Qt august 2015 by Oryx Group of Magazines

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inside this issue August 2015 / Vol. 41 / Issue 8

COVER STORY

40 WAITING FOR THE POP

In our cover story this issue, we talk to energy, environmental and financial experts in order to decipher the carbon bubble. Is it real? How serious is it? And does Qatar's gas economy make it immune to a certain degree?

16 EFFECT OF OIL PRICES ON BANKS

Even with oil prices remaining fluid, the growth of Qatari banks has remained unhindered due to increased public spending by the government, experts tell Qatar Today.

20 OPTIMISM RIDES HIGH

Global investors' confidence in Qatar remains the same even while oil prices remain shaky and this is due by far to its progressive banking sector, a robust and well-structured market, according to Rajat Sapra, the newly appointed Head of Corporate & Institutional Clients and Financial Markets at Standard Chartered Qatar.

26 FINANCIAL MARKET REFORM BRINGS IN MORE INVESTORS

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Foreign participation in the Qatar Stock Exchange (QSE) is set to rise on the back of technical reforms that have been implemented in the wake of the exchange's upgrade to emerging market status.

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inside this issue August 2015 / Vol. 41 / Issue 8

28 DEALING WITH TARGETED SANCTIONS

Law firm Carter-Ruck provides practical advice for businesses and individuals subject to asset freezes and travel bans.

32 THE ART OF SAVOIR-RELIER

In the new age of leadership, it is imperative that leaders be genuine, generous and generative. Helping them in this new, transparent and intuitive top-down leadership role is a new philosophy which aims at improving the quality of all relations, says its creator, Dr ValĂŠrie Gauthier, Associate Professor at HEC Paris.

36 THE THREAT OF A NUCLEAR IRAN

What does Iran's nuclear deal mean for the GCC countries who see Iran as a great threat to their regional autonomy and political stability. Dr Mamdouh G Salameh shares his take on the possible outcomes of the deal.

52 BEYOND ENGAGEMENT

Employee engagement is high on the agenda for HR directors across the Middle East and engagement surveys are the trend. But management has to take action based on the survey results and clearly communicate its plans.

54 BRAND QATAR: DOES IT NEED SAVING?

For those inside Qatar, it might seem the forces that be are underreacting to the battering the country has been receiving in the Western media. But are we too close to the scene to have a balanced perspective? Is Brand Qatar really in jeopardy? Qatar Today finds out.

58 THE AGE OF AUTOMOTIVE HACKING IS HERE

The latest development in the story of Wired, Chrysler, hackings and recalls are just the beginning of what could happen to the new-generation cars connected to the internet and hence are potentially hackable.

and regulars

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NEWS BITES

BANK NOTES

REALTY CHECK

O&G OVERVIEW

TECH TALK

AUTO NEWS

MARKET WATCH

DOHA DIARY

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from the desk In 2006, when Qatar Today started reporting on climate change and its effects, we were in the midst of a genuine shock wave that had gripped both us and our readers, complemented by various initiatives as a result of climate change awareness spurred by the media coverage worldwide. For example, a building code in Qatar to maintain energy used in construction so that buildings reduce greenhouse gas emissions, and many conferences and awards to educate about sustainability. Looking through the history of climate change, we find that scientists have been arguing about greenhouse gases and their effects since the late 19th century, when Swedish chemist Svante Arrhenius first proposed that industrial emissions might cause global warming. Even as climate change sceptics kept downplaying the effect of rising global temperatures, there have been some activity from scientists who have tried to prove the relation between carbon emissions and temperature rise. In this turmoil, a not-so-new study talks about the “carbon bubble": the result of an over-valuation of oil, coal and gas reserves held by fossil fuel companies. According to a published report, at least two-thirds of these reserves will have to remain underground if the world is to meet existing internationally agreed targets to avoid “dangerous” climate change. Now this brings to the fore many more naysayers and sceptics who rubbish this claim arguing that climate change proponents are ignoring reality: the International Energy Agency (IEA) has proved that the global energy demand will increase by 40% through to 2040. What is the real picture? In this August issue, Qatar Today tries to read between the lines of reports that support both the naysayers and the supporters of the carbon bubble, when almost the whole country and the people who run businesses here seem to have migrated to colder countries to escape Doha's hot summers.. We also look at Brand Qatar and whether the image of the country is really taking a beating with all the speculations around its World Cup bid. A new leadership paradigm, car hacking, Iran’s nuclear deal and the wave of distrust it brings to the GCC countries; the effect of engagement surveys in corporations and banking trends are some of the stories that are not to be missed in the August issue of Qatar Today. Happy Reading.

SINDHU NAIR Managing Editor

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PUBLISHER & EDITOR-IN-CHIEF YOUSUF JASSEM AL DARWISH CHIEF EXECUTIVE SANDEEP SEHGAL EXECUTIVE VICE PRESIDENT ALPANA ROY EDITORIAL MANAGING EDITOR SINDHU NAIR DEPUTY EDITOR IZDIHAR IBRAHIM SENIOR CORRESPONDENTS AYSWARYA MURTHY KARIM EMAN AARTHI MOHAN ART SENIOR ART DIRECTOR VENKAT REDDY DEPUTY ART DIRECTOR HANAN ABU SAIAM ASSISTANT ART DIRECTOR AYUSH INDRAJITH SENIOR GRAPHIC DESIGNER MAHESHWAR REDDY NIBAL N BOUKHOUZAM PHOTOGRAPHER ROBERT F ALTAMIRANO MARKETING AND SALES BUSINESS HEAD FREDRICK ALPHONSO MANAGER – MARKETING SAKALA A DEBRASS ASSISTANT MANAGERS – MARKETING HASSAN REKKAB MATHEWS CHERIAN DENZITA SEQUIERA SONY VELLATT A H M IRFAAN ASSISTANT EVENTS MANAGER JASMINE VICTOR SENIOR ACCOUNTANT PRATAP CHANDRAN DISTRIBUTION SR. DISTRIBUTION EXECUTIVE BIKRAM SHRESTHA DISTRIBUTION SUPPORT ARJUN TIMILSINA BHIMAL RAI BASANTA POKHREL PRADEEP BHUSAL

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letters

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PROUD OF QATAR UNIVERSITY It's exciting to hear about the new medical school in Qatar University. Coming on the heels of the announcement about Qatar's first home-grown post-doc, I can't be more proud of the direction the country's education system is taking. We will definitely need more doctors and it's heartening to think that more and more of them are now born, bred and educated in Qatar. MARIAM F THE LONG-EXPECTED CHANGE As an aspiring businessman, I have been waiting for a long time for some of the changes that are being made through the new Commercial Companies Law. I have known a lot of friends whose startup dreams were crushed due to bureaucracy and outdated regulations. I hope the new law isn't let down by its implementation and the benefits are visible quickly and tangibly. HAMEED A K

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affairs > local GATHERING FOR EID

Pictures Courtesy: Qatar News Agency

HH the Emir Sheikh Tamim bin Hamad Al Thani performing Eid Al Fitr prayers with citizens at Al Wajba praying area.

The New Port Project’s first visitor “CHATTANOOGA SHOOTER DID NOT ENTER QATAR”

The first commercial vessel docked at Hamad New Port Project in the presence of the Prime Minister and Minister of Interior HE Sheikh Abdullah bin Nasser bin Khalifa Al Thani, who attended a ceremony held for its arrival.

The Government Communications Office released a statement to refute news reports that the gunman who went on a rampage in Tennessee had visited Qatar. Mohammad Youssef Abdulazeez killed four Marines and wounded three others in attacks on military centres in Chattanooga, Tennessee, last month. He was shot dead by police the same morning. While US counterterrorism officials were piecing together a trip he made to the Middle East in 2014, Reuters reported that he had “also travelled to Qatar at least once, although the reasons for the stopover and its duration were unknown”. In response to this, the Government Communications Office issued a statement saying, “We are aware of reports linking the suspect of the recent tragedy in Tennessee to the State of Qatar. The individual known as Mohammod Youssuf Abdulazeez transited through Doha’s Hamad International Airport from Amman, Jordan to the United States in November 2014. At no time did Mr Abdulazeez enter the State of Qatar. Statements suggesting Mr Abdulazeez entered the State of Qatar are false.”

he trading vessel was bringing in the first shipment of container ship cranes for the port that, once installed and fitted at the first container terminal wharf, will be able to unload containers from the deck of the biggest cargo ships in the world. Hamad Port is also preparing for two other shipments of container cranes during the coming months, according to Qatar News Agency. The total number of containers will increase to eight by the end of 2015. Qatar Ports Management Co. will gradually

transfer the operations from the Doha Port to Hamad Port gradually. The port will be partially opened for operations of specific types of ships and cargo ships by the end of 2015, with full operations expected by late 2016. Also present at the ceremony were the Minister of Transport and Chairman of the Hamad New Port Project Steering Committee HE Jassim bin Saif Al Sulaiti who noted the on-time completion of this gigantic project and in accordance with the budget allocated to it.

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QTA records impressive numbers The Qatar Tourism Authority released data confirming that Qatar is on track to meet the milestone of three million visitors by the end of 2015 and reach the targeted seven million visitors by 2030.

QATAR AIRWAYS TO LOSE POSITION ON FC BARCELONA KIT? Leading up to the election of the new President of FC Barcelona, there were loud demands to scrap Qatar Airways’ sponsorship of the football club due to its alleged treatment of its female cabin crew.

n online petition demanding that the club not renew its deal with Qatar Airways next year went viral, collecting more than 50,000 signatures within a few hours. The issue was one of the debates leading up to the presidential elections last month and many candidates, including the leading favourite Joan Laporta who indicated that he would scrap the club’s Qatar Airways shirt-sponsorship deal if he were elected. He had previously criticised the five-year sponsorship

deal with Qatar Sports Investments (QSI), worth €165 million which ends in 2016. Ultimately, incumbent president Josep Maria Bartomeu was re-elected to his position. Prior to his election he said that the club was reconsidering the sponsorship agreement due to the “social and political” situation in Qatar. Barcelona had not previously carried corporate sponsorship on their shirts, and in 2006 the club agreed a deal with UNICEF that saw them pay the organisation to wear its branding.

The number of visitors increased over the past six months by 7%, to 1.5 million people. Arrivals from the GCC, Qatar’s largest source market, grew substantially in the first six months of 2015 by 16% compared to the same period last year. The growth was primarily dominated by an increase in visitor arrivals from Saudi Arabia, which grew by 25% in the first six months of 2015 compared to the same period in 2014. Overall occupancy rates have grown from previous highs in 2014, even with the addition of 1,400 new rooms since the start of 2015 with the opening of 11 new hotels. Arrivals from outside GCC increased too, notably from France (up 8%), China (up 7%) and the US (up 6%).

DEVELOPMENT PROGRAMME FOR QATARI YOUTH

Silatech's report on lack of opportunities for refugees in Jordan Doha-based Silatech and CARE International in Jordan have released an assessment outlining the opportunities available to youth in Azraq Refugee Camp to improve their livelihoods, as well as the types of skills they possess that could help them to do so. Based on more than 200 individual and household interviews, and focus group discussions with more than 100 participants in the camp, the assessment found that demand for work among Azraq Camp residents is very high, and recommended specific steps to address the demand. Azraq Camp currently hosts over 19,000 Syrian refugees, over half of whom are children below the age of 18, while around 45% are of working age (18-59 years).

The Ministry of Labour and Social Affairs, in cooperation with Diplomatic Training and Consulting, has launched a programme for training and qualifying Qatari youths to sharpen their skills and professional experience in order to cope with labour market requirements. The programme was launched in the presence of a number of officials from the Ministry of Labour and Social Affairs, as well as representatives of the private sector. The programme reportedly includes 14 training courses covering English language and specialized language skills and administrative courses and others that can be tailored to the nature of work the trainee is interested in.

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affairs > local

Qatar Development Fund signed a $2.75 million and $10 million agreement to provide relief assistance in Yemen and Libya, respectively.

QDF assists relief work in Yemen and Libya

he $2.7 million agreement with Qatar Charity will go towards helping Yemeni people in view of the difficult human conditions in Yemen which led a number of Yemeni families to flee. Spokespersons from both organistions expressed hope that this will help the affected families in Yemen to alleviate the difficult circumstances in which they

live. QDF also joined hands with Qatar Red Crescent to provide relief assistance to Libyan refugees affected by the crisis in Libya. QDF General Manager Khalifa Jassim Al Kuwari said that Qatar Red Crescent was selected to implement, on behalf of QDF, Qatar’s $10 million humanitarian donation inside Libya, adding that this donation is mainly targeting health and food sectors.

Qatar reacts positively to Iran deal

T A press statement issued by the Foreign Ministry on the day of the announcement described the agreement as a significant step, stressing Qatar’s keenness on protecting peace and stability and expressing hope that this agreement would boost them in the region.

he Foreign Minister HE Dr Khalid bin Mohamed Al Attiyah said that Qatar welcomes the agreement and stressed the importance of the deal to result in enhancing security and stability in the region and freeing it from weapons of mass destruction. The Minister has termed the nuclear agreement between Iran and the Western countries as positive not only for the world but also for the region as well. HE Dr Al Attiyah, talking to CNN’s Christiane Amanpour, indicated a Qatari position that was diametrically opposite to its neighbours and loud opponents of the deal, the UAE and Saudi Arabia. He noted that Qatar was pleased with the deal, having been one of the first countries to encourage a peaceful, dialogue-led resolution to

the Iran nuclear issue. He also emphasized that Qatar’s differences with Iran were not a bilateral one but a regional difference on the position of Syria, Iraq and Yemen. He stressed the rights of every country in the region to have peaceful, controlled nuclear programmes. While some regional countries feared that this deal would accelerate Iran’s military nuclear capabilities, HE Dr Al Attiyah says Qatar holds another view - “that this deal might relax Iran and give Iran the confidence that there is no conspiracy theory around it, leading to a better and positive approach toward our region. At the same time, we will not like to see that this gives Iran more means, mainly financial, to continue doing what it’s been doing in Iraq, Iran and Yemen.” He concluded by saying that Qatar remains positive.

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business > bank notes “Another new focus for Islamic finance would be new growth areas such as green technology financing, socially responsible financing and also the halal industry. Given the common values of sustainability and ethics, Islamic finance may also have a catalytic role in these sectors.” DR ZETI AKHTAR AZIZ Governor, Bank Negara (Central Bank) Malaysia

DOHA BANK JOINS QDB’S NEW PORTFOLIO

QNB AND ARAB BANK EYE GREECE’S FINANSBANK Qatar National Bank and Bahrain’s Arab Banking Corporation are keen on buying stakes in Finansbank – the Turkish unit of National Bank of Greece – and hence did not follow up on their early interest in acquiring HSBC’s Turkish business, according to a Reuters report.

he two GCC banks dropped out of the race for HSBC Bank in Turkey because they became interested in potentially acquiring at least part of Finansbank. “We continue to explore the market for the sale of a minority stake in Finansbank, a 34% stake,” said the Reuters report, qouting an NBG official.

PROFITS ANNOUNCED QATARI BANKS POST RESULTS FOR H1 2015 Bank

Net profit (billions)

Total assets Total deposits (billions) (billions)

Qatar National Bank

QR5.6

QR511

Doha Bank

QR801

QR82.7

QR51.7

Qatar Islamic Bank

QR895

QR116

QR85

Commercial Bank

QR1,052

QR119.1

QR64.1

Al Khaliji

QR302.4

QR56.3

QR29.7

Qatar International Islamic Bank

QR438

QR38.5

Masraf Al Rayan

QR998

QR81,317

QR339.1

QR22,308

Ahli Bank

Doha Bank has joined the new Al Dhameen portfolio risk programme of Qatar Development Bank (QDB) in promoting Small and Medium Enterprises.

ith a QR100 million portfolio, Al Dhameen aims at facilitating and speeding up the approvals to guaranty the value of the funding provided by the partner bank to SMEs lacking sufficient guarantees. Developing the programme content took nearly two years of close cooperation between QDB and partner banks to cater to all needs and increase transparency.

QIB AND DOHA BANK RAISE QR2 BILLION EACH Doha Bank raised QR2 billion ($549.3 million) through the issuance of capital-boosting bonds on June 30, the bank informed Qatar Stock Exchange. Doha Bank, which is Qatar’s fifth-largest lender by assets, disclosed its plans to issue capital-enhancing bonds with a perpetual tenor and an option for the bank to redeem them after six years, to boost the bank’s Tier 1 capital. Sharia-compliant lender Qatar Islamic Bank had raised QR2 billion through a Tier 1 perpetual sukuk issue last month.

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business > bank notes

Effect of oil prices on banks

What will be

the upshot? Even with oil prices remaining fluid, the growth of Qatari banks has remained unhindered due to increased public spending by the government, experts tell Qatar Today. By V L Srinivasan

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he falling oil prices over the last one year have resulted in deficit financing and Qatar was no exception. However, the economies of the six GCC countries maintained a steady growth thanks to large-scale public spending and also due to increased non-hydrocarbon activity during this period. Governments across the GCC region had surplus reserves totalling nearly $1 trillion (QR364 trillion), which were accrued due to huge export of hydrocarbons. These countries have either shelved or deferred execution of non-core schemes and diverted their resources for important infrastructure projects related to Qatar’s 2022 FIFA World Cup and World Expo 2020, to be held in Dubai, after oil prices started tumbling since June 2014. It is a known fact that Qatar alone would be spending more than QR546 billion ($150 billion) on various ongoing and new infrastructure projects till 2017. Public spending to continue The GCC Governments will continue spending as all have bountiful foreign exchange reserves but the focus is expected to be more on fiscal discipline compared with the scenario in the past. Each project will be considered carefully before implementation and prioritised according to the needs.

It was the banking sector that benefitted most from the tailwinds of the fast-growing economy in these countries. Retail banking revenues in the GCC grew at 7.9% in 2014, with Qatari banks at the forefront (12.5%) followed by the UAE, Bahrain, Kuwait and Saudi Arabia. With Return on Equity pegged at 16.5%, non-performing loans less than 1.7% and banks already complying with Basel III capital adequacy standards, with a capital adequacy ratio of 12.8% at the end of 2014, Qatari banks are expected to maintain their double-digit growth this year and also in 2016. “We expect asset growth averaging 11% over 2015 to 2017 as demand for project financing picks up and from lending to consumption, general trade and services continues to be strong on the back of the

What the IMF says The Executive Board of the International Monetary Fund (IMF) concluded the Article IV Consultation with Qatar on March 23 this year and discussed various issues with senior government officials.

The IMF says that the Qatari banks remained sound and the financial sector regulatory agenda was moving forward, although emerging risks and vulnerabilities need to be carefully monitored. “Despite broadly stable credit growth overall, potential emerging risks include the risk of falling liquidity due to the oil price drop, and rapidly growing credit to selected sectors and across the border,” the IMF notes. Although the banking system as a whole

“While Qatar’s economy continues to pursue its non-hydrocarbon diversification strategy which will support growth in the contracting sector, the growing population in the country will contribute to the increase in consumption and thereby growth in the retail sector. The SME sector is also expected to witness significant activity.” DR R SEETHARAMAN Group CEO Doha Bank

appeared cushioned from real estate sector volatility, developments at weaker banks should be closely monitored. “Policy makers should continue to closely monitor lending standards, concentration risks, and crossborder transactions of banks. If low oil prices reduce financial sector liquidity, they should take timely measures,” it says. The report also welcomes the continued progress in implementing Basel III and related regulations. However, further advances in enhancing the early warning system, including improving availability of the real estate market statistics and developing data on household, corporate, and government balance sheets, should be put in place, the report adds.

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business > bank notes KEY INDICATORS OF QATAR BANKING SYSTEM

Source: Banks' financial statements & Moody's ©Gulf News

2011

ALL FIGURES IN PERCENTAGE

2012

2013

2014

120 105 100

80 60 40 19.5

20 1.3

1.7

1.2

Loan Reserves / Problem Loans

18%

3500

16%

3000

14% 2500

12% 10%

2000

1500

1000

4% 500

2013F

2013E

2011

2012

2010

2009

2007

2008

2005

2006

2004

2003

2001

2002

2000

Source: IMF and Moody's estimates

17.4 2.9

QATAR'S FISCAL POSITION

Fiscal surplus as % of GDP Gas production (b/d thousand; oil equivalent)

18.5

1.6

Problem Loans / Gross Loans

17.8

Tier 1 Capital Ratio

rapidly growing population,” says Qatar National Bank, one of MENA’s largest lenders, in one of its regular reports. Supported by a spurt in lending activity, almost all banks have put up an impressive performance in earning profits, maintaining Basell III norms as prescribed by Qatar Central Bank, and increasing their assets and deposits besides keeping the non-performing assets at less than 1.7% in the first half of 2015. Robust growth In its recent report on Qatari banks, Moody’s Investors Service says that the system will remain stable till the end of 2016 as the government is expected to maintain high levels of public spending and continue to drive economic growth. “Despite current low oil prices, we expect that Qatar’s real GDP will expand by 7% in 2015, as a combination of sizable government resources and a relatively low fiscal break-even level allows elevated public spending and hence continued economic expansion,” says Nitish Bhojnagarwala, Moody’s Assistant Vice President, who authored the report. Qatari banks will maintain robust financial metrics over the next 12-18 months including strong earnings and capital buffers, as well as low levels of non-performing loans. Credit growth is expected to be lower than 2014 but the banks may get more lending opportunities to support infrastructure projects, he says.

2.6

2.7

Net Interest Margins

About 38% of local banking deposits were provided by government and public sector entities in 2014, and this may come down due to reduced revenue generation from the fall in LNG sales.

However, challenges persist as these strengths are moderated by deposit pressures owing to lower governmentrelated balances stemming from low oil prices, the banks’ increasing dependence on market funding, and loan book concentrations reflecting the undiversified economy, Bhojnagarwala adds. In fact, about 38% of local banking deposits were provided by government and public sector entities in 2014, and this may come down due to reduced revenue generation from the fall in LNG sales.

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“Despite current low oil prices, we expect that Qatar’s real GDP will expand by 7% in 2015, as a combination of sizable government resources and a relatively low fiscal break-even level allows elevated public spending and hence continued economic expansion.” NITISH BHOJNAGARWALA Assistant Vice President Moody’s Investors Service

to the increase in consumption and thereby growth in the retail sector. The SME sector is also expected to witness significant activity. However, it should also be noted that any steep and persistent fall in oil prices can impact growth in the above sectors as well and thereby curtail lending in such sectors, Dr Seetharaman says. On the International Monetary Fund’s Article IV Assessment, which said that low oil prices are likely to affect LNG exports resulting in a deficit budget in 2016, Dr Seetharaman, while referring to the Ministry of Development Planning and Statistics report “Qatar Economic Outlook 2015-17,” says that the fiscal outlook is subject to considerable uncertainty both because of the transition to a calendar year budgeting cycle and of the complex impacts of lower hydrocarbon income on fiscal revenue. Hence the fiscal surplus is expected to narrow considerably in 2015 to 1.4% of nominal GDP, down from 12.3% in 2014. This reduction reflects a relatively quick pass-through of lower oil prices on budget revenues, he says. “In calendar 2016, it is foreseen that the overall fiscal balance will register a fiscal deficit of about 4.9% of GDP. With a fiscal deficits now in prospect, attention turns to their financing. Qatar’s strong net asset position and good credit standing will enable deficits to be comfortably financed over the projection period,” he adds

FISCAL BREAK-EVEN OIL PRICE IN GCC 140 120 Fiscal break-even oil price (in USD), 2014

Mounting Pressure Aware of the developing scenario, the government has been tapping new customers in Asia to ensure adequate revenues for the ongoing infrastructure projects and Pakistan was among the first countries which entered into agreements with Qatar to import LNG for longer periods in the second half of 2014. Doha Bank Group CEO Dr R Seetharaman shares a similar view, saying that the local banks will face deposit pressures as lower oil prices reduce the flow of funds from the government and government-related entities which are the largest depositors in the system. Qatari banks’ customer deposits grew at 4.9% in the first five months of 2015 but it was growing at 6.8% during the corresponding period in 2014. “Though oil prices may have recovered a bit since the end of the first quarter of 2015, pressure still remains on them. Hence liquidity will pose a challenge for Qatari banks in mopping up deposits and thereby cause a surge in borrowing costs,” he points out. However, he says that the retail and contracting sectors will be the key contributors to Qatari banks’ loan growth in the coming years. While Qatar’s economy continues to pursue its non-hydrocarbon diversification strategy, which will support growth in the contracting sector, the growing population in the country will contribute

100 80 60 40 20 0 -40 -20

20 40 60

Change in fiscal break-even oil price (in USD), 2009-14 UAE

Kuwait

Qatar

Saudi Arabia

Oman

Bahrain

Source: IMF

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investment > bank notes

Optimism rides high

Global investors’ confidence in Qatar remains steady due by far to its progressive banking sector and a wellstructured market, according to Rajat Sapra, the newly appointed Head of Corporate & Institutional Clients and Financial Markets with Standard Chartered Qatar. By V L SRINIVASAN

hen the GCC debt capital markets nosedived in the second half of 2014 Qatar maintained its supremacy largely due to the reforms introduced earlier by the government, even though there was only one IPO issued during the entire year. On the whole, the performance of GCC markets in 2014 was below expectations compared with the scenario at the beginning of the year and their combined markets capitalisation stood at QR364 trillion ($1 trillion), having added QR324 billion ($89 billion) during the year. However, things started looking up in H1 2015 with oil prices stabilising around $59 per barrel, which is the break-even price for most of the GCC

countries to ensure they do not begin their next year with deficit budgets. The opening up of Saudi Arabia’s market also helped in retaining investors’ confidence in these markets, though investments started trickling in on a modest scale. Rajat Sapra, who assumed his new position a month ago, says that Qatar has always been a very interesting market with a progressive banking sector in the region. Qatar Central Bank (QCB) has always been active in implementing new measures for banks to be in line with global developments. There is a “general sophistication of local banks” and banks are moving beyond traditional products and offering solutions in both retail and wholesale. Another important development

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“There will be an adverse impact on those countries that have high levels of foreign currency denominated debt. Added to this, there are other factors such as oil prices, eurozone recovery, the Greece situation, geopolitical situation in the Middle East and China’s slowdown which are all expected to contribute towards market volatility as well.”

that put QCB in the spotlight earlier this year was when it became the only Chinese Currency (RMB) Clearance and Settlement Centre in the region. “This allows Qatar to facilitate transactions in RMB for counter parties in the country and the wider region. This is similar to that offered by other major financial centres like Hong Kong, Singapore and London. We have been involved in this initiative from QCB and Qatar Financial Centre Regulatory Authority (QFCRA) and look forward to working further with our clients and other stakeholders in this area,” he says. GCC debt capital markets The GCC debt capital markets have evolved tremendously over the last few years with a broad range of sovereigns, corporates and banks that access the markets to raise funds across the capital structure – from senior secured to convertible to hybrid capital, from high investment grade to high yield, and in currencies ranging from US dollar to Renminbin. “Market volumes since 2012 to date have been over QR479 billion ($130 billion) including issuances totalling QR84.77 billion ($23 billion), with financial institutions dominating the issuance space with over 50% this year,” says Sapra who feels that although activity has been quiet in the past month due to the holy month of Ramadan and increased global market volatility, he expects it to resume with issuers taking advantage of continued high liquidity and low interest rates. Volatility continues On the possibility of the US Fed hiking interest rates this September, he opines that markets have already been witnessing high levels of volatility which is expected to continue. “Such an

eventuality after years of close-to-zero interest rates and three rounds of quantitative easing will be a significant development,” he says. However, Sapra does not expect an extremely sharp and sudden move since this has been factored in to a large extent. “It’s also important to monitor growth data from the US to assess how many rate hikes can come in and over what period of time,” he says. Nevertheless, if the US Fed does begin to hike, volatility will definitely increase in fixed income markets. For instance, volatility in emerging market currencies is likely to increase since these are often the shock absorbers there. “There will be an adverse impact on those countries that have high levels of foreign currency denominated debt. Added to this, there are other factors such as oil prices, eurozone recovery, the Greece situation, geopolitical situation in the Middle East and China’s slowdown, all of which are expected to contribute towards market volatility as well,” says Sapra. Risk management plans Sapra says that his advice to the investors includes both investment and risk management products, “a balanced mix of conservative solutions along with some opportunistic-driven products for both,” he elaborates. However he would first gain an understanding of the clients’ risk management objectives and their risk appetite and make sure they fully understand the market dynamics and products. “Based on this, Standard Chartered Qatar would work to identify an appropriate investment and risk management plan as the case may be. We work in all asset classes and when approached by clients, we provide a balanced investment that helps them benefit from higher returns but which also has less volatility than some of the direct investment avenues,” he says QATAR TODAY > AUGUST 2015 > 21

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business > realty check QATARI PLANS TO BUY $250 MILLION PENTHOUSE IN NY

A Qatari buyer is looking to combine multiple apartments at the ultra-luxurious 220 Central Park South into a single, QR910 million ($250 million) penthouse in the sky, according to a media report. If the deal is finalised, the buyer will own the priciest residence in New York City, and one of the world’s most expensive homes. A representative for Corcoran Sunshine, which is marketing the project’s 118 condominiums on behalf of developer Vornado Realty Trust, declined to comment. The buyer, developer and architect are reportedly hammering out details of the combination, the report said.

ARTIC BUYS ST REGIS HOTEL IN WASHINGTON Al Rayyan Tourism Investment Company (ARTIC), the international hotel investment and hospitality subsidiary of Al Faisal Holding Company, has acquired the St Regis Washington, DC This is ARTIC’s fourth landmark hotel property in the US, the other three being in Chicago, Miami and New York.

he 182-room property with a 22,000 sq. ft. parcel is located two blocks north of the White House at the intersection of 16th and K Streets and considered the best in the city. ARTIC Chairman Sheikh Faisal bin Qassim Al Thani said: “The new acquisition fits with our

ITALIAN FIRM BAGS TWO PROJECTS Italian construction firm, Salini Impregilo Group, has secured a €770 million ($849 million) contract to build the Al Bayt Stadium at Al Khor to host matches during the 2022 World Cup in Qatar.

he contract is worth €770 million, of which 716 million will be for construction and over 53 million will be for operation and maintenance, according to sources. Salini Impregilo has also won a €300 million ($332 million) contract for the construction of primary urban infrastructure in Shamal, a residential area

100 km from Doha, Qatar. Salini Impregilo, part of the consortium created with Bin Omran of Qatar, said it beat three competitor consortiums from the Gulf area, Asia and the United States. The works, which have to be completed within a 30-month time span, have been awarded by the Public Works Authority, also known as Ashghal.

expansion strategy and investment criteria; it has an extraordinary location, superb asset quality and beautiful architecture. This also underlines our success in creating one of the leading international hospitality investment companies as we build on our strong Qatari base.”

LUSAIL SELLS 35 LUXURIOUS VILLAS AT QETAIFAN ISLANDS Lusail Real Estate Development Company has sold 35 luxurious residential villas at Qetaifan Islands, marking the completion of secondstage sales at one of Qatar’s most exclusive integrated communities. Qatari Diar Group CEO Khaled Al Sayed said: “Villas sold in the public offering are located in the second Qetaifan Island, which represents one of Lusail City’s major attractions in terms of site location and available amenities. Our offerings target all market segments starting with the first-stage sale of 50 land plots at competitive prices in the first Qetaifan Island, followed recently by the sale of luxurious residential villas in the second island,” he added.

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business > oil&gas Huge Shifts

The US has taken Russia’s crown as the biggest oil and natural gas producer in a demonstration of the seismic shifts in the world energy landscape emanating from America’s shale fields. US oil production rose to a record last year, gaining 1.6 million barrels a day, according to BP plc’s Statistical Review of World Energy released last month. Gas output also climbed, putting the US ahead of Russia as a producer of both hydrocarbons combined.

MILAHA ACQUIRES TWO LNG CARRIERS

Offshore rig meets with mishap A newly built Qatari offshore rig met with an accident. Although no one was injured in the incident, it may take months to get it repaired.

he accident involved the jack-up accommodation rig “Rumailah” and happened early last month in the Al Shaheen oil field, off Qatar’s northeastern coast, the state-owned Gulf International Services (GIS) said in a statement. The rig is owned by the company’s Gulf Drilling International division, while Denmarkbased Maersk Oil operates the oil field. Both GIS and Maersk said all personnel were safely evacuated, and no injuries were reported.

WORLD’S TOP SEVEN DEVELOPING LNG PROJECTS

mtpa = million tonnes per annum

Name of the project

Capacity

Cost

Sabine Pass LNG (US)

18 mtpa

$12 billion

Yamal LNG (Russia)

16.5 mtpa

$20 billion

Gorgon LNG (Australia)

15.6 mtpa

$54 billion

Australia Pacific (Australia)

9 mtpa

$20.5 billion

Wheatstone LNG (Australia)

8.9 mtpa

$29.7 billion

Queensland Curtis LNG (Australia)

8.5 mtpa

$20.5 billion

Ichthys LNG (Australia)

8.4 mtpa

$34 billion

Milaha’s fully-owned subsidiary, Qatar Shipping Company, has fully acquired two liquefied natural gas carriers from Société Général.

atar Shipping acquired the remaining 60% stake in Milaha Ras Laffan and Milaha Qatar, which were chartered to RasGas under a 25-year long-term fixed time agreement, a Milaha spokesman said in a communiqué to the Qatar Stock Exchange. The two carriers have about 14 and 16 years remaining under the time charter agreement. Both vessels were built by Samsung Heavy Industries. Milaha Ras Laffan was built in 2004 with a capacity of 138,273 cu. m., while Milaha Qatar was built in 2006 with 145,602 cu. m.

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affairs > arab snippets

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G R AT I F I CAT I O N

A view through a window shows Moroccan Muslims performing prayers for Eid Al Fitr which marks the end of the Muslim holy fasting month of Ramadan in the city of SalĂŠ, north of the Moroccan capital Rabat, on July 18. AFP PHOTO/ FADEL SENNA

QATAR TODAY > AUGUST 2015 > 25

investment > viewpoint

Financial market reform brings in more investors Foreign participation in the Qatar Stock Exchange (QSE) is set to rise on the back of technical reforms that have been implemented in the wake of the exchangeâ&#x20AC;&#x2122;s upgrade to emerging market status.

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egislation was ratified in August last year allowing foreign investors to own up to 49% of listed Qatari companies, up from the previous ceiling of 25%. This has prompted a number of firms listed on the QSE to apply for changes to their shareholding. In the second quarter, six companies increased the non-Qatari ownership according to the Qatar Central Securities Depository (QCSD). Four of those were in the financial services sector including Qatar General Insurance & Reinsurance Company, Qatar Insurance Company, the Commercial Bank of Qatar and Doha Bank. Property developer Ezdan Holding Group and the diversified trading, property and industrial company, Aamal, also applied for a higher foreign capital ratio. Additional services The decision to lift the non-Qatari ownership ceiling is part of a broader programme to raise the profile of the QSE and encourage local and foreign investors. Sheikh Abdulla bin Saoud Al Thani, Governor of the Qatar Central Bank, told OBG, “The creation of the QCSD is part of the development plan to advance the state’s overall financial vision and should function as the gateway to investing in Qatar’s capital markets.” The programme has met with success, as the QCSD – the company that went live in January 2014 to manage the safekeeping, clearing and settlement of securities and other financial instruments listed on the QSE – now has 500,000 active investors and is developing additional services to attract new ones. The QCSD is making headway by building on the number of financial instruments available, according to its CEO, Misnad bin Abdulatif Al Misnad. “New assets are being introduced such as exchange traded funds (ETFs),” he told OBG. “Real estate investment trusts will also be under the jurisdiction of the QCSD once they are introduced, and this process is currently under negotiation.” Rashid Al Mansoori, CEO of the QSE, echoed this sentiment, telling OBG that in order for the QSE to grow, new products and listings were necessary for expansion. He indicated that two out of three planned ETFs are expected to launch in 2015, both of which are currently awaiting regulatory approval. Wooing investors In late March of this year, the QCSD acted

on instructions from the regulator, to enable citizens of fellow GCC countries to be treated as Qatari nationals with regard to share holdings of listed Qatari companies. The decision, part of the wider programme of expanding the financial market’s base, means that GCC nationals will be able to enjoy the same rights as Qataris when it comes to investing in the capital markets. One of the drivers of expansion was Qatar being added to the MSCI Emerging Market Index in May 2014, following a decision by the global index compiler to promote the country’s status to emerging market from frontier market in June the previous year. Al Mansoori told OBG that the upgrade has attracted $2 billion of foreign funds to the bourse and as of July, foreigners represent about 40% of daily trading activities. The move onto the MSCI’s upgraded index resulted in higher capital inflows into Qatar’s markets and prompted financial news agency Bloomberg to rank Qatar as the second most promising emerging market for 2015, behind South Korea earlier this year. Last year, the successful Mesaieed Petrochemical Holding Company IPO raised some $881 million for a 26% stake previously held by Qatar Petroleum – making this the country’s biggest IPO in five years. In 2015, many investors will be watching to see if further offerings are made, with Barwa Bank and Qatar First Bank widely reported to be keen to list. Competing with Saudi bourse At the same time, competition in the region is heating up after Saudi Arabia opened up its stock market, the Tadawul, to direct foreign investment in June. As the Middle East’s biggest stock market – with a market value of over $570 billion and daily trading volumes of about $2.4 billion – the bourse is considered an attractive proposition for investors. However, foreign fund inflows have been slower to emerge than initially expected due to a host of rules and regulations that are taking time to digest. Despite competition from bourses such as the Tadawul, interest in markets such as that in Qatar will gather momentum according to Al Mansoori. “The QSE is now the largest emerging market in the region and the second largest market in the MENA region by market capitalisation. These figures indicate the confidence investors have placed in both the QSE and the Qatari economy.”

BY OLIVER CORNOCK The author is the Regional Editor of Oxford Business Group.

THE SUCCESSFUL MESAIEED PETROCHEMICAL HOLDING COMPANY IPO RAISED SOME

$881 26%

MILLION FOR A

STAKE PREVIOUSLY HELD BY QATAR PETROLEUM

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affairs > viewpoint

Dealing with targeted sanctions Law firm Carter-Ruck provides practical advice for businesses and individuals subject to asset freezes and travel bans.

usinesses and individuals based in the Middle East and operating in many different fields have increasingly found themselves unexpectedly subject to targeted sanctions. This is a trend which is set to continue as targeted sanctions are deployed more and more frequently. These sanctions are imposed by the United Nations, the European Union, and individual sovereign states as a way of achieving specific foreign policy objectives, and ultimately securing international peace and security. They are â&#x20AC;&#x2DC;targetedâ&#x20AC;&#x2122; in the sense that they are imposed upon particular entities or individuals. The purpose of sanctions imposed upon businesses and individuals in the Middle East has in particular been to combat terrorism and the support and financing of it. The impact of targeted sanctions can be devastating. The subjects of sanctions have their assets frozen without notice, as a result of which businesses can be effectively prevented from operating, and individuals from living their lives. There are generally limited exceptions available to allow funds

to be used, for example, to meet basic needs or pay for medical treatment or legal advice, but the sanctioned business or individual must apply for a licence from the appropriate domestic authority to permit these limited uses of frozen funds. A travel ban may also be imposed, preventing a sanctioned individual from entering or travelling through territory where the sanctions apply. Challenging sanctions There are various avenues available for challenging the imposition of targeted sanctions. One option is to commence litigation in the domestic courts, if judicial review of a Stateâ&#x20AC;&#x2122;s administrative decisions is available as it is, for example, in the UK and the US. At the UN one can submit a petition to the UN Ombudsperson who has responsibility for independently reviewing petitions for delisting from certain categories of those sanctioned. Entering into a dialogue with the authority that has imposed the sanctions, such as domestic government agencies or regional or international organisations in an attempt

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to address their concerns, has also proved successful. The case of Sheikh Yassin Kadi provides examples of successful challenges to sanctions. Sheikh Yassin is a Saudi Arabian businessman who had a worldwide asset freeze and travel ban imposed upon him by the UN. As a result he was also sanctioned by the EU, as well as by individual states. He successfully challenged the imposition of EU sanctions upon him by making an application for annulment in the Court of Justice of the European Union in Luxembourg. The UN sanctions against him were lifted following a delisting petition made on his behalf to the UN Ombudsperson. There followed the removal of all other sanctions to which he was subject, including, finally, those imposed by the US which were removed after a period of engagement with the US Treasury Department. There is thus often much that can be done to have sanctions lifted; the key is to instruct lawyers with experience in challenging sanctions immediately upon their imposition. Time limits for legal challenges of this nature are typically short, so time is of the essence. Post delisting: not business as usual Being delisted is not, unfortunately, the end of the story. Businesses, other entities and individuals who have had sanctions against them lifted often find that, far from being able to carry on with their lives and businesses as before, new problems arise. Aside from the obvious difficulties of recovering from a period of long-term business interruption, businesses and individuals often find that their reputations are left severely damaged by sanctions, and that this has a negative impact on their ability to conduct business and take part in their community and society as a whole, even after sanctions have been removed. As just one example, banks are wary about dealing with people or entities which

have been the subject of sanctions, often refusing to conduct transactions involving them or even closing existing accounts. There is little that can be done if a bank wishes to terminate a client relationship, since they are private institutions and can pick and choose their customers. Because sanctions are political, rather than legal, instruments imposed after any finding of wrongdoing, the allegations behind them often remain unsubstantiated but without any final determination that they were incorrect. This is a highly unsatisfactory situation and one which requires proactive steps to improve on the part of the business or individual and their advisers. Rebuilding reputation The focus once sanctions are removed should be on the rehabilitation of the reputation of the sanctioned business or individual. This can be done via press releases to, or interviews with, the media. It is also important to look at the reasons why the sanctions were imposed in the first place and to introduce stricter controls by way of corporate governance and due diligence. Some sanctions have been imposed upon those in the Middle East because of a fundamental lack of understanding by those in other countries of the way business is done in the region. Those of our clients who have looked objectively and in detail at how their operations could be misinterpreted or misused and set about trying to minimise such risks have had the most success in terms of re-establishing their businesses and reputations after the lifting of sanctions. It is also vitally important to consider whether association with certain other businesses or individuals could be misinterpreted. The use of investigation agencies is one way in which businesses and individuals can protect themselves against the risk of unknowingly associating with those who attract negative attention from the authorities

BY MIRANDA RUSHTON Senior Associate Carter-Ruck

ABOUT CARTER-RUCK Carter-Ruck represents individuals, businesses and charities in relation to the imposition of targeted sanctions upon them and the restoration of their reputations following their removal. In this context, CarterRuck has acted for Yassin Kadi since the imposition of sanctions upon him, through to the lifting of all sanctions against him anywhere in the world. QATAR TODAY > AUGUST 2015 > 29

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affairs > world view

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I S I S ST R I K E S AGA I N

People carry the coffin of Duygu Tuna at a funeral in Istanbul's Gazi District on July 22 for those killed in a suicide bomb attack in the southern Turkish town of Suruc. The bomber, identified as a 20-year-old Turk, blew himself up two days earlier in the town which is across the border from the embattled town of Kobane, Syria. The explosion killed 32 people and wounded about a hundred others, most of them young Kurds who had gone to Suruc to prepare for an humanitarian aid mission in Kobane. AFP PHOTO / YASIN AKGUL QATAR TODAY > AUGUST 2015 > 31

development > listening post

The

art of

savoir-relier 32 > QATAR TODAY >AUGUST 2015

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In the new age of leadership, it is imperative that leaders be genuine, generous and generative. Helping them in this new, transparent and intuitively top-down leadership role is a new philosophy which aims at improving the quality of all relations, says its creator, Dr Valérie Gauthier, Associate Professor at HEC Paris. By Sindhu Nair

Picture this management class in progress: around 40 students attending the HEC Leadership Certificate course in Paris are in a demo kitchen within the campus, all set to prepare and then serve lunch for 60 VIP guests. The valuable lessons learnt are not gastronomic doctrines, though it is tacit that the food served has to meet the set high-quality standards, but to teach students to bond during an hour of crisis and find solutions as a team. If this sounds far from the convention in management schools, then it is typical of what Dr Valérie Gauthier, Associate Professor at HEC Paris, has set out to achieve. The results of such intense exercises are already coming in, say Gauthier, with students reporting that in just six weeks of the programme, they have come closer to each other and bonded more strongly and effectively than they ever did with students with whom they have spent almost four years on campus. The reason: savoir-relier, the quality of relations that they are forging in those intensive, demanding environments, encourages increased trust levels and a sense of openness which inspires better engagement. The effect of this sense of working together is relevant not just in small groups but also in companies, in executive roles, and in crisis-hit management companies, according to Gauthier, who is in the process of spreading the message of this unique methodology through her book, Leading with Sense: The Intuitive Power of Savoir-Relier. Drawing from her expertise in linguistics

and poetic translation, as well as leadership and cross-cultural relationships, Gauthier has built relational communication and leadership development programmes in schools and in companies under this new concept. Gauthier is continuing with the data collecting and analysis process that is involved in the next stage of the programme and to date she has the complete trust of the people who have so far undergone this exercise (1,600 people from different nationalities) and vouch for it. “They feel more confident, more self-aware, ready to move forward in their capacities to lead their organisations,” she says. But what exactly is savoir-relier? “Savoir-relier comes from the French words meaning ‘to know’ and ‘to link/rely on’,” says Gauthier. “It is the art of connecting people together, maintaining high-quality relationships, and linking ideas to create meaning and taking the world forward.” It results in better communication through positive, sensible and active listening to understand our environment and see the people we work with for who they really are, with their own ideas, their own self and sense of purpose, without judging them, elaborates Gauthier. If that sounds too optimistic, Gauthier is not done with all the paybacks. “Savoirrelier can be applied to all disciplines where human relationships are important. It is a skill and a philosophy, but also a process. It is a management method that enables better team leadership and encourages relationships between people in spite of

SAVOIR-RELIER ROLE MODELS

"L’Oréal, and more specifically their chairman and CEO Jean-Paul Agon, have supported my book and the savoirrelier philosophy, appreciating the way this approach generates a genuine group identity. The business under his watch continues to go from strength to strength."

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development > listening post

"Clara Gaymard, President of GE France and VP of GE International, is also a good example. In my book I explain how she has developed incredible savoir-relier abilities, both personally and professionally."

their differences of opinion.” “Savoir-relier thus allows us to create sense (meaning) while being more sensible (attentive and vigilant towards others and yourself ),” she says. To a sceptic, all this does seem quite impossible, with leaders moving away from the traditional inspiring figure to more of a figurehead, who only takes credit for the work executed by his team. So which leader uses this method? Someone who is people-oriented, who actually listens and talks to every employee, identifies key issues and solves it bottoms up. But do we have such leaders? Gauthier is optimistic. She uses examples of such leaders. “Pernod-Ricard was the first supporter of savoir-relier. The PernodRicard directors immediately identified with this management method and wanted me to work with them to incorporate savoir-relier into the company,” she says. Pernod-Ricard developed internationally and experienced strong external growth through mergers and acquisitions. The group was remarkable in its ability to unite and establish rich and diverse interpersonal relationships. “This later helped HEC to develop the HEC Paris-Pernod-

Ricard Chair, and to create a Leadership certificate.” In Middle Eastern cultures where it takes years before one develops close relationships with the nationals, especially Qataris, practicing savoir-relier might not be as easy as it seems, though Gauthier counters by saying that these principles can be applied worldwide. L'Oréal, Procter & Gamble and LVMH are some of the companies that have benefitted from this approach of open leadership that has helped managers build something new, something likely to generate value and meaning over the long term, using a more collaborative model. “Savoir-relier places relationships and human diversity at the service of innovation and collective performance,” says Gauthier. This new philosophy is a trademark, owned of course by the creator, Gauthier, whose first article on this principle was penned way back in 1994. The final step towards spreading the message is the publishing of her book. “It is becoming a new area of research in the field of leadership,” she says. Replicating this in Qatar (where HEC

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“There is no recipe to be a good leader. Leadership is not a technique: it is a state of being that translates into acts; it is in her or his acts of leadership that the leader exists.” already has a branch campus) in the near future would be next to impossible given the time frame it takes to put the whole programme in place, she says. “I have my hands full now and I need to recruit more people who will take this forward in the way I envisage.” Gauthier put to use the principles early on when she was asked to become dean of the HEC MBA programme from 2002 to 2010 at a time when it was “dramatically failing with demoralised teachers and students”. By listening to and understanding the problems of both the students and the teachers in order to find effective solutions, Dr Gauthier redesigned the MBA curriculum and restructured it with a view toward future societal and educational shifts. Under her, the programme underwent a fundamental transformation that placed the HEC MBA among the top MBA programmes worldwide (FT MBA ranking - 18th in 2011 vs 67th in 2002). Gauthier goes deeper into the savoirrelier principles and points to the three main pillars, the three Gs: genuine, generous and generative. These three Gs are essential in creating leaders of tomorrow, she says. “These three ingredients are essential for building strong, positive relationships between people and things,” she says. “To be genuine, you have to start by being yourself, being transparent and sincere. It requires work and a mixture of selfconfidence and humility. To be generous, you must be trustful of and attentive to others. A generous attitude leads to the creation of an open, kind and tolerant atmosphere where people from different cultures can work together – it’s a way of uniting people.” Together, genuineness and generosity create the conditions for generative leadership that encourages action, creativity, innovation and a strong sense of a shared mission.

Does that mean that someone who has attained the savoir-relier principles will naturally take on a leadership role? Gauthier believes that anyone can become a leader; a fire fighter can show leadership skills to make his team work together. “There is no recipe to be a good leader. Leadership is not a technique: it is a state of being that translates into acts; it is in her or his acts of leadership that the leader exists,” she asserts. “Although savoir-relier may turn out to be intuitive among certain people who have better awareness of their senses, it needs constant practice and determination. It forces you to use your intuition, which is difficult to do because it’s less reassuring than using an analytical thought process,” she says. The reason that there is more trust is because there is candidness within the interactions that have to be practiced with the group. The savoir-relier website, which encourages the same boundary-less communication as the first step, is difficult to take when there is always a layer of doubt before you reveal all your failings to a stranger. Gauthier explains, “One of the flaws of our corporations, a flaw which also contributes to leadership failure in politics, is that we are judgmental, overly critical and distrustful. When we judge, we are not being respectful. With savoir-relier, I advocate discernment, more openness and greater respect for the full results.” “Leadership needs to be reinvented and to help design new jobs, new businesses and new environments where collaboration, attention to others, co-construction are keys to sustainable growth. Consideration for others and for our planet is what will make for good leadership and a better world tomorrow. Values exemplified in the savoir-relier approach are clearly the way forward in training the next generations of leaders, the genuine, generous and generative leaders who will help transform our world,” she says

"Pascal Cagni, CEO of Apple’s European business from 2000 to 2012, also demonstrates the three Gs. Not only did he foster an entrepreneurial environment, but Apple’s revenue in his region increased from $1.3 billion in 2000 to almost $40 billion in 2012."

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foreign affairs > viewpoint

The threat of

a nuclear Iran What does Iranâ&#x20AC;&#x2122;s nuclear deal mean for the GCC countries?

he Gulf Cooperation Council (GCC) countries see Iran as a great threat to their regional autonomy and political stability. They also view Iranâ&#x20AC;&#x2122;s nuclear programme as a smoke screen for developing nuclear weapons. This, they believe, poses the greatest challenge to their oil wealth and security. The biggest threats of a nucleararmed Iran might not be immediately decisive. Rather, they will impact the pride

and political clout of Saudi Arabia, the UAE, Egypt and Turkey. Iran would use its nuclear status over its Arab neighbours and Turkey and that is a situation that the GCC leaders want to avoid. Their fears are justified. In an already strained regional landscape, the recently agreed deal between Iran and the P5+1 group could upset the geopolitical balance, to the detriment of Gulf states. The final Iran nuclear deal is a great triumph for

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option. A direct dialogue will be more effective to thrash out regional problems and reach settlements that would satisfy all parties, with the possible involvement of the US in brokering the talks.

BY DR MAMDOUH G SALAMEH

Competition for oil & gas assets A nuclear Iran desperate for oil could grab some of its Gulf neighbours’ oil and gas assets such as the Majnoon oil field straddling the Iraqi/Iranian border (with estimated proven reserves of 17 billion barrels) or the Saudi Safaniya offshore oil field (the biggest offshore field in the world) or Qatar’s offshore gas fields (the third biggest in the world). It could also hold its Gulf neighbours to ransom by threatening to block their oil exports through the Straits of Hormuz unless it shares in this wealth. The United States would not, for sure, come to the defence of its Arab allies against a nuclear Iran.

"In balancing Iran’s power it is tempting for Saudi Arabia and the UAE to turn to nuclear weapons as part of a larger strategy to counter Iranian nuclear influence."

Strategic hegemony Iran is a hegemonic power by nature. Under the Nixon administration it had the backing and co-operation of the United States to establish itself as the custodian of the Gulf. A nuclear Iran aspires to resume that role independently of the United States.

Iran. Under the terms of the deal, Iran will limit its nuclear activities particularly in relation to enriching uranium and in return it will receive $120 billion of its frozen financial assets in the West and there will be almost complete lifting of economic sanctions against it within a few months. In real terms, the deal will only delay (by a few years) the possibility (which is not just a probability) of Iran acquiring nuclear weapons. In balancing Iran’s power it is tempting for Saudi Arabia and the UAE to turn to nuclear weapons as part of a larger strategy to counter Iranian nuclear influence. However, the GCC countries are well advised to settle differences with Iran by negotiations and build bridges of trust between them before wielding the nuclear

Threat to the GCC regional stability Saudi leaders fear that Iran could seek to mobilise the Shiite minority in Saudi Arabia to create political turmoil and even, in a time of great tension between the two countries, sabotage main oil and gas production assets in the eastern region of Saudi Arabia. The UAE and Iran have a territorial dispute. The UAE claims ownership of three islands in the Gulf that are now under Iran’s control – Abu Musa, Greater Tunb, and Lesser Tunb – which were occupied by Iranian forces in November 1971. The UAE has requested that Iran resolve the dispute over the three islands through direct negotiations or by referring it to the International Court of Justice. Iran has so far rejected both direct negotiations and international adjudication. Conversely, few, if any, knowledgeable observers think QATAR TODAY > AUGUST 2015 > 37

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foreign affairs > viewpoint

"GCC countries are well advised to not overstate threats from Iran. With a combined GDP of $1.9 trillion, which is five times Iran’s GDP, and with 39% of the global proven oil resources, they are far more powerful economically and politically than Iran."

ABOUT DR MAMDOUH G SALAMEH Dr Mamdouh G Salameh is an international oil economist, a consultant to the World Bank in Washington DC on oil & energy and a technical expert of the United Nations Industrial Development Organization (UNIDO) in Vienna. He is also a visiting professor of energy economics at the ESCP Europe University in London.

that if Iran possessed nuclear weapons it would use them in offensive attacks against its Arab Gulf neighbours (or, for that matter, Israel or the United States). Conducting offensive war with nuclear weapons would merely invite retaliation that would destroy the Iranian regime, if not the Iranian society. The significance of nuclear weapons to the Iranian government would be to bolster its confidence that the US would not forcibly seek to overthrow it. An Iran that feels more secure does not pose an additional threat to other Gulf states. How the Gulf States react to Iran nuclear issues will depend on the different scenarios that are most likely to emerge. The best-case scenario A diplomatic breakthrough occurs that leads the major international powers to conclude that Iran will have neither the intent nor the capability to acquire nuclear weapons in less than two years, and that this early warning will be maintained indefinitely. This is exactly what the final nuclear deal has achieved. The UAE and Saudi Arabia say that they, like Iran, will seek to acquire peaceful civilian nuclear technology. The worst-case scenario Were Iran to move clearly to acquire nuclear weapons, the US could attack Iran’s known nuclear infrastructure and military capabilities that could be used to retaliate against US interests in the region. The downside of this approach is that the United States and Israel can’t win such a war without using nuclear weapons to destroy Iran, which is clearly a catastrophe in the making. There is also the possibility that Iran actually acquires enough nuclear weapons with secure enough infrastructure and Israel and the US conclude that military strikes would not effectively eliminate these capabilities for a significant duration. Options The scenario of war or that of Iran acquiring

nuclear weapons would leave GCC no choice but to respond. But there are options to avoid this dire situation. The first option is to seek the extension of more formal security guarantees by the US. However, this option is fraught with complications and difficulties. Would the US, for instance, commit itself to intervene militarily on behalf of the UAE if Iran moved to annex the disputed Abu Musa and the Greater and Lesser Tunb islands? Would the United States be willing to extend nuclear deterrence to the Gulf states? It is very highly questionable whether the US Congress and public would support a commitment by the US to risk nuclear war with Iran on behalf of Gulf states. A second option in which the Gulf states could respond would be to acquire their own nuclear deterrent. Saudi leaders are on record suggesting that the Kingdom would counter nuclear Iran by acquiring nuclear weapons too. The GCC countries could also submit a draft resolution to the UN Security Council calling for the Council to declare a nuclear-free Middle East. If the Security Council fails to agree on such a resolution, this would provide Saudi Arabia and the UAE with diplomatic and moral cover in also seeking their own nuclear deterrent. A third option is for the GCC countries to try to settle their differences with Iran by negotiations and to build bridges of trust between them before brandishing the nuclear option. However, such negotiations have to be initiated against a background of GCC countries building up deterrent conventional forces which could be more than a match for Iran’s forces and seeking their own nuclear deterrent. In the final analysis, the GCC countries are well advised to not overstate threats from Iran. With a combined GDP of $1.9 trillion, which is five times Iran’s GDP, and with 39% of the global proven oil resources, they are far more powerful economically and politically than Iran. Together, they can be a force to reckon with if they stand united

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In our cover story this issue, we talk to energy, environmental and financial experts in order to decipher the carbon bubble. Is it real? How serious is it? And does Qatar’s gas economy make it immune to a certain degree? BY AYSWARYA MURTHY

Total carbon potential of the Earth’s known fossil fuel reserves.

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2,795 GtCO₂

To reduce the chance of global temperatures exceeding 2C between 2000 and 2050 to 20% or less , no more than 886 GtCOâ&#x201A;&#x201A; could be released into the atmosphere

20%

The 200 biggest coal and oil and gas companies make up 7% of the S&P500 index today

AUGUST 2015 > 41

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he logic behind weaning ourselves off fossil fuels is globally accepted; there are enough reasons – the carbon-dioxide (CO₂) emissions, the finite nature of hydrocarbon resources, price volatility, complicated geopolitics. But today we are farther than ever from that goal thanks to increasing population, better technology in oil and gas exploration and extraction, and the unrelenting march of progress. And it is because of the latter that the world is hurtling towards disastrous and irreversible climate change. History doesn’t reflect kindly on our attempts so far to address the issue: the Kyoto Protocol and the infamous COP 15 at Copenhagen are just two examples of weak regulations and intent with no action. While the hand-wringing and attempts to apportion blame and responsibility continued, by 2009 world powers had agreed that they needed to start working towards limiting the increase of global surface temperatures to less than

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Comparison of the global 2°C carbon budget with CO₂ emissions potential of fossil fuel reserves

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2° C if we were to avoid dangerous climate change. Many consider even this an arbitrary political target, with climate scientists predicting a narrower safe zone that limits raising the temperature up to 1°C. So far, the average temperature of the planet has increased by just under 0.8° C, and that has caused far more damage than most scientists expected. However the 2C target is what governments are (optimistically) expected to work towards and that is what will (theoretically) pop the bubble. Back in 2011 the Carbon Tracker Initiative (CTI) released its first report, Unburnable Carbon, that introduced the term "carbon bubble" to the world. The non-profit think tank made up of financial, energy and legal experts set out to highlight the discord between efforts to reduce 42 > QATAR TODAY > AUGUST 2015

greenhouse gas emissions and growing investment in coal and oil and gas companies. According to the report, to reduce the chance of global temperatures exceeding 2° C between 2000 and 2050 to 20% or less, no more than 886 GtCO₂ (billion tonnes of CO₂) should be released into the atmosphere. During the first decade of the 21st century, we already used up a significant portion of that carbon budget. As of 2011, we only had 565 GtCO₂ in our carbon kitty which had to last us for the next 40 years and this budget will shrink further in the latter half of the century. But the total carbon potential of the Earth’s known fossil fuel reserves comes to 2795 GtCO₂, predominantly as coal, followed by oil and then gas. These are reserves that are being treated as assets and are expected to be brought to the market sooner or later, irrespective of whether they are still underground or already in the pipeline. But 2C dictates that only 20% of all this carbon can be burnt. Global stock exchanges list some of the biggest energy companies that transfer a significant amount of this carbon risk to investors. The fossil fuel reserves held by the top 100 listed coal companies and the top 100 listed oil and gas companies represent potential emissions of 745 out of the 2795 GtCO₂ (with smaller companies and state-owned entities making up the rest). And these companies – called the Carbon 200 – make up 7% of the S&P500 index today. More recently, the rapidly developing economies of China, Brazil, India and Russia have also been bringing their state enterprises to the markets. Shenhua Energy, Petrobras, Coal India and Gazprom are examples of this trend. Applying the 20% rule uniformly, we see that only 149 GtCO₂ of the listed carbon can be used, implying that investors have bought five times more carbon than they would be allowed to sell. This represents trillions of dollars in wasted capital and stranded assets. “Exchanges with above average investment in fossil fuel assets expose their domestic and international investors to as yet unquantified risks of stranded carbon. These risks increase in direct proportion to their absolute exposure to fossil fuels. Where exchanges have a high proportion of listed fossil fuel companies owning unburnable carbon, the knock-on effects to others within the financial markets risks are worth noting,” the report notes. By the time CTI released another report in 2013, this total fossil fuel reserve had increased to 2860 GtCO₂. Companies are continually exploring new fields, spending billions of dollars to bring more reserves online. The level of listed reserves could double to 1541 GtCO₂ if all of the prospective reserves are developed, the report says. Their analysis showed that the capital expenditure spend (adjusted proportionally to revenues from coal, oil and gas) over 12 months in 2012-13 by the 200 listed hydrocarbon companies totalled $674 billion (QR2.475 trillion). The higher capital costs of the oil and gas sector mean that the majority – $593 billion (QR2.180 trillion) – was related to this sector, with $81billion (QR295 billion) related to coal operations. Will investors ever see returns

on these massive investments? Why do companies continue to sink shareholder funds into the development of additional new reserves that are incompatible with a low-carbon pathway? These are the questions CTI is asking. And now, so are many others.

Jochen Wermuth, is a passionate advocate of controlled divestment from fossil fuels. There is no more denial about the bubble, he says, and points out that owners or managers of $50 billion of assets have committed to divest from fossil fuel producing assets (an average equity portfolio holds 7% of assets in oil, gas and coal, so this commitment means divesting around

To divest or not to divest Over the last couple of years, CTI’s research has drawn the attention of many institutional investors, funds and regulators in Europe. “There has indeed been substantial progress,” says Anthony Hobley, CEO of Carbon Tracker Initiative. “Regulators, central banks like the Bank of England, pension funds particularly in Scandinavia, and Sovereign Wealth Funds (Norway’s) have taken note of and drawn our work,” he says. The Guardian called the Bank of England’s enquiry into the carbon bubble the “most significant endorsement yet from a regulator” and the discussions will involve the financial policy committee which is tasked with identifying systemic ecoEnergy Expert, Brookings Doha Center, and nomic risks. Meanwhile head of Consulting, Manaar Energy (Dubai) The Telegraph reported that the G20, encouraged by France which will be hosting the UN summit on climate change later this year, has asked the Financial $3.5 billion in assets). “Corporate leaders, for example Shell Stability Board in Basel to “convene a public-private inqui- Management, have recommended their own shareholders ry into the fallout faced by the financial sector as climate to mandate the development of a post carbon-age strategy. rules become much stricter”. The FSB did not respond to These organisations ‘get it’ and so do an increasing number a request for comment though it is expected to present its of long-term investors. The International Energy Agency findings prior to the G20 summit in November this year, (IEA) has already said that to bet on high long-term oil, gas and coal prices would be a mistake and that the energy injust two weeks before the COP 21 in Paris. The United Nations Framework Convention on Climate dustry is now shifting to more competitive renewable powChange COP to be held in Paris at the end of 2015 is only er sources.” Wermuth is also a member of the steering comthe next step in the global negotiations, CTI reports. It will mittee of the Divest-Invest Philanthropy in Europe which confirm the current country-level objectives which can be invites its network of primarily charitable foundations to further ratcheted down. Alongside this are the announce- align their giving and their investment objectives by pledgments from the G7 to aim for up to 70% decarbonisation by ing to divest from fossil fuels over three to five years and 2050. These all represent a downside for fossil fuels at the invest in renewable energies and resource efficiency, for both moral and financial reasons. “Philanthropies were high end of the cost curves and justify divestment. Meanwhile, some investors are taking matters into their finding out that they were donating to Greenpeace to fight own hands. In Germany, where already renewable ener- climate change, but their investment office was invested in gies satisfy 75% of the country’s demand for electricity in Shell. This is the basis of the Divest-Invest Philanthropy the summer, climate scientists, the Ministry for Econom- movement,” he notes. Wermuth warns that early action will make all the differic Affairs and Energy, environmental activists and several large funds and investors gathered for the first Berlin In- ence between an orderly transition vestment Forum that centered on the theme of “Climate to a low-carbon economy or a chaChange and Global Asset Allocation”. Wermuth Asset Man- otic and full-blown financial agement, a family office which formally manages its own crisis and recession. The key private assets while acting as a BaFin-regulated invest- issue for markets and invesment adviser, organised the forum and its founder and CIO, tors is that the rebalancing

"The idea that energy companies are oblivious to a 'bubble' that has only been spotted by environmentalists is impossible. Climate policies go into long-term forecast of oil and gas prices and companies watch it carefully. So calling it a bubble is kind of misleading." Robin Mills

of the energy eco-system takes place with as little damage to investment values as possible. “While for certain investors it is possible simply to sell these assets in the market when they are listed assets, or to instruct funds they are invested in to sell within three years or to sell real assets gradually, for the world’s largest pension funds such as Calpers (US) or AP4 (Sweden), the approach is that not everyone can divest because someone has to buy. Instead, owners of around $43 trillion worth of assets who are committed to the UN Principles for Responsible Investment, have decided to cooperate to halt further

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these concerns and is shifting away either because of grassroot constituents pressure or speculative gains based on an early mover advantage,” says Raphael. “I doubt that a large divestment from carbon assets and stock price drops would occur immediately unless there is a concrete accounting rule that would force revaluation of corporate energy assets or globally enforceable monetary fines on corporate carbon emitting offenders. In my opinion, change will be slow and gradual, say over 10 years. In all cases, if and when such scenario happens, countries would be affected more than corporations, because I would assume that corporations do not own large reserves but countries do. Also, energy corporations and other polluting industries will do their best to adapt and shift their investments and activities to lower carbon footprint activities.” And oil companies and energy analysts continue to present a compelling, if distressing, case for why fossil fuels aren’t going away all that soon and the carbon bubble is unnecessarily alarmist.

"We can highlight a number of examples where there are already stranded assets for a range of reasons, without a global deal or carbon price. With low-risk and low-cost, renewables are becoming increasingly important for investors when risks and costs for hydrocarbons are increasing. If everyone just sits around waiting for a global deal, then they will miss these fundamental developments which are already creating stranded assets."

Reality bites It isn’t surprising that with all the buzz around the carbon bubble and heightened expectation from the upcoming COP 21 to agree on tough climate change policies, shareholders are starting to question whether the profits from their investment should be used more towards capital management and diChief Executive Officer, Carbon Tracker Initiative versification rather than exploration. Over the last few months, energy majors like ExxonMobil investment in oil, gas and coal exploration on the basis that, and Shell have had to respond to the threat of the carbon due to low future prices, they are economically senseless. bubble to quell the fears of their investors. Their aim is to use their shares in oil, gas and coal compaIt is important to note at this point that much of the ponies to vote for distribution of profits in the form of divitential emissions from the listed carbon reserves comes dends or share buy-backs instead of investing them in new from coal, one of the dirtier sources of energy available toexploration projects,” he says. day. In fact, 65% of emissions are from coal, with oil providBut not everyone shares these views. Camille Raphael, ing 22% and gas 13%. Dr Keith Crane, Director of the RAND General Manager at ALSHALL Economic Services, doesn’t Environment, Energy, and Economic Development Probelieve that investors are treating the matter seriously gram says this differentiation is important while discussing enough to take corrective action. “I believe that listed eqthe carbon bubble. “In the United States, China, Austrauity investors would tend to be more concerned by shortlia, and Indonesia, coal companies are being hit hard by term profits than potential medium-term or long-term reductions in demand. The EU, risks of an investment. In the absence of enforceable formal the United States, legislation, changes in accounting rules on the valuation and Canada are on of energy reserves or a drop in demand for carbon assets, a path to phase I do not see the majority of investors divesting away their out a very large carbon assets if they are still generating good returns in the share, if not all, of short term. A small minority seems to be responding to

Anthony Hobley

44 > QATAR TODAY > AUGUST 2015

coal-fired electric power capacity. China has also reduced consumption. Coal mining companies are going bankrupt and employment in the industry is dropping. So this is already happening,” he says. And this trend might as well give the oil and gas industry some decent breathing space in terms of potential carbon emissions. “Given the longer time scale, every oil and gas investment project will come on line when demand is still solid,” he says. This concurs with what Shell has said about its SEC-proved reserves having a life of 11.5 years.

to meeting growing energy demand worldwide. Robin Mills, Energy Expert at Brookings Doha Center, is also the Head of Consulting at Manaar Energy (Dubai) which “provides strategic and commercial advice on Exploration and Production, oil service and in-

Emission potential of listed hydrocarbon reserves (in GtCO₂)

Although an oil project may run for decades, the payback period, the company says, is concentrated in its early years, so it will have paid its way long before tough laws come in. Then there is the question of demand. While the percentage of fossil fuels in the future energy makeup is expected to fall, in absolute terms oil and gas companies still anticipate a need to step up, or at the very least, continue production levels in light of the increase in global consumption. Both ExxonMobil and Shell have provided data supported by the IEA that show how a natural decline in production of liquids will have to be replaced. ExxonMobil told its shareholders that based on this analysis, they are confident that none of their hydrocarbon reserves will become “stranded” and they believed that producing these assets is essential

frastructure projects.” He has no doubt that these new projects are commercially viable and will yield returns. “The argument here is that there is much more resources than we can ever use. There is some truth in it, especially when it comes to coal. And not all oil reserves can be used because, like the heavy oil found in Venezuela, some are expensive to extract and use. That is why exploration is important – to discover cheaper, easier alternatives. Also, a large part of the global resources are held by national oil companies which are producing them very slowly. If you believe the use of oil

IEA new policies scenario showing natural decline and need to replace production

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IEA new policies scenario showing natural decline and need to replace production Souce: IEA world energy outlook 2012

and gas will decline over the next 100 years, doesn’t it make sense to look for resources we can use today?” he asks. This is why he believes that the expensive projects that have stalled or been cancelled because of the low oil prices will be revived in the next two or three years, irrespective of whether the price picks up. “Companies will cut costs, squeeze suppliers and look for better, efficient ways till

Shell energy demand outlook million boe/d 400

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these projects are economically viable again. We are at $56 (QR205) a barrel now which is still a very high oil price, historically speaking (for a long period of time the price has been around $20-30 (QR75-110) per barrel in today’s terms),” Mills says. So the viability of these projects is not in question. He also points out that the fall in oil prices was not because of new climate policy or the emergence of renewable energy but because of volatile market forces that the energy industry is more than familiar with and knows how to handle. “Oil prices might fall again, for whatever reason, and companies might fail, but that’s the risk investors take. Energy companies are not banks. If they make losses, or even go bankrupt, that’s normal workings of the market and won’t affect the economy more broadly,” he says matter of factly.

Born with the carbon risk Climate change and energy companies have had a tumultuous history. Like the albatross around the mariner’s neck, oil and gas companies have always had to anticipate and factor in the risks of stringent climate change policies. According to Mills, “The idea that energy companies are oblivious to a bubble that has only been spotted by environmentalists is impossible. Climate policies go into long-term forecast of oil and gas prices, companies watch it carefully, try to lobby on it like any other interested party and, as climate policy continues to get tougher and renewables grow, they will continue react to that appropriately. None of this is sudden or unexpected. There have been no dramatic changes that have caught the industry unawares. So calling it a bubble is kind of misleading,” he says. ExxonMobil explains to its 2040 2050 shareholders how it incorporates carbon risk into its investment deCoal cisions. “We address Nuclear Other Renewables the potential for future climateSolar

Source: ExxonMobil

COVER STORY

related controls, including the potential for restriction the industry and on emissions, through the use of a proxy cost of carbon its investors into and which is embedded in our current Outlook for Energy. bankruptcy It is simply our effort to quantify what we believe gov- ruin, he dismisses. ernment policies could cost to our investment opportu- To him, the carbon nities,” the statement says. So while these energy com- bubble is just another panies are still calling for a carbon price, they are also new approach by envibasing their economies on their own internal price (For ronmental campaigners to example. Shell budgets for future capital investment on the assumption it will pay $40 a metric ton for carbon emissions. That’s almost six times the current price for pollution rights in the European Union’s carbon market, the world’s biggest). The companies may boost their shadow carbon price if climate policies get tougher and, according to Shell, “if the regulatory environment doesn’t evolve quickly, we actually have a carbon upside in our projects today”. Of course no one denies, least of all the companies themselves, that they have to think very hard about their long-term future in a world of tough action against climate change. “Do they want to get into renewables, invest General Manager, ALSHALL Economic Services in energy efficiency, will carbon capture and storage technologies come to their rescue? There is no easy answer to that, of course,” Mills admits. “For ener- persuade investors not to put money in fossil fuel companies. gy companies these considerations are at least 30-40 years “In the next two to three years they might have a different away.” That a sudden crisis will occur which will plunge angle,” he says.

"I believe that listed equity investors would tend to be more concerned by short-term profits than potential medium-term or long-term risks of an investment. In the absence of enforceable formal legislation, changes in accounting rules on the valuation of energy reserves or a drop in demand for carbon assets, I do not see the majority of investors divesting away their carbon assets if they are still generating good returns in the short term." Camille Raphael

The future as Shell sees it Shell has envisaged what might lie ahead 50 years from now through the lens of two possible scenarios - Mountains and Oceans. The first scenario, labelled “mountains”, sees a strong role for government and the introduction of firm and far-reaching policy measures. These help to develop more compact cities and transform the global transport network. New policies unlock plentiful natural gas resources - making it the largest global energy source by the 2030s - and accelerate carbon capture and storage technology, supporting a cleaner energy system. The second scenario, which we call “oceans”, describes a more prosperous and volatile world. Energy demand surges due to strong economic growth. Power is more widely distributed and governments take longer to agree major decisions. Market forces rather than policies shape the energy system: oil and coal remain part of the energy mix but renewable energy also grows. By the 2070s solar becomes the world’s largest energy source.

Global Fossil Energy Share in 2035: Shell & IEA scenarios 85% 80% 75% Shell

70%

IEA 2012

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AUGUST 2015 > 47

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The COP that could? The other sticking point between carbon bubble campaigners and sceptics is the 2C target which is also known as the 450 ppm (parts per million) scenario. The economic realities of the dominance of fossil fuels and the precedence of weak regulatory action on climate change have led energy majors to dismiss the carbon bubble. “This scenario is based on the premise of meeting 2°C and working backwards; whereas all the other scenarios on the chart are forward-looking and start with today’s realities as the starting point. When Shell plans, we plan for our businesses to be robust in a range of potential futures, not just for one potential outcome,” Angus Gillespie, Shell’s Vice President for CO₂ Strategy, told shareholders at the Royal Dutch Shell Annual

change, there doesn’t seem to be enough will or a sense of urgency to enact these tough policies. So on second look, the whole carbon bubble scare might as well be moot and it’d probably be business as usual till the bitter end. “Regulating carbon emissions is a big and global initiative. There are plenty of disagreements on measurement, impact and timing of global warming, curbs quotas, enforcement mechanisms, etc. Not that the subject is not important or threatening, but like many other global issues, it is hard to reach a consensus on how to solve the problem and implement solutions quickly, effectively and systematically across all countries unless the threat is imminent,” Raphael says, summing up the frustrating shape of things. This is why there is so much pressure on the participants of the upcoming COP 21 in Paris to deliver a strong enough framework so that governments can at least start to implement the necessary policies. Year 2015 is a self-imposed deadline. Coming on the heels of the dire warnings in the Intergovernmental Panel on Climate Change’s Fifth Assessment Report, it is hoped (feverishly) that this edition of the COP summit will pave the way for a global, legally binding treaty on reducing carbon emissions to limit the global temperature increase to 2 °C above pre-industrial levels, a historic first in over 20 years of UN climate negotiations. Enabling massive transformational shifts to low-carbon trajectories is one of the five critical results of the agreement, according to media reports. There is a spectrum of opinions on the outcome of the summit and energy companies, among Founder and CIO, Wermuth Asset Management many others, will be closely watching the proceedings. But Hobley says the outSocially Responsible Investor event last year. And Exxoncome of the deal wouldn’t affect the carbon bubble because Mobil’s statement makes it clear that, though the company it is no longer as dependent on a global deal and the 2C expects government constraints on use of carbon-based target as before. “We can highlight a number of examples energy sources and limits on greenhouse gas emissions in where there are already stranded assets for a range of reathe coming years, “the impact of these rising costs of regsons, without a global deal or carbon price. This has been ulations on the economy we expect will vary regionally accentuated by the oil price drop. US coal has also suffered throughout the world and will not rise to the level required due to cheap gas and mercury regulation, with no federal for the low-carbon scenario”. In fact, the company does not effort on carbon. Lack of water could be an issue in India even incorporate the “low-carbon scenario” in its capital and Australia which makes coal power generation unviable. allocation plans but “ensures investment selectivity under China is taking action on air quality and peaking coal use in a wide range of economic assumptions by maintaining a this five-year plan at around four billion tonnes, with major very diverse portfolio of oil and gas investment opportueffects on coal markets. And renewables are already achievnities”. This is very indicative of American companies that ing grid parity in some are hoping that if they sit tight and stay quiet, the problem markets – competition will go away. European companies, on the other hand, are is a key factor as much more active in defending the carbon bubble, talking alternatives become about addressing climate change and calling for carbon cheaper,” he says. price, according to Mills. “We should stop For all the alarming and very convincing data on climate

"While for certain investors it is possible simply to sell these assets in the market when they are listed assets, or to instruct funds they are invested in to sell within three years or to sell real assets gradually, this is not possible for the world’s largest pension funds such as Calpers (US) or AP4 (Sweden). Their approach is different because not everyone can divest when someone has to buy." Jochen Wermuth

48 > QATAR TODAY > AUGUST 2015

Carbon emissions under existing policies, new policies and 2C target policies IEA scenarios

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The current structure of the gas industry makes it less prone to wasting capital on projects that may not be needed in a lowdemand scenario. LNG plants are so capital-intensive that they are usually approved only once the majority of production has been contracted.

2°C (450 ppm)

just banging on a global deal and show how low-risk and low-cost renewables are becoming increasingly important for investors, whilst risks and costs for hydrocarbons are increasing. If everyone just sits around waiting for a global deal then they will miss these fundamental developments which are already creating stranded assets.” Wermuth concurs, elaborating on the two megatrends, independent of 2C policies, which are dampening the outlook for oil producing companies and countries. “Firstly, production continues to rise, but consumption is stagnating in Europe, North America and Japan, where half of global output is sold. Demand from China has also peaked. The recent crash in crude prices has not stimulated growth in demand. Secondly, renewable energy is getting considerably cheaper, and is challenging fossil fuels. Dubai set a new global benchmark last year, when ACWA Power and TSK successfully bid for Dubai Electricity and Water Authority (DEWA)’s 200 MW solar PV plant, offering $5.84 cents/kWh. That’s cheaper than power generated from oil at $10 per barrel,” he says. “Whether there is a binding agreement in Paris or not, the carbon bubble will burst, and the smart investor will get out before it does,” he says. A reprieve for Qatar Diversification is the only way forward for hydrocarbon nations; this is known. There are concerns that some governments in the region are not addressing this hard enough or transforming their economies fast enough. But Qatar might have a unique role to play in this shifting ecosystem. According to CTI, the current structure of the gas industry makes it less prone than oil or coal to wasting capital on projects that may not be needed in a low-demand scenario.

In particular LNG plants are so capital-intensive that they are usually approved only once the majority of production has been contracted. And the low proportion of gas listed on global exchanges reflects the concentration of reserves in Russia and the Middle East, where oligarchs and national oil companies are dominant. However, while indicating that there is room for some growth in gas supply in the next 20 years, the report warns that it won’t be as simple as expecting a coal-to-gas switch. The exact amount of growth in each region will depend on a range of factors like cheaper renewables, greater efficiency, new storage technologies, higher carbon prices, and relative commodity prices. But the gas outlook is largely optimistic. In assuring its investors, Shell highlighted how in 2013 the company for the first year produced more gas than oil and that their SEC-proven reserves are more than 50% gas. In Dr Crane’s opinion, natural gas has an even longer time horizon than oil as it is being used as a bridge fuel. “So I don’t see where climate change policies per se would affect investments in natural gas. Bottom line: climate policies are hitting coal hard, not so much oil, and natural gas has benefited from these policies and is likely to continue to do so,” he says. Not only can Qatar’s gas economy be relatively immune to the carbon bubble but Wermuth emphasises the positive potential impact that Qatar can have as a provider of the "transition fuel" for a 100% renewablepowered economy. “The potential write-off would also be less in the instance of a CO₂ emission carbon tax being effectively introduced,” he says AUGUST 2015 > 49

business > bottomline

The keys to

job satisfaction for a not-so-happy workforce

The days of simply punching a clock to put food on the table may be over as employee expectations transform, worldwide. It is therefore essential that companies learn and know how to treat employees and realise that a happier workforce will mean a productive and motivated company as a whole.

o gain real-time perspective into the everyday lives of Qatar employees, Bayt.com used the ‘Job Satisfaction in the Middle East and North Africa’ survey, April 2015, to collect data from professionals across the country. The survey asked respondents to describe the factors that affect their satisfaction and overall happiness at work. Bayt analysis revealed their inner work lives – the usually hidden perceptions, emotions and motivations that people experience as they react to and make sense of events in their workdays.

The results of the study were alarming. It showed that inner work life has a profound impact on employees’ creativity, productivity and commitment. Professionals are far more likely to enjoy the work they do when they feel happier. Our research has shown that employees in Qatar aren’t as satisfied as they should be. In fact, the Bayt.com ‘Job Satisfaction in the Middle East and North Africa’ survey shows that Qatar professionals now feel worse about their jobs – and work environments – than ever before. People of all ages, and across income levels, are unhappy with

their supervisors, apathetic about their organizations, and detached from what they do. The survey has also revealed that only four out of 10 respondents are satisfied with their current job. Many business owners in Qatar might think that employees need more money to be happy. With four in 10 professionals dissatisfied with their current pay, as per the Bayt.com Salary Survey 2015, that would make sense – although perhaps not necessarily. What companies need to do is to listen to the demands of a workforce

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burdened with an ever-increasing cost of living. It’s not too late to act, but business owners need to heed the warning, especially when 61% of those employees are willing – and actively trying – to change jobs, and 62% strongly believe that they could easily find a similar job in another organisation. Factors affecting job satisfaction Contrary to popular belief, the most important factor related to job satisfaction in Qatar is not money; it is learning and personal growth, according to 84% of respondents. This is followed by “pay” (81%), and “team spirit” (80%). Other important factors are ‘sense of achievement’ (78%), “doing what I love” (73%), and ‘flexibility’ (76%). Over 64% of respondents also believe that “contributing to the community” is a matter of importance. Overall, 36% are satisfied with their present job, with only 19% of them being “very” satisfied. Only a third (30%) see themselves working for the same company for the next two years, while 61% are actively trying to move to another organization. Sixty-two percent of respondents strongly believe that they could easily find a similar job in another organization. Unfortunately, only 32% believe that their company shows an interest in the wellbeing of its employees. Forty-six percent claim that they have a good worklife balance, while 27% believe the opposite. How to keep your employees happy and satisfied Do you want to keep a happy and loyal workforce? Then you might want to follow these five methods:

OFFER FLEXIBILITY Professionals in the Bayt.com ‘Employee Motivation in the MENA Workplace’ survey were quite clear about their priorities: they want a better work-life balance. Whether it is to spend more time with family and friends or on sports and learning pursuits, a good work-life balance is repeatedly identified as the top motivating factor at work in Qatar. This year, achieving a good work-life balance will possibly be as simple as altering working arrangements to enable more flexibility.

SHOW TRANSPARENCY A transparent work environment not only ensures that your employees stay motivated and put in their best in what they do, but it also attracts the best talent to your

organization. People want to work in an organization where they feel their opinion is valued, where their managers and peers are honest with them, and where they find consistency and stability. An easy way to keep the troops upbeat and motivated is to adopt an open-door policy in which communication with others is facilitated and encouraged.

OFFER MORE TRAINING PROGRAMMES The 35.6% of respondents in the Bayt.com ‘Skills and Hiring Trends in the MENA’ poll think that there is a skills gap in some areas in their company. For 29%, a solution to building necessary expertise is simply by increasing training investments. Fortunately, 73.1% of them believe that their company’s project investment in training will increase in 2015. Other suggestions to bridge the skills gap include redeploying employees to roles where their skills are most needed (22.1%).

GIVE HIGHER SALARIES The 55% of respondents in the 2015 Bayt. com MENA Salary Survey believe that salaries in Qatar are on the rise. This is considered to be due to inflation and the rising cost of living, as well as the economic growth some of these countries are witnessing, and pay rises in the public sector. Undoubtedly, employees feel short-changed, and with an increase in the cost of living and a presumption that other employers pay more, we may see significant churn over the next year as employers struggle to match employees' expectations and ensure parity and fairness in pay structures. Tools such as Bayt.com salaries have ensured that salary figures for different roles and industries in the region are widely available and can be shared and discussed openly.

SHOW APPRECIATION The importance of giving regular and constructive feedback to encourage, motivate and guide cannot be overemphasised. Companies should adopt a comprehensive firm-wide performance appraisal system for formal appraisals, and complement that with regular informal face-to-face meetings to discuss progress. Ultimately, your role as a manager or business owner is to help ensure that people are happy and engaged at work. As long as workers experience their job as meaningful, progress is often followed by joy, loyalty and excitement!

ABOUT BAYT.COM: Bayt.com is the #1 job site in the Middle East with more than 40,000 employers and over 20,750,000 registered job seekers from across the Middle East, North Africa and the globe, representing all industries, nationalities and career levels. Post a job or find jobs on www.bayt.com today and access the leading resource for job seekers and employers in the region. QATAR TODAY > AUGUST 2015 > 51

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business > bottomline

Myth busting

“Let’s launch an engagement survey to increase engagement”

More important than engagement surveys are the steps taken based on the results of such surveys.

mployee engagement is high on the agenda for HR Directors across Qatar and the Middle East, particularly now we are seeing more visible links between increased levels of engagement and business performance. As we see a rise in the number of engagement surveys conducted, we have started to see a pattern emerge which has reemphasised the importance of carrying out the engagement cycle from start to finish, in particular, the vital steps post-survey. A recent event particularly stood out for us. One of our clients asked us to re-conduct their engagement survey. We were delighted and we started our preparations. We looked back on engagement results from previous years and, to our dismay, noted that the data showed a consistent decline in engagement levels throughout the organisation. There had been no major organisational changes, no significant leadership shifts, and no changes to performance management or

rewards systems over the past three years. After further discussions with the client, we realised that post survey, nothing much was done with the results. By the second and third year, irritated employees started commenting that “management must take action based on the survey results” and “clearly communicate its plans”. There lay the vital clues. We consulted Aon Hewitt’s global database to compare engagement levels of organisations that had taken action post survey against those who had not. The analysis showed that among those organisations who had conducted action planning and taken action based on the survey results, the engagement score rose by an average of 30%. In contrast, those who had undertaken no planning and no systematic action saw engagement levels decline by an average of 6%. What seemed like a logical next step to the survey was disregarded and resulted in a significant impact. There is now clear evidence that

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Leaders in organisations genuinely want to know about employee engagement levels. Some are convinced about the linkage between employee engagement and business performance. the very act of surveying employees raises their expectation that action will be taken and changes to improve the status quo will be introduced. When no action is taken, disappointment prevails and leadership is thrust into an unfavourable light. What keeps organisations from taking action on engagement? In our experience, leaders in organisations genuinely want to know about employee engagement levels. Some are convinced about the linkage between employee engagement and business performance. For example, according to research carried out in our global engagement database, a 1% increase in engagement shows a 5% increase in operating income margin. However, others are yet to sign up to the engagement-performance relationship, yet feel that taking the employee pulse will lead to a healthier organisation. Organisations invest a lot of effort in customising and rolling out surveys, making sure they are accessible to all employees, driving the response rate and so on, but once the results land on their desks, there is a formidable hill to climb to take the necessary action. Best practice – addressing the results of employee engagement surveys In our experience of conducting employee engagement surveys across the world, we have found definite pointers to best practice.

ENGAGEMENT INTEGRATED WITHIN BUSINESS STRATEGY Senior leaders are energitically involved in developing and implementing a long-term approach to employee engagement.

TARGETED ACTIONS Investment in raising engagement is based on a good understanding of its drivers and root causes.

COMMITMENT AND ACCOUNTABILITY Accountability for raising employee engagement is shared between leaders, managers and HR.

In the region, and in Qatar more specifically, findings from our regional research Qudurat also point towards the

need to involve organizational leadership to enhance the communication and planning around engagement. The direct manager also emerges as integral to any efforts planned in increasing engagement results. Moreover, organisations are increasingly prepared to take targeted actions towards enhancing engagement levels for emerging demographic groups such as youth and women as well as national Qatari talent. So before starting your next cycle of engagement measurement, consider the following: Build senior leadership commitment first. Engagement survey results help create a baseline and the starting point to measure and improve employee engagement. However, before embarking on your next engagement survey, find out whether there is enough senior leadership commitment to follow through with an action plan. Discuss the benefits and the risks with key members of the leadership team and then decide whether to take the plunge into the engagement survey process. Prepare for results and communicate next steps. When reviewing engagement survey results, be open to potential criticism and don’t ignore issues that may seem too difficult to solve. But on the other hand, don’t overcommit; be realistic about what can be achieved. And most importantly, once a plan has been finalized, communicate it effectively so you are managing employee expectations. Understand the trends affecting your talent strategy. In addition to the survey results, consider external factors and business objectives when formulating your action plan. In the region, we find that demographic changes such as increasing entry of millennials and women in the workforce have long-term impact on talent strategies. Further, increasing legislative and policy focus on nationalization has led to focused actions on engaging Qatari talent. It is absolutely critical for leaders to connect economic challenges and emerging business imperatives to the workforce profile required for future success

BY DR MARKUS WIESNER Chief Executive Officer Aon Hewitt Middle East and Africa

How are organisations attracting and engaging talent in view of the region’s demographic, legislative and social changes? Participate in Qudurat Wave III, the largest study of its kind dedicated to understanding the region's current and future workforce. The study will provide insights into: How Qatari organisations are attracting, retaining, developing and engaging nationals Factors that influence candidates' job choices, perceptions of their work environment and attitudes to diversity Students' perceptions of job opportunities and factors influencing career decision making Participating is free and easy. All participating organisations get a complimentary detailed report. To find out more visit www.aonhewittme/qudurat

ABOUT AON HEWITT Aon Hewitt is a global leader in human resource solutions. For more information, please visit www.aon.com/middle-east

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development > tag this

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Brand Qatar:

Does it need saving?

For those inside Qatar, it might seem the forces that be are under-reacting to the battering the country has been receiving in the Western media. But are we too close to the scene to have a balanced perspective? Is Brand Qatar really in jeopardy? Qatar Today finds out. By Ayswarya Murthy

t Qatar Today, we had planned a regular feature where we tracked coverage about Qatar in the foreign press. After a couple of months we had to shelve it because it seemed that, while there was incessant chatter online about the country, it was largely negative and repetitive. It was disheartening that, while every month we were writing about Qatar’s broad and far-reaching ambitions in sectors as varied as genome research, connected cars, carbon storage and sports analytics, all that the world was seeing was the country's faults, jarring and amplified. Qatar desperately needed a public image makeover. But maybe we are too close to the picture. José Torres is the CEO of Bloom Consulting, a 12-year-old agency specialised in nation and place branding, that works with government agencies to “develop their brands and use it as an asset to reach economic and social goals”. He calls Qatar living proof of good nation branding. “The work that is being done by Qatar and its neighbours like the UAE to promote their country brand is fantastic.” And when a good branding has been established, it is not easy to destroy. “Right now, I think it’s more of a national issue; those in the country are concerned but the effects have really been minimal.” Making friends in the media A step in this direction is probably the newly formed Government Communications Office that works directly under the Prime Minister’s Office. In June, the appointment of Sheikh Saif bin Ahmed bin Saif Al Thani as the Director of the Government

Communications Office was announced. The Wall Street Journal reported that the new agency, tasked with crafting the country’s image abroad, was staffed with Qatari communications graduates, mostly from the local campuses of US universities: Northwestern and Georgetown. “We are working towards having a more open policy when it comes to communications,” the newspaper quoted an anonymous communications official. “This is part of Qatar’s wider strategy to share our plans and our vision for the future.” The Editor-in-Chief at the local English daily, The Peninsula, Khaled Al Jaber (who also teaches a course on international media and political communication at Qatar University’s Gulf Studies Center) is optimistic about the role this new entity will play in shaping Qatar’s image. “Even in this short time we can see how the office works with international media to explain what is going on in the country in the spheres of politics and development. They invite foreign journalists to give them direct access and also respond to stories that appear in foreign publications.” In the past few weeks, we have seen the office issue timely and pertinent statements with regards to the updates on the legislative process behind changing the kafala system, the arrest of a BBC journalist in Qatar, The Washington Post’s distorted claims of migrant worker deaths on World Cup construction sites and, very recently, the false claims of the Chattanooga gunman’s visit to Qatar. This, from a journalist’s point of view, is a vast improvement on the government’s hitherto policy of stoic silence. Al Jaber also says there is better partnership now between the government and the local media. “The Qatar News Agency is attempting better interaction with journalists which we have been asking for a while now. The national media authority, Hayat Al Alam, has also started to regularly host conferences that bring together television, newspaper and radio journalists where we discuss issues QATAR TODAY > AUGUST 2015 > 55

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development > tag this related to the coverage of politics, economy and society. This has resulted in the local media tackling, without judgment and bias, sensitive stories related to politics, both regional and local, social issues like women’s rights, etc.” This opening up to the media – both locally and abroad – will give audiences more avenues to get to know about Qatar through different media channels that cater to wide range of people.

“Qatar is living proof of good nation branding. And when a good branding has been established, it is not easy to destroy.” José Torres Chief Executive Officer Bloom Consulting

The broader agenda But the media is only one of the pillars that prop up a country’s brand. According to Torres, perception is built in different ways. “Word of mouth, i.e hearing about a place from someone who has been there, is of course very influential. Second is the media coverage – everything you read and hear online or on TV – which can often be nil or superficial or, worse still, clichéd. Then, very importantly, comes the brand touch points – flagship brands, products and people associated with the country. Qatar Airways is a great example of a brand that can be an ambassador of the country. Every time you fly in one of their aircraft and pass through the airport, you go "wow" and without even entering the country, your perception of the country increases positively. Finally of course, is the impression the country makes on you when you visit. It’s the most 'real' and direct method to build a brand.” The effect of all these factors on Qatar can be observed in the short time that it has taken the country to rise from obscurity to the global stage, and the various bumps along the way. It had the advantage of starting with a clean slate, almost like a new country was born in people’s consciousness. “The world started noticing Qatar in 1995 thanks to efforts of HH the Father Emir, Sheikh Hamad bin Khalifa Al Thani. His actions gave the country a huge boost in the areas of sports, economy, social life and media. Al Jazeera, for example, was praised for presenting the Arab side of the story. And for the same reason, it was vilified, especially in the US, during the wars in Iraq and Afghanistan,” he says. Conversely, Qatar’s profile was greatly raised when the world recognised this small, fast-growing country which now has the highest per capita income in the world, shaping the geopolitics of the region. Our diplomatic missions played a big role in shaping our image and presented Qatar as a moderate voice

whose focus on stability and building relationships was reflected in its involvement in resolving many long-standing conflicts.” But Qatar’s greatest challenge yet came in the shape of the FIFA World Cup. “The stir caused in the media by the fact that a small country like Qatar came out on top against giants like the US played out through the allegations of bribery (which is a FIFA issue and is bigger than Qatar) and the deep focus on the labour situation (which, again, is a pan-GCC issue, more the result of the private sector’s misuse of authority than any government role),” he says. “And once again, beyond just contesting misleading media stories, what will change this image will be government action on addressing issues of human trafficking, abuse, creating awareness and changing habits, all the while remaining focused on the clear targets it has laid out for itself,” he says. With this broad agenda in place, Al Jaber is positive not only a change in Qatar’s image, but about it becoming a role model in the region. “The region’s image is tied up with militancy and we need another positive image. Not just us, but the whole GCC and the Arab countries. And I believe the World Cup will be a turning point in this, helping us connect with the rest of the world through a sport that is close to everyone’s heart.” Score for Qatar By staying clear of the quagmire of violence the region currently finds itself in, Qatar is already adding many brownie points to its perception meter. “It is a great sign that Qatar hasn’t been contaminated by other problems in the Middle East. Through a comparable level of progress and growth as similarly uncontaminated global cities like Dubai and Abu Dhabi, Doha has come to be automatically associated on the same wavelength as them. This is evidenced by the increase in Qatar’s tourism index,” Torres says. Brand Finance, in its 2014 Nation Brands report, said that this has also helped lessen the effects of the media scrutiny that comes naturally with the hosting of a large event like the World Cup. “Russia and Qatar’s bids for the next two World Cup tournaments have seen both countries accused of cronyism and corruption as well as an intensified criticism of their social policies, attitude to sexual minorities and political entanglements,” it

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said. But Qatar had weathered this storm well. “The reputational issues mentioned above, while significant, have by no means overwhelmed the country. For the region it is particularly stable and has been afflicted by neither civil war, nor conflict in neighbouring states; a rarity in today’s Middle East. Home-grown brands such as Ooredoo are flourishing internationally, laying the foundations for success beyond the era of liquefied natural gas.” Torres also mentions that the media spotlight that had negatively affected Russia, China and Brazil prior to their hosting of mega events, is not comparable in magnitude or volume to what Qatar is facing. “Qatar does not have a perception of ill will and corruption, like Brazil, where the images of protests on the streets stayed in people’s mind. At the end of the day, all countries have problems - be it violence, social disparity or human rights. So I don’t think negative connotations are what come to the public’s mind when thinking of Qatar. Yes, there was a critical moment when it seemed like the brand was in distress but it is still considered an isolated case,” he says. Which is why Qatar has to address many of the issues that have come to light before they become irrevocably associated with the country’s narrative and the ill will mounts. The proof is in the numbers Brand Qatar’s performance can and is measured by hard data. Brand Finance’s report mentions that Qatar's brand value was 39% (from $184 billion to $256 billion) since last year, making Qatar 2014’s fastest mover. Notably, there was an increase in its Branding Strength Index in the category of People and Skills which means that the brand helped the country to “both keep their skilled citizens, avoiding ‘brain drain’, as well as attract talent internationally”. “Communicating and developing opportunities for both internal and external talent within a nation can improve innovation and the quality of production. Once established, the nation brand also allows for the recruitment of specific skills and experiences needed by a country,” the report said. Meanwhile, Bloom Consulting also brings out annual country brand rankings focused on tourism and trade. “We take into consideration five dimensions – tourism, trade, exports, talent and national prominence – where nation branding has

the most direct impact, thus helping us measure how the perceptions of the brand impact the country economically in trade and tourism." Soon, Bloom will also be launching a digital country index, which measures the brand appeal of a country in the digital world by determining how much and what people are searching about the country online. In Bloom's 2014 Country Brand Ranking, while Qatar climbed five positions in tourism in Asia, while it also fell five positions in trade.” Torres says the downward slide in trade is not the result of the World Cup-related scandals because the data analysed go back four years. “The scandals are more recent and might or might not negatively influence the ranking in the future,” he says. This depends on prolonged and repetitive exposure. People forget quickly so volume and frequency play an important role in turning the tide towards a bad reputation. “So the effect of the World Cup related scandals on the nation’s brand might not be felt for another couple of years and that’ll depend on the continuation of scandals and bad publicity.” The route to avoiding this involves good governance and a measured, well-managed and regularly monitored nation branding campaign. “I stand by my statement that Qatar is a great example of Country Branding. Thanks to its actions, activities and policies, the country has established a great international perception. Now that Qatar has established this perception, my recommendation would be for Qatar to question and monitor whether its 'equity' is in decline, stable or whether it is still growing. In other words, I would run a professional analysis to make an evaluation and an assessment of potential scenarios of the Qatar brand in the future, and assess how well prepared current institutions are to deal with these potential scenarios. I would also initiate a project to establish certain goals and milestones for the Qatar Brand in the next 5, 10 and 20 years,” advises Torres. “Great country brands, like Finland and Sweden, are the ones who don’t just sit back and enjoy their current good reputation but continually work towards improving on them. This has to be the case with Qatar – you cannot relax. You always have to be asking: What is the next step?” Ultimately, branding is just a way to answer the fundamental question – what does Qatar want for itself?

“Beyond just contesting misleading media stories, what will change Qatar's image is government action on addressing some of the highlighted issues, all the while remaining focused on the clear targets it has laid out for itself.” Dr Khaled Al Jaber Editor-in-Chief The Peninsula

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automotive > tag this

The age of automotive hacking is here

And it will continue as we aspire to remain connected. By Sindhu Nair

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automotive > tag this

A “With increased connectivity, it is natural that there are increased threats and with the customers rising expectations for more such advanced vehicles, the risks are only going to multiply.” Jon Allen Principal Booz Allen and Hamilton

scene from a Hollywood flick: the antihero sits on a garden seat, jabs on his laptop and soon the protagonist’s car cruising past turns off the road abruptly (as the air bag gets activated remotely) and crashes into the woods, off the path. As the hero lies unconscious, the antagonist reaches inside the car, picks up the suitcase which was a central piece of evidence and walks away casually. Welcome to the age of car hacking. But the big news is that this is no longer a Hollywood plot. A similar, if not so vicious, scene was enacted by two security researchers, Charlie Miller and Chris Valasek, who can be called “good guys of the internet” last month during a demonstration at the Wired offices. They wirelessly hacked a Jeep Cherokee that was being driven by Andy Greenberg from Wired, taking over dashboard functions, steering, transmission and brakes. Result: Chrysler last month announced a formal recall of 1.4 million vehicles that may be affected by hackable software vulnerability in its Uconnect communication system. The recall involves just a rehaul or an upgrade of the software which can even be executed by the owner himself. But that is surely not the end of the hacked cars story. It is just the beginning of what could happen to the new-generation cars connected to the internet and hence are potentially hackable. Miller and Valasek remotely accessed Greenberg’s Jeep Cherokee to demonstrate the potential dangers that the highly interconnected cars of the new age possess.

While this was supposed to have affected only cars in the US, what does it say about potentially hackable cars in the Middle East? What defences do cars have against these latent threats? The Jeep Cherokee dealers in Qatar, United Cars AlMana, commented that the hacking incident does not affect Middle East vehicles since it was through the satellite radio system in the US which is not activated here. How about the fact that anything that communicates with remote networks is potentially vulnerable and non-existent data security only makes a network more attractive for attackers? Think of GPS navigation, wireless locking systems, connectivity to another device, and the most frightening thought is that, while the choices of connectivity that the new gen cars offer are increasing, the same diligence is not being preserved to keep these devices safe. Jon Allen, Principal at Booz Allen and Hamilton, believes that the Middle East customers are at equal risk: “With increased connectivity, it is natural that there are increased threats and with the customers' rising expectations for more such advanced vehicles, the risks are only going to multiply”. Imagine the Middle Eastern passion and love for cars and connectivity and the days are numbered when the consumer here will demand more of both. “There are very high chances that the full version of what we mean by connected cars will be a reality and it could even be pioneered here in the Middle East,” says Allen. With the popularity of the Internet of Things and with 4.9 billion connected things predicted to be in use in 2015, up

Part of the process

For Dr Hamid Menouar, who heads the Connected Cars research at Qatar Mobility Innovations Center, the Jeep hack is not surprising. “It’s a highly expected turn of events as the technology is not mature yet. Connecting cars to the internet is still quite new and we are still in the phase of accumulating experience. We had similar troubles when we first started connecting phones to the internet, if you remember. Years of research and experience have helped us make the mobile phone safe and that’s what will happen with our cars as well,” he says. Interestingly, the news hasn’t caused as much of a stir at QMIC as it has in the outside world. “For us, this doesn’t affect the status of things. We consider this very normal in the cycle of a new technology. And people like the two researchers who hacked into the Jeep will help us continually find gaps in the security system. It’s an integral part of the quality assurance cycle to test for and fix problems.”

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30% from 2014 and estimated to reach 25 billion by 2020 (figures by Gartner Inc), the possibility of its disruptive impact is a reality. The automotive sector will show the highest growth rate at 96% in 2015, says the same report. “The proliferation of IoT devices also dramatically increases the attack surface and creates attractive new targets for malicious threats,” says Allen. “The digital shift instigated by the Nexus of Forces (cloud, mobile, social and information), and boosted by IoT, threatens many existing businesses. They have no choice but to pursue IoT, like they’ve done with the consumerisation of IT,” says Jim Tully, vice president and distinguished analyst at Gartner. Two US senators have already taken note and are working on legislation. Ed Markey and Richard Blumenthal are trying to introduce new legislation that’s designed to require cars sold in the US to meet certain standards against digital attacks and privacy. An investigation by Markey in February 2015 found that nearly 100% of new cars on the US market today may be vulnerable to security and privacy violations, and automakers have done little to prevent them. In order to understand the ability of automobile companies to protect the safety and privacy of drivers, letters were sent from Markey’s office to 20 major automobile manufacturers with questions regarding technology, security precautions, and privacy policies. Responses were received from 16 manufacturers, while Tesla Motors, Aston Martin, and Lamborghini did not respond to the letters. Volkswagen and Audi responded with a single letter and are together treated in the findings as a single responding manufacturer. Some manufacturers (notably Hyundai and Toyota) provided detailed, question-by-question responses, while others (notably Mercedes-Benz and Porsche) wrote generic statements on their commitments to security and privacy that were non-responsive to the questions that were posed. But that does not prove that the automotive sector is not concerned. “The matter is much more complicated, the majors will not be directly aware of the malfunctions of the devices within the automotive industry,” says Allen. “There is a supply chain progression within the sector which makes it very difficult to go down the levels and understand where it originates.” Allen says that the automotive industry

has taken note and is already working on the issue with automakers and government and is currently working on security systems and tests. The National Highway Traffic Safety Administration is involved and legislation will have to be put in place but what is heartening is that the industry has agreed to share information, just as the retail and oil and natural gas industries have done, and the industry is moving to create an Auto ISAC (Information Sharing and Analysis Centre) to address information security issues, and the fact that they have decided to do so before any major hacks is an encouraging step in mitigating such threats. Another is ensuring directors and officers are appropriately educated regarding information security risks, says Allen. He has his three-point recovery system in place that he wants the automotive industry to follow: “One is to manage the risk, and contain it. Second is to provide a framework on how to handle the risk, if and when it happens, as it does take some time to figure out how many vehicles are affected or if it just a single threat. To understand, and then recover it. Thirdly, to go down the supply chain, however tedious that might be, and to single out the issue and clog it at that point to avoid it mounting to a bigger concern.” So as we move on to an era when your vehicle will direct you to the grocery store and remind you (as it is connected to your supercool and connected refrigerator) to pick up milk for the day, we also move on to an era where a faceless predator would be tracking this very routine and planning to intrude... Scary and true. Allen interrupts my horror rumination and says, “As the cars get connected so will there be devices to make sure that they are secure. The market for security devices within the cars will also grow as the opportunities are vast.” “Soon there will be options with which a customer can decide on the level of privacy he requires in a car,” adds Allen. “He can have an option to turn the connectivity off and thereby lose capability or be connected and be a potential target.” In the end, it is not about the success or failure of technology but how it affects us. As Allen puts it, “The concept of the Internet of Things is useful but ultimately limited, because it fails to place the citizen, the consumer, the human at its centre. The Connected Society is not about how things will connect with each other; it is about how we will live”

Security researchers Charlie Miller and Chris Valasek wirelessly hacked a Jeep Cherokee, taking over dashboard functions, steering, transmission and brakes. PICTURE COURTESY: WIRED

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affairs > tech talk

HELLO, PLUTO Almost a decade after it was launched, New Horizons sent back the first high-resolution images of Pluto and its largest moon, Charon.

he piano-sized space probe, New Horizons, blasted through the Pluto system at around 51,000 kilometres per hour on July 14, to capture the first images of the dwarf planet from a distance of 12,500 km from its surface. Launched in January 2006, the probe has travelled over 4 billion km to the farthest reaches of the Solar System to capture as much scientific data as possible of Pluto and its five known moons

before moving further outwards through the Kuiper belt. Instruments onboard took spectra images, sampled dust and space plasma and directly probed the primitive atmospheres of Pluto and Charon. Chasms, mountain ranges, a huge rift valley were detected on Charon in addition to copious amounts of methane frosting and water ice, and this is only the first of 16 months of data being sent back to Earth.

THE MONEYPENNY TO YOUR BOND Facebook Messenger is reportedly testing its own digital personal assistant, codenamed “Moneypenny”, which will aid users in the research and buying of products. Facebook declined to comment on the rumours.

THE MAIDEN TEST SITE The University of Michigan opened Mcity, the world’s first controlled environment designed to test connected and automated cars.

he 32-acre playground, a world first, was designed and developed by the university’s Mobility Transformation Center, a public-private partnership among industry, government, and academia, which aims at putting connected, automated, and driverless vehicles on Ann Arbor roads by 2021. Real-life simulations allow vehicles to navigate urban and suburban roads, with intersections, traffic signs and signals, street lights, building facades, pavements, and construction. About $10 million has already been invested in the test facility, and the centre is also working with 15 other companies, each of which will invest $1 million over three years.

RIP SATORU IWATA Nintendo president Satoru Iwata passed away at the age of 55 due to a tumour, according to a statement from the company.

wata had been with Nintendo since the 1980s, when he worked as a programmer. He was named director in 2000 and president in 2002, the first non-family member to take up the post in the company’s history.

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THE BEGINNING OF THE END OF PCS?

TWITTER TROUBLE

Technology research firms Gartner and IDC have reported a steep, historic decline in shipments of personal computers in the second quarter of 2015: 9.5% and 11.8%, respectively.

Turkey’s obsessive need to control social media never ends.

verall, both companies believe that the PC sales will be off around 5-6% percent in 2015, with no real future growth. PC sales, which in their

heyday, peaked at around 400 million per year, now hover around 285-295 million at best. Meanwhile, only Apple’s PC sales grew, by around 16%.

GCC OPEN DATA BAROMETER RANKINGS 2014 RESULTS AND RANKINGS

UAE

BAHRAIN

RANK: 52 READINESS: 63 IMPLEMENTATION: 22 IMPACT: 8

RANK: 61 READINESS: 43 IMPLEMENTATION: 13 IMPACT: 0

KSA

QATAR

RANK: 59 READINESS: 38 IMPLEMENTATION: 15 IMPACT: 0

RANK: 64 READINESS: 46 IMPLEMENTATION: 9 IMPACT: 0

Source: Open Data Barometer Report, World Wide Web Foundation and UK Open Data Institute196

ON THE HIGHEST MOUNTAIN Soon, adventurers visiting Mount Fuji in Japan won’t have to miss out on one comfort of home: Wi-Fi. Japan’s biggest mobile phone operator, NTT DoCoMo, announced it is teaming up with local prefectures to launch free Wi-Fi on Japan’s highest mountain. The company is setting up service at eight hotspots around the active volcano, including several popular trailheads as well as the 12,380-foot-high summit.

t blocked access to Twitter in an effort to curtail the spread of images of a bombing that killed 32 people last month. The move came after a court ruling that called for graphic footage of the incident to be banned across social media and broadcast networks. The court added that websites that do not comply must be blocked. Authorities lifted the ban a few days later, after Twitter complied. The Associated Press reports that the government also looked to quell online calls for protests over its failure to prevent the bombing. Even before this event, the country’s efforts to curtail Twitter outstripped that of Russia many times over.

TURKISH AUTHORITIES MOST CONTROLLING OF TWITTER CONTENT TWITTER CONTENT REMOVAL REQUESTS MADE BY GOVERNMENT & LAW ENFORCEMENT AGENCIES*

477

TURKEY RUSSIA

GERMANY

43 35

FRANCE UNITED STATES BRAZIL

32 27

JAPAN

INDIA

OTHERS

July 1 - December 31, 2014

Total number of removal requests 796 % of requests granted by Twitter 13 Number of tweets withheld 1982 Source: Twitter

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business > auto news Hyundai Motor Company is celebrating the 30th anniversary this year of one of its bestselling models, the Sonata mid-size sedan.

THE SONATA TIMELINE 1985

1988

APRIL, 2015

Sonata made its debut in Korea and has since played a pivotal role in Hyundai’s growth and reputation.

Sonate is launched in Middle East and Africa.

Registered sales of some 314,181 units in this region alone. In total, it has recorded sales of over 7.3 million units globally.

NISSAN WANTS TO BE SUSTAINABLE Nissan Motor Co. issued its Sustainability Report 2015 to convey its efforts to create economic value and develop a sustainable society through its business activities.

he report includes the Nissan CSR Scorecard, which analyses the progress made on annual objectives and describes the specific activities in each area. In addition, the report includes a new chapter titled “Working toward a Sustainable Mobility Society”, describing Nissan’s comprehensive efforts to eliminate vehicular emissions and end avoidable deaths and injuries on roads and highways, which are guided by a vision of the future where zero-emissions and zero-fatalities are a reality. Nissan President and CEO Carlos Ghosn said in the report: “We want to be the auto industry’s most socially and environmentally responsible manufacturer. Whether we are working to address climate change, rapid urbanisation, transportation for aging populations and vehicle safety, Nissan is committed to identifying the solutions we need.”

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BMW ON AN UPWARD TRAJECTORY Middle East sales for the BMW Group continue to go from strength to strength, with the company posting a 6% increase across the region for the first half of this year, a growth which has been achieved in spite of the increasingly volatile market environment in several countries over the past months.

aving delivered a total of 16,706 BMW and MINI vehicles to customers in 12 markets, BMW Group Middle East has its sights set on yet another successful year. The UAE remained the largest market, according to BMW officials, accounting for 59% of BMW Group Middle East’s total sales. Abu Dhabi was once again the biggest seller with 6,962 cars sold, followed by Dubai, Sharjah and the Northern Emirates with 2,934, and Saudi Arabia with 2,243. Markets that maintained strong sales growth included Lebanon, increasing by 57%, Oman by 29% and Jordan by 18%. The strong half-year performance was a result of the company’s top-of-the-range models that continue to be best-sellers across the region. The X model family, for example, performed well thanks to a young model portfolio following the arrival of a number of latest-generation models. As a result, the X model range accounted for 55% of the overall Middle East sales, with the BMW X5 alone selling 5,288 cars, an

impressive 109% increase, and the BMW X6 selling 2,321. Meanwhile, the BMW 5 Series was also a strong contributor to BMW Group Middle East’s half-year results, with 2,111 cars sold, cementing its position as the leader in the executive car segment. Additionally, the MINI brand has also seen substantial growth with a 13% increase on last year’s figures, selling a total of 839 cars across all regional markets. The MINI 3-Door Hatch, which arrived last year, was the most popular model, leading the sales across eight markets. Dubai reported a 35% increase in MINI volume sales, while Lebanon experienced a staggering 51% increase in year-on-year sales of the MINI range. Ahead of the launch of the all-new BMW 7 Series, the company also revealed that the 7 Series remains among its best-sellers with 1,384 cars sold, accounting for 8% of total sales – retaining the Middle East’s position as the third largest market for the BMW 7 Series worldwide.

“Ensuring our brand is always in the lead entails hard work, planning and continuous investment.” Dirk Fetzer, Director Sales and Marketing at Daimler Middle East & Levant, on winning a special award for being the region’s leading contributor to Public Relations and Brand Communications excellence and innovation at the second annual edition of the Arab Luxury World conference.

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business > marketwatch An exclusive addition to its suite of hair and beauty outlets, AND Trading opens its doors to The Barbershop, a firstof-its-kind salon for men in Qatar.

NEW SALON FOR MEN IN QATAR

atering exclusively to gentlemen in Doha, The Barbershop at the Four Seasons Hotel creates a modern and relaxed environment for the “ultimate male salon experience”. With skilled and experienced staff and an international range of products, clients are offered an array of full grooming services – from hair, nail treatments and pedicure to threading, shaving and waxing. The salon also features exquisite European-inspired

interiors designed by Nacho Álvarez, Design & Creative Director at Mirabello. “We’ve paid special attention to every detail of our new shop’s design with the aim of providing not just an exclusive retreat for Doha’s gentlemen to get pampered, but a unique experience for all our clients that, we’re sure, will have them visiting us over and over again,” says AND Trading General Manager, Mariam Trad. The salon will be open seven days a week from 9 a.m. to 9 p.m.

A SWEET CONNECTION The first and only producer of camel milk chocolate in the world, Al Nassma brings its full range of artisan chocolates and pralines to the Knightsbridge-based store, Harrods.

eadquartered in Dubai, this chocolate company has recently partnered with its premium brand collection and will now be available at the iconic London departmental store, Harrods. Established in 2008, Al Nassma took four years of intensive research and development to bring to the market its unique collection of chocolates and sweet treats which are sold in a limited number of international locations. “Harrods is a name that resonates with lovers of luxury around the world, and its London flagship is a repository for innovation and exclusivity. As an exclusive product conceptualised

and produced in the United Arab Emirates, it has rapidly gained global consumer appreciation. We feel that the exotic appeal, recognised quality and high-end positioning of the Al Nassma brand will be well received by Harrods customers,” said Martin van Almsick, General Manager, Al Nassma Chocolate LLC. The commitment to deliver a luxurious halal-approved range made with all-natural, artificial additivefree ingredients and the niche availability of the brand, makes them highly successful. The Al Nassma collection will be available at Harrods flagship London store from midJuly 2015.

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NEW DAMAS STORE AT BARWA CITY Jewellery and watch retailer Damas announced the opening of its new Damas Collections store in Lulu Hypermarket at Barwa City.

naugurated by Kevin Ryan, Retail Director of Damas, this opening takes the brand’s total number of outlets in the country to 20. The store showcases novel and signature designs from well-known and treasured Damas brands such as Farfasha, Legacy, Spring, Hayati, Mystique and more. Commenting on the occasion, Ryan said: “Doha is one of the most important markets for Damas. Our clients in the country are well informed and have a fine eye for jewellery and diamonds. And the latest outlet at the Lulu Hypermarket in Barwa City articulates the brand’s global strategy and direction to offer discerning jewellery enthusiasts exclusive in-house collections and select international brands.”

CENTREPOINT CELEBRATES GOING BACK TO SCHOOL The retailer has launched its fun and practical backto-school collection to add excitement to the start of a new academic year.

entrepoint is offering the widest range of licensed character merchandise in the market that includes everything from school bags and water bottles to stationery pouches and lunch boxes. The exclusive range of Shaun the Sheep, Trash Pack, Ben 10, Spiderman and Minions back-to-school merchandise promises to win the interest of the boys, followed closely by the likes of Disney’s Cars, Avengers, Smurfs, Mickey Mouse, Smurfs, etc. Young football fans can also pick from exciting FC Barcelona, Real Madrid and Manchester United-themed school gear. Favourites such as Disney Princess, Hello Kitty, Barbie, Dora the Explorer, Marie the Cat, Lulu Caty, Minnie, Frozen, and Inside Out are part of the colourful and trendy line-up for girls. The store is also offering a full range of books, note pads, pencils, mugs, back packs, pencil cases and many more items based on famous characters like Hello Kitty, Batman, Barbie, Superman and Supergirl Neon capsule collections.

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business > marketwatch

INTRODUCING THE “SUPERSHELL”

ebuting with the “Artwork” Collection, Supershell brings art and creativity to the Superstar like never before. The Supershell project sees Pharrell collaborate with friends and creatives from around the world to completely reinvent the shoe’s toe. The collection features works by NYC contemporary artist Todd James, British-Iraqi architect Zaha Hadid, American photographer-director Cass Bird and Japanese contemporary artist Mr. who have added their own touches

After captivating the world with their ground breaking Supercolor release in April, Pharrell Williams and Adidas Originals are back for Fall/Winter 2015 with Supershell.

to specially-molded 3D Shell toe designs. These are then joined by six of Pharrell’s very own artworks that explore life force and energy and its relationship with colour. With a limited release of exclusive artworks for different regions around the globe, the footwear is offered in black and white. In addition to the concept, the left and right shoe features a different graphic treatment allowing endless possibilities for them to be mixed and matched. The collection is set for release on August 7.

ZENITH TURNS 150 Carrying on the tradition of classic elegance in chronographs with movements synonymous with harmony and precision, the revolutionary Swiss watch manufacturer Zenith celebrates 150 years of success and innovation in horology.

orn as a product of the passion and vision of Georges Favre-Jacot, Zenith revolutionised watchmaking by bringing together a number of independent artisans under one roof. The Zenith Manufacture was equipped with the most modern machines and began crafting movements of unprecedented complexity and precision. The watches made have consistently defied the laws of technology and earned Zenith more awards than any other watchmaker. Some of their technical feats include the first wristwatch, the first chronograph with an accuracy of 1/10th of a second, a dry lubrication system to ensure the long-term stability of mechanisms and, more recently, the Academy Christophe Columb Hurricane, which neutralizes the effects of gravity on the watch mechanism. Inspired by a unique entrepreneurial spirit, the brand has remained on the cusp of innovation and today continues to push boundaries in the art of watchmaking.

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culture > doha diary

MOVING INTO MSHEIREB DOWNTOWN Msheireb announced its first tenant in the commercial district the non-profit International Center for Sport Security.

HE SHEIKHA HANADI’S NEW ROLE

F I

nternational Center for Sport Security (ICSS) has signed up to take nearly 4,000 square metres of low and mediumrise office space across five floors in the project’s Al Baraha district. The building that will house ICSS’s new international headquarters consists of 3,939 sq.m. of open, energy-efficient, modern office space. As such, it is ideally located and

designed to serve as a standalone corporate headquarters, according to a statement released by the developer. Msheireb has stated that its tenants will be fully supported by a range of hospitality, retail, residential and civic offerings on their doorstep. They will also have easy access to a state-of-theart transport system providing connections with the rest of Doha.

ollowing the appointment of HE Sheikha Hanadi bint Nasser Al Thani, Founder and Chairperson of Amwal, as a member of the Pearl Initiative Board of Governors, she announced the hosting of a roundtable event in Doha later this year which will focus on “Women’s Careers in the GCC – The CEO Agenda”, a breakthrough report conducted by the non-profit Pearl Initiative, which establishes a strong overview of the role of women in the region’s workforce and highlights the key steps that should be taken by business leaders in order to drive gender inclusiveness at senior levels in organisations.

HEALTH AND THE HOLY MONTH Nearly 5,000 people were screened for diabetes both in the run up to and during the holy month of Ramadan this year by Action on Diabetes. Action on Diabetes is a public-private partnership initiated and funded by Maersk Oil Qatar and is in its third year. Activities this year included pre-Ramadan awareness-raising diabetes workshops organised in partnership with Hamad Medical Corporation and Qatar Diabetes Association, five days of screenings at the Al Meera supermarket and two screenings at the Grand Mosque that took place following Friday prayers. Screening booths staffed by trained diabetes nurses and educators were set up to allow worshippers to get screened and receive a personalised analysis of results. They also received advice and recommendations from trained diabetes educators on how to fast safely during Ramadan and reduce the risk of developing diabetes in the future.

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WINNING Qatari athlete Mutaz Essa Barshim reacts after he won the men’s high jump final of the Istvan Gyulai Memorial - Hungarian Athletics Grand Prix at the athletic centre of Szekesfehervar.

QATAR SUMMER FESTIVAL IS BACK The annual extravaganza organised by Qatar Tourism Authority will be back at the Doha Exhibition Center for the whole month of August. The festival is expected to drive up visitor numbers with new attractions, special hotel rates, cultural events and special offers on top brands. A highlight of the festival is Entertainment City, a one-stop for family entertainment at Doha Exhibition Center. The hall will be filled with rides, video games, play areas, a customised shopping area and food court. Daily stage shows will take place between 2 pm and 9.30 pm and entry is free of charge.

DOHA CELEBRATES EID AL FITR IN STYLE The Ministry of Interior and Qatar Tourism Authority organised several events to offer residents and visitors a wide variety of options to celebrate their Eid holidays.

A file photo of Eid celebrations outside the Ali Bin Ali mosque in Doha.

n the first and second days of Eid Al Fitr, the Ministry of Interior put together sporting and entertainment events including a six-nation cricket tournament, cultural performances from Indian and Nepalese communities, orchestras and the finals of the Ramadan Championship in cricket, football, volleyball and basketball. Qatar Tourism Authority organised daily family entertainment shows including mime shows, the Rene Magritte Show, the Bubble Jo Show, and the Magic Paper Artist, as well as traditional Qatari Ardah performances at various malls around the city. QTA put

together exclusive shows at each of the malls, including Peter Pan at City Centre Doha, Circus Canada at Al Khor Mall, Jungle Book at Lagoona Mall, Pinocchio at Hyatt Plaza, The Little Prince at Dar Al Salam Mall and Meet the Nicktoons at Ezdan Mall. Other highlights included the musical “Elmo Makes Music” produced by the makers of the popular Sesame Street programme and staged between July 18 and 22 at the Qatar National Qatar National Convention Centre, and the touring play “Bishowish” (Take it Easy) which was performed at the Katara Theatre between July 18 and 27. QATAR TODAY > AUGUST 2015 > 71

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6:30 AM

A day in the life of...

Al Obaidly’s day starts early. He leaves home to take his five children to school. “Thankfully all of them are in one school,” he says, as we contemplate the Doha traffic and how a small chore can eat into your whole schedule.

Khalifa Al Obaidly, Photographer and Manager of Msheireb Arts Center

Qatar Today follows the daily routines of professionals around Qatar from all walks of life. By Sindhu Nair

9:00 AM

After his site visit, he allocates time for art; it could range from attending workshops to conferences or just some time spent with an artist on a new project. This is also the time that Al Obaidly uses to engage in his latest project: The Old Doors Pattern.

He then proceeds to the site “to solve problems, push the processing and to encourage the employees to keep pursuing the action plan”. The centre houses Sadaa Al Thikrayat (“Echo Memory”), an artistled initiative to record and collect a wide range of artefacts, stories and memories from Msheireb, Qatar’s earliest suburb.

This is when Al Obaidly has his meal with his children, a time for family bonding over making dinner and having it together. From the Al Magreb prayer to outdoor activities and homework, this father loves to spend time with his children.

8:00 PM

His day job is to manage the Msheireb Arts Center located in a converted 1950s school building on the edge of the ‘Heart of Doha’: The Msherireb. His office work begins with checking emails and other administrative work.

7:30 AM

1:00 PM

One final meeting where the team plans for the next day. These days Al Obaidly is also conducting a twoweek summer programme with Qatar Photographic Society. “I focus on the younger generation to raise the awareness about art in general and photography in particular. We have a practical session showing how to use the colours of the rainbow to make creative images,” Al Obaidly says.

5:00 PM

He goes to visit his father and sits down for a cup of tea or Arabic coffee and spends time with his brothers too. 9:00 PM This is the time he reserves for friends. Over the quintessential Qahwa, he catches up with art news from the Arab world and beyond and talks about his dreams. All the while, capturing every moment, frame by frame.

3:00 PM

Khalifa Al Obaidly is one of the first professional Qatari photographers and yet he is not someone who uses his nationality as a privilege but rather as a distinction to inspire others while keeping himself constantly motivated, experimenting on new projects. Al Obaidly is also a teacher at the Qatar Photographic Society, but that is just one of the numerous projects he is involved in, each more interesting than the last.

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