OER - JULY 09

L E G E N D S O F T H E S I L K ROA D O N W W W. A M O UAG E . C O M

T H E G I F T O F K I N G S

2 July 2009

EDITORIALEditor-in-Chief HH Sayyid Tarik Bin ShabibEditor Mayank SinghPrincipal Correspondent Visvas Paul D KarraCorrespondent Malcolm X Crasta

DESIGNCreative Director Armando L. BuenaguaArt Director Sandesh S. RangnekarSenior Designer M. BalagopalanSenior Photographer Rajesh BurmanPhotographer Sathyadas C. NarayananCover DesignSandesh S. Rangnekar

Production Manager Govindaraj Ramesh

MARKETINGGroup Advertising Manager Jacob GeorgeAdvertising Manager Avi Titus

CORPORATEChief Executive Officer Sandeep SehgalExecutive Vice President Alpana RoyVice President Ravi Raman

Senior Business Support Executive Radha Kumar

Distribution United Media Services LLC

OER Presentations – Dossier – Signature – Oil & Gas Review – Special report on Siraj Group – Education supplement

Published by United Press & Publishing LLC PO Box 3305, Ruwi, Postal Code - 112 Muscat, Sultanate of Oman Tel: (968) 24700896, Fax: (968) 24707939 Email: [email protected]

All rights reserved. No part of this publication may be reproduced without the written permission of the publisher. The publisher does not accept responsibility for any loss occasioned to any person or organisation acting or refraining as a result of material in this publication. OER accepts no responsibility for advertising content.

Copyright © 2009 United Press & Publishing LLC Printed by Oman Printers

Correspondence should be sent to: Oman Economic Review United Media Services PO Box 3305, Ruwi 112, Sultanate of Oman Fax: (968)24707939 Email: [email protected] Website: www.oeronline.com

No 108 July 2009

FROM THE EDITOR’S DESK

n June 1, 2009 General Motors filed for Chapter 11 bankruptcy protection – the fourth-largest bankruptcy filing in US history and the largest for an industrial company. With $172.81bn in debt and $82.29bn in assets, the move seems inevitable. As a part of the US government’s reorganisation plan GM will get $30bn additional fi-nancial assistance from the treasury department and $9.5bn from

Canada. The federal government in turn will take a majority stake in the company.

The 101 old titan, in its prime was seen as a good indicator of the US economy – How the mighty have fallen?

On the other end of the spectrum is a company like Zappos. The online shoe seller gives free shipping on all purchases, has a 365-day return policy and new employees are given a $2,000 bonus to quit after a four-week paid training programme. The disruptive strategy has made Zappos a billion-dollar-a-year retailer and given it a cult following.

So what differentiates the two examples – a simple word ‘innovation’.

Innovation is not just about new products, but about reinventing business processes and building entirely new markets that meet changing customer needs. It’s also about rewiring companies for creativity and growth.

In a challenging business environment the only way forward is by fostering creativ-ity and aggressive innovation. Luckily, for a number of companies in Oman, these are not mere homilies but a critical part of their business matrix. Led by a good management, these companies are cementing their position in the market with their inventiveness. OER’s cover story captures this trend.

A couple of other articles in this issue underscore the point – Al Amal Fund from FINCORP has outperformed the MSM index by a long shot, thanks to its con-trarian approach to investing. While a few remarkable women are pushing the envelope with their entrepreneurial streak. The stories play out on page 28 and 50 respectively.

DISRUPTION – THE WAY AHEAD

Mayank Singh

4 July 2009

TOPIcAlThe June issue has come out very well and specially the cover story, which is so important today. I am sure that this issue of OER will give a boost to Oman’s Green Revolution Campaign.

Keep it up.

Utsab Hazra, Contracts Manager,

Oman Steel Co

MISSINg OUTThe OER June issue was great. Through the cover story we came to know about the social responsibility being taken up by the companies as a step to keep our “Mother Earth green”. But I would like to share my views about the topic “In-credible India – The Traveller’s Para-dise” (Pg 68) in which the writer men-tions that he has travelled to Mumbai, Delhi and Agra for the exclusive report. No doubt he has covered many aspects but I think a detailed report on tourist sites would have invoked much more curiosity in the readers to go to India. We think that a series can be started covering all the tourists sites one by one in detail. By that we can help our nation in achieving its growth target

and the tourists as a guide and can be “Ambassadors of great Indian culture heritage”.

Garima Kapoor, via e-mail

BIRD’S EYE vIEWI am an ardent reader of OER. It is an informative magazine which brings all the news and updates across the gulf. The view point written by Srid-har Sridharan is my favourite column in the magazine as it gives tips on set-ting up business in various countries and geographical information. Kudos to OER, keep the momentum alive.

R.Vinod Nair, Darsait Khimji Ramdas

PRAcTIcAl First of all, great job on your latest is-sue of OER. Aside from the literature, there was a clear focus on the practi-cal initiatives that many can contrib-ute with ease. This will help in trans-lating words into action to the much spoken about topic concerning our environment and goes hand in hand with the country’s vision in promot-ing an eco friendly atmosphere. Wish you and your team all the best and

further success in your efforts.

Mohammed Al Essa,

Public Relations Manager, Majan College

JOB WEll DONEPeople the world over are sitting up and paying attention to the ever in-creasing need to go ‘green’. And people in Oman are no different. The ‘Green’ issue of Oman Economic Review was informative and well-thought out.

More often than not, large corporations get blamed for all the environmental problems prevalent today. And hence, it was truly heartening to read about the measures that companies in Oman are taking in order to become more envi-ronment-friendly. It’s true that we still have a long way to go, but the strides that Oman has taken so far, speaks vol-umes of what the future holds.

Congratulations to the OER team for a job well done!

Suraj Khanna, Ruwi

gREAT ISSUEThe well focused cover story of the June issue of OER coinciding with the World Environment Day – captured the concept very well. The stories written by experts in this regard were truly enlightening and stressed on the primary importance of keeping our surroundings safe for the continuous existence of life.

The responsibility to safeguard nature and environment rests with every individ-ual, and contribution should come from all walks of life with a clear objective in mind. It is also equally important to look into introducing an effective waste man-agement practice with the active support from the corporate level, yet it is another critical area to be focused today. It is a fact that waste in any form is a threat to living things.It’s a good sign that Oman has been part of this initiative at various levels with active involvement of government as well as private sector establish-ments. Media is one of the effective channels to reach out the message across the society, and OER’s initiative in this regard is very well appreciated.

Obviously, Oman Green Awards can be considered as a society-focused initiative from OER, and this campaign is another set of initiatives by a corporate organisa-tion which I hope will reap good results. Meanwhile, I take this opportunity to wish the organisers’ of OER Oman Green Awards all the very best!

Ramachandran Nair, Manager – Quality Development, Gulf Agency Company (Oman)

Write to us with your comments/feedback at: [email protected]

6 July 2009

I N S I D E

TurkeyA unique bridge of European and Asian cultures, Turkey is

the perfect destination for any tourist at any time of the year 59

24vIEWPOINTOman’s futuristic new tax law This article is aimed at providing readers with an overview of the nuances and ramifications of new income tax law that was issued recently

28FINANcEPathbreaking performanceAl Amal Fund has adopted a combination of prudent investing principles and scientific research based approach to give its investors “above market returns”

30REAl ESTATEThe clear leader Al Habib & Co is the largest property leasing company in the Sultanate with the biggest leasing manpower

32PERIScOPEThe dollar free fall is over!Contrary to political rhetoric in places like Beijing and Moscow, there is actually strong foreign central bank demand for US debt

Reshaping the giant

Since late 2008, GM has been trying to avoid bankruptcy. At the

beginning of June, GM filed for chapter 11 bankruptcy protection. We take a look at the current state

of the company

22

COUNTRY REPORT

H1N1 alertBy now almost everyone the

world over is well aware of the latest pandemic to wreck havoc with our day-to-day lives. Quite

a few people live in fear of contracting the disease, but is this fear justified?

20

AUTOMOBILE

HEALTH

c O v E R S T O R Y

Survival of the fittest 34

Qurum Shopping Area, Opposite to Al-Araimi Shopping Centre – Al Bustan Hotel – Muscat City CenterQurum City Center – Bareeq Al-Shatii Complex

Opening soon at: Barr Al Jissah Resort – Muscat Grand Mall

Tel.: +968-24797786, E-mail: [email protected], Website: www.galleryargan.com

8 July 2009

54EcONOMYOverseas farmingRich nations heading to poor, but fertile, countries to secure food for their populations was a concept that has never been seen on this scale

80BEYOND BOARDROOMSNo half measuresN S Vijaya Kumar shares his views on the importance of time delegation and his passion for travel

By Kannan Murali

cARTOON cORNER

From the Editor’s Desk 2

Mailbox 4

Economy Watch 10

Debate 12

Business Briefs 14

In the News 19

Viewpoint 24

Finance 28

Real Estate 30

Periscope 32

Legal 44

Auto News 72

Golf Update 74

Executive Wellness 75

Billboard 76

Browsing Corner 77

Market Watch & Gizmos 78

Tribute 79

R E g U l A R S

46MEDIAPushing the envelopeAl Wisal is redefining radio with its innovative programming, state-of-the-art infrastructure and customised options for clients

50ENTREPRENEURSmall office home officeGiven various family commitments and societal norms starting a business out of one’s home is an option that women in the Sultanate can consider70 AUTO TAlk

Kia Optima

10 July 2009

ECONOMY WATCH

NUMBERS

Crude Oil – How Sustainable A weakening US dollar and growing inflationary concerns are focussing investors on the benefits

of owning hard assets and crude oil with its structural supply issues is a prime beneficiary

OECD stocks in days of supply(OECD Industry Stocks/Total product demand)

All commodity ETF’s net asset value($bn)

OPEC production(Current Composition, including Iraq, million b/d)

Non-commercial net length for all commodities has surged

(Futures and options, million lots)

Source: Morgan Stanley’s Crude Oil, Rally Sustainable report

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12 July 2009

Minoo Saher Group CEO Mustafa Sultan Enterprises

S Gopalan CEO, Reem Batteries & Power Appliances Co.

SHOULD GM BE LIQUIDATED OR REVIVED?

The answer seems to lie in selecting the lesser of the two evils. The social and political costs of liquidation would be very high and disruptive with a huge domino effect. On the other hand, revival would cost as much and may even fail if GM does not shed many of its fixed obligations and does not recover from the sins of the past through an accelerated implementation of the turnaround programme. Chapter 11 bankruptcy appears to be the most promising way forward for GM to reduce its debts (which is twice its total assets) and compel settlements which would reduce its operating costs. Sale of Hummer, Saturn and SAB brands, continuing with fewer dealerships, development of smaller fuel efficient vehicles to substitute its previous focus on SUV’s, etc., would prevent the cash drain and may restore long-term viability of GM.

GM is a typical example of a corporation that has grown so big that it has lost control over itself. Over the years they had developed such rigidity in their operating styles that very little initiative or innovation could thrive in that ambience. I have personally dealt with them for supply of batteries through their China after market centre and was amazed to see a complete lack of initiative or enthusiasm. Their tender documents would run into 100s of pages even to buy a few dollars worth of parts. There was a complete disconnect in their buying systems between quality prequalification and online bidding processes. The reason is their ‘one-size-fits-all’ approach to buying. This is the reason, I have stated that in their present form they could neither be revived nor restructured. The only solution is to split them into more manageable sizes.

WHAT IN YOUR OPINION LED TO THE DOWNFALL OF ONE OF THE BIGGEST COMPANIES IN THE WORLD?

The fundamental reason for the downfall of GM is underscored by the Bernstein Research which attributed the collapse of GM to adopting a strategy of cutting prices to improve sales and keep the show going instead of dealing with the real issues of rationalising products, manufacturing capacities and distribution network. Secondly, GM had over the years accumulated huge chunks of unproductive costs such as compensation paid to unionised workers who were laid off due to automation, which did not give them any value and made the company non-competitive as compared with other non-American manufacturers.

Even as recent as last year they had been talking of a ‘Hummer centered’ sales push strategy , which shows how much out of touch with market reality they had been. The American consumer had been going for more fuel efficient compact cars while GM had been continuing to promote big cars which were nowhere as efficient as the Japanese vehicles. Further their inability to cut costs has been another reason for their downfall.

WHAT LESSONS CAN OTHERS LEARN FROM GM, A 101 YEAR OLD TITAN?

Firstly, serious financial problems need to be addressed expeditiously and strategically. The financial losses in ’05, ’06, ’07 & ’08 warranted a serious relook at the company’s cost structures and product mix rather than taking the easy way out of lowering prices. Secondly, creating and retaining competitive advantage is a necessity. GM’s business model was out of sync when compared with the likes of Toyota and Honda, which had a significant impact on business results. Thirdly, GM could not afford to be caught in a web of relationships designed for another era.

The major lesson to be learnt in my view is that no matter how big you become, you need to constantly reinvent yourself and the failure to do this led to GM’s doom.

DEBATE

Should General Motors be liquidated or revived?

14 July 2009

British Airways celebrates successful Saudi re-entry

After a four-year hiatus, British Airways re-cently celebrated its long-anticipated re-entry into the Kingdom of Saudi Arabia as the first of the airline’s five weekly services to both Jed-dah and Riyadh touched down on Kingdom soil. Paolo De Renzis, British Airways’ Area Commercial Manager Middle East, said: “Brit-ish Airways has never taken its eyes off Saudi Arabia and after years of review and months of careful planning, we’re back where we be-long – operating direct services to Saudi’s two principal aviation hubs.”

Ministry of Manpower honours NBO

National Bank of Oman (NBO) was recently honoured by the ministry of manpower during a function organised under the auspices of HE Maqbool bin Ali Sultan, Minister of Commerce and Industry. Nasser Said Al Bahantah, Depu-ty General Manager - Chief Human Resources Officer, received a trophy on behalf of NBO in recognition of the significant role being played by the bank, in the field of Omanisation, where its percentage has exceeded 90%. Nasser Al Bahantah said: “NBO is proud to have a clear strategy that aims at developing nationals to occupy positions at different levels within the bank, emanating from the management’s per-sistence and commitment to achieve signifi-cant Omanisation levels, both qualitative and quantitative”.

KIMS Hospital Inaugurated

HE Dr Ali bin Mohammed bin Moosa, the min-ister of health, Sultanate of Oman inaugurated KIMS Oman Hospital on June 22. The hospital is the largest private hospital in Oman offering advanced healthcare facilities in over 15 differ-ent specialties. The departments include gen-eral medicine, general surgery, laparoscopic and bariatric surgery, ophthalmology, ENT, or-thopaedics, obstetrics and gynaecology, pae-diatrics, ENT, cosmetology and dermatology, cardiology, radiology, pathology, anaesthesi-ology, dental and physiotherapy. This project is an initiative of KIMS, Trivandrum.

BUSINESS BRIEFS

NAWRAS REcEIvES ROYAl DEcREE FOR FIxED lIcENSE Nawras, has warmly welcomed Royal Decree 34/2009 granted by His Majesty Sultan Qaboos bin Said for the issuance of a First Class License for the installa-tion and operation of a common fixed telecommunications services system. As license holder, Nawras is now entitled to provide fixed, data and international telecommunication services for customers in Oman, and can use its network in-frastructure to offer a range of leading-edge technologies, such as Wi-Max and HSDPA services. The license provides for the installation and operation of a fixed telecommunications services system for a period of 25 years, with frequency spec-trum rights granted for 15 years. HE Sheikh Salim bin Mostahail Al-Mashani, chairman of the board, Nawras, said: “The award of the new license is hugely significant for Nawras, providing us with the legal framework to enable our com-pany’s transformation into a full-service, integrated telecommunications provider for Oman.” HE Sheikh Abdullah Bin Mohammed Bin Saud Al Thani, chairman, Qtel said: “This is an historic moment for Nawras and the Qtel Group, as it ena-bles us to offer a full range of services to the people of Oman, and to deliver our commitment to quality for fixed line customers as well as mobile customers.”

NIcO cRAFT DElIvERS cREW BOATRenaissance Services subsidiary Nico Craft, a part of Topaz Energy and Marine, has constructed a 30.2 metre crew boat named ‘Kanoo 40’ for Ka-noo Shipping. The Kanoo 40 is a medium speed catamaran designed to service vessels within 50 nautical miles from port

of refuge. Built under the Bureau Veritas Certification, the crew boat has a deck cargo capacity of 35 square metres and can carry a crew of 5 and upto 35 passen-gers at a speed of 27 knots. Nico Craft is a part the engineering division of Topaz Energy and Marine, and currently has in excess of nine boats under construction, five of which are steel mono hull crew boats.

PDO HOlDS gRADUATION cEREMONYPetroleum Development Oman (PDO) held its 21st annual graduation ceremony at the auditorium of the ministry of oil and gas recently. Certificates were pre-sented to 45 new Omani graduates by the guest of honour, HE Dr Mohammed al Rumhy, minister of oil and gas. The recipients included three PhDs, 19 Masters of Science, one Master of Law. Four Master of Business Administration degrees were awarded, 17 graduates received their first degrees, and one was awarded a Higher National Diploma (HND). In a speech delivered at the ceremony, PDO’s managing director, John Malcolm, said: “Our graduates add to the growing pool of highly qualified Omanis working in the Company. More Omanis now work for PDO than ever before. Over the next few years the company will create many new job opportunities for Omanis to operate some of the world’s most challenging oil and gas production facilities.”

Ernst & Young hosts CIo roundtablE

On June 15 Ernst & Young hosted the inaugural CIO Roundtable and discussion forum at its head office in Qurum. Present at the discussion were Moh’d Salem and Moh’d Nayaz from Ernst & Young, John Cooper from Bank Muscat, Abdulka-rim from NBO and Mujahid Al Zadjali from Bank Sohar. The primary objectives of the forum were to identify the various challenges faced by CIOs in the banking sector, facilitate a financial services CIO network in Oman and to bring subject and sector experts to speak with the group. Similar CIO conferences are held in UK, Ireland, South Africa and Spain. Among the key topics discussed were the in-creased expectations from IT, the key challenges faced by CIOs, IT’s effectiveness and cost rationalisation. The forum received a positive response and is expected to be held on a quarterly basis.

oman rECEIvEs un PublIC sErvICE award Oman’s Royal Oman Police – Civil Status System (National Registration System) has received the global UN Public Service Award. This award is the most prestigious international recognition of ex-cellence in public service. It rewards the creative achievements and contributions of public service institutions that lead to a more effective and re-sponsive public administration in countries world-wide. Through an annual competition, the UN Public Service Award promotes the role, professionalism and visibility of public service. The honour was conferred upon the ROP team lead by Col. Abdullah bin Mohammed al Jabri, acting director general of civil services, at the United Na-tions Public Service Award Ceremony held at the UN campus in New York on the June 23, 2009. Several international dignitaries including the UN Secretary Gen-eral, heads of state and government, and Ministers attended the award ceremony and the parallel conference under the title, “Overcoming Emerging Challenges: The Critical Role of Governance and Public Administration.” Oman entered this prestigious UN Public Service Award competition for the very first time this year with ITA nominating seven entries from various government organisations of Oman including the Civil Status System of ROP.

NHI students embark on internship

The International Hotel Management Diploma has been running for 18 months at the Nation-al Hospitality Institute (NHI), and the students are now ready to commence their 6 month industry placement. Intercontinental Hotel Group, Al Bustan Palace Hotel, Intercontinental Hotel and Crowne Plaza, have taken on the fu-ture hoteliers to develop them further on their on-job cross training internship programme. “Bringing the International Hotel Management Diploma to Oman has proven to be a very positive development in the training of people in the hospitality industry providing a profes-sional qualification both in hotel management as a whole and through awarding individual professional certificates in specific subject areas relevant to aid in career advancement,” said Rob MacLean, principal, NHI.

PDO inaugurates “the region’s first” Integrated Collaboration Centre

Petroleum Development Oman (PDO) inau-gurated the region’s first integrated “virtual” oilfield operations facility: The Fahud Col-laboration Centre (FCC). The virtual operations facility uses state-of-the-art IT technology to create a computer-controlled environment in which petroleum and well engineers, process engineers and operations staff from both the interior and the coast can work on the same field at the same time in different locations. “The FCC is a major centrepiece of our ‘smart fields’ technology programme,” explained Oil North Director Saif Al-Hinai.

Zahara facilitates medical tourism

Zahara Holidays has entered into agreements with major accredited hospitals and special-ists across Thailand, Malaysia, Singapore and India to introduce to their clients: “Medical Tourism”. “By virtue of these tie ups Zahara is now positioned to organise seamless medical/ cosmetic treatments in these countries. This is possible with our team of medical consult-ants based in these countries,” says Sameer Kukreja, manager, Zahara Holidays.

BUSINESS BRIEFS

16 July 2009

Al RAFFAH HOSPITAl IN MUScAT

Al Raffah Hospital the first hospital of Dr Moopen’s group in Sultanate of Oman was inaugurated on 15th Jun 2009 by Vayalar Ravi, minister for overseas Indian Affairs, along with HE Ahmed Al Beimani, undersecretary in the ministry of com-merce and industry. The hospital is located in the heart of Muscat near the Al Ghoubra roundabout. Al Raffah is the second private sector hospital in Oman. The hospital has highly qualified and experienced consultants and specialists doc-tors in various disciplines supported by skilled nursing and paramedical staff. It’s medical facilities include two modern operation theatres with laparoscopic surgical facilities to perform minimal invasive surgeries. The diagnostic facilities include a 6 slice CT, 3D/4D ultra sound scanners, well equipped laboratory with exclusive facilities for visa medical screening. The hospital has 40 beds in the initial phase, which will be expanded to 100 beds in the second phase. The overall investment is around RO5mn. Al Raffah Hospital is part of Dr Moopen’s Group, the largest healthcare service provider in the middle east and the subcontinent, with seven hospitals, 24 medical centres and 48 pharmacies with a presence in UAE, Oman, Qatar and India.

BANk MUScAT ExPOSURES TO Al gOSAIBI gROUP AND SAAD gROUPTwo large groups in Saudi Arabia, the Al Gosaibi Group and the Saad Group, have defaulted on their payment obligations across a number of banks. BankMuscat stated in a release that it has a direct exposure to these groups amounting to approximately RO49mn through its Riyadh Branch. The bank added that one of its associates, BMI Bank, Bahrain, also has exposure to these groups, amounting to approximately RO17mn. The exposure of BM and BMI Bank is to the operat-ing companies of the group but it has no exposure to The International Banking Corporation, Bahrain or Awal Bank, Bahrain which form part of these groups. Though these groups are in default on some of their obligations, the bank takes comfort from the fact that the groups’ operating companies are profit making and based on the last published financials, have strong balance sheets. Further, given the prominence of these groups, the size of their debts and the number of international and regional banks involved, BankMuscat is confident that the concerned governments and regulators would take proactive steps to ensure an orderly settlement of obligations.

OCTAL Petrochemicals substitutes 90 per cent of Oman’s PET imports

After just five months of operations at its new manufacturing facility in the Salalah Free Zone, OCTAL Petrochemicals has substituted 90 per cent of PET resin imports into Oman, valued at nearly $42mn a year. OCTAL’s PET resin delivers improved cost savings and environ-mental performance. OCTAL also exports PET resin to more than 30 countries in the Middle East, Africa, Europe, Asia and the Far East.OCTAL chairman Sheikh Saad Suhail Bahwan said, “Omani companies can now buy from a world-class Omani supplier, reducing ex-penditure on expensive imports and investing instead in Omani factories and jobs. This is a great advertisement for local manufacturing.”

Mirbat Beach powers ahead with Omanisation

The management of Mirbat Beach Resort & Spa has taken giant strides in building a world-class Omani workforce that is ad-equately trained to perform on jobs. A total of 47 Omani nationals have been chosen to undergo training and acquire skills that will help Mirbat Beach Resort & Spa become a world-class destination. Osama Mariam, CEO, Dhofar Tourism Company, stated that this batch was only the first and that there would be an ongoing effort to train and absorb more Omanis into the workforce. Mirbat Beach is an RO1bn project developed by the Dhofar Tourism company.

Brand Oman signs MoU with Oman Air

With a surge in visitor numbers and Oman Air’s recent network expansion into the UK, France and Germany, prospects look very good for the Sultanate’s growing tourism sec-tor. Links between Oman Brand Management Unit (OBMU) and Oman Air were strengthened recently when the two organisations signed an MOU. “Our stunning natural terrain, welcom-ing people and beautiful beaches are attracting large numbers of foreign visitors eager to ex-perience what many consider to be the world’s newest tourist hotspot,” comments His High-ness Sayyid Faisal Al Said, CEO, OBMU.

BUSINESS BRIEFS

OIB FElIcITATED FOR OMANISATION OIB was felicitated by the Ministry of Manpower at a cer-emony, organised recently by the ministry, to commemo-rate companies and establishments in the private sector, for employing and training national manpower and as an appreciation of the bank’s distinguished efforts in applying Omanisation strategies. Since its commencement of banking business in the Sultanate 25 years ago, OIB has set a base that attracts Omani youth to work in the banking sector, de-spite the fact that the banking business needs a lot of time in training and gaining special skills. The bank’s board of directors and management have laid immense focus on Om-anisation and its Omanisation ratio has increased grad-ually and reached to over 91 per cent. The bank’s management has also put in place a training plan to build up nationals professionally and academically.

APTUS THE NEW AcE OF ORIENTAl ORYx Oriental Oryx International launched its new brand name “Aptus” on May 27, 2009 at Crowne Plaza following the launch of Autodesk’s 2010 version of its Revit Architec-ture, Structure, MEP and Civil 3D vertical solutions. Aptus means connected in Latin. With over a hundred and fifty distinguished guests from various ministries, the Public Au-thority of Electricity and Water, Royal Guard of Oman, Di-wan of Royal Court, large contractors and consultants like Cowi Larsen, Worley Parsons, L&T Oman, Electromech, MFY, Simon Engineering, OSCO and the media, the packed hall witnessed a classic exchange of knowledge, ideas and visions that clearly showed the importance of latest technol-ogy in the field of engineering within the Sultanate and the rest of the world. After introspection the company wanted to enhance its services and offerings to its customers and business partners. This sparked the decision to rebrand it-self to give shape to its vision to grow and expand in di-versified areas while maintaining integrity and focus. The unveiling of the new logo and the address by Rrajesh, CEO of Aptus, drew all round appreciation. The new logo reflects dynamism, cutting edge technology, sharp thinking and en-vironmental consciousness.

18 July 2009

OMANTEl AND OMAN MOBIlE PAY & WIN DRAW WINNERS

Omantel and Oman Mobile held the first Pay & Win draw on Thursday June 26, 2009 at Muscat City Center under the auspices of Hassan Ahmed Ashraf Al Zadja-li, acting VP consumer business unit. He announced the two lucky winners of the Toyota Sequoia; Said Sulaiman Hassan Al Shahi and Mubarik Khalifa Al Nassiri. Twenty winners of a one year free subscription of fixed and mobile services were also announced during the Pay & Win draw. The first Pay & Win draw saw many visitors turning up to watch the draw, entertainment and musical programmes and kids competitions.’ Omantel and Oman Mobile introduced the Pay & Win of-fer in May 2009. The promotion includes post-paid fixed, mobile telephone and ADSL customers. The company provides wonderful prizes for its current and new customers through this promotion, when bills are settled; customers are eligible to enter three draws to win three Toyota Sequoia’s, as well as a 30 one-year free subscription for post-paid fixed and mobile phone services. Paying RO1 will en-able customers to enter the draw and 10 chances for new subscribers.

TOWEll BUIlDINg MATERIAlS lAUNcHES cONcEPT STORETowell Building Materials has opened a new store, bringing to-gether all the best building materi-als and some of the world’s biggest names under one roof. Located in Wadi Kabir, the store is based on a one-stop-shop concept. Towell Building Materials is looking to make choosing the perfect fit easi-er for everyone, be it a contractor, consultant, builder or customer. Diverse prod-uct categories give the option of mixing, matching and creative experimentation, which is what the company is striving to promote. All the big brands like Twy-ford, Roman Dietsche, Grohe, Lockwood (Assa Abloy), Ceramica Alcora, Apavisa Porcelanico, Sffeco, Franke and ABB are available at the store.

BUSINESS BRIEFS

The International Marine Contractors Association (IMCA) has recently elected a new Chairman, Roy Don-aldson, for its Middle East and India section. Donald-son had presided as the

Vice Chairman of IMCA during 2008 and has served the offshore and marine industry for 20 years. Donaldson is the chief operating officer of Topaz Marine, a Renaissance Services sub-sidiary. Renaissance CEO Stephen Thomas said, “We are very proud of Roy’s achievement. He thoroughly deserves this recognition as one of the outstanding leaders of the OSV industry.”

Nasir bin Issa Al-Ismaily, the general manager of the Export Credit Guarantee Agency of Oman was elected as the new chairman of the Prague Club of the Berne Union during its meeting in Minsk, Belarus on 9th to 10th June 2009. The Prague Club of the Berne Union consists of a number of export credit agencies from various coun-tries. He will succeed the present chairman Csaba Simon of Hungary.

ExEcUTIvE MOvEMENTSPranav Dewan has been recruited to head the crea-tive department at ADINC as creative director. Known as the man behind Lehar Namkeen’s evergreen base-line – ‘Kya karein, control

nahin hota’, Pranav has won 3 Top CAG awards during the course of his career and has super-vised the most talented of creative people. He has launched the entire portfolio of Samsung products in India, as well as all of Pepsi Foods, Maggi Macaroni and Microsofts’ Windows XP.

A new director of sales and marketing Trudy Cook, joins Al Raha Beach Hotel, Abu Dhabi. Trudy has over 22 years of hotel and resort experience. She has held senior posi-tions with leading interna-tional hotel chains such as Starwood, Accor, Hyatt, In-tercontinental Hotels, Radisson and Hilton Hotels and Resorts before she made the move to Abu Dhabi.

IN THE NEWS

Bovis Lend Lease (BLL), a UK based project consultant is suing Blue City up to £920,000, alleging that it was not paid for work. Bovis claims that it was hired to provide project manage-ment and other services on the 5,841-home first phase of Blue City, a Fos-ter + Partners-designed megaproject near the capital Muscat, between 2005 and 2008. Richard Russell, CEO, Blue City Company 1 responds to a questionnaire sent by OER’s Akshay Bhatnagar on the issue.

What is the current status of Blue City 1’s business relation-ship with Bovis Lend Lease? Are they still working for you? If they are not working with you, is it because the contractual obliga-tions are over or there are dis-putes between the two parties?The agreement with Bovis was termi-

Blue City CoMpany 1 reSpondS to CharGeS

nated by mutual consent. The project management services contract was subsequently let to another service pro-vider and the relationship with the new service provider is working very well.

Is it true that BLL has filed a writ against The Blue City I? If yes, why? We are aware that a case has been filed in court. The issue is with our advisors who have assured us of our clear position.

What is your response to the allegations of BLL against you as published in some media reports? Bovis has been paid, including sig-nificant and unsecured advance pay-ments, for all services it has rendered under its contract with Blue City Com-pany 1. The dispute is related to a con-tract with another company and not Blue City Company 1.

Would you like to share any other information on the subject? No.

Your Path IntoIntegration &

Innovation

HEALTH

20 July 2009

t present there are over 100 confirmed cases of the H1N1 influenza in the Middle East and on June 13th, the first three cases were con-

firmed in Oman. It was carried in by three students who had just arrived into the Sultanate from the US. As of now they have been sent home after treatment. Which begs the question – Is it really all that dangerous?

The strain that the world is currently fighting was first identified in April 2009 and was declared a level 6 pan-demic, by the WHO, on June 11th. But, as serious as it sounds, it is not nearly as bad as most people perceive it to be. The mortality of the disease is limited since it is not a severe infec-tion and shares most of its symptoms with regular flu. In fact, the case fatal-ity rate for the current pandemic is only 0.5 per cent. The primary reason for a low rate is the fact that the Tami-flu drug works as an effective counter-measure for the disease.

Root causeThe primary reason for the pandemic is the fact that this is an all new strain of the virus and as such we have lit-tle or no immunity to the disease and since it is transmitted just as easily as regular flu, it spreads extremely easily. And while it cannot be stopped from entering Oman (and at the time of this article it has already done so) it can def-initely be contained and mitigated. At present a vaccine is being developed to counter the disease but the first doses

H1N1 AlERTBy now almost everyone the world over is well aware of the latest pandemic to wreck havoc

with our day-to-day lives. Quite a few people live in fear of contracting the disease, but is this

fear justified? Malcolm Xavier Crasta speaks to Dr Idris Alabaidni, acting director of the

department of communicable disease surveillance and control to find out

Here are a few steps you can take to reduce your chances of contracting the H1N1 virus and to make a quicker recovery:

Improve airflow in your living space by •opening windows

Wash your hands regularly and •thoroughly with soap and water

If you are ill, inform your family and •friends of your sickness and try to avoid contact with other people

Cover your nose and mouth with a •disposable tissue while sneezing and coughing and dispose of the same properly and immediately

Rest and take plenty of fluids•Seek medical advice immediately or call •the hotline – 92466422 or 92466642

Dr Idris Alabaidni, Acting Director, Department of Communicable Disease Surveillance and Control

won’t be available till September and even then in limited numbers.

Rest assured, in the mean time, the Ministry of Health is doing everything in its power to reduce and contain the effects of the pandemic. “The Ministry of Health would like to assure the pop-ulation that it has taken all the neces-sary steps to confront the disease” says Dr Idris. He also added “The H1N1 committee has also taken steps to ensure the quantity and availability of the Tamiflu drug.” In addition to this there is ongoing training all over the country to detect, deal with and treat H1N1 and measures are already being taken to prevent the spread of the disease. “An early warning system and surveillance of the influenza is already in place and all ports of entry

21 July 2009

Country Cases Confirmed

Deaths Confirmed

1 Mexico 8,279 1162 United States 21,449 873 Canada 6,732 194 Argentina 1,391 215 Chile 5,186 76 United Kingdom 3,597 17 Guatemala 254 28 Costa Rica 222 19 Dominican Rep. 108 2

10 Colombia 72 211 Australia 3,280 3

Country Cases Confirmed

Deaths Confirmed

12 Japan 1,049 013 Thailand 774 014 Spain 541 015 Philippines 445 116 Panama 358 017 China 1,089 018 Germany 333 019 Brazil 399 020 Israel 405 021 New Zealand 453 0

Other 3,398 0

MAPPiNg ThE sPrEADLaboratory-confirmed human cases by country

CountryCases Deaths

Laboratory confirmed Confirmed

WHO totals 59,814 263

1

2

3

45

6

7 89

10

11

12

13

14

1516

17

18

19

20

21

are being looked into” added Idris. The WHO has not implemented any travel restrictions, but it has stated that it is better to avoid affected coun-tries unless absolutely necessary. The only real fear that the experts have is that the influenza virus can mutate to become an even more potent strain and also become less susceptible to vaccines developed to cure the earlier strain. But the chances of this happen-ing are slim and only if it does, should people have anything to worry about.

The current outbreak of the ‘swine flu’, as most people know it, is being caused by a new strain of the Influen-

za A virus subtype H1N1. But this new strain was found to be a reassortment of four known strains of the H1N1 vi-rus – North American Mexican influ-enza, North American avian influenza, human influenza and swine influenza virus. While this strain is not as deadly as most people believe it to be (more on that later), they do have a reason to fear it. The H1N1 strain is by far the most common form of influenza in humans and one strain of the H1N1 is also responsible for one of the most deadly pandemics in human history.

This particular outbreak was known as the Spanish flu and hit the world

between 1918 and 1919. It is officially stated to have caused the death of close to 21mn people, but the true estimated death toll is said to be anywhere be-tween 50mn to 100mn and infected as many as 500mn worldwide. But let’s look at the facts – this particular strain was very odd because it killed mainly young healthy adults, quite unlike the regular virus that generally affects ba-bies, the old or chronically ill. Also, thousands that died from the disease were soldiers fighting in the war. And, let’s face it, medical science has ad-vanced in leaps and bounds since 1918 and we are more prepared than ever before to battle such an outbreak.

Source: WHO (Figures as on June 26, 2009)

22 July 2009

AUTOMOBILE

23 July 2009

n the 1st of June, this year, the automotive industry was hit by a huge bombshell. It was on this date that General Motors Cor-

poration, or GM as most of us know it, filed for government-assisted chapter 11 bankruptcy protection. This filing was the fourth largest of its kind in US history, following Lehman Brothers Holdings Inc, Washington Mutual and WorldCom Inc. First and foremost we have to realise that Chapter 11 is not truly bankruptcy, it is bankruptcy protection. What this means is, GM is not currently in a position to pay-back all its stakeholders. To prevent itself from going bankrupt and being liquidated, GM filed for the Chapter 11. In doing so the company can, with the help of the court, get restructured. This process will allow the launch of a ‘New GM’, which will purchase all the productive assets of the old company. As such its payments to employees, warranty coverage, vehicle service and other current operations remain rela-tively unaffected. In fact, it is possible that the New GM may emerge a leaner company with a significantly stronger balance sheet, a world class product line-up, a global footprint and indus-try leading expertise and technology.

Worst nightmareAlso in lieu of the filing, in fact even prior to it, GM announced the phase-out of its Pontiac brand by late 2010 and that it would concentrate on its four primary brands – Chevrolet, Ca-dillac, Buick and GMC. The remain-ing three – Hummer, Saturn and Saab were to be sold. And this is just what was done starting with the an-

nouncement on June 1 that Hummer was to be sold to China-based Sichaun Tengzhong Heavy Industrial Machin-ery Company, on June 5 it was an-nounced that Saturn would be sold to Penske Automotive Group and finally

on June 16 it was announced that Koenigseigg and a group of Norwegian investors plan on acquiring Saab. As of now, these brands will continue to operate as normal so there should be nothing to fear in case you are plan-ning on purchasing one. This is be-cause when deals like this take place it is a general practice for the new owner to utilise the existing dealer network.

On courseAnother key fact to note is that GM operations in the Middle East are not part of the US chaper 11 filing, which is restricted to the US alone. “GM in the Middle East operates under the name of GM Overseas Distribution Corporation. This is a self-funded, vi-brant and profitable company and we will continue to conduct business nor-mally throughout our dealer network, as we have done over the years.” says Agarwal. As such GM dealers across the Middle East are open for business as normal and all current and future owners of GM cars can rest assured that all warranty, service and parts commitments given at the time of pur-chase will be honoured.

To prove this point GM is well on track with all their product plans for the coming months. The iconic new Chev-rolet Camaro should be entering deal-erships somewhere around July, the new Cadillac SRX, Malibu and all-new Cruze will make their regional debuts in October 2009, and finally the new GMC Terrain is on track for its Decem-ber launch. In addition to this, GM has invested in a parts distribution centre in Dubai that will even deliver parts overnight if needed. What more assur-ance could one ask for?

GM has been trying to avoid bankruptcy caused by the late-

2000’s recession, record oil prices and other factors. Finally,

at the beginning of June, GM filed for chapter 11 bankruptcy

protection. Malcolm Xavier Crasta speaks to Virendra Agarwal,

CEO, Moosa Abdul Rahman Hassan, to find out what the current

situation is and how it affects Oman

GM’s declineLate 2008 – GM received loans from the American, Canadian and Ontario governments to avoid bankruptcy

February 20, 2009 – GM’s Saab division files for reorganisation in a Swedish court after being denied loans from the Swedish government

March 29, 2009 – GM’s Chairman and CEO, Rick Wagoner, immediately resigns as part of an Obama administration automotive restructuring plan

April 24, 2009 – GM receives $15.4 billion in loans from the US Treasury Department under the Troubled Assets Relief Programme

April 27, 2009 – GM announces that it would phase out the Pontiac brand by the end of 2010

June 1, 2009 – GM files for Chapter 11 bankruptcy protection

June 1, 2009 – GM announces sale of Hummer to Sichaun Tengzhong Heavy Industrial Machinery Company

June 5, 2009 – GM announces the sale of Saturn to Penske Automotive Group

June 16, 2009 – GM announces that Koenigseigg and a group of Norwegian investors plan to aquire Saab

24 July 2009

THIS ARTICLE IS AIMED AT PROVIDING READERS

WITH AN OVERVIEW OF THE NUANCES AND

RAMIFICATIONS OF NEW INCOME TAX LAW THAT

WAS ISSUED RECENTLY

VIEWPOINT

By Sridhar Sridharan

oMan’S futuriStiC new tax law

In an effort to

narrow revenue

leakages, Oman has

aligned itself with

more developed

tax jurisdictions

by substantially

broadening the scope

of services subject

to withholding tax

applicable to incomes

accruing or arising

from Oman to foreign

companies with no

presence in Oman

new tax law was pro-mulgated by Royal Decree 28/2009 and published in the of-ficial gazette on June 1, 2009. The new law

appears to be clear and easy to under-stand. There are a number of key pro-visions that require detailed executive regulations to provide clarification on the interpretation and application of the law. These are expected to be is-sued before the end of 2009

Start dateThe new law takes effect from tax year 2010 which starts on January 1, 2010. An appropriate assumption would be that, for a majority of businesses which end their accounting year on December 31, they have six months before the law takes effect. There are of course differences between an ac-counting year and a tax year. In effect, the new tax law applies to accounting years or periods ending in tax year 2010. Consequently, for a taxpayer with an accounting year ending on 31 March 2010, the new tax law applies from April 1, 2009.

Filing of business particularsA compliance matter that would re-quire early attention is the require-ment for all taxpayers to ensure that their business particulars filed with the tax department are current and updated within three months of any

change. Non compliance may result in a fine not exceeding RO2,500. This means that all existing businesses must ensure that the business particu-lars that they may have filed with the tax department must be current as on January 1, 2010.

Who is taxableThe tax law continues to apply to Omani establishments or registered sole proprietorships, companies and permanent establishments (PE) of for-eign companies.

Service PETo the relief of many foreign com-panies that carry on business in Oman for short duration, Oman has demonstrated considerable business sense by introducing the internation-ally accepted concept of a service PE. Under the new law, a foreign com-pany will be considered to create a PE only if services are rendered in Oman for a period or periods exceed-ing 90 days in the aggregate in any 12 month period.

In the past, foreign companies making a short trip to Oman to undertake lim-ited work or duration services in con-nection with one off contracts or short term projects in Oman were deemed to create a PE and were hence tax-able. This change relieves many for-eign companies who may visit Oman to complete installation, commission-

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ing, maintenance, testing, survey or sample collection or consulting services from the burden of filing tax returns. On the other hand, certain of these services may come within the new withholding tax provisions, in which case, the Omani taxpayer will have an ob-ligation to withhold flat rate tax of 10 per cent from payments made for such services.

Dependent agents are now accountable for tax With a carrot and stick approach, the service PE relief has been countered with wider definition of perma-nent establishment of a foreign company to include dependent agents. Where, in substance, a foreign principal carries on a business through an agent the local agent may be considered to be a PE of the for-eign company and taxable. These provisions, which also deem the local agent to be principal officer of the foreign company, require careful consideration.

To reinforce the above measures, it has been made clear that, the burden of tax cannot be transferred to anybody by the entity which is subject to tax. This im-plies that, under the new law, foreign companies may not be able to shift the burden of tax obligations to the Omani companies.

Services subject to withholding tax broadenedIn an effort to narrow revenue leakages, Oman has aligned itself with more developed tax jurisdictions by substantially broadening the scope of services subject to withholding tax applicable to incomes ac-cruing or arising from Oman to foreign companies with no presence in Oman. A flat rate withholding tax of 10 per cent will apply to payments for royal-ties, research and development, computer software and management fees. The definition of royalties has also been extended to include the use or right to use intellectual or proprietary rights including computer programmes, any media used for radio or television broadcasting, payments for industrial, commercial or scientific equipment or experience and rights to work mineral or other sources of natural wealth.

DepreciationrulessimplifiedAnother change much welcomed by overworked fi-nancial managers, are the rules relating to tax depre-ciation which have been simplified. Depreciation of assets other than buildings will now be calculated on a pooling (or block) of assets basis.

Assets are classified into three pools with each asset base calculated with reference to opening value plus additions minus sale proceeds of disposals. Tax de-preciation rates have been maintained with the ex-ception of accelerated depreciation for computers and a significantly reduced rate for drilling rigs which are now to be depreciated on a reducing balance basis at

26 July 2009

331/3 per cent and 10 per cent respec-tively.

The pooling of assets significantly decreases the compliance work in-volved in preparing yearly tax returns but without compromising the effi-ciency of tax depreciation provisions. Buildings will continue to be depre-ciated on a four per cent straight line method.

Pre incorporation income and goodwill To remove previous tax law uncer-tainties and clarify recent tax practice, gains on disposal of goodwill or com-mercial name or trademark has been deemed to be taxable income. This is a complex area as this change may also impact business reorganisations and transfers of contracts between group companies. Incomes accruing to an Omani company before its incorpo-ration or registration have also been deemed to be taxable.

Tax exemptions and other incentives To encourage growth of industries, development of tourism and other strategic sectors, tax exemptions are available. Qualifying manufacturing businesses and projects of strategic economic importance with substan-tial export and employment potential continue to enjoy tax exemptions. These exemptions are available for upto 10 years.

Foreign Incomes now taxableAnother change, particularly unpopu-lar with larger Omani companies, is the introduction of a global tax re-gime. Under the new laws, all incomes including overseas income earned by an Omani company will be taxed in Oman. However, a tax credit limited to Oman’s tax rate of 12 per cent will be available as offset.

Cross border and tax avoidance transactions Once again Oman has aligned with tax practices in more developed ju-risdictions by introducing specific provisions relating to complex cross border transactions between related

A 12 per cent tax rate now zapplies to all businesses both local and foreign

A flat rate withholding tax of 10 zper cent will apply to payments for royalties, research and development, computer software and management fees

Tax depreciation rates have zbeen maintained with the exception of accelerated depreciation for computers and a significantly reduced rate for drilling rigs which are now to be depreciated on a reducing balance basis at 331/3 per cent and 10 per cent respectively

Where the tax payer fails zto submit or delays the submission of tax returns the Secretary General can impose fines ranging between RO100 and RO1,000

New IT law

parties and tax avoidance transactions wherever arising. The complicated is-sue of pricing between related parties has been addressed by introducing re-quirements to meet accepted transfer pricing concepts to prove arms length dealings between multinational com-panies and their Oman businesses. There is also some tightening with al-lowable deductions with restrictions on deductibility of head office costs which would now include costs related to affiliate companies.

Another innovative concept from ad-vanced tax regimes called thin capitali-sation will also apply to deductions for interest-cost-on-loans. These would need to meet thin capitalisation rules to be introduced by executive regula-tion. Basically, when the shareholders use excessive loans funding instead of capital contributions to fund the capital requirements of a company,

the company is referred to be thinly capitalised. The concept assumes that excessive shareholder loans allow the shareholders to pay out profits in the form of interest which is then tax de-ductible. Finally, the new laws also in-clude provisions for issue of executive regulations, ministerial rulings and clarifications by the secretary general for taxation to improve application or tax administration.

COMPLIANCE AND ENFORCEMENT MATTERSService of noticesThe tax law also clarifies that a notice from the tax department is deemed to be served within 15 days from the date of letter. This is significant as deadlines for filing appeals, objections and tax cases depend on the date of notification of a decision. For deter-mination of filing due dates, if a statu-tory deadline falls on a public holiday, the deadline is now extended to the next working day.

PrincipalofficerThere are a number of major changes to definition and functions of a prin-cipal officer. The law now defines who is regarded as principal officer for various entities. In this regard, the law now deems an Omani agent as a principal officer where a foreign company carries on activity in Oman through a dependant agent. This pro-vision may have significant implica-tions for Omani companies that act as agents for foreign companies. It is also specifically stipulated that a sole proprietor or owner of a permanent establishment who is outside Oman, shall designate a principal officer to comply with the obligations under this law. Such principal officer shall not be absent from Oman for more than 90 days in a tax year.

Appellate processThere are no major changes to exist-ing appellate processes for procedures relating to filing an objection and ap-peals with a time limit of 45 days con-tinuing to apply for submissions. Tax payers may also seek an extension of time for payment of disputed tax. Un-

VIEWPOINT

27 July 2009

disputed tax is payable within 30 days from the date of objection.

PenaltiesTo encourage compliance, the new law also includes specific administra-tive and criminal penalties and pun-ishments for non-compliance of the law and other offences. Where the tax payer fails to submit or delays the submission of tax returns the secre-tary general can impose fines ranging between RO100 and RO1,000. Where the tax payer fails to declare correct taxable income in the tax return for any tax year, a fine of not more than 25 per cent of the difference between the amount of tax determined on the correct taxable income and the amount of tax as per the return sub-mitted may apply.

Penalties are also prescribed for non-submission of the information re-quired under the law, failure to attend meetings or respond to queries raised by the tax department. Criminal pen- The author is a Tax Partner at Ernst & Young.

alties of upto RO5,000 and imprison-ment for intentional offences are also prescribed for serious offences.

In conclusion, Oman can boast of em-bracing the global economy by imple-menting international tax concepts and a low tax rate of 12 per cent that

now applies to all businesses both local and foreign. This level playing should encourage better tax compliance espe-cially when coupled with penalties for non compliance.

28 July 2009

he numbers speak for themselves – Al Amal Fund managed by FIN-CORP has achieved a year-to-date return of 21.11per cent (as on

June 16, 2009) compared to a 4.6 per cent return given by the MSM 30 in-dex from the beginning of the year. On an annualised basis this works out to be a 36 per cent higher return than the index. Taking the equation further – the fund has given a total re-turn of 55.29 per cent since its incep-tion on March 20, 2005; far in excess of the 32.14 per cent MSM 30 return over the same period. Says HE Munir Makki, managing director and presi-

dent, FINCORP, “Markets are ex-tremely volatile and identifying at-tractively valued growth stocks needs a deep understanding of companies, industry and market experience. Eq-uity is an important asset class and needs to form an integral part of each investor’s asset allocation. However retail investors should avoid direct ex-posure to the equity markets in view of their complex nature and instead should channelise their investments through mutual funds (MFs) with a good track record like Al Amal as this minimises the risk of capital erosion.” Al Amal currently has a fund size of RO5mn out of which FINCORP has contributed 35 per cent.

Re-inventing the wheelThe fund has emerged a winner by doing things differently. At a time when most MFs in the market were close ended, Al Amal was floated as an open-ended fund. An open-ended fund is a collective investment scheme which can issue and redeem shares at any time. Compared to this a closed-ended fund is a collective investment scheme with a limited number of shares. New shares are rarely issued after the fund is launched and shares are not normally redeemable for cash or securities until the fund is liquidat-ed. The investment approach adopted by the fund manager has been another reason for Al Amal’s success. The fund

Al Amal Fund has adopted a combination of prudent investing principles and a scientific research based approach to give its investors “above market returns.” Mayank Singh reports

FINANCE

HE Munir Makki Managing Director and President, FINCORP

29 July 2009

manager has consistently adopted a prudent approach of booking profits and remaining in cash as the index moved upwards.

The global financial crisis and the crash in oil prices from $147 per bar-rel in July 2008 to below $35 per bar-rel in December 2008, took its toll on the MSM. When the MSM 30, hit 4,188 levels in January 2009, the fund manager used the higher liquidity to re-enter the market – convinced about the inherent strength of the economy.

A good foundationSays HE Makki, “The economic crisis has had a lower impact on Oman. A few banks may have some issues due to the economic meltdown, but that’s it. There has been no drop in the budg-et or in government spending and oil prices are currently much higher than the budgeted price of $45 per barrel. The selloff in the market came mainly from foreign institutional investors and not from Omani investors.” The panic in the wake of the global melt-down saw close to 16 companies (a number of them being fundamentally strong) trading below their respective book values.

Having burnt their fingers in the meltdown, a number of MFs opted for defensive, high dividend yielding stocks like oil marketing and power companies. Taking a contrarian ap-proach, Al Amal went in for growth stocks like Galfar Engineering and Renaissance Services. Says HE Makki, “One should go into defensive stocks when the market is trading high. We changed from defensive stocks to growth stocks as they would go up much faster after a severe downturn.” As the markets went up from 4,628 on March 31, 2009 to 5,687 levels on June 16, 2009; this move paid off in good measure.

Mutual fund option The success of Al Amal Fund shows the scope of MFs as an investment option for investors. Investing intel-ligently in the markets calls for a so-phisticated knowledge of the stock

market and most small investors may not be equipped with such insights. A good fund gives a small investor the benefit of using experienced resources backed by research for value based in-vesting. Says HE Makki, “We adopt a top down approach to arrive at stocks to invest in. People at times do tend to get sentimental about stocks which they should not.”

Companies that have performed very well over a long time are usually better placed to weather a downturn as they have a good management, a sustain-able model and a competitive busi-ness. However investors need to keep abreast of the trends like the evolu-tion of the technology era in the 21st century as compared to the industrial revolution in the previous century. HE Makki cites an example – “In the US, industrial companies were the biggest players on the US stock exchanges in the 1970s and 80s, but today that space has been occupied by tech com-panies like Yahoo, Microsoft, Google

and E-bay.” Thus an investor has to ascertain these changes while making an investment decision.

Despite their advantages, MFs have still not caught the fancy of a number of small investors in the Sultanate. There is a strong need to educate investors about the positive aspects of investing in funds as against direct investment in the stock markets. Says HE Makki, “The Capital Market Authority (CMA) and the government need to encourage small investors by appropriate public-ity and educational campaigns on the merits of investing through MFs. The CMA could reserve a percentage of initial public offers to MFs with a view to encourage MFs as an important as-set class. MFs could play a major and significant role in the development of the capital market. Investors need to look at MFs as a medium to long term investment asset class with a 18 to 24 month investment horizon.”

Al Amal has issued bonus shares and 10 per cent dividend to its investors since inception. Starting at a par value of one rial in March 2005, the fund had a unit value of RO1.440 as on June 16, 2009. Al Amal’s management fee stands at 1.7 per cent.

FINCORP is a leading investment bank and provides innovative, structured and customised solutions to its clients. The company’s product offerings include asset management and discretionary portfolio management, corporate fi-nance and advisory, brokerage and cor-porate research services.

OER5cm x 11cm

Head-to-headDate MSM Index Al Amal

Fund% Change - Jan 09 -11.53% -10.01%

% Change - Feb 09 0.83% 0.09%

% Change - Mar 09 -4.64% 6.82%

% Change - Apr 09 10.81% 12.33%

% Change - May 09 7.24% 8.48%

% Change - Jun 09 3.41% 3.30%

% Change - YTD 4.53% 21.11%

Return since inception of Al Amal (20 March 2005 till June 16, 2009)

55.29%

MSM 30 Index performance since 20 March 2005 till June 16, 2009

32.14%

30 July 2009

AL HABIB & CO. IS THE LARGEST PROPERTY LEASING

COMPANY IN THE SULTANATE WITH THE BIGGEST LEASING

MANPOWER. THE COMPANY’S BRAND NAME AND EQUITY IN

THE MARKET HELPS IN GENERATING A LARGE NUMBER OF

ENQUIRIES ON A DAY-TO-DAY BASISBy K. Chandramouli

roperty Leasing and Management (PLM) is the flagship division of Al Habib & Co. In fact the company was start-ed in 1978 as a property

leasing and management company. We lease and manage residential, commercial and industrial properties.

ProductprofileWe have three products under PLM. The first is a product wherein we pay a fixed agreed amount to a landlord and carry the risk of vacancy, bad debts, maintenance expenses and fall-ing rents. Many owners are happy to transfer the risk to us so that they are guaranteed an amount that is accept-able to them.

The second, is classical management wherein we manage the property on behalf of the manager and charge only a fee. All the income belongs to the owner and all expenses are borne by the owner. The third is just plain leas-ing where our responsibility ends with finding a tenant and completing the documentation.

The volume of our business has tripled in the last four years. This is mainly because pension funds have increased their investment allocation to real es-tate and we are a preferred property manager for funds. We manage prop-erties for the ROP Pension Fund, the

THE clEAR lEADER

The author is the Manager-Asset Management of Al Habib & Co’s PLM division (http://www.alhabibonline.com/)

Ministry of Defence Pension Fund, Civil Service Employee’s Pension Fund, the Ministry of Justice etc.

Growth trajectoryPLM services are required irrespec-tive of the state of the economy and we have continued to grow rapidly even in the downturn. We are targeting a 20 per cent growth in 2009 and are on

course to achieve it. Although we are by far the largest property manage-ment company in Oman, our market share is small and the industry is high-ly fragmented. We have an opportunity to grow rapidly in the coming years.

We are a leader in the business be-cause we offer certain advantages. We are by far the largest property leasing company and we have the largest leas-ing manpower. Al Habib as a brand is well known and we get 30 to 40 enquiries a day even when we do not advertise specific properties. These ensure that a property is shown to the maximum number of potential clients and this increases the chances of leas-ing quickly.

We have a vastly experienced leasing team who are well versed in ensuring that we lease only to quality clients who will rarely default on their obli-gations. We have an in house lawyer to pursue troublesome tenants. Al Habib has an in house maintenance team headed by a civil engineer en-suring that maintenance is excellent and the cost of maintenance is as low as possible. We have invested in custom built software which enables us to have information at the click of a button.

Targeting 20% u

growth in 2009

Gets 30-40 enquiries u

a day

A well known brand u

name

Experienced team u

Custom built u

software

plM- StrenGthS

REAL ESTATE

ADvTNAWRAS AD TO cOME

32 July 2009

he dollar has been un-der a state of siege in the global currency market, falling from 89 on the Dollar Index in March to as low as 78

by early June. Yet the free fall in the dollar now threatens the strategic eco-nomic policy interests of the Obama White House, the Federal Reserve, the US Treasury, the ECB and even the Central Banks of countries as diverse as Switzerland, Canada, Singapore and New Zealand. The Japanese Fi-nance Minister stressed his “unshaka-ble faith” in the dollar and his Russian peer explicitly repudiated the Krem-lin’s anti-greenback threats at the G-8 summit in Italy.

The sell off is overIn essence, the worlds captains and kings all have a strategic interest in avoiding a dollar free fall because the world’s bond markets realise the danger of inflation risk due to the money printing spree of the G-8 central banks. It is no coincidence that the money markets now price a Fed rate hike by the November FOMC (Federal Open Market Commit-tee), with the yield on the two-year US Treasury

note at 1.35 basis point. The ten year Treasury bond yield has traded as high as four per cent, double its safe haven low of two per cent, only three months ago. A dollar sell off will mean carnage for the bond market, which could well choke the mortgage refinancing wave in the US at a time when the house prices are still falling and 21mn homeowner mortgages are underwater.

A spike in US Treasury bond yields to four or even 4.5 per cent will also add untold billions to the financing costs of the Obama budget deficit. It will be impossible for the Treasury to auc-tion $2trn in Uncle Sam debt to for-eign central banks if there is even the merest hint of a dollar collapse. The Federal Reserve cannot risk a spike in

inflation costs from expensive imports at a time when con-gressional politics and a 9.4 per cent unemployment rate make a November rate hike impossible. Canada lumber,

New Zealand milk and Aus-tralian mining com-pany profits are be-

ing gutted by the strength in the three commodity

markets.

The German Bun-desbank has no desire to see a

higher Euro at a

PERISCOPE

CONTRARY TO POLITICAL RHETORIC IN PLACES LIKE BEIJING

AND MOSCOW, THERE IS ACTUALLY STRONG FOREIGN

CENTRAL BANK DEMAND FOR US DEBT, AS WITNESSED

BY THE HIGH INDIRECT BIDDERS IN THE RECENT

US TREASURY NOTE AUCTIONS By Matein Khalid

the dollar free fall iS oVer!

Dollar’s slide – putting the brakes

A spike in US Treasury bond hyields to 4-4.5 per cent will add billions to US budget deficit

It will be impossible for the US hTreasury to auction $2trn in Uncle Sam debt even if there is the merest hint of a dollar collapse

A 9.4 per cent unemployment hrate and expensive imports makes a November Fed rate hike impossible

Asian exporters to decelerate hthe rise in their currencies as high crude oil prices erode the regional surplus

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time when industrial production has plunged by 20 per cent, the risk of a Latvian devaluation and Baltic’s contagion is all too real and the frag-mented German Landesbanken are some of the most leveraged banks in the world. Even Peer Steinbruck, the German minister, criticised the recent Euro rise, a natural reaction since he refuses to disclose the indi-vidual details of European bank stress tests. The Asian exporters have even hinted that they could intervene to decelerate the rise in their currencies at a time when high crude oil prices have eroded the regional surplus. The geopolitics of finance has flashed an unmistakable message: the dollar sell off is over!

Trend reversalIt is significant that strong US eco-nomic data now triggers dollar buying, not dollar selling, as we saw after May payroll’s fell only 345,000, far below the consensus minus 505,000. This is because the lower US current ac-count deficit means the dollar’s value

is determined by foreign central bank buying of US dollar assets. Contrary to political rhetoric in places like Beijing and Moscow, there is actually strong foreign central bank demand for US debt, as witnessed by the high indi-rect bidders in the recent US Treasury note auctions.

US dollar money market rates have overshot their peers in German Bunds and Japanese government debt, a reliable advance indicator of dollar strength. The credibility of US monetary policy only increases with all the talk in the capital markets about exit strategies, the Fed balance sheet, quantitative easing and steep-ness of the dollar yield curve. A coun-ter cyclical dollar rally is coming this summer. The Euro can fall as low as 1.35, the Yen is headed to 104-106, Sterling can well fall to 1.54 against the greenback.

A dollar rally has profound implica-tion for crude oil prices and could well trigger a correction in GCC equities.

A $70 oil price is simply not sustain-able with a fragile global economy, the highest inventories in the West since the early 1990’s and a potential Saudi Arabian output rise as the US Senate protests against the surge in black gold. There are more than 130mn bar-rels of crude oil and diesel stored in offshore tankers, and these supplies will hit the spot markets.

OPEC compliance is slipping, with Ecuador, Angola, Iran and Nigeria in defacto non-compliance. The surge in the crude oil from $32 to $70 in four months was due to the plunge in the dollar in the currency mar-kets, not any real exchange in the supply-demand equation. If the dol-lar rises to 106 Yen or 1.35 Euro, crude oil prices can well fall $20 to as low as $50. This is definitely a tan-gible risk to the current bull run in Gulf equities.

The author is a renowned investment banker based in Dubai

34 July 2009

ussain Ahmed Ghuloom, CEO, Al-Waqia Shoes Com-pany, sits in his office with a frac-tured ankle. The

mishap which took place during a game of squash means that his feet is going to be plastered for the next two months. Ironically, a broken ankle is the least of his worries, as Ghuloom grapples with bigger challenges fac-ing his business. “Our sales are down by almost 35 per cent, our exports by 40 per cent and local sales have gone down by 26-27 per cent,” he says stoically. Europe, one of Al-Waqia’s biggest markets is the worst affected. Spain, where the company sold 9,000 pairs of shoes in 2008 and 28,000 pairs in 2007, has completely dried up. The UK, Poland and Switzerland markets have stagnated. In the GCC things are no better with sales in Sau-di Arabia, the biggest economy in the region plummeting by 75 per cent, Dubai and Qatar are no better.

Al-Waqia shoes is not the only com-pany that has been impacted adverse-ly by the global economic meltdown – Technique LLC, a multi-product trading, engineering and service com-pany has seen a 16 per cent drop in trade volumes during the first quarter of 2009. Says Nick Moulton Thomas, general manager of the company, “We have a large industrial sales di-vision which deals with paints, lubri-cants, marine paints and fire resist-ant paints. Since many projects are going slow this is forcing people to

Having been pushed to a corner by the global financial crisis,

companies in Oman are fighting back with novel ideas, inventive

solutions and creative thinking. Mayank Singh reports

COVER STORY

hussain Ahmed ghuloom, CEO, Al-Waqia Shoes

buy less paint or to postpone their decision to repaint.”

Go slow mode The slowdown of projects is also forc-ing companies to go back to the draw-ing board. National Gas which supplies LPG, has not been affected in its pri-mary business as the consumption of domestic gas has remained unaffected, but its engineering of gas systems busi-ness which comes under Innovative Energy Systems (Inersys) a joint ven-ture company between National Gas owned Shoulat al Aman and Ashtech

Gas Engineering & Services of UAE is facing the brunt of the slowdown. Says Goutam Sen, general manager, Nation-al Gas, “Engineering of gas systems is linked to projects and so its perform-ance has been impacted.”

Three major projects that the compa-ny was looking forward to have been delayed for one reason or the other. On one project though the company got a letter of intent four months back, it is still awaiting an advance to start construction. Another project that the company won has not taken off, but

35 July 2009

mercifully the company has not com-mitted any resources to the venture. “The vibe that we get is that most peo-ple are going slow,” says Sen.

A’Saffa Poultry Farms which com-pleted a major capacity expansion in February 2009, got caught on the wrong foot due to the slowdown. The company’s production went up from 31,000 chickens a day (12mn chick-ens a year) to 52,000 chickens a day (16mn chickens a year), post expan-sion. The initiative cost the company RO9mn and was was partly funded by doubling the company’s equity base from RO5mn to RO10mn. “Unfortu-nately our expansion came on stream right in the middle of the economic downturn in the months of March, April and May. Due to this the pur-chasing power of people got reduced by 20-25 per cent,” says Dr Nasser al Mauly, CEO, A’Saffa. This affected the off-take of its products in supermar-kets and hypermarkets, forcing the company to look for newer markets to absorb the extra capacity.

HittingcashflowsThe reduced off take in hypermarkets is corroborated by others like Nation-al Mineral Water Company (NMWC). Says Pankaj Chugh, its general man-ager, “Sales in hypermarkets are down by 30-35 per cent. Though most of this erosion comes from non-essential items like garments and electronics, this indirectly has an adverse impact on us as our payments get delayed.” As a result, the payments which NMWC used to get within 90 days has now been stretched to 120 days. The chok-ing up of inter-company cash flows is creating an artificial liquidity crisis in the market.

The malaise is not just restricted to Oman, The National Detergent Com-pany (NDC) has encountered similar issues in Saudi Arabia. Though the company extended the payment win-dow from 90 to 120, it was still find-ing it difficult to recover its payments. Says V Sundaresan, director and gen-eral manager, NDC, “We have become strict on delivery, if a party does not

goutam sen, General Manager, National Gas

for larger firms, so if the bigger com-pany faces a problem, it automatically filters down to the SME. Smaller play-ers do not have strong cash flows as large companies, so even a few de-layed payments can prove to be a fatal blow for them. The worst of the lot are SME’s who are entirely dependent on a single company for business. Abdul-nasir al Raisi, head, SME credit and marketing department, BankMuscat explains the spiral effect, “It is a mat-ter of psyche, people have become scared of moving their money – there is a feeling that if one pays others, they may be stuck without cash as their payments may get delayed in future.”

There are reports about bigger com-

June ’09 330

December ’08 230

March ’08 310

March ’08 470

December ’08 307

February ’09 417

June ’09 530

Commodity PricesSOYA – $ PER TONNE

CORN -- $ PER TONNE

pay on time, we keep the subsequent orders on hold.”

A number of small and medium sized companies operate as subcontractors

Source: A’Saffa

36 July 2009

panies in the construction sector forc-ing their suppliers to extend payment periods from 90 to upto 130-140 days. Nakheel, the construction major based in Dubai, has claimedly been using payments as a bargaining chip with its suppliers. The company is asking sup-pliers to either reduce costs by 30 per cent and get the payment right away, or to wait for two-to-three years to get their money. “It is important to keep the money flowing and the government needs to intervene in the matter,” says Thomas. As the cost of borrowing in international markets have moved up, banks are renegotiating their interest rates with companies. On an average interest rates have firmed up by 0.75 to one per cent, adding to the financial burden of companies.

Fluctuation in commodity prices is another challenge for companies. Corn and soya, the feedstuff for chick-ens make upto 70 per cent of the cost

of production for A’Saffa. These commodities are sourced from various countries like Argentina, Brazil, America and In-dia. The price of soya has gone up from $470 per tonne in March 2008 to $530 per tonne in June 2009. Corn processes have escalated from $310 per tonne in March 2008 to $330 per tonne in June 2009. Says Mauly, “We have to absorb the increase in cost and this wreaks havoc on our fi-nancials.”

Apart from a price rise, businesses are also being forced to grapple with uncertainty of supply. AATCO which uses ingre-dients like tomato paste, pepper mesh, egg yolk and oils for its products like ketchups, mayon-naise etc is faced with an unprecedented situation. Says Mahesh Rao, gen-

eral manager, AATCO, “A number of our suppliers have become shaky and the stability of supply has become an issue.” A number of it’s suppliers in China, the US and Turkey have been inserting restrictive clauses like asking for the money upfront before delivery, restraining the company’s cash flow.

More than a match Undeterred by these problem, busi-nesses have been working out novel solutions to deal with the unprece-dented situation. For example, a carrot and stick approach is being employed to deal with errant (cash) defaulters. Companies like NDC, Technique and AATCO have worked out changes in their credit policy laying down harsh-er credit terms for parties that do not pay on time, while discounts are given to dealers who are ready to make a cash payment.

As orders from traditional markets dry up, companies are looking at new markets. All out marketing efforts are being made to break into virgin mar-kets. For example, Al-Waqia shoes is working on tapping the Yemen, Jordan, and North African markets

Dr Nasser al Mauly, CEO, A’Saffa Paultry Farms

Mahesh rao, General Manager, AATCO

COVER STORY

38 July 2009

like Algeria and Tunisia. And the ef-forts are yielding results – in Algeria, it supplied 19,000 pairs of shoes in 2008, while in the first six months of 2009 it has already sold 14,000 pairs. Tunisia which ordered 16,000 pairs in 2008, has been supplied 10,000 shoes till now this year. In Syria, the com-pany got an agent who has ordered 10,000 pairs.

Till November 2008, Al-Waqia had its hands full with existing orders and was reluctant to chase new customers. A firm belief that booking orders and not delivering on time, was a perfect reci-pe for losing customers, the company went slow on scouting for new clients. But a steep drop in sales from Janu-ary this year, forced the company to look for potential clients. “There was a customer in Jordan who had been ap-proaching us for a while, but since we already had a lot of orders, we could not meet his requirements. We wrote to him in March and have started de-livering to him lately,” says Ghuloom.

Faced with a slowdown in the domes-tic market, A’Saffa diverted the extra

month. The company is also exploring the possibility of exporting to Malay-sia and Singapore in future.

Similarly, AATCO is targeting the West African markets like Senegal, Mauri-tania, Luxury Coast, Liberia, Angola and Ghana. Says Rao, “European and US manufacturers will be going slow on these markets and so it is a good opportunity for companies like us.” Though the company has a market in European countries like Holland, Italy, UK, Denmark and others, it is looking at strengthening its presence. The fact that AATCO guarantees good products and an assured supply at a three to five per cent price advantage compared to multinational companies gives it a competitive edge in present times.

Exploring new product linesIn an effort to leverage synergies, companies have also been looking at related areas of business. National Gas for instance tied up with Bharat Petroleum in November 2008 to sup-ply Bharat Metal Cutting Gas (BMGC) in Oman. BMCG is used for cutting steel and works out to be 25 per cent cheaper than asytelene, the traditional cutting option in the market. It also beats its competitor in terms of stor-age – as seven cylinders of asytelene

volumes generated by its capacity ex-pansion to markets like Qatar, Bah-rain, Yemen and Egypt. In April 2009, the company started exporting to Egypt. Yemen, where it was supplying a container (25 tonnes) per month, is now being sold 2-3 containers a

Nick Moulton Thomas, General Manager, Technique

Pankaj Chugh, General Manager, National Mineral Water Company

COVER STORY

40 July 2009

are equal to one cylinder of BMCG. Says Sen, “We have captured 15 per cent of the market since its launch in November 2008 and are looking at a 50 per cent marketshare.”

Inersys has plans of getting into nat-ural gas, by setting up intermediate stations to supply gases like Methane to industrial customers. The gas is supplied from the source till the in-termediate station by the government and carried forward by the specialist company. Inersys has tied up with RMG, a German company, which specialises in setting up intermedi-

ate stations. It has also entered into an agreement with SAG, an alumin-ium downstream firm to supply such gas. National gas is also devising fire fighting systems for users.

Says Thomas, “The choice for com-panies is to either increase volumes or price and since both of these are extremely difficult in the prevailing circumstances, we have little choice apart from innovating.” Technique has a specialist paint which is used to refurbish forts. Though the company fabricated the paint six years back and used it for painting one fort, the prod-

Company Challenges Innovative measures being taken

Al-Waqia Sales down by 35%, Exports down by 40%, local sales by 26-27%

Tapping new markets like Yemen, Jordan, Algeria and Tunisia•

Technique LLC 16% drop in trade volumes in Qtr 1, 2009 Reviving a specialist paint for forts • Looking at the governments’ thrust on renewable energy for business•

National Gas Slowdown in 3 projects affecting its sister concern Inersys

Tied up with BP to supply Bharat Metal Cutting gas for steel• Getting into supply of natural gas along with RMG• Diversifying into fire fighting systems•

A’Saffa Poultry Farms Slow offtake due to a 25% reduction in purchasing power

Getting into new markets and increasing volume to existing markets • like Qatar, Bahrain, Yemen, Egypt, Malaysia and Singapore

National Mineral Water Recovery issues as credit periods have stretched from 90-120 days

Opened a trading Company Value Deal Trading to distribute new • products Redesigned trucks to carry more products• Realigned truck routes for better efficiencies•

National Detergents Recovery issues in Saudi Arabia Relaunched No.1 its detergent powder with FWA agents• Braodbasing its raw material sourcing base•

AATCO Shaky suppliers using restrictive clauses Exploring new markets like Senegal, Liberia, Angola, Ghana and • strengthening itself in EuropeIntroduced new product lines like honey mustard sauces, dressings, • vinaigrettes

OER5cm x 11cm

uct has been largely unused since then. The company is now looking at reviv-ing the business. A new manufacturing process to fabricate the paint has been put in place and Technique is talking to the Ministry of Culture about pro-spective business opportunities. Given the governments thrust on renewable energy, potential has floated a division to look into solar and wind energy as the company cash generator.

Faced with an erosion of marketshare in the washing powder segment, NDC relaunched its No. 1 detergent, in No-vember 2008 with FWA (fluorescent whitening agent). The relaunch was backed by a market promotion help-ing the product to gain lost ground. To counter the erratic supply of raw materials like sulphuric acid and ben-zene the company has been braod-basing its sourcing options. “We buy from China, India, Europe and our effort is to do beneficial mate-rial substitution wherever possible,” says Sundaresan.

Rejigging products to suit the chang-ing tastes of the market is something that other companies are also working

COVER STORY

42 July 2009

on. AATCO has introduced new prod-uct lines like honey mustard sauces, dressings, vinaigrettes. Says Rao, “We have to innovate to attract consum-ers. The effort is to give a value add for the same price.” The company elic-ited a good response for its products during the Gulf Food exhibition held from February 23-26, 2009 and it is looking forward to Anuga, the world’s biggest food exhibition to be held in Germany in October this year.

NMWC has floated a new company called, Value Deal Trading (VDT). The new company is supposed to service clients with NMWC’s other products. The company has redesigned its trucks which carry its bottled water brands like Tanuf and Salsabeel, to distribute other goods. Thus the same vehicle is now used to distribute Tanuf tis-sues, Juju packaged drinks, sparkling flavoured water and Red Bull (which NMWC distributes). Says Chugh, “Our trucks are like shops which can de-liver anything. The choice is to either shrink and fit or to adopt and grow.” The company’s average revenue per truck in the last two years has grown helping it to do a turnover of RO7.2mn in 2008. It has also entered into an agreement with Shaktibhog Atta and Milkfood Ghee from India to distrib-

ute their goods in the Sultanate. It will also be distributing the CAMEL brand of nut products as a part of its deal with Seng Hua Hng Foodstuff. A veg-gie wash that can be used to wash veg-etables and fruits is also on the cards.

Tightening seatbeltsGiven the slowdown, a rationalisa-

tion of costs is no longer a choice but a necessity. Most companies are discovering the value of being pru-dent. National Gas implemented an online fleet monitoring system a year back. The IT system works as a logis-tics controller, giving the company updates on how its trucks are being utilised. NMWC, has rationalised its truck routes, for its 75 strong fleet. The exercise has helped it to cut two routes. As offtake dropped in the first quarter of 2009, the company rea-ligned its routes – so a truck covering four hypermarkets was given a few more supermarkets on or close by, helping it to save money.

Says Raisi, “There is no person or entity that has not been impacted by the crisis. The good news is that every failure creates opportunities for others to do the same business better.” The silver lining is that the crisis is forcing companies to cut flab, reduce redundancies and get more efficient. While the fittest will survive the weak and inefficient will perish. After all getting back on one’s feet whether it is a game of squash or a business requires agility and fitness.

Abdulnasir al Raisi, Head, SME Credit & Marketing, BankMuscat

V Sundaresan, Director and GM, The National Detergent Company

COVER STORY

44 July 2009

he legal and judicial systems in Oman have witnessed remarkable development since the beginning of the Ren-aissance under the wise

leadership of His Majesty Sultan Qa-boos Bin Said. The Sultanate of Oman has maintained an integrated modern legislation and courts which are com-parable to their counterparts in the de-veloped countries. In order to achieve these objectives a Ministry of Justice was established in the Sultanate which was followed by a specialised Ministry of legal affairs. It is worth mentioning that prior to the year 1971 the judicial system in Oman was limited to Sha-riah courts in Muscat and other courts were scattered in the different regions. Such courts were composed of a sin-gle judge and a secretary who used to hold sessions at Wali Majliz. At that point of time the Sariah Judiciary had the general jurisdiction to enter-tain all civil, criminal suits and other Shariah matters.

Due to the development witnessed in the economic, social, commercial, and political life in the Sultanate of Oman, a number of legislations have been is-sued. The legislation in the Sultanate can be divided into two – the first of which is represented by the laws which constitute the main legislations and are normally issued by Royal Decrees whilst the second type is a subordi-nate legislation normally issued in the form of Ministerial decisions and Ex-

ecutive Regulations by the cabinet of Ministers or the concerned Ministries by virtue of specific powers granted by virtue of Royal Decrees.

The basic law of the state comes at the top of the hierarchical legislation sys-tem in the Sultanate of Oman and it is known as the basic law. His Majesty in November 1996 issued Royal Decree No. 101/1996, which forms the basic law of the state. The said law contains a number of matters and aspects that specifies the form of the state and its political system, public authorities, rights, freedoms, duties and economic and social affairs as well as the politi-cal principles of the Omani commu-nity. Article 2 of the basic law of the state provides that Islam is the official religion of the Sultanate of Oman and that the Shariah provisions are the ba-sis of legislation and other laws.

The enactment of these modern leg-islations calls for the establishment of new courts, hence Police penal code has been established by virtue of the Royal Decree No.(7/74) and thereafter the said court become the Penal court which has been established by virtue of the Royal Decree No.(25/84). Also the authority for the settlement of commer-cial disputes was established by virtue of the Royal Decree No.(13/97) to be the judicial authority having jurisdic-tion to entertain commercial dispute and thereafter it has been replaced by the commercial courts by virtue of the Royal Decree No. (13/97). The land af-

fairs committee has been established by the Royal Decree No. (6/72) as well as the lease dispute committee which has been established by the Royal De-cree No. (4/73).

Overall jurisdiction Whereas the above mentioned courts and committees, which have judi-cial jurisdiction were not subject to a single body, they were subjected to a number of bodies in charge of su-pervision and organisation of their affairs. The remarkable legislative development in the Sultanate and the practice of the judicial bodies and the various courts all of which have ne-cessitated the integration of the judi-cial system in the Sultanate of Oman into one hierarchy body at the top of which comes the Supreme court which is in charge of the integration of the judicial principles. The basic law of Oman has challenged the problem of the integration of the judicial system and its independence by providing for the same in a special chapter enacted mainly for the judicial system and the principle of the sovergnity of law. In order to achieve this objective the first judicial authority law in the Sultanate has been issued by virtue of the Royal Decree No.(90/99) on November 21, 1999 which has been followed by the Royal Decree No. (91/99) which es-tablished the Administrative court. The administrative court has juris-diction to entertain administrative disputes. The public prosecution has been established by virtue of the Royal

THE SuLTANATE OF OMAN HAS MAINTAINED AN INTEGRATED

MOdeRN legISlATION ANd COuRTS WhICh ARe COMpARABle

TO THEIR COuNTERPARTS IN THE DEVELOPED COuNTRIES.

HERE IS A LOOk AT THE ORIGIN AND DEVELOPMENT

Of ThIS ReMARkABle SySTeM

CLOSE UP

By Ali Khamis Al Alawi

CLOSE UPLEGAL

JUDICIAL SYSTEM IN OMAN

Decree No. (92/99) which is in charge of the public suit filed on behalf of the community and supervises the judi-cial control affairs and it applies penal laws and other jurisdictions provided in the law. The public prosecution is a separate judicial entity whilst in the past it was subjected to the supervi-sion of the police general inspector from an administrative point of view.

Taking into consideration the huge Royal decrees and legislations enacted, the Sultanate is currently maintaining an integrated judicial system compris-ing of two types, the first of which is an ordinary judicial system represent-ed by the various courts scattered in the different regions and wilayats of the Sultanate arranged in a hierarchal manner starting by the primary courts, court of appeal which entertain appeal filed in respect of the judgment passed by the primary court. At the top of the hierarchy is the Supreme court located in the Muscat governorate, and the Supreme court being a court of law has a jurisdiction in respect of petition by cassation filed in respect

to the judgment issued by the courts of appeal. However, the work is these courts has been divided between vari-ous circuits to entertain civil, commer-cial, Shariah, labour, penal etc. suits. The second type of the judicial system is represented by the administrative court which is considered to be one of the most important courts when compared with its counterparts in the Arab Region. However the Sultanate of Oman is proud of the judgment is-sued by this court which respects the sovergnity of the law regarding the judgment issued by the council of the French republic which stands as an initiator of the Administrative judici-ary in the world. The administrative court established an appeal circuit to entertain appeals and petitions filed in respect to the judgments issued by the preliminary circuit of the administra-tive court. Moreover, the administra-tive court established a branch in the wilayat of Salalah to entertain admin-istrative disputes that could take place in the Dhofar region and in order to lessen the burdens on the shoulders of the disputing parties.

In brief, the Sultanate currently en-joys an independent judicial system, which is deemed to be one of the most important securities and tools for the achievement of the sovergnity of law in Oman. Moreover the well estab-lished judicial system in and the leg-islation pertaining to investment has played and is still playing a vital role in attracting investment to the Sultan-ate apart from the role of development by the privatisation projects. The legal legislations enacted in the Sultanate has helped in the stability of the bank transactions taking into consideration that banks and finance institutions have a major role in the comprehen-sive developments in the Sultanate of Oman. However, many investors feel comfortable to invest in the Sultanate of Oman without any hesitation due to the sufficient securities provided for each investor, the matter which could be evident from the foreign in-vestment brought in the Sultanate of Oman during the recent years.

The author is an advocate, legal consultant and managing partner of Al Alawi & Co.

46 July 2009

MEDIA

hough Private FM ra-dio stations started just over two years ago, with Hala FM taking off in May 2007 and Al Wisal in March 2008, the

media has taken remarkable strides in a short span. Al Wisal, the Arabic fM radio station from SABCO Media has claimedly acquired a market pen-etration of over 35 per cent, in a year since it was launched. The station set a record of sorts by penetrating 18 per cent of the market within six weeks of its launch. Penetration levels are based on the number of people who heard a radio station a day before.

Al Wisal is

redefining radio

with its innovative

programming, state-of-

the-art infrastructure

and customised

options for clients.

Mayank Singh reports

Eihab Abutaha General Manager, SABCO Media

47 July 2009

And the initial success of the media has not gone unnoticed. Says Swaminath-an J, media manager, universal Media, “Radio has evolved as a media and cli-ents are serious about using it. Radio has certainly become a part of the me-dia plan of clients, but since Oman is a cost sensitive market clients are cau-tious about the amount of money that should be invested in radio.”

Reinforcing the messageRadio serves as a big reminder medi-um. It also gives clients the choice of communicating with various segments of the market at different times of the day, across a wide geographic spread, whether they are travelling in cars, sitting in coffee shops or shopping at malls. Says Eihab Abutaha, general manager, SABCO Media, “fM enter-tains listeners and it is a powerful plat-form for clients to reach out to their audience interactively and effectively.

Second, radio lends itself to creating “out-of-the-box” solutions for clients and the sky is the limit. Al Wisal has created promotions for BankMuscat, Qurum City Centre (QCC), Nissan Nawras and many others. The station did a promotion out of QCC, wherein live broadcasts were done involv-ing shoppers, outlets and the various brands on display. According to QCC officials, the promotion led to a 30 per cent increase in footfall. In the automo-bile sector, live broadcasts out of show-rooms helps dealers to attract buyers. Radio, by any standard is an extremely powerful media when used effectively.

The clutter in pan Arab television makes it difficult for media buyers to take a pick. “There are 1,100 television channels to choose from in the region, making the medium extremely frag-mented,” says Swaminathan. A back of the envelope calculation shows the cost effectiveness of radio. Creating a 30-second television commercial on a popular channel can cost as much as RO50,000. A full page colour ad-vertisement in Gulf News can cost as much as Dhs50,000 (RO5,000). In local dailies in the Sultanate this can range upwards of RO3,000 (card rate

before discount). Compared to this a 30-second spot on Al Wisal costs RO70-120 based on the programme on which the commercial plays out. “Thus for the same amount of money one can get far more frequency and depth on radio compared to other me-dia,” says Eihab.

Market segmentation Segmentation of listeners is another strength that radio offers. As a rule of thumb 70-75 per cent of radio listening happens while driving. And with traf-fic snarls getting worse by the day, the time spent on the roads by commuters is growing, which augurs well for the medium. On the flip side appealing to this variegated audience poses its own set of challenge. The fact that Oman has a big base of Arabic listeners, un-like Dubai, which has a predominant expatriate population makes the task more onerous. Generating high qual-ity content is thus a necessity. Al Wisal has gone about defining its pro-gramming based on the needs of its listeners. Says Eihab, “The content is discussed and debated minutely as a part of the internal strategic approach because content development is what defines you as a radio station, in terms of character, style and personality.”

The stations programming revolves around music and talk shows. It also has news on the hour, keeping listen-ers updated. The station is constantly upgrading content in line with the evolving style and tastes of listeners. But with numerous stations on air, do people have a tendency to switch between stations? Eihab counters the

charge, “People switch only during non-prime time. Our music selection is fine tuned – in terms of how to play, what to play and when to play that it minimises switching. Radio is gener-ally a new medium and people may switch to experiment or to enjoy a song elsewhere. However, there will always be a favourite.” Al Wisal is working on projecting a brand image and charac-ter that conveys its core values of being joyful, dynamic and yet being socially responsible and closely connected with its community. The various colours used in the brand reflect the stations promise of being an enjoyable, mature and exciting medium. Piscatchio green highlights growth and development; light burgundy stands for togetherness and magenta is about a feeling of com-munity and people.

Some way to goOman with its mountainous terrain and a geographically dispersed popu-lation poses a big challenge for radio stations. To reach communities be-yond the Batinah area requires strong transmission equipment. Al Wisal has doubled its transmission strength in the last two months reaching out to new listeners. The station also started broadcasting out of Salalah recently.

The lack of a strong FMCG sector in terms of advertising is another lacu-nae for radio stations in Oman. Says Swaminathan, “Oman is an automo-bile and banking dependent market, whereas television and radio thrive on products that are all about touch, feel and buy.” Though the govern-ment has relaxed rules pertaining to radio, a number of operators are still to launch operations. Thus there are only three private radio stations on air right now – Al Wisal, Hala and Hi FM. The government has its own stations like Oman FM.

Eihab sums up, “Media is an impor-tant strategic growth area for the SAB-CO group. SABCO Media is a unique platform of communication chan-nels in radio, outdoor and publishing and Al Wisal is an important pillar under this platform.

35 per cent market penetration z

A good mix of music, talk shows zand news

Customised solutions for clients z

Started broadcasting out of Sala- zlah

Doubled its transmission strength z

Al Wisal – new highs

50 July 2009

ENTREPRENEUR

any forces keep Arab women away from being active participants in the economic cycle of their countries.

With women making up half of any soci-ety it is important that they are involved with the economic process of any coun-try. A number of women in the Sultanate lack the guidance of an agency that can help and provide them with the required support and finance for their ventures. Given such odds a number of women have started using their homes as a base to start a business.

The government on its part is working on helping Omani women to start their own businesses. Says Sahar Al kaabi, member of the board, Oman Chamber of Commerce and Industry and chair-person of Human Resources and Work Market Committee, “From a social perspective the government leaves no stone unturned to reduce the number of unemployed in our country. Home business is a good idea and contributes in creating a large number of job op-portunities. Moreover, working from home helps Omani women to maintain her traditions and habits and avoid any inconvenience that may be caused from being away from home for long hours.”

A home based enterprise needs support to expand into a small and medium sized enterprise. Getting a legal status will help such ventures to benefit from the finance and support provided by different organisations to small ven-tures. The government is working on giving such businesses a legal standing. Says Sahar, “The law will provide sup-port to women by granting them per-mits to work from home and help them to receive training and find marketing outlets for their products.”

We profile four women entrepreneurs who started a business out of their homes only to go onto bigger things.

Turning dreams into realityMunira Al Nabhani, the winner of the Shell’s Inti-laaqah Entrepreneur of the year Award in 2008 is one such example. Munira started out with a one room studio in her house, spending RO500 on buying the initial photog-raphy equipment. Her hard work paid off and in four

Given various family commitments and societal norms starting

a business out of one’s home is an option that women in the

Sultanate can consider seriously. Rana Alawneh profiles four women

entrepreneurs who have done so successfully and moved on

Munira al nahbaniProfessional Photographer and winner of the Shell Intilaaqah Entrepreneur of the Year Award in 2008

51 July 2009

years she established her reputation as a professional photographer in the market. By the end of 2006, she had rented a shop in the commercial area behind Hatat House in Muscat.

Talking about the need to shift premises she says, “My customer base was growing. Moreover, whenever a lady came to my house accompanied by her husband or brother, it caused some sort of a inconvenience. So I felt it would be better if I had my own stu-dio.” The move has also paid off finan-cially – while she earned RO500-800 per month earlier, now the figure has jumped to RO1,000 per month.

Emboldened by her success she is planning to open a new studio in Al khuwair. Having started off with shooting wedding and other family events, she has graduated to taking pictures of official events and ministry functions. A firm believer in reinvest-ing in her business, Munira constantly upgrades her equipment. She says, “I will use the RO5,000 award from In-tilaaqah to expand my business and to move to another area where the busi-ness potential is more.”

Munira has converted a childhood passion for photography into a lucra-tive career. And she acknowledges the help of her family. “I trained at the Omani Association for Fine Arts before starting out as a professional and have received considerable sup-port from my family. My husband helped me in opening and setting up the accounting and cost systems in my new shop.”

A whiff of freshnessNoor Al Barami, owner, Al Shmoukh Perfumes and Incense is another ex-ample of someone who has overcome daunting challenges with hard work, dedication and entrepreneurship. Says Noor, “I noticed that most peo-ple preferred to use Dhofari perfumes due to their high quality and integ-rity, unfortunately there are not too many options in Muscat to get this

kind of perfume or incense.” Having seen her mother and grandmother making such perfumes at home, she always cherished the desire to take these to a larger market. Busy with raising her children and other family commitments, she kept putting aside the idea. “Once my children grew up and became self reliant, I went ahead with my plans.”

Noor started out at home with a seed capital of RO200-400. Encouraged by the initial success she wanted to move to a bigger premise. This raised the is-sue of finance, “To establish a shop I needed bigger capital as I had to pay rents, salaries and provide consider-able quantities for display.” She bor-rowed money from her friends and relatives to raise her share of the

Sahar al KaabiMember of the Board, Oman Chamber of Commerce and Industry and chairperson of Human Resources and Work Market Committee

52 July 2009

ENTREPRENEUR

RO25,000 that was required to lease a shop at the Jawharat Al Shatti mall. Nora co-owns the shop along with one of her friends. “I did not get financial support from any authority. I am now working on a feasibility study to sub-mit it to the respective departments to get the required finances to expand our business.”

To maintain quality Noor uses the best ingredients in her perfumes. This has helped in establishing a reputation for her products. Having moved out of her small office home office (SOhO) she feels that managing a home busi-

ness is easy as you are in direct contact with customers, most of them being family members, friends or acquaint-ances. But opening a shop has created the need to adopt different marketing strategies to ensure customer loyalty.

For example, she took part in vari-ous exhibitions organised by Dar Al Atta and the Muscat Festival. Noor has created certain perfumes and in-censes that are named after members of the royal family (after getting their permission) and the idea has met with customer approval. In an effort to dif-ferentiate her products she started

SaMira al GhaithiOwner, Lovely Lace

using high quality crystals and mini-atures reflecting Omani tradition in perfume bottles. Noor sums up, “De-spite tough competition we have man-aged to create a name for ourselves by producing high quality products that reflect our culture.”

Never say diePersistence leads to success – this has been the motto for Samira Al Ghaithi, owner of Lovely Lace for home decors. A series of failures in selling abayas, night dresses, scarves and cotton made items did not deter her from her pursuit of being an entrepreneur.

On a vacation to Malaysia, she came across home décor items under the Lovely Lace brand name. On an im-pulse she bought a few pieces for RO100 and tried to sell it to her rela-tives and friends. The positive re-sponse saw her going back to Malaysia within six months and this time she returned with a large number of home décor items.

As the business grew she felt that she needed more space to grow the enter-prise. She opened a shop at Al Araimi Complex at a cost of RO40,000. Says Samira, “The turnout at the shop has been good. Although my profit is less compared to when I operated out of home, I am very happy with my suc-cess till now.” Samira has made a con-scious effort to keep her margins low to attract customers. “Customers have been attracted by the fact that the price between the items in Malaysia and here are almost the same.”

The demands of the business makes it difficult for her to spend as much time with the family as earlier, but she makes an effort to split her time between the shop and home. Manag-ing a shop is different from managing a home business in other ways too, “I have to spend more on ads for public-ity,” says Samira.

A supportive family makes her job easier. Her husband provided her with the money to buy her first consign-

53 July 2009

ment and encouraged her to establish her outlet. Her son ensures good and smooth communication with export-ers in Malaysia. “I advise every wom-en not to succumb to failure but keep trying till you turn your dreams into reality,” says Samira. That’s a mes-sage that is sure to inspire a number of others to follow suit.

A flying start Amal Jawad Sultan, owner of Faisal Jewellery, got the idea of opening a jewellery shop from her husband who has had a long experiences in the field. She started her venture in 2003 with an initial corpus of RO5,000. The money was spent on buying jewellery and showcasing them to her relatives and friends. In a short span of time she managed to pro-mote a considerable number of items and saved enough money to buy her first complete collection of jewellery.

She expanded the business by getting

bank loans. Says Amal, “These bank facilities have helped me in setting up and expanding my business.” Amal has recently opened a store at the Capital Commercial Center (CCC) which is named after her son – ‘Faisal’.

She attributes her success to good communication skills and having a place in her house to display jewel-lery. A focus on delivering good qual-ity products at a reasonable price

have been other factors that have contributed to her success. Amal takes every possible opportunity to promote her products. “One day I heard that Dar Al Atta was organis-ing a fashion show. I proposed the idea of showcasing some of my jewel-lery at the show and it was received very well. I have also participated at a number of exhibitions that showcase different styles of abayas and jewel-lery,” she says.

aMal Jawad SultanOwner, Faisal Jewellery

OER5cm x 11cm

54 July 2009

Food Security Saudi Arabia, Qatar and the UAE zare looking towards Asian and African farmland

According to International zFood Policy Research Institute (IFPRI) GCC governments have implemented deals of over 950,000 hectares on the African continent

In Asia GCC governments have zabout 430,000 hectares

The Qatar Investment Authority zhas a $60bn fund dedicated to food and energy investments

Saudi Arabia has a dedicated zstate investment group worth $800mn to target agricultural projects abroad

The SO-CAlled “lANd gRAB” BegAN lAST yeAR AS The fOOd

PRICE CRISIS CONTINuED TO SPIRAL OuT OF CONTROL. RICH

NATIONS heAdINg TO pOOR, BuT feRTIle, COuNTRIeS TO

SECuRE FOOD FOR THEIR POPuLATIONS WAS A CONCEPT THAT

hAS NeveR BeeN SeeN ON ThIS SCAle

ECONOMY

By Oliver Cornock

t the OER Top 20 Debate and Awards event held on May 31, 2009, HE Maqbool bin Ali Sultan, Min-ister of Commerce

and Industry, cited the two greatest “new challenges” currently racking the minds of government officials: in-flation and food security. The two are in fact intertwined. Between the start of 2007 and mid-2008 the food price index rose by 78 per cent, according to research by the Economist. In an ef-fort to avoid a shortage Oman stock-piled flour and grain, causing, in part, inflation to swell to a peak of 14 per cent in mid-2008. This figure has now eased to 4.9 per cent as of April and food prices have fallen off their peak. But food insecurity will continue to plague Oman, along with many other countries, thanks to expanding global population and declining farmland productivity.

The impetus to secure reliable food supplies has led Saudi Arabia, Qa-tar and the uAE among others to look outside of their arid borders towards Asian and, more frequently, African farmland as a means to feed their populations. In these offshore farming deals long-term leases (usu-ally 50-99 years) on arable land are

exchanged for investments or the promise of investment in the host country’s infrastructure.

UNCTAD studyWhile Oman has yet to indicate it will follow this course, HE Maqbool re-cently announced he was enlisting the help of uNCTAD to conduct a study on feasible solutions to the country’s food problem. Iraq has also been so-liciting agricultural investment within the Gulf, with a recent invitation to develop its agricultural lands on a long-term lease. It will be months be-fore the results of the uNCTAD study are released but many expect offshore farming – in the style of neighbours like Saudi Arabia and Qatar – to be a likely prescription. Should these ob-servers be proven right, the Sultan-ate would have the benefit of learning from its predecessors’ experience.

According to research released in April by the International Food Policy Research Institute (IFPRI), GCC gov-ernments or their investment authori-ties have signed, requested or imple-mented deals that amount to over 950,000 hectares (ha) on the African continent, excluding deals for which no details were released. In Asia the same figure is about 430,000 ha. host countries are rewarded with loans or

OvErSEAS FArMINg: NEw COLONIALISM Or NEw CApITALISM?

021_300_2mbed_205x270_EcoReview 1 11.05.09 15:09

56 July 2009

financial support for infrastructure development, along with a nominal land fee. The Gulf obviously has the funds to back up such promises: the Qatar Investment Authority (QIA) has a $60bn investment vehicle dedi-cated to food and energy investments around the globe, along with a $1bn fund specifically for agriculture invest-ments in Vietnam. Saudi Arabia has a dedicated state investment group worth $800mn to target agricultural projects abroad. The potential is cer-tainly there for a symbiotic exchange between countries rich in capital and those blessed with fertile soil. In the case of the deals between the Gulf and Africa, the latter needs infrastructure development while the former cannot meet domestic food demand without a massive import bill.

At a June World Economic Forum meeting in Cape Town, the World Bank vice president of the Africa re-gion, Obiageli katryn Ezekwesili, said the continent would require $80bn in annual investment to be competitive in the global economy. Agriculture is one of the few sectors that have remained attractive during the credit downturn and now that investment appetite and oil prices have both started to pick up again, the Gulf’s farmland investments could give Africa a hearty push towards Ezekwesili’s ambitious prescription.

An uN official has been quoted in the international press as saying offshore farming deals could be “part of the so-lution” to Africa’s troubles. However a successful give-and-take relationship will occur only if both host and inves-tor country are aware of the sensitiv-ity required in brokering land deals in chronically impoverished countries where hunger remains a stubborn is-sue. The first-ever extensive report on this new wave of farm deals – charac-terised by massive scale and govern-ment, rather than private, involve-ment – is aptly subtitled “Risks and Opportunities.” It studies five sub-Saharan African countries and was re-leased in May by the IFPRI in cooper-ation with the FAO. It draws attention to problematic leases, in which land

The author is Regional Editor, Oxford Business Group

ECONOMY

of dubious ownership (small farmers, who make up 70 per cent of Africa’s population, often do not have access to formal land deeds) is swapped for abstract, often vague promises of in-vestment. Endemic corruption in many African and Asian host coun-tries and a lack of contractual trans-parency leaves much room for doubt amongst local shareholders that they will see tangible benefits.

Potential backlashThe report also notes what some may consider the blatantly obvious: using the farmland of countries with either perennial food shortages or famine to export food engenders political oppo-

sition, both within domestic and inter-national circles. Indeed, residents of the land in question have been known to stage fierce protests when their land is put up for sale, leaving some investor countries wondering if there isn’t a better way. In Madagascar, for example, South korea’s failed attempt to lease an area the size of Qatar on the island nation led to the overthrow of a government. More recently, ken-yan conservationists have threatened to “fight to the death” against a deal that cedes 40,000 hectares in the Tana River Delta – along with its rich array of biodiversity – to Qatar in ex-change for a $2.5bn loan to build a deep-water port.

However the various promised in-vestments, if implemented properly, would likely benefit the very share-holders protesting. Better roads, for example, would allow farmers to get their produce to market more quickly. The solution to extracting the greatest benefit out of these deals while mini-mising risk could lie in international

monitoring, says the report.

Momentum is gathering amongst de-veloped countries calling for stricter regulation and greater oversight to ensure contractual promises are met. Japan is leading the calls from G8 countries to bring in tighter regula-tions and an international body to oversee the implementation of every aspect of lease contracts. The African union too is pushing for an interna-tional overseer.

Moreover the rise in overseas farming comes at a time that could be most broadly defined as a “stress test” for the global capitalist system. The financial crisis fallout has no doubt weakened the trust many held in the merits of the international free market system. Slow signs of recovery have allayed some of these fears and the world’s clock will no doubt keep ticking to the tune of globalised capitalism. But it is in this make-or-break moment for a new, more stable capitalist system that the Gulf – and perhaps Oman in the fu-ture – are forging a rather novel form of global venture, that is, government-funded offshore farming.

While they have certainly garnered their fair share of controversy in the media, farming deals have the potential, with the proper oversight and implementa-tion, to illustrate the constructive value of capitalism as well as its ability to adapt to a world of increasingly limited resources and narrow the gap between the rich and poor.

Should Oman, a net-importer of food, choose to follow the path of its GCC neighbours and tend fields outside its borders, it would be well-placed to model a form of truly mutually-bene-ficial offshore farming arrangements. Besides increased food security, the Sultanate would also gain good marks for its international reputation for a clean farm deal in developing coun-tries – a factor that should not be un-derestimated.

SNAp STATS Between the start of 2007

and mid-2008 the food price

index rose by 78 per cent

COUNTRY REPORT

PRimE DEsTiNaTiON fOR iNvEsTmENT aND TOURism

Turkey

• COUNTRY Of immENsE bUsiNEss OPPORTUNiTiEs DURiNg glObal ECONOmiC slOwDOwN

• PERfECT TOURism DEsTiNaTiON wiTh ThE bEsT Of bOTh wORlDs

60 July 2009

he moment one gets down at the Istanbul Ataturk International Airport one can feel the vibrancy in the en-vironment. Scores of

people are rushing in to catch their flight and many more are exiting from the airport to move on to their desired destinations in Turkey. With the airport brimming with so much of action, it indicates that the claims of the Turkish government that the country on the crossroads between the continents of Europe, Asia and Africa is successfully managing the challenge of global recession are legit-imate. Don’t believe it yet? According to The Economist magazine, foreign investors remain highly optimistic about Turkey’s stance during the glo-bal financial turmoil. Many economic developments taken place during the last few weeks confirms The econo-mist’s view point.

The Pull FactorZaman-Ford Otosan, a joint venture between uS automotive giant Ford and Turkey’s largest industrial con-glomerate, koc Holding, has just started exports to the uS. Ford has never before exported cars to its home country from a Ford factory in europe, and Turkey will be the first European country to export Ford cars to the “homeland”. The Turkish automobile manufacturer Tofas, a joint venture between Italy’s Fiat and koc Holding, will invest around EuR 300mn this year in its new research and development (R&D) activities, as well as new products. Turkey is continuously boosting its power in the automotive sector. The country, exporting automobiles to more than 100 countries all over the world, also supplies crucial spare parts for many countries. Sarigozlu Hidrolik Makine ve kalip Sanayi, a company operating in the Aegean province of Manisa, is manufacturing castings for ten big brands, including Porsche and Jaguar.

The uS private equity Global Envi-ronment Fund (GEF) is eyeing Tur-

COUNTRY REPORT

THE EuRASIAN STATE IS MAkING ALL EFFORTS TO MINIMISE

The IMpACT Of glOBAl eCONOMIC SlOWdOWN ON ITS

eCONOMy. AkShAy BhATNAgAR RepORTS fROM TuRkey

The Rise andRise of TuRkey

61 July 2009

key’s growing alternative energy sec-tor. GEF, managing a total of $1bn worth of funds globally, aims to widen its investments in renewable and al-ternative means of energy. Another notable addition to energy invest-ments in Turkey comes from Edison SpA (EDN.MI), a leading Italian en-ergy company. The company plans to invest EuR 1bn for expansion in the southeastern Mediterranean area. In yet another development, an en-ergy partnership between the German company enBW and Turkish con-glomerate Borusan holding has been signed to invest EuR 2.5bn over the next 8-10 years. The joint venture will focus primarily on renewable energy and make an investment to produce 1,000 megawatts (MW) of power af-ter completing 17 projects, with a final target of 2,000 MW.

The Turkish pharmaceutical market, with an annual volume of $10bn, has drawn the attention of Japanese in-vestors, in addition to European and uS companies. Japan’s two largest pharmaceutical companies have al-ready started to operate in Turkey. ken Jones, EMRA CEO of Astellas (one of the two Japanese pharma gi-ants), said, “Turkey has the sixth larg-est pharmaceutical market of Europe, and it will rank in the top ten list of the world soon”. One of world’s larg-est electronics retailers, Best Buy, is

opening stores in Turkey. Robert A. Willet, CeO of Best Buy, said they plan to open three stores in Izmir, Ankara and Bursa by the first quarter of 2010. Willet stated that there is a fast growing market in Turkey, which he sees as the “China of Europe”.

In another boost to the local industry, Raytheon (a major American defense contractor and industrial corporation with core manufacturing concentra-tions in defense systems and defense and commercial electronics) has ap-pointed Roketsan, a Turkish missile manufacturer, as an international supplier of a key component of the Patriot Guidance Enhanced Missile-Tactical, or Patriot GEM-T. Roket-san is a proven leader in missile and rocket programmes and has been a major part of Turkey’s defense indus-try since 1988.

Boeing, that provides direct employ-ment for more than one thousand people in Turkey, expects to reach a business volume of more than $1.2bn by 2013 in the country. Joe McAn-drew, vice president-europe, Boe-ing Business development, recently stated that a big portion of their in-vestments will be located in Istanbul, Ankara and Izmir and added that the kC-135R tanker aircraft project in Turkey stands out as a ‘model’ for local studies.

China is also not left behind in mak-ing inroads into Turkey. Jinan prov-ince of China is making a $200mn investment for health tourism in Turkey. Steve Ballmer, CeO of the world’s largest software company Mi-crosoft, recently laid the foundation of an ‘Innovation Center’ in Ankara. He stated that Turkey stands to be one of the top ten countries for Mi-crosoft in terms of business volume. Ballmer said Turkey, with its dynamic economy and its young, technically-inclined population, has a vast poten-tial for development and added that the country may become the software center of Europe.

Overall, Turkey has attracted signifi-cant amount of FDI so far. Even in 2008, gross fdI inflow to Turkey was around $17.7bn, an impressive figure despite the challenging environment. This year, the country is expecting an fdI inflow of over $10bn. The coun-try is fairly stable on the foreign ex-change reserves front as well. Towards the end of April this year, the Central Bank of the Republic of Turkey’s re-serve was pegged at $62.4bn.

Countering Economic SlowdownAs Turkey is intrinsically integrated into the global economy, the finan-cial meltdown has casted an impact on the country but it is not as se-vere as seen in many of the western

With its dynamic economy and young, technically-inclined population, Turkey has a

vast potential for development. The country may become the software center of Europe

Steve Ballmer, CEO, Microsoft

BUSINESS ENVIRONMENT

Highly competitive invest-ment conditions

National treatment to all global investors

Equal access to government incentives for all global investors

With an average of 6 days to start a business, Turkey ranks well ahead of other competitors and the OECD countries

62 July 2009

economies. The Turkish government has been prudent in taking adequate measures to withstand the crisis. “As part of our monetary measures, the rates have been cut five consecutive times since November. In totality, the central bank has cut the borrowing rate by 625 basis points to 10.5%; and its lending rate by 675 basis points to 13%. We expect the inflation to come down to 7.5% towards the end of the year,” said HE Engin Turker, Turkey’s ambassador to Oman.

Among the prominent measures taken to boost investor confidence and financing, the government has permitted payment of overdue taxes in installments. Last November, a new law was approved that facilitates bringing certain assets such as gold, cash and securities, in Turkey and/or registering of such assets. The profits earned outside the country are ex-empted from income and corporate taxes if they are brought to Turkey in certain conditions. The Council of Ministers has also been empowered to increase and expand the coverage of government guarantee on deposits for two years. The 10 per cent withhold-ing tax levied on sale and purchase of the shares by domestic investors was withdrawn.

To support exports, production and employment, the central bank has in-creased the export rediscount credit limit from $500mn to $1bn. To prop up small and medium enterprises (SMEs), the Small and Medium

TURKEY AT A GLANCE

Population - 70 million

Economy - 15th largest in the world, 6th largest in Europe

GDP (PPP) - $906 billion

fdI Inflow - $17.7 billion

Labour Force - 24.7 million

Mobile subscribers - 63 million

NATION ON ThE MOVE - Over 24.7 milion strong young educated class

TIME NECESSARY TO START YOUR BUSINESS IN DAYS

COUNTRY REPORT

63 July 2009

The economic co-operation be-tween Turkey and Oman has been growing at a faster rate.

The bilateral trade between Oman and Turkey increased to $227mn in 2008, a rise of 137 per cent over 2007 figure. Items such as building materials like iron & steel, and in-dustrial products, consumer goods and food products form bulk of the trade that covers almost 300 differ-ent product categories. The trade is loaded in favour of Turkey as the country contributes more than 90 per cent of the 300 goods exchanged between the two. “In Oman, over a dozen Turkish companies are ac-tive in various industries including tourism, construction, real estate, trading etc. The total value of the contracts is over $3.5bn. Recently, a joint venture of Turkey's TAV Con-struction and Athens-based Consoli-dated Contractors Co (CCC) got the contract worth RO450mn for the first phase of the new Muscat Inter-national Airport project. In another development, Turkish firm BOTek (Bosphorous Technical Consulting

Corporation) has got the contract for design consultancy services of the 85-km stretch of Batinah express-way project. The contract is valued at RO2.558mn,” said HE Engin Turker, Turkey's ambassador to Oman. Both Turkey and Oman are making seri-ous efforts to increase the bilateral economic co-operation. In a meet-ing of the Oman-Turkish Business Council in February, more than 30 Turkish companies visited Oman to explore new business opportunities. The next meeting will take place in Turkey. The ambassador added that two important agreements vital for mutually beneficiary business rela-tions, the “Avoidance of Double Tax-ation” and the “Protection and Pro-motion of Reciprocal Investments”, are paving the way to healthy busi-ness relations. He also cited that “Turkey-Oman Joint Economic Committee” is also another dynamic forum which has been working on ways and means to enrich various dimensions of bilateral economic re-lations especially in new areas such as defense and oil & gas.

TURKEY-OMAN

STRONG ECONOMIC BONDING

hE Engin Turker, Turkey’s ambassador to Oman

Sized Industry Development Organ-ization (kOSgeB) is giving interest free loans up to Turkish Lira 700mn (approximately RO175mn) to SMEs. Another loan of upto $650mn with interest free rate has been allocated to export oriented SMEs. In 2009, kOSgeB is expected to provide $1bn in loans to SME exporters. This year, Turkey’s Eximbank plans to provide $12.9bn in financial sup-port to exporters. To increase the resilience of the financial markets, apart from other measures, the for-eign exchange reserve requirement has been reduced from 11% to 9%. With this move alone, $2.5bn have been injected into the banking sys-tem. The central bank has also given the assurance that if required the foreign exchange reserve require-ment ratio may be reduced further.

“Additional measures have been tak-en to support the reverse dollariza-tion process and promote deposits and loans in Turkish Lira,” added he Turker. To improve the efficient functioning of the interbank foreign exchange market, the central bank has extended the maturity of its uS dollar and Euro lending to banks in the foreign exchange deposit markets from one month to three months. The lending rates for transactions have been reduced from 7% to 5.5% for uS dollar and from 9% to 6.5% for Euro. The foreign exchange sale auctions in March have also added to foreign ex-change liquidity in the market.

All these steps are expected to give a fillip to the economy in Turkey. The global financial management and advisory company Merrill Lynch has estimated a 3.2 percent economic growth rate in Turkey for 2010, de-spite the general slowdown in the world economy. Turkey will make a quicker recovery than other countries of the region thanks to relatively min-imal damage in the banking sector, households and firms, according to a Merrill Lynch analysis.

Good time to be in Turkey than in uS or Europe!

64 July 2009

urkey has preserved the legacy of its past while working towards a modern nation, and as a result has become a destination by choice

for tourists from all over the world. Due to its pleasant weather, natural beauty, rich history, well-developed infrastructure and outstanding hos-

pitality, Turkey is preferred by the travelers from the Middle East.

Lonely Planet has described Turkey as “Landscape dotted with battle-grounds, ruined castles and the pal-aces of great empires. This is the land where Alexander the Great slashed the Gordion knot, where Achilles bat-tled the Trojans in Homer’s Iliad, and

where the Ottoman Empire fought battles that would shape the world. History buffs can immerse themselves in marvels and mementos stretching back to the dawn of civilisation. Then again, if you want to simply unwind, spend an afternoon being pampered at a hamam, or let the warm waters off the Mediterranean coast lap at your toes. Adventure lovers can head

A uNIque BRIdge Of euROpeAN ANd ASIAN

CulTuReS, TuRkey IS The peRfeCT deSTINATION fOR

ANy TOuRIST AT ANy TIMe Of The yeAR.

AkShAy BhATNAgAR RepORTS fROM TuRkey

GoCOUNTRY REPORT

DOlMABAhCE PAlACE – The power centre of Ottoman Empire

65 July 2009

east to Nemrut Dagi National Park. Bon vivants need look no further than Istanbul, where the markets and bars are among the most stylish and atmospheric, and the mod Ottoman cuisine rates as the tastiest, in the world.”

Most visits to Turkey begin with Is-tanbul, the capital city of both the

Byzantine and Ottoman empires. The city still retains impressive remind-ers of both as you take a round of it. It lies where two continents (Europe and Asia) and two seas (Black Sea and Sea of Marmara) meet. Its main artery is the Bosphorus. In the city of minarets, at every step you will be amazed by its natural beauty and his-torical richness.

PLACES TO SEE IN AND AROUND ISTANBUL:

Dolmabahce Palace - With its inlay and marble, walls hung with oil paintings, and crystal marble banisters, the palace has a dream-like atmosphere.

Galata Tower - Perfect place to spend an evening at the oldest tower of the world to enjoy the magnificent view of Istanbul, relish delicious in-ternational cuisine and experience oriental dance shows.

Hippodrome - Here chariots ran with thousands of Byzantines cheer-ing them. It also has historical mon-uments including Egyptian Obelisk (from 16th century BC), Serpen-tine Column (from 5th century BC) and Stone Obelisk (erected in 10th century AD).

The Blue Mosque (Imperial Sultanahmet Mosque)- Built in 17th century and famous for its six minarets and beautiful Iznik tiles, it is the most important mosque in Istanbul.

Basilica of Hagia Sophia - Built by Constantine the Great and recon-structed in the 6th century during Byzantine era, it houses magnificent gold-leafed mosaics. It was convert-ed into a mosque with Ottoman’s conquest of Constantinople in the 15th century. It has now converted into a museum.

Topkapi Palace - Once the resi-dence of the Ottoman Sultans, it is now a museum where precious dis-plays such as porcelains, crystals, Sultan’s costumes, books, portraits and diamonds can be visited. Do re-member you are not allowed to take photographs of the precious displays.

Grand Bazaar - Located near Hip-podrome, it is an ideal place to shop for the traditional goods. Don’t for-get to bargain hard before you buy.

Spice Market - The egyptian Ba-zaar to smell and buy hundreds of lively coloured spices is surely not to be missed out.

66 July 2009

From Istanbul you can go to Princess Islands. The beautiful wooden houses and the wonderful views of the clus-ter of nine islands leaves an unforget-table impression on visitors. These islands, on which monasteries were built during the Byzantine period, are almost an hour away from the city. Enjoy looking at the old churches, mosques besides the summer homes of the rich and famous sitting in your horse-drawn carriages

After Istanbul, you may continue your journey eastwards into the heart of

Anatolia to the capital Ankara, or along the Black Sea coast, or southward along the Aegean coast to the Mediter-ranean. If you follow the Sea of Mar-mara eastward on your journey from Istanbul, the highway which circles it will bring you to Bursa. Alternatively you can make this journey in part by a ferry boat to yalova on the southern Marmara shore and then complete the 60km to Bursa passing through the fa-mous peach orchards of the province. It was here that first capital of the Ot-toman Empire was founded by Orhan Gazi in 1326, and it is here too that

amidst lovely natural surroundings you can see the first examples of typi-cal Ottoman architectural style.

known as green Bursa, the city is filled with gardens and parks. The place is famous for silk trade and thermal springs. Thirty-six kilometers from Bursa is uludag, the largest center for winter sports in Turkey. It offers a va-riety of activities, accommodation and entertainment. The slopes are easily reached by car or cable car. December to May is the best time for skiing, al-though uludag National Park is worth

TRAVEL GUIDE

Average temperature in July - Istanbul (23) and Antalya (25)

1 Turkish Lira is equal to half euros/250 Baizas

Euro is acceptable all over

Main language is Turkish but English is understood in tourist places

More details are on www.tourismturkey.org

COUNTRY REPORT

ThE BlUE MOSqUE – Most beautiful imperial mosque

Thermalium Wellness Park hotel & Spa at Yalova

67 July 2009

a visit at any time of the year for the lovely views (snowcapped mountains) and fresh air. Don’t forget to carry your woollens as the place is generally cold. On the Aegean coast, which can be reached from Bursa, you find at al-most every step the remains of ancient civilizations from various periods of Anatolian history.

Close to the entrance of the Cana-kkale Bogazi (the dardanelles), in the province of Canakkale, is Homer’s Troy (Troia), where excavations have brought to light the riches of nine dif-ferent settlements, one on top of an-other. The inhabitants of these nine settlements show a high level of civi-lization that stretches back to 3000 BC. Continue your journey through the wonderful holiday towns of Akcay, Oren, Ayvalik and Foca and you ar-rive at the ‘pearl’ of the Aegean, Izmir. Such is the beauty of the area, and the totally relaxing atmosphere, that the holidaymaker abandons all sense of time. Just 80 km of Izmir is Cesme, fa-mous for its thermal waters and spar-kling clear sea. In this rich region you can visit the famous ‘Arcadian Way’ in Ephesus, lined with elegant, marble

columns. Nearby is the small house where the Virgin Mary is reputed to have spent her last days. Not far from both is the popular resort of kusa-dasi or ‘Bird Island’, where you can rest awhile by the beautiful turquoise waters of the Aegean. From kusadasi you can turn inland towards Denizli, which is near Pamukkale (Cotton Cas-tle). Here, thermal spring waters laden with calcium have run off the plateau’s edge, creating a cascade of petrified basins - an extraordinary and marve-lous natural work of art. The waters have been popular since Roman times for their therapeutic powers, and just behind the basins are the ruins of an-cient Hierapolis.

Backtracking to rejoin the Aegean road that continues southwards, we find the great Oinian cities of priene, Miletus and Didyma, which witnessed some of the great advances of human culture. Continuing south to the Gulf of Gokova, we come to the lively and popular seaside resort of Bodrum, known in ancient times as Halicar-nassus, dominated by a castle built by the knights of Rhodes. Marma-ris, further to the south, can easily

FORTHCOMING ATTRACTIONS:

Grand prix racing

International Arts and Cultural Festival held every year in June and July with famous artistes coming from all over the world

Operas and ballads in six different cities

MARDAN PAlACE – Crowning glory of Antalya

ASPENDOUS – Magnificent amphitheatre

68 July 2009

be reached by road but if you really want to savour the full pleasure of this beautiful coastline, take a ‘Blue voy-age’ yacht tour. Marmaris is a tour-ist’s paradise set in a deep fjord-like inlet where the pine forests come right down to the shoreline of the beautiful bay lined with comfortable hotels and small guest-houses serving delicious seafood. Its fully-equipped yacht ma-rina is able to accommodate private yachts and there are numerous yachts for charter. Endless blue sea bathed in sunshine, orange groves, banana plantations, waterfalls, forests of palm and pine that splash the foothills of the Toros mountains in a rainbow of colours with sandy beaches stretch-ing mile after mile… this is Antalya, the tourism capital of Turkey. For those with keen interest in history, the city offers ancient theatres of As-pendos, Termessos and Side, to the many works and monuments that date back to Seljuk times. The place is very popular among tourists for its theme based deluxe resorts. In Antalya, you must visit the Mardan Palace, the most expensive hotel in entire Europe. Leaving the sunny Mediterranean be-hind and cutting inland into the heart of Anatolia, one arrives at the capital of modern Turkey, Ankara. The city offers the Museum of Anatolian Civili-zations where relics of the world’s old-est cultures are displayed. Moving on, konya is the home to the mystic poet and philosopher Mevlana who found-ed the sect of Mevlevis known to the west as the ‘Whirling Dervishes’.

In the mountains of Adiyaman is Mount Nemrut, with a height of al-most 2,150m, on whose peak the spec-tacular, toppled statues of gods lie. These were erected 2,000 years ago for the Commagene king Antiochus I. Istanbul is likely to be the place where you will come back to take the flight back home. Make sure you haven’t missed out on your boat trips along the Bosphorus to enjoy the spectacu-lar night view of Istanbul! In all like-lihood while leaving Turkey you will contemplate making a comeback to the country to cover the areas that you couldn’t make it as there is so much to see and experience!

COUNTRY REPORT

EFES – Antique city not to be missed

GRAND BAzAAR – Best place to buy traditional goods

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70 July 2009

AUTO TALK

ntil now kIA’s were attractive buys pri-marily because of their price, reliabili-ty and ease of main-tenance and earned

a good reputation in this regard. But in today’s visual dominated world ‘style’ is everything and unfortunately this was never one of kIA’s prime as-pects. Now though kIA is looking to change that by taking a whole now ap-proach to their car designs.

Take for instance the car that we are testing this month – the Optima. One look at the exterior and it is crystal clear that this is a far more attractive car than its predecessor. The Sharp

angular design is much better shift in design trend from the previous bulbous designs. The design of kIA’s new signature grille, is simple yet at-tractive and goes a long way in accen-tuating its improved looks; kudos to the designer for keeping it simple yet stylish. In addition to the grille, there are other nice touches such as the styl-ish rear combination lamps, narrowed and swept back headlamps and sports inspired bumper designs.

Cool interiorsEven the interior follows suit with the exterior and is a huge improvement in style, design, materials and character. There is definitely no shortage of room and can easily be placed somewhere

at the top of its class. Even the centre console is uncluttered and simple in its design and the red diplay panels are a nice touch. While the basic model, the LX, does come with a decent amount of kit as standard, the model one grade above, the EX, is a far more attractive prospect as it adds some key features, ABS, sunroof, alloy wheels and more, that are well worth the price increase. And for those of you who want some-thing better, there is always the highest grade, the 2.7 EX, which is even pow-ered by a V6 engine.

Either kIA has been listening to driver feedback or has just struck it lucky, either way it shows. The driving posi-tion is surprisingly good and even the

WITH THE RELEASE OF THE STYLISH NEW SOUL, CERATO AND

NOW THE OPTIMA, KIA IS LOOKING TO CHANGE ITS IMAGE.

BUT HAS IT WORKED? MALCOLM XAVIER CRASTA WRITES

spec sheeTEngine: 2.0L I4 Dual CVVT

Displacement: 1998cc

Power: 164hp@6200rpm

Torque: 197Nm@4600rpm

Transmission: 4-speed automatic

LxWxH: 4800mm x 1805mm x 1480mm

71 July 2009

seats are comfortable and easily adjust-able. All controls are within easy reach and simple to understand and from the drivers seat the visibility was good all-round. On the road the Optima has its pro’s and its cons. For starters, the steering is sharp and responsive. The decent grip levels and a well developed suspension system strikes a good bal-ance between sporty handling and comfortable cruising, making it quite a fun drive around town. However, the car feels slightly sluggish whenever we wanted a sudden burst of speed, say for a quick overtaking manoeuvre, but we assume that this is attributed more to the gearbox than the engine. The 2.0l inline-4 provides more than ample power in the form of 164hp and even

provides a decent amount of torque. We feel that the main reason is the gearbox’ tendency to be a little slow on the downshift, a manual transmission would have fared much better in this regard and would have brought out the true potential of the engine, albeit at the cost of some ‘automatic’ conven-ience. Aside from this the only other minor complaint is that, on hard accel-eration the engine noise can be a little intrusive but at normal highway speeds it is well within acceptable levels.

Money’s worthWhile the Optima may not have any one especially redeeming aspect, it is well above average in nearly all of them; and is especially worth consid-

ering from a price standpoint. Think of it sort of like a stylish jack of all trades. Add to this kIA’s decent record when it comes to safety and reliabil-ity and you have got yourself a pretty solid buy. Our personal suggestion, if you decide to purchase an Optima, is to go one up from the basic and aim for the mid-range model if possible. While the basic is fine in itself, the eX has some attractive features that are worth paying the extra cash for, espe-cially the addition of anti-lock brake and alloy wheels. Overall, kIA has struck its mark when it comes to of-fering a stylish design and at the same time has improved on its predecessor in every other aspect as well. It is defi-nitely worth looking into.

72 July 2009

awaRds of excellence

Dollar Thrifty Automotive Group held its awards ceremony for outstanding licensees at Frankie’s, located in the Oasis Beach Tower, dubai Marina. The ceremony took place last month amid the company’s regional meeting. The winners include:Best growth (Asia pacific): Thrifty India; Best growth (Middle east): Thrifty Oman; Best inbound busi-ness development: Thrifty Jordan; Best new start-up: dollar & Thrifty

kuwait; Best service: Thrifty qatar; Best image: dollar uAe.

The key To safeTyFord Motor Company’s Mykey teen-safety driving technology topped the American Automobile Association’s (AAA) top technology picks for new vehicles and earned the 2009 Traf-fic Safety Achievement Award. The Technology, which soon will become standard equipment on Ford, Lincoln and Mercury models, allows owners to programme a key that can limit the vehicle’s top speed and audio volume. The new technology also can com-pletely mute the audio system if front occupants are not belted. The feature is designed to help parents encour-age their teenagers to drive safer and more fuel efficiently, and increase safety belt usage.

Bagging The no. 1Towell Auto Centre (TAC) bagged the coveted Global Customer Service Award amongst all the Mazda distrib-utors’ world wide in overall customer service, at a recently held CS meet in Dubai. The Award was presented by Okugawa, general manager overseas parts & service marketing, Mazda Motor Corporation, Japan. The re-sults were primarily based on all the distributors’ achievements year on year (yOy) on various measurement criterions for the year 2008.

The higheR RoadWith the recent launch of its all-new B250 tyre series at hotel In-tercontinental, Muscat, on the 24th of June 2009, Bridgestone further strengthens its commitment towards comfort and safety. The B250 Tyre is Bridgestone’s most technically ad-vanced basic performance tyre which is a combination of quality materi-als, cutting-edge engineering and higher standards in performance specification. They are engineered for safe and smooth driving across all terrains which makes it the tyre of choice for top international car makers including Toyota, Nissan, Mercedes, Fiat, Opel, Peugeot and other brands. B250 tyre comes as standard equipment on many com-pact cars and medium saloons and is sold worldwide.

challenging vicToRyMoosa Abdul Rahman Hassan & Co has won the 2008 Chairman’s Chal-lenge award from General Motors for the fourth year in a row. The Award was given away at a glittering cer-emony held at Grand Hyatt in Dubai on May 19th.The award was given to Mohammed Abdullah Moosa Al Raisi and Virendra Agarwal – CEO of Moosa Abdul Rahman & Co by Mau-reen kempston Darkes – group vice president and president of GM Latin America and Middle East and Michael Devereux – president of GM Middle East Operations.

Mini foRMula 1A team of five formula 1 enthusiasts from the Sultan School in Muscat have made history by becoming the first Arab team to participate in the global f1 in Schools World Championships to be held in London during September. The team triumphed in the first f1 Middle east National finals hosted recently at the Dubai Autodrome where they beat a total of ten teams to win the regional final. Their team, called Team Neon, was one of three Omani schools partici-pating which qualified to the world finals that will be held from September 15 – 17. Fully endorsed by Formula 1, the F1 in schools competition is an an-nual international challenge that includes students working as a professional team creating their own mini Formula 1 car. Each member of the team has a clearly defined role that in order to emulate a real formula 1 team, is expected to develop a business plan, budgets, forge business / industry links and raise sponsorships to represent the Sultanate at the world championships.

74 July 2009

GOLF UPDATE

STrIvINg FOr pErFECTIONIn just ten years of professional golf, Sergio García has garnered 19 professional wins and reached

the number two spot in the Official World golf Rankings. OeR profiles this modern day legend

ergio García was born on January 9, 1980 at Castellon, Spain. He be-gan playing golf

at the age of three, taught by his father, Vitor. He was a star player as a junior, win-ning his club championship at age twelve. Four years later, he set a record as the youngest player to make the cut at a European Tour event, the 1995 Turespana Open Mediterranea. This record has now been over-turned by amateur, Jason Hak in November, 2008 at the uBS hong kong Open, beating García’s record by 107 days. Also in 1995, García became the youngest player to win the European Amateur.

Turning proGarcía turned professional in 1999 after shooting the lowest amateur score in the 1999 Masters Tourna-ment. his first title on the european Tour came in his sixth start as a pro-fessional at the Irish Open. he first achieved worldwide prominence with a duel against Tiger Woods in the 1999 PGA Championship, where he eventually finished second. late in the final round, garcía hit his most famed shot: with his ball up against a tree trunk and the green hidden from view, he swung hard with his eyes shut and hit a low curving fade that ran up onto the green. As the shot travelled, he sprinted madly into the fairway and then scissor-kick jumped to see the result. Shortly afterwards he became the youngest player

Tournament victoriesPGA Tour:2001 – MasterCard Colonial2001 – Buick Classic2002 – Mercedes Championship2004 – EDS Byron Nelson Championship2004 – Buick Championship2005 – Booz Allen Championship2008 – The Players ChampionshipEuropean Tour:1999 – Murphy’s Irish Open1999 – Linde German Masters2001 – Trophée Lancôme2002 – Canarias Open de Espana2004 – Mallorca Classic2005 – Omega European Masters2008 – Castelló Masters Costa Azahar2009 – HSBC ChampionshipOther Wins:1997 – Catalonian Open Championship2001 – Nedbank Golf Challenge2002 – Kolon Cup Korean Open2003 – Nedbank Golf Challenge

ever to compete in the Ryder Cup.

Fixing the swingWhen garcía first turned professional, he had an un-orthodox swing with a loop and large lag, but during the 2003 season he worked towards making his swing more conventional. But that was well after he won his first pgA tour tourna-ment in 2001, at the 2001 MasterCard Colonial in Fort Worth, Texas. In the very same year he also won the Buick Classic. he has since won five additional PGA tour tournaments, in 2002, two in 2004, 2005 and 2008. He has spent

much of his career in the top 10 of the Official World golf Ranking’s with over 250 weeks between 2000 and 2008, and he reached a career high ranking of two after winning the hSBC Champions tournament in November 2008.

75 July 2009

n 1968, Dr kenneth Cooper, MD, an exercise physiolo-gist, and Col. Pauline Potts, a physical therapist developed a scientific exercise programme using running, walking, swim-

ming and bicycling. Four decades later, this programme, now known as Aerobics, is the most popular form of exercise among all demographics.

Aerobics are rhythmic exercises per-formed to music. During an aerobics workout, dance steps are mixed with callisthenics, running and jumping. Ballet, disco, jazz, rock, and other types of music supply the tempo and rhythm for the exercises. A well-struc-tured session works the entire body, and takes muscles and joints through their full range of movement, enhanc-ing flexibility and improving strength.Formal aerobics classes are divided into different levels of intensity and complexity. Aerobics classes may al-low participants to select their level of participation according to their fitness level. Many gyms offer a wide variety of aerobic classes for participants to take. Aerobics can help you:

Keep excess pounds at bay. Com-bined with a healthy diet, aerobic ex-ercise helps you lose weight.

Doing aerobics is by far one of the most common and best ways to keep yourself

physically and mentally fit. here is how it can help you maintain a healthy lifestyle

EXECUTIVE WELLNESS

Increase your stamina. Aerobic exercise may make you tired in the short term. But overtime you’ll enjoy increased stamina and less fatigue.

Ward off viral illnesses. It acti-vates your immune system. This leaves you less susceptible to minor viral ill-nesses, such as colds and flu.

Reduce health risks. It reduces risks like obesity, heart disease, high blood pressure, type 2 diabetes, stroke and certain types of cancer.

Manage chronic conditions. Aero-bic helps to lower high blood pressure and control blood sugar. If you’ve had a heart attack, aerobic exercise helps prevent subsequent attacks.

Strengthen your heart. A stronger heart doesn’t need to beat as fast. A stronger heart also pumps blood more efficiently, which improves blood flow to all parts of your body.

Keep your arteries clear. Aerobics boosts your high-density lipoprotein (HDL), or “good,” cholesterol and lowers your low-density lipoprotein (LDL), or “bad,” cholesterol. The po-tential result? Less buildup of plaques in your arteries.

Boost your mood. Aerobic exercise can ease the gloominess of depression, reduce the tension associated with anxiety and promote relaxation.

Stay active and independent as you get older. Aerobic exercise keeps your muscles strong, which can help you maintain mobility as you get older. Aerobic exercise also keeps your mind sharp. At least 30 minutes of aerobic exercise three days a week seems to reduce cognitive decline in older adults.

NIMbLE AND SUppLE

76 July 2009

The Wave hosts media Award winners

The Wave, Muscat, received win-ners from the press categories of this year’s Oman Media Awards for a com-prehensive tour of the project. The journalists were briefed on the over-all progress of the project including the ongoing handover of completed homes. They also toured the construc-tion site and visited the display units. Welcoming the delegation, Abdulla Al Shidi, deputy CEO, The Wave, Muscat, thanked the journalists for their ongo-ing support and continued interest in one of the region’s most admired real estate developments.

SWISS A330-300 arrives

Switzerland’s national carrier, Swiss International Air Lines, announced during a press conference, the arrival of the all-new A330-300 aircraft from Zurich fitted with the latest innova-tions in seats. Passengers from Mus-cat also made history as they boarded the inaugural Muscat-Dubai-Zurich flight which took off at 23:40.

The heart of the A330-300 is the new business class seat which offers premium passengers optimum travel comfort with a state-of-the-art air cushion for adjustable comfort in all positions. Passengers will have more personal space and enjoy sleeping

with the 2-meter (79”) fully horizon-tal lie-flat seat which is also equipped with a massage function. The air cush-ion also enables seat weight reduction, leading to lower fuel consumption for the A330-300.

hSBC felicitates studentsAfter a successful run of ‘JA MORE ThAN MONey’ programme in 11 schools in Oman, hSBC organised a ceremony to felicitate participating students and volunteers at the Bait Al falaj Branch. The programme was organised under the auspices of the ministry of education and Injaz Oman over a period of six weeks to benefit 433 students. With this project, the volunteers work more closely with stu-dents and their schools to encourage a greater understanding of business and finance to help students build a strong foundation for good business practice.

Ahli Bank’s customer wins RO10,000

Ahli Bank announced the results of its monthly draw of ‘My Hassad’ saving scheme. Ali Salim Said Al Shibli of So-har branch emerged as the lucky win-ner of RO10,000 cash prize. Rabani Rahim Al Balushi, branch Manager handed over the cheque to the win-ner. Ali Salim Al Shibli was excited to win the RO10,000 just before the summer holidays.

b I L L b O A r D NBO inaugurates new branch National Bank of Oman (NBO) recently inaugurated its 60th branch in Sohar, under the auspices of his excellency Al Sayed hilal Bin Badur Bin Ali Al Bousaidi, Wali of Sohar. The inauguration ceremony was at-tended by humayun kabir, NBO’s general manager, chief retail banking officer, members of the senior executive management, a large number of customers, members from the Media, and the bank’s branch manag-ers, from the different wilayats of the Batinah Region. This new branch, characterised by its unique design and appearance, caters to all the bank-ing needs of customers. It boasts of a prominent location that overlooks the main highway, with a spacious parking area. Speaking on the occa-sion, kabir, said: “We are indeed delighted to open a new branch in So-har to provide our dear customers with the best products and services at prime locations”.

77 July 2009

BROWSING CORNER

The book brings out the dichotomies between India’s quest to become an economic

powerhouse and its endemic problems like poverty, corruption and superstition

sTRangeR Than ficTion

IN SPITE OF ThE GODS The Strange Rise of Modern India

Author: Edward Luce

Published by: Little, Brown

Page: 388

Price: RO7.800

The publication featured in Browsing Corner is provided by Turtle’s Bookstore

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Cut out this coupon from OER and present it at Turtle’s Bookshop to

claim 10% discount on the book featured in the July 2009 issue,

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Edward Luce is better placed than most to write this book. Be-tween 2001 and 2005, he was the Financial Times’s New Delhi-

based South Asia bureau chief and his wife is Indian. His combination of closeness and distance lends him objectivity and credibility. In Spite of the Gods is not afraid to tackle the big question, which is how the rise of Chi-na and India might alter the geopo-litical map of the world. Towards the end of the book, Luce elaborates on how the relationship between the two Asian countries has altered and how America, suspicious of India during the Cold War years, has warmed to it more recently. The uS, he says, would want to promote better ties with India to counterbalance China’s emerging dominance and ‘prolong American power in the coming decades.’

Opening the floodgatesIndia’s dizzying economic ascent began in 1991, when the government abruptly dismantled the “license raj,” a system of tight controls and permits in place since independence in 1947. unlike China, India has not undergone an industrial revolution. Its economy is powered not by manufacturing but by its service industries. In a vast sub-continent of poor farmers whose tiny holdings shrink by the decade, a highly competitive, if small, technology sector and a welter of service businesses have

helped create a middle class, material-istic and acquisitive, along with some spectacularly rich entrepreneurs. The author does a superb job of explaining the new Indian economy and why its transformation qualifies as strange.

The euphoria about India’s capability in information technology, economic might and superpower potential has of late been tempered by an awareness of just how much darkness is still be-neath the lamp. Study after study has revealed this sobering fact. According to one, India still has only 84 television sets per 1,000 people (America has 938); 7.2 personal computers for every thousand people (Australia has 564.5); and the internet reaches only 2 per cent (Malaysia’s figure is 34 per cent).

Polar oppositesSeveral recent books have examined the savage inequalities between the country’s burgeoning, educated, urban elite and the shockingly poor who live in the vast hinterlands. Luce’s thought-ful and thorough book is an unsenti-mental evaluation of contemporary In-dia against the backdrop of its widely expected ascent to great power status in the 21st century’ - fits right into this category. He suggests the dichotomy of India in the book’s subtitle and later calls India’s rise ‘strange’ because, while becoming an important political and economic force, it has remained ‘an intensely religious, spiritual and, in some ways, superstitious society’.

78 July 2009

WATeRpROOf phOTOgRAphy

Looking for a camera that you can

take to pool parties without worrying

about it getting wrecked, look no

further than the 12.1 Megapixel

PowerShot D10. Engineered for

those with an adventurous, active

lifestyle, the PowerShot D10 combines

take-anywhere levels of toughness

with exceptional image quality.

Canon’s DIGIC 4 processor delivers

ultra-responsive performance and

outstanding, richly detailed images, while a new Smart Auto mode uses

scene detection technology to deliver effortlessly great shots.

MaRkeT waTch

ALIEN TECH

Consumers who want the power of a desktop, but the portability and

convenience of a laptop – including hardcore gamers and technology

enthusiasts need to look no further than the new Alienware M17x.

It is easily one of the most powerful 17-inch notebook in the world.

With technology that includes the optional Intel Quad Core Extreme

overclockable CPU and SLI Dual 1GB NVIDIA GeForce GTX

280M2 GPU’s, with which consumers will enjoy

an incredible computing experience. Combine this

power with the new bold anodized aluminum

case design and M17x is a notebook that

anyone would love to own.

giZMos

PuRE POWERHOuSE

Samsung Jet boasts world firsts in both display technology and speed of

performance. Its pioneering 3.1’’ 16M WVGA AMOLED display provides

a resolution that is four times higher than a

WQVGA screen and offers the most vivid and

colorful full touch mobile experience available.

Its 800MHZ application processor delivers

breathtaking speed and performance, making

‘Jet’ the fastest full touch handset on the market

today. In addition, Samsung’s latest TouchWiz

2.0 user interface gives an unrivalled user

experience and includes iconic new features

such as motion UI and smart unlock which are

perfect for managing your life at work and play.

PRECISION INSTRuMENT

Smaller by about 15 per cent than

Instrumento N°Uno, de Grisogono’s

Instrumentino has a distinctive look.

The unique character of this design

also derives from its highly original,

three-level dial plate highlighted by a

one-piece, ring-like hour circle displaying

solely the figures 4 and 8. The twin time zone complication is available

with a self-winding mechanical movement as well as with a quartz

movement – a first on a de Grisogono timepiece. The sapphire case

back reveals the blackened self-winding movement and its rotor or, in

the case of the quartz movement, a blackened metal cap featuring a

gilded de Grisogono logo.

NO STRINGS ATTACHED

Unveiled for the first time, at this year’s E3, was

“Project Natal,” a code name for a revolutionary new

way to play, no controller required. Compatible with

any Xbox 360 system, the “Project Natal” sensor is

the world’s first to combine an RGB camera, depth

sensor, multi-array microphone and custom

processor running proprietary software all

in one device. Unlike 2-D cameras and

controllers, “Project Natal” tracks your full body

movement in 3-D, while responding to commands, directions and even

a shift of emotion in voice. In addition, unlike other devices, its sensor is

not light-dependent. It can recognise you by looking at your face, and it

doesn’t just react to key words but understands what you’re saying!

geeky CAMpINg

Utilising cutting edge eco-energy technology, the Orange Solar Concept

Tent allows campers to keep in touch and power their essential camping

gadgets. The Concept Tent’s solar shell uses photovoltaic fabric

technology with three directional glides. Among it’s list of innovations is

the Glo-cation technology which works by enabling campers to identify

their tent using an SMS message, which would trigger a distinctive

glow in the tent. Add to this a wireless control hub (displays energy

generated and consumed plus

a wireless internet signal) and a

groundsheet heater (an internal

heating element embedded to

the tent’s groundsheet) and

you end up with the ultimate

camper’s gadget.

79 July 2009

TRIBUTE

winner of 13 Grammy awards, Michael Jack-son (MJ) etched a place for himself in the hearts and minds of people and set the world danc-

ing. His musical genius was often over-shadowed by a bizarre and extremely controversial lifestyle. But history will remember MJ as a man who managed to break through every racial and artis-tic barrier to become a global pop icon and a true musical genius.

Born on August 29, 1958, in gary, In-diana, uS he was the seventh of nine children. He rose to fame as the lead singer of the Jackson 5, a band he formed with his brothers in the late 1960s. The group’s first four singles – “I Want you Back,” “ABC,” “The love you Save” and “I’ll Be There” – went to No. 1 on the Billboard pop chart, the first time any group had pulled off that feat. In 1972, he hit No. 1 as a solo artist with the song “Ben.” By the late ’70s he was topping the charts with cuts from “Off the Wall,” includ-ing “Rock With you” and “don’t Stop ’Til you get enough.”

The ubiquitousIn 1982, he released “Thriller,” an al-bum that eventually produced seven hit singles. For the rest of the 1980s, they came no bigger. “Thriller’s” fol-low-up, “Bad,” sold millions of copies worldwide.

It was in 1983 that Jackson introduced a dance move that will most probably be the defining visual burnished in fans’ memories – The Moonwalk. That singular dance move could well be the greatest move of all time. People copied his Jheri-curled hair and sin-

Shock waves rocked the world when the king of Pop, Michael Jackson, suffered a cardiac arrest and died on Thursday, June 25, 2009

gle-gloved, zippered-jacket look. He posed for photos with President Ron-ald Reagan and Nancy Reagan at the White House. Paul McCartney teamed with him on three duets, two of which became top five hits. he was given the nickname the “king of Pop” – a spin on Elvis Presley’s status as “the king of Rock ‘n’ Roll” – and few questioned the moniker.

In 1991, he again came out with the smash hit album, “Dangerous” which had the number, “Black or White”. Jackson released a two-CD greatest hits collection entitled “HIStory” in 1995 which sold relatively poorly. A 2001 album of new material, “Invinci-ble” did even worse. After that things started going downhill for Jackson. His life was marked with controver-sies and he was constantly under in-tense media scrutiny. However, in the end, the only redeeming quality of the man was his work. Jackson has sold 750 million records worldwide and holds eight Guinness records, including most successful entertainer of all time. He revolutionised pop music with an array of global influ-ences in music and dance. His video “Thriller” single-handedly broke the colour barrier on MTV at a time when no African-American artists were featured on the burgeoning music video channel.

Almost every pop/hiphop musician today lists MJ as a major influence from their youth. And so do most choreographers. Capable of unleash-ing mass hysteria like the Beatles and Elvis, when he died in Los Angeles, he had been labelled a fallen star – but a star who could still whip up a sold-out concert.

Worldwide Album Sales

1979 OFF THE WALL 20mn

1982 THRILLER 109mn

1987 BAD 30mn

1991 DANGEROUS 32mn

1995 HISTORY 20mn

2001 INVINCIBLE 10mn

August 29, 1958 - June 25, 2009

80 July 2009

BEYOND BOARDROOMS

S Vijaya kumar’s road to success started when he passed out from IIT Madras. He then did his post gradu-

ation at IIM Ahmedabad and passed out in ’76. From there he worked for 26 years in three family-owned groups. He started work in marketing but later moved to project execution and then to general management. He has worked in a variety of businesses ranging from building materials to seeds to engineering products to irri-gation systems. Then in 2002 he came to Oman and started his assignment with khimji Ramdas Group. This as-signment was to oversee the opera-tions of the infrastructure group and to help synergize the operations of the various divisions. Also part of the as-

N S Vijaya Kumar, CEO, khimji Ramdas Infrastructure

Group, shares his views on the importance of time delegation

and his passion for travel with Malcolm Xavier Crasta

QUICK LOOKLikes: Movies, reading, socialising, singing and travelling

Favourite Hobby: Travelling with his family

Priority: Careful delegation of time

His reading recommendations: Blue Ocean Strategy, The Alchemist, The Seven Habits of Highly Effective People

what gives me utmost satisfaction is when I realise people living up to their full capabilities” says kumar. “Many a time people don’t release their own potential. So, to be able to help them to grow and to guide them gives me great pleasure” he added. “But what puts me off is people acting petty, rumour mongering and not involving themselves in teamwork” says kumar, as he expresses his strong belief in working as a team.

leaving an imprintSome of the people that Vijaya kumar admires the most are Sonia Gandhi, Anand kumar and Narayan Murti among others. Speaking on Sonia Gandhi, “The way in which she has transformed from a person who did not know anything about politics to playing the role she is playing now and how she is working to reenergize the party that had already gone down the drain, deserves admiration” says kumar. He greatly admires Anand kumar for establishing the Bihar Su-per 30, which runs under the banner of Ramanujam School of Mathemat-ics. And finally, Narayan Murthi who was one of the seven founders of In-fosys and the CEO of the same for 21 years from 1981 to 2002.

kumar gives just as much importance to leisure as he does to work. “It is very easy to be a workaholic” says kumar, “Only then do you realise that life is not just about work but also your family, personal interests and more.” He strongly believes in delegation of time and he has himself done so for work and leisure equally. Among his hobbies are watching mov-ies, reading books, socialising, sing-ing and he especially likes travelling. In fact, he likes travelling so much that he doesn’t like to repeat desti-nations, unless he is unable to take his family the first time. Among the list of places that he has travelled to and recommends are Prague, Cappa-docia and Shanghai. With such dedi-cation to his job as well as his fam-ily and hobbies, it is not in the least bit surprising that he has achieved his dreams.

no half MeasuRes

signment was to prepare the group for the future. “Seven years down the line I am personally happy that all that we set out to do we have done and far more. We have also grown in terms of business, people and profitability” says kumar.

When it comes to managing the com-pany, nothing gives him more satis-faction than to see a person achiev-ing his full potential. “In a workplace,