World, that the financial markets have become so complex that they’re not capable of being regulated. Rather, that they will self-regulate because there are boards of directors that have self-interest and therefore will only choose strategies, and manage risk that’s appropriate to their businesses. Greenspan said if they choose the wrong strategies, then the banks will just go bust,” stated Stuttard. “And that’s what will happen. That’s what happens in a free market economy. It’s terrifying stuff because we now know that not withstanding the fact the Lehman Brothers fell and Bear Stearns went its way, as did Merrill Lynch. Governments around the world have now decided that banks are too important to society to be allowed to fail. So Greenspan was totally wrong in the way he actually approached it.” In addition, Stuttard said there was another problem with US regulation in that there were too many regulators. “There is an insurance regulator 20
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for each state, for example there are regulators for the savings industry and regulators for personal loans. Greenspan thought this was beneficial because the individual regulators would compete with each other and therefore do a better job of regulating the whole market place, which is, again, a totally misguided concept,” he added. Stuttard said Greenspan was under the false impression that regulators in competition with each other would share knowledge. “We all know that competitors don’t share knowledge with each other, they keep their knowledge to themselves,” he said. Therefore in his view, Stuttard said that the whole basis of regulation in the US was flawed. However, in UK he noted that the structure of regulation was satisfactory, but it was the way in which it was implemented that was not sufficient. “The regulators in the UK, the Financial Services Authority (FSA), has admitted it did not do a proper job of regulating, for example Northern Rock, which was the first [of the high-street banks] to suffer problems,” he stated. “Two internal reports by the FSA have been self-critical of the work that it didn’t do in respect to regulating Northern Rock.
They also took the view in the UK that they would not be very interventionist; they would allow a bank, if it chose a particular strategy, to adopt that strategy. They might have discussed it with the board of directors, but they would not have been interventionists in terms of stopping that happening.” Therefore Stuttard said the regulatory environment in both the US and the UK comes into criticism because “it then actually failed to do its job properly”. “They all understand that now. They realise what went wrong. The greater problem now is how to deal with it because, around the world, the approach to regulation is vastly different and is based on history, local legislation, customs, practice and the varied development of the respective financial services industries,” Stuttard added. In Stuttard’s view there is no one regulatory size “that fits all” rather different forms of regulation that could be appropriate, but would depend on the extent that the financial sector had been developed in a particular country. He said the debate over appropriate regulation measures was ongoing. “It’s been ongoing for about 18 months now, it’s going extremely slowly,” he claimed. “The debate is focusing, unfortunately, on some simple and politically-orientated considerations, like bankers bonuses, which always excites everybody and is very good for votes, but it’s not really tackling the real issues. So there’s a problem out there at the moment waiting to be solved. But in regard to both domestic and international regulatory systems, the question remains: how effective can regulation be without tangible penalties for those that do not abide by regulatory rules? Further, if governments continue to bailout financial bodies rather than enforcing harsh penalties, how effective can regulation really be? In response to this, Stuttard said that regulators firstly needed to understand what their true role was. “You have the Greenspan philosophy, which is very different from that adopted by, say, the regulator in Hong Kong – the Hong Kong Monetary Authority (HKMA) – its CEO, Joseph Yam, is
BUSINESS INSIGHT – FINANCIAL REGULATION very much an interventionist; or Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC) in Beijing who, similarly, is an interventionist,” he noted. “So the first thing is to actually work out what is the right philosophy of regulation, and with the implicit government backing and guarantees now, regulators need to be much stronger. They need to be much more interventionist. I think that change is beginning to happen.” Secondly, Stuttard said regulators needed to be more capable of doing their job properly and independently. Recently, Stuttard said he discussed this issue with delegates from a Chinese bank. He asked them how they managed to recruit high-quality employees into the CBRC without having to pay them too much for working in a civil service role. The answer they provided him with was that people saw it as an honour to work for the CBRC and for the state. “That’s great in China’s case, but in the US and the UK we have a problem in that many of the regulatory staff that manage executives are not paid anywhere near what their counterparts
are paid industry,” he stated. “So, the question is: how do you actually attract the right people in the first place and then retain them? And how do you train and make them more business aware? “Clearly a regulator can’t do the job properly unless they understand the business risks, and if they are not capable of understanding the industry
“The level of communication has not been as high-quality or advanced as it could have been. For example, in the UK, the FSA has been quite domestic in its approach to this particular issue,” he noted. “There are many changes that need to take place at a global level and the heads of the regulatory bodies need to be more strategic as to how
“I disagree completely with Lord Adair Turner, who almost cynically diverts the attention from the fact that the FSA didn’t do a proper job...” - Sir John Stuttard and the risks, then they can’t effectively carry out their job.” Stuttard highlighted the issue effective training and retention as being a large area of concern for regulators going forward. The third area that Stuttard flagged up for improvement was international cooperation and communication between regulators.
they actually approach their organisations. “And I disagree completely with Lord Adair Turner [the chairman of the UK’s FSA], who almost cynically diverts the attention from the fact that the FSA didn’t do a proper job, to instead criticising the banking industry for being, in some parts, not socially useful.”
- Hundreds of anti-capitalist protesters gathered in New York’s financial district earlier this year to rally against Wall Street and the recent government bailout of banks and financial institutions. -
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BUSINESS INSIGHT - AVIATION
BLUE SKIES AHEAD
In a bid to meet the growing demand for affordable air travel in the region, flydubai launched its Middle East operations in June this year. Last month, the airline completed its inaugural flight within the Gulf Cooperation Council (GCC) region when it touched down in Doha. To find out how operations have been travelling Kelly Lewis spoke with flydubai’s CEO, Ghaith Al Ghaith.
- Ghaith Al Ghaith, CEO of flydubai. -
A
t the Farnborough Air Show in the United Kingdom last year, flydubai signed the single-largest order by a lowcost Gulf carrier with Boeing. Under the terms of the US$4 billion (QR14.7 billion) agreement, the aircraft manufacturer will deliver a total fleet of 54 Next-Generation 737-800 aircraft by 2016 - a direct partnership for 50 aircraft was struck with Boeing, while flydubai signed a separate leasing agreement with Babcock and Brown Aircraft Management for a further four aircraft. To date flydubai has a bunker of five aircraft, with new additions expected next month and again in March 2010 to bring its fleet acquirement to seven. Ghaith said Boeing’s 737 feet of craft was an ideal fit as the single-aisle aircraft, with 189 passenger seats, met the demand of its core flying range, which spans a four-and-a-half hour radius. 22
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“When we drafted our initial blueprint for the airline, we knew the market area we wanted to cover,” informed Ghaith. “To cater to the daily departure and return flight to each destination and to keep our overheads low, there were two suitable aircraft manufacturers that filled our requirements: Boeing’s 737 family of fleet and Airbus’ A320 and A319 family of aircraft. We opened the tender for bidding and negotiations, and at that time Boeing was the best option in terms of effectiveness, efficiency and cost.” Additionally since the partnership began, Ghaith said Boeing had been able to complete all its deliveries on time. He added that while the economic downturn produced difficulties for other airlines and forced some to cancel fleet orders, fortunately for flydubai it was able to receive more than its originally scheduled, (2009) delivery of four aircraft to six. From this month, the airline’s flight offering extends to its seventh destination and Ghaith said that before year-end flydubai would have announced a total network of 12 flight paths. While flydubai’s destination route is focal to the Middle East and North Africa region, Ghaith said that the South Asia region also presented as an attractive market for the carrier. Flydubai currently offers flights to destinations in Qatar, Lebanon, Jordan, Syria, Egypt and Africa. While he would not comment on budgeting requirements, Ghaith was optimistic about the market demand in Qatar and other destinations, and
anticipated there would be a high passenger turn over. Ghaith also added that any increase in daily flight schedules to individual destinations, would only be considered on a demand basis. When flydubai launched its recruitment drive for pilots earlier in the year, Ghaith said he was overwhelmed with the number of applications received from around the globe. “We received around 7000 applications for pilot positions. So to have received that many shows the high-level of interest in the market here,” stated Ghaith. “We have been very successful in acquiring a core team of top-tier pilots from all over the world and when it comes to our commitment to the region, we will definitely develop home-grown resources to foster ongoing training in order to ensure that there is a steady flow of capable pilots being trained locally,” he said.
MARKET WATCH
The Emerging Economic Trends Martin Menachery, the senior editor of The Wealth Matrix magazine for Arab Capital Markets Resource Center (UAE), discusses the economic environment within Qatar and its diversification threshold.
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MARKET WATCH
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ith a nine percent gross policies aiming to diversify income liberalising the economy. Other efforts domestic product (GDP) sources and develop its economic by the government include employing growth forecast for the infrastructure. In fact, the country a new economic policy of public year 2009, Qatar seems has bolstered its efforts to put its expenditure as well as diversifying the to be going steady despite the global hydrocarbon wealth to the best possible use. sources of national income to include economic slowdown. However, The economic reform programme non-oil sources. even after diligent efforts towards of the Qatari government aims to As a result, Qatar has experienced diversification and various reform increase the role of the private sector strong economic growth as well as measures, the country’s economic by promoting the privatisation of fiscal improvement. The country now performance still fluctuates with oil more state-owned enterprises. The displays healthy economic progress, prices. Apparently, the projected GDP government is also continuing with the with a surplus in the account of the growth also counts on the increasing ‘Qatarisation’ of its labour force. expenditure scale, a deficit reduction gas production in the country. Consequently, the number of in the general budget along with more Qatar will account for one-third of Qataris in the national workforce has steady inflation and exchange rates. the global liquified natural gas (LNG) increased substantially, especially in supply by 2010. In addition, Qatar is the financial, tourism and petroleum Global economic crisis a financial and business hub, home to sectors. The government has put in In the Gulf region, the impact of the many international financial service sincere efforts to involve Qataris in financial crisis has been felt in some providers and multinational companies. all sectors of the economy. countries more than the others, which Oil and gas industries are the has been dependent on the bastion of the Qatari economy. independent level of economic However, its economic policy openness and the size of the “Qatar’s economy is aims to advance the returns natural resources. comparatively in a more from the oil and gas resources Qatar’s economy is to projects that would create a comparatively in a more stable position, owing to its strong industrial base for the stable position, owing to its state. Qatar has been focused on gas reserves. The revenue gas reserves...has actually its diversified agenda for some from its natural gas resources cushioned the economy time and has carefully selected has actually cushioned the a path of reform to guide its economy against the affects of against the affects of economy from an oil-based to a the crisis. The credit also goes the crisis. The credit also goes to its conservative approach knowledge-based one. Taking new approaches, towards investment. to its conservative approach Qatar encourages foreign A key factor that towards investment.” capital investments as well supported the country’s as participation of the economic buoyancy during - Martin Menachery private sector in its economic the global crisis has been activities. The Qatari economy its plans to double its is one of the fastest expanding production capacity in 2009. The state is one of the few economies On April 6, 2009, Qatar launched its economies in the world, riding on the continuous hike of its GDP, attributed in the world that is forecast to grow Qatargas 2 project, which has formed to the increase in oil prices as well as between seven and nine percent in 2009. an integrated value chain containing the state’s increased gas productivity Also, the economic growth of the country three different offshore platforms. and gas exports. However along has been in double figures for the past Additionally, most banks in Qatar with oil and gas, the construction five years, reaching 44 percent in 2008. have chosen to take vigilant approach and building, real estate and financial The country, being the world’s largest to business during the downturn, while services sectors are also becoming LNG exporter, has enough resources to remaining under the watchful eye of support its economic growth as well as the government. However, the emirate economic drivers for the emirate. future economic plans. has not totally escaped the effects of The government has initiated its long- the credit crunch, as investments in the Economic reforms Similar to many other GCC countries, term economic plan with expansion of country reduced due to loans being less Qatar’s government holds the oil its oil and gas exploration projects. available. In fact, the state government revenue in the state and government It also offers incentives and perks to declared it would buy US$1.79 billion spending is the only way to pass on attract foreign investors in similar (QR6.5 billion) worth of shares form the wealth to the society. However, projects in the country. In addition, its local banks in March 2009, in a the Qatari government has continually Qatar has issued various regulations bid to support its economy and boost increased its efforts to implement simplifying investment processes and confidence in the banking sector.
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MARKET WATCH
“The country is now counting on its cash reserves, growing gas production and slow upward movement of oil prices to combat the global economic turmoil, as well as steady economic growth in the coming years.” - Martin Menachery
EMERGENCE OF QATAR INTO THE GLOBAL SPECTRUM Qatar – ranked 172th in the world for its land-mass area – has emerged as the richest economy in the world, which was never been in the limelight prior to the rule of H H the Emir Sheikh Hamad bin Khalifa Al Thani. Abundance of natural gas resources and its best utilisation is the foundation of the nation’s success. Qatar’s proved reserves of natural gas are nearly 26 trillion cubic metres, about 14 percent of the world total and third largest globally. The revenue derived from natural gas is continuously being used to diversify the economy. The country’s economic freedom index, which is developed by The Heritage Foundation, has been improving on a gradual basis over the past decade. The establishment of Qatar Exchange (a joint venture of Qatar Holding and NYSE Euronext) will certainly pave the way to bring Qatar’s financial market into the global spectrum. Market value of publicly traded shares in December 2007, was US$95 billion (QR346 billion), which is the 49th largest in the world; it dropped to US$75 billion (QR273.1 billion) in December 2008. For the first nine months of 2009, it stood at US$65 billion (QR236.7 billion) and is expected to match 2008 levels despite the global recession. Direct financial inflow into Qatar is much less than the outflow, which shows the aggressive stance and diversification of its investment portfolio. Foreign direct investment in Qatar stands at US$3.62 billion (QR13.2 billion) as per 2008 figures. According to the International Finance Corporation (IFC) – the World Bank’s
private investment arm – Qatar’s total foreign assets was estimated to be more than US$90 billion (QR327.7 billion) by mid-2009.
single digit in small banks. In Qatar, the EM in 2006 was 5.78, which stood at 6.52 in the second quarter of 2009. In terms of market positioning, risk
The banking sector in Qatar is robust and has the potential to grow at an even in faster pace. Although the return on assets (RoA) dropped significantly in first and second quarter of 2009, with the exception of Ahli Bank QSC and Qatar National Bank, the return on equity (RoE) has remained stable for the past four years and is expected to hover near 20 percent by year-end. Equity multiplier (EM) is the factor by which assets grow from the use of debt, meaning banks rely more on debt to finance its assets, which is not a very healthy sign. Generally, 15 to 20 multiples are considered to be normal in large banks. However, it must be in
positioning, liquidity, profitability, efficiency and capital adequacy, Qatar National Bank ranks second among the publicly listed banks in the GCC. This analysis of the banking sector in Qatar was provided by Taimur Saadat (CMT, MBA), head of Technical Analysis, Arab Capital Markets Resource Center, Dubai, UAE. The views expressed in this article are opinions derived from available economic and market data and are not necessarily endorsed by Arab Capital Markets Resource Center. Nisha Abraham also provided editorial input for this article.
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INSIDE EDGE
INSURANCE AND
REINSURANCE
IN THE GCC The Middle East insurance and reinsurance market presents a kaleidoscope of possibilities. While countries in the GCC have the highest gross domestic product (GDP) per capita among emerging markets, the insurance sector remains largely untapped within many countries throughout the region. The relatively nascent markets combined with high per capita income, the scale of growth in insurable assets and competitive economies presents a landscape with multiple opportunities.
- Rajesh Mirchandani. -
Rajesh Mirchandani the CEO of Dun & Bradstreet South Asia Middle East investigates.
INSIDE EDGE
T
hroughout the past decade, several governments in the region have implemented legislation to help insurance firms, both local and foreign, expand their activities in the region. These policies are supporting the development of insurance markets both in terms of size and sophistication of products. Having said that, the ongoing financial crisis is likely to have lasting impact on the way the industry is structured within the GCC region.
PENETRATION AND GROWTH POTENTIAL
The adoption rate of insurance products in GCC economies is lower when compared to countries that share comparable income levels in the world. This is especially significant considering that the region is home to some states, with very high per capita income levels. The GCC insurance sector only accounts for 0.15 percent of the global insurance industry and insurance premiums, as a percentage of savings are significantly lower in the region as compared to the world average. This reflects a poor uptake of life insurance in the region. The world over, the quota of life insurance products is higher than non-life insurance, however in the GCC region the penetration of life insurance is substantially lower than non-life insurance items. The per capita insurance premium of the Middle East and Central Asia in 2008 was US$110 (QR401), according to figures provided by the World Bank, which is higher than that of South and East Asia (at US$65 or QR239), but lower when compared to Latin America and the Caribbean (at US$176 or QR640).
The relatively lower uptake of insurance in the region can be attributed to cultural and social reasons such as family support, government subsidies and also a limited awareness of the insurance industry. This presents a huge opportunity for both traditional and Islamic insurance (Takaful) products. Although small in size, the insurance sector in the GCC has witnessed steady growth in recent times. The industry registered a compound annual growth rate (CAGR) of 20.5 percent between 2002 and 2006, which is higher than such growth rates across world markets. While product diversity remains limited to industrial risk in the region, all major business classes such as property and maritime to aviation
- Compared to other global markets, the GCC has a poor uptake of life insurance products. -
and logistics have experienced considerable growth in premium volumes in the last few years. The introduction of mandatory insurances, including health protection and vehicle insurance has resulted in an exponential growth in demand for products in these categories. Also, the maturing of local and foreign investors is likely to continue to spur the demand of more sophisticated insurance products. With the net retained premium revenue lower than other countries of similar wealth, international reinsurance support will remain vital for its growth in the GCC region especially for more complex and large risk applications. In recent times, the business environment for the insurance sector in the GCC has become more favourable with the development of unique regulatory frameworks and related statutes. The development and adoption of Takaful standards by the industry, combined with the support shown by the individual state government’s has contributed to the rapid growth in this sector. The region has witnessed a proliferation of international insurers taking advantage of the lack of product diversity and growth in premiums. Takaful products have played a role in tapping the dormant demand for insurance that was not met by earlier products. A related development has been the growth in the Islamic reinsurance markets, with the entry of new insurers from both a local and international level. While in the long run consolidation in the industry is inevitable, the ongoing financial crisis tests the structure and integration of this sector into the fabric of GCC’s financial infrastructure.
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INSIDE EDGE
FINANCIAL CRISIS AND EMERGING TRENDS IN GCC INSURANCE INDUSTRY
The global financial crisis was transmitted to the Middle East primarily in the form of significantly reduced energy and real estate prices, which impacted all the sectors of economy. The fluctuating oil prices and the related drop in savings levels has impacted investments as well as the growth rates in all GCC countries. The insurance sector has had mixed fortunes – growing, falling, or stagnating in different countries. The crisis reduced the insurance growth rate in the region – the inflation adjusted growth in premium volume fell to 4.7 percent in 2008 from 10.9 percent in 2007 – and also exposed fundamental issues in the structuring of the insurance industry.
force them to exit the market or to look for consolidation. Mergers and acquisition could be the way forward to help companies stay solvent in most parts of the GCC insurance industry. This change and uncertainty in the market would likely offer opportunities to those companies, which can rebalance their portfolios away from unprofitable business, realign their product offerings, manage pricing and excel in client servicing. Although economic conditions are likely to improve beginning early 2010, most players are likely to pursue a defensive strategy to ensure protection of existing accounts. An additional factor to consider is the regulatory changes that are expected to take shape in many countries. In the UAE for example, is likely the country will introduce new
- Investors at the Doha Securities Market wait to see the fate of insurance giant AIG last year. -
The financial crisis clearly had an impact on the insurance sector in the region. The falling sales of motor vehicles significantly impacted on motor insurance products; the drop in stocks and the asset value of real estate impacted the property insurance volumes; maritime insurance premiums per transaction witnessed a decline of almost 30 percent in the United Arab Emirates (UAE) in the first half of 2009 as compared to the same period in 2008. The rising unemployment across the region and declining payrolls also impacted heavily on the volume of liability insurance, which in turn escalated the number of premium refunds and policy cancellations. Additionally, the cancellation and delay of numerous construction and engineering projects further decreased insurance volumes. While the business sentiments in the region remain cautious, there is limited investment coupled with an increased focus on reducing costs, therefore the rivalry between insurers to deliver more competitive premiums is likely to intensify. Insurance companies might have to drive down rates to attract additional business as they look to cover incorporation costs and in order for them to meet shareholder, and market expectations. This will marginalise the weaker players and
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insurance regulation in 2010. The Saudi Arabian Monetary Agency has prohibited unlicensed companies (in Saudi Arabia) from writing new businesses and in Oman and the state’s Capital Market Authority is taking an active interest in redefining solvency requirements. European Solvency II regulations, which are to be implemented in 2012, will also have an impact in consolidating the industry further. Broker consolidation is also likely to be a consequence of the ongoing crisis. The steep growth experienced in the GCC insurance sector during 2002 to 2006 led to a mushrooming of brokers in the region. Mergers and acquisitions are to be expected in the sector, which will lead to an emergence of a smaller, but more stable broker community. With a substantial drop in equity and real estate values, insurance companies in the region are likely to focus on core underwriting activities. Also, the expected renewal of treaty programs at the expiring term will place pressure on technical margins in reinsurance. There is an expectation that the reinsurance rates will soften, but as yet there are no confirmatory signs to this effect. As the insurance market in the GCC continues to adjust rapidly, with time it is likely to emerge stronger and ready to support regional growth.
INSIDE EDGE
INSURANCE SECTOR IN QATAR, THE WAY FORWARD
Insurance companies in Qatar have witnessed a significant growth throughout the past few years, with total insurance premiums from 2002 to 2006 showing a CAGR of 28 percent. This has been driven largely by a dynamic, sustainable and an increasingly diversified economy, high GDP per capita, a world-class business environment and a progressive government. As is with other countries in the region, the non-life insurance segment dominates the market and accounts for approximately 89 percent of the business in Qatar. When compared to other countries in Middle East, Qatar exhibits a lower number of insurance providers. The market is also significantly underinsured with the aggregate insurance penetration, as a percentage of GDP, at 1.5 percent, which is significantly below the world average of 7.5 percent. Therefore, there is enough demand expected for the growth of insurance sector in the days to come. Looking ahead, the real estate industry in Qatar will serve as a primary driver for the insurance industry, which is expected to fare better than many of its GCC counterparts in light of current economic
slowdown. The premium retention levels for Qatar are among the highest in the GCC at 64 percent against a GCCwide average of 47 percent; these figures provide scope for the reinsurance business. The population of Qatar, which as per official count aggregates to an excess of 1.5 million, has grown by more than 100 percent in the past five years and will play an instrumental role in generating demand in the real estate and construction sector. According to a study produced by the Qatar Financial Centre, by 2013 Qatar is expected to generate premiums of US$1.48 billion (QR5.39 billion) from general insurance fuelled by property and accident risk coverage. The GCC insurance and reinsurance markets are at the beginning of a cusp of a long and sustained growth. There is a high possibility of market consolidation taking place as smaller players are forced to concede ground to well-financed and large firms, which offer more sophisticated products. Ultimately, rising awareness and requirement, transparent regulations and legal support, greater integration with the global economy and the increasing number of players and sophisticated products will ensure the growth of the insurance markets in the years to come.
- The non-life insurance segment accounts for approximately 89 percent of the business in Qatar. -
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29
COVER STORY
DOWNSTREAM
INDUSTRIES
ON THE UP Despite Qatar’s efforts to further diversify its national income and reduce its reliance on depletable resources, the oil and gas sector remains as the backbone of the country’s economy. By Kelly Lewis and Abdel Rahman Abdel Basit.
COVER STORY
I
n recent years the Middle East has become recognised as the hub for the global petrochemicals industry, with Gulf Cooperation Council (GCC) countries emerging as the largest producers and exporters of petrochemicals and plastics. However, while the industry has not been immune to the economic impact of global slowdown, it has continued to show strong signs of growth. Experts say that ambitious investment initiatives into the petrochemicals sector – which have been earmarked for 2010 totalling more the US$50 billion (QR182 billion) and US$12 billion (QR44 billion) in Qatar alone – has cemented the Middle East’s position as the ‘natural home’ for the petrochemical industry. The Middle East offers a superlative opportunity for companies in this sector and with huge volumes coming on line over the next few years – the GCC becoming the focus of international polymer producers and converters – there is immense growth potential for the regional downstream plastics industry. For example, today Saudi Arabian low-density polyurethane (LDP) is delivered to Chinese factories at prices lower than locally produced LDP: • Production of polyethylene-based products in the Middle East is projected to grow by 20 percent in 2010. • Middle East share in the global ethylene market is expected to grow from nine percent in 2004, to 17 percent in 2010. • And 40 percent of all new ethylene capacity will be built in the Middle East. The Financial Times has made clear its view, saying that the present crisis may be the making of the Gulf’s chemicals industry. Chiefly, it says this is because of easy and cut-price access to oil and gas. Seeking to capitalise on this advantage, governments have thrown cash at their petrochemical industries in recent years, expanding total output to US$59.6 billion (QR217 billion) and an annual growth rate of more than nine percent since 1997. The Gulf focuses mostly on basic petrochemicals such as ethylene, polyolefins, polypropylene, but will soon be able to produce a wider array of chemical products and it is already a leading manufacturer of fertilisers.
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31
COVER STORY
MARKET OVERVIEW
World demand for plastics produced in the GCC region fell during the 2008/09 period, but according to a market report released earlier this year by United States (US) consulting firm, Frost and Sullivan: Strategic Analysis of the Polyolefins Demand in the GCC, it will rise again in 2010/11. Frost and Sullivan forecast a 4.7 percent fall in demand in 2009, but it expected a rebound in 2010 and 2011 – with demand for polyolefins – the basic building blocks for plastics – to grow by 3.7 percent. The firm did not give absolute figures. The report identifies the GCC’s ambition to emerge as a major polyolefins production hub has resulted in the rolling out of several capacity-expansion projects in the polyolefins market. It says that capacity additions are expected to create a surge in the demand for polyethylene and polypropylene, even though the GCC market has already been penetrated. Additionally, governments within the GCC are looking to take advantage of the low costs and abundant feedstock in the region to promote downstream industries for further diversification and development. “The GCC governments are initiating multiple strategies to help GCC countries to grow from being exporters of polyolefins to exporters of finished polyolefin products,” says an analyst of the research. “The most significant of the new initiatives, which reiterates the governments’ strategy to strengthen the private sector, is the initiation of economic cities to facilitate greater inward investments to the GCC.” With governments promoting investments, Frost and Sullivan says there has been numerous joint ventures between foreign companies and local establishments in the GCC. In addition, the influx of more funds has further catalysed the creation of new capacities, which are anticipated to be functional by 2010. Frost and Sullivan’s report finds that the extra capacity is a boon to the polyolefin market because its end-user industries are largely still developing and that tepid domestic demand, coupled with the economic downturn, will continue to see 2009 endure a weary level of performance. However, it highlights that, as the planned capacities turn operational and end-user industries start maturing, the market is likely to experience moderate growth by 2010. The report also states that the low level of local demand for export of finished polyolefin has squeezed market participants’ profit margins, especially because it is a price-based market. “Polyolefins being commodity products by nature; product development is of the utmost importance,” informs the analyst. “In order to sustain their current rate of growth and to grab additional share in the market, companies must focus on streamlining their products according to end user requirements.” Therefore, the report finds that polyolefin companies will need to invest heavily in research and development in order to identify ways in which their products can deliver better value.
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- GCC governments are looking to promote downstream industries for further diversification and development. -
INDUSTRY OVERVIEW
The oil and gas industry have given rise to several related industrial processes in the form of joint projects. The most important of these projects are:
DOLPHIN ENERGY PROJECT
It is significant to emphasise the importance of the GCC gas network, which was implemented under the Dolphin Energy Project in 1999. The gas pipeline was conceived to produce, process and transport natural gas from Qatar’s North Field to the United Arab Emirates (UAE) and Oman, in order to support long-term industrial growth. In mid-2007, Qatar started providing the UAE with one billion cubic feet of gas per day; this value increased to reach two million cubic feet at the end of the first quarter of 2008. At the same time, Qatar started supplying Oman, in July 2008, with 200 million cubic feet of liquefied gas. The total length of pipelines between Qatar and UAE is 370 kilometres, with an inner diameter of 48 inches. This pipeline extends from Taweelah in the UAE)
COVER STORY
and Ras Laffan in Qatar and crosses the regional waters of both countries. The Dolphin Energy project is one of the most strategic initiatives in the Gulf region and will enhance the opportunities of economic cooperation between the GCC states. It will aid with the implementation of more projects and successful businesses, especially those that depend on gas as a source of energy (petrochemicals, aluminium, iron and steel), and will provide appropriate conditions in which to document the economic integration between these countries. In addition, the project is a strong support to the electrical grid network between the GCC countries; it reduces production costs, meets the growing demand and also constitutes the base of establishing the upcoming gas network. The oil sector in Qatar has witnessed important actions and activities since its early inception, reflected in the establishment of several large industrial projects, including Qatar Petrochemical Company and Qatar Fertilizer Company.
QATAR PETROCHEMICAL COMPANY (QAPCO)
Qatar, considered to be the leading gulf state in the petrochemicals industry, has confirmed the principle of diversification of income resources and formed a venture, which is based on profiting from the vast natural resources available in Qatar, as well as developing and promoting local infrastructure industries that depend on these resources. QAPCO, founded in 1974, began operations in 1981 with the production of ethylene, low-density-polyethylene and sulphur as a by-product, with a production capacity of 550,000 tonnes of ethylene. This quantity increased in 2007 to 720,000 tonnes of ethylene and 360,000 tonnes of polyethylene. QAPCO has opened representative offices throughout the world and built a marketing network in 87 countries. QAPCO is currently implementing the QATOFIN project by entering into a joint venture agreement (QAPCO having 63 percent, Total Company 36 percent and Qatar Petroleum (QP) one percent), to produce linear lowdensity polyethylene LLDP in Mesaieed, with a 450,000 tonnes capacity per year. QATOFIN project forms part of an integrated project, which includes the Ras Laffan
ethylene cracker plant in Ras Laffan Industrial City. This project is based on a partnership between QAPCO (45.7 percent), Q-Chem (53.3 percent) and QP (one percent), which will produce approximately 1.3 million tonnes of ethylene annually.
QATAR FUEL ADDITIVES COMPANY (QAFAC)
Qatar Fuel Additives Company Limited (QAFAC) produces methanol with a capacity of 832,000 tonnes and a methyl tertiary butyl ether capacity of 642,000 tonnes annually. In addition, Qatar Vinyl Company produces a 320,000 tonnes of vinyl chloride monomer per year, 175,000 tonnes of ethylene dichloride and 300,000 tonnes of caustic soda per year. Qatar Chemical Company (Q-Chem) also produces 500,000 tonnes of ethylene, 273,000 tonnes of linear highdensity polyethylene and 47,000 tonnes of hexane per year.
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SECTION COVER STORY
LIQUEFIED NATURAL GAS (LNG)
It is worth noting that the GCC, in particular Qatar, became the largest exporter of LNG in the world in 2008. Since then it has made significant progress in the production of liquefied gas, most notably in the establishment and construction of facilities, as well as in its technical equipment capacity, to facilitate the exportation of LNG. This has led to the diversification of income derived from the oil and gas sector, aided in boosting the national economy, increasing the added generated value of the production process and has led to new job creation.
CHEMICAL FERTILISERS
The GCC has witnessed the successive growth of factories throughout the region – most of which is based in Saudi Arabia and Qatar – with a total of 23 factories operating in the field of chemical fertilisers in 2007, with investments totalling US$6 billion (QR22 billion). These factories employ more than 6000 workers and produce around 20 million tonnes of various chemical fertilisers, including ammonia. Saudi Arabia and Qatar hold around 62 percent of the market production through Saudi Basic Industries Corporation SABIC and QAFCO – the two largest chemical fertiliser companies in the region. The fertilisers industry is currently witnessing the expansion of large projects, such as the QAFCO project in Qatar, which aims to produce 1.2 million tonnes of ammonia as well as urea by 2010.
IRON AND STEEL INDUSTRY
QASCO (currently Qatar Steel Company) was established in 1974 and became operational in 1978, with a production capacity of 400,000 tonnes of reinforced steel. Later, capacity was increased to 750,000 tonnes and then 1.5 million tonnes. QASCO adopted the gas-based direct reduction process technology into its integrated steel complex for iron making by transforming the iron pellets into sponge iron. The process includes placing the sponge irons into an electric arc furnace to be melted and combined, which are then transferred to continuous casting for the production of steel blocks. These blocks are then sent to the rolling mill to produce multiple measurements of reinforced steel bars.
QATAR ALUMINIUM COMPANY (QATALUM)
Qatar is currently implementing a large project on aluminium smelting in Mesaieed Industrial City (QATALUM), with a production capacity of 585,000 tonnes, which equates to US$5.6 million (QR20.3 million). QATALUM is a joint venture between Qatar Petroleum and Hydro Group (Norway). The plant is expected to be operational in 2010.
- The GCC’s ambition to emerge as a major polyolefins production hub has resulted in the rolling out of several capacity-expansion projects. -
Number of factories
%
Investment/ million
%
Number of labours
%
Food, beverages and tobacco
62
10.2
210
1.6
2363
6.7
Textile, clothing and leather
32
5.3
45
0.3
5979
17.1
Wood products and furniture
58
9.5
33
0.3
2115
6.0
Paper industry, printing and publishing
34
5.6
85
0.6
912
2.6
Chemical and plastic products
103
16.9
10,873
82.8
9648
27.5
Products from non-metallic raw materials, excluding oil
169
27.8
663
5.0
6810
19.4
Basic metal production
5
0.8
906
6.9
2379
6.8
Fabricated metal production, machines and equipment
133
21.8
303
2.3
4,457
12.7
Other manufacturing industries
13
2.1
7
0.1
357
1.0
Total
609
100
13,124
100
35,020
100
- Source: Industrial Information Unit – Gulf Organization for Industrial Consulting. -
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NOVEMBER 2009
NUCLEAR DETERRENCE & SECURITY
Nuclear proliferation and deterrence are among the main security issues currently taking centre stage in the Gulf. The Gulf Cooperation Council (GCC) states are increasingly concerned about Iran’s nuclear ambitions and the potential impact of an Iranian military nuclear programme, not only on the GCC states but the wider region. It is against this backdrop that the Gulf Research Center, in conjunction with the Center for Contemporary Conflict in California, US, recently hosted a conference entitled Strategic Stability in the Gulf Region. The twoday conference focused on issues such as deterrence, security guarantees and nuclear proliferation and how these would affect the regional and global environment. By Kelly Lewis and Gulf Research Center.
NUCLEAR DETERRENCE & SECURITY
T
he idea of extended deterrence is a product of the early Cold War. It reflected the shared concern of the nuclear superpowers that the spread of nuclear weapons would complicate their relationship with each other, and make it more dangerous. Each accordingly declared itself willing to extend the protection of its nuclear arsenal to allies and clients. The widespread acceptance of this idea may seem surprising, to the extent that its credibility depended on the willingness of non-nuclear states to believe that their protector would expose itself to potentially mortal perils on their behalf. Nevertheless, it was widely believed that neither the United States (US), nor the Union of Soviet Socialist Republics, could tolerate the loss of prestige and credibility that would follow an unavenged nuclear attack on one of its partners. As a consequence, the concept of extended deterrence proved robust. Even states for which nuclear weapons were within easy technological reach generally judged that the risk of owning them was greater than that of trusting the protection afforded by established nuclear powers. Extended deterrence was supported by a system of security guarantees, most of which were of a familiar and traditional kind; a declared willingness by states to cooperate in each other’s defence and to fight side-by-side in given circumstances. In the nuclear era however, a new form of guarantee was introduced, one that was extended not merely to friends, but to rivals and adversaries as well. States known to possess nuclear weapons promised not to employ them against any that did not, in exchange for a countervailing promise that states without nuclear weapons would not attempt to obtain them. This exchange of promises lies at the heart of the nuclear non-proliferation regime established in 1968.
Nevertheless, nuclear proliferation remains a major threat to stability in the Persian Gulf and elsewhere. The Cold War structure of extended deterrence was defined by the logic of nuclear confrontation. Except in a few specific contexts (e.g. the North Atlantic Treaty Organisation (NATO) alliance), it did not address conventional threats, to which some states may well regard nuclear weapons as an effective answer. Nor did it offer much comfort to states, which associated the possession of nuclear weapons with prestige and influence – a perception that was reinforced by the general reluctance of states with nuclear weapons to given them up. The disappearance of the Soviet Union, finally, has (perhaps paradoxically) called into question the continued credibility of the extended deterrence offered by the US. When there were two ‘nuclear umbrellas’ it was easy (or at any rate convenient) to assume that each covered whatever the other did not. Now that there is only one, its exact extent has become uncertain, as have the conditions under which its protection might be withdrawn. The Strategic Stability in the Gulf Region conference explored the logic and functioning of extended nuclear deterrence and associated security guarantees in the Persian Gulf, a region that is currently free of nuclear weapons, but may not be for much longer. One state in the region, Iran, is widely believed to be in active pursuit of a nuclear arsenal, a prospect that has been declared unacceptable by many outside powers, ranging from the European Union to China. Two of them – Israel and the US – are thought to have developed plans for direct military intervention against Iranian nuclear facilities, in the event that diplomacy fails to halt Teheran’s weapons programme (the existence of which Teheran denies). NOVEMBER 2009
39
NUCLEAR DETERRENCE & SECURITY
Such intervention, needless to say, would be profoundly destabilising for the rest of the Gulf. So too would Iranian success. Saudi Arabia in particular is thought likely to seek its own independent nuclear deterrent to counter an Iranian nuclear arsenal (as might Egypt, slightly farther afield). While other Gulf states may not view the Iranian programme with the same degree of alarm as Riyadh, their equanimity becomes markedly reduced when considering the possibility of a Saudi-Iranian nuclear standoff. The politics of nuclear weapons are also influenced by the politics of nuclear energy. Its attraction to states in the Gulf is a source of suspicion for some observers, who fear that such projects, particularly when conducted by states floating on an ocean of oil, can only be a mask for weapons development. Historically, the connection between nuclear energy and weapons proliferation is not strong – though the fact that the Iranians have explained their own interest in nuclear technology in terms of a desire for nuclear energy has muddied the water in this regard. A number of Gulf states, including Saudi Arabia, the United Arab Emirates and Bahrain, have declared that their programmes would not include an indigenous uranium enrichment capability – the critical building block for a weapons programme that the Iranians have so far refused to relinquish. At a minimum, the accelerating interest in nuclear power among Gulf states will complicate the task of detecting weapons proliferation and restraining the spread of nuclear technology and materials beyond the control of regional governments.
CONFERENCE REPORT
To discuss such multifaceted issues, the conference if Iran emerges as a nuclear power. In this context, it was began with a discussion on the history of extended asked if the defence umbrella includes a nuclear component deterrence and security guarantees in the Gulf. The to protect the GCC states from an external nuclear threat. current security system in the Gulf was examined from a Is the US sending a new signal to the region that it might local viewpoint and the main concerns were highlighted. The not be able or willing to prevent the progress of the Iranian discussion then focused on the potential threat that a nuclear nuclear programme? And is it indicating that the Gulf will Iran could pose in the region. soon see Iran as a nuclear power? It was pointed out during In this context, it was made clear that the Gulf prefers a the conference that there were certainly limits to providing diplomatic solution, rather than a military one, to resolve the extended deterrence and security guarantees to the GCC conflict regarding the Iranian states in the event that Iran nuclear issue. The Gulf states’ develops a nuclear bomb. offer, first made in 2005, of “Is the US sending a new signal It was also emphasised that a establishing a Gulf Weapon of nuclear deterrence system would to the region that it might not require early planning from Mass Destruction Free Zone (GWMDFZ) is still valid. States all parties involved and that it be able or willing to prevent such as Brazil and South Africa, could not be done as a swift the progress of the Iranian which had once demonstrated reaction to a developing event. their clear intention to become Therefore it was recommended nuclear programme?” nuclear powers, have proved during the conference, that the that change is possible. These GCC states should take into states have decided to refrain from acquiring military nuclear account the possibility of Iran becoming a nuclear power and capability and have chosen to join a WMDFZ. develop a counter strategy. For the Gulf states, a militarised Iranian nuclear programme One of the points of discussion was whether there is is not acceptable. But what are the options if Iran becomes a likelihood that the US and Israel would see advantages a nuclear power? The Gulf states would have to seek the in allowing Iran to emerge as a nuclear power. These protection of a nuclear umbrella in the short-term and develop advantages could include: their own nuclear defence capabilities in the long term. • The Gulf will be forced to accept US protection and In July of this year, the new US administration declared its into making concessions to US policy in exchange for readiness to provide a ‘defence umbrella’ for the GCC states nuclear protection. 40
NOVEMBER 2009
NUCLEAR DETERRENCE & SECURITY
• Israel will no longer be singled out as a ‘rule breaker’ as the only nuclear power in the region – regional and international pressure on Israel will decrease. It could benefit from the fact that Arab states will be forced to improve their relations with Israel to balance the new Iranian nuclear threat. • Most importantly, a basic and limited Iranian nuclear capability would constitute no real or serious threat to the far superior and more advanced US or Israeli nuclear capabilities. The discussion on the topic of European View of Security Guarantees and Extended Deterrence in the Gulf raised the question as to what extent European states, including France, the United Kingdom (UK) and alliances such as NATO can effectively contribute to security in the Gulf region. In that regard, how much could a US-UK-France deterrence system complement one another, and what is the risk of partners becoming competitors? Would such a system of coordination be favourable to the Gulf region, or is it better for Gulf security if the GCC countries keep being defended by three different, uncoordinated entities? And what would be the Iranian perception of the increasing number of foreign actors in Gulf security?
NUCLEAR PROGRAMMES IN THE ARAB WORLD
On the question about nuclear power and infrastructure security in the Arab world, it was stated that manufacturing a nuclear bomb was not an easy task. Starting from the mining process, to the production of the warhead and manufacture of delivery systems, major infrastructure and advanced technical know-how is required. Among the Arab countries, delegates attending the conference said it appeared that Algeria had the most advanced programme and could become capable of adopting a militarised nuclear stance.
- Iranian opposition member wearing a mask meant to resemble Iranian President Mahmoud Ahmadinejad during a protest last month at the Place des Nations in Geneva. -
- Activists during an anti-nuclear arms rally in the United States protested against Iran for possessing nuclear weapons. -
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NUCLEAR DETERRENCE & SECURITY
However, experts also said that there was no ‘current’ of defence, there would be a technical problem in providing evidence that Algeria has any interest in developing a military effective physical protection to the GCC states against a nuclear capability. Additionally, in the case of Syria, they nuclear attack. said there was no evidence that it had any infrastructure to The issue of nuclear protection assurance raises the question establish a nuclear programme, either civilian or military. as to whether such an assurance should be given in a public In 2007, Israel attacked an statement, or be of a private unidentified Syrian installation, nature, an officially declared which was alleged to be a nuclear agreement or a secret one, and reactor ‘under construction’. whether it should involve the However, the claim that Syria actual deployment of a nuclear “Extended deterrence, as already had a nuclear reactor arsenal on GCC territory. remains unproven. Extended deterrence, as seen seen during the Cold War, In the case of the Gulf state during the Cold War, could could serve as an example in of Saudi Arabia, delegates serve as an example in planning highlighted that Saudi Arabia for future scenarios wherein the planning for future scenarios had not yet adopted any GCC states need protection. wherein the GCC states national nuclear programme. Strategic assurances given But, if Iran emerges as a nuclear during the Cold War period need protection.” power, they said it was expected could serve as an example of that Saudi Arabia would move how to give similar assurances fast to counter Iranian nuclear to GCC allies. capability, which could possibly The following means of include the development of strategic assurances could a national nuclear programme. They added that Egypt’s be used: institutional mechanisms (signing treaties, potential capability to develop a nuclear programme was institutionalising the process of defence consultation and questionable. While there is no doubt that Egypt has the decision-making); declaratory policy (statements by the US intention of developing civilian nuclear capability, experts president and other senior US officials); conventional military said there was no evidence that it had been able to make deployments and engagement (large-scale, on-the-ground major progress in the nuclear field. deployment of US conventional forces in or close to the Overall, if one were to look at current Iranian nuclear capability, there is no doubt that Iran is progressing fast and is ahead of all its Arab neighbours.
SECURITY GUARANTEES FOR THE GULF?
The main discussion of the conference revolved around the limits to providing extended deterrence and security guarantees to GCC states should Iran develop its capabilities to include nuclear warfare. During the conference, delegates deliberated over the development of a nuclear deterrence system and found that it would require an early and proactive approach from all members concerned, rather than as a reactive measure to a developing event. Therefore, delegates motioned for GCC states to actively consider the possibility of Iran becoming a nuclear power and for the GCC to develop a counter strategy. In this context, they said it was important to identify protectors among the nuclear power states (from among the P5 states – China, France, Russia, UK and US – or even other de facto nuclear states), which could help establish an effective deterrence system if required. This included the idea of an external nuclear umbrella to protect the GCC states. It was mentioned that nuclear defence guarantees could not be legally binding and given as an official commitment. The issue of legality depends on the domestic political situation, both in the nuclear state that is willing to provide protection, as well as in the GCC states. It was identified that there was a difference between deterrence and defence. Big powers would be able to provide a commitment on deterrence; however, in the case 42
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NUCLEAR DETERRENCE & SECURITY
territory of the threatened state); linkages, political, personal and economic (closer ties could contribute to strengthening confidence that the ally would stand by in times of need). As the conference drew to a close, there were some points highlighted as to the differences between the US and GCC’s threat perceptions and identification. Delegates from the GCC states clearly earmarked internal destabilisation as a major threat, while US representatives perceived that threats of terrorism and disruption to major oil supply were the key areas for concern.
CONCLUSION
Ultimately, the aim of this conference was to consider how, and how far, the logic and practice of extended nuclear deterrence and multilateral and bi-lateral security guarantees can be adapted to address current and future threats to stability in the Gulf. Military strategies calculated to ward off outsiders may not be readily applicable to the maintenance of regional stability, nor to containing rising regional powers like Iran. Conversely, the range of choices available to Gulf states, both in the marketplace and in terms of strategic partnerships, are far wider than they used to be. So too are the range of threats against which deterrence must be ‘extended’, to include not just the emergence of regional nuclear powers, but the suppression of conventional conflict, terrorism, subversion and internal unrest as well. Certainly, whatever strategies are adopted in the nuclear arena cannot be obviously incompatible with the requirements of these other realms, in which the threats, while smaller, are also more immediate. The content for this article has been provided by Gulf Research Center, however, the views expressed in this editorial are opinions derived from a number of industry advisers and experts and are not necessarily endorsed by Gulf Research Centre.
- There will be limits to providing security guarantees to GCC states should Iran develop its nuclear warfare capabilities. -
NOVEMBER 2009
43
SPECIAL REPORT – INFORMATION & COMMUNICATIONS TECHNOLOGY
T S E : R C R E E A H V T GT A A Q IN T W C D I I R HE T OF Qatar’s telecommunications sector is becoming increasingly competitive, both domestically and on the international stage. Daniel Moore, Oxford Business Group’s editorial manager, Qatar, discusses the strategic objective of its players.
- Daniel Moore, OBG, Qatar. -
Qatar has long been a regional leader in promoting the use of ICT in government services, establishing the Supreme Council of Information and Communication Technology (ictQATAR) in 2005 to oversee the development of the country into a fully integrated information-based society. The body, which also serves as the country’s independent telecommunications regulator, is fostering the state’s Integrated E-Government Programme (i-Gov), which aims to improve the provision of state services, raise levels of transparency and accountability, and reduce costs through the use of ICT. Central to the i-Gov initiative is Hukoomi, Qatar’s online government portal, launched in February 2008. Currently, more than 300 online services can be accessed through Hukoomi, a total that Qatari officials intend to expand significantly over the coming year, with up to 80 percent of all public services scheduled to be available online by the third quarter of 2010. NOVEMBER 2009
45
SPECIAL REPORT – INFORMATION & COMMUNICATIONS TECHNOLOGY
According to a government white paper issued in June this year, there is a growing acceptance by public and private sectors for conducting official transactions online. In the 11 months of 2008 in which Hukoomi was operational, some 1.4 million e-service government transactions were carried out, more than the 1.3 million processed in the previous five years. Though the white paper identified that Qatar’s i-Gov programme was still in its early stages, it said it had already “established itself as integral to the national development of Qatar through its use of ICT, helping to realise the country’s ambitions”. Thanks to the state initiative, and the resulting pick-up by the private sector, the country’s ICT industry is expected to maintain high levels of growth for the foreseeable future. Estimates are that Qatar’s ICT sector could expand by up to 11 percent a year between now and 2012, with the size of the market reaching US$550 million (QR2 billion) by the middle of the decade. Qatar’s advances in increasing access to and promoting the better use of ICT was acknowledged in the World Economic Forum’s (WEF’s) latest Global IT Report, with the country moving into the top-30 for the first time. The report, released at the end of March, ranked Qatar 29th out of the 134 countries assessed, and showed that the emphasis being put on ICT was having an impact in both the public and private sectors. Significantly, the report placed Qatar eighth in the category of successful government promotion of ICT, while as far as importance of ICT to the state’s vision of the future, Qatar scored even better, coming in sixth globally. One area where Qatar did not score highly was capacity for innovation – the ability to develop new applications or usages for systems, rather than relying on existing ones – where it was ranked 60th. However, this is expected to change, according to Chan Meng Khoong, the executive director (ICT development) at ictQATAR. Khoong said in an interview published in the Gulf Times on October 1: “There is going to be an increased push to provide content in Arabic, rather than in English as is often the case”. “We recognise the fact that there is a huge opportunity to develop online content in Arabic and use it for competitive advantage. “From there we can develop moves, games and analytical tools for business intelligence that are based on Arabic content. All of these are new opportunities. We have to look ahead quickly because we are not alone. Everyone else will be thinking along the same lines.” He added that not only was Hukoomi going to be made more innovative, but its already strong interactivity with the private sector, would be reinforced in the coming year. Additionally, with further changes to the platform, tourism services such as locating hotel accommodation and restaurants would be made available through the portal. Though many of these services are already available online, Khoong said by integrating them on the Hukoomi portal, access will be improved. Though generally a leader in ICT utilisation, one area where Qatar could be doing more is in combating the notoriously tricky area of cyber-crime according to Ranjit Rajan, senior research manager for software of information technology firm IDC Middle East. 46
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During a seminar on IT security in Doha on October 14, Rajan said there was a need to put in place stronger laws to deal with cyber crime in Qatar. IctQATAR, however, is moving towards strengthening measures against ICT crime, and has set up QCert, Qatar’s centre for information security, to monitor and improve ICT security systems, address cyber security risks and protect sensitive information. While there may be a possible weakness in legislative protection, this would not be a problem only experienced by Qatar. With the explosion of ICT usage over the past decade, many states have struggled to ensure their rules and regulations keep pace with changes in technology and applications. Having moved quickly to comprehend the implications of the new wave of ICT, it is likely that the Qatari government and its agencies will bring the country’s laws up to the level required. If so, and if the state continues to implement reforms at the rate it has been following to date, Qatar could further climb up the WEF’s rankings next year.
ON THE PULSE
With Iran’s nuclear goals dogged by controversy, and the GCC pursuing plans of its own, Qatar’s relations with Iran and the United States are vital, but complex. Edward Jameson reports on an uncertain future. Plus: Is Doha’s peaceful nuclear programme back on track? TheEDGE uncovers evidence that suggests so…
- French nuclear giant EDF operates 58 reactors across France, including the Tricastin Nuclear Power Centre in Bollene, southern France. -
NUCLEAR DREAM; GULF REALITY
ON THE PULSE
Kuwait, Bahrain and Saudi Arabia have begun work on their respective programmes, with the Kingdom showing the firmer progress. Oman brings up the rear, with a number of options on the table, including nuclear, gas and solar generation a reflection of its characteristically more conservative growth predictions.
A Doha resurgence?
T
he intention of the GCC states to embark upon a shared nuclear programme was announced to the world in the final communiqué to be issued from the 27th GCC summit, held in Riyadh in December 2006. The states would pursue their collective nuclear ambitions “for peaceful purposes,” and in accordance with “international standards and systems,” the text said. Three years on, regional states have taken steps along the paths of their individual nuclear programmes, though some have advanced further than others. The disparity of such progress is to be expected; contextually we are
witnessing the evolution of one of the world’s most controversial industries within one of the world’s most politically sensitive regions. If there is one collective sign, however, it is that virtually every country is showing progress towards the adoption of nuclear energy. Leading the GCC charge, in typical fashion, is the United Arab Emirates, which is into the procurement phase of its programme. Emirates Nuclear Energy Corporation, the body set up to oversee the development process, this month shortlisted bidders for construction of the US$41 billion (QR149 billion) project’s infrastructure.
In January 2008, Qatar signed a memorandum of understanding with French power giant EDF to engage in discussions concerning cooperation in the area of nuclear power generation. This cooperative agreement marked a definite signal of intention from Doha. The French giant – the world’s biggest nuclear power producer – today has its highly experienced fingers in the nuclear pies of many countries including China, the UK and the US, and last year operated 58 reactors spread over 19 sites in France alone. But progress in Qatar began to stutter as energy prices peaked and troughed throughout 2008 and early 2009. The collapse of prices in September 2008, from the previous summer high led to an instant dampening of the nuclear spirit in Doha as the projected longterm cost of driving the country’s ambitious economic diversification plans momentarily eased. Nuclear, however, could be back on the cards in Doha. TheEDGE has discovered adverts, originating from an international recruitment company headquartered in India and Singapore, seeking to recruit staff for the infrastructural development stages of a nuclear power plant in Qatar. One in particular seeks a quality control inspector to oversee construction activities “during the execution of a major international nuclear power plant project”. Neither the Qatar Electricity and Water Company, which owns Qatar’s power generation assets, nor EDF, could confirm to TheEDGE what stage the country’s nuclear discussions were at when contacted. NOVEMBER 2009
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ON THE PULSE
- Construction of a nuclear power plant underway in China. Could Qatar soon be seeing such scenes? -
The Iranian question
Recently, the UN nuclear watchdog – the International Atomic Energy Agency (IAEA) – announced it was locked in a “stalemate” with Iran over the country’s nuclear programme. Iranian President Mahmoud Ahmadinejad declared at a press conference: “We will never negotiate over the obvious rights of the Iranian nation,” a defiant statement designed to portray the president as a defender of the Iranian people and the IAEA as politically motivated meddlers. This came in the aftermath of a sensational TV interview, with Yousri Abu Shadi a retired Egyptian official at the IAEA. “The question should be whether it [Iran] is capable of doing this [making a nuclear bomb],” Shadi told Egypt’s Channel 1. “Yes…technically speaking, it is capable of it. If Iran wants to produce nuclear bombs within a short period of time, it can. It’s over.” Shadi went on to state that Iran could produce uranium enriched to 90 percent – weapons grade is considered to be between 85 to 90 percent – “in less than two years,” if it so chose. So, with a new round of sanctions against Iran looking increasingly likely, the mutual military aid pact 50
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signed in August between Qatar and Iran signals a willingness on the part of Qatar to align itself ideologically with its neighbours, despite the negative sentiment that such an action will undoubtedly stir in the west. But such a pact is necessary for Doha. “Qatar’s policy towards Iran is defined through geographical proximity, its economic links with Iran such as the shared South Pars gas field, and its small size,” says Gulf Research Centre security and terrorism expert Nicole Stracke. “Therefore, Qatar has an interest in strengthening its relations with Iran to a certain extent.” With Iran and Qatar sitting on the second (Iran) and third (Qatar) biggest natural gas reserves in the world, the desire to present a united front, and by extension seek geopolitical security alongside one another is stark, despite the inevitable Western consternation. As Stracke says: “Qatar hosts US military bases, so it must assume that, in the case of a military strike on Iranian nuclear facilities, Qatar will be the first target should Iran retaliate. Placed in this context, it seems only natural that Qatar would seek to strengthen relations with Iran.”
Which path?
If the UAE model of nuclear adoption is to be followed by Qatar in the future towards a sustainable, peaceful programme, the backing of the West would likely be achievable, dependant on successful implementation of Abu Dhabi’s programme. But Qatar’s Iranian link will present complications.
- Iranian President Mahmoud Ahmadinejad leaves a press conference last month after ruling out talks on Iran’s nuclear rights. -
ON THE PULSE On the other hand, Iran may present a previously unthinkable alternative: If Yousri Abu Shadi’s assertion that the country could produce uranium enriched to weapons grade “in less than two years” is correct, we have the prospect of a nuclear proficient Middle Eastern country – Israel withstanding - that is not required to kowtow to Western demands prohibiting uranium enrichment; demands which are seen by many across the Arab world as dangerously hypocritical. But, as Nicole Stracke affirms, a nuclear Iran is not something the GCC wants on its doorstep. “The US, Qatar, and the other GCC states do share the same strategic goal – to prevent Iran from achieving military nuclear capability,” Stracke says. “The differences between the states may lie in the means to achieve the goal, but not in the objective.” Dr Christian Koch, director of international studies at the Gulf Research Centre, says that rather than sit back and watch from across the placid waters of the Gulf, the GCC states see advancement of their own plans as the way forward. “No GCC country will necessarily sit around and wait for Iran to have its nuclear programme while they have no nuclear know-how,” he says. “This in no way means that there is any ulterior motive behind plans to have a civilian programme, but is simply a realisation that they also have the right to gain an adequate scientific base on nuclear power generation.” What is evolving in the Middle East, therefore, as the world comes to terms with the increasing importance of energy security both in the immediate and long-term future, is a brave, yet perilous new world of power attained through military pacts, and recognition of the vital role that the region will play to the globe’s future energy requirements. This regional assurance has already reared its head. Along with Russia, Iran and Qatar continue with the work of the Gas Exporting Countries Forum, the 11-member confederation that sits atop three-quarters of the world’s natural gas reserves, despite Western opposition to what some perceive as a burgeoning Opec-style cartel; Qatar has continued to demonstrate support for Hamas and Hezbollah, much to the consternation of the US and Israel; while regional states remain bound by
shared aspects of their deep-rooted cultural and religious ideologies. A perceived weakening of Western military might amid the chaos of both Afghanistan and Iraq, and subsequent loosening of US hegemonic power across the Middle East, has also contributed to the bolstering of regional independence. Christian Koch says discontent with the US peaked with its handling of the Iraq issue. “The fact that the US went into Iraq and ignored all Arab Gulf advice about the need for proper planning both pre- and post-conflict, underscored the fact to the GCC states that US interests do not necessarily match those of the Arab Gulf,” he says.
Political tightrope
What we see today, however, is a Qatar that has a vested interest in maintaining good relations with both the US and the wider region, including Iran. A Qatar that is, in effect, treading a political tightrope. The US remains an important trade partner to Qatar; The As Sayliyah base, outside of Doha,
is the US’ largest pre-positioning base outside of its own borders; and despite Iraq the US remains the globe’s principal military force, and as basic playground rules suggest, it pays to remain on the right side of the biggest boy in school. In fact, such a position has the potential, according to Nicole Stracke, to raise Qatar’s profile on both the global and regional stage. “Qatar could hope to potentially play a mediation role in future between the US and Iran, and the GCC and Iran,” she says. Whatever the individual country’s motives, nuclear development will continue across the GCC and the wider Middle East. What will transpire, however, will be a very different nuclear development ‘race’ to that witnessed in the Second World War between the West and Nazi Germany. This one will be ran according to a different set of rules, whereby geopolitical manoeuvring, national security, and the right to assert power, may play as important a role as technological advancement, and power itself.
- Former US President George W. Bush visits the As Sayliyah US military base outside of Doha. -
- The West fears that the Gas Exporting Countries Forum, which includes Qatar, will develop into an Opec style “cartel”. -
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BUSINESS VIEW - REAL ESTATE
es k edd broo THE QATAR TIME WARP While pondering the many interesting and varied subjects that he could write about this month, it occurred to Edd Brookes that there was one issue, which affects everyone, all day, every day – time. Edd Brookes explores the complexities of ‘time’ in the real estate market. - Photo courtesy of Fadi Benni. -
BUSINESS VIEW - REAL ESTATE
I
think there are probably more quotes regarding the subject of ‘time’ than any other. Whether one wants to consider the philosophical definition – I remember during my school days being given the essay topic of ‘time is an illusion caused by lack of illusion’, frankly this just confused me the more I thought about it – or perhaps the more poetic and accurate words of William Wordsworth, “sweet childish days, that were as long, As twenty days are now.” While Albert Einstein’s view was, “the only reason for time is so that everything doesn’t happen at once.” So what does this have to do with Qatar? When I first arrived here almost five years ago, I remember someone saying to me that the days were long, but the weeks were short. Nothing could be truer and after speaking to many associates, and colleagues it appeared this was a universal opinion. I would say, in my entire career to date, I haven not actually worked as hard and as exhaustingly as I find myself working in Qatar. Now you may interpret this in a completely different way to how I mean it, but I do find that ‘tempus fugit’ [time flies] on a weekly basis yet seems to incorporate the longest of days. I would have left the matter of time warp, but then it occurred to me that while new developments appear to be changing the skyline of West Bay on a weekly basis, there are
also a number of key projects that seem to be stuck in their own sort of time warp. Buildings are developed to a state where they are close to their completion, but then they seem to remain in this condition for almost as long as the construction period itself appeared to take. I would add that this is all relative, coupled with the fact that time past always seems faster than time present, which could account somewhat for the distortion. The delays in respect of delivering adequate power supply and central cooling to some of the more recent projects are also well documented and entirely understandable. However it did get me thinking that contractors and developers are perhaps over optimistic in terms of occupation dates (not to be mixed up with completion dates). It seems that this time warp is not necessarily confined to solely buildings. Having lived in the Al Waab area for the past four years, I remember the day after the magnificent 2006 Doha Asian Games finished, work started on the D Ring Road underpass at Al Soudan roundabout. Frustratingly, work appears to have ground to a complete halt and while there are a number of examples of this around the city, the wider implications on the impact of these delays, in terms of restricting growth, are clear. Qatar deservedly leads the GCC region in the most recent Global Competiveness Report 2009 - 2010 (published by the World Economic Forum), being placed at number 22 (up from number 41 in the 2008 to 2009 report), with the UAE coming in at 23rd. However, a number of frequent business visitors are met with surprise when they learn that some of the city’s important projects are yet to be completed. Apart from the obvious implications to health and safety risks, it is vital to both the competitiveness and ease of doing business that such projects are completed on time. Qatar does many things exceedingly well, not least its promotion as a very stable, independent business and financial hub of the Middle East. The announcement in June of this year that Qatar Holding and the NYSE Euronext signed a binding agreement to launch the Qatar Stock Exchange (the successor to the Doha Securities Market) is testament to this, as are the internationally renowned real estate projects, including The Pearl and Lusail. However, lets concentrate on getting the basics completed within realistic time frames, which can be adhered to and relied upon by the business community. On a closing note; one my favourite time quotes – which I am tempted to mention –“time is the fire in which we burn”, Dr. Tolian Zorin, a character in the film of Star Trek: Generations, but after some thought, I think my all-time favourite comes from Steve Jobs, the co-founder of Apple Inc.: “Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most importantly, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”
Certainly this is something, which Qatar does well at every level – the importance and encouragement of free thought. Next month I will investigate some of Qatar’s transport projects in detail, especially in light of Dubai’s metro now being operational. I will give consideration to the muchhyped Qatar Railway Project, which will incorporate the Doha Metro.
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LEGAL INSIGHT
C
E D LY
U LI Q
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TERRY MCMAHON
N IED
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o C &
L U RA
TAR A Q S,
CO E S ’
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IC OM
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CL I RA
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Terry McMahon, legal consultant for Clyde & Co’s Qatar Financial Centre branch, discusses the history and future of Qatar’s depletable source of wealth, the oil and gas industry.
Q
atar, a small peninsular country stretching into the Persian Gulf and bordered by Saudi Arabia, is an emirate with many natural resources, principally crude oil and natural gas. At one time in the early years of the 20th century, Qatar’s economy was linked to the natural pearl industry, as were other Gulf economies. Fortunately for Qatar and Bahrain, and the greater Middle East region the demise of the pearling industry coincided with the discovery of oil and gas in the region. Qatar’s natural gas reserves lie offshore to the northwest of Qatar in the massive ‘non-associated’ gas field called the North Field. It is a geological extension of Iran’s South Pars field, another giant natural gas field that remains undeveloped as a result of sanctions imposed by the United Nations and the United States.
LEGAL INSIGHT
NATURAL GAS
Natural gas was originally deemed to be a wasteful by-product and a nuisance typically produced with the production of crude oil. Such natural gas is called ‘associated gas’. In order to sell crude oil, the most valuable product to oil companies and independent producers, the producers must separate the natural gas from the crude oil. Since the early years of the industry there was no market for natural gas, the producers either re-injected it into the reservoir to increase the reservoir pressure or flared it at the well-head as it was produced. In large oil producing regions such as West Texas, United States, the night sky would appear as if daylight from the numerous burning flares. Following World War II, during which time many pipelines were built in the US and elsewhere to transport petroleum products required for the war effort, the industry and regulators realised that with transportation facilities available to transport natural gas to urban areas and industries, flaring natural gas was a waste of a valuable resource since it burned cleanly and gave off few emissions. As a result, legislation and regulations were
adopted in oil producing states in the US forbidding flaring of natural gas except under unusual circumstances, including a lack of a market or means to ship it to the market. Many other oil producing countries followed the lead of the US. Visionaries in the oil and gas industry realised natural gas as the fuel of the future due to its lower level of emissions and more environmentally friendly benefits. Today, natural gas has largely replaced coal for its use in domestic and industrial applications. Coal powered the 19th century; crude oil the 20th century and it appears that natural gas will be the fuel of the 21st century. Therefore, where it is available or can be made available it has become the fuel of choice.
LIQUEFIED NATURAL GAS INDUSTRY (LNG)
There are many countries that have neither a local supply of LNG nor the infrastructure to produce and ship LNG to those areas where it can be utilised. This is sometimes referred to as ‘stranded’ natural gas. Japan is one of those countries and it imports essentially 100 percent of its LNG
- Governments in the Asia region have called for greater efforts to reduce the import price of LNG. -
requirements for the production of electricity. There are other countries, such as South Korea, where the same situation exists. Asian countries were the first to rely on the import of LNG to satisfy their energy demand. Even the US, a large producer of LNG, has experienced periods when supply did not meet demand and forced the country to find alternative LNG supplies. While the demand for LNG has increased over the years, the recent global downturn (throughout 2008 and 2009) has reduced its demand. The pressure of declining demand and the call for a reduction in the pricing structure from import partners (largely been driven by countries in Asian region, including Japan, South Korea and Taiwan) has also had an impact on the industry. Nevertheless, the building of LNG infrastructure in countries like Australia has taken on a feverish pitch. Australia recently signed an AU$50 billion (QR167 billion) contract with ExxonMobil for the purchase of natural gas. Recent reports from Australia reveal its belief that it will become the “Mideast of Gas” and it forecasts only an increase in demand in the future from Asian countries.
- Gas flaring from an oil platform. -
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LEGAL INSIGHT
PRICING LNG
The LNG ‘value chain’ of exploration and production, liquefaction, shipping and regasification is hugely a capitalintensive business. Every step in the process can cost billions of dollars. Some exporters have elected to finance LNG projects on a balance sheet, which is to use internal funds to build the required infrastructure. More recently countries (and Qatar is a perfect example) have partnered with key international oil companies such as ExxonMobil and ConocoPhillips and have project financed the ventures – the banks that finance the project look to the venture and its revenues for repayment of the loan. The Qatargas III project recently secured financing for approximately US$4 billion (QR14.6 billion) from various commercial and governmental financial institutions. Repayment of these loans will be made from the revenues of the project, with little or no recourse to RasGas. Therefore, LNG producers must ensure that revenues from the project are sufficient enough to repay the loan, all operating costs and expenses, while still operating with a reasonable rate of return. To accomplish this goal, original purchase and sale agreements between the seller and the buyer (“PSA’s”), have typically been long-term contracts, with some stretching over a 30-year term. This presented a dilemma for both parties as neither was able to predict prices over so many years. In the beginning, the contracts were skewed towards the seller and the buyer not only had the price risk, but the contracts were take or pay. That is, if the buyer could not take the gas for any reason (usually other than Force Majeure) it nonetheless had to pay the seller the agreed upon price. These were similar to domestic take 56
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or pay natural gas contracts in the US, which became the subject of massive litigation in the 1990s when there was a large oversupply of natural gas. Currently, many long-term contracts are terminating and will have to be renegotiated. In light of the current economic downturn, buyers will be looking for shorter-term contracts as well as price relief. There are also price and term re-openers in contracts, which are not expiring and it is expected that buyers will look to renegotiate those in the same fashion – lower prices and shorter terms. In view of the requirements of project financing on newer projects, these negotiations may involve the banks and financial institutions and may become contentious. The largest Middle East producers, Qatar, Abu Dhabi and Oman will also face competition from new Asian sources (as mentioned above) and may have to refocus marketing efforts toward the US, Europe and South American markets. As price and volume risk shifts to the sellers, buyers are becoming more
insistent on shorter-term contracts in which these risks are shared more equitably. Therefore take or pay and pricing clauses have become more flexible as well as the ability of one party or the other to request renegotiations. Some purchases, especially in the US have been made on a spot basis either as a one-time purchase or a very shortterm basis. As the time of writing, the US and other countries are producing non– conventional natural gas from shale, a new source discovered in the past few years. The reserves in the shale and the production of natural gas, in some instances, approaches gas production from very deep wells in the Gulf of Mexico. As a result, the US currently has an oversupply of natural gas; storage is being filled rapidly and the price is dropping. Pricing recently dropped to the lowest rate in more than seven years on the New York Mercantile Exchange and the spot market at the Henry Hub in Louisiana. However, this does not mean the US will no longer be a buyer of LNG. On the contrary, as the economy recovers, the demand for LNG will rise until the supply of natural gas reaches equilibrium with demand and it begins to exceed supply. Some US companies continue to take
- The globally search for more renewable energy sources for both domestic and industrial requirements will have an effect on the use and demand of fossil fuels. -
LEGAL INSIGHT LNG shipments in order to fill storage facilities that are not yet filled. However, in the meantime, producing countries, like Qatar, may have to recognise that prices not just in the US, but in the traditional Asian markets will be under increasing pressure and the market, that has been in the past a sellers’ market, may become a buyers’ market coupled with the demand of reduced prices.
QATAR AND LNG
Qatar has the third largest reserves of natural gas in the world, trailing only Russia and Iran. The source of this natural gas is the North Field. An added plus to the amount of recoverable reserves is that the natural gas is ‘nonassociated’ meaning that it is produced as natural gas not in association with crude oil. This does not mean that nothing has to be done to the gas before it is liquefied as natural gas contains other hydrocarbons and water, which can have an adverse effect on the LNG. However, it does mean there is a cost saving as the natural gas does not have to be separated in a gas processing plant before liquefaction. Qatar, therefore, has one extremely valuable cost saving element in the LNG ‘value chain’.
THE LNG VALUE CHAIN
Having the third largest recoverable reserves of natural gas in the world is of no economic value to Qatar unless there is a way to monetise them, that is, to make them a saleable product. Attempts to liquefy natural gas began in the early part of the 20th century to find a way to store natural gas for ‘peak shaving’, that is, to have supplies available when the demand was much higher than usual as in a very cold winter. There are still ‘peak shaving’ plants in the US, particularly in the north-eastern states, which have no geologic formations to store natural gas and are at the termination of domestic pipeline systems. However, it was not until 1959 that a tanker carrying LNG from Louisiana, US, to the UK proved it was possible to ship LNG in tankers. Transportation, however, is only a part of the LNG value chain. The first, and very expensive, step is exploration and production of natural gas. The second step in the chain is liquefaction, which follows the cleaning of the natural gas to remove alien substances, the worst of which are sulphur and carbon dioxide, as well as small amounts of other
- One of Shell’s gas platforms situated 60 kilometres offshore from Qatar, which will produce gas from the North Field for Pearl GTL. -
hydrocarbons, and water. When this process is complete the natural gas is almost 100 percent methane gas. The temperature of the natural gas is then reduced in an LNG train to minus 162 degrees Celsius, the temperature at which it becomes a liquid. It remains this way in refrigerated pipelines and tankers until it is regasified through a warming process at the intended receiving terminal. This happens in a pipeline or storage tank that must be built to withstand frigid temperatures. In the liquefaction process, the natural gas is also compressed to 1/600th of its original state (think of the volume of three basketballs reduced to the size of a ping pong ball) thus allowing much more natural gas to be transported as LNG. After the natural gas has been liquefied, the LNG will be transferred to purpose-built tankers where the gas will remain liquid for its voyage to the receiving terminal. At the receiving terminal, which is the last stage of the value chain it is either put in storage or in pipelines where it is held until it is heated to become a gas again. As may be inferred from the above, the capital cost of building the value chain is enormous - in the region of billions of dollars. Only the largest players in the world like the national oil companies and the key international oil companies can play the game.
THE LEGAL ASPECTS OF AN LNG PROJECT
This article has barely scratched the surface of the complexity of an LNG project. Its principal focus has been to provide an overview of the process involved with LNG. Creating and building an LNG project is a complex transaction. The LNG value chain must be coordinated and the myriad agreements related to the chain are unusual, multifaceted and require extraordinary negotiation skills, drafting and review by qualified lawyers and other technical advisors. The number of agreements could easily exceed 100. These are a series of interconnected and interwoven contracts that can be drawn up only by the most experienced of attorneys, all of whom must have a good knowledge of the industry. Obviously other experts are required as well – economists, reservoir engineers, insurance advisors, financial advisors, environmental experts, process engineers, intellectual property experts and perhaps many more - adding to the enormous expense of the project.
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LEGAL INSIGHT
QATAR: THE PRESENT AND THE FUTURE OUTLOOK
People, who look at Doha and Qatar today, can easily see what the LNG business (as well as the production of crude oil) has done for the country. Buildings are rising everywhere. Infrastructure (roads and bridges) are modernising the country. Foreign Universities are locating branches here and education is at the forefront of government priorities. Initiatives such as the creation of the Qatar Financial Centre have fostered the growth of new businesses and revenue streams for the
emirate. Local culture has also received a boost, with the establishment of the Museum of Islamic Art. As a result of LNG, Qatar has become a wealthy country with the highest income per capita in the world.
CONCLUSION
So what does the future hold? Qatar has the opportunity to become a modern, developed country, but oil and gas are non-renewable resources. Experts suggest that natural gas will be depleted in Qatar within 60 to 80 years and crude oil in 50 years. Globally countries are concerned about abating the effects that impact on climate change, which has spurred hefty investment into the research and development of renewable energy sources for both domestic and
industrial requirements – this is bound to have an effect on the use of fossil fuels and will likely reduce dependence if other fuels become available. Given Qatar’s current and future forecasted wealth, the state must materialise its ambitions in developing the infrastructure for the manufacturing and service industries in a planned environment. Additionally, the government will need to continue to diversify away from the depletable oil and gas industry and allocate substantial funding in which to create a modern country that offers a multiplicity of opportunities for all. This requires education and the creation of jobs that young Qataris can strive for on the completion of their education. Also actions must be taken further to encourage entrepreneurial activity – the key to success of any country. Every effort must be continued to achieve these goals. Qatar has 60 to 80 years to do this and it cannot afford to miss the opportunity.
- Qatar’s gas reserves will be depleted in 60 to 80 years - the state must drive new economic and sustainable growth away from the oil and gas industries. -
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DOWN?
MARKETING A GLOBAL
UP
INDUSTRY FOCUS - MEDIA & MARKETING
AFTER
Corporate image-builder Orlando Kimber, whose film production work includes RasGas, Qatar Science and Technology Park (QSTP) among others in Qatar, speaks one-on-one with Steve Martin, head of Corporate Communications and Marketing for the Qatar Financial Centre (QFC), and Chouaib Othmane, head of Communications and Marketing for Qatar Islamic Bank (QIB), about the global downturn and how it has influenced their company’s communications strategy.
- Orlando Kimber. Photo courtesy of Boo Beaumont. -
I
ndustry statistics often confuse, but with projections including a seven percent slump in the global ad market for 2009, one thing is clear: marketing budgets have reduced across the board in the past 12 months. But what does this actually mean? What actually drives the spending for these stars in the constellation of the Qatar international financial system?
INDUSTRY FOCUS - MEDIA & MARKETING
So you can see that our board was keen, in principal, to invest money to raise our profile in different sectors as they could see great value in doing so. Change was in the air for QIB and we had a new image to launch through television commercials and a vigorous ad campaign – we were entering a new era with confidence and some style. KIMBER: You both enjoy the confidence of your respective boards, which presumably means that you have been an essential part of the business planning. What were your experiences prior to 2008? OTHMANE: Since 2006 – with H E Sheikh Jassim Bin Hamad Bin Jabor Al Thani as our chairman and the board which was already committed to undergoing a huge change – we had a road map for the evolution of the bank, which total assets at that time were QR14 billion with a net profit of just half a million. We were successful, but relatively small compared to the rest of Qatar’s banking system. The map included the re-engineering of both our human resources and our infrastructure, so we were developing the new business groups, re-training personnel and overhauling the corporate identity, the brand, the internal communications and so on. So one could say that QIB was successful, but at the same time, its communication profile was weak. As an Islamic bank we provide finance against tangible assets, so naturally large corporations in the real estate market were a dominant interest for us from early on. Our marketing reach then extended to companies operating in the oil and gas and transport industries, including Qatar Airways and Qatar Petrochemical Company (QAPCO). Of course being a retail bank, we also wanted to increase our growth in that area. Therefore, we analysed the marketing behaviour displayed by other banks and then calibrated our budget against the data we received from this. We then used these findings as a baseline requirement for what we would needed to invest in our own marketing. 60
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MARTIN: It was a similar case for the QFC in that it needed to forge an identity for itself, but in the QFC’s case it had a blank page to start from and no direct competition to speak of. The really important thing to remember is that the QFC represents the will of H H the Emir Sheikh Hamad Bin Khalifa Al Thani to cultivate the highest international standards in financial operations and activities. This means that there had to be groundwork done in which to establish the operations and this involved an integrated legal financial governance system that’s familiar and logical to institutions. The QFC is not just a few high quality buildings that are rented out to foreign companies; it’s not a ‘property play’ to pay off loans as has been the case in some countries. Part of the QFC’s aim is to increase competition and to drive a more efficient economy, which in turn benefits society as a whole. We’re also committed to the expansion of a system for sharing and retaining knowledge of best practices. So once the foundations were laid, our initial remit was to attract sufficient high quality firms to set up operations in Qatar and to achieve this we chose two communications goals. The first was to follow up with international firms that already had business interests in Qatar and to identify those that fitted the strategic blueprint for the QFC, and the other was to project Qatar on the international stage as a great environment in which to conduct business. This two-pronged approach was very effective and again was supported by large-scale international advertising and public relation campaigns. The projected value was great, and so the investment was proportionate.
INDUSTRY FOCUS - MEDIA & MARKETING
KIMBER: So you are both in the financial industry, investing deeply and boldly into marketing and communications and new initiatives. When the global economic crisis struck which way did you turn? MARTIN: Fortunately our early campaigns proved to be really successful, so the first stage growth was pretty much complete. The QFC created an identity that was understood and considered credible in our key markets and we managed to attract more than 100 firms within the first three years of issuing our first license. At the same time we had some new initiatives, which needed careful tending and protection, like fostering a vibrant insurance industry in Qatar. So these were important priorities. What always happens in a recession is that marketing and training take a hit. ‘As long as it doesn’t affect sales’ is the cry that goes up in the consumer or manufacturing sectors. But we are different. We are a public sector funded entity and, in line with government efficiencies across the board, we were required to make savings. As a result, we took a good look at what our strategic priorities were and weeded out the tactical activities that we could afford to drop without affecting our overall marketing and corporate communications plans. It’s important to recognise that this meant reviewing our goals and our overall strategy first before considering where cuts could be made. We didn’t just stop doing stuff. We still wanted to attract new firms from Qatar, the region and further afield, and our broad mission is completely unaltered. We also saw that Qatar had reached a level of international recognition as a viable platform for business, which allowed us to reconsider our marketing and communications options. OTHMANE: It’s of interest to note that prior to the bubble bursting, Islamic banking as a whole was growing, albeit affected slightly by the taint of the September 11, 2001 attacks on the United States. But as soon as the banking crisis struck, the ethical foundation of our system was recognised as a relatively safe harbour for funds and there was a consequent rush to transfer money into the system. At the same time, the government of Qatar responded well to the 2008 crisis. The QIA decided to purchase up to 20 percent of the capital of banks, while the Central Bank provided shelter for the real estate funds and portfolios, which were hurt by the crisis. They recognised that the real assets supporting the loans were not physically affected, but that the perceived value of them had dropped. There was nothing like the speculation and subprime mortgage problems experienced in many other countries because our banking codes of practice are basically sound. Islamic banking just doesn’t really allow speculation. However, this intervention did give us all the opportunity to clear potentially toxic assets, which had been acquired and gave us all a fresh start. Our growth was so strong both internationally and locally – we’d gone from 16 to 28 retail branches in Qatar – and we were just halfway along our roadmap. When the board asked us to revise the huge budgets that we’d enjoyed in the first two years, we proposed removing some peripheral activities, but to push forward with all the core elements – this was approved.
KIMBER: So neither of you were deflected from the chosen path. But, surely you have had to cut your cloth more carefully? There must be some modification of the strategy or the tactics to accommodate changing times? OTHMANE: Now we are QR35 billion in assets and for the first nine months of 2009 we’ve done a QR1 billion net profit. That kind of growth is encouraging. Yes of course we’ve trimmed some of our activities. We might sponsor seven conferences where we sponsored 10 before. But we’re a growing company enjoying great success, both locally and internationally. However, it is becoming more complex, that’s for sure. MARTIN: It’s been a useful experience for us too. We recognised that we’ve successfully projected the credibility of Qatar as a business centre and therefore communicating this is no longer a primary objective for us, though of course it’s relevant in everything we do. Also, perhaps there are now other ways in which that flag is being waved. We have a number of business lines well defined now, and we’re supporting some exciting new initiatives such as Qatarlyst [the trading name of Qatar Insurance Services LLC (QIS)], the Qatar Finance and Business Academy, and QFINANCE [the brand name of the financial services reference guide (Qatar Finance - The Ultimate Resource)]. We still have dialogue with companies from all around the world interested in doing business here. Anything else, we question. Carefully. KIMBER: So in closing, it seems to me that because both parties have been engaged with the general direction of their respective organisations that this has enabled each to respond to the change of business climate without compromising on core strategy or goals. The question of whether it is possible to deal with a financial crisis without this access to board level thinking is perhaps best left for a future article.
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how-to guide
how-to guide
HOW DO YOU CHOOSE MARKETING TACTICS? By Jody Gabourie There are hundreds of different marketing tactics that you can choose from to create your marketing plan. To have an effective plan though, you need to select tactics that fulfil several different parameters. Below are six main areas businesses need to look at when deciding which marketing tactics to select:
1. WILL THESE MARKETING TACTICS REACH YOUR TARGET GROUP?
Of course it goes without saying that your marketing tactic must reach the members of your target audience and/or niche. For example: if the people you want to serve are corporate players – will this marketing tactic reach them, reach their chosen information sources?
2. WILL THESE MARKETING STRATEGIES GET ACROSS YOUR MARKETING MESSAGE?
Some marketing tactics are better than others in terms of being able to clearly communicate your marketing message. You may need tactics that allow for longer or more detailed messages or tactics that ‘match’ the tone of your message (i.e. more social, more technical, more formal). For example: you need to use video to ‘show’ the benefits included in your marketing message – does this marketing tactic allow for that?
3. WILL YOU BE ABLE TO DO THESE MARKETING TACTICS CONSISTENTLY?
When evaluating whether or not to add a marketing tactic to your marketing plan, figure out if you have got the time, money, resources and sometimes most importantly – the interest in doing it on a consistent basis. Also, think about ease of implementation – can you do it with a minimum of angst and stress? For example: you only have a small marketing budget – will you be able to pay for the marketing tactics and on an ongoing basis if need be (i.e. monthly bills for an auto responder programme and a shopping cart, postage to mail out a newsletter).
4. DO THESE MARKETING TACTICS OCCUR WITH ENOUGH FREQUENCY?
It takes anywhere between seven to 11 exposures before people will react to your message. You want to use marketing tactics that allow you to keep in contact with your prospects and clients frequently and therefore have a better chance of staying top-of-mind. For example: you want to reach prospects monthly and customers weekly – do these marketing tactics allow you to do that cost and time effectively?
5. DO THESE MARKETING STRATEGIES WORK ‘TOGETHER’?
Each activity you use in your marketing plan exists as both a stand-alone marketing tactic and in combination with your other activities. You want to leverage each marketing tactic as much as you can and ensure that they build on each other. For example: you are looking at doing a podcast – will 64
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this marketing tactic reach at least three of your marketing objectives (i.e. build list, create audio products, get exposure to possible joint venture partners).
6. DO YOU LIKE THIS MARKETING TACTIC AND ARE YOU GOOD AT IT?
There are three main areas (writing, speaking and networking) that most marketing tactics fall under. All of us are usually stronger in one of these areas, or we enjoy one area more, or it comes easier and we can do it quicker. For example: you know that submitting articles to online directories is a great way to build credibility and your list – do you enjoy writing and can you do it pretty easily and quickly on a consistent basis? Article Source: http://EzineArticles.com/?expert=Jody_Gabourie
how-to guide
7 STEPS TO SUCCESSFULLY USING BUSINESS PROMOTIONAL ITEMS By Paul Sung Consumerism in the modern context has turned out to be a highly competitive game for any business owner. Making your name over this competition is a very difficult task. Today, research has proved that one of the best strategies of marketing and increasing your sales is to offer business promotional items whenever one of your main products is purchased. The promotional product will be regarded as an incentive to potential customers, which will eventually help to considerably increase your sales conversion ratio.
Why do you think promotional products are so vital in the field of marketing? The main reason is because they increase the apparent value of the products you are marketing. They also create an awareness that the customer is getting more than what they pay for. This perception makes the difference between generating a good income and the difficulty in trying to attract new customers. As a business owner you need to have a clear understanding with this explanation. The power of business promotional items also helps to buildup customer loyalty and also retains customers after they have made their initial purchase. Since you offered them a promotional gift, they will always feel that you have provided them with real value and there are many chances that they will return to buy from you over and over again – even if you do not offer any more promotional products with the succeeding purchases. Customer retention is considered to be an effective mode of marketing, as you will not need to waste time to attract new clients, but instead spend time selling your new product to the existing customer base. Business promotional items that you give out to consumers during a sale of one of your products should carry a highperceived value. Try to make it relevant to your main product. Today information products are very powerful in the market
and the public are very keen to be updated with information. The possibilities are many – it is just that you need to have appropriate planning. Below are seven easy steps for a successful marketing campaign using business promotional products: 1. Have clear goals with good objectives for the campaign – decide what you need to achieve; brand awareness, immediate sales or customer appreciation. 2. Identify your target group – are you planning to attract new clients or is the campaign for existing clients. 3. Set a budget – it will be ideal for it to be a part of your marketing/advertising budget. 4. Use partners or joint ventures – join in other suppliers and businesses. This might be advantageous, as it will strengthen the relationships with key business people. 5. Order the correct quantities – keep in mind the shelf life of certain products, before you decide on them. 6. Plan out your method for product distribution – to who and to where. 7. Measure and evaluate – always measure your result. Work on a rate of return and analyse how well you have achieved it. Article Source: http://EzineArticles.com/?expert=Paul_Sung
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TOP 5 BENEFITS OF USING STREAMING VIDEO TO BROADCAST LIVE PRESENTATIONS By Ron Costa Not too many years ago, it was commonplace for companies to fly important employees and key personnel to attend meetings, trade shows, conventions and give presentations on behalf of the company. Those days are gone due to the tremendous expense inherent with travel, including hotels, car rentals, airfare, and of course the day-to-day expenses for food, drink and entertainment associated with the trip.
Companies looking to trim such expenses, while increasing their own bottom line profits, are now turning to the Internet and conducting live streaming video presentations because of the many benefits. Here are five of the most significant benefits of streaming your own presentations: 1. Your audience is global. From the comfort of your own computer, you can literally broadcast to potential customers in Europe, Australia and Russia without dealing with any travel expenses whatsoever. 2. You can push your PowerPoint slides to your audience just as easily as if you were right in front of them. While you are speaking on video in real time, you are also showing the PowerPoint presentation you spent countless hours on right on your prospect’s computer screen. 3. You can interact with your viewers as well while you give your presentation to take questions, get comments and generally judge the interest level with your audience. It is just like being there in person. 4. Unlike meetings you have to travel to, streaming video presentations can be archived for future viewing, so if an 66
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important client for some reason misses the presentation, they can see the video in full without missing a beat. 5. Some live streaming video broadcasting platforms allow you to resell the service while you are doing the presentation. For example, if someone is watching and wants to do the same type of impact presentation for their company, they can click a button on the screen and immediately sign up for an account and you would get paid as an affiliate. When considering companies that can provide live presentation and video streaming products, I would strongly suggest going with one that has an affiliate programme – this is very powerful technology that really sells itself once you see for yourself how powerful a live streaming broadcast can be. Remember, the traditional advertising model is shifting from conventional avenues towards the Internet. Large corporations are capitalising on this fact by spending millions of dollars developing Internet marketing software to where streaming video is now a reality. Take advantage of the amazing benefits of live broadcasting. Your advertising budget will thank you for it. Article Source: http://EzineArticles.com/?expert=Ron_Costa
TECH TOOLS
James McCarthy picks the best bits of business tech to hit the market this month. Mutant Mouse Animal husbandry is not generally a Tech Tools topic, so when we heard that Philips had created a hybrid mouse; we gave it no attention whatsoever. It soon dawned on us that the Dutch electronics giant was not talking about some mutant rodent, but its new SPM9800/10. It seems that Philips has been playing Frankenstein with the world’s favourite user interface and created a very useful tool for working-on-thego business types. If you need a Bluetooth mouse to cruise your cursor across the laptop screen, you can use it like a Bluetooth mouse. When the juice runs out, users can plug the mouse in via its retractable USB cable to keep on working. However, and here comes the clever bit, the click wheel has been replaced with a 360 degree touch control sensor, which essentially transforms the mouse into a touchpad. Perfect for those podium-less presentations, just take the device off the table and use the touchpad to aim your arrow on the screen. The SPM9800/10 made its debut at the IFA extravaganza in Berlin in September and will retail for around QR290. www.philips.com
Save the program; save the world Carrying on TheEDGE’s ‘green your business’ theme from September, there are three new software programs that can aid companies in reducing their carbon emissions – currently only available for Windows-based PCs – Edison, CO2 Saver and Carbon Control Software. Each program taps into the Windows power settings to reduce the energy consumed by computers, while at idle. As usage continues your virtuous efforts are rewarded, with calculated information detailing your reduction in carbon emissions. Meanwhile, the ever-so-clever Edison not only estimates how much money the system has saved you (which the company accountants can balance using their green Canon calculators as featured in TheEDGE a few months back), but it also enables users to select their own individually desired energy saving level. Personal versions of the programs are free, but businesses are required to pay a nominal usage fee. For instance, Carbon Control Software’s business version costs upwards of QR38 per license per year and Verdiem, the maker of Edison, has a corporate version that sells for QR73 per computer per year. Dipping into the corporate coffers is well worth the price, not only so your business can bask in the warm glow of corporate responsibility, but also to ensure that as captains of industry you have done your bit to save the planet – according to research giant, Gartner, IT infrastructure emits as much carbon as the aviation industry per year. www.verdiem.com/edison www.co2saver.snap.com www.carboncontrolsoftware.com 68
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Life & style - SPORT
What
a drag
James McCarthy buckles up and goes in search of some high-octane thrills in the heart of Doha’s industrial area. The Qatari obsession with speed is centuries old. The pedigree of the Arabian horse is well documented, while camel racing is another of the country’s great demonstrations of pace and power. In recent times, however, sinuous flanks and pounding hooves have been replaced with supercharged engines and squealing tyres. With petrochemical wealth came status symbols of a motoring pedigree: Bentleys, Lamborghinis, Ferrarris and Porsches. Sometimes that just is not enough to give a much needed high-octane thrill. Anyone who has tried to negotiate the industrial area in a Lamborghini that is three inches from the floor, during rush hour, will tell you that it is not a thrilling experience. Not in a good way, at least. However, there is an oasis of unabashed speed, power and petrol-headed madness that will slake the thirst of any parched boy racer and, as the weather turns colder, Doha’s long evenings will be singed by the smell of burning rubber as it mixes into a cocktail of smoke and nitrous-enhanced fuel. When the sun goes down, the ‘Christmas tree’ lights up, the clutch bites, the throttle opens and latter-day gladiators prepare to do battle on a quarter mile stretch of smooth, glistening concrete. Just like the knights of times past, the jalopy-straddling jouster of today’s technologically advanced duels are of a distinctly nobel bent, a royal one in fact. Welcome to the cut and thrust of (and it is more about the thrust) of Gulf drag racing, right here in Doha at the Qatar Racing Club (QRC).
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LIFE & STYLE - SPORT
President of the QRC is H H Sheikh Khalid Bin Hamad Al Thani, a Qatari royal determined to promote and raise awareness of the sport through his Al Anabi racing team. Al Anabi has been taking the world of drag racing by storm, collecting trophies, honours and accolades from not only the Gulf region, but in the heartlands of this hyper-powered, piston-shattering sport itself - the United States (US). A drag-racing fanatic since the age of 12, the now 22-year-old Sheikh has ploughed millions of Riyals into putting Qatar on the motorsport map, no more so than earlier this year when the Al Anabi team entered the US National Hot Rod Association’s (NHRA) top divisions as a serious contender to the oligarchical established order. Under the guidance of legendary crew chief, Alan Johnson, in just their third race, Al Anabi’s Top Fuel dragster, driven by Larry Dixon Junior, took the AC Delco Gatornationals in Gainesville, Florida. After a quarter of the season, Dixon was in sixth place in the Top Fuel division. By July, he was third. Meanwhile on home soil, Al Anabi Racing mounted a successful challenge to the 2009 Arabian Drag Racing League World Championship, with driver Von Smith clinching the title in the Pro Mod category under the team stewardship of Howard Moon. Now the engines are primed, the fuel is brimmed and the tyres are smoking as racing season is here again. Come November 19 to 20, the sky over Doha’s industrial area will once again echo with the sound of flaming exhausts, tortured rubber and cheering spectators. This will be the Al Anabi team’s first home round in the Arabian Drag Racing League season 2009/10, and it promises to be a big weekend. The team has been working hard all summer, and there is a fleet of new tarmac-eating terrors growing hungrier by the day in the team garage. Fans will be hoping for the return of ‘the beast from the Middle East’, the club’s record breaking Pro Mod car, and while it might make an appearance through the season, Von Smith will mostly be taking the hot seat in the Tim McAmis designed ‘barwa car’, which has a carbon fibre chassis resembling a suped-up 1968 Chevrolet Camaro. The best of Al Anabi’s Top Fuel dragsters will be on show too, hurling themselves down the quarter mile at speeds exceeding 300mph (482kph). So, if you are travelling at a snail’s pace down Salwa Road and have a burning need for speed, then get yourself down to the QRC for two nights of nitrous-fuelled fun, death defying daring-do and ear-splitting entertainment. www.qrczone.com
Days Of Thunder, Lightning Knights Today’s jousting takes place on a very different steed to the days of yore. Gone is the Arabian horse, so say hello to the high-octane, physics shattering machines that give enough growl and carry enough grunt to excite even the speed-freakiest spectator. Top Fuel Racer A Top Fuel Dragster commonly has a V8 engine and are purpose-built race cars, with a layout superficially resembling open-wheel circuit racing vehicles. However, they are much longer, much narrower, and have very thin front tires, to optimise their performance exclusively in a straight line. Running on ‘racing alcohol’, which is a mixture of 90 percent nitromethane and about 10 percent methanol, however, this mixture is not mandatory, and less nitromethane can be used if desired. Before their run, racers often perform a burnout. This is done for three reasons. First, it heats the tires up, creating a sticky superficial layer of rubber on the tires. Secondly, it removes debris from the tires. Thirdly, and most importantly, it coats the track surface with rubber which greatly improves traction during the subsequent launch. A Top Fueller’s burnout alone can travel one quarter of the way down the track. On average, a NHRA dragster can reach top speeds of around 337mph (542kph) over the quarter mile, produce around 8000 horsepower and reach 60mph (96kph) in 0.8 seconds.
Pro Nitrous (Pro Mod) Racer Pro Mod cars, or ‘Door-Slammers’ as they are known in drag racing circles, are similar in specification to a to a top fuel racer, but have forward-mounted engines and carbon fibre automotive bodies over the chassis, giving them an appearance that vaguely resembles standard production models. The Chevrolet Camaro and Ford Mustang are commonly used shapes, however, many different body styles are used. These ‘fake’ body shells are not just cosmetic; they serve an important aerodynamic purpose.
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LIFE & STYLE - LIFESTYLE TOOLS
F K L A T
E H OR
S R UE
Watchmaker Tag Heuer has finally brought its Vertu-esque mobile phone to Qatar. The Meridiist, like other products in its class, offers users the bare necessity in phone features, but a whole heap of style and luxury. If you are thinking of Tag-ing along with this sporty handset, you get the choice of crocodile, leather or rubber finishes to a phone that has more angles and slashed edges than a Lamborghini Reventon. The hyper-phone offers a 1.9” QVGA sapphire crystal main screen and a monochrome OLED display on its outer rim. A two megapixel camera allows you to take snaps of people gawping in awe at your stylish new phone, while MP3/AAC/MPEG-4 playback software ensures you can be musically entertained while doing so. The phone supports GSM/GPRS, and Tag claims a seven-hour talk time. This titanium-carbide coated masterpiece has such a high price, however, that exclusivity is practically guaranteed, dialling in at around QR22,000. www.meridiist.tagheuer.com
A E K A T
E T I WR
N R TU
The pen, as they cliché, is mightier than the sword, but is it also mightier than the automobile? Well, Cartier likes to think that writing instruments are at least on par with the car, and after seeing their new line of composition accoutrements, we’re inclined to agree. Ink the deal in style and swank, while the smooth, ebony contours of the Cartier Roadster collection succeed in giving off that classic motoring vibe from which it has been inspired. At very least, the Roadster invites everyone from budding authors to high-level check signers to take a luxurious spin around the page. Available in ballpoint, rollerball and fountain versions, each pen is coated from body to cap in black resin, with palladium appointments. Its blue cabochon-tipped crown makes us think of the headlights of a stately-manor car. The elegant addition of an 18k rhodiumised gold nib and special Cartier engraving not only punctuates your penmanship with that midas touch, but also makes your flourish...well flourish. You can test drive yours at the Cartier boutique in Villaggio Mall. www.cartier.com
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EVENTS/CONFERENCES
Dubai Airshow 15 - 19 November 2009, Airport Expo, Dubai, UAE The premier aviation exhibition in the gulf and currently the fastest growing in the world, Dubai Airshow will be sure to take off in style this this year following 2007’s record-breaking event. Preparations for this year have included a new exhibition hall providing an additional 5000 square metres of space and and new registration building to cope with the expected increase in visitor capacity.
Telecoms World Middle East 16 - 19 November 2009, Jumeirah Beach Hotel, Dubai, UAEvNow in its fifth year, Telecoms World Middle East will be bringing together industry representatives more than 40 countries in one exhibition hall. The event offers opportunities for companies to discuss, challenge and agree on the future direction of telecommunications, both on a regional and international level.
MEED’s Middle East Green Buildings and Sustainability Conference 17 - 19 November 2009, The Address, Dubai, UAE The event is dedicated to raising awareness of sustainable industry in the Middle East. The goal is to answer questions and queries about being ‘green’ in design, providing clarification to a shrouded subject. Aimed to reach senior members of industrial development to inform on the key areas of sustainable design.
GOIC 12th Industrialist’s Conference 22 - 24 November 2009, Qatar International Exhibition Centre, Doha The event, this year, is exclusively two exhibitions: The International Industrial Exhibition of the 12th Industrialists’ Conference, and a Global Exhibition on Industrial Subcontracting and Partnership - Petrochemicals and Plastics. It offers the chance for manufacturers, distributors, suppliers, investors and buyers to meet for three days to identify and build on the opportunities created by the new economic environment.
The Big 5, International Building and Construction Show 23 - 26 November 2009, Dubai World Trade Centre, Dubai, UAE The Middle East’s biggest construction industry exhibition. The event itself this year is 15 percent bigger than previous years, providing wider diversity of product and solutions, while a wide range of conferences and technical seminars will keep delegates up to date with the latest products, services and sustainable design solutions.
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Construction & tenders
QATAR PROJECTS UPDATE
QBCF Inaugurated To Develop Bahrain, Qatar ‘Friendship Causeway’ Perhaps the biggest project news this month was that of the establishment of the Qatar Bahrain Causeway Foundation (QBCF), created to develop the much mooted US$2.7 billion (QR9.8 billion), multi-lane causeway that will link the two countries. Initiated by the the Governments of Qatar and Bahrain, the bridge, dubbed the ‘Friendship Causeway’, will be 40 kilometres long, will have a two-lane dual carriageway and a railway system. The structure will include 18 kilometres of embankments and a further 22 kilometres of viaducts and bridges over the high seas, including two, 400 metre, cable bridges over the shipping channels.
One side of the causeway will be located near the village of Askar on Bahrain’s eastern coast, while the Qatari landing point will be located at Ras Ashiraj on emirate’s western shore. When it is complete, it will be the longest marine causeway in the world and will reduce the driving time between the two countries from five hours to 40 minutes. COWI Consulting Engineers and Planners is the project consultant and a joint venture between Halcrow and KBR will be the project management company. Construction is expected to start in the first quarter 2010, with a view to completion by the first quarter of 2014. Free Zone Status for Old Airport The existing Doha International Airport will be converted into a Free Trade Zone once the multi-billion dollar New Doha International Airport (NDIA) becomes operational in 2011. The airside land is expected to be converted into a commercial district, officials from the civil aviation authority told local media. Addressing the opening session of the Doha Aviation Summit in late October, Abdul Aziz Al Noaimi, chairman of the Qatar Civil Aviation Authority said the proposed commercial district would further add to Qatar’s attraction as an international destination for business and industry. The new US$14 billion (QR 51 billion) NDIA will be 12 times larger than the existing airport. Qatar Railway Company Launched With the successful completion of Dubai’s metro project, other Gulf countries are keen to jump on the railway bandwagon. As well as reports of a rail link between Kuwait and Oman arriving by 2017, there is also a renewed vigour to establish a fullyfledged railway system here in Qatar. In mid-October it was announced that Doha would have a working railway by the year 2026. A company named Qatar Railway has been established with an initial capital of US$100 million (QR364 million) and the entire railway project has been assigned to Qatari Diar. Work on the project is expected to start in 2012 and last until 2026. In the first phase, the towers area in West Bay is to be linked by a monorail system similar to that of Dubai.
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CONSTRUCTION & TENDERS
Traffic Flow Improvement Works Project
Manpower Supply and Services
Roads Construction AND Upgrade Project
Description: Carrying out improvement of traffic flow in various areas of Doha. Closing Date: November 10th Client: Pubic Works Authority ASHGHAL (Qatar) Phone: (+974) 495 0000 Fax: (+974) 495 0999 Email: info@ashgal.com Website: http:// www.ashgal.com Tender No. PWA/GTC/034/09-10 This project calls for carrying out improvement of traffic flow in various areas of greater Doha, Zones 1 to 68 in Qatar. The Scope of work includes inspection of existing traffic signal equipment, liaison with utility departments and authorities, replacement of old traffic signal equipment as well as provision, installation, testing, commissioning and maintenance of traffic signal equipment. Bid Bond: QR1.5 million Tender documents can be obtained from: Infrastructure Affairs Department, General Tenders Committee, Pubic Works Authority, Doha, Qatar.
Description: Provision of manpower supply and services for a petroleum company. Closing Date: November 22nd Client: Qatar Petroleum Phone: (+974) 440 2000 Fax: (+974) 483 1125 / 449 1400 Email: marketing@qp.com.qa Website: http://www.qp.com.pa Tender No. GT09112700 This tender calls for the provision of labourers, services and supervision as well as equipment, tools and all necessary collaterals for the task of machining, balancing and metal spraying of various rotary and static equipment as and when required for the following locations: QP Refinery, Mesaieed Gas Operations Mesaieed Dukhan Operations Dukhan Bid Bond: QR300,000 Tender documents can be obtained from: Contracts Department , Operations Division, Royal Plaza, G Wing, 4th Floor, Room G13.
Description: Construction and upgrading of roads within a field for a petroleum company. Closing date: December 6th Client: Qatar Petroleum Phone: (+974) 440 2000 Fax: (+974) 483 1125 / 449 1400 Email: marketing@qp.com.qa Website: http://www.qp.com.qa Tender No. GT09112200 This project calls for the construction and upgrading of emergency approach roads at Arab-D and FNGLCS areas within the Dukhan field in Qatar. The selected contractor shall carry out engineering, procurement and construction, including supply all materials, labour services, supervision, testing devices, warehousing equipment, tools, consumable materials and every item of expense necessary for the construction and upgrading of the road at Arab-D gas recycling plant, Fahahil North gas compressor station and Jaleha degassing station. Bid Bond: QR750,000 Tender documents can be obtained from: Contracts Department, Operations Division, Royal Plaza, G Wing, 4th Floor, Room G13.
Stair Nose
QATAR TENDERS
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NOVEMBER 2009
Description: Supplying of vigil anti-slip stair nose cases for a petroleum company. Closing date: November 16th Client: Qatar Petroleum Phone: (+974) 440 2000 Fax: (+974) 483 1125 / 449 1400 Email: marketing@qp.com.qa Website: http://www.qp.com.qa Tender No. STC/ST09MT0313 Bid Bond: QR10,000 Tender documents can be obtained from: Materials Department, Qatar Navigation Plaza Building, C Ring Road, Ground Floor, Room No.30.
SUBSCRIPTION
SUBSCRIPTION FORM 2009 TheEDGE is Qatar’s new monthly business magazine. TheEDGE incorporates a mix of industry news and analysis, in depth features, special interviews with key business decision makers, economic insight and market activity reports, and tips for how you can improve your day-to-day business operations. TheEDGE will not be available on the news stands, but will be delivered straight to the door of the targeted business community. To ensure you keep up-to-date, with what is happening in Qatar’s business landscape, fill in the subscription form (below) to receive TheEDGE on a monthly basis. Subscription is FREE (in Qatar). Forms are to be addressed to the Subscriptions Department at: TheEDGE Subscriptions Department Firefly Communications 11th Floor, Jaidah Tower PO Box 11596 Doha, Qatar
Last Name : First Name: Address: Company: Designation: P.O.Box: Area Code: City: Country: Tel: E-mail: Date and Signature: 80
NOVEMBER 2009