Tuesday, 16 June 2009

Tale of two oil rich Arab socities


There was this article about Qatar:

It's reality TV, but not as we know it. While we have been gripped by the rise and fall of Susan Boyle on Britain's Got Talent, viewers in Qatar are tuning in to Stars of Science, a new reality show beamed across the Arab world, where brainy youngsters compete to produce the best invention.

Among the hopefuls is Hashem al-Sada, a 22-year-old Qatari who is not a star on YouTube, but has devised a tent fitted with solar panels for electricity generation. The show has deliberately eschewed the cruelty of booting out losing candidates: instead, they are invited to team up with successful competitors.

Stars of Science encapsulates the huge faith Qatar puts in research and innovation; the contrast between it and our version of reality TV also says something about the arrogance of assuming western cultural values are automatically superior, though that's another story.

It is not just the TV that is different in Doha. Flying from a downbeat London into the vast, pristine international air terminal is like arriving in another world. The commercial property market in the UK is on its knees, but in the West Bay business district gleaming towers are springing up in the blistering 50C heat. They bear witness to the determination to reduce Qatar's dependence on oil and gas by building a sort of Canary Wharf in the desert - only without the excessive bonuses and the ruinous risk-taking.

While Gordon Brown's grip on government has been weakened by the crunch and the MPs' expenses scandal, the Emir of Qatar, Sheikh Hamad Bin Khalifa al-Thani, does not have to deal with the inconvenience of an electorate and has been able to press quietly ahead with plans to diversify the economy.

Dr Tidu Maini is executive chairman of the Qatar Science and Technology Park, set up to commercialise research in energy, the environment, healthcare and IT; he recently established an experimental facility with Qatari company GreenGulf to study solar-to-electricity conversion methods. "Instead of putting our money into a solar company in the UK or Germany, we are investing in our own country," he says. "There is nobody doing what we are doing in a comprehensive and strategic way."

With a dry smile, he adds: "But it's easy for us because we are a small country and don't have a corrupt parliament."

As Britain remains in recession, Qatar's per capita income has crossed the $70,000 (£43,000) a head mark, making it one of the wealthiest nations in the world. The Qatar Central Bank estimates growth of 7-9% for this year; the IMF predicts growth of 15-18%. Whatever: these are figures Alistair Darling would give his second home for.

Dubai, which has little in the way of oil and gas, may have gone through a highly leveraged boom and bust (see below), but Qatar is in a very different position.

It is currently running a small budget deficit - the first for nearly a decade - because oil prices have been low, although if they show a sustained improvement, that will be eradicated by the end of the fiscal year. But it has a good credit rating, and, most important, it has about 90 years' worth of oil reserves and more than 200 years of gas production. Not that there is any schadenfreude at Dubai's downfall; the feeling is that the whole region will have to support Dubai for the sake of collective credibility.

Neither have the Qataris got too overwrought about the recent rise in the oil price to a six-month high above $67 a barrel, which has led some commentators to speculate about a resurgence of the petro-powers. Opec, the oil producers' cartel, wants to see the price stabilise at around $75 a barrel, which it reckons is the level needed to ensure investment in new supplies. Whether or not that pans out, the Qataris are interested in moving beyond petro-power and rebasing their economy so they are not hostage to a volatile oil price.

Ahmad Anani, a partner in the Al-Tamimi law firm in Doha, says: "I don't think Qatar perceives itself as a petro-power in the conventional sense ... There is no interest in flexing their muscles like Vladimir Putin, or in blowing money in Mayfair casinos. They are using the money to develop the country."

Qatar has been cushioned from the global downturn by its position as the world's leading exporter of liquefied natural gas (LNG) - gas that has been turned into liquid form, making it easier to ship around the world. The UK is a big customer: the Queen and the Emir opened a new LNG terminal in Milford Haven last month. But despite the fact that LNG is a superb resource, the Qataris see no reason to rest on their laurels.

Phillip Thorpe, chairman and chief executive of the Qatar Financial Centre (QFC) Regulatory Authority, says: "Whether oil is at a sustainable level is anyone's guess. The real point is that there has been a maturity around the way the government is approaching oil and gas revenue. It is a wonderful bounty today, but what about tomorrow? There are decades of gas reserves and you would think it's a good reason to go to the beach - but that is not future-proofing the economy."

Thorpe is a key player in one form of future-proofing: the push to turn Doha into a regional financial centre - a Switzerland in the sand, with insurance and wealth management as major elements.

The QFC's headquarters, where Thorpe has his offices, are in a building that is only a few years old - though that makes it practically an ancient monument by the standards of West Bay. It started in 2005; now it has 113 staff and licensed its 100th institution at the end of last year, a Qatari full-service Islamic bank. Next month it will launch Qatar Insurance Services, a system for processing and trading between insurers and reinsurers, with 17 firms as strategic partners.

Another major initiative is the setting up of the Qatar Finance and Business Academy, to try to ensure there are enough well-trained local staff to run a 21st-century financial centre.

Jon Morton, QFC's director for financial development and a former deputy principal of Henley Management College, says: "We need to concentrate on middle-management talent - things like the English language, and a focus on the customer, not an internal focus."

The structure and the skills of the population are a serious challenge. Of the 1.5 million residents, only around 250,000 or so are native Qataris; the rest are expats. It means very few people will be supporting what could be a very large and turbocharged economic engine. Mohamad Moabi, assistant general manager with Qatar National Bank, says: "The challenge is to develop citizens for a post-oil economy. A knowledge-based economy is very important."

To that end, education is free from kindergarten to university level. The seriousness of the commitment to learning is manifest in Education City, a 14 sq km development on the outskirts of Doha that houses not only schools but outposts of leading US universities such as Cornell, Georgetown and Carnegie Mellon. As one British expat sighs: "If my kids were Qatari citizens, all my worries about education would be over."

Dr Mohamed Fathy Saoud, president of the Qatar Foundation, which backs Education City, says: "Human resources are more important than oil and gas resources. We are bringing one of the brightest facets of western civilisation to the region: the top universities. If you talk to people on the street they will be opposed to what the US and the UK did in Iraq, but this project is saying 'look beyond that to what these countries have contributed to education and research'."

The sheer pace of economic development is throwing up social and cultural issues. One is the situation of women. The Emir's consort, Sheikha Mozah, plays a highly visible role in a region where royal wives until recently were rarely seen and certainly never heard.

While it is a deeply conservative society, Qatari women can vote, drive and play a full part in the workplace: headscarves are a frequent sight, but the dress code for women is not as strict as in Saudi. Dr Sheikha Abdulla al-Misnad, president of Qatar University, says about half her staff and 70% of her students are women. "We are very proud of how well our young women are doing, but there is an issue about our young men. Girls work hard and get better grades in high school, while young men drop out." Girls have been high achievers partly because of cultural expectations, she adds.

"Society expects women to work in a safe and professional environment, in a high status job, not to be in low-skill jobs and this is part of the reason why they are they are so determined to succeed academically. It is creating social problems because women are finding their marriage suitors are less qualified.

"The number of single women is increasing. It is difficult for lots of young professional women to find a husband. People don't have taboos about women in education because when education started in Qatar it started for both men and women from the outset, unlike many universities in the West which had been were exclusively for men for decades before women were granted access to higher education."

None the less, the divide may be creating social tensions simply because the women are finding many eligible bachelors less qualified than they are. While the Qataris are keen to show visitors their sunlit uplands, one does have a sense of a reserved, multi-layered, complex society where difficult topics are not discussed, particularly with western journalists.

Qatar has been keen to establish itself as the focal point of the new Arab media: its flagship broadcaster is Al-Jazeera, founded in 1996 and regulated by the UK's Ofcom in the hope of fending off accusations of bias, and the Doha Centre for Media Freedom was set up last year.

Participants don't pull punches in the Doha Debates, a forum for free speech tackling the region's thorniest issues. In the most recent, the vote was in favour of letting Muslim women marry men of their choice. However, the media has a deferential air and the line is that the press should be free, but "respectful".

Thorpe, who was pushed out of his job as head of the Dubai financial regulator after objecting to interference from above, says he is able to operate in Qatar without fear or favour: "The message being sent out by the Emir and the government is that everyone has to abide by the rules."

But it's important to remember who makes the rules. The Emir, who deposed his father in a bloodless coup in 1995, may be an enlightened monarch who has moved towards democracy, but there is no doubt who is in charge.

The credit crunch has led to greater questioning of the western economic and social model. As Moabi says: "Excessive risk-taking and innovation in financial products really hurt the financial system ... Who would have thought that GM would be filing for bankruptcy? We don't have MPs abusing expenses, or Madoffs. Our image of western people is not tarnished, but our image of the system is."

Like the UK, Qatar is a small nation punching above its weight. Like the UK, it wants to become a knowledge-based economy. Like Tony Blair, it has a leader who believes in education, education, education. Perhaps - unlike the UK, which failed to husband its oil wealth - it will make wise use of its windfall.



And there was this article about Saudi Princess which does reflect the Saudi society to some extent:

When Maha al-Sudairi's representative arrived at a Paris boutique bearing a vast order for top-of-the-range lingerie, payment to follow, the owner did not hesitate.

As well as being a valued customer for eight years, the Saudi princess is married to Naif bin Abdulaziz, the country's interior minister and one of the most senior members of a royal family not known for struggling to pay bills, even ones for €70,000 (£60,000) in undergarments.

But, more than a year later, Jamila Boushaba, who runs the O Caprices De Lili store, says she is still waiting for her money – as, it is reported, are a whole series of luxury shops and hotels dotted around the French capital's most exclusive arrondissements.

The princess's creditors reportedly also include the fashion chain Dior, jewellery outlets Chaumet and Victoria Casal, and at least one luxury hotel. She is currently holed up inside a suite at the George V, one of Paris's finest hotels, owned by her nephew, Prince Alwaleed.

The story emerged after Boushaba, frustrated at endless broken promises for payment, went to the press to try to shame her customer into settling her bill. The boutique, one of the most upmarket lingerie shops in Paris, is opposite the George V and was regularly frequented by Sudairi and her family. "She was a customer for eight years, and a very good customer. She always paid on time," Boushaba told the Guardian.

The problems reportedly began a day after the princess's staff removed the dozens of bags of undergarments to the George V on 1 June last year. "I went to the hotel the next day to collect the payment, as usual. I was kept waiting for hours and then told they would drop it into the shop the next day. I waited and they never came," added Boushaba.

Thus began weeks of calls to the princess's suite ("It was always, 'Tomorrow, we'll pay tomorrow'") before Boushaba managed to see the Saudi ambassador, who said he could do nothing. She then talked her way into an audience with a visiting envoy from the Saudi royal family. The response? "He just told me, 'I'm afraid we can't go around settling bills for the princess's knickers.'"

With bailiffs' letters ignored – the princess enjoys diplomatic immunity – Boushaba says she is running out of options: "It's €70,000. It's nothing to them but it's a lot of money to me. We're not Chanel, we're not one of the big chains. There's just one shop, me and two members of staff. It's put me in big trouble.

"When I called last one of her staff asked why I went to the media. I said it was to get my money. He replied: 'What, you've caused all this trouble and you still want your money?'"

According to French newspapers, up to 30 businesses are in the same boat, among them the sumptuous Hotel Crillon, where the princess reportedly based herself before decamping, bill unpaid, to the George V. The Crillon refused to comment.

Another disgruntled shopowner is Jacky Giami, proprietor of Key Largo, which sells extremely upmarket leisure clothes such as €600 jogging trousers. After the princess's relatives stripped his shop of €140,000 of stock – 7% of his annual turnover – and then failed to pay the bill, Giami spends his days waiting at the bar of the George V in the hope of seeing a member of her entourage to confront.

"We know the family well – they're in Paris a lot. It's not the kind of customer where you ask for a deposit, or to see a piece of identity," he told Le Parisien.

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