Posts Tagged Qatar
Cheeseburger Pizzas, Designer French Fries and a Post-war Cinnabon: Fast Food’s Booming Middle East Market
According to a survey by MasterCard, Gulf consumers were the top three spenders on restaurants — UAE diners spent an average of US$229 per month, Qataris averaged US$211 per month, and Kuwaitis spent US$196 per month. The same survey found that 88% of respondents said they dined in shopping mall food courts.
Read the full story: http://knowledge.wharton.upenn.edu/arabic/article.cfm?articleid=2861
The ability to cut generous checks and bring sponsorship to a club is one reason why European soccer franchises have become investment targets for Gulf states and patrons. From Sheikh Mansour’s ownership of Manchester City and Qatar’s winning bid to host the 2022 World Cup, to a fanciful plan to open a US$1 billion Real Madrid-themed theme park in the UAE’s coastal emirate of Ras Al Khaimah, European soccer has lured healthy Gulf investment. Arab investors, in turn, seek brand association with the best of the world’s biggest sport.
Full story: http://knowledge.wharton.upenn.edu/arabic/article.cfm?articleid=2856
Nasser D. Khalili has built a renowned art collection that has been exhibited around the world, including in London and New York. Khalili says he has maintained a passion to show his treasures — not merely amass them — because of the power art has to connect and educate people. In an interview with Arabic Knowledge@Wharton at the recent Festival of Thinkers conference in Abu Dhabi, Khalili shares his insight into art collecting and how the market has changed with an influx of money. He also discusses the development of arts and culture in the Middle East and North Africa.
“I think it’s incredibly important, [if you are] calling yourself a collector, to make sure that you fulfill five criteria,” he notes. “You have collect, you have to conserve, you have to research, you have to publish and you have to exhibit… Don’t be a holder; be a collector. Only then could you consider yourself a collector, because you have contributed to the betterment of humanity and life. You have done something. If you are buying a few objects or roof of objects and taking them home only for your own enjoyment, don’t call yourself a collector, call yourself a selector for your own enjoyment.”
Read the full interview here: http://bit.ly/LMAhWE
As the U.K. government curtails funding to schools and colleges, University College London president and provost Malcolm Grant finds himself very popular with student protestors. But Grant acknowledges the burden put on students, who just over a decade ago enjoyed free higher education.
Grant says there are ways for schools to manage costs and still conduct worthwhile research and provide intellectual innovation. One critical step, he says, is greater collaboration between universities in researching key contemporary issues.
“Our view is in this globalized world it can’t be the universities alone that sit at home, we have to I think engage with globalization; and it’s not sufficient to do what we’ve done for decades, which is to have the world come to us,” he tells Arabic Knowledge@Wharton.
“Like most of the really research-intensive universities around the world, we are turning down huge numbers of proposals to establish ourselves elsewhere. We have to be able to do it at a pace that we can manage, because there’s a huge drawdown on senior management time to do any of these ventures. And we have to be satisfied that it fits with our mission and what we want to do.”
Read the full story here: http://t.co/1I8MsUIG
A new direction for Middle Eastern cinema has evolved with the Arab Spring. The revolutions have provided filmmakers with fresh narratives and wider global interest in Arab film, which has dovetailed with an appetite in the Arab Gulf to invest in culture and become a new hub for the industry, one long dominated by Egypt. Interest in filmmaking in the Arab world is also driven by newfound economic potential, both in domestic production and financing international films. Hajer Ben Nasr, a Tunisian documentarian, speaks to Arabic Knowledge@Wharton about the opportunities and challenges for Arab filmmakers. “It’s not yet an industry (but) some people now see an opportunity to make money,” she says.
Read the full article here: http://bit.ly/xJphPg
The Hormuz Strait is only 21 miles wide at its narrowest point. With shipping lanes only 2 miles wide to ferry a fifth of the world’s oil trade, it is a choke point in all senses of the word. If closed or blocked, attempts to reopen the strait would concern all of the world’s powers.
The obvious implications of any closure of the Hormuz Strait are stark. According to the U.S. Energy Information Administration, almost 17 million barrels of oil were transported daily through the Strait last year, representing nearly 20% of global oil trade. (Most Gulf oil exports now head to Asia.) A number of analysts predict prices for oil would jump 100%.
Closely neighboring Iran, most of the Arab Gulf countries would find themselves at risk and their economies under pressure. Instead of benefiting from a windfall from sudden increases in the price of oil, they would be dealing with increased security and logistical costs, a fleeing expatriate workforce, flight of investment capital and a squeeze on resource demands.
Read the story here: http://bit.ly/AmieD7
Stock markets in the Middle East have taken a financial beating because of Arab Spring protests this year. Since crowds flooded Cairo’s Tahrir Square, Egypt’s EGX 30 Index has lost almost 45% of its value; Saudi Arabia’s Tadawul All-Share Index has lost nearly 10%, while the Dubai Financial Market General Index has fell nearly 20%.
Arab exchanges were already weak because of the effects of the 2008 financial crisis, which exposed issues with sovereign debt in the Arab Gulf. Only two IPOs this year were listed in the exchanges of the Gulf Cooperation Council countries (Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman). Both were in Saudi Arabia, and generated US$219m, according to PwC Capital Markets Middle East.
But adding further injury, a much anticipated bid to upgrade the United Arab Emirates and Qatar to ‘Emerging Markets’ status by index compiler MSCI was thwarted again this past week. Currently both countries are part of MSCI’s Frontier Markets index; analysts say an upgrade would’ve channeled up to US$70 billion into Gulf markets.
MSCI has twice previously put off a decision about upgrading the status of both countries. It said it would look at the issue again in June, but noting that concerns remain about foreign ownership limits, market liquidity, securities lending, and limitations on short-selling.
It is expected that the UAE won’t be ready for another review in June, but it continues to push for reform on its exchanges. Last July, the Dubai exchange consolidated with Nasdaq Dubai, the region’s first exchange open to investors and issuers of any nationality. Investors hope for a merger now of Dubai’s exchange and that of Abu Dhabi, the UAE’s capital. Earlier this month, Standard & Poor’s announced it would launch an index comprised of the Arab world’s 40 blue chip companies, in a bid to open the market more to exchange-traded funds.
The World Bank is bearish on immediate prospects for the Middle East and North Africa (MENA) region, particularly hardest-hit Egypt, Tunisia and Libya. “Foreign direct investment flows [to the region] fell by 7% in 2010 and by another 16% in 2011,” notes a new report on world investment and political risk.
“Despite recent announcements of investment intentions in North Africa by other countries in MENA, short-term prospects are not promising. With Europe under economic strain and uncertainties surrounding the political environment of Egypt, Libya, and Tunisia, FDI into North Africa is likely to slump for longer and rebound more slowly than the rest of the MENA region.”
The report also notes that though some investors pulling out of the region or placing plans on hold, recovery should begin in 2013. “Despite the recent turmoil, the longer-term outlook for the region remains promising and companies do not view the present unrest as posing a long-term barrier to doing business in that region.”
Considering the effect the Arab Spring has had on protests around the globe, the World Bank report adds that as an offshoot, “the recent events in the MENA region have accentuated the risks of political violence and non-honoring of sovereign financial obligations — not only in that region, but also more broadly.”
Intent on cementing itself as an international flight hub, Dubai continues to invest in its airline infrastructure and brand new airplanes. The sheikhdom will invest US$5.98 billion to expand Dubai and the new Al Maktoum international airports by 2020, officials say. Meanwhile, the Dubai government-owned Emirates airline plans to spend roughly US$10 billion a year to expand its fleet over three years, including 18 cargo planes.
Demonstrating the increasing clout of Gulf airlines in the aviation industry, Airbus this week agreed to redesign its A350-1000 jet, after its Arab customers asked for changes that would allow the plane to fly further and carry more.
The government entity, Dubai Airports, recently forecast that international passenger traffic to Dubai would grow an average of 7.2% percent over the next decade, with passenger traffic reaching almost 100 million by 2020, and cargo volumes above 4 million tons.
Paul Griffiths, Dubai Airports CEO, told an audience in Bangkok recently that in less than a decade, aviation would account for 32% of the sheikhdom’s GDP—roughly US$45.4 billion. But in the same speech, Griffiths acknowledged that Dubai’s current airspace “is not currently configured to support this growth.”
Regional competitors will pose another threat to Dubai’s plans for aviation domination. Doha-based Qatar Airways is expecting to receive 200 jets worth US$35 billion, and is making a play for regional cargo business, converting 15 passenger jets to freighters and taking 33% ownership of Europe’s biggest freight carrier, Cargolux Airlines International SA. There is even competition from within the United Arab Emirates, as Dubai’s buttoned-down neighbor, Abu Dhabi, is undertaking major expansion plans for its international airport, and promotes its own airline, Etihad, which has ordered US$50 billion worth of jetliners.
Michael Wisbrun, managing director of SkyTeam Cargo, which includes the freight arm of Air France-KLM Group, told Arabian Business that such ambitious plans were of concern. “It will be tough. There’s no reason to have a hub in Qatar or the United Arab Emirates, and adding capacity with supply and demand as they are won’t help the equilibrium.”
There is need to question the sustainability of such growth, according to Wharton professors. Speaking with Arabic Knowledge@Wharton about the Gulf airlines’ push to become a global hub for air travel, Wharton management professor Peter Cappelli had noted that “only [a few] airlines in the world make money, and the industry as a whole loses billions every year. Fundamentally, the nature of the industry is the problem: The marginal cost of filling an extra seat is almost nothing, so whenever the carriers have excess capacity, they have fare wars, and they all bleed to death. The only time any of them make any money is in the brief period in which demand is growing faster than capacity. Is there any reason to think that the carriers in the Middle East have somehow cracked this problem by spending more on new planes?”
With a buregeoning population, Saudi Arabia — despite possessing the world’s largest crude reserves — finds itself struggling to keep up with increasing demand and strained capacity. With a long-term strategy of weaning itself off its crude oil dependence, the challenge for Saudi Arabia will be to go from thinking of itself as a crude oil exporter to a more natural gas-intensive, diversified industrial power.
Read the article: http://bit.ly/gz5qRF