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IntroductionFRIENDSHIP THROUGH TRADE

CONTENTS

Arab Investment 4

Interview with Philip Monk 4

UAE cabinet's first woman 5

Successful trading and investment 8

Women in charge of business 9

Tourism 10

Key Personalities 11

This is not to blame the media. Howcan journalists not cover the Israeli-Palestinian conflict, the Iraq war andits aftermath, Lebanon and the griz-zly al Qaeda-inspired bombings thathave hit the Arab world probablyharder than anywhere else? By re-ducing an area covering five millionsquare miles and a population of over300 million to a conveyor belt of vi-olence and extremism, you miss,amongst other things, the huge anddynamic interaction between Britainand the Arab world that is not onlyprofitable but vital.

The world has shrunk, and our tieswith the Arab world are so intercon-nected at so many levels that they areimpossible to separate.

Every year thousands of Arabscome to Britain to study. If you checkout the ruling elites in the Arabworld, they are peppered with thosewho have studied or trained inBritain, from Mu’ammar Qaddafi ofLibya, to King Abdullah of Jordan,and Bashar Assad of Syria. Despitesometimes acute political differencesand a less than perfect coloniallegacy, there is still a tender fondnessfor Britain in many corners of theArab world. Conversely, more andmore British people are moving to theArab world to work and live -100,000 in the United Arab Emiratesalone. Second homes in Egypt andMorocco are steadily becoming moreand more popular. Arab investment inthe UK has also shot up, buyers spent£1.5 billion on real estate in Londonin 2005.

Trade and business between Britainand the Arab world has been thriving,boosted only in part by high oilprices. In 2005, the total UK-Arabtrade was worth an impressive £16

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Britain and the Arab worldMention the word Arab and a whole toxic cocktail of images surface; largely of war,bombings, terrorism, extremism, and other horrific stories. The media has served up agory diet carving an imprint on its consumers of a nightmarish corner of the planet thathas witnessed little but death and disaster, writes Chris Doyle, Director, Council for theAdvancement of Arab-British Understanding.

billion. As Britain has become a netimporter of energy, we are becomingmore dependent on hydrocarbon re-sources from the Middle East. TheArab world is frequently packaged asno more than one large mega petrolstation, but it will also be vital for ourgas supplies. By 2010, Algeria will besupplying roughly 12 per cent of ourgas needs. The rising gas giant Qatarwill then be providing us a further 20

per cent through the South Hook Ter-minal in Milford Haven. Equally,British companies are successful inthis sector, with British Gas being thelargest foreign investor in Tunisia,and BP likewise in Algeria. NorthAfrican states are desperate for moreBritish interest, to offset that shownby France and the US. The Arab oileconomies are also learning other les-sons from the past and are beginningto diversify and build for the future,with construction a thriving sector.Economic reforms are going forward

at differing paces, often too slow, butthese will feed into the political arena.

Britain should not be complacent. Itcan no longer take its position as oneof the Arab world’s key trading part-ners for granted.

Particularly in the Gulf, people arelooking east as well as west.

India, China, South Korea and Sin-gapore, are increasingly major mar-kets. Russia stalks the region seeking

to exploit the bountiful supply of anti-American and anti-British sentiment.

There is also a new generation ofArab businessmen, many of themprofessionally trained in the US or inEurope. Unlike in the 1970s and1980s, these ambitious young lionsdemand higher standards and are nowalkover in business negotiations.The private sector is burgeoning,more efficient and very ambitious. InSaudi Arabia, it is well above 50 percent of the economy. The Arab com-mercial classes are competing in the

global market like never before.The UK-Arab trade relationship is a

rich and fruitful one that needs care-ful nurturing, adapting to the new cli-mate. If British businessmen still seethe area as one large golden cow tobe milked, they will fail. Politicianscan soil these links too, as the wholeIraq fiasco threatened to do. It hasundermined one of Britain’s core as-sets in the region – a reputation forhonesty and fair play.

Both the politics and the business canbe improved by greater attention tolearning about the language, cultureand history. The impression is thatBritish businessmen dealing with theregion understand this better thanpoliticians. One senior British politicianleaned over to me whilst we were on aflight to Riyadh, and asked “what is thecapital of Saudi Arabia?” Another,thinking it was the norm, had the habitof giving shocked senior Arab counter-parts large bear hugs as if he hadknown them all his life.

Both politicians and businessmenneed to show more courage and daring.

The former need to help the regionfind imaginative and creative solu-tions to its crises rather than stokingthem, and try their utmost to avoid amilitary conflict with Iran. To do this,they need to listen more carefully tofriends in the Arab world whose po-lite advice they have too often casteaside. British businessmen will haveto adapt fast, and show some of theentrepreneurial zest seen more oftenamongst their American and Frenchrivals, or we will miss out. But aboveall, politics and business in the Arabworld, perhaps more than anywhere, isa people business, where friendship isparamount. Here friendships are for lifenot for a contract or an electoral cycle.

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Arab InvestmentFRIENDSHIP THROUGH TRADE

Taking the high road to investment in Iraq

Building Arab trade on a banker’s dream

Kurdistan tends to feature only rarely in the news from Iraq and for investors no news is definitely good news,for the region is quietly getting on with building the future.

These are boom times for the Kurds whohave an unprecedented opportunity todevelop their homeland with minimalinterference from the central govern-ment in Baghdad.

The Kurdistan Regional Governmenthas established a liberal framework forbusiness and investment which offersinvestors incentives including customsrelief, tax holidays and the freedom torepatriate profits under a law ratifiedin the summer of last year.

The government has set out its priorities as being the development ofagro-industries and dairies by encouraging factories, research insti-tutes and technical colleges that sup-port such activities.

The government is also set on reforming the health and educationsystems, establishing financial insti-tutions and developing tourism.

The area is entitled to some 17.5per cent of government oil revenuesbut at the moment gets somethinglike 8.5 per cent, but that is still goodmoney in these times of high oilprices. And there is plenty to be donerepairing the damage done during thedepredations of the Saddam Husseinyears.

So there are opportunities in infra-structure and housing, the regionalgovernment has 1.5 million unit

deficit in affordable housing, and theauthorities are looking at public-private partnership methods of meet-ing that need even as much more lux-urious developments speed ahead.There are already a series of develop-ments in place including the Englishand American villages and a futuris-tic development, far removed fromthe Kurdish experience of living, ti-tled Dream City which features multi-storey buildings which will spreadover a one million square metre site.Just across from this development ajoint Kurdish-Kuwaiti team is plan-ning a $100 million hotel and officecomplex. A convention centre willsoon be inaugurated and a reportedly$1 billion shopping mall is underconstruction in the centre of the city.

Basically the area is import-depen-dent for virtually everything it uses sonot only construction and engineer-ing expertise is in demand but goodstrade is an important part of theeconomy. Not surprisingly, Turkishbusiness is active but through theirlong experience of having to dealwith the world at large, in trying toset a homeland state, the Kurds arelong-accustomed to hedging theirbets and welcome support from West-ern sources in an area which has al-ways lived on the edge.

The financial sector is not only severely underdeveloped, but whatbanks there are suffer from chronicdistrust on the part of the popula-tion. This stems from the two occa-sions on which Saddam Husseinsent columns of lorries north fromBaghdad and simply relieved thebanks of all their cash. Not surpris-ingly the locals are unwilling tomake any further unsolicited contri-butions to the central governmenton that scale.

At the present there are no bankspresent offering retail services. Twoforeign banks have set up business sofar, Dar es Salaam, 80 per cent ownedby HSBC, Lebanon’s Byblos Bank,while Bank Audi also of Lebanon issaid to be in negotiations to establishitself.

Michael Thomas, director-generalof the Middle East Association(www.the-mea.co.uk), the premierroute for British business into theMiddle East, says that the opportuni-ties are there for the taking against abackground of positive attitudes towards Britain engendered by thesizable Kurdish population in northLondon. He has already taken onetrade mission into the region and willtake a second this autumn from October 7-10.

And despite the indifferent securityin other parts of Iraq Thomas says“it’s just like flying in to Istanbul.” ‘It’is the newly redeveloped airport at Irbilwhich will add a new £300 millionterminal next year, designed byBritish consultancy Scott Wilson tomatch its already impressive 14,000-foot runway. The peshmerga, the legendary Kurdish guerrilla fighters,provide security and ensure that this isperhaps the safest area in the country.

Just as education is a priority forthe Kurds so it is for the Arab leadersof the Gulf states as they seek to builda post-oil future for their countries.Dubai’s Knowledge Village typifiesthis desire to create new generationscapable of matching the rest of theworld in the new knowledge-intensiveand high-tech age.

Britain is already represented bypublic schools Wellington and Reptonwith local presences but the other Anglophone countries make strongcompetition and in the medical spherethe Americans are particularly strong.But other outlets will be welcomed inthe education field as the youngergeneration of Gulf Arabs take up themantle of development at a junctureunmatched since the oil boom of the1970s.

The huge amounts of cash that are

washing through the region meanthat there is urgent need for moresophisticated banking and financialservices. “I feel there’s a major oppor-tunity in the financial services sector,”said Richard Sidery, director of JasperCapital, “and that’s been evidenced bya lot of the banks coming in. Thereare two types of banking required,retail commercial and investmentbanking, however they really need tomodernise to efficient, Westernstandards. It’s a relatively young areain terms of having a complex financialservices sector.”

But there are key developments inthe area of legislation that confirmthat the government understands the

Few people are given theopportunity to lead a bankand still fewer to shape anew vehicle in a market asdynamic and multi-facetedas London.

But for Europe Arab Bank the Cityrepresents the ideal launching pad for apan-European business which spans theworlds of the Middle East and Europe.

“Few people not only have the opportunity to lead a bank,” saidPhilip Monks, chief executive officerof Europe Arab Bank, “but to start itfrom quite meagre beginnings andpropose a vision to the board which

is then accepted. Then to put in placethe strategies behind that and to re-cruit some absolutely fantasticpeople… I have to pinch myself toremind me it’s not a dream.”

Thanks to the vision of the man-agement of Arab Bank, EAB can nowdraw on all the traditional strengthsof its parent—a series of branchesacross Europe and the Arab world—whilst retaining its independence toshape a cohesive pan-Europeanbusiness which is unique.

“We’ve created a pan-Europeanbusiness that acts as one. Previouslythere was no linkage between thebranches or the subsidiaries of ArabBank in Europe.”

But it has not come easy despiteMonks’ relaxed, confident air “We’vehad to rewrite every policy; everyaspect of this Bank has beenre-engineered.” In the re-structured

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Arab Investment FRIENDSHIP THROUGH TRADE

Her talent and determination carried her through to this senior post whichis now at the cutting edge of attracting new investment into the UAEwhich is expected to hit £7 billion for the current year.

She is also behind the drive to liberalise the UAE economy to make it moreattractive to foreign investors by removing the stipulation that local figuresmust hold at least 51 per cent of any concern. Lifting that provision is expected to lift the floodgates on what is already a lively traffic in theflow of funds.

The sheikha cuts a dynamic figure whether she’s talking up the UAE inthe United States or trying to encourage more local women to becomemore involved in business—her latest idea for doing that is to launch herown line of fragrance, Mukhalat Al Sheikha Lubna, which is described as“floral, energetic and powerful”, much like its backer.

The sheikha was born into one of the royal families ruling the emirateswho controlled two of the smaller ones, Sharjah and Ras Al-Khaimah.Her father ran Sharjah airport where the Royal Air Force had a base.Through an RAF man there he learned English, opening the way, yearslater, for his daughter to study on an exchange in Kent. She was due tocomplete her A Levels in Brighton but dropped out to study computerscience and systems engineering at California State University—pursuingher love of science and technology.

Joining an Indian software development company back home shefound herself the only Arab and the only woman.

She made her first big breakthrough when she joined Dubai PortsAuthority. She quickly made a mark by developing a new method of com-puterising the manifest system so that processing was speeded up. Hersystem reduced the time it took to handle a container from one hour toten minutes.

No wonder that she was the recipient of the UAE’s DistinguishedEmployee Award in 2000—the first woman to be awarded the honour—and to be invited four years later to become the first woman to serve inthe country’s cabinet handling the economy and planning portfolio.

need to establish a more Western styleframework for doing business. Thefirst is a set of new laws which removemore commercial activity from the gov-ernment and place it with the privatesector. “Essentially you’re replacingpatronage with a structure”, saidSidery and thus ensuring a moreeven-handed approach for newcomersinto Gulf markets. “It’ll happen,” saidSidery, “but perhaps a bit slower thanpeople expect.”

The stock market, however, remainsfocussed on a fairly narrow base.“You need to get a broadening of thebase of banking and finance,” saidone expert, “there is a need to seemore Initial Public Offerings, more

flotations, simply to get more liquidityinto the stock markets.” As it is, Gulfmarkets are prone to wild fluctuationson a narrow base which can give anincorrect indication of the underlyinginherent strength of the market.

The next piece of key legislation inprospect would change the requirementfor local sponsorship of companies: atthe present a local sponsor is requiredfor any company venture a foreignerenters which means a minimum of 51per cent held by the local partner.There has always been a strong argu-ment against that since it deprives in-ward investors of control of theirprojects. There is domestic resistanceto this notion but there seems little

doubt that were this barrier to be re-moved it would boost the amount ofinward investment.

Resistance to foreign ownershipwill no doubt change over time butthere is still a tendency for Arabs tocling to bricks and mortar as the in-vestment with which they feel mostcomfortable: “They like somethingsolid, something they can put theirhands around,” adds Sidery. And forthat reason this is a strong sector tobecome involved in given the chronicshortage of real estate in Dubai, par-ticularly, for residential and commer-cial use. The waiting list for officespace in key parts of Dubai stretchesout to 2008.

business Europe representatives re-port back to the London headquarterswhich is run down business, ratherthan country, lines. “We don’t actu-ally have any country managers,”said Monks. Sector experts are oftento be found in individual Europeancountries, wherever the particularindustry focus is to be found at anygiven time.

But Monks was adamant that thiswas not going to be a bank that wouldjust move in and do the obvious: takinga slice of Middle Eastern-European business, it will offer an understanding of the client’s industry“at a very deep level” across the Mid-dle Eastern-North African region.

The Bank is competitive with any-thing in the market, this enables peo-ple to structure transactions whichare appropriate not only to theirneeds, and those of the specific in-

dustry, but increasingly to do it in away which is sympathetic to the Mid-dle East region.

Corporate banking and project fi-nance have rapidly evolved, since theBank won its licence in May of lastyear, not only across traditional areasof activity such as oil, gas, commodi-ties and trade finance but into leisureand hotels and in third sector activi-ties such as government institutionsand charities. Bank experts are to befound on conference stages acrossthe Middle East and Europe, walkingthe walk and talking the talk of theirsectors after Monks attracted some ofthe City’s most experienced bankersto his side.

Monks interprets the vision ofchairman Abdel Hamid Shoman tomean the use of Arab Bank to facil-itate the Middle East in developingits position in the world in terms of

its culture, and financial and politi-cal prowess. “I see Europe Arab Bankas facilitating that in terms of intro-ducing and helping European corpo-rates and European subsidiaries ofAmerican companies to build andhelp the Middle East to build and de-velop,” he said.

Originally the business was sched-uled to be reconstituted legally andstructurally by May next year, but thetask was completed in December lastyear — a huge turn-around.

Evidence of the Bank’s success, andthe satisfaction of Arab Bank’s management, came when they recently allocated a further 200 millionEuros capital to bring the total to 700million. By the end of the year, saidMonks, the Bank’s book will be val-ued at between two billion and three billion Euros while EAB has been al-located an A- credit rating.

UAE cabinet’sfirst womanThe classic textbook case of success for a woman inthe Arab world is Sheikha Lubna, the first female tojoin the cabinet of the United Arab Emirates (UAE)and the first woman to become an economy minis-ter in an oil-rich state.

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EconomyFRIENDSHIP THROUGH TRADE

The Kuwaiti fund now has some $100billion in assets including its recentpurchase of a 3.1 per cent stake in theEuropean Aeronautic Defence andSpace Company. Yet it is far from thelargest with the Abu Dhabi InvestmentAuthority reportedly having some$500 billion under management.

Afnan Shuaby, the incoming secre-tary-general of the Arab-BritishChamber of Commerce, attributessuccessful trading and investment between Britain and the Middle Eastto the recognition that it’s not merelya business relationship it’s also afriendship which goes back years andyears.

“It’s very important to know thingsculturally about the other partner—itreally makes a difference and it leadsto better business successes. I’m notjust doing the business with you andthen I’m not going to know you. A lotof business is going to come througha good friendship, a good relationship.We’re all after the same thing, lookingfor good business opportunities,” shesaid.

The majority of recent sovereignfund activity has been centred onclassic big name Arab purchases suchas Delta Two, an arm of the Qatar Investment Authority, which is

Britain’s a target for Arab investmentDespite the strength of the pound Britain remains afavourite target for Arab investors with oil and gas revenues to spend. Ever since the Kuwait InvestmentFund was set up in 1960 to channel the emirate’s wealthinto profitable Western ventures as the first sovereignfund, Britain has grown used to this kind of attentionand the mutually beneficial relationship is recognised onboth sides.

pursuing an attempt to buy the wholeof the J Sainsbury supermarket chain.The fund, which controls $40 billion,already owns one quarter of the firm.Dubai Ports Authority’s purchase of P& O was another classic form of Arabacquisition but it is likely that the approach will now change for awhole range of reasons.

One of the targets is likely to be educational assets in Britain as thecountries of the Gulf Co-operationCouncil seek to develop the potentialof their home-grown talent.

But there is increasing recognition,according to Shuaby, that the smalland medium sector companies inBritain offer a wealth of talent andinnovation that are unique to thecountry. “There’s an endless list of somany things that specialist firms inthe UK can offer that no-one else hasand the British product is greatly admired,” she said.

But the scene has changed dramat-ically since the days when Kuwaitlaunched its fund. The principal hasbeen widely emulated as countrieslook to protect their national patri-mony. Singapore was characteristicallyone of the first into the field with thelaunch of Temasek Holdings in 1974.Temasek now has an $85 billion

portfolio with stakes in such bluechips as Singapore Airlines, StandardChartered Bank of Britain and theChina Construction Bank. The Government of Singapore InvestmentCorporation, created seven years later,has a portfolio of overseas bonds,property and equities worth an estimated $200 billion.

With the decline in the appeal ofUS government bonds, following thedecline in the value of the Americandollar, investment in key foreign firmsand institutions has become evermore attractive. But it is also becomingpolitically risky as governments, particularly the Americans, exam ineach deal in turn, ostensibly on national strategic and securitygrounds, but also undoubtedly out ofconcern that these funds will now increasingly represent large sums ofmoney which are not flowing into USbonds to keep the American economyafloat. Dubai Ports World found outabout the political risk when theybought P & O and subsequently hadto divest themselves of five Americanports that came with the deal eventhough there would have been nospecific Arab presence on the groundin the United States.

Japanese, and more recently, Chinese funds, have played a key rolein permitting Americans to enjoytheir heavily-indebted lifestyles. Thenaïve days of the first Kuwait fundare long gone with estimates of$2,500 billion now said to be in thefunds and a whole raft of new andpolitically ambitious players in the field.

The entry of the Russians and Chinese into this arena has broughtconcerns that strategic positions canbe built in key Western industries

over which domestic governmentswould have no oversight. The particu-lar deal which drew attention to this aspect was in normally open Britainwhere a Russian attempt to take overCentrica, a company which distributesgas to much of the British market,brought considerable concern. Butthen President Putin’s approach to theWest of late has not been particularlyfriendly.

Unfortunately for the sovereign fundsthese questions have arisen just as private equity funds have reached newheights of power and influence acrossthe world. And both types of fundhave one fact in common—neither is aparticularly transparent way of doingbusiness—and that is attracting atten-tion at the highest levels of businessaround the world.

Angela Merkel, the German chan-cellor, has said that she is consideringways of creating legislation thatwould make it harder for Germancompanies to be taken over by sover-eign wealth funds. The Germans seemto be verging towards a system ofvetting potential acquisitions andsubsequently blocking them in sensi-tive industries.

That approach is not endorsed byPeter Mandelson, European UnionTrade Commissioner, who believesthat could deter potential purchasers.He would prefer a system of “goldenshares” where a government retains acontrolling interest in a sensitive industry that is deemed to need protection. He wants any system to bepan-European to avoid distortions ofthe single market.

It seems clear from the facts thatthe Europeans are really concernedabout Russian influence and control

of their energy markets since thestake in EADS bought by the Kuwaitisaroused not the least concern fromthe French and Germans.

The American government is onrecord as saying that their concern isthat sovereign funds are not subjectto ordinary market conditions sincethey are in the management hands ofcivil servants who are not respondingto the publics of their nations onwhose behalf they are investing.

There is a strong sense that officialattitudes in Western developedeconomies seem to be selective to saythe least. But the reality is that in theinternational marketplace Americanattitudes will have to be placated andso the issue will be on the agendawhen the International MonetaryFund gathers for its annual meetingin October. The key will undoubtedlybe transparency because, much as theAmericans may hate it, there isprecious little they can do to stop somuch worldwide liquidity from beingmopped up by sovereign funds.

Fortunately there is a model onhand in the Norwegian GovernmentPension Fund which has been invest-ing much of the country’s North Seaoil wealth over the years. It now hassome $300 billion on hand. Thegovernment lists all its holdings on itswebsite and makes the whole processaccessible by international standards.That is likely to be a suitable modelfor the IMF gathering. If that modelfinds favour with the IMF then MiddleEastern states will need to takeaccount of the changes but one thingis certain: the competition to attractinvestments from the sovereign fundswill be no less intense.

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Afnan Shuaby, a Saudi from Riyadh,is taking up the post of secretary-general with the Arab-British Chamberof Commerce. She is delighted notonly to be facing the prospect ofworking in Britain to boost trade withthe kingdom but also helping to elevatethe position of women in the MiddleEast workforce.

The popular perception of life foryoung women in Saudi Arabia is thatthey will go through a segregated education system in which they arenot allowed to study alongside menand, no matter how well they do,have little chance of joining theworkforce in a capacity which makesthe best use of their talents.

Making their markFor the majority of Muslim womenthat generalisation holds true but formore and more of them they are ableto make their mark. Muslim womenare reaching senior levels in MiddleEastern companies, more women arewinning ministerial posts in govern-ment, such as Sheikha Lubna, economyminister of the United Arab Emirates,and an increasing number of the mostwealthy individuals in Saudi Arabiaare women.

For Ms Shuaby the conventionalrules did not apply not least becauseshe was ambitious from a young ageshe used to tell her mother that shewould run a company that would bequoted on the stock exchange. Hermother used to warn her not to be tooambitious. Clearly she took no noticebecause today she has gone consider-ably further by helping guide the fortunes of many companies firstthrough the Saudi-American BusinessCouncil in Washington and shortlyshe will do the same with the Arab-British Chamber of Commerce.

Out in frontThe oldest of a family of two girls and two boys she was always thebusiness manager of the household.Even from a relatively young age, shewas the one who negotiated betweenthe generations of the traditionalArab household. “I was usually theperson put in front to ask anything

● London is a key centre for Middle Eastern banks and several new ones have recently taken up residence.

● More than one hundred of Europe’s 500 largest companies are represented in the British capital.

● It is home to the European headquarters of one quarter of the world’s largest financial companies.

● Some 25 Middle Eastern banks have representative offices in the City.

● The London foreign exchange market is the largest in the world with an average daily turnover of $504 billion.

● Along with The European Bank for Reconstruction and Development more than 550 international banks and 170 global securities firms have set up offices in London, dwarfing competing cities on continental Europe and the United States.

● In the derivatives market the City leads the world with 36% of global turnover.

● It is the globe’s largest fund management centre managing funds valued at $5,500 billion or almost half Europe’s institutional capital worth.

● More than half of the global equity market and seventy percent of Eurobonds are traded through the City.

● With £24.6 billion in gross premiums in 2002 the Londoninsurance market is the largest in the world.

● Lloyd’s of London is the world’s largest insurance market provider of specialist insurance services to businesses in more than 189 countries.

● Many of the international shipping organizations have their headquarters in London including the International Maritime Organization and it still rivals other maritime centres such as Hong Kong, Singapore, New York and Athens. The sector contributes about £1 billion a year of invisible earnings to the British economy.

● The market place of the world’s shipping industry is in London where the Baltic Exchange is the only fully estab-lished and self-regulated centre for brokers dealing in ships and cargos. It provides an online exchange for ships and cargos and real time freight derivative trading and freight market data.

● The Lloyd’s Marine Intelligence Unit offers instant business-critical information serving the needs of the global shipping market with shipping data from any pointon the globe.

● The city makes an ideal platform for the formulation and agreement of deals on foreign investment and other financial transactions. Between 1997 and 2004 outflows of foreign direct investment exceeded inflows of such investment coming into Britain. In 2003 and 2004 when outflows were £19 billion a year the inflows were £4 billion and £11 billion respectively.

● The net overseas service earnings and investment income of banks based in London has been rising strongly. Over the five years from 2000 it rose from £5.6 billion to £20.7billion.

Putting a woman incharge of businessIf the trading relationship between Britain and Saudi Arabia has recently experiencedmixed fortunes things are about to get a lot better. One of the Arab world’s most underrated assets—their women—is about to become central to the relationship.

from people senior in the familywhether it was my father or grandfa-ther because they took Afnan’s wordnot because I was favoured or any-thing.”

Her father seems to have made apoint of making her feel important inthe family. “You know parents like toinvolve you to show how importantyou are. At an early stage I wasknown as a good negotiator.” Her secret was to study the scenario carefully in advance and find the bestway to deal with the person. “I don’tlike to hear the word No, so I wouldstudy carefully.”

“I always used to tease my motherand say ‘I want to be a business-woman and my company will go onthe stock exchange and you will see itgo up and down everyday.’ She waslike ‘don’t be that ambitious’ buteverything starts with a dream andhard work,” she said.

Single sex triumphFar from being a handicap Ms Shuaby says she flourished in singlesex schools and notes that many ofthe world’s elite educational institu-tions remain segregated to this day:“I don’t think that will change. I cameout of a very strong educational system and I’m proud of that systemand I completed it and here’s where Iam today.”

Some of her early education was inDurham where her father was taking a

PhD in city development and planning.From that she has developed a life-long affection for the country andwhenever she was travelling to theUnited States for further educationafter completing an English degree atKing Saud University she would stopover in Britain as though it were asecond home. Of her appointment shesays she’s “honoured and thrilled.”

Saudi elitist workersFor the most part working Arabwomen tend to be highly educated,even elitist. There is a string of femaleministers through the Gulf states andKuwait but in Saudi Arabia that is un-thinkable and capable Saudi womenhave to rise to the top outside theirown country. That may start to changewith Saudi Aramco the big Saudi oilcompany whose total employment isabout 60,000 of which some are Saudiwomen in a range of jobs.

Some might regard Saudi Aramcoas something of a special case but onthe Arab street the sheer economicpressure on families means that moreand more women are compelled to tryand take work to make ends meet. Butthat does not mean that conservativemen like the notion.

But here again the Gulf states areshowing the lead: while in Saudi Arabia women are not allowed todrive, in the emirate of Fujairah fourwomen have been awarded licences tooperate taxis.

Why London’s the place to be

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TourismFRIENDSHIP THROUGH TRADE

The Arab renaissancegets under way

From Spain to the Greek islands there are a lot of worried people in the travel busi-ness. New generations of internet-savvy travellers are finding the same old hot spotsso yesterday. Traditional sources of business—the annual northern invasion of touristsfrom Britain and Germany—are taking their euros elsewhere in search of new and exciting destinations that offer unusual experiences. Often the new destinations areprice-competitive with their old favourites and if they are not then they are willingto pay that little bit extra for something that will open their eyes to new and exotic cultures.

This is where old Europe meets thenew Middle East or rather where thenew Middle East takes off in a newrenaissance. The area is rapidlychanging tack as it anticipates theend of oil-fed prosperity and the needto diversify economies. Tourism is thenew oil; the new long-term source ofprosperity for which far-sighted rulersare preparing with investments in infrastructure and skill from whichEuropean investors, engineers, man-agers and holidaymakers can benefit.

With high oil earnings—$1.5 trillionover the past five years—and massivefunds in search of new opportunitiesfor investment and the need for expertservices from the West this is verymuch a two-way investment street.

As one expert on investment in theMiddle East put it:”There’s a new gen-eration of rich, well-educated young

Arabs who are highly motivated anddetermined to get ahead of their competition.”

And backing them they have rulerssuch as Crown Prince Sheikh Mohammed bin Zayed al-Nahyan,who is driving the development ofAbu Dhabi with his own vision of theemirate’s future in tourism.

Where once the Middle East lookedfor Western inputs in the oil businessnow they want broad-spectrum involvement and the opportunity tocreate regional cities that rival thebest Europe has to offer, competitionfor their more traditional Europeancounterparts.

Amazing opportunity“The Middle East has this amazingopportunity, stunning opportunity,”said Rod Taylor, head of hospitality

and tourism for EuropeArab Bank.“And they’ve been enlightened;they’ve woken up and realised thatthey’ve got to put the infrastructurein place.” Taylor has an infectious expertise and enthusiasm for the hospitality and leisure sector whichmust be unmatched in London. He isa self-confessed obsessive about thebusiness and family holidays willoften find him checking his hotelroom to see if the cleaners have cleared right up to the edge of theroom.

The Middle East is ideally suited fora new role as a focus of worldtourism: its geographical location isideal at the locus of east-west airroutes and is close not only to Europebut the Euro-Asian landmass—newlywealthy Russians are already pouringin—and Central Asia. Southern

Africans journeying north can alsodivert with ease into the region.

But perhaps just as important asclimate or geography, the countries ofthe Arabian Gulf offer personal qual-ities that no amount of money ortraining can create: Arabs have always been hospitable. The hostilityof the desert has a way of engenderingconcern for others, you never knowwhen you might need help yourself,but Gulf Arabs put a gloss on thatnatural quality built up over the centuries with a finely polished hos-pitality which ensures that they are attentive but not overly so. They areendlessly welcoming in a way whichputs any Westerner at ease: mutualrespect is the key.

Gulf tourism lineupBut what few people have noticed isthat the new Gulf tourism line-up offers a full spectrum of tourist expe-riences ranging from the peace, tranquillity and spectacular beachfront/mountain backdrops of Oman tothe frantic Dubai scene of nightclubs,bars and ski slopes. Counterbalancingthat is Abu Dhabi’s conscious move intoheadline-catching cultural offeringswith the first branch of the Louvreoutside Paris as well as an outpost ofthe Guggenheim museum. But creat-ing the cultural capital of the MiddleEast comes with a high price tag: theright just to use the name Louvre for30 years cost a cool $520 million andfurther art loans and advice will costanother $747 million. The new Lou-vre Abu Dhabi will be housed in aspecial $100 million complex mod-elled on a traditional Arabian soukdesigned by the French architect JeanNouvel. It will be part of a spectacu-lar $27 billion complex calledSaadiyat Island, island of happinessin Arabic, which will cover some 27square kilometres and open in a se-ries of phases beginning in 2012. Itwill eventually feature 29 luxury ho-tels and a park for a planned biennialarts festival.

In a real sense these ambitiousplans are merely restoring some of thecultural glory of the Arabs and lead-ing the way for the renaissance of theculture through cross-fertilisationwith European culture. Its backers believe that by the time the 30-yeardeal expires something new will haveemerged, hopefully matching the cultural heyday of Baghdad, Damas-cus and Cairo.

But the real test of this drive intoculture will be whether the local population is sufficiently attracted tokeep coming back. Cultural add-ons

help to win conference and corporatebusiness but to make the investmentwork overall you need year-roundlocal support.

Dubai has led the way in two areasof this endeavour: it was the first ofthe major oil-producing Arab statesto move into alternative means ofwealth-generation and it has there-fore become a proving ground forthose countries following on behind.It quickly realised that transportinfrastructure would be a key elementof success; not only in bringingvisitors into the country swiftly andefficiently but in putting the means inplace for them to travel around theemirate.

The problem here was that gettingaround might not present an incon-venience for a sheikh with a chauf-feur-driven car but it was entirelyanother matter for a tourist visitorwith no knowledge of the city. As aresult a metro system is now planned.

But if the Louvre and Guggenheiminitiatives were not enough toconvince potential investors that AbuDhabi is now placing itself at thecentre of the world then plans for thenew Dubai Central World CentralInternational Airport will certainly tipthe balance. It is planned to be theworld’s largest passenger and cargohub with a passenger capacity of 120million, fifty per cent more than theworld’s currently busiest airport forpassenger throughputs, and capacityto handle 12 million tons of cargoannually.

World’s favourite stopoverIf Dubai has its way it will become thestopover of choice between Europeand Asia not to mention the north-south route into Africa handlingaircraft up to the size of the newAirbus A380.

With six parallel runways each of alittle less than 15,000 feet the airportwill be capable of landing four aircraftsimultaneously 24 hours a day.

The three passenger terminals, with100,000 parking spaces which willalso serve the surrounding residentialand industrial area, will feature twoluxurious facilities, one dedicated toairlines of the Emirates group and onefor other airlines and the third forlow-cost carriers. Upon completion itis expected to be the fourth largestairport in the world in area with onlyKing Fahd International at Damman,Montreal-Mirabel and King KhalidInternational in Riyadh exceeding itin size.

South of Dubai, the airport will belinked to the current internationalairport by the metro. Foreign visitorswho now fly in from regional airportsacross Britain and Europe willapplaud that.

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Personalities FRIENDSHIP THROUGH TRADE

The Qatar government has committeditself to an investment programme ofsome $130 billion across all sectorsover the next 5 to 7 years, a programme that is helping to createone of the fastest growing economiesin the region. Qatar’s prospects aresoundly based on its fabulous wealthof natural gas. Next year it is due tobecome the world’s largest supplier ofthis vital element in global energy requirements.

There are ample opportunities tocreate new revenue streams in the emi-rate and the prospects look particularlyattractive for financial services companies.

The Qatar Financial Centre provides

Power and glory in the Arab worldSome of the key figures

HRH Prince Alwaleed bin Talal Al SaudThe prince is Chairman KingdomHoldings, Saudi Arabia and his businessempire stretches across four continents.He retains a worldwide top five rankingin terms of his wealth.

The prince recently joined forceswith other leading Saudi billionairesto bid for the kingdom’s third mobiletelephone licence. His most recent acquisition saw him linking up withBill Gates and Isadore Sharp, chiefexecutive of the Four Seasons group,to buy the hotel chain for $3.37 billion. He previously held 24 per centwhile his shareholding in Citigroup isvalued at close to $10 billion.

He and his companies have heldstakes in a wide variety of companiesincluding Saks Fifth Avenue, Apple

Computers, News Corporation andFairmont Hotels.

The prince is highly influential withclose ties to the British and Americanpolitical elites though he claims thathe has no political ambitions of hisown being content to bring aboutchange through his business activities.

Abdel Hamid ShomanMr Shoman is chairman and chief executive officer Arab Bank plc andchairman of Europe Arab Bank plc.He is the grandson of the late AbdulHameed Shoman, who founded ArabBank in 1930. From 1972 to 1976Shoman was executive regional man-ager for the Arab Bank branches inthe Gulf region and was subsequentlysenior managing director for 25 years.

In his previous capacity as a memberof the board and deputy president hewas chief credit officer for the ArabBank responsible for all lending activities and portfolio management.

On the death of his father, AbdulMajeed Shoman, in July 2005 he became Chairman and CEO of ArabBank plc.

Mr Shoman chairs a number of external boards including: Arab Bank(Switzerland) Zurich; Islamic Interna-tional Bank (Amman); Al Arabi Investment Group Co; AB Capital andArab National Leasing Company LLC.

Mohammed Ali Al AbbarAl Abbar is Chairman, Emaar Holdingsof the United Arab Emirates, who hasplayed a key role in the developmentof the emirate’s real estate sector. Thefirm is the largest construction and de-velopment company in the country. AlAbbar has been instrumental in thespectacular rise of the group’s profitswhich rose a stunning 35 per cent to$1.73 billion last year.

The firm is looking beyond the UAEwith projects now under way in otherGulf Co-operation Council countries,including the $30 billion economiccity planned for Saudi Arabia; Syria,Pakistan and North Africa.

Dubai’s iconic Burj Dubai is headingtowards becoming the world’s tallestbuilding but Al Alabbar is alreadylooking elsewhere for his next triumphand it is reported that he is lookingeast to China.

Sultan Ahmed bin SulayemSultan Ahmed bin Sulayem is one ofDubai’s leading businessmen and hashad great impact as executive chairmanof Dubai Ports and as chairman of Tejari.com a B2B market place and ofthe hugely successful real estate development company Nakheel. Hisfirm is best known for the creation ofthe Palm and the World, the extraor-dinary multi billion dollar man-madeisland residential developments offthe coast of Dubai which have attracted top name investors fromaround the world and brought unprecedented levels of publicity tothe emirate.

His most recent high-profile deal wasthe takeover of P & O for a purchaseprice of almost $7 billion. This turnedout to be a tricky transaction politi-cally, requiring diplomacy and patienceto bring it to a successful conclusionbut it has brought bin Sulayem enor-mous clout in the world of shippingand set the stage for him to outclasshis Far Eastern rivals in Hong Kongand Singapore.

Nahed TaherNahed Taher is chief executive of GulfOne Investment Bank in Saudi Arabiaand the first woman to hold such aposition. As such she is one of themost powerful women in the world.She has a PhD in economics from theUniversity of Lancaster. Forbes magazine put her in seventy-secondplace worldwide and dubbed her “The

Desert Rose” after she left commercialbanking to launch a $10 billionprivate equity fund.

She has certainly worked her way tothe top after three years as the senioreconomist at the National CommercialBank in Saudi Arabia where she wasthe only female employee among4,000 men. She founded Gulf One inBahrain in 2005 and the bank is nowfocussing on large-scale energy andinfrastructure investments estimatedto be worth $1 trillion over the next10 years.

HH Sheikh Ahmed bin Saeed Al MaktoumThe fabulous success of EmiratesAirline is largely the result of thecourage and vision of His HighnessSheikh Ahmed who is the airline’schairman and chief executive. Theairline has shown a profit for 18consecutive years achieving a re-turn of $762m on a turnover of $7billion.

Though the airline was foundedonly in 1985 it is now rated as theninth largest in the world with a fleetof 102 aircraft including 12 of the latest long-range Boeing 777-300ERs.The airline now serves 89 cities in 59countries and achieved a load factor of76.2 per cent last year with aircraft ofan average age of 63 months. The airline has recently added a third dailyflight to New York as well as new serv-ices to Beijing, Bangalore, Nagoya andTunis.

Qatar is all set for successThe wealth of opportunities for investors and industries in the Middle East can be measured from the speed of growth of the Qatar Financial Centre (QFC).

the necessary legal and regulatoryframework in which international financial services companies can operate.

The new Qatar Financial CentreTower on West Bay the two key elements of the Centre—the Qatar Financial Centre Authority and theQatar Financial Centre RegulatoryAuthority—and the numerous firmsthat have so far been licensed to operate by the Centre.

Stuart Pearce, chief executive offi-cer and director-general of the Qatar Financial Authority, says the newtower provides first class premises forcompanies setting up in Qatar. Withadditional premises being brought on

stream for licensed firms later in theyear, he believes the financial centreconcept has proved a major successfor the emirate.

The QFC Regulatory Authority is anindependent regulatory body estab-lished to monitor services conductedin or from the QFC. It has a broad rangeof regulatory powers to authorise, supervise and, when appropriate, disciplines firms and individuals. Thebody adheres to the highest interna-tional standards operating in Londonand elsewhere. In February of thisyear the QFC Civil and CommercialCourt and the QFC Regulatory Tribu-nal were established. The president ofthe court is Lord Woolf, formerly the

Lord Chief Justice of England andWales, while the court itself is mod-elled on the Commercial Court inLondon. In the event of disputes inmatters of law it is the final arbiter.

The Regulatory Tribunal was estab-lished to hear and decide upon

appeals arising from decisions of theQFC Regulatory Authority and otherQFC agencies. Its chairman is WilliamBlair, QC. Both the president andchairman are supported by judgeswho have held the highest judicialoffices in their own jurisdictions.

Mr Shoman is chairmanand chief executive officer Arab Bank plcand chairman of EuropeArab Bank plc

www.eabplc.com

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