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Contents
December 2013 more inside...
Cover Story
Interview with
18
H.E. Saeed Abdul Jalil Al Fahim 56. Car Review Nissan GT-R
19-27 Islamic Finance
46 Profile
Special Feature
Anna Haskell Thomas
28
48
Nuclear Program
Sydney, Australia
Iran
Travel
30
51
US Strategy
Dubai Motor Show
Middle East
Motoring
60. Men’s Fashion Boggi Milano
32 Bahrain
Real Estate Review
64 Art
The work of Marianne Pasmans
58. Abu Dhabi Red Bull Infiniti
62. Tech Picks
Your ultimate gadgets
GulfInsider
Comment...
The Arabian Review Publisher & Editor in Chief Nick Cooksey
Times are changing It takes a lot of courage to go against the crowd. For example in investing, it isn’t easy to stand alone, especially when everyone else is betting the other way. Have you ever noticed, for example, that investors are often only interested in buying some stock or asset when its price is going up? It’s as if a rising stock price is somehow validation that everyone else thinks it’s a good investment too. Of course, these types of situations often make the worst investments. If you buy when everyone else is piling in, you could very well be the last sucker to enter a crowded room before the music stops. The opposite is also true. When an investment has cratered and the price has fallen through the floor, nobody really wants to buy. Realistically, the opposite should be true. And gold is an interesting example of this. After more than a decade of positive returns, many investors have abandoned their precious metals positions. The conventional wisdom says that gold is ‘finished’. After all, the dollar price is falling... so it must be a bad ‘investment’. Others, however, are looking at where gold is right now, where it probably will be a few years from now, and thinking that it’s a hell of a bargain. Azerbaijan’s State Oil Fund (SOFAZ) is in this group. The fund recently announced that they were increasing their gold holdings by 33% over the next year. This is a big move for the $35 billion fund, and they join other sovereign wealth funds from Qatar to China, plus central banks in many parts of the world are increasing their gold holdings. A significant trend is unfolding. Foreign nations have long trusted the United States to maintain a sound dollar. But for decades, and especially over the last several years, America has abused this privileged trust from being the primary reserve currency by printing and flooding the world with trillions of excess dollars. Russia has recently agreed to sell oil to the Chinese, accepting renminbi as payment. Many Fortune 500 companies have begun to issue bonds denominated in Chinese renminbi. Even the London Stock Exchange now has a thriving renminbi bond business. All underscores this growing theme of the end of the US dollar’s dominance-- one of the most critical trends in the world today. The multi-award winning Arabian magazine
GulfInsider The Arabian Review
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Islamic Banking
World Islamic Banking Conference in Bahrain
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Send your views to info@Gulf-Insider.com Captain Phillips
The multi-award winning Arabian magazine
GulfInsider The Arabian Review
Issue 106
Bahrain
Need for Dialogue
UAE
Passports for Expats
GCC Telecoms
Dwindling Profits
Bahrain …
BREAKING NEWS
The internet, blogs, and the accent of fast but false news
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A commendable initiative by Colonel John Steed (Article: The Forgotten Hostages) to take the time, effort and risk to call up pirates, to free the hostages; the article spurred me on to watch the movie and yes, it was fantastic. Though I also read up about how the mariner’s crew thought poorly of him; and I agree that he was quite rigid. A leader must strike a balance between doing things his way and listening to his subordinates. Call me insensitive but may be being a hostage was the hard knock that Capt. P needed to mellow down his bossy behaviour.
Emperor’s New Clothes
This is with reference to your ‘Last Word’ column in Gulf Insider’s November issue. True that self proclaimed artists these days come up with utter rubbish and call it art. Sorry to say but a lot of art galleries in Bahrain too, promote junk. This is more common with installation art than paintings. I’m reminded of the Hollywood film ‘Monalisa Smile’ in which protagonist Julia Roberts plays the role of an art teacher who teaches her students how to perceive and interpret art, actively. There is no shame in standing up and telling ‘artists’ and ‘modern’ art spaces not to promote random work; in telling them that the emperor has worn no clothes!
Josh Oz
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Bureaucracy; The ‘Bigger Picture’
Iran
The West’s Delusion
Saudi Arabia Market View
Lulwa Mattar
Bold & Beautiful! When ‘Democracy’ can mean ‘Islamic Republic’ Bahrain BD2
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Gulf Financial Insider
GulfInsider The Arabian Review
Issue 104
Bahrain Economy
Dear Editor, Congratulations to you and your team for bringing out a magazine like Gulf Insider, every month. It’s a very bold magazine and doesn’t sugar coat facts like most publications we read these days. The topics that you choose to run in your magazine are relevant and the articles informative; they are also written in a very engaging style and so it’s a pleasure for readers to pick up the Gulf Insider. My best wishes!
Face Lift
Gulf Insider seems to have had a facelift. I see you’ve added many new columns and sections. Also, the designs and layouts, though keeping to the magazine style are fresh. It looks great! Keep up the good work. Bob
Majed
Yemen
The UN-Revolution
Iran
Bahrain and
US Bahrain
Banned for Being Attractive
and Bahrain Bahrain
US
AKING NEWS Bahrain ...BRE
Gulf Expats!
Why there are few places so popular with expats than Bahrain and the Gulf Bahrain BD2
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the growth The internet and pushed of ‘blogs,’ has for the open the doors bstantiated release of un-su ever news or fabricated t on accen wider, with the reader, rather speed to the l journalism than in carefu array of in checking the often are which assertions ‘facts.’ presented as despite all human rights, s to the care about ent measure measure of sorts of transpar defying any es, claims, most verification, the usual contrary. n by the authoriti e or on and that every objectivity messag There is frustratio old word about repressi already to get their coop is an tly and still they ‘bum burbles’ coveted, at being unable od by an apparen ‘democracy’ call it journalist Followed understo despite calls for a now they exercise freely. g ‘official to be d international media, does, although ” The chance have and News. blinkere the lumberin on PR agencies “Breaking PR course by reveal a big stable door g a fortune of to the believing first spendin w shutting has to be the who might response,’ though someho news horse synonymous) of all the others d by so-called loose, (as news-making are while the story ahead and supporte and but is running outmaneuvered it as well, pesky being bolted, on are only chasing not be who continue Yet they Editors insisting led rabble, Bahrain is ’ for corroboration, everywhere. wise News by a poorly fight which sources, ead ‘support asking It is a media and which sees the things like elicit widespr most of all, to and up onal in the hardly winning authentication lawyers, “will it hold of internati to their plight. y majority they are now whole apparent the compan Consequently still choosing ling the formers much of trators” of of overhau lots opinion in court.” Bahrain, demons with ul in process seen “peacef that environment see if that As we have as the nightly believe that local media d, albeit ignoring in the past, studios to cocktails, onal to a global are being besiege that is now gizmos and the internati with Molotov from U-Tube ng new tyres s the way that Hopefully there they are armed bombs, and continui ‘news’ hits burning of are improve and show the nano-seconds weapons audience oppressed” an media see Bahrain. working closely all within too, the “poor by be more to claim and rioting, a flame. So ion ed and tortureddoesn’t will also flicker of that the Opposit being “brutaliz of the first government items’ from making all repressive the ‘news ly Al Wefaq, condemnatory groups, principal and obtuse manner of
S
14
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Gulf Insider December 2013
Gulf Insider
r 2013
Novembe
ia fight It is a med ain is which Bahr ing hardly winnsees the and which rity apparent majo nal of internatio ers still opinion form believe choosing to that “peaceful are tors” demonstra ged. being besie hip have cooled. significant, bilateral relations infinitely more were the , What was ing however Ambassador US and concern by the former who recently comments Adam Ereli, said to Bahrain, visit to the region. He ons made a return widespread percepti were region had that there with the US neglects that US relations adding, “the ted, that it needed deteriora its peril,” and trend.” He its allies at this troubling ” with to “reverse friendship, “depth of of an ally had praised the that the “role many Bahrain and t” at a time when about been constan were concerned as (US) citizens Islamic bodies such as of the growth Brotherhood as well g numbers the the Muslim officer at and the increasin antiand a senior who quoted immigration the US, heightening Parliament) in precisely It of Muslims to try and Facility in Bahrain . This was the onal editors, to events US Naval e denial’ by the General. to look to Muslim attitudes with internati the US there the US had an ‘absolut balanced coverage that within in the time that Gulf. get better was claimed support for the Shia issue, forces in the e the ture’ of w w moderat manufac in Bahrain. to the kernel was someho ilize or overthro of ‘news tly become Then he got to “destab In terms that a claim and unsettle s, had apparen out recently US Chief of Bahrain Al Khalifa regime take one which ced among US politiciants. it turned could the oil” of former to the Sheldon so that “big more pronoun and fellow diploma ion of oil attributed General Hugh ze the Saudissupply and distribut administrators said, “a general feeling the the Joint Staff, colluded to destabili It was claimed he n. over had the ruling the Gulf”. loyal There was, a fabricatio that the US time to leave supplies in and its long and Egypt, was that it was the Gulf behind” onally, but would forsake plot went, “King Bahrain and of ripples internati in Bahrain the US ‘freedom’ only, so the send families It raised no tic calls for of Saudis to found kudos is seen ally. It was democra the tely instead to embrace call ador foiled the it immedia wanting elected (Presumably hy Hamad’s Bahrain” which had US Ambass in by those an ‘unhealt where the ly no sense troops to governments. flamers and y figure in appointed the It made absolutepolitical sense, Wefaq Islamic as a shadow Al mean s plotters. like the or is with , economic these waverer the Islamists to that there hard till it association’ in Bahrain, such an extent g to be sent a strategic long legs and ran throwers who still refuse Society, to What was it had circulatin Al Wefaq, the but of men, who d by denials. the men of a public petition demanding s as the equal was pole-axe that so many in Bahrain t Obama, to is from ayatollah regard women to Presiden significant it and shows te recall. instructions a day or take their willing to believe fellow’s immedia ons of the but it ran for were percepti plot, ador how wild 15 Ambass It was a measure r 2013 Novembe denied by the sed to the some Gulf Insider two till it was hastily summon (who was
Gulf Insider wishe’s to apologize for not crediting our cover article of last month – ‘Bahrain Breaking News’. It was researched and written by our regular correspondent Nicholas Cortes – Nicholas, we love your insightful writing. Please accept our sincere apologies for the oversight (ed).
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Bahrain
GulfInsider NEW’S ROUND-UP
“First Intellectual Property Forum” debuts in Dubai
Power Demand In The Mena Region Set To Grow By 7% Annually Until 2020 Demand for electric power in the MENA region is accelerating rapidly, and is set to continue to grow by seven per cent annually in the coming decade, according to a report published by the Economist Intelligence Unit (EIU). The report, titled MENA’s electric power supplies to 2020, states that population growth, economic development and industrialisation, driven by rising oil prices, are significant factors propelling demand for electricity, with some countries diversifying fuel sources and investing in renewable energies, especially solar power, as part of their efforts to expand power supply. The report added that the Gulf Cooperation Council (GCC) interconnection grid, due for completion by the end of 2013, will enable power surpluses to be traded across the region. SOURCE
The First Intellectual Property Forum of its kind in the UAE and the region will debut in Dubai from 11-12 December 2013 at the Jumeirah Beach Hotel, Dubai. The event will mainly focus on protection of intellectual property (IP) of trademarks and related issues to attract investments and enhance the business environment. The two-day event will see participation from business community, dignitaries, and representatives of governmental departments, international organizations and experts in the field of IP. The Forum, organized by the Brand Owners’ Protection Group “BPG”, in strategic partnership with Dubai Economic Council (DEC), aims to provide an interactive platform for the decision-making centers and major firms in the region which operate in various sectors, to drive strategic dialogues on the pressing issues to intellectual property rights (IPRs). Furthermore, the event seeks to raise awareness among the business community and stakeholders on the best global practices in the field of IPRs protection, particularly the protection of trademarks and the application of the laws that control illegal trade of all forms. - SOURCE
Gulf Air to resume flights to Kerala capital Bahrain’s national carrier Gulf Air announced that it would be resuming its flights to Thiruvananthapuram in India more than three years after halting the service following a financial review. The airline will resume operations to the Indian city with five weekly, starting on December 15, it said in a statement. Gulf Air said its decision to resume flights to the Kerala capital “reinforces the airline’s strategy of strengthening its core network and maximizing convenience for its customers while providing business links to Bahrain that support economic growth”. The airline scrapped the service in July 2010 as part of a review into its less profitable routes as it battled financial problems. Gulf Air said in July that its restructuring strategy was on track after reducing its overall losses by more than 50 percent in the first half of 2013 compared to the same period last year.
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Gulf Insider December 2013
As part of the restructuring plan, Gulf Air said it has cut its total workforce by 25 percent year-to-date. Gulf Air said Thiruvananthapuram is its fifth destination in India after Chennai, Delhi, Mumbai and Kochi and it will offer a total of 50 weekly flights. – ARABIAN BUSINESS
Business News
Mid-East building boom to peak in next five years The Middle East is set to experience unparalleled construction activity over the next two decades but must be prepared for the complex infrastructure challenges that come with major programme delivery, according to a new report. EC Harris said that over 117 major programmes - defined as construction projects of over $1bn or so that need to be delivered in a short space of time are planned for completion by 2030 and will cost more than $1tn. However, it argues that these ambitious schemes come with inherent risks that could lead to project failures. It says that with demand currently outstripping supply for both manpower and resources, there is a risk of serious inflationary rises. It forecasts that $640bn is set to be spent on major programmes between 2014-2020, which could lead to a battle for resources - particularly as the market for projects under $1bn is also likely to be active. The report, which covers the UAE, Qatar, Saudi Arabia, Oman, Kuwait and Iraq, states that more than 1.2m construction workers will be needed during the period, with sourcing of manpower and processing visas likely to become key issues for some countries. It also says that from next year there will be an “exponential growth” in demand for plant, materials and equipment hire. The mass import of construction materials from around the world may also cause bottlenecks in the supply chain, it adds. Alistair Kirk, head of infrastructure, industry and utilities for EC Harris in the Middle East, said: “The Middle East is experiencing unparalleled economic and social development due to the large volume of mega-projects planned and underway. “These programmes, particularly the more ambitious mega-cities, are at the forefront of these enormous infrastructure developments which will bring diversification, foreign and domestic investment and job creation on an unparalleled scale. “However, with demand currently outstripping supply for human capital and material resources, there is risk of inflationary rises to secure resources in a very competitive and intense market. “But with joined-up, collective thinking, governments, developers and contractors can ensure all major programmes in the region can be delivered on time, on budget and to the required quality.” – BIG PROJECT
Qatar man pays $27,468 for falcon A local enthusiast bought a falcon for $27,468 (100,000 Qatari Riyals) at an auction in Doha. The auction was organized by a hotel group and a falcon hospital, with around 150 birds being sold over two days. Average prices for many young falcons ranging from $6,900 to $19,200. Falcons are highly prized in many Gulf countries, where they are used a tool for hunting and sport. Prices for the largest, most desirable breeds of the bird can reach $275,000, according to an article in the magazine published earlier this year. – ARABIAN BUSINESS
UK scraps visa requirement for Gulf travelers Passport holders of the UAE, Qatar, Kuwait and Oman will no longer need a visa to travel to the UK starting from next year. The UK government has said on its website that the country’s first ever electronic visa waiver scheme will be launched early next year “to make it cheaper and easier for business travelers and tourists to visit the UK from Qatar, Oman, the United Arab Emirates and Kuwait.” The new electronic visa waiver (EVW) will be available online free of charge and can be obtained by travelers up to 48 hours before departure. They will no longer need to provide biometric data, attend an appointment at a visa application center or hand in passports prior to travel. The waiver applies to visit, business or tourist visas of up to six months of stay. Students planning to go the UK for work or study will still need to apply for visas in the normal way. The UK government said the Visa applications from UAE, Oman and Qatar are growing year on year. In 2012 there were 30,148 applicants in the UAE, 20,490 in Qatar, 12,596 in Oman, and 63,780 in Kuwait. It said a record 530,000 visitors from the Gulf Cooperation Council (GCC) states went to Britain in 2012. Gulf tourists injected an estimated $2 billion into the UK economy that year. “Visitors from the GCC spend an average of $3,417 per person per visit which is significantly above the spend from other country nationals, the government reported, quoting VisitBritain. - Al Arabiya Gulf Insider December 2013
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News Business
Bahrain introduces biometric testing at border Bahrain will introduce biometric tests at its borders in a move to beef up security, an Interior Ministry official has reportedly said. He said the face and eye recognition technology would be added to prevent blacklisted expatriate workers from re-entering the country. Japanese and French firms had been hired to advise on the project. The official said Interior Minister Shaikh Rashid bin Abdulla Al Khalifa had approved the decision without allowing MPs to vote on the proposal. “We are currently working with the Criminal Investigation Directorate, the Labour Market Regulatory Authority and the Central Informatics Organisation to establish databases and place new systems and machines to help us in implementation,” the official was quoted as saying. – GULF DAILY NEWS
Arab offers $200k for private tutor An Arab businessman in his 30s is offering nearly $200,000 for a private tutor to teach him English, piano, opera and Shakespeare in a bid to get him into Oxford University. The man, who placed an advertisement in the Times Education Supplement, said the successful candidate would have to be available from 8am to 11pm every day and should stay in close proximity at all times, travelling with him to “a wide range of destinations throughout Europe and the rest of the world”. According to the advertisement, the job includes an annual salary of €146,700 ($196,109), but only the “highly intelligent, erudite, well-read, musically accomplished… and socially and culturally versatile” need apply. The apparently genuine classified ad suggested the role, which required relocation to Geneva, “would suit a retired former head teacher of a renowned British private school or someone with comparable experience who is seeking early retirement”. An additional requirement is that the tutor speak English “without any geographical specificity” and be prepared to coach the client to such a standard that “his Arabic background is no longer evident”, focusing on idiom, rhythm and tone. The man who placed the advert, whose nationality is unknown, said his goal was to attend Oxford, though he admitted this would only be achieved after years of hard work and he did not have a clear idea of what he would like to study at the prestigious university. The man said he left formal education in his teens and now wanted to “invest in himself” after a successful career in business. – ARABIAN BUSINESS
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Gulf Insider December 2013
Bahraini MPs move to veto $490m Gulf Air bailout A group of Bahraini MPs have reportedly moved to veto a royal decree granting a BD185m ($490m) bailout to the national carrier, Gulf Air. While a veto would be an embarrassing blow to the government, which authorised the decree during a parliamentary recess, it would be largely only symbolic because the funds already have been transferred to the airline. The money, approved in October last year, was granted on the condition of a major restructure that saw staff numbers cut by almost 1000 and the number of flights scaled back. The airline has recorded a 50 percent fall in losses this year, also helped by the government’s protectionist rules that were blamed for the demise of Bahrain Air in February. Opposition to the bailout was based on MPs being annoyed that it was approved while they were on a parliamentary break. Gulf Air had initially sought BD664.3m from the government. Rejecting the plea, BD185m was offered on the undertaking the airline would downsize. Parliament was due to vote on the veto but it was not clear whether the vote would go ahead. If it is successful, it will go before the Shura Council. The Gulf Air Trade Union called for the veto to be quashed, saying it feared more job cuts if the airline was forced to pay back the bailout funds. A Gulf Air spokeswoman said the airline was in discussions with the MPs. – GULF DAILY NEWS
Business News
Clinton White House ignored 9/11 warnings It took 11 years, but Judicial Watch recently received a response to a 2002 Freedom of Information Act (FOIA) request that revealed another major missed opportunity by the Clinton administration to prevent the Sept. 11, 2001, terrorist attack, which is part of perhaps the most catastrophic failure in the history of U.S. intelligence. The chilling details come from the Defense Intelligence Agency, which finally handed over an intelligence information [in early 2000]. These revelations came from an unidentified source that provided U.S. authorities with copies of Arabic letters containing precise information about the al Qaeda plot. It was all laid out in minute detail. So, how did the Clinton administration respond? In the incriminating words of the intelligence information report, advanced warning of the plot “was disregarded because nobody believed that Osama bin Laden or the Taliban could carry out such an operation.” Perhaps that explains why, for 13 years, the report was classified “secret” and hidden from public view until Judicial Watch forced its release in August of this year. – WASHINGTON TIMES
Dubai ruler plans 14km corniche from Burj Al Arab A 14km-long corniche stretching from behind the Dubai Marine Beach Resort to the Burj Al Arab is set to open in 12 months after the project received the go ahead from Dubai ruler His Highness Sheikh Mohammed bin Rashid Al Maktoum. Known as the Jumeirah Corniche Development Project, the corniche will be the longest in the emirate. It will be constructed along the beach adjoining six residential districts. Sheikh Mohammed directed that it would link both the walkway and the jogging track with the $545m Dubai Canal Project. He said the Corniche project should be completed in a year. Sheikh Mohammed said the project was part of the government’s goal to ensure people’s quality of life through providing “ideal enabling environment”. “We instructed the concerned authorities to increase the number of walking and jogging tracks around the emirate, and we will create and develop more to serve various residential areas in Dubai,” he said. The project includes constructing a five-meter wide walkway and a four-meter wide jogging track, in addition to lay-by facilities containing kiosks and shaded seating areas overlooking the beach. The project will span more than 80,000sqm and will encompass new shopping and entertainment centres linked through a uniquely designed bridge to more than 450 new restaurants along with luxurious marinas for yachts, and four world-class hotels. - WAM
Lulu chief eyes 42 new hypermarkets by end-2015 The boss of retailing giant Lulu Hypermarkets says he is forging ahead with ambitious expansion plans that include 42 new Lulu Hypermarkets in the next two years. Yusuffali MA, who has been ranked the 40th richest Indian on the planet with a fortune of $2.2bn, said despite numbering 104 stores in the Middle East his Abu Dhabi-based company had no signs of slowing down. It will open seven new hypermarkets in the UAE in 2014-15, six in Oman, four each in Qatar and Kuwait, three each in Bahrain and Egypt and 15 in Saudi Arabia. New markets were also being pursued in Malaysia, Indonesia, Iraq, Algeria, Morocco and Libya. “Our main business is hypermarkets, not shopping malls,” Yusuffali said. “But, why we are going in shopping malls is the shopping malls will complement hypermarkets and the hypermarkets will complement the shopping malls. This is our model. “I will stick only in the core business, because I’m not a person for experiment. Diversification, from the company’s point of view, will always be in related sector. Hypermarkets, malls, hospitality, money exchange, food service, entertainment centres, etcetera, will be our focus area.” – ARABIAN BUSINESS
Gulf Insider December 2013
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News Business
Iran stops morality police from enforcing dress code Iranian President Hassan Rowhani has banned the country’s morality police from arresting women considered to be dressed immodestly. The curb on power of the Gashte Ershad (Guidance Patrol) was the fulfillment of an election promise to loosen strict standards on Iran’s Islamic dress code. Rowhani has tasked the Interior Ministry with maintaining standards in dressing – however, Iran’s police head said that the dress code is no longer a matter of law enforcement and will be handled by a “social council.” Iran’s Guidance Patrol was part of a collaboration of 26 government agencies, including “morality police” units as well as volunteer enforcers who are especially unpopular with many Iranians. Rowhani had originally pledged that Iranian women would be protected from “harassment” and would be able to “enjoy real security.” The president also slammed the patrol’s vigilantes, saying that their prescence was unconstitutional and “antagonizes our society and has negative results.” – DAILY TELEGRAPH
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Air Travel Demand Continues To Improve The International Air Transport Association (IATA) announced global passenger traffic results for September showing a continuation of the strong demand trend despite a slight slowdown from August. Total revenue passenger kilometers (RPKs) rose 5.5% compared to September 2012. Capacity increased at a slightly lower pace at 5.3% over the same period. The load factor in September (80.3%) was largely in line with levels achieved in September 2012. Middle East carriers continued to show the strongest year-over-year traffic growth at 10.4%. The trend is likely to continue, with economies such as Saudi Arabia and the United Arab Emirates showing continued strong growth in non-oil producing sectors and robust increases in new export orders. Capacity expanded by 13%, pushing down load factor 1.9 percentage points to 77.2%. “As the global economy continues to recover, aviation is doing its part by supplying the connectivity that drives global trade and commerce. Aviation can do even more if governments see it as an enabler of growth and development, rather than as a source of tax revenues. Unfortunately, we had disappointing news this month, as the European Commission proposed applying the Emissions Trading Scheme to all flights into and out of European airspace for the period those flights spend in EU airspace. The proposal, if agreed by the EU Parliament and the EU Council, risks nullifying all the hard work States achieved at the recent 38th Assembly of the International Civil Aviation Organization and could put aviation back in the middle of a potential trade war as non-EU States reject the attempt once again to impose the ETS unilaterally,” said Tony Tyler, IATA’s Director General and CEO. - SOURCE
Bahrain Airport to be expanded Bahrain Airport is to be expanded to handle more than 13 million passengers a year, it has been announced. A new airport is also in the pipeline. The Premier said that the major development would meet demands expected by 2030. His Royal Highness Prime Minister Prince Khalifa bin Salman Al Khalifa chaired the Cabinet session in the presence of His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince, Deputy Supreme Commander and First Deputy Premier. Ministers discussed and approved a memorandum presented by the Transportation Minister. Plans include a comprehensive upgrade of the current departure building and all its facilities. In addition, two locations near Fasht Aljarem and North of Diyar Al Muharraq have been reserved as potential sites for the new airport. – GULF DAILY NEWS
News Business
Kuwaitis unleash anger after PM declaring ‘welfare state is over’
Kuwaitis have unleashed their anger on social media when Prime Minister Jaber alMubarak al-Sabah recently declared that the country‘s “welfare state is over.” Sabah was also backed by the Minister of State for National Assembly Affairs Rola Dashti when she said that “low fees paid for services and goods, with an almost complete absence of tax revenues will force Kuwait to face a deficit between 2021-2029.” One Kuwaiti parliamentarian, Hussein al-Kuwayaan, told Al Arabiya that Sabah’s statement has “depressed” the Kuwaiti people. “The prime minister needs to explain to the citizens how the welfare era is over,” Kuwayaan said. The parliament member, who intends to grill the health minister for corruption and neglecting projects including cancelling tenders for four hospitals, said the government is not capable of providing Kuwaitis with basic needs. The political activist Fahed al-Thanian said the country suffers from epidemic corruption that is the subject of ”gossip” from both Kuwaitis and the government. “Many oil producers stopped depending on their oil revenues, diversifying their internal and external investments, but Kuwait is the only country that has a nominal surplus exceeding dozens of billions for over 10 years,” he said. “We didn’t see any investment projects, and all we hear about are losses and deficit, and the government has nothing to do but keep on nagging about the deficit and the debts and its inability to meet the needs of the citizens,” he lamented. Kuwait had a $60.5 billion surplus in the first ten months of its fiscal year for 2013, thanks to robust oil revenues and lower-thanexpected public spending. – REUTERS 14
Gulf Insider December 2013
Qatar to add 29 new high-end hotels
Qatar’s hospitality sector is slated to see more than two dozens of luxury hotels and should contribute nine percent of the total future supply of hotel rooms within the Gulf region, according to research by the Al Asmakh Real Estate Development Company (Aredc). It is estimated that approximately 29 high end hotels are scheduled to be built in Doha and the adjoining areas of Al Rayyan, Um Salal, and Al Wakrah. These hotels are likely to deliver approximately 8,300 new keys, which is 58 percent of existing rooms available within the luxury segment, according to a report by the Gulf Times newspaper. Aredc also added that Qatar ranked third place within the GCC countries in terms of future rooms supply and the country’s hospitality market would be stable with the average daily rate across all segments at $235 and revenue per available room at $150. “The overall scenario in hospitality market within Qatar is stable. Seasonal changes and upcoming public holidays may impact occupancies in next quarter. Nevertheless, this depreciation would be periodic and will sustain for a limited time,” said Aredc.
“Arab Spring” nations backtrack on women’s rights Almost three years after popular uprisings toppled autocratic leaders in one of the most conservative corners of the world, a Thomson Reuters Foundation poll on 22 Arab states showed three out of five Arab Spring countries in the bottom five states for women’s rights (for the methodology behind the poll, see http://poll2013.trust.org). Egypt emerged as the worst country to be a woman in the Arab world today, followed closely by Iraq and Saudi Arabia. Egypt scored badly in almost every category, including gender violence, reproductive rights, treatment of women in the family and their inclusion in politics and the economy. Arab Spring countries Syria and Yemen ranked 18th and 19th, respectively - worse than Sudan, Lebanon, the Palestinian territories and insurgency-hit Somalia, which scored better on factors such as political and economic inclusion, women’s position in the family, reproductive rights and sexual violence. Libya and Tunisia came in 9th and 6th.... Egypt’s ranking below Saudi Arabia, where women are banned from driving and need permission from a male guardian to work or travel, reflects widespread concerns about harassment, which was mentioned by almost every respondent as a major issue. A U.N report on women in April said up to 99.3 percent of women and girls in Egypt are subjected to sexual harassment. The Muslim Brotherhood’s rise to power in Egypt, culminating with the election of President Mohamed Mursi, angered many prominent activists who say the Islamist group infringed on women’s rights. The Brotherhood warned that a U.N. declaration on women’s rights could destroy society by allowing a woman to travel, work and use contraception without her husband’s approval and letting her control family planning. Al Arabiya
Business News
Work on $15bn GCC rail network to start in 2014 Construction of a $15.5 billion rail network linking the six wealthy Gulf Arab states will start late next year and an overseeing authority for the project is being set up, an advisor said. The joint project is to develop a railway network linking Oman in the south to Kuwait in the north through the United Arab Emirates, Qatar, Bahrain and Saudi Arabia. Progress has been held up by bureaucratic and technical obstacles, but if the railway is completed, it could have a major impact on the Gulf economy by stimulating trade and limiting consumption of fuel for road travel. Detailed engineering and design (DED) work will be completed by late 2013 or early 2014, with construction to follow, Ramiz AlAssar, the World Bank’s resident advisor to the Gulf Cooperation Council (GCC) Secretariat, told a conference organised by MEED, a business information company. A GCC authority to oversee the project is being established after it was recently approved by national ministers of transport and finance, he said. “Some key milestones have been achieved and we are targeting for the project to be fully operational in 2018,” he said. GCC countries will build their parts of the railway on their own; the United Arab Emirates and Saudi Arabia have begun their construction work while other countries will start shortly, he added. Oman has begun preliminary design on its rail project. Meanwhile, the contract to study a proposal for a new causeway linking Saudi Arabia and Bahrain, part of the GCC rail project, will be awarded next month and the study is scheduled to be completed in 2014, he said. “This is an important strategic project in the scheme.” – CONSTRUCTION WEEK
Qatar to make military service compulsory for four months Qatar’s government has approved a draft law making it compulsory for men in the Gulf state to do military service for up to four months, media reports said. Under the proposed legislation, the first of its kind in Qatar, it would be compulsory for men aged between 18 and 35 to serve in the military for three months if they are graduates, and four if they are not. The cabinet adopted the bill before submitting it to the Majlis al-Shura, or consultative council. The move was aimed at mobilizing Qataris for the defense of the country and to ensure “a regular force” that would be backed up by reservists, if necessary, the official QNA news agency reported. A Qatari official who spoke to AFP on condition of anonymity said “the aim of the military service is to get young Qataris to rely on themselves,” and that four months was enough. The armed forces of Qatar, which sits on the world’s third largest natural gas reserves, are made up of 11,800 servicemen, according to the International Institute for Strategic Studies. In Kuwait, parliament is debating a bill for the restoration of compulsory military service, cancelled after the Iraqi army invaded the emirate in 1990 and occupied it for seven months. - AFP
Qatar clamps down on hotel alcohol sales Authorities in Qatar have issued a written notice to hotel managers banning the sale of alcohol in swimming pool areas or on the beach, leading to the last minute cancellation of some beach parties around the capital Doha. The Four Seasons, St. Regis and the Ritz Carlton hotels all cancelled beach parties as a result of the notice, Doha News confirmed. Officials have not yet commented on whether the new notice is a new regulation or the reinforcement of an existing rule, the report added. It is not the first time Qatar has moved to clampdown on the sale of alcohol. In December 2011 a controversial ban on alcohol at Qatar’s manmade Pearl-Qatar development led to the closure of several high profile restaurants. A number of Gulf states have seen conflicts over alcohol
regulations in recent years. Pressure groups in Bahrain forced the closure of bars and clubs in the Gulf state’s threestar hotels in 2009, while Oman has chosen to confine the sale of booze to certain hotels and restaurants. Dubai, in June 2011 banned standalone bars and restaurants from displaying alcohol behind their bars. Outlets licensed to serve alcohol but located outside hotels were forced to tint glass doors on fridges, move entire displays and even redesign whole bar areas to comply with the ban. – ARABIAN BUSINESS
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News Business
Cathay Pacific’s Business Class Voted The Best Cathay Pacific Airways’ took the “Best Airline Business Class” honour at the 2013 Business Tr a v e l l e r China Awards. The awards ceremony took place in Beijing on Friday, 15 November. The honour comes on top of a number of other awards received by the airline in recent months, including the “World’s Best Cabin Staff” and “Best Transpacific Airline” accolades in the World Airline Awards run by Skytrax, and the “Best North Asian Airline” honour at the 24th Annual TTG Travel Awards. Since 2005 the Business Traveller China Awards have been demonstrating readers’ satisfaction with airline and hospitality providers. As part of its ongoing product developments, Cathay Pacific is currently fitting its shorthaul aircraft with a new Regional Business Class seat. The rollout of this new product will be completed by the end of 2014. The airline also recently opened The Bridge, its latest lounge at Hong Kong International Airport, taking the standard of its premium ground products and services to a new level.
flydubai commits to USD 11.4 billion Boeing 737 aircraft order flydubai has announced an order for up to 111 aircraft from Boeing. This order includes up to 100 Boeing 737 MAX and up to 11 Next-Generation Boeing 737-800s. In only four and a half years flydubai has built up a network of more than 65 destinations, served by a fleet of 33 Boeing 737-800 aircraft. It achieved profitability in its third year of operation and recently launched Business Class services. The decision to order the Boeing 737 MAX represents the largest commitment to order a single-aisle Boeing aircraft in the Middle East. The first aircraft, NextGeneration Boeing 737-800s from this order, will be delivered between 2016 and 2017. Deliveries of the first Boeing 737 MAX will commence in the second half of 2017 and continue until the end of 2023. In 2013, flydubai announced 16 new routes and increased the frequency of several destinations across its network.
Britain is first non-Muslim country to launch sharia bond Britain is the first non-Muslim country to sell a bond that can be bought by Islamic investors, issuing a £200m Sukuk, a form of debt that complies with Islamic financial law. The new sharia-compliant gilt will enable Britain to become the first nonMuslim country to tap the growing pool of Islamic investments that is forecast to top £1.3 trillion by next year. “When Islamic finance is growing 50pc faster than traditional banking and when global Islamic investments are set to grow to £1.3 trillion by 2014, we want to make sure a big proportion of that new investment is made here in Britain,” British Prime Minister David Cameron told an audience of senior officials from Islamic countries. Among those at the meeting were Sultan Hassanal Bolkiah of Brunei, King Abdullah of Jordan, Afghan president Hamid Karzai and Prince Salman bin Hamad Al Khalifa, Crown Prince of Bahrain. The World Islamic Economic Forum has never been held before in a non-Muslim country and highlights the growing role London is playing in the Islamic finance industry. The London Stock Exchange is preparing to launch an Islamic Market Index to help the managers of sharia-compliant funds identify new investment opportunities. To comply with sharia law, Islamic investors are forbidden to receive interest. Sukuks avoid this problem by ensuring the fixed return investors receive on the debt is linked to the profit 16
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generated by an underlying asset. The value of Sukuks already listed on the London market has reached $34bn over the past five years with nearly 50 bonds quoted by the London Stock Exchange. More than 20 banks currently offer Islamic financial products and services in the UK, more than any other Western country, with the number expected to grow further. – DAILY TELEGRAPH
Business News
UAE confirms new mortgage cap rules The UAE Central Bank has issued long awaited new rules governing bank lending to property buyers. The new rules will limit home loans for expatriates to 75% of a property’s value for a first investment of less than AED5m ($1.36m). UAE nationals will be allowed to borrow up to 80%. More expensive homes will restrict expatriates to borrowing 65% of the value, and nationals to 70%.For second and subsequent property purchases, expatriates will only be allowed to borrow 60% of a property’s value and UAE nationals up to 65 per cent, regardless of cost. All mortgages will be restricted to 50% for off-plan properties, regardless of purpose, value or nationality. Loans will be limited to a maximum of 25 years, while the maximum age at the time of the last repayment is 65 years for expatriates and 70 years for UAE nationals. Repayments also cannot surpass 50 percent of a customer’s monthly income, or total more than seven years’ annual income for an expatriate and eight years’ annual income for UAE nationals. The new rules will apply a month after they are published in the Official Gazette, expected in November, a statement said. “The Central Bank is seeking to ensure that banks and other financial institutions have and maintain effective business standards and control frameworks in place for the granting of mortgage loans,” Central Bank governor Sultan Bin Nasser Al Suwaidi said in the statement. The bank originally announced it would set mortgage limits in December, 2012, but halted any immediate change after banks opposed. The central bank originally planned to limit mortgages to 50% for first-time foreign buyers and 70 percent for locals, while levels for subsequent homes would be set at 40% and 60%. It agreed in principle to adopt ratios proposed by the Emirates Banks Association following discussions earlier this year. The limits are intended to slowdown the booming property market, which has recorded price rises of more than 30 percent this year. However, industry spokespeople have said it is unlikely to take much heat out of the market because mortgages much up only 25-30% of all property purchases in the country. – CONSTRUCTION WEEK
Libya ‘seeks to make its laws more Islamic’ Libya is seeking to revise existing legislation to make it conform more to Islamic sharia law, a justice ministry document obtained by AFP shows. The text announces the establishment of a “committee charged with revising current legislation and to propose amendments that would not contradict the fundamental rules and regulations of Islamic law.” It said the 16-strong committee would be nominated by the supreme court and the Mufti, a religious expert on sharia. One law imposing strict restrictions on polygamy, that was instituted by the regime of dictator Muammar Qaddafi who was toppled and killed in 2011, was abolished after the revolution. The justice ministry’s plan would appear to be aimed at satisfying the demands of Salafist, or extremist Sunni Muslim, groups in the violence-wracked North African nation. - AFP
Dubai makes a debut appearance on the global investment hotspot list IP Global, a leading property investment company specialising in securing prime investment opportunities in emerging and developed markets around the world announced the release of its latest Property Barometer for Q3 2013 that they say showcases only ‘bright’ categories, or best investment destinations at the current time. Dubai made a debut appearance in the investment ‘hot list’, alongside US destinations including Chicago, New York, Boston and Seattle, and the Australian cities of Melbourne, Sydney and Brisbane. Paul Preston, Director and Head of IP Global Middle East comments: “We are pleased to see Dubai benefitting from rising economic confidence across the MENA region. Here, prices have risen an impressive 11.9% in 2013 to date, with potential for more growth in a market that remains 30% below the peak levels of 2008. The ever increasing inflow of expat workers in the city from all over the world is a key factor in driving consistent rental rises.” The newfound investor confidence is achieving net yields of up to 6% but Preston does advise that investors should exercise caution as the 2008 property bubble could repeat itself but hopes the Central Bank’s recently announced regulations restricting the amount of cash that homebuyers can borrow will provide the framework for sustainable growth. - SOURCE
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Islamic Banking International Investment Bank
of Bahrain has in place a comprehensive prudential and reporting framework, and encourages the introduction of innovative Islamic financial products. The Kingdom is at the forefront in the market for Islamic securities (sukuk), including short-term government sukuk as well as leasing securities.
H.E. Saeed Abdul Jalil Al Fahim On International Investment Bank and his optimism for the future of global Islamic Finance.
Y
ou seem to have quite extensive and varied experience throughout different sectors. What inspired you to enter into the world of Islamic Banking? As you say, having started my career in a number of sectors, including automotive, industrial, property, hospitality and travel, I wanted to bring my experiences in these fields into a new venture. Furthermore, having sat on a number of Boards on Middle Eastern banks, establishing International Investment Bank (IIB) to be part of the growing number of Islamic Banks and institutions with the underlying principles of fairness and shared responsibility, was a natural step and one that was close to my heart. Why did you choose Bahrain for IIB in 2003? Are you still satisfied with that decision? Why or why not?
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Bahrain was a natural choice for establishing IIB. The Kingdom has steadily emerged as the region’s leading financial centre since investment and retail banks began being set up here in the 1980s. Two things particularly make Bahrain an ideal choice: Firstly, the Kingdom is recognized as having one of the most liberal business environments in the Middle East and the most skilled bilingual local workforce in the region. The Government has taken great care to build the skills and talents of the Bahraini people, and offered them subsidised training and entrepreneurial support. This has ensured that we at IIB are not only able to hire highly qualified Bahraini employees, but also are able to maintain the high quality standards required to meet our client requirements. Secondly, the Kingdom’s strong regulatory framework and banking infrastructure make it an ideal location for IIB’s headquarters. The Central Bank
It is often said that limited investment options constrain the scope and expansion of Islamic finance. Do you believe this to be the case? How has IIB met this challenge? I believe that the principles behind Islamic finance have ensured its longevity and durability, rather than having constrained its scope. The financial depression experienced globally over the last few years, witnessed resurgence in interest in this sector, with many believing that Islamic finance offers a more sustainable alternative to conventional banking. By some statistics, Islamic finance has been growing by 15 to 20 percent per year, a strong indicator of its growth rather than one of limited scope. IIB has reputed members on its Shariah Supervisory Board. The members of the Shariah Supervisory Board interact very closely with the management team to provide value added advice in structuring Shariah compliant products that meet the ever-changing needs of the investor community at large. With this in mind, IIB have had a very positive start to our second decade, with the Bank embarking on interesting opportunities in the United States of America, a country which is enticing investors from across the globe and offering some interesting investments in certain sectors, particularly real estate. Furthermore, IIB’s strong liquidity position provides an opportunity to be highly selective in considering new investment opportunities. A combination of private equity deals in the GCC region with real estate in the UK are currently being evaluated taking into consideration the risk-return requirements of its investors. Looking at our investments of the last few years, we have made headways in a range of internationally diversified fields. These include real estate, such as
International Investment Bank Islamic Banking
the Al Fareeda City project, which which comprises affordable housing units, commercial space and service amenities, over an area of circa 1.02 million square meters located north of Jeddah in the Dhahban area in the Kingdom of Saudi Arabia. And also in football: The Bank acquired an indirect 10% equity stake in Leeds United Football Club (LUFC), an English Football club playing in the Championship, a second tier of the English Football league system. This investment is a “value play” with a high return potential should LUFC get promoted to the lucrative Premier League. And finally in the fast food sector: IIB, together with a second Bahrain-based Islamic investment house, acquired a 49% stake in Hungry Bunny, one of Saudi Arabia’s top fast food chains. WIBC is in it’s 20th year. In this time, what are the major changes that have taken place in Islamic banking, from your perspective? What do you see as the major challenges facing the sector currently? Over the past twenty years Islamic Finance has grown from a domesticonly service to an international product market. The Sukuk market has been a driving force in emerging markets throughout the GCC and Asia. The Global Islamic Finance Report 2012 notes that $144 billion of assets are being managed in line with Islamic principles. However, we have to remember that Islamic finance in its modern form is a relatively young industry. The first Islamic banks were licensed less than forty years ago. With these facts in mind, and noting the huge growth of the industry over the past few years, we have to put importance on the international leaders in this field working together to create the right platforms and regulatory framework for a sustainable expansion of this sector. There has been a lot of talk and many ideas on how to really take Islamic Finance to the next level. How do you think this can be achieved? D e m o n s t r a t i n g t h e comprehensiveness of Islamic Finance,
the UK Government recently announced that they are soon to become one of the first non-Islamic countries to use the Sukuk financial product approach. A move like this could certainly be seen as going to the ‘next level’ and with more and more non-Islamic countries potentially making such gestures in the future , we can see the continued prevalence and strengthening of the Islamic finance sector. Knowledge sharing is also key - regular conferences with active participation from industry leaders, regulators, Shariah scholars and investor community at large help share a lot of information and ideas surrounding Islamic finance and benefits of Islamic products which raises the bar for the industry as a whole.
Looking at our investments of the last few years, we have made headways in a range of internationally diversified fields. How high is the current demand for Sharia compliant investments? As mentioned earlier, there is a year on year growth in Islamic finance of about 15 to 20 percent. Only this week we hear that there are plans for the establishment of the first full-fledged Islamic bank headquartered in the Euro Zone. With more than 20 million Muslims in the EU, there is foreseeable potential in market growth for the Islamic Finance sector. According to a report by Thomson Reuters earlier this week, the global Islamic economy has a potential value of US$6.7 trillion, bigger than the economies of every country in the world except China and the United States. The Report also puts the value of current Islamic financial assets at $1.35 trillion. These figures demonstrate the increasing demand for Sharia compliant investments.
Speaking specifically from IIB’s perspective, with our investors we are witnessing a continuing surge in demand for Islamic products as opposed to conventional ones. How do you find that the products offered by Islamic banks, and specifically those of IIB, compare with those of conventional banking? What can be done to increase competitiveness? Over the past decade, IIB has carefully nurtured a well-diversified range of innovative investment products in association with leading international strategic partners. These products are regularly adjusted to meet the needs of an ever changing investment landscape in global markets and to the needs of our clients. We believe this strategy has helped us ensure our competitiveness and combined with our high operating ethics meant that IIB has built a strong, long lasting relationship with its partners, and thus has resulted in high quality deal flows from around the globe. With focus on private equity and real estate, IIB’s products are very much comparable to those of conventional banking products in terms of competitiveness. If you could have one wish granted in terms of the economic, legal or regulatory environment in Bahrain, what would it be? My wish would be for the continued growth of the Islamic finance sector and for another ten years of success at IIB. Celebrating our decade long establishment this year and reflecting on the foundations that ensured IIB has survived through difficult periods, and prospered through successful times, has demonstrated what we believe is the true hallmark of a robust and credible institution. My wish is to use the many lessons learnt, and which have made the Bank stronger, to now capitalize on a slowly recovering global and regional economies. And to not only comply with our vision, but also to put the Bank on a secure platform of diversity from which to strike out in the next ten years. GFI
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Islamic Banking Bahrain EDB
ISLAMIC FINANCE CHALLENGING OLD BANKING STRUCTURES
Bahrain hosted a major conference on international accounting standards for Islamic finance this November, reflecting the growing importance of this sector in the country. Gulf Insider discusses the Islamic finance market with Dr. Jarmo Kotilaine, Chief Economist for the Economic Development Board (EDB), Bahrain.
H
ow is Islamic finance performing worldwide? Islamic finance is competing with traditional banks on innovation and rapidly becoming a more “intrinsic” part of the banking system as it gains wider acceptance. London has just announced a £2 million sukuk, becoming the first non-Muslim market to offer an Islamic bond. It also hosted the World Islamic Economic Forum (WIEF) this year, making it the first time the event was held in a non-Muslim country. Islamic investments are predicted to grow to over 2 trillion dollars this year. What challenges does the sector face? Obviously, because the investments have to be Shari’a compliant, there are limitations placed on the scope for possible investment. For this reason the Islamic banking sector was exposed to the real estate sector which took a hit after the global economic downturn. Islamic banking needs new products, and it needs the support of secondary markets, but this is slowly improving. How is Islamic finance performing in Bahrain? Are you seeing improvement after the Global Financial Crisis and the incidents in Bahrain? Growing competition is helping Islamic Finance to grow into a global industry. It is more
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mature than it was before the Global Financial Crisis, more appealing. Bahrain has a number of standard setting bodies for a developing sector. Bahrain has also been a pioneer in the industry and thus has a sizeable pool of human capital. Bahrain’s financial sector has become more and more Islamic. The CBB is encouraging consolidation and stronger institutions. We are seeing a lot of regrouping. In become more active, there is still more potential to be tapped, but it has all of the makings of a success story. How important is Islamic finance in Bahrain? Because Bahrain was a pioneer in Islamic finance it has a sizeable pool of talented professionals. The Central Bank of Bahrain is working to consolidate the existing structures and provide more opportunities for investment, so we will see this sector growing further. Does Bahrain offer attractive investment opportunities in general? Yes, the environment in Bahrain is very conducive to attracting foreign investments. There is a great deal of openness in this economy; foreign investors are allowed to have 100 percent ownership of their business, and they can trade not just in Bahrain but also in the rest of the GCC. One important advantage is Bahrain’s central position, which gives easy
Bahrain EDB Islamic Banking
Dr. Jarmo Kotilaine
access to all the world’s major financial centres. The Bahrain government is taking regulatory reform seriously and is working hard to equip Bahrainis with the skills necessary for the 21st century. It is encouraging small to medium enterprises (SMEs) through Tamkeen by acting as a partner in certain ventures. This is creating lots of new entrepreneurs and driving a spirit of innovation. I believe the government needs to do more to publicise Bahrain’s unique advantages to potential investors. What potential areas of weakness do you see? GCC financial markets must diversify and become more efficient. One potential problem in this region is that the cost of capital is so low. Interest rates are at historically low levels, and this encourages waste and can create big problems when interest rates eventually rise. I also see a lot of potential in insurance markets that is going untapped. Do you think the region might become less important as people move away from oilbased energy sources? No, I don’t think so. It is important to America to become energy independent, but alternate energy sources still have some way to go. They are working on extracting oil by fracking, but it is a very expensive process and we do not fully understand its potential environmental impact. In the mean time, the GCC is diversifying to maintain its relevance in a changing global economy. The entire region is investing heavily in infrastructure projects it is moving towards a knowledge-based economy.
The Bahrain government is taking regulatory reform seriously and is working hard to equip Bahrainis with the skills necessary for the 21st century.
Do you think GCC countries will continue to peg their currencies to the US dollar? Over time the region may develop its own single currency, but at the moment I see no real alternative to the dollar peg. Kuwait abandoned its dollar peg in favour of a basket of currencies, which heavily included the US dollar, but its complexity results in associated costs. Is Bahrain on track for the 2030 initiative? Progress is certainly being made. Bahrain is already the most diversified economy in the region, but this is no time for complacency. The 2030 initiative is all about giving Bahrainis the skills, tools, and the regulatory framework they need to become more diversified. GFI
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Islamic Banking Capital Markets
ISLAMIC CAPITAL MARKETS SET TO PROVIDE MAJOR STIMULUS FOR ECONOMIC GROWTH
S
audi Arabia, the UAE and Qatar will all increase their global importance as centres of Islamic finance in the coming years, as the three markets experience rising international demand for financing. Already the top three Islamic banking markets in the Gulf region, rising international demand for infrastructure and investment project financing is likely to stimulate growth in the three markets. In particular, there is set to be strong demand from the government sector, which is increasingly working to ensure that at least a proportion of large project financing is structured in compliance with Shariah law. As the fastest-growing of the three markets, the balance sheet of Qatar’s Islamic banks are expected to be worth more than $100bn by 2017, according to a recent report by global credit rating agency Standard and Poor’s. A forthcoming Euromoney Qatar 2013 Conference will provide a platform for discussion of the direction of the Islamic financial sector, and the models for cooperation and competition that will help sustain it. 22
Gulf Insider December 2013
Co-hosted by Qatar Central Bank, the conference will see a presentation on “Islamic Markets and Economic Growth”, presented by Dr. Khaled Al Fakih, Secretary General and Chief Executive Officer of The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). It will be the first time that a representative of AAOIFI has addressed the Euromoney Conference, and reflects the growing global interest in Shariahcompliant financing and investing. Qatar has one of the fastest-growing Islamic banking sectors in the world, driven by the demand for local credit to finance government infrastructure and investment projects. This in turn is having an impact on the assets of Qatar’s Islamic banks, increasing their share of the country’s banking system. The Islamic banks’ market share in domestic credit increased from 13 percent in 2006, to 25 percent at the end of 2012, according to the S&P report. Global interest in the Islamic financing sector was demonstrated in October 2013, when Britain announced that it
The top three Islamic banking markets in the Gulf region, rising international demand for infrastructure and investment project financing. would become the first non-Muslim country to sell a bond that can be bought by Islamic investors. Prime Minister David Cameron said that the UK Treasury is drawing up plans to issue a £200m Sukuk, a form of debt that complies with Islamic financial law. The new sharia-compliant gilt will enable Britain to become the first nonMuslim country to tap the growing pool of Islamic investments, which is set to exceed USD1 trillion by 2014. GFI
For more info on this conference visit www.euromoneyconferences.com/qatar
Islamic Banking Bahrain and Qatar
COOPERATION IN BANKING SECTOR Qatar and Bahrain enjoy growing cooperation in banking sector.
I
ncreasing cooperation between Qatar and Bahrain is creating new opportunities for financial institutions in both countries, according to banking experts preparing for a major conference in Doha in December. Qatar is expected to post 6.8 percent year-on-year real GDP growth into 2014, thanks to large infrastructure projects, population growth, and economic diversification, according to a recent report from QNB Group. The country’s financial dynamism is drawing international and regional attention. Qatar was upgraded to “Emerging Market” status by both S&P Dow Jones Indices and Morgan Stanley Capital International, set to take effect in 2014, increasing its importance in the international investment portfolio. Alongside its growing international profile, Qatar is also strengthening its bilateral links with Bahrain. Major investment projects, such as the longawaited causeway to link the two countries, have received fresh impetus in recent months, opening new areas of opportunity for banks and financial institutions. Equally, Bahrain and Qatar’s shared drive to grow the Islamic financial sector – with Qatar’s Islamic banking balance sheet set to be worth more than $100bn by 2017 – creates new impetus for cooperation between financial
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institutions in the two nations. Reflecting this growing interest, The Euromoney Qatar Conference, which runs from 10-11 December, has seen a high number of registrations to attend from Bahrain in 2013. Khaled Al Fakih, Secretary General of the Bahrain-based non-profit Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) will deliver a keynote address on “Islamic Capital Markets and Economic Growth”. Richard Banks, Director, Euromoney Qatar Conference, said: “Thanks to its combination of strong economic growth and stable financial environment, Qatar has become an important country for institutional investors and debt markets to follow. The recent changes within the country’s investment strategy and regulatory framework have increased the pressure for banks and financial leaders to get closer to the realities on the ground, which is driving interest in this year’s Euromoney Qatar Conference.” The Euromoney Qatar Conference will serve as a major platform for global players to learn more about Qatar’s financial sector and speak to the new generation of leaders and decisionmakers in attendance. A wide variety of international financial organisations will be attending the Conference, including the United States Federal Reserve System,
Bahrain and Qatar’s shared drive to grow the Islamic financial sector – with Qatar’s Islamic banking balance sheet set to be worth more than $100bn. United Kingdom Debt Management Office, International Islamic Liquidity Management Corporation, International Monetary Fund, International Capital Market Association, International Finance Facility for Immunisation, McKinsey & Company, BCA Research, and Pacific Alternative Asset Management Company. The Euromoney Qatar Conference is being co-hosted by Qatar Central Bank, and held under the patronage of H.E. Abdullah bin Nasser bin Khalifa Al-Thani, Prime Minister, State of Qatar. GFI
To register or for more information on the Euromoney Qatar Conference, visit www.euromoneyconferences.com/ qatar.
Islamic Asset Management Islamic Banking
ISLAMIC ASSET MANAGEMENT Lack of institutional investors is the “key challenge” facing Islamic Asset Management sector.
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homson Reuters Global Islamic Asset Management Report 2014 provides insights into the development of the sector, highlighting key milestones reached this year, critical challenges to growth, as well as proposed solutions to further develop the Islamic asset management sector. The results are based on a survey that targeted both investors and asset managers.
Key findings include:
The number of funds has doubled since 2007 to 786 globally 2013 saw the highest number of fund launches in four years, and the lowest number of liquidations since 2007 Assets under management (AUMs) of global funds stand at just over USD 62 billion, with mutual funds accounting for the bulk of this amount, with over USD 46 billion However, AUMs have only increased marginally over the last few years, and declined by 1.7% in 2013 The sector is primarily retail driven, with only 20% of AUMs derived from institutional investors
The underdevelopment of Takaful operators and pension funds in Islamic countries has a knock-on effect on the Islamic asset management space. Increased regulation was led by smaller asset managers exiting the market
Russell Haworth, Managing Director, Middle East & North Africa, Thomson Reuters, said: “The Islamic asset management space continues to lag behind in terms of growth compared to Islamic banking.” Dr Sayd Farook, Global Head of Islamic Ca pital Markets for Thomson Reuters, said: “Attracting institutional investors is seen a key requirement for the growth and long-term sustainability of the Islamic asset management industry. Despite the lack of institutional participation, we see positive signs, such as the development of pension assets in Islamic countries. “In the face of negative headwinds, industry players are taking innovative approaches to attract mainstream investors. One such tact is to target socially responsible investors. We believe that incorporating environmental,
Despite the lack of institutional participation, we see positive signs, such as the development of pension assets in Islamic countries. social and corporate governance principals would help Islamic fund managers capture the estimated USD 33 trillion market of socially responsibly investments, particularly in Muslim minority markets.” GFI
The Islamic Asset Management Report 2014 was launched at last month’s Global Islamic Economy Summit in Dubai. For more information visit www.globalislamiceconomy.com Gulf Insider December 2013
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Islamic Banking EY
NEXT STEPS FOR ISLAMIC BANKING Gulf Insider talks to Ashar Nazim about tackling major challenges and taking the Islamic finance industry to the next level.
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shar Nazim is an EY Partner in Bahrain and the Head of the EY Global Islamic Banking Center, headquartered in Bahrain. The Global Islamic Banking Center was started in 1998 and since delivered on 300 unique projects and won several awards in terms of thought leadership. You have written previously about how one of the outcomes of the Arab Spring could be a revitalization and growth of the Islamic banking sector. What are the current opportunities for Islamic Finance in the region? Currently, there are four key themes
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Gulf Insider December 2013
which are impacting the development of Islamic Banking across markets. The first one is the ongoing rebalancing of the world economy as well as the eastward shift of both trade and GDP growth. Essentially, the shift is going toward a number of markets where Islamic Finance is important and where they have a large Muslim population. As this continues, Islamic finance will be a strong beneficiary. The second theme is that there is presently a fundamental review of financial regulation across markets. A number of new markets are introducing Islamic banking regulations
Ashar Nazim
EY Islamic Banking
to allow existing banks to open and for new banks to introduce Islamic financial services. Third, reforms and regime changes have and are occurring in a number of developing markets, which are helping Islamic Banks to be established in those markets. One example is Libya. The fourth theme is relevant for both conventional and Islamic banks, and that is the use of mobile technology for banking solutions. What we have seen is that this is considered as the most disruptive innovation that will reshape the way baking business is done across markets. What does the sector growth look like for 2013? What we have seen recently is that the anticipated pace of growth of Islamic Finance in many of these markets is not what the industry analysts had previously suggested. So when we look at the overall size of the Islamic banking assets (referring to Islamic Banking assets with commercial banks globally, which includes Islamic banks and Islamic banking windows of conventional banks), our research suggests, by end of 2013, it will gross USD 1.7 trillion. This suggests an annual growth of roughly 16% over 5 years, on average. This is a noticeable slowdown for an industry that has previously grown around 20% and more. The reason for the slower growth is the continuing economic and political shocks that we see in some of the frontier Islamic markets. Political volatility is still impacting the overall business environment. As a result, many of these markets have not seen economic improvement as anticipated.
increased operational complexity. When we speak to leading Islamic banks, we see they have reached a point where they have to pause and decide how to initiate large scale operational transformation in order to go forward with sustainable growth. This was highlighted in Ernst and Young’s 2012 report and many CEOs have confirmed that this is the major theme on their agenda and is expected to continue for the next 12-15 months. Beyond which, we would then expect the banks to accelerate growth pace once again. Thus, the growth rate is expected to stay moderate in 2014, around 16%. On the positive side, Islamic banking assets in GCC were 452 billion USD in 2012. By end of 2013, we expect that number to cross 515 billion USD. That is an overall picture which illustrates that the vacuum left by global banks in GCC
mainstream, they are starting to see a pushback from larger conventional giants. What that means is they will have to improve their operations before they can mainstream in a number of these markets and successfully compete with conventional banks. Quality of growth becomes very important. Additionally, there are areas that Islamic finance has not been able to fully capitalize on. Islamic banks still remain very localized. Very few have a meaningful presence in more than 2 or 3 markets. They are missing out on a huge opportunity, which is trade and trade finance. The global balance of trade is shifting in favor of emerging markets. Ten of the 25 Rapid Growth Markets, have large Muslim populations and thus form a natural market for Islamic finance. Thus connectivity is very important. There will be opportunities to grow but for that you need connectivity, stronger regional franchise, and Islamic banks are currently missing out on this opportunity by being so localized.
The global balance of trade is shifting in favor of emerging markets. Ten of the 25 Rapid Growth Markets, have large Muslim populations and thus form a natural market for Islamic finance.
Do you think that the Islamic Banking sector has taken advantage of the opportunities of the 2008 global financial crisis? That is, the opportunity to provide new and innovative banking solutions to replace the ones that have left a void? For many of the leading Islamic banks, they have been doubling in size every 3-4 years, which comes with a cost:
has contributed a powerful growth story. From your research, what is the most important thing that will take Islamic banking to the next level? What we are hearing from the CEOs is that the industry is now transitioning to the next phase of development. Previously, the success was measured by size of the assets. However, going forward, the transition is less about growth but more about the quality of growth. This means understanding and servicing existing customers better. Previously, Islamic banks were servicing a segment which was more Sharia sensitive – individuals with a preference for sharia compliant banking. That segment has now been exhausted and as Islamic banks are looking to
Do you see Bahrain as continuing to be a leader in Islamic Banking? Bahrain is an interesting market, as it is one of the intellectual capitals of Islamic finance world and has a number of standard setting bodies. Because Bahrain has a number of both conventional and Islamic finance institutions (more than 400), the country has built a powerful talent community and has been an important reference centre of the global indutry. However, as new competition springs up, it will create healthy competition and challenge Bahrain to take things to the next level. We also see Islamic banks in Bahrain preparing for the next level of competition and building scale to close the gap with conventional. Globally, the top 20 Islamic banks are roughly one third the size of their conventional peers. To compete, they must either grow organically or go through consolidation and acquisition, which we are seeing a fair amount of in Bahrain. As this continues, it will create stronger and bigger institutions to create leadership in the region. GFI
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Iran Nuclear Program
THE IRANIAN DEAL:
WHAT THE BIG SIX REALLY HAVE TO GAIN
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ast month, the world changed. Officials from Iran made a deal with six countries (the US, Russia, China, England, France, and Germany)—in exchange for suspending the world’s sanctions on Iran, Iran will curb its nuclear weapons program. Though it’s only a six-month interim agreement for now, it’s an important first step toward bringing Iran economically closer to the rest of the world. This is, by any standards, a historic deal (or a historic mistake, according to Iran’s archenemy Israel): the United States and Iran haven’t had diplomatic relations since 1979. But the more important question is “Why?” Why did Iran suddenly have this change of heart after pounding the table and claiming that enriching uranium is an inalienable Iranian right? Is it really as the media portrays? Did the tough American and European sanctions placed upon Iran finally bring the country’s leadership to its senses? As much as President Obama would like you to believe that, we think the answer is far more complicated. All of these countries have some sort of agenda that they are pushing—and this deal is going to give them exactly what they want. And if you think that this is about “Middle East stability” and “world peace,” there is a bridge I would like to sell you. There is only one thing on the minds of these countries: oil. It is pretty easy to understand why the Chinese are interested: with the one-child policy 28
Gulf Insider December 2013
being relaxed and a constantly growing population, there is no doubt that they’re looking all around the globe for secure energy supplies. Given that Iran has one of the world’s largest reserves of both oil and gas, it’s the perfect location for China to be drilling. When Iran begins to open up to the world, the Chinese petroleum companies will salivate at the opportunity to unlock some of the largest hydrocarbon fields in the world. While it is true that they’ll have to compete with companies around the world, the Chinese are known for their deep pockets and willingness to acquire energy reserves regardless of the cost. What does Europe get? If Iran is able to start selling oil on the global market again, Europe gets something crucially important: a source of non-Russian oil. Russia currently has a stranglehold on European oil and gas supplies. Though Europe is ramping up its own domestic production, it cannot happen overnight. In the meantime, Europe depends on imported oil and gas… and believe it or not, Iran provides a better alternative to the heavy hand of Putin. Because Iran just wants money for its product, but Putin wants control—both political as well as economic. The Americans also got something great from the discussions: the continuation of the petrodollar. With a détente around the corner, America can monitor Iran’s activities and quietly make sure that the sale of this oil will be denominated in US dollars. The fact that Iran has constantly tried to shift away from the US dollar for petroleum
Nuclear Program Iran
Why did Iran suddenly have this change of heart after pounding the table and claiming that enriching uranium is an inalienable Iranian right?
trades has always been a thorn in the side of the US government. By “working closer” with Iran, America will in fact be able to better keep tabs. But the biggest winners of the day may have been the Russians and the Iranians—because they can now get access to the biggest prize of all. There’s no doubt that Russia and Iran are close: due to the sanctions, much of Iran’s military is Russian-built, and there is a great deal of cooperation between the two countries on the oil and gas front. If Iran does indeed open up its oil and gas fields and invites the multinationals in, it means that the country will have access to the multinationals’ technology—the technology to unlock not only the vast conventional potential
that Iran already has… but also the unconventional oil and gas that could dwarf Iran’s current reserves. We are talking about access to not just billions, but even trillions of barrels of oil. America, rather than Russia, leads the world in unconventional oil and gas production. But more importantly, they lead the world in the technology it takes to unlock the complicated geology that lies beneath the Earth’s surface. The ability to extract vast quantities of oil means energy independence or, in the case of Iran, even more oil and gas available for exports and to fill the country’s coffers. So by inviting “the Great Satan” inside its borders, Iran will be able to acquire this valuable technology and begin to apply it.
And once everything has been built, it would only take a flick of a pen to evict the American companies. The Russians would also be able to take this technology and apply it within their own borders… so that they can begin expanding their hydrocarbon empire beyond the boundaries of Europe. It is clear the biggest loser in this negotiation is Israel. There is nothing they can do but stand by and watch. But Israel won’t show its cards until the sixmonth treaty expires. The key to how this plays out for the US is how Iran acts the day after the sixmonth treaty is over. Will Iran continue under the same terms? If not, will Israel tolerate it? GFI
Gulf Insider December 2013
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Feature US Strategy
DESERTED IN THE DESERT?
The Gulf is at this time a place of some confusion, where ‘partners’ of the United States smile a lot in public but grizzle behind closed doors. By Nicholas Cortes
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he ‘deal’ on nuclear matters with Iran seems to now be the dominant factor in the US’ whole Middle East policy, possibly in an effort to shore up a ‘strategic flank’ at a time of change and uncertainty with conflict and mayhem in Iraq, Syria, Yemen, Egypt, Libya and Tunisia looking almost intractable. It has probably judged that in countries like Egypt, there is no winner, whether they support Mursi or the military, and that religion has polarized along pro and anti Mursi lines which will not be easily undone. Delvers into ‘grand strategy’ claim the US is at the cusp of a change of direction as to where its long term interests really lie and contend that maybe it is time to fold the tents in the Middle East and simply slip away to areas where their strategic interests are looming larger. In that context, shoring-up the relationship with Iran makes sense. In Afghanistan they are looking for some sort of Nixonian face-saving exit of “peace with honour,” with probably tacit acceptance that it will be the same outcome as they eventually got in Vietnam, particularly if Pakistan and the Taliban come to an accommodation. There have already been lots of glowing phrases about creating democratic institutions and winning the war on terror and continuing ‘support’ for the not much liked President Karzai (Or Iraq’s PM, Maliki, for that matter), because they have little choice. But in private they are probably quietly saying to the regime, “You’re on your own now, Bud.,” (as they once told Iraq). And we are under no illusion as to what that means!
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While for the moment, the US will remain ‘multi-focused’ on all parts of the globe, no Presidential candidate will want to go into the 2016 campaign with the burden of Americans being dragged into Middle Eastern turmoil, whether by design or by stealth. Increasingly more countries that have relied on US ‘moral’ as well as real assistance – especially in heavy lift capacity, intelligence dissemination, sophisticated weaponry and communications equipment, may find themselves having to do the real grunting in terms of their own security with a little help from their friends, as now. There will still be sales of military gear of course, for that is essential to US industry, but just don’t expect a lot of US muscle in helping out. Dependence on supplies of oil from the Middle East has helped shape greater US strategic involvement in the region for the past 40 years. Hence regional commitment, “boots on the ground.” But now the whole ball game has changed and emboldened the US to reassess where its major interests will now lie. Not only does the US have its own newly exploited oil reserves, but there has been significant movement into alternative energy as well as a focus on more fuel efficient vehicles, aircraft, and a plethora of energy saving devices. Moreover, regional suppliers north and south of the US border, also have an abundance of the stuff. Brazil too is supposedly the custodian of vast supplies of oil, and Venezuela cannot remain under the clones-of-Chavez mantle forever. Then of course, Asia is host to some
US Strategy Feature
There will no longer be the need for the US to come to the aid of ‘allies,’ beyond words and platitudes in international forums such as the recent Manama Dialogue. significant suppliers of oil as well, and while there may be some strategic geographic ‘choke points’ like the Straits of Malacca, none of the custodians are likely to be as turbulent or as threatening as the folk who occupy one side of the Straits of Hormuz. There will no longer be the need for the US to come to the aid of ‘allies,’ beyond words and platitudes in international forums such as the recent Manama Dialogue attended by the smoothly reassuring Defence Secretary Hagel. But in real terms, many countries in the region will also understand, “You’re on your own too, pal.” Last month, the US held an exercise to deal with the ships of the 5th Fleet without having to work through the fleet communications base in Bahrain. Everyone was told, “It is just an exercise, guys, to see if we can be fully functional in an emergency situation.” Prudent indeed, but if relations with Iran are ‘resolved’ and withdrawal from Afghanistan is complete, a leaner military will have little need for assets in “troublesome Bahrain” when it has sophisticated equipment in far wealthier and less troublesome Qatar. Sure, Israel – which an American diplomat recently addressing a broad international gathering in Qatar said was, “America’s only friend in the region,” (and they wonder why many Arabs regard them as ‘on the nose!’) will need to be mollified and given ironclad guarantees on Iran. Qualitatively, that relationship will not change for the Jewish lobby in the US will simply not let it, whether the President is Republican or Democrat. As for Saudi and Gulf unhappiness, well it is something that they will just have to live with. If the pundits are right, we are at the birth of the Asian century and while there will be much to the Asian tigers, it is the Chinese dragon that compels the closest attention. Oh, the US will keep the campfires burning with all its ‘soft power’ diplomatic niceties, trade and show-the-flag ships visits, for commercial interest and access will always service bilateral relationships and investment. But the need to show a permanent physical military presence or even a tacit political backing for guaranteed access to oil will have lost its strategic draw in the light of changing political and economic circumstance. GFI
The author is a former senior diplomat and political adviser with extensive international experience in strategic and parliamentary affairs, and is currently working in Bahrain. Gulf Insider December 2013
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Bahrain Property
BAHRAIN REAL ESTATE Bahrain benefited from a positive report prepared by Fitch Ratings which affirmed the country’s established long term ratings. This now stands at ‘BBB’ with a ‘stable outlook’.
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Property Bahrain
When combined with the significant amount of new space that has entered the market within the last year, we find letting space in this area to be a significant challenge at any price.
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he report stated that ‘the normalisation of oil production, after technical problems, should allow growth to strengthen to 5.5% in 2013. Capital spending, manufacturing investment and a further recovery in tourism will support non-oil growth of around 3.5%’. The Government of Bahrain subsequently reported annual GDP growth of 5.3% (adjusted for inflation). Analysts polled by Reuters in September forecast GDP growth of 4% by year end 2013. As usual, Q3 was relatively quiet as the influence of both summer and Ramadan took hold. With most people away, there was little activity in any sector although land transactions did continue to move along aided by the launch of several high profile projects. Seafront land plots at Dilmunia were snapped up in a limited launch in August and land sales have continued at a brisk pace at Diyar Al Muharraq. It remains to be seen whether this is the result of speculator activity. The ongoing high profile problems associated with large-scale, incomplete apartment projects in the Kingdom, means that investors have reverted back to ‘safer’ land trading activities despite the fact that in many cases land prices have now moved well beyond their economic value. This has knock-on implications for private sector developers, particularly those attempting to provide pricesensitive housing solutions. The sheer investment liquidity that exists in the market allied with the lack of ‘trusted’ real estate products resulted in an increase in real estate trading of almost 58% in the first half of 2013 compared to the first half of 2012. The value of real estate trades in the first half of 2013 was just over BD500 million (US$1.325 billion), of which over
BD300 million (US$800 million) was transacted in the second quarter alone. The change in the Saudi weekend has had a significant impact on the Bahrain hospitality sector which now has two nights to sell to Saudi guests rather then the previous one night. The Saudi weekend has moved from Thursday afternoon and Friday, to Friday and Saturday. This means a significant increase in room sales, particularly on Friday nights. On the first weekend of the changeover, Bahrain had the highest number of causeway visitors ever recorded.
Office Market
Once again, the combination of the summer months and Ramadan have meant a marked slowdown in activity in the commercial office markets of Northern Bahrain. The relocation activity of ministries has slowed, although we are aware of several that continue to mull their options in negotiation with landlords and agents. The well-documented poor parking and access issues that define Diplomatic Area continue to make prime space in the area very difficult to let. When combined with the significant amount of new space that has entered the market within the last year, we find letting space in this area to be a significant challenge at any price. The area simply does not function properly and there will have to be some significant actions taken by the responsible government departments if this area is ever to be commercially attractive again. Even previously occupied space (which is relatively attractive to those seeking to minimise capex/fit-out costs) is drawing very little interest and in light of this, at least one of the new office buildings has undertaken a complete change of use to five star hotel property. In Seef District, the increasingly cost-conscious potential office tenants are seeking Gulf Insider December 2013
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Bahrain Property
smaller spaces that have either been previously used (and are therefore fully fitted out) or fitted or part-fitted space. There has been such a high level demand for sub 100m² offices that are wholly or partially fitted out, that we have seen a small upward creep in rental rates in this sector. Commercial property sales are increasingly of interest to investors at yields of between 7% and 9% but actually finalising deals has proved slightly frustrating as both buyers and sellers await the next positive market movement. Given the price-sensitivity of the prime office market at present, the few iconic properties that exist in Bahrain are currently the subject of very little interest and continue to operate on marginally viable rental rates or suffer significant vacancy rates.
Light Industrial/Warehousing
In sharp contrast to the commercial office market, the light industrial/ warehousing market is extremely buoyant, particularly in the more recently established areas such as BIW, BIIP and Hidd area generally. There has been significant interest and investment stimulated by the activities of the Economic Development Board (EDB) from international entrants to the market. We have recently concluded deals for investors from Singapore, Malaysia, India and Spain and have ongoing discussions with a number of others. Even locally-based firms in this sector are increasingly migrating into these emerging industrial districts as they seek to remove themselves from the more troubled areas where the ongoing low-level disruption to business is problematic for them. 16 new projects were approved at BIIP alone in the first half of the year, bringing the aggregated total of planned projects for the area to 96. This represents investment commitments of BD500 million (US$1.325 billion) to the Kingdom together with employment opportunities for 10,000. Naturally, the closure of plants and warehouses in the existing industrial/ warehousing areas where local people are seeking more employment opportunities serves only to exacerbate their situation.
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Hospitality Sector
The change in the Saudi working week, together with few commercial development alternatives has resulted in a surge in the development of ‘luxury’ hotels. Five new luxury hotels are scheduled to open in Bahrain by the end of Q1 2014, adding to the 14 already operating in the Kingdom. The new hotels include The Four Seasons Hotel and Resort, Bahrain Bay, the Ramee Grand Hotel and Spa in Seef, the Renaissance on Amwaj Islands, the Rotana at Bab Al Bahrain and the SwissBelhotel International also in Seef.
Residential Market
The characteristics of the residential market have shifted through 2013 in response to changes in employment
Sales prices at Riffa Views have now increased by 20% to 25% over the past two years, although prices are still well below the peak level achieved in 2008. contracts which have resulted in a shift in the employee base and the family status of new employees. Similar to Dubai almost a decade ago, Bahrainbased firms are increasingly offering allinclusive contracts. These typically have the impact of shifting employment away from families with significant financial commitments in terms of flights, school fees and accommodation, towards bachelors with significantly fewer costs. This has had the greatest impact in the north-west area of Bahrain which has traditionally offered family villas on residential compounds with a range of services and facilities. The fall in demand for family accommodation accompanied by increasingly congested traffic access points, has resulted in falling rental rates for compound villas in this area.
During 2013 rental rates have dropped by around 10% to 15% despite demand from those who work in the Eastern Province of Saudi Arabia but prefer to have their families schooled and resident in Bahrain. In Seef District and on neighbouring Reef Island, significant new apartment supply has entered the market in Q3 2013 but demand in this sector is strong and these locations are well-located and popular destinations for those who want to be close to the prime waterfront, retail and hospitality offerings of these two areas. Absorption of rental apartments continues to be rapid and despite the large volume of new supply, rental rates have remained steady as new units are absorbed by the rapidly increasing bachelor/singles/couples market. Apartment supply in Seef has grown less than on Reef Island through 2013, and as demand growth continues but supply growth eases we expect to see small rises in rental rates in both locations over the coming year. The predominant property type on Amwaj Islands remains apartments, and this area continues to be popular with the non-family sector. Despite this the small number of villas available for rent are attracting increasingly higher rates and occupancy is virtually 100% in this albeit small market sector. Apartment units are more plentiful on Amwaj and new supply has continued to enter the market through 2013 although most of this has been very rapidly absorbed. Rental rate increases have been moderated by the volume of new supply but there have been small rental rate increases evident at the new properties. The similarly apartment-dominated area of Juffair has also experienced an increase in demand generally through 2013, in line with the increase in non-family expatriate employees in the Kingdom. However, the demand increase has been more modest than in Juffair and prices have remained broadly steady in the existing supply. Some of the new properties such as Fontana Towers, have entered the market with a completely new level of in-house facilities and services which have been extremely well-received by the market to date and have generated strong interest
Property Bahrain
and absorption together with increasing rental rates. The centrally located areas of Adliya and Mahooz remain popular among young expatriates who prefer ready access to the restaurant and nightlife available in Block 338. Stock in this area is generally ‘ageing’ by nature and covers a very wide range of quality and pricing but demand remains firm and prices and occupancy stable. There are several new apartment projects in the development pipeline and these are likely to provide significant additions to supply and an upward shift in quality and pricing. Riffa Views is undergoing a shifting dynamic as the market separates between buyers and renters. Buyers and investors in the project are increasingly Bahraini, while renters continue to be a mix of expatriates and Bahrainis who prefer the quiet, golf and leisure oriented location away from the more troubled areas of Bahrain. Consistent with previous quarters over the past two years, sales prices have continued to show small upward movements particularly in the smaller three and four bedroom categories and rental rates have remained steady despite the decline in expatriate families coming to live and work in the Kingdom. Sales prices at Riffa Views have now increased by 20% to 25% over the past two years, although prices are still well below the peak level achieved in 2008. The pricing of all residential units in Bahrain remains fundamentally affected by rampant land price speculation which has made private development significantly less affordable and the damage to the Kingdom’s real estate reputation caused by failed off-plan projects such as Marina West, Villamar and Amwaj Gateway. Buyers are increasingly drawn to projects which are completed with all infrastructure and services in place. As primary home projects such as Riffa Views and Amwaj Islands mature, with growing communities and established hospitality and leisure offerings, they will likely enjoy further growth, particularly in the sales sector. GFI
Report provided by CBRE - cbre.com | www.cbre.bh
Gulf Insider December 2013
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Dubai Polo
THE DUBAI POLO GOLD CUP SERIES 2014 IN ITS FIFTH YEAR
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he Dubai Polo Gold Cup Series 2014 (Dubai Open) 16 Goal Handicap is the most prestigious international polo tournament in the in Middle East, Asia and Africa. This is the fifth year in a row that the event will be held. It takes place at the Dubai Polo and Equestrian Club at the Arabian Ranches in Dubai. The tournament has grown in tandem with the city of Dubai and has quickly gained popularity and found its place on the Polo world stage. In 2012 the Dubai Gold Cup Series was recognized by the World Polo Tour (WPT). With its mix of top-class sportsmanship and glamour, it has earned a reputation as one of the most prestigious events on the international polo calendar and always attracts a high profile crowd. The series is split into two tournaments that will start next year with the Silver Cup, beginning 1st February and ending 15th February 2014. The Gold Cup will commence on 24th February and will end on Nine teams have confirmed their 14th March 2014. participation in the Dubai Polo Played under Gold Cup Series 2014: the banner of Habtoor Polo Team the Hurlingham Patron Mohammed Al Habtoor Polo Association UAE Polo Team (HPA), the Gold Patron Her Highness Sheikha Cup is being Maitha bint Mohammed bin Rashid played according Al Maktoum to HPA rules and the provision of umpires will be managed under strict international supervision by the HPA.
Ghantoot Polo Team Patron HH Sheikh Falah Bin Zayed Al Nahyan
Bin Drai Polo Team Patron Saeed Bin Drai
Mahra Polo Patron Rashid Al Habtoor
Abu Dhabi Polo Team Patron Faris Yabhouni
Zedan Polo Team Patron Amr Zedan
Dubai One Polo Team Patron Rashid Al Bawardi
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Dubai Two Polo Team Patron Tarik Al Bawardi
Gulf Insider December 2013
GFI
IRAN’S SUPREME LEADER
IS A BILLIONAIRE
Iran’s Ayatollah controls business empire worth around $95 billion, exposes Reuters.
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he Reuters news agency has exposed that supreme leader Ayatollah Ali Khamenei controls a business empire worth around $95 billion, a sum exceeding the value of his nation’s current annual petroleum exports. The little-known organization, called Setad, is one of the keys to the Iranian leader’s enduring power and now holds stakes in nearly every sector of Iranian industry, according to Reuters. These include the finance, oil, telecommunications, and even ostrich farming sectors, among others. The company has essentially built its empire on the systematic seizure of thousands of properties belonging to ordinary Iranians, including members of religious minorities, Shiite Muslims, business people and Iranians living abroad, according to the report. According to the news agency’s investigation, Setad has amassed a giant portfolio of real estate by claiming in Iranian courts, sometimes falsely, that the properties are abandoned. The organization now holds a court-ordered monopoly on taking property in the name of the supreme leader, and regularly sells the seized properties at auction or seeks to extract payments from the original owners. Reuters reporters identified nearly 300 properties that Setad put up for auction in May alone, many worth millions of dollars. The organization’s full name in Persian is “Setad Ejraiye Farmane Hazrate Emam”, translated as Headquarters for Executing the Order of the Imam. The name refers to an edict signed by the Islamic Republic’s first leader, Ayatollah Ruhollah Khomeini, shortly before his death in 1989. GFI
Advertorial
Dr Temel Kotil, CEO – Turkish Airlines, Mr Attila Dogudan, CEO – Turkish Do & Co and Mr Hamdi Topçu, Chairman of the Board – Turkish Airlines say bon appetit!
GOURMET DINING AT 37,000 FT!
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urkish Airlines won the Skytrax Awards for the “World’s Best Economy Class On-board Catering”, in 2011 and “Best Business Class Catering”, in 2013. The airline has completely renewed its in-flight catering materials to further enhance customer satisfaction. New dishes have been created for all classes – Business, Comfort and Economy – by Turkish Do & Co, Turkish Airline’s
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Gulf Insider December 2013
catering partner. The new materials have a modern and elegant design, reflecting Turkish culture. Inspired by the Ottoman and Seljuq motifs, these new components have been designed according to new trends and are especially adapted to the special needs of onboard use. The new catering plan of Turkish Airlines was recently introduced, for the first time, on the Istanbul-New York sector, as a trial application. As of
today, the new concept is being used on flights to New York, Guangzhou, Jakarta, Cape Town, Buenos Aires, Sao Paolo, Hong Kong, Washington DC, Seoul, Johannesburg, Osaka, Kuala Lumpur, Los Angeles, Tokyo, Chicago, Shanghai, Ho Chi Minh City, Singapore, Toronto, and Houston. The new service concept will be applied across the network of Turkish Airlines in the next four months. GFI
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e c i o h C r It’s You
Al Sabaya Ice Creams made with wide variety of superior flavorings to create extra flavors for you to enjoy the ultimate ice cream experience.
Tel: +973 1740 0440 Fax: +973 1740 0456 P O Box 5599, Manama Kingdom of Bahrain E-mail: info@alsabayaicecream.com www.alsabayaicecream.com
HOTLINE: +973 330 599 82
www.facebook.com/alsabayaicecream www.twitter.com/alsabayabahrain Instagram: alsabayaicecream
Advertorial
THE ELITE GROUP December Promotions & Offers. Elite Crystal Hotel
Elite Grande Hotel
Christmas Activities Rock & Roll Kid’s Fiesta at La Cascada on 7th December, Saturday from 430pm to 730pm. BD3 net for kids and BD7 net for adult accompanied with kids.
Christmas Activities Candle Light Dinner at Julios Coffee Shop on Tuesday, 24th December. BD25 per couple. Christmas Brunch at H2O, Poolside on 25th December from 1030am to 230pm. BD6.9++ per person.
New Year Activities Couples dinner at La Cascada. BD25 per couple inclusive of buffet and soft beverages. 31st December.
For bookings call, Tel. +973 1736 0360
New Year Activities Candle Light Dinner at Julios Coffee Shop on 31st December. BD25 net per couple.
Elite Resort & Spa
For bookings call, Tel. +973 1756 5888
Christmas Activities Brunch at the Poolside on 25th December from 12:30pm onwards. BD15 net per adult and BD5 (above 6 years old). New Year Activities Buffet dinner at La Brasserie. BD25 per couple, inclusive of buffet and soft beverages. 31st December. Arabic Night at Noor Tent with traditional Arabic buffet. BD40 per person. 31st December.
For bookings call, Tel. +973 1731 3333
Elite Seef Residence & Hotel Christmas Activities Christmas Eve Dinner on 24th December from 7pm to 12 midnight at Oasis, Poolside. 4 course set menu. BD25 net per couple (2 packs). BD15 net per person (1 pack). Children as per consumption. Special Christmas Brunch Menu on 25th December from 12 noon to 4pm at Oasis, Poolside. BD25 net per couple with unlimited House wine. BD15 net per person (1 pack) with unlimited House wine. Children above 8 years BD10 net (1 pack). GFI
For bookings call, Tel. +973 1758 3388 40
Gulf Insider December 2013
Festive Orders
Turkey Orders Served with rice, meat & nuts stuffing, cranberry sauce,, new potatoes or mashed potatoes and spring vegetables. With a complimentary season offering of your choice. Prices as below: • ½ kilo plumcake or one Christmas pudding. BD 45. 5 kg good for 10 pax. • ½ kilo plumcake or two Christmas puddings. BD55. 7kg good for 15 pax. Yule Log – Vanilla/Chocolate. BD8 per log. Christmas Pudding 250 gm. BD 3.000 per pudding Christmas Plumcake - 1kg BD 7.5, 2 kg BD 14, 3kg BD20 Carrot cake - 750 g. BD 5.000 per cake Mincemeat (Nutmeat) pie 250g. BD3.5 Gingerbread Men -6 pieces of 20g each. BD2. Christmas Hamper. BD 15.000 per Hamper • 1kg plum cake • 1 Christmas pudding • 1 Mincemeat (Nutmeat) Pie • 6 pcs of Gingerbread Men • 1 Carrot cake
ain’s National r h a B f o m o Day Kingd All the management and staff of C.G. Arabia WLL, the holding company of Arabian Magazines, takes this opportunity to congratulate His Majesty the King Shaikh Hamad bin Isa Al Khalifa His Highness the Prime Minister Shaikh Khalifa bin Salman Al Khalifa His Highness the Crown Prince Shaikh Salman bin Hamad Al Khalifa and the people of Bahrain. We pledge our continuing support to the King, his Government and people, and look forward to our contributing to the prosperity of the nation both now and in years ahead.
P O Box 26810, Manama, Kingdom of Bahrain, Tel. +973 1782 2388 Fax. +973 1772 1722 e-mail: info@ArabianMagazines.com www.ArabianMagazines.com
Car Bentley
THE ALL-NEW FLYING SPUR
B
entley Motors unveiled the latest Flying Spur, in Bahrain. The new model takes the worldwide success of its predecessor to the next level with a stylish and athletic design, great power and state-of-the-art technology. Powering the new Flying Spur is Bentley’s renowned 6.0-litre, twin turbo W12 engine, coupled to a ZF eight-speed transmission which pumps 616 bhp and 800 Nm of torque.
Driver and back-seat passengers can interface with the car and the outside world through touch-screen infotainment, mobile connectivity including Wi-Fi, a Rear Seat Entertainment suite and a new hand-held Touch Screen. An eightchannel, eight-speaker audio system with Balanced Mode Radiators offers high quality sound clarity. The interior is luxurious and spacious with hand-crafted leather hides and wood veneers. The new redesigned front and
rear seats trimmed in natural premiumquality leather use a softer yet more durable hide unique to Bentley which is available in twelve different colours. The all new Flying Spur is available in 17 different colours. GFI
For your test drive visit the showroom in Khamees or For further information, call +973 1723 8822, 1723 8190 or visit www.ahmedzayani.com
Traditional Chinese Medicine and Acupuncture offers relief from chronic pain
Dr. Lucy Liu
Qualified practitioner in traditional Chinese Medicine and Acupuncture
n
ic is part of The Chinese Medical Clin up The Bahrain Medical Gro
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Gulf Insider December 2013
Medical treatment and Acupuncture • If you have lower back, neck or • •
shoulder pain... If you have high blood sugar or diabetes... If you have circulation or paralysis problems...
Please call Bahrain's leading traditional Chinese doctor and Acupuncturist,
Dr Lucy Liu on +973 3777 8922
Chiropractic & medical massage
If you suffer from stiffness in your back, neck, or with any of your joints/ muscles, James and Annie from our medical and chiropractic massage team will be pleased to help you. Please call the Clinic on
+973 1766 4088 to book an appointment
MeetUp Bahrain SOCIAL MEDIA GRAND EB Bridging the gap between social media and face-to-face communication. Enjoy a fun-filled afternoon with music and photography contests, photobooths and mini art exhibits.
Calling all individuals and groups to participate‌Free Admission!
Let’s get social... on 27th of December 2013
Sponsored by
Organised by
In coordination with Lucidfire
For more details visit...
www.facebook.com/meetupbh | www.MeetUpBH.com
VIVA Editorial
VIVA
Leading Through Community Development & Innovation
S
ince its launch in 2010, VIVA Bahrain has been at the forefront of transforming the communications landscape in the country not only in terms of technology, products and services’ innovation, but also in their social commitment to the community. The company’s success can be attributed to the trust and support of the local community and is in line with its mission to ‘Make a positive difference to the local community’ by actively investing in the well-being of all its stakeholders. Corporate Social Responsibility has been an integral part of VIVA’s journey over the past three years. Through VIVA Jusoor, which is dedicated to the development and execution of longterm sustainable projects to benefit the local community, the company has undertaken programs to reach out to the community at large. For the extraordinary work performed under VIVA Jusoor, VIVA Bahrain garnered regional recognition with the Golden Order of Merit award in the field of social responsibility in
Golf Day for elderly the Arab world for 2013. The award was presented by the Arab Organisation for Social Responsibility in conjunction with the Tatweej Academy for Excellence Awards in the Arab region. Through the company’s internal volunteer programme, VIVA Hands, each and every employee is encouraged to
participate in local volunteering projects. VIVA has been engaged in a number of socially-impactful projects including blood donation campaigns, a car safety campaign and a tree-planting drive, to name just a few of the activities that have helped create lasting change.
World Teachers’ Day - Visit to Alia School for Early Intervention 44
Gulf Insider December 2013
Editorial VIVA
Students at the VIVA pavilion at Career Expo
For the extraordinary work performed under VIVA Jusoor, VIVA Bahrain garnered regional recognition with the Golden Order of Merit award in the field of social responsibility in the Arab world for 2013.
VIVA’s CEO at 3rd blood donation drive
A story-telling session organised by VIVA
Innovative Social Initiatives
VIVA Team at the Bahrain Marathon Relay
VIVA constantly searches for new, innovative ways to bring about positive change and has collaborated with the government and charitable organisations to support their efforts of community development. It has also been making noteworthy strides with its ‘Graduate Development Program’ aimed at nurturing and securing top notch Bahraini talent. This strategic initiative, which targets young graduates, reiterates VIVA’s confidence and trust in local talent and their potential to lead the company to a new era. Furthermore, it also offers young graduates unique career opportunities, together with high-end on-the-job learning opportunities and a well-thought development and growth plan. Through this and future similar initiatives, VIVA endeavours to assist in developing the Bahraini workforce of the future. GFI Gulf Insider December 2013
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Feature Profile
GulfInsider PROFILE
English comedy actor Anna Haskell Thomas, who is based in London but has become a regular visitor to Bahrain.
W
hen did you first act? I have been training for 5 years and started doing Drama from a very young age. I made sure I was involved in every school production possible. What’s your latest project? I recently set up a small theatre company with Verity Hicks, a good friend of mine and fellow actor, called Plumpkin Theatre Company. We specialise in physical, theatrical clowning and as a female duo are quite unique. We have devised an hour long show, which we performed in London earlier this year (and for fun have just done a few mini gigs in Bahrain). The show is called ‘Two heads are better than one’ and centres on the relationship we all have with that one person you can’t live with but can’t live without.
Any future plans? I am focusing a lot on Plumpkin in the near future, we are presently making plans to secure performances in and around Bahrain next year with our existing show. Bahrain has an array of festivals and events that we really hope to be a part of. I would love to do something at the new National Theatre, I
think it will be a great addition to Bahrain’s arts community and will hopefully mean more theatre shows are accessible to the public. What do you do to relax? I love to read, I find that very relaxing. And sleeping – I love to sleep. GFI
What’s your favourite form of acting? I love anything Comedy, and I absolutely love theatre. I don’t think there is anything more exciting for an actor than the thrill of being on stage. But I do also enjoy screen acting, I don’t think you can really compare the two, they’re very different. If not an Actor, what other career would you love to do? Before I chose to pursue acting I was set on becoming a detective – maybe I will get cast as the next Miss Marple! You have lived and travelled all over the world, so where is your favourite? There are still so many more places I would love to visit but at the moment I think I would have to say France. We lived just outside Paris when I was younger; I just think it’s beautiful. I love the French language and would love to live there again. However it’s not quite as warm as I would like, that’s where Bahrain trumps it!
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Anna Haskell Thomas
Travel Sydney
A BRIEF GUIDE TO SYDNEY, AUSTRALIA Nick Cooksey last month went to Australia. This article covers his short stay in Sydney. Next month we go to Queensland.
S
ydney is the largest and most cosmopolitan city in Australia with a deserved reputation as being one of the world’s most beautiful and liveable cities, with history, nature, culture, art, fashion, cuisine, and design in abundance. And, if that all isn’t enough, this city is set against a beautiful ocean coastline with perfect sandy beaches. Sydney is home to great food and restaurant experiences. The quality of Australian meat and seafood is amazing. OK, so we eat well in the Gulf, but what I really noticed and appreciated was the freshness of everything, something we don’t always get to enjoy in the Gulf due to so much of what we eat having to be flown in from other parts of the world. While in Sydney I visited the world renowned Victor Churchill’s Butchers. Could this be the best retail butcher shop in the world? Well there’s nothing to match it in New York, Tokyo, Paris or London. This is where Australia’s Michelin Star chefs go to buy their meat.
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It might seem strange to recommend a visit to a butchers but it was an education and the establishment is geared for showing visitors around without any obligation or expectation of having to make a purchase; some of the ‘top shelf’ cuts sell for over $200 per kg. I also recommend a visit to the amazing Sydney Fish Market, the second largest seafood market in terms of variety outside of Japan. To see it at its very best arrive early (like 6am early!) Ok, so my trip was very much based
around food; I indulged myself at some of the city’s best restaurants such as Celebrity Chef Michael Moore’s super chic forty-seventh floor O Bar that rotates 360 degrees every hour, giving dinars an amazing birds-eye view over the city. So getting away from food, where else do I recommend visiting? Well, certainly the Royal Botanical Gardens. Opened in 1816, they are just east of the Royal Sydney Opera House and cover 30 hectares and adjoin another 35 hectares of parkland known as the Domain. There
Sydney Travel
I’d always imagined Bondi to be a long, endless beach, of the type you will find all over Australia, and was surprised to discover it much smaller.
Royal Botanic Gardens
are in excess of 7500 species of plants here. I recommend taking one of the official guided tours which will enable you to learn a lot of interesting things. I also recommend a visit to the famous Bondi beach. I’d always imagined Bondi to be a long, endless beach, of the type you will find all over Australia, and was surprised to discover it much smaller. It’s set in a cove and you can easily walk from one end to the other in under fifteen minutes. It’s also perfect for surfing. I’m sure if I’d grown up in Sydney I would have been a surfer because the environment is simply so conducive; but I grew up in London, and so I write. While at Bondi I enjoyed a tour of Sculpture by the Sea— the world’s largest annual free-to-the-public outdoor sculpture exhibition. While walking along the coastal path admiring some (though not all) the exhibits I was amazed and delighted to see migrating whales off the coast. Where else can you see that while looking at art?
Bondi Beach, Sydney
QT Sydney Hotel Sydney has many interesting museums, and many are free to enter including the Art Gallery of New South Wales and the Museum of Contemporary Art, both well worth a visit. One of my fondest memories of Sydney is of a spontaneous 4 am cab ride. We hailed a taxi to return to our hotel at the end of a long night out on the town only to change our minds and instruct the driver to show us the city. What followed was a glorious drive to many of the major landmarks such as the Queen Elizabeth Opera House, Kings Cross, Darling Harbour, and the Sydney Bridge. In many locations we got out and explored, unfettered by traffic or other tourists. Fantastic! Gulf Insider December 2013
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Travel Sydney
Royal Botanic Gardens
When to visit:
Sydney is comfortable to visit any time of year. Summer (December to February) is the best time to enjoy Sydney’s outdoor lifestyle. Autumn (March to May) is still warm with mild nights and is a good time for visiting attractions. Winter (June to August) is cool, but not cold. Average July temperatures are 17°C - 14°C, but at night it can be cold.
Where I stayed:
Pyramid Glasshouse,Sydney
Amora Hotel Jamison Sydney - Award winning 5 Star hotel offering two restaurants, two bars, and a dedicated “relaxation zone” incorporating a Day Spa, a heated indoor swimming pool, steam room, sauna, jacuzzi and gym. Situated a short walk from the historic “Rocks” and “Circular Quay”, the original settlement of Sydney from the early 19th century. Phone: +61 2 9696 2620 www.amorahotels.com QT Sydney Hotel - Recently opened, this crazy designer hotel is filled with all sorts of odd and unusual theatrical interiors and art collections. It’s restaurant offers great cuisine and it’s flamboyant staff create a world of theatrical indulgence in the heart of Sydney’s CBD. Phone: +61 2 8262 0000 www.qtsydney.com.au
How I got there:
I flew into Sydney via Abu Dhabi by Etihad Airways. Their Business Class cabin is exactly as advertised—the food was excellent, not just by ‘aeroplane food’ standards, service was impeccable, and the inflight entertainment was superb. The seats fully recline to a flat bed and so I was able to sleep most of the way and arrive rested and fresh, which was just as well as I was on the go for all the time I was there. www.etihad.com GFI
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Sydney Fish Market
Motor Show Dubai
2013 DUBAI MOTOR SHOW REVIEW Gulf Insider last month visited the region’s largest motor show.
E
xotic supercars were everywhere to be seen at the 2013 Dubai International Motor show, even a supercar made in the Lebanon and another in Dubai! Bugatti showed off its 1,200 bhp Grand Sport Vitesse, McLaren the P1, and Maserati their new GranCabrio MC, GranTurismo Stradale, and sixth generation Quattroporte (tested in Gulf Insider earlier this year). Porsche’s regional managing director Christer Ekberg unveiled the new, more powerful 475hp 911 GT3 and 520hp 911 Turbo, saying
Rolls-Royce
“Anybody can build a fast car; if you don’t care about fuel consumption [or] the environment, it’s very easy. But it you want to build a car with this kind of fuel consumption and emissions, you need to think through the whole process”, adding; “It’s not a simple thing. Raising power by 30hp and cutting emissions by 16 per cent needs a lot of work.” Rolls-Royce showed four models including the most expensive car that they’ve ever built - valued at more than US$1 million. Called the Celestial Phantom, it features diamonds in the doors and centre console - sold even
before it even arrived in Dubai to an unnamed buyer from the Far East. Bentley introduced the Shaheen which is based on its flagship Mulsanne and which comes ready upgraded to the Mulliner Driving Specification. Jaguar revealed their C-X17 “sports crossover”, a design concept based on real structural components that will feature on future Jaguar models. Jaguar’s head of advanced design, Julian Thomson, commented: “Reaction to the car has been very encouraging. It comes down to two things: people aren’t surprised we’re doing it and they’re able
Lexus
Bugatti
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Dubai Motor Show
This was the biggest and best Dubai motor show so far.
Lincoln
Maserati
Bentley
to identify it as a Jaguar. No one has asked why we’re looking at a crossover, so it seems it’s an acceptable direction for us.” Robin Colgan, MD of Jaguar Land Rover MENA, commented “Jaguar Land Rover has seen a remarkable transformation since the last Dubai Motor Show in 2011 when we first launched the Range Rover Evoque, a vehicle that now accounts for around one third of all Land Rover’s sold globally. Since then we have gone from strength to strength in the MENA region, with Land Rover sales up 38% for the first half of our fiscal year”. JLR also had on show the new Land Rover LR4 which has a new V6 supercharged engine, better fuel efficiency, and improved audio systems and driver assistance features. BMW’s i8 plug-in hybrid made its GCC debut. Made from carbon fibre bolted to an aluminium chassis, it’s expected to go on sale early in 2014. Toyota announced 15pc year-on-year growth with 123,737 units sold. The Land Cruiser continued to lead the segment in the Gulf with 35,634 unit sales during the period. Toyota Motor Corporation Middle
Volkswagen
Porsche
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Infiniti
Gulf Insider December 2013
Infiniti
Motor Show Dubai
Jaguar
McLaren
Aston Martin
Infiniti
Nissan
Infiniti showed their new Q50, powered by a 3.7-litre V6 328 bhp and 265lb ft of torque. This is the first new model since Infiniti’s ‘Q’ rebranding. East and North Africa chief representative Nobuyuki Negishi said; “The Corolla … lived up to its reputation selling 44,114 units to post a 22pc growth in the first half of this year in comparison to the same period last year. The new Hyundai HCD-14 Genesis, a stunning concept car, was just one of four regional debuts along with the i20 WRC, the New 2014 Centennial Limousine and the Veloster Turbo. VP and head of Hyundai Africa & ME Tom Lee said the Dubai motor show comes at a time when Hyundai’s profile in the Middle East has never been higher, befitting its position as the region’s number two car manufacturer. Nissan launches included the latest GT-R (tested in this issue of Gulf Insider) and a new Patrol Black Special Edition, limited to just 200 vehicles, which includes a Black Matte Exterior, Matte Black Front Grille, special alloy wheels and red leather seats. Infiniti showed their new Q50, powered by a 3.7-litre V6 328 bhp and 265lb ft of torque. This is the first new model since Infiniti’s ‘Q’ rebranding and is capable of zero to 100kph in 6.1 seconds. The Q50 will be on sale in the Middle East next Spring (more on the Q50 in this issue of Gulf Insider). This was the biggest and best Dubai motor show so far, having more of the world’s major car companies present. But there were few new launches. This was primarily a selling show - and new car sales in the region are up over 20 per cent this year! GFI
Editor’s apology; due to space we could only cover such a small number of cars on show - we could have easily devoted this entire issue to the motor show and still not had enough space to include everything we saw.
Gulf Insider December 2013
Jaguar
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Car Infiniti Q50
The new Infiniti Q50 being launched at last month’s Dubai Motor Show
WATCH OUT FOR THE INFINITI SUPERCAR When Infiniti invited Gulf Insider to watch the Abu Dhabi F1 with them, their plan was to change our perception of the Infiniti brand. Their plan worked!
I
nfiniti has a goal —to become the fourth luxury car brand after BMW, Audi, and Mercedes-Benz. So far, this savvy new motor company has been playing its cards just right. The Infiniti brand is relatively new on the scene, having only established itself in 1989 as the luxury arm of Nissan. Its competitors may, in some cases, enjoy a head start of a hundred years, but what Infiniti lacks in heritage it’s proving it’s able to make up for in cutting edge technology and innovation.
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For instance the Infiniti Q50 has a unique gearbox with diamond coating that took six years to develop. It uses steering technology based on a system until now used only on jet aircraft. It has a number of different steering ratios allowing a driver to define their own settings. While experimenting with aerodynamics for its Formula One team, it developed a self-healing paint, so annoying paint scratches on its road cars may well become a thing of the past. Infiniti stealthily adds these impressive
technological advances to its repertoire. They are also amongst recognised world leaders in hybrid technology. The hybrid version of the recently launched Q50 can hit zero to 100 in just 5.1 seconds! Of course here in the Gulf, where we enjoy the world’s cheapest petrol, we may be the last to embrace the hybrid version of this vehicle, but this is the way forward. It says a lot about the company to have refined the technology so much. The current Infiniti line up of 8 cars is
Infiniti Q50 Car
Infiniti is well aware that its biggest challenge will be to change existing loyalties and perhaps a few perceptions.
soon to be expanded to 12. As for their physical appearance, these cars are different. And that’s the whole point: they’re not supposed to look like your neighbour’s luxury car. With a boldlooking snout, smooth curves, subtle character lines and LED headlights seemingly modelled on human eyes, they present something fresh. Speaking of fresh, Infiniti has a strong partnership with Red Bull, itself a savvy and innovative brand. This has proved to be a mutually beneficial relationship; Red Bull Infiniti’s success at the Formula One over the last four years speaks for itself. Senior Infiniti execs tell us that
ultimately they plan to use their winning F1 know how to create a truly iconic Supercar. You may ask why they don’t build on their existing masterpiece, the Nissan GT-R, already the fastest car on the road. Their answer is that they want to create something totally original and unique. They also infer they may already have the name for their eventual road legal supercar and it’s the name displayed on their F1 cars – Q100. Infiniti is well aware that its biggest challenge will be to change existing loyalties and perhaps a few perceptions, but it seems to be up to the task. It has patiently been moving its pieces into
place. When Infiniti is ready to strike, competitors may find themselves blindsided if they are not careful. GFI
To test drive an Infiniti in Bahrain call YK Almoayyed on +973 17 732 732
Red Bull Infiniti F1 car
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Car Nissan GT-R
GulfInsider CAR REVIEW
Image:NetCarShow.com
2014 NISSAN GT-R Nick Cooksey goes to Japan to test Nissan’s bargain supercar on both road and race circuit.
N
issan is mostly known for affordable, practical, and reliable family cars, but that’s not all they do and their iconic GT-R brings the company a special sporting cache as it’s considered by many to be one of the best handling high performance cars that money can buy. This was my first ever opportunity to drive the GT-R, which started production ten years ago, and was excited that I would now be able to form my own opinion of its abilities not just on road but also on a race circuit – the Sodegaura Forest Race Way circuit just outside of
Tokyo, and on a perfect late November Autumn afternoon. Though I’d heard good things over the years about the GT-R’s awesome abilities, I knew little about this car and to be honest had never really took to its shape which reminded me of a Japanese impression of an American muscle car, but the more time I spent with this car, the more it grew on me. It has a commanding presence, and its big front air vents are not just for show either; they provide front downforce and optimal side airflow for when high speed driving. Push a button and the all wheel
drive GT-R with its hand built twinturbocharged direct-injected 3.8-liter V6 engines comes to life, offering 545 horsepower and 463 lb-ft of torque which smoothly and very effectively takes you from zero to 100 kph in a staggering 2.9 seconds. Advanced technology enables the GT-R to overcome its substantial weight and offer superb agility and truly breathtaking acceleration. Obvious improvements over the 2013 model include greater body rigidity, tighter shock absorbers, high-output injectors and enhanced turbocharger bypass – all things to improve overall handling. 20-inch alloy
The author of this article, Nick Cooksey, In addition to being publisher of Arabian Magazines is a jury panel member of the Middle East Motor Awards.
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Nissan GT-R Car
This is the real thing; a genuine supercar that’s the equal of many exotic European marquees costing many times its price. wheels at the front with specially designed road sticking Dunlop tires further add to the GT-R’s stability. There is a big improvement on the 2013 GT-R; I spoke with someone who told me he’s actually selling his one year old GT-R to purchase the 2014 model due to its overall superiority! On the track I found the GT-R’s steering to be precise and direct, and the big Brembo brakes performed perfectly despite much hard braking not just by me but those who had taken the car on hot laps before me. It’s a car that offers extreme performance while engineered to offer driving safety. With every hot lap around the race circuit I enjoyed the GT-R more as I got used to the car and the circuit, but I confess the car’s road abilities way exceeded my own which was aptly demonstrated when I sat as passenger and was driven by one of Nissan’s top drivers for a few circuits. Inside the cabin I felt cocooned by the comfortable and figure hugging leather seats. The instrument layout is stylish as is the chunky steering wheel, and there’s an 11-speaker Bose sound system with forward-facing woofers built into the rear seat center console, and a center-mounted LCD screen, designed by the same company that produces the Gran Turismo video game. The GT-R is really suitable for two occupants only as the rear seats are good only for small children and luggage. Driving it on the road I found it slightly unrefined at low-speed, but if you want a car with this sort of extreme power and agility it’s a small price to pay because, make no mistake, this is not just another sporty styled coupe with a big engine, this is the real thing; a genuine supercar that’s the equal of many exotic European marquees costing many times its price. GFI
To try the GT-R for yourself in Bahrain contact YK Almoayyed on +973 17 732 732 Gulf Insider December 2013
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Abu Dhabi Red Bull Infiniti
RED BULL INFINITI WINS AGAIN! Nick Cooksey, takes up a seat alongside the Red Bull Infiniti team at the Abu Dhabi Formula One.
T
here is a new joke among Formula One fans: the races have become boring because Red Bull Infiniti’s 26 year old German driver Sebastian Vettel always wins. But contrary to what it may appear like, the team does not simply waltz in and obliterate the competition. It owes its numerous podium finishes to an incredible amount of hard work by a large, dedicated and highly skilled and talented team behind the scenes. Gulf Insider was invited to join Red Bull Infiniti in Abu Dhabi in November and witness first hand the level of planning and expertise that goes into a successful race. One of the hallmarks of any true champion is the ability to make even the most difficult challenges seem effortless, and this is what Vettel, and the
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entire Red Bull Infiniti team, keep doing. Vettel was discovered and sponsored by Red Bull when he was just 12 years old. His first taste of F1 driving was in 2006. “It’s just way beyond anything I ever thought it would be. It’s just fantastic to feel the speed and the braking. It’s hard work. To hold an F1 car on the circuit is a job in itself. To drive quickly is another thing”, said Vettel at the time, adding; “you arrive at the corner at 300kph and brake unbelievably late. If you did it in your road car, it would be like just driving into a wall.” Being part of an F1 racing team is a glamorous but hectic life. This year there are 19 destinations around the world from March through to November. Red Bull Infiniti’s Paddock lounge is noticeably livelier than that of all the other teams.
The team has its own DJ who travels with them around the world, magnums of Mumm champagne flow freely, and the atmosphere is fun and convivial. We had visits from David Coultard and Mark Webber before the race, both of whom gave interesting talks, and I spent time chatting with all sorts of interesting people including team manager Christian Horner and a fellow guest David Hasselhoff (AKA The Hoff) of Knight Rider, Bay Watch and America’s Got Talent fame. From our privileged vantage point beside the starting grid we could see all the drivers making their final preparations and various VVIPs walking about, and it was hard not to get caught up in the excitement of the preparations for the big race. Infiniti brings its formidable technical
Red Bull Infiniti Abu Dhabi
One of the hallmarks of any true champion is the ability to make even the most difficult challenges seem effortless.
expertise to the table for F1. Its research and development department works tirelessly to come up with technologies that might shave perhaps a fraction of a second off of their lap time. While experimenting with aerodynamics for Formula One, engineers created a self-healing paint which we might see someday on Infiniti’s on-road vehicles. Infiniti has also appointed Sebastian Vettel as their Director of Performance, and take pains to point out that this is a real job, not just a title, and he is actively involved in making Infiniti cars the best driving cars that they can be. I was allowed into the team garage during the race and it was fascinating to see how the pit workers operate at lightning speed and with seemingly 100 percent accuracy. As expected, the Red Bull Infiniti team won. Vettel’s dominance was asserted with a seventh consecutive win in Abu Dhabi, having clearly learned from his mistakes the previous year when he came in third at the Yas Marina circuit. Even better, Red Bull Infiniti achieved a one-two, with team mate Mark Webber finishing the race in second position. It was also a special moment for me when they gave me the winner’s trophy to hold. GFI Gulf Insider December 2013
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Fashion BOGGI
GulfInsider MEN’S FASHION
BOGGI MILANO:
2013/14 FALL WINTER COLLECTION
A blending of past and innovation: this is what inspired Boggi Milano’s new Fall/Winter 2013-2014 collection. Always formal yet with a contemporary twist, this collection is born from the desire of refreshing a man’s wardrobe. 60
Gulf Insider December 2013
BOGGI Fashion
FNASL DOUBLE JERS SHIRT Open Collar BD45 each Boggi is available at: Bahrain City Centre - +973 (0) 1717 2316
Gulf Insider December 2013
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Technology Gadgets
Withings Pulse If you’re thinking, “No, not another digital trainer,” then hold that thought; Withings Pulse has some new tricks up its sleeve; this small 8g device can tell you your heart rate as well as your steps, calories burned, how well you’re sleeping and more! You can also Bluetooth to your phone and enjoy the free Withings Health Mate app. Access 14 days worth of data via an OLED screen.
Recon Instruments Jet Recon’s Android-based Jet features an accelerometer, thermometer, Wi-Fi, Bluetooth, GPS and ANT+ and is a great device to connect all your health monitoring devices. Step-up your fitness with Jet.
TECH PICKS
Your Ultimate Gadget Guide
HTC Gramohorn II Justin Wolter, after making a simplified version for the iPhone has now come out with the Gramohorn II for the HTC. The result of HTC’s ‘Here’s To Creativity’ campaign, the Gramohorn II amplifies whatever’s playing on your handset by up to 50 percent.
LUMOBack Technology has always made fitness regimes more interesting. Here is a belt that detects when you start slouching, and vibrates, making you sit up straight. Once you’ve used it for a while, sitting in a more upright position will be second nature. It comes with an app, too, which keeps an eye on your posture and activities. So whether you’re sitting, standing, walking, running or sleeping, it’ll tell you your steps taken, calories burned, and how well you’ve slept.
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11/26/13 4:48 PM
Art Painting
THE WORK OF MARIANNE PASMANS
T
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Gulf Insider December 2013
his month we feature the works of Dutch artist Marianne Pasmans, for who Bahrain has been home for 20 years and who we profiled last month in Gulf Insider. These are amongst her latest works that were commissioned by the newly opened The
Painting Art
Domain Hotel and have been reproduced as prints that hang in all rooms as well as in communal areas. Marianne is currently working on a future duo exhibition that will be a combination between her paintings and sculptures. She is also finishing a book of photography focusing on Bahrain’s declining plantations which she believes have a unique beauty worth capturing and preserving. GFI
To see more art by Marianne visit www.mariannepasmans.com
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Feature Last Word
17 THINGS
YOU NEED TO BE HAPPY Everyone wants to achieve happiness. The biggest factor holding us back from achieving this is our own selves. Here’s 17 things you need avoid to be happy. 1. Approval of others – Why should you care what other people think? If you are happy with the decisions you have made, then whose business is that but your own? Think of how much you could achieve if you stopped letting other people’s opinions dictate the way you live your life. 2. Anger/Resentment - This will eat at you from the inside. Learn how to make peace with those who have wronged you. This isn’t about letting the other person off the hook; it’s about alleviating the pain within you. He who angers you, controls you. 3. Negative body image - If you are comfortable in your own skin, and you are healthy, then that should be the only thing that matters. Do not let others tell you that you’re not beautiful because if you believe you are, then you are. 4. “Perfect Partner” - There is no such thing as a perfect partner, so throw your checklist out the window. Find the right person for you: one you feel comfortable with who accepts you for the person you are. 5. “Perfect Life” - There is no perfect life. Life is what you put into it, so if you are not willing to work hard and put in effort, you will most likely end up miserable. 6. The need to be “Rich” - Stop letting money be your motivator; find a career you are passionate about and immerse yourself in it. Appreciate the life you live, 66
Gulf Insider December 2013
be grateful for what you have, and make the most out of any situation. 8. Excuses - Excuses are only rationalizations that make you feel better about yourself for not doing something you want/need to be doing. You desire results? Stop making excuses, and start doing. 9. Thoughts of your Ex - This person is your ex for a reason. If you are going to think of him or her at all, try and think only about the lessons the experience taught you. Do not linger on any old feelings that will prevent you from being happy. 10. Stubbornness - The less stubborn you act, the more open you are to learning new things. I know it’s hard to admit, but sometimes you are wrong. 11. Procrastination - Live in the present, and get things done when they need to be done. Complete tasks as soon as you can as this will allow you more free time to enjoy the things you love. 12. Being judgmental - Why do people feel the need to constantly worry about other people’s lives? If we spent as much time worrying about our own behaviors as we do worrying about those of others, our lives would be a whole lot more meaningful. 13. Jealousy - Happiness is not having what you want but wanting what you have. Stop envying others. Learn to
appreciate what you have. Everyone’s life is unique. When we are jealous, all we do is bring negative feelings into our lives. 14. Insecurity - Happy people have high self-esteem. They accept who they are and radiate confidence and give off positive vibes. There is no reason to be insecure. If there are things you are selfconscious about, go out into the world and change them. 15. Depending on others for happiness - The only person you can count on 100% is yourself. Do not make a common unfortunate mistake and put your happiness in the hands of others. You need to achieve happiness on your own before you can find someone else to share it with. 16. The past - Stop living in the past! There is virtually nothing you can gain if you wallow in mistakes you have previously made. Take past mistakes as lessons learned, and move forward. You cannot wholeheartedly move on to a better future if you are constantly looking behind you. Things happened, and that’s that. Move on. 17. The need for control - You cannot spend your life stressing about things that are outside of your control. Relax, and let things play out naturally because they are going to anyway, whether you like it or not. GFI
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