Vol.

15 Issue 12 April 2011

THE
DIGITAL
ISSUE
The Gulf’s tipping point p.40 Companies to watch p.49
Can firms afford not to be on Twitter? p.56 Social networking p.66

INSIDE: EXCLUSIVE INTERVIEW

ABDULKAREEM ABU ALNASR
CEO of Saudi’s National Commercial Bank
PLUS: Will the UAE avoid the turmoil?
Small businesses go big
Mishal Kanoo: What revolution?
MEET S
A’
ARABI T
MOS NT
TA
IMPORKER Bahrain..............BD 1.0

BAN Kuwait............... KD 1.0

Oman................ RO 1.0
Qatar.................. QR 10
Saudi Arabia.......SR 10
UAE.................. DHS 10
AVAILABLE AT:

OMEGA Boutiques (BurJuman, Deira City Centre, Dubai Mall,

Mall of the Emirates, Mirdif City Centre, Sahara Centre, Wafi)
and at select Rivoli Stores. Toll Free: 800-RIVOLI
 www.omegawatches.com
GEORGE CLOONEY’S CHOICE.
 R ALPH L AUREN . COM
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 CONTENTS
Vol. 15 Issue 12 April 2011

GCC NOW
14
The round-up
News, numbers and people

COMMENT 2011
24
Mishal Kanoo
Revolution? But is there any change?

27
Matein Khalid
Downside of Gulf real estate investment.

28
Tommy Weir
Is your boss a ‘leader in name’ only? The region is teetering on the cusp
of a digital revolution. To celebrate,
ANALYSIS
30
38 Gulf Business has dedicated almost
an entire issue to a phenomenon that
is – finally – set to transform the way
UAE’s role amid unrest
POLITICS Is the country the new the region lives, works, shops and
safe haven for regional investment?
connects.
33
Chinese churn
HR Regional bankers flock to jobs in
the Far East.

35
Small is beautiful
30
The Gulf unveils a mega-push
for SMEs.

FEATURES
70
The game changer
PROFILE Abdulkareem Abu Alnasr,
CEO of National Commercial Bank

74
Currency wars
FINANCE How the China/US

70
currency tensions affect the Gulf.

April 2011 gulfbusiness 11

F

Editor-in-Chief
Obaid Humaid Al Tayer
Group Editor and Managing Partner
Ian Fairservice

Group Senior Editor

Gina Johnson
Senior Editor
Guido Duken

Editor
Alicia Buller alicia@motivate.ae
Chief Sub-editor
Iain Smith iains@motivate.ae

80
Editorial Coordinator - business
Concessa D’Souza concessa@motivate.ae
Art Director
Tarak Parekh tarak@motivate.ae
Senior Designer
B Raveendran raveendran@motivate.ae
Designer
Charlie Banalo charlie@motivate.ae
Photographers
Farooq Salik; Naveed Ahmed; Victor Besa.
Contributors
Andrew White; Ryan Harrison; Adrian Mourby;
Glenn Freeman; Laura Collacott; Alex McNabb.
General Manager Production
and Circulation S Sasidharan
Production Manager C Sudhakar
General Manager Group Sales
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Senior Advertisement Manager
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Advertisement Manager
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82
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PO Box 2331, Dubai, UAE
79 iPad 2 preview, netbook update Tel: +971 4 282 4060, Fax: +971 4 282 4436,
Art and iPad app round-up. motivate@motivate.ae
Dubai Media City: Office 508,
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at this season’s Islamic art auctions. Tel: +971 4 390 3550, Fax: +971 4 390 4845
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London’s St James shopping area.
85 Editorial syndication details,
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gb@motivate.ae
Cruise 88
The new Range Rover comes at a Events
price, but it’s worth it.
90 Printed by Emirates Printing Press, Dubai
In your shoes

12 gulfbusiness April 2011

 IN THE NEWS TIM CLARK
After much speculation,
Tim Clark revealed
that Emirates has shelved
plans for a bond to fund
expansion after the regional
uprisings made rates too
expensive.
The airline had initially
instructed banks to pursue
a bond issue in February
and it was likely to attract
strong demand.
But Clark, Emirates’
president, told the ITB travel
fair in Berlin in March: “We
tested the water and it was
pretty muddy. So, we’ve
parked it.”
Clark said that the group,
the largest customer for
the Airbus A380 superjumbo,
had no problems financing
its expansion, however,
and that “cash flows had
been mapped”.
Emirates has so far
ordered 90 A380s – with
a list price of about $375
million each – and has 15 in
its fleet already.
The carrier plans
to increase its fleet to
Tim Clark, President, Emirates Airline.
eventually include 120
Airbus A380s. It is due to
receive five of the planes
this year. Emirates recently
raised its fares due to
higher oil prices and Clark
confirmed Emirates was
being affected.
“Fuel hits you straight
away, so that has adversely
affected us. We don’t lose
money, but we’re not making
so much,” he said.
Clark said load factors
– how full its planes are –
F Middle East carriers are
were coming back up after
being reduced by uprisings
in Tunisia and Egypt.
“We were down six to
seven percentage points at
about 74 per cent, but now
we’re back at 80 per cent.”
He said that Emirates’ load
factor was usually in the low
80s at this time of year.
The number of Emirates’
cabin crew, for the first time,
has risen to over 12,000
as the airline positions
itself for continued growth.
Emirates is currently in full
recruitment mode across
all six continents where it
flies, looking to hire 4,000
cabin crew in the 2011/12
financial year.
The airline will have
been buoyed by air traffic
movements in the UAE
in February, which grew
by 7.6 per cent compared
to the same month last
year, according to figures
released by the General Civil
Aviation Authority.
expected to return profits of
$700 million, considerably
better than the $400 million
previously forecast, but
down from the $1.1 billion
the region posted in 2010.

TALKINGPOINTS
Turkey is the fastest growing OECD It is very well possible that we We don’t need an alternative
economy with easy access to 1.5 will buy shares in another race anywhere in Europe. We
billion consumers. airline. need a race in Bahrain.

HE Hamad Qatar Airways Formula One

Buamim, director CEO Akbar al chief executive
general at the Baker is looking Bernie
Dubai Chamber at a stake in a Ecclestone backs
of Commerce & European airline the Bahrain
Industry, highlights to increase Grand Prix in
Turkish investment the number 2011 despite
opportunities at a of passengers a state of
conference for feeding into its emergency being
Dubai investors. network. declared.

GCC AND THE WORLD

Young people in the
GCC rank living in a
democratic country as their
top priority in life, according
to results of the ASDA’A
Burson-Marsteller Arab
Youth Survey.
The research included
2000
2,000 face-to-face interviews and January 2011.
with Arab nationals and “During this period of
Arab expatriates between seismic change, it is more
the ages of 18 and 24 in the important than ever that we
six GCC states, as well as in understand the hopes and
Number of young Arabs
Egypt, Lebanon, Jordan and fears of the region’s youth,”
interviewed face-to-face for
Iraq. The interviews were said Mark Penn, global CEO
the survey.
conducted in December 2010 of Burson-Marsteller.

14 gulfbusiness April 2011


Infrastructure leads 2011 growth
iStock
The UAE’s spend-
to-recover approach
will be a key factor driving
the real estate sector in
2011, according to Jones
Lang LaSalle.
The advisory firm’s
‘Top Trends for 2011’ says
that shaping UAE real
estate and infrastructure
investment will be
SPOTLIGHT
Bond pipeline due at Dubai Drydocks
The Dubai Drydocks
and Maritime World
may issue bonds or launch
an initial public offering
(IPO) to support future
expansion plans, but not
before next year.
According to Chairman
Khamis Buamim, the
company is now working on
expanding via joint ventures
with international partners,
INNUMBERS
9 per cent
The drop in bonuses that UAE middle
managers received between 2008 and 2010,
according to Towers Watson.
paramount for a property
bounce back.
“The UAE has over $45
billion of future projects
in the pipeline and has
one of the highest levels
of per capita transport
infrastructure spending
globally, augmenting its
investment edge within the
broader MENA region,” it
and is proceeding with
work at its Dubai Maritime
City development, an
industrial zone for maritime-
$35.5 bn
The volume of new construction contracts
awarded in Abu Dhabi last year, figures from
Ventures Middle East show.
UNITED ARAB EMIRATES
said in a note.
It is expected that
increasing investments
in major transport
infrastructure across
the UAE will fill
development gaps, create
jobs and ultimately create
more demand for good
quality real estate in
the country.
related companies.
Drydocks and Maritime
World, the ship repair unit
of financially-troubled
Dubai World, is currently in
talks with its bank creditors
about restructuring a $2.2
billion syndicated loan that
dates back to 2007. Buamim
added he “hopes to reach an
agreement with the banks
by the end of April.”
April 2011 gulfbusiness
DIB profit falls
62 per cent
Dubai Islamic Bank, the
emirate’s third-largest
lender, posted a full-year
net profit of AED806
million down from AED1.21
billion in 2009, according
to company statements.
The bank’s fourth-quarter
net profit slumped 62 per
cent to AED33.2 million
($9.04 million), Reuters
data shows, down from
AED86.55 million in
2009. DIB said provisions
amounted to AED864
million in 2010, while
assets grew nearly seven
per cent to AED90.1 billion.
DIB operates 68 branches
across the UAE, six of
which opened last year.
No UAE capital
outflows
The UAE’s Central Bank
governor Sultan Nasser Al
Suweidi said he has not
seen capital outflows due
to unrest in the region, and
added that inflationary
pressures would not be
of concern despite high
oil prices. Speaking after
a GCC business gathering
he told reporters: “There is
absolutely nothing unusual.
No capital outflows.”
Property
continues spiral
Real estate prices in the
UAE are likely to remain
under pressure in the near
to medium term, according
to Al Mal Capital. Dubai
property prices are
expected to bottom out
by the end of 2013, while
prices in Abu Dhabi will
likely bottom out by end
2014, the firm said in an
analysis note. “The UAE
real estate sector offers
deep value at current
levels,” it said.
15
 SAUDI ARABIA
Saudi faces protests home and abroad
Reuters
Saudi Arabia officially
entered the region-
wide troubles in March
after sending thousands
of its soldiers into Bahrain
to protect government
facilities.
The Kingdom had
witnessed skirmishes and
political protest on its home
SPOTLIGHT
HSBC rolls out Saudi expansion
HSBC Middle East
has signed a $435
million deal to finance
a steel plant and rolling
mill in Jubail, to be run
by a unit of petrochemical
giant SABIC.
Hadeed, a wholly-
owned subsidiary of
SABIC, aims to produce
one million tonnes per
year of pellets and half a
million tonnes of rebar.
INNUMBERS
$267 million $147bn
The amount Prince Alwaleed bin Talal will invest in the
Saudi stock market despite recent unrest.
16 gulfbusiness April 2011
soil, but this was the first
time troops were sent to
help its neighbour stamp
out protests.
Bahrain opposition
groups condemned the
military move, calling it an
occupation that pushes the
country dangerously close to
a state of ‘undeclared war.’
It represents one of
the biggest deals of
its kind in the region,
and adds to HSBC’s
ambition to expand
into Saudi.
Most importantly
for Saudi, Hadeed
will now be able to
use its rolling mills
at full capacity
without relying on
imported steel.
Saudi’s FDI in 2010, according
Rising tensions.
The decision sent shock
waves through the country’s
stock market and analysts
say that the protests may
escalate further in Saudi.
In early March, about
F optimistic on the firm’s
500 protesters demonstrated
in Al-Hofuf, alongside
the country’s major oil
field Ghawar.
to SAGIA.
Real estate tops
oil sector
Real estate is the highest
valued sector in Saudi
Arabia at $347 billion,
followed by infrastructure,
oil and gas, petrochemicals
and power and water,
according to the latest
research from Zawya. The
highest valued project in
the Kingdom is the world’s
tallest tower, KHC, valued
at $20 billion, followed by
Ras Al Zour Power and the
desalination plant Gosi in
the Duhairah District.
SABIC upbeat
on Asia
Saudi Basic Industries
Corp’s (SABIC) chief
executive said he was
outlook this year, with
growth expected to
come in Asian markets.
Mohammed Al Mady said
Asian countries such as
China and India were
growth drivers despite the
earthquake in Japan, while
business in Europe was
now slightly improving.
SABIC was forced to shut
down its plant in Japan
after the devastating
earthquake and tsunami.
Population to
double
Saudi’s population is
expected to reach 30
million in 2017, double
the figure just 30 years
ago, new research by
Euromonitor International
shows. Its analysis of the
Kingdom’s population
growth to 2030 also shows
the number will hit 36.5
million by the end of
the period under review,
representing a near 40
per cent rise compared
to 2010.
 KUWAIT
Grapheast
Kuwait battles calls for PM’s resignation
Protests across the
Arab world spread
to Kuwait in March,
with hundreds of young
demonstrators taking
to the streets calling
for reform and the
replacement of the current
prime minister.
Around 1,000 people
gathered in a square
near government offices
PROJECTFOCUS
Kuwait lands deal ahead of oil rivals
China has approved a
$9 billion oil refining
and petrochemical joint
venture between Kuwait
and the China Petroleum
and Chemical Corporation.
The project, to be built
Reuters
in the southern coastal
city of Zhanjiang, will
secure Kuwait a solid
outlet for its oil, ahead
of competing investors
INNUMBERS
6 per cent
The maximum Kuwaiti inflation could
reach this year, according to the
central bank.
18 gulfbusiness April 2011
on the seafront amid tight
security.
The demonstrators
carried banners calling for
the resignation of Prime
Minister Sheikh Nasser
Mohammad al-Ahmad
al-Sabah.
Five of the six
governments Sheikh Nasser
has formed as premier
have been forced to resign
such as Venezuela, Russia
and Qatar, all of which
are planning refineries
KWD32m
Cost of a gas pipeline project Kuwait
Gulf Oil Co. plans to tender this year.
and parliament has been
dissolved three times.
Protests have since
escalated in Kuwait and
across the Gulf, which
culminated in Gulf officials
approving a $20 billion
F 15 licences belonging
economic aid package for
Bahrain and Oman. The
UAE and Qatar are the only
two Gulf states to be left
untouched by unrest so far.
in China. Kuwait aims
to more than double its
crude exports to China to
500,000 barrels per day,
versus last year’s sales at
just under 200,000 bpd.
For China, which imports
some 55 per cent of its
crude requirements, a
commitment to lock up
long-term oil supplies
is essential.
Pay grates in
Kuwait
Just five per cent of
Kuwaiti professionals are
highly satisfied with their
salaries, according to a
recent survey by Bayt.com
and YouGov Siraj. More
than half of those polled
said they had a mild
satisfaction with pay,
while 40 per responded
with a low satisfaction.
The study additionally
revealed that 70 per cent
of residents felt they
have personally been
affected by the global
economic crisis.
Bogus firms
stamped out
Kuwait has cancelled
to what it calls bogus
companies in the
country. After completing
investigations on the
alleged violations of
56 companies, the
Ministry of Commerce
and Industry said 15
have been proven to be
imaginary. Sources said
that the addresses of
the 15 companies were
unknown and their
owners had not visited
the ministry for a long
time. The move forms
part of Kuwait’s efforts to
tackle corruption.
GBK net income
plummets
Gulf Bank of Kuwait
(GBK) net profit shrunk
to KWD19 million in 2010
from KWD28 million a
year earlier, Chairman Ali
Abdul Rahman Al-Rashaid
Al-Bader announced at
the bank’s AGM in March.
Recorded operating
revenues stood at KWD135
million in 2010 compared
to KWD83 million in 2009.
 QATAR
Hope at last for Qatar IPOs in 2011
QInvest breathed
some life back into
the initial public offering
(IPO) market in Qatar,
announcing it was working
on two deals this year.
The investment bank,
49 per cent owned by
Qatar Islamic Bank, is
working to conclude
two “reasonable size”
mandates for IPOs by
local companies this
year, according to its
chief executive officer
Shahzad Shahbaz.
“We are looking to
conclude one transaction
in the second-quarter of
2011, and the other in
the second half.” The size
of the IPOs is yet to be
determined, he said.
IPOs in Qatar generated
QR502.5 million ($138
million) in 2010 in one
offering compared with
QR3.38 billion in 2009
also in a single share
sale, data compiled by
Bloomberg shows.
COMPANYFOCUS
Doha Port deal goes to Chinese contractors
A Chinese firm has
won a QR3.2 billion
($879 million) contract to
build the first phase of
Qatar’s New Doha Port.
China Harbour
Engineering Co (CHEC)
will be responsible for
digging a 17 metre deep
basin, building quays and
INNUMBERS
20 per cent QR14.72bn
Qatar’s GDP growth this year, according to
estimates from the IMF.
20 gulfbusiness April 2011
wave barriers.
The QR14 billion port
will be located near
Mesaieed and includes a
container wharf, general
cargo wharf, naval forces
wharf, and breakwater.
It forms part of Qatar’s
efforts to upgrade its
transport infrastructure
Drop in market capitalisation on the Qatar
stock exchange in a single day in March.
F $170 billion into projects
before hosting the 2022
World Cup.
CHEC is a subsidiary
of China Communications
Construction Company,
which has 31 overseas
branches and offices
with business activities
covering more than 70
countries.
Qatar powers
into Spain
Qatar Holdings is to buy
more than six per cent
of Spanish power utility
Iberdrola for just over
two billion euros ($2.82
billion). The companies
said in a statement that
Qatar Holding’s stake will
mostly come from shares.
The partner also agreed to
work together to develop
new electricity-related
business projects, mainly in
fast growing and emerging
markets. Iberdrola also
intends to establish its
regional headquarters
in Qatar.
$170bn planned
for projects
Qatar is planning to pump
in the next 11 years and
nearly $140 billion will be
allocated for infrastructure,
according to the country’s
finance minister Yousuf
Hussein Kamal. The
remaining funds will be
channelled into oil and
gas projects, which have
already received more than
$100 billion over the past
decade. He said Qatar’s
GDP would rise by more
than 18 per cent in 2011.
Qatar tops
MidEast’s least
corrupt
Qatar has been ranked
among the top 20 least
corrupt countries in the
world. According to the
Corruption Perception
Index 2010 released by
Transparency International,
Qatar has improved its
rank to 19th place globally
among the 178 countries
last year, from 22nd in
2009. It got the top spot in
the Middle East and North
Africa and beat the UAE,
which ranked 28th.
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Investing based on macro themes may work for those with short-term horizons.
But for long-term investors, investing above the fray has its advantages.

Robert Taylor is Director of

At Harris Associates we aim to avoid
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try to find holes in the analyst’s contentions
International Research and a Portfolio
Manager at Harris Associates, a value-
oriented equity investment management
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of why the stock is a good idea. In the end,
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quality companies in which we are investing.

Harris Associates L.P., a subsidiary of Natixis Global Asset Management, is an investment adviser registered with the U.S. Securities and Exchange Commission (IARD No. 106960)
and is authorized to provide investment management services in the United States. The company conducts all investment management services in and from the United States. • This
communication is provided by Natixis Global Associates Middle East, a branch of Natixis Global Associates UK Limited, which is regulated by the DFSA. Related financial products
or services are only available to persons who have sufficient financial experience and understanding to participate in financial markets within the DIFC, and qualify as Professional
Clients as defined by the DFSA. Registered office: PO Box 118257, 5th Floor, Building 8, Gate Village, DIFC, Dubai, United Arab Emirates. • Natixis Global Associates Middle East, a
branch of Natixis Global Associates UK Limited, is a business development unit of Natixis Global Associates, the division of Natixis Global Asset Management dedicated to cross-
border distribution. Natixis Global Asset Management, a subsidiary of Natixis, is the holding company of a diverse line-up of specialized investment management and distribution
entities worldwide. • This communication is for information only and does not constitute an offer of financial services, nor a recommendation or offer to purchase or sell shares in
any financial instrument. Investors should consider the investment objectives, risks and expenses of any investment carefully before investing. The analyses and opinions referenced
herein represent the subjective views of the portfolio manager as referenced. ADINT201-0311

Reuters
£20 billion aid pack agreed
Bahrain and Oman have suffered the worst of
the Gulf’s protests, resulting in an emergency
aid package being deployed by GCC members. The
$20 billion economic lifeline will be allocated for
development projects over the next 10 years in the
two Gulf countries. Fighting between protesters and
authorities to escalate in the coming months.
Branches shut their doors
British banks HSBC and Standard Chartered shut their
branches in Bahrain as clashes between security forces
and anti-government protesters intensified. HSBC closed
its four branches in Manama, citing concerns for the safety
of its 334 employees. Standard Chartered, which employs
500 people in Bahrain, shut all seven of its branches. ATM
machines are stocked and functioning, HSBC said, while
Standard Chartered said its wholesale and private banking
clients can call their relationship managers at home.
Credit boost for Muscat Airport
Arab Bank, Jordan’s largest lender, will provide credit
facilities worth $410 million to three contractors to
carry out the third development phase of Oman’s Muscat
International Airport.
Arab Bank-owned Oman Arab Bank, Europe Arab
Bank and Arab Bank in Bahrain will collectively provide
the loan to a consortium of international contracting
companies working on the project, the lender said in an
emailed statement.
The credit facilities to be provided include advance
payment guarantees and letters of credit.
INNUMBERS
50 per cent
The reduction in Oman’s budget deficit in 2010
on the back of higher oil prices.
BAHRAINOMAN
30
seconds on
the business
of... luxury
watches
Raynald Aeschlimann
Vice president, Omega
How did the luxury watch market fare in
the recession?
Recession is a very big word. If you are selling a
product which has emotional sentiments attached
to it, you’ll be amazed how many people will still go
out and buy those products. For example, consumers
wouldn’t buy a new car if they already had a nice
car, whereas people still buy expensive watches as
gifts, or for themselves, because they like to buy into
emotion through difficult times.
Is the UAE a key market for luxury watch brands?
Over the last 10 years, the UAE has become one of
the top ten markets for companies to invest in –
joining cities like London, New York and Paris.
Dubai is particularly attractive as it has some of
the best malls in the world filled with fashionable
luxury brands.
Outside of the Gulf, which other markets are growing
for luxury brands?
If you take Omega, for example, over 50 per cent of
our turnover is coming from China. Unlike many
other brands that are only starting to look into
different markets, we have been established in China
for almost 30 years across five major cities. Other
increasingly popular markets include Hong Kong,
Taiwan and Japan.
How do you research what customers look for in
a watch?
Our employee’s talk to our customers all over the
world, we want them to feel that they are linked to the
brand. When you buy an expensive watch you want
to know that in 10 years time it will continue to be a
functional product, it may not be fashionable but, at
least, you know that it will be in line with the brand.
What do you think has been the main change over
the last decade as the luxury market becomes more
mainstream?
Luxury is buying a more expensive, better quality
product rather than a cheaper alternative. People are
getting wealthier and more willing to splash out on
a branded watch they trust will last them a lifetime
rather than having to replace it every few years.
April 2011 gulfbusiness 23
 COMMENT
I<MFCLK@FE6
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a
8d`[Xcck_\lei\jk#`kËj\XjpkfXjjld\k_\i\n`ccY\^i\XkZ_Xe^\%9lke\n
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llow me to
start with a proviso. I am not being
negative or positive. I simply want to
write based on what I see – and not
what I hope will be.
To the everyday Arab what is
happening is godsend. A couple of
months ago nobody would have
thought such sweeping change
could happen in the Arab world. As
a people, we seemed quite content
with our lot in life and ready to bow
our heads to the person who wielded
the biggest stick. We always thought
that politics and social issues were
beyond our comprehension and
therefore beyond our care. The fact
that a few voices in the wilderness
were heard meant as much as a
shout in the dark. No one knew
who was making noises and, more
importantly, no one cared.
Now we see Tunisia, Egypt, Libya,
Yemen, Bahrain and Oman all going
through a rebirth. But as with all
births, it is a painful, long and
bloody journey. But the problem is
not the birth; it is the child that is
born who matters as the birth is just
the beginning. The hard part starts
after the child is born. How we take
care of the child, teach him or her
ILLUSTRATION: TARAK PAREKH
and the environment we create will
determine to a large extent the type
of person that child will grow up
into. Like the child, any revolution is
defenceless at birth. It is at the beck
24 gulfbusiness April 2011
and call of those who are taking care
of it. If they are wise and good, the
child has the opportunity to grow
well. If not, the child will struggle
and resentment can appear. As the
child grows older, it becomes more
set in its way and less willing to
compromise as he or she starts
to believe that the world revolves
around them. The same ideas swirl
in the heads of revolutionaries as
they start to believe that the cause
and only the cause matters. As the
child reaches late adulthood its body
starts to deteriorate. Revolutions
are the same and start becoming the
problem that they tried to eradicate
in the first place. Eventually, the
child dies and so do revolutions.
It is a circle that must happen. But
then, if that is the case, why have a
revolution in the first place?
The simple answer is that
revolutions are important sparks, but
it is the evolution of the revolution
that we should all nurture. To
transform an ideal from thought to
reality takes time and needs many
brains, as well as brawn, to help
change what was good at one time to
what is good now. The reason most
revolutions happen is because the
old system doesn’t suit the current
situation, but certain people who
benefit from it are not willing to
adapt and will fight change to the
bitter end.
Mishal Kanoo is deputy
chairman, Kanoo Group
Indeed, it is easy to crack an egg
but it takes a cook to turn that
simple egg into a meal. We can all
break the egg. But how many of us
are willing to learn what it takes to
make that egg into a meal?
The sad thing is that most of these
revolutions are destined to fail.
Some might succeed but history tells
us most won’t. Let’s take Egypt for
example. Yes Mr. Mubarak is gone
but has the system that propped
him up changed? Has the military
that has ruled Egypt since the 50s
changed? That too was a revolution.
How successful was that for Egypt?
Some people loved and adored Gamal
Abdul Nasser and still revere him
as the leader of the revolution. But
has that system changed Egypt for
the better or worse? I could bore you
with facts that would support my
argument that Egypt actually lost
ground on all important fronts, but
that won’t matter if you believe in the
Arab revolution sparked by Nasser.
Today, the Egyptian military owns
more than 10 per cent of the country’s
GDP and has its hand in every pie.
True, Mubarak is gone but haven’t
the military effectively taken over?
They have dissolved the constitution,
hung the parliament, did not repeal
marshal law, and have not freed the
press. So what has changed?
I was proud to see the Egyptians
stand up to a tyrant, but was
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9LKDFJKN@CC=8@C%É
Mubarak the tyrant, or just the face
of the tyrant?
What happens in Tunisia is the best
litmus test for me. The country doesn’t
have an all powerful military and
has credible political parties. It has
a very educated population and more
importantly, it is showing all the signs
of evolving into a true democracy.
Only time will tell whether they have
the right formula or not.
Before anyone argues that there
are successful revolutions, I’d like to
point out the major four examples
of revolutions that we know of:
the Chinese, Russian, French and
American ones. Let’s forget the first
two unless you consider killing
millions of your own a mark of
success and focus on the latter two.
During the French revolution so
much blood was spilt that it became
‘the reign of terror’. In the century
after the French revolution the
country was run by one emperor,
Napoleon, and three kings – Louis
XVIII, Louis XVII and Napoleon III. It
took two world wars and around 150
years for France to finally become a
proper democracy. The US won its
independence in 1776 but the Civil
War followed in 1861, which claimed
the lives of at least 600,000 military
personnel and countless civilians.
As far as business is concerned
there’s no doubt that revolution brings
chaos and disruption. Money, being
a fickle child, doesn’t like being in
the company of either. For
the immediate future, any
country that is in the throes
of a revolution can kiss its
money flow goodbye. No
one considers investing in
a war zone.
Bahrain, a leading
financial hub of the region
and a banking haven for
the Gulf with one of the best
run central banks in the Arab
world, is now reeling from
the pressures of destructive
forces. Even after King Hamad
offered the opposition an olive
branch, they decided to spurn
it and that whirlwind will have
dire consequences. Business
is at a standstill and even the
shopkeepers are wondering
when the situation will return ISTOCK PHOTO
to the status quo. Many SMEs
will cease to exist if the situation
continues and, as a result, the
livelihood of many will collapse.
The irony of this situation is that
one of the big demands in Bahrain
by the opposition was that the
government was not providing
enough jobs. Yet now, with all the
companies that will shrink and
close – and with further overseas
investments unlikely in the
foreseeable future – this goal is
looking more distant by the day.
Revolutions famously eat their
children. Evolutions grow them. ■
April 2011 gulfbusiness 25
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and geopolitics.
COMMENT
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I@JB@E>LC=GIFG<IKP6
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kfo`Z[iX^]XZkfij%

i
t is ironic that ostensibly
‘conservative’ investors view brick and mortar property as
a less risky alternative to the stock market. Unfortunately,
property bulls in the Gulf have been devastated by an epic
crash that has led to 70 per cent price falls, a glut in properties
that could take a decade to clear, and devastated the balance
sheets of governments, banks and property developers.
Investors in Gulf property are also saddled with mortgage
and bank finance rates that are among the highest in the
world, plus stratospheric ‘service charges’ that offset the
income available from renters. I can sell my shares of Coca
Cola or HSBC with a telephone call. However, owners of unsold
apartments and villas have to be patient to find a credible
buyer and swallow 30-40 per cent hits on the asking price.
Liquidity risk in GCC property is so huge, financing cost so
high, that I believe investing in the world’s major stock markets
is a cakewalk compared to investing in properties in countries
where the desert, unlike land in Manhattan, Singapore or even
London, is limitless.
Property cycles last at least seven years. The formative
experience of my youth was the crash in the London property
market in 1990 after Saddam’s invasion of Kuwait. London
rents did not bottom for five long years. Rents in the Gulf could
keep falling for at least a decade as, unlike London, they are
no longer magnets for global capital, local demand is minimal,
ILLUSTRATION: TARAK PAREKH
term visas and where property rights are not
enshrined in constitutional law.
The analogy for the GCC is Japan since the
1980s, where property prices literally fell
for two decades, with some trophy luxury
properties losing 90 per cent of their bubble
values. Credit crunches and zombie banking
systems only prolong the depth of a property
bear market, as Japan proved since the Tokyo
real estate market crashed in 1990. The greater
the scale of leveraged speculation, the greater
the exposure of the banking system to property
financing and development, the lower the
proportion of end user demand, the greater the
time a property crash will take to reach bottom.
That point has nowhere near been reached in
the Gulf property market, where 30-50 per cent
downside risk still exists despite the epic falls
witnessed since 2008. Hong Kong’s property
crash between 1997 and 2004 slashed 70 per
cent from peak values and left one third of
owners in negative equity and this bear market
lasted eight years. By any metric of financing,
affordability and end user demographics, the
property markets of the Gulf are nowhere near
as deep or sophisticated as Hong Kong. This
suggests the bear market will last longer than
eight years and the peak-trough loss in values
will be far greater than 70 per cent, closer to
Japan’s 85-90 per cent.
The financial system of the Gulf is clogged
with bad loans made to developers and
speculators at inflated valuations at the peak of

and debt saddled banks cannot provide dollar mortgages at the
five per cent range that would ignite owner-occupier demand.
The recent political unrest in Kuwait, Egypt, Oman and Bahrain
will make foreigners think twice about making a brick and
mortar commitment to countries where they live only on short-
È@:8EJ<CCDPJ?8I<JF=:F:8
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8G8IKD<EKJ8E;M@CC8J?8M<KF9<
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the credit bubble in 2007-08. Home prices will
continue to fall as long as developers continue
to deliver new units in a glutted market and
affordability metrics do not attract end user
demand. Yet end user demand is meaningless
without cheap, reasonable mortgages. Property
investors in the Gulf routinely took 90 per cent
leverage in an illiquid asset class. The result?
A systemic time bomb of homeowner negative
equity and mortgages. Leverage is the toxic
ingredient in a property bust as the battalions
of jailed ex-flippers in the GCC’s prisons can
sadly attest. ■

April 2011 gulfbusiness 27

 COMMENT
;FPFLBEFN8
ÊC<8;<I@EE8D<FECPË6
Dr Tommy Weir, vice president of
leadership solutions at Kenexa and author
K_\nXm\f]lgi`j`e^jXZifjjk_\i\^`fe_Xm\k_ifnek_\jgfkc`^_kfe
of The CEO Shift. k_\eXkli\f]c\X[\ij_`g%8i\jfd\Yfjj\jc\X[`e^j`dgcpY\ZXlj\k_\p
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t
he deterioration of some of the entrenched
regional leadership regimes over the past month can teach
us some valuable lessons about every day leadership and the
running of our businesses.
As I watched the enraged people on the streets while the
leaders remained hidden, it left me wondering, “What type of
leaders are they?” What jumped out at me is that they are LINOs
– Leaders In Name Only. A LINO is a person who occupies a
position of leadership and his/her thinking and actions are
determined by that position and the simple fact that they are
the leader. Are they?
They are de-facto leaders since they do hold a respected
position. But, in reality, they are far from being a practising
leader – thus the ‘in name only’. Have you every met a LINO?
Or worse yet, worked for one? Yes, we all have had LINO
interactions during our working careers. But today’s real
question goes to the CEOs and MDs – do you have LINOs in
your management ranks?
This past year business leaders have been bravely asking me,
“Are my leaders any good?” Each time. I’m questioned, I pause
and probe the inquiry. It seems that they are worried that they
have the dreaded LINOs.
So why do employees follow a leader – only because of their
position? The LINO makes up the bottom rung of the five
ILLUSTRATION: TARAK PAREKH
reasons why people follow leaders.
1. BECAUSE OF YOUR POSITION
People follow leaders because they have to – until they have
an opportunity not to. During the people revolutions in North
È8C@EFC<8;<IJ@EE8D<FECP @J
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@=9<:8LJ<?<&J?<?8JK?<GFJ@K@FE
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28 gulfbusiness April 2011
Africa, citizens took to the streets to get rid of
their leaders. In the corporate world employees
make this decision by changing employers
to get a new (and hopefully better) manager.
Employees who have a LINO typically perform
at the bare minimum to sustain their role until
they cannot take it anymore. Having a title or
position does not equate with being a leader.
2. BECAUSE OF YOUR PERSONALITY
People follow leaders because they like them.
So if you are a likeable person, you have a
decent chance that people will follow you
or at least want to be with you. But are you
leading them? If you are solely relying on your
personality for leadership effectiveness, you
are in real danger of not sustaining support
and delivering results for your organisation.
3. BECAUSE OF WHAT YOU PRODUCE
People like to follow leaders who produce
results and do great things for the
organisation. Winners have a strong cadre of
followers, but what happens when the winning
stops? Many fans stop cheering and may even
switch teams – just like employees. A question
for leaders at this level is: are you producing
the results (most likely you are) or are you
leading others to produce results?
4. BECAUSE OF WHAT YOU DO FOR PEOPLE
People truly engage with leaders who help
them to improve. This is the level where real
leadership and followership kicks in. The focus
here is on helping employees to be the best they
can be so that they can succeed individually
and collectively.
5. BECAUSE OF YOUR PERSONHOOD
This is the ultimate level of followership and
very few achieve it. At this level, people follow
because of who you are. Interestingly enough,
this type of leader is usually very humble and
focused on the greater community – think of
the likes of Nelson Mandela. ■
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 ANALYSIS POLITICS
The UAE’s role amid unrest
Surrounded by turmoil, the UAE has reclaimed its mantle as the oasis of opportunity in the
desert, although it’s too early to rule out future political unease, writes GULF BUSINESS
Reuters
I
n stark contrast to the
condemnation that was aimed at it
during the dark days of the financial
crisis, Dubai is attracting little in
the way of negative sentiments at the
moment. The UAE is currently standing
out from its neighbours as a port of
calm in a turbulent sea of political
and social unrest. Although analysts
say the economy is likely to face some
blowback from the turmoil engulfing
other Middle Eastern states, the UAE’s
current state of low political risk is the
country’s trump card.
“A year and a half ago people looked
at the UAE, and Dubai in particular,
as the source of the region’s problems.
But they’re now realising that it has
real strengths,” says Simon Williams,
HSBC’s chief economist for the Middle
East and North Africa (MENA) region.
“There have been changes happening
in the UAE for a year or more. But
my only worry is that they will lose
momentum with the agenda so full
30 gulfbusiness April 2011
with other items. In particular, I’m
referring to issues around the business
environment reforms, like majority
ownership rights for foreign firms.”
Williams adds: “If you consider
this issue, which has always been a
grievance, alongside the stable political
and economic environment then it’s a
more positive outlook.”
Most agree that no economies in
the region qualify as ‘safe havens’ for
investors, but the UAE and Qatar stand
out as two countries least at risk.
But not all are convinced that the
difficulties throughout the rest of the
Arab world won’t catch on elsewhere.
David Butter, regional director for
MENA at the Economist Intelligence
Unit, offered a note of caution: “Your
first reaction to events is to ask how
far will it spread? With what’s
happened in Oman, Bahrain and Saudi
Arabia, you think maybe it’s not that
outlandish that there could be trouble
in the UAE. This idea would, of course,
be laughed out of court.
“You’ve got the presence of Emirati
angst; the feeling that you’re not doing
as well as others and did we really ask
for our country to look like this? But
Emiratis are in such a minority and
expats are not going to band together
in any unified force.”
In the last decade, Gulf states
have witnessed the emergence of
political debate around more open
representative systems.
Only lately though has this led to
protests, with the most recent coming
from Kuwait where thousands of
demonstrators took to the streets
calling for sweeping political changes.
The economic impact of the Middle
East’s ongoing protests has been fairly
benign in the UAE so far. Indeed, there
have not been capital outflows, the
Central Bank governor, Sultan Nasser
Al Suweidi, said recently.
But demand for investment generally
could be depressed, says Williams.
 “It won’t feel the same kind of
headwind as affected countries in
the Gulf, nor will it be immune. The
perception of the region has worsened
in the last couple of months and until
things become more stable, appetite for
Middle East assets remains low.
“Whenever markets panic there
will be some investors that can take
advantage. In the current scenario this
will be where markets are oversold for
all the wrong reasons.”
There have been reports that
multinational companies with
headquarters in New York have delayed
plans for senior executives to transfer
to Dubai. This could be because of
a distorted view of the true risks
associated with the UAE compared to
the region as a whole – what some call
‘decision-making by headlines’.
Jane Kinninmont, a senior research
fellow at Chatham House, a London-
based think tank, says: “But what
does true risk actually mean though?
A year ago analysts were saying
Libya and Eqypt’s true risk was low,
but look what’s happened. Now, even
though everyone assumes Dubai and
Abu Dhabi will be ok, we’ve had some
reminders that you just can’t predict
these things.”
Meanwhile, as sensitive as the issue
may be, there are opportunities for the
Grapheast
Egyptians got their first taste of democracy in the March 19 referendum on a
package of constitutional changes.
UAE to capitalise on the unrest.
Butter says: “Traditionally, the UAE
has inadvertently benefitted from
conflict for a long time, for example
the Lebanese conflict was positive for
the economy, as was the Iran-Iraq war,
Operation Desert Storm and for that
matter the Second Gulf War.
“What the Lebanese civil war did
was pull back Lebanon as the services
centre for the Middle East. Dubai was
ready to pick up the slack.”
He adds: “But the same doesn’t apply
this time round. It’s not just an armed
No economies in the region qualify as
‘safe havens’ but the UAE and Qatar
stand out as two countries least at risk.
security issue, it’s more to do with
problems arising from deep structural
issues in Arab society. The idea of
changing the way things are done is
spreading and because the UAE is like
a microcosm of the Arab world, the
danger of infection is that bit stronger.”
Meanwhile, commentators have
asked whether the UAE has a role to
play in the clean-up operation in the
post-unrest MENA countries. But UAE
real estate firms that were previously
keen on Libya and Egypt may find
Grapheast
they have enough on their own plate
at home, particularly in restructuring
their debt obligations.
Kinninmont says: “It will also be
interesting to see how the North
African countries that traditionally
relied on European countries for trade
treat players in the Gulf.
“We may see some backlash against
European partners that were once
close with the previous regime. So Gulf
investors could play a role on
top of the current investment in
property and tourism. Countries facing
huge upheavals will need capital and
job creation.”
The UAE’s small national population
and huge national resources stand it
in good stead for social and political
harmony for the time being.
Most independent analysts agree
that, in the longer term, with an
educated population, there will be
more vocal demands about how the
economy is handled. It would be
wrong, therefore, to assume that there
are no issues in all the Gulf states.
Bahraini Shiites demonstrate in front
of the UN headquarters in Manama.
April 2011 gulfbusiness 31

Chinese churn
The Middle East could lose swathes of its banking talent as Asian firms poach staff in
preparation for growth on their home turf, writes RYAN HARRISON.
getty images
I
n the same way that the Gulf
financial services job market
expanded in the last decade
with European and North
American senior executives, banks in
economic hotspots like Hong Kong
and Singapore are recruiting like
never before.
In some cases top bankers are
being offered more than double their
current salary to make the move.
Ally Ho, head of financial services
for Middle East and Africa at
Pedersen & Partners, said: “There’s
a growing trend of people wanting
to move to Asia either for financial
or lifestyle reasons, or both. Also,
there’s a lot of funds in Asia lining up
investments, so they need the talent.”
But, although this type of poaching
is being touted as the next big threat
to Gulf institutions in the coming
years, recession-weary bankers are
more cautious than they once were
about making a dramatic career
change; the days of job-hopping for
a quick salary or bonus bump are
long gone.
One banker, who last year moved
from Dubai to Hong Kong to take
up a position at an American-based
bank with a large footprint in Asia,
said banks in the Far East have the
advantage of economic growth and
the ability to pay hefty bonuses. “This
region is still growing while North
America, Europe and Japan continue
to slide sideways.
“New hires can still get good
packages if they fill important roles.
Otherwise, front office folks only
eat what they kill. Back office folks
are being squeezed for a number
of reasons, including the fact that
revenues are slightly up, but not as
much as headcount, and Western
governments and analysts are
pushing to reduce total compensation
down back to pre-2007 levels.”
A particular focus for banks
has been the enormous personal
wealth of individuals in Asia. A
growing number of private banks
have announced ambitious staffing
expansion plans to take advantage of
this high net-worth segment.
Private banks have announced
ambitious staffing expansion plans to
take advantage of Asian HNWIs.
Indeed, recruitment levels at some
financial institutions have even risen
beyond pre-crisis levels.
Citi said it plans to hire as many
as 200 senior staff in its private
bank over the next few years Dena
Brumpton, chief operating officer
at its private bank, told Reuters
recently. “We see a lot of growth
coming from Asia. But there will
be selective hiring pockets in the
EMEA (Europe, Middle East and
ANALYSIS HR
Africa) and US regions, too.”
The hires come on top of the 130
managing directors the bank added
during the last 12 months.
The wealth of Asia Pacific-based
individuals with investable assets of
$1 million or more outranked Europe
for the first time at the end of 2009,
according to the Capgemini Merrill-
Lynch 2010 World Wealth Report.
Faced with tougher capital
requirements in the wake of the
credit crisis and mixed prospects for
earnings, many investment banks
are expanding their private banking
units, a lucrative business where little
capital is put at risk.
Barclays Wealth plans to double
the number of high net-worth
bankers globally over the next five
years. And Coutts, the London-based
private bank owned by Royal Bank of
Scotland, also plans to recruit around
150 people in Asia over the next three
years, adding to the 150 people it
hired in the last year.
Add to this that HSBC, which has
already moved the office of its chief
executive to Hong Kong, is expected to
decide in the autumn whether to keep
its headquarters in the UK.
To stem this potential brain drain
in the Gulf, banks have offered hefty
bonuses this year to retain their
best talent, with some prepared
to pay up to a 30 per cent increase
on 2010 levels, said Cecile Hofer,
managing partner at headhunter
Taylor Hofer Partners.
“There will have been some large
payouts this year, especially in
markets like Saudi Arabia, Kuwait and
Abu Dhabi. It’s primarily a retention
strategy for these banks,” she added.
April 2011 gulfbusiness 33

Small is beautiful
The Gulf has launched SME initiatives to support its fledgling entrepreneur community,
recognising the sector’s power to stimulate and diversify the economy, writes RYAN HARRISON.
I
f Gulf governments and business
leaders are looking for swift
economic growth in the coming
years, then small to medium
sized enterprises (SMEs) are a good
place to start. In most economies in
the region, SMEs make up the large
majority of all businesses, employing
nearly half of the work force. They
are now widely tipped to lead
growth as the Gulf emerges from the
global recession.
A number of stimulus measures
have been announced so far to
support the sector and generate
further momentum. Most recently, in
Dubai a new ranking system called
the Dubai SME 100 hopes to provide
benchmarks and potentially provide
a platform for a secondary listing
for SMEs, while the Department
of Economic Development and the
Dubai International Financial Centre
launched a comprehensive incentives
package. Regional private equity
firm Abraaj Capital also unveiled
its $250 million Riyada Enterprise
Development fund devoted to SMEs,
followed by Wamda.com, an online
knowledge sharing hub for regional
entrepreneurs.
In the past the Bank of Baroda, the
ANALYSIS BUSINESS
Indian bank that has fully-fledged
commercial banking operations in
the UAE, offered tailored finance
to SMEs. It has business financing
initiatives such as the SME Loan
Factory to cater to the segment.
Michael Burchell, a director at
the Great Places to Work Institute,
a global consultant and researcher
on SMEs, said: “The UAE is coming
out of the doldrums and coming
back from the economic pummeling.
But this is probably the best time
for entrepreneurs to start their own
business. It’s happening everywhere
from the UK to Brazil, and it can
happen in the UAE.
“There are opportunities in
terms of growth; when you get in
at the low point in the market you
can rise as the market rises. The
federal government is also looking
at practices to make sure they are
competitive, especially the Dubai
Competitive Council,” he added.
SMEs already make up 95 per cent
of registered businesses in Dubai, 42
per cent of the workforce and 40 per
cent of the emirate’s GDP, according
to the Ministry of Economy.
The first official definition of
SMEs in Dubai was released by the
emirate in 2009 and includes any
Dubai-registered company with
a turnover of up to Dh250 million
($68.06 million) and employing up
to 250 staff.
Meanwhile, last month Saudi
Arabia hosted the SME Economic
Forum 2011, a gathering of business
leaders looking for the key to unlock
sustained growth through small
business in the Gulf. Analysts say
Saudi Arabia is one of the countries
least affected by the global economic
crisis, in large part because of its
commitment to start-ups.
Adel Al Howar, senior executive
vice president and head of the
individual banking sector at Saudi’s
biggest bank NCB, said ahead of the
April 2011 gulfbusiness 35
ANALYSIS BUSINESS
conference: “The growing government
emphasis on this sector, through a
number of financial and educational
support programmes, has visibly
impacted its growth.”
But, others believe there’s still
work to be done. Advisory firm
Capitas Group International (CGI)
urged recently that a clearer timeline
be created around the introduction of
a Saudi SME authority.
The firm recommended that a
framework should include the
authority’s ability to monitor the
interests of smaller companies, as
well as facilitate the development of
policies that encourage SME sector
growth, enable accurate evaluation
of the sector through regulatory and
financial reforms, and help in the
collection of data on the sector.
“The Shoura Council recently gave
its approval for the creation of an
SME authority in Saudi Arabia,”
Naveed Siddiqui, CEO of Capitas
Group International, said in the
analysis note. “This is a critical
development for the Kingdom. Today,
there is no single body responsible
for policy formulation and
coordination within this vital sector.
DUBAI THINKS SMALL FOR A CHANGE
Officials last month launched the
Dubai SME 100, a ranking of the top
fastest-growing small businesses in
the emirate.
Fundamentally, it offers companies
a benchmark against which they
can compare and compete. But the
rankings are also a neat tool to steer the
conversation in a new direction.
Sheikh Ahmed Bin Saeed Al Maktoum,
chairman of the Dubai Economic Sector
Committee, said the initiative aimed
to recognise and celebrate the SMEs
that had made a difference to Dubai’s
economic landscape.
He added that the creation of a stock
market for SMEs was the next step in
the development of the sector, although
36 gulfbusiness April 2011
The launch of an SME authority
will be the most effective means to
enhance the contribution of SMEs to
Saudi Arabia’s economy.”
Worryingly, statistics indicate that
Saudi’s SME sector yields limited
impact on the Kingdom’s overall
economy. Despite their vast numbers,
and the availability of numerous SME
support programmes and initiatives,
Despite vast numbers of SME support
programmes, small business contributes
only 25 per cent to KSA employment.
small business contributes only 25
per cent to total employment and
only 33 per cent to the GDP. This
places the sector at odds with the
majority of advanced economies.
For example, in Spain SMEs
contribute to 64.3 per cent of GDP and
in Austria they contribute 44 per cent.
Given the size and growth of Saudi
Arabia’s economy and the nation’s
focus on economic diversification,
SMEs should contribute to more than
50 per cent of the country’s GDP,
for the time being it was only at “the
idea stage”.
Although little is known at this
stage about the criteria for making the
ranking, Sheikh Ahmed said SMEs are
judged based on their performance
across a set of financial and non-
financial parameters.
Independent entities falling under the
official definition of Dubai SMEs and
registered in the emirate can apply for
the ranking system provided they
have at least three years audited
financial statements.
The non-financial metrics include
innovation, international orientation,
human capital development and
corporate excellence.
according to Siddiqui.
Analysts agree that in general
SMEs are the seat of the most
innovation and creative ideas as far
as businesses go in an economy.
Burchell adds that in hubs like the
UAE, this is also the case: “There’s
what we call the adoption curve,
which means about two per cent of all
businesses are innovators. Whereas
the larger companies have their eye on
calculated business risks in line with
maintaining their size in the market,
SMEs are like mini learning labs or
incubators of good ideas.”
So, in the UAE where will that
entrepreneurial spark come from
in future?
Burchell said for now it will be the
foreign workers mainly, but in the
coming decades it has to emanate
from Emirati talent. “We all know
that a huge majority of the UAE’s
workforce is made up of expats. I
can’t imagine any other country, not
even Singapore, that has undergone
such a transformation in this regard.
“Therefore in future, innovation
and entrepreneurial spirit will likely
grow from external investment
and creativity. The whole process
for Emiratisation is a step in the
right direction to help Emiratis
take their natural right to lead
their country. But, in the long-term
there will be a lot more SMEs and
entrepreneurial drive coming from
nationals. And it has to be that way
for sustainability.”
If Gulf governments can identity
the catalysts for SME success, then
they will have laid the groundwork
for robust growth. Indeed, choices
that are made now could drastically
change the shape of how business is
fundamentally done in future. There
are some tough decisions ahead.
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 2011

38 gulfbusiness April 2011

CONTENTS
40/ THE DIGITAL TIPPING POINT
How far has the region progressed with its digital ambitions,
relative to the rest of the world?

49/ ONES TO WATCH

The pioneering digital companies to watch over the next year
in the UAE and the Gulf .

56/ CAN YOUR COMPANY AFFORD NOT TO BE

ON TWITTER?
Knowing how to exploit – and protect your brand online is
a must for success.

62/ GADGET GALAXY

Apple, Samsung and HP tablets are battling for domination
globally and in the region. Who will win?

66/ CONNECTING
Social networking is revolutionising consumer behaviour and
business opportunities.

April 2011 gulfbusiness 39

 2011
DIGITAL
ISSUE

The Gulf’s
DIGITAL
REVOLUTION
Driven by business, entrepreneurs,
hungry consumers and a restless youth
population, the region’s passion for
digital has accelerated past the tipping
point. Egypt recently highlighted
the internet’s breathtaking power;
its unrelenting momentum for
driving, assimilating and realising
change. The future is here.
Welcome to the other kind
of Gulf revolution, writes
LAURA COLLACOTT.
PHOTO: ISTOCK PHOTO

40 gulfbusiness April 2011


T
he figures say it all.
Today the Middle East is
standing on the cusp of
a digital revolution. The
region boasts around 65 million
internet users – fuelled by a web-
user growth rate of 1,648.2 per cent
between 2000 and 2009.
While North America already has
a penetration rate of 77.4 per cent, it
is forecast that around 60 per cent of
the region’s population will be online
by 2020, up from 19 per cent today.
That equates to 260 million users.
In Saudi Arabia alone, 9.8 million
are internet users, and 2.5 million
are hooked up to Facebook – out of a
population of 25 million.
As growth areas go, this is it. But
with this gaping opportunity come
many challenges.
“Digital marketing looks like a
dinosaur in this region,” says Bébhinn
Kelly of Hellwa Fashion, an haute-
couture blog. “It still shocks me
how far behind the vast majority
of marketing departments in this
region are. Marketers in every sector,
but particularly in retail, need to get
themselves up to speed. We only have
to look at Egypt to understand the
kind of impact bloggers and online
tools are having on the region.”
And it’s true. Ask anyone and
they’ll tell you that the Middle East
has long lagged behind the rest of the
world in online. Not for much longer.
Sim Whatley, co-founder
of online classified site
Dubizzle, is enthusiastic
about the unexploited
potential in the region:
“The Gulf region is not
Silicon Valley, but there
is a great deal of talent
and entrepreneurial
spirit here. I meet and am
encouraged often by new businesses
and websites that have local, creative
ideas. There is still plenty of room to
grow, and that is the exciting part.”
There are key areas of
growth. Social networking is
huge in the region; people
are turning to the net
for career advancement
and job searching;
mobile phone apps are
big business; auction
and classifieds sites are
gaining traction; digital
marketing is the subject on
everyone’s lips; e-commerce is
a nascent concept with stellar
growth potential.
Alexander McNabb of Spot
On PR, a veteran in the Middle
Eastern digital scene remembers
back to 1995 when internet was
first introduced to the region,
spurring debate on whether it was
good, whether it was anti-Islamic,
whether it would swamp the Gulf
with foreign content. “One journalist
thought it was a passing fad,” he
smiles, “now we’re having the same
debate regarding social media.
“Our relationship
with internet
content is deeper
than with more
passively generated
content. We choose.
It’s the hunter-
gatherer instinct.
The Tarzan effect.”
Raja Trad, CEO of
Leo Burnett, MENA
“Our relationship with internet
content is deeper than with more
passively generated content. We
choose. It’s the hunter-gatherer
instinct. The Tarzan effect.”
Ramzi Nakad, managing partner
of Brag, a live marketing agency,
is every bit as emphatic
about social networking
developments. “Social media is
no longer a nice to have within
a marketing mix but a must. Big
advertising and media buying
agencies need to realise and accept
this or risk going out of business.”
Modern marketers are under
pressure from the still relatively small
digital sphere. Firstly, they must create
dedicated web content to supplement
traditional marketing channels.
“What used to be a repurposed
print ad plastered on a website,
has become a potential source for a
campaign-wide idea,” says Raja Trad,
CEO of Leo Burnett, MENA. “There’s
still lots of room for improvement,
and the contribution of social media
to the recent political events are
teaching brands a good lesson;
digital has the power to impact your
business from the onset. It is not just
another medium.”
Alexander Rauser, CEO of UAE-
based digital agency Prototype, agrees
that the medium needs to be more
adaptive, “breaking away from the
traditional ways of communicating
information to consumers” and
become more focused on meeting
customer needs. “It’s about creating
experiences for users that are
engaging and result in referrals and
recommendations,” he says.
However, at the moment,
in this region, referrals and
recommendations are as high as
April 2011 gulfbusiness 41
 Lex Bradshaw-
Zanger, Regional
Director, Digital
Strategy &
Innovation

digital marketers need to aim.
E-commerce is relatively tiny
compared to developed regions,
in large part because of the low
penetration level of credit cards.
In a region devoted to the humble
cash and cheque book, driving sales
online is a formidable task. But one set
to change as mobile-phone payments
begin to be introduced, hop skipping
over the credit card requirement. With
practically every Middle Eastern palm
clutching a mobile device, it stands to
revolutionise online shopping here.
As marketers seek to disseminate
their messages and charm customers,
they must do so in a more targeted,
less ‘scattergun’ fashion.
“Today’s advertisers have budgets
that are under much closer scrutiny;
they need to ensure their campaigns
are hitting exactly the right
audiences every time, especially
as online consumers are ever-more
discerning about the relevance of
the advertising content presented
to them,” notes Ahmed Nassef, vice
president and managing director of
Yahoo! Middle East.
It’s a requirement well suited to
digital. “The beauty of digital is being
able to measure precisely who listens
and when they listen,” says Steve
Pulley, director of ARN Digital. This
can mean anything from ROI tracking
to syndicated country surveys and
sophisticated reports that measure the
benefits of digital marketing precisely.
There is a lot of so-called ‘clutter’
that companies should avoid. Lex
Bradshaw-Zanger recommends
avoiding simple, easily ignored
banner ads, and instead develop web
tools that either serve a purpose
(for example, GM’s in-market search
program) or adds value, utility and
fun to the online experience (Kellogg’s
banner games, for example).
In fact, he believes that gaming
is another growth area for the Gulf.
“It’s waking up in the Middle East.
Over 38 per cent of online gamers
worldwide are located in the region
and this can be an enormous
platform from which to start. Egypt
and KSA in particular have massive
populations.” Creating internet
applications that serve a function,
especially entertainment, will be key
in the future to driving traffic and
those crucial advertising clicks.
A faster growing sector online has
been that of online recruitment and
professional networking. Linkedin
has 101 million members worldwide,
of which 2.6 million are in the Middle

Internet users in 16 arab countries

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INFOGRAPHICS: TARAK PAREKH

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SOURCE: ARAB ADVISORS GROUP

42 gulfbusiness April 2011


or
w
he
a n of t an
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s e e a p
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65.4m
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East. Curiously, the site seems to
have curried more favour with male
members of the population, with 77
per cent of Middle Eastern profiles
being held by men.
“We have seen tremendous change
in the ways and speed with which job
matches are being made as enabled
by the internet,” says Lama Ataya,
chief marketing officer at Bayt.com.
“Jobseekers can reach a wider
audience of top employers and vice
versa and recruitment matches can be
made directly via the jobsite without
the need of or interference of an
intermediary. They are now able to
refer to Bayt.com salaries to compare
their salaries to their peers before
making job change decisions; they can
read the industry’s latest literature
derived from our polls and surveys.”
Not only this, the company has
also noticed a trend towards greater
employment opportunities in the
digital realm. Analysts anticipate that
digital skills will be very much in
demand in 2011 – students take note.
INFOGRAPHICS: TARAK PAREKH
Take note, too, of the demand
for Arabic language content. The
Arab Media Outlook 2009-2013
report, released by the Dubai
Press Club in conjunction with
PricewaterhouseCoopers (PwC)
ld
e
es
99.1m
350.6m
('' (,' )'' ),' *'' *,'
82.5m
number of internet
59.8m
153.3m
users by languages
points clearly to a demand for
Arabic-generated content. “There
is undoubtedly a dearth of Arabic
content,” says McNabb, pointing out
that Wikipedia is said to be opening
a regional office to encourage the
development of more content.
The report suggests that the
ever-increasing internet penetration
and use of social platforms will be
key mediums of growth. Using the
Arabic language, in business, helps
to influence the right decision-
makers in the region; socially,
it facilitates dialogue between
governments and communities.
But this same cultural advantage
can also function as a negative
factor says Omar Christidis, the
vice president of the International
Business Alliance Group and
founder of ArabNet. He says that an
inherent Arabic fear of failure, in
a business that has a fairly high
risk of failure at the outset,
and of losing face is a limiting
factor. So, too, are family ties
to business and an apparent
reluctance to break out alone.
Internet censorship is
a barrier of perception,
more than practice. Nakad
rejects suggestions that it
536.6m
+'' +,' ,'' ,,'
444.9m
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gfglcXicXe^lX^\fe
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SOURCE: MCCOLLINS MEDIA
discourages innovation by reminding
us that it fuels creativity, especially
online where political borders almost
cease to exist.
“Censorship has its own well-
intentioned purpose,” muses
Mohammed Areff, managing
director, Gulf & Pakistan at Avaya,
pragmatically. “Innovation on
the other hand allows one to
explore new ways of doing things.
As long as this is within certain
boundaries, it can flourish.”
Few see why censorship should
affect innovation. “It encourages it;
life is full of constraints, be they
about what we can do, how we can
do it, or even with whom,” says
Bradshaw-Zanger.
“Alcohol and tobacco marketing the
world over is heavily controlled but
this doesn’t stop some of the most
creative marketers from developing
one-to-one programmes that can
communicate with consumers.
“The digital landscape has
changed a great deal over the
last two years,” nods Kelly.
“The change is slow and
frustrating but we
are getting there.
Twitter used to be
blocked and flickr
April 2011 gulfbusiness 43
 Omar Christidis,
Oraganiser of
ArabNet Digital
Summit

Fixed broadband internet in Lebanon abound. Gone are the days when
you needed a fixed line at home and a computer
L8<#9X_iX`eXe[HXkXic\X[YifX[YXe[X[fgk`fe`ek_\8iXYnfic[! tied up to it. Today we have wifi and wimax and
a number of new devices to get connected.”
With the fast improvements in
)' infrastructure and the swift growth in
users, the region finds itself almost at the
(, (+%- critical mass for substantial development.
For companies, in terms of advertising and
((%-
media, “digital media is very close to tipping
(' Efk\1!K_\Ô^li\j]fik_\
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+%.
, consumption of digital picks up to an extent
*%+
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(%+ (%*
The trick will be for companies to
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Doors are already beginning to open.

SA

Christidis is enthused about the level of

was only unblocked in the UAE in
late 2010. Unblocking them was a
good move.” So censorship barriers Omar Christidis, organiser of
are arguably being eroded.
Infrastructure has, however,
undoubtedly been a barrier to
progress. Compared to other
regions of the world, bandwidth
is slow – “far below global
standards”, as Jayant Bhargava
of Booz & Company puts it – and
connections are expensive.
That is changing, not just
because the infrastructure is
being steadily upgraded, but
also with the advent of internet-
enabled smart phones and mobile
internet devices. “My grandmother
ÈGXik`Z`gXekj[\jZi`Y\[]\\c`e^Ô[^\kpXe[b\gki\XZ_`e^]fik_\`idfY`c\
FAST FACT
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is learning to use the internet
the first time on an iPad,” says
ArabNet digital summit. “There
are going to be more than 50
million new internet users in the
next few years. These people will
come through mobile devices
because they are comfortable
with them.”
Observers believe that the
region will soon be competitively
connected. “Changes are going to
happen overnight, particularly
in markets that are still heavily
controlled by monopoly operators,”
says Bradshaw-Zanger. “Rumours
of upgrade to 3G mobile broadband the public and private sectors. It is critically
innovation and entrepreneurship visible in
the current climate. For the youthful, tech-
for savvy population of the MENA region, there
is a great deal of opportunity to break – and
exploit – the digital realm.
He pinpoints the mega-deal of 2009
when Maktoob, one of the region’s most
popular portals, was purchased by
online giant Yahoo! as a pivotal moment
in the Arabian online revolution.
“The deal energised the private sector,” he
says. It certainly demonstrates to young colts
what can be achieved with some grit and
determination.
Christidis has nominated 2011 the year of
the entrepreneur and hopes through his and
other schemes to incubate more start-ups.
“Interest in entrepreneurship, the web and
start-ups has skyrocketed,” he says, “both in
important that we take this opportunity to
harness this wave of innovation and optimism,

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44 gulfbusiness April 2011

 Jfd\k`d\j
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T
he changes in the way
people are behaving have
been almost insidious. If
you weren’t actually looking for
them, you might well have missed
them. It’s not across the board,
but we have certainly passed the
‘tipping point’ – consumers have
moved online in the Middle East
and this movement has had a
fundamental impact on the way
they react to brands, companies
and governance.
Today we are looking at the
‘empowered consumer’ – a person
who can, and will, Google any
new concept, phrase, word or even
person they encounter. What they
find when they do means they have
access to more information, and
more sources of information, than
we have ever seen before. They also
have access to something more
powerful than raw information.
They have access to opinion.
Consumer opinion online is
a game changer. Before, angry
customers would wash up against
the high walls of the call centre
or the disinterested clerk sitting
behind plate glass in the bank’s
security-guarded premises.
There was little redress beyond
strongly
letter to the
newspaper
which likely
wouldn’t
be printed
– or trying
to interest a
journalist in
yet another
disaffected
customer. So many consumers
learned to accept things the way
they were. You could always vote
with your feet, unless of course
we’re talking monopoly telco and
utility markets, in which case you
just had to put up with it.
Now consumers share opinions
online with remarkable reach.
That angry customer could
have a blog with hundreds,
thousands of readers each day,
a Twitter account that reaches
thousands more (and, through
the power of the re-tweet,
massively incremental reach) and
hundreds of Facebook friends. By
sharing their disaffection, anger
and disappointment, today’s
consumers are able to cause
enormous damage to brands.
The brands that are succeeding
online today in the Middle East
are already creating valuable
relationships and ‘first mover
advantage’ that their analogue
competitors are missing out on.
Digital campaigns are hard to
do well. It’s about integrating
your website and online public
assets with social media
platforms – and accepting
that you’ve lost control. The
tide of opinion means your
communication online needs to
be a two-way street. You actually
have to talk to those upset
customers, take their opinions
on board and change the way
you do things as a result of their
feedback. Because if you don’t,
your competitor will.
A recent poll showed that 83
per cent of people in the Middle
East are influenced by friends’
recommendations when they
purchase – 70 per cent are
influenced by online reviews. Over
80 per cent of Twitter users had
a preference for brands they had
encountered on Twitter. Some 88
per cent of MENA internet users
access the medium daily – spending
more time throughout the day on
the internet than they do with
television, radio or print media.
There are more Facebook users
in the region (23.8 million) than
people who buy a newspaper. And
people spend more time updating
their social networks than they do
reading a newspaper – because
increasingly, they’re getting
their news, views and sources of
information from online sources.
Control of the marketing
megaphone has passed to the
consumer – they’re the ones with
the voice now. Screaming ‘the
customer is king’ or slogans about
how you’re ‘customer-centric’ at
consumers won’t work anymore
– you’re only as good as your last
engagement with your customers.
You actually have to make sure
you are willing to live up to
your values, meet your claims of
standards and listen to the people
you purport to serve.
Because if you don’t, they’re
going to do the worst of all things.
They’re going to talk about you. ■
April 2011 gulfbusiness 47
The digital
ONES TO WATCH
They’re powerful, they’re forward thinking and, most of all, they’re
digital. Gulf Business lists 10 companies to keep a close eye on as
they propel the region’s online industry forward.

J C Butler and Sim Whatley,

;L9@QQC< founders of Dubizzle
:cXjj`Ô\[j
Most people who have lived in the
UAE for any amount of time are
likely to have had some encounter
with Dubizzle. The classifieds
‘portal’ was one of the earliest
Dubai-centric community sites
to emerge on the scene and has
grown and developed with the city
over five years. Today, the company
has expanded its operations to
Algeria, Bahrain, Egypt, Jordan,
Saudi Arabia, Kuwait, Lebanon,
Libya, Morocco, Oman, Qatar,
Syria and Tunisia. Dubizzle is
aiming to be the number one
classifieds site in at least 80 per
cent of them within three years.
Now available in English, Arabic
and French, it provides one of the
most comprehensive, flexible and
easy-to-use services of its kind,
anywhere in the region. And it’s
expanding aggressively.

April 2011 gulfbusiness 49

 >FE89@K
\$Zfdd\iZ\
Formed only in January 2010, GoNabit is one of the
newer companies in the UAE’s digital domain but
has gone from strength to strength. Calling itself
a ‘group-buying website’, the company operates
across the MENA region in both English and Arabic.
The basic premise is to leverage the numerical
power of a loyal, broad customer base to source
heavily discounted products and services (although
Saif Al Zarouni,
a minimum number of subscribers
CEO of Yadig
is required for a deal to be ‘on’).
Users benefit from cut prices and
P8;@> businesses benefit from new
I\m`\nj&jfZ`Xce\knfib`e^ customer leads. It’s a Middle
Eastern take on a concept
Having seen the success of review sites such as popularised in the West during
TripAdvisor and Amazon, it is clear that there is latent the recession, but it’s one that’s
power in public reviews. Tapping into the seam of likely to endure long after the
popular opinion comes Yadig, part social network and crisis has faded.
part review website. It was established to share word-
of-mouth opinion on restaurants, bars, spas, hotels and Dan Stuart, CEO
salons in the online realm. Not only is the bank of opinion and co-founder
easily searchable, you can also share your experiences of GoNabit
with friends through the integrated networking tools.
Users can instantly communicate a good review to their
friends using the YaPP app on a mobile phone. With
consumer behaviour turning increasingly to reviews
pre-purchase, Yadig has significant potential to impact
corporate behaviour.

N8D;8%:FD
9lj`e\jje\knfib`e^
The internet and new technologies have created all sorts of new
possibilities for entrepreneurs in the region. Launched on the
back of the Celebration of Entrepreneurship event, Wamda.com,
the region’s start-up content and community hub, is driving
trends for both entrepreneurialism and the web with formidable
verve. This interactive resource, created by private equity firm
Abraaj Capital, facilitates a space for knowledge share and
connection, primarily for entrepreneurs as they start their
businesses and for business leaders and mentors, whose advice
can help SMEs through all the key stages of growth.

50 gulfbusiness April 2011

Manage your trade
from anywhere, anytime
ProTrade is ADCB’s new online trade finance platform, designed to enhance turnaround time and
improve productivity. Part of ADCB’s EasyTrade suite of products and services, this fast, efficient
and user-friendly finance tool will meet all your trade finance transactions requirements 24X7.

Key benefits:
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• 128 bit encryption which means all transactions are fully secure

For more information about ProTrade and how to make your trade finance transactions easier, please SMS ETRADE to 2626 or visit www.adcb.com

Terms & conditions apply.


David Ashford, general
manager, Apps Arabia
8CJ?898B8%D<
9lj`e\jje\knfib`e^
Social networking on a
corporate level is every bit as
popular and useful today as
leisure networking. And it’s
best to keep the two separate.
Alshabaka is an Arabic take
on the LinkedIn concept
with the glaring advantage
of having an Arabic (as well
as English) interface. Job
hunters and professionals
alike are beginning to log
into the region-specific site
to take advantage of a site
specialised in the local career
environment. Expect to see
it grow, especially in the
regional microclimate of a
youthful, mobile population
seeking employment.
8GGJ8I89@8
DfY`c\Xggj
Founded in June 2010 and supported by Abu Dhabi’s media
powerhouse, twofour54, Apps Arabia invests in the best apps
from the MENA region. An entrepreneur with an ingenious idea
for a mobile app can approach Apps Arabia and the firm will
seek and fund a developer to realise the idea and then share
the profits. Crucially, Apps Arabia works on an ‘Arabs for Arabs’
premise, which means the company is actively incubating local
talent – expat and national, as long as you reside on regional
soils. General manager David Ashford says that all mobile app
ideas are considered as long as they are commercially viable.
Apps Arabia has already released the multiplayer word game,
Kalimat, and has 10 more apps currently in production.
DLJ@:D8JK<I
I\m`\nj&jfZ`Xce\knfib`e^ Saeed El-Ajou,
managing director,
Music Master was established in 1982 Music Master
in Jeddah, KSA and was the first importer
of legitimate music to the Middle East.
Hooking up with Warner Music, Sony
Music, EMI and Universal Music,
it has long distributed the latest
Western music and added to
its catalogue a broad selection
of Arabic music. This year, the
company has also entered the
digital world of distribution,
acknowledging the changing
consumption habits of regional
customers. More than three million
tracks are available without
digital rights restrictions across
the GCC, Lebanon and Egypt. Fully
digitised, the firm was also the
first to incorporate an interactive
‘quick response’ bar code in its
adverts, allowing users to scan
it with their smart phones for an
opportunity to win a free download.
April 2011 gulfbusiness 53
 @J?FG8?FC@:
<$Zfdd\iZ\
E-commerce has yet to arrive in the Middle East as it has in
the West, where credit card penetration is much higher and
consumers are more comfortable with the security surrounding
online shopping. But that’s not to say that digital and retail
James Mullan,
are divorced. Though companies continue to look for ways to co-founder,
drive e-commerce in the conventional sense, smartphones have MidEast Posts
enabled apps like iShopaholic to emerge. This is a shopping
guide that includes mall directories complete with electronic
savings vouchers based on your location (through clever use
of positioning technology). In a culture so empassioned by the
shopping experience, it’s likely to be very popular.

8I89E<KJ?@=K;@>@K8CJLDD@K
<m\ekj
ArabNet is the largest conference for the regional web industry,
bringing together over 1,000 illustrious Arab web business
leaders and start-ups, including a strong presence from regional
entrepreneurs – fed by recruitment workshops held in seven
countries. The four-day conference took place in Beirut in March.
To locate digital talent for the ArabNet event, founder Omar
Christidis took a road trip in the ‘ArabNet Bus’ across the
region, fuelled by the mission of finding promising youth and
encouraging them to launch their own businesses.
Omar Christidis,
founder of Arabnet
D@;<8JKGFJKJ
:fek\ek
Blogging is not a new phenomenon, and it’s
as big in the Middle East as it has become
elsewhere in the world. ‘Citizen journalists’
risk information overload as everyone seeks
to get their voice heard. How do you track
down and absorb the information relevant
to you? The answer is blog aggregators –
common platforms that collect compelling
copy together from the most influential content
producers in a region. Modelling itself on
the US’s Huffington Post, MideastPosts.com
hopes to provide the Middle East audience
with a pertinent, local voice that sidesteps the
limitations of traditional print journalism. “The
copy they write is often far more insightful,
honest, passionate and relevant than copy you
will find in a newspaper,” says the firm’s co-
founder, James Mullan.

54 gulfbusiness April 2011

 Can your company
afford not to be on Twitter?
Knowing how to promote – and protect – your brand online is a must
for your firm’s success.
T
here might be no such thing as bad
publicity, but companies have long realised
that reputation management can make or
break. Rapidly exploiting the niche, PR
companies turned media and crisis management
into an art form, using traditional media
channels to mould and manipulate successes
and failures to a company’s advantage.
It’s one thing when you only have print
media, TV and radio to manage, but now, with
a proliferating number of online channels
too, trying to keep track of your brand – and
customers – can feel like a Herculean task.
Overwhelming consensus among those
in the know suggests that online is no
ILLUSTRATION: ISTOCK PHOTO
longer an optional extra.
“Over the past five years digital has
risen from being a ‘shiny cool thing to
do’ to an integral part of business strategy
for most consumer brands,” says Jassim Ali,
regional director of digital development for
Omnicom Media Group.
“It has redefined the entire consumer
experience cycle and made companies think
harder about ensuring the experience remains
positive, from gaining awareness through to
purchase and even advocacy. The end-to-end
measurability of the medium has given brands
the ability to test and learn as they move along.
Business will never be the same again.”
It is, after all, where customers are
increasingly found. In the USA between 2007-
2009, there was a 41 per cent increase in the
amount of user time spent on social media.
In the Middle East, one of the fastest growing
online regions in the world, similar leaps are
being reported.
“Reports such as the Arab Media Outlook have
 Husam Jandal,
senior marketing
consultant, WSI
forecasted a significant shift towards
online strategies in 2011,” says
Alexander Rauser, CEO of UAE-based
digital agency, Prototype.
“You don’t have to be a psychic
to forecast that digital will play
more and more of a role in business
strategy. Internet users in the
Middle East are very active on social
networks as it gives them a way to
communicate with each other and the
world. This is where consumers can
be found now, and brands will have
to meet them there.”
Lex Bradshaw-Zanger, regional
director of digital strategy and
innovation at Leo Burnett MENA
agrees: “Today if you are managing a
brand then you need to be managing
its reputation everywhere – this
means not only the product and
communication, but all media where
it appears and this most definitely
includes social media. If you aren’t in
control of your brand on Twitter then
the chances are that someone else is
managing it for you – and this doesn’t
always lead to positive results.” If
conversations are occurring
about a brand, the
company should make
its voice heard.
IT AIN’T
NECESSARILY
SO…
But it seems it
isn’t a ‘must’
to everyone.
Even some of
the biggest
players have
opted out,
including
global mega-
company Apple,
which has next to
no presence in social media.
“The power of Apple is the fact that
they have so many fans the world
over that social media presence is
created and maintained by this user
base who act as ambassadors for the
brand,” continues Bradshaw-Zanger,
praising the company for controlled
release of information that allows
it to manipulate social channels
without active involvement.
Social media marketing isn’t
for everyone. “It isn’t a miracle
strategy,” says Husam Jandal, senior
marketing consultant at UAE-based
internet marketing firm WSI, who
is reticent to deem social media an
absolute necessity.
“It is effective for B2C brands
depending on their product and
services, but B2B companies would
have better results from other forms
of digital marketing such as search
engine advertising, SEO, and display
advertising, to name just a few.”
Nate Elliot, principal analyst at
research firm Forrester, points out
that, for all the hype, social media
forms a relatively small cut of the
digital marketing landscape; the
bread and butter forms of online
marketing remain SEO (Search Engine
Optimisation), email and online
display. He claims that to focus on
this smaller segment of online at the
expense of the basics is “madness”.
His advice to organisations is to have
a presence in this sphere but focus
efforts on streamlining efficiency in
‘old school’ digital methods.
But to a greater or lesser extent, an
online presence – and a social media
presence – is a business advantage. Ali
draws a parallel: “Think of it as a cool
party to which you’ve been invited but
you’re glued to the wall, not daring to
make the move and join the others and
have a good time. The brands that
will succeed in the future are the
ones that evolve in that social space.
Consumers feel validated and treated
seriously by brands that engage with
them, the rest will eventually fade in
the background.”
Seemingly aware of this dynamic,
companies are steadily increasing
investment in understanding
their customers’ online behaviour
and tailoring their presence and
campaigns accordingly. In the early
days of marketing communications,
businesses strove to develop reach –
quantity of a defined target audience
– and awareness – consumer
knowledge of branding and messages
– through a variety of ‘push’
marketing strategies. Today that
is transforming progressively into
‘pull’ mechanisms where consumers
choose which brands they interact
with and elect to participate in
conversations with them.
Research is necessary in
such a nebulous, fast-changing
environment. The challenge for
marketers is understanding the
modern audience: the uptake of
online media is strongest in the
youthful population, a demographic
burgeoning in the Middle East.
“Marketers are
‘Generation Xers’,
while their younger
consumers are so
called Millennials
(those born in the
1980s); there is a
huge gap between
the two.”
April 2011 gulfbusiness 57
 “There is a huge generational
dissonance between marketers and
their younger consumers,” says
Ramzi Nakad, managing partner
of BRAG, a live marketing agency.
“Marketers are ‘Generation Xers’,
while their younger consumers are so
called Millennials (those born in the
1980s); there is a huge gap between
the two. Millenials have grown up
linked by BlackBerries, Androids,
iPhones, computers, iPods, and video
games. This is the generation
of Wii, Facebook, Twitter,
free downloads, access to
just about everything.”
The question for
businesses then, having
made the decision, is how
to develop an effective
social media strategy. The
medium does not have just
one business function and it can
be unclear who should manage an
online presence. It can be utilised for
research and product development
by seeking consumer opinions, needs
and attitudes; for driving marketing
messages about new products
and promotions; and for customer
service, dealing with complaints
transparently to boost credibility.
Online networking can serve as an
internal tool too. Many companies
may choose to prevent access to
social sites in the office, concerned
of the amount of time squandered by
employees during the working day.
But there are roles for social media
internally. “An often overlooked
aspect is its role in intra-company
communication and knowledge
sharing,” says Ali. “Service-led
categories, such as aviation, travel
and telecom, have a massive amount
of information potentially worth
millions of dollars but that is locked
in with a few employees. Unlocking
synergies and sharing ideas through
social networking will enhance
companies’ success.”
The trick lies in identifying the
role you want your online presence to
play and building intra-departmental
collaboration to support it. And once
a role is defined, organisations must
build an appropriate brand voice
that will appeal to their customers,
an area that in itself can be fraught
with difficulties.
Surveys have shown that
the tone and messages used in
communications must be carefully
pitched so as to keep consumers
involved. Spot On PR is one of the
few companies conducting surveys

A regional comparison D8B<PFLIJ<C=

of cellular penetration LJ<=LC

?fnZXepfl`eZfigfiXk\
:FLEKIP G<E<KI8K@FE
jfZ`Xcd\[`Xjfk_Xk`k
Zfdgc\d\ekjpfliYlj`e\jj
UAE 205.5%
fg\iXk`fej6CffbXkk_\
SAUDI ARABIA 178.2%
\oXdgc\f]@9D]fi`ejg`iXk`fe%
QATAR 151.5%
K_\Zfdglk`e^^`XekjXm\j
OMAN 132.9%
(''d`cc`feXeelXccpk_ifl^_
BAHRAIN 128.1%
Zljkfd\ijlj`e^`kjfec`e\
KUWAIT 114.1%
Ê[\m\cfg\iNfibjËi\jfliZ\
JORDAN 101.4%
`ejk\X[f]ZfekXZk`e^jlggfik%
TUNISIA 93.5%
K_\gif^iXdd\_XjXYXj\
ALGERIA 92.3%
f]i\jfliZ\jgfglcXk\[Yp
MOROCCO 80.3%
@9Dk_Xk`j\e_XeZ\[Yp
EGYPT 79.5%
d`e^c`e^ZfigfiXk\Zfek\ek#
MAURITANIA 67.1%
lj\i$^\e\iXk\[Zfek\ekXe[
LEBANON 59.8%
]fildj%K_\Xejn\ij]fle[
PALESTINE 53.2%
INFOGRAPHICS: TARAK PAREKH

n`k_`edfi\k_Xe*'#'''
SYRIA 48.2%
Xik`Zc\jjXm\jk_\ZfdgXep
YEMEN 35.9%
k_fljXe[jf]Ylj`e\jj_flij%
8jXi\Xjfe]fiYlj`e\jj\j
kfZfej`[\ik_\`ifne[`^`kXc
d\[`Xd`o#`kËjZfdg\cc`e^%
SOURCE: ARAB ADVISOR GROUP

58 gulfbusiness April 2011

 Strategy games
N?8KJ?FLC;D@;;C<<8JK<IE:FDG8E@<J9<;F@E>FEC@E<6

@em\jk`efgk`d`j`e^ @ek\^iXk\pfli Lj\k_\Zfddle`kp Gifm`[\i\XcmXcl\ 9\n`cc`e^kf =`e[kfg`Zjk_Xkfk_\i

kiX[`k`feXcfec`e\ jfZ`Xcd\[`X\]]fikj kfjgi\X[jlZZ\jj kfpfliZljkfd\ij% \og\i`d\ekÇk_\ dXib\k\ij_Xm\eËk
d\k_f[jjfk_Xkpfl n`k_kiX[`k`feXc Xe[jg\\[X[fgk`fe% ;feËk]fZlj i\XcjlZZ\jjjkfi`\j Xci\X[pglijl\[%@k`j
jg\e[`ek\cc`^\ekcp% dXib\k`e^d\k_f[j% Lj\jfZ`Xcd\[`X \oZclj`m\cpfepfli Zfd\]ifdkXb`e^X efZf`eZ`[\eZ\k_Xk
IXk`feXc`j\pfli D\jjX^`e^j_flc[ kfYl`c[XnXi\e\jj# gif[lZkj2gifm`[\ Z_XeZ\% dXepZcXjj`ZjfZ`Xc
J<F#j\^d\ekpfli Y\Zfej`jk\ekXZifjj ^\e\iXk\c\X[jXe[ X[[\[mXcl\Xe[ d\[`XZXj\jkl[`\j
\dX`cc`jkjXe[ XccgcXk]fidj%Lj\ kf_\cgZljkfd\ij [`Xcf^l\% `emfcm\dXib\k\ij
[\m\cfgkXi^\k\[ g_pj`ZXc\m\ekj# `dgc\d\ekpfli cXleZ_`e^`ekfÊfg\e
d\jjX^\j%E\m\i pflin\Yj`k\Xe[ gif[lZk% jgXZ\jË%E`b\Ëj]Xdflj
ilek_\i`jbf] fk_\iZfccXk\iXckf E`b\"Zfddle`kpnXj
jgXdd`e^pfli [i`m\XnXi\e\jjf] fe\f]k_\Ôijkkffcj
Zljkfd\ij% pflijfZ`Xcd\[`X# k_Xkc\klj\ijj_Xi\
Xe[m`Z\m\ijX% ilee`e^iflk\jXe[
kiX`e`e^i\jlckj%

into online behaviour in the Middle and don’t talk about yourself... build
East. In its latest Twitter survey, a relationship with me and provide
conducted last year, users criticised me with value, no strings attached,”
brands that spam other users, said one respondent. “Transparency,
broadcast impersonal genuineness and respect for the
‘corporate’ messages customer are more important than the
and fail to listen to
their customers. “Don’t
sell me anything
“Brands are now
more aware of the
benefits of online marketing.
However, online advertising
spend is still on the low side
compared to other parts of the
world. As per the Arab Media
Outlook we should see a four
per cent of total ad spend
going to onlines by 2013 which
is estimated at around $250
million in value.”
Alexander Rauser – Prototype CEO
media of communication. If you don’t
get these (things) right, no amount of
old or new media flogging will fix your
image,” commented another.
Companies are getting it right
and companies are getting it wrong
as they feel their way into a new
field. Electronics retailer Bing Lee
was recently criticised by experts
for its Facebook campaign for the
Queensland flood appeal, pledging
to donate $1 for every user that
became a fan. To many, it was
in poor taste but companies
internationally, in the Gulf as
much as anywhere else, are on
a social media learning curve –
mistakes are inevitable.
“Yes, operating in the open is a
radical change for companies and
mistakes have been and will be
made,” Ali concedes. “That doesn’t
make it right to ignore the trend and
keep your head in the sand.” ■

60 gulfbusiness April 2011

 Annual Investment Meeting
Dubai International Convention and Exhibition Centre
May 10-12, 2011
Strategic Partner

“Planning, Assessing t
The Features
AIM Conference t
The Participants
Heads of States
t t
and Investing in
AIM Country Presentations Ministers
t AIM Investors’ Club t Government Officials
t AIM Ministerial Roundtables t Mayors

Emerging Countries & t

t
AIM Exhibition
(UNCTAD) Green Investment
t
t
IPA Directors
Corporate C-Levels
t Institutional Investors
High Growth Regions” t
The Focus
Investment
t
t
Corporate Investors
Private Investors
t FDI
t Cross Industries Project Promoters
t International Trade
t Economics Governance
Media Partner t ROI
t BRIC
t Gulf
t Africa
t Asia & Pacific
t Americas
t Europe
t Australia

Tel: +971 4 282 9299 | Fax: +971 4 282 8767 | Email: info@aim2011.com | Website: www.aim2011.com
 GADGET GALAXY
Apple, Samsung and HP tablets are
battling for domination globally and in the
region. Gulf Business analyses the regional
appetite for on-the-move devices and how
continued uptake could change the way we
shop, work and play.
T
he Middle East may have caught
the slow train to digital, but it’s
catching up rapidly. Especially
when it comes to footloose
internet technology. “There are 250-
300 million mobile phones in the Arab
world. Fifty to 60 per cent of them are
internet ready, even if their owners
aren’t necessarily using them for
browsing,” says Raghu Venkataraman,
head of Anayou, a social platform for
Arabia. “Use is growing dramatically.”
ILLUSTRATION: ISTOCK PHOTO
According to data from Informa
Intelligence Centre, smartphone
penetration in the Middle East is
set to reach 28.8 per cent by 2015,
against a current figure of 13.8 per
62 gulfbusiness April 2011
cent. In a recent MENA-wide survey
by Spot On PR, 45 per cent of those
questioned used their mobile phones
to access the internet, with 71 per
cent citing email as their biggest
mobile activity (trailed by social
networking and news & weather).
“The mobile platform is highly
visible in the Middle East with a high
turnover on the release of the latest
models,” says Santino Saguto, partner
at Value Partners Dubai, noting that
consumers in the 15-35 year age group
active on multiple media platforms are
the key drivers of growth.
The same goes for tablet PCs, the
other hottest product on the market.
The same Spot On PR survey revealed
that 57 per cent of MENA internet
users plan to buy a tablet device.
Currently, the market for tablets
is large and scarcely penetrated.
The iPad is expected to remain the
dominant product representing the
majority (35-40 million) of the 55
million tablets that will be shipped
globally this year, according to
analysts at Gartner Inc.
According to Business Monitor
International, an increasing demand
for next-generation technologies
and growing competition among
manufacturers has given rise to a
fast-growing, dynamic consumer

electronics market in the Gulf.
The publication estimates that the
UAE market alone will increase
by $2.8 billion this year. Tech-
savvy customers are looking for
products with better connectivity,
performance, speed and convenience.
However, not everyone is as bullish
on the Gulf’s gadget market. The
Consumer Electronics Association
(CEA) predicts that consumer gadget
sales will grow just four per cent in
the Middle East this year, compared
to 23 per cent in Western Europe and
15 per cent in North America and
China: A limp projection in a region
with such growth potential.
A rise in the popularity of mobile
connectivity will have an impact on
content development. Venkataraman
reveals that in countries like the UAE
and Saudi Arabia, eight to 10 per cent
of internet traffic already comes from
mobiles, adding weight to arguments
that companies need to sharpen
their online and mobile content
advertising strategies.
He isn’t the only observer to have
noticed a shift in consumption
habits. “Eighty-nine per cent of
people with mobile connectivity
now consume news online,” says
Jayant Bhargava, a Principle at
Booz&company. “Mobile devices will
be a game changer. The penetration
of mobiles in Saudi Arabia is at the
same level as the USA, although the
penetration of fixed line is much
lower. In the Middle East, many
people’s first experience of the
internet has been on their phone.”
It’s a nascent area. “People are
gadget hungry,” says Paul Allen of
DLA Piper, “but more needs to be
done to turn them into fully-fledged
‘netizens’,” a buzzword used to
describe those who are actively
Omar Christidis,
Oraganiser of
ArabNet Digital
Summit
“Developers in the region are rumoured to be in
such high demand (and short supply) that they can
flip jobs several times in a week, doubling their
salary each time. ”
involved in online communities. is already an increased interest
That means creating interesting and in digital ad spending. Christidis
useful sites to entice them. reports an estimated 20 per cent
Logically, digital media – and the increase in digital spend in the
way that companies utilise it – must region this year, a figure that equates
evolve. Saguto believes that the up to $130 million.
increasing penetration of mobile It isn’t simply localised content.
internet devices will stimulate the The future lies in the growing
growth of the digital media industry. convenience of mobile phone devices
And for all the traditional players’ and the services that they offer. No
efforts, the opportunities found in longer is your phone simply a gadget
new media forms require a different
set of skills. Enter the next generation
and the conspicuous opportunity for
local content developers. “Different
@G8;MJ%>8C8OP
sites do things differently,” says
Venkataraman. “The Arab world
doesn’t have such a choice. The
opportunity is to create that choice.”
IT boffins are already moving
in to fill the gap. Omar Christidis,
organiser of ArabNet, a conference
for the Arab web industry, cites 8ggc\`jZ\ikX`ecpXkiX`cYcXq\i`ek_\
a voracious local app market. k\Z_efcf^pi\Xcd#ÔijkkfcXleZ_X_fjk
f]i\mfclk`feXipZlckgif[lZkj%9lkk_\
Developers in the region are
ZfdgXep`jefkXcck_`e^jkfXccd\e2
rumoured to be in such high demand
`k_XjjnX^^\i`e^Zfdg\k`kfij%8kk_\
(and short supply) that they can
dfd\ekknfb\pgif[lZkjXi\YXkkc`e^
flip jobs several times in a week, ]fijlgi\dXZpÇk_\`GX[Xe[JXdjle^Ëj
doubling their salary each time. >XcXopkXYc\k%K_\Z_f`Z\cXi^\cpYf`cj
Media executives have also [fnekfn_`Z_]\Xkli\jZljkfd\ij
suggested that there would be an gi`fi`k`j\%K_\>XcXop`jXjdXcc\i#c`^_k\i
appetite for Arab publications [\m`Z\YlkZfdgifd`j\jfem`jlXchlXc`kp
designed specifically for tablet Xe[XjdXcc\ib\pYfXi[%8ggc\_XjdX[\
devices, like Murdoch’s recently k_\`GX[)**g\iZ\ekk_`ee\iXe[lg
launched e-paper The Daily. How kf(,g\iZ\ekc`^_k\i#XcjfgXkZ_`e^k_\
^cXi`e^ZXd\iXfd`jj`fe]ifdk_\Ôijk
true this is in a region that is usually
`eZXieXk`fe%?fn\m\i8ggc\_XjXe
slow on the online uptake remains to
\efidfljc`YiXipf]Xggjn_`c\8e[if`[
be seen, although the signs point to
Xggj_Xm\p\kkfZXkZ_lgÇk_fl^_k_\
a critical mass of vital ingredients iXZ\`jfe%
– tablets and advertisers. There
April 2011 gulfbusiness 63
 JXdjle^Xe[>ff^c\_Xm\af`ekcpXeefleZ\[k_\Ôijk8e[if`[)%*>`e^\iYi\X[\dgfn\i\[
dfY`c\g_fe\`ek_\>lc]%K_\E\oljJ]\Xkli\jX+$`eZ_kflZ_jZi\\e#]ifekXe[i\Xi]XZ`e^
ZXd\iXXe[(>?qXggc`ZXk`fegifZ\jjfi%E\Xi=`\c[:fddle`ZXk`feE=: k\Z_efcf^p
Xccfnjlj\ijkfi\X[`e]fidXk`fe]ifd\m\ip[XpfYa\ZkjjlZ_Xjjk`Zb\ijXe[gfjk\ij
k_Xk_Xm\Y\\e\dY\[[\[n`k_E=:Z_`gj#X]\Xkli\j_Xi\[n`k_k_\`G_fe\`edXb`e^
`k\Xj`\i]fiZfejld\ijkfdXb\kiXejXZk`fej#\oZ_Xe^\[`^`kXcZfek\ekXe[Zfee\Zk
\c\Zkife`Z[\m`Z\j%8e[if`[)%*#>`e^\iYi\X[]\Xkli\j`ek\ie\kZXcc`e^#gfikXYc\N`=`
_fkjgfk#Xe[kil\dlck`kXjb`e^%N`k_k_\D`[[c\<Xjk\ieXgg\k`k\]fi^X[^\kj#\og\Zk
kfj\\dfi\i\c\Xj\j`ek_\efk$kff$[`jkXek]lkli\%

for making calls and sending texts;
it functions as your alarm clock,
camera, internet browser, air ticket
and, soon, your credit card.
“The introduction of mobile money
will get more people online,” says
Allen. “This year a major mobile
manufacturer has said that they’re
going to embed NFC (Near Field
Communication) technology, allowing
you to use your mobile phone as an
electronic wallet.”
The Gulf has been traditionally
reluctant to take up credit cards;
persuading consumers to adopt
a mobile purse will be a big
undertaking. But if successful, it
could be revolutionary. “With the high
adoption of mobile services, operators
see mobile payment services as a
cost-effective means to generate
revenue streams,” adds Saguto.
But where many commentators are
excited and focused on the potential
of mobile and digital marketing,
By which he means traditional forms
of e-marketing, such as email, SEO
and text messages, maintaining that **%*
these are the most relevant and wide-
reaching marketing channels in the
current climate.
“People keep asking ‘When is the
year of mobiles? Is it here yet?’”
he explains. “Those who are using
mobile internet have been completely
revolutionised, but it requires a
*'%+
tipping point. Currently you’ll still be 
only reaching a maximum of 25 per
cent of your consumers, even in the
most developed markets.” ■
Top 5 mobile phones
manufacturer
9P)'('>cfYXcJXc\j )'%-
Le`kJ_`gd\ekjd`cc`fej
DXib\kJ_Xi\
SOURCE: STRATEGY ANALYTICS (FEBRUARY 2011)

others are more conservative in

their predictions for the near future.
/%-
“You have to be there, mobile ready *%,
and consider your outbound mobile +.%, *%-
d
marketing for the future,” says Nate +/%,
<

d
GC

((-%.
8G

Elliot, Principal Analyst at Forrester

D

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Research Inc; “but to do so at the )/'

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expense of the basics is madness.” +(*%
E>

/d
JL

+,*
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64 gulfbusiness April 2011

B@
EF
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 connecting
Facebook and local digital networking sites offer huge
potential for engaging hearts, minds and wallets,
writes LAURA COLLACOTT.
T
hat the Egyptian government
closed down internet and
phone networks during the
recent uprising is perhaps the most
telling sign of the influence the
social media medium has garnered
in recent years. Today, there are
about 200 million accounts on
Twitter, a small but growing
proportion of them in the Middle
East, and more than 15 million
Facebook users in the MENA region
(according to the latest official
figures from May 2010).
The surge of popularity
in social networks isn’t just
affecting the way we interact
with friends, family, colleagues
and politicians; it’s affecting how
we shop too. No longer bound
to rely on company-provided
information and printed reviews,
customers use social networking
to access an enormous vault of
user and professionally generated
information about products and
services before they buy. And
the audience accessing these
resources in the Middle East is
growing apace.
“Look at Facebook,” says Jassim
66 gulfbusiness April 2011
Ali, regional director of digital
development for Omnicom Media
Group, emphasising the relevance
of social media channels in
the Gulf. “Its fastest growing
audience demographic is people
in emerging economies. Twitter is
about to localise its interface for
the Arab world. It’s no surprise
considering the role social
media platforms are playing in
channelling the aspirations of the
region’s populations.”
“The major markets of the Middle
East like UAE, Kuwait, KSA, etc.
are the fastest growing markets
across the world,” elaborates
Dilip Kumar Paliyath, co-founder
& CEO, YoSpace International, a
mobile applications developer.
“A couple of years back, just
like in other countries, social
networking websites in Middle
Eastern countries just appeared
as a platform for entertainment
and socialising. Today these social
mediums have a important role of
promoting business among these
countries where we have seen a
remarkable swift upward trend in
its social media.”
WORD OF MOUTH
Husam Jandal, senior marketing
consultant at WSI, a company
that provides digital marketing
solutions, believes that it has
put the power in the hands of
the people, not just on a political
level, but also on a consumption
level. “Social media marketing
and networking has given the
upper hand to the consumers, it’s
all about word of mouth and the
consumer, not the brand.”
Companies can no longer rely
solely on one-way broadcast
branding to market their products
– they have to interact with their
evermore-feisty, rights-aware
customers.
“Customers are more
demanding today,” agrees
Paliyath. “They are
aware of global
standards and
expectation
is growing
accordingly.”
This means
changing times
for marketers,
who have
to ensure they’re at the front end of
digital developments. “Consumers
today are spoilt for choice and have
limited attention. You need to be
just as savvy as them if you want to
market your brand to them,” Jandal
says. “It’s about reaching out to and
connecting with them instead of just
feeding them slogans.”
The marketers fluff it up, advising
companies to build an ‘actively
engaged community around its
key brand messages’ in the social
networking sphere. In real terms,
this means engaging customers
in transparent, honest dialogue
to provide customer service and
accessibility. Smart corporates
are even using customer forums
to tap into their most avid fans
to help in developing the next
generation of products.
HONEST COMMUNICATION
To take the shopping process
chronologically, consumers use
social networks to research products
prior to purchase. Where formerly
potential customers might have
asked friends, family and, notably, a
company’s (primed and commission-
based) salesman for product advice
before making a purchase, today, they
ask the online community.
“Fifteen years ago if you had a
question about which camera
you should buy, you would
go down to the store and
ask the person selling
the camera,” says Sim
Whatley, co-founder of
Dubizzle. “Nowadays,
you either consult the 9.3
million pages on Google
when you search for
‘digital camera reviews’ or
you ask your 400 Facebook
Sim Whatley, co-founder of Dubizzle
says Ali. “Today they can figure
N?8K@JJF:@8C out the most suitable products for
themselves without intermediaries
D<;@86 such as trade media, sales people and
JfZ`Xcd\[`X`jk_\gifZ\jjf] catalogues. They inform each other
^X`e`e^[`^`kXckiX]ÔZXe[Xkk\ek`fe
and even buy together to harness the
k_ifl^_jfZ`Xcd\[`Xj`k\j%JlZ_
full scale of their combined power.”
j`k\jXi\k_fj\k_Xkgifm`[\efm\c
jfZ`XcXZk`fej#jlZ_Xjk_\j_Xi`e^ The people really have the power.
f]j_fikd\jjX^\jd`ZifYcf^^`e^ # Nor is it just user reviews. Social
Ycf^^`e^#jfZ`Xce\knfib`e^ media channels are also being used
j_Xi`e^lg[Xk\j#g_fkfj#\m\ekj to open up transparent customer
Xe[`em`kXk`fej #]fildj#fec`e\ service channels in which customers
Zfddle`k`\jXe[gif]\jj`feXc can speak directly to the company,
`ek\iXZk`fe%@k`jXj\kf]fec`e\kffcj seeking assistance, advice and
k_XkXccfng\fgc\kfZfccXYfiXk\# feedback. It’s been touted as the
Zfee\ZkXe[j_Xi\fec`e\% next big CRM (customer relationship
management) tool.
N?P@J@KJL:? NOWHERE TO HIDE
8?FKKFG@:6 For companies, it means fewer
9\ZXlj\f]k_\j_\\ieldY\ij places to hide. Is that a good thing,
`emfcm\[`ek_\fec`e\d`^iXk`fe effectively harnessing public opinion
@k\oZ`k\jdXib\k\ijY\ZXlj\ to separate the wheat from the chaff?
e\n[`^`kXcd\k_f[ji\gi\j\ek Whatley advises caution: in the
XgXiX[`^dj_`]k]ifdgXjj`m\ relative anonymity of the internet,
XYjfigk`fef]dXib\k`e^d\jjX^\j perceived ‘friends’ and anonymous
kfXZk`m\\e^X^\d\ekf]Zfejld\ij%
<jkXYc`j_\[fi^Xe`jXk`fejXi\
[Xlek\[Ypk_\[\gk_f]k_\Ô\c[
Xe[leZ\ikX`eilc\jf]\e^X^\d\ek%
E\nZfdgXe`\jXi\\e\i^`j\[Yp
k_\gfk\ek`Xc]fi[\m\cfg`e^X
n_fc\e\nnXpf][f`e^Ylj`e\jj%
friends. Social shopping
now affects more and more
purchases simply because
you have access to your
networks more readily.
“The socialisation of
the web, which describes
the addition of features such
as comment, blog, community,
forum, reviews, etc, has created
ISTOCK PHOTO
massive expectations in terms of
transparency and democratisation
of information amongst consumers,”

D<E8ËJ
KFG=@M<
=8:<9FFB
:FDDLE@K@<J
SOURCE: SPOT ON PUBLIC RELATIONS
reviewers can as easily be a company
marketer pushing their product as
a genuine fellow shopper. Not to
mention the obvious disparities that
arise simply as a result of subjective
differences of opinion. Caveat
emptor, as the Romans had it.
“We are seeing the changes in
consumer behaviour everyday,” says
Lex Bradshaw-Zanger, Regional
Director, Digital Strategy and
Innovation at Leo Burnett MENA,
downplaying the novelty of the
latest marketing phenomenon.
“The power of connecting people
is changing the way that we interact
and also make decisions. Not only
this but it is also changing the
impact that media and advertising
can have on forming opinions. Ten
years ago you had to believe the
ads or try it yourself; today you can
connect with a tried and true review
before buying anything.”
Ali echoes this. “Beyond brand
communications, corporations have
had to become increasingly open
and transparent to their customers
and other key stakeholders. It has
opened up an unprecedented flow of
information which can potentially
lead to better, faster and more
consumer-centred decision-making
within companies.”
However it will be some time
68 gulfbusiness April 2011
EGYPT
SAUDI
:FLEKIP
EGYPT
D<D9<IJ
5 MILLION Morocco ARABIA
MOROCCO 2.7 MILLION
SAUDI ARABIA 3 MILLION TUNISIA
UAE
INFOGRAPHICS: TARAK PAREKH
TUNISIA 2 MILLION
UAE 1.8 MILLION
before traditional beginning to invest in some form of
media channels social media presence to promote
lose their majority their products and services. “The
influence and social thought, effort and investment that
media can be wholly goes into that activity varies from
harnessed for brand company to company, but the trend
building and marketing. is undeniable,” he says.
Bradshaw-Zanger believes it “will
probably have to go on for a while LOCAL RELEVANCE
before consumers move over to Catering to business and consumer
prioritising corporate messages demand in the region, the major
– and let a brand build ‘equity’ – global players are tailoring their
through social networking.” products to the Middle East
Regardless, the population is audience, with Arabic interfaces
migrating to social media; businesses and specific content. “The social
must be there to meet them. media majors, such as Facebook,
And they are. Ali Sinaei, head of Twitter, Zynga, YouTube, Quora and
online advertising at Bayt.com, sees Foursquare among others, all started
encouraging signs that most mid small, catering to a niche or select
to large sized corporations, both demographic,” explains Ali.
globally as well as regionally, are “They eventually gained a solid
“Beyond brand communications,
corporations have had to become
increasingly open and transparent to their
customers and other key stakeholders. It
has opened up an unprecedented flow of
information which can potentially lead to
better, faster and more consumer-centred
decision-making within companies.”
 Ali Sinaei,
head of
online
advertising
at Bayt.com

understanding of their user base and
adapted and tweaked their product
to appeal to a wider group. This also
means that they will go after not
only the global hip crowd, but also
internet users in faraway countries.”
Although the international players
are the most common entry points for
corporate social networking, Sinaei
notes that “some more specialised
methods are beginning to creep
in.” Specialised and, to an extent,
localised. Consensus amongst
commentators suggests that there is
space in the field for localised players.
Especially in a region like the Middle
East, where Arabic content could and
should dominate, and where cultural
sensitivities are more heightened.
“The local players are competitive
and smart,” says Ali. “Anayou,
Watwet, Jeeran and Ikbis, for
example, are promising examples
with exciting prospects in the region.
They appeal to the burgeoning
population of young, educated and
increasingly outward-looking Arabs.”
The key differentiator, aside from
language – and what is likely to be
the deciding factor in success or
failure – lies in providing a uniquely
regional answer to Middle Eastern
needs, without simply mimicking
international sites. And local players
are at an advantage in that they
boast proximity to the markets and
fundamental cultural understanding.
There are substantial untapped
opportunities in the region for
online entrepreneurs to exploit,
even if challenges exist in the form
of resources, infrastructure and
breaking the robust relationships
that exist in global advertising.
Regional companies are likely to
use a combination of international
and local sites to develop eminently
appropriate channels to market their
products, standing, for now, alongside
traditional media marketing methods.
As Ali concludes: “The success of
local players in China, Asia and
France all show that if wielded
effectively this could be a powerful
trump card to build a sizeable user
base and holding their ground against
international giants.” ■

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FEATURES PROFILE

The game changer

In a rare and exclusive interview, Abdulkareem Abu Alnasr, CEO of
Saudi Arabia’s largest bank, NCB, and regarded as one of the world’s
top 50 bankers, opens up to RYAN HARRISON about his hopes
for the Kingdom’s economy and why name lending is the region’s
biggest fallacy.

If the post-crisis performance of the National Commercial Bank (NCB) is any kind of
barometer for the Saudi Arabian economy at large, then there’s plenty of reason for the
Gulf’s wealthiest country to be upbeat.
NCB, known in Arabic as Al Ahli, leapt out of the global recession and returned to
growth as its competitors battled shrinking profit margins, liquidity levels and market
share. The bank’s profit has doubled since 2008 (from SAR2.03 billion to SAR4.7 billion)
and its Q4 2010 net income jumped 63 per cent to SAR1.3 billion ($334.9 million) from
the year-earlier period.
With assets worth SAR282.4 billion ($75.3 billion), NCB is the biggest financial institution
in Saudi and the second biggest in the Middle East, behind Emirates NBD. Last year, NCB
trounced its Dubai-based rival, posting $623 million more in profits.
In control of this raging bull is Abdulkareem Abu Alnasr, NCB’s CEO, a veteran business
leader in the region and a man known for his risk
management, prudence and determination. Having
held the CEO post since January 2006, Alnasr was
applauded for cautiously guiding the banking
group through the worst recession in memory, and
successfully re-emerging bigger and stronger.
He’s been hailed as one of the 50 most influential
bankers worldwide and in January was named
Saudi Arabia’s banker of the year.
Abdulkareem Abu Alnasr
successfully navigated NCB THE NAME-LENDING FALLACY
through the recession and
was named Saudi’s banker Within banking circles, Alnasr is known for his
of the year in January. straight-talking on hot button issues in the Gulf.

70 gulfbusiness April 2011

April 2011 gulfbusiness 71
FEATURES PROFILE
None more so than the Algosaibi-
Saad scandal, which threatened to
derail a swift economic recovery for
Saudi and the region.
“It turned out to be one of the
lessons we’ve learned from the
crisis; a clear need for tighter
credit standards and disclosure
requirements,” he says. “Saudi banks
have learned from this very well
and globally financial institutions
re-measured their risks. The level
of comfort to underwrite credit has
been significantly changed.”
The dispute between Algosaibi
and the founder of Saad Group,
Maan al-Sanea, marked the largest
default in the Kingdom to come out
of the financial crisis. Units of the
two family groups borrowed at least
$15.7 billion from more than 80
regional and international banks.
Ahmad Hamad Algosaibi &
Brothers Co. may owe NCB SAR1.5
billion, according to filings by the
lender to Saudi’s Committee for the
Settlement of Banking Disputes.
But reports that the scandal came
about partly because of the risks
associated with so-called ‘name-
lending’, especially among local Saudi
institutions, is nonsense, said Alnasr.
“I disagree with the concept of
name-lending, and that it’s suddenly
stopped in light of Algosaibi
and Saad. The Saudi economy is
dominated by family businesses,
and it’s the same across the Gulf and
many emerging markets. If a bank
does business with a family business
it’s not name-lending. The notion
that banks were writing cheques just
because of the name is not true.
“In the years leading up to the
financial crisis there was a flood of
international entrants into Saudi
and the Gulf generally, a change that
brought a lot of unforeseen risks.
The exposure to Algosaibi and Saad
was not just from Saudi banks, rather
a whole host of the world’s largest
72 gulfbusiness April 2011
institutions. When they lent to these
two groups it wasn’t called name-
lending, so it shouldn’t be when it
involves a bank within the Kingdom.
He added: “Name-lending gives
the indication that it was only Saudi
banks dealing with these entities and
that’s false. We all just didn’t know
what we didn’t know.”
Algosaibi and Saad are still facing
court battles across the globe to fend
off international creditor banks.
REGULATION HERE TO STAY
Alnasr says this scandal was one
symptom of a much deeper set of
problems that existed in the global
banking industry; problems, such as
poor liquidity and risk management,
that the downturn enflamed. As
such, he warned banks that financial
watchdogs would rule with an even
stronger iron fist from now on.
“Globally, I expect a tougher stance
from regulators this year. But I’m
not surprised they’re taking tougher
measures given what the world has
been through, the least of which
was excessive leverage, inadequate
capitalisation and exposure to toxic
assets in the large global institutions.
“Fortunately, banks in Saudi have
been relatively well capitalised and
there’s not been the over-leveraging
seen elsewhere. The average capital
adequacy ratio of the banking sector in
Saudi is 16 per cent. Regulations from
Basel III will emphasise liquidity so
it’s not a massive challenge for banks
in the Kingdom since they are already
very liquid,” Alnasr says.
Basel III requires seven per cent
tier one capital, but according to NCB
documents, the bank has 17 per cent.
Plus, its loan-to-deposit ratio is very
strong at 60 per cent.
Regulations have been tightened
across the region as a continued
high-level of non-performing loans
blight bank profit margins. For
instance, bad loans at UAE banks
increased 36 per cent to Dh44.3
billion last year compared to Dh32.6
billion in 2009, according to the
country’s Central Bank.
Yet, Saudi – and NCB in particular –
has deftly avoided the worst of the bad
debt, says Alnasr, but regulators are
not loosening their grip any time soon.
“The Governor of SAMA said all
the banks are expected to maintain
non-performing loan coverage of 100
per cent. Coverage at NCB stands at
117 per cent, so we have an added
17 per cent cushion to strengthen
our balance sheet. Non-performing
loans across Saudi are still relatively
low compared to other parts of the
region, around four to five per cent.
“There is a strong appetite for
lending thanks mainly to the
government’s stimulus package
and budget numbers for key areas
like education, infrastructure and
hospitals. For instance, NCB has
grown its loans by 12 per cent in
2010,” he adds.
According to NCB data, bank
lending in Saudi recovered by 5.2
per cent last year after a fall in 2009
and is expected to continue its climb
through this year, as confidence and
economic performance picks up.
”Inflation in Saudi
is 5.5 per cent now
but it’s likely to
stay in the range
of six per cent in
2011. If it crosses
the seven per cent
threshold I’d expect
some intervention
from regulatory
authorities.”

NCB FAST FACTS
fl Established: 1950
fl Saudi’s biggest bank
fl No. of employees: 9,225
fl Net profit: SAR4.7bn (2010)
SAR4.04bn (2009)
fl Total assets: SAR282.4bn (2010)
SAR257.5bn (2009)
SAUDI INVESTORS DIVERT
CASH HOME
Meanwhile, NCB has been riding a
crest of a wave of repatriated cash,
according to Alnasr, as Saudi-based
investors – spooked by the recent
years’ turmoil in international
markets – divert funds home.
As a result of customers moving
investments back to Saudi, the bank’s
deposit levels have swollen 13 per
cent year-on-year, he says.
“Saudi investors were impacted
by the general volatility in global
markets in recent years along with the
challenges that international banks
faced. However, during this time
there has also been a flight to quality
that has seen investors reach for
institutions they trust. NCB has been a
benefactor of this trend,” says Alnasr.
The increased demand has
led Alnasr to build out his asset
management and brokerage division
in recent months, including a large
investment in headcount.
He adds: “We’ll also be hiring
within corporate banking as we
believe the drive to modernise
infrastructure and projects in the
Kingdom will raise demand. The
same goes for project finance and
wealth management recruitment.”
In a bid not to miss the ‘next big
thing’, regional and international
banks have set out ambitious
expansion plans for Saudi in recent
months. The Saudi operation of
Dubai’s Shuaa Capital has grown
throughout 2010, and the bank says it
”continues to represent a key part of
the group’s growth plans for 2011”.
In September, Barclays said it was
set to recruit around 30 people as
it formally kick-started its Saudi
operation by offering investment
banking and wealth management
services in the Kingdom. Similar
growth plans have been announced by
the likes of JP Morgan and Deutsche
Bank in the latter part of 2010.
Alnasr seems unfazed by the new
competition: “I’ve read about the
expansion plans of the big investment
banks into Saudi but I don’t see them
materialising in such a dramatic way.
That being said, there will be banks
that will have a stronger presence this
year in the Kingdom.
“The players that have survived the
aftermath of the financial crisis and
who are interested in the region are
looking to come to Saudi for sure. But
the shift will be less pronounced than
the flood that some are predicting.”
SAUDI’S SHORTCOMINGS
For all the positives to come out of the
recession for Saudi, there are a number
of fundamental socio-economic
headaches that refuse to recede. Most
notably are the threats of run-away
inflation and the menace of a rapidly
growing young population.
Analysts worry that a global rise
in food prices this year may drive
up inflation in the imports-reliant
FEATURES PROFILE
Kingdom. Meanwhile, a rising
unemployed youth could cripple
the economy, let alone pose some
questions about social unrest.
“The issue of a growing young
population is a structural issue and
not a new thing and not something
to be solved just in 2011. The long-
term challenge we face is to create
enough jobs to sustain the growing
demographic.
“More short-term, there are
questions regarding inflation, which
seems to be edging up and is being
driven by the rise in commodity prices
and domestically a rise in things like
rent prices. It’s a concern in most of
the emerging markets that are growing
faster than the mature economies.
He adds: “Inflation in Saudi is 5.5
per cent now but it’s likely to stay in
the range of six per cent in 2011. If it
crosses the seven per cent threshold
I’d expect some intervention from
regulatory authorities.”
As a weather mast for the Saudi
economy, NCB offers an optimistic
outlook for the rest of 2011. Early
detection of risk and careful cash
and resource management have seen
Alnasr and the bank through the
worst recession in history. And as the
much-sought-after economic recovery
gathers momentum, NCB will hope to
add to the long-term positioning of
Saudi in the wider Gulf region. ■
April 2011 gulfbusiness 73
 $
FEATURES FINANCE
ILLUSTRATION: TARAK PAREKH

74 gulfbusiness April 2011


CURRENCY WARS
The Gulf's central location is not always a good thing, especially if it is lodged in the middle of a
currency war between the US and China, writes ANDREW WHITE.
S
ome Gulf countries make a great
virtue of being a link between
East and West. The geographical
location of financial centres such as
Dubai and Bahrain is a key selling
point when it comes to attracting
international business. The region’s
position as a stepping stone between
New York, London, Shanghai and Tokyo
means that it is playing a significant
role as the global economic
landscape resettles in the
wake of the worldwide
credit crunch.
By late last year,
however, those
same countries were
discovering that it’s not
always best to be stuck in the
middle. The US and China – the
world’s biggest economy in the
20th century and the one tipped to
overtake it this century – are engaged
in a brutal so-called currency war
that has prompted policymakers
in dollar-pegged Gulf economies to
brace themselves for punitive tariffs
being imposed on China, hindering
the global trade upon which Gulf
nations thrive.
The trouble stems from the fact
that the US and China have
opposing monetary and economic
interests. The US runs at a balance of
trade deficit, meaning that it imports
more than it exports; China has a
surplus, and so exports more than it
imports. The US Federal Reserve is
wary of deflation and is concerned
above all with falling prices; China is
obsessed with the threat of inflation
and committed to job creation in
order to keep its rapidly growing
population happy.
Washington claims that Beijing’s so-
called ‘competitive devaluation’ of its
currency gives Chinese exporters an
unfair advantage, as well as allowing
it to amass huge foreign reserves.
But in China, the government has
responded by blaming US policies
for a flurry of currency interventions
by countries such as Japan, South
Korea and Thailand.
“The continued and drastic US
dollar depreciation recently has led
countries to intervene in the currency
market, intensifying a currency war,”
China’s commerce ministry said in a
report in early November, ahead of
the G20 leaders summit in Seoul.
Since the summit, when the
US tried and failed to limit trade
deficits, America has embarked on a
second round of quantitative easing,
a move indirectly intended to drive
down the value of the US currency.
FEATURES FINANCE
The US has also cut its interest
rates to zero to boost business and
consumer confidence, and so the
international reserve currency has
been undermined – in turn leading
investors to pour money into
emerging economies like China to
benefit from their higher interest
rates and stronger economic growth.
As a result, the currencies
of emerging economies have
strengthened, making their goods
and services less competitive on
international markets and in turn
hindering their economies. For this
reason, and despite the fact that
any overt intervention will set off
a bout of trade subsidisation and
protectionism, China is now even
more reluctant to let the international
market determine its currency’s
value. Beijing has shown little sign it
will allow a dramatic revaluation of
the yuan, and while higher Chinese
inflation is helping, in early February
2011 a US Treasury Department report
said the yuan remains “substantially
undervalued” and that China had
made “insufficient” progress in
allowing it to rise.
While Fed chairman Ben Bernanke
has so far refrained from naming
China directly – despite a series of
thinly-veiled attacks on “emerging
economies that are trying to sustain
April 2011 gulfbusiness 75
 FEATURES FINANCE
undervalued currencies, with tightly
controlled exchange-rate regimes”
– he has used charts depicting how
the Asian nation has limited the
appreciation of the yuan. And when
the G20 finance ministers met in
Paris in February 2011, the so-called
currency war was top of the agenda,
even in the shadow of renewed
pressure on the euro, and sovereign
debt concerns over Portugal.
As the Gulf waits to see whether
the two sides will reach a truce in
their monetary mudslinging, it has
not received the capital inflows it
might have anticipated in the wake
of a loosening of policy in the US.
According to McFarland at Emirates
NBD, while capital inflows did increase
in late October last year – reflected in a
significant drop in Gulf Credit Default
Spreads (CDS) prices and bond yields
due to overseas interest in higher-
yielding assets – it has since been
quiet and expected investor interest
has not been sustained.
“We thought we’d see a big rush of
foreign capital into emerging markets
and Gulf bonds, particularly the high-
yield ones, but that hasn’t happened,”
he admits. “It happened temporarily,
but then came to a sudden halt and
GETTY IMAGES
stopped dead in its tracks around the
middle of November.”
While capital inflows have not
76 gulfbusiness April 2011
materialised, Gulf economies have at
least kept a tighter lid on inflation
than some of their emerging market
contemporaries. Due to inflation
fears in markets including China,
interest rates – particularly in fixed-
income bonds – have been rising
almost across the board, and yields
have been growing too.
“A follow-on from the currency
wars is that central banks in most
”As the Gulf waits to
see whether the two
sides will reach a truce
in their monetary
mudslinging, it has not
received the capital
inflows it might have
anticipated in the
wake of a loosening
of policy in the US.”
emerging markets have been trying
to move away from raising interest
rates and finding other ways
of tightening monetary policy,”
says McFarland. “The Chinese,
Russian and Turkish central banks
have already tightened policy by
tightening the reserve requirements
for banks, which means that banks
have to hold a higher proportion of
their cash with the central bank, and
therefore aren’t able to lend out as
much as they would have before.”
China has raised its interest rates
three times in less than 12 months,
the benchmark one-year lending rate
rising 25 basis points to 6.06 per
cent in February 2011. The rise was
widely anticipated, as is another rise
in coming months, while there is also
expected to be a further increase in
capital requirements. In January,
the People’s Bank of China increased
the reserve requirement ratio for the
country’s biggest banks to 19.5 per
cent, its highest level and the eighth
such rise since the start of 2010.
In the Gulf, meanwhile, inflation
rates have stayed low – and in
the UAE the Emirates Interbank
Offered Rate (EIBOR), the interest
rate charged by banks for interbank
transactions, has climbed but at a far
slower pace than banks would like.
“Growth rates in most emerging
markets have been fairly robust
over the last 12 to 24 months, and
inflation rates have been above
interest rates in most of these
countries,” says McFarland. “In the
Gulf there is a direct implication in
that oil prices have been heading

higher, which will eventually filter
through into faster credit growth.
But right now inflation in the Gulf
is pretty slow – it’s even dropping in
Saudi – and the recovery of the Gulf
markets has been much slower than
we’ve seen elsewhere.
“We haven’t got to the point in the
recovery cycle here where we’ve seen
rising food price inflation, for example,
despite the weak dollar. The big
property downturns in the UAE and
Qatar have meant a lot slower recovery
than in Asia-Pacific, for example,
where the upswing was more export-
orientated and founded on much lower
levels of personal debt.”
McFarland maintains that Gulf
policymakers will not be concerned
by the weakened dollar, at least
not when the recent fall in value
is placed in a historical context.
Of more significance to the Gulf
economies is the maintenance – and
expansion – of free trade agreements
with other emerging markets.
“The movements in the dollar over
the last four or five months have
been pretty mild compared to the
movements we saw five or six years
ago,” he notes. “In late 2007 and early
2008 everyone was talking about a
weakening dollar and the euro was at
1.60, while sterling was well north of
2.00. Now we have sterling at 1.60 and
the euro trading at 1.36. There hasn’t
been that big a move in overall terms;
what you have had is a weakened
dollar against emerging markets.
“What’s more pressing is that
the Gulf, and the UAE specifically,
maintains and builds on its
trade agreements. We don’t like
protectionism – it does nobody
any favours.”
According to a report published
last year by consultancy McKinsey,
trade between China and the GCC
is expected to more than triple to at
least $350 billion by 2020. The GCC
already supplies around 35 per cent
of China’s crude oil imports, and
the China Petroleum and Chemical
Industry Federation forecasts that
the Asian nation’s demand for oil will
grow by 6.6 per cent this year. With
this in mind, the UAE has signed
bilateral agreements with China
– a move that could reap
benefits not just for
the two countries,
FEATURES FINANCE
but for the Gulf and wider Middle
East as well.
“Things have really been moving
forward, and it’s a trend that has been
driven by China,” says McFarland.
“If its agreements with the UAE are
replicated in other Asian countries and
African countries, with the UAE as a
middle man, it would be of substantial
benefit to the entire Middle East.”
While the US and China exchange
hostilities, Gulf policymakers will
be hoping that they’re not forced to
pick a side. And most of all, they’ll be
hoping that the currency war does not
escalate into a full-scale trade war –
an outcome that would be devastating
to the region’s recovering economies. ■
April 2011 gulfbusiness 77
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@
n late March, the openings
in Paris of the Shafic
Abboud Retrospective at
the Instituit du Monde Arabe
and the Mesopotamia show by
TDIC really focused attention
on some of the finest work of
the region, pre-Islamic and
modern. Many have said that
it has been long overdue that
a serious retrospective of
Shafic Abboud’s work was held
in Paris, where Shafic lived
and worked since 1947. The
exhibited collection covers
the complete range of his
work from 1948 until 2003,
with work loaned by Mathaf
in Doha, the family of Shafic
Abboud and numerous private
collectors. The Shafic Abboud
Retrospective runs from the
21st March until the 19th of
June in Paris.
Christie’s has the
first of their annual
sales of Modern and
Contemporary Middle
Eastern works. The
managing director
and the specialist
told me that there
are no surprises so
far for them with the
oncoming April sale.
The previous sale in October
2010 was hit by 31 lots being
withdrawn and the director of
the department resigned.
The sale is on 19th April at
Emirates Towers and holds
an El Gazzar, which is a true
masterpiece and the finest
to come to market so far.
Guiragossian’s ‘Madonna and
Child’ is a subject matter not
often seen and is, therefore, an Lot 13
Paul Guiragossian (Lebanese, 1926-1993) ‘Madonna and Child’
important example of his work. Signed, titled and numbered `Paul Guiragossian Madona 4 (a)’
Shafic Abboud’s ‘Fleurs de Oil on canvas, 71 x 59cm, painted circa early 1960s
Fevrier’ is also a strong work Estimate: $50,000 – 70,000, Bid Suggestion: $100,000
by the artist, compounding
with the retrospective in Paris.
The ceramic plate by Shafic
Abboud (lot 17) was previously
exhibited at the TDIC
exhibition ‘Opening the Doors’
held in 2010 and is listed as
being from the collection of Ali
Khadra of Canvas Magazine.
The work by Jewad Selim has
as in incredible provenance
as it was gifted by Jewad to Lot 8 Lot 18
his fellow artist Sheikhly as a Abdul Hadi El-Gazzar Chafic Abboud (1926-2004)
wedding present. ■ (Egyptian, 1925-1965) ‘Fishing’ ‘Les Fleurs de Fevrier’
Signed and dated `El Gazzar 1957’ Signed ‘Abboud’
Oil on board, 85 x 70cm, painted Oil on canvas, 120 x 110cm,
Jewad Selim (Iraqi, 1921-1961) in 1957 painted in 1998
‘Standing Figure (Girl)’ Estimate: $250,000 – 350,000, Estimate: $50,000 – 70,000,
Wood, height: 34cm, executed in Bid Suggestion: $400,000 Bid Suggestion: $70,000
1941 this work is unique
Estimate: $80,000 – 120,000,
Bid Suggestion $80,000

April 2011 gulfbusiness 79

 DOWNTIME STYLE

A GENTLEMAN’S AFFAIR
London’s St James offers the very best in blue-blooded, stylish apparel, writes
ADRIAN MOURBY.

B
efore Queen Victoria moved the English royals into
Buckingham Palace, the family resided in St James for
centuries. This corner of London’s West End sprung
New & Lingwood
up around a brick palace built by Henry VIII. The streets of St
ET
Swaine Adeney MN STRE James soon filled with courtiers and shops catering to their
Brigg JERY every need, based on the site of the old royal tennis courts.
Today it’s surprising how many of those shops have
survived, both in St James Street and Jermyn Street and in
ST

the narrow alleyways that connect them. It may only take

five minutes in a taxi from Trafalgar Square to the Ritz but
JAM

you’ll be travelling past the oldest shops in London, many of

ES

them still displaying their royal warrants.

STR

Berry Brothers, Lock & Co and Swaine Adeney can seem

rather exclusive if you look in the window. They’re small,
EET

quiet shops. Fortunately the Stafford Hotel in St James has a

concierge who knows all the shopkeepers and he arranged for
me to take a tour with the hotel manager, Stuart Procter. We
began with New & Lingwood in Jermyn Street where Stuart
t
tree buys his socks. We were in good company. Evidently the Duke
ame’s S Berry Brothers & Rudd
int J of Devonshire buys his socks here too, 30 pairs at a time.
e Sa The Stanfford
Littl Lock & Co Outside New & Lingwood stands a statue of Beau
Hotel

80 gulfbusiness April 2011


Brummell, the 18th-century dandy
who did so much to improve the
standard of dress among English
gentlemen. Jermyn Street has always
been a place for colourful shirts,
extravagant waistcoats and elaborate
silk dressing gowns.
Next Stuart took me to meet Sue
Simpson, the manager of Lock & Co
in St James Street. Lock made hats
for Laurence Olivier, Charlie Chaplin
and the Duke of Windsor and has the
patterns for each head on display.
These are created by a ‘conformitor’
New & Lingwood, based in Jermyn Street, is a shirt and shoemaker providing
bespoke, tailored and ready made shirts, hosiery and shoes.
a French machine that’s 150 years old
and still used today to map your skull.
It’s not too far removed from wearing
an old-fashioned metal typewriter.
As well as showing me one of the
Duke of Wellington’s cockaded hats
and the order for the hat Lord Nelson
was wearing at the Battle of Trafalgar,
Sue showed me Lock’s new range of
headwear, Lock & Roll, which is very
popular with pop stars. Hats have
never been more popular, said Sue. So
if you want to get ahead these days,
you know what to do... ■
Left: Sue Simpson is the manager
of Lock & Co, which has made hats
for English warriors like the Duke of
Wellington and Lord Horatio Nelson.
DOWNTIME STYLE
NEW & LINGWOOD
A sockmaker and shirtmaker
began this partnership in 1865
supplying Eton College. They
later opened a London shop at
53 Jermyn Street so that their
young gentlemen could shop
when in town. Today New &
Lingwood is a gentlemans’
outfitters supplying everything
an Englishman needs to wear
in one place.
LOCK & CO
The oldest hatters in the world
moved into this building in 1764
when George III resided at St
James Palace. The first bowler
hats were designed for the
brother of the second Earl
of Leicester by Lock & Co in
1849 and the company still
sells them. Price: $500.
BERRY BROTHERS & RUDD
Originally an ‘Italian
Warehouseman’ or delicatessen,
Berry Brothers was founded
in 1698 in the reign of William
and Mary and used to supply
the palace along underground
passages below St James. In
the 19th century the store
graduated to selling spirits and
now specialises in wine.
SWAINE ADENEY BRIGG
Swaine and Adeney began
making saddles and whips for
the royal family in 1750 but are
now famed for briefcases and
luggage. Based at 54 St James
Street, the company work in
only four colours – chestnut,
black, havana and their very
distinctive London Town
(orange). Mr Brigg personally
makes the store’s umbrellas.
April 2011 gulfbusiness 81
DOWNTIME CRUISE
A MODERN CLASSIC
Pedigree comes at a price, but it’s worth it,
writes GLENN FREEMAN.
T
here’s no mistaking the Land
Rover for anything else.
While 40 years have passed
since the first model rolled off the
production line, with new materials
and high-technology making their
way into the marque since then, its
slab-sided exterior and classic but
modern styling make it instantly and
reassuringly recognisable.
No, it isn’t a conventionally
stunning vehicle, but it has an
impressive stance and presence,
possessing something of a military
air without being over the top like
some of its contemporaries. While
its less pedigreed competitors in the
luxury off-road SUV segment often
fall down in one or more categories,
being either sleek, showy vehicles
with little off-road ability, or vice
versa, the Range Rover is one of the
few that delivers on both fronts.
Whether you’re touring the tarmac
of Sheikh Zayed Road or negotiating a
wadi in Hatta, the Land Rover Range
Rover HSE is more than capable.
Power aplenty is delivered by the
5L V8 engine, which produces ample
forward momentum for the Range
82 gulfbusiness April 2011
Rover’s 2,700kg kerb weight, also
providing a decent soundtrack of its
own without interrupting the refined
quietness of the interior. Equipped
with either of its V8 powerplants, the
350-hp naturally-aspirated or 500-
hp supercharged engine variants,
interior noise is kept to a minimum,
though a subtle growl is audible
when the Rover is driven with intent.
The Range Rover is equally
beguiling inside. Seats, hood lining
and door trim are all high-quality
cowhide, combined with other interior
surfaces of polished metal, wood and
soft-touch plastics.
It also comes with more features
than any original owners of the
earliest Land Rover Defenders would
ever have dreamed of, with a 12-inch
TFT display dominating the centre
console. Operated via a central dial
rather than a touch-screen, this was
somewhat tricky to use at first, with
menu options not particularly intuitive
and taking some tinkering to master.
Some of the other welcome modern
conveniences include the integrated
iPod connector port along with USB
and other MP3 player compatibility.
Polished metal, wood and soft-touch
plastics accentuate the stylish leather-
clad Range Rover interior.
Two enhancements for the 2011
model are the Hill Start Assist and
Gradient Acceleration Control. The
former is quite self-explanatory,
an always-on feature preventing
roll-back on steep gradients. The
latter complements the Hill Descent
Control (HDC) system, automatically
pressurising the braking system
when descending steep hills, even in
instances when HDC is not activated.
The two other automatic terrain
packages first introduced on the
Range Rover in 2010, sand launch
control and the rock crawl program,
have also been retained in this model.
Priced at $88,500, the Land Rover
Range Rover HSE is not quite
luxury on a budget, but with such
features and quality throughout, you
shouldn’t feel overcharged. ■
 DOWNTIME BYTES
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+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
NETBOOKS WERE TOUTED as the next big thing in iPad 2, What’s new? +++++++++++++++++++++++++++
+++++++++++++++++++++++++++
F]ÔZ\Gfn\igf`ek#
+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
computing three years ago. Sales of the small notebook fl Better Safari that runs twice as fast, +++++++++++++++++++++++++++
<oZ\c#Xe[Nfi[ Xe[
+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
fl Wireless streaming through iTunes +++++++++++++++++++++++++++
computer with a slender price tag jumped eightfold in Xi\jk`ccZfdgXk`Yc\n`k_
+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
Home sharing +++++++++++++++++++++++++++
+++++++++++++++++++++++++++
k_fj\]fidXkj%PflZXe
the United States in 2009 to 7.5 million devices, and +++++++++++++++++++++++++++
+++++++++++++++++++++++++++
fl AirPlay improvements to help find your +++++++++++++++++++++++++++
\ogfikpfli[fZld\ekj
+++++++++++++++++++++++++++
tripling worldwide to 34 million. Yet the torrid growth +++++++++++++++++++++++++++
Apple TV +++++++++++++++++++++++++++
XjXG;=#%[fZ#%ocj#%ggk#
+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
stalled last year. To some degree, the iPad is to blame. with no configuration needed +++++++++++++++++++++++++++
+++++++++++++++++++++++++++
fiXepf]k_\fk_\i
+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
Still, analysts say, the tablet effect is only part of the fl PhotoBooth software for both cameras +++++++++++++++++++++++++++
dXafiÔc\kpg\j%
+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
fl FaceTime between most iOS devices +++++++++++++++++++++++++++
answer. Sales of netbooks, they note, were slowing even N_f`kËj]fi1K_\
+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
(iPhone, Mac, iPad) +++++++++++++++++++++++++++
+++++++++++++++++++++++++++
`NfibXggjXi\^i\Xk
before the iPad went on sale in April. And the products +++++++++++++++++++++++++++
+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
]fiYlj`e\jjkiXm\cc\ij
+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
themselves are hardly substitutes for each other; one What’s inside? +++++++++++++++++++++++++++
n_fnXekkfYi`e^k_\`i
+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
is all no-frills efficiency, the other more an appealing +++++++++++++++++++++++++++
fl A5 dual-core chips: two times faster CPU and +++++++++++++++++++++++++++
gi\j\ekXk`fejXe[
+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
luxury, priced at $500 and up. +++++++++++++++++++++++++++
nine times faster graphics [fZld\ekjn`k_flk
+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
cl^^`e^Xifle[XcXgkfg%
;FNE9LKEFKFLK
fl Same power consumption as the previous +++++++++++++++++++++++++++
+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
A4 processor with same 10-hour battery life +++++++++++++++++++++++++++
Gi`Z\10%00\XZ_%
+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
+++++++++++++++++++++++++++
fl Rear and front cameras +++++++++++++++++++++++++++
Instead, it is more likely that makers of netbooks
fl Sadly, the 9.7-inch screen remains at 1024×768
oversold a product that underperformed. The netbooks fl 33 per cent thinner: 13.4mm–8.8mm, making Launch prices are the
bought by early adopters were underpowered PCs that same as the original iPad,
it thinner than the iPhone 4 so the Wi-Fi-only model will
were sluggish and could not handle many popular fl Lighter: 1.3lbs vs 1.5lb cost you US$499, US$599
fl White version available and US$699 for the 16GB,
software applications. That has been rectified to 32GB and 64GB models
fl 16GB, 32GB and 64GB respectively, while the 3G
some extent and the news is not all bad for netbooks. version is priced at US$629,
fl WiFi or 3G
Although the market research firm IDC predicts that US$729 and US$829.
worldwide sales will fall in 2011 by about seven per
cent, that still adds up to around 32.9 million netbooks
and roughly 10 per cent of the total PC market. In 2005,
notebooks on average cost roughly $1,000. Today, the
average price is about $465.

April 2011 gulfbusiness 83

 Hotel Collection
Gulf Business Hotel Collection members offer guests complimentary copies of
the GCC’s premier business magazine Gulf Business.
United Arab Emirates
AL RAHA BEACH HOTEL PARK ROTANA ABU DHABI LAYIA OAK HOTEL & SUITES MEDIA ROTANA DUBAI THE FAIRMONT DUBAI

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Data monitor
86 TOP DEALS
Mergers & acquisitions

87 BREAKDOWN
Takeover activity by
sector and volume

April 2011 gulfbusiness 85

 TOP M&A TRANSACTIONS
Deal Value ($m) Bidder Target Deal Description
250 Soros Fund Management APR Energy, LLC (Significant Stake) Soros Fund Management LLC, the US-based hedge fund sponsor that invests in the public equity and
LLC; Albright Capital fixed income markets across the globe, and Albright Capital Management LLC, the US-based company
Management LLC that manages a private investment fund that is available to institutional and other accredited investors,
has acquired a significant stake in APR Energy LLC, the US-based company engaged in the deployment
of power generation solutions for utility, industrial and governmental customers, from Levant Capital
Limited, the United Arab Emirates-based private equity firm, for a total consideration of USD250 million.
This investment from Soros Fund and Albright Capital will allow APR Energy to invest in the products
and services that will propel the company to a higher level of business operations. In addition, the
rapidly growing organisation will be able to grow faster and more vibrantly in the temporary power
market and will be even better equipped to serve their customers around the globe. In this transaction
Levant Capital will generate an internal rate of return in excess of 40 per cent. In 2009, Levant Capital
had acquired an undisclosed significant stake in APR Energy LLC for a consideration of USD30 million.
Source links: APR Energy LLC Deal Announcement (8 Mar 2011)
115 Fastube Limited Atlantic Maritime Group Fastube Limited has agreed to acquire Atlantic Maritime Group from Chong Mee Chin and Wong Siew Cheong.
Atlantic Maritime Group, a UAE-based company headquartered in Sharjah, is engaged in providing offshore
support vessels, ship repair and maintenance services, and ship chandlery and steel fabrication works.
Fastube Limited, a Singapore-based company, is an investment holding company engaged in development,
manufacture, processing, and sale of various precision steel pipes and tubing products. Chong Mee Chin and
Wong Siew Cheong, are UAE based private investors.
Terms: 228,125,000 new ordinary shares of Fastube Limited at an issue price of SGD 0.64 per share, valuing the
deal at SGD146 million (USD115.1 million)
Rationale: The acquisition will strengthen the company’s offshore chartering business for the oil and gas industry
and it will also enhance shareholders value and thereby increasing market capitalisation of the Company.
Post Deal Details: Post acquisition, Chong Mee Chin and Wong Siew Cheong will hold 228,125,000 shares
representing approximately 93.59 per cent of the enlarged issued share capital of Fastube Limited.
Expected completion: The transaction is expected to be completed on 31 August 2011.
Conditions: Fastube Limited’s shareholders approval Regulatory authority approval SIC Approval Due Diligence
Background: The existing shareholders of Fastube Limited have been given one new share for every 10 existing
share bringing the total number of shares to 12,500,000.
37 CCI International Holland SSG Investment Limited ; The Coca-Cola CCI International Holland B.V., the Netherlands-based beverages firm, a subsidiary of Coca-Cola Icecek
B.V. Bottling of Iraq FZCO (50 per cent AS, the listed Turkey-based beverages firm, has acquired a 50 per cent stake in The Coca-Cola Bottling of
Stake) Iraq FZCO (CCBI), the Iraq-based bottler of Coca-Cola products in Iraq, and SSG Investment Limited, the
Iraq-based manufacturer and distributor of Coca-Cola products, from The Coca-Cola Export Corporation,
the US-based manufacturer and distributor of soft beverages for a cash consideration of USD36.9 million
including debt. The consideration includes a shareholder loan of USD14.61 million. The transaction is
part of long term strategies for growth towards future strategic acquisitions. Through this acquisition, CCI
International Holland has now gained 100 per cent ownership of CC Beverage, the Iraq based producer and
distributor of beverages in Northern Iraq. CCBL was 40 per cent owned by SSG and 60 per cent owned
by CCBI.
28 Close Brothers Private HSBC Insurance Holdings (Bermuda) Kane Group, the Bahrain-based provider of specialist insurance and risk management services and
Equity; Kane Group Limited; HSBC Insurance SPC Limited Close Brothers Private Equity (CBPE), the UK-based private equity firm, have agreed to acquire HSBC
; HSBC Bank (Cayman) Limited Insurance Holdings (Bermuda) Limited, the Bermuda based company engaged in providing insurance
(Insurance Management Business And services, HSBC Insurance SPC Limited, the Cayman Islands-based insurance company, and the insurance
Assets); HSBC Insurance Agency (USA) management business and assets of HSBC Bank (Cayman) Limited and HSBC Insurance Agency (USA)
Inc. (Insurance Management Business Inc., from HSBC Bank (Cayman) Limited, the Cayman Islands-based company that offers bank, trust, and
And Assets) insurance management services, HSBC Insurance Agency (USA) Inc., the US-based insurance company
and HSBC Bank Bermuda Limited, the Bermuda-based financial services company that provides
banking, fund administration, trust, custody, and asset management services to individuals, small
businesses corporate, trusts, and estates, for a cash consideration of USD27.5 million. Kane will retain
all employees of the acquired companies. The acquisition is in line with Kane’s growth strategy. The
transaction, which is subject to regulatory approvals, is expected to close on 30 April 2011.
SOURCE LINKS: HSBC Holdings plc Stock Exchange Announcement (10-Mar-2011)
Kane Group deal announcement (11-Mar-2011)
17 Kitara Capital TVS Automobile Solutions Ltd (Minority Kitara Capital International Limited, United Arab Emirates-based asset management company and the
International Limited Stake) subsidiary of Halcyon Capital Holding Co SAOC, the listed Oman-based venture capital firm, has acquired
minority stake stake in TVS Automobile Solutions, the India based company that is engaged in car
servicing, maintenance and on road breakdown service, from TVS Group, the India-based provider of
automotive components for a consideration of INR780 million (USD17.31 million). The acquisition will
lead TVS Group to expand its business throughout India and increase the number of its garages.
14 Intersun Holding FZCO Ramstore MMC Intersun Holding FZCO, the UAE-based company engaged in trading of foodstuff, has acquired Ramstore
MMC, the Azerbaijan-based owner and operator of supermarket stores, from Migros Turk Ticaret A.S.,
the Turkey based food retailer chain and group, for a consideration of USD14.25 million.
As per the terms of agreement, USD250,000 will be paid as a down payment and the balance will be
paid out in installments.
Notes: Deals are based on the geography of target, bidder or vendor being in the Middle East, for the period between February 17, 2011 and March 16, 2011. Based on announced deals, including lapsed and
withdrawn bids. Where deal value is not disclosed, the deal has been entered based on turnover of target exceeding $10 million. Activities excluded from the table include property transactions and restructurings
where the ultimate shareholders’ interests are not changed. Source: Mergermarket

86 gulfbusiness April 2011

 GULF BUSINESS QUARTERLY M&A ACTIVITY MIDDLE EAST ANNUAL M&A ACTIVITY
FROM 2004 TO 16 MARCH 2011 FROM 2004 TO 16 MARCH 2011
14,000 60
30,000 250 30,000 250

Number of deals
($m) ($m)

Number of deals

Number of deals
12,000

Value ($m)
ValueValue

25,000 25,000
200 200
10,000
40
20,000 20,000
8,000 150 150

15,000 15,000
6,000
100 100
20
10,000 10,000
4,000

50 50
5,000
2,000 5,000

00 0 0 0 0
Q12004
Q2 Q3 2005
Q4 Q1 Q22006
Q3 Q4 2007
Q1 Q2 Q32008
Q4 Q1 2009
Q2 Q3 Q42010
Q1 Q2 2011
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
Value Value
Value
Volume Volume
Volume

GULF BUSINESS ACTIVITY BY INDUSTRY GULF BUSINESS ACTIVITY BY INDUSTRY

SECTOR YE 2011 – VALUE SECTOR YE 2011 – VOLUME
Business Transport
Services Consumer 4.8%
1.4% 0.8%
Financial
Services
0.3% Consumer Real Estate
4.8% 4.8%
TMT
Pharma/Medical & 9.5%
Biotech 25.8% Pharma/Medical &
Biotech 19%

Real Estate
11.5% Business
Services 14.3% Defence
4.8%

Industrials & Chemicals

58.7% Financial Services Industrials & Chemicals
14.3% 23.8%
Defence
1.5%

Mergermarket tracks all M&A deals of more than $5 million where the target, bidder or parent is a Middle Eastern company.

April 2011 gulfbusiness 87

EXHIBITIONS & CONFERENCES

Cityscape Abu Dhabi

Abu Dhabi National Exhibition Centre, April 17–20, 2011
Cityscape Abu Dhabi is an annual networking exhibition and
conference focusing on all aspects of the property development cycle.
All eyes will be on how busy the floors are; the ultimate layman’s
litmus test for the country’s stressed real estate sector.
The event, now into its fifth year, provides a platform for the real
estate industry to showcase projects and services, meet with investors
and developers from around the world and participate in discussions
with industry leaders.
Cityscape Abu Dhabi is also set to host investor roundtables,
bringing together institutional investors and developers to discuss
hot topics and partnership opportunities, as well as share strategy.

UNITED ARAB EMIRATES

Abu Dhabi
April 17-18 Construction Lifecycle Risks Sheraton Hotel, Abu Dhabi marcusevans.com
17-20 Cityscape Abu Dhabi 2011 Abu Dhabi National Exhibition Centre adnec.ae
23-25 Arabian World Construction Summit 2011 Beach Rotana Hotel, Abu Dhabi meedevents.com
24-25 Middle East Roads Sheraton Hotel, Abu Dhabi meedevents.com
25-27 Arabian Sweets Abu Dhabi Abu Dhabi National Exhibition Centre adnec.ae
25-27 Middle East Food Abu Dhabi Abu Dhabi National Exhibition Centre adnec.ae
Dubai
April 04-06 Dubai Entertainment Amusement and Leisure Show 2011 The Arena, Dubai International Convention themeparksdubai.com
and Exhibition Centre
05-07 Dubai International Wood & Wood Machinery Show 2011 Airport Expo, Dubai dubaiwoodshow.com
10-11 Corporate Social Responsibility Hyatt Regency Dubai meedevents.com
14-16 Franchise UAE 2011 Business Village Deira, Dubai franchiseuae.com
14-16 Gulf Education & Training Exhibition and Global Education Dubai International Convention and Exhibition dwtc.com
Technology & Equipment Supply Exhibition 2011 Centre
17-18 Investor Relations 2011 Hyatt Regency Dubai marcusevans.com
17-19 World Class Airlines Dubai International Convention and Exhibition marcusevans.com
Centre
17-19 World Class Airports Dubai International Convention and Exhibition airports-ise.com
Centre
18-20 Planet of the APPS Arabia One & Only Royal Mirage Dubai terrapinn.com
24-25 Human Capital Management Hyatt Regency Dubai marcusevans.com
24-28 8th CSR Summit Mövenpick Hotel, JBR, Dubai iirme.com
26-28 Professional Audio and Lighting Middle East (PALME) Dubai International Convention and Exhibition palme-middleeast.com
Exhibition 2011 Centre
Sharjah
April 05-09 30th Middle East Watch and Jewellery Show Expo Centre Sharjah mideastjewellery.com
24-29 The 13th Organisation Islamic Conference Expo Expo Centre Sharjah expo-centre.ae
KUWAIT
April 04-06 Kuwait Oil and Gas Summit & Exhibition Kuwait Regency Palace Hotel cwckuwait.com
QATAR
April 17-18 Eco-Buildings Millennium Hotel, Doha marcusevans.com
SAUDI ARABIA
April 03-05 Saudi Healthcare & Hospital Forum 2011 Jeddah Hilton Hotel saudi-healthcare.com
10-13 Acoustics in Construction Saudi Arabia Riyadh Marriott Hotel acousticsinconstruction.com
10-13 Saudi Medicare 2011 Riyadh International Exhibition Centre saudi-medicare.com
25-28 Saudi Building and Interiors Exhibitions & Symposium Jeddah International Exhibition & Convention acexpos.com
Centre

88 gulfbusiness April 2011

 ADVERTORIAL

China Sourcing Fair returns to the

Middle East’s business hub
Dubai International Convention & Exhibition Centre, Dubai, UAE.
May 31 - June 2, 2011

The fair provides an ideal platform for buyers in the Middle East and nearby North African
markets to meet potential supply partners from Greater China.
Export-ready suppliers from mainland China, Taiwan and Hong Kong will offer an extensive
array of stylish fashion accessories, gifts and premiums, home products, electronics, baby
and childrens products and much more to more buyers in the Middle East’s trading capital.

See hot new trends at this year’s

China Sourcing shows:

Electronics
Baby and children’s products
Home products
Gifts and premiums
Hardware and building materials
Garments and textiles

April 2011 gulfbusiness 89

IN YOUR SHOES

Into the wild

TRACEY SCOTT talks electronics and the environment with Anthony Peter,
Panasonic’s associate director for marketing Middle East, during a trip to Kenya.

A
s our 10-seater safari truck races into
Kenya’s Nairobi National Park, Anthony Peter,
Panasonic’s associate director for marketing
Middle East, boldly goes where no electronics
company boss has gone before.
“The year 2018 will be a centenary for Panasonic and
our aim is to become the number one green innovation
electronics company in the world,” he pledges.
And with less than seven years to go, Peter says the
firm’s target of manufacturing 100 per cent ‘eco-friendly’
products is more than achievable. “Contribution to society
is one of the basic tenets of our business philosophy,” he
says. “From basic green products that form our current
portfolio, we aim to double the sales of our superior green
products this year.”
To emphasise its green agenda, Panasonic last month
launched its Lake Victoria Environmental Education
programme in Kenya. The programme, in collaboration
with WWF, is designed to empower local communities,
schools and regional partners to manage their natural
resources while reducing emissions. Under the programme,
the electronics giant has invested $45,000 in three African
schools in a bid to encourage pupils to develop green
solutions to everyday problems. These solutions range
from setting up tree nurseries to fish farming, bee keeping
and biogas production.
“We have recently collaborated with local bodies in eco-
activities and have also initiated ‘eco diary’ competitions
for schoolchildren in Africa,” says Peter. Moving closer to
home for a moment, he announces that Panasonic has also
partnered with Abu Dhabi University to offer two students
a scholarship at the university per year.
With such an emphasis on the environment, it seems
only right we should pay a visit to the world famous
African safari park. So, armed with a cooler box and a tour
guide who fancies himself as Tarzan, ‘Team Panasonic’ set
off on its African adventure.
As we sped past some of Kenya’s finest foliage, clusters
of impalas, antelopes and gazelles leisurely grazed,
seemingly unfazed by our monster truck. Searching for a
cheetah and lion, however, was near impossible. But to
liven up the search I suggested a free Panasonic TV
for the first person to spot a big cat. “Possibly,”
a member of the Panasonic party replies. So
with the (slight) prospect of a free TV in sight,
I held my binoculars and – dare I say it –
Samsung camera at the ready. Jackpot!
Less than one hour in and a lion is
spotted sleeping behind a mud dune.
After patiently waiting 30 minutes for the big cat to
move, we reluctantly left it to its slumber and sped off
in search of some rhinos and water buffalo – two hefty
animals you would not like to cross on foot. With the top
down and four of our party hanging out the truck’s roof,
we soon spot two rhinos and a herd of buffalo. “Does it
charge?” asks Peter before we start slowly driving away.
Not one to pass up a business opportunity, Peter
suggests the idea of branding the safari truck with the
Panasonic logo. But before the group has a chance to
ponder the idea we grind to a halt at a zebra crossing
– quite literally. Over 15 zebras block the road on their
journey to one of the many waterholes dotted across the
45-square-mile park. “The experience of seeing nature’s
‘traffic’ in the morning – a lone lion, a few other animals
and zebras crossing the road – has reinforced the value
of protecting nature for a healthy co-existence,” says
Peter. “‘My Earth, my responsibility’ has been strongly
entrenched in my mind through this experience.”
With our humbling experience drawing to a close, Peter
talks future plans. As a leading player in the electronics
industry, Peter and the Panasonic team believe it is
“our duty to ensure a sustainable future.” The firm has
pledged to reduce its CO2 emissions
by 15 per cent and double the
sales of its environmentally
conscious products in the
region by 2013. But how
many other electronics firms
will follow in Panasonic’s
wild footsteps?

90 gulfbusiness April 2011

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