Qatar’s moratorium on natural gas development in its massive North Field is expected to continue for some time, but the country will likely face headwinds when it looks to revive developments in the world’s third natural gas basin. CONTINUE READING

The UAE and Saudi Arabia are set to join their Gulf peer Qatar in participating in the shale oil and gas revolution unfolding in North America. CONTINUE READING

As Qatar gears up to award projects worth USD 34 billion this year, the country will need to ensure that it tackles three key risks, according to Standard Chartered Bank …. CONTINUE READING

Oil and gas exporters such as the UAE, Saudi Arabia, Qatar and Oman are succeeding in reversing the so-called “resource curse”, but they still have a long way to go before realizing their full potential. CONTINUE READING

Foter.com / CC BY-SA

Qatar Holding ‘s USD 100 million investment in embattled smartphone maker BlackBerry is a bold bet that is high-risk, but may also turn out to be high-reward. CONTINUE READING

VancityAllie / Foter.com / CC BY-NC-SA

Qatar and Morocco will be the fastest growing Middle East economies this year, but emerging market economies are facing the dual challenge of slow growth and tightening global liquidity, according to the International Monetary Fund’s latest report. CONTINUE READING

mikebaird / Foter / CC BY

By Elza S. Maalouf, Founder & President Integral Insights Consulting, Member of the Evolutionary Leaders Organization

Corporations, like cultures, cannot skip a development stage. Life conditions in the Middle East have remained at tribal levels with egocentric overtones, which have resulted today in the sweeping revolutions of the Arab Spring. Corporate cultures in the Arab world were no exception to these values. Today visionary leaders, men and women, are changing these patterns and investing in human capacities that will outlast the Age of Oil.I have been working with Middle Eastern corporations for over a decade as a consultant and advisor to business founders and CEOs. Over the years, I have seen corporate training seminars delivered by Western consultants and trainers with the same exact content as it was delivered in the West as if the region were an extension of Anglo-Saxon values that just needed to catch up.

Even the best theories from management science fall short on achieving the intended results if they are not tailored to the memetic contours of each culture. In contrast to this one-model-fits-all approach, our consultancy honors all cultures, value systems and levels of development in society, and takes into consideration the environment and habitat in which they operate.

Specifically, the framework I use originated from the emerging science of memetics based on the seminal work of Professor Clare Graves and his successor and colleague Dr. Don Beck. A meme is like a gene that contains units of cultural information. Memes form into general groupings such as politics, language, economics, religion, education, health care, architecture, etc .The natural organizing principle that brings these groupings together is called a value-system or vMEME.
Read More

By Rushdi Siddiqui, Global Head Of Islamic Finance at Thomson Reuters

The “Muslim travellers” is an important segment in the travel industry, however, not many hotel chains or destinations haven taken a serious look at their needs. So, many travellers have to manage their requirements while travelling or stick to familiar holiday destinations.

Now the media is full of reports on Muslim Travel market, as there are a host of destinations, hotel chains, tour operators etc., all targeting the billions of dollars of these travellers.
Read More

ia7mad / Foter / CC BY-NC-SA

For all its fiscal might and financial muscle, the Abu Dhabi economy hasn’t picked up spectacularly despite high oil prices. The Abu Dhabi Department of Economic Development estimates the emirate’s economy to post a 3.9% growth this year, which is subdued, compared to its Saudi and Qatari counterparts. CONTINUE READING

snarl / Foter / CC BY-NC-ND

Go with what you know - that seems to be Qatar’s motto as it unveils ambitious plans to dominate the global resources sector. READ MORE HERE

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

The Goal: The central issue is about the industry controlling its own destiny

“Behind every success is endeavour… behind endeavour, ability… behind ability, knowledge… behind knowledge, a seeker ….” Unknown.

As the blessed month of Ramadan arrives, here is my “seeking” list for Islamic finance. It’s not about another voice asking when the International Islamic Liquidity Management Corporation (IILM) will issue its first paper or disagreeing with CIMB Group CEO Datuk Seri Nazir Razak’s comment on “rolling back” government’s involvement in business, but more to do with controlling our own Islamic finance manifest destiny.
Read More

By Rushdi Siddiqui, Global Head Of Islamic Finance, Thomson Reuters
June 28, 2012

There were two important announcements last week concerning Islamic equity index:

1. Malaysia’s Securities Commission ‘…announced the adoption of a revised screening methodology to determine the Shariah-compliant status of listed companies …’
Read More

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

Islamic finance has reached it natural market share in certain markets according a recent A.T. Kearney report, hence, an early ‘amber colored flag alert’ on the need for international expansion.

Islamic finance needs to find an example of a model company, ideally from the Muslim world, which has become a global player based upon customer service, unique selling proposition, innovation, demand, and a charismatic leader.

Should it also look to the west, and examine the likes of Google, Apple, Coca Cola or Pepsi, ExxonMobil, etc.? Does it look at the management style of former GE Chairman Jack Welsh or the vision of the late Steve Jobs?
Read More

Qatar has ruled the liquefied natural gas (LNG) world for the past few years, but it will see the market flooded with new rivals eager to sign up Asian investors over the next five years, just when its own gas production lines goes flat. READ MORE HERE

Stuck in Customs / Foter

Here’s a list Qatar would not want to top: The World Wild Life Fund (WWF) has ranked Qatar as the country with the largest ecological footprint per capita in its latest report. The tiny country is joined by neighbours Kuwait and the United Arab Emirates as the three nations with the largest ecological footprint - far exceeding other countries. READ MORE HERE

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

To grow, Islamic banks must compete with conventional lenders

Dedicated Islamic banks are generally national in nature and in certain markets have reached their ‘natural market share’ for Islamic banking, according to an A.T. Kearney study.

A recent report by the consulting firm A.T. Kearney, The Future of Islamic Banking, and a Reuters article, ‘No windfall from Qatar ban on Islamic windows’, have generated much productive chatter globally.
Read More

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

Dear Dr. Ahmad Mohamed Ali, President, Islamic Development Bank (IDB) Group:

Asalaam Alaikum:

The Islamic finance world welcomes your comments on the ‘Mega’ Islamic Bank to effectively compete against well capitalized conventional financial institutions.

“…The ‘Mega Islamic Bank’ comes as an initiative of the Islamic Development Bank in its efforts to address the dearth of senior financiers, the absence of the Islamic tools of stock exchange and the absence of market liquidity between Islamic banks.”

However, $1 billion, with $500 million in paid capital by the three founders (IDB, Dallah Albaraka and Qatar Government), is smaller than three existing Islamic banks, which have never addressed themselves as ‘mega.’ The three include Saudi Arabia’s Al Rajhi, Qatar’s Mashraf Al Rayan and Kuwait’s Kuwait Finance House (KFH). Furthermore, it seems the ‘mega’ story may be incomplete without Malaysia’s participation.

Read More

With Gulf economies poised for growth on the back of strong macroeconomic policies, regional stock markets are also set for growth.

The two most liquid GCC markets - Dubai and Saudi Arabia - are both up well over 20% since the start of the year, with the Egyptian market also rising an astonishing 33%. READ MORE HERE

It will be no mean feat to outpace Qatar’s amazing GDP growth, but that’s exactly what Saudi Arabia is estimated to accomplish in 2012.
The tiny gas giant has been posting double-digit growths for the past six years, but Saudi Arabia, the region’s largest economy may eclipse the country this year, if current trends continue. READ MORE HERE

An OECD study shows countries with greater income from natural resources tend to be socially less developed. Which perhaps explains why Saudi, Qatari and Kuwaiti students fare far worse then Lebanese and Taiwanese students. READ MORE HERE

March 14, 2012

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

Provocative statements are commonplace in the world of politics, academia, business and finance. They serve a ‘perception of purpose’, from distraction to direction and denial to dissatisfaction.

Put differently, such comments are viewed as ‘info-tainment’ to stand out in a competitive market environment.
Read More

By Rushdi Siddiqui, Global Head of Islamic Finance

NEED FOR CONTROL ROOM: The industry has alphabet bodies that deal with various issues but when it comes to public relations and marketing, there seems to be a gaping hole that is getting larger

Is there a media and public relations (PR) “control room” for Islamic finance that educates, creates awareness, undertakes damage control, etc, so that the industry is “conventionally efficient” media-savvy?

Some recent headlines, by-lined articles, blogs and press releases from Islamic finance provide the answer:

* Is Islamic Finance a Failure? Reuters (Guest Columnist)

* KFH: Banking Products that Cement Value of Savings in Society, press release

* Islamic Banks Misleading: Clients Emirates 24/7 (Dubai, UAE)

* Reporters Notebook: The Ethical Aspects of Islamic Banks, www.greenprophet.com

* Most Trusted Middle East Banks, www.Alifarabia.com

* Questionable Islamic Banking Principles, www.freemalaysiatoday.com

* Shining Star of the Middle East, Financial News

* The Trillion Dollar Hoax, The Islamic Globe

* The Lessons from the Goldman Sachs Proposed US$2 Billion Sukuk Saga, Arab News

* Mega Islamic Bank Plans Cancelled, Gulf Daily News (Bahrain).

Let’s put aside those writers seeking publicity, cheerleaders of the industry, the anti-syariah movement and the well-meaning purest, and those who, unfortunately, have had a bad experience, from inappropriate products to fraud to customer service, in Islamic finance. The truth about Islamic finance is somewhere between “today’s offering and where we eventually want it to be tomorrow”.

The continued “conflicting” headlines should be the “cold water” wake-up call for the industry on two fronts:

ADDRESSING the substance, over form, of the Islamic finance, and;

CONVEYING its message, as the perception of the industry is not aligned to the objectives of movement, including raising/writing comments after “unbalanced, out-of-context, exaggerated, or untrue” articles in the media circles.

Industry body

Usually, industries, from finance and healthcare to technology, have financed a designated company/industry body to educate, lobby, promote to new customers and market, undertake damage control, and so on. Their broad message is supplemented and complimented by local institutions with customised local message.

For example, in many of non-Muslim countries with an established Muslim population, there are Muslim organisations, like Council of American Islamic Relations in the US or Muslim Council of Britain and so on, that, in effect, act as the “PR” arm for “righting wrongs, damage control, or addressing media/political errors of omission and commission”.

In Islamic finance, we have alphabet industry bodies: for accounting and auditing (Bahrain-based AAOIFI), for prudential regulations and governance (Malaysia-based IFSB), for Islamic capital and money market (Bahrain-based IIFM), etc.

Although, they have some common shareholders, let’s put aside the inability of these industry bodies to host one Islamic finance event that is supported by all of them. Let’s put aside lack of speaker invitation of one industry body to the head of its sister industry body for a presentation slot.

Notwithstanding present “turf” challenges, these industry bodies have done a commendable job of raising awareness and educating the wholesale stakeholders of the technical aspects of Islamic finance, in Muslim and non-Muslim countries, on standards, governance, and regulations. However, when it comes to the public relations and marketing of Islamic financial institutions or even damage control, there is a gaping hole and it is getting larger.

In fairness to the above-mentioned industry bodies, they have resource constraints, from manpower to finance, and, furthermore, expanding their mandate to include marketing and public relations for a geographically- dispersed and fragmented industry at various stages of development is unreasonable. However, something more needs to be done as Islamic finance is only strong as the weakest link.

The continued negative headlines will not go away even if we continue to ignore them or convince ourselves that it’s the growing pains of an emerging industry. They should be seen as the tip of the iceberg of issues and feedback on the industry’s perception/message.

Funding of body

The time has arrived for the majority to conclude there is need for an industry body that is tasked with public relations and marketing of Islamic finance at, say, the “wholesale level” - governments, regulators, financial institutions, law firms, western media, and so on. It allows for a universal message, a necessary pre-requisite to achieve harmonisation-cum-standardisation, that builds the foundation for local Islamic financial institutions to customise and add local content.

After determining a need for an industry body to promote and educate Islamic finance, the funding question must be addressed. Fortunately, the experience of AAOFI, IFSB, IIFM, etc, suggests the stakeholders could include the Islamic Development Bank (IDB), Islamic financial institutions (possibly one from every country that has declared itself an Islamic finance hub), forward-looking governments like Malaysia, the United Arab Emirates, and possibly the existing industry bodies (to include their technical message).

One of the lessons learned from the existing industry bodies is the need for adequate capitalisation and annual budget (adjusted for demand). It makes no sense to provide a shoestring budget when the objectives are global and the awareness and education is on-going and expanding.

Location of industry body

One of the takeaways about an industry body’s location is that it raises the profile of the country and the country raises the profile of the industry body, as there is now a “go to” place on the global map. Thus, bodies like the AAOIFI, IIFM and IIRA have raised the profile of Bahrain, while the IFSB, ISRA, and INCIEF have raised that of Malaysia.

Therefore, Dubai (UAE), Qatar, Pakistan, Indonesia, Brunei or even London, Paris, or Luxembourg have an opportunity to host an industry body that promotes awareness and information about Islamic finance and shows their commitment to the industry. Furthermore, much like the phrase “think global, act local”, it makes to have geographically situated satellite offices to address local time zone challenges.

Mandates

Beyond awareness, education, damage control, etc, one of the areas that require immediate attention is a more robust investor relations depart of Islamic financial institution, including addressing media training for executives. The media, especially western, wants access to senior executives, which implies challenging questions, and, it is here that the industry can best utilise them to send its message to the masses globally.

Additional responsibilities could include establishing and hosting a Davos-type event, including the US$640 billion (RM1.9 trillion) halal industry, in Europe, the Gulf and Southeast Asia. Thus, not Islamic finance per se, but the link of Islamic finance and funding education, healthcare, infrastructure, know-ledge-based economy, etc.

Some examples where the proposed PR Islamic body could have provided guidance for clear, coherent and concise clarifications:

SCHOLARS (confusion as to their role in the West), purification and zakat (not funnelling money to financing extremists), money exchange places in Muslim countries are not Islamic financial institutions, etc.

COORDINATE with other industry bodies for job openings, direct inquiries to appropriate industry bodies and Islamic financial institutions (reduce information cost for existing/potential users)

PRODUCT launches, new bank/takaful launched, etc. I’m not convinced that a general or financial PR firm can provide the needed specialised message and follow-ups that a dedicated body can direct.

DAMAGE control includes recent media frenzy on Islamic banking in Nigeria, Goldman Sachs’ US$2 billion sukuk, sukuk defaults, Islamic funds closing, Islamic bank (Dubai Bank and Islamic Bank of Britain) rescue, etc.

BRANDING of Islamic finance. Has time arrived to survey the stakeholders on the naming? In Turkey, its called Participation Banking and it conveys the essence and objective of the movement and is less politically charged, especially if Islamic finance is for all mankind.

Continuing to call it “Islamic”, combined with marketing materials emphasising syariah board and adherence, may not convey its universality.

Many of these issues also go to trust and confidence of Islamic finance by depositors, investors, shareholders, etc.

Conclusion

Although Islamic finance is less than 40 years old, the time has arrived for the industry to have a dedicated well-financed body to send a coherent and consistent message about the industry. This is an investment and not a cost, and not having such a body is to have continued schizophrenia headlines and resulting systemic brand risk.

Rushdi Siddiqui is the global head of Islamic finance at Thomson Reuters

Which regional companies and countries stand to lose in the event that Iran closes the Strait of Hormuz? Ratings agency Standard & Poor’s takes a look. READ MORE HERE

Thirty-three Middle East banks are among 500 of the world’s most trusted banks, according to a new study. READ MORE HERE

Nobody can complain that Qatar does not look after its citizens. Or that its rulers are not leading the once-backwater of the region to unprecedented growth, almost defying the global economic downward trend.

As a recent IMF report noted, Qatar’s economy has grown sixfold in the past ten years alone, and the country is awash with cash, trade surpluses and foreign reserves. READ MORE HERE

In the eyes of the International Monetary Fund, the greatest risk facing Qatar is a worsening of global liquidity and financing conditions. Individual banks, especially those that rely on large wholesale funding might face liquidity pressures and either have to resort to the central bank for dollar funding or deleverage, warns the IMF, apart from in foreign reserves of the central bank and lower valuation of Qatar’s external assets portfolio. READ MORE HERE

Ellie Brewster /Foter

Booz & Company addresses ways in which the GCC’s private sector can address nationalization and unemploymentby hiring the region’s highly educated female population

Private-sectorcompanies in the Gulf CooperationCouncil (GCC) have an opportunity to address several pressing issues, includingnationalization imperatives and local unemployment, by attracting morenational women into their workforce. Booz& Company has developeda framework to help companies in this effort.

Looming Changes in the GCC Workforce

Private and semi-private companies inthe GCC are under enormous pressure to nationalize their workforce, owingto a combination of high regional unemployment and a currently outsizedproportion of expatriate workers in the region.

Thus far the talent pool of women employeesin the region remains largely untapped, due to social, occupational, andlegal challenges. Private and semi-private organizations in the GCC donot rely heavily on GCC nationals to fill their employment needs, and theyrely even less on women as a group.

GCC governments have taken a numberof steps to improve this situation, such as Saudi Arabia’s national policies,including a five-year plan, Human Resources Development Fund (HRDF) programs,and royal decrees, and the women’s leadership center that Qatar is establishing.

However, to achieve the goal of greateremployment among national women in the regional workforce, companies willneed to implement internal programs to recruit, develop, and retain womenemployees. This will require solving a number of social, occupational,and legal challenges, with roots in long-standing and sensitive culturalattitudes in the region.

“There are clear benefits to be claimed.The companies that take the lead in this issue will help address the GCC’sunemployment problem among nationals. They will also assume a key rolein shaping the future of women in the region,” said RamezShehadi, Partner with Booz & Company. “Mostsignificant, they will tap into a base of talented national women thatis well-educated and eager to join the workforce, giving these companies a long-term competitive edge.”

A Three-Part Framework for Change

Booz & Company has undertaken substantialresearch in this area, includinga comprehensive survey and client work. We have also developed a frameworkto address these issues, in order to help GCC companies more successfullyintroduce national women into their workforce in greater numbers.

Our framework consists of three elements:1) defining an overall corporate vision for employing women based on asolid case for change; 2) developing a talent management strategy and operatingmodel to source, train, promote, and retain women; and 3) implementinga change management strategy to engage with and secure the support of internaland external stakeholders.

1. Women’s Employment Vision

One thing is clear from the effortsof companies worldwide to attract and retain talented women: Implementingdiversity for diversity’s sake does not work. To begin successfully integrat­ingwomen into their workforce, GCC companies must have a senior champion whocan make a business case for the need to do so.

“Creatingsuch a business case is not without challenges. There is little in theway of objective, broad-based research that clearly establishes the importanceof integrating women into the workforce, and nonethat is specific to the region,” said Dr. Leila Hoteit, Principal withBooz & Company. “However,anecdotal evidence from a multitude of companies shows the value that astrong female talent base can engender. A business case could be basedon any of three elements: workforce,customers, or suppliers.”

Workforce: A dedicated effortto recruit and retain women does more than just fill talent gaps. A diverseworkforce leads to higher employee engagement across the board. More than100 studies have demonstrated the correlation between employee engagementand business performance: Engaged employees are far more productive andcommitted, and they are more likely to make progress toward company goals,as well as the goals of their own group

Customers: Companies in a wide variety of sectors will need to more effectively target women as this keydemographic’s spending power continues to grow.To do so, companies need to ensure not only that they have women on staffbut that women are in the right positions to enhance the company’s go-to-marketstrategy with their insights, such as R&D, product development, marketing, and sales.

Suppliers: Companies need womenin the right roles to raise awareness about potential new suppliers, usetheir networks to build these relationships, and maintain the relationshipsover the long term. One company found annual cost savings of $2 millionto $4 million when it focused on women-owned businesses by categorizingall third-party orders and enhancing the competitiveness of each category.

2. TalentManagement

The second element of the frameworkrequires developing a comprehensive approach to hire the most promisingwomen candidates, invest in developing their technical and soft skills,evaluate them objectively, and retain them.

Talent acquisition: Companiesshould apply a unified process for attracting qualified talent from allavailable sources. This includes hiring entry-level candidates directlyfrom the ranks of recent graduates of women’s colleges and vocationalinstitutes. Another key channel for young talent is to sponsor students.Still another source, particularly for experienced professionals and managers,is the region’s recruiting firms.

“Companiescan partner with leading technology training institutions to establisha pipeline of women professionals with specializedtechnical experience,” said Dr Kamal Tarazi, Principal with Booz &Company. “For example, the Womenin Technology (WIT) program, a collaboration between Microsoft and localwomen’s organizations, teaches computer skills to women in nine MiddleEast and North Africa countries. Since its launch in 2005, WIT has trainedmore than 3,500 women throughout the MENA region.”

The company should ensure the same clearobjectives and criteria are used in recruiting women as in its usual recruitingprocess, and avoid making subjective judgments about, for example, a femalecandidate’s age or number of children. It should also seek to have strongfemale representation in recruiting to project an image of a company thatfully embraces and values diversity.

Learning and development: Inaddition to recruiting and hiring female candidates, companies must implementa training program to develop women employees in technical areas and softskills. Companiesshould consider a mentorship program that pairs less experienced stafferswith more experienced women. In addition to serving as role models, thementors would offer junior women an opportunity to share their concernsand issues.

Performance management: To supportthe integration of women into the workforce, companies must establish anobjective system for evaluating their performance. This process needs tobe clearly communicated and strictly implemented to ensure fairness. Allscores should be objective and measurable, based on specific outcomes (suchas turnover and employee satisfaction in the HR function, or sales numbersfor the sales department), and the evaluation process should include multiplesources of input—e.g., managers, colleagues, and subordinates. Althoughthis is good practice for all employees, recent experience has shown thatit is difficult to implement when evaluating women employees in a male-dominatedenvironment. For example, in some job appraisals, women receive referencesto personality traits—they are “shy” or “emotional”—rather than specificdescriptions of behaviors or quantitative assessments of their job impact.At other times appraisals may reflect an inherent, though unconscious,bias regarding women employees’ long-term commitment to the company inthe context of family obligations.

Retention: Once the company hastaken these measures to recruit, hire, develop, and evaluate the womenin its workforce, it should devote equal effort to retaining women employeesand ensure that they stay professionally fulfilled and motivated. Thisis critical, given the scarcity of skilled resources in the market andthe investment that would be needed to hire and develop a new employee.We advocate a balance of traditional incentives and “pride builders,”or less quantifiable and concrete benefits.The first category, incentives, consistsof fairly traditional HR levers: rewards such as compensation and benefits,opportunities for career advancement, and a work–life balance that offerssuf­ficient flexibility to attend to personal obligations while also pursuinga career. The introduction of resources such as family-friendly policieswould go a long way in helping retain talent: For example, employees mayseek part-time work, or the opportunity to telecommute certain days orfor a finite period of time, as long as the job’s requirements allow forit.

3. ChangeManagement

“Becauseincreasing women’s par­ticipation is a complex initiative with potentialramifications for the entire organization, companies will require an extensivechange management strategy in order to succeed,”said Shehadi. “Atthe outset, all relevant stakeholders,both internal and external, mustunderstand the program and its objectives. This may require overcomingmisguided but still prevalent perceptions among some about the roles ofwomen in society, or their ability to succeed in the private-sector workplace.”

Because these perceptions can be stub­born,changing them within companies must start from the top. Companies mustline up support and commitment from the board and executive vice presidents(EVPs), who must lead by example. Senior management should actively monitorkey metrics through dashboards or score cards that track turnover, thenumber of women in senior positions, and other relevant indicators.

At lower levels, the company shouldidentify middle management champions for the program. These champions canbegin spreading awareness of the program in advance, along with motivatingtheir staff to embrace the change. They can overcome unforeseen obstaclesat that level—through a performance-driven approach—and identify andcommunicate challenges up the chain of command.

Finally, companies will need to adda diversity-management component to the slate of mandatory training requiredof all employees. It is not sufficient to simply prepare women to jointhe labor force; management must prepare the rest of the employees to makethe integration of women a company-wide success as well.

The entire company should build on smallsuccesses, potentially through recognition via in-house communicationssuch as internal magazines or newsletters, or through awards given to thedepartment that has the greatest proportion of women employees, or thelargest number of women in leadership roles.

“Introducing women into the GCC private-sectorworkforce will not be easy, and there is a risk of moving too fast. Eventhose companies that are most aggressively pursuing nationalization cannotsimply replace one skilled and experienced expat worker with one nationalwoman,” said Dr Hoteit. “In the longer term, this change is inevitable.Attitudes in the region are changing, and many companies are now activelyworking to define their strategic vision for how women will fit into theirworkforce. Women have the education and—more important—the desire toplay a more central role in the region’s labor market.”

Reaping the Rewards

The entrance of more women into theregional economy will serve as an economic multiplier, creating benefitsfor each nation as a whole.

“Booz & Company’s research onthe “Third Billion” — the billion women worldwide who are poised tohave an impact on the global economy as workers and consumers — showsthat these new engines of economic activity create vast markets and increasethe size and quality of the talent pool,” concluded Tarazi. “In periodsof relative prosperity, their aspirations and persistence are engines forgrowth. In slower periods, they represent pockets of economic activitythat ameliorate the impact of decline.”

For private and semi-private organizationsin the region, nationalization and regional unemployment provide an opportunityto tap an underused talent pool. Defining a strategic vision to betterintegrate women, developing a comprehensive talent strategy to do so, andcarefully managing the transition will be critical for companies that wantto capitalize on this opportunity. Companies that adopt an intelligentstrategy to manage this transition will gain a competitive edge, througha workforce that is more engaged and better reflects the GCC populationat large.

In the context of the region, the UAE and especially Abu Dhabi, was the proverbial safe haven along with Qatar.

While it was not a great year by any stretch of the imagination, the UAE looked good simply because others such as Egypt, Bahrain, Libya and Syria were imploding. READ MORE HERE

January 17, 2012

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

“The proper man understands equity, the small man profits.” Confucius.

The year 2011 was the year for [Malaysia] Shariah compliant index out-performance against all conventional developed and emerging market country indicies and almost all frontier countries.

The Islamic finance industry has not talked up the Islamic equity capital market story, as the Islamic debt capital market poster child, ‘Sukuk,’ has become the alter-ego of Islamic finance. But, does that amount to concentration brand and business risk for a $1 trillion, where Sukuk are, at best, 20% of Islamic finance?
Read More

January 15, 2012

A year after HSBC released its 2050 report which estimated that Egypt would surpass Saudi Arabia as the largest economy in the Middle East, the bank has dug deeper in its crystal ball-gazing research.

The first report limited its forecast to the world’s 30 largest economies by 2050 - but has now expanded it to 100 nations and includes more Middle East nations.
And like the first edition of the report, there are a few surprises. READ MORE HERE

January 2, 2012

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters 2011

“An optimist stays up until midnight to see the new year in. A pessimist stays up to make sure the old year leaves.”Bill Vaughn.

Islamic finance is staying up for new year for …….

The survey format is straight forward, 16 questions with multiple answers.
Read More

The year 2011 has been extraordinary not just for the tectonic shift in the region’s political structures, but also the extraordinary pressures and opportunities faced by many regional economies.

With four dictators ousted - including one dead - many others were shaken to the core - the after shocks have reverberated throughout the region in 2011 and will no doubt be felt in 2012.

We identify 50 amazing statistics that highlight the remarkable year: READ MORE HERE

Kuwait-based KAMCO sheds light on the future economic outlook of the GCC based on 2011 and 2012 GDP growth expectations. In addition, the report incorporates growth analysis of consumer loans in Saudi Arabia, Qatar and Kuwait for 9M-11. GDP in Saudi Arabia, Qatar and Kuwait is expected to post growth rates for 2011 and 2012, by 29% and 7% in Saudi Arabia, 35% and 7% in Qatar, while Kuwait is expected post growth of 25% and 12%, respectively, supported by the growth in oil GDP.
Read More

Will 2012 be the year of “come together” consolidation for Islamic banks?

Size is often the justification for achieving economies of scale, used to access deals for league table prominence, used as a buffer in a challenging environment, used as defensive measure to ward off unwanted suitors, and so on.

Islamic banks are very much like Islamic (equity) funds. There are hundreds of Islamic banks and funds, but the paid-up capital and assets under management, respectively, is too small to be meaningful. Yet, both, more so Islamic banks, present a unique situation (of an industry risk) of “too small to fail”.

Read More

In the first part of the 2012 regional economic prospects, a look at oil-rich countries’ efforts to manage their citizens’ expectations, economic slowdown and regional and domestic political upheavals in the New Year.

The year 2011 was probably the most unexpected for the Middle East in decades with not just the magnitude of changes unravelling in the region, but also the sheer number of those cataclysmic changes. READ MORE HERE

Excerpt from Citibank report:

In October this year, $16.9bn of projects were awarded across MENA. On a cumulative basis, just over $82bn of projects have been awarded across the region in the year to end October. This compares favourably with FY10 when almost $80bn of projects were awarded. Saudi Arabia is the main driving force accounting for a third of the 2011 total. Iraq accounts for 20%.The UAE has awarded almost $14bn in the year to end October, almost $20bn below FY10.
Read More

EFG-Hermes believes an MSCI upgrade of UAE and Qatar exchanges to emerging market status is unlikely but not impossible. If the upgrade does happen, both markets could tap into an estimated $280Bn of emerging market funds.
The markets have been buoyant recently in anticipation that MSCI will upgrade both UAE and Qatar to emerging market status on December 14. READ MORE HERE

• 25 Rapid Growth Markets (RGMs) to grow by an average of 6.2% this year and by 5.9% in 2012, compared with 1.6% growth for the Eurozone this year falling to 0.6% next year.

• Qatar had the highest nominal GDP (US$) per capita at PPP in 2010 among the 25 RGMs and has also been the fastest growing economy over the last decade, with an average growth of 13%.

The dynamics of the global economy have changed with a new set of fast-growing markets challenging the position of the established advanced economies. The rapid growth markets (RGMs) are expected to grow collectively by 6.2% this year, almost four times more than the anemic growth expected in the Eurozone according to Ernst & Young’s new quarterly Rapid Growth Markets Forecast (RGMF).
Read More

Continuous effort - not strength or intelligence - is the key to unlocking our potential. - Winston Churchill

How many Malaysian Islamic bankers work in senior positions at Islamic financial institutions in the GCC (Gulf Cooperation Council), Pakistan and the UK? Conversely, how many non-Malaysians work in senior positions at Malaysian Islamic financial institutions?

Does the training and experience in Malaysia for Islamic finance somehow imply that it’s too Malaysia-centric (Shafi school) for GCC (Hanbali, Hanafi, Jafri schools) Islamic financial institutions? Does it somehow imply that there needs to be a “retraining” of Malaysian Islamic bankers to the GCC “way” of Islamic banking, finance and takaful?
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Standard & Poor’s Ratings Services said today that issuers in the Gulf Cooperation Council (GCC) countries face rising refinancing risks over the next three years because the amount of debt maturing in the region will increase significantly between 2012-2014.

Industry experts estimate bonds and sukuk of about $25 billion will mature in 2012, rising to about $35 billion in 2014. Standard & Poor’s believes the region is therefore entering a challenging loan and bond refinancing cycle, especially given the ongoing volatility in capital markets and fears that slowing global economic growth is already curbing corporate debt issuance and heightening refinancing risk in the region.
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The regional stock markets may be sending negative signals, but the Middle East listed companies are expected to see a 38% rise in earnings in the third compared to the same period last year, according to EFG-Hermes estimates.

“Materials sector earnings are driven by higher oil prices, lower provisioning and loan growth will likely drive earnings growth for the Saudi banks, and the UAE’s real estate sector will likely see a Y-o-Y turnaround after heavy losses from UP and Aldar in 2010, in our view. (Excluding UP and Aldar reduces earnings growth expectations to 16.8% Y-o-Y and 2.6% Q-o-Q). We believe Q-o-Q growth will be driven by Emaar and UP showing strong earnings growth, seasonally high earnings from SEC and Air Arabia due to the summer period, and OCI, which should benefit from strong fertiliser prices,” notes EFG.

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Qatar leaves regional competitors in the dust, rising as one of the most competitive economy in the world. But Arab Spring unkind to competitiveness of liberated Egyptian and Tunisian economies.

Another survey, another glowing review of Qatar. The World Economic Forum’s Global Competitiveness Index 2011-12 finds the gas-rich state the region’s most competitive and emerging as the 14^th most business-friendly country in the world. READ MORE HERE

Gulf states have pledged $150-billion in response to the regional unrest, according to Bank of America Merrill Lynch estimates. But it may not be enough. READ MORE HERE

As the global economy lurches from one crisis to the next, we look at the prospects for the regional economies in troubling global conditions which could slash domestic growth.

Another quarter, another headache. Gulf governments have suffered a tumultuous first two quarters of the year and were hoping for some semblance of sanity in the third quarter. At the very least, regional governments were hoping that tragic developments within the Middle East had remained isolated - Syria, Yemen and Libya - leaving other countries in relative safety and peace.
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MSCI has kept the door ajar for both Qatar and the UAE, but EFG-Hermes and Citibank analysts disagree whether either market will be elevated come December. Meanwhile, emerging market funds are already swirling around.

The MSCI left the door open for UAE and Qatar to allow them entry into the exclusive emerging markets club. The influential index provider that is used by many funds and investors as a benchmark, said that while both countries did not make the cut this time, they will extend their review till December. READ MORE HERE

Qatar’s investment over the next five years will be a staggering $225 billion, but the country is still worried about low energy prices during the period.

As a roadmap for its social and economic aspirations, you can’t really fault Qatar’s National Development Strategy 2011-2016 report. It is inspirational, comprehensive and packed with good intentions, as all such reports should.

For an economy that is growing at a rate that would put China to shame, it’s national development strategy (NDS) is also lacking in a fair bit of pride and glory - if anything, there are parts of the report that are a bit hesitant and self-doubting. The missing vainglory is a contrast from some of the other national development strategies that one has seen over the years - and that is not a bad thing. It’s almost endearing. Read More

Chevron is the world’s fastest growing liquefied natural gas (LNG) producer, beating Qatar Petroleum, according to Evaluate Energy data. Between 2010 and 2020, the U.S. energy giant will add 17 million tonnes, beating Qatar Petroleum’s 11.5 million tonnes during the same year.

The GCC has around $40bn of debt coming due each year over the next five years, says Standard Chartered Bank (SCB). Plus a chart that neatly shows SCB’s forecasts returns on each country’s bonds. Read More Here

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Dubai retains its position as the regional financial centre, but Doha is fast catching up as an alternative centre, according to the latest survey of global financial service managers. But Both are losing to Asian rivals. Read More

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The Middle East crisis will see capital flowing out of the region, especially the vulnerable financial hub of Bahrain, according to a poll.

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As Japan’s nuclear meltdown puts the brakes on yet another power source, the world is looking at ME energy to fill the gap. Luckily, there is plenty coming on line, despite the region’s shot-term problems. Read More

Read why EFG-Hermes is worried about Omani and Bahraini growth. And the bank’s insightful regional heat map that neatly highlights problem areas. Read the full story here

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Just when analysts were giving up on a truly unified GCC, the six states have closed ranks with the unmistakable presence of Saudi tanks and soldiers on Bahraini soil. Read More
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Erste Research Group’s excellent report on oil crunches some fascinating data on oil and its current short-term and long-term influence on the global economy. We picked ten charts to highlights some key findings from the report.
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IMF Brief:
Qatar has weathered the global financial crisis exceptionally well, reflecting the quick and strong policy response by the authorities. The sizeable enhancement of liquefied natural gas (LNG) capacity, large government support to the banking system, and increase in public spending helped sustain high growth rates through the global crisis.
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As events in Egypt change faster than you can update them on Twitter or Facebook, regional authorities are looking at the short-term and long-term impact of the crisis on their own economies. Read More

Oil prices are poised to hit the magical $100 per barrel once again and economists, analysts have taken out the proverbial calculators to see what it means for oil-based economies of the Middle East. Read More