kuwait nytmag 114.qxd ok.qxd 10/9/07 12:56 página 1 a ... · singapore healthcare company radlink,...

0 0 /El Salvador

Oil has put the small Gulfstate on the map. Now

Kuwaiti companies are settingtheir sights on business

opportunities worldwide

A S P E C I A L A D V E R T I S I N G S U P P L E M E N T T O T H E N E W Y O R K T I M E S M A G A Z I N E

From its location at the northwest cornerof the Arabian Gulf, Kuwait has been anoverseas trader throughout history. Long

before oil was discovered in the 1930s, the tra-dition of seafaring and commerce produced asuccessful entrepreneurial community. Today,with their confidence boosted by the removalof the threat from Kuwait’s northern neighbor,Iraq, Kuwaiti companies are increasinglyengaged in seeking business abroad, stakingtheir claim to a place not just in the markets ofthe Gulf and the wider Middle East, but inter-nationally, from South East Asia, to Japan,Europe, and the United States.

“It is this inherent entrepreneurial drive,coupled with ample financial resources, thatmakes Kuwaiti companies thrive globally,”observes Ahmad Al-Haroun, Director Generalof Kuwait Chamber of Commerce and Industry.

Over the last three years, Kuwait’s econo-my has more than doubled in size. Big rises inthe international price of oil and increased pro-duction of Kuwait crude has brought significantwindfall revenues, and the enormous surplusin Kuwait’s current account has been channeledinto the acquisition of foreign assets in othercountries, resulting in a surge of investmentabroad. The government accounts for most ofthis, followed by investment companies andbanks, but firms engaged in sectors rangingfrom telecommunications and logistics, tofinance, real estate, and the hospitality indus-try are also ramping up their interests and activ-ities in the region and the wider world.

Kuwaitis are not new to investments abroad,however. Fuad Al-Homoud, Deputy CEO ofInternational Leasing and Investment Co., says,“Kuwait in the investment and finance arenais not a new player. It has been a major play-er over the past decades, and since the oilexploration, one of its main income producingfactors is international investment.”

Abudulwahab Ahmad Al-Nakib of Al-DeeraHolding Company stresses that Kuwaitis are

investment totaled a remarkable $8 billion,compared to $7.8 billion in 2004 and 2005combined.

Slightly smaller than New Jersey, Kuwaithas a population of just 2.5 million, so it is notsurprising that successful Kuwaiti firms arelooking for new markets, and they are not justlimiting themselves to other states in the Gulfor even the Middle East.

Hussain Al-Kharafi, Chairman of KuwaitiIndustries Union, says, “Kuwait is such a smallcountry that any company with ambition hasto go outside to expand. Many successful ven-tures have been undertaken in Jordan, andlately in Pakistan and India. Kuwaiti companiesare engaged in ventures in many sectors, likebanking, power, and communications. Theyhave the know-how and they have the finance.”

Mohammad Al-Sabah, Director of theCitizens Services and Governmental BodiesAssessment Agency, says the amount of excesscapital in the country is so huge that there aresimply not enough opportunities in which toinvest it. He points out that Kuwait is respon-sible for the largest foreign investments in AbuDhabi, Dubai, Egypt, Jordan, Morocco, Qatar,and the Arab region of Iran. “Kuwaitis have been

experienced market traders, and believes thattheir investment abroad has also strengthenedmarkets at home. He observes, “Today withglobilazation the world is becoming one hugemarket to trade in, and this increases compe-tition, making CEOs perform better in their mar-kets. This trend has also elevated the standardsin the trading markets, creating a professional

investment environment that attracts foreignmoney to the region.”

Last year, public and private holdings of for-eign assets increased by almost $49 billion,according to National Bank of Kuwait. Recordreturns on investments abroad helped to boostKuwait’s gross national product by 24 percentto $119 billion. The outflow of foreign direct

This supplement has been produced and sponsored by Summit Communications. It did not involve the reporting or editing staff of The New York Times.

BANKING Page 2

INVESTMENT Page 4

ENERGY Page 6

EDUCATION Page 7

FOREIGN AID Page 8

HOSPITALITY 0

KuwaitTHE RISE OF A GLOBAL PLAYER

An extended version of this report withinterviews given in full can be found at

www.nytimes.com/global/kuwait

The Kuwait Towers, a landmark in the capital and a global icon for the Middle East

Continued on page 4

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Kuwait / 2 SPECIAL ADVERTISING SECTION

Among the first countries in the GCCto embark on economic develop-ment, Kuwait was the financial cen-

ter of the region from the 1960s to theearly 1980s. Since then, the economiclandscape has changed, and Kuwait findsitself up against tough competitors, suchas Dubai, Bahrain, Saudi Arabia, and Qatar.

Bader Al-Humaidhi, Kuwait’s Minister ofFinance, is confident that Kuwait can winback its place at the forefront. “At the begin-ning of this new century, we decided toregain our position as a financial center,” hesays. “Kuwait has many factors to its advan-tage, including highly qualified manpowerand good physical infrastructure. All weneed is the legal system to contain it all, andto push us to the front. It might take time,but one day we are going to reach our goal.”

Sheikh Salim Al-Sabah, Governor of theCentral Bank of Kuwait, says, “We havemost of the potentialities and requirements.Preparing Kuwait to be a financial center

means a lot of changes in the finan-cial infrastructure, as well as in leg-islation. Ultimately, we want toachieve a proper, attractive invest-ment and financial environment. Thatis the target.”

As competition increases at homewith the entry of foreign banks intothe local market, Kuwaiti banks areon the lookout for business oppor-tunities abroad. Major lenders likeNational Bank of Kuwait, CommercialBank of Kuwait, Global InvestmentHouse, and the leading Islamic bank,Kuwait Finance House, are extend-ing their activities into Iraq and Syria,Bahrain, Jordan and Saudi Arabia,and looking further afield to Egypt.

Kuwaiti banks have been ratedby international agencies as the bestin the emerging markets of theMiddle East. Yousef Al-Jassem,Secretary General of the Union ofKuwaiti Banks, says, “The high cred-it ratings granted to Kuwaiti banksfrom the international rating agen-cies reflects their performance, andis strong evidence of their strengthand solidity.”

Successful efforts toward inter-national expansion are among thefactors that have won “A” ratingsfor Kuwait Finance House, one ofthe largest Islamic banks in theworld. KFH has gone a long waytoward establishing a global pres-ence, covering the Gulf, East Asia,and Turkey. Following a recent $1billion share sale, and a 72 percentincrease in this year’s second quar-ter profit, it is pushing ahead withplans to expand in Saudi Arabia,Oman, and Qatar.

“You can find us wherever there

SUCCESS AT HOME PROVIDESA FIRM FOUNDATION FORBANKS TO EXPAND ABROAD

Kuwait Finance House has ambitious plans for furtherexpansion following a $1 billion share sale.

Particularly strong in the Gulf States andin Malaysia, Islamic banking is rapidlybecoming a global phenomenon, mov-ing from a niche activity into the finan-cial sector mainstream. This quickeningpace is generated by increasing demandfor financial products and ser-vices that comply withShariah law, which forms thebasis of the daily life for peo-ple in Islamic countries.

Currently, there are reck-oned to be at least 300 Islamicfinancial institutions operat-ing worldwide, with morethan US$300 billion in termsof capital. Clientele are notlimited to Muslim countries,but are spread over Europe,the United States, and the FarEast, with growing numbersof Western banks offeringIslamic banking services, both at homeand abroad.

Ahmad Al-Yaseen, one of the foundersof Kuwait Finance House and the Chairmanof its Shariah Supervisory Board, says,“We always believed that Islamic bank-ing would be big, or we would not haveintroduced it to the market.”

In contrast to the ethically neutralapproach that characterizes Westernfinancial practices, Islamic banking seeksto operate on principles based on values

such as fairness and social justice. Thishas resulted in the evolution of sophisti-cated financial products and services thataim to be both profitable and ethicallymotivated. At the root of Islamic bankingis a passion for justice, says Sheikh Al-

Yaseen. “Islamic bankingtakes into consideration,according to Shariah law, allthe interested parties involved– the buyers and sellers.”

The most notable differ-ence with conventional bank-ing is the prohibition of riba,or usury. This is interpretedas a ban on the giving orreceiving of interest. “Banknotes are a unit of mea-surement. One unit equalsanother unit; so 100 metersshould equal 100 meters,100 kilograms should equal

100 kilograms, and US$1 dollar shouldequal US$1. It is not possible that US$1equals US$1.10.”

Excessive risk, speculation, and uncer-tainty are also excluded, while profitand loss sharing is promoted. “Banknotes plus production equal a result, andthe result should be shared between theowner of the unit of measurement andthe people who made the result possi-ble,” says Sheikh Al-Yaseen. “This is theprinciple of justice.”

SHEIKH AHMAD AL-YASEENChairman of theShariah SupervisoryBoard of KuwaitFinance House

is a suitable environment,” says GeneralManager Mohammad Al-Omar. “Our strat-egy is to go where the investment systemis very clear—where there is a legal infra-structure, transparency, and full commerciallaws to protect foreign investments.

“On the global level, KFH hasstrengthened its ties with themajor financial institutionsthrough strategic alliance andcooperation agreements, as wellas exchange of expertise,” heelaborates. “We have gone a longway in diversifying investmentopportunities and entering intonew projects to mitigate risk andmaximize profit.”

KFH has been strategicallyinvesting in the Turkish marketsince the early 1980s. KFH-Turkeyis one of the largest Islamic banksin the country, with an expand-ing network of around 80 branches spreadaround the major cities, and more than $2billion in assets. The bank’s strategy is tobuild a bridge that links commercial trans-actions in the Gulf countries with Turkey,while also serving as a gateway into Europe.

KFH is also looking into extending further

into East Asia. It is already firmly estab-lished in Malaysia, which it sees as itsregional hub. KFH-Malaysia, winner of thecountry ’s Best New Bank Award, hasarranged successful transactions in collab-oration with major financial institutions and

corporate entities, both inMalaysia itself and other SouthEast Asian countries. Theseinclude a joint investment inSingapore healthcare companyRadlink, and a strategic partner-ship with Hong Kong and Chinesefirms to establish the first sino-foreign real estate joint venturein Chongqing, China.

In May, the KFH subsidiary inBahrain announced plans toestablish a $50 million invest-ment bank in Jordan, focusing oninvestment banking, private equi-ty, and tourism investments.

KFH-Bahrain has made strategic invest-ments in several countries including NewZealand, Australia, Turkey, the UnitedKingdom, and the United States. Major realestate investments by the bank in Bahrainitself are expected to reach $12 billion overthe next 10 years. ■

MOHAMMAD AL-OMARGeneral Manager of Kuwait Finance House

As Kuwait pursues hopes ofreestablishing itself as the region’sfinancial center, its top-rated banksare strengthening their foothold onneighboring markets

ISLAMIC BANKING IS BASED ON ETHICS


3/ Kuwait SPECIAL ADVERTISING SECTION

Eager to spread their wings and expandbeyond the limitations of the domes-tic market, Kuwaiti investment com-

panies were responsible for net financialoutflows of KD713 million last year ($2.5billion) according to a report by NationalBank of Kuwait. They focused mainly onportfolio investments - followed by directinvestments - while increasing their net bor-rowings from foreign sources by KD402 mil-lion ($1.4 billion).

Among the established players lookingto expand their business activities acrossthe GCC and beyond is Al-Madar Finance &Investment Company. “For us and for oth-ers, the only possible way is to go outside,where we find steady growth with a rea-sonable price value,” says Nabil Ameen, theChairman and Managing Director.

Founded in 1998, and listed on the Kuwaitstock exchange in 2005, Al-Madar is one ofthe leading providers of Islamic Shariah-compliant equity and corporate finance relat-ed products and services in Kuwait and theGulf region. “We started with the Gulf, and

step-by-step we are looking at theMiddle East. After that comesEurope, and then the United States,”says Mr. Ameen.

Last year, Al-Madar reported anet profit of KD7.24 million ($25million). The financing portfolio man-aged by the company surged tomore than KD93 million ($329.6 mil-lion), a growth rate of 87.5 percent.

The company is becomingincreasingly interested in the own-ership, development, purchase, andsale of real estate. Al-Madar has par-ticipated in a number of deals out-side Kuwait, and plans to expandfurther with real estate purchasesin high-return areas in the GCCstates and a number of Arab countries. “Thereal estate market has plenty of growthpotential. It is the fastest way to make a prof-it,” says the Chairman.

Logistics and transportation are anoth-er area of interest. “When it comes toports and industries, like refineries, there

is a huge need for transportation and stor-age. These are areas we are looking at,”Mr. Ameen adds.

Al-Madar carries out comprehensiveShariah analyses of the companies it dealswith to determine whether they are in accordwith approved Islamic guidelines. It also

offers an Islamic restructuringservice to firms wishing to bringtheir operations and investmentactivities into compliance.

The company provides a totalof 30 Islamic Shariah-compliantindices; 12 for Kuwait, 16 for theGCC region, one for the MENAregion, and one for the U.S. mar-ket, providing a valuable tool forthe Islamic asset managementcommunity. The indices arelicensed to six different funds,managed by some of the mostrespected investment compa-nies in Kuwait, including NationalInvestment Company, and KuwaitFinancial Center.

The award-winning Al-Madar U.S. IndexFund, the first fund to trace the performanceof Islamic indexes on the American stockexchanges, has consistently delivered highreturns, beating both the Dow Jones IslamicMarket Index and the American S&P 500index in 2006. ■

INVESTMENT FIRMS ARE BOOSTING THEIR FOREIGN ASSETS

Al-Madar’s Chairman Nabil Ameen (left) collects the Best IslamicU.S. Equity Fund Award at the Failaka Islamic Fund Awards.

Al-Madar Finance & Investment Company looks for real estate deals in high return areas in the GCC states and other Arab countries



ALTERING THE SME BUSINESS LANDSCAPE IN THE REGION

THE RISE OF A GLOBAL PLAYER

In a globalized era marked by economic lib-eralization, privatization, lowering of barriersagainst foreign investment and World Trade

Organization requirements, local and regionalmarkets are undergoing significant changesengendering a transformation in the way busi-ness is conducted in contrast to a decade ago.The challenges are many, and often call forrestructuring.

In Kuwait, up to 85% of small and mediumsized enterprises (SMEs) are family business-es with individual-style management. Many lackthe managerial and financial competencies tooperate effectively in today’s rapidly changingmarket. Furthermore, amongst the establishedfirms, the reins of control are passing from thesecond generation to the third.

Here’s where Al Ritaj Investment Company

steps in with its expertise across a range ofservices from private equity and asset man-agement to Islamic financial products and advi-sory. Established just over a year ago with apaid-up capital of KD 25 million ($88.5 million),Al Ritaj conducted extensiveresearch to identify and define theniche market of SMEs and restrictsits potential client base to exist-ing companies with a net valuebetween KD 1 - 10 million ($3.5 –35.4 million).

Managing Director and CEOJehad M. Al-Qabandi underlinesthat the company has tapped aspace that holds high potential.“Most SMEs are overlooked bybig investment companies asdetailed financial information aboutunlisted family-owned business-es is lacking. The challenge also lies in defin-ing such businesses in terms of size, andcommunicating an evaluation and subsequentlyour unique partnership strategy to owners whomay have reservations about external inter-vention in their business.”

However, backed by a highly professionalteam with extensive local, regional and inter-national experience across a wide range ofindustries; a strong shareholder base com-prising the most prestigious institutions in

Kuwait; and a wide network of inter-national technical partners, Al-Qabandi is confident that thecompany’s partnership strategy willbe welcomed by SMEs acrossKuwait, the GCC and MENA.

“Our strategy is based onstrengthening and developing theperformance of the target compa-ny through a direct partnership posi-tion in the company,” he explains.“Our business model follows IslamicShariah. We do not aim to merelyfinance or acquire a company. Weprovide the requisite solutions – be

it business plans, expansion, turnaround andrestructuring plans, mergers and acquisitions- in addition to providing management, finan-cial and operational improvements. We workwith the owners of the business to change thelegal status of the company to that of a share-

holding one and exit when a targeted signifi-cant increase in its value is achieved and theexpansion and turnaround plan has been met.”

The company lays high emphasis on HR tobring clients superlative service, synergizing thestrengths of executives – mostly Arabs – whohave been hitherto associated with interna-tional corporations across the U.S., Europe andthe Middle East. “Key to our business is an abil-ity to localize global practices to suit regionalbusiness cultures and sensibilities,” explainsAl-Qabandi. “Such insights equip our investmentteam to enable entrepreneurs to envisage howthe requisite business acumen and manager-ial support results in a win-win situation.”

The company has already made impressiveinroads into the MENA market. “Besides Kuwait,we have secured projects in Saudi Arabia,Qatar and Bahrain,” adds Al-Qabandi. “We havealso successfully clubbed together six phar-maceutical companies across Jordan, Egypt,Syria and Saudi Arabia into a holding compa-ny.” With a number of projects in the pipelineawaiting finalization, Al Ritaj aims to extend thesuccess of its business model to the interna-tional market in the future. ■

at the forefront of the economic boom and theinvestment curve for 25 or 30 years now,” hestates.

When it comes to global reach, a primeexample of an aggressively expanding companyis Mohammed Abdulmoshin Al-Kharafi & Sons,which, in addition to being one of the largestand most diversified conglomerates in theMiddle East, employs more than 100,000 peo-ple in 25 countries, and boasts an annualturnover of $4 billion. “We have the technolo-gy, personnel, and experience to operate andsuccessfully do business anywhere in theworld,” says Nasser Al-Kharafi, the group’sPresident, and one of the world’s richest men.

Investment Dar’s Chairman and ManagingDirector, Adnan Al-Musallam, says, “Nobodybelieves today that any country can stand onits own. Globalization is here to stay, and if youdon’t go global you will remain static.”

Similar sentiments are expressed by Dr.Saad Al-Barrak, Managing Director and DeputyChairman of Kuwait-based telecoms giant MTC.“You cannot just be regional any more. Youhave to go global, or you will stagnate,” he says.MTC and its rival, Wataniya, have both beenpursuing aggressive expansion strategiesabroad. MTC, which in July secured the licenseto become Saudi Arabia’s third mobile opera-tor, aims to become one of the top 10 telecomcompanies worldwide. In April, Wataniya wonPalestine’s second mobile license.

Logistics companies like Agility and Kuwait& Gulf Link Transport are among a number ofKuwaiti firms with ongoing contracts to assistU.S. reconstruction efforts in Iraq, but theirregional ambitions are much wider. Dr. AliDashti, KGL’s Chairman, says, “Our objectiveis to create a world-class supply chain groupof companies in this region. And when I saythis region, I mean not just the Middle East, butAfrica, India and Pakistan.”

CEO of Gulf Investment House Bader Al-Alisays that the regional scenario has changedcompletely since the take-over in Iraq, and thathis company is now embarking on an aggres-sive expansion campaign in real estate, con-sumer finance and investment bankingthroughout the Gulf area. ■

JEHAD M.AL-QABANDIManaging Directorand CEO of Al-Ritaj

Kuwait-based Al Ritaj is poised toservice the region’s hithertountapped small and medium sizedenterprises space through localizedinvestment strategies ofinternational standards

Continued from page 1

SUMMIT COMMUNICATIONSIN KUWAIT

Project Management: Matthew Ossolinski,

Cristina Salgado, Aidil Azman and Clair Balfour

For further information contact: SUMMIT COMMUNICATIONS

1040 First Avenue, Suite 395, New York, NY 10022-2902

Tel: 1 (212) 286-0034 ,Fax: 1 (212) 286-8376, E-mail: [email protected] online version is available at

www.nytimes.com/global/kuwait


www.kuwaitfund.org

Henan Kaifeng Carbon Manufacturing Plant, China Water Supply

& Sanitation Works, Bosnia

Kirago-Giciye Tea Cultivation & Processing, RwandaDevelopment of

Pharmaceutical Industry, Egypt



FOREIGN PARTICIPATION IS KEYTO BOOSTING OIL PRODUCTION

Exploration Drilling Production Loading

Growing the futurein a clean

Environment

w w w. k o c k w. c o m

At the heart of Kuwait’s standing inthe international community are itsmassive oil reserves—officially put

at around 99 billion barrels, or close to 10percent of the world’s total. But Kuwait’spotential for expanding production of theworld’s most traded commodity is in turndependent on cooperation with other coun-tries, as represented by the big internationaloil firms.

As Hani Hussein, former DeputyChairman and Chief Executive Officer of thestate-owned Kuwait Petroleum Company(KPC), says, “In order to develop our indus-try, be it in exploration, production, refin-ing, or petrochemicals, we have to rely onthe interaction and assistance of compa-nies worldwide.”

Some $44 billion are being spent onmega projects such as a large refinery andupstream improvements to raise output, inaddition to a number of large petrochem-icals plants. Farouk Al-Zanki, Chairman andManaging Director of Kuwait Oil Company(KOC), KPC’s upstream arm, says the wholesector needs to be upgraded, and thatexternal assistance is vital. He stresses theneed to employ new technology to movebeyond the recovery of easily accessibleoil and to boost production capacity fromaround 2.6 million barrels a day to Kuwait’starget of four million barrels per day by2020.

The long-awaited Kuwait Project, whichwould open five fields in the north of thecountry to international companies, is thefirst major undertaking since the national-ization of the oil sector in the 1970s toreintroduce the international oil compa-nies (IOCs) back into the Kuwaiti fields. “Wedefinitely have the potential to achieve thefour million barrels per day. We have the

Huge investment and mega projects are needed to achieve thetarget of four million barrels of oilper day by 2020

The launch of a value added real estatefund that will invest in up to $140 millionof U.S. real estate is one of the latestventures of Kuwait-based GlobalSecurities House (GSH). Theinternational investment arm ofSecurities House Kuwait, GSH and itspartner, ABC InternationalBank, intend the Bronco Fundto acquire a diverse portfolioof offices and industrialassets in major U.S. cities.

Earlier this year the samepartnership announced thesuccessful sale of the assetsof their jointly sponsored AlBait UK Real Estate Fund for acool $117 million.

GSH structures, manages,and monitors global realestate products on behalf ofits investors. Assets controlled by thecompany, which already includeinstitutional quality real estate holdingsin the U.S., have an impressive totalvalue of US$1.8 billion.

With its extensive experience in real

estate investments in the U.S., U.K.,and France, GSH has built its reputationon a proven ability for cherry picking.“On a monthly basis, we have 3-4different opportunities that come to ourtable,” says Fahad Boodai, ChiefExecutive Officer. “Out of those, we

might not pick any of them,or we may pick one that wereally like. We are not underpressure to do somethingevery day. Unless it is anexceptional product, thenwe will not do it.”

He puts the emphasis onthe quality of theinvestments that the firmbrings to investors, and onfinding opportunities that fitthe market. “It is really thequality not the quantity that

is important. It doesn’t have to be a lotof investment. We usually work fromthe investor’s point of view, and that ishow we look at it, because at the end ofthe day we are investors along withthem,” he adds.

FAHAD F. BOODAIChief ExecutiveOfficer of GlobalSecurities House

REAL ESTATE FUND TARGETS U.S. CITIES


0 0/ El SalvadorSPECIAL ADVERTISING SECTION 7 / KuwaitSPECIAL ADVERTISING SECTION

reserves and we have the financial capac-ity,” says Mr. Al-Zanki. “What we lack isthe technical capability, and that is themain reason why the Kuwait Project cameinto existence.”

In the long term, Kuwait must focus onbuilding its own trained workforce, but thiscannot be achieved overnight, he adds.“In the meantime, we have to look at oth-er options, and the involvementof international oil companiesis our first choice. We need toinvite Westerners like theAmericans and Europeans toparticipate in the major pro-jects, because of their experi-ence, and the complexity andthe size of these projects.”

Hashim El-Rifaai, Chairmanand Managing Director of KOC’ssister company, OilDevelopment Company, saysthis is the beginning of a newera. “We are no longer employ-ing members of the IOCs to be advisors.The reintroduction of the IOCs is to takeresponsibility for developing fields, demon-strating their capabilities, and on-job train-ing of nationals on their fields.”

A prime example of the benefits that

can flow from partnerships with interna-tional companies is Equate, the largestpetrochemicals plant in the country, a jointventure of more than 10 years betweenKuwait ’s Petrochemical IndustriesCompany and U.S. partners Union Carbide,a subsidiary of Dow Chemical. “You cansee the confidence in this venture, the val-ue and the transfer of knowledge,” says

Hamad Al-Terkait, Equate’sPresident. “Billions of dollarshave been put into Kuwait. Ithas brought good value and high-er value.”

Meanwhile, Kuwait EnergyCompany (KEC), founded justtwo years ago, is breaking newground in the private sector, eye-ing investment opportunities inthe Middle East, Africa, andCentral Asia in its drive tobecome the preeminent MiddleEast-based independent oil andgas company.

“We are pioneering in a completely newsector of the business in this part of theworld,” says Sara Akbar, Deputy Chairmanand Managing Director. “And that is theindependent, upstream company, whichis completely missing from this region.” ■

Equipping youngKuwaitis to functionin a globalized worldis one of theprimary objectivesof education,according toMinister ofEducation, NouriyaAl-Subeeh. “Weneed to have auniversalcurriculum, not aKuwaiti one,” shesays. “We will still have our own specialsubjects like the Arabic language andKoran studies, which are special for theMuslim world, but we are looking forwardto the future.”

Addressing the need to find a balancebetween the traditions of Kuwaiti societyand the requirements of a modernizingeconomy, she points out that ways ofteaching are changing. “There are somewho are afraid of modern teaching; weneed to show them that nothing in ourreligion will change because of this.”

The University of Kuwait has growndramatically from its modest beginningsin 1966. Over the years, the university hasseen dramatic growth in both studentnumbers and faculty strength. Today, 13colleges offer 72 academic programs in

sciences andhumanities, inaddition to 36masters anddoctoral levelprograms.

Undergraduatestudents numberalmost 19,400, witha further 940students in post-graduate studies.The culturallydiverse faculty staff

of 1,433 includes internationallyrecognized academics, and the sprawlingcampuses boast state-of-the-art facilities,sophisticated laboratories, libraries andtechnological resources.

Together with its commitment to thequality of its scientific programs and itsresearch performance, the universityemphasizes its “openness and receptivityto emerging concerns of globalsignificance, and the internationalcompatibility of its programs as adetermined move toward coveted worldclass status.”

“With several new programs across theboard for clearance and implementation,the institutional development process is onfast track,” says Abdullah Al Fuhaid, theuniversity’s President.

While the Ministry of Education isbusy creating a national curriculumthat prepares young Kuwaitis for theglobalized world, Westernersventuring into the country would dowell to brush up on a few pointersfor carrying out business Kuwaiti-style.

Minister ofInformation H.E.Abdullah Saud AlMuhailbi says thatKuwait is a friendly andopen nation, and that“the KuwaitiConstitution guaranteescitizens’ freedom ofcitizens, especially thefreedom of expression.”Dr Rola Dashti, the first femalechairperson of the Kuwait EconomicSociety, says that Kuwait is a veryfriendly community for foreigninvestment, adding, “Kuwait is proneto an open economy since Kuwaitishave historically been traders.”

Nick A. Nicolaou, CEO of HSBCKuwait, confirms that the local

business community has been veryreceptive to the growinginternational presence in thecountry, while Kuwait CountryOfficer for Citibank, Raj Dvivedi,comments, “Relationships and trustare very important. When we puttogether our business plan for the

country, we said ourpriority was to earntrust. If we do that,business will follow.”

Citibank’s approachwas the right one.Kuwaitis traditionallyprefer to do businesswith those with whomthey have a personalrelationship, and

business is carried out once anatmosphere of trust and friendshiphas been established.

The tradition of the diwaniya isalso still strong in Kuwait, andtoday’s diwaniyas are a meetingplace for men where subjects suchas politics and business arediscussed.

NOURIYA AL-SUBEEHMinister ofEducation

EDUCATION TO MEET GLOBALIZING NEEDS

DOING BUSINESS IN KUWAITFAROUK AL ZANKIChairman and MD of Kuwait OilCompany

A traditional ‘diwaniya’ is normally a large reception area attached to the main house.

ABDULLAH AL FUHAIDPresident of Kuwait University

‘RELATIONSHIPSAND TRUST ARE

VERY IMPORTANT.WHEN WE PUT OUR

BUSINESS PLANTOGETHER FOR THE

COUNTRYT, OURPRIORITY WAS TO

EARN TRUST’


El Salvador / 0 0 SPECIAL ADVERTISING SECTIONKuwait/ 8 SPECIAL ADVERTISING SECTION

Among the many elements that con-tribute to the close relationshipbetween Kuwait and the United States

is a shared interest in the stability and pros-perity of the region. Apart from its impor-tance to the U.S. as a source of oil, saysRichard LeBaron, former U.S. Ambassadorto Kuwait, “I think we share broader inter-est in seeing development, in a broad sense,in all the countries of the region, includingIraq and the Gulf countries as well.”

The Kuwaitis, he says, have given gen-erous and strategically important supportto Operation Iraqi Freedom, without whichthe task of U.S. forces in Iraq would be muchmore difficult. But even more than that, “it’sa relationship that also extends beyond justthe Gulf area. The Kuwait Fund for ArabDevelopment, for example, is operating allover Africa, and places in Asia and so forth,and we try to co-operate in some of thoseareas as well,” the Ambassador adds.

Established in 1961, the same year thatKuwait gained its independence, the KuwaitFund for Arab Development extends aid toArab and other developing countries, actingon behalf of the state. In its 45 years of oper-ation, it has assisted development in more

than 100 countries across the world. Anautonomous public body, with an indepen-dent legal identity, the fund is administeredby a board of directors appointed by theCrown Prince, the Prime Minister, and theChairman of the Board. The Chairman of theFund is the Minister of Foreign Affairs, cur-rently Sheikh Mohammad Al-Sabah.

Director General Abdulwahab Al-Baderpoints out what an advanced idea the fundwas at the time of its inception. “To start aninstitution of this nature was an idea wellahead of its time. In 1961, there were onlya handful of bilateral development institutionsaround the world.

“Kuwait is a small country, but we havealways considered ourselves as part of theinternational community,” he affirms. “To beable to live in this world, you have to lookat the welfare of your neighbors and yourbrothers around you, and that’s the mainthinking behind the idea.”

Until 2000, the fund focused on buildingup the infrastructure of developing coun-tries, placing the emphasis on financing pro-jects in the agriculture, irrigation, transport,communications, energy, industry, and waterand sewage sectors. In more recent years,it has been extending its support to healthand education projects - areas in which itsdirector general expects to see increasedinvolvement in the future.

Initially, the fund confined its activities tothe Arab region, but since 1975 it has extend-

ed its support to a much wider range ofcountries. Today, in addition to supportingdevelopment projects in Arab, African, andAsian nations, it reaches out to Central Asiaand Europe, and Latin America and theCaribbean. Total loan commitments haverisen to around $13.5 million. Just over halfof the fund’s total of almost 700 loans arefor large projects requiring co-financing withother donors.

The fund works closely with the countriesto which it provides support. “Nobody under-stands the requirements of any country morethan the people of the country themselves,”says Mr. Al-Bader. “The recipient countrydecides whether a project is to their bestbenefit or not. We look into the economicsof the project and whether it’s the right pro-ject technically, because, in the end, we

have to see the return is worthwhile. Lateron, we try to follow as much as we canthe progress of the project, even yearsafter.”

While the fund is chiefly engaged infinancing projects, it also provides tech-nical assistance to strengthen and accel-erate development efforts. Over the years,it has built up such a level of trust withthe countries it deals with that it is some-times asked to participate in projects, notfor financial backing, but for its experi-ence. Says Mr. Al-Bader, “They like us tobe there as a lead participant. Even if wedon’t have majority financing for specificprojects, we are by default leading theway because of our experience.”

In addition to providing direct aid, Kuwaitalso contributes through the fund to theresources of regional and internationalinstitutions such as the Arab Fund forEconomic and Social Development, theAfrican Development Fund, theInternational Development Associationand the African Development Bank.

Mr. Al-Bader says the principle of aidis very simple and very important. “Aid isone way of really eliminating wars andpoverty. A lot of wars are caused by pover-ty, because it is very easy to manipulatethe underprivileged into doing somethingthat they don’t want to do. If they haveanything to eat, the rest doesn’t matter tothem,” he explains. ■

HOW OIL WEALTH HAS ENABLED A SMALL ARAB COUNTRY TO ASSIST DEVELOPING NATIONS ALL OVER THE WORLD

Ouagadougou Water Supply Project in Burkina Faso, Western Africa, which the Kuwait Fund co-financed with a US$14 million loan

The upgrading of Ethiopia’s Addis Ababa Bole International Airport is backed by multi-million dollar loans from the fund.

ABDULWAHAB AL-BADERDirector General ofKuwait Fund for Arab Development

MOHAMMAD AL-SABAHMinister of ForeignAffairs and Chairmanof the Kuwait Fund

Supporting development in othercountries is an important part ofKuwait’s foreign policy and reflectsthe active role it plays in theinternational community


with the U.S. presence in neighboring Iraq,and the ongoing reconstruction efforts, togive a new lease on life to the local hospi-tality industry. Business travelers accountfor 90 percent of hotel occupancy.

International hotel chains are enteringthe market, and new hotels are springingup. “You can see that there are a lot of pro-jects in the city,” says Laurent Rigaud, for-mer General Manager of Holiday InnDowntown, part of the Inter-ContinentalHotels Group. “There are oppor-tunities here, and this is whyyou have all the key players join-ing the market.”

Meanwhile, the governmentwants to encourage Kuwaitisto holiday at home instead ofspending billions of dollars onforeign vacations. As part ofits bid to diversify the econo-my and create more jobs, ithas launched an extensivetourism development plan,aimed primarily at the domes-tic market and GCC countriessuch as Bahrain, Oman, Qatar,Saudi Arabia and the United Arab Emirates.

Andreas Bossard, General Manager ofHilton Kuwait Resort, says his establish-ment has already changed its business mixconsiderably. “The Hilton was very muchoccupied by the Americans during thewar. Now we are far more into the leisure

business. Not everyone can go everyweekend to Dubai, Bahrain, or Beirut sosome people are staying here. We aremaking changes and trying to attract thesepeople to our resort,” he comments.

Mövenpick Hotels & Resorts’ secondhotel in Kuwait, the five-star MövenpickResort & Residence Al-Bidaa, whichopened this summer, is designed to caterto both business and tourist visitors.Positioned in the prestigious Salmiya quar-

ter, only 15 minutes fromKuwait International Airport,the Al-Bidaa boasts more than300 rooms and suites, threeflexible conference rooms capa-ble of accommodating up to100 people, a sub-divisible ball-room for 300, and a businesscenter.

“We are a multi-purposehotel,” says General ManagerJohnny Mathis. “We can caterto the meeting-convention mar-ket, but we also have the resortpart with a nice beach, a healthclub and a very exclusive spa.

We also offer long stay facilities.” He agrees there is plenty of potential

for the development of domestic tourism.“Kuwaitis like to enjoy their leisure but donot necessarily want to travel, especial-ly for 3-5 days. Many would prefer to staywithin the country,” he says. ■


Bustling Kuwait City draws visitorsfrom across the globe these days,but it’s work rather than leisure that

attracts them. Rubbing shoulders withtraveling dignitaries, military personnel,and government officials are business

people, investors, contractors and oil exec-utives from the United States, the UK,Japan, Korea, Taiwan, and Singapore.

The oil-fueled economic boom andKuwait’s increasing importance as a centerfor finance and investment has combined

New hotels are being built to cater to business visitors, but moves arealso under way to boost domestic and regional leisure tourism

EYE TOWARD BUSINESSTOURISM BOOSTS HOSPITALITY

JOHNNY MATHISGeneral Manager of the MovenpickResort & ResidenceAl-Bidaa Kuwait

Kuwait offersa range of topclass hotels.Shown herefrom left:Crowne PlazaKuwait,MövenpickResort &Residence Al-Bidaa, and theHoliday InnKuwait.


SPECIAL ADVERTISING SECTION

LEADING HOTELS REFLECT THEAGE OF GLOBALIZATIONPart of the local hospitality scene for a quarter of a century, the RadissonSAS Hotel in Kuwait displays both local and international influences

For anyone looking for a symbol ofglobalization in Kuwait, the 5-starRadisson SAS Hotel would be a good

place to start. At its beachside locationon the Arabian Gulf, just 15 minutes fromthe airport, 10 minutes from the city cen-ter, and five from the Salmiya shoppingcenter, the Radisson SAS has been cater-ing to international visitors for more thana quarter of a century.

The 200-room hotel boasts luxury suitesand apartments and an exec-utive floor for high-profi leguests. Amenities include abusiness center and 12 meet-ing rooms, the largest of whichcan accommodate up to 1,000people. High-speed wirelessInternet access is availablethroughout. For relaxing, thereis a private beach and a state-of-the-art gym. “You could saythat we’re a business hotelwith resort facilities,” says JanEilertsen, the hotel’s generalmanager.

Guests can choose between four restau-rants offering European, Chinese, and evenPolynesian, food, in addition to MiddleEastern specialties. Music lovers willappreciate the hotel’s reputation as anestablished concert venue and culturalcenter. Earlier this year it hosted the sec-ond Gulf Jazz Festival, featuring an inter-national line-up ranging from Swedishpianist Bobo Stenson and American sax-ophonist Ricky Ford, to a Dutch trio play-ing gypsy swing.

On the sea front, however, is as idiomat-ic a symbol of Arab identity as you are

likely to find anywhere. A majestic Arabianwooden dhow so large it has been fea-tured in the Guinness Book of Recordshouses an exhibition center.

Radisson hotels are part of the RezidorHotel Group, which is expanding rapidlyacross Europe, the Middle East and Africa.Mr. Eilertsen is an enthusiastic advocatefor Rezidor’s “Yes I Can” service philoso-phy. “It’s all about attitude, how to meetand greet the guests, how to follow-up,

how to make sure people arehappy when they leave thehotel,” he explains. “It ’s 100percent guest satisfaction. It’smaking it right.”

Most of the guests at theRadisson SAS are visiting theregion for business reasons,and the high level of service isan important factor in makingthe hotel their preferred loca-tion. “Americans representapproximately 30-35 percentof our business,” says Mr.

Eilertsen. “One of the reasons it ’s thathigh is all the traffic going in and out ofIraq, and all the activities related to what’shappening there.”

He would like to see Kuwait develop-ing more rapidly, particularly in the areaof tourism. “Kuwait is a country with a lotof opportunities. All the resources arethere. The people are open-minded, friend-ly, and well educated,” he remarks. “Ican’t see any reason why Kuwait shouldnot be able to take its market share ofwhat’s happening now in the region whenit comes to tourism, meetings, incentives,conventions and exhibitions.” ■

JAN EILERTSENGeneral Manager of Radisson SASHotel, Kuwait

Guests can combine business with leisure and enjoy food and culture from around the world



High oil prices are the key to therejuvenation of the Kuwaiti hos-pitality industry, according to Hani

Kafafi, General Manager of Kuwait ’sCrowne Plaza Hotel and Director ofOperations in the Northern Gulf forInterContinental Hotels Group. “As longas oil prices are high and there is a sur-plus of funds, the country and the citywill catch up with all the projects thathave been pending for the past 20 years,such as the northern oil fields and oth-er mega infrastructure projects. To under-take that, you need hotel rooms,” saysMr. Kafafi.

With all the development that is expect-ed to take place, new hotels are appear-ing with standards and facilities equalto, or better than, those to be found inthe competing capitals in the Gulf region.“We have to be able to satisfy the demandand expectations of the experienced trav-elers that visit Saudi Arabia, Dubai, Qatar,or wherever,” adds Mr. Kafafi. “The hotelsector must develop, to be able to com-pete on the same footing.”

Part of InterContinental Hotels Group,the Crowne Plaza is a deluxe, interna-tional hotel with 330 rooms and suites,which offers every comfort its high-endguests could expect. Conveniently locat-ed near Kuwait InternationalAirport, and within easy reachof the major military installa-tions, the city center and localbeaches, the impressivelydesigned hotel features aGrand Atrium lobby with amajestic staircase and capsulelifts that whisk guests to theupper floors.

It boasts no fewer than sev-en restaurants, offering a widevariety of internationalcuisines, while for those look-ing to stay trim, the hotel’sNautilus fitness center is open 24 hoursa day and has a wide range of the latestequipment. A comprehensive range ofwell-appointed meeting rooms, confer-ence faci l it ies and banquet hal ls isequipped with audio-visual equipment,simultaneous translation facilities andvideoconferencing facilities.

Mr. Kafafi puts the service provided bythe hotel staff at the top of the CrownePlaza’s appeal. “The number one attrac-tion of the Crowne Plaza is the staff, theteamwork, the service, the knowledge,

attentiveness and the friendli-ness,” he says. “Some peoplecome for the varieties of food.Other people like the spa andthe dynamic health club wehave. Others may be attract-ed to the transportation pro-vided to the guests. Many whostay with us have business inthe area so location plays avery strong role.”

However, there is no roomfor complacency. A high stan-dard of hospitality will defi-nitely not be enough for the

hotel to compete in the future marketenvironment, he says. “We are constantlyinnovating; we do not stop.”

A major expansion of the hotel is under-way. At the end of the year, a magnifi-cent new Aqua Tonic spa will open,featuring 20 different treatment rooms,and a 650-square meter pool, with a dou-

NEW HOTELS AND IMPROVED STANDARDS AND FACILITIES RAISE COMPETITIVENESS WITH OTHER GULF CAPITALSMajor expansion of the deluxeCrowne Plaza will provide extrarooms and upgrade leisure andbusiness facilities in anticipation of busier times ahead

ble-deck and four different water tem-peratures. “It will be one of the greatestspas in Kuwait and the Middle East,”promises Mr. Kafafi.

The hotel is also building a new con-ference center and an 1,800-square meterballroom, which will boost its facilities forweddings, functions, conferences andproduct launches. In addition, there willbe 200 new guest roomsand suites.

“If you look at theCrowne Plaza in 2009, youwill have the main hotelbuilding, the extension withthe big conference facili-ties and the spa with a largemulti-purpose playground.With these improvements,we will attract differentmarkets and compete successfully.”

Mr. Kafafi attaches prime importanceto the American market, particularly sinceKuwait is the gateway to Iraq. “I believein the American market. I am sureAmerican companies have plans for thenext 10-20 years that include the MiddleEast, Iraq and Kuwait. Looking into the

future, Kuwait is the platform from whichto rebuild Iraq. If I were an investor, Iwould be interested. There will be a lotof international American aid in the future.So, the American market is the numberone market today. We are in contact withall the sources of business in the States,and we are networking in the major busi-ness cities,” he states.

Mr. Kafafi also welcomesthe arrival of new brandsinto the local market. “Takewhat has happened in thefour-star category. Fiveyears ago, there was nofour-star hotel category inKuwait. In the past fewyears, new brands havebeen opening. Kuwait nowhas a very good variety of

four-star hotels,” he explains.Kuwait’s developing hospitality market

will favor the most competent companies,according to Mr. Kafai, who adds, “Thehotel business is being transformed today.The future belongs to the strong brandedproducts, to the organizations that are real-ly dominating the business.” ■

Part of the InterContinental Hotels Group, the Crowne Plaza Kuwait plans to open one of the finest spas in the Middle East later this year.

’I BELIEVE IN THEAMERICAN MARKET.

I AM SURE THATAMERICAN COMPANIESHAVE PLANS FOR THE

NEXT 10-20 YEARS THATINCLUDE THE MIDDLE

EAST, IRAQ ANDKUWAIT’

HANI KAFAFI, General Manager of the Crowne Plaza hotel


14/ KuwaitSPECIAL ADVERTISING SECTION

Already a world leader in developingintegrated and mixed-use projects,IFA Hotels & Resorts is lining upnew schemes worldwide

Kuwaitis do not need to getthe message about expan-sion abroad, they have

already got it, says Talal Al-Bahar,Chairman and Managing Directorof IFA Hotels & Resorts (IFA HR).“Even small companies areexpanding internationally. Theyare pushing their internationalinvestment because they seehow big the market is, and thepotential of future markets,” hecomments.

Mr. Al-Bahar knows more thanmost about international expan-sion. IFA HR has become one of the world’sleading international companies engaged inthe development of premier integrated andmixed-use hotel and resort projects. IFA HR,whose majority shareholder is Kuwait-basedInternational Financial Advisors, has estab-

Projects like the Fairmont Zimbali in South Africa have made IFA H&R world leader in its field.

lished footholds throughout Europe, the MiddleEast, the Indian Ocean region and Africa.

“Right now, worldwide we have close to$3.5 to $4 billion in investment and projectsthat we are building,” says Mr. Al-Bahar. InAugust, the company announced year-end

profits of KD22.8 million (US$80.9million) - a massive 236 percentincrease over the previous year.It is listed on the Kuwait StockExchange with a market capital-ization of over $1 billion. It is alsolisted on the Johannesburg StockExchange, and has plans to liston other major exchanges.

IFA HR is continuing its aggres-sive global expansion, addingnew projects to existing ones inDubai, Lebanon, London, SouthAfrica, Zanzibar, Kenya andPortugal. At the end of last year,

it entered the Asian market, acquiring 24.9percent of Thai-listed residential develop-ment company Raimon Land. In March, itlaunched a joint venture of four hotels inNamibia, and in August a joint venture in theSeychelles.

“We are focusing on Africa and Asia,”says Mr. Al-Bahar. “We are also examiningpossibilities in Latin America and CentralAmerica. We are looking at the Bahamas,Costa Rica, Panama, Mexico and Brazil.Developing markets give us good diversifi-cation in our portfolio, which we need.”

Opportunities for partnerships with U.S.companies are also being explored. “Weare aiming to be in the U.S. within the next

year, and are looking at some strategicinvestment opportunities with U.S.-basedreal estate developers with a presence inother regions,” he adds.

IFA HR also has a majority stake in Yotel,a luxury pod-concept hotel brand that couldrevolutionize the hospitality industry, andwhich it intends to introduce worldwide,starting with openings this year at London’sHeathrow and Gatwick airports. ■

TALAL AL-BAHARChairman and MD of IFA Hotels &Resorts

POTENTIAL OF FOREIGN MARKETS DRIVES KUWAITI EXPANSION


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