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September 2013 more inside...
Expats in the Gulf – what’s the draw?
Contents
Cover Story
12
46. Motoring Lincoln MKX
16
22
Economic Profile
NSA targeting the EU
Bahrain
18
Real Estate A Global Perspective
Spying Scandal
24
Consumer Boom
Rise of the consumer class in India and China
36. Somalia
The Pirate Hunter
42. Migaloo
Super-rich Submarine Yacht
20
26
Europe’s Bargain Properties
Mediocre transition towards Democracy
Real Estate
Yemen
47. Lifestyle
Your favourite luxury brands
48. Cars
Nissan Patrol - Guiness Record
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Gulf Financial Insider
In order to succeed, your desire for success should be greater than your fear of failure. - Bill Cosby
Publishers Nicholas & Rebecca Cooksey Editor in Chief Nicholas Cooksey Assistant Editor Melissa Nazareth Layout Designs Dhanraj S
Comments...
Admin & Finance Nikesh Pola Sales Account Manager Chelsea Copenhaver
The future is now… Accidentally cut your ear off? No problem, just 3D print a new one. Last month, researchers in China unveiled a 3D printer that prints living tissue. And they aren’t the only ones 3D-printing spare parts for people. Earlier in 2013 a team at Cornell University in New York also demonstrated an ear printer, in San Diego, California, are on the way to building fresh human livers In 2012, New Scientist reported on an 83-year-old Belgian woman who is able to chew, speak and breathe normally again after a machine printed her a new jawbone. Her replacement jaw has proven as functional as her own used to be before an infection all but destroyed it. Doctors were astonished at the success of the four-hour jaw implant operation, which took place in June 2011 but which has only just been revealed. 3-D printers can produce gun parts, aircraft wings, food and a lot more, but this new 3-D printed product may be the craziest thing yet: human embryonic stem cells. Using stem cells as the “ink” in a 3-D printer, researchers in Scotland hope to eventually build 3-D printed organs and tissues. The words fascinating and remarkable do not remotely describe this technology. Unbelievable comes close, yet here we are. I cannot imagine advancements in the next 20 years, let alone 100 years from now.
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Business Development Manager Sueallen Menezes Redia Castillo Editorial Contributors Nicholas Cortes Ramzy Baroud Amy Vaya Richard Koch Piers Grimley Evens Rob Howard Colin Freeman Printed at Awal Press, Kingdom of Bahrain. Distribution Bahrain Al Hilal Corporation, Tel. +973 1748 0800 UAE Jashanmals, Tel. +971 4341 9757 Published by:
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Issue 104
Bahrain Economy
Yemen
The UN-Revolution
Iran
Banned for Being Attractive
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Send your views to info@Gulf-Insider.com The multi-award winning Arabian magazine
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Issue 103
Bahrain
Signs of Real Estate Recovery
Dubai
Expat Marriage Meltdown
Bahrain
Why Smarter Government Benefits All
Interview
Indian Ambassador to Bahrain Dr. Mohan Kumar
INCREDIBLE India!
So, Gulf Insider did an issue on Indian Business in Bahrain; I don’t mean to be racist but Indian businessmen can be very frustrating! I’ve worked as a Sales Executive, in Bahrain for the past 5 years; Indians are the worst clientele ever – they will extract every bit of discount from you. I always tell my Indian friends that Indians are a beautiful people…as long as they’re on your side of the table. Frustrated Salesman
Indian Business in Bahrain Indian expatriates’ role in the trade history of Bahrain
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Issue 102
Volatility -
a new asset class?
4 experts reveal why they believe central banks retreat from stimulus programs will create significant market volatility for years to come.
UAE
I drove by a few labourers recently; it felt so evil sitting in my air conditioned car while they were baking in the hot sun outside. I think they were Indian workers. I’m aware that there is an arrangement which helps Indian workers in Bahrain – hotline numbers, legal assistance etc but was wondering as to how many workers actually know about this privilege. I urge the Embassy of India in Bahrain to conduct awareness programmes about their efforts towards helping these poor guys; they need to know they are not alone.
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HR managers need to realise that age doesn’t really matter these days. You have youngsters maturing faster than ever and you also have old people who never cease to be young at heart. It’s the attitude that counts – the willingness to learn and be productive. BMW’s and McDonald’s initiative to accommodate older (age-wise) staff is commendable! I suppose there is sister concern of Saudi Aramco that hires only people who have retired from the main organisation.
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Anti-Ageing
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I was reading the article ‘Smarter Government with Benefits for All’. Most locals here have the habit of complaining that the government doesn’t really make an effort to provide employment opportunities. It baffles me as to how ingrate these guys are because, trust me, ‘your government’ provides you more than you deserve. Now, I agree that there are Bahrainis who are ambitious, hardworking and enthusiastic; but there are set of them who don’t even want to move a finger or take any responsibility but they expect perks and benefits. There is NO such thing as free lunch!
Reader
Hospitality Market
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Free Lunch? Learn to Earn…
The Arabian Review
Issue 101
Salah
100 Leaders in Bahrain - Part 2
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Gulf Insider September 2013
Retraction Statement This is to acknowledge that there was a printing error on Page 23 of Gulf Insider’s June ’13 issue. We intended to feature Dr Ebrahim Mohammed Janahi, President of University of Bahrain, in our May 2013 issue (which we did) and Professor Abdulla Y. Al Hawaj, President of Ahlia University, in our June 2013 issue. We trust that you appreciate that putting a 100-leader feature together in a short span of time is a challenging task. Nevertheless, we apologise for the same.
Bahrain
Gulf Round-up Middle East hotels outsize Europe The Middle East’s reputation for monstrously-sized hotels has been backed up with new industry statistics showing recent developments have on average 50 percent more rooms than those being built in Europe. The 485 hotels built in the Middle East and Africa during July had a total 118,535 rooms, an average 244 rooms per hotel, according to consultancy firm STR Global. Meanwhile, in Europe the pipeline consisted of 813 hotels with 133,797 rooms, an average of 165 rooms per hotel. In June, the head of the world’s largest hospitality group branded Dubai’s most grandiose hotels as “monstrous” and said he was not interested in building such properties. Across the region, Oman has the most hotel rooms in development, at 4577, according to STR Global. It is followed by Saudi Arabia, Qatar, the UAE, Kuwait and Jordan.
Rents fall across all sectors in Abu Dhabi Rents in both the residential and office sectors continue to fall in Abu Dhabi despite government efforts to force employees to live in the emirate, according to a new report from the CBRE. And while residential rents are predicted to start a slow recovery, office rents look set to fall even further over the next 12 months, it concludes. The second quarter Marketview Report by international real estate consultancy CBRE shows residential rental fell by 4% between April and June 2013. That continues the trend in the emirate with rents down 10% compared to 12 months ago, despite increased interest due to new government rules stipulating that housing allowances to its employees will only be paid to those living in the emirate, according to the report. - ARABIAN TRAVEL NEWS 8
Gulf Insider September 2013
Qatar government spend below target Qatar’s government spending rose 2.2% to a record 178.2 billion riyals ($48.9 billion) in its last fiscal year. The figure shows a sharp slowing from double-digit increases seen in the previous decade, Reuters reports It is the first time that the government’s annual spending fell below its budget plan since 1990 – suggesting Qatar is having difficulties driving forward its myriad infrastructure and construction projects. Some big projects, such as the $15.5bn new airport, have been delayed by difficulties in planning, coordination, meaning the government has spent less than it had originally planned. Total state spending came in slightly below the initial plan of QR: 178.6bn ($49bn) for the fiscal year that ended in March, finance ministry data released by the central bank showed. Development expenditure was QR: 49.3bn ($13.5bn), below the QR: 62.1bn $17.05bn) that the government had originally earmarked for the year. – CONSTRUCTION WEEK
Saudi wife angered after husband compares her to car A Saudi woman has walked out on her husband after he compared her to the car he bought through a bank loan. A man familiar with the case said that the husband told his wife in her thirties that he had taken out a loan from a bank before their marriage to buy the car and to pay for her dowry. He added that one loan was enough and that while he expected returns if he ever wanted to get rid of the car, he did not anticipate any if there were similar plans for the wife, Al Weam news site reported. The wife, angered by her husband’s remarks, decided to leave him and take their children back to her parents’ home. Most readers sympathised with the wife and insisted on a more considerate attitude from the husband. However, some readers said that the wife had overreacted and that rushing to a negative decision could end their union and deeply affect the future of their children. - GULF NEWS
Business News
Britain has ‘secret listening station in Middle East’ Staff at the internet monitoring station, whose exact location has not been revealed, are reportedly able to tap into and extract data from underwater fibre optic cables passing through the region. Great quantities of emails, telephone calls and web traffic are monitored in this way and then processed and passed on to GCHQ in Cheltenham, according to The Independent. The intelligence is also shared with the US National Security Agency (NSA), it is understood. Information about the listening station was revealed in leaked documents obtained from the NSA by Edward Snowden, the CIA whistleblower. The UK Government says the base provides a crucial “early warning” system for potential attacks around the world and plays an important part in the so-called war on terror. The Middle East listening station picks up messages and data travelling through the submarine cables in the region, which are then copied on to a computer system and examined. The system was reportedly established while Labour was in Government, under a warrant signed by David Miliband, who was Foreign Secretary at the time. The warrant gave GCHQ the power to gather intelligence about the “political intentions of foreign powers”, terrorism, proliferation, mercenaries and private military companies, and serious financial fraud. Intelligence sources are said to have denied the purpose is a general harvesting of all communications, saying that the operation is specifically targeted at security, terror and organised crime. – DAILY TELEGRAPH
Emirates launches private jet service Dubai’s Emirates Airline has introduced Emirates Executive, a private jet service that allows passengers to book their own 19-seater Airbus A319 private jet through a new-launch website. The service will enable customers to charter flights to locations worldwide, stretching beyond the airline’s existing network and offering customers the ultimate luxury travelling experience. The Airbus A319 jet is split into two main zones, the first of which includes a dining and executive lounge area. In this section, up to 12 passengers can use the work area, which is equipped with mechanised tables and built-in 42-inch screens, or relax on one of two large sofas in the dedicated rest zone. At the back of the aircraft, there are 10 suites with lie-flat seats and individual 32-inch screens, which will feature Emirates’ award winning ‘ice’ inflight entertainment system, as well as live TV, video conferencing and internet access. The jet also boasts a Shower Spa, where weary travellers can freshen up with a full-height shower and enjoy a wide selection of all-natural skincare products. – DESTINATIONS OF THE WORLD
Army won’t suspend contracts with Al Qaeda-tied companies, citing ‘due process rights’ The U.S. Army is refusing to suspend contracts with dozens of companies and individuals tied to Al Qaeda and other extremist groups out of concern for their “due process rights,” despite repeated pleas from the chief watchdog for Afghanistan reconstruction. In a scathing passage of his latest report to Congress, Special Inspector General John Sopko said his office has urged the Army to suspend or debar 43 contractors over concerns about ties to the Afghanistan insurgency, “including supporters of the Taliban, the Haqqani network and al Qaeda.” “The Army Suspension and Debarment Office appears to believe that suspension or debarment of these individuals and companies would be a violation of their due process rights if based on classified information or if based on findings by the Department of Commerce,” Sopko said, summing up
the Army’s position. Sopko pointed out the apparent disconnect between one part of the Army that is killing insurgents and the other part that allegedly is doing business with them. “I am deeply troubled that the U.S. military can pursue, attack, and even kill terrorists and their supporters, but that some in the U.S. government believe we cannot prevent these same people from receiving a government contract,” he wrote in a letter attached to the report. In the wake of the report, a bipartisan group of lawmakers introduced a bill aimed at restricting U.S. agencies from awarding contracts to supporters of extremist groups in Afghanistan. The bill would give the inspector general’s office the authority to suspend Afghanistan contractors when agencies fail to review companies the office has flagged. - FoxNews.com Gulf Insider September 2013
9
News Business
Kuwait cracks down on expat renters Authorities in Kuwait have begun evicting expat tenants from private accommodation owned by citizens of the Gulf state, it was reported, in the latest example of the country’s war on foreign workers. Municipal authorities have started searching houses and villas owned by Kuwaitis that have been rented out to expats. Sources at the municipality told the newspaper that officials were seeking to evict those in dwellings designated as ‘private housing’, but were actually being rented out to multiple occupants. According to the newspaper, residential buildings that are rented out expats must be classified as ‘investment accommodation’. The sources said many of the private dwellings in question were being occupied by single expats and often included partitioned rooms. Five months ago Minister of Social Affairs and Labour Thekra Al Rasheedi revealed Kuwait would cut expat numbers by 100,000 each year over the next decade in order to reduce the total number from about 2.6m – two-thirds of the total population - to 1.6m. Expatriates that commit repeat traffic offences also are being deported in a targeted crackdown.KUWAIT TIMES
Elmiraj Concept Explores Top of Cadillac’s Range CARMEL, Calif. – Cadillac revealed the Elmiraj Concept, a grand coupe expressing the pure enjoyment of driving and exploring new dimensions for Cadillac’s ongoing expansion. The Elmiraj Concept showcases a new vision for luxury driving and the top of the brand’s expanding range. “Cadillac is fueled by the creativity of our designers, led by Ed Welburn,” said Bob Ferguson, senior vice president, Global Cadillac. “Elmiraj provides a look inside the Cadillac Studio on how we envision performance and luxury for the next generation of luxury drivers.” A modern update to the classic format of a two-door grand coupe, Elmiraj is a pure expression of streamlined design and engaging rearwheel drive performance. The concept advances Cadillac’s philosophy of dramatic design and performance, and its commitment to lightweight, agile cars. Elmiraj is constructed with chassis and structural elements of an ongoing Cadillac vehicle development project slated for future production. This new vehicle architecture expands the brand’s commitment to lightweight RWD performance, exemplified in the ATS sport sedan and the all-new and elevated 2014 CTS launching this fall in the U.S.
Bahrain to increase rent at industrial site by 6000% Bahraini officials are to increase rents in an industrial area on the island state by as much as 6000 percent, in a bid to stem accumulated losses due to rates previously being too low. Bahrain’s Municipalities and Agriculture Affairs Ministry is planning the rate hike at the industrial area in Hidd, the Akhbar Al Khaleej newspaper said. The ministry previously received nominal rent for space from contractors at the site and said it was not enough to cover ongoing losses, officials said. The new rental levels will come into effect when current leases expire and will help raise revenues for the area to BD2m ($5.28m) a year, up from previous levels of around BD25,000, the ministry said. A total of 51 contractors at the site will be impacted by the decision. – ARABIAN BUSINESS 10
Gulf Insider September 2013
Business News
Indian workers moving to Gulf drops more than 75% The number of workers from southern India moving to the Gulf to find work has declined by more than three quarters since 2008, with government officials citing improved wages and conditions in India as the main contributing factors. Figures from the Indian Ministry of Overseas Indian Affairs showed 88,389 Indian workers from southern India left to work in the Gulf during the height of the real estate boom in the Middle East in 2008. The number had fallen sharply to 21,129 last year, a decline of 76 percent. Figures for the first seven months of the year show 10,317 workers moved to the Gulf to seek employment. Taken as a reflection of the full year this would give a figure of 17686, which would represent an 80 percent drop in five years. “The decline in number means that the job scenario here for them is improving and they are satisfied with payments here. This could also mean people are not ready to go abroad for lesser pay and could land in a job of their choice here,” D Jai Sankar, Protector of Emigrants (PoE) at the ministry, was quoted as saying by the Times of India newspaper. The UAE was the focus for much of the construction boom, building mega projects such as the world tallest tower – the
Burj Khalifa – in Dubai. A total of 56,220 workers in the last five years moved to the UAE, ranking it as the number one destination. Second was Kuwait with 52,739, followed by Malaysia, which received 43,564. Oman (25,460), Qatar (13,188), Bahrain (6,555), Saudi Arabia (4,011) also attracted workers. – ITP.NET
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Archaeological Expedition on the Royal Burial Mounds
Turkish Airlines’ Financial Statements Reported Turkish Airlines’ first half consolidated financial statements were reported to Borsa Istanbul. Compared to the same period of 2013, Turkish Airlines sales revenue increased by 23% reaching 8,2 billion TL. Compared to the first half of 2012, overall net operating profit improved 192% to 439 million TL. Net profit decreased by 29 percent to 121 million TL , mainly due to currency translation differences and tax effect. During the first half of 2013, 22,4 million passengers were carried impliying a 26% increase in passenger traffic. In response to the 21% increase in available seat kilometers (ASK), revenue passenger kilometers (RPK) increased by 27%, resulting in 3,4 points increase in passenger load factor which came to 78,9% systemwide. According to the International Air Transport Association (IATA) the overall industry growth for the same period in terms of passenger, ASK and RPK was 3,7%, 3,9% and 4,8% respectively.
Bahrain’s UNESCO World Heritage Site of outstanding global value ENJOY AN EVENING WITH LIVE ENTERTAINMENT BY ANNA THOMPSON-HALL & FRIENDS MASTER OF CEREMONIES MR. IAN FISHER OF RADIO BAHRAIN MEET DR. STEFFEN TERP LAURSEN AND HIS TEAM
October 24th - 7pm
• Buffet with live cooking stations. • Raffle Draw with exciting prizes. • Ticket price incl. dinner, entertainment & welcome drink
“Every archaeologist knows in his heart why he digs. He digs... that the dead may live again, that what is past may not be forever lost, that something may be salvaged from the wrack of ages, that the past may color the present and give heart to the future.” T. Geoffrey Bibby. 1956
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Gulf Insider September 2013
11
Feature Expats
Gulf Expats! Why there are few regions of the world so awash with expatriates as the Gulf. By Nicholas Cortes
T
here are few regions of the world so awash with expatriates as the Gulf, with its overtones of modernity, its preference for relatively cheap labour to undertake those menial tasks and middle/ senior management roles not always sought or wanted by its indigenes, as well as providing a huge lure by providing tax free salaries. Labouring expats and domestic workers, generally without their families, are not seeking to stay indefinitely, often only till the end of their contracts or after sending sufficient funds back to families at home and paying off hefty, ‘send me over’ fees, to middle-men. But for the rest, the professionally qualified and semi-professionals, well with the roll-over of contracts, many expats can secure a sinecure for life.
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Gulf Insider September 2013
For some, a lengthy stay can also mean qualification for naturalization and the claiming of highly valued Bahraini citizenship although that usually requires between 20 and 25 years of prior residency. Even then, it is by no means an automatic bestowal. It varies greatly with the ‘previous nationality’ and current/former position of the individual applicant. There is a high incidence too of ‘foreigners’ previously associated with the Security forces, also gaining Bahraini citizenship in a shorter period. Unlike a number of mainly Western countries, there is no incentive program for “business migration” requiring potential business people to come with a specified amount for investment funds to deposit in local banks in order to get a permanent residency visa. Then, depending on the country of choice,
they are able to acquire citizenship in anywhere between three and seven years of residency. Mind you, the Australian Government, which years ago started such a business migration scheme, found numerous instances of business people coming with their million dollars but re-exported it ‘home’ once they had received their permanent residency, so that another extended family member could use the same sum for their application! Where there is a will, there’s a scam! Nor does Bahrain recognize dual citizenship as many countries do, to their business advantage, so it generally means handing over the ‘old’ passport in exchange of a shiny new Bahraini one. Then the Immigration authorities send the ‘old’ passport back to the new
Expats Feature
citizen’s former Embassy… and most Embassies simply hand them back to their supposedly ‘former citizen.’ With a nudge and a wink, everyone is happy. No pesky difficulties with say a Shengan visa! Straight through the UK and other EU citizens channel at Heathrow. So much easier! But for most Western expats, there is very little real incentive to denounce their former citizenship when it is so easy to retain both foreign and Bahraini citizenship. Except perhaps, that it allows ‘foreign citizens’ to conveniently ‘park their foreign citizenship,’ and claim Bahrain as the principal place of residence for tax purposes. Yes, that does bring benefits! Now all of that makes logical sense and
moreover, it is not illegal. Many expats continue to live “the life in-between” with both benefits and enjoyment, a foot in both camps and time in two countries they regard as home. As Cole Porter’s song puts it so fittingly, “Nice work if you can get it, and you can get it if you try.” No, the issue about expat use-by dates is more focused on the ‘demand’ side, the often diminishing return of expertise and cutting edge relevance the longer they are away from the professional coal-face from which they were recruited. Timeliness is essentially the reason why expats are recruited, to divest themselves of that expertise to the benefits of locals so that they can seamlessly take over when the expat’s contract is up. It is supposedly, a finite thing. Unless there is significant ‘professional upkeep’ through continual training, conference attendance or simply through ‘exposure development’, there is a distinct possibility of the expat being left behind in ‘net worth’ to an employer. While that may be less relevant in a managerial sense to a technological one, where the benefit of ‘experience’ is promoted as a key factor, concepts of management and administration are also changing. And presumably that is what employers are seeking to have passed on to their own people, ‘World’s best practice’ and ‘Benchmarking’ expertise. Then of course, there is always the conundrum that prospective employers face; do we stick with the gnarled, grizzled, often irascible expat, who knows that the world has passed them by and would never get a similar job like this one ‘at home,’ but is nevertheless the ‘devil we know.’ Or do we get a bright eyed new chum, full as a goog of new techniques and methodology, often better formally qualified, but less practiced and often coming at a higher price. Bit like the choice between the young doctor freshly out of med school, or the old “years at it” Dr Finlay! Often in those circumstances, the ‘comfort blanket’ approach is the more attractive and easily rationalized, after all “That old appointee knows our culture, our way of doing things, the order of the local universe and our sensitivities.”
Expats can play a major role in evolving policy and making recommendations or indeed make significant and important decisions. Powerful stuff and worth retaining! And then there is the capstone, devout loyalty too. In many societies that ace trumps critical analysis, confrontation and “calling it as it is” the qualities that often got the expat the job in the first place! And where constructive criticism no longer cuts the mustard, becoming a ‘tummy tickler’ has its advantages in a non-confrontational society, and it certainly keeps the pay-slips coming. I knew a colleague who complained to the management that he was mentally under-employed and that he was capable of doing lots more, teaching his colleagues everything he knew. He was not after others jobs because he was intent on going home at the end of his contract. Completely transparent encounters! “Do not worry about these things, Mr Frank. We see you like a Ferrari, that we keep in the garage. You do not drive a Ferrari every day, but only when you do want to drive it in a hurry. Then you need to know it is reliable and can respond perfectly.” The chap is still known as ‘Ferrari Frank’ and still employed! His performance is never in doubt and of course, the actual Ferrari ‘driver’ is never an expat! But they like to have a Frank in the co-driver’s seat to call the curves or obstacles on the road ahead yet be able to ignore them at will as well! And wouldn’t we all like to be managers able to command a Ferrari any time of the day or night and rest comfortably knowing that the summons is only just a phone call away! Mind you, I have sat in a few meetings where a foreign company was Gulf Insider September 2013
13
Feature Expats
Image source: www.brentstirton.com
making a sales pitch and although their spokesman had been introduced to the Bahraini leader, they kept looking to the expat present, with only an occasional look elsewhere. As though thinking, “Convince the expat, and we are in like Flynn!” Big mistake! Sure, expats can play a major role in evolving policy and making recommendations or indeed make significant and important decisions, but on the really big decisions, particularly at Ministerial or Board level, it is invariably a Bahraini or Arab decision. Rightly so, and that is the way it should be where generally the expats are advisers, irrespective of title or perceived level. There is, of course, the possibility of the long term expat “going native” (which some folks at home often label as “going feral,”) trying to keep a foot in both camps till they do more of a split than you see at the Bolshoi! Often not ‘really’ a foot in neither world, semipermanent absentees, more locale than local, and never quite belonging in either! Frequently too, ‘spinning the gloss’ about the delights of life in the ‘other place’ and then vice versa in the ‘other place,’ in a sort of ‘home is where I hang my hat,’ way. Like forever living in Spain because there is sunshine and no rain, and then
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Gulf Insider September 2013
Expats are valued members of any developing society and their expertise is sought, welcomed, and usually handsomely paid for at the middle and senior levels. complaining, “the fish and chips are bloody awful!” It is the nature of the beast that hops on either legs and it doesn’t cut any ice with the cops when caught not wearing a seatbelt and hauling out the ‘other’ passport, “because I don’t use them at home!” Well usually it doesn’t! In many industries there is a recognition that staying in one place and reporting back to a foreign head office can often lead to the ‘surreptitious conversion (I am unsure whether it is in fact ‘con’ or perhaps more aptly, ‘per!’) syndrome.’ The longer the stay, there is an increasing tendency to “become representative of things at the outpost level,” rather than the representative of headquarters policy. What is sometimes dulled after years of service ‘out there’ is the critical analysis function, yet that is what the indigenous employer has presumably employed the expat for in the first place. Expats are valued members of any developing society and their expertise is sought, welcomed, and usually
handsomely paid for at the middle and senior levels. In civil service employment, there is generally no annual cost of living adjustment as there is for locals. Expats are construed as already paid well enough, and unlike the ever annually toped-up indigenous colleagues, expats are expected to absorb any cost of living adjustments or currency fluctuations. It is probably also part of the reason for ‘keeping them on!’ A newly recruited employee is likely to want a whole lot more for starters. And the word gets around … Expats should be a ‘temporary phenomenon’ because the purpose in employing them is always transitory, until a local learned their ‘skills.’ Like weaning babies, there comes a time when succor needs to stop and nations, businesses and individuals, need to practice what they have supposedly learned. GFI
The author is a former senior diplomat and political adviser with extensive international experience in strategic and parliamentary affairs, and is currently working in Bahrain
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Bahrain Economy
Profile of
Bahrain’s economy
T
he opening decade of the 21st century proved a period of rapid economic development in Bahrain. Real output growth averaged 5.0% annually between 2000 and 2012, driven by high oil prices, rising government spending, expansion in property and construction as well as high demand for private social and personal services (mostly private health and education). Bahrain, partly due to its relatively modest hydrocarbon endowments, has long been a regional pioneer of economic diversification. The past decade proved transformative in this regard owing to the
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rapid expansion in a number of sectors. With the rebased real GDP using 2010 as the base year, mining and quarrying (primarily oil and gas) accounted for 44% of real GDP and 25% of nominal GDP in 2000. This proportion halved to 20% and 24%, respectively, in 2012. With the exception of real estate, and mining and quarrying, the share of other sectors in total GDP increased between 2000 and 2012. Specifically, construction, transportation and communications, and social and personal services registered double-digit growth on average during the same period.
By industry, over one-third of the local population has been employed by the government, with an additional 27% engaged in manufacturing and trade (retail).
Economy Bahrain
Overall output was somewhat subdued owing to the 8.5% fall in oil production that, in turn, was ascribed to a decline in Abu Sa’afa crude oil production (due to maintenance). Overall real growth stood at 3.4% in 2012. Growth in the hotels and restaurants sector was the fastest in 2012, representing 26% YoY, on an average. This has been due to a rebound from 2011, as evident when comparing output growth in 2012 with 2010. Manufacturing as well as social and personal services grew a robust 5% and 11%, respectively, with petrochemical and oil-related industry expansions, and private health services leading growth in the respective sectors.
Demographic description of the expat population is indicative of the significant dependence on low wage workers who are primarily employed in the laborintensive retail and construction sectors.
Population
Recent trends
Although the global crisis created challenges for Bahrain, the economy has maintained the growth momentum. Nonetheless, the pace of real GDP growth halved from 6.3% to 3.1% between 2008 and 2009. After a light recovery in 2010, further disruptions during 1H11 constrained real GDP growth, with the economy expanding just 1.9% in 2011. Thereafter, it has recorded consistent expansion. This was completely driven by the non-oil sector, which expanded at an annual rate of 6.7% in 2012.
According to the Central Informatics Organisation (CIO)’s 2010 Census, Bahrain’s population grew at a rapid pace between 2001 and 2010, nearly doubling from 0.66mn to 1.22mn. This implies an annual average growth rate of 7.2%. According to the Census data, nonBahraini population increased 11.4% per year vis-à-vis the 3.7% growth in local population. Consequently, non-nationals, as a percentage of the total population, rose to 54% in 2010 from 38% in 2001. In terms of the age composition, the local population is fairly young, with 42% under the age of 20, and just 4.1% over 65. For Bahrainis, the dependency ratio, which is commonly used to compare the size of working age population to the “dependent” population, decreased between 2001 and 2010. This indicates a relatively larger working-age population in 2010 relative to 2001. The dependency ratio stood at 89% in 2010 compared to 104% in 2001, implying population in the age group of 20–64 is now larger than the dependent (0–19 and 65+) segment. Non-Bahraini population is overwhelmingly in the working-age category, with 88% aged between 20 and 64 as of 2010, and is characterized by a lower dependency ratio of 14% visà-vis 20% in 2001. Also, non-Bahraini males outnumber females, with 2.6 males per female. Demographic description of the expat population is indicative of the significant dependence
on low wage workers who are primarily employed in the labor-intensive retail and construction sectors. Both males and females, in the age group of 25 and 35, have the highest levels of participation, followed by a steady decrease for males and a more pronounced decline in female participation.
Labor market
Total employment in the Kingdom increased from 307,000 to 647,578 between 2002 and 2013. Reflecting the rise in the number of expatriates, the share of Bahrainis, as a percentage of the workforce, fell from 34% to 23% during the same period. By industry, over one-third of the local population has been employed by the government, with an additional 27% engaged in manufacturing and trade (retail). Despite a large proportion of the population employed in the public sector, it should be noted that this share is significantly lower vis-à-vis rest of the Gulf Cooperation Council (GCC) region. Among non-Bahrainis, 63% are employed in construction, trade or as domestic workers, as illustrated in the charts and table below. GFI
Extracted from the newly published Year Book by the Economic Development Board. To read the report in full visit Bahrainedb.com Gulf Insider September 2013
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Global Real Estate
The state of real estate: A global perspective Four experts share diverse views on what sectors are offering the most opportunity.
Michael Acton
Research Director AEW Capital Management Acton believes the U.S. Real Estate Investment Trust (REIT) market will have continued improvement in the year’s second half, albeit with increased volatility. There are quite a few bright spots, and Acton believes one has gone largely unnoticed – the significant improvement in the federal government’s budget position. Although still large, it is about half the size of last year’s deficit, according to the U.S. Congressional Budget Office (CBO), and is expected to stay relatively stable over the next
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couple of years. A few challenges accompany the bright spots, though. Acton would like to see a stronger economic recovery, as real estate can only do as well as local economies. And housing has a big multiplier effect, so its impact is significant. The National Association of Realtors estimates that each home sale generates more than $50,000 for local communities from an increased need for goods and services. Still, Acton believes opportunities are plentiful. Short-term and possibly medium-term real estate market fundamentals are strongest for apartments as the rental trend continues.
“Another fundamental market recovery will likely begin in the office sector later this year and into 2014,” said Acton. “And with its close connection to housing, the warehouse sector also could be very bright.”
Sam Martin
Director of Research & Strategy AEW Europe For a few years now, the euro-zone crisis has been preventing higher property investment volumes across much of Europe, especially for the crisis countries (Greece, Italy, Spain, Portugal and Ireland). However, Martin points
Real Estate Global
The National Association of Realtors estimates that each home sale generates more than $50,000 for local communities from an increased need for goods and services.
out that investor sentiment appears to be changing, with the ongoing crisis actually stimulating property investment rather than dampening it in some crisis countries and Central and Eastern Europe. “Despite the difficulties the European capital markets face, private and institutional investors are increasingly regarding property assets outside the super prime category as attractive, with some resilience to any future market disruptions from the euro-zone crisis,” said Martin. Considerable Sovereign Wealth Fund investment activity seen in 2012 and early 2013 is one example of this emerging trend. Also, as price expectations between potential sellers and buyers converge, investment volumes in the crisis countries are expected to increase. For the last several years, the price buyers were willing to pay for a property in these regions was often lower than sellers would accept. Martin also mentions that the crushing of income yields across most classes of risk assets from governments’ fiscal policies and quantitative easing has rendered real estate a relatively attractive investment proposition in Europe. That said, he does point out that there are certain risks associated with real estate investments that investors should be aware of, including less liquidity and fluctuating real estate values. In the residential space, London and German markets are expected to see continued price increases, while prices in France remain on the decline.
Dmitri Rabin
Senior Securitized Asset Analyst Loomis, Sayles & Company For the most part, the U.S. housing market has had good news in the past year, according to Rabin. In fact, through April 2013, prices are up 11.9%, as measured by the CoreLogic® Home Price Index Report, excluding distressed sales. Rabin points out that this measure excludes house sales that have recently been through foreclosure or other types of distressed sales, and shows that recent increases are broad-based and not just seasonal. “At the state and local levels, prices also appear to be strong. House prices
were up in 49 out of 50 states, with the largest increases in states that experienced the largest housing bubbles and subsequent declines (CA, AZ, NV and FL),” said Rabin. He expects states with the slowest foreclosure process and largest remaining pipeline of distressed properties to go up more slowly, such as NJ and IL. “It is important to note that even after the recent increases, U.S. national home prices are still down 22% from the peak. So there is significant room to recover,” said Rabin. Loomis Sayles expects the growth of home prices to begin to slow over the next 18–24 months to midsingle digits. The increases of 8%–12% in 2013 and 5%–7% in 2014 that Rabin anticipates would still be healthy.
Philippe Waechter
Chief Economist Natixis Asset Management Real estate recoveries in the U.S., China and Europe are progressing at different stages, according to Philippe Waechter, Chief Economist at Natixis Asset Management. “The U.S. market is probably in its revival period, after a long period of adjustment. Prices are up, as is volume, as gauged by home sales and housing starts,” said Waechter. He also points out that the contribution of real estate investment to GDP also is positive now, whereas between Q2 2006 and Q2 2011, it was a drain on the economy. “To date, though, the economic benefit of real estate’s acceleration has been limited because it has less of an impact on GDP that in it did in the past. As of Q1 2013, real estate investment represented 2.9% of U.S. GDP compared to 6.1% in 2005,” said Waechter. Waechter believes that China’s overall real estate market remains strong. Prices are up in most major cities and investment is high. Real estate helped drive growth when the economy was booming because people were moving to big towns and needed real estate. Waechter notes, though, that the link between economic activity and real estate growth has weakened since 2009, resulting in varying levels of strength in different parts of the country. GFI Gulf Insider September 2013
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Europe Property
Europe’s Resorts property bargains
How cash-rich people from the Gulf are snapping up cheap properties in Europe’s best holiday locations.
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ulf buyers are being spurred on by collapsing property markets in countries such as Spain, Italy and Greece that have struggled to get to grips with the eurozone crisis. For those who know what they are doing there are some great deals as the European property market has been transformed in the past five years - but buying can be a gamble for those who don’t know what they are doing. Here’s our guide to what to watch out for.
France:
France is a tried-and-tested favorite for foreign buyers, so it tends to be more expensive than other parts of Europe. Even so, the eurozone crisis means prices will have dropped by 5 per cent by the end of this year, and are predicted to plunge by another 5 per cent in 2014, say Standard & Poor’s. Experts say buyers can pick up good bargains in ski resorts, such as Sainte
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Foy, where apartments have been reduced by 10 per cent over the past year. Other parts of the country also have bargains. Mortgage rates in France are at their lowest levels since World War II. You can secure a deal fixed for 20 years at a low 3.25 per cent with a 20 per cent deposit. Monthly repayments on a €150,000 property would be €731. Once-tough bank rules have eased, though they still focus on income and existing debts. You can buy a property in full in France, but leaseback is becoming increasingly popular — where you buy the freehold of a property, usually a newbuild, from a developer, sometimes at a reduced price. The condition is that you use a specialist company to lease out the apartment — the company finds tenants and gives you a guaranteed income. This income is likely to be less than if you rented it out yourself, but you get a definite return and do not need to search for tenants.
As interest rates are so low, mortgage costs are covered by the rental income, which was not always the case in the past. The leaseback company will also deal with repairs and maintenance. After a period of years the property is yours and, in the meantime, you can still stay there for a number of weeks a year if it is unrented. But while France is relatively stable, there are dangers. Check the health of any leaseback company — if it goes bust, you could be lumbered with a property that is impossible to sell. If you pull out late, there can be hefty charges and you may lose your deposit. And the tax situation is also uncertain. France has some of the steepest income tax rates in Europe for the wealthy. President Francois Hollande has recently made a U-turn on plans to hit foreign owners with a tax grab on second homes in France, but with its unstable economy, a future tax raid might still happen.
Property Europe
Spain:
House prices in Spain are down an average 50 per cent since 2007. In some regions, the falls are even more dramatic with homes once worth more than 2 million euros now being sold for a third of that. There is no sign of these falls ending any time soon, and a building boom before economic woes began means there are an estimated one million empty homes. Banks are poised to flood the market with 91,000 repossessed properties and property websites are jammed with adverts from desperate borrowers reducing up to 50 per cent off the value of their homes — and some are incredible. A medieval castle in the Pyrenees renovated by a leading architect is available for 562,000 euros, reduced from 1.3million. It has 3.6 acres of woodland, orchards and a library. In Granada, a sixbedroom mountain villa with landscaped garden, pool and hot-tub is going for
337,000 euros, down from 734,000, according to hotpropertiesinspain.com. Getting a mortgage can be tough. Borrowers who can put down a 35 per cent to 40 per cent deposit usually get the best deals. A typical variable rate is around 3.6 per cent with a 40 per cent deposit and monthly repayments. But should interest rates suddenly rise your loan could suddenly become much more expensive. There are dozens of properties for cash buyers, though. A two-bedroom villa with a pool and sea view near Malaga is on for 40,000 euros, reduced by 30 per cent. But buying a property in Spain is not for the faint-hearted. Clare Nessling, from mortgage broker Conti, says: ‘Many so-called bargains are offered at basement prices because they’re of poor quality and in undesirable locations. It’s very easy to be pulled in by descriptions of “cheap” prices, but you really don’t want to end up with a toxic asset simply because you didn’t do your homework.’ Many foreign owners fear the debtridden Spanish government plans to hit them with more taxes. Earlier this year, it sparked panic among expats by demanding residents declare overseas assets of more than €50,000 or face a 10,000 euro fine.
Greece:
The collapse of the Greek economy has meant it’s never been more affordable to buy your own villa — and demand has soared by 50 per cent over the past year. Corfu, Crete and parts of the mainland have seen the greatest reductions of up to 30 per cent to 40 per cent. In Crete, you can buy a four-bedroom stone house overlooking the sea for around 103,600 Euros, or a onebedroom apartment for 50,950 euros. A three-bedroom villa with a private swimming pool has had its price slashed from 255,000 to 172,000 euros. In Corfu, a two-bedroom villa with a private pool and sea views is on sale for 196,000 euros, reduced from 289,000. However, prices on trendy islands such as Mykonos or Santorini have still not fallen.
Apartments have been reduced by 10 per cent over the past year. In Greece its cash buyers only, forget mortgages: Greek banks have few funds and aren’t keen to lend to foreigners. Greece has been among the worst affected by the eurozone crisis. Services such as hospitals and rubbish collections are stretched, and there have been cases where foreigners have been forced to pay a fortune for urgent medical care. There are new taxes to pay for services such as emptying bins and more of these could still be imposed. There is still speculation that Greece could drop out of the euro — meaning buyers could see the value of their homes sink. And there is the danger the government might try to wring more cash from foreigners. Remember to factor in another 10 per cent to 15 per cent of the value for extra costs, such as tax on the purchase or fees to the notary who oversees the transaction.
Italy:
Recession-hit Italians are struggling to afford homes — leading to a 12 per cent drop in house prices in 2012 alone and 30 per cent over the past five years. It means there are some choice bargains in Umbria and Tuscany. Depending on who is selling, price drops can be much further.’ A 20-room villa in Tuscany, which was once home to the poet Robert Browning and visited by the composer Puccini, has been reduced by 839,000 Euros — but is currently under offer for a staggeringly low 242,000 euros. An ancient mill near the historic city of Lucca, which has five bedrooms, is going for 415,000 euros but once had an asking price of 562,790. But be prepared for other charges, which can add around 10 per cent to the purchase price. For example, the Italian government has recently hiked council tax by up to 50 per cent for non-residents. GFI Gulf Insider September 2013
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Feature NSA Bugs EU Offices
Spying Out of Control Why (and how) America’s NSA spies on its own Citizens (as well as the rest of us); and is it Constitutional?.
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uropeans are furious. Revelations that the US intelligence service National Security Agency (NSA) targeted the European Union and several European countries with its far-reaching spying activities have led to angry reactions from several senior EU and German politicians. “We need more precise information,” said European Parliament President Martin Schulz. “But if it is true, it is a huge scandal. That would mean a huge burden for relations between the EU and the US. We now demand comprehensive information.” Schulz was reacting to a report in SPIEGEL that the NSA had bugged the EU’s diplomatic representation in Washington and monitored its computer network. The EU’s representation to the United Nations in New York was targeted in a similar manner. US intelligence thus had access to EU email traffic and internal documents. The information appears in secret documents obtained by whistleblower Edward Snowden. The documents also indicate the US intelligence service was responsible for an electronic eavesdropping operation in Brussels. SPIEGEL also reported that Germany has been a significant target of the NSA’s global surveillance program, with some 500 million communication connections being monitored every month. The documents show that the NSA is more active in Germany than in any other country in the European Union. German Justice Minister Sabine Leutheusser-Schnarrenberger, who has been sharply critical of the US since the beginning of the Prism scandal, was furious. “If media reports are correct, then it is reminiscent of methods used by enemies during the Cold War,” she 22
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said in a statement emailed to the media. “It defies belief that our friends in the US see the Europeans as their enemies. There has to finally be an immediate and comprehensive explanation from the US as to whether media reports about completely unacceptable surveillance measures of the US in the EU are true or not. Comprehensive spying on Europeans by Americans cannot be allowed.” Elmar Brok, chairman of the Foreign Affairs Committee in European Parliament added his opprobrium. “The spying has reached dimensions that I didn’t think were possible for a democratic country. Such behavior among allies is intolerable.” The US, he added, once the land of the free, “is suffering from a security syndrome,” added Brok, a member of Chancellor Angela Merkel’s conservative Christian Democrats. “They have completely lost all balance. George Orwell is nothing by comparison.” The US has thus far declined to respond to the revelations printed in SPIEGEL. “I can’t comment,” Deputy National Security Advisor Ben Rhodes told journalists on Saturday in Pretoria, according to the German news agency DPA. The National Security Agency’s recently revealed surveillance programs undermine the purpose of the Foreign Intelligence Surveillance Act, which was established to prevent this kind of overreach. They violate the Fourth Amendment’s guarantee against unreasonable search and seizure. And they underscore the dangers of growing executive power. New York Times oped contributors Jennifer Stisa Granick and Christopher Jon Sprigman make the case that the NSA Actions are both illegal and unconstitutional in their article The Criminal N.S.A.
Germany has been a significant target of the NSA’s global surveillance program, with some 500 million communication connections being monitored every month. Edward J. Snowden, the former N.S.A. contract employee and whistle-blower, has provided evidence that the US government has phone record metadata on all Verizon customers, and probably on every American, going back seven years. The law under which the government collected this data, Section 215 of the Patriot Act, allows the F.B.I. to obtain court orders demanding that a person or company produce “tangible things,” upon showing reasonable grounds that the things sought are
NSA Bugs EU Offices
“relevant” to an authorized foreign intelligence investigation. The F.B.I. does not need to demonstrate probable cause that a crime has been committed, or any connection to terrorism. Even in the fearful time when the Patriot Act was enacted, in October 2001, lawmakers never contemplated that Section 215 would be used for phone metadata, or for mass surveillance of any sort. Prism is the streamlined, electronic seizure of communications from Internet companies. In combination with what we have already learned about the N.S.A.’s access to telecommunications
and Internet infrastructure, Prism is further proof that the agency is collecting vast amounts of e-mails and other messages — including communications to, from and between Americans. The government justifies Prism under the FISA Amendments Act of 2008. Section 1881a of the act gave the president broad authority to conduct warrantless electronic surveillance. There is simply no precedent under the US Constitution for the government’s seizing such vast amounts of revealing data on innocent Americans’ communications. One of the most
Feature
conservative justices on the Court, Samuel A. Alito Jr., wrote that where even public information about individuals is monitored over the long term, at some point, government crosses a line and must comply with the protections of the Fourth Amendment. There is no doubt that actions by the NSA are both illegal and unconstitutional. Yet, instead of going after the perpetrators of crimes, the US is going after Edward Snowden, the former U.S. intelligence contractor who leaked the documents detailing the illegal surveillance to various news agencies. GFI Gulf Insider September 2013
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Feature Boomerang Effect
Will India and China’s Consumer Boom Spark international Shortages?
It Could Happen - if the “Boomerang Effect” Isn’t Kept in Check BCG Research Shows That the Rise of the Middle Class in China and India Could Prompt Widespread Shortages and Inflation, but Smart Investment, Policies, and Technologies Could Forestall Crisis.
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hinese and Indian consumers are living well and eating well. And that could spark a global crisis. The consumer boom in China and India will touch off global inflation and could lead to food and water riots if investment, policy, and technology don’t keep pace. Without smart, quick action by the private sector and government alike, surging Chinese and Indian demand for premium foods will lead to commodity volatility, runaway food prices, and worldwide water shortages as the “boomerang effect” brings the
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unexpected impact of Asian growth to the rest of the world. That’s the conclusion of research by The Boston Consulting Group (BCG). The main findings are presented in “The Boomerang Effect,” and The $10 Trillion Prize: Capturing the Newly Affluent in China and India (Harvard Business Review Press), a recent book by BCG consultants Michael J. Silverstein, Abheek Singhi, Carol Liao, and David C. Michael. The Perspective is part of BCG’s Game-Changing Program to help leaders and their companies capitalize on the
opportunities created by the seismic shifts in the global economy. “Chinese and Indian consumers are celebrating their newfound wealth by eating like Americans: they’re shifting their diets from grain to meat,” Silverstein said. “Their wealth is a good thing. It creates new markets and new opportunities. But it can also lead to global traumas: highly inflated food prices across the U.S., as well as dangerous worldwide shortages of key natural resources, especially water.” “This is an example of what we call the boomerang effect—a set of hardto-foresee outcomes that come home
Boomerang Effect Feature
to roost as a result of developments far away,” Silverstein said. “We have seen it before. In the early 1990s, direct investment in China led to a flood of cheap goods and permanent shifts in the U.S. labor market. This time, it’s different. The Chinese and Indian middle-class consumers have developed new food preferences that will lead to hypercompetition for commodities such as feed, corn, and water. Climate change is already creating droughts worldwide and bringing the threat of famine, food riots, and water wars in Asia. This new surge in consumer demand will worsen the strain in Asia and the U.S. as well.” But the boomerang effect doesn’t necessarily lead to chaos, Silverstein added. “Crisis can always lead to opportunity. Smart investments and policies can limit the impact of inflation and shortages.” According to BCG, there are only a few steps between booming wealth and changing tastes in China and India and global crisis:
production went for feed—a figure that also represents 20 percent of global corn production for that year. The result is that China is no longer self-sufficient when it comes to corn. China’s corn imports will increase from 1.7 million tons in 2010 to 15 million tons in 2015—the equivalent of U.S. exports of 600 million bushels.
water. And the water supply is already in crisis. Worldwide, water consumption is already ahead of sustainable supply and is growing at 2.2 percent a year. In China and India (which depends on China for much of its water), water supplies are strained by drought. India could have 600 million people without water in 25 years.
The water crisis brings it all back home. Water is a problem in the U.S., too. It is becoming difficult to irrigate land there, and a new dust bowl is a real possibility. Water restrictions are already in place in Western states, and the price of water in some U.S. cities is already equivalent to those in Israel. U.S. water riots aren’t out of the question. But short of that, scarce water means costlier food. The last dust bowl—from 1931 through 1936—killed off 30 percent of corn production and drove corn prices up 115 percent. Right now, U.S. food exports to China require an 18 percent annual increase in water consumption. Higher corn prices, the result of drought alone—leaving out other factors—could double the price of chicken by 2018. Is the worst-case scenario inevitable? Not necessarily, Silverstein said. “Famine and food riots are a reality in India, and water wars between China and India are a genuine risk. But innovation can help. Smart policy decisions can mitigate the worst effects and create opportunities for companies that are sharp and nimble.” BCG lists the following among the private- and public-sector initiatives that could help:
Put a strain on the global feed supply? You’re going to pay for it. All the figures above mean that China’s corn consumption will have significant global impact, and prices will surge well beyond current levels. Global corn consumption is projected to rise 3.2 percent per year from now through 2020. That means a 40 percent increase in overall consumption. And that means corn prices could increase as much as 57 percent from 2010 through 2020.
Chinese and Indian demand for premium foods will lead to commodity volatility, runaway food prices, and worldwide water shortages.
Wealth and consumption—is skyrocketing in both India and China. By 2020, there will be 2 billion economically able Chinese and Indian consumers—1 billion of them new to the middle class. In both nations, lifetime consumption patterns are changing radically. Chinese born in 2009 will consume 38 times more than those born in 1960. Indians born in 2009 will consume 13 times more than those born in 1960.
Doing well means eating well, and that means eating meat. Consumers in China are celebrating their wealth by abandoning their traditional diets, shifting from grain toward chicken and pork. Chicken and pork accounted for 4 percent of daily calories in China in 1960; by 2020 they could account for as much as 28 percent. The surge in demand is forcing China to become a net importer of chicken and pork.
For meat, you need livestock. For livestock, you need feed. Feed is in short supply. Demand for chicken and pork means demand for feed grain—lots of it. It takes 2 kilograms of feed to produce 1 kilogram of chicken and 6 kilograms of feed to produce 1 kilogram of pork. In 2010, 99 percent of China’s corn
Expensive corn means expensive food—including here at home. Demand for corn in China drives up beef prices in the U.S. Feed is 55 percent of the cost of raising cattle. And grain is 60 percent of the total cost of feed. So a 57 percent increase in the cost of feed by 2020 could lead to a 20 percent increase in beef prices. That hits home. A Big Mac, which cost about $3 in 2003 and goes for just over $4 today, could, by 2015, easily cost $5—or even more.
There’s no meat without feed and no feed without water. To grow feed grain, you need large quantities of water. China’s shift to meat consumption leads to a tenfold increase in the need for
Microirrigation that delivers water directly to plant roots could increase the efficiency of water use by 50 percent.
Innovations in seed technology, including genetically modified organisms, can mean higher food production with no increase in water consumption.
New policies that price water at market rates, could, said Silverstein, “lead to more efficient water use, as it already has in Israel.” “The boomerang effect doesn’t have to end in riots and fewer hamburgers for Americans,” Silverstein said. GFI
A copy of the report can be downloaded at www.bcgperspectives.com
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25
Feature Yemen
The Un-Revolution:
Yemen’s Mediocre Transition By Ramzy Baroud
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onsidering the off-putting reality, one fails to imagine a future scenario in which Yemen could avoid a full-fledged conflict or a civil war. It is true that much could be done to fend off against this bleak scenario such as sincere efforts towards reconciliation and bold steps to achieve transparent democracy. There should be an unbending challenge to the ongoing undeclared US war in the impoverished nation. Alas, none of the parties in Yemen’s prevailing political order has the sway, desire or the moral authority to lead the vital transition necessary. It is surely not the one proposed by the Gulf Co-
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operation Council (GCC), but rather a homegrown political evolution that responds to Yemen’s own political, security and economic priorities, and not to the strategic interests of ‘Friends of Yemen’ being led by the United States. Although it is much less discussed if it is to be compared to Egypt’s crippling political upheaval, or even Tunisia’s unfolding crisis, Yemen’s ongoing predicament is in fact far more complex. It directly involves too many players, notwithstanding al-Qaeda in the Arabian Peninsula (AQAP) and the US bloody drone war that is unleashed from Djibouti among other places. In the period between July 27 to
August 9, 34 people were killed in Yemen by US drone attacks. The US government mechanically considers those killed alQaeda terrorists, even if civilians are confirmed to be among the dead and wounded. Most media qualifies such statements by describing the victims as ‘suspected militants’. International human rights groups and Yemen’s civil society organizations – let alone the enraged people of Yemen – insist on delineating the toll on civilians. Entire Yemeni communities are in a constant state of panic caused by the buzzing metal monsters that operate in complete disregard to international law and the country’s own sovereignty.
Yemen Feature
In the period between July 27 to August 9, 34 people were killed in Yemen by US drone attacks. The US government mechanically considers those killed al-Qaeda terrorists.
Frankly, at this stage it is hard to think of Yemen as a sovereign and territorially unified nation. While 40 percent of the country’s population is food insecure, and more are teetering at the brink of joining the appalling statistics, the country’s foreign policy has been long held hostage to the whims of outsiders. There is a lack of trust in the central government which historically has been both corrupt and inept by allowing nonstate actors to move in and fulfill the security and economic vacuum. Prior to the Yemeni revolution in Jan. 2011, the US was the most influential outside power in shaping and manipulating the Yemeni central
government. Its goal was clear, to conduct its so-called war on terror in Yemen unhindered by such irritants as international law or even verbal objection from Sana’a. The now deposed President Ali Abdullah Saleh obliged. He too had his personal wars to fight and needed US consent to maintain his power apparatus. Just weeks prior to the revolution, then-Secretary of State Hilary Clinton visited Sana’a. She applied gentle pressure to Saleh to dissuade him from pushing the parliament to eliminate term limits on his presidency. At the heart of the mission was the expansion of the counter-terrorism campaign in Yemen, sold as if it were military cooperation between two sovereign governments against a common enemy: Al Qaeda. But reality was of course vastly different. Much of Saleh’s supposed anti-AQAP efforts were in fact channeled against the revolutionary forces and political opposition. In fact, AQAP expansion was unprecedented during the revolution, but not because of the revolution itself. Saleh seemed to have made a strategic choice to leave large swathes of the country undefended in order to allow sudden AQAP expansion. Within a few months, al-Qaeda had mobilized to occupy large areas in the country’s southern governorates. This was done to strengthen Sana’a official discourse that the revolution was in fact an act of terrorism. Unlike Egypt, the US military interest in Yemen is not merely done through buying loyalty with a fixed amount of money and sustaining a friendly rapport with the army. It is about control and the ability to conduct any military strategy that Washington deems necessary. And unlike Afghanistan, Yemen is not an occupied country, at least technically. Thus the US strategy regarding Yemen has to find a sustainable balance between military firmness and political caution. This explains the leading role played by the US in negotiating a safe path for the central government, army and the ruling party – excluding Saleh himself – to elude the uncompromising demands of the country’s revolutionary forces. To some degree, the US has succeeded.
Part of that success was due to Yemen’s existing political and territorial fragmentations. With Houthis controlling large parts of northern Yemen, the southern secessionist movement Haraki in the south, militant infiltration throughout the country, and a political opposition that has constantly lagged behind a much more organized and progressive Yemeni street, Yemeni society is much too susceptible to outside pressures and manipulation. The Yemeni revolution was never truly treated as such, but instead as a crisis that needed to be managed. The GCC brokered power transfer initiative was meant to be the roadmap out of the crisis and set the stage for the National Dialogue Conference – underway since March 18. The transition thus far has been buttressed with the backing of the ‘Friends of Yemen’, so as to ensure that the process leading up to the elections that are scheduled for 2014, is done under the auspices and blessings of those with unmistakable interest in Yemen’s present and future. It is barely helpful that Yemen’s supposedly united opposition is hardly that, and differences are widening between the coalition of the opposition groups named the Joint Meeting Parties (JMPs). Even if the revolution is yet to reap tangible results in its quest for fundamental change towards democracy, the national mood, separate from Hadi and the opposition, is unlikely to accept half-baked solutions. Meanwhile, the militants are regaining strength and so is the US political intervention and drone war. All in turn are contributing to a burgeoning discontent and antiAmerican sentiment. Between revolutionary expectations and less than mediocre reforms, Yemen is likely to embark on yet a new struggle whose consequences will be too serious for any disingenuous political transition to manage. GFI
Ramzy Baroud (www.ramzybaroud.net) is an internationally-syndicated columnist and the editor of PalestineChronicle. com. His latest book is: My Father was A Freedom Fighter: Gaza’s Untold Story (Pluto Press).
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Iran Electoral Candidate
Iranian Electoral Candidate Disqualified
for Being Too Attractive “We don’t want a catwalk model on the council,” says senior officer.
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female city council candidate in Qazvin, Iran has reportedly been barred from taking the seat because she is considered too attractive. 27-year-old Nina Siahkali Moradi received 10,000 votes during the city’s most recent election, placing her 14th out of the 163 candidates, which landed her the title of “alternate member of council.” However when one of those ranked above her was elected as mayor, Moradi was instead disqualified. A senior office in Qazvin has been quoted as saying, “We don’t want a catwalk model on the council.” Moradi, a graduate student in architecture ran what many consider a successfully forward-leaning and highprofile election campaign, leading many to cite her disqualification as another blatant example of Iran’s sexist policy and Islamic fundamentalism of the highest order. The International Campaign for Human Rights in Iran has stated that the disqualification was apparently the result of “non-observance of Islamic codes,” which occurred presumably when Moradi, an Iranian woman, decided to run for office, a pursuit normally reserved for Iranian men. Reports suggest that her election campaign posters were largely the basis for complaints from senior
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conservative rivals who may or may not have viewed the images as provoking and pandering voters for support due to her beauty. “Almost 10,000 people voted for me and based on that I should be the first alternate member of the city council,” Moradi told local news in a performance art piece titled “Wait, This Isn’t A Democratic System?” Seyed Reza Hossaini, Qazvin’s representative in Parliament, and a member of the review board, told news group IranWire that Moradi’s votes had been “nullified due to her disqualification, as the review board did not approve her credentials. We have told her the reason why she has been disqualified”—this after Moradi revealed that she had never been contacted by any party officials. Moradi’s opponents have have said that her candidacy was based on her beauty and youth exclusively, with alleged reports prior to the election that the behavior of her supporters was not in keeping with the traditions of conservative Islam. Her campaign slogan, “Young Ideas for a Young Future,” had, nevertheless, been approved by Iran’s judiciary and intelligence services, despite protest. Moradi’s supporters are calling for a better understanding of the law, with many explaining that the review board
Her election campaign posters were largely the basis for complaints from senior conservative rivals who may or may not have viewed the images as provoking and pandering voters for support due to her beauty. and election committee can review an individual’s actions during the election, but cannot nullify the results once they’ve been announced. This controversy comes directly after the election of President Hassan Rowhani, who has vowed to bring about major changes in Iran’s observing of civil rights, beginning with the appointment of a female Vice President of legal affairs. Rowhani has not released a statement on Moradi’s disqualification. GFI
Feature Advertorial
KFH-Bahrain’s Libshara
Lucky winner ‘lands’ the first golden plot.
K
uwait Finance House - Bahrain recently awarded its first Grand Prize Winner of the Libshara Savings Account. The Prize was a large Golden Plot of land, one of the four large plots of land in Sarat, Diyar Al Muharraq. What makes this promotion by KFH-Bahrain so different from other promotions is that in addition to cash prizes, customers have a chance to win land in Diyar Al Muharraq. Land is a great investment, particularly in Bahrain; not only does its value appreciate over time but winners can build their own home of their choice on it. The Golden Plots of land offered to Libshara Winners have an excellent location – near one of the main roads in Diyar Al Muharraq. Basically, it is a win-win situation for Libshara customers because this Shari’a compliant Investment Savings Account offers not only the opportunity to win exciting prizes but is also a great way to invest as the Bank offers the best profit rates in the kingdom. Mrs. Sumaya Al Obaidly, the first winner of KFH-Bahrain’s Libshara
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Savings Account was overwhelmed to win and said, “I didn’t expect the land to be this large and my family and I can’t wait to build our dream house and move in. Receiving this Libshara from Kuwait Finance House-Bahrain is a dream come true and I still can’t believe I won.” Mr. Khalid Rafea, Executive Manager & Head of Banking Group at KFH-Bahrain commented “Our Libshara Savings Account still offers customers a chance to win over 55 monthly cash prizes upto USD 80,000 in addition to three remaining large Golden Plots of land at Sarat in Diyar Al Muharraq”. GFI
INVEST NOW!
To be eligible to enter the next Golden Plot draw, invest before 18th September, 2013 and you could be the next lucky winner of the second large Plot of land in Sarat, Diyar Al Muharraq. In addition to the Plot, 55 lucky winners will receive a total of USD 60,000 in cash prizes.
Mrs. Al Obaidly,(centre) receives the Plot document from Mr. Rafea, (right) as her husband Mr. Noaman Alhassan looks on
Land is a great investment, particularly in Bahrain; not only does its value appreciate over time but winners can build their own home of their choice on it.
Advertorial Feature
Kathmandu Calling! Turkish Airlines adds a new route to the Asia Pacific Region.
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urkish Airlines, ranked the ‘Best Airline in Europe’ (Skytrax Passengers Choice Ranking) for the third consecutive year, adds yet another city and country to its Far East network. The capital and the largest city of Nepal, Kathmandu, is joining the network on September 1st and will be the 29th destination served in the Far East. It is the 104th country and 238th destination. Kathmandu has a long history dating to 100 BC and is home to many unique cultural and historical sites, including a large number of Buddhist and Hindu temples which are protected by UNESCO designations. In addition, it is the starting point for numerous climbing and trekking expeditions across the Himalayan range. Roundtrip flights between Istanbul and Kathmandu will be operated 4 times per week on Tuesdays, Thursdays, Fridays and Sundays from Istanbul, and Mondays, Wednesdays, Fridays and Saturdays from Kathmandu.
Introductory round trip fares are available from Istanbul to Kathmandu starting at 406 Euros (including taxes and fees). Additionally, for the first 6 months of operation to our new destinations, there is a special offer for our Miles&Smiles members, with a 25 per cent reduction in the miles needed to redeem either award tickets or upgrades. GFI
Kathmandu Flight Scheduled (Applicable from 1st September, 2013)
• Flight No TK726 – Days: Tuesday, Thursday, Friday & Sunday. Departure: IST 21:45 & Arrival: KTM 7:15 • Flight No TK727 – Days: Monday, Wednesday, Friday & Saturday. Departure: KTM 8:45 & Arrival: IST 13:40 *All times are in LMT
Additionally, for the first 6 months of operation to our new destinations, there is a special offer for our Miles&Smiles members, with a 25 per cent reduction in the miles needed to redeem either award tickets or upgrades. For further information visit www.turkishairlines.com or call on Tel. +90 212 444 0849 or visit any TK sales office Gulf Insider September 2013
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Feature Advertorial
VIVA Bahrain to Share Industry Insights at TWME 2013
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IVA Bahrain is the Platinum Sponsor of the upcoming prestigious annual event, Telecoms World Middle East 2013 (TWME), due to be held in Dubai from October 1st -2nd at the Jumeirah Beach Hotel, under the theme of ‘Opportunity, Innovation and Strategy’ The three-day event will bring together over 600 attendees including200 leading operators from the region to discuss the main topics in the telecoms’ sphere including LTE technology, networks, enterprise and investment. Additionally, operators and leading industry suppliers will get the opportunity to explore, discuss and redesign the telecoms agenda of the future, while solidifying the framework of how operators can remain at the epicentre of human connectivity. As part of VIVA Bahrain’s high-profile participation at the event, the company’s CEO, Eng. Ulaiyan Al Wetaid, will be heading the event’s keynote panel of
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discussion together with leaders from keyregional operators, on the subject of diversification of industries: ‘Putting MENA telcos at the epicentre of the
VIVA Bahrain’s strive for excellence which has assisted the company in achieving phenomenal growth in its first three years of operations. connected economy and enabling the connected life’. Eng. Ulaiyan will share insights on how retail, wholesale and enterprise services
are being injected with innovation. With customers demanding more bespoke, personalised and interactive services, operators are being pushed to redesign product portfolios and set new benchmarks in service creation and delivery. In line with this, he will share VIVA Bahrain’s strive for excellence which has assisted the company in achieving phenomenal growth in its first three years of operations, becoming the market leader in Bahrain in mobile voice and mobile broadband segments. Key highlights of the event also include the Telecoms World Awards where the industry’s leading organizations will be recognized for their outstanding achievements which have positively contributed to the development of the telecoms industry in the Middle East. The awards aim to showcase organizations which have demonstrated unparalleled ability to succeed and have continuously set standards of excellence. GFI
Improving Memory Feature
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New study suggests naps improvE memory
he best way to not forget a newly learned poem, card trick or algebra equation may be to take a quick nap, scientists surprised by their own findings have reported. A study, published in Nature Neuroscience, provides new insights into the hugely complex process by which we store and retrieve deliberately acquired information - learning, in short. Earlier research showed that fresh memories, stored temporarily in a region of the brain called the hippocampus, do not gel immediately. It was also known that reactivation of those memories soon after learning plays a crucial role in their transfer to more permanent storage in the brain’s ‘hard drive,’ the neocortex. During wakefulness, however, this period of reactivation renders the memories more fragile.
Learning a second poem at this juncture, for example, will likely make it harder to commit the first one to deep memory. Bjorn Rasch of the University of Lubeck in Germany and three colleagues assumed that the same thing happens when we sleep, and designed an experiment to find out if they were right. Twenty-four volunteers were asked to memorise 15 pairs of cards showing pictures of animals and everyday objects. While performing the exercise, they were exposed to a slightly unpleasant odour. Forty minutes later, half the subjects who had stayed awake were asked to learn a second, slightly different pattern of cards. Just before starting, they were again made to smell the same odour, designed to trigger their memory of the
first exercise. The 12 other subjects, meanwhile, did the second exercise after a brief snooze, during which they were exposed to the odour while in a state called slow-wave sleep. Both groups were then tested on the original task. Much to the surprise of the researchers, the sleep group performed significantly better, retaining on average 85% of the patterns, compared to 60% for those who had remained awake. “Reactivation of memories had completely different effects on the state of wakefulness and sleep,” said lead author Susanne Diekelmann, also from the University of Lubeck. “Based on brain imaging data, we suggest the reason for this unexpected result is that already during the first few minutes of sleep, the transfer from hippocampus to neocortex has been initiated,” she said. GFI
Traditional Chinese Medicine and Acupuncture offers relief from chronic pain
Dr. Lucy Liu
Qualified practitioner in traditional Chinese Medicine and Acupuncture
Also now available chiropractic and medical massage
Dr. Liu and her team offer specialist treatment for conditions such as: • Diabetes. Weight Loss. Migraine. Insomnia. • Strokes & Paralysis. Infertility. Impotence. Prostatis. • Stress/Nervous System problems. • Poor circulation. Rheumatism. Arthritis. Varicose Veins. Gout. • Joints, Neck, Shoulder & Lower Back problems • General pain relief. For appointments & consultations please contact:
1766 4088 or 3964 1997 Direct line: 3777 8922
Under the medical supervision of Bahrain Medical Group
Gulf Insider September 2013
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Feature Advertorial
The Elite Group Enjoy exciting promotions & offers. Elite Resort & Spa Paelleras Night
Start your weekend early with some Spanish zing. Dine on a selection of paellas that are made from the freshest ingredients and most fragrant rice, and exquisite seafood. Where: Al Noor Tent When: Every Wednesday 730pm onwards Price: BD 15 net per person
Thursday Night Grills
Enjoy a meat bazaar with marinades and toppings of your choice cooked by our chefs at the seaside with a variety of sauces and pasta. Where: Waikiki When: Every Thursday from 730pm onwards Price: BD 12 per person
Aqua Fiesta
Friday brunch is all about family time, good food and relaxation. Feast with your family on a hearty Arabic buffet including a broad selection of mezzes, live grills, traditional main courses, and delectable desserts; the spread also features international favourites. Walk around the poolside (or dive in!), get some 34
Gulf Insider September 2013
traditional henna designs, have a Bassara (fortune teller) unravel the mysteries of your future or take a turn at holding a falcon. Special games are organised for kids too. Live singers will keep the mood upbeat through the whole afternoon as you relax with a cup of tea and perhaps a second helping of dessert. When: Friday Price: BD 12 for adults and half price for kids under the age of 11
Chill out Saturday
The ideal setting before the new week begins – relaxed soothing music and barbecue at the poolside. Where: Waikiki When: Saturday from 7:30 pm onwards
Elite Crystal Hotel Bora Bora
Sombrero Night
Enjoy a delicious Mexican buffet at only BD 9.9 per person.
Elite Grande Hotel H20
Hot Grill Night
Enjoy a succulent array of meat including
lamb chops, Steaks, chicken wings, shishtaook, makanek and more! When: Every Thursday
Catch of the Day
Enjoy an all you can eat sea food buffet with live cooking counters. Select your fish and feast on an all-you-can-eat buffet. When: Every Saturday
Elite Seef Residence & Hotel Oasis
Oasis Membership Elite Seef Residence & Hotel invites you to an Oasis of relaxation and indulgence through their luxurious privilege program. Membership includes: A booklet of vouchers redeemable at any F&B outlet and hotel facility, and three free gym passes. Enjoy a 15 per cent discount on room rates, gym membership, spa treatments and any F&B bills – in addition to special discounted rates on weekly themed events, and more. Sign up today and enjoy a year of Elite lifestyle privileges! Fee: Couples – BD 180, Single – BD 120 GFI
Opening soon in Juffair
Tel: 17 49 99 00
Sh. Hamad Ave 912 | West Riffa Kingdom of Bahrain
Tel: 17 49 99 22
Al Shabab Avenue (American Valley) 495W | Juffair | Kingdom of Bahrain
Somalia Pirates
Pirate hunter
How a British ex-Marine fighting Somali pirates - only to find they were run by a secret network of spies in London. By Carl ‘rocky’ Mason
E
verybody knows the names of Paul and Rachel Chandler, the British couple captured while sailing in the Indian Ocean, and Judith Tebbutt, snatched on holiday in Kenya. But most of piracy’s thousands of victims remain faceless: the badly paid crews of cargo ships or oil tankers, Bangladeshis and Filipinos desperate to earn a living. The scale is vast. Between 2005 and 2012, more than 3,740 crew members from 125 countries fell prey to Somali pirates. Nearly 100 of them died. During that time, pirates took about £250 million in ransoms. Pirate activity has gone up by 50 per cent each year since 2006, increasing insurance premiums tenfold and driving up the price of everyday goods. Between 80 and 90 per cent of the world’s trade relies on sea transport, with half of that – billions of pounds’ worth – funnelled through the Gulf of Aden, that part of the Arabian Sea between Yemen and Somalia, through the Red Sea to the Suez Canal to Europe. It’s crucial for the 36
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transport of Arabian Gulf oil. And everything is fair game for the pirates, from 1,000ft-long oil tankers to tiny sailing boats with two people on board – as in the case of the Chandlers. They were seized in October 2009 and held for 388 days. The huge scale of the problem makes it all the more remarkable that the hub of this trade in misery is London – the world’s centre of shipbroking and insurance. The pirates’ moneymen and informers lie hidden among the city’s large Somali population. Some 15,000 Somalis live in the London borough of Tower Hamlets, and a further 5,000 in Hackney. Securing the release of hostages is the responsibility of lawyers, negotiators and security teams in Britain, while a large chunk of any ransom money goes to pay government officials, Islamist extremists and London spies. The going rate for ransoms is about £1.3 million, but one Korean ship fetched £6 million. My life in private maritime security
My life in private maritime security began back in 1991 when the first Gulf War broke out. began back in 1991 when the first Gulf War broke out. I had just left my job as a marine commando and my new role was advising the captains of Maersk ships transporting equipment through the Straits of Hormuz up to American troops in Kuwait. After a few years I decided to try a career in ‘close protection’. The Qatari royal family hired me and I’ve guarded Jamie Oliver and Oasis, among many others. But I wanted something a bit more exotic and told some old marine contacts I was looking for excitement. So I found myself being interviewed by one of a growing number of specialist security
Pirates Somalia
Carl ‘Rocky’ Mason, pictured on a pirate hunting mission holding an automatic rifle
firms, mostly founded and staffed by former members of the Special Forces. Soon I was on my first mission with them. On November 26, 2008, I flew to guard the MV Biscaglia, a 27,000-ton chemical tanker heading through the Gulf of Aden. Our three-day trip would end in Djibouti, the northern exit point of the Gulf’s danger zone. Three of us were charged with defending the 28-crew ship: myself and two colleagues named John and Mike. By law we were banned from carrying lethal weapons in some jurisdictions – and still are. I asked the captain for razor wire to line the rails. He shook his head. ‘What about hoses?’ He nodded. These sent out 30ft jets of water to sink pirate skiffs. Every third hose fired steam to make things more uncomfortable. Our other weapon was the Long Range Acoustic Device (LRAD), which fired an eardrum-bursting screech supposed to induced nausea and blackouts. Finally, and most reassuringly, we were part of a convoy of a dozen merchant ships, while a group of international warships, including a Royal Navy helicopter carrier, would be on patrol nearby. Out at sea, I rose at dawn to find that the convoy had vanished. Somehow we’d lost the other ships. Had someone on board altered our course? It stank of a set-up, an inside job.
A motionless skiff was lurking in the water about four miles away and we were heading in their direction. Suddenly, one mile off, five men got up from the boat’s bottom. They were carrying AK-47s. The skiff was approaching rapidly. We got hold of the UK Maritime Trade Operation (UKMTO), which co-ordinates the deployment of the UK’s military response to pirates. But we were told that the nearest warship’s helicopter had already been sent out elsewhere – to a false alarm. It was another sign that this pirate attack had been meticulously planned. We opened the water cannons and turned on the steam, but the skiff evaded them. A teenager in a red T-shirt lifted up an AK-47 and opened fire. The pirates were firing constantly and soon they were on board. John, Mike and I dodged them and hid as the crew was rounded up. There was little we could do. I knew the pirates would take us to their mother ship, wherever it was anchored – but there was no way I wanted to spend the next few months in Somalia. ‘We have one option – abandon ship!’ I said to the other two. The bridge was too high to jump from so we sprinted towards the back, jumping down level after level, with bullets bouncing off everything. We hung from the side for a second . . . and let go. About 40 minutes after we had hit the
Rocky performs a body search on a pirate onboard a ship off the coast of Singapore
water, we were hauled aboard a German rescue helicopter. After its capture, the Biscaglia was berthed off the Somali coast, near the pirate lair of Eyl, an extraordinary town where, at the time of writing, 28 vessels and 587 hostages are held. Almost two months after she was taken, the handover took place without incident and the Biscaglia was released with all crew – traumatised but safe. Han, a 22-year-old Bangladeshi man, said that the pirates treated them like slaves. Some were tortured. Since the Biscaglia, I must have made 100 or so successful voyages through pirate zones, boarding ships at Sri Lanka, Egypt, South Africa and Dubai. With God’s grace – and proper security – most pass without incident, but it is an expensive business. Anti-piracy measures cost an incredible £18 billion a year and this does not include the costs in recovering vessels and hostages. Yet no ship with armed guards has ever been hijacked. I’ve campaigned relentlessly for guards to be allowed to carry arms, and as more companies take this advice the number of recorded pirate attacks has fallen dramatically, from 237 in 2011 to just 75 in 2012. GFI
Extracted from Pirate Hunter, by Carl ‘Rocky’ Mason with Kris Hollington, which will be published later this year. Gulf Insider September 2013
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Review Arabian Knight
The Guilt that Haunted an Arabian Knight HERO: The Life and Legend of Lawrence of Arabia by Michael Korda By Peter Lewis
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oday we watch the Arab world steering itself as if out of a long coma towards self-rule. It is 90 years since that process began inspired, guided, fought for, and finally betrayed, as he himself thought, by T. E. Lawrence ‘Of Arabia’. He had encouraged the revolt of the Arabs against Turkish rule, with the promise that the more they fought and captured, the greater would be the unified Arab state that victory would create. Yet he knew that Britain and France intended to keep their hands on Syria, Lebanon, Palestine and Mesopotamia (today’s Iraq), if not as colonies, at least as zones of influence. No fully independent Arab state was likely to be allowed to flourish. Some see this as the tragedy of Lawrence’s life for which he felt eternally guilty. On the other hand Lawrence succeeded in creating the kingdoms of Iraq and Transjordan, on whose thrones were placed the Arab brothers he trusted, Faisal and Abdullah. In Jordan Abdullah’s heirs reign still. Iraq assassinated its king and substituted dictators, notably Saddam Hussein. Arab self-government in a democratic sense has yet to begin. Lawrence foresaw this. In 1927 he wrote of Iraq in a letter to Bernard Shaw’s wife, Charlotte: ‘Well, someday they will be fit for selfgovernment but whether seven or 70 or
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700 years hence, God knows.’ This letter, strangely, is not quoted in this admirable, up-to-date, balanced study of Lawrence. Michael Korda is well aware of all the biographies and controversies that have gone before. No hero has been more intensively psychoanalysed after death than Lawrence. The verdicts always come out differently on so enigmatic and contradicted a character. People who remember the David Lean film see him towering over the desert like Peter O’Toole. But Lawrence was 5 feet 5 inches. When photographed in uniform against giant generals like Allenby, there is something pixie-ish about his riveting little figure, yet such was his self-confidence and intellectual superiority that it was nearly always he who called the shots. But of course the Arab robes, the gold-banded head dress and curved dagger (obtained from Mecca) helped enormously to create the legend. He wanted very much to be a hero and from youth had hardened himself to withstand feats of physical endurance, pain, hunger, sleepless persistence, until he became a compact little powerhouse. Lowell Thomas, an American documentary maker sent to make a propaganda war film for American consumption, had spent a few days filming with Lawrence and his Bedouin in the desert. Later he turned this into
No hero has been more intensively psycho-analysed after death than Lawrence. The verdicts always come out differently on so enigmatic and contradicted a character.
Arabian Knight Review
a theatrical show - a stirring lecture illustrated with film and slides called ‘With Lawrence in Arabia’. A smash hit in New York, it was brought to London’s Royal Opera House in 1919. Over two million went to see it. After that, Lawrence became a media celebrity on a then-unprecedented scale. He complained to friends in his letters of the ‘vulgarity’ with which Thomas had hammed up his story. When Britain’s King George V at a private audience tried to give Lawrence his decorations, the CB and DSO, Lawrence gave them back, explaining that he couldn’t accept honours for fraud - the false hopes that he had fed to the Arabs. At 33, he had to find something new to live for and decided to join the RAF, under an assumed name. I find this part of his life as fascinating
as the previous half. Michael Korda makes it so with details new to me and chunks from Lawrence’s many fascinating letters. It was a chequered career. When his real identity was outed in the Press, the RAF discharged him. After an unhappy interlude in the Tank Corps he begged to be readmitted as an airman. He spent his later years working happily on improving the engines of airsea rescue launches that were still in use during the Battle of Britain. He made many friends in the ranks as well as in grand country houses, like Lady Astor, whom he visited on his powerful Brough motor cycle. A ton-up biker, he said it would probably end in tragedy and it duly did when he was 46 on a narrow Dorset lane. He had just very reluctantly been retired from his beloved RAF and wrote
to Lady Astor: ‘There is something broken in the works ... my will I think.’ He left not only his legend as a warrior but a lasting memorial as a writer. Seven Pillars Of Wisdom contains some of the finest battle descriptions anywhere. Typically, he wanted it published in only a limited edition, to evade public scrutiny. When a best-selling condensation of it appeared in order to pay the costs he refused to take any personal profit. What a brilliant, obstinate, lovable, maddening contrary, mixed-up genius of a man! Even over 700 pages he never bores you for a moment. GFI
Hero: The Life and Legend of Lawrence of Arabia by Michael Korda, available from Amazon.com
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UAE Technology
Addicted to technology Almost three quarters of UAE residents could not live without their laptop or smartphone.
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ew figures have revealed an addiction to technology amongst UAE residents, with 71% stating that they could not live without their laptops or smartphones. Commissioned by dmg events Middle East as it gears up for the December launch of the region’s largest consumer lifestyle event – The Life & Style Show UAE – the survey provides unique insight into the attitudes of UAE residents towards all-things tech. It also comes at a time when the UAE’s consumer electronics industry is booming, with it predicted to reach US$3.97 billion by 2015 . Euromonitor International suggests that the rise in disposable income coupled with strong consumer interest in gadgets such as smartphones or tablet PCs was responsible for the industry‘s growth in 2012. The findings also highlight that money is no object when it comes to purchasing gadgets, with more than half (53%) of those surveyed admitting to spending up to AED 10,000 a year on technology and a further 15% splurging AED 15,000 annually. What’s more, the UAE is a nation of gamers with one in
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ten claiming to own an average of three games consoles, while 20% switch between two. Taking place on 5th-7th December 2013 at the Abu Dhabi National Exhibitions Centre (ADNEC), The Life & Style Show UAE will comprise of seven individual events, including one specific to technology; Gizmos, Gadgets & Tech. Visitors will have the chance to walk away with some of the best bargains in the UAE from top brands such as Virgin Megastore, Sharaf DG+, Intel, Clear-Coat and BlackBerry. If this isn’t enough, The Life & Style Show UAE will also include an exclusive gaming area in which visitors will battle it out on Sony PlayStation and Nintendo game consoles against friends and strangers for the top score. DJs will be on hand to hype up the crowd, while music aficionados will have the opportunity to try out the latest technology from brands such as Pioneer, Bose and DJ Corner. The Gizmos, Gadgets & Tech Show will sit alongside Speed & Power, Home & Living, Fashion & Beauty, Sport & Leisure, Toys, Hobbies & Games and Luxury Property & Build. Visitors to The Life & Style Show UAE will be able
to access the seven individual events, including the feature areas, via one ticket. The Life & Style Show UAE is expected to attract more than 51,000 visitors from across the GCC region, over the three days. GFI
For more information email alexsworder@dmgeventsme.com or visit www.thelifeandstyleshowuae.com
Euromonitor International suggests that the rise in disposable income coupled with strong consumer interest in gadgets such as smartphones or tablet PCs was responsible for the industry‘s growth.
Feature Submarine Yacht
super-rich submarine yacht For the super-rich:115m submarine yacht with helipad and a swimming pool.
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ustrian-based yacht design studio Motion Code: Blue has developed a design for a six deck, 115 metre private white yacht, called Migaloo and named after an albino whale. The studio came up with an extraordinary design concept to satisfy the ever raising demands from super-rich yacht owners. Only the tower is custom designed, which means it is longer and wider to host a light flooded main room followed by a wide staircase including a centered , round elevator shaft. The enormous aft deck allows for lounge areas, sun beds, a bar, an 8 metre by 3 metre pool as well as a helicopter pad. When Migaloo is submerged, all furniture is put away in large storage areas underneath the granite decking while the pool’s bottom raises up to the main deck level. The foredeck is fully dedicated to the owners’ privacy, hosting a full-beam private lounge. More lounge areas, a private bar and access to the two-levelowners’ suite are directly underneath the foredeck. 42
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A telescopically extendible roof provides shade and follows perfectly the contour lines of the hull when closed. A spacious sun lounge on top of the tower completes the common amenities onboard a super yacht. The lounges are accessible via two wide stairways from the main deck or from all interior deck levels via the lift. The telescopically extendible roof
provides shade and will also be closed when the owner prefer to dive with the yacht. For the crew, the design studio has planned an outdoor helm station on the forward top of the tower when the vessel travels above the water line. Otherwise the spacious bridge and all necessary technical rooms hosting the equipment to control the submarine are
Submarine Yacht Feature
Image source: www.motioncodeblue.com right underneath the tower in the hull. The hull’s design and dimensions are inspired by existing submarines. The owner has his or hers private-fullbeam-quarters over two decks on subdeck one and sub-deck two. Other luxury appointments include a cinema room, a library, a gym and a gaming room. Four wide side hatches two on each side, can be transformed into enormous beach terraces. A spacious dining area next to the saloon on sub-deck one and the adjoining beach terrace give luxurious access to the water. Lounges and a Jacuzzi enhance this area while a comfortable ladder connects the beach club with the main deck above for easy access to the water on these two decks. Removable sun sails on each deck guarantee pleasant sun protection. All tenders and toys can be stored in the beach club or on the deck below, so the transport of a wide range of additional vehicles is possible. Sub-deck four is entirely reserved for the crew quarters including crew mess, laundry and crew gym while the main galley is positioned on sub deck two underneath the dining room.
When Migaloo is submerged, all furniture is put away in large storage areas underneath the granite decking while the pool’s bottom raises up to the main deck level. The hull and tower are equipped with large windows of special pressureproof glass to offer a breathtaking view especially when Migaloo is submerged. All windows are surrounded with underwater lights to provide stunning views when the yacht goes deeper. Communication and especially navigation is provided by common and well tested technologies and the hull is designed to reach a maximum depth of 240 metres. The company says it’s very likely to travel amongst school of whales heading into the deep while having a cup of tea and a good chat in the main saloon. A spokesman for Motion Code:Blue said: ‘Migallo was the result of intense research and the firm’s excellent knowledge of the current yacht market. ‘An increasing number of clients have exactly such special demands on the
design as main points in their briefing for their designers, so the studio’s intention was to offer a stunning design concept especially for people who are willing to expand the borders of imagination.’ Managing directors Christopher Gloning and Christian Gumpold had the original idea which was, to transform the well known and tested shape of current submarine designs into a private yacht. They wanted it to offer state-of-the-art luxury experience of same sized super yachts while having the huge benefit to submerge the whole vessel to travel and/or stay secretly and in total privacy underneath the waterline without any external disorders. The studio has recently completed several projects featuring both production yachts and super yachts currently under construction and has worked for yachts in Asia, Europe and the USA. GFI
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Art Painting
Painting Positivity… A review of Bahrain based artist Irina Averinos
A
n engineer by qualification and an art teacher and artist by profession, Irina Averinos was born in the Russian city of Tuapse, on the Black Sea coast. Inspired by the beautiful scenery around her, she started drawing from an early age. She studied in Ukraine and has lived in Jordan. Irina uses a harmonious blend of colours and her work reflects nature’s beauty. The warm and sunny paintings that she creates carry a robust positive energy. “I work primarily with oil paints due to their versatility, texture, and ability to blend,” she says.
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Irina Averinos
Painting Art
Currently, Irina lives in Bahrain and has participated in many art exhibitions, art festivals and art events, both in the Kingdom and abroad. She recently conducted two workshops ‘Creative Art’ and ‘Art From The Heart’ for children and adults. She has her artwork at private collections in Europe, the USA, Canada, Australia, Russia and the Middle East. GFI
For further information email art.irina.averinos@gmail.com or visit averinos.blogspot.com
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Cars Lincoln
Lincoln MKX I recently had the opportunity to take the 2013 Lincoln MKX for a spin around Bahrain. I must admit, having never driven a Lincoln before, I wasn’t sure what to expect. What I found, I am pleased to report, is an upscale midsize crossover that was easy to drive and provided all of the comfort and convenience one could ask for. The exterior of the MKX is sleek and handsome, with a unique signature grill making the car stand out among others. The drive stays smooth and effortless thanks to the 3.7L V6 engine, which provides enough power to navigate the roads with ease, while also travelling in quiet comfort. However, where the MKX really shines is the well-appointed interior and this model’s revamped technology lineup. The interior doesn’t sacrifice any luxury, with standard leather seats, heated and cooled front seats, remote starting, and 8” LCD touch screen, and premium materials such as wood, leather, and metallic trim throughout which exude class and style. Designed to seat five, it does so quite comfortably, with 39.6
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By Chelsea Copenhaver
inches of rear legroom and the same comforts and opulence found in the front cabin. Even more impressive was the infotainment system and was hands down my favorite feature of the car. myLincoln Touch has undergone a significant update for this model and allows the driver to use voice activated commands to stay connected, while also keeping attention on the road. In fact, I was told that the MKX actually allows the driver to program up to a 10,000 intuitive voice commands! Virtually anything can be controlled by voice commands, from cabin temperature to music volume, to GPS directions. You can have your smart phone synced to the car to have your messages read aloud to you and even browse through your music collection by voice! I found this to offer an incredible amount of convenience since it allowed me to fiddle around with everything in the car (and my phone!), without sacrificing my attention to driving. Other technology in the car also enhances the convenience of the driving experience, with park assist, lane alerts,
Virtually anything can be controlled by voice commands, from cabin temperature to music volume, to GPS directions. blind spot warnings, and indicators that automatically turn off after your turn or lane change has been completed! Overall, the Lincoln MKX offers a sophistication and value that makes it stand out from the crowd. I found the driving experience to be everything I could have asked for and more and particularly enjoyed the luxury and convenience found within. GFI
If you are interested in a test drive of the Lincoln MKX, you can visit the Almoayyed Motors showroom in Sitra or Call 1773 7373.
Feature Lifestyle Luxury
Lifestyle Your favourite luxury brands bring you the best in fashion. Oakley Never shy to experiment with colours, Oakley offers these red shades that are sure to make you a head-turner.
Dior Homme Cologne A definite must-have this summer, Dior Homme Cologne is perfect to beat the heat with its citrusy freshness.
Clerc Sports flip-flops These mesh sports flip-flops promise to keep your feet odour-free and cool; perfect for summer.
The Hydroscaph Titanium 1000m, by Clerc is just the arm-swag your wardrobe needs for the season. Clerc is well-known for its robust dive watches and unique designs.
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Cars Nissan Patrol
Nissan Patrol Guinness RecorD
Gulf Insider witnesses a Nissan Patrol achieve Guinness World Record.
G
ulf Insider was honored to be invited last month to witness a new Guinness World Record attempt at Sharjah International Airport in the UAE, where we watched a Nissan Patrol become the new holder of the ‘Heaviest object pulled by any production vehicle’ Guinness World Record. The unmodified production Nissan Patrol, except for 4 tons of ballast that had been installed in the vehicle to prevent it ‘flipping over’ from pulling such a load, hauled a 170.9 ton cargo plane, inclusive of weight of the plane, fuel and the cargo for over 50 meters, beating the previous record - set six years ago by a VW Turareg - by 15 tons. The event was the result of the ‘Nissan Patrol Challenge’, an online competition launched in 2012 that invites people in the region to share their ideas of how to test the abilities of the Patrol, and in doing so give themselves a chance of winning an once-in-a-lifetime trip to Japan as well as other great prizes. The competition seeks to come up with the 10 best ideas, and one of these ideas was to attempt a Guinness World
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Record by having a standard production Nissan Patrol drag a fully laden cargo aircraft. So, under a hot August sun we watched, as a band played, a Patrol comfortably drag a giant Ilyushin Il-76 with a laden weight of 170.9 tons. The Nissan Patrol has a rich heritage in the Middle East and has been in constant
series production since the 1950s. The first Nissan Patrol in the Middle East arrived in Kuwait in 1956 and since then has found numerous local fans after building a reputation for being one of the most reliable and capable off-road cars on the market. GFI
Samir Cherfan, Managing Director, Nissan Middle East receives Guinness World Record award.
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Last Words...
From Marillyn Hewson, CEO at Lockheed Martin: “Purpose is important. I often tell my team: If you want to reach great heights, start with a great purpose.” Hewson says that good leaders find good people to help them reach their goals. But great leaders are able to motivate and inspire their workers by explaining why they’re doing what they’re doing. In short, this is the “key to achieving something truly transformational… have a goal that’s bigger than just meeting a deadline or closing a sale. It’s human nature to want to make a lasting impact… to do something meaningful and enduring.” From interview with Craig Malloy,
CEO of Bloomfire: You have to have respect from the people who report to you, which shouldn’t occur solely because of your position of authority, but rather from “the value [you] bring to the group, team, or business based on [your] experience, leadership, work ethic, accomplishments, expertise, and character.” Companies should motivate workers with “non-compensation related recognition,” which Malloy says is more effective than with money.
From Ilya Pozin, CEO of Open Me:
“Gaining a professional mentor will
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have a serious impact on your career. You’ll gain a sounding board, valuable contact, and someone who can share their ups and downs within the industry.” Pozin says that he owes much of his success to his mentors throughout the years. Everyone in an entry-level position needs someone they admire to show them the ropes and help guide them during these early professional years.”Seek out someone within your company or industry who you admire. Your mentoring relationship could take off with an email, tweet, or even a LinkedIn connection. Invite this person to coffee to learn more about their professional experiences.”
From Mark Tercek, President and CEO of The Nature Conservancy: “Get to know your key people very, very well and figure out how to best position them so that they always feel challenged, never stop learning and are always contributing directly to the achievement of the organization’s main goals. That’s what the best leaders do every day.” Once money is taken out of the equation, employees are intrinsically motivated by the company’s mission, so long as it aligns with their own.”Leaders work very hard to get know each member of their team individually and to understand their strengths and capabilities, career aspirations and level
of engagement ... they figure out how each person can make the biggest contribution to their organization’s mission, what experiences they need to get to the next level and what assignments will be most fulfilling and provide the most development.”
From Barry Salzberg, CEO of Deloitte
Touche Tohmatsu Limited: “Office politics aren’t pretty. You can recognize the symptoms. Leaders don’t trust each other, departments compete against one another, and people suffer from a toxic working environment. If you do nothing else, do this. Be aware of the dynamics driving office politics, but avoid joining in with the games yourself. Rise above it. Stay true to your values and hold yourself to the highest ethical standards.” Salzberg warns that office politics can ruin a potentially great company from succeeding. However, Salzberg says that life’s too short to work for an organization that doesn’t share your values. “Find an organization that shares your values, because that’s where you’ll be most successful ... You can influence a great deal, simply by being a role model for others. But if the politics in your organization suggest its values are irreconcilable with your own, it’s time to start looking for one that’s a better fit.” GFI
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