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SAVVY governments in the GCC are

spending a lot of time planning for a world

in which oil and gas revenues are no longer

the most significant factor funding their

national development. Natural resources are

a diminishing resource and while exploiting

them more efficiently is certainly on the

agenda, finding other sources of revenue

offers a longer-term solution to forward-

thinking governments. This has prompted

a number of governments in the Gulf

region, with Qatar at the head of the pack,

to focus on sustainability, digital business,

e-commerce, aviation and much more. The

basic game plan is pretty simple: build an

economic foundation for the next generation

from new business lines and investments

that produces the same levels of income

currently generated from oil and gas.

Naturally this means a big role for

sovereign wealth funds like the Qatar

Investment Authority and other state-

owned investment vehicles. But it also

means big opportunities for the rest of the

business sector in Qatar; small, medium

and large, as well as for their business and

investment partners the world over. The

opportunities seem endless and touch on

every segment of the economy as Qatar

starts to spread its wings.

Recent instances of this new

investment focus are not hard to find.

Some are relatively straightforward such

as the state-run utility, Qatar Electricity

& Water Company (QEWC), which

has just announced plans to increase the

desalination capacity at its Ras Laffan

project to 65m gallons per day from 35m

gallons per day. By any measure this is

breathtaking growth and its like has rarely

been seen before. The project is slated

to begin in the first half of 2017, but the

hard work has already begun. QEWC’s

financial results for the first nine months

of 2014 showed an increase of 11 per cent

in net profit on the corresponding period

last year to $322m, giving some sense of

the natural growth in the Qatari economy

as well as the need to plan big for the

future. Reinvesting these profits gives a

through-the-looking-glass example of the

future of business in Qatar.

On a grander scale Qatar Investment

Authority (QIA) is looking increasingly

to China, north Asia and Singapore in the

medium- to long-term as the place where

the best returns are likely to be had for

an earmarked $15bn-$20bn of its war

chest. QIA manages an estimated $304bn

of holdings in total. While some of these

new markets are well developed, some

of them are virtually frontier markets

and this begins to hint at the increasingly

sophisticated investment strategy being

deployed by QIA. Recent headline deals

between QIA and Hong Kong’s Lau

family look set to involve a full takeover

of the department store operator, Lifestyle

International Holdings, and taking the

$2.9bn company private.

While the Lifestyle acquisition is

QIA’s maiden major acquisition in Asia,

QIA is no stranger to the luxury consumer

sector, owning Harrods in London as

well as a 13 per cent stake in Tiffany

& Co. QIA has also been trying to buy

HSBC’s global HQ in Canary Wharf,

London – the capital’s biggest and most

expensive office building, on which

HSBC has a 13-year lease. The takeover

bid involves both QIA and Canada-

based Brookfield Property Partners. The

skyscraper’s owner, Songbird Estates,

has now twice rejected the joint takeover

bid. On 4 December, Songbird stated that

it considered the bid did not reflect the

true value of the company, even after the

original bid made in early November was

raised from $3.4bn to $4bn.

In the financial services arena, QIA

already has stakes in Barclays and the

Credit Suisse Group while the global

reach of some of Qatar’s other finance

houses also continues to grow. Leading

regional institution, Qatar National Bank

(QNB), has recently increased its stake

in African lender Ecobank Transnational

after upping its stake to 23.5 per cent. In

a statement QNB said that it had raised

its stake after spending $283m to buy

an additional 11 per cent share in the

lender. Only weeks earlier the bank had

bought a 12.5 per cent stake worth about

$220m from Nigeria’s Asset Management

Corporation.

QNB had previously made public its

vision of becoming the largest bank in

the Middle East and Africa by 2017. At

present QNB is second in terms of assets

behind Standard Bank of SouthAfrica and

QNB has had the African continent under

the microscope for years. QNB knows

that it has NBAD from neighbouring

Abu Dhabi hot on its heels in the African

banking sector and understands that speed

is of the essence in concluding big deals

before asset prices skyrocket.

Qatar Airways, one of the fastest

growing carriers in the world, is also not

resting on its laurels. Over recent months

the airline has announced that it intends

to buy 20 Gulfstream business jets in

order to more than double the size of its

corporate charter fleet. The airline’s plans

include orders and options for the new

wide-cabin Gulfstream G500 and the

extended-range version of the G650ER,

the world’s biggest and quickest business

jet. The G500 will be used for flights

from Qatar to London, Geneva and Paris,

according to the airline. Akbar Al Baker,

Qatar Airways CEO said, “In order to

keep pace with the future strategic growth

plans of our private jet division, the fleet

is being expanded with aircraft that meet

the needs of our guests, providing a wide

range of options.”

Elements of the world media have

also dined out on stories of low wage

levels and poor safety standards for

migrant workers, mostly from the Indian

subcontinent, who have been drafted in to

undertake much of the new construction

being seen in Doha, the emirate’s

capital. Similar accusations have also

been levelled at Lebanon, Saudi Arabia,

Jordan, Bahrain, Iraq, Kuwait, Oman, and

the UAE in recent years.

Global firms that have outsourced

and offshored their call centre work to

places like Bangalore and Manila will

understand why cheaper labour costs

are desirable but it seems likely that

the Gulf states will have to improve

their levels of transparency before the

‘exploitation’ bogey man is put to rest.

Gulf Cooperation Council ministers are

in the process of preparing to ratify a

new draft employment contract that will

cover maids, household workers as well

as manual labourers.

New contracts should limit the

working day to eight hours, with two

hours overtime and guarantee of a day

off every week and annual leave. In

addition to this, all of the GCC states

have either introduced their own reforms

or are looking at national legislation to

protect domestic worker rights in a more

structured way. Qatar says that next year

it will reform its kafala or sponsorship

system and will redraft the requirement

of workers to secure their employer’s

permission to leave the country.

Sheikh Tamim bin Khalifa Al Thani,

the emir of the nation since June 2013

when his father abdicated, has also

come under increasing scrutiny over his

involvement in the religious politics of the

region. The CIA Factbook seems fairly

sanguine about the new Sheikh: “Tamim

has prioritised improving the domestic

welfare of Qataris, including establishing

advanced healthcare and education

systems and expanding the country’s

infrastructure in anticipation of Doha’s

hosting of the 2022 World Cup.”

Cynics suggest that elements

of Qatar’s national population have

become the main financial supporter of

the Muslim Brotherhood and that they

fund Hamas. This is hardly the sort of

pedigree that would see the UK’s GCHQ

sign a security pact with Qatar to share

classified intelligence and yet that is

just what has happened. This is one of

the most significant accomplishments

to come out of diplomatic talks between

Sheikh Tamim and the British prime

minister in recent times.

Qatar and the UK are looking

to strengthen the ties between their

security agencies to help combat the

international threat from jihadism and

cyber warfare by signing the security

memorandum. The new agreement

will focus on digital defence and cyber

security as well as intelligence co-

operation on combating terrorism. It

will also include the sale of British

security products and services to Doha.

The Home Office said, “We are pleased

to be working in partnership with the

Qatari government… (to) broaden and

deepen the important security relationship

between our respective countries.”

Sheikh Tamim is said to want more

discipline at home and less risk-taking

overseas but knows that his biggest

challenge is keeping Qatar at the forefront

of the Arab world’s development story.

He has to do this without the help

of his powerful cousin, Hamad bin

Jassim al-Thani, who had been foreign

minister since 1992 and also prime

minister since 2007. He had become the

most dominant figure in government after

the former emir and focused on foreign

policy rather than domestic policy.

His replacement as prime minister is

Abdullah bin Nasser al-Thani, who has

been promoted from the interior ministry,

which he will still run, with a keen focus

on domestic issues and policy.

The immediate future for Qatar looks

set to be punctuated by breakneck-paced

development, increasingly high profile

overseas acquisitions and opportunities-

aplenty for foreign partners wishing

to be part of the Gulf’s next growth story.

No doubt the headlines will continue,

good and bad, as the pace of development

hots up. The important thing will be

scratching through the thin veneer on

the surface and seeing where the greatest

opportunities lie.

The State of

Qatar

It’s no secret that the world’s hydrocarbon economies are being forced to undergo

a process of diversification away from oil and gas and into value added products

and services. Qatar has enshrined this diversification into its national plan, but the

growth story has many instructive facets.

Paul McNamara reports

World Business Times Insight:

The State of Qatar

5

Qatar’s fastest

growing Shari’ah

compliant bank

Barwa Bank:

A rising tide

This report is produced and published by World Business Times, which takes sole responsibility for the content

www. w o r l d - b u s i n e s s t i m e s . c o m

3

ICT has never been

more important to the

Qatar economy

eGov meets

digital literacy

December 9, 2014

Qatar

spreads

its wings

WORLD BUSINESS TIMES SPECIAL REPORT DISTRIBUTED BY THE DAILY TELEGRAPH

Exclusive interview

with Qatar Central

Bank governor

Finessing the

financial system

Football fans concerned about the summer

temperatures during the Qatar World Cup 2022

have nothing to worry about. It’s all covered.

By Ilkley Satterthwaite

It ain’t half

hot mum

THE message is unequivocal: “Summer or

winter, we will be ready,” says Qatar 2022

communications director Nasser Al Khater.

The organisers are confident that they have

already proved the cooling technologies

which will be used at the World Cup

work flawlessly. “We have proven that a

FIFA World Cup in Qatar in the summer

is possible with state-of-the-art cooling

technology,” Al Khater says. “We have

demonstrated that our cooling works in

outdoor areas beyond stadia. This summer

we welcomed fans in Doha to an open-air

Brazil 2014 Fan Zone with temperatures

cooled to a comfortable 22°C. The evolution

of

environmentally-friendly

cooling

technologies is an important legacy for

our nation, region and for countries with

similar climates, promising to expand the

reach of hosting major sporting events

to countries where it was never thought

possible before.”

The fact that the World Cup is being

held in the Arab world for the first time

ever is of enormous significance for Arabs

everywhere and Qatar is determined to

show the Arab world at its best. So how will

Qatar cope with the heat? Tamim El Abed,

the Qatar 2022 technical project manager,

told Al Jazeera, “The process employs

fresh air handling units that draw ambient

air from the exterior of the venue. It will

reduce the temperature of that air through

chilled water pipes and then distribute it

around the venue through subtly concealed

outlets.”

But it is not just about cooled air.

The architecture of the stadia optimise

wall height and use a roof-opening size

that keeps hot air out to ensure the level

of cooling on the field remains at a

controlled temperature with vents that

project cold air towards the field of play.

“We will optimise and maximise the

use of shade. As well as optimising the

curvature of external walls and height to

ensure hot air continues to pass over the

stadium and not dip in to scoop out the

cold air. It will be a challenge and we’re

committed to do it sustainably and cleverly

as we’ve committed all along in the bid,”

El Abed said.

David Cameron greets Emir of Qatar, Sheikh Tamim bin Hamad Al Thani, outside Downing Street

Qatar and the

UK are looking

to strengthen the

ties between their

security agencies

to help combat

the international

threat from

jihadism and

cyber warfare

.

4

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