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Special Feature
100 Leaders in Bahrain - Part 1 Bahrain Marketview 2013
Investing Luxury Real Estate
Technology 4G Comes to Bahrain
Abdul Razak Jawahery
Chairman of Menatelecom on 4G & Bahrain’s Telecom Industry Bahrain BD2
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Gulf Financial Insider
100 Leaders in Bahrain - Part 1 16
GulfInsider
May 2013 more inside...
Special Feature
Contents
32
Interview
Chairman, Menatelecom
35
Telecoms
Beyond Connectivity
56. FATCA
US Citizens to Pay Taxes
44 Bahrain
Real Estate Review
50
Abu Dhabi
Real Estate Review
58. Feature
Margaret Thatcher – A Tribute
36. Technology 4G in Bahrain
42
52
70. Techpicks
Tamkeen
Real Estate Review
Inspired by the Ordinary
Feature
Global Market
Your ultimate Gadgets
72. Art
Gulf Financial Insider
GulfInsider Publishers Nicholas & Rebecca Cooksey Editor in Chief Nicholas Cooksey Editorial Melissa Nazareth Jenny Ann Thomas
On the event of our 100th issue, we say a big Thank You to our readers, advertisers, suppliers, and loyal supporters… Launched as Gulf Financial Insider in 2004, Gulf Insider is well known for its often candid and irreverent editorial style. Everyone in the Insider team works hard to deliver authoritative and inspiring editorial content and design and it’s the title’s focus on excellence which has made it a must read for many in the region. Although Gulf Insider is distributed primarily within Bahrain, approximately 10 percent of copies are now either sold in retail outlets in other GCC countries as well as being offered in GCC First and Business Class airline lounges and other selected outlets. As a result of growing popularity we have just increased our print run by twenty percent, from 10,000 to 12,000 (certified) monthly copies, reaching an estimated 65,000 readers.
We hope you enjoy this latest issue, and that we produce - and you enjoy - many more to come! To view the magazine online visit
www.gulf-insider.com
Layout Designs Dhanraj S Admin & Finance Nikesh Pola Sales Account Manager Chelsea Copenhaver Business Development Manager Sueallen Menezes Editorial Contributors Paul Johnson*
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Ministry of Information approval no. TFI-431© Copyright 2009. Arabian Magazines is a division of CG Arabia WLL. No part of this publication may be reproduced in any manner without the written permission of the publisher. All Rights Reserved. Views expressed in this magazine are not necessarily those of the publisher.
*Articles by these correspondents are the copyright of
Telegraph Media Group, 111 Buckingham Palace Road, London SW1W 0DT, England.
For advertising enquiries call Tel: +973 1782 2383, 1782 2368 E-mail: sales@ArabianMagazines.com
The ďŹ rst real 4G LTE in Bahrain Amazingly big downloads Batelco, the leading telecom in Bahrain, is proud to offer real 4G LTE, the ultimate mobile network with amazing download speeds. For 4G LTE packages and devices, please visit any Batelco retail shop.
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Inbox Readers’ Letter
Send your views to gulfinsider@ArabianMagazines.com The multi-award winning Arabian magazine
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Issue 99
Saudi Arabia
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Dubai World’s Most Expensive Car
Interview Etihad CEO James Hogan
Gadgets Galore!
The ‘water wings’ article in your last month’s issue was great. I had vaguely heard about the same from a friend. I am passionate about creating new gadgets and am working on a few too. If it all works well may be you could feature my work in your magazine! I also want to mention the Tech Pick section as it had some really out-of-the-box gadgets; something different from the regular cams and things. Keep up the good work! Nidal
The Good News Blues EXAMINING THE ROLE OF BAHRAIN’S MEDIA Bahrain BD2
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Shift7: Car-racing Enthusiasts’ Haven
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Bahrain
Pain or Gain?
Middle East
The Top Six Brands
Bahrain Real Estate Review
Volkswagen Ice Drive Arvidsjaur, Sweden 44
Interview -
HE Reem Al Hashimy, UAE’s Minister of State
VIVA CELEBRATES
21
3rd Year Anniversary
ENTERPRISE MOVES TO SECOND YEAR OF OPERATIONS... Interview with Mr Nezar Banabeela, Chief Wholesale & Enterprise Officer, VIVA Bahrain. KSA SR20
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I would like to commend the cover story by Nicholas Cortes in your last month’s issue. I totally agree with him when he says that we need to temper optimism with realism. I’m a Bahraini and I feel that the press here is too controlled. The media in most other parts of the world have so much freedom. There are countries that have conservative cultures but practice freedom of press. If news reports are biased the whole purpose of journalism is rendered moot. I hope the Ministry of Information looks into this matter and takes necessary measures.
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The Arabian Review
Issue 97
Bahrain | Dubai Market View
Technology: A Boon
Green Lighting is a classic example of technology being a boon to mankind. It’s interesting to see how organisations like ETAP and YK Almoayyed Industrial Building Systems are trying to bring about a shift in mindset towards using energy-saving lighting solutions. The government’s initiative to distribute one million LED and CFL lights to all households in the kingdom, free of cost is commendable. This synergy between private organisations and the government, I’m sure will go a long way in making sustainable use of resources second nature to residents in Bahrain.
What a fantastic F1weekend we had last month; still recovering from the F1 fever! I’m a huge car racing fan; and that’s an understatement. I was happy to read about Shift 7 in your April ’13 issue. My friends, who are passionate about car-racing as well, and I hang-out there more often than not. We think that the space offers a complete experience with the live Grands Prix that are aired, the décor, the memorabilia that are displayed, and the food and drink of course.
Ajmal
Bahrain
New Labour Law hits Private Sector
‘Arab Spring’
Exploited and Misused
Bahrain Tops in Economic Freedom
30
Bentley GT Speed
42
Would you like to be a PUBLISHED Photographer? If your photos of Bahrain and the region are good enough, they could be published in Gulf Insider/Areej/Bahrain Confidential magazines. Each month we publish the most impressive images we receive and give full credit to the photographer.
Interview with IMF Managing Director
Christine Lagarde Bahrain BD2
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Images must be at least 1mb and can be e-mailed to submissions@ArabianMagazines.com with the subject ‘PHOTO’.
AMAZING IN MOTION Experience an innovative journey with Lexus.
Lexus Showroom - Sitra 17 737 773 www.lexus.com.bh
Bahrain
Gulf Round-up Case filed to declare failed Bahrain Air bankrupt Failed carrier Bahrain Air may be forced to open its financial books to legal scrutiny if an attempt to have it declared bankrupt is successful. Logistics and shipping company Almoayed Wilhelmsen has filed a case in Bahrain’s High Civil Court arguing the airline’s decision to go into voluntary liquidation should be annulled and the airline declared bankrupt, Gulf Daily News has reported. Bahrain Air abruptly shut down on February 12, claiming it could not pay back financial losses accrued in relation to “the unstable political and security situation in Bahrain” and blaming the government for demanding immediate payment on past government debts. The immediate closure left hundreds of passengers stranded and 22,000 tickets dated after February 12 unable to be used or transferred to another airline. A legal expert said a bankruptcy ruling could lead to potential criminal action against the airline’s management. “The difference between bankruptcy procedures and liquidation procedures is the fact that the Bankruptcy Court would oblige Bahrain Air to publicly disclose its financial position, its past history, possible mismanagement and potential unauthorised payments to creditors by the liquidator,” the newspaper quoted an anonymous legal source as saying. “If any flaws are found in Bahrain Air’s immediate history, the Bankruptcy Court may reverse all transactions going back as far as two years from the date of bankruptcy and assign liability to employees or even partners.”– ARABIAN TRAVEL NEWS
BBK’s Community Service In line with BBK’s strategic initiatives for a brighter community and its support for various entities, Mr. Reyadh Sater- BBK’s General Manager- (Shared Services Group) welcomed representatives from different societies to the Bank’s Headquarters to receive BBK’s contributions of BD 14, 500. The entities that have benefited include Al Manar for Parents Care, Bahrain Medical Society, Middle 4 Youth Society, Aisha Yateem Family Counseling Centre and Al Hamala Social, Charity, Cultural Society.
Aisha Yateem Family Counseling Centre 10
Gulf Insider May 2013
Qatar announces largest ever budget Qatar has announced the largest budgetary estimates in its history for the current financial year, 2013 to 2014. A record $57.9 billion has been ear marked for public spending for the year, which is 18% higher than 2012’s budget of $49.02 billion, local media reports said. The Qatari government has spoken out against fears that higher spending could cause a price rise, and that it would be vigilant about managing inflationary pressures through effective fiscal and monetary measures. According to the budget, the bulk of spending would be on public projects, amounting to 40% of the total budget. Allocations totaled $20.5 billion compared to $17.05 billion over the last year. The outlay for education has been upped 15% for this year, the budget revealed, with government sources pointing out that the country was moving towards a knowledge based economy. “This is a key step ahead as the education sector now has a share of 3.8 percent in the country’s GDP,” the Minister of Economy and Finance H E Yousuf Hussein Kamal said, Qatar News Agency reported. It is important to note that the estimates make a large portion of the allocations for the education sector on research and development, he added. The healthcare sector has also been accorded priority in the budget, with spending up by 13% over the last fiscal year. The Minister said the outlay would include spending on the Al Wakra Hospital, Sidra Hospital and building several specialised hospitals for women and children.- BIG PROJECT ME
Business News
Hotel GMs seek more leisure attractions in Qatar Hotel general managers in Doha said the city’s tourism and hospitality offering needed to be more diverse, authentic and integrated in order to attract sought-after leisure travellers during yesterday’s Hotelier Middle East Qatar GM Debate. Speaking on the opening panel of the conference, which was held at Grand Hyatt Doha on April 10, hoteliers including Four Seasons Doha regional VP and GM Simon Casson and Grand Hyatt Doha GM Christoph Franzen lamented the lack of attractions on offer in the city. “We need to do more. What can we do?” said Casson. “A destination with one golf course trying to attract leisure business, [we need] a water park, we have one which is an hour and half out of town, so [we need] things that are central to the destination, [we need to] develop assets that are already there, we have a great race track for the Moto GP but no infrastructure around it to make it a place people want to visit, so it’s leveraging existing infrastructure as well as building new.” Casson continued: “Do we do enough to attract the other GCC markets?”No we don’t. But we have to be diverse and we have to be more authentic. At a Qatari hoteliers forum, there are one or two Qataris, I think we have to work harder to figure out how we become more integrated and how we attract more locals into the business to give us authenticity” “A lot of our outside presence and awareness is driven by Qatar Airways advertisement, i think that they do such a great job at promoting the destination, but I think we need to partner more with the tourism authority and I think there needs to be a much more strategic plan for how Qatar is going to grow,” asserted Casson. – HOTELIER MIDDLE EAST
British teacher faces a year in jail for having lunch with married man in Abu Dhabi A British woman could be locked up for a year in an Abu Dhabi jail for having a glass of wine with a married man. The expat teacher, whose first name is believed to be Lisa, says she was introduced to the Syrian man by a male colleague. He is understood to have eaten with the pair but then left them alone at the man’s house – where the woman was arrested. She has now appeared in court in the strict Arab emirate, charged with being alone in the company of a man other than her husband or a close relative, and drinking alcohol without a licence. The court heard that the Syrian threw his wife out of their home last week after an argument. After she complained to police about her husband’s behaviour, officers visited him the next day and found him enjoying an afterlunch glass of wine with the British woman, who has not been officially named. The man’s wife insisted that officials press charges when she was told that her husband had been drinking with another woman. If found guilty under the country’s strict legislation, which is influenced by Islam’s sharia law, the teacher could be imprisoned for as long as 12 months. Police arrested the British teacher and her host for being alone together and drinking alcohol illegally. ‘She is looking at anything between a month in jail or a year for being alone with a man who is not her husband,’ a UAE legal expert told the Sun. ‘As in so many alcohol cases, it only becomes a problem if someone makes a complaint to the police and they are obliged to act.’ The case highlights the paradoxical nature of life in the United Arab Emirates, which has a reputation as the party capital of the Middle East despite its strict Islamic culture. The Syrian man will not be punished for being with the Briton, as it is not a crime for men to socialise with women, but has been detained on a separate drugs charge – DAILY MAIL.
Gulf Insider May 2013
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دﻳ
Bahrain
Amin Law Firm and Business Consultancy Owned and managed by lawyers, and legal and business consultants with over 25 years experience, Amin Law Firm & Business Consultancy has quite an impressive roster of clients for a newly established firm. They offer a range of legal services to institutional clients including those from the government and corporate sector as well as high net worth individuals. The firm offers a full range of legal, business and consultancy services including corporate, commercial, housing projects, funds, banking and finance, real estate, labour and employment, contracts, mergers, commercial and residential property, marine law, restructuring, litigation, arbitration and dispute resolution. There is also a special department for criminal law and company secretary services in addition to conducting due diligences. The firm offers bilingual services – Arabic and English. The team here has practical experience in arbitration, civil and commercial law, company law, contracts, telecommunications, shipping, real estate, banking, and education, secretarial and corporate governance.
For more details call on Tel. +973 1784 1222 or visit: www.aminlawfirm.net
BMI Launches Premier Experience Service BMI Bank unveiled its latest service offering, catering to the affluent individual looking to receive personalised attention and tailored financial solutions from their banking partner. Prestige, the bank’s premier service proposition was launched at a dinner held at the Capital Club and was attended by senior officials of the Bank along with VIPs and exclusive guests. As a ticket to a world of unparalleled benefits and exclusive treatment, Benefits with Prestige include a dedicated relationship manager and service at the bank’s lounges within its branches, preferential tariffs, an exclusive signingon-gift offering customers special hotel and dining benefits as well as discounted pricing on assets, preferential term deposit rates, fast track service, financial planning assistance, exclusive invites to special social events and a substantially increased cash withdrawal limit per day to name a few.
Visit www.bmibank.com.bh or call on Tel. +973 1750 8080
Win with KFH’s Libshara Campaign Kuwait Finance House Bahrain announced another first in the launch of its new Libshara Savings Account campaign. Now, in addition to luxury villas and monthly cash prizes, Libshara customers can win prizes worth over $2 million and 4 large golden plots of prime land, each measuring 5,380sq.ft. in Sarat, Diyar Al Muharraq. Libshara is an investment savings account that is compliant with the Islamic Shari’a principles and offers over 55 cash prizes monthly. Clients are entitled to a raffle entry for every BD50 saved with KFH-Bahrain’s Libshara Savings Account.
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Gulf Insider May 2013
ﺧــﺒــﺮة
Business News
Tourism to be Saudi’s biggest employer by 2020 Saudi Arabia’s burgeoning travel industry will soon be the largest employer in the kingdom, according to the Saudi Arabian Monetary Agency (SAMA). Nearly 1.8m people will work in tourism by 2020 – almost triple the number in 2011, a SAMA report said, according to Arab News. A number of new hotels are being built in the kingdom as it aims to boost tourism numbers and cater for the influx of pilgrims who travel there for the Hajj and Umrah. The SAMA report says employees in the tourism sector would rapidly increase from the 670,000 jobs in 2011, a 5.9 percent increase on 2010. Tourism jobs accounted for 7.6 percent of the total workers of 8.8m in 2011, and was forecast to rise to 9.7 percent. “We expect the sector would provide 841,000 direct jobs and 421,000 indirect jobs by 2015 and 1.2m direct jobs and 591,000 indirect jobs by 2020,” the report said. ARABIAN TRAVEL NEWS
Men ejected from Saudi festival, deported for ‘being too handsome’ An annual culture festival in the Saudi Arabian capital of Riyadh was interrupted when three men from the United Arab Emirates stand were ejected for being too handsome. “A festival official said the three Emiratis were taken out on the grounds [that] they are too handsome and that the Commission members feared female visitors could fall for them,” a news service said, adding that “the festival’s management took urgent measures to deport the three to Abu Dhabi.” We have this problem a lot. In fact, a prerequisite of employment at our site is at least one prior arrest for extreme handsomeness or beauty. – EMIRATES 24/7
Saudi mortgage law yet to have desired impact The mortgage law introduced in Saudi Arabia in the middle of last year with a view to kick-starting the home lending market has yet to have the desired effect, according to a new report. CBRE’s latest Marketview report on Saudi Arabia states that the muchhighlighted shortage of new homes has been attributed to the fact that there is a lack of security for lenders in the event of defaults. The mortgage law, which was debated for around 15 years, is an attempt to resolve this. “Sadly, this has not proven to be the case, with most focus applied to finance companies rather than banks,” said CBRE’s head of research & consultancy at CBRE’s EMEA research division. The report also questions the widely-held assumption that Saudi Arabia needs the 500,000-plus number of new homes that are often cited in order to fill a perceived gap between demand and supply. CBRE argues that there is a difficulty in assessing true housing need as it requires a judgement on what the average household size should be. Household sizes in Saudi have fallen slightly in the last decade - from 6.08 to 5.94 - and many analysts have assumed that argued that the long term trend will be for Saudi to move closer to five people per household (the Western European norm is 2.5).– CONSTRUCTION NEWS
Cairo airport to partly close in summer to save power Cairo international airport will close most of its runways for four hours each day from early June to save power for the Egyptian government that is struggling to pay for fuel imports for power stations, the minister of civil aviation said. Power cuts have become more frequent since the uprising that ousted President Hosni Mubarak in 2011. Two years of political upheavals have choked off tourism revenues and pressured the currency, triggering a soaring budget deficit. Egypt’s new Islamist leaders are trying to negotiate a credit line with the International Monetary Fund as the country faces a lack of funds to buy fuel, causing repeated power cuts. Shortages of state-subsidised diesel have paralysed transportation in parts of the country and fuel problems are expected to worsen as summer approaches and householders switch on their air conditioners. – ARABIAN BUSINESS Gulf Insider May 2013
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Feature Advertorial
Hong Kong Asia’s World City
H
ong Kong, Asia’s world city is full of fun stuff to do this summer! You can take a family photo at Victoria Harbour and say ‘cheers’ to the camera, participate in the summer activities at the city’s various theme parks, visit any the four fascinating museums, explore the unique wild life and plants in the countryside on the outlying islands, shop in the city’s many malls and markets, and enjoy the delicious food. GFI
Cathay Pacific Airways flies non-stop between Bahrain and Hong Kong. For details visit www.cathaypacific.com/bh or call 17226226.
Bahrain International Airport staff named the Middle East’s Best
B
ahrain International Airport (BIA) staff members were voted as the Middle East’s Best Airport Staff at one of the industry’s most prestigious awards, the 2013 SKYTRAX World Airport Awards held at Passenger Terminal EXPO in Geneva, Switzerland. Designed to celebrate and reward excellence in airports world-wide, the award recognizes BIA as a world-class airport in the Middle East committed to providing efficient, secure, safe and comfortable travel experiences within friendly surroundings. Chief Executive Officer of Bahrain Airport Company (BAC), Mr. Mohamed Yousif Al- Binfalah, confirmed upon accepting the award that winning this prominent accolade is a testament to the professionalism of BAC’s staff and
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Gulf Insider May 2013
hotel category. All this contributed to make BIA part of the world’s top 100 airports as listed by Skytrax. Established in the early 1930s, BIA was the first airport to operate in the Arabian Gulf. Today, the airport caters to 38 airlines flying to 51 destinations worldwide, accommodating approximately 9 million passengers a year. An 8.8% increase in passenger traffic was reported during 2012, following a series of development initiatives at the airport. The airport previously won a number of internationally renowned awards including the SKYTRAX World Airport Awards for the Best Airport in Middle East 2010. GFI
its partners in providing excellence in passenger services as we keep in line with the company’s mission to offer passengers with an exceptional travel experience SKYTRAX awards are voted for by airport customers from around the world, whereby 12.1 million responses were garnered this year. BIA was also nominated for another two categories, Middle East’s best airport and World’s Best Airport by Passenger Numbers (for airports accommodating 5 -10 million passengers a year), where it has been ranked in the 3rd and 6th place respectively. This is in addition to a nomination for the Movenpick Hotel Bahrain in the best Middle East airport BAC Team with Edward Plaisted chairman of Skytrax
Special Feature
100 Leaders in Bahrain To celebrate reaching our milestone 100th issue we highlight 100 Bahrain based leaders across 10 professional sectors. To give each adequate space we list 50 in this issue, with the remaining 50 to be published in Gulf Insider next month. Of course we don’t pretend this is a definitive list as there are many, many outstanding people we could include. So, if there’s anyone you would like to nominate to be included next month then send details to editorial1@ArabianMagazines.com and our editorial team will consider.
Government
HRH Princess Sabeeka bint Ibrahim Al Khalifa
President of the Supreme Council for Women
S
ince its establishment in 2001, HRH Princess Sabeeka bint Ibrahim Al Khalifa has headed the Supreme Council for Women, which works to empower Bahraini women and families across many different fields. Her Royal Highness also chairs the Higher National Committee ensuring the implementation of the Bahraini model for mainstreaming women’s needs in the government action plan. She has also launched the Economic Empowerment program for Bahraini Women which aims at decreasing the percentage of unemployment for Bahraini women, empowering women to become entrepreneurs and increase the participation of women in the national economy. As First Lady, her Royal Highness focuses on several important issues, including the participation of women in the development process and in enhancing projects aiming to assist families with limited income to diversify their sources of income, particularly in the area of handicrafts. Other areas of focus are youth and childhood, combating human trafficking, as well as peace and social security. She has also taken an interest in developing and preserving the environment and agricultural sector in the Kingdom of Bahrain The important efforts of Her Royal Highness has extended beyond Bahrain as well. From 2005-2007, she was President of the Arab Women Organization, overseeing the first ever issuance of the Arab Youth Strategy, which aims to support women as part of the nation building process. She has also addressed the United Nations General Assembly on family issues.
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Gulf Insider May 2013
Sponsored by
Government
HE Shaikh Nasser bin Hamad Al Khalifa President, Supreme Council for Youth & Sports
H
E Shaikh Nasser bin Hamad Al Khalifa has been actively involved in developing and enhancing the sports scenario in the kingdom. He has initiated and guided a number of projects that have supported sports persons in Bahrain. HE Shaikh Nasser inaugurated the premises of the Al-Reef Association Club, whose construction has been finished by the General Organization for Youth and Sports (GOYS) in January this year and emphasised that this construction project bespeaks of the wise leadership’s attention to boosting the welfare of youth and sports in the Kingdom of Bahrain. Speaking of the first edition of the recently held women races, he stressed the importance of this event that was organised by Nasser bin Hamad Foundation and hoped that the sporting event would gain regional and international dimensions.
Feature Special
HE Shaikh Mohammed bin Essa Al Khalifa
Government
Political & Economic Advisor to HRH the Crown Prince’s Court
H
E Shaikh Mohammed is deeply involved in the wider economic development of the region, notably through the World Economic Forum’s Davos and regional fora. He chairs institutions including Tamkeen (Labor Fund), Bahrain Development Bank, Bahrain Polytechnic, The Young Arab Leaders’ Bahrain chapter and Capital Club, Bahrain. He is a board member of Bahrain Association of Banks, Bahrain Labour Market Regulatory Authority and The Crown Prince’s International Scholarship Programme. HE Shaikh Mohammed holds a Bachelor’s degree in Economic Theory from the American University in Washington D.C. and a Post Graduate Diploma in Business Studies from the London School of Economics. Speaking about the Tamkeen Expo 2013 he underlined the strength of the Bahraini economy and added that the Kingdom is taking steady and sure steps toward further progress and prosperity under the reform initiatives of His Majesty the King and the astute guidance of HRH the Crown Prince Salman bin Hamad Al Khalifa, Chairman of the Economic Development Board – with Tamkeen being one of the cornerstones of these economic reform initiatives.
HE Shaikha Mai bint Mohammed Al Khalifa Government
HE Shaikh Daij bin Salman bin Daij Al Khalifa Chairman General Organisation of Sea Ports
T
he Chairman of General Organisation of Sea Ports(GOP), Shaikh Daij holds a BSBA in International Business from the American University. He was named the “Personality of the Year” Award of the Seatrade Middle East &Indian Subcontinent Awards 2010. With his leadership, he aims to promote the kingdom’s maritime and logistics industries by optimizing all opportunities for clients. At the same time, hope for GOP to become a catalyst for development by positioning Bahrain as a global maritime and logistics centre. As he rightly says, there are fundamental values for GOP which consists of sustainability, competitiveness and fairness. The organisation has helped the Kingdom of Bahrain grow to become a prime destination for business. The Bahrain government has helped raise Bahrain’s image in these sectors and have encouraged participation in international events. With the continued support from the government, Bahrain will be at the forefront in this sector.
Government
Minister of Culture
H
E Shaikha Mai bint Mohammed Al Khalifa redefined the art and culture scene in Bahrain. A broad-minded individual with a vision to put Bahrain on the international canvas, she has taken many initiatives to promote the kingdom’s cultural sector. The book ‘World Heritage in the Arab Countries’ which was launched by HE Shaikha Mai in 2011 received the Best Book Prize 2012, annually awarded in Europe, earlier this year. The publication is a collection of the 66 Arab sites that have been bestowed the title of having ‘Outstanding Universal Value’ on the World Heritage list. The recently held Spring of Culture is another great initiative by HE Sheikha Mai. Speaking about the festival, she shares that it’s a good thing for it to coincide with Bahrainis celebrating the Kingdom as the Capital of Arab Tourism and that coming together of the people of Bahrain has placed the kingdom at the forefront of accomplishment.
Sponsored by
Gulf Insider May 2013
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Special Feature
Telecommunication
Mohammed Zainalabedin General Manager – Zain Bahrain
K
nown as a dynamic leader in the telecommunications industry, Mohammed Zainalabedin has been with Zain since operations in the Kingdom of Bahrain started in 2003. He quickly rose through the ranks to become the General Manager in 2008 and has been instrumental in Zain’s attainment of market leadership against the incumbent in just five and a half years, as well as in achieving 91% Bahrainization of the company. He has been twice selected a key industry trend-setter in the under-40 category by the prestigious industry journal, Global Telecoms Business, being the only GCC executive on the list. He has Bachelor of Science (Hons.) in Computer Engineering from King Fahad University of Petroleum and Minerals, Saudi Arabia.
Travel
Brian Tsoi
Country Manager Bahrain, Saudi Arabia and Offline Middle East Cathay Pacific Airways
B
rian Tsoi joined Cathay Pacific in 2005. After a short stint in the kingdom from 2006-07 he returned as Country Manager for Bahrain, Saudi Arabia and Offline Middle East since August 2012, at the age of 27. He associates humility, honesty and the ability to delegate as key to good leadership and says that great leaders lead by being role models, challenging the status quo, painting their vision with compelling passion and bringing out the best in their team. Brian speaks about his favourite leader Deng Xiaoping, who helped develop China and eradicate poverty. He says that he aims to ensure that his customers, partners and team members feel happy about choosing Cathay Pacific and thus build a long term bond with them. He is happy about how he has handled talent management and recruitment projects, ensuring the right fit for the organisation. He adds that innovation in service offerings and service delivery are other areas of his achievement. Brian is happy that the open skies policy and the airline’s agreement on unlimited flights to and from Hong Kong has helped them cater to the demand of the travel public. Cathay Pacific recently brought ‘The World’s Best Business Class’ to the Middle East which has raised the bar for luxury air travel.
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Gulf Insider May 2013
Sponsored by
DJ Flanders
Hospitality
General Manager The Royal Golf Club
D
J Flanders has 20 years of industry experience operating high-end golf facilities around the world. He has worked with golfing properties in the USA – Texas, Arizona, New York, Japan and the Gulf – Abu Dhabi and now Bahrain. In 2000, he was awarded the PGA of America’s Southwest Section Merchandiser of the Year in the Resort Category, presented the Troon Golf’s Most Improved Facility of the Year Award in 2001, “The Top 20 Most Admired Operators in Golf” in 2008 and The Muttontown Club, an exclusive 18-hole facility located on the North Shore of Long Island, New York in 2010. Flanders believes in leading by example and transparency while dealing with associates and colleagues. It’s all about being accountable, taking responsibility for one’s shortcomings and improving upon them. The golf enthusiast admires Dana Garmany, CEO of Troon Golf and commends how he still engages with each and every one of his associates on a weekly basis via email. Flanders aims at aligning the goals of their associates, managers and the organisation. He believes that the government’s tourism-related initiatives benefit the Royal Golf Club greatly as they bring golfing tourism to our Club. “The key to successful leadership today is influence, not authority.” Kenneth Blanchard
Feature Special
Travel
Education
Serhan Asay
Professor James Finucane Professor and Chairman, Department of Medicine, RCSI Bahrain
Regional Director for Bahrain Turkish Airlines
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“Be measured in your thoughts, words, and actions, as what goes around comes around.”
native of Turkey, Serhan Asay took his position as Regional Director for Bahrain in 2008 after 16 years of experience with the company around the globe. Under his leadership, the sound policies, hard work, product improvements and sales and marketing initiatives have rewarded Turkish Airlines with steady and focused growth in Bahrain, increased flights and customer service personnel, which has strengthened their market position strategically. Serhan continues to pursue his goal for Turkish Airlines of “being the preferred choice for affordable, luxurious, and safe travel throughout the world.” As a leader in the industry, Serhan says that the best piece of leadership advice he has received is to “be measured in your thoughts, words, and actions, as what goes around comes around.” He also notes that the Bahrain government has been very helpful in a business sense and the government initiatives of “keeping Bahrain in the forefront of socio-political and commercial progress has been the keen focus of the government. We as an airline have responded by effectively employing a fair cross-section of the ethnic social fabric focusing on government policy of Bahrainisation to empower Bahrainies and fulfill our corporate social responsibility at the same time.”
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fter completing his post-graduate training in Medicine / Endocrinology at London and Birmingham, Professor James Finucane joined RCSI Bahrain in 2008 after gaining substantial experience in Dublin. As the professor and Chairman of the Depatment of Medicine, he has strived to consolidate RCSI’s position as the pre-eminent medical school in the kingdom. “The happiness of teaching is felt most when the students you have taught and nurtured turn into the bright, well-educated, and idealistic young citizens of tomorrow. There is no joy greater than that” he said. With Winston Churchill as his inspiration, he believes that the ability to reach a decision and act on it is what makes a good leader. On that note,RCSI is thankful for the excellent cooperation from the Ministry of Health and Defense Forces in respect of access to hospitals which is essential for the training of the students. The opening of King Hamad University Hospital has also helped students gain immense knowledge and training.
Automotive
Mohamed Najeeb Abdulla
General Manager Bahrain and Saudi Arabia, Harley Davidson
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ohamed Najeeb Abdulla joined Harley Davidson in 1996 as a junior sales staff. After working at different levels in Harley Davidson across the Middle East, he moved to Bahrain in 2007 to look after the operations in Bahrain and Saudi. After years of experience in different levels of the organisation, he is determined to make Harley Davidson ‘Number 1’ in the industry. “You are neither wrong nor right because the crowd says so, you are right or wrong from the facts and figures you analyse from your actions.” With the words of Warren Buffett in mind, Harley Davidson works to maintain the trust of their customers. Like how one rightly says “Look after your client and he will look after your business”. Harley Davidson will always be thankful to the Bahraini Government for doing a great job in making the kingdom business friendly. The FTA signed by Bahrain and USA is what brought the company to the island.
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Telecommunication
Rashid Abdulla Batelco Bahrain CEO
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aving over 3 decades of rich experience in the telecoms business, Rashid Abdulla has been the CEO for Batelco, Bahrain since January 2011. Prior to this he was Managing Director of Qualitynet, Batelco’s sister operation in Kuwait. He began his career as student in 1979 with Batelco’s former shareholder, Cable & Wireless and training at their Telecommunications College in the UK. He played an instrumental role in the launch of Internet Services in 1995. Rashid’s leadership style is to work closely with colleagues, consistently interact with them and obtain feedback. He ensures that he never takes his assumptions to be correct before they really are. Steve Jobs is one leader that he admires the most because of the way the former transformed the technology sector. Becoming CEO of Batelco Bahrain has been the crowning glory of Rashid’s career. He joined Batelco in 1979 and believes that he has obtained his current designation the through hard work. Another achievement that he is proud of is his major role in the launch of Internet Services in 1995, which remains as one of Batelco’s most significant and far reaching accomplishments. Rashid intends increase focus on adjacent services and OTT services along side reducing operating costs and aspires to lead Batelco in making its contribution, investing in the development of state of the art technology.
Business
Amal Almoayyad Executive Director Ashrafs
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result-driven Management Professional with nearly 33 years of experience specialising in Business Development, Product Management and Team Management; Amal Almoayyed has been the Executive Director of Ashrafs since 1996. Under her leadership, Ashrafs has seen incredible success and has become one of the oldest and prestigious retailers and wholesale distributors in Bahrain. “There is nothing noble in being superior to others. True nobility lies in being superior to your former self”. With humility, bold dreams and a vision of what the company will look like in the future, she hopes to achieve the wisdom of leadership vision, future focus, developing human relations, building team unity towards the common goal of Ashrafs. She also notes that Tamkeen has been very effective in providing substantial help to small and medium enterprises. It is off to a good start! 20
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Banking & Finance
Abdulkarim Ahmed Bucheery Chairman, BBK
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bdulkarim Ahmed Bucheery has been the chairman and member for a number of committees. He has 32 years of extensive and diverse banking experience across fields including commercial banking with particular strength in Credit Administration, Credit Risk, Marketing, Country Risk, Product Knowledge including Islamic Banking and Executive Management. He believes that good vision, commitment, high emotional and social intelligence, and quick decisionmaking abilities are important criteria for good leadership. Abdulkarim follows three advices; have confidence in your own abilities, don’t hesitate to break senseless rules and laws and think big if you want to make it big! He aims to increase profits for BBK while preserving the quality of its services and to develop employees while rewarding them. He bagged the Bahrain’s Banker of the Year Award in 2009, one of the most difficult years for the banking industry in the recent history. He believes that business should be awarded based on merit and no bias should be given to government supported entities.
Feature Special
Medical
Dr George Cheriyan
CEO and Chief Medical Officer American Mission Hospital
A Automotive
Zayed R. Alzayani
Managing Director, Euro Motors
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ayed Al Zayani is a classic example of ‘one head, many hats’. He is the Chairman of BIC, Vice Chairman of Al Zayani Investments, Zayani Motors, Zayani Leasing and Zayani Properties. He is also a Board Member at Midal Cables, Aluwheel, Young Arab Leaders (Bahrain Chapter) and Sakhir City Development Co. He believes that a true leader leads by example; someone who is at the front of the pack in trouble times, and shares credit with the team in good times. Talking about the best piece of leadership advice he has received so far he says that its best not to rush while making an important decision, rather take your time before responding. Nelson Mandela is a leader that Zayed admires the most because of his determination to succeed in bringing his nation together against all odds. “Mandela was locked up for 27 years but he didn’t let his nation split.” Zayed’s goal for Euro Motors is to help his team and himself to achieve customer satisfaction, growth and profitability. He also aspires to attain staff loyalty and satisfaction. He believes that if these human resource goals are met, all other individual and organizational goals fall in place. Zayed is most proud of his achievement is restoring the F1 Grand Prix back to Bahrain in last year. Though he appreciates most government initiatives to stimulate business in the kingdom, he believes that there is scope to do much more.
trained Improvement Advisor from the Institute of Healthcare Improvement (IHI) in Cambridge, MA, Dr George Cheriyan has been the CEO/ Chief Medical Officer of American Mission Hospital since November 2009. He moved into this position after a 30 year career as a Neonatologist. Under his guidance, he hopes to make high quality healthcare accessible to all regardless of the ability to pay for it. As a role model to many, Dr George Cheriyan says the best piece of advice he has received is to “Always walk the talk; let people see truth, integrity and teamwork in action”. Living by the words of Mahatma Gandhi to “be the change you want to see”; he hopes to lead with the ability to get people to buy into the vision of creating a great organisation that will fulfill its primary mission. At the same time, making them feel that they and their talents are unique and valuable in achieving this goal. He is also thankful to Tamkeen for giving opportunities for young Bahrainis to be trained with much needed skills in the competitive work environment. It has helped our organisation become more competitive through workforce development and infrastructure improvements.
Automotive
Peter Green
General Manager Behbehani Brothers WLL
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UK citizen, Peter Green has been employed in the Automotive Industry for the last 41 years. After gaining experience of the industry from various part of the world, he joined the Behbehani Brothers as the Automotive General Manager. Under his leadership, he hopes to attain complete customer satisfaction. He notes that this is the core of any successful business. Customer expectations evolve and so should the business practices. “Turnover is vanity, Profit is sanity”. According to him, recognising the difference between the both allows organisations to make the right decisions for the future and ensure that they continue to meet expectations of the stake holders, Customers, Principals and Shareholders. He also noted that the Bahrain government has come out with initiatives that continue to have a vision for the future. Everyone has benefitted from the confidence they bring. They have given organisations the opportunity to invest further in the facilities that will deliver tangible positive results to businesses.
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Special Feature
Hospitality
Puneet Singh
General Manager Kempinski Grand & Ixir Hotel
Hospitality
Shahnaz Pakravan
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ith vast experience up his sleeves, Puneet Singh joined the Kempinski Grand &Ixir Hotel early this year as the General Manager. Under his leadership, he hopes to deliver memorable experiences for the clients, to give back to the community and contribute towards the local economy and to deliver the financial expectations of the stakeholders. He aims to ensure that Kempinksi remains an innovative and creative organisation, embracing change with open arms, to perform better and to be the hotel of choice in the kingdom, today and for the years to come. He works by the words of Jack Welch, “Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.” He is grateful to Tamkeen for creating a platform that gives an opportunity to get more Bahrainis into the various fields of the hospitality industry. As an hotelier, government initiatives to promote Bahrain as a tourism destination are imperative and Bahrain having been the Capital of Arab Culture for 2012, and Manama’s nomination for Capital of Arab Tourism for 2013 benefits the hotel and tourism industy.
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General Manager Capital Club Bahrain
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aving a rich work experience that has included running a 200 year old boutique hotel, working in events and acting as a broadcast producer; Pakravan is now the General Manager of Capital Club, Bahrain. According to her, the best leaders are those that value human capital above all else. It also helps to have good communication skills, intuition, to be able to laugh at yourself; and the ability to delegate, inspire, and think on your feet. With the advice of “Being the General, but working like the Soldier”, she hopes to bring about cohesiveness within the organisation. Bahrain is definitely at the forefront of real change through innovation and initiatives committed to refreshing the business landscape. As an organisation, Capital Club is privileged to have members who are great change makers such as EDB and Mumtalakat.
Real Estate
Aaref Hejres Managing Director Diyar Al Muharraq
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aref Hejres is the Managing Director of Diyar Al Muharraq; a unique, fully integrated, master-planned city for the people of Bahrain. He is responsible for achieving every aspect of the landmark development’s vision. “Coming together is a beginning; keeping together is progress; working together is success.” Keeping in mind Henry Ford’s words, he hopes to create a thriving work environment that has energy, commitment and focus; to be market driven yet keep core values in place; to build on traditions and cultural values and create something distinctive and unique. According to him, a good leader must possess three outstanding qualities- Confidence, Commitment and Communication. He states that, in recent years the Bahrain government has promoted affordable housing through Private-Public Partnerships arrangements, which are new to Bahrain and to the region; and through indirect partnerships between the state and private developers.
Feature Special
Morgan Sunderland
Automotive
Brand Manager, Porsche
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organ Sunderland’s career in the automobile business began as a child at his father’s firm. He started to buy and sell cars in his teens and his first sales role was for a sports car importer. Morgan currently oversees sales and service at Porsche and has worked with VW, Mercedes-Benz and Porsche in the UK, in the past. He thinks that the ability to empower others is what makes a good leader. A great leader would excite others by sharing his vision and goals with them, with a clear direction. A good leader is a forward thinker and sees change as inevitable. Morgan can’t stress less on how important it is to give attention to detail. He thinks this can set one’s business apart from one’s competition. He shares his favourite quote by Robin Sharma, “The more successful you and your company become, and the more humble you need to be to your customers.”He idolises Robin Sharma as a life leader and feels the author’s work spurs one to explore one’s understanding on what is important life. Morgans goal for his team is success and recognition as market leaders in the automotive industry who provide exclusive customer experience. He shares that they are investing in global training plans for their employees and developing facilities to improve.
Industry
Hospitality
Dr. Adel Hamad Abdulrahman Hamad
Olivier Briand
General Manager, Fraser Suites Seef Bahrain
CEO, GARMCO
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r Adel Hamad Abdulrahman Hamad is an inspirational leader who has brought GARMCO to what it is today. He strives by the words of Albert Einstein “Try not to become a man of success but a man of value”. A man of humility, he believes that a good leader must have the following qualities- Self Awareness – know what you believe and why; Authenticity – be genuine; Trust – in those you work with; and Inspiration – share vision or purpose with those that you trust. The government has played a huge role in the upcoming of GARMCO. They help by bringing about a huge development and placing huge legislation to help develop organisations and business in Bahrain, an example is Tamkeen. GARMCO will always be grateful to Tamkeen for their training programmes. These programmes have been a huge help in providing sufficient training and knowledge to employees.
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French national, Olivier Briand has spent 17 years of his career in the hospitality business. A resident of Bahrain for the past five years, he enjoys living on the island. An avid traveller, he has a preference for South America as a destination and enjoys cooking. Olivier believes that the primary function of a leader in a business enterprise is to develop and persuasively convey a vision of what the organisation is trying to accomplish; a leader must be both inspirational and persuasive. He says that it’s important to take time to get to know people, understand them and ensure they are with you. Olivier aims for the brand to be the premier global leader through continuous innovation. He aims to maintain market share in line with the government initiatives and to create tactics and strategies for new clients and new revenue streams through constantly upgrading facilities and services.
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Business
Mona Yousif Almoayyad Managing Director Y.K. Almoayyad
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ne of the kingdom’s most influential businesswoman, Mona Yousif Almoayyed hails from one of Bahrain’s most established entrepreneurial families. Following her father’s advice to take care of the employees and to always put the customers needs first, she hopes to increase profitability and at the same time reward employees for their contribution to the success of the organisation. She thinks that true success is born by the hardwork and dedication of the employees. Being the president of the Bahrain Business Women Society for 6 years (2006-2012) has helped her in providing support and guidance to women who wish to conquer their dreams of owning businesses, according to her. A good leader must be transparent and fair, willing to listen to his/ her subordinates, and consistent in dealing with fellow people. As Dwight D. Eisenhower said,” Leadership: the art of getting someone else to do something you want done because he wants to do it.” She notes that, Tamkeen has helped to improve the standard of small and medium enterprises in Bahrain. With this initiative, there has been an improvement in the standard of Bahraini employees and small businesses. Y.K Almoayyad has benefited from the training of the employees and they also have allocated funds in Tamkeen which can be used for marketing, quality consultancy and buying machines to improve business.
Industry
Abdulla Ahmed Nass
Chairman Abdulla Ahmed Nass & Sons and Nass Corporation B.S.C
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orking in the construction sector from the age of 15, Abdulla Ahmed Nass started his career in Saudi Arabia and returned to Bahrain in 1963 to start Nass The Group. He created a company that that today is ranked as one of the best of its kind. Under his leadership, the company has seen incredible developments and he hopes to continue to enable the success of the company whilst strengthening its growth potential. As John D. Rockefeller, Jr. rightly said, “If you want to succeed, you should strike out on new paths rather than travel the worn paths of accepted success.” The Bahrain government has given NASS the opportunity to actively participate in the development of the country by helping the government to build what we see today throughout the Kingdom of Bahrain. NASS has had several turning points in the evolution of the group in the last 50 years but the major of them and a quantum leap was the change into a public corporation company.
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Telecommunication
Ulaiyan Al Wetaid CEO, VIVA Bahrain
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n engineer by qualification, Ulaiyan Al Wetaid has over 12 years of extensive experience in the telecommunications sector. Prior to being appointed as CEO of the telecom brand in the kingdom, he was part of the setup and launch team of VIVA Bahrain as the Chief Human Resources Officer. Al Wetaid has worked across verticals including Business modeling, Organisation Effectiveness, Strategic Planning, Regulatory Affairs and Human Resources roles. He has been responsible for leading the company’s overall strategic direction to achieve solid financial and commercial growth and profitability. One of his most recent achievements would be VIVAs partnership with Bahrain Motorsport Marshal Club. Al Wetaid led his team at VIVA to assist the race marshals at the recently held F1 Grand Prix in Bahrain by providing them with the 4G connectivity to empower them to deliver this unique application. “When we launched in 2010, our goal was to create a network that gave our customers limitless possibilities - this partnership is a real-life example of that.” - Ulaiyan Al Wetaid (on VIVA’s partnership with Bahrain Motorsport Marshals Club)
Feature Special
Business
Hospitality
Samy Boukhaled
General Manager, Sofitel Bahrain Zallaq Thalassa Sea & Spa & Area General Manager Bahrain & Saudi Arabia
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aving spent over 24 years with Accor Group, Samy Boukhalded assumed his first General Manager position in Morocco in 1998. He has been with Sofitel Luxury Hotels since 2004. He holds the Gold Bernache, Accor’s highest recognition for the performance category, which was one of his proudest moments. Samy believes in keeping things simple; clarity precedes mastery. He says that a good leader is a visionary with a strong integrity; someone who is not afraid to push boundaries with passion, persistence, dedication and commitment in order to effect change. He admires Gerard Pelisson, Co- founder of the Accor Group as his role model for his passion, vision and strategy. Samy harbours many goals for Sofitel Bahrain, including diversifying the hotel clientele and marketing the destination to everyone with particular interest in the European markets where the Thalassa brand is famous. He says he would like to host more international events.
Khalid Almoayed
Chairman, A.K. Almoayed Group
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halid Almoayed attributes the success of his organisation to their customers’ loyal support over generations and the diligence and professionalism of his employees. He says that his team and he are committed to serving the community through the provision of high quality products at the lowest possible prices. A.K. Almoayyed Group is a well established and highly respected family company which dates back many generations. The Group’s innate awareness and adaptability to changing needs in the industry practices has led the company to diversify into areas including manufacture of building products, shipping and logistics, and sports and leisure equipment, thanks to a strong and aggressive sales and marketing team. AKAG is a partner of choice for both regional businesses and international conglomerates. Khalid says that AKAG continuously looks out for investment opportunities and seeks global partners backed by technology and expertise who can contribute positively to the Bahrain economy.
Mahmood Hashim Al Kooheji
Government
CEO, Mumtalakat
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s the CEO of Mumtalakat, Al Kooheji oversees the management of the company’s stakes in over 35 commercial enterprises. He is responsible for devising and executing strategy to manage and grow the Kingdom’s strategic non-oil and gas related assets. Mahmood is also the Chairman of Alba, and currently sits on the boards of the Crown Prince’s International Scholarship Program, the Arab Petroleum Investment Corporation, and Governors of the Royal College of Surgeons in Ireland, Bahrain. Mahmood believes that education, experience and drive provide you with competencies. He thinks that a good leader surrounds himself/herself with advisors who will help him/her frame the issues and understand the stakes. Mahmood admires Steve Jobs who completely revolutionised everyday life with his innovations and creations. Mumtalakat’s two-pronged strategy – developing the existing portfolio and new projects for existing and new sectors has brought about positive results after using this strategy. At the Ministry of Finance, Mahmood and his team privatised two major power plants in the kingdom. At Mumtalakat he took some critical initiatives that improved Alba’s financial performance and governance. This got Alba a dual listing on the Bahrain Bourse and the London Stock Exchange. Talking of government initiatives in the business sector Mahmood sees Mumtalakat as a great example of a government initiative introduced to stimulate business growth in Bahrain.
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Banking & Finance
A Rahman Mohammed Al Jasmi Vice Chairman & Managing Director, GB Corp
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aving over two decades of commercial and investment banking experience, A Rahman Mohammed Al Jasmi is globally recognised for his efforts in building investment bridges, linking the region to global markets and promoting Islamic banking. He has been responsible for enabling huge investments into Bahrain and raising funds for developing real estate and infrastructural projects in the kingdom. A strong believer in national causes, Jasmi contributes towards the development of Bahrain both professionally and personally. He is involved in many community development programmes and has played an important role in projects including The Crown Prince’s Scholarship Fund. He believes that strong and stable human capital is a prerequisite and it’s important to empower citizens. He shares how Bahrain has many inherent factors that facilitate growth; its strategic location, depth of human capital, transparent regulations, strong ethical governance, economic and welfare measures, and leaders with a great vision.
Banking & Finance
Abdulhakeem Yaqoob Alkhayyat Business
Afnan Rashid Al Zayani
President – Al Zayani Commerical Services
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s President of multi-million dollar company, Al Zayani Commercial Services, Afnan Rashid Al Zayani is one of the leading businesswomen in Bahrain and has been recognized by Forbes as one of the most powerful Arab Women. She has also been Vice Chairwoman of the Bahrain Bourse since 2011, was twice elected to the board of the Bahrain Chamber of Industry and Commerce, and a board member of Al Ayam Publishing. Ms. Zayani has consistently used her position and influence to push for women’s issues in Bahrain and the Middle East. She was the President of Bahrain Businesswomen’s Society from 2002-2004 and is currently a board member. She exerted much influence in that position, in part being responsible for passing the first personal status laws in Bahrain which protect women’s rights in personal matters. Subsequently, she went on to head the MENA Business women’s network. She is also a board member of the Supreme Council for Women. Ms. Zayani has received the Ministry of Education Honors Award, the National Achievement Award, and the Best Business Professional in the Middle East Award. In 2010, she was also honored with the Leadership in Public Life Award from Vital Voices, a women’s empowerment organization. Additionally, she is an accomplished cook and has been featured in many cook books, on many cooking shows, and has been a judge at many major food competitions. 26
Gulf Insider May 2013
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Managing Director & CEO Kuwait Finance House Bahrain
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hairman of the board for the two largest real estate projects in the Kingdom of Bahrain, Durrat Al Bahrain and Diyar Al Muharraq, Abdulhakeem Yaqoob Alkhayyat is a regular speaker on a variety of topics including business and finance and frequently participates at local and international conferences. He also has dedicated part of his time to participate in the Board of Directors of non-profit Bahraini organisations. A Certified Public Accountant from the State of California, he graduated from the University of Texas at Austin in 1990 and 1991 with bachelor degrees in both majors of Business Administration and Middle Eastern Studies. Kuwait Finance House-Bahrain is a leading provider of Islamic commercial and investment banking services. Their Libshara campaign did very well and Abdulhakeem shares how they’ve taken it a step further by enhancing the prizes – higher cash rewards and strategically located plots of land. “The launch of this campaign reflects the continuous efforts of the Bank to reward our clients with something unique.” This initiative would help pump money into the system and thus improve over all liquidity and boost economy.
Feature Special
Association
Abdul Majid Al Gassab
Association
Dr Essam Abdulla Fakhro Chairman Bahrain Chamber of Commerce & Industry
President, Bahrain Society of Engineers
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aving a penchant for community service, Abdul Majid Al Gassab is a part of many associations and groups in Bahrain. He believes that the economic policies enhance the existing well-built economy and draw the attention of global investors; this maintains the momentum for the diversification of the economy. The Bahrain Society of Engineers is a professional body providing useful windows into the current state of the industry as well as for the direction in which it is heading. Abdul believes that Bahrain is combining market access, skilled labour, low operating costs and zero corporate taxes which are key to the success of a business friendly environment. He commends how Bahrain is offering a variety of opportunities as a tourist destination and continuously upgrading its logistics and infrastructure. The many cultural programmes are also adding to the tourism development of the kingdom.
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cquiring a Doctorate in Medical Engineering from London University, Dr Essam Fakhro is the Chairman of the Bahrain Chamber of Commerce and Industry. BCCI has played an effective role in contributing towards Bahrain’s development. Under his leadership, he hopes to represent and support the private sector and also help in the economic growth. The Kingdom of Bahrain has attained a leading position in the gulf region for the ease of doing business. Tamkeen has helped Bahrain in increasing the productivity. Also, at the same time he is thankful for providing training and developing individuals in the right skills for specific jobs. This will help boost the country’s competitiveness in the world markets. On a positive note, he hopes that Bahrain government will continue to create a sustainable growth for Bahrain’s economy, as well as sustainable social developments for the country.
Education
Dr Mona Rashed Al Zayani
Sports
Maryam Yusuf Jamal
Founder & Chairperson, Gulf University
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ne of the first Bahraini women to be appointed to the Shura Council, Dr Mona Rashed Al Zayani, in addition to being the founder of Gulf University, Berlitz International Language Institute Bahrain, Al-Manar Establishment for educational Scientific and Medical Equipments, and Bahrain Reading and Computer Center, is also part of many well-known associations in the kingdom including Bahrain Businesswomen Society, Mother & Child Care Welfare Society, Child Development Welfare Society. Dr Mona believes that businesses in the kingdom enjoy protection under the legal and regulatory systems including the enforcement or strict intellectual property and copyright laws. She thinks that the transparent and consistent economic development policies and programmes help businesses in a big way. An advocate of promoting global awareness that Bahrain is a liberal country, she thinks that the kingdom needs to be highlighted as one where modern outlook and history and culture are balanced.
Athlete
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orn in Ethiopia, Maryam Yusuf Jamal made in history in the 2012 Summer Olympics in London by becoming the first Bahraini athlete to win an Olympic Medal, claiming the bronze medal in the 1500m women’s race. However, even before bringing such a victory to Bahrain, Maryam has had a history of broken records, also becoming the first female athlete to win twice at the Asian Cross Country Championships in 2009. Having originally left Ethiopia for political reasons, Maryam was turned down the Swiss citizenship she applied for but was offered a home in Bahrain, who at the time was looking to enhance it’s athletic profile. When asked, what it means to her to represent Bahrain, she said “Bahrain is such a great country. They give athletes like me a lot of support, they are behind me 100 per cent of the time, and always so pleased when I do well. It makes me happy to be representing Bahrain on the track.”
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Business
Marketing & Communications
Mohammed Dadabhai
Khamis Al-Muqla
Chairman Dadabhai Group
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hairman of one of the most prestigious and well acclaimed group of companies in the Kingdom of Bahrain, Mohammed Dadabhai is an inspirational leader. A dedicated individual and a futurist, he has brought the organisation to what he envisioned it to be. The Dadabhai Group consists of 15 large scale business ventures. Under his leadership, he hopes to grab the opportunities present in the construction, hospitality, trading, education, travel and tourism and real estate sectors. The group thrives in the constant momentum of change and innovation that defines the business world today. The island’s commitment to democracy and free market ensures prosperity and a new momentum to the economy. Tamkeen has been extremely helpful in grooming the young leaders of tomorrow.
Founder Gulf Marcom Group
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pioneer in public relations and communications in the Gulf, Khamis Al-Muqla founded the Gulf Marcom Group (GMG). GMG is a leading marketing communications network with over 36 years of experience in the Middle East. A dedicated hard worker, Khamis hopes for Bahrain’s continued growth and for a better life for every Bahrain citizen. Business in Bahrain is the most open and liberal in the Middle East. The free market present helps business prosper, serving to all the needs of businesses and individuals and above all ensuring the long term prosperity of the people. The Economic Vision 2030 provides for the continued development based on principles like sustainability, competitiveness and fairness.
Business
Travel
Philip Bowell
CEO, Bahrain Airport Services
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hilip Bowell has served in senior positions for several major airlines and aviation companies around the world including British Caledonian Airways, United Airlines and British Airways. Having worked extensively in Europe, America, Africa and Asia, he is equipped with a fine blend of international aviation experience, leadership and strategic skills. Philip strives to train local talent and help them hone their skill set as this will pave the way for a better standard of living for Bahrainis. He believes that by investing more on human resources the dearth of skilled talent can be tackled and a generation of highly skilled citizens can be created. Bahrain’s business friendly laws have created the right business environment in the kingdom which Philip think is great. Easier company registrations and low tax rates add to an investor’s attraction for Bahraini environment. In addition he hopes that the kingdom markets itself as a tourist destination even more, by highlighting its intrinsic strengths.
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Gulf Insider May 2013
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Fuad Nonoo
Chairman & Co-owner, Nonoo Exchange
F
uad Nonoo has been associated with Nonoo Exchange, the first company to gain the confidence of the Western Union franchise, for a decade and a half. Since then the company opened a number of branches at strategic locations in the kingdom. In addition to his tremendous knowledge of finance and the gold and currency markets, Fuad is at the forefront of technology. He believes productivity and competence can be boosted through continuous training while providing a professional and amiable working environment and has executed this at his organisation. Fuad believes that Bahrain has businessfriendly policies and regulations and that having more tourist sector businesses including beaches, conference and exhibition facilities, sports complexes would help boost it as a tourist and business destination. Nonoo Exchange is the first exchange house in Bahrain to allow customers to transfer money overseas, not using a dedicated bank.
Feature Special
Education Banking & Finance
Ebrahim Mohammed Janahi
Sabah Almoayyed
Chief Executive Officer Eskan Bank
President, University of Bahrain (UOB)
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he University of Bahrain is one of the kingdom’s older educational institutions and has been providing the youth of the country with quality education since 1986. Ebrahim Mohammed Janahi ensures that as Bahrain’s national university, UOB is a place where high-performing students meet competent and skilled faculty for a rigorous academic experience. He says that the course structure and pedagogy are built to make students unleash their power of thought. Ebrahim believes that it’s critical that those involved in higher education improve the quality of graduates to respond to changes in the labor market and economy. He insists that UOB faculty and students adopt a determined entrepreneurial approach to advanced research and strategic partnerships and as a result create solutions that improve individuals’ lives, local communities in the kingdom and the world.
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ith a Masters Degree in Business Administration in Change Management/Marketing from DePaul University, Sabah Almoayyed is a successful woman icon in the Banking Sector. With ample amount of experience in various banks, she is the Chief Executive Officer of Eskan Bank. She says that Eskan Bank is focused on the identifying housing financing solutions for the island. This will help develop the economy and build a better life for Bahrain. Bahrain excels in the financial, tourism sector, capital market and media. Various government programmes have been initiated to encourage innovation and development of new growth sectors. These programmes will help lead Bahrain to a much brighter and strong economy.
Hospitality
Media
Patrick de Groot
Amy Morgan
General Manager, The Domain
CEO & Co-founder, Unisono
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s co-founder and Director of Strategy of Unisono, Amy has built a solid reputation as a leader in the fields of strategic brand development and entrepreneurial thinking. Amy also plays a key role as a speaker and mentor at a number of related initiatives and believes that a clear vision and determination are important criteria for good leadership. Speaking of her favourite leaders, Amy shares Mary Wollestonecraft and Eleanor Roosevelt, to Coco Chanel, Rosa Parks and Anita Roddick are some women who have led the way and inspired countless others around them. Amy thinks that thought the government is taking initiatives to support businesses and stimulate the economy, it can prove challenging to benefit from them. An increased focus on developing a culture that rewards excellence and competency would enhance standards in both the public and private sectors and attract more foreign businesses – transparency will be key to this.
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his Dutch national is specialised in hotel development and strategic marketing and has nearly 20 years of experience in the Middle East and Far East; Patrick de Groot has lived and worked in 13 countries and is experienced in achieving results across different cultures and languages. Patrick feels that a good leader listens and uses situationappropriate management styles to achieve the best possible result. A great believer in positive thinking and keeping an open mind, he aims to establish The Domain as a luxury hospitality brand, recognised for making a difference to international travelers and colleagues alike. He admires how Gerald Lawless led Jumeirah Group to where it is today. Patrick commends Tamkeen’s ESF initiative as being one that is sure to improve Bahrain’s long-term business environment and create a well-balanced business sector. He feels that Bahrain has modernised, but not lost its soul and that it is a place rich with arts, culture and character; a great platform from which to launch a very soulful brand.
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Special Feature
Media & Communication
Sunny Kulathakal Managing Editor SUNLIZ Publications
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writer and journalist, Sunny Kulathakal is a man with a mission that dates back to his first publication of Gulf Who’s Who that featured profiles of leading personalities in the Middle East. Based in Bahrain, he is also the Vice President of the Global Organisation of People of Indian Origin (GOPIO). He strongly believes that networking is important because until one is in good terms with others, the business or exchange of information cannot be done successfully. “Being the richest man in the Cemetry does not matter to me. Going to bed at night saying we have done something wonderful, that’s what matters to me. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose”- Steve Jobs The Kingdom of Bahrain with its blueprint for VISION 2030 has demonstrated to the whole world what this tiny island has achieved and will continue to do to help its citizens.
Telecommunication
Abdul Razak Jawahery
Chairman, Menatelecom
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aving over 23 years of experience in banking, Abdul Razak Jawahery established the placement team at KFH– Bahrain and is responsible for promoting the Bank and its investment products. He is also Head of Priority Banking and Head of Corporate Communications. Abdul Razak is the Chairman of Menatelecom, a wholly owned subsidiary of KFH–Bahrain and is also a member on the Board of Directors of Durrat Al-Bahrain, Durrat Marina, Durrat Resort Management. He is the Chairman of Miracle Graphics as well and holds a BBA and MBA from the UK in International Business. Speaking of the 4GLTE network bid, he shares that WiMAX technology is very close to LTE; the experience that Menatelecom has gained and the large amount of spectrum that we have, will allow us to offer speed and good quality service that are more focused on customers’ requirements. We have earned more knowledge than anybody else in the industry; this is our specialty and this gives us the experience required to accomplish the job in an exceptional manner.
Association
Khalid Abdulla Al Quod
Education
John W. Scott
Chairman Bahrain Corporate Social Responsibility Society
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halid Abdulla Al Quod holds a Bachelors Degree from the Arab Academy for Sciences, Technology and Maritime Transport. A respectable, hardworking and a dynamic speaker on leadership, he has just begun to pave the way for tomorrow’s leaders. He has envisioned focusing on the community needs, improving the quality of the young generation through effective events to attain a generation of leaders, and brand the capable future leaders into the right manner they deserve. Bahrain Corporate Social Responsibility Society (BCSRS) is aimed to strengthen Bahrain with a well formulated plan which will help buid a profitable future.
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Sponsored by
Chief Executive Officer Bahrain Polytechnic
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practicing artist, photographer and a visionary leader, John W Scott is the CEO of Bahrain Polytechnic. He brings with him more than 23 years of experience as a leader in the education sector. Under his leadership, this educational institute has been able to contribute to the creation of a workforce that ensures that the graduates think and develop creatively new businesses that boost Bahrain’s economy. The Bahrain government has brought to light various initiatives that will pave a path for the future of Bahrain. To help Bahrain Polytechnic, the government has helped to accommodate staff entry and visas to facilitate the rapid expansion and growth of the institute. “Business friendly means responding to the workforce needs by providing capability.”
Feature Special
Media & Communication
Training & Development
Dr Lulwa Al Mutlaq
Akram Miknas
President & CEO Golden Trust
Chairman Middle East Communication Network
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anked third on the list of the 50 Most Powerful People in the Media, Marketing and Advertising of 2011, the Lebanese-born and Bahrain based business tycoon, Akram Miknas is also the Founder and CEO of Fortune Promoseven (FP7). FP7 is one of the top advertising, media and marketing operators in the region. Hardwork plays a vital role in the success of every business. “Everyone has more than one role in life; you play them with the same passion and the same love.” He has a big dream to steer Bahrain towards a brighter future. In his opinion, Bahrain should continue and improve on being the cultural, educational and above all the service centre for the whole Gulf. The island has always been known for its high level of education and superior culture. He also says “Every individual must be able to understand how important the picture is that we draw for Bahrain.”
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resident and CEO of Golden Trust, Dr Lulwa Al Mutlaq holds an Honorary Doctorate in Business Administration and an Oxford Innovation Award. She began her career at the Ministry of Health and College of Health Sciences. She is optimistic of Bahrain’s global business. Bahrain has everything a global business hub requires. English speaking citizens, liberal laws on capital and profit restoration, zero tolerance to corruption and transparency. The island has a powerful pro-business environment. The Bahrain government is working to build on that tradition by making it easier for new businesses to start. She strongly believes that it is only through empowerment and advanced scientific, technical and academic training that a nation can aspire to build a new breed of professionals and skilled workforce.
Expose
Part 2 of our ‘100 Leaders in Bahrain’, Special Feature will appear in next month’s issue of Gulf Insider.
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Bahrain Telecoms Review
Menatelecom Bahrain Chairman, Mr Abdul Razak Jawahery on his company, and the future for telecoms.
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he telecom industry is so competitive. How does M e n a t e l e c o m a p p r o a c h product differentiation? Menatelecom’s products have a unique advantage over competitors in many ways; we offer devices that suit many different lifestyles and offer unparalleled convenience. For instance, our home device offers high-speed internet for your home and it comes with built-in WiFi, just plug it in when you get home and you’re connected with no installation required. Our MyFi device is small, portable, and allows you to connect up to 5 WiFi-enabled devices to the internet at up to 18Mb – anywhere in the Kingdom of Bahrain. Menatelecom has many devices and packages that make life easier and you can connect to the internet shortly after you leave the Mena branch.
We have earned more knowledge than anybody else in the industry; this is our specialty... Does Menatelecom cater more to the consumer or corporate segment? Although we offer the most competitive and convenient residential broadband packages on the island, we also have one of the largest portfolios 32
Gulf Insider May 2013
Telecoms Review Bahrain
Menatelecom has never stopped upgrading and improving its network in order to sustain the highest subscriber numbers and adopt the latest innovations in broadband technology.
Gulf Insider May 2013
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Bahrain Telecoms Review
Menatelecom is fortunate to have some of the best minds in the industry working seamlessly and giving it a competitive edge.
of business solutions in Bahrain, offering connectivity options over WiMAX, Microwave and Fiber. Our technical and enterprise solutions include business packages with dedicated speeds of up to 1Gb, VPN solutions, Carrier Pre-Select Service (CPS), International Private Leased Circuit (IPLC), Multi-Protocol Label Switching (MPLS) and Data Centre Hosting to name a few of the solutions offered. All these services are enhanced and monitored by a network operations centre working 24/7 to ensure a seamless operation, supported by a call centre managing customer queries, in addition to a dedicated business helpdesk for corporate customers.
go thanks to our High-Speed Wireless Service! In the context of the 4GLTE network bid, how do you think Menatelecom will be a better provider than other telecom companies? Since the launch of WiMAX services in 2008, Menatelecom has never stopped upgrading and improving its network in order to sustain the highest subscriber numbers and adopt the latest innovations in broadband technology. We have been gearing up for LTE for a long time; we have the knowledge, the experience and the network infrastructure required to provide a world-class 4GLTE network in the Kingdom of Bahrain.
How does your technology translate to the end consumer? Menatelecom has invested significantly in its network to be able to provide the best quality service at the lowest possible costs which has earned it the 2009 CommsMEA ISP of the Year Award. Mena has been instrumental in reducing broadband prices in Bahrain almost immediately after the launch of WiMAX services. Our customers enjoy the most competitive broadband and telephony prices in addition to unique benefits such as portability and unlimited free calls to other Mena numbers.
What steps have you been taking to gear up for this prospective giant leap? WiMAX technology is very close to LTE. The experience that we have gained and the large amount of spectrum that we have, will allow us to offer speed and good quality service that are more focused on customers’ requirements. We have earned more knowledge than anybody else in the industry; this is our specialty and this gives us the experience required to accomplish the job in an exceptional manner.
What is Menatelecom’s Unique Selling Proposition? We have a device and package tailored to every need. You can take your connection with you wherever you
What do you feel is the most important resource to any organisation and why? The most important resource to any organisation has to be its employees;
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having the most advanced wireless network in the region will not put you ahead of the game unless you have a competent, experienced and dedicated work force to support it. Menatelecom is fortunate to have some of the best minds in the industry working seamlessly and giving it a competitive edge. The telecom industry, like any other technology based industry has dynamically grown. What changes do you see two to three years from now? We mainly see huge growth in data traffic as do others in the telecom industry in addition to higher customer expectation in terms of quality of service. Most data traffic used to consist of web browsing and simple downloads, but now they have become more sophisticated as they contain more videos, games and streaming which require higher speeds and quality of service. We expect this trend to continue and accelerate over the next few years. Any innovation in the telecom sector that looks impossible now but you think could happen in the years to come? I believe that in the future It’s going to be a more integrated solution of telecom, ICT and content; a lot of the services offered now will become more internet and cloud driven whether its TV or gaming or mobile computing which has seen the introduction of new devices that require higher performance, higher resolution and faster broadband internet connectivity. GFI
To find out about the latest promotions visit www.menatelecom.com
Telecoms Review Bahrain
Beyond Connectivity By Ulaiyan Al Wetaid, CEO VIVA Bahrain
Mr Al Wetaid has over 12 years of extensive experience in the telecommunications sector including Business modeling, Organisation Effectiveness, Strategic Planning, Regulatory Affairs and Human Resources roles. As the CEO of VIVA Bahrain, he has been responsible for leading the company’s overall strategic direction to achieve solid financial, commercial growth and profitability.
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he phenomenal growth in the global mobile tele communications industry over the past two decades is best highlighted by the fact that mobile subscriber numbers are set to top seven billion in 2014, according to a report by United Nation’s International Telecommunication Union (ITU). By next year there will be more mobile subscriptions than people in the world! When you think that widespread mobile phone adoption only started in the midto-late 90s, this growth seems even more staggering. This global growth trend has been observed in the Middle East as well and the region has today one of the highest mobile penetration rates in the world, with 96% of the population having access to mobile communications (Ericsson Traffic & Market Data Report2011). Over the last few years the region has seen tremendous growth in mobile telephony driven by a combination of new technologies, a culture of connectivity and high volumes of sophisticated customers. In some markets such as Jordan and KSA, the average is more than two phones per person. In line with this exponential growth, Bahrain has witness also tremendous growth, with a reported 1.9 million mobile subscribers as of Q2 2012 representing a mobile
penetration rate of 158% according to the 2012 Market Indicators report from the TRA. The growth of the global industry is being driven by a number of key trends with affordability and coverage being the most influential factors. With voice tariffs on the decline and operators expanding their network footprints, mobile penetration has increased dramatically. One of the main contributors to this astonishing growth in the Telecommunications industry over the last 5 years has been the smartphone proliferation and subscribers’ evergrowing desire to access data on the move. This trend is demonstrated by research released by global firm IDC recently, showing that PC sales fell 14% in Q1 compared to the same period a year ago while smartphone penetration keeps increasing at rapid pace. This strongly suggests that people are moving away from the standard connectivity through PC and using more and more smartphones and tablets instead. This trend is highlighted by the exceptionally high sales of smartphones, with smartphones outselling feature phones. In fact, in Bahrain and the rest of the Middle East we have witnessed very strong growth in the smartphone sales with smartphone penetration representing around 50% of the new
device mobile sales in 2012. The increase in the number of smartphones along with their ever-improving ability to handle multimedia content has led to significant advances in the availability of content for mobile devices, to the point where it is common for people to streamvideos and use advanced data services (VOIP / videoconferencing) on their devices. As users demand more content and immediate access to it, networks and devices have been compelled to keep pace with data-hungry users. This brings us to 4G/LTE, the technology foundation on which next-generation mobile access is being built and its arrival in the Kingdom of Bahrain.The launch of 4G/LTE will be the first step towards the adoption of a new and empowering technology. From a consumer perspective, 4G/ LTE services will redefine the customer experience in terms of the data and connectivity capabilities a mobile device can offer. This will require operators to invest in their 4G network and services to deliver LTE customer experience. At VIVA, our core belief is that customers come first and we are committed to the delivery of a worldclass 4G experience that continues to transform the telecom industry in the Kingdom of Bahrain and gives customers the service quality they deserve. GFI Gulf Insider May 2013
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Bahrain Telecoms Review
4g in Bahrain – an Industry Review
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he bid for 12 lots of radio spectrum for next-generation telecom networks in Bahrain, announced by the Telecommunications Regulatory Authority (TRA) last November, was set to be finalized with the winners announced by mid April. However, the auction has been temporarily halted, “pending further notice,” after appeals from excluded wireless broadband operator, Menatelecom, to the TRA. The auction was initially open to any interested party, but was later restricted to existing licensees. Menatelecom, the WiMax operator in Bahrain has filed 3 appeals against this decision in Bahrain Courts. After the court decided in favor of Menatelecom for a second time, the TRA, who had previously made statements as to the need for better communications technology in Bahrain, announced a suspension of the bid. The bid for bands of spectrum on which to launch 4G LTE technology is an outcome of the National Telecommunications Plan of the Kingdom of Bahrain, published in July 2012, in which the Government of Bahrain laid forth a strategy for the telecommunications sector. One of the main priorities highlighted is to provide LTE technology across Bahrain under competitive conditions by releasing radio frequencies suitable for the provision of Post 3G mobile services. According to the report, Bahrain is currently disadvantaged “by the inability of its providers of mobile services to create infrastructure that complies with Long Term Evolution (LTE) standards in
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Telecoms Review Bahrain
4G LTE technology, the successor of 3G, provides mobile ultraboradband Internet access, providing download speeds of up to 100MBps.
a technically efficient manner”, and that the “[l]ack of efficiently provided Post 3G based services is likely to deprive citizens of attractive mobile functionality, and diminish the external perception of Bahrain as a leader in the adoption of technical innovation, especially in comparison with neighboring states.” The finalization of the bid will kick off a vast improvement in Bahrain’s communications infrastructure with the provision of Long Term Evolution (LTE) Technology. 4G LTE technology, the successor of 3G, provides mobile ultraboradband Internet access, providing download speeds of up to 100MBps and will provide an enormously enhanced user experience to residents of Bahrain. The improvement is also much needed, with Bahrain’s mobile penetration reaching above 160% and with telecommunications revenues accounting for approximately 4% of the Kingdom’s GDP (according the TRA). Despite the delay in the auction process, the incumbent mobile operators, Bahrain Telecommunications Company (Batelco), Kuwait’s Viva, and Zain Bahrain, have already begun launching 4G LTE services throughout Bahrain. Batelco was the first to launch 4G at the Bahrain International Circuit (BIC), also making the BIC the first International Racing Circuit in the Middle East to be equipped with such technology. Batelco CEO Rashid Abdulla, notes that “the launch marks a new milestone for Batelco and adds to its extensive record of great achievements.” According to Batelco, the initial response to the 4G launch has been very successful and Batelco is currently able to provide 4G to all major hotspots and vital areas of Bahrain, adding new sites on a daily basis. They add that die to Batelco’s historic precendence in the market, they have “amassed a wealth of experience over its long history of being Bahrain’s leading telecommunications provider. Additionally, on an annual basis Batelco pumps millions of dinars into new or upgraded infrastructure that benefits the Kingdom as a whole. Such experience, know-how and the availability of world class infrastructure and technology gives Batelco the edge when rolling out new products and services.”
Viva Bahrain is gearing up to launch their 4G network as well, but has not yet commenced operations. According to chief commercial officer Andrew Hanna in an interview with the Gulf Daily News, “Talk of what 4G LTE will enable is irrelevant until operators ensure extensive 4G network coverage and capacity to offer seamless connectivity. We have been working to make sure that we deliver the best customer experience when we go live.” He further noted that Viva plans to achieve 95% coverage in Bahrain before launching, as they would rather deliver true a true 4G experience from day one. Viva has already rolled out a test programme in which they have introduced the new technology to select customers to gain feedback on the customer experience in the buildup to the launch. Viva Bahrain CEO Ulaiyan Al Wetaid states that, “At VIVA, our core beliefs is that customers come first and we are committed to the delivery of a worldclass 4G experience that continues to transform the telecom industry in the Kingdom of Bahrain and gives customers the service quality they deserve.” Zain Bahrain has also recently launched 4G commercial services. As for Menatelecom, Chairman Abdul Razak Jawahery, states that Menatelecom would be a prime choice for consumers looking to enhance their experience with 4G services due to their familiarity experience with the market and with the technology. “Since the launch of WiMAX services in 2008, Menatelecom has never stopped upgrading and improving its network in order to sustain the highest subscriber numbers and adapt the latest innovations in broadband technology. We have been gearing up for LTE for a long time; we have the knowledge, the experience and the network infrastructure required to provide a world-class 4GLTE network in the Kingdom of Bahrain,” he states. Additionally, he notes that the WiMax technology that Menatelecom currently utilized is very similar to LTE, giving Menatelecom much experience to draw on as well as a more than sufficient amount of spectrum on which to provide a high quality of service. GFI
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Feature Technology
Time to take another look at Technology?
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nce market darlings, tech stocks have been getting a tepid reception from investors for some time now. We all remember how the Facebook IPO went. So, are there new trends materializing around the globe that could re-ignite the flame for technology? Four equity experts from share their diverse insight on topics such as sustainable IT investing trends, themes for the mobile revolution, and where to find value.
Jens Peers, CIO Sustainable Equities
Mirova, responsible investment division of Natixis Asset Management Population growth, urbanization, and a rising middle class in emerging countries will all reshape the world in the years to come. Jens Peers, CIO of Sustainable Equities, points out that technological evolution will help us to deal with the related challenges – as it has always done in the past. “The speed at which new technologies are introduced is frightening. While the iPad has changed the way we deal with information and communication forever, we sometimes forget that Apple only introduced the tablet just over three years ago,” said Peers. The problem for technology investors can often be that disruptive innovation can quickly turn yesterday’s winners into tomorrow’s losers. Peers thinks the key to success is to focus on areas where growth is supported by strong underlying growth trends and innovation. Mirova’s teams are identifying such factors primarily in three categories: Big Data, Cloud Computing and (Mobile) Electronic Payments.
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The problem for technology investors can often be that disruptive innovation can quickly turn yesterday’s winners into tomorrow’s losers.
Technology Feature
Big Data: With communications and transactions happening electronically more and more, the amount of data available for analysis is growing exponentially. Most of that is unstructured, and the opportunities for analysis to deliver better customer service and targeted marketing are currently virtually untapped. A recent study by Morgan Stanley showed that Big Data spending as a percentage of total IT spending is expected to grow from 24% in 2011 to 28% within 3 years. Today’s leaders in this space, IBM, Oracle and Microsoft, are already changing their product mix, while new entrants like Amazon are knocking on the door. Cloud Computing: The main advantage of cloud computing is that it enables more people to access more data, more applications and more computing power at the same time from different places. It also enables centralization of IT resources, which increases efficiencies and lowers operating costs. In a study by Merrill Lynch, the size of the market was estimated to be almost $120 billion in the 2012–2015 timeframe, which still only represents approximately 12% of total software and related spending. While IT powerhouses like Google are very active in this space, new niche players like salesforce.com and LinkedIn are also emerging. Electronic Payments: The introduction of the smartphone has opened the door for changing consumer behavior. At the same time, the exponential growth of e-commerce is also putting more emphasis on security of electronic payment systems. The opportunities linked to mobile payments are enormous. A recent study by McKinsey showed that more than a billion people in emerging countries have a phone, but no bank account. Telecom operators and companies like Google could become banks’ biggest competitors in emerging markets one day. Companies active in electronic payment security, like Gemalto, Ingenico and PayPal (eBay), may be winners too. From Mirova’s point of view, the key to success in IT investing is to avoid
today’s powerhouses that are vulnerable to disruptive innovation. While some companies, like Google, are actively innovating in the right areas, others will likely use the cash they generate to acquire those companies that pose a
threat to their own business model. “It is most likely that their targets are active in the areas of Big Data, Cloud Computing and (Mobile) Electronic Payments,” said Peers.
Tony Ursillo Global Equity Analyst Loomis, Sayles & Company
It seems that the only constant in the world of technology is that it is constantly changing. “Innovation occurs at such a rapid pace that incumbents can hardly rest on their laurels while startups and emerging companies have the luxury of reinventing themselves or ‘pivoting’ if their initial business plan runs into a roadblock. This makes investing in the world of technology both exciting and challenging,” said Global Equity Analyst Tony Ursillo. Among the compelling areas Loomis Sayles sees for investment are the Mobile Internet and Big Data. For the past few years, Loomis Sayles has been heavily invested around the idea of the Mobile Internet. “Cellular phones have been around for more than a couple of decades. Who can forget the scene of Gordon Gekko’s sunrise call to Bud Fox on a white brick contraption in the 1987 movie Wall Street? But the modern era of the smartphone was ushered in with Apple’s introduction of the iPhone in June of 2007,” said Ursillo. Since then, sales of smartphones have exploded, and along with them, data usage. Ursillo believes the ability to have computing power in your pocket has driven an insatiable thirst for Internet usage, and with it, demand for myriad products and services. “This rapid evolution has left some companies flat-footed for sure, and market share among phone manufacturers has shifted violently in just the past three years,” he said. But with the number of smartphones set to double and speedy 4G networks still in the expansion phase, Loomis Sayles sees multiple fertile opportunities to continue to capitalize on the Mobile Internet. Those include smartphone manufacturers, cellular tower service companies, mobile semiconductor makers, and providers of social and mobile consumer Internet apps. Another large trend that has opened up numerous opportunities for companies, both incumbent and emerging, is the world of Big Data. Ursillo explains that, historically, computer systems at a company captured data that fit neatly into the structured fields of a relational database (think of the item, price, and customer information in a retail sale or the demographic information an advertiser would use to send you junk mail). Big Data goes beyond that, and typically takes two forms. The first are unstructured files – things like photos, videos, and even posts on social networks. Those are much bulkier in nature than age, price, or zip code. The second form is very small in size, but is generated in massive quantities. “An example would be each of the actions a shopper to an online retailer’s site takes as he or she moves through the shopping experience -- including how long it took each page to load,” said Ursillo. Another example would be the collection of signals created by a passenger jet during flight. Regardless of the form, the ability to capture and store Big Data has opened up numerous opportunities for technology companies to provide value through storage, indexing, and analysis of these new data sources. “We see software and hardware companies in particular taking advantage of this trend to offer new enabling technologies that can capitalize on Big Data,” said Ursillo.
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Feature Technology
Bill Nygren
Ng Kong Chiat
Value Equity Manager, Harris Associates
Equity Analyst, Absolute Asia Asset Management
With stock prices above $800 for Google and $400 for Apple, at a quick glance investors may think the technology sector is way overvalued. But valueoriented equity manager Bill Nygren doesn’t see it that way at all. He believes there are still attractive value opportunities in several quality technology names -- especially when compared to valuations of some consumer staples stocks and utilities. “For any of us who were in the business back in the late ’90s it seems ironic that today’s investor pays a large P/E (price-to-earnings) premium to own a utility stock instead of Oracle, Intel, Microsoft, TI or Apple,” said Nygren. He points out that, in early March, the S&P 500® was trading around 14x expected 2013 earnings. Technology accounts for only 18% of the S&P 500® today, and the three largest tech stocks (Apple, Google and Microsoft) were priced at an average of 10x cashadjusted earnings, just 70% of the S&P 500®. To put it into historical perspective, when the S&P 500® peaked at 1,527 on March 24, 2000, investors had fallen in love with technology stocks and they
Just as investors massively overestimated the tailwinds at the turn of the century, investors are overly discounting those headwinds today. accounted for 33% of the S&P 500®. The P/E multiple on the S&P 500® was 28x expected 2000 earnings, and the cash-adjusted earnings of the three largest tech companies (Microsoft, Cisco and Intel) exceeded 100x. That is why Nygren said his portfolios back in 2000 had zero weighting in the tech sector and a heavy weighting in consumer staples. “My, how times have changed,” said Nygren. Just as investors massively overestimated the tailwinds at the turn of the century, Harris Associates believes investors are overly discounting those headwinds today. “Today most tech stocks pay good dividends, repurchase shares, and would go up in price if their P/ Es moved closer to the market P/E,” said Nygren. All of those features are markedly different than things were in 2000 when P/Es were much higher than the market and cash wasn’t returned to shareholders. Overall, Nygren believes tech company businesses may be less attractive today than they were in 2000, but as a value investor, he believes lower stock prices have more than fully reflected that, resulting in the stocks now being much more exciting than the businesses are.
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One investment theme Absolute Asia expects to be following for the next few years is “Smartphones for the Masses,” according to Singapore-based equity analyst Ng Kong Chiat. “We feel the potential opportunity in low-cost smartphones represents one of the most exciting developments in the technology space in the emerging markets,” said Chiat. The iPhone 5 and Galaxy S4, in particular, are high-end smartphones retailing for around US$500 (without a service contract), which is beyond the reach of most consumers in emerging market countries. However, Chiat believes the marketing campaigns for these high-end phones, coupled with improving telecommunication networks and cheaper usage plans, have sparked an enormous desire among the masses for equivalent smartphones, but at lower price points. This in turn is expected to drive global smartphone shipments from 649 million units in 2012 to 1.3 billion in 2016, and market penetration from 34% to 56%, respectively, as smartphone average selling prices fall and their affordability goes up in time. Chiat believes the key country player contributing to global smartphone shipment growth is China, which is expected to overtake the United States as the world’s biggest smartphone market – with a 26.5% market share for 2012 (versus 18.3% in 2011)2 and smartphone shipment volume surging 260% year over year to 215 million units (versus 60 million). “In particular, the low-end smartphones are increasingly popular with the Chinese as they offer similar features as the highend smartphones, apart from their global brand name reach and premium price,” said Chiat. These smartphones are mainly manufactured by Chinese local brands and white-box vendors, the latter so named because their phones are built without registered brand names and are often imitation products. Absolute Asia has systematically identified three segments of the inexpensive smartphone market which could potentially benefit the most from pent-up emerging market demand. Handset manufacturers, which assemble the overall smartphones, and component manufacturers, which supply physical, mostly userinterface-related parts such as speakers, cameras, and display modules – are interesting to Absolute Asia. However, at this time Absolute Asia believes they are not strong investment opportunities. “After our in-depth survey of the market, including visits to China and Taiwan, we discovered that competition among handset manufacturers and most component manufacturers is so fierce that no dominant players have emerged, nor is consolidation forthcoming in the near term. Hence, we do not believe investments are yet warranted in these two segments,” said Chiat. On the other hand, the third area of interest, chipset manufacturers, does offer an attractive opportunity as the space is fairly consolidated. “There are one or two dominant chipset manufacturers which have significant technological and logistical advantages relative to the competition,” said Chiat. As these players are already benefiting from high and climbing volumes, which are keeping prices low while providing attractive margins, Absolute Asia prefers this area of the smartphone theme for investment.
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Feature Tamkeen
Tamkeen’s Investment in the
Private Sector
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amkeen won the Mohammed bin Rashid Award for Young Business Leaders as the “Best Initiative Supporting SMEs in Arab Countries” in 2012. Having substantially changed the business scenario in Bahrain through its various initiatives, it’s no surprise that Tamkeen is becoming more prominent than ever. Tamkeen always seeks to strengthen the partnership with the private sector and provides many efficient and
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integrated solutions through various support programmes that it offers as part of its efforts to invest in enterprises and human capital development. It has persistently worked to develop private sector enterprises, enhance their sustainability, and make them the main driver of the national economy in line with Bahrain’s Economic Vision, for the past six years. Tamkeen designed more than 60 programmes, some already operational
Tamkeen provided low-interest finance at a value of BD1 million to more than 690 enterprises.
Tamkeen Feature
and others in the pipeline, to support the private sector. More than 19,000 enterprises have benefited from these programmes to date. By the end of 2012, the total budget allocated to these programmes amounted to more than BD246 million. They promoted and established new concepts in Bahrain, including the financing of SME’s and micro businesses, the entrenchment of entrepreneurship as a new career path, the empowerment of Bahraini women and the adoption of modern accounting and auditing systems in SME’s.
Facilitating Finance
The Enterprise Finance Scheme was launched in 2007 to address the financing problem that often hinders the growth of SME’s. Business owners are enabled to obtain Sharia-compliant low-cost finance solutions through a number of leading banks in Bahrain. Today, 10 banks are offering these finance solutions, with a total portfolio reaching BD220 million. More than 5,000 enterprises across all sectors and businesses in Bahrain, including more than 1,000 startups and more than 700 micro businesses, have benefited from this programme to date. Tamkeen also introduced the concept of microfinance to the market through two main programmes - the Microfinance Scheme in cooperation with the Family Bank and HRH Princess Sabeeka Bint Ibrahim Al Khalifa portfolio for women entrepreneurs. Through the first programme Tamkeen provided lowinterest finance at a value of BD1 million to more than 690 enterprises. Through the second programme, it financed more than 390 projects for Bahraini women through low-interest loans totaling BD1 million.
Providing Support Services to Develop Enterprises
The Enterprise Development Support (EDS) programme includes several schemes aimed at providing integrated support services that help enterprises improve their performance and efficiency and enable them to achieve sustainability. These include support for buying new equipment, assisting
in strategic planning, development of marketing plans, participation in local and international fairs, and implementation of international quality management systems. More than 4,600 enterprises have benefited from these programmes to date, including 2,000 in 2012 alone. Tamkeen covers 80% of the costs related to each of these programmes, up to BD15,000 for small enterprises and BD20,000 for medium and large enterprises. The Large Enterprises Support Scheme offers support for large enterprises with an annual revenue that exceeds BD 5 million. Through this programme, Tamkeen provides the necessary support for large national companies to help
Tamkeen designed more than 60 programmes, some already operational and others in the pipeline, to support the private sector. them acquire state of the art industrial equipment and technologies, expand and diversify their operations, and achieve sustainability. Tamkeen contributes 50% of the cost of equipment purchases, up to BD150,000.
Supporting Entrepreneurship
The “Startups Support Programme”, from which 160 startups are expected to benefit, is designed to support entrepreneurs wishing to start their own businesses. The programme includes various schemes that offer integrated solutions to the challenges that most enterprises face during the initial stages. These include provision of pre-seed capital, financial aid to support feasibility studies, business incubators, and other
facilities. Tamkeen also organises events and workshops to network entrepreneurs. More than 1,800 entrepreneurs have so far benefited from these events.
Developing Farming and Fishery
Tamkeen turned special attention to supporting Bahrain’s farming and fishery sector, allocating BD4.4 million to support 1,100 fishermen and BD5.93 million to support 600 farmers. The programme enables farmers and fishermen to buy advanced technologies and use modern farming and fishing techniques. To date, 900 fishermen and 500 farmers have benefited from the programme.
Applying the Best Financial and Accounting Practices
Tamkeen’s Mohasaba Scheme offers comprehensive solutions to analyse the financial position and performance of enterprises and the situation of their cash flows. It also enhances their financial statement systems and financial documentation, which makes it easier for them to obtain bank loans. To date, more than 400 SME’s have benefited from Mohasaba Scheme, under which Tamkeen pays BD1,250 out of 1,500 for auditing services for two years and BD2,750 out of BD3,000 for accounting services for two years. The rest of the amount is covered by the beneficiary. Under the programme, Tamkeen also provides a BD300 grant to buy an advanced accounting computer programme.
Moving Forward
Tamkeen plans to launch a number of other initiatives in 2013 to serve enterprises. More than 4,200 enterprises are expected to benefit from these new initiatives, to which Tamkeen allocated around BD43.5 million. This reflects Tamkeen’s commitment to continue supporting entrepreneurship and private sector enterprises and to efficiently contribute to making the private sector the key driver of the national economy and achieve prosperity for the entire Bahraini society. GFI Gulf Insider May 2013
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Bahrain Real Estate
Bahrain Marketview 2013 Bahrain Real Estate Sector continues to wait for upward stimulus.
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he ongoing political stalemate which is still evident in the Kingdom is making it difficult for the economy to move to the next phase of recovery from the global and regional economic downturn. Whilst it is clear that the real estate sector has ‘bottomed out’ in terms of rental rates and sale prices, it is also clear that huge pent-up demand is waiting to cash in on the Bahrain upturn – when it happens. It is unclear when this will take place, but talks between the various opposing parties in Bahrain’s political landscape are key to this topic and there is little indication that agreement or even meaningful discussions will take place in the short term. In the meantime, the ratings agencies Standard & Poor’s and Fitch remain reasonably sanguine about Bahrain, both currently allocating BBB ‘Stable’ sovereign ratings. The Kingdom has
also received firm political and financial support from its GCC neighbours including the provision of a $10 billion ‘Marshall Plan’ financing initiative. The Government of Bahrain has started using this money to address a wide variety of infrastructure issues including roads, schools, hospitals, social and affordable housing and it is rumoured, possibly some of the stalled real estate projects. Even with the financial resources available, meeting the needs of the enormous waiting list that Bahrain currently has for government housing would appear to be insurmountable in the short term. The government had set a five year deadline to clear the waiting list but has recently admitted that this is unlikely to be achieved. It is now unclear as to precisely what will be achieved during this timeframe, but significant resources have been committed to this initiative and the Kingdom hopes to see
The total value of real estate transactions in Bahrain grew by 46% in 2012 compared to 2011.
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its efforts bear at least some fruit over the next few years. When combining the government’s own expenditure with the financial package offered by its supportive GCC neighbours, GDP forecasts for Bahrain in 2013 indicate growth of around 4% according to the Central Bank of Bahrain. The total value of real estate transactions in Bahrain grew by 46% in 2012 compared to 2011. The biggest increase came from Bahrainis and nonGCC expatriates although the increase by expatriates was more down to the delayed registration of purchases they had made in previous years than new purchases.
Office Market
The office market in Bahrain continues to remain stable. Few movements have taken place in or out of the market and consolidation activities have virtually
Real Estate Bahrain
ceased. Rental rates are sitting at their effective bottom rate and those waiting for further falls are likely to be disappointed. Landlords have now reached their lowest rental rates and will not go any further than the point that they have already reached, even if this means their buildings will remain empty in the short term. When the market starts to turn it is likely to experience a period of ‘soft growth’ as some slack in the system is taken up, but once we get through this, the lack of development over the last couple of years will mean that those entering the market looking for new space are going to be frustrated by lack of supply. The result at this point is likely to be sharp rental rate growth, but for now, this remains some way off. In the investment sector, the last few years have been characterised by a significant mismatch between the expectations of buyers and sellers. Buyers have been seeking quality commercial properties yielding between 10% and 12%, in the hope of picking up ‘distressed’ assets in this category. Sadly, none of the potential commercial property sellers in the market have been distressed enough to find this an attractive proposition and sales have simply failed to materialise. Sellers have generally considered 7% to 8% to be an acceptable yield which means that buyers and sellers have been at
least 20% apart in their valuations. Nevertheless, we are starting to see the emergence of buyers who are more realistic in their expectations as the sheer pressure of liquidity has forced them to adopt a more realistic outlook. We now have a small number of buyers seeking quality assets at 8% and negotiations are in progress. It seems that those seeking 10% yields or more will be forever disappointed.
Hospitality Sector
A number of press reports indicated significant increases in occupancy rates for hotels in the Kingdom compared to 2012. For January 2013, STR Global reported that occupancy in Manama had risen by 40% compared to January 2012, the highest rate of increase in the Middle East and Africa region. Unfortunately, this increase was on the back of exceptionally low rates in 2012, and occupancy was still only 56.6% in January, a rate well below Bahrain’s regional neighbours. Nevertheless, this does indicate an encouraging trend in the hospitality sector’s core markets which have historically been midweek business guests and weekend stays by Saudi and Kuwaiti leisure visitors. The main retail destination, Seef District, has for many years exhibited success and failure simultaneously and was widely considered to be over-
malled until the introduction of City Centre, which simply cannibalised the existing market. Due largely to the social unrest that took place in Bahrain during 2011, footfall levels across all the major malls in Bahrain fell significantly, worsening the plight of some of the already underperforming malls. However, levels of visitation have continued to pick up through 2012 and the first quarter of 2013. City Centre continues to dominate the market due largely to its scale which marks its status as Bahrain’s premier ‘destination mall’, at least double the size of its nearest competitor, Seef Mall. However, Seef Mall has made huge strides in recovering from the shock of City Centre’s market entry by repositioning itself to meet the needs of its core market - families. The mall has worked hard to create a childfriendly environment with the result that occupancy and rental rates have both strengthened significantly from a fairly weak position in 2011.
Residential Market
The residential leasing sector in most areas has now stabilised in terms of their occupancy and rate. The main expatriate areas of Amwaj Islands, Saar, Hamala and central Manama have shown little
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Kingdom has also received firm political and financial support from its GCC neighbours including the provision of a $10 billion ‘Marshall Plan’ financing initiative.
movement in the first quarter although there has been some pick-up on Reef Island as relatively new properties in this location are proving very popular with the rental market due to its excellent location on the waterfront and its proximity to the Kingdom’s major employment districts, retail malls and five star hotels. Effectively, with the exception of a few selected projects, residential rental rates have hit their lowest point and have been stable at these levels for several consecutive quarters. Anyone wishing to upgrade, relocate or pick up a bargain would be best advised to start this process in the very short term because it seems unlikely that there will be any further downward movement in the market. Reef Island has proved particularly
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appealing to new residents to Bahrain and many of the residents of Amwaj who enjoy the lifestyle and waterfront setting of Amwaj, but are frustrated by the relative remoteness of the islands from the main commercial districts, malls and employment. We have seen reasonably significant movement from Amwaj to new properties on Reef Island in the past 6 months. Durrat Al Bahrain continues to act as a very popular second home (weekend) destination, while the strongest project in terms of sales rates continues to be Riffa Views where mortgage lenders are reporting another 10% growth in sales prices over the past six months. Riffa Views unit prices have now risen by around 20% compared to 2011 and this has been driven largely by Bahraini
families attracted to the relative peace and tranquillity of the location and the private roads within the project which make it a safe environment for families. However, it is interesting to note that most sales transactions have been for the smaller 3 and 4 bedroom units with very little demand for the substantially larger 5 bed and larger units. This would appear to indicate that transactions are very much focused on actual owner-occupiers rather than investor/ speculators. For Bahrainis, the preferred method of securing housing is to build out their own plots. Government assistance is offered in a number of ways to achieve this but we have noticed residential land plot prices creeping slowly upwards again across the Kingdom. This has been
Real Estate Bahrain
Effectively, with the exception of a few selected projects, residential rental rates have hit their lowest point and have been stable at these levels for several consecutive quarters.
noticed in a range of areas including premium locations such as Amwaj Islands, but also lesser areas such as Juffair and Hidd. The same trend has not been continued in the main commercial areas, again indicating a return to the real estate market by individuals, smaller investors and those seeking to actually build their own homes rather than the big corporate and institutional players who have had their fingers badly burnt by their overexuberant behaviour between 2006 and 2008. Many of the Kingdom’s funds and financial institutions were drawn into the land speculation or development game in Bahrain at that time, largely driven by high levels of liquidity and encouraged by valuations prepared
by local real estate agents based on speculative trading prices rather than development value. Many of the plots bought in the main commercial districts were simply undevelopable at the prices they were bought for, but local agents, who were actually themselves in the land trading business, supported this frenzy of activity by providing ever higher ‘valuations’ to seemingly desperate institutional buyers. There are moves to prevent this from happening again through the introduction of legislation to ensure that large scale valuations of commercial land bought by players in the financial sector are based on RICS ‘Red Book’ standards or their equivalent. This approach would effectively base land values on the actual development
potential of plots based on zoning and the current and future demand and rental rate environment rather than the apparent ‘pyramid selling scheme’ approach employed in recent years. Anecdotally, we understand that land formerly traded in Seef District at around BD280 per square foot now remains unsold at prices of around BD100 per square foot, with fairly devastating consequences for leveraged funds and institutions that are servicing debts on non-performing assets. The implications for returning land price speculation in the residential sector are serious for the Bahraini residential sector. The government continues to struggle with the needs of the low to middle income population whose ambitions to one day buy their own plot and build on it are diminishing by the day. Developers’ attempts to satisfy this group continue to be largely thwarted by the growth in land prices and the situation may ultimately only be resolved by Government intervention. GFI
This report was prepared by the CBRE EMEA Research Team which forms part of CBRE Global Research and Consulting – a network of preeminent researchers and consultants who collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate investors and occupiers around the globe. For more information about this MarketView, contact mike.williams@cbre.com Gulf Insider May 2013
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Bahrain Property Market
Positive outlook for Bahrain economy as political stability improves Cluttons Q1 2013 market report for Bahrain.
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ational uncertainty clearly has taken a toll on the Kingdom’s marketplace, but Bahrain is now entering a period of relative calm and the Bahrain Central Bank has made a positive growth projection of 4% in 2013. The planned US$1 billion GCC aid will also contribute towards the nation’s social and infrastructure development program. During Q2 and Q3 2013, the residential
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lettings market is expected to experience a surge in supply, as several major residential developments will be brought to market, including the government’s housing program. It is estimated that over 6,000 government-built homes will be completed by the end of Q3 2013, helping to relieve some of the pressure off the waiting list which, according to Cluttons’ research, has received almost 54,000 requests.
Despite perceptions that the sharp upturn in residential supply may place downward pressure on prevailing rents, analysis suggests that rents will remain stable. This is due to there being sufficient domestic demand to absorb the new residential units, coming predominantly from the US Navy, which continues to relocate personnel to the island. Tenant demands are centered on the quality of finishing, with a preference
Property Market Bahrain
The residential sales sector is seeing a spike in foreign investment from the GCC, which perceives the market to have ‘bottomed out.’ for furnished properties and with modern amenities topping the wish lists. There is a heightened level of interest in Amwaj Islands, with Zawia 3, the Address Villas and Amwaj Waves all expected to be completed towards the end of the year. The residential sales sector is seeing a spike in foreign investment from the GCC, which perceives the market to have ‘bottomed out.’ This renewed interest in investing in property in Bahrain has created a window of opportunity for some landlords to exit investments made at the peak of the market, with manageable losses. Following a low level of activity in Q4 2012 in the commercial sector, 2013 has got off to a significantly better start, with an increase in occupier enquiries, predominantly from companies expanding and requiring new space, rather than new entrants to the market. In 2012, a combination of improved economic outlook, coupled with a slowdown in the number of new occupiers in the market helped minimise rental increases, whilst fostering an environment for the expansion of existing businesses. Landlords remain under pressure to remain flexible on the lengths of rent-free and fit-out periods given the oversupply in the office market, therefore Cluttons is not anticipating any significant upturn in office rental rates in the medium to longterm. The Economic Development Board of Bahrain (EDB) is in talks with neighbouring Saudi Arabia, in an effort to foster increasing cross border investment, while creating opportunities for Bahrain-based firms to diversify its revenue streams. However, post Arab Spring, the UAE and Qatar continue to attract
the lion’s share of new companies entering the region. A stabilisation in national tensions is likely to translate into a slow, but steady upturn in the number of GCC tourist arrivals, which will help lift demand for retail space over the course of the year. Bahrain City Centre remains the primary hub of retail activity, but with limited vacancy, retailers are turning their attention to smaller retail malls. Seef Corner, opposite Bahrain City Centre, which is let by Cluttons, has benefitted tremendously from over-spill from the City Centre; 75% of the available retail units were let within two months of coming to market. Due to the limited number of vacant prime retail units in Bahrain City Centre, there has been a rise in asking rental rates in surrounding submarkets, which are now hovering around the BD12 per sq m mark, a level not recorded outside Bahrain City Centre for over two years. The industrial market has seen a slight upturn in performance, although this is underpinned by a lack of stock, rather than an increase in requirements. The low supply levels are translating into increased landlord negotiations, as they are aware of market conditions and are trying to maximise potential returns. Despite this, rents are expected to remain stable between BD 2 and BD 3.5 per sq m this year; a figure that remains unchanged from the second half of 2012. The Bahrain International Investment Park is still the most desirable location for industrial space and, according to a survey published by the Financial Times, is currently the top location for foreign direct investment in Bahrain and one of the top 15 FDI magnets across the GCC. GFI
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Abu Dhabi Property Development
Al Gharbia’s GDP projected to reach More than AED500 Billion in 2030 Abu Dhabi’s Western Region to become the UAE’s next development hotspot in five years.
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bu Dhabi’s Western Region is poised to become the UAE’s next development hotspot, with economic output expected to reach more than AED500 billion in 2030 according to the Al Gharbia Investment Roadmap. The projected rise in the region’s GDP, up from just AED243 billion in 2010, will largely be driven by an estimated AED240 billion worth of projects invested in key economic sectors such Oil & Gas (AED120 billion), Power Generation (AED62 billion), Infrastructure and Transportation (AED54 billion) and Tourism (AED4 billion). In the next five years, Al Gharbia will 50
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witness the completion of the initial stages of a number of multi-billion dollar projects, such as the Madinat Zayed residential developments, a complex that will feature over 100 apartments, retail shops, a health club, a mosque and offices; the Ruwais Refinery Expansion, owned by Takreer, which when finished in the first quarter of 2014, will produce a total of 832,000 barrels per day of oil. Another significant development is the ADNOC-funded Etihad Rail, which will cover a network of up to 1,200km connecting the UAE to Saudi Arabia via Ghweifat in the west and Oman via Al Ain in the east, is expected to be completed its initial phase this year, and
In the Western Region, a comprehensive plan has been formulated and encapsulated in the framework called Al Gharbia 2030.
will connect the village of Shah (in Liwa oasis) to Ruwais. As a strategic guide for all the development initiatives in the Western Region, a comprehensive plan has been formulated and encapsulated in the framework called Al Gharbia 2030. To date, Al Gharbia’s regional economy has been dominated by the oil and gas industries, with construction and manufacturing also driven by the energy sector. Although it is acknowledged that this will remain the case, the government hopes that other industries will play a larger part in the economy in the future. GFI
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Global Real Estate
Investing in International Luxury Real Estate? Knight Frank Global Development Review 2013 reveals valuable insights into the international luxury real estate market.
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hile property markets around the world struggle to break free of the ever-present shadow of economic doom and gloom, prime markets globally have bounced back with apparent ease. As investors seek to take advantage of this, the luxury development sector has been enjoying a return to fortune. Development activity is a good measure of how global property markets are performing: during the pre-financial crisis years the number of new starts and completions around the world flourished as prices remained firmly on an upward trajectory. Fast-forward to 2008 and 2009 and development volumes crashed as demand for luxury property collapsed. We are now starting to see confidence return and, while activity in a number of areas remains subdued compared to pre-crisis levels, it is clear that the process of recovery has begun. This is particularly evident when we look at property prices in prime cities worldwide. Knight Frank’s Prime Global Cities Index now stands 20.4% above its financial crisis low in Q2 2009 and continues to outperform its
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Real Estate Global
mainstream counterpart, which has recorded growth of 10.2% over the same time. As global economic uncertainty underpins the market and prime cities enjoy their tag as ‘safe havens’ where the world’s wealthy can invest their money, this outperformance looks set to continue as the flow of international wealth and the attitudes of HNWIs become increasingly influential on prime property performance worldwide. However, while we expect the flow of wealth into residential property to increase, buyers’ expectations have also risen. Developers are increasingly bringing more high-specification ‘trophy’ buildings to market. The importance of partnering with a renowned architect and designer, a good location and the appeal of serviced apartments should not be overlooked. This ‘flight to quality’ is evident in nearly all prime markets as buyers recognise the importance of getting the best properties in the best locations whether that’s beachfront in Miami, in the Carre d’Or region of Monaco, or in one of London’s most desirable postcodes.
Political Influence
Now more than ever government policy is having a profound and direct impact on prime markets globally. Whether we consider the impact of protectionist measures in Asia designed to cool property markets or wealth taxes across Europe introduced as governments seek to control growing deficits, politicians are directly involved in shaping the direction of global development activity. In Paris, sales activity was muted as buyers of all nationalities adopted a “wait and see” attitude while vendors remain unwilling to reduce prices until there is greater clarity from President Hollande and the Eurozone leaders in relation to the debt crisis. Asia’s prime markets look to be entering a period of more moderate growth due in part to the regulatory measures aimed at cooling prices and improving domestic affordability. Cities such as Dubai, Miami, Nairobi and London are increasingly considered investment hubs for HNWIs in their wider regions. In the wake of the Arab Spring, Dubai has been seen as a safe location for MENA
Case study: Dubai
Between 2008 and 2010 the market remained quiet, with signs of revival only beginning to emerge in 2011. Over the past two years, prices for prime residential real estate have started to recover and several new projects have been launched. There is noticeable demand for prime real estate in Dubai and the level of transactions increased through 2012. Further evidence of this appetite for homes at the top end of the market is demonstrated by the prices of villas in prime locations, which rose by nearly 20% in 2012. Prices of apartments also gradually rose last year, albeit to a lesser degree. The bulk of development to date has been concentrated in the low to middle market and increasingly it is becoming apparent that standards are rising and better quality projects are needed. Coastal developments such as Dubai Marina and Palm Jumeirah have always been popular. Downtown Dubai and the business district is now more established and drawing the attention of international buyers, and villa communities for end-users. Dubai is already very cosmopolitan and the largest segments of buyers at present are Indians and Pakistanis, followed by Saudi Arabians and other GCC nationals. Russians, Europeans and other Western nationalities also continue to invest and reside in the UAE . What’s interesting, however, is that developers have started to expand beyond the traditional markets and are targeting buyers from Africa and Asia. Geographically the UAE is a strategic location between East and West and a developing hub for international business. The market offers a good climate, favourable tax structure and in the wake of the Arab Spring is viewed as a safe haven for wealth, making it attractive for investors and second-home owners.
The Wealth Report 2013 shows that the number of individuals with US$30m or more in assets rose by 5% last year and will have increased by 50% by 2022. buyers, while Venezuelan and Brazilian investors have turned to Miami to limit their exposure to political and economic instability.
Wealth Flows
The rise in the number of high net worth and ultra-high net worth individuals over the last few years has been a central driver of prime residential markets globally. Data contained in The Wealth Report 2013 shows that the number of individuals with US$30m or more in assets rose by 5% last year and will have increased by
50% by 2022. This growing wealth has, in turn, aided the performance of prime residential property markets with a flight of capital to perceived ‘safe haven’ locations from the world’s super-rich. International demand in cities such as London, Paris, New York and Geneva has certainly reflected this. Globally, uncertainty remains a real issue, but there are a number of opportunities for high-end residential property developers around the world. The increasing influence and financial clout of emerging world investors, the flow of wealth to ‘safe haven’ locations
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As global economic uncertainty underpins the market and prime cities enjoy their tag as ‘safe havens’ where the world’s wealthy can invest their money. and new starts and completions data indicating an increase in activity are combining to place the sector on the road to recovery.
Global development Sentiment survey
With few signs of an immediate solution to the Eurozone crisis, economic uncertainty continues to underpin and inform the views of luxury developers around the world, Knight Frank’s annual Global Development Review provides an insight into the market for luxury residential development around the world, and the trends that shape it. Over the past decade housebuilders and developers in most key global markets enjoyed a pre-credit crunch boom characterised by rising development volumes, high demand and consistent price growth. This was followed by a slump which saw sales grind to a halt and development volumes decline globally. Since 2009, the global prime development market has taken steps to regain the ground that it lost as a result of the financial crisis. As economic activity has improved in many of markets so too have development volumes and interest from buyers, although these still remain below pre-crisis levels. The ongoing Eurozone crisis has, however, created its own problems not least in its furthering the creation of a global two-tier market as foreign investors look to invest their capital in ‘quality’ destinations like London, Miami, Paris and New York. Stock levels for mass market developments in Europe have risen as a result of the financial crisis
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as core buyers were priced out of the market. In response to this, developers have shifted their focus to the top end of the market, where supply has been more limited. As an indication that confidence is returning to the market, the volume of new buyer enquiries in 2012 grew in all of the regions surveyed, as did the cumulative supply and price of completed units on a global level. Perhaps unsurprisingly, given the wealth present in the region and continued economic growth, the
biggest increase in completed units came in Asia-Pacific. Interest in new developments is expected to continue, with enquires and sales forecast to be significantly higher on a global basis in 2013 compared to 2012. While the availability of funding for development remains a critical issue across all surveyed regions, it has weighed more heavily on developers in Europe where the ongoing Eurozone crisis has made banks more reticent about lending. As a result, average unit
Real Estate Global
As an indication that confidence is returning to the market, the volume of new buyer enquiries in 2012 grew in all of the regions surveyed.
prices across Europe fell in 2012, the only region in which this happened. Similarly, in the Middle East and Africa bank lending has proved difficult to come by. In Dubai the market continues to be impacted by historic oversupply, while a lack of confidence following delays in delivery and cancellations has made lenders – as well as buyers – wary. However, this has not precluded the beginnings of a recovery in sales activity. In 2012, the proportion of units typically sold off-plan for prime new build developments ahead
of completion hit 41% in Asia Pacific, 37% in the US and 32% in Europe.
Luxury Home Demand
Following several years of chaotic financial markets many HNWIs believe they ought to invest a greater share of their wealth portfolio in tangible assets, including residential property. While news emanating from some of the world’s largest and most important economies fails to inspire confidence,
it is important to assess the long-term performance of prime property around the world which managed to recover from the 2008-09 downturn, and record impressive growth in the interim. Serviced apartments in particular have performed well in this time. Knight Frank’s Branded Developments report found developers can increase profits by building ‘branded homes’ which provide hotel-like services such as concierge, security and room service courtesy of a luxury brand. It gives further weight to the idea that prime property in the world’s global cities has been tagged a ‘safe haven’ investment by investors for the past three years, with cities such as London and Hong Kong seemingly impervious to the backdrop of sovereign debt concerns and geopolitical uncertainty. Sentiment does continue to improve on a global basis and our survey suggests that the North America and Middle East and Africa markets are the most positive when it comes to anticipating sales and new buyer enquiries in the coming 12 months. The last ten years have seen the emergence and delivery of residential ‘trophy’ projects; these can be defined as developments located in established international locations where international buyers dominate, and where the development represents high standards in respect of architecture, design, amenities and service. Even within this limited global selection there are a number of projects that redefine the development market, both within that location, and also on an international level. We see a growing trend also for developers focusing on producing very individual buildings where the inherent design qualities of that building or project are really what defines it; the highest service standards and amenities are almost a given. Over recent years such projects would include One Hyde Park, One 57 and 432 Park Avenue in New York, the Yintai Building in Beijing and the Burj Khalifa. GFI
To download the full Knight Frank Global Development Review 2013 visit www.knightfrank.com
Gulf Insider May 2013
55
Feature FATCA
US citizens to pay
Taxes on their Taxfree Income
J
ohn (assumed name), a US national has been a resident of Bahrain for the last 10 years and earns US$ 500,000 per annum. Bahrain does not impose tax on personal income and hence it is assumed that this person has the full income earned for his disposal. However, this person is expected to pay taxes on his Bahrain income! US persons are expected to pay tax on global income irrespective of their place of residence. He is also expected to file Form 8398 and FBAR based report (Report of Foreign Bank and Financial Accounts) disclosing his specified foreign assets as part of his annual tax returns. In addition to the above, starting 1 January 2014, financial institutions are expected to identify and report on US persons including account balance, gross income earned and the tax identification number (TIN) for each of the person identified as US person. Welcome to the world of FATCA. FATCA stands for Foreign Account Tax 56
Gulf Insider May 2013
Compliance Act and was framed to address instances of tax evasion by US persons who invest money aboard through accounts maintained outside the territory of the United States (offshore accounts). FATCA was included in the Hiring Incentive for Restoration of Employment (HIRE) Act and was approved by the Congress on 18 March 2010. The Internal Revenue Service (IRS) has been assigned the responsibility for framing regulations and implementing FATCA. Keeping in mind the complexity in implementing FATCA across the world, IRS has prepared a phased implementation plan for FATCA. FATCA is expected to be administered through the financial services sector across the world. Under FATCA, the term “financial institution” is broadly defined to cover banks, investment companies, life insurance companies, asset managers, private equity firms etc. All Financial institutions that operate
outside the territory of the USA is referred to as a Foreign Financial Institution (FFI). FFIs are given an option to participate in FATCA. Financial institutions that agree to participate in the programme are required to identify US persons who hold accounts with the institution and report specified information about US persons to US tax authorities. FATCA specifies “Indicia” or indicators that will be used to identify a US person. They include: 1. US Passport 2. Green Card Status 3. Born in the USA 4. Address or c/o address is a US address 5. Registered power of attorney in favour of a US person 6. Standing instruction to transfer funds to a US account 7. US telephone number captured as a contact number
FATCA Feature
An entity that is not a financial institution is identified as Non Financial Foreign Enterprises (NFFE). Entities are identified as US persons if: 1. Registered in the USA 2. 10% or more of the ownership rights or shares are held by US person. In such instances, the entity will have to identify the ultimate beneficial owners (UBO) who are US persons with 10% or more ownership in the entity Any person identified having US Indicia are required to confirm their US status by providing Form W 9 or negate their US status by providing Form W 8 BEN. In case an account holder fails to provide required information to the financial institution, they will be identified as “recalcitrant” and a withholding of 30% will be applied on US source income and certain payments due to the account holder. Similarly, a withholding of 30% will be applied to payment of US source income and certain payments due to financial institutions identified as Non Participating Financial Institution (NPFFI). Disclosure of customer information, applying withholding is expected to have significant legal challenges in most of the jurisdictions across the world. Keeping the legal challenges in implementing FATCA, US Government has identified an alternative option of implementing FATCA through Inter Governmental Agreements (IGA). The US authorities have published two models for IGA – Model 1 and Model 2. The IGA option for implementing FATCA is becoming very popular as over 60 countries across the world are in discussion with the US government for implementing IGA. IGAs provide for changing the local laws in each of the IGA jurisdiction to allow for customer information reporting. In return, IGA provides benefits of not applying withholding on payments within IGA jurisdictions and removing the requirements for closing accounts of recalcitrant account holders and NPFFIs. Withholding will be initially applied on US Source Fixed, Determinable, Periodic and Annual (FDAP) income from 1st January 2014 and will be extended to gross proceeds from the
disposal of US securities or properties leading to interest based income from 1 January 2017. This means from 2017, in some instances the capital invested by persons who do not disclose their US status and NPFFIs will be subject to withholding. Starting 1 January 2017, there is a proposal to implement “foreign pass thru” based withholding. Foreign Pass Thru rules require FFIs and US financial institutions to calculate a ratio of US assets to total assets on a quarterly basis. This ratio is assumed to be the US income generated by the institution and any income distributed by the institution is assumed to be US income to the extent of Foreign Pass Thru percentage. For example: A bank in Bahrain has 20% of its assets as US assets. Therefore
US persons are expected to pay tax on global income irrespective of their place of residence and hence John is expected to calculate tax on his Bahrain income. 20% of any interest distributed by the bank on savings account is assumed to be US source income and this part of the income is subject to withholding. This means, even indirect income from US assets through non US institutions is also subject to withholding under FATCA. Implementing FATCA would require significant investment to make changes to the processes and systems at the financial institutions across the world. It is important for financial institutions to consider FATCA as a strategic project requiring involvement across the organisation and created a phased implementation programme to “minimise the cost and effort” of implementing FATCA. The financial institutions that participate in FATCA are expected to
focus on registration with IRS to obtain Global Intermediary Identification Number (GIIN) and implement changes to policies, processes, procedures, contracts & forms, systems and capture additional data about customers in 2013. As FATCA applies to existing customers also, institutions are expected to review their existing customers for US Indica starting 2013 and complete the task by 2015. Reporting under FATCA is expected to start in 2015 with the first report being submitted by Financial Institutions by 31 March 2015. It would be important for most of the countries to consider IGA arrangement for implementing FATCA. IGAs provide significant protection from legal challenges while implementing FATCA. IGAs also reduce the implementation related costs for FATCA. FATCA provides exceptions to foreign governments, central banks, multi lateral institutions etc. as except beneficial owners. Similarly, it also provides options for deemed compliant status where the compliance requirements are less than participating FFIs. FATCA also increases the reporting responsibilities of US persons both individuals and entities as part of their annual tax reporting process. FATCA has also lead to discussions across the key economies of the world to implement similar legislations to identify taxable income of their nationals which are invested abroad. FATCA could be first among many international initiatives to curb tax evasion. Financial institutions are central to such initiatives and are expected to be further loaded with compliance tasks, making their operations more complex and expensive. People will find it difficult to operate offshore accounts and FATCA could make major macro economic impact like flight of US capital back to the USA and international investors reducing their exposure to the US markets. One thing is for sure, tax compliance and reporting will change forever with FATCA. GFI
This article is written by Ranjith Kumar, FATCA services leader at Keypoint. E-mail: ranjith.kumar@keypoint.me
Gulf Insider May 2013
57
Feature Tribute
Margaret Thatcher
A tribute
Paul Johnson contrasts Ronald Regan with Margaret Thatcher, both of whom he knew, and explains why they were true heroes.
W
hat is a hero? Homer, the poet of ancient Greece, defined it as “a name given to men of superhuman strength, courage or ability, favoured by the gods”. Alexander the Great and Julius Caesar come to mind, carving out vast empires for themselves and hammering their names into the history of the earth. They were giant-like, almost superhuman in every respect. Each was brave and highly intelligent, but also selfish, cruel and without scruple. Alexander, the first man to aim, realistically, at world rule, at any cost, was a mass murderer, and Caesar was no better. A man of colossal energy and cunning, he became the inspiration for tyrants for two millennia. But bringing down a tyranny is what makes modern-day heroes of Thatcher and Reagan. Between them, they won the Cold War, dismantled the Soviet empire and eliminated Communism as a malevolent world force. They worked in unofficial concert. Thatcher reinvigorated the capitalist system, and Reagan gave back to the United
She was divisive. You either admired her enormously or detested her. States the self-confidence it had lost, and at the same time tested Soviet power to destruction. They were heroes in their own unique ways. Reagan endeared himself to me the first time we met by getting flustered, glancing at the cue card he always kept in his left-hand suit pocket, before saying: “Good to see you again, Paul.” But he never gave the impression of being nervous, or gloomy, or worried. He was thoroughly and fundamentally at ease with himself, more so than any other person I came across in public life. By that I do not mean casual or flippant or devil-maycare: he was none of those things. But he was relaxed, unharassed, and quietly confident in anything he had to do. 58
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Tribute Feature
And, being like that, you did not have to dig very deep to find happiness. He liked, and tried, to communicate this happiness, and normally succeeded. He made me think that happiness ought to be part of the equipment of a hero, even though it usually isn’t. The United States he took over in 1981 was not at ease with itself. Indeed, it was deeply unhappy at a public level. His predecessors, Gerry Ford and Jimmy Carter, found it impossible to strike the right national note. Sixty years of writing history and observing contemporary history makers in action have convinced me that successful government depends less on intelligence and knowledge than on simplicity - the ability to narrow aims to three or four important tasks which are possible, reasonable and communicable. Reagan had that formula, and it enabled him to be a true hero. He had core beliefs in which he passionately believed and which had a bearing on all he aspired to do. They were essentially to do with justice, honesty, fair dealing, courage and what he would call “decency”. They translated into standing up to the Soviets, cutting taxes and freeing Americans from unnecessary burdens. There was no shifting him on these matters. He clung to his core views with extraordinary obstinacy. They were, by and large, right, and he could communicate them with extraordinary skill. His presidency was a huge success, though he had few, if any, of the qualities which most constitutional experts would have rated indispensable. Indeed, in some ways he was ill-equipped to run anything, let alone the mightiest nation on earth. He was superficially, and also profoundly, ignorant. He did not seem to know how bills were passed through Congress, or how the budget was done. He had little education, and no desire to acquire much more. He was intellectually lazy. On the eve of the world economic summit in 1983, he did not read one word of the carefully prepared briefing book, and when he was upbraided by his chief of staff, James Baker, he said
calmly: “Well, Jim, The Sound Of Music was on last night.” He puzzled his staff. Sometimes he displayed extraordinary scraps of knowledge about obscure events. Other times he believed in fantasies, such as that the U.S. had larger hidden oil reserves than the whole of the Middle East. He was nearly 70 when he got to the White House. He was deaf and sometimes could not hear what his staff were telling him, even with the volume of his hearing aid switched right up. When tired, as he often was, especially after lunch, he got things wrong. He confused names and faces. He once thought his own secretary of commerce was a visiting mayor.
She did not much mind being hated, she took it as part of the business of governing, But if he got the details wrong, he always got the mood right. It was rare for a visitor to the White House to go away unhappy, even if he got nothing that he wanted. Reagan was perhaps the most accomplished of all presidential performers, deliberately drawing on his theatrical skills. He said frankly: “There have been times when I’ve wondered how you could do the job if you hadn’t been an actor.” He had two endearing characteristics which were important to his heroic status. First, he was genuinely modest. He had come from nowhere and had pride in the things he had done, but he never tried to be bigger than he was or know more than he did. But, and this was the second of his heroic characteristics, he communicated with ease with the people, doing so, like Abraham Lincoln, by a kind of cunning simplicity. Of course he did not have a powerful
analytical mind like Lincoln’s, and he would never have been capable of the sublime rhetoric of the Gettysburg Address. For the grand occasion, Reagan had to have his lines written for him. Yet just occasionally he had the Lincoln touch. “The big decisions are simple,” he said. “That doesn’t mean they’re easy.” Reagan used jokes as a substitute for logic and intelligence, part of his strategy for sidestepping arguments requiring exact information. He had a stock of about 2,000 one-liners that could be made to fit virtually any situation. No Politician ever told stories better. Lincoln’s were shrewder and more original, but Reagan’s were just as effective, perhaps more so because the tone and timing were more professional. He could get a laugh out of nothing. He did not mind abuse. That was just the critics having their say, the reviews, as it were. What really counted was the box office, expressed in terms of votes and public approval or disapproval of his actions. The Reagan presidency was a hit. It ran the full eight years with growing success, and continued to resonate afterward, as an exemplar of what a presidency should be in an ideal world. MargaretThatcher worked very closely with Reagan. They saw eye to eye on all the big international issues, and each tried to run the same kind of government at home. She, like him, believed in three or four big things very strongly and backed them up with unlimited willpower. Yet they were very different people, and made quite different heroes. Thatcher was so resolute, and occasionally so fierce, that commentators who did not know her tried to invest her with masculine characteristics. Nothing could be further from the truth. I have seldom met a woman who enjoyed being a woman more. She hated feminism and loved men. Given a choice, she would always prefer being with a man to being with a woman. When receiving guests in a reception line, she would shake a man’s hand properly. If the next in line was a woman, she would use the outstretched hand as a lever to swing the woman out of the way, so she could get to the next man. Gulf Insider May 2013
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Feature Tribute
She was a woman first. I don’t recall ever seeing her wear trousers. She took more trouble over her hair than any woman I have met. It was gold, very fine, very soft. When washed, combed and set it was magnificent. But it could come crashing down in ruin. She took immense care that this did not happen. The year after she became Conservative leader, she and I were both invited to address a meeting in the Royal Albert Hall. To get from the dressing rooms to the platform, we had to ascend a staircase down which the air rushed as if through a wind tunnel. “My god!” said Mrs Thatcher. “My hair has had it.” “No!” said I. “Follow me. I will spread myself and you must crouch down immediately behind me.” So we slowly advanced up the windy steps, like a twoheaded creature, I expansive, she crouching down. On emerging, the wind-tunnel effect ceased, and she stood up, a dazzling figure, her hair perfect. “My saviour!” she said to me. She had beautiful skin, of peaches and cream, and she made herself up, lightly but effectively, with extraordinary skill, and speed. Her clothes were always fresh and immaculate, with a lot of white and royal blue. Her blouses were impeccable, seams always straight, skirts always neat and perfectly in place. She had always been properly turned out, even at Oxford, when she was Margaret Roberts of St Hugh’s College. It was a part of her nature. She was neat, orderly, never flurried or breathless, in command of herself and her personal space - a prosaic poem of organised womanhood, ready for duty at all times. Some aspects of her were problematic. The realm of humour was tricky ground. Her jokes were few and they tended to be sombre, with a touch of bitterness. The idea of ruling through jokes, as Reagan did, was incomprehensible to her. Then there was her voice, the least satisfactory thing about her. The House of Commons is a deeply male place, with a continuous hubbub.
For a woman speaker to make herself heard above this susurrus of sound is always difficult. If she fails to raise her voice, she is dismissed as inaudible, if she raises it, she is “strident”. Thatcher had to cope with this word “strident” all her career. Her voice was not the voice of a heroine and could easily become the voice of a harridan. The contrast with Reagan’s voice and tone, always pleasing and often enchanting, could not have been greater. Thatcher’s pile-driver voice was one reason I never wanted to spend much time with her, despite the fact that I was desperately anxious for her policies to succeed. In many ways she was a compendium of annoying habits, whereas Reagan was a compendium of pleasing ones.
of her most people never knew existed. The great majority of heads of government, in my experience, are hardened egoists, corrupted by exercising power even if not already corrupted by getting there. To combine generosity and unselfishness with tremendous will is almost unknown, but Thatcher did, and this gave an extra dimension to her heroism. But the public, and indeed most politicians, saw only the hard battle armour. She was divisive. You either admired her enormously or detested her. She tended to turn opponents into enemies, and critics into dedicated pursuers. I have an uneasy feeling, too, that she did not much mind being hated, took it as part of the business of governing, and almost as proof she was on the right lines. She was a born ruler, and it was a word she did not feel too shy to use. She once said to me: “I love ruling.” Like Reagan, she had a small number of core beliefs. Her primary aim was to reduce the size of the public sector in Britain and so create space for the entrepreneurial economy in which she strongly believed. Unlike him, she was highly educated, intellectually disciplined, clear-thinking and methodical. Her programme of “privatisation” evolved not from some dogma but naturally from the political and economic mess she inherited. But, as it evolved, she saw its ideological attractions. Thus it appealed to thinkers of the centre and right all over the world, and “Thatcherism” was copied in more than 50 countries. Its success gave supporters of the market system a huge burst of self-confidence after a decade of doubt, and it was this, as much as any other factor, that helped undermine the self-confidence of the Soviet oligarchies. GFI
She was highly educated, intellectually disciplined, clear-thinking and methodical.
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On the other hand, Thatcher was a good, kind and gentle creature, wonderfully considerate to her staff, always thinking of other people and doing things for them, unasked, and never cross if she got no thanks. When I told her that the Irish prime minister, whose wife was paralysed but would not allow a live-in servant, was having to do his own laundry, she said, impulsively: “Oh, I could go over from time to time and do it for him.” When she went to China, and my old journalist friend George Gale got helplessly drunk, Thatcher put him to bed in his hotel room. Some time later I told George, who was wholly unaware of her benevolence. “So that’s why I found my clothes so neatly folded the next morning,” he said. ‘I thought the hotel staff had done it.” I stress that Thatcher had a warm, kindly inner core - that she was, quite simply, bighearted - because it was a side
Paul Johnson is the author of Heroes, published by Weidenfeld & Nicolson.
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08/04/2013 22:49
Print Media Feature
DIGITAL OR Print?
97% of Middle East & Africa organisations still consider print to be important to their business.
T
he print industry is still going strong and is set to grow even stronger, according to a groundbreaking study commissioned by Canon Middle East, which found that 97% of organisations in the Middle East and Africa still consider professionallyprinted materials to be important to their business. Furthermore, more than half of the organisations surveyed (54%) consider print to be more effective than any other type of media, while 90% stated that they would include print in their multichannel communications tools, the highest percentage by far amongst all the different types of media. The findings are in stark contrast with the widespread predictions from industry experts at the beginning of this decade that digital would gradually replace print in terms of its importance to a company’s marketing and communications strategy. In fact, the research results show that print and digital are both expected to grow in tandem and complement each other as part of integrated cross-media campaigns rather than competing for singular usage. This is further verified by the fact that almost half of organisations said that they expect to increase their
use of print in the near future. Canon Middle East commissioned the research as part of its strategy to ensure that it first and foremost understands its customers’ needs and identifies industry trends based on local insight and international best practices in the industry. The report is based on a detailed survey of 210 users and commissioners of professional printing conducted through in-depth interviews in the UAE, Saudi Arabia, Lebanon, Egypt, Morocco and Kenya. The research also showed a strong lack of awareness surrounding the latest technological developments in crossmedia, with many of them unaware of the meaning or benefits of printon-demand, web-to-print, professional photo books and customised direct mail, revealing further opportunity for the print industry in the region. Only 47% of print buyers are aware of web-to-print services, and 22% have actually used them, so the potential market is set to be sizeable. However, applications such as web-to-print and print-on-demand are producing tangible benefits for many customers, suggesting that their usage will rise as awareness grows.
Digital would gradually replace print in terms of its importance to a company’s marketing and communications strategy. The research results showed some similarities with attitudes and outlooks in Europe on certain fronts and some major differences on others. When it comes to the importance of print to their organisation, 87% of companies in Europe agreed, which is less than the Middle East and Africa percentage (97%) but still extremely high considering the trend towards digital/online channels in more developed European markets. Furthermore, organisations in Europe see print as one part of a multichannel approach while organisations in the region see print as the principal, main media in their approaches. GFI Gulf Insider May 2013
63
Business Passenger Demand
Air Passenger Growth Accelerates
T
he International Air Transport Association (IATA) announced global passenger traffic results showing that demand growth is accelerating on the back of stronger business confidence, particularly in emerging regions. Passenger demand rose 3.7% compared to 2012. February international passenger demand was up 3.6% compared to the year-ago period, and 0.9% compared to January. Capacity rose 1.1% versus February 2012 and load factor climbed 1.8 percentage points to 76.3%.
Asia-Pacific
carriers
recorded an increase of 4.5% compared to February 2012. Continuing improvements in China’s economy and growth in intraAsian trade provided strong support to the passenger business of the region’s airlines. With this robust performance, demand associated with Asia-Pacific’s emerging markets has been a major
driver of the stronger growth international traffic seen recently.
in
European
carriers recorded 0.8% growth compared to February 2012. Reflecting the contraction of the Eurozone economy in the fourth quarter of 2012, European carriers have not seen any growth in international demand since October. They have responded by tightly managing capacity, which declined 2.0% year-on-year in February. This pushed the load factor up to 76.5%.
North American airlines’ international traffic rose just 0.3% in February compared to February 2012; however this doesn’t reflect the significant underlying growth trend over recent months. International revenue passenger kilometers for North America are up 3% in February compared to October. The load factor rose to 76%, reflecting a 4.6% reduction in capacity year-on-year.
Middle East carriers saw year-on-year demand expand by 10.6%--the strongest among all the regions. Capacity expansion was held to 9.7% with the result that load factor rose 0.7% points to 77.7%, the highest for any region. Latin American airlines posted yearon-year growth of 7.0%. A 9.9% rise in capacity, however, pushed load factor down 2.1 percentage points to 76.7%. Robust economic growth in countries such as Colombia, which is experiencing strong demand for commodities exports, is contributing to rising air travel. African airlines’ traffic climbed 7.7% compared to February 2012, second best among the regions, while capacity rose 3.9%, boosting the load factor 2.3 percentage points to 65.2%. The rise in load factor commenced in mid-2012, supported by an increase in demand and also from tighter capacity management. GFI
Distortions Mask Modest Cargo Improvement
T
he International Air Transport Association (IATA) released February data showing that air cargo maintained the modest improvement in demand that began in the fourth quarter of 2012. Asia-Pacific carriers saw a 14.7% fall in freight traffic compared to February 2012. This is almost entirely owing to impact of factory closures during the Chinese New Year holiday. Chinese business confidence levels are increasing and are being supported by rising employment and trade activity. North American freight demand declined 3.1% and capacity was down 4.2%. There was a strong month-
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on-month increase of 1.6%, which particularly reflects robust domestic demand. Europe saw a 5.4% fall in air freight, as Eurozone weakness persisted. European carriers reduced capacity by just 3.0%. Middle East airlines recorded strong growth again, with 12.3% year-on-year, and 0.8% month-on-month. Airlines in the region continue to benefit from increased trade activity with emerging economies in Asia and Africa. Latin America and African carriers saw air freight demand rise by 2.9% and 2.0% respectively. Africa’s growth is underpinned by expanding national
economies, while Latin America remains very volatile due to seasonal factors. Carnival in Brazil would have had a dampening effect on demand, but to a much less extent than Chinese New Year. Overall, after adjusting for seasonal factors Latin America declined by 0.2% on international freight markets in February compared to January. International economic indicators are suggesting that the global economy bottomed out in the third quarter of 2012. Industrial production and business confidence measures have been improving since then. GFI
Information provided by IATA
MENA Asset Management
MENA Asset Management Survey 2012
G
lobal mutual fund assets stood at US$ 24.8 trillion (-4.5% y-o-y) at the end of 2012Q2 in 73,490 funds according to data compiled by Investment Company institute (ICI) from 46 countries. The decline in mutual fund assets largely emanated from the decline in global equity prices from a year earlier and due to Euro weakness and the exchange rate effect weighing on European fund assets in US$ terms. Worldwide funds experienced US$ 91 billion in net inflows in 2012Q2 (net inflows were US$ 193 billion in Q1) according to ICI, with flows into bond funds (US$ 155 billion), while equity and money market funds saw outflows (US$ 18 billion and US$ 53 billion, respectively). Money market funds have experienced outflows since 2009Q1 due to a near zero interest rate environment. In 2012Q2, equity fund assets were lower than the first quarter and also lower than in 2011Q2. MSCI World index was down by -7.2% y-o-y in June 2012. The index recovered later as Eurozone fears eased somewhat. MSCI World index was up by 13.2% y-o-y in 2012. At the end of June 2012, this survey
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identified 1,424 funds (with assets of US$ 89.6 billion). At end-2011, there were 1,438 funds in the dataset (with assets of US$ 87.1 billion). The dataset includes funds domiciled in the Middle East and North Africa region, local company sponsored funds irrespective of domicile, and funds with MENA or one of the constituent markets as their geographic focus. The dataset includes 1340 MENA domiciled funds (assets under management US$ 86.6 billion), and 1,085 funds with MENA or one of the constituent markets as their geographic focus (assets under management US$ 74.5 billion). In 2012H1, MENA domiciled fund assets increased by 3% from end-2011 to US$ 89.6 billion for funds tracked in the database. There were an estimated US$ 2.47 billion in net inflows to these funds. The increase was primarily attributable to a US$ 3.33 billion increase in money market fund assets (conventional and sharia). Trade finance funds saw net inflows of US$ 564 million. Equity fund assets (including sub-types) fell by 2.9%, with net outflows of US$590 million. Largest 4 funds in MENA were money market funds.
Due to Euro weakness and the exchange rate effect weighing on European fund assets in US$ terms. In 2011, MENA domiciled fund assets decreased by 13% from end-2010 to US$ 87.8 billion for funds tracked in the database. There were an estimated US$ 13 billion in net outflows from these funds. The decrease was primarily attributable to a US$ 6.9 billion decrease in money market fund assets. Trade finance funds saw net inflows estimated at US$ 526 million. Aggregate equity fund assets fell by 21.7%, with net outflows of US$ 5.5 billion. GFI
To download/read MENA Asset Management Survey 2012 and other economic research and reports, visit http://www.nbad.com/en/Researches/ Pages/nbad-research.aspx
Feature Smart Learning
Smart learning tools in classrooms increasing across GCC Potential users in Bahrain could reach nearly 200,000 students by 2015 Development presents massive opportunities for technology providers as region’s student population grows
C
lassroom instruction across GCC schools will increasingly utilise mobile devices as smart learning solutions gain traction in the education sector throughout the region. According to the latest education industry estimates, the number of potential e-learning users in Bahrain could reach nearly 200,000 by 2015 as student population in the primary and secondary education sector grows. Elsewhere in the region, Saudi Arabia remains the biggest market with 6.6 million potential users, followed by the UAE with nearly a million students. Oman will see its student population increase to 600,000 in two years, Kuwait to 545,000, and Qatar to 200,000. Interested parties will have a preview of the latest smart learning tools from world leading providers as well as the latest advances and best practices on mobile learning at the forthcoming GESS 2013, held under the patronage of HH Sheikh Mohammed bin Rashid
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Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. The event will take place from 5-7 March 2013 at the Dubai World Trade Centre, highlighting the theme “Smart Learning and Technological Advances in Education”. Among the featured speakers include David Kirtlan, a certified Apple Distinguished Educator, who will lead sessions on how the iPad can be used to effectively teach languages and literacy, as well as maths and sciences. GESS AL Nadi, a special section of the exhibition, will also provide its members, many of whom are key decision makers in their respective schools and countries, the opportunity to discuss at length their smart learning and technology requirements with leading providers such as Samsung, Microsoft, Edutech, Rosetta Stone, ICC, Core Education, among others. Last year, GESS and GEF attracted 6,000 key decision makers and ministerial delegations from the UAE, Saudi Arabia,
The number of potential e-learning users in Bahrain could reach nearly 200,000 by 2015 as student population in the primary and secondary education sector grows. Oman, Qatar, Kuwait and Bahrain. This includes a cross section of teachers, heads of department and heads of school as well as procurement managers, school owners and bursars. GFI
For more information visit www.gesseducation.com
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The actual land size is 5,380 sq ft and has been rounded to the nearest hundred.
Licensed as an Islamic Retail Bank by the Central Bank of Bahrain
Technology Gadgets
Lenovo IdeaTab A1000
This pocket-friendly tab by Lenovo is scheduled for the second quarter of 2013. It is powered by a dual core 1200 MHz and features Android 4.1 Jelly Bean OS. A 16GB built-in storage is backed by 32GB expandable memory. It has a 7-inch display and standard connectivity options like WiFi, Bluetooth, USB, Computer sync and OTA sync. The gadget is backed by good sound systems, for music-enthusiasts. The only sore may be the 0.3-megapixle front snapper – the tab would’ve have done better with a slightly better cam!
Tech picKs our ultimate gadget guru!
Corsair Vengeance K70 Keyboard
Offering a great response rate at 1,000Hz and supporting a maximum of 20 keystrokes in one setting, the K70 makes for a good gaming tool. The aluminum chassis promises good durability. It also features the standard USB ports, multimedia buttons and a detachable wrist rest. Vengeance K70 comes in black with red backlighting or blue with silver with blue backlighting.
Canon Rebel T5i
The Canon Rebel T5i quite resembles its predecessor. That said it comes with an affordable price tag. The cam offers crisp image quality even in low lighting conditions and has a continuous shooting capacity measures at five fps. Standard to the Rebel line, the gadget features the auto-focus option. The 3-inch rear LCD is embedded with intuitive touch controls making it user friendly. Other features include Creative Filters, Night Scene, Multi-Shot Noise Production mode, and HDR Backlight Control. The 18-to-55mm lens and EF-S 18-135mm lens is optional. These lens options are compatible with the T41 as well.
Devotec Fuel Micro Charger
Allegedly the world’s smallest mobile phone charger, the Devotec Fuel Mirco Charger measures approximately 1.3 x 0.9 x 0.5 inches. It contains a rechargeable 5C lithiumion 220-milliAmp hour battery designed to offer several hours of standby power or 20-30 minutes of talk time and works with any phone using a Micro USB connector. The project is still in its initial stages; let’s hope it makes it to the shelves!
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Art Inspiration from Nature
Inspired by the Ordinary…
M
adhab Dutta is an architect by profession and a selftaught artist. Drawing his inspiration from nature and the ordinary, his love affair with art began with his childhood charcoal and pencil sketches. He went on to use acrylic and oil paints on canvas and today even experiments with digital applications. “I love drawing horses,” he says, “they’re amazing creatures!” Madhab also likes to sketch and paint human figures. He finds how Bahrain’s art scene has progressed commendable. “The growing number of studios and exhibitions gives artists in the kingdom many opportunities. The rich cultural heritage also promotes the growth of art.” He hopes to see more young talent emerge. Does Madhab have a favourite piece from his work so far? “It’s difficult to choose,” he says. “It is strange how as we move ahead in life, our experiences and change in outlook alter the way we see our work; a painting that I may not have liked before, may suddenly become dearer to me!” GFI
For inquiries email madhab@batelco.com.bh
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Inspiration from Nature Art
Gulf Insider May 2013
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Feature 100th Issue
In place of our usual end of magazine Last Word feature, on the occasion of our 100th issue we reproduce a few of our front covers from over the years.
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Ghost
Power in reserve, composure in any conditions
Ghost is engineered to be whisper-quiet, however much you exploit its new V12 engine. Effortless, yet rewarding driving is assured by the same advanced technology that creates the unique magic carpet-like ride. In every respect, Ghost embodies the power of simplicity.
Euro Motors, Authorised Rolls-Royce Dealer, 810 Sh. Jaber Al Ahmed Al Subah Highway, Al Hamriya 611, Sitra, Kingdom of Bahrain Tel: +973 17 750 750 www.rolls-roycemotorcars-bahrain.bh Š Copyright Rolls-Royce Motor Cars Limited 2013. The Rolls-Royce name and logo are registered trademarks.