Private Sector Qatar English | August 2013 by Private Sector Qatar

QATARâ&#x20AC;&#x2122;S DIVERSIFIED ECONOMY

AUGUST 2013 www.privatesectorqatar.com/en

LEAD STRATEGIC PARTNER

ENTREPRENEUR

We bring you some interesting stories from Qatar and the region

MANAGEMENT We tell you how to manage your business in this digital age

SECTOR WATCH We take a look at the banking sector in Qatar

BUSINESS GURU

Get to know from Hamad Abdulla Al- Mulla, CEO, Katara Hospitality about his vision for Katara Hospitality

PUBLICATION LICENSED BY IMPZ

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CONTENTS August 2013

22 GET IN THE ZONE:

Adnan Sayeed, Founder of The Zone and the winner of the Al Fikra – Qatar Business Plan Competition (Student Category), tells Tamara Pupic that his story offers critical advice on how to overcome failure.

Business guru 24 “WE HAVE A PASSION FOR THE EXTRAORDINARY,” says Hamad Abdulla Al- Mulla, CEO, Katara Hospitality, in an interview with Aparna Shivpuri Arya about what makes Katara Hospitality stand out!

Sector study

WE HAVE A PASSION FOR THE EXTRAORDINARY says Hamad Abdulla Al- Mulla, CEO, Katara Hospitality, in an interview with Aparna Shivpuri Arya about what makes Katara Hospitality stand out!

28 PROMOTING ECONOMIC STABILITY: Jenny Kassis takes a look at the banking and finance sector in Qatar and brings to you the latest trends.

32 RETAIL SPACE AVAILABLE?: In the second article of a two-part series, Dr. Tarek Coury, Chief Economist, Tanween, focuses on the retail and hospitality sectors.

News 10 UPDATES A quick look at news and events in this region.

GEW

Entrepreneur

34 DEVELOPING THE ENTREPRENEURIAL ECOSYSTEM

14 AT THE FOREFRONT OF HUMAN PROGRESS:

GEW- Qatar will be held this year from the 17th- 21st of November in Doha .We got talking to the partners to get to know the reasons why they think that GEW- Qatar is an important part of the entrepreneurial ecosystem.

Tamara Pupic had more than enough reasons to meet up with Nébil Ben Aissa, Executive President and Co-Chairman, QPAY International Corporation, after QPAY won the first place at the Al Fikra – Qatar Business Plan Competition.

Business opportunities

18 THE DIGITAL MAJLIS: Khalifa Saleh Al Haroon, Founder, iLoveQatar.net, spoke to Jenny Kassis about how he became a successful entrepreneur while working hard to make Qatar a better place.

36 CONTINUING OUR TRADITION:

Private Sector Qatar brings to you more details of Qatar Shell’s two separate contracts with Manweir and ABB Oryx, by which they become its supplier of choice.

SMEs

Marketing

Legal

40 GO GREEN:

44 THE ART OF CONNECTING PEOPLE:

In a conversation with Jenny Kassis, John Irvine, Director, averda Qatar, got talking about their commitment to achieving sustainability in Qatar.

Aparna Shivpuri Arya got talking to Raed Chehaib, CEO, IBN, focusing especially on the 4th QIBWF, which will be held in Doha in November this year.

46 THINKING OF BUILDING A HOTEL IN QATAR?:

Tara Marlow, Partner, Property and Hospitality, and the Head of Ras Al Khaimah Office, and Frank Lucente, Senior Associate in the Corporate Commercial Department of Qatar Office, Al Tamimi & Co., explain how a hotel business can be established under the particular laws of Qatar.

Management 48 A RESPONSIBLE CITIZEN: In a conversation with Tamara Pupic, Eman A.M Rafay, Director, E.A.R Enterprise Oman, explained how regional businesses could become vital development partners of a strong civil society.

52 CLOSE THE GAP: Nicola Gregson, Managing Director, Ketchum Raad Middle East, advised Tamara Pupic on how regional businesses can align their words and actions.

Sign off: 54

POWER OF EXAMPLE:

Starting a bi-monthly column, Tamara Pupic shares her thoughts with you.

AUGUST 2013

EDITORIAL Publisher Dominic De Sousa

Food for thought….

Group COO Nadeem Hood Managing Director Richard Judd richard.judd@cpimediagroup.com +971 4 440 9126

While I was thinking about the cover for this month’s issue and going through the features to find a common thread, it struck me that Qatar has indeed been working very hard towards diversifying. There is no denying that there is still a long way to go with petroleum still accounting for about 70% of the country’s revenue but in line with the QNV 2030, efforts are being made in the right direction.

EDITORIAL Senior Editor Aparna Shivpuri Arya aparna.arya@cpimediagroup.com +971 440 9133 Assistant Editor - English Tamara Pupic tamara.pupic@cpimediagroup.com +971 440 9130 Assistant Editor - Arabic Jenny Kassis jenny.kassis@cpimediagroup.com +971 440 9116 ADVERTISING Commercial Director Chris Stevenson chris.stevenson@cpimediagroup.com +971 4 440 9138 CIRCULATION Database and Circulation Manager Rajeesh M rajeesh.nair@cpimediagroup.com +971 4 440 9147 OPERATIONS AND DESIGN Production Manager James P Tharian james.tharian@cpimediagroup.com +971 4 440 9146 Head of Design Fahed Sabbagh fahed.sabbagh@cpimediagroup.com +971 4 440 9132

And Qatar has got the basics right, with a strong banking and financial sector. As you’ll read in our sector study, in the first quarter of 2013, the banking sector has grown by 1.5% and is growing the fastest among all the GCC countries. At the same time, our feature on the real estate sector highlights the growing strip retail in the country. The majority of upcoming strip retail over the next five years caters to the mid- to high-end income segment. This includes Barwa Commercial Avenue along with other smaller retail complexes in Doha. Good news for all of us and more reasons to shop! Another interesting feature of this month’s issue is our attempt to cover entrepreneurs, not only in Qatar but also, in the region. This gives us an idea about how the youth are trying to diversify and are open to exploring new avenues. For instance, the interview with Nébil Ben Aissa, Executive President and Co-Chairman, QPAY International Corporation, brings forth the use of technology to introduce online payment in Qatar, which is a “Made in Qatar” brand. So do spare some time to read this very interesting story. To inspire you more, we also interviewed Hamad Abdulla Al- Mulla, CEO, Katara Hospitality, who spoke to us about the hospitality sector in Qatar and the growth strategy of the group. It was fascinating to know how quickly the group has grown and established itself internationally as well. So as we leave you with all these interesting stories and food for thought, we would also like to take this opportunity to wish you all Eid Mubarak! All of us here, at Private Sector Qatar magazine, wish that you have a blessed and wonderful Eid.

Until next time,

Photographer Jay Colina jay.colina@cpimediagroup.com +971 4 440 9137 DIGITAL SERVICES www.privatesectorqatar.com Digital Services Manager Tristan Troy Maagma Web Developers Abey Mascreen Erik Briones Jefferson de Joya Louie Alma online@cpimediagroup.com +971 4 440 9100 Published by

Aparna Shivpuri Arya, Senior Editor, Private Sector Qatar Talk to us: E-mail: aparna.arya@cpimediagroup.com Twitter: @PrivateSectorQA Facebook: www.facebook.com/PrivateSectorQatar LinkedIn group: Private Sector Qatar

Head Office PO Box 13700 Dubai, UAE Tel: +971 4 440 9100 Fax: +971 4 447 2409

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Dar Al Sharq Distribution © Copyright 2013 CPI All rights reserved While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

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ADVISORY BOARD Gail Gosse Gail Gosse, Dean, School of Business, College of North Atlantic-Qatar.

Amal Al-Mannai, Executive Director, Social Development Center.

George M. White, Ph.D. Dr. George M. White, Associate Teaching Professor of Entrepreneurship, Carnegie Mellon University-Qatar.

Professor Nitham M. Hindi

Hamad Mohammed Al-Kuwari

Professor Nitham M. Hindi, Dean of College of Business and Economics, Qatar University.

Hamad Mohammed AlKuwari, Managing Director, Qatar Science & Technology Park.

Mansoor Bin Ibrahim Al-Mahmoud

Abdulaziz N. Al-Khalifa

Mansoor Bin Ibrahim Al-Mahmoud, Chief Executive Officer, Qatar Development Bank.

Abdulaziz N. Al-Khalifa, Chief Executive Officer, Enterprise Qatar.

Raed Al-Emadi

Rashid Nasser Sraiya Al Kaabi

Raed Al-Emadi, Chief Operating Officer, Silatech.

Amal Al-Mannai

Rashid Nasser Sraiya Al Kaabi, Chairman of the Board, Energy City Qatar Holding.

For more information, please visit www.privatesectorqatar.com/en

NEWS

rules introduced by QCB recently, which are aimed at regulating the anticipated borrowing spree required to fund Qatar’s massive infrastructure spending requirements. By putting a cap on banks security portfolios to 25% of their capital and reserves, QCB hopes to avoid the mistakes of the global financial crisis which was largely precipitated by the massive debt exposure of banks.

Qatar to become the Gulf region’s ﬁnance hub Qatar is bidding to become the Gulf region’s financial hub by introducing a new regulatory framework for financial institutions and other initiatives to facilitate growth in the banking sector. The Qatar Banking Summit 2013, which will be held from 9th to 11th September 2013 at the Renaissance Doha City Centre Hotel, and

is backed by the Qatar Central Bank (QCB), the Qatar Financial Market Authority (QFMA) and the Qatar Financial Centre Regulatory Authority (QFCRA). Those attending the summit will, for the first time, be able to discuss the ramifications of new

The Bedaya Center launches the “Activate” programme Bedaya Center for Entrepreneurship and Career Development recently launched the “Activate”, a one year programme sponsored by US MEPI. The event brought together twelve ambitious Qatari entrepreneurs with twelve corporate mentors to meet and network at the St. Regis Hotel in Doha. Mentors and mentees were linked based on the relevance of the sector, industry, mission, vision, services and track record and discussed current and upcoming challenges while pinpointing areas requiring further support. Additionally, entrepreneurs presented their respective mentors with an overview of their prospective ideas and strategies for growth, including charts of their situational analysis marking their micro and macro environment and the key driving forces governing each. In turn, business mentors provided

the entrepreneurs with first-hand information, tips and advice on how to progress their startups from a growing idea to a solid corporate entity with the potential to establish strong fundamentals in the industry. Inaugurating the event, Saleh Al Khulaifi, General Manager, Bedaya Center, said,“ The “Activate” programme is another initiative that will pave the way for Qatari entrepreneurs to discuss challenges, opportunities and genuine solutions with organisations they truly look up to. Supporting business startups is a long-term exercise that requires continued investment from everyone involved. Most importantly, there should always be ample opportunities for communications and dialogue between different players, which is a simple yet superb spring board to craft tailor-made solutions with measurable impact.”

Qatar has also announced plans to invest in listed securities in emerging markets through Aventicum Capital Management, a joint venture it established in 2012 with Credit Suisse, once its licence is obtained. This is in addition to the USD 250 million partnership Qatar signed with Barclays Natural Resource Investments, which will look after opportunities related to private equity investments in the natural resources sector. Experts also foresee Qatar developing infrastructure funds and bonds, which could be listed and traded in support of the country’s massive projects outlay as it enters the next phase of its preparations for the FIFA 2022 World Cup.

Customs Clearance Single Window Hassan Al-Sayed, Assistant Secretary General, Government ICT Programmes, the Ministry of Information and Communication Technology (ictQATAR), said that the official launch of the Customs Clearance Single Window project is coming soon in collaboration with the Customs and Ports General Authority. The project is carried out by a Singaporean firm with great experience in the field. Al-Sayed stated that plans to enhance electronic services in Qatar included developing the Qatar E-Government Strategy 2020 , with government e n t i t i e s’ p a r t i c i p a t i o n . T h e s t r a te g y, a s h e said, comprised developing a framework for government entities to prioritise electronic services based on citizens’ and residents’ assessment and requirements, so that the service would achieve their objectives. The forthcoming period, as he added, would witness the introduction of new interactive services on Hukoomi, including payment of fees and other government services aimed at simplifying procedures for businesses as well as for individuals.

Accord to boost tourism in Qatar Qatar has taken a solid step forward in its quest to become a quality leisure destination by signing an agreement with the World Tourism Organisation (UNWTO) to chart the framework needed to develop facilities that meet international standards. The 17-month agreement will see UNWTO update and create bench marked processes within QTA. Based on international benchmark standards, the UNWTO and Qatar Tourism Authority (QTA) shall develop a consistent and locally-relevant monitoring and quality control system across the wide range of tourism activities described under Law 6 of 2012, known as the Tourism Law. QTA’s overall tourism development strategy is aimed at lowering Qatar’s carbon footprint, energy and water consumption, and so also at protecting Qatar’s natural habitats, its wildlife and its marine reserves. “We see these natural assets as forming important future

tourist attractions in a well regulated and professional industry,” said Issa bin Mohamed al-Mohannadi, Chairman, QTA. The phased approach includes creating a policy framework for the institution of regulations, standards, and codes of conduct for all activities and businesses related to tourism products and services. Furthermore, it is focused on creating a policy framework, sustainability indicator instruments, and tourism environmental impact assessments, which guide development planning and implementation of environmental sustainability practices in Qatar. Lastly, the approach includes also implementing guidelines for the creation of foreign and direct financial investment codes and policies for tourism in Qatar. The initial phase will cover five major areas of tourist activities - desert safaris and camps; tour guides; tourism investment, event management companies; retail, wholesale, DMC (destination

SAVE THE DATE!

management) and both inbound and outbound travel agencies and amusement parks. Phase two will cover destination marketing themes, hotel energy systems and related sustainability areas. Qatar’s tourism sector grew 13% in the first quarter of 2013 compared to 2012, fuelled by a hotel boom.The hospitality sector plays a crucial role in the growth of tourism and Qatar’s hotel sector is growing at an incredible rate - 110 hotels were under construction last year, which when finished will offer 19,931 rooms to visitors.As per industry reports, hospitality and leisure is the third largest area of consumer consumption of carbon after homes and transport closely tracked by retail. “Hospitality has a significant foot print, which makes sustainability a key priority for QTA.Within a month, we will be starting a series of development programmes specifically aimed at hotel energy solutions. Over the next six months QTA, with the UNWTO, shall introduce a wide range of environmental issues, topics and proposals to the industry,” al-Mohannadi said.

SEPTEMBER - OCTOBER 2013

Date

Event

2 - 4 September

Middle East Health, Safety, Environment & Sustainable Development Conference and Exhibition

Doha

3 - 6 September

E-Week Entertainment

Doha Exhibition Centre

10 - 13 September

Small and Medium Industries Exhibition

Doha

10 - 13 September

Tower Technology Exhibition

Doha

12 - 15 September

Made in China

Doha

16 - 17 September

ITS Road Safety Forum

St. Regis Hotel Doha

16 - 18 September

Global Reﬁning Technology Forum

Al Sharq Village & Spa

17 - 19 September

GCC Europe SME Forum

Ritz Carlton Hotel Doha

22 - 25 September

Made in Finland

Doha Exhibition Centre

23 - 24 September

Construction Leaders Forum Qatar

Hilton Hotel Doha

28-Sep

Forum and Exhibition: The Gulf-European Partnership

Qatar Chamber

29 September – 1 October

Doha Transportation and Rails Road Exhibition

Doha

30 September – 2 October

9th Annual HSE Forum in Energy

at Grand Hyatt Hotel

7 - 10 October

8th Doha International Oil and Gas Exhibition

Doha Exhibition Centre

15 - 17 October

Negotiation Skills for the Oil and Gas Industry

Doha

21 - 24 October

Ground Support MENA Congress 2013

La Cigale Hotel

21 - 23 October

Stenden Qatar Conference on the Future of Event Legacies

Stenden University Qatar

28 - 30 October

Eco-Q

Doha Exhibition Centre

29 - 31 October

World Innovation Summit for Education 2013 (WISE)

Qatar National Convention Centre

Food Chain

Doha

30 – 31 October

Location

To know about the events happening in Qatar in the next six months, please visit our Website.

AUGUST 2013

REGIONAL NEWS

Middle Eastern oil exports to Brazil top USD 2.75 billion Brazil imported about USD 2.76 billion worth of petroleum products, gas and energy from the Middle East from January to April 2013, accounting for almost 20% of total oil imports to the country, the ArabBrazilian Chamber of Commerce (ABCC) report stated. Jan Dabrowa, Commercial Director, BrazArtis – GrupoBraz Consulting, said, “While imports are on the rise in Brazil, it is important to note that imported products and services are controlled by strict fiscal and import legislation. On average, imported services are taxed at around 50% with six taxes being levied. This includes taxes over services, revenue and income as well as social contribution, financial operations and

remittance of capital. Although Brazil offers great business opportunities, they require an understanding and attentiveness to the ever-changing and complex tax and legal regulations.” As a whole, a notable increase has been noted in imports to Brazil of derivatives, in addition to steady imports of crude oil, naphtha, jet fuel, liquefied natural gas (LNG) and diesel oil, which continue to dominate the imports from the Middle East. In Q1 of 2013, Saudi Arabia was the larger supplier of oil to Brazil, where Algeria contributed to USD 867.75 million, Kuwait USD 508 million, the UAE USD 130 million, Iraq USD 104 million, Libya USD 78 million,

THE REGION PREFERS SOCIAL MEDIA Social media today plays a pivotal part in people’s lives across the Middle East, said a “Life on Demand” study by Performics Mena, adding as many as 61% have more than two social media accounts. Data for the survey was collected online, and included a staggering 2,042 respondents aged 15-64 with at least one social network account and living in Egypt, the UAE and Saudi Arabia. 60% of the respondents in the survey also stated that they visit a social network daily. Today’s various social media platforms each boast distinct characteristics and, according to the survey, people across the Middle East are currently joining Twitter faster than any other social media network. The study found that most respondents prefer to interact with each other via social media channels over other modes of communication – 64% would rather talk to distant friends on social networks, 51% even favor social networking to talk to close friends, 52% are more comfortable engaging with people online than in person, and 51% would choose social networks over telephone communication. Regarding online activities in general, the analysis showed that most participants log on to the Internet to use search tools, for research projects and for access to entertainment. Thanks to social media, consumer behaviour online can be tracked, monitored and measured, which is key to gauging reactions to brands and products. The survey revealed that more than 30% of participants “Like” a brand on Facebook because they are regular customers, want to know about new offerings, require insider knowledge or are searching for recent company and brand posts. Furthermore, on average, people “Like” a total of five brands.

Qatar USD 36 million and Bahrain USD 660,000, according to ABCC.

Bahrain heading towards economic resilience Economic reforms launched by Bahrain are paying off, said Rasheed Al Maraj, Governor, Central Bank of Bahrain (CBB) and added, “These structural reforms are making the kingdom’s economy a resilient one. We welcome Fitch Ratings’ announcement reaffirming Bahrain’s long-term foreign currency issuer default rating (IDRs) at CBB.” In an assessment, the ratings agency had said Bahrain’s outlook on the long-term IDRs was stable. “This rating followed a marked improvement across most economic sectors, which reflected positively in the growth rate of GDP in the first quarter of this year, amounting to 4.2%,” Al Maraj added.

ADNEC to host the Gov Tech Middle East Abu Dhabi National Exhibition Centre (ADNEC) is set to host the largest government technology exhibition in the Middle East that will gather representatives of government departments, ministries and authorities from across the GCC region in the UAE capital next year. The inaugural Gov Tech Middle East will take place from 8th to 9th of April 2014.

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ENTREPRENEUR

AT THE FOREFRONT OF

HUMAN PROGRESS

He has started, grown, sold, and invested in many US technology companies. He already owns seven patents, while two additional patent applications have been pending approval. And, he won the �irst place at the Al Fikra – Qatar Business Plan Competition 2013. Tamara Pupic did not need more reasons to meet up with Nébil Ben Aissa, Executive President and Co-Chairman, QPAY International Corporation, in order to share with you his business story.

“T

he Al-Fikra experience was fascinating, and made us discover that there’s a technology ecosystem in Qatar. We faced a lot of hardship in our early days in Qatar, and felt very lonely. But, the competition made us feel that we belonged to Qatar’s technology ecosystem. It feels great to have people look up to you and to represent a nation. We want to stick around and make Qatar our home forever,” remarked N bil Ben Aissa, Executive President and Co-Chairman, QPAY International Corporation, as he shared his experience from the Al Fikra – Qatar Business Plan Competition 2013. Nébil Ben Aissa As usual, nobody becomes a winner without years spent on education and hard work, about which Nebil said, “I’ve been highly involved in technology and electronic banking for more than 20 years. I’ve been focusing mainly on electronic banking, e-payments, social networking and e-commerce. I started a company in electronic payments, called EPAY Systems, in 2001, and then sold it to private equity in 2011. Right after that, I started a venture capital firm, called Nexxus Ventures, and was looking at investing in various electronic payment companies and projects.” Since he is originally Tunisian, but has lived in the United States most of his life, where he also completed

his education, my next question aimed to determine why and how he decided to set up a business in Qatar. Nebil was honest to share the initial reasons of his devotion to Qatar, “Although I am an American citizen, I am the uncle of five beautiful Qatari Sheikhs and Sheikhas. So, moving to Qatar was not difficult since I love Doha and consider it as my second home. In fact, I have been coming to Qatar since the late 90’s, and I am just amazed at how fast Qatar has progressed in the last few years, especially between 2005 and 2012.” The beginnings In early 2011, Sheikh Jabor Bin Mohammed Bin Jassim Al-Thani, his brother-in-law, suggested that they partner in building Qatar’s first payment processing company and, thus, introduce electronic payment innovation to Qatar. Being initially resistant to the idea due to high startup costs and the family time inevitably consumed by this endeavour, Nebil finally agreed after Qatar won the FIFA World Cup 2022 bid. Since the inception of QPAY in late November 2011, Nebil’s ambitions have been clear in focus, “We plan to be one of the top financial services players in the GCC and MENA region. Our vision is to introduce electronic payment, card and mobile payment innovation that is ‘Made in Qatar’, but exported to various banks and financial institutions within the GCC and MENA countries.”

We plan to be one of the top ﬁnancial services players in the GCC and MENA region. Our vision is to introduce electronic payment, card and mobile payment innovation that is 'Made in Qatar', but exported to various banks and ﬁnancial institutions within the GCC and MENA countries.

their credit/debit card payment servers, technology, security, anti-hacking and anti-fraud systems, as well as maintenance and call center operations to payment processors such as QPAY. QPAY works directly with banks and financial institutions to help them implement electronic payments either by offering payment cards to their consumer clients, or offering electronic commerce and point of sale solutions to their small business clients.” Going back a bit, I asked him about their first steps within the preparation of their business plan, Nebil explained that the first steps to starting any business plan should include: ■ ■

Patiently explaining the benefits of QPAY’s services for businesses, Nebil continued, “10 to 15 years ago, most people paid for their purchases using cash or a cheque book. Today, people are using debit cards and credit cards as well as other means, such as payment by mobile phone. Because electronic payments are on the rise, many banks are starting to outsource their payment processing departments to special companies, which specialise in credit/debit and electronic payments. Just like when a small business outsources their website hosting to a technology company, banks also outsource

■

Assessing the value proposition and need for one’s solution within the targeted demographic Evaluation of the market size and understanding of the competition’s offering Knowledge on how to offer a better, cheaper, and more differentiated product

“Our initial assessments of the market size, demand, value proposition and competitive analysis were very encouraging,” added Nebil. He immediately realised differences in style of doing business between the US and the Middle East, “As time went by, we started learning that things move much slower in the Middle East than in the Western countries. Looking back, we should have focused more on acquiring relationships to speed up the processes and gain a faster foothold in the market.” Continuing on this, Nebil opened up on the financing options for technology startups in Qatar, “Qatar is a young country and still does not have a serious financing model for technology companies. This is mainly because other sectors are taking top priority for banks. In addition, bankers are not familiar with how to loan money to a company whose assets are intangible, when compared with a manufacturing plant or a real estate building, where the asset is touchable, and banks use it as a collateral to a risky loan.” Therefore, they decided to move forward and fund the business with their own money while keeping their options open to either debt or equity financing in the future. Currently, they are being positive about a possibility to be accepted for QDB’s Al-Dhameen programme. However, Nebil’s plan B also includes considering venture capital both in Qatar and the UAE as well as funding from a newly-established technology specific fund in Kuwait. Concluding on the challenges they faced in setting up their business in Qatar, Nebil was positive, “Regulations and funding were our top challenges. Since we work

AUGUST 2013

ENTREPRENEUR

with money, we had to comply with various regulations, processes and procedures, like Anti-Money Laundering (AML) and Anti-Terrorist Funding (ATF). Getting bank partners, international networks, such as Visa or MasterCard, to work with us, and being able to get approval from regulators in the region were our most challenging undertakings. However, our experience is that once we have become operational and have built trustworthy relationships with various partners and regulators, our job has got easier.” On the basis of this experience he opined that currently Qatar’s efforts to promote services, SMEs and technology companies are genuine, but pointed out that there has to be a single entity to take leadership on this front, ”I personally suggest that three things need to be done well in order to see a thriving technology community in Qatar – a serious financing programme must be put in place to help fund technology and intellectual property tech companies. Then, a high tech incubator with shared infrastructure, legal, accounting, and telecom services should be put in place to help young startups focus on their concepts. Lastly, a technology oriented free zone should be put in place in order to attract bright entrepreneurs from all over the world.” Learn how to walk Looking to the future, he seemed quite motivated, “The electronic payment industry is highly competitive, fast moving and fast growing. In order to keep up, we need to invest in technological innovation and operational excellence. Currently, all our efforts to further develop our business are focused on offering a highly secured and highly scalable electronic payment system for our clients. Down the road, we will try to focus more on building a killer sales, marketing strategy and field force. However, at this stage all focus is put on building a great product platform which beats our competition.” Following up on this, he shared advice for new tech entrepreneurs in Qatar, “I think, if I had to give a single piece of advice to young entrepreneurs, then I would tell them, ‘Keep the baby alive!’ Many entrepreneurs rush to grow their company fast, and do all types of activities that are not necessary, thus, wasting valuable money and time. It’s like having a new born, but wasting time on their university application. I tell many young entrepreneurs – focus on making sure that your baby is fed, clean, alive and operating. Once your business is established and starts to stand and learns how to walk, run and ride a bike, then go ahead and think about going to university and taking over the world.” In just a few words, he summed up the advice, “Manage your time, your activities, and focus on the initial steps to starting and building a great company.As some of the great people have said, your number one enemy is yourself!”

Manage your time, your activities and focus on the initial steps to starting and building a great company. As some of the greats say, your number one enemy is yourself!

Conversation with this highly experienced tech entrepreneur could not end without seeking his opinion on how has technology changed the business world, “Technology has changed how business is done and has also changed countries and the world. Who can imagine running a company without emails these days? So, yes, technology and innovation is at the forefront of human progress. The US is the most advanced technological country in the world. India is the largest exporter of Information Technology (IT) services in the world. Qatar, on the other hand, is small and young in the technology space. However, we do believe that there will be more efforts in Qatar to promote technology and innovation. Till then, we are busy building great technology and innovation in electronic payments and looking forward to contributing to the success of Qatar in the tech industry.”

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ENTREPRENEUR

DIGITAL MAJLIS

Loving Qatar was not enough for Khalifa Saleh Al Haroon, Founder, iLoveQatar.net since he wanted to cherish this admiration and raise it to reach all corners of the world. Continuing our series of interviews with members of EO Qatar, Jenny Kassis shares with you his journey that made him a successful entrepreneur, while working hard to make Qatar a better place.

halifa Saleh Al Haroon, Founder, iLoveQatar.net, is a young Qatari entrepreneur who would like to retire at 40! With a background in law, he first joined QNB Capital as an analyst in the Investment Department. He helped in the setting up of QNB Capital and eventually became the Secreatary of the Board. During his time there, one of the projects he worked on was to help put together the prospectus to bring Vodafone to the Qatari market. He ended up joining the network, became one of the Heads of Online, and helped the company to reach the third position in social media engagement within the group. He is now the Head of Innovation and Interactive at Vodafone. He has also received numeruous awards, including the Entrepreneur of the Year in 2011, The Most Promising Startup Award from ictQatar, and other social recognitions. iLoveQatar.net To start our conversation about iLoveQatar.net, which is a digital community, Khalifa explained to us the motive that made him establish this kind of business, “When I was studying in the UK, students used to ask me where I was from. Each time I said I was from Qatar, I had to hear the same comment, ‘Where is that?’ One day I got so fed up that I asked someone to google it. The next day, she came back and told me that she couldn’t find anything. So, I decided to google it myself, and one of the results was from the Lonely Planet guide, which was very outdated. That was one of the main factors that made me realise that people need to learn more about Qatar.”

In 2006, before actually establishing iLoveQatar.net, Khalifa registered the domain prior to the Doha Asians Games 2006 and uploaded five pages describing Qatar. Six months later, he discovered that his page had got 400 thousand views, “At the end of 2008, I realised that I needed to bridge the gap between expats and locals, so I created the website, which you can see today, and started answering people’s various questions. People started telling me exactly what they needed from the site, and we modified it to cater to their needs. That is the dream of every businessman. That is one of the reasons why the website has been growing – not only because we have a positive message to share, but because users feel that they have a voice and that the website is theirs.” iLoveQatar.net has now become an online community and an informative portal, which includes a widespread and interesting forum. It helps to bridge the gap between locals and expats, and it also supports charitable causes. In this context, he pointed out, “This community helps Qatar to become a better place. I personally spend profit from my business to support charitable causes as well as the community itself. So, the more the community helps iLoveQatar.net to grow, the more I will be able to give back to the community. It’s a beautiful cycle.” Given that, at the time of setting up the business, there weren’t many regulations for creating an online business in Qatar, Khalifa was honest to say, “I went through hell. After referring to the Ministry of Business and Trade to register the company, I was forced to comply with the same regulations as any other traditional business. I registered our license under marketing and advertising.”

It wasn’t an issue for me to get money because I could always ask it from my family or friends. But, I wanted this to be a true startup in order to prove that startups can succeed in Qatar.

mentality, that there were already many similar websites out there. Why do we need another one? I also faced some financial problems. It wasn’t an issue for me to get money because I could always ask my family or friends. But, I wanted this to be a true startup in order to prove that startups can succeed in Qatar. In fact, I even got help from and partnered with other startups. We were literally supporting each other. So, we made it together by working hard and living on the edge. This is why, when I started, I still needed to get a full time job.” Even though the company’s name is I Love Qatar, they are a total of three Qatari employees while the rest are expats from different nationalities. Luckily, the online community was so helpful, and Khalifa didn’t have to worry about overheads or staffing, since a lot of people agreed to volunteer, “We now have eight members of the team, but we rely heavily on our volunteers. I don’t think of the website as a business. I’m not a boss sitting behind a desk. I like to be on the ground, handing out flyers, volunteering myself, and working as hard as everybody else. I think that if you want your team to believe in you, you need to get your hands dirty too.”

Khalifa Saleh Al Haroon

Elaborating furthermore about the difficulties he faced at the beginning, Khalifa said, “I had to confront some push back from my family and friends, who were telling me, in a typical traditional

When talking about the growth of his company, he said, “I started working from a small, tiny office. From there we grew. We slowly expanded the website by adding the news section, the events section, and Mr. Q’s blog. I write and post articles on different topics. Today, we also have various YouTube series and a weekly radio show, which we do in partnership with the Qatar Foundation. We also have a monthly newsletter digest, and contribute articles to other magazines. Today, we generate a great amount of views on the website, 3.4 million views on our Facebook page per month, and have an average of four million potential reach on Twitter. To make sure that we keep our brand promising, we have yearly taglines that help in clarifying why we exist. Our first tagline was, ‘Making Qatar a better place with everything that we do’. The next year we added on to that, ‘Giving you reasons to love Qatar’. This year our tagline is ‘For the people. By the People. Giving back to the people’. Everything we do is for the people, and the content is generated by the community itself.” Touching on the difficulties expats face to make friends with Qataris, Khalifa said amusingly, “It is not our fault. For every expat to have one Qatari friend, each Qatari, including babies, would need to have seven expat friends. We are a tiny community. But, it is easier to make thousand of friends from all over the world when you’re online. What I have created with iLoveQatar.net is a “digital majlis”, which became a place for everyone to communicate.”

AUGUST 2013

ENTREPRENEUR What’s in the future? iLoveQatar.net plans to establish its own radio station, formalise the digital content on their YouTube channel, rebuild their website and launch some new applications. Giving more details about this, Khalifa told us, “To launch all these different projects and to grow, I need partners and investors. The point is not just about getting money, but about getting smart money. Smart money comes from an investor who understands the business itself and can provide us with additional expertise. The stuff we want to work on will drastically change the way that people live in Qatar. To achieve this, I am trying to figure out how I can integrate other people’s digital solutions with mine. The reason is that I don’t want to rebuild and compete, but to take what other people have and tie it into what I have.” Talking about taking his concept even further, he mentioned that once he has the formula perfected in Qatar, there’s no reason not to replicate iLoveQatar.net within the region. Before discussing his role within EO Qatar Chapter, I asked for his opinion about Qatar becoming a better place to live and work in, and he was honest to say, “It would be fantastic if we could have a startup hub in Qatar, where startups could click together and exchange their ideas in a very creative environment as well as support each other’s businesses. If I could get funding, I would set it up myself. A proper economy relies on startups and SMEs. If you don’t have SMEs, then you put all the power on those big mega organisations, and allow them to control the market. That doesn’t bring stability to the local economy.” We asked his opinion on what country Qatar could learn from, to which he said, “I use Japan as a model as it’s a country that has done a great job in balancing between tradition and modernity. I’d like Qatar to be like that. This is what I think Qatar needs. I would love to see Qatar as a society recognised to be tolerant, welcoming, open, and respectful to both locals and visitors.” Entrepreneurs’ Organisation – Qatar Chapter As the Social Chair of EO’s Qatar Chapter, Khalifa told us that he was invited to join this organisation in 2011, “I have to admit that, in the beginning, it was difficult for people to understand what EO was about. We did a good job in formalising why we exist. I think that we all, as Chairs, want EO to be the best organisation that it can be. If any of us fails in achieving our goals as board members, we really push ourselves and try to make a difference.” Since EO is still in the early stage, they are trying to identify what is the best model for them to move forward in the future, “EO Qatar is very selective in choosing members. Among our members, you can find a lot of young people that started up with very little and achieved great things. This gives us comfort in knowing that there are other individuals in the same boat,” said Khalifa.

A good entrepreneur will ﬁgure out a way to achieve his idea. Anybody who complains that things are hard, should better give up and stop trying to make a business.

Talking about the difficulties young entrepreneurs face nowadays, he pointed out, “In the Arabic culture, people treat you based on your age. The main difficulty is to get the needed attention in order to prove yourself. The age of members in EO Qatar varies from 24 to 40, and the good thing is that we all respect each other. We don’t treat each other based on age or our achievements. We are all equal peers. We’re all learning from each other’s experiences.” He also mentioned that, “The government wants to support entrepreneurs, but they don’t really understand all the types of businesses that exist here. Giving startups a chance to actually work and take risks is lacking. Startups don’t want free money, but the opportunity to work with big companies. But, many organisations either want to work with international companies or they want someone with 20 years of experience.” When asked about his advice for young Qatari entrepreneurs trying to start their own businesses, he said, “A good entrepreneur will figure out a way to achieve his idea. He or she will always find a way. Anybody who complains that things are too hard, might as well give up. You need to have the passion and motivation to bring your dream to life. You have to also focus since it is so easy to get distracted in Qatar with all the business opportunities out there. So, pick a business, focus on it, and become a master of what you are doing. You need to know your business plan inside out and where you want to go with it in the coming years.” Lastly, he assured that it is all about partnerships, “People who want to do things alone end up creating a lonely island. Moreover, when it comes to funding, don’t feel shy to ask family and friends for investment, and let them know what the risks are upfront. They might not see their money back, but your family will always be proud of you for trying even if you fail.” At the end of our conversation, Khalifa stated, “I keep on investing in project after project since I want to reach a point where I can retire at a young age. However, I wonder if given the chance I’d really retire.”

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ENTREPRENEUR

GET IN THE ZONE! The story which Adnan Sayeed, Founder, The Zone, and the Student Category winner at the Al Fikra – Qatar Business Plan Competition, told Tamara Pupic proves that failure is not an obstacle if you believe in your idea.

The Zone won the first place within the Student Category of the Al Fikra – Qatar Business Plan Competition, please tell us more about your experience gained through this competition. The Al-Fikra Business Plan Competition helped me prove to myself and others that I do have a business idea worth investing in. I was proud to represent the Georgetown University and, only as a freshman, compete and win among students from some of the best business schools in the world. Aside from that, I feel that my presentation skills have vastly improved through the guidance of my mentors, and that’s what ultimately helped me secure my victory. Now, I will continue to search for investors and an opportunity to get my business up and running.

How was the idea of The Zone created? During my high school years, I was an active member of the competitive gaming community in Canada. My team participated in many regional tournaments through which I developed a strong passion for the industry. It only felt natural for me to create a similar environment here in Qatar. Your project provides people a venue to play video games in a social and competitive environment, how did you discover this niche opportunity within the Qatari market? The Zone is a competitive electronic sports league. Such leagues already exist in the USA, Western Europe, and Southeast Asia, but nobody has tapped this emerging market in the MENA region. For the past three years, I have been analysing the regional markets periodically to see if there is a competitive gaming scene here. It turns out that there has been a large population of gamers who have been actively seeking for such a structured league to satisfy their competitive spirit. Thus, it seems like the logical choice for me to explore this opportunity given my experience in the industry.

Please tell us more about the process of setting up The Zone till now. Last year I entered the CNA-Q Internal Business Plan Competition on a whim, and ended up winning the first place. After that, I proceeded to compete in the AlFikra Competition 2012, but my partner and I lost in the final round due to a poor presentation. I was discouraged after that loss because I thought I truly had a winning business idea.I made some changes to my business plan and decided to re-enter the competition this year on my own. I share my success with three mentors – Shona Welsh, Curtis Avery from CNA-Q, and Amer Quereshi from Enterprise Qatar. Without their constant support and constructive feedback, I don’t believe I could have won. Upon winning the competition, I received minimal support from the local organisations. In addition, securing investors has proved to be impossible. In my opinion, the entrepreneurship ecosystem in Qatar is still in its infancy.Although Qatar has massive potential, it really needs to focus its efforts on supporting local entrepreneurs, especially the youth.

Adnan Sayeed

What challenges did you face in setting up and growing your business in Qatar till this moment? Trying to start The Zone has been a never ending struggle. The prize of QR 50 000 isn’t nearly enough to start a company in Qatar since we need at least QR 200 000 to obtain a commercial registration and open a business bank account. Trying to find investors, who understand my business idea, has also been extremely difficult. Unlike me, most of the investors, whom I have interacted with, don’t look at this business as a long term opportunity, which could sweep the region and make millions of Dollars. Currently, the only option that seems viable is setting up my business in Canada. That would cost only USD 500. From there, I could operate in Qatar and the region at large. If it was an option, I would request some solid guidance and support along with the opportunity to meet potential investors.

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BUSINESS GURU

Says Hamad Abdulla Al- Mulla, CEO, Katara Hospitality, in an interview with Aparna Shivpuri Arya about what makes Katara Hospitality stand out! Please give us some history about Katara Hospitalityâ&#x20AC;&#x2122;s inception and vision Katara Hospitality is an organisation that combines experience and heritage with a bold new vision for the future. We have been at the vanguard of the hospitality industry in Qatar for more than four decades. As pioneers in the market, we introduced the first 5-star hotel with the property currently known as Doha Marriott Hotel. The Sheraton Doha was the first internationally branded property while Ritz-Carlton was the tallest building in Qatar at the time it opened. Moreover, Sealine Beach Resort was the first leisure destination in the country while Sharq Village & Spa was the first luxury resort in the market. We identified the growth potential of business tourism in the country, and we created the Merweb brand designed to meet the needs of discerning business travellers.

Currently, the properties owned and managed by Katara Hospitality in Qatar form an eclectic portfolio. Our hotels can cater to high end business travellers or more cost conscious ones, covering the MICE segment and offering outstanding recreational facilities. As we aim to become one of the leading global hospitality organisations, we are creating a portfolio of iconic hotels around the world. We acquire properties that have a hospitality legacy, as well as develop new hotels in key or emerging destinations. At home or abroad, we are striving to deliver peerless hospitality that not only brings renown to our portfolio, but to Qatar as well. Our goal is to have 30 properties by 2016, with another 30 by 2030.

As an industry leader, what is your opinion about the trends in the hospitality sector and the investment opportunities available? Katara Hospitality has always been at the forefront of the industry by identifying areas of growth and developing innovative hospitality assets. Premium tourism destinations show a strong demand for luxury hotels. Travellers looking for such accommodation have become more sophisticated, looking for genuine luxury hospitality experiences that go beyond recognition and personalised service. We are now witnessing the emergence of various niche hospitality products within the luxury segment that merge local heritage to create unique experiences and memories for global travellers. For example, Raffles Hotels & Resorts is one of the operators that have developed its brands, focusing on ”emotional luxury” which works perfectly for both Katara Hospitality properties under its management – Le Royal Monceau – Raffles Paris, and Raffles Singapore. The spa and wellness industry complements luxury hospitality. The sector has emerged because of awareness regarding personal health and well-being, which has increased in the recent years. Properties in our portfolio host some of the most renowned spas in the world. The Six Senses Spa at Sharq Village & Spa is the largest of its kind in the Middle East, and it has been at the forefront of the industry since it opened in 2007. With the rising number of business travellers in the GCC and an increase in the duration of their stay, serviced apartments are another emerging trend. These apartments provide the option of longer stays at lower rates as compared to traditional hotels. Last but not least, the increase of more cost conscious travellers has led to the diversification of the offer under the 3- and 4-star hotel segment. Operators that have been traditionally known for managing 5-star properties have started developing brands and concepts that operate within the 3- and 4-star market. Alternatively, operators in the luxury segment that have traditionally counted on the net value of their services and reputation have started introducing incentives and reward programmes, which enable them to retain customers in a very competitive market place. We at Katara Hospitality also recognise the importance of diversification and focus on creating a network of first class business and leisure hotels located in key destinations. We also identified the need for quality business hotels in Qatar and we created the Merweb brand, designed

to meet the needs of discerning business travellers. Merweb Hotel Al Sadd Doha opened in 2001 as the pilot project for the brand.

Do you think the dynamics will change in the next ten years in the hospitality and tourism sector with the FIFA World Cup 2022? If so, how? Qatar is one of the fastest growing countries in the world. The strong economic and demographic growth requires infrastructure development. We believe that a strong hotel network is needed to support the development at different levels. We anticipate 30% growth for Qatar’s travel market over the coming two years. The development of infrastructure projects will generate significant business opportunities for hotels, with occupancy rates expected to grow significantly in the build-up to the FIFA 2022 World Cup. New hotel openings will contribute to maintaining competitive room rates amongst other GCC markets while stimulating healthy competition to maintain service standards. In general, we regard 2022 as a milestone in the country’s development. Qatar is pursuing an articulated strategy for economic diversification, opening the horizons for future generations. 2022 is our opportunity to showcase a country that has grown into an international destination while its people have an innate hospitality trait.

How do you identify locations and hotels for partnership and expansion? The National Vision 2030 leads the country on the path of economic diversification, and hospitality is one of the strategic drivers. As a government-owned organisation, whose goals are aligned to the country’s objectives, Katara Hospitality has a two-tier expansion strategy. In Qatar, we are committed to investing in hospitality assets, which aid the development of the country’s tourism infrastructure. With a global portfolio of iconic hotels, our investments abroad support our mission to become one of the leading hospitality organisations in the world. Katara Hospitality was launched last year as a platform for growth, with a short term goal of 30 hotels by 2016 and 30 more by 2030. Katara Hospitality’s portfolio currently includes 25 properties and projects. In the past 18 months, the company tripled its portfolio by acquiring properties and initiating projects in strategic international locations. Our European presence is strong and, in the next year, we will see the opening of several iconic hotels. With properties in France, Switzerland and Italy, we expect to

AUGUST 2013

BUSINESS GURU

invest in other markets, including the United Kingdom and Germany, as well as further enhancing our presence in the Mediterranean. North America is also a possibility, and of course we want to expand in Asia where we plan a major renovation of Raffles Singapore. We have a passion for the extraordinary - that something special which will add an exceptional dimension to our business. At home or abroad, we strive to deliver peerless hospitality that not only brings renown to our portfolio, but for Qatar as well.

How does Katara Hospitality play its role as an operator and a developer? First and foremost, Katara Hospitality is an asset manager. However, the developer area of our business is closely related and interconnected with our core expertise. Many hotels under our portfolio have been developed by Katara Hospitality from the project stage to becoming a valuable asset while most of our international properties are currently undertaking major renovation under our direct supervision. We have always worked closely with international hotel operators, and each development has been a learning experience for us. This gave us depth of expertise and confidence to venture into becoming a trusted hotel operator eventually while being able to deliver hospitality complexes that meet international standards.

For businesses (SMEs) looking into entering or expanding into this sector, are there any niche areas you can recommend - areas that haven’t been fully explored yet in the hospitality sector? Supply of specialist services has always benefited from a wealth of opportunities for SMEs that are interested in penetrating the hospitality sector. However, when looking for partners in various projects, we always consider the expertise brought in by suppliers or consultants in fields related to our business areas. With almost all neighbouring countries looking at tapping the hospitality sector, how do you maintain the competitive edge? The tourist demand is responsive to the unique positioning of each market and its attractions. Qatar positions itself as a niche market destination. At the World Travel Awards 2012, Doha was recognised as the World’s Leading Business Travel Destination while Qatar was nominated as World’s Leading Sports Tourism Destination. These are good examples of the strengths which differentiate us against other markets. However, efforts are being deployed for enlarging the niche market of Qatar’s tourism. Qatar Foundation, Katara Cultural Village and Qatar Museum Authority are local organisations which are working actively towards establishing Qatar as regional cultural hub.

Our European presence is strong and, in the next year, we will see the opening of several iconic hotels. With properties in France, Switzerland and Italy, we expect to invest in other markets, including the United Kingdom and Germany, as well as further enhancing our presence in the Mediterranean.

State-of-the-art medical facilities, such as Sidra Medical and Research Centre or Aspetar, provide world class niche medical services aimed at positioning Qatar as a top international medical destination. As Qatar’s infrastructure develops at a fast pace, the entertainment offers diversifies every year. From highend shopping malls or traditional souks, world class museums and cultural hubs, to parks and unique outdoor recreational facilities as well as an increasing portfolio of hotels and food and beverage concepts, Qatar has something to offer to everyone, be it a resident or a tourist.

What are your future local and international expansion plans? We already have 25 properties operational or under development. In the last year, since we introduced the new Katara Hospitality brand, we have achieved major milestones in acquisition, investment, development and operations. We completed the acquisition of Somerset West Bay Doha, the first of three assets being acquired from Barwa Real Estate, as well as signing new partnership agreements with the governments of the Republic of the Gambia and the Republic of the Maldives. We have three new properties, adding 500 keys, on track for opening in 2013, complementing our 13 hotels now operating.

As a mentor to SMEs if you had to impart some wisdom, what would that be? Two things are critical – vision and focus. Whether you are a USD 50 billion company or a USD 50,000 business, you need to have a clear sense of where you are going. Then have the focus to make that vision happen. Don’t get distracted by wrong turnings – keep on the road to success.

SECTOR STUDY

PROMOTING ECONOMIC STABILITY With 18 Qatar Central Bank licensed banks operating in Qatar as of 2012, the banking and �inance sector is set to grow in the coming years. The aim is to ensure that all the needs and improvements related to the non-hydrocarbon sector in Doha, which is also expected to grow by up to 10% a year, are met. Jenny Kassis takes a look into this sector and brings you the latest trends.

developing economy like Qatar needs considerable financing in order to provide growth opportunities for the financial sector. In this matter, Dr. R. Seetharaman, CEO, Doha Bank, informed, “In Q1 2013, the lending in Qatar’s banking sector has grown up by almost 1.5% yearto-date (YTD). Retail and contracting are the key sectors which have driven growth this year. The banking sector has a strong bond with the economic environment and, hence, is poised for multidimensional growth.” He also added, “The global financial crisis has not affected the liquidity among the Qatari banks. In the next couple of years, lending will be more directed towards the non-hydrocarbon segment, and is expected to pick up in the contract financing, government and SME sectors.” Qatar has the fastest growing banking sector in the GCC with local banks being dominant. According to the latest QNB’s economic insight reports, Qatar has the third largest banking sector assets in the GCC and has stood at the forefront of asset growth in the region. It had the highest growth rate of 18% in banking assets region-wide in 2012. The banking sector system is escalating vigorously due to good asset quality that was also highlighted in the report, which stated that Qatar’s banking sector asset quality is stronger than in many countries in the world with the non-performing loans (NPL) estimated at just 2% of total loans in 2012.

Taking a closer look at the region, Dr. Seetharaman compared Qatar to the UAE, where banks are regulated by the UAE Central Bank while insurance activities are regulated by the Insurance Authority, “Qatar also has a number of regulators such as the Qatar Central Bank (QCB) for banks, the Qatar Financial Markets Authority (QFMA) for financial markets, and the Qatar Financial Centre Regulatory Authority (QFCRA) for banks, asset management, insurance and reinsurance companies. Qatar’s financial services sector is heading towards a unified regulation, which would make the regulation process simpler and clearer for companies under the supreme regulatory authority of the QCB.” Supporting this point, Shashank Srivastava, CEO and Board Member, QFC Authority, gave us an overview of the QFC, “The QFC was established by the State of Qatar with a mandate to help build a world-class financial services sector in Qatar, and to provide a platform for regional and international growth. Crucial to the QFC’s competitiveness and success to date has been a strong and progressive legal, regulatory and tax environment that is firmly rooted in the English common law, a principles-based approach to regulation, and a competitive and efficient tax regime. Looking at 2012 alone, the QFC licensed a wide range of global, regional and local firms. Also, towards the end of June this year the QFC licensed Aventicum Capital Management, a joint venture between

Credit Suisse and Qatar Holding. The QFC works closely with the regulatory authorities, QCB, Qatar Exchange, the ministries and other government and public bodies to promote the growth and development of the capital markets, introduce new products and continually improve its support for QFC-licensed businesses. A case in point is the revised regulations for special purpose companies (SPC), which make it more attractive to set up an SPC, for instance, to issue a Sukuk, and single family offices (SFO), which make it easier for families to manage their affairs more efficiently and operate from a base which offers them regional and international reach.” Moreover, the QFC Authority helps Qatar’s financial sector by supporting an analytical understanding of the opportunities in the region. “The QFC Authority sponsors a number of ground-breaking research reports that help to improve the quality of information available and, hence, the efficiency of the region’s financial markets,” added Shashank. Nowadays, banks are launching specific services to help SME development. In this context, Dr. Seetharaman informed us about the latest services they are providing to SMEs, “Doha Bank offers Tatweer, which provides a wide range of banking and financial services to help SMEs. This includes loans for daily business operations, credit facilities for import activities and short and medium-term loans to suit business needs. It also provides trade finance services, e-banking and comprehensive insurance through its insurance subsidiary Doha Bank

Assurance Company. We also signed up with QDB for the Al Dhameen Programme to finance SMEs in Qatar. Moreover, we conducted knowledge-sharing sessions, in partnership with Qatar Exchange, to promote the SME capital markets.” On the other hand, Rafiq Jaffer, Partner and Head of Banking and Finance, Al Tamimi & Co, said, “On the wholesale banking side, one notices the same names that dominate the borrowing space. There are about ten companies that are considered good credit. This is in addition to the government based borrowers. This puts pressure on margins that the banks are able to earn. Also, on the SME side, there appears to be less appetite when compared with other markets in the region. However, the government has taken steps to address this issue.” With an aim to grow, local banks are referring to the capital market in order to finance expansion. In line with that, Ahmed Badreldin, Partner, Abraaj Capital, said, “If you look to the capital in the GCC and compare it to Europe, you would obviously say that it is undeveloped. But actually, if you look at it historically, it has come a long way, especially for the bond market – the Suquq side. On the equity market, there is a regression from the liquidity we had in the pre-crisis in 2008, but in some parts that liquidity is coming back to the region.” He also added, “If the capital or equity markets were open for investors that would help equality and could attract foreign capital. As long as the economies are growing, we will find pocket for sectors which have the potential to grow and expand much more.” Elaborating further on this, Dr. Karim El Solh, CEO, Gulf Capital, said, “Capital markets in the region are doing well, there is an increasing investors’ confidence and a good cumulative liquidity. That reflects growth of the underline economies and Qatar is growing at very attractive rates, similar to Saudi Arabia and the UAE.”

Rafiq Jaffer, Partner and Head of Banking and Finance, Al Tamimi & Co

Ranked as the “Best Financial Centre in the Middle East” by Global Investor magazine in 2011 and 2012, the QFC is an integral part of Qatar’s financial sector and, therefore, an integral part of Qatar’s economy. Talking about the position of Qatar’s economy, Shashank said, “Qatar’s financial sector benefits greatly from the country’s economic and financial stability. The economy is the fastest-growing in the GCC region. The IMF forecasts that between 2012 and 2017 Qatar’s economy will expand at an average 5.2% a year against an average of 3.5% for the GCC as a whole. The country has the world’s highest per capita income and one of the highest proportions of high net worth individuals and millionaire households, which generates rising demand for financial services and products.”

AUGUST 2013

SECTOR STUDY New QCB law The Government in Qatar recently issued the new Central Bank Law, No. 13 of 2012, which came into force in 2013. This new law, has expanded its administrative powers to cover the insurance sector and the QFC Regulatory Authority. In this context, Rafiq remarked, “This new piece of legislation addresses a whole host of issues including – mergers and acquisitions in the finance sector, Islamic finance, corporate governance, consumer protection, and similar. The new banking law is a step in the right direction and provides certainty in an area that is much needed. Another key area of reform has been the issuance of the QFMA Law. This law strengthens the QFMA’s role in supervising the marketing of securities in or from Qatar. This new law seeks to safeguard investors and ensures appropriate disclosure requirements.” He also added, “The pace of reform along with the rapid growth in the infrastructure sector has been a boon for the banking sector. On the construction side, there are projects from Qatar Rail, roads, hospitality, and so on. This has led to a boom for contractors operating in Qatar. Contractor financing has definitely seen an uptick both on the term finance side as well as for non-fund base facilities. Further, industries that support the contractors, like steel producers or providers of construction equipment, are also seen as good credit in the market.” When we asked, Dr. Seetharaman about this new law, he pointed out, “This law will make Qatar’s financial sector more resilient. It also provides a framework for co-ordination between regulatory and supervisory bodies in Qatar through the formation of financial stability and risk committee. It mandates the QCB as the supreme competent authority in framing policies pertaining to regulation and supervision of all financial activities and markets in Qatar. It would enable regulators to implement best practices to deliver objectives of the Qatar National Vision 2030.” Liberalisation of the financial sector Qatar is trying to reform its economy through financial liberalisation and internalisation. Dr. El Solh told us, “Qatar’s financial authorities and corporates are launching better rules and better corporate government transparency and reporting. They are trying to model themselves to the global financial centers in London, New York and Hong Kong. That is encouraging more asset managers to come to the regions and set up businesses either in Qatar, the UAE or Saudi Arabia.” Dr. Seetharaman also agreed on that and said, “A liberalised environment will enable banks and financial institutions to be more competitive. Liberalisation will also bring more foreign capital inflows in the country. Contagion risks emerge from liberalisation and internationalisation of the financial sector. Qatar’ banks and financial institutions have

Dr. R. Seetharaman, CEO, Doha Bank

had limited exposure to Eurozone, however, they will be impacted by softening of oil prices. Regulation and effective risk management can protect the financial sector from contagion risks.” Giving more details about this, Rafiq said, “The government has established the QFC which operates as an onshore centre. Foreign banks and financial institutions can establish a branch or subsidiary in the QFC and offer their products and services to certain types of customers. Banks from emerging economies, such as India and China, have opened branches in Qatar. Further, banks operating from the QFC are not restricted from providing their products and services to customers in Qatar, provided that such customers meet the requirements prescribed by the regulator. Finally, the QFC is also a route to market investment funds, which are not established in the QFC or Qatar, to be marketed in Qatar. This has been a major move to liberalise the financial sector in Qatar.” Unlike some countries in the Middle East, Qatar has been able to handle the global financial crisis very well. Dr. El Solh stated, “We were not affected by the global financial crisis since we were buffered. Investors realised that and they are now investing more money in the region. Since the evaluations are very appealing, when compared to global stock markets, we can see more and more liquidity coming to the region’s capital markets.” However, this is also due to the robust banking sector in Doha. “There was a combination of reasons that assisted banks in Qatar. The first was that they were not as exposed to toxic assets as other financial institutions in the region. Further, the government came in very swiftly to provide the required liquidity to shore up

Elaborating furthermore about the prosperous future that awaits this sector in Qatar, Jaffer said, “In the runup to the 2022 FIFA World Cup, Qatar’s financial sector is expected to grow to meet the infrastructure needs of the county. Further, the legal and regulatory reforms are going in the right direction and will ensure that the growth is sustainable.”

Shashank Srivastava, CEO and Board Member, QFC Authority

any banks that required assistance. A combination of these factors resulted in the banking sector in Qatar remaining robust during the global financial crisis,” noted Rafiq. With joint efforts of the QCB and the government along with the public-private partnership model, Qatar made its way efficiently out of the crisis. Dr. Seetharaman highlighted that by saying, “From February to March 2009, the Government of Qatar bought USD 1.8 billion worth of local Qatari banks’ portfolios of local shares listed on the Doha Securities Market. Subsequent to this, in June 2009, Qatar bought USD 4.12 billion of banks’ real estate investments. In addition, the QCB also mandates all Qatari banks to create a risk reserve to cover contingencies on loans and advances with a minimum requirement of 1.5%2%. The Qatar Investment Authority (QIA) had also injected capital in local Qatari banks as a part of the government’s efforts to prevent contagion effect of the global financial crisis.” Opportunities Moving forward in our study with the lending opportunities for banks due to the 2022 FIFA World Cup and the increased government spending on infrastructure projects, Dr. Seetharaman shared with us, “Infrastructure development will give opportunities in the areas of project finance and syndications loans. In the past, project financing of the government sponsored public sector undertaking (PSU) projects were mainly underwritten by multinational banks through syndicate loans. Post crisis, multi-currency loans came in vogue to permit local and regional banks lending in local currencies. Moreover, Korean and Japanese companies also participate in project finance through export credit agencies.”

In addition to that, Dr. Seetharaman declared that Qatar’s banking sector will support the diversification of Qatar’s economy in the non-hydrocarbon sector, “According to the Qatar National Development Strategy, aggregate GDP growth in 2012-2016 is expected to average to 6.9%, out of which hydrocarbon GDP growth will be 4.4% and non- hydrocarbon GDP will be 9.1%. Hence, we have to align our growth with that and create asset optimisation plans. Yet, the SME is also a sector which will provide significant opportunities for lending.” Nevertheless, the Qatar National Vision 2030 sees diversification from a hydrocarbon-based to a knowledge-based economy as a principal objective. The QFC is evolving in response to this development. Giving more details about this, Shashank stated, “A flourishing, world-class financial sector, which can efficiently allocate resources within the economy and is an essential component of a knowledge-based economy, is fundamental to diversification. The finance, insurance, real estate and business services sectors are now one of the biggest contributors to the economy after hydrocarbons, constituting about 10% of GDP. They are expected to grow at least as fast as the services sector generally between now and 2020. Public infrastructure spending over the next decade, including the investment necessary for the 2022 FIFA World Cup, may exceed USD 200 billion. It is already creating a need for more varied and sophisticated financial services and the financial system will be critical to the efficient allocation of capital to projects.” In conclusion, he stated, “At the same time, capital markets will become broader and deeper as the Qatar Exchange implements measures to increase volume and liquidity. The QCB works to build a local currency yield curve and Qatari as well as foreign investors increasingly see the country as an investment opportunity and not just a source of capital. The MSCI’s recent upgrade of the QE from frontier to emerging market status, to take effect next year, is a significant endorsement of how Qatar’s financial sector is maturing.” Overall, we can say that as Qatar managed to stay strong during the global economic crisis, it will continue to develop its financial sector in a robust manner. And this is clear due to the recent developments and reforms helping the banking sector to support other sectors in order to respond to the Qatar National Vision 2030.

AUGUST 2013

SECTOR STUDY

RETAIL SPACE AVAILABLE?! In a two-part series, Dr. Tarek Coury, Chief Economist, Tanween, has been covering the trends in Qatar’s growing property market. The �irst article, which was published in our April issue, provided an overview of the residential and commercial sectors. This month, he focuses on the retail and hospitality sectors. Retail sector The retail sector in Doha, including shopping malls (“organised retail”) and strip retail, is one of the most successful sectors in the real estate space. Regional benchmarking and domestic economic conditions point to continued success for the sector in the coming years.

Dr. Tarek Coury is the Chief Economist at Tanween, a Qatari real estate developer and development consultancy providing turn-key solutions to investors, developers, land owners and occupiers. Tanween’s unique approach covers all services within the real estate investment value chain from idea creation to market research, feasibility studies, project delivery and asset management. For further information, Tarek can contacted at tcoury@tanween.com.

Total organised retail space in Qatar is currently dominated by 14 major shopping malls and equals approximately 650,000 m2 of gross leasable area (GLA). Occupancy in the malls is currently lead by conglomerates operating in the retail space. These have the right to market internationals brands on a franchise basis. Examples of these conglomerates include Al Futtaim Group, Al Shaya International, and the Azdea Group. Due to barriers to entry in the Gulf region, foreign brands have to engage in a joint venture with local and regional partners to enter the retail sector. The malls in Qatar currently have only a limited number of international brands, when compared to Dubai, which is the regional benchmark in the retail space. These brands tend to have multiple outlets and cater to the mid-to-high end income segments. Brand penetration in Doha is not as high as regional benchmarks. This is because the domestic market still has not reached maturity, particularly on the supply side. Given Qatar’s current population (1.91 million), the GLA per capita is estimated to be around 0.30 m2. Future supply up to 2015 will amount to an additional space of approximately 1,100,000 m2 of GLA which would then increase the GLA per capita to 0.85 m2. However, this will still be lower than regional benchmarks such as Dubai

and Abu Dhabi with GLA per capita (shopping malls) of 1.4m2 and 1m2, respectively. This comparison does not, however, take into account the greater importance of tourism in the retail market performance of Dubai and Abu Dhabi relative to Doha. Line tenants in shopping malls have average rental rates ranging from QR 200/m2 to QR 250/m2 per month. However, asking rents in some upcoming malls indicate a 30% premium over and above prevailing rental rates. The average rents for retail space in malls are typically 30% to 40% higher than strip retail rents located in prominent areas in Doha. Occupancy within retail malls is currently near 100% and is expected to remain high even as retail stock increases. Rents for strip retail in Doha have stabilised since 2011 within a range of QR 160/m2 to QR 400/m2 per month. Major retail strips are found on Salwa Road, Al Sadd, Bin Mahmoud, Airport Road, the A and B Ring Roads, the Musherieb Area, Al Wakrah and Al Khor areas. These are essentially 100% occupied. Tenant profiles typically include furniture and lighting outlets, new and used car showrooms, local clothing and apparel stores, local and international food and beverage outlets. Existing rental rates are generally 30% to 40% lower than asking rates in malls. Monthly rental rates range from QR120 to QR220 per m2. New supply in the market, however, commands asking rents 25% higher than existing strip retail rents. The majority of upcoming retail strip over the next five years caters to the mid- to high-end income segment. This includes Barwa Commercial Avenue along with other smaller retail complexes in Doha (Al Sadd, Airport

Average monthly office rents/m2 – Q4 2012

Source: Tanween Research 2012

The GCC cities hotel performance – Q1 2013

Source: Tanween Research 2013

Road, and the B and C Ring Roads.) The high-end income segment is supplied by The Pearl and Lusail. The Pearl Qatar currently has a total of 190,000 m2 of retail strip, of which approximately 90,000 m2 has come online. The remaining 100,000 m2 is due to come online by 2014. Lusail City has approximately one million m2 of retail space planned by 2020.

Distribution of retail space in malls – Q1 2013

Source: Tanween Research 2013

During 2012, hotels recorded the highest occupancies in Q4 2012 of 64%, up from 56% and 45% in Q2 2012 and Q3 2012, respectively. In Q1 2013, occupancies have climbed further to an average of 66%. The average daily rate (ADR) was QR 783, and revenue per available room (RevPAR) was QR 518. ADR is down by an average of 6% in Q1 2013 relative to Q1 2012, RevPAR is down by an average of 1.6% relative to Q1 2012 but occupancy over this period is up. According to research by STR Global, hotels in Doha derive a majority of their income from food and beverages revenues rather than room revenue. This is in contrast to all other cities in the sample. This may signal a lack of food and beverages outlets, independent banquet halls to host weddings and events and other entertainment facilities in Qatar. This reinforces our view that prospects for additional retail are positive. The current standalone high-end restaurants found in Qatar are priced equivalent to outlets in hotels and usually offer less customer service. Restaurants in hotels offer frequent promotions relative to independent restaurants. This may contribute to the relative importance of food and beverages revenue for hotels.

Hospitality sector The hospitality sector is currently dominated by upscale and upper upscale hotels, with upcoming supply in the near future also skewed toward the high-end segment.

Regionally, Dubai, followed by Riyadh, recorded the highest ADRs of QR 1,030 and QR 906, respectively. Dubai recorded the highest RevPAR and occupancy in comparison to other cities in the GCC for Q1 2013. Throughout 2012 and Q1 2013, Riyadh has recorded the highest ADR, with the exception of the Holy Month of Ramadan, and Dubai had the highest occupancy level of approximately 80%. Doha’s occupancy was approximately 60% with ADRs at QR 800 during the same period.

In 2011, the stock of hotel rooms amounted to 11,341 rooms across 74 hotels. This corresponds to a 16% increase since 2010, according to Qatar Tourism and Exhibition Authority data. In 2012, 12 new hotels (4- and 5-star) have opened with an estimated 2,200 rooms and two hotel apartments (Fraser Suites and Governor West Bay Suites).

Hotel supply in Doha is skewed toward 4- and 5-star offering and relies on business tourism. In comparison, hotels in Dubai are more evenly spread across the luxury spectrum and occupancy stems from both leisure and business tourism. This points to the importance for Doha to diversify its revenue toward leisure tourism and expand hotel supply toward the low- to mid-end.

Increasing population and income per person point to continued health in the retail space. As the hospitality sector coverage below demonstrates, food and beverage in retail strip and shopping malls remains an area of opportunity in Doha.

AUGUST 2013

GEW

DEVELOPING THE

ENTREPRENEURIAL ECOSYSTEM

Global Entrepreneurship Week (GEW) is the world’s largest celebration of the innovators and job creators who launch startups that bring ideas to life, drive economic growth and expand human welfare. It will be held this year from the 17th- 21st of November in Qatar.We got talking to the partners to get to know the reasons why they think that GEW- Qatar is an important part of the entrepreneurial ecosystem.

EW Qatar is not only about creating awareness, but it is a platform for exchanging ideas and, identifying opportunities and learning from example. Talking about the importance of GEW Qatar for their respective organisations, the partners had a lot to say.

have seen a transformation in their economy as they have actively supported the development of new business and entrepreneurship. We hope that Qatar can emulate these successes, since being part of a global network of GEW countries, we can lean from the experiences of those countries.”

This year Enterprise Qatar (EQ) will be the presenting partner for GEW- Qatar. Other partners include, Silatech, Qatar-Shell, Qatar Science & Technology Park (QSTP) and Qatar Development Bank (QDB).

Echoing the same sentiment, Wael Sawan, Managing Director and Chairman,Qatar Shell said that as Qatar moves to diversify its economy, developing a thriving private sector is an important priority. Wherever Shell operates in the world, they are passionately committed to promote SME and local content development through programmes that introduce local companies into our supply chain and then work with them to enhance their performance. Local Content and SME support is one of Shell’s global strategic social investment themes that fulfills a business interest and societal needs everywhere in the world.

According to Elaine Gold from Silatech, “Silatech became the country host for GEW in order to ensure that Qatar was represented in this growing global initiative. As Qatar is increasingly being taken notice of on the world stage as a country which has an empowering vision for entrepreneurship, we considered it important to demonstrate within Qatar and internationally that there is an appetite for entrepreneurship amongst the population, and especially the youth within Qatar. Silatech’s remit is to enable youth to have increased opportunities in the areas of entrepreneurship, employability and engagement. There is a proven link between entrepreneurship and employability. Countries such as Chile

Qatar Shell is a strong advocate of the Qatar National Vision 2030 and their CSR efforts seek to contribute to the human and economic development pillars of the QNV through investment in Qatari talent and developing Qatari enterprises. Entrepreneurs are the backbone

of a thriving society, and Qatar Shell hopes to be able to support Qatar’s efforts in developing and nurturing the SME sector for them. Nadiya Farah, Acting Director of Innovation and Entrepreneurship, QSTP, further added, “GEW is an impressive global initiative that all actors passionate about driving economic and societal change can participate in together. Last year, distinguished speakers from QSTP startups shared case studies with the audience of aspiring entrepreneurs and QSTP also delivered entrepreneurship skillsbuilding LEGO workshops aimed at spurring and instilling creativity, risk-taking and teamwork. Entrepreneurship and innovation go hand in hand and they are at the heart of QSTP’s strategy. QSTP is pleased to be supporting GEW again this year. Entrepreneurs are the torch bearers of economic, social and human development.” Talking about what the partners have planned for this year’s GEW, Elaine was quick to point out that they will be highlighting ways in which youth can engage in and support entrepreneurship, from participating in workshops which identify the skills of an entrepreneur, to raising awareness of social entrepreneurship, to working with partner organisations to deliver workshops relating to policy and support systems for individuals and SMEs. On the other hand, Wael remarked, “Qatar Shell is wholly committed to supporting local enterprise, whether existing businesses both large and small, or encouraging young people to choose private enterprise as a career option. Building on the programme’s large appeal to students last year, Qatar Shell is partnering with Bedaya for the Enterprise Challenge Qatar 2013, which is being expanded to reach a larger group of universities and will also target schools in the northern part of the country. The ‘Enterprise Challenge Qatar 2013’ will be open for students from all of Qatar’s universities, as well as a separate programme for high schools in Al-Khor and Al Shamal.” Wael further stated that the “Enterprise Challenge Qatar 2013” is made up of two parts: The Ethical Business Challenge which tests students’ ability to balance the economic, environmental and social performance of their company and the Business Simulation, which is designed to familiarise students with general business concepts from inception through to trading, finance, sales, marketing and production.” No one can deny that events like GEW are not only important but also integral to creating entrepreneurs and developing the SME sector in Qatar. The partners couldn’t agree more about this. According to

Nadiya, Qatar’s diversification effort requires not only intellectual contribution but also the embedding of an entrepreneurial culture. This makes entrepreneurs and the support for them an essential ingredient to building a strong technology SME sector and to realising Qatar’s vision of diversifying the economy. “In Qatar, where much is starting from scratch there is a lot of unpredictability and unknowns. Fortunately, this makes Qatar a great test bed for creativity and entrepreneurship and in this regard QSTP is a catalyst for development of the SME sector in Qatar. If we consider that diversification of Qatar’s economy calls for Qatar to be the knowledge owners in new fields beyond Oil and Gas, SME’s will play a pivotal role in this shift. The shift is not only about practicalities, it also requires a change in perspective and commitment to investing in building the base of entrepreneurs who can take part in the creation of new enterprises that will deliver social and economic benefits in the global knowledge economy. While events such as GEW are fun and inspirational, we should not underestimate its contribution to creating new opportunities, and bringing people together to drive change,” she remarked. Elaine had the same sentiment. According to her, the Qatar’s 2030 Vision requires a movement to a more ‘knowledge-based’ economy. Typically, these types of businesses require skills of innovation, creativity and technology. It is important that we create opportunities for youth to explore options and develop skills in these areas. GEW-Qatar will provide opportunities to raise awareness of these options, and to network with individuals and organisations who can continue to support entrepreneurs and aspiring entrepreneurs after GEW is finished. Wael added to this and remarked that, “The GEW is a great opportunity for entrepreneurs from all around the world to meet and share ideas, but it is also a platform locally for the public and private sector in Qatar (both large and small or medium sized companies) to understand how to better create an environment that fosters entrepreneurship and SMEs. It also presents a chance for collaboration to happen between participants of the GEW, whether as partners, mentors, or even potential investors in new businesses and ideas. At the end of the day, it’s important for all the sectors of society to jointly develop to strengthen one another, and the Global Entrepreneurship Week is a method of doing so.” GEW is all about thinking big and thinking different and will look at all the different aspects of being an entrepreneur. Being a part of the private sector ecosystem, we will also be organising our “Qatar Success Series” as part of the GEW. This is our attempt to promote the SMEs and entrepreneurs in Qatar and provide them with a platform to discuss various issues. So please watch this space for more details in the coming months!

AUGUST 2013

BUSINESS OPPORTUNITIES

CONTINUING OUR TRADITION In line with its well-known support to Qatar’s private sector and the intention to include quali�ied local suppliers in its local operations, Qatar Shell signed separate contracts with Manweir and ABB Oryx paving the way for them to become the supplier of choice for Qatar Shell as well as the Pearl GTL plant. Private Sector Qatar brings to you more details.

wo established local companies, Manweir and ABB Oryx, have signed separate contracts with Qatar Shell to maintain the electric motors at the Pearl Gas to Liquids (GTL) plant, which is the world’s largest GTL plant located in Ras Laffan Industrial City. Pearl GTL has approximately 4,500 electrical motors installed on the plant that need to be regularly inspected and maintained. Speaking at the signing, Wael Sawan, Managing Director and Chairman, Qatar Shell, said, “Our experience has taught us that supporting local manufacturers and small and medium enterprises (SMEs) is core to achieving a sustainable economy in line with the Qatar National Vision 2030. We have been very impressed with the quality of our local providers and we continue to look at opportunities to broaden that partnership base. Today, we are proud to add two new local companies, Manweir and ABB Oryx, to this list.” “A healthy private sector, which begins with SMEs and entrepreneurs, is beneficial to large organisations. We hope that Qatar Shell will become a leading example of delivering and then operating world-scale projects in partnership with local suppliers,” he added. Sawan stated that the companies won the bid after demonstrating their ability to adhere to Shell’s global standards including its strict requirements on health, safety, security and environment (HSSE). ABB Oryx Motors & Generators Service LLC (ABB Oryx M&G) is a joint venture between ABB and Oryx Engineering Solutions, based in Ras Laffan, which provides a wide range of electrical motor and generator services to operations in the oil, gas, water and energy sectors in Qatar.The service already extends to some 10,000 ABB-manufactured electrical motors operating around Qatar. Speaking on behalf of the joint venture, Juha Alopaeus, ABB Country Manager, Qatar, commented, “Shell’s decision to choose ABB Oryx

Motors & Generator Services is a testament to the quality of service and convenience of our location in Ras Laffan.” Abdulla Ahmed Mannai, Managing Director, Oryx Engineering Solutions LLC, further added, “We are pleased to offer Qatar Shell with easy access, quick turn-around and best-in-class service levels under the new agreement.” Manweir LLC, a wholly owned subsidiary of Mannai Corporation QSC, is one of the leading local engineering services companies, which has been serving the onshore and offshore oil and gas, petrochemical, power, marine and industrial sectors for the last 37 years. Key services offered by Manweir are machine shop services, electrical equipment repair, turbo machinery repair, static equipment repair, welding and fabrication, valves repair, instrument calibration and manufacturing of oil field products and other associated services. “We are honoured to be awarded this contract with Qatar Shell. At Manweir, it is our constant endeavour to align our business with the Qatar National Vision 2030. We strive to contribute towards a sustainable economy and Qatar’s growing industrial sector by investing in our human resources and cutting edge technologies,” said Khalid Mannai, Executive Director, Mannai Corporation. “Today, we mark yet another association with Qatar Shell GTL for the maintenance and repair of electrical motors and we stand by our commitment to provide quality, safe and on time services to meet Qatar Shell’s service requirement,” said Alekh Grewal, Group CEO and Director, Mannai Corporation. In May this year, Qatar Shell partnered with Qatar Development Bank to provide local companies and manufacturers access to four specific new business opportunities.

ENTREPRENEURSHIP AND EXPERIENCE COMBINED

rs Service yx Motors & Generato In a few years, ABB Or a welle om bec to wn has gro LLC (ABB Oryx M&G) oss sectors crucial to acr ng rki wo er vid reputed service pro rgy. oil and gas, water or ene Qatar whether in the e between rship, the joint ventur An exemplary partne onstrates how dem , ons uti Sol ing eer ABB and Oryx Engin together to e com can e enc experi entrepreneurship and time. of n spa rt cess in a sho achieve success after suc now provides ablished in 2011, and The company was est rations in ope h wit ers tom es to cus a wide range of servic and the tar Qa in energy sectors the oil, gas, water and regions. n ica Afr an har -Sa sub surrounding Gulf and l City, the in Ras Laffan Industria Conveniently located prehensive com of features an array purpose-built facility fully is It es. iliti fac g inin tra workshops, offices and tors and mo l ica ctr ele of wide range equipped to service a commissions, es, vic ser s, air rep es generators, and includ A fully enance of all brands. installations, and maint vice work at ser the team conducts trained ABB accredited remotely on site or fan Laf s Ra in the dedicated workshop rational locations. at the customers’ ope eement the bid for a call-off agr ABB Oryx M&G won rl Gas Pea the at s tor mo ic ctr to help maintain the ele L plant, GT t ges lar ’s the world to Liquids (GTL) plant, C. LL eir nw Ma itor alongside its compet

offer Qatar Shell the “ABB Oryx M&G will imity, capacity, beneﬁt of service prox itation,” said Juha availability, and accred try Manager, Qatar, Alopaeus, ABB Coun with Qatar Shell is a “Winning this contract mpany, especially as huge boost to our co st r services into the re we look to expand ou of the GCC region.”

AUGUST 2013

BUSINESS OPPORTUNITIES

AT THE FOREFRONT OF QATAR’S INDUSTRIAL SEC TOR

Since its establishment in 1976, Manweir LLC has been an engine of success by providing high quality and cost-effective solutions to oil and gas majors, petr ochemical companies, as well as the marine sectors. Over the past four decades, the company, a wholly-owned subsidiary of Mannai Corporation, has grown to an operation of 700 personnel with two state-of-t he art facilities in Qatar.

“At Manweir, we continuously end eavour to support the National Vision 203 0 and contribute to a sustainable econom y through driving the growth of the industrial sector,” says Khalid Al Mannai, Exe cutive Director of Mannai Corporation, “W e understand the true importance of our customer needs and always strive to create a dynamic business environ ment by constantly investing in local hum an resources and home-grown techno logy.” 38

Manweir’s two large workshops spanning in total 66,000sqm, situated at Doha Industrial City and Ras Laffan Industrial City, are strategically located to serve custo mers from Doha, Messaid, Dukhan and Raslaffan. It recently became the first service provider in the Middle East and North Africa to be certified by SGS Baseefa UK, an internationally recognised certification body, as a facility authorised to repair explosion-proof electrical machine s. Last month, Manweir enhanced its association with Qatar Shell’s supply chain as part of a call-off agreement to repair motors and engines on the Pearl GTL Plant. Qatar Shell will benefit from the proximity of Manweir’s Ras Laff an facility, recently inaugurated under the patronage of the Min ister of Energy and Industry His Excellency Dr Mohamed bin Sale h Al Sada. The facility was also endorsed by Siemens as certified to repair and overhaul their industrial steam turbines and com pressors.

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SMEs

GO GREEN Environmental solutions are crucial to maintain environmental sustainability of any country. averda Qatar is deďż˝initely contributing in adjusting to environmental standards as it tries to reduce waste and increase recycling. In a conversation with Jenny Kassis, John Irvine, Director, averda Qatar, talked about their commitment to achieving sustainability in Qatar.

Please give us a brief background about averda Qatar and services you provide? averda is the largest environmental solutions provider in the MENA region specialising in integrated resources management. We are at the forefront of innovation within the regional marketplace in terms of providing sustainable solutions. Our company brings more than 35 years of experience in the effective management of waste for both private and public sector clients across the recreational, residential, commercial, and industrial areas. John Irvine is the Managing Director at averda Qatar. He holds an MBA from Glasgow University and two diplomas in Environment and Development Planning and Environmental Policy. His career spans over 28 years of extensive managerial experience in the waste management and environment fields. For more information, please visit www.averda.com.

As a dedicated environmental services company, our core business is to deliver cohesive and transparent solutions to our clients across all sectors and industries. This covers traditional waste management removal and transportation through the complex diversification programmes to encourage our clients to adopt thorough recycling programmes within their organisations.

When did you start operating in Qatar? averda started operating in Qatar in 2009. The team works with companies across a variety of industry sectors including a recent partnership with Dukhan High School, which installed our unique reverse vending machines (ReVa). We have introduced a technology to the region that incentivises consumers and encourages them to recycle plastic bottles and cans in exchange for rewards. By adopting ReVa, as their sustainability partner, organisations can also contribute to this recycling initiative.

From your experience, what does Qatar need to maintain and enhance the environmental sustainability? Qatar is a country that has been developing at significant rates. We have witnessed double-digit growth over the past five years with many mega projects currently underway in the country. With such growth comes increased responsibility to protect the environment from the negative impact this kind of fast-paced development can cause. Qatar has a very aggressive vision for its aspirations. The Qatar National Development Strategy includes concise plans to reduce waste and increase recycling to a benchmark no less than 38%. Infrastructure is the key, and the facilities and means to support it need to be in place. In addition, there is a strong need for an on-going education and awareness in order to help those living and working in Qatar to take both an individual responsibility and a collective one, which is done by businesses, universities and other key stakeholders within the society.

Knowing that waste management practices are still underdeveloped in the region, what are you doing to empower this sector? As part of our core values, we work alongside legislative bodies and governments to assist in implementation of best practices and diversion from landfill. In a tandem, we are very committed to transparency. Throughout the region, we manage all elements of waste management in various markets, from municipal collections, medical waste treatment, landfill engineering, through to composting and recycling.

SMEs

The industry is very much in its infancy here in the region when compared to other geographical regions, such as Europe or North America. Because of this, one of the main hurdles is a coherent understanding of waste awareness.

Awareness and education are crucial to what we believe in at averda Qatar. The passion and commitment, upon which this company was established, are an inherent part of the everyday work that each employee undertakes. We work closely with our clients as partners in order to also help the increase of awareness within their own organisations. We are keen to lead by example. For that reason, we have instigated a number of initiatives in order to help promote the message of taking responsibility for a cleaner environment. For example, we regularly hold beach or park clean-ups with our partners, when groups of volunteers donate half a day of their time to collecting waste from a designated site.

Doing business can be very challenging at any time, what are the challenges you are still facing in the region? The industry is very much in its infancy here in the region when compared to other geographical regions, such as Europe or North America. Because of this, one of the main hurdles is a coherent understanding of waste awareness. That is why, when averda Qatar gets awarded a high profile project or a contract, the bid is built around service delivery and a bespoke awareness campaign. Even our SME sector benefits from our awareness programmes, as we believe that no business or contract is too small to benefit from our expertise.

Additionally, the drive and determination from businesses in Qatar, together with the visionary leadership of its government, has brought around fast-paced progress, and a lot has been achieved already. We are working closely with customers to help further increase this progress and bring best practices to waste management across the country. Educational awareness and appreciation of the benefits and values of good waste management practices at the consumer and organisational level is an ongoing process. Also, it is the one that constantly needs attention.

What is your advice for SMEs and startups looking to enter this sector? Do have passion and donâ&#x20AC;&#x2122;t be afraid to show it. It is true passion and belief in the sector, which you are working in, that really takes a company above and beyond and makes it stand out from the crowd. This sector is at a complex stage of its development, and although significant progress has been made there is still a long way to go. Those looking to enter the sector need to understand that they are playing a part in its on-going development. So, patience, passion and commitment are all definitely the key.

Please tell us about your latest initiatives and achievements in the region. I would say that our most exciting and successful initiative in Qatar at present would be regarding ReVa. A number of organisations, from schools to universities and businesses, have seen the ways in which these reward based recycling machines can really help encouragement of better environmental practices as well as raising awareness of its importance. What are your future plans? We have a very aggressive growth plan over the next ten years both organically and through acquisition. However, with growth comes added responsibility. For the next phase of our growth, we have ensured that our values are continuously driven to the forefront of everything we do. Qatar is a growing market for averda. We are looking to further expand our presence and work closely with customers to help develop the market landscape.

We would deďŹ nitely look to work with companies preparing for the FIFA World Cup 2022 to ensure that the necessary infrastructure, processes and trainings are in place to cope with the increased demand for efďŹ cient waste management solutions.

With the FIFA World Cup 2022 coming and the government investing billions on infrastructure projects, are you planning to apply any specific waste management services in order to retain environmental solutions? The nature of our work and the way we form partnerships with clients are very much within a service provider capacity. We would definitely look to work with companies preparing for the FIFA World Cup 2022 to ensure that the necessary infrastructure, processes and trainings are in place to cope with the increased demand for efficient waste management solutions.

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MARKETING

THE ART OF CONNECTING PEOPLE Interactive Business Network (IBN) is a young, but dynamic and forward-looking company that was established in Qatar to serve its rapidly growing economy and business community. Aparna Shivpuri Arya got talking to Raed Chehaib, CEO, IBN, about their activities in Qatar and across the region, focusing especially on the 4th QIBWF, which will be held in November this year. What made you decide to enter the field of event management? IBN was established in late 2009. It’s a Qatari enterprise. Event management has been our passion as long as we can remember. I personally have worked for 17 years in this industry and managed many projects such as the Qatar Economic Forum, the Jordan Economic Forum, and the Iraq Economic Forum.

Raed Chehaib is the Founder and Chief Executive Officer of Interactive Business Network, which was established in Qatar in 2009. He is a graduate of the American University of Beirut. He has 16 years of experience in marketing strategies, business development, leadership and management skills, business communications and high level event management in the Arab world. For more information, please visit www.interactiveb.com

Event management is a domain that involves all skills. It’s the combination of strategy, vision, market knowledge, marketing, sales, and many other skills. It is the art of connecting people. Thus, since our inception we have managed to organise many successful events.

Does IBN focus on certain particular kind of events, such as those related to business and investment? Usually, the topic of the event is decided according to various standards such as the market needs, our client’s needs, and the regional changes. Of course, business is one of our major topics as we are organising two forums during the first quarter of 2014, one on entrepreneurship and the other one on angel investment. This is in addition to the Qatar International Business Women Forum and other events that have left a huge impact on the events field. Although we focus on business, we have managed to organise huge international events in the fields of electricity, water, and oil and gas. When you have good resources and a good team to depend on, the topic of the forum is not be an obstacle.

How has your experience been so far in Qatar? Is the event management industry developed here? Qatar is rapidly developing, and becoming a destination for business, investment, events, and other activities. This has reflected positively as the country has witnessed a recognisable growth on all levels. IBN is one of the leading event management companies in Doha, and this is for two reasons: ■ We know who’s who ■ We know what it takes to pull up a huge event Every domain has its ins and outs, and our network is our greatest asset. We take pride in our network of officials, business leaders, and decision makers in Qatar and the region. The events domain has attracted different competitors from all around the world. This will reflect positively not only on the quality, but on prices as well. Eventually, everyone will get his share since the market fits all.

What other services do you provide besides event management? Besides event management, we offer our clients many other services such as marketing planning and strategies, communication strategies and solutions, branding and web development, and other tailored services including awareness campaigns. Event management can be running a conference for 1000 guests or running a board meeting for ten. As for other services, they can be considered under the umbrella of events as the aim is always to expand. Our slogan is,

Event management is a domain that involves all skills. It’s the combination of strategy, vision, market knowledge, marketing, sales, and many other skills. It is the art of connecting people.

“Extend your reach”. So, our services are always tailored to help our clients and partners extend their reach.

With the Qatar economy diversifying and also the FIFA World Cup 2022 less than a decade away, how do you see the landscape for event management and PR changing? Even before announcing that the FIFA World Cup 2022 will be hosted in Qatar, the country has been evolving rapidly. The expertise of foreigners and the vision of the government here have raised the bar in terms of quality in all sectors. Thus, we are now working in line with international standards since it’s either one improves or gets out of the cycle in this competitive market. The market has realised the importance of PR, communications, and the benefits of events, especially, forums and conferences. You’ll be organising the 4th QIBWF in November this year, what are your expectations from this event? Have you seen the role of women evolving in the country? The Qatar International Business Women Forum is an international event by all means. During the past three editions, the event received a positive feedback in Doha and the region due to its topics, speakers, and attendees.

The 4th QIBWF will host two Nobel Prize winners as speakers, in addition to many leading women from all around the world. Attendees are expected to be more than 1000 as we are receiving registrations from Europe, Asia, and, of course, the GCC region.

The event’s main focus is the empowerment of women. The topics change yearly depending on the regional and international situations. This year we are focusing on the human dimension in business, in addition to entrepreneurship and women financing. The 4th QIBWF will host two Nobel Prize winners as speakers, in addition to many leading women from all around the world. Attendees are expected to be more than 1000 as we are receiving registrations from Europe, Asia, and, of course, the GCC region. Qatar is the best place to organise this event as the National Vision 2030 aims at empowering women, and, so far, Qatar has managed to enroll women in education and business. It is impressive that the highest percentage of educated Qataris are women. Qatari women are becoming business leaders, and examples for other success stories. This shows the role of the government sector in supporting women.

What will be your advice for startups and entrepreneurs interested in entering the field of event management and PR in the country and the region? Although passion is essential to succeed in your job, however, many factors play a major role in defining your success, especially in a competitive market such as Qatar. A good vision and an excellent market knowledge are important to gain your spot in the market. Integrity, honesty, and good relations are the cherry on the top. You can’t do it without a good team backing you up, and, of course, without being ready to sacrifice lot of time and efforts to reach your goals. Entrepreneurship is a mixture of these ingredients.

What are your expansion and growth plans in the coming years? We are currently partnering with official parties in several countries in the Gulf to organise events. Hopefully, by mid-2014 we will organise a number of events in KSA, Kuwait, and Dubai.

AUGUST 2013

LEGAL

THINKING OF BUILDING A HOTEL IN QATAR? Hotel investors and operators can see a massive growth potential in Qatar in the immediate future. Tara Marlow, Partner, Property and Hospitality, and the Head of Ras Al Khaimah Ofďż˝ice, and Frank Lucente, Senior Associate in the Corporate Commercial Department of Qatar Ofďż˝ice, Al Tamimi & Co., explain how a hotel business can be established under the particular laws of Qatar.

oha has 17,964 hotel rooms available today, primarily in the 4- and 5-star hotels and deluxe apartment-hotel categories. The Doha Port also has fullyequipped berths for cruise ships to accommodate a minimum of 6,000 additional visitors at the highest international standards. According to the Qatar Tourism Authority (QTA), a total of 48 new 5-star hotels with 13,151 rooms, 41 new 4-star hotels with 8,829 rooms, and nine 3-star hotels with 2001 rooms are planned and will be ready by 2016. A further 10,452 apartment-style hotel rooms are in the planning stage. This will no doubt rise as we come closer to the FIFA World Cup 2022 by when the QTA expects there to be in excess of 70,000 rooms. The Foreign Capital Investment Law (No. 13 of 2000) (the Foreign Investment Law) regulates foreign investment within Qatar. Its Article 2 sets down a general principle that foreign investors

are allowed to invest in all sectors of the national economy provided they have one or more Qatari partners owning a minimum of 51% of the capital. Accordingly, foreigners wanting to establish a business enterprise are generally restricted to owning a maximum of 49% of any such enterprise. The tourism exemption However, an exemption to the 49% limit can be obtained by investment in certain economic sectors including agriculture, manufacturing, health, education, tourism, development of natural resources, mining, power, information technology, technical and consultancy services, entertainment, sport and cultural services, and distribution services. There is an overriding qualification that such investments are to be consistent with state development plans which allows the Ministry of Business and Trade discretion in granting the exemption. Therefore, anyone wanting to construct a hotel in Qatar may wish to consider making an application

Article 2 of the Foreign Investment Law sets down a general principle that foreign investors are allowed to invest in all sectors of the national economy provided they have one or more Qatari partners owning a minimum of 51% of the capital. under the tourism exemption to the Ministry of Business and Trade’s Investment Department for a consent to establish a wholly-owned subsidiary by which a hotel business can operate. However, this is an arduous process, which relies on the Minister’s discretion, and support will also be needed from the QTA in this regard.

Tara Marlow is the Partner, Property & Hospitality, Head of Ras Al Khaimah Office, Al Tamimi & Co. She is a UK qualified lawyer who specialises in all aspects of hospitality, real estate and development related matters. Tara can be contacted at t.marlow@tamimi.com

Frank Lucente is a Senior Associate in the Corporate Commercial Department of the Qatar office, Al Tamimi & Co. Frank advises clients on most aspects of the Corporate Commercial Law and provides practical advice on business structures. He is also involved in taxation matters. Frank can be contacted at f.lucente@tamimi.com

In order to register in the Commercial Register a foreigner needs to adhere to the capital requirements as established by the Foreign Investment Law. Failure to do so can have criminal consequences. For example, Law No (25) for the year 2004 Regarding the Control over NonQataris’ Practise of Commercial, Economic and Professional Activities in Violation of the Law (The Proxy Law) prohibits engaging in any “commercial, economic or professional activity” not authorised under the Foreign Investment Law. An offence can carry a one year prison term, in addition to a fine of up to half a million QR. Unfortunately, in Qatar we have not had the opportunity to see what a court will make of these prohibitions and the use of such wide terms. Furthermore, an exemption may not be available under the tourism exemption for operators only. So, what does an operator do?

The QTA’s requirements include a detailed feasibility study, an initial approval obtained from the Ministry of Municipality and Urban Planning, and the conducting of a service trial. For novices in the field, the QTA recommends engaging the services of recognised consultants for the project as this will facilitate communication between the QTA and the applicant. Operation is a big-ticket item for the QTA since it regards the lack of proper operational systems as one of the major problems hotel investors face after the hotel is established and is in operation.

One solution is to establish a company in Qatar with 51% Qatari ownership, but many international companies are wary of the same, even where the profit distribution to the foreigner is higher than the 49% of shares it holds. It often happens is that the operator enters into a management agreement with the owner, and provides expertise, operating systems, and the brand whilst providing management services to the hotel through its staff. But, without registering in the Commercial Register there is a risk that a breach of the aforementioned laws takes place.

Discussions with some of consultants to the hotel industry indicate that, in Qatar, the greatest problem is finding an operator for the hotel. Too often local investors build what they think will be a hotel, but the floor-plans used are only suitable for an apartment block. For example, a ten square meter room is set aside as a laundry only for the investor to find the hotel operator requiring a laundry ten times that size or an off-site purpose-built facility. This leads to the expense of major re-fits or to loss of a hotel operator and the investor being forced to rethink the projected use for the building.

If the words used in the Proxy Law, which are “commercial, economic or professional activity”, are given their literal meaning, the law probably has far reaching and unintended consequences. Any action in Qatar, however benign, would lead to a breach of a serious criminal offence. Meetings about business unconnected to Qatar, discussions about possible ventures outside Qatar, the delivery of firm brochures and analysis about world share markets would conceivably be prohibited.

Therefore, all potential hotel investors need to keep in mind that choosing an operator needs to be organised early in the piece, and certainly involved in the planning and design stages of the project in order to avoid rejection of the product at a later stage. What does an operator do? For international operators, there are also issues to be considered as well. The Commercial Register Law (25 of 2005) provides, “No person may engage in commerce or establish a commercial shop unless registered in the Commercial Register.”

It would be unlikely that the lawmaker intended such a wide operation without expressly overriding the existing laws. However, this does mean that for any hotel operator in Qatar, which has not established a legal entity, a great deal of care must be given to setting up the structure in such a way as to reduce any possible breach of the laws. For example, any staff located permanently in Qatar, must by law be employed by the sponsoring entity, so the hotel staff (including the management) must be employed by the hotel itself, not the operator. It is all the intricate matters of this nature that must be taken into account by international hotel operators in determining the best and most legally compliant structure to be used.

AUGUST 2013

MANAGEMENT

A RESPONSIBLE CITIZEN

In todayâ&#x20AC;&#x2122;s world, the fundamental architecture of society is changing fast, and achieving systemic change has been difďż˝icult for both the public and private sector. In a conversation with Tamara Pupic, Eman A.M Rafay, Director, E.A.R Enterprise Oman, explained how regional businesses could become vital development partners of a strong civil society. Can you explain to us the concept of a responsible citizen? Responsible citizens are the moral thread that holds the fabric of our society. I strongly believe that responsible citizenship is the difference between a leader, who is mediocre, and the one who is great. It is the ability to be morally accountable for ones action. A great leader will translate intellectual responsibility into action, by moving beyond the realm of self and pursuing the greater good with and through other people and institutions.

Eman A.M Rafay is the Director of E.A.R Enterprise, Oman. Eman is an advocate for women and youth empowerment with an interest in mentorship and capacity building. She graduated with a BA (Hons) in Social Policy from the University of York, UK. Eman can be contacted at e.rafay@erafay.com

In the context of the GCC region, after the Arab spring responsible citizenship is neither unique to civilians, nor to the public, private, and non-profit institutes. The discussion has shifted to what the new social contract will look like. How will the public and private sector come together and align their moral compass in a sustainable joint venture to support the interests of civil society, where profit will be measured alongside people and the planet?

Is it well received in the GCC region and/or what needs to be done further? When it comes to corporate responsibility, good governance, transparency and accountability are not as common as one would hope. Education here is the key.

The Pearl Initiative, which is a UAE based private sector initiative, enhances the capabilities of the private sector to develop, implement and monitor the effectiveness of better business practices across the GCC. It is not only working to engage the private sector across all areas associated with transparency and accountability, but itâ&#x20AC;&#x2122;s also collaborating with educational institutions, such as the American University of Sharjah, to build the capacity of future leaders to be responsible citizens. There should be greater participation from private companies to engage in such initiatives. From my experience, some businesses that do contribute to civil society are mostly piecemeal, lack strategy, and deliver under a package of CSR, which is still a concept and not a culture. Businesses must go back to the drawing board to strategically identify how and in which arena supporting the social fabric can increase the triple bottom line. It is only then that they will maximise market share with sustained loyalty. In addition, CSR needs to move away from communication departments and be integrated into the business strategy agendas of CEOs in order to reach the real return on investment.

MANAGEMENT

Responsible citizens are the moral thread that holds the fabric of our society. I strongly believe that responsible citizenship is the difference between a leader, who is mediocre, and the one who is great. It is the ability to be morally accountable for their actions.

How can businesses contribute to the welfare of a society? Business leaders must focus on a shared value, which is done by creating products and services that benefit not only the company, but also the whole society. If companies manage to incorporate social and economic value at the same time within their core service, only then they will be able to build reputation, growth, and competitiveness while gaining public confidence. Having said that, there are endless examples regionally and locally. One great company from this region, which truly understands corporate welfare, is Glowork from Saudi Arabia. Glowork, a recruitment site for women, is persistent in the process of pursuing innovative solutions to social problems in Saudi. It is part of an effort to empower women by being self-sufficient through employment.

Please tell us more about your work on empowerment of women and youth in Oman I chaired the first youth-initiated campaign in Oman called “2010 Omani Women”. Our slogan was, “Together we can A.C.E it”.The A.C.E. stands for acknowledge, celebrate, and empower. It is the most exciting and fulfilling project I have ever worked on. That year we celebrated the first Omani

Business leaders must focus on a shared value, which is done by creating products and services that beneﬁt not only the company, but also the whole society. If companies manage to incorporate social and economic value at the same time within their core service, only then they will be able to build reputation, growth, and competitiveness while gaining public conﬁdence.

Women’s Day nationally on 17th of October. The campaign has become recognised and institutionalised within the government. Since then, it has become the national identity campaign for Omani Women’s Day nationally under the Ministry of Social Development. One of the key projects we undertook during the campaign was “Al-Fen Yatahadeth” (“Art Speaks”). The basis was to empower women to participate in community development through art. As part of the programme, 20 young women were chosen from lower social economic backgrounds and from the pockets of Oman, outside the capital. They were expressing their vision and voice by painting and were mentored by eight Oman’s most famous and successful artists. Three years on and we continue to see the profound impact it has had on the participants and their communities. Needless to say, capacity building programmes that engage women need to be sustainable. They also need to become more economically innovative, which means that women need to discover ways of how they can contribute to the economic growth in the immerging industries. Women should take initiative and become proactive in utilising the benefits offered to them.

In your opinion, what are the good examples as well as remaining challenges for the empowerment of women and youth in the GCC region? In Oman, we are very fortunate to have an exceptionally visionary leader His Majesty Sultan Qaboos Bin Said, who has been pro-active in policy making for the greater benefit of civil society. It has started well-before we knew what we needed. Women empowerment has remained at the forefront of the agenda with equal opportunity given to men and women in personal, private and political life from the early 70’s. When it comes to youth empowerment, there have been huge investments in policy, education, and innovation sustainability, and carving eco-systems that will cater to the needs of youth development in all industries. I believe that the tradeoff of such generous investments is that people take these privileges for granted. Needless to say that some healthy competition should be encouraged. People should take areas of improvement and turn them into opportunities by asking, “What can I do?” instead of, “What can you do?” One aspect that is of great interest and passion to me is the spirit of mentorship, which is a civil duty that remains neglected. Many Omanis in senior positions, who have led successful careers, need to be more active in providing access to their wealth of knowledge and experience by offering guidance, advice and assistance from a real world point-of-view. The latter is increasingly important as in our part of the world there are graduates who join work with no previous work experience and unparalleled expectation.

MANAGEMENT

CLOSE THE

GAP

With online activism, social media scrutiny and 24/7 global news, protecting corporate reputation has never been tougher. Nicola Gregson, Managing Director, Ketchum Raad Middle East, shares with Tamara Pupic advice for regional businesses on how to align their words and actions. Please tell us more about Ketchum’s work in Qatar and the whole Middle East region? Ketchum Raad has been providing strategic PR and communications for clients across the Middle East since 2000. We have more than 35 PR consultants across our regional offices, including the UAE, Lebanon, KSA, Egypt, and, of course, Qatar. We have worked with a number of clients to ensure that they engage with the right stakeholders in the right way and at the right time. Nicola Gregson is the Managing Director at Ketchum Raad Middle East. She has over 20 years of European and Middle East PR experience across consumer, corporate, B2B. She holds BA (Hons) in Public Relations from the UK. Nicola can be contacted at nicola. gregson@ketchum-raad.com.

Please explain to us the concept of corporate reputation and its importance for businesses? Many organisations consider strong corporate reputation as one of the greatest assets to have. This is especially true for knowledge-based organisations, such as professional services firms in the consulting, legal, medical or financial sectors. Research shows that a good reputation demonstrably increases corporate worth and provides sustained competitive advantage. A business can achieve its objectives more easily if it has a positive reputation with its stakeholders, such as customers, opinion leaders, suppliers and employees. Ketchum recently carried out a global survey named Ketchum Leadership Communication Monitor (KLCM), exploring the perceptions of 6,000 people in 12 countries and on five continents regarding effective leadership, effective communication and the link between the two. Our findings highlighted the importance of a company’s corporate reputation revealing an intrinsic link between leadership perception and a company’s sales. It became apparent that poor leadership and poor corporate image hit sales

far harder than good communication enriches them. Globally, 60% of respondents boycotted or bought less from a company due to poor leadership behaviour. In the UAE, 58% of residents have purchased less of a company’s products or services and 51% have stopped purchasing a company’s products altogether based on the behaviour of a company. Whereas only 36% of respondents globally bought more from a company due to good leadership. Sales revenue is essentially a company’s lifeline and this data shows they need to pay attention to their corporate reputation in order to thrive and grow. Another interesting conclusion was that 66% of respondents named openness and transparency as the most important attribute companies need to have to be seen as effective corporate leaders.

In your opinion, how are regional companies building and maintaining their corporate reputation? Many companies in the region have shifted from a mindset of “Let’s do something” that includes executing a version of PR, which I call, “Spray and pray” – just try and do everything at once and hope something gets through all the clutter. Now, more established and experienced companies recognise the value of strategic corporate communications. They appreciate that identifying whom they want to reach and with what message, which is then executed in a focused and consistent way, will ensure that the reputation of the company is built upon. In this manner, the values of the business are reflected in what is received and known about that company.

Research shows that a good reputation demonstrably increases corporate worth and provides sustained competitive advantage. A business can achieve its objectives more easily if it has a positive reputation with its stakeholders, such as customers, opinion leaders, suppliers and employees.

What differences have you noticed in the region when compared to businesses in other parts of the world? We have some of the best businesses and business opportunities in the world, right here in the Gulf region. Many global companies have established their regional headquarters here, from all different sectors, due to both the skills and the talent available, and due to geography and time zones. International businesses bring with them established practices, but they are also aware that business cannot be replicated here in the same way as it is in the USA, Europe or Japan. This region is so different in terms of language and ways of doing business, and that is also true for communications and building corporate reputation. The key stakeholders of a business here may be focused on different values and interests to those on the other side of the world.

What are the three main steps that Qatari and regional companies should follow in order to build and maintain proper corporate reputation? Companies need to work out fundamentally what they stand for as an organisation, why they exist and link this back to their core purpose. Startups need to figure

The level of importance given to social media compounds the need to engage in an active dialogue versus just delivering a monologue. Organisations need to understand that they have to tailor information to capture individuals.

out what they are going to be good at and what they are going to be bad at. They cannot try to do everything. They need to figure out what no one else is doing and fill that gap. Corporate organisations need to be 100% clear on the above and avoid what we call the “say-do gap”, which means that companies need to close the gap between what they say they will do and what they actually deliver through action. The KLCM identified “closing the gap” between the words and the deeds as something that will grow significantly in importance over the next decade worldwide. Companies also need to gear all reputation building around the full set of audiences who can impact their reputation versus concentrating solely on the target audience.

What are the main mistakes that companies should try to avoid? Companies should avoid the “say-do gap”. They often fall into a trap of saying they will do more than they can realistically deliver. As a result, their audience looses faith in them. Another mistake corporate organisations tend to make is producing content on their terms only, which means that they produce a monologue that doesn’t engage anyone and often falls on deaf ears. An easy mistake to make is assuming that what you have to say, as an organisation, is relevant and interesting to the audience. In your experience, would this advice differ from Qatar to the UAE to KSA or similar? International companies can sometimes consider the Middle East as one broad region. Every communications professional on the ground knows that everything they do has to be relevant to that particular country and relevant to each particular business. Be specific! Focus on what you are good at and do well. Decide on what you don’t want to be, and don’t do it. How has the development of social media influenced the concept of corporate reputation? Social media has influenced corporate reputation massively. We live in an era of radical transparency. There is a 24/7 risk of social scrutiny, which means that the world can rapidly find out if an organisation is not fulfilling promises. The level of importance given to social media compounds the need to engage in an active dialogue versus just delivering a monologue. Organisations need to understand that they have to tailor information to capture individuals. KLCM findings showed that social media is a very difficult channel to achieve leadership credibility. For example, majority of people said they do not believe that CEO blogs are actually written by the CEOs themselves.

AUGUST 2013

SIGN OFF

THE POWER OF EXAMPLE The minute H.E. The Emir of Qatar Sheikh Hamad bin Khalifa ceded powers to the H.H Crown Prince Sheikh Tamim bin Hamad al-Thani, both Qataris and expats were thankful to him for all that he had done for the country. While he was instantly praised around the world for providing an example of true leadership, as the hash-tag #Thankyou #SheikhHamad spread across social media. From our side, we were thankful to him for creating the world which inspires our writings on a daily basis with its tradition, unity, and vision. As citizens of the world, we are thankful to him for proving that power can be used only in the nation’s interest. It confirmed the fact, which is often missed by other conventional leaders in today’s world, that the real power is held only by natural leaders since they have a deep and dynamic vision, rather than just authority. That made me think about the power of example. Psychologists state that children will pay more attention to what an adult does than to what an adult merely says. This is when leading by example starts or, at least, should start. Although many of the basic values do come from our parents, later on it becomes our own responsibility to model our small world to reinforce what has already been taught at home. So, surround yourself with good examples and, more importantly, strive to be one. This is what Abdulla Ahmed Mannai, Chairman and Managing Director, Oryx Engineering Solutions Group (OES), said in one of our previous stories, ”Arrive early, listen carefully, empower and motivate, invest in soft infrastructure and human capital and share the credit.” It is also what Mansoor Al Ansari, Acting COO of the Qatar Stars League, QFA, said in the interview, which you will read next month, about EO Qatar, “When you see people around you doing something that you think is difficult, you are like, “If they are doing it, then I can do it!” So, we share that energy and support each other by being passionate, motivated and ambitious. That’s why all of us keep on moving forward.” However, positive examples thrive where overall societal beliefs serve as a fertile land for the seed called opportunity. In line with that, positive attitudes towards entrepreneurship in an economy can indicate the propensity for people to engage

in this activity. Global Entrepreneurship Monitor’s Global Report 2012 assessed societal impressions about entrepreneurship and, according to their data, the Middle East region is extremely positive towards entrepreneurship (81%) while, for example, the EU records 69%. That corresponds to higher levels of perceptions of entrepreneurial opportunities (41%) in the region, which are only slightly behind the US (43%), and higher than the EU (31%). .As you read this, one more world, is getting closer to change and also to an opportunity to reach long-awaited results. With the last day of August, Pascal Lamy, Director General (DG), World Trade Organisation (WTO), will end his second four-year term as the WTO chief and hand it over to Roberto Carvalho de Azevedo, Brazil’s Ambassador to the organisation since 2008. Among many positive things during his time, Lamy helped the WTO to expand its membership, but was unable to move the members to a new trade agreement. Will Azevedo use the opportunity to “heal the organisation” (these are his own words) as it struggles to maintain its relevance in the international trade world? Will he provide us with an example of how developed and developing countries can reach a consensus for the benefits of businesses around the world? He said that he would. What do you think? And, how will he manage to do that? From one side, he is known as “a gifted negotiator and a consensusbuilder”. Having spent quite some time in Geneva, I must say that I haven’t met anyone there who isn’t just that! Exploring the potentials of these talents could be one of the reasons why the name of Qatar’s capital is so popular within trade negotiations. And, for more than a decade. On the other side, Azevedo is also known for his ability to aggressively press Brazil’s agenda within the WTO. I suppose that our excitement with the fact that the new DG comes from an emerging economy relies on this – the expectation that he will push things forward! Till my next column in our October issue, let me know your opinion at tamara.pupic@cpimediagroup.com