the edge - nov 2012 (issue 38)

ROLEX_The Edge_DPS New.pdf 1 10/23/12 5:13 PM

CONTENTSw w w . t h e e d g e . m e 2012

ON THE COVERMark van Dijk discusses whether COP 18 will build on the successes of the previous conference, held in South Africa last year. (P.44)

MARKET WATCHDheeraj Shahdadpuri analyses the recent data on ecenomic growth in Qatar. SPECIAL FOCUS Simon Watkins argues that Qatar’s banking still has a long way to go before it can compete globally.

SPECIAL REPORTThomas Bacon takes a look at Qatar’s LNG supply deals targeting developed and emerging economies.

BALANCE SHEETYusuf Sayed reports on the new financial accounting standard for real estate investment.

.32.

.34.

.38.

.40.

FINANCE & ECONOMICS

FEAturESBUSINESS INTERVIEWDr. Rabi Mohtar discusses Qatar’s leadership in promoting a sustainable future and QEERI’s role.

FEATURE STORYBarry Mansfield writes about Qatar’s eco-friendly Lusail City.

ON THE PULSEShehan Mashood takes a look at the impact of the Muslim civilisation on trade and science.

.50.

.54.

.58.

3TheEDGE

58KNOWLEDGE & EXPErtISE

LEGAL INSIGHTAn overview of Qatar’s Advertising Law.

BUSINESS MANAGEMENTLynda Gratton writes about Indian ingenuity and its potential as a management and innovation hub.

HUMAN RESOURCESIn part 2 of TheEDGE’s series on poor customer service, Victoria Scott uses social media as a tool to report on real experiences of Qatar’s customers.

.66.

.68.

.72.

.62. BUSINESS INTERVIEWZeyad Al Jaidah and Abdulla Al Ansari discuss the realities of the startup and SMEs sector in Qatar.

CONTENTS

BuSINESS INSIGHt INtErvIEWSTheEDGE spoke with Lord Michael Hastings, global head of citizenship at KPMG about how private companies can lighten global problems. Also, TheEDGE spoke with Pinsent and Masons International Law Firm about the recently held seminar discussing the importance of enacting laws to protect health data in Qatar.

.77.

FROM THE EdITORCONTRIBUTORSFEEdBACKNEWS ETCETERAQATAR IMPACTCOUNTRY FOCUSENERGY ANd RESEARCHPROdUCTS ANd REVIEWS10 THINGS

.06.

.07.

.10.

.12.

.20.

.22.

.27.

.82.

.84.

REGuLArS

84

TheEDGE4

54

Lexus ES 350 MAG new.pdf 1 10/24/12 5:18 PM

FROMTHE EDITOR

At COP 18 2012 the world’s attention will firmly be upon Qatar, particularly from environmental quarters, for many of whom the irony

of the world’s largest climate change summit coming to a country perceived by many as one of the planet’s worst polluters, is not lost. However, this odd paradox is actually the reason Qatar is so keen to host the event. During COP 18, which TheEDGE looks at on page 44, Qatar hopes to showcase to the world and its media many of its green credentials. Doha is home to numerous existing, planned and proposed sustainability research initiatives and eco-friendly, and even carbon neutral projects (such as the Lusail City development, featured on page 54). Through these, and in line with its 2030 National Vision, Qatar aspires to economic diversification in anticipation of the eventual depletion of its fossil fuel reserves. Qatar has ambitions to become a global leader in developing and exporting sustainable energy innovations, such as solar power and desalination.Qatar would also like to debunk some of the myths about its allegedly poor environmental reputation. Foremost of these is that the country contributes in a large measure to global carbon dioxide (CO2) emissions, as it ranks among the top producers per capita (55.4 tonnes per person), an impression that has been widespread since these 2007 statistics were released by the United Nations in 2010.However, this is a statistic that the country’s energy and environmental experts, such as Dr. Rabi Mohtar, executive director of the Qatar Energy and Environmental Research Institute (QEERI), whom we interview on page 50, point out is skewed by the country’s small population of less than 1.9 million.Measured against giants such as China, with a per capita rate of 4.2 tonnes of CO2,

FROM

theEDGE is printed monthly © 2012 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.

Qatar might look comparative. But when you consider that China emitted 6538 million tonnes total CO2, compared to Qatar’s 63 million tonnes according to 2007 statistics, a different narrative emerges. And, according to figures release by the World Bank in 2008, at 49 metric tonnes of emissions per capita, Qatar’s long-standing efforts to reduce this figure even further seem to be working.Nevertheless, there is acknowledgement in Qatar that there is still much to be done when it comes to being more environmentally-friendly. Information released recently as part of the Qatar Statistics Authority’s 2011 Sustainability Development Report showed a 27 percent rise in ozone depleting substances, as well as increases in nitrogen oxide and sulfur dioxide. Dust and smoke levels are also up due to construction activity and traffic.Qatar is the largest per capita consumer of energy and water in the region, (and indeed in the world for the latter), and produces a vast amount of solid and other kinds of waste. In our Environ supplement, we examine the challenges Qatar faces and what the country’s government, businesses and individuals are doing to change the status quo. On a business level, the most challenging issue is that “being green” is still seen as prohibitively costly, which we discuss with KPMG’s Lord Hastings on page 78. For Qatar, as in the rest of the world, the issues of pollution its effect on climate change and impact on our natural ecosystems must be a priority, one that takes precedence over profit.

TheEDGE6

THE EDITOR

Miles Masterson, Managing Editor

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

PUBlICaTIONS DIRECTOR Mohamed [email protected]

MaNaGING EDITORMiles [email protected]

DEPUTy EDITORErika Widé[email protected]

DIGITal/EDITORIal aSSISTaNT Shehan [email protected]

REGIONal SalES DIRECTORJulia [email protected]+974 66880228

hEaD OF BUSINESS SalES Manu Parmar [email protected]+974 3332 5038

SalES MaNaGERSJoseph [email protected]+974 33675301

Johanna Romero [email protected]+974 55007108

DISTRIBUTION & SUBSCRIPTIONSAzqa [email protected]+974 55692471

CREaTIVE DIRECTORRoula zinati Ayoub

DESIGNERSSarah Jabari

FINalISERMichael Logaring

PhOTOGRaPhERHerbert Villadelrey

PROOFREaDERGeoffrey Instone

PRINTED ByAli Bin Ali Printing Press, Doha, Qatar

CONTRIBUTORS

P. 32DhEERaj ShahDaDPURIAnalystDubai, UAE

P.54BaRRy MaNSFIElD Freelance JournalistOxford, United Kingdom

P. 34SIMON WaTKINSFreelance Financial JournalistLondon, United Kingdom

P. 36aDRIaN BlISSSenior Financial ConsultantGuardian Wealth ManagementDoha, Qatar

P. 27jaMIE STEWaRTInternational CorrespondentLondon, United Kingdom

P. 38ThOMaS BaCONAnalystOxford Business GroupIstanbul, Turkey

P.44MaRK VaN DIjKJournalistCape Town, South Africa

P. 40yUSUF SayED Senior Audit ManagerKPMG, Qatar

ENVIRON SUPPlEMENTSyBRaNDUS aDEMaJournalistDoha, Qatar

P. 72VICTORIa SCOTTJournalistDoha, Qatar

P. 68lyNDa GRaTTONProfessor of Management Practice London Business School, United Kingdom

TheEDGE 7

CONTRIBUTORS

PG.66BRENDa hIllSenior Legal ConsultantDLA PiperDoha, Qatar

Aamal new DPS NEW.pdf 1 5/27/12 12:58 PM

individual, while I believe that it is never too early to start planning one’s retirement. I think it would be very beneficial if you could do a series on how to manage day-to-day personal finances in Qatar.James Stern, Doha

Thanks for the input, we will look into covering more personal finance stories that have an immediate impact on our readers. – Miles Masterson, Managing Editor

ThE CONSUMER IS alWayS RIGhTI could not agree more with the need for better customer service in Qatar. There is definitely a lack of training among a whole host of other issues like demotivating conditions that need to be addressed before any significant change can be made. I too have been on the receiving end of bad customer service on more than one occasion here. Amar Manai, Wakrah

I was very suprised to find so many people with customer service horror stories. I have been living in Doha for a few years now and have found people very helpful when something went wrong. Aside from the language barrier which sometimes causes a confusion, but I think that is to be expected in such a multi-cultural environment like Qatar. George, Doha

Do make sure you read our follow up this month. We got people to write in to us about their customer service horror stories, we then contacted the relevant business to see what they had to say (page 72) – Miles Masterson, Managing Editor

READER FEEDBACK

TheEDGE10

FEEDBaCK

MaNaGEMENT IDEOlOGy The article on American hegemony in management raised some very interesting points particularly with regards to how the success of companies are measured. Perhaps it is time that a new ideology prevailed, although I have no clue what that would be.Khalid Abdullah, Doha

Thanks Khalid, we always appreciate feedback. As for a challenging ideology of new management practice, how about India? Lynda Gratton of the London Business Schools discusses India’s future as a possible management and innovation hub in the magazine this month. (page 68) – Miles Masterson, Managing Editor

a WINNING STRaTEGyYour personal finance articles are usually about long-term financial plans for an

FOllOW theEDGE ONlINE

FOLLOW THEEDGE AND WIN A NOKIA(MOBILE PHONE)

FOllOW US ON TWITTER:@ThEEDGEQaTaR

lIKE OUR FaCEBOOK GROUP:WWW.FACEBOOK.COM/QATARTHEEDGE

jOIN OUR lINKEDIN GROUP:ThEEDGE MaGazINE QaTaR

Send us a letter or email correspondence, or follow TheEDGE on our Facebook page, Twitter feed or LinkedIn group in November and stand in line to win a Nokia (Mobile Phone) pictured here*. Each month one such reader will be drawn to receive this great prize.

ThIS MONTh’S WINNER OF ThE NOKIa N9 SMaRTPhONE IS MOhaMED aSIF*Open only to readers resident in Qatar.

REACTION IN THE FORM OF LETTERS AND E-MAILS FROM THEEDGE READERS, AS WELL AS SURVEY FEEDBACK FROM OUR WEBSITE WWW.ThEEDGE.ME

FEEDBACK LETTERS FROM ThEEDGE REaDERS

AGENC222 ADS_the edge_21x27_Eng.pdf 1 10/22/12 5:12 PM

NEWSETCETERA

PHOTO OF THE MONTH

TheEDGE MAGAZINE

Hailed by the international media as a significant – and a controversial – diplomatic decision by Qatar, His Highness the Emir Sheikh Hamad bin Khalifa Al Thani and his consort Her Highness Sheikha Moza bint Nasser Al Missned visited the Gaza Strip in Palestine recently, as exemplified by this promotional flag in Gaza City. The Emir was the first world head of state to do so since maligned political party Hamas were voted into power in 2007. Officially in the Palestinian territory to pledge US$400 million (QR1.4 billion) in aid for reconstruction projects, as a signal for what Gaza’s Hamas prime minister Ismail Haniya called “the break of the economic blockade” his state has faced since he came to power, the Emir’s visit also had political ramifications. Foremost among these was a sense of disappointment from Fatah-led Hamas political rivals, the Palestinian Authority, whose president Mahmoud Abbas expressed reservations about the Emir’s apparent endorsement of Hamas’ leadership. The Emir’s visit also called into question United States ally Qatar’s involvement – some media critics say “meddling” – in affairs in this part of the region. For his part though, in a speech to a rapturous and adoring local audience in Gaza City recently, HH Emir Sheikh Al Thani called for opposing Palestinian factions to put aside their differences and unite in the spirit of Arab brotherhood. (Image Corbis)

13TheEDGE

NEWSETCETERA

TheEDGE

NEWS Etcetera

NEWSETCETERA

14

QaTaR FINaNCIal aUThORITy aDjUSTS REGUlaTIONS TO aTTRaCT WIDER aRRay OF FIRMS The Qatar Financial Centre Authority (QFCA) announced recently new regulations for governing special purpose companies, holding companies and single-family offices operating in or from the QFC. The regulations provide for a more attractive legal, regulatory and business environment that will allow expansion of the range of services the QFC firms may offer and the structures they may adopt, notably single family offices and special purpose companies. Pointing out that

By Asif Iqbal

the QFCA has been strengthening its environment to offer business platforms for local, regional, and international firms, QFC Authority chief executive officer Shashank Srivastava said, “a business looking to establish itself within the QFC environment, whether Qatari or foreign, can count on certain and clear regulatory and tax regimes.” As per the new regulation, the Special Company Regulations (SCR) provides the legislative framework for special purpose companies and holding companies.

According to QFC’s new regulations, the SCR seeks to more clearly define, explain and clarify the activities in which holding companies may engage, such as holding subsidiaries, granting security interest over assets, providing an indemnity, guarantee or similar support to any third party for the benefit of any of its subsidiaries; the acquisition and holding of any interest in any asset whether tangible or intangible for the benefit of any of its subsidiaries; single family office regulations (SFOR).

RASHID AL MANSOORI, NEW QAtAr EXCHANGE CEO

In early October 2012 the Board of Qatar Exchange (QE) appointed Qatari national Rashid bin Ali Al Mansoori as chief executive officer (CEO) of Qatar Exchange,

replacing Andre Went who remains at the bourse as a strategic advisor.

Besides 18 months experience as deputy CEO at QE, Al Mansoori is also is on QE’s board. He holds a BSc degree in computer and management sciences and was the information technology (IT) director at the Qatar Investment Authority, where he set up the IT department and electronic financial systems. Mansoori was also the IT director at the Qatar Olympics Committee and has worked in top-level positions in the Qatari public and hydrocarbons sectors.

“It is an honour for me to be appointed the CEO of the Qatar Exchange, Al Mansoori told TheEDGE. “My appointment comes in line with the general policy of the State of Qatar in terms of appointing highly-qualified Qataris in leading positions in government and semi government institutions.”

One of Al Mansoori’s first tasks as new

CEO was in making a keynote speech at the MEED Banking Summit in Doha recently. Here he discussed the growth of the Doha bourse, both in terms of further international and regional investment and more local firms listing. “The reality, however, is that IPOs are highly sensitive to external factors, principally market conditions and company readiness, neither of which any exchange can directly control,” Al Mansoori said at the event.

On the subject of the long-anticipated MSCI upgrade of the exchange from ‘frontier’ to ‘emerging’ status, Al Mansoori told TheEDGE. “With regards to MSCI, the situation remains the same: we have ticked all the required boxes. It is now up to listed companies to review increasing their foreign ownership issues (FOI) before the next review in June, 2012. Until then, we remain committed to working on the FOI issue with listed companies.”

NEWSETCETERA

15TheEDGE

NEW SOLAR ENERGY TEST FACILITY TO OPEN IN QATARIn early December 2012, Chevron Qatar and Qatari sustainability company GreenGulf will be inaugurating Qatar and the region’s first solar energy test facility at Qatar Science and Technology Park in Doha, the first phase of which will become operational into 2013. “We are installing about 20 photovoltaic technologies,” Chevron Qatar chief executive officer Carl Atallah told TheEDGE, “and then we are also going to test about 10 solar thermal technologies.” The aim of the facility, says Atallah, will be to apply each of these technologies, provided by various solar companies to a rigorous programme to determine those that are most cost and energy efficient in local conditions, as well as those that might be the best suited to being used for desalination.

AL JAWHARA CITY HOSPITAL Qatar will soon have a new hospital supported by the private sector that will provide world-class medical facilities including a medical spa. The Al Jawhara City Hospital will be part of the Al Jawhara City, a mixed-use project being developed by the Bahrain-based Khaleeji Commercial Bank in the urban district of Lusail in New Doha. The hospital will provide services ranging from a surgical clinic, dialysis center, an ophthalmology surgical center, a pediatric centre and a medical spa. As one of Qatar’s few freehold projects, Al Jawhara City is an investment opportunity providing the prospective investor the first mover advantage on a very unique property,” said a press statement. The project is a district of Lusail.

NEWS IN BrIEF

Canon Middle East along with Salam Technology opened the doors of its first business solutions demo Centre and Showroom in Qatar. The opening represents a move by the company to consolidate market share of the Qatar print industry, which is estimated to be worth of around US$100 million (QR364 million). Designed to meet the growing needs of business-to-business and industrial sectors in Qatar, the new showroom will be a central hub for all commercial digital printing requirements. As such the showroom will display end-to-end business solutions such as large format printers (LFP), document and imaging management systems (DIMS) as well as its industry-leading range of office and professional printers.

Naoshi Yamada, deputy managing director, Canon Middle East, said: “The digital print market has evolved tremendously and has reached a point where the industry needs to look at customer relationships and businesses need to look for opportunities to deepen these. For example, inspiring and supporting their customers with value added services that will have a positive impact on their business. The opening of a dedicated business solutions showroom which showcases all the possible opportunities within the sector is testament to this.”

SALAM STORES ANd CANON CELEBRATE 50 YEARS IN QATAR, OPEN NEW PRINT BUSINESS

SILA, QATAR’S FIRST ANGEL INVESTORS NETWORKSILA is a new business angel network that kicked off with a live demonstration this month to a packed audience in Doha. Entrepreneurs from Qatar and neighbouring countries pitched their business ideas live to a group of angel investors from the region, in hopes of gaining funding, mentoring and networking contacts to help get their businesses off the ground.

According to Silatech chief executive officer Dr. Tarik M. Yousef, “Despite a lot of young talent with good business ideas, the equity gap between the seed and early business stages and the growth stage of small business with support from investment funds is a barrier to success.” SILA also hopes to build a community of investors alongside entrepreneurs that will help create a symbiotic relationship to foster ingenuity in the region. Their

aim is to work towards catalysing an entrepreneurial ecosystem in Qatar as a hub for the wider Arab world. To address the so-called ‘start-up equity gap,’ SILA will provide entrepreneurial support services from a wide network of partner organisations.

“It is my firm belief that without such efforts now, specially to help start-ups and young entrepreneurs who have projects that want an alternative to public sector jobs, five years from now without this effort we will be looking at failed expectations yet again, dashed hopes. This is the biggest threat in my view to an emergence of a new class of young entrepreneurs,” said Dr. Yousef.

Salam International recently celebrated 50 years of business with Canon, celebrated at a function at Salam’s TheGate in Doha and including guests such as Salam International chief executive officer Issa Abu Issa, the Japanese ambassador to Qatar Kenjiro Monji and Canon Middle East deputy managing director Naoshi Yamada.

Chief executive officer Dr. Tarik M Yousef of Silatech supports the new business angel network called SILA.

“Each of our divisions has increased revenues and generated strong, double-digit profit growth with attributable net profit increasing by almost 15 percent for the first nine months of the year, and almost 38 percent for the third quarter along with an expansion in the group margin.”Sheikh Faisal bin Qassim Al Thani, chairman of Qatari diversified Aamal Company, which recently released highly positive third quarter growth figures.

“Qatar will witness strong lending growth over the next half decade, driven by major government infrastructure projects. Qatari banks are likely though to be stretched in funding this lending growth as a result of their current high level of balance sheet leverage.”

As stated in a recent report by SICO Research, a division ofBahrain-based regional investment bank.

“Food can be a decisive factor when choosing an airline and that makes a difference between a good and great flight.”

Chief executive officer Akbar Al Baker commenting on QA latest coup of bringing internationally reknown chefs onboard to develop a “new dining experience” for first and business class flights.

2012EVENTS CALENDAr

TheEDGE

NOVEMBER – DOHA, QAtAr

11 – 13Bridges and Tunnels Middle East

11 – 14MENA Investment Management Forum 2012 (Formerly known as FundForum Middle East)

11 – 14Q-Money

12 – 8 Global Entrepreneurship Week

12 – 15Aspire4Sport

13 – 15World Innovation Summit for Education (WISE)

17 – 24Doha Tribeca Film Festival

20 – 21 Future Concrete Conference

NEWS IN QUOTES

“Through this partnership we wish to develop a common cultural awareness and therefore emotional intelligence that transcends disciplines and provides individuals the aptitude and skill-set to appreciate cultures from across the world.”

Abdulrahman Al Khulaifi, president of Katara said recently when Katara Cultural Village and Bloomsbury Qatar Foundation Publishing signed a memorandum of understanding.

16

NEWSETCETERA

For a full and comprehensive calendar of events in Qatar please visit www.theedge.me/events

The Edge Mag.indd 1 10/16/12 5:25 PM

ticket from Doha to London and back? Well an equivalent return ticket from London all the way to Bangkok – via Doha – is only QR10,120. It is more than QR6000 cheaper to fly almost double the distance.

And showing it is a Gulf phenomenon, the price difference for the same ticket on Emirates and Etihad, via their hubs in Dubai and Abu Dhabi, is approximately QR4000 and QR9000 respectively. Qatar Airways’ official position is that it is common practice for airlines providing a direct link to often charge more, because they are offering a service that is direct, and therefore more convenient than having to make a stop.

According to Al Baker: “The environment is going to get tighter because there are major airlines competing for business in certain regions, shrinking due to financial implications. Europe, and of course do not forget that America has still not recovered from the recession.” Unfortunately it seems to add up to a business model which favours those who do not actually live here – which is a shame, given the number of expatriates, especially those who travel frequently from Doha and do not really have much of a choice when it comes to airline ticket prices.

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.

20 TheEDGE

QATARIMPACT

Readers with long memories will recall I have written about Qatar Airways before.

But I feel the national carrier can always warrant discussion

because of the huge role it plays for the country, and the fact that it is one of the fastest-evolving businesses in Qatar.

I have always viewed Qatar Airways as a sort of ‘transit airline’ – one that used the excellent geographical positioning of Doha to move people from east to west and vice versa, instead of the usual hubs of Singapore, Hong Kong and more recently Dubai.

However I think that has changed. It has ostensibly been superseded if you like by a premium strategy – ‘premium’ being the industry word for the pointy end of the plane which most passengers never see.

It started with the Premium Terminal at Doha International Airport, then the phasing-out of on-board first class lounges and indeed first class itself on the newer Boeing 777s, in favour of more business seats. Even the Privilege Club frequent flyer programme has been made more attractive, but mostly for premium class passengers.

Clearly there is a focus on the higher-paying customers, accentuated by a recent announcement that four world-renowned chefs have been brought in to revamp the premium-class menus. I was fortunate enough to taste the food at the launch, and I can say that it is

excellent. But I also wondered if it could have been made available in economy class too, and actually whether – in the scheme of the whole flying experience – if it was an entirely necessary move. The airline’s chief executive office, Akbar Al Baker, enlightened me: “It is special. As you can see Qatar Airways is always raising the bar of service on board our aeroplanes. We decided to have exclusive meals with celebrity chefs on our aeroplanes. And we have chosen four top individuals so that we cover our international network.”

But let us not forget the bulk of paying passengers fly economy class. And on Qatar Airways – the only real and convenient option out of Doha – they are paying a lot. It seems ‘premium’ also extends to fares, and not just in Qatar. For a family of four to fly to London and back in early November, they are looking at QR14,140 in economy class. That is QR1120 more expensive than British Airways with a stop in Bahrain, and QR1860 more than Emirates, via Dubai.

Business class is a little more competitive – in fact, markedly cheaper than Emirates on the same route – but at around QR16,500 for one adult, it is not an option many will be able to afford. And it leads to a wider point about the airlines available to us here: why is it so expensive to fly to and from their hubs – places such as Dubai, Doha and Abu Dhabi – but not to transit through them?

Remember that QR16,500 business class

of flyingAs with many who live and work in Qatar, TheEDGE columnist Kamahl Santamaria has been flying Qatar Airways for a while now. This month, he looks at the airline’s new ‘premium strategy’ to see if it is good value, and where it leaves the average traveller living in Doha.

C

M

Y

CM

MY

CY

CMY

K

AW ADQ The Edge Magazine.pdf 1 11/10/2012 09:33

COUNTRy FOCUS

The Federative Republic of Brazil is the world’s fifth largest country by geographical area and also by population, which stands at more than 192 million people.

In 2011, Brazil became the sixth largest economy in the world, with a gross domestic product of more than

US$2.4 trillion (QR8.7 trillion).Diplomatic relations between the Brazilian capital Brasília and

Doha were formally established in 1974, three years after Qatar’s independence from the United Kingdom.

In 2005, during an official visit to Qatar, the Brazilian minister of external relations, Celso Amorin conveyed to His Highness, the Emir of Qatar, Sheikh Hamad bin Khalifa Al Thani, the decision of the Brazilian government to establish an embassy in Doha, which opened in April of the same year. Two years later, the embassy of Qatar in Brasília opened.

QaTaR aND BRazIltHrEE DECADES OF BILAtErAL tIESAs of March 31, 2012 there were approximately 776 Brazilians working in Qatar, mostly in the aviation field and oil industry as engineers, and in the sports sector as either coaches or football players.

“Besides the Brazilian community in Qatar, it is estimated that around 200 Brazilians live in Kuwait and 230 in Bahrain, Tadeu Valadares, ambassador of Brazil to Qatar says, “There are approximately 2000 Brazilians living in the the United Arab Emirates, which hosts the largest Brazilian community in the Gulf region and the second largest in the Middle East, after Lebanon.”

Valadares says that between 2003 and 2011, trade in goods between Brazil and Qatar grew more than fifteenfold, from US$37 million (QR134 million) to US$575 million (QR2 trillion). In 2011, the total amount of Brazilian exports to Qatar reached US$337 million (QR1.2 trillion). 93 percent of these are concentrated in three products: 41 percent in iron ore, 29 percent in poultry, and 23 percent calcined alumina, a product used in ceramic and refractory applications.

Brazil, apart from being heavily industrialised explains Valadares, also has a sophisticated financial system and a very competitive agro-industry. “We produce almost everything from commodities like coffee or minerals such as iron ore to airplanes, cars, and military equipment,” continues Valadares. “In terms of Qatari markets, we export a range of products to sectors such as aircraft, sugar, automobiles, gemstones and other precious stones, granite, wood and its extracts, tobacco, cellulose, soft drinks such as Guaraná, juice fruits such as Caju and Maracuja, beef, clothing and shoes.”

In 2011, Brazilian imports from Qatar reached US$238 million (QR866 million), including 49 percent in liquefied natural gas (LNG), 19 percent in polyethylene, 14 percent in urea, 11 percent of naphthas, (a hydrocarbon product used primarily in the production of gasoline) and seven percent in sulphur.

For more than thirty years Qatar and Brazil have strengthened formal diplomatic and economic relations. Erika Widén reports further.

QR 1.2 TRIllION THE TOTAL NUMBER OF BRAzILIAN ExPORTS TO QATAR IN 2011.

TheEDGE 23

BRAzIL AT A GLANCE

Population: More than 192 million

GDP: In 2011 uS$2.4 trillion (Qr8.7 trillion)

Language: Portuguese

Government: Federative republic of Brazil

Qatar also hosts some of Brazil’s prominent companies in the field of civil construction, such as Odebrecht, Andrade Gutierrez, OAS and Queiroz Galvão. “They will for certain contribute to the modernisation of Qatar in the following years,” forwards Valadares.

In the financial sector, Barwa Bank, the Qatari shari’ah-complaint lender has recently launched a new fund to target the Brazilian market, as real estate is booming in Brazil. “Much of this expansionary cycle in terms of real estate has to do with the internal dynamics of the

Brazilian economy, and with the present situation and prospects of the global economy,” explains Valadares. “But it is also indirectly connected to the World Cup 2014 and the Olympic Games in 2016.”

“Moreover, the Brazilian embassy in Doha is highly active, and has participated in the Arab-South American Business Forum 2009 held in Doha in March of that year; with the participation of many Brazilian companies pertaining to various economic sectors,” adds Valadares.

Valadares also adds that the second Arab-South American Summit 2012 (which was recently held in Lima, Peru) has confirmed the importance of the process that began in Brasília in 2005, when the first summit was hosted by the former Brazilian president Lula da Silva. “The goal of this process is not limited to trade. What we Brazilians want

Diplomatic relations between Brasília and Doha were formally established in 1974, three years after Qatar’s independence from the United Kingdom.

COUNTRy FOCUS

GettinG there: Qatar Airways (www.qatarairways.com) flies daily to São Paulo. An economy return fare costs from QR8760, and QR31,770 in Business Class. The flight time is around fourteen and a half hours.

CUrrenCy:Brazilian Real

(BRL). BRL1 = QR1.8 (exchange rate as of October 2012)

Where to stay:Grand Hyatt São Paulo (saopaulo.grand.

hyatt.com) Located in the business district, this is a hotel that knows how to look

foremost is – besides attaining trade objectives – is to strengthen the political and cultural links between both regions. The strategic dimension of this process that engages Arab and South American states and societies is crucial for the developing countries of both regions, as it gives a new impulse to multilateralism.”

In addition, Brazil and Qatar have signed a number of Memoranda of Understandings (MOU) and agreements that establish a general framework allowing deepening bilateral relations. According to Valadares they have had a positive effect on business and other fields of bilateral cooperation such as media, consular relations, technical cooperation, and political dialogue. “What is important and deserves attention is the sum of MOUs and bilateral agreements that have set the indispensable stage for all future developments,” says Valadares.

In January 2010, during an official visit to Brazil by HH the Emir of Qatar the following agreements were signed: Agreement for the

Establishment of Joint Ministerial Committee; Agreement on Visa Exemption for Holders of Diplomatic and Special Passports; Agreement on Economic and Commercial; Agreement on Establishing a Mechanism of Bilateral Political Consultations, and an Agreement to Prevent Double Taxation in Airline Profits.

Subsequently, in May 2010 the Qatari-Brazilian Business Seminar was held in Doha during the official visit of the former Brazilian president Lula da Silva. In the course of the former president’s visit several bilateral agreements and MOUs were signed by the Brazilian authorities and Qatari counterparts, including: Agreement for Cultural Cooperation, Agreement for Cooperation in Sports, Agreement for Cooperation between the Brazilian-Arab Chamber of Commerce and the Qatar Business Association; Agreement for Cooperation between the Brazilian-Arab Chamber of Commerce and the Qatar Chamber of Commerce and

Industry; MOU between the Brazilian and Qatari Olympic Committees, and MOU for Cooperation in Tourism.

“Also the former Brazilian minister of development, industry and foreign trade visited Doha in December 2010, accompanied by a delegation of 100 businessmen,” adds Valadares. According to the embassy’s records from the year 2005 to 2011, the average number of Qataris applying for a Brazilian visa is about 190 a year.

The embassy of Brazil in Doha has also been actively promoting Brazilian culture. In 2011, Brazil participated in the first Cultural Latin American Festival together with Katara and other Latin American countries with embassies in Doha. “This year the Latin American Group in Doha is planning a huge exhibition of photos taken in 11 different Latin American countries. The title of the exhibition is enticing, Nature and Biodiversity in Latin America,” concludes Valadares.

BUSINESS TRaVEl INSIDER: SãO PAuLOSão Paulo has a vibrant culture, great nightlife and a cosmopolitan population. Victoria Scott offers her tips for business trips to Brazil’s largest city, which is also considered the country’s financial capital.

after its clients. Book one of the club rooms, which include complimentary internet access and access the club lounge with its private concierge, free breakfast and evening cocktails and snacks. A standard room with a king size bed costs from BRL1080 (QR1978) per night in November, including breakfast.

Where to play:Gero (www.fasano.com.br/gastronomia)

Serving excellent, high-end Italian fare, this is a very fashionable place to eat. It is a great place for business lunches (and star spotting, too) but book in advance, as it is very popular.

splash yoUr Cash: Feeling exclusive? We know just the place.

Daslu, the city’s most luxurious shopping mall, offers every designer brand worth

knowing, all topped off with free drinks and snacks. Have your helicopter drop you off on the roof – it is that sort of place.

CUltUre vUltUre:The Museu de Arte de São Paulo

(MASP, masp.art.br) houses an impressive collection of European art. The 1960s architecture is not liked by some, but it is a fun place to visit, which also offers workshops and dance performances – see the website for more details.

insiDer top tip: Just across from the museum is the

Parque Siqueira Campos, a surprisingly tranquil space in such a bustling city.

Designed to recreate the rain forest that once covered the area, it is a great place to take a breather.

TheEDGE24

COUNTRy FOCUS

generic advt 21 x 27 cm 2 new.pdf 1 10/18/12 12:20 PM

The Gate Ad_Mis En demeure_Edge NEW.pdf 1 11/1/12 12:49 PM

ENERGY & RESEARCH

DOha AND tHE rISING SuNQatar has made no attempt to hide its solar power ambitions, with plans afoot to secure lucrative export opportunities. And now it has emerged that an old friend is at the top of Doha’s list: Japan. By Jamie Stewart

Qatar will employ solar powered cooling technology at the 2022 World Cup (Image Getty)

atar has unveiled plans to target the Japanese market as it seeks to diversify its energy sector exports beyond its traditional

reliance on natural gas, the Qatar Foundation revealed recently.

Japan is potentially one of the globe’s most lucrative solar power export markets and Qatar, already on good terms with the Far East-Asian nation due to an ever-growing number of liquefied natural gas (LNG) supply deals, is recognising a major opportunity to extend that relationship.

“Solar energy has demonstrated massive potential as a renewable energy source that can effectively satisfy our current and future needs,” the chief executive of Doha-based alternative energy investment company GreenGulf Omran Al Kuwari said. Indeed in partnership with energy multinational Chevron, GreenGulf and other stakeholders a solar power energy testing facility is due to open in Qatar early December, and like its hydrocarbon exports, Doha will be looking

NEW DEalSIn October, Doha energy giant Qatargas signed a new long-term LNG supply

deal with Japan’s Chubu Electric for the delivery of up to one million tonnes per annum (MTA) for 15 years starting from next year. The agreement was “in addition to several existing agreements between Chubu Electric and Qatargas,” the Doha company said in a statement.

This came just two weeks after Qatargas had signed a deal with Japan’s KEPCO to supply 0.5 MTA of the fuel for the same 15-year stretch. Speaking at Qatargas’ annual reception in Tokyo, Japan, last month, Qatar energy minister Mohammed bin Saleh Al Sada said that the LNG trade “remains the backbone of our relations with Japan in the energy sector”.

And now it seems that the blossoming relationship between the two nations will not be restricted to the global LNG arena. Japan experienced a post-Second World War economic miracle, and now “the Land of the Rising Sun could yet see a second economic miracle, this time powered by solar energy,” according to the Qatar Foundation statement.

The statement went on to say that the two nations’ economic relationship is blossoming, with Japan now the world’s biggest importer of Qatari products, amounting to a total value of US$29 billion (QR106 billion) per annum.

State subsidies in Japan are fuelling a rush to buy into the renewable energy sector, which will soon see the country become the world’s second-largest solar power market, according to the Qatar Foundation.

At the same time, Qatar Solar Technologies (Qstec) – owned by the Qatar Foundation – will complete phase one of its giant polysilicon production plant in Ras Laffan Industrial City. The facility will produce the material used to build solar panels, and aims to supply enough both to meet domestic demand and export to the globe, with the burgeoning Japanese market top of its list.

ENERGy & RESEARCH

TheEDGE28

state subsidies in Japan are fuelling a rush to buy into the renewable energy sector, which could make it the world’s second-largest solar power market.

east for potential further partnerships and business. “We see many similarities with our Japanese

counterparts and we believe that the clean technology industry is one platform where Japan and Qatar can find many opportunities for collaboration,” said Al Kuwari.

Japan is in the early stages of a major push to develop clean, renewable power generation infrastructure as part of its long-term recovery from the devastating earthquake and resulting tsunami that knocked out its Fukushima Daiichi nuclear power plant in March last year.

In the intervening period, safety tests were ordered on all of Japan’s nuclear power plants, leading to a mass switch-off of power generation capacity. As a result the country has been forced to lean heavily on its contracted fossil-fuel suppliers, most notably Qatar, to ensure it can generate ample electricity to keep its economy afloat.

QaTaR aND jaPaN TRaDE NUMBERS• Qatar’s trade with Japan in 2011 was worth QR114 billion.• Trade between Japan and the six-nation Gulf Cooperation Council was valued at

QR590 billion in 2011, a 33 percent year-on-year increase.• Of all cars on the roads of Qatar, 70 percent are Japanese.• Qatar exported 15.8 million tonnes of LNG to Japan in 2011, a 44 percent

increase compared with 2010’s total.• It is just 16 years since the first shipment of LNG left Qatar’s Ras Laffan port, bound

for Japan.

Qatar energy minister Mohammed bin Saleh Al Sada said that the LNG trade remains the backbone of Doha’s relations with Japan in the energy sector at Qatargas’ annual reception in Tokyo. (Image Weber Shandwick).

DOha FlaRE REDUCTION PROjECT CutS EMISSIONS IN HALF

World Bank, a volume of gas equivalent to 25 percent of the United States’ annual consumption is flared globally every year.

CaRBON CREDITSUnder the CDM, industrialised countries

are able to earn carbon credits known as certified emission reduction (CER) units, which can be traded in emissions trading schemes, by taking part in emissions reduction projects in host countries. The idea is that environmentally damaging emissions can be cut where it is cheapest and therefore more cost effective to do so.

In the case of Al Shaheen, however, Doha itself earns the CERs, as opposed to Qatar acting purely as host to a second party. Two CDM projects are underway in Saudi Arabia, while the United Arab Emirates hosts eight.

Qatar has ratified the UN framework convention on climate change “and is committed to participate in international

The project was the first to be undertaken in the Gulf region under the United Nations (UN) clean development mechanism (CDM) and the only

CDM project in Qatar. Officials from both companies said that it would pave the way for more such projects – something that Doha is known to be keen on under the Qatar National Vision 2030.

Under the project, previously flared, or wasted, gas from oil wells at Maersk Oil’s giant Al Shaheen field 70 miles off the coast of Qatar is being captured and used to generate electricity, the Danish firm’s deputy managing director Sheikh Faisal bin Fahad Al Thani explained at a CDM workshop in Doha.

Al Thani said that flaring had been reduced to an absolute minimum, which he said was a rare accomplishment in the industry.

Gas flares are produced by burning off flammable gas released under high pressure by a range of industrial processes including oil and gas production and refining. Flaring contributes significantly to global emissions of greenhouse gasses and, according to the

Qatar Petroleum and Maersk Oil achieved a 50 percent cut in greenhouse gas emissions at Al Shaheen, pictured, between 2007 and 2011. (Image courtesy Maersk)

“Gas from oil wells at Maersk oil’s giant al shaheen field 70 miles off the coast of Qatar is being captured and used to generate electricity.”

ENERGy & RESEARCH

TheEDGE 29

ENERGy BRIEFFIRST RASGAS LNG CARGO ARRIVES IN THE UNITED KINGDOMThe first commercial cargo to be sold by Qatar energy giant RasGas to the United Kingdom’s (UK) South Hook liquefied natural gas (LNG) terminal unloaded and departed at the British port on 2 October, RasGas said. The Milaha Ras Laffan berthed the preceding day, and unloaded 2,950,000 MMBtu (million British thermal units) for supply to the UK natural gas market.RasGas marketing and shipping executive Khalid Al Kuwari said the agreement marked “the latest addition to RasGas’ growing portfolio in the European market. As Europe continues to work towards meeting CO2 emissions targets whilst meeting energy needs, we are seeing more interest in LNG as a clean fuel,” he added.

Doha-based energy giant Qatar Petroleum (QP) and Denmark’s Maersk Oil achieved a 50 percent cut in greenhouse gas emissions and a 90 percent reduction in gas flaring between 2007 to 2011 at their joint Al Shaheen gas-gathering and flare reduction project last month, reports Jamie Stewart

efforts to combat climate change challenges,” Qatar energy minister and QP chairman Mohammed bin Saleh Al Sada said.

“Our workshop is an excellent example of how academia and leading players in the energy and construction industry can join forces to develop ideas for a more sustainable economic development in Qatar,” Director of the Energy and Environmental Law Forum director Rudiger Tscherning commented.

MARKET WATCH • SPECIAL FOCUS • PERSONAL FINANCE • SPECIAL REPORT • BALANCE SHEET

FINANCE &ECONOMICS

alSO IN ThIS SECTION:• Special Focus: Simon Watkins writes that Qatar’s banking has a long way to go before it

can compete globally. (P.34)• Personal Finance: Adrian Bliss takes a look at Insurance cover and how planning for any

eventuality is in everyone’s best interests. (P.36)• Special Report: Thomas Bacon looks at Qatar’s liquefied natural gas supply targeting

developed and emerging economies. (P.38)• Balance Sheet: Yusuf Sayed takes a look at the new financial accounting

standard. (P.40)

Brought to you by:

QaTaR ECONOMy CONTINUES FaST ExPaNSION (P.32)Dheeraj Shahdadpuri discusses the latest figures released by the Qatar Statistical Authority on economic growth in the second quarter of 2012.

QATAR ECONOMY CONTINUES FAST EXPANSION

MARKETWATCH

TheEDGE32

The latest set of data released by the Qatar Statistical Authority (QSA) has revealed that Qatar’s economy grew by 11.9 percent (in current prices based on preliminary estimates) in the second quarter of 2012, as compared to the same period last year. Further breakdown of the data shows that the mining and quarrying sector, which constitutes nearly 55 percent of the economic activity, expanded by 8.2 percent during the quarter, whereas the non-hydrocarbon side of the economy grew by 16.9 percent. The impressive growth rate of the non-hydrocarbon sector is a clear indication that the economy is benefiting from the fact that greater importance is being given to diversify the economic base of the country. Also, the massive investment that is currently being undertaken for the 2022 World Cup is obviously supporting expansion of the non-hydrocarbon side of the economy. What is worth noting is that various sub-sectors within the non-hydrocarbon economy (manufacturing, transport and communication etcetera) have posted double digit growth, with the only exception being finance, insurance, real estate and business services sector which grew by 6.2 percent. However, this growth rate in itself is relatively strong given the state of affairs in this sector elsewhere around the world.

The economic expansion of the second quarter is particularly overwhelming given the fact that during the same period the global economy was reeling under the fear of Greece exiting the euro area that pushed economic growth elsewhere around the world lower. This is another sign that Qatar’s economy is proving its resilience during the global economic turbulence. To maintain the growth trajectory, Qatar government has planned to increase its budgeted spending by 28 percent to US$49.2 billion (QR179 billion) in the current fiscal term, whereas revenues are budgeted to increase to US$ 56.6 billion (QR206 billion). To add to this, the government has already embarked on its National Development Strategy under which it is estimated that US$226 billion (QR822 billion) will be spent until 2016 across different sectors. Hence given such strong investment plans, it could be easily said that Qatar, in all probability, will continue to remain a growing economy in the world, which is still recovering from the ill effects of the recent recession.

GlOBal ECONOMIC GROWTh FORECaST SlaShEDThe International Monetary Fund (IMF) in its latest quarterly

World Economic Outlook assessment has cut the global economic growth forecast, citing persistent weakness in the United States (US) and euro area. The economic growth for the current year is projected to now reach 3.3 percent and 3.6 percent next year.

BY DHEERAJ SHAHDADPURI

As per its earlier forecast, current year growth was projected to average 3.5 percent, which was anticipated to accelerate to 3.9 percent next year. Despite the lower economic growth projections, it remains to be seen that whether the recently witnessed economic turbulence was just a temporary glitch, as the recovery was always bound to be sluggish or that a permanent downslide is right around the corner.

However, with the latest round of extraordinary measures taken by the Federal Reserve and the European Central Bank (ECB), it looks like a further deterioration of global economic activity might be curtailed in the near term. We are already witnessing some signs of improving confidence in the financial markets, which obviously is driven by better than expected economic data coming especially from the US. The back-to-back monthly increase in retail sales reflects increased consumer confidence, which is having a further impact on the manufacturing activity that has turned the corner in September after witnessing contraction for previous three months.

In the euro area sentiments have stabilised a little after ECB announced its Outright Monetary Transaction programme, which aims at buying sovereign bonds from secondary market provided governments of indebted nations continue to move ahead with their fiscal rebalancing measures. However, it is widely expected that if economic conditions in Spain remain strained, the country could seek a line of credit from European Stability Mechanism, which would allow ECB to start buying its bonds. But even if this materialises, we should not witness long lasting turbulence on the financial markets, as this event will enable the policymakers to tackle the debt crisis by paving the way for harmonization of fiscal and monetary policies. And it should not be forgotten that it is this integration that economic doctors have long recommended as the only way a single currency union can work successfully.

The Qatar Statistics Authority announced that Qatar’s economy grew 11.9 percent in the second quarter of 2012.

SLI 60 Ad _ Edge Magazine_Final NEW.pdf 1 3/27/12 4:32 PM

QR201.3 billion. It accounts for the majority of loans in Qatar, and its share has grown from 22 percent (QR35.9 billion) in 2007 to 42 percent (QR201.3 billion) as of August 2012. Indeed, according to the central bank, the financing of large capital investments in developing the country’s infrastructure has been the key driver of public sector loan growth, and government agencies, semi-government agencies and large corporates. Engaged across economic sectors, these are expected to continue to be the main driver of loan growth, given the large development programme and infrastructure projects underway and to be implemented in the short to medium term.

GOVERNMENT INFLUENCEIn many ways, Qatar’s larger banks are

acting as an arm of the government’s overall social and economic strategies, highlights Sam Barden, chief executive officer (CEO) of SBI Markets in Dubai, functioning as conduits for various infrastructure projects in the same sort of way as, for example, the European Investment Bank (EIB), German Development Bank (KfW), or the big Japanese banks,

According to a report issued by the Qatar National Bank (QNB) at the end of September, pretty much everything in the state of

the Qatari banking sector is looking highly positive. “While the banking sector in several countries across the globe continues to face difficulties, Qatar’s banking sector continues to maintain its growth momentum across a range of performance indicators, while at the same time maintaining good asset quality,” are the precise words used at the top of a recent QNB press release on the subject. The key question here is to what degree this success is actually only a function of the country’s fabulous hydrocarbon wealth (an environment in which it could be argued that virtually any bank could prosper, even Spanish ones) or whether it is a product of a truly outstanding banking system per se?

In its most recent judgment on Qatar’s banking system as a whole – including both the conventional and the Islamic elements – major ratings agency Moody’s certainly highlighted that there is limited pressure on

SPECIALFOCUS

QaTaR’S BaNKS CHALLENGE tO COMPEtE GLOBALLy

asset-quality and healthy capitalisation levels, as well as stable deposit bases, significant liquidity buffers, and strong earnings potential – very good. This view is backed up, of course, by the headline figures: the overall assets of banks in Qatar grew by 10.7 percent during the year up to August 2012 to reach QR772.6 billion, compared to QR698.0 billion at year-end 2011, according to the latest data by the Qatar Central Bank (QCB). Asset growth was driven mainly by the increasing loans that grew by 18.5 percent to QR479.7 billion for the sector.

On the other hand, though, these supportive factors are counterbalanced for Moody’s by a high degree of dependence on government-related business and on the domestic economy. “The economy is undiversified and heavily reliant on the oil and gas sector, and credit-risks relating to exposures to the construction and real estate sector,” underlines the agency. Again, the official figures from the QCB bear this out: the public sector, and principally government agencies and semi-agencies, was the main driver of loan growth, increasing by 35 percent in the year to August 2012, to

Qatar’s banking sector continues to maintain its progression due to the banking’s government dependence-related business and its domestic economy. However, Simon Watkins writes that Qatar arguably has a long way to go before it can compete globally.

service options and are repeatedly referred from one department to another. “Secondly,” adds Garbois, “many bank processes in the GCC are still manual, involving a multitude of documents and layers upon layers of decision makers. Redesigned processes can yield significant efficiency improvements, in some cases reducing resource requirements by fifty percent.” Finally, he concludes on this point, outsourcing and offshoring provide options for centralising business processes, improving service levels, and increasing control, and these are still a relatively new concept in the GCC, although some regional banks have successfully outsourced less complex functions to India and Egypt.

“A structured approach to procurement – analysing spending and identifying savings for both strategic and operational costs – can reduce costs by up to thirty percent in some categories” closes Garbois.

SPECIALFOCUS

TheEDGE 35

“Qatar’s conventional banking practices are like those in the 1950s in the United states or United Kingdom,” – sam Barden, Ceo of sBi Markets in Dubai.

French banks in the 1980s and 1990s, and the big four Chinese banks. “Unfortunately, this type of banking style does not normally tend to turn out well, either for the banks – which often function below par in a pure banking sense, or the public ends up bailing them out,” he says. Indeed, Barden adds, state-directed lending, as has been occurring in Qatar as well in recent years, has – arguably, although not much – has been a root cause for the fundamental deterioration in a legion of such banking operations (numerous bankrupt Japanese banks that were later forced to consolidate). The top four Chinese banks, also have used smaller banks as similar state conduits, to such a degree that a recent report by PwC overdue loans at China’s top 10 banks soared by 333 percent in the first six months of 2012 to CNY489 billion (QR283 billion).

Clearly, given the slowing state of the country’s economy, it is a lot more likely that this mountain of loans will become officially non-performing than not. And China, of course, had and has a lot more natural resources across the board than Qatar. We mentioned Spain earlier, and the single most important factor in the swathes of red figures that have hit their balance sheets – investment in the real estate sector – is evident as well in those of Qatar’s banks, even by official central bank figures.

“Loans to the real estate and construction sectors increased by 10.2 percent during the year up to August 2012, as activity in this sector continues to pick up,” states QNB.

So, strip out the sovereign wealth, and how does Qatar’s banking system compare to the better of its international banking peers? Certainly, it was not subject to the same casino-style of banking that was highly prevalent in conventional banks in the developed world. However, when comparing like with like, conservative conventional banks in the West with conventional banks in Qatar – the latter appears to be lagging, thinks Barden. “Qatar’s conventional banking practices are like those in the 1950s in the United States or United Kingdom,” he says, “they have yet to catch up, because with Qatar’s wealth they don’t have to do anything better.”

For a start, says Cyril Garbois, head of Middle East Financial Institutions Practice for AT Kearney, in Dubai says, the number

of banking products and revenue per customer in the Gulf Cooperation Council (GCC) remains relatively low compared to developed markets. “For banks to increase their share of wallet, customer satisfaction is key, yet studies show that GCC banks generally do not seem to consider customer satisfaction a priority,” he says. Based on AT Kearney’s research, the GCC banking sector (and thus Qatar’s) has three main areas upon which to focus to improve customer satisfaction levels. Firstly, underlines the firm, salespeople are often poorly prepared and have little understanding of the products they are selling. This is even more pronounced in Islamic banking, where customers may require additional explanations of Shari’ah-compliant product structures. “There is a need to improve responsiveness, as customers do not receive a call-back within the promised time, if at all,” highlights Garbois. Additionally, customers often do not receive important information about a product before purchase – for example, discovering extra charges after a sale – and this typically results in severe, lasting damage to brand loyalty, says AT Kearney.

To compound this negative profile, customers encountering problems often have limited call centre or website

QaTaR BaNKING SECTORS aSSETS ( 2007-12*)

Source: QCB and QNB Group analysis

total in US$ bn

54%

58%62%

22%

20%

11%

5%2%

14%

3%2%

12%23%9%

2%

2007

81

2011

192

*Aug 2012

212

23.9%CAGR

10.7% Other AssetsReservesDue from Banks

Investments

Loans

Another key area of insurance for all expatriates concerns medical and health cover. Those with a full residency permit in Qatar can apply for a Health Card, which entitles you to certain free treatment at health clinics. While this is subsidised by the government, expatriates can be charged when being referred on to a hospital consultant and for subsequent treatments.

To begin with, check whether you have private health insurance cover included in your remuneration package. If you have a family, double check what cover is extended to them. Be sure to find out whether the cover provides for a wide range of medical treatment or does it only swing into action in the event of an emergency hospitalisation?

Expatriates must pay close attention when selecting medical insurance. A good plan is to draw up a list of your family’s likely needs and check that the individual allowance for each treatment is in line with typical costs for treatments in Qatar.

Careful assessment of your needs is crucial to ensuring you end up with the right product and cover to suit your lifestyle.

Adrian Bliss is a senior financial consultant at Guardian Wealth Management Qatar

INSURaNCE: HAvE yOu GOt It COvErED? Insurance cover cannot prevent the worst from happening, but it will provide expatriates some support if it does. It also offers peace of mind that you will not leave loved ones in the financial lurch writes Adrian Bliss.

PERSONALFINANCE

We all need a certain level of insurance and expatriates are no exception, so it could pay in the long run to

get into the habit of annually checking whether you have enough insurance cover in place. Also be mindful that existing life cover taken out may not be valid due to your relocation.

Life cover has to be top of most expatriates’ essential policies. When determining the level of cover you need, you should check out what policies you have in place already. For example, you may have some cover from your employer, you might also find life cover included in another financial product – such as a mortgage or another investment. Once you have assessed what cover you already have, you can then plug any gaps.

Generally the level of cover you need to go for should be enough for your family to continue with their existing lifestyle and be debt free. So look at all your outgoings – future as well as existing. For example, if you have young children, remember to calculate for their school fees.

The cheapest and most basic type of life cover is level term assurance. It pays a fixed and guaranteed lump sum if the person

insured dies at any time during the term of the policy. The premiums can be either fixed or they can increase in line with inflation.

Another popular form of life cover is whole of life assurance. This will give a guaranteed pay out to your dependents at any time up until death occurs. This is a more expensive form of cover due to the guaranteed pay out, but can also be used in tax planning due to the investment element. Your premiums buy units in an investment fund offered by the insurance company. How much the policy grows will depend on how much is being deducted to pay for the whole of life cover.

Increasingly, expatriates are turning to critical illness cover, which is designed to replace your income should you suffer an illness leaving you unable to work for a certain period. Particular attention needs to be paid to terms and conditions the policy can and cannot pay out against, as well as the illnesses covered.

It is also worth bearing in mind that most insurance cover is designed to pay out so long as premiums are kept up without interruption. Also consider what options you have to pay premiums. What is the maximum level of cover you can opt for?

TheEDGE36

Scratch & Win Promo Adv Edge 221012 FINAL new.pdf 1 10/24/12 4:29 PM

With 79 million tonnes of liquefied natural gas (LNG) produced every year, Qatar is continuing to secure long-term and short-term supply deals in major markets, targeting both developed and emerging economies.

On September 12, the international press reported Qatargas was to supply more than 20 million tonnes of LNG to Japan in the short term to bolster the latter’s energy security after last year’s earthquake. Japan is the world’s largest buyer of LNG, and its imports have soared since the 2011 earthquake triggered the Fukushima nuclear disaster, leading the country to shut down all its nuclear plants. Qatar has been one of the main beneficiaries: official Japanese figures suggest that the Gulf state’s exports to Japan grew from less than US$10 billion (QR36 billion) in 2009 to US$21.6 billion (QR78 billion) in 2010 and US$30.05 billion (QR1 trillion) in 2011.

In June, Qatargas announced it had signed a long-term deal with Tokyo Electric Power Company (TEPCO) for LNG supply. TEPCO is Japan’s largest LNG buyer and was one of Qatargas’ first LNG customers. It will now double its purchases from Qatargas to two million tonnes per year. The Japanese deals reinforce Qatar’s position both as a reliable long-term supplier and as a provider with the capacity and technology to respond quickly to short-term needs.

CNOOC, the third-largest Chinese oil company and owner of the Zhejiang Ningbo terminal, buys two million tonnes per year from Qatar, while PetroChina, Asia’s largest oil and gas producer, receives three million tonnes. LNG exports to China may rise further in the coming years as the country’s energy needs intensify.

Qatargas, which has an annual LNG output capacity of around 42 million tonnes, currently exports to 21 countries, and the firm is looking to increase that number.

In April, India’s commerce ministry said it aimed to double its LNG imports from Qatar to 15 million tonnes over the next three to four years, as well as providing three million tonnes in short-term supply to address immediate energy needs. Likewise, in February South Korea signed a 20-year deal with Qatar’s RasGas – the second largest LNG producer in the world – for two million tonnes of supply per year.

The many export deals are the fruit of Qatar’s large-scale investments in LNG capacity over the past two decades. The long-term agreements also reflect an awareness that the global liquid

Exporting ENERGY

SPECIAL REPORT

gas sector may be in a transitional stage, with supply expected to increase substantially over the next eight years – by up to 250 million tonnes per year, according to the International Energy Agency.

This could bring prices down and remove their link with crude oil. Qatari producers usually prefer contracts that set prices according to those of crude oil, on an energy-equivalent formula. Australia and the United States (US) are both investing particularly heavily in LNG, with the US potentially being able to produce 45 million tonnes per year by 2020.

“The emergence of gas in other parts of the world is changing the global dynamics and landscape of the gas industry,” Marjo Louw, the country president of South African energy firm Sasol in Qatar, told OBG. “The US, for instance, stopped importing LNG and may become an exporter.”

Pricing structures may well change over the coming years, in which case Qatar’s long-term deals are wise forward-planning. But even if the link to crude does loosen, increases in capacity reflect an expectation for rising demand. Qatar, with its huge capacity, is well placed to meet that demand – as well as to provide emergency supply where and when needed.

Thomas Bacon is an analyst at Oxford Business Group.

By Thomas Bacon

TheEDGE38

edge(21x27)boss new.pdf 1 10/23/12 5:28 PM

BALANCE SHEET

ThE NEW aCCOUNTING StANDArD FOr INvEStMENt IN rEAL EStAtE

The Financial Accounting Standard 26 (FAS 26) on Investment in Real Estate, issued by the Accounting Organisation for Islamic Financial Institutions (AAOIFI) in June 2012 proposes a new and clarified approach of accounting for investment in real estate,writes Yusuf Sayed.

value can be adopted. However, for all other matters FAS 8 will apply.

Ijarah Muntahia Bittamleek assets are not covered under the scope of this standard, which effectively means the choice to fair value such assets is not available and FAS 8 continues to apply. The standard also does not apply to investment in specialised assets in real estate related to agricultural activities, and rights and resources related to mining and exploration activities such as oil, natural gas etcetera.

DEFINITION OF ThE NEW STaNDaRDThe previous definition has largely been

retained, but significantly expanded on. Investment in real estate is property held to earn periodical income or for capital appreciation or both, rather than for use in the production or supply of goods or services or for administrative purposes (owner occupied real estate).

The guidance to the standard provides detailed discussions and examples of application in the hope of bringing consistency in its application. The standard provides for cost recognition outlines and expanded guidance for classifying those costs.

The cost of a constructed or under construction property includes any expenditure that is directly attributable to bringing an asset to the location and the condition necessary for it to operate in the manner intended by the management.

Unlike the previous interpretation under FAS 17, the new standard does not provide different measurement models for investments based on the source of funding. However, the new standard continues with the requirement to apportion gains, losses, income and expenses taking into consideration the split between the owners’ equity and equity of the investment account holders.

BALANCE SHEET

TheEDGE 41

the aim of the new accounting standard is to reduce complexity, and increase transparency and consistency in accounting of real estate investments.

The new standard provides separate and detailed guidance on accounting for investments in real estate given the nature and complexity of such investments.

The standard does not significantly change the way investments in real estate are accounted for, but does provide further clarifications and added guidance. The key difference from the existing standard is the treatment of fair value changes. On the date of application, this would lead to recognising the fair value gains by re-measuring investments in real estate in equity rather than the current practice of recognising the fair value changes in the income statement.

The aim is to reduce complexity, and increase transparency and consistency in accounting of real estate investments. The implications of the standard have to be quickly assessed by the entities having significant real estate exposures and the standard requires retrospective amendment, which means entities also have to consider the prior year’s fair value movements to assess the implication on their financial statements.

AAOIFI issued the standard on Investment in Real Estate in June 2012. The new standard provides more detailed and expanded guidance on definitions, recognition, measurement and disclosures of investment in real estate as compared to the limited guidance within the previous Financial Accounting Standard (FAS) 17 Investments. The key difference from the existing standard is the treatment of fair value changes. The other changes suggested by the new standard represent changes in the nature of clarifications to the current requirements of the standard and entities reporting under AAOIFI are not likely to be substantially affected by the adoption of this new standard. It is probably also important to note the standard covers only direct investment (in real estate in other

words land or building or property under construction) and excludes exposure through shares and financial instruments.

INITIal RECOGNITION OF FaIR ValUE The investment in real estate is initially

recognised at its cost including any directly attributable expenditure. The standard aims to provide a clarified definition on costs and guidance for differentiation between owner occupied, inventory and investment in real estate. It also makes provision for guidance of classifying assets under construction.

An entity will classify whether the investment in real estate is being held-for-use or held-for-sale. For held-for-use investments, an entity selects either the fair value model or cost model as its accounting policy, which should then be applied consistently.

The standard however does not permit under construction assets to be measured at fair value until the construction is completed. Any impairment of investment in real estate should be evaluated on an assets-by-asset basis and not on a portfolio basis each reporting period starting from 1 January 2013.

ThE SCOPEThe new standard applies to each level

of the financial statements separately, which means both consolidated and individual financial statements. For example if a subsidiary holds investment in real estate, the guidance of this standard will apply to investments in the real estate in preparation of the consolidated financial statements.

For operating Ijara assets this standard applies for measurement of investment in real estate held with the intent of earning periodical consideration, which is defined in Financial Accounting Standard FAS 8 as operating Ijarah under one of two methods, the cost or fair

Luxury-inspired hoteL-styLe faciLities of aL Gassar resort makinG it an iconic residentiaL destination

l Gassar Resort, Doha’s iconic luxury waterfront destination, is the ideal

choice for tenants seeking the luxury-inspired hotel-style facilities of the resort. Setting a new standard in the residential and hospitality sectors, Al Gassar Resort adds momentum to ongoing efforts of enhancing Qatar’s reputation as a premier luxury destination.

Al Gassar Resort’s centerpiece, The St. Regis Doha, has been the hotel of choice for the world’s most discerning travelers with its selection of 336 luxury guest rooms, including 70 suites, offering full butler service, and two Presidential Suites with two and three guest rooms, respectively. Residents at Al Gassar Resort can also enjoy the newly opened restaurants at The St. Regis Doha and relish a unique culinary experience

with restaurants such as Astor Grill, Hakkasan and Diwan Al-Sultan Ibrahim.

Owned by Resorts Development Company (RDC) and managed & developed by Alfardan Group, Al Gassar Resort is a posh waterfront community that offers residents and guests a wide range of value-added amenities, including 24/7 customer service, VIP concierge, laundry and dry cleaning,

ample car parking, private limousine services, advanced around the clock security, café lounge and restaurant not to mention unparalleled recreation and leisure facilities. It also enjoys close proximity to key areas in Doha such as West Bay’s business district & Doha Exhibition Centre in addition to Doha’s cultural hub Katara making Al Gassar Resort perfect for both business and pleasure.

Mohamed Sleiman, Assistant COO, Resorts Development Company, said: “Ever since its opening, Al Gassar Resort has been considered a new landmark in luxury and sophistication in Doha as this waterfront destination provides unparalleled hospitality, residential, social and leisure amenities that ensure a truly luxurious living experience for all residents and guests. The 5-star hotel-like experience and personalized services offered at Al Gassar Resort, set the standard in the residential and hospitality industry, making it Doha’s much sought after residential destination.”

With its main strength being located and positioned directly on Doha’s pristine coastline, Al Gassar Resort is a key project that serves the rising demand for hotel-style facilities and services in Qatar, while reinforcing Doha’s status as one of the most dynamic cities in the region. Al Gassar Resort offers a distinctly unique lifestyle with its luxurious amenities that aim to pamper and exceed expectations of each resident and guest. Equipped with a complete range of hotel-like facilities, it offers exclusive membership to bachelors, business executives and families who are looking to enjoy its promise of a genuinely luxurious waterfront lifestyle in Doha. Al Gassar Resort offers a choice of 422 beautifully furnished, spacious apartments along with rooftop penthouses and terraces, all equipped with top-of-the-line furnishing and appliances and balconies overlooking Doha’s West Bay and the Arabian Gulf. The apartment designs are ideal for small families or couples and also for large families. The waterfront community also includes Al Gassar Ballroom, comprising of a 1,300 square meter ballroom and smaller function areas with a unique design, opulent furnishing and exquisite finishing as well as The St. Regis Hotel Doha, providing direct access to the luxuries and world-class facilities of the high-end hotel.

A

24-10-12•AFP-Mag Ad-Edge Advertorial• size=42x27cm•printing=4col.sep.

COVERSTORy

In late November Doha hosts the United Nations Climate Change

Conference. Can ‘COP 18’ build on the successes of the previous conference,

held in South Africa last year – or will negotiations stall again as they

so often have at previous events? Mark van Dijk goes back to trace the history of climate change negotiations

around the world and speculates on what this gathering of world powers

means both for the State of Qatar and the health of the planet itself.

COP 18: POLITICS AND PROTOCOLS

AS QATAR HOSTS THE WORLD’S LARGEST

ENVIRONMENTAL SUMMIT LATER THIS MONTH,

THEEDGE TAKES A CLOSER LOOK AT WHAT TO ExPECT

COVERSTORy

45TheEDGE

If you had been in the city of Durban in South Africa on the hot and humid morning of December 11, 2011, you would have felt a buzz of optimism around the city. In the early hours the

17th session of the Conference of the Parties (COP 17) to the United Nations Framework Convention on Climate Change (UNFCCC) had concluded in the South African port city with an historic agreement on a legally binding deal to limit global carbon emissions. The accord would, for the first time, include all major emitters of greenhouse gases.

“What was achieved at 3.10 am was another stepping stone on a tortuous route to a world agreement on preventing climatic catastrophe,” read an editorial in that morning’s edition of Durban newspaper Daily News.

“The outcome in Durban is a coup for Africa,” a delighted South African President Jacob Zuma said at the time. “Issues that had

For the Mena region – and for Qatar in particular – the Cop 18 summit could not have come at a more crucial moment. the question remains, though: will the Doha talks bring about more real solutions?

taken so long to resolve have been resolved on our soil.”

It didn’t take long, though, for the celebrations to die down and the harsh realities of climate change to hit home. Within a week of the Durban summit, reports emerged that crop farmers in South Africa’s North West province had only managed to

plant on 45 percent of arable land due to a lack of rainfall. Maize supplies plummeted, food prices rose. South Africa faced another summer of drought, and indeed, many places the world over faced another year of the purported consequences – thanks in part to industrial emissions – of climate change and global warming and its effects on crop yields, water shortages and natural disasters.

Nevertheless the South African COP 17 event was considered one of the more accomplished of its ilk. Former Durban city manager Michael Sutcliffe played a central role in organising the 2011 summit, COP 17. “It was an undoubted success,” he says. “The Durban Platform was agreed upon and a commitment made to continuing with the Kyoto Protocol, among other decisions.”

Now, as Doha prepares to host this year’s summit, from Monday 26 November to Friday 7 December, Sutcliffe is in Qatar providing advice to COP 18 project director, Reda Ali. “This is a very complex event to organise and the project director’s teams are doing a great job to ensure that the logistics are in place,” Sutcliffe says. “I do believe the State of Qatar has a great opportunity to not just take the negotiations forward, but to play a role in bridging the divides which often bedevil such complicated negotiations.”

a TROUBlED hISTORy“Governments have promised to cut

greenhouse gas emissions and help the poor and vulnerable adapt to climate change,” UNFCCC executive secretary Christiana Figueres said in September at a pre-COP 18 meeting in Bangkok, Thailand. “They know they must implement these promises fully,

Delegates coming to COP 18 can expect hours of conferences and meetings aimed at resolving many of the world’s climate change problems, in particular carbon emissions – though perhaps not to the degree of the negotiations at COP 17 in Durban, South Africa pictured here, some of which extended past midnight. (Image Reuters/Corbis)

1995 COP 1 (BERLIN, GERMANY) The first Conference of Parties to the UNFCCC meets.1996 COP 2 (GENEVA, SWITzERLAND) The parties agree that the world faces significant, often adverse impacts from climate change.

1997 COP 3 (KYOTO, JAPAN) The Kyoto Protocol sees most industrialised nations agreeing to reduce their greenhouse gas emissions.

1998 COP 4 (BUENOS AIRES, ARGENTINA) Disagreements around the Kyoto Protocol continue.1999 COP 5 (BONN, GERMANY) A technical meeting sees little diplomatic progress.2000 COP 6 (THE HAGUE, THE NETHERLANDS) Talks collapse as the parties fail to reach a solution.

2001 COP 6 (BONN, GERMANY) Talks resume, but with the US having rejected the Kyoto Protocol in the meantime.2001 COP 7 (MARRAKECH, MOROCCO) Negotiations pave the way for ratification of the Kyoto Protocol.

2002 COP 8 (NEW DELHI, INDIA) Progress stalls as major players Russia, the US and Australia balk at signing the Kyoto Protocol.

2003 COP 9 (MILAN, ITALY) Developing nations are given an allowance to help them adapt to climate change.2004 COP 10 (BUENOS AIRES, ARGENTINA) The focus remains on developing countries.

2005 COP 11 (MONTREAL, CANADA) The Kyoto Protocol comes into force.2006 COP 12 (NAIROBI, KENYA) The focus returns to developing countries.2007 COP 13 (BALI, INDONESIA) Negotiations start on a successor to the Kyoto Protocol.2008 COP 14 (POzNAN, POLAND) Negotiations continue.2009 COP 15 (COPENHAGEN, DENMARK) No binding agreement is met.

2010 COP 16 (CANCUN, MExICO) A global Green Climate Fund is adopted.

2011 COP 17 (DURBAN, SOUTH AFRICA) All countries finally agree to a legally binding deal, which will be finalised by 2015 and take effect in 2020.

IN 1992, THE UNITED NATIONS CONFERENCE ON ENVIRONMENT AND DEVELOPMENT (OR EARTH SUMMIT) IN RIO DE JANEIRO, BRAzIL, SEES 154 NATIONS AGREEING TO A VOLUNTARy, NON-BINDING AIM TO REDUCE GREENHOUSE GASES.

TheEDGE46

“Qatar has a great opportunity to play a role in bridging the divides that often bedevil these conferences.” – Michael sutcliffe, senior advisor, Cop 18.

COVERSTORy

raise their efforts before 2020 and redouble those efforts again after 2020. Soon, in Doha, they must show implementation and set the pace towards adopting a new, universal climate agreement by 2015. The next three years are set to drive the next two decades of the international response to climate change.”

If the past two decades are anything to go by, those next three years are going to bring a deluge of diplomatic disagreements and legal wrangling. Since the Earth Summit in 1992, United Nations (UN) member states have spent COP after COP trying to balance the economic demands of today with the environmental consequences of tomorrow.

COP 18, it seems to the outside observer, will be no different.

To get a sense of how sensitive these negotiations can be, consider the Kyoto

Protocol. Negotiated at COP3 in 1997, the treaty only came into effect at COP 11 in 2005. Linked to the UN Framework Convention on Climate Change, the Protocol sets binding targets for 37 industrialised countries and the European Community for reducing greenhouse gas emissions. These, according to the treaty, amount to an average of five percent against 1990 levels over the

five-year period from 2008 to 2012. “The major distinction between the

Protocol and the Convention,” according to the United Nations’ official report (their emphasis), “is that while the Convention encouraged industrialised countries to stabilise GHG emissions, the Protocol commits them to do so.

“Recognising that developed countries are

WhaT TO ExPECT aT COP 18 This month’s summit in Doha could go one of two ways. A successful meeting would see all parties agreeing to the details of a second period of commitment to the Kyoto Protocols, and finalising the deal for Long-Term Climate Action. One potential stumbling block – which emerged at informal, pre-COP 18 talks in Bangkok in mid-September – is the tension between the United States and Europe Union on one side, and Brazil, Russia, India, China and South Africa (the so-called BRICS states) on the other, over the exact meaning of the two sides’ common but differentiated obligations. That aside, the major focus in Doha will be on establishing a work plan for 2013 and 2014, which will ultimately lead to the new legal agreement (agreed to in principal at COP17) on climate change.

Will there be the kind of protests at COP 18 Qatar by environmental activists that often characterise these kinds of summits in open, democratic countries? (Image Reuters/Corbis)

TheEDGE48

COVERSTORy

principally responsible for the current high levels of GHG emissions in the atmosphere as a result of more than 150 years of industrial activity,” the report goes on, “the Protocol places a heavier burden on developed nations under the principle of ‘common but differentiated responsibilities’.”

At COP17 in Durban, governments noted with “grave concern” the gap between the current pledges to curb emissions and the reality of what was required to limit the increase of global average temperatures to, at the most, two degrees Celsius.

Until COP17, China – ranked by the UN as world’s biggest carbon dioxide (CO2) emitter – and India (ranked fourth), had been exempt from constraints because of their classification as ‘developing countries’. Meanwhile, the United States (ranked second) has refused to sign the Kyoto Protocol, while Canada (ranked eighth) has withdrawn its commitment, and both Russia (fifth) and Japan (sixth) have officially announced that they will not join the second commitment period.

DEalS aND DEaDlOCKSIt took two weeks of intense negotiations

before a deal was struck at COP 17 in Durban – and even then, the summit had to add an extra day. Sutcliffe, however, does not expect similar difficulties at COP 18 in Doha. “No, I wouldn’t think so, primarily because

Durban focussed on setting the framework for the next few years and that made things more difficult,” he says. “This is not going to happen in Doha, but there are also very complicated and very practical issues which must be resolved in Doha. One thing is that you can never predict how negotiations go and so I would not say never would there be another extension like Durban.”

A recent report by the analytics firm ISpy Publishing shows that up to 630,000 terawatt hours of solar energy are going unused in the Middle East North Africa (MENA)

region’s deserts; while British risk analysis consultancy firm Maplecroft recently ranked Qatar as the second-highest “extreme risk” country (behind Bahrain, and ahead of Kuwait and Saudi Arabia) on its annual Water Stress Index. With water in such short supply and with so much potential solar power going to waste, climate change management is becoming a key issue in Qatar’s future.

“This is a challenge for the world as a whole,” says Sutcliffe, “and while Qatar is a small country, it has a great opportunity to provide leadership over the next year in taking the climate change negotiations forward. Its work on building a knowledge economy, where the green sector (from energy to water to food and sanitation) is critical, is of note here. Actively working to get communities mobilised as they have to find ways to both do everything possible to mitigate climate change and adapt to the effects of climate change is going to help the Middle East and the world do what must be done. These are all issues ensuring that we balance economic, social and environmental priorities and the Middle East must continue to contribute towards global solutions to this major challenge.”

For the Middle East and North Africa region – and for Qatar in particular – the COP 18 summit could not have come at a more crucial moment. The question remains, though: will the Doha talks bring about more real solutions, or will it all be more deadlocks?

At a pre-COP 18 meeting in Bangkok, Thailand, UNFCCC executive secretary Christiana Figueres urged world governments to make good on their promises to tackle climate change challenges when they meet in Doha later this month. (Image Corbis)

SUBSCRIPTION FORM 2012

TheEDGE is Qatar’s dedicated monthly business magazine.

TheEDGE incorporates a mix of industry news and analysis, in depth features, special interviews with key business decision makers, economic insight and market activity reports, and tips for how you can improve your day-to-day business operations.TheEDGE is delivered straight to the door of the targeted business community. To ensure you keep up-to-date, with what is happening in Qatar’s business landscape, please fill in the subscription form (below) to receive TheEDGE on a monthly basis.Subscription is FREE (in Qatar). Forms are to be addressed to the Subscriptions Department at:

theeDGesubscriptions Department Firefly Communications11th Floor, Jaidah towerpo Box 11596Doha, Qatar

Last Name : First Name:Address:

Company:Designation:PO Box:Area Code:City:Country:

Tel:Email:

Date and Signature:

SUBSCRIPTION

49TheEDGE

BUSINESS INTERVIEW

water security, Dr. Mohtar is well positioned to steer QEERI toward its aims.

“I was very pleased and honoured to be a member of the Water Security Council since 2009, and this year I will be joining the Climate Change Security Council in the World Economic Forum,” says Dr. Mohtar. “One of the things that I was able to contribute to this water-energy-food Nexus as part of the World Economic Forum Water Agenda Council, and that was published by a group of us in the council. It was presented in January 2011. The beauty about this is that I think the core of it is inter-connectedness between water security, energy security and food security. We knew that conceptually, but to promote it at that stage has been very effective; where policy makers are now considering water footprint when they are designing their energy security plans and energy footprint when looking into water security, simply because these resources are very much interconnected.”

instrumental in the formation of QEERI last year, as executive director.

Based in Education City in Doha, QEERI – whose motto is “From Carbon to Creativity” – was created to launch research programmes in energy and environment, including solar energy and environmental assessment research programmes. QEERI also seeks to ensure clean air and water and to, among other goals, promote human resources in the country in terms of research and development (R&D) solutions in making Qatar’s hydrocarbon resources more sustainable and environmentally friendly. Part of its mandate is also to investigate alternative energy options, and to study what is known as the ‘water-food-energy nexus’.

With his experience at Purdue and a member of the World Economic Forum (WEF) Global Agenda Council on Water Security and Climate change, author of more than 200 peer reviewed papers, and member of several international advisory boards on

Before coming to Qatar, Dr. Mohtar, who originally hails from Lebanon, spent 16 years as an Environmental and Natural Resources Engineering professor

at Purdue University in Indiana in the United States. Here much of his main focus was on water resources and modelling, which is essentially studying and recommending ways and means to more effectively utilise natural fresh water for public and private distribution and consumption. In 2009, at Purdue, Dr. Mohtar was the inaugural director of the Global Engineering Program, which he calls “an integrated programme that will help with education research and community engagement as a model for global engineering”

Armed with these impressive credentials, the soft-spoken, grey-bearded Dr. Mohtar then became involved with Qatar Foundation and the organisation’s chairperson, Her Highness Sheikha Moza bint Nasser Al Missned in 2005, ultimately becoming

BUSINESS INTERVIEW

The Qatar Environment and Energy Research Institute (QEERI) was launched January 2011 and is a member of Qatar Foundation. Leading QEERI’s quest is its executive director, Dr. Rabi Mohtar who spoke to TheEDGE about Qatar’s leadership in promoting a more sustainable future, and what inroads QEERI is making to this effect, including a sustainability research portfolio that will be highlighted during COP18 in Doha in late November.

lEaDING QaTaR’S ENErGy QuESt

QATAR ENVIRONMENT AND ENERGY RESEARCH ExECUTIVE DIRECTOR DR. RABI MOHTAR DISCUSSES THE COUNTRY’S AMBITION FOR A MORE ENVIRONMENTALLY RESPONSIBLE FUTURE

TheEDGE 51

of Environment are being proactive in becoming involved in finding solutions to the environmental challenges Qatar faces.

“I am not justifying but stating facts,” he then defends the country’s reputation for high emissions, at least in part being skewed by the statistics. “But Qatar is penalised with these figures because it is a small country. If you look at the denominator, which is the number of population, which is very small, and because it is an oil and gas producing nation, the denominator is very high. So that is why the numbers do not reflect the reality.”

CHALLENGES AHEAdWith such a vast set of challenges ahead,

prioritising in the QNRS, says Dr. Mohtar is, well, a priority. And the challenges in meeting these challenges include not only infrastructure, but also human resources, which is one of the reasons QEERI as part of its broader mandate is also focused on building the capacity of young Qatari scientists. “One of our signature programmes,” adds Dr. Mohtar. “Will be alternative energy. There are other areas, such as environmental assessment, but our biggest thrust with the research programme will be with solar energy research and its application to solar desalination, for example.”

With research and development, and indeed potential commercialisation of solar energy resources seeming increasingly likely in Qatar through the efforts of companies such as Gasal/QSTec (who are developing a local solar energy plant) and Chevron/Green Gulf (developing a solar test site), it is natural to wonder where QEERI fits into the framework.

“Because we have different mandates, we have different roles, explains Dr. Mohtar.

GROWING THIRSTIt is of course no secret that the Middle

East suffers from chronic water shortages, affecting agricultural and industrial output, and the output and usage of energy, all of which undermine regional stability.

“My projection is,” concurs Dr. Mohtar, “especially with the Arab world, is that we are heading for a head on crash, and it is not only about water security. It is about economic meltdown…most of our water, over 75 percent goes into food production and yet we don’t have enough water to meet our own needs and on top of that, our water use is not efficient.”

Regional water usage for crop production says Dr. Mohtar is double that of Western countries. “If you go to automated hi-tech farms in the West, their water use efficiency is very high. It reaches into the 90s.”

Dr. Mohtar feels that stakeholders in the region need to take measures urgently, whether through desalination or by improving efficiencies. “We have 40 percent water gap in the next 20 years, we have to meet that gap…this needs creative and innovative ideas, but also with need for the policy makers to listen and to make it effective and actionable. If you don’t have that, then we are heading for a crash which I think is going to be much more significant than what we are seeing in terms of the uprisings and instability today.”

GUIdING PRINCIPLESSo where does Qatar and, more

specifically, QEERI fit into all of the above? What directives from the authorities in the country are there for the trifecta of water conservation, sustainable energy and food security that affect the research mandate and activities of QEERI itself?

“We have two guiding principles,” says Dr Mohtar. “The first and over arching one is the Qatar National Vision 2030 in which there are very clear directions that the country should take in terms of a green economy and improving the quality of life for Qataris in terms of conservation of the natural resources. The other guiding principle is more recent which the president of research and development at Qatar Foundation has

launched, the Qatar National Research Strategy (QNRS), which goes into the role of research in meeting QNV 2030 targets.”

The formation of QEERI could perhaps not have come at a better time. With upto 55 metric tonnes of carbon dioxide emissions per capita, Qatar has come under criticism and developed a reputation – deserved or not – as a major polluter, as well as per capita one of the highest consumers of water and energy in the world.

“The Ministry of Environment and all of the public sector is aware of these challenges,” says Dr. Mohtar. “I do acknowledge that Qatar has higher than average emission rates, I do acknowledge that the usage and efficiency of energy and water use are not where they should be, and we are aware of that and we are working very closely with all stakeholders through QNRS to create a research programme that will help improve these processes.”

Though, says Dr. Mohtar, the Ministry of the Environment is the keystone to aligning the country’s environmental policies, regulation and enforcement of these and every facet of society must be involved. “We are working on creating a network of sustainability,” Dr. Mohtar explains. “It is the responsibility of all of us to work towards better public awareness about conservation of energy, food and resources. So the issue is very complex and it is the responsibility of all to be part of it.”

On the subject of emissions, Dr. Mohtar is equally frank, agreeing that the oil and gas processes in the country are a major source of emissions. However he is also keen to stress that this is also a major part of the raison d’être of QEERI and Qatar Petroleum, the Ministry of Energy and the Ministry

TheEDGE52

“i do acknowledge that Qatar has higher than average emission rates and that the usage and efficiency of energy and water are not where they should be.”

BUSINESS INTERVIEW

TheEDGE 53

“While our role is to build local capacity, in research… in R&D for the solar energy programme it complements the effort by the solar industry, so I am hoping that in the next five to 10 years, some of the technology that we will develop in Qatar for Qatar will be promoted by the industry.”

Desalination does seem like a panacea to the region’s water shortage woes, especially if it is powered by the sun. However, the process itself has its own ecological challenges, from the location of processing plants, and its impact on fresh groundwater – which is already under threat from seepage from industrial locations and rubbish dumps in Qatar – if the saline pipes used for the process leak into it, to potential marine disturbance through discharge of briny water and even noise pollution.

QEERI AT COP 18“At the technical level,” explains Dr.

Mohtar, “we are working with national stakeholders and partners on pilot programmes that will reduce the energy footprint for some of the desalination. We are also working on more energy-friendly desalination to produce and maintain the production of water to meet the increasing demands.”

To this effect, reveals Dr. Mohtar, QEERI, as the representative for Qatar in the Gulf Cooperation Council (GCC) Alternative Energy Network, will be launching the Alternative energy preparedness report during COP18 meeting in Doha at the end of November. QEERI, he says has participated in a regional survey to look at the forecast for energy use and how Qatar and the region could embark on its own targets for alternative energy over the next decade. “The report is very significant, as it will highlight commonalities and challenges that we all face in the region and how we can work together in meeting those alternative energy targets,” adds Mohtar.

On the significance, or indeed as some critics have opined, the irony of Qatar hosting an event such as COP 18, Dr. Mohtar is equally candid. “Qatar I believe is the first country that is a major oil and gas producer and the first country in the region to hold such an important event. I think that we have an opportunity to showcase with proper management, research and planning, proper

coaching, countries and to at least set a target…for how we could move to the near future and in the coming few years with more sustainable development. I think that is a commendable statement by the State of Qatar that despite all of the challenges, there is a will and dedication from the leadership to say that we acknowledge the environmental challenges and we are working towards sustainable economies, and I think that is the significance of Qatar hosting COP 18.”

Another important aspect of COP 18, adds Dr. Mohtar is fostering existing partnerships, and creating new ones. “I believe very strongly in partnerships,” he says. “We have significant partnerships, which we rely on, in the solar energy area in particular.”

These, as Dr. Mohtar indicates, mostly involve academia. As far as involvement in the private sector is concerned, while there is some involvement on a local level, he accedes that there is not enough. “From my experience back in the US the private sector is more engaged in research,” Dr. Mohtar says. “I think that we are still at the early stages of engaging the private sector in Qatar, and it should play a bigger role in funding

research in helping out the public and the research sector in meeting the goals, and I look forward to seeing some joint funded projects with industry. I would like to see more funding, more resources that the private sectors invest in promoting R&D.”

INTERESTING FUTUREAs far as the future of QEERI, and

the success this young entity hopes to achieve, not only for the future of Qatar but also the world as a whole, Dr. Mohtar is optimistic but realistic. “QEERI is working on collecting base line environmental data including air, water, and soil quality as well as biodiversity,” he adds.

“We are also looking at ways to integrate all of this into an a common framework to help policy makers make more informed decisions. We have been involved in integrated environmental research for many years and across several continents, and notice that dry areas of the world are less studied as compared to other eco-zones. QEERI’s long-term goal is to develop the data and system knowledge to fill this gap for Qatar and other dry regions around the globe.”

BUSINESS INTERVIEW

FEATURE STORy

CITY OF lIGhTDESPItE CHALLENGES, QAtAr’S ECO-FrIENDLy LuSAIL CIty IS FINALLy GAINING MOMENtuM

Lusail City, Qatar’s largest and most ambition construction development, is now scheduled to be fully completed in 2019 at the earliest. (Rendering courtesy Lusail City)

FEATURE STORy

TheEDGE 55

2012’s Hannover Messe, is the world’s biggest industrial fair held in Hanover, Germany – focused on ‘green intelligence’ and it was here that engineer Essa Mohammed Ali Kaldari, Qatari CEO of Lusail Real Estate Development Company, revealed how Lusail would incorporate “all that is green, sustainable and smart in real estate.” There have been doubts that a project of such vast scale would ever see fruition, and question marks over how it would secure the necessary investment from overseas to fulfil such ambitious occupancy numbers. However, with the recent handover of the Marina District to investors – following completion of infrastructure on the mixed-use site – the fortunes of the green project are now looking up. Barry Mansfield reports.PROS aND CONSApart from the Marina District – spread over 1.8 million square metres and which will be home to an estimated population of 30,000 residents and 50,000 workers – Lusail City in its entirety is a 37 square kilometre area north of Doha that is ultimately set to be developed into a 19 district-strong hub, with space for up to 250,000 inhabitants when finished.

First announced in December 2005 and now scheduled for completion by 2019 at the earliest, the municipality of Al Kheisa’s futuristic hub, based just north of West Bay Lagoon, will eventually include man-made islands, four high-rises, an entertainment district, 36 schools, a state-of-the-art hospital, an office park for energy companies, two golf courses and five stadia. Infrastructure totalling US$7.4 billion (QR30 billion) will finish by late 2015.

Lusail’s planners envisage a global destination, a blend of the natural and artificial environments – and a high tech centre that is both attractive and yet may provide a satisfying return for investors. Indeed, as Doha now attracts more than two million visitors annually, there are signs that overseas investors are taking Qatar, and more specifically Lusail City, more seriously. Lusail’s first tenants should be moving in by the end of 2013, according to a recent statement by Kaldari.

Mahmoud Ahmed, chief executive officer (CEO) of Q House Invest in Uppsala, Sweden, in turn reports massive interest from northern Europe in the first

TheEDGE56

development to go on sale, a six-floor, US$77 million (QR280 million) multi-use complex. “Scandinavians spend up to six months of the year in darkness, so Lusail holds great appeal as a winter getaway,” he says. “Qatar’s tax free environment is highly attractive to the most highly-taxed people in Europe. I believe investors will eventually value Lusail in the way they look at London or Paris.”

Nevertheless, non-Gulf Cooperation Council (GCC) nationals can only lease property in Qatar for 99 years, which has cast uncertainty over long-term projects, including Lusail. Top consultants have also questioned the proposed payment plans. For example, Craig Plumb, head of research at British global real estate services firm Jones Lang LaSalle, has insisted there is “very little demand” for the funding model behind Barwa’s 3.7 million square metre Lusail Golf Residential Development. The scheme, which will feature an 18-hole Greg Norman-designed course, is set to be financed by down payments. Plumb believes most investors

are instead “looking for completed or nearly completed properties.”

Nevertheless, Doha currently offers one solitary members-only course and thus a repeat of a Dubai-style mishap seems unlikely – Jumeirah Golf Estates’ incomplete four-course plans and Dubailand’s suspended Tiger Woods centre outstripped any possible demand.

ECO-FRIENDlyWhile the Qatari government commits

itself to energy efficiency, it is often accused of token gestures in this area. In the Lusail development, however, it excels. The Qatar Vision for 2030 and Leadership in Energy and Environmental Design (LEED), the United States Green Building standard, set the bar for the master developer here. Lusail is the first new site to adopt the homegrown Qatar Sustainability Assessment System (QSAS). According to Kaldari, the ambition is for the town to be a self-contained, holistic city characterised by “extraordinary ideas for

efficiency and safety.” GDF SUEZ Qatar’s managing director Florence Verzelen has praised Lusail but warned that “strong political will” and “awareness campaigns” will be needed to cut Qatar’s high power consumption, which is mostly down to cheap rates. She suggests the group itself may contribute “with energy efficiency solutions for building, even for transportation.”

The 86,000-seater Lusail Iconic Stadium, designed by Foster and Partners for the World Cup 2022, will showcase many of Kaldari’s bright new ideas. It will be cooled using solar power. Panels will be installed on canopies over the service areas to provide energy for the stadium when it is in use, and to power the neighbourhood when empty. The cooling technology will ensure a more comfortable experience for footballers and spectators; with daily highs of around 41 centigrade in July, it is badly needed. A polysilicon factory in Ras Laffan, QSTec is set for completion by 2013 and likely to produce 8000 metric tons per year for conversion into solar modules – will be a

FEATURE STORy

If it can overcome its challenges and come to fruition in time, Lusail City will boast among the most sophisticated and aesthetically pleasing urban environments on earth. (Rendering courtesy Lusail City)

should make the water taxi a popular mode of transport within the city itself. There will also be an underground metro link to the new Doha rail network. Even some of the motorways, built by Samsung C&T Engineering & Construction company, a unit of Samsung Group, will be underground.

Lusail aspires to ‘Smart City’ status. The plan is to use an operation control centre to manage a strategic information technology network covering all citywide services. For example, the traffic-light system can be manipulated to ease traffic at peak times. The centre will oversee video surveillance systems around the clock, enabling quick emergency response. Digital road signs can be altered on the spur of the moment; street lighting, electronic metering, utilities and fire detection can be managed centrally. In addition, a pneumatic disposal system will use vacuum power to suck waste or litter under the street and channel it to a recycling centre several kilometres away.

The town is expected to become a transport hub. Firstly, it will be a maritime centre with more than 1500 berths, constructed by Mourjan Marinas IGY. Although 21km of new roads are planned, including 5.3 kilometres for the dual four-lane Lusail Expressway, Lusail’s management is preparing for the long term. This means

FEATURE STORy

TheEDGE 57

major supplier for both Lusail and the stadium. QSTec confirms that “energy payback time of a solar module is under one year,” but that it will continue to generate power for another 25 to 30 years. It will use the latest Siemens technology to produce the modules.

QSAS emphasises cleanliness during construction, too; it has placed strict limits on airborne pollutants like ozone, nitrogen dioxide and sulphur dioxide, and discharge such as mercury, arsenic and fluoride. Lusail aims to be highly water efficient; Parsons is overseeing the installation of 39.5 kilometres (km) of pipes for potable water and fire fighting, 34.1 km of storm water drainage and 36.8 km of irrigation channels. Since summer, the Lusail management has been piloting 160 ‘Groasis’ trees from Dutch company AquaPro Holland, which require 90 percent less water, with a view to rolling the technology out across the development if successful.

INTEllIGENT aND INTIMaTEDevelopers also want to ensure that the

urban environment of Lusail is not too built up or overbearing, and that residents feel connected to nature. A good example here is KEO International Consultants’ design for Diyar Al Kuwait’s 70,000 square metre mixed-use waterfront development project. On this site, elevated sky gardens are installed in each tower. Lusail will seek to minimise the visual impact of the car in built-up areas – for example, there will be public underground car parks at the Marina district (2200 places), Seef Lusail (1000 places), Qetaifan Islands (1030 places), and at the Lusail Commercial Boulevard (2750 places).

Other car parks will be landscaped and connected by 10 or more pedestrian tunnels stretching across the districts. Despite its connection to the Khor highway, Lusail’s 28 kilometres of waterfront development

a pneumatic disposal system will use vacuum power to suck waste under the street and channel it to a recycle centre.

lUSaIl CITy’S KEy FIGURESUS$50 billion/QR182 billion – the maximum total budget for Lusail City.22 kilometres – of light rail transit (LRT) is planned, with 34 stations and two national rail connections.100 metres – is the maximum distance pedestrians will need to walk to find public transport.30,000 residents – will live in the Marina District, which was handed over to investors in September.34 mosques – including nine grand mosques, are on the drawing board.

we can expect a cable car system, an extensive network of illuminated pedestrian and cycle paths, and the Lusail Light Rail Transit System (LRT). The latter entered a new phase in February thanks to Qatari Diar Vinci Construction (QDVC) signing a US$535.4 million (QR1.95 billion) contract for seven underground stations, a viaduct, and preparation work for a depot.

REMaINING ChallENGES

But will Lusail come to be seen as a prototype for our future way of life – or is it destined to follow Dubai’s Palm and World Islands projects as a white elephant of the Gulf? Masdar City, a similar development in the United Arab Emirates, has been put back from 2016 to 2025. Fortunately, this time around cash is no obstacle; new figures from Qatar’s Ministry of Economy and Finance reveal that income grew by 42 percent to QR220 billion in 2012. Furthermore, at just QR9.6 billion, interest payments still make up only six percent of expenditure.

Salaries and wages are up by 28 percent, but this is distorted by pay increases for nationals in September 2011. FIFA has pledged to raise expatriate worker rights issues, including exit visas, passport confiscation and exorbitant recruitment fees. These well-known controversies do not seem like getting in the way though. Qatari Diar admits that it was falling behind until the success of the World Cup bid in December 2010 – mainly due to the global recession’s impact on the property market and state spending being allocated elsewhere – but it has caught up in the last 18 months. Lusail is now firmly on schedule.

Continued on page 76

ON THE PULSE

A 16th century manuscript from the Book of the Kings showing the Galata observatory in Istanbul. The Muslims were the first to build observatories and astronomical instruments that were useful in prediciting weather, useful for agriculture and providing accurate co-ordinates for travelling traders. (Image Corbis)

ON THE PULSE

TheEDGE 59

A statue of Ibn Rushd in Cordoba, Spain, known as Averroes in the West, he was a theologian, a doctor, and an astronomer credited with discovering sunspots.

lOST hISTORyThe rise of the Muslim empire lead to the establishment of the world’s largest economic force from the 7th to the 13th century. By the early 7th century the Prophet Muhammad (pbuh) had established a city state, Medina, and for the first time in history had managed to unite the quarrelling tribes in the Arabian Peninsula under a single rule. In under a century they had expelled the Sassanids from Persia and Iraq, and Byzantine rule from Palestine and Syria. The two great superpowers at the time, the Umayyad and Abassid dynasties extended the Muslim empire to envelope Central Asia, and eventually parts of India.

By the mid-eigth century the Muslim empire stretched itself from Spain to Central Asia, what followed was a thousand years of advancement in nearly every field of knowledge conceivable. The Muslim civilisation made significant contributions and in some cases provided the foundation for the development in the fields of industry such as agriculture, medicine, technology, philosophy, social science, music, arts, literature, navigation and astronomy.

However, with the decline of the Muslim civilisation in the 17th century, their contributions became lost history. The 1001

The Muslim civilisation encompassed an area of land that stretched from Spain to China, one of the largest empires in history. Into this they integrated a network of trade that made them heirs to a vast scientific lore that they cultivated to create an era of technical and scientific development that had never been seen before. Shehan Mashood takes a look at how trade was a factor in driving ingenuity throughout the Muslim world.

ThE GIFTS OF COMMERCE FrOM A FOrGOttEN CIvILISAtION

TheEDGE60

Inventions a travelling exhibit was developed to address this, an exhibition that has since attracted millions. Shaza Shannan, the director of Middle East operations at 1001 Inventions tells TheEDGE “Our project conceived in the United Kingdom (UK) along with the Foundation for Science, Technology and Civilisation was to address the gap in history. If you look at history books in the UK, you start with the Greeks and the Romans and suddenly you jump to the Renaissance. The aim is to educate and inform people about the huge contribution in science and technology of the Muslim civilisation.”

Shannan believes there is a lot to be learned from the past “what you want is to build a new generation of thinkers and scientists. This is key in the Middle East as it is our history we are going on a journey on, so the whole idea of the exhibition is to take people on a journey to the past to inspire their future.”

ThE IMPaCT OF TRaDEThe barren deserts of Arabia offered very

little in the way of natural resources, so it is perhaps through necessity that the Arabs became traders. Even before the birth of the Prophet Muhammad (pbuh) and the spread of Islam, Mecca was home to the Ka’bah (a temple raised by Abraham) that over time came to be filled with idols that neighbouring tribes brought, turning Mecca into a centre of pilgrimage for the Arabian Peninsula and in turn a thriving trade route.

The tribe of Quraysh, rulers of Mecca at the time and keepers of the Sanctuary (the Ka’bah), taxed those living within the city and used it to feed the pilgrims that flocked each year. As the pilgrims grew the Quraysh established caravan routes to foster more trade in the late sixth century, which would in time come to be known as the three great caravan routes that would carry traders, explorers and everyone in between as late as the 19th century.

Arab merchants carried wares between the shores of Spain and West Africa to China, India and even Southeast Asia. The result of this vast expanse of trade networks was the access to the different types of knowledge they acquired such as paper from China and agricultural practices from India to name two, which were then consolidated in the great learning centres

of the Muslim world.The tradition of pilgrimage to Mecca made

it the epicentre not only for the Muslims that flocked for spiritual nourishment but also for the trade of goods and ideas. This lead to the further spread of Muslim civilisation through a merchant economy that would redefine both state and socio-political structures.

Arab conquests of more fertile regions and wealthy in natural resources lead to a period of reconstituting social structures in the new Muslim world. The mercantile class in Arabia was a new addition to the gentry

“What you want is to build a new generation of thinkers and scientist. this is the key in the Middle east,” says shaza shannan from 1001 inventions.

that had not previously existed in Eurasia, a degree of social mobility was encouraged and meritocracy thrived in these periods. With the development of trade came currency and cheques, which gave rise to proto-capitalists (mercantilism) that developed a monetary economy based on the dinar.

Dr. Rim Turkmani, an astrophysicist at the Imperial College notes, “In the Arab, Islamic world going back to the 11th century they realised that investing in science was good for their economy, the local economy.”

Fields of study like mathematics flourished

ON THE PULSE

The ‘Market zone’ at the 1001 inventions exhibition showcases the commercial applications of chemistry developed for manufacturing perfumes. Al-Kindi a polymath is famous for writing the Book of the Chemistry of Perfume and Distillations in the 9th century. (c) 1001inventions.com

ON THE PULSE

TheEDGE 61

under the Muslim civilisation. Dr. Turkmani mentions that they would “work out the area of land to calculate how much tax would be levied on a person and when to tax them, you need science, you needed mathematics for this,” she adds, “you needed astronomy to predict the seasons, and when the harvest will be. They understood that science is money.”

Speaking on the topic Junaid Bhatti with the 1001 Inventions tells TheEDGE “The fruits of this cultural revolution taking place also benefited Europe through a very porous border, particularly Andalusia in Spain. Developments in the agricultural expertise of the Muslims gave up to four harvests per year whereas Europe at the time were used to one harvest every couple of years, so they were big advancements.”

The technology developed was a direct result of the hunger for knowledge that was sweeping the Muslim world at the time. “In the learning centres like the House of Wisdom in Baghdad, knowledge was so highly prized that translators were given as payment the weight in gold of the book they translated,” says Bhatti. “There was also an attempt to preserve knowledge and technology from ancient civilisations of the Greeks and Romans that were destroyed in Europe, but kept intact

“in the islamic world going back to the 11th century they realised that investing in science was good for their economy,” says astrophysicist Dr. rim turkmani

A 16th-century manuscript depicting daily activities of trade and governance in a courtyard at the Topkapi Palace, Istanbul. (c) MuslimHeritageImages.comContinued on page 76

BUSINESS INTERVIEW

SMALL BUSINESS SENSE

With international ambitions, Techno Q has recently begun its first external project in Oman, and executive director Abdulla Al Ansari would like to see more Qatari companies develop outside of Qatar’s borders. “It makes you feel really proud. If there is an opportunity for us to participate in the competitive global market, let’s do it,” he says.

While supportive of Qatari start-ups following Techno Q’s example, managing director zeyad Al Jaidah feels that because Qatar’s population is so small SMEs are not as crucial to the economy as many might think. “We don’t have a large population where we need to worry about job creation and SMEs having to absorb part of the work force,” he says.

Q, he says, are willing to be involved on an advisory level, but they feel that there is neither an actual cohesive organisation nor sufficient funds being allocated in support of such initiatives.

“We are willing to mentor but there needs to be a support system put in place, partly comprising of individuals with hands-on related business experience to make it functional and successful,” adds Al Jaidah.

A COMFORT zONEPart of the issue, he says, is that Qatar’s

large public sector coupled with semi-public business entities that employ most of the local population offering high-paying jobs, therefore not creating enough interest and motivation to change the underlying mindset to gravitate towards the private sector. “For a young person it is much more secure and financially rewarding to have a job working for the government sector or a semi-government organisation than starting their own business,” he furthers.

Abdulla Al Ansari agrees, adding that there is a lack of need in Qatar to gravitate towards creation of entrepreneurship in comparison to other countries that do not have a vast hydrocarbon-funded public sector to rely on. Though Oman does have some oil resources it does not have a massive economy and its public sector salaries are at lower levels. This, explains Al Ansari, has meant that its population has had

forming start ups, and being hands-on when it comes down to running a day-to-day business operation as these business partners have been for the past 15 years.

Al Jaidah and Al Ansari also question whether the government funding is indeed reaching those who need it to the extent that has been proclaimed, and whether the Qatar market is even large enough to warrant or support an ‘entrepreneurial ecosystem’ as it has been called.

“The problem is the mechanism – the vision is there, but who is there to take that vision and realise it, to motivate and inspire a generation to start their own businesses?” asks Al Jaidah. Companies such as Techno

Techno Q was created with the aim of providing home theatre systems in Qatar, and has evolved since into an ever-expanding business specialising in systems

integration solutions – for individual customers to large clients across various sectors – that now employs more than 270 people.

Having guided Techno Q to where it is today, starting in a time when Qataris founding their own hands-on enterprises was far less common, Al Jaidah and Al Ansari are well-qualified to comment on the apparent rapid rise of entrepreneurism and the small business sector in Qatar, which they understandably encourage. Indeed both have been in contact with related organisations, such as Silatech, Bedaya and Enterprise Qatar (EQ) and the Qatar chapter of Enterprise Organization (EO), the latter of which Al Jaidah was a member until recently.

“Here in Qatar entrepreneurship is finally being recognised by the government and the authorities,” Zeyad Al Jaidah says in reference to the formation of EQ and other similar organisations that have been established to promote small businesses. But while both Al Jaidah and Al Ansari are positive about these initiatives, they also feel that the so-called thriving culture of entrepreneurism in Doha is at times overhyped, and are sceptical that many of their countrymen actually have an interest in

BUSINESS INTERVIEW

There is nobody more passionate about small and medium enterprise (SMEs) and the subject of starting up and growing a company than those who have done it themselves. Techno Q’s managing director Zeyad Al Jaidah and executive director Abdulla Al Ansari are two Qatari entrepreneurs who have marshalled their Doha-based firm from a two-man operation to a thriving concern. They also have some strong views on the direction in which entrepreneurship is being steered in the country, the start-up ambitions of their countrymen, and whether SMEs are all that important here, as TheEDGE recently found out.

ENTERPRENEURS AL ANSARI AND AL JAIDAH OFFER A DOSE OF REALISM REGARDING QATAR’S OFTEN-HYPED SMALL AND MEDIUM ENTERPRISE SECTOR

TheEDGE 63

270THE NUMBER OF EMPLOYEES CURRENTLY EMPLOYED BY TECHNO Q, ONE OF QATAR’S MOST SUCCESSFUL SMES, WHICH STARTED 15 YEARS AGO WITH A STAFF OF JUST TWO: MANAGING DIRECTOR zEYAD AL JAIDAH AND ExECUTIVE DIRECTOR ABDULLA AL ANSARI.

When TheEDGE mentions it is interesting to hear Qataris discuss these kinds of issues and be happy to go on record about it for a magazine interview, Al Jaidah responds with candour. “To solve the problem we have to talk about it. Putting it under the rug and hiding it is not really going to help this generation. We are saying this because we love our country and we love seeing the progress, which is taking place, but we want it to really happen in the right way. As we said, the money is there, two billion [Qatari riyals] was allocated by HH the Emir. But who is realising these initiatives? Where is the gap?”

THINKING BIGNevertheless, Al Jaidah and Al Ansari

remain optimistic about those Qataris who are motivated to enter the private sector. Qatar, they feel could be a good place from which to launch a regional or international business, perhaps one with franchise potential. “We would like the country to develop more companies. It is nice to see something grow outside of Qatar’s borders; it makes you feel really proud. If there is an opportunity for us to participate in the competitive global market, let’s do it,” says Al Ansari.

“For an entrepreneur, really one word of advice: be innovative, think big, be bold in your ideas, come up with a new idea, don’t just think that I am going to do this in Doha,” says Al Jaidah to young Qataris or potential local start-ups. “Why not make a franchise, for example, if I am opening a restaurant. Even at Techno Q, a few years after we started our business, right there and then we started thinking big, making an organisation and structuring the company

to adopt a more entrepreneurial mindset.As Techno Q is involved in a project

in Muscat (their first large-scale initiative outside of Qatar), on a recent visit to Oman, Al Ansari was impressed by the business idea his Omani taxi driver talked to him about during the drive from the airport to the hotel, and his idea was to start producing and selling prime grade beef by feeding livestock quality food. “He had no money nor the know-how to start his business, but he did have the idea and the motivation,” says Ansari, adding that in Qatar just the opposite is true. “Why should people consider taking a risk or even bother trying? They don’t feel the need to because they are very comfortable.”

Indeed, adds Al Ansari, many of his Qatari friends and contemporaries think that he and Al Jaidah – both of whom in fact left similar posts to pay full time attention to Techno Q – are “crazy” for working so hard in the private sector, and regularly asked why they do not come back to work in the public sector.

Al Jaidah, though, is also not convinced SMEs are as important to Qatar’s economy as it has been claimed. “People of Qatar are very fortunate because our country is rich with natural resources,” he explains. “This I would say is the number one reason. Number two: we don’t have a large population where we need to worry about job creation and SMEs having to absorb part of the work force.”

Al Ansari agrees. “Small businesses are more likely to succeed in markets and countries with larger populations; if you come up with an idea in the United States (US) or any country [where] you have a massive population you will find buyers no matter what you are selling,” he says. “There are some entrepreneurs here in Qatar who have thought about businesses in recycling for instance, but the limitation was the size of the population which did not make it feasible, so they had to come up with an alternative idea that can suit the market size.”

OVERSEAS EXPANSIONFor Al Jaidah, another part of the problem

in Qatar is not that the attention is not being paid to start ups, but that the Qatari government must actively facilitate the expansion of Qatari companies, specifically

SMEs, to expand overseas. “Even large international corporations

like Total and Shell need their governments’ intervention and political influence to sign contracts abroad, so what about smaller companies? We need even more support. Qatar is executing many projects abroad, like in Egypt, Morocco, and Sudan, but none of the Qatari SMEs are given an opportunity to take part in these projects. Why not make it mandatory that the majority of the works in these projects must be done by Qatari companies?

He continues by saying these types of supportive initiatives from large organisations such as Qatari Diar, for example, are lacking. “It’s not on their agenda to consider involving Qatari SMEs in their projects to make it easier for the Qatari private sector to expand in the region, or even globally; for us to go global. Yes, Techno Q is going to go global, but it is going to be a challenge. Now we have taken our first project outside of Qatar, in Oman, which we are truly very proud of. And we want to continue that momentum of growth and expansion. We are determined to do that inshAllah (God willing), but we are doing it without support.”

“In the US and Europe,” Al Ansari adds, “because companies pay taxes, the government is relying on them as a source of revenue, so there it is an automatic partnership, and it is in the government’s interest to ensure the profitability of these companies in order to secure continuous revenue. For this reason, these governments will always support businesses, establish legislatives in favour of companies, and ‘bail’ them out during difficult times.”

TheEDGE64

al Jaidah and al ansari are positive about recent initiatives supporting entrepreneurism in Doha, but are also sceptical as to whether many Qataris are interested in forming start-ups.

BUSINESS INTERVIEW

“For me the real satisfaction and sense of accomplishment comes from,” agrees Al Jaidah, “when I see Techno Q’s installations in places such as Qatar National Convention Centre or in institutions like Qatar Foundation Education City Universities or Qatar University. I think to myself, Techno Q is a part of this great progress; this is our work, our know-how. And that feeling for me is indescribable, leaving our mark and contributing to the progress of our country.”

TheEDGE 65

in such a way where growth is factored in, by building procedures, even when we had only 20 employees, we implemented the ISO quality assurance system and started setting appropriate procedures, because we wanted our business to develop further and grow in the right direction.”

For his part Al Ansari underlines the need for good partnerships in business. “Advice I would give to anyone who wants to think about starting a business is to stop thinking about it from a passionate standpoint, because sometimes the idea comes from a dream, something that you would love to do, but on the other hand, there has to be somebody else who plays a role of a mentor, an advisor if you will, someone who will asses things more realistically, someone who can crunch numbers and offer sound and objective advice. Even we have tried realising ideas in the past that have failed, mostly because we were thinking about them passionately.

“The key,” Al Ansari continues, “is really in finding the qualified people to do the job right. Let’s say somebody wants to create a company that designs and manufactures mobile phones. The business produces a product that is great, but if there is no one hired who is skilled and knowledgeable in selling and marketing of those products the company will fail; in such a case, the need for a talented sales and marketing person is highly necessary. Therefore, the right people with the right skill sets must be hired in order for the business to succeed.”

Finally, both Al Jaidah and Al Ansari want to underline that while they acknowledge there are challenges in starting businesses in Qatar and that the likelihood of failure is high, the rewards gained from starting and running

your own business and the contribution it makes to the Qatar business sector and society are the best reasons for doing so.

This is something they would like to make their countrymen more aware of, says Al Ansari. “Although when you run a company you’re responsible for your employees and their families, so it is a lot of stress and mental preoccupation to deal with, but from that you find the satisfaction and the motivation to go on, when you look back at your career and realise what you have achieved. That is what makes it all worthwhile, and it is what drives you to go on; knowing that you have worked hard and have accomplished something. When we participate in exhibitions or seminars in other Gulf Cooperation Council (GCC) countries and we see that we are known and highly regarded there by the people in our industry, we are thrilled, because we carry Qatar’s name abroad.

“This alone gives us the sense of satisfaction that we are really looking for and this is what motivates us to continue, this is our driving force. It wasn’t about the money when we were starting out and it is not about the money today, it is about feeling gratified because we have achieved something. We also feel satisfaction, because we are not relying on a government job, we try to rely on ourselves to create opportunities and to lead a productive existence by contributing to our country in a positive way.

“We also believe that creating our own opportunity to earn a living relieves some strain from the government to support those who perhaps really do need to rely on the government.”

BUSINESS INTERVIEW

al Jaidah and al ansari remain optimistic about Qataris who are motivated to enter the private sector and they feel the country is a good place to launch a regional or global business.

It is both the satisfaction of job well done, such as this light installation at the Qatar National Convention Centre, as well as the feeling they are contributing to the growth of their country in a meaningful way, that inspires Techno Q’s directors Al Jaidah and Al Ansari to action. (Photo courtesy Techno Q)

Public advertising in Qatar is regulated by a number of laws depending on the type of advertising to be utilised. For example, the Press and

Publication Law No. (8) of 1979 is relevant in respect of newspapers, magazines and other items in print and the Radio and Television Law No. (11) of 1997 is relevant in respect of commercials broadcast on radio and television.

This year, a law was promulgated, Law No. (1) of 2012 (‘Advertising Law’) that now regulates the requirements for the placement of billboards and signage in Qatar. One of the main requirements of the Advertising Law is that the primary text of the advertisement is displayed in Arabic (although a translation into other languages could be permitted in the advertisement).

The Advertising Law applies to advertisements that are aimed at the general

LEGAL INSIGHT

public or a specific sector of the public to inform them of certain commodities, industrial and commercial products, equipment, machinery or any activities, commercial, industrial or vocational whether this is made through writings, drawings, images, sound, light or any means of expression and whether such advertisement is produced on wood, metal, paper, cloth, plastic, or other material.

In order to display or publish an advertisement, prior authorisation is required from the applicable municipality in which the advertisement is placed (‘Municipality’). This is done by obtaining a permit from the Municipality and paying a prescribed fee. To obtain a permit from the Municipality various requirements must be met. For example, the permit application must include the advertisements content, specification, details of the material used and the method of installation. Each permit is personal and can only be

transferred with the consent of the Municipality. Advertising permits granted pursuant to the

Advertising Law will only be granted at the discretion of the Municipality on a case-by-case basis. The permits are granted on a temporary basis for a limited period unless renewed for an additional period again at the discretion of the Municipality. On expiry of the advertising permit, the advertisement must be removed within five days of the expiry date otherwise the Municipality will remove the advertisement at the expense of the permit holder.

Advertising with loudspeakers is permitted but only with special permission and in accordance with the guidelines granted by the Municipality.

All permit holders are required to maintain the advertisement in a good condition. The Municipality can notify a permit holder to undertake maintenance of an advertisement, and failure to comply with the notification within seven days of being notified of the

By Brenda Hill

QaTaR’S ADVERTISING LAW

MANDATORY REQUIREMENT FOR BILLBOARDS TO BE IN ARABIC

This 2012 billboard advertisement by Qatari financial services institution is the perfect of example of Arabic and English being included in outdoor marketing in Doha. (Image Corbis/Reuters)

LEGAL INSIGHT

TheEDGE 67

required maintenance work can result in the Municipality’s removal of the advertisement at the permit holder’s expense.

Certain areas including those of worship, governmental walls and buildings, archaeological and historical sites, tree and plant containers, and traffic signage cannot be used for placing advertising boards.

Certain categories of advertisement require an advertising permit but are exempt from any payment of the prescribed fees, and these types of advertisement include advertisements that are placed on commercial and industrial establishments, general stores and establishments of professionals that relate to their business activities. Other types of advertisements that are exempt from the payment of the prescribed fees include advertisements for charities, religious, social and cultural events, advertisements placed by governmental bodies on public occasions such as national

holidays and on social occasions. Certain government authorities have

been designated to regulate the placement of advertisements specific to their activities and these designated bodies are as follows: • Qatar Civil Aviation Authority for the

placement of advertisements in airports or airport facilities;

• Qatar Media Corporation in relation to the placement of advertisements made via the audio or visual mass media;

• Qatar Olympic Committee in relation to the placement of advertisements made in relation to sports facilities;

• Qatar Ports Management Company in relation to the placement of advertisements placed in ports or docks of any of its facilities;

• Qatar Post Company in relation to the placement of advertisements placed in its facilities or in its postal publications;

• Authorities in charge of certain

designated investment zones authorised by Cabinet Resolution in relation to the placement of advertisements in these investment zones. Potential advertisers should also be

aware that it is imperative that they take the necessary steps to comply with the Advertising Law. Any violation of the Advertising Law could result in a fine of up to QR20,000. In addition to a fine, a court may order removal of the advertisement, and require restoration of any property on which the advertisement was placed at the expense of the violator.

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 used as such. Should you have any questions in connection with this article or the legal issues it covers, please contact Brenda Hill of DLA Piper [email protected]

QR20,000POTENTIAL ADVERTISERS SHOULD BE AWARE THAT IT IS IMPERATIVE THAT THEY TAKE THE NECESSARY STEPS TO COMPLY WITH THE QATAR’S ADVERTISING LAW AS ANY VIOLATION COULD RESULT IN A FINE OF UP TO QR20,000.

QaTaR’S aDVERTISING laW FUll REQUIREMENTS: To obtain authorisation for an advertisement a number of requirements need to be satisfied as follows• The primary language of the advertisement must be in Arabic. Any other language may

be used subject to the approval of the Municipality.• Advertisements cannot contain anything offensive to Islam or any other religion.• Advertisements cannot breach the ethics, security or public morals of Qatar.• The design of the advertisement should not resemble traffic signs or other official

signage whether in relation to size, form or colour.• The advertisement may not be designed in such a way as to hinder traffic or pedestrians,

disrupt traffic signs or lights, or prevent or hinder rescue operations.• Approval must be obtained from the owner/landlord of the land where an advertisement

is to be erected.• The installation of the advertisement should not damage or obstruct public utilities or

endanger people’s lives or property.• The installation of the advertisement must be in keeping with the landscape, scenery and

the aesthetics of any urban area.• The advertisement must comply with the specifications stipulated by the Municipality in

terms of measurement, height, and dimensions.• The advertisement should not breach trade mark and trade name laws or law in general

or contradict factual data or official information.• An advertisement installed on any building cannot endanger, damage or disrupt the

occupant’s use of the building and nor can the advertisement block any ventilation or visibility of the building.

BUSINESS MANAGEMENT

IS INDIA tHE MANAGEMENt AND INNOvAtION HuB OF tHE FuturE?

THE RISE OF INDIaN INGENUITy

BUSINESS MANAGEMENT

TheEDGE 69

India’s economic rise has been dramatic. But as the growth slows, what does the future hold? The London Business School’s Lynda Gratton, a leading global management thinker, offers her personal view of a country, one with which Qatar has recently strengthened economic ties and relies upon for a substantial part of its blue and white collar workforce.

My first professional visit to India was more than 15 years ago with the late Professor Sumantra Ghoshal, to put together the newly launched Global Business

Consortium (GBC). The focus of the programme was on globalisation, and the plan was to take six senior executives from six companies to India to see this rapidly developing country. Many of these executives had never been to India and watched in awe, in some cases bordering on horror, at the sheer frantic scale of Mumbai and Bangalore. We visited factories, government offices and universities, speaking to economists, chief executive officers (CEO) and non-governmental organisation (NGO) leaders.

What we saw was a country defined by diversity, energy and potential, but also a country defined by inequality, poverty and crisis.

In many ways, India has changed dramatically since then. The diversity, energy and potential that I saw on my first visit have become the foundation of some of the most interesting cities in the world, which in turn are home to some of the world’s most sophisticated organisations. India’s ability to match speed and scale has granted it growth rates that the industrialised nations of the world have not seen for generations. Even though India’s economy has slowed of late, while the rest of the world recovers from crisis, it is still an impressive seven percent.

This growth is partly fuelled by India’s demographic dividend. With half its population below the age of 25, the country’s unmatched vitality is quickly producing an expansive and globally connected network of entrepreneurs. Add to this growing connectivity, and India’s working population is set to overtake that of China by 2030, giving rise to the most formidable national talent pool in the world.

However, that population bulge is both a blessing and a curse. Some of the underlying problems I witnessed 15 years ago persist. India is still a land of inequality, poverty and crisis. Its physical infrastructure of roads is vastly underdeveloped and has left many rural areas excluded from the exciting economic activity of its urban centres. As a consequence, regional economic disparity is still a crippling problem, with the average income in Bihar less than 15 percent of that in Goa. Illiteracy is high, with only 75 percent of Indians over the age of 15 able to read or write.

FUTURE OF WORKSince the GBC days I have become ever more

involved with India, in part as the director of the

Employees walk in front of a pyramid-shaped building at the Infosys campus in the Electronic City area of Bangalore, also known as India’s Silicon Valley. Article author Lynda Gratton visited the company’s headquarters and opines that the cultural diversity bred at Indian firms such as Infosys could be an advantage for a new generation of future potential Indian CEOs. (Image Corbis/Reuters)

companies. And finally, when it comes to supporting the societies they operate in, some Indian companies are really stepping up to the challenge in a way that the government has been unable to do. Growing up in developing countries like India is essentially a daily lesson in tolerance of ambiguity.

DEEP TalENT POOlThe sheer scale of population growth in India means

that, although it lags behind Europe and America in terms of per capita educational attainment, the country

produced twice as many people with advanced degrees in engineering and computer sciences as the US. Yet India is also facing a managerial talent shortage, for although the educational infrastructure is growing fast, the development resource needs of companies are growing even faster. Since the 1950s in the West, multinationals such as GE, Philips and Unilever have played the role of ‘talent factories’, systematically developing many managers who both stay and go onto the wider ecosystem of the company to create new businesses. With the exception of Tata and Hindustan Unilever, India has historically had no such talent factories. As a consequence, leadership and managerial skills in India are rare because, in effect, India was a closed economy until the early 1990s.

But India could become one of the world’s most important leadership talent pools. At the FoW we asked executives about leading in the future. Two core competencies emerged: the capacity to tolerate the ambiguity that many will face in this fast changing world; and intercultural sensitivity as the joining up of the world brings greater numbers of nationalities into the frame.

Both competencies are fiendishly difficult to develop, since they go way beyond the theoretical framing of much executive development and are both fundamentally experience-based competencies. It is almost impossible to become tolerant of ambiguity if your life has been structured and predictable, and it is hard to become inter-culturally sensitive if you have only grown up with people just like you. It is interesting to reflect on to what extent structure, predictability and homogeneity is the day-to-day experience of many young adults growing up in the developing economies, and to what extent this narrowness of experience could potentially stunt their potential as future executives? I remember puzzling over the challenges of developing executives for the future as I sat with a senior team of Infosys in their campus in Bangalore. I began to realise that growing up in developing countries like India is essentially a daily

TheEDGE70

BUSINESS MANAGEMENT

Future of Work Consortium (FoW). In this research and development consortium, executives from more than 50 companies from the United States (US), Europe and Asia have come together to learn, think and experience the future. In workshops in New York, Singapore, Mumbai and London we have explored how the forces of technology, globalisation, society, demography and resource constraints are shaping and defining organisational structure, leadership and work. One of the innovations of the consortium has been the development of a three-day virtual ‘Jam’– an online platform designed to bring people together from across the world to debate a number of issues.

We have run six of these ‘Jams’ with topics ranging from the leaders of the future, to complex collaborations and the impact of technology on productivity. We have also designed a series of surveys to get a deeper understanding of organisational practice. As a result of this we have written more than 60 case studies about innovative management practices. I have also kept a blog (lyndagrattonfutreofowork.typepad.com) in which some of my perceptions of India are described.

What has been fascinating about this consortium is to see first hand the trajectory that companies around the world are taking as they prepare for the future, and indeed to benchmark them against each other in their future proofing capabilities. In particular it has been very interesting to take a closer look at the Indian companies that have been members of our consortium — the information technology (IT) service firms Tata Consulting Services (TCS), Wipro and Infosys and the manufacturing companies Mahindra Group and the Aditya Birla; and companies such Unilever, Randstad and Standard Chartered Bank that have a significant Indian footprint.

Looking closely at the trajectory of these companies and their employees, three aspects strike me. First, that there are some unique aspects of the India talent pool that I believe will create long term competitive advantage for the country. Second, that some of the most exciting innovations around people are taking place within Indian

india’s working population is set to overtake that of China by 2030, giving rise to the most formidable national talent pool in the world.

The call centre at Indian technology company Wipro in New Delhi. As part of the Future of Work Consortium programme alongside Infosys, Wipro has been working with author Lynda Gratton in examining unique aspects of the India talent pool that she believes will create long-term competitive advantage for the country. (Image Corbis)

lesson in tolerance of ambiguity. In Mumbai, the choking traffic makes the concept of punctuality almost impossible; the power cuts in many Indian cities mean that it is tough to plan with precision; while the growing chasm between the rich and the poor forces every executive to confront the ambiguity of the distribution of riches. Under these circumstances ambiguity is rife, and tolerance the most adaptive response. And it is not just tolerance of ambiguity that developing countries such as India may have a lead on. It is also cultural sensitivity. For example as we toured the campus of Infosys, our guide told us that the canteen serves more than 40 different types of Indian food.

When young people join the campus of Infosys or Wipro or TCS from across the subcontinent they are put with people who may look superficially like them, but in reality are very different — and it is in working with these differences that cultural sensitivity emerges.

What this suggests is that as companies look for places where future leaders may be developing, it would be wise to turn to developing countries such as India. It is in these places that life’s daily experiences of ambiguity and diversity may well be creating the crucibles of experience from which the next generation of CEOs will emerge.

INNOVaTIVE MaNaGEMENTOur benchmarked research with the FoW consortium

also suggested that some of the most interesting management innovations are coming out of India. In our consortium we have seen how Infosys, for example, has virtually connected more than 50,000 employees to discuss the future strategy of the company.

Many Indian organisations are also experimenting with different ways to manage and develop leadership at scale. At the Mahindra Group, for example, young managers are given the chance to address real-time business problems by shadowing those at the most senior levels. Since 2003, Mahindra has been running shadow boards for high potential managers under the age of 35. In each of the group’s

divisions and companies, between eight and ten young managers representing a cross-functional team are brought together and given the responsibility and resources of a senior management committee.

Over a two-year period, these young managers are encouraged to deliberate on a number of projects of their own choice, and make recommendations to their senior management mentors, who are usually the managing directors or functional heads of the division. The mentors provide cohesion and feedback, and hone good ideas that emerge from the shadow boards.

BUSINESS aND SOCIETyIn a country as large and diverse as India, the challenges of infrastructure, education,

poverty and resources are immense. What has been interesting is to see how some Indian companies face these challenges. Indian companies have a huge potential skill gap.

While the technical education in the Indian Institutes of Technology is excellent, general education standards across the country are poor. For India’s rapidly growing IT sector this could be a disaster. Yet instead of accepting this, these companies have reached out into communities across the continent to significantly impact the development of millions of youngsters. We have seen, for example, how executives at Wipro are working with tens of thousands of colleges across India to train teachers to develop IT skills, build state-of-the-art curricula and encourage students to become what they term ‘work-ready’.

The challenge India faces is not just about building a talent pool; it also faces some of the world’s greatest societal challenges. Often it is women who are at the intersection of poverty, illiteracy and unemployment. Some Indian organisations have already started to develop strong links into the society. Ma Foi, which is a business within the Randstad organisation, is the largest human resources services provider in India. It has a significant footprint in India, with more than 85 offices in 52 locations. The Ma Foi Foundation was started to bring sustainable change to the lives of women, youth and children in the communities where Ma Foi operates, and is heavily integrated into the broader company. For example, one of the foundation’s activities, Project Sornam, aims to improve financial inclusion of the poor, with particular focus on empowering women as a way of helping an entire family. Ma Foi’s role is to identify leaders for these groups, provide practical assistance and give overall guidance and mentoring support. After the initial incubation time, groups can usually manage to sustain themselves through the development of their projects. The new ventures provide a monthly income to group members’ households. After six years of work, Project Sornam has close to 2500 operational groups impacting more than 35,000 women.

Every January and September for more than a decade I have visited India to see friends and to run a series of workshops with Indian executives. The contrasts I see now are as profound as they always were. In a 2011 blog I wrote of seeing a small child sleeping in the middle of one of Mumbai’s busy pavements, commuters stepping over her as they rushed to their offices. That same trip I visited the campuses of Infosys and Wipro and saw the extraordinary rigour and professionalism of the many thousands of young employees as they went about their daily working lives. Both images have stayed with me. They represent the challenges and the hopes of modern day India. I cannot wait to see what happens in the next decade.

20%THE PERCENTAGE OF QATAR’S POPULATION THAT HAILS FROM INDIA, ACCORDING TO RECENTLY PUBLISHED QATAR STATISTICS AUTHORITY DATA.

Natarajan Chandrasekaran, chief executive officer of Tata Consultancy Services (TCS), which has also been working with Gratton and the Future of Work Consortium to develop India’s business management leadership potential. (Image Corbis/Reuters).

BUSINESS MANAGEMENT

TheEDGE 71

alWayS RIGhT?

HUMAN RESOURCES

(IS)THE CUSTOMER

IN PART 2 OF OUR SERIES ON CUSTOMER SERVICE IN QATAR, THEEDGE USES SOCIAL MEDIA AS A TOOL TO REPORT ON REAL ExAMPLES FROM CONSUMERS How difficult is it to get a response to a customer complaint in Qatar? Using social media conversations as a starting point, Victoria Scott features some readers’ negative experiences with local companies, and as a counterbalance, asked for their response.

addressed via e-mail to Qtel by TheEDGE. Fatima Al Kuwari, director of public relations and social media at Qtel, responded five days later.

“We obviously want the installation process to be as smooth as possible, and we’re sorry it wasn’t in this case,” said Al Kuwari, “We’ve undertaken direct training in Qtel shops, so hopefully the Lagoona Mall team is now better able to help customers. We’ve also updated our website, which has an online map of Qtel’s Fibre availability.”

In response to the woman’s complaint, Al Kuwari explained that Qtel contacted her directly after TheEDGE approached them. “And Qtel has implemented a full training and development programme for installation teams,” explained Al Kuwari. “We’ve made a number of improvements to our installation services in 2012 – including an expanded number of time bands. In terms of the customer’s Wi-fi coverage issues, there are technical limits to Wi-fi coverage, which can be impacted by the position of the router, thickness of walls and size of the residence. To boost coverage, we’ve introduced HomeZone, a new router that extends the coverage area

HUMAN RESOURCES

TheEDGE 73

Mention the topic of customer service in dialogue in Doha and everyone is guaranteed to have a story to share.

The good, the bad and the ugly, it is all there, although often a bit too much of the ugly.

TheEDGE decided to take this conversation to the local community, using Facebook and the Twitter hashtag #CSQatar to elicit expatriates and locals to share their experiences with poor customer service in Doha. Predictably, there was a significant and emotive response, some of which were so vociferous they had to be censored.

And although one-fifth had of those good experiences to relate, many of the stories were negative, and about a quarter were still seeking a resolution to long-term complaints.

The local community shared their experiences of poor customer service and the company’s reactions to those complaints – relatively unique to Qatar. Subsequently, TheEDGE selected from a total of a couple of hundred complaints across different business sectors, and contacted each company to ask for their response to the poor customer service.

Some Qatari or Qatar-based international firms have designated customer service lines, and or complaint forms on their websites and others do not. However, despite some companies displaying an interest in the customer’s dissatisfaction, others do not get back to the customer.

POOR STaFF TRaININGAs highlighted in part one of this series

in TheEDGE’s last month’s issue, several of

the complaints received reflect a common concern in Qatar. It is evident that some of the employees are not trained efficiently to deal with customer complaints properly.

For example, a middle-aged man residing in Doha had trouble obtaining Qtel services for his new villa in West Bay Lagoon.

Qtel staff at Lagoona Mall insisted they did not offer services in West Bay Lagoon, despite him telling them that he lived just across the road from their shop.

Correspondingly another Qtel customer, middle-aged woman who had Qtel fibre installed last Christmas. “The team arrived about an hour late,” said the woman, “Then an installation that should have taken 30 minutes, they spent all morning on.”

Previously she had installed a booster to give Wi-fi reception in all areas of her house, but with the new fibre installation, this was not possible.

She further explained that many different engineers visited, but they were unable to fix the problem. “I had to sit in the back room near the washing machine to get a good Internet connection,” she added.

Both Qtel complains were noted and

an area of customer service that generates a great number of complaints in Qatar are the motor vehicle garages, specifically after-sales service.

for wireless devices and tablets.” The woman customer said she finally made the decision to buy HomeZone, which has now restored her Internet connection around her home, although she also expressed that she would not have had a successful resolution to the case if TheEDGE had not become involved.

laCK OF SERVICE ValUEMoreover, TheEDGE tackled an area of

customer service that generates a great number of complaints in Qatar – motor vehicle garages, specifically the after-sales service.

Another woman expressed an issue she had with Volkswagen’s (VW) service centres. She felt there was a complete lack of two-way

communication, and an apparent lack of concern about the quality of the company’s relationship with their customer, which is a common shared experience in Qatar. In July, her VW Golf failed to start; therefore she took the car to the garage, Saad Budwazir.

On August 2, it failed to start again. She called Saad Budwazir, only to be told

that VW servicing had moved to a new supplier. On August 13, her car was ready to be picked up. On the way back from the garage it broke down again. She went back to the garage, but from then on she struggled to find out what was happening.

“I expected they would call to update us,” she said, “We never received a call and every time I tried to call, I received a busy signal or no answer. The few times I did get an answer, they always said they were going to check and call me back, but they never did.”

As it is common in a country with a diversity of multiple nationalities working side by side, part of her communication issues could have been down to the language barrier. In mid-September an Arabic speaking colleague drove to the garage, to be told that they did not have the required spare parts in stock.

VW has a dedicated customer service phone line, which TheEDGE called to address the matter.

On October 8, Jean Paul Abbosh, general aftersales manager of Audi and Volkswagen Q-Auto responded.

“We regret that our client could not have her problem solved through the previous dealer,” continued Abbosh, “At the time our

it is evident that some of the employees are not trained to deal with customer complaints properly.

HUMAN RESOURCES

TheEDGE74

client delivered her vehicle to our facility in August, we were in a transition period; however our priority was and still is to serve our customers and to ensure their full satisfaction. We assure her that we are taking her observations into serious consideration to continuously improve our services. We hope to see our client soon in our facility and we will give her our full support.”

A few days after the call, the car was finally returned after two months in the garage.

a RElUCTaNCE TO ENGaGEThere seems to be a reluctance in engaging

with the customer in Doha, and it is not just the case in the motor vehicle service industry.

According to another woman customer, which touches on another concern many customers have in Qatar, employees are not encouraged to ‘think outside the box’ in order to solve problems and incidents. “Last December while eating lunch at Biella at Landmark, I ordered the Fagioli soup,” she said, “Fagioli is Italian for bean. When they brought my soup, it was basically broth with tiny pieces of vegetable. I explained to the staff that this soup was supposed to have beans in it and they said “no have”. She added that she even pointed out that there was a supermarket in the same shopping mall, which would have sold the beans needed.

Following the incident of the meal at the Italian restaurant, TheEDGE contacted Biella via their Facebook page on the October 3. They responded the next day and stated that all menu items are strictly controlled, and claimed that Fagioli soup was not on the menu in any of its restaurants in November or December last year.

Peter Lyons, operations manger of Siddiqi Hospitality explained, “It is however true that Qatar has supply issues and these issues often leave many establishments without key items at short notice.” Lyons also denied

there seems to be a reluctance in Doha to engage with the customer, and it is not just a case in the motor vehicle service industry.

that Biella does not allow its employees to think for themselves. “We can state from experience that Qatar does have an abundance of repetitive, almost robotic service – but Biella’s training programmes have been developed to break the mould. We feel our employees are among the best trained within the casual dining sector,” he argued.

The differing accounts from customer and company here aside, this incident also highlights a few related issues. There is, from developed countries a certain expectaion especially dealing with known international brands – which often for many reasons, such those offered above, cannot be met despite the best of intentions. Going back to the training and communication issue, the two cornerstones of customer service should translate to staff engagement with the consumer.

laCK OF COMMUNICaTIONThe Communicaid group, a worldwide

skills consultancy, says good communication is absolutely vital when dealing with customers. “Demonstrating to customers that we are listening to them and value their feedback, combined with the ability to convey clear messages with warmth, will enhance customers’ experience,” they advise.

However, this was not the experience a male customer had when shopping at Carrefour City Center. He tried to return a faulty steam mop to the store and was told by the supervisor that they could not help him, therefore, he asked for the duty manager, and was told that in fact was not on duty at the time. “So, I asked for the manager. He simply talked over me, repeating again and again that ‘my maid had broken it’, but I don’t have a maid. The end result is a customer who has taken their business away – all for the sake of replacing a QR500 appliance.”

Meanwhile, another Carrefour customer

was double charged for her shopping when paying by credit card at Carrefour City Center. “There was a timeout,” she said, “But I received an SMS showing the debit from my account. They said that the payment hadn’t worked and I would have to do it again, that it was normal.”

According to the woman, two payments were taken from her account, despite assurances to the contrary.

Nearly a month later, despite calls to management and emails between Carrefour and her bank, she still has not been refunded. She claims she asked Carrefour for a goodwill gesture to reflect the amount of time she has spent chasing the payment herself.

“But the manager told me that it was not in their policy to offer any kind of goodwill gesture,” she concluded.

Once again, TheEDGE took action and e-mailed several listed contacts on the Carrefour Qatar website, but received no response. The manager of Carrefour City Center referred TheEDGE to the head office in Dubai, United Arab Emirates. After unsuccessful attempts of constant phoning for days, TheEDGE was unable to publish a response from Carrefour.

MIxED RESPONSE aND SERVICETheEDGE had a few pleasant surprises

while compiling this article. In some cases, responses were quick, and companies were proactive.

Despite being accused by many of poor after-sales service. Qtel, for example, was quick to respond and follow up. However, TheEDGE did experience frustration, with some companies finding telephones unanswered, e-mails not responded to and conversations with employees challenging to say the least.

This highlights how hard it often is for customers to have their voices heard in Qatar. While there are good examples out there and one can only hope that customer service levels in Qatar will improve.

HUMAN RESOURCES

TheEDGE 75

Got a bad (or good) Qatar customer service story? Email [email protected] or write to us on Twitter or Facebook to share your experience.

England this wasn’t an issue. They were quite happy to take knowledge from the East.”

Dr. Turkmani is also a specialist in the history of Islamic science and its influence on Europe during the scientific revolution. The exhibition Arabick Roots that exists primarily thanks to her will be on display at the Museum of Islamic Art that traces the rich connections between the scientific pioneers in the Muslim civilisation and 17th century Europe’s greatest scholars and scientists.

Prior to the fall of Rome the lingua franca of science was Latin, but the rise of the Muslim civilisation lead to these works being translated and preserved in Arabic, making it the new medium of communication for science. “At the time if you wanted to be a better scientist you had to know Arabic, many of the famous names in science like the astronomer Edmond Halley after whom the Halley’s comet is named, or Robert Boyle famous for Boyle’s Law all knew Arabic simply because that was the best way for them to access this knowledge,” Bhatti points out.

In fact, the Royal Society London, which is the oldest academy of science in the world was visited by numerous ambassadors and dignitaries from the Muslim world who brought with them knowledge and technology that was later expounded upon. “It was trade that created the peaceful and beneficial links for both sides. Traders looked at things from a different perspective, it’s an investment and they knew that, knowledge is investment and they utilised that for the sake of trade,” concludes Dr Turkmani.

With no lack of finance or imagination, what Qatar is most likely to face is a human resource issues – probably not in wage or labour disputes, but in hiring challenges for the massive Lusail project. Bernard Ward, country manager at Reed Global in Doha, warns that “perception is reality for people.” Candidates may assume that political unrest in some parts of the Middle East have affected every region. Ward, who has his eye on engineers with high-tech experience from Germany, Eire and Australia, says his team is “having to work very hard” to change that popular impression. Likewise, GCC-centred recruitment consultant Aaron Bennett expects a “huge shortfall” of specialised managers.

James Coburn, manager at Talent2 in Qatar says the economic slowdown in the European Union has boosted his recruitment pool. Instead, it is the length of the projects, many lasting more than five years, which can deter some candidates. The shortage of school places is another issue. Coburn admits that many in the industry consider Qatar’s 2020 infrastructure plans “unrealistic,” Australia remains a difficult recruitment market because of the strength of their own mining industry. However, Coburn’s summary is that the task at hand is “difficult but not impossible.”

Back in 2007, Qatari posters on online international construction forum Skyscrapercity dismissed Lusail as “uninspired overkill.” For example, Aviduser was concerned that “It’s too big…there is no way Doha can attract enough people here to take up all the flats being built now, let alone after the Pearl has been built.” He complained about “blocks and blocks of uninspiring low rises…with no pools. I thought it looked a bit like the cheaper suburbs of Amsterdam.”

Lusail was also described as a “town outside a town” rather than a destination.

Since then more impressive architecture has been planned for the waterfront, including the five-star Lusail Marina Tower, whose striking ‘cross sword’ design with arched towers is inspired by the insignia of Qatar.

Indeed, if everything goes to plan, Lusail should become an attraction in its own right, with the US$500 million (QR180 million) Entertainment City assigned theme parks, a water park, cineplex, theatre, bowling alley, speciality shopping and fine dining restaurants.

The CEO of Abu Dhabi Investment House, Rashad Janahi, has described it as a “fusion of traditional Arabic hospitality and contemporary leisure lifestyles.” Designers will take inspiration from the region’s notorious traders and seafarers, 9th century Arabic castles, forts, winding stonewalls, courtyards and lost kingdoms. And in the final analysis, for all Lusail’s high technology, it could well be that Qatar’s long-distant past is the key to its success in the 2020s and beyond.

CITy OF lIGhT

ThE GIFTS OF TRaDE FROM a FORGOTTEN CIVIlISaTION

ancient civilisations of the Greeks and Romans that were destroyed in Europe, but kept intact in the Muslim civilisation. These were used as a basis for new discoveries, pioneering new techniques, new ways of looking at the world, and gaining a better understanding of how the universe works,” Bhatti adds.

OSMOSIS OF SCIENCE aND TEChNOlOGy

“What’s interesting,” says Bhatti, “is that you had mainland Catholic Europe, and they viewed the Muslim world and even science as backward at the time, whereas in Protestant

TheEDGE76

SPILLOVER

1001 INVENTIONS (17OCT - 12NOV) MIa PaRK – Showcases a thousand years of scientific and cultural achievements from the Muslim civilisation and how those contributions helped establish the foundations of the modern worldaRaBICK ROOTS (17OCT - 19jaN) MIa PaRK – Unveils the rich connections between scientific pioneers in the Muslim Civilisation and 17th century Europe’s greatest scholars and scientists.

Continued from page 57

Continued from page 61

• International law Firm assists Qatar’s Public-Private Sectors TheEDGE spoke exclusively with international law firm Pinsent and Masons about their work in Qatar and the future of healthcare data protection. (P.80)

BUSINESS INSIGHT

alSO IN ThIS SECTION:

TOWaRDS a NEW PaRaDIGM IN CSR (P.78)TheEDGE spoke with Lord Michael Hastings,

global head of citizenship at KPMG, about the role organisations in the private sector can play in

solving universal social problems.

InsIde The MInds of leAdIng BusIness fIguRes

communities is equally important as our support for clients. The second is, our commitment to build to our peoples’ capacity and capabilities to support our clients, and these have to be held in mutual respect, as you cannot build a business purely on the grounds that it will extract maximum value from the client, as well as seek to give to the client. It is a set of relationships and a set of knowledge-based experiences. KPMG has very much underpinned our client relationships and our people development with our community engagement.

how can firms develop a cohesive vision?Well, our programmes are all based on

the need to recognise our responsibility to the wider world, that is we need to confront really difficult, complicated and challenging demands. For example we have made a strident commitment that we will be a maximum sustainability enterprise – we will manage our carbon impacts down, improve our efficiency at energy use and actively demonstrate to our people why it is relevant for them to do that. To do that in a non-manufacturing, non-industrial and a non-physical products environment is quite a challenging task. You have to persuade people that being in offices, travelling around in cars, flying around in aeroplanes actually has a significant, meaningful impact to our environment and we must minimise that, that is the first thing.

The second is that we all work within privileged environments, even our client bases in difficult countries such as in Sub-Saharan Africa or parts of

Towards a new paradigm in corporate responsibility

Corporate Social Responsibility

BUSINESSINSIGHT

TheEDGE78

you have spoken at length about large organisations having a responsibility to play a part in global sustainability. Is there a sort of global framework that all companies can apply?

We do have a global framework within KPMG that our member firms can apply. What it states first of all, is that our engagement with

TheEDGE spoke exclusively with Lord Michael Hastings, global head of citizenship at KPMG about the role organisations in the private sector can play in alleviating universal problems such as poverty, gender inequalities, damage to the environment and how it is in firms’ long-term best interests to take an active role in affecting this change.

South East Asia are still privileged environments, but we have a challenge that must take us to the far edges of the underprivileged in those environments, we have to have a commitment towards the alleviation of poverty, the support of education, and the empowerment of women.

Is it difficult getting firms to adopt these stances?

If you talk about sustainability, carbon or poverty and hunger or education, people sort of go ‘yeah I get that’, the minute you get onto talking about the expectations of a junior auditor, somebody in their twenties, that they should seek to lead a revolution of effective involvement in another part of the world, or in the neighbouring community they begin to shudder and say ‘what’s that, how do I do that, what has that got to do with me or isn’t that what the government is for, isn’t that what NGO’s are for, isn’t that what international agencies are for?’ and to which the answer is yes, but they are not achieving all of the final outcomes. You also have a place to play in this arena, every individual of our one hundred and fifty three thousand people of KPMG, every single one should choose to be a leader. And I am very convinced that if we can persuade the majority of our people to choose, to take on a challenging commitment in their city, in their country or in the wider world they will be better people for it.

Does this impetus need to come from individuals within the organisation to help,

executives and chairmen of major corporations who share this vision and they exemplify that very powerfully at the World Economic Forum and its many conferences every year. They also exemplified it at the world Islamic Economic Forum where I spoke just a couple of weeks ago at their round table in London, and these particular business forums are saying that actually business leaders firmly believe that if you are in the long term business of preparing for extraction, building innovative solutions or designing alternatives which are profitable, then you have a duty as a business leader to engage the government as well to challenge short term government thinking with long term objectives for change. This has become an interesting new territory where business previously would have not entered.

What are your thoughts on the Qatar 2030 vision, have you seen a national outline of a country working towards a single goal anywhere else?

Interestingly, probably the best example of a country in modern times that had clear focus decision with a time frame was Singapore. That has been an inspiration now to many states. It is a single city of five million people, but effectively it is treated like a country of fifty million, its economic imprint on the world is enormous but yet it is literally a small island just tucked under Malaysia, and yet it can resonate around the globe. It is great that Qatar has a 2030 Vision because what it means is that the country gets everybody to engage into the mix between economic and social development goals at the same time, and work on those as collective commitments and actually move away from the idea that this is the business of government alone.

Without a common vision all you have are people grabbing what they can and then you get urban chaos and social dysfunction, which often creates irreversible damage. I think that it is incredibly impressive that Qatar has made that stance, and we hope we can play an active role in being able to achieve these goals.

profit in the short term, they would think about the sustainability profit in the long term, as many businesses within the consumer products industries have done. For example organisations using water as a resource have a remit to return water back to the natural environment rather than to just take it, they are choosing to make the quality of their investment overmatch their extraction. So they are building a sustainable supply of water, they are working on ways to return the resource back to the ground in order that the company becomes a provider of a holistic circle of sustainability. Now that comes from a culture of leadership at the top of the business that defines the role of the business as a multi-stakeholder enterprise, what the Harvard Business Review now calls ‘share value’.

When it comes to environmental issues how do you get countries to look past short term goals and focus on the long term?

This is where you are right up against it, because in the democratic north as it were or even now in increasingly democratic south, the political cycles are very short term, and because they are short term it means that often visionary decision-making is short term, but business planning is not. Business planning has to be in the very, very long term. Now there is a consensus among business leadership that was shown very evidently at the RIO +20 Summit in June this year, where I saw vast numbers of business leaders coming who had not come 20 years ago when the Rio principles were founded but they came 20 years on, because they feel that the issues of water security, food security and sustainable natural environment, the end of poverty, the fair distribution of educational resources, the end of cultural corruption are all also business issues, not just political issues.

are you seeing organisations in the private sector taking an active role in developing long-term strategies with a focus on sustainability?

Since investment is in the long term and I do genuinely believe, it is not just a personal conviction, thankfully there are many chief

TheEDGE 79

BUSINESSINSIGHT

“The fair distribution of educational resources, the end of cultural corruption are all also business issues, not just political issues,” says lord hastings.

or is it a matter of using organisational resources to help communities?

Well, the organisational resources are the critical skills of the individual. KPMG will invest a lot of time and money in developing the skills of our tax advisors, our business consultants and our auditors. That means that they have intense analytical capacity, sharp and absolutely riveting minds, they know how to analyse issues from top to bottom, they can look for strategic solutions, find efficiencies in programmes and manage resources well. Those are gifts that KPMG has invested in, the time that people have is an investment, if you put the combination of skills and time together, you have a resource and that resource is the person’s passion, and if that passion can deliver an answer than that is what we are looking for.

Can you give us an example of someone at KPMG using his or her skills to solve a problem?

I have just been talking to, literally in the last week, a young audit manager from the Des Moines, Iowa office in the United States (US). In our Des Moines office there are forty people and one partner, this young man started working three years ago to support women in Ethiopia who have been trapped in Addis Ababa in slavery and in particular sex trafficking. And the way he is helping is by taking the product made by these women and young men which are beautifully crafted silk scarves, transporting them to the US, selling them in the university networks around the northern part of the US. That money provides the women with a route out of slavery into separated housing, pays for a year of private education for them and gets them into enterprises that empower them to be free of slavery. Now that is a leadership act, and you could leave that to – you could say that the Red Cross or the Red Crescent should do that and, the answer is yes they should do that, but so could you.

There is a perception that everything is driven by the bottom line, especially in the private sector, how do you get companies to refocus their aims?

I think that you have to start with the conviction of the chairman, the chief executive of the board of a company. I have to believe that their remit in the world is beyond the extraction of resources or the manufacturing of products and the profit that comes from those activities. If they see it as beyond that then they would make a choice that instead of maximising out on

develop some of the first public-private partnership (PPP) models?

We have been able to take our expertise and apply it to many international jurisdictions, where public and private clients have been seeking ways of working together to share the risk and reward of major infrastructure projects. We have also developed significant expertise in all the related areas of law including procurement, planning, dispute resolution, environmental law and real estate. As well as having been involved in negotiating and drafting the first PPP hospital contracts in the United Kingdom (UK) from scratch, we have also advised governments in the Gulf including Kuwait on its first PPP healthcare project. Our key sectors of work have included urban regeneration, sports stadia and athletes’ accommodation, ports and harbours, schools and education, healthcare, housing, prisons, hotels, waste management, water and wastewater, roads and transport.

Can you elaborate more in regards to Pinsent Manson’s expertise in the energy industry?

Pinsent Masons’ expertise dates back decades to our role in advising the UK government on the privatisation of the UK energy industry. Since then, we have built an international practice, which spans the whole spectrum of the energy industry, from

International Law Firm assists Qatar’s public-private projects

Legal Sector

BUSINESSINSIGHT

TheEDGE80

International law firm Pinsent Masons operates under the license of Qatar Financial Centre authority. how has Pinsent Masons been working closely with Qatari clients and their business over the past 10 years? Lawyers in the Doha office have been working on major infrastructure projects, upstream and downstream energy projects and a diverse range of assignments in the financial services sector. The Doha office is conscious of the need to be active on the ground, and attentive to the changing landscape and priorities of Qatar and its community, bringing its experience in many other sectors, such as healthcare and insurance. In these sectors, we take time out and organise meetings with key stakeholders and participants to share knowledge and better understand the local market’s particular needs. In support of the educational and learning needs of Qatar, we look to arrange thought provoking and expert seminars and roundtables, and the firm also has a great interest in continuing its work with the Faculty of Law at Qatar University to assist in the development of young and talented Qatari lawyers, including work experience in our offices here in Doha and internationally.

how has Pinsent Masons worked with the public and private sectors to help

International Law Firm Pinsent Masons has been operating in the Gulf region for more than three decades, and in Doha their lawyers have been working on major infrastructure projects, energy projects and in the financial services sector. Erika Widén spoke to James Elwen, partner and head of Pinsent Masons office in Doha about how the firm has worked closely with the Qatari public and private sector, and why Qatar should enact laws to protect health data.

together, and must have access to advanced clinical algorithms and a suitable patient management system. Having met the needs of the patient and generated a large amount of personal information, which will typically be very sensitive in nature, a number of issues arise. For example, the need to ensure that the data retained is made available for use by other healthcare professionals who subsequently treat the patient, potentially in an emergency situation.

What are the challenges associated with the cross-border/no-border nature of e-health as a concept?

A number of key challenges exist in relation to the gathering, maintenance and use of data in a cross-border environment. For example, the need to take account of the specific characteristics of a local population, for instance recognition that healthcare service provided by staff based outside a given region is less likely to be able to identify certain conditions that are perhaps localised or more prevalent in that region than elsewhere. Similarly, the need to understand local custom and sensitivities in relation to particular types of ailment or an unwillingness to discuss sensitive issues with someone who is unknown, or of the opposite gender.

What other seminars does Pinsent Masons have on their agenda and why are those seminars important?

We are continually looking to provide the highest quality of roundtables and seminars in support of the Qatar Vision 2030 and where the market and our clients are interested in well-informed debate – we see healthcare as a particularly exciting but challenging area, so we will look to deliver more meetings in particular areas of interest, as we are also doing in other areas of focus for us such as construction, energy and financial services – they must critically be relevant and targeted towards the special requirements of Qatar.

oil supermajors and utilities to independent developers, equipment suppliers and financiers. We have been involved in some of the world’s largest oil and gas infrastructure projects from the outset of the project lifecycle through to dispute avoidance and dispute resolution.

Can you talk little more about Pinsent Masons’ professional and financial services practice?

In Qatar, we are able to support Qatar’s initiatives to grow the financial services sector that is so important to a thriving diversified economy. As well as transactional legal support such as bond issues, we can advise commercial agreements and structures as well as the application of rules and regulations of the Qatar regulators, including those of the Qatar Financial Centre. We can also provide ‘healthchecks’ to help businesses in managing risk and to assess the status of compliance. Our expertise includes banking, asset management, insurance and healthcare.

The healthcare sector is a key focus of your practice. Why is this important for Qatar?

Human development is a pillar of the Qatar Vision 2030. As part of this development, the government has developed a National Health Strategy through to 2016. This is a priority area for Qatar. The delivery of such plans around the world has proven to be very challenging and expensive. The healthcare sector is a key focus of our business, where we have worked with both governments and the private sector across the world in the planning for and securing of solutions and successful outcomes in wide ranging healthcare assignments. We think we can assist in helping in the successful planning and implementation, sharing our knowledge and experience. We can advise on on legislative and regulatory frameworks, infrastructure development and financing projects, privatisations, joint ventures, and other commercial partnerships with a deep understanding of the critical areas of patient confidentiality and ethical requirements, as well as cross-border implications which are increasingly at the heart of medical research, education, diagnosis and treatment.

PwC and Pinsent Masons recently organised a roundtable seminar to explore an e-health strategy as part of the National health Strategy 2011-1016

TheEDGE 81

BUSINESSINSIGHT

“The Doha office is conscious of the need to be active on the ground and attentive to the changing landscape and priorities of Qatar and its community, bringing its experience in many other sectors, such as healthcare,”– says james Elwento consider enacting laws that will ensure adequate protection of health data. What main points were discussed during the seminar and what was the outcome?

Security and rights connected with health data is obviously a critical area for the international and national governments to address, and this was discussed at some length. Globalisation of healthcare is such that health information is likely to be moving across the world to secure the best standards of care. Accurate data is also key to ensure that the right information is available to provide the right treatment. Having the most appropriate data protection laws and regulations that are consistent with international standards and which can facilitate the best healthcare, preventing unreasonable transfer and holding of data abroad, is a paramount issue – this was recognised by the participants at the e-Health roundtable. However, there is also a need to ensure the international standards are reviewed and debated – Qatar is already renowned for its thought leadership in such areas of international significance.

Why is ensuring protection of e-health strategy data important and why does Qatar need it? What are the wide range of opportunities the e-health initiative has to offer?

The high cost associated with the use of a static network of surgeries and hospitals as the primary means of assessing and treating minor ailments or health related queries is driving a rapid expansion in the adoption of e-health and m-health solutions. By providing healthcare services over the telephone and via the Internet, a mix of clinical and non-clinical staff, based in a small number of centralised locations, can be used to triage, monitor, advise and onward refer non-emergency patients. In order to operate on that remote access basis, clinicians and information technology (IT) providers have to work closely

To celebrate 40 years since brand ambassador Eugene A. Cernan’s legendary last moonwalk, OMEGA introduces the Speedmaster Moonwatch Apollo XVII 40th Anniversary Limited Edition, a timepiece whose innovative technology and commemorative design serve as a lasting tribute to human ingenuity and the exploration of space. The unique and striking dial is protected by a scratch-resistant sapphire crystal on a 42mm polished and brushed stainless steel case with a black tachymeter scale, and is presented on a stainless steel bracelet. This historical timepiece has been produced in an edition limited to 1972 pieces, and is water resistant to 50 metres.

Sony, the leading consumer electronics brand, unveiled recently its latest BRAVIA LCD television in the industry’s largest 84-inch class. The TV boasts a 4K (3840 x 2160) LCD panel, comprising 8.29 megapixels, which is four times the resolution of full high definition standard. Additionally, the TV incorporates Sony’s proprietary ‘4K X-Reality PRO’ super-resolution high-picture quality engine.Seamlessly delivering high-resolution large-screen picture with powerful sound and visuals to provide an immersive theatre-like experience, the latest BRAVIA LCD television marks a distinctive entry with its unique features.

Available at all Fifty One East outlets starting November 20.

TheEDGE82

PRODUCTS & REVIEWS

Though previously associated with what is now the world’s most valuable company, Apple, Silicon Valley alumni Guy Kawasaki is probably best known now for his website Holy Kaw, and his rounds on the international ‘marketing guru’ talk circuit (he visited Doha in 2011) and his many books. The blog reference is particularly pertinent because that is how this offering comes across, as a series of web pages churned out as traditional print and bound into this volume. Even the subtitle could be the title to a blog: ‘The Irreverent Guide to Outsmarting, Outmanaging and Outmarking Your Competition’. There is a great deal of useful information in this book regarding starting a business, what it takes to be an entrepreneur, innovation, being smart and being devious insomuch as beating the competition to the profit punch etcetera. There is some tight punchy writing and also plenty of snappily titled blog-like lists (‘Seven Sins of Solutions’) which means that much like a website you can open it almost anywhere and start reading Kawasaki’s market mantras and become like, enlightened man. And as the cash yogi himself says, “Why? Because a book boots up faster than a blog.” Profound, indeed.Available at Virgin Megastore for QR81.

Canon Middle East has launched the imageFORMULA Flatbed Scanner Unit 201 for versatile and high-speed A3 document capture. It extends the capability of Canon’s high-performance imageFORMULA scanners by allowing users to optionally add the Flatbed Scanner Unit 201 to scan bound documents such as large books, journals and magazines. The imageFORMULA Flatbed Scanner Unit 201 scans a full A3 document in only 3.5 seconds and inherits a range of advanced high-quality image processing features offered by the connected imageFORMULA DR-series scanners such as Deskew, Auto Size Detection and MultiStream, helping users to consistently maintain high quality scans every time. In addition, the new device is surprisingly compact for an A3 flatbed scanner, meaning it can easily be placed within any scanning station where space is limited.

NEW CaNON a3 FlaTBED IMAGEFOrMuLA SCANNErS

REaD IT: rEALIty CHECK

OMEGa MOONWATCH

Sony Unveils 4K LCD TV

10TEN THINGS

TheEDGE84

The world of technology is one that is constantly evolving, and some of the devices that have been a staple in our life could soon be disappearing, only to be replaced by newer, more impressive technology. Shehan Mashood looks at 10 technologies that could vanish in the future.

TECHNOLOGIES that may dISAPPEAR SOON

WireD internetWhile fibre optic cables are still being

laid in Qatar, certain places are making the jump to wireless networks such as WiMAX (delivering wireless access to users with broadband speeds). As the usage of mobile devices to access the Internet grows, so will the need for wireless Internet and this will perhaps lead to phasing out of wired Internet services at home completely.

FaMily CaMeras/CaMCorDersDigital cameras and camcorders are

already in steep decline thanks to smartphones with high quality cameras embedded with high megapixels rates and high-definition (HD) video. However, specialist cameras for professional photographers and video producers will still be around.

DiGital DisCsThe battles for digital discs to survive

are twofold. The first is the evolution of electronic devices. As they get smaller, hardware is like disc readers are sacrificed for the sake of space. Secondly, it is becoming cheaper to use online distribution networks for media content such as Netflix for streaming movies or the iTunes store.

harD DisK Drives (hDD)This has been the primary source of

data storage for more than 50 years, but

technology such as solid state drives (SSD) allows computers to start in seconds, read and write files faster, and without the moving parts of hard disks, accept more wear. Currently SSDs are too expensive, but we will eventually replace the whirring disks in computers today.

lanDline telephonesAs the ubiquity of mobile phones grows

and technology such as VOIP (voice over internet protocol) evolves, homes and offices are moving away from landlines. As of 2011 almost one third of households in the United States had only wireless telephones.

reMote ControlsHome technology is moving towards

centralised control systems or intelligent self-learning devices. Remote controls will certainly be replaced by smartphone applications and a combination of voice and gesture activation technologies when it comes to home electronics.

FaCsiMile (Fax) MaChinesEver since e-mail went mainstream

people have been talking about the demise of fax but it has somehow managed to last. The one thing working for it was being able to verify where documents came from to confirm its authenticity. But now, with digital signatures along with third party verification

software we might finally see the demise of fax machines.

hanDhelD GaMinG DeviCesDedicated handheld gaming devices are

unlikely to last long in their current form. They face the same problems personal digital cameras do and might end up going the same way. As mobiles phones and tablet devices increase in processing power, more gamers will switch to these platforms.

poWer CorDsThe wires that power everything from your

television to your laptop could all soon be replaced with wireless charging technology. In fact the technology already exists, but the uptake has been slow. As mobile device usage increases batteries are finding it hard to meet expectations, wireless charging ‘hot-spots’ could finally get the push it needs to start phasing out power cables.

CreDit CarDsAs a technology the credit card has

not evolved much, aside from security upgrades since they were first introduced into the market some decades ago. Newer technologies allow you to make payments wirelessly using electronic devices. As everything that used to be in your wallet migrates to your smartphone, the same could happen to credit cards.

TheEDGE

the edge - nov 2012 (issue 38)

Documents

reason qatar

qatars banking

qatars leadership

t h e e d g e

qatars lng supply deals

global problems

global leader

global head of citizenship