Qatar Today October 2016 by Oryx Group of Magazines

inside this issue October 2016 / Vol. 42 / Issue 09

COVER STORY

32 THE END OF OIL DOMINANCE?

Qatar Today focuses on the most defining factor in the economy of Qatar and its relevance today.

41 FOOD SECURITY

Can organic farming be Qatar's solution to the persistently harsh climate in its quest to reach the National Vision 2030?

48 BIG DREAMS, BIG DATA

Qatar Today finds out how QCRI is bringing the big data dream a little closer through the home-grown RHEEM system.

52 MELTING POT OF CULTURES

Qatar Today spoke to Mark Thomson, ambassador of Internations, about his journey into this community and what’s keeping him on his toes.

66 THE FORCE OF A STYLISED GALE

Qatar Today drives Levante, the latest offering in the SUV segment completing the product lineup from Maserati.

70 SABRE-ING QATAR

Qatar Today talks to Daniel Naoumovitch, Sabre Travel Network Middle East (STNME) CEO since 2005, about the company’s latest applications and upcoming plans for Qatar.

78 THE STRANGERS NEXT DOOR

QT Take reviews the latest novel by Doha-based author Mohanalakshmi Rajakumar, No Place for Women.

inside this issue October 2016 / Vol. 42 / Issue 09

12 THE VICIOUS CIRCLE CONTINUES

Qatar Today discusses with experts if the key players of the oil industry will ever reach a midpoint soon and if they do, whether it will make a difference to the economic climate?

18 QATAR’S BANKING SECTOR SHOWS RESILIENCE

Despite showing significant growth, recently released figures for the first half of the year reveal mixed feelings for the banking industry earnings.

20 THE COST OF GLOBAL TRADE

The impact of export controls and sanctions regulations on the movement of goods across the supply chain is a growing area of concern for companies around the world.

24 THE MIDDLE EASTERN GAME OF THRONES

This summer’s events have led some to conclude that improved relations between Turkey, Iran and Russia is paving the way toward a trilateral alliance. Qatar Today finds out what experts say.

28 THE SWF THAT'S NOT SHYING AWAY

Qatar has a cautiously hawkish eye on global acquisitions, especially when it comes to real estate and hospitality segments.

56 ROAD TO MARRAKESH COP 22

If COP 22 in Marrakesh is not successful, the Paris Agreement may become the next Kyoto protocol.

60 THE POWER OF ONLINE REVIEWS

and regulars 06

NEWS BITES

BANK NOTES

REALTY CHECK

O & GAS REVIEW

TECH TALK

MARKET WATCH

A UTO NEWS

DOHA DIARY

A new academic article examines the precise ways platform and product characteristics shape the effects of eWOM, providing crucial insights for companies on how to manage it better.

PUBLISHER & EDITOR IN CHIEF YOUSUF BIN JASSIM AL DARWISH MANAGING DIRECTOR JASSIM BIN YOUSUF AL DARWISH MANAGER DR. FAISAL FOUAD EDITORIAL MANAGING EDITOR SINDHU NAIR DEPUTY EDITOR IZDIHAR IBRAHIM SENIOR CORRESPONDENTS AYSWARYA MURTHY UDAYAN NAG KARIM EMAM CORRESPONDENTS AARTHI MOHAN KEERTANA KODURU ART SENIOR ART DIRECTOR VENKAT REDDY DEPUTY ART DIRECTOR HANAN ABU SAIAM ASSISTANT ART DIRECTOR AYUSH INDRAJITH SENIOR GRAPHIC DESIGNER MAHESHWAR REDDY PHOTOGRAPHER ROBERT F ALTAMIRANO MARKETING & SALES MANAGER SAKALA A DEBRASS TEAM SONY VELLATT DENZITA SEQUIERA MATHEWS CHERIAN ANIS MANSOURI NISHAD N P EVENTS OFFICER GHAZALA MOHAMMED ACCOUNTANT PRATAP CHANDRAN DISTRIBUTION DEPARTMENT ESLAM ELMAHALAWY BIKRAM SHRESTHA ARJUN TIMILSINA BHIMAL RAI BASANTA POKHREL PRADEEP BHUSAL

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from the desk Over the last few months, many of our friends, longtime Doha residents who have seen the country through its best years, have had to pack their bags and leave. Qatar Petroleum, the state-owned public corporation responsible for all oil and gas activities in the country, has been implementing its restructuring process, a process which QP’s CEO Saad Sherida Al Kaabi called “right-sizing”. As part of the cull, several long-standing and experienced staffers, including those over the official QP retirement age of 60, have apparently had their contracts terminated. Many of our friends who bid farewell to the country and lifestyle they were used to did so with a smile, with memories of a life well lived in a country at peace. They bore no grudges towards the country that suddenly realised that it was spending beyond its means. A realisation that dawned late on policy-makers with the drop in oil prices, an event in which the citizens had no role to play. This set me contemplating on the extent to which oil, the commodity to which many countries in the Middle East have pegged their economy, has affected each one of us. The cover story of the October issue of Qatar Today is a spin-off from this, the dip in oil prices and the role that oil has played in our lives. The story was completed ahead of the OPEC decision to cut production but even that stance is seen as misleading due to a lack of coordination among OPEC members and the fact that an agreement to freeze production levels would be increasingly difficult to enforce. This brings to light a vicious oil circle; another story that we bring to you this issue. While oil seems to feature in most of our conversation, Big Data is getting highlighted too as the next big thing to hit the tech sector. Qatar, which is never behind in anything big and technology-based has made headway in this segment too and we bring to you, a success story from Doha’s Qatar Computing Research Institute. Read on and get ready for the winter rain which is predicted to hit the Doha-shores soon.

SINDHU NAIR Managing Editor

affairs > local OPEC AGREES TO REDUCTION IN OIL OUTPUT

NEW VISA RULE TO BENEFIT TRANSIT PASSENGERS

AFP / YE AUNG THU

AFP / RYAD KRAMDI

MOHAMMED BIN SALEH AL-SADA (C), Minister of Energy and Industry of Qatar, arrives for an informal meeting between members of the Organization of Petroleum Exporting Countries (OPEC) in the Algerian capital Algiers, on September 28, 2016. Ryad Kramdi/AFP. OPEC agreed to cut down its oil output for the first time in eight years.

OOREDOO REPRIMANDED FOR “ANTI-COMPETITIVE CONDUCT”

n yet another announcement for the benefit of tourists in the country, Qatar Tourism Authority (QTA), Qatar Airways (QA) and the Ministry of Interior (MoI) came up with a new visa rule last month. Passengers with a minimum transit time of five hours at Hamad International Airport (HIA) will be able to stay in Qatar for up to four days without applying for an entry visa ahead of time. “Whether travelling for business or leisure, we want to enrich the journey of all of our passengers and are restructuring our fares to reflect this initiative and to promote stopovers to travellers,” said Qatar Airways’ Group Chief Executive Akbar Al Baker in a press statement. Earlier, in August this year, QA, QTA and VFS Global Group had signed a deal to increase the number of visitors in the country.

8 > QATAR TODAY > OCTOBER 2016

The Communications Regulatory Authority (CRA) rebuked Ooredoo, Qatar’s largest telecom provider, for not giving rival firms access to its infrastructure. By refusing to allow these groups access to its ducts, Ooredoo “prevented development of competition,” the CRA ruled in a 41-page order. “In doing so, Ooredoo is likely to have maintained artificially high prices for consumers.” It also added that Ooredoo’s actions have had a negative effect on Vodafone and Qatar National Broadband Network (QNBN). Meanwhile, Ooredoo hit back at CRA saying that QNBN made “illicit use” of its ducts. It further added: “the CRA has opted to make this commercial dispute into a public discussion, so Ooredoo is compelled to make the facts public.”

QATAR PLANNING ITS OWN WALL STREET

In an effort to promote itself as the financial hub of the region, Qatar Financial Centre (QFC) will relocate to Msheireb Downtown Doha. The initiative was announced last month by Yousef Al Jaida, executive head of QFC.

“

his relocation is part of our commitment to support Qatar in its efforts to diversify national income sources by facilitating the incorporation of new companies in a competitive business environment and helping local companies expand,” said Jaida. “The aim is to improve Qatar’s financial standing and create Doha’s version of Wall Street or Canary Wharf,” he added.

DESERT CAMP FOR WORLD CUP FANS Keeping in mind the budget of football fans and to provide them with the local ambience, Qatar’s World Cup organisers are planning temporary villages in the middle of the desert.

nnouncing a tender to build the pilot fan village, Supreme Committee of Delivery & Legacy’s (SCDL) technical manager Abdulaziz Ali Al Mawlawi said: “This type of accommodation is a great way to experience Qatar and the Middle East, giving fans the option of a tournament experience which will showcase the best of culture, traditions and unique landmarks of our country.” Al Mawlawi also added that there would be different types of camps to suit all budgets.

AL ATTIYAH MEETS ERDOGAN QATAR’S MINISTER OF STATE FOR DEFENCE AFFAIRS, HE DR KHALID BIN MOHAMED AL-ATTIYAH, MET TURKISH PRESIDENT RECEP TAYYIP ERDOGAN DURING HIS VISIT TO TURKEY LAST MONTH. THE MEETING FOCUSED ON IMPROVING THE BILATERAL TIES BETWEEN THE TWO COUNTRIES.

AMNESTY RULE LEADS TO MASS EXODUS

he Ministry of Interior’s Search & Follow Up department witnessed large crowds last month as people started taking advantage of the amnesty rule introduced by the government. According to it, illegal residents in Qatar can leave the country within a three-month period (September 1 - December 1) without facing any penalty. The MOI also extended the timings for Qatar amnesty seekers. 9 > QATAR TODAY > OCTOBER 2016

affairs > local

QATAR SPENDS QR1.8 BILLION YEARLY ON DIABETES TREATMENT

SLUMP IN QATAR'S FOREIGN TRADE SURPLUS

peaking at the Qatar Diabetes Leadership Forum last month, Minister of Public Health HE Dr Hanan Mohamed Al Kuwari said that the country spends QR1.8 billion every year on treating diabetes and its complications. She further added that the annual cost of treating the disease is likely to rise to QR4.9 billion by 2035 and QR8.4 billion by 2055.

ACCORDING TO DATA PROVIDED BY THE MINISTRY OF DEVELOPMENT PLANNING AND STATISTICS, QATAR'S FOREIGN TRADE SURPLUS DROPPED BY

35.7% QR8.6

FROM LAST YEAR, TO

BILLION IN AUGUST. QATAR REDUCED ITS EXPENDITURE ON BUILDING HEALTHCARE FACILITIES BY ABOUT TWO-THIRDS EARLIER IN THE YEAR BECAUSE OF THE DROP IN ENERGY PRICES.

THE GO-AHEAD FOR JET SALES

he chairman of Senate Foreign Relations Committee Bob Corker confirmed late last month that the White House had given its approval for fighter jets to be sold to Qatar, Bahrain and Kuwait. “We've been pushing for it for some time,” he added. Qatar and Kuwait had requested for the sales more than two years ago.

DROP IN PETROL PRICES CONTINUE Petrol will be cheaper by Dh5 a litre in October. According to the Ministry of Energy & Industry, Premium will cost QR1.25 per litre while the price of Super will be QR1.35. 10 > QATAR TODAY > OCTOBER 2016

business > bank notes FIGHTING BACK

“Deutsche Bank has no intention of settling these potential civil claims anywhere near the number cited,” the company said in a statement in mid September in Frankfurt. “The negotiations are only just beginning. The bank expects that they will lead to an outcome similar to those of peer banks which have settled at materially lower amounts.” Deutsche Bank AG said it won’t pay the $14 billion sought by the US Justice Department to settle an investigation into the firm’s sale of residential mortgage-backed securities, a figure that’s more than triple what some analysts estimated could be a potential worst-case scenario.

CONFLICT AFFECTING ECONOMIES Armed conflicts in the Middle East and North Africa are not only devastating the economies gripped by fighting, but are sapping growth in neighbouring countries and those hosting millions of refugees, said the International Monetary Fund last month.

QATAR BANKS SUFFER DUE TO TIGHTENED LIQUIDITY

n a new study analysing 179 conflict countries since 1970 to quantify economic costs, the IMF found that the drop in economic output in war-torn Syria, Libya and Yemen in recent years has far exceeded the worldwide average. After five years of war, Syria’s gross domestic product is less than half its pre-conflict level in 2010, while Yemen lost 25% to 35% of its GDP in 2015 alone. Oil-dependent Libya saw its GDP fall 24% in 2014, said the IMF.

CHALLENGING TIMES Qatari banks will have to make do with the “challenging operating environment” for a few more years in view of the lower oil prices, according to an expert.

“

ith oil prices staying low over the coming years, we believe that the challenging environment will last through 2020 at least,” said Olivier Najar, country risk analyst (Middle East and North Africa region) at BMI Research. “We expect to see a gradual improvement in the situation for Qatari banks over the years, as oil prices recover moderately, but there is no getting back to the boom years of 2003-2012,” said Najar. "At present, government borrowing is providing some respite for the banks, but this is not sustainable,” he said. Najar said that commercial banks in Qatar would face a more challenging operating environment over the coming years, given the economic slowdown brought about by the slump in hydrocarbon prices. Increasing government borrowing will provide some opportunity for asset expansion until private lending recovers, but this new sector will be less profitable.

Bank liquidity in the six-nation Gulf Cooperation Council has been tightening as a more than 50% slump in crude oil prices since mid-2014 slows deposit growth and pushes governments to boost borrowing. The situation in Qatar became a bigger issue at the start of the year than it was in 2008, according to experts.

enders in Qatar had experienced “extraordinary stress” this year amid the tightening liquidity and were forced to adapt their businesses to the low-oil environment. But Doha Bank QSC Chief Executive Officer R. Seetharaman has said that conditions are improving after the country’s $9 billion bond sale in May. Banks were also facing a narrowing in net interest margins and higher interest expenses, he said. With the $9 billion bond sale, the cost of funding is also coming down for banks, said Seetharaman.

11 > QATAR TODAY > OCTOBER 2016

business > realty check REIMAGINING LUXURY

DAMAC Properties announced the launch of AKOYA Imagine 2.0, a range of modern villas designed for millennials in Dubai.

he new projects, namely AKOYA Cuatro Villas, AYKON City and AYKON Hotel & Hotel Apartments consist of 15 villas that feature living spaces on the first floor which open onto an infinity pool that flows to the groundlevel pool. Villas at Akoya are set within the impeccably landscaped 18-hole, par 71 championship course designed by 2016 Olympic Games course architect Gil Hanse, and will benefit from the community's amenities including a 30,000-square-foot clubhouse, luxurious spa and wellness facilities, luxury shopping and entertainment, worldclass dining, an outdoor cinema, as well as schools and nurseries, among others. Ziad El Chaar, Managing Director,

DAMAC Properties, said: "AKOYA Imagine 2.0 is a vibrant neighbourhood of colourful homes full of character with a wonderful green backdrop. With exclusive, luxury residential apartments in the most convenient and easily accessible locations, we offer premium quality combined with the assurance of strong financial returns."

INVESTING ABROAD

Bahrain-based alternative investment firm Investcorp's United Statesbased real estate arm purchased an office building in Seattle, Washington, for around $223.5 million

nvestcorp purchased the property with its joint venture partner, Schnitzer West, a real estate investment, development, and management firm with a current portfolio of 5.3 million square feet in the Seattle metropolitan area. The 41-storey, Class A office building, known as 901 Fifth Avenue, was part of the company’s initiative to acquire “top-quality, well-occupied, cash-flowing properties in gateway markets in the US”. The building is a multi-tenanted office building located in Seattle's central business district, which is 90% occupied by a diverse roster of 46 tenants involved in a broad spectrum of businesses, including technology, legal services and professional services.

12 > QATAR TODAY > OCTOBER 2016

Saudi Arabia-based real estate group Fawaz Abdulaziz Al Hokair Company has won a major contract to develop a commercial and entertainment district adjacent to King Abdulaziz International Airport in Jeddah.

business > oil&gas ALL EYES ON ARAMCO

“We hope to reach an agreement this year,” according to KHALID AL FALIH, Saudi Arabia’s energy minister.

“Aramco is in advanced negotiations with China National Petroleum Corporation (CNPC) to build the Yunnan refinery in China.”

MORE GAS TO CENTRICA

SAUDI STILL PUMPING OIL Saudi Arabia’s oil exports climbed in July to a record level for that month, as the Kingdom curbed the amount of crude it burns to generate energy domestically, according to the Joint Oil Data Initiative.

he world’s biggest oil producer raised shipments by 166,000 barrels a day to 7.622 million a day in July compared with the previous month, according to Riyadh-based JODI, whose records began in 2002. It reduced the amount of crude directly used for power generation by 7,000 barrels a day to 697,000 a day, the lowest for the time of year since 2010. Saudi Arabia has been boosting its natural gas output to limit the direct

burning of crude, which peaks in the summer months with surging use of air conditioning. The ramp-up of output from the Wasit natural gas plant should decrease the direct use of crude by 100,000 barrels a day this year, the International Energy Agency predicted in July. The July figure is 151,000 barrels a day lower than a year earlier, JODI data show. Saudi Arabia has now agreed to cut on production after the OPEC deal in Algeria.

Direct Burn

Saudi Arabia is using more natural gas to generate energy and burning less crude 2010

2011

2012

2013

2014

2015

2016 direct crude use

Barrels a Day (Thousands)

1,000 900 800

Qatargas, the LNG company, announced a new Sale and Purchase Agreement (SPA) with Centrica, the largest supplier of gas to households in the UK. In accordance with the SPA, Qatargas will deliver up to 2 million tonnes of Liquefied Natural Gas (LNG) per annum to Centrica until 2023.

atar Petroleum President and Chief Executive Officer, and Chairman of Qatargas Board of Directors, Saad Sherida Al Kaabi said: “We are delighted to extend our strong relationship with Centrica and the United Kingdom. This agreement underscores Qatargas’ reputation as a safe and reliable supplier of LNG. Furthermore, this agreement has the potential to contribute positively to the United Kingdom’s energy security for years to come.”

700 600 500 400

MARKED INCREASE IN QATAR'S GAS CONSUMPTION

300 200 100

0 Jan

Feb

March

April

May

June

July

Aug

Sept

Oct

Nov

Dec

Sorce: Joint Organisations Data Initiative

A steady rise in population and infrastructure development activities have resulted in a 40% increase in Qatar's natural gas consumption. Gas consumption in Qatar jumped to 45.2 billion cubic metres (bcm) in 2015 from 32.1 bcm in 2010, according to the BP Statistical Review of the World Energy 2016 report.

TURNING POINT Siemens celebrated the arrival of the company’s 1000th gas turbine produced at its Berlin factory to the Umm Al Houl combined cycle power plant in Qatar. After journeying thousands of miles from Berlin, the fifth of six 11-meter-long SGT5-4000F turbines has made it to the plant that will supply around a quarter of Qatar’s power generation capacity. SGT5-4000F gas turbine has capacity of 300 MW Fifth of six turbines destined for the combined cycle power plant Plant to deliver one quarter of Qatar’s installed power generating capacity 13 > QATAR TODAY > OCTOBER 2016

business > oil & gas

THE VICIOUS

CIRCLE CONTINUES

FOR THE LAST TWO YEARS WE HAVE BEEN WONDERING WHEN MAJOR OIL PRODUCERS WILL FINALLY REACH AN AGREEMENT TO FREEZE THEIR OUTPUT. BUT THE REAL QUESTION IS WHETHER A DEAL AMONG THE KEY PLAYERS CAN MAKE ANY DIFFERENCE AT ALL. BY SASA ZUZMAHOWSKY 14 > QATAR TODAY > OCTOBER 2016

glimmer of hope arose at the beginning of September on the sidelines of the G20 meeting when the two biggest oil producers, Saudi Arabia and Russia, agreed to “act together” to try to stabilise oil prices. Saudi-Russian rapprochement was seen as the introduction for setting the agenda for an informal meeting between OPEC and other producing nations in Algeria later in September. Positive tunes could be heard also by several key producers, particularly after a meeting in Paris involving the oil ministers of Algeria and Saudi Arabia and the new OPEC Secretary-General Mohammed Sanusi Barkindo (who, as a Nigerian, is keen to bring in price-supportive measures). But despite the obvious motivation to finally come up with the deal, the leading oil sector experts ruled out the possibility of any significant change in the near future. For Ole Hansen, Head of Commodity Strategy at Saxo Bank, the crude oil market is unlikely to get much of a boost from the agreement. “Freezing production at a time when demand growth is weakening (IEA in their latest report) is unlikely to support the price. Unless we see renewed weakness below $40/barrel, actions by the major oil suppliers are not expected as the impact would be limited while the global overhang of supply remains so elevated,” he said.

Michael Barry, Director of Research at UK-based Facts Global Energy Company, added: “In our view, despite all the positive talk currently, the informal discussions planned on the sidelines of the IEF conference in Algiers (held end of September) will, at best, just result in an agreement in principle for an output freeze. A detailed formal agreement is unlikely to be achieved before the official OPEC meeting at end-November at the earliest.” The obstacles Firstly, major OPEC producers have been pumping at close to record levels in the past three years. “While some people expected that the Saudis might decrease their production in response, it was never in their interest to do that. It’s not surprising that Saudi production has been fairly steady, and I expect that to continue,” said James Hamilton, Professor of Economics at the University of California, San Diego. Production in Iran and Iraq had been held back for years by geopolitical constraints. With those constraints now gone, both countries want to produce more, and it’s hard to see what motive they could have for cutting back production now voluntarily, Hamilton continued. There are also mixed signals coming from Iran about whether it is prepared to join a freeze agreement, partly due to controversy over what it regards as its pre-sanctions level

While some people expected that Saudi Arabia might decrease their production in response, it was never in their interest to do that. It’s not surprising that Saudi production has been fairly steady, and I expect that to continue.” JAMES HAMILTON Professor of Economics at the University of California, San Diego

15 > QATAR TODAY > OCTOBER 2016

business > oil & gas

Unless we see renewed weakness below $40/barrel, actions by the major oil suppliers are not expected as the impact would be limited while the global overhang of supply remains so elevated.” OLE HANSEN Head of Commodity Strategy at Saxo Bank

“It is interesting that comments after the meeting in Paris indicated that there may have to be two separate steps: firstly, an OPEC agreement; then a deal with key non-OPEC producers.” MICHEAL BARRY Director of Research at UK-based Facts Global Energy Company

16 > QATAR TODAY > OCTOBER 2016

of crude output (either 3.8 mmb/d, which current production is now approaching, or an even higher 4.1 mmb/d), Barry noted. In addition, Iraq and Venezuela publicly support a freeze, but Nigeria and Libya would require an exception as they are currently below trend production due to domestic political turmoil. So, the process is highly complicated and interdependent. “It is interesting that comments after the meeting in Paris indicated that there may have to be two separate steps: firstly, an OPEC agreement; then a deal with key non-OPEC producers. But Saudi Arabia may not be keen to join an OPEC agreement until it is convinced that Russia in particular will be serious too. It may all be too ambitious,” Barry pointed out. However, some analysts claim that the way out is for Saudi Arabia and Russia to somehow reach a price point that still keeps marginal producers out, but high enough to be beneficial for both. According to Barry it appears that a consensus is being formed to try to develop a policy to support oil prices at around $50-60/barrel, but as usual the real question is how/whether that price target can be achieved. We could learn from the past lessons that producers did not keep their promises and just carried on pumping despite the commitments made. “So we still expect the overall output trend to continue to rise slowly through next year,” Barry continued. In any case, it is unlikely that an agreement to freeze production would have a large impact on prices, Mathias Angonin,

lead analyst at Moody's Sovereign Risk Group, commented. Hansen added: “Producers will rely on the market rebalancing itself although this is going to take longer than originally expected. Both OPEC and the IEA in their latest monthly reports expected to see the global supply glut being maintained well into 2017.” (Ir)relevance of any future deal But even if some kind of agreement is achieved, the real question is whether it will have any relevance at all. Any increase in crude oil prices (let's say, above $50) will quickly encourage other producers, especially OPEC’s fierce rivals – US shale and Canadian oil sands companies – to boost output. The ability of US shale oil producers to be profitable at lower prices was highlighted by Apache Corp, a major US shale oil producer, Hansen pointed out. Just recently the company revealed the finding of an “immense” oil and gas reserve in West Texas which could amount to 3 billion barrels of crude oil and 75 trillion cubic feet of gas. What was interesting in this context was Apache’s belief that the region may support 2,000 to 3,000 wells at oil prices of just $50 a barrel. Meanwhile, coordination among OPEC members has decreased over time, and an agreement to freeze production levels would be increasingly difficult to enforce, Angonin concluded. This brings us right back to the beginning of a vicious oil circle

affairs > arab snippets

18 > QATAR TODAY > OCTOBER 2016

T H E B OAT O F D O O M

BEHEIRA, EGYPT - SEPTEMBER 27: Migrants' submerged boat is taken out from sea at Port Rashid in Beheira, Egypt on September 27, 2016. Migrants' boat submerged on its way to Europe at the Mediterranean Sea. Less than half the estimated 450 migrants believed to be on a boat that capsized off the Egyptian coast have been rescued, the country's military said. The vessel had set off from Egypt and was heading for Italy when it was found 12 nautical miles northeast of the town of Rashid -- also known as Rosetta -- in El Beheira Governorate the Egyptian military said in a statement. The statement added that 163 people had been rescued, while 43 bodies were recovered. AFP / STRINGER

19 > QATAR TODAY > OCTOBER 2016

development > viewpoint

WHILE THE BANKING AND FINANCIAL SERVICES SECTOR IN QATAR CONTINUES TO BE A SIGNIFICANT SOURCE OF GROWTH IN THE COUNTRY, RECENTLY RELEASED FIGURES FOR THE FIRST HALF OF THE YEAR SUGGEST A MIXED PICTURE FOR INDUSTRY EARNINGS.

20 > QATAR TODAY > OCTOBER 2016

he country’s banks accounted for almost half of the QR22 billion ($6 billion) in net profits generated by the companies listed on the Qatar Stock Exchange (QSE) in the first six months of the year; however, when the figures are broken down on a bank-by-bank basis, some lenders saw earnings fall when compared with the same period of last year. The 13 QSE-listed banking and financial entities reported a 3.5% year-on-year (y-o-y) rise in cumulative net profits to QR10.69 billion ($3 billion) over the period, compared to a 10.3% decline for the broader bourse. While still in positive territory, gains among listed banks expanded more slowly than during the same period in 2015, when the segment reported an 8.2% increase in net profits. Islamic segment leads growth In the Islamic banking segment, returns were universally up among those that had released reports as of early September. Qatar Islamic Bank, for example, saw its net profits rise by 18% y-o-y, while Masraf Al Rayan posted 5.3% growth and Qatar International Islamic Bank (QIIB) reported a 1.1% expansion. As of early September, Barwa Bank, another of the country’s Islamic banks, had yet to disclose its figures. The continued profitability of Islamic lenders despite economic headwinds can be attributed, in part, to the segment’s lower exposure to financial volatility and its significant capital buffers. QIIB, for example, had a 16.6% capital adequacy ratio as of the first half of 2016, compared to a sector-wide average of 15.6% at the end of last year, as per Qatar Central Bank figures. Conventional lending results more mixed In the conventional segment, only some lenders reported stronger earnings, though virtually all players recorded asset growth. The country’s main conventional lender, Qatar National Bank (QNB), saw its profits

increase by 12% y-o-y to QR6.2 billion ($1.7), while its assets were up by 36% at QR692 billion ($190 billion), the highest level on record for the group. Al Khaliji Commercial Bank, another conventional lender, also saw a rise in net profits, up 6% to QR320 million ($88 million), while total assets rose by 8% to QR60.6 billion ($16.6 billion). Other conventional players saw some slippage in their positions. Commercial Bank’s net profits were down by 54.2% to QR482 million ($87.9 million), although its total assets were up by 7% at QR127 billion ($34.9 billion), with loans, advances and deposits all recording growth. Doha Bank, meanwhile, saw its net profits ease by 11.6% y-o-y to QR708 million ($194.4 million), though its loan book and deposits increased. Ahli Bank was the last conventional lender to report a decline in earnings, albeit marginal, with net profits down by 1.8% at QR332.7 million ($91.4 million); however, its balance sheet was up by 6.2% since end-2015.

BY OLIVER CORNOCK Managing Editor, Middle East Oxford Business Group

Non-resident deposits offset public sector declines Deposit growth was largely due to a 98.8% increase in non-resident deposits in the 12 months to June, according to QNB, stemming from the continued influx of foreign workers as large-scale infrastructure projects move ahead. Qatar’s population increased by 9.7% in the year to July to 2.33 million, and the male population was up by 10.5% at 1.84 million. This helped compensate for a decline in public sector deposits, which were down by 12.5% y-o-y, as well as sluggish deposit growth in the private sector, at just 0.4%. In addition to weaker government revenue, these figures also point to more modest economic expansion. GDP growth is projected to ease from 3.7% in 2015 to 3.3% this year, according to QNB. In a statement issued earlier this year, ratings agency Standard & Poor’s forecast that lower energy prices would continue to inhibit deposit growth and liquidity among Qatari lenders throughout 2016 21 > QATAR TODAY > OCTOBER 2016

affairs > viewpoint local

THE COST OF

GLOBAL TRADE

THE IMPACT OF EXPORT CONTROL AND SANCTIONS REGULATIONS ON THE MOVEMENT OF GOODS ACROSS THE SUPPLY CHAIN IS A GROWING AREA OF CONCERN FOR COMPANIES FACED WITH A SPIDERâ&#x20AC;&#x2122;S WEB OF OFTEN OVERLAPPING, AND SOMETIMES CONFLICTING, RULES AND REGULATIONS AROUND THE WORLD. 22 > QATAR TODAY > OCTOBER 2016

wide range of sectors including IT, telecommunications, aerospace, defence, industrial engineering, chemicals, energy and pharmaceuticals are impacted to some degree or other because of sanctions and export control. The consequences of getting it wrong can be costly. Apart from the damage to business and reputation, businesses face significant fines and the individuals involved may be liable to criminal charges, even prison time. Most countries have some type of regulation to track or control the export of military or dual-use (i.e., can be used for both a civilian or military purpose) items. However, the United States export control regime follows US military and dual-use items wherever they go in the world, even if they are incorporated into larger non-US products. This regulatory regime is quite complicated, often requiring US exporters or non-US re-exporters to register with the US State Department or Commerce Department and obtain licences before moving any item. Failure to manage this process carefully can result in significant delays and even full production stoppage. Similarly, US sanctions and, to a lesser degree, EU sanctions on certain countries, individuals, businesses and other entities, can prohibit companies from dealing with them. Most businesses would not knowingly enter into contracting arrangements with sanctions counterparties, but the lists of sanctioned entities are constantly updated. We have seen this recently with the imposition of sanctions on certain Russian entities and sectors, as many that had been engaged in international commerce for a considerable time found themselves cut off from international commerce. Those international businesses, especially energy companies, that relied on these Russian businesses as part of their supply chain found themselves in a very challenging situation. Related to this, many Russian companies have found it hard to use the international banking system to make or receive payments. This has created cause for non-performance of contracts by counterparties and increased the risk of receiving payment for services rendered. This serves as a good reminder that managing political and counterparty risk is a key component of overall supply chain

risk management. The US reached a deal with Iran last year that lifts some of the sanctions on Iran, including allowing non-US banks to operate in the country. In exchange, Iran agreed to scale back its nuclear programme. But Iran maintains restrictions based on terrorism and human rights concerns, and US banks are still not allowed to do business with the country. This uncertainty has some companies, including many European banks (many of whom have suffered huge fines at the hands of US regulators in recent years), hesitant to develop relationships with Iran. Although a number of high-profile Iran deals have been done since the sanctions were lifted (with the likes of Airbus and Peugeot) the fear of violating the remaining sanctions which outlaw transactions with the Islamic Revolutionary Guard Corps (IRGC) and more than 200 other groups remains. Whilst IRGC organisations are offlimits to any bank that wants access to the US financial system, these are very sophisticated players who over years of sanctions have become adept at hiding themselves and are not simply going to reveal themselves now. As a result of these and other risks, companies are increasingly using a wide range of contractual clauses with their suppliers and other counterparties, often seeking to impose a wide set of compliancerelated obligations and remedies to address the risk. Such clauses are often broadly drafted, seeking to cover not just the counterparty’s actions, but those of a wide range of actors including suppliers, affiliates and other connected parties. But strong contract clauses alone will not suffice. Where companies rely on international supply chains to assemble and deliver their products, they are unlikely to have contractual privity with every player in the chain. Logistics supply chains, for example, of necessity involve multiple parties – third party logistics providers, freight forwarders, carriers, customs brokers, warehouse providers, hauliers and the like – and often contract on the basis of standard terms and conditions (Incoterms, for example). As a result trade compliance and due diligence programmes have become increasingly sophisticated and no doubt more costly to manage

BY TIM WRIGHT Global Sourcing Partner, Pillsbury Law

ABOUT THE AUTHOR Tim Wright is managing partner of the law firm’s London office and serves as London leader of the Global Sourcing practice. Whilst his practice has a strong focus on outsourcing and offshoring projects, he has a broad range of experience, which includes corporate and commercial transactions, and regularly advises on joint ventures and strategic alliances, acquisitions and disposals, collaboration agreements and shareholders’ agreements as well as complex sourcing projects, technology transactions (including e-commerce), web hosting, software development and licensing, system integration, and privacy and other compliance issues. He can be contacted on +(44)20 7847 9505 or tim.wright@pillsburylaw.com 23 > QATAR TODAY > OCTOBER 2016

affairs > worldview

G E N I A L R E L AT I O N S

UNITED STATES: The Emir, HH Sheikh Tamim bin Hamad Al Thani greets US President Barack Obama (L) as he arrives for a luncheon on the sidelines of the 71st session of the United Nations General Assembly in New York on September 20, 2016. AFP / LUCAS JACKSON 24 > QATAR TODAY > OCTOBER 2016

25 > QATAR TODAY > OCTOBER 2016

affairs > regional

THEMIDDLE EASTERN

GAME OF THRONES

26 > QATAR TODAY > OCTOBER 2016

A BOTCHED ATTEMPT AT A MILITARY COUP IN TURKEY, RUSSIANTURKISH RAPPROCHEMENT AND FRIENDLY TUNES COMING FROM TEHRAN HAVE TRIGGERED AN AVALANCHE OF GUESSES ON WHAT IS GOING ON WHILE KEEPING THE FOREIGN POLICY ANALYSTS ON HIGH ALERT. THIS SUMMERâ&#x20AC;&#x2122;S EVENTS HAVE LED SOME TO CONCLUDE THAT IMPROVED FRIENDSHIP BETWEEN THE THREE STATES IS PAVING THE WAY TOWARD A TRILATERAL ALLIANCE. BUT THINGS ARE NOT THAT SIMPLE. BY SASA ZUZMAHOWSKY

27 > QATAR TODAY > OCTOBER 2016

affairs > regional

f we have learnt anything from the Middle East, it is that its geopolitical environment is constantly changing as new players with their independent agendas enter the game and the current Turkish-Iranian-Russian triangle could be understood as just one of the episodes in the Middle Eastern saga. While it is true that interaction between Russia, Iran and Turkey may have a certain impact on the situation in Syria and their mutual relations, the question is for how long and in what direction. A tactic than a long-term strategy For Atilla Yesilada, Istanbul-based partner of GlobalSource Partners, a political and economic consulting firm, rapprochement between Turkey, Iran and Russia is purely opportunistic and transactional. Major differences remain between the states regarding Syria in particular and the region in general, as he told Qatar Today. In this regard, “any of these countries are not ready to give up their vision or agenda or to fully accept the vision of the other side. Furthermore, as Nikolay Kozhanov, Middle East specialist and Eurasia expert at Chatham House, said: “Each leadership sees the other side as a means not as a partner. In short, we have pure pragmatic decisions on both sides pushing the countries closer together”. There are some obvious gains that each side could benefit from, especially in the field of economic cooperation. Russia, affected by Western sanctions, has increased its diplomatic efforts to establish a pact with large Asian economies, such as China and Iran, while trying to establish closer ties with the Gulf countries.

We got more than 50% of our tourists from the EU, 50% of our exports go there and we need to roll over $210 billion of foreign debt each year which is arranged through American and EU banks.” ATILLA YESILADA

Global Source Partners 28 > QATAR TODAY > OCTOBER 2016

Reconciliation with Turkey thus comes at the right moment for both parties as the Turkish economy was also deeply affected after the introduction of Russian sanctions. In addition, Russia is vitally interested in resurrecting the Turkish Stream project, which will significantly decrease Russian dependency on Ukraine. Consequently, Turkish Stream would help Russia get a strong foothold in Europe as its main energy supplier, further challenging Brussels and Washington. Turkey would also highly benefit from this project as it would secure the country’s growing energy needs and position itself as a future energy hub for Europe, especially if and when Iran starts with its natural gas exports. “Energy will assure a modicum of civility among the three countries but a strategic alliance among them is not possible,” said Yesilada. West still important But sudden rapprochement and possibility of closer relations between Ankara, Moscow and Tehran had caused growing concerns among Western allies. Although the West’s relations with Turkey witnessed a steady deterioration after the unsuccessful coup, this rift could be understood as a tactical manoeuvre giving Turkey some leverage space and a better bargaining position with the West, especially after the avalanche of criticism of the ongoing political purge in the country. Kozhanov pointed out that “relations with the West are still of principal importance to Ankara,” and “Erdogan is playing his own game in the Middle East, so retaining the relationship with the West is part of this game.” Recent meetings with high Western officials prove this. “Turkey is bound to the West through

The gist of the matter is that AKP's legitimacy at home partly depends on its resistance to Assad and Sisi of Egypt, which is very difficult to change without angering its constituency.” NIKOLAI KOZHANOV

Middle East specialist and Eurasia expert at Chatham House

irreversible economic linkages. We get more than 50% of our tourists from the EU, 50% of our exports go there and we need to roll over $210 billion of foreign debt each year which is arranged through American and EU banks. Even an unofficial underhanded suggestion to banks that it might not be wise to lend to Turkey could trigger an economic collapse,” stressed Yesilada. A game of thrones It seems that Russian-Turkish-Iranian friendship comes with an expiry date and it could be understood as a pragmatic move with limited political and economic benefit potential at best. According to Yesilada, Russia allowed the Turkish incursion into Syria because the Kremlin believed it was largely against ISIS, which it supports, and partly against the Kurdish PYD-YPG, about which it is indifferent (as Kurds are stalwart allies of the USA). Also, allowing Turkey some manoeuvring room in Syria is a small price to pay for the Akkuyu nuclear reactor and Turkish Stream. But any substantial linkage between Russia and Turkey would take a lot more than one presidential visit and would, among other things, require Turkey’s revision of its policy towards Syria. Although Ankara has softened its statements regarding Damascus and Assad, there are limits. Even this small concession came with caveats, as Yesilada commented: “Assad could only stay in power during the transition to a full multi-ethnic democracy, which I’m sure made Assad giggle in mirth. The gist of the matter is that AKP’s legitimacy at home partly depends on its resistance to Assad and Sisi of Egypt, which is very difficult to change without angering its constituency”.

According to Kozhanov, Ankara will not give up its support for this Syrian opposition since too much effort has been invested in this operation and since it could create substantial troubles in Turkey’s relations with Gulf monarchies, who are the only Turkish allies in the Middle East. Furthermore, Russian generosity could badly backfire as Ankara intends to train and equip a new Free Syrian Army in the zone it liberates to help break the siege of Aleppo. From Turkey’s perspective, capturing Al Bab, Manbij, and even Raqqa means it is set to stay in Syria, and even become the gendarmerie for the Sunni parts of it, noted Yesilada. And let us not forget that even today, Turkish and Russian proxies are at war. “If Ankara succeeds, the tide of the battle will shift against Assad forcing Russia into a lengthy and costly battle of attrition to defend its ally. If my scenario is correct the recent thaw between Ankara and Moscow might not last,” he further explained. The upside for Turkey is that no solution in Syria is possible without its consent. The downside is a severe deterioration of relations with the Kurds and angering Russia. Finally, any closer relations demand a certain level of trust. And that is something that does not exist at the moment. “I can see that there is no trust among the Russian political elite towards Turkey. For the Russian president, personal trust is quite important. He trusted Erdogan in the past, but the Turkish president let him down when the Turks shot down a Russian fighter jet last November. And that is something that Vladimir Putin usually does not forget or forgive,” Kozhanov concluded. Let us wait and see what the next season will bring us 29 > QATAR TODAY > OCTOBER 2016

affairs > local

THE SWF THATâ&#x20AC;&#x2122;S NOT SHYING AWAY

FACED WITH AN ARDUOUS TASK OF SAVING AT A TIME WHEN THE GOING GETS TOUGH IN OIL REVENUES, QATAR HAS A CAUTIOUSLY HAWKISH EYE ON GLOBAL ACQUISITIONS, ESPECIALLY WHEN IT COMES TO THE REAL ESTATE AND HOSPITALITY SEGMENTS. BY ILAK GAN 30 > QATAR TODAY > OCTOBER 2016

ven with a more than 50% yearon-year decline in hydrocarbon exports, Qatar, still holding the title of the fastest-growing economy in the world, has been taking measured steps monetising real assets to invest in dispersed geographies via its sovereign wealth fund (SWF). Qatar’s SWF has increasingly assumed a key role in the global arena, even when global funds are keenly watching the Chinese growth conundrum and the US Federal Reserve interest rate hike to take future steps. International credit rating agency Moody’s estimates that assets managed by Qatar’s SWF, Qatar Investment Authority (QIA), have risen from $243.5 billion or 120.6% of GDP (gross domestic product) in 2013 to $329 billion or 183.4% of GDP in 2015. This is 5.5 times its estimate of total government debt for 2015. The durability and sustainability of Qatar’s economic growth and development hinge on these sectoral as well as other investment; whose long-term returns are going to be the basic feedstock for the country’s future. The QIA, which is designated for future generations and not intended as a stabilisation tool (as said by Standard & Poor's), has recently invested $622 million in purchasing a 10% stake in the iconic Empire State Building in the US, which has become a sovereign wealth funds’ darling especially after Britain voted in favour of quitting the European Union. In 2015 itself, QIA – which has $256 billion of assets under management (as per Sovereign Wealth Fund Institute) – had made clear that it is planning to invest about $35 billion in the US over the next decade, after opening its office in New York, enabling it to make further inroads into the American markets and expand its global investment portfolio. Colliers Global Investor Outlook 2016 confirms that investor sentiments are gravitating towards the real estate sector and are expected to remain “positive”. Global transactions are likely to touch the pre-financial crisis levels in this year as the UK, the US, France, Japan and Australia are set to witness realty acquisitions in the next one year. It has so far been an eventful year for the QIA – which has a “more modest cushion”

of assets due to the country’s low fiscal break-even price, as opined by Moody’s – since it picked up a 25% stake in Pulkovo International Airport in St Petersburg, Russia, and early this year acquired a prime property in Singapore from the US private equity firm BlackRock Investments for $2.5 billion. The deal is billed as the largest in Singapore in dollar terms with QIA paying $1,960 per square feet. The Qatar fund’s existing American holdings include a more than 10% stake in New York-based luxury jeweller Tiffany & Co. Also among the Qatari fund’s interests in America is a 44% stake in the redevelopment project in New York known as Manhattan West, which includes remodeling the building that’s now home to the global headquarters of the Associated Press. QIA and its joint venture partner Douglas Emmett this year acquired the 365,000-sq.ft property, in Los Angeles, from Hines for $225 million. In October 2015, QIA entered into a pact with Brookfield Property Partners, picking up a 44% holding in the seven-millionsquare feet New York City development for a consideration of QR8.6 billion. “Given that Gulf currencies are pegged to the US dollar, the US real estate market will benefit from increased SWF focus on real estate,” Fadi Moussalli, head of JLL’s International Capital Group in Middle East and North Africa, had said in its report in June this year. The Gulf Cooperation Council’s (GCC) SWFs may largely shun the UK with Brexit becoming a reality, the Washington-based Institute of International Finance had said. Qatari Diar recently partnered with Tishman Speyer to construct a 1.1 millionsquare-feet office and retail project in Long Island City, New York, at an estimated cost of $700 million. The QIA subsidiary had also sealed an agreement with Hines for the construction of the 360-key Conrad Washington D.C. luxury hotel, estimated to cost about $250 million. The QIA acquisitions, almost one a month, have come at a time when the oil market is in uncertain times and many SWFs are facing increased heat due to their exposure to Brexit, as Gulf family and private businesses have large exposure to London’s real estate market, which has witnessed corrections after the Brexit vote.

Given that Gulf currencies are pegged to the US dollar, the US real estate market will benefit from increased SWF focus on real estate. FADI MOUSSALI

Head of JLL’s International Capital Group, MENA region 31 > QATAR TODAY > OCTOBER 2016

affairs > local

GAINING STRENGTH A RECENT PUBLICATION FROM THE MINISTRY OF DEVELOPMENT PLANNING AND STATISTICS SUGGESTS THAT QATAR’S TOTAL FOREIGN INVESTMENTS HAVE BEEN EXPANDING, FROM

QR90.9 QRI47.4 QRI58.I QR229.6 QR270.9 QR306.2

BILLION IN 2009 TO

BILLION IN 2010 TO

BILLION IN 2011 TO

BILLION IN 2012 TO

BILLION IN 2013 TO

BILLION IN 2014.

32 > QATAR TODAY > OCTOBER 2016

The QIA has reportedly invested at least $7 billion in equities traded on the London Stock Exchange, in which it also holds a more than 10% stake. QIA had last year acquired London’s three hotel assets Claridge’s, Connaught and Berkeley for more than $3 billion. Qatar has made purchases in London such as the Shard, Harrods, the Olympic Village and several upmarket luxury hotels. Its SWF still has equity holdings in UK entities such as Barclays, Sainsbury’s and Canary Wharf. Global real estate consultancy CBRE estimated that Qatar and the UAE provided 75% of Middle East outflows into the global realty sphere, and in 2015 its data showed that SWFs as a group pumped about $14 billion into prime properties globally. A recent publication from the Ministry of Development Planning and Statistics suggests that Qatar’s total foreign investments have been expanding, from QR90.9 billion in 2009 to QR147.4 billion in 2010 to QR158.1 billion in 2011 to QR229.6 billion in 2012 to QR270.9 billion in 2013 to QR306.2 billion in 2014. While Qatar’s outward foreign direct investment had consistently gained during 2009-14, it was not so with portfolio investments which have had a chequered path. During 2010-12 they were on a declining course, which was reversed in the subsequent two years. But QIA’s portfolio is intended to create long-term value for generations to come and is therefore not subject to conventional short-term performance measures or tactical portfolio optimisation, according to its website. Spreading its tentacles across the globe, QIA – which has made substantial and diversified holdings in the sectors ranging from real estate to power utilities, retail department stores, finance sector and agriculture – said it was committed to diversify its investments geographically as well as sector-wise so as to eschew concentration risks. In this regard, its $100 million investment to buy a fractional stake in India’s e-commerce portal Flipkart is an example of how SWFs are thinking out of the box to invest in sectors outside the usual brick and mortar. QIA had invested $2.5 billion in the initial public offering of Agricultural Bank of China in 2010. Another public sector entity, Katara Hospitality, had late last year acquired Westin Excelsior Rome from Starwood Hotels and Resorts Worldwide as part of

its strategy to expand its global footprint. The acquisition brings Katara Hospitality’s portfolio of properties in operation or under development to 35 and marks its third property in Italy. Katara Hospitality – which currently owns properties spread across three continents in Qatar, Egypt, Morocco, the UK, France, Germany, Italy, Spain, Switzerland, the Netherlands, Singapore and Thailand – is now focused on adding another 26 properties by 2026. Toeing the lines of sovereign and its related enterprises, Qatar’s private sector too joined the bandwagon with Al Rayyan Tourism Investment Company (ARTIC), the international hotel investment and hospitality subsidiary of Al Faisal Holding Company, acquiring the Viceroy Miami luxury boutique hotel, its fifth investment in the US. “The US market has always been attractive to us. ARTIC entered the US in 2012, focusing on the hospitality industry, and since then the hotel industry has been growing strongly, benefiting our US investments,” according to Sheikh Mohamed bin Faisal bin Qassim Al Thani, vice chairman of ARTIC. ARTIC’s US hotel portfolio includes Radisson Blu in Chicago, The St. Regis Washington D.C., The Manhattan at Times Square in New York and St. Regis Bal Harbour Resort in Miami. Across Europe, Qatar-based Constellation Hotel Holdings last year acquired InterContinental Paris Le Grand for $440 million and in 2013, it had acquired a hotel portfolio from Starwood Capital. These far-sighted moves have made world leaders and their policymakers as well as business captains call on Doha to invest in their respective jurisdictions. India’s National Investment and Infrastructure Fund – which will act as an investment vehicle for funding commercially viable greenfield, brownfield and stalled projects – has already signed a memorandum of understanding with QIA during the visit of India’s Prime Minister Narendra Modi. Coincidentally, Al Sawari Holding – with significant interest in the hospitality sector in the Middle East, the US and Europe – entered into an agreement to buy a six-acre site near the iconic Taj Mahal in Agra from Hotel Leela Venture. This comes as part of its strategy to seek growth opportunities in Asia’s third largest economy, where the hospitality industry is anticipated to touch $400 billion by 2022

COVER STORY

34 > QATAR TODAY > OCTOBER 2016

HAVE WE REACHED THE END OF AN ERA WHEN OIL WAS THE MOST DEFINING FACTOR IN THE ECONOMICS OF NATIONS? ARE WE IN THE AGE OF “OIL IRRELEVANCE”? OR DOES THE DIP IN OIL PRICES AND THE SUBSEQUENT ECONOMIC DOWNTURN REFLECT THAT LIFE WITHOUT OIL IS A DELUSION? BY SINDHU NAIR 35 > QATAR TODAY > OCTOBER 2016

COVER STORY

has been an integral part of our lives for as long as we remember. Oil has built beautiful megacities and even brought some down. Our daily commutes and our long haul vacations are fueled by oil. Our grocery carts are filled with Lebanese vegetables, Saudi Arabian milk, European cheeses and Indian spices, all thanks to oil. We sit within air-conditioned rooms, powered by electricity that is produced mainly by petroleum products. The safe cocoon we have built around us has largely been associated with oil, in more ways than we can think of. It’s inevitable that we feed on this resource as it was easily available and procured. “Oil is like winning the energy lottery,” according to Richard Heinberg, an American journalist who has written extensively on energy and sustainability. He says it is predictable that oil became an integral part of energy economics. Imagine this: the amount of energy from a gallon (approx 3.78 litres) of oil is equivalent to six weeks of human labour. But we all know that the lottery effect does not last too long. We’ve generally assumed that this black gold will continue to feed into national coffers and cushion the future. But the oil economy is slowly going to be consigned to history. We will soon be moving to an era where oil will not play as big a role as it has played so far. Heinberg has stated: “We have built a regime where we believe that every year there has to be more oil available to fuel economic growth. Soon the economy will not be able to grow due to world peak oil.” According to international oil economist and visiting professor of energy economics at Europe Business School,

Dr Mamdouh Salameh: “No other commodity has been so intimately intertwined with national strategies and global politics and power as oil. The close connection between oil and conflict derives from three essential features of oil: (1) its vital importance to the economy and military power of nations; (2) its irregular geographic distribution; and (3) peak oil. While not in the immediate future, but it is a reality that economies thriving on oil revenue might soon diminish and energy from various other resources will slowly take centre stage. The IEA figures According to International Energy Agency (IEA) figures, global oil demand growth is slowing at a faster pace than initially predicted. For 2016, a gain of 1.3 mb/d is expected – a downgrade of 0.1 mb/d on previous forecasts due to a more pronounced 3Q16 slowdown. Momentum eases further to 1.2 mb/d in 2017 as underlying macroeconomic conditions remain uncertain. World oil supplies fell by 0.3 mb/d in August, dragged lower by non-OPEC producers. OPEC crude production edged up to 33.47 mb/d in August – testing record rates as Middle East producers opened the taps. Kuwait and the UAE hit their highest output ever and Iraq lifted supplies. Output from Saudi Arabia held near a record, while Iran reached a post-sanctions high. Overall, OPEC supply stood at 930 kb/d above a year ago. One change that is not reflected in the IEA figures was the very recent OPEC decision to cut the output. This would be the first time in eight years that the oil cartel has agreed to

mb/d

World Oil Demand 100

OPEC Crude oil supply mb/d

97.5

92.5

87.5 0 85

1Q2013 1Q2013

3Q2013

36 > QATAR TODAY > OCTOBER 2016

1Q2014

3Q2014

1Q2015

3Q2015

1Q2016

3Q2016

3Q2013

1Q2014

3Q2014 Supply

1Q2015

3Q2015

Series 2

1Q2016

3Q2016 2016 OECD/IEA

a lower output. The agreement was reached on September 28 at a meeting in Algiers. And oil prices surged more than 5% in reaction. A global glut of oil supply had caused oil prices to crash over the last two years. And OPEC nations, led by Saudi Arabia, refused to lower production until now. Under this recent agreement in Algiers, OPEC oil production is expected to be reduced to a range of 32.5 to 33 million barrels of oil per day from 33.4 million. Saudi Arabia, the largest oil producer, is expected to give up 350,000 barrels a day, according to a senior OPEC source quoting the final proposal. Other OPEC nations are expected to lower production too, though more details were not immediately clear. Three countries are exempted from the production cuts: Iran, Nigeria and Libya. Economic sanctions were lifted on Iran earlier this year, and Libya and Nigeria have had some of their oil facilities damaged by terrorist attacks in recent months. Will this cut of production raise the price of oil? And with demand decreasing what will the effect on the OECD countries? Will oil continue to hold on to its prominence? Or will it lose some of its shine? Oil and OPEC Dr Salameh believes that oil has a lot more of glitter to add to the economy. He says that any energy gap during the coming years will have to be filled with unconventional and renewable energy sources. “However, it is very doubtful whether these resources could bridge the energy gap in time as to be able to create a sustainable future energy supply.” “Those who are prematurely talking about the decline of the supremacy of oil should think again. They should look no further than the adverse impact that the collapse of oil prices since July 2014 has had on the global economy,” says Dr Salameh. He predicts that oil will continue to reign supreme for the rest of the century and maybe even beyond. “Contrary to widely accepted wisdom, oil will remain an integral part of the Middle East economies throughout the 21st century and far beyond. Even if cheap alternatives to oil in transport, water desalination and electricity generation were to become readily available in the future, oil will not be left underground because the Arab Gulf oil producers will use it to power thousands of water desalination plants to generate enough water not only for drinking but also for irrigation, thus making the desert bloom again. They will also use it to dominate the global petrochemical industries and any industries in which oil is a feedstock.” Gopal Balasubramaniam, Partner, Head of Oil and Gas, KPMG, reflects on the power oil has had on economies and how the demand-supply equation has been tilted, bringing in more players from the non-OPEC sector into play. “Powerful countries have always been major consumers

For some time now, it has become evident that oil is not the be-all, end-all commodity that it used to be. It is not the only or the most reliable form of riches that many policy-makers once assumed it to be." Mehran Kamrava

Director Center for International and Regional Studies Georgetown University School of Foreign Service in Qatar.

of oil – with the valuable commodity supporting growth through manufacturing and energy provision. With consistently high consumption, world leaders have been able to strike favourable, long-term contracts with oil producers, taking advantage of economies of scale of buying. These countries have also invested heavily in infrastructure to store and transport oil to help mitigate against any potential supply issues. Over the past few decades, we have also seen some of these powerful countries allocating state funds for exploration and production of hydrocarbons – tilting the demand-supply equation. The top three oil-producing countries presently are Saudi Arabia, Russia, and the United States.” With shale oil and gas discoveries in the US, Canada and some parts of Europe, it is likely that some powerful countries may become self-sufficient in oil and could in fact begin to export in the near future. Balasubramaniam says that new technologies are being developed to reduce shale oil production costs and reduce its environmental damage. “As the viability 37 > QATAR TODAY > OCTOBER 2016

COVER STORY

Oil ECONOMICS AND QATAR EXPERTS TALK

Austerity Measures

Sanjay Bhatia

Managing Director, Alpen Capital Investment Bank (Qatar) LLC

“

slump in the oil prices has slowed down the oildependent GCC economies, thus adversely affecting business sentiments in the region and forcing most of the member countries to resort to austerity measures. Consequently, spending on business travel and MICE events has reduced within the region. Any significant fluctuation in the exchange rate between the US-dollar and other currencies is likely to have an effect on travelling plans of visitors to the GCC region. This is because the currencies of most of the GCC nations are pegged to the US-dollar. This was evident when a drop in the oil prices led to a sharp devaluation of the ruble against the US dollar, thus affecting tourism spending by the Russians. Chinese spending in the GCC was also affected due to the depreciation of the yuan against the US dollar. Thus, depreciation of currencies such as the ruble, euro, pound, and yuan against the US dollar has made the GCC an expensive destination. The euro and pound depreciated further recently with the UK’s decision to exit the European Union. A continued weakness in these currencies is likely to have a negative impact on tourism spending in the GCC region. All these factors are likely to have a negative impact on the travelling plans of tourists, thereby impacting sectors such as hospitality and retail. The current economic scenario with sustained decline in oil prices also poses a challenge to the GCC construction and healthcare sectors, both of which are heavily reliant on government expenditure. Government spending in these two sectors might be curtailed as part of the severity measures undertaken by GCC governments. The lack of liquidity in the markets has also put pressure on the growth of the construction sector in particular.”

38 > QATAR TODAY > OCTOBER 2016

of these technologies increases, shale will become a cost-competitive hydrocarbon resource. This will put pressure on the big oil producers from the Middle East (and elsewhere) who will need to price their oil exports competitively moving forward. And the threat is not just from shale production, but also from renewable energy.” Professor Paul Stevens a distinguished fellow at Chatham House, the Royal Institute of International Affairs in London, a specialist on the Middle East affairs, says that there is no doubt that oil will lose its prominence. “We now face peak oil, not in the old sense of the running out of oil, but in the fact that there is far more supply than there is demand for oil,” he says. He reminds us of the famous words of the former Saudi oil minister, Sheik Ahmed Zaki Yamani, who warned his OPEC colleagues: “The Stone Age didn’t end because we ran out of stones.” And the Oil Age will not end because we run out of oil but because we find other alternatives. And the future will be electric, he predicts, “it will be an increasingly electric world.” Putting the focus on Organisation of the Petroleum Producing and Exporting Countries (OPEC) and the dominance of this entity, Prof . Stevens dismisses the power of the organisation, saying, “OPEC was never dominant and increasingly over the last few years it has been losing its relevance. (He spoke to us before the OPEC decision to cut oil production.)” “Since OPEC’s decision in November 2014 not to cut oil production, it lost its relevance. Its role was to control the oil market and once they decided not to change production they basically gave up on that control. The oil price then started to be determined by the competitive market. This was the first time this happened since 1928.” The only way that OPEC can gain control, according to Prof. Stevens is if they reinstate the quota system which, according to him, is highly improbable. “OPEC as an institution is effectively dead. There is a lot of talks about the prospects of an agreement in Algiers but that is highly unlikely as the Russians have made it clear that they will not make any deal unless OPEC agrees on a strategy.” he stated. Saudi Arabia and Iran, however, are at such different levels of what they want that a strategy too seems to be quite doubtful. “If they do have a deal in place, then it doesn’t mean much as the agreement will not last and they will cheat on the deal as they have done so before,” he says. In his recent research, Prof. Stevens also specifies the challenges that face the International Oil Companies, in the face of declining oil prices. “The only realistic option for the IOC lies in restructuring and realising many of their current assets to provide cash for their shareholders. Inevitably, this means that they must shrink into the remaining areas of operation, functionally and geographically, where they can earn an acceptable return. This would require a major change in the corporate culture of the IOCs. It remains to be seen whether their senior management could handle such a fundamental shift.

If they can, the IOCs will be able to slip into a gentle decline but ultimately survive on a much smaller scale.” Dr R Seetharaman, Group CEO, Doha Bank, is of the opinion that GCC should emphasise on fiscal prudence and diversification in the near future to withstand shocks from low oil prices. Balasubramaniam from KPMG also agrees that the focus will now be on unconventional oil and renewable energy. “The giants in Asia – China and India – have historically been the biggest importers of oil and energy, however, they are investing heavily in wind and solar energy and have made good headway. Even within the Middle East, we are seeing an increased investment in solar energy, taking advantage of the region’s climate,” he says. Still an oil rich country? For ages we have described Qatar as a small thumb-like projection that rose from being a pearl harvesting country to an oil-rich one. Will the status quo of being an oil rich country change to a new resource that Qatar will harvest? Or will “oil-rich country” lose its saleability and will we opt for the next “new oil” for our economy to depend on? Mehran Kamrava, Director of the Center for International and Regional Studies at Georgetown University, School of Foreign Service in Qatar, gives us a very broad perspective of how oil has affected different countries and how each county has an inexorable tie with this commodity. “For some time now, (three or four decades), it has become evident that oil is not the be-all, end-all commodity that it used to be. It is not the only or the most reliable form of riches that many policy-makers once assumed it to be. It has had increasingly declining importance in social welfare and in enabling the states to deliver on social services,” says Kamrava. Kamrava divides the role of oil into three broad categories. The first comprises those countries with huge populations; the oil production is enough for the population and also generates some revenues for the governments but it is not enough to be the sole source of revenue. These countries include Algeria, Libya, Iraq and Iran. The second category, countries which has lot of oil and a smaller national population. “This enables the governments to provide cradle to grave social services for its citizens as a result of the oil revenues, as these governments have created very elaborate welfare states,” he explains. These second category includes all the countries of the Arabian Peninsula: Saudi Arabia, UAE, Qatar, Kuwait and, to a lesser extent, Oman too. The third category is the group of countries that don’t have much oil. “But this group is dependent on indirect oil revenues. The revenues accrued indirectly through oil-related activities. Egypt, for example, has three main sources of revenue: one is tourism revenue; another is the revenue through

We now face peak oil, not in the old sense of the running out of oil, but in the fact that there is far more supply than there is demand for oil." Stevens Paul International oil economist and visiting professor of energy economics at Europe Business School Chatham House

tariff collected for passage through the Suez Canal; and then there is a remittance. So their economy depends on revenues collected indirectly from oil producing countries, through remittances from neighbouring oil producing countries like Libya and GCC countries,” he explains. So the effect of an oil price decline will affect all these countries, albeit differently. It all depends on how directly dependent they are on this commodity and how they have planned their future in the absence of this commodity. “Countries which belong to the first category: Algeria, Iran and Iraq, for example, have had periods of political instability. Algeria had its civil war, Iran had its revolution and its consequences, and Iraq has lived under occupation and is slowly coming out of it. Instability has not been new to these countries and they have a mechanism to deal with popular uprising and insecurity. They have been witness to so much political instability that they have developed a certain adaptability and can mitigate or manage the pressure of oil price decline,” he says. 39 > QATAR TODAY > OCTOBER 2016

COVER STORY Oil ECONOMICS AND QATAR EXPERTS TALK

Fiscal Prudence And Diversification QATAR EXPECTED TO GROW AT

3.4 % 4

IN 2016 AS AGAINST

IN 2014

Dr R Seetharaman Group CEO, Doha Bank

“

he oil price boom which we saw from late 2004 to 2008 and again from 2009 to mid-2014 had contributed to the GCC economic growth. The GCC economies sovereign wealth funds (SWFs) had capitalized on the oil boom and built their reserves and also diversified their overseas assets. GCC SWFs have accumulated close to $2.67 trillion at the start of 2015 and constitute more than 37% of Global SWFs. The UAE SWF is more than $1.07 trillion, $763 billion by Saudi Arabia, $548 billion by Kuwait and $256 billion held by Qatar. Oman and Bahrain maintain $19 billion and $11 billion respectively. Prior to the fall in oil prices the GCC GDP at current prices was expected to exceed $2.1 trillion in 2013 and the current account surplus was expected to exceed $330 billion in 2013. (almost 15% of GDP at current prices). The WTI and Brent fell below $100/ barrel in July 2014 and Sept 2014, respectively, on account of excess supply from nonOPEC producers. The oil prices have continued to a witness a downtrend since mid-2014. GCC GDP at current prices in 2014 was at $1.647 trillion and is expected to be $1.302 trillion in 2016 on account of the fall in oil prices. The GCC current account surplus in 2014 was at $238.07 billion (14.5% of GDP at current prices) and is expected to fall to a current account deficit of $91 billion (7% of GDP at current prices) in 2016. This year WTI and Brent had touched an all-time low below $30/ barrel in February 2016 on account of slowdown in the Chinese economy and excess oil supply concerns. Most of the GCC economies will witness a slowdown in economic growth on account of the fall in oil prices. Saudi Arabia is expected to grow by 1.2% in 2016 as against 3.64% in 2014. Bahrain is expected to grow at 2.2% in 2016 as against 4.45% in 2014. UAE is expected to grow at 2.4% in 2016 as against 4.6% in 2014. Oman is expected to grow at 1.8% in 2016 as against 3%

40 > QATAR TODAY > OCTOBER 2016

in 2014. Qatar is expected to grow by 3.4% in 2016 as against 4% in 2014. Kuwait is expected to grow by 2.4% in 2016 as against 0.03% growth in 2014. Liquidity conditions in the GCC banking system and banks’ borrowing costs are expected to tighten amid falling public deposits, coupled with a modest increase in loans and future increases in US interest rates. The GCC region has cut spending to battle fiscal deficits which could reach 11.6% of gross domestic product in 2016. Ambitious fiscal consolidation measures are being implemented this year. A combination of lower growth, higher debt levels and smaller domestic and external buffers leave Saudi Arabia less well positioned to weather future shocks. The Abu Dhabi government’s sizeable fiscal buffers will help the UAE government to cope with the challenges from the ongoing economic slowdown and allow it time to adjust its fiscal policy to lower oil prices. The impact of low oil prices on Qatar’s government balance sheet and on its external balance sheet is manageable. The sharp decline in oil prices, fiscal consolidation efforts and upcoming refinancing needs are expected to keep commercial debt issuance in GCC. The GCC sovereign bond issues were active during this year which includes, Qatar – $9billion, Emirate of Abu Dhabi – $5 billion and Oman – $3 billion respectively. We also have to wait and see whether oil producers come up with any action to balance the oil market. According to IMF April 2016 Outlook, economic growth in GCC is expected to slow to 1.8% this year from 3.3% in 2015 on account of tighter fiscal policy, weaker private sector confidence and lower liquidity in the banking system. GCC non-oil growth is projected to be 3.25% over the next five years, well below the 7.75% recorded during 2006-2015. Further risks to growth include a more profound knock-on from fiscal tightening, more oil price declines or faster-than-expected US rate rises.

Kamrava doesn’t foresee a “doom and gloom” situation when the oil revenues significantly wane. “It would stand to reason that the GCC countries are countries that are most directly dependent on oil,” he says. “However these are the countries that have planned most elaborately probably being aware of the dire consequences that a post-oil era would bring them.” Qatar is trying to forge a knowledge-based economy; UAE has pegged itself to an industrial-based economy and Saudi Arabia is implementing major economic adjustments to reduce or alleviate the dependence onoil. “We have seen, historically, that there are regular cycles of oil boom and oil bust. Over time, these states have developed a mechanism to deal with this fluctuation and the increasing lack of centrality of oil revenue makes it much easier for the countries to make sure that they do not keep all their eggs in one basket,” he says. Taking the example of one GCC country that was dependent on oil revenue for some time till it ran out of oil, Kamrava says, “Bahrain ran out of oil about 50 years ago and they turned themselves into a banking centre. The country did not implode,” says Kamrava. “Maybe they did not resort to flashy expenditure as some of their neighbours did but they survived. ” The third category of countries has had to learn how to live with severe limited revenues due to reduced income. They will also have to look for alternative sources. Egypt had to learn with severely reduced tourism revenue. For Egypt, tourism has been what oil has been to Saudi. It was revenue that was available, without much work. But since oil has been indirect revenue they also had to face a fall in lifestyle. The biggest costs to all of these governments are the subsidies that they have promised to their citizens that have become very expensive over the years. Many governments and policymakers know that they need to make changes; for example reduce subsidies on two key items, bread and fuel. The UAE was the first Gulf country to have cut the fuel subsidy. Saudi Arabia has also already started cutting its subsidies, first going after fuel. Saudi Arabia also plans to cut public-sector wages as well as other subsidies by 2020, scaling back the state largesse that helped ensure political loyalty in the largest Arab economy. The Saudi cabinet approved the National Transformation Program, part of the Vision 2030 plan unveiled by deputy crown prince Mohammed bin Salman that include reducing public-sector wages to 40% of spending by 2020, from 45%. “Some countries and their governments are reluctant to impose taxes even if that will be an important tool to add to the dwindling state coffers. Other governments do not impose taxes but they include hidden taxes like license costs etc which contribute to the economy as well,” says Kamrava. Fuel prices in Qatar were allowed to fluctuate in response to changes in the global market from May 1. The monthly revision in local fuel prices followed the government’s

There will be pressure on the big oil producers from the Middle East (and elsewhere) who will need to price their oil exports competitively moving forward. And the threat is not just from shale production, but also from renewable energy." Gopal Balasubramaniam Partner, Head of Oil and Gas, KPMG

decision on fuel subsidy reforms in Qatar and will help to reduce the revenue decline due to the oil price dip. Looking at it from an expatriate angle, Kamrava feels that, historically, all the Gulf countries have gone out of their way to make life much more comfortable for the people residing here by providing comforts to match those in their home countries. “These comforts might not take as much precedence now,” he says. As oil revenues decline, fewer contracts will be handed out, fewer infrastructure projects will be signed, and as they decline there will be fewer opportunities for imported labour and this will be part of the future for the Gulf countries. But even if the oil decline has been more drastic than anticipated and an oil price of $100 a barrel will never occur in the future, Kamrava feels nothing much will change in the Gulf countries. “The biggest challenge that the country is the human resources challenge and even with the future looking less prospective, there will remain opportunities for human resources,” he reassures. 41 > QATAR TODAY > OCTOBER 2016

COVER STORY

Oil ECONOMICS AND QATAR EXPERTS TALK

The Amazing Age of Oil

Dr Mamdouh G Salameh

International oil economist and visiting professor of energy economics at Europe Business School

hen Edwin Drake drilled one of the world’s first commercial oil wells in Titusville, Pennsylvania, in 1859, he definitely could not have anticipated the tremendous impact his drilling would have on the global economy, civilization and warfare in the years that followed. Since then, oil has been the lifeblood of the industrial world’s progress and standard of living. Innumerable everyday products – from pharmaceuticals to computersdepend on oil and its refining into complex chemicals and plastics. Modern industrial farming, which feeds much of the world, would grind to a halt if it were deprived of dieselpowered tractors, oil and gas-based fertilizers to grow and harvest crops, and the fossil fuels to process, package and ship food to supermarkets worldwide to feed a world population that has skyrocketed from 1.5 billion at the start of the oil age to 7 billion now. There is no doubt that oil is a leading cause of war. Oil fuels international conflict through four distinct mechanisms: (1) resource wars, in which states try to acquire oil reserves by force; (2) the externalisation of civil wars in oil-producing nations (Libya as an example); (3) conflicts triggered by the prospect of oil-market domination such as the United States’ war with Iraq over Kuwait in 1991; (4) clashes over control of oil transit routes such as shipping lanes and pipelines (closure of the Strait of Hormuz or the Strait of Malacca for example). As in the 20th century, oil will continue in the 21st century to fuel the global struggles for political and

economic primacy. Much blood will continue to be spilled in its name as long as oil holds a central place in the global economy. During the 20th century, oil emerged as an effective instrument of power. The emergence of the United States as the world’s leading power during the 20th century coincided with the discovery of oil in America and the replacement of coal by oil as the main energy source. As the age of coal gave way to oil, Great Britain, the world’s first coal superpower, gave way to the United States, the world’s first oil superpower. Yet oil has also proved that it can be a blessing for some and a curse for others. Since its discovery, it has bedevilled the Middle East and the world at large with conflicts and wars. Oil was at the very heart of the first post-Cold War crisis of the 1990s – the Gulf War. Oil’s Firm Grip on the Global Economy Those who are already starting prematurely to talk about the decline of the supremacy of oil should think again. They should look no further than the adverse impact that the collapse of oil prices since July 2014 has had on the global economy. The global economy has not been able to reconcile itself with the collapse of oil prices because the main ingredients that make up the global economy, such as global investments, the oil industry and the economies of the oil-producing countries, are all being undermined. While it is true that low oil prices could reduce the cost of manufacturing, thus helping the global economy to grow, it is a short-term benefit as this is vastly offset by a curtailment of global investment which forces companies around the world to cut spending, sell assets and make thousands, if not millions, of people redundant. There has been a loss of 0.75%-1.00% annually in global economic growth since 2014. The seven major oil companies in the world - Royal Dutch Shell, BP, ExxonMobil, Chevron, Total, ENI and Statoil – need a price of $125-$135/barrel to balance their books. They also need certainty about the future trend Table 1

Net Oil Export Revenues of the Arab Gulf Oil Producers ($ billion)

Countries

2013

2014

2015

Iraq

Kuwait

Qatar

Saudi Arabia

274

208

111

UAE

Oman

Total

574

452

254*

Source: U.S. Energy Information Administration’s (EIA) 2014 Short-term Energy

42 > QATAR TODAY > OCTOBER 2016

of the oil prices before committing themselves to huge investment in exploration and production. As a result of declining oil prices, the oil majors have already sold many of their production assets and have cancelled more than $200 billion in oil and gas investments so far, which will translate in two years’ time into a smaller share in the global oil production. Oil production by the major oil companies: Exxon Mobil, Shell, Total, Chevron and ENI has declined from 11.5 million barrels a day (mbd) in 2003 to 9.5 mbd in 2015. This will be reflected in steeper oil prices in the near future. At prices much below $75 a barrel, some of the North Sea reserves might be too expensive to develop. Some of the UK North Sea’s remaining economically-recoverable resources, estimated at 15 and 16.5 billion barrels (bb) of oil and natural gas, will end up as so-called stranded assets – hydrocarbons that are simply too expensive to develop. Moreover, global investment in upstream exploration from 2014 to 2020 will be $1.8 trillion less than previously assumed, according to leading US consultants IHS. The Arab Gulf oil producers earned $574 billion in net oil export revenues in 2013. My calculations show that they earned an estimated $452 billion in 2014, down 21% on 2013 earnings. Their earnings in 2015 were estimated at $254 billion based on an average oil price of $40/barrel. The Arab Gulf oil producers have lost a total of $320 billion in oil revenues in 2014 & 2015 (see Table 1). Outlook (STEO) / Author’s projections for earnings in 2014 & 2015. Some OPEC countries need very high prices to “break even” in their budgets and pay for all the government spending they have racked up in recent years. Iran, for instance, needs prices at around $130 a barrel while Saudi Arabia needs an oil price of $106/barrel to fiscally break even, up from $98 a barrel in 2014, according to the International Monetary Fund (IMF) (see Figure 1).

Saudi 2015 and 2016 budgets showed deficits amounting to $140 billion and $134 billion, respectively. This is equivalent to 20% of Saudi gross domestic product (GDP) according to the IMF. In less than 18 months, the Kingdom’s Central Bank’s reserves dropped $175 billion from $732 billion to $557 billion. As for the United States, it is doubtful whether the steep decline in oil prices would provide a boost to the US economic recovery. While the price decline would certainly provide the equivalent of a sizable tax cut for US consumers, it will deliver a major blow to the increasingly important US oil industry. At a price of oil less than $60/barrel, the shale oil industry is no longer profitable. This is already causing major investment and employment cutbacks in the US oil and gas industry, which is estimated to employ around 2% of the US workforce. It is also raising the risk of major defaults on the $200 billion in loans that have been extended to the domestic shale oil industry. The cost of servicing that debt has also increased exponentially after a number of operators saw their ratings reduced to junk. The second major downside is that it plunges into recession major emerging market economies like Brazil, Russia, and South Africa. This adversely impacts on the US and global economic recoveries. According to estimates by the World Bank, a 1% decline in the growth of the BRICS economies (Brazil, Russia, India, China, and South Africa) reduces global economic growth by as much as 0.4%. More serious still, the sharp slowdown in the economic growth of the emerging market economies could put into question their corporate sector’s ability to service its $5 trillion debt. That in turn could add to the stresses already appearing in the global financial system. The combination of sanctions over the Ukraine crisis and falling oil prices has adversely affected the Russian economy by sending it into recession and causing the

Figure 1

OPEC Median Budgetary Breakeven Price 140 120

US$ per barrel

100 80 60 40 20 0 Qatar

Kuwait

Angola

UAE

Saudi Arabia

Venezuela

Libya

Iraq

Algeria

Nigeria

Ecuador

Iran

43 > QATAR TODAY > OCTOBER 2016

Source: www.TRADINGECONOMICS.COM FEDERAL STATE STATISTICS SERVICE

COVER STORY

4.8 Figure 2 4.3

Impact of Low Oil Prices on Russia’s GDP

2.1

0.8

1.3

0.9

0.8

0.7

0 2012

2012

2013

Russian currency to lose 40% of its value against the dollar. Russian GDP grew by only 0.7% in the third quarter of 2014 and was forecast by the World Bank, based on an oil price of $78/barrel, to contract by 1.7% in 2015 (see Figure 2). Still, Russia was able to withstand the onslaught of sanctions, declining oil prices and currency depreciation by increasing its oil production from 10 mbd to 11 mbd thus mitigating the adverse impact of low oil prices on its economy and also by having a trump card in China’s energy needs and financial support. In the energy sphere, the two countries are an almost perfect match: the world’s largest net energy exporter and its largest net energy importer with a long land border. Bringing oil and gas via pipelines from Russia would strengthen China’s energy security. It would cut the amount of oil and gas that must arrive along vulnerable transit routes. And while the steep decline in crude oil prices has adversely impacted on the global economy, global investments, the world oil industry and the economies of the oil producers around the world, the world’s biggest oil importer, China, is benefiting from the low prices. However, this benefit can’t be sustained since low oil prices hurt the global economy of which China is a major part. If low oil prices continue, any benefits will eventually be offset by a further slowdown in the global economy which will, ultimately, affect Chinese economic growth and Chinese exports. A continuation of low oil prices leaves no winners only losers. Are We on the Verge of a Post-Oil Era? A few experts have been projecting the advent of the post-oil era within the next fifty years. The underlying assumption is that alternatives to oil would have been fully and cheaply developed by then thus ushering the post-oil era. There is no doubt that global energy’s future is in renewables. Solar power along with other alternative energy sources will ultimately provide all the electricity we need, will power water desalination plants and will drive our transport.

44 > QATAR TODAY > OCTOBER 2016

2013

2014

And while renewable energy sources have made great strides in the last 25 years, it will take their enabling technologies probably 50 years more before renewable energy sources start to have a decisive impact on electricity generation and transport. In 2015, renewable energy accounted for only 2.8% of the global primary energy consumption. And although electric cars have already made their appearance on our roads, it will take many decades before they make an impact on the global demand for oil for transportation let alone replacing oil in the transport sector. Therefore talking about the advent of the post-oil era within the next fifty years is premature to say the least. However, for the Gulf Cooperation Council (GCC) countries – Saudi Arabia, UAE, Kuwait, Qatar, Bahrain and Oman – there would be no post-oil era ever. Contrary to widely accepted wisdom, oil will remain an integral part of the Middle East economies throughout the 21st century and far beyond. Even if cheap alternatives to oil in transport, water desalination and electricity generation were to become readily available in the future, oil will not be left underground because the Arab Gulf oil producers will use it to power thousands of water desalination plants to generate enough water not only for drinking but also for irrigation, thus making the desert bloom again. They will also use it to dominate the global petrochemical industries and any industries in which oil is a feedstock. Conclusions Whilst renewable energy has made great strides in recent years in electricity generation, its impact on the transport sector is still negligible. It will take more than five decades before electric cars could start to make an impression on the global demand for oil for transport. And while experts around the world sit in their ivory towers and project the advent of the post-oil era within the next 50 years, the realities of the situation cast doubt on their projections. So to the question as to whether oil supremacy is on the wane, my answer is an emphatic no. Oil will continue to reign supreme through the 21st century and maybe beyond

affairs > food security

CAN ORGANIC FARMING BE THE

SOLUTION FOR FOOD SECURITY?

FROM TIME TO TIME, THE DEBATE ON FOOD SECURITY IN QATAR, WHOSE HARSH CLIMATIC CONDITIONS ARE NOT MUCH DIFFERENT FROM THOSE OF THE OTHER GCC COUNTRIES, IS RENEWED. IN 2008, QATAR LAUNCHED THE NATIONAL FOOD SECURITY PROGRAM (QNFSP) TO MEET 100% OF THE COUNTRY’S FOOD REQUIREMENTS BY 2030. ONE OF THE WAYS TO ACHIEVE THIS STRATEGY IS THROUGH THE USE OF ORGANIC FARMING TECHNOLOGY BECAUSE OF ITS ECONOMIC FEASIBILITY, ACCORDING TO SOME EXPERTS. BY IZDIHAR ALI

ight months of severe heat, two short months of winter and two months of pleasant enjoyable weather. That is the summary of the climatic condition of Qatar. When Qatar launched the National Food Security Program, it was not given much focus; after all it is quite impossible to make an agricultural project thrive in a desert land. But a few years later we hear news about the emergence of Qatar-based farms and then the announcement that

the number of organic farms in Qatar will increase to six in the coming period in line with the ministry’s goals of expanding organic farming because of its positive impact on humanity, animals and the environment. This was announced on the sidelines of a festival of Qatari organic products held at Al Mazrouah Yard a few months back by Yousef Al Khulaifi, director of the Department of Agricultural Affairs. Al Khulaifi says, “Though the project is still in its initial phase, two organic farms, 45 > QATAR TODAY > OCTOBER 2016

affairs > food security

"Organic certification will be granted after complying with strict monitoring and tracking of the organic farming from the seeding to the harvest period." YOUSEF AL KHULAIFI

Director of the Department of Agricultural Affairs

46 > QATAR TODAY > OCTOBER 2016

Al Safwah and Al Sedra, are already in operation and both have achieved great results.â&#x20AC;? Miracles do happen and if the will and the thrust are given, even miracles seem like a reality. Organic farming is an integrated farming system that strives for sustainability, the enhancement of soil fertility and biological diversity whilst, with rare exceptions, prohibiting synthetic pesticides, antibiotics, synthetic fertilizers, genetically modified organisms, and growth hormones. Organic farming has many benefits, including the protection of soil, water and air, reducing reliance on non-renewable energy and dependence on manufactured products harmful to human health, as well as providing healthy food for humans free of toxic chemical residues. The festival by the Ministry was aimed at introducing locally produced organic produce to consumers and it also featured a chef who served dishes made from these products to consumers. The festival was a good opportunity to promote organic farming in the country. The prices of those products were not high compared with their imported counterparts; the cost was only double the prices of the crops made from conventional farming, despite their high production costs. Therefore, there is a continuous follow-up by the Department of Agricultural Affairs on the farms that want to shift to organic farming through

introductory brochures and field visits to provide technical support. There are a number of requirements to be adhered to by any farm wishing to shift from conventional to organic farming as the transition could take at least two years after the seeding process and the last use of agrochemicals. As for the perennial crops, such as palm, the transition period should be at least three years before harvest to cleanse the soil of all pesticides used before. Al Khulaifi emphasised that the organic certification will only be granted after complying with strict conditions in monitoring and tracking of the organic farming process from the seeding until the harvest period. Great challenges Qatari investor, Ahmad Al Khalaf, said the main challenge for organic farming in Qatar is the hot and humid climate, which makes the success of the project a real challenge. He complained about the lack of availability of soil, water scarcity and the harsh climate, all of which combine to make farming very expensive. Despite the rising production costs, Al Khalaf confirmed that seeking the highest quality starts from selecting the seeds, which enables the Qatari products to compete with the European ones in terms of quality, packaging and price. Nasser Al Kuwari, the owner of the first Qatari farm to shift to organic farming, said: â&#x20AC;&#x153;My farm started organic operations back in 2012. The goal of this transformation was not necessarily financial profit but rather the significant health and environmental benefits of organic farming. I really appreciate the support and help the government is extending to the agricultural sector and, in particular, to this type of farmingâ&#x20AC;?. About the agricultural products of his farm, Al Kuwari said it started with four products: cucumbers, tomatoes, peppers and zucchini. Now, they are producing 28 different varieties of vegetables and plants. Organic farming does not use genetically modified organisms, ionizing radiation, such as X-rays and gamma rays, or preservatives in manufacturing and storing organic agricultural products. So the food reaches the consumer in its natural condition and free of toxic and harmful chemicals that are known to be harmful to human and animal health, while protecting the environment from contamination. The most important activities in organic farming include following the practice of crop rotation, the use of fermented organic

fertilizers, combating weeds mechanically and using biological pest control, to name a few. Government’s support Another Qatari investor, Abdullah Salem Al Sulaitin, the first Qatari to venture into the agriculture sector, said agriculture is one of areas that businessmen don’t like to invest in. “Unfortunately the level of government’s support to the agriculture sector is not sufficient to make it flourish. It is not reasonable or logical to continue to import 100% of Qatar’s requirements of fruit and about 90% of vegetables. The Qatari investor faces many challenges that raise the costs of production, including the climatic factors in most months of the year, lack of water required for farming, lack of suitable land, the high cost of farming materials such as seeds, fertilizers, water and irrigation systems and packaging, the high cost of electricity consumption by farms, and the dramatic rise in the cost of labour, in addition to hefty fees the government collects from farmers for visas, medical examination and RPs. In addition to that, the pricing imposed on the local products is below cost and less than that of the imported products. All of these factors have led to significant and unfair competition with the imported products and the poor support services provided by the agriculture authorities contributed to the deterioration of the agricultural sector and the reluctance of many farmers to produce, thus wasting the country’s resources of land,” says Al Sulaitin, adding that: “Food security and production is one of the most important issues in the Arabian Peninsula. The GCC dependence on imported food is expected to increase from $24 billion in 2008 to $49 billion by 2020.” The steep rise in food prices in 2007 and 2008 made the GCC governments and some investors seek to buy agricultural land abroad to enhance food security in the future. This initiative caused food prices to decrease in early 2009. But so far it seems that the Gulf countries will depend primarily on food imports. Yet, when provided with various development tools, Qatari farmers can quickly contribute to food security by producing vegetables, meat, poultry and dairy products. Qatari businessman and chairman of the International Projects Development Company (IPDC), Ahmed Hussain Al Khalaf, said: “The concept of food security involves two factors: strategic inventory

"The pricing imposed on the local products is below cost and less than that of the imported products." ABDULLAH SALEM AL SULAITIN Qatari investor

and storage. Strategic inventory means storing whatever can be stored for the longest period possible and producing whatever can be produced from local materials. This is the philosophy of food security. Strategic storage means storing imported raw and agricultural materials that can not be locally produced for the manufacture of food. "Strategic storage in this sense does not only consist of warehouses and silos, which should be located in the country’s main port, but also transportation, a key logistic factor to ensure the flow of these materials to the country’s main warehouses which constitute the backbone of food security projects.” “The food industry that we seek can only be built through this system,” he added. The project evolution Nasser Hussain Al Khalaf, director of the IPDC farms in Al Khor, said: “We were the first to build a greenhouse with an area of 40,000 square meters for the production of vegetables. We embarked on the project and built the first 20,000 sq.m hydroponic greenhouse. Due to its commercial size, it wasn’t a laboratory but rather an experimental farm that can produce organic vegetables free from any chemical 47 > QATAR TODAY > OCTOBER 2016

affairs > food security

"The concept of food security involves two factors: strategic inventory and storage." AHMED HUSSAIN AL KHALAF

Chairman of the International Projects Development Company (IPDC)

compounds.” “This project produced four types of vegetables: cucumbers, tomatoes, peppers and zucchini. The project objective was also to try to grow vegetables during the summer period, especially because Qatar is characterised by a severer climate than that in other Gulf countries as it is extremely hot and humid throughout the long summer months,” says Al Khalaf. As we all know, even greenhouses cannot continue to produce during the long summer period in Qatar. For this reason Al Khalaf and his team created a special cooling system that made it possible to produce throughout the year. “In fact, unlike many countries in the world, in Qatar and the GCC there are generally two rather than four seasons, as we only have summer and winter. In winter you can produce crops without the use of external factors, whereas the long summer months are hotter and therefore need many supporting factors. In other words, there are actually eight hot months that need external factors,” he says. The first experiment was a success and then they expanded to build another 20,000 sq.m greenhouse. “We even tried to grow cucumbers using a different cooling method from the first 48 > QATAR TODAY > OCTOBER 2016

experiment.” “We continued the project development and built the largest greenhouse (possibly) in the Middle East with an area of 40,000 square meters. We also developed our proprietary agricultural technology in cooperation with third parties. Our efforts continued by starting a more advanced project, that’s constructing the fourth and 100% Qatari greenhouse. We have developed the new system to ease the cost as the lower the cost, the more economically and profitable the product is. We also developed a system climatically and environmentally suitable for Qatar at the lowest cost possible to come up with this system, which we are now trying to present to other producers as a model of a pilot investment experiment in this area and as a vivid practical and scientific example.” “This fourth project was the same as previous ones, but we split it into two systems, each with an area of 10,000 sq. m: a closed greenhouse system and a semiclosed one and we also utilized the space between the two greenhouses. The cost of the semi-closed one is less and can produce during nine months, while the closed one can produce throughout the year (during 12 months) due to the use of an integrated cooling system in which we were able to balance the cost and production. Therefore, this system makes the project more profitable,” he says. Marketing the goods Nasser Al Khalaf believes that marketing is an important and essential step of the whole process. “We are experienced and well established in the field of marketing. Our 65-year experience gave us strength, so we are committed to buy the products of farmers and investors throughout the season, which gives them a sufficient guarantee to make a profit from day one. Khalaf has more plans for expansion: “We are working to produce some fruits within our agricultural cycle and plan to experiment with the poultry, dairy and livestock project,” he adds. “The first pilot project cost was a whopping QR40 million. The cost proved to be uneconomical, but the goal was to test the system, because the real problem in farming in Qatar is not water or soil, but air conditioning of the greenhouses since we have to maintain the temperature between -15C and 30C and keep humidity within the range of 70 to 80 degrees to produce most types of vegetables throughout the year.” The Qatari market has started to receive

the first local organic mushrooms from Agricultural Development Company (Agrico), which is currently producing one tonne a day but will produce three tonnes within a short period of time. “Our local mushroom production ranges between five and seven tonnes per day, which enables the company to cover 70% of the domestic requirements during the next six months,” explains Al Khalaf. IPDC is producing mushrooms using 100% Qatari technology. The company brought only the necessary equipment but it undertook 100% of the required construction and industrial works, thus helping to nationalise this technology, reduce the cost of high-quality mushroom s and make it available in the market at a lower price compared to the imported products from neighbouring markets, Europe and Asia. An amount of QR50 million has been allocated for the first and second phases of the project. The second phase is currently being implemented and the actual production is expected to start after six months from now. He added that there are a large number of projects in the GCC that started up to 10 years ago to produce mushrooms in Oman, Saudi Arabia and the UAE. “But the private sector has recently started to venture into mushroom farming in modern farms, and we were blessed to be the first to begin production using modern methods, which sets us apart from others, not only in Qatar but also in the entire region. In fact, what sets us apart is that we produce the most basic material for mushroom farming, which is soil, while all other farms import it,” he maintained. He stressed the importance of producing the soil locally as it has several benefits including reducing cost and being safe to human health because it is organic. That’s the case in all their projects as their farm is totally organic. Regarding the start of production, he said: “The farm has already started production and the market is receiving one tonne of mushrooms a day. The production volume will increase according to our plan for the coming period to up to three tonnes per day as the local consumption ranges from 3-5 tonnes per day. This means that we can cover 70% of the local needs after the next six months. The volume of our soil production is five tonnes so we can supply it to the other Qatari farms instead of importing it because it has many advantages: it is organic, locally produced,

"We also developed a system climatically and environmentally suitable for Qatar at the lowest cost possible." NASSER HUSSAIN AL KHALAF

Director of the IPDC farms in Al Khor

costs less than imported soil and, most importantly, we can supply it regularly and on time because the market can’t wait for the farms to receive their soil and to then start production. We also aim at encouraging the farms to produce mushrooms not only to cover the local market, but also to export them to the neighbouring countries instead of importing them.” Al Khalaf stressed that the work is ongoing to meet the needs of the local market this year, hoping to start exporting the surplus production abroad, as part of the company’s commitment to the country’s plans for self-sufficiency and achieving food security. Al Khalaf explained that QR90 million was allocated for the first and second phases of the project. The second phase is currently being carried out and the beginning of the actual production is expected to be after six months. The overall area of the project is around 120,000 square meters, which is enough to produce eight tonnes per day. “There is a comprehensive plan to expand mushroom farming and we encourage others to do the same. We are working to encourage the others to take advantage of the technology that we provide at a lower cost. There is a huge market eager to import and Qatar can meet those needs due to its strategic location,” he concluded 49 > QATAR TODAY > OCTOBER 2016

affairs > tag this

BIG DREAMS, BIG DATA HAMAD BIN KHALIFA UNIVERSITY’S QATAR COMPUTING RESEARCH INSTITUTE (QCRI) IS HELPING BRING THE BIG DATA DREAM A LITTLE CLOSER. THROUGH THE HOME-GROWN RHEEM SYSTEM, DR JORGE-ARNULFO QUIANÉ-RUIZ AND THE DATA ANALYTICS TEAM AT QCRI HOPE TO INSPIRE MORE LOCAL BUSINESS TO TAKE A LEAP TOWARDS THIS EXCITING FUTURE. BY AYSWARYA MURTHY 50 > QATAR TODAY > OCTOBER 2016

ver here at Qatar Today we have been almost fanatically reporting and writing about Big Data and the Internet of Things in the past few years. It was impossible not to, considering how technocrats seem giddy with excitement preaching the incredible potential of this technology. In Doha, which hosts some top -level conferences and exhibitions across sectors, it’s been increasingly difficult to drop in at Meeting Room A or Hall 342 and not hear about this impending tectonic shift in the way we live. We are waiting at the edge of a technological leap, apparently. But once you step out of the pristine, airconditioned seminar rooms in Education

City and into the heat, dust and reality, this vision of the future is less clear. Qatari businesses still seem to be waiting on the sidelines. It calls for a significantly qualitative (or “disruptive”, as the kids are saying these days) shift in business that might be scary for some. Or maybe businesses here feel that the time isn’t right yet (though certainly no one would admit to this thought). Either way, Qatari corporations have been largely silent about the data they collect and how they use them. We should know – we asked many of them. It was therefore enthralling to hear tangible examples of Qatar Inc.’s tentative foray into Big Data applications during our chat at Qatar Computing Research Institute (QCRI), a research institute of Hamad bin Khalifa University, with Dr JorgeArnulfo Quiané-Ruiz, who leads the team that developed RHEEM. This application reportedly solves a substantial problem that businesses encounter when they try to dabble in Big Data, viz. processing data from different platforms where they are mined, categorised and stored differently. Companies can add as many new features as they want, on the fly, as well as replace or supplement existing platforms quickly. In other words, businesses can now stop worrying about HOW to query all these terabytes of data but instead start thinking about WHAT to query. For example, a telecom provider might have several platforms to analyse different sets of data – one gathered from social media that tracks their service levels and satisfaction. Another set of data of existing customers can be used to analyse preferences and promote offers. Another is used to improve infrastructure and services and a fourth may be used to attract potential customers. An executive shouldn’t have to worry about how many platforms they

A telecom provider might have several platforms to analyse different sets of data – one gathered from social media that tracks their service levels and satisfaction, another to analyse preferences of existing customers and promote offers. Another is used to improve infrastructure and services and a fourth may be used to attract potential customers. 51 > QATAR TODAY > OCTOBER 2016

affairs > tag this does or they are still in an incubation phase” says Dr Quiane-Ruiz. “The application has been well-received at top conferences on databases where we have presented research papers and a system demonstration” he says. This is a good sign for the project.

RHEEM can be used as the infrastructure to easily deploy algorithms for analysing the data on the spot with a human expert only required to verify the results. DR QUIANE-RUIZ Team Lead, QCRI

52 > QATAR TODAY > OCTOBER 2016

have, but be able to query all data and receive accurate and useful information. This is where RHEEM can be utilised. Dr Quiané-Ruiz explains: “The idea for the application was conceptualised a couple of years ago when we found that almost every time we wanted to implement a new application, we had to learn a new platform. There are many platforms out there to deal with data, and it’s usual to choose and learn one of them to get good results. But a single platform would not be adequate for different use cases as we make platforms specific to certain needs, e.g., whether you are dealing with temporal data, volume of data, etc. Across all these platforms, one paradigm didn’t, and couldn’t, fit all. We spent a lot of time learning these platforms and realised that enterprises were also suffering because of this. Any big company would have different applications and hire experts for the different platforms, which proved to be tedious and very expensive. We wanted to do it better.” RHEEM has been under development for a year. QCRI currently hosts this open source project and it is expected that many other organisations and developers will join in the efforts to help it evolve further. “Currently there is no real equivalent of RHEEM in the market. While there are similar approaches, we can say QCRI is a leader in this domain. Several institutions like MIT and Cambridge University, and companies, like Intel, IBM and Facebook, are all working on this. But either they do not provide all features RHEEM

Big Data in Qatar RHEEM was developed to target a broad spectrum of industries and applications and QCRI is working with several local organisations to stress-test the app and come up with a proof of concept. For example, the team is working with an airline to help them optimise certain operations. “To take one case, this company is interested in streamlining the cargo booking process. This is usually done by a group of specialists who manually analyse each booking and decide whether to accept or not based on several factors like contents, volume, flight capacity, etc. With rapid growth, the operation has grown many-fold and needs to be managed systematically. RHEEM can help by automatically analysing huge amounts of booking records (which run into millions) and learn from it to approve/decline bookings, with the goal that each airplane is always full of cargo but not overloaded so as to optimise fuel costs. They have been achieving good results” he says. In order to help companies understand how RHEEM can help their businesses, irrespective of size, QCRI is also working with local community website, Qatar Living. Every day, the growing number of residents in Qatar post hundreds of questions on the forum: Where does one get the best shawarma? What are the rents going to be like next year? What is the process to renew one car registration? Today community members reply to questions based on their experience and expertise. With the help of RHEEM, these questions can be answered automatically after analysing the website data and also information available on the web and this can be done in the order of a few seconds. In another exciting and tangible case study, QCRI is collaborating with a local research institute that is a world leader in connected vehicle technology. For Qatar Mobility Innovations Center (QMIC), RHEEM could be a perfect fit, according to Dr Quiane-Ruiz. With a goal of improving traffic and road safety, QMIC has been collecting and analysing data through Bluetooth sensors placed on the roads. This data is used to track vehicles, analyse

apps

To process and analyse Big Data one needs at least two fundamental layers – a data processing platform and the application implemented on top of it. RHEEM separates these two layers and puts itself in the middle. It’s a translator between the applications and the platform. Rather than dealing with many platforms, you now have a single system that matches all your needs.

ML 4 ALL

NADEEF

CROSS-PLATFORM OPTIMIZER

RHEEM OPERTORS

core

Possibilities and challenges Today, all sectors have realized the potential and benefits of Big Data technology, says Dr Quiané-Ruiz. “Equally. From sports to MNCs, everyone is trying to incorporate more analytics into their business models. They know they can do it, and they should do it but most don’t yet know how,” he says, underscoring the growing pains this technology is experiencing across the world, not just in Qatar. For example, many companies continue to collect and store data, anticipating that they can get insights from it. But often the data is just sitting there. “That’s the big problem we have today and research companies around the world are involved in trying to make sense of this data and figure out how to analyse it fast,” he says. He doesn’t deny that some sectors need more education on how to treat Big Data to our benefit. We are yet to fully realise some of the immediate applications of Big Data – from improving driver behaviour to customised marketing. “When we think of educating road users, we immediately picture ad campaigns but not data leveraging. There are insurance companies in the US that use applications to track each driver and give them hints and try to improve their driving. With improved skills, the premium will go down. This results in fewer accidents, which not only helps the insurance companies make more money but it also benefits the public,” he says while illustrating a simple case study. Big Data’s preventive rather than reactive nature will eventually find crucial application in the medical sector – both in laboratories (in an example pertinent to Qatar, in analysing genome data which are typically huge) and hospitals. For all this to fall into place, you need tools (like the ones QCRI is developing) but you also need experts who can prepare, understand,

THE STRUCTURE OF RHEEM

ENGINE

platforms

their path and predict traffic. Even with small databases, this is a laborious task and creating appropriate algorithms can take several months, he says. Now with the connected vehicles project ramping up and heading closer to implementation, QMIC has to deal with more sensors and the huge amount of data resulting from them. “These volumes are beyond the scope of human analysts. But RHEEM can be used as the infrastructure to easily deploy algorithms for analysing the data on the spot with a human expert only required to verify the results,” he says.

EXECUTION OPERTATORS

and analyse the data. RHEEM only solves one part of the equation by simplifying the tools and making them more efficient, but the Data Analytics Centre at QCRI is also working on the other part in the context of other in-house research projects. To a large extent, this is not the case of academia working to meet the needs of businesses, but businesses and society trying to catch up to the dreams of science. Dr Quiané-Ruiz explains that with their research agenda complete, the team will start educating enterprises on how exactly the system can impact bottom lines. This will complete RHEEM’s own capabilities in this direction, which is also being continuously developed. “We are currently in the process of stabilising the system. We hope to launch Phase 2 in the summer of 2017 where we will start approaching companies directly and show them what Big Data can do for them. The interest from the business community is present; our presentations in conferences and media outreach have been well received, with organisations approaching us with their problems, asking how RHEEM can help. It’s just a question of time,” he says 53 > QATAR TODAY > OCTOBER 2016

affairs > tag this

INTERNATIONS QATAR BRINGS TOGETHER PEOPLE FROM ALL COMMUNITIES IN A NEW LAND TO EXPLORE OPPORTUNITIES AND MAKE CONNECTIONS. BY KEERTANA KODURU

54 > QATAR TODAY > OCTOBER 2016

MELTING POT OF CULTURES " Q atar as a nation has a futuristic vision and believes in preserving its religious and cultural heritage," says Mark Thomson, Ambassador of Internations Qatar. Thomson recalls a time back in 2010, when he initially moved here and there wasn't a specific community for social networking. "The national vision 2030 and the 2022 plan were in place. To be honest, there wasn't much happening. Coming from a busy lifestyle in Dubai, I was devastated and wanted to get out in the first six months." But that was before he understood that Qatar was stereotyped as being a stricter

place to live in when compared to Dubai, "but it is only a notion and this is a much more open country than others would like to believe. This country empowers people to thrive in sports, arts and cultural development," he says. "When expats move here, they are generally unaware of the culture, religion, etiquette, norms and social habits of the country; what to do and what not do. I believe people can achieve so much more if they get to know one another and cooperate in identifying common objectives and goals which can help on an individual as well as a group level. When you collaborate and work together, we can all collectively achieve a lot more for the country we live

My higher strategic objective was to help integrate western and non-western expats with the local culture; basically to bring all nations together. MARK THOMSON Internations Ambassador

in, pushing it towards development and growth. I looked around and identified that there was a need to bring people together on a social platform," explains Thomson. The foundation A networker by nature, a wanderer who has travelled 14 countries so far, a strategist and advisor who works closely with the government agencies by profession, Thomson founded Internations, a community for expats to network and socialise, which is popular worldwide but was still at a nascent stage here in Qatar. "I started to gather people here through social events and was then approached by Internations to become an Ambassador for the Qatar chapter. I took over in 2010 and started getting people together for multiple reasons." The group gives access to a lot of information for expats and newcomers about how to find a home, school, car, insurance, life and death formalities, Ramadan etiquette, Eid celebrations, etc. "We built a network to make people feel like a home away from home. My higher strategic objective was to help integrate western and non-western expats with

the local culture; basically to bring all nations together. We are absolutely open to everyone from any religion, culture, ethnicity, background or professional and personal preferences." "You can sit here and be a victim of your circumstances or take life by the horns and do something about it," says Thomson and that set him to organize activities and events to encourage local tourism such as boat trips, beach trips and fishing trips. The group doesn't involve itself in any commercial activities. One of my proudest achievements is a professional networking group on the Internations platform. This network comprises 200 nationalities and encompasses many experts that utilise their expertise in strategic opportunities; I invite them once a month to speak, educate others and transfer their knowledge to individuals seeking information on how to develop themselves. We also help people find and post jobs. We have a book group, running group and around eight dining groups. We keep it absolutely real and transparent by creating proper profiles without any fake personas, names and pictures." 55 > QATAR TODAY > OCTOBER 2016

affairs > tag this Organising events on such a large scale with over 40,000 members (the current number of members at Internations) can be quite the task. "I organise three major events every month for people to come together and build a network that is growing every week. There are smaller groups ranging between various interests like running, reading, dining, etc., who meet more often. "A counsel is assigned to each group who manages activities specific to the group's interest and Thomson as an ambassador oversees the functioning of these groups and their events.

The lack of identification of the potential to bring about creativity and to bridge cultural and language differences seems to be a concern. 56 > QATAR TODAY > OCTOBER 2016

Charity with restriction Internations also has a volunteer group that helps environmental causes through events such as beach cleaning, planting trees and charity drives. "Drive for Good is one such campaign organised for the migrant workers where necessities are delivered to their camp. "We load our cars and drive towards the camps. Each of us brings something for the people who need it. We've delivered over five tonnes of goods to the migrant workers each time, to show solidarity that we are all equal and we are here to help." The group also volunteers at the animal shelters, dog walking and donating from time to time. "We are looking after the environment, man and animal. On any given day of an event, we get about 100 people to participate for every event that is connected with the 40+ groups," says Thomson. Volunteer groups in Qatar are constantly looking for support from government entities. "We are seeking help from national entities and the Red Crescent." "I've asked through various mediums of communication such as TV, radio, media, etc., but there seems to be a gap. This is not lack of interest but lack of initiative. The lack of identification of the potential to bring about creativity and to bridge cultural and language differences seems to be a concern. All of us are willing to go out of our way and lend a hand, keeping in mind that we have to work within the limits of the law." "We have teachers who can teach needy kids, we have doctors who can help out in camps; we are active and we want to participate." Internations is now looking to engage with think tanks, social discussions and open a platform for free interaction and exchange of ideas and thought processes. 'Reflect your Respect' was one such

programme that was launched by the government to make people aware of the culture and tradition here, focusing on dress sense, culture, religion and traditions during the Holy Months which could've garnered the right support if this was explained through community meetings," explains Thomson. Leadership goals How is Internations different from other community networks? Thomson answers: "The doctrine is the same and it is all about a social network for expats connecting people and their interests. How it is applied is up to the local ambassador; I could do one event a month or I could be an active community leader getting together with people preserving the environment, creating opportunities for a better today and tomorrow. It is up to me as a person as to how to utilise that power." "There are 390 ambassadors worldwide. It's not just a social network to attend parties, but about using the skills and diversity to benefit the people that we live with. We are bound by the laws of the land here that restrict us from having other kinds of groups that are found in Europe related to entertainment and personal preferences." All groups on the Internations network are approved by the head office, taking the local ambassador's opinion into consideration. There is also a quality group that checks posts and statements, regularly imposing bans on members if they cross the line. Word of mouth, exposure and media attention on the good deeds that they do are all factors on the path of success for Internations. "It is important for people to network in a safe environment. You either stay in your comfort zone or step out of it and connect with the world â&#x20AC;&#x201C; it's up to you." Members of the Internations community can attend events all over the world. If an expat is moving to another country, it's as easy as changing the country preference and posting questions on their forums. About the growth of Internations Qatar, Thomson says, "As long as there are people coming in, the network will continue to grow. I see it as a strong NGO partner. Finding the right people to collaborate and the right entities from the government is very difficult and we hope that someday someone will call us and say, Let's work together!" Website: www.internations.org/qatar-expats Facebook: Internations Qatar

green scene > viewpoint

IF COP 22 IN MARRAKESH IS NOT SUCCESSFUL, THE PARIS AGREEMENT MAY BECOME THE NEXT KYOTO PROTOCOL.

58 > QATAR TODAY > OCTOBER 2016

ith COP 22 in November 2016, the parties to the UNFCCC will come to Marrakesh for their next round of negotiations. This is also the second time the conference is being held in Morocco after COP 7 in 2001. The Paris Agreement, reached at COP 21, was a triumph of diplomacy, a huge milestone in the world’s effort to launch a global response to climate change. But it was also very high-level focusing on the

broader strategies. The Paris agreement was a major tipping point, but it did not specify exactly how we’re going to keep the rise of temperatures “well below” 20 C, as the legal text requires. This is where Marrakesh comes in, where representatives from the 197 countries that were part of the Paris Agreement will be working to enable and push countries for climate action in the pre-2020 period, before the agreement is expected to come into effect.

If Marrakesh is not successful, the Paris Agreement may become the next Kyoto protocol. Kyoto was adopted almost 20 years ago and was considered a political success story. Despite formally achieving its targets, it has not been very effective in bringing down global greenhouse gas emissions. Priorities for COP 22 in Marrakesh Among the key issues to be addressed in Marrakesh including enhanced National Determined Action Plans (NDCs), there is currently no common methodology to monitor the national commitments, which hinders the transparency of the Paris Agreement’s implementation, capacity building and the provision of climate finance to developing countries. Also strengthening technology cooperation between countries will promote economic growth and sustainable development. Last but not least, it is fundamental that all countries can develop efficient climate change policies, and have the means to implement them. Marrakesh in this context offers huge opportunities to the world’s community of over 196 countries to demonstrate real commitment from developing and developed countries in line with UNFCCC objectives. With considerable progress in Paris Agreement ratification and the recent ratification by the US and China enhancing the urgent call for climate action, an obvious overarching question of this year’s meeting will be the time at which agreement will likely become operational. The original time frame of 2020 could feasibly be shifted to an earlier date in line with these recent developments. Qatar at COP22 Qatar marked the historic Paris Agreement when H E Mohammed Al Rumaihi, Minister for Municipality and Environment, signed it in New York, though there is still no word on ratification yet to date. Meanwhile, neighbouring UAE has ratified the Paris Agreement to become the first GCC country to do so, according

to the latest media reports. Qatar identifies itself under Article 4.8 of the UNFCCC as one of the countries with special consideration whose economies are highly dependent on income generated from fossil fuels and associated energy-intensive products. Qatar did mentioned that it reserves the right to further elaborate and update its Intended Nationally Determined Contributions (INDCs) in line with its special national circumstances and sustainable development imperatives with a view to avoiding any adverse effects of the economic and social consequences of response measure. The actions outlined in Qatar’s INDCs seek to bring changes in economic diversification and build a knowledge economy. Not taking action will have implications for Qatar and the GCC countries at large, which will experience a 2° C to 3° C increase in temperatures by the middle of this century as per the latest IPCC reports. Low oil prices presented an opportunity for Qatar and the Gulf states to embrace solar power and renewable energy. The cost of solar power has become much cheaper and is a sector that can provide jobs and positively impact the economy.

NEESHAD V S Co-Founder & National Coordinator, Arab Youth Climate Movement Qatar (AYCM Q) & Middle East Manager, CliMates

Beyond COP 22 The legacy of Marrakesh will undoubtedly be determined by how concrete the actions are from the result of COP 22. Marrakesh is also an opportunity to re-embrace the role of all parties to the Paris Agreement in working towards the eventual goal to limit global warming below 20 C. We need a wide range of breakthrough innovations to transform how we live, what we consume, and how we do business while creating new economic growth and jobs. We need to change the system, and we need to do it in all countries on the planet. Though the goals may be valiant, they will be achieved mostly through an endless accumulation of small gestures. Those gestures are in our hands. Or they could be if we learned to see the true scale of things, including how we can grow together 59 > QATAR TODAY > OCTOBER 2016

affairs > tech talk

NO MORE LIMITS FOR TWITTER

“We applaud Unicode for the diversification of emojis in recent years. However, this does not mean it should stop now. With the amount of difference in this world, we must be represented.”

Twitter announced that it was easing its 140-character limit on tweets, implementing a policy announced in May to no longer factor certain add-ons including pictures into a message’s length.

he new policy exempts media attachments such as photos, videos and polls from the character limit, as well as tweets that are quoted in a retweet. Amid reports that Twitter may be seeking ways to cut costs or even sell itself, the San Francisco-based service has been adding new features including live video. The latest move eases but does not entirely eliminate the 140-character limit, which was set due to mobile phone text messaging constraints in place when Twitter launched in 2006.

15-year-old Rayouf Alhumedhi scrolls who drafted a proposal submitted to the Unicode Technical Committee to requests the addition to new emojis like “woman in headscarf/hijab” to better represent the roughly 550 million Muslim women who wear the hijab.

EU DEMANDS BACK TAXES FROM APPLE

Apple has been slapped with a record-breaking Ä13 billion bill in back taxes to Ireland by the European Union.

60 > QATAR TODAY > OCTOBER 2016

he European commission ruled that a sweetheart tax deal between Apple and the Irish tax authorities amounted to illegal state aid. The commission said the deal allowed Apple to pay a maximum tax rate of just 1%. In 2014, the tech firm paid tax at just 0.005%. The usual rate of corporation tax in Ireland is 12.5%. “Member states cannot give tax benefits to selected companies - this is illegal under EU state aid rules,” said the European competition commissioner, Margrethe Vestager, whose investigation of Apple’s complex tax dealings has taken three years. The commission said Ireland’s tax

arrangements with Apple between 1991 and 2015 had allowed the US company to attribute sales to a “head office” that only existed on paper and could not have generated such profits. The result was that Apple avoided tax on almost all the profit generated from its multi-billion euro sales of iPhones and other products across the EU’s single market. It booked the profits in Ireland rather than the country in which the product was sold. Both Apple and the Irish government were appealing a ruling last month.

MAKING TECHNOLOGY ACCESSIBLE BrailleEasy, a custom one-handed Braille keyboard developed in Qatar, has now been launched on the iOS App Store.

screen. The application was developed by researchers at the Qatar Computing Research Institute (QCRI). Stephan Vogel, the Research Director of QCRI’s Arabic Research Technologies, said the app was released for free and its code has been released as open source. “The idea is to send BrailleEasy out into the community so that other developers, both local and worldwide, can add to it, improve it, adapt it to other languages,” Dr Vogel said.

he app combines the comfort of one-handed typing with the speed of two-handed Braille-like typing, and can be used by both Arabic and English-speaking users. It comes with an extensive tutorial that walks the user through step by step, the set of gestures is easy to learn and execute, and being self-voicing makes it possible for those who do not depend on screen readers to use it fully. It also paves the way for those with limited hand movement to type in Braille on their touch

CAR TECH CONNECTED CARS WILL SOON BE PLYING THE DOHA ROADS AS PART OF A PILOT PROJECT BY QATAR MOBILITY INNOVATIONS CENTER (QMIC ) NEXT YEAR.

The testing will hopefully lead to a commercial rollout of connected technology in Qatar vehicles by 2019. The first phase of the QatarV2X (V2X) will comprise of 30 to 50 equipped vehicles and 20 to 30 roadside units. The V2X pilot will likely be timed with GM and Toyota’s international launch of such services in their 2017 models, QMIC said.

HANDHELD HAJJ

he Ministry of Awqaf and Islamic Affairs has launched an updated version of a mobile application for pilgrims from Qatar to help them remain connected with Qatar’s Haj Mission in Makkah during the pilgrimage. The app ‘Hajj Guide’ is available on Android and Apple store and will help pilgrims send their location to the mission in case they lose the way, according to Qatar News Agency. “The app will enable the pilgrims to directly contact the help desk at the mission and send their location if they need any help,” said Abdul Hadi Obaid Al Marri,

SAMSUNG UNDER FIRE

Head of IT Unit at the Mission. “The help desk could be contacted through the app on 132 from Qatar and 8003040444 from Saudi Arabia,” he added. The app includes several services like details related to the Hajj including rituals, Fatwas, prayers, information about Haj tour operators and important telephone numbers for hospitals operating in Arafat and Mina. To track the movements of buses ferrying pilgrims from Qatar to Saudi Arabia a GPS system is being installed and connected with the IT unit of the mission.

The US Consumer Product Safety Commission announced a recall of around one million Samsung Galaxy Note 7 smartphones plagued by incidents of batteries bursting into flames. The move by the US safety agency formalizes the recall underway in 10 countries after reports of faulty batteries that caused some handsets to explode during charging. In the United States, there have been 92 reports of batteries overheating, including 26 reports of burns and 55 reports of property damage, including fires in cars and a garage, the commission said in a notice. The US notice affects around one million of the global total of 2.5 million handsets being recalled, which has cast a cloud over the South Korean electronics giant and world’s largest smartphone vendor. In Qatar, the Ministry of Economy and Commerce has said to “immediately stop using and selling the device” and to contact Samsung at 8002255 for a refund and return.

61 > QATAR TODAY > OCTOBER 2016

affairs > tech talk

The power of

online reviews In our connected world, hardly any consumer would imagine making a purchase, online or even offline, without first checking peer reviews. The effect of such electronic word of mouth (eWOM) on sales has long been proven. A new academic article examines the precise ways platform and product characteristics shape the effects of eWOM, providing crucial insights for companies on how to manage it better.

62 > QATAR TODAY > OCTOBER 2016

efore picking a movie, you probably check reviews on IMDb. Before booking a hotel, you probably read comments on TripAdvisor. When ordering a book online, you probably check vendor ratings on Amazon. The list goes on. Information published online about goods, services or brands in the form of user comments, ratings, reviews, video testimonials, or other consumer-generated content (termed “electronic word of mouth,” or eWOM) is one of the most significant developments in contemporary consumer behaviour. With some three billion consumers and seven billion devices connected to the Internet eWOM has become ubiquitous and accessible, turning consumers into ‘web-fortified’ decisionmakers." Electronic word of mouth is not limited to user reviews: even photos of people using branded products that are posted on Instagram or Facebook can

be considered eWOM, according to Ana Babic Rosario, one of the researchers. All consumers are exposed to some form of electronic word of mouth, whether they are seeking it out or not, at some point in their consumer journey, just because they spend so much time online. Studying the effect on the bottom line The significant impact of eWOM on corporate bottom lines has been heavily documented over the past 15 years. There is a very strong effect of eWOM, not just on online sales but also in regular stores. That is why companies work at inducing, collecting and displaying eWOM as part of their efforts to stimulate sales. The average billion-dollar company spends $750,000 per year on earned (user-generated) media. However, despite the recognised market relevance of eWOM, many professionals have not yet determined how to manage eWOM successfully. The fact that empirical studies

disagree on how online platforms, products or features of eWOM (such as volume or positive or negative nature) moderate effects on sales is part of the problem. To help marketers make more informed decisions about word-of-mouth management, Ana Babic Rosario and her colleagues conducted a meta-analysis that offers a comprehensive synthesis of multiple studies. By compiling the results of a diverse sample (covering 40 platforms and 26 product categories), they were able to encompass many more contexts and investigate dimensions of eWOM that were not part of the primary studies. For instance, to evaluate the effect of platform characteristics, the researchers even went so far as to use an Internet archive called the Wayback Machine, which allowed them to see a snapshot of what the platforms looked like in the past. An unquestionable effect on sales There is a significant and positive relationship between eWOM and sales, a result that was consistent across different platforms and products. The sheer volume of interactions, regardless of their positive or negative nature, was the most important measure across different scenarios. The underlying dynamic that explains the effect of eWOM on sales is the bandwagon effect, in which the mere availability of other consumer opinions influences others. Unsurprisingly, “valence” (the favourable or unfavourable nature of the review) also has an effect, but negative comments are less harmful for sales than one might think. After all, wouldn’t unanimously glowing reviews look suspicious? Marketers believe they should have no negative reviews, so they often want to minimise them, but in fact intense consumer disagreement – the scenario where some consumers love a product and some hate it – is more dangerous. The reason why eWOM variability can harm sales more than negativity is that eWOM, in theory, is a way for consumers to reduce risk and uncertainty – which does not happen when other consumers’ feedback is highly inconsistent. It is important to note, however, that polarized consumer opinion is a more important problem for companies “aiming at a mainstream consumer base” than for those shooting for a “niche, not intended to please everyone.” The effect of product and platform characteristics

The analysis was fine-tuned to examine which product and platform features shaped the overall effect on sales. The effect of eWOM was more pronounced on new products than on mature products, which comes as a result of consumers’ desire to reduce the uncertainty associated with a product in the early stages of its life cycle. Regarding platforms, eWOM was more effective on e-commerce platforms than on social media. Even though it is challenging to interpret such results without breaking them down to the level of individual decision-making, we believe that the overall finding is linked to the difference of what stage each platform is used at during the consumer journey. When you’re looking up eWOM on an e-commerce platform, it is likely because you’re already close to finalising the purchase. Meanwhile, the effect on sales of social media eWOM increases when receivers can assess their similarity to senders, based, for example, on the username or geographic location. When you see that a user similar to yourself has liked a company page on Facebook, it will drive your purchase decision, so in general it is a good idea for companies to provide more of such information to their users. Such details about users are cues to credibility in a merciless online world where fake reviews are not unheard of. Among other factors, eWOM effectiveness tends to be higher when eWOM is more prominently placed on a page (no need to scroll down) and lower when the display of eWOM is structured (with titles or a classification, as opposed to bundles of information). Applications for managers The strongest point of this research is that there is not just one single kind of eWOM; predictions will vary across different online platforms and types of products. Overall, the phenomenon is more complex than when the Internet was popularised 20 years ago, and managers must not disregard this complexity. For instance, product managers should pay particular attention to the financial risk associated with their good or service and the stage in the product’s life cycle. It is particularly relevant to monitor comments on e-commerce and review platforms in the early stages of the product life cycle. Meanwhile, platform managers could encourage consumers to provide more information about themselves and bring eWOM to the forefront without overstructuring it

BY ANA BABIC ROSARIO, HEC PhD and Assistant Professor at the University of Denver and KRISTINE DE VALCK, Professor of Marketing, HEC.

METHODOLOGY The authors conducted research through a meta-analysis using data from 96 studies; in these primary studies, data were collected from more than 40 different online platforms including Amazon, Netflix, Facebook and Allocine. fr, covering 26 product categories. They operationalised the sales variable in six ways, including total sales, sales rank, number of products sold, etc.

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business > bottomline

HOW TO INSTILL INNOVATION IN YOUR WORKPLACE BUSINESSES, NO MATTER HOW SUCCESSFUL, CAN EASILY SLIP INTO A STAGNANT PHASE. WHEN BUSINESS PRACTICES AND ACTIVITIES CONSTANTLY ABIDE BY FAMILIAR AND SAFE HABITS WHILE REFUSING NEW AND UNPRECEDENTED IDEAS, INNOVATION SEEMS TO FLY OUT OF THE WINDOW. IN A WORLD THAT CHANGES BY THE SECOND, INNOVATION BECOMES A KEY INGREDIENT TO ACHIEVING SUCCESS. 64 > QATAR TODAY > OCTOBER 2016

nnovation is known as introducing new ideas and strategies or revolutionising and enhancing existing ones especially when they become outdated or inefficient. When companies map out their goals and areas of growth, they will most likely realise that whatever has not been achieved from their objectives will require a new trick and extra push. Innovation is key for growth. Nowadays, creative thinking is no longer limited to those in the artistic professions. Innovation is, in fact, critical for organisations that aim at remaining relevant and one step ahead in a competitive market. Most companies agree that innovation efforts lead to better financial performance.

Are you wondering how you can cultivate and foster innovation in the workplace? Here are six steps to start implementing today: 1. Hire passionate people The first step towards instilling innovation is to find the right employees. Hire people who love what they do and are passionate about their career. Employees who believe in their organizations will be excited to see it grow, and are more inclined to come up with ways to help it succeed. Bayt.com conducted a poll titled ‘Passion for Work in the Middle East and North Africa,’ February 2016. The poll findings show that the far majority of professionals in the Middle East and North Africa (MENA)

are passionate about their jobs. In another study, the Bayt.com Millennials in the Middle East and North Africa survey, January 2014, the job attributes that are valued the most revolve around passion and personal fulfilment. This means that many workers would be willing to supple their creative ideas and strategies in pursuit of their career passion. 2. Build a diverse team Not only does your team need passionate individuals, but it also needs a nonhomogeneous blend of personalities, nationalities, backgrounds, and specialties. Make sure that you recruit professionals with diverse backgrounds and mindsets. More diversity in the workplace means that employees will contribute unique skill sets, ideas, and strategies. In fact, many companies across the MENA region have already recognized the value of diversity. According to the Bayt.com Diversity at Work poll, October 2015, 80% of respondents feel that their companies encourage diversity. Building a diverse team means harnessing innovation in your company’s human capital. 3. Provide the tools and space The process does not stop after gathering a diverse and passionate team. You need to arm this team with the tools that allow their creativity to flow. For instance, you can create a space within your organization with a more relaxed atmosphere, where employees can unwind, brainstorm and discuss ideas. You can even provide an idea board, where every employee can share their thoughts away from the pressure of a formal meeting. Employees often find inspiration in each other’s suggestions and innovation can become contagious. If you feel that your team needs an extra nudge or guidance, you can utilize workshops and courses such as the learning tools provided by Bayt.com. 4. Encourage healthy competition A simple method to increase employee participation in brainstorming and creative thinking is to establish a fun competition. Encourage employees to develop new ideas based on pre-defined goals and objectives.

Make sure to be very explicit and specific about the objective so that employees can direct their energy and creativity in the right path. Remember that some of your employees may be overloaded and that you may need to designate a specific time every week for free thinking and innovation. Make sure that there is a follow-up post after every brainstorming session so that employees do not think that it is a wasteful process.

Visit www.bayt.com today and download the white paper to know more about the skills gap crisis in the Middle East.

5. Reward the innovators Forty-four percent of employees state that their companies reward their creativity, according to the Bayt.com Innovation in the MENA poll, January 2014. Employees who put in the extra effort and provide creative ideas for their companies often expect some type of recognition or reward. Motivate your employees by recognising their efforts and rewarding their creativity. There are numerous ways other than cash bonuses you to reward employees. You can use additional time off, gift cards, personalized gifts, social events, and certificates. You can also simply use recognition and praise. However, don’t only praise the winners, but also those who truly put in an effort, or have a constant flow of suggestions throughout the process. This will confirm to your team that their efforts do not go unnoticed and will most likely raise the interest of more employees to participate in the innovation competition. 6. Appreciate risk Accept failure as part of the process. Let your team know that even if their innovative idea was not what you were looking for, or did not succeed once it was implemented, that the effort and the risks taken are a welcome part of innovation. Remember that innovation is a process not an end and throughout this process your teams will strengthen their connection, learn from each other, and build better work synergy. At the end of the day, being innovative requires taking risks. However, according to the Bayt.com Secrets of Career Success in the MENA poll, June 2016, 60.6% of professionals say that taking risks has been extremely important in their career success

ABOUT BAYT.COM Bayt.com is the #1 job site in the Middle East with more than 40,000 employers and over 26,000,000 registered job seekers from across the Middle East, North Africa and the globe, representing all industries, nationalities and career levels. Post a job or find jobs on www.bayt.com today and access the leading resource for job seekers and employers in the region.

65 > QATAR TODAY > OCTOBER 2016

business > auto news

ALMANA MOTORS LAUNCHES ALLNEW FORD EDGE

Featuring a new sophisticated design and improved driving dynamics, Almana Motors launched the all-new Ford Edge in Qatar last month.

ased on Ford’s successful, global midsize vehicle platform, Edge has been redesigned with a stronger, more athletic shape. It has been retooled to meet higher expectations for quality, and reengineered to add more features and technologies for a more rewarding driving experience. “We are excited to launch the all-new Edge in Qatar and are looking forward to presenting it to our customers,” said Ian Partridge, General Manager, Almana

Motors. “The sophistication that the new model brings inside out, together with the impressive lineup of powertrains and classleading technologies, promise to impress the driver at first sight and during the test drive.” Edge represents the first Ford vehicle to feature standard EcoBoost power. The twin-scroll 2.0-liter EcoBoost, offering 253 PS and 378 Nm of torque, is a significantly improved version of the 2.0-liter EcoBoost.

MEC COMES DOWN HARD ON MAZDA Citing a possible defect in the blower of front airbags, the Ministry of Economy and Commerce (MEC) recalled the Mazda 6 and Mazda BT-50 pickup models 2002-2007 last month. The National Car Company was also involved in the move.

he ministry said that the recall comes within the framework of ongoing coordination and follow-up by the ministry to ascertain the extent of car dealerships’ commitment to follow up vehicles’ defects and repair them to protect consumers’ rights. The ministry further added that it will coordinate with the dealership to follow up maintenance and repair operations and will communicate with customers to ensure implementation of the procedures to fix defects. MEC also urged all consumers to report any irregularities to the Consumer Protection Department, which receives complaints, suggestions and inquiries through its channels of communication.

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MASERATI SALES ON THE RISE

NEW CAR STOCKYARD OPENED BY DOMASCO In an effort to serve its automotive customers better, Doha Marketing Services Company W.L.L. (Domasco) started a new stockyard at Birkat Al Awamer last month.

T M

aserati enjoyed continuous growth on all the main European markets in August: UK, Germany, Benelux, France, Switzerland and Spain. According to its sales figures, 4,180 cars have been registered since the beginning of 2016, with an average rise of 6%, compared to the first eight months of 2015. Italy once again proved to be the company’s biggest European market with 97 new registrations last month, a 273% increase compared to August 2015. A total of 1,050 Maserati vehicles were registered in the first eight months of 2016, a 9% increase compared to the same period in 2015. For the Middle East, India & Africa region, Maserati reported a 38% increase in August, thanks to the arrival of the Levante. The brand’s largest markets in the region, UAE and Saudi Arabia, grew by 42.5% and 75% respectively.

RENAULT LAUNCHES ALL-NEW TALISMAN

he 45,000 sqm facility has the capacity to accommodate 1,700 cars, where vehicles will be given protection from tough weather conditions. “In Qatar, one of the greatest challenges we face is marketing. Whether you are a vendor, distributor or reseller, this can drastically impact your ability to succeed. The new facility demonstrates our commitment to efficiency and our devotion to customer satisfaction,” said Faisal Sharif, Managing Director, Domasco. “We will continue to invest in infrastructure and logistics to maximise our capability to perform as a leading automotive distributor,” he added.

DROP IN DEMAND FOR SECOND-HAND CARS

stream of expatriates leaving the country for long summer vacation has led to a fall in the demand for second-hand cars by 20%, according to a report last month. “We use to sell five or six cars in a month even during the summer holidays. But this summer seems to be different. We could sell just two vehicles in August,” said a trader. “With falling demand, the prices of used cars also declined significantly. We sold an Urvan 2010 model for QR20,000,” he added. Another trader said that prices of big four-wheelers with full options like the Land Cruiser GXR 2010-11 model have declined from QR150,000 to QR110,000.

fter the revelation of the Talisman’s exterior styling, interior and finish quality in Europe, Renault last month extended an invitation to test the unique driving experience and travelling comfort offered by its new model in the GCC. Its features include MULTI-SENSE technology which matches the driver’s mood, and also the Electronic Damper Control for onroad dynamics, which combine manoeuvrability, performance and comfort. The new Renault Talisman comes with a 3-year/100,000 km standard manufacturer’s warranty, and its price varies from market to market. Also, for the first time in the Middle East, Renault launched the Renault Talisman Virtual Showroom, which is a live sales demonstration and objection handling portal. Visitors can come in and book a slot. At the designated slot, trained sales consultants will take the visitors through the car via a live video demo online. 67 > QATAR TODAY > OCTOBER 2016

test drive > auto news

THE FORCE

OF A STYLISED GALE That is the Levante, the latest offering in the SUV segment completing the product lineup from Maserati. By Sindhu Nair 68 > QATAR TODAY > OCTOBER 2016

fter test-driving a tomato red Ferrari it is difficult to impress the senses with the subdued sensuality that comes with the latest Maserati offering, the Levante. But then the Levante gets to you with the beautifully engraved trident on its grill and the cool refined interior and the punch-packed performance from its Maserati engine. There is no denying the fact that the Maserati Levante is a turning point in the brand’s history. The new model that made its world premiere at the 2016 Geneva Motor Show enables the company to access the largest luxury segment in the world. The Levante significantly contributes to

the creation of the most complete product lineup in Maserati’s history. In the Middle East, where the market for SUVs and sports carr is significantly larger than any other segment, this offering from Maserati will contribute considerably to its sales figures. The Levante name, according to the designers, was inspired by “a warm, Mediterranean wind that can change from mild to gale force in an instant, mirroring the character of the first Maserati SUV”. The Levante is based on the evolution of the sedan platform, designed exclusively by Maserati. The car chassis has been specifically developed to offer unique on69 > QATAR TODAY > OCTOBER 2016

test drive > auto news

THE SPECS: LEVANTE 350 hp

LEVANTE S 430 hp

TRANSMISSION

Ratio

First

4.71

Second

3.14

Third

2.11

Fourth

1.67

Fifth

1.28

Sixth

1.00

Seventh

0.84

Eighth

0.67

Reverse

3.30

Final Drive

2.80

SUSPENSION Front

Double Wishbone, adjustable Air Springs, Skyhook shock absorbers

Rear

Multi Link, adjustable Air Springs, Skyhook shock absorbers

BRAKES Front Rear

345 x 32 mm ventilated discs 2-piston floating calipers

380 x 34 mm ventilated & drilled discs 6-piston Brembo monobloc calipers

330 x 22 mm ventilated discs (drilled for 430 hp) single piston floating MOC caliper

TYRES Front Rear

265/45 ZR20 front

265/50 ZR19

295/40 ZR20 rear

DIMENSIONS & WEIGHTS Length (mm)

5,003

Width (mm)

1,968

Height (mm)

1,679

Wheelbase (mm)

3,004

Front Track (mm)

1,624

Rear Track (mm)

1,676

Luggage Capacity (l)

580

Fuel Capacity (l)

Kerb Weight (kg)

2,109

Turning circle (m)

11.7

70 > QATAR TODAY > OCTOBER 2016

road drivability and competitive off-road capability, with day-to-day comfort and practicality, says the designer. The driver is aware of the fine balance between intimacy and roominess, along with a feeling of total confidence and command, as all the main controls fall immediately to hand and the seat envelopes you in a cocoon of comfort. Visibility is optimum and hence adds to the driving confidence because the driver is aware of every move that happens in close proximity to the car. The smooth lines of the leather-clad dashboard provide an atmosphere of opulence, whilst the central console features the large display screen along with easy-to-reach controls for the transmission, climate control and infotainment systems. The simple yet striking instrument panel is similar to that of Maserati’s flagship, the Quattroporte, with a large speedometer and rev counter separated by a 7-inch TFT display. While the connectivity and manoeuvrability of the functions are child’s play, I fell in love with the surround camera that provides a clear 360° view around the car, assists in parking and helps the driver deal with blind spots. Two lateral cameras are housed underneath the door mirrors and transmit images to the main display screen. Operated via the soft button, the views it provides include: front, front cross (180°), rear, rear cross, top view, open doors and parking arcs. Other features like blind spot alert, lane departure warning, etc., make sure that you do not make a wrong move in this car. The driving exclusivity stems from technical features like Air Suspension and the Q4 AWD system, which come as standard equipment, and the high level of

THE ENGINE VARIABLES Designed by Maserati Powertrain and built at Ferrari’s Maranello plant exclusively for Maserati, the Levante engine features highly advanced engineering innovations that have been developed to improve its fuel efficiency. A high-pressure direct-injection system enhances combustion across the rev range by delivering atomised fuel directly into the combustion chamber, whilst in both cylinder heads there are two continuous-phase timing variators, which advance or delay the intake and exhaust valve timings. In addition, two parallel-mounted, low-inertia turbochargers help prevent turbo lag, and give greater elasticity and a faster response. The 3.0 Twin Turbo V6 petrol engine is available with two different power outputs: 430 HP or 350 HP. With 430 HP, the Levante S accelerates from 0 to 62 mph in 5.2 seconds, and has a top speed of 164 mph, whereas the figures of the Levante 350 HP engine are 0 to 62 mph in 6.0 seconds, and a top speed of 156 mph. The innovative Levante Diesel 3.0 V6 with Variable Geometry Turbo (VGT) comes with 275 HP and 600 NM of torque that enables the Levante Diesel to surge from 0 to 62 mph in just 6.9 seconds and reach a top speed of 143 mph.

customisation that includes two cuttingedge packages, sport and luxury. I am a big fan of luxury and though the Sports mode was lucrative enough the luxury entices you with the driving dynamics combined with the comfort levels. The thoroughbred on-road handling typical of all Maserati cars and solid offroad capabilities, as demanded in the SUV segment, describe the car’s overall dynamic. The Levante excites any sports car driver counting on performanceoriented features, such as the extensive use of lightweight materials, ideal 50-50% weight distribution and its lowest-in-class centre of gravity. The aluminium “double wishbone five link” suspension layout comprises standard Air Springs and electronically controlled Skyhook shock absorbers. In cooperation with the intelligent Q4 AllWheel-Drive system, the newly introduced Torque Vectoring system delivers GT on-road behaviour and surprising – for a Maserati – off-road capabilities. The off-road equipment completes a product made to surprise avid travellers and adventure lovers as well. Engine-wise, the Levante is equipped with the latest evolution of the Maserati 3-litre V6 engines. The two versions of the twin-turbo petrol engine are globally acclaimed for their unique Maserati signature sound and for their exceptional performance. Right down to the design of the aluminium key to the blending of features

into the design of the chassis, Maserati shows the thrust it always places on design. While the keyless entry is a must and no longer an innovation for luxury cars, Maserati takes it to another extreme with the boot of the car opening with just a tap from the driver, making it easier for someone carrying luggage to the car. While I can go on with the features that made the Levante a clear favourite, it was essentially the looks of the car that floored me. Agile, beautiful, contoured; it cut a bella figura on the Doha roads. It is an SUV that is distinctly feminine with its beautiful contours and just as fierce when it needs to be 71 > QATAR TODAY > OCTOBER 2016

business > marketwatch

SABRE-ING QATAR QATAR TODAY TALKS TO DANIEL NAOUMOVITCH, SABRE TRAVEL NETWORK MIDDLE EAST (STNME) CEO SINCE 2005, ABOUT THE COMPANY’S LATEST APPLICATIONS AND UPCOMING PLANS FOR QATAR. BY UDAYAN NAG

72 > QATAR TODAY > OCTOBER 2016

ews involving the top Global Distribution System (GDS) players has been doing the rounds for a variety of reasons lately. There was a reversal of fortune for Travelport, which signed a deal with India’s largest domestic airline IndiGo last month, enabling the latter to distribute all its fares and ancillary products via the UK-based company. The move comes a few months after Flight Centre decided not to renew Travelport’s GDS contract for Australia and New Zealand. As far as the Middle East is concerned, Amadeus signed deals with Nile Air and Air Cairo earlier in the year, further boosting its IT services to the airline industry. Keeping in mind the recent developments, it was obvious that Sabre was not going to be left behind. An official ceremony attended by STNME’s clients, the media and government officials marked the opening of its new office in Qatar early last month, as a part of the company’s expansion plans in the region. “The new office in Qatar highlights STNME’s continued growth across the

Middle East, after first establishing a presence in the region more than 30 years ago,” says Naoumovitch, adding that today STNME has long-standing strategic relationships with some of the region’s largest travel agencies including Kanoo, ITL and Dnata. He further says: “Sabre has supported the growth and success of its agency customers by providing industry-leading technology and tailor-made solutions to enable agents to shop, book and manage travel for their clients.” Into his twelfth year as CEO of Sabre’s Middle Eastern operations, Naoumovitch’s biggest priority is to launch the company’s latest version of its agency desktop, Red Workspace, which helps travel agents provide the best possible deal for the air passenger. “The new Red Workspace is a major innovation for travel agencies. Travellers’ behaviour is changing. Today they expect their agency to know if they want a window or aisle seat, and if they need an extra bag with their fare. They’re looking for a more personalised travel experience. Our new

Workspace has deep merchandising and retailing capabilities which makes life much easier for agencies. Another new feature is the addition of data analytics, which enables agents to advise travellers about the best time to make a booking, the best time to travel, and even about the duration of their stay. Agents are now consultants.” “Travellers today are savvier. According to some statistics, they check 32 websites before making a decision. If they are not carrying any luggage, they don’t necessarily want to pay the same amount of money that someone with luggage does. All these factors are taken into consideration when a traveller goes into an agency which has access to the Sabre Red Workspace. This graphical user interface helps our agents to save time, reduce cost and help the traveller to reduce time and cost,” adds Naoumovitch. And Sabre’s applications are not just limited to arranging the best-possible deals for airline passengers. It also has systems in place for environmentally conscious travellers under its corporate social responsibility initiatives, which, according to Naoumovitch, the company is “very passionate” about. “Sabre enabled a reporting tool hailed for enabling better decision-making about travel. The carbon calculator powers four CO2 reports available today through Sabre’s ‘Traveler Security and Data Suite’ (TSDS). Launched in 2007, it is used around the world by Sabre travel agencies and corporations using our system GetThere, to determine the impact their travel has had on the environment. Users can view the total volume of carbon emissions produced for air, car and hotel travel across a date range or specific destinations travelled.” As part of its expansion plans for Qatar, Sabre recently appointed Ghassan Abu Khalaf as its new country manager. “Ghassan’s wealth of technology, travel and e-commerce experience, as well as his deep knowledge of the Qatar market will ensure that Sabre’s goals to help develop the country’s travel industry will be successfully met,” says Naoumovitch. “His appointment, in addition to our dedicated team on the ground and future investments, will help extend our services and technology; bring our global values and innovative solutions to local travel agents.” Naoumovitch refers to the World Travel & Tourism Council’s report on Qatar to express his optimism about the country’s travel and tourism potential. According to it, travel and tourism investment in

2015 was QR6.5 billion, or 2.2% of total investment. There is also a rise by 17.5% predicted in 2016, and a rise by 8.6% per annum over the next ten years to QR17.3 billion in 2026 (3.9% of total). Visitor exports generated QR34.1 billion (9.4% of total exports) in 2015. This is forecast to grow by 3.2% in 2016 and by 3.3% per annum from 2016-2026, to QR48.6 billion in 2026 (7.8% of total). He also says: “The prices of oil and gas are reducing. Countries that depend on these commodities have to think out of the box. Qatar is ahead of the game; it has not only looked at opportunities outside, but is focusing on travel and tourism as an additional option for revenue streams to come in. It’s a country that needs investments even more today, and it’s a country that we are looking at and focusing upon to expand as strongly and as quickly as possible.” However, despite all this, there is another point of view concerning the GDS industry. And it comes from Emirates president Tim Clark, who recently criticised the GDS model and claimed that “a new idea will eventually disrupt it all”. Interestingly, Emirates is one of Sabre’s customers in the Middle East. Apart from that, Lufthansa has been charging extra for bookings made through GDS for a year now. But Naoumovitch dismisses any threat looming over the industry. “GDS proved for many years to be the preferred channel for agencies and travel buyers. We believe Lufthansa’s surcharge on Sabre GDS-issued tickets is bad for travel buyers and consumers alike and will ultimately be bad business for them. This decision made them uncompetitive when pitted against other airlines in a high-value channel. The surcharge reduces choice and transparency for consumers and drives inefficiency across the travel marketplace. Nearly two-thirds of Lufthansa’s tickets, representing approximately 70% of their revenue, have historically been booked through the GDS channel.” “From a travel agency and corporate travel buyer perspective, surcharges create additional IT and back office costs, makes pricing comparison less transparent, undervalues the role of the travel agent in supporting travellers, and reduces efficiency for agencies and their customers. In the end, imagine if travel agencies, or even travellers, need to use each airline’s digital retailing platform to compare, shop and book! I don’t think this is even possible.”

"The travellers today are savvier. According to some statistics, they check 32 websites before making a decision." 73 > QATAR TODAY > OCTOBER 2016

business > marketwatch

CELEBRATING TECHNOLOGY AND SUCCESS LG Electronics recently celebrated its 30-year partnership with Video Home & Electronic Centre.

ideo Home & Electronic Centre's footprint across Qatar includes a chain of 12 retail outlets of its flagship brand Jumbo Electronics. These showrooms are backed by one of Qatar's largest after-sales service centres of over 2200 sq m. The association with LG began in 1986 when the first Electronics showroom for LG, then Goldstar, opened in 1989 in Msheireb, which was followed by many other exclusive LG showrooms. "LG Electronics has always strived to live up to be the market standard and being a global leader and technology innovator in consumer electronics. We have enjoyed a

great partnership over these years and this milestone represents the strengthened partnership we have in place. We look forward to the next chapter with the new premium brand shop opening, which will be welcomed by consumers in Qatar," said Mr CV Rappai, Director and CEO, Video Home & Electronic Centre. LG & Video Home together have also sponsored many activities and events over the years like the prestigious Emir Cup for football, musical events, a quiz competition for the schools in Qatar, cooking workshops for women and many others.

DELICACIES FROM THE SILK ROAD Mercure Hotel recently held a press conference announcing a new East to West menu from their revamped food and beverage outlet Silk Road.

74 > QATAR TODAY > OCTOBER 2016

SPORTING ENTERTAINMENT The Qatar Ministry of Culture and Sports has awarded the operation of two world-class arenas to ELAN Live Nation, a joint venture (JV) between ELAN Group and Live Nation.

he joint venture between ELAN Group, a diversified and fully integrated media and entertainment group in the Middle East, and Live Nation, the global leader in live entertainment, will operate Lusail Multipurpose Arena in Lusail, and Ali Bin Hamad Al Attiyah Multipurpose Arena in Al Sadd, which have already hosted the successful 2015 World Handball Championships in Doha. The JV will provide arena management, promotional, managerial, and facility maintenance support services for both venues. The arenas are set to host an array of family

entertainment, sports, music and other live events, bringing new entertainment experiences to the population of Qatar. Abdul Rahman Abdullah Al Maliki, Director of Asset Management and Projects at the Ministry of Culture and Sports, said: “The development of the sports sector is a strategic goal for the Ministry to improve the sports environment, culture, practice, professionalism and infrastructure in order to enhance the country’s status as the capital of sports in the world, especially with regard to the 2022 FIFA World Cup requirements.”

At Dunhill this winter, itís revival time for Art Deco's timeless, sleek curvilinear lines; the collection's accessories capture the seductiveness of the last century's most glamorous design movement motoring the design aesthetic for the next three decades, from lighters to cufflinks and from tie pins to watches.

SAIL AWAY

Doha is set to host the fourth edition of the Qatar International Boat Show (QIBS 2016) at Lusail Marina, Lusail City, from December 7-10, 2016.

ollowing on the show's remarkable success, QIBS 2016 will witness the participation of major manufacturers and exhibitors and leading international and GCC companies currently active in boat and yacht manufacturing and marketing. For his part, Khalid Essa Al Mannai, Chairman of Al Mannai Events, QIBS organizers, noted that the show enjoys the support of all Qatari officials led by His Highness Sheikh Tamim bin Hamad Al Thani, Emir of the State of Qatar, represented by HE Sheikh Abdullah

bin Nasser bin Khalifa Al Thani, under whose patronage QIBS is held every year. "QIBS highlights the Qatari government's relentless support of the private sector that drives the economy's competitiveness and helps in the diversification of income resources, including the vital sectors of tourism, exhibitions and marine services. To ensure the complete success of the show, a team of highly skilled specialists has been formed, spearheaded by Nader Samaan, Director of QIBS 2016," concluded Al Mannai. 75 > QATAR TODAY > OCTOBER 2016

business > marketwatch

GETTING INTENSE Blue Salon recently held an olfactive event to showcase Layton, the new intense men's scent from Parfums de Marly.

ayton from Parfums de Marly contains the formula of Bergamot leading with its tangy passion, while lavender and geranium blend into a fresh note. The intensity rises from mesmerizing amber, enhanced by the natural elegance of a pink pepper. Distinguished and addictive, its character carried by vanilla and precious woods grows more powerful thanks to an intriguing note: a flavourful and fascinating hint of caramalized coffee. “I imagine cascades of aromatic scents bursting from the royal fountains while racehorses in dazzling dresses set out to shine during the equestrian exploits of the age”, highlights the creator Hamid Merati-Kashani (Firmenich).

I HOME-GROWN QDB signs strategic sponsorship with Qatar Chamber for 'Made in Qatar 2016' exhibition.

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n a ceremony held at Qatar Chamber's headquarters, Qatar Development Bank (QDB) and Qatar Chamber signed a sponsorship agreement by which QDB became the strategic sponsor of the fifth instalment of the ongoing "Made in Qatar" exhibitions to be held in Riyadh, Kingdom of Saudi Arabia (KSA), from 6-9 November 2016. The signing ceremony was attended by Abdulaziz bin Nasser Al Khalifa, Chief Executive Officer (CEO), QDB; HE Sheikh Khalifa bin Jassim bin Mohammed Al Thani, Chairman, Qatar Chamber; and Saleh Hamad Al Sharqi, Director General, Qatar Chamber. Abdulaziz bin Nasser Al

Khalifa said: "The past four editions of 'Made in Qatar' achieved remarkable local success, and we expect the same level of accomplishments on the regional level.” "It is an initiative that helps provide local businesses, from across a wide range of sectors, with a forum to display their best achievements and showcase the nation's rapid economic developments. Furthermore, the active involvement of the small and medium-sized enterprise (SME) participants also serves as a testament to the fertile environment that the Qatari market offers interested investors,” said Saleh Hamad Al Sharqi.

city life > doha diary NEW CREATIVE INPUT

Qatar Museums welcomes the next intake of artists at its 'Artist in Residence' programme at the old Doha Fire Station.

his programme aims at creating a space that offers an indigenous, local approach to creativity and artistic production. The residency programme, which is open to local Qatari artists and residents of Qatar, runs in nine-month cycles. The group, which includes 10 Qataris, consists of artists from a range of different disciplines including art, photography, video, design, painting, poetry and drawing. Commenting on this occasion, Khalifa Al Obaidli, Director of the Fire Station, said: "This initiative is something that I am hugely passionate about and one that is so important for the development of artists in Qatar as it celebrates local talent and gives young artists a platform to grow, exhibit and collaborate. The initiative perfectly reflects Qatar Museums' vision of inspiring an indigenous culture of creativity and innovation and we hope that the next chapter of the programme helps these talented artists become recognised on an international scale in the future."

WINNING STREAK The Rio 2016 Paralympic Games ended on a high note for Team Qatar after winning two silver medals thanks to the incredible performances of Abdelrahman Abdelqader and Sara Masoud.

he 27-year-old shot putter Abdelqader took home Qatar's first ever Paralympic medal after an incredibly difficult F34 shot put final with an astounding 11.15 m. Speaking after the competition Abdelqader said: "Winning silver was an indescribable feeling â&#x20AC;&#x201C; it is the first Paralympic medal in Qatar's history which is something I am incredibly proud of." Masoud secured her silver medal in the F33 shot put event with an impressive 5.09 m throw, with which she entered the history books. Commenting on the success of Team Qatar, President of the Qatar Olympic Committee HE Sheikh Joaan bin Hamad Al Thani said: "We are extremely proud of our Paralympians and the historic accomplishments they've made at the Rio 2016 Games. Abdelqader and Masoud exemplify what can be done when you combine talent, hard work and limitless potential."

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city life > doha diary

GROWTH IN HOSPITALITY SECTOR ACHIEVING GREATER HEIGHTS!

How Women Work recently conducted a seminar called The 'Hippocrates Wellness Program' on the International Day of Psychological Success at City Centre Rotana. The seminar highlights the success methodology of Evridiki Iliaki, certified business and life coach, which also focused on the practical techniques that one can learn in order to have a successful professional and personal life. Their next seminar will be held on November 9 on the topic of 'Success through Mind and Body Balance', where attendees will have a chance to learn more about effective breathing, techniques and visualisation methods.

Hospitality Qatar 2016, the 360o Hospitality and HORECA show, was officially launched today during a conference held at the Intercontinental Doha â&#x20AC;&#x201C; The City.

he show, organized by IFP Qatar, is licensed by the Qatar Tourism Authority (QTA). Under the patronage of HE Sheikh Ahmed Bin Jassim Al Thani, Minister of Economy and Commerce, Hospitality Qatar will be held from October, 18-20, 2016 at the Doha Exhibition and Convention Center (DECC). The exhibition, welcoming five national pavilions, will bring thousands of visitors from around the globe to meet more than 132 exhibitors from 10 countries. The event will provide a progressive platform for hospitality, hotel, restaurant, and cafes operators to showcase their latest products and build new business opportunities. Commenting on the show, George Ayache, IFP Qatar's General Manager, stated: "Qatar's investment in the hospitality sector is clearly visible with nearly 105 upcoming hotels and approximately 21,000 rooms at various stages of construction, and more than $40 billion to be invested in

AMBASSADOR VISIT Pakistani Ambassador to Qatar Shahzad Ahmad (right) with outgoing Singapore Ambassador Wong Kwok Pun during the ambassadorsâ&#x20AC;&#x2122; lunch in Doha last month.

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the hospitality sector over the upcoming 15 years. Our show represents the finest opportunity for buyers and sellers to meet and network. We have even created our very own Business-to-Business matchmaking platform to further develop this exchange platform," added Ayache. Speaking about their participation at Hospitality Qatar 2016, Carla Ghaleb, Country Manager, Boecker Public Safety LLC, stated: "As Qatar is witnessing substantial growth in the hospitality sector, we are delighted to contribute to this growth through our yearly strategic partnership with Hospitality Qatar as official associate and Hygiene Sponsor. Fadhel bin Khalifa, Purchasing Manager of Haidari Trading Company, remarked: "We have a fleet of 35 fully refrigerated vehicles delivering to hotels, restaurants, and catering companies every day across Qatar. Hospitality Qatar helps us meet the key buyers across Qatar and enables us to continue to grow our business."

ART FOR ALL Qatar National Library recently hosted a special arts event for adults titled 'Coloring for Adults' at Education City's Clubhouse.

NOT TO MISS

BLOOD DONATION DRIVES Gulf Contracting Company recently held a blood donation drive in collaboration with Hamad Medical Corporation for the 10th consecutive year in August.

On show from September 22, 2016 to January 8, 2017, the work, entitled "Fair Skies work by Iraqi-Canadian contemporary artist Mahmoud Obaidi curated by Mathaf's Curator LeonoreNamkha Beschi, is on view in Mathaf: Arab Museum of Modern Art's Project Space.

HAPPY HUNTING Families across Qatar took part in an exciting treasure hunt at the Museum of Islamic Art this Eid Al Adha.

halid Yousef Al Ibrahim, Chief Strategic Planning Officer at Qatar Museums, said: "At Qatar Museums, we strive to provide fun and educational activities for families and children to enjoy together, to broaden horizons and stimulate the creativity within the community." During the hunt, 90 children and families were taken on a unique adventure through the museum, where they explored one of the world's greatest collections of Islamic Art. Prizes selected from the MIA gift shop were awarded to three lucky winners with the highest scores. 79 > QATAR TODAY > OCTOBER 2016

PICTURE COURTESY: JULIETTE SAWYER

affairs > QT take

THE STRANGERS NEXT DOOR

In this QT Take, we review the latest novel by Doha-based author Mohanalakshmi Rajakumar, No Place for Women. By Ayswarya Murthy

ohanalakshmi Rajakumar stands out in Qatar’s literary circles for holding up a mirror to life in the tiny emirate, an effort that is as rare as it is needed and demanded. Her previous books on the lives of the domestic workers in the Gulf (The Dohmestics) and contemporary Khaleeji love (Love Comes Later) created quite a stir when they were released. Till then, these subjects had been explored inadequately, if at all, in English fiction published in the Gulf. One was about a group of people invisible by design; the other invisible by choice. Both offered a tantalising glimpse

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at worlds behind screens and closed doors that existed, it would seem, in a parallel dimension alongside our own. In Qatar, and in the larger Gulf, the siloed lives of expats and locals has amplified our innate desire to understand one another and find the common thread of humanity that runs through all of us. We want to know about the lives of our neighbours, our bosses, the men on the construction sites and veiled women whose eyes never leave the ground because despite years of co-existence they remain anonymous, interchangeable and inscrutable. And we want it more because of how limited and superficial our access

is to the “others” we share the city with. Rajakumar has to be recognised for taking the first step in telling some of these stories and we hope this will inspire more diverse, and traditionally silent, voices. No Place for Women is the second in a crime trilogy based in an unnamed city in the Gulf. The principal characters of the Crimes in Arabia series are wonderfully diverse and each of their narratives into their respective lives is rich in detail and atmosphere. The four central point-of-view characters are Ali, a local police officer fighting to climb the ranks at his job; Maryam, an intrepid local journalism student who is curious

and brave when it comes to chasing a story; Manu, a Nepalese man who has been dealt a tough hand but rises to realise his potential nonetheless; and Sanjana, his sister and a maid who is constantly struggling to reconcile her duties and her own expectations for her life. In threshing out their motivations and manners, the author makes sure they remain familiar and relatable; a counterpoint to the strange adventures that they embark on. Surely, this kind of collision of worlds and values can’t be envisioned anywhere else except in the unique societal landscape that the GCC provides. The supporting characters, while not as developed, are pivotal in bringing all these protagonists together. Just as one example, Sanjana works for an American family; the son is a close friend of Maryam, while the father is a professor. It’s an intricate web. The book opens soon after the events in Rajakumar's first book, The Migrant Report. While we haven’t read the first one, we can infer how the four main characters come together. Manu is tricked into accepting a job in the country with the promise of decent hours and salary but instead finds himself among similar victims who are cruelly exploited for long hours and low wages on a construction site. Against the mounting death toll at the labour camp, police officer Ali investigates the web of cross-border deceit and lies, assisted by an idealistic Maryam, who has to balance what is right against the unspoken rules laid down by her conservative family. While in theory this background information would suffice to understand the characters’ motivations and actions, this is not the case in reality. As the book progresses, more and

more references are made to events in the first book and you are left to speculate on whether some words and actions, which seem inappropriate or confusing at first, might be better understood if you had read the prequel. So if you are picking up this one, make sure to grab The Migrant Report as well. With each chapter dedicated to a particular character and the developments in their own microcosms, the story moves along at a brisk pace. As far as thrillers go, the story isn’t particularly gripping. An expat teacher turns up murdered and Ali, with the help of Manu, attempts to unravel her story and decipher the people in her life. Soon after, the charred remains of another woman are found in the dessert. It’s an average whodunit but within a rarefied setting that makes it unique. News stories about murdered expat women have shocked the community in Doha in the past year yet the lack of transparency means the public’s morbid quest for details is never met. When real life disappoints, it’s only natural that fiction takes its place. In that respect, the book meets expectations. It shows you a Doha-like city’s fictional underbelly, one that common sense dictates exists in our Doha too, but which is all but invisible to a regular resident. No Place for Women satiates a nagging curiosity born out of abject secrecy. The book could certainly have done with better editing. More than once the names have been mixed up and this momentarily confuses the reader because there are multiple supporting characters to keep track of. Editing might have also addressed some of the uneven chapters. There is also the issue of repetition of

information throughout the book. Each character mentions a particular incident or fact (sometimes more than once) that the readers already know about. This disrupts the flow of the story unnecessarily. But the author excels in establishing atmosphere. Whether it’s at a restaurant or an engagement ceremony or a murder scene, the author has this habit of tracking all the little actions of the protagonists that helps maintain a sense of constant motion. Some characters are obviously more appealing than others. Sanjana’s story is very well written; her motivations are compelling and her actions telling. She is an endearing mix of loyalty, love and helplessness. The other woman protagonist, Maryam, unfortunately doesn’t come across as well. Through Maryam, the author constantly reminds us how special and brave this character is which can slightly annoy the reader, especially because the fact that Maryam doesn’t really do much in this book (but there are hints that she had a more dramatic impact on the events in the first book). Overall, it’s a quick weekend read that may as well be about the people you come in contact with every day in Doha whose stories are shrouded in indifference and reticence. There is no sense of closure in this book; one of the murders remains unsolved, obviously building anticipation for the third book. The novel is available both in paperback and e-book formats 81 > QATAR TODAY > OCTOBER 2016

A day in the life of... Rakahn Al Mutawa Professional rugby player, Qatar Rugby Federation

Rakahn’s mornings begin with breakfast with his parents and younger brothers, after which it’s off to his day job as an HR professional. Rakahn has always been sporty and a desk job wasn’t going to get in the way of that. Growing up playing American football, he transitioned to a rugby player and now plays for Qatar’s national team. Often after end of business hours, he heads over to the gym for his “me time” when he can clear his head and listen to some of his favourite music.

Qatar Today follows the daily routines of professionals around the country from all walks of life. By Ayswarya Murthy

He has been playing rugby for a year now. With the new season about to begin, Rakahn and his teammates train at least three times a week. In addition to the local rugby league which contains seven teams, Rakahn gets to play in tournaments like the Dubai Sevens and international competitions hosted in Qatar, like last year’s tri-nation games between Qatar, Lebanon and Iran. “What I love most about the game is the bond that you form with your teammates. In all of my years of team sports nothing matches the brotherhood involved in rugby.” Another preoccupation of Rakahn’s is video games. “They keep me connected to my friends out of the country, especially when we are all talking over the headset and it is like we are in the same room. It is also a way to share interests with my younger brothers and cousins.” He has been been a huge fan of Pokémon since he was a kid and wants to give a shout-out to Pokémon celebrating its 20th anniversary. “I have never been so proud to say I’ve enjoyed every second of it. Recently I have been playing Pokémon Go with all my friends. There are a lot of good Pokémon to catch in The Pearl and Katara,” he hints.

Though he had done some photography in the past, he never thought he would end up modeling. It happened quite by accident when he was visiting VCU Qatar during model try-outs for their annual fashion show. 82 > QATAR TODAY > OCTOBER 2016

Rakahn also loves hanging out at his father’s farm after work or on weekends. A peaceful and relaxing place where fresh camel milk is in steady supply. “My father spends a lot of time there with his camels as he is in the camel racing business. Our camel Qatarsat has won many races.”