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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


4/92TheEDGE2

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


22/922 TheEDGE

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.

TheEDGE24


27/92TheEDGE 2

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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37/92

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

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