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...

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INNOVATION IN GCC ECONOMIES

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Contents

54. Car ReviewMini Cooper vs VW Golf R

more inside...

Gulf

Fina

ncia

l Ins

ider

April 2014

Business The Oil industry in Transition

24

20

DubaiMaritime Industry

52

DubaiWorld Cities Ranking

AfghanistanHuman Faces Vehind Afghan War

48

GCCMarket Outlook – GCC Companies

22

32BahrainSo Whats The Best Option for Bahrain?

40MENAMena Tax Rates

Saudi ArabiaBankers and Financial Institutions

2760. Men’s FashionPull & Bear

58. Motoring2014 Bentley Flying Spur

62. ArtAlexandra Novik

Contents

14Cover Story

INNOVATION IN THE GCC ECONOMIES... and in the Bahrain economy

4 Gulf Insider April 2014

Inbox Readers’ Letter

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The multi-award winning Arabian magazine

The Arabian Review

BAHRAINME’s #1 economically free country - official

QATARReal Estate Report

EGYPTDemoralized Tourist Industry

OBJECTS OF DESIREWhy ‘passion investments’ are outperforming shares


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The Arabian Review

BAHRAINManama Dialogue

REAL ESTATE2014 Trends

ECONOMY2014 Outlook


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Also inside

The Arabian Review

CELEBRATING FOUR DECADES OF BANKING AND 25 YEARS OF CONSUMER BANKING IN BAHRAIN

Bahrain/India RelationsNew ties; new opportunities

BMW 6 Series650i review

High Net WorthSuper Yachts in Dubai

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Would you like to be a PUBLISHED Photographer? If your photos of Bahrain and the region are good enough, they could be published in Gulf Insider/Areej/Bahrain Confidential magazines. Each month we publish the most impressive images we receive and give full credit to the photographer.

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Know-your-marketYour article on Waitrose’s withdrawal from Bahrain was informative; reminds me of those case studies that they used to have in business school. It’s a learning lesson not just for the brand but also new entrants seeking to launch themselves in Middle Eastern markets. A SWOT analysis and an understanding of which phase the market is in, is very important!

Tom, 45 years, Legal Consultant

F1 FeverHello, I was really disappointed that you guys didn’t run any competition with F1 tickets as prizes! You used to have a lot of competitions before. It would be really cool if you started them again. Thanks and keep up the good work!

Raul, 33 years, First Gen Entrepreneur

Park Like a Boss!Dear Ed, the picture-feature on the Dubai based American University parking lot was amazing. I totally love cars! Just a suggestion; you guys should do a similar feature for Bahrain as well. We’re stylish too!

Karim, 23 years, Student

Indo-Bahrain TiesTrade relations between India and Bahrain date back to I don’t know when! The Kingdom has been more than home to so many Indians; we’re free to practice our religion, dress how we want to, celebrate our festivals and more! Also, so many new Indian restaurants have come up over the past few years. I would like to applaud HE Mohan Kumar and his wife Ms Mala Kumar for their continuous efforts in bringing India to Bahrain!

Lakshmi, Banker

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DUBAIWorld’s 7th most expensive city

GCCMarket outlook

AFGHAN WAR... Human faces

Bahrain BD2 KSA SR20 Kuwait KD1.75 Oman RO2 Qatar QR20 UAE DHS20

Issue 111


Insi

de...

…and in the Bahrain economy

The Arabian Review

INNOVATION IN GCC ECONOMIES



BENTLEY FLYING SPUR RIVA 68’ EGOMINI COOPER vs VW GOLF R

The Arabian Review

Media

Established since 2004, Gulf Insider is the multi award winning Arabian business and current affairs magazine that also covers property and expat news, interviews, car reviews, travel features, even a bit of art and fashion.

The monthly print edition of Gulf Insider is distributed to Bahrain’s highest spending consumers and decision makers. There’s also limited distribution in other GCC states via airline lounges, duty free, ARAMCO in the KSA, and other strategic locations.

Gulf Insider now also includes: Easy to navigate website that offers online access to the magazine and much, much more.

Access to valuable GCC news reported by the international media thanks to a free weekly email service for readers.

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Wealthy set to spend more on luxuryGCC states have benefited from real GDP growing 24% over the five years to 2013, but rapidly rising populations have made continuous economic growth essential to maintain living standards (between 2008 and 2013, the population of Bahrain rose by 19%). As long as investment continues in transportation, education and building downstream industries, Bahrain should escape the worst consequences of a fall in the international oil price, and Bahrain has among the world’s highest gross national savings.

But after many years in which daily essentials, such as food and power, have been heavily subsidised by the government, fiscal pressures mean Bahrain will seek to cut the amount it spends supporting household consumption. According to recent reports, Bahrain will gain a boost in living standards with GDP per capita forecast to rise by 12% over next five years. GDP growth in the Middle East is above the global average and is expected to remain steady in the short term but lower oil prices could expose fiscal vulnerability.

Across the world the spending of Ultra-High-Net-Worth Individuals (UHNWIs) is predicted to increase in 2014. Over a third of the wealth advisors surveyed said that they expect their clients’ spending on luxury goods to rise this year, while only 7 per cent are predicting a fall in expenditure.

The top three locations in the world with the greatest potential for luxury growth are all located here in the Middle East; number one is Qatar, second comes the UAE, and Saudi Arabia is third.

You can read about the above and much more in this issue of Gulf Insider.

Cover Image: Shareef Panhatt


NEW’S ROUND-UP

Batelco Annual Motor Show a Success

Batelco’s third annual Motor Show, organised by the Company’s Youth Marketing Team,which took place on March 22nd at Batelco’s Hamala Headquarters was hailed a huge success by the thousands of car and motorbike enthusiasts who attended.

The highlight of the event was a contest to choose the best car and best motorbike in a number of different categories, with awards and cash prizes in each category for 1st, 2nd and 3rd place. The car categories were Classic Sport, Classic Saloon, Classic 4x4, Four Cylinder Sport, Four Cylinder Saloon, Six Cylinder Sport, Six Cylinder Saloon, Eight Cylinder Sport, Eight Cylinder Saloon and 4x4 Vehicles and Trucks. The Motor Bike categories were Scooter, Sports, Metric, Harley Davidson V-Rod, Harley Davidson Classic, Customised Bikes and Touring Bikes.

Sixty winners were announced and presented with cash prizes and the full lists of names will be posted on the instagram account @batelcomotorshow. Among the many attractions at the event was a free raffle draw for visitors to the show, giving them the chance to win some great prizes.

Property Contracts in Dubai To Be Mandatory

Dubai’s real estate regulator is set to enforce the use of the standardised contracts to better police the emirate’s property market. The Dubai Land Department said that three of the standard contracts it issues regulating deals between buyers, sellers and property brokers would become mandatory from the beginning of May. Standardised property contracts were first drawn up and published by the department in 2008 and are already used by many of the emirate’s property brokers, but real estate brokers are not currently required to use them.

The Land Department said that it would be drawing up new standard contracts that would have to be used in all transactions that relate to the buying and selling of property. It added that models of the new contracts could be found on its property marketplace website, eMart. The new rules cover form F, which formalises the relationship between a seller and a buyer; form A, which formalises dealings between seller and broker; and form B, which formalises dealings between a buyer and a broker. Under the current rules, sellers may only name three property brokers to act for them. If this requirement is included in the new forms it could make it harder for brokers not instructed on property deals to try to get a cut by claiming to represent somebody they do not.

Contracts will become formal and completed after they have been recorded and documented at the DLD. “Having unified contracts between the parties not only avoids the misunderstanding and misinterpretation of articles that could previously have occurred, but it also guarantees the rights of all the stakeholders involved,” said Sultan Butti bin Mejren, the director general of the DLD. “It contributes to the enhancement of the competitiveness of the real estate market in Dubai and moves it to a new phase of leadership and excellence by establishing the principles of transparency and professional standards,” Mr bin Mejren said. “It will be of great value in assisting us to keep pace with the real estate boom currently taking place in Dubai and will promote confidence in the market.”

Property agents in Dubai welcomed the move. “This is another step forward for Dubai to position itself as a proper, serious place to do business,” said Mario Volpi, the managing director of Prestige Real Estate. “It is likely to speed up the sales process a little. It will also make it more explicit as to who is paying what charges and fees to whom.” Last August,

Mr bin Mejren was quoted in The National’s sister paper Al Ittihad as saying it would introduce seven new laws this year and next aimed at further regulating Dubai’s property market. A month later, the DLD announced it was doubling the transfer fee levied on each sale in the emirate to 4 per cent of a property’s value in an attempt to reduce speculation.

In November the department opened a new Rental Dispute Resolution Centre to better handle rent dispute cases. The DLD is also understood to be looking at introducing new standardised rent contracts later this year and refining Dubai’s rent index. The department’s new rules are coming in against a backdrop of rocketing house prices and rents in Dubai, which have led to fears that the emirate could be sliding towards another correction. In February, JLL reported that real estate prices rose by 22 per cent last year and could increase by another 10 to 15 per cent this year, putting them back in line with levels in 2008 before the global financial crisis hit. It also predicted that rents in Dubai could increase by another 10 to 20 per cent this year after increasing by an average of 17 per cent last year. – THE NATIONAL

Bahrain

9Gulf Insider April 2014

Business News

Investors Cancel $66m Bahrain Development Over Land Dispute

International investors have cancelled a BD25m ($66m) coastal development in Manama over a land ownership dispute with the government.

A consortium of Turkish, Saudi and Bahraini businessmen had planned to develop a resort, shopping mall, indoor and outdoor theme park, office tower, residences, a fish market, marina, jetty and public beach on Al Ghous Corniche in Muharraq, the area between the centre of Manama and the international airport.

The project was approved by the Municipalities and Urban Planning Affairs Minister in 2012 but work, due to begin last year, has not started, because the ministry had not been able to convince a government development firm to relinquish ownership of the required land, Gulf Daily News reported.

The northern section of the corniche, where the development was to be located, is owned by Bahrain Real Estate Investment Company (Edamah), a subsidiary of the government firm Bahrain Mumtalakat Holding Company.

Edamah has refused to swap its land in Muharraq for other plots elsewhere in the kingdom to allow the development to go ahead, according to Muharraq councillor Fatema Salman.

“Edamah refused to enter as a partner in the project with the Municipalities and Urban Planning Affairs Ministry after earlier rejecting getting its plots of land replaced with another through a deeds transfer by the Royal Court,” Salman was quoted as saying.

“Investment of BD25m doesn’t wait for procedures or tug-of-war and the consortium has decided to take its money to another Gulf coast, which is a loss to Bahrain and the public.

“The investors waited for years for the issue to be resolved and we tried our best to solve it, but as everyone can clearly see this country faces a lot of problems related to lack of coordination or understanding between bodies concerned.” – ARABIAN BUSINESS

Saudi Religious Police to Destroy Ancient GravesResidents in Saudi Arabia’s

southern city of al-Baha were angered by the Saudi religious police’s decision to level an ancient graveyard to the ground and remove most of the tomb stones over the graves, reported al-Hayat newspaper.

The Commission of the Promotion of Virtue and the Prevention of Vice razed what some residents believed was part of their heritage in line with Islamic tradition that does not encourage the use of tomb stones.

The residents accused the religious police of sabotaging the historical graves which date from as far back as 3,000 years. Some residents expressed the opinion that the graves should have been maintained as they represent the heritage of the city.

Historian Saad al-Kamookh said some historical accounts indicate that the people inside these graves used to worship the sun. “The graves are very old and some of them face al-Quds (Jerusalem). Some graves had children inside,” Kamookh said.

The area surrounding the graves had stones with ancient Arabic inscriptions, a fact that shows the people who lived there knew how to write, he noted. Archeologist Ahmad Qashash said most of the graves point to the east. “The way the graves were built with stones on top is beautiful and strange at the same time.

“It’s wrong to remove the stones from the graves because they represent part of the history of the Arabian peninsula. The Haia (religious police) shouldn’t have vandalized them under the pretext that some would engage in religious rituals near the graves,” he said. Qashash said more than 1,500 companions of the Prophet Mohammad lived in al-Baha and saw these graves and they did not touch them. – AL ARABIYA


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News Business

Hopes Fade for Surge In Iran EconomySuffering in an economy dragged down by years of

mismanagement and the effects of international sanctions, Iran’s increasingly impoverished middle class voted in huge numbers last summer for President Hassan Rouhani, who promised to reignite growth by restoring ties with the rest of the world.

But more than six months after Mr. Rouhani took office, hopes of a quick economic recovery are fading among ordinary Iranians, business owners and investors, while economists say the government is running out of cash.

Although Mr. Rouhani has managed to stabilize the national currency, halt inflation and forge a temporary nuclear deal that provides some relief from sanctions, delivering on his promises of economic growth has proved far more difficult. On taking office, he discovered that the government’s finances were in far worse condition than his predecessor, Mahmoud Ahmadinejad, had ever let on. Now, with a lack of petrodollars and declining tax revenues, Mr. Rouhani has little option but to take steps that in the short-run will only increase the pain for the voters who put him into office.

With the start of the Iranian new year, on Friday, the government will begin phasing out subsidies on energy, the start of a process that will send the prices of gasoline and electricity, and other utilities, soaring by nearly 90 percent, economists say.

The shortage of funds is also forcing the government to wind down a system of $12 monthly payments to nearly 60 million Iranians, with only the poorest eligible to reapply. In return, Mr. Rouhani’s government can promise only a reduction in the inflation rate to 25 percent next year, from 42 percent last year and 32 percent currently.

Iran’s stock market, which rode high on optimism injected by the new government and the temporary nuclear deal, has been in decline, losing 14 percent since its peak in December. The national currency, the rial, after months of stability, has dropped about 4 percent against the dollar in the last month, to just over 30,000 rials to the dollar on the black market.

For the first time since the elections, the government was forced to sell dollars on the open market this month to support

the rial, insiders say. Government spokesmen, trying to play down the significance of the rial’s fall, say the decline in the currency’s value is the result of a seasonal rise in demand for foreign currency tied to the New Year holiday.

Others are saying the markets are losing faith in the government’s ability to get the economy going. “We are once again witnessing investors taking their money out of stocks and instead speculating on gold and foreign currency,” one stock market expert, Hamid Mirmouni, told the Fararu website recently. “The government continues to waste time and money, investors are losing hope.”

Adding to the turmoil are the subsidy cuts — a step that most economists say is inevitable and necessary. Earlier, when gas prices were raised and rations imposed in 2007, protesters set fire to more than a dozen gas stations. The last time fuel subsidies were cut, in 2010, gasoline prices nearly quadrupled in Tehran.

Even those close to the Rouhani administration are saying they are hoping for a “miracle” to avoid the political damage from the cuts. “We are facing a black spring in Iran,” said Saeed Laylaz, an economist who advises Mr. Rouhani. He said he feared the government, like the Ahmadinejad administration, would resort to printing money to paper over the budget deficit, threatening a rise in inflation. “I am worried we might witness turmoil,” he said. – NEW YORK TIMES

Stop Music During Prayer Call, Abu Dhabi Hotels Told

The Abu Dhabi Tourism and Culture Authority sent out a circular to all hotels asking them to reduce the volume of music played in public areas during Adhan (call to prayer).

“This is the first time I have seen such a request by the authorities,” said Mohammed Hussain, director of sales and marketing at Al Ain Palace Hotel.

Having worked in the UAE’s hospitality industry for more than 42 years, Mr Hussain said he had never known music being played during the call to prayer to be an issue in the past and he had never received complaints. “Since the circular we check the prayer times daily and stop all music for about five minutes.”

Whether it be a pause in the background music or a live band stepping away from the stage briefly, the unexpected moment of silence has raised a few questions from guests. – THE NATIONAL

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News Business

Building Costs Could Deflate Dubai Property BubbleThe most likely cause of another collapse in property markets in Dubai is likely to

be a spiraling of costs in the construction sector, according to Jones Lang LaSalle.Speaking at its Top Trends in UAE Real Estate conference in Dubai, the firm’s head

of research for the MENA region, Craig Plumb, said there were four factors that could cause a correction to Dubai’s rapid recent increase in property sale prices.

Two of these were external – linked to global financial and geopolitical markets and therefore difficult to predict – while the other two were internal. One was linked to rents continuing to outstrip salaries and therefore making the city a less attractive place to live, but the most likely was a significant increase in the price of building materials and salaries in the construction sector.

“The worrying sign for the next year could well be the resource constraints and price inflation,” he said. “There will be more pressures on resources in the building and contracting industry over the next few years. “Dubai is now competing with other regional centres – most noticeably Doha and cities in Saudi. So there is strong regional competition both for materials –steel and glass – and people. “That could result in shortages and push up prices.”

In a recent report on mitigating risk in the UAE’s construction sector, cost consultancy EC Harris said that mega-projects in real estate would have to compete with major infrastructure projects for available resources.

Residential real estate development in new areas, such as Dubai Hills Estate, the first district in Mohammad Bin Rashid City, is lagging, and will be in competition for resources and labour when it does start on site,” it said. “This could potentially have an inflationary effect on the estimated $2bn programme. – CONSTRUCTION WEEK

Kuwait Studying Expat Quota SystemKuwait is considering introducing a quota on the number of expatriates allowed in

the country as it aims to halve the number of foreigners by 2023.Minister of Social Affairs and Labor Hind Al Subaih said the ministry was studying

means of implementing such a quota and it was not likely to come into force until a new labour force system comes into effect later this year, the Kuwait Times reported.

The previous minister last year announced Kuwait would reduce the number of expats by 100,000 per year for each of the next 10 years.

The reduction would eventually see the total number of expats halve from about 2 million to 1 million. Expats presently make up about two-thirds of Kuwait’s entire population.

Al Subaih also announced on Monday a suspension on hiring new foreign workers would be lifted from April 1 after new labour laws were finalised. The new rules remove an exemption on certain professions, although ensure an employee has the

skills to match the intended job. New employees also must undergo a medical examination and cannot have a criminal record in their home country.

The new regulations also crackdown on illegal hiring by targeting employers who sponsor expats who are found working for another employer. In such cases, the sponsoring employer will have its license suspended and he and his relatives will be banned from obtaining a new one for five years.

Kempinski Leaving Bahrain

Kempinski Hotel hope to find another location in Bahrain after the deal to manage its current property at Bahrain City Centre ends this year, it has emerged.

The GDN reported that Kempinski’s agreement with the Majid Al Futtaim Group to manage its existing location would end at midnight on June 30.

Majid Al Futtaim wants to replace the Kempinski Grand and Ixir Hotel with two separate hotels under a two-brand strategy designed to maximise proft, especially with two towers available for guests.

However, Kempinski Grand and Ixir Hotel general manager Puneet Singh said Europe’s oldest luxury hotel group hoped to return to Bahrain in “an appropriate location at an appropriate time”. - Gulf Daily News

Gulf insider March 14 W: 200mm x H: 265mm


Bahrain Living

... and the importance of innovation in the Bahraini economy

LIVING STANDARDS SET TO IMPROVE IN BAHRAIN

Bahrain is to welcome a boost in living standards with the rate of GDP per capita forecast to rise by 12% over the next five years, according

to a new report by ICAEW. In its latest quarterly Economic Insight report, the accountancy and finance body says the Bahrain government must step up efforts to diversify the economy away from reliance on hydrocarbon production as increased oil supply pushes prices down.

Economic Insight: Middle East warns that while GDP growth in the Middle East is above the global average and expected to remain steady in the short term, oil prices are likely to drop as global supplies rise. The rapid expansion of US shale production and possible return of Iran to international markets, following the lifting of sanctions, would provide another supply boost to the global oil market. If this results in lower oil prices it could expose fiscal vulnerability amongst other oil-producing states in the region.

INNOVATION IN THE GCC ECONOMIES

Photography: Shareef Panhatt


Living Bahrain

The Gulf Co-operation Council (GCC) has benefited from some of the world’s strongest growth rates since the financial crisis hit in 2008, with real GDP growing 24% over the five years to 2013. However, rapidly rising populations in GCC countries have made continuous economic growth essential to maintain living standards. Between 2008 and 2013, the population of Bahrain rose by 19% – more than six times quicker than the rate of growth in the UK or US (2.9% and 2.7% respectively). This meant that despite robust economic expansion, living standards (measured by GDP per capita) struggled to keep pace with GDP growth in the Kingdom.

Peter Beynon, Regional Director, ICAEW Middle East, said: “Diversification has been an economic priority of the Bahrain government for most of the last decade, but the Kingdom’s high birth rates combined with a rising immigrant population means the economy must expand further if living standards are to keep pace with GDP growth. As long as investment continues in transportation networks, improving education and building downstream industries, Bahrain should escape the worst consequences of a sharper fall in the international oil price.”

Fortunately, Bahrain has among the world’s highest gross national savings. According to the International Monetary Fund (IMF), Bahrain saved 39% of national earnings in 2013. This high savings rate, a result of strong exports and a persistent current account surplus, can be used to further finance investment, providing the Bahrain economy with a boost in their efforts to diversify and the prospect of higher GDP per capita.

Nevertheless, Bahrain households will feel the pinch of rising inflation. After many years in which daily essentials, such as food and power, have been heavily subsidised by the government, fiscal pressures mean Bahrain will seek to cut the amount it spends supporting household consumption. The immediate impact will be to increase the prices of these goods, raising inflation.

Douglas McWilliams, Chief Economist and Executive Chairman of Cebr, said: “

The baseline forecast shows the price of oil falling gently in cash terms. With a rising cost of living this puts pressure

on the Middle Eastern economies to diversify. The process would be intensified if an agreement is made that ends sanctions on Iran, which would (even after allowing for cuts in supply from other sources) reduce the price of oil further. Our calculation is that an end of sanctions would reduce the price of oil by $8 a barrel, though this is a central estimate. This makes improved education, skills and diversification key priorities for the region.”

Bahrain has among the world’s highest gross national savings. According to the International Monetary Fund (IMF), Bahrain saved 39% of national earnings in 2013.

The report also shows: Following a period in which living standards struggled to keep pace with GDP growth, Oman and Kuwait will welcome a boost to GDP per capita rates growing 5% and 8% respectively over the next five years.

The most dramatic improvements to living standards is expected in Qatar where GDP per capita should double between 2014 and 2025 thanks to the low cost of producing gas and the country’s hosting of the 2022 football World Cup.

High levels of fiscal spending will continue to provide an impetus for growth in Saudi Arabia, UAE and Qatar with GDP growth in 2014 expected to reach 4.5%, 4.2% and 6.3% respectively, irrespective of a deal with Iran. However, this will fall slightly later in the forecast period as governments grapple with the difficult problem of reducing spending on subsidies.


Bahrain Living

Speaking at the recent second edition of the GCC Leadership Conference, Dr. Jarmo Kotilaine, Senior Economist of the Economic Development Board (EDB) highlighted the importance of innovation in the Bahraini economy.

The GCC region has recorded positive growth since the 1980s. In earlier decades the key drivers of this growth were shifting demographics, increased connectivity to the rest of the world, and of course, high oil prices and oil production.

But the GCC has been aware for some time that while the region’s oil is plentiful, it is still a finite resource and must be treated as such. There has been a genuine effort to steer consumers away from their gas-guzzling ways towards more sustainable practices. At the same time, GCC economies have been investing in their human capital and evolving into more knowledge-based economies.

The figures speak for themselves. Between 2000 and 2012, oil and oil-related outputs were down from around 85 per cent to slightly less than 50 per cent of all economic activity in Bahrain. New industries emerged or gained importance, such as construction and real estate, private health care and education, transportation, and manufacturing. There was also a shift from the government to the private sector.

Unfortunately, it has also become apparent that this increased diversification has not led to increased productivity, nor has it led to more employment opportunities for Bahrainis, particularly in the construction and hospitality sectors. Other weak areas identified are research, creativity, innovation, and even funding for innovation. Bahrain was recently ranked 67th out of 142 countries worldwide for innovation.

What is meant by innovation? If we define it as the restructuring of old ideas and the creation of new ones, then Bahrain has been guilty of simply

recycling old ideas. Looking towards the region, what immediately catches the eye are the glittering new real estate developments, which are certainly very impressive, and give the impression of modernity but, in Dr. Kotilaine’s opinion, do not actually deliver modernity. There is only so far one can go with new buildings.

That is not to say there is no value in building on old ideas. Dr. Kotilaine points out that some of the most successful brands in the world took a very simple idea and repackaged it in a new fashion, in the way that Starbucks reinvented the humble cup of coffee, and Twitter created a hybrid between text messaging and blogging.

He recognises that such ideas need the right atmosphere to germinate. At the moment financing of new ventures in Bahrain is rather bank-centric, and banks tend to treat risk in a conservative way. They want to make predictable returns within a predictable time frame, hence the heavy favouring of investment in real estate. If different finance options became available, from firms or entities that were willing to hold long-term liabilities and take a long- term view, different types of ventures could emerge.

They would need support from private companies, universities, and medical centres, and ultimately Bahrain to should aim to establish a science and technology park. Dr. Kotilaine believes that several factors that make up a healthy innovative econsystem are already in place, but it is now time to bring them all together in a meaningful way. Innovation is what will make Bahrain’s economy more fluid, more resilient, and ultimately more successful.

Dr. Kotilaine believes that several factors that make up a healthy innovative econsystem are already in place, but it is now time to bring them all together in a meaningful way.

Dr. Jarmo Kotilaine


Living Bahrain

Photography: Shareef Panhatt

Bahrain will gain a boost in living standards with GDP per capita forecast to rise by 12% over next five years (ICAEW).

Bahrain government must step up efforts to diversify the economy away from reliance on hydrocarbon production (ICAEW).

GDP growth in Middle East is above global average and expected to remain steady in the short term but Lower oil prices it could expose fiscal vulnerability (Economic Insight: Middle East).

GCC states have benefited from real GDP growing 24% over the five years to 2013 but rapidly rising populations have made continuous economic growth essential to maintain living standards.

Between 2008 and 2013, the population of Bahrain rose by 19%

As long as investment continues in transportation, education and building downstream industries, Bahrain should escape the worst consequences of a fall in the international oil price.

Bahrain has among the world’s highest gross national savings.

After many years in which daily essentials, such as food and power, have been heavily subsidised by the government, fiscal pressures mean Bahrain will seek to cut the amount it spends supporting household consumption.

An end of sanctions on Iran would reduce the price of oil by $8 a barrel (though this is a central estimate).

The most dramatic improvements to living standards is expected in Qatar where GDP per capita should double between 2014 and 2025.

Between 2000 and 2012, oil and oil-related outputs were down from around 85 per cent to slightly less than 50 per cent of all economic activity in Bahrain.

Bahrain was recently ranked 67th out of 142 countries worldwide for innovation.

Financing of new ventures in Bahrain is “bank-centric”, treating risk in a conservative way - hence heavy favouring of investment in real estate. If different finance options became available, taking a long- term view, different types of ventures could emerge (Dr Jarmo).

Bahrain “should aim to establish a science and technology park” (Dr Jarmo).


GCC Wealth Insight

The GCC Wealth Insight Report is based on a survey of High Net Worth Individuals (HNWIs) across the GCC. For the purposes of this study, HNWIs are defined as individuals with US$2 million or more in investable assets.

THE GULF IS OUTPACING OTHER HIGH GROWTH MARKETS

The GCC Wealth Insight Report has been created to better understand the views of High Net Worth Individuals across the

Gulf on the economy, both global and local, financial challenges and opportunities and decision-making in regards to investments. This report is the inaugural edition and is intended to be repeated annually.

This survey was undertaken between November 2013 and January 2014, a time when the GCC was widely recognised as the standout emerging/frontier market. The Gulf has been outpacing other high growth markets and we see this as

a trend set to continue. Governments and leaders in the GCC have set the ground work for sustained future growth. This is borne out by a number of favourable factors within the countries of the GCC – the United Arab Emirates, Qatar, Kuwait, Saudi Arabia, Oman and Bahrain.

These include stable and improving levels of infrastructure, financial policies, political stability and accessibility as

well as a definitive move towards diversification away from the region’s reliance on wealth derived from the hydro-carbon industry. Healthcare, tourism, education and housing are also areas of growth, building on the bedrock of these encouraging platforms.

Specific stand out moments in 2013 include winning Expo 2020, a monumental milestone in Dubai’s success story and a commendable achievement for the UAE. In addition, the Morgan Stanley Capital International (MSCI) Indices upgraded the UAE and Qatar from “frontier market” to “emerging market” status – an achievement six years in the making, as both countries had been denied entry five times since the first review in 2005.

The UAE and Saudi Arabia have also witnessed an increase in IPO activity along with the introduction of new mortgage laws which helped boost their real estate sector. The region also witnessed discussion on regulation reform in Saudi Arabia regarding the opening up of the equity market to


Wealth Insight GCC

Source: IMF

Real GDP Ave. 2006-2010 2011 2012 2013E 2014F

Bahrain 5.9 2.1 4.8 4.4 3.3

Kuwait 1.3 6.3 6.2 0.8 2.6

Oman 6.9 4.5 5.0 5.1 3.4

Qatar 18.1 13.0 6.2 5.1 5.0

Saudi Arabia 5.9 8.6 5.1 3.6 4.4

UAE 2.6 3.9 4.4 4.0 3.9

GCC 6.0 7.7 5.2 3.7 4.1

Real GDP growth rate (%)

foreign investors, and robust activity in Qatar amidst the preparations for the FIFA World Cup in 2022.

As part of the Global Competitiveness Report for 2013-14, Qatar, the UAE and Saudi Arabia were among the top 20 most competitive economies in the world. This progress signalled a clear endorsement from the investment community and brought about renewed confidence in the Gulf as a whole.

This report validates a number of trends seen in 2013. With more infrastructure spending and higher consumer confidence across the GCC, better GDP is forecasted to grow for the region by 3.7% in 2013 and 4.1% in 2014. However, among the Gulf’s wealthy, there is a healthy balance of caution as well as optimism.

There is a large appetite for wealth accumulation, a distinct move among GCC based High Net Worth Individuals to creating and growing wealth rather than simply preserving it as we have seen elsewhere following the global financial crisis.

Even as economic health improves after the multitude of ailments that resulted from this crisis, High Net Worth Individuals are more optimistic about longer-term prospects for the Gulf region over the global economy.

Most respondents prefer keeping their assets closer to home; identifying and developing investment opportunities within the region is likely to be attractive in the future. The findings also identify a shift in the relative importance of different investment asset classes.

HNWIs expect to increase the proportion of their wealth invested into own business and in real estate.

The GCC Wealth Insight Report is based on a survey of High Net Worth Individuals (HNWIs) across the Gulf Cooperation Council (GCC). The study was initiated and sponsored by Emirates Investment Bank (EIBank), an independent private and investment banking boutique based in the United Arab Emirates. EIBank chose Ipsos and Brunswick Insight to conduct this study on their behalf in order to ensure the accuracy of the findings and independence of the analysis.

The UAE and Saudi Arabia have also witnessed an increase in IPO activity along with the introduction of new mortgage laws which helped boost their real estate sector.

54 GCC Wealth Insight Report 2014 GCC Wealth Insight Report 2014

24% 36%

Country

Profession

Entrepreneur Executive

11%Professional

(Lawyer, Doctor,

Accountant, Professor)

29%Other

13%Kuwait 13%

Qatar

25%SAUDI ARABIA

13%Bahrain

25%UAE 13%

Oman

94% 6%

Gender

Male Female

9% 41%

Source ofWealth

Inherited Self-made

50%Combination

of the two

10% 29%51%25-34 45-5435-44

10%55+

Age

Executive summary The Gulf has been outpacing other high growth marketsT he GCC Wealth Insight Report

has been created to better understand the views of High

Net Worth Individuals across the Gulf on the economy, both global and local, financial challenges and opportunities and decision-making in regards to investments. This report is the inaugural edition and is intended to be repeated annually.

This survey was undertaken between November 2013 and January 2014, a time when the GCC was widely recognised as the standout emerging/frontier market. The Gulf has been outpacing other high growth markets and we see this as a trend set to continue. Governments and leaders in the GCC have set the ground work for sustained future growth. This is borne out by a number of favourable factors within the countries of the GCC – the United Arab Emirates, Qatar, Kuwait, Saudi Arabia, Oman and Bahrain. These include stable and improving levels of infrastructure, financial policies, political stability and accessibility as well as a definitive move towards diversification away from the region’s reliance on wealth derived from the hydro-carbon industry. Healthcare, tourism, education and housing are also areas of growth, building on the bedrock of these encouraging platforms.

Specific stand out moments in 2013 include winning Expo 2020, a monumental milestone in Dubai’s success story and a commendable achievement for the UAE. In addition, the Morgan Stanley Capital International (MSCI) Indices

GCC, better GDP is forecasted to grow for the region by 3.7% in 2013 and 4.1% in 2014. However, among the Gulf’s wealthy, there is a healthy balance of caution as well as optimism.

There is a large appetite for wealth accumulation, a distinct move among GCC based High Net Worth Individuals to creating and growing wealth rather than simply preserving it as we have seen elsewhere following the global financial crisis. Even as economic health improves after the multitude of ailments that resulted from this crisis, High Net Worth Individuals are more optimistic about longer-term prospects for the Gulf region over the global economy. Most respondents prefer keeping their assets closer to home; identifying and developing investment opportunities within the region is likely to be attractive in the future. The findings also identify a shift in the relative importance of different investment asset classes. HNWIs expect to increase the proportion of their wealth invested into own business and in real estate.

Real GDP Avg. 2006-2010 2011 2012 2013E 2014F

Bahrain 5.9 2.1 4.8 4.4 3.3

Kuwait 1.3 6.3 6.2 0.8 2.6

Oman 6.9 4.5 5.0 5.1 3.4

Qatar 18.1 13.0 6.2 5.1 5.0

Saudi Arabia 5.9 8.6 5.1 3.6 4.4

UAE 2.6 3.9 4.4 4.0 3.9

GCC 6.0 7.7 5.2 3.7 4.1

upgraded the UAE and Qatar from “frontier market” to “emerging market” status – an achievement six years in the making, as both countries had been denied entry five times since the first review in 2005. The UAE and Saudi Arabia have also witnessed an increase in IPO activity along with the introduction of new mortgage laws which helped boost their real estate sector. The region also witnessed discussion on regulation reform in Saudi Arabia regarding the opening up of the equity market to foreign investors, and robust activity in Qatar amidst the preparations for the FIFA World Cup in 2022. As part of the Global Competitiveness Report for 2013-14, Qatar, the UAE and Saudi Arabia were among the top 20 most competitive economies in the world. This progress signalled a clear endorsement from the investment community and brought about renewed confidence in the Gulf as a whole.

This report validates a number of trends seen in 2013. With more infrastructure spending and higher consumer confidence across the

Real GDP growth rates (%)

Survey Demographics

Base: all answering (80)Source: IMFSource: GCC Wealth Insight Report


Dubai Most Expensive Cities

Photograph by: Jeffrey Faranial

Dubai’s costs rise 41%, ranking it world’s 7th most expensive city to live and work.

WORLD CITIES RANKING

Hong Kong is the world’s most expensive city for companies to locate employees, significantly ahead of London and New York, which have been vying for

second place over the past two years. Paris completes a list of the top four cities where simply renting living and working space for a single employee costs more than US$100,000 a year, according to latest analysis from international real estate adviser, Savills.

While total live-work costs remained broadly stable across the index over the past year, there were exceptions. They rose by a stratospheric 41 per cent in Dubai, albeit from a relatively low base, to rank the city 7th most expensive,

although the high costs in part reflect a particularly generous office space allocation per worker, a product of the city’s previously high-supply, low rent era. By contrast, costs fell -12 per cent in Mumbai, which ranks as the cheapest location at just US$28,000 per employee per year for all live-work rental costs.

The Savills World Cities Live-Work Index reveals that it now costs an average of just under US$76,000 a year per employee to rent residential and office space in a world city, a 21 per cent increase since 2009, when most city rental markets bottomed out.

In Hong Kong, the cost of living and working space per employee averages US$123,000 a year, 1.6 times more

expensive than Singapore, 3.8 times more than Shanghai and some 4.4 times more expensive than Mumbai.

Yolande Barnes, director of Savills World Research says: “These findings go some way to demonstrating the rebalancing of world economies as more mature ‘old world’ cities demonstrate stable growth in this recovery cycle. ‘New world’ city growth has slowed markedly, albeit this trend has been slightly counterbalanced by the emergence of new world city real estate markets – notably Rio de Janeiro and Dubai.”

The biggest financial sector premium is seen in Moscow, where Russian money is investing once again, pushing up demand for space in the city,” says


Most Expensive Cities Dubai

Source: Savills World Research

Rank CityLive-work cost per employee

per year

Live-work 5 year cost

change

Live-work cost change 2013

1 Hong Kong $123,000 21% -1%

2 London $115,000 18% 2%

3 New York $112,000 37% 2%

4 Paris $107,000 7% 2%

5 Singapore $76,000 11% 0%

6 Tokyo $74,000 -9% 1%

7 Dubai $72,000 35% 41%

8 Moscow $70,000 37% 4%

9 Sydney $60,000 6% 2%

10 Shanghai $44,000 18% 0%

11 Rio de Janeiro $30,000 54% 2%

12 Mumbai $28,000 -5% -12%

Dubai is clearly flexing its muscle as the real business and investment hub of the Middle East.

Savills world cities ‘live-work’ index – city rankings

Savills live-work index – the financial district premium persists

CityFinancial sector

averageCreative sector

averageCreative space

discount

Moscow $84,000 $57,000 47%

Hong Kong $144,000 $101,000 43%

London $133,000 $98,000 36%

Dubai $82,000 $61,000 34%

Shanghai $50,000 $38,000 31%

Tokyo $82,000 $65,000 26%

New York $120,000 $104,000 16%

Mumbai $30,000 $26,000 16%

Singapore $81,000 $71,000 15%

Rio de Janeiro $31,000 $29,000 5%

Paris $107,000 $107,000 0%

Sydney $60,000 $60,000 -0%

Barnes. “Similar forces also seem to be at play in Dubai, which has seen the impact of Middle Eastern cash in a market that has shown significant growth, prompting talk of cooling measures.

The publication of this index marks two new entrants to the Savills world city ranks – Dubai and Rio de Janeiro. “A ‘world class city’ status has as much to do with profile and prominence on

the world stage as it has to do with economics or size,” says Barnes. “Rio earns its place in our index as a result of its changing status as upcoming Olympic host, albeit it enters at a low value base, while Dubai is clearly flexing its muscle as the real business and investment hub of the Middle East. Price rises in the city are a clear reflection of asset price inflation over the recent past.”


GCC Companies

Even after a strong rally in the last year, GCC companies are offering up to 7% dividend yields.

MARKET OUTLOOK - GCC COMPANIES

Companies in the Arabian Gulf are offering attractive dividend yields, even after a strong share price rally across the region in the last year, with many well managed

companies seeing strong free cash flows after a period of balance sheet improvement.

Companies in the S&P GCC large- and medium-cap index are offering an average dividend yield of around 3.5 percent, but some major companies in the region are offering 6-7 percent. In Oman dividends are reaching double digits.

Many companies in the GCC countries currently have excess capital, even though they are in expansion mode, and are looking to distribute cash, partly to help increase their future return on equity. Moreover, a number of Sharia-compliant companies in the GCC have a very low debt in their balance and can utilise large parts of their free cash flows of dividends to their shareholders.

Dividends have traditionally been important in the region because of the high retail investor participation in local stock markets, and many individuals position themselves in stocks in the run-up to dividend announcements.

But global institutional investors are also showing interest. At a time when recent turmoil in emerging markets is testing nerves, dividends offer some protection of returns -- and add another dimension to the GCC’s positive story of current account surpluses, macro-economic strength, stable governance and healthy corporate growth.

Major banks in the region continue to increase their dividend payments, having brought non-performing loans under control, stabilised their net interest margins, improved their cost-to-income margins and increased the pace of loan growth.

In Abu Dhabi, First Gulf Bank has increased its dividend by nearly 60 percent over the last five years, and is currently offering a yield of 4.45 percent. This compares to 6 percent a year ago, before a rally that saw Abu Dhabi stocks rise by over 60 percent in 2013.

In Saudi Arabia, petrochemical companies provide very obvious dividend plays. Saudi Basic Industries (SABIC), one of the world’s biggest petrochemical producers, tends to expand through international joint ventures or the creation of new local companies, its subsidiaries require relatively small capital expenditure as they reach maturity.

SABIC subsidiaries Yanbu National Petrochemical Co (Yansab) and Saudi Arabian Fertilizer Co (Safco) are therefore likely to be major dividend payers in coming years. Safco quotes a divident yield of approximately 7 percent, and Yansab paid its first dividend yield recently and the current yield is around 3 percent.

Probably the most mainstream dividend play in the region is Kuwait telecoms company Zain, which rewarded shareholders with a 7 percent yield this year. But the highest dividends are coming from relatively obscure companies. For example, family-run


Companies GCC

Saudi firm Abdullatif Investments, which is benefitting from a house construction boom in the country, offers a 7 percent yield

The Oman market offers the highest dividends. It is currently the most attractively valued market in the region, trading at an average of 9.5 times earnings, compared to 11.5 times for Qatar and 14 times for the UAE – but this partly reflects the lower liquidity in the market.

Omantel, a telecoms operator in Oman, is paying an 8 percent dividend this year, while the operator of the old port in the Omani capital Muscat, Port Services Corp., offered an 11 percent yield.

Equities - Positive sentiment in GCC markets has been driven by fourth-quarter results, with a number of companies announcing healthy dividends. Recent volatility in emerging markets, particularly countries with current account deficits, has triggered additional interest in GCC markets, due to the strong fiscal and current account surpluses and pegged currencies. GCC governments continue to focus on investment-related spending, with economists estimating that the budget-breakeven level for oil prices will increase in the coming fiscal year across the region. In the UAE, the Abu Dhabi Executive Council announced a further increase of approximately US$ 100 billion in investment spending, with a special focus on transportation, education and healthcare. Qatar has also indicated an increase in project-related activity. In the coming weeks, dividend announcements are likely to be closely tracked by local investors and could determine the short-term direction of markets. Investors will also be looking at the monetary policy stance of the US Federal Reserve, and specifically whether its plans to taper its monthly bond purchases gains momentum. In the medium term, investors will be looking for an acceleration of project implementation across the region, and announcements of new awards for contractors, as well as global pricing recovery in the petrochemicals sector.

The information in this article is from the monthly markets outlook from asset manager Invest AD (www.investad.com).


Business Oil & Gas

Dr Dawood Nassif, Bapco Strategy and Business Development General Manager, on why Bahrain must not only compete with its neighbours but also with all the international players in Europe and Asia.

THE OIL INDUSTRY IN TRANSITION

The American Chamber of Commerce - AmCham Bahrain latest monthly business meeting focused on the future of the oil and natural gas industry. Guest

speaker Dr Dawood Nassif, Bapco strategy and business development general manager, gave a presentation titled, ‘The Oil Industry in Transition.’

When discussing global supply and demand, he foresees that China and India will be the main drivers of demand, while the Middle East will continue to be the main source of supply. Recent innovations in the oil production technologies positioned the US as another major player on the supply side.

As cars become more fuel-efficient and consumers demand cleaner fuels, combined with cheaper crude and gas in the US, European refiners are in serious trouble. Other major refining centers such as the US, Middle East and Russia are supplying Europe in increasing quantities.

Meanwhile, the availability of more gas in the US and the capability of shipping liquefied natural gas (LNG) in bigger ships from many suppliers to many receiving terminals, is turning this into a more open, balanced market. The most interesting revelation was that the US is on its way to becoming self sufficient in oil by 2020, and could even become a net exporter of LNG.

Another key player to look out for is Iraq, which enjoys the lowest cost of production in the world, and could very well become the world’s largest oil exporter if it manages to control its political instability. Its small shoreline also place limits on its ability to export, which can only be overcome by developing good relations with its neighbours and laying pipelines across their territory.

Of course, the production of oil goes hand in hand with oil refining. Across Europe and North America, oil refineries are falling out of fashion. People don’t want to live near them, carbon taxes

are being imposed, and many refineries are running on negative profit margins. Major players like ExxonMobil, Chevron, SHELL, BP, and Total, are selling off their refineries or downsizing them to form only a small portion of their overall businesses. Dr. Nassif does not expect Majors to invest in refining any more.

The slack will be picked up by Asian and Middle Eastern refineries that, due to their sheer size, have the ability to compete and the capital to invest. He cites the example of Indian-owned Reliance Industries, which processes 1.2 million barrels per day.

Where does this leave the Middle East? Entry costs for refineries in the region are lower, they receive tax breaks, And more significantly, the Middle East has its own supply of crude oil. The Hydrocarbon Industry investment in the region has reached around 80 billion dollars. All these factors will help the region retain its competitive advantage, but this is not enough. Dr. Nassif


Oil & Gas Business

image: SAP

The production of oil goes hand in hand with oil refining. Across Europe and North America, oil refineries are falling out of fashion.

believes it is important for the industry to integrate the refining and petrochemical bussinesses, thereby creating synergies with petrochemical industries and adding more value to refineries. They must also shift towards more profitable products.

He reveals that the Bapco refineris currently undergoing a major expansion project. Bahrain has also formed a Joint Venture to increase its crude oil output from 35,000 to 65,000 barrels per day. With the potential development of heavy oil fields he states that this figure could go up to 100,000 barrels per day. Bahrain is also diversifying by building a new LNG terminal, a move he regards as being a sound investment for the future. There are interesting times ahead, he says. Bahrain must not only compete with its neighbours, but also with all the international players in Europe and Asia. As long as it maintains its edge and can offer competitive production and shipping costs, oil refining will remain a viable economic activity for Bahrain.


Advertorial

BAHRAIN’S BIGGEST IT EXPO RETURNS FOR ITS 7th YEAR

The Bahrain IT Expo is coming up this month to once again offer local and international companies an opportunity to attract both the private and public sectors with

featured state-of-the-art products and services.

The 7th edition of the Bahrain IT Expo is being organized by the eGovernment Authority (eGA) under the patronage and support of His Highness Shaikh Mohammed bin Mubarak Al Khalifa, Deputy Prime Minister and Chairman of the Supreme Committee for Information and Communication Technology (SCICT). This year, the expo is being held from 22nd & 23rd April 2014 at the Bahrain International Circuit, Paddock Hall; alongside a series of workshops that will take place in the Oasis Lounge. The event is in collaboration with the Bahrain Internet Society (BIS), Bahrain Society of Engineers (BSE) and Project Management Institute-Arabian Gulf Chapter (PMI-AGC) as co-organizers.

This unique platform serves as a

virtual teacher with numerous carefully-selected professional trainers and eight parallel training workshops. The participants and attendees can expand their ICT knowledge and skills in at least eight different workshops ranging from eGovernment Success Stories and Global Trends, eContent Management,

Social Media Toolkit, Innovation and Entrepreneurship in ICT Environment Forum, Enterprise IT Governance for Control and Value Creation, Mobility, Agile Business Analysis & Improvements,

as well as Leadership in Information Technology. Globally renowned speakers will educate local and international visitors with hot, highly on-demand ICT products and services. Hi-tech premium programs will also be showcased by international and local companies. A wide spectrum of 26 different exhibitors

will display their products and help transform the networking cloud and socio-economic growth of the country. More than a 1000 visitors from the government, public and private sectors are expected to attend this digital exposition.

The Bahrain International eGovernment Forum 2014 is another keynote event that will coincide with the exhibition; taking place at the Ritz-Carlton, Bahrain Hotel & Spa on April 21. The forum will bring together over 40 speakers.

For further details regarding exhibitor’s space rates or sponsorship benefits, please contact the organizers on 17810733 or 8000 8001; visit www.itexpo.bh, or #itexpo.

Globally renowned speakers will educate local and international visitors with hot, highly on-demand ICT products and services.


Conference Saudi Arabia

Senior banking leaders and representatives of major financial institutions are set to participate in the 9th Euromoney Saudi Arabia Conference, which

will take place in Riyadh on 6 and 7 May 2014.

A major session on capital markets will look at the development of Saudi Arabia’s stock exchange, and examine the careful steps being taken to allow greater foreign direct investment and enhance the regulatory framework.

The Saudi bourse, the Tadawul, has a market capitalisation of US$417 billion, and sees around US$1.3 billion traded every day, making it the region’s most liquid market by a significant margin. However, the authorities recognise the need to open the market beyond the current base of retail investors in the Kingdom. International banks including HSBC Holdings have suggested that Saudi Arabia’s market may open to foreigners as early as this year.

Adel Al-Ghamdi, Chief Executive Officer of Tadawul; Salah Garawi, Head of Corporate Finance at Saudi Aramco; Yasser Al-Sharif, Chief Executive Officer

of Manafea Holding Company; and Nina Lagron, Senior Fund Manager at Amundi Asset Management will take part in a keynote discussion to examine the changes affecting the Tadawul and the road ahead for the Arab World’s largest stock market.

Infrastructure investment is another area of the Saudi economy seeing significant development. Due to the rising population and on-going economic growth, the Kingdom is looking to raise significant funds to support transport, water, power and housing projects, looking to a mix of public and private investment.

The panel on infrastructure will include representatives from NCB, the Bechtel Group, ACWA Power and Saudi Kuwait Finance House, bringing a range of perspectives to the debate.

Euromoney Conferences’ Regional Director, Richard Banks, said: “Each of our panels will feature national and international financial leaders who are playing an active role in shaping the future of the Saudi Arabian economy.”

Representing the government at the event will be H.E. Dr Ibrahim Al-Assaf,

Minister of Finance; H.E. Dr Muhammad Al-Jasser, Minister of Economy and Planning; H.E. Dr Shwaish Al-Dowaihy, Minister of Housing; H.E. Mr Adel Fakeih, Minister of Labour; and H.E. Mr Majid Al-Moneef, Secretary General of Saudi Supreme Economic Council.

Major global institutions represented at the event will include HSBC, BNP Paribas, and The World Bank.

The conference will take place at the Al Faisaliah Hotel in Riyadh and is expected to attract around 1,200 delegates from all over the region and the world.

For more information, visit www.euromoneyconference.com

Panels to Examine Capital Markets in the KSA; New Sources for Infrastructure Investment and Solutions to Saudi Arabia’s Housing Challenges.

BANKERS AND FINANCIAL INSTITUTIONS SET FOR SAUDI CONFERENCE

Infrastructure investment is another area of the Saudi economy seeing significant development.


Bahrain US Ambassador

US AMBASSADOR TO BAHRAIN PUBLICLY CRITICISED BY US STATE DEPARTMENT

The US Ambassador to the Kingdom of Bahrain, Thomas C. Krajeski, has come under close scrutiny by the US State Department in recent

months, resulting in a highly critical report released on March 27th 2014. The report’s findings conclude that Ambassador Krajeski’s “belief that reactive ‘seat of the pants’ leadership works best in Bahrain’s challenging environment has left staff members who do not have access to him on a regular basis confused about mission goals”. So as to understand this dilemma, it is first necessary to clarify the meaning of ‘seat of the pants leadership’. According to various dictionary resources, the term refers to managing a situation based upon your experience and knowledge, trusting your own instinct and judgement. No diplomat reaches the position of Ambassador without many years of experience in many different countries; it is undoubtedly a pre-requisite of the post. Ambassador Krajeski, in an informal response published in Bahrain’s national newspaper, The Gulf Daily News, two days after the release of the report, defended his record of 35 years of service to the US Diplomatic Corps. Why then, with such longevity in his field, should a sitting diplomatic official come under such unusually harsh criticism for governing in this manner?

Impressive CredentialsAccording to the US State

Department’s website, Ambassador Krajeski has served in Nepal, India, Poland, Egypt, the United Arab Emirates, Iraq and Yemen before coming to Bahrain, all since he joined the Foreign Office in 1979. He was the Senior Vice President of the National Defence University from

2009-2011, and whilst in Iraq served as a political advisor on Ambassador L. Paul Bremer’s staff at The Coalition Provisional Authority in Baghdad. He also holds five Superior Honour Awards, and received the President’s Distinguished Service Award in 2007 for his service in Iraq and Yemen. These are clearly impressive credentials, as should be expected of those who represent their countries at the highest diplomatic level. The experience gained by being based in such countries during difficult times, working within areas actively engaged

in armed conflict or suffering from civil unrest, cannot be anything but beneficial to an Ambassador in a host country which is in the process of recovering from prolonged political tension – if used correctly. Therein may lie the problem.

Past CriticismThe strong relationship between

Bahrain and the US, both from an economic and security perspective, has been tested in recent years. Since

Ambassador Krajeski was sworn in on October 26th 2011, he has been responsible for the representation of the US in Bahrain. On June 14th 2013, the World Tribune reported that a petition had been organised calling for the expulsion of Ambassador Krajeski for interfering in Bahrain’s political affairs. The Washington Times reported on March 27th 2014 that foreign relations analysts believe that Ambassador Krajeski’s term in Iraq “did little to help rebuild Iraq or curb the problems that faced US troops”. It also stated that “after a series of unpopular public interviews when he first assumed the post in 2011, the Ambassador has largely withdrawn from connecting with Bahraini citizens, leaving a feeling of ill will toward him from the general populace.”

Suitable Leadership in BahrainThis brings us back to the original

issue – the effective, or ineffective, leadership of the US Embassy in Bahrain. The inspector general’s report calls for good leadership at this critical point in Bahrain’s history, but surmised that Ambassador Krajeski failed on many accounts. Positive engagement, both with the Bahraini public and his own embassy staff, was found to be sorely lacking. Although an Ambassador is not a direct line manager for the staff of an embassy, the investigators claim that he is removed from his staff, disorganised in his daily affairs, and provides little direction. It is essential that Ambassador Krajeski’s formal response to the inspector general’s report be considered to form a comprehensive opinion of this issue, but as he is already nearing the end of his term in Bahrain, this will undoubtedly sour his last moments in the Kingdom.

The term refers to managing a situation based upon your experience and knowledge, trusting your own instinct and judgement.

Thomas C. Krajeski


Feature Company Restructuring

Companies need to transform themselves today to succeed tomorrow.

COMPANY RESTRUCTURING IN THE GCC PARAMOUNT FOR STAYING COMPETITIVE

Average net margins of GCC companies have decreased from 31% in the boom years a decade ago to about 17% in recent years, with industries such as

construction, real estate and banking hardest hit, a new study by Roland Berger Strategy Consultants Middle East reveals. The global financial crisis contributed strongly to this development through slower GDP growth as well as high but stagnant oil prices. In addition, efforts by GCC countries to improve their global competitiveness, e.g. through deregulation and better market accessibility, have encouraged foreign companies to enter the market. “We expect pressure on profitability to remain high. Comparably high growth rates and the GCC’s solid business environment will continue to attract market entries from international competitors,” says Dr. Tobias Plate, Senior Partner at Roland Berger. “Therefore, local and regional players need to assess how they can best leverage this growth potential despite increasing competition in order to ensure a successful future.”

For GCC companies, transformation is the key to unlocking improvement potential and ensuring long-term success

According to the study, successful transformation needs to be based on a holistic concept – enabling a company to do the right things and to do things right.

Transformation starts with reviewing and adjusting a company’s current strategic direction, including aligning the product and service portfolio and regional footprint as well as redesigning the value chain. Additionally, the company’s organization has to be adapted to best support the target business model. This needs to involve broad-based cost savings and liquidity-generating actions, such as procurement optimization, labor cost management and working capital management. “Corporate transformation can help GCC companies leverage their profitability and liquidity generation potential. Based on a high-level outside-in analysis of the working capital of 250 of the Gulf’s largest corporations, we estimate cumulative cash generation potential to be up to USD 11 billion,” says Dr. Fabian Engels, Principal at Roland Berger and co-author of the study.

Successful implementation requires support and tight monitoring

“We have seen excellent transformation concepts fail due to a lack of proper implementation management,” warns Dr. Plate, adding that “critical success factors for implementation are backing from shareholders and senior management, swift execution, intense project monitoring and clear communication on the transformation’s goals and progress.” Dr. Engels continues: “Especially in these turbulent times, transformation is not a one-time task anymore, but rather a continuous exercise for companies in ever-changing environments.”

To download the “GCC Corporate Transformation” study free of charge visit: www.rolandberger.com/pressreleases

GCC corporate profitability in most sectors is substantially lower today than ten years ago – Margin pressure is expected to remain high due to increasing foreign competition

Corporate transformation is the way to achieve long-term business sustainability – A holistic approach covering strategic, operational and financial initiatives is key to sustaining margins and maximizing cash generation

Cumulative cash generation potential for the GCC’s 250 largest companies across all industries is estimated to be as much as USD 11 billion

Transformation efforts should be backed by senior management and shareholders and be monitored effectively to unlock the full potential


Advertorial

New A330 product features fully-flat bed seats throughout Falcon Gold Class, revamped seats in Economy Class and state-of-the-art in-flight-entertainment system.

GULF AIR’S NEWLY RETROFITTED AIRBUS A330 FLEET

In the last three years Gulf Air, the national carrier of the Kingdom of Bahrain, has embarked on an aggressive and proactive re-fleeting and product enhancement strategy.

Today its fleet is one of the youngest in the region with an average age of 5.2 years while the airline’s Falcon Gold product is undergoing a complete overhaul both in the air and on the ground. The new business offering, including the airline’s new and renovated lounges, were designed for the first time ever incorporating the comments of passengers during the development stage to ensure the end products met their requirements.

A critical element of the airline’s new business offering is its newly retrofitted A330 aircraft which feature a total of 214 seats in a two-class configuration of 30 Falcon Gold Class and 184 Economy seats. Designed specifically for Gulf Air and integrating features based on passenger feedback, the airline’s new Falcon Gold seat converts into a fully-flat bed measuring 1.90 meters in length guaranteeing a comfortable night’s sleep. The Falcon Gold seats offer more personal space between seats than the airline’s previous business class product, allowing passengers to sit back and relax in a 22-inch wide armchair that converts easily into the passenger’s desired position. Additionally an in-seat massage facility offers passengers the perfect way to relax on a long flight.

Armrests are fully adjustable to different heights making sleeping, dining or working more comfortable. There is significant storage space such as a shoe packing pocket and a side compartment specifically designed for laptops.

For optimum onboard entertainment, the Falcon Gold seats come with complete Audio-Video on Demand (AVOD) features, an individual 15-inch touch screen in every seat and high quality noise-cancelling headphones. A suite of movies, video and audio titles in several languages are available, in addition to games. A USB port is available in every seat to allow passengers to easily charge electronic devices during their flight.

Beyond the airline’s premium product, Gulf Air’s A330 Economy Class seats have also been upgraded to offer passengers the very latest in comfort and technology. Featuring a 4-inch recline, an 18-inch seat-width and an adjustable head and foot rest allowing greater passenger comfort, the seats are fitted with 9-inch seat back TV monitors that are ideal for enjoying the airline’s extensive in-flight entertainment options.

Gulf Air’s planned A330 retrofit is scheduled to be completed in the last quarter of 2014 and the highly anticipated transformation of the national carrier’s long-haul product demonstrates the airline’s ongoing commitment to offer superior products and services to passengers while underlining Gulf Air’s longstanding commitment to its international operations.

Gulf Air’s A330 retrofit will be supported by three key partners; Avianor, Zodiac Aerospace and BE. Avianor has been appointed to act as “turn-key provider” managing the program with responsibility for the Engineering, Certification and Installation of this extensive upgrade. Zodiac Aerospace is supplying the Economy Class seats and the seat centric IFE system while BE Aerospace are supplying the Falcon Gold Class seats.


Bahrain Revolution

What are the political alternatives currently facing Bahrainis? If you believe the international media coverage, the choice is between democracy or dictatorship. If the choices were so stark, then we know what 99% of people would opt for. However, it’s not surprising to find that matters aren’t so simple.

SO WHAT IS THE BEST OPTION FOR BAHRAIN?

If we look at the opposition movement, it’s not so clear that straightforward democracy along European lines is quite what they’re after. Certainly a year ago, there

were many liberal and progressive young people at Pearl Roundabout calling for democracy, but certain things changed which made many such educated liberals leave the protest movement in droves.

In particular, the key figures within the protest movement were not obvious democrats. In fact the most prominent figures were Shia clerics

closely associated with the Islamic Republic of Iran’s Wilayat Al Faqih model. While such figures talked a lot about injustice, obtaining their rights and fighting oppression, there was little to indicate that this meant democracy along progressive secular lines. In fact, their rhetoric became increasingly sectarian, sparking a backlash amongst Sunni religious circles and polarizing Bahrain’s society.

Those who have spent time in Bahrain know it to be a tolerant, open and liberal society, very different from many near neighbours. Not surprisingly

most young people did not share those opposition leaders’ aspiration for an Islamic theocracy along Iranian lines.

Even worse, the opposition movement quickly began to adopt violent tactics; ambushes against the police; teaching youngsters to prepare Molotov Cocktails; attacks on citizens of other sects; and a transition towards terrorist tactics to achieve their goals.

When we look at Bahrain’s leadership, does it deserve the opposition’s calls of “Death to Al Khalifa”? The opposition’s main charge against the Government has been its alleged ‘violent repression’


Revolution Bahrain

of the protest movement. The Bahrain Independent Commission of Inquiry (BICI) indeed found the Bahraini Authorities at fault in many respects, but concluded that there was no evidence for some of the more serious allegations like systematic use of torture or a shoot to kill policy.

Most importantly, the Authorities have accepted the recommendations of the BICI in full and much of this has been implemented, with the very clear result that recent demonstrations have been successfully contained without recourse to the use of significant force. There are a number of legal and institutional changes which have also been introduced to improve the Bahraini State’s human rights and rule of law record.

This is not to say that more could not be done. The Bahraini Government has still got a long way to go to convince all segments of society of its desire and ability to introduce far-reaching reforms and there is little to show from a year of attempts at dialogue; although this is largely due to one of the key opposition groups Al-Wefaq walking out and making excessive demands in return for its return to the table.

In Tunisia, Egypt, Syria, Yemen and Libya meaningful reform was never a serious prospect. But even here the democratic and progressive slogans of the protest movements haven’t easily translated into a workable political model in countries lacking open institutions, systems of accountability or a new generation of potential leaders with the necessary skills and experience. In each case the better organized Islamists have consistently seized the initiative in filling the political vacuum; the Salafists and Muslim Brotherhood in Egypt, Al-Nahdah in Tunisia, remnants of the Islamic Fighting Group in Libya and even Al-Qaidah in Yemen.

Far better that we model ourselves on regional states like Morocco, Oman, UAE and Turkey which have managed the tumultuous pressures of the last year most successfully through intensifying reform, strengthening social welfare systems and allowing greater freedom of expression.

In Bahrain, the pro-Iranian Islamists have been in the driving seat of the protest

movement from the outset, making it all the more certain that they would be the ones seizing power if the demonstrators ever gained the ascendancy. Indeed, Iran’s highly conspicuous interference is precisely designed to achieve this aim. Iranian propaganda channels like Al-Alam TV have been pumping out sectarian hated with the aim of inflaming the situation here.

Furthermore, the opposition’s extravagant promises of jobs, opportunities and a better future simply don’t hold up. In fact their tactics have torpedoed the economy, scared away investors and significantly worsened the job situation for the foreseeable future. Another reason why so many Bahrainis are simply fed up with what has happened to their country.

Given these circumstances, it may not surprise an impartial onlooker that the opposition’s main achievement has been to significantly increase the feeling of loyalty and attachment of most Bahrainis to their royal family and their existing governing system.

For the outside world which has become accustomed to a “people vs. the regime” narrative across the Arab world, this conclusion may sound rather surprising, but most Bahrainis are content with their constitutional monarchy and trust the King’s reformist-leanings.

Bahrainis don’t want revolution; nor do they want others telling them what is best for them. Bahrain has gone through a very difficult year. Reform in Bahrain needs international support, not pressure and boycotts.

This article is by Citizens for Bahrain. For more information visit www.citizensforbahrain.com

Most Bahrainis are content with their constitutional monarchy and trust the King’s reformist-leanings.


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Middle East Oil and Gas

UAE, Oman and Iraq lead Middle East oil and gas transactions according to report.

MIDDLE EAST OIL AND GAS TRANSACTIONS

According to EY’s Global Oil & Gas Transactions report, the combined number of oil and gas transactions in the UAE, Oman and Iraq represented almost

60% of the total number of upstream transactions in the Middle East.

Overall, the actual number of transactions in the region fell 40% from 44 in 2012 to 26 in 2013, whereas the overall transaction value increased from $2.7 billion in 2012 to $3.1 billion in 2013.

Dr. Thorsten Ploss, MENA Oil & Gas Leader, EY, said: “Rapid-growth markets have been, in recent years, the engine room of the world’s economic growth. This provided oil and gas companies with brighter prospects, attracting them to invest in regions such as the Middle East to supply such growth.”

Upstream vs. downstreamRelative to overall oil and gas

transaction activity, the upstream sector dominated both in terms of number and overall transaction value in 2013. Relative to the total global upstream transaction value, the Middle East upstream transaction value has witnessed an

upward trend increasing from 0.8% in 2011 to 1.5% in 2012 and 1.8% in 2013.

In the downstream sector there were five transactions of which two were in the petrochemicals sector. This is a similar level of activity that we have seen in previous years. Within the Middle East refinery sector, there are a number of potential greenfield and brownfield (upgrading and expansion) projects that could drive some transaction activity going forward.

David Baker, MENA Oil & Gas Transaction Advisory Services Leader, said: “There has been a recent announcement that Occidental Petroleum is looking to sell a minority stake in their Middle East oil and gas business. If this sale is to proceed, then it would represent a substantial transaction in the context of the Middle East market.”

Limited activity for oilfield services and midstream transactions

Oilfield services transactions remain low in the region with only five transactions completed in 2013 with

three of these being located in the UAE. However, this is an increase from the number of transactions completed in 2011 and 2012, which were two and three, respectively. One significant potential transaction in the region is that NPS Energy has recently put themselves back up for sale after a prior sales process fell through.

“The level of transactions in the oilfield service sector remains modest, even though there continues to be a desire by governments and NOCs to attract oilfield services companies into the region. This will become increasingly important, if the developments of unconventional resources in countries such as Saudi Arabia are to proceed,” said David.

As is consistent with the past two years, no midstream transactions were completed in 2013. This is a result of the very high level of state ownership and therefore little, if any, availability in the market.


Energy Forum Bahrain

… dissects $14bn worth of projects in the Kingdom.

BAHRAIN ENERGY FORUM 2014

With US $14bn worth of oil, gas power and water projects planned or under execution, Bahrain is re-asserting itself as a regional powerhouse in

the oil & gas as well as power & water sectors.

Details of the massive projects opportunities will be comprehensively discussed at the forthcoming Bahrain Energy Forum 2014 organised by MEED, in partnership with Bahrain’s National Oil and Gas Authority (NOGA), the supreme government agency responsible for the Kingdom’s hydrocarbons industry.

Under the patronage of HE Shaikh Ahmed bin Mohammed Al Khalifa, Minister of Finance and Minister in charge of Oil and Gas Affairs who will be delivering the opening keynote, Bahrain Energy Forum is scheduled on April 22-

Details of the massive projects opportunities will be comprehensively discussed at the forthcoming Bahrain Energy Forum 2014.

23, 2014 at the Crown Plaza Manama, Bahrain. The staging of the forum coincides with the 80th anniversary of Bahrain’s export of crude oil, and celebrates the achievements made the Kingdom’s hydrocarbons, power and water sectors.

The scope of the forum will cover Bahrain’s energy industry plans and projects up to 2030, encompassing the oil and gas, electricity and water production and heavy industries.

Confirmed speakers include Shaikh Mohamed Bin Khalifa Al Khalifa, Chief Executive, NOGA Holding (investment arm of National Oil & Gas Authority) who will be sharing the company’s vision and future investment strategies; Mr Adel Khalil Al-Moayyed, Chairman, Bahrain Petroleum Company (BAPCO) who will be addressing the opportunities associated with the Sitra Refinery worth $4.5bn.

Also speaking at the conference are Dr Edward Hanley, Chief Executive Officer, Tatweer Petroleum, who will be giving a snapshot of the opportunities associated with Bahrain’s oil and gas field developments projects including Awali Field redevelopment; and Fadhel Al Ansari, General Manager, Manufacturing, Gulf Petrochemical Industries CO. (GPIC) who will present on the Sitra ammonia/urea plant expansion plans valued at $1.5bn.

There will also be a dedicated session discussing the energy demand and supply forecast in Bahrain and its implications on industrial development in the Kingdom’s economic diversification; as well as a comprehensive report to be presented by MEED insight on the energy megaproject delivery challenge throughout the GCC.

For the latest updates on the forum’s agenda, visit www.bahrainenergyconference.com


Feature Yasser Hawari

Veteran journalist and celebrated publisher, Yasser Hawari passed away on Saturday, March 22. He was 85.

YASSER HAWARI1929 TO 2014


Yasser Hawari Feature

Known as “the father of Pan-Arab journalism”, Yasser Hawari boasted a career in media spanning more than 50 years.

In 1951 he started his college studies at the Lebanese University’s faculty of Political Sciences, after a brief stint at Law school, then enrolling at the prestigious London School of Journalism after he graduated.

In 1955, Yasser Hawari caught the eye of Dar El Sayyad’s publisher Said Freiha who, quick to see his talent, appointed him editor-in-chief of weekly magazine Al Shabaka.

However, it was with the launch in Beirut in 1959 of Al Ousbouh Al Arabi that Yasser Hawari’s full potential flourished. This weekly magazine, which he headed until 1972, pioneered modern journalism thanks to an innovative editorial philosophy; designed around Yasser’s natural flair for in-depth, investigative reports and use of bold images. Within its first year, Al Ousbouh Al Arabi went beyond the Lebanese market to be distributed across the Arab world. For the first time in the region, the Egyptian press didn’t reign supreme.

Based in Lebanon and aware that, in the early ‘70s, the only way for the country to avoid the upcoming crisis was dialogue and understanding, Yasser Hawari created another weekly magazine in 1973, Al Diyar. Its unique formula was based on consensus and civil society, involving more than 30 partners from all of Lebanon’s various regions, communities and sects, including lawyers, doctors, businessmen and college teachers – Yasser Hawari himself was teaching journalism at the Lebanese university between 1971 and 1976. However, only 18 months after its launch, the whole project had to be aborted following an assassination attempt. On December 13, 1974, more than 20kg of explosives, hidden in a flower vase, devastated both the magazine’s offices and the company. Hawari, who miraculously emerged unharmed, was not deterred. Threats to both himself and his family continued. Four months later Lebanon’s civil war started and was to last for 15 years.

In 1976 Yasser Hawari left Lebanon for France with a heavy heart, along with his wife and four children. A symbolic

coincidence, perhaps, the Middle East Airlines flight that left Beirut that day turned out to be the last one before the airport was shut down.

For a while, Yasser made several attempts to continue his work within the Arab press and managed a life between Europe and the Gulf; in 1979, he edited weekly magazine Al Hawadess, until its founder and publisher, Salim al Lowzi, was assassinated less than one year later. Hawari was involved in Kuwaiti weekly Al Hadaf, Saudi weekly Al Sadah

and Saudi daily Al Watan. In 1980, he contributed, with his friend Hasher al Maktoom, to the establishment of Al Bayan, a new publishing group in Dubai and its daily paper; he also took part in the launch of sports weekly Al Riyadah Wal Chabab.

However, it was in France – and in French – that Yasser Hawari found his next opportunity. In January 1987 he launched Arabies. Focusing on the Gulf, Northern Africa, the Levant and France.

Trends, a monthly magazine focusing on Arab affairs, was launched in 1998 to reach out to English-speaking readers, the same way that Arabies did to French-speaking ones.

In 1997 Yasser Hawari founded Mediaquest. This new publishing house was to cater not only to print but also television. In 2003 Mediaquest became the official representative for the Middle East of the highly successful French TV show Capital, which became, in Arabic, Saneou El Hadath. This has since developed into an eponymous monthly magazine.

Today, a leading regional player in print, digital and events, Mediaquest’s portfolio boasts titles, including Trends, Saneou al Hadath, Arabies, Communicate, Gulf Marketing Review, Haya, Marie Claire Arabia, AMEinfo, Kippreport, dotmena, MEmob and more.

Along with his publishing accolades, every Saturday morning, in a café near the Trocadero, he would set up informal debates between French and Arab journalists. Quickly, these casual discussions turned into a forum that took an official dimension when, in 1999, Yasser founded the Arab Press Club. The launch event gathered more than 120 journalists in the presence of the French Foreign Affairs Minister, Hubert Védrine. The club offered journalists from all horizons a place to meet, talk and exchange ideas and perceptions about the Middle East; it was also a place to liaise with officials and associations, set up important events and interviews and more. Today, the club is a pillar of France’s Foreign Press Club.

Yasser Hawari is survived by his wife Leila, sons Julien and Alexandre, and daughters Lynn and Johanna.

In 1997 Yasser Hawari founded Mediaquest. This new publishing house was to cater not only to print but also television. In 2003 Mediaquest became the official representative for the Middle East of the highly successful French TV show Capital.

Known as “the father of Pan-Arab journalism”, Yasser Hawari boasted a career in media spanning more than 50 years.


Feature MENA

MENA companies benefit from low tax rates, investment incentives and extensive tax treaty arrangements.

MENA TAX RATES

According to tax practitioners and specialists participating in the EY MENA Tax Conference 2014 held in Dubai, tax authorities across MENA are implementing

investment and taxpayer-friendly tax measures to promote a competitive, business-friendly tax environment to encourage tax compliance. At present, MENA companies benefit from low tax rates, investment incentives and extensive tax treaty arrangements, but are also expected to ensure full and correct tax compliance with the tax laws and regulations.

The conference focused on the current tax environment in MENA with presentations by experienced tax professionals from EY. The conference addressed evolving fiscal and tax policies and considered the key challenges faced by taxpayers in various MENA countries.

Sherif El-Kilany, EY MENA Tax Leader, said: “Foreign direct investments are seeing a resurgence across MENA, especially in the GCC. The regional markets offer critical mass, higher purchasing power as well as some of the largest infrastructure and government investment programs. All these factors make the GCC and the overall MENA region very attractive for investment and doing business. The economic incentives are enhanced by the business-friendly tax environment that continues to attract the best companies to establish themselves and do business here.”

The key theme at the event included the increasing focus on transfer pricing (TP) and thin capitalization rules as well as withholding tax for non-residents. The conference also considered the importance of correct tax law

interpretation and the effective use of tax treaty arrangements to achieve the best tax outcomes.

Withholding tax in Saudi Arabia, Kuwait and Oman

Withholding tax compliance is being stringently enforced in several MENA countries. For Saudi-listed companies, an authorized person acting as broker or agent for non-resident investors is

required to deduct 5% WHT on dividends paid to these investors. In Kuwait, 15% withholding tax (WHT) on dividends need to be paid by companies listed on the Kuwait Stock Exchange. Oman has seen an increasing enforcement of withholding tax compliance by foreign companies and service providers with no permanent establishment in Oman.

Availing double tax treaty relief As at 31 January 2014, Saudi Arabia

has 29 effective double tax treaties with a further 22 treaties in process. In Qatar, 57 tax treaties are currently in force and 34 tax treaties have been ratified and await implementation. In Saudi the tax authorities now allow taxpayers to settle withholding tax based on the rates provided in tax treaties, if such payments are supported by prescribed documents. In Qatar, taxpayers may apply for pre-approval to avail tax treaty withholding tax rates.

In both Saudi Arabia and Qatar, taxpayers may also use the pay and claim system to avail tax treaty relief. However, it is important to ensure that all the required information and documentation is carefully prepared and submitted with the refund application so that long refund delays are avoided.

“The need for effective management of taxes in these emerging and dynamic markets to avoid unnecessary costs and risks and maximize opportunities is the primary concern for corporations. Effective controls, robust processes, standardized procedures and the use of appropriate technology can all help to improve accuracy and reduce risks. By identifying trends and anticipating changes in policy, legislation and enforcement, businesses can plan for adverse impacts, take proactive steps to adapt to changes and even engage with policymakers to contribute their perspective to the legislative process. Companies today are beginning to take this opportunity to get ahead of the curve on tax changes very seriously,” concluded Sherif.

The economic incentives are enhanced by the business-friendly tax environment that continues to attract the best companies to establish themselves and do business here.


Feature Middle East

THE MIDDLE EASTT

welve years after the US invaded Afghanistan to topple the Taliban and a decade after the misguided invasion of Iraq - both designed to consolidate and expand America’s

regional clout by removing adversaries - Washington’s actual standing in country after country, including its chief allies in the region, has never been weaker.

Though President Obama can order raids virtually anywhere using Special Operations forces, and though he can strike willy-nilly in targeted killing actions by calling in the Predator and Reaper drones, he has become the Rodney Dangerfield of the Middle East. Not only does no one there respect the United States, but no one really fears it, either - and increasingly, no one pays it any mind at all.

There are plenty of reasons why America’s previously unchallenged hegemony in the Middle East is in free fall. The disastrous invasions of Afghanistan and Iraq generated anti-American fervor in the streets and in the elites. America’s economic crisis since 2008 has convinced many that the United States no longer has the wherewithal to sustain an imperial presence.

The Arab Spring, for all its ups and downs, has challenged the status quo everywhere, leading to enormous uncertainty while empowering political forces unwilling to march in lockstep with Washington. In addition, oil-consuming nations like China and India have become more engaged with their suppliers, including Saudi Arabia, Iran, and Iraq. The result: throughout the region, things are fast becoming unglued for the United States.

Its two closest allies, Israel and Saudi

Arabia, are sullenly hostile, routinely ignore Obama’s advice, and openly oppose American policies. Iraq and Afghanistan, one formerly occupied and one about to be evacuated, are led, respectively, by Prime Minister Nouri al-Maliki, an inflexible sectarian Shi’ite closely tied to Iran, and President Hamid Karzai, who periodically threatens to join the Taliban. In Egypt, three successive regimes - those of president Hosni Mubarak, Mohammad Morsi of the Muslim Brotherhood, and the chieftains of the July 2013 military coup - have

insouciantly flouted US wishes. Turkey, ostensibly a North Atlantic

Treaty Organization ally, is miffed over Obama’s back-and-forth policy in Syria and has shocked the US by deciding to buy a non-NATO-compatible missile defense system from China. Libya, Somalia, and Yemen have little or no government at all. They have essentially devolved into a mosaic of armed gangs, many implacably opposed to the United States.

This downward spiral has hardly escaped attention. In a recent address

to the National Council on US-Arab Relations, Chas Freeman, the former American ambassador to Saudi Arabia, described it in some detail.

“We have lost intellectual command and practical control of the many situations unfolding there,” said Freeman, whose nomination by Obama in 2009 to serve as head of the National Intelligence Council was shot down by the Israel Lobby. “We must acknowledge the reality that we no longer have or can expect to have the clout we once did in the region.”

Let’s begin our survey of America’s Greater Middle Eastern fecklessness with Exhibit A: Syria. It is there, where a movement to oust President Bashar al-Assad devolved into a civil war, that the United States has demonstrated its utter inability to guide events. Back in the summer of 2011 - at the very dawn of the conflict - Obama demanded that Assad step down. There was only one problem: short of an Iraq-style invasion of Syria, he had no power to make that happen. Assad promptly called his bluff, escalated the conflict, and rallied support from Russia and Iran. Obama’s clarion call for his resignation only made things worse by convincing Syrian rebels that the United States would come to their aid.

A year later, Obama drew a “red line” in the sand, suggesting that any use of chemical weapons by Syrian forces would precipitate a US military response. Again Assad ignored him, and many hundreds of civilians were gassed to death in multiple uses of the dreaded weapons.

The crowning catastrophe of Obama’s Syria policy came when he threatened

By Bob Dreyfuss

A FIELD GUIDE TO ALIENATING

The disastrous invasions of Afghanistan and Iraq generated anti-American fervor in the streets and in the elites.


Middle East Feature

a devastating strike on Assad’s military facilities using Tomahawk cruise missiles and other weaponry. Instead of finding himself leading a George W. Bush-style “coalition of the willing” with domestic support, Obama watched as allies scattered, including the usually reliable British and the Arab League. At home, political support was nearly nil and evaporated from there. Polls showed Americans overwhelmingly opposed to a war with or attack on Syria.

When, in desperation, the president appealed to Congress for a resolution to authorize the use of military force against that country, the White House found (to its surprise) that Congress, which normally rubber-stamps such proposals, would have none of it. Paralyzed, reluctant to choose between backing down and striking Syria by presidential fiat, Obama was rescued in humiliating fashion by a proposal from Syria’s chief ally, Russia, to dismantle and destroy that country’s chemical weapons arsenal.

Don’t think for a second that Washington’s ineffectiveness stops with the ongoing Syrian fiasco.

Next door, in a country whose government was installed by the United

States after the 2003 invasion, the Obama administration notoriously failed to convince the Iraqis to allow even a small contingent of American troops to remain there past 2011. Since then, that country has moved ever more firmly into Iran’s orbit and has virtually broken with Washington over Syria.

Ignoring Washington’s entreaties, it has also allowed Iran to conduct a virtual Berlin Airlift-style aerial resupply effort for Syria’s armed forces through Iraqi air space.

Last month, in an appearance before the Council on Foreign Relations in New York during the United Nations General Assembly session, Iraqi Foreign Minister Hoshyar Zebari undiplomatically warned Obama that his government stands against the US decision - taken in a secret presidential finding in April and only made public last summer - to provide arms to Syria’s rebels. (“We oppose providing military assistance to any [Syrian] rebel groups.”)

Meanwhile, Washington is also flailing in its policy toward Egypt, where the Obama administration has been singularly hapless. In a rare feat, it has managed to anger and alienate every

conceivable faction in that politically divided country. In July, when Egypt’s military ousted president Mohammad Morsi and violently clamped down on the Muslim Brotherhood, the Obama administration made itself look ridiculous to Egyptians (and to the rest of the Middle East) by refusing to call what happened a coup d’etat, since under US law that would have meant suspending aid to the Egyptian military.

As it happened, however, American aid figured little in the calculations of Egypt’s new military leaders. The reason was simple enough: Saudi Arabia and the Arab states of the Arabian Gulf, bitter opponents of the Morsi government, applauded the coup and poured at least US$12 billion in cash into the country’s near-empty coffers.

Meanwhile, there are reports that Egypt’s new rulers may turn to Russia for arms in open defiance of a horrified Washington’s wishes.

Bob Dreyfuss is an independent investigative journalist, specializing in politics and national security. (Copyright 2013 Bob Dreyfuss)


Feature Gold

Analysis shows that gold is much cheaper than it should be compared to pre-QE levels - By Alasdair Macleod

WHY GOLD IS “ON SALE” AT TODAY’S PRICES?

An examination of the facts shows that central banks have been on the back foot with respect to Asian gold demand since the emergence of the petrodollar.

In the late 1960s, demand for oil began to expand rapidly, with oil pegged at $1.80 per barrel. By 1971, the average price had increased to $2.24, and there is little doubt that the appetite for gold from Middle-Eastern oil exporters was growing.

The run on U.S. gold reserves leading up to the Nixon Shock in August 1971 when he decided to halt the run on the United States’ gold reserves by suspending the last vestiges of gold convertibility is blamed by monetary historians on France. But note this important passage from Ferdinand Lips’ book GoldWars:

Because Arabs did not understand bonds and stocks they invested their surplus funds in either real estate and/or gold. Since Biblical times, gold has been the best means to keep wealth and to transfer it from generation to generation. Gold therefore was the ideal vehicle for them. Furthermore after their oil reserves are exhausted in the distant future, they would still own gold. And gold, contrary to oil, could never be wasted.

According to Lips, Swiss private bankers, to whom many of the newly-enriched Arabs turned, recommended that a minimum of 10% and even as much as 40% should be held in gold bullion. This advice was wholly in tune with Arab thinking, creating extra demand for America’s gold reserves, some of which were auctioned off in the following years. Furthermore, Arab investors were unlikely to have been deterred by high dollar interest rates in the early eighties, because high interest rates simply compounded their rapidly-growing exposure to dollars.

By the late-nineties, a new generation of Swiss investment managers, schooled in modern portfolio theory and less keen on gold, persuaded many of their European clients to reduce and even eliminate bullion holdings. At the same time, a younger generation of Western-educated Arabs began to replace more conservative patriarchs, so it is reasonable to assume that Arab demand for gold waned somewhat, as infrastructure spending and investment in equity markets began to


Gold Feature

provide portfolio diversification. This was therefore a period of transition for bullion, driven by declining Western investment sentiment and changing social structures in the Arab world.

It also marked the beginning of accelerating demand in emerging economies, notably India, but also in other countries such as Turkey and those in Southeast Asia, which were rapidly industrialising. In 1990, the Indian Government freed up the gold market by abolishing the Gold Control Act of 1968, paving the way for Indians to become the largest officially-recognised importers of gold until overtaken by China last year.

Lower prices in the 1990s stimulated demand for jewellery in the advanced economies, with Italy becoming the largest European manufacturing centre. So, despite the fall in prices between 1997-2000, all supply was absorbed into firm hands. When gold prices bottomed out, Western central banks almost certainly had less gold than publicly stated, the result of managing the price until 1985, and through leasing thereafter. This was the background to the London Bullion Market Association, which was founded in 1987.

Bull markets always start with very little mainstream and public involvement, and so it has proved with gold since the start of this century. It was at this point that the second gold bull market commenced against a background of very little liquidity. Investment bullion was tightly held, the central banks were badly short of their declared holdings of monetary gold, and from about 2004 onwards, ETFs were to grow to over 1,500 tonnes. Asian demand continued to grow (led by India), and China began actively promoting private ownership of gold at about the same time.

Liabilities faced by the bullion banks on uncovered accounts will have increased to accommodate growth in demand. Therefore, the vested interests of the bullion banks and the central banks overseeing the gold market call for continued suppression of the gold price, so as to avoid a repeat of the crisis faced in September 1999 when the price increased by 30% in only two weeks.

Price suppression can only be a temporary stop-gap, and there has

never been sufficient supply to allow the central banks to retrieve their leased gold from the bullion banks. There are two events which will almost certainly have increased this figure dramatically:

When the price rose to $1900 in September 2011, there was a concerted attempt to suppress the price from further rises. The lesson from the 1999 crisis is that the bullion banks’ geared exposure to unallocated accounts was forcing a crisis upon them; if they had been forced to cash-settle these accounts, the gold price would almost certainly have risen further, risking a widespread monetary crisis.

Through 2012, Asian demand, particularly from China, coinciding with continued investor demand for ETFs, was already proving impossible to contain. In February this year, the Cyprus bail-in banking crisis warned depositors in the Eurozone that all bank deposits over the

insured limit risked being confiscated in the event of a wider Eurozone banking crisis. This drove many unallocated account holders to seek delivery of physical gold from their banks, forcing ABN-AMRO and Rabobank to suspend all gold deliveries from their unallocated accounts. This was followed by a concerted central- and bullion-bank bear raid on the market in early April, driving the price down to trigger stop-loss sales in derivative markets and subsequent liquidation of ETF holdings.

Demands for delivery by panicking Europeans in the wake of the Cyprus fiasco could only provoke one reaction. On Friday 12th April, 400 tonnes of paper gold were dumped on the market in two orders, triggering stop-loss sales and turning market sentiment bearish in the extreme. Western investors started to think about cutting their losses, and they sold down ETF holdings to the

tune of 325 tonnes in 2013 by the end of May. However, this triggered record demand among those who looked on gold as insurance against currency and systemic risks.

Since those events in April, someone has been supplying the market with significant quantities of gold to keep the price down. We know it is not Arab gold, because I have discovered through interviewing a director of a major Swiss refiner that Arab gold is being recast from LBMA specification bars into one-kilo .9999 bars, which has become the new Asian standard. Arab gold does not appear to be being sold, only recast, and anyway, it is only a small part of their overall wealth. We also know from our long-term analysis that any European gold bullion is relatively small in quantity and tightly held. There can only be one source for this gold, and that is the central banks.

Officially, the signatories of the Central Bank Gold Agreement, plus the U.S. and U.K. own 20,393 tonnes. A number of other central banks are likely to have been persuaded to “invest” their gold, but this is bound to exclude Russia, China, the Central Asian states, Iran, and Venezuela. Taking these holders out (amounting to about 3,000 tonnes) leaves a balance of 8,401 tonnes for all the rest. If we further assume that half of that has been deposited in London, New York, or Zurich and leased out, that means the total gold leased and available for leasing since 2002 is about 12,000 tonnes. And once that has gone, there is no monetary gold left for the purpose of price suppression. Could this have disappeared since 2002 at an average rate of 1,000 tonnes per annum? Quite possibly, in which case, the central banks are very close to losing all control over the gold price.

Gold has been the best means to keep wealth and to transfer it from generation to generation. Gold therefore was the ideal vehicle for them.


Feature CFOs

Chief Financial Officers in the GCC are placing increasing importance on broadening their skills to keep pace with current change, according to study.

CFOs IN MIDDLE EAST MUST RESKILL TO KEEP PACE WITH MODERN FINANCE

More than 100 CFOs and senior financial professionals gathered for the first ICAEW Finance Leaders evening, held on March 11 at Capital

Club Dubai, to discuss the changing role of today’s CFO. Speakers at the event said advancements in corporate reporting and technology are elevating the importance of the CFO as a key business strategist rather than steward. They also noted in order for CFOs to realise their full strategic contribution, they must broaden their skillsets beyond finance to develop an understanding of IT, legal and leadership issues that now impact their role.

Panellists at the event included Surya Subramanian, Group CFO of Emirates NBD; Richard Hollands, Group CFO of Bukhatir Group; Balazs Torbagyi, Regional CFO in East, Central Europe and Middle East Africa for Oracle; and Kurt Ramin, former partner of PwC (USA) and Director of the IFRS Foundation (the oversight body for the International Accounting Standards Board).

Ramin also presented a keynote address in which he explored the changing face of global financial and business reporting. According to Ramin, new financial standards are actually creating more opportunities for CFOs to expand their business view and obtain greater involvement from their executive management.

Aarti Mohan, Enterprise Performance Management Leader for Oracle Eastern Central Europe and Middle East, spoke about how modern CFOs and finance executives are adopting emerging technologies within their finance functions to develop new capabilities and transform the role of finance.

The debate was moderated by Malcolm Taylor, Co Presenter of Business Breakfast on Dubai Eye. Panellists agreed the consolidation, automation and simplification of financial processes in recent years has meant finance professionals can now play a more proactive role in the overall management and operation of business.

However, opinion was divided on

whether companies in the Middle East recognised and valued the role of the CFO as strategist. While government entities and multinationals have embraced the modern finance function, larger family businesses have been slower to empower CFOs to act as business advisors. Although, this is starting to change with succession planning, financial regulation and corporate governance putting pressure on organisations to become more progressive in their financial operations.

Speaking at the event Peter Beynon, Regional Director, ICAEW Middle East, said: “The CFO is increasingly becoming the co-pilot to the CEO, but in order to reach this potential they must first acquire the necessary skills. While qualifications like the ACA go a long way in preparing finance professionals to become tomorrow’s leaders, it is through events like the Finance Leaders Forum that ICAEW can help finance professionals to better understand the evolution of the CFO function and fill any skill gaps.”

Peter Beynon, Regional Director, ICAEW Middle East

Panellists at the first ICAEW Finance Leaders

Traditional Chinese Medicine and Acupuncture offers relief from chronic pain

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Please call Bahrain›s leading traditional Chinese doctor and Acupuncturist,

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Please call the Clinic on

+973 1766 4088 to book an appointment

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Dr. Lucy LiuThe Chinese Medical Clinic is part

of The Bahrain Medical Group

The Bahrain based lifestyle and luxury magazine with style and editorial flare that is enjoyed by

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Feature Afghanistan

Photos show how ordinary families are rebuilding their lives 12 years after conflict began.

HUMAN FACES BEHIND AFGHAN WAR

Thirty years, Thirty stories presents moving, challenging and inspiring images of people who have changed their lives forever with the help of the British charity, Afghanaid.

12 years after the war first broke out in the country, the works have been shot by photographer Leslie Knott and are now on display in London.

The Oscar-nominated filmmaker said: ‘I was so impressed by what Afghanaid has achieved – by working with communities, not through hand-outs, but by building their capacity and skills. I was sceptical, I was doubtful about charity work in Afghanistan, but you just have to see one of their projects, talk to one of the villages where

Images: Leslie Knott


Afghanistan Feature

they work, meet their incredibly professional, dedicated, focused staff to see that Afghanaid represent the very best of British charities – they are the absolute blue chip of organisations.

Afghanaid started working in Afghanistan in 1983 and despite 30 years of conflict and war it has never left and has no plans to do so.


Feature Iran

IRAN LAUNCHES ‘DOWN WITH AMERICA’ AWARDS

An award offering cash prizes for the best works of art that stir up hatred for the United States has been launched in Iran.

The competition, named Marg bar Amrika, which translates to ‘Down with America’ or ‘Death to America’, has a grand prize of 100million Iranian rial, which equates to US $4,000. Held in two parts, the contest invites entries on anti-American subjects.

The first part, eligible for the $4,000 prize, is for photographs, posters and cartoons, while the second part, with a smaller grand prize, is for documentaries, hymns and blog posts.

The awards are sponsored by conservative news agencies and television stations. A website promoting the awards features the iconic ‘Uncle Sam’ image with a medieval mace drawn into his hand.

The topics encourage entrants to focus on the United States as a centre of imperialism, hypocrisy and prejudice against Islam, and Iran in particular.

Iran and the US have had a strained relationship for decades, which had looked to improve since the election of moderate politician Hassan Rouhani as president in June this year.

The announcement of the award comes as conservatives in Iran feel ignored by the government, which has recently re-opened talks in the West over the country’s nuclear programme.

‘Down With America’: The Topics For Entries Into Anti-Us Contest Why do people say ‘down with

America’? Why is the US is not reliable? The US and broken promises The US and self-conceit The US and human rights The US and oppression The US and Islamophobia The US and Iranophobia The US and global Zionism The US and neo-colonialism The US and democracy The US dictatorship The US and freedom of speech The US and the Occupy / 99 per

cent movement

Hezbollah - Lebanon’s ‘Party of God’ - is a multifaceted organisation: it is a powerful political party in Lebanon, a Shia religious and social

movement, Lebanon’s largest militia, a close ally of Iran, and a terrorist organisation. Drawing on a wide range of sources, including recently declassified government documents, court records, and personal interviews with intelligence officials, Matthew Levitt examines Hezbollah’s beginnings, its first violent forays in Lebanon, and then its terrorist activities and criminal enterprises abroad in Europe, the Middle East, South America, Southeast

Asia, Africa, and finally in North America. He also discusses Hezbollah’s unit dedicated to supporting Palestinian militant groups and the group’s involvement in training and supporting insurgents who fought US troops in post-Saddam Iraq. The book concludes with a look at Hezbollah’s integral and ongoing role in Iran’s ‘shadow war’ with Israel and the West, including plots targeting civilians around the world. Levitt shows convincingly that Hezbollah’s willingness to deploy violence at home and abroad, its global reach, and its proxy-patron relationship with the Iranian regime are all matters worthy of the utmost concern.

Hardback / 416pp / RRP £20.00 – available from Amazon.co.uk ‘Matthew Levitt has made a significant contribution to public understanding of Hezbollah’s worldwide operations. He has shone a bright light into some of the darkest corners of the group’s activities overseas.’ - Richard Barrett, former head of MI6/SIS/British Intelligence’s Counter Terrorism Department and coordinator of the United Nations Al-Qaeda–Taliban Monitoring Team.

HEZBOLLAHThe Global Footprint of Lebanon’s Party of God.

Matthew Levitt


Triathlon Abu Dhabi

Amateur athletes have the chance to compete alongside a world-class field of elite triathletes

such as gold medallist Alistair Brownlee

Annual event now ranks among world’s top 20 for capacity.

ABU DHABI INTERNATIONAL TRIATHLON - 2,400 RACERS FROM 68 COUNTRIES

Abu Dhabi International Triathlon marked its fifth anniversary with its first, completely sold out event. A line-up of 2,400 triathletes from 68 countries

converged on Abu Dhabi Corniche on March 15 making it one of the world’s 20 largest must-do triathlons.

“The huge demand for the event demonstrates a consistent rise in amateurs and elites looking for the ultimate triathlon challenge with 60 per cent of racers registered from around the world and 40 per cent from the UAE alone,” explained Faisal Al Sheikh, Director, Events Bureau, Abu Dhabi Tourism & Culture Authority (TCA Abu Dhabi), which presents the annual event.

This was no exception to Bahrain, having reported the largest contingency of athletes to have ever represented the Kingdom in Abu Dhabi’s event. A team of 24 athletes comprised of Bahraini nationals and Bahrain residents from a diverse range of nationalities, including UK, USA and Mexico, took on the challenge of participating and completing the event’s short distance -1.5 km swim, followed by 100 km cycle and finishing with a 10 km run. The training period in the lead up to the event saw the athletes participating in races organized by the Bahrain Road Runners and special sessions were also organized by the Bahrain Social Runners and the Bahrain Triathlon Club to ensure top performance

of the athletes at the race. “The number of keen triathletes flying

in for the race from countries such as Russia, Portugal, the Philippines, Brazil, South Africa, Japan and Finland continues to rise which is a positive indicator of the event’s success and growth on a global scale.”

The International Triathlon Union’s (ITU) successful bid two years ago for the inclusion of triathlon in the Arab Games 2015 was a significant step for the sport in the Middle East, offering an additional opportunity to showcase the

sport internationally and promote it as a gateway to active lifestyles.

“We are hoping this event will inspire more adults and children in the region to engage in the sport and encourage the Emirates,” added Al Sheikh.

This year the Abu Dhabi International

Triathlon featured first-time entries from as far afield as Algeria, China, Ethiopia, Iceland, Norway, Peru, Trinidad & Tobago, Ukraine and Vietnam.

The Abu Dhabi International Triathlonoffers three different distances - Long,

Short and Sprint Courses - for racers of all abilities. The short and sprint distances also offer the popular option of relay entry, allowing groups of colleagues, families and friends to tackle the event together.

Amateur athletes have the chance to compete alongside a world-class field of elite triathletes on the spectacular course, which starts with a swim in the crystal blue waters off Abu Dhabi’s Corniche, continues with the cycling stage across to Saadiyat and Yas islands, and concludes with a run out past the iconic Marina Mall breakwater.

Bahrain Female Athletes


Dubai Maritime Industry

Maritime projects and coastline developments drive growth in GCC boat ownership.

DUBAI’S MARITIME INDUSTRY

According to market research by Dubai Council for Marine and Maritime Industries (DCMMI) and Drydocks World, Dubai’s maritime industry is buoyant

as the UAE saw USD170-220 million in investment in boat design and boatbuilding in 2013.

Thanks to the impact from World Expo 2020, and coastline and island developments such as Dubai Maritime City, Nakheel, The World, and the Dubai Canal, Dubai’s maritime industry is showing strong growth across the board, the DCMMI, a trade association with more than 200 regional members, stated.

“Dubai’s popularity with leisure marine craft is evidenced by the increase in number of boat and marine licence registrations received by the Dubai Maritime City Authority (DMCA),” said Nawfal Al Jourani, Director of Communications, DMCA.

UAE based fiberglass boat builder Gulf Craft, one of the world’s top 10 superyacht manufacturers, offers eight superyacht models between 24 metres and 50 metres in overall length. Over the last two years, the number of orders has

tripled for Gulf Craft’s small boats from 9 to 13 metres long, while larger fly-bridge yachts are also increasingly popular.

Erwin Bamps, COO, Gulf Craft, said: “The most interesting market growth we have seen is in the 30 to 40 metres sizes. The pragmatic approach and positive consumer confidence that is prominent in the Gulf means that when owners decided to upgrade, they didn’t go from a 24 metre to a 25 metre, they went from an 24 metre and jumped across the 30 metre barrier into superyacht territory.’”

Thanks to improved facilities and marinas for yachts in the UAE, Qatar, Bahrain, and Kuwait, yacht owners in

the Middle East are increasingly keeping their yachts of up to 40 metres long in the region, Bamps added.

UAE boat manufacturer Ahmed Al Zaabi, Executive Manager at Julfar Craft said: “We are seeing strong demand, as more Dubai tourists and residents spend time on the water, and we expect a 20% increase in sales”.

The 22nd Dubai International Boat Show is held at the Dubai International Marine Club - Mina Seyahi, from March 4-8, 2014. The event will be open to trade visitors and the general public from 3pm – 9:30pm daily.


Super Yacht Dubai

RIVA 68’ EGO SUPER UNVEILED

Guests at this year’s Dubai International Boat Show were able to experience a special slice of luxury thanks to ART MARINE, a leading yacht

dealership and marina operator which revealed the brand-new 68-foot Riva Ego Super yacht to the Middle East public.

The sleek design of the 68’ Ego Super is typical of a Riva built yacht, reflecting the company’s tradition of seamlessly mixing elegance with innovation. In the cockpit the reclining sofas can face in either direction, allowing flexibility for on-board guests, whilst guests seated at the bow can make use of a specially designed electric awning, - once again showing that adopting new technologies does not come at the expense of comfort.

Inside it is the same story, with

everything being reexamined to improve the ownership experience. The deck has been raised to allow additional headroom in the cabins, giving a more airy and spacious feel for the occupants. In addition the main salon has been moved to the upper deck, again altering how the space is best used.

Greg Stinner, CEO of ART MARINE, comments:“Yacht buyers in the Middle East are gradually shifting to high-quality brands rather than size, maximizing their use to primarily day use and fast cruising. The 68’ Ego Super is an ideal compromise between a sizeable flybridge yacht, yet allowing maximum flexibility, performance and ease to operate. Moreover, there is enough room on board to have a crew, while maintaining a degree of privacy while entertaining family and friends.”

The 68’ Ego Super also incorporates the PLC technology-based Gi8 system, which controls, manages and monitors all on-board systems. This system particularly suits sporty yachts such as the 68’ Ego Super and once again gives the boat the edge over its rivals.

The 68’ Ego Super also incorporates the PLC technology-based Gi8 system, which controls, manages and monitors all on-board systems.


Car Volkswagen

Gulf Insider’s Hugh Haskell-Thomas spends two days, with two iconic cars, and has two quite different experiences…..

MINI COOPER vs VW GOLF R

The post-sandstorm roads of Dubai and a racetrack provided the perfect setting for comparing two totally revamped cars from BMW and Volkswagen – the

newly launched Mini Cooper and Golf R; similar in size, yes, different characters, completely!

In 1959 the pen of Alec Issigonis brought to life a car design that revolutionised the small family car at the time, dominated rally sport for years and developed a worldwide family of enthusiasts that has lasted generations; the Mini is reborn – the New Original! Acquired by BMW in 1994 and 55 Years after its original launch, on the birthday of its legendary ‘father’, the 3rd Generation of the BMW Mini Cooper was revealed. Larger, more refined, more powerful and more ‘tech-savvy’, it still retains the cheeky looks and fun of its predecessors; critical to the success of the car, albeit now in bigger clothing.

In standard Cooper form, with a 1.5 liter turbocharged 3-cylinder engine, that vastly outperforms the last model, it will reach 100kph in 7.8 seconds, its 124 horsepower pushing the car on to a little over 200kph; a major improvement

despite losing a cylinder! In Cooper S form, with a 189 horsepower, 2.0 liter turbocharged power plant it reaches 100kph just over a second faster and rockets on to just over 230kph, more significantly developing over 280 Nm of torque; unstoppable fun!

A huge number of technical innovations have been added to this complete revamp, a new chassis, Dynamic Power Steering, a new 6 speed gearbox with Green, Mid and Sport modes, to name but a few. However, it now feels tighter and more purposeful than earlier models. Enthusiasts may like it or not, but the Mini has finally grown

up into a more refined package; though despite this, it’s still fun and exhilarating to drive!

With the speedometer moved to behind the steering wheel, arguably the right place, the iconic sphere has been retained in the centre of the dash, now the focus of many of the new technical gizmos in the car. This 22cm LED screen provides access to standard navigation, audio as well as Mini-Connected, the latter coupling your smartphone to the car and allowing access to MINI’s own social-media apps, along with streaming audio and networking apps from Twitter, to Foursquare, to Facebook, even

CAR REVIEW


Volkswagen Car

allowing you to compare driving styles with other Mini owners! While away from the car, the mobile side of this cool app provides information on fluid levels, service intervals and can even help you find your way back to your car if needed!

The Mini has never been a cheap car and the new variants are no exception, but driving a 60 year old icon never will be without a slight downside; if price is the only one, then your heart will overcome this small increment over its peers. It’s a Mini – the new original!

The following morning’s sunrise marked the transition from Mini Cooper to the new Volkswagen Golf R; the most powerful production version of VW’s iconic hatchback to date. With a little over 295bhp and 380Nm of torque, from its turbocharged 2.0 liter lump, the Golf R is a different beast altogether – wow!

With the Golf R’s 4Motion four-wheel drive system and a six-speed quick-shifting dual-clutch DSG gearbox sees 0-100kph dispatched in a little under 5 seconds. Pressing on relentlessly towards the limited top speed of 250kph, with its four tailpipes emitting a wonderful howl in Race mode, the most responsive of three selectable driving setups, the experience is electric; a hot hatch in raw form.

The car has not changed much in size from its predecessor, but underneath almost everything has been redesigned in this Mark 7 variant, including VW’s latest XDS+ system that presses the

The Mini is reborn – the New Original! Acquired by BMW in 1994 and 55 Years after its original launch, on the birthday of its legendary ‘father’, the 3rd Generation of the BMW Mini Cooper was revealed.


Car Volkswagen

brakes gently on the inside wheel during cornering, killing understeer and helping you achieve a tighter line and a variable assistance electromechanical steering providing direct feedback of the action going on underneath; it all works beautifully!

The interior is little different to other high spec models in the Golf range, but the sports seats, with light grey inserts and aluminum pedals ensure you know that you’re in something a little more focused than the rest of the range. The electronics are all there, of course, great audio, navigation and the now ubiquitous iPhone integration, however, the tunes are nothing in comparison to the roaring and popping coming from those tailpipes!

Out on the Dubai Autodrome, chasing another R around the track, revealed the true prowess of the car; I hate to admit it, but it was better than me. The handling is precise and instant, it just goes, and goes, and goes! With all of the electronic assistance turned off, paddle shifters flicking through the gears and the tyres howling under pressure, the Golf R was in its element; epic.

So, which of these amazing cars will be sitting on your drive? It would be wrong to compare the standard Mini Cooper to the Golf R, but it is an amazing little car and definitely would be at the top of the list for my daughter, especially if Mini-Connected helps me to keep track of her!

Comparing the Mini Cooper S and Golf R, in top spec, the Golf comes in a little cheaper, but not by much.

Comparing the Mini Cooper S and Golf R, in top spec, the Golf comes in a little cheaper, but not by much.

Ultimately, the choice between these two is one of the heart, the always funky Mini wins it on its safety aspects, tech-savvy connectivity and overall driving fun; perhaps this is the one for my son. For me, the Golf R is the one whose key would be in my pocket – it’s just a shame that we don’t have the roads here

in Bahrain to really make the most of this truly hot hatch; oh well, back to the race track!

To test drive a Mini in Bahrain contact EuroMotors on +973 1775 0750, to test drive a Golf call Behbehani on +973 1745 9977


Police Car Dubai

Images: SWNS.com

A McLaren MP4-12C joins fleet including Lamborghini, Aston Martin, Bentley and Ferrari.

DUBAI POLICE’S LATEST CAR

The latest addition to the emirates police fleet will be tough to outrun at 330 kph.

The McLaren MP4-12C motor joins a fleet of the world’s most expensive patrol cars including a Lamborghini, an Aston Martin, a

Bentley, and a Ferrari. The latest add-on, built in England, has a twin-

turbocharged 3.8-litre engine. And complete with flashing lights, it can accelerate from 0mph to 100 kph in 3.1 seconds.

In November, it won ‘Car of the Year’ and ‘Best Supercar’ at the Middle East Motor Awards.

The custom-made vehicle, painted in Dubai’s flagship green and white colours, carries a ‘2020’ number plate to celebrate the nation’s successful World Expo 2020 bid, which will showcase business, creative, and economic innovation in the country to millions of visitors.

The luxurious cars are part of a government-outlined Police Specification, released last year, which ruled top-of-the-range cars are a necessity to fight crime in a city with so many highways. GFI

McLaren MP4-12C

Aston Martin One-77

Bentley Continental

Ferrari FF, right, and LamborghiniAventador, left, outside one of Dubai’s police stations

Mercedes SLS Gullwing

Lamborghini Aventador


Car Bentley Flying Spur

Nick Cooksey takes the new Bentley Flying Spur for a spin.

2014 BENTLEY FLYING SPUR

The new Flying Spur is Bentley’s most powerful car yet, and it certainly shows. Powered by Bentley’s renowned 6.0-litre, twin turbo W12 engine, it makes

short work of open roads. While enjoying the super smooth

drive I take time to admire the carefully handcrafted interiors. Bentley’s designers have created a luxurious, spacious cabin featuring soft leather and mirror-polished wood veneers. The veneer of the dashboard meets that of the doors in a perfectly aligned curve, giving the impression of an unbroken arc of wood around the interior. The

seats have various massage and air-conditioning functions.

Concealed behind these opulent trimmings lie advanced technologies such as a touch-screen infotainment system, mobile connectivity including Wi-Fi, and an eight-channel, eight-speaker audio system.

Yes, the interior is a luxurious, spacious cabin filled with electronic technologies and exquisite hand-crafted leather hides and wood veneers.

On the outside, unusually sharp and defined wings flow from front to the back of the car making it look... well, ...muscular!

The huge 6.0-litre, quad-turbo 616 horsepower W12 engine burbles and then roars when you put your foot down. And with permanent four-wheel drive the car grips the road perfectly, delivering a top speed of 320 kph and a zero to 100 kph acceleration of just 4.3 seconds. This engine, just like the entire car, is impressive.

It is fast, yet quiet and supremely comfortable. In fact, it would be quite impossible to tell how fast we are going on the highway if not for the alarm that sounds when we go over the speed limit.

This brings us to the only fault we can find with this otherwise exquisite car.

CAR REVIEW


Bentley Flying Spur Car

Yes, the interior is a luxurious, spacious cabin filled with electronic technologies and exquisite hand-crafted leather hides and wood veneers.

Regional Manager of Bentley Middle East said at the regional launch party for this car at Dubai’s Marriott Marquis hotel, “We have already received many pre-orders for the New Flying Spur and the response from our existing and new customers has been overwhelming. This model is set to generate our best ever year in the region for sales”.

Overall, it was an immensely enjoyable trip. The New Flying Spur is the pinnacle of luxury and refinement with exceptional performance that is synonymous with all Bentley models.

For further information on the Bentley Flying Spur, or to arrange a test drive in Bahrain, contact Ahmed Zayani, the exclusive Bentley dealership in Bahrain, on +973 1723 8822, 1723 8190

The speed limit alarm is a loud, harsh buzzing sound; quite authoritative, and more like what one would expect from a hire car telling off those hiring it to behave rather than a luxury super car for the rich and powerful.

Older models of the Flying Spur already have a loyal following in the Gulf region, and this latest model is expected to prove very popular as well. As Chris Buxton,

The author of this article, Nick Cooksey, In addition to being publisher of Arabian Magazines and Gulf Insider Media, is a jury panel member of the Middle East Motor Awards.


Fashion PULL & BEAR

SPRING-SUMMER 2014PULL & BEAR Long summer months are here. Do

the summer casual look with comfort & style with Pull & Bear’s distinct vintage colour prints and patterns. Don’t lose your edge just because you’re loosening up for the season.


PULL & BEAR Fashion

Available at all Pull & Bear outlets across Bahrain.

MEN’S FASHION


Art Painting

THE ART OF ALEXANDRA NOVIK

Bahrain based Alexandra was born in the Ukraine in 1987 and from early childhood showed a great interest in painting and drawing. At the age of 10 she

attended Smolensk Arts School, and at 16 entered the Department of Fine Arts and Graphics of Smolensk State University. Five years of University studies further developed her skills and techniques, and helped her to work out her own artistic style and vision of “life in the art”. Alexandra took a number of master classes from famous Russian artists and studied realism - her favorite artistic school. During her university years her unique style was positively received by some of her teachers and treated as a deviation from the classics by others, but it was recognized by all. Alexandra enjoys making portraits and believes that every face is beautiful in its own ways and it is becoming more beautiful while you are reflecting it on the paper (drawing or painting), and it is in the power of the artist to show the life

Alexandra Novik


Painting Art

of the face (emotions) on paper. Recently Alexandra has begun to focus on abstract art and plans to work more in that direction.

Contact detailsArt Blog: http://alex-butterfly.blogspot.com/ Web Page: http://jemnovik.wix.com/shuroop


Feature Live Concert

By Mohammed Alshoaiby

NO SATISFACTION AT THE ROLLING STONES LIVE IN ABU DHABI

“Honky Tonk Women” was the first Rolling Stones song I ever heard, back when I was 12. The Internet was

still very, very young, and I had illegally downloaded a bunch of their songs off the now-infamous Napster website. I never thought I would see The Rolling Stones live, and when I finally did in Abu Dhabi on February 21, I wish I didn’t.

People crowded into the Du Arena at Yas Island to watch The Rolling Stones, and the lyrics of their last hit single “Doom and Gloom” echoed out of the gaping, vacant eyes of all the investors, businessmen, and yuppies that flailed in sullen and cautious.

Once I got past the Dunhill Cigarette advertising booth, the Harley Davidson mini-showroom, the various lounges and high-class seating areas that stuck out at a rock concert like a Versace suit, I found a decent spot with some friends at the front of the “general audience” section, which made up the bulk of the venue, while steel fences separated the people who paid AED450, and the people who paid well over AED1,000 – leaving the “fire pit” front-row area costing about AED4,000. This was a far-cry from The Stones’ legendary 1969 Altamont Free Concert. In Abu Dhabi, as a good friend of mine put it, “the bigger the bank account, the bigger the fan.”

Of course, by the time Mick, Keith, Ronnie and Charlie came up on stage, I was squealing with excitement. After all,

I was at a Rolling Stones concert, a band I never thought I’d have the chance to see life. Then, halfway through their fifth number, “Emotional Rescue,” I realized the band was just going through the motions, and the facade fell right down to the thud of Charlie Watts’ bass drum. It wasn’t like they had much energy to feed off of anyway — the crowd were all there to hear “Paint It Black” and “Can’t Get No (Satisfaction),” The Stones’ two most overplayed and glaringly commercialized tunes.

The show was saved by a stellar performance of “Gimme Shelter” featuring long-time Rolling Stones back-up singer Lisa Fischer, whose pipes commanded everyone’s attention with a vocal talent incapable of hitting a sour note, soaring over lead singer Mick Jagger’s often charming slurs. Fischer could levitate thousands of people with a voice so powerful, I had to make sure my feet were still on the ground.

I took a look around at the crowd, a sea of 40 and 50 somethings in polo shirts and expensive shoes, and I realized the hippies had all grown up broke, while the squares all got rich and moved to Dubai, where on February 21, they brought all their “Doom and Gloom” along with them.

“I have never seen such a static crowd,” read a text message from a friend who was all the way across the venue, alleviating any suspicions that I might have just picked a bad spot among the tens of thousands of people who

showed up that night.My review has been harsh thus

far. While Paul McCartney and Ringo Starr (of Beatles fame) sit around in their mansions watching Arrested Development, The Stones never called it quits – not for heartbreak, not for the fall of merit in the music industry, not even for death. They have managed to continue recording and performing for decades, making them the longest running band in history. For that, they have my undying loyalty as a fan and my admiration as a musician. There is, no doubt, something charming about a band that has been performing for more than five decades.

Perhaps it wasn’t the crowd or The Stones themselves who ruined the show. Maybe it was the uber-corporate culture of the United Arab Emirates that caused a paralyzing schism. I’ve always wanted to see The Rolling Stones, and I still want to see them, because I really don’t feel like I have. Neil Young once said: “It’s better to burn out than to fade away,” and perhaps the Rolling Stones should’ve burned out decades ago. Everything I’ve romanticized about them for the last 14 years of my life, since the first time I heard “Honky Tonk Women,” seemed to fade like smoke in a sea of vacant, gaping eyes, like glass mirrors reflecting the drudgery and mundanity of the times we live in.

This is an amended version of an article first published in the Saudi Gazette


Last Word

DON’T WASTE TIME! By Harvey MacKay

We recognize that an essential and fundamental aspect of being an effective business leader is the ability to effectively manage time. In

fact, one of our top frustrations is the seeming “lack of time”. The struggle to effectively manage and use our time is common to almost all of us.

“Time is just another word for life.” You can think of life as a bank account with a limited balance of time that is relentlessly being withdrawn moment by moment, day by day, year by year—until the account is empty. And there is no overdraft protection nor are any deposits being made.

In fact, you have 24 hours every day, day in and day out, just like everyone else. The real question we need to ask then is not “How much time do I have?”, but “How will I spend the time I have?” While it’s true that we cannot dictate how we spend every moment of every working day, it’s equally true that how we spend the time is still a matter of choice: we can choose to be disorganized, reactive and ineffective—or we can

choose to be organized, discriminating and productive. Poor time management is largely a matter of habit and a lack of focused attention and intention. But effective time management is also a matter of habit and the result of focused attention and intention.

The way you manage your time corresponds with the way your business operates—if your time management is reactive and unfocused, the general state of your business is likely to be reactive and unfocused. Books have been written and training programs launched—the problem really isn’t a lack of information. The problem is simply in implementation. So here is a brief nuts-and-bolts summarization of the best thinking on the subject:

Make it a habit to plan your work day. Plan your work! Make a list. More importantly, make a list of only the top five or six tasks or items you must do that day.

Assign a time frame for completing each of those priority tasks. Be realistic, but also be discriminating. Make certain

there is enough time in the day for the tasks you want to complete.

Plan a time within your day for each of these tasks. Make sure you allow time within your day for unplanned tasks, interruptions, and unavoidable changes.

Work your plan! Don’t allow yourself to be distracted or diverted—don’t give in to the temptation to blow off some task that now seems unpalatable. Go through your list, complete your priority tasks, and mark them off your list. The emotional lift and energy boost that comes from this exercise is addictive.

Be serious about your time. No one else will respect your time if you don’t. Be clear and consistent when saying “No” to requests for your time that take you outside of your plan.

More Time Is Really More Life. The good news is that learning to manage your time is, in part, like any other skill. All it takes is a little practice and a willingness to develop some new habits.

A fundamental aspect of being an effective business leader is the ability to effectively manage time.

For more information contact: T: +973 1700 4575, F: +973 1772 1722, M: +973 3652 [email protected]

ProDesign Arabia has been designing and coding websites for small and medium-sized businesses for many years now. We can design and create sleek, modern websites that

help businesses make an impact, increase sales and grow. Our language of choice is plain English, but we can speak fluent geek when we need to. We may be au fait with

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