the edge jan 2014 (issue 51)

- QATAR’S BU

SINESS M

AGAZIN

E - Vol. 6 No. 1 - Issue 51 - January 2014

Vol. 6 No. 1 - Issue 51 - January 2014

Exclusive: How Silatech is fostering a volunteer network in Qatar

THE FUTURE IS

PLUS:Qatar Chamber’s Rowhani contributes to WTO trade deal

Al Tamimi opens Doha sports law practiceQatar’s 2014 real estate outlook

What broadband could mean for Qatar

The value of eco-friendly construction in Qatar

THE ECONOMICSOF GREEN BUILDING

An exclusive interview with AamalMD Tarek M. El Sayed

RECIPEFOR SUCCESS

Qatar expands its hydrocarbon empire

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The Edge | 1

J a n u a r y2 0 1 4 w w w.t h e e d ge . m e

cover story

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contents

featuresBusiness Interview: Tarek M. El Sayed 48

Managing director of Aamal, Tarek M. El Sayed, discusses his approach to managing one of Qatar’s largest and most diversified conglomerates, and how different business units

are brought together and made highly profitable under a single corporate vision.

Feature Story: Cost analysis of green buildings in Qatar 54

While there are undoubtedly environmental benefits to green building techniques, The Edge’s Farwa Zahra explores the economics of green buildings to discover whether they

can be cost effective.

Business Management: What your employees really think 60

If you have a bad boss, you know how damaging it can be to an otherwise healthy working environment. Julian Birkinshaw examines some approaches for managers to see the world

from an employee’s perspective.

A visualisation of a methane molecule (CH4) which is the primary component of natural gas. As Qatar’s hydrocarbon

extraction rate flattens, the nation is pursuing an alternative growth strategy

in the sector, moving into downstream chemical and petrochemicals and exports,

writes Jamie Stewart.Tarek M. El Sayed, the managing director of Aamal explains that through its diversification of operations, the group has been able to capitalise on some of fastest-growing sectors and ensure that shareholders benefit from Qatar’s remarkable growth.

42

Since the moratorium on the extraction of natural gas in the North Field went into effect in 2010, Qatar can no longer rely on traditional hydrocarbons to power its economic growth. Instead, it has turned in part, to diversi-fication within the sector itself. (Image Qatargas)

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- QATAR’S BU

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AGAZIN




THE FUTURE IS







RECIPEFOR SUCCESS



2 | The Edge

contents page

sectorsFinance & Markets 23The stability of the Qatar’s financial markets will be the force that drives national development in a sustainable manner, said the country’s Prime Minister at the Euromoney Qatar Conference 2013 in December.

regularsFrom the Editor 06Photo of the Month 10Business News 12Qatar Perspectives 18Products Page 70The View from Doha 72

HE Abdullah bin Nasser bin Khalifa Al Thani, prime minister, State of Qatar, said that government would need to focus more on diversification of the growth drivers of the economy.

Energy & Sustainability 27Qatar is laying the groundwork for an independent electricity sector regulator, an analyst told The Edge.

Real Estate & Construction 31Real estate experts believe office rents are likely to increase in the coming year, as will residential rates.

Tech & Communications 35Qatar’s new National Broadband Plan outlines how access to the Internet and services based around it will be improved in the future.

Healthcare & Education 39With as many as one in five people in Qatar being affected by mental illness during their life, the new National Mental Health strategy is an attempt to change the deficit of mental health services and the stigma related to it, through policy in the country.

Business Insight 63Speaking exclusively with The Edge, Steve Bainbridge, regional head of sports law and head of Doha office for Al Tamimi, says there is massive potential for legal entities focused on sport. Raed Chehaib, the CEO of Interactive Business Network discusses the upcoming Entrepreneurship in Economic Development Forum, and Silatech’s senior career guidance manager, Salwa Atiyyah talks to The Edge about Qatari youth volunteering to serve local communities.

Mitsubishi Jan2014.pdf 1 12/23/13 8:58 AM

4 | The Edge

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6 | The Edge

Miles Masterson Managing Editor

editor’s letterRolihlahla Mandela, also known as ‘Madiba’.

Rarely do I insert my personal opinion into this column, but as a proud South African, I hope you will indulge me. As a white person who grew up under apartheid, I was subjected to racist indoctrination from the ruling National Party. I clearly recall the fear in our community following the release of Madiba from prison in 1990, and in the lead up to our first free election in 1994.

Mandela. It is really down to the words and actions of that one great man that my beloved country did not descend into a chaotic civil war and that my ilk were not butchered in our beds as some extremists threatened. The magnanimity Madiba showed towards his former captors and oppressors, as well as the entire population of European origin, made all the difference and gave birth to the South Africa of today.

Not without his flaws, Nelson Mandela’s greatest contribution to humanity was that he espoused the ultimate in forgiveness and reconciliation and advocated the sharing of a pluralistic ‘new’ South Africa for all its citizens. Thanks to his example, with the assistance of many other great South Africans of all races, who made sure apartheid was permanently dismantled, our country was spared the scale of destructive tribal and racial conflict still so prevalent in Africa.

Moreover, while South Africa remains deeply scarred by its past and is not without its problems, Mandela’s enduring legacy of loving thy enemy permeates its society and has gone a long way in healing us. And as global media coverage following his demise showed, Mandela’s message also emanated across the world – but as we see in this region and elsewhere, perhaps not enough.

Indeed, if even a few of the architects of all global conflict and those orchestrating the exploitation and oppression of their fellow human beings on all continents could follow Madiba’s path and show some forgiveness, compassion and tolerance, the world could become a far better place. That perhaps, is wishful thinking. But so, once upon a time were a free Madiba and a non prejudiced and a democratic South Africa.

So, in closing, RIP Nelson Mandela – and may 2014 bring better fortune to us all.

As I write this, 2013 is drawing to a close, and I cannot help but reflect on the past 12 months. The year was a good one for The Edge magazine. It began with our January edition, also our 40th issue, as we ushered in 2013 with a redesigned masthead, logo and layouts, a new size, new staff members and refocused editorial content.

A revamped The Edge was extremely well received in Qatar, as well as in the United Arab Emirates, where we also started distributing this year. Highlight issues during 2013 that evoked the most feedback included our cover story on Qatar’s dire road death statistics in April – and on a more positive note, the ascension of HH the Emir Sheikh Tamim bin Hamad Al Thani as new ruler of Qatar in July, without a doubt one of the biggest news stories in 2013 in the Gulf region.

During the past year The Edge also published a number of supplements, including our first edition of The Edge Ambition, focused on the Qatari job market, as well as the inaugural The Edge Finance, published to coincide with the Euromoney Qatar Conference. Simultaneously, we released our commemorative 50th edition, rounding off our most successful year of business to date.

The same month, Qatar also experienced its seventh National Day on December 18, by all accounts the largest celebration of its kind in Doha yet, with large military parades, aviation displays and a public appearance by the new Emir and his predecessor, HH the Father Emir Hamad bin Khalifa Al Thani, to an adoring population.

However, 2013 was also one of mixed results for this small but economically powerful Gulf state, with negative reports, such as those concerning migrant workers and the delays in the opening of the new airport, obscuring many of the positive news stories from and relating to Qatar.

But there was also another news story in December 2013 that arguably received the most international coverage of one single event: the death of South African struggle icon and its first democratically elected president, Nelson

Nelson Mandela’s greatest contribution

was that he espoused the ultimate in forgiveness.

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The Edge | 11

Fuel of reliefIn mid-December 2013, the only power station in Gaza, Palestine was able to resume operations after being inactive for seven weeks, thanks to a consignment of diesel fuel donated by Qatar, which was allowed across the border by Israel. The arrival of the 450,000 litres of fuel followed an appeal for emergency assistance by the Palestinians following severe rains and flooding that resulted in two deaths and the evacuation of more than 10,000 homes. It was reported that Qatar pledged to send more than QAR36 million in aid to assist the Palestinian Authority and QAR18 million directly to Gaza, as well as more fuel via ship. The first few tankers of diesel fuel alone will provide up to a third of the territory’s power needs for at least three months, providing welcome relief to people ravaged by one of the worst winters in the region in recent years. (Image Corbis)

photoof the month

12 | The Edge

newsbusiness

Qatar Chamber and ICC help reach a trade deal at Bali wTo Conference

Qatar Chamber partnered with the International Chamber of Commerce (ICC) in reaching a trade deal at the Ninth world Trade organization (wTo) Ministerial Conference at Bali. Speaking exclusively with The Edge, Remy Rowhani, director general of Qatar Chamber, shares what implications this deal will have on the global economy. by Aparajita MukherjeeThe result of the deal, said Rowhani, will be to restore confidence in the multilateral trading system and also generate an addition of USD1 trillion (QAR3.64 trillion) to the global gross domestic product (GDP) and 21 million jobs to the world economy, figures arrived at by the Peterson Institute for International Economics. “This addition to the global GDP is only on account of trade facilitation that the Qatar Chamber has been asking for,” clarified Rowhani, adding that 80 percent of the new jobs would be in Least Developed Countries (LDCs) and developing countries.

According to ICC, this agreement is expected to reduce cross-border transaction costs for companies by 10 to 15 percent and is a significant step for businesses in all sectors and of all sizes around the world.

Qatar Chamber has been working closely with the ICC to encourage all WTO parties to conclude a trade facilitation deal that would contribute to economic growth and job creation by simplifying administrative procedures and standards that

Remy Rowhani, director general of Qatar Chamber tells The Edge that they worked closely with the International Chamber of Commerce to encourage World Trade Organization parties to conclude the deal.

“Bali was our last resort. we knew that if Bali failed,

it would be a disaster for the least developed countries” - Remy Rowhani, director general Qatar Chamber.

dictate how goods cross borders or how they are handled in customs. It was with this objective that Qatar Chamber and ICC created the ICC Business World Trade Agenda (WTA) and in April 2013, hosted the ICC World Trade Agenda Summit in Doha, bringing together business leaders and key policy makers in order to move beyond the Doha Development Round deadlock and ratify trade negotiations

Rowhani said, “We realised as a chamber and as a body that represents the Qatari business community that after 12 years, the Doha Round has not been able to reach any substantive conclusions. The discussions were being stalled and that was disturbing to us, as a chamber. We also realised that if the Doha Round was brought to a substantive conclusion, there would be a number of benefits to the business community worldwide.”

With this objective, the Qatar Chamber worked with the ICC to see how they could bring benefits to the business communities of the 159 member countries of the WTO. “At the WTA”, said Rowhani, “we shared ideas and inputs from the world business community, telling the WTO that these were the expectations of the business communities.”

The Doha Round, added Rowhani, was initiated in 2002 with the aim of taking into consideration the economic needs of those considered least developed countries and developing countries.

“We initiated the process two years ago and the former director general of the WTO, Pascal Lamy welcomed the idea of the inputs into their agenda. Several teams went around the world convincing leaders in many countries of the benefits of closing the Doha deadlock and making them aware of the failure of the Doha Round. In many ways, Bali was our last resort. We knew that if Bali failed, it would be a disaster [for] the LDCs,” Rowhani added.

The Edge | 13

QNB’s banking sector update shows flat loans growth

newsbusiness

with the inauguration of the Helium 2 project, Qatar has become the largest exporter and second largest producer of helium in the world.Twice the size of the first liquefier, Helium 2 is the largest liquid helium facility in the world, officially inaugurated by HE Mohammed bin Saleh Al Sada, Qatar’s Minister of Energy and Industry.

Speaking at a press conference, CEO of RasGas, Hamad Rashid Al Mohannadi said, “It is a unique alliance [between RasGas and Qatargas]…only natural as we share cooperation in natural gas and other fields…we encourage all companies to enter into such joint projects with Qatar companies that have experience in manufacturing, marketing and financing.”

Al Sada spoke about helium’s “specific uses in specific technologies”. With Helium 2 alongside Helium 1, Qatar can now meet 25 percent of the global demand for the gas. When asked about further expansion of current production facilities, Al Sada mentioned a feasibility study was already in progress, Gulf Times reported.

With the Helium 2 feasibility study completed in 2000, construction began in June 2011. In June 2013, the plant began production, reaching full capacity later in October that same year. Helium 2 can produce up to 17.3 tonnes of liquid helium per day, compared with nine-tonne daily

Rasgas launch Helium 2

Qatar’s Commercial Bank, among others, announced that they will be raising QAR2 billion in Tier 1 bonds to improve their capital adequacy ratios as well as provide additional funds aiding loan book growth. (Image Reuters/Arabian Eye)

Qatar’s loans and deposits growth was flat in the month of November. loans declined by 0.1 percent month-over-month (MoM) but are up 11.9 percent year to date (YTd), according to QNB. Deposits dipped by 0.2 percent MoM (+16.4 percent YTD) in the month of November 2013. “Going forward, we expect activity in the banking sector to pick up in the coming months,” stated the QNB report.

The banking sector’s loan-to-deposit ratio remained at 107 percent at the end of November 2013. Going forward, some banks will be issuing Tier I bonds. Commercial Bank of Qatar and Doha Bank announced that they will be raising QAR2 billion each in Tier 1 bonds to improve their capital adequacy ratios as well as provide additional funds aiding loan book growth.

Public sector deposits retreated by five percent MoM (+28.1 percent YTD), while private sector deposits gained by 3.7 percent MoM (+15.1 percent YTD).

The overall loan book exhibited flat performance in the month of November. Total domestic public sector loans declined by 1.1 percent MoM after a robust performance in October. On a YTD basis, public sector loans were up 8.8 percent.

RasGas chief executive officer Hamad Rashid Al Mohannadi (left) speaking at a press conference following the inauguration of the Helium 2 plant. Also present were HE Mohammed bin Saleh Al Sada, Minister of Energy and Industry (centre), and Khalid bin Khalifa Al Thani, Qatargas chief executive officer (right).

capacity of Helium 1. Speaking about the project, Al Sada said, “Helium 2 will produce an important Qatar export that will help meet growing global demand for helium, and improve security of supply for industries that depend on this valuable gas.” Helium has a number of uses in technologies for healthcare, scientific research and manufacturing industry.

14 | The Edge

Ooredoo and QNB have extended their Service Level Agreement, a partnership through which Ooredoo’s nationwide network ensures high availability and maintains uptime for all banking services covering QNB’s extensive network. It further protects the customer from interruptions of service due to connectivity losses between the bank’s main office and its branches and ATMs nationwide. In addition, WiFi has been provided in QNB branches across the country, offering QNB customers with the convenience of Internet access whenever they visit their bank.

Dr. Saif Al Hajari, chairman of the Friends of the Environment Center said the application would help in understanding and appreciating the rich nature of Qatar.

As the Service Level Agreement between Ooredoo and QNB extends, the bank’s customers will have free WiFi access in all QNB branches.

QFC Authority hosted the 2nd Annual GCC International Fiscal Association (IFA) Meeting in Doha, in late 2013. A distinguished group of experts discussed taxation of shari’ah-compliant

financial products and transactions and how they are structured. Mohammed Desin, a partner at Ernst & Young, looked at the growth potential for Islamic finance in the region, and explained why shari’ah- compliant products are important.

“We have awarded our first contracts for early work on the Al Wakrah Stadium and... it addresses

issues from accommodation to remuneration.”Hassan Al Thawadi, secretary general of the Qatar 2022 Supreme Committee, speaking at a sport and cultural conference in Doha.

“There was a line between us and Qatar, which was reopened

[recently] but up to a certain limit.” Hezbollah leader Sayyed Hasan Nasrallah, recently received a diplomat from Qatar. Nasrallah believes the talks between them will settle the differences over the crisis in Syria that has strained the countries’ once-strong relations.

Sasol and Friends of the Environment Center (FEC) have launched Qatar e-Nature, a bilingual interactive mobile application, aimed at increasing environmental public awareness among all social and age groups in Qatar. It contains detailed information and pictures of hundreds of plants, as well as sounds of native and migratory birds.

Sasol launches Qatar e-Nature mobile application

ooredoo and QNB extend business partnership

Salam Stores and Canon unveil legria mini

Economic Zones Company is now Manateq

QP announces IPo of Mesaieed Petrochemical Holding Company

newsbusiness in brief

Mohammed Desin, a partner at Ernst & Young, speaking at the 2nd Annual GCC International Fiscal Association (IFA) Meeting in Doha.

The new Canon Legria mini camera, which was launched recently with Canon’s local partner Salam Stores, has an ultra-wide f/2.8 lens with Full HD at 160 degrees and 170 degrees for stills, enabling users to capture extremely wide angle shots. It also gives the users the option to film in a more conventional style with a closeup angle of 71 degrees.

Economic Zones Company – the developer and operator of advanced economic zones and projects in Qatar – will be now known as Manateq. Owned by the Qatari government represented by Qatar’s authority for SMEs, Manateq and its economic zones will focus on creating the right conditions for smooth, long-term operations for clients, and facilitating opportunities for excellent returns. Manateq’s economic zones are supposed to help in the fulfilment of profitable operations for both Manateq and its customers.

The Mesaieed Petrochemical Holding Company will issue an initial share capital of 26 percent worth QAR3.2 billion. The initial public offering will only be available to Qataris and priced at QAR10 per share. The announcement was made last month at a press conference by HE Mohammed bin Saleh Al Sada, the Minister of Energy and Industry , and HE Ali Shareef Al Emadi, Minister of Finance. The IPO subscription period will close on January 21, 2014.

International Islamic finance experts meet in doha

words & Numbers

10The duration in years of

Defence Cooperation Agreement that governs

interaction between the United States and Qatari forces.

6%The percentage by which

Qatar’s economy is forecasted to grow in 2014, according to the Ministry of Development

Planning and Statistics report.

The Edge | 15

event of the month19 - 22 January

24 - 25 February

International Petroleum Technology ConferenceThemed Unlocking Energy through Innovation, Technology and Capability, the 7th IPTC will cover the latest developments across disciplines that include drilling, exploration and production geoscience, engineering projects and facilities, field development and production operations, mid-stream gas, unconventional resources, reservoir management and more.

The event will feature a nine-stream conference and 67 technical sessions with over 400 technical presentations, and is expected to help organisations map out where, why, how, when and what to do to monetise the growth expected.

The changing dynamics of the gas supply around the globe due to the emergence of shale gas will also be a point of conversation. “It will be interesting to observe if the balance will tip in favour of energy producers or consumers as huge investments continue to pour into oil and gas,” said Waleed Refaay, International Petroleum Technology Conference (IPTC) Project Director for the Middle East.

The changing dynamics of the gas supply due to shale gas will also be discussed at IPTC. (Image Qatargas)

Entrepreneurship in Economic development The topic of entrepreneurship in Qatar and the wider Gulf will be the focus of discussions at the event. Qatar University, in cooperation with Interactive Business Network, have organised the event, which will look at the current entrepreneurial culture and the various issues surrounding it. There will also be a proposal to outline specific plans in order to make universities and other educational institutions incubators for developing young entrepreneurs.

Key events in H1 of 2014

Qatar Masters

Project Qatar

Multaqa Qatar

Qitcom

Qatar Career Fair

Cityscape Qatar

Disclaimer: Event dates are according to the announcements at the time of printing. For updates, visit www.theedge.me/events/

22-25 January

12 – 15 May

9-11 March

26 – 28 May

1-6 April

2-4 June

eventsbusinessQatar, January 2014

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18 | The Edge

Over the past decade, Qatar has led the world in many ways. The state ranks as one of the world’s richest nations, thanks to some of the largest natural gas reserves on earth. We are one of the world’s most rapidly advancing economies. We have the lowest rate of unemployment and one of the fastest growing airlines. Yet when it comes to developing a thriving small- and medium-sized enterprise (SME) sector, we have been less successful. However, this is beginning to change, writes Abdulaziz bin Nasser Al Khalifa, CEO of Qatar Development Bank.

Qatar’s private sector and SMEs – a case of inevitable growth

Abdulaziz Bin Nasser Al Khalifa is the CEO of Qatar Development Bank and Enterprise Qatar.

According to figures from Enterprise Qatar, in 2011, SMEs contributed 10 percent to Qatar’s gross domestic product (GDP) and 15 percent to its employment figures. This compares with 60 percent of Europe’s GDP and 75 percent of its employment. As Qatar moves to diversify its economy, developing a thriving private sector and facilitating the growth of SMEs in core areas of the economy has become a strategic priority of the Qatar National Vision 2030.

SMEs and entrepreneurs in Qatar have historically faced several challenges, the most significant of which has been market access. Burdensome procedures, requirement for significant paid-up capital, scarcity of land (when needed), and long licensing processes, have all acted as barriers to entry. These are common problems across the world, and particularly prevalent in emerging economies, but they are being actively addressed in Qatar. For instance, as noted by the World Bank’s 2012 report Doing Business, Qatar made it easier to start a business by combining commercial registration and registration with the Qatar Chamber at the one-stop shop of the Ministry of Business and Trade.

SMEs have also tended to be focused on a narrow group of industries, markets and products. Primarily operating in the

trading sector, they were characterised by a lack of innovation and limited levels of competition. This is expected to change in the near future as local SMEs come of age. The non-hydrocarbon sector, where most SMEs operate, has been growing consistently over the past four years, with construction and services, rather than trading, leading the way.

There is plenty of room for further diversification, potentially driven by the country’s nascent manufacturing sector. According to data from the Qatar Statistical Authority, in September 2013, Qatar imported goods worth QAR8.9 billion, with commodities from floating docks and platforms to motor cars and aircraft spare parts. The establishment of a sustainable manufacturing sector, with domestically produced goods replacing imports, would be good for both entrepreneurs and the country.

This is particularly true if SMEs begin to emerge in strategic areas of the economy, such as construction-related activities and the manufacturing of plastics, steel and glass. Being ranked 27th globally by the World Bank for ease of getting electricity also means Qatar is especially well placed to support energy-hungry manufacturing companies.

Moreover, there are huge growth opportunities for SMEs operating in infrastructure-related areas, such as the maintenance and operation of roads, ports, airports and rails, as well as in the provision of key services, such as specialised healthcare. With the tourism sector growing by 12 percent in 2012, according to figures from the Qatar Tourism Authority, there will also be increasing opportunities emanating from the hospitality sector.

Yet, regardless of the sector, if entrepreneurs have a solid business plan and a proven track record, they need not worry too much about access to capital. Qatar’s banks have relatively large pools of capital available to lend to SMEs, which contrasts starkly with many other economies, both in the developed and the emerging world. The government has also established publicly-owned financial institutions, to provide specialised support

There is plenty of

room for further diversification, potentially driven by the country’s nascent manufacturing sector.

qatar perspectives

and finance to SMEs. Initiatives such as these, and the pro-SME reforms put in place by the government, are starting to transform the landscape for SMEs in Qatar. We are not there yet, but if the rapid pace of change witnessed in recent years continues, there is no reason why Qatar cannot, over time, become the number one country in the world for SMEs.

18 | The Edge

20 | The Edge

The State of Qatar is the envy of many countries with impressive plans for its future. Unfortunately, what the state lacks are enough qualified citizens to complete its monumental development goals, writes Robert Madronic from College of North Atlantic Qatar.

The challenges of expatriate labour: Employees or mercenaries?

Robert Madronic is marketing instructor at the School of Business Studies, College of the North Atlantic Qatar.

The practice of hiring expatriates is quite common and has a history dating back to the mercenaries of the Roman Empire. The challenge with mercenaries is that they are not motivated by national pride or hope for the future, but by financial gain. Thus, a mercenary will never be as effective as a committed citizen. Qatar’s expatriates don’t carry swords; but hammers and briefcases. Paid to build the country’s infrastructure and institutions, these expatriates will never become citizens and are expected to go home when the job is completed. This lack of residential and job security can create a ‘mercenary mentality’, a motivation to work only for the money. Such motivation rarely leads to long-lasting, high-quality work.

While the state has every right to protect its interests, sponsorship laws, land restrictions and nationalisation efforts arguably exacerbate the mercenary mentality by reminding employees that they are but hired hands who can be sent home at any time without sharing in fruits of their labour.

Mercenary mentalityThe mercenary mentality can create numerous problems for a firm. First, such employees are more likely to leave when offered more money, forcing companies to spend more on hiring. Another problem is that employees may resist adapting to the internal culture of a firm. Change is difficult in the best of times; employees may not bother if they may be gone in six months. This reluctance limits group synergy and makes interpersonal conflict more common. Another issue that is both a cause and a result of the mercenary mentality is the pay differences between workers from different countries. Qatari citizens and Western workers may be able to command higher salaries than staff from parts of Asia,

creating differing expectations for quality and quantity of work. If you were paid half as much as your coworker for the same job, would you put in the same effort?

Long-term visionUnfortunately, market conditions as well as the state’s right to maintain control means that the mercenary mentality will be difficult to overcome. As an employer, however, you can take some steps to lessen its effects. First, you can make sure you hire the right people. Some view a short-term position as an opportunity to gain valuable experience in an international setting, but want to leave after a brief stint. They are in it for the experience, not the money.

International firms, offering short-term transfers to the region so that employees know they still have a position at home, eliminate uncertainty and lessen the focus on salary. Longer-term contracts rather than successive short-term contracts can also reduce employee stress. For new hires, offer long-term contracts to create a sense of permanency. How much effort and dedication will you get from someone with a series of one-year contracts rather than a five-year contract?

Since the main facet of the mentality is the profit motive, offer your staff more than just a paycheck. This begins with benefits such as reasonable housing, recreation, schooling and travel allowances to a standard befitting the level of staff. You must also ensure that your firm takes care of the details. Leaving these issues to newly arrived staff leads to frustration, feelings of betrayal and the desire to find a better employer. We have all heard stories of people arriving to find that there are no places in any schools, their housing was not as promised and the pool has not worked for months. Of course these employees leave for more money, wouldn’t you?

Not all of history’s mercenaries would fight for the highest bidder. Some groups and leaders were so well respected that they inspired exceptional contributions from their mercenaries with average pay.

Imagine how successful you will be with employees like that.

Qatari citizens

and western workers are able to command higher salaries than staff from parts of Asia, creating differing expectations for quality and quantity of work.

qatar perspectives

20 | The Edge

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finance & markets

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The Edge | 23

Stability of financial markets to sustain growth

“Qatar took effective action during the global economic crisis to ensure stability and sustainable development, and we are now embarking on a new phase of sus-tainable development,” said HE Abdullah bin Nasser bin Khalifa Al Thani, Prime Minister, State of Qatar, to open the Euromoney Qatar Conference 2013 held last December.

At the Euromoney Qatar Conference 2013, senior Qatari leaders focused on the launch of a new stage of sustainable development

for the Qatari economy, and outlined what the rise of Qatar means for the global economy.

Outlining his vision for the development of Qatar, HE Abdullah bin Nasser bin Khalifa Al Thani, Prime Minister, State of Qatar, said that the conference took place during a key period of transition for Qatar and the wider world economy. Having achieved the smooth and effective

Qatari leaders expressed unanimity at the Euromoney Qatar Conference 2013, held in doha in december 2013, that the next stage of national development will have to focus on a sustainable model based on the strength that it derives from the financial markets, the primary focus of which will be to attain stability. by Aparajita Mukherjee

Contents: Stability of financial markets to sustain growth 23. Inflation, a concern for Qatar 25. Should rotation of auditors be made mandatory? 25.

finance & markets

This section is brought to you by Qatar Financial Centre

Brought to you by:transfer of power during the year 2013, while the international economy has taken tentative steps towards recovery, Qatar is at a stage to embark on the next phase of its development, which will have a great impact on the global economy and markets.

“Qatar took effective action during the global economic crisis to ensure stability and sustainable development,” said Sheikh Al Thani, “and we are now embarking on a new phase of sustainable development.”

24 | The Edge

sectors | finance & markets

At the strategy level, Al Thani said that the Qatari government expects that the oil and gas sector will have a limited growth impact on the country’s gross domestic product (GDP) in the foreseeable future, adding that the new phase of growth requires the government to focus more on diversification of the economy.

Role of financial institutionsReinforcing the message of Al Thani, HE Ali Shareef Al Emadi, Minister of Finance, State of Qatar, spoke about the role of the financial sector in supporting stability and ensuring the achievement of the Qatar

The total assets of Qatar’s banks in November 2013.

QAR

800billion

National Vision 2030. He focused upon the role of both local and international financial institutions in reducing risk, without reducing opportunities for economic development.

“Financial stability requires sound fiscal policies and the development of a financial system that can cope with risks and boost the capacity of the national economic system to absorb risks. The next phase of development in Qatar will be driven by large-scale infrastructure projects, which will require the input and support of the private sector, and which will deliver a major contribution to the welfare of the citizens of Qatar,” said Al Emadi.

Qatar would focus on providing financial support for projects in the non-oil sectors as part of diversifying the economy and expanding the contribution of its non-oil sectors.

With plans to spend around USD140 billion (QAR509.6 billion) on infrastructure projects ahead of the 2022 World Cup, Al Emadi said the fiscal policy will focus on supporting these projects through optimal utilisation, balancing costs and outcomes and co-ordination among projects to avoid pressures on services and public utilities in addition to controlling inflation.

HE Sheikh Abdullah bin Saud Al Thani, governor of Qatar Central Bank (QCB), highlighted the measures taken by the bank to date, and also indicated the strong plans in place to ensure long-term sustainable development.

“QCB has launched initiatives to promote the effectiveness of the finance

Dignitaries at the Euromoney Qatar Conference 2013 that was held in Doha last December. The conference saw wide participation from central bank governors from across several countries, in addition to a session taken by a representative of the Federal Reserve of the US.

Contribution to nominal GDP by sector

The share of the non-hydrocarbon sector in Qatar will account fornearly half of GDP by 2014

41% 42% 46% 48%

52%54%58%59%

2011 2012 2013f 2014f

Hydrocarbon Non-Hydrocarbon

Source: QNB

The Edge | 25

finance & markets | sectors

Standard Chartered Bank’s global Focus – 2014 entitled Rising East, Emerging west, predicted that the economic outlook for Qatar in 2014 looks strong.LNG-sector dynamics are likely to remain healthy and will underpin strong fiscal and reserves positions. However, the non-hydrocarbon economy should be the primary growth driver in 2014. Government commitments on infrastructure in line with its bid to host the 2022 World Cup and its longer-term National Vision 2030 objectives have resulted in a significant increase in infrastructure investment in the economy in 2013.

Inflation is a key challenge for the economy in 2014, in the bank’s view. “Rents are likely to be a key driver,” stated the report, “and we expect them to begin rising next year. We believe this will be driven by the size of the project pipeline in Qatar, which will require an inflow of expatriate

Financial audit is the process of examining the financial statements of an entity by an independent professional for the purpose of expressing an opinion on the fairness of these financial statements prepared in accordance with a financial reporting framework.

With the events of the past decade, financial statement audits acquired more importance in adding reliability and credibility to financial information used by various market stakeholders. Needless to say, an effective audit highly depends on, among other matters, the independence and objectivity of the auditor, something that regulators in different countries address in a variety of ways, one of which is mandatory audit firm rotation (that

Macroeconomic analysis

Inflation, a concern for Qatar

Audit practices

Should rotation of auditors be made mandatory?

Qatar’s inflation forecast for 2014.

3.5%

“ Financial stability requires

sound fiscal policies and the development of a financial system that can cope with risks.” - HE Sheikh Ali Shareef Al Emadi, Minister of Finance.

employees, generating a new pool of tenants,” stated the report.

Population data from Qatar Statistics Authority shows that the population rose from 676,000 to 1.71 million between 2002 and 2011. The LNG boom drove this 153 percent increase. The bank expects the new phase of investment to bring about another significant rise in the population. The report maintained that the bank’s 2014 inflation forecast for Qatar was 3.5 percent, revised in September from 2.5 percent, given the more positive growth dynamics related to the population and workforce.

Rotation of audit firms is probably one of the most controversial issues in the audit profession. while some argue that rotation is the most effective way to ensure auditors’ independence and objectivity, others believe it reduces the effectiveness and efficiency of the audit. Midhat Salha, a partner at audit firm deloitte, explores the options.

is mandatory change of auditors every specific number of years).

The practices around the world in respect of mandatory rotation also vary. While some countries have no such requirement, others have regulations which require such rotation with terms ranging from five to 20 years, including Oman and Saudi Arabia in the Middle East.

The case for and against Those who support mandatory audit rotation believe that such rotation ensures independence and objectivity of the auditors by addressing the risk of auditor’s over-familiarity with the management. Others argue that the cost of audit rotation (not only financial cost) outweighs the

sector in reducing risk, developing capital markets, and increasing the stability of financial processes. Just recently, we have launched a strategy for the development of capital markets with other ministries, based on the Qatar National Vision 2030,” said Sheikh Saud Al Thani.

Total assets of Qatar’s banks stood at QAR800 billion in November 2013, showing a growth of 12 percent. Customer deposits grew 20 percent; while loans were up 12 percent during the period.

Sheikh Saud Al Thani also reiterated Qatar’s efforts to establish a credit rating agency for bonds. The rating agency, which will be set up jointly by the central bank and Qatar Holding, would help local companies in accessing capital markets. But he did not specify by when it would be established.

In his presentation, entitled The Next Growth Phase of the Qatar Economy, Joannes Mongardini, head of economics at QNB, mentioned that the large increase in investment spending is likely to create 240,000 jobs between 2013 and 2014 alone. The large projected increase in investment spending in construction, transport and petrochemicals will lead to a significant diversification of the economy and a new population wave. He reiterated that future economic growth will critically depend on human capital that Qatar will be able to develop and retain.

26 | The Edge

sectors | finance & markets

Midhat Salha is a partner at Deloitte. He has been based in Qatar since 2008.

benefits and that there is a wide range of other measures that regulators can take to achieve the overall objective. Their arguments against mandatory firm rotation include the direct negative impact on the quality of the audit. The auditor’s understanding of the company’s business model, processes, systems, risks and related controls is a prerequisite for an effective audit. Because such understanding is accumulated over time, audit failures more often happen in the first few years of an audit relation.

Rotation increases the complexity of audits, reduces efficiencies and thus increases audit costs. This is because auditors in general invest heavily during the first few years of an audit in obtaining an understanding of the company’s specifics, an investment which will have to be repeated by each new auditor every few years.

Alternatives in practice If audit rotation is not agreed on as a solution, what else can be done? Various other factors and measures have proven to be effective.

Perhaps the single most important role played in ensuring proper audit quality and effectiveness is that of audit committees. An active and effective audit committee, with proper oversight over the quality of the external audit, the relation with the external auditors, their independence, the scope of their work, the appropriateness of their methodologies and approach, is possibly one of the best answers.

Some regulators require the rotation of the audit partner (not the firm) every specific number of years. In some countries, there is a requirement to re-tender (not rotate) the audit every specific number of years and in some cases, where rotation of firms is mandatory, the term of rotation extends to 15 or 20 years.

Regulators can look into designing and implementing a comprehensive solution, based on multiple measures and methods, including adequate and appropriate regulations addressing the objectives, roles and responsibilities of audit committees; audit partner’s and team members’ mandatory rotation rules; and re-tendering the audit every term. If rotation is considered, then the term (number of years) of mandatory rotation and the cool-off period need to be carefully addressed.

The Edge | 27

Contents: Qatar set to launch independent electricity regulator in 2014 27 . Middle East must revisit domestic gas pricing 28 . gas suppliers must take care of overpricing clauses 30 . Solar power could boost region’s economies 30 .

energy & sustainability

Qatar is laying the groundwork for the establishment of an independent electricity sector regulator, industry insiders have told The Edge, with the body set to begin work in 2014, writes Energy and Sustainability Editor Jamie Stewart

According to Glada Lahn, senior energy researcher at international think-tank Chatham House, plans

to launch the independent regulator were presented to industry insiders – including Lahn – by senior Qatari officials earlier in 2013.

Qatar government spokespeople did not confirm plans with The Edge at the time of going to press, but the establishment of an independent regulator would fit perfectly with Doha’s stated aim to develop its renewable energy potential.

The move is in line with plans first mapped out in Qatar’s most recent national development strategy, covering the period 2011 to 2016, which lists the establishment of an independent power sector regulator by 2014 as a key target.

“All countries will need private sector engagement in order to realise their renewable [energy] potential – the ideal being to create a competitive market and level playing field for providers,” Lahn said. “Establishing an independent electricity

As demand for power in Doha and indeed all of Qatar is only set to increase in coming years, the need for an independent electricity regulator is imperative, says an industry researcher. (Image Corbis)

Qatar set to launch independent electricity regulator in 2014

28 | The Edge

“A regulator is a priority

for creating the right investment environment.” – Glada Lahn, Chatham House.

sectors | energy & sustainability

Hydrocarbon trading

Middle East must revisit domestic gas pricing

and cogeneration regulator is an absolute priority for creating the right investment environment.”

Vital integrationIndependent regulators are viewed as vital by the private finance sector because they are intended to de-politicise any decision-making process that governs an industry. Even in a Gulf country with a system of governance such as Qatar, creation of an independent body would present the country as a safer destination for capital in the eyes of the international investment community.

The National Development Strategy (NDS) 2011 to 2016 suggests that any regulatory body covering electricity will also bear responsibility for the water industry, essentially bringing it in line with national electricity and water corporation Kahramaa.

“For conservation efforts in water and power to succeed, the government needs effective communications and stronger regulatory capacities,” the strategy states, “A key part of the robust demand management architecture will be the establishment of an independent regulator covering power and all aspects of water.”

The NDS makes provision for the fact that, under the existing system, which sees public works authority Ashghal also playing a role in water (see table), Qatar lacks the separation of the three functions of an infrastructure operator: policy-making, regulating and operating.

The Middle East is in danger of becoming an import centre for natural gas rather than a major source of new supply, despite the region’s plentiful raw resources, industry participants have warned.Hakim Darbouche, exploration and production commercial advisor at multinational energy company OMV, told the Arab Petroleum Investments Corporation’s (APICORP) second annual symposium in Kuwait in December that unless current domestic prices are adjusted “to reflect new regional gas market realities”, the gap between growing demand and now stagnant supply will grow.

The issue has appeared because, over a sustained period of time, domestic gas prices in countries including Qatar have been kept artificially low by a broad swathe of public subsidies designed to foster economic growth in the non-hydrocarbons sectors by leaving end-users with more money to spend on goods and services other than energy. The other side of this, however, is that, with end-users paying artificially low prices for energy, there is little incentive for firms to invest in the sector, outside of the behemoth state-owned national companies that have sufficient assets to play a role in the international export market.

If Darbouche’s timing is just, the benefit of such a policy on the collective private purse is on the verge of being usurped by the handicap on the energy sector as a whole. “Demand for natural gas in most countries of the region has grown faster than supply since the early 2000s,” Darbouche said. “The resulting gas deficit and pricing policy issues can no longer be ignored.”

Qatar sits on the second-largest reserves of natural gas in the Middle East region behind only Iran, but because of the international economic shackles that have long tied Tehran’s hands, Doha exports significantly larger volumes of gas.

“Most of the risk for reduced service levels rises when one entity is providing a service, setting the required standards for its delivery and monitoring compliance with those standards,” it states. “The potential consequence of such an arrangement is reduced service quality for end-users and, possibly, lower service standards in some sectors.”

A separate section of the NDS continues, “By 2014 Qatar will have established an independent regulator to help accelerate reforms of the water sector. As desalinated water is coproduced with power, these new regulatory arrangements will be integrated with those for power.”

Operator Role

Builds, manages and operates power and water

transmission and distribution networks

Defines requirements for power and water

infrastructure

Tariff and pricing management; requirements and use of treated sewage

effluent

Defines requirements for drainage network and

construction standards

Operator Role

Operator Role

Builds, manages and operates wastewater and drainage systems

Ashghal

Water

Kahramaa

Electricity

No Agency

Waste Water

Regulator RoleRegulator Role Regulator Role

EXISTING MODEL

Total Jan14.pdf 1 12/22/13 12:32 PM

Total Jan14.pdf 1 12/22/13 12:32 PM

30 | The Edge

sectors | energy & sustainability

Solar power generation should be “at the top of any economic policy in terms of industry creation” in the Middle East, vice-president of business development for Europe, the Middle East region and Africa at First Solar, Christopher Burghardt, has said.Speaking ahead of January’s World Future Energy Summit in Abu Dhabi, United Arab Emirates, Burghardt said, “The eyes of the world are on the region in terms of development of solar energy, with a lot of leading companies here making big investments. We believe that it will be one of the leading regions, if not the leading region, for solar energy in the future.”

Qatar is aiming to generate 20 percent of its energy from renewable sources by 2024. Only last month, Qatar’s electricity and water corporation Kahramaa unveiled plans to turn parts of Doha into a decentralised solar power generation network.

“We aim to optimise the utilisation of redundant flat surfaces in the infrastructure, such as the roofs of grid stations and water reservoirs, to generate a capacity of up to 200 megwatts by 2020 from solar sources,” Kahramaa’s technical affairs director Ahmed Nasser Al Nasser said at the Qatar Solar Summit in Doha.

Purchasers and suppliers of liquefied natural gas (lNg) entering into long-term agreements should take extra care to ensure price review clauses are drafted carefully to minimise exposure to contractual disputes, law firm McNair Chambers advised in december.In a note concerning LNG price review disputes, the law company said the LNG market is going through a period of “significant development on both the supply and demand side, which will make it difficult to predict with any certainty pricing trends and market requirements in the coming years and decades”.

Such market uncertainty would increase the likelihood of contractual disputes arising, which have been seen on a number of occasions over the past months, some of which have involved Qatar, the globe’s largest LNG supplier.

State-owned RasGas has been involved in arbitration proceedings with at least three utilities – Italy’s Edison, Belgium’s Distrigas and Spain’s Endesa – over the pricing of long-term supply contracts.

Most disputes have centred on a gas pricing structure index-linked to oil prices,

green energy

Solar power could boost region’s economies

lNg sector

gas suppliers must take care of overpricing clauses

But despite its resources, even in Qatar, the need for structural reform of the market has been discussed. It is considered unlikely that traditional energy supply contract structures could be used in future to satisfy regional demand across the Middle East and North Africa, as Five-Quarter Energy chairman and CEO Harry Bradbury told The Edge last July.

APICORP is a multilateral development bank owned by the 10 member nations of the Organization of Arab Petroleum Exporting Countries (OAPEC). The Qatar government holds a 10-percent stake in the bank.

Despite the perceived challenges facing the regional industry, the bank, along with Qatar’s investment, is faring well, with profits up 31 percent year-on-year over the first six months of this year. And recently APICORP announced a renewed focus on growing trade finance activities in the Middle East region.

This was spearheaded by the establishment of the bank’s first fund, the APICORP Petroleum Shipping Fund, a USD150 million (QAR546 million) investment pool aimed at growth opportunities in the petroleum product tanker charter market.

The symposium also discussed market trends and challenges faced by the industry against the background of ongoing political turmoil in parts of the region, and the expanding global map of oil and gas resources in light of unconventional hydrocarbon extraction.

High oil prices have fed into increased income for natural gas suppliers. (Image Getty Images)

which most gas consumers argue is an antiquated model that fails to take account of gas market fundamentals.

Consumers, in general, champion a gas spot-pricing structure, which does take fundamentals into account, while producers tend to support the oil-indexed model, which in recent years has resulted in comparably higher prices.

“demand for natural gas

in most countries of the region has grown faster than supply.” - Hakim Darbouche, OMV.

The Edge | 31

Contents: Key Qatar real estate trends in 2014 31. Is the Hamad International Airport ready for passenger flights 33. Qatar to regulate rising costs of building materials 34.

real estate & construction

The Edge examines the outlook for the office, retail, hospitality and residential real estate markets in 2014. by Farwa Zahra

w ith the start of 2014, Qatar is yet closer to the 2022 World Cup. As a natural consequence, the

country’s growing population will continue to impact its real estate dynamics, agree industry experts.

office rents to increase Unlike 2013, which remained stable in terms of office rents, 2014 may herald rental growth in prime areas such as West Bay. Asteco reports a number of rental deals closed for office buildings in West Bay during 2013 that will potentially lead to a decrease in available space, hence escalating the rents.

“Falling vacancy rates and limited prime stock under construction are creating potential for rental growth over 2014, particularly for smaller suites in high quality buildings,” said Mark Proudley, associate director for consulting and research at DTZ in Qatar, further citing the vacancy rates having fallen from around 16 percent at the start of the year 2013 to 10 percent at year-end.

While tenants are seemingly most interested in small office units, much of the occupancy growth in the Diplomatic District can be attributed to the government-related bodies leasing whole towers. Johnny Archer, head of valuation, research and advisory at Asteco Qatar, told The Edge, “The office sector, particularly in West Bay, has been assisted to a large degree by the migration of government bodies from other areas.”

In the second half of 2013, the office market was buoyed by the leasing of three entire towers in West Bay, said Johnny Archer, head of valuation at Asteco Qatar (Image Corbis)

Key Qatar real estate trends in 2014

32 | The Edge

sectors | real estate & construction

In the second half of 2013, according to Archer, the office market was buoyed by the leases that have been agreed on three entire towers in West Bay, which reduces availability to below 15 percent in Doha’s business district. The main challenge for 2014 is “to replicate such a performance as the market may have to rely on demand from private sector companies with smaller size requirements,”said Archer.

While the Diplomatic District has seen a high level of occupancy in 2013, the overall office sector in 2014 is still oversupplied, which, experts agree, would likely keep rents more or less stable.

More malls to openAccording to DTZ’s Property Times Qatar Q3 2013, Qatar’s retail trade reached QAR39.4 billion in 2012, recording an average growth of 14 percent per annum over the past five years. While Qatar’s retail market consists of malls, souqs, hypermarkets and standalone informal shops, the government’s focus, according to Al Asmakh Real Estate Development Company’s (AREDC) report for Q3 2013, is currently on malls.

“There is a large degree of exuberance in the retail sector currently with a large number of malls and retail facilities under construction and even more in the planning,” agreed Aziz Sharif, partner of Mannzili, a local online property portal.

Doha and connecting areas of Al Rayyan and Umm Salal have 13 operational commercial malls, with 10 under construction and a few in planning stage across the country. According to AREDC research, the current mall space will double to reach almost one million square metres of net leasable area within the next two to three years. “There is potential for organised retail stock to increase to 1.72 million square metres by the end of 2016, subject to all projects

Johnny Archer, head of valuation, research and ad-visory at Asteco Qatar, said that residential market showed highest growth in 2013.

under construction being completed,” said Proudley. Tracking the opening of two new malls Ezdan Shopping Centre and West End Mall in 2013, Archer said the “demand from prospective tenants for retail accommodation remains very strong for prime units in the larger shopping malls.”

More hotels to dilute sectorBy 2022, Qatar Tourism Authority plans to increase tourist arrivals by an average growth rate of 20 percent per annum. This will inevitably call for continued growth in the hospitality sector. With 106 hotel and serviced apartment properties in Qatar, DTZ estimates there are currently 16,500 keys in Doha. Although with a strong latent demand, the hospitality sector will remain oversupplied considering the high number of keys, which, Proudley suggested, have also led to falling rates as hotels face aggressive competition.

While there was a three percent growth in average occupancy rates for the first half 2013 compared to the same period in 2012, the increasing number of hotels in the near future will lead to underperformance, according to DTZ. “The market outlook for hospitality properties therefore remain relatively negative in the short to medium term,” concluded Proudley.

Accommodation demand to riseA natural consequence of population growth has been the intensity in residential demand. “Lack of new supply and rising demand has reduced availability and led

“landlords have already

taken the assumption of the increased demand as a fact and have begun pushing prices up.” – Aziz Sharif, Mannzili.

to rental inflation of [around] 10 percent over the last year,” said Proudley. Sharif predicted the rents will increase regardless of real population growth in 2014 since, “landlords have already taken the assumption of the increased demand as a fact and have begun pushing prices up.” Over the next 12 months, DTZ estimates that approximately 25 residential towers on The Pearl and a further nine towers in the Diplomatic District will increase supply by 7200 apartments. AREDC forecasts the demand during 2014 inclining towards maintained buildings for apartments and compound villas.

As for the sales side of the residential sector, Archer said that “there has been an increase in mortgage applications, and increase in sales prices evident in the second half of the year. We would expect this trend to continue in 2014”.

The potential retail space, in square metres, that Qatar is expected to have by the end of 2016, according to one

industry expert.

1.72million

The Edge | 33

real estate & construction | sectors

A general view shows the interior of the Hamad International Airport in Doha, slated to start passenger flights in January. (Image Reuters/Arabian Eye)

Infrastructure project

Is Hamad International Airport ready for passenger flights?

Doha’s new airport began its cargo operations from December 1, receiving its first cargo shipment from Europe to Doha for Qatar Petroleum.

The new airport “has the capacity to move 5,700 shipments simultaneously and to handle 1.4 million tonnes of cargo per annum by 2015, representing a 75 percent increase from the current airport,” Qatar Airways offered in a press statement.

HIA was first intended to have a soft launch with the operations of 10 airlines in April 2013, later delayed. While the airport stated its intended date of full operations somewhere in the fourth quarter of 2013, Transport Minister, HE Jassim Seif Ahmed Al Sulaiti in November announced the passenger flights start sometime in January 2014, according to Hukoomi’s media reports.

With large infrastructure projects in progress, such as HIA, there is always an element of ‘dark risk’, Anthony Hopkins, director of Institute for Infrastructure

As the Hamad International Airport (HIA) starts its cargo operations with one of the largest cargo terminals worldwide, is it ready to go fully operational in 2014? Farwa Zahra explores.

“one month, before

opening the Berlin Brandenburg Airport, contained 30 months of dark risk.” – Anthony Hopkins.

Studies in Qatar told The Edge, further defining the industry term as “the potentiality for unanticipated events of significance to emerge at critical moments to cause significant problems.” Berlin Brandenburg Airport, he cited, as an extreme example of such uncertainties.

That airport was scheduled to open in June 2012, but in May 2012, major problems emerged that prevented the airport operating. “As investigations progressed, more problems were uncovered and now the airport will not be opened until sometime in 2014. So one month, before opening the project, contained 30 months of ‘dark risk’,” he explained.

Similarly, other infrastructure projects are also vulnerable to such risks, which are not confined to a type or region. Such difficulties, Hopkins said, are a common feature of large complex projects regardless of the region.

Eventually, these risks can be offset by latest technologies. However, to realise its dream of hosting 2022 World Cup and adhere to its National Vision 2030, Qatar cannot afford excessive delays. “Qatar, and the GCC region in general, intends to commission so many [projects] in a short period of time that waiting for

management techniques to catch up is not an option,” said Hopkins.

Meeting the promise made in November to start cargo operations in December, it seems likely that HIA will soon commence passenger flights, thereby overcoming its dark risks, that kept it from the planned opening in April 2013.

34 | The Edge

sectors | real estate & construction

Construction costs

Qatar to regulate rising costs of building materials

Speaking with The Edge, Nick Smith, EC Harris partner and head of cost and commercial for the Middle East, said, “We anticipate that these costs will continue to rise. The volume of spend planned will put considerable pressure on the existing supply chain, which is small, and coupled with the necessity to import, most materials will be factors in these price rises.”

As the government is aware of the cost issue, Qatar plans to set up a committee with members from the Ministry of Development Planning and Statistics and the 2022 Supreme Committee, reported The Peninsula in late 2013.

Earlier in 2013, Deloitte reported technical director of the Qatar 2022 Supreme Committee, Yasir Al Jamal, as saying, “In terms of locally procured materials and specific issues related to raw material that Qatar does not have in abundance, there will be pressure on supply as we reach a construction peak.”

In November 2013, the Ministry of Environment scheduled a meeting with several government representatives to discuss the utilisation of recycled construction waste in buildings, roads and the construction industry in Qatar, which would eventually ease pressure on the demand of imported building materials, currently limited by a single port.

Smith explained some other options for Qatar to reduce these costs. “A Qatar-wide forward buying strategy of major materials should be implemented in conjunction with a phasing of projects review,” he said, adding that the reduction of barriers to entry for the supply chain will also allow more entrants and hence create a positive effect on the current escalation of prices.

According to EC Harris’ report for 2013 International Construction Costs: A Change of Pace, Qatar holds 15th position in the list of countries with highest construction costs.

Qatar’s position in the list of countries with the highest construction costs.

15

The Edge | 35

Contents: what Qatar’s new broadband plan means for consumers 35. Converging megatrends in consumer and enterprise technology 37.

tech & communications

Addressing the event, HE Dr. Hessa Al Jaber, Minister of Information and Communications Technology,

spoke about the challenges, pointing out that speed and affordability in both fixed and mobile broadband remain major issues in Qatar. “Most broadband users in Qatar

What Qatar’s new broadband plan means for consumersThe recently formed Ministry of Information and Communications Technology released the much awaited Qatar National Broadband Plan which outlines how access to the Internet and the services around its use will be improved.

subscribe to lower-speed packages,” said Dr. Al Jaber, “due to the high cost of faster services and a lack of awareness of the benefits associated with higher speeds.” She also noted that service providers around the world are struggling to respond to the rising demand for more bandwidth.

The document lays out a comprehensive 10-year plan with some of its targets to be met by 2016. The first is, that all residents in Qatar will have the ability to choose from retail providers when it comes to broadband, which are currently Ooredoo and Vodafone Qatar. The National Broadband Plan will also aim to provide affordable coverage to 95 percent of households by 2016, with access to speeds

of 100 Mbps for download and 50 Mbps for uploads. Businesses, schools, hospitals and government institutions will have access to at least 1 Gbps of symmetrical speeds. “We are explicitly targeting 100 percent coverage with speeds of at least eight Mbps in areas where transient workers live,” said Dr. Al Jaber.

To spur competition in the broadband market, Dr. Al Jaber announced that the Ministry of Information and Communications Technology (MICT) is in the process of establishing an independent telecommunications regulatory authority. She also added that efficient management of fixed and mobile infrastructures would be a priority.

HE Dr. Hessa Al Jaber, Qatar’s Minister of Information and Communications Technology, announced that the ministry was in the process of establishing an independent telecommunications regulatory authority. (Image ictQATAR)

36 | The Edge

Kyle Whitehill, CEO of Vodafone Qatar during a panel session following the release of the National Broadband Plan, also noted that duplication of resources was not ideal and would limit the speed of rollout in a country of Qatar’s size. Ooredoo, which began its fibre rollout before the creation of the Qatar National Broadband Network, recently announced that it had covered over 100,000 homes with its upgrade from copper wiring to fibre. In order to limit duplication, QNBN has already signed an agreement with Ooredoo for a 20-year lease of duct network access and other passive telecommunications infrastructure.

Part of the new National Broadband Plan will also be to expand the benefits of broadband by introducing new services that will drive adoption. Dr. Al Jaber also explained that digital literacy would be part of the mix to develop the market.

Many expect the national broadband plan will be a catalyst for growth in the ICT sector. Qatar’s 2015 National ICT Plan has the ambitious goal of doubling the sector’s contribution to GDP (QAR11 billion by 2015), and doubling its ICT workforce (40,000 by 2015). The competition and choice in the market between service providers is expected to drive down costs of products and services, and aid in the adoption of IT services by companies.

In addition to this, the ministry is also fast-tracking its e-government initiatives that will in turn contribute to the overall growth of the ICT sector. Dr. Al Jaber revealed that the Prime Minister had established a steering committee, headed by the MICT, focused on a National E-Gov Plan for 2020. Some of the services that can be expected include building permits, e-court management systems and public registration of properties.

In another significant move, Q-Post which holds the monopoly on postal delivery in the country, will be transferred to the Ministry this year: “It is our aim to bring the Qatari post office into the 21st century for good,” said Dr. Al Jaber.

As a first step towards the plan’s implementation, Dr. Al Jaber announced the formation of a supervisory taskforce responsible for coordinating the efforts of all stakeholders. “This multidisciplinary group,” she said, “which will have representatives from government agencies as well as the ICT industry, media, developers and other critical sectors, will monitor fulfilment of the initiatives, measure progress and ensure that all targets are met.”

sectors | technology & communications

Evolution of fixed broadband adoption in Qatar (,000)

DSL Fibre

2010

142

142

2009

132

132

2008

9595

2011

162

162

2

Q12013

152

4319

5

2012

157

3216

9

1%10 Mbit/s+

3%4=1-Mbit/s

29%1=4Mbit/s

52%256 Kbits=1 Mbit/s

Not sure 12%

Narrowband/Dial-up 3%

Evolution of mobile broadbandadoption in Qatar per access medium (,000)

Internet speeds in households with Internet access

mBB subsribersSeperate data cards (dongle, USB MODEM)

Source: MICT - Qatars ICT Landscape 2013: Households and Individuals

2010 1,091

77

2008 778

66

2012 1,163

103

Broadband in Qatar

The Edge | 37

technology & communications | sectors

Again, I want to stress it is not just Surface, it is Windows 8 tablets, that is what I would rather call it. All the enterprises see the huge opportunities coming in with BYOD, but they bring in unmanaged and unsecured risky devices to the enterprise.

what kind of challenges do you have selling CIos on technology?

Well there is an interesting change happening in the world of CIOs. I was responsible for cloud strategy worldwide for Microsoft for three years, so I spent a lot of time with CIOs in the early days of cloud, and I think the CIO today, in many companies is seen as the guy who costs the company money. Some companies get it and start to invest in IT. I think the CIO will become the most important person in the company in a few years because there is no company in the world that has a mission statement that says, we want to do IT. They do IT to bake cookies or something, to get their business going, and there is only one person in the company, in a cloud world in my view who can bridge between strategy, company objectives and what is available in the market.

why are they moving to the cloud?If you ask CIOs what the main reason is

for migrating to the cloud, it is not the cost. It is rather about being able to respond faster to market change. If you look at the world and how it has changed in the past 10 to 15 years, from having a big desktop to a phone which has five or six times more the processing power than the Apollo 13 which went to the moon. Enterprise mobility or mobility in general is changing the world, and fast.

Product development

Converging mega trends in consumer and enterprise technology Microsoft recently launched its new range of Surface devices in Qatar for enterprise customers. The Edge spoke exclusively with Michael Kogeler, the chief operating officer and chief marketing officer for Microsoft in the Middle East and Africa, about emerging trends in IT and its impact on the company.

There is no word yet on the consumer launch date for the product but reviews so far for Surface 2 have been favourable.Microsoft will be hoping it will do much better than the previous iteration which cost USD900 million (QAR3.27 billion) in write-offs due to struggling sales. The company has persisted not only with its foray into hardware but hedging on emerging trends in technology and creating a singular platform to support these trends.

Microsoft released an advertisement recently showing the Surface pitted against the iPad. Is this where you see the Surface fitting into the market?

For me it is very simple. The iPad is a consumption device, any Windows device will do that, but it will also allow you to work on Word, Excel, Outlook… it is a productivity device, and we believe very much in the freedom of choice for people. We have big devices, small devices with big screens or small screens.

Have you found that organisations and consumers are looking for choice when it comes to devices?

Yes, and I think that at the end of the day that is what is going to make us as a company successful. Yes, we have brought out Surface as first party hardware from Microsoft, but it is not that we want to conquer the world with Surface. We believe in an ecosystem of partners such as Dell, HP and Acer, because that is the

As more people use personal devices for work, the discussion today about what the consumer is and what the enterprise customer becomes blurry, said Michael Kogeler, COO and CMO for Microsoft MEA.

power of Microsoft. Sometimes I need a big screen to work, sometimes I need to use my phone. We also drive the same operating system across all the devices for familiarity and make sure that the data is synchronised across those devices using the cloud. That is the power of choice for customers and a big differentiator.

The Surface launch was for enterprise customers, could you tell us about that?

We are targeting enterprises with tablet solutions, there are big trends in enterprises with people using tablets, but also the commercial market. In the old days, you would get a desktop, or a laptop. People now say, ‘I have a tablet at home I want to use it at the office as well’. The requirements are changing, so naturally we are trying to help customers improve their productivity and to offer solutions. At the same time we focus on consumers. As a result, I think it is a blurry discussion today about what the consumer is and what the enterprise customer is.

what other trends do you see emerging in the workplace today?

Bring your own device (BYOD) is an interesting one, I spend a lot of time talking with customers about BYOD strategies. You need to think about these sorts of things as a company. I think the big thing with BYOD is a natural result of something else which is enterprise mobility, and actually mobility in general.

So, is it the enterprise market where you see the biggest opportunity for sales?

No I think both, we do not do consumer in Surface yet in Qatar, but we need to.

“I think the CIo will

become the most important person in the company in a few years.” – Michael Kogeler, COO and CMO Microsoft MEA.

38 | The Edge

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The Edge | 39

Contents: Confronting mental health issues 39 . Research outcomes of Qatar National Research Fund 40.

healthcare & education

Qatar’s Supreme Council of Health announced the launch of a new National Mental Health Strategy, to coincide with The world Innovation Summit for Health (wISH), a global conference held recently in Qatar, focused on healthcare, bringing together the public and private sectors, and academia.

A ccording to a document released by the Supreme Council of Health (SCH), the five-year plan will aim

to change the way mental illness is both perceived and treated in Qatar. The SCH report alludes to research that has not been published yet, which found that as many as one in five people in Qatar would be affected by mental illness at any given point. The findings also showed that three of the top five causes of disability in Qatar were from mental health issues.

At a panel discussion on mental health at WISH, the experts were all in agreement that the stigma of mental illness is a global challenge, although to varying degrees. “Mental health is not just an important issue in global health, but in fact lies at its very heart,” said Professor Vikram Patel from the Centre for Global Mental Health.

One of the aims of Qatar’s mental health strategy will be to implement a system that will reduce the ‘mental health treatment gap’, which is the deficit between the number of people utilising mental health services and those who require mental

Confronting mental health issues in Qatar

NokiaLumia CGC Jan14.pdf 1 12/24/13 5:26 PM

40 | The Edge

The goal is to deliver technologies that will support the Qatar National Vision 2030, said Dr. Abdul Sattar Al Taie, executive director for QNRF.

The amount provided to 29 research organisations based in Qatar, under

the National Priorities Research Programme, over the past five years.

QAR1.8

billion

sectors | healthcare & education

health services.Most countries ignore mental health,

said Dr. Shekhar Saxena, the director for the Mental Health and Substance Abuse at the World Health Organization. According to Saxena, on average, countries spend approximately three percent of their health budget on mental health, and the percentage for low-income countries is often less than one percent. In 2011, according to the Mental Health Atlas produced by the WHO, Hamad Medical Corporation Psychiatric Services represented 1.95 percent of the total health budget of Qatar.

Dr. Abdulla Mohd Essa Al Kaabi, the executive vice chief medical officer at Sidra Medical and Research Center, pointed out that Qatar was in fact one of the few nations

Investment outcomes

Research outcomes of Qatar National Research FundThe Qatar National Research Fund (QNRF), which provides grants for research in areas that are of national and regional interest, recently held its first research outcome seminar. Qatar has been investing heavily in research over the past few years, and most recent figures, according to Dr. Abdul Sattar Al Taie, executive director for QNRF, the value is around 2.8 percent of the gross domestic product. “Research is defining our future and is a tool for tomorrow’s advancement,” said Dr. Al Taie, “and it is essential for the country’s mission of transforming itself into a knowledge-based economy”.

Over the past five years, one of the QNRF’s programmes, the National Priorities Research Programme has provided research grants worth QAR1.8 billion to 29 research organisations based in Qatar. The goal is to deliver technologies that will support the Qatar National Vision 2030, added Dr. Al Taie.

The research outcome seminars are part of a new strategy announced earlier in the year to share details on the outcomes with stakeholders and the general public. While there was no public invitation for

presented findings from a three-year study that received USD745,000 (QAR2.7 million) from QNRF, on the use of cobalt catalysts to improve the performance of the gas to liquid conversion process. Another gas-related project, lead by Dr. Mert Atilhan, an associate professor at Qatar University, conducted a study on separating clean burning gas from heavy hydrocarbon impurities. This was also a three-year project, the idea being to optimise process performance, energy reductions, reduce any negative environmental impact, enhance safety and increase the yield.

The research outcome seminar is also an attempt to encourage new partnerships with government and industry in order to deliver practical applications to research outcomes, furthered Dr. Al Taie.

in the region to develop a strategy for addressing mental health issues. Both Patel and Dr. Saxena say that political leadership is vital in creating reform and catalysing growth of mental health awareness, adding that non-governmental organisations, families, advocacy groups, mental health professionals and researchers also have a role to play.

In fact many countries have begun to approach mental health through policies and plans as Qatar has done, the most recent being the National Mental Health programme in India. The Qatar National Mental Health Strategy report makes both a social and economic argument for investment in mental health, and estimates the economic costs of mental disorders at QAR1.7 billion per year. An indicative cost

study for the five-year strategy by the SCH puts the cost of implementing the plan at QAR1.5 billion. However, it is important to note that the estimate in the SCH report does not include any costs associated with the development of mental health services for single male labourers stating, “These developments and costs are part of a wider programme of reform for this section of the population.” General mental health prevention and promotion measures are also not part of the current estimate.

There are also strong indications that private sector investment in mental health will be encouraged. The entry of private sector clinics will mean individuals have the choice of where they can be treated and might also have a beneficial impact of increasing the quality of service.

the first seminar, future research outcome seminars will be open to the public, said a spokesperson for the QNRF. Creating awareness of the work done through QNRF grants are key, added Dr. Al Taie. The seminars will take place quarterly with scientists presenting their findings.

Much of the research presented at the first research outcomes seminar involved the oil and gas sector. Dr. Dragomir Bukur, a professor from Texas A&M Univeristy Qatar,

IPTC Jan14.pdf 1 12/12/13 9:34 AM

downstrQatar :The Future is

Is Doha’s investment in downstream hydrocarbon processes, manufacturing and exports crucial to its economic ambitions?

The Edge | 43

With hydrocarbon extraction flattening in Qatar, the nation must rely on the downstream sector if energy sector growth is to be sustained. However, while competition against the United States and other energy-rich countries is mounting, for Qatar, downstream is about more than winning a global marketshare battle, writes Jamie Stewart

I n the state of Louisiana, United States (US), in November 2013, the French energy project manager Technip was awarded an engineering and design contract for an enormous

gas-to-liquids (GTL) plant, to be developed in the southern state by South African energy and chemicals firm Sasol.

Alongside it, an integrated ethane cracker (‘cracking’ is an industry term describing breaking down hydrocarbon molecules for further use in downstream processing and manufacturing), at up to USD21 billion (QAR76 billion) will be built. The sprawling “world scale” downstream project, as Sasol referred to it, represents the largest single manufacturing investment in the history of Louisiana, and one of the largest foreign direct investment manufacturing projects in the history of the US.

At Ras Laffan Industrial City in Qatar, in December 2013, the state-owned energy giant Qatar Petroleum (QP) signed a memorandum of understanding with two Japanese companies, Zeon Corporation and Mitsui & Co., for the development of an integrated butadiene extraction and elastomer complex in the industrial city.

According to Oil Review Middle East, butadiene, an industrial chemical used as a monomer in the production of synthetic rubber, will be extracted from feedstock and then converted into high-value elastomers such as styrene-butadiene rubber and polybutadiene rubber.

Also referred to by QP as “world scale”, QP chairman and Qatar energy minister HE Mohammed bin Saleh Al Sada said, the project will “create new opportunities to develop small and medium scale enterprises and private industries in the downstream sector, as well as other automobile related industries”.

The race is onIn the world of downstream hydrocarbons, a global race is most definitely on. For Qatar, however, dominance against competitors such as the US to hold the largest downstream hydrocarbon market share is not ostensibly the end game. For Qatar, the downstream push is more about ensuring the growth of the domestic economy and the hydrocarbon sector while preserving a moratorium that is in place on further upstream development of the state’s natural gas resources – resources that may one day be required by Qatar’s next generation.

Between 2006 and 2011, not once did Qatar fail to record a year-on-year gross domestic product (GDP) growth in double digits, with growth peaking in 2006 at a huge 19 percent, nearly 14 percent higher than that year’s global average of 5.1 percent. Even in 2009, when the global economy was at its worst in the midst of the financial crisis, Qatar expanded its economy by 12

downstream hydrocarbons | cover story

eamQatar :The Future is

A visualisation of a methane molecule (CH4) which is the primary component of natural gas.

44 | The Edge

For Qatar, downstream

is more about ensuring the growth of the domestic economy and the hydrocarbon sector while preserving a moratorium on further upstream development.

cover story | downstream hydrocarbons

Qatar’s Minister of Energy and Industry, HE Mohammed bin Saleh Al Sada following the recent inauguration of the Helium 2 plant, which set Qatar as the largest exporter of helium in the world. (Image Reuters/Arabian Eye)

percent. It was only in 2013 that GDP growth dropped to single figures, although the six percent rate remains comfortably above that of many of the world’s major economies.

All through this phenomenal six-year period of double-digit growth, it was gas and to some extent oil, which fuelled Qatar’s economic success. And the influence of hydrocarbons on the economy is most exposed by last year’s contraction to six percent. It is no coincidence that this happened with the flattening out of Qatar’s natural gas extraction.

Moratorium upstreamQatar put in place a moratorium on further upstream extraction of natural gas reserves in 2005, to take effect after its long-standing production goal of 77 million tonnes per annum had been reached. The giant infrastructure required to make this happen was completed in late 2010, and production approached the magic number the following year. As a result, Doha can no longer rely on its traditional hydrocarbon engine room to power its wider economy – the government has said it expects a relatively conservative growth of just 4.8 percent in 2014.

A review of the policy had been expected in 2014, but it has since emerged that the moratorium is as good as certain to remain in place. A note from credit ratings agency Standard & Poor’s indicates it foresees an average annual gradual decline of six percent in oil production for 2013 to 2016, as Qatar’s fields mature. “While oil exploration campaigns are underway and could yield new fields, any additional production would likely not occur for some time,” stated research body, Oxford Business Group, in late 2013.

By 2015, Qatar’s non-oil-and-gas section of the economy is, for the first time in modern history, expected to occupy a larger share of GDP than the hydrocarbon sector, according to the Qatar National Bank (QNB) Group. This is by no means bad news for Qatar – it is firm evidence that the nation’s economic diversification programme is paying dividends – but what it means is that, for hydrocarbons to continue to grow and develop, the country must also diversify within its core industry, gas production.

downstream diversionsQatar is already involved in, or has plans to be involved in, a wide array of downstream hydrocarbon products, much of it

The Edge | 45

Caustic SodaEthylene Dichloride

Vinyl Chloride Monomer

Linear Low Density Polyethylene

Heavy Alkyl BenzeneLinear Alkyl Benzene

MethanolMethyl Tertiary-Butyl Ether

ChemicalsQatar Vinyl Company

Low Density Polyethylene

Source: Muntajat

SEEF Limited

Qatar Fuel Additives Company

Qatar’s DownstreamProduction

PolymersQatofin Company

Qatar Petrochemical Company

AmmoniaAqueous Ammonia

Fully Refrigerated Anhydrous AmmoniaUrea

Prilled UreaGranular Urea

Urea Formaldehyde

Fertilisers

Gulf Formaldehyde Company

Qatar Fertiliser Company


intended for export. The GTL sub-sector covers diesel, liquefied petroleum

gas, jet fuel, gas oil, gasoline, oils for advanced lubricants and naphtha, which has a range of industrial uses including plastics manufacturing. Qatar also produces industrial chemicals such as methanol, ethylene chloride and vinyl chloride monomer, as well as industrial gases, including the rare and in-demand element helium, which conveniently for Qatar is trapped in its raw state in concentrations of natural gas.

All of these downstream products can in turn end up in solid materials in wide global use, such as plastics, construction materials, and processed metals, or used as components in further manufacturing industries. In fact, the range of industries that Qatar’s downstream hydrocarbon products fan out into is vast in both its volume and diversity.

At the end of 2012, Qatar established Muntajat, a chemical and petrochemical marketing and distribution company,

If the hydrocarbons sector aims to grow at the rate of the rest of the economy, it must also diversify within its core industry, gas production. (Image Qatargas)

The amount that Qatar will invest in its chemicals and petrochemicals fields up

to 2020.

QAR

91billion

46 | The Edge

cover story | downstream hydrocarbons

underpinning the state’s efforts to establish itself as no less than, according to its press release, “the world’s pre-eminent chemicals and petrochemicals hub”. The launch was accompanied by news that the state would invest around USD25 billion (QAR91 billion) until 2020 in its chemicals and petrochemicals fields, with the aim of supporting and growing the industry towards a sustainable, diversified economy that would mark Qatar’s next decade as one dominated by downstream chemical and petrochemical growth.

A critical timePlans like these offer a good reason for the thinking behind Qatar’s decision to keep the upstream natural gas moratorium in place. The country is at a delicate time in the evolution of its hydrocarbons sector. With substantial new natural gas supply coming on-stream over the next few years in the US and Australia, the urge to exploit still more of Qatar’s most prevalent natural resource and maintain the nation’s position as the globe’s largest LNG exporter can be perceived as pressing.

But does Qatar want to be pushed into such a situation? To be forced to invest in new infrastructure, on its competitors’ terms, because it feels backed into a corner? It seems not. The counter argument is far stronger: by keeping more

of its natural resources in the ground, Qatar is investing in future generations.

And this is the path the country has chosen to pursue. Indeed, while the global LNG supply-demand balance is set to tilt in favour of the buyer, through its development of the sector and focus on exports via its expanded port and shipping fleets, Qatar is looking to thwart its competitors by forging into the various downstream markets – and the strategy is paying off.

Qatar has never hidden the scale of its ambitions. QP paired with international energy giant Shell to build the Pearl GTL project in Ras Laffan Industrial City – the largest such scheme on the planet, turning natural gas into cleaner fuels, allowing Doha to extend its export industries into other, cleaner sectors, on a global scale. However, Qatar’s interest also extends into lesser-known fields.

what goes up...One downstream product, and a case study that represents the wider Doha downstream strategy, and specifically, Qatar’s efforts to assert itself in a growing market, is helium. In partnership with Qatargas, RasGas brought its Helium 2 project online in June 2013, and officially opened it in December 2013. The new plant, in Ras Laffan Industrial City, can

At the end of 2012,

Qatar established Muntajat, a marketing and distribution company, underpinning the state’s efforts to establish itself as no less than “the world’s pre-eminent chemicals and petrochemicals hub”.

A review of the moratorium on the extraction of natural gas in the North Field was expected in 2014. However, it has since emerged that it is more than likely that the moratorium will remain in place. (Image Qatargas)

The Edge | 47


The responsibilities of big businessHydrocarbon firms, perhaps more so than any other, bear a responsibility to act in a socially responsible manner – because the extraction and processing of hydrocarbons and the generation of energy are inherently antisocial actions. They release carbon into the atmosphere and contribute heavily to anthropogenic global warming; energy involves heavy industry, it can be noisy, dangerous and polluting.

Daan Elffers is founder of consultancy EMG, specialists in corporate social responsibility (CSR) and sustainability issues. At the end of December 2013, Elffers chaired CSR Qatar in Doha, which tackled one of the big questions: how to put a value on CSR?

The diverse field of CSR brings together environmental matters, health and safety issues, community involvement, and so on. Elffers says demand for better performance in CSR is growing in all sectors, including energy.

A number of Qatar’s downstream companies are actively involved in the CSR sphere in one form or another. Qatar Fuel Additives Company was the first industrial operator to gain an environmental permit from the government allowing it to operate providing adequate environmental care measures were taken. Qatar Vinyl Company states it continually monitors air quality, groundwater, sea water and sea bed sediments in the vicinity of its plant, as does the Qatar Fertiliser Company; while Qatar Petrochemical Company has worked with local universities on environmental research initiatives.

But still, much more can be done, “The key question is, how quickly will companies react to meet that growing demand?” Elffers says, “On a general policy level, the [Qatar] National Vision 2030 is forward thinking and addresses CSR aspects, which means there are plenty of elements in place which could really help the country to play a leading role in the CSR field.

“On a reputation scale, organisations with strong CSR can do much better, too – and let’s face it, no organisation, or government come to that, can say they don’t care about their reputation,” Elffers adds.

The volume in cubic metres of helium that Qatar’s new Helium 2 facility can

produce annually.

38million

produce up to 38 million cubic metres, or 1.3 billion cubic feet, of helium annually. This brings Qatar’s total helium production capacity to 57 million cubic metres, or two billion cubic feet: a quarter of the world’s total.

Global demand is growing: “Future growth in consumption of helium is expected to be driven by demand from electronic manufacturers in Japan, China, Republic of Korea and Taiwan,” a RasGas spokesperson told The Edge. “Since 2000, world demand for helium has increased by around 20 percent.”

Going forward, global demand is expected to rise by approximately two to three percent annually in the medium-term.

RasGas chief executive officer, Hamad Rashid Al Mohannadi, echoed this sentiment at the launch of Helium 2 in Doha in December 2013. Responding to a question to how the additional supply of Qatari helium might affect the world market, he said, “Qatar helium fills a gap in world demand…for industries that use this gas,” adding that this demand is only set to increase in coming years. Al Mohannadi also added that when it comes to price, RasGas had secured the highest offers from three international companies and was thus focused not on marketing its helium produce but on management of contracts.

But even with Helium 2, RasGas, which is in charge of the operational running of the new facility is at the technical limit of what it can produce, “Liquid helium is being extracted from all 14 existing LNG trains at Ras Laffan which are currently operational,” the spokesperson continued. At the opening press conference HE Mohammed bin Saleh Al Sada also added that, though focus is for now on Helium 2, “we are thinking about and studying Helium 3.”

Thus, when it comes to helium and the many other downstream hydrocarbon manufacturing processes and products, Doha’s grand strategy is not dissimilar to the LNG plan it has pursued with great success. Step one, aggressively ramp up production; step two, beat competitors in supplying countries where demand is predicted to grow; step three, watch marketshare increase, and await the long-term challenge for that marketshare.

Continued on page 71

While the global LNG market is set to shift in favour of buyers, Qatar is pursuing a strategy of downstream diversification in an attempt to establish itself as “the world’s pre-eminent chemicals and petrochemicals hub”. (Image Qatargas)

AAMAl’S RECIPE FoR SUCCESS

STAKEHOLDER GAINS AND BEING PART OF QATAR’S GROWTH STORY:

“In addition to helping the country diversify away from the traditional oil and gas income streams, Aamal’s business approach has proved to be a source of strength, providing stability and a platform to take full advantage of opportunities as and when they arise,” says Tarek M. El Sayed, managing director of Aamal.

The Edge | 49

Aamal is a Qatari company with a wide variety of business interests ranging from cement blocks to electrical cables and from medical equipment to property management, among others. Given the diversity of its businesses, one natural question that arises concerns the projection of a unified business strategy and the group’s management strategy of the different business units within a single corporate vision. Talking to The Edge’s Aparajita Mukherjee, Tarek M. El Sayed, managing director of Aamal offers his opinions on the broad questions of group strategy, the micro issue of hiring the right people to drive the companies forward and the way he foresees the group’s growth prospects in the next five years.

Managed across four operational categories – industrial manufacturing, trading and distribution, property and managed services – Aamal has over 23 business units with

familiar companies and is justifiably one of the more diversified and fastest-growing conglomerates in Qatar.

That the strategy is working for Aamal is evident in its business results. El Sayed cites that the total net profit for the third quarter was up 7.1 percent to QAR237.2 million (as opposed to QAR 221.5 million in September 2012).

Is there a unity of vision that guides the various operations, which are also segmented into distinct business categories. “All our business units work together in synergy to achieve excellence in our activities by being transparent, mutually supportive and determined to exceed expectations,” says El Sayed adding, “Prior to any new business venture, we make sure that it is relevant to our overall business mix and will complement the operation of the other business units. We also look at a combination of growth opportunity, possibility of good profit margins and ensure that we add value to the Qatari economy.”

The corporate strategy, El Sayed says, is designed to identify key growth opportunities, capitalising on them through the deployment of capital and partnering with industry leaders, allowing Aamal to offer high-quality exposure to the Qatar growth story. He adds that it is important to the company that its business operation adds value to the community and the market. “In addition to helping the country diversify away from the traditional oil and gas income streams,” El Sayed says, “Aamal’s business approach has proved to be a source of strength, providing stability and a platform to take full advantage of opportunities as and when they arise.”

Aamal’s strategy concentrates on creating shareholder value by building sustainable long-term earnings growth and increasing

diversified group | business interview

50 | The Edge

total returns for shareholders. “Our growth record is a testimony to the strength of the platform we have created,” he says.

Being a Qatari-owned company, the distinctiveness of Aamal, according to El Sayed, lies in the fact that it has well-balanced diversified operations, some of them with over 40 years of existence in the marketplace, which places the company among the pioneers of Qatar’s economy. Aamal, he says, will continue to take advantage of contemporary trends locally and globally while also focusing on the needs of Qatar.

“The company is dedicated to helping create a developed country – a remarkable, advanced, and secure place for our people to live in for generations to come,” El Sayed says. In addition, “Aamal is one of the few companies in Qatar that offers such a powerful investment proposition for its investors.”

Commenting on the merits of its diversification strategy, he says, through diversification of its operations, Aamal seeks to deliver superior risk-adjusted returns. As a diversified group providing exposure to Qatar’s fastest-growing sectors, the company ensures that shareholders will participate directly in the remarkable growth of Qatar.

business interview | diversified group

One of the most diversified Qatari companies, Aamal picks its business expansion with a methodical eye, bringing a balance between shareholder returns and national growth agenda.

“It is Aamal’s goal

to pursue its medium-term growth strategy of moving into high-volume, lower-margin industrial manufacturing.”

The Edge | 51

The years of operating experience of some of Aamal’s companies.

40

Outlining the values of Aamal, El Sayed chooses clear vision, an ambitious dream, honesty, patience and consistency and adds the ones which, according to him, are crucial for family-owned businesses, “Family businesses must set clear guidelines of corporate governance and implement them. Professional management and perseverance are vital to family-owned businesses. While any company will face obstacles, there is more pressure on family-owned businesses to push these processes through.” Explaining it further, he says, this is because there is more stake involved in the success of the company – both the wellbeing of the family and the wellbeing of the professionals who serve the company. Working together, companies can develop and commercialise great ideas, to the benefit of each other, but more importantly our customers, consumers and society.”

Policies and proceduresExplaining the rationale and process of decision-making within the company, El Sayed says that it relies on effectiveness, is characterised by direct communication with operational management (facilitated by a flat structure), and has developed a shared services policy. This allows the divisional management to focus on the core business.

Aamal’s subsidiaries are managed as standalone entities and optimise on the management’s operational focus and responsibility. El Sayed says, “Clear segregation between management and ownership reinforces the best practice corporate guidelines. With these strategies, Aamal aims to be recognised as a leader and innovator in the industry sectors in which we operate.”

Gettco Home Appliances, one of Aamal Group’s companies. established in 2012, manages the home furnishing business of the group and is one of the leading home appliances brands in Qatar, with a wide range of products.

Doha Cables, a joint venture between Aamal and Elsewady Cables, was established in 1984 and is considered one of the oldest and successful industrial and trading businesses in the field of energy.


Reflecting on the short history of the company, since its listing on the Qatar Exchange (QE), in 2007, El Sayed says that consequent to the listing, Aamal became one of the largest publicly-traded companies in Qatar. He adds that with listing came higher exposure to international markets as well as international investors. The most significant changes were the increased emphasis on industrial manufacturing, introducing key ventures such as Doha Cables, the first cables manufacturing facility in Qatar and the recent move into consumer goods with Gettco home appliances.

El Sayed says, “While some of Aamal’s business units have been operating in Qatar for over 40 years since the company’s listing on the QE, we have continuously been committed to the highest standards of corporate governance and as we have continued to grow, our policies have been adapted to adjust to the continued expansion and accompanying changes within the company, Qatar and the region.”

52 | The Edge

City Center Doha, one of the flagship retail outlets in the city, is one of the earliest properties of Aamal. Home to some of the world’s largest brands, the mall, due to its central location and the fact that it houses leisure avenues, is one of the most often visited retail malls in the city.

Competition and human resourceIndustry leaders value competition since it improves standards for the company and its people. Commenting on the effect that competition has had on their corporate culture, El Sayed is of the opinion that it has “motivated us and our team to work harder”.

He adds that the competitive environment encourages Aamal companies to share skills and work together, allowing them to gain experience from one another. Companies in Qatar have a great opportunity, he feels, to gain experience from one another because the country is home to some of the best-known world leaders, “ones that we can learn from and [who] can help us to contribute to the national economy, while also doing so themselves. This is a major factor in our company’s progress and in the development of Qatar and putting the country on the global economic map”.

El Sayed says that the market and the management of the specific companies decide the pricing policy of Aamal. Citing the broad guidelines, he says, “First and foremost, we aim to be profitable in the interests of all stakeholders, such as our shareholders, employees, suppliers and other partners. Our policy, therefore, is to earn a return which secures the company’s future while being competitive. Our pricing policy ties in with our strategy of taking a market leadership position in the segments in which we operate and is therefore fundamental to meeting these objectives.”

The total net profit of Aamal for the third quarter of 2013.

QAR

237.2million

The Edge | 53

“Clear segregation between

management and ownership reinforces best practice corporate guidelines.”

If competition and pricing have a unified structure, so does hiring at Aamal. The recruitment policy aims to prioritise innovative spirit, honesty and integrity. El Sayed says, “Our team comprises talented and motivated individuals. Our managers have significant experience and strong customer relationships, and are often pioneers in their respective areas. Without a team of hardworking, innovative and honest staff, Aamal’s success would not be possible.” He adds that while a successful company must hire diligent and skilful professionals, it is also important for companies to understand that they must support their employees and look out for their wellbeing. “We hire the right people for the job and aim to be attractive and supportive employers,” he says.

Looking at the achievements of the company, and now that consolidation has already been achieved, Aamal’s objective for the next five to 10 years would be to play a determining role in achieving the vision that HH the Emir Sheikh Tamim bin Hamad Al Thani has to develop Qatar into one of the region’s leading economic powers. El Sayed elaborates, “Qatar’s remarkable economic development has made it one of the world’s fastest-growing and most successful economies, particularly as markets continue to diversify and the country’s infrastructure continues to develop.” He adds that Aamal is as determined as ever to play a major role in the realisation of this vision and to be a major beneficiary of Qatar’s success.

Aamal seeks to take advantage of the growth opportunities created by the Qatar National Vision 2030 and the 2022 World Cup and to leverage its position as a leading participant in the key economic sectors, he says. “It is Aamal’s goal to pursue its medium-term growth strategy of moving into high-volume, lower-margin industrial manufacturing.”


Outlining the values of Aamal, managing director Tarek M. El Sayed chooses: clear vision, an ambitious dream, honesty, patience and consistency.

Money matters: Cost analysis of

56 | The Edge

In the background of Qatar’s winning bid for the 2022 World Cup and the rapidly continuing rise in the expatriate population, the increased pace of planned and ongoing construction projects is

a logical consequence. However, with this development also come the perils of urban development toward the natural environment. To preserve its natural resources, while exploiting the growth opportunities, then, is Qatar’s best bet – making sustainability an unavoidable part of its future strategy.

In December 2013, the Qatar Green Building Council (QGBC) and the Qatar Society of Engineers signed a memorandum of understanding (MOU) to promote sustainability in the region. Through this MOU, joint research projects and outreach activities will be carried out to explore sustainable options in the country’s construction industry.

why go green?While the preservation of natural resources is a universal issue, the specific importance of sustainability for Qatar lies in the scarcity of water resources and the growing need for energy. Explaining Qatar’s position in light of its climatic conditions, Steven Humphrey, construction economics and finance advisor at QGBC, tells The Edge, “In a hot and arid climate, the careful use of scarce water resources is vital and must be optimised. Therefore, the use of grey and black water recycling is gaining influence.”

Similarly, “Energy is a finite resource as well, especially in

feature story | green buildings

“we’re seeing a movement towards

the adoption of sustainable design practices and approaches, often founded on the traditional Arabic designs of the past.” - Steven Humphrey, QGBC/AECOM.

Green buildings are undoubtedly environment-friendly, but how cost effective are they? Farwa Zahra explores views of industry experts in Qatar on the economics of green buildings.

Ibrahim Al Jaidah, CEO of Arab Engineering Bureau, is of the view that sustainability features should be enforced in Qatar through legislations.

a country which is developing as fast as Qatar is. Therefore, controlling and mitigating energy consumption is critical,” adds Humphrey, who is also the head of programme cost consultancy for AECOM in Qatar.

CEO of Arab Engineering Bureau, Ibrahim Al Jaidah, takes pride in being one of the three largest firms in Qatar adhering to Gord Sustainability Assessment System, which is a performance-based sustainability rating system. In the future, Jaidah believes, sustainability will no longer be a matter of choice. “In a few years

The Edge | 57

green buildings | feature story

from now, if you don’t know how to do the projects in a sustainable way, you will be out of the market,” says Jaidah, who expects and looks forward to a legislation enforcing sustainability in Qatar’s construction sector, adding, “we are hoping that eventually the planning department is going to put some regulations [in place], minimum regulations even on building houses, so that is where it will become legislation.”

Tim Cook, a Qatar-based environmental scientist, who is manager, Environment, at GHD, an Australian engineering, architectural and environmental consulting company, seconds Jaidah, saying, “To make a change, we have to see the benefit, or laws and regulations are put in place to mandate this change.”

Reflecting the significance of preserving natural resources, some of Qatar’s recent developments such as Qatar Foundation’s Education City, Msheireb Downtown Doha, the Marina District at Lusail and Energy City are committed to sustainable design practices in the country, according to Humphrey. Speaking with The Edge about the country’s progress towards creating green buildings, he says, “We’re seeing a movement towards the adoption of sustainable design practices and approaches, often founded on the traditional Arabic designs of the past.”

Breaking the mythAs the country strives to incorporate sustainable features in its latest construction and infrastructure projects, developers are seemingly hesitant to implement green credentials considering the high perceived costs of such projects. Issa Al Mohannadi, founder and chair of QGBC feels, what is missing from the conventional mindset is the fact that “sustainability isn’t just about protecting the local ecology; it is also about efficient management of our economic resources.”

According to the World Green Building Council’s (WGBC) 2013 report The Business Case of Green Building: A Review of the Cost and Benefits for Developers, Investors and Occupants, green buildings make economic sense for all key parties involved in a construction project. The research supports that though a green building does not necessarily need to cost more, when it does “the cost premium is typically not as high as is perceived by the development industry”.

Speaking with the industry experts, three views emerge on the cost effectiveness of green buildings.

DEVELOPER TENANTWhy would i want

to build this green building?

higher salesprice

health andwell-being

increasedproductivity

reduceddowntime

lower operatingcosts

lower maintenancecosts

increased occupancyrates

reduced vacancies

slowerdepreciation

lower exityield

increase marketvalue

rapid returnon investment

ability tosecurefinance

lower refurbishmentcosts

corporate imageand prestige value

compliance withlegislation and

CSR requirements

lowertransaction

fees

lower design andconstruction costs

quicker sales

Why would i wantto lease this green building?

OWNERWhy would i want

to own this green building?

Source: WGBC’s The Business Case of Green Building: A review of the Cost and Benefits for Developers, Investors and Occupants.

140,885The number of green buildings registered worldwide

1.1Billion Square Metres

Total are of green buildings registered worldwide

27,000 More than 27,000 companies worldwide are members of GBCs

98Countries have green building councils

affiliated with WGBC in 2013, up from 26 in 2007

Source: World Green Building Council Annual Report 2012/2013

Green buildings: Facts and figures

58 | The Edge

feature story | green buildings

58 | The Edge

Tornado Tower, located in Doha’s West Bay, incorporates latest sustainability features for the efficient use of energy. (Image Corbis)

Tim Cook, manager, Environment at GHD, says that Qatar has the potential to be a world leader in sustainability in the construction industry.

View one: operational costsThe initial higher costs of a green building are eventually offset by low operational costs in the long term. QGBC’s director Meshal Al Shamari mentions the results from the Baytna experiment, which involves the comparative analysis of a passivhaus, a residential green building, against an impassivhaus, a conventional residential unit, “The cost analysis for construction of Qatar’s first passivhaus, project Baytna, shows that significantly improved environmental performance may only require a relatively modest increase in capital costs for buildings,” he tells The Edge.

Ahmed Fouad, head of planning and risk management coordinator at a project of Consolidated Contractors Company (CCC) in Qatar, argues, “Sustainable buildings typically have lower annual costs for energy, water, maintenance or repair, churn and other operating expenses,” he explains.

View two: Capital costsHumphrey, who specialises in the area of economy and sustainability, breaks the myth of higher capital costs of green buildings, saying that most of the strategies employed in Qatar’s recent sustainable projects cut the capital cost.

However, he explains, a ‘hyper’ sustainable building with green credentials such as PV panels or grey water recycling does cost more. Either way, the cost premium does not come from the basic design, but from the features, which are added to the basic building to achieve a rating scheme score or meet a corporate goal. “Sustainable design does not by itself cost more in terms of capital cost, and when the costs over the lifecycle of the building are considered, there are potential savings,” furthers Humphrey.

Just as tenants or occupants can benefit from lower recurring costs of sustainable buildings, Fouad believes that evidence is growing in favour of owners and developers as well. “[The long-term] reduced costs do not have to come at the expense of higher first costs,” he says, adding that, “through integrated design and innovative use of sustainable materials and equipment, the first cost of a sustainable building can be the same as, or lower than, that of a traditional building.”

View three: Technical costsWhile some experts find green buildings cost effective because of low operational costs, others see lower capital costs as the reason behind its economic viability. Technical issues increase the cost of green buildings, some experts believe, which can be avoided with more experience and expertise.

Considering the relative novelty of green buildings in Qatar, an increase in capital cost may also result from the lack of expertise. The key to keeping the costs minimal, however, is to incorporate green credentials right from the design stage.

Similarly, insufficient planning may also keep a project from reaching the optimum level of operational cost efficiency. For this very reason, the idea of making old buildings sustainable has been a less explored territory for most developers in Qatar and indeed worldwide. While the costs for such renovations are high, there is only a limited number of sustainable features that can be added to a conventional building.

“We have seen some clients consider the inclusion of sustainable strategies when they are considering refurbishment on major renovation works. However, given the nature of the existing building fabric, these measures are sometimes very costly and generate limited returns,” says Humphrey, adding that in Qatar, “overall, there is still limited appetite to expend [additional] money on sustainable

The Edge | 59

green buildings | feature story

As founder and chair of Qatar Green Building Council, Issa Al Mohannadi believes that an important consideration behind green buildings should be efficient use of both environmental and economic resources.

“The first cost of a

sustainable building can be the same as, or lower than, that of a traditional building.” – Ahmed Fouad, CCC.

measures for existing buildings when the returns are limited.”

opportunityFouad predicts that the cost of green buildings is expected to decrease with time as sustainable building materials become cheaper with more advanced technology. WGBC’s research study tracks a reduction in costs of constructing green buildings states that, “There has been an overall trend towards the reduction in design and construction costs associated with green buildings as building codes around the world become stricter; supply chains for green materials and technologies mature, and the industry becomes more skilled.” The increasing economic viability of green credentials, hence, will serve as an opportunity encouraging developers. Some of the products directly linked to technology include temperature insulators, occupancy sensors, water-efficient fixtures, LED lighting, carbon dioxide monitors, variable air-volume systems and solar panels.

ChallengeThe effectiveness of green buildings cannot be denied. However, to make the practice mainstream in Qatar’s real estate and construction sector, a shift in the industry’s mindset is required. Humphrey believes that the lack of precedents itself works to discourage current and future developers from treading into this path, saying that a major issue is “the lack of future buyers considering sustainability as a key economic benefit, in terms of willingness to pay a premium for sustainability.”

Another obstacle in the way of green building is the attitude

of occupants. With utilities such as electricity and water available at low rates, little motivation is left to preserve natural resources. “From a purely economic point of view, the traditional arguments of long-term cost benefits are difficult to justify at present, given the low cost of utilities in the Qatari market,” says Humphrey.

Looking to countries where green initiatives were driven by resource scarcity or cost pressures, Cook says, “The price of fuel, power and water in Qatar is very cheap, and this may be a hindrance to the implementation of sustainable solutions.”

ProgressConsidering the fact that Qatar’s government is committed to sustainable design and construction strategies as government projects are now adopting either LEED or GSAS standards, Humphrey finds Qatar’s progress exceptionally positive concluding with an optimistic note, “In the next few years, we are expecting to see sustainable projects and developments as being the norm rather than the exception.”

While the application of sustainability, according to Cook, is still at its infancy here, “[it is] certainly on the agenda in Qatar with many of the large projects required to actively operate in a more sustainable way.” With more than 27,000 companies affiliated with green building councils across the world, sustainability is gaining momentum as organisations are beginning to see the value of their investment in sustainable practices, says Cook, adding that “Qatar has the potential to be world leader in sustainability.”

60 | The Edge

EMPloYEES really think

What yOUr

The Edge | 61

employee retention | business management

A recent employee study in Sweden showed that the worse an employee’s boss, the greater was

their level of emotional exhaustion and likelihood of heart disease. A study by Gallup showed that disengaged employees were reporting greater levels of ill health and higher levels of absenteeism.

Why is there so much bad management out there? Over the last five years, I have asked many executives for their views on this question. A common answer is that the system is to blame – dealing with corporate bureaucracy pulls us away from our role as a manager of people, and it does not reward us for being good at that job either. The few that succeed do so despite, not because of the rules and procedures within which they work. A second view is that there is a form of knowing-doing gap – managers know they should be delegating more and giving credit to others, but they struggle to do so because their default behavioural setting is one of control and self-promotion.

Of course there is some truth in both these answers. But I believe there is also a third reason for the paucity of high-quality management in many large organisations, namely that most managers have a remarkably narrow or ill-thought-out understanding of how their employees actually look at the world.

Imagine what would happen if managers could get inside their employees’ minds, and relate to their genuine motivations, needs, and fears. My guess is they would do a dramatically better job. Not only would

We have all had bad bosses, and we know how much damage they can cause in an otherwise healthy working environment. The London Business School’s Julian Birkinshaw examines innovative approaches to seeing the world through the eyes of your employees.

they know which buttons to press with each individual employee, they would also become less self-centred.

Ultimately, your role as a manager is to enable your employees to do their best work. It is hard to do that if you believe the world revolves around you. Inverting the lens, the TV show, Undercover Boss attracts 18 million regular viewers, and it provides important insights into the employee’s-eye view of management. In the show, a chief executive goes ‘undercover’ for two weeks in his own company, and he sees problems that he had not been aware of. He is typically astounded by the dedication and skills of his workforce.

Building insightBut what can you do to gain the benefits of going undercover without subjecting yourself to a reality TV show? My research over the last five years has attempted to provide an answer to this question.

Practically, it means taking a systematic approach to understanding your employees – building insight into what motivates them and how they experience their job, so that you can make their work more effective and fulfilling. I call this the employee value proposition. We know from many years of market research that what customers say and what they do are not the same. The same is true of employees, and perhaps even more so as they potentially have a lot to lose if they speak out.

So just as marketers often use ethnographic methods to divine the true motivations of their prospective customers, bosses sometimes have to use fairly creative tactics to cut through the hierarchy and understand their employees.

Individualising the relationshipEminent consultant Peter Drucker once wrote, “The goal (of management) is to make productive the specific strengths and knowledge of each individual.”

But the truth is, this rarely happens. In most organisations, senior executives design structures and roles, then allocate people to those roles. It is an efficient process, but by forcing individuals into predefined roles, these organisations do not make full use of their employees’ skills, and risk demotivating and losing them.

What yOUr

62 | The Edge

Focus, continues Nagarajan is on key first touch points when a new employee starts. “We survey them,” he says, asking, “are you satisfied with the office? The food? The transportation to work? Do you have the support you need? Often we can make small changes as a result of these surveys, and that creates a positive experience that encourages employees to stay. For people who have been with us [for] a while we also have a training programme ‘Wings Within’ for helping employees to make internal transfers into different functional areas.”

Through their eyesThere are many ways to improve our understanding of the people who work for us, all of which to some degree involve trying to see the world through their eyes. There are three reasons why this sort of mental transposition is so powerful in the workplace.

First, it allows you to understand properly what motivates and concerns the other person. Second, by playing up the view of the other person, you automatically downplay your own perspective. This approach helps you take your own ego and interests out of the equation – an important trait in a good manager. Third, putting yourself in the position of the other person makes you more human in their eyes. By changing how you relate to your employees, you are likely to see a reciprocal change in behaviour.

Of course, the idea of looking at the world through our employees’ eyes is not a new one. But by thinking through this approach in a systematic way, that is, by identifying the three steps of the employee value proposition and the things that can be done in each step, we are able to turn this old idea into a practical tool for improving the quality of management in our organisations.

business management | employee retention

Julian Birkinshaw is Professor of Strategy and Entrepreneurship at London Business School. This article is drawn from his new book, Becoming a Better Boss: Why Good Management is So Difficult, published by Jossey-Bass.

There is an alternative logic: first, hire a group of really good people, then build an organisation that makes full use of their skills. During my research, I came across executives who were trying to build the structure around their employees, rather than the other way round. For example, Indian technology company, HCL Technologies has developed a tool called Employee Passion Indicative Count (EPIC). This is a survey employees fill in to indicate how excited they are about various aspects of their work.

But EPIC also works as a management tool. “Each line manager reviews his employees’ EPIC scores,” explains Anand Pillai, former head of talent management at HCL, “and this opens up a conversation about what sort of work he should be doing. We discovered some employees wanted to do customer-facing work, while others showed a preference for back-office activities like testing software and doing documentation. In many cases, we are able to move people to jobs they are more excited about. In cases where we cannot make the match immediately, we help them build the competencies they need.”

This principle builds on the fact that structuring work around the individual skills of employees (rather than the other way round) is the foundation for a high-performance organisation. This approach is certainly more costly in the short term but when used, it typically leads to a higher level of engagement and higher quality outputs.

Managing the experienceOur day-to-day life at work is a set of experiences, some of which make us feel excited and involved, while others drain us

Your role as a manager

is to enable your employees to do their best work. It is hard to do that if you believe the world revolves around you.

of our energy and make us question our choice of employer. The best employers are conscious of shaping how their employees experience everyday life in the company. Of course largely their direct boss defines the quality of the employees’ day-to-day experience, as they are the person who defines what the employees work on, as well as setting the tone for how people interact with one another.

So for large organisations, managing the employee’s experience is a decentralised responsibility – it is up to each individual manager to do as they see fit. But in addition, some companies have sought to create mechanisms that institutionalise a commitment to a high-quality experience.

Consider the case of (24)7 Customer, headquartered in Campbell, California, and a provider of innovative customer service solutions to its clients. Most of its 10,000 employees work in service centres in India, the Philippines and Guatemala, countries where annual employee turnover rates are often as high as 100 percent.

The company’s cofounder and chief people officer, Shanmugam Nagarajan explained how he keeps turnover rates down to about half the industry average. “I spend about a quarter of my time on the road, meeting with around 500 front-line employees every quarter, listening to their concerns and following up with fixes. Transparency and accessibility are key values in the company. We have also put in place what we call ‘90 day surveys’. Our analysis showed that if new employees make it through the first 90 days, they are likely to stick around.”

I believe most

managers have a remarkably narrow or ill-thought-out understanding of how their employees actually look at the world.

The Edge | 63

Qatar Volunteer Network aims to create a solid volunteer ecosystem in Qatar> 68The Edge speaks exclusively with

Raed Chehaib, CEO of Interactive Business Network, about the Entrepreneurship in Economic Development Forum taking place in Doha in February.

Silatech’s senior career guidance manger, Salwa Atiyyah, discusses helping Qatari youth with their career development while serving and engaging their local communities.

business insightInside the minds of leading business figures

Steve Bainbridge of Al Tamimi says the law firm is attempting to bring in greater speciality to the market. He explains that there is greater deal flow in and coming from the region and that clients realise specialists are able to spot certain issues that the corporate commercial counsel might not. (Image Reuters/Arabian Eye)

Steve Bainbridge, regional head of sports law practice Al Tamimi and head of its Doha office, tells The Edge that there is massive potential for legal entities focused on sport in the GCC.

Enhancing the spirit of entrepreneurship in Qatar

> 64

66

Gulf legal firm sets up region’s first dedicated sports practice in Doha

64 | The Edge

business insight | start-up business

Entrepreneurship forum will empower Qatar’s private sector

Entrepreneurship is generally recognised as a

vital element in economic development and provides

stimulation for private sector growth and diversity.

It is against this background that Qatar University (QU), in cooperation

with Interactive Business Network (IBN), is organising

the Entrepreneurship in Economic Development

Forum to be held in Doha in February 2014. Speaking

exclusively to The Edge, Raed Chehaib, CEO of

IBN, says that the event will bring together a wide

panel of experts – from entrepreneurs to angel investors – who will not

only share their own success stories, but also

serve as a guide to budding entrepreneurs in Qatar.

what, according to IBN, are the aims of the forum?There is a big demand in the market, especially in Qatar, to empower entrepreneurship and the private sector both of which go a long way in preparing companies to face challenges that come with development of the economy. Basically, the forum will look at various ways of empowering the private sector in Qatar, which is seen as one step that will aid in the diversification of the economy, something

RISK TAKINg

that has been expressly stated as one aim by the government in its National Vision 2030 as well as the National Development Strategy 2011 to 2016. There is a gap between the vision that HH Emir the Father Sheikh Hamad bin Khalifa Al Thani has envisaged and its practical execution. The forum is an attempt to bridge this gap between what the vision wants to achieve and its execution in Qatar. The forum will bring together experts from chambers of commerce, Qatari Businessmen’s

Banks and financial institutions will also be part of the discussion panels says, IBN CEO Raed Chehaib, and that both traditional and non-traditional means of finance will be looked at.

The Edge | 65

start-up business | business insight

session that will have banks and financial institutions as part of the panel. There are two aspects of this panel: one looking at traditional finance and the other at non-traditional finance. The former will talk about retail banks and financial institutions. Non-traditional finance will bring to the fore the role that angel investors play in propitiating the spirit of entrepreneurship. We have quite a few angel investors coming in both from the region as well as the international markets.

The event literature says several workshops will be presented by notable professionals, academics, local and international experts. Can academics sow the seeds of entrepreneurship? And what value do you give to local entrepreneurs?

The conference will have panels, which will have both academics and entrepreneurs, local, regional and global. In fact, they will lead 80 percent of the panels. There is undoubtedly a synergy between academics and professional entrepreneurs and the idea is to benefit from this synergy. The panels will be called “How I did it” which will share the path that the entrepreneurs have taken to chase their success.

“The forum will bring

together experts from Qatari Businessmen’s Association and chambers of commerce to give their guidance, share their success routes and inspire the youth.”

Association and others from diverse fields (such as non-profit organisations, financial institutions, and training) who will give their guidance, share their success routes and inspire the youth.

why did IBN choose to partner with QU in this forum?

QU is a big, effective and neutral umbrella and experts who are part of the forum will willingly meet under this umbrella to discuss and share viewpoints on how to best take ahead the agenda of diversifying the economy and add more strength to the private sector.

what do forums of this kind do to make entrepreneurship a more acceptable career option, given that there is a prevalent mindset of going for safer options?

We all know that on the macro level there is a need to add strength to the private sector so that the national goal of diversification is attained. On the micro level, there is a general rule that the more risks one takes when it comes to one’s career (which comes with the spirit of entrepreneurship), the more the gains that one attains in return.

Through the various sessions in the forum, experts will address contrasting scenarios such as the increased financial gains one achieves with being the leader of a new venture versus those that go with just being an employee. The latter, it is well known, is a relatively easy choice with lesser gains, compared with being an owner, which improves the chances of one’s financial gains.

The experts, culled out of the local, regional and international markets, will talk to prospective entrepreneurs on the common mistakes that entrepreneurs make, the pitfalls that one needs to avoid, and the safeguards one needs to take to improve chances of success.

How will IBN partner with QU in making this forum a success?

Both IBN and QU have distinct roles to play. QU has the role of being an educator, serving as a neutral platform for experts to congregate and share ideas and experiences. IBN, on its part as a conference organiser, is entrusted with the responsibility of getting experts from around the globe, something that it already has a proven track record in, having organised forums such as the Qatari International Businesswomen’s

Forum, Arab Electricity and Power Forum (which was held under the auspices of the Arab League).

We are also responsible for creating and fine-tuning the marketing tools and the marketing strategy for the conference, taking care of the costs, which we aim to provide for through corporate sponsorships and auto finance it, and, to a limited extent, suggest to QU the broad scope of discussions in the various sessions, recommending steps to the government to enhance the spirit of entrepreneurship.

We will also have sessions on how the education system can foster the spirit, which, in effect, will be getting to the root of devising newer courses and how these can have an impact on student psyche.

what kind of inputs have you shared with QU in making the forum as broad-based in terms of participation as possible?

The forum will be an international forum and 70 percent of the speakers are international speakers. There are certain common traits that entrepreneurs all over the world share – risk taking, creativity, passion to be independent – which will help in shaping inspirational messages to the youth of Qatar.

We will also promote the conference through social media, which is a great strength that we already have.

We are also in touch with chambers of commerce worldwide to get their patronage and are in the process of talking to European educational leaders to present their advanced educational models, which can be emulated here.

There is one session within the forum called government and entrepreneurship. what would be the discussions in this session?

We will design this forum in such a way that it has the participation of local government leaders who will discuss whether Qatar is a conducive enough place for entrepreneurs or not; what the challenges are; and what steps can be taken to the next level so that some recommendations can come forth for policy changes at the government level.

Many a times, entrepreneurship is stunted by the lack of finance. Are you not targeting banks and finance companies to be part of the panels?

Yes, we are. There is a particular

66 | The Edge

business insight | legal services

gulf legal firm sets up region’s first dedicated sports practice in DohaOn the back of the phenomenal growth of sporting events, sports tourism and sports business in the Gulf Cooperation Council (GCC), at the Aspire4Sport exhibition and conference held in Doha in November 2013, regional law firm Al Tamimi launched the Middle East’s first dedicated sports law practice, which is to be based in the Qatari capital. With the Europe, Middle East and Africa (EMEA) sports business market recently valued at more than USD40 billion (QAR120 billion), there is massive potential for such a specialty legal entity in the Arab world, Steve Bainbridge, regional head of sports law practice, Al Tamimi and head of its Doha office, tells The Edge’s Miles Masterson.

As the head of Al Tamimi’s new doha-based operation, what is your background and what lead to the opening of this specialised office here?I was an associate at Al Tamimi a number of years ago [and] I have spent the last three years at Yas Marina Circuit in the United Arab Emirates as their general counsel. Al Tamimi approached me about the concept of opening and launching a dedicated sports law practice. It was a fantastic challenge and comes at a very poignant time, so it was something that I could not turn down.

One thing that was noticed and identified by the management sometime ago is that a lot of clients because of the increase in sport-related business have been asking for greater specialities. We have a large regional client base within both public and with private sector clients and international companies coming into the region, there is so much going on in this sphere [with the] 2022 World Cup as the flagship event. That is exciting and there is a lot of work to be done between now and then. However, if you take a quick glance around Aspire4Sport, there is so much more going on and we are seeing this as very sustainable.

SPECIAlISEd lAw

Steve Bainbridge, regional head of new Doha-based sports law practice, Al Tamimi describes sports law as “sexy” and tells The Edge there was no shortage of talented lawyers wanting to be involved in this new venture.

The Edge | 67

private and public clients, so you do need to be cautious because it is a relatively small market. In some respects, you do not want to conflict yourself. Every lawyer will tell you that conflicts of interest are strict; there are certain protocols you have to follow internally and externally, so you want to be cautious about taking one large client that will mean you are disqualified from taking dozens of others.

Especially with so many diversified conglomerates and government-owned entities in the gCC?

There is no question that there is a concern about conflicts, and that is one of the reasons why we are quietly confident that we can work for both, but we are going to have to be careful by a project-by-project basis.

How would you fit into the overall legal environment in Qatar?

In terms of sports, the dispute mechanisms tend to be a little bit different. Al Tamimi company practices in association with Mohamed Al Mari who is our first Qatari partner, so we have full rights of audience. However, I think that it is important to note that in some of the sports-related matters, the Court of Arbitration for Sports, tends to have a lot of established rules, so some of the mechanisms go through prefabricated arbitration scenarios and we have litigators capable of handling that and it is a discrete area. But in answer to your question, absolutely, we fit within that space and there will be no restriction across those areas.

obviously you are going to deal with private clients and private firms, but when the government or government related entities come into it, how does that work?

Obviously we have a duty of confidentiality concerning our clients, but in general...when there is an issue regarding conflict or who is or who should be working for, we deal with those along very strict guidelines...all of our clients get the benefit of the high standards that we set.

legal services | business insight

do you see doha, which was recently voted the number one sports tourism destination in the world, as having more long-term potential for this practice than other regional capitals?

Dubai, even Abu Dhabi, have a lot of more established sporting events, but I think that this signifies a trend that we are seeing in the market. Some of the very best global sporting events are being hosted and managed here within the GCC region. With the right people, the right commitment to doing it and the goals that are there, the passion, it can happen. I have absolutely no reason to expect the 2022 World Cup is not going to be the very best one yet, I am very confident that it is going to do very well, so I think that we do have that long-term potential. In addition to the group of professionals that we have got, we are generating enough work [to create] a great training ground for young local lawyers. Here, there are massive global events happening and smaller ones over and over again. It is a skill set that is transferable with anything in the sports area, so it is an exciting time for us with the young lawyers who are getting their first exposure here.

So obviously for many reasons there was a clear need for this type of practice not just in Qatar but the region?

There is more sophisticated work going on, there is greater deal flow and even if you take something as simple as a sponsorship agreement, this is something that clients have realised that if they have a lawyer who has dealt with 50, 60 or a 100 of these kind of agreements they are going to spot certain issues that...corporate commercial counsel has not and probably will not. So we are trying to start things in that side of the market, in terms of bringing in greater speciality, because at the end of the day there is greater complexity there and we have to deal with it whether we like it or not, and the clients will benefit.

Are there similar practices in the world from which you have taken your lead?

What we are doing is new to the region but it is absolutely not new. In North America, they have many, from boutique to large firms and they all almost have sports and event management practice groups specialised in these types of agreements.

In Western Europe, it is a similar case. It is true that in certain firms and certain times and places, they will be considered part of the broader commercial group [but] if you were to pick three of the top

10 law firms in the world, I am certain they would have a sports law tab on their website. It is really new in this region, largely because of vast quick growth that has come, that is really playing a little bit of catch up in global terms.

The deals are more complex and clients want to know about the return on investment. They want to know where that return is, there are various matrixes for capturing those numbers and finding out what they are, this is all part of it. The way that you target that is by having your initial investment done through a vehicle, whether it is contract or a suite of agreements or whatever your documentation is going to be, you do it and you make your investment count, you get the best from it that you can and you work through it as you can. So each time you do it, hopefully you get better and better at it and that is what we are trying to do for the clients.

where does the line lie between sports law, normal law and commercial law?

It is a very grey area, it is a blurred line and for us we think that is an advantage because we do employ a number of lawyers here. We are a GCC-based firm, we are not in the region for a short term, we do not come and go so we have that critical mass and specialists in all of these areas and the experience. Particularly when an international company comes in and they want a regional solution.

There are non-sports issues that will spin out of that so if someone comes to me with a sponsorship agreement, we build a relationship, they will get me on the phone a couple weeks later and say we have a construction issue here, or we have an intellectual property...because we are a large local regional firm, we can do that.

would you be dealing with both sides of the sponsorship equation, a big brand such as Nike sponsoring the Qatar National Football team, for example, then representing the football teams themselves, so both sides?

Absolutely. That is something that we gave a lot of thought to when developing the practice. We have a broad range of

“Some of the very best global sporting events are being hosted

and managed here within the GCC. ”

68 | The Edge

business insight | social responsibility

Qatar Volunteer Network aims to create a solid volunteer ecosystem in QatarIn an exclusive interview with The Edge, Salwa Atiyyah, senior career guidance manager at Silatech explains the rationale behind setting up the Qatar Volunteer Network (QVN), the value that it will bring to the youth and the lasting imprint it aims to leave on the psyche of the Qatari society. Having served in several countries in the capacity of an educator, Atiyyah’s role in Siltaech involves providing holistic, strategic and innovative programmes related to helping the Qatari youth succeed in their career development or entrepreneurship efforts, while serving and engaging in their communities.

“QVN provides

a professional matching

process between young people

looking for opportunities

and organisations looking for

suitable young qualified

volunteers.”

CIVIC ENgAgEMENT

Salwa Atiyyah, senior career guidance manager at Silatech said that QVN aims to engage the youth in the social and economic development of their communities.

The Edge | 69

working with a professionally-run volunteer network supported by quality supporters and stakeholders where their CSR funds will have a greater measurable impact.

what in your opinion will this network achieve for Qatari society?

In close cooperation with other volunteer organisations, the network will start to build the foundation for a solid volunteer ecosystem. Through their experiences in volunteering, young people become more caring and dedicated citizens and residents who can contribute towards the economic and social development of Qatari society. They will also gain valuable job skills and experience that will help prepare them for the job market.

How will a youth organisation benefit by joining the network?

Organisations focused on young people have a great reason to be part of the network, simply because of the access to volunteer opportunities that it will provide to them and their members. By bringing our various volunteer programmes together, we provide a much greater service and opportunity to young people in Qatar than if we operate them in isolation from one another.

social responsibility | business insight

How does the QVN propose to increase the volunteer numbers? The QVN is a Silatech initiative that aims to increase volunteerism in Qatar, by working closely with local partners and stakeholders to provide a professional matching process between young people looking for volunteering opportunities and organisations looking for suitable young qualified volunteers for their events. The network will be highlighting in its different messages and awareness campaigns the benefits that a young person will gain from volunteering on a personal level by giving attention to its role in college and career preparation. The network is intended to keep young people committed and loyal volunteers where they will ‘keep coming back for more’. They will receive many benefits, positively engage with their communities, as well as provide added value to the specific assignments they have volunteered for.

why did Silatech think about starting a volunteer network in place? Apart from youth involvement, which is not strictly in the domain of being employed, what other purpose will QVN serve?

As part of its mission, one of the major programme areas that Silatech works in is civic engagement. It aims to engage youth in the social and economic development of their communities, where volunteering represents one such involvement. The QVN is designed to complement already existing volunteer programmes and not compete with them. Because QVN aims to increase the amount and quality of volunteering in Qatar, it represents an opportunity as opposed to competition to any stakeholder. Despite the fact that QVN is a Silatech initiative, other organisations will be invited to be co-founders and strategic partners to build and lay solid foundations for the network. QVN will not duplicate efforts of the existing volunteer organisations, but rather to join efforts with them to work to fill in the gaps, thus creating a solid volunteer ecosystem in Qatar. A network of volunteering peers will allow them to actively share knowledge and best practice in volunteerism. It will facilitate each member’s reach-out to a wider youth audience in a co-branded professional manner. The network will have the power of the group, which can be leveraged by individual members to positively influence society.

what benefit, if at all any, does a volunteer get from the programme?Volunteer experience is as valuable as a paying job. It is a choice that is taken by

someone to commit part of his or her time to a cause. Usually, when we hear people talk about their experiences as volunteers, we think of how they make a difference in people’s lives and make the world a better place. However, any volunteer activity has a positive effect on both the volunteer and the recipient. In addition to showing the person as a committed, dedicated and caring individual, volunteering will help the young person acquire new skills, build a network of professional contacts, develop a list of references, explore different career options, and have additional material to add to their resume. Moreover, the volunteer will have access to training that will help strengthen skills required by everyone who wants to enter the job market.

Can you tell us about the web portal to be set up for the QVN?A unique feature of QVN will be the setting up of a comprehensive web portal

which will be a ‘one-stop shop’ for use by both volunteers and organisations needing them throughout Qatar. The portal will be a place where young people can connect with different volunteer opportunities through a calendar of events that will list all the available volunteer opportunities. They will be able to sign up, receive training, and access volunteer opportunities, with a number of materials on how to maximise their volunteering experience. Also, organisations in need of volunteers will be able to create an event and invite volunteers to register. Member organisations will also be able to access a range of collaterals to set up or improve their existing volunteering programmes.

Is there any scope for corporates getting involved by way of an increased focus on their corporate social responsibility (CSR)?

There are many ways that a company’s CSR department can positively interact with the QVN. Many CSR departments may already have well developed ideas of what programme areas they choose to focus on such as the environment, health issues, children, women empowerment and many more. Companies can bring these project ideas to QVN executives and a tailored volunteer programme can be developed. Most CSR departments will value

“QVN is designed

to complement already existing volunteer programmes and not compete with them.”

70 | The Edge

Acer has announced the availability of its first touchscreen Chromebook, the Acer C720P. The new C720P provides 11.6-inch HD LED back-lit display to take advantage of the Chrome interface. The multi-touch display has a 1366x768 resolution, and the device is powered by an Intel Celeron 2955U processor based on the Intel Haswell micro-architecture. The processor enhances battery life and the 32GB SSD provides a fast boot time of less than seven seconds.

productsand reviews

Fifty One East and Sony have launched Cyber-shot DSC-QX100 and DSC-QX10 lens-style cameras in Qatar. The cameras are compatible with the new Xperia Z1 and other smartphones making your mobile a high-quality camera. The DSC-QX100 and DSC-QX10 attach in a moment with the supplied smartphone attachment that fits several popular smartphone models. Connection to your phone is made via WiFi and the latest version of Sony’s PlayMemories Mobile application. The connection lets you fire the shutter directly from your mobile phone.

By Atelier has introduced four collections of covers for the iPhone 5s, which are designed in Europe and hand-assembled by in-house artisans. Built with a selection of high-tech materials frequently used in haute horlogerie, the 316L stainless steel chassis is affixed to the iPhone 5s at the time of purchase. The four collections feature eight models with different colours, textures and detailed finishing. A recurrent A-frame motif appears on the chassis design and ‘By Atelier’ is engraved along the top edge of the chassis frame.

“Now the world is smaller, our opportunities are greater.” The book Superconnect: How the best connections in business and life are the ones you least expect begins questioning how easy or difficult it is in today’s world to connect to other people. Bringing in the idea of six degrees of separation, Richard Koch and Greg Lockwood establish that the world may be big or small depending on the person, as some people are better connected than others.

Recognising the importance of networking, the authors introduce weak links – contacts other than family members and close friends – as more wide-ranging, Koch and Lockwood call users of these links ‘superconnectors’. A significant trait of superconnectors, they say, is their ability to invest time in cultivating and maintaining a large number of weak links. While acknowledging the benefits of connections, the book prefers the quality of these connections to their quantity. Stated differently, right connections are better than more connections.

With the Internet, the possibility of weak links has further increased through virtual hubs. While these outlets have their own value, the authors warn that these hubs can diminish time in the real world, hence reinforcing the importance of face-to-face communication. Giving examples from the real world, the authors encourage readers to learn the art of becoming superconnectors. Spread across 264 pages, the book features a mix of narratives, making it an interesting read, particularly for the businesspeople who need to network as a part of their daily routine.

Sony Cyber-shot

Available at Virgin Megastore for QAR79

By Atelier iPhone covers

Read it: Superconnect

Acer Touchscreen Chromebook

The Edge | 71

SpilloverContinued from page 47

Qatar: The future is downstream

According to QNB Group, by 2015 the non-oil and gas sector is expected for the first time in modern history to account for a larger share of GDP. (Image Qatargas)

The economic option?And that challenge will come. With the US ramping up domestic gas and oil production via its shale resources, which includes a drive to begin LNG exports, and Australia about to challenge Qatar’s dominant share of the LNG market, downstream opportunities for both countries will naturally follow.

Indeed, Qatar may already have an advantage in terms of market economics. For example, in December 2013, Shell in the US revealed it was to shelve a proposed 140,000 barrel-per-day GTL project, suspending any further work, citing the development cost, uncertainties on long-term oil and gas prices, and the company’s strict capital discipline. “We are making tough choices here, focusing our efforts and capital on the most attractive opportunities in our worldwide portfolio to add value for shareholders,” said Peter Voser, chief executive officer of Shell. And the location of the project? Louisiana, southern US.

Regardless of what this says about the country’s current strategic and, therefore, economic advantage in the sector, Qatar’s other natural gas production giant, Qatargas, insists the encroaching supply-side competition is welcome. “Increased LNG supplies from various regions are required to balance the global market over the long-term and facilitate the continued strong growth in LNG demand worldwide,” a representative told The Edge. “To that extent, Qatargas welcomes the planned increases in [the] US and Australian exports as benefiting the entire LNG industry.”

72 | The Edge

will be when Doha’s new airport opens for passengers. Let’s hope its eventual opening is smooth, for everyone’s sake.

7. Exit visas: There has been pressure from the International Labour Organization for Qatar to end the exit visa system. I don’t see it being abolished, but perhaps it is time for a review.

8. Sponsorship: How many stories do you hear about employees unable to leave a job or to get a no-objection certificate? Should you have to leave the country just to leave a job?

9. Migrant workers: Internationally, it is one of the issues that define the country. These are the people who are physically turning Qatar’s vision into reality – and their welfare and remuneration should arguably be bigger priorities.

10. Healthcare: The facilities are good, but attracting and retaining high-quality staff has been a problem. What can health businesses do to address high staff turnover?

11. Personal safety: Unfortunately, more bad things are becoming apparent – violence, even murders. To feel safer, people need as much transparency and information as possible.

12. Schools: I have written about this before, but can we have some real investment in education? It’s a necessity, not an option.

13. Media: As a journalist, my challenge to the local media is to give us the information we truly need, and fewer press releases. Dig into the important local issues which people want answers to.

14. Integration: The ‘One Love’ campaign during National Day was a concerted effort from the Ministry of Interior to forge unity between citizens and expatriates. It showed the government acknowledges the work that needs to be done – but let’s make it an everyday thing.

the view from doha

Kamahl Santamaria is a Doha-based news anchor with Al Jazeera English and host of the channel’s business and economics programme Counting the Cost.

14 THINGS FOR 2014What important things does Qatar need to focus on in 2014? Kamahl Santamaria has some ideas.

I think it is safe to say that many of us have given up on the noble ideal of the New Year’s resolution. It looms each year with the best of intentions, but rarely is it fully acted upon as we intended.That said, the start of a new year does give you that brief moment of clarity

to think about what could be achieved in the coming 12 months. Some might seem trivial, but I always believe it’s the little everyday things that will improve the quality of life here in Qatar, So, here goes:

1. world Cup 2022: This needs to be sorted. Someone – be it FIFA or the Qatar 2022 Supreme Committee – needs to decide if it will be a summer or winter tournament, before the uncertainty causes even more animosity.

2. Alcohol: Is it time for a firm decision one way or the other? Like it or not, many businesspeople, tourists and expatriates want to drink here – and the goalposts on consumption seem to keep moving.

3. Communication: The alcohol issue is a good example of a lack of communication. Decisions are made, but only seem to become known through blogs and social media. Official news is just not as forthcoming as it needs to be.

4. Traffic: Keep moving forward. The second half of 2013 was painful, but things have definitely improved. Not the time for a backwards step here.

5. Road safety: Efforts have been made, but why aren’t they making a difference? Driving is as reckless as ever and lives are still being lost. Who or what else can be enlisted to make an impact?

6. Hamad International Airport: It has started receiving cargo, but the test

Foreign workers wait for bus at a construction site in Doha – health, welfare and remuneration of Qatar’s expatriate labour should be a priority, argues the columnist. (Image Reuters/Arabian Eye)

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- QATAR’S BU

SINESS M

AGAZIN




THE FUTURE IS







RECIPEFOR SUCCESS



the edge jan 2014 (issue 51)

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