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No 139 February 2012
EDITOR’SDESK
EDITORIAL Editor-in-chief HH Sayyid Tarik Bin Shabib Group Editor Mayank Singh Assistant Editor Visvas Paul D Karra DESIGN Senior Art Director Sandesh S. Rangnekar Senior Designer M. Balagopalan Senior Photographer Rajesh Burman Cover concept Chanjeet Singh Production Manager Govindaraj Ramesh MARKETING Business Head Jacob George Senior Advertising Manager Avi Titus Advertising Manager Arif Abdul Bari CORPORATE Chief Executive Sandeep Sehgal Executive Vice President Alpana Roy Vice President Ravi Raman Senior Business Support Executive Radha Kumar Distribution United Media Services LLC OER PRESENTATIONS
Published by United Press & Publishing LLC PO Box 3305, Ruwi, Postal Code - 112 Muscat, Sultanate of Oman Tel: (968) 24700896, Fax: (968) 24707939 Email: publish@umsoman.com Website: www.umsoman.com All rights reserved. No part of this publication may be reproduced without the written permission of the publisher. The publisher does not accept responsibility for any loss occasioned to any person or organisation acting or refraining as a result of material in this publication. OER accepts no responsibility for advertising content.
15 AND COUNTING Oman Economic Review completes 15 years in 2012. What started out as a dream of empowering businesses and educating readers about the achievements of entrepreneurs in 1997, has ended up creating publication history over the years. Oman Economic Review has numerous milestones to its credit – it was the first magazine to start ranking the largest listed companies in the Sultanate as The OER Top 20 a decade ago; it pionered surveys like The Most Powerful Women in Business; The Best Banks in Oman and The Fastest Growing Companies. The brand has transcended the publication space by going into events like OER CEO Golf; The Oman Debate and Oman Green Awards. It gives me great pride to state that Oman Economic Review is recognised as one of the leading magazines in the GCC region. Our achievements are the result of our credo of constant learning. As we commence our onward journey, we are taking another momentous step by changing our masthead from Oman Economic Review to OER. The look and feel of the magazine also undergoes a metamorphosis. In an age where social networks, short messages and tweets are the order of the day, OER’s readerfriendly format connects instantaneously. While the magazine may have taken this bold step, our promise of giving our readers cutting edge and profound articles remains intact. Visvas Paul D Karra, Assistant Editor, who has been tracking the Budget for the fourth year in a row says, “The focus for 2012 is on job creation, education, training and health, which is good news for the citizens. However, the private sector and especially the SME segment would have been in a comfortable zone had there been some concrete proposals for them.” You can read his pointed analyses of the main highlights of Budget 2012 in this edition’s cover story. We look forward to your valued feedback and continuing support in the years ahead.
MAYANK SINGH
Copyright © 2012 United Press & Publishing LLC Printed by Oman Printers Correspondence should be sent to: Oman Economic Review United Media Services PO Box 3305, Ruwi 112, Sultanate of Oman Fax: (968)24707939 Email: editor@oeronline.com Website: www.oeronline.com
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To read, click on link at: www.oeronline.com
PUBLICATION
CONNEXION 2012 UNVEILED United Press and Publishing, the publishing arm of United Media Services, has released the fourth edition of Connexion – Oman-India Business Review, 2012 coinciding with the 63rd Republic Day of India. The book was unveiled before an august gathering at the Republic Day celebration ceremony at the Indian Embassy on January 28. The prestigious publication, which talks about the excellent economic relations enjoyed by the two rapidly expanding nations, presents the snapshots of 2011 while giving pointers to the road ahead for the two countries. The socio-economic and political relationship between Oman and India is ever growing and the fantastic ties are reflected in the heightened business growth between the countries. One thing which signals the excellent
relations between India and Oman is the unabated bilateral investments. Even though the global markets are taking an unprecedented beating and investors are hesitant to step out, Indian and Omani businessmen continue to believe in each other’s capabilities and strengths. Political stability and sound macro-economic policies have relatively insulated the two countries from global shocks and fuelled their economic growth. After all, it is only in an environment of stability that friendships in any form can flourish. Connexion – Oman-India Business Review, 2012 offers valuable insights on these achievements making it a must-have resource for businessmen and investors while taking strategic decisions.
Connexion will be extensively distributed in Oman and India through
established channels and will go a long way in creating awareness about trade and investment opportunities in both countries.
MAIL EDUCATION AND PRODUCTIVITY I appreciate Oman Economic Review for publishing a detailed verbatim report of Oman Debate 2011 as the cover story of its January 2012 issue. It is an invaluable chronicle of one of the most animated debates in the recent history of Oman. It was very enlightening experience to watch government representatives, private sector leaders and the public talking about the most pressing issues facing the country. And the icing on the cake was the presence of the one and only Tim Sebastain as the moderator of the event. As some of the panelists rightly noted the shortage of skilled manpower will seriously affect the economic growth and increase the economic gap between Oman and its GCC neighbours. There is no denying the fact that education and training are the two crucial factors determining the economic growth of any country. Education is considered as one of the most important tools for building human capital. Properly trained and educated people earn more money
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than those with poorer training and education. Therefore it is high time we educated and trained our national workforce if we are really serious about improving their productivity. Vivek Gopal, Ruwi
GULF ECONOMY TO REMAIN INSULATED It is expected that GCC economies should see another year of solid growth in 2012 despite the prospect of further turmoil in global financial markets. The region continued to fare better than other regional economies with an estimated nominal and real GDP growth of 24.3 and 6.9 per cent in 2011, respectively. Although their economies will slow down this year due to slightly lower crude prices and the global financial upheaval, the real GDP in the six-nation Gulf Cooperation Council (GCC) will remain positive and relatively high in some members. A recent study by Global Investment House (GIH) estimates that the six GCC
countries recorded a budget surplus of around $183bn in 2011-2012 fiscal year while the surplus could edge down to nearly $179bn in 2012-2013 due to a surge in spending. It signifies that Gulf oil producers will likely remain basking in fiscal euphoria through 2012 for the second consecutive year because of strong crude prices and high regional production. However, not all sectors of the Gulf economy will benefit equally. Real estate and construction are still suffering from the debt and oversupply hangover from the boom that went bust three years ago. Banks and financial institutions are also under pressure from bad loans and anaemic local stock markets. On the other hand, higher salaries are good for consumer spending and the retail sector. Shibu Cherian, Madinat al Qaboos
Write to us with your comments/ feedback at: editor@oeronline.com
INSIDE
46 PERSONALITY
A SMART PERFORMER Khalid Tawfiq Abdul Rasoul, Director-in-charge of Sharq Sohar Steel Group, shares his views about success, doing business and the development of Oman
20 INTERVIEW
AN ELITE CLUB Rajeev Singh, Partner, Transaction Advisory Services, shares details of Ernst & Young’s Entrepreneur of the Year Award’s Oman edition
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26 ECONOMY
TOO GOOD TO REFUSE Downstream industries hold untold potential, both to grow the Omani economy and to enlarge the scope of its downstream services
BIOTECHNOLOGY
SPURRED ON BY CHALLENGES Professor Abdallah S Daar is now on a global mission to transform lives in the developing world using advances made in global health
22 COVER STORY
FRESH PERSPECTIVE TO GROWTH
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INSIDE
48 INSURANCE
INTERNATIONAL EXPERTISE Maroun Mourad, CEO – Middle East General Insurance, Zurich Insurance Company shares his views on Oman’s insurance market, its potential and challenges
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CLOSE UP
AUTO TALK
PERFORMANCE OF REGIONAL BOURSES
HYUNDAI'S GENESIS PRADA
Bahrain’s bourse suffered the worst decline in 2011 sinking 20 per cent while that of Qatar registered a positive growth of 1.1 per cent
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FACE2FACE
COMPANY PROFILE
A DEMOGRAPHIC IMPERATIVE Simon Williams, HSBC MENA Chief Economist argues for systemic structural reforms in the Middle East to face the demographic and growth challenges of the future
Editorial
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Branding
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Economy Watch
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Business Briefs
14
Executive Movements
18
Forecast
44
Event
49
Periscope
58
Health
62
Legal
64
Environment
68
Autonews
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Market Watch
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Gizmos
75
Billboard
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CARTOON CORNER
Browsing Corner
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By Kannan Murali
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BEYOND BUSINESS Revoking its name change, Sitco is all set to reinvent itself as the pioneer in office automation
BRANDING
Contemporary tone is the order of the day The new identity of OER and design changes explain the magazine’s brand ethos
The template for OER has been completely revamped to embody the values of the new identity of Oman Economic Review. •
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Rechristened OER, the new identity seeks to strike a fresher and more contemporary tone in all its manifestations. Opening with a new composition Cover Page, the template is fixed to ensure that the Brand Mark gets all the visibility and import it deserves. No visual will disturb the brand mark panel header. The Masthead page opens with a new graphic mnemonic each month to hint at the flavour of what the editor wants to draw attention to that month. The Contents page uses a centrally placed spine which takes a graphic cue from a graduated time line and the various featured articles appear as call outs from this spine. The reader will note that each page space that the identity lends its mark to, echoes a newer balance of vibrancy and colour and a slightly edgier styling format.
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Be it the mixed weight Page titles in both the brand colours or the kinked separator line that heads or bounds each page, there are a collection of several elements that have been carefully derived from the Brand Mark and its familial graphic palette to deliver a consistent “feel”.
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Each section carries its own section title on every page and these are bound by deco parantheses and a line to complement the OER brand echo on every facing page.
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Without being too heavy, the pages format and styling follows on from the Cover Page style.
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A defined header panel consistently divides content and issue/ date markers etc.
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Some other distinctive style formats include usage of full bleed solid colour pages juxtaposed with full bleed visuals which make for a striking and bold opening to any of the sections. The introduction of a transparent copy carrying panel easily draws attention to all the important opening passages.
ECONOMYWATCH
Not like last time According to HSBC’s Middle East Economic Quarterly for Q4, 2011 report, the Middle East region will fare better in 2012 compared to the 2008 crisis. It’s main hypothesis is as follows:
300 200 100 0 Algeria
Kuwait
Qatar
Morocco
Oman
Lebanon
Jordan
Bahrain
Kuwait
Bahrain
KSA
Qatar
Oman
Egypt
Pakistan
Algeria
KSA
Algeria
Morocco
Pakistan
Egypt
Lebanon
Jordan
Pakistan
Egypt
Ties with Asia offer the region support, but they are as yet too thin to offset global capital market dislocation and weak growth in the West
400
UAE
Spending growth will moderate if oil prices fall sharply, but core projects should persist and resulting deficits funded with ease
500
KSA
Subdued asset prices and recent high oil earnings suggest that the Middle East is unlikely to suffer a repeat of the slump triggered by the 2008 recession
GDP ($bn, 2010)
Private sector credit (GDP, 2011) 100 80 60 40 20 0 Jordan
Morocco
Lebanon
UAE
Nominal gross savings ratios (GDP, 2010) 80 60 40 20 0 -20 Bahrain
UAE
Oman
February 2012
Kuwait
Qatar
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BUSINESS BRIEFS
KIRAN ASHER CONFERRED PRAVASI BHARATIYA AWARD Origin (PIOs) and institutions run by them. They are recognised for their contribution in serving the Indian Diaspora and enhancing India’s image in different parts of the world. Asher was among the 14 eminent overseas Indians who received the award at the valedictory session of the 10th Pravasi Bharatiya Divas in Jaipur at the hands of Indian President Pratibha Patil Asher became the fifth individual from Oman to win the coveted award. The previous winners from Oman include Kanaksi Gokaldas Khimji (Khimji Ramdas) in 2003; P Mohammed Ali (Galfar) in 2004; P N C Menon (The Sobha Group) in 2009; and Suresh K Virmani (Bahwan Engineering Company) in 2010. Asher is the founder-partner and group managing director of Al Ansari Group of Companies, which was established in 1975 and has 11 companies in Oman, the UAE and India. Kiran Asher, founder partner and group managing director of Al Ansari Group of Companies, has been conferred the Pravasi Bharatiya Samman award for his outstanding contribution in enhancing India’s image in the Sultanate of Oman. Pravasi Bharatiya Samman is the highest award conferred by the Indian government on NRIs and Persons of Indian
Under his leadership, Al Ansari Group’s diversified activities include broad business lines such as contracting, trading and marketing, manufacturing and services etc. Asher is well known for his philanthropic work such as providing financial support to several NGOs in India for noble activities and is known as a “man to turn to in despair.”
THE WAVE SELLS OVER 75 OF ALMERIA EAST
QUICKLOOK
The Wave, Muscat has announced that over 75 per cent of its latest residential offering, Almeria East, has been sold since its first debut in October 2011. The 92 apartments spread over three boutique buildings have been met with great enthusiasm due to their unique characteristics and ideal location within the 6km mixed-use development that overlooks the pristine Gulf of Oman. Investors across Oman and the GCC region have been attracted by the strong yields on residential
BankMuscat’s net profit at RO117.5mn BankMuscat announced the preliminary unaudited results for the year 2011. The bank’s preliminary unaudited net profit is RO117.5mn for the year ended 31 December 2011 compared to RO101.6mn reported for the year 2010, with an increase of 15.6 per cent. Net interest income increased by 13.3 per cent to RO212.1mn in 2011 from RO187.2mn reported in 2010. Non-interest income at 82.1mn was higher by 5 per cent.
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HSBC named best research house Following a vote from over 500 regional clients, HSBC was named ‘Best Research House – Economics’ in the Middle East for the second year running by Euromoney magazine, one of the most important Global financial magazines. Simon Williams, chief economist, HSBC MENA says, “This award is great news for the MENA team and shows that our clients appreciate our market leading research.”
properties at The Wave, Muscat as well as the advanced delivery of the lifestyle amenities such as the beach parks, the golf course, marina and retail precinct. Michael Lenarduzzi, CEO of The Wave, Muscat says, “The Omani government’s commitment to infrastructure spending on roads, water projects, port facilities and airports underpins the confidence in the economy and population growth - all major drivers of the property market.”
Injaz Oman's camp Over 3,000 students participated in Injaz Oman’s innovation camp led by 20 Omran employees. The one-day youth empowerment programme was dedicated to educating students about workforce readiness, entrepreneurship and financial literacy. Omran employees mentored the students to identify solutions to business challenges by adopting principles of learning by doing and acquiring first-hand experience of the working world.
Khimji’s AC division rewards General dealers Khimji’s air-conditioning division invited its top 20 dealers to Paris to felicitate them for their year on year commitment to General AC sales support and also apprise them of the latest product developments. The award function was organised on a scenic River Seine boat Cruise, followed by two days of sightseeing across Paris. Khimji Ramdas is the authorised dealer in Oman for General AC for more than four decades.
BUSINESS BRIEFS
ACTION PLAN TO REGULATE SCRAP TRADE
IFC INVESTS $170MN IN BANKMUSCAT FOR SMES IFC Capitalisation Fund will invest $170mn in subordinated debt in BankMuscat, to strengthen its capital base and help increase access to finance for small and medium enterprises (SMEs) and middleincome home buyers. The $170mn subordinated loan agreement was signed recently between IFC Capitalisation Fund and BankMuscat. IFC Capitalisation Fund is a global equity and subordinated debt fund founded by International Finance Corporation (IFC), a member of the World Bank group, and the Japan Bank for International Cooperation. It aims to support banks considered vital to the financial system of emerging market countries. The investment will provide long-term capital resources to BankMuscat. The facility is focused on expanding operations of Al Wathbah, the bank’s small and medium enterprises (SME) division, and baituna, the housing finance unit.
In a nationwide collaboration to control the illegal trade of scrap metals in the Sultanate, the Executive Committee to Regulate Scrap Trade convened its first meeting at Mazoon Electricity Company. The committee set an action plan to ensure the implementation of scrap trade regulations as well as to educate the public on its laws and procedures. To that end, specialised sub-committees have been formed in all governorates across the Sultanate to oversee the scrap businesses.“The time has come to bring the rule of law to this business,” says Abdullah bin Said Al Badri, Mazoon Electricity general manager and chairman of the executive committee. “Recent years witnessed an increase in the theft and vandalism of public properties affecting the electricity sector in addition to the commerce, industry and service sectors.”
BUSACC TRADE DELEGATION VISITS OMAN
QUICKLOOK
The Houston-based Bilateral US-Arab Chamber of Commerce (BUSACC) organised a 14-member trade mission to the Gulf, which included a stop in Muscat. The trade mission arrived in Oman to attend meetings and events organised by BUSACC with the assistance of the US Embassy in Muscat. The delegation was led by the chairman of the board of BUSACC, David L Phillips. The US Embassy officers provided the delegates with an in-country briefing to understand the economic,
Etihad commences flights to Tripoli Etihad Airways, the national airline of the United Arab Emirates, operated its maiden flight from Abu Dhabi to Tripoli, the airline’s first new destination of 2012. The service, which will operate three times a week, is the only direct commercial flight between the UAE and Libya’s capital city. Inaugural flight EY687 departed Abu Dhabi at 07:45am and touched down at 12:15pm, local time.
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Nawras launches MoreData Nawras has introduced a different service called MoreData designed to enhance the experience of mobile broadband internet customers. For only RO1, the new service gives Nawras customers the opportunity to add MoreData and continue using their existing monthly internet plan, if and when the included data volume has finished, until the new cycle begins.
political, and security environment of Oman. US deputy chief of mission to Oman, W Johann Schmonsees, hosted a reception along with the Muscat American Business Council for the trade mission. The reception was attended by representatives from the private and public sectors. The delegates explored many opportunities to improve the US business presence in Oman and increase bilateral trade between the two countries, facilitated by the US-Oman Free Trade Agreement.
Masdar teams up with Development Bank of Japan Masdar Capital, the private equity arm of Abu Dhabi based renewable energy company Masdar, announced plans to form a renewable energy project platform, in partnership with Development Bank of Japan Inc. (“DBJ”). The Memorandum of Understanding (MoU) to this effect was signed at the World Future Energy Summit in Abu Dhabi.
New low air fares to Khasab Oman Air has announced a superb new offer on flights from Muscat to Khasab, the Governorate of Musandam’s regional centre. The national carrier of the Sultanate of Oman will be offering return flights with one month validity, at the special rate of just RO31. The reduced fare is being offered as part of Oman Air’s commitment to meeting the needs of local communities, and it will only be available for Omani nationals.
S T R AT E G I C D E P T H .
OER has evolved from one of Oman’s pioneering business magazines into a brand that not just enlightens – but also enables and engages Oman’s corporate community across multiple touchpoints. Offering decision-makers a highly credible, incisive, relevant and up-to-date source of information. Championing larger causes, like local entrepreneurship, the environment, and social awareness. And leveraging collaboration far beyond traditional print media – to deliver value far greater than just advertising. OER, in its all new avatar, invites you to forge a partnership that adds strategic depth to your engagement with Oman’s business community. Log on to oeronline.com
ENLIGHTEN. ENABLE. ENGAGE.
BUSINESS BRIEFS
OMAN AIR CELEBRATES MUSCAT-ZURICH SERVICE Oman Air celebrated the launch of its new service between Zurich and Muscat with a special event at the Park Hyatt Zurich. HE Khalil Al Khonji, chairman of the Oman Chamber of Commerce and Industry, was the guest of honour at the event which was joined by guests from the travel and tourism trade, media, corporate partners and the aviation industry in general. Says Wayne Pearce, Oman Air’s recently-appointed CEO, “The new service links Oman’s beautiful and timeless capital with what is one of the world’s great financial centres and an ideal gateway to the Alps for both winter and summer sports enthusiasts. ”
AHLIBANK UNVEILS ISLAMIC BANKING LOGO NAWRAS IT DEPARTMENT WINS ISO 27001 Nawras has won of ISO 27001 certification for a further three units within its IT department. With this all information handling, processing and storage by Nawras is aligned to ISO 27001 standards ensuring security and consistency. IT systems support all the critical services offered to Nawras customers and provide a professional performance in capacity planning and incident handling.
Ahlibank recently launched the logo of its Islamic banking services in the Sultanate under the brand name of Al Hilal Islamic Banking Services. The logo was unveiled by HH Sayyid Faisal bin Turki Al Said, COO of Brand Oman Management Unit at the event which was attended by members of the bank’s board of directors, the Sharia Board, CEO and other bank officials. Says Abdulaziz Al Balushi, Ahlibank CEO, “We are optimistic that Al Hilal banking services will have a positive impact on Oman’s Islamic banking sector.”
In February 2011 Nawras was awarded the ISO 27001 certification for its IT help desk and MyNawras customer portal. By December, the three departments of IT Management, IT infrastructure and IT Change had also been recognised as being in line with ISO 27001 standards.
QUICKLOOK
“This was a great example of teamwork,” says Abdulaziz Jaafar, acting IT Director. “It is a fantastic achievement for our IT team to have received two ISO certificates in the same year. Like the rest of the company, we are dedicated to the implementation of the best standards and practices in the market so we can deliver caring, excellent and pleasingly different services to our customers.”
Muscat Capital to advise Saudi proton therapy project Muscat Capital, the investment banking subsidiary of BankMuscat, has been appointed as financial advisor for Abdul Mohsen Al Muhaisen Sons Holding Company, which recently signed a concession agreement with the Ministry of Health, King Fahad Medical City, to develop, design, finance and commission Saudi Particle Centre (SPC) project, a proton therapy centre for treatment of cancer patients.
Australian businesswomen visit OCCI Khalil bin Abdullah Al Khonji, Oman Chamber of Commerce and Industry (OCCI) chairman held a meeting with the Australian businesswomen delegation headed by Dr Fiona Hill. Also present at the meeting were OCCI board members and Omani businesswomen. The OCCI chairman emphasised the importance of regular cooperation and coordination among businesswomen of both the countries.
Oman Oil wins corporate governance excellence awards The Capital Market Authority (CMA) recognised Oman Oil Marketing Company (omanoil) for corporate governance excellence in the services industry. The award was received by Faisal Al Shanfari, general manager of operations, engineering and HSSE, during a special event under the auspices of HE Sheikh Saad bin Mohammed Al Saadi, Minister of Commerce and Industry and chairman of CMA.
KOM attends 13th Gulf Industrialists’ Conference Geared towards promoting its wide-ranging infrastructure services and facilities provided to investors, the Knowledge Oasis Muscat (KOM) participated in the 13th Gulf Industrialists’ Conference and the International Exhibition held in Riyadh, Kingdom of Saudi Arabia. Representatives from KOM promoted KOM4 building, aside from its services of providing high-tech office spaces for the ICT sector.
EXECUTIVE MOVEMENTS
Haya Water has recently appointed Hussain Hassan Ali AbdulHussain as the new Chief Executive replacing Omar Al Wahaibi who left to take charge as the CEO of Electricity Holding Company. The new CEO brings with him 24 years of experience in oil and gas projects, operations, engineering and commercial developments in Oman. AbdulHussain says he relishes the challenge to lead one of Oman’s most dynamic, progressive and innovative companies.
of Oman Petrochemical Industries Company (OPIC). He subsequently moved to work at Oman Refineries and Petrochemicals Company (ORPC) as business development and marketing general manager before leaving to establish his own engineering support and services business.
A graduate from the University of Arizona, AbdulHussain spent 14 years working for Petroleum Development Oman (PDO) before moving to the Oman Oil Company and then helping with the creation
Commenting on his appointment AbdulHussain says: “I am truly honoured to be selected by the board of directors of Haya to lead the executive management team. Together we will continue to work with the same level of diligence, care and enthusiasm to deliver the mission and vision entrusted to Haya. “I have already been impressed by the professionalism, commitment and expertise of
The board of directors of Oman Air has officially announced the appointment of Wayne Pearce as the Chief Executive Officer, recently. Announcing the
appointment, Oman Air’s chairman, HE Darwish Bin Ismail bin Ali Al Bulushi, says: “On behalf of the board of directors, I am extremely pleased to welcome Wayne Pearce
the team here at Haya and I am looking forward to working with them to achieve our goal of making Muscat a better city through the implementation of our world-class water reuse project. Haya Water chairman HE Sultan Hamdoon Al Harthi welcomed AbdulHussain to Oman Air. We are confident that his experience and expertise will enable the airline to reach even greater heights of excellence and confirm it as one of the leading airlines in the region and beyond.” Pearce held several senior executive positions in Qantas, and other airlines in the region. He was also the group managing director with Gold Medal Travel in the UK, which has a special focus on the Gulf region. Says Pearce, “I am delighted to be taking up this important role as CEO of Oman Air. I look forward to helping the company both prosper and grow, as well as play a strong role in the development of Oman’s travel and tourism industry. Oman Air has achieved enormous progress in recent years and has emerged as one of the world’s leading luxury airlines.”
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to the company and highlighted the achievements and the wealth of experience that the new chief executive is bringing to help Haya achieve its mission to roll out the most advanced and sophisticated waste water treatment technology across the Muscat governorate.
SHUAA Capital, a leading financial services institution in the GCC region, has appointed Dr Sabah Hamad al-Sabah al-Binali as vice chairman of its wholly owned credit finance unit, Gulf Finance Corporation PSJC (‘Gulf Finance’). Dr al-Binali’s experience includes founding and overseeing regional financial services companies. He served as chairman of Zawya for ten years and three years as founding managing director of Credit Suisse Saudi Arabia. Prior to joining Gulf Finance, Dr al-Binali was principal and chief investment officer of Saffar.
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INTERVIEW
An Elite Club Rajeev Singh, Partner, Transaction Advisory Services, shares details of Ernst & Young’s Entrepreneur of the Year Award’s Oman edition in an interview with Mayank Singh
Ernst&Young (E&Y) is organising the Entrepreneur of the Year Award (EOY) in Oman for the first time. What are the reasons that convinced you about the Sultanate being ready for an award? Ernst&Young started EOY, in 1986 and over the years it has been held in 140 cities across 50 countries. Encouraging entrepreneurship is something that is very close to our heart and a part of our CSR policy which works on a triple E concept encompassing entrepreneurship, education and
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environment. In 2007 and 2008 we ran this award collectively for the Middle East and North Africa, in Dubai and Jordan respectively. The MENA Awards ran for two years giving us the confidence about the high level of interest and awareness in these countries. We decided to break it down to a country level and as a result we are organising the EOY Award in the UAE, Oman, Qatar, Jordan, Syria and Palestine in 2012. This will give businessmen from these countries a chance to participate in the World
Entrepreneur of the Year Award which is held in Monte Carlo. What is the process for the selection of winners that is being followed by E&Y Oman? We launched the EOY programme in Oman on January 7, 2012 and would be receiving applications till January 31. Applicants need to fill up a basic four-page form with some numbers and background details. In the next ten days we will evaluate the applications and on February 12, we will announce
a short list of finalists. The finalists will be required to compile a more detailed dossier highlighting their innovative spirit, leadership, value systems, beliefs, integrity and business performance. These are must haves that one would expect in a strong business leader. There are a set of six key criteria that the finalists will be judged against. The finalists get three weeks to compile the information and present it to us after February 12. Once this information is in place by the end of February, a small team from E&Y will visit the finalists for a personal interaction and to do a due diligence on the information presented. On February 12 we will also disclose the names of a panel of five independent judges. These judges will be judging the final scores for the finalists. The due diligence is important so that the judges are confident about the information presented to them. The judges will do an initial scoring till March 11, 2012. On the morning of March 12, there will be a small interactive session, wherein each finalist will be given half an hour face time with the panel of judges. That half an hour will be broken into two sessions – in the first 15 minutes the finalists will put forward his strengths and anything else that they would like to add while in the next 15 minutes will be set aside for the judges to clarify doubts or to pose any additional queries. Once the judges are through with the process, they will compile their individual scores and pass it confidentially to E&Y, and we will simply compile their scores. In the evening the winners will be declared at a grand event. Is there an eligibility criteria for business leaders to participate in the EOY awards? The eligibility criteria is as follows – an applicant needs to have two to three years of a successful business employing up to ten people. However one need to qualify this by looking at the stature of people who have won the World Entrepreneur of the Year Award in the past and these include stalwarts like Michael Dell, Narayana Murthy etc.
We are looking at a winner who is at the same level as these personalities. So more realistically, someone who has been in business for 15 years and has a business of close to $500mn will be comfortable at the World EOY held at Monte Carlo. This is not to deter others, as there is a possibility that there may be someone whose numbers may not be in the same league, but may be very strong in other areas or may have occupied a fantastic niche. To encourage young entrepreneurs we have a different category called the Emerging Entrepreneur of the Year, which will celebrate the achievements of young entrepreneurs but this award will be given at the Oman level. These are the generation next entrepreneurs who will come up to the level of the EOY in the next five years. The Emerging Entrepreneur of the Year should be someone who has five to seven years of experience behind him and has hit a topline revenue of $100mn in that short span. We are seeing very strong applications at that level. We are not looking at recognising people who are inheritors. What does a recognition like EOY mean for business leaders and people who win such an award? Winning a EOY award is a fantastic recognition at a global level. One, the winner gets to go to Monte Carlo for the World EOY function. As the event is spread over two to three days it presents a wonderful opportunity to meet your counterparts from virtually every country in this world. In addition, there are some of our alumni who also participate in the awards as well. To network in an environment where you have undivided access to high-profile business leaders for two to three days is an unparalleled opportunity. Most successful businessmen like to associate themselves with other successful businessmen and if one is able to establish a good rapport then this association continues for a long time. We also organise EOY alumni programmes that keep moving every year. There are three or four such events every year. For example at
Entrepreneur Of The Year programme History: The Entrepreneur Of The Year® (EOY) awards programme was created in the United States in a single Midwestern city by Ernst & Young in 1986 to honour entrepreneurs whose ingenuity and perseverance have created and sustained successful, growing business ventures. This year EOY is celebrating its 25th anniversary. In those years, the Entrepreneur Of The Year programme has expanded to more than 140 cities in 50 countries with awards presented annually to over 900 of the world’s most successful and innovative entrepreneurs. Entrepreneur Of The Year winners include individuals who have built some of business’s most recognisable names: • Jeff Bezos, Amazon.com, US • Tony Tan Caktiong, Jollibee Foods Corporation, Philippines • Andrea Illy, Illy caffè S.p.A., Italy • Ingvar Kamrad, IKEA, Sweden • Pierre Omidyar, eBay, Inc., US • Narayana Murthy, Infosys Technologies, India • Barry Lam, Quanta Computer, Taiwan • Sergey Brin and Larry Page, Google, Inc., US • John Mackey, Whole Foods Market, US • Mario Moretti Polegato, Geox International, Italy • Robert Braithwaite, Sunseeker International, Great Britain • Howard Schultz, Starbucks Corp., US, • Eddie Jordan, Jordan Grand Prix, Ireland
the ongoing World Economic Forum at Davos, we have an E&Y side event where we get people like Gordon Brown, the former Prime Minister of UK and other high level Economists to come and do a session for our clients and EOY alumni. In 2011 November, we ran a programme at Palms Spring, US where we had a very distinguished panel of speakers talking about the global economic situation for our key global clients and all our EOY alumni were invited to the event. So you have the access to all the E&Y events apart from the bragging rights and branding opportunities.
BIOTECHNOLOGY
T
he doctors lead us on an eyeopening, globe-spanning tour, showing us in vivid detail how developing countries can and are breaking the cycle of dependence, exchanging knowledge, and creating solutions that work for their own people as well as the rest of us. Prof Daar started at a medical school in Uganda and then left for the University of London, moving on to Texas, then back to Oxford, the UAE and finally Oman, where he was professor and head of department of Surgery at Sultan Qaboos University. He is currently professor of public health sciences and of surgery at the University of Toronto and also holds several other posts internationally. He is senior scientist, Sandra Rotman Centre for Global Health; chief scientist of Grand Challenges Canada; and chair of the advisory board of the United Nations University International Institute for Global Health. He was the founding chair of the Global Alliance for Chronic Diseases.
Excerpts from an interview with Visvas Paul D Karra:
Spurred on by
CHALLENGES
Professor Abdallah S Daar, ex-professor and head of the department of surgery at Sultan Qaboos University, is now on a global mission to transform lives in the developing world using advances made in global health. In a revelatory book, called The Grandest Challenge, co-authored with Peter Singer, another distinguished scientist, Prof Daar writes that every person’s life is of equal value, regardless of where he or she is born or lives in this world. The book argues that the revolution in biotechnology can save millions of lives but only if we find a way to bring knowledge and treatments out of state-of-the-art labs and into the world’s most remote villages.
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February 2012
What was the inspiration behind writing the book The Grandest Challenge? The world does not know how unequal it is and the disparities that exist, particularly in health. And there is a link between health and income - they reinforce each other. How is it possible to improve the situation using modern science and technology? My colleague Dr Peter Singer and I have worked very closely and over the past 10-12 years have developed a programme in Toronto which has been very successful both in terms of coming up with new ideas and support to get research funding. This is the first book I have written that is aimed at the public rather than professionals. It aims, among others, to inspire young people to be more aware of what they could do to change the world and make a difference both by advocacy and also finding their own entry points into wide area of global health.
What is the best way for an Omani individual to enter into this innovative field? In Oman, we should have better global public health education. We have good medical schools but they are not yet connected to the larger world and none of them are focused on how to make a serious contribution to the health and welfare of the rest of the world, and especially the poor. But they can make a difference. There is a beautiful example of His Excellency Yusuf bin Alawi bin Abdullah, the minister responsible for foreign affairs, investing $1mn in a bio-tech company known as Shantha Biotechnics in Hyderabad, India. That biotech company developed a vaccine against Hepatitis B bringing down the cost by a huge margin – from $20-25 per shot to less than $1 initially and later to about 35 cents. That company is among the largest suppliers of this vaccine to UNICEF and millions of children are now getting the benefit out of it from the initial investment of 1mn. The company was valued at $600mn a few years ago. The Hepatitis B vaccine has been in existence since 1969 but wasn’t available to the developing countries until Shantha developed it and made it affordable. The challenge isn’t just about developing such vaccines but also to reach out to the needy. We need health insurance schemes for the poor that would be more affordable.
of Canada and their results are better than that of the National Health Service of the UK. Yet remarkably Aravind does all this at one hundredth of the cost of the UK while treating half of all their patients for free because they are poor; and at the end of the year they get a profit which they plough back into the system since it is a nonprofit organisation. So in the book we highlight the importance of not only north-south flow of knowledge but also south-north and south-south learning.
Talent, ingenuity and the ability to innovate do not know any borders. What is important is to identify them, and provide an environment for their productive expression. There is a proposal to build a science city here in Oman. This is a great opportunity to harness and unleash Oman’s creative potential, in addition to help build public awareness of the value of ethical science to society.
What makes your book different from others on the same subject? In our centre in Toronto we have developed a niche which is at the intersection between global health, life sciences (biotechnology) and entrepreneurship. The book is informed by this approach and also by what we call integrated innovation i.e innovation in science/technology but coupled with social and business innovation. Our book covers these issues in a narrative form, with many intriguing stories and events. To our knowledge this is the first book to do this. We also narrate stories of how we came to work with funding organisations like the Bill and Melinda Gates Foundation and the work we still do with them. We have also now
The book also talks about frugal lowcost, efficient health care delivery systems that we, and even the wealthy countries, can all learn from. Take for example the Aravind eye-care system in Madurai, India. They have a few clinics around and they do as many eye care surgeries in one year as the whole
evolved into being a research funding organisation, Grand Challenges Canada, which focuses on funding great researchers in low income countries who have great ideas. You have brought out different ideas in your book, but what exactly is the road map? Who will benefit from the ideas you have discussed and how? First of all, people like reading about exciting new developments. A few years ago a book similar to ours, Thomas Friedman’s bestseller’s The World is Flat talked about information and communication technology (ICT). Today India is just as good as the US – very connected. We argue that the world has also become flat in terms of innovation, creating wealth and making an impact on society through life sciences and global health innovation. But interestingly, ICT and life sciences are now converging. We also aim to get students interested in global health, identify their own entry points in this wide field, and make them compassionate agents of change who are aware of the rationale for mutual caring. The book might also help investors think beyond the obvious. The book is also full of stories that take place in many countries and this might inspire people to travel more and more purposefully. A person could say, “I haven’t travelled to this particular place and I don’t know how a particular concept works so let me go there and see it myself”. They could visit, for example, a hugely successful company in Arusha, Tanzania, called “A to Z”. This company, which employs about 7000 people, mostly women, manufactures about 30 million insecticide impregnated bed nets. These bed nets have dramatically reduced the mortality rate of children from malaria. They might thus become better global citizens, in addition to being Omani citizens. We don’t realise how much innovation exists in the developing world. In wealthy countries we cannot survive on less than a dollar a day, because even a cup of coffee costs more. But
BIOTECHNOLOGY
there are about a billion people who survive on a dollar less than a day and about 2.7 billion who survive on less than 2 dollars. To do so that you really need to be innovative, creative and ingenious. In The Grandest Challenge we discuss the ways and mechanisms of harnessing and unleashing these ideas to bridge knowledge, health and power gaps. You have talked about taking labs to the villages and ‘flattening’ the world in its true sense. Can you give us a real life experience of success in this drive? Let me start with a story of a failure. A professor called Moses Musaazi from Uganda developed an ingenious incinerator for burning medical waste that doesn’t require any fuel other than the medical waste itself. He has got a prototype. But unfortunately
The book describes the real ethical, regulatory and political challenges facing researchers and companies as they develop ideas, do research and develop and commercialise their products. Yet it is a profoundly optimistic book, full of examples of how these challenges are and can be overcome. A great example of this is the story we tell of HE Yusuf bin Alawi bin Abdullah and Shantha Biotechnics. There are many others we talk about in the book. That kind of smart learning, collaboration and investing can happen in any direction. Look what’s happening in India, which is transforming itself from a ‘copycat’ nation in terms of innovation to a truly innovating nation. It initially started with ICT and now moved on to biotech and pharmaceuticals. So if it’s
“Talent, ingenuity and the ability to innovate do not know any borders. What is important is to identify them, and provide an environment for their productive expression.” he has got no way of taking his idea forward. There is no efficient system for him to protect his innovation. He has no mentors to help him with commercialisation. There is no venture funding. So his technology is stagnant. A success story is ‘A to Z’ that I spoke about earlier. A textile company in Tanzania that used to be a tiny factory producing t-shirts and hats. One day someone from the World Health Organisation (WHO) and a Tanzanian scientist called Hassan Mshinde visited them and another company and said they had some evidence that impregnating insecticide into bed nets would stop kids dying from malaria, and asked whether these companies are interested. The other company declined but ‘A to Z’ agreed and the rest is history.
24
February 2012
possible in India, it could be possible in Pakistan, Nigeria or Ghana. Most of the oil for US comes from Africa rather than the Middle East. Africa is a rising star. Countries there are beginning to invest seriously in science and technology and training of human resources. The opportunities of the future lie in Africa, Latin America, India and China. As the ex-Professor and Head of Dept of Surgery at Sultan Qaboos University, can you give us your outlook on Oman’s health system? Oman has actually got a relatively good health care system, although of course it can always get better. Oman is a long way away from investing in health to the same extent as, say, the UK or Canada in terms of percentage of GDP. Nevertheless, a few years
ago Oman was ranked by the World Health Organisation as No.1 in the world in terms of how much health value you get on a dollar spent on health. Since then there has been huge improvements in the healthcare system at the tertiary end, mainly in the Muscat region. We now have not only high powered care like kidney and bone-marrow transplants, but also open heart surgery. We performed the first kidney transplant nearly 20 years ago. Oman holds two world records for performing the youngest kidney transplant in history. Furthermore, private sector healthcare is also growing. However, talking to young Omani doctors recently I was told that away from Muscat the situation is not so rosy. So there is work to be done there to improve things. Investing in health is investing in wealth. Some economically developed countries spend in excess of $5000 per capita per annum on health, constituting more than 10 per cent of GDP (the US spends 17-18 per cent, but a lot of that is wasted). But poor countries in subSaharan Africa spend as little as 15 to 20 dollars per capita. What are the major discoveries in biotechnology? Genomics in the long term would make our approach to medical care more personalised and preventive. It has also allowed us to look at the genetic makeup of viruses, bacteria and parasites so we can intelligently develop drugs and vaccines against them. It has also enabled us to understand mosquitoes that carry those parasites like malaria and develop ways to stop them from transmitting those diseases. A major breakthrough is that until now we haven’t had a malaria vaccine but there is now going to be one in 2016 and others will follow. I believe that in 10 to 15 years, malaria will not be such a big killer of children. (The Grandest Challenge is available at W H Smith in Oman or can be downloaded to Kindle from www. amazon.com). It reached No.1 on the amazon.ca international non-fiction bestseller list and No.6 on the same category on amazon.com.)
ECONOMY
By Oliver Cornock
Too good to refuse Downstream industries hold untold potential, both to grow the Omani economy and to enlarge the scope of its downstream services
I
t is not often that the prime minister of any country starts choking back tears during a press conference. But on 9 August 1965, Lee Kuan Yew, Prime Minister of Singapore was doing just that. What was getting Lee so down? A concept that economics professors explain on the first day of class: scarcity. Singapore, an island slightly smaller than Bahrain, had just been expelled from its union with Malaysia. The newly declared Republic of Singapore, severed from the rest of Malaysia, had virtually zero natural resources, yet it needed to house, educate and employ its 1.9 million people, all while defending its fragile sovereignty in a changing region. One could hardly blame the leader for getting emotional. The scarcity that Singapore faced, however, turned out to be a blessing of sorts. In the absence of conventional natural resources, the country developed its human resources. Over the past 55 years, the city-state moulded an educated workforce that could handle increasingly complex downstream industries and eventually knowledge-based industries. Within one generation, the young republic became one of the richest countries in the world.
The author is Regional Editor, Oxford Business Group
26
February 2012
When speaking of the GCC, an area well-endowed with hydrocarbons, scarcity is not typically a buzzword. In
Oman, however, oil and gas reserves – though plentiful now – are set to deplete more quickly than those of its neighbours. The authorities have long acknowledged this and are looking for ways to diversify the Sultanate’s economy by investing in other sectors. Although these efforts have helped drive growth in a number of industries, many of them, like metallurgy and petrochemicals, indirectly rely on hydrocarbons for low-cost energy and feedstock: foundries need gas to fuel their operations and petrochemicals require oil for primary production.
Mature fields Lately, a combination of steadily growing consumer demand and an expanding industrial sector have put more pressure on the Sultanate’s maturing gas fields. This consumption in recent years has necessitated imports from Qatar via the Dolphin pipeline. In response, authorities have been investigating ways to decrease demand. Last November, Muscat mulled price increases on gas for industrial customers to better reflect international markets. For industries, however, higher energy prices could shrink profit margins and ultimately slow growth. One relatively untapped source of energy savings, recycling, might hold some solutions. A number of industries in the Sultanate could benefit from increasing use of recycled materials, which is often less energy-intensive than primary production. In the long
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ECONOMY
run, incorporating more recycled materials in supply lines could lead to cheaper, greener production that preserves increasingly valuable hydrocarbons. The aluminium industry demonstrates this potential. Primary production has risen steadily in the Sultanate and is set to continue doing so. Last May Sohar Aluminium announced a $3bn investment in a bid to double its output. Since the metal is extremely versatile, downstream industries have been developing in tandem with primary production to serve specific sectors like transport, retail and construction. Oman Aluminium Processing Industries (OAPIL) locally sources its feedstock to make rods and overhead conductors. The firm has plans to double its annual capacity in coming years, Vice-chairman and Managing Director Hussain Salman Al Lawati said at the Arabal conference last November. The company currently produces 48,000 tpa but would like to see that top 100,0000 tpa. These expansion plans will depend on availability of feedstock, he added. “It depends on how much aluminium Sohar Aluminium can supply. Our expansion will depend on commitments from Sohar and the government for natural gas.” Enter recycling. Oman’s aluminium producers rely on natural gas to fuel the primary production which is highly energy intensive. Creating aluminium from recycled products, on the other hand, requires 95 per cent less energy. Even better, aluminium can also undergo multiple lifecycles without quality loss. Although incorporating more recycled aluminium in production lines may require significant upfront investments, industry players see potential for incorporating more recycled materials in the Sultanate. “Recycling has huge benefits for future
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February 2012
generations by preserving energy and natural resources,” OAPIL CEO Frederic Rouyer said in a speech at the Arabal conference. “[T]here is clearly a case for looking to develop a sophisticated aluminium recycling industry here in Oman that could benefit all of the GCC smelters.” Indeed, with a few critical shifts, the industry could begin producing at lower costs, preserving energy and, as an added bonus, cutting waste and greenhouse gas emissions.
government in Oman Vision 2020, PET production has also grown in Oman. The Salalah-based company OCTAL, for example, produces PET plastic and resin. Founded in 2006, OCTAL has built itself into the region’s largest PET resin manufacturer and the world’ largest integrated PET sheet manufacturer. The company reported $500mn in sales in 2010, the majority of which were shipped overseas, making PET a significant portion Oman’s non-oil exports.
Plastic recyling
Still, the industry relies on petroleum feedstock for primary production. Since recycling uses post-consumer products as feedstock, using recycled PET does not require the petroleum that would be needed to create new plastic, leaving more oil saved for other purposes. Additionally, creating recycled PET uses 50-70 per cent less energy than primary production. Since virtually all of Oman’s electricity is generated by burning gas, that energy savings translates to gas savings as well.
Another downstream industry on the up in Oman, PET plastic production, could benefit from recycling as well. PET (polyethylene terephthalate) plastic is a synthetic material popular for beverage bottles, food containers and product packaging. Although some companies have started finding ways to create the plastic from plant materials, the majority of the plastic is produced from petroleum. Given the GCC’s rich oil reserves, the region has been quick to develop the industry as part of a wider push to increase petrochemicals output. “The Gulf region’s share of petrochemical and chemical total output is currently 16 per cent, and this will grow to 20 per cent by the year 2015,” Abdualwahab al Sadoun, secretary of the Gulf Petrochemicals & Chemicals Association (GPCA), said at the GPCA’s Supply Conference Chain in June 2011. As part of the diversification plans outlined by the
Aluminium production Sohar Aluminium announced a $3bn investment to double its output OAPIL currently produces 48,000 tpa The new target is over 100,0000 tpa Creating aluminium from recycled products requires 95% less energy
Of course, Oman’s current resource situation is a far cry from that of Singapore in 1965. By most metrics, its hydrocarbons are still plentiful. However, successful integration of post-consumer production lines could save those energy resources for overseas export, where they can fetch high prices. In the long term, using more recycled materials in industries like aluminium and PET could also allow downstream industries to further wean themselves off their oil and gas dependence. That way, Oman will still be able to capitalise on the industrial expertise and infrastructure it is developing now through conventional production, even if hydrocarbons do become scarcer. Moving forward, these sorts of industries hold untold potential, both to grow the Omani economy and to enlarge the scope of its downstream services.
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COVERSTORY
Fresh perspective to growth
HE Darwish Ismail Al Balushi, Minister Responsible for Financial Affairs
32
February 2012
In a bid to strike a balance between social and economic needs of the country, Budget 2012 represents by far the biggest fiscal spending unveiled by the government of Oman. Visvas Paul D Karra speaks to a cross section of industry leaders to get a fair idea of how the economy will unfold this year
I
n order to really understand the impact of Budget 2012, we need to go back to October 2011 and the 7th Term 84-member Majlis A’Shura. The members of this particular Shura took their office armed with unprecedented legislative powers previously unheard of. For instance, while their predecessors could only have a look at the annual draft State General Budget, the 7th Term Majlis A’Shura had the authority to not only glance but grant approval for the 2012 Budget. This allowed the Shura members to ensure that the government’s budgetary spendings were in line with the demands of the citizens. Therefore every baiza spent by the government in 2012 means that it has the implicit nod of the people. Commenting on this, Ashok Hariharan, partner and head of Tax for KPMG in Oman and the UAE, says, “It is important that people look at the budget as one of the important tools to communicate its plans for the progress of the country. What is equally important is the efforts made by the government to bring in reforms including legislative changes as demanded by today’s generation wanting progress to take place at a fast pace.” “During 2011, we have seen amongst others, His Majesty’s directives to allow Islamic Banking and the promulgation of the new oil and gas law which addresses issues around concession agreements, conservation of environment and also regulates the natural gas sector. Changes introduced in the Labour Law and legislative powers and authority given to the Council of Oman mean that the government is now more responsible to its citizens in all the actions it takes.”
Chart – 1 Revenue Breakup - FY2012 Budget
18.2%
FY2011 Budget
19.3%
12.6%
12.5%
68.1%
69.3%
Oil Revenues Gas Revenues
Oil Revenues Gas Revenues
Non Oil Revenues
Non Oil Revenues
Source: Ministry of National Economy, GBCM Research`
Chart – 2
Break up of Current Expenditure FY2012 Budget 1.4%
3.9%
Break up of Current Expenditure 1.7%
0.7%
4.7%
34.7%
40.1% 53.9%
1.6%
57.4%
Defence and Security Exps Oil Production Exps
Defence and Security Exps Oil Production Exps
Interest on Loans Civil Minstries Exps
Interest on Loans Civil Minstries Exps
Gas Production Exps
Gas Production Exps
COVERSTORY
Budget (SGB) for 2012, has been prepared within the framework of the objectives of the Eighth Five Year Plan and in harmony with the basic principles stipulated in the financial framework of the plan. “Stabilisation of the macro-economy and preserving the public finance balances and the gains achieved through the comprehensive development by balancing the requirements of the economic and social development and maintaining a growth rate of 7 per cent and inflation levels achieved in 2011 are the chief objectives of the 2012 Budget,” HE Al Balushi said.
Dr Abdullah Al Salmi, Acting Executive President of Capital Market Authority
Balancing act It is good to see that the government has carried out a comprehensive review of the state of finances expected not only for 2012 but also for the entire 8th Five Year Plan period. Taking benefit of the prevailing oil prices, the government revised upwards the planned development expenditure by 13 per cent mainly to fund additional projects. Further, in response to the social needs and financial decisions taken by the government during 2011, the government has allocated additional funds during the plan period for employment generation and improving living standards. HE Darwish bin Ismail Al Balushi, Minister Responsible for Financial Affairs, says, that the State General
Populist measures have been implemented while drafting the budget as can be seen from the minister’s statement that social dimension will be given special importance in a way that complies with the development process and the aspirations of the society through promoting spending on education, training, employment, health, housing, water and improving the living standards of nationals. The aim is to continue to implement the economic diversification strategy and support the nonoil productive sectors in a way that leads to the expansion of the production base of the economy and create employment opportunities for nationals.
Ashok Hariharan, Partner and Head of Tax for KPMG in Oman and the UAE spending on education is planned to go up by 25 per cent in 2012 budget over the original 2011 budget (see Chart 3). It is also interesting to note that the government is reactivating the training for employment programme which was in force a few years ago. Hopefully, the government would have learnt from the challenges of the previous programmes and would make sure that the training results in the direct uplift of the skills of Omani nationals.
Estimates The government’s concern for social security and welfare can be gauged by the fact that expenditure on this account is budgeted to go up by 74 per cent compared to the original 2011 budget. Further, the government’s
The general revenues of the state for 2012 was estimated to be RO8.8bn against RO7.3bn in the budget of the fiscal 2011, with an increase of RO1.5bn, i.e. 21 per cent. The oil and gas revenues constitute 82 per cent of
In keeping with the times www.progressoman.com 34
February 2012
Chart – 3
Oman's 2012 budget at a glance • Budget deficit reduced by 35 per cent • 7 per cent GDPgrowth budgeted
• Eighth Five Year Plan expenditure increased by 26 per cent 2012 RO (million)
(Revised Budget) 2011 Percentage to total
Percentage change in 2012
RO (million)
Percentage to total
Revenues Oil revenues Gas revenues
6,100
69
23
4,956
68
1,100
13
20
920
13
7,200
82
23
5,876
81
Taxes and fees
771
9
9
710
10
Income from Govt. Investments
761
8
31
581
8
68
1
(40)
113
1
Other current and capital revnues
1,600
18
14
1,404
19
Total Revenues
8,800
100
21
7,280
100
Defence and security
2,585
26
57
1,650
18
Oil and gas production
1,625
16
1
1,617
18
Development expenditure for civil ministries
1,400
14
17
1,200
13
Oil and gas revenues
Others
Expenditure
Current and capital expenditure for civil ministries 1,154
11
25
926
10
Health
Education
382
4
14
335
4
Social security and welfare
385
4
74
221
2
Housing
323
3
21
266
3
Public services
388
4
21
320
3
Others
868
9
27
682
8
3,500
35
27
2,750
30
—
—
—
1,000
11
Participation in domestic, regional and international institutions
590
6
(4)
615
7
Others
300
3
1
298
3
10,000
100
10
9,130
100
(35)
1,850
Additional expenditure in 2011 revised budget
Total expenditure
Deficit
1,200
Deficit financed by Borrowings
300
150
Reserves
200
700
—
1,000
Additional oil revenues to be earned Use of 2011 surplus
700
Deficit as a percentage of total revenue Daily average oil production Average price (US$) (Source: KPMG and Ministry of National Economy)
— 14
25
915,000
—
2
896,000
—
75
—
29
58
—
COVERSTORY
2500 housing units; and subsidies – RO1.2bn (see Chart 5 for breakup of investment expenditure).
Wael Al Lawati CEO, Omran
the total revenues, whereas the current and capital revenues constitute 18 per cent thereof (See Chart 3). The oil revenues were calculated on the basis of average price $75 per barrel and an average daily production of 915,000 barrels per day. The deficit is estimated to amount to RO1.2bn, i.e. 50 per cent of the GDP and will be covered from funding approved in the budget including the issuance of development bonds to the domestic market amounting to RO200mn. Important expenditure are in the social fields namely, for education – RO1.3bn, (i.e. 13 per cent of total); health – RO500mn (5 per cent); social security and welfare – RO130mn; development budget – RO120mn for constructing
Further, the amended approbations of the Eighth Five Year Development Plan (2011-2015) as at the end of November 2011 amounted to about RO13.7bn compared with the original approbations amounting to RO12.1bn i.e. 13 per cent increase. The total approbations allocated for the first and the second years of the plan (2011 and 2012) and the projects continuing from the Seventh Plan will amount to RO8.6bn, out of which RO1.6bn is the cost of the new projects scheduled to be executed in 2012. (See Chart 4). Says Hariharan, “The striking feature of Oman’s budget is the fact that there are hardly any borrowings to finance the expenditure. Whilst the 2012 budget allocates an amount of RO300mn to fund the deficit of RO1.2bn, actual results of previous years show that there is hardly any need to resort to borrowings given the surplus generated. This is in sharp contrast to the challenges faced globally and in particular by the Euro Zone.” Whilst a deficit of RO1.2bn is budgeted, in reality it may be far lower given that the budget is based on an oil price of $75 which is at least 25 per cent lower than the prevailing market price, Hariharan predicts.
Beneficiaries It is evident that the nationals and the residents of the country will benefit from the government’s continued focus
Chart – 4 New projects to be implemented in 2012 from 8th Five Year Plan Project Cost Al Battinah Express Road . . . . . . . RO1bn Five hospitals (Muscat, Al Suwaiq, Salalah, Khasab and Dhalkout). . . . . . . . . . . . . . RO238mn 29 schools . . . . . . . . . . . . . . . . . .RO60mn Improvements to sport complexes (Khasab, Sohar and Salalah) . . . . . . . . . . . . . . . . . . RO4mn Fishing ports (Barka, Al Musanna, Diba and Al Ashkharah). . . . . . . . . . . . . . . . RO14mn Commercial fishing port at Duqm. . . . . . . . . . . . . . . . . . . . .RO35mn Centralised markets . . . . . . . . . . RO13mn Industrial estates (Samail, Ibri and Duqm) . . . . . . . . . . . . . .RO100mn Sewerage networks and plants (Barka, Al Musanna and Ibri) in addition to completing sewerage projects in Muscat and Salalah . . . . . . . RO141mn Tourism projects (Omran) . . . .RO124mn Water networks (Muscat, Quriyat and Sur) . . . . . . . . . . . . . RO70mn Science, research and IT projects . . . . . . . . . . . . . . . . . . . RO27mn
on development and promotion of social security and welfare. The private sector will also no doubt benefit from the significant increase in the five-year planned development expenditure. However there are divergent views when it comes to speaking about the benefits of the budget.
Creating a world of opportunities www.progressoman.com 36
February 2012
Dr Abdullah Al Salmi, Acting Executive President of Capital Market Authority, says that although all the projects that have been announced are good for the economy the government has to evaluate them, and determine how much value addition is being created by them. “We are spending on projects to get something for our long term use. At the same time, the economy has to benefit from these expenditures on a short term basis as well in the form of returning some of these amounts into the local economy. Since we know that some projects cannot be executed by local companies, the foreign companies can be the general contractor underneath whom we must have small contractors. These big companies should transfer technology and knowhow so that in the future the jobs can be done by the local companies,” opines Dr Abdullah.
execute these projects. Employment will also be generated through the formation of new local companies. Thus, a part of the revenues will remain in the country.” Many industry leaders feel they need a proactive government with a clear thrust on development which takes timely and appropriate decisions to help private sector thrive and participate in national development. While the private sector can bring in new efficiencies and new technologies to make sure that Oman makes rapid progress, the government should support certain areas like the manufacturing sector which is expected to contribute 20 per cent to the GDP by 2020.
Mohammed Sajid Khan Country Manager – Oman ACCA
Hussain Salman Al Lawati, Vice Chairman and Managing Director, Oman Cables Industry, says there are His Majesty’s instructions and policies to support the local manufacturing industry. However, just allocating RO100mn in the 2012 Budget for development of new industrial zones cannot be called as support, he says.
Continuing further, he says, “This way we can start building capacities among the local companies which will not only grow but will be able to implement and
“All countries including the developed one, gives importance to their national industries while our neighboring countries gives direct extensive price preference and support for their national products,” says Hussain
Chart – 5 Break up of Investment Expenditure FY2011 Budget
Gas Production Exps
FY2012 Budget
23.5%
Oil Production Exps
28.4%
CapEX for Civil Ministries
23.4%
Oil Production Exps
24.0%
CapEX for Civil Ministries
0.8%
DevEX for Civil Ministries 10
20
30
40
0.9%
DevEX for Civil Ministries
47.4%
0
Gas Production Exps
50
Source: Ministry of National Economy, GBCM Research
51.7%
0
10
20
30
40
50
60
COVERSTORY
join. While presently manufacturing industry employs more than 15000 Omani employees and therefore it is important that the Government must provide the support to local industries to get business,” adds Hussain.
Focus on human resources
Hussain Salman Al Lawati Vice Chairman and Managing Director, Oman Cables Industry while adding, “In our opinion, they should implement the common GCC agreement which gives priority and preference to the local industry up to 5 per cent to the GCC and 10 per cent to the international companies. Instead of injecting loans into businesses, the government should inject money into the companies. This way, they can convert the capacity to productivity.” “With the amendments in the labour law, the costs have gone up. Unfortunately, the manufacturing sector has taken the maximum hit as compared to other sectors like trading, services etc. It is important that for the officials in the Government to recall that manufacturing industry employs extensively and can create more opportunities for the Omanis to
According to Shankar Kailasam, senior vice president – asset management, Gulf Baader Capital Markets, the government has given more push towards the human resource development in 2012 Budget by increasing the spending on education, training, healthcare, housing and water etc. “This would effectively improve citizens’ lives which we believe would bring in positivism towards achieving stable economic growth in the coming years. The total investment in development expenditure of civil ministries of RO1.4bn would drive the real investment in the economy by means of providing opportunities for private sector companies and achieve the objective of new jobs creation, which is commendable,” Kailasam adds. The government is also expected to spend RO1.3bn on the basic and general education for 518,000 students, as well as spend on 85,000 internal and external missions including the existing and the additional missions that were approved at the end of 2011. Kailasam says that this incremental investment towards the education and training would enhance knowledge base towards achieving excellence in wider fields of economic development. Mohammed Sajid Khan, country
Shankar Kailasam, Senior Vice President – Asset Management Gulf Baader Capital Markets manager – Oman, ACCA (the Association of Chartered Certified Accountants) feels it’s an excellent budget thanks to its sustained focus on human capital development and infrastructure. “We have always been appreciative of the emphasis laid in Oman on the development of the most important of all the resources – human capital -- which is vital for sustainable economic development and also to achieve the Vision 2020 targets.” Equally important is the development of new infrastructure and the improvement of existing facilities which play a significant role in meeting the needs of a fast developing nation and increasingly becoming more attractive to multi national companies and foreign investors due
Oman’s Progress read online www.progressoman.com 38
February 2012
COVERSTORY
ferent countries, like India, Thailand, and Europe. Job creation is appreciated, but by just creating jobs without imbibing the job culture, ethics and values, will not produce desired and sustainable results to the nation. We also need to increase the quality of education and teachers as well. This is where the actual development of human resources should take place. Merely constructing more hospitals and schools only is not good enough,” Hussain avers.
Training
Dr Amer Rawas, CEO, Omantel
to government’s concentration on the productive and industrial projects and the steadiness of the social and political situation, says Mohammed. However, the budget should go beyond the spending in the education and health sectors, opines Hussain while stating that the budget is more focused on the spending side rather than on investment. “I haven’t seen enough room in the budget to create high quality medical personnel and increase the efficiency levels in hospitals which at the moment is low. The diagnostic capabilities are poor except for few diseases. That is why Omanis go to dif-
“With allocation of RO1.3bn (13 per cent of total public expenditure) for the educational sector and re-introduction of 5,000 training opportunities linked with employment, it’s encouraging to see the strong emphasis on this area,” says Mohammed. As far as training is concerned, ACCA estimates that there is a need of almost 20,000 jobs in the accountancy profession alone as the private sector continues to expand. The increased focus on training aspect has come in for praise from Dr Amer Rawas, CEO of Omantel. “We are very delighted as Omanis, as a national company and as a business that such a level of detail was announced, so very significant transparency that allows us to analyse the content. More emphasis by the government on the training will mean that we will get people who already have the skills.” Omantel hopes that it can take
SME development
Direct & Indirect Subsidy
In RO Mn
Vehicles fuel, diesel fuel and cooking gas
640
Electricity tariff
230
Water tariff
145
Basic foodstuff commodities
22
Interests on the Housing and Development loans
27
Equipment used by farmers and fishermen
10
For the purchase of forages
12
Exemption from customs duties for some projects
50
Exemption from the income tax for some activities
35
Operations of the National Ferries Company
9
Travel tickets to Salalah and Khasab (Oman Air)
1
Total
40
1,181
February 2012
“Now we have a whole new strategy as a result of the training emphasis laid by the government which has been presented to the management pending few changes to develop and strengthen and fill the capacity of the Oman Telecommunications Institute to contribute to the government’s goals and benefit the society,” Dr Amer adds. Continuing further, he says, “We have had a success story on this. Our training centre and our engineers have worked towards moving people from smaller jobs to better jobs. For example, we have had people who were drivers and support staff and labourers whom we trained on splicing of fibre which is a technically complex job but these people are now connecting Oman. Now this is what we want to do. Move people to better jobs. In 2011, we were able to move about 60 people from the call centre into the shops which is seen as a job progression.”
Chart – 6
Source: Ministry announcement, GBCM Research
part in the government’s training programme as the company has its own training centre known as the Oman Telecommunications Institute which is ready to train in the field of telecommunications. It has worked in the past with the ministry of manpower to train Omanis for the telecom market and in most cases, they were all successfully employed after training, he informs.
Although much needed importance is being given to SMEs in Oman with recent Government initiatives like guaranteeing 50 per cent of the loans, there isn’t much clarity in the budget about what role the SMEs will play in this year’s planned development, points out Mohammed. Dr Abdullah also agrees that SME development is not spelt out clearly even though subsidies have been announced (see Chart 6). “If a big multinational company comes to the country and imports its employees, engineers, capital and technology and executes a project, how do we benefit? This is where the SMEs can play a role. Because if the government can take
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COVERSTORY
similar issues. They want to employ people and grow their businesses but they are struggling with the complexity of what is needed. And also with the different messages given out by some of the different ministries.” Continuing further Nick says, “it’s great that there are positive messages but really we need more meat. We need some concrete proposals. And I know there are a lot of people who are thinking on similar lines. The government accorded top priority to job creation aiming to employ 36,000 people in the public sector. How are we going to do it? That is kind of unresolved. What we do know is that some of these jobs are real and some of them will take people from the private sector and put them in the government. What it should actually be doing is putting equal number of people in the private sector as well; but I don’t see how that is going to happen.”
Nick Smith CEO, Eight Group of Companies
some measures to ensure that SMEs will get some sub-contracts from this large company, then in addition to the infrastructure development, the SMEs will also benefit from these projects.”
Non-oil sectors There is an increase in the allocation of budgets for the non-oil sector. The combined allocation for supporting tourism projects and building infrastructure is an indication of the Sultanate’s commitment to directly invest in the tourism and hospitality industry. With the nation’s drive to boost tourism by attracting 12 million visitors by 2020, it is crucial to have sufficient infrastructure to ensure that more hospitality venues are available to meet this anticipated growth.
Nick Smith, CEO Eight Group of Companies, has this to say, saying, “We are a medium sized company that are into premier landscape design, construction and maintenance. When I see the Budget, there are some words which gives support to SMEs but without spelling out how this segment will come up. We struggle to grow our business. There is a lot of bureaucracy, there is difficulty getting visas and we still have issues with getting finance from banks. And I know a lot of other people who are running SMEs facing
“The 8th Five Year Plan’s aims to
Chart – 7 Figures in RO 000s
FY2012 Budget
FY2011 Budget
YoY (per cent)
Education Sector
1,147,728
920,959
24.6%
Specified Allocation
555,000
442,960
25.3%
Health Sector
371,574
328,093
13.3%
Social Security and Welfare Sector
384,649
220,855
74.2%
Housing Sector
320,665
263,615
21.6%
Civil Ministry Expenses - Sector-wise Breakup
Others Total Civil Ministries Exps Source: Ministry of National Economy, GBCM Research
42
February 2012
695,384
553,518
25.6%
3,475,000
2,730,000
27.3%
increase and improve transportation links through road infrastructure (see Chart 4) particularly outside Muscat, rail road scheme, seaports (Salalah, Hasik, Al Shuaymiya and Masirah) and Airports (Muscat, Salalah, Sohar, Duqm, Adam and Ras Al Hadd) will increase tourism and boost the economy,” says Wael Al Lawati, CEO, Omran. According to Wael, the diversification strategy stemming from Vision 2020 witnessed first-hand industrial developments in Sohar, Duqm and Salalah free zones and ports which in itself resulted in better roads, value added services and gave a development boost to the cities. The infrastructure development and transportation links are the very pillars that will create a robust economy. Omran invests in projects that have a long term return on the economy and community and which have a ‘multiplier effect’. Omran’s OCEC Project is a good example, says Wael. The initial labour histogram analysis indicates approximately 2,000 Omani jobs will be generated on average during the construction period and there will be an increase in business to sectors such as airlines, hotels, restaurants, tour operators, retailers and taxi drivers injecting revenues into the national economy in abundance, which then trickles down.
Outlook The government is also taking steps to encourage private foreign and local investments including the development of small and medium enterprises through creating proper investment environment, providing facilities and incentives in creating new industrial estates across various regions aiming at diversifying growth. All these efforts taken towards diversification of economy, believes Kailasam, would in turn lead to healthy investment opportunities for the private sector to move forward. The government’s focus on the creation of more partnerships with the private sector towards the creation of robust production and investment projects is expected to bring in value addition to the economic growth momentum.
FORECAST
Continuing growth Abdulrazak Ali Issa, Chief Executive, BankMuscat and Ross Cormack, CEO, Nawras in their comments to OER predict a huge growth for the country this year
Abdulrazak Ali Issa Chief Executive BankMuscat The outlook for Oman’s economy in 2012 is positive as the government has announced a 12 per cent increase in spending, based on oil price pegged at $75 a barrel and a daily production of 920,000 barrels. Fiscal surplus is also anticipated in 2012 on the back of supportive oil prices. Indications are that infrastructure projects will continue to give a fillip to the economy in 2012 as part of the 8th Five-Year Plan strategy. The social sectors will also witness sustained focus with increased allocation for education, health and social security, leading to a balanced and healthy growth. The diversification
44
February 2012
of the economy is proving beneficial in tackling risks emanating from reliance on the oil and gas sector.
Creating jobs vital Boosting exports, encouraging investment and devising a strategy to expand productivity, as also controlling inflation, are critical to sustaining growth in 2012. Priority will also need to be given to creating jobs for Omanis, developing agriculture and other non-oil sectors, especially small and medium enterprises (SME), by encouraging the private sector to invest in such projects. Attracting foreign investment is also equally vital to record growth
mainly in infrastructure, industry and tourism sectors. In the banking sector, the proposed launching of Islamic banking operations on the directive of His Majesty Sultan Qaboos will contribute to the socio-economic development of Oman, heralding the new era of Islamic financial intelligence in the growing field of alternative banking and finance. The macro-economic perspective to the practice of Islamic banking and finance will lay an explicit emphasis on social responsibility, economic justice and developmental concerns as also investment opportunities.
Ross Cormack CEO Nawras
I think, 2012 is going to be a year of continuing growth particularly in our industry. We are at an inflection point in telecommunication where data, which means broadband communications, is just taking off. And so, we have already seen a huge growth in 2011 and I can see an accelerated growth in usage of broadband this year.
our customer base is using mobile broadband and data. So that is a huge growth opportunity. If you look at home broadband, if you look at the number of households which have broadband at home, it is probably only about 70,000 out of the 550,000 customers as per the TRA figures. Over the next few years it is a huge opportunity.
We put in huge investments over the last few years in infrastructure which is specifically for the broadband growth in 2012 and beyond. And I am confident that we will be able to grow our customer usage considerably this year. I always say that there are three areas of growth, broadband broadband, broadband, like the real estate adage of location, location, location. There is mobile broadband, home broadband and mobile broadband. To give you a sense of the opportunity, the penetration in the mobile broadband segment is just 25 per cent presently. By this, I mean only 25 per cent of
Again, the corporates have broadband but do they have diversity?
is not an easy thing to understand. We still trying to gauge how people use broadband. The fact is we are trying to provide as many access points as possible. As you know, we started with a mobile license, then we won the fixed licensed as well. Now there are different types of access we can provide – mobile, fibre to the business, wireless to the home and now we have got the new wifi service. We are always trying to make it simple for customers to move easily from one access technology to another.
Cusp of growth So I could say that the country is just on the cusp of growth of broadband. And I think, this year is very exciting from that point of view. There are a number of major projects all around which employs nationals and expatriates and there is going to be demand from them. We are working hard to satisfy their new requirements. This is not an easy sailing though. The inflection point which I was talking of
There are challenges of course. We rolled out a lot of technology but we need to communicate a lot more of what we are doing. We just completed 6000 kms of coverage. This will create a huge growth in reach towards customers. Upgrading our network capacity is also a challenge in the future as we will have to keep up with the customers access demands and also the speeds. 
PERSONALITY
A SMART PERFORMER
Khalid Tawfiq Abdul Rasoul, Director-in-charge of Sharq Sohar Steel Group, shares his views about success, doing business and the development of Oman in an interview with Muhammed Nafie 46
February 2012
D
oes one really need to work hard, or miserably hard, to get where one wants to be, either personally or professionally? Is working hard, juggling multiple projects in a frantic attempt to get them all done, the only way to success? Khalid Tawfeeq Jawad Abdu Rasoul, Director-in-charge of Sharq Sohar Steel Group, replies in negative. Khalid counts smart working rather than hardworking as the secret of his success. He believes that hard working only cannot make everything fall into place. His philosophy of success maintains that a smart worker with clear understanding of his or her strength and skills is more efficient than a hard worker with poor time management. The way Khalid carefully charted his route to the top of his profession within a short span of time has more to do with a disciplined and meticulous planning than hardworking. You can read out the same expression of optimism on his face as a young and dynamic Khalid talks about his ambition to grow his businesses and make his companies one of the leading groups in the Sultanate in the next ten years. That is why you cannot disbelieve him when he announces his plan to retire in ten years after meeting his objective.
A fruitful career Khalid started his career as a trade marketing executive with Enhance (Matrah Cold Stores ) after completing his graduation from the University of Missouri–St. Louis in the US in marketing and a master’s in business administration from the University of Hull. The five years in Enhance (Matrah Cold Stores) where he had looked after different divisions including British and American Tobacco and consumers’ and retail divisions were instrumental for Khalid to hone his skills before joining the family business, Sharq Sohar Steel Group, in 2007. Khalid started as a business development manager with Azaiba Furnitre Factory and Sohar Steel Rolling Mill and was promoted as assistant general manager after
one year. After the death of his father in 2008, Khalid became the directorin-charge of Sharq Sohar group of companies which owns Sharq Sohar Steel Rolling Mill, Soahr Steel, and Middle East Conversion Industries. Within a short span of four years Khalid played a pioneering role in the development of Sharq Sohar Steel Group and Aziaba Furniture Factory by introducing innovative changes such as advanced machinery, and expanding their production and export capabilities significantly. His role was also instrumental in making the company a well-known brand. The Omanisation has shot up from 35 per cent to 42 per cent. “We brought about a lot of changes and created new values for our companies. The advanced machinery we introduced helps us save both money and time. We took new land in Sohar and are all set to move Aziaba Furniture’s factory to Sohar by the end of 2013. The strategic location in Sohar would be greatly helpful for the company as it concentrate on exporting to India and Qatar,” avers Khalid. Khalid also informed that both Sharq Sohar Steel Rolling Mill and Sohar Steel are undergoing a revamp aimed at increasing the total production. Marking a quantum leap forward, the total production capacity of Sharq Sohar Steel Rolling Mill and Sohar Steel will go up from 250,000 tonnes per year to 800,000 tonnes per year. Explaining the company’s plans for the next five years, Khalid exuded confidence that the group is looking to go IPO in the next five years as a holding company. “My dream is to make our group one of the leading business groups in the Sultanate. Now we would like to concentrate more on our existing companies rather than expanding to new areas. However, we are looking to expand our exports to foreign countries. Right now almost 95 per cent of our products target the Omani market,” he avers.
Focus on people Khalid accords more importance to taking the employees to trust
and winning their confidence. “I believe that our people are our asset. Therefore I would like to work for the staff. My father always used to tell me to work for the workers and not for the company. He intended that working for the workers means working for the company. We have to focus on people. ” Khalid says he is very particular about selecting the best people to his team so that he can build a team of skilled and efficient people who are more responsible to their work. Sharing his vision for Oman’s development Khalid says the country has great potential to grow as one of the most investment friendly areas in the region. But he believes that it has a long way to go in terms of infrastructure development such as railways, roads and development of new tourism attractions. “Recently, we have seen that the opening of Opera House has turned out to be a big boost to the tourism industry, evident from the increase in hotel occupancy in the country after that,” says Khalid. He is all praise for His Majesty Sultan Qaboos bin Said’s recent decision to empower Shura Council which he says has to play a significant role in the development of the country and the welfare of its people. A passionate sightseer, Khalid has travelled extensively visiting a number of countries such as Australia, Malaysia, Singapore, Thailand, Netherlands, UK, Germany etc. and has a list of countries he wants to visit soon. Khalid has also an uncanny knack for trying and enjoying the various cuisines of whatever places he visits. He has lost his heart to the Chinese food and very often goes to the Chinese Mood Restaurant at Al Bustan Palace. A member of Entrepreneurs Organisation (EO) and Oman Chamber of Commerce Industry (OCCI)’s industrial & promotion committee, Khalid aspires to dedicate more time for social services in the future. His special interest for charity activities reflects in his company’s philanthropic gesture to spend around three per cent of its net profit every year for poor people in the interiors.
INSURANCE
International expertise Maroun Mourad, CEO – Middle East General Insurance, Zurich Insurance Company shares his views on Oman’s insurance market, its potential and challenges. An OER report
Can you tell us about Zurich Insurance and its operations in the GCC region? Worldwide Zurich is present in over 170 jurisdictions, and employs over 60,000 people. We entered Oman in January 2011, after Zurich acquired a Beirut based company that operated in Oman, Kuwait and four emirates in the UAE and Lebanon. It’s been a year of integration, fixing and positioning. The company is called Zurich Insurance Middle East and we are headquartered in Dubai with an office in the DIFC, which houses the regional management. Apart from this we have a separate reinsurance business which targets high value complex assets in oil and gas, infrastructure, engineering, financial institutions etc. We have an office in Bahrain and are working on entering Qatar and Saudi Arabia. The growth in these countries can come either through a Greenfield venture, organically or inorganically. Will Zurich focus on traditional lines of business or will you be targeting niche areas in Oman? As a business, Zurich operates in a few areas and we do not target customers across segments in our products. Our focus is on the corporate and mid market to high networth individuals. As we are starting out in Oman we cannot afford to be everything to everyone – so we will
48
February 2012
be offering engineering, property, casualty, financial lines and financial institutions, directors and officers liability insurance. We will also tap into the more traditional lines like personal, accident, motor and medical insurance. In the complex speciality lines the combination of our international expertise and local knowledge, backed up by one of the strongest balance sheets in the industry makes us a formidable player. We enjoy a AA minus from SNP, an A from Moody’s and AM Best. All this put together make us a top five global company in the insurance business. There is a feeling that Oman’s insurance market has more players than what the size of the market warrants. Given this scenario, the timing of Zurich’s entry into Oman is a bit surprising? We see Oman as one of the more dynamic and promising markets, while the market may probably have more players than what it needs, this is typical with emerging markets. A metric that is commonly used to measure success in the market is the penetration rate which calculated by multiplying premiums by GDP and this is around one per cent for the region but in Oman it is actually higher. So compared to other markets, insurance penetration in the Sultanate is actually higher. Other emerging
markets in Latin America, South Asia or South East Asia stand at under three per cent, so we think that the upside is there in Oman, but it should be driven by more awareness and even compulsory regulation. You talk about speciality lines of business and niches. Are you going to concentrate on infrastructure, tourism related projects etc? If you look at the investments taking place, you find that Oman was at the receiving end of significant funds from other Gulf countries. We see Qatar, Bahrain, UAE, Saudi Arabia investing in certain trends like infrastructure, oil and gas, healthcare, tourism and hospitality. So the major projects are in these areas and hence the demand for insurance is also going to come from these sectors. We would also like contribute to job creation in the economy, keeping this in mind we have increased the size of our team in Oman by over 40 per cent in 2011 and will continue to make investments this year. I was at the World Economic Forum recently and there were two things that were being repeated day in and day out – entrepreneurship and job creation. We need to raise awareness, encourage entrepreneurship so that the owner, industrialist etc can focus on their business while we offset the risks of the day-to-day business.
OER CEO GOLF
PAR EXCELLENCE OER CEO Golf 2012, the premium corporate networking platform presented by Nawras Business Solutions, dazzled the business community of Oman with a day of golf, high-powered gathering, sophisticated ambience and mind-blowing entertainment on the cool greens of Muscat Hills on January 12
O
ER CEO Golf 2012, the biggest event in the Sultanate’s corporate calendar, broke new ground in terms of participation, unique game format, thrilling activities and exciting prizes. Representing virtually the who’s who of Oman, the guest list comprising CEOs, managers, businessmen and their spouses numbering over 400 attended the event held at the Muscat Hills Golf and Country Club. The golfers were divided into teams of four and played the 18-hole Texas Scramble. One of the most noteworthy parts of this year’s OER CEO Golf was the enthusiastic participation of a number of women golfers. For the non-golfers, a special golfing clinic was arranged. A simple competition of chipping, pitching and putting was organised which not only enabled participants to understand the finer nuances of golf but also gave them a chance to win the biggest prize of
the day – a Rolex watch from Khimji’s Watches. The OER CEO Golf 2012 champions were Ravi Narayanan, Chandra Sekhar Das, Debabrata Mukerjee, and Pamela Mouries. And the Most Promising Golfer-to-be was Samir Hamamji who won himself a Rolex. Presented by Nawras Business Solutions for the fourth consecutive year, OER CEO Golf 2012 was powered by Infiniti while Rolex, from Khimji’s Watches, was the Official Time Keeper. The Times of Oman and Al Shabiba were Publicity Partners while Samsung was the Prize Partner. Other prize partners included Capital Stores, Left Bank, Patchi & Bateel, Muscat Hills, OUA, Travel Point, Silver Senses Salon and Mumtaz Mahal, City Seasons Hotel and Agility. And the Support Partners were Hi & Al Youm Al Sabe (Media Partners); AXA (Insurance); Oman Printers & Stationers (Printing) OUA (Beverage);
Qatar Airways and Travel City Travel Point (Travel); Merge FM and Al Wisal FM (Radio); Infoline (Call Centre); and Aggreko (Energy). The morning session began with a welcome address by Sandeep Sehgal, chief executive, United Media Services (UMS) followed by HE Mohammed bin Hamad al Rumhy, Minister of Oil and Gas; Samir Fancy, chairman Renaissance Services; Ross Cormack, CEO Nawras; Divyendu Kumar, managing director, Infiniti; and Madhu Jesrani, general manager, Khimji’s Watches unveiling the tournament’s score card. The ceremonial tee-off was also done by HE Rumhy, Fancy, Cormack, Kumar and Jesrani as the golfers eagerly awaited to get their clubs to the tee. Before they went on the greens, the golfers got a few expert tips from world famous trick shot specialist and South African PGA golfer, Michael Scholz. The Nawras kiosk hosted a compli-
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EVENT
OER CEO Golfers posing for a group picture before the tee-off mentary massage centre throughout the day for the golfers and non-golfers to unwind and de-stress themselves with a soothing and invigorating massage. The Infiniti Putting Challenge saw many guests winning a special gift designed by the chief designer of Infiniti cars Shiro Nakamura. A swanky display of Infiniti M, FX & QX models also attracted a number of curious and prospective buyers. For the golfers-to-
be, well known leadership consultant, John Mitchell, delivered an inspiring talk on ‘Driving Change from the fairway to the boardroom’ before the golfers-to-be took to the fairway for the chipping, pitching and putting competitions. By the time the golfers and nongolfers returned from play, Michael Scholz who earlier gave golfing tips
It was an action-packed day for the golfers-to-be
POWERED BY
February 2012
was ready with a mesmerising onehour show delighting the audience by interspersing quick wit with his golf tricks. The morning gave way to a scintillating evening of music, entertainment and of course the gala awards. Starting with a brilliant dance performance by LED Dancers that launched the Infiniti FX model, the excitement and anticipation of the awards was taken to a crescendo
by Daniela Maxova, renowned international illusionist who charmed the audience with her tricks against a background of hypnotic music and dance interludes. Ross Cormack, CEO, Nawras, gave an interesting presentation to showcase many Nawras firsts to the business sector and their latest pleasingly different product for the business
OFFICIAL TIMEKEEPER
community – Nawras Business Mousbak. This service gives business customers the ability to communicate with free calls between all employees while benefiting from a convenient recharging and credit distribution facility through a secured online system and controlling cost on their mobile spend. The grand surprise of the evening was
PRIZE PARTNER
the unveiling of the new OER logo to coincide with the 15th anniversary this year of Sultanate’s premier business publication, the Oman Economic Review. It was non-stop fun and networking from morning to evening as OER CEO Golf, presented by Nawras, provided the perfect setting for mixing business with pleasure.
PUBLICITY PARTNERS
February 2012
EVENT
PRIZE PARTNERS
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February 2012
MEDIA PARTNERS
CATEGORY SPONSORS INSURANCE
PRINTING
BEVERAGE
TRAVEL
RADIO
CALL CENTRE
ENERGY
February 2012
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EVENT
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February 2012
February 2012
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A fine display of team-spirit… A big “Thank You” to all those who helped make OER CEO Golf 2012 a success.
To the presenter,
for truly getting the corporate world closer.
To our associate partner,
for powering the inspired performance.
To the official timekeeper,
To our ‘publicity partners’,
for crowning the achievement.
for turning OER CEO Golf 2012 into a headline event.
To our ‘prize partners’,
for adding to the dazzle
and delight of the occasion. To our ‘media partners’,
To our partners for insurance –
&
radio –
printing –
&
for the sensational coverage.
beverage –
call centre –
travel –
and energy –
Al Wisal FM
for their invaluable support.
Above all, we extend our sincere gratitude to all the captains of industry who participated… See you on the greens at OER CEO Golf 2013.
CLOSEUP
By Dr Jasim Husain Ali
Performance of regional bourses Bahrain’s bourse suffered the worst decline in 2011 sinking 20 per cent while that of Qatar registered a positive growth of 1.1 per cent
T
he economic crisis in Eurozone countries has adversely affected the investment in GCC bourses. Of all bourses in Gulf Cooperation Council (GCC) countries, only that of Qatar registered a positive growth rate in 2011. To state the fact, the Qatari index grew by a mere 1.1 per cent although this figure seems outstanding compared to the performance of other regional markets, especially Bahrain. Bahrain’s bourse suffered the worst decline, sinking 20 per cent. It is easy to link the plunge to the unrest in the kingdom. Muscat’s Security Market, too, dropped by almost 16 per cent partly reflecting adverse consequences of unrest emerging at the start of 2011. The protests prompted the Omani authorities to augment spending from $21bn to nearly $24bn by end of fiscal year 2011. The extra appropriations were meant to address grievances by creating jobs for locals and increasing pensions for the retired. The benchmark of Kuwait’s bourse declined by nearly 16 per cent. It may be recalled that financial authorities in Kuwait took an extraordinary decision, namely suspending trading in stocks of 50 listed firms. The punishment came in response to the failure of the firms to release financial results within in due time. Abu Dhabi’s bourse fell by 12 per cent, while Dubai dropped by nearly 17 per cent.
The author is an eminent economist and Member of Parliament, Bahrain (jasim.husain@gmail.com
Saudi shares Saudi Arabia’s Tadawul All-Share
Index (Tasi) declined by 3 per cent. Still worse, total market capitalisation of listed firms decreased by just above 4 per cent to $339bn. Conversely, Tasi reported positive results, as evidenced by sharp growth of 45 per cent in the value of traded shares to $293bn. Continuing adverse performance elsewhere in regional capital markets of the broader Middle East, the volume of funds raised via issuance of initial public offers dropped by 69 per cent in 2011. A report by Ernst and Young put the amount raised through initial public offerings (IPOs) for the whole of 2011 at just $844mn. In recognition of its financial strength, the Saudi market accounted for $461mn, or 55 per cent of funds raised through IPOs in the region in 2011. These unwelcome developments occurred notwithstanding firm oil prices and their attendant effects on government spending in all GCC countries. For instance, the final expenditures for fiscal year 2011 in Saudi Arabia stood at $214bn, considerably higher than the budgeted figure of $155bn.
Europe’s troubles Certainly, market sentiments across the GCC largely reflected the dull performance of key European bourses, especially those of France, Germany and Britain. Other negative news emanating from the EU includes the debt debacle faced by numerous countries notably Greece as well as upheavals surrounding the value of the euro. Needless to say, the 27-member EU represents the largest trading bloc with regards to the GCC.
PERISCOPE
The bullish case for the US dollar The US dollar is expected to make a major move higher in 2012
The author is a renowned investment banker based in Dubai
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T
he world financial markets were at an inflection point on the eve of 2012. The Eurozone debt crisis threatens a credit crunch as banks are forced to shrink balance sheets even while fiscal austerity rages in Ireland, Britain and the Club Med. The latest EU fiscal discipline pact threatens a split as Britain and Hungary vetoed any treaty change. Meanwhile, ECB President Mario Draghi has initiated a rate cut cycle that does not augur well for the Euro in 2012. The slowdown in China is unmistakable as export orders decline, property prices plunge, GDP growth rates, PMI and retail/auto sales all decelerate. As Chinese growth falls, the Politburo shifted to a soft money bias with Premier Wen’s “need to fine tune policy” edict and the PBOC’s subsequent banking system reserve ration cuts. Industrial commodities are the natural victims of a Eurozone credit crunch and a China slowdown. This is the reason why product premiums on aluminium, lead, nickel and copper on the London Metal Exchange have plummeted since October. The US economic supertanker, expected to hit an iceberg, has meanwhile accelerated on payroll growth, with the US unemployment rate now down to 8.6 per cent. Economics is not the only macro sword of Damocles on the currency markets. Politics also unsettles Wall Street. The Arab spring has led to the overthrow of four
regimes in the Middle East. Violence in Syria continues to escalate. EU and US sanctions against Iran tighten and raise supply shock/geopolitical risk in the crude oil markets. As I read the macro tea leaves (or coffee beans, since we live in the Gulf!), it is clear to me that 2012 will be the year the US dollar makes a major move higher. Why? One, the Bernanke Fed has no reason to ease policy any more while the ECB has begun its rate cycle. Two, private sector deleveraging in Western Europe has only just begun. This is negative for global liquidity and asset volatility will creep higher. These trends are hugely dollar positive. Three, the European banking system faces systemic credit issues (e.g. Commerzbank, the Greek banking system , French bank derivatives exposure) while the US money centre banks have largely recovered from the Wall Street Armageddon of 2008. Four, international politics in the Middle East could well take an ugly turn in Israel, the Gulf or Syria. This will lead to a spike in the Chicago Volatility Index (VIX) and safe haven flows into the US dollar. The SNB has devalued the Swiss franc’s safe haven role with is Euro-Swiss franc FX peg. The Japanese yen is also a dubious safe haven because the Bank of Japan intervenes to protect Japan Inc exporters, the public sector debt is a shocking 200 per cent of GDP and
By Matein Khalid
the post-Fukushima current account surplus has shrink. Five, a credit crunch in international interbank markets has begun. Several European money centre banks have slashed country credit line in the GCC. This means a rise in bank funding costs and tighter, even sluggish loan growth. Three month dollar LIBOR rates have doubled since July. This is an augury of a higher dollar as many European banks, desperate for dollar funding, will be forced to buy greenbacks in the spot FX market. Six, the Euro will remain weak all year as the ECB abandons monetary policy and embraces QE. The Euro, after all, constitutes 57 per cent of the Dollar Index. Seven, as banks retreat from
cross-border trading, globalization of finance will decline. This will make financial markets illiquid and volatile. This means risk appetite will remain low and the VIX will remain higher. Carry trades will be punished, particularly in the emerging markets. Long Indian rupee trades financed by dollar borrowing were a disaster in 2011, after all. These market trends all suggest a higher dollar. Eight, by most valuation metrics, the US dollar is grossly undervalued. This was not the case in the 1970’s inflation malaise or in the late 1990’s Silicon Valley tech bubble. Yet the dollar is now the natural safe haven for macro stresses in global finance. Specific strategic shorts? I believe the Australian dollar will plummet in
2012 as the RBA slashes interest rates. Australian households are hugely leveraged at 160 per cent debt to income ratios at a time when property prices Down Under have begun to drop. Moreover, the fall in Chinese GDP demand is a disaster for Aussie mining capex and metals exports. The Aussie/yen trade is an accident waiting to happen as its catalysts are retail leveraged Japanese investors, the proverbial Watanabe-san. I believe the Aussie dollar will fall below its current 1.03 levels to 0.88 against the dollar in the first six months of 2012. Bottom fishing in emerging markets is also as dangerous as disco dancing on minefields if King Dollar makes its big move, as I am convinced it will in 2012. 
FACE2FACE
What has the impact of the Eurozone crisis been on the MENA region? The impact of the Eurozone crisis has been limited on the MENA region. We have had our own diďŹƒculties in 2011 like the political unrest during the first months of the year and this had a major bearing on the private sector’s confidence. Overall, the sentiment is getting more risk averse, so when the Eurozone crisis came about we were already coming off a muted base. When I compare the Eurozone crisis of 2008 and 2011, I am more confident this time around, because the region feels less vulnerable. There were a lot of bubbles in 2008, but now there are few excesses and that gives me a lot of confidence; governments understand the necessity of spending aggressively where they can in the changed environment and that is a healthy sign. Nonetheless, the slowdown in the West is having an impact as they are our trade partners; the demand for oil and non oil goods has weakened and I am particularly concerned about access to capital, because we depend upon international capital, whether it is from the international bond market, loan market or funding from European banks, and such funding is going to get more diďŹƒcult and costly in future.
A demographic imperative Simon Williams, HSBC MENA Chief Economist argues for systemic structural reforms in the Middle East to face the demographic and growth challenges of the future in a freewheeling chat with Mayank Singh
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You spoke about the higher cost of funding in the wake of the Eurozone crisis. Have interest rates started moving up? Not really. Policy rates are almost zero, though I do not think that anyone can borrow at zero interest rates. There is a degree of risk aversion running across the banking sector. In Oman the banking sector has performed reasonably well and there has been some growth in the volume of credit; the same is true for Saudi Arabia and Qatar. I am more anxious about places like the UAE, where there has always been a higher dependence on foreign funding in the banking sector. This comes on the back of a scenario where liquidity looks stretched and rates are under pressure and this may rise further in 2012. The global economic slowdown predicates the fact that the demand for oil may go down in these parts of
the world. Is that a real threat or will the enhanced demand from emerging countries offset that threat? When I look around I am a bit confused as to why the prices of every other commodity such as copper, food etc have fallen but oil prices have remained rock solid at $105-$110 per barrel. I can see these prices weakening in 2012. If oil prices have remained high despite Europe and the US being in trouble, it makes it abundantly clear that it’s Asia and the emerging markets that have kept energy prices high. What has been the economic fallout of the events that have taken place in the MENA region? The impact varies in different parts of the region. In Egypt and Libya the consequences have been severe and we are quite some way from a return to normal economic activity. In the GCC the impact has been less marked because the unrest has been contained, institutions have held up better, but even here the private sector has looked nervous. International investors that are not committed to the region have been deterred by the problems that they have seen elsewhere. My real worry is the impact of the unrest in deterring governments from economic reforms; there is much less appetite for economic change now than what I saw five or 10 years ago. The decision to increase public spending and salaries run contrary to the goal of increasing the national participation of the private sector, encouraging diversification and that troubles me. This is particularly disturbing because the experience of the last one year shows that the economic models being practiced in the region are simply not delivering the growth, employment opportunities or welfare to meet the demographic pressures that the region faces. The case for economic change is much more stronger than it has ever been. If you were to do a country wise analysis where do you they stand in terms of economic challenges? Are countries in the GCC region not in the same boat as the other in the MENA region? The wealth at their disposal makes it easier for countries in the GCC to keep
their economic models going on for longer, but even in the GCC smaller oil producers like Oman and Bahrain there are strains that are showing. There is strong unemployment despite a good run of three digit oil prices, which clearly shows that there is something that is clearly not working. What are the changes in economic policy that you would like to see in these countries? I have a long shopping list of changes to recommend. There needs to be capital market reforms across the region as there is an over dependence on banking credit. Our equity markets are limited and there is no credit market, there is no domestic debt market and we have a very limited dollar market. So when bank credit is difficult to get as now, then it is very difficult for
We say we want to encourage entrepreneurship but then we make it a criminal offence to go bankrupt the private sector to access funding. In many cases we have the laws that are needed but transparency is very limited; confidence in the legal and judicial system (not here in Oman) across the region is limited and there are concerns around implementation, adherence and transparency issues. In the labour market there is talk about developing the private sector as a source of employment, about nationalising the work forces; but then we increase public sector salaries dramatically, making it difficult for the private sector to attract people and creating a disincentive for nationals to acquire the skills that they need to work successfully in the private sector. We say we want to encourage entrepreneurialism but then we make it a criminal offence to go bankrupt. If you bounce a cheque and go to jail
then you may not go out and take the kind of risks as you may in the US or Europe, because the consequences are too severe. In fiscal reforms we are reliant on oil revenues, and we need to diversify from oil revenues to encourage more stable public finances and probably we need to introduce more accountable public spending. Our monetary policy is tied to the US. The US is broken, but we are letting Washington set interest rates and the list goes on, but none of these issues are new and policy makers are aware of this, but the experience of the past year makes it imperative to focus on these areas of structural reforms. You believe that the economic structures created in the 1970s are not capable of taking on the challenges of the 21st century. This is quite a admonition, what makes you so critical of these institutions and structures? The growth in the GCC in the last 10 years has averaged 4-4.5 per cent even though the price of our core commodity – oil has increased five-fold. The region has been the biggest beneficiary of the revaluation of commodities but our growth rates are running 2.5 per cent below emerging markets average. Why is this so? Why do we have substantial youth employment? Big commodity states which should have been beneficiaries of high oil prices and their failure to generate rapid economic growth clearly reflects a need for structural changes in economic structures of the past. Can you do some crystal gazing on 2012 and what it holds in store for the region and businesses? My growth rates for most of the region hover between 3.5-4.5 per cent. That is a good number, if one were sitting in the US or UK one would be delighted by these statistics, but this is below potential for the GCC as a whole including Oman. These economies are six to seven percentage growth stories and there is massive catch up growth potential that needs to be realised. My big worry is that the primary driver of growth continues to be public sector spending and the private sectors activity is far more muted.
HEALTH
Starcare Hospital is looking to set new benchmarks in the Sultanate’s private healthcare sector, aiming at reducing the dependence of Omanis and expats on hospitals abroad for high quality treatment. Muhammed Nafie reports
L
ow private sector penetration in tertiary health care constitutes one of the biggest challenges facing the healthcare sector in the Sultanate. There is no dearth of polyclinics or medical centers in the country; but as the population increases and ages, the public sector hospitals are under pressure to deal with an increasing number of more complex cases. Having to wait a long time to access good quality care and some specialty treatments in the Sultanate, an increasing number of people are forced to seek them in India, Thailand and Western countries. The solution to this pressing problem lies in setting up multispecialty hospitals equipped with internationally experienced and trusted doctors working in world-class facilities, and capable of offering all sorts of care under one umbrella. UK-based Starcare Health Systems which opened Starcare Hospital, a 50-bed premium facility located in Seeb, in 2011 has taken a giant stride towards this direction. Looking to set new bench marks in the private Healthcare sector, the hospital aims to reduce the dependence of Omanis and expats on hospitals abroad for high quality treatment. “If you are capable of providing quality service with impressive infrastructure, there is a huge potential in the private sector,” says K Jayan, general manager, Starcare Hospital. “Considering this, we
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now plan to set up a 200-bed hospital offering tertiary care in a number of specialties such as cardiac surgery, cancer surgery etc. The facility will be affordable to most Omanis and expats because we will have different schemes catering to people belonging to different financial segments. The discussions are on and the location of this RO20-25mn project will be finalised in the next few months.”
Sophisticated and world-class The current facility in Seeb reflects well the innovative ideas and ambitious plans Starcare holds in store for transforming the healthcare sector in the country in the future. Having embraced international accreditation standards from the design stage itself, Starcare has invested as many as RO3.5mn for the interior and medical equipment which includes the huge investment for the modern and high-tech modular operating theatre. Citing another record of delivery on promises of the team, Jayan says, “As far as we are aware, nowhere in the GCC was the project of a hospital of this size conceived and completed in just 363 days.” Being the first private hospital in Seeb, Starcare boasts of a dedicated 24-hour emergency department, 35 medical specialties, ICUs, day care units, maternity ward, 24-hour pharmacy, and 24-hour diagnostic services. Other facilities and services at Starcare Hospital include well
designed and well equipped trauma and emergency department, multi slice CT Scan, 4D ultrasound, TMT,ECHO and PACS, spacious VIP suites, labour and delivery suites with world best Hill ROM Infinity four multifunction beds. The hospital also has neonatal ICU with German and Dutch technology, three advanced operating rooms with HEPA filters and Laminar Flow systems, comprehensive central sterilisation unit conforming to HTM 2020 (UK) guidelines and advanced laboratory and blood bank. “Although we do have a few private hospitals now in Oman, the typical hospital level service which we call secondary or tertiary level is still in infancy. Some of the private hospitals are large polyclinics with very limited inpatient care facilities. This causes confusion among the public who might lose confidence in the private sector. Starcare is looking to lead a change in this mindset by providing quality secondary and tertiary surgical services,” says Dr Askar Kukkadi, senior consultant paediatrician and medical director. Designed, and operating from day one, according to the US based Joint Commission International (JCI) accreditation standards, the hospital is currently undergoing rigorous inspection from the accreditation body. “Right now we don’t have any public or private hospital in the Sultanate accredited by the JCI. The accreditation is all about improving the quality of
K Jayan, General Manager patient care in the hospital. It hinges on more than 1000 standards ranging from how you design the operation theatre to how do you prevent mistakes in blood tests. Even though it is a huge challenge to train a lot of people within a short span of time, it is satisfying to see the improvement in quality as we prepare ourselves for the accreditation survey. If successful, Starcare will be one of a few hospitals in the world getting JCI accreditation within the first year of opening,” says Jayan.
A competent team Starcare enjoys the services of several fulltime senior in-house consultants including western experienced surgeons, pediatricians, gastroenterologists and cardiologists. In addition, the hospital avails the services of a number of senior visiting consultants from various government hospitals in the country and international visiting consultants. The hospital now offers 35 different specialties handled by a combination of fulltime and visiting consultants. Joint replacement surgery, major reconstructive plastic surgery, Surgery on blood vessels, advanced ENT surgery and laparoscopic surgery are some of the tertiary specialties offered. “We will be shortly launching Bariatric surgery (for obesity), Sports medicine and spine surgery services,” says Dr Kukkadi. Referring to the overwhelming response the Starcare gets, Jayan says, “The response was beyond our expecta-
Dr Askar Kukkadi, Medical Director tion. Within six months of opening, we have started treating every day such a large number of patients that most of the hospitals could get only after two years. The location in Seeb which has a high population density also helped. But we seem to be getting patients from all over Muscat and even from Sohar, Salalah, Sur and Nizwa. Except for cardiac and cranial surgery the hospital has the facilities to handle most of the medical conditions. Gynecology department is already one of the most successful in the country. We are handling a number of deliveries, caesarean and laparoscopic gynecological surgeries. Our ENT and gastroenterology departments are very strong with senior consultants. We also did a number of knee replacement surgeries.”
Marianna Kotze, Chief Nursing Officer can give adequate time to listen to their concerns. Unfortunately many hospitals force doctors to treat 60 – 80 patients or even more a day, which is really sad,” avers Jayan.
Hospitality par excellence
Western or equivalent trained nurses with exceptional bedside manners and high level competence provide quality nursing care for the patients. “We will be committed to provide the best quality medical care and services to our patients through our focus on uncompromising patient safety culture and emphasis on human values”, says Marianna Kotze, chief nursing officer. “ Ours is a holistic approach to nursing combining high quality customer care and high safety for our patients. We have qualified and western experienced professionals of diverse nationalities who are picked up through a meticulous, three-tier recruiting process. We give them continuous in-house training which enables them to adapt to the quality level we aspire to maintain, and support our vision and mission. It is the nursing care that distinguishes between a good hospital and a great hospital.”
The Starcare also seeks to create a warm customer-friendly ambience to ensure that patients get personalised customer service from the moment they reach the hospital. “People coming here are happy because of the hygienic, warm and fresh ambience. Our doctors are encouraged not to consult more than 25 to 30 patients a day. Patients will feel more confident if doctors
Apart from its various upcoming projects in the Sultanate including clinics and a chain of pharmacies, Starcare Health Systems plans to enter the healthcare sector in Saudi Arabia, Qatar and the UAE in the near future. It also seeks to expand the operation to India where it is looking to set up various hospitals and pharmacies.
“Being accepted by the patients early is very satisfying for us. It is even sweeter now that we are profitable too. Financial viability is very important while trying to offer high quality service at affordable prices” says Dr Kukkadi.
LEGAL
A suitable alternative Andrew Kincaid, dispute resolution specialist, feels that resolving disputes by any method other than litigation or arbitration just makes good business sense Why Alternative Dispute Resolution? People’s working definitions will vary, but a fair working definition of alternative dispute resolution (ADR) is any method other than court or arbitration to resolve disputes. Alternative dispute resolution methods include negotiation (assisted or otherwise), mediation by a third neutral party, conciliation, on occasion linked with the ability of the third party to make a non-binding or binding determination of the issues in dispute. The avoiding of uncertainty, legal costs and delay is a major reason why ADR is preferred: Parties have said to me, time and again, that they only wish they had not incurred the costs (both legal costs and management time) delays, stress and the uncertainty of going to court or arbitration, having earlier declined the opportunity of resolving the dispute by agreement. It is easy, when a court hearing is a long way off, for a party to “block out” the case against it. It can become painfully apparent during the hearing, that the judge may not agree with the party’s version of the facts in dispute, or may misunderstand some technical aspects. Questions of law, at first appearing to be of a straightforward nature, can result in lengthy submissions and debate. By then, especially in jurisdictions (unlike Oman) where a good proportion of incurred legal costs are awarded to the “successful” party, the case has adopted a life of its own, from which point it is difficult to settle the dispute without substantial compromise. A
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principal advantage of ADR methods is that they allow the parties to keep control of the dispute in a necessarily private setting, and allow creative remedies to be adopted. A judge or arbitrator is bound to find for one party or the other and, generally, to order remedies known to the law, such as a judgment in debt, an award of damages for breach of a contract, or a declaration of a party’s rights or obligations. ADR allows the parties creatively to fashion their own resolution. In summary, the certainty of a commercial result achieved by ADR beats the uncertainty of the court system. The state of different industry sectors will also influence the extent to which ADR methods are adopted. The current stage of the “post GFC” construction sector in Oman, and the Middle East generally, is that governments are the major procurers of major infrastructure and building developments. International and local construction companies for instance, who undertake these projects, have a long-term interest in maintaining good working relationships with government procurers, so that they may not be ruled out of repeat work. Governments naturally also wish to maintain good commercial relationships with these companies. This means that both parties have an interest in avoiding litigation or arbitration which, by their combative nature, generally cause the collapse of commercial relationships. I will now
discuss the processes themselves. What is Mediation? Mediation is a process by which an independent person, usually trained in particular mediation skills, facilitates and encourages the parties coming to their own agreement on how a dispute is to be resolved. In order to encourage candour, nothing said or done in a mediation can be relied on in any subsequent legal or arbitral proceedings. Once the parties’ agreement is put in writing, it becomes a contract, usually in place of the contract upon which the dispute arose. If, as is usually the case, it provides for the payment of a sum of money by party A, then party B may sue party A in the event of non-payment by party A. In Oman, the Court will often records the contract in a judgment disposing of the proceeding. It is important to understand that the mediator is not usually empowered to impose a solution on the parties. Either party is free to walk away from the process at any time. In this event, a skilled mediator will prevail upon the party to see the process out, if he or she considers that the parties are still capable of resolving their dispute. Good mediators can be quite persuasive in this respect. Mediation of disputes is widespread in business circles in Muscat and, indeed, is deeply rooted in bedouin culture throughout Arabia. What is the process? Some would argue that a mediator is someone who simply has the trust
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LEGAL
of the parties, who can preside over negotiations in an avuncular fashion, dispensing advice on process and the merits of the parties’ respective cases. This is not what trained mediators do. At the first “open session” of the mediation hearing, the mediator should adopt the classic approach of providing each of the parties an opportunity to state its case, and to allow time for the mediator’s questions or those of the counterparty. This is generally followed by the mediator’s summarising on a white board the amount claimed by the claimant, any amount claimed by the respondent, and the issues in dispute. The white board is then used as the mediator’s and the parties’ working document. The parties’ then agree that all issues have been set out. The issues are then discussed sequentially. A prime feature of mediation is that the mediator then interviews each party separately, behind closed doors. This is why a properly conducted mediation requires at least two rooms, and preferably three! There are always matters which a party will be happier to disclose to the mediator in this setting rather than the open session. It is a strict rule that anything said to the mediator in this phase is confidential, unless the mediator obtains express instructions from the party to disclose it to the other side. This process recognises that the mediator, armed privately with information about each party’s’ real priorities and concerns, is better able to fashion a suggested resolution than if he or she is armed only with information disclosed during the first open session. The completion of the closed sessions will often lead to an offer being made by one party to the other. It can be a very difficult process for the mediator to persuade a party to make the first offer but, having done so, the mediator often becomes involved in “shuttle diplomacy”, conveying offers and counter offers between the respective rooms. What skills does a trained mediator bring to the table? Negotiation is obviously the first method by which protracted disputes
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are resolved. A trained mediator, however, also reminds each party of its “best alternative to a negotiated agreement” (known as the BATNA) (viz. the amount it is likely to recover if it ‘wins the case’, discounted by a percentage representing its prospects of success, and a further discount representing its irrecoverable legal costs and management time to get there) and worst alternative (known as the WATNA) (viz. the amount it will have to pay to the other side if it if it loses the case, the amount it will have paid to its own lawyers in irrecoverable legal costs, and costs paid to the successful side and wasted management time). These devices focus the minds of the disputants. Importantly, a trained mediator is a good listener and observer of human behaviour and body language. There is often an issue lying at the heart of a dispute which is not brought out in the parties’ public pronouncements. Such underlying issues may be very complex. However, mediators have often discovered that the words “I’m sorry”, offered by one party to the other, can have an instant ameliorating effect on the course of a dispute. Conciliation This is a more muscular form of mediation, where the mediator, being experienced in the type of issues in dispute, is given authority, in open session, to express his or her views on the merits of positions adopted by the parties. This is generally not done in classic mediation where, in private sessions only, a mediator will force a party to reflect on the merits of its position by asking carefully constructed questions.
often seen a non-binding “early neutral evaluation” of this sort to cause one party to soften its subsequent negotiating stance, leading to resolution. Another deadlock breaking mechanism involves the claimant providing privately to the mediator the lowest amount it will accept to settle the claim, and the respondent similarly providing to the mediator the highest amount it would be prepared to pay to settle the claim. The mediator will thereby obtain a ready snapshot as to whether there is scope for settlement, from which the mediator can communicate to each party a proposed solution. What if the parties are exhausted from mediation and simply require a fast, no frills, binding determination? For certain claims, and for those parties with an appetite for a robust, fast-track ‘winner takes all’ approach, a respected mediator, well informed about the technical and/or legal issues in dispute, can be asked to decide which of the parties’ announced positions say, on a money claim, is the more reasonable in all the circumstances. The parties commit themselves to accepting the determination. This is a known as “baseball mediation”. Alternatively, the parties do not announce their respective positions, but simply ask the expert to determine what would be reasonable, and the party whose position is the closer to the determination ‘wins the case’ (known as “night baseball mediation!). If mediation fails, what are the alternatives apart from Court? This question continues to be the subject of particular interest in Omani business circles.
ABOUT THE AUTHOR: Deadlock breaking The parties may, however, agree to the mediator having “evaluative” powers after a failed mediation. This can break deadlocks. It involves the mediator, being experienced in the issues in dispute, and having generally been provided with documents and statements relating to the case, subsequently expressing a non-binding view on the merits of the parties’ respective positions. I have
The author has for the last two years worked as a Senior Lawyer at Said Al Shahry and Partners (SASLO) where he practises in construction law, related insurance, commercial law and dispute resolution. He is accredited by the Victorian Bar as an Advanced Mediator, having conducted over 250 mediations involving difficult questions of fact and law. He is also a graded arbitrator, having conducted over 50 arbitrations.
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ENVIRONMENT
Revitalising heritage HSBC Oman’s Frankincense Research Project in collaboration with Environment Society of Oman seeks to determine the right frequency of tapping frankincense trees
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rankincense trees are not only important for the protection of the environment but are also an integral part of the Omani heritage. Preliminary findings indicate that the manner in which trees are tapped to harvest frankincense can lead to degeneration beyond repair. HSBC Oman’s Frankincense Research Project in association with Environment Society of Oman (ESO) aims to determine the right frequency of cutting to retrieve a good yield without harming the trees. The study will also pinpoint the potential impacts of climate change on the growth pattern of Frankincense trees. Concrete findings and recommendations to ensure the sustainability of frankincense farming, a primary source of Dhofar’s livelihood, will then be disseminated to farmers, relevant government authorities including the Ministry of Agriculture and Ministry of Environment and Climate Affairs and the local community for implementation. Educational
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programmes in school will also be introduced to spread long-term awareness amongst youth to ingrain a greener mindset.
Three goals The project aims to engender three major benefits, the first is to revitalise the generations-old business of frankincense farming and the second is to minimise urban sprawl in Dhofar and finally to engage and build capacities of the local farmers. Initiated in February 2010, the project is funded by HSBC and executed by the Environment Society of Oman (ESO), and it aims to successfully promote environmental awareness and to support unique local attributes to Oman. The ESO’s lead researcher of the project, Dr Mohsin Al Amri has been conducting quantitative fieldwork which includes collecting, recording and analysing data since the start of the project and will continue for the next four years. To date, 180 were sampled in four identified areas in the Governorate of Dhofar, which
were then classified according to the circumference of the trunk and tagged. A part-time technician was also trained directly by Dr Al Amri, to build local capacities and highlight the importance of safeguarding Frankincense farming among the community. Three weather stations were also installed to pinpoint the potential impacts of climate change. The frankincense produced by each tree is weighed and the data collected is stored in the project’s database. At the end of the project, a maximum yield can be estimated for each of the four sites. All the parameters collected over the first year of research represent the baseline data of the project. The data collected in the subsequent years will be benchmarked against this data to identify trends in terms of abundance, health and yield. At the end of the four-year research, the project will attempt to establish a correlation between the different characteristics of the frankincense trees and their yield.
AUTOTALK
LUXURIOUS POSITIONING
Hyundai’s Genesis Prada blends high quality automobile engineering with elegance and panache. Mayank Singh reports from Dubai
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Genesis Prada a distinguished vehicle, Francesco Longanesi Cattani Director of External Relations, Prada says: “We felt it important to make Genesis Prada owners not only see, but also feel the difference when inside the car. From the outside-in, the car looks in a class of its own, with special paint and badges. The interior also gets special treatment, with signature Prada Saffiano leather used to give it an air of luxury and sophistication.”
Tracing its roots Genesis Prada is based on the 2012 Genesis, which was launched in February 2011. The car, which won the prestigious 2009 North American Car of the Year award, is powered by Hyundai’s Tau V8 engine, which has been chosen as one of Ward’s 10 Best Engines for three consecutive years since 2009. The 2012 Genesis’s Tau 4.6 MPI engine produces 366ps at 6,500rpm, and 44.8kg/m of torque at 3,500rpm mated to an eight-speed automatic transmission that allows drivers to enjoy the car’s power and driving dynamics to their fullest extent.
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ow does one describe an association between the fastest growing international automobile brand and one of the world’s best luxury brands – a perfect fit, match made in heaven or luxury on wheels – well, it may be apt to use all of these epithets. Hyundai Motor Company, recently announced the launch of the limited edition Genesis Prada in the Middle East. The Genesis Prada, based on the 2012 Genesis sedan and featuring Hyundai’s award-winning Tau 4.6 MPI engine was unveiled to over 100 VIP guests, company executives and media colleagues at an exclusive event held at the Park Hyatt hotel in Dubai recently. Genesis Prada is characterised by a special design that combines Prada’s sophisticated innovation, attention to detail and uncompromised quality approach with Hyundai’s advanced technology and expertise in car manufacturing. The collaboration is the result of the Genesis Prada concept which was introduced at the Seoul Motor Show in 2009.
“The Middle East is a very strategically important market for Hyundai, having been here for over 28 years,” says Mike Lee, marketing manager, Hyundai Middle East Regional HQ. “The fact that this is only the second market globally to receive this limited edition vehicle underlines our commitment to the market. Joining forces with Prada, a world-renowned fashion house, lends a distinct air of luxury to the Genesis Prada and underscores the importance of this award winning vehicle for Hyundai.” The joint project of Genesis Prada is the result of both companies’ approach to create a highly unique version of the Genesis model, addressed to the most sophisticated clientele. In particular, the project reflects Hyundai’s new marketing direction – “New Thinking. New Possibilities.” – which aims to provide customers with new experiences and values beyond their expectations. This matches the brand image of Prada, which also balances tradition and innovation. Explaining the design cues that make the
Genesis Prada comes in three special colours – Black Nero, Blue Baltico and Brown Moro – that are applied with a threelayer coat technology with stereoscopic gold pearl. Dark chrome is applied to the radiator grille, emblem and door handles to reflect the unique palladium-coated buckles on Prada’s bags. The innovations introduced by Prada include also 19inch alloy wheels and an outer antenna with a wedge shape. For the interior, the dashboard and the upholstery have also been revised and artisan-crafted in “saffiano” leather – Prada’s signature top quality leather – to obtain a luxurious and sophisticated finish. Genesis Prada will be produced by customised personal orders, while the limited Genesis Prada badge and GP500 emblem will emphasise the scarcity of the car, limited to a production run of just 1,200 units globally. Hyundai, together with Prada, will carry out exclusive VIP marketing activities to provide customers with ultimate satisfaction and convenience. Initially offered in limited numbers in the Korean market, this is the first time that the Hyundai Genesis Prada is being exported to the Middle East, and will be followed by other Asian countries in the near future.
AUTO NEWS
CADILLAC'S 2013 ATS Cadillac introduced the 2013 ATS, an all-new compact luxury sports sedan intended to challenge the world’s best premium cars. Developed on an all-new, lightweight vehicle architecture, Cadillac’s entry into the world’s most significant luxury car segment goes on sale this summer in North America.
ROSA LANDS IN OMAN The new 2012 version of Rosa bus, one of the world’s most popular mid-size buses, was introduced to the Omani market by FUSO, recently. Its powerful engine, reliable performance and exceptional comfort have in recent years made the Rosa bus from FUSO one of the most popular and well liked buses of its kind. It is available in three body sizes – with the 30 and 34-seater versions especially popular in addition to the option to purchase
the smaller 26-seater edition. Commenting on the new 2012 model, Mark Tomlinson, general manger of Mitsubishi of FUSO in Oman says, “Already a market leader in some parts of the world, the Rosa’s popularity in Oman has grown steadily in recent years and we are confident that the arrival of the 2012 edition of the bus will only help to increase that popularity and demand among a very wide customer base here across the Sultanate.”
The rear-drive ATS brings Cadillac’s blend of technologically driven performance, elegance and design to a new audience of spirited drivers. Its sophisticated driving
experience is enhanced with Cadillac CUE, a comprehensive, in-vehicle user experience that merges intuitive design with industry-first controls and commands for information and media data. “Designed with quick, nimble and fun-to-drive dynamics, ATS expands Cadillac’s portfolio into a crucial global segment,” says Don Butler, vice president of marketing for Cadillac. “For a new group of luxury consumers, this is a car that will fit their lifestyle and challenge the segment’s status quo.”
GM’S ME SALES UP BY 13 PER CENT After posting the best sales month of the year in December, GM’s dealers in the Middle East reported total sales of 139,431 vehicles for 2011 - up 13 percent compared to 2010. The impressive sales performance was the result of robust sales throughout the region for the company’s line-up of passenger cars, crossovers, sport utility vehicles (SUVs) and pickups across the Chevrolet, GMC and Cadillac brands. In 2011, sales of GM’s passenger cars increased by 8 percent, crossovers recorded 23 percent sales growth, sales of SUVs were up 21 percent, while GM’s pickups registered a 14 percent sales
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gain. Newly launched vehicles contributed to GM’s sales growth. Combined sales of the Chevrolet Captiva, Camaro, Cruze and Traverse; the GMC Terrain; and the Cadillac SRX and CTS Coupe increased by 23 per cent in 2011. Sales of GM Middle East’s three brands all recorded strong growth in the region.
TAC’S NEW SHOWROOM IN IBRA, BANI BU ALI Towell Auto Centre (TAC) has recently opened its two brand new showrooms at Bani Bu Ali and Ibra. The new showroom at Bani Bu Ali was inaugurated by HE Hilal Ali Saud Al Habsi, the Wali of Bani Bu Ali in the presence of several other dignitaries, customers and senior officials from TAC. The showroom offers the same impeccable standards in sales, service and spares that TAC has come to be associated with for all the brands in its portfolio. The Ibra showroom has
been designed keeping in mind TAC’s concern for environmental sustainability. The showroom’s overall look has been designed to exude freshness and vibrancy, in keeping with the spirit of TAC’s youthful and exciting automobile brands. Annurag Chawla, head of marketing and communications, Towell Auto Centre says, “We are delighted to have officially opened the Ibra showroom within the same week of the opening of our brand new showroom at Bani Bu Ali.”
VOLKSWAGEN LAUNCHES AMAROK
INFINITI FX 2012 LAUNCHED IN OMAN The 2012 Infiniti FX was launched in Oman by Suhail Bahwan Automobiles (SBA) recently at the Infiniti IREDI Showroom in Qurum. The event was attended by SBA chairman, Ahmed Suhail Bahwan, Divyendu Kumar, managing director of SBA, Juergen Schimtz, general manager of Infiniti Middle East and Atul Dhagat CEO, Suhail Bahwan Automobiles. “SBA is totally committed to supporting the Infiniti brand in Oman. We are putting a lot of effort into our sales and
service network to make sure the customer is feeling special because I think a personalised service with the human experience will definitely offer a total ownership experience to our customers,” says Ahmed Suhail Bahwan, chairman of Suhail Bahwan Automobiles. The iconic FX design has been given an aggressive new front grille and fascia – featuring a heavy influence from the stunning Infiniti Essence Concept – as well as a new 20-inch wheel design and an updated instrument cluster.
AUDI LAUNCHES USED CAR UNIT Audi Oman has launched its new Approved Plus business unit that will enable customers in the Sultanate to purchase fully approved and checked pre-owned Audi cars. “I am confident that this new initiative from Audi Oman will prove as effective and popular in the Sultanate as it has in other areas of the Middle East. The new unit and the online locator service are working in tandem to delight our customers here in Oman,” says Audi Middle East regional sales manager Christian Soemmer at the launch event. The
specialist unit has been created to meet growing demand for quality pre-owned Audis and will operate from the premises of its existing showroom facility in Wattayah. “The pre-owned car industry is a growing business in Oman as customers are on the look-out for a good deal, but do not want to compromise on quality. Audi’s used car sales have increased by over 39 per cent in 2011 in the Middle East region,” says Abdel Karim Awwad, national marketing and sales manager at Audi Oman.
Volkswagen has launched the new Amarok pick-up in Oman which is forecast to revolutionise the segment while delivering an all-round talent for both working use and recreational purposes. The pickup’s active and passive safety systems and convenience features all match up to passenger car levels. Yet the Amarok is extremely rugged. Many of the technologies implemented in the Amarok are being used for the first time in the mid-size pickup
segment. They include Bi-Turbo charging of the top engine and an optional permanent 4MOTION all-wheel drive with Torsen differential, one of three driveline options of the new model. In terms of its space, truck bed width and height, cargo loading abilities and payload capacity, the new Amarok is “Best in Class”. In Oman, the Amarok will be available with a 118 kW petrol engine with rear-wheel drive (4x2).
ELANTRA NAMED NORTH AMERICAN CAR OF 2012 The 2012 Hyundai Elantra took top honors in the most exclusive award in North America when it was named 2012 North American Car of the Year recently. A jury of 50 independent North American automotive journalists evaluated each of the new cars introduced last year and chose the 2012 Hyundai Elantra as the winner. The
jurors considered more than 50 new vehicles, before selecting the top three cars and top three trucks. The award was announced at a news conference at the 2012 North American International Auto Show in Detroit, which marks Hyundai’s second win. The Hyundai Genesis was named North American Car of the Year in 2009.
MARKET WATCH
Where function meets fashion Saint Horore’s recently launched exclusive ‘Piano’ limited edition watch is a delicious mix of emotions and freshness. It personifies seduction through its blend of watchmaking know-how, play of materials, sizes and colours and the magic of diamonds.The totally-round case conjures up softness and femininity and underlines the exclusivity of this model with its two different versions - 33 mm and 37 mm. The case is extended for even greater comfort by movable horns that match the shape of the wrist perfectly. But the star attraction is without question the magnificent ‘Éclair’ executions. Loyal to its pioneering traditions, Saint Horore presents immensely precious bezels and dials, magnified by a unique “pavé of
Floral Candle Collection The ultimate in home luxury is Amouage’s Floral Candle Collection of First Rose, Indian Song and Spring Sonata. The floral fragrances hailing from Grasse, in France, create wonderfully aromatic interiors with harmonious scents to evoke a reminiscence of the elegance and sophistication of lost empires. The holder is made of the finest imported Italian glass tinted with an iridescent champagne hue and decorated with a distinctive gold seal.
A Valentine’s Day gift Mouawad launched Le Coeur, its new Boutique collection across its Gulf showrooms. Featuring a heart motif, each piece of the new jewellery pays homage to this cherished, universal and eternal symbol of love. Each Le Coeur design offers a different interpretation of the heart motif, ranging from subtle simplicity to the full-on glamour of gem-studded flames and sunbursts of passion. Crafted in white gold, yellow gold, and sterling silver, and featuring a variety of precious gems including diamonds, rubies and sapphires, Le Coeur is destined to capture the hearts of women everywhere. Le Coeur pieces are suitable for all occasions and with its whimsical heart motif, it’s a perfect choice for Valentine’s. Wonderfully versatile and available with subtle diamond outlines or as full pavé, Le Coeur collection carries the same classic charm as all Mouawad pieces.
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diamonds”-style work. These ‘Éclair’ versions are truly exclusive and give Opéra an originality never seen before. The Roman numerals hover between elegant and simple and their layout reveals a whole new type of classicism
GIZMOS
Fast and smooth Samsung’s recently unveiled new Galaxy Note combines the core benefits of multiple smart devices while maintaining smartphone like portability. Borne of Samsung’s deep consumer insight and innovation, the Galaxy Note is a do-in-one mobile device that combines the market’s largest HD Super Amoled display, supreme portability and advanced S Pen feature to enhance creativity and productivity needs. Equipped with a large 5.3” HD Super Amoled screen, the device provides the best in class viewing experience while allowing you to see and do more. Galaxy Note’s high-resolution display ensures that you can view your e-books, PowerPoint presentations, news apps and web-pages. Incorporating a super powerful 1.4 GHz dual-core processor, the device guarantees an incredibly fast and smooth user experience. To ensure that you enjoy your latest music videos and games seamlessly, the hot new gadget packs lightning fast HSPA+ network speed.
Sony’s first smartphone Xperia™ S, the first smartphone from Sony and the first from the new Xperia NXT series, was launched recently, ahead of the International CES 2012 show in Las Vegas. Sony also announced the name change of its mobile phone division to ‘Sony Mobile Communications’. Xperia™ S is set to deliver a stunning viewing experience with a high resolution screen, full Sony HD, powerful 1.5GHz dual-core processor for faster performance and a 12MP camera that takes pictures in just about 1.5 seconds from standby mode. Sony’s new smartphone
World’s smallest system cameras Panasonic’s new LUMIX G Micro System compact and light weight digital interchangeable lens system cameras use a collection of features that put enormous photographic power in a palm-sized camera. The high-grade metal body combined with the 4/3-type sensor delivers high D-SLR-like performance, however in much smaller and lighter cameras and lenses than with a conventional D-SLR system. The LUMIX G Series models are compact and comfortable to use, with features that are designed to let users truly enjoy exploring completely new realms of photography. These cameras come with enhanced features and functionality that make photography easy, more enjoyable and rewarding. Users can choose between the DMC-GF3, DMC-G3 and the DMC-GH2 all of which are capable of taking that perfect image or video.
enables easy connectivity with multiple screens for consumers looking to share and enjoy content on a screen that best suits their situation, whether TV, smartphone, laptop or tablet. Consumers can now watch their favourite content from the Sony Entertainment Network by connecting their Xperia™ S through HMDI to TV or share photos wirelessly with just one touch.
BILLBOARD
Omanoil launches 8th edition of ahlain promotion
Jebel Sifah hosts family cycling event Social Family Cycling Event, a first of its kind two-day sporting event, was hosted by Jebel Sifah recently, establishing its intent to become an integral part of Oman’s growing tourism industry, which has made adventure tourism an important facet of its development. Organised by Oman Bicycle Shop and Muscat 360, the event sought to provide a unique avenue for families and cycling enthusiasts to realise their sporting spirit in the most picturesque locale of the capital. Around 60 cyclists participated in the inaugural event in Jebel Sifah’s panoramic setting, which features the majestic Hajar Mountains and turquoise waters of the Arabian Sea. They had an up close and personal experience of its natural bounty as they cycled through the terrain with the weather playing the patron.
As many as 29 lucky ahlain convenience store customers stand the chance to win a host of coveted prizes in Oman Oil Marketing Company’s highly anticipated seasonal ‘Shop and Win with ahlain’ promotion. The Sultanate’s pioneering fuel and lubricants marketing company launched its renowned ahlain promotion to ring in the New Year 2012 by rewarding customers with iPhone 4S, iPad 2, ahlain shopping vouchers, basmaCard points and a grand prize of a Jeep Wrangler. The first draw on February 18 will announce the winners of the iPhone 4S, 3 iPad 2 winners, four winners of RO50 worth of basmaCards and four winners of ahlain shopping vouchers, also worth RO50. The promotion ends on April 14 with the second draw on the 21st that will see the same number of winners and prizes, including one winner of the grand prize, a Jeep Wrangler Sahara Auto.
Bank Sohar holds year-end Al Mumayaz draw
Starcare introduces Vascular surgery Starcare Hospital has become the first private hospital in Oman to introduce vascular surgery. Dr Mohammed Sobeh, a British vascular surgeon, will perform laser surgeries for varicose veins and will practice at Starcare Hospital on Thursdays and Fridays. Says Dr Askar Kukkadi, medical director, Starcare Hospital at a press conference, “Educated and trained in the UK, Dr Sobeh has MBChB (Bristol, UK), FRCS (Eng, Ed), FRCS (Ge) CCST (UK in general and vascular surgery). Dr Sobeh joining our team will enhance the vision of the hospital in providing quality healthcare of the highest standards.” With more than two decades of surgical experience, Dr Sobeh received his Specialist Training Authority in general surgery with sub-special interest in vascular surgery.
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Bank Sohar organised its year-end Al Mumayaz savings scheme bumper draw of RO600,000 at a gala event graced by HE Sheikh Ahmed bin Saleh Al Mawali, wali of Saham at Saham Park. The raffle draw also gave away attractive prizes- Oman Air complementary tickets. The jackpot prize of RO450,000 went to Fatma Al Ajmi, from Al Aamerat branch, while Hamed Said Al Nasseri, from Nizwa Branch was the winner of the exclusive prize of RO150,000. The winners were ecstatic and thanked Bank Sohar for helping them realise their dreams.
OIFC to accept Diners Club cards Diners Club credit card members can now pay their utility bills (electricity, water and telecom utilities) by using the Diners Club card at selected Oman Investment and Finance Company (OIFC) branches across the Sultanate. OIFC has joined hands with Diners Club to offer the facility for the cardholders to pay their utility bills by using their Diners Club card. This is in line with the initiatives of OIFC to offer more payment options to the customers..
Lulu Hypermarket opens in Khasab Lulu Hypermarket, Khasab’s prestigious new landmark, was formally inaugurated recently by HE Ahmed bin Abdullah bin Mohammed Al Shehi, Minister of Regional Municipalities and Water Resources, in the presence of HE Abdul Malik bin Abdullah Al Khalili, Minister of Tourism and other government officials and the senior management of Lulu Group. Located strategically in the Tourist Commercial Complex of the Wilayat of Khasab, which is a part of the Ministry of Tourism’s initiative in the region, the arrival of Lulu is expected to augment the ministry’s ventures in the region by not just serving the community’s everyday shopping needs but also furthering the immense tourism potential of Khasab in particular and the Musandam Governorate in general. The new destination will cater to residents as well as visitors and tourists, whose number are expected to rise significantly in the future.
Shell launches road safety campaign Under the patronage of HE Dr Ali Bin Taleb Al Hanai, undersecretary for planning, Ministry of Health, Shell Development Oman has partnered with Sheida International and Co and Oman Road Safety Association to launch ‘Together for Accident Free Oman’ a road safety initiative aimed to reduce the grim accident rates in Oman and to raise road safety awareness among the public. This campaign is a part of Shell’s ongoing efforts towards safer roads in Oman which has a disturbing average rate of three accidents and 30 injuries every day. The campaign was launched recently with an interactive road show which aims to reach out to communities across Oman to create a real change in the behaviours of road users and their perception of road safety.
Rustaq branch customer wins al Mazyona grand prize
Khimji’s dual automatic Karcher car wash centre opens Khimji Ramdas Industrial and Machinery Tools Division (IMT), the engineering solutions providing business under the flagship of the infrastructure group opened the first dual automatic Karcher carwash centre in the Middle East. The grand inauguration in Al Tharmad filling station, Suwaiq was witnessed by around 40 guests from Shell, Sarooj, Muscat Municipality, service stations and car dealers across the spectrum. Karcher, the leading German company in cleaning solutions, has a market share of 70 percent in high pressure cleaners. Its association with Khimji Ramdas as its authorised dealer has been for the past 15 years.
Rashid bin Hamed al Shukaili from Rustaq branch won the second RO400,000 jackpot prize of at al Mazyona savings scheme from BankMuscat for 2011. HE Mohammed Abdullah Al Busaidi, Wali of Seeb, presided over the mega event attended by senior bank officials and picked the lucky winner. Rashid bin Hamed al Shukaili, 52-yearold businessman, has been banking with BankMuscat for the past 20 years. He benefited from the ‘loyalty bonus’ and his chances got multiplied 20 times, thereby giving him a huge chance to win the RO400,000 prize.”
GUTech students visit Salalah Beach The students of German University of Technology (GUTech) in Oman recently visited Salalah to have a glimpse of modern town planning in the city. The two-day visit to the Dhofar region by the BSc in Sustainable Tourism and Regional Development (STRD) students of the University included a tour of the Salalah Beach resort, where they were explained about Muriya’s design, construction and vision for the Salalah Beach site, as well as the potential for future job opportunities post-university.
BROWSINGCORNER
Redesigning the universe Walter Isaacson’s authorised biography captures the highs and lows, strengths and foibles of Steve Jobs, presenting him as human as anyone else. An OER review
A
Steve Jobs by Walter Isaacson Publisher: Little Brown Pages: 630
The publication featured in Browsing Corner is provided by WHSmith Bookstore
s Walter Isaacson says in his incisive biography, Steve Jobs had the uncanny ability to compel others to do his bidding. As a child, he made his parents sell their house and buy another one that was beyond their means so he could qualify to enrol in a better school. As an adult, he drove his silver Mercedes at the speed of thought and parked it straddling spaces reserved for disabled drivers: the normal rules were for ordinary mortals. When first diagnosed with pancreatic cancer, he refused surgery and thought he could zap the malignancy by applying mental force, backed up – since this was ditzy, faddish California – by a regime of “organic herbs, juice fasts and frequent bowel cleansings”. At his best, Jobs mimicked the serene demeanour of a Buddhist priest, just as the white or silver gadgets he sold exemplified a style that Isaacson calls “techno-Zen”. He negotiated multimillion dollar deals while walking barefoot through the countryside and bought himself a mansion in which he had to sit cross-legged on the floor because he disapproved of possessions and had theoretical objections to furniture. But at his worst, as a colleague said, he resembled Rasputin. He screamed on subordinates, fired them abruptly, and his vindictive temper worked like a guided missile. During a dispute with Google, he declared that he intended “to go to thermonuclear war on this”.
SAVE
The counterculture effect Isaacson catches these contradictions with unerring skill and partly justifies them by placing Jobs at the awkward intersection between two generations with opposing creeds. Born in 1955, he belonged to the bratty clan of baby-boomers who rebelled against the suburban conformity of their parents. He dropped out of college and simultaneously dropped acid, visited Indian gurus and idolised Bob Dylan. But although he emerged from the counterculture, he became an emblem of corporate culture and even commissioned Issey Miyake to design a uniform for Apple employees. He may have disdained material encumbrances, but his business relied on inciting consumerist desires in others. The revolution he dreamed of in the days of flower power turned out to be electronic, not political. The former hippie sold his iPods and iPhones to hipsters who have no interest in changing the world but simply want to enjoy it as they groove to their pocket library of iTunes and loll on digital clouds cyber-chatting with friends they have never actually met. The biography is honest and therefore often harsh, but it confers on Jobs a kind of tragic desperation when, with the onset of cancer, he discovers that his infinitely looped and ingenious mind is housed in a fallible body. So cerebral that he disliked eating and preferred to starve himself, he was eventually eaten alive by his greedy tumour.
Cut out this coupon from OER and present it at the WHSmith’s bookstore in Jawarat Al Shatti to claim a 10 per cent discount on the book featured in the February 2012 issue, or 5 per cent discount on all other books.
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COMPANYPROFILE
Beyond business Revoking its name change, Sitco is all set to reinvent itself as the pioneer in office automation, large format printing and bureau services in Oman. Muhamed Nafie reports
T
hey say a rose would never sound that sweet with any other name. When a name evolves into a brand, it gets imprinted in the mind along with the entire legacy it represents. Therefore, it will be difficult for values and standards which have grown and became established along with a particular name to coexist with a new name. That is why Sitco, one of the pioneers in office automation, large format printing and bureau services in Oman, decided to revoke its name change to Graphic International Centre for a short stint and rechristen itself as Sitco. “The name Sitco evokes nostalgia as we have been enjoying unblemished reputation and goodwill in the market for three decades,” says V Jayaprakash, managing director, Sitco. “It is a brand we strongly embedded in the minds of the people in Oman as we were one of the pioneers in office automation and bureau services segment in the Sultanate. There was a strong demand from our customers to go back to Sitco. They used to call us Sitco even when we switched over to Graphic International Centre for a few years.” Sitco is now reinventing its market ethos more confidently as an independ-
ent organisation. It has a full-fledged branch in Salalah and is also operating from Sohar. Established in 1983 as an office automation company, Sitco has come of age as the leading distributor of multi-function printers (MFPs), copiers, scanners, laminators, binders, shredders, card printers, projectors, and AV solutions. It represents in Oman world’s leading equipment brands such as Rex Rotary (Photocopiers, printers and MFPs), Optoma (projectors), Fellowes (shredders, laminators and binding machines), Evolis (ID card printers), Neolt (Paper cutters) and Olympia (shredders). Sitco is the sole distributor of Domino, world’s leading coding and printing solutions provider. It is also the regional distributor of Sericol, the popular ink brand used in screen, narrow web and digital printing applications. As a distributor of world-known brands, Sitco supports a number of ministries, corporates and various crucial infrastructure and development projects in the country . “We supply a number of educational products to the Ministry of Education. We win big tenders from the ministry because of its confidence in our product line, the brand we support and the services we provide,” says Vinil Praksh, product manager, Sitco. “The last 30 years of our operation in the Sultanate bear
testimony to the quality of our products and the efficiency of our services. Our tag line ‘beyond businesses’ reflects how diligently and devotedly we support our customers. We are there ready to serve them on a 24/7 basis.” Jayaprakash succinctly sums up this, “Right products, right solution, at the right time.” Apart from various ministries and petroleum companies including PDO, Sitco supports almost all contractors of the new airport project, Omran’s exhibition Centre and other local contractors and visiting consultants. “What kept us abreast of the market is that the business managers of our principals visit us every quarter and they meet our major clients constantly. It helps us build confidence in them and make them feel that their requirements are adhered to,” says Haridasan Nair, operations manager. Jayaprakash says as a distributor of the latest educational products to the Ministry of Education, Sitco feels proud to be partners in the social development of the country. It is also part of a social mission to keep the youth and the students abreast of the latest technology and contribute to the development of Oman’s human resources and technological prowess.