The Edge - Jan 2012 (Issue 29)

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CONTENTSw w w. t h e e d g e - m e . c o m 2012

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ON ThE COvERRachel Morris writes about one of the most Googled words in the world, “innovation”, which is regarded as a new idea or method but is also the buzzword of the decade. Morris also looks at how recently Qatar ranked in the top 30 countries in the Global Innovation Index 2011 and is aiming to be the global regional hub of this contemporary trend.

INSIdE EdgEQatar’s robust internal and external market factors in H2, 2011.

SpECIAL REpORTA look at Qatar’s tourism sector beyond the 2022 World Cup.

bALANCE ShEETHighlighting the working relationship between a parent company and its subsidiaries.

pERSONAL FINANCE12 steps toward financial health in 2012 and beyond.

ECONOmIC bAROmETERThe pros and cons of the proposed GCC ‘Khaleeji’ currency.

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SpECIAL FOCUSErika Widén reports on the first Turkish Arab Media Forum held in Istanbul in late 2011.

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bUSINESS mANAgEmENTCan firms profit from corporate social responsibility?

SmALL bUSINESS kNOw-hOwChoose the best accounting system for your business.

LEgAL INSIghTQatar’s constitution and governance.

mARkETINg & dESIgNThe importance of good advertising.

fEATurEsIN ThE SpOTLIghTAre biofuels the energy trend of the future in aviation?

bUSINESS INTERvIEwExclusive insights from the CEO of MEEZA, Rashid Al Naimi.

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FROm ThE EdITORCONTRIbUTORSNEwS ETCETERAQATAR ImpACTmIddLE EAST mATTERSENERgY ANd RESEARChTRAvEL & LIFESTYLE10 ThINgS

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busInEss insIGHTbUSINESS INSIghT INTERvIEwSPower-Gen will be held in Doha for the second time in February 2012, this time along with the WaterWorld conference. Miles Masterson spoke with the event director, Nigel Blackaby about what he expects Power-Gen to achieve and energy generation in the region and beyond.

Stefan Keitel, the global chief investment of asset management and private banking for Credit Suisse, speaks to TheEDGE about the latest opportunities and trends in the asset management sector.

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For over half a century, Jaidah Group has stayed true to its core values even as it grew to become a modern corporate powerhouse in the country. Since the beginning, the Group’s varied business portfolio has always been focused on one thing - to satisfy the needs and wants of the people of Qatar in the best possible way.

fROMThE EDITOR

The beginning of a new year often fires up one’s predictive juices. When and where natural disasters, which affected many

parts of the world up until the final days of the volatile year that was 2011, will occur in 2012 is impossible to say. We can only hope nature offers some respite this year, and when disasters do transpire they are not on the scale of Japan and result in minimal damage or death – and that people are better prepared. Closely linked to the Fukushima nuclear incident is the quest for safe, affordable fuel and energy, a topic looked at in a few places in this issue, notably in an article by Martin Rivers on Biofuels on page 44 (in which Qatar is prominent); and on page 70, where we interview Nigel Blackaby, event director for the Power-Gen 2012 conference taking place in Doha in February. On page 23, Jamie Stewart also looks at Qatar’s pivotal role in the recent climate change resolutions reached at the COP17 event in Durban, South Africa. Equally as uncertain as predicting natural and climate catastrophes, business and global finance also becomes harder to foresee. Trade and currency woes, the decline of established markets and the rise of emerging economies are creating dynamics that defy historical data and normal predictive analytics. Commodities, the traditionally lower risk assets, and other forms of once secure investments, are also not as ‘safe’ as they once were, and the threat of recession or even depression in a jumpy global economy is seemingly one incident – like a collapse of the euro or stalling in China – away from disaster. No doubt, it will be an interesting year to do business both in Qatar/the Middle East and the world. On page 73 Credit Suisse asset management expert Stefan Keitel tells us which investment trends should be watched

FROM

TheEDGE is printed monthly © 2011 Firefly Communications. All material strictly copyright and all rights reserved. reproduction in whole or in part, without the prior written permission of Firefly Communications, is strictly forbidden. All content is believed to be factual at the time of publication. Views expressed by contributors are their own derived opinions and not necessarily endorsed by TheEDGE or Firefly Communications. no responsibility or liability is accepted by the editorial staff or the publishers for any loss occasioned to any individual or company, legal or physical, acting or refraining from action as a result of any statement, fact, figure, expression of opinion or belief contained in TheEDGE. The publisher (Firefly Communications) does not officially endorse any advertising or advertorial content for third party products. Photography/image credits and copyright, where not specifically stated, are that of shutterstock and/or istock Photo or Firefly Communications.

Publications director Mohamed [email protected]

ManaGinG editorMiles [email protected]

dePuty editorErika Widé[email protected]

reGional sales directorJulia [email protected]+974 66880228

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creative directorRoula Zinati Ayoub

art directionLara Nakhlé

desiGn coordinationCharbel Najem

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PhotoGraPherHerbert Villadelrey

Printed byAli Bin Ali Printing Press, Doha, Qatar

and that though there is room for optimism in 2012, the markets will likely remain volatile. Another factor, though less negative and indeed inspiring much optimism, is the development of technology and innovation in general. Though so-called “game changing” inventions in the IT sector can disrupt existing industries and result in job losses, the contributions science and engineering make to the world in 2012 should far outweigh the downsides. What these might be, of course, we can only speculate and wait to discover. Qatar for one is successfully positioning itself as a leader in this field, as Rachel Morris notes in ‘Innovation Nation’ on page 48, and is gaining a reputation as the ‘Silicon Valley of the Middle East’. This title it seems is well-deserved, as our exclusive insights from the CEO, Rashid Al Naimi, of award-winning Doha-IT leaders, MEEZA, reveal on page 52. Finally, political events and machinations are as unpredictable as anything on this list. Like it or not, warmongering and détente have an effect on economies and business, so we can only hope that in 2012 the Arab Awakening’s effect on the region is ultimately stabilising, and that opposing regional and international powers (especially Iran and the United States) can prevent the Middle East from being entered into another costly, demoralising conflict. Again, this is where Qatar will surely play a key diplomatic role, but it should also up to all of us to make sure that peace prevails in 2012, leaving all to hopefully enjoy a more prosperous year than the one that just passed.

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ThE EDITOR

Miles Masterson, Managing Editor

Firefly CommunicationsPO Box 11596, Doha , QatarTel: +974 44340360Fax: +974 44340359www.firefly-me.com

featured contributorMartin riversMartin Rivers is a London-based journalist who specialises in aviation business models and air finance deals. In his work for aviation consultancy Ascend, he has interviewed senior management at several of the Middle East and North Africa (MENA) region’s leading airlines. He also writes aviation analysis and comment for The Guardian, The Gulf and The Huffington Post.

contributors

PG. 34 Matt GhazarianEditorial ContributorOxford Business Group Istanbul, Turkey

PG. 40KariM naKhle Senior Business StrategistDoha, Qatar

PG. 66roula ayoubCreative DirectorFirefly CommunicationsDoha, Qatar

PG. 36JanaK PatwariManager Business Performance, KPMGDoha, Qatar

PG. 28rob PearceDirectorIP GlobalDubai, UAE

PG. 76victoria scottJournalistDoha, Qatar

PG. 48rachel MorrisJournalistMENA RegionDoha, Qatar

PG. 64brenda hillSenior Legal ConsultantDLA PiperDoha, Qatar

PG. 38dave russellCEOGuardian Wealth ManagementDoha, Qatar

PG. 60ioannis iounnouAssistant ProfessorLondon Business SchoolLondon, United Kingdom

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CONTRIBUTORS

PG.32ManJeet chhabraGeneral Manager, Middle East, Dun and BradstreetDubai, UAE

PG.23JaMie stewartInternational CorrespondentLondon, United Kingdom

About TheEDGE:TheEDGE is an ambitious business magazine targeting professionals operating within Qatar’s multi-sector business landscape. Printed monthly, TheEDGE was launched in July 2009 to fill the market void and to provide the business community with insight into the latest business trends and market developments. TheEDGE is distributed 11 times yearly to a readership base of more than 7500 professionals, providing advertisers with the needed additional reach and frequency to their most important and affluent audience. TheEDGE is an authoritative business resource serving both large and small business operators. Please e-mail [email protected] should you wish to contribute.

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The most important 15 minutes of your business week.Every Friday. Only on CNN International.

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PHOTO OF THE MONTH

TheEDGE MAGAZINE

dollars for saleA man looks at United States (US) dollars at a currency exchange bureau in Tehran, the capital of Iran in late December 2011. Thanks to sanctions against the country’s currency, the rial lost about 30 percent in value against US dollar this year and plummeted further in December, with one US dollar buying over 14,400 rials. Ongoing disputes regarding their nuclear programme, and missile testing by Iran in the Gulf region over the new year’s period, have also exacerbated fears about a future large scale military showdown between Washington and Tehran and their allies in both the Middle East and Asia. (Image Corbis)

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Qatar’s inability to improve foreign ownership limitations and continuing doubts over how the United Arab Emirates (UAE) deals with failed trades have stopped index provider Morgan Stanley Capital International (MSCI) from upgrading the two countries to emerging markets status. This is the third time that Qatar and the UAE have failed to be upgraded to emerging markets status by MSCI, the index compiler said recently. MSCI had earlier hinted that Qatar might not make it because of its limit in foreign ownership. In its review of its MSCI Qatar index and the MSCI UAE index, the agency said it would maintain its frontier market status for both indices and consider them for potential reclassification as part of the 2012 annual market classification review. Commenting on the decision, a spokesman for the Qatar Exchange cited the positive steps taken by the Exchange and the regulators in Qatar to meet the criteria set by the index compiler MSCI including the improvement of the infrastructure of the market, the appointment of international custodians and implementation of the delivery versus payment process which have received wide international recognition and appreciation. “Although we would have been happy if the reclassification had been achieved, we remain confident that the Qatari market will continue its drive towards success motivated by the strong economy of Qatar and the favourable performance of the companies listed on the exchange”, the spokesman said. Regarding Qatar’s stringent foreign ownership limits, the MSCI said, “No change was

The Qatar Exchange (QE) saw the launch of the debt instruments market with the trading of the government’s short term Treasury Bills (Tbills) on the local bourse at the end of December 2011.

“Trade in short-term Tbills will commence on the Qatar Exchange, with trade in government bonds and sukuk (Islamic bonds) to start at a later stage,” Qatar Central Bank (QCB) Governor Sheikh Abdullah bin Saud Al Thani said in a statement.

TBills are public debt instruments (securities), which are issued by QCB at a discount to the face value. On the maturity the issuer pays date the full per value to the investor. It provides investors with the opportunity to benefit from a guaranteed return over a short period.

implemented or announced on this matter by the Qatari regulators during the review period...any change to the status of the MSCI Qatar Index is conditional upon a meaningful increase of foreign ownership limit levels applied to Qatari companies resulting in increased foreign room.”

The QCB governor expressed confidence that the government debt securities would be in demand by banks, financial institutions and investors. He noted that start of listing short term T-Bills on the QE starting on December 29 is a first step to launch the secondary market trading for bonds on QE providing the diversification of investment instruments in the Qatari Market.

The deputy chief executive officer of QE Rashid bin Ali Al Mansoori stated that the QE management has received the approval of Qatar Financial Markets’ Authority to launch the Debt Instruments Market and has received from QCB a list of T-Bills that will be listed for trading on 29 December.

The listing of the short term T-Bills on QE is expected to attract the attention of banks, financial institutions as well as investors, and the listing of Government Bonds and the presence of a bond market will encourage companies to issue and list bonds as another alternative for financing and ultimately contribute to increasing liquidity in the market.

Prices of TBills are quoted on a per lot basis for blocks or lots of QR10,000. This means that the minimum quantity that can be purchased or sold is always QR10,000 or multiples thereof. Similarly price quotes and trade executions for TBills on QE are on a discounted basis, meaning that the price is always less than or equal to QR10,000. The price can never be greater than QR10,000.

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Qatar and the uae do not yet aGain ACHIEVE ‘EmErGInG mArkET’ sTATus

Govt tbills to start tradinG on Qe froM 29 dec

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REAL ESTATE TRANSACTIONSAccording to Century21 Qatar, the number of transactions reduced in November as the government departments remained closed due to Eid Al Adha. Most transactions recorded were land transactions followed by houses and then villas. Al Wakra is catching the attention of investors, which is reflected with constant increase in the activity of land areas. The first week of November was recorded with approximately QR840 million. Second week decreased by 59 percent with transactions value recorded at QR345 million. Third week increased by 78 percent with transaction value recorded at QR615 million. The last week of October recorded the decrease of 23 percent at approximately QR476 million. Transaction values in Doha were recorded at 34 percent in the first week, increasing to 42 percent in the second week, further increasing by 25 percent in the third week before reducing to 30 percent in the fourth week. Al Rayyan transactions recorded 26 percent in the first week, four percent in the second week, increasing to six percent in the third week and only nine percent in the fourth week. Al Da’ayan showed an interesting increase in the number of transactions in the last week. The highest average transaction rate of land was recorded in Doha QR538 per square foot, followed by Al Rayyan with an average land price of QR282 per square foot. The most expensive land transaction was in Al Da’ayen area with a transaction value recorded at QR173 million, followed by QR150 million in Doha.

QATAR pROjECTS wORTh US$106 bILLION (QR386 mILLION) STILLTO bE AwARdEdQatar’s ambitious development plans over the next decade and beyond will be put under the spotlight once again at the annual Qatar Projects 2012 conference, which will take place in Doha, on 5 to 8 February 2012 at the Grand Hyatt Hotel.

news etc.In BrIEF

QU ANd QApCO SIgN mOUQatar University (QU) and QAPCO recently signed a Memorandum of Understanding (MoU) to formalise a mechanism of cooperation between both parties to facilitate the academic development of QAPCO employees and provide related opportunities for QU engineering students

By the terms of the agreement, QU will provide academic training for 20 QAPCO employees each year, while QAPCO will provide support to QU in a number of areas. This will include facilitating QU faculty and student visits to QAPCO plants and corporate offices, and organising six to eight week summer internships annually for up to 20 chemical, electrical, mechanical and industrial engineering juniors. QAPCO will also participate in all QU career fairs and related networking events, host a one-day recruitment event at the College of Engineering, and arrange a three day Leadership Boot Camp for 40 QU students. Additionally, QAPCO Research and Development Team will sponsor one QU PhD student.

gbI ANd TE SUbCOm ANNOUNCE COmpLETION OF ThE gbI CAbLE SYSTEmGulf Bridge International (GBI), the Middle East’s first privately owned submarine cable operator, and TE SubCom, a TE Connectivity Ltd. Company and an industry pioneer in undersea communications technology, recently announced the completion of works of the GBI cable system segments within the Gulf, the Gulf to India, the Gulf to Egypt, across Egypt and across the Mediterranean to Italy. GBI and TE SubCom are working together to achieve a final Ready for Service across the whole network in early 2012.

“This achievement is a significant milestone for the Gulf region, which continues to experience unprecedented economic and social growth,” said Rashid Al Naimi, chairman, GBI. “The GBI cable system will facilitate both well into the future.“ Ahmed Mekky, board member and chief executive offer of GBI, added: “It has always been our mission to deliver greater communications capacity and reliability to support the on-going growth in the region. TE SubCom has helped us accomplish that by completing a large scale project that connects three different regions of the world, in a timely manner.”

With a capacity of at least 5.18 terabits, the GBI cable system will enable real time communications for telecommunications operators and other major industries, while encouraging a greater sophistication of service offerings. It is the first system of its kind to be installed in the region in more than a decade.

“We are pleased to have reached this stage with the ‘Gulf Ring’ system alongside GBI and to have been a part of such a vital project for the Gulf region, where new subsea communications systems have been scarce,” said David Coughlan, chief executive officer, TE SubCom. “The system will provide essential connectivity, capacity and resiliency to the Gulf countries and will enable future network expansion to meet mounting business needs in the region.”

Qp ANd bARwA SIgN SALES COmpLETION AgREEmENT FOR bARwA FINANCIAL dISTRICT The signing ceremony was held in the presence of senior officials from both companies as well as media representatives. Upon completion of the project (2015), Qatar Petroleum is expected to re-locate its headquarters and various business entities to the Barwa Financial District. The value of the project is estimated at approximately QR11 million.

Hitmi Ali Khalifa Al Hitmi, chairman of Barwa Real Estate Company and Mohammed bin Saleh Al Sada, minister of energy and industry and chairman and managing director of Qatar Petroleum, exchanging the sales completion agreement for Barwa Financial District. The signing ceremony took place at the Sheraton Doha Hotel in December 2011.

“The International Monetary Fund expects Brazil will be the (world’s) fifth economy in 2015, but I believe it will happen earlier…what is important is that we will be growing more in 2012 than in 2011 and the exchange rate will be better and credit will be cheaper.”

Guido Mantega, Brazil’s finance minister said recently that his country, which now boasts of being the world’s sixth-largest economy, will overtake France for the fifth spot before 2015. Brazil continues to outpace European countries in economic growth and will “inexorably” surpass France in the near future, the minister said.

“This achievement enhances MEEZA’s credibility and the confidence our clients, suppliers and stakeholders have in us. This demonstrates a focus on the necessary measures and actions

to deliver quality services, to protect information and to satisfy actual and future needs, requirements and expectations.”

Ghada P. El Rassi, deputy chief executive officer at MEEZA, the leading provider of information technology and solutions services provider in Qatar, is now certified for ISO 27001:2005 and ISO 9001:2008 standards. The certification is awarded by Bureau Veritas Certification and accredited by United Kingdom Accreditation Service (UKAS).

2012events CAlEnDAr

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1-10Doha Trade Fair

2–7 Qatar Tennis Professionals Open Championship

17–19 Industrialist Conference for the GCC countries

25–28 Qatar Motor Show

30GCC Financial Risk Management and Transparency Symposium

30 – 2 feb Middle East Rail

31–1 feb Passenger Terminals World Middle East

January DOHA, QATAr

“If sanctions are adopted against Iranian oil, not a drop of oil will pass through the Strait of Hormuz.”

The Strait of Hormuz, which Iran’s vice president Mohammad Reza Rahimi has threatened to block if the West applies sanctions on its oil exports, is a strategically important waterway through which 40 percent of the world’s seaborne oil transits. The strait links the Gulf, bordered by petroleum-rich states like Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates, with Oman.

“With Qatar’s high profile hosting of the FIFA World Cup Finals in 2022, a major coup for the country and indeed the region, the government has committed to an extraordinary programme of capital investment that will ramp up over the next 10 years to develop a world-class infrastructure to underpin an investment-friendly business and leisure destination.”

Edmund O’Sullivan, chairman of MEED Events. According to MEED’s recently released 2011/12 Qatar Projects report, more than US$106 billion (QR386 billion) worth of major projects will be awarded between now and 2022, with significant investment in oil and gas, heavy industry, electricity generation and water desalination, social infrastructure and transportation links.

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techdesKwebsite rEVIEws

web AnD tech nEwsQuwic recoGnised for innovations The Qatar University Wireless Innovations Center (QUWIC) at the Qatar Science and Technology Park participated at the annual Gulf Traffic Exhibition in Dubai in December 2011. QUWIC presented its Intelligent Traffic, Transportation, and Logistics solution and portfolio of services (Masarak) for the first time in the region outside Qatar [Ed’s note – this was featured in TheEDGE November edition]. During this event more than 200 global players showed their solutions and products, and Masarak was shortlisted for the innovations award in the traffic management category and won a highly commended certificate. Dr. Adnan Abu Dayya, the executive director of QUWIC said “Receiving a highly commended certificate from a global judging panel is a great testament to the value of Masarak and its unique positioning in the market”.

KasPersKy lab re-launches cloud-based securityMalware and viruses represent the number one IT security headache for businesses of all sizes across all sectors, closely followed by spam and phishing. Kaspersky Lab experts identify more than 70,000 unique malware samples every day. Small and medium-sized enterprises can find it difficult to understand and respond to the latest IT security threats in today’s rapidly evolving IT landscape. As business needs change, operations can become more complex and this in turn can affect IT security. To help channel partners support smaller firms in addressing security, the increased use of mobile devices and social media, cloud computing, and virtualisation, Kaspersky recently launched a new edition of Kaspersky Hosted Security, cloud-based security for web and e-mail.

www.twitalyzer.coMPositioning itself as “Serious Analytics for Social Media Experts”, this site parses data from Twitter accounts and breaks it down into digestible bytes, from which you can extrapolate your own or others’ Twitter ‘impact’. The service is free, but if you want to delve even deeper into this social media’s ocean, you can sign up for further intricate detail.

www.Mannzili.coMOstensibly the largest online real estate portal in Qatar, this website is more than anything an aggregator for all listings and realtors in the country. It offers a huge selection of residential and commercial properties, broken down into every configuration imaginable, including by suburb or city, whether there is furniture or not. It also features a powerful customisable search engine.

www.QitcoM.coM.QaQitcom is to be held at the National Convention Centre in Qatar from March 5 to 7, 2012. The event is fast becoming the region’s go-to communications and information technology (IT) gathering. Last year’s event attracted the likes of IT guru Guy Kawasaki, whose talk is featured on the site in video format, among others. The site also offers all the information potential delegates or attendees to the event might need, as well as information about IT in Qatar. tech GadGet:

JBl OnBEAT EXTrEmEThis docking station that turns your iPad, iPhone or iPod Touch into a stereo system. Optimised for the iPad and iPad 2, yet its rotating dock connector also works with the iPhone and iPod Touch

and the advanced Bluetooth wireless speakers can also connect to your Apple multimedia devices when they are detached from the dock, as well as to Android smartphones, tablets and wireless MP3 players, as well as linked to many gaming consoles. Among many other features, it can also be used for hands-free calling through Apple’s FaceTime or Skype, making it ideal for both home and office. Available in Qatar at Harman Stores.

The 28th ‘Chaos Communication Congress (28C3) - Behind Enemy Lines‘ computer hacker conference was held in late December 2011 in Berlin, Germany. The Chaos Computer Club largest event of its kind in Europe and one of the biggest in the world, attracting more than 3000 computer geeks and hackers to discuss network policy, data protection and IT-security among other topics. (Image Corbis)

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Mouawad set to launch its neXt new Generation boutiQue at laGoonaQatar’s next retail and lifestyle destination, Lagoona, is gearing up to welcome amidst its parade of exciting brand names, world-class jewellery, Mouawad. With Mouawad’s legacy of haute joaillerie and its growing presence in the Middle East and Lagoona’s unique air of timeless elegance in style and structure, it is a perfect match for Doha’s most prestigious district and sophisticated lifestyle experience.

A signing ceremony was held at Lagoona attended by the chairman of Darwish Holding, Bader Al Darwish and Pascal Mouawad, co-guardian of the brand. The outlet is slated to open its doors in February 2012.

GalaXy note available now! Galaxy Note features the world’s first and largest 5.3” HD Super display. This is an expansive high-resolution smart screen that provides an immersive and best in class viewing experience while ensuring smartphone portability and on the go usability.

The new GALAXY Note is now available in Qatar.

hsbc introduces clientsPhere toits Mena custoMersHSBC Global Payments and Cash Management has launched ClientSphere for existing and new customers in the Middle East and North Africa (MENA). A highly sophisticated and innovative online product, ClientSphere has been created to speed up and simplify implementation of complex cash management solutions by allowing customers to easily manage and monitor all up-to-date activities in one place - regardless of country.

noKia software now available in arabicNokia has announced the release of its latest software update for its flagship Nokia N9 smartphone across all key markets in the region, as part of its ongoing commitment to deliver the best user experience for its smart phone customers. Among the highlights of the software update includes the launch of full Arabic support enabling Arabic speaking consumers to view the entire user interface in Arabic, providing them with a superior smartphone experience in their preferred language.

Nokia N9 with full Arabic software upgrade

nissan’s first coMPact crossover unVEIlED In QATArSaleh Al Hamad Al Mana Co. exclusive distributors for Nissan, Infiniti and Renault, unveiled Nissan’s new and aggressively styled compact crossover Nissan Juke, baby brother to Qashqai and Murano. Aimed at a younger market bored with look-alike hatchbacks, the Juke combines attitude, irreverence, modish style and energy with a mischievous sense of fun.

Right: Abdulilah Wazni, regional marketing manager at Nissan Middle East, showcases the Nissan Juke.

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In the West, the so-called “festive season” can be high-paced and stressful, it seems to start earlier each year, and the commercial bombardment can often verge on

the ridiculous. So when I moved to Qatar from the West a little over six years ago, just a month before Christmas, I remember thinking that I would at least escape the madness.

Seven Christmases later, I am still wondering where the escape is.

Obviously there is a very large expatriate population – just think about the up to 200,000 Filipinos in the country who are for the most part Roman Catholic – and businesses have recognised that there is a captive market to be served.

But really, it is fascinating to consider how prominent Christmas is in Qatar, a relatively strict Muslim country. I say ‘relatively strict’ because Qatar does seem to fall somewhere in the middle where Christmas is concerned.

It is certainly not like Saudi Arabia, where the British Embassy website advises “Christmas is not recognised...and most expatriates are expected to work on Christmas Day”. But probably not as far along as Dubai either, where a 15-metre high Christmas tree dominates the Wafi

City Mall (apparently “deck the malls” is an appropriate phrase for Dubai at Christmas).

But here in Doha, I was still amazed at the sheer number of Christmas related goods for sale. Decorations, trees, food, the lot. Along every single aisle in Carrefour were signs extolling “Season’s Greetings”. But whose season? Certainly not the indigenous population of the country itself.

The fact is it makes economic sense. There is a good proportion of the expatriate population, which (a) celebrates Christmas, and (b) has the disposable income to celebrate in some style. Christmas and New Year are major occasions, and people away from home often feel a need to reconnect with that holiday period.

And reinforcing the economic aspect is that it is clearly not bringing any religion to the forefront. After all, we are talking about Santa Claus and Christmas trees here, not anything symbolic of the true meaning of the day.

But even though the market is big, there is no obligation to provide it and in some respects it could be perceived as getting smaller. The decision to move Qatar National Day from September to December 18 – marking the day when the founder of the state HH Sheikh Jassim bin Mohammed Al Thani assumed power – coincided with perhaps a toning down of Christmas celebrations here.

The stunning Christmas tree in the lobby of the Ritz-Carlton was suddenly shrouded in national maroon and white fabric until the 18th, after which it was revealed to the

public. This Christmas, it did not even make it to the lobby.

There was also a controversial incident at The Pearl-Qatar this Christmas involving what turned out to be a Dutch tradition involving Saint Nicholas – the inspiration for what we now call Santa Claus. The very public nature of such a foreign display created a lot of online chatter about what should be allowed.

The point I am making is where do we draw the line? Qatar is a Muslim country, one that does not celebrate Christmas, offi cially or otherwise. Should businesses not respect that and keep festivities to a minimum? Or do we accept that commercialism and economic sense are simple realities, and ignoring things like the “festive season” would make the country less attractive to potential residents?

It goes back to what I wrote a few months ago about the 51 percent ownership rule, and how much you want to open your country up to the rest of the world. Strike a balance and it can work. Open the fl oodgates, or worse take advantage of your host, and it can get complicated.

All that said, whatever you choose to celebrate at whatever time of year, I hope you all have a wonderful and prosperous New Year.

Kamahl Santamaria is a Doha-based news anchor with Al Jazeera English and host of the channel’s business and economics programme Counting the Cost.

CHRiStMASThere was no obligation for businesses in Qatar to mark the Christmas season, but they did so in a notable manner. Kamahl Santamaria looks back at what the local market got out of it, and the fine line it treads.

QATARIMpACT

20 TheEDGE

Out of curiosity, uncertainty and anticipation, business leaders are seeking insights into what the future holds for them and their businesses.

So let us answer by exploring what the 2012 growing trends for the Gulf Cooperation Council (GCC) business community will be.

Job creationThe major employment issue that needs to

be addressed by all businesses is job creation. Estimates are that 75 million jobs need to be created in the next decade. Businesses cannot sit on the sidelines and wait on the government for a solution – regional job creation for Arab nationals needs to be everyone’s concern. In addition to having a broader community interest, the reason comes down to an economic principle – demographic dividend, which occurs when young working age adults comprise a disproportionate percentage of a country’s population and the national economy is positively affected.

Across the GCC, young adults comprise a disproportionate percentage of the population but are also the majority of the unemployed, which is robbing the region of the demographic dividend. Everyone benefits from job creation; therefore everyone needs to contribute to it.

business outlooKWhere will the global growth spots be?

In 2011 HSBC rolled back the clock to their original power base from 144 years ago and returned their chief executive offer (CEO) to Hong Kong. At the time when India and China were the top two global economies and are predicted to resume this position around 2025, HSBC has recognised that the new West is East.

The business outlook for 2012 will be vogue and profitable to make a major geographical shift – or at least integration. Given their growing stature the GCC needs to shift its focus from the West to the East.

The world is looking in the direction of where the population is and creating a new era entitled peoplisation, meaning we no longer live in a world constrained and defined by geographical markings. Rather we live in a world that needs to be understood by where and who the people are.

new worKforceConsidering the future of business is

moving to the East and expatriates from the East are the GCC work engine, CEOs need to make the talent shift and understand who the “new” workforce is. The new workforce is Eastern, where 72 percent of the world’s population currently resides.

For example, most of their parents came

from rural or family business (sole proprietor) backgrounds and many are not functionally literate so the grooming for corporate life that happens over the dinner table simply did not take place – this can also be a plus as they do not carry with them historical baggage.

This young generation has a youthful and idealistic mindset about what career growth should look like. A small little button called the reset button exasperates career ambitions and employment behaviour. This is the button that is pressed when the game they are playing on Play Station, Game Boy or Nintendo Wii is not going well. Instead of following through on the game, they have found it more convenient to press the reset button and have a fresh start. This is defining workforce behaviour for the under-35 crowd.

Another descriptor to be attentive to is mobility. Many of the new workforces started their life in the rural hinterlands and joined the great migration to the city as every second, two people make the move. To summarise the trends and today’s future, it comes down to looking towards the sunrise (East) versus the sunset (West). Leaders need to shift their focus to the future, which is really today.

Dr. Tommy Weir is an authority on fast growth and emerging market leadership, and advisor and author.

What is next? is the question that business leaders across the region are asking. The European debt crisis and the Arab Spring defined 2011. Dr. Tommy Weir postulates on what the future holds in 2012.

next in 2012?

MIDDLE EASTMATTERS

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21TheEDGE

ENERgY & RESEARChQatar’s role in wOrlD ClImATE TrEATy

The annual United Nations climate change negotiations are always complex. Last month’s talks in Durban, South Africa, were no different. So what does the outcome of COP17 mean for the Middle East? And what is Qatar’s role when it comes to this global arena? Jamie Stewart reports.

In December 2011, countries gathered in Durban, South Africa, agreed a deal to push for a new climate treaty, rescuing the latest round of United Nations (UN) climate talks from the brink of collapse.

Some years ago, the science behind climate change ceased to be a matter of contention and shifted into the political and economic mainstream. Only in the most conservative leaning of organisations is anthropogenic global warming still considered a matter for dispute.

But despite this seismic shift in popular opinion, the securing of a global deal to limit carbon emissions on a worldwide basis remains an often herculean task, characterised by a long list of disparate interests and hidden agendas.

For example, Middle East nations came to the climate talks in Durban hoping to protect their fossil fuel dependent industries while maintaining a course towards a greater reliance on alternative energy, hence limiting dangerous emissions while maintaining economic growth – in general terms, this was the pot of gold for developing countries.

The European Union (EU) known for its collective green stance when compared to the globe’s major economic powers such as the United States (US) and China – arrived at the talks calling for a new legally binding treaty on global warming by 2015, covering all major emitters. In return, the EU said, it would sign up to a second period of emissions cuts under the existing Kyoto climate deal.

Qatar emerged as an unexpected de facto leader of the world’s emerging countries after recent COP17 international talks in Durban, South Africa. Doha will hold the next round of talks in 2012. (Image Corbis)

A decision was reached at the talks to allow carbons capture and storage (CCS) projects under the Kyoto Protocol’s Clean Development Mechanism (CDM).

CCS is a means of capturing carbon from fuels burnt for power generation. The technology is at an early stage of development, but it may one day allow developed countries to burn gas for power generation while having little impact on those countries’ emission reduction targets.

Under the CDM, emission-reduction projects in developing countries can earn certified emission reduction credits. These saleable credits can be used by industrialised countries to meet a part of their emission reduction targets. The decision to include CCS within the CDM is therefore a boon for CCS technology, which by extension is a major boost for the world’s fossil fuel exporting nations, those in the Middle East included.

Qatar’s roleIn the middle of all the confusion and intense negotiations at

Durban, Qatar emerged as an unofficial leader for the developing countries. This was due, perhaps, to its unusual position, moving towards developed status, while still sharing many of the developing country’s concerns.

Qatar environment minister Abdullah bin Mubarak bin Aabbound Al-Ma’dhadi said that Qatar’s efforts were not “limited to the fields of adaptation to the effects of climate change”, but rather “exceed them to the activation of solidarity and joint efforts” among all nations, adding adaptation to climate change should involve making people secure so that “social and economic development could be achieved”.

For example, Qatar used the gathering to spearhead its Global Dry Land Alliance, which aims to prevent long term food security issues that affect supplies, and also offer umbrella protection to members in case of a food or water crisis. Such an alliance could be invaluable in terms of climate change adaptation.

Qatar National Food Security Programme chairman Fahad Mohammed Al Attiya revealed the alliance will be established by December 2012 to coincide with the next round of climate talks – which will hosted by and held in Doha.

ENERGY & RESEARCh

TheEDGE24

United Nations secretary general Ban-ki Moon speaks at the Climate Change Conference COP17 held in December 2011 in Durban, South Africa. (Image Michelly Rall/Getty)

The US initially said it would not support the 2015 deadline under the EU proposal; China and India found themselves caught somewhere in between the classic “developed” and “developing” country’s standpoints, yet still succeeded in clashing with one another throughout the talks.

eventual outcoMeThe Kyoto Protocol, which in its present form covers just 25 percent

of global emissions, will expire in December 2012. It compels most developed countries to set maximum limits for thermal emissions.

The negotiation marathon ended in Durban at around dawn. According to the agreement, a new treaty will legally require all countries, including the US, China, and India, to cut greenhouse gas emissions after 2020. A Green Climate Fund to help poor countries was also agreed – but no money has been put forward for this as yet.

Governments decided to adopt a universal legal agreement on climate change as soon as possible, and no later than 2015. Work will begin on this “immediately”, the final UN communication said, under a new group called the Ad Hoc Working Group on the Durban Platform for Enhanced Action.

The UN described the outcome in a statement as a “breakthrough in the international community’s response to climate change”.

Conversely, international environmental group Friends of the Earth labelled the final agreement “feeble”, saying the outcome was “significant, but [too] weak to prevent dangerous climate change”.

“The new treaty will not take effect until 2020. But scientists have warned global emissions need to decline well before 2020 to prevent catastrophic climate change,” the group stated. “This will leave millions at threat from more extreme weather events, like flooding and drought. And it will hit the world’s poorest people hardest.”

what the outcoMe MeansFor Qatar and the wider Middle East region, little will change in

the immediate future. The main pillar of Qatar’s economy, gas exports, will be protected due to the reliance of the world on gas burn for power and heat generation, which is a cleaner fuel than coal.

However, one decision could have a long lasting positive impact on the economies of the region, and may even prove a boon for Qatar.

Middle East nations came to the climate talks in Durban hoping to protect their fossil fuel industries, while limiting dangerous emissions and maintaining economic growth.

TheEDGE 25

ENERGY &RESEARCh

Qatar siGns deal TO sHOrE uP Global businessQatar’s recent memorandum of understanding (MoU) with the United Kingdom is to extend into the international gas market, explains Jamie Stewart

Qatar’s energy minister HE Mohamed bin Saleh Al Sada says a recent deal Doha signed with European energy utility giant Centrica will further ensure Qatar’s place in world energy markets. (Image Corbis)

Qatar Petroleum International (QPI) signed a major deal early in December with United Kingdom (UK) based energy utility Centrica to “explore and cooperate on energy related investments”. Potential investment targets include new or existing

projects in upstream oil and gas, liquefied natural gas (LNG) projects, gas storage, as well as electricity generation from combined-cycle gas turbine assets, and downstream opportunities “in accordance with each company’s strategic priorities”.

QPI is the international investment arm of Qatar Petroleum. The move is part of an overarching bid on Qatar’s part to extend its reach into international gas supply markets, both in the physical and strategic sense. The alliance is intended to “deepen the strategic relationship between Centrica and Qatar” established earlier this year with the signing of a three-year contract for the supply of 2.4 million tonnes of LNG per year. But while the MoU includes provisions to cooperate on LNG supplies, there are no plans to either increase or extend the existing supply accord, which expires in 2014.

“The alliance demonstrates QPI’s objective to play a greater role internationally with partners, such as Centrica,” the companies said in a joint statement. The deal is not restricted to projects based in Qatar and the UK, but could extend to cooperating in other afar core LNG markets, including those in the Caribbean and North America.

Key MarKetsWith North America becoming increasingly gas self sufficient due

to a boom in unconventional gas production across the continent over the last two years, international markets outside of North America are growing in importance to Qatar. This was underscored by energy minister HE Mohammed bin Saleh Al Sada, who said he was “pleased to note that QPI and Centrica have agreed to explore various project opportunities together worldwide”.

Al Sada continued: “This strategic alliance will reinforce QPI’s objective to transform itself into a more active international player in the upstream, downstream, gas and power sectors as part of the greater objective of the state of Qatar to be play a greater role in world energy markets.”

Europe is a key supply market both to Qatar and Russia, the world’s two biggest exporters of natural gas. Qatar has recently engaged a number of companies, including Russia’s largest independent natural gas producer NOVATEK, in talks aimed at boosting future cooperation, and guarding against a loss in North American business in the process.

QPI chief executive Nasser Al Jaidah said the deal was in line with plans put in place by the energy minister to diversify QPI’s portfolios into various sectors. “We are very delighted with this cooperation and we look forward to exploring some prospective opportunities together,” Al Jaidah added.

Qatar Petroleum signed an important deal in late December with European energy utility giant Centrica.

ENERGY & RESEARCh

TheEDGE26

Qatar’s LNG exports to Europe increased in Q3 2011.

Qatar lnG eXPorts increaseQatar increased exports of liquefied natural gas (LNG) into

Europe on a year-on-year basis during the third quarter of 2011. And the increase came despite LNG consumption in Europe – a key export market for Qatar – falling by nearly 10 percent year-on-year due to the former’s ongoing economic problems, according to data from information provider Eurostat. Qatari exports to the EU stood at 6.87 million tonnes, a significant 13 percent year-on-year increase, as its expansion trains operated at “plateau production” – or equal to long term maximum production – and were largely unaffected by maintenance work on Qatargas’ facilities, which did not start until mid-September. Qatar also committed more volume to Asia during the same period, underlining its dominant global role in the LNG export market.

Qatar foundation and sieMens siGn aGreeMentIn late December Qatar Foundation (QF) and Siemens entered

into an agreement to further establish Qatar as a key regional infrastructure hub for Siemens and to further QF’s mission to develop infrastructure knowledge from within the country. “QF’s mission is to unlock the human potential of our nation so as to support our country’s ongoing transformation towards a knowledge economy,” explained Her Highness Sheikha Moza bint Nasser. “Today’s announcement is an excellent example of how, by partnering with world-class technology partners, we will be able to fulfill this vision.” The Memorandum of Agreement, signed by QF vice chairperson, Her Excellency Sheikha Hind bint Hamad Al Thani, and president and CEO of Siemens AG Peter Loescher, took place at the Qatar National Convention Center in Doha. QF Chairperson, Her Highness Sheikha Moza bint Nasser, and visiting German president Christian Wulff witnessed the signing.“In a globalised world with complex challenges that must be met, partnerships need to be built on solid foundations, common values and integrity - qualities which are at the core of Qatar Foundation’s and Siemens’ values,“ said Dr. Tidu Maini, Qatar Science & Technology Park Chairman. Under the terms of the agreement, Siemens will establish a service headquarters in Qatar for the company’s regional power transmission and distribution business. Siemens will also develop a regional competence centre for rail-bound transport in Qatar – one that will help design, develop and customise rail products within the region and build an Innovation Center at Qatar Foundation’s Qatar Science and Technology Park.

Middle east Gas shortaGe?There are countries in the Middle East that are short of gas

supply, International Gas Union (IGU) president Abdul Rahim Hashim told the World Petroleum Congress last month. This was despite Qatar being the world’s largest exporter of LNG, and huge

reserves in Iran, Egypt and Saudi Arabia, Rahim Hashim said. The IGU president pointed the finger at subsidised gas pricing in many Middle East countries, which he said would eventually prove unsustainable given rapidly increasing demand due to population growth. “In order to avoid the risk of shortages, gas prices must eventually rise towards global levels, which in turn should increase exploration and production activity and encourage investment and re-investment,” Rahim Hashim advised. He went on to warn that, under a business-as-usual scenario, only Qatar and Algeria from the combined MENA region would be able to make a “major contribution” to future global gas trade.

doha and Madrid siGn research dealTwo public research bodies in Qatar and Spain inked a deal

last month aimed at developing “ground-breaking joint research projects” in the Qatari solar power sector. The Qatar Environment and Energy Research Institute (QEERI) and the Spanish Research Centre for Energy Environment and Technology (CIEMAT) allows for “sharing of knowledge and expertise, and conducting joint research projects in solar energy”. QEERI executive director Rabi Mohtar said: “Qatar is blessed with huge solar energy resources, and we must always remember that clean, low cost energy is critical to the development and sustainability of Qatar’s economy.” The groups will focus on means of generating solar energy to power water desalination plants and scientific instrumentation in particular. Both are generally energy-intensive processes and are considered vital to the future development of Qatar.

ENERGY AND RESEARCh BRIEfS

OpINION

understand the leGalsFirst and foremost, do not get into something if you do not fully understand the legal ramifications. We have all done it, I have done it. Everyone’s got a horror story and there are many in Dubai. Some expatriates who snapped up property in the boom time did so under the assumption that the regulation of the building and real estate industries would be as robust and transparent as those in their home countries. In other words, they assumed that the law would protect them. Sadly, many discovered that when their property purchase did not turn out to be all roses, they had no legal standing whatsoever.

While most of the Middle East residents are still very wary of buying local property, sights are still set on global opportunities – of which there are many. Robert Pearce writes an introductory guide to successfully navigating international property markets.

THE kEy TO InVEsTInG In GlOBAl rEAl EsTATEWISE INvESTMENT

to get US$70,000 (QR254,000) rent a year, which is about US$6000 (QR21,840) a month. So I get online and tap in the address and find out how many bedrooms it has got, and lo and behold, I discover actual rent is more like US$4000 (QR14,560) a month.

It is easy to find out: a Google search will tell you in five minutes.

Get a handle on taXation and fees

People often enter into international property purchases without thoroughly understanding the taxation implications. For instance, Hong Kong is widely seen as cheap for tax and it usually is but at the moment when if you buy and sell in Hong Kong in a 12 month period you will pay 16 percent stamp duty, which is basically a tax to stop people from trading or ‘flipping’ property.

Robert Pearce is the Director in Dubai of the International Property Investor, IP Global.

OpINION

29TheEDGE

MaKe sure you can Get financeSecondly, one really must understand the

leverage situation. If you want to buy in the United States (US), for example, and you have been given verbal approval for mortgage finance from you bank, do not think that is any commitment. The banks are very good at smiling and nodding but then, at the moment that counts, not having the courage of their convictions to lend the money. But you have already put down your 20 percent deposit and committed financially to the investment so you are in a mess. I know it sounds basic but I have seen it time and again. Make sure you find out the cost of funding and redemption penalties obtain an offer in principle from a bank and be comfortable with the loan product offered; otherwise it goes a long way to nullify the upside of the investment.

the liQuidity Question – can you eXit easily?

People tend to overlook the exit strategy when investing in property. If you are looking at a property investment, it does not matter if it is in New Zealand, the United Kingdom or Hong Kong, sit down and ask yourself the question, “Who buys this from me when I sell it?” And if your answer to that question is ‘another investor’ you should not buy it, because in many markets you would have probably got 100 times the number of buyers who are local owner occupiers than you have investors. A sensible property investment is an asset, which is amenable to the local market, the property that locals want to rent and buy. This is usually the property that is centrally located and well built. The locals know which ones these are but foreigners do not know that when sitting at their computer in New York trying to buy an apartment in Kuala Lumpur. You have got to buy the property that locals want to sell and buy and rent.

It is not difficult to find this out, get online for a start. In most developed countries there is a complete transaction history on properties. For example, in one of IP Global’s buildings on Wall Street, 40 percent of the units are sold and before we got involved every single unit was sold in the local market, so we know they are owner occupied units, we know that they

will rent out because we have got the units rent tenanted before people buy them. So get online, call real estate agencies and ask ‘how many people are buying these locally?’ If you have a friend who lives in the city, send them around. Yes, it is a bit of homework but when you are spending this kind of money, you need to do that homework. You need to get a sense that you are buying property that locals will want to buy and rent, so how far is it from the tube or train station and the central business district?

understand tenancy and yield Potential

What are you going to get in terms of a real tenant and what is your yield going to be? That is real yield, not what the agent tells you what the yield will be.

So if you read a report that says, ‘if you buy this property you will get a yield of seven percent’ that means that on a unit worth US$ 1 million (QR364 million) you are going

MalaysiaThe enduring legacy of 2011 will be one of uncertainty in the Middle Eastern investment community, as the effects of the Arab Spring on a regional level, and both the eurozone crisis and downgrading of America’s economy make themselves felt in markets around the world. As a result, we have seen that Middle East investors have reacted by turning their sights toward the more stable investment markets, such as those of Malaysian real estate. According to out internal research, IP Global has seen a marked rise of United Arab Emirates investors into Malaysia of 11.4 percent Q3 2010 to Q3 2011, underlining its perception as “safe haven” market. This trend is most evident at IP Global’s latest real estate project, The Richmond in Kuala Lumpur, where Middle Eastern investment has risen 14 percent over the past 12 month period. With m ore than 25 years experience providing financial services, Malaysia has quickly become the centre for Islamic Finance in Asia. Coupled with diversifying into non-US dollar asset markets, Middle East investors are benefiting from their familiarity with the principles of Islamic Finance, that have proven to provide more security than conventional finance methods

londonLondon has a sound economic and political infrastructure, mature legal frameworks and solid growth potential, while maintaining a key stake in the global financial services sector. Another appealing factor is that central London rents are currently at an all time high, and investors can expect an approximate rental yield of four to six percent. Demand for London property and especially its ‘trophy’ assets of Belgravia, Knightsbridge, Mayfair and Chelsea have traditionally been a key requirement for investors from the Gulf Cooperation Council and IP Global predicts that central London will continue to lead the pack in terms of growth throughout 2011.

investMent international tiPs for 2012

FINANCE &ECONOmICS

also in this section:• inside edge: Manjeet Chhabra gives an insight of how the current Arab Spring and

afflicted eurozone have impacted Qatar’s strong economic growth (P.32).• special report: Matt Ghazarian writes how Qatar’s tourism sector aims beyond the

anticipated 2022 World Cup (P.34).• balance sheet: Janak Patwaril explains the complexities and the relationship between

headquarters and subsidiaries (P.36).

InsIde edge • specIal RepORt • Balance sheet • peRsOnal FInance • ecOnOmIc BaROmeteR

Brought to you by:

econoMic baroMeter (P.40)The Gulf Cooperation Council (GCC) has been long awaiting the decision to enforce the Khaleeji currency, meaning a single monetary union. Karim Nahkle explains the pros and cons the

Arab states would face.

INSIDE EDGE

Qatar’s per capita income is one the highest in the world, ensuring strong economic growth. However, the current political unrest in the region and the eurozone’s predicament has placed a lid on the country’s economical gains, explains Manjeet Chhabra, who looks at market activity in H2 2011.

QATAR’S ROBUST DOmEsTIC FACTOrs

RObUST dOmESTIC bUT wEAk ExTERNAL FACTORS The Qatari economy is riding a wave of optimism and economic growth supported by the government’s expansionary budgetary allowances. Adding to this, the private sector is playing an active role and partnering in the country’s economic diversification drive; also the country’s per capita income is one of the highest in the world. Considering this indigenous robust backdrop, it is anyone’s guess that Qatar’s equity market should also be witnessing a smooth ride. Now adding to this the fact that the global economy is reeling under pressure in the form of an out-of-gear United States (US) economy and the deepening eurozone quagmire. Also, countries across the Middle East and North Africa (MENA) region are facing hitherto unknown political and social upheavals which have severely dented investor sentiments. These considerations, not only make our otherwise easy ‘guess’ difficult, but also prompt us to delve deeper.

gLObAL COmpARISONIf we consider the six-month period June to November 2011 and

see how global equity and other asset markets have performed, the situation is not one to be positive about. Though equity indices have recuperated in the last couple of months, the overall sentiments are not firm footed and a slightly negative event paints the indices red. Emerging market indices have been the larger sufferers as global

institutional investors have minimised portfolio exposure to these markets. A quick snapshot of global indices for the six-month period is as follows:• DJIA, FTSE and NIKKEI down 4.2 percent, eight percent and 13

percent respectively.• Chinese, Korean and Indian benchmark indexes down 15 percent,

13.8 percent and 13 percent respectively.A subdued global economic outlook has had its negative effect on

commodity prices as well. The average buyer and seller prices of three month contracts trading on the London Metal Exchange for aluminium, copper and steel have descended 25.1 percent, 19.6 percent and 7.9 percent respectively. But crude oil prices (OPEC basket) have been range bound and have ended the period under consideration flat, with a slight negative bias. The safe haven of gold on the other hand has witnessed a steady rise in prices to US$1745 (QR6354) per ounce returning a 13.7 percent rise in price for the six-month period. But this price level occurred after it traded in the record US$1900 (QR6916) and above price levels in August to September in 2011.

QATAR ExChANgE INdEx pERFORmANCE COmpARISONNow if we turn our focus to the Qatari equity market, we can say

that the benchmark index has performed better than most of its global counterparts. The main index has reported an addition to its level over the six-month period as against a drop in other global equity indices. The QEI gained 2.6 percent as at November-end compared to the May-end level and its market capitalisation has epanded 0.3 percent from QR448.36 billion to QR449.82 billion during the same period. Trading volume averaged close to 119 million shares per month in the six month period. Barring July, when volumes dropped significantly to just above 78 million, other months witnessed a strong volume activity.

Also in comparison to its Gulf Cooperation Council (GCC) peers, the Qatar Exchange Index has displayed a relatively encouraging performance. Over the six-month period, all the other GCC indices have declined in the range of seven percent to 14 percent. The ADXGI had the least decline with 7.4 percent, while the laggard was BASI with a loss of 13.6 percent.

INSIDE EDGE

TheEDGE 33

The Qatari equity market benchmark index has performed better than most of its global counterparts.

SECTORAL pERFORmANCEThe sectoral indices have reacted to external and domestic factors

and have displayed performances mirroring the overall trend. The government’s plan to invest in excess of US$125 billion (QR455 billion) to develop energy, utilities, industries, infrastructure and the aviation sectors over the next five years has also supported the performance of the stock market.

The expectations of an expanding economic base has directly propped up the banking and financial sector stocks, which in turn have sent the sub-sectoral index soaring. The banking and financial sector index has soared more than nine percent during the six month period. While index components Masraf Al Rayan, Qatar International Islamic Bank and Qatar National Bank supported the main index, The Commercial Bank of Qatar and Doha Bank dragged on the sectoral index. Banking stocks were also helped by the Qatar Central Bank’s decision to reduce the key policy interest rates twice during the year. The reduction in policy interest rates in line with the low rates policy being followed by several advanced economies was favourable to the domestic economic environment as well. This boosted investment spending in the domestic economy, and the credit activity by the banking sector witnessed an expansion, thus underpinning banking stock prices.

But the other sectoral indices have been on the other side of the spectrum. The services sector suffered the largest loss of 5.2 percent and was closely followed by the insurance and industrial sector indices which descended 4.3 percent and four percent respectively. These sectors have taken a beating primarily on account of profit booking by foreign institutional investors which overturned the demand generated by domestic buyers. Index heavyweight, Industries Qatar has dragged

the main index as oil prices have traded in a tight range and have shown susceptibility to weaken. Services sector components too have been weak with Barwa Real Estate, Nakilat and Qatar Telecom witnessing a declining trend. The insurance sector index reflected its single component’s movement as the price of Qatar insurance weakened by 4.3 percent.

OUTLOOkIn the current overcast global economic scenario, the benchmark

Qatari index has shown a relatively resilient performance with an uptick in one sector (banking and financial) outweighing the losses in the other sectors. Global leaders are taking fervent steps to alleviate the world economic situation. Though it is highly improbable that in the short run, the economic condition will improve drastically, in the long run it is safe to assume that the odds will even out and a growth trend will be witnessed. As energy prices remain favourable and high investment spending fuels Qatar’s growth, the domestic equity market is in a better position to respond favourably to an ensuing optimistic scenario in 2012 and beyond.

SpECIALREpORT

estimated that some 5000 hotel rooms will come on line every year up until the 2022 World Cup kicks off.

Hoss Vetry, the cluster general manager for the Ritz Carlton Doha, said it was critical that Qatar avoided oversaturation in the sector. “At the end of the day, customers have so many places to travel to, and Doha for the last two years has become a new destination for people who want to look for new places, but my recommendation is that we do not make the same – I do not want to use the word mistake – of allowing so many hotels to be built, and then later on you don’t have enough travellers coming in,” he said in an interview with the Gulf Times in mid-October.

It was important to strike a balance between the needs of a one-off event such as the World Cup, and a longer term vision for the economy and tourism, Vetry said.

Qatar should be able to do that with ease, however, seeing as how it already hosts several annual events, including the Qatar Masters Golf Tournament, Qatar Open, ExxonMobil Open Championship, Qatar Cycling Tour and the Asian Football Cup of Nations.

Ahmed Abdullah Al Nuaimi, the chairman of the QTA in an interview with Reuters earlier this year said the tourism sector would target the 50 million passengers flowing through the new international airport.

“If we just attract five percent of the airport capacity, that’s about 2.5 million a year. That’s going to be great business,” said Al Nuaimi in mid-August.

Though it will be a long time before Qatar has a clear impression of how well its tourism industry will adapt to life after the World Cup, the sector will be well equipped to meet visitors’ needs. The challenge will be to ensure it cashes in on the publicity and goodwill a successful staging of the event will provide.

Matt Ghazarian is an editorial contributor at Oxford Business Group.

atar’s tourism sector will be one of the big winners of the 2022 World Cup, with an accelerated building programme of hotels, hospitality facilities and entertainment centres aimed at making sure fans will enjoy their stay, though care has to be taken to

ensure that once the World Cup is over, visitors keep coming through the turnstiles.

Even before the World Cup bid, Qatar had been working hard to put in place the infrastructure to support its tourism industry. Some of these developments include an international airport that will be able to process 50 million passengers a year and a planned proposal to build a terminal to handle cruise liners. The US$1.2 billion (QR4 billion) Qatar National Convention Centre strengthens the country’s appeal as a business and congress destination. In total, Qatar expects around US$25 billion (QR91 billion) to be invested over the coming 11 years in tourism related projects, according to information compiled by the Qatar Tourism Authority (QTA).

Qatar’s tourism sector is already expanding, despite regional unrest and concerns over the global economy. The country has posted solid growth in 2011 while many nations in the region have seen arrival numbers slump or only marginally increase. According to data issued by the United Nations World Tourism Organisation (UNTWO) at the end of October, incoming tourism numbers are forecast to increase by between four percent and five percent over the next 12 months — a significant contrast to the drop in visitor numbers across the Middle East, where the agency says there has been an 11 percent decline.

Qatar benefitted from the instability of the Arab Spring. In the first six months of 2011, there was a 39.1 percent jump in the number of visitors from other Gulf Cooperation Council (GCC) states, visitors who may have chosen to stay closer to home rather than travel to other countries in the region that were embroiled in political unrest.

Data issued by the QTA also showed that the first half of 2011 saw a steady rise in hotel occupancy rates, with 63 percent of beds occupied nightly, up from 61 percent for the same period in 2010. Additionally, overall arrival numbers climbed 3.1 percent. Though visitor numbers and occupancy rates peaked in February, coinciding with Qatar hosting the Asian Football Cup, the drop off following the final whistle was negligible, according to the QTA.

The expected growth in tourist arrivals has prompted a flurry of building activity, with QTA data showing 77 new hotels and a further 42 hotel apartments under construction as of mid-2011. In total, it is

by Matt Ghazarian

TOURISM AIMS BEYOnD 2022

TheEDGE34

BALANCE ShEET

Janak Patwaril simplifies the complexities and the relationship between the entity at the top of corporation and the subsidiary, also known as the daughter company, by identifying various business models.

subsidiary business is a double edged sword: a good fit can create value and a bad one can destroy it.

Organisation Type: Choose the type of organisation that the group wants to be such as a business conglomerate, private equity or investment holding company. The headquarters could be operationally involved in its subsidiaries like a business conglomerate or it could be focused only on the strategic aspects of the subsidiaries to generate returns like a private equity firm. This choice would advise the way the entire group is structured and operated.

Strategic Planning: The organisation should develop a group strategy that defines the business model of the organisation, and the strategy it would follow to achieve the vision. The headquarters and the subsidiary should work together to develop the strategy. The strategic planning process should create alignment across the entire group.

Governance ModelDelegation of Authority: There should

be a defined Delegation of Authority (DoA) between the headquarters and the subsidiary. This DoA should address the need for

Organisations grow over a period of time either organically or inorganically with a resultant change in the structure of the

organisation. A common model prevalent across the world is the headquarters-subsidiary model where each unique business is hived off into a subsidiary while the headquarters or the parent oversees the portfolio of subsidiaries.

Along the way, the organisation evolves themes or strategies to run the subsidiaries. While some subsidiaries benefit from the parenting, others lose out. The headquarters-subsidiary relationship is a result of the portfolio strategy and the parenting intent of the parent company. To ensure the effectiveness of the headquarter-subsidiary performance and relationship, the organisation should address the following key areas:

business ModelVisioning: Conduct visioning exercises

to identify and agree on the strategic aspirations of the group (headquarters and the subsidiaries) and the nature of the businesses it pursues. Fit between the parent and its

hEADQUARTERS &suBsIDIAry relationshiPsDEMYSTIFYING THE COMPLEXITIES

independent and quick decision making rights to the subsidiary while ensuring that the headquarter interests are not compromised.

Subsidiary Boards: There should be adequate representation of the headquarters in the subsidiary boards. These members ought to be trained to develop a macro perspective on the subsidiary and align the subsidiary performance to achieve the overall group strategy

Performance Management: Develop a framework for business performance management for each subsidiary. Agree on the key measures and targets and the ways and means to achieve these. The headquarters should monitor and measure the subsidiary performance on this basis.

oPeratinG ModelCustomised Operating Model: The

parent should segment the subsidiary businesses on the basis of the respective business characteristics. Identify the critical success factors for each business segment and identify the areas where the parent could provide valuable support.

The parent company should develop an operating model that provides customised support to each business segment. For some businesses, the parent would be very hands on in the operations, while for some others it would play only an influencing role or an advisory role.

BALANCE ShEET

TheEDGE 37

Centralisation and Decentralisation Functions: Identify the functions that could be centralised at the headquarters and the ones that ought to remain with the subsidiaries. Conduct a study on the feasibility of setting up a shared services centre for the group. Functions like Human Resources, Information Technology, Finance, Administration, Procurement, etcetera, would have varying levels of centralisation and decentralisation depending upon the business segment in which the subsidiary falls. There should be a balance between standardisation and control with operational independence.

Integration Mechanism: If the headquarters imposes a high degree of integration through standardisation, formalisation, and mechanistic procedure, the working environment between headquarters and subsidiaries is very formal and procedural. This would be control oriented. On the other hand, if the headquarters applies a low degree of integration, based on interactions rather than bureaucratic procedures, the working environment between the headquarters and its subsidiary managers is more informal and flexible. This would be a coordination oriented mechanism. The headquarters and the subsidiaries relationship is a fine balance between control and coordination.

Roles and Responsibilities: Identify and address misaligned spans of authority and excess layers of management. The roles and responsibilities of the headquarters and the subsidiaries should be discussed and agreed, as there ought to be clear segregation of duties between the two.

Management Systems and Processes: The group would have to conduct a review of its management systems and processes. It is necessary that the headquarters have

the necessary information on the subsidiary businesses to make informed decisions. The flow of material and information between the subsidiary and the headquarters should be clear to avoid gaps and overlaps.

Parent-subsidiary ManaGersPeople Processes: Develop tailored

people processes such as recruitment, training, compensation, etcetera for each segment that balance business requirements with people needs; this will lead to strong performance from people and business.

Design Development Programmes: These should be aimed at creating the skills required to drive performance in a multi-business and international organisations. These programmes and systems must be flexible enough to adapt to geographic, cultural, and management style differences among subsidiaries. This would help the parent and subsidiary managers to develop the respect and empathy for each other.

Corporate Culture: The headquarters and subsidiaries should develop a culture that can cross companies and borders. They should identify and adhere to their values. They should respect and bring to advantage their diversity. The managers in the headquarters and the subsidiaries should build role clarity and reduce functional conflicts among them on the basis of the shared corporate culture and values.

Boundary Spanners: The headquarters needs to integrate the subsidiary strategy and operations into the parent strategy. At the same time, subsidiary managers need to have a certain level of autonomy to ensure that the strategy and operations is adapted to the local specifics. These two pressures force the subsidiary managers to take up the roles of ‘boundary spanners’. The capacity

of the organisation to adapt the subsidiary requirements partly depends on the boundary spanner capacity to find a compromise between the parent and the constraints of local environment at the subsidiary.

Pitfalls and success factorsInvest in businesses you know – As a parent you should not own a business that you do not understand well. Are you the best parent for the subsidiary business you own? Nurture and retain boundary spanners – The subsidiary managers who can manage the complexity and uncertainty in the internal and external environment are important for the organisation’s success – retain them.Cost reduction is not motivation reduction – Many cost reduction initiatives lead to reduction in motivation of the employees. The management at the parent and the subsidiary companies should ensure that the objectives of the exercise are clearly explained.Do not kill ideas before they are heard – Foster an environment of openness and support; encourage cross-fertilisation of ideas and implementation of best practices across the group.Do not create multiple layers of management and decision making – Organisations tend to create multiple review mechanisms, thus delaying decisions and implementation, hence it should avoid protracted decision making procedureShared Services – Not all services and functions are ready to be centralised and shared. Determine which services to be brought under the umbrella of shared services. Ensure that the shared services centre leads to increased efficiency rather than conflicts and bureaucracy.Constant Renewal – As the industry ecosystem changes, firms must be able to learn, develop, and adjust their core competencies in ways that respond quickly to external developments. Strategies and organisation designs that seem well suited for a particular stage of an industry’s life cycle may not translate into competitive advantage or success in another stage.

Identify the functions that could be centralised at the headquarters and the ones that ought to remain with the subsidiaries.

day 4: adeQuate health coverFestive overindulgence aside, take a careful look at your health

cover. Expatriates based in Qatar have to pay some medical costs, making it essential to relocate with worldwide medical insurance. Ensure you have the right levels of cover required as global health costs are rising and without a good quality private medical insurance your finances could take a real hit if you or your family ever needed treatment or surgery while abroad.

day 5: your willWhile it is something none of us likes to dwell on, it is important

to clearly set out who is to benefit from your property and possessions after your death. This will include how your assets are shared in order to provide for your dependants. This is particularly important if you have dependant children from a previous marriage. It also helps to ensure they do not pay more inheritance taxes than necessary.

day 6: a dePosit accountWith interest rates at record lows, it is important to ensure your

savings are working as hard as they can. Look at locking into a fixed rate to maximise returns. The longer you can afford to tie up your savings, the higher the rate of return you can expect to achieve.

pERSONAL fINANCE

day one: an overall visionThe first thing that you need to figure out is: what are your overall financial goals and aspirations? Perhaps you want to boost your pension or make some investments. Or buy that dream second home. Once you have determined your goals, you will be in a much better position to deal with the practicalities of turning your aspirations into reality.

day 2: education savinGs PlanExpatriates with kids need to draft out the costs and expenses of

tertiary education. Whereas you might not yet know in which country they will study, we all know that the days of free university education are well and truly over. You can now safely assume that the annual fees for university will be between QR35,000 to QR50,000 for tuition fees alone. Over four years this would be QR140,000 to QR200,000. Not a paltry amount by any means.

day 3: iMProved MortGaGe offerYou might think this is an area which looks after itself – after all,

you are most likely to have a house back home, successfully let out to help pay off the mortgage. But in these days of record low interest rates, is your current deal as efficient as it can be? Can you do better with a new loan, on new terms and conditions? If so, get negotiating.

THE 12-day

wEAlTH PlAnExpatriate or not, with the end of year holidays now over, there is no better time to diagnose the various aspects of your private wealth situation and aspirations and devise a financial plan that can set you up for 2012 and beyond. In the first of a new series on the subject, personal finance expert David Russell outlines 12 steps, a financial health checklist if you like, that you can use to realise the above.

uncorrelated asset classes, for example asset classes that do not move in the same direction at the same time. This way you have a measure of protection, should your investments take a downturn. Spend time thinking about what level of financial risk is tolerable for you. If it gives you sleepless nights regularly, it is obviously too high.

day 11: a retireMent incoMe PotFirstly, think about where you plan to retire and what level of

income you will need to fund your chosen lifestyle. As a rule of thumb, an expatriate’s retirement pot should be equivalent to 20 times the amount per annum you would like to live comfortably in retirement. Give some thought as to how tax efficient your pension pot is and that it is making the most of any legislation that helps to build up this vital nest egg. Consider expat friendly plans such as Qualifying Recognised Overseas Pension Schemes (QROPS). Expatriates, in particular, need careful pension provision advice and product guidance.

day 12: Good insurance cover.It is easy to underestimate levels of insurance you need. The first step

is to think about what you would like to protect against. For example, income protection insurance covers certain financial needs should an accident or long term illness stop you from working. However, the key insurance for most is life cover. The level of cover you opt for should not be a guesstimate – it should be calculated properly to ensure the financial future of your dependants is covered adequately. Also consider insurance policies that are specifically aimed at the expatriate market.

David Russell is the chief executive officer of Guardian Wealth Management LLC, Doha, Qatar.

pERSONAL fINANCE

39TheEDGE

eXPert financial advice : asK theedGeIf you have a specific question about any of the above aspects of personal finance or other related topics? Please email [email protected] and David Russell will do his best to answer you in a future issue.

You can now safely assume that the annual fees for university will be between QR35,000 to QR50,000 for tuition fees alone. Over four years this would be QR140,000 to QR200,000.

Investments should be spread across uncorrelated asset classes, for example asset classes that do not move in the same direction at the same time. This way you have a measure of protection should your investments take a downturn.

day 7: a ProPerty PlanAs an expatriate you are more likely to rent than buy, but it is

important not to overlook any property you have, including back home. Property can be put to work to provide an income, raise much-needed funds, as well as be a source of capital growth. And while it is a sound investment of most of the time, remember that property prices can also go down as well as up, so both outcomes need to be taken into consideration.

day 8: taX reviewConstantly changing tax regulations can confuse most of us, but

expatriates can really run into trouble if they do not receive the correct guidance on tax requirements. While you can enjoy a favourable tax regime as an expatriate in Qatar, do not overlook any tax requirements back in your home country. Also, take into account of any double tax or exchange of information agreements that apply to your savings, overseas property income and investment portfolios.

day 9: inflation-Proof savinGsRemember, inflation eats away at your savings. With inflation in

Qatar currently running at 2.2 percent, any deposit account paying less than this is simply eroding the value of your savings. As an expatriate it is important to take into account the currency you save in, as well as the currency you are paid or spend in. Contemplate looking at other asset classes offering a higher return than inflation, but ensure you are happy with the potentially higher level of risk.

day 10: a diversified PortfolioAccurate asset allocation is the route to financial success. Investors

now have a broad range of asset classes to choose between – from fixed income, equities, commodities, as well as alternative asset classes, such as wine and fine art. Money should be spread across

ECONOMIC BAROMETER

ECONOMIC BAROMETER

TheEDGE 41

the KhaleeJi CurrEnCyIN PURSUIT OF A DREAMThe single Khaleeji currency has been a long awaited dream of the Gulf Cooperation Council (GCC). Europe had a similar vision called the euro – and turned out be the region’s worst nightmare a decade later. Karim Nakhle gives an insight to the pros and cons if the Arab states were to implement a single monetary union, a proposition that has recently resurfaced.

In April 2009, Oman and the United Arab Emirates (UAE) decided against joining the monetary union, meanwhile Kuwait depegged its currency from the dollar, throwing the future of the

Gulf Cooperation Council (GCC) common currency seriously in doubt.

The International Monetary Fund (IMF) said in a statement recently “the costs of having a single currency in the Gulf without a higher degree of synchronisation in business cycles may outweigh the benefits. To make a union work, GCC states would need to trade more with each other and invest in each others’ economies”.

EURO mISTAkESThe single currency was thought to be

the ancestor of all economic reforms. It was the common denominator that should have made cross-border business easier, facilitated trade, encouraged mergers, acquisitions and takeovers among regional business leaders, allowing them to deliver the sort of regional business amalgamations that can compete with the multinationals, locally, regionally and internationally.

The benefits were: reduction of exchange rate risk, a lubricant for cross-border trade, speaking globally with one voice as a major currency, and attracting new members to strengthen the union. In principle, it all sounded so simple, or even too good to be true, and indeed it was too good to be true, because leaders, central banks, business

communities and economists alike where blinded by the success and long term potential of the currency, forgetting that success is all in the details.

No one can ignore the ongoing eurozone crisis, which is threatening the global economy with another meltdown, especially if they are considering entry into a new monetary union.

The GCC should learn from the eurozone what not to do in order to maintain a stable economic and political union. One lesson is to not compromise on economic criteria. The current criteria to enter a common GCC currency are quite similar to those set by the European currency regime in the 1990s. These criteria cover inflation rates, interest rates, central banks’ foreign exchange reserves, budget deficits and public debt. It is these exact criteria that are the subject of ongoing debates, in Europe, following the eurozone crisis, with requests from the French and German governments to strengthen these regulations, implement austerity measures, introduce tougher fiscal policies, and implement reforms.

The GCC should look at the latest measures, proposed during the last European Union Leaders’ Summit, and revamp the framework of its Khaleeji currency accordingly. The problems in Europe have strengthened some of the concerns that policymakers in the GCC region may have had in the past, highlighting the flows of the euro single currency model and requesting officials to put on hold the single currency project while studying thoroughly the full consequences of the debt crisis on their economies.

The economic growth in the Middle East and North Africa (MENA) region may accelerate to 5.1 percent next year as oil prices rise. As the home of two-thirds of the world’s proven carbon reserves, liquidity issues are not really at stake in the Arab oil states, but inflation is, therefore the GCC may need to withdraw economic stimulus.

FUNdAmENTAL dIFFERENCESAlthough both economic blocs, the EU-27

and the GCC, share the goals for integration, economic prosperity and monetary stability, their differences are also quite fundamental.

The Khaleeji currency comes against a backdrop of largely unfulfilled efforts towards further union.

Abdulrahman Al Attiyah, secretary general of the GCC, said in a statement that he expected Oman and the UAE would rejoin the single currency, but only after it had been launched. He also added that he did not see the monetary union being launched before 2015.

However, a peg to the US dollar would delay the monetary union between the other four countries of the GCC by a few years at least, since the union needs to establish monetary independence for member countries, all of which are pegged to the US dollar, except Kuwait.

Prior to that, the planned single currency is unlikely to become a key global reserve currency or reference currency for the region or for other Islamic countries. Furthermore, technical and policy convergence criteria have not been fully achieved, and a monetary policy framework, institutional arrangements and a common system of payments and settlements are yet to be put in place.

TheEDGE42

ECONOMIC BAROMETER

Europe is composed of nations with severe differences in relation to languages and economic power, nevertheless the euro was the culmination of two generations of evolving economic cooperation and integration that created a single market with free and ready flow of goods, capital and labour.

Although the GCC is already a strong union in relation to economic integration, liquid assets, visions and defence, with Arabic as the official language, and Islam as the state religion, the Khaleeji currency, on the other hand, comes against a backdrop of largely unfulfilled efforts towards further union. While a customs union was established in 2003, issues with borders and tariffs remain.

Consequently, the economic case of the GCC single currency is still strong and it is a much more natural market for a single currency than Europe. The economies are similar; they run on similar economic cycles. However, with so many other issues on the agenda, including the Arab Spring, the single currency was not a priority for policymakers in 2011.

bACk ON TRACkAll the six GCC states embarked on the

monetary union venture with enthusiasm and a positive outlook for the future. On the long run, this move would have been beneficial to the formation of cross-border companies with economies of scale. These can deliver a higher productivity, share know-how, increase incentives, avoid foreign exchange rates issues, consolidate accounts into one currency, and pay salaries in one currency, giving companies, and banks the time to focus on actual trading concerns.

A date for monetary union was set for 2010, and all six countries pegged their currencies to the United States (US) dollar

in order to help fulfil what economists call convergence criteria. The hope was that inflation, public debt and interest rates and current accounts could be brought into line, ensuring a smooth transition into the new currency. But this monetary union received a blow when the UAE announced that it was withdrawing in protest against placing the forerunner of the future joint central bank in Riyadh. Oman, also said it would not join the monetary union for the time being, citing internal circumstances.

However, more recently it seems the launch of the Gulf single currency is back on track. Saudi Arabia’s Central Bank governor Muhammad Al Jasser stated that: “The economic conditions in the Gulf are excellent for forming a monetary union but there will not be a specific date for the launch”.

A peg to the US dollar is considered the most likely option for the currency initially.

Crude oil exports still account for nearly 90 percent of total exports and the non oil sector is gradually picking up. Most of the Gulf’s international trade transactions, including imports, are therefore still in dollars. Gulf currencies are likely to appreciate in the event they float and depeg from the dollar, this is likely to discourage capital investment from both private and public sectors that generally prefer to make dollar-pegged investments. At a time when the euro and British pound are also experiencing some wear and tear, it is unlikely that the Gulf will have anything considerably safer to peg to. Furthermore, Kuwait’s dollar depeg to mainly curb inflation has not proven entirely worthwhile. The experience in Kuwait, where the currency is now managed against a trade weighted basket, shows that the dollar accounts for at least 65 percent of the currency basket and inflation remains a problem.

suPPort or oPPositionA recent survey conducted by Qatar University’s Research Institute attempted to fill that gap to know what support or opposition there was across five GCC countries. The survey found that the majority of the citizens in Qatar (85 percent), Saudi Arabia (83 percent), the UAE (84 percent) and Bahrain (82 percent) believed that their countries would benefit from being a member of the GCC single currency while Kuwaitis, on the other hand are less certain about such benefit as 49 percent of the Kuwaiti respondents said that their country would benefit from being a member of the single currency.Support for the project is highest among Qataris (90 percent), Saudis (72 percent), and Bahraini citizens (72 percent) while Emiratis (59 percent) and Kuwaitis (41 percent).As to the preferred name of the single currency, the neutral name – Khaleeji was previously chosen by the GCC Monetary council, nevertheless survey showed a preference for respondent’s home country currency name.

The GCC should learn from the eurozone what not to do in order to maintain a stable economic and political union.

IN ThE SpOTLIGhT

ThE fUTURE Of BIOfUELS

While crude oil is its main feedstock, it makes the aviation industry expensive. Countries around the world including the United Arab Emirates and Qatar are trying other alternatives to reduce the industry’s addiction to oil. Martin Rivers explains.

Sapphire Energy’s proposed Integrated Algal Biorefinery in San Diego in the United States (Image Sapphire Energy)

IN ThE SpOTLIGhT

45TheEDGE

talk to an airline executive anywhere in the world today, and you are virtually guaranteed to hear the same fundamental complaint. With Brent crude

prices hovering around US$110 (QR400) per barrel – up 350 percent in the space of two years – it is now all but impossible to make money from moving people and freight.

Of course airlines have several tricks up their sleeves. Hedging fuel contracts is one strategy, albeit a risky one if you misjudge the market. Cutting operational costs and hiking airfares are two others. Perhaps the most pragmatic approach is to fork out a few billion dollars for some next generation, fuel efficient jets. In the current financial climate, though, few have that option.

The inconvenient reality is that aviation is well and truly addicted to oil. In order to get a 650 tonne Airbus A380 off the ground, the high energy density required makes anything short of the black stuff a feeble substitute. And that means, in contrast to electric cars, battery powered planes will never make their commercial debut in our lifetimes.

With that bleak assessment, and with peak oil theorists predicting sky high crude prices, it is little wonder that airlines are desperate to mitigate their dependence on oil. To that end, man made biofuels are often touted as a solution – not only weaning the sector off fossil fuels, but also boosting its environmental credentials.

biofuel basicsWhen you delve into the science behind

biomass conversion and carbon fixation it is easy to lose sight of the bigger picture. So in layman’s terms, biofuel is quite simply fuel, which has been manufactured from living or recently living organisms.

The concept is less alien than it may at first seem, as fossil fuels are themselves by products of ancient life forms. Unlike oil or coal, however, which take millions of years to form naturally, biofuels can be produced from an array of substances in a very short timeframe. Bioethanol, for example, comes from fermenting sugar or starch crops, while biodiesel unlocks the energy stored in vegetable oils.

Harvesting arable crops like sugar cane and palm oil may therefore seem logical. But such production takes a heavy toll on agricultural resources, potentially driving up food prices. For this reason many environmentalists oppose so called first generation biofuels, reserving their support for more sustainable second generation feedstock.

Experimental, second generation sources include algae, non-food crops like jatropha, and even agricultural waste like wood chippings. As these substances do not compete with food supplies, harvesting them for fuel is seen as ecologically sustainable. But from a commercial perspective, it also presents far greater technical challenges. Looking beyond the different types of feedstock available, there is also the small matter of why biofuels are advantageous for

the environment. They do, after all, still emit carbon dioxide (CO2), they contribute to global warming.

Partner and aviation anaylist at Airinsight Addison Schonland explains that the pollution emitted by biofuels has to be seen through the prism of their life entire lifecycle. “The carbon impact is lower because the crops absorb CO2 while they grow,” he tells TheEDGE. “So while you are producing carbon exhaust out of the engine, you are also removing carbon from the atmosphere to create the fuel – the net effect is much lower than for fossil fuels.”

Factor in sulphur and nitrogen oxide reductions, and it is easy to see why proponents of biofuels claim they can cut greenhouse gas emissions by 60 percent. However, making precise calculations

Pots of halophytes, a salt-tolerant energy crop, are shown during agronomy testing in the United Arab Emirates. Boeing is working with researchers, governments and environmental groups around the world to develop sustainability standards for plant-derived aviation fuel. The effort is part of aviation’s strategy for lowering its carbon emissions.(Image Boeing)

The inconvenient reality is that aviation is well and truly addicted to oil.

IN ThE SpOTLIGhT

TheEDGE46

about net savings is a notoriously tricky business, as pollution caused by refining and transporting the fuels must also be taken into account. To that end, there is no shortage of industry bodies and research groups vying for everyone’s attention.

chasinG the draGonAs the world’s leading commercial

aircraft manufacturers, Boeing and Airbus have significant vested interests in promoting biofuel research. Modern jet aircraft are

already 70 percent more fuel efficient than their 1960s ancestors, but with oil prices raising in tandem, such improvements fail to cast off the shackles of fossil fuel dependency.

Mindful of that long term goal, Boeing this year created the Sustainable Biomass Consortium – a group dedicated to establishing best practices among the mishmash of industry bodies and global research programmes.

Darrin Morgan, director of sustainable biofuel strategy at Boeing, says that the

consortium has already made strides in hammering out guidance for biofuel producers. “Tremendous progress has been made in terms of the agronomy aspects of growing halophytes [salt-resistant plants] and increasing the yield potential, which is critical to the economics of using them to create jet fuel.”

Morgan adds that the manufacturer is working with Abu Dhabi’s government, and expects to announce a location for an algae research programme in early 2012. That comes alongside its jatropha based research initiative in Asia and its sugar cane programme in Brazil, underscoring the truly global nature of the emerging biofuel industry.

Hot on Boeing’s heels, Airbus has teamed up with Qatar Airways to create the Qatar Advanced Biofuel Platform, which is investigating how to best implement biofuel supply chains. This joint venture complements Airbus’ Biofuel Flightpath initiative – a roadmap for European airlines that targets two million tonnes of annual biofuel production by 2020.

Add to the jumble the Roundtable on Sustainable Biofuels – which styles itself as yet another consensus building body – and the myriad private initiatives fast become overwhelming.

“It is pretty much like the Wild West in terms of technology,” Schonland admits. “Everybody is trying something.” And yet this hodgepodge of scientific endeavours merely signifies how eager most of the world is to get behind the technology.

“Biofuels give new countries the chance to get into the energy supply chain,” Schonland explains. “In Europe they are using camelina. In other parts of the world they are growing algae. Jatropha can grow in the worst possible places, so even dry areas of the Middle East can produce the crop.”

Morgan agrees, adding that Boeing’s research work is less about “picking winners” than nurturing a diverse portfolio of feedstock. Only once the industry has developed multiple regional supply chains, he says, will the economics begin to pay off.

coMMercial viabilityAlaska Air’s recent biofuel trial on 75

flights illustrates the challenges facing this

Hot on Boeing’s heels, Airbus has teamed up with Qatar Airways to create the Qatar Advanced Biofuel Platform, which is investigating how to best implement biofuel supply chains.

Alaska Air’s recent biofuel trial paid US$476,000 (QR1.7 million) for 28,000 gallons of second generation used cooking oil, which it blended with 80 percent regular jet fuel.

ALTERNATIvE fUEL pIONEERSvirgin Atlantic – ran the world’s first biofuel test flight in February 2008, using a mixture of Brazilian babassu nuts and coconuts on a passenger-free Boeing 747.Continental Airlines – the first algae fuelled flight in January 2009 was a significant milestone, as algae produces up to 300 times more fuel per acre than convention crops. It also grows 20 times faster than most biofuels, but is difficult to process. Qatar Airways – the first commercial flight using synthetic gas to liquid fuel was completed in conjunction with Shell in October 2009. Though not a biofuel, natural gas derived jet fuel is cleaner burning and so emits less sulphur into the atmosphere. Lufthansa – launched the first commercial air link running on biofuels last July, deploying a mixture of jatropha, camelina and animal fats on its Hamburg to Frankfurt route.

nascent industry. The airline paid US$476,000 (QR1.7 million) for 28,000 gallons of second generation used cooking oil, which it blended with 80 percent regular jet fuel.

At US$17 (QR61) per gallon, the biofuel was six times costlier than its traditional counterpart. But the hefty bill was no surprise, and Alaska Air cared more about being a trailblazer than making profit. It therefore paid to source the oil from deep fryers in Texas, before having it processed in New Orleans, and then shipped off to Alaska. An efficient supply chain, this most certainly was not.

“Fuel for these flights is being produced in small ‘specialty’ batches,” Morgan notes. “The cost of conversion is not much different than petroleum based technology, meaning the cost of the feedstocks is the determining factor. There is still technological development…needed to drive down the cost of harvesting and processing these feedstocks. As feedstock availability increases, the overall economics of the fuel will improve.”

In other words, biofuels will only become price competitive once the industry’s logistical backbone has matured – scaling up in tandem with improved scientific know-how. “For the industry to get the critical mass it needs, someone has to be a big player and step up,” Schonland says, adding that one candidate stands out as the ideal catalyst.

“The US [United States] military needs to figure out ways to be much more efficient with their limited budget resources,” he notes, alluding to US$1 trillion (QR 3.64 trillion) of looming defence cuts. “I think the way to do that is to stabilise the price of fuel they are going to need. And one of the ways you gain stability is to become less dependent on fossil fuels.”

Schonland’s vision is far from a pipedream. In December, the US Navy placed the largest order in history for advanced biofuel – purchasing 425,000 gallons of used cooking oil and algae based feedstock. That followed numerous biofuel test flights by the Armed Forces on everything from the F-22 Raptor fighter jet to the unmanned MQ-8 reconnaissance helicopter.

Their commitment has already delivered cost reductions. The Navy’s per-gallon expenditure on biofuel has halved in just one

47TheEDGE

year, and with plans to use 50 percent fossil fuel alternatives by 2020, suppliers Dynamic Fuels and Solazyme can expect further economies of scale. Nonetheless, these orders are just a drop in the ocean compared to global aerospace fuel burn.

no silver bulletThe International Air Transport Association

(IATA) is the industry group with the boldest renewable target – spying six percent biofuel powered flights by 2020. Boeing more cautiously hopes for one percent by 2015, but whomever you listen to, it is clear that an immense amount of work lies ahead.

Last July’s endorsement of biofuels by technical standards group American Society for Testing and Materials was a major breakthrough, enabling airlines to test blends on commercial flights. Morgan says regulatory approval for passenger services underscores how “safety is at the epicentre” of the industry, with technical performance tests consistently rating biofuels “as good as or better than” fossil fuels.

But numerous obstacles remain. Mahendra Shah, an advisor to Qatar’s food security programme, recently warned that first generation biofuels will push 120 million people into food poverty by driving up commodity prices. Others worry that

The jatropha plant being used for making biofuel at the Eden Project in the United Kingdom.

biofuel plantations will cause widespread deforestation in countries such as Indonesia, destroying nature’s most effective CO2 absorbers.

Factor in ongoing scientific challenges, and it is no surprise that Greenpeace has called biofuel a “false solution for climate change”. The charity instead lobbies for higher aviation taxes and ceilings on emissions – a stance rejected by most of the industry.

“Every government in the world loves taxing fuels,” Schonland argues. “But if governments want to set emissions targets they need to use a carrot, not a stick.” With IATA already signed up to carbon neutral growth by 2020, he says offering tax credits on biofuels makes far more sense than punishing airlines for their grudging addiction to oil.

No one claims biofuels are a silver bullet for the industry’s 649 million tonne annual carbon footprint. However, alongside engine advancements and smarter flight management systems, they probably offer the best hope yet for a greener, more stable future.

IN ThE SpOTLIGhT

InnOVATIOn nation

THE InVEnTIVE DnA OF QATAr’s FuTurE

COvERSTORY

“New ideas lie at the heart of innovation, but ideas alone are not enough. Innovation requires translating ideas into value adding products and services…Bridging the gap between an idea and its beneficial result is the crucial step in innovation…Success will demand a greater ability to quickly close the gap,” – Soumitra Dutta, respected author and well-known global innovation expert.

In April 2011, it emerged that Qatar was ranked among the top 30 countries in the Global Innovation Index (GII) 2011 edition, issued by INSEAD, a leading international business school.

“Innovation is critical to driving growth in both developed and emerging economies, especially during a time when the global economy is still in a

state of recovery,’ said Dutta, who is also the Roland Berger professor of business and technology at INSEAD and an editor of the study. “The GII has evolved into a valuable benchmarking tool to encourage private and public dialogue including policy makers, business leaders and other stakeholders.”

Qatar worked hard and spent even harder to earn this mantle. The country, cashed up by its gas rich economy, has earmarked 2.8 percent of its gross domestic product (GDP) for innovation and scientific research and allocated QR1 billion for relevant innovative ventures in Qatar and abroad, encompassing everything from food security to satellite technology.

This is a remarkable commitment in uncertain times, but according to Dr Tidu Maini, chairman of innovation flagship the Qatar Science and Technology Park (QSTP), told a conference in Doha in November: “Innovation and research is in Qatar’s DNA”.

The GII findings seem to back Qatar’s ambitious strategy as outlined by Dr Maini, which is inextricably linked to the Qatar National Vision 2030, which seeks to move the country beyond its dependence on oil and gas to a ‘knowledge-based economy’.

Dr Naushad Forbes, chairman of the Innovation Council and director of Forbes Marshall said of the study and what it means for countries such as Qatar: “Today the whole world is talking about innovation in all forms starting from industry to government to society. After the recent economic slowdown the focus has shifted clearly towards the developing regions not only in terms of a booming potential market but also a hot spot for frugal innovations. Measuring this shift is important to know how we are doing, the GII is a starting point to do that and unquestionably in the right direction.”

It all sounds very impressive, but really, what does “innovation” actually mean? Does it mean faster Internet? A new car? A smaller mobile phone? The truth is, it means many things to many people.

“Innovation” is the word of the moment, incorporated into everything from mission statements to marketing material. but what does it mean to businesses and ultimately the customer? Rachel Morris deconstructs the buzz and looks at Qatar’s increasing innovation credentials.

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Qatar Science and Technology Park (QSTP) is hub of innovation in Qatar and indeed much of the Middle East.

Innovation. Innovator. Innovate. Whatever way you use it, “Innovation” is the watchword of the decade. According to a recent article in a respected American magazine The Atlantic, the word “innovation” was googled more than six billion times in 2011 alone.

Companies clamour to integrate it into their business plans and strategy and the word has become a tool in marketing and media campaigns for products, services and even government policy.

But when it boils down to it, very few end users or customers really know what it means or how it impacts on them on a daily basis.

innovation – it is MarKetable but is it banKable?

In fact, many confuse innovation with “invention”, the latter being the invention of the process or material rather than a new way to use it or apply it. Think of it like this. Apple did not invent the computer nor did the company invent the laptop. But it did create a new, streamlined experience with its desktop and later the MacBook, iPod and of course the iPad.

And South Korean company Samsung (interestingly Korea has topped the Global Innovation Index for the

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fashionable but rather just “doing what we already do better,” the former president explained, acknowledging that innovation does not just come from a laboratory, but from everyday experiences.

“Most innovation is based on doing something old better, faster or cheaper; if that is the case all government policy should be focused on encouraging a constant process of innovation,” Clinton said in Riyadh last year. “When we reduce the amount of time to open a company in say, Saudi Arabia, by fivefold, we are doing something we always did, just faster.”

Middle east styleAccording to some, innovation is the essence of

survival for the Arab world. One proponent of this theory is His Highness Sheikh Hamad bin Khalifah Al Thani, the Emir of Qatar who said in Istanbul in December last year that innovation was crucial to Muslims and the region in a time of turbulence.

“For us innovation is not only part of our values and culture, it is a vital necessity that is indispensable if we as Arabs or Muslims want to assume a place in designing and structuring a prosperous and developed human reality as we envisage,” HH Sheikh Hamad bin Khalifa Al Thani said.

“Innovation” is the watchword of the decade. According to a recent article in a respected American magazine The Atlantic, the word was googled more than six billion times in 2011 alone.

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Former US president Bill Clinton talks about innovation during a panel discussion on Global Challenges and Solutions 2022, on the last day of the Annual 5th Global Competitiveness Forum, held in Riyadh, Saudi Arabia in early 2011. (Fayez Nureldine/AFP/Getty Images)

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last several years) did not invent the television or the mobile phone, but the brand has become synonymous with innovation in the application of technology.

Both Samsung and Apple have proven that innovation or being seen to be ahead of the curve is profitable. But innovation is not about gadgets and making better coffee. In the brave new world, post global financial crisis, innovation seems to be about financial survival – doing something faster or making a process more convenient. Iin an interdependent world, innovation has to be built into the model and structure of operations,” former United States of America (US) president Bill Clinton told the Global Competitive Forum in Saudi Arabia in 2011.

In his keynote address to the gathering, Clinton spoke about innovation and competitiveness around the globe and pointed out that often the best innovation is not

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Qatar toPs arab countries in 2011 Global innovation indeX fraMeworKThe Global Innovation Index 2011 (GII) relies on two sub-indices, the Innovation Input Sub-Index and the Innovation Output Sub-Index, each built around pillars. Five input pillars capture elements of the national economy that enable innovative activities: (1) Institutions, (2) Human Capital and Research, (3) Infrastructure, (4) Market Sophistication, and (5) Business Sophistication. Two output pillars capture actual evidence of innovation outputs: (6) Scientific Outputs and (7) Creative Outputs. In 2011 Qatar appeared in the top 30 of this ranking for the first time at number 26, ahead of other Arab countries such as the United Arab Emirates (34), Jordan (41), Bahrain (46), Lebanon (49) and Kuwait (52). GCC neighbours Saudi Arabia and Oman placed 54th and 57 respectively. Topping the global innovation list were Switzerland, Sweden, Singapore, Hong Kong (China), Finland, Denmark, the US, Canada, Netherlands and United Kingdom.

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Dr Tidu Maini, chairman of innovation flagship the Qatar Science and Technology Park (QSTP), told a conference in Doha in November: “Innovation and research is in Qatar’s DNA”.

According to the Emir, competitiveness has led to the emergence of a knowledge industry that is based primarily on the mastery of transcontinental scientific and technological research.

“Hence,” the Emir continued, “it has become clear that he who has knowledge has the ability to influence people because he is controlling the industry of change more than that who has the power of money and wealth.

Knowledge has become the true power and we have to look at the map of the power of human influence in our contemporary world in order to verify this fact. The categorisation of scientific and research institutions has become one of the indicators that reveal the progress of any society,” the Emir said at the conference in December.

Many have already recognised the importance of nurturing innovation and new ways of thinking to the Arab world. Elsewhere in the Middle East (especially in Lebanon and Jordan), budding innovators are receiving cash injections and supports from other sources.

Intel Capital, the global technology giant’s Middle East and Turkey investment vehicle, has a US$50 million (QR150 million) fund which it has used to invest in technology innovators in the Middle East, specifically Jordan and the Levant. To date the fund has invested in Jeeran, (a web community platform), ShoofeeTV (a web based entertainment and Arab Satellite listings aggregator) and Nymgo (a UK and Lebanon based VoIP telephony service).

In Qatar the most tangible manifestation of this drive for innovation is the QSTP. Among the 46 ‘tenant’ companies are world leaders including Total, Chevron and Maersk Oil as well as local emerging talents in IT such as MEEZA, which is widely recognised as a leader in the region in cloud computing, for example.

These entities are working on such diverse projects including biofuels for jets, robotic surgery techniques and cord blood banking facilities. In Qatar, technology has been identified as one of the ways innovations can be integrated into the country’s vision for its future.

As part of its mission, QSTP supports around 25 purely technology based companies in Qatar, acting as an incubator for start-ups and other outfits with a new, big idea.

Last year, at the newly established information and communications technology conference, QITCOM, 15 budding entrepreneurs pitched their ‘big idea’ in the region’s first ‘Innovation Theatre’. Here they competed for the chance to receive mentoring and other resources as well as support from Qatar’s ICT regulatory authority ictQatar. The next Qitcom takes place in in Doha in March.

ictQatar director general Dr Hessa Al Jaber late last year revealed Qatar was establishing ‘free zone’ for technology entrepreneurs, especially those looking to develop more Arabic language digital content and ways people in the region, specifically those under 25-years-old, can access it.

“Qatar may play a pivotal role in creating and transferring digital content,” she said in her keynote speech. “We are looking forward to attracting more of the ICT leaders to Qatar through establishing an Information Free Zone, knowing that major research centere projects are currently underway in order to produce digital content for the internet and that we are confident of our country’s potential of being a main hub for ICT”.

While the future it seems, is in innovation, the last word may go to Bill Clinton, who makes a sage point about innovation for innovation’s sake.“The iPad is an incredible innovation,” he said in Riyadh, “but only 15 percent of the world’s population has the capabilities to use it…Truly impactful innovations touch the world’s population.”

BUSINESS INTERvIEW

Qatar’s ambitions to become a regional hub of information technology (IT), cloud computing and related innovation were given a boost in late 2011, when MEEZA was awarded, for the second consecutive year the ‘best Cloud Services’ accolade at the Data Centres Strategies Awards in Dubai, above a host of leading IT companies in the region. MEEZA chief executive officer, Rashid Al Naimi offered TheEDGE his exclusive insights into how MEEZA has become a leader in IT and is assisting companies large and small in finding affordable technology solutions.

ABOVE THE CLOUDEXClusIVE InsIGHTs FrOm mEEZA CEO rAsHID Al nAImI

MEEZA’s offerings include Managed IT Services, Data Centre Services and Cloud Services. Their world-class MEEZA Data Centres, known as M-VAULT, possess managed storage, network and security systems as well as disaster recovery capabilities. MEEZA has also established a centralised Command and Control Centre that monitors and optimises MEEZA services for clients.

of infrastructure. Common to all are e-mail, office productivity applications, storage and networking services. Bigger companies are more willing to acquire this infrastructure and customise it to their

needs. On the other hand, smaller businesses will consider infrastructure as a pure overhead. That said, cloud computing offers a number of use cases, which closely fit both large and small enterprises alike because of its elasticity and scalability traits.

Looking at the different industry verticals, certain characteristics reveal themselves. Education institutions today pride themselves on collaboration. This translates into opportunities for us to provide document and content collaboration, messaging and unified communication solutions.

In the medical field, you have massive data being generated per patient and securely storing this data becomes primary for established clients in this space. Given the industry confidentiality regulations, these services are typically provided on dedicated or shared infrastructure, managed by the provider, on long-term basis rather than on subscription basis. Managed disaster recovery services are also vital to this class of clients to ensure continued operations during force majeure conditions. The government

sector is rich with requirements, from security, to scalability in networks and data, as well as coordination and collaboration across councils and ministries. This naturally converts into a wealth of service opportunities, from remote and security monitoring, managed networks and enterprise software platform integration. Banking is an equally vast market segment and in a quick summary, it shares many of the common traits of the government and medical sectors.

Meeza is focused on developing Qatari talent but hires experienced, qualified people, who are capable of handling complex matters and deal with the most advanced technologies we have acquired.

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cloud computing is becoming vital in doing business in themodern world.Today, we are seeing international businesses and conglomerates embrace cloud computing at an unprecedented rate.

It gives multinational companies continuous access to their IT infrastructure regardless of their geographic location. Equally important for present business environments, are cash flows and balance sheets and cloud, naturally, converts capital expenditures into operational ones aiding the business cause.

small business enterprise (sMe) in particular is benefiting from increasingly affordable access to it services, such as those offered by Meeza.

Rather than acquiring the infrastructure in-house, and incurring the cost of maintaining it, cloud-packaged solutions lend themselves more to SME needs because of the pay-per-use models. MEEZA, a full-fledged solution provider, delivers against the IT requirements of their clients, from concept to installation and support. And in the case of cloud, the “solution” includes a flexible monthly subscription element. To that end, MEEZA offers a wide range of cloud services, including our world-class business e-mail messaging and collaboration, security and archival, as well as payroll; all of which help SMEs focus on their core business. Unique to MEEZA, is the fact that our internationally recognised cloud is built and hosted right here in Qatar, at our data centres with local support offered from our service centre.

Meeza is a complete it solutions provider, with offerings ranging from the data centre all the way through consulting services.

MEEZA follows a proven methodology for providing services against market and client demands, backed by a published service portfolio and a team of IT experts. We undergo market research to study what businesses require, before developing complete solutions. Only then can these service solutions be customised to industry verticals as required.

For this formula to succeed, we rely on our client sources, industry experts and a wide array of technology vendors, joined together to form the MEEZA innovation ecosystem. This innovation accelerates business growth, fuelling the creation of new opportunities for local and regional markets.

the common denominator in all businesses large and small as well as government institutions is that they all need it services.

Some companies may have a small number of employees but be very large per the scope of their operation, so staff size is not an indicator. However, they all need IT services irrespective

“Although sometimes labelled as an emerging market, Qatar is leapfrogging other markets in terms of technology penetration.”

MEEZA CEO Rashid Al Naimi tells TheEDGE that he has invested much in nurturing the company’s management team and staff in order to achieve their goal to be a leading company in the IT field, both in Qatar and beyond.

MEEZA understands the challenges that organisations face in aligning IT to their company vision and to long term business plans. Experienced MEEZA staff, regardless of their nationality, with knowledge of global IT best practices work with our clients to ensure they get the maximum value from their IT assets and can use IT as a key enabler for growth in their business.

As a Qatari company, we support the Qatar 2030 vision of developing knowledge-based society in Qatar. We are keen to take in local talent, and invest in them in order to achieve this objective. Currently, we have implemented an internal Qatari Mentorship Programme, whereby the Qatari employee has an opportunity to develop in his or her career. Furthermore, MEEZA is located in the Qatar Science and Technology Park (QSTP) and uses this base to collaborate with other Qatari technology companies and initiatives.

the it industry is cutthroat and the key to staying afloat and ahead is by constantly adopting innovation.

IT providers such as MEEZA have to be competitive with the rest of the world and not just the region, to maintain relevancy with our client base and to sustain our competitive edge. Specific to our market, Qatari end users and businesses are as advanced in their expectations and use of technology as some more mature economies around the world. Although sometimes labelled as an emerging market, Qatar is leapfrogging other markets in terms of technology penetration. This means that our services have to constantly evolve to meet these

growing needs and IT complexities. This self correcting pressure is constantly applied to our product portfolio, to ensure we hone in on client requirements while keeping an eye out for the next 12 to 24 months, for local and global trends. This is showcased in the long list of investments, which MEEZA has made from best-of-breed data centres, to a world class monitoring command centre, all built on international standards. Aided by our strong adherence to ITILv3, Continued Service Improvement is part of our service lifecycle and it ensures that MEEZA, from staff expertise to tools are constantly upgraded to keep up with the enhancement wave. Of course, innovation does not happen in a vacuum and we put serious effort into cultivating the market. MEEZA contributes to research and continually offers its views on the latest trends and innovations as is evidenced in our recent string of talks and seminars.

Qatar is a massive success story on the global stage and the 2030 vision has meant that knowledge and it are an integral part of this success story and in it becoming the ‘silicone valley’ of the region.

With the long list of major world events that the country is hosting in the coming years, a clear trend starts to emerge. An influx of businesses will want to move in and establish presence locally to service the growth demands.

Furthermore, given the gloomy financial conditions plaguing the entire world and Qatar economy’s defiance of that global trend, our market becomes a beacon of hope for innovation. Progressive

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In collaboration with companies in the Qatar Science and Technology Park, where the company is based, MEEZA has implemented an internal Qatari Mentorship Programme, whereby local employees are given the opportunity to further enhance their careers and knowledge in IT.

BUSINESS INTERvIEW

initiatives fostered by local regulators, free zones and QSTP-like environments start to attract innovation seeking investments and revenue safe havens. These conditions create the perfect storm, ideal for creating Silicon Valley-modelled ecosystems. It is only natural then that MEEZA’s aspirations and successes align with the country’s own steep upward curve.

cyber crime is a real concern to business across the globe. Meeza is well positioned to offer secure and highly available services to our clients.

Security starts with our Tier III facilities, which reside in highly secure settings. The technology stack deployed is then configured and protected with the best-in-class security products and practices. In addition, our Command and Control Centre watches over this entire estate, monitoring for a variety of inbound and outbound events. Yet technology alone is not enough. Highly skilled people and internationally certified practices are essential to ensure security offerings, identifying cyber threats. Escalation processes have to be clearly identified and integrated in the overall business processes of the company to ensure predictable handling of undesired events. As for clouds, they tend to boast stronger security affiliation than your average business would. Cloud infrastructure is encircled with multiple security perimeters at the network-level, application-level and the data-level. MEEZA’s homegrown cloud sets the standard for regionally attempted cloud deployments. We work with leading specialised vendors to ensure that the technology layers, their configuration and our internal processes all stand up to the challenge.

the near future is looking positive for the it market in Qatar.Bandwidth will no longer be a handicap for IT deployment in

Qatar and soon the region with the advent of fibre-to-the-home, Qatar National Broadband Network initiative and the coming online of the Gulf Bridge International (GBI) sea cables. These are all Qatari initiatives to add capacity and availability of bandwidth nationwide. While cost remains a concern, the market is displaying signs of opening up which will ensure adjust prices in a way that is bound to be favourable to the client. Similarly, the regulators are looking into ways that continue to pave the way for proliferation of IT in business circles and society at large. Therefore, these challenges are well known and are not unique to MEEZA. Certain market segments are slower to embrace outsourced IT and cloud workloads due to well-founded

reasons. However, continued market education is needed to ensure the gap between those businesses and providers like MEEZA shrinks overtime with the maturity of the business and the service solutions.

the fact that Meeza is based in Qatar has been key to its success and regional recognition.

Our multiple state-of-the-art, Tier III certified and green designed data centres are local, our Service Centre is local as are our experts. We speak our clients’ spoken languages and offer support in the same time zone, meaning a dispatch to a client’s site, whenever necessary, can be rendered in a flexible and timely manner. This local investment also means that our clients’ data is housed and processed locally, under the jurisdiction of the State of Qatar. Clients no longer have to worry about their intellectual property or top-clearance content being processed nor cloned offshore. Furthermore, quality is engrained in our corporate mission statement and is implemented in all of our work through Service Level Agreements (SLAs) and distinguished ITIL-based service design and delivery practices. All of these factors are positive attributes for MEEZA, setting it apart in the local and global markets. The recognition in the form of industry accolades we have received recently is a testament to this earned distinction.

Meeza’s strategic alliances’ roadmap includes a comprehensive list of channels, world class technology vendors and premier partners.

The year 2011 has been a busy one for MEEZA as we set out to build a comprehensive ecosystem to help us scale faster and tend to our client better. MEEZA, an ISO 9K/27K company, was the first and only company in Qatar to achieve Cisco’s Managed Services Channel Program partner status.

Furthermore, we have been working on a number of large-scale initiatives in 2011 and are proud to be working with Qatar Foundation (QF) on operating its Research and Education Network, which connects research entities, universities and medical centres together. This network is a foundational technology platform supporting the vision and growth of QF.

The industry has also recognised MEEZA’s achievements in 2011, and we are proud to have received awards such as the Best Cloud Services 2011 Awards for the second consecutive year, and being nominated among the top 85 global IT providers on the Datamation journal.

My personal goal for the company is to be a leader in the industry, starting with our home country and scaling beyond.

Such an achievement will help solidify Qatar’s place as an IT hub. Our main challenge is sustaining our leadership position as the market grows and evolves by providing our high quality, international standard service offerings we pride ourselves to provide. MEEZA’s vision statement boldly announces excellence in delivery as the key to retain market leadership. I take this responsibility very seriously and in my role as a CEO, I have invested in MEEZA’s experienced management team and staff to oversee the continued day to day execution of this vision.

“Innovation does not happen in a vacuum and MEEZA puts serious effort into cultivating the market.”

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BUSINESS INTERvIEW

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forum,” said Murat Karakaya, general director of BYGM. “We aim to hold the forum in various countries every two years as Istanbul is making an effort to unite Arabs and Turks.”

The series of demonstrations and protests since mid-December 2010 known as the Arab Spring or Arab Awakening – triggered a domino effect in the MENA region. The Arab Awakening voices echoed the people of

TheEDGE attended the first Turkish Arab Media Forum held recently in Istanbul, which united 200 journalists from the Arab World and Turkey. They gathered to discuss how to seek and realise mutual interests to enhance security and stability in the region and the world. Erika Widén reports.

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the first ever Turkish Arab Media Forum was held in Istanbul in late 2011. The event brought together 200 journalists from 22 countries from the Middle

East and North Africa (MENA), including Turkish officials from the media sector, organised and hosted by the prime minister’s directorate general of press and information

(BYGM). During the two day forum, topics discussed were under the theme ‘media, new opportunities and the possibilities in the axis of change and continuity’.

“It is an honour to hold this meeting, [to enforce] global peace and stability and to strengthen our ties. We want to establish and to share information and contributions, it took six months of work to achieve this media

Deputy prime minister of Turkey, Bülent Arınç addressing media organisations and journalists during the Turkish Arab Media Forum held recently in Istanbul.

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The forum gave the Arab nations the opportunity to be introduced to Turkish media channels, and the chance to meet their fellow Arab media representatives, which is a positive step for the region.

Turkey, which led to the ideal atmosphere for the media forum to take place.

Turkey is an important regional power, due to its geographic location at the crossroads of Europe and Asia, and is often recognised as the model for a secular democratic Muslim state. With a history dating back to the Roman Empire and Ottoman period, its ties within the region has made Istanbul successful in both the tourism and economic sectors.

According to the International Monetary Fund (IMF), Turkey is defined as an emerging market. The country is among the leading producers of agricultural products, textiles, motor vehicles, ships, transportation equipment, construction materials, consumer electronics and materials in the world, and it is often classified as a newly industrialised nation. The gross domestic product tripled to US$736 billion (QR2.6 trillion) in 2010 from US$231 billion (QR840 billion) in 2002.

In 2008 Qatar Investment Authority and Turkey Investment Support and Promotion Agency signed a memorandum of understanding to open a comprehensive cooperation between both nations, and in 2001 the countries signed an agreement on the legal framework of economic and military cooperation.

bROAdENINg COmmUNICATIONThe aim of the media forum was to

create a common platform and broaden communication channels by comprehensively exchanging and sharing information between media organisations and journalists to provide professional solidarity between Turkey and the Arab nations.

“We need to create a new forum, a new language, we need to find the truth, we need to have the responsibility to ask questions,” said Ibrahim Kalim, chief advisor to the prime minister of Turkey. “Arabs also feel proud of their history. We hope the Arab world will become democratic and we will support our Arab people.”

Deputy prime minister of Turkey, Bülent Arınç during the event’s opening said the forum will be a good beginning for the two worlds.

“We do not want to be an intermediary between East and West. We have to be very

cautious of being aware of destructive efforts of outer sources. The voice of millions echoes to Turkey and Turkey does not just want to be a role model concept [Muslim democratic secular model]. We want to share Turkey’s historical experience of know-how. No one can go against the flow of history.”

Moreover, Arınç stressed that regimes suppressing their people will not be tolerated. In Syria the current main problems are access to water and electricity and Turkey will not punish nor harm the Syrian people with a shortage of either of those two. Due to the current unrest and revolutionary environment calling for the resignation of President Bashar Al Assad and his regime, Turkey has stopped all trade and ties in the financial sector.

Fahmy Howeidy, a columnist of the Egyptian Esh Shuruk newspaper said the Arab media relied on foreign news agencies for international stories. Other journalists agreed and added that Turkish and Arab media organisations should follow each others’ news stories directly and not through third news agencies parties deriving from Britain, France or the United States, highlighting that currently a lot of Arabs are now utilising social media such as Twitter which may aid to fill the gap between the nations. In addition, Howeidy added that Turkey is a member of NATO and has a good relationship with Israel, which is unsettling for the Arabs. However since Israel attacked Ghaza, Turkey has taken another perspective and should have positive answer to the Arab world in regards to NATO. The Arab media needs to be more understanding and obtain a positive view and relations will develop positively in a parallel manner with Turkey, concluded Howeidy.

Al Jazeera’s executive board consultant Ahmad Al Sheikh during the forum expressed the sentiment that if Al Jazeera did not exist, the Arab spring may have come 15 years later. “People want freedom, especially the Muslims in the 20th century.”

Al Sheikh added that Al Jazeera and all other independent press organisations have to follow the right path, to support the democratic elements, to give the opportunity to the people to express themselves, and to give an identity as Muslims. Corruption is rife in the region and the media must uncover these dishonesties to the world, he added. Moreover, there are only one or two Arabic journalists residing in Turkey and the same applies to Turkish journalists in the Arab world, so Al Sheikh suggested sending more journalists for a period of six months to enhance direct communication.

SOCIAL mEdIA ISSUESSami Al Maitah an editor for the Jordanian

Al Rai newspaper strongly stressed that not all working as journalists and reporters in the Arab world are qualified, trained and ethical. He stressed that they must also audited in order to protect the profession.

In regards to social media, Ismet Berkan, executive editor of Radikal newspaper in Turkey said, “ The media profession is under a threat. Social media is a matter that needs a discussion; it is a new phenomenon – powerful in the Arab Spring. Why? If a country has pressure or barriers, people try new channels…of course those who use social media are not professionals, are not journalists.”

He gave an example of the recent earthquake in Turkey, when false information

was disseminated via social media causing national panic until formal news broadcasts rectified the actual facts.

During the platform under the discussion of social media, open views were shared of the pros and cons of the new marvel and the impact it has in the media industry.

Omani managing editor of Alwaha magazine said the new media such as Face-book, Twitter and so forth are providing the news much faster, as journalists must catch the source at hand and social media is a medium which may assist to deliver the news on the spot. “The Internet revolution started, [and] we said the world has turned into a village”, he concluded.

Al Sheikh also mentioned that while the new tools and gadgets do make things easier, but that television is not under threat.

The Turkish Arab Media Forum allowed journalists and media organisations from the MENA region to express their views on the effect the press are having on the current Arab Spring, and exchanged their

viewpoints on the various media channels available, in addition to highlighting how the Arab world and Turkey may enhance direct communication.

However, it is important to understand that the Arab world is not a single Arab identity; each Arab nation has its own identity with different views, cultures, traditions and ideologies. The forum gave the Arab nations the opportunity to be introduced to Turkish media channels, and the chance to meet their fellow Arab media representatives, which is a positive step for the region. The two day forum was indeed significant in particular for the Arab journalists, chief editors and officials representing their respective media sectors, since it helped them broaden direct communication with other Arab nations.

Due to the differences of each Arab nation, the forum’s success could arguably not have replicated in any Arab nation and other journalists and participants were grateful to Istanbul to have held such a professional and productive event.

Ahmad Al Sheikh, executive board consultant of Al Jazeera Television is given a plaque of appreciation by Bülent Arınç for his participation on the panel of discussion. [ In 2008, Lusail International Media Company, a subsidiary of Qatar Investment Authority bought 25 percent of Turkuvaz Radio and Television Journalism and Publication Company’s shares, being the maximum foreign investment allowed by the Turkish government in the media sector, according to a local newspaper.]

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final stateMent BYGM final statement of the two day-forum constituted of seven major points, stressing the outcome and agreement of the Turkish and Arab media open discussions.

i. The media must contribute to serve the people and their prosperity, establish principles of security and stability and forgiveness, respect multiculturalism, freedom of expression and respect for human rights.

ii. Freedom of press which is expressed in the Universal Declaration of Human Rights, the Helsinki Convention, the European Convention of Human Rights and other International ones in this concern.

iii. Support the legitimate demands of the people of the MENA region in their aim to establish principles of democracy and justice, to build a state of law, enhance human rights and public freedom.

iv. Cooperation between the Turkish and Arab media through the formation of joint media address will contribute in enhancing cooperation between both parties both regionally and globally.

v. Enhancing the mutual historic, cultural and civilisation ties and its great responsibility in rectifying the stereotypical image of each party.

vi. Joint media investment and the activation of the academic role in the media sector, formation of centres for media studies and organisation of media training workshops with the aim to exchange mutual experiences and expertise.

vii. Support the –Turkish Arab Media Forum – as a liaison authority between Turkish and Arab Media to enhance the mutual cooperation.

BUsIness management • small BUsIness knOw-hOw • legal InsIght • maRketIng and desIgn

also in this section:

kNOwLEdgE & ExpERTISE

• small business Know-how: Neal Mannas explains why an accounting system is an integral part of any business. (P.62).

• legal insight: Brenda Hill discusses the constitution and governance of Qatar and the fact that it is a hereditary Emirate. (P.64).

can firsMs Profit froM corPorate social resPonsibility? (P.60)

• Marketing and design: Roula Ayoub and TheEDGE look why some companies might be reluctant to advertise and when they do so, it will be only be in the traditional media channels – and outline reasons why the power of advertising is beneficial for your business. (P.66).

Ioannis Ioannou examines one of the most commonly questions asked in business today.

BUSINESS MANAGEMENT

One of the most asked questions in business today is whether there is a link between a company’s social responsibility and its profitability. Ioannis Ioannou’s research sheds new light on the subject.

pROfITING fROM CORpORATE SOCIAL RESpONSIBILITY

In recent years, the issues of ethics and morality in business have received a great deal of attention. This has often been of a negative sort – from Enron to Lehman brothers and beyond. I have always been interested in the positive

aspects of the intersection between the business world and society. Today, many companies are pursuing environmental and social initiatives, often popularly called “sustainability initiatives”. My colleague, George Serafeim of Harvard Business School, and I wondered if any or all such initiatives have a direct impact on the financial performance of firms. In other words, do such corporate social responsibility (CSR) initiatives create real economic value?

It has been difficult, in the past, to find any empirical evidence of a causal relationship. We thought that, if there is a link between CSR and profitability, we should be able to trace it by examining the way information is transferred to the capital markets. We thought of the influence that sell-side analysts’ recommendations and long-term growth forecasts have on expectations of value creation at the firm level. Evidence suggests that they are an important information intermediary, and there is a vast literature examining their role and impact on capital markets stock prices and trading volumes in particular. They essentially reflect equity holders’ expectations about the future of the company.

We obtained data from KLD, the major company producing CSR ratings and rankings in the United States, and then took a step back to better understand analysts and the potential reaction they could have to such ratings. Work in finance, for example, shows that analysts, on average, tend to have accurate forecasts. However, work from economic sociology found that when companies deviate from what they have traditionally done in their choice of strategy, in such a way that they seem to be moving away from their traditional industry categorisation, analysts tend to drop coverage and appear to have a lag in amending their evaluation models to reflect these changing firm behaviours. In the short run, this is reflected in relatively negative stock recommendation.

ThINkINg mORE pOSITIvELYSo, often there is some delay before analysts recognise that a change in a

company’s strategy might be a beneficial move. If a company is improving safety standards or moving into a different industry, for example, it is likely to take analysts a while to understand and incorporate such actions in their valuation models and therefore reflect the potential long-term benefits for the firm and the perceived level of value creation in their recommendations.

In our research, we found that until 1997 to 1998, if a company engaged in CSR initiatives, analysts tended to penalise it with more negative (‘sell’ or ‘strong sell’) recommendations. After 1998, we find that the trend reverses and becomes positive: it seems that analysts began to understand and think more positively about the implementation of CSR strategies.

In order to understand why that was the case, we searched for articles that mentioned the phrase ‘corporate social responsibility’ in the Factiva database, from 1990 to 2001 or later. If you graph the number of mentions over the years, you can see that during the 1990s they are flat; then, around 1998 and 1999, there is the beginning of exponential growth in CSR mentions in the popular press. This told us that a process of external legitimatisation of these strategies could be taking place, as well as some learning at the analyst level about what impact CSR strategies actually have on a firm’s real value creation potential. According to our econometric analysis,

this happened around the same time that the analysts’ attitudes towards CSR seem to have changed.

dEFINITE ImpLICATIONSAll of this matters for leaders of companies

committed to CSR. It is clear that firms must work closely with the investor community to enhance the interface between the firm, analysts and investors — letting them know exactly what they are trying to achieve through their CSR strategy. In other words, managers are well advised to educate and inform analysts about what the target is and why CSR stakeholders value maximisation as beneficial for the firm in the long run, over and above an exclusive focus on shareholder value maximisation. We found that the positive link between CSR and recommendations is stronger for more visible firms, suggesting that the CSR benefits are perceived as being greater for visible firms.

We also looked at analysts themselves. We examined the number of years an analyst has been following a specific firm, the idea being that if someone follows a firm for many years and reads all their reports, he or she is more likely to be able to understand the strategic implications of CSR.

The other measure we noted was the size of the analyst’s employer – larger brokerage houses may provide analysts with superior research resources or administrative support and are thus better positioned to understand CSR initiatives.

To sum up, managers should particularly focus on communicating the value of CSR strategies to the investment community. Highlighting not only short-term costs but also long-term benefits could mitigate difficulties that investors may face in understanding the value generated through such activities and might expedite the adjustment of their valuation models to these new CSR augmented business models. In other words, managers should be aware that not only what is communicated matters but also to whom it is communicated.

Ioannis Ioannou is the assistant professor of strategic and international management at London Business School.

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If there is a link between CSR and

profitability, we should be able to trace

it by examining the way information is

transferred to the capital markets

An accounting system is an important part of any business. It may assist you to identify cash flow issues, protect your assets, improve efficiency, keep track of income and expenses, and produce solid reports. Ultimately, a good accounting system produces data and reports can help decision makers make more informed decisions about their company and therefore run their companies more efficiently. Neal Mannas takes a closer look at what might be best for your business.

CHOOsInG An

SMALL BUSINESS kNOW-hOW

kNOw YOUR bUSINESSBefore choosing any accounting system, one must understand their own business processes. An accounting system must match most of your business processes and not vice versa. The easiest way to identify your business processes is to sketch out a dataflow diagram, which is a management information system (MIS) tool that identifies an organisation’s processes, storages, external entities and data flows. Once it is graphed out, identify the processes that seem to work well and those that need improvement. Once all processes that need improvement are identified create a new dataflow diagram based on how you would like your business processes to work in reality. In other words, you should have two dataflow diagrams, one indicating how your business processes work now and another dataflow diagram indicating how you would like your business processes to actually work. The latter should be with more efficient processes mapped out. This dataflow diagram should be the framework for choosing your ideal accounting system.

TYpES OF ACCOUNTINg SYSTEmSThe accounting software market is

commonly divided into three categories; these categories are systems for entry

level and or small businesses, medium sized businesses, and large businesses. The focus of this article is on small to medium sized businesses, although many large enterprise resources planning (ERP) software packages are beginning to focus on medium sized business solutions. It should also be noted that there is a lot of crossover in the small business and medium sized business categories. Most of the accounting software solutions can be installed directly to a computer or accessed remotely using a technique such as cloud computing.

Most of the accounting solutions for entry level or small businesses can be setup and installed without consultants, if someone in your company has basic accounting and finance knowledge, however, there are a number of consultants available if help is needed. Most entry level solutions cover basic functions such as the general ledger, accounts receivable, accounts payable, and inventory. Some entry level solutions also are beginning to introduce integrated features such as customer relationship management, supply chain management, and report wizards, which were traditionally the domain of mid-level accounting systems. If you feel an entry level accounting solution would fit your business needs, it is important that

the software is scalable and flexible enough to grow with your business. Even though entry level solutions cover basic accounting functions and are beginning to have enhanced features, many still do have limitations such as the database size is often limited, security is minimal, internal controls are limited, and often there is a limit on the number of users.

The mid-level accounting systems, often result in significant increases in costs with respect to setup costs, support, maintenance, and consultant fees but have enhanced functionality, larger databases, and are often modular based. Unlike entry level accounting systems, consultants are often needed to setup these systems. Therefore, it is often necessary to do a cost benefit analysis for your business because of the higher direct and indirect costs associated with a mid-level accounting solution. However, the benefits often include features such as more modules, multi-user capacity, security, scalability and the ability to process thousands of transactions.

INdIRECT ANd dIRECT COSTSWhen implementing an accounting system

you should be aware of the direct costs and indirect costs. The direct costs include software licenses and indirect costs include training

ACCOUNTING SYSTEM

audit tracking, events tracking, and segregation of duties. Since, there is a lot of crucial information on an accounting system, it is important that only those who need access to the information have the privilege and those that do not need access are denied the right.

SCALAbILITYAn accounting system should be able to

grow with your business. You need to ask questions such as, can a new module be purchased to support a new business line or product? Can a new version be purchased to create a larger database? If the software does not have new modules or cannot be upgraded, can the data easily be converted over to another software package? Basically, as your business grows the software should be able to grow with your business. Constantly changing accounting software is something that should be avoided because it takes a while to get a new accounting system to operate effectively.

bOTTOm LINETo summarise, what ultimately determines

your choice of accounting system is whether it fits your business. An accounting system should match your business processes, integrate with existing software, be customisable, scalable, cost effective, and come with good references and support.

When implementing an accounting system you should be aware of the direct costs and indirect costs.

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for end users, installation and customisation, programming and support. It is often the case that the indirect costs are between one and a half to two times higher than the direct costs.

mANUALS, hELp ANd SUppORT AgREEmENTS

It is important that the accounting software you choose is well supported. Support agreements vary widely depending on the software company, some software companies provide support for a certain time period, others for a particular version, and others often ask you to purchase a support agreement. One must have a detailed understanding of any support agreement because certain things are covered for a limited time or usage and it is critical that good support exists for end users, information technology, and technical support. Also, you should ensure that the company releases software patches on a regular basis to fix any bugs. After an accounting system is developed, the manuals and help are last to be created.

These documents are critical for new employees that need to learn and for training purposes. Because of the competitive nature of the software industry products are most likely released without fully integrated manuals and help.

EASE OF USEMost accounting software companies

promote their product as easy to use. Although, accounting software has become much easier to use, ease of use is often open to interpretation. All accounting software has their own set of unique features, which are used to try to distinguish themselves in the marketplace. However, when we refer to ease of use, the big question is what parts of the accounting system do you believe should be easy to use? Identify the features that you believe should be easy to use, whether it is tracking inventory, sales orders, or reports and then find the solutions that meet those key needs.

CUSTOmISATIONThere is a trade off between more

customisation and costs. More customisation often means increased costs. Customisation

could be as simple as turning some features on that are defaulted to off, creating customised reports, or completely reprogramming the code for a module to work with your business. However, one area that should allow you to customise is with regards to reports. As a business, your reports provide you with the information and data you need to make decisions, therefore, the accounting software you choose should allow you to create customised reports that are structured towards your business needs. If your business is quite unique and you find it difficult to match your business processes to any generic software packages, you may need to create your own accounting software or reprogramme the software in great detail to meet your needs or find a niche software package that is industry specific. For most small to medium sized businesses most of the time there are accounting software packages that usually match your needs.

ASk AROUNd The best recommendations on software

packages come from others. Ask other people in your industry, suppliers, customers, and educational institutions. Identify what others like and dislike about their accounting systems.

INTERNAL CONTROLSA good accounting system should have

strong internal controls, which should allow user restricted permissions to certain modules,

SMALL BUSINESS kNOW-hOW

LEGALINSIGhT

LEGALINSIGhT

Qatar’s COnsTITuTIOn AnD GOVErnAnCE

the State of Qatar is a hereditary Emirate. The Al Thani family has ruled in Qatar since the 19th Century. The current Emir, His Highness Sheikh Hamad bin Khalifa Al Thani, acceded to the throne in June

27, 1995. The Emir’s son, His Highness Sheikh Tamim bin Hamad Al Thani, was declared heir apparent in August 2003.

ThE CONSTITUTIONA provisional constitution was enacted in April

1970, and Qatar formally announced its independence on September 3, 1971.

A public referendum was held in April 29, 2003, to pass the first Permanent Constitution of Qatar. This Permanent Constitution came into force in June 2005 and replaced the provisional constitution, which had been in force since 1971.

The Permanent Constitution establishes guiding principles for the society. Examples include fostering and preserving education, the sciences, arts, cultural, and national heritage. It enshrines and guarantees private property (Article 27), freedoms such as freedom of the press (Article 48), assembly (Article 44), association (Article 45), privacy (Article 37), expression of opinion and scientific research (Article 47), and worship (Article 50). It enshrines equality and prohibits discrimination on grounds of sex, race, language, or religion (Article 35).

Part 4 of the Permanent Constitution also establishes and separates out the legislative, executive, and judicial functions of the state.

ThE EmIRThe Emir is the Head of State. He is also the

Commander-in-Chief of the armed forces, which he

commands with the assistance of the Defence Council (established byEmiri Resolution).

The Emir’s functions are set out in Article 67 of the Permanent Constitution and include the drawing up of the general policy of the state with the assistance of the Council of Ministers.

No law comes into force without the ratification of the Emir.

ThE LEgISLATUREThe Permanent Constitution establishes the Advisory Council, also referred to

as the Al-Shoura Council. This body assumes the legislative authority of the State of Qatar, approves the general policy of the government, the budget, and exercises control over the Executive (all in accordance with the rules set out in the Permanent Constitution).

The Advisory Council is made up of 45 individuals. Thirty are elected by public vote in a secret ballot, with electoral constituencies determined by the Emir pursuant to an Emiri decree. The Emir appoints the other 15 Council members. All members must be Qatari citizens of at least 30 years of age.

The Advisory Council sits for a term of four years (each session lasting for a year) although there are rules for replacing members where a seat becomes vacant, for example, by death or total disability, resignation, or removal from office. The Emir has the right to dissolve the Advisory Council by Emiri Decree.

The first municipal elections were held in March 1999 and Qatari citizens (men and women) over 18 years of age are able to vote. The first female Advisory Council member was elected in April 2003.

The Advisory Council reviews draft laws proposed by the Council of Ministers prior to their ratification by the Emir. There are five permanent committees: Finance and Economic Affairs, Public Services and Utilities, Legal and Legislative Affairs, Domestic and Foreign Affairs, and Cultural Affairs and Information.

Every member of the Advisory Council has the right to propose legislation. Such proposal is referred to the relevant committee for review and proposals are returned to the Advisory Council. If the Advisory Council accepts the committee proposals, then these are referred to the government for study and opinion and returned to the Advisory Council during the same or following session.

A draft law passed by the Advisory Council must be referred to the Emir for ratification before it becomes law. The Emir may decline to ratify the law and must, within three months of the referral, provide reasons for such refusal. If a two-thirds

by BRENDA HILL

Constitution provides that the court system shall be established by the law.

Jurisdiction in relation to civil (noncriminal) matters is divided between the civil and commercial courts (which are different depending on whether the dispute is regulated by Qatar Financial Centre (QFC) Laws or the laws of Qatar and the Shari’ah courts.

The civil courts are made up of (i) the Preliminary Courts (also known as the courts of first instance); (ii) the Appeals Court; and (iii) the Supreme Court (also known as the court of cassation). The QFC has its own court system.

The Shari’ah court limits itself to the adjudication of disputes between Muslims in relation to issues such as personal status including marriage, inheritance, and certain criminal proceedings, although it may include commercial matters (or non-Muslims) if the parties to the action voluntarily submit to its jurisdiction.

The right of litigation is inviolable, and court sessions are held in public unless the court decides that they should be held in camera in the interest of public order or morality.

A Permanent Constitution provides for Supreme Council to supervise the proper functioning of the courts.

The diagram below shows the Civil and Commercial Court structure:

AmENdINg ThE pERmANENT CONSTITUTION

Save for specific exceptions, the Emir, or one-third of the members of the Advisory Council, may apply to amend the Permanent Constitution. If a simple majority of the Advisory Council agree, the Permanent Constitution shall be considered article, by article, and a two-thirds majority may agree to amend the Permanent Constitution.

Note: All Qatari Laws (save for those issued by the Qatar Financial Centre (QFC) to regulate its own business) are issued in Arabic and there are no official translations, therefore for the purposes of drafting this article we have used our own translation and interpreted the same in the context of Qatari regulation and current market practice. This article should be used for information purposes only. It is not legal advice and should not be relied upon as such. If any reader requires legal advice, this should be obtained from an experienced lawyer, who can provide advice which is tailored to the relevant facts and circumstances. For any information in respect of legal issues, please contact Brenda Hill, DLA Piper Middle East LLP ([email protected]).

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65TheEDGE

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majority of the Advisory Council considers that the law should be passed notwithstanding the Emir’s rejection, the Emir must ratify the law, but he retains the power, in compelling circumstances, to suspend the implementation of such law in the higher interests of the country.

Each of the Council of Ministers is ultimately answerable to the Advisory Council for the operation of their ministries and may be removed from office by the Advisory Council if two-thirds of the Advisory Council expresses a vote of no confidence in the relevant Minister.

ExECUTIvE AUThORITYThe Executive authority is vested in the Emir,

although he is assisted by the Council of Ministers. All Council Ministers must be of original Qatari nationality. The formation of the Council of Ministers is by Emiri Order on a proposal by the Prime Minister.

The Council of Ministers must exercise a number of functions, including:1. Proposing laws to the Advisory Council for

consideration;2. Approving regulations and decisions of ministries

and other government organs;

Council of Ministers prepares and drafts laws/bills for submission to the Al-Shoura Council for discussion

Al-Shoura Council (ligslative authority) or Advisory Council will debate the bill or law proposed for ratification

Laws are published in the Official Gazette within a maximum of 2 weeks from the date of their signature and promulgation

Laws become in force one month after the date of their publication in the official Gazette, unless another date is specified in the particular law

Amendments

Bill ratified by the Emir

Finance & Economic Affairs Committee

Public Services and Activities Committee

Domestic and Foreign Affairs Committee

Legal & Legislative Affairs Committee

Cultural Affairs and Information Committee

COuRT OF CASSATIOn (SuPREME COuRT)• Hearts appeals on certain issues of law only

• Judges appointed on the recommendation by the Emir

COuRT OF APPEAlRight to hear appeals on points of law and facts

CIvIl COuRT OF FIRST InSTAnCE

lOWER BEnCH• Claims not exceeding QR

100,000 (US$ 30,000) determined by single judge

uPPER BEnCH• Claims Exceeding QR

100,000 (US$30,000) 5 Circuits of three judges each

3. Preparing draft financial budgets; and4. Drawing up general regulations for security and

public safety.The diagram below sets out the procedure for

enacting legislation in Qatar:

ThE jUdICIARYThe judicial authority is independent and is vested in

the different types and grades of court. The Permanent

Despite continual and rapid improvements in the sophistication and inclusion of advertising budgets in the annual finances of regional companies, some firms in the Middle East are still reluctant to commit to extensive advertising campaigns. Those who do, do so only in traditional media such as newspapers and radio avoiding magazines, television and online, which despite the explosion of the Internet is still a small (yet growing) component for regional advertising spend. Roula Ayoub and TheEDGE make a case for why advertising is beneficial for all companies.

MARkETING AND DESIGN

extensive research has of course been done on the topic. Advertising is not necessarily the oldest profession in the world, but certainly has decades of historical data and statistics since the industry’s glorious 1960s heyday, so well exemplified in the television series Mad Men.

To paraphrase more than one advertising executive the world over, “Millions of firms in all sectors, be it manufacturing, retail or services advertise every day. Because it works.”

Of course, they would say that. But whether it is in a niche or mass market, most of the time it is true – advertising works, but only if done well.

Like many frontier and emerging markets in the world, the Middle East region is developing fast and the proliferation of advertising, marketing and public relations companies here in recent years, as well as increasing media outlets themselves (who rely on this spend to survive) attest to the increased interest in the sector.

Finally, a “salience problem”is when the advertisement or commercial registered with those surveyed but they have forgotten any details or specifics.

ThE RIghT STUFFFixes to these ‘problems’ might seem simple, but like all

conundrums in life, basic solutions are not effective unless prudently implemented. Assuming adequate budget can be allocated to a

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MARkETING AND DESIGN

5 Good reasons to advertise

1. To Make ContactAdvertising establishes communication and introduces existing and new customers to new or existing products and services, improving new prospects up to five times before a campaign. Customer demographics are continually changing and those who may not have been in your target market (such as a formerly single but now married woman with children) may well now need to be exposed to your message.

2. To Build preferenceAccording to data from United States (US) company Simmonds Research, more than 80 percent of consumers in the US are more comfortable buying a known brand as it indicates approval. In a market where your competitors are most likely advertising, only continual brand-based advertising can maintain this market requirement for any company.

3. To Remind ConsumersWith a multitude of real store and online buying opportunities, consumers are delaying purchase and comparing prices, quality and service more than ever. Leading from point two, your brand needs to be “top of mind” when they finally do commit, and consistent advertising accomplishes this.

4. To promote positivityThis works on two levels. Apart from generally putting forth a successful aura of a brand doing well enough to afford advertising on a continual basis, advertising assists firms in counteracting negative publicity and communicating a positive message to the market, for example in the event of the death of a leading executive. Secondly, it also helps to maintain employee morale, as a company that has the faith to advertise shows staying power.

5. It Works (as the ad man said)Research shows time and time again that effective, well-placed advertising in traditional and electronic media contributes to an increase ROI, especially in tough economic times. Ignore quality advertising, it seems, at your company’s peril.

Yet some companies here, many of them without functioning marketing departments at all, remain reluctant to spend a little if anything of their annual budget on this tried and tested method of driving sales. Many prefer to focus on developing other components of their business.

And if they do advertise at all, it is arguably often short-term and retail-orientated (for example retailers looking for a quick spike in sales by printing discount vouchers in newspapers) and does not begin to broach the concept of “brand-building”.

When considering advertising, some might even refer to previous campaigns that have not worked, citing this as evidence of the failure of the medium and or concept. But the abovementioned research has shown, time and again, this is usually more the case of a badly creatively crafted and/or poorly executed advertising strategy, than any fatal flaw in marketing through print adverts or television commercials, for example.

TOTAL RECALLThe industry terminology for such a failed campaign is “poor (or

no) recall”. In other words, a survey of the intended audience that the advertising was aimed at will at best only vaguely remember it, or at worst, not at all. Which is effectively money thrown away for whomever is paying for the advertising in question and a complete waste of time for everyone else involved, such as creative directors, photographers or actors, despite being paid their fee.

As mentioned, the root cause of this is generally because the advertisement was poorly crafted, resulting in a weak communication of the message (which is generally lauding the virtues of a brand or particular product or service). The other is that it was not “placed” in the correct medium, say online for technology products aimed at twentysomethings, or around a daytime television soap opera if aimed at housewives, to give two broadly generalised examples.

The cause, of either or both of the above for the campaign’s failure, is then often immediately recognisable as a lack of professionalism, which in turn is usually caused by a lack of budget. It is also sometimes exacerbated by meddling from the companies themselves.

Either way, the company in question obviously either lacks the funds or commitment to spend what it takes to hire high calibre, experienced people skilled at creating good advertising and investing in placing them by good media planners in premium locations (prime time television, full page adverts in the right magazines) which can nullify even the most expertly crafted commercial. (Of course you do get bad adverts placed in good slots, but these will most likely still fail; see above point on lack of professionalism).

The failure of such an advertising campaign can be further broken down. If those in the target market cannot remember the ad, they either have not seen it at all – this is known as a “reach problem” – or they were exposed but they did not remember it, which is called a “mental reach problem”. Alternatively, they may recall having seen the commercial – “the one with the crazy stunt/cute kid”, etcetera – but did not recall the brand and/or product being advertised. These are known as a “branding problem” or a “message take-out problem” respectively.

campaign, a “reach problem” is usually rectified by conducting improved research into the media consumption habits of the market demographic, and better allocating advertising spend via a ‘media schedule’ to better guarantee a return on investment and reducing any further “wastage”.

If the “mental reach” is poor (this is most popularly determined by showing those surveyed colour photographs from a television commercial, for example), then those it was intended to reach, though they may have actually seen the ad, are considered to be “mentally absent”– (as opposed to those who did not see it, who were of course absent altogether).

Better media planning as well as improved creative direction are both potential solutions to this issue, which goes back once again to hiring those who know what they are doing to maximise effectiveness, as it does to solving poor “message take out”.

Poor brand recognition and a “salience problem” are tougher to deal with. Ask any seasoned marketer and they will tell you that

MARkETING AND DESIGN

TheEDGE68

while driving short-term sales of a particular product or service in an individual campaign is good, continual, long-term brand recognition (also known as being “top of mind”), is the real key to business advertising success.

This is where well-executed, consistent advertising, integrated across media comes in. Indeed, if before the fact enough time and investment is spent on analysing the above five main reasons for a potentially failed marketing campaign – either through actual analysis of the market or through other means – the true effectiveness of advertising itself as a marketing solution will shine through.

Extremely effective communication of brand and message is key. This is true in the modern age more than ever, with the proliferation of media formats, companies jostling for market share and the sheer wall of resultant ‘white noise’ that is increasingly numbing consumers to all but the cleverest, well-placed advertising.

After all, how will your audience ever know about your firm, product or service unless you tell them about it in the right place, in the right way, at the right time?

Roula Ayoub is the creative director at Firefly Communications and can be reached at [email protected]

Good advertising communicates a brand message in an original, memorable and effective visual manner, as these examples from Mercedes Benz motor vehicles, Vernel fabric softener and Coca-Cola attest.

Failure of a campaign is often more a case of bad creative and/or poorly executed strategy, than any fatal flaw in the concept of marketing through print advertisements or television commercials.

bUSINESS INSIghTInsIde the mInds OF leadIng BUsIness FIgURes

also in this section:• trends in asset ManaGeMent

Stefan Keitel, global chief investment officer of asset management and private banking for Credit Suisse, is constantly travelling the world researching and analysing

Power-Gen 2012 (P.70)In February 2012 Doha will serve host to the allied Power-Gen and WaterWorld conferences for the second time, which will cover comprehensively the energy and water sectors in the region and attract delegates and exhibitors from all over the world. TheEDGE interviewed Nigel Blackaby, Power-Gen event director, about the conference and what it hopes to achieve.

trends in various asset management classes, and revealed to TheEDGE four current strategic trends in this realm that serious investors might want to take note of. (P.73)

can you please give is a brief history of how Power-Gen Middle east was conceived, how it has evolved, and provide an outline of how it is, or aims to be, the premiere event of its kind in the Middle east?Like all Power-Gen events, Power-Gen Middle East does not have a permanent home, preferring to stage in different cities so as to reflect the regional nature of the event. In the 10 years of its existence Power-Gen Middle East has been held in Dubai, Abu Dhabi, Bahrain and Qatar. In each location we have been supported by the state power company and been granted royal or ministerial patronage. Over the years the event has grown in size and stature and is now recognised as the principle meeting place for those interested in the strategic management and technical aspects of the power generation business in the Gulf Cooperation Council (GCC) and wider Middle East region. The most recent

Power-Gen Middle East Conference in Doha in 2012 aims to cover industry issues

Scheduled for February 2102, Power-Gen Doha will be the 10th Power-Gen Middle East event and the second time it has been held in the Qatari capital, this time alongside the WaterWorld conference. Power-Gen is a conference and exhibition run by PennWell, which is positioning itself as the premiere event of its kind in the region. It is part of a family of Power-Gen events that take place annually all around the world, including events in USA, Europe, Asia and India. TheEDGE’s Miles Masterson spoke to event director Nigel Blackaby about Power-Gen and what it hopes to achieve.

Energy Sector

area of growth has been in the area of water and wastewater management, where a separate conference stream has now been developed into a fully-fledged event to sit alongside Power-Gen Middle East in the form of WaterWorld Middle East. Over the decade, Power-Gen Middle East has been able to chart the highly significant changes and growth that has occurred in the power sector in the Middle East and North Africa (MENA) region and in particular, has offered a forum for debate on the privatisation process that has transformed the electricity landscape.

Given the formidable energy resources of the region, where does Power-Gen Middle east fit into the greater ‘family’ of Power-Gen events held around the world? how might be the same or differ from the other events, and will similar or even the same attendees from those events also attend?

All Power-Gen events share a number of features, for example the combination of a conference and exhibition, the involvement of an advisory board of industry experts to plan the conference, a commitment to delivering quality and impartial content and the creation of a valuable networking environment. Power-Gen Middle East has all these features, but it is unique however through the inclusion of desalination and other water topics as this is

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an aspect of the industry that closely relates to power generation in this particular region. Since many technology providers and consultancy firms operate globally, these companies will be represented, either as attendees, speakers or exhibitors, at most, if not all, Power-Gen events. It is one of the defining features of attending Power-Gen Middle East that you are likely to meet up with fellow industry professionals from all around the world, as well as those from the local markets.

on that note, what kind and calibre of delegates and exhibitors do you expect to attend the event (whether from private, academic and state institutions), and can you reveal who are the most prominent among those confirmed for doha in 2012?

Because Power-Gen Middle East offers both a strategic and technical stream, it tends to attract quite a wide range of attendees from government officials, chief executive officer-level of utilities and independent power producers to power station operation managers and maintenance specialists. Given the unique accumulation of expertise and technology on show, power industry executives will attend Power-Gen Middle East, seeing it as a very efficient way to meet with a number of potential or existing supplies in one place over a couple of days. For the event this February, there will be speakers from many of the major original equipment manufacturers such as GE Energy, Siemens, Alstom, ABB and Wartsila, all of whom have technology options designed to meet the particular challenges of the Middle East region. For those interested in the insights of the major players in the region, speakers from Kahramaa and Qatar Electricity and Water Company (QEWC) from Qatar and Bahrain’s Electricity and Water Authority among others, will define their strategic planning and direction and identify the key issues that their businesses are facing. In a number of sessions, these leaders will engage with international industry experts within special panel discussions, which will address current trends and challenges.

this is the second time that doha has been chosen for the event. what do you think the advantage of hosting event in doha is given Qatar’s large gas and notable oil reserves, as well the country’s current electricity surplus?

Staging Power-Gen Middle East in Qatar has many advantages, not least of which is the country’s growing reputation as a world

“over the past decade, Power-Gen Middle east has been able to chart the highly significant changes and growth that has occurred in the power sector in the Mena region.”energy hub. Few people can be unaware of how Qatar’s massive gas reserves have helped fuel its ambition to become a player on the world stage. Doha has seen huge expansion in infrastructure and is now one of the world’s most modern cities, boasting top-class hotels and now a most impressive convention centre that will host Power-Gen Middle East and WaterWorld Middle East in 2012. The Qatar National Convention Centre has just successfully hosted the World Petroleum Congress and now Power-Gen Middle East delegates get a chance to experience this amazing venue. All this development, in particular from the oil and gas and aluminium industries, has created significant additional demand for electricity generation, transmission and distribution. Qatar has successfully planned for this, developing new independent power producers (IPPs) and impendent water and power producers such as those at Ras Laffan and Mesaieed, which currently leaves the country in the luxurious position of having a power surplus. Qatar’s installed capacity is currently about 7900 megawatts (MW), giving it a reserve margin of 36 percent. It has created the possibility for Qatar to export some of this surplus to its neighbours through the newly-developed GCC grid. New power projects are in prospect as Qatar gears up to host the 2022 World Cup and a new 2000 MW gas fired plant, known as Facility D, is expected to be tendered in 2011 and be commissioned by 2015. Qatar’s success in managing its power and water demand through accurate forecasting and long-term planning makes it a good case study within the region. QEWC is also now looking to develop projects elsewhere in the Middle East and has expressed interest in projects in Syria, Oman and Dubai.

obviously this surplus as well as the need by other Gcc and Mena region countries for additional power generation and the abovementioned projects will form part of the ‘country spotlights’ component of the conference. besides Qatar, what other countries in the region do you think will feature prominently in this discussion?

During the course of the conference there will be discussion about the power sectors in most of the countries in the region but due to its size, Saudi Arabia will inevitably be well featured. Saudi has to build a lot of new capacity to support its new industrial cities as well as the rising demand from its growing population and it is interesting to see how pressure on oil and gas supplies has created renewed interest in alternative power generation sources such as nuclear power and renewable energy in the Kingdom. The United Arab Emirates (UAE) is another country that will come under the spotlight with Abu Dhabi’s plans for a nuclear power plant and several renewable projects being developed. This year, we are hoping to have a representative from Iraq’s Ministry of Electricity attend Power-Gen Middle East to update delegates about their ongoing struggle to rebuild a power infrastructure and outline how the international power community can participate in this.

though much of the power industry in the Middle east is dominated by state and quasi-state funded entities, both the need for private investment and the iPP market are topics have been highlighted and set for discussion at the conference. what do you think will be the specific subjects in this area discussed at the event and what do you think or indeed hope the outcomes or results of these discussions might entail?

While the business of regulating the power industry and setting tariffs is very much the responsibility of central government in GCC countries, virtually all have chosen to privatise or partly privatise the sector, in order to draw in outside investment and to achieve efficiencies in operation. Most recently, both Kuwait and Dubai have moved in this direction and so the privatisation trend has continued. However, the market conditions are continually changing and those involved will want to discuss and exchange views about those changes in order to best position themselves. Recent significant trends include the tougher environment for raising finance for projects, the evolving balance of power between engineering, procurement and

finally, in terms of power generation as a business, discussions such as ‘Post-crisis trends in finance, risk and investment’ and ‘the changing face of the Middle east Power and water Project Market’, seem most pertinent. what do you think will be talked about most at these discussions and what do you think the future holds for the business and profit aspects of the power and water sectors in the region in the near future?

There will be some big questions to be answered about finance and the state of the power market in the region. Finance for big power private power and water projects has always been an issue, but since the credit crisis it has been harder to raise money and projects are being more closely examined. A few years ago it would have been unthinkable for anyone to question Dubai’s creditworthiness, but it is a measure of the change that has occurred that this is now an issue. But the business fundamentals in the region remain solid: long-term growth in demand, a proven IPP model, fuel availability, and regulatory certainty and, as such, the GCC looks likely to remain an attractive place for power project development. However, the Arab Spring has injected a new uncertainty that is bound to resonate among those planning commitments in the region. In addition, other parts of the world are also experiencing fast growth and tempting developers and equipment suppliers away. We all know about China and India but elsewhere in Asia economic growth is leading to increased power requirements plus Russia and Africa cannot be dismissed either as they too are enjoying fast growth. While the political and economic landscape affecting the power and water sectors is ever changing, so too does the technology that is available to the industry. Power-Gen Middle East speakers and delegates will be debating these changes and showcasing the technology that will be employed in the cleaner and greener power plants that will be a feature of the electricity industry in the region in the coming years.

construction contractors and developers, the growing influence of developers and suppliers from Asia and the ongoing pressure caused by artificially low tariffs for power. A panel discussion, which will debate the extent to which the world financial crisis has changed the landscape for investing in major infrastructure projects, will be a highlight of the conference. In another session, leading researcher from IHS Cera, Leila Benali, will join speakers from India and the UAE in looking at the emerging trends in the IPP market. All these strategic sessions are designed leave delegates with a better understanding of the influences on current market conditions and put them in a better position to develop their own business interests.

leading on from this, the subject of ‘Project issues – encouraging successes and avoiding Pitfalls’ also bears scrutiny. what successes do you think will be held up as examples, and what pitfalls in energy project developments do you feel are those that will be examined the most closely?

Power projects in this part of the world are usually very large and complex. With private investment at stake, it is particularly vital that mistakes are not made that could make the project unviable in some way. The ‘Project Issues’ session will present some case studies that will show how successful projects have been managed and how challenges were overcome. The planning of Kuwait’s power needs as it relates to the Sabiya power plant will be one example shared with delegates with the other being the Mesaieed power plant in Qatar. The session will also look at the legal ramifications in the case of delays and disruption to a project, where damages can arise, for example where a fuel gas take or pay agreement is in place.

in your remarks at the press conference in doha in october you also mentioned that it is often not enough to focus just on fossil fuel power generation but also renewable energy. again, what do you think will be the specific subjects discussed at the event in this area and what do you think or indeed hope the outcomes or results of these discussions might entail?

Fossil fuels will remain the mainstay of power generation in the Middle East for the foreseeable future but the landscape is changing unmistakably, meaning that renewable energy alternatives will have an important role to play alongside conventional power production. Power derived from solar energy has huge potential in

the region. Pilot projects are already underway that could lead to exciting development such as the Desertec initiative, the world’s most ambitious solar project, that aims to transform the world’s deserts into powerhouses utilising solar energy. There is a huge appetite for solid information about renewable energy, which Power-Gen Middle East will help provide not only in its strategic sessions, that also addresses other environmentally beneficial approaches, but also in the technical session, which contains five papers on sustainable power generation solutions.

Moving logically from that, the subject of nuclear energy is bound to come up and is indeed covered in the discussion ‘rationalising fukushima…how influential do you think the Japanese situation has been on thinking regarding atomic power in the Middle east and what effect might it have had on rethinking nuclear energy and its future in the region?

Well, I mentioned in an earlier answer that the UAE was pressing ahead with a major nuclear power project. This will eventually have an installed capacity of 5600 MW. An agreement has been signed with Kepco from South Korea to build four units at a cost of US$20 billion (QR73 billion). Add to this, the recent announcement from Saudi Arabia that is was moving ahead with a civil nuclear programme and similar noises from Egypt and some other countries in the region and you could be forgiven for thinking that the tragic events in Japan involved the catastrophic failure of a number of nuclear power units, have had no influence on the prospects for nuclear in the Middle East. Although it is not quite a simple as that, there are certainly some factors in the region, such as the nature of governments in the GCC, the role of Iran and the need to protect fossil fuel assets, that play a role in policymaking when it comes to nuclear. I am very much looking forward to hearing the views that will be expressed in this session, as it is a subject that polarises opinions and those lined up to speak will express those differing viewpoints.

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“fossil fuels will remain the mainstay of power generation in the Middle east for the foreseeable future but the landscape is changing unmistakably, meaning that renewable energy alternatives will have an important role.”

with the inter-connectedness of the global investment community and so much travelling, does the financial information you glean in one place helps you in the next?Of course. When you build a global asset allocation strategy, you can’t rely on an analyst sitting in a European city to tell you everything you need to know about the Brazilian market or the Chinese market, for example. You have to be on the ground talking to people, corporate owners, members of wealthy families, institutional clients, and policy and decision makers. Only then can you get the information necessary for establishing

the current valuation levels, these assets are more value embedded compared to the whole nominal asset space, for example, traditional government bonds. So, investors who are able to deal with volatility, which we expect to continue beyond 2012, will do better by investing in portfolios that are more focused on real assets. Furthermore, from a diversification point of view, they of course should add some nominal types of asset classes as well.

is there a current trend towards real assets?It depends. When you look at the

institutional space, for example, insurance companies, pension funds and endowments, you can see that the majority of institutional clients still have the majority of their asset allocation dedicated to the nominal asset space; they are still heavily invested in traditional government bonds and also still have a pretty high cash quota, very much driven by a stretched risk budget. The same is even more apparent on the private client side, in these cases driven by the loss of faith. Given the fact that investors experienced major crises over the last decade, such as the crisis between 2000 and 2002 with the burst of the technology bubble; the first financial crisis in 2008 to 2009; the eurozone crisis in 2010 caused by the Greek debt default and the current eurozone crisis, clients have become quite cautious regarding their investment strategy and asset allocation. Therefore, alternative investments and equities still comprise a minor portion of client portfolios with moderately increasing portions in the institutional space but comparably low levels on the private client side. I also want to be very clear that while focusing on cash or traditional government bonds that have performed well may have been not too bad in 2011, at the end of the day investors cannot just limit risks. They

an appropriate asset allocation. Otherwise, you are simply relying on secondary input.

what are the most interesting asset classes in the current global economy?

There have been visible setbacks in the risky asset space, especially given the volatile markets in 2008 to 2009 and summer 2011. Real assets, in this kind of market cycle, represent quite healthy investments for long-term investors. When I talk about real assets or risky assets, I mean equities, commodities, infrastructure, real estate, etcetera. We are convinced that with

As the global chief investment officer of asset management and private banking for Credit Suisse, Stefan Keitel is highly attuned to investment trends worldwide. Constantly travelling, Keitel is in charge of various global investment committees, as well as his company’s asset allocation committee, deals with 52 separate asset classes and also runs the portfolio management business at Credit Suisse. He recently sat down in Doha with TheEDGE’s Miles Masterson to discuss the latest trends and opportunities in the asset management sector.

Asset Management

Leading international banking and investment expert shares asset management trends

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BUSINESSINSIGhT

“you can’t rely on an analyst sitting in a european city to tell you everything you need to know about the brazilian market or the chinese market, for example. you have to be on the ground talking to people. ”

“across the board, traditional bond yields are at a very low level. as a consequence, volatile equity prices as well as unattractive fixed income options are really underscoring the strong need for alternative investments.”

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have to aim for acceptable returns because insurance firms, pension companies, endowments and ultra-high-net worth private clients also need yield and cash flow. So, from a long-term perspective, investors have to shift more assets from the nominal space to the more risky and more real asset space. They need to go for a healthier asset allocation strategy or framework as a whole in order to optimise cash flow. We are clearly expecting that portfolio theory – getting a risk premium for investing in risky, real assets – will experience a comeback.

would this additional cash flow be for further investment?

Take insurance companies; they have to deliver a guaranteed return. Take pension firms; they have to deliver pensions. Take endowments; they have to deliver cash flow for endowment purposes. And, ultra-high-net worth individuals need a three or four percent yield every year to fund their living standards and ensure capital preservation. They don’t want to use their capital for their lifestyle, they want to use money out of their returns. So altogether, there is a strong need for a healthier asset allocation and balanced strategy between nominal and more riskless assets and real and more risky assets. We think that the trend now, after the setback of the summer of 2011, is to move partially out of nominal assets towards real assets.

but volatility remains an issue?Yes. As I said, the markets will likely remain

pretty volatile because we have so many structural problems and imbalances. We also don’t expect a long-lasting equity bull market like the one we saw in the boom period between 1982 and 2000. The markets will likely stay range bound and volatile, but given the valuation component there may be an increased uptrend in prices for equities, in particular. I think we can also divide this into two parts: the strategic part and the tactical part. When we talk about the strategic part, one of the main trends for the next years most probably will be on real assets, which I have just referred to, emerging markets as well as alternative investments, broad-based as hedge funds, commodities, gold and real estate. But, product selection is key. Hedge funds have generally not done well over the last three years. This has created a problem regarding perception, but the industry is trying to fix it and has a learning curve. Beyond this, alternative investments constitute more than hedge funds. Here we also are talking about the whole illiquid side: private equity, venture

capital, infrastructure, timber and so on. This is important to investors who are able to deal with illiquidity, and may be willing to take an illiquidity premium, which I also think is good if you can afford to do so. The aforementioned liquid assets are feasible to more or less every client type and perfectly make sense in a fuller context. So, pretty consistent to our view, equities will stay volatile and fixed income market will get more and more unattractive.

why is that?Across the board, government yields in

the traditional space are at a very low level. For example, we are seeing rates of about two percent for the German Bundes, 0.85 percent for the Swiss and two percent for United States treasuries. If we are partially correct with our overall scenario regarding normalisation and de-escalation, then bond yields at these levels are not sustainable. So, volatile equity prices as well as unattractive fixed income options, are really underpinning the strong need for alternative investments broadly diversified.

what other trends are you picking up on in this space?

We see four strategic trends. From a valuation point of view and given our inflation outlook, there is an underpinning of real assets in general. We see a strong need for alternative investments, given volatile equity markets and unattractive fixed income markets. Thirdly, emerging markets are the place to be for the long term, equities, bonds and in particular, currencies. However, there are some market phases where you clearly have to be underweight in emerging markets. For example, over the last year, inflation pressure

has emerged and together with economic overheating and a collapse in risk appetite caused capital flows to turn around. This makes it a very poor time to be invested in emerging markets, however, it does open the door to strategic investment possibilities. The last trend is regarding currency risk. There is a strong need to manage currency risks because all of the big leading currencies, including the US dollar, the British pound and the euro, are under tremendous pressure right now and full structural weakness.

there is a lot of buzz around emerging markets of course, particularly the brics countries?

Emerging markets are the engines for global growth. From a macroeconomic perspective, they will likely do better than the traditional markets. However, interference between both emerging and developed markets and the fact that equity markets are not only underpinned by macroeconomic development, should be considered. In the past, you could easily observe phases where equities did comparably well despite the rather weak macroeconomic picture. That’s the proof for the thesis, equity markets are not only driven by macroeconomic cycle, but they are also driven by interest rate cycles and by valuations. When you bring all of these points together, you can say that if the valuation components are strong and the interest rate cycle is good, there can be a positive impact on real assets generally and the equity markets in particular without having strong macroeconomic support. All in all, if you look at the interest rate cycle and valuations, the equity markets should do better in 2012, compared to fixed income markets. That said, equities will remain volatile.

also in this section:

TRAvEL & LIFESTYLE

Muscat business travel insider (P.75)TheEDGE gives travel tips to Muscat’s cosmopolitan city, known as the gateway between the East and West since the first century.

• Kiteboarding in Qatar: A great sport for Qatar’s mild winter weather and its breathtaking beaches (P.77).

• style mysteries…solved: Struggling with sartorial mysteries? TheEDGE’s fashion guru finds the answers for you (P.78).

• 10 things: 10 most powerful women according to Forbes and Fortune magazines (P.80).

TRAvEL

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GETTInG THERE:Qatar Airways (www.qatarairways.com) flies to Muscat from Doha up to five times daily. Economy fares begin at QR1680 for a return ticket in mid-January. Business fares start from QR4650. Oman Air (www.omanair.com) also operates the route up to five times a day, with an economy fare costing QR1500, and Business Class QR3490. Flights take one hour and 40 minutes. Muscat International Airport is 16 miles from the city’s business district. Taxis are plentiful at the airport; visitors are advised to check how much a taxi fare should normally be to their destination before negotiating with the driver. Currency: (Exchange rate as of December 2011) Omani Rial OMR1 = QR9.5

WHERE TO STAY:The Grand Hyatt (muscat.grand.hyatt.com) Situated in the peaceful embassy district on a huge stretch of almost empty beach, the Grand Hyatt is a calming place to rest your head. If you can, book a club room, which gives you free Internet and access to a private lounge providing breakfast, drinks and evening snacks, all served on an open terrace with a dramatic mountain backdrop. Rooms start at OMR176 (QR1665) in January, room only. Clubrooms start at OMR206 (QR1949) a night. The Chedi (www.ghmhotels.com) A short drive from the airport, this beautiful hotel is designed to calm with senses. Fusing Arabic and Asian style, it offers 156 rooms and suites with spectacular views of the Al Hajar Mountains or the Gulf of Oman. You won’t have to go far for a great meal, either - the hotel is home to The Restaurant, one of the best eateries in the city. The Chedi’s

A gateway between the East and West since the first century, Muscat remains an important crossroads in the Middle East. Since the accession of the Sultan in 1970, Oman has experienced a period of rapid change. Victoria Scott gives her tips for a successful trip to this exciting, cosmopolitan capital city.

best value room rate in January is OMR180 (QR1703) including breakfast. Shangri-la Barr Al Jissah Resort (www.shangri-la.com/en/property/muscat/barraljissahresort)The Barr Al Jissah Resort is made up of three hotels, Al Waha, Al Bandar, and Al Husn, the last two being the most suitable for business travellers. Set out of town and backed by rugged mountains, it has access to prime diving sites just off the coast. It is also the perfect place to combine business with pleasure, as the Al Bandar has 11 meeting rooms and a 1056 square metre ballroom. A deluxe sea view room at Al Bandar is OMR169 (QR1599) per night during January, including breakfast.

WHERE TO PlAY:Perched on a hill overlooking the city, The Mumtaz Mahal is one of the city’s favourite restaurants. The huge picture windows mean you can savour the restaurant’s delicious authentic Northern Indian cuisine while taking in the beautiful view. Local residents rave about the steak at The Restaurant at the Chedi hotel. And that is not its only strength – its international menu is also strong on local fish and regional cuisine.

SPlASH YOuR CASH: You cannot visit Muscat without a visit to the Mutrah Souq, where you can find just about anything you fancy for a price you can afford. Located on the Mutrah Corniche, seek out the Omani silver and antique stalls if you are souvenir shopping.

CulTuRE vulTuRE:Sultan Qaboos Grand Mosque. Built to mark the 30th anniversary of Sultan Qaboos’ accession, the grand mosque is thought to be the third largest mosque in the world. It is a must-see for any visitor to Muscat. Non-Muslims are welcome any morning except Friday, but ladies must cover their heads, wrists and ankles. Both the interior and exterior of the mosque are spectacular. Particular highlights are the enormous Swarovski crystal chandelier and the Persian carpet in the main prayer hall, which is reputed to have taken 600 people four years to weave. The Royal Opera House (www.rohmuscat.org.om) Muscat’s new Opera House is attracting an extraordinary line up of stars. Recent concerts include the London Philharmonic with Yo-Yo Ma,

Wynton Marsalis, and sell out performances of Swan Lake and Carmen. Hot tickets indeed.

InSIDER TOP TIP: Head to the Crowne Plaza hotel, (www.crowneplaza.com) for Oman’s most spectacular sunset. Get a table on the terrace and the hotel’s unique position gives you beautiful views of the Corniche.

Business Travel Insider: Muscat

A three night Body and Soul break costs GBP749 (QR4254) for one person in mid-January. The price includes all meals during your stay, two Body Balance classes, an aromatherapy massage, and one Oriental wisdom treatment www.grayshottspa.com

LIfESTYLELIfESTYLE

TheEDGE

TheEDGE Getaway - Grayshott spa, surrey, united Kingdom

kiteboarding in Qatar

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Peace on arrival, health on departure – so goes the translation of the Grayshott Spa’s Latin motto. An ideal destination, located just an hour’s train journey from London in leafy Surrey, it is also very easy to get to from Heathrow airport, making the journey from Doha an achievable one for a short break. Winner of 2011’s Best Luxury UK Destination Spa, Grayshott is a historic country house set in 47 acres of grounds. A former home of famous poet Alfred, Lord Tennyson, the spa has 59 suites and rooms, all designed to make you feel at home. And despite its healthy credentials, you will not go hungry here – Grayshott has also won awards for its cuisine; you can choose between a “healthy eating” or a “light diet” menu, depending on your needs. As well as its separate male and female spas with 36 treatment rooms, Grayshott’s facilities include indoor and outdoor tennis courts, a hydrotherapy pool, a nine-hole golf course and a fully equipped gym. So you should feel healthy on departure, providing the hotel’s tranquility does not lead to a touch of indulgent lethargy, of course.

With its long beaches and thanks to consistent, steady winds out of the north in the autumn and winter months, through to spring and even occasionally in summer, Qatar is fast becoming recognised throughout the world as a great destination for the sport of kiteboarding. From humble beginnings when only a handful participated in the sport here there are at least of couple of hundred people – male and female of all ages – who kiteboard regularly in the country, many making a day at the beach of this with their whole family, as well as a number of schools teaching the sport. Most of the participants are expatriates but there are an increasing number of Qataris who are being attracted to this invigorating, adrenaline-inducing pastime and moves are afoot to formalise the sport and introduce it to more local youngsters in the near future. There are three popular locations where the kiting is performed and taught, Fuwairit on the north east coast; Zukreet on the east and Wakrah just outside of Doha, as well as more lesser known options for the more experienced. However, it must be noted that this sport is extremely dangerous and must be learned via professional instruction, which costs from QR800 per day. TheEDGE has personally witnessed the foolish people trying to learn informally from amateurs on the weekends, which is something that, inevitably ends in a trip to the hospital. However, if you do it right you will find yourself flying along one of Qatar’s beautiful lagoons, or in the warm waters of the Gulf, your kiteboard cutting through the salty liquid below at palpitating speed. And soon enough after that you will find yourself sailing through the air as your kite stiffens in the wind and cranks up

g-forces as it pulls you ahead, and you will realise that kiteboarding is a great experience and an ideal way to escape the urban confines of Doha and utilise Qatar’s lovely coastline on the weekend.

For more information visit www.edgeridersqatar.com or call00974 55854579.

TheEDGE78

LIfESTYLE

Have a pressing sartorial question? We have it licked.

Our top 10 choices in the English capital.

YOUR STYLE MYSTERIES sOlVED

how long should a trenchcoat be?There is certainly no shortage of choices when it comes to trenchcoat lengths today, which has, in fact, always been the case with this century old garment. At Burberry, our favourite trench brand, the custom service will make your coat in one of three lengths (midthigh, knee- and mid-calf), so it comes down to personal preference.

i like to get dressed without thinking about it too much – do i really need a big selection of winter scarves, or is there one go-to that i can rely on for the entire season?

Panasonic is pleased to announce the Middle East launch of its new DMC-GX1 digital interchangeable lens system camera featuring high image quality and stunning performance in both response and function. The DMC-GX1 records 1920 x 1080 full-HD video with stereo sound in AVCHD format, which is superior in both compression efficiency and friendliness with AV equipment for playback. Available in silver and black, the DMC-GX1 offers luxurious comfort in shooting experience with stunning performance and a host of functions, to be a great partner that is always in your sight, in your mind.

Distributed in Qatar by Nasir Bin Abdullah & Sons In Great By Choice: Uncertainty Chaos

and Luck—Why some thrive despite them all, we ask: why do some companies thrive in uncertainty, even chaos, and others do not? Based on nine years of research, buttressed by rigorous analysis and infused with engaging stories, Collins and coauthor Morten Hansen enumerate the principles for building a truly great enterprise in unpredictable, tumultuous, and fast-moving times. This book is classic Collins: contrarian, data-driven, and uplifting.At Virgin Megastore for QR127

Anderson & Sheppard (www.anderson-sheppard.co.uk)Berluti for possibly the best shoes in the world. A cast of your foot is made in wood, stored at the shop, and whenever you order a new pair – they are be made to measure. (www.berluti.com)Bourdon House, The London Home of Alfred Dunhill, set in the former Mayfair residence of the Duke of Westminster, this flagship of the luxury brand is a must. (www.dunhill.com/en-cn/thehomes/london/)Dege & Skinner, whose clientlist includes royal family members, including the Sultan of Oman, offers bespoke and ready-to-wear shirts. (www.dege-skinner.co.uk)Gieves & Hawkes (gievesandhawkes.com)GJ Cleverley & Co, a very exclusive bespoke and ready-to-wear shoe shop on Old Bond Street. (gjcleverley.co.uk)Harvey Nichols (www.harveynichols.co.uk)Huntsman, a shop instantly recognisable by the two stags’ heads at the entrance, has been around for 160 years. (www.h-huntsman.com)Turnbull & Asser, a 125-year-old institution known for service, quality and attention to

Panasonic lumIX G

read it: Great By Choice

a man’s shopping guide to…london

While it depends on the shades that you usually wear, you cannot really go wrong with a navy (or any solid colour) cashmere or lambswool plain knit. Look for a style that has shortish, fringed yarn ends.

everyone around me seems to be flashing enormous watches, but they just do not look right on me at all. what are some stylish smaller options?

The pendulum towards big and bigger watches is finally starting to swing back after 10 years. Brands are now selling smaller versions of their larger watches, and overall taste is turning to more discreet dress watches. Look for something in a 37 to 40 millimetre diameter, available in Rolex’s Oyster Perpetual and Hermes’ Cape Cod ranges.

how long can i leave the wear on the heel of my shoe before i have to get them mended?

When the first layer of the heel block – be it leather or rubber – is worn through, it’s time to get the shoes re-heeled.

detail. (www.turnbullandasser.com)James Smith & Sons, for beautifully made umbrellas, walking sticks and accessories. (www.james-smith.co.uk)John Lobb, an exclusive made-to-measure shoe shop on St James’s Street. (www.johnlobbltd.co.uk)

10TEN ThINGS

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The world’s 10 most powerful women according to Fortune and Forbes magazines.

wOmEN OF

pOwERInDRA nOOYIAs chairman and chief executive officer (CEO) of PepsiCo, 55-year-old Nooyi (pictured right) has made several of the world’s most powerful women lists many times. With approximately US$60 billion (QR218 billion) in annual revenues, PepsiCo is the largest food and beverage business in the United States (US), with Nooyi, a native of Chennai, India, overseeing around 300,000 staff worldwide.

IREnE ROSEnFElDThis Cornell-educated mother of two

heads up Kraft Foods as chairman and CEO, making her the leader of the world’s second largest food maker. Rosenfeld oversees US$48 billion (QR174 billion) in revenue and 127,000 employees with sales in 170 countries, having led the company’s IPO, the integration of Nabisco and Cadbury, and an increase of annual revenues by 43 percent in 2010.

AnGElA MERKElAs the person at the helm of Europe’s

most vibrant economy, Merkel may well be considered the de facto leader of the European Union. The 57-year-old German chancellor is a trusted leader in the region, with a recent poll showing that the French have more faith in Merkel (at 46 percent) than they do in their own leader Nikolas Sarkozy.

HIllARY ClInTOnIt has been a difficult year for Clinton,

from the Arab Spring uprisings and WikiLeaks drama, to Iran’s alleged attempted assassination on the Saudi ambassador to the US and the death of Osama bin Laden. But the Secretary of State has earned impressive marks for her composure nevertheless.

DIlMA ROuSSEFFBrazil’s new president may have endured

several lowlights this year – including being

late and over budget for the 2014 World Cup and 2016 Olympics – but Rousseff has also spent her first year in charge cleaning house. She has dismissed five cabinet ministers and ensured that many other officials have been charged with corruption.

SHERYl SAnDBERGEveryone knows Mark Zuckerberg, but

Facebook chief operating officer, Sandberg, is more low profile. Initially a Google global sales and operations vice-president (and before that, chief of staff for the US Treasury Department), Sandberg helped grow Facebook’s user base from 70 million to over 750 million, representing an incredible 11 percent of the world’s population. She also helped monetise the website, and is reportedly preparing for an early-2012 IPO that could value Facebook at US$100 billion (QR364 billion).

CHRISTInE lAGARDEAs managing director of the International

Monetary Fund (IMF), she is the first woman to run the IMF, and – to understate the situation – inherits an institution in crisis. French native, Lagarde, was responsible

for the controversial and unpopular call for mandatory capitalisation of European banks, a move that was then adopted two months later. PATRICIA WOERTZ

Woertz built her career in oil, but now oversees 240 plants that turn agricultural sources into food and chemicals. The 57-year- old chairman and CEO of Archer Daniels Midland is a favourite with investors – stock has climbed 13 percent in the last 12 months.

OPRAH WInFREYShe may have ended her talk show after

25 years, but Oprah Winfrey ensures she continues her influence by launching OWN, the Oprah Winfrey Network. In addition, her company, Harpo, builds worldwide brands like Dr Phil, Dr Oz and décor guru, Nate Berkus.

EllEn KullMAnThe chairman and CEO of chemical giant,

DuPont, took the reins two years ago when the recession began to bite. Areas of growth changed and Kullman adapted, reorganising the business in a move that is paying off. Sales across business units are up and DuPont is hiring again.