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Doing Business amidst Terrorism

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lagos

Despite the odds, the Middle East and Africa show improved business environments.

On June 1, 2015 the World Bank Group published its 13th annual Doing Business 2016 report, a virtual check-up on the health of 189 different economies and each one’s environment for small and medium sized businesses. By monitoring domestic business regulations, the World Bank Group attempts to analyze the shifting horizons for international entrepreneurs, hoping to usher in a firm-friendly future in light of the ever-globalizing world economy.

The rise of cross-border terrorism has caused concern for many business leaders and potential investors in the region. Though the state of presumed instability may suggest a weakened business environment in the Middle East and Africa, contrary to media sensationalism these regions have made massive strides in improving the economic conditions for business owners alongside the threat of potential conflict. As always, there is much more than meets the eye.

A Binary Opposition between Appearance and Reality

In light of this, though most foreign policy surrounding terrorism concerns blunt force and combat, there is a need to not just strengthen the fighting power of our African and Middle Eastern allies, but also strengthen the structures that support them. The dangers portrayed by mainstream media are a bite-sized vision of the entire reality at play, as the emotional nuances of warfare footage packs a more memorable punch than the hard numbers Doing Business presents.

The toll of a nearby enemy is evident in the World Bank’s report. The Middle East and North Africa (MENA) is still held as the least transparent region internationally, and with the exception of Morocco there is little public engagement in forming regulatory policy. The region’s governance carries a relatively low regulatory quality but with great efficiency.

Improved Business Conditions as the Norm

Despite the multiplicity of issues these policy makers face, almost all nations within the Middle East and Africa have made huge strides to improve their business environment. This region currently represents half of the twelve nations that implemented four or more reforms, specifically Rwanda, Madagascar, Senegal, Morocco, and the United Arab Emirates. Across the board, low income economies have made much bigger improvements than high-income economies: Sub-Saharan Africa alone accounted for over 30% of all regulatory reforms made between 2014-2015.

In addition, Sub-Saharan Africa represents half of the top-ten improved economies as ranked by Doing Business, with Uganda, Kenya, Mauritania, Senegal and Bahrain implementing major economic reform. Within this region Rwanda also stands out, boasting a massive reduction in the number of days required to transfer property from 370 to a mere 32, and jumping from a score of 2 to 19 out of 20 on an index that rates the ease and efficiency of attaining credit.

The thirteen years of data collection has afforded the World Bank group several conclusions about the relationship between regulation, efficiency, and performance, and in this year’s Doing Business report they found that transparency during policy making was “highly and significantly” related to greater regulatory quality as well as efficiency. Currently in Mozambique, proposed regulations are published in a federal journal and distributed to stakeholders to encourage dialogue. In Ethiopia, Niger, and Afghanistan, public meetings are held so that the public and business leaders can be a part of the process of reform. In Kenya they even have a website for proposed regulations, where anyone at any time can weigh in on economic policy.

And Kenya’s not the only place that’s gone online- Rwanda made electronic tax filing and payment compulsory in 2014/15, and the time required for businesses to prepare and file taxes fell by 10 hours. Uganda introduced an online system for obtaining trading licenses, and other economies introduced systems where trade-related documents could be processed, including Benin, Côte D’Ivoire, Ghana, Madagascar, Mauritania, Suriname, Tanzania, and Togo. Currently, 25% of MENA nations have online systems for tax filing and payments, reducing the scope for bureaucratic discretion and corruption while increasing the system’s transparency, simplicity, efficiency, and cost-effectiveness.

The Best and the Worst

Countries’ ability to govern and enhance opportunities for citizens despite attacks from groups like ISIS and Boko Haram is commendable and demonstrates that optimism is in fact realistic. Turkey, though overrun with refugees, was able to streamline the process of obtaining construction permits. Saudi Arabia, with ISIS only 30km from their borders made property transfers faster by updating to a computerized registry system.

Nigeria and Kenya, the top two sub-Saharan nations affected by terrorism in the last year were still able to make their business environments healthier, with Nigeria reducing fees for property transactions and increasing the protection of minority investors by requiring external review. Kenya significantly reduced the time it takes to start a business by eliminating procedural inefficiencies, improved electronic document management for land registry, and improved access to credit, electricity, and proposed policy dialogues.

During a time of growing cross-border terrorism, with sensationalized militias such as Boko Haram and the Islamic State, as well as lesser known groups such as the al-Nusra Front or the Fulani militia, the significance of the stability a strong economy offers has never been so important. The relative security a growing economy offers provides the resources and willpower to combat terrorists, supports the persecuted, ensures justice, and dissuades the sympathetic from joining the extremists. Like many other groups branded with violence that preceded them, this generation of extremists will fall from within once they realize that peace is a more profitable reality.

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Egypt to procure poultry locally following industry pressure

Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Egypt will stick with buying its poultry domestically, turning its back completely on international tenders and bowing to pressure from its local producers, traders said on Monday.

The ministry of supplies said it will sign a protocol on Tuesday with the Egyptian Poultry Association to supply chicken at government cooperatives, just two weeks after holding its first-ever international tender for poultry.

Earlier this month the ministry said that Egypt’s state buyer, the General Authority for Supply Commodities (GASC) would import a broader array of essential items, including poultry and meat, in order to counter rising prices.

Egypt’s urban consumer inflation jumped to 9.7 percent in October on the back of rising food prices. Earlier in the month President Abdel Fattah al-Sisi said the government would take action to counter price increases.

GASC’s decision to tender for poultry upset local industry, which then offered to match the prices offered by companies that had submitted bids in the tender, one trader said.

Egypt’s local press reported last week that an offer from a U.S. company had been accepted to supply 500 tonnes of poultry, but GASC has yet to announce details of the deal, leading many traders to believe it would be canceled.

The decision to instead procure poultry locally raises questions over whether the importing body will be able to expand its mandate without running into fierce resistance from local industries that employ thousands of workers.

The ministry of supplies declined to comment.

 

(Reporting by Eric Knecht and Maha El Dahan, editing by William Hardy)

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Moroccan insurer AFMA aims to raise $18 million in share listing

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afma

RABAT (Reuters) – Moroccan insurance broker AFMA SA plans to raise 180 million dirham ($18 mln) in an initial public share offer, the country’s stock market watchdog said on Monday.

AFMA is owned by private Moroccan holding company Tenor group, which has subsidiaries in distribution, real estate and media. AFMA’s revenues have increased by about 10 percent annually over the last three years and reached 82.8 million dirhams for the first half of 2015, the company’s data showed.

The initial public offering (IPO) would be the second this year on the Casablanca stock exchange this year, which has suffered from the knock-on effects of the euro zone crisis and a lack of foreign investors.

Total Maroc listed in May.

Casablanca’s benchmark MASI index has fallen 3.7 percent this year. Morocco was downgraded to “frontier market” status by index provider MSCI in 2013, due to a lack of liquidity in the market.

Stock market watchdog CDVM said it had approved the issue. AFMA will sell 250,000 shares, or 25 percent of its shares, and they have been priced at 750 dirhams apiece. The offering is expected from Nov. 30 to Dec. 2.

Tenor group agreed also to sell 20 percent of the company’s shares in a block trade to Moroccan institutional investors CIMR and Fipar Holding for 130 million dirhams once the IPO is completed. CIMR is a pension fund for the private sector while Fipar is an affiliate of Morocco’s state investment vehicle Caisse de Depot et de Gestion (CDG).

CDVM said CIMR and Fipar had agreed to keep their stakes for at least three years.

(Reporting By Aziz El Yaakoubi; Editing by Susan Fenton, Reuters)

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Fracking in the Middle East and Africa

Comments (1) Featured, Middle East, Politics

algeria protests fracking

The Middle East is a region often portrayed as under threat from fracking, but with surging domestic demand, shale oil and gas hold significant potential.

A refresher for those who need it, hydraulic fracturing, or fracking, is the process of drilling around 3,000 meters down into the earth before pumping in large volumes of fracking fluid (water mixed with sand and chemicals) at high pressure, to fracture the earth’s shale and release trapped gas and oil. The process has been in use in the US since the 1940s, unlocking the country’s resources of an estimated 567 trillion cubic feet (Tcf) of shale gas and 58 billion barrels of shale oil. And it has revolutionized the country’s energy: in 2014 the US produced more than 33 billion cf of shale gas and if it continues at this same rate it is set to achieve self-sufficiency by 2020. With significant resources, Russia, China, Canada, and Latin America have quickly followed suit. As have India and other Asia-Pacific countries, though to a lesser extent.

The positives: fracking has the potential to boost the world’s natural gas resources by 47%, raise national energy supplies, increase self-sufficiency, and create jobs and income. It also has a significantly lower environmental impact than say, coal mining. But it comes with concerns, not least in regard to water supply. The fracking fluid contains chemicals which reportedly can contaminate groundwater supplies. It also requires huge quantities of water, about 2 to 5 million gallons per process, depleting pure water resources. And all this water must be transported to each fracking site, coming with more environmental costs.

Large quantities of methane are also released during the process, a substance which has 25 times greater greenhouse effect than carbon dioxide. And there are worries that fracking can cause small earthquakes. As a result, France, which is thought to have Western Europe’s biggest shale oil deposits, has introduced a five-year ban, and Germany has recently followed suit.

Significant potential for fracking in the Middle East and Africa

arabian oil and gasThe Middle East, which currently holds half the world’s conventional oil resources and 40% of its gas, is often portrayed as a region under threat from fracking as its traditional oil and gas customers become self-sufficient producers. But while it has perhaps been slower to exploit shale than most other regions, there is in fact significant potential in the Middle East and Africa. Thomas Ahlbrandt, who led a US Geological Survey in 2000, comments: “US source rocks are modest compared to the Silurian, Jurassic, Cretaceous and Tertiary source rocks in the region. The Silurian is found in Algeria, Libya, Saudi Arabia, Iraq and Jordan, while the giant North Field, shared by Iran and Qatar, is the conventional leg of a huge unconventional gas accumulation”. And the region is no longer ignoring the potential.

For example, Oman is on track to become the first Middle Eastern country to produce shale gas and oil. With an estimated 48 Tcf of natural gas and 6.2 billion barrels of oil technically recoverable, it is developing an ambitious drilling program which it hopes will produce at least 1 billion cf of gas per day by 2017. Working with US Apache and Shell Egypt, exploration of four potential basins is also underway in Egypt, where there is an estimated 100 Tcf and 6 billion barrels technically recoverable. Similarly, Kuwait’s state-owned Kuwait Oil Company has identified a viable shale gas deposit and is moving to extract. Libya is seeking foreign companies to conduct joint studies on the development of an estimated 121 Tcf and 26 billion barrels. And, as of March 2015, Bahrain has an exploration program in place in the Bahrain Field, exclusively with OXY.

Shale resources could be important for the region

Scarce in water sources and dependent on groundwater, one may ask why the Middle East and Africa region is pursuing fracking. Perhaps the key reason is the surging domestic demand for energy. Consumption rates have risen, resources have become more unstable, and conventional oil prices are fluctuating.

The UAE already imports gas from Qatar through the Dolphin pipeline and is looking at the potential of importing gas from America to cope with rising demand. But it could instead exploit an estimated 205 Tcf and 22.6 billion barrels of shale resources. Traditionally resource-poor Jordan has already signed an agreement with the Saudi Shale Rock Corporation with hopes of production by 2017 to meet demand. And in Saudi Arabia, the world’s largest consumer of crude oil for electricity, there are hopes that an estimated 600 Tcf of technically recoverable shale gas (more than double its conventional gas reserves) could stem a potential energy crisis. The national oil company ARAMCO has already carried out an appraisal drilling, and aims to produce 200 million cf of shale gas by 2018 to supply a new power station.

Unprecedented environmental protests across the region


But fracking is not being taken well everywhere across the region. In South Africa, environmental protests resulted in the government putting in place a shale exploration suspension in 2011. Heavily dependent on coal for 75% of its energy supply, the country could significantly benefit from tapping into its estimated 485 Tcf, predominantly found in the Karoo Basin. And Shell was one of three companies given an exploration permit back in 2010. But while the suspension has since been lifted and fracking regulations have been gazetted, it is still being strongly opposed by a coalition of environmentalists, farmers, and local residents. And recently, a two-year Strategic Environmental Assessment (SEA) was launched.

There’s a similar story in Tunisia, where civil rights organizations have pushed the Tunisian Minister of Industry to put fracking on hold until wide scale social dialogue has taken place.

And in the most obvious example there is Algeria, where the drilling of shale reserves has led to the breakout of an unprecedented environmental protest movement. Looking to profit from potential reserves of 707 Tcf and 5.7 billion barrels across six basins, the government has signed agreements with a number of companies, put in place tax breaks on shale drilling, and has begun a 20 year development program with a $70 billion investment. But since January this year, there have been wide scale demonstrations, sit-ins, civil disobedience, and clashes with police in Warkalah and Ain Al Saleh in the heart of the Sahara. Algeria’s President Abdelaziz Bouteflika has vowed to continue the exploratory work, while promising to protect the public’s health and the environment.

Indeed, if the region is to be successful as a shale gas and oil producer, it must prioritize wide scale social dialogue and environmental concerns. Otherwise there is a risk that demonstrations, which are potentially dangerous in such an area, could turn into political pressure that prevents any shale exploration at all.

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Egyptian shareholder in “constructive” talks with Adidas

Comments (0) Business, Latest Updates from Reuters, Middle East

BERLIN (Reuters) – Egyptian tycoon Nassef Sawiris, who controls 6 percent of the voting rights in Adidas, says he wants a constructive relationship with the German sportswear company.

Sawiris, whose NNS Holding fund has a 1.7 percent direct stake in Adidas, has also accumulated an additional 4.3 percent of the company’s voting rights due to “put” options he has bought that should allow him to acquire further shares.

Asked about his intentions for the investment, Sawiris told Reuters by telephone he was “interested in a constructive dialogue” with the company.

Adidas Chief Executive Herbert Hainer said last week the company had quite an “intense dialogue” with most of its key shareholders. Asked about Sawiris, he said: “Everybody is welcome and if somebody can help us we are open to listen.”

Earlier this year, Belgium’s richest man Albert Frere, who together with Sawiris was a major shareholder in French cement company Lafarge before its merger with Swiss rival Holcim, acquired a 3 percent stake in Adidas.

They have made these investments as Adidas is looking for a successor to long-serving Hainer, who came under fire last year after the company lost more market share to Nike and suffered from falling golf sales and its exposure to Russia.

Adidas shares have risen 18 percent in the last three months, compared to a 6 percent fall in the German blue-chip index. J.P. Morgan analysts said the rise could partly be explained by the stock building of Sawiris.

In May, Hainer said he had hired advisers to help fend off any potential hostile takeover bid, although he said back then Adidas had not been approached by activist investors seeking to build a stake.

Adidas said in August it was considering the possible sale of its golf brands, as demanded by some investors, but Hainer has rejected selling fitness brand Reebok, saying the long-struggling business he bought in 2005 is now on the mend.

Adidas shares jumped last week to their highest level since January 2014 after the company reported better-than-expected third-quarter results, raised its full-year guidance for sales and profits and gave an upbeat outlook for 2016.

 

(Reporting by Emma Thomasson and Joern Poltz; Editing by Arno Schuetze and Jane Merriman, Reuters)

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Africa, the Middle East, and the Future of Football

Comments (0) Africa, Featured, Middle East, Politics

fifa

In 2010 South Africa hosted the first World Cup to be held on the African continent. Following ex-President Sepp Blatters scandal of corruption and vote-rigging this summer, FIFA is once again turning to the Middle East and Africa for solutions and a new vision for the organizations future.

Since the founding of FIFA in 1904 all but one President has been European, with the exception of Brazilian João Havelange. But the candidate list confirmed by FIFA last week boasts a truly 21st century roster; four out of the seven candidates hail from the Middle East and Africa, signaling not only the globalization of football but also the millions of fans represented in this region.

The Untapped Potential

Andrew Walsh of the sports research group SPORT+MARKT, notes an “increasing awareness of the scope for growth in Africas key football markets. And its not just FIFA that is gaining interest in the region, but all of football leadership. Africa is a hot-bed of untapped potential for clubs due to the sheer numbers of fans there. No other continent on earth harbors such a high ratio of football interest,Walsh added.

And hes not exaggerating. In a 2011 study, SPORT+MARKT revealed that 72 per cent of Africas 1.12 billion people, aged between 16-69, have an interest in football, roughly 800 million football fans. The study shows that 55 per cent of them are interested in the Premiership, while 39 per cent actively support an English top flight team.

In comparison, Europes entire population is 742.5 million people- the fact that there are millions more African football fans than the entire population of Europe illustrates why FIFAs newly diverse potential presidential candidates mirror the future of football.

south africa worldcup

The Odds

Despite the numbers, many sport bookies seem to favor Frenchman Michel Platini as the likely winner of the upcoming elections. But as a long-time FIFA executive currently on suspension alongside Blatter, many Union of European Football Associations (UEFA) members doubt that he will be able to oversee the far-reaching reform needed following Blatters regime- especially since hes trying to hold onto his UEFA presidency at the same time.

The FIFA presidency requires full attention to achieve necessary reform, so its likely that when it comes to the vote UEFA members will swing behind a candidate that will bring a fresh-start to the organization.

The Candidates

Likely candidate Jordanian Prince Ali bin al-Hussein ran against Blatter in this summers elections and nearly won, with UEFAs backing as well as the support of Asian and African regional football associations. A former FIFA Vice President, veteran politician, and current President of the West Asian Football Federation, Prince Ali seems like a worthy contender to Platini. However in the last Vice Presidential election, Prince Ali lost to Sheikh Salman bin Ebrahim, another candidate with a strong running for the presidency.

Sheikh Salman also has an impressive track record and a proven ability to consolidate votes. A Bahraini FIFA Vice President, Salman is on the task force to untangle football disputes between Israel and Palestine, and has targeted match-fixing, grassroots development, and womens involvement during his time as President of the Asian Football Confederation, an organization mired by historic corruption and transparency issues.

Turn FIFA around really quickly

Salman currently denies allegations of human rights abuse concerning the violent suppression of pro-democracy campaigns in Bahrain in 2011, where over 150 athletes were imprisoned. Salman is a historic Blatter fan and a backer of the controversial Qatari and Russian World Cup bids, but he reckons hell turn FIFA around really quickly

Musa Bility, Liberian Football Association President and oil mogul, is also plagued by a controversial history concerning his 6-month football ban in 2013 and allegations that he won his presidency by buying votes for $500 a piece.

Among all the candidates, Tokyo Sexwale has the most divergent CV: a millionaire mining tycoon and anti-apartheid activist, Sexwale was imprisoned for 13 years in Robben Island alongside Nelson Mandela. A former FIFA Vice President, Sexwale was also key member of South Africas winning World Cup bidding team, and a chief organizer of the competition. Though the bid has drawn allegations for bribery, Sexwale has not been accused of any wrongdoing and has publicly criticized the payments, calling it worrisomefor the future of football in a BBC interview.

Despite FIFAs need for a fresh-start, many candidates have a history of wrongdoing to address. Currently embroiled by scandal, FIFA needs a new figurehead fast to clean up the mess and criminal reputation Blatter left behind. Recovering from collapse will be tricky without strong leadership, but its undoing offers a once-in-a-lifetime chance to build an international governing body fit for its purpose. It would be a true crime to waste it.

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An Untapped Resource: Emerging Fields of Employment for Women in the Middle East

Comments (0) Business, Featured, Middle East

middle east women in tech

Echoing global trends, in the Middle East the number of women pursuing a university degree is equal to, or higher than the number of men. In Kuwait, Qatar, Saudi Arabia, and Jordan women constitute respectively 67%, 63%, 57%, and 51% of university graduates. Arab women outnumber men in even the hard sciences. Indeed, the number of female STEM graduates is higher in the Middle East than it is in Western Europe. But as of yet, these advances in education have not translated into jobs. The number of women in paid employment in the MENA region is the world’s lowest, at 32%. In Jordan that figure is 16%. And women are more than three times as likely to be unemployed as men in Saudi Arabia and Qatar. In Kuwait, nearly 80% of the unemployed are women.

Persistent social and economic barriers – both perceived and real – are standing in the way. How will women travel to work when they’re not allowed to drive? Who will escort them? Who will look after their children? And what happens if they become pregnant? Comprehensive female employment will require governments to enact new laws. And it will require companies to create separate offices, bathrooms, entrances, and more.

However, representing a highly educated talent pool and an untapped resource that could offer the region a competitive advantage, women are perfectly qualified to play a productive role in the workforce. And indeed, there are now some positive signs that fields of female employment are starting to emerge and that businesses are starting to capitalize on the potential of Middle Eastern women.

More female Internet entrepreneurs in the Middle East than in the West

Technology is playing a significant role. In a region where nearly a third of the 355 million population are aged 15 to 25, Internet and social media penetration is very high. Nearly 90% access the web from home (except in Jordan and Egypt where the figure is 44%-50%). And nearly nine in ten Internet users log in to social media every day. Nowhere in the world does Twitter have more active users in proportion to the population than in Saudi Arabia. Unsurprisingly, the region is also the world’s fastest-growing e-commerce market.

The combination is creating opportunities for women, allowing them to set up small businesses from home where they can at once conform to traditional social norms and work. Indeed, where only 10% of Internet entrepreneurs across the world are women, in the MENA region that figure is 35%.

sheburgerJust a few examples: Emirati Shaikha Eissa has built a successful burger company, She Burger, on Instagram utilizing her 25,000 followers. Mona Ataya has launched a baby product retail site, Mumzworld, targeting female shoppers, which employs 40 people and sells more than 100,000 products. And prominent Palestinian Instagrammers Ruba Abdulhadi and Badea Jaber, have brought luxury western fashion to the Middle East with an e-shop, ElMuda.com, which leverages social content.

ElMuda.com was supported by Oasis500, the first early stage and seed investment company in Jordan and the MENA region. And there are many other bodies similarly investing in the region’s female entrepreneurs. The Gaza Sky Geeks accelerator is actively working to increase women’s leadership in the Gaza start-up sector. Girls in Tech is working to inform women in urban and rural communities around the world about the possibilities that tech can open up. And the US State Department has a TechWomen initiative which pairs MENA female tech entrepreneurs with American counterparts in Silicon Valley.

Fetchr is revolutionizing Middle Eastern delivery with a female workforce

E-commerce is also creating further employment opportunities for women. For example, GPS delivery app Fetchr has developed a female workforce to revolutionize delivery in the region. Currently, much of e-commerce is paid for cash on delivery (60%), but if a woman is home alone she won’t answer the door for a male driver. This results in returned products, lag times in payment, and repeat delivery trips. In solution, Fetchr, operating in Saudi Arabia, Dubai, and Bahrain, has employed women to make the deliveries.

Co-founders Joy Ajlouny and Idriss al-Rifai say: “In Saudi Arabia, women are not allowed to drive. Our deliverywomen will not be driving, they’ll just be knocking on doors. And because Saudi law dictates that all women must be accompanied in public spaces by a mahram, a male-relative or in-law escort, Fetchr employs family teams. Father-daughter, brother-sister, uncle-niece.” The company is also actively hiring female drivers in the UAE where women are allowed to drive.

Creating new business spaces for women

Fetchr is not the only company capitalizing on the business benefits of a female workforce. In Saudi Arabia, the Olayan Group, a 30-company conglomerate led by Lubna Olayan, is similarly committed to female employment. The Group, which deals in investing, real estate, manufacturing and distribution for foreign brands including Coca-Cola, Ritz Crackers, and Oreos, currently employs some 400 women (3% of its 12,000 Saudi-based employees). It has set a target to have 1,000 female employees in roles at all levels, from the factory floor to sales and management, by 2016.

Lubna Olayan

Lubna Olayan

The Group’s first female employees, mostly disadvantaged women, made history when they became Saudi Arabia’s first ever female factory workers, sewing surgical gowns at Enayah. Coca-Cola bottling now has an all-female bottling line. And Nabisco Arabia has a woman-only production line. Olayan companies have installed female prayer rooms and created partitions in offices, canteens, and factory floors to give their women workers privacy in line with regulations. There are also women-only buses to and from work.

Because yes, in the short term female employment in the MENA region will take some investment. But in the long term, capitalizing on the potential of a whole sector of society will also come with benefits.

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Tunisian annual inflation rises to 4.6% in October

Comments (0) Business, Latest Updates from Reuters, Middle East

TUNIS (Reuters) – Inflation rose to 4.6 percent in October after remaining steady for the past three months at 4.2 percent, official figures showed on Thursday.

The food and drink price index rose 5.6 percent in October from a year earlier, the state statistics institute said.

Tunisia’s central bank said last week it had cut its main interest rate to 4.25 percent from 4.75 percent to boost economic growth, as inflation rates fell.

Inflation dropped to 4.4 percent in the first 10 months of this year, compared with 5.5 percent last year.

The bank does not target a particular inflation rate but says the highest that should be tolerated is 5 percent.

 

(Reporting by Tarek Amara; Editing by Tom Heneghan, Reuters)

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Siemens could expand Egypt power deal, says CEO

Comments (0) Business, Latest Updates from Reuters, Middle East

FRANKFURT (Reuters) – Siemens could win an expansion of its record 8 billion euro ($8.8 billion) power deal with Egypt, the German industrial group’s chief executive said in a staff newsletter.

Joe Kaeser said Egypt, whose state-run electricity grid is creaking under the weight of fast-growing demand, needed extra capacity before the start of the hot summer months – faster than Siemens could build new turbines under the existing deal.

“We had to come up with a good plan as to how we could help – and this plan pleased the president,” Kaeser said after a trip to Egypt during which he met President Abdel Fattah al-Sisi.

“We have a handshake on which we can build,” he added in the interview with Siemens Welt seen by Reuters on Friday.

The extra capacity would be 800 megawatts, which would be produced by upgrading existing power stations and putting into place decentralised power-generation units, Kaeser said. He did not say how much the deal could be worth.

The 8 billion-euro deal signed in June was for 16.4 gigawatts and is designed to boost Egypt’s power-generation capacity by 50 percent after going online in 2017.

 

(Reporting by Georgina Prodhan; Editing by Mark Potter, Reuters)

 

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Souq.com CEO Ronaldo Mouchawar: Empowering the Middle East through E-commerce

Comments (0) Featured, Leaders, Middle East

RONALDO-MOUCHAWAR

Born and raised in Aleppo, Syria, Ronaldo Mouchawar is the co-founder and CEO of the Arab world’s largest online shopping site and a pioneer of e-commerce in the region. He is also an eloquent symbol of a rising trend that’s seeing entrepreneurs reject the, if not saturated then busy, Western market, so long seen as the choice, in favor of using their expertise and innovative spirit to revolutionize and empower the market at home.

Originally trained in the West, Mouchawar was educated at Northeastern University, Boston, where he obtained a Bachelors in Electrical and Computer Engineering, and a Masters in Digital Communications. He also spent the early years of his career in the US working in technology and business management, including a role as technical and systems consultant at Electronic Data Systems (EDS).

But in 2000, he returned to the Middle East with a belief he could improve the Arab world by exploiting the empowering possibilities of technology. He first launched a consulting company managing web and e-commerce projects for the local Arab market, before in 2005 joining forces with Maktoob’s Samih Toukan and Hussam Khoury to launch online retail site and marketplace for third party sellers, Souq.com, just as the Arab world began to embrace technology and mobile.

A decade on, Dubai headquartered Souq.com, known as the Amazon of the Middle East, now operates in the UAE, Egypt, Saudi Arabia, and Kuwait, and ships to Oman, Qatar, and Bahrain, selling more than 400,000 products from consumer electronics, to fashion, household items, and babywear. And it is growing fast: in the last two years, Souq has expanded ten times over; and in 2014 it saw an annual growth of over 100%. The site sees 30 million unique visitors per month, of which more than 10 million are on mobile. And an app, launched in 2014, has now been downloaded around two million times. There are rumors that Souq is fundraising at a valuation of $1 billion.

It’s some success story. But Mouchawar still considers his company a startup. While in financial terms this cannot be considered true, he says: “If continuing to think of Souq as a startup helps us innovate, then great.”

Innovating the e-commerce model for Arab markets

Certainly, Mouchawar’s ability to innovate has been key to Souq’s success. Originally launched as an auction site modeled on eBay, he quickly redirected the company into a fixed price model, recognizing its potential in the Middle East. And while Souq.com may now superficially seem like a copycat-Amazon, Mouchawar has transformed that business model for the market: he has localized and arabized e-commerce.

For example, Souq.com has gone some ways to rebalance the disparity between the availability of Arabic content online (currently just 3% of all content) and the number of Arabic speakers around the world (around half a billion). Arabic content has become a Souq forte, as are localized promotions, partnerships, and exclusive products. Mouchawar has also adapted operations for Middle Eastern challenges. For instance, in Egypt, only about 10% of the population have credit cards, and in countries like Bahrain and Saudi Arabia, 60% of online purchases are still paid for via cash on delivery. Mouchawar has developed prepaid cards which can be purchased in real life (IRL) and used online. He has also overcome an underdeveloped logistics infrastructure by developing a Souq-owned local delivery system offering “last mile” deliveries to places with no mail service or postal address, along with investing in local logistics companies and building relationships with local couriers. Souq teams are also in place in the majority of Souq’s operating countries, to continually innovate local solutions for area-specific problems.

Job creation in the Middle East

But Mouchawar believes his e-commerce solutions can have even further reaching impacts: he believes that e-commerce can empower.

“We believed the Internet and e-commerce specifically could be an empowering tool to support SMEs, and help create a knowledge base economy where we employ as many people and create jobs, as our region needed it,” he says. “It could create badly needed jobs for young people and boost the businesses that are the backbone of Arab economies.” “Imagine the access a merchant can have from a street in Cairo to a customer base in Saudi Arabia, to the UAE. If we can connect all these dots, you will have an incredible customer base.”

The Souq.com website proudly reveals that it employs 1,000 people directly and has provided jobs for another 6,000 people indirectly through its networks of partners, suppliers, and couriers, “not to mention the 75,000+ sellers, many of whom have built their livelihood via the website”.

Unsurprisingly, Mouchawar has become one of the Middle East’s most prominent entrepreneurs, visible and accessible on the startup circuit, speaking at conferences, and looking to inspire where he can.

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