SEllING BraNd Q

CoVEr Story

seLLing BrAnd Q WouLd You BuY iT?

by vaNi sarasWat Hi 42 Qatar today
august 2011

CoVEr Story

SEllING BraNd Q

he nation has projects in excess of QR350 billion (about $100 billion) planned. Apart from FIFA 2022-related work, Qatar will spend $35billion on a rail network, $20billion on roads and $25billion on real estate (approximate: QR127 billion, QR73 billion and QR90 billion respectively). Local businesses must be riding high on these announcements. When something seems too good to be true, it probably is. Despite the massive investment in human capital and the liquidity of the state, government and quasi-government corporations drive growth, with the private sector relegated to the periphery. The truth is, the economy of the region is mainly driven by the government, not the private sector. The government makes the call, sets the agenda, draws up the strategy for the economy. In essence, the private sector, which is supposed to be one of the strong engines for growing the economy, has taken a back seat, says Issa Al-Mohannadi, Qatari corporate leader and CEO of Msheireb Properties (MP). In this context, it is no wonder that Brand Q has little distinction from the Qatar Government, leaving a blurred distinction between the two. Headline events like winning the 2022 bid, announcing the worlds most expensive

football stadium, the Qatar Foundation logo on the Barcelona football jersey or owning Harrods have little local flavour, while the building and rolling out of Qatar initiatives is seen more as a triumph of wealth over ability than as fruits borne from homegrown industries (a perception that is not entirely off the mark). Those who benefit the most are the ones to whom the jobs are outsourced to. Talking of home-grown capabilities is a very sensitive subject and is often a sore point when the discussion veers towards why buying local is not the first option. The simplest and most bandied about excuse is the lack of expertise, service and skill in the country, which means looking beyond the borders as the best way forward. However, the voices countering this argument are getting louder and more incessant. The counter-arguments range from the emotional to the studied; from truth to convenience; from facts to assumptions. One grouse is shared across the board: that apart from finance, little or no support is given to local industries. The argument here is not about nationals versus expatriates. Its about businesses that have invested in the local market, that tap into its resources to help to build ca-

ibrahiM Jaidah

tHE GUy WHo IS GoING to Start HIS oWN BUSINESS HaS to takE a rISk, takE a loaN at tHE BEGINNING oF HIS CarEEr. Say IF ItS SomEoNE IN tHE CrEatIVE FIEld, HE IS ImmEdIatEly UP aGaINSt tHE SaVVy Fly By NIGHt BUSINESSmEN, WHo WIll CoNdUCt BUSINESS oUt oF a SUItCaSE, WHo doESNt HaVE aNy PrESENCE, doES Not EVEN Pay a rENt HErE. tHErE SHoUld BE lEGISlatIoN to at lEaSt ProtECt tHE SmallEr aNd mEdIUm SIzEd ComPaNIES.

august 2011

Qatar today 43

SEllING BraNd Q

CoVEr Story
pacities against those who do business out of suitcases and tea lounges. Qatar Today speaks to captains of industry and entrepreneurs to understand why Brand Q is such a hard sell.
thRee CleaR points emeRGe:
Make the PriVate sector and entrePreneurshiP More attractiVe to youngsters. Bring aBout a Mandate to Buy LocaL. and Most iMPortant, LocaL coMPanies need to Face reaLity and gear uP For coMPetition.

These three interlink to both highlight the problem and provide the solution. We begin by asking why local companies are not seen as worthy competitors. Bring it on! Ibrahim Jaidah of Arab Engineering Bureau (AEB), considered a pioneer in his field and is an oft-quoted success story, has an interesting take on competition. Some local firms complain about competition from abroad and I dont agree with this. True, with competition, with bigger names coming in and better quality of work in the market, local companies will have to fight harder to compete with them. But now that Ive proved that I can do as well as international firms, I can bill like them and get away with it. Ive taken advantage of this, instead of complaining that Im not being spoilt! This is the new world of competition, and its going to open up more. So there are local businesses that are worried, and will be more worried in the future.

issa al-MohaNNadi

tHE laSt CHaNCE For tHE PrIVatE SECtor, at lEaSt IN my tImE, IS 2022. aNd I SaId aS mUCH to tHE QCCI. WE loSt tHE oPPortUNIty IN 2006 to dEVEloP tHE PrIVatE SECtor, WE loSt oUt IN tHE o&G dEVEloPmENt WE CoUld HaVE dEVEloPEd a maJor ENErGy SErVICES ComPaNIES; WE HaVE rEaCHEd 77mtPa BUt tHErE WaSNt mUCH dEVEloPEd aloNGSIdE tHat. tHE raIl ProJECt HaS BEEN laUNCHEd; HoW mUCH oF tHat WIll dEVEloP loCal CaPaBIlIty? IF WE lEaVE It to CHaNCE, tHEN NotHING WIll HaPPEN. It IS tImE For tHE GoVErNmENt to takE a CoNSCIoUS dECISIoN, to HElP loCal BUSINESSES.

What cant be overlooked is that other countries which opened up to competition did so after building local capabilities. That hasnt happened here yet. Jaidah agrees that the solution is not in restricting international competition, but in building local capabilities. Unfortunately this hasnt been looked at. Its been slow, and Qatari companies are struggling to compete with new comers. Some countries have implemented legislation that says a locally registered company gets a 10% extra margin. For instance, if you are not lowest in price but have the ability and are up to 10% above the lowest bidder, you still get priority. This should be the case in all sectors. The construction industry is one of the main sectors in any economy. Such advantages should be considered, because what we build in the next 10 years is going to equal what we have built in the last 30 years. We will lose out, if we dont use this opportunity to establish strong, highly qualified local entities in terms of companies, in all sectors be it graphic or interior design or suppliers. Talking about the projects being announced in the light of 2022, he says: Interestingly, it was announced by the Prime Minister when we won the bid that the local companies would get a decent share of the pie. Frankly, when you see the amount of work that has to be done, there is no way we can do it; its far more than we can handle. Raise your game Al-Mohannadi raises a question that has no single or easy answer: Define what is local.

SUCCESS StorIES
ibRahim Jaidah:
"easy as it May sound For a LocaL guy to set uP a Business, it is hard work. i Purchased araB engineering Bureau in 1990-91. i Borrowed Money to Purchase it. then you reaLise that howeVer Much you May think its an adVantage to Be LocaL, its aLso a disadVantage. who is this LocaL uPstart who can design? its aLways Been Foreign nationaLs who haVe Been designing, so there werent Many others with the wiLL to do so. that was a chaLLenge which took Me Few a years to ProVe that i couLd do as weLL or eVen Better. i Managed to do that with a Lot oF hard work and sacriFice. the rest is history." iF you were to do it now, wouLd it Be easier or tougher? "there are tons oF oPPortunities. whether i wouLd haVe done it the saMe way, i dont know. For youngsters, there is a wonderFuL oPPortunity to teaM uP with estaBLished FirMs that coMe FroM oVerseas. they wiLL Be oF great VaLue - Being LocaL and haVing the right kind oF training and education." araB engineering Bureau is one oF the Leading architecture FirMs in the country and region, and has to its credit seVeraL LandMark ProJects incLuding the qF headquarters, BarZan towers and keMPinski.

44 Qatar today

august 2011

CoVEr Story
We are struggling to understand as a player in the market what it means. Is there such terminology as local companies versus local reps maybe you can define it for me? Though his companys flagship project (QR20 billion regeneration of the downtown area of Doha) often awards contracts to foreign companies, Al-Mohannadi says there is intent to go local then again, all companies are local, arent they? Qataris are supposed to own 51% interest in all businesses as per the law but it is not always possible. (See footnote on Pg. 47) There are some special areas whether we like it or not, or they (private companies) like it or not - that cannot be handled by local companies, he stresses, because of issues either of scale, technology or skill. Defending why his company chooses international or foreign companies over locals, he elaborates: There are so many different skills required excavation, dewater, dredging, site preparation. As a company, it is in my interest to have one contractor who will take care of all those tasks, to have one focal point. Local companies may have the capability to take care of one of the operations, but not all of them. Local companies complain that we go for international companies, and they in turn use us. You could have come to us directly, they say, and we could have done it cheaper. But thats cheaper only for one element, Al-Mohannadi says. I have five elements for doing this job; yes, you are cheaper, and you have been sub-contracted, but you cant handle the other related work. For business owners, its more efficient to go to a single point of contact for their jobs than break them up into pieces and offer them to different companies. Eventually that contractor may use four to five sub-contractors from the market, he accepts. Its not unusual when someone tells me theyre working on my project. Despite all these constraints, his company has made an effort to define whats local. We are probably the only company that has in its procedure, when we go for a contractor, a mandate for a joint-venture (JV), with a local company. This mandate did not come from the Government. We are trying to help the local market, so we feel compelled to do it this way. Did the Government ask us, or the QCCI? No. I believe this is the right thing to do for the market. And the challenges continue. The minute we say we want local companies, the international companies point out that they are majority-owned by nationals. Omran Al-Kuwari of Green Gulf, weighing in on the argument, says there are many reasons why local companies lose out, some of which are obvious. This is a new economy, and local companies do not have the history or track record of the international companies. From the project owners perspective, going with an international firm with a proven track record makes more sense to mitigate risks, to get funding but there are many areas where local companies have an added advantage and still lose out to international companies. They dont get opportunities because of other reasons. He feels the only way to compete is to enter into partnerships with international companies. Al-Mohannadi adds: Qatari companies dont reject the idea of a JV, but international companies see no financial benefit in it. When they can get their work done elsewhere, for much less, without compromising on quality, they dont see the value of coming to Qatar. Acquiring staff here isnt cost-effective, because Qatar is one of the most expensive places to live in. If there is a mandate for companies to have a local presence which we are considering, by the way what the international companies will do is jack up the price, and we will pay the price. Time for consortiums Prominent Qatari businessman and Chairman of Al-Darwish United Group Yousuf Jassim Al-Darwish says local construction companies have increased their level of performance from the previous year in all aspects, technical or qualified expertise, and are undergoing continuous development and modernisation. This development and modernisation is in part due to the support given by the government, by way of awarding us tenders and projects. However, he feels, in light of developments in the country, with huge projects planned in infrastructure development and construction, more support is required from the government, and to this end we need to establish an association of contractors through which they can talk about the problems facing the construction sector, and to cooperate with each other and with governmental authorities to find appropriate solutions that are fair and transparent, for the sake of the country and its citizens. He suggests: Small and large local com-

SEllING BraNd Q

Yousuf JassiM al-darwish

HE SayS: aS PEr tHE laWS GoVErNING tHE Work oF CoNStrUCtIoN ComPaNIES IN Qatar, tHErE IS No dIFFErENtIatIoN BEtWEEN loCal CoNtraCtorS aNd otHErS From tHE GCC. tHErE arE HUNdrEdS oF CommErCIal ComPaNIES From tHE GCC WorkING IN Qatar. tHErE SHoUld BE SomE Sort oF rECIProCIty tHat IS INSIStEd UPoN.

august 2011

Qatar today 45

SEllING BraNd Q

CoVEr Story

SUCCESS StorIES
omRan al-KuwaRi:
aFter 10 years with qatargas aL-kuwari though haPPy in his JoB, decided to do soMething diFFerent with his LiFe. he LeFt his FuLL-tiMe PuBLic sector JoB to iMMerse hiMseLF coMPLeteLy in a new Business Venture. that was three years ago... i had the idea For green guLF, But i wouLdnt haVe Been aBLe to do it without soMe goVernMent suPPort. i had qstP and qatar Foundation suPPorting Me with strategic Funding. i was aBLe to BeneFit FroM soMe oF the successFuL PrograMMes running in qatar. eVen though he had that suPPort, it was stiLL diFFicuLt. First oF aLL, there is a sociaL eLeMent to it. it is stiLL taBoo to Be soLeLy a BusinessMan. whats exPected is a day JoB in a Prestigious PuBLic sector coMPany, and running a Business on the side. But as an entrePreneur when you decide to JuMP in FuLL steaM into a Business, it does raise questions. then there is aLways the FinanciaL risk, that entrePreneurs aLL oVer the worLd Face. But the whoLe exPerience has Been Both chaLLenging and rewarding. the tiMing was PerFect For aL-kuwari, as his Business was in sync with changes in the region and gLoBaLLy. green guLF inc is a Leading cLean technoLogy adVisory Business Based at the qatar science & technoLogy Park.

panies alike could work together, so that when a larger tender beyond the scope of a single company comes up, then there can be a consortium of two or more such companies that works on it under a joint name, pooling their capabilities and resources. They can share the benefits and liabilities of the project. (In a recent interview to a local Arabic daily Al Arab, Al-Darwish discussed the challenges facing local companies, parts of which are used in this article.) Why go international? Being one of the largest regeneration projects in the region, Msheireb has come under a lot of scrutiny, particularly since it aims to build something quintessentially Qatari. We are always asked why we didnt use local companies to establish the architectural language which is rooted in Qatari history. So I ask myself the question; if I am bringing European architects to develop this, are they more capable of doing this, or do they have more knowledge than the local businesses? The answer is they dont have the knowledge, but neither do the local companies. What the international companies have is creativity, capabilities, discipline, quality and efficiency. Jaidah doesnt completely buy that reasoning. About 30% of the work I do is for international firms, for signature architecture. If that doesnt prove our merit, what else would? What effort has been taken to assess local

capabilities, he asks. There is a tendency, especially in the design sector, that whatever comes from the outside is fresh and new, and this is not unique to Qatar, it happens in many places around the world. Unfortunately a lot of them get a shock later, when dealing with someone not familiar with local needs. In our field of architecture and design, there has been an influx in the past 10 years of design firms coming from all over the world. The intention of the State of Qatar is to open up to competition and opportunities for variety, which is not entirely a bad thing. I take this as a challenge. Revise tender processes Al-Darwish is also concerned about unfair competition with international companies, and points out that some foreign companies operate here without adequate controls being imposed on them. Some foreign companies claim to be international and get their government's support to compete in projects that local companies could easily handle alone or at least in partnership. Local companies should be encouraged to execute major projects, either by themselves or in partnership with specialised international companies, to facilitate their development. Furthermore, to ensure the efficiency of international companies, he says there should be a mandate that they operate within the local economy by not less than 40% which means they will have to enter into

buthaiNa al-aNsari

tHE SEll IS IN tHE markEtING. WHEN yoU aPProaCH ComPaNIES, PrEParE yoUrSElF, markEt yoUr ProdUCt WEll, BraINStorm WItH yoUr tEam, aNd talk lIkE a CoNSUltaNt. WHy arE CoNSUltaNtS SUCCESSFUl? BECaUSE tHEy talk a lot (EVEN IF tHEy dElIVEr lIttlE) So lEarN From tHat, aCE yoUr PrESENtatIoN.

46 Qatar today

august 2011

CoVEr Story
a JV with a local company, rent equipment, buy materials, and use local resources. Recalling past practices, he says Qatari companies that participated in tenders were given preference over foreign companies, up to a cost differentiation of 15% over the latters price. He regrets the stopping of this system, and emphasises that cheaper foreign contractors dont mean better work or efficiency. At this point he argues, it is important to upgrade the Central Tenders Committee and Audit Bureau, and to review and apply tender rules and regulations accurately. Omran Al-Kuwari says that when it comes to less capital-intensive industry (in emerging sectors such as new media and other creative fields) there definitely seems to be a perception that anything international is better, simply because those companies have better marketing. There needs to be more incentive to support local companies. Keep in mind, its not just from international companies; competition is also coming from the government itself. They should make sure that theyre not competing with the private sector. Qatariat T&D Holding Founder and Chairperson Buthaina Al-Ansari points out that there are monopolies here in various sectors, which is a big challenge. Now how do you compete with these? Some of them have a huge government backing. Even if we accept the need for monopolies in some sectors, they should function in a manner that assists smaller companies. Sub-contract your work. Allow others to grow. Dealing with deficits That question applies to private businesses as well, says Jaidah: Although the country has advanced, how have you taken advantage of it? Dont hide your head in the sand. Lets go talk to these international firms to collaborate. I have professional friends who take advantage of this such as lawyers and designers. Even if your firm is relatively new, explore partnerships. We cannot go against the tide. See where it is going and adjust, try to find synchrony. Al-Mohannadi agrees: If we have to help local businesses, then local businesses need to help themselves first. How many have standardised their systems and processes to international levels? How many provide services to international standards? A lot of people in Qatar have representative offices or have businesses run by expats where a Qatari is registered as the owner. To be honest with you, I can count on the fingers of my hands those owners who are keen to develop their businesses. Referring to successful home-grown businesses, he attributes their success to the owners focused and unwavering involvement in the operations. Thats the kind of entrepreneurial spirit that will lift the quality of the private sector in Qatar. What we are missing now is quality Q. If we dont work hard now, if the government doesnt put an effort into creating quality say the kind of effect Made in Japan products have then we will be in trouble. Building quality quotient and building trust is important. This is what local businesses need to realise if I dont play by international rules now, I will be left out of the game. Saying people are not giving us a chance and other such excuses are not unequivocally true. There is some merit in those arguments but you need to question yourself too. Are you using the latest technologies? Are you brain-storming strategies for your business? Have you adopted standards? Have you developed your offices and assured quality? Youve been in existence for 20 years as a business, but nothing has really changed! You cant just scrounge for crumbs. Youve been repeating yourself for the past 20 years without a growth strategy. If they want to compete with the best, they have to bring something more to the table. The problem with local companies is they want to think local and take international jobs. That doesnt cut it, because Qatar is already international. Building the 2022 stadiums is an international job; MP is an international job, in size, quality, and cutting edge technology. I see where they are coming from in their hesitancy to commit to cost without guarantee of business or assurance if something in the pipeline is risky; and I agree with them. Thats where the government should step in and say listen, if you do 1,2,3,4,5, you will be classified for X (see box on Pg 46), and if you get that classification you will be taking 10-20% of any international tender that comes in. If you set that up, then there is an incentive for local companies to reform themselves, to become capable to play the game at that level. Its a long debate and is bound to con-

SEllING BraNd Q

oMraN al-Kuwari

yoU doNt NECESSarIly NEEd morE ENtrEPrENEUrS IN tHE US oNly 2% oF tHE PoPUlatIoN arE ENtrEPrENEUrS, BUt yoU NEEd a StroNGEr PrIVatE SECtor. EdUCatIoNal INStItUtIoNS SHoUld CrEatE morE INtErESt to BrING aBoUt a CUltUral aNd SoCIEtal CHaNGE IN tHE attItUdE toWardS tHE PrIVatE SECtor. IN tHE mEaNtImE, tHE GoVErNmENt NEEdS to CrEatE tHE rIGHt ENVIroNmENt. tHE rIGHt StEPS HaVE alrEady BEEN INItIatEd, By Way oF ENtErPrISE Qatar, QdB. I am VEry oPtImIStIC. CoUPlE oF yEarS aGo, It WaSNt So. NoW tHErE IS SomE momENtUm. tHIS IS Not aN EaSy ProBlEm to SolVE For aNyBody, BUt WE arE GoING IN tHE rIGHt dIrECtIoN.
august 2011

Qatar today 47

SEllING BraNd Q

CoVEr Story
tinue if action is not taken. They will accuse you of not giving them a chance, but we will counter this by saying you dont have the proof of capability. Al-Kuwari adds: I am not an expert on tender policies, but I do know there is an urgent need for the government to step in, without compromising on quality. There are several critical projects in the pipeline, and we need the best working on them. Why would companies invest in themselves if they dont have some kind of assurance? Private sector needs zest The truth is, for Qataris to be fully engaged in the private sector is not appealing enough. Very creative young graduates come into the market and I know the government cannot absorb more than 70% of them. Imagine, we have the school of architecture in QU; VCU-Q is graduating a lot of interior designers; and all of them are entering the government sector in a direct or indirect manner. When they come to train here with me, the first thing I tell them is to train well, open their eyes, and hopefully theyll become a new competitor for me in a few year's time. You take all the consultants in the State of Qatar, and see what percentage are Qatari. Just imagine, in my industry, locals who are practising in the design or architecture field account for less than 1% of the total. This is alarming. There should be an incentive from the Government for youngsters to seek opportunities in the private sector. Sometimes, they get a job in the public sector for no greater reason than to figure in the payroll." Jaidah is worried that a lot of young creative brains are sitting in a job where they might not even fulfill half of their ambitions. He feels there should be some sort of incentive to absorb young local talent. Lets take my design team here I have 400 people in my company, and I am the only local. Ive been begging some locals to come and join us, but they wont. They want something easier. They dont understand that by being patient for a few years, to become a professional, how much it would mean for them in the long run, as a professional designer, gaining experience from the local industry. They dont see the opportunities in front of them, and we need to open their eyes. There is so much to gain. He recalls that 15-20 years ago, it was mandatory to employ locals for the duration of their contract. Imagine how much training and building of local capabilities would happen. Say if its building stadiums, and the international firm has to take in a few locals seconded from government departments perhaps - and train them. Imagine the scope of growth from there for that person. He can either take the learning back to the employer or, if he is ambitious enough, set up his own firm. QF has done it in a few cases, but QF is different, its not the norm. AEB has recently signed a contract for an army-related project. Its a good-sized one. The conclusion of the contract is that we will train three locals through the duration. I initiated this, while we were negotiating my fees. I can give you more than money, I can invest in people with brains, I told them. The youngsters are thrilled that they are going to be joining us. By the time we complete the project, they will know a lot about it, and how it was achieved. Hopefully they will be ambitious enough to compete against me one day - it is getting boring now, as no one is really competing with me. Who is at the helm? Its more than evident that dynamic local businesses that are doing well have at the helm a business owner who is 100% committed to the operations. Al-Kuwari himself stands testimony to this reasoning. Just because you are a local company it doesn't mean you can take it easy? The only way to be ahead of the game is to be handson. The reason companies like AEB are successful is because their local management team is fully engaged. Local companies have the strength of knowledge and insights of the country that they must leverage to their advantage. You cant expect business just because you are local if you are not willing to put in that effort. But if the company is competent and able to do a task, then you have the right to ask for preference. Lack of support Speaking for SMEs, Qatariat T&D Founder and Chairperson Buthaina Al-Ansari says there is not enough support or guidance. If you only support the well established, and the giants only support each other, what happens to the rest of us? I need someone to guide me and teach me. The small and medium enterprises get left behind; we are forced to take on competition in a different

one stop shop to help pRivate Companies

issa aL-Mohannadi rues the Lack oF guidance For the PriVate sector. once that is Fixed, the creation and seLLing oF Brand q wiLL Be Much easier, he says. he contends that there is soMething criticaLLy wrong that soMeone has to correct right away. who? in My oPinion the goVernMent shouLd steP in, he says, suggesting the estaBLishMent oF an oFFice For this PurPose. this oFFice wiLL audit coMPanies and Brands, and categorise theM as Per caPaBiLities. the oFFice wiLL aLso Be resPonsiBLe For attracting and nurturing LocaL coMPanies. it wiLL heLP LocaL Businesses uP their gaMe, Be it By way oF education, technicaL suPPort or consuLtancy. heLP theM to estaBLish quaLity systeMs and work with theM to Bring theM to a certain LeVeL. this oFFice shouLd aLso FaciLitate Business contacts For theM. First heLP Me identiFy LocaL coMPanies, and then hoLd Me accountaBLe For using their serVices. Mandate that these Branded and categorised coMPanies shouLd Be giVen PreFerence in tenders. how do we identiFy and heLP LocaL coMPanies, he asks. so there are internationaL coMPanies Based aBroad, with a LocaL Branch that has qatari interest, and they cLaiM to Be LocaL. how Much can i dig and ask theM For structure and ProoF on the LocaLisation oF their oPerations? its not PracticaL For us as a Business. giVe Me an oFFiciaL List to teLL Me iF these LocaL coMPanies recruit resources FroM here and that they haVe the right caPaBiLities. iF that source is aVaiLaBLe, we wiLL take it seriousLy. we now haVe a tendering coMMittee List and that List incLudes internationaL coMPanies. hoMe-grown coMPanies are now Fighting oVer the cruMBs, as the Biggest ProJects wiLL go to internationaL coMPanies that haVe a ProVen track record, he Points out.

48 Qatar today

august 2011

CoVEr Story
league. We dont have the wherewithal for that." She voices a thought shared by another entrepreneur, Bassam Al-Ibrahim (see interview on pg 48). The larger corporations need to back us up. I would like to highlight and speak for this middle generation. This generation needs to put in triple the effort to succeed like the rest. The younger generation on the other hand, those 16 and below, they have everything education, linguistic skills, techno-awareness. But those of us from the 70s, we need to work very hard to align with the economic development happening now. Al-Ansari is of the firm opinion that the effort to build oneself should come from the person or company itself. Then again, not everyone has the ability to do so and many require a bit of hand holding. Now the government has two programmes - one is the QDB-run Al-Dameen (financing), and the other for SMEs through Enterprise Qatar. These support you financially, and they educate you on how to set up. But what about the next step, when you roll out your business, and you want to sell your services or products? The consultant complex There is not sufficient belief in our abilities, bemoans Al-Ansari. I will educate you, finance you, incubate you, but beyond that how do you buy peoples trust? You, as an entrepreneur, a business owner, need to take responsibility to earn that trust. The Government cant really do that. What we need from the government is to influence larger, established players to buy into us. She quotes a traditional proverb to strengthen her argument: If the leader does not believe in his people, then his people will not believe in him. If you see the decision-makers approach consultants and foreigners, then youll do the same. Taking a dig at a common practice, she says,big corporates love consultation and what do the consultants do? They take information from us and make a presentation out of it. And they walk away with a million riyals in their pocket. Look at the ads in the magazine and on the billboard even small things like the abaya and the thobe are depicted wrong we laugh at this. She underlines the need to tap into local knowledge. You need our inputs, consult us. We know what we want, what appeals to us, not the consultants. Use our expertise. She also echoes her peers views: We have to promote ourselves. There is no other choice. You have to squeeze yourself dont wait for things to be handed on a platter. Youll be stamped out if you dont do that. Future perfect Omran Al-Kuwari is very upbeat about the growth of the private sector. He says the road map is available, and its just about getting in sync with it. Keep in mind that this is a huge country economically, even if its small domestically. The Qatar National Vision (QNV) has already identified areas where it needs more private participation. As for Brand Q, he says internationally its already extremely strong. You think of Qatar, you think of progress, you think of innovation, transparency, good governance. But isnt that based more on diplomacy and the functioning of the Sovereign Wealth Fund (SWF)? Isnt the lack of separation between government and private sector an issue? It could be an issue, but could it also be an opportunity?, he asks. If Qatar has a strong image, even one built on the governments activities, you can use that as a springboard. Take advantage of the situation we are in. We are well placed to improve the Made in Qatar brand. There is no reason why this cant happen. The important thing is to identify areas we want to focus on.

SEllING BraNd Q

"It IS ImPortaNt to UPGradE tHE CENtral tENdErS CommIttEE aNd aUdIt BUrEaU, aNd to rEVIEW aNd aPPly tENdEr rUlES aNd rEGUlatIoNS aCCUratEly."

Yousuf JassiM al-darwish

chairMan, aL-darwish united grouP

*generaLLy, a non-qatari nationaL, whether naturaL or Juristic, May engage in coMMerciaL actiVities ProVided the Foreign ParticiPation in the entity does not exceed 49 %. in octoBer 2000, the goVernMent enacted a new Foreign inVestMent Law aiMed at ProMoting Foreign inVestMent in sPeciFic Business sectors incLuding agricuLture, ManuFacturing, heaLth, education, tourisM, Power and ProJects which deVeLoP and utiLise the states naturaL resources. the new Law PerMits uP to 100 % Foreign ownershiP in these Business sectors. the Law does not aLLow a non-qatari to ParticiPate in Banking, insurance, coMMerciaL agency or reaL estate trading actiVities. iF non-qataris are Partners oF a Joint Venture coMPany, then the coMPany is aLLowed to carry out onLy those Business actiVities stiPuLated By Law For non-qataris.

august 2011

Qatar today 49

SEllING BraNd Q

CoVEr Story

desPerATeLY

AngeLs, guideBooks And fLexiBiLiTY.

seeking:

h
bassam al-ibRahim

kHalIFa SalEH HarooN aNd BaSSam al-IBraHIm arE tHE Co-FoUNdErS oF IloVEQatar.NEt, aNd tHE CloSESt tHING Qatar HaS to SErIal ENtrEPrENEUrS. tHEy draW From tHEIr ExPErIENCES to dISCUSS ISSUES FaCING ENtrEPrENEUrS, oFFEr INSIGHtS oN WHy BraNd Q IS oFtEN a Hard SEll, aNd CoNSIdEr HoW BESt to CHaNGE tHat.

focus on opening up franchises. I think this question depends on the company trying to determine whether it wants to be the best in Qatar or the best in the world. There are many challenges: Companies do not seem to want to employ local talent or the services of local businesses because of the belief that a foreign company means higher quality. Right now there isnt that much competition in the market, for local companies to be able to improve and compete on a global scale; they need to improve the quality of their services and nothing does that better than good old fashioned competition. Owning a niche or segment is also a key factor. People try to do too much. If you want to succeed pick a product or service and work hard at becoming the best there is. Spreading yourself too thin (and its easy to get distracted with so much potential here in Qatar) is your fast track to being JUST another anonymous company.

ow can local companies compete better with regional and international players? Bassam: Khalifa and I have discussed this so many times. We believe that if you want to compete with international firms you need to set standards. This means that the global standards set today are not the ones that Qatar follows, but that Qatar creates its own standards that the world follows. Its about exporting instead of importing. Khalifa: I agree with Bassam, we definitely need to get into the business mentality of wanting to export Qatari brands rather than

50 Qatar today

august 2011

CoVEr Story
Why are local corporations reluctant to use local services and products? Bassam: The local market is a vast one, and in recent years the economy has really stepped up its game to provide the service and product requirements needed to realise Qatars National Vision. Unfortunately the quality of these services and products cannot meet the standards required by these corporations. The labour or white collar workers placed in these businesses do not provide the SME quality required to ensure a Grade A project delivery. Khalifa: Its hard to get people to start searching locally. Its one of those Catch22 situations. Local companies need to be given the opportunity to grow and improve, and those that are hiring want the best from Day 1. Another reason is that many people in the past would simply go ahead and set up a company, bring in the cheapest labour/employees they could find, and the corollary of this was usually an extremely low quality of service. People have been burned too many times. When I look at the new generation of start-ups and growing SMEs, Im very impressed with how they apply themselves. In this situation, how can home-grown industries make their mark and compete with fly by night consultants from outside? Khalifa: There are a number of different ways; the government could intervene and try to force the market to look locally. Thatd probably help but it might make the local market lazy and uncompetitive. Either way, I think when it comes to companies that try to get a slice of the pie for a quick buck and run off, its something that the government has to solve. Otherwise itll demotivate the local market. The groundwork for nurturing talent is being laid through Education City and other such initiatives. Yet buying local is seen as infra dig? Khalifa: You made me whip out the dictionary there. Infra dig, meaning beneath ones self. Hmm, I dont think I would go as far as saying that buying locally isnt seen as being valuable, I just think that the framework isnt completely there yet. Ill use an example. Take a simple game of connect the dots, draw the lines from 1-10 and you get an image. Sadly were missing a few numbers, so nobody can really see the big picture. The younger generation now have the education needed to start thinking outside the box to create a new company. But the requirements from the Ministry of Business and Trade (MoBT) are quite strict for startups. If they do manage to tick all the requirements, where are they going to rent? Will it be easy to get the licences they require? Where are the angel investors and venture capitalists to invest in great ideas? If they take a loan from the bank then theyre stuck with a strangling interest rate. Its just not really business-friendly for start-ups and SMEs. Bassam: That situation is simply based as of today. Education city will educate and create a culture based on learning and knowledgesharing so that Qatar can be a knowledgebased economy. These concepts will create the new generation of Qataris who will create products or services that other young Qataris will thrive on. These businesses will create high quality products; young entrepreneurs in Qatar are taking things to a new level. I personally know of a young Qatari who wants to create handbags from material purchased from Italy and London to eventually create a designer handbag collection based out of Qatar. The process has already begun based on the fact that we wish to create a new image of quality products made by Qataris for the Qatari market. It truly is an uphill task for an entrepreneur. Despite that, how do we get interested people to take the leap and become entrepreneurs? What can be done at policy level, and at an educational level? Bassam: This is something we both discuss regularly. Firstly entrepreneurs need to believe in themselves and not quit when the going gets tough. They need to believe in their idea and stick with it, as we have. The policy makers need to ease the process of creating a business entity. To create a WLL in Qatar you need start-up capital of QR200,000, which does not even include the funds required to create the business or the additional funds to rent a location. So to start your business you would need a minimum of QR400,000, which most aspiring young entrepreneurs simply dont have. Additionally most banks wont provide funding since you need some form of collateral such as more funds or real estate - just one barrier after another. These busy minds may have an amazing idea but dont know where to start when creating a business plan or how to sell their business once its up and running. Educating these entrepreneurs in the ways of business etiquette is so important to ensure theyre comfortable with interna-

SEllING BraNd Q

Khalifa saleh haRoon

august 2011

Qatar today 51

SEllING BraNd Q

CoVEr Story
tional business standards to drive Qatars economy forward. Khalifa: Well, its all about taking the plunge and just giving it a go. Did you know that on average in the Middle East 70% of people with great ideas have full-time jobs and work while trying to set up their business? Theyre giving it a go (albeit without being able to give it their full attention). Even as they innovate and come up with great ideas, we need to remind people of RISK. Risk implies that someone has something to lose. When youre a young person trying to get your project off the ground, what do you really have to lose except time? And lets be honest, your time isnt really that valuable until youre actually achieving something worth risking in the first place. At a policy level, more flexibility is required to start up a business. Looking at it from an educational level, I believe its not just talking about theories, but presenting success stories to give young entrepreneurs the confidence to give it a go. Look at us. We didnt start off with much.. We decided that we were going to do everything on our own, invest whatever we could in ourselves, and just give it a go without sweating over the small. Now were trying to encourage and support other young guys, especially now that Qatar is the place to be. Once off the ground, what in your mind is the single most disabling factor when it comes to local companies selling themselves? Bassam: A company needs to understand that to reach the wider community you need to show yourself off, and since Qatar is now (besides other focuses) becoming a tech hub for the Gulf, these companies forget the online space and just create a solution to fill a void rather than innovate. The MoBT and ictQatar are promoting businesses and other requirements to be completely online-based. So being online is not only an amazing way to reach your target market and wider community, it is playing a role in the 2030 vision. Khalifa: To sell yourself, you need to invest in your idea, take a risk to develop it and then sell that product to prospective clients. I think that people arent willing to take those risks most of the time. If I had to look at it from a simplistic point of view though, I think its the cost of advertising and marketing in this country. To be honest, the cost of advertising in any medium, be it in print, roadside ads or the radio, is just ridiculously high. How can smaller companies afford it and market themselves? Actually, forget small companies, I know large corporations that cant afford it! So should the onus of building SMEs be on the government? Or on the private sector? Bassam: Both. The government should assist financially and educate the private sector to ensure their growth. A mentor told me that great leaders stand on the shoulders of giants and not dwarfs and the same applies to businesses. These business powerhouses in Qatar should assist the SME industry to ensure their growth and in turn the SMEs will push the powerhouses to the next level. Khalifa: It starts with the government. Properties need to be cheaper, requirements for setting up a business need to be simpler, acquiring licences needs to be straight forward; there needs to be one central area to get everything done (rather than running around like a headless chicken trying to figure out what to do), and there needs to be support from the baladiya (Central Municipal Council) to help reduce the cost of advertising in the country. It boils down to transparency at the end of the day. The problem we have with SME growth isnt with one department or area, its a joint effort between the Central Bank, the need for competitively priced commercial districts, reduced requirements by the MoBT. The list goes on. In closing, as a businessman, what is the one thing you wish could be done, so you have fair access to the economic pie? Khalifa: I cant say one thing, but if I absolutely had to select one, Id say we need more angels, venture capital (VC) funds, and reduced business start-up rates from the banks. If I could slip in one other thing that we wished for when we first started up, its a guide or road map. Its great hearing theories and listening to inspirational speakers, but the question I believe 99% of entrepreneurs have is, Whats the road-map? or what do I need to do to get started? Maybe a beginners guide to setting up a business in Qatar? Where to go, who to speak to, what to do? Bassam: More assistance in capital to ensure the growth of SMEs in the form of VCs and angel investors. This will allow great minds to launch their great ideas and enlarge the economic pie to ensure more opportunities for more entrepreneurs
interViewed By Vani SaraSwathi

BassaM aL-iBrahiM is an engineering graduate FroM the uk, MaJoring in teLecoMs. he is currentLy with VodaFone qatar, and is actiVeLy inVoLVed in Various sustainaBiLity PrograMMes in the country. khaLiFa saLeh haroon is a Law graduate FroM the uk and is currentLy with VodaFone qatar. he is aLso the Founder oF haroon united grouP. he recentLy won the entrePreneur oF the year For 2011 and is working on a nuMBer oF unique ProJects, ForeMost oF which is iLq, with the aiM oF encouraging start-uPs and to sPruce uP the qatar Brand. iLoVeqatar.net was an initiatiVe started By the two in order to change the way PeoPLe run Businesses in qatar and to ProMote a new way oF thinking through encouraging a deeP PartnershiP ModeL. other ProJects in the PiPeLine incLude iLq radio, creatiVe Minds, and identity qatar, a Joint Venture PartnershiP with PJ Media, Founded By FaMous BBc star Peter Jones.

52 Qatar today

august 2011

CoVEr Story

SEllING BraNd Q

greATer
consumer AWAreness reQuired
raSHEd NaSSEr SraIya al-kaaBI, CHaIrmaN oF tHE INdUStry CommIttEE aNd Board mEmBEr oF tHE Qatar CHamBEr oF CommErCE aNd INdUStry (QCCI), talkS aBoUt tHE Poor SalES PErFormaNCE oF QatarI ProdUCtS, tHE oBStaClES to tHE dEVEloPmENt oF loCal INdUStry, aNd tHE rElUCtaNCE oF loCal ComPaNIES to lEVEraGE loCal ProdUCtS.

for food processing enterprises. All these things will help to bring about a competitive local industry. Whats the main reason people are unenthusiastic about Qatari products, and how can this change? There are a number of things hampering the appeal of Qatari products in the marketplace, perhaps the main one being that some of these goods fail to meet the required specifications or measure up to the standards of their foreign rivals. Also, some of our industries face extra charges, in addition to the customs duties on exports, which increase their production costs and thus lower their sales potential. As for helping them, the government has to clamp down on the producers of counterfeit goods, and punish traders who manipulate prices. Secondly, the Consumer Protection Department has to do more to promote local products so that people become familiar with them, because a lot of it is down to consumer awareness and patterns of consumption. So they need to run publicity and advertising campaigns for a whole group of products to get people familiar with them. The government has to support local producers, both food manufacturers and others, by means of a support fund to subsidise local industry so that consumers can access quality products at the best possible price.

hat is QCCI doing to enable the private sector to sell its services and products better? Were delighted with the launch in January of the Export Development Agency, known as Tasdeer, which is dedicated to supporting, encouraging and stimulating Qatari exports of various products and commodities. It will serve to boost sales of Qatari-made goods and help Qatari industries establish a strong presence in world markets, thus bolstering the local private sector. The agency will help local companies in all sectors of activity to create strong enterprises offering high quality products capable of competing abroad. The government is taking great pains to tackle any obstacles or barriers to the export of Qatari goods, and we would likewise urge local consumers to buy Qatari products, as this is what will help local businesses to compete with others. Theres also the matter of setting up industrial areas with low interest rates, including one

august 2011

Qatar today 53

SEllING BraNd Q

CoVEr Story
Whats the biggest constraint on the sales of local products? Right now the obstacles we face are in the process of being eliminated. The QCCIs fifth annual consultative meeting with HE the Prime Minister resulted in a reduction in interest rates on industrial loans to a maximum of roughly 3%, and then there was the setting up of the Export Development Agency, Tasdeer. So there are very few remaining problems, and all we need now is to come up with some quality local products that conform to hygiene regulations. Tasdeer is meant to secure its objectives of helping local industry boosting its export capacity in a clear and open manner, which will necessitate bringing representatives from the private sector into the agencys management structure. At present Qatari products suffer from weak sales even in the local market, let alone overseas markets, so Tasdeer should work first on marketing Qatari products at home before promoting them abroad. And even before that, it has to help entrepreneurs develop Qatari products to become competitive in export markets. Similarly, the Export Development Agency should maintain a permanent exhibition of all domestic products so that it stays fully upto-date with what Qatari enterprises have to offer, which will help with their promotion and development
interViewed By Ezdhar iBrahiM

tHE CoNSUmEr ProtECtIoN dEPartmENt HaS to do morE to PromotE loCal ProdUCtS So tHat PEoPlE BEComE FamIlIar WItH tHEm, BECaUSE a lot oF It IS doWN to CoNSUmEr aWarENESS aNd PattErNS oF CoNSUmPtIoN

rashed Nasser sraiYa al-Kaabi,

W
august 2011

inVesT in QATAr. for ALL our fuTures

aNtHoNy rymaN JoINS tHE BUy Qatar dISCUSSIoNS, aNd SPEakS oF tHE rolE loCal CrEatIVE aGENCIES CaN Play IN ENHaNCING tHE loCal ECoNomy.

chairMan oF the industry coMMittee and Board MeMBer oF the qatar chaMBer oF coMMerce and industry (qcci),

he knowledge economy represents a paradigm shift in our ability to guarantee the future prosperity and legacy of nations and peoples. Creating intellectual capital is the main form of wealth creation today, account-

ing for 7.3% of GDP in the UK, for example. In essence this means that of the five capitals - human, social, financial, economic and intellectual - it is intellectual capital that is going to provide the opportunity for success and longevity. Its a renewable asset! Intellectual capital (IC) provides the roots to nourish and cultivate the future wellbeing of nations and organisations. At the corporate level, intangible investments (intellectual capital) e.g. reputation and brand management, innovation, knowledge creation and incubation, marketing and advertising spend, are now unanimously considered the most important determinants of performance and competitive advantage. At the macroeconomic level, new growth theories have already

54 Qatar today

CoVEr Story

SEllING BraNd Q

demonstrated the importance of knowledge in the performance of nations. (Source: The World Bank) Today, knowledge management is the currency for trade and growth, and this requires a new kind of creativity, approach and critical thinking. This means there has to be a sea change from a trading and pricesensitive mentality towards a value-based mindset that promotes the wealth-creating potential of people, focusing especially on their ideas. In other words, focus on value rather than price, and people rather than product. Historically, higher levels of intellectual capital have been associated with higher standards of living. However, the power of knowledge and ideation are not often associated with the long-term prosperity of a nation. This disparity highlights the need to value intellectual capital and place it at the centre of a nations value system. It is people and their ideas that form the potential for countries and companies to prosper. Systems and processes can capture this knowledge and provide the storage systems to enable further research and development. This creates a feedback loop to further develop human capital, thus leading to more marketable intellectual wealth resulting in higher financial well being. If Qatar and Qatari companies can embrace intangible investments (Intellectual capital) and put them at the centre of their business environment, they can leapfrog older, more entrenched economies. The enlightened leadership of Qatar has set out its vision in the QNV 2030. This ena-

bles investment in intellectual capital (creativity), education and entrepreneurialism (human capital) as central to the nations future. Its time to invest in Qatars creativity to promote inward investment, not just in companies, systems and processes, but the intellectual capital that goes with it. Its time to protect intellectual copyright in the form of ideas and designs that safeguard the inspiration and capital creation of the ideas and their owners. Its time to invest in legacy, knowledge transfer, training and being part of the conversation. Fostering creativity There is no doubt that the green shoots of creativity are being nurtured and fostered, from QSTP (Qatar Science & Technology Park) to QMA (Qatar Museums Authority) and from Enterprise Qatar to the DFI (Doha Film Institute). The proliferation of worldclass universities and the rise of graduates seeking to make their mark and find the right livelihood in Qatar mean creative economy is growing. Creative agencies, whether in advertising, events, PR or brand communications, provide the energy and environment to create and foster the brand reputations of Qatari companies, creating a unique tone of voice, look and feel, and brand story to communicate within Qatar and globally. This will create a virtuous circle, firstly in attracting global talent - if youve got a powerful differentiator, youll attract top people. This talent will create the added value to support and grow your business. Your brand

IN tHE INtaNGIBlE World oF CrEatIVIty aNd INtEllECtUal CaPItal, It IS Hard to EValUatE CrEatIVIty IN tECHNICal tErmS tHIS CoUPlEd WItH tHE PrICE FaCtor HaVE lEd ComPaNIES to PUrCHaSE SUB-StaNdard tHINkING aNd CrEatIVIty or ImPort ExPENSIVE IdEaS From aBroad tHat HaVE Not NECESSarIly rESoNatEd WItH tHE loCal PoPUlatIoN.

august 2011

Qatar today 55

SEllING BraNd Q

CoVEr Story
with its inherent value becomes the facilitator to lower costs and increase margins. However, there is an inherent blockage in the system. The growth of the economy to date has been primarily focused on the tangible world of hydrocarbons, to process and distribute oil and gas. In this world, once technical competencies have been evaluated, price became the determinant factor. In the intangible world of creativity and intellectual capital, it is hard to evaluate creativity in technical terms - this coupled with the price factor has led companies to purchase sub-standard thinking and creativity or import expensive ideas from abroad that have not necessarily resonated with the local population. There is the fundamental DNA or soul story to the country and its people that is forever changing and growing. Its hard to quantify, but its very real. On one side, you have heritage and tradition fused with religion and family as the primary motivators. On the other you have youth, vitality, and enormous ambition brimming with ideas, hopes and dreams. It is this fusion of left and right that is forming and developing in Qatar. We need to help this process along a little bit by promoting a Buy Qatar campaign to really focus everyones attention on investing in this nations inherent creativity. Take our agency. If you invest in Buy Qatar trust us with your business we can invest in bigger and better. Yes, well import people with real and measurable award winning talent, but well also invest in and train the local creative population, hiring more designer alumni from Virginia Commonwealth University, and maybe one day, they will start their own creative businesses. Well invest more in creating systems and processes that help to educate and inform our clients, thereby raising the bar again and again. Through global thinking and creative local design well be able to grow your brand and your business, increasing your market share while reducing your customer acquisition costs. Its a self-perpetuating cycle of constant improvement. It facilitates better creative work and faster output, because client trust is there, derived from increasing aptitude, knowledge, experience and intelligence. Creating a legacy The knowledge economy starts thriving and manifesting in myriad small businesses, thus fostering the entrepreneurial instinct in the local population, a virtuous circle. Empowering and protecting our homegrown creative potential has never been more important than now. Starting this journey by changing the rules governing the hiring of creative agencies, promoting a Buy Qatar quotient and incentivising local creative agencies to hire locally will engender and foster a creative renaissance in Qatar. What would help is raising the withholding tax on international agencies working in Doha. What would also help is some kind of formula which rewards agencies that have been here in Qatar for a significant period of time and are employing designers in Qatar. Qatari-based companies, especially the bigger quasi-governmental organisations, have no real incentive to commission local design and advertising companies, especially for the larger, more prestigious accounts. In fact the opposite is true they get kudos for working with an international agency where they can possibly plant the seedlings for their future career. Where is the legacy, transfer of knowledge, skill-set or training for local creatives? Where is the reinvestment of those fees in the local economy or in the raising of creative standards? Moving forward, there has to be a radical rethink of what is important for the longterm viability and success of Qatar Inc. And I would put it to the powers that be - investing in your country means investing more in your people and their ideas. You engender loyalty, goodwill, passion and progress by nurturing local creativity. And if we need to cross-fertilise with international creative talent, then let them invest in offices and set up here, hiring locally-based designers and committing to training and education, taking the lead example of Qatar Foundation who have a joint venture with Fitch. So Buy Qatar is the rallying cry. Its also the means whereby we can ensure the longterm sustainable future of Qatar by investing in local creativity and talent

I WoUld PUt It to tHE PoWErS tHat BE INVEStING IN yoUr CoUNtry mEaNS INVEStING morE IN yoUr PEoPlE aNd tHEIr IdEaS. yoU ENGENdEr loyalty, GoodWIll, PaSSIoN aNd ProGrESS By NUrtUrING loCal CrEatIVIty. aNd IF WE NEEd to CroSS-FErtIlISE WItH INtErNatIoNal CrEatIVE talENt, tHEN lEt tHEm INVESt IN oFFICES aNd SEt UP HErE, HIrING loCallyBaSEd dESIGNErS aNd CommIttING to traINING aNd EdUCatIoN,

anthony Ryman
is a Branding exPert, and the Managing director oF grow, a doha-Based creatiVe agency.he has years oF Branding exPerience in uk and MiddLe east.

56 Qatar today

august 2011