OME | Opportunity Middle East – Spring 2016

OME

spring 2016

opportunit y Middle east

The Magazine of the Middle East Association

7-9 | Iran after Implementation Day

11-12 | Introducing the MEA Advisory Board

20 | P PPs in Kuwait in partnership with

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Exporting and supporting British expertise T

Contents

his latest edition of our Opportunity Middle East magazine is being launched ahead of the MEA dinner at the Mansion House. We have enjoyed a close relationship with the Mansion House and the City of London for some years, but have not held a dinner at this stunning location for some time.

British financial services, the Stock Exchange and the City of London generate fantastic exports for the UK. Our accreditations and institutions are recognised the world over. This dinner is a great opportunity for us to celebrate this achievement, and particularly the role that our financial and professional services play in developing trade and commercial relationships with the Middle East and North Africa.

Funding and access to banks is something that I am frequently asked about during my trips to the MENA region, and in the UK as well. These are vital for SMEs – and indeed larger companies – to move forward with transactions for which they have competed and successfully won business. We continue to work with our colleagues in the City and in UK Export Finance to support British business overseas.

This is particularly in the spotlight for Iran. As the sanctions are rolled back, and international businesses reestablish relationships, the question of finance is at the front of the collective

Middle East Association Opportunity Middle East is the news magazine of the Middle East Association Editor in Chief Peter Meyer Editor Rebecca Ryan

business mind. Our Trade Mission to Tehran was one of the first to visit after Implementation Day. We were delighted to meet Nicholas Hopton, Chargé d’Affaires, and Emily Cloke, Head of UKTI in Tehran, at which meeting the question of financial reform was explored. I will be interested to see how rapidly the financial institutions have moved on our next visit in May. I am also extremely pleased to be able to announce the establishment of the MEA Advisory Board, which will steer our strategy and provide oversight of our sector activities. It is a privilege to work with such well-established businessmen and women, whose experience of the MENA region will undoubtedly be an asset to the MEA in the months to come. My thanks to Sheikh Bilal Khan for his assistance and tireless efforts in making this possible.

Peter Meyer, CEO

3 Welcome

14 MEA

4 Members news

16 Diary of events

6 Technology sector

17 Dubai Expo 2020

7 Post-Sanctions Iran: Next steps for British business

18 Government update

11 Welcome to the new Advisory Board

21 IFB 2016

13 New members

23 Salvaging Syria’s Economy

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welcome

20 Public-Private Partnerships in Kuwait 22 Sector news

Views expressed in Opportunity Middle East are not necessarily those of the Middle East Association or the publishers. Acceptance of advertisements does not imply endorsement of the product or services concerned. While every care has been taken to ensure accuracy of editorial content, no responsibility can be taken for any errors and/or omissions.

ISSN: 1365 8972 Middle East Association 6th Floor, 27 St James’s Street, London SW1A 1HA T: +44 (0)20 7839 2137 E: info@the-mea.co.uk W: www.the-mea.co.uk

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by Inspire Publishing 23 Grafton Street, London W1S 4EY, United Kingdom T: +44 (0)20 7824 1927 E: sales@inspirepublishing.co.uk W: www.inspirepublishing.co.uk Front cover image: Philip Lange/ www.shutterstock.com

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membersnews Earth and Marine Environmental Consultants (EAME) secure contracts in Iraq

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AME is currently engaged on a high value project as part of a major rehabilitation of the port sector of Iraq following its recent tumultuous history. The project involves onshore and offshore geotechnical investigations to depths of up to 38m, along with topographic and bathymetric surveys covering an extensive area, overlapping in three intertidal zones located along the Khor Al-Zubair channel.

The areas will be developed into waiting and servicing areas, creating a key facility in the advancement of the port sector. This estuarine channel is of particular importance as Iraq’s only deep water ports are located on the Khor Al-Zubair.

The current heavy rainfall and subsequent soft ground conditions have required new elevated roadways

to be constructed to each of the onshore borehole locations which were otherwise inaccessible. EAME has also commissioned a newly-

Trowers & Hamlins advises GFH on Harbour Row development in Bahrain

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rowers & Hamlins is delighted to have advised GFH Financial Group on The Harbour Row development in Bahrain. Work began on the $150million, mixeduse project in January 2016.

The Harbour Row development is a landmark project within the Bahrain Financial Harbour, comprising luxury residential units and a promenade with a commercial element.

Trowers & Hamlins advised GFH on the legal structuring of the project, as well as on the

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overall community structure and the template documentation for the sale and lease of units.

Elias Karaan, Head of Real Estate Development of GFH Financial Group, said: “The swift commencement of site preparation works at The Harbour Row development is a positive development for us and our investors and stakeholders.”

Abdul-Haq Mohammed, Head of International Real Estate at Trowers & Hamlins, said: “We are very pleased to be involved in this exciting new project with one of our longstanding clients.

Despite the challenging economic conditions across the region, real estate remains an extremely important asset class. We are finding that developers are coming back to the table with plans for new projects and for the resurrection of previously dormant ones.”

GFH is listed on the Bahrain Stock Exchange, Kuwait Stock Exchange, London Stock Exchange, and Dubai Financial Market.

constructed small ‘jack-up’ pontoon that has enabled drilling in the congested and debris-strewn river channel, beyond the low water mark.

BP deepens commitment to Middle East and North Africa

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P and Oman Oil have signed an agreement with the Government of the Sultanate of Oman enabling a further development of the major Khazzan tight gas field.

HE Dr. Mohammed Al Rumhy, the Omani Minister of Oil and Gas, stated: “I am delighted to see BP taking additional acreage that will result in realizing more gas reserves.”

Bob Dudley, BP Group Chief Executive, commented: “Khazzan is a major resource with the potential to produce gas for Oman for decades.

This expansion of its development will apply BP’s leading technology and extensive tight gas experience.”

In Salah Gas, a joint venture between Sonatrach, BP and Statoil, has also announced the start-up of its Southern Fields project in Algeria.

Developing the Southern Fields will maintain planned production at 9 billion cubic metres per annum.

Drilling of 26 planned southern field wells began in 2014 and is planned to continue until 2018.

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membersnews Barclays announces new commitment to exports in industry-leading UKTI partnership Bank pledges to help 15,000 businesses export in the next five years, to support HM Government’s export drive.

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arclays has joined forces with UK Trade & Investment as a lead partner to broaden, deepen and sharpen efforts to help further develop international trade and inward investment for UK businesses.

The two organisations have agreed key priorities and targets across UK trade and investment, which they will work together to deliver in seven focus areas.

John Winter, CEO of Barclays Corporate Banking said: “Supporting UK enterprise and helping businesses of all sizes to expand and grow is something we are passionate about. We provide expert help to UK businesses in accessing new markets, expanding overseas, and achieving their growth objectives around the globe. Providing our clients with the tools, guidance and finance to encourage and stimulate their exporting ambitions in turn supports the wider UK economy.”

Lord Maude of Horsham, Minister for Trade & Investment at the time, said: “Government and private sector co-operation is at the heart of our approach to increasing UK exports.

Working together we can create a more vibrant export support marketplace to help small and medium sized businesses to flourish and grow.”

Dr Catherine Raines, Chief Executive of UK Trade & Investment, said: “I am delighted we will be working together with Barclays, which will lead to 15,000 more companies working abroad in 2020. Pooling our professional advice for companies is a powerful offer and will increase the amount of support for exporters available.”

The seven key areas of focus for joint working between Barclays & UKTI are: l Development of digital products and capability – through digital transformation of systems, staff training and development of digital products to support businesses exporting. l Increase the number of first time exporters – a pledge to support 15,000 businesses exporting for the first time or those returning to exports by 2020.

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l Increase exports by Medium Sized and High Growth Businesses – through trade missions, export summits and at UKTI Export Week. A UKTI MSB adviser will be available to Barclays clients for support, while Barclays and UKTI also pledge to support high growth businesses by exploring propositions to help their specific trade ambitions. l Winning of overseas High Value Opportunities and sector development – Barclays and UKTI sector and project finance teams will exchange information and collaboratively support networking between UK Medium Sized Businesses (MSB) and Prime Contractors to aid the formation of UK supply chains for High Value Opportunities overseas, in addition to improvements in the response to HVOs, to increase UK export success. l Increase trade with Africa – identifying opportunities with targeted trade programmes. Barclays has identified a £3.6bn export opportunity for UK businesses by 2020, up from £1.2bn currently for the five African Sleeping Giant countries. Total consumer spending in Sub-Saharan African countries is expected to grow by 4- 5% over the next 5-10 years. l Encourage inward investment from priority overseas markets – Raise awareness of UK as an investment destination through Barclays

global reach and UKTI networks Drive exports through marketing, initiatives & events – UKTI and Barclays will work closely to promote the Exporting is Great campaign.

In 2015, Barclays saw an increase of 12% in customers doing business internationally on the previous year.

Therefore Barclays’ commitment to UK businesses is to remain the leading provider of corporate banking services in the North-South corridor of the UK, Europe, Africa and the Middle East. It will grow global financing solutions through the arrangement of sovereign and project finance, and the provision of finance for exporters. Barclays is also expected to introduce new digital and trade services for business banking customers; launch and further develop the Business Abroad services to enable businesses to internationalise.

The scheme is part of the Exporting is GREAT programme; the government’s most ambitious export campaign ever.

It aims to inspire and support 100,000 additional UK exporters to sell their goods and services overseas by 2020.

The campaign’s mission is to turn the UK into the world’s greatest exporting nation, capturing the imagination of the public, boosting business confidence and national pride and empowering more UK companies to go out and succeed in global markets. l

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technologysector Digital disruption in MENA industries

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he growth of digital platforms is not a new story – either in the MENA region or across the world, but particular features of how these trends are manifesting and developing in the regional markets make it worthwhile for the business community to take note.

The MENA region has faced certain challenges in the adoption of technologies – lack of infrastructure, limited regulation and traditional industries. Yet 2016 looks to be another year of major acceleration as developments see new applications, and disruption begins to be embraced across the MENA markets.

NEW TECHNOLOGIES

The Deloitte Technology, Media and Telecommunications Predictions for MENA are now in the fifth year of release, and have charted significant changes. Some issues are ongoing, and the increase in mobile use continues to rise exponentially, but digital applications are becoming more complex and widespread. “Over the past five years, this region has made significant forays in broadband connectivity and speed, which have in turn enabled new categories of service to become mainstream,” said Emmanuel Durou, Partner and TMT Leader at Deloitte Middle East.

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One key signifier is the prediction that mobile-driven commerce will enter into mainstream in 2016, resulting in widespread effects on a huge range of services and industries. Deloitte also predicts that in 2016, the market for cloud services in the Middle East will exceed US$1 Billion, generating new sub-industries and opportunities.

YOUNG POPULATION

A new report released by HSBC Private Bank has found that 63% of the business owners they screened in the Middle East are aged 35 or younger. Sobhi Tabbara, global market head of Private Banking, Middle East said: “Young people are one of the Middle East’s biggest assets. Their entrepreneurial drive is reshaping and redefining the future of the Middle East’s economies.”

The region also has the youngest average age of entrepreneurship globally at just 26 years old.

Commenting on family run businesses, Ahmed Abdelaal, regional head of Corporate Banking and Structured Finance, HSBC MENA said: “Amongst businesses in the Middle East, we see a real hybrid of young entrepreneurs involved either in the family business or breaking out to prove their own business concepts.

“When their growth strategies become

more aggressive and require funding of a more complex nature, entrepreneurs cast their net wider than friends, family and acquaintances for investment and actively reach out to banks for financial advice and support.” Therein lies significant opportunity for financial technology companies – an area in which the UK excels and is investing heavily.

WIDE APPLICATIONS

This is not an isolated trend, and the discourse of the sharing economy is increasingly visible in regional technology. Uber is investing $250 million to expand in the Middle East and North Africa, in which some of the app’s fastest-growing markets are located.

The car-hailing platform only entered the region two years ago and currently operates in nine countries: Bahrain, Egypt, Lebanon, Qatar, Saudi Arabia, Jordan, Turkey, Morocco and the UAE. Its app is available in Arabic and Turkish as well as English.

Indeed Cairo has become Uber’s fastest-growing city in the EMEA region, less than a year after the company began service in the country.

At the end of 2015, a pilot project was launched to allow cash payments in Riyadh and Jeddah, in response to customer requests for a wider range of payment options. In Saudi Arabia, women make up more than 70 per cent of passengers, and female Uber drivers are fairly common throughout Egypt, Jordan and Lebanon.

Digital disruption has also reached a governmental level. Speaking in March this year, Hassan Al Thawadi, Secretary General of the Supreme Committee for Legacy and Delivery in Qatar, which is overseeing construction of World Cup stadiums and training facilities ready for the event in 2022, said the rise of companies such as Airbnb is a tourism trend that cannot be ignored.

“It’s an option people want to have and it’s an option we’d like to provide,” he said.

According to the Airbnb website, a couple looking for a weekend rental in mid-April has 46 options to choose from around Doha, and following this recent statement presumably there will be many more very soon.

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ir anupdate © PEYMAN ABKHEZR

Post-Sanctions Iran: Next steps for British business Pinsent Masons hosted an MEA seminar on 20th January, looking at the current situation for British companies seeking to do business in Iran. Here, we share the insights from that briefing.

HOW TO ACCESS FINANCE FOR THESE NEW OPPORTUNITIES

UK Export Finance, the UK’s export credit agency, reinstated cover for UK businesses in Iran on 16th January, directly after Implementation Day was announced.

UKEF can help bridge the gap as commercial banks and insurers reengage to support UK and Iran trade.

This will help UK firms realise their ambitions to trade with Iran and boost their export growth. More broadly, sanctions relief will provide the means for Iran’s economic re-engagement with the world. Export finance and insurance is a key component of this.

UKEF expects to have a competitive offering and follow the Organisation for Economic Co-operation and

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Development (OECD) benchmark in the majority of cases. However, each case will be individually considered to establish the appropriate premium based on UKEF’s assessment of the risk.

Support is now an option on a case-by-case basis in Pounds Sterling and Euros. UKEF has also made a £50 million facility available, guaranteeing payments to UK professional advisory service providers advising the government of Iran.

Following on from this reinstatement, it was announced in March 2016 that UKEF had signed a MOU with the Export Guarantee Fund of Iran (EGFI) in order to enhance trade and economic co-operation and to help British businesses export. EGFI, the Iranian state-owned credit insurance company,

is also working with UKEF to cofinance and co-guarantee financing for projects or contracts in third countries involving British and Iranian exports.

“Closer cooperation with UKEF will help create opportunities for UK businesses to play their part in realising Iran’s plans for rapid economic and infrastructure development,” says Seyed Kamal Seyedali, CEO and Chairman of EGFI. “The agreement will also help EGFI to support Iranian exporters as they look to trade with the UK.” The UKEF website also states that: “UKEF has already been in contact with a number of exporters about business with Iran and has identified potential opportunities in a number of sectors, including oil and gas, infrastructure and machinery.”

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© FULVIO SPADA

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ir an legalupdate

THE LEGAL IMPLICATIONS OF TRADING WITH IRAN

Niazi Kabalan, an Associate with Pinsent Masons in London, provided a legal perspective on the shifting situation regarding trade with Iran.

EU Sanctions: What has been lifted?

There has been almost a complete lifting of EU sanctions on: banking, financial services, oil & gas products and services, petrochemical products and services; shipping and shipbuilding, and a licensing regime introduced for the export of dual use goods and the import of certain metals, diamonds and graphite.

A significant number of individuals and entities have been removed from the EU’s designated person list. This means that dealings with their funds and economic resources are no longer restricted. The more generally applicable requirement to notify or to seek prior authorisation to transfer funds to an Iranian national or business or to receive funds from such a person has come to an end.

What remains prohibited?

Numerous Iranian persons and entities remain on the EU sanctions list.

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It is also prohibited to supply, transfer or lease military goods or items used for internal repression; and to invest in Iranian enterprises engaged in manufacturing military goods.

Licence requirements for nuclear and dual-use goods remain.

Related technical services, brokering services (including negotiating contracts) and financial assistance are also prohibited or licensable.

US Sanctions: What has been lifted?

Non-US persons - the US has lifted the sanctions that prohibited overseas businesses (i.e. non-US) from engaging with Iran’s financial, banking, energy, petrochemical, shipping, ship-building, and automotive sectors and which prohibited the provision of insurance and re-insurance services and trade in certain metals, coal and software, and associated services. In addition, 400 individuals and entities have been removed from the Specially Designated Nationals (SDN) and other sanction lists.

Foreign entities owned or controlled by a US person - a general licence has been issued which authorises foreign subsidiaries of US businesses to engage in most of the transactions

that non-US persons are now allowed to engage in. The licence further authorises US persons, including senior management of a US parent company or its owned or controlled foreign entities, to be involved in activities related to the establishment or alteration of operating policies and procedures of a United States entity or a U.S. owned or controlled foreign entity, to the extent necessary to allow a U.S. owned or controlled foreign entity to engage in transactions with Iran, but does not authorise involvement by any US person in the ongoing Iran-related operations or decision making after the initial actions; nor does it permit the export of US goods or technology, or the transfer of funds through the US financial system.

Foreign financial institutions (FFIs) – FFIs are able to conduct or facilitate transactions with persons removed from the SDN and other sanctions lists. This includes FFIs with branches in the US, provided the branches and the US financial system are not involved in the transaction.

US persons - OFAC has introduced a licensing regime which allows US persons and, where there is a nexus to the US, non–US persons to apply for authorisation to export or re–export to Iran commercial aircraft for exclusively civil aviation, spare parts and associated services. In addition, a general licence is being added to the Iranian regulations that will permit import of Iranian carpets and foodstuffs into the US. What remains prohibited?

Trade embargo - most trade by US persons (individuals and companies) remains prohibited until the earlier of (i) the date that the US government removes the restrictions and (ii) October 2023.

In addition, non-US persons continue to be prohibited from knowingly engaging in conduct that seeks to evade US restrictions on dealings with Iran or that causes the export of goods or services from the US to Iran.

SDN and other sanctions lists while 400 persons have been removed from various sanctions lists, 200 individuals and entities remain sanctioned including Ansar Bank, Bank Saderat, Bank Saderat PLC, and Mehr Bank. Both US and non-US persons continue to be prohibited

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from transactions involving SDNs. US financial system – the transit of funds through the US financial system and US dollar clearing transactions remain prohibited except under a general or specific licence.

out of the transaction – a general licence has been issued which enables companies with US ownership or US personnel to take advice on how to lawfully structure their activities. l If any money transits the US banking system, for example if a US dollar denominated transaction – US dollars should not be used.

I am a company that wants to do business with Iran – what should I be doing?

As mentioned previously, most trade by US persons remains prohibited. Many other countries are now encouraging trade with Iran. However, there is a need to move forward carefully.

Before proceeding with a contract, businesses need to check that the transaction is not forbidden by the sanctions that remain in place and that their banks will process payments connected to Iranian business.

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3 Do other non–US or non–EU sanctions apply?

Non-US and non-EU persons and entities still need to check the local laws of their nationality, incorporation and/ or residence to confirm no additional local restrictions or sanctions apply to them or their proposed activities relating to Iran.

4 Other risks such as bribery and money laundering. Iranian business is perceived to be high risk from a bribery and money laundering perspective.

Particular care is required in two scenarios where: l an agent or intermediary is involved. l money is being paid via a third party payment routing.

Conclusion The lifting of the main EU sanctions and the US sanctions relief for non-US companies has given rise to significant business opportunities. There are also substantial legal risks connected to Iranian business but those risks can be navigated by taking specialist legal advice from the outset.

Pinsent Masons, a Member of the MEA, is an international, full service commercial law firm headquartered in London with 18 offices across the Middle East, Asia, Europe and the UK. For further information, please contact: George Booth, Partner, London/Dubai T: +44 (0)20 7490 6984 / +971 4 373 9700 M: +44 (0)7766 820814 / +971 50 621 0537 E: george.booth@pinsentmasons.com

© PAUL KELLER

Points to check: 1 Whether the proposed transaction may be subject to sanctions or export controls.

Common situations where sanctions are likely to still apply for all persons(including non–US, EU and non–EU) are: l The exportation of military product – subject to an ongoing prohibition. l “Dual-use” products – a licence may be required. l The exportation of any US origin products (and some foreign made products containing controlled USorigin content) – a licence from the US authorities may be required. l If any customer or person who may benefit remains on a sanctions list – the transaction may be prohibited.

The carrying out of reasonable inquiries (due diligence) to establish the identity of the customer, the directors and shareholders of the customer and any end-users is essential. Banks that may be involved in processing any payments from Iran should also be checked against the US SDN List, the EU Designated Persons List, and other sanctions lists published by the authorities where you have offices or a presence. l If the company is US owned or controlled, the list of persons who remain prohibited to deal with is more extensive. l An employee or director involved in the transaction is a US person – the individual will need to be carved

2 Whether your bank will support the transaction Even if the transaction is in euros or pound sterling, your bank may not be prepared to support the transaction; for example, by processing payments or confirming a letter of credit.

Many western banks will remain cautious about any business relating to Iran because extensive US sanctions remain and the waivers and exemptions to release the secondary US sanctions are complex.

Before speaking with your bank, it would be worth checking the terms of any sanctions clauses that have been agreed.

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ir an tr ademission Chief Executive Peter Meyer led a Trade Mission to Tehran from 28th February to 3rd March. This was the first business delegation to visit Iran after the announcement of implementation day on 16th January 2016.

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he MEA took a small group of British businessmen and women to meet significant figures in the commercial community, paving the way for more direct trade engagement as the climate continues to warm and business relationships stabilise.

After arrival into Tehran International Airport at 4.30am, the delegation had a midday briefing at the newly reopened British Embassy. Chargé d’Affaires Nicholas Hopton and Head of UK Trade and Investment Emily Cloke gave the group an insight into the developments on the ground, and how the diplomatic operation is working to encourage a business relationship between the Iranian government, private companies and British exporters.

In the evening the delegation attended a welcome reception at the Ferdowsi Hotel, near to the Golestan Palace. A selection of contacts from key sectors within Iran were also invited, and the networking opportunities were extremely valuable for all those in attendance.

The second morning of the visit began with a meeting with the Iran Chamber of Commerce. Golnaz Salahshour, Senior Expert International Affairs, and Kia Tabatabaee, Advisor to the Vice President, International Affairs, greeted the delegation and explained the main priorities of their members in forging new relationships, and what the lifting of sanctions would mean for them. The context of the discussion allowed the delegation to gain a deeper understanding as to how business connections are forged and developed in this opening market.

In the afternoon the delegation met with Mohsen Meralizadeh from the Tehran Chamber of Commerce, Industries, Mines and Agriculture, who also serves as Chairman of the Iran Tourism Committee. Hossein Sabeti, Advisor to CEO and Director of International Affairs at the Tourism Bank, Mr Mosafer, Director of Planning and Strategic Studies from the Petrochemical Commercial Company, and Esfandiar Omidbakhsh, President of the Iran Scientific Commerce Association, were also in

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attendance to share their insights.

The discussion was more technical, and gave a view on what larger and state-owned industries are planning, how they intend to develop, and where British companies may play a part. The UK visa service reopened in Iran on 23rd February this year, which should expedite the visa application process significantly, and allow many more Iranian company representatives to visit the UK. On the third day of the Trade Mission, the delegation met with Gholamali Kamyab, the Deputy Governor of International Affairs at the Central Bank of Iran, to discuss the financial reforms that are expected to arrive as sanctions continue to be peeled back. The relationship with international banks was discussed, and the measures that can be taken to make business easier on the British side were also explored.

The group then went on to meet Masoud Hashemian Esfahani, the Deputy Petroleum Minister and

Director General for Economics and Investment Affairs at the National Iranian Oil Company. The oil industry is expected to be one of the first areas of the Iranian economy to be prioritised for investment, and there is a huge amount of opportunity for development.

Infrastructure and capacity building, as well as technological expertise are all receiving strong interest from international providers and the NIOC. “At the MEA, the team are very much interested in the continuing developments of the market in Iran, and seek to update Members on the situation on a regular basis,” said CEO Peter Meyer. “The Trade Mission was an extremely productive visit, and we are working hard to re-establish relationships with the business community in Tehran.”

Feedback from the Mission and the programme has been positive. Delegates have praised the high calibre nature of meetings and the depth of knowledge on offer. One said: “ I gained a better understanding of the market, the people, the needs and what is needed to do business in Iran.” Another acknowledged that “the time was perfect as many countries are visiting this market and securing trade.”

The MEA is planning a third Trade Mission to Tehran for the 6th to 11th May 2016. This delegation is open to companies from all sectors, and any interested parties are invited to contact the MEA to receive a full Trade Mission prospectus.

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advisoryboard Welcome to the new Advisory Board

l Lt. General Sir Simon Mayall joined Greenhill investment bank as a Senior Advisor in 2015 on retiring from the army after a distinguished career. He served most recently as Defence Senior Advisor (Middle East) from 2011-2014 and as the Prime Minister’s Security Envoy to Iraq from 2014-2015.

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Dame Fiona Woolf

“My background has been continuous engagement in the MENA region through the important prism of defence and security. One key part of this is defence sales. Not only are they an important contribution to the UK’s economy, but they reinforce our political and strategic partnerships by building 20 -30 year relationships on the back of large-platform sales, and the training, operating and upgrading requirements.

I see the MEA as providing a ‘centre of excellence’ for the understanding of, and engagement in, the MENA region.

This function is particularly important for SMEs, but by no means exclusively, who can leverage off the MEA’s rich experience in the region, and their extensive network of contacts.

The relationship between the UK and the region in the next year or so will depend, to a degree, on how strong and reliable the UK looks as a strategic ally.

This will be significantly affected by events in the region, and the outcomes of the US Presidential race, and the UK EU Referendum.

The key foci for UK companies wishing to do business in the region will continue to be: trying to put the company ambitions in the context of the wider UK commitment to the region; continuing to make the case to government bodies for greater support and engagement; patience and good humour; personal relationships; being in it for the long haul; good quality services and goods; and reputation.”

Lt. General Sir Simon Mayall © FINANCIAL TIMES

Dame Fiona Woolf is an energy lawyer at CMS Cameron McKenna, specializing in the electricity sector, and served as the Lord Mayor of the City of London in 2013-14.

“Having worked in CMS Cameron McKenna’s Bahrain office for three years in the 1980s on banking and project finance and at an early stage in the development of Islamic Finance, I have remained interested in the MENA region ever since.

The MEA is constantly visiting the MENA region and receiving inward visits in the UK. It transfers knowledge, gathers intelligence, creates great networking opportunities and opens doors for British companies.

The focus for UK businesses is always on the opportunities for bilateral trade and investment, particularly for providing services based on global experience, and this should continue to be a priority for the coming year.”

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© FOREIGN AND COMMONWEALTH OFFICE

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he Middle East Association has appointed an Advisory Board to help direct sector strategy. As a sector approach has become increasingly important both to the way that we do business and how our members enter the MENA markets, the Sector Advisors have been selected to ensure that our activities offer the greatest advantages to our companies.

Sector-based programmes have been put in place for the coming year. These programmes are designed to drive increased engagement in the sectors across the MENA region, highlighting current business opportunities at the forefront of discussion.

To introduce the Advisory Board to our Members and networks, we have asked them to share some of their own insights on business and the MENA region.

Sir Paul Judge l Sir Paul Judge was a Director of Abraaj Capital Ltd until 2015, and is the key benefactor of the Judge Business School at the University of Cambridge, which has a satellite operation in Sharjah, UAE. “The MEA builds contacts between the UK and ME countries and companies and provides information and guidance. Throughout the next 18 months, businesses could benefit from this guidance, as the Iranian position hopefully moves positively.

The end of the Syrian civil war is vital to restore confidence in the Middle East, and North African countries are still in a volatile political position. Turkey seems to be under great pressure with increasing censorship, the migrant crisis and the need to satisfy the Kurds with sufficient autonomy - all of which will shape business in 2016.”

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advisoryboard l Gregor Paterson-Jones is an investment committee member on the European Fund for Strategic Investment at the European Investment Bank. Prior to this, he was Managing Director for Energy Efficiency at the UK Green Investment Bank.

“Through my work in Clean Energy financing I have made and kept strong relationships in the region and over the years worked with organisations such as Masdar in financing opportunities both in the UK and in the MENA region.

The MEA is in a unique position to foster positive and meaningful trade relationships in the region. We are entering a period of financial and geopolitical instability in the MENA region occasioned by conflict and changing dynamics of the world energy markets, and the staff, advisors and confreres of the MEA have a rich history of transaction and advisory activity in these sectors.

The UK benefits from singular expertise in certain private-public structures that have been created to enhance value and reduce risk for private investors. It also has a very strong engineering base in the area of clean and traditional energy.

There is a role for the UK private private sector, intermediated by both the MENA public sector and the UK government, to share learnings, bring skills, and provide access for these entities to the international capital markets.” l Sir Mark Moody-Stuart is on the Board of Directors for Saudi Aramco and for Accenture. He is a former Chairman of Royal Dutch Shell and was also formerly a Director of HSBC. “I have had a long connection with the region through the oil industry, having first worked in Oman in 1967. My industry connections have mainly been with the Gulf, Egypt and Syria. I also worked in Turkey for four years in the eighties and visited annually since.

I think that the MEA can play a big role in making sure that up to date business information on the countries of the region is available through frank briefings with informed people. The MEA organised business missions are an invaluable source of information.

There is clearly a great opportunity in Iran in the next 12 months as the

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Gregor Paterson-Jones

Sir Mark Moody-Stuart

Baroness Zahida Manzoor

Sir David Wootton

country opens up, but equally there are likely to be rapid economic changes in Saudi Arabia, which should also create opportunities.” l Baroness Zahida Manzoor joined the House of Lords in 2013. She has held several senior positions in the NHS and then the regulation of Legal Services.

From 2003 to 2011 she served as Legal Services Ombudsman for England and Wales.

From 1992 to 1997 Baroness Manzoor served as the Chairman of Bradford Health Authority before being appointed as one of the eight Regional Chairmen for the National Health Service (NHS) until 2001.

We welcome Baroness Manzoor to the Advisory Board, and value her experience in the health sector, international affairs, and high-level change management. l Sir David Wootton is a former Senior Partner at Allen & Overy, specialising in corporate transactions and corporate governance. He was Lord Mayor of the City of London 2011-12, and is Deputy Co-Chair of the Saudi British Joint Business Council.

Sheikh Bilal Khan

Sheikh Bilal Khan is Co-Chairman and Partner at Dome Advisory. He holds various executive board positions and featured in the television series ‘Secrets of Success’ as one of 20 London-based personalities.

In his government business ambassadorial role as UK Trade & Investment Catalyst, Sheikh Bilal is promoting UK excellence internationally and the City of London in particular as a leading Islamic finance hub. He works in close collaboration with the UKTI, the British Foreign Office and The City of London Corporation as well as delivering executive training programmes for governments and private sector in the UK and across the globe.

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The Magazine of the Middle East Association

New Members Welcome to the new MEA Members who have joined us since December 2015.

n Alexander Dennis Alexander Dennis Limited (ADL) is the UK’s leading bus and coach manufacturer.

ADL produces a wide range of innovative and fuel efficient, low floor single and double deck buses, plus a full portfolio of coaches, welfare and mini vehicles. www.alexander-dennis.com n Alpha Omega College Alpha and Omega is a small private college situated in the middle of the capital city of Wales, Cardiff, established with the consultation of the Welsh Assembly Government, Wales Development Agency, Cardiff County Council, Venture Wales, Business Eye and International Business Wales. www.alphaomegacollege.co.uk n Al Omran Holding Al Omran Holding is a leading investment company. Established by entrepreneurs and co-investors to invest in mid-cap companies in the MENA, there is a special focus on Egypt. The Holding provides investments in key industries including services, retail, transportation and distribution. n Bradley International Development

Services

We support your company or organisation in positively and effectively responding to the opportunities for socially responsible development projects, both internationally and domestically.

Operating from a main base in Edinburgh, Bradley International is an independent Scottish company that provides highquality in-house support. www.bradleyinternational.eu n British Approvals Service for

Cables (BASEC)

British Approvals Service for Cables (BASEC) is an independent and non-profit accredited certification body, synonymous with quality and safety. We provide product certification (approval) services globally for all types of cable and wire, ancillary products, and also provide management systems certification for the cable sector. www.basec.org.uk

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n British Arab Commercial Bank

(BACB)

Established in London in June 1972, BACB is a wholesale bank and an established provider of trade finance and treasury services to Africa and the Middle East. We provide full trade finance services across the whole of the region from our headquarters in London, with active relationships in the majority of these countries. www.bacb.co.uk n Direx Solutions Direx Solutions is a global management consultancy and a leading advisor on business strategy. We partner with regional and national government, logistics operators, regulatory agencies, equipment and infrastructure contractors to identify their highest value opportunities, and transform their organisation. www.direxsolutions.com n ENVAC Middle East A global supplier of sustainable vacuum waste collection systems for a better urban environment, Envac designs and installs turnkey automated waste collection systems (AWCS) for residential and commercial developments, hospitals, airports, industrial kitchens and town centres. www.envac.ae n International Hospitals Group International Hospitals Group (IHG) is the most experienced international healthcare services company in the world. Founded in 1978 IHG has successfully completed over 480 healthcare projects in 52 countries for private and public sector clients including 24 national Governments, the UN, the World Bank and the International Finance Corporation. www.ihg.co.uk n Mutual Finance With over twenty years of experience Mutual Finance are a long established real estate advisory boutique assisting our client base with the procurement, disposal and finance of real estate across all real estate sectors. During 2016 Mutual Finance arranged over £742m of completed loans. www.mutual-finance.co.uk

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meanews n NATS Services Whether an airport, airline or ANSP, NATS is ideally placed to help you meet every challenge. We provide answers to the critical issues faced by the aviation industry around the world and have built our reputation on delivering a first rate, safe and efficient service. www.nats.aero n QinetiQ A FTSE 250 company, QinetiQ uses its world-class knowledge, research and innovation to provide high-end technical expertise and advice, to customers in the global aerospace, defence and security markets. www.qinetiq.com n Simmons & Simmons Middle East Simmons & Simmons has been operating in the Middle East for over 30 years. Our Middle East practice comprises three offices in the region, as well as alliances with firms in Riyadh and Jeddah. Our comprehensive and integrated service covers our clients’ requirements wherever their business takes them. www.simmons-simmons.com n Stoney Ware Estate n Virtual Human Resources VHR is a Global Recruitment Consultancy providing on-demand recruitment solutions to the Aerospace & Aviation, F1 & Automotive, Engineering & Defence and Marine sectors. VHR deliver not just the person or team of people, but the logistical and relocation support across the world. www.v-hr.com n Worldwide Energy Logistics WELL provides a full and comprehensive freight forwarding, supply chain and project management handling service for both international and domestic services.

We have experienced and professional personnel to fulfil all roles and requirements within the oil & gas and telecommunications sectors, for transportation by air, sea, road or charter. www.well.uk.com n Xrail Solutions Drawing on years of experience within major rail operators across all levels, we offer a higher quality precision engineering service to tackle the most challenging of rail programmes. www.xrailgroup.com

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he MEA has a full, published programme for the next six months, which we will be developing further as more events are confirmed. Please check our website and newsletter regularly for the latest updates.

For the past 18 months we have focused our events on key business sectors which have greatest impact and interest for our Member businesses.

We have held several successful large-scale events in this period; most notably our Opportunity Arabia Conference at the Institution of Civil Engineers and our Autumn Lunch at the Grosvenor House Hotel. These were both key networking events for our Members, their guests, and colleagues in business, government, and National Embassies. Our Mansion House Dinner with the Lord Mayor on the 11th April, 2016 builds on this success.

Our aim for the remainder of 2016 is to respond to the needs of our Members and adopt a more personal approach. We want to learn more about your businesses to ensure that the MEA plays its role in supporting British companies in their MENA export efforts.

We welcome fresh ideas and feedback from Members on how we can further support your MENA business interests. We hope to see you at an MEA event very soon.

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DIARY OF EVENTS 19th – 20th April

20th September

24th – 28th April

19th – 23rd September

27th April

26th September

6th – 9th May

3rd – 7th October

7th – 17th May

10th October

8th – 10th May

21st – 26th October

Conference The Global Water Summit

Trade Mission Kurdistan

Ambassadorial Lunch Bahrain

Trade Mission Iran

Trade Mission Saudi Arabia

Conference Abu Dhabi International Downstream Summit

13th June – 6th July

Conference International Festival for Business in Liverpool

RAMADAN 6TH JUNE – 5TH JULY

Conference Opportunity Arabia

Trade Mission Iran

Market/Sector Briefing UAE

Trade Mission Turkey

Market/Sector Briefing Egypt

Trade Mission UAE

11th – 16th November Trade Mission Egypt

For further details on any of the above, please email (info@the-mea.co.uk), or call the MEA office on 020 7839 2137

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© BERTRAND DUPERRIN

Dubai Expo 2020 T

he Dubai Expo 2020 is now only four years away, and there is momentum gathering around the event. Despite the large scale of the programme, and the enthusiasm around the possible opportunities to contribute, the organising committee has not released significant amounts of detail on the plans.

At the time of going to press, the official logo was about to be unveiled in a ceremony at the Dubai Fountain underneath the Burj Khalifa, following a design competition.

There has been a slow drip feed of content on the ethos surrounding the event. The latest campaign has focused around the cultural elements, using the tagline ‘Discover the connection’. This has been accompanied by sepia images emphasising the under-acknowledged history and local culture of the Emirate.

The emotional campaign is in contrast to the bold statements that appeared around the city on billboards following the appointment of the hosting responsibilities. In late 2013, the confident message was: ‘Whoever said winning isn’t everything doesn’t know Dubai’.

The evolution of the brand has been an interesting indicator of the sentiment of the planning committee, which has yet to reveal holistic preparations for the event. From a business standpoint, developing relationships early and being first on the track has been even more

The Magazine of the Middle East Association

important than usual. As the UKTI website states, Expo 2020 is expected to bring 25m visitors in 2020 and $23bn worth of economic benefits to the country over the next 5 years. In addition to approx. $8bn of government funding it is estimated that additional investment will be needed in hotels, retail and related infrastructure development, which may bring the total spend closer to $40bn.

The release of tenders has been controlled and phased. The majority of questions concerning the event that the MEA receives are how to become involved in the process and how UK companies can offer their services.

From the start of the process, the procedure has been well laid out and very clear. Firstly it is necessary to be included on the preferred suppliers list in order to be considered for any contracts. The guidelines have been set out on the Expo 2020 website.

There is still a significant amount of opportunity to contribute to the Expo.

The procurement packages are updated regularly, and while the larger contracts have been appointed, scope for involvement in construction, design and delivery is still widespread. Some contracts are out to tender into 2017 and 2018. There have been some significant wins for UK companies from the initial stages. Two of the three main pavilions are being designed by UK firms – Fosters & Partners and

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dubai expo2020 Grimshaw have been selected to create the Mobility and Sustainability pavilions respectively.

The degree of cooperation and regard for British businesses is supported by other areas in UK-UAE partnerships. In February this year, as reported in The National, the UK and UAE space agencies signed a memorandum of understanding to create a strategic space partnership. This will open the way for extensive cooperation in space research, scientific missions and the search for popular applications. The memorandum was signed by UK Space Agency chief executive Dr David Parker and UAE Space Agency chairman Dr Khalifa Mohammed Al Rumaithi, who was in the UK visiting various key space facilities.

Cooperation is already present between Deimos Space UK and the Mohammed Bin Rashid Space Centre, which started a joint satellite project in 2015 to monitor from space the specific types of environmental change in Dubai, through the development of algorithms and 3D modelling. Using imagery collected by UK satellite Deimos-2 and UAE satellite Dubaisat-2, the Dubai Government is able to observe, monitor and detect different types of changes in vegetation, water, road networks and buildings. This project, named Safiy, demonstrates the UK’s commitment to the MBRSC by bringing space technology back to Earth in support of the Dubai Smart Cities initiative.

There have been some strident moves in the two years since Dubai was appointed the host for Expo 2020. Yet the most visible developments will soon be coming into view. Director-General of the Dubai Expo 2020 and Minister of State for International Cooperation, Reem Al Hashimy, said: “Over the final two years of the programme, the site will really start to take shape as we create exciting exhibits and transform the land to an active and inspiring destination that gives reality to our overall theme “Connecting Minds: Creating the Future”. The Middle East Association will continue to update Members as the situation evolves. For further information, please contact UKTI in Dubai, who have identified the Expo as a High Value Opportunity, and, as such, have a dedicated team working on the project.

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governmentupdate We round up all the latest updates from Whitehall on the changes that will affect Members and business with the MENA region. © ANGELA REYNOLDS

NEW MINISTERS

Mark Price appointed Minister of State jointly at the Foreign and Commonwealth Office and the Department for Business, Innovation and Skills. He takes up post in April 2016. l

Sajid Javid to lead UK Business Task Force for the Middle East.

Business Secretary Sajid Javid will chair a task force bringing together leading British businesses to increase British and international business activity in the region and generate hundreds of thousands of job opportunities for Syrian refugees and for the communities hosting them in the Middle East.

Working with other governments in the region, the taskforce will focus on how to create the right conditions for the private sector in the Middle East to thrive and to encourage growth.

Stronger economies and growth will create jobs and opportunities for those displaced in the region due to conflict.

The UK government will also provide greater access to the European market for Middle Eastern businesses.

The Business Secretary said: “Having recently taken a business delegation to Jordan to explore what opportunities and investments they could share with the country, I know the benefits the private sector can bring in.” l

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NEW TRADE ENVOYS

l Jeffrey Donaldson MP is the Prime Minister’s new Special Trade Envoy to Egypt. The Democratic Unionist MP for Lagan Valley took his first visit to Egypt in his new role in February 2016.

His appointments focused on energy, infrastructure and education, and included witnessing Minister of Electricity Mohamed Shaker and British company Actis sign a significant Memorandum of Understanding worth $350m.

The deal allows Lekela Power, a $1.9bn pan-African renewable power generation company 60% owned by Actis, to build a new 250 MW wind power station in the Gulf of Suez area.

Lord Lamont was appointed the UK’s first Trade Envoy to Iran in January 2016. He is also the Chairman of the British Iranian Chamber of Commerce.

Speaking to The Independent, he said this is an exciting time for the deepening relationship between Iran and the UK. “The UK’s trade is miles behind other countries’. It is onetwentieth Germany’s, and lower even than the US, for whom trade with Iran is theoretically illegal. There is a tremendous opportunity to catch up.” l

l Andrew Murrison, MP for South West Wiltshire, has been appointed Trade Envoy for Morocco and Tunisia. He is currently Deputy Chairman, and a previous Chairman, of the All-Party Parliamentary Group on Morocco.

He said: “It is a pleasure to be given the responsibility of representing the United Kingdom in trade discussions with Morocco and Tunisia. I am looking forward to developing greater links between these two economies and the UK.”

NEW INITIATIVES LAUNCHED

2016 has been announced as the British-Egyptian Year of Research, Innovation, and Education. In January British and Egyptian universities signed ten partnerships to boost collaborative work and research, as the British Council and private sector efforts focus on investing in the burgeoning young Egyptian population.

Under the agreement, the UK and Egypt will work together on higher education and assessments reform, leadership in higher education, specific areas of research such as health, medicine, and cultural heritage, as well as the provision of technical and vocational education to young people. One of the main aims is to establish a working committee to develop a new Higher Education funding and governance model for Egypt.

British Ambassador John Casson said: “Education is an area where the UK and Egypt are perfect for each other. This partnership has the potential to transform both Egypt and the UK and to help our countries succeed for generations to come.”

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MEA PROVIDES EVIDENCE TO UKTI COMMITTEE

In December 2015, the MEA was asked to give a statement as part of the Business, Innovation and Skills Committee inquiry looking at Exports and the role of UK Trade and Investment.

The scope of the inquiry looked at: 1 What policies are required to help meet the Government’s headline targets of £1 trillion exports and 100,000 more companies exporting by 2020? In particular, what further support should be provided to help SMEs meet their export potential?

2 Is UKTI fit for purpose? Are the indicators used to measure its performance the right ones? How could UKTI be better held to account?

3 What UKTI activities are most effective at increasing exports? What more could it do?

4 What more can other bodies, such as the banks and UK Export Finance, do to provide financial assistance to companies seeking to export?

Iain Wright MP, Chair of the Business Innovation and Skills Select Committee, said: “The Government has committed itself to a target of a £1 trillion exports by 2020 but few expect this to be achieved. In our inquiry, we want to bring forward recommendations which

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help Government properly support British business and work towards this highly ambitious export target.

“As a Committee, we will want to explore whether UKTI is fit for purpose and whether it is proactive in helping British businesses identify and navigate foreign markets and whether UKTI is making the maximum possible impact in increasing exports.”

An extract from the statement that the MEA provided is below: We warmly welcome the Committee’s timely inquiry into UK exports and the role of UKTI. There must be a more concerted effort by Government and its agencies to better promote opportunities in regions, such as the MENA, which can sometimes appear daunting to SMEs. UKTI and the Government must embrace new and innovative ways to showcase the potential of UK plc abroad.

This innovation is vitally important to help SMEs export more. For example, the MEA works on forming SME consortia for certain sectors to help them collectively bid for contracts abroad.

The Spending Review’s announcement to refocus UKTI to “enhance direct support to business and develop the private sector market” is to be welcomed, along with the investment of £60m a year into the

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governmentupdate GREAT campaign. However, it is critical that support for exporting to the MENA region is considered a vital part of this strategy.

While moves to improve the flexibility of UK Export Finance are an encouraging move, there is still a need to improve arrangements for complimentary finance. The UK faces unprecedented competition by emerging and advanced economies in the exporting market. The Government must ensure there is available financial assistance as part of an environment which encourages larger banks to invest for British businesses to compete with rival countries.

It is also worth noting that the City itself has significant exporting potential. With 10 of the world’s 25 fastest growing markets comprising Muslim majority countries, the demand for Islamic financial services continues to grow rapidly.

In addition, falling oil prices will mean it is likely oil-rich countries, especially the Gulf Cooperation Council, may need to resort to borrowing for its investment plans.

This poses challenges around Sharia compliancy – as demonstrated by Saudi Arabia’s intention to launch an international bond programme in January, to borrow more as oil receipts decline.

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ince the beginning of 2016 there has been a growing rhetoric in Kuwaiti public debate about the role of public-private partnerships (PPPs). This structure is increasingly considered as the preferred method to finance the State’s ambitious infrastructure projects, particularly in light of the sustained reduction in oil price and continuing regional unrest that may affect the Gulf economies.

This situation does provide new opportunities for British companies and Kuwaiti businesses. The Kuwaiti government has shown a pragmatic approach to the developments, and the Kuwait Direct Investment Promotion Authority held a large-scale Investment Conference in Kuwait City in March 2016, where these issues were discussed openly.

SUBSIDY REVIEW IN LIGHT OF THE OIL PRICE

© STEVE AND JEM COPLEY

March 2016 saw the State Cabinet approve economic reforms. The most sustained debate has been around the question of a reduction in subsidies on key commodities. Some 70 per cent of Kuwait government subsidies go to electricity and gasoline.

Continued growing demand for fresh water will require four times the current production rates by 2030.

As part of the economic reform packages currently being discussed, one proposal before the National Assembly suggests an increase of petrol prices by over 50 per cent, as well as a significant rise in the prices of electricity and water.

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However, due to a 1995 law, the government needs the approval of the National Assembly to raise charges on public services, and the Assembly is unwilling to waive this right. Scheduling issues mean that the proposed changes to water and electricity subsidies will not be discussed until April.

INFRASTRUCTURE PROJECTS AND ASSETS

The Kuwait Deputy Prime Minister, Finance Minister, and acting Minister for Oil, Anas al-Saleh said that “real rationalising of spending and real privatisation” is needed, speaking at a MEED conference in March.

He went on to confirm that the government is looking to privatise assets including airports, ports and some facilities of the Kuwait Petroleum Corporation to free state finances and narrow the budget deficit.

It is encouraging that the major projects are still moving forward, as the Minister confirmed. Kuwait awarded contracts worth $31bn last year. It also has roughly $150bn worth of planned projects in the pipeline.

“We will continue to spend on our infrastructure projects, as planned. We have never seen such high levels of capital expenditure [despite low oil prices]”, the Minister said. “We are focusing on infrastructure projects that work best and avoiding falling into the trap of economic stagnation because Kuwait’s economy depends on government expenditure. We are on full throttle and not holding back.”

PUBLIC-PRIVATE PARTNERSHIPS

Support for PPPs comes from the highest levels in the Kuwaiti administration. At the Investment Conference, the Prime Minister reaffirmed the government’s support for all initiatives that will strengthen public and private sector partnerships, highlighting the variety of procedures and legislation that the government has introduced to align local and international partnerships.

Chairman of the Kuwait Chamber of Commerce and Industry Ali Al-Ghanem said Kuwait has a productive private sector with experienced and ambitious individuals, and a favourable investment regime for foreign companies.

DEVELOPMENT OF RAIL PROJECTS

The Gulf Rail project announced key progress at the Middle East Rail event in Dubai. Kuwaiti Minister of Public Works and Minister of State for National Assembly Affairs Ali AlOmair said: “The project’s course in Kuwait has been identified, and will go through cultivated lands whose owners will be compensated.”

Removing these obstacles was a major condition for offering the project through the PPP programme, which now makes the task of securing a Gulf investor for the project significantly easier.

NEXT STEPS

The Kuwait Authority for Partnership Projects (KAPP) was established in 2014, and the mechanism is gaining importance for international businesses seeking to establish themselves in the Kuwaiti market. “We have a large number of opportunities in the region chasing limited foreign capital”, said Dr Rasheed Al-Qenae, Managing Partner, KPMG Kuwait. “If KAPP and KDIPA can work in sync to provide a single window to foreign developers investing in important infrastructure projects, this could be the real differentiator.”

Please contact the MEA or UKTI in Kuwait for further information on any of these opportunities.

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ifb2016 International Festival for Business 2016 brings the world to Liverpool

Chancellor George Osborne at a reception for foreign ambassadors at 11 Downing Street on 1st February 2016.

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he International Festival for Business 2016 (IFB2016) is taking place at an exciting time for the North of England, which is increasingly becoming a hub for global business, innovation and trade.

Keen to strike while the iron is hot, the UK Government has been quick to highlight the North of England as an attractive investment prospect. In China for example the Chancellor unveiled the ‘Northern Pitchbook’ to showcase the Northern Powerhouse as a prosperous economy in its own right.

Like the rest of the UK, it will achieve this by connecting with partners from all around the world, such as the Middle Eastern firms keen to help the UK develop its cutting-edge aerospace technology, or the Far-Eastern companies looking to develop nuclear technologies or computing innovations with Northern researchers and businesses.

IFB2016 will be showcasing the very best in global businesses in three particular sector groups: manufacturing, energy and environment, and creative and digital, all of which are exciting sectors across the world and particularly in the UK. The UK exports all around the world

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and has some of the most ancient trading cities anywhere to be found.

This is why IFB2016 will yet again be the biggest event of its kind in the world, following the success of IFB2014, where £280m in trade and investment deals were made.

The UK is a world leader in professional services, and this is reflected in the rate at which it exports services overseas. The UK is also the top destination in Europe for foreign direct investment (FDI), and the third-largest country in terms of its absolute value of inward FDI stock, testifying to the ease of doing business here and the extent to which our economy relies on foreign companies.

In goods, the UK has a strong brand, and a reputation for great safety records, and cutting-edge technology informed by scientific excellence and great design. Our businesses need access to overseas markets, and it’s a matter of targeting new destinations in an effective way.

Speaking at a recent event hosted by one of IFB2016’s lead sponsors HSBC, Lord Bilimoria, the Founder and Chairman of Cobra Beer and an IFB2016 Business Ambassador, put it strongly when he argued that

entrepreneurs starting to trade in the modern world should be global from day one.

Liverpool, long a global destination for industrial trade, is still an important business destination. Expecting over 30,000 UK and international delegates, people from around the world will come to Liverpool to witness the very best in innovative new technologies globally alongside the foundations of the Liverpool Superport, the Atlantic Gateway, and the Liverpool Exhibition Centre.

UK Trade & Investment and the Middle East Association play a pivotal role in making this possible and making sure that UK businesses have support to trade overseas and that overseas firms can set up and thrive in the UK. The UK is a nexus for business people from all over the world – IFB2016 plans to take advantage of this and confirm the UK the global leader in places to do business. In an increasingly connected world, Liverpool and the North are on the right side of global transformation.

The International Festival for Business will take place 13th June to 1st July 2016. For further information, please visit www.ifb2016.com

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Sector strategy gains traction in the market

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he Middle East Association has been trialing a sector-based programme for around 18 months, with a defined structure in place for the last six months. We have identified six core areas that reflect both our Members’ interests and also the best offering of UK companies in the MENA region.

UKTI has also adopted a sectorapproach, which aligns their offering much more closely with that of the government as a whole. The MEA has traditionally had expertise in certain areas, and we have been working to focus our efforts in areas that will allow us to maximise the value for our Members and contribute to the UKTI Trade Challenge Partners programme.

“The sector focus has already produced dividends for our Members and strengthened the MEA products across the board”, said Peter Meyer, CEO of the Middle East Association.

“We are lucky enough to have secured the services of a prestigious panel of Advisors to help direct our programme going forward. We welcome the opportunity to integrate our Members into this schedule of events.” An update on our sector-based activities is below.

DEFENCE AND SECURITY

The Defence and Security Working Group held their inaugural meeting earlier in the year. Particular areas of interest include the markets in North Africa, with Algeria and Morocco taking precedence. Capacity building and knowledge transfer continue to be the key buzzwords in the sector the longevity of relationships and a commitment to the market is expected for any serious level of business to be conducted. The MEA is building relationships with UKTI DSO and the Military Attachés stationed at post, as the feedback is that business would benefit from a more joined up approach.

EDUCATION

The inaugural Education sector working group meeting is scheduled to take place in April. There is strong opportunity in this sector across all

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HEALTHCARE

The MEA is pleased to welcome back International Hospital Group, who have renewed their membership and long been a lynchpin for MEA efforts in the healthcare sector. Emergency and primary healthcare top planning agendas throughout the region, with Saudi Arabia, Kuwait and Qatar highlighting the importance of healthcare provision in their national vision documentation. Significant contracts in Algeria continue to move forward, and crisis situations preoccupy tenders from UKTI.

CONSTRUCTION AND INFRASTRUCTURE

of the countries covered by the MEA. Given the strength of representation of the sector among MEA Members, there is some suggestion that this Working Group could be divided into Education Providers, such as British schools and language colleges, and Education Suppliers, such as consultants, materials vendors and other representatives. Any thoughts welcomed.

The Gulf, particularly in the UAE and Qatar, has advanced education planning and the pressure on school places continues to increase. The themes of technical training and local content run throughout the majority of the contracts that we see for tender in the region.

FINANCIAL AND PROFESSIONAL SERVICES

The MEA Financial Services group represents a strong cohort of our members, and one that particularly engages with other companies that we represent. The initial meeting of the Working Group has yet to take place, but financial reform throughout the region means that potential services are top of the agenda. As seen earlier in the magazine, the MEA is working closely with UK Export Finance and other institutions as sanctions against Iran are peeled back. Access to finance and secure transactional processes are also key topics for North African markets, particularly for SMEs.

Some construction projects have been affected by the reduction in the oil price, but many are continuing to progress rapidly. The MEA has put together a Last Mile Consortium, to group British SMEs under an umbrella organisation, which we hope will strengthen the offering when going to market. The consortium will then be able to compete for contracts for which they otherwise may not be eligible. We are also planning a series of events around the Big Five construction exhibitions this year, so that companies may be prepared for a delegation.

ENERGY

The drop in oil price has of course led to much discussion within the Energy sector throughout the second half of 2015 and into 2016.

Despite the postponement or delay in some major infrastructure projects, companies such as BP and Shell have reinforced their commitment to the region and local counterparts. The need for diversification has led to the reassessment of some national plans and budgets, but has also led to opportunity in new projects and streamlining analyses. Iran opens up a new market for early entrants, and markets such as Iraqi Kurdistan and Lebanon may see significant developments this year.

If any of our Members would like to become involved in the sector-specific working groups to discuss pertinent issues and drive forward an agenda for the MEA, please get in touch with the office.

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Salvaging Syria’s Economy While any meaningful reconstruction programme will require considerable external financial support, the reluctance of Western powers to challenge Assad has left his regime in a strong position to dictate terms, writes David Butter, Associate Fellow at Chatham House.

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goes through Damascus channels.

Similarly, any meaningful postconflict reconstruction programme will need to involve considerable external financial support to the Syrian government. Some of this could be forthcoming from Iran, Russia, the UN and, perhaps, China; but, for a genuine economic recovery to take hold, Western and Arab aid will be essential. While this provides leverage, the military intervention of Russia and the reluctance of Western powers to challenge Assad mean that his regime remains in a strong position to dictate terms for any reconstruction programme.

If a political transition leaves the main elements of the regime in place, this would not amount to a credible settlement in the eyes of a significant portion of the Syrian population, both within the country and in exile.

INTERNAL DISPLACEMENT IN SYRIA (JANUARY–AUGUST 2015)

conomic activity under the continuing conflict conditions in Syria has been reduced to the imperatives of survival. The central government remains the most important state-like actor, paying salaries and pensions to an estimated 2m people, but most Syrians depend in some measure on aid and the war economy.

In the continued absence of a political solution to the conflict, ensuring that refugees and people in need within Syria are given adequate humanitarian support, including education, training and possibilities of employment, should be the priority for the international community.

The majority of Syrians still living in the country reside in areas under the control of President Bashar alAssad’s regime, which means that a significant portion of donor assistance

Source: Adapted from UN OCHA, https://www.humanitarianresponse.info/en/node/111532. The boundaries and names on this map do not imply endorsement or acceptance by Chatham House.

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Such an arrangement would allow for some ramping up of UN aid efforts, but it would not provide a sufficient basis for planning a long-term reconstruction programme in which international financial institutions could play a substantive role.

There is a risk that the West could become entangled in a web of political trade-offs in which economic aid is made conditional on concessions from Assad, while Assad seeks to make cooperation on the political settlement and in combating Islamic State of Iraq and Syria (ISIS) conditional on his receiving economic support.

Western governments could come under increasing pressure to approve the channelling of reconstruction finance to the regime through multilateral agencies as a pragmatic means of providing humanitarian assistance and stemming the exodus of refugees.

In the face of such pressures, Western powers should focus on setting clear benchmarks, including political inclusion and strict monitoring of ceasefires, before consenting to lift sanctions on the Syrian government.

Provision of direct budgetary assistance to the Syrian government should be made contingent on a high degree of transparency in the management of the state’s financial accounts.

These conditions must also include the right to offer economic support to communities that have established their own autonomous institutions in the course of the struggle against the regime. Otherwise there is a risk that the pre-2011 state structures will be reassembled in some mutated form.

For the full report and further insights into the impact of the Syrian conflict, visit Chatham House. https://www. chathamhouse.org/publication/ salvaging-syrias-economy

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