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CONTENTSw w w . h d g - m . c m 2011
CONTENTS
1TheEDGE
ON THE COVERBusinesses and private individuals
continually face threats from cyber
criminals and their secret weapons in the
ght to crack computer users security.
Mark van Dijk les an up-to-date reporton this subject and provides tips to
business owners to prevent intrusion into
their systems by hackers. (Page 48)
maRkET waTCH
World and local markets,commodities and reinsurance update.
INSIdE EdgEQatars banking sector scrutinised.
SpECIal REpORTThe Qatar economys rapid growth.
ECONOmICBaROmETERThe effect of credit ratings
agencies on the global economy.
.36.
.38.
.40.
.44.
FINANCE &ECONOMICS
FEaTURE STORYErika Widn on Qatars green
building capital.
BUSINESS INTERVIEwExclusive interview with GEs CEO
and president Nabil Habayeb.
ON THE pUlSEMedia transparency vs. GDP.
.56.
.60.
.64.
FEAuES
BUSINESSmaNagEmENT
The must-have career paths ofthe future.
Small BUSINESSkNOw-HOwUsing e-commerce to create
income for small businesses.
maRkETINg & dESIgNDesign dos and donts.
lEgal INSIgHTQatars Information Protection laws.
.68.
.70.
.72.
.74.
KNOWLEDGE &EXPEISE
5
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FROm THE EdITOR
CONTRIBUTORS
NEwS ETCETERa
QaTaR ImpaCT
dOHa dIaRY
mIddlE EaST maTTERS
ENERgY aNd RESEaRCH
COUNTRY FOCUS
SpECIal FOCUS
TRaVEl & lIFESTYlE
10 THINgS
.06.
.07.
.08.
.16.
.18.
.20.
.23.
.30.
.32.
.83.
.88.
CONTENTS
REGuLAS
BuSINESS INSIGH
BUSINESS INSIgHT INTERVIEwSIncoming CEO for Standard Chartered Bank in Qatar
Charles Carlson discusses their mobile device banking
application Breeze, and new Microsoft Country
Manager for Qatar, Naim Yazbek, talks about the brands
operations in the state.
.77.
80
8
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FROMTHE EDITOR
Clichs about
change abound, but
the one that rst
springs to mind is
that it is constant.
All around us life
is always evolving.
Perhaps the only aspects that are as enduring
as change are the uncertainties we all face
about what mightactually happen in the
future over which we have no sway and
how we personally can affect or inuencechange over the things which we docontrol.
Perhaps it is tting then, with all that is
so uncertain around us the Arab Spring,
fragile diplomatic and political relationships,
the fragile economies of the United States
(US) and Europe, and ongoing natural
disasters this topic was on my mind.
It is probably best exemplied though
in the economic volatility of current times
(as I write this the US and European stock
markets are plummeting and the threat of
Greek default could still drown the common
currency and pull down the whole worldseconomy). With so many people suffering
from poverty, unemployment and the
stress of a future with rapidly decreasing
opportunities around the world, these modern
times are deeply unsettling to many.
Of course, here in Qatar, which was
recently announced as the worlds fastest
growing economy (see page 40), if the
world markets were to really retract (and
gross domestic product growth to be slashed
by up to 50 percent in some established
economies, as some predict), Doha would be
largely buffered by its hydrocarbon wealth.Still, in the current age, but especially in
an economic sense (as 2008s downturn so
blatantly exposed), everyone is connected
and a world nancial shift will affect Qatar.
Closely tied to the above train of
thought, are sovereign and corporate credit
ratings, carried by the so-called big three
FROM
Firefly Communications
PO Box 11596, Doha , Qatar
Tel: +974 44340360
Fax: +974 44340359
www.firefly-me.com
theEDGE is printed monthly 2011 Firefly Commnications. All material strictly copyright and all rights reserved. eprodction in whole or in part, withot the prior written permission of FireflyCommnications, is strictly forbidden. All content is believed to be factal at the time of pblication. iews expressed by contribtors are their own derived opinions and not necessarily endorsed bytheEDGEor Firefly Commnications. No responsibility or liability is accepted by the editorial sta or the pblishers for any loss occasioned to any individal or company, legal or physical, acting orrefraining from action as a reslt of any statement, fact, figre, expression of opinion or belief contained in theEDGE. he pblisher (Firefly Commnications) does not ocially endorse any advertising oradvertorial content for third party prodcts. Photography/image credits and copyright, where not specifically stated, are that of Shtterstock and/or iStock Photo.
PuBlIcaTIons dIREcToRMohamed [email protected]
managIng EdIToRMiles [email protected]
dEPuTy EdIToRErika [email protected]
REgIonal salEs dIREcToRJulia [email protected]
+974 66880228
sEnIoR salEs managEREmma [email protected]+974 33197446
salEs managERsPierre Le [email protected]+974 55997802Joseph [email protected]+974 33675301
dIsTRIBuTIon & suBscRIPTIonsAzqa [email protected]+974 55692471
cREaTIVE dIREcToRRoula Zinati Ayoub
dEsIgn cooRdInaTIonCharbel Najem
dEsIgnERSarah Jabari
FInalIsERMichael Logaring
PhoTogRaPhERHerbert Villadelrey
PRInTEd ByAli Bin Ali Printing Press, Doha, Qatar
of Standard & Poors, Fitch and Moodys,
which many feel carry too much inuence.
This topic is unpacked and analysed by our
economic correspondent Karim Nakhle on
page 44.
Elsewhere in the issue we look at changes
or at least proposed changes to policy and
legislation that might or will affect the energy
sector and construction industry in Qatar on
pages 23 and 56 respectively.
The former is related to a change of our
own. As you will see, we have formed a newsection, Energy and Research, to cover in
more regular detail news and issues relating
to the sector, among other adjustments to the
magazine that we hope you will appreciate.
TheEDGE6
THE EDITOR
About TheEDGE:theEDGEis an ambitios bsinessmagazine targeting professionalsoperating within Qatars mlti-sector
bsiness landscape. Printed monthly,theEDGE was lanched in Jly 2009to fill the market void and to providethe bsiness commnity with insightinto the latest bsiness trends andmarket developments. theEDGEisdistribted 11 times yearly to a readershipbase of more than 7500 professionals,providing advertisers with the neededadditional reach and freqency to theirmost important and aent adience.theEDGEis an athoritative bsinessresorce serving both large and smallbsiness operators.
Miles Masterson, Managing Editor
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P. 24RudI TschERnIng
Director, Forum on
Energy & Env. Law, Qatar
University, Doha, Qatar
P.42JanaK PaTwaRI
Manager Business
Performance, KPMG
Doha, Qatar
P. 24JamEs ElwEn
Managing Partner
McGrigors LLP Law Firm
Doha, Qatar
P. 84VIcToRIa scoTTJournalistDoha, Qatar
P. 52RachEl moRRIs
Journalist
MENA Region
Doha, Qatar
FEaTuREdconTRIBuToRmaRK Van dIJKMark van Dijk is a CapeTown-based journalist whocovers a range of business,
from travel and sports writingin Time Outtravel guides andthe ocial guide to the 2010Fifa World Cup, to reportsin Global Africa NetworksSouth African businesspublications. A former newseditor at Independent Onlineand features writer for SouthAfrican Sports Illustrated, vanDijk is now deputy editor ofMens Healthin South Africa.
conTRIBuToRs
P. 48
KaRIm naKhlE
Senior Business Strategist
Doha, Qatar
P.64BREnda hIllSenior Legal ConsultantDLA PiperDoha, Qatar
P.64RoBERT madRonIcMarketing InstructorCollege of the North AtlanticDoha, Qatar
P. 25
Tad dRITz
Marketing Manager
Oxford Catalysts
Ohio, United States
P.36dhEERaJ
shahdadPuRI
Analyst
Dubai, UAE
P.38
manJEET chhaBRa
General Manager, Middle
East, Dun and Bradstreet
Dubai, UAE
P.4maTT ghazaRIan
Editorial Contributor
Oxford Business Group
Istanbul, Turkey
P.64EdwaRd JamEson
Senior Business Journalist
MENA Region
London, United Kingdom
P. 68lynda gRaTTon
Professor of Management
Practice, London Business
School, United Kingdom
TheEDGE 7
CONTRIBUTORS
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NEWSETCETERA
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PHOT
OOFTHEMONTH
TheEDGEMAGAZINE
gREEK ausTERITy woEsSeptember, 211, Athens, Greece: Emboldened by thepromise of ever-tougher public austerity measures by theircontinually beleaguered government, university students such as this one peaking through a torn banner protestedin the centre of the Hellenic capital late last month. Shouldthe Greek sovereign default come to pass, as many punditsare fearing it now might, it would almost certainly meantheir exit from the euro zone and could create a nancial
domino eect felt around the world, in the form of themuch feared double dip recession. (Image Corbis)
LIFESTYLENEWS
ETCETERA
9TheEDGE
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mshEIREBPRoPERTIEsREcyclIngsysTEmRecently, Msheireb Properties awarded SwedensENVAC company a major contract to installa fully automated waste recycling system for
its Msheireb Downtown project in Doha. A
representative of Msheireb Properties explainedfurther and exclusively toTheEDGE: Whilethere are other examples of the technologyelsewhere in the Gulf, we believe this is its largestdeployment within a development in the MiddleEast. It is a great example of how we are using
advanced technology along with more traditionalplanning and architectural practices to minimiseenvironmental impacts, and it will encourageoccupants of Msheireb Downtown to adopt moreenvironmentally responsive behaviour.The development of the Msheireb DowntownDoha will be completed in ve phases through
2016. The recycling system will start operatingin tandem with the handover of the variousdevelopments within the project. The technologycan handle around 80 percent of household waste,with three vertical chutes installed in each residentialbuilding, with inlets on each oor. Each is speciallydesigned to handle organic waste such as kitchenrefuse, dry mixed recyclables such as glass, plastic,metal, cardboard packaging, newspapers, and
residual waste such as wet paper, clothes and otherassorted refuse.The systems automated process uses air as amedium to suck the waste through a steel pipe
network to a centralised waste collection terminal.Commercial, retail and residential will have theirown dedicated inlets, while supermarkets, hotels and
other standalone buildings will also get a dedicatedconnection to the network. We are maximising theuse of microclimatic eects through utilising windand sun patterns, maximising water and energyeciency and reducing carbon emissions acrossthe site, added the Msheireb spokesperson. Theproject is aiming to be the worlds rst large scaleurban sustainability community.
TheEDGE1
nEwsEtcetera
NEWSETCETERA
QTEls EBIllIngmaKEs an EnVIRonmEnTal ImPacT
Starting in October 2011, with
the support of ictQatar, e-billingwill be enforced by Qatar
Telecommunications. By removingthe need for hard copy invoicingfor thousands of customers, Qtelhas already been able to reducethe amount of paper used by thecompany, as part of its long term goalof becoming a paperless organisation.Paper bills are still available but
customers will be charged a fee ofQR5 per bill if they wish to continuereceiving them and will have to actively
reactivate this option every six months.Adel Al Mutawa, executive director,group communications, gave anexclusive statement to TheEDGE,saying: Qtel is driving the e-Billing
initiative as part of our vision forCorporate Social Responsibility,For Qatar, Hand in Hand. Our aimis to build sustainable programmesin partnership with the community,which will help to make Qatar a greener, more pleasant place to live and work. Thee-Billing initiative works in concert with a number of other environmental programmes
for Qtel, including eorts to reduce the internal use of paper within the company and our
pioneering e-waste recycling programme. Launched in 2010, this programme provides animmediate and convenient disposal and recycling service. The rst step was to place dropboxes in every Qtel shop and oce to encourage customers and employees to recyclemobile phones. We also hosted Big Drop days to give the community a way to recyclelarger e-waste items. All funds raised by charging for paper bills will go towards expandingthis programme. At Qtel, we take our environmental responsibilities very seriously,because we know that we all have a stake in the future health of Qatar. Qtel is taking the
lead in moving to becoming a fully paper-free environment, and we are investing in theprocesses that will ensure continued convenience for our customers. We are very proudthat our customers have responded so strongly to our environmental initiatives. To date,more than 40,000 accounts belonging to over 25,000 customers have switched to thee-Bill, and we anticipate more customers moving across in the weeks and months ahead.
Adel Al Mutawa, executive director, groupcommunications of Qtel, says that the companys newelectronic billing initiative, the rst in the Qatar, is only asmall part of their environmentally friendly policies.
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NEWSETCETERA
11TheEDGE
REal ESTaTE TRaNSaCTIONS
According to Century 21 Qatars recent real estate
transaction report, released in September and basedon information from the real estate registry in theDepartment in the Ministry of Justice, nearly QR1.46billion in transactions was recorded. As observed,the total value of transactions as compared withthe previous month was down by approximately
six percent. This is directly attributed to the yearlyreduced working hours during the holy month ofRamadan and slow overall market movement duringthe summer season. The transactions are expectedto return to normal later this year. During themonth of August, the most expensive building wastransacted in Umm Salal, valued at QR15 million.The most expensive house was located in Doha, witha transaction value recorded of QR50 million and a
residential compound with a value of QR105 million.
REgIONS CaRRIERS REaCH 140 mIllION
According to The Boston Consulting Group Qatar
Airways and Etihad Airways will be ranked in theglobal top 20 by 2015 and Emirates Airways isto become the worlds largest wide body carrier.Passenger ow to and from the Middle East
increased by 45 million passengers over the ve-yearperiod from 2005 through 2010, and is expected toincrease by another 45 million passengers from 2010through 2015.
QaTaRI dIaR aNd dElaNCEY BUY
lONdON 2012 OlYmpICS VENUE
Recently, Qatari Diar and Delancey workingwith Lifschutz Davidson Sandilands, have beaten
rival developers in the race to buy the 2800-home London 2012 Olympics Athletes Villagein Stratford in the United Kingdom (UK). Theformal announcement ended rivals Wellcome Trustand PLPs GBP1 billion (QR5.6 billion) bid to buythe entire Olympic Park. The village was sold for
GBP557 million (QR3.1 billion) and features 2818 newhomes with potential to build 2000 more. UK culturesecretary Jeremy Hunt said This is a fantastic dealthat will give taxpayers a great return and shows howwe are securing a legacy from Londons Games.
land oF ThE long whITE BusInEss oPPoRTunITyBeset by earthquakes and economic woes, New Zealand has hit the road to drum upbusiness and investment from wealthy Gulf Cooperation Council (GCC) countries.Buoyed by the success of their hosting of the Rugby World Cup 2011, a trade delegationfrom New Zealand visited Qatar last month in a visit called the Middle East Beachhead a three-day programme organised by New Zealand Trade and Enterprise (NZTE) tohelp businesses establish themselves in the region. Sectors being targeted by the visit
included education, healthcare, information technology (IT) and software, manufacturing,meteorology, professional services and telecommunications. New Zealand does not havean embassy in Qatar, but has established a commercial oce in the United Arab Emirates(UAE) and an embassy in Saudi Arabia. New Zealands newly installed trade commissionerfor the Middle East, Africa and Pakistan, Steve Jones said the GCC is already NewZealands sixth largest trading partner and exports to the region grew by 122 percent
between 2000 and 2009.The Middle East region, including Gulf states such as Qatar,clearly presents New Zealand rms with signicant commercial opportunities, Jones saidin Doha. Other areas of cooperation with Qatar include ongoing talks on the issue of foodsecurity, with New Zealand one of the worlds biggest producers of beef and lamb.
QaTaR InTERnaTIonal EnV IRonmEnT PRoTEcTIon and
susTaInaBlE EnERgy ExhIBITIon and conFEREncE (EcoQ)Qatar International Environment Protection and Sustainable Energy Exhibition andConference (EcoQ) is an international annual exhibition and conference taking place in
Qatar for three days, from 16 to 18 October 2011, at the Doha International ExhibitionCentre. The expo will showcase the latest technologies, products on environmentalprotection and sustainable and renewable energy covering various related sectors suchas: solar energy PV, green building, sustainable cities, architecture, recycling technologies,air pollution treatment, eco-friendly transportation, aviation and aerospace, bio-fuel, eco-friendly cooling systems, e-waste, marine protection and reservation and more. In addition,a high prole conference is organised in parallel to the expo to discuss environmentalissues from a regional perspective.
www.eco-q.org
sEPTEmBERIN BIEF
al FaIsal QaTaR acQuIREs
londons w hoTElAl Faisal Holding Company of Qatarrecently acquired Londons W Hotel for
close to GBP200 million (QR 1.1 billion).HE Sheikh Faisal bin Qassim Al Thani,chairman of Al Faisal Holding Company,
said of the purchase: We are delightedto have acquired this iconic landmarkLondon development. Given its [unique]architectural quality, attractive setting andthe strength of the international covenants
of Starwood Hotels and Resorts Worldwideand Mars Retail Group, the addition of theW Hotel to the portfolio reects our clearinvestment focus on high quality assets inprime locations as we continue to grow thebusiness both locally and internationally.
The W Hotel in London was recently purchasedby Qatari company Al Faisal Holding for GBP200million (QR 1.1 billion). (Image Getty)
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211events calendar
TheEDGE12
NEWSETCETERA
-MENA Investment Management Forum 2011
-International Furniture and Dcor Exhibition (INFDE)
0Second Islamic Conference for Financing
0-7th Annual HSE Forum in Energy
Asset Integrity Management in Oil and Gas and Risk Management
-Qatar International Environment Protection Exhibition (ecoQ)
-9Finance and Investment Exhibition
7-9Doha Exhibition Transport and Rail
-02nd Annual Global Petrochemicals Technology Conference
-Air Power Middle East
-9Doha Tribeca Film Festival
ocToBER DOHA, QAA
Our lending capacity of...US$400 billion looks comfortabletoday, but pales in comparisonwith the potential nancingneeds of vulnerable countries.
Christine Lagarde, the new head of theInternational Monetary Fund, warning in lateSeptember that its emergency bail-out fund
may not be adequate to deliver the scale of the support required bycash-strapped states in the near future.
I have spent eight years with the network. Wehave been talking in this part of the world aboutchange, about presidents who stay for decades intheir posts. I thought maybe it is good to give anexample as well, while the network is at the peak ofits performance. Its the right moment.
Outgoing Al Jazeera television network director general Waddah Khanferon allegations that he was forced out due to political pressure.
This years meeting is held amidstlocal, regional and internationalcircumstances the Arab nationsare facing. The most prominentamong them is the developmentsin the Palestinian issue, particularlythe stumbling of the Middle Eastpeace process.
Qatar Prime Minister and Foreign Minister HE Sheikh Hamad bin Jassimbin Jabor Al Thani, chairman of the 136th session of the Arab LeagueCouncils Ministerial meeting, commenting at the recent gathering.
In the latest survey, Qatar has been recognised asthe leading nancial centre in the Middle East forthe rst time by the GFC Index. Qatars latest rise of39 points in the GFC Index to achieve a total of 636points, also maintains its existing ranking of 30th.
Statement from an annual report from the Global Financial Centres Index(GFCI), which was published on 26 September, 2011 and is sponsoredby the QFC Authority. The report rst published in 2007, ranks citiesglobally, according to their importance in the nancial services sector.
nEws In QuoTEs
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wEBsITEEIEWSwEB AND TEch NEWS
NEWSETCETERA
TheEDGE14
BlacK haT aBu dhaBIWith the main event recently held in the United States for the 15th consecutiveyear, The Black Hat Briengs are a series of highly technical informationsecurity conferences that bring together thought leaders from all facets ofthe information security world. Also held in Europe and Asia since 2000, the
second regional version of this event will be held in Abu Dhabi in the UnitedArab Emirates from December 12 to 15. Black Hat is a premiere event for elitesecurity researchers and the best security trainers to nd their audience.www.blackhat.com
QTa wEBsITE goEs moBIlEThe Qatar Tourism Authority has launched a mobile version of its website,giving residents and visitors immediate access to tourist information about
the country. The website, which can be accessed through a mobile browseris designed specically for smart phones, so travel information is alwaysavailable no matter where you are. Like the main site, the mobile site also hasinformation about local tourism operators as well as the latest news from theQTA in a simple, easy-to read-format.
m.qatartourism.gov.qa
FacEBooK and sPoTIFy TEam uP
www.QaTaRsalE.comThis website is essentially a powerful search engine for anyone seekinga used or new car or car rental service in Qatar. Basic and advanced
search engines allow you to look for any kind of car, make, model, year,etcetera, available for sale, in not only Qatar but also through linked
sites in Saudi Arabia and now Lebanon. On the site you can sign up fora free SMS service, which according to the site, is rst for Middle East,to get the latest matches to your search keywords.
www.maRKETwaTch.comMarketWatch, published by Dow Jones, tracks the pulse of marketsfor investors with more than 16 million visitors a month. The site coversbusiness news, personal nance information, real-time commentary
and investment tools and data, with journalists generating hundreds ofstories, videos and market briefs a day from 10 bureaus in the UnitedStates, Europe and Asia.
www.VIsualIzE.mERecently launched and still in trial or beta format, the creators of thisunique website believe that the traditional text resume or curriculumvitae (CV) is boring, lengthy and long overdue for a makeover, so
they have created a website that takes any standard CV and turns theinformation into easy-to-digest graphics, tables, pie charts etcetera.
sTaRlInK launchEs ThE nEw BB81Starlink has launched Blackberrys latest handset, theBlackberry 9810, which is the second generation of thepopular Blackberry Torch. This smartphone is similarin appearance to its predecessor, combining BlackBerrys QWERTYkeyboard design with a high-resolution touchscreen. The 9810 ispowered by the new BlackBerry 7 OS and oers liquid graphics,
an enhanced BlackBerry browser, voice-activated universal search,support for near eld communication (NFC), and additional apps.www.starlinkworld.com
TEch gadgET:
BLACKBEY
Spotify CEO Daniel Ek makes an appearance following a keynote address by Facebook CEOMark Zuckerberg at the Facebook f8 conference on late September in San Francisco, Californiain the United States. His appearance and an ocial announcement cemented rumours that thepopular music website was to collaborate with Facebook, tapping into its vast market of morethan 800 million users and integrating the social network with streaming music. (Image Getty).
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of course the countrys made
no secret of its desire to be
an inuential Middle East,
if not global player, but with
Qatari jets carrying out no-
y-zone missions over Libya and pictures of
the Emir posted across Benghazi, there wasdenitely an added dimension.
This is a topic which has been well
covered, but I wonder if weve considered
what sorts of risks this tiny country took in
putting itself so far into the Libya conict.
For me, the gambles taken were some of
the biggest issues.
For one thing Qatar, along with the United
Arab Emirates, actually joined the NATO
mission. And while the Arab League did give
its backing to the no-y-zone, it was very
much against the actual bombing of Libya
which eventuated. Still, Qatar stayed with theWestern alliance.
It also aligned itself with the rebel base of
Benghazi from a very early stage, and became
the rst Arab nation to recognise the National
Transitional Council (NTC) in late March.
These were all bold moves. Imagine
how they could have backred if other Arab
nations didnt eventually join the chorus?
Qatar also gave a lot of money and
assistance to the NTC in Benghazi. Some
reports say it was worth more than US$400
million (QR1.5 billion). It assisted in selling
and marketing Libyan oil one million
barrels worth which brought in US$129
million (QR470 million) for the rebels at
a crucial time. It went so far as to supply
weapons and training for their ghters.
While you can debate the rights and
wrongs of supplying repower, the rest may
turn out to be inspired. Libyas oil economy,unshackled from the stigma of pariah status,
has the potential to be both a powerful force
and useful for anyone who can get on board.
While in Doha at a donors conference,
the NTC Prime Minister Mahmoud Jibril
said, Qatar rescued us during a crisis, to
help us generate some income. He went on
to say that the Libyan people would be the
ones responsible for restarting Libyas oil
production, but it would not surprise anyone
to see the Qataris alongside them in either
advisory or investment roles.
Physical reconstruction of the country,outside of oil and gas, will be another area of
opportunity. Construction and development
companies in Qatar have already shown what
they can do in a relatively short time. The
desert sands of Libya would provide another
blank canvas for new projects.
And remember what specically made
Qatar rich natural gas. Exploration and
investment in Libyas natural gas reserves,
which some estimates put at 1.5 trillion
cubic metres, has been quite limited. Qatars
experience in turning gas into money would
benet not just Libya, but potential European
markets thirsty for an option other than those
presented by Russia.
So, maybe there is a lesson to be learnt
here. There have been a lot of comparisons
between post-Saddam Iraq and post-Gadda
Libya. And while I dont think you can
directly compare the two conicts Iraq wasan invasion, Libya was essentially an internal
battle the battle for control and regeneration
is not dissimilar.
It needs to be about assistance and support
at the height of the crisis, not simply coming
in post-war and looking for opportunities.
Those who help are unlikely to be forgotten.
At the very least, Qatars prominence in
the Libya conict has meant exposure for the
country; much in the way the 2022 World Cup
brought the worlds attention.
It was the Emir HH Sheikh Hamad bin
Khalifa Al Thani standing front and centrewith French president Nicholas Sarkozy at the
Friends of Libya meeting in Paris, chatting
with British prime minister David Cameron
during the photo call. United States secretary
of state, Hillary Clinton, for example, was
much further off to the side.
Kamahl Santamaria is a Doha-based news
anchor with Al Jazeera English, and host
of the channels business and economics
programme Counting the Cost.
QATARIMPACT
DOHA TOBENGHAZIWhen the Arab Spring as it has become known,began blooming in early 2011, asks Doha-based
news anchor Kml sntmr, who wouldhave thought Qatar would be playing a leadingrole on the military, political and economic front?
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DEFINE THE WAY FORWARDEXCLUSIVE BOUTIQUE, NOW OPEN
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DOHADIARY
1 TheEDGE
much about dust and sandstorms (for which
brave cleaners with an incredible head for
heights can often be seen abseiling down the
side of West Bay buildings with high pressure
hoses in hand, blasting the grime and dust
away to reveal the shining glass cladding once
again) we can certainly make a difference
when it comes to discarding our own rubbish,
be it a can or a wrapper.Like any other city, no area of Doha is
immune, and the amount of accumulated
rubbish seems to correlate directly to the
amount of hard working teams from Qatar
Clean and the numerous other companies that
are in attendance in various municipalities.
On a number of occasions I have
witnessed individuals emptying car ashtrays
out of windows in car parks, discarding empty
cans on grass verges and placing half-eaten
fast food meals at the base of trees, despite
there being many litter bins in the vicinity.
Litter follows humans. Even a walkaround the marina at The Pearl reveals an
unsightly amount of non-biological waste,
trapped between the marina berths and the
marina wall.
Outside the many 24-hour grocery stores,
on the pavements and walkways along
secondary roads in the older city areas and in
increasing quantities, in the outlying suburbs,
litter is an increasing and hazardous problem.
On a recent trip down to the Inland Sea I
was horried that the shoreline surrounding
one of Qatars areas of outstanding beauty
was suffering from the results of inconsiderate
litter disposal. The knock-on effect in terms
of the damage to wildlife, especially birds and
marine animals, can be especially saddening.
Certainly when it comes to the marketing
of buildings for sale and for lease, appearance
is everything and this of course has a marked
effect on the eventual amount secured forrental or purchase.
It amazes me the number of apartment
buildings I see, especially in secondary areas,
where only a token effort has been made to
keep the common areas, especially lifts, free
of litter and more increasingly, grafti.
Externally, even less effort is made.
Appearances are all the more important when
there is an element of oversupply of such
buildings, and landlords are competing for
tenants with neighbouring properties.
Pretty obvious I know, but it always
amazes me the lack of thought in terms ofpresentation and overall attention to detail.
But the effect on real estate value
aside, only together we can improve our
environment, and show some respect to the
thousands of workers who toil daily on our
behalf often in futility to keep this city
and country clean and debris-free. It will be
worth it for all of us in the long run.
Edd Brookes is a director and head of
valuation, Middle East, at DTZ in Doha.
avery warm welcome back to
the Doha Diary to all Qatars
residents now returned
from the summer break, and
between issues ofTheEDGE.
I sincerely hope that you all had a happy
and healthy time with your family and lovedones and that Ramadan enabled a period of
quiet reection, to give thanks for all the
blessings that we enjoy, as well as giving
thought to ways in which we are all able to
help those less fortunate than ourselves, be it
via nancial or practical aid.
I write this at 38,000 feet, returning from
a fantastic Eid break in Cebu and Manila and
I am currently somewhere over the Bay of
Bengal sipping on a very nice glass of my
favourite beverage.
It is actually quite incredible to watch the
magnicent display of natures power, whichis manifesting as a lightning show outside my
window.
It is therefore no coincidence that I have
decided to write today on an issue, which
collectively we all have the ability to resolve,
but to which little thought is given. It can
have important knock-on consequences
for our health, our built (and natural)
environment as well as property values.
The issue is litter. In fact I would go so far
to call it mindless litter. While we cannot do
This month TheEDGEs resident real estatecolumnist Edd brooke discusses a topic which
all of us have the power to affect, and which inturn arguably negatively affects the prices ofproperty in Doha: the ubiquity of litter.
ENVIRONMENTAL
RESPONSIBILITY
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TheEDGE 19
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Do you want to be a great
leader in the Gulf Cooperation
Council (GCC)? It makes
no difference if you are
an expatriate or national,
leadership success in the region is largely
dependent on the ability to lead expatriates.The percentage of expatriates in the GCC
private sector is among the highest around the
world. By expatriates, I am not referring only
to the common expatriate stereotype meaning
western professionals, but to anyone who has
left their native land and come here to work.
In common practice, the term is often
used in the context of professionals sent
abroad by their companies, as opposed to
locally hired staff. But I like to think of
expatriates as people who are not from here.
The GCC countries have more nationalities
in their workforces than the United Nationsdoes member countries. With this number
of expatriates in the workforce come many
different voices.
Every leader needs to become an expert
in leading expatriates as this is the day-to-
day reality of leading in the region. Not only
does your success as a leader depends on
your ability to lead expatriates so do your
organisations. According to research the
failure rate of expatriates in the rst year
averages 30 percent, with it being as high as
50 percent in some countries. Failure does
not just mean turnover, it also means a loss of
expected productivity as in the rst year of an
expatriate assignment the costs are high and
the productivity is low. This is true from the
top boss to the janitor. Plus, 24 percent of all
expatriate assignments end prematurely.
So, what can a leader do to succeed in
leading expatriates?Clarity Role ambiguity is when there is
a lack of clarity on the part of an employee
about what is expected in the workplace.
Since role ambiguity is most common in
expatriate assignments, given the new work
environment, raising questions about how
work evaluation, the scope of responsibilities
and performance expectations, leaders need to
be aware and provide greater clarity.
Belonging Adjustments to the culture
represent a signicant concern when
employing expatriates. These adjustments
are general in regards to adapting to thenew host country and specics relating to
the work environment. In the GCC, it is
even more complex as an expatriate has to
adjust to their co-workers cultures as well.
At rst expatriates commonly feel like an
outsider. There is one thing consistent about
expatriates they are not at home. Leaders
have an opportunity to create an environment
of belonging. The depth of belonging an
employee feels at work has a connection to
how well they perform.
Mentalisation This deals with
understanding issues from others viewpoints
and building a climate of trust. The faster
leaders are able to do this, the quicker and
deeper their impact on performance will be.
When working with expatriates, leaders need
to develop the ability to understand the mental
state of others and, more importantly, what
underlines their behaviour.Multilingual in One Language Just
because a workforce is speaking a common
language, leaders should not assume that
the common language means common
understanding. The meaning that is attached
to words varies greatly between cultures.
Leaders need to understand how the execution
of certain universal practices translates from
one culture to another to be able to respond to
the specic needs of each team member.
Coaching When working with
expatriates there is denitely going to be
a variation in the workforce in regards tocapability and quality. Unfortunately, when
leaders experience this they are tempted to
throw their hands in the air and do nothing.
But what they need to do is take an active
coaching approach to capability development
and work with their employees to improve
their development areas.
Dr. Tommy Weir is an authority on fast-
growth and emerging market leadership, and
an advisor and author.
The greatest cost to GCC businesses are theexpatriates who are not effective, yet remain in
their positions, says Dr. Tomm Wer, thereforeexpatriate effectiveness needs to be a toppriority for every leader in the region.
MIDDLE EASTMATTERS
EXPATRIATEEXPERT
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ENERgY &
RESEaRCHQAAS ENEWABLEEnERgy PoTEnTIal
Qatar is currently
without an overallpolicy on the expansionand development ofrenewable energyinfrastructure. Topromote the use ofgreen energy in theshort and mediumterm, a more detailedsupporting legalframework and fiscalpolicy would boostinvestor confidence, sayRdger Tcernngand Jme Elwen
ThE casE FoR REnEwaBlEsThe case for renewable energy ties in
with the Qatar National Vision 2030
sustainability agenda, since the use ofrenewable energy in Qatar would also
contribute to long-term economic survival.
Indeed, the National Development Strategy
2011-2016encourages environmental
development, the improvement of local
air quality and the drive to establish a
knowledge-based society, which is
consistent with the National Vision.
By reducing the domestic consumption
of Qatars fossil fuels, this generated excess
capacity of resources could be re-directed
towards lucrative global export markets and
valuable intellectual capital brought in to
augment the knowledge-based society.
With a clear policy direction, Qatarcould become a regional leader in renewable
energy-focused manufacturing, and could
also act as the main generator of renewable
energy fed into the regional grid. A clear
mandate will accelerate the Visions aim of
establishing a comprehensive legal system for
protection of all elements of the environment.
Qatar can in turn use this green impetus
to be a hub for similar development in
other countries, for sustainable agriculture
and food security. This approach mirrors
the excellent work of the Qatar National
Food Security Programme, which endorses
renewable energy to achieve food security and
economic diversication. There is long termpotential, both from a domestic and regional
perspective: with an indigenous renewable
energy research and manufacturing industry,
continuing the research activities at Qatar
Science and Technology Park.
Solar-powered desalination infrastructure
to irrigate agriculture or solar-powered
vertical farming and hydroponic solutions,
whereby food is grown intensively in sky-
scrapers coated in solar panels, are just two
examples of this green energy potential.
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ENERGY &RESEARCH
EsTaBlIshEd naTIons
In the global context, Germany andScotland are excellent examples for Qatar
in the eld of large-scale expansion of
renewable energy, transforming their
renewable energy expertise into lucrative
manufacturing export industries. Scotland is
now reallocating and employing the skills,
expertise and infrastructure from oil and gas
to sustain an offshore renewables industry.
Germany rst introduced a statutory
nancial support mechanism to encourage
the expansion of renewable energy in 1991.
The ErneuerbareEnergien Gesetz, sets out
a xed compensation model for producersof renewable energy, consisting of what is
known as a feed-in tariff. Smaller scale
renewables are also supported similarly in
Scotland, while large scale projects have been
promoted by the Renewables Obligationsince
2002, all underpinned by binding climate
change targets on industry. The success of
the German policy now sees industry and
nancial organisations driving the Desertec
Initiative to develop giant solar power
capacity in Middle East and North Africa.
Bringing renewable energy into existing
and future energy and transport infrastructurein Qatar will not entail burdensome changes
to sustained development, but only with a
clear renewable energy policy.
REnEwaBlE PoTEnTIalBy 2017, the revamped Khalifa Stadium
will be carbon-neutral, powered and climate
controlled entirely by solar energy, serving
as a precedent for Qatars 2022 World Cup
event infrastructure. But rather than leave thisinfrastructure under utilised when no events
are scheduled, the stadium could double up
as a locally distributed power plant. Outside
the periods of use, typically during the
daytime, the electricity generated can be re-
directed by way of smart-grids to cool or heat
local schools or hospitals, for example.
Smart-grid technology will effectively
allocate renewable energy to centres of
peak electricity demand, thereby balancing
the existing fossil-fuel base load electricity
supplies, and ensure that essential community
infrastructure will have a consistent andreliable supply of electricity. Localised
generation of electricity could also be
used to distribute green power or heat to
manufacturing zones or retail developments,
as part of energy-efcient urban development.
Such renewable energy clusters may also
serve as educational tools and as examples of
innovative uses of alternative energy sources.
A fully integrated renewable energy
generation infrastructure in Qatar could also
be developed in conjunction with national
railway transport infrastructure projects, such
as the Doha Metro. This makes for a logicalopportunity to develop a network of electric
car charging points that radiate from the
parallel rail and electrication infrastructure.
Renewable energy from localised generation
could climate control the Metro stations,
support ticket halls and information boards
and complement the electricity generated for
running the rail lines.
Efcient electricity grid maximisation is
already in the advanced stages of study in
Germany, to facilitate transmission of green
power from offshore wind in the north of
the country to centres of manufacturing in
the south. In the long term, this renewable
grid infrastructure could feed into the Gulf
power grid as reserve capacity. In light of
Qatars vast solar energy potential, Germanysexperience at expanding renewable energy
and Scotlands experience of swift and
successful cross-over from hydrocarbons to
a leader in renewables, coupled with world
leading research and development in marine
and carbon capture and storage technologies
(CCS), could serve to be mutually benecial
for Qatar, Germany and Scotland.
With its reputation for political and
economic stability, Qatar would be an
attractive regional research and manufacturing
centre for renewable energy technologies
in general. Capital in cash can be deployedby the state domestically and in renewables
sectors in these overseas markets such as
Germany and Scotland; and investment in the
form of intellectual capital, can be imported
to help realise Qatars National Vision.
With an advanced and strategically
located oil and gas infrastructure in place,
there are real opportunities for developing
CCS projects. Qatar has enormous renewable
energy potential as the state enjoys abundant
sunlight and boasts a notable offshore wind
potential in its territorial waters.
Rudiger Tscherning is Director of the Forum
on Energy and Environmental Law at Qatar
University College of Law and a specialist in
energy and environmental law. James Elwen
is Managing Partner of the Doha ofce of
McGrigors LLP law rm and a specialist in
international oil/gas law, renewable energy
and energy infrastructure law.
The views expressed by the authors are
personal and do not necessarily represent
those of Qatar University or McGrigors LLP.
Integration o renewable energy intoexisting and uture energy and transportin Qatar will not entail major changes.
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ENERGY &RESEARCH
LP GAS: TOO MUCHOF A GOOD THINGNatural gas is a boom industry in the United States (US) and Canada, andthe number of new gas wells is increasing steadily. Combine that withthe growth in production of so-called unconventionals, such as shalegas, then factor in a coming wave in synthetic fuel production, and all the
ingredients are in place to generate an LP gas glut and a drop in prices. Alooming financial disaster? Not necessarily, says US-based Td Drtz
Dened as a gas that can be
turned into a liquid fuel
under relatively low pressure,
liquied petroleum (LP)
gas consists of propane and
butane. Propane and butane are typically
produced along with natural gas, or methane,
from gas wells. As the number of new gas
wells grows, not only does natural gas
production increase, the production ofpropane and butane and hence LP gas
increases too, with the risk of oversupply and
a drop in both gas and LP gas prices.
Moreover, thanks to improvements in
drilling and extraction technologies, such as
fracturing or hydrofracking, more shale gas
plays are being exploited and the productivity
of shale gas wells has been greatly improved.
The result? Large amounts of shale gas
are now coming on the market. And that
production is set to grow as producers
continue to increase their output while
lowering their costs.According to an article in the authoritative
publication, the Oil & Gas Financial Journal
[vol 7, issue 8, 1 Aug 2010; The Race to
Liquids, by E. Russell Braziel], one of
the primary factors for drop in gas prices
during the 18 months since January 2009 is
a continuing oversupply of natural gas due
to prolic production from shale plays. And
because shale gas wells generally contain a
higher percentage of LP components than
natural gas wells, a side effect of the growth
in shale gas production has been a signicant
additional growth in LP gas production.
Thats the present situation. But looking
ahead into the not-too-distant future an
increase in synthetic fuel production could
have the side effect of bringing even more LP
gas into the market. This is because synthetic
fuels include fuels produced from processes
such as biomass to liquids (BTL) and gas to
liquids (GTL). GTL offers a way to tackle theproblem of associated and stranded gas gas
reserves located far from existing pipeline
infrastructure and markets.
However, these abundant sources of
energy that are often squandered. Rather than
being transported to reneries for processing,
stranded gas is often just left in the ground.
Associated gas produced along with oil is
frequently disposed of by aring a wasteful
and environmentally unfriendly process that
is increasingly subject to regulation or
by re-injection back into the reservoir at
considerable expense.Interest in GTL a technology once
thought to be of little relevance in North
America is increasingly now, due partly
to the introduction of stiffer environmental
regulations and partly to a growing disconnect
between oil and gas prices. As the price
of natural gas has dropped over the past
18 months, the spread or ratio between
the price of a barrel of oil to that of 1,000
standard cubic feet (mscf) of natural gas
has increased, bringing big changes in
EnERgy and REsEaRch BRIEFs
7TH ANNUAL HSE FORUMThe seventh annual Health and Safety Forumin Energy (HSE) is set to take place from 10to 12 October 2011 at the Grand Hyatt in
Doha, Qatar. The Forum is being held underthe patronage of HE Dr. Mohammed binSaleh Al Sada, minister of energy and industr
in Qatar and chairman of QP, includes akeynote address by Saad Al Kubaisi, HSEmanager at QP, as well as more then 35 HSEexperts on the leaders panel from the topminds of the energy industry.
www.hse-me.com
UAE WORKSHOP ON CCS SUCCESS
The United Nations Framework Conventionon Climate Change (UNFCCC) madeimportant progress towards allowing supportfor carbon capture and storage (CCS)projects under the Clean Development
Mechanism (CDM) at a technical workshophosted in September in Abu Dhabi by theUnited Arab Emirates (UAE) ministry offoreign aairs. A wide range of presentationsgave delegates a current picture of managingCCS projects. Delegates were optimisticthat the Abu Dhabi workshop has led to
greater common understanding of the issuesfacing the sector, as well as identication ofviable solutions that could form the basis of apossible global agreement later this year.
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hydrocarbon markets in its wake. In the US the oil/gas spread has historically varied between
around six and 12. But beginning in mid-2009, natural gas prices seem to have becomeindependent from oil prices, with the result that the spread ratio in North America has increased
to greater than 20 and is expected to remain elevated for years or even decades. A large spread
presents an arbitrage opportunity and an incentive to use GTL technology to turn abundant
North American natural gas into synthetic fuels.
In contrast, energy security is a major driver in North America behind the growing interest
in biofuels. BTL can be used to produce biofuels from a very wide range of waste feedstocks,
including agricultural, animal and municipal wastes, and ligno-cellulosic waste from trees. The
fuels produced via BTL can be substituted directly into existing fuel systems without the need
for blending. They also burn cleaner than petroleum-based diesel and jet fuels, resulting in
lower emissions of nitrogen oxides (NOx) and harmful particulates.
With the development of cost-effective technologies that enable economical small scale
and local production (also known as distributed production) of biofuels via BTL and small
scale GTL to be carried out offshore, synthetic fuels production in North America looks set toincrease even more. And with the growth in synthetic fuels production will come an increase
in LP gas production. This is because as well as the methane used in synthetic liquid fuels, this
process also generates waxes, propane and butane. Because the latter are essentially surplus to
the synthetic fuel production process, operators may look to export them in the form of LP gas.
LP gas is also a byproduct of hydrocracking, used to crack the waxes to produce liquid fuels.
In theory this growth in LP production could lead to a g lut and a resulting drop in
prices. But rather than looking at increasing LP production in the US as a challenge to
protability, I think producers should consider it as an opportunity to develop new markets
for what is after all an important commodity in the energy mix. LP gas is a valuable
hydrocarbon-based fuel source in a world where hydrocarbon resources are not unlimited.
It also offers other environmental advantages, emitting just 81 percent of the CO2
per
kWh produced by oil, 70 percent of that produced by coal, and less than 50 percent of that
emitted by coal-generated electricity distributed via the grid. In addition it burns morecleanly, releasing fewer particulates than heavier hydrocarbons. LP gas is already widely
used around the world as an alternative to electricity and heating oil (kerosene); as a fuel for
combined heat and power stations and as a fuel in vehicles. It is increasingly used to replace
chlorouorocarbons as an aerosol propellant and a refrigerant to reduce damage to the ozone
layer. Surely, if we can develop ever more innovative technology to increase efciency for
LP production, we can come up with new, imaginative creative ways to market and take
advantage of this valuable resource.
Tad Dritz is a Marketing Manager for the Oxford Catalysts Group in Ohio, USA.
NUCLEAR STILL IN WORLD FUTUREDespite fears among the public about therisks following the Fukushima reactor disasterin Japan, nuclear power still has a strongfuture, government and industry leadersagreed in a session on energy security at theWorld Economic Forums Annual Meeting
of the New Champions 2011, in September.Nuclear power will necessarily remainan important part of the energy securitystrategies of many countries, especially fast-growing economies such as China and Indiathat are building new plants, as well as the
Middle East. Our strategy for nuclear powerwill not change because of the Fukushima
incident, Mohamed bin Dhaen Al Hamli,minister of energy of the UAE underlined.The UAE is building four nuclear powerplants, the rst of which is slated to go onstream in 2017. There will be much greateremphasis on nuclear safety butjust becauseof Fukushima, we cannot condemn an entire
industry. Pakistans minister of science andTechnology, Mir Changez Khan Jamali,stressed that his country has to developnuclear power because it faces an energy
crisis and safety concerns should not bean issue. We have the raw materials andexpertise, he said. We need nuclear energybecause of our energy decit.
SMART ENERGY MIDDLE EAST 211
The fth annual Smart Energy Middle EastConference and Exhibition will be held atthe Park Hyatt Hotel in Dubai, UAE, from23 25 October 2011. The event aims toexamine how the GCC region can achieveenergy sustainability, operational excellence
and customer engagement. Over 200
senior executives from the regions utilitiesand energy sectors will gather to learn fromleading global experts. An exhibition andextensive presentations, panel discussions,workshops and networking sessions will takeplace. The event will also incorporate the
Metering International Excellence Awardsin the form of the Smart Energy Excellence2011 Award, Smart Utility 2011 Award andSmart Technology Innovation 2011 Award.www.smartgridsme.com
ENERGY &RESEARCH
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COUNTRYFOCUS
In early 2012 the ofce of HH Sheikh Hamad bin Khalifah Al
Thani, Emir of Qatar is planning to make a state visit Pakistan
for the rst time since 1999. However, the fact that it took more
than a decade for the countrys ruler to return is not reective of
the esteem both Qatar and Pakistan hold for one other.
The relationship between Qatar and Pakistan goes back a long
way, says newly arrived Pakistani Ambassador to Qatar, Muhammad
Sarfraz A. Khanzada. Pakistanis were here from the very beginning of
the country, 40 years ago. Pakistanis helped build this country.
When Khanzada refers to building Qatar, he is being literal. It
was Pakistani labour that helped build many of the countrys originalbuildings, roads and other infrastructure. But Qatar has also been a
friend to Pakistan in troubled times, including the 2008 earthquake that
devastated the country and the 2010 ooding that caused damage and
large-scale loss of life.
Qatar was among the rst of those nations who immediately sent
aid after the news of the oods, to deal with the immediate effects of
the disaster and they are still involved, says Khanzada.
At its peak in the 1980s, there were more than 130,000 Pakistanis
in Qatar but this number has declined to the current 80,000 here today.
Of that number, around 50,000 are participating in the workforce while
the remainder are families.
Many moved on because their projects nished, the ambassador,
who was previously stationed in Qatar from 1987 to 1991, adds. The
other reason is that Pakistani semi-skilled and unskilled workers aredeemed expensive in comparison to workers from other countries,
including Nepal. The ambassador believes it was the initial inux of
Pakistani workers, many of whom are still in Qatar and now own small
businesses, that created a great deal of goodwill, which he is keen to
capitalise on.
Qatar will need an estimated two million workers to complete the
projects needed for 2022 and the countrys development, Khanzada
explains. This presents us with a great opportunity.
Upon his arrival in Qatar in April, Khanzada met with HE Sheikh
Tamim bin Khalifah Al Thani to discuss the issue of bringing more
Pakistani workers to Qatar. The meeting resulted in an agreement that
Pakistan would be the rst port of call for Qatari companies seeking
semi- and unskilled workers for projects. The ambassador is alsotargetting Qatars private security needs for the coming decade.
The ambassador believes that Pakistanis are well regarded
in the region because there is an understanding of the countrys
problems. Pakistanis are strong and good workers and there is
an acknowledgement of this in Qatar, he says. He points to the
opportunities that exist in Qatar as a way for Pakistan to deal with
growing issues of employment and economic deprivation in the
country, which in turn have led to well documented unrest.
Since 2001 and the War on Terror began, more than 35,000
people have lost their lives in Pakistan, plus a further 5000 security
and military personnel, he says. Thats a heavy toll.
According to the Pakistan Economic Survey 2010-11, the south
Asian nations economy suffered direct and indirect nancial lossesup to US$67.93 billion (QR244.5 billion), which it attributed to its
operations against militants since 2001 and the ambassador feels there
is a much misunderstanding about what is happening in Pakistan.
Comparatively, Qatars Pakistani numbers are small compared
to the seven million around the globe. There are 1.2 million people
of Pakistani origin in Saudi Arabia, one million in the United Arab
Emirates (UAE) and 1.4 million in the United States (US).
But Qatars Pakistani population nevertheless contribute a
great deal to their home economy. The remittances of Pakistanis
living abroad have played an important role in Pakistans economy.
Pakistanis settled in western Europe and North America are important
A long history of friendship,mutual respect and ongoing andever-improving diplomatic andcommercial relationships indicatethat the fortunes of Qatar andits close neighbour Pakistan will
forever be bound together, writesRcel Morr
PaKIsTan:BUILDINGPARTNERSHIPS
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pakISTaN aT a glaNCE
Population: 177 million, the worlds sixth most populous country.
GDP per capita (nominal): US$1049 (QR3776).
The economy of Pakistan is the 47th largest in the world
Main industries: textiles, chemicals, food processing, steel,machinery, beverages, and clothing.
The US and UAE are Pakistans biggest export partners
sources of foreign exchange for Pakistan. Since 1973, Pakistani
workers in the oil-rich Arab states have been the source of billions
dollars of remittances. Pakistani expats contributed US$11.2 billion
(QR40 billion) to the economy in the nancial year 2011.
The major source countries of these remittances to Pakistan include
the UAE, the US, Saudi Arabia, Gulf Cooperation Council (GCC)
countries such as Bahrain, Kuwait, Qatar and Oman, and Australia,Canada, Japan, the United Kingdom and afuent European countries
such as Norway. The GCC alone accounts for around US$3 billion
(QR11 billion) of the above total.
However, there are only a handful of Pakistani companies
operating in Qatar. Encompassing support and logistics services
for the construction industry as well as labour hire and recruitment
companies. Others include Unicorn Pakistan, an engineering company,
and Descon, a construction company.
Another Pakistani-Qatari joint venture, Qatar Green, has been
established to provide landscaping services for stadiums and sporting
venues. Indeed it is in the sporting realm where Qatar will obviously
play a huge role as 2022 nears and the country
submits its bid to host the 2020 Olympics, wherethe ambassador is working to gain representation
for one of Pakistans lesser-known industries.
[We are] one of the worlds biggest producers
of sporting goods, he reveals. All of the footballs
used in the FIFA games are made in Pakistan. Other
sporting equipment produced in Pakistan includes
cricket bats and hockey sticks as well as footballs for
various codes and cricket balls.
Beyond that, Khanzada is also working to
bring more skilled Pakistanis to Qatar including
medical staff. Currently there are 24 Pakistani
doctors at Hamad Medical Corporation, eight at
Al Ahli Hospital and ve at Qatar Petroleum. Allof these doctors hold senior positions, he says.
As per other nations with signicant
agricultural land, Pakistan is in talks with land-lacking Qatar and
companies such as Hassad Foods, which is seeking to provide food
security for its citizens. Pakistan is one of the biggest producers of
rice in the world. We have a lot of fertile land, Khanzada says.
However, unlike other countries, and perhaps aware of the security
issues within the country, Pakistan is keen to ensure that it benets not
just nancially from the arrangements. We are looking into a joint
venture, to ensure that Pakistan benets from this, he adds.
Pakistans energy shortages, which sees daily rolling blackouts in
most big cities, as well as many smaller towns only having power for
part of the day, also loom large in their future plans with Qatar andtalks are underway to import LNG to Pakistan for domestic use.
One issue of particular importance to the expatriate community
in Qatar is the development of the Pakistan Education Centre in
Abu Hammour in Doha. Opened in 1986, the newly renovated
and expanded school houses more than 3000 students from early
childhood through to senior high school. It was built and funded
by our community, says the ambassador, who is a kind of de-facto
principal of the school.
While his country is rich in terms of resources, he says Pakistan
needs assistance to bring these riches to the people. They are actively
pursuing joint ventures in many areas, nishes Khanzada, who would
also like to see many further Pakistani nationals in working in Qatar
perhaps, ultimately, 100,000 or more.
COUNTRYFOCUS
Qatar will need anestimated two millionworkers to completethe projects needed or
2022 and the countrysdevelopment. This is a greatopportunity or Pakistan.
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FINANCIAL CAPITALHE ISE OF MENA INESMEN
SPECIALFOCUS
As the financial world seems to lurch between a new crisis and recovery,all eyes are trained on the Middle East. The region is proving that it canoffer emerging market returns with the safety and surety of a more matureenvironment. Ahead of the MENA Investment Management Forum 2011,
to be held in Doha this month, Rcel Morr looks at the opportunitiesbeing created in the region and specifically Qatar.
In 2007 the Middle East and North
Africa (MENA) regional onshore
assets under management were
estimated at US$57 billion (QR207
billion), with much of the management
undertaken by international companies with
little knowledge of the region and its customs.
According to Cerulli Associates, with the
repatriation of funds and the growth in the
regional investment management providers,
assets under management are expected to beover US$100 billion (QR364 billion) by 2012.
McKinsey & Company, identifying
a long-term trend, has estimated that
asset management revenues in the Gulf
Cooperation Council (GCC) region will
increase by 10 to 15 percent annually from
2005 to 2015.
The GCC countries display one of the
worlds highest savings rates, estimated at
39 percent of gross domestic product (GDP),
while private consumption as a percentage of
GDP, estimated at 37 percent in 2009, is much
lower than the world average of 60 percent.Samer Solh, managing director of Qatar-
based Amwal Asset Management says Qatar
is on the path to becoming recognised as a
regional centre for asset management. Qatars
continued economic growth is creating real
and robust opportunities for new entrants,
both local and international, looking for high
returns in a safe environment.
Qatar is making great strides to
establish itself as the regional hub for asset
management and it is closer to achieving
Held in association with the QatarFinancial Centre, the MENA InvestmentManagement Forum, rom October 2 to5 in Doha, will examine the latest trendsin the asset management industry.
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SPECIALFOCUS
this goal than other locations, he told
TheEDGEbefore the forum. Any wealthmanagement hub requires a sustainable and
dynamic business ecosystem. This includes
having advantageous regulatory and legal
regimes, a strong talent pool, convenient
and competitively priced business services
infrastructure and, importantly, a capital-rich
base of investors, including fund managers.
According to Solh, the climate in Qatar is
conducive to the creation of a regional hub for
asset management one of the key points in
the Qatar Financial Centres (QFC) strategy.
Qatars government and regulators have
been important catalysts in transforming themarket into such a regional hub for asset
management and insurance to tap into the
countrys vast wealth, he says. To start, Qatar
began with some of the necessary ingredients
including increasingly wealthy family ofces
and early entrants and innovators. Add to
that the Qatari governments focus and
effort to develop an institutional investor
base. This began with the formalisation of
the Qatar Investment Authority (QIA) and
Qatar Holding. The government subsequently
helped establish national pension schemes and
other endowments which all have increasingcapital to invest. Qatar has also been
discussing a programme to allocate signicant
seed capital to asset managers that establish
themselves in the country. That ought to be a
very signicant catalyst to help Qatar advance
over other regional nancial centres.
In addition, the establishment of the QFC
provided a global best practice framework
for the nancial services industry which is
evolving to meet the needs of the industry.
Finally, Qatar is creating and growing its
domestic public securities markets. On the
xed income side, we expect increasedinfrastructure funding to be nanced through
Eurobond and local currency bond issuances.
The announced creation of a short term
Qatari riyal T-bill programme is an important
step to eventually creating a local currency
yield curve. On the equity side, the Qatar
Exchanges initiatives to increase local
listings and to adopt global best practices
in settlements and rules all contribute to
deepening liquidity. As Qatar progresses
toward eventual inclusion in global stock
benchmarks that will attract liquidity on the
investor side.This months MENA Investment
Management Forum held October 2 to 5 in
Doha (formerly Fund Forum Middle East),
which is held in association with the QFC,
will examine the latest trends experts are
seeing in the asset management industry
regionally and globally.
On the global front, we are seeing the
acceleration of two trends that have been in
effect for a number of years, reveals Solh.
The rst trend is size segmentation. To
survive, you need either asset scale with a
strong brand name and distribution or youhave a differentiated niche strategy with a
unique edge in a small but inefcient and
compelling strategy. Middle-sized managers
are consolidating, shrinking or closing down.
The second trend is increased
emphasis on regulation and operational risk
management. Regulation is driven by political
reaction to the nancial failures and shocks
that affected the markets in 2008 and 2009.
Operational risk management is driven by
the overwhelming capital of institutional
investors such as pension funds, insurance
companies and endowments who aresensitive to operational due diligence and risk
mitigation by their managers.
According to Solh, this means that
both emerging and established investment
managers now have higher operating costs
to meet infrastructure, transparency and
regulatory requirements. As a consequence,
we have seen a number of effects: investment
banks shutting down or spinning off
proprietary trading desks; high prole
managers closing their funds to outside
money to focus on managing personal family
wealth; and the growth of emerging managerplatforms to seed new funds while providing
operational oversight and infrastructure.
On the regional front, he explains as
wealth continued to grow over the last
decade, investors needs became greater,
including increasing exposure to growing
regional markets. In addition, as investors
became more sophisticated, they started
demanding more and better services, which,
understandably, is more difcult for London
or Geneva-based investment managers and
advisers to offer due to distance and culture.
The market meltdowns in 2008 and 2009convinced regional investors, who invested
in global strategies they thought were safe,
to reassess the trust level they placed in fund
managers who would just y in from the
United States, United Kingdom and Europe
just to raise capital, Solh says.
There are other incentives to keep it
local. The Qatar stock market, with 43 listed
companies, rose nearly 25 percent in 2010
making it the best performing market among
all the GCC and Middle Eastern exchanges
last year. Meanwhile the Qatar Exchange in
partnership with New York Stock ExchangeEuronext continues to develop plans for new
future products, such as derivatives.
The market for bonds and sukuks has also
increased substantially, with nearly US$3.5
billion (QR13 billion) of issues from Qatar in
2010, which met with huge investor demand.
Qatar is lobbying to have its status, as decided
by the index compiler Morgan Stanley Capital
International, upgraded to emerging market
status. A review in June failed to change the
status, but the experts are hopeful of a future
shift, which would further buoy interest and
investor condence.The regional events of the past 10 months
which saw revolutions in north Africa and
unrest in other quarters, has somewhat slowed
interest. According to Solh, the regional
prognosis, which will be examined at the
Forum, is growing each year.
As situations eventually stabilise, global
investors will re-focus on the larger regional
picture such as the long term wealth creation
in the GCC, the attractive and expanding
consumer populations in Turkey, Egypt and
Saudi Arabia and the world leading energy
and petrochemicals industries in Qatar andSaudi Arabia, he says.
Combined with the rise of local
institutional investor base and the eventual
upgrading of the Qatari and UAE markets to
emerging market this will ultimately cause
appetite for regional funds to grow.
The MENA Investment Management Forum
will be held from October 2 to 5 at the Grand
Hyatt Doha. For more information go to
www.menaimf.com
TheEDGE 33
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FINaNCE &
ECONOmICS
also In ThIs sEcTIon: mrket wt: In our newly revamped Market Watch pages, we cover world and local
markets, commodities and the QFCs recent Reinsurance Barometer. (P.36). Iie Ee: Manjeet Chhabra investigates the robust status quo and future potential of
Qatars banking sector. (P.38). spei Reprt: Matt Ghazarian reports on recent statistics released that indicated that
Qatar is the worlds fastest growing economy. (P.40). Be seet:Janak Patwari discusses the importance of corporate vision and mission
statement to the bottom line and how these can be implemented eectively. (P.42).
Market Wat InsIDe eDe speIal report Balane seet eonoMI BaroMeter
Brought to you by:
ThE PowER oF cREdIT RaTIngs P.Traders work in the Standard and Poors (S&P) 500 options pitat the Chicago Board Options Exchange in the United States
(US). S&P, along with Fitch and Moodys make up the bigthree US credit ratings agencies, which many feel wield toomuch power and inuence. In Thumbs Up, Thumbs Down
Karim Nakhle takes a closer look at these institutions.
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glOBal maRkET waTCHby DhEERaJ shahDaDpuRi
wORld REpORT: Battle BetWeen Bulls anD Bears returns
The unresolved European debt crisis and weakening United States (US) economic
growth have continued to inate fears of another round of global economic slowdown,
at least in the short term. This uncertain outlook has made global nancial markets
fragile as bearish investor sentiment, within a short span of time, has knocked-off gains
made during the last year. The benchmark US stock market index, Dow Jones Industrial
Average (DJIA), after peaking to around 12,800 levels during the beginning of May is
now trading around the 11,000 mark, a 14 percent retreat. Much of this decline is caused
by the last minute agreement on raising the debt ceiling and the decision by Standard
and Poors to lower the sovereign ratings of the nation to AA+. In the Euro Area, theelevated debt crisis of Greece has so far continued to concern policymakers, who are
still struggling to come up with a solution to address the fears of the global investment
community. Although a second bailout package has been approved for the troubled
nation, many economic experts are still sceptical and believe that these measures alone
may not solve the problem, and that fundamental future reforms must be implemented.
The Gulf Cooperation Council (GCC) nancial markets have not remained isolated
from global developments and have declined in tandem with the weak global cues,
despite relatively high crude prices on which outlook of the regions oil-rich nations
depend. Similar to what we are witnessing elsewhere around the world, stock market
indices of all six GCC nations are trading in negative territory for year-to-date returns.
In the near term, there are no signs of reduction in market volatility especially due
to mixed reading of major economic indicators in US, which is giving a hard time to
investors to foresee where the worlds biggest economy is heading. Outlook for the USand subsequently of most global nancial markets very much depends on what steps the
Federal Reserve (Fed) will take to safeguard its still nascent recovery, which has so far
failed to bring down the high unemployment rate.
However, a major hurdle for launching the next most anticipated measure by the
Fed, Quantitative Easing (popularly termed as QE3), is the ination rate, which in all
probability could rise with another round of treasury purchase programme. In the near
term, investors are
expected to closely
monitor developments
surrounding the recently
announced US$447
billion (QR1.6 trillion)
stimulus package by theObama administration
and new steps that
the European Central
Bank will take to
avoid debt contagion
from spreading after
its recent market
intervention, aimed at
lowering Italian and
Spanish bond yields.
MARKETWATCH
A Greek citizen draws money from an Athens teller machine amidincreasing scepticism whether the country will in fact be able to honourits sovereign debt. (Image Corbis)
In the midst of global economic
uncertainty, investors have once again
chosen to take refuge in gold. This
ight has pushed the price of gold
to a new record peak of US$1923
(QR7000) per ounce as investors
continue to remain cautious about theslowing growth in the US and Euro
Area, which if it persists, could impact
the outlook of emerging economies.
Ostensibly the recent price rally has
been driven by investment demand as
according to the World Gold Council,
the demand for metal has fallen by 17
percent year-on-year during the second
quarter. But due to higher price, in
value terms demand for the metal has
increased ve percent to reach US$44.5
billion (QR161 billion); though at the
time of writing this was declining.The oil price, which has a direct
correlation with the equities, has
weakened in recent months after
peaking at a two year high of US$127
(QR462) per barrel for Brent Crude
during the beginning of current year,
on account of sensitive political shifts
taking place in a number of Middle
Eastern countries. A landmark decision
by the International Energy Agency
(IEA) to release strategic oil stock
has also played a role in bringing the
price of crude down. Despite thesefactors, strong demand especially from
emerging giants like China and India
has lately supported the price of the
commodity, which continues to trade
above the key psychological mark of
US$100 (QR364) per barrel. Indeed,
estimates by the IEA have remained
optimistic, expecting consumption
of petroleum products to reach 89.3
million barrels per day in late 2011.
COmmOdITIESCORNER
gOld SHINES.OIl wEakENS.
TheEDGE36
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MARKETWATCH
TheEDGE 37
QaTaR STOCk
maRkETwEIgHT OF glOBal ECONOmIC
UNCERTaINTY CONTINUES
The effects of global economic turbulence
are lately also being felt on the Qatar Stock
Market which after reaching a two year high
of 9242 in mid January has given up its gains
and is now trading in negative territory for
year-to-date (YTD) returns. However, so far
the losses on the Qatar market have stayedrelatively limited, down 3.8 percent YTD
August-end, as compared to its GCC peers.
This could be attributed to the fact that
investors continue to remain condent in the
strength of the domestic economic activity,
which has stayed robust on account of soaring
hydrocarbon revenues, which has given
cushion to the government for allocating huge
investments especially in the infrastructure
space. Further, the Qatar Stock Market has
been supported by the index heavyweights
in banking and the nancial subindex,
which has so far stayed in positive territory
till august-end with minuscule gains of 0.5
percent, despite major sell-off being witnessed
particularly in
nancial stocks
elsewhere
around the
world. However
the services
sector (down
9.2 percent)
is the biggest
loser in terms
of YTD August
returns. This is
followed by the
industrial sector
and insurance
sub-sector,
which are down
8.9 percent and
4.2 percent
respectively.
NEw QFCa gCCREINSURaNCE
BaROmETERThe latest edition of the GCC Insurance
Barometershows 92 percent of experts
expect reinsurance prices in the GCC to
stabilise or increase over the next one
to two years. This represents a major
change in the outlook compared with
the results in the previous research at the
beginning of 2011, when only 29 percent
expected stable or increasing prices. It is clear from the research ndings,said Akshay Randeva, director strategic development of the Qatar Financial
Centre Authority (QFCA), that the GCC region remains a very attractive
market for the global reinsurance industry.
TheEDGEspoke exclusively to report compiler Dr. Kai-Uwe Schanz
(pictured) further about the barometer:
ThE BaRomETER sEEms To IndIcaTE sTRong gRowTh?Reinsurance in the GCC region is poised to keep growing at a faster rate than
GDP. This reects a very strong pipeline of large infrastructure, construction
and energy projects. These risks are too big to be absorbed by the domestic
insurance community and need to be diversied across the global reinsurance
market. The growth prospects of reinsurers are also driven by the fact GCC
insurance markets are among the worlds fastest growing, fuelled by demandfor compulsory motor and medical insurance, as well as Shariah-compliant
insurance (takaful). The GCCs non-life insurance penetration (as a share of
GDP) is one percent same as Africa and a third of the global average.
why aRE PRIcEs ExPEcTEd To IncREasE?Qatars insurance markets are dominated by heavy commercial risks (for
example const