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Real estate

Bahrain – Calm oasis

by Executive Staff December 3, 2008
written by Executive Staff

Bahrain, the smallest territory and population in the MENA region and the smallest economy in the GCC, is currently continuing its real estate development as it is trying to diversify its economy away from oil and gas, which still represent around 77% of revenues. Faced by the same challenges as other countries in the region, ranging from the cost of construction to the liquidity crunch, it seems that Bahrain is better equipped to handle the global financial crisis since its demand is mainly local and its market is comparatively small.

Since Bahrain is the first to be expected to run out of oil, it started to diversify its economy long before its neighbors, focusing on tourism, real estate and finance. In 1999, legislation was passed allowing land ownership by GCC nationals. In 2001, a new decree was issued, which came into force in 2003, stating that non-Bahrainis, GCC nationals and others, may own land in Bahrain for both personal and business use. Around the capital, the areas that are open for freehold ownership are Ahmed Al-Fateh, Hoora, Bu Ghazal, Seef and Northern Manama, including the diplomatic area.

Market overview
Over the past three years, property prices have been growing by 10-15% per annum with a 20% increase for some projects from the third quarter in 2007 to the second quarter in 2008. Nonetheless, price increases in some high- end districts were even more substantial. In Durrat Al Bahrain, the price of a 500 square meter villa doubled to around $800,000. Increases for new rents in residential areas, however, slowed to 30% from 40% in 2007. Amin Al Arrayed, general manager of the real estate company First Bahrain, explained that the country’s real estate market is driven by regional demand and not global demand like in Dubai, and thus is less inflationary. He added that, “marked increase in prices of all factors of development and a shortage in key building materials… created significant problems for developers who were faced with ever increasing cost.” The cost of materials rose 30% in 2007 and a further 50% in the first half of 2008.
As is the case throughout the region, real estate demand in Bahrain outweighs supply. Oxford Business Group (OBG) reported that 40,000 social housing units are currently needed, with demand growing in leaps and bounds. According to Zawya, at least 60,000 residential units will be delivered in the next eight years and a balance between supply and demand should come in 2012. Additionally, the Bahraini real estate advisory DTZ said that more than 1 million square meters of office space should be available across the kingdom by 2012, representing a 100% increase in the space currently available.
According to Global Property Guide, currently real estate projects worth $9 billion are under development. The most important developments that will be completed in the next couple of years are Durrat Al Bahrain, Bahrain Bay, Diyar Al Muharraw, Reef Island and Bahrain Investment Wharf. New towers are also being constructed, like the Abraj Al Lulu, Infinity Tower and Era Tower. Al Arrayed explained that, “a key trend has been the rise of mixed- use developments that provide integrated and holistic lifestyle solutions, [as well as] the move towards sustainable development and smart eco-friendly solutions.”
Moreover, Bahrain announced plans for major expansion of its international airport that will have a price tag of nearly $1 billion. The plan is to concentrate on expanding terminal capacity to meet the country’s air transportation requirements for the next two decades.

World financial crisis
When the global financial crisis hit the market, there was a slowdown in demand for real estate, as many of Bahrain’s residents are waiting to see what will happen next. “The financial crisis has impacted the real estate sector directly as a result of a reduction in the liquidity that is required to fund most of the development projects,” said Al Arrayed. He also explained that, as in other countries, speculators were most affected. “In particular, the high-end freehold sector that has seen the highest level of appreciation in recent years has been the hardest hit, as over leveraged speculative investors are unable to secure financing required to pay their developers… the current crisis will test those business models that have focused on investment driven developments characterized by short-term returns.” He expects many of these speculative developments “will have difficulty obtaining the necessary funds to proceed.”
R. Lakshmanan, CEO of Sakana Holistic Housing Solutions, told Gulf Daily News that the sales in property might have slowed down, but the rental market is still very strong. Additionally, prices are not falling and people should start buying again in the next few months. He added that Bahrain is better placed to weather the correction than other countries in the region.

December 3, 2008 0 comments
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Economy & Finance

Tunisia – Market maneuvering

by Executive Staff December 3, 2008
written by Executive Staff

Tunisia’s Bourse des Valeurs Mobilieres (BVMT) is expected to remain relatively immune to the international financial crisis in 2009. Mokdadi Hamadi, CEO of UBCI Finance, said that in light of the daily pressure investors apply to stock exchange prices, directors of traded companies should turn to new opportunities, and legally, intervention may take two forms. First, companies could buy back their own stocks, injecting liquidity into the market. This may ease the volatility of securities and reassure shareholders, in conformity with the article 72/73 of the Public Call for Savings.

The article stipulates that “the interventions of a company on its own securities must have the objective, in the interest of its shareholders, of either insuring liquidity in the market of the security concerned, or reducing the excessive fluctuations of its market price.”
Second, an intermediary in the bourse could close a contract of liquidity for a determined period.
At the end of September 2008, the rate of foreign engagement stood at 25% of bourse capitalization. Twenty- two percent of foreign shareholding is estimated to correspond to a stable and sustainable participation, acquired in a partnership framework in order to occupy a strategic position, in companies and also in Tunisian banks. In August, trading on the BVMT saw 3% of foreign holdings ceded so that foreign holding in the stock market capitalization shrank from 28% end July to 25% end August 2008.
Tunisian regulations in exchange matters are considered very well structured at the level of portfolio investment. Khaleb Zribi, managing director of CGF, a subsidiary of GAT, explained that the indicators reflect the good health of the country’s economy, which presents a safe, favorable and secure platform for investing in the BVMT.
Ninety percent of Tunisia’s entrepreneurial fabric consists of undercapitalized small and medium sized enterprises (SMEs) that resort to banking over- indebtedness in order to finance their activities in the short-term and their development projects in the medium and long-term. This not only burdens their financial load, but it also generates a higher rate of questionable debts in the country’s banking system. In the end, competitiveness of Tunisian export products could be affected, which is why the state has set up several instruments aiming to help the financial market by alleviating some of the indebtedness to banks, while at the same time favoring the reinforcement of businesses’ equity capital by opening their capital, Zribi said.
An enterprise traded on the bourse gains both in prestige and in recognition, which generally helps out the business’ image and market position. Introduction to the bourse also facilitates relations with social and administrative partners, as well as in the spheres of banking, finance and commerce. The stock market has generated more dynamism among enterprises and within the financial market, as means for potential growth are explored. Investors, however, are more likely to covet the short-term dividends, to the detriment of stable portfolios that perform in the long-term.
With 100 securities traded on the principal bourse and as many on the alternative market, Tunisia’s market shows signs of attaining the status of a major regional financial market over the next few years. The bourse has a structured and balanced listing system, while the exchange rate of securities listed fluctuates in ranges limited by statistical thresholds, from 3% to a maximum of 6.09%, so falls are always moderate. Also, the trading session has been extended to a duration of five hours and 10 minutes — 9 a.m. to 2:10 p.m. — offering investors new opportunities for arbitrage and positioning. The bourse is also enriched by improving financial establishments and a group of Tunisian enterprises that are growing more structured and better managed, in adherence with wider market norms.

December 3, 2008 0 comments
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By Invitation

Why the bailout should sink

by Ziad Ferzly December 3, 2008
written by Ziad Ferzly

If you spend your time listening to Henry Paulson, treasury secretary of the United States, and Ben Bernanke, chairman of the US Federal Reserve, you would think that there is no way around the bailout. You get to hear scattered reasons about how if there was no bailout, the entire world would collapse. I am not only talking about the $700 billion, but the $5 trillion that is being spent and pledged via different channels of the US government. A closer look at their actions shows that they have little clue about what they are doing or supposed to do. After the collapse of Bear Stearns, these two men had six months to deal with this disastrous problem, but they seemed to have been caught off-guard when it was Lehman’s turn. Of course, they did not start the whole problem, but they certainly have to deal with it.

Economics is supposed to make sense, but many people seem happy to suspend reason in order to believe things that are obviously not true. Thinking that signing a 30- year loan to a very expensive house that you cannot afford will make you rich is ridiculous. That did happen for a few years. Bubbles do grow, but what bubbles do best is burst. One cannot increase income without increasing output, and signing loan papers does not qualify as output. Now, the big banks are getting bailouts and other financial institutions are trying to become banks to qualify for a bailout. The car makers are next in line. Bad businesses are supposed to restructure, and possibly fail. Banks that lose tens of billions of dollars should not get more money. The stronger, better managed banks will take over the failing ones; life will go on. Of course, we will experience extremely difficult times, but the emerging banks will be more stable and better run. Now what you get are people who had nothing to do with the problem having to support those who squandered their money and investors’ money. So, instead of being allowed to fail, like governments do with any normal business, these unhealthy institutions are being artificially propped up.
What is the lesson for the people who lived within their means, saved and bought only what they can afford when the government tries to bail out those who bought houses they clearly could not afford, then refinanced their homes, taking money out to spend on vacations, new cars and flat screen TVs? They are suckers. They could have lived a very fancy life for many years, and then walk away from their mortgage obligations as most with negative home equity are doing. What is the lesson for the banks that did not engage in this mortgage madness when they see the government bailing out the banks who bet big using obscene amounts of leverage? The lesson is that they are stupid because they should have taken more risk, made totally reckless loans, paid their executives millions of dollars a year for a few years, and have the taxpayers foot the bill for their excesses.
But what about systemic risk? Isn’t it too great, you ask?! Well, what do you expect bankers to say when they go to the government asking for money: “Please pay my bonus and help me keep my job”? No. They say, “If you do not help us, the entire system will collapse.” Well, guess what, the system is collapsing. I am happy that my many banker friends get to keep their jobs for now, but I am talking about the entire economy here, not the fortunes of a few bankers. The failure of major banks would have had a drastic effect on the economy but in the end, it would have been less drastic than the outcome we are going to see. And the recovery, ultimately, would have been quicker than it will now be.
Major economies around the world have entered into a recession at the same time. This is really a unique time in history — a very difficult time for countries, companies and families. That said, this is also a time of great opportunities for those investors who are able to properly analyze what is going on, and decide where, how, when, and how much to invest in different assets.

Ziad Ferzly is managing director at Cedarwood Advisors, which provides strategic, financial and investment management services to companies, investment firms, institutions and governments around the globe.

December 3, 2008 0 comments
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Insurance

GCC & Levant – The fog of financial crisis

by Executive Staff December 2, 2008
written by Executive Staff

The long-term effects of the global financial crisis have already begun to take hold of the industry as lower demand for oil, resulting from the effects of a global financial crisis, has pulled the rug from under the inflated oil revenues the region was lavishing in only a few months ago — albeit with double-digit inflation. Oil-rich governments do have a certain amount of financial cushion hoarded in their sovereign wealth funds, but individual disposable income will suffer as a result of lower cash flow in the region. Oil-poor nations will also be directly affected by less disposable income in places like the GCC, as their residents will be less able to send remittances to countries such as Lebanon, where remittances constitute around 25% of GDP. The decrease in regional disposable income will prove another substantial hurdle for a regional insurance industry already dealing with low demand and penetration.

For an industry that depends heavily on investment revenues, it comes as no surprise that Return on Investments (ROIs) have suffered greatly as a direct result of the global financial crisis. “Some of the largest players’ 2008 Q3 year-on-year income came down by 70% or more,” said Thomas Schellen, publishing editor at Zawya Dow Jones. Previous statements touting the region’s relative immunity to the effects of the financial crisis have proved to be nothing more than wishful thinking, as the Middle East’s equity markets have tumbled subsequent to the collapse of Lehman Brothers, exacerbating an already unstable market environment. As Executive went to press, the Tadawul, the largest Arab bourse by capitalization ($296 billion), had lost half its value in 2008. Other regional equity markets have followed suit creating a situation where the regional insurance industry will be hard pressed to find lucrative investment opportunities to prop up their recent profit losses in 2009. “The whole investment philosophy is changing […] what we see now is that whatever diversification you do or assets you acquire, everything is going down,” explained Farid Chedid, managing director at Chedid Re.

The bottom line dropping out
The perilous financial environment prevailing today has undoubtedly prompted regional insurers to shift their focus from investment income to technical underwriting, but they will be unable to completely retrench from the investment side of the industry, as “there will be no escape from their [insurer’s] financial dependency [and] this will affect the bottom line of insurers very directly,” Schellen said. Thus, all regional insurance companies can do to shield themselves somewhat from the effects of the global financial crisis is to change their bullish investment strategy to one that mitigates risk and, where possible, pulls out completely. “The average rate of investment income will drop heavily and become very conservative,” said Elie Nasnas, director general of AXA Middle East. According to Michael Bitzer, CEO of Daman, “People will start to reevaluate how they invest for retirement. In the past they were investing in real estate and stock markets here and in their own countries, and now I think that they will be looking for a more stable form of investment and return so this might spur more demand for such products.” Bitzer explained that risky investment products will also make up much less of a proportion of insurers portfolios as customers are less willing to embrace risks under the current financial circumstances.
Furthermore, the exposure of the American Insurance Group (AIG) to subprime losses has tarnished the image of insurance agencies in the public consciousness in the West but has yet to significantly affect the regional insurance environment. “People do not realize that this might affect their local insurer,” Bitzer said. “I think that the majority of our clients are not educated enough to understand that even AIG has a problem and maybe they should check with their own insurer.” Moreover, there is a perceived notion that the losses at AIG have aided many of their competitors in the region. “The troubles at AIG have helped their competitors; there is no doubt about that,” said Chedid. However, if the financial crisis continues to affect AIG the outlook for many regional insurance markets does not look promising, as “there are territories where if, God forbid, AIG falls you will have a crisis, like Lebanon, where their market share is huge and this would become a social problem,” Chedid concluded.
Both AIG and Alico Lebanon (a subsidiary of AIG) declined to be interviewed for this article. However, Osama Abdeen, executive vice president of AIG MEMSA released a statement to Executive saying, “AIG’s insurance companies remain financially healthy and are meeting all policyholder obligations. Insurance is a regulated business. Regulators ensure that each AIG member insurance company has adequate assets to back each policy and meet all policyholder obligations. Policyholders are protected and their policies are safe.”

Losses? What losses?
The unwillingness to divulge information to the public and press about profits and losses during a global financial meltdown is suspicious, as well as indicative, of a general industry slowdown and a loss of profit growth. “Numerous companies in the GCC have put off their announcements of their 3rd quarter results as far back as they can, to as much as 45 days, rather than 10 or 20 days” said Schellen. “This is an indicator that they are not really happy about what they will have to say.”
The lack of transparency in an industry that operates using reserves from their clients to attain ROIs seems contradictory to the interests of the industry as a whole. “The success of the insurance industry is linked to its transparency,” Chedid said. “There is definitely a need for better regulation and automatically more access to information.”
Countries like Qatar, Jordan and the UAE increased their transparency rating in 2008 according to Transparency International (TI), the global organization that monitors transparency and corruption. This, however, is not indicative of wider regional reform and the effects of the sector’s opaqueness are being felt in the regional insurance industry.
“One indicator is that there are laggards currently in announcing quarterly results,” said Schellen. “It took a lot of convincing in order for companies to tell us their breakdown figures in terms of the real benchmarks, like how much revenue comes from underwriting and how much comes from investment. In some countries, like the UAE, they won’t do it by line of business; they will give us technical results but will not announce them for each line of business,” he explained. In Lebanon this trend is proving to be a huge impediment to the growth of the local market, as current legislation is deemed inadequate and government is uncooperative in providing information to local insurers.
“Legislation only goes so far as to require companies to publish their financial statements,” said Nasnas. “We used to compile a report for the Lebanese market, but this year we still have not gotten the consolidated figures from the Ministry of Economics for us to carry on in making the report. Many reinsurers and insurers, both regional and international, as well as many international groups are asking for the figures from Lebanon for 2007 and we don’t have them.”
With the need for growth potential as high as ever, one can only hope that governments increase their efforts to increase transparency in the region for the good of the insurance industry and us all.

Propping up the industry
In times of crisis, the need to stay ahead of the competition is even more pertinent to a company’s operations and the insurance industry is no different. “Modernization is a necessity for local companies to be able to survive if we have an economic downturn in the region,” said Chedid.
To stay ahead, many regional organizations are making blanket investments in the modernization of business sectors and processes. One of the main areas in which the regional insurance industry is undergoing an overhaul is in the IT sector.
“Any company that wants to be significant has to beef up their IT and bring it up to global standards — this started in 2008 and will definitely continue in 2009,” Bitzer asserted. “Companies are focusing more on this, especially regional companies, because when you are of a certain size you cannot operate without a very efficient IT system,” added Nasnas.
Another area of the industry where companies are suffering is in the lack of adequate human resources for regional markets to accommodate the needs of the regional insurance industry, which is “an issue weighing heavily on the back of insurance companies in the region,” according to Schellen. Today, except for Lebanon, Egypt and Jordan, most of the insurance staffing is imported from outside the region. Furthermore, within the region itself local talent is being uprooted from countries in the region where insurance penetration and expertise is concentrated to the more lucrative areas in the region, inevitably causing a brain drain on many local markets. “In Lebanon we had a huge HR problem in 2008 because all the people we train get great offers from the Gulf and leave,” Nasnas said. Also, within the Gulf states many traditional staffers from the Indian subcontinent are moving back to their home countries, now that the opportunity cost of returning has decreased as a result of the emerging nature of these economies. The void created further exacerbates the human resource shortage in countries like Lebanon. “There is a need to replace [the workers from South Asia] and they are doing it with highly qualified human resources that mostly come from Lebanon,” Nasnas said.
At the end of the day, however, it is growth which will accommodate for any pitfalls in the insurance industry. The implications of lower oil prices will have their ramifications on growth capabilities across the region in 2009. However, the nature of the regional insurance environment has the ‘wiggle-room’, as well as the willpower to endure the effects of a global financial crisis and come out on the other end looking better off than when this whole mess began.

 

December 2, 2008 0 comments
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The Buzz

Surviving the downturn with intelligent branding

by Joe Ayoub December 1, 2008
written by Joe Ayoub

With the global financial downturn impacting on all markets, everyday business challenges have become compounded by reduced customer spending power, budget constraints and more cautious investor confidence. Companies may be turning to downsizing, or outsourcing to meet these challenges yet their biggest asset — their brand — cannot be approached in the same way. True, they can choose to stop spending on their brand, but in a time of crisis, there is actually no better time to leverage their brand assets to produce greater value.

Not just a name

First, it is important to understand what exactly is a brand. With branding still a fledgling topic in terms of awareness among local businesses, many mistakenly believe it means having a strong name in the market. Companies in Lebanon often think, “I have a famous name and it is selling well so this is a brand.” But often it’s selling because there is no real competition, or the product or service is cheap. When a serious competitor appears, they lose market share. In fact, a brand is a total experience: it’s the name plus the logo plus the brand promise and the delivery of that promise — brand equals trust.

Winners and losers

Competition can quickly sort the winning brands from the losers, but a crisis is another force to reckon with. In an economic downturn, consumer spending falls and purchasing shifts away from those brands which lack a strong bond with their customers. Many Gulf real estate developers have already learned this lesson, having spent lavishly on logos and communications but overlooking the need to bond with consumers. Thus, at the first sign of economic pressure, they began to suffer as investors sold their shares.

The new market reality is that consumers are not only spending less, they are  re-examining every single purchasing decision. One global trend also emerging in Lebanon is for strong brands to reach out to consumers in a way that takes advantage of the economic climate but avoids diluting the brand value. These brands are opening new stores, often referred to as outlets, where customers have access to discounted luxury goods. This drives sales for the known brand but by using an alternative name for the outlet, it avoids diminishing the perception of the brand.

This trend is a prime example of well-positioned brands creating value by driving demand. What all successful brands require is a deep understanding of brand mechanics, how their brands influence customer behavior and choice. Understanding the process of brand value creation is vital not only to drive demand but also to improve decision-making and budget spending.

Digging for value

A successful brand strategy consists of determining the brand essence — which is what the brand stands for — and the brand promise, which is what the customer expects to be delivered when they buy the product or service. The branding process starts with an internal brand audit. Working with the company’s management, the audit sets out to discover the core strengths and fundamentals of the brand, what makes it unique and how it reached its current status. Once this is identified, strategies are devised around the brand foundations.

The corporate strategy starts with a vision, a mission, a set of beliefs and the corporate attitude or personality of the company. Once these are set they should first be shared and believed by all employees working in the company so they can deliver in their daily work.

But branding doesn’t stop there; brand management is essential for it to be effective. If you have a car, you change the oil, maintain and clean it so that it always performs. A brand is the same; you manage its image, its performance, and you keep on improving the service or product formula, so that it consistently delivers on its promise.

Sending the right message

All of these are essential before a company should think about advertising. Companies suffering from ineffective advertising shouldn’t blame the ad agency but look internally and see if they have a clear message, brand promise, employee and customer satisfaction. Only once these are really well covered should they consider advertising.

So, in times of crisis, instead of focusing purely on where and how to cut costs, companies should use the period of uncertainty to look at their brand value and strategy, look internally and question everything they have been doing: At the brand level, are your customer touch points well structured? Are your employees motivated and happy? Do they believe in your brand and your company? Then look outward at the customer: are they having a positive experience with your brand? What should you improve?

With companies increasingly focused on the bottom line, the good news is that branding drives up the brand value; the more positive a connection with customers, the more customers will remain attached to the brand and be prepared to spend money on it. Many companies may be looking to outside investors to inject funds into their business, and with a good brand strategy, they can sell at a premium. Even for companies not looking for outside investment, branding done correctly is one way to ensure that once the crisis eases, not only will they still be standing but they will also be among the first to reap the rewards. 

JOE AYOUB is CEO of BrandCell

December 1, 2008 0 comments
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Society

Lebanon – Aging potential

by Brooke Anderson December 1, 2008
written by Brooke Anderson

A mid a global recession and a decline in wine consumption worldwide, Lebanese are raising their glasses as the country’s $25 million wine sector continues to grow at a steady pace. But experts say that despite Lebanon’s ideal climate for viticulture and a high level of expertise, the sector is still not living up to its potential.

 

World wine consumption dropped by 0.8 percent last year, according to the International Organization of Vine and Wine. But New World wine consumption has increased, and so has Lebanon’s, rising by 1.5 percent during the same period. 

“I think people are searching for a new taste. The wine consumer is always looking for a new product, and Lebanon is benefiting,” says Lebanese restaurant consultant Nagi Morkos. “Worldwide, there is a trend toward ethnic wine and food.”

With domestic consumption still relatively low, the country has relied on exports for most of its profits. Between 2002 and 2003, Lebanese wine exports doubled, and today they continue to increase. According to figures from the Lebanese customs, official wine exports totaled $13.1 million, up from $9.8 million in 2006. The United Kingdom, the biggest importer, bought $4.6 million worth of wine in 2008, compared with $2.6 million in 2006.

Even with the ongoing global recession, some vineyards are opening up to new markets, compensating for a drop in sales to their established buyers.

“We can’t say we’re not affected by the crisis,” says Emile Majdalani, marketing director at Kefraya, one of the country’s top producers. “But our brand is well established and we’re always working on long-term business plans. We’ve never opened so many markets as we have this year — a total of six new countries.”

Kefraya is now exporting to Australia, Benin, Cyprus, Nigeria, Mexico, Poland and Togo.

“We felt the crisis in certain countries, mainly the United States, Russia and Western Europe,” says Majdalani. “But our main markets are more or less compensated. We’ll close the year with no decrease in exports.”

As for wine sales in Lebanon, which has been relatively unscathed by the global financial crisis, he says business is booming, up 15 percent from last year.

From one resilient war-torn country to another

Last year saw a major increase in exports to Iraq, after five years of decline following the US-led invasion in 2003. In 2008, Iraq imported $158,000 worth of Lebanese wine, up from $88,000 in 2006.

“The Iraqi market fluctuates,” says Ramzi Ghosn, winemaker and co-owner of Massaya winery in the Bekaa Valley. “It could be an index of stability in Iraq, according to wine sales.”

Like Kefraya, Massaya is always looking at new markets and trying not to rely too heavily on its established ones.

Lebanese wine is a $25 million industry, large by Middle East standards but small compared with major wine-producing countries such as France, Italy and the US. Since 2005, the number of vineyards in Lebanon has doubled — from 15 to 30. Still, that’s small compared to neighboring Cyprus, whose vineyards number 60, and which attracts an international crowd to its annual wine festival in August.

Observers have pointed to Lebanon’s shift over the past several years from a whisky and arak society to a wine culture, and attribute this to the country’s relative stability over the past couple of years. An example of this is the opening of the first commercial winery in South Lebanon in 2003.

At Karam Winery in Jezzine, founder Habib Karam is basking in the relatively newfound popularity of Lebanese wine.

“Today, if you are a wine importer in America or the UK, it’s your responsibility to have Lebanese wine. Otherwise your list won’t be complete,” says Karam, who exports 50 percent of the 55,000 bottles he produces annually. “We are becoming like Chile and South Africa. Lebanese wines are in demand.”

At Nabise, a boutique winery in Mount Lebanon near Aley, which opened in 1999, the husband and wife co-owners Nazih and Mai Metni proudly note that their vineyard is in an area slowly recovering from sectarian conflict. Since they started a decade ago demand has steadily increased, although this year they admit they have been affected by the recession, as 70 percent of their exports go to the US. But Mai Metni is confident wine is a sustainable export, particularly as there has been a steady increase in foreign demand for their wine ever since they opened. “I’d like to see a hundred wineries open in Lebanon. We need exports for our economy to grow. What else are we going to export? Oil?”

New grapes for an expanding palate

But as demand grows, vineyards continue to open. In April, the Saade Group, a Beirut-based family business that primarily works in real estate and tourism, unveiled their new wine, Marsyas. In November, they will introduce their new Syrian wine Bargylus in the coastal province of Latakkia. Both wineries use their own grapes and are being bottled according to international standards. This is the first time that a company opens a winery in both Lebanon and Syria, another sign of Lebanon’s increased stability.

“Wine is good for Lebanon’s reputation,” says Sandro Saade of Saade Group. “The downside is that there needs to be more regulations that ensure quality.”

For now, most of Lebanon’s commercial wineries buy the majority of their grapes from farmers instead of using those grown at their vineyards.

“Lebanon’s wineries should start investing more in their own vineyards,” says Saade. “All of the wineries have done a good job so far. But we can take the wine-making sector to the next level.”

Despite the competition between Lebanon’s various wineries, Saade hopes to see more cooperation between them.

“What is a pity is that nobody is coordinating,” he says. “In Lebanon, we have everything on our side, and we’re not exploiting it. We need a common vision for the country.”

Unfortunately, right now, he says, “There’s a lack of strategic thinking in Lebanon for everything, including wine. There’s no Lebanese flag on Lebanese wine.”

But this lack of national unity might not be entirely the fault of Lebanon’s wineries.

In the summer of 2006, a National Institute of Wine was slated for opening but has been put on hold ever since the July 2006 war. The purpose of the institute, which would be a partnership between the ministry of agriculture and the private sector’s Union Viticole du Liban (UVL) would be to study wine and enforce regulations to protect the quality of Lebanese wine.

But as the project continues to get delayed, so wanes the momentum to get it started.

The UVL, which is supposed to represent all of Lebanon’s wine producers has only managed to attract 11 wineries, at least two of which have left the union over the past two years. They cite the group’s lack of vision and unity.

 Growing the fruits of success

However, despite the challenges facing Lebanon’s wine industry the ministry of agriculture sees it as a success story. “The wine industry is better than others in Lebanon. There’s competition,” says Mariam Eid, head of the agro-industry department at the ministry of agriculture. “You can’t compare it with olive oil, where they still use out-of-date technology. Wine has an important future in Lebanon. I hope the institute will open soon.”

Other people see the future of Lebanon’s wine industry in “enotourism.” Over the past year, Lebanon’s producers have stepped up their efforts to attract tourists to their vineyards, although it appears to be without coordination. The Saade Group is planning a hotel and wine museum in the Bekaa Valley, both slated to open in 2011. Kefraya says it is also opening a wine museum, which it expects to open next year. Carlos Adem, owner and founder of Chateau Faqra, a boutique winery in Kfardebian, is building a small hotel near his vineyard, which he plans to open next year.

This appears to fit well with a recent initiative by the Ministry of Tourism to promote rural Lebanon.

“Wine tourism is a part of agro-tourism in Lebanon,” says Nada Sardouk Ghandour, general director of the Ministry of Tourism. “When people see the wine label, they also see the name of the village.”

The home front first, then the world

But with all of the recent international recognition of Lebanese wine, it’s the Lebanese themselves who might be the ones preventing their local wines from receiving the domestic praise it deserves.

“In Lebanon there’s a snobbish attitude that everything imported is better,” says Ghosn of Massaya. “For them, it’s not always about pleasure. It’s about having French wine at the table so they can say, ‘I drink French wine.’”

Carlos Khachan, a Lebanese wine expert who leads tours of Lebanon’s vineyards with his group Club Grappe, agrees. He believes that if the Lebanese themselves have confidence in their own country’s products, non-Lebanese will follow suit.

“[The late industry minister] Pierre Gemayal told people to buy national products. If you love your country, you should consume its products,” Khachan says. “Why not apply that to wine?”

If Lebanon is to succeed in attracting more domestic consumption it will have to do so soon as tariffs on foreign wine have been decreasing, making the domestic market even more competitive. Several years ago, tax on foreign wine in Lebanon was 70 percent, but it is now only 40 percent.

“They keep on reducing taxation. In two years, there will be no duties [on foreign wine coming into Lebanon],” predicts Adem. “Lebanon will face more international competition. But this will make us produce more high-quality wine. With taxes getting lower on imported wine, we’ll have no choice.”

Still, to really get Lebanese wine on the map, it will take more than good quality, but also good name recognition. Michael Karam, author of the book “The Wines of Lebanon” agrees that “Lebanon will never make a genuine impact on the international wine market unless it embarks upon a proper generic campaign. By that I mean selling Lebanon — not Musar or Kefraya or Ksara or Massaya — as a wine producer.”

If Lebanon does not address this soon, he believes Lebanese wine “will remain nothing more than an ethnic curiosity, living on the reputation of Chateau Musar, which only appeals to a few devotees and does not represent the new generation of Lebanese wine. We are being left behind.”

He notes that even Brazil, which is not known as a wine-producing country, has a national wine campaign.

“We need to take on the world with our six million bottles, but if we don’t act soon we will have missed the boat,” says Karam.

December 1, 2008 0 comments
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Editorial

The silver lining of crisis

by Yasser Akkaoui December 1, 2008
written by Yasser Akkaoui

It’s that time of year again, but this time the party hats and horns are being distributed with a bit more caution than in previous years. Depending on who you listen to, the world is sinking into an economic crisis that could match the great depression that followed the Wall Street crash of 1929.

Certainly as I sit here in Dubai, writing this last editorial for 2008, the buzzword is restructuring. Every company is doing it in preparation for a 2009 that is yielding little in terms of economic and financial outlook. This was an economic crisis that began in America and it is the ripples of this crisis that are now beginning to lap the shores of the Arabian Gulf. Whether it becomes a tidal wave remains to be seen but cautious businessmen and financiers are battening down the hatches nonetheless.

This current restructuring will be accompanied by the inevitable layoffs that will see the departure of many skilled people from countries — Lebanon, Jordan and India — with a tradition of exporting human talent, depriving those economies of much needed remittances.

The potential upside to this rather dark development is that they will no doubt eventually be deployed to areas of fresh opportunity, such as Iraq, a nation that Executive has earmarked for considerable growth in 2009. It is a country rich with oil, minerals, agriculture and an educated workforce. It is high risk, but high-risk means high reward. As companies in the Gulf try to speculate by how much revenues will drop in 2009 – 10%, 20% or even 50% — such opportunities cannot be scoffed at.

Executive knows a bit about crises. It knows that publishing is not just about the good times when the ad revenues come in thick and fast. We stood by our readers during the 2006 Lebanon war and now we do not flinch in standing by our loyal subscribers across the Levant, the Gulf, Sudan and the Maghreb in this latest test of will and character.

Executive reiterates its commitment to the private sector, be it, banking, real estate development or trade and encourages the tireless pursuit of sustainable development. It is in these areas that we will channel our own energy; for the passion of those with the vision to achieve new goals will outlast even the gloomiest economic downturn.

Yasser Akkaoui Editor-in- chief

December 1, 2008 0 comments
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Off the people, buy the people

by Riad Al-Khouri December 1, 2008
written by Riad Al-Khouri

The past year appears to have been a good one for Jordan; was the same true regarding the well-being of average Jordanians? On the positive side, the country continues opening up to the rest of the region and the world economy. This can be felt in the boardrooms of Amman — though to a lesser extent on the street — and was confirmed by Jordan ranking a phenomenal ninth globally (and first among Arab states) in the Globalization Index for 2007, released last month. Developed by Foreign Policy magazine (published by the Carnegie Endowment for International Peace) in collaboration with consultants A.T. Kearney, the index measured economic, personal, technological, and political integration in 72 countries accounting for 97% of world gross domestic product and 88% of the earth‘s population. The index looks at 12 variables in four baskets: economic integration, personal contact, technological connectivity, and political engagement. Jordan led all of the index’s Arab countries, among which Morocco was 40th worldwide, Tunisia 46th, Saudi Arabia 52nd, Egypt 55th, and Algeria 70th.

In the political dimension, Jordan topped the countries covered by the index, and did well in the personal sphere and in economic integration. A look at Jordan’s foreign partnership agreements confirms the latter element. It is the only Arab country that simultaneously has free trade with the United States, a partnership accord with the European Union, a Qualifying Industrial Zone arrangement with Israel and the US, and membership of the Agadir agreement to facilitate trade among Arab states and the EU. These arrangements put Jordan firmly inside the Western economic and political sphere, but the kingdom also boasts a widening range of links with other countries, as well as membership in international bodies such as the World Trade Organization.

However, in the index’s technological dimension, the country ranked 50th, in stark contrast to other indicators. This combination of high marks in some areas and a dismal showing in another typifies the contradictions in Jordanian life today, which became even more apparent in 2007. For all its development, Jordan still has a way to go in assuring sustainable development, cutting unemployment, and reducing poverty. Given the continuing Jordanian real estate boom, the influx of Gulf and foreign capital into the country, and the presence in the kingdom of hundreds of thousands of Iraqis who are mainly not poor, Jordan may this year have evolved more than at any other time in the past half-century. Yet underneath, the country’s traditional core remains.

Among many other spheres, this traditionalism reflects in the country’s parliament as seen once again this year when Jordanians elected a new Chamber of Deputies, comprised of 110 members from 45 electoral districts. Although political parties and movements participated, they won few seats due to the country’s tribal fabric, and Jordan’s electoral law, which adopts the uninominal principle — voting for a single candidate only, rather than for a list, even when the electoral district (as most do) has more than one seat. Vote buying is also important and helps plutocrats win elections. (The government does not deny the existence of such a phenomenon, only saying that the media has exaggerated it.) As a result, the outcome of the November 2007 elections was similar to those of others since 1993, with tribal and traditional figures continuing to dominate, even as globalization sweeps through the country with greater force than ever.

Examples of this contradiction are apparent in Amman: In the midst of dramatic construction activity and demographic growth, the Jordanian capital is acquiring a modern veneer that hides its traditional fabric. Among many other features of globalization, branding is a feature of daily life in Amman, with massive advertising spending on new or existing brands. However, many of these products are imported, a phenomenon which, coupled with weak exports, exacerbates the country‘s chronic trade gap. In that respect, the latest figures available for the kingdom’s foreign trade are not encouraging. Although the value of exports increased by over 11% during the first nine months of the year compared to the same period in 2006, the much larger figure for imports rose close to 12%, resulting in an increase in the already yawning trade deficit by more than 12%.

In sum, given this volatile mixture of rapid but sometimes superficial development coupled with entrenched traditionalism and a shaky economic base, I predict that in 2008 many Jordanians will continue to feel left behind in the country’s surge toward globalization. The new government formed after the elections must keep the social lid on, especially with fuel price hikes coming from the elimination of subsidies. That will be tough going, but with the US and Israel underwriting the country’s stability, Jordan next year will probably stay the course. Anyway, watch this space.
 

 

December 1, 2008 0 comments
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Banking & Finance

Money Matters by BLOMINVEST Bank

by Executive Staff November 24, 2008
written by Executive Staff

Regional stock market indices

Regional currency rates

Plans for a railway project linking Gulf coast

Dubai, with 2 million inhabitants and the world’s highest rate of car ownership is expecting estimated 10 million inhabitants by the next generation. Accordingly, Dubai is planning a mass public transportation system. Projects like the Palm Jumeirah monorail and Dubai metro red line will be completed by 2009. Besides, it is not just Dubai but several other GCC countries that have plans worth $100 billion dedicated for railway projects. Moreover, a decree is expected to set up a Union Rail connecting all seven emirates of the UAE from Abu Dhabi to Fujairah. In addition, an approval on a feasibility study for the GCC railway has been granted and hopes are high that the plan will be approved by the next GCC summit. The GCC railway will connect the Gulf coast from Kuwait to Oman.

First cinema in Saudi Arabia

In the commemoration of Saudi Aramco’s 75th anniversary, the state oil firm plans to build a museum and a cultural center that will include Saudi Arabia’s first cinema. The King Abdulaziz Center for Knowledge and Culture is scheduled to open for the public in May 2012; it will cover an area of 65,000 square meters in the Dhahran area of the Eastern Province. There will be five main intercontinental buildings, the tallest of which will be 15 floors high. They will house exhibition halls, a museum, an auditorium, a theater, a mosque, a library and the cinema. The main auditorium will be able to sit 1,000 visitors, while the cinema will have a capacity of 320 viewers. The public library will hold 300,000 books, and the museum will host exhibitions of art and artifacts from Saudi Arabia, as well as international collections.

Libya begins to realize potential for brighter future

Even with the elimination of sanctions on Libya in 2003/04 by the US and the international community, plans to diversify the Libyan economy failed due to the bureaucratic inefficiencies that restricted the country’s economic development. Indeed, the economy remains heavily dependent on its hydrocarbon resources: oil revenues were estimated at $31.5 billion in 2006. But this strength in oil earnings has put the economy in a strong position; GDP more than doubled between 2003 and 2006 to reach $46 billion.

Libya, with only 25% of the country covered by exploration agreements, has the largest proven oil reserves in Africa with 41.5 billion barrels and the fourth highest gas reserves in Africa with 53 trillion cubic feet, behind Nigeria, Algeria and Egypt. However, in February 2007 influential political figures led by Saif al-Islam Ghaddafi, launched a major reform drive involving the privatization of the state enterprise, in addition to investing in real estate projects. In 2009, and for the 40th anniversary of the coup that brought Colonel Gaddafi to power, three new airports are being built that will handle 20, 5 and 3 million passengers a year, respectively. Moreover, Majid al-Futtaim Investments is spending $1.5 billion to develop a new central business district in the capital including three hotels, residential and retail units, office buildings and a 40-floor skyscraper.

November 24, 2008 0 comments
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AutomotiveSpecial Report

Positive social actors

by Executive Staff November 24, 2008
written by Executive Staff

Procter & Gamble

Eminently known as a global leader in fast moving consumer goods, Procter & Gamble (P&G) is setting the bar quite high for CSR initiatives in the GCC. According to Yassin Al-Attas, external relations general manager at P&G Gulf, “The way [P&G] looks at CSR in our region is very much linked to the overall definition of CSR. CSR is just one element of the sustainability strategy, which has five different components focusing on environmental protection, improvement of our products and operations, engaging our employees, having an active social responsibility program that is very much linked to the global cause of the company.” Simultaneously, Al-Attas explained, “we aim to target the unique cases and specific needs of the communities and the market[s] that we are in today.” Originating from their global strategy, CSR “has filtered through to the unique programs” that it has created in the Arabian Peninsula. P&G’s international corporate cause is the idea of ‘LLT’ — learn, live and thrive — with the chief aim of promoting health, hygiene, awareness and supporting children aged 0-13 years in order to provide better chances to live and healthier lives to thrive in. Throughout all of its programs across the region, P&G reaches “more than half a million boys and girls on a yearly basis and gives them educational material [while] providing them with samples of [P&G] products to try and experience,” stated Al-Attas. For example, in Saudi Arabia it partnered with the Ministry of Education to set up a science and innovation association coined the ‘Tide Club’. This institution, Al-Attas expounded, “seeks to promote a common goal — spreading knowledge and awareness of science to the boys and girls in Saudi Arabia.” In the general manager’s words, the idea of the Tide Club is “to equip and operate scientific laboratories in biology, physics, chemistry, computer, English language, and auto-robots. This will enable students in their extra-curricular activities and also during their academic year to go through programs and training, which will help them engage more in those scientific studies and experiments.” With the success and positive feedback of the Tide Club, the company is now considering creating similar establishments throughout the region. Overall, P&G has numerous successful CSR initiatives in place across the region. With its constant commitment to improving lives and providing the tools to do just that, P&G’s long-term CSR initiatives are sure to continue making a positive impact wherever they go.

Six Senses

Leading in lavish relaxation and holiday accommodations, Six Senses Hideaway in Zighy Bay, Oman is stepping up to the CSR plate quite quickly. As the managing director of Six Senses, Naim Maadad explained, his company’s philosophy is based on “all around communities, environment, and sustainability.” What is more, said Maadad, is that “the company as a whole is evolving around sustainability.” As a brand new resort in Oman, the spa’s construction was made from completely eco-friendly materials. In terms of being socially responsible, the luxury resort takes a hands-on approach with the local community it neighbors in the Musandam Peninsula. For example, since its inception the hotel has established an interesting contract with the local fisherman in the neighboring village; Maadad said, “any catch they get, they bring it and they show it to us where we have the first option to buy from them directly. So basically we employ them indirectly.” Also, Six Senses has trained the local village youth through English and general etiquette classes, and has employed approximately 18 boys thus far. In another long-term initiative, the resort has sent 46 local individuals to a seven-month Omani hotel school to train and educate them on the basics of the hospitality sector. To make sure its programs are ongoing, each Six Senses resort allocates 0.5% of its total revenues to a fund, which is donated to a pre-approved foundation. Shying away from the term ‘CSR’ — and speaking rather modestly — Maadad believes “the best way to describe [what Six Senses does] is by saying ‘a lifestyle’. We’re trying to make it as a responsibility, as a part of our daily lives, our daily routines.” While Six Senses is still trying to find local partners to help properly channel their allocated funds, the plush resort has generated creative initiatives and is most definitely on the right CSR track.

INTEL

As one of the leading IT companies in the world, Intel tries to follow the CSR programs that it has at a worldwide level. Spending an annual $100 million a year on education worldwide — and more than $1 billion in the last ten years — Intel is wholeheartedly dedicated to improving education. Intel®Teach, the company’s flagship program, has been launched across the MENA region, and most recently into Saudi Arabia and the UAE. Samir Al Shamma, Intel’s GCC general manager, explained that Intel’s long term goal is “to see [the Intel®Teach program] spread all around the Arab world.” In the UAE, for example, Intel signed an agreement with the Sheikh Mohammed Bin Rashid Al Maktoum (MBR) Foundation, to “jointly work towards training two million teachers.” Al Shamma emphasized that, “in general, we strongly believe that where we can make a difference from a technology company’s perspective, is in education.” This opinion is driven by the fact that there are not enough engineers and scientists in the world.

Further demonstrating Intel’s long-term commitments to education is the Intel World Ahead program launched in 2006, an initiative that is focused on getting the next billion people in the world connected to the Internet. Intel World Ahead is characterized by four pillars: firstly, providing broadband connectivity in various communities; secondly, to give people access to technology — be it either through government assisted programs or ‘shared access’; thirdly through worldwide general education programs; and lastly via encouraging creation of the constant development of the community. Al Shamma highlighted the imperative need to be connected in this “knowledge economy,” as he finds that connection and access are “prerequisites” in today’s global village. Prior to Intel World Ahead’s launch, the company embarked on a multi-year program for the Middle East, known as the Digital Plan Coalition Initiative. Holding similar pillars to its descendent, this program, explained Al Shamma, “was focused on advancing education in the region, creating knowledge or competency centers, encouraging entrepreneurship, [and] helping deploy more broadband connectivity.”

Through its competency centers in Abu Dhabi, Dubai, al-Khobar, Beirut, and Cairo, Intel aims “to showcase the latest information technology and train the industry on it, and to set up a collaboration with educational institutions,” with the idea that such institutions and their staff can benefit as well.

The Rolex Awards For Enterprise

The bi-annual Rolex Awards for Enterprise is no regular schmoozing affair. Beginning in 1976 to mark the 50th anniversary of the world’s first waterproof watch, the Rolex Oyster chronometer, this unique event aims “to encourage a spirit of enterprise in visionary individuals around the globe by providing the financial support and recognition they need to implement innovative, working projects that advance human knowledge and well-being.” Known for its innovative timepieces, the Rolex Awards targets five key areas of recognition: science and medicine, technology and innovation, exploration and discovery, the environment, and cultural heritage. Characterized by a long-standing tradition of originality, scientific discovery and an affluent cultural heritage, the MENA region is now a quintessential focus point for Rolex. The luxury watchmakers felt the need to accentuate the region via “encouraging institutions and individuals to put forward the untold stories of progress being made in the five awards areas and reverse the Arab world’s under-representation in the Rolex Awards.” Thus, in the summer of 2007, Rolex Awards launched a rigorous awareness campaign reaching out to NGOs, governments and individuals across the Levant, Gulf and North Africa, hoping to expand nominee applications for the 2008 Awards. It achieved just that — for the 2008 series, they received a record high of 138 applications from 16 countries across the MENA region alone, nearly 294% higher than the entries for the 2006 series. Ranging from taxi drivers to molecular biologists, entrants are regular citizens of any age from around the world. Applicants nominate themselves by submitting their own proposals for a project within one of the five award areas.

This year, a total of 44 projects were short-listed for laureates and associate laureates, with six of those projects coming out of the MENA. For the first time in its 32-year history, the awards ceremony will be held in Dubai on November 18, 2008. Five chosen laureates presenting the most exceptionally innovative projects will each receive $100,000 towards implementing their creative ideas and an inscribed gold Rolex chronometer. Five runners-up — associate laureates — will be awarded $50,000 each along with a steel and gold Rolex chronometer.

Rolex Awards boasts that its program is “one of the world’s most renowned philanthropic programs.” The exclusive luxury jeweler insists it is not out to increase brand awareness, and thus defines its initiative as philanthropy and not CSR. As a global leader in lavish timekeeping, Rolex is definitely not in need to boost its brand, but what company would shy away from positive brand awareness? Relative to its annual sales, an approximate $750,000 is a small price to pay to remind the world you are the crème de la crème of watchmakers and – most importantly – that even without an image problem, you are socially sensitive, by adding the cherry on top with the proactive CSR factor.

TNT

TNT, the leading provider of express delivery services, considers CSR as “an integral part of its key business objectives and not an optional extra,” as stated by Mark Woodwock, TNT sales and commercial director. He added that the CSR approach is integrated “in day to day management of the business,” and its key performance indicators (KPIs) “are given the same weightage as the other operational KPIs.” Furthermore, Woodwock pointed out that “responsibility towards society that one lives in” is an important part of the individual’s a corporation’s life, and every act affects the society “with greater intensity.”

Across TNT countries, numerous CSR initiatives are being implemented, focusing mainly on environmental issues. The ‘Driving Clean’ program aims to reduce the company’s vehicular emissions by cleaning up existing fleets and studying possibilities for future fleets in collaboration with the United Nations Environmental Program (UNEP). TNT aims higher by introducing the ‘Planet Me’ program and planning to “become a zero-emission transport company.” As a transport company, it acknowledges its responsibility to combat global warming and invests its resources effectively in this matter. It also participated in ‘Walk the World Program’, implemented the ‘Road Safety Management System’ to reduce accidents, collaborated with the United Nation’s WFP (World Food Program) in emergency responses as well as fighting world hunger, and obtained third party certifications like ISO 14001 (Environment Management), SA 8000 (Social Accountability) and others.

In the UAE, TNT engages in several local initiatives. One of them is employee inductions, which covers environmental, health and safety issues; other initiatives are using ceramic mugs for coffee and tea, video conferencing equipment to reduce traveling and therefore reduce emissions, selling and delivering greeting cards for the Al Noor Training Center for children with special needs, etc. Moreover, TNT uses the services of ‘Shred It’ to recycle waste paper as well as wooden pallets, and keeps electricity usage under control.

The company issues annual CSR reports, which are distributed with the financial documents to all stake holders. The report is produced according to the GRI guidelines and independently audited by PWC, and the data is gathered from different countries on a monthly basis. With all these initiatives taking place, TNT proves itself as a socially responsible company which actively contributes in sustaining the global environment.

ARAMEX

“We would like to take on a pioneering role in advancing corporate citizenship in the region,” said Raji Hattar, chief sustainability and compliance officer at Aramex. “We can make a significant contribution to our communities and help find solutions to some of the critical challenges we face as a region,” he added. The company views each initiative as a long-term investment, and differentiates itself by its “partnership approach with various stakeholders” and by finding solutions for the problems and challenges the community faces instead of merely making donations.

The key areas of Aramex’ CSR initiatives in the Middle East are education and youth empowerment, entrepreneurship, community development, sports, emergency relief, and environment. The company also engages in other charities and philanthropic projects on a case by case basis. An example of a CSR initiative would be ‘Ruwaad’, which consists of utilizing eco-friendly packaging and hybrid vehicles throughout the company’s operations. Moreover, Aramex joined the United Nations ‘Global Impact’ initiative last year, a platform which promotes positive global corporate practice. Hattar explained that every initiative the company adopts is supported by both human and financial resources. “Sustainability is integrated into our business strategy and corporate culture” he said. Aramex also issues an annual Corporate Sustainability Report showing its long-term commitment to CSR.

In financial terms, the company allocates approximately 1% of its profits before tax to CSR initiatives. The return on the CSR investment is looked at from both financial and non-financial perspectives. “Investing in education and empowering youth means that you will able to acquire the right talent and skilled labor in the long run,” stated Hattar. Additionally, Aramex assesses the impact of its CSR initiative “in order to improve [its] programs and pass on best practices to others.”

Hattar explained that Aramex wants to be viewed “as a responsible company,” as it will attract the new graduates who are eager to work with corporations that are socially responsible. Moreover, the company would like to “enhance the public image of the private sector’s role in social development.” With its long term commitment to CSR, Aramex plays a leading role in enhancing social growth and sustainable development in its community.

Land Rover

In October 2008, Land Rover announced the extension of its industry leading CO2-offset CSR initiative to the GCC and the Levant. This groundbreaking environmental initiative is the largest program of its kind to be undertaken by an automotive manufacturer. A unique characteristic about this green initiative is that it allows both the company and its customers to participate in balancing CO2 emissions and addressing the lingering problem of climate change. The program originated in the United Kingdom in 2006, which has been offsetting all of the CO2 emissions generated by Land Rover’s manufacturing operations in the European nation. Expressing that now is the “time to act,” Land Rover has appointed Climate Care — an international CO2 offset provider — to manage the initiative in the Middle East. As of October 1, 2008, Land Rover will also offset the first 72,000 km of each customer’s use on all Range Rover, Range Rover, Land Rover and Defender vehicles sold throughout the Levant and GCC. Once customers have reached the 72,000 km mark, they can voluntarily decide to offset their mileage via Climate Care’s website.

As the managing director of Land Rover Middle East and North Africa, Robin Colgan, asserted, his company is “determined to make sustainability a key element in our business.” Furthermore, he found that “the extension of Land Rover’s industry leading CO2 program in this region is an important step in reducing our impact on the environment.” Overall, Land Rover has committed to investing $1.19 billion to developing sustainable technologies to reduce carbon dioxide emissions. Globally, Land Rover aims to offset more than 2 million tons of CO2 through this ambitious CSR initiative. Clearly, Land Rover is dedicated to going green and improving the negative impact it has on its surrounding natural environment.

Visa

Since 1996, Visa has globally embarked on its financial literacy program and has recently brought this CSR initiative to the Middle East. The program aims to help people obtain the tools they need in order to manage their personal funds effectively and wisely. Jeremy Reynolds, head of corporate relations and strategy at Visa CEMEA, believes “responsible money management is a critical part of surviving in today’s world. The strongest financial tool today is knowledge.” In Kuwait, for example, Visa partnered with the Union of Kuwaiti Banks to create a national program promoting financial literacy and raising awareness on financial debt. Reynolds said that Visa’s CSR initiative “has already proven successful in the region with markets such as Egypt, Lebanon, Jordan, UAE and Kuwait taking an active role in spreading the financial literacy message.” As a follow-up to its financial literacy initiative, in 2006 Visa launched a bilingual website (www.ehsib.com) covering the basics of budgeting, saving, bank account management, using credit cards sensibly, on-line shopping tips and precautions against credit card fraud. Reynolds highlighted that the website “is another part of our ongoing commitment to assist in financial education and to manage money wisely.” Prior to its launch, Visa invested time and funds in research studies across Kuwait, Saudi Arabia, and the UAE in order to identify what areas the Middle East needed to be more informed about. “Feedback from central banks indicates that there is a widespread lack of understanding about personal finance,” Reynolds noted. Making sure to substantially inform the entire region, Visa is working closely with governments, central banks, and retail banks across the GCC to further develop and enhance their own national campaigns on financial literacy. “One of the greatest things we can do is to arm young adults with the skills necessary for a financially fit life,” asserted Reynolds. Visa’s CSR initiative is sure to aid the region become more financially aware and overall, more responsible. According to Reynolds, “A fiscally smart young adult becomes a savvy consumer — and that is good for business, the economy and for personal growth and success.”

Saudi OGER LTD.

Being a regional leader in construction, vice president Ali Kolaghassi of Saudi Oger believes in the higher expectations of corporate social responsibility. He explained that, “at Saudi Oger, there is an intrinsic understanding of the power that comes with the partnership of the business community, public sector, academic sector and the general public.” Focused on the economic, social, and environmental impacts of the societies in which it operates, Saudi Oger strives “to address the key sustainable challenges based on the core competencies wherever [they] operate — locally, regionally and internationally,” stated Kolaghassi. For example, the company created the Saudi Oger Training Institute, a nonprofit organization in Saudi Arabia. The company invested $45 million in this initiative in order to cater to training young Saudi men and women, and thus to “prepare them for employment in various sectors by providing them [with] the education and the hands-on training in four sectors: hospitality, technical, construction, and continues training,” Another initiative created by Saudi Oger is the two-year program known as Scuba Saudia, a project in coordination with the Saudi Arabia High Authority for Tourism. This program aspires to protect the marine ecological life as well as to train and educate Saudi youth on the safe and responsible means of diving without upsetting the natural environment. In addition to its own CSR programs, Saudi Oger continuously sponsors numerous events, such as World Down Syndrome Day (in association with the Down Syndrome Charitable Association), the Jeddah Festival, Eid festivals in Riyadh, and is also the main contributor of the Disabled Children Association. Kolaghassi believes that “by participating and becoming a recognized partner with the community, [Saudi Oger] will leverage and help improve social conditions as well as play a major role in the development of [Saudi Arabia].” Kolaghassi is well aware that the Saudi Oger brand name “depends not only on the quality and uniqueness, but on how, cumulatively, [we] interact with the community and environment around us.” With CSR on their mind, there is not much stopping this regional front runner.

H2O New Media

H2O New Media is a social community company, describing its aim as to positively alter “the way people work, create, and play by developing market changing social media and collaboration technologies.” Relatively new in the Middle East, H2O New Media aspires to “reduce carbon emissions, break down cultural barriers, benefit commerce and make it easy for people to communicate, have fun, play, listen, create, enjoy, and even work using innovative social media applications.” Steve Vaile, founder and CEO of H2O New Media, believes that “CSR is ingrained in the company culture,” as it aims to make a difference in people’s lives across the Middle East. Developed by H2O, the Dubai Lime initiative is a pool of companies and individuals in Dubai that encourage the local grass roots music and arts scene throughout the UAE. This program provides a base for native citizens to display their artistic talents through open-mic and live music events, while also contributing the support and inspiration from professional musicians and agents of prominent international recording labels. Dubai Lime is always on the move, as it is a mobile art exhibit that takes places across coffee shops and restaurants around Dubai — thus making it easier, more encouraging, and more entertaining for young amateur artists to get involved. In addition, Dubai Lime hosts not-for-profit music and business networking events which directly donate funds to various charities around the Gulf.

H2O doesn’t sell itself short, as the company also supports other charity organizations such as the Dubai Autism Center as well as the Dubai Centre for Special Needs. H2O contributes awareness of the associations by exhibiting the children’s artwork together with established artists’ own exhibitions. H2O New Media also creates free websites to charity organizations that are in need of web exposure and thus help them with their Internet presence and advertising partnerships. Vaile feels that such initiatives “really work at a grass roots community level, to make a difference and generate awareness in the UAE as well as bringing in an element of creativity and fun.”

National Bank Of Abu Dhabi

At the National Bank of Abu Dhabi (NBAD), “embedding CSR and sustainable business practices into our strategy makes business sense,” explained CSR officer Belinda Scott. Taking a pragmatic approach to their CSR initiatives, NBAD is “developing a more strategic approach with CSR and sustainable activities, both internally and externally.” The bank focuses on their existing initiatives to measure their impact on its triple bottom line. Moreover, as Scott stated, “we are now considering the sustainability of our initiatives, what level of external impact they have, and whether they can be adapted to roll-out in our overseas branches.” Aspiring to be the leading Arab bank, Scott believes that “CSR is a way of doing business and not just about carrying out a series of standalone projects that have no purpose or relevance to NBAD’s vision or direction.” The prime areas of the bank’s core CSR initiatives include learning, environment, community, and employees. For example, NBAD created ASK Lectures (Awareness Sharing Knowledge) — which is made up of four lectures per year on relevant issues affecting the bank’s stakeholder, with the aim of engaging these stakeholders and exchanging knowledge on different topics. Another initiative, the ‘Reduce, Re-use, Recycle’ program, is aimed at cleaning up the environment throughout the UAE through paper recycling, collection of used toner cartridges, etc. The bank’s recycling initiative, noted Scott, is supported by an intranet awareness campaign based on the “importance of reducing the uses of natural resources, identifying recycling/environmental champions and opening communication with employees to submit their suggestions and comments to increase employee engagement.” The bank further motivates its employees by inspiring them to take part in community driven projects, such as the annual NBAD Blood Donation Drives. Concentrating more on the needs of their employees, the bank created Employee Wellness Day, which as Scott explained, is “designated to give [the employees] the opportunity to find out more about how important their wellness is, not only in the personal but also their professional lives.” This program offers employees medical tests and counseling in areas of concern such as obesity, diabetes, coronary health, breast cancer, stress managements, exercise and maintaining a healthy diet. Externally, NBAD has established a partnership with the Dubai Center for Corporate Values (DCCV), is a founding member of Emirates Environmental Group CSR Network and before the end of 2008 will become a signatory of the Abu Dhabi Sustainability Group. Evidently, NBAD is taking on the role of responsible actions quite seriously and doing an exceptional job at it.

Shangri-La Hotels and Resorts

Shangri-La Hotels and Resorts in Dubai considers CSR “not as a ‘soft’ addition to the business, but an indispensable ‘hard’ business component” that customers expect from the company, said Elizabeth DeMotte, vice president for public relations. She added that “CSR has been and continues to be a high priority for Shangri-La; in fact, we were active in this area long before the term came into common usage.” The company has launched a two-year development strategy to develop its CSR activities. The five key areas that Shangri-La engages in are: the environment, employees and the community, health and safety, supply chain management and stakeholder relations.

To promote environmental sustainability, the company focuses on five areas — climate change, ozone depletion, water management, waste disposal management and indoor air quality. For example, it fitted all guest rooms with water saving devices and is working on reducing carbon dioxide emissions per room by using new technologies, alternative energy resources and building more efficient buildings. Moreover, the hotel’s management recognizes its staff as their most important asset and provides fair employment and staff development opportunities. The company has also established a Shangri-La Academy in Beijing and one in Manila.

Finally, Shangri-La Barr Al Jissah and Spa in Muscat has a dedicated Turtle Ranger who gives special attention to the rare green turtles that come ashore. This shows that Shangri-La is not only dedicated to the safety of its guests and staff, but also considers sustaining biodiversity as an integral part of its CSR obligations. 

Bank Muscat

Being Oman’s leading financial institution, BankMuscat is dedicated to serving society and making significant differences in the country by supporting various community projects. “[Our] corporate social responsibility initiatives aim to make a positive and tangible difference within disadvantaged communities and enable young people to access quality and relevant social, economical and educational programs,” stated AbdulRazak Ali Issa, CEO of BankMuscat. Additionally, BankMuscat has founded an independent CSR department to demonstrate its commitment and dedication to developing Omani society and ensuring a successful future for the coming generations.

Recently, a memorandum of understanding (MoU) was signed between the bank and Dar Al Ata’a entitled ‘BankMuscat for Family Care’. Through this MoU the bank has been funding a widespread campaign to provide food rations for low income families in Muscat Governorate. BankMuscat has also been active in helping children by renewing its support to the Early Intervention Program for Special Children with Special Needs. The bank distributed cards and postcards with the children’s drawings which were sold on many occasions to raise funds. “The bank strongly believes in its vision and mission to ensure a better quality of life for children with special needs and their families,” commented the bank’s chief executive.

To prove itself as being environmentally responsible, the bank also engaged in many environmental initiatives. It participated in the United Nations Environmental Program for Financial Institutions in order to assess the effects of financial globalization on the environment. BankMuscat is also engaged in implementing the ‘Equator Principles’ program, which is a globally recognized system of guiding principles for social and environmental risk management and assessment.

Moreover, BankMuscat did not forget to support the new generation of entrepreneurs by building a partnership with Intilaaqah, one of the social initiatives of Shell Oman Marketing Company. “[We] work diligently towards supporting government objectives and consider it an obligation and responsibility to contribute back to society … to secure the future of Oman,” explained the CEO. Intilaaqah aims to encourage and motivate young entrepreneurs in order to reduce the dependence of the economy on oil and boost employment in Oman. BankMuscat covered CSR from many different aspects and was able to prove itself as a successful financial institution that holds responsibility towards the underprivileged segment of its community.  

Oman Oil Marketing Company

“Since its inception in 2003, corporate social responsibility has formed an integral component of Oman Oil Marketing Company’s operations which has enhanced the competitiveness of its business and maximized the value of wealth creation and quality of life to the sultanate,” explained Omar Ahmed Qatan, CEO of Oman Oil Marketing Company (Omanoil). Additionally, Qatan added that Omanoil considers itself as being a role model of ethical and responsible operations having the interest of the Omani people and the nation as “its guiding principle.”

Omanoil targets in its CSR initiatives the Omani youth — aged under 18 — since this age group represents more than 50% of the population. The company considers itself as “fostering an empowered generation that will lead the nation forward to new frontiers and even greater successes.” In 2006, Omanoil established the Omanoil Football School (OFS) to help young Omanis achieve their ambitions and goals and become the football stars of tomorrow.

Having a fundamental belief that “charity begins at home,” the company has partnered with the Dar Al Atta’a Association and provides donation boxes in its network of filling stations and quick shops across the sultanate. “Through this successful partnership, Omanoil hopes to empower citizens to make a change and gain insight into the diversified means of support the general public can provide by taking the first step in recognizing the core issues which need to be addressed within various sustainable community projects,” commented Qatan.

Concerning health, safety and environment considerations, the company’s staff and contractors are required to “think safety” in all their actions to achieve a goal of zero accidents which would benefit the community at large. Omanoil has also introduced new technologies in environmental cleanup, which were designed, developed and implemented for the first time in Oman and the Gulf as a whole.

The company is proud to have a dedicated team to overall corporate objective.  As Qatan concluded, “operating in an increasingly competitive business environment, the company has continued its strong performance focus and consistently achieved its primary safety, operating and financial targets.”

Radisson SAS Hotels & Resorts

At Radisson SAS Hotels & Resorts in Dubai, CSR is “an investment in a strategic asset or distinctive capability, rather than an expense,” explained Farida Parekh, marketing and communications manager. She also described CSR as being the character of a company and having a value that cannot be measured in monetary terms. The Radisson SAS’ approach to CSR is rather unique as it benefits construction workers, a segment of the society that is usually ignored in the UAE.

In August 2008, Radisson SAS in Dubai launched, in collaboration with many other companies, the Shoe Box Appeal initiative aimed to help construction workers. According to Helping Hands, a UAE based charitable organization working with industrial workers and one of Radisson’s partners, many of these workers in UAE live in unfavorable conditions. They live away from their families for a long time, are subjected to extreme weather conditions and suffer from social pressure and isolation. The campaign consists of raising donations and offering them to construction workers. Radisson SAS has set a list of items that can be donated, which includes T-shirts, caps, disposable razors, shaving cream, and other basic needs. Although no money or food can be offered, both individuals and corporations are welcome to donate. 

According to Parekh, the resorts’ campaigns are differentiated by their uniqueness and their presence at both the principle stage and the practical level. The company also established a long-term CSR strategy, and identified the most important driving forces behind it, which are the company’s long-term profitability as well as its leadership and ability to anticipate the future. 

With its noteworthy initiative, Radisson SAS Hotels & Resorts has entered the CSR world with an innovative and uncommon idea. Hopefully, more companies will engage in such initiatives in order to help foreign labor and all the underprivileged workers to better cope with the extremely hard working conditions. Because, as Susan Furness, CEO of Strategic Solutions, stated, “The construction workforce has contributed to Dubai and the UAE’s growth, and thus to all of our tomorrow. It is time to stand up in recognition and do something, however small, to acknowledge the favor.”

Al Ahli Holdings Group

Lina Hourani, the CSR officer of Al Ahli Holdings Group (AAHG) in Dubai, stated that educating, supporting, and empowering the Emiratis youth are the main objectives behind the company’s CSR initiatives. She added that AAHG wants to contribute to solving the 2020 Job Opportunities Challenge by enhancing the entrepreneurial skills of young Emiratis and enabling them to lead their own future.

In May 2008, AAHG developed the Global Business Opportunities (GBO) initiative in partnership with Junior Achievement Argentina. This program aims to create new opportunities for Arab youth aged from 18 to 25 years old by exposing them to professional business training. Twenty students — 10 Emiratis and 10 Argentineans — were selected and divided onto five companies. Afterwards, they began three weeks of intensive training in Argentina. These five companies worked on business plans and competed on the best plan to be presented in October 2008. “It is our aim to lead by example and show the private sector what can be achieved with active and actual social responsibility,” said Muhammad Khammas, the CEO of AAHG. He added that “this encouragement is invaluable in giving the next generation the confidence and tools to take business to the next level.”

High caliber judges were appointed to choose the best business plan according to certain criteria — the business idea, the written presentation of the project, potential market, legal structure and other important measures. One of the judges, Louis Hakim, vice president of Royal Philips Electronics and CEO of Philips Middle East, stated that he is “glad to be supporting such an initiative. Such a training program like the ‘Global Business Opportunity Initiative’ will not only bring out the youth’s creativity but also add to their cultural enrichment which is the key [for] today’s globalized business environment.”

Al Ahli Holdings Group’s CSR initiative is highly important for the Arab youth, especially with the rising employment and career challenges. With a dedicated CSR division, the company is able to successfully motivate and empower young Arabs and guide them to the fulfillment of a bright and successful future.

Ernst & Young Middle East

Celebrating entrepreneurs and the businesses they build and grow has always been a priority for Ernst & Young, a leading global professional services firm. For the past 22 years, the company has been encouraging ambitious and motivated entrepreneurs in the Middle East by honoring them in the Ernst & Young Entrepreneur of the Year Awards. This program has been conducted in 135 different cities in over 50 countries. “It is noteworthy that this year [2008], the program has attracted such high caliber entrants, following on from the benchmark initial program held in 2007,” stated Fouad Alaeddin, Managing Partner of Ernst & Young Middle East. 

Entrepreneurs who are eligible for the contest “include both founders of companies and those who organize, manage and assume the risks of a business or enterprise early in its life cycle or during its growth and are still active in the company.” Winners are chosen according to their financial performance, entrepreneurial spirit, strategic direction and other similar criteria. This year, 18 finalists were chosen and will be interview in late November. Nominees benefit from marketing and public relation opportunities, networking opportunities, stronger recruiting image and other important advantages. The Middle East winner will have the chance to participate in the World Entrepreneur of the Year Awards, which will be held next year in Monaco.

International Islamic Bank of Qatar

Abdel Baset Ahmad Al Shibi, CEO of the International Islamic Bank of Qatar, considers CSR as a duty that the bank has towards its society. Additionally, these initiatives should be long-term and necessitate continuous follow-up and involvement. The bank is engaged in various activities including education and scientific research.

The bank made a significant contribution by offering marriage loans free of commission or profit for couples wanting to get married in 2007/08. For choosing suitable initiatives, the bank looks for activities that benefit a broad category of people in the long run. A special committee regularly receives project suggestions and takes a decision depending the project’s importance and the bank’s priorities. Additionally, the bank’s staff can also suggest initiatives that are then studied and implemented if approved. 

The annual budget for the bank’s CSR initiatives is discussed in coordination with the relevant department responsible for development projects to ensure that these funds are allocated properly. “We look at financing reputable companies under the state’s supervision, and not to let any money go to inappropriate institutions … I believe that our funds are being effectively allocated to this end,” explained the CEO.

Al Shibi also recalled a recent meeting initiated by the Qatari Prime Minister with the executives of different private companies, during which it was agreed that a proportion of corporate profits should be allocated to the development of social projects. It was also suggested that a committee be responsible for supervising and monitoring the flow of these funds.

MCDONALD’S

“We have an obligation to give back to the communities that gave us so much,” stated Roy Kroc, the founder of McDonald’s. This statement shows that CSR has been a part of the McDonald’s vision since it was founded in 1955. McDonald’s Kuwait, which is owned and operated by local and Arab businessmen with a 100% local investment, has been operating under the same vision and supporting several causes in its community like “children’s well-being, responsible employment, environmental care and commitment to serve high quality products,” as stated by George Khawam, the marketing director. Khawam added that they look at CSR from three main perspectives. The first is “cause and requirement”, which requires corporate attention, second is “the evaluation of the resources and application of best practices to fulfill this requirement,” and third is “the means to sustain the initiative in the long run.”

The main commitment of McDonald’s Kuwait is to play a positive role in children’s well-being. In 2007, the McDonald’s World Children’s Day campaign was launched under the theme ‘A smile is just a thought away’. In November of the same year, the campaign ended with a memorable celebration under the title ‘Draw what you think will make other kids happy’ with the collaboration of MBC3 and the Kuwait Association for the Care of Children in Hospital (KACCH). It targeted children from six to 12 years old and aimed to “increase awareness among children and adults about World Children’s Day and encourage them to be a part of it.” A donation of $10,954 was gathered for the KACCH.

In March 2008, McDonald’s Kuwait also lunched the Champion Kids Program to “educate the children in Kuwait about the Olympic Games and adhering to its commitment to promote active lifestyles”. On April 2, it held a Mini Olympic athletic event including children eight to 13 years old. The winners were awarded a four day all-expenses-paid trip to Beijing accompanied by an adult family member. Moreover, Ronald McDonald, McDonald’s Chief Happiness Officer (CHO) in Kuwait is very committed to CSR by making regular visits to pediatric wards, orphanages, and hospitals in different cities in Kuwait. He is also a ‘Balanced Lifestyle Ambassador’ and a certified entertainer and sports advocate.

Dubai Center For Corporate Values

Established in 2006, the Dubai Center for Corporate Values (DCCV) is a unique nonprofit organization operating in the UAE. Formed by the Dubai Technology and Media Free Zone Authority (DTMFZA), DIFC, and the Dubai Airport Free Zone Authority (DAFZA), the DCCV in itself is a cutting-edge initiative aimed at promoting the awareness and practice of corporate social responsibility throughout the UAE’s business sector. The organization is currently formulating the ‘Dubai CSR Model’, expected to be released sometime next year, which aspires to create a generic CSR framework for all companies, organizations, governments, etc. to implement and increase socially responsible actions. The DCCV has its own CSR committee to help draw up the model, which is made up of 45 members from the private sector, government-linked companies, government departments, as well as local and international NGOs. Karim Al Falasi, Emiratization manager at Chicago Bridge & Iron Company N.V., feels that the CSR Committee “is an eye opener for what is happening in a variety of sectors.”

Taking bits and pieces from international models — such as the GRI and EQM frameworks — the DCCV is trying to get “the best of both” from the western and Arab worlds said Najeeb Al-Ali, executive director at the organization. “There are some basic criteria that wouldn’t be different wherever you go; [for example] the minimum environment criteria does not vary anywhere in the world — you still have to follow the minimum criteria,” Al-Ali explained. Aware that his organization’s feat is not of a simple nature, Al-Ali noted that “the guideline needs to be simple … If we try to make it very specific and detailed, it won’t work for all companies — maybe for some, but not for others.” Accrediting the GRI, Al-Ali asserts that, “one of the reasons why it is actually very successful is because it is a large set of criteria, and companies [can] pick and choose which criteria suit their environment.” Emphasizing that one needs a system that is flexible enough for companies, organizations, etc., Al-Ali said that this exactly what the DCCV is doing. This initiative may just be what the UAE and the Gulf needs to get on the CSR bandwagon. Until next year, keep your fingers crossed.

MOTOROLA

The global communication leader Motorola in Dubai aspires to “benefit the communities where it operates” by supporting projects that address multiple community concerns. These projects include environmental sustainability, education, and social services. For the last three years the company has been managing an annual global community service program. This year, the ‘Global Day of Service’ is themed “Green and Global” and emphasizes the company’s commitment to environmental sustainability. This program will engage more than 10,000 employees in 45 countries, who will be teaching an environmental curriculum in classrooms across the globe. Muhammad Akhtar, the country manager at Motorola UAE, stated that “With the outstanding dedication of our employees to the communities where they work and live, we celebrate our tradition of service and innovation by committing our time and our talent to foster a brighter, greener future for our global community during this year’s Green & Global Day of Service.”

Additionally, Motorola Foundation, the benevolent and philanthropic arm of the company, aims to build strong community partnerships as well as promote innovation and engage different stakeholders. It focuses on funding education, science, engineering, technology and math programming. The foundation will have a non-profit organization plant a tree for every employee volunteer at Motorola. A second tree will be planted in the honor of the employees who re-use their apparel from preceding events.

Locally, ‘Children in Need’ will be the center point of Motorola employees during the ‘Global Day of Service’. More than 230 children will benefit from these projects at the Al Noor Training Centre for Children with Special Needs, which is a non-profit organization that provides education and training to disabled children. Since 1953, Motorola Foundation and the company’s employees gather each year to arrange the annual service event that promotes team work and enables colleagues company-wide to engage with organizations addressing critical social issues.

Motorola’s focus on environment and children is mainly due to the company’s commitment to operate ethically and support the communities in which it conducts its business. The company has proved itself to be highly committed to promote sustainable development and benefit its society both locally and globally on continuous and long-term basis.

National Commercial Bank Of Saudi Arabia

The National Commercial Bank of Saudi Arabia (NCB) engages in a wide range of activities to enhance the development its community and help sustaining a clean and healthy environment. It has established a dedicated CSR department to develop, implement and monitor charitable and humanitarian activities. Mahmud Muhammad Al-Turkistani, head of CSR units at NCB, classified the bank’s CSR activities into five strategic goals: contributing to the reduction of the unemployment rate by providing job opportunities, contributing to the support of educational activities in the society, contributing to the support of health activities in the society, adopting various social programs to help the needy and promoting the concept of volunteerism in the community.

To open up new job opportunities, one of the initiatives that NCB launched for this purpose is the ‘Al Ahli Small Business Program’ that provides training courses for young Saudi and helps them to start their own business. Two years ago, 800 Saudis engaged in this program, 20% of were women, and 40% started their own business. Additionally, 1,853 families benefited from the ‘Al Ahli Productive Families Program’ that helps women in difficult economic circumstances develop vocational crafts to secure a source of steady income. Concerning education, NCB was involved in helping orphans to continue their postgraduate studies, and established computer labs in educational institutions. The bank also supported the development of the health sector by supplying non-profit health institutions with 95 additional renal dialysis units, providing four equipped ambulances for the emergency medical services, and enhancing health awareness among various segments of the society. Moreover, the bank has been a major contributor to charities. It also supported orphans by supplying them with school uniforms and equipment as well as medical care. Environmental awareness is also on NCB’s agenda since it aims to reduce electricity consumption by using power-saving lights and encouraging its employees to adopt energy and material conservation practices. From an ethical prospect, NCB’s products and services are all sharia-compliant, and every product or transaction is reviewed by the NCB Sharia Board. 

The bank also has an independent budget for CSR activities, which can be recognized by the four awards it has earned, among them the CSR Leader Award from the Jiddah Chamber of Commerce and Industry (JCCI) and ITP Publishing Group. NCB continues to support its community by implementing CSR initiatives that are beneficial and essential for its long-term development.

ICDL GCC Foundation

As a not-for-profit organization, the International Computer Driving License (ICDL) GCC program is the Gulf extension of the European organization funded by the European Commission. Aiming to spread digital literacy and create an e-society, ICDL GCC has recently granted free ICDL certification to thousands of children aged 12 and under across the Gulf region. This CSR initiative aspires to develop computer literacy in children at young, impressionable ages enabling them to use information technology as a tool for sustainable education. By campaigning via the region’s education ministries, educational zones, schools and other academic organizations, Arab youth will, without a doubt, benefit from such an engaging initiative. Jamil Ezzo, director general at ICDL GCC, emphasized the importance of providing children in the Arab world with the right tools to learn, saying “the inclusion of children in our digital literacy movement has become instrumental to reforming educational systems around the world, and we are proud to contribute with such initiatives that reach out to the youngest children.” Ezzo finds that training other individuals to become digitally savvy is a priority as well. “We encourage organizations from the public and private sectors to also participate in similar programs through their own CSR budgets to further digital literacy not only among children, but also among women, retirees, people with special needs, job seekers, and other social groups.”

This new program complements the foundation’s region-wide efforts to create a digital society, reflecting the significant role of the Arab youth’s role in the region’s sustainable development. The NPO’s latest initiative will run until the end of the 2008/09 academic year. Notably, during the summer of 2008 ICDL GCC organized special training camps for more than 10,000 students across the Gulf, helping to enhance their IT skills. Additionally, all ICDL GCC youth programs provide classes on the ethical and safe use of computers. In October 2007, ICDL GCC reported to having reached more than 600,000 individuals enrolled in its program across the Gulf region, and through its 1,800 approved centers in Iraq, Kuwait, Bahrain, Oman, Qatar, Saudi Arabia, and the UAE the foundation is sure to make a longstanding difference.

Sharjah Chamber of Commerce and Industry

On September 15, 2008, the Sharjah Chamber of Commerce and Industry (SCCI) inaugurated its corporate social responsibility campaign to promote the concept of CSR and its mechanisms across all enterprises. It aims to achieve sustainable development by benefiting various segments in its community. “[The campaign] will be based on social cooperation and will ensure that joint efforts will be productive enough to achieve comprehensive and sustainable development in different sectors of the society,” said Ahmed Muhammad Al Midfa, SCCI’s chairman. This initiative will encourage the private sector to focus more on social responsibilities, especially because this sector is an essential partner in the implementation of different programs covering economic, environmental, humanitarian, and social development.

Overall, said Hussein Muhammad Al Mahmudi, director general of the SCCI, the concept of CSR launched within the chamber is characterized by “green business,” environmentally friendly based initiatives, general business principles — i.e. transparency, reporting, governance, creating accountability and ethical practices — and the development of human capital by working with the private sector to develop human resources across the UAE. Al Mahmudi believes the SCCI’s approach is unique because it uses a systematic approach to CSR through the public private partnership strategy.

Over the past three years SCCI has funded numerous education, humanitarian, social, entertainment and sports activities, and contributed AED46 million ($12.5 million) to social causes. For example, SCCI supervises ‘Tawasul’, a program aimed at providing education for orphan students that is sponsored by businessmen, private companies, and other organizations in cooperation with Takmeed and Sharjah University. According to Al Mahmudi, director general, the CSR initiatives aim to unify the efforts of the government and the private sector towards social and environmental development, to benefit both the civil society and private enterprises.

Moreover, SCCI is planning to provide financial aid to social organizations like Tamkeen, a program for the elderly and people with special needs, as well as engage in other activities like consumer protection, the use of eco-friendly technologies, manpower safety, performance level and job satisfaction development. The chamber is also planning to encourage the implementation of CSR projects by “studying the creation of an award program for the initiative which would help evaluate the CSR activities of businesses and organizations,” Al Mahmudi explained.

Ritz-Carlton Hotel

At Ritz-Carlton hotels worldwide, not only are the staff and management involved in CSR activities, but also the guests, who while enjoying their stay can engage in helping and supporting the community in the region where they are spending their vacation. “Many of [our guests] are active volunteers in worthwhile activities at home and want to continue this spirit of giving when they visit other parts of the world,” said Simon F. Cooper, president and chief operating officer of The Ritz-Carlton Hotel Company. Ritz-Carlton Dubai encourages its guests to join the hotel’s employees to dive right in. “When our hotel guests come, they want an experience… they want something that impacts the local culture,” said Vivienne Gan, regional director of public relations for the Ritz Carlton Middle East. 

In April 2008, as a part of ‘Community Footprints’, Ritz-Carlton’s social and environmental program, the hotel launched ‘Give Back Gateway’, a new program that offers guests numerous opportunities from constructing a library for young children of migrant workers in Beijing to supporting children with autism in Bahrain. In the Middle East, three of the five Ritz-Carlton hotels have committed to preserving the natural environment. One example is the hotels’ efforts to conserve the beauty of Wadi Shawka in Ras Al Khaimah, a subterranean water table that creates a habitat for many species. In Bahrain, the hotel is closely associated with RIA Center for Children and encourages its guests to meet with local children who are suffering from autism and other communication disabilities.

In July 2008, Ritz-Carlton offered a new opportunity at team-building called ‘VolunTeaming’. Sue Stephenson, vice president of ‘Community Footprints’, described the program as “combining team building with volunteer activities that create lasting memories for the participants.” Guests do not have to engage in full-day activities, but can spend as little as two hours depending on their schedule. Activities can range from building bikes for children and offering them to a local charity, to building housewarming gifts for local families who will be moving into their first Habitat Home. Finally, as Stephenson stated, “The Ritz-Carlton Hotel Company has always been committed to the support of local charities and causes … our employees around the world worked for months … and are immensely proud to have the opportunity to share the soul of our company with our guests.” 

Pfizer Pharmaceutical

Focusing on the medical field, over the last years Pfizer Pharmaceutical in the Saudi Arabia launched many CSR initiatives ranging from spreading awareness of various diseases to supporting national institutes. In 2004, the company initiated training sessions for pharmacists covering all regions in the kingdom. These sessions covered various diseases, ways for dealing with patients, managing warehouses, and other important matters.

In 2006, Pfizer launched the ‘PEN Physicians Education on Neuropathic Pain’ project that consists of training doctors to be able to diagnose and treat nerve pain through a series of lectures given in cooperation with George Washington University by video conferencing, as well as special Saudi consultants and foreign experts. Moreover, with the full support and cooperation of Pfizer, a Saudi Hypertension Management Society (SHMS) was launched in 2007. It aims to fight hypertension and spread awareness about the disease and its causes. The company also supported the establishment of the National Institute for Training in Egypt. This special training centre is the first of its kind in the Middle East and trains Arab doctors in different areas.

Pfizer sends Saudi doctors to attend different training courses depending on their specialization, and provides full or partial support to local and international conferences set by public hospitals. The company not only focuses on graduating doctors and pharmacists but also on university students, especially at the King Abdulaziz University, by organizing scientific conferences and providing the faculty with the needed medical equipment. Finally, Pfizer plans to launch a national campaign in Saudi Arabia to raise awareness about the dangers of smoking by distributing flyers and conduct awareness activities in hospitals and shopping malls.

While other companies had a broader perspective of CSR, Pfizer decided to concentrate on the field that it knows best. These initiatives will surely have a long-term effect on the local community, since newly trained doctors and well educated graduates will be able to better take care of their patients and have a positive impact on the health condition of their society.

MVM Events Dubai

MVM Events Dubai, the dynamic and award-winning global conference and events company, is committed to assisting its clients in implementing ‘green’ CSR strategies. The company has recently conducted the second phase in its series of global ecological surveys, capturing the attitudes that companies hold towards environmental CSR policies when organizing their events. The survey results showed that companies are spending too much time discussing the importance of the environment, rather than implementing strategies and addressing the actual issues. Speaking about the GCC Richard Beggs, managing director at MVM, stated that “CSR is quickly becoming a buzzword in the region, with many companies talking about environmental issues. However, we need to ensure that companies based here don’t take the same road as their counterparts in the UK and continue to discuss the issue without positive action. They need to actively drive CSR and environmental policies.”

MVM Events is the only company in the region that has a dedicated ‘eco-specialist’, who is responsible for conducting environmental audits of events and advises companies on the most effective means to decrease environmental footprints without affecting the quality of their event. Minimizing the effect on the environment can be done in many ways like using suppliers who have an effective CSR policy, hosting paperless conferences, ensuring minimal waste and energy usage during the event, etc.

The company aims to work with clients who want to ‘go green’ and demonstrate their commitment to ecological policies. “A year ago our survey showed that only 10% of the region’s companies had a CSR eco-policy when organizing events,” explained Beggs. He added that, “A staggering 87% of companies stated that they would be considering CSR ecological issues more over the next five years. However, according to the latest survey results, not much has changed.” This year, 78% of companies are still unaware of the importance of environmental CSR. Nevertheless, there are some indications that there is a new attitude emerging since 71% of companies stated that their supplier procurement policy is highly influenced by the supplier’s effective CSR commitment to the environment.

This survey by MVM Events is a part of a three-year commitment to assess the current position and observe trends in the changing awareness of companies in Dubai, London and Sydney with respect to CSR management and the environment. Hopefully, with MVM’s efforts to spread ecological awareness among these companies, the next survey will show improved and satisfying results.

Magrabi Hospitals and Centers

Since its inception in 1955, Magrabi Hospitals and Centers has expanded to cover the whole MENA region as the largest medical care network in the Middle East. Over the years, it has engaged itself in providing quality medical care for its community and enabling the underprivileged to have access to its services. In 1999, Magrabi established the Magrabi-Al Noor Foundation, aiming to provide high-quality cataract surgery for rural and slum communities.  With 13 branches worldwide, the foundation is considered to be Magrabi’s charity wing. Some of the services it offers are conducting surveys and epidemiological researches, developing training curriculum and programs for all eye care cadres and running health awareness activities.

In addition, since 2003 Magrabi has established a relationship with the Ebsar Foundation for Rehabilitation and Vision Impairment Services. It has supported Ebsar by undertaking many initiatives, such as allocating SAR1 ($0.27) out of every check-up fee at Magrabi hospitals and centers, assembling and manufacturing visual aids, setting up scientific research centers as well as special schools for those who are visually impaired, and the like. In September 2008, Magrabi also made generous in-kind and therapeutic donations to two charity houses — Kafel and Ensan — supporting widows and orphans. The donations included household appliances and opened the doors for free check-ups and discounted treatment. Overall, the value of the donation amounted up to SAR 25,000 ($6,674). During Ramadan, every Thursday Magrabi welcomed all underprivileged patients for free treatments, as a part of its commitment to enhance social development among this segment of the society. 

Marriott International

Marriott International has proved its commitment to corporate social responsibility by engaging in a wide scope of activities that benefit both the local and international communities. Barbara Powell, senior director international social responsibility at Marriott, divided the hotel’s CSR initiatives into five key areas: shelter and food, environment, readiness (for hotel careers), vitality of children, and embracing diversity and people with disabilities. Powell believes the Marriott is “really touching community needs” and is “empowering [its] local managers to determine what is right for the communities” through its CSR programs across the region.

In Dubai, the Marriott Business Council and Spirit to Serve Communities conducted many clean-up campaigns, planted trees and through charity golf tournaments raised money for the local Al Noor school for children with special needs. Additionally, on May 6, 2008, and in association with the Red Crescent in Dubai, the hotel entered into an agreement with the United Nations World Food Program (WFP). Through this program, AED5 ($1.36) will be added to all guest bills — with the consent of the hotel guests — and will be collected to support WFP’s Food for Education program. The hotel’s target is to raise $27,200 by the end of 2008. Moreover, Marriott supports the local Children’s Garden School and donates function space and coffee breaks to all its yearly events.

In April 2008, as a part of Marriott’s environmental awareness month, 700 associates of the JW Marriott Hotel Kuwait and Courtyard by Marriott Hotel Kuwait participated in planting over 200 plants and trees in Kuwait City. In Egypt, the Marriott Business Council decided to continue funding the maintenance of all SOS Children’s Villages facilities. In 2006, the hotel offered money and in-kind donations in the value of $410,000.  

Marriott International hotels all around the world have tailored their programs and initiatives to protect and preserve the wildlife and their natural surroundings. They partnered with local environmental experts in order to create programs that would offer guests insight for the wildlife in the areas surrounding the hotels. Many initiatives are taking place in Brazil, Costa Rica, Hawaii, Mexico, Russia, and other parts of the world. Operating on a global level, the Marriott not only tackled important issues in its CSR initiatives, but also expanded its efforts to cover as many parts of the world as possible.

Imperial College London Diabetes Centre

The Imperial College London Diabetes Centre (ICDLC) Abu Dhabi, specialized in diabetes treatment, research, training and public health, has launched the ‘I Play Sport’ program. The program was initiated in June 2008 and took place during Ramadan this year. It represented the fifth pillar in the award-winning ‘Diabetes.Knowledge.Action’ public health awareness campaign. The four other pillars were the ‘I Wonder’ screening program, ‘I Eat Right’ school lunch box drive, ‘I Cook Healthily’ recipe collection, and the ‘Walk UAE’ walkathon.

“The center is using sports as a vehicle to promote the importance of an active lifestyle in the prevention of diabetes and other related complications,” stated Maha Taysir Barakat, consultant endocrinologist and medical & research director, during the launching of the program. She added that “the upcoming ‘I Play Sports’ tournament is an opportunity for the business community to have fun, while allowing the players and supporters to be ambassadors of the diabetes awareness message across the UAE.”

The tournament attracted many leading brand names like Mubadala and Dolphin Energy, ALDAR, Abu Dhabi Aircraft Technologies, Injazat Data Systems and others who sponsored and participated in the tournament. The audience reached up to 1,000 people and included families and community supporters. “The good news is that a healthy lifestyle is the smart and simple way to treat and even prevent diabetes. ‘I Play Sports’ is set to encourage the corporate community to take up a fun sporting activity such as football, as part of their regular routine,” Barakat concluded.

Hill & Knowlton

Leading regional communications consultancy Hill & Knowlton knows about the ins and outs of corporate social responsibility. As CEO Dave Robinson explained, “It is an area that we are deeply involved in. We all have intimate knowledge of the practicalities and theories of CSR, and we work with some of the largest corporations in the region, advising them on their CSR, so we know how to understand it and develop it.”

Central to Hill & Knowlton’s CSR initiatives are those that involve the education and health of children. One program to which the company has committed itself to for the past few years is the Arab Children’s Health Congress, a pan-Arab program designed to raise awareness on health issues that effect children in the Middle East. “The point of our involvement is that we’re able to contribute something to our community by using our expertise, knowledge and skills,” Robinson stressed. Hill & Knowlton’s other major youth-oriented CSR focus is its partnership with an INJAZ Junior Achievers Worldwide Chapter for the Middle East and North Africa, which familiarizes students with the concepts of entrepreneurship, business and commerce. As Robinson outlined, “Children are encouraged to understand the dynamics of the real world, it adds a dimension to their education that typical formal education doesn’t provide, and helps them to have better opportunities in the work world.”

Robinson also described another way that Hill & Knowlton contributes to the community. The company encourages its staff to become involved in various activities through volunteering. Employees use their free time, and occasionally their work time and resources, to involve themselves in community activities, social activities and environmental activities that they wish to be a part of on a personal level.

“We want to be involved in activities where we can meaningfully contribute; writing a check is a good thing, but it doesn’t actually engage you,” Robinson emphasized. The company invests approximately $50-100,000 worth of time per year to CSR activities, a distinct percentage of its profits. “We commit our time, we actively become involved, we become genuine partners in the things that we are trying to facilitate and organize, because they are things which we find personally important and worthwhile.”

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Since its first edition emerged on the newsstands in 1999, Executive Magazine has been dedicated to providing its readers with the most up-to-date local and regional business news. Executive is a monthly business magazine that offers readers in-depth analyses on the Lebanese world of commerce, covering all the major sectors – from banking, finance, and insurance to technology, tourism, hospitality, media, and retail.

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